Tech Crunch

Apple’s App Tracking Transparency feature will be enabled by default and arrive in ‘early spring’ on iOS

Apple has shared a few more details about its much-discussed privacy changes in iOS 14. The company first announced at WWDC in June that app developers would have to ask users for permission in order to track and share their IDFA identifier for cross-property ad targeting purposes. While iOS 14 launched in the fall, Apple delayed the tracking restrictions until 2021, saying it wanted to give developers more time to make the necessary changes.

Now we’ve got a slightly-more-specific timeline. The plan is to launch these changes in early spring, with a version of the feature coming in the next iOS 14 beta release.

This is how Apple describes the new system: “Under Settings, users will be able to see which apps have requested permission to track, and make changes as they see fit. This requirement will roll out broadly in early spring with an upcoming release of iOS 14, iPadOS 14, and tvOS 14, and has already garnered support from privacy advocates around the world.”

And here are the basics of what you need to know:

  • The App Tracking Transparency feature moves from the old method where you had to opt-out of sharing your Identifier for Advertisers (IDFA) to an opt-in model. This means that every app will have to ask you up front whether it is ok for them to share your IDFA with third parties including networks or data brokers.
  • The feature’s most prominent evidence is a notification on launch of a new app that will explain what the tracker will be used for and ask you to opt-in to it.
  • You can now toggle IDFA sharing on a by-app basis at any time, where previously it was a single toggle. If you turn off the “Allow apps to request to track” setting altogether no apps can even ask you to use tracking.
  • Apple will enforce this for all third-party data sources including data sharing agreements, but of course platforms can still use first party data for advertising as per their terms of service.
  • Apple expects developers to understand whether APIs or SDKs that they use in their apps are serving user data up to brokers or other networks and to enable the notification if so.
  • Apple will abide by the rules for its own apps as well and will present the dialog and follow the ‘allow apps to request’ toggle if its apps use tracking (most do not at this point).
  • One important note here is that the Personalized Ads toggle is a separate setting that specifically allows or does not allow Apple itself to use its own first party data to serve you ads. So that is an additional layer of opt-out that affects Apple data only.

Apple is also increasing the capabilities of its Ad attribution API, allowing for better click measurement, measurement of video conversions and also — and this is a big one for some cases, app-to-web conversions.

This news comes on Data Privacy Day, with CEO Tim Cook speaking on the issue this morning at the Computers, Privacy and Data Protection conference in Brussels. The company is also sharing a new report showing that the average app has six third-party trackers.

While this seems like a welcome change from a privacy perspective, it’s drawn some criticism from the ad industry, with Facebook launching a PR campaign emphasizing the impact on small businesses, while also pointing to the change as “one of the more significant advertising headwinds” that it could face this year. Apple’s stance is that this provides a user-centric data privacy approach, rather than an advertiser-centric one.

 

ByteDance is cutting jobs in India amid prolonged TikTok ban

Chinese internet giant ByteDance has told employees in India that it is reducing the size of its team in the country after New Delhi retained ban on TikTok and other Chinese apps last week, a source familiar with the matter told TechCrunch.

The company, which employs more than 2,000 people in India, shared the news with employees in the country at 10am local time and said only critical jobs will be retained in the country, the source, company, and an internal memo obtained by TechCrunch said. ByteDance said it was left with no choice after the Indian government, which banned its marquee app late June last year, had offered no clear direction on when TikTok could make return in the nation, the source said on the condition of anonymity.

“It is deeply regretful that after supporting our 2000+ employees in India for more than half a year, we have no choice but to scale back the size of our workforce. We look forward to receiving the opportunity to relaunch TikTok and support the hundreds of millions of users, artists, story-tellers, educators and performers in India,” a TikTok spokesperson told TechCrunch.

Prior to the ban, India was the biggest international market for TikTok.

TikTok CEO Vanessa Pappas and VP of Global Business Blake Chandlee shared more context about the move in a memo to India employees today. “We initially hoped that this situation would be short-lived, and that we would be able to resolve this quickly. Seven months later, we find that has not been the case. Many of you have patiently waited to hear how this would play out, which has been very stressful. Thank you for your continued belief and trust in us,” they wrote.

“As you can imagine, a decision of this magnitude is not easy. For the last several months, our management team has worked tirelessly to avoid having to separate anyone from the company. We’ve cut expenses, while still paying benefits. However, we simply cannot responsibly stay fully staffed while our apps remain un-operational. We are fully aware of the impact that this decision has for all of our employees in India, and we empathize with our team.”

Today’s move caps some of the strangest and confusing months for ByteDance employees in India. Following the ban, the employees were told to focus on developing a range of other apps from the Chinese giant such as the productivity suite Lark that had not been blocked in India.

But they were asked to not talk about these apps in the public to avoid putting risk of other ByteDance properties also getting the limelight. The source said ByteDance also stopped all marketing efforts in India to promote its other services in the country.

“While we don’t know when we will make a comeback in India, we are confident in our resilience, and desire to do so in times to come,” Pappas and Chandlee wrote in the memo.

This is breaking news. Check back for more information.

A look at the soaring valuations of Rivian and Cruise with transportation VC Reilly Brennan

Perhaps more than most, Reilly Brennan loves cars and trucks. The native Michigander happily did grunt work for an automotive magazine as an undergrad at the University of Michigan before landing a gig as a trackside communications manager at General Motors, spending a few years as an editor and a general manager with an automotive publisher called NextScreen, then becoming a programming director for AOL’s automotive properties.

His next role would be on the West Coast, as executive director of an automotive research program at Stanford, where Brennan continues to be a lecturer. Little surprise that soon after, a seed-stage fund began to make sense, too, and thus was born Trucks Venture Capital, which has since made dozens of bets out of a $20 million debut effort and is wrapping up a larger fund soon.

Late last week, we talked with Brennan about two of the fastest-soaring valuations we’ve seen recently in the automotive sector: that of the electric vehicle company Rivian, which raised a giant new round last week at a nearly $30 billion post-money valuation, and Cruise Automation, which also raised a giant new round last week, and also at $30 billion valuation. (Along with some other interesting bets, Trucks managed to write an early check for Cruise before it was acquired in 2016 by GM, which maintains majority ownership of the company.)

We wondered if even an auto aficionado might deem things a little bubbly. You can listen to that full conversation here. In the meantime, the excerpts below have been lightly edited for length and clarity.

TC: Who are your investors in Trucks VC? Are they individuals? Are any auto manufacturers that are trying to get a look at nascent technologies?

RB: We have some former execs from the car industry in the tech world, and a handful of family offices and definitely some large strategic companies. Unfortunately, I can’t tell you their names because I’ve signed documents that prevent me from doing that. But one of the cool things about our little Rolodex of [limited partners] is that our founders — when they want to come in and do something in transportation — it’s an easy doggie door into a lot of those entities, whether they’re people or businesses. One of the things I love about [the mix is] there’s probably no part of a vehicle, whether you’re talking about a car, truck, a bike, or a plane, that one of our investors couldn’t help out with.

TC: Do you look to be the first money into your deals?

RB: One of the interesting learnings I had in the first fund was, we were just trying to participate; we were just happy to be at the party. So we were participating in rounds that other people were leading, and our checks [from Fund I] were anywhere from $100,000 to a few thousand dollars.

The new fund is designed to take advantage of leading rounds [because] halfway through our first fund, founders would ask us to lead rounds, and frankly, the fund wasn’t big enough to do that. Our new fund is really designed so we can lead seed rounds, and that’s what we do. We’ll lead or co-lead and sit on the board. Usually, we’re  owning about 10% to 12% of a company at seed.

TC: One of Truck’s early checks went to Cruise, the self-driving car company that GM acquired for an amount that has variously been reported as more than $1 billion, as well as for closer to $500 million . . .

RB: The Cruise investment, my [fellow general partners] Jeff and Kate made. I can’t tell you specifically what the acquisition price was, but it was pretty good. That being said, if you read about the valuation of Cruise now within General Motors, or that of another [self-driving] company we invested in, Nutonomy, which was acquired by [automotive supplier] Delphi [for $450 million in 2017] and is now essentially a company called Motional, they’re pretty high.

I think a lot about those early exits because they validated the space, but I also think a lot of the early investors probably wish they had more ownership. I’m not saying they shouldn’t have sold. But you look at the valuation of Cruise and Motional today — if you put those two entities together — it’s more than the valuation of General Motors, or maybe Ford Motor Company.

TC: But is Cruise’s valuation perhaps too high right now? They still have a very long lead time to making money.

RB: I would agree with you that in the public market, it feels a little bubbly when it comes to electric vehicles and some of these ideas related to technology and auto. But I do think a lot of these companies look at the opportunity to automate things greater than just robo-taxis. Last year in particular provided good insight into how the logistics and delivery part of automation is probably on the nearer term horizon than robo-taxis and therefore more valuable.

TC: How much have valuations been driven up by Tesla, whose valuation now dwarfs all the major car manufacturers?

RB: One of the things the market appears to want is the simple story, and belief in Tesla is now highly aligned to [thinking that] this is just the way that transportation is going to be organized. It’s going to be a zero-emission vehicle that is highly connected and maybe attached to a consumer in a new way.

You’re seeing the same with a lot of these pure-play EV companies, whether it’s [carmaker] Fisker doing a SPAC or the way that [carmaker] Neo is received in China. There’s this purity of their message.

You can argue, successfully, that a lot of other companies have more engineering or a greater dealer network or more IP around a particular idea, but when it comes to the public market stuff, it really is about painting the picture in this one specific way that’s aligned with the future. And right now, the public markets really don’t like that composite, liberal arts approach to vehicle manufacturing; they really just want one thing that aligns very well with the future, which they believe is better electric vehicles.

TC: This seemingly applies to the Detroit carmaker Rivian. What do you think of this company that’s valued at nearly $30 billion yet hasn’t yet sold a truck or SUV? You aren’t one of its investor. Does its valuation make sense to you?

RB: From an engineering perspective, Rivian is probably one of the companies I respect most out of this new breed of manufacturers.

Tens years ago, when they started, there were a lot of new supercar entrepreneurs who were trying to start something new, but they were always small batch ideas. Like, maybe you could get 100 people to buy one. But they weren’t really well-aligned with what consumers were buying, which is increasingly utilities and trucks. So Rivian’s approach, with the segment it’s going after, is really smart, and it has fantastic engineering. So I’m actually quite bullish on Rivian.

In a year’s time, there will probably be two big events for Rivian. One, they will deliver the first batch of [electric delivery vans being built for investor] to Amazon, along with [other orders] to some of the early customers. It also wouldn’t surprise me if they’re public at some point in the next year.
They haven’t told me that; just my own personal speculation here.

TC: When you say it will go public, do you mean through a traditional IPO or maybe through a giant SPAC? Would what you guess?

I bet that Rivian will probably do a traditional IPO, that’s my guess. But they could also do a SPAC at some point. [Either way] I think the public markets are going to be really interested in Rivian. I just think there’s really good stuff there.

TC: Have you been able to test-drive its cars? Have you seen its tech up close? What makes you so confident that what Rivian is building is superior?

RB: I think the point of view they have about the segments is really interesting In the U.S., they are going after two great-growing segments in the business, which is utilities and trucks where, by the way, there’s a lot of margin, and there’s nobody specifically going after those segments.

The Rivian engineering that I speak about is really about the hires they’ve made and a lot of things they’ve done for years in advance of getting these vehicles ready. They’ve got a lot of amazing talent from big manufacturers. They made an unusual but really smart investment in a vehicle assembly facility that they purchased for relatively cheap years ago that was owned by Mitsubishi. And they put together all these components well in advance of anybody really even knowing about them, which is really smart.

Obviously, there’s still a huge amount of risk. What I’m saying is not investment advice. I just think there’s a lot of interesting stuff there that’s head and shoulders above many of the other EV companies, where there’s not a lot of substance, to be candid.

TC: My colleague Kirsten reported in December that Rivian is developing a network of charging stations along interstate highways and also at spots like hiking trails to accommodate who it imagines will be its customers. Does that make sense to you? Relatedly, how many different types of charging stations are we going to have in the world?

[Regarding the location of its stations], it’s definitely a nice ingredient in the story they’re trying to tell, though I don’t think you’ll see a Rivian charger at the entry point of every national park. They’ll probably have access to other charging networks. One of the things we’re seeing in the U.S. is you have some of these dedicated networks like Tesla has, and then you have a lot of agnostic [stations], where you can plug in and charge in a lot of other places, and Rivian will likely take advantage of that. An open question would be whether Rivian builds its own [larger] dedicated network that has a lot of coverage, and I don’t know about that yet.

The other component about Rivian that’s really fascinating is what they do for service and maintenance. I saw an open job that Rivian had a few months ago around remote diagnostics, and one of the bullet points of the job posting was that this job was really designed so that people didn’t have to go back to the dealership. [It begs the question of]: could you design experiences digitally,  as with [on-demand remote doctor visits], where you could potentially talk to somebody live, you could [have Rivian] assess the vehicle, or maybe walk you through a situation where you can fix something that would prevent a lot of the trips to dealer?

If you consider the traditional dealer and OEM relationship, a lot of the ways that cars are designed is that they’re constantly having to go back to the dealer. Rivian’s point of view on that is really different, and that’s one of the other reasons it’s one to watch.

Cybersecurity startup SpiderSilk raises $2.25M to help prevent data breaches

Dubai-based cybersecurity startup SpiderSilk has raised $2.25 million in a pre-Series A round, led by venture firms Global Ventures and STV.

In the past two years, SpiderSilk has discovered some of the biggest data breaches: Blind, the allegedly anonymous social network that exposed private complaints by Silicon Valley employees; a lab leaked highly sensitive Samsung source code; an inadvertently public code repository revealed apps, code, and apartment building camera footage belonging to controversial facial recognition startup Clearview AI; and a massive spill of unencrypted customer card numbers at now-defunct MoviePass may have been the final nail in the already-beleaguered subscription service’s casket.

Much of those discoveries were found from the company’s proprietary internet scanner, SpiderSilk co-founder and chief security officer Mossab Hussein told TechCrunch.

Any company would want their data locked down, but mistakes happen and misconfigurations can leave sensitive internal corporate data accessible from the internet. SpiderSilk helps its customers understand their attack surface by looking for things that are exposed but shouldn’t be.

The cybersecurity startup uses its scanner to map out a company’s assets and attack surfaces to detect vulnerabilities and data exposures, and it also simulates cyberattacks to help customers understand where vulnerabilities are in their defenses.

“The attack surface management and threat detection platform we built scans the open internet on a continuous basis in order to attribute all publicly accessible assets back to organizations that could be affected by them, either directly or indirectly,” SpiderSilk’s co-founder and chief executive Rami El Malak told TechCrunch. “As a result, the platform regularly uncovers exploits and highlights how no organization is immune from infrastructure visibility blind-spots.”

El Malak said the funding will help to build out its security, engineering and data science teams, as well as its marketing and sales. He said the company is expanding its presence to North America with sales and engineering teams.

It’s the company’s second round of funding, after a seed round of $500,000 in November 2019, also led by Global Ventures and several angel investors.

“The SpiderSilk team are outstanding partners, solving a critical problem in the ever-complex world of cybersecurity, and protecting companies online from the increasing threats of malicious activity,” said Basil Moftah, general partner at Global Ventures.

Instacart to eliminate about 2,000 jobs and GitHub head of HR resigns

Hey y’all. You’ve just landed on Human Capital, the weekly newsletter that details the latest in labor, and diversity and inclusion in tech. The week kicked off with GitHub making a public apology to the person the company terminated for cautioning his employees about Nazis in D.C. on the day of the insurrection at the U.S. Capitol.

Later in the week, Google revoked corporate access from AI ethicist Margaret Mitchell in what some are saying is reminiscent of the company’s treatment of Dr. Timnit Gebru. Meanwhile, Instacart is making some changes to its platform that will result in job loss. 

Sign up below to get this in your email every Friday at 1 p.m. PT.

GitHub’s head of HR resigns; company offers fired Jewish employee his job back

A GitHub internal investigation revealed the company made “significant errors of judgment and procedure” in the firing of the Jewish employee who cautioned his coworkers about the presence of Nazis in the D.C. area on the day of insurrection at the U.S. Capitol.

In a blog post, GitHub COO Erica Brescia said the company’s head of HR took full responsibility for what happened and resigned from the company yesterday. GitHub did not disclose the name of the person who resigned, but it’s widely known that Carrie Olesen was the chief human resources officer at GitHub.

GitHub said it has “reversed the decision to separate with the employee” and is talking to his representative.

“To the employee we wish to say publicly: We sincerely apologize,” Brescia said in the blog post. However, the terminated employee previously told me that he did not want his job back but instead some other form of reconciliation.

Google AI ethicist under investigation 

Google is investigating AI ethicist Margaret Mitchell for reportedly using automated scripts to find examples of mistreatment of Dr. Timnit Gebru, according to Axios. Gebru says she was fired from Google while Google has maintained that she resigned. In a statement to Axios, Google said the company had locked Mitchell’s account:

Our security systems automatically lock an employee’s corporate account when they detect that the account is at risk of compromise due to credential problems or when an automated rule involving the handling of sensitive data has been triggered. In this instance, yesterday our systems detected that an account had exfiltrated thousands of files and shared them with multiple external accounts. We explained this to the employee earlier today.

The recently-formed Alphabet Workers Union made a statement saying it was concerned by Mitchell’s suspension of corporate access:

“Regardless of the outcome of the company’s investigation, the ongoing targeting of leaders in this organization calls into question Google’s commitment to ethics—in AI and in their business practices. Many members of the Ethical AI team are AWU members and the membership of our union recognizes the crucial work that they do and stands in solidarity with them in this moment.”

Google’s Sundar Pichai to meet with HBCU leaders

At least five HBCU presidents are scheduled to meet with Google CEO Sundar Pichai and Chief Diversity Officer Melonie Parker later this month to discuss recent allegations of racism and discrimination at the company, according to CNN. Additionally, the goal of the meeting is to ensure HBCUs have a good relationship with Google and that the company offers a good environment for its students and graduates.

Context:

I’m finna tell yall why @Google fired me- their MOST successful diversity recruiter in the history of their company- with the receipts to support that statement.

— Real Abril🌈 (@RealAbril) December 21, 2020

Amazon launches anti-union website

Ahead of Amazon warehouse workers in Alabama gearing up to vote on whether to form a union, Amazon launched an anti-union website. Called Do It Without Dues, the site aims to dissuade workers from voting to unionize.

Instacart plans to terminate nearly 2,000 jobs 

Instacart plans to lay off nearly 2,000 of its workers, including the 10 workers from the Kroger-owned Mariano’s who unionized early last year, Vice reports. These workers are responsible for in-store shopping and packing of groceries.

According to Vice, 10 of the workers affected unionized with the United Food and Commercial Workers Local 1546 in Skokie, Illinois. However, they have yet to negotiate a contract with Instacart, according to Vice. Instacart notified the union of the planned changes earlier this week. In the letter, Instacart said it planned to stop using in-store shoppers at Kroger-owned stores, which includes the Mariano’s store in Skokie, in Q1 and Q2 of this year, but no earlier than mid-March.

Is any company too big to be SPAC’d?

While many deemed 2020 the year of SPAC, short for special purpose acquisition company, 2021 may well make last year look quaint in comparison.

It’s probably not premature to be asking: is there any company too big to be SPAC’d?

Just today, we saw the trading debut of the most valuable company to date go public through a merger with one of these SPACs: 35-five-year-old, Pontiac, Michigan-based United Wholesale Mortgage, which is among the biggest mortgage companies in the U.S.

Its shares slipped a bit by the end of trading, closing at $11.35 down from their starting price of $11.54, but it’s doubtful anyone involved is crying into their cocktails tonight. The outfit was valued at a whopping $16 billion when its merger with the blank-check outfit Gores Holdings IV was approved earlier this week.

Why is this interesting? Well, first, despite UWM’s size, unlike with a traditional IPO that can require 12 to 18 months of preparation, UWM’s path to going public took less than a year, beginning with Gores Holdings IV completing its IPO in late January 2020 and raising approximately $425 million in cash.

Alec Gores, the billionaire founder of of the private equity firm Gores Group, led the deal. The tie-up was announced back in September and ultimately included an additional $500 million private placement. (It’s typical to tack-on these transactions once a target company has been identified and accepts the terms of the proposed merger. Most targets are many times larger than the blank check companies with which they are joining forces.)

Also notable is that UWM is a mature company, one that says it generated $1.3 billion in revenue in the third quarter of last year alone and whose CEO, whose father started the company in 1986, said last fall that the company is “massively profitable.”

It’s a story unlike that of most outfits to go public recently through the SPAC process. Consider Opendoor, Luminar Technologies, and Virgin Galactic. Each are developing businesses that need capital to keep going and which might not have found much more from private market investors.

SpaceX director Steve Jurvetson underscored the point pretty bluntly last week, saying, for example, that Virgin Galactic has seen “no positive business development” since being taken public. “They announced that they’re going to develop a hypersonic plane, but that has zero synergy with the current business they’re trying to launch, which is suborbital spaceflights, which have yet to happen for customers.”

If more profitable, more mature, more businesses with a very clear path to future revenue begin choosing SPACs over traditional IPOs, it could, at long last, change stubborn perceptions of SPAC candidates as fly-by-night operations that aren’t sustainable as public companies.

It could also widen ideas about what size companies are appropriate to take public this way.

More certain: UWM isn’t likely to hold the record for ‘biggest SPAC deal ever’ for long. Not only is interest in SPACs as feverish as ever, but one vehicle in particular seems poised to take the title, and that’s the SPAC of billionaire investor William Ackman, whose blank-check company raised $4 billion last summer.

Presumably, the deal will be a doozy. Reportedly, Ackerman was at one point looking to take public Airbnb with his SPAC. When Airbnb passed on the proposed merger, he reportedly reached out to the privately held media conglomerate Bloomberg. (Bloomberg has said it’s untrue.)

Because SPACs typically complete a merger with a private company in two years or less, speculation has been runs rampant about what Ackman — who plans to kick in an additional $1 billion in cash from his hedge fund — will piece together with all that money.

In the meantime, there have been 59 new SPAC offerings in the last 22 days alone — as many as in all of 2019. They’ve raised $16.8 billion. And there’s seemingly no end in sight.

Just this week, Fifth Wall Ventures, the four-year-old, L.A.-based proptech focused venture firm, registered plans to raise $250 million for a new blank-check company.

Meanwhile, Intel Chairman Omar Ishrak, who previously ran medical device giant Medtronic, is planning to raise between $750 million and $1 billion for a blank-check firm targeting deals in the health tech sector, Bloomberg reported on Sunday.

As for Gores Group, on Wednesday, it registered plans to raise $400 million in an IPO for its newest blank check company. It will be the outfit’s seventh SPAC to date.

JustKitchen is using cloud kitchens to create the next generation of restaurant franchising

JustKitchen operates cloud kitchens, but the company goes beyond providing cooking facilities for delivery meals. Instead, it sees food as a content play, with recipes and branding instead of music or shows as the content, and wants to create the next iteration of food franchises. JustKitchen currently operates its “hub and spoke” model in Taiwan, with plans to expand four other Asian markets, including Hong Kong and Singapore, and the United States this year.

Launched last year, JustKitchen currently offers 14 brands in Taiwan, including Smith & Wollensky and TGI Fridays. Ingredients are first prepped in a “hub” kitchen, before being sent to smaller “spokes” for final assembly and pickup by delivery partners, including Uber Eats and FoodPanda. To reduce operational costs, spokes are spread throughout cities for quicker deliveries and the brands each prepares is based on what is ordered most frequently in the area.

In addition to licensing deals, JustKitchen also develops its own brands and performs research and development for its partners. To enable that, chief operating officer Kenneth Wu told TechCrunch that JustKitchen is moving to a more decentralized model, which means its hub kitchens will be used primarily for R&D, and production at some of its spoke kitchens will be outsourced to other food vendors and manufacturers. The company’s long-term plan is to license spoke operation to franchisees, while providing order management software and content (i.e. recipes, packaging and branding) to maintain consistent quality.

Demand for meal and grocery deliveries increased dramatically during the COVID-19 pandemic. In the United States, this means food deliveries made up about 13% of the restaurant market in 2020, compared to the 9% forecast before the pandemic, according to research firm Statista, and may rise to 21% by 2025.

But on-demand food delivery businesses are notoriously expensive to operate, with low margins despite markups and fees. By centralizing food preparation and pickup, cloud kitchens (also called ghost kitchens or dark kitchens) are supposed to increase profitability while ensuring standardized quality. Not surprisingly, companies in the space have received significant attention, including former Uber chief executive officer Travis Kalanick’s CloudKitchens, Kitchen United and REEF, which recently raised $1 billion led by SoftBank.

Wu, whose food delivery startup Milk and Eggs was acquired by GrubHub in 2019, said one of the main ways JustKitchen differentiates is by focusing on operations and content in addition to kitchen infrastructure. Before partnering with restaurants and other brands, JustKitchen meets with them to design a menu specifically for takeout and delivery. Once a menu is launched, it is produced by JustKitchen instead of the brands, who are paid royalties. For restaurants that operate only one brick-and-mortar location, this gives them an opportunity to expand into multiple neighborhoods and cities (or countries, when JustKitchen begins its international expansion) simultaneously, a new take on the franchising model for the on-demand delivery era.

One of JustKitchen's delivery meals, with roast chicken and vegetables

One of JustKitchen’s delivery meals

Each spoke kitchen puts the final touches on meal before handing them to delivery partners. Spoke kitchens are smaller than hubs, closer to customers, and the goal is to have a high revenue to square footage ratio.

“The thesis in general is how do you get economies of scale or a large volume at the hub, or the central kitchen where you’re making it, and then send it out deep into the community from the spokes, where they can do a short last-mile delivery,” said Wu.

JustKitchen says it can cut industry standard delivery times by half, and that its restaurant partners have seen 40% month on month growth. It also makes it easier for delivery providers like Uber Eats to stack orders, which means having a driver pick up three or four orders at a time for separate addresses. This reduces costs, but is usually only possible at high-volume restaurants, like fast food chain locations. Since JustKitchen offers several brands in one spoke, this gives delivery platforms more opportunities to stack orders from different brands.

In addition to partnerships, JustKitchen also develops its own food brands, using data analytics from several sources to predict demand. The first source is its own platform, since customers can order directly from Just Kitchen. It also gets high-level data from delivery partners that lets them see food preferences and cart sizes in different regions, and uses general demographic data from governments and third-party providers with information about population density, age groups, average income and spending. This allows it to plan what brands to launch in different locations and during different times of the day, since JustKitchen offers breakfast, lunch and dinner.

JustKitchen is incorporated in Canada, but launched in Taiwan first because of its population density and food delivery’s popularity. Before the COVID-19 pandemic, food delivery penetration in the U.S. and Europe was below 20%, but in Taiwan, it was already around 30% to 40%, Wu said. The new demand for food delivery in the U.S. “is part of the new norm and we believe that is not going away,” he added. JustKitchen is preparing to launch in Seattle and several Californian cities, where it already has partners and kitchen infrastructure.

“Our goal is to focus on software and content, and give franchisees operations so they have a turnkey franchise to launch immediately,” said Wu. “We have the content and they can pick whatever they want. They have software to integrate, recipes and we do the food manufacturing and sourcing to control quality, and ultimately they will operate the single location.”

This startup says its AI can better spot a healthy embryo — and improve IVF success

With every year, AI is beginning to bring more standardized levels of diagnostic accuracy in medicine. This is true of skin cancer detection, for example, and lung cancers.

Now, a startup in Israel called Embryonics says its AI can improve the odds of successfully implanting a healthy embryo during in vitro fertilization. What the company has been developing, in essence, is an algorithm to predict embryo implantation probability, one they have trained through IVF time-lapsed imaging of developing embryos.

It’s just getting started, to be clear. So far, in a pilot involving 11 women ranging in age from 20 to 40, six of those individuals are enjoying successful pregnancies, and the other five are awaiting results, says Embryonics.

Still, Embryonics is interesting for its potential to shake up a big market that’s been stuck for decades and continues to grow only because of external trends, like millennial women who are putting off having children owing to economic concerns.

Consider that the global in-vitro fertilization market is expected to grow from roughly $18.3 billion to nearly double that number in the next five years by some estimates. Yet the tens of thousands of women who undergo IVF each year have long faced costs of anywhere from $10,000 to $15,000 per cycle (at least in the U.S.), along with long-shot odds that grow worse with age.

Indeed, it’s the prospect of reducing the number of IVF rounds and their attendant expenses that drives Embryonics, which was founded three years ago by CEO Yael Gold-Zamir, an M.D. who studied general surgery at Hebrew University, yet became a researcher in an IVF laboratory owing to an abiding interest in the science behind fertility.

As it happens, she would be introduced to two individuals with complementary interests and expertise. One of them was David Silver, who had studied bioinformatics at the prestigious Technion-Israel Institute of Technology and who, before joining Embryonics last year, spent three years as a machine learning engineer at Apple and three years before that as an algorithm engineer at Intel.

The second individual to whom Gold-Zamir was introduced was Alex Bronstein, a serial founder who spent years as a principal engineer with Intel and who is today the head of the Center for Intelligent Systems at Technion as well as involved with several efforts involving deep learning AI, including at Embryonics and at Sibylla AI, a nascent outfit focused on algorithmic trading in capital markets.

It’s a small outfit, but the three, along with 13 other full-time employees to join them, appear to be making progress.

Fueled in part by $4 million in seed funding led by the Shuctermann Family Investment Office (led by the former president of Soros Capital, Sender Cohen) and the Israeli Innovation Authority, Embryonics says it’s about to receive regulatory approval in Europe that will enable it to sell its software — which the team says can recognize patterns and interpret image in small cell clusters with greater accuracy than a human —  to fertility clinics across the continent.

Using a database with millions of (anonymized) patient records from different centers around the world that representing all races and geographies and ages, says Gold-Zamir, the company is already eyeing next steps, too.

Most notably, beyond analyzing which of several embryos is most likely to thrive, Embryonics wants to work with fertility clinics on improving what’s called hormonal stimulation, so that their patients produce as many mature eggs as possible.

As Bronstein explains it, every woman who goes through IVF or fertility preservation goes through an hormonal stimulation process — which involves getting injected with hormones from 8 to 14 days — to induce their ovaries to produce numerous eggs. But right now, there are just three general protocols and  a “lot of trial and error in trying to establish the right one,” he says.

Though deep learning, Embryonics thinks it can begin to understand not just which hormones each individual should be taking but the different times they should be taken.

In addition to embryo selection, Embryonics has developed a non-invasive genetic test based on analysis of visual information, together with clinical data, that in some cases can detect major chromosomal aberrations like down syndrome, says Gold-Zamir.

And there’s more in the works if all goes as planned. “Embryonics’s goal is to provide a holistic solution, covering all aspects of the process,” says Gold-Zamir, who volunteers that she is raising four children of her own, along with running the company.

It’s too soon to say whether the nascent outfit will succeed, naturally. But it certainly seems to be at the forefront of a technology that is fast changing after more than 40 years wherein many IVF clinics worldwide have simply assessed embryo health by looking at days-old embryos on a petri dish under a microscope to assess their cell multiplication and shape.

In the spring of 2019, for instance, investigators from Weill Cornell Medicine in New York City published own their conclusion  that AI can evaluate embryo morphology more accurately than the human eye after using 12,000 photos of human embryos taken precisely 110 hours after fertilization to train an algorithm to discriminate between poor and good embryo quality.

The investigators said that each embryo was first assigned a grade by embryologists that considered various aspects of the embryo’s appearance. The investigators then performed a statistical analysis to correlate the embryo grade with the probability of a successful pregnancy outcome. Embryos were considered good quality if the chances were greater than 58 percent and poor quality if the chances were below 35%.

After training and validation, the algorithm was able to classify the quality of a new set of images with 97% accuracy.

Photo Credit: Tammy Bar-Shay

Wattpad, the storytelling platform, is selling to South Korea’s Naver for $600 million

Wattpad, the 14-year-old, Toronto-based, venture-backed storytelling platform with reach into a number of verticals, is being acquired by Naver, the South Korean conglomerate, in a $600 million cash-and-stock deal.

Naver plans to incorporate at least part of the business into another of its holdings, the publishing platform Webtoon, which Naver launched in 2004, brought to the U.S. in 2014, and that features thousands of comic strips created by its users. It also has a huge audience. According to Naver, Webtoon was averaging more than 67 million monthly users as of last August.

On its face, the deal appears to make sense. According to Korea’s Pulse News, some of the region’s webtoons are finding a broader geographic audience and crossing over into film. (Below is a trailer for one popular series called “The Secret of Angel.”)

Similarly, Wattpad, which originally launched as an e-reading app, has evolved into a highly popular platform where users publish their original work and more than 90 million people visit monthly to read them. (Indeed, according to a story published last week in the Verge, Wattpad has published more than a billion stories over the years,  and it claims its users spend a collective 22 billion minutes per month reading these.)

Like Webtoon, Wattpad has been more focused on streaming media, given the many platforms now needing fresh content, from Netflix to Apple to farther flung outfits, like GoJek’s GoPlay, launched by the Indonesian ride-hailing giant in 2019. (In addition to Wattpad Studios, Wattpad also launched a book publishing division in 2019.)

CEO Jun Koo Kim of Webtoon said in a press release about the new tie-up that it represents a “big step towards us becoming a leading global multimedia entertainment company.”

Meanwhile, CEO Seong-Sook Han of Naver — a search engine giant whose properties include the popular Tokyo-based messaging app Line — said in a separate release that Wattpad co-founders Allen Lau and Ivan Yuen will continue to lead the company they have built post-acquisition.

As for whether the acquisition is a win for Wattpad’s investors, it appears to be a moderate one. (It’s hard to discern much without knowing the terms under which each outfit invested.)

Wattpaid had raised $117.8 million from investors in Asia, the United States, and Canada over the years and closed its most recent round with $51 million from Tencent Holdings, BDC, Globe Telecom’s Kickstart Ventures, Peterson Group, Canso, and Raine Ventures.

That last deal, announced in 2018, assigned the company a post-money valuation of $398 million according to Pitchbook.

Prosus Ventures leads $30 million investment in Indian agritech startup DeHaat

Once overlooked, agritech startups are beginning to have a moment in India.

On Tuesday, DeHaat, an online platform that offers full-stack agricultural services to farmers, said it has raised $30 million in a new financing round as the Indian firm looks to maintain its accelerated growth despite the pandemic.

Prosus Ventures, formerly known as Naspers Ventures, led Patna and Gurgaon-based startup’s Series C financing round. RTP Global and existing investors Sequoia Capital India, FMO, Omnivore and AgFunder also participated in it, bringing the startup’s to-date raise to over $46 million. (Dexter Capital was the advisor for this funding round.)

One of the biggest challenges farmers in India face is securing agri-input items such as seeds and fertilizers and then finding buyers after producing the yields.

DeHaat, which is Hindi for village, is solving this by bringing brands, institutional financers and buyers to one platform, which is accessible through a helpline and an app in local languages.

Only about a third of the yields Indian farmers produce reaches the big markets, according to industry estimates. It’s traditionally proven immensely difficult for farmers to find buyers for their produce.

Once the season is over, DeHaat helps farmers sell their yields to bulk buyers such as business-to-business marketplace Udaan, Reliance Fresh, and food delivery firm Zomato.

The 10-year-old startup has also developed a database of crop tests and uses artificial intelligence to provide farmers with free-of-cost personalized advisory on what they should sow in a season. DeHaat also helps farmers secure working capital through partnership with hundreds of institutional firms.

We wrote about DeHaat last year, when it had raised a $12 million financing round. The past nine months has been the story of its accelerated growth despite the coronavirus pandemic, which prompted lockdowns across the nation for several months.

The startup, which today has presence in eastern part of India — states such as Bihar, Uttar Pradesh, Jharkhand, Odisha and West Bengal — serves close to 400,000 farmers, up from about 210,000 in April last year, Shashank Kumar, co-founder and chief executive of the startup, told TechCrunch in an interview.

How the startup is tackling these challenges is equally impressive. It works with nearly 1,400 micro-entrepreneurs, up from about 400 last year, in rural areas who distribute over 4,000 types of agri-input goods to farmers from their regional hubs and then bring back the output to the same hub. “They are the ones responsible for last-mile delivery and aggregation,” he said.

DeHaat has grown on every front, including the revenue it clocks, which is up 3X to 3.5X since last year, he said.

“At the end of March, our daily volume out was around 200 metric tonne. Now it’s over 600 metric tonne. Everyday we aggregate this much from farmers and supply to FMCG players and modern retails. Similarly on the agri-input side — seed, fertilizers, and pesticide — we are processing close to 10,000 orders everyday, compared to about 2,600 in March of last year,” he said.

“Prosus Ventures invests in industries around the world where innovation can significantly address big societal needs,” said Ashutosh Sharma, Head of India Investments at Prosus Ventures, in a statement.

“DeHaat is catering to a massive market in India with the agriculture sector worth more than $350 billion to the country’s economy and consisting of an estimated 140 million+ farmers. Through its end-to-end agricultural services offerings, DeHaat will have a major societal impact in India, improving the earning potential for Indian farmers and overall yield for the sector while also enabling microentrepreneurs all over the country, including in rural areas where there is often less income opportunity,” he added.

The startup plans to deploy the fresh capital to expand to more states in India including Rajasthan, Madhya Pradesh, and Maharashtra and eventually serve 10 million farmers.

And another area where it intends to focus is hiring top tech talent. The startup has doubled its workforce since the past year, with many high-profile hires from major firms. The startup, which recently made its second acquisition, is also open to exploring more M&A opportunities, said DeHaat’s Shashank Kumar.

Once ignored, scores of agritech startups have cropped up in India in recent years — and many old startups are beginning to receive large-sized checks from investors.

Around two dozen #agritech startups have raised funds this year (till date)

Ergos
Unnati
Bijak
DeHaat
Ninjacart
Gourmet Garden
Farmers Fresh Zone
Krishitantra
Kheyti
BigHaat
VeGrow
Procol
Agro2o
Waycool
Jai Kisan
Intello Labs
Crofarm
Eggoz
Aibono
Arya
Clover
Kisan Network

— Harsh Upadhyay (@upadhyay_harsh1) October 13, 2020

Further reading: Omnivore and Accel recently co-authored a report on India’s agritech landscape.

Startups at CES showed how tech can help elderly people and their caregivers

The COVID-19 pandemic shined a harsh spotlight on the challenges many elderly people face. Older adults are among the highest-risk groups for developing cases that need hospitalization and nursing homes were especially vulnerable to outbreaks. While dealing with COVID-19, the elderly have also faced many other problems, including the difficulty of accessing medical care for chronic conditions during lockdowns and isolation.

Many of these issues won’t go away after the pandemic. According to the United Nations, the global population of people 65 and over is growing faster than any other age group. At the same time, there is a critical shortage of caregivers, especially for elderly people who want to continue living at home instead of moving into nursing homes.

Tech can help in many ways: by helping caregivers (and reducing burnout), allowing seniors to perform health monitoring at home and creating tools to combat isolation. During CES, there were several “age-tech” presentations. One of the most notable was AARP Innovation Lab, the non-profit’s startup accelerator program. It presented nine companies at the virtual show.

Zibrio's smart scale for assessing postural stability, or balance

Zibrio’s smart scale for assessing postural stability, or balance

One common theme among AARP’s group was tech that helps elderly people “age in place,” or stay in their homes or communities instead of moving into a nursing home. For example, Wheel Pad designs accessible home and work spaces that can be installed into existing structures and sites. Mighty Health is an app that pairs users with health coaches, certified trainers and personalized nutrition plans, while Zibrio, a scale that assesses users’ balance to predict if they are at risk for a fall, can also be incorporated into at-home routines.

Other startups from AARP Innovation Lab focus on helping caregivers, too. For example, FallCall Solutions’ creates Apple Watch apps that send alerts if a fall is detected and help family members check on users. Another app, called Ianacare, helps family members coordinate caregiving tasks and ask for support. End-of-life planning is one of the most emotionally difficult processes for families, and Cake, an “end-of-life platform” helps by providing tools for estate and health care planning, as well as resources to help relatives cope with caregiving issues and grief.

Other startups center on medical care. For people with chronic conditions, Folia Health helps monitor the progress of treatments. On the clinical side, Embleema’s software allows clinical investigators to share data and design studies, making pharmaceutical research more efficient.

Other noteworthy age-tech startups at CES included Nobi, a smart lamp that automatically turns on when users stand up and sends alerts to family members if they fall. Nobi can also be used in residences and nursing homes.

Caregiver Smart Solution's app for caregivers to coordinate tasks

Caregiver Smart Solution’s app for caregivers to coordinate tasks

Caregiver Smart Solutions is a multi-faceted platform that makes it easier for seniors to stay at home with a machine learning-based app for early detection of potential health issues, fall sensors, monitors and emergency buttons. For people with incontinence, DFree, a wearable device, can reduce stress by monitoring how full their bladder is with an ultrasound sensor and keeping track of their average time between bathroom visits. It’s available for both consumers and health care facilities.

A diagram of companion robot Cutii's features

A diagram of companion robot Cutii’s features

For elderly people living in nursing homes, Rendever is a virtual reality platform that wants to help reduce isolation. It can be used with reminiscence therapy, which guides individuals with dementia through experiences that remind them of their pasts, and to allow virtual travel to landmarks. Cutii, a companion robot, also seeks to reduce loneliness. While companion robots have been a mainstay of CES for years, Cutii sets itself apart with entertainment like music, games and live events. It also has video call and night patrol features.

After a record year for Israeli startups, 16 investors tell us what’s next

Israel’s startup ecosystem raised record amounts of funding and produced 19 IPOs in 2020, despite the pandemic. Now tech companies across industries are poised for an even better year, according to more than a dozen investors we talked to in the country.

Mainstay sectors like cybersecurity continue to matter, they said, but are maturing (more about that here). Some people are more excited by emerging areas like artificial intelligence, which has been a focus of the country’s military for years, and like cybersecurity is now producing many fresh teams of founders. Other investors felt that a broader range of industries, like fintech and biotech, would eventually produce the biggest companies in the country.

Overall, local investors cited the country’s focus on global markets from day one, general support from the Israeli government and deep relationships with Silicon Valley and other global tech centers as additional factors that are powering it forward today.

Here are the investors in their own words, for any TechCrunch reader who is interested in hiring, investing or founding a company in the country. Oh, and one more thing. We just launched Extra Crunch in Israel. Subscribe to access all of our investor surveys, company profiles and other inside tech coverage for startups everywhere. Save 25% off a one- or two-year Extra Crunch membership by entering this discount code: THANKYOUISRAEL

The investors:


Boaz Dinte, Qumra Capital

What trends are you most excited about investing in, generally?
At Qumra, we get excited about companies that disrupt traditional industries while doing good and improving quality of life. Our portfolio includes some great examples such as Fiverr that has disrupted the labor market by unlocking the global talent pool, or Talkspace, which is providing access to therapy to all.

What’s your latest, most exciting investment?
Our latest investment is At-bay, the insurance company for the digital age. At-bay offers an end-to-end solution with comprehensive risk assessment, a tailored cyber insurance policy, and active, risk-management service.

Traditional insurers don’t have the know-how to properly and continually assess risk and approach digital risk the same way they approach physical products, through a statistical model that tries to predict the future based on past events. This a great example of company that is disrupting a traditional market.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
As a growth fund, we are sector agnostic and diversify our investments across multiple industries. Would be happy to add proptech and agritech startups to our portfolio.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
We stay clear of nonregulated industries and do not invest in cryptocurrency-related companies, gambling, etc.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We are focused on Israeli and Israeli-related companies. As growth companies they may have moved to NY or CA with their headquarters and maintained their R&D in Israel.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
A great amount of talent is cultivated in the military, which has spawned innovative cyber, AI and machine-learning companies. Also, significant experience and know-how have been accumulated here in big data analytics. SaaS models and cloud technologies have eliminated some of the barriers for Israeli companies and enable companies to quickly set up and set up a proof of concept.

A few highlights in our portfolio include AppsFlyer, JoyTunes, Riskified, Talkspace and Guardicore.

Data-driven AppsFlyer, spearheaded by Oren Kaniel, is an exciting mobile-attribution company that is rapidly growing ($200 million+ ARR in 2020) yet maintains a unique DNA. JoyTunes, led by Yuval Kaminka has developed a music-learning platform that has skyrocketed in 2020. The platform has been widely adopted doing so much good for so many people in a short amount of time. Guardicore is disrupting the traditional firewall market by providing fine-grained segmentation for greater attack resistance. Led by CEO Pavel Gurevich the company is seeing excellent traction. Riskified makes e-ommerce easier and safer and enables a thriving e-commerce environment. Founder duo Eido Gal and Assaf Feldman are a powerhouse of vision and execution capabilities. Talkspace has not only created the leading online therapy business, but is actually improving the quality of life of hundreds of thousands of Americans, which are gaining access to therapy for the first time. Founding husband and wife Oren and Roni Frank are the ultimate power couple — creating an incredible business while creating some real impact.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Tech investors must make sure that Israel is part of their portfolio. Same as VC funds are deeply acquainted with Silicon Valley, tech investors cannot ignore this hub of innovation that has produced global market leading companies and serial entrepreneurs

What are the opportunities startups may be able to tap into during these unprecedented times?
Products and services that require anything requiring on-site visits and integration as well as a long sales cycle involving face-to-face meetings and customer education are negatively impacted during this time. The upside is that companies that will develop a remote and simplified approach can reap gains from this time. Such an example is Augury from our portfolio that has developed an end-to-end solution to provide manufacturers with early, actionable and comprehensive insights into machine health and performance. This has proved to be of crucial value in the supply chain during the pandemic.

How has COVID-19 impacted your investment strategy?
Earlier in the month we have closed our third fund, Qumra III, at $260 million. This was done in a short time in a period when traveling and face-to-face meetings were impossible. Commitments to this fund, which is larger than its predecessor, included increased investments form existing LPs as well as new LPs from new geographies. This is a vote of confidence in the Israeli growth market in general and in Qumra in particular and has been a great achievement and source of hope going forward.

Rafi Carmeli, Viola Growth

What trends are you most excited about investing in, generally?
Platforms that are transforming how people and businesses operate, go about their business or leverage their core assets, using superior products, data and AI.

What’s your latest, most exciting investment?
Zoomin Software.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Transformation of the CFO and treasury suite of tools.

What are you looking for in your next investment, in general?
A+ team, superior product demonstrated with business/market traction and a sizable market opportunity.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?

Any area that needs to compete both with incumbents and also a set of already successful “new age” companies that made the first step of meaningful disruption.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 50%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?

Plenty of interesting opportunities but like many places, competitive around the best of the best.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Definitely see changes in evolution of young startups given the behavioral changes caused by COVID.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Any area that is exposed to mass physical engagement (pockets in travel, food, sports, etc.) are at risk. Remote engagement and productivity have potential to disrupt more industries, such as corporate events/virtual events.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Founders are generally resilient and based on their view on the company’s position post-COVID (winner/at risk) and the capital resources available, should decide on appropriate level of caution/aggressiveness.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes in many areas. In general software has proven to be a winner and specifically SaaS as a business model has proven its resilience.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The speed and decisiveness at which humanity acted to adjust to the effects and aftermath of the pandemic, and importantly to proactively get us all out of the health and economic crisis as quickly as possible (e.g., the speed of creating vaccines).

Any other thoughts you want to share with TechCrunch readers?
If something won’t matter in five years, don’t waste more than five minutes worrying about it now — easier said than done!

Yonatan Mandelbaum, TLV Partners

What trends are you most excited about investing in, generally?
Fintech (specifically embedded finance or financial SaaS), synthetic bio. This is in addition to traditional focus areas that we remain bullish on — cloud infrastructure, ML infra and cyber.

What’s your latest, most exciting investment?
Unit.co, meshpayments.com.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
There simply isn’t enough innovation in fintech from the Israeli ecosystem. Our locale has managed to produce three of the most prolific insurtech companies (Next, Lemonade and Hippo), has a strong history of successful fintech companies (Payoneer, Forter, Riskified) and even has a few very promising earlier-stage ventures (Unit, Melio). That said, only about 10% of our overall deal flow are fintech companies. Areas such as vertical banking, embedded finance, compliance as a service and consumer finance consistently get overlooked by young Israeli founders.

What are you looking for in your next investment, in general?
The cliche VC answer: strong team, big market. This remains constant during all times.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
(1) Cybersecurity — with one caveat. Israel will always be at the forefront of cyber innovation, and thus there will always be an opportunity for fledgling cyber companies in Israel. That said, it is 100% oversaturated, and there are too many examples of strong technical founders creating “yet another” SaaS security startup. (2) Remote work collaboration — clearly an issue that needs solving, but we have unsurprisingly seen an absurd amount of companies in the space. They are largely reactionary companies, and the companies that will prove to be the winners in this market have already been in the market for quite some time (Zoom, Alack, Miro, etc.).

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 50%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Fintech and bio are very well-positioned to thrive in Israel. In 10 years I wouldn’t be surprised if Israel is more well-known for those two sectors than it is for its cyber companies. Some companies to keep an eye on: Next Insurance, Unit, Mesh Payments, Aidoc, Deepcure, Immunai.

How should investors in other cities think about the overall investment climate and opportunities in your city?
I’m not saying anything new, but Israel is known as the startup nation for a reason. There is an incredible, thriving entrepreneurship culture that breeds fascinating companies weekly. Interestingly, valuation trends seem to trail the U.S. by about 12-18 months. So for later-stage VCs around the globe, Israel can represent an interesting opportunity to do deals of the same quality that they are doing in their locale, but for a more reasonable price.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Not particularly. Israel a small country, and even if there may be a residential exodus from Tel Aviv, there won’t be a commercial one.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Travel and proptech are more exposed due to COVID-19.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
COVID hasn’t impacted our investment strategy much. We have remained steady in our search for interesting early-stage software opportunities and our commitment to invest substantial amounts even at the seed round. The biggest worries of the portfolio founders surround slower enterprise sales cycles due to WFH and smaller budgets from potential customers. Our early advice to founders was to ensure runway for 18 months in order to weather the storm. Recently however, after witnessing the incredibly founder-friendly fundraising landscape, our advice has been to put the pedal to the metal, reach certain benchmarks and raise capital.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
No, there still hasn’t been enough time. That said, I will say that the initial enthusiasm of WFH has faded. The vast majority of our companies are clamoring to be back in the office.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
My grandparents both recently passed away from COVID-19. Despite the tragic loss that it was for my family, there was one moment that truly gave me hope. I had the opportunity to visit my grandmother in the COVID ward at a local hospital before she passed (in full protective gear of course). Before entering the ward, while the nurses were going over the protocols with me and four other individuals who were there to visit their sick family members, I was surprised to realize that the five of us in the room were an eclectic bunch. Jewish, Muslim, religious and not, young and old. In that moment, we all gave each other strength, wished each other well and it gave me hope that we can truly become a unified country in the near future. The next exponential growth that occurs in the Israeli ecosystem will be when there is an influx of minorities (Arabs, ultra-Orthodox) into the workforce.

Natalie Refuah, Viola Growth

What trends are you most excited about investing in, generally?
DevOps, martech, digital health.

What’s your latest, most exciting investment?
RapidAPI.

What are you looking for in your next investment, in general?
Exciting team, hypergrowth, disruptiveness.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Cyber, automotive.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Close to 100%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
DevOps, cyber, enterprise software.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Very positively.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
There will be changes, that’s for sure.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19?

E-commerce tech-related companies will thrive.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
We lowered our check size per company. My advice — if you are “with COVID trend” push hard, if you are “against COVID trend” — preserve cash.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
More time with my kids, but in general I miss hugging people when i meet them, and I prefer meeting people face to face.

Any other thoughts you want to share with TechCrunch readers?
Let the vaccine go!

Daniel Cohen, Viola Ventures

What trends are you most excited about investing in, generally?
Games, vertical AI and AI agencies, digital health.

What’s your latest, most exciting investment?
Hyperguest, creating direct connectivity between hotels and OTAs. It’s the perfect next-gen travel infrastructure for the world post-pandemic.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
The biggest trend in the post-COVID world will be the new work environment. We would love to see more startups that will create corporate solutions that are focused on the future of work. That can be at the workplace or at the home.

What are you looking for in your next investment, in general?
Unique, innovative go-to-market. Leveraging technology to reach consumers in a more innovative way. It’s basically innovation in growth hacking, not only in great products.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Cybersecurity — the market is real and important, but there are too many startups with small niche solutions.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 50%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
The most exciting trends locally are everything AI with focus on B2B apps. Same goes with digital health and consumer-focused health applications.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Israel is the #1 region globally in unicorn production, probably the hottest startup region right now.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
No.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?

The biggest change has been on company culture, which is hard to maintain in a distributed work-from-home environment. Companies need to be innovative and creative in maintaining/building culture, which was so much easier pre-COVID.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic? What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.

The announcements around the vaccines make it clear that the end of the pandemic is near. I think 2021 will be amazing.

Ben Wiener, Jumpspeed Ventures

What trends are you most excited about investing in, generally?
Jumpspeed invests exclusively in pre-seed and seed-stage startups from the Jerusalem startup ecosystem.

What’s your latest, most exciting investment?
MDGo.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Not really, we are sector agnostic/bottom-up rather than thesis driven.

What are you looking for in your next investment, in general?
10x better, paradigm-shift solution to a large, near-term, acute business problem, produced and led by a complementary founding team (hacker+hustler+designer).

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Cybersecurity, crypto, telehealth.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
EXCLUSIVELY, see above.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Jerusalem is well-positioned in certain clusters such as computer vision, general enterprise SaaS, AI/ML and healthtech.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Our city’s startup ecosystem is underexploited and generates a few fantastic under-the-radar opportunities per year.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Little direct impact on strategy because by definition I am investing in things that will go to market and ripen over years.

Founders’ biggest worries are employee well-being, after that access to overseas customers and markets.

Advice to founders: Stay calm and healthy, play the long game, take care of yourself, your family and your employees, don’t panic or cut staff reactively.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes but not that I can attribute directly to the pandemic.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
No specific moment, just the general resilience and ability to adapt to the radically changing new realities that our portfolio founders have exhibited.

Any other thoughts you want to share with TechCrunch readers?
“Entrepreneurship in advanced technology, is not merely a matter of decision-making; it is a matter of imposing cognitive order on situations that are repeatedly ill-defined.” — W. Brian Arthur, “The Nature of Technology”

No situation has been this ill-defined in the past century. Keep calm and carry on 🙂

Inbal Perlman, TAU Ventures

What trends are you most excited about investing in, generally?
At TAU, we are interested in a variety of sectors and evaluate each potential investment independently. In regards to trends, we look at trends with a grain of salt understanding that trends might come and go. When we see a particular trend, we try to understand if there is a need behind the trend and see beyond the initial hype. We want to assure that a startup is meeting a real need in the market. We are particularly interested in technologies that do not require too much time and capital to get to market.

What’s your latest, most exciting investment?
We invested in a company called Xtend, which is creating human-machine telepresence allowing us to “step into” a machine, anywhere in the world, breaking the limits of physical reality. In particular, it develops solutions that allow people to interact with drones and other unmanned machine technologies. The company’s technology enables humans to extend themselves into the action by allowing them to virtually sit inside the drone for various tactical missions. What is exciting about Xtend is how the technology can be implemented in a variety of ways from defense and homeland security to reimagining entertainment, gaming and cinematography.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
We like to see startups that are disrupting traditional industries by solving basic challenges and needs with innovative means. There are some industries that haven’t changed in many years. And if you create a technology that can be simply integrated into existing markets, it has the potential to gain significant traction and drastically change an industry. So we would love to see more startups going “back to the basics” asking questions about commonly felt pain points and innovating to solve those pains.

What are you looking for in your next investment, in general?
We want to get the feeling from the entrepreneur that they are professional, ready for the entrepreneurial journey, have the right mindset and skill set and will conquer the world. We understand that with early-stage startups, the product or service will likely change and therefore pay significant attention to the entrepreneurs themselves as an early indicator of future success.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Technology trends that often come and go can create an oversaturated market for startups. For example, previously there was hype around drones. Now, only the strongest companies in the drone industry have stuck around. Today, there are many startups responding to needs exacerbated by the COVID-19 pandemic such as remote learning and remote work. It is important to filter out whether these are solutions that will be around for a while and survive a post-COVID world or are temporary.

We are more cautious about particular industries. In edtech, those who have successfully done exits, have done so at low amounts ($200 million-$300 million). For us, we are seeking larger exits. Blockchain is a difficult sector because it lacks a clear regulatory environment, subsequently raising many questions. Similarly, the cannabis industry also does not have a fixed regulatory environment across countries. Any small regulation change can highly impact the company. These are the sectors and areas that we are more cautious around.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We invest in startups that are exclusively Israeli startups but are targeted for a global market. At TAU Ventures, we have 1,000 sq. meter coworking office space where majority of our portfolio companies and accelerator program companies sit on a daily basis. On a daily basis we are engaging with our startups through kitchen chats and hallway encounters. Through our coworking space, we are directly investing in our local ecosystem both supporting entrepreneurs and identifying rising entrepreneurs.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
In Israel, many Israeli entrepreneurs bring a high level of technical capabilities that they learn in the army such as in cyber and AI. After acquiring this knowledge and ability, they are well-prepared and able to transfer it to the commercial area. This is why we see many successful startups coming out of Israel particularly in these fields.
For example, founders of our portfolio company, SWIMM all come from leading elite tech training units in the army (Aram, Talpiot) and before founding SWIMM, established ITC (Israel Tech Challenge, a nonprofit high-tech academy that offers in-demand tech training programs in English in Tel Aviv, inspired by the IDF’s 8200 unit).
Furthermore, Tel Aviv University (TAU), our affiliated university, is a leading research institute and academic leader in AI, engineering and other sciences and is producing entrepreneurs with high levels of knowledge. 50% of entrepreneurs in Israel have studied at TAU. And TAU ranked eighth worldwide as a top university producing VC-backed entrepreneurs, and the first outside of the US. So we are very excited by the added advantage we have in being affiliated closely with the university and the talent which it is producing.

How should investors in other cities think about the overall investment climate and opportunities in your city?
The significant advantage of Israel is its small size. Because there is little to no local market, startups automatically think globally in their marketing and growth strategies. To best understand Israel and Israelis, it’s important to understand the influence of the military and the reality of thriving in a complex political environment in the Middle East. Military service is compulsory for all Israelis at the age of 18. The army plays an important role in the socialization, education, skills development, social network and fabric of Israeli society. Many personal and professional networks are the result of army service. As Israelis, we live in an environment where we need to constantly be innovative and one step ahead to survive. This innovative mindset has been instilled in our state of mind and cultural DNA.
We are proud that In Israel we have academics at the highest level in the world across a variety of fields. Multinationals from all over the world have local R&D centers or innovation hubs in Israel to source from the local talent pool. This presence of multinationals creates mutual exposure for both startups and corporates alike.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
At TAU Ventures, the majority of our portfolio and accelerator companies sit next to us at our 1,000 sq. meter coworking space. At our offices, we love seeing our founders and their employees on a regular basis. This is how we have successfully created a strong familial culture at our VC. Throughout COVID, companies have continued to come in person to the office. This has reinforced to us that there is no exchange for face-to-face engagement. As early-stage investors, we understand that at this stage it is all about the people. At the end of the day, people want to be around people and you can not replace the experience of sharing a cup of coffee and shaking someone’s hand.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19?
COVID affected companies in different ways. For some, it boosted business and for others it led them to shift their strategy and approach. Our companies who had clients in the travel industry or airports were obviously affected. In this situation, the company looked at their technology and reconsidered where and how their technology could be relevant to other consumers and industries. This particular company saw an opportunity to shift to logistics and supply chain clients. COVID is presenting opportunities for companies to reevaluate their target market and discover new applications of their technology for different purposes.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
As a result of COVID, we have come to understand that things simply are taking more time, such as processes of raising funds or achieving the next milestone. We are patient and empathetic to the experiences of our startups.

The startups’ most significant worry is that they will not succeed to raise enough funds before reaching their next milestone. And more so, if they are unable to prove their achievement milestones in time, then they might be forced to close business. As a result, our startups are raising more funds during this time to assure a longer runway. Our startups are also keenly aware of how periods of crisis might call on them to pivot and adapt to the current circumstances. Startups are making decisions around adjusting budgets, determining whether customers are still relevant, anticipating whether the circumstances are temporary or will renormalize and ultimately whether there is a completely new path to pivot to.
In light of the circumstances, we are advising our portfolio startups to raise more funds in next rounds to have runway for at least 1.5 years and not to be afraid of making drastic changes (i.e., pivots, changing budget, raising more funds).

As a fund, we are assuring our entrepreneurs that if they choose to change paths, it is okay. Working from a coworking space alongside many of our founders enables us to stay updated on the startups, foster a strong internal ecosystem and network, and provide ongoing psychological safety for our entrepreneurs, which is ever so needed during these unprecedented times for startups.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Two of our portfolio companies have experienced impressive growth and are thriving in 2020.
1. Gaviti is a SaaS company that specializes in receivable collections acceleration. Its system maps out the collection process to spot inefficiencies and optimize clients’ procedures. Specifically during COVID, many companies had increased economic pain points related to generating cash flow on a timely, efficient basis. Gaviti’s solution helps companies manage their collection payments. As a result of of the economic crisis this year, Gaviti saw fast growth in clients and have thrived during 2020.
2. Medorion understands that health companies and hospitals want us to get regular health checkouts. Using AI and behavioral science, Medorion is driving people to take action for their own health by increasing engagement and communication between insurance companies and patients. During COVID, they are combating the coronavirus pandemic by applying their technology to create highly personalized engagement and communication plans targeted at those individuals who are at highest risk of COVID-19.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
In recent months, it is inspiring to see our entrepreneurs continue fighting despite the uncertain economic and global circumstances. Many of our companies are continuing to recruit and hire. Our founders are resilient and are finding creative means to succeed. It is also a blessing to have a large coworking space hosting the offices of 10 startups and to see employees continue to come in to the office day in and day out working with their teams.

Any other thoughts you want to share with TechCrunch readers?
TAU Ventures is a venture capital fund, affiliated with Tel Aviv University, for investing in early-stage, cutting-edge technologies based in Israel. TAU Ventures is the first and only university-affiliated VC in Israel.

The fund has a unique, triangle model creating ecosystem connections between industry, academy and entrepreneurs. We connect to available resources at Tel Aviv University, foster strong partnerships in the high-tech industry and support entrepreneurs as they work side by side in the coworking office space of the VC located on the university campus.

TAU Ventures also runs incubation programs in a variety of tech fields and offers a vibrant hub for entrepreneurs with concrete opportunities for design partnerships with international leading companies: AlphaC program (in partnership with NEC, Checkpoint, Innogy, Team8 and Cybereason) and The Xcelerator (an acceleration program with the Israeli Security Agency).
In 2018, IVC awarded TAU Ventures an award for one of the most active VCs in Israel. And in 2019, Geektime ranked TAU Ventures among the top five best VCs in Israel.

David (Dede) Goldschmidt, Samsung Catalyst Fund

What trends are you most excited about investing in, generally?
Digital transformation and AI.

What’s your latest, most exciting investment?
Solarisbank (Germany).

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
AI-acceleration technologies seems to be overcrowded.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Less than 50%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
AI, cyber security. Excited about our portfolio company Innoviz (LiDAR). Excited about Avigdor Willenz, serial entrepreneur, including our portfolio company Habana Labs that was acquired for $2 billion.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Highly dynamic and competitive, very global approach of entrepreneurs, risk takers, “can-do” approach.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I don’t expect that to happen because a strong ecosystem of entrepreneurs, investors and service providers would be needed, and it takes years for that to grow.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19?
Industries serving brick-and-mortars are likely to get weakened by accelerated transition to online.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Our advice has been to be careful with cash. There is a disconnect between the strong momentum in the tech financing vis-a-vis overall economic crisis (unemployment, governments deficits, etc.). We have yet to see the full impact of COVID-19 on tech startups and better be prepared for that.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, for pure digital plays.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Frankly, I remain concerned because of the disconnect alluded to above. Vaccine momentum brings some hope, but too early to tell.

Any other thoughts you want to share with TechCrunch readers?
I am very concerned from potential crunch in early stage. While overall financing numbers are growing almost across all geographies, investments are heavily weighted toward later stage and unicorns, and much fewer new companies are being formed. This will have dramatic impact on the tech ecosystem a few years out, if it does not change in 2021.

Dror Nahumi, Norwest Venture Partners

What trends are you most excited about investing in, generally?
We are a large fund that invests in early-to-late-stage companies across a wide range of sectors with a focus on consumer, enterprise and healthcare. My focus is primarily in Israeli companies and I’m seeing many exciting startups in security, SaaS, enterprise and cloud infrastructure, robotics and semiconductors.

What’s your latest, most exciting investment?
We are naturally excited about all our latest investments. I recently invested in three seed-stage companies that are in stealth mode: an open-source cloud infrastructure company, a people analytics (HR) SaaS company and a next-generation business-intelligence platform.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
I believe there is a massive opportunity for startups to develop new solutions to fuel the digitization of next-generation enterprises. We’re seeing innovation and activity in this sector, but there’s so much more to be done, especially in light of challenges and vulnerabilities that COVID-19 has exposed. The hottest areas will be in human resources, production, security, infrastructure, sales and remote work.

What are you looking for in your next investment, in general?
We look for a great team, strong intellectual property and compelling execution. The new product idea can be a replacement (i.e., replace existing products that are aging, low performance) or a new category. Gong.io is a great example of a new category we invested in early on. We created the new “revenue intelligence” category that offers businesses automated, unfiltered and real-time insights on customer interactions and deals. This helps businesses understand what’s actually being said to transform the way they go to market.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Security is currently oversaturated. There are too many companies doing similar things, which can make it difficult for newcomers to break through. Additionally, most emerging security startups are all claiming to use machine learning and AI to combat the next level of breaches. These are important areas to focus on, but it’s getting harder for these companies to differentiate themselves. That aside, we have made several great investments in security over the years and will continue to invest in great teams.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Our team in Israel is 100% focused on our local market.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Numerous industries in the Israeli market are poised to thrive and are doing so currently. Examples include startups in the security, SaaS, enterprise and the cloud infrastructure space, and even consumer services. We are especially excited to continue to witness the growth and success of Gong, VAST Data, WekaIO, Cynet, Wiliot, ActiveFence, Ermetic and SundaySky while building new companies who are still in the stealth stage.

How should investors in other cities think about the overall investment climate and opportunities in your city?
At Norwest and especially among our Israel portfolio companies, we’ve been able to let our companies mature. We’ve given them the time and support they need to reach maturity. This is a very different approach than what we are seeing in other environments.

Today, growth comes before M&A and companies get valuations much quicker. In past years, it was hard to raise money but it’s not so difficult now. In Israel, inside sales and marketing analytics allow companies to sell more effectively now than in the last decade. This gives entrepreneurs flexibility, room to expand into other markets and the ability to hire top talent globally versus just within their own region.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Israel is so small that you are never really too far outside a major city. We expect our startup hub to stay intact even if individuals and businesses choose to move slightly outside of the main CBD.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
The travel industry has been massively impacted in every market globally since the COVID-19 outbreak. That said, that means there is a huge opportunity to fill gaps based on business and consumer needs as we approach a post-pandemic normal.

I would say that solutions with huge potential are those centered on hybrid workforces as enterprises rethink the future of work. These have the potential to significantly benefit from the pandemic in the short and long term.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
COVID-19 has not impacted our investment strategy. However, in recent conversations with our portfolio companies, it’s clear that brands can emerge stronger than ever with an adaptable strategy, adjusted expectations, strong marketing and B2C communications, and compassionate leadership.

Over the past several months, we’ve advised companies in our portfolio to focus on building their business while prioritizing the safety of their workforce, which could mean further extending work-from-home policies or making remote work a standard option in their hiring practices. Companies’ ability to innovate and adapt while building their business around the new normal will be better positioned to succeed in a post-COVID landscape.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
While it’s not one particular moment, there were many times this past year where our portfolio companies faced major challenges due to the pandemic and were still able to continue to expand their businesses. Every sales quarter that shows growth and success gives me hope.

Sharin Fisher, Fort Ross Ventures

What trends are you most excited about investing in, generally?
I’m mostly excited about AI/ML technologies, cybersecurity companies and the global opportunity in B2B SaaS companies in general; companies that help to optimize business processes and boost efficiency (e.g., one of our portfolio companies, Kryon, is operating in the robotic process automation space, evaluating business processes, and recommending which ones to automate in order to free up underutilized human talent). We are seeing many successful Israeli SaaS companies across the board, from marketing and collaboration tools, business intelligence products, to payment systems.

What’s your latest, most exciting investment?
My latest investment was in a B2B SaaS company that disrupts a huge market. I’m mostly excited about the team, which contains senior executives and second-time entrepreneurs with domain expertise.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?

We are looking for companies that have a big market, a compelling story and a clear path to building a large business. When we invest, companies already have traction, a diverse customer base, established and repeatable sales process and metrics. So, when we dive deeper into the company’s metrics we would like to see they support the company’s assumptions and ability to scale up properly.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
WFH enablement tools (from security to communication tools).

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We are a global VC with a distributed team, focused on investing in midstage companies based in the U.S. and Israel, that can become global leaders. I’m leading our investments in the Israeli companies, globally.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Israel is well-positioned to build and grow large companies that can become segment leaders. We are seeing many leading companies across multiple sectors such as mobility (Moovit, Mobileye), cybersecurity (Armis, Cybereason, SentinelOne), fintech (Lemonade, Payoneer, eToro), information technology (Jfrog, Snyk), etc.

How should investors in other cities think about the overall investment climate and opportunities in your city?
The Israeli ecosystem has matured significantly over the last decade, mainly due to repeat entrepreneurs who bring knowledge and relevant experience to the table. They aspire to build meaningful companies. On top of that, there’s more available late-stage capital, allowing companies to stay private longer and become mega-acquisitions/IPO.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
The COVID-19 crisis has impacted Israeli founders in terms of how and from where they work. As many Israeli startups aim to tap into the U.S. market, they usually relocate pretty early on, mainly to build relationships with potential customers. Since the pandemic has created a situation where you have to sell your product/service remotely, physical location has become less relevant. In the short term, I believe we’ll see more Israeli founders working out of Israel, especially when taking into account the advantages (e.g., lower cost of living compared to other places like NYC/San Francisco). In the long run, there’s a high probability that founders who can keep the same sales efficiency remotely will continue to work out of their home country.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
All of the segments we look at are thriving or haven’t changed significantly. I’m mostly interested in startups that are able to sell remotely and have an established inside sales team with a simple integration/deployment, because I believe they are in a better position to scale faster even in this climate.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Our investment strategy remains the same; we are still looking to back companies that can become global leaders and aspire to disrupt huge markets. In terms of the work with our portfolio companies, our founders have already made the needed adjustments and are now more focused on capital efficiency and expanding the runway.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Most of our portfolio adapted to the crisis quite fast and have enough runway to reach their next milestone. For some of our portfolio companies, especially those that support the digital transformation, the pandemic has created business opportunities and accelerated the adoption of their technology. As a result, we deployed additional capital to help them leverage this momentum.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Although the pandemic has created uncertainty for all of us, we have still been seeing more (+14) Israeli companies reaching unicorn status/going public during the past months.

Adi Levanon Chazan, Flint Capital

What’s your latest, most exciting investment?
Sensi.ai.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
A bit over 50% of the portfolio are Israeli startups, the remaining 50% divide between Europe and the U.S.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Fintech has been continuing to grow and will thrive over time. I’m excited about companies like Melio, Unit, Acrocharge and Rapyd.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Very important to have local partners and try to expand the local network as much as possible, best would be to have a person on the ground dedicated to Israeli investments.

Chaim Meir Tessler, partner, OurCrowd

What trends are you most excited about investing in, generally?
Fintech, cloud services, quantum software, cyber.

What’s your latest, most exciting investment?
Closed at time of writing this: D-ID.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Built from the ground up remote educational platforms.

What are you looking for in your next investment, in general?
Founders I like to work with and believe in.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Micromobility, autonomous car sensors.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
60%-70% local.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Cyber, computer vision, semiconductor, quantum computing all thrive.

The banking infrastructure companies starting to emerge look fantastic.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Great market, easy to network, mostly friendly to coinvestment.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
With the world becoming flat, innovation will definitely sprout up in new areas.

How has COVID-19 impacted your investment strategy?
COVID hasn’t strongly affected our overall strategy other than a slowdown in March/April. The biggest worry is inadequate funding/runway.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Realizing that we landed in this pandemic on a moment in history that we had the tools needed to enable a large amount of the world’s population to continue working without having to be in a specific physical location.

Noam Kaiser, Intel Capital

What trends are you most excited about investing in, generally?
Cloud adoption through digital transformation to hybrid cloud, 5G, vertical AI-based SaaS.

What’s your latest, most exciting investment?
Cellwize — basically opening up RAN (4G and 5G) to any API, cloud environment compatibility.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Solution allowing application to run across data sources in multiple buckets across hybrid/multicloud environments.

What are you looking for in your next investment, in general?
Deep understanding of the area and the customer needs, a complementing trend, high revenue potential within five years.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
MLOps, too many, too quickly, Storage at large.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Safebreach — Red Team automation for cybersecurity teams, Verbit — vertical AI, transcription.

How should investors in other cities think about the overall investment climate and opportunities in your city?
It hasn’t slowed down, plenty of opportunity, you have to move fast.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I don’t see the pandemic having that effect. Hubs will remain as are.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19?
Anything relying on on-prem slowed down; this can be semiconductors and retail. but it’s recovering.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Not really, we invest the same amount into the same amount of companies at same stages as before.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, deals are closing, financing is taking place as well as M&As.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Simply lively investment atmosphere, new up rounds and several M&A processes emerging.

Any other thoughts you want to share with TechCrunch readers?
Careful optimism, raise aggressively and cash up when possible, refresh the pipeline and get to it, corporates are back into closing deals.

Tal Slobodkin, StageOne Ventures

What trends are you most excited about investing in, generally?
Cloud computing and​ software infrastructure​/cybersecurity/DevOps/connected everything/deep compute, big data and AI/next-generation storage and data center.

What’s your latest, most exciting investment?
R-Go Robotics are pioneering an artificial perception technology that enables mobile robots to understand complex surroundings and operate autonomously just like humans.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
More sophisticated cyber solutions, additional MLOps technologies, AI solutions.

What are you looking for in your next investment, in general?
Deep-tech technology solving complex enterprise challenges.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
We see a lot of could monitoring services/SaaS cloud startups all competing with very similar technologies.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Israel 85%; USA 15% — always looking to expand in the U.S. market as well.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
StageOne portfolio companies: Coralogix, Silverfort, Epsagon, Avanan, Neuroblade. Other companies: OwnBackup/RunAI/Verbit/Indegy — all based in Israel.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Less relevant for Israel and more for the U.S., but yes we will probably see new founders from different geographies, which is a good thing, giving new opportunities to people that before may have not considered starting a company.

What are the opportunities startups may be able to tap into during these unprecedented times?
We do see that COVID-19 has less of an effect on the cybersecurity industry as many organizations are looking for new solutions, as the risk of cyberattacks increases due to remote working and refocusing a lot of their activity to the digital world.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Our companies continue to adapt and make the necessary changes and plans for the near future. Most of the companies have continued the work-from-home policy.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Seeing our companies continue to grow and expand both in people and product. They all adapted to the situation for both the short term and long run. They have continued to raise funds and some companies have even developed additional products to assist with COVID-19-related issues.

Ayal Itzkoviz, partner, Pitango First

What trends are you most excited about investing in, generally?
Disruption in traditional markets yearning innovation, such as retail, insurtech, logistics, etc.

B2B2B: Companies no longer wish to build things they can buy. Buying key components of the product/software enables companies to focus on the innovation side. One example is Frontegg — the company provides a set of pre-built, essential SaaS product capabilities that can easily and seamlessly integrate within any new or existing SaaS application. This enables dev teams to focus on perfecting the truly differentiating and valuable features at the heart of their SaaS offering. Another viable example is Stripe and its offering in the payments market.

Cyber: 2020 taught us many lessons, one of them is that tech is just getting more exciting as digital transformation is enhanced, and the other is that the digital revolution presents cyber challenges that didn’t exist before. This results in continued opportunities for disruption in this domain.

What’s your latest, most exciting investment?
Frontegg — a startup that transforms the way SaaS is being built, so that developers don’t need to develop nondifferentiating code and features. Frontegg provides a state of the art SaaS-as-a-service platform, perfectly integrated within the company’s stack and allowing it to do what it’s best at: building their own product. Frontegg is the first pre-built suite of universal SaaS capabilities, enabling teams to focus on core features, shorten time-to-market and drive user adoption. Frontegg’s mission is to accelerate the delivery of enterprise-grade SaaS applications while providing the safest, most secure and optimal user experience.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
First: more open-source projects. They do exist, but usually operate under the radar and come out of stealth mode when they’re already mature and beyond the phase of seed and stage on which Pitango First is focused.

Quantum computing, in our view, has reached a point of no return. We’ll be happy to see entrepreneurs, scientists and business people in Israel jumping on the opportunity wagon already now, and build companies now, before the quantum market begins what will surely be an exponential growth.

Lastly are startups with a double bottom line, i.e., startups that while solving a pain point in the market they’re in and have a potential to become category leader, also address an impact category. Pitango is the first VC to integrate ESG practices into its mainstream activities. As part of this strategy, and as a first step, we are focusing on our vast portfolio of companies and work closely with them to embed

ESG into their core practices through a “migration” process.

Pitango aims to move the needle in the venture capital space through the “AND” philosophy: profit AND purpose, capital AND impact. Pitango is introducing a new paradigm of how venture capital does impact and integrates the “AND” philosophy by turning to a new opportunity set: the impact migrants. i.e., those startups that, although might not have been created under the SDG narrative, have the potential and a desire to embrace and track their impact. They will define their impact mission, integrate SDG targets within their business performance and track impact in alignment with financial targets, all without losing sight of their primary mission to deliver superior financial returns.

Furthermore, Pitango applies this AND philosophy beyond its existing portfolio and onto future deal flow review. We call it the “mainstreaming” of impact investing.

What are you looking for in your next investment, in general?
The Israeli market has evolved tremendously in recent years. While the IPO market used to be out of reach for Israeli-born companies, this is no longer the case. We are looking for the visionaries, the dent blowers, the unconventional types who are eager to solve the biggest of challenges and are aiming at building an IPO-able business rather than an M&A one.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Pitango First is focused on Israeli/Israeli-related startups. From time to time we identify an investment opportunity in areas we have defined as strategic, in which the Israeli market isn’t mature enough and for which we believe we can add significant value and then invest in non-Israeli companies.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Israel is a super strong innovation hub. One of the major evolution trends of recent years is that the traditional glass ceiling that Israeli startups used to tackle has been shattered. Global players realize that now they can get the same upside like SV-based companies, in much more reasonable terms, and sometimes, less competition.
Somewhat counterintuitively, we see the investment climate in these times of COVID-19 being extremely vibrant and competitive. Strong teams are raising significant rounds at record high valuations, which add up to the current belief that COVID-19 didn’t slow, but accelerated the digital transformation.

What are the opportunities startups may be able to tap into during these unprecedented times?
For many seed early-stage startups that have secured funding, COVID-19 didn’t set setbacks in their plans, as they are further from the market from more mature companies. However, such companies, when backed by strong investors, while they may experience decrease in their revenues, are using this period to gain strength by acquiring companies within their ecosystem and position themselves better toward the out-of-pandemic curve that will eventually be here in a few short quarters.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The pattern of investing for the long run during the pandemic. Looking far into the horizon, as veterans of previous crises we were able to share our experience and insights and help them better deal with the crisis. Also, this question can’t be answered without mentioning the COVID-19 vaccines, which set a magnificent example to the extent humanity can benefit when tech, medical companies and governments join hands and engage in a group effort.

Ittai Harel, Pitango HealthTech

What trends are you most excited about investing in, generally?
The consumerization of healthcare.

What’s your latest, most exciting investment?
HomeThrive — a tech-enabled healthcare services company tackling the aging-in-home challenge and helping families help their loved ones age happily.

What are you looking for in your next investment, in general?
An all-star team building a category-defining or category-leading company with demonstrable clinical AND financial outcomes.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Narrow wearables that do not integrate into a clinical or life workflow.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Pitango HealthTech is focused on Israeli/Israeli-related startups. From time to time we identify an investment opportunity in areas we have defined as strategic, in which the Israeli market isn’t mature enough and for which we believe we can add significant value, and then invest in non-Israeli companies.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Israel has many thriving healthcare sectors — from RPM and computer vision in digital health to cardiovascular in med devices to drug research in biotech and pharma. We are excited about our portfolio company Variantyx (a provider of whole genome sequencing and analytics unique platform solution) and Alike (a patient-facing platform to allow individuals to access and analyze their medical data and to connect to others similar to them). We are also excited to be part of this ecosystem and to lead thought leadership in it.

How should investors in other cities think about the overall investment climate and opportunities in your city?
The healthcare innovation ecosystem in Israel is thriving. There are incredible entrepreneurs and opportunities with global potential and reach that global investors should be aware of.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
To some extent we are witness more disbursement in Israel, but there is nonetheless a strong draw to co-locating in hubs and we expect to see Tel-Aviv and the central area in Israel to continue dominating in terms of attractiveness to strong teams.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19?

Hospitals have seen a drastic decline in elective procedures and an overall disruption to their operations and budgets. Startups that are able to introduce new technologies to make this shift efficient and painless stand to win from the current trend.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
For the healthcare industry, COVID-19 has brought challenges — but also opportunities. We believe overall that our companies (and the industry overall) stand to gain from the shift as stakeholders are quicker to adopt changes that before took much longer. We advise our — and all — portfolio companies to prepare for the days after COVID and think through what changes in their specific segment will be long-lasting and are “here to stay.”

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
When the first individual in the U.K. — a 90-year-old woman — received the vaccine. A turning point hopefully for the entire world.

Extra Crunch roundup: Antitrust jitters, SPAC odyssey, white-hot IPOs, more

Some time ago, I gave up on the idea of finding a thread that connects each story in the weekly Extra Crunch roundup; there are no unified theories of technology news.

The stories that left the deepest impression were related to two news pegs that dominated the week — Visa and Plaid calling off their $5.3 billion acquisition agreement, and sizzling-hot IPOs for Affirm and Poshmark.

Watching Plaid and Visa sing “Let’s Call The Whole Thing Off” in harmony after the U.S. Department of Justice filed a lawsuit to block their deal wasn’t shocking. But I was surprised to find myself editing an interview Alex Wilhelm conducted with Plaid CEO Zach Perret the next day in which the executive said growing the company on its own is “once again” the correct strategy.


Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription


In an analysis for Extra Crunch, Managing Editor Danny Crichton suggested that federal regulators’ new interest in antitrust enforcement will affect valuations going forward. For example, Procter & Gamble and women’s beauty D2C brand Billie also called off their planned merger last week after the Federal Trade Commission raised objections in December.

Given the FTC’s moves last year to prevent Billie and Harry’s from being acquired, “it seems clear that U.S. antitrust authorities want broad competition for consumers in household goods,” Danny concluded, and I suspect that applies to Plaid as well.

In December, C3.ai, Doordash and Airbnb burst into the public markets to much acclaim. This week, used clothing marketplace Poshmark saw a 140% pop in its first day of trading and consumer-financing company Affirm “priced its IPO above its raised range at $49 per share,” reported Alex.

In a post titled “A theory about the current IPO market”, he identified eight key ingredients for brewing a debut with a big first-day pop, which includes “exist in a climate of near-zero interest rates” and “keep companies private longer.” Truly, words to live by!

Come back next week for more coverage of the public markets in The Exchange, an interview with Bustle CEO Bryan Goldberg where he shares his plans for taking the company public, a comprehensive post that will unpack the regulatory hurdles facing D2C consumer brands, and much more.

If you live in the U.S., enjoy your MLK Day holiday weekend, and wherever you are: Thanks very much for reading Extra Crunch.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

I’m taking the credit/blame for this headline https://t.co/2KYLsTxeHq

— Walter Thompson (@YourProtagonist) January 12, 2021

 

Rapid growth in 2020 reveals OKR software market’s untapped potential

After spending much of the week covering 2021’s frothy IPO market, Alex Wilhelm devoted this morning’s column to studying the OKR-focused software sector.

Measuring objectives and key results are core to every enterprise, perhaps more so these days since knowledge workers began working remotely in greater numbers last year.

A sign of the times: This week, enterprise orchestration SaaS platform Gtmhub announced that it raised a $30 million Series B.

To get a sense of how large the TAM is for OKR, Alex reached out to several companies and asked them to share new and historical growth metrics:

  • Gthmhub
  • Perdoo
  • WorkBoard
  • Ally.io
  • Koan
  • WeekDone

“Some OKR-focused startups didn’t get back to us, and some leaders wanted to share the best stuff off the record, which we grant at times for candor amongst startup executives,” he wrote.

5 consumer hardware VCs share their 2021 investment strategies

For our latest investor survey, Matt Burns interviewed five VCs who actively fund consumer electronics startups:

  • Hans Tung, managing partner, GGV Capital
  • Dayna Grayson, co-founder and general partner, Construct Capital
  • Cyril Ebersweiler, general partner, SOSV
  • Bilal Zuberi, partner, Lux Capital
  • Rob Coneybeer, managing director, Shasta Ventures

“Consumer hardware has always been a tough market to crack, but the COVID-19 crisis made it even harder,” says Matt, noting that the pandemic fueled wide interest in fitness startups like Mirror, Peloton and Tonal.

Bonus: Many VCs listed the founders, investors and companies that are taking the lead in consumer hardware innovation.

A theory about the current IPO market

Digital generated image of abstract multi colored curve chart on white background.

Image Credits: Getty Images/Andriy Onufriyenko

If you’re looking for insight into “why everything feels so damn silly this year” in the public markets, a post Alex wrote Thursday afternoon might offer some perspective.

As someone who pays close attention to late-stage venture markets, he’s identified eight factors that are pushing debuts for unicorns like Affirm and Poshmark into the stratosphere.

TL;DR? “Lots of demand, little supply, boom goes the price.”

Poshmark prices IPO above range as public markets continue to YOLO startups

Clothing resale marketplace Poshmark closed up more than 140% on its first trading day yesterday.

In Thursday’s edition of The Exchange, Alex noted that Poshmark boosted its valuation by selling 6.6 million shares at its IPO price, scooping up $277.2 million in the process.

Poshmark’s surge in trading is good news for its employees and stockholders, but it reflects poorly on “the venture-focused money people who we suppose know what they are talking about when it comes to equity in private companies,” he says.

Will startup valuations change given rising antitrust concerns?

GettyImages 926051128

Image Credits: monsitj/Getty Images

This week, Visa announced it would drop its planned acquisition of Plaid after the U.S. Department of Justice filed suit to block it last fall.

Last week, Procter & Gamble called off its purchase of Billie, a women’s beauty products startup — in December, the U.S. Federal Trade Commission sued to block that deal, too.

Once upon a time, the U.S. government took an arm’s-length approach to enforcing antitrust laws, but the tide has turned, says Managing Editor Danny Crichton.

Going forward, “antitrust won’t kill acquisitions in general, but it could prevent the buyers with the highest reserve prices from entering the fray.”

Dear Sophie: What’s the new minimum salary required for H-1B visa applicants?

Image Credits: Sophie Alcorn

Dear Sophie:

I’m a grad student currently working on F-1 STEM OPT. The company I work for has indicated it will sponsor me for an H-1B visa this year.

I hear the random H-1B lottery will be replaced with a new system that selects H-1B candidates based on their salaries.

How will this new process work?

— Positive in Palo Alto

Venture capitalists react to Visa-Plaid deal meltdown

A homemade chocolate cookie with a bite and crumbs on a white background

Image Credits: Ana Maria Serrano/Getty Images

After news broke that Visa’s $5.3 billion purchase of API startup Plaid fell apart, Alex Wilhelm and Ron Miller interviewed several investors to get their reactions:

  • Anshu Sharma, co-founder and CEO, SkyflowAPI
  • Amy Cheetham, principal, Costanoa Ventures
  • Sheel Mohnot, co-founder, Better Tomorrow Ventures
  • Lucas Timberlake, partner, Fintech Ventures
  • Nico Berardi, founder and general partner, ANIMO Ventures
  • Allen Miller, VC, Oak HC/FT
  • Sri Muppidi, VC, Sierra Ventures
  • Christian Lassonde, VC, Impression Ventures

Plaid CEO touts new ‘clarity’ after failed Visa acquisition

Zach Perret, chief executive officer and co-founder of Plaid Technologies Inc., speaks during the Silicon Slopes Tech Summit in Salt Lake City, Utah, U.S., on Friday, Jan. 31, 2020. The summit brings together the leading minds in the tech industry for two-days of keynote speakers, breakout sessions, and networking opportunities. Photographer: George Frey/Bloomberg via Getty Images

Image Credits: George Frey/Bloomberg/Getty Images

Alex Wilhelm interviewed Plaid CEO Zach Perret after the Visa acquisition was called off to learn more about his mindset and the company’s short-term plans.

Perret, who noted that the last few years have been a “roller coaster,” said the Visa deal was the right decision at the time, but going it alone is “once again” Plaid’s best way forward.

2021: A SPAC odyssey

In Tuesday’s edition of The Exchange, Alex Wilhelm took a closer look at blank-check offerings for digital asset marketplace Bakkt and personal finance platform SoFi.

To create a detailed analysis of the investor presentations for both offerings, he tried to answer two questions:

  1. Are special purpose acquisition companies a path to public markets for “potentially promising companies that lacked obvious, near-term growth stories?”
  2. Given the number of unicorns and the limited number of companies that can IPO at any given time, “maybe SPACS would help close the liquidity gap?”

Flexible VC: A new model for startups targeting profitability

12 ‘flexible VCs’ who operate where equity meets revenue share

Spotlit Multi Colored Coil Toy in the Dark.

Image Credits: MirageC/Getty Images

Growth-stage startups in search of funding have a new option: “flexible VC” investors.

An amalgam of revenue-based investment and traditional VC, investors who fall into this category let entrepreneurs “access immediate risk capital while preserving exit, growth trajectory and ownership optionality.”

In a comprehensive explainer, fund managers David Teten and Jamie Finney present different investment structures so founders can get a clear sense of how flexible VC compares to other venture capital models. In a follow-up post, they share a list of a dozen active investors who offer funding via these nontraditional routes.

These 5 VCs have high hopes for cannabis in 2021

Marijuana leaf on a yellow background.

Image Credits: Anton Petrus (opens in a new window)/Getty Images

For some consumers, “cannabis has always been essential,” writes Matt Burns, but once local governments allowed dispensaries to remain open during the pandemic, it signaled a shift in the regulatory environment and investors took notice.

Matt asked five VCs about where they think the industry is heading in 2021 and what advice they’re offering their portfolio companies:

Trump Administration adds Xiaomi to military blacklist

Chinese smartphone maker Xiaomi is the latest to be added to the Trump Administration’s military blacklist. On Thursday, the Department of Defense added nine more companies to its list of alleged Chinese military companies, including Xiaomi.

Xiaomi was the world’s third-largest smartphone maker as of Q3 last year, coming ahead of Apple and trailing behind Samsung and Huawei, according to market researcher IDC.

In November, President Donald Trump signed an executive order, which was set to take effect in January, to bar investment in companies designated as supporting efforts of China’s military, intelligence and security apparatuses. Huawei, China’s major chipmaker SMIC, and the country’s three largest telecoms operators are among the targets of the list.

The military blacklist is different from the Commerce Department’s entity list, which famously cuts Huawei, DJI, SenseTime and other Chinese tech firms off their U.S. suppliers over national security concerns.

Xiaomi “confirms that it is not owned, controlled or affiliated with the Chinese military, and is not a ‘Communist Chinese Military Company’ defined under the NDAA [National Defense Authorization Act]. The company will take appropriate course of actions to protect the interests of the company and its shareholders,” a Xiaomi spokesperson said in a statement.

Like the entity list, the U.S. government’s military blacklist has caused confusion around compliance. In response to the sanctions on China Mobile, China Unicom and China Telecom, the New York Stock Exchange made three moves. It first announced to delist the three Chinese telcos, then decided not to after consultation with regulators, but eventually reversed its reversal and said it would delist them, after all, upon further evaluation.

“The company is reviewing the potential consequences of this to develop a fuller understanding of its impact on the group. The company will make further announcements as and when appropriate,” the Xiaomi representative said.

Xiaomi is listed in Hong Kong, and the executive order could force American investors to divest their holdings in the phone maker, whose shares tumbled more than 11% to $29 apiece on the blacklist announcement.

While Xiaomi’s operations and technology access are unaffected in the latest round of U.S. government assault, a supply chain ban could become a sword of Damocles. The Chinese phone maker has been working closely with Qualcomm and was notably the first to get the high-end Snapdragon 888 chips. To evade restrictions imposed by the entity list, Huawei spun out its budget phone unit Honor in a bid to save its supply chain. It remains to be seen how Joe Biden will tackle Trump-era policies towards Chinese tech giants.

Germany’s Xentral nabs $20M led by Sequoia to help online-facing SMBs run back offices better

Small enterprises remain one of the most underserved segments of the business market, but the growth of cloud-based services — easier to buy, easier to provision — has helped that change in recent years. Today, one of the more promising startups out of Europe building software to help SMEs run online businesses is announcing some funding to better tap into both the opportunity to build these services, and to meet a growing demand from the SME segment.

Xentral, a German startup that develops enterprise resource planning software covering a variety of back-office functions for the average online small business, has picked up a Series A of $20 million.

The company’s platform today covers services like order and warehouse management, packaging, fulfillment, accounting and sales management, and the majority of its 1,000 customers are in Germany — they include the likes of direct-to-consumer brands like YFood, KoRo, the Nu Company and Flyeralarm.

But Benedikt Sauter, the co-founder and CEO of Xentral, said the ambition is to expand into the rest of Europe, and eventually other geographies, and to fold in more services to its ERP platform, such as a more powerful API to allow customers to integrate more services — for example in cases where a business might be selling on their own site, but also Amazon, eBay, social platforms and more — to bring their businesses to a wider market.

Mainly, he said, the startup wants “to build a better ecosystem to help our customers run their own businesses better.”

The funding is being led by Sequoia Capital, with Visionaires Club (a B2B-focused VC out of Berlin) also participating.

The deal is notable for being the prolific, high-profile VC’s first investment in Europe since officially opening for business in the region. (Sequoia has backed a number of startups in Europe before this, including Graphcore, Klarna, Tessian, Unity, UiPath, n8n and Evervault — but all of those deals were done from afar.)

Augsburg-based Xentral has been around as a startup since 2018, and “as a startup” is the operative phrase here.

Sauter and his co-founder Claudia Sauter (who is also his co-founder in life: she is his wife) built the early prototype for the service originally for themselves.

The pair were running a business of their own — a hardware company they founded in 2008, selling not nails, hammers and wood, but circuit boards they they designed, along with other hardware to build computers and other connected objects. Around 2013, as the business was starting to pick up steam, they decided that they really needed better tools to manage everything at the backend so that they would have more time to build their actual products.

But Bene Sauter quickly discovered a problem in the process: smaller businesses may have Shopify and its various competitors to help manage e-commerce at the front end, but when it came to the many parts of the process at the backend, there really wasn’t a single, easy solution (remember this was eight years ago, at a time before the Shopifys of the world were yet to expand into these kinds of tools). Being of a DIY and technical persuasion — Sauter had studied hardware engineering at university — he decided that he’d try to build the tools that he wanted to use himself.

The Sauters used those tools for for years, until without much outbound effort, they started to get a some inbound interest from other online businesses to use the software, too. That led to the Sauters balancing both their own hardware business and selling the software on the side, until around 2017/2018 when they decided to wind down the hardware operation and focus on the software full-time. And from then, Xentral was born. It now has, in addition to 1,000 customers, some 65 employees working on developing the platform.

The focus with Xentral is to have a platform that is easy to implement and use, regardless of what kind of SME you might be as long as you are selling online. But even so, Sauter pointed out that the other common thread is that you need at least one person at the business who champions and understands the value of ERP. “It’s really a mindset,” he said.

The challenge with Xentral in that regard will be to see how and if they can bring more businesses to the table and tap into the kinds of tools that it provides, at the same time that a number of other players also eye up the same market. (Others in the same general category of building ERP for small businesses include online payments provider Sage, Netsuite and Acumatica.) ERP overall is forecast to become a $49.5 billion market by 2025.

Sequoia and its new partner in Europe Luciana Lixandru — who is joining Xentral’s board along with Luciana Lixandru and Visionaries’ Robert Lacher — believe however that there remains a golden opportunity to build a new kind of provider from the ground up and out of Europe specifically to target the opportunity in that region.

“I see Xentral becoming the de facto platform for any SMEs to run their businesses online,” she said in an interview. “ERP sounds a bit scary especially because it makes one think of companies like SAP, long implementation cycles, and so on. But here it’s the opposite.” She describes Xentral as “very lean and easy to use because you an start with one module and then add more. For SMEs it has to be super simple. I see this becoming like the Shopify for ERP.”

Yo-Kai Express introduces Takumi, a smart home cooking appliance

Yo-Kai Express is known for autonomous restaurant technology for venues like office campuses, malls and hotels. As people continue staying home because of the COVID-19 pandemic, the company is introducing a smart home cooking appliance with multiple functions. Called Takumi, it includes a coffee maker, high induction cooktop and a steamer for sanitizing utensils and baby bottles. Takumi is connected by RFID to an app with preprogrammed recipes, which also sends alert when its water container is running low.

The company is currently presenting Takumi at CES’ Taiwan Tech Arena.

Yo-Kai Express' smart home cooking appliance Takumi

Yo-Kai Express’ smart home cooking appliance Takumi

If you live in the Bay Area, you might have seen Yo-Kai Express’s Octo-Chef, a vending machine that serves hot noodle dishes (ramen, udon and pho), in venues like the San Francisco International Airport, the Metreon mall in San Francisco and corporate campuses. But the company is adapting as people stay home. In April, it launched a home meal kit delivery service that is now available in all states.

Created for people who want a home-cooked meal but are short on time (and space), the Takumi’s pre-programmed recipes have cooking times of just two to eight minutes. Yo-Kai Express is known for noodle dishes, but the Takumi’s menu will also include rice bowls, dim sum, dumplings and pasta.

Despite PR storm, Pinduoduo stock and downloads stay robust

Pinduoduo, a rapidly growing Chinese e-commerce company, is weathering its PR storm after the death of an employee sparked criticism against the firm’s grueling working hours.

The employee, 21 years old, collapsed on her way home from work on a late night before New Year. The cause of her death has not been disclosed but internet users speculated that she had died from exhaustion.

Posts with the hashtag #PinduoduoEmployeeSuddenDeath have accumulated 300 million views on the Chinese microblogging platform Weibo. Separately, another Pinduoduo employee committed suicide on January 9 by jumping from his 27th-floor apartment. The local labor authorities are reported to be reviewing working conditions at Shanghai-based Pinduoduo.

On Sunday, a former Pinduoduo employee spoke out against the firm’s stressful work culture in a video that went viral, adding to the public outcry against Alibaba’s biggest rival. He alleged that employees at Pinduoduo’s headquarters are required to work at least 300 hours a month (about 75 hours a week), whereas staff in the newly established grocery delivery department have a 380-hour minimum. The employee who fell on her way home worked on Pinduoduo’s grocery business in the Western province of Xinjiang.

People with knowledge told TechCrunch that employees working on certain projects at Pinduoduo might work over 300 hours a month, though the hours aren’t mandatory. Companywide, staff are required to work from 11 AM to 8 PM.

Pinduoduo cannot be immediately be reached for comment.

Long working hours aren’t unique to Pinduoduo in China. The string of incidents is reviving the debate around “996”, a term that denotes employees working from 9 AM to 9 PM, six days a week, though it can refer to any other form of demanding work regime in China’s cutthroat internet industry.

Despite the public backlash and calls to boycott Pinduoduo, the company’s market position appears to remain firm. Its app downloads have remained stable since the first employee incident two weeks ago, with some days even seeing slight growth in installs, according to data analytics provider Jiguang. As of January 8, Pinduoduo had nearly 650 million installs.

Its shares, traded in New York, climbed from $144 on December 28 to $187 on January 5 and dropped slightly to $174 on January 11. A few venture capital investors of Pinduoduo contacted by TechCrunch declined to comment for this story.

The figures could be telling. Despite its efforts to attract more users in China’s wealthier cities, a substantial number of Pinduoduo users live in China’s low-tier cities and rural towns. The “996” culture of the megacity-based tech giants may be remote for them, while the deals on Pinduoduo, the e-commerce app famous for its “dirt cheap” goods, are tangible.

China’s search giant Baidu to set up an EV making venture

China’s search giant Baidu is extending its car ambitions from mere software to production. The company said Monday that it will set up a company to produce electric vehicles with the help of Chinese automaker Geely. Baidu, a dominant player in China’s internet search market for the last decade or so, will provide smart driving technologies while Geely, which has an impending merger with Sweden’s Volvo, will be in charge of car design and manufacturing.

The move marks the latest company in China’s internet industry to enter the EV space. In November, news arrived that Alibaba and Chinese state-owned carmaker SAIC Motor had joined hands to produce electric cars. Ride-share company Didi and EV maker BYD co-developed a model for ride-hailing, which is already attracting customers like Ideanomics. Meanwhile, the stocks of China’s Tesla challengers, such as Xpeng, Li Auto, and NIO, have been in a steady uptrend over the past year.

Baidu’s car push is part of its effort to diversify a business relying on search advertising revenue. New media platforms such as ByteDance’s Toutiao news aggregator and short-video app Douyin come with their own search feature and have gradually eroded the share of traditional search engines like Baidu. Short video services have emerged as the second-most popular channel for internet search in China, trailing after web search engines and coming ahead of social networks and e-commerce, data analytics firm Jiguang shows.

Baidu has been working aggressively on autonomous driving since 2017. Its Apollo ecosystem, which is billed as “an Android for smart driving,” has accumulated over a hundred manufacturing and supplier partners. Baidu has also been busy testing autonomous driving and recently rolled out a robotaxi fleet.

The new venture will operate as a Baidu subsidiary where Geely will serve as a strategic partner and Baidu units like Apollo and Baidu Maps will contribute capabilities. The firm will cover the entire industrial chain, including vehicle design, research and development, manufacturing, sales, and service.

It’s unclear how Baidu’s tie-up with Geely will affect Apollo’s operation, though Baidu promised in its announcement that it will “uphold its spirit of open collaboration across the AI technology industry, striving to work closely with its ecosystem partners to advance the new wave of intelligent transformation.”

“At Baidu, we have long believed in the future of intelligent driving and have over the past decade invested heavily in AI to build a portfolio of world-class self-driving services,” said Robin Li, co-founder and chief executive officer of Baidu.

“We believe that by combining Baidu’s expertise in smart transportation, connected vehicles and autonomous driving with Geely’s expertise as a leading automobile and EV manufacturer, the new partnership will pave the way for future passenger vehicles.”

Amazon Web Services gives Parler 24-hour notice that it will suspend services to the company

Parler is at risk of disappearing, just as the social media network popular among conservatives was reaching new heights of popularity in the wake of President Donald Trump’s ban from all major tech social platforms.

Amazon Web Services, which provides backend cloud services, has informed Parler that it intends to cut ties with the company in the next 24 hours, according to a report in BuzzFeed News. Parler’s application is built on top of AWS infrastructure, services that are critical for the operation of its platform. Earlier today, Apple announced that it was following Google in blocking the app from its App Store, citing a lack of content moderation.

Parler, whose fortunes have soared as users upset at the President’s silencing on mainstream social media outlets flocked to the service, is now another site of contention in the struggle over the limits of free speech and accountability online.

Parler CEO John Matze said that the platform would be offline for at least a week, as “they rebuild from scratch” in response to AWS’ communications. Some Parler users, as captured in screenshots shared on Twitter, seemed to respond with vague intentions to violently attack AWS data centers, perhaps proving Amazon’s point in the process.

In the wake of the riots at the Capitol on Wednesday and a purge of accounts accused of inciting violence on Twitter and Facebook, Parler had become the home for a raft of radical voices calling for armed “Patriots” to commit violence at the nation’s capitol and statehouses around the country.

Most recently, conservative militants on the site had been calling for “Patriots” to amplify the events of January 6 with a march on Washington DC with weapons on January 19.

Even as pressure was came from Apple and Amazon, whose employees had called for the suspension of services with the company, Parler was taking steps to moderate posts on its platform.

The company acknowledged that it had removed some posts from Trump supporter Lin Wood, who had called for the execution of Vice President Mike Pence in a series of proclamations on the company’s site.

Over the past few months, Republican lawmakers including Sen. Ted Cruz and Congressman Devin Nunes — along with conservative firebrands like Wood have found a home on the platform, where they can share conspiracy theories with abandon.

In an email quoted by BuzzFeed News, Amazon Web Services’ Trust and Safety Team told Parler’s chief policy officer, Amy Peikoff that calls for violence that were spreading across Parler’s platform violated its terms of service. The company’s team also said that Parler’s plan to use volunteers to moderate content on the platform would prove effective, according to BuzzFeed.

“Recently, we’ve seen a steady increase in this violent content on your website, all of which violates our terms. It’s clear that Parler does not have an effective process to comply with the AWS terms of service,” BuzzFeed reported the email as saying.

Here’s Amazon’s letter to Parler in full.

Dear Amy,

Thank you for speaking with us earlier today.

As we discussed on the phone yesterday and this morning, we remain troubled by the repeated violations of our terms of service. Over the past several weeks, we’ve reported 98 examples to Parler of posts that clearly encourage and incite violence. Here are a few examples below from the ones we’ve sent previously: [See images above.]

Recently, we’ve seen a steady increase in this violent content on your website, all of which violates our terms. It’s clear that Parler does not have an effective process to comply with the AWS terms of service. It also seems that Parler is still trying to determine its position on content moderation. You remove some violent content when contacted by us or others, but not always with urgency. Your CEO recently stated publicly that he doesn’t “feel responsible for any of this, and neither should the platform.” This morning, you shared that you have a plan to more proactively moderate violent content, but plan to do so manually with volunteers. It’s our view that this nascent plan to use volunteers to promptly identify and remove dangerous content will not work in light of the rapidly growing number of violent posts. This is further demonstrated by the fact that you still have not taken down much of the content that we’ve sent you. Given the unfortunate events that transpired this past week in Washington, D.C., there is serious risk that this type of content will further incite violence.

AWS provides technology and services to customers across the political spectrum, and we continue to respect Parler’s right to determine for itself what content it will allow on its site. However, we cannot provide services to a customer that is unable to effectively identify and remove content that encourages or incites violence against others. Because Parler cannot comply with our terms of service and poses a very real risk to public safety, we plan to suspend Parler’s account effective Sunday, January 10th, at 11:59PM PST. We will ensure that all of your data is preserved for you to migrate to your own servers, and will work with you as best as we can to help your migration.

– AWS Trust & Safety Team

Update January 9, 2020: Added a note about Parler users’ reactions.

Why Twitter says it banned President Trump

Twitter permanently banned the U.S. president Friday, taking a dramatic step to limit Trump’s ability to communicate with his followers. That decision, made in light of his encouragement for Wednesday’s violent invasion of the U.S. Capitol, might seem sudden for anyone not particularly familiar with his Twitter presence.

In reality, Twitter gave Trump many, many second chances over his four years as president, keeping him on the platform due to the company’s belief that speech by world leaders is in the public interest, even if it breaks the rules.

Now that Trump’s gone for good, we have a pretty interesting glimpse into the policy decision making that led Twitter to bring the hammer down on Friday. The company first announced Trump’s ban in a series of tweets from its @TwitterSafety account but also linked to a blog post detailing its thinking.

In that deep dive, the company explains that it gave Trump one last chance after suspending and then reinstating his account for violations made on Wednesday. But the following day, a pair of tweets the president made pushed him over the line. Twitter said those tweets, pictured below, were not examined on a standalone basis, but rather in the context of his recent behavior and this week’s events.

“… We have determined that these Tweets are in violation of the Glorification of Violence Policy and the user @realDonaldTrump should be immediately permanently suspended from the service,” Twitter wrote.

Screenshot via Twitter

This is how the company explained its reasoning, point by point:

  • “President Trump’s statement that he will not be attending the Inauguration is being received by a number of his supporters as further confirmation that the election was not legitimate and is seen as him disavowing his previous claim made via two Tweets (1, 2) by his Deputy Chief of Staff, Dan Scavino, that there would be an ‘orderly transition’ on January 20th.
  • “The second Tweet may also serve as encouragement to those potentially considering violent acts that the Inauguration would be a ‘safe’ target, as he will not be attending.
  • “The use of the words ‘American Patriots’ to describe some of his supporters is also being interpreted as support for those committing violent acts at the US Capitol.
  • “The mention of his supporters having a ‘GIANT VOICE long into the future’ and that ‘They will not be disrespected or treated unfairly in any way, shape or form!!!’ is being interpreted as further indication that President Trump does not plan to facilitate an ‘orderly transition’ and instead that he plans to continue to support, empower, and shield those who believe he won the election.
  • “Plans for future armed protests have already begun proliferating on and off-Twitter, including a proposed secondary attack on the US Capitol and state capitol buildings on January 17, 2021.”

All of that is pretty intuitive, though his most fervent supporters aren’t likely to agree. Ultimately these decisions, as much as they do come down to stated policies, involve a lot of subjective analysis and interpretation. Try as social media companies might to let algorithms make the hard calls for them, the buck stops with a group of humans trying to figure out the best course of action.

Twitter’s explanation here offers a a rare totally transparent glimpse into how social networks decide what stays and what goes. It’s a big move for Twitter — one that many people reasonably believe should have been made months if not years ago — and it’s useful to have what is so often an inscrutable high-level decision making process laid out plainly and publicly for all to see.

Shares of Hyundai Motors Co. climb more than 20% on potential EV deal with Apple

Hyundai Motor Company is downplaying reports that it is in talks with Apple to produce an autonomous electric vehicle, stating that discussions are still in the “early stage” and still undecided. But the news of a potential tie-up (however tentative) with Apple, which is known for keeping a tight lid on deals before they are announced, was enough to send shares of Hyundai Motor Company up more than 20% on the Korea Exchange during trading on Friday.

The talks were first reported by the Korea Economic Daily and confirmed by Hyundai to Bloomberg in a statement that said “Apple and Hyundai are in discussion, but as it is at early stage, nothing has been decided.” The Korean auto giant also told CNBC that “we understand Apple is in discussion with a variety of global automakers, including Hyundai Motor. As the discussion is at its early stage, nothing has been decided.”

A Hyundai spokesperson declined to comment to TechCrunch. Apple has also been contacted for comment.

Last month, Reuters reported that Apple’s car initiative, called Project Titan, is still going on, with plans to develop an autonomous electric passenger vehicle. But the car is not expected to launch until 2024.

Hyundai launched its own electric vehicle brand, Ioniq, in August 2020, with plans to bring three all-electric vehicles to market over the next four years, as part of its strategy to sell one million battery electric vehicles and take a 10% share of the EV market by 2025. Hyundai also has a joint venture with autonomous driving technology company Aptiv to make Level 4 and Level 5 production-ready self-driving systems available to robotaxi, fleet operators and automakers by 2022. The Aptiv partnership was announced in 2019.

 

State Department reportedly orders diplomats to stop posting on social media after U.S. Capitol riots

The State Department ordered diplomats to stop posting on social media after pro-Trump rioters stormed the United States Capitol, reports CNN, citing three diplomatic sources. Diplomats overseas were also told by the under secretary for public affairs to remove scheduled content for Facebook, Hootsuite and Twitter until told otherwise, and that planned social media posts from the State Department’s main accounts were also being suspended.

According to CNN, diplomats are usually only told to pause social media posts after a terrorist attack or major natural disaster.

As of late Wednesday evening in the United States, the main State Department Twitter account had only retweeted a thread by Secretary of State MIchael Pompeo in which he said “the storming of the U.S. Capitol today is unacceptable.”

So far, the official Instagram accounts of the State Department’s Instagram and Pompeo and the State Department’s YouTube have made no posts after the rioting at the Capitol, while the State Department’s Facebook page has a post repeating Pompeo’s Twitter thread.

TechCrunch has contacted the State Department for comment.

Social media platforms scrambled to react after an extraordinary and terrifying day of violence that resulted in the deaths of four people. Rioters breached the Capitol early Wednesday afternoon, as electoral votes were being counted, forcing lawmakers to evacuate (the joint session was later reconvened).

On Wednesday afternoon, Twitter required the removal of three of President Donald Trump’s tweets and locked his account for twelve hours, before stating that he would be permanently suspended for future violations of its Civic Integrity policy. Facebook and Instagram announced that the president would barred from posting to his accounts for 24 hours and began blocking content posted to the #StormTheCapitol hashtag.

Oxbotica raises $47M to deploy its autonomous vehicle software in industrial applications

While the world continues to await the arrival of safe, reliable and cost-effective self-driving cars, one of the pioneers in the world of autonomous vehicle software has raised some substantial funding to double down on what it sees as a more immediate opportunity: providing technology to industrial companies to build off-road applications.

Oxbotica, the Oxford, England startup that builds what it calls “universal autonomy” — flexible technology that it says can power the navigation, perception, user interfaces, fleet management and other features needed to run self-driving vehicles in multiple environments, regardless of the hardware being used — has picked up $47 million in a Series B round of funding from an interesting mix of strategic and financial investors.

Led by bp ventures, the investing arm of oil and gas giant bp, the round also includes BGF, safety equipment maker Halma, pension fund HostPlus, IP Group, Tencent, Venture Science and funds advised by Doxa Partners.

Oxbotica said it plans to use the capital to fuel a raft of upcoming deployments — several that will be coming online this year, according to its CEO — for clients in areas like mining, port logistics and more, with its lead investor bp an indication of the size of its customers and the kinds of projects that are in its sights.

The question, CEO Ozgur Tohumcu said in an interview, is “Where is the autonomy needed today? If you go to mines or ports, you can see vehicles in use already,” he said. “We see a huge transformation happening in the industrial domain.”

The funding and focus on industry are interesting turns for Oxbotica. The startup has been around since about 2014, originally as a spinout from Oxford University co-founded by academics Paul Newman and Ingmar Posner — Newman remains at the startup as its CTO, while Posner remains an AI professor at Oxford.

Oxbotica has been associated with a number of high-profile projects — early on, it provided sensor technology for Nasa’s Mars Rover, for example.

Over time, it has streamlined what it does to two main platforms that it calls Selenium and Caesium, covering respectively navigation, mapping, perception, machine learning, data export and related technology; and fleet management.

Newman says that what makes Oxbotica stand out from other autonomous software providers is that its systems are lighter and easier to use.

“Where we are good is in edge compute,” he said. “Our radar-based maps are 10 megabytes to cover a kilometer rather than hundreds of megabytes… Our business plan is to build a horizontal software platform like Microsoft’s.” That may underplay the efficiency of what it’s building, however: Oxbotica also has worked out how to efficiently transfer the enormous data loads associated with autonomous systems, and is working with companies like Cisco to bring these online.

In recent years Oxbotica has been synonymous with some of the more notable on-road self-driving schemes in the U.K. But, as you would expect with autonomous car projects, not everything has panned out as expected.

A self-driving pilot Oxbotica kicked off with London-based car service Addison Lee in 2018 projected that it would have its first cars on the road by 2021. That project was quietly shut down, however, when Addison Lee was sold on by Carlyle last year and the company abandoned costly moonshots. Another effort, the publicly backed Project Endeavour to build autonomous car systems across towns in England, appears to still be in progress.

The turn to industrial customers, Newman said, is coming alongside those more ambitious, larger-scale applications. “Industrial autonomy for off-road refineries, ports and airports happens on the way to on-road autonomy,” he said, with the focus firmly remaining on providing software that can be used with different hardware. “We’ve always had this vision of ‘no atoms, just software,’ ” he said. “There is nothing special about the road. Our point is to be agnostic, to make sure it works on any hardware platform.”

It may claim to have always been interested in hardware- and application-agnostic autonomy, but these days it’s being joined by others that have tried the other route and have decided to follow the Oxbotica strategy instead. They include FiveAI, another hyped autonomous startup out of the U.K. that originally wanted to build its own fleet of self-driving vehicles but instead last year pivoted to providing its software technology on a B2B basis for other hardware makers.

Oxbotica has now raised about $80 million to date, and it’s not disclosing its valuation but is optimistic that the coming year — with deployments and other new partnerships — will bear out that it’s doing just fine in the current market.

“bp ventures are delighted to invest in Oxbotica – we believe its software could accelerate the market for autonomous vehicles,” said Erin Hallock, bp ventures managing partner, in a statement. “Helping to accelerate the global revolution in mobility is at the heart of bp’s strategy to become an integrated energy company focused on delivering solutions for customers.”

TrendForce expects the smartphone market to slowly recover in 2021, but Huawei won’t benefit

After a dismal year, the global smartphone market will slowly start recovering in 2021, predicts TrendForce. But Huawei won’t benefit and, in fact, will fall out of the research firm’s list of the world’s top six smartphone makers by production volume.

In 2020, global smartphone production dropped 11% year-over-year to 1.25 billion units. This year, TrendForce expects it to increase by 9% to 1.36 million units, as people replace old devices and demand grows in emerging markets. But even that slight recovery is contingent on how the pandemic continues to impact the economy and the global chip shortage that is currently causing production delays across almost the entire electronics industry.

In 2020, the top six smartphone brands in order of production volume were Samsung, Apple, Huawei, Xiaomi, OPPO and Vivo. But this year TrendForce expects Huawei to slip out of that ranking, with the new top-six list comprising of Samsung, Apple, Xiaomi, OPPO, Vivo and Transsion.

Those six companies are expected to account for 80% of the global smartphone market in 2021, while Huawei will come in at seventh place.

The main reason for Huawei’s drop is the divestment of its budget smartphone brand, Honor. Huawei confirmed in November that it is selling Honor to a consortium of companies to save the division’s supply chain from the impact of United States government trade restrictions.

The spin-out was meant to shield Honor from the sanctions that have hurt Huawei’s business. But “it remains to be seen whether the ‘new’ Honor can capture consumers’ attention without the support from Huawei. Also, Huawei and the new Honor will be directly competing against each other in the future, especially if the former is somehow freed from the U.S. trade sanctions at a later time,” said TrendForce’s report.

In a previous report published shortly after Honor’s sale was announced, TrendForce predicted that the deal, along with the global chip shortage, meant Huawei would take just 4% of the market in 2021, compared to the 17% it held in 2019, and estimated 14% in 2020. Apple is expected to take away some market share from Huawei’s high-end smartphones, while Xiaomi, OPPO and Vivo will also benefit. TrendForce expects the newly spun-out Honor to take 2% market share in 2021.

This Week in Apps: Apple bans party app, China loses 39K iOS games, TikTok births a ‘Ratatousical’

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry is as hot as ever, with a record 204 billion total downloads and $120 billion in global consumer spend in 2019. Not including Chinese third-party app stores, iOS and Android users in 2020 downloaded 130 billion apps and spent a record $112 billion. In 2019, people spent three hours and 40 minutes per day using apps, rivaling TV.

Due to COVID-19, time spent in apps jumped 25% year-over-year on Android. Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

This week (after a week off for the holidays), we’re taking a look at holiday app store spending, how the Chinese gaming licensing rules have impacted the App Store, Apple’s move to ban a party app that could have helped spread COVID, and the collaborative musical created by TikTok users, among other things.

Top Stories

Christmas Day app spending grows 35% year-over-year

Global app spending didn’t seem to be impacted by the pandemic in 2020, according to data from Sensor Tower. The firm reports that consumers spent $407.6 million in apps from the iOS App Store and Google Play on Christmas Day, 34.5% from the $303 million spent in 2019. The majority of the spending was on mobile games, up 27% year-over-year to $295.6 million. Tencent’s Honor of Kings led the games category, while TikTok led non-game apps with $4.7 million in spending on Christmas Day.

Image Credits: Sensor Tower

As in prior years, Apple accounted for the majority of the spending, or 68.4% ($278.6M) vs Google Play’s $129M. The spending was led by the U.S., who accounted for ~$130 million of the total

Apple takes a stand on pandemic parties

Apple’s App Store Review guidelines don’t specifically detail how the company will handle apps that could contribute to the spread of COVID-19, but Apple found a way to draw the line when it came to a social app that encouraged unsafe gatherings. This past week, Apple banned the app Vybe Together, which had allowed people to locate “secret” indoor house parties in their area, sometimes including those held in violation of state guidelines.

NYT reporter Taylor Lorenz first called attention to the problem with a tweet. The app had been posting to TikTok to gain attention, but its account has since been removed. Following its removal, the company defended itself by saying that it was only meant for small get-togethers and the founder lamented being “canceled by the liberal media.”

There’s no good defense, really, for the unnecessary and ill-timed promotion of an app that encouraged people from different households to gather, which spreads COVID. And what the founder seemed to not understand, by nature of his recent tweets and statements on the app’s website, is that many cities and states also already prohibit small private gatherings of varying degrees, including those he believes are fine, like small parties in folks’ “own apartments with people in your area.”

The U.S. is coping with 346,000 COVID deaths, and in New York, where the app was promoting NYE parties, 74% of all COVID-19 cases from Sept.-Nov. 2020 have been linked to private gatherings.

The media may have reported on what the app was doing, but ultimately the decision to “cancel” it was Apple’s. And it was the correct one.

Apple removes 39K games from its China App Store.

Apple on Thursday, Dec. 31, 2020 removed 39,000+ games from China App Store. This was the biggest removal of games in a single day, Reuters reported, citing data from Qimai.

iOS games have long been required to obtain a Chinese gaming license in order to operate in the country, but Apple skirted this rule for years by hosting unlicensed titles even as Android app stores complied. Apple began to enforce the rule in 2020 and gave publishers a Dec. 31, 2020 deadline to obtain the license — a process that can be tedious and time-consuming.

Clearly, a large number of publishers were not able to meet the deadline. Included in the new sweep were Ubisoft’s Assassin’s Creed Identity and NBA 2K20. Qimai says only only 74 of the top 1,500 paid games remained following the removals. To date, Apple purged more than 46,000 titles from the China App Store, the report said.

TikTok births a “Ratatousical”

The TikTok musical version of Ratatouille has become a real thing. The pandemic forced a lot of creative types out of work in 2020, leading them to find new ways to express themselves online. On TikTok, this collective pent-up energy turned into a large-scale collaborative event: a musical version of Disney’s Ratatouille. (Or Ratatousical, as it was nicknamed.) TikTokers composed music, wrote lyrics and dialogue, choreographed dances, designed costumes, sets and more, as they worked together through the app.

Surprisingly, Disney is allowing a charity version of this collaboration to become a real event without any interference or lawsuits. The Ratatouille musical live-streamed on Jan. 1 at 7 p.m. Eastern, and will be available via video-on-demand through Jan. 4, for a minimum $5 donation to The Actors Fund.

The musical itself was lighthearted fun for a younger, Gen Z crowd. It also cleverly incorporated actual TikTok videos that featured the app’s well-known visual effects — like cloning yourself or the flashing colored lights typically associated with TikTok’s “you think you can hurt me” meme, for example. That made it more accessible and familiar to kids who had spent the past year being entertained via the internet.

TikTok users, of course, aren’t the only ones designing, creating and editing productions through remote and collaborative processes in 2020 — Hollywood itself has had to reorient itself for remote work at a much larger scale. TikTok was simply the platform of choice for theater kids looking for something to do.

It will be interesting to see if the TikTok-based collaborative process that birthed this musical ultimately becomes a one-off event that arose from the pandemic’s impacts — including the ability for many creative people to devote time and energy on side projects, for example, due to shuttered productions and stay-at-home orders. Or perhaps in-app collaborations have a real future? Time will tell.

TikTok has already proven it can drive the music charts, fashion trends, and app downloads, so it can probably generate an audience for this production, as well. But the cynic may wonder if such an event would have been as popular and buzzworthy had it been some entirely original production, rather than one based on already popular and beloved Disney IP.  But you may as well watch — it’s not like you have any other plans these days.

Weekly News

Platforms

Gaming

  • Samsung teams up with Epic Games on Apple battle over Fortnite. Samsung and Epic Games worked together on the “Free Fortnite” marketing campaign, which recently involving sending packages to influencers that contained a Free Fortnite bomber jacket and Samsung Galaxy Tab S7. Fortnite was the Samsung Galaxy Store game of the year in 2020, and the store also distributes the Epic Games app which distributes the Fortnite updates. This is an odd move as Epic alleges the app stores leverage their power to engage in monopolistic practices, but this makes it clear that Samsung is offering them distribution. Apple has the right to set its own pricing for its services (and it recently lowered commissions for small businesses, too). But even if Epic Games is not the knight in shining armor one would hope for, its lawsuit could help set precedent. And regulators may still decide one day that Apple can’t dictate rules about how businesses operate outside its app store — meaning, they should have the right to collect their own payments, for example.

Augmented Reality

Image Credits: The New York Times

  • The New York Times gets into AR gaming. The media company has experimented with augmented reality as a way to augment storytelling both in its app and through other efforts on social media. But it has now taken AR into the world of gaming with an AR-enabled crossword puzzle where you swipe to rotate broken pieces floating above the puzzle to find clues.

Social & Photos

Telegram photo by Jakub Porzycki/NurPhoto via Getty Images

  • Telegram begins to make money. The messaging app, now nearing 500 million users, will introduce an ad platform for its public one-to-many channels that is “user-friendly” and “respects privacy.” The company says it needs to generate revenue to cover the costs of server and traffic. Telegram earlier abandoned a blockchain token project due to regulatory issues.
  • Mr. Beast announces the second annual “Finger on the App” challenge on Feb. 19. The game doles out $100,000 to whoever can keep their finger on their smartphone the longest, via an app designed for this purpose. Last year, it was a four-way tie after 70 hours, and the prize money was divided. The new app introduces in-app challenges to dissuade cheating. YouTuber Mr. Beast rose to fame for his philanthropic-based viral videos and stunts. He has made sizable donations to people in need and those impacted by the pandemic. But this year, the otherwise silly game has a darker tone as it involves competitors who will likely be in more desperate situations.
  • Bumble uproar over indoor bikini and bra photos. The dating app found itself in the middle of a small controversy this week when a woman who wanted to pose in her bra had her photos taken down. The company said its existing policy prohibits things like shirtless bathroom mirror selfies and indoor photos of people wearing swimsuits and underwear. Bumble’s policies were crafted in response to user data and feedback, but may also help to prevent adult sites from spamming with fake profiles. However, there’s still something weird about an app that markets itself as female-friendly telling a woman to go put some clothes on.
  • ByteDance filings reveal TikTok U.K. business recorded a $119.5 million loss over 2019. The losses were driven by advertising and marketing expenses, indicating the app is still very much in a growth mode.
  • TikTok launches its first personalized annual recap feature. The company “year on TikTok” in-app experience joins other personalized wrap-ups like the Top Nine for Instagram or Spotify’s Wrapped. It also introduces a floating, tappable button to connect users to the experience. This could pave way for other sorts of mini-applications in the future.
  • Clubhouse power users invited to special club. A select group of creators inside the already invite-only audio conversations app have now been given exclusive access to tools and private meetings with Clubhouse leadership and influencers. In one meeting, the creators discussed monetization strategies. The app grew to popularity amid the pandemic as people have been prevented from typical forms of networking, but it’s also struggled with moderation as conversations go off the rails. Today, Clubhouse also hosts many adult topics, as well, which would give the app a 17+ rating if it were actually submitted to the App Store instead of being in a private beta.

Streaming

  • HBO Max’s mobile app set a single-day download record following the release of “Wonder Woman 1984.” During the release weekend (Fri.-Sun.) the app saw 554K downloads, including 244K downloads on Sunday alone, reported Apptopia. The firm estimates the app now has just under 12M mobile users.

Health & Fitness

Government & Policy

Security & Privacy

Funding and M&A

Image Credits: Tappity

Downloads

Yayzy

Image Credits: Yayzy

This U.K. startup’s new app will calculate the environmental impact of what you buy using payment data via Open Banking standards. You you can use this information to adjust your spending or buy offsets in-app in order to become carbon neutral. iOS only.

Waterscope

Image Credits: Iconfactory

The popular app maker Iconfactory released a new app, Waterscope, that is a weather app more specifically designed to provide users with information on water conditions. Creator Craig Hockenberry explains the app is something he largely built for himself, an ocean swimmer often in need of information about the tides, wave heights, water temperature, wind speed, air temperature, forecasts and more. The app could be useful to those who live around the water, whether they’re swimming, fishing, boating or anything else. iOS only.

Run Boggo Run

Image Credits: BuzzFeed

This endless runner is BuzzFeed’s first mobile game, which makes it worth noting if not exactly recommending. The mental health-themed game, inspired by BuzzFeed’s animated series The Land of Boggs, was created by BuzzFeed Animation Studios. In the game, characters try to avoid things like stress monsters and gremlins, which is a humorous take on the anxieties of 2020. However, early user reviews indicate the game’s controls are too difficult and complain the game is too hard to be fun. How stressful! $0.99 on iOS and Android.

Enso

A new meditation game Enso promises to help users relax, meditate or fall asleep faster using gameplay that involves soothing visuals and sounds, composed by A.I. The app consists of 5-minute journeys where users concentrate on a task while guiding their movements and breath to achieve their goals. iOS and Android.

Portal

Image Credits: Portal

Not Facebook’s Portal! This sleep and relaxation-focused app, also called Portal, has been updated with Apple’s new privacy measures in mind. The company announced in December it will not collect user data from its app, and will now no longer use any in-app analytics tracking. The app also never required a login or collected personal information, and didn’t include third-party ads and ad trackers.

That’s resulted in an App Store rare find:

How refreshing.

The Portal app is a free download and offers a $35 per year membership for those who want access to the full content library.

Astronaut Anne McClain on designing and piloting the next generation of spacecraft

NASA recently announced the astronauts who will be taking part in the Artemis missions, and among them is Anne McClain, who has spent 203 days in orbit and conducted two spacewalks on the ISS. With the space industry looking nothing like it did 10 years ago and new spacecraft and technologies on the rise, McClain share her thoughts about how she and other astronauts would be embracing the future.

Lt. Col. McClain’s time aboard the ISS spanned from December 2018 to June of 2019, meaning her ascent and descent were both aboard Russia’s Soyuz capsules, as astronauts have gotten to and from space since the Shuttle days. The Artemis missions, however, will use a variety of new launch vehicles and spacecraft. And while she didn’t get to fly a Dragon capsule, she did get to check one out while it was docked at the station.

“I was so happy to have flown the Soyuz, because it is such a reliable, basic spacecraft — it’s almost like flying a piece of history — knowing I was going to be able to compare that to other vehicles to in the future,” she said. “I had the opportunity when I was on Space Station when DM-1 flew. And so, being able to float into that and look at their screens, their monitors, you notice right away that the technology has advanced to where it looks like the inside of a commercial airliner.”

Astronauts Doug Hurley and Bob Behnken were the first to pilot a Dragon in orbit, and said afterwards that it was “certainly different,” partly due to the reliance on touchscreens as primary interfaces for many spacecraft functions. McClain emphasized the difficulty of getting software to the point where it can be trusted with someone’s life.

“Most of the vehicles that we’re using now are very heavy on software — lots of touchscreens, not so much valves that were physically moving, it’s more like a software relay. But that adds a huge amount of complexity, because as your readers are probably well aware, approving software and the reliability of software is difficult,” she explained.

We want to understand our systems well enough to be able to interact with them in ways that maybe they’re not directly designed to do.

“We’re always looking at the question of, when should a human be in the loop, and when should it be automated? And if it’s automated, how can we prove the software has reliability sufficient for human spaceflight? At some point you have to say, ‘You know what, if this happens, we’re going to put a human in the loop,’ just so you’re not paralyzed by 10 years of software testing.”

As a pilot herself, McClain naturally has opinions on this, and like Hurley and Behnken, worked with SpaceX early on.

“I was fortunate to work with Bob and Doug, advising SpaceX early on in their cockpit controls, and I think where they got, it’s a really incredible machine,” she said, while noting that the Orion and Starliner craft received similar attentions from experts like her.

Astronauts Bob Behnken and Doug Hurley bump fists to celebrate their history-making launch on SpaceX’s Crew Dragon.

Yes, that company name has not built a spacecraft — but there are people in those halls that have built spacecraft. The talent that built the Space Shuttle and Space Station is spread out all over the commercial industry now.

Flexibility was chief among the desired aspects; If things go even a little off script, they need the tools to be flexible and not self-limiting.

“I think, pilots, we always want options, right? Whatever happens, we want options. As much as we try to predict scenarios on the ground, we’re always keenly aware that something could happen that wasn’t predicted, and at that point… we want options,” she said. “We want to understand our systems well enough to be able to interact with them in ways that maybe they’re not directly designed to do. So it’s really important for me that the software doesn’t take options off the table. That’s one of the reasons why, at NASA, they look at the Apollo 13 case, when we had to use hardware and software and the vehicle in ways that we’d never predicted.”

When I asked whether it was different or strange to work with newer companies like Blue Origin, McClain pointed out that really, the only new thing there is the name.

CG Render of what Blue Origin and Lockheed's lunar lander is expected to look like.“I’ve worked with these companies enough to know something, and that’s that yes, that company name has not built a spacecraft — but there are people in those halls that have built spacecraft. The talent that built the Space Shuttle and Space Station is spread out all over the commercial industry now, which is exactly what NASA wants to do. That is our human capital,” she explained. “The other thing I’m confident about is the way NASA partners with these companies, for test programs and design reviews, it’s extremely thorough. So by the time that rocket has me on top of it on a pad, I’m confident in in the checks and balances we have in place.”

That technology, it helps bring Earth up into the spaceship with us.

Lastly I asked about whether any conveniences of modern consumer tech had made it more bearable to spend long periods of time in space, for instance the fairly recent capability to do video calls. McClain was quick to answer in the positive.

“What you said is exactly it. Imagine if we were in this pandemic and weren’t able to video chat — we’re already feeling disconnected from our loved ones. And you know, feeling disconnected is the same whether you’re on the other side of the country or you’re in space. So the ability for us to be able to see our parents’ faces on the screen and talk to them, it really does wonders,” she said. “And it’s not just morale. You know, you start looking at six month, twelve month missions, it’s really maintaining the psyche, maintaining human mental health. So that technology, it helps bring Earth up into the spaceship with us.”

McClain is one of 18 astronauts who will take part in the missions leading up to the planned Moon landing. You can meet the rest here.

Sony to launch PlayStation 5 in India on February 2

Sony said on Friday that it will launch the PlayStation 5 in India on February 2, suggesting improvements in the supply chain network that has been severely throttled by the coronavirus pandemic.

The Japanese firm said it will begin taking pre-order requests for the new gaming console in India, the world’s second largest internet market, on January 12. The console will be available for pre-order from a number of retailers including Amazon India, Flipkart, Croma, Reliance Digital, Games the Shop, Sony Center, and Vijay Sales, the company said.

The PlayStation 5 is priced at Indian rupees 49,990 ($685), while the digital edition of the console will sell at Indian rupees 39,990 ($550). Xbox Series X is priced at $685 in India, and Xbox Series S sells at $480. Like elsewhere in the world, Microsoft has been struggling to meet the demand for the new Xbox consoles in India. The Xbox Series X is facing so much shortage in the country that it’s not even easy to locate its page on Amazon India.

The announcement today should allay concerns of loyal PlayStation fans, some of whom — including, of course, yours truly — secured a unit from the gray market at a premium in recent months after India was not included in the first wave of nations for the PS5. Fans have also been frustrated at Sony and its affiliated partners for not offering clarification or providing conflicting accounts about the probable launch of the new gaming console in recent months.

In November, Sony suggested that it had delayed the launch of the PS5 in India due to local import regulations. Game news site The Mako Reactor reported earlier this week that Sony is unlikely to offer warranty and after-sales support for PlayStation 5 accessories in India — as has been the case for several previous generations.

India is not yet a big market for full-fledged gaming consoles yet. According to industry estimates, Sony and Microsoft sold only a few hundred thousand units of their previous generation consoles in the country. Thanks to the proliferation of affordable Android smartphones and world’s cheapest mobile data tariffs, tens of millions of Indians have embraced mobile gaming in recent years.

Samsung vice chairman Jay Y. Lee faces nine-year sentence in bribery case

Samsung Electronics vice chairman Jay Y. Lee faces a nine-year prison term in the bribery case that contributed to the downfall of former president Park Guen-hye. Prosecutors argued that the length of the sentence is warranted because of Samsung’s power as the largest chaebol, or family-owned conglomerate, in South Korea.

“Samsung is a group with such overwhelming power that it is said Korean companies are divided into Samsung and non-Samsung,” they said during a final hearing on Wednesday, reports the Korea Herald. The final ruling is scheduled for January 18.

The bribery case is separate from another trial Lee is involved in, over alleged accounting fraud and stock-price manipulation. Hearings in that case began in October.

The bribery case dates back to 2017, when Lee was convicted of bribing Park and her close associate Choi Soon-sil and sentenced to five years in prison. Prosecutors allege the bribes were meant to secure government backing for Lee’s attempt to inherit control of Samsung from his father Lee Kun-hee, then its chairman. The illegal payments were a major part of the corruption scandal that led to Park’s impeachment, arrest and 25-year prison sentence.

Lee was freed in 2018 after the sentence was reduced and suspended on appeal, and returned to work as Samsung’s de facto head, a position he took after his father had a heart attack in 2014.

In August 2019, however, the Supreme Court overturned the appeals court, ruling that it was too lenient, and ordered that the case be retried in Seoul High Court.

The elder Lee, who was reportedly South Korea’s wealthiest citizen, died in October. He was worth an estimated $20.7 billion and under the country’s tax system, and his heirs could be liable for estate taxes of about $10 billion, reported Fortune.

TechCrunch has contacted Samsung for comment.

RentPath drops acquisition deal with CoStar after FTC antitrust lawsuit

RentPath, owner of property listing sites including Rent.com and Apartment Guide, said today it has cancelled its agreement to be acquired by CoStar Group after the Federal Trade Commission sued to block the sale.

CoStar, a commercial real estate data and analytics provider that also operates listing sites like Apartments.com and ApartmentFinder.com, agreed in February to buy RentPath for $588 million. The all-cash deal came after RentPath said it would file for chapter 11 bankruptcy protection. RentPath had already hired financial advisors to restructure more than $650 million in debt, reported the Wall Street Journal.

But earlier this month, the Federal Trade Commission authorized an antitrust lawsuit in federal court to block the acquisition. Daniel Francis, deputy director of the FTC’s Bureau of Competition, said in a statement that “the acquisition will eliminate price and quality competition that benefits both renters and property managers,” because CoStar and RentPath’s rivalry kept advertising rates on their platform, which include some of the most popular listing sites, low.

In its announcement today, RentPath said its chapter 11 plan remains backed by lenders, including alternative asset management firms with “strong track records of successfully investing in businesses under similar circumstances.”

The FTC’s lawsuit and RentPath’s decision to back out of the acquisition agreement comes as more countries around the world are cracking down on tech consolidation. While the United States has trailed behind other governments in terms of antitrust actions, that is gradually changing, with Amazon, Google and Facebook coming under more legislative scrutiny, and the recent lawsuit filed by 46 states against Facebook alleging that it bought competitors “illegally” to increase its market power.

The fate of the RentPath/CoStar deal may foreshadow more antitrust scrutiny for proptech companies in the United States, too. CoStar built out its business over the past decade through acquisitions and has other deals currently in the works, including listings site HomeSnap, which passed FTC review last month, and a reported bid for property analytics company CoreLogic. CoStar and RentPath competitor Zillow is also known for building its business through a series of acquisitions, including Trulia for $3.5 billion in 2014.

 

Tencent backs Chinese healthcare portal DXY in $500M round

DXY, a 20-year-old online healthcare community for Chinese consumers and healthcare organizations like Pfizer, announced this week that it has raised $500 million in its Series E round led by private equity firm Trustbridge Partners.

Existing backer Tencent and Hillhouse Capital’s early-stage focused GL Ventures also participated in the round, which lifted the firm’s total funding to over $680 million to date. DXY’s earlier investors include Xiaomi founder Lei Jun’s Shunwei Capital, Legend Capital and DCM.

The company started out as a knowledge-sharing platform for doctors and has over time added a consumer-facing aspect by bringing wellness advice and medical consultation services to the public, that is, steps that patients can take at home before having to go to the hospital.

As the pandemic took hold, hospitals and people around the world rushed to shift their activities online, spurring demand for healthcare apps. DXY responded swiftly and was among the first in China to introduce a real-time COVID-19 tracker at the beginning of the outbreak.

Today, healthcare organizations can also use DXY as an advertising channel, a learning platform as well as a recruiting site, ways for the company to generate revenue.

Since its inception, the site has attracted some 130 million consumers, more than 9,000 medical institutions, and 50,000 doctors who have provided online consultation. The platform has a current user base of 20 million and counts Eli Lilly, Pfizer, and AstraZeneca among its major clients.

DXY plans to spend its new proceeds on buttressing the two pillars of its business — support for healthcare professionals and services for consumers. It will do so by strengthening cooperation with hospitals, consumer goods enterprises and pharmaceutical companies, including jointly funding R&D in products or new consumer applications.

On the consumer front, the company faces some strong opponents in China including the likes of SoftBank-backed Ping An Good Doctor, Alibaba Health, JD Health, and WeDoctor, which is also backed by Tencent.

The article is updated on December 29, 2020 with more details on the investment.

China lays out ‘rectification’ plan for Jack Ma’s fintech empire Ant

What a whirlwind holiday for Jack Ma and his fintech empire. The People’s Bank of China, the country’s central bank, summoned Ant Group for regulatory talks on December 26th, announcing a sweeping plan for the fintech firm to “rectify” its regulatory violations.

The meeting came less than two months after China’s financial authorities abruptly halted what could have been a record-setting initial public offering of Ant over the firm’s regulatory compliance issues. The company, which started out as a payments processor for Alibaba’s online marketplaces and spun out in 2011, lacked a sound governance structure, defied regulatory requirements, illegally engaged in arbitrage, excluded competitors using its market advantage and hurt consumer rights, said the central bank.

Concurrently, Jack Ma’s e-commerce giant Alibaba is under investigation by China’s top market regulator over alleged monopolistic behavior.

The banking authority laid out a five-point compliance agenda for Ant, which is controlled by Alibaba’s billionaire founder Jack Ma. The fintech company should return to its roots in payments and bring more transparency to transactions; obtain the necessary licenses for its credit businesses and protect user data privacy; establish a financial holding company and ensure it holds sufficient capital; revamp its credit, insurance, wealth management and other financial businesses according to the law; and step up compliance for its securities business.

Following the closed-door meeting, Ant said it has established an internal “rectification workforce” to work on all the regulatory requirements.

The shakeup could take months to carry out and likely dent Ant’s valuation, which surpassed $300 billion around the time it was scheduled to go public. For instance, the government recently announced plans to raise the bar for third-party technology platforms like Ant to provide loans to consumers, a segment that made up about 35% of Ant’s annual revenue. The proposed change, which is part of Beijing’s effort to control the country’s debt risks, also sets a new requirement for online microlenders to provide at least 30% of the loan they fund jointly with banks, which could put pressure on Ant’s cash flow.

Some remain optimistic about Ant’s future. “[Ant] creates a lot of value. If you take the long view, the temporary suspension of its IPO has a limited impact on its business,” Bill Deng, founder of cross-border payments operator XTransfer and a former executive at Ant, said to TechCrunch.

“From the regulator’s standpoint, [Ant’s] lending size is getting so big that it has extended beyond the old regulatory perimeters. To some extent, it has also encroached on the core interests of traditional financial players,” he added.

The clampdown on Ant has no doubt sent a warning to the rest of the industry. In a surprising move, JD.com’s fintech unit, a challenger to Ant, appointed its former chief compliance officer to steer the fintech firm as the new chief executive officer.

Tencent also has a sprawling fintech business, but it may not receive the same level of scrutiny because the social and gaming giant is “not nearly as aggressive” as Ant in its fintech push, said a partner of Tencent’s overseas fintech business who asked not to be named.

Music made 2020 better, but we failed to make 2020 better for musicians

“Are you okay?”

I don’t have a good answer to the question. Knowing full well that I’m talking back to an algorithm — even one asking the same question of everyone with a different band mad-libbed in — doesn’t soften the blow. Am I? Are we? Is anyone, really?

In this case, it’s referring to Waxahatchee. I mean, yeah, I totally listened to a lot of Waxahatchee this year. Waxahatchee is good. Saint Cloud was one of my favorite albums of the year. Katie Crutchfield’s music doesn’t exist in the Elliott Smith, Leonard Cohen bin for me. It’s not time to send up the signal flares when you see the band all over my Spotify social feed.

The Spotify roasting AI that’s been making the rounds this week is a fun exercise in music snobbery. It also may be brushing against some larger truth here. Something I think we all considered at least in passing this year when Spotify offered its annual “Wrapped” year in review.

What’s the soundtrack to the worst year, ever? What do we listen to while the world burns? In 2009, a former CNN intern stumbled across a video tape in the archives labeled with the title, “Turner Doomsday Video.” The minute-long video features a band playing, “Nearer My God To Thee,” believed to be the final song played by the band on the Titanic. It carried the explicit instructions, “HFR [Hold for Release] till end of the world confirmed.”

Barring any sort of last-minute surprise, it seems likely we’ll make it through 2020 shy of a full-on apocalypse (in spite of, perhaps, the best efforts of some). But for me, Spotify’s year in review was a testament to hell year, just as my Apple Watch exercise bars saw a zeroing out in late-March and April, as the pandemic bore down on my home of Queens, New York and I dealt with some personal health issues.

What was pitched as a celebratory aggregation of my listening habits over the previous 12 months exited the machine as a testament to the long stretches of time where engaging with music felt like an impossibility. Ambient music and post-rock got me listening again when lyrics seemed like too much to process. And I’m sure I’m not alone in having listened to some comfort tracks with an alarming frequency.

Looking back is a useful reminder of the role music played in what undoubtedly qualifies as the worst year to date for many. It would be an overstatement to suggest that music saved my life in 2020, but it certainly cushioned the blow of one too many emotional gut punches.

“Music can lift us out of depression or move us to tears – it is a remedy, a tonic, orange juice for the ear,” the late-neurologist, Oliver Sacks wrote. “But for many of my neurological patients, music is even more – it can provide access, even when no medication can, to movement, to speech, to life. For them, music is not a luxury, but a necessity.”

Louis Armstrong put it even more succinctly: “music is life itself.”

It’s a cruel irony that, in a year when music has meant so much to so many, most musicians have struggled to make ends meet. The musical field certainly isn’t unique in that respect this year, but their struggles have been pronounced in an era when streaming revenues offer fractions of cents what musicians make in record sales, and touring has become the most important revenue stream for all but the biggest names. For the past 10 months, that all but dried up.

“The pandemic utterly decimated the live-music industry,” Wilco frontman Jeff Tweedy noted in a recent interview. “There’s been almost an entire year now of absolutely zero revenue.”

In May, a survey from the Musician’s Union noted that 19% of musicians said they might end up giving up their careers due to the impact of COVID-19. Seven months later, one wonders whether that figure might have been optimistic.

Tweedy adds, “There will be places to play. But the landscape won’t ever look the same. I imagine that a lot of the more intimate music venues will be gone, just like a lot of small businesses and restaurants.”

Bandcamp has been a beacon for many. The service’s “Bandcamp Fridays,” which waive its revenue cut, have raised $40 million to date. The site has promised to continue offering the feature at least through May of next year.

This year’s struggles have served to highlight concerns over streaming royalties. Spotify has understandably been the focal point for this conversation, all while the company has spent hundreds of millions to bolster its podcast programming. CEO Daniel Ek didn’t do himself any favors in July when he noted, “Some artists that used to do well in the past may not do well in this future landscape, where you can’t record music once every three to four years and think that’s going to be enough.”

In October, Justice at Spotify rep (and Galaxie 500 member) Damon Kurkowski told me “[R]esponse from certain corners of the industry has been as cold as we expected: ‘You’re just musicians and don’t understand business,’ is the basic gist of it. To which I would say: The problem we are calling attention to is precisely that musicians have been left out of the conversation! We always come last in payment and in consultation — even though our work is what the streaming business is built on.”

The struggle to survive on music is nothing new, of course. Jazz genius Thelonious Monk famously had a benefactor in Baroness Pannonica de Koenigswarter. But just because we’ve failed musicians in the past doesn’t mean we can’t and shouldn’t do better.

Am I okay? I’m still not sure, but listening to music seems to help.

Daily Crunch: Alibaba faces antitrust probe

Chinese authorities investigate an e-commerce giant, Google may be tightening its grip on research and VCs weigh in on the year’s biggest surprises. This is your (briefer than usual) Daily Crunch for December 24, 2020.

The big story: Alibaba faces antitrust probe

China’s State Administration for Market Regulation said that it’s investigating the e-commerce giant over a policy that forces merchants to sell exclusively with Alibaba and skip rival platforms JD.com and Pinduoduo.

“Alibaba will actively cooperate with the regulators on the investigation,” the company said in a statement. “Company business operations remain normal.”

Meanwhile, Chinese authorities have already called off the initial public offering of Alibaba affiliate Ant Group, and the company has now received another “meeting notice” from regulators.

Holiday grab bag

Google reportedly tightens grip on research into ‘sensitive topics’ — Reuters, citing researchers at the company and internal documents, reports that Google has implemented new controls in the last year, including an extra round of inspection for papers on certain topics.

Five VCs discuss what surprised them the most in 2020 — The latest episode of Equity reflects on a year that no one could have predicted.

Gift Guide: Last-minute subscriptions to keep the gifts going all year — They’re easy to order at the very last minute, easy to give from afar and they’ll spread the gifting fun out over weeks and months.

Advice and analysis from Extra Crunch

The built environment will be one of tech’s next big platforms — An in-depth look at Sidewalk Labs’ abandoned Toronto waterfront project.

US seed-stage investing flourished during pandemic — According to a TechCrunch analysis of PitchBook data and a survey of venture capitalists, a few trends became clear.

Use Git data to optimize your developers’ annual reviews — Three metrics can help you understand true performance quality.

(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

China’s e-commerce titan Alibaba hit with antitrust probe

China’s top market watchdog has begun a probe into Alibaba over alleged anti-competition practices at the e-commerce firm, the latest of Beijing’s efforts to curb the country’s ever-expanding internet titans.

The State Administration for Market Regulation said Thursday in a brief statement that it is investigating Alibaba over its “choosing one from two” policy, in which merchants are forced to sell exclusively on Alibaba and skip rivaling platforms JD.com and Pinduoduo.

“Today, Alibaba Group has received notification from the State Administration for Market Regulation that an investigation has been initiated into the Company pursuant to the Anti-Monopoly Law. Alibaba will actively cooperate with the regulators on the investigation,” Alibaba said in a statement.

“Company business operations remain normal.”

On the same day, state-backed Xinhua reported that Ant Group, Alibaba’s affiliate, has been summoned by a group of finance authorities to discuss its “compliance” work. Ant, which works as an intermediary for financial services and customers, has pledged to take measures to curb debt risks after Chinese authorities abruptly called off its colossal initial public offering last month.

“Today, Ant Group received a meeting notice from regulators. We will seriously study and strictly comply with all regulatory requirements and commit full efforts to fulfill all related work,” the firm said in a statement.

On-demand logistics company Lalamove gets $515 million Series E

Lalamove will extend its network to cover more small Chinese cities after raising $515 million in Series E funding, the on-demand logistics company announced on its site. The round was led by Sequoia Capital China, with participation from Hillhouse Capital and Shunwei Capital. All three are returning investors.

According to Crunchbase data, this brings Lalamove’s total raised so far to about $976.5 million. The company’s last funding announcement was in February 2019, when it hit unicorn status with a Series D of $300 million.

Bloomberg reported last week that Lalamove was seeking at least $500 million in new funding at $8 billion valuation, or four times what it raised at least year.

Founded in 2013 for on-demand deliveries within the same city, Lalamove has since grown its business to include freight services, enterprise logistics, moving and vehicle rental. In addition to 352 cities in mainland China, Lalamove also operates in Hong Kong (where it launched), Taiwan, Vietnam, Indonesia, Malaysia, Singapore, the Philippines and Thailand. The company entered the United States for the first time in October, and currently claims about 480,000 monthly active drivers and 7.2 million monthly active users.

Part of its Series D had been earmarked to expand into India, but Lalamove was among 43 apps that were banned by the government, citing cybersecurity concerns.

In its announcement, Lalamove CEO Shing Chow said its Series E will be used to enter more fourth- and fifth-tier Chinese cities, adding “we believe the mobile internet’s transformation of China’s logistics industry is far from over.”

Other companies that have recently raised significant funding rounds for their logistics operations in China include Manbang and YTO.

Lalamove’s (known in Chinese as Huolala) Series E announcement said the company experienced a 93% drop in shipment volume at the beginning of the year, due to the COVID-19 pandemic, but has experienced a strong rebound, with order volume up 82% year-over-year even before Double 11.

Horizon Robotics, a Chinese rival to Nvidia, seeks to raise over $700M

In their rush to offer alternatives to advanced western chipsets, Chinese semiconductor companies are racking up large fundings from investors. Horizon Robotics, a five-year-old unicorn specializing in AI chips for robots and autonomous vehicles, announced Tuesday that it has secured $150 million in funding.

The proceeds are the first close of an over $700 million Series C round that Horizon is seeking to raise. The partial funding is jointly led by prominent investors 5Y Capital (formerly Morningside Venture Capital), Hillhouse Capital, and Capital Today. Chinese brokerage Guotai Junan’s international arm and South Korean conglomerate KTB.

The round arrived less than two years after Horizon completed its $600 million Series B round, which valued the firm at $3 billion post-money and also saw the participation of prominent Korean financiers including SK China, the China subsidiary of conglomerate SK Group, and SK Hynix, SK’s semiconductor unit.

The startup, founded by a Baidu veteran, raised its Series A round of over $100 million led by Intel Capital in late 2017.

 

With the fresh capital, Horizon plans to hasten the development and commercialization of its automotive chips and autonomous driving solutions. It also aims to build an “open ecosystem” for industry partners.

For the past couple of years, China has been striving to wean dependence on western chip giants in sectors ranging from smartphones to vehicles. Local startups like Horizon Robotics and Black Sesame Technologies, as well as telecoms titan Huawei, are pouring resources into autonomous driving processors, hoping to match or overtake the technologies from Nvidia and Intel’s Mobileye.

Horizon’s OEM and Tier 1 auto partners, according to the firm, include Audi, Bosch, Continental, SAIC Motor and BYD.

75% of China’s ADAS (advanced driver-assistance system)-equipped cars and Level 3 (autonomous driving under certain circumstances) vehicles will be supported by Chinese suppliers by 2030, up from 20% in 2019, investment bank CITIC Securities projects.

Indian court rejects retail giant Future Group’s plea against Amazon

An Indian court rejected Future Group’s plea that sought to prevent its partner Amazon from interfering in — and blocking — the Indian retail giant’s $3.4 billion asset sale deal to Mukesh Ambani’s Reliance Industries, delivering a glimmer of hope to the American e-commerce firm that has invested more than $6.5 billion in the world’s second largest internet market.

Future Group was seeking an ad-interim injunction to restrain its partner Amazon from writing to regulators and other authorities to raise concerns over — and halt — the deal between the two Indian giants. The Delhi High Court ruled on Monday that Amazon cannot be barred from writing to regulators and authorities on account of “potentially irreparable damage.” The regulators will decide whether the deal should be approved in accordance with the law, the court said.

The court, however, also observed that the lawsuit filed by Future Retail, a unit of Future Group, was maintainable and its attempt to seek approval of the transaction with Reliance Industries was also valid.

The ruling is the latest episode in the high-stake battle between estranged partners Amazon and Future Group. Amazon bought 49% in one of Future’s unlisted firms last year in a deal that was valued at over $100 million. As part of that deal, Future could not have sold assets to rivals, Amazon said in court filings.

Things changed this year after the coronavirus pandemic starved the Indian firm of cash, Future Group chief executive and founder Kishore Biyani said at a recent virtual conference. In August, Future Group said that it had reached an agreement with Ambani’s Reliance Industries, which runs India’s largest retail chain, to sell its retail, wholesale, logistics, and warehousing businesses for $3.4 billion.

Months later, Amazon protested the deal by reaching an arbitrator in Singapore and asked the court to block the deal between the Indian retail giants. Amazon secured emergency relief from the arbitration court in Singapore in late October that temporarily halted Future Group from going ahead with the sale.

Until Monday, it remained unclear whether that ruling would hold any water in front of Indian courts. So much so that hours after the Singapore arbitration court announced its verdict, Future Group and Reliance said in a statement that will be going ahead with the deal “without any delay.”

Amazon had also reached out to the Competition Commission of India, the Indian watchdog, to block the deal. Competition Commission of India, however, approved the deal between the Indian firms. In earlier hearings, lawyers for Future Group likened Amazon’s effort to block Future Group’s deal to the East India Company, the British trading house whose arrival in India kicked off nearly 200 years of colonial rule.

At stake is India’s retail market that is estimated to balloon to $1.3 trillion by 2025, up from $700 billion last year, according to consultancy firm BCG and local trade group Retailers’ Association India. Online shopping accounts for about 3% of all retail in India.

Future Group and Amazon did not immediately respond to a request for comment.

Mixtape podcast: Artificial intelligence and disability



Welcome back to Mixtape, the TechCrunch podcast that looks at the human element that powers technology.

For this episode we spoke with Meredith Whittaker, co-founder of the AI Now Institute and Minderoo Research Professor at NYU; Mara Mills, associate professor of Media, Culture and Communication at NYU and co-director of the NYU Center for Disability Studies; and Sara Hendren, professor at Olin College of Engineering and author of the recently published What Can a Body Do: How We Meet the Built World.
It was a wide-ranging discussion about artificial intelligence and disability. Hendren kicked us off by exploring the distinction between the medical and social models of disability:

So in a medical model of disability, as articulated in disability studies, the idea is just that disability is a kind of condition or an impairment or something that’s going on with your body that takes it out of the normative average state of the body says something in your sensory makeup or mobility or whatever is impaired, and therefore, the disability kind of lives on the body itself. But in a social model of disability, it’s just an invitation to widen the aperture a little bit and include, not just the body itself and what it what it does or doesn’t do biologically. But also the interaction between that body and the normative shapes of the world.

When it comes to technology, Mills says, some companies work squarely in the realm of the medical model with the goal being a total cure rather than just accommodation, while other companies or technologies – and even inventors – will work more in the social model with the goal of transforming the world and create an accommodation. But despite this, she says, they still tend to have “fundamentally normative or mainstream ideas of function and participation rather than disability forward ideas.”

“The question with AI, and also just with old mechanical things like Brailers I would say, would be are we aiming to perceive the world in different ways, in blind ways, in minoritarian ways? Or is the goal of the technology, even if it’s about making a social, infrastructural change still about something standard or normative or seemingly typical? And that’s — there are very few technologies, probably for financial reasons, that are really going for the disability forward design.”

As Whittaker notes, AI by its nature is fundamentally normative.

“It draws conclusions from large sets of data, and that’s the world it sees, right? And it looks at what’s most average in this data and what’s an outlier. So it’s something that is consistently replicating these norms, right? If it’s trained on the data, and then it gets an impression from the world that doesn’t match the data it’s already seen, that impression is going to be an outlier. It won’t recognize that it won’t know how to treat that. Right. And there are a lot of complexities here. But I think, I think that’s something we have to keep in mind as sort of a nucleus of this technology, when we talk about its potential applications in and out of these sorts of capitalist incentives, like what is it capable of doing? What does it do? What does it act like? And can we think about it, you know, ever possibly in company encompassing the multifarious, you know, huge amounts of ways that disability manifests or doesn’t manifest.”

We talked about this and much much more on the latest episode of Mixtape, so you click play above and dig right in. And then subscribe wherever you listen to podcasts.

 

 

 

FDA authorizes Moderna’s COVID-19 vaccine for emergency use

The U.S. Food and Drug Administration (FDA) has issued an Emergency Use Authorization (EUA) for Moderna’s COVID-19 vaccine, as expected after an independent panel commissioned by the administration recommended its approval earlier this week. This is the second vaccine now authorized for use in the U.S. under EUA, after the Pfizer -BioNTech vaccine was approved last week.

Moderna’s vaccine could begin being administered to Americans by “Monday or Tuesday” next week, according to Dr. Anthony Fauci speaking to NBC’s Today show in a new interview. That’s in keeping with the timelines between the Pfizer EUA and the first patients actually receiving the vaccine last week.

Like Pfizer’s vaccine, Moderna’s is an mRNA therapy. That means that it contains no actual virus — just genetic instructions that tell a person’s body to create a specific protein. That protein is more or less identical to the one that SARS-CoV-2, the virus which causes COVID-19, uses to attach to a host’s cells and replicate. Moderna’s vaccine causes a person to create just the protein, which on its own is harmless, and then their natural defenses via their immune system react to that and develop a method for fighting it off. That defense system is “remembered” by the body, while the vaccine itself naturally dissolves after a brief time, leaving a person with immunity but nothing else.

The Oxford-AstraZeneca vaccine, which has yet to be approved for use in the U.S., uses a weakened and modified common cold virus that doesn’t spread in humans to create the spike protein in recipients, resulting in the body generating its own immune response. That’s a much more tried-and-tested method for creating a vaccine, but both Moderna and Pfizer’s mRNA therapies have shown to be very effective in preliminary data from their large Phase 3 clinical trials.

Alibaba ‘dismayed’ by its cloud unit’s ethnicity detection algorithm

Chinese tech giants have drawn international criticism after research showed they have technologies that enable the authorities to profile Muslim Uyghurs.

The cloud computing unit of Alibaba, Alibaba Cloud, developed a facial recognition algorithm that can identify a person’s ethnicity or whether a person is “Uyghur”, according to research from surveillance industry publication IPVM.

China has repeatedly defended its controversial “vocational training programs” imposed upon its Muslim ethnic minorities, including Uyghurs, Kazakhs and others, as part of what the government calls counter-terrorism efforts.

Alibaba said in a statement that it is “dismayed” to learn that Alibaba Cloud tested a technology that included “ethnicity as an algorithm” and that “racial or ethnic discrimination or profiling in any form violates Alibaba’s policies and values.”

“We never intended our technology to be used for and will not permit it to be used for targeting specific ethnic groups, and we have eliminated any ethnic tag in our product offering. This trial technology was not deployed by any customer. We do not and will not permit our technology to be used to target or identify specific ethnic groups,” the company added.

A security breach from last year revealed that a “smart city” surveillance system hosted on Alibaba Cloud could detect people’s ethnicity or label them Uyghur Muslim, TechCrunch reported earlier. At the time, Alibaba said as a public cloud provider, it “does not have the right to access the content in the customer database.”

IPVM also found earlier this month that Huawei and artificial intelligence unicorn Megvii, known for its facial recognition product Face++, jointly developed a technology that could alert the Chinese government when the system detected the face of a member from the Uyghur community.

As China’s tech upstarts seek overseas growth, they increasingly find themselves stuck between the demands of Beijing and international scrutiny over their stance on human rights issues.

Cloud computing is one of Alibaba’s fastest-growing segments and the giant is eyeing to attract more international customers. Last year, Alibaba Cloud was the biggest player in the Asia Pacific region and the third-largest Infrastructure as a Service (IaaS) provider globally, according to research firm Gartner.

Alibaba’s cloud unit grew 60% year-over-year to account for nearly 10% of the firm’s revenues in the three months ended September. As of the quarter, approximately 60% of A-share listed companies, those that are based in mainland China and trade in RMB, are customers of Alibaba Cloud, the company claimed.

Google expands languages push in India to serve non-English speakers

There are over 600 million internet users in India, but only a fraction of this population is fluent in English. Most online services and much of the content on the web currently, however, are available exclusively in English.

This language barrier continues to contribute to a digital divide in the world’s second largest internet market that has limited hundreds of millions of users’ rendition of the world wide web to a select few websites and services.

So it comes as no surprise that American tech giants, which are counting on emerging markets such as India to continue their growth. are increasingly attempting to make the web and their services accessible to more people.

Google, which has so far led this effort, on Thursday announced a range of changes it is rolling out across some of its services to make them speak more local languages and unveiled a whole new approach it’s taking to translate languages.

Additionally, Google said it plans to invest in machine learning and AI efforts at Google’s research center in India and make its AI models accessible to everyone across the ecosystem. The company — which counts India as its biggest market by users, and this year committed to invest more than $10 billion in the country over the coming years — also plans to partner with local startups that are serving users in local languages, and “drastically” improve the experience of Google products and services for Indian language users.

Product changes

Users will now be able to see search results to their queries in Tamil, Telugu, Bangla, and Marathi, in addition to English and Hindi that are currently available. The addition comes four years after Google added the Hindi tab to the search page in India. The company said the volume of search queries in Hindi grew more than 10 times after the introduction of this tab. If someone prefers to see their query in Tamil, for instance, now they will be able to set Tamil tab next to English and quickly toggle between the two.

Getting search results in a local language is helpful, but often people want to make their queries in those languages as well. Google says it has found that typing in non-English language is another challenge users face today. “As a result, many users search in English even if they really would prefer to see results in a local language they understand,” the company said.

To address this challenge, Search will start to show relevant content in supported Indian languages where appropriate even if the local language query is typed in English. The feature, which the company plans to roll out over the next month, supports five Indian languages: Hindi, Bangla, Marathi, Tamil, and Telugu.

Google is also making it easier for users to quickly change the preferred language in which they see results in an app without altering the device’s language settings. The feature, which is currently available in Discover and Google Assistant, will now roll out in Maps. Similarly, Google Lens’s Homework feature, which allows users to take a picture of a math or science problem and then delivers its answer, now supports Hindi language.

MuRIL

Google executives also detailed a new language AI model, which they are calling Multilingual Representations for Indian Languages (MuRIL), that delivers more efficiency and accuracy in handling transliteration, spelling variations and mixed languages. MuRIL provides support for transliterated text such as when writing Hindi using Roman script, which was something missing from previous models of its kind, said Partha Talukdar, Research Scientist at Google Research India, at a virtual event Thursday.

The company said it trained the new model with articles on Wikipedia and texts from a dataset called Common Crawl. It also trained it on transliterated text from, among other sources, Wikipedia (fed through Google’s existing neural machine translation models). The result is that MuRIL handles Indian languages better than previous, more general language models and can contend with letters and words that have been transliterated — that is, Google is using the closest corresponding letters of a different alphabet or script.

Additionally, the new model allows Google to “transfer knowledge and training from one language to another,” said Talukdar, who noted that the previous model Google relied on proved unscalable. MuRIL significantly outperforms the earlier model — by 10% on native text and 27% on transliterated text. MuRIL, which was developed by executives in India, is open source.

MuRIL supports 16 Indian languages and English.

One of the many tasks MuRIL is good at, is determining the sentiment of the sentence. For example, “Achha hua account bandh nahi hua” would previously be interpreted as having a negative meaning, but MuRIL correctly identifies this as a positive statement. Or take the ability to classify a person versus a place: ‘Shirdi ke sai baba’ would previously be interpreted as a place, which is wrong, but MuRIL correctly interprets it as a person.

More to follow…

This VC introduced Palantir’s first business hire to its earliest engineer, then his business took off

You might not know yet of XYZ Venture Capital, a four-year-old, San Francisco-based seed-stage venture firm, but many veterans of Palantir are surely aware of it. XYZ says it has already backed 22 startups whose founders came out of the data analysis company, including most notably, Anduril, Lucky Palmer’s defense tech startup. In fact, the founder of XYZ, Ross Fubini, says his firm wrote Anduril its first check.

It all dates back to a key introduction. Fubini is a Carnegie Mellon grad who cofounded an enterprise company, CubeTree, that a dozen years later, sold to SuccessFactors, which was itself acquired by SAP the next year, in 2011.

Then, like a lot of founders, he started writing checks.

First, Fubini linked up with Mitch Kapor, another software mogul turned investor and a friend of Fubini who bought him into his venture firm and taught him the ropes. During his one year spent with the outfit, Fubini says, he wrote seed checks into the digital care company Omada Health, the optimization platform Optimizely (acquired this fall), and LendUp, the payday loan company that was split into two businesses back in 2018.

From Kapor Capital, it was onto Canaan Partners as a venture partner and, just three years later, to Village Global, the early-stage venture firm that was founded in 2017 with the backing of prominent founders like Bill Gates and Reid Hoffman. (Fubini helped cofound the outfit with a handful of others.) At the same time, Fubini began raising his own pool of capital under the brand XYZ Ventures, eventually launching a $70 million fund.

Now he’s turning the enterprise into a bigger organization.

For starters, this year, XYZ closed its second fund with $80 million in capital commitments from what Fubini says is predominately institutional investors, and it has been investing actively. Fubini says the firm has already written checks to 30 different startups that range in size from $500,000 to $4 million in exchange for 12% to 20% ownership.

He also brought aboard a partner: Chauncey Kerr Hamilton, who spent more than five years as a partner operations manager with First Round and was looking for a new challenge when a mutual friend introduced her to Fubini. “I kept hearing about Ross from founders and other investors and we met for coffee, then we kept meeting week after week,” she says of their earlier conversations.

Hamilton says she realized over time that “we’re kindred spirits.” But she has also pushed Fubini to be more public for the sake of XYZ’s portfolio companies.

As a former projects editor at Wired before leaping into venture capital, she half-kiddingly refers to the “mystique” of XYZ Ventures, but she also wondered if it might be easier for founders to discuss their lead investor if they could point to more than Fubini’s LinkedIn page.

Certainly, it makes sense as XYZ widens its aperture beyond Palantir, which was itself long known for keeping a low profile and where Fubini’s relationship began when he introduced Palantir’s first business hire to its first engineer. The first, a personal friend, is today Palantir’s chief operating officer, Shyam Sankar; the second, Akash (“Aki”) Jain, a former colleague of Fubini, is now the company’s president.

“It’s the highest value thing I’ve done,” Fubini says of bringing the two together, which led to an early and lasting advisor role at the company, where he helped develop senior talent and work through challenges (and received advisor shares in return).

Indeed, he has since become a first call for some who spin out of the company. In addition to Anduril —  cofounded by former Palantir execs Matt Grimm, Trae Stephens, and Brian Schimpf — XYZ has more recently backed the the San Diego-based financial planning platform Mosaic (cofounder Bijan Moallemi, a former finance exec at Palantir).

It also wrote the first check for Saltbox, an Atlanta-based startup that’s building co-working units for founders needing warehouse space. Saltbox’s founder, Tyler Scriven, previously spent more than seven years as a chief of staff at Palantir.

Fubini and Hamilton stress that while a meaningful portion of XYZ’s capital has flowed into the “Palantir diaspora,” the company has other areas of interest, too, mostly enterprise related.

XYZ is very focused, for example, on fintech, betting on Bond Technologies, a company that helps brands and banks integrate their offerings. It has insure-tech investments, like the brokerage Newfront Insurance. And it is focused on security and counts among its portfolio companies, a now highly valued outfit that poorly handled a sexual harassment situation but seems to have survived it.

XYZ even made a direct-to-consumer bet recently, though Fubini and Hamilton aren’t talking about it just yet.

Mostly, they say, they’re focused on “trends we believe are exploding,” says Hamilton. Think video, she says. Think fintech infrastructure, she adds. “For fintech that’s building a new bank, we think three companies will replace the crappy software” that supports them, says Fubini.

As for how they wins deals against VCs when it comes to founders to whom they aren’t already connected in some way, Fubini says it’s not so complicated. Being “bizarrely honest” has proved helpful, he says. But also, he says, “If you’re good, and you work goddamn hard, you start seeing more stuff.”

Reddit acquires Dubsmash

Reddit announced that it has acquired short video platform Dubsmash. The deal’s terms were undisclosed. Dubsmash will retain its own platform and brand, and Reddit will integrate its video creation tools. Its co-founders, Suchit Dash, Jonas Drüppel and Tim Specht, will join Reddit.

According to Crunchbase data, the app has raised $20.2 million from investors including Lowercase Capital, Index Ventures, Eniac Ventures, Heartcore Capital and Sunstone Life.

Dubsmash is now one of TikTok’s biggest rivals, but struggled for several years after a brief stint of popularity in 2015 during its first incarnation as a lip-sync video app. In 2017 it began transforming itself into a social platform and moved its headquarters from Berlin to Brooklyn. By the beginning of this year, Dubsmash’s share of the United States’ short-form video market was second only to TikTok when counted by app installs, and it reportedly held acquisition talks with Facebook and Snap.

Credit for much of Dubsmash’s success goes to Black and Latinx users. While many of TikTok’s highest-profile stars are white, Dubsmash is known for its large communities of Black and Latinx content creators. The polarization between the two apps began to gain more attention earlier this year, when the New York Times published a piece about how dance moves by Black Dubsmash stars are frequently appropriated without credit by TikTok influencers, which means their creators miss out on opportunities like larger followings, brand deals and industry connections.

Reddit has its own issues with racism, and has been criticized for not doing enough to stop hate speech or giving moderators of subreddits targeted by racist trolls enough support.

Last year, founder and former chief executive officer Alexis Ohanian called for his position on Reddit’s board to be filled with a Black candidate when he stepped down, which current CEO Steve Huffman said the company would honor as part of a larger effort to address hate speech on the platform announced during anti-racism demonstrations after the killing of George Floyd by a police officer. Ohanian’s position was filled by Y Combinator CEO Michael Seibel.

In its announcement today, Reddit linked its acquisition of Dubsmash to its inclusion efforts, acknowledging that the app’s “communities are driven by young, diverse creators—about 25 percent of all Black teens in the U.S. are on Dubsmash, and females represent 70 percent of users.”

It also said the integration of Dubsmash’s video creation tools will enable Reddit’s users to “express themselves in original and authentic ways that are endemic to our communities.”

Since launching native videos in 2017, Reddit said usage has increased sharply, growing 2X in 2020 alone. Much of Reddit’s content is still text-based, however, with video, gifs and images often shared from other sources, so Dubsmash’s integration can help Reddit build out its own video platform.

Gillmor Gang: Strange Days Indeed

The place we’re in, the valley of the dolls between the vote and the Inauguration, is overshadowed by the battle to save our lives. The vaccines look promising, and so does the persistence of the Trumpster to play his games. Somehow we have to live with that, on both sides. In the business we’re in, the technology industry, broadband has penetrated to the point we can survive with a reasonable degree of fidelity to the world COVID erased.

This week’s move by WarnerMedia to release all 2021 pictures on HBO Max and in theaters is both a capitulation to reality and a political gambit to negotiate with theater owners. Disney, with their theme parks and investments in streaming crescendoing in layoffs and rebuilding, announced a mix of 80% streaming with only 20% theatrical. Trump’s TikTok deadline has already passed, and the administration is pretending to not pay attention in order to keep negotiations for a buyout alive. The incoming government talks of a working bromance between Biden and McConnell. It’s the opposite of reality TV, or TV reality.

Newsletters straddle mainstream and social media, rolling up links that blur the credibility of publications with the Wild West of uncredentialed freelancers. Some of these voices are playing the newsletter sweepstakes, choosing to move from a salaried position to their own subscription model. For those publications funded in part by a paywall, the transition to a newsletter comes with opportunity and risk. Selling a subscription for a single voice competes with the bundled voices of a paywall publication eventually diluting potential readers’ available funds. We’re seeing this same subscription saturation dynamic in the rise of streaming networks.

Another trend, notification-based news, is making inroads with live streaming over social networks. The pandemic has forced many students into working from home over Zoom for interactive sessions mixed with traditional lecture-type webinars. Events normally covered by trade publications have yielded at least for now to influencer and analyst driven watch parties. Podcasts forego subscription and advertiser revenue for lead generation and industry traction. The 24/7 nature of work from anywhere fights for eyelid time with binge viewing, listening, and reading.

Beyond the virus’s impact on audiences, the productions themselves have new challenges. The FX series Fargo ceased production in March, as did ABC’s Grey’s Anatomy. When you see the completed shows, it’s fascinating to try and guess which scenes were shot under the much tighter strictures of the fall. Grey’s Anatomy used the pandemic as a plot point, but it took a few shows for the actors to settle into a more relaxed rhythm. Pre-pandemic footage from the abbreviated series’ previous season lived uncomfortably alongside the new material to cover the transitional story line.

Citizen Kane, considered broadly as the best film Hollywood ever made, spawned a Netflix production about the author of the screenplay, one Herman J. Mankiewicz. Presented in black and white with Kane-like musical scoring and the original film’s innovations in deep focus photography and low angle shots that include the ceilings of sets, the story uses flashbacks and time-jumping to great effect. It’s streaming meets MGM’s catch phrase from the time: All the stars in the heavens. Director David Fincher tells the New York Times how he overshoots by 20% the number of pixels so he can post process and polish the rough edges and camera jiggles into a precise reflection of the intricate vision of his cinema universe.

40 years ago this week John Lennon was murdered by a troubled fan. I was watching Monday Night football when Howard Cosell broke in with the news. What was left of my childhood vanished in that moment. I was newly divorced, struggling to keep my momentum going, no idea of what our world would become, and stupid with sadness over someone I’d never met. The Beatles was this magic machine, a coalition of the fleeting imperfection of the group and the unifying perfection of what they had accomplished.

The days tick by. The vaccine trucks roll. The Supreme Court denies another desperate move to overturn the will of the people. Nobody told me there’d be days like these. Strange days indeed.

__________________

The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary, and Steve Gillmor . Recorded live Friday, December 4, 2020.

Produced and directed by Tina Chase Gillmor @tinagillmor

@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang

For more, subscribe to the Gillmor Gang Newsletter and join the backchannel here on Telegram.

The Gillmor Gang on Facebook … and here’s our sister show G3 on Facebook.

FDA grants emergency use authorization for Pfizer’s COVID-19 vaccine, distribution to begin within days

The U.S. Food and Drug Administration (FDA) has granted an Emergency Use Authorization (EUA) for the COVID-19 vaccine developed by Pfizer and its partner BioNTech, the New York Times first reported on Friday night, and later supported by The Wall Street Journal. This EUA follows a recommendation by an independent panel of experts commissioned by the FDA to review Pfizer’s application and provide a recommendation, which the panel unanimously supported earlier this week.

Following this authorization, shipment of the vaccine are expected to begin immediately, with 2.9 million doses in the initial shipment order. Patients in the category of highly vulnerable individuals, which include healthcare workers and senior citizens in long-term care facilities, are expected to begin receiving doses within just a few days not was the EUA is granted.

This approval isn’t a full certification by the U.S. therapeutics regulator, but it is an emergency measure that still requires a comprehensive review of the available information supplied by Pfizer based on its Phase 3 clinical trial, which covered a group of 44,000 volunteer participants. Pfizer found that its vaccine, which is an mRNA-based treatment, was 95% effective in its final analysis of the data resulting form the trial to date – and also found that safety data indicated no significant safety issues in patients who received the vaccine.

On top of the initial 2.9 million dose order, the U.S. intends to distribute around 25 million doses by the end of 2020, which could result in far fewer people actually vaccinated since the Pfizer course requires two innoculations for maximum efficacy. Most American shouldn’t expect the vaccine to be available until at least late Q1 or Q2 2021, given the pace of Pfizer’s production and the U.S. order volume.

Still, this is a promising first step, and a monumental achievement in terms of vaccine development turnaround time, since it’s been roughly eight months since work began on the Pfizer vaccine candidate. Moderna has also submitted an EUA for its vaccine candidate, which is also an mRNA treatment (which provides instructions to a person’s cells to produce effective countermeasures to the virus). That could follow shortly, meaning two vaccines might be available under EUA within the U.S. before the end of the year.

Massachusetts governor won’t sign police reform bill with facial recognition ban

Massachusetts Governor Charlie Baker has returned a police reform bill back to the state legislature, asking lawmakers to strike out several provisions — including one for a statewide ban on police and public authorities using facial recognition technology, the first of its kind in the United States.

The bill, which also banned police from using rubber bullets and tear gas, was passed on December 1 by both the state’s House and Senate after senior lawmakers overcame months of deadlock to reach a consensus. Lawmakers brought the bill to the state legislature in the wake of the killing of George Floyd, an unarmed Black man who was killed by a white Minneapolis police officer, later charged with his murder.

Baker said in a letter to lawmakers that he objected to the ban, saying the use of facial recognition helped to convict several criminals, including a child sex offender and a double murderer.

In an interview with The Boston Globe, Baker said that he’s “not going to sign something that is going to ban facial recognition.”

Under the bill, police and public agencies across the state would be prohibited from using facial recognition, with a single exception to run facial recognition searches against the state’s driver license database with a warrant. The state would be required to publish annual transparency figures on the number of searches made by officers going forward.

The Massachusetts House voted to pass by 92-67, and the Senate voted 28-12 — neither of which were veto-proof majorities.

The Boston Globe said that Baker did not outright say he would veto the bill. After the legislature hands a revised (or the same) version of the bill back to the governor, it’s up to Baker to sign it, veto it or — under Massachusetts law, he could allow it to become law without his signature by waiting 10 days.

“Unchecked police use of surveillance technology also harms everyone’s rights to anonymity, privacy, and free speech. We urge the legislature to reject Governor Baker’s amendment and to ensure passage of commonsense regulations of government use of face surveillance,” said Carol Rose, executive director of the ACLU of Massachusetts.

A spokesperson for Baker’s office did not immediately return a request for comment.

Seoul-based payment tech startup CHAI gets $60 million from Hanhwa, SoftBank Ventures Asia

Demand for contactless payments and e-commerce has grown in South Korea during the COVID-19 pandemic. This is good news for payment service operators, but the market is very fragmented, so adding payment options is a time-consuming process for many merchants. CHAI wants to fix this with an API that enables companies to accept over 20 payment systems. The Seoul-based startup announced today it has raised a $60 million Series B.

The round was led by Hanhwa Investment & Securities, with participation from SoftBank Ventures Asia (the early-stage venture capital arm of SoftBank Group), SK Networks, Aarden Partners and other strategic partners. It brings CHAI’s total funding to $75 million, including a $15 million Series A in February.

Last month, the Bank of Korea, South Korea’s central bank, released a report showing that contactless payments increased 17% year-over-year since the start of COVID-19.

CHAI serves e-commerce companies with an API called I’mport, that allows them to accept payments from over 20 options, including debit and credit cards through local payment gateways, digital wallets, wire transfers, carrier billings and PayPal. It is now used by 2,200 merchants, including Nike Korea and Philip Morris Korea.

CHAI chief executive officer Daniel Shin told TechCrunch that businesses would usually have to integrate each kind of online payment type separately, so I’mport saves its clients a lot of time.

The company also offers its own digital wallet and debit card called the CHAI Card, which launched in June 2019 and now has 2.5 million users, a small number compared with South Korea’s leading digital wallets, which include Samsung Pay, Naver Pay, Kakao Pay and Toss.

“CHAI is a late comer to Korea’s digital payments market, but we saw a unique opportunity to offer value,” said Shin. The CHAI Card offers merchants a lower transaction fee than other cards and users typically check its app about 20 times to see new cashback offers and other rewards based on how often they pay with their cards or digital wallet.

“We’ve digitized the plastic card experience, and this is the first step towards creating a robust online rewards platform,” Shin added.

In press statement, Hanhwa Investment & Securities director SeungYoung Oh director said, “I’mport has reduced what once took e-commerce businesses weeks to complete into a simple copy-and-paste task, radically reducing costs. It is a first-of-its-kind business model in Korea, and I have no doubt that CHAI will continue to grow this service into an essential infrastructure of the global fintech landscape.”

TripAdvisor shares drop following China app ban

The Cyberspace Administration of China (CAC) announced it has banned 105 mobile apps for violating Chinese internet regulations. While almost all of the apps are made by Chinese developers, American travel booking and review site TripAdvisor is also on the list.

TripAdvisor shares dipped on Nasdaq after the CAC’s announcement, but began recovering in after-hours trading.

While TripAdvisor is based in the United States, like other foreign tech companies, it struck a partnership with a local tech company for its Chinese operations. In TripAdvisor’s case, it entered into an agreement with Trip.com — the Nasdaq-listed Chinese travel titan formerly known as Ctrip — in November 2019 to operate a joint venture called TripAdvisor China. The deal made Trip.com subsidiary Ctrip Investment a majority shareholder in the JV, with TripAdvisor owning 40%.

As part of the deal, TripAdvisor agreed to share content with Trip.com brands, including Chinese travel platforms Ctrip and Qunar, which gained access to the American firm’s abundant overseas travel reviews. That put TripAdvisor in a race with regional players, including Alibaba-backed Qyer and Hong Kong-based Klook, to capture China’s increasingly affluent and savvy outbound tourists.

The CAC is the government agency in charge of overseeing internet regulations and censorship. In a brief statement, the bureau said it began taking action on November 5 to “clean up” China’s internet by removing apps that broke regulations. The 105 apps constituted the first group to be banned, and were targeted after users reported illegal activity or content, the agency said.

Though the CAC did not specify exactly what each app was banned for, the list of illegal activities included spreading pornography, incitements to violence or terrorism, fraud or gambling and prostitution.

In addition, eight app stores were taken down for not complying with review regulations or allowing the download of illegal content.

Such “app cleansing” takes place periodically in China where the government has a stranglehold on information flows. Internet services in China, especially those involving user-generated content, normally rely on armies of censors or filtering software to ensure their content is in line with government guidelines.

The Chinese internet is evolving so rapidly that regulations sometimes fall behind the development of industry players, so the authorities are constantly closing gaps. Apps and services could be pulled because regulators realize they are lacking essential government permits, or they might have published illegal or politically sensitive information.

Foreign tech firms operating in China often find themselves walking a fine line between the “internet freedom” celebrated in the West and adherence to Beijing’s requirements. The likes of Bing.com, LinkedIn, and Apple — the few remaining Western tech giants in China — have all drawn criticism for caving to China’s censorship pressure in the past.

Lemonade launches its renters insurance in France

Lemonade is launching its renters insurance in France. This is the company’s third European launch after the Netherlands and Germany. Originally from the U.S., Lemonade is now a public company with a current market capitalization close to $4 billion.

Lemonade will compete directly with a local competitor called Luko. Both companies share a lot of similarities. But Luko has already attracted 100,000 customers and just raised $60 million.

https://techcrunch.com/2020/12/06/luko-raises-60-million-for-its-home-insurance-products/

Lemonade has optimized its insurance product in different ways. First, it’s supposed to be easier to sign up with Lemonade compared with a legacy insurance company. Second, the company wants to bring back trust by taking a flat fee for its operations.

Premiums are then pooled together and used to pay back claims. If there’s money left at the end of the year, customers can choose to donate to nonprofits. Lemonade is also a certified B-Corp.

But it’s worth noting that other insurance companies try to position themselves as socially responsible, such as MAIF. Insurtech companies aren’t reinventing the wheel on this front.

Third, Lemonade tries to pay you back as quickly as possible after you file a claim.

Chances are you don’t think that much about renters insurance. But it’s a lucrative industry. For instance, home insurance is a legal requirement in France. Due to tenant turnover, there are many opportunities to jump in and convince customers to switch to Lemonade when people move to a new place.

Let’s see how the fight between Lemonade and Luko plays out in France.

How Alibaba and JD.com compare in their healthcare endeavors

China’s tech circle is shifting its attention to online healthcare this week as JD Health is set to go public in one of Hong Kong’s largest IPOs this year.

Like Amazon, China’s e-commerce firms Alibaba and JD.com have been working to conquer the massive healthcare industry. The offerings are wide-ranging, reaching everything from around-the-clock delivery of medicines, sale of consumer health services like plastic surgery, online diagnosis for patients, to digital solutions for hospitals (like appointment-booking) and advertising services for drugmakers.

Alibaba Health began as an investment portfolio of the e-commerce firm and grew into a subsidiary through episodes of consolidations over the years. JD Health, on the other hand, was spun out from JD.com in 2019 and quickly began to attract flows of large investments.

The move into healthcare is part of the behemoths’ goal to be a one-stop-shop for everything. Here are some numbers for gauging how the digital health giants compare with each other:

Revenue

In terms of revenue sources, both companies rely mostly on the sales of medicines (both over-the-counter and prescription) and other healthcare products like vitamin supplements. Both have a direct-to-consumer drug business, whereby they are more involved in the supply chains, but they also serve as a marketplace for third-party suppliers, in which case they monetize by charging commission fees. They each have a smaller but growing services segment targeting consumers, hospitals and pharmaceutical companies.

Alibaba Health – 7 billion yuan or $1.07 billion (six months ended September)

JD Health – 8.8 billion yuan or $1.35 billion (six months ended June)

Profitability

Alibaba Health posted its first profitable earnings this year, pocketing 278.6 million yuan in the six months ended September, up from a loss of 7.6 million yuan from the same period last year.

In the six months ended June, JD Health incurred a loss of 5.4 billion yuan, compared to a profit of 236.3 million yuan in the same period of 2019. The loss was mainly due to fair value changes after issuing additional convertible preferred shares.

Active users

Though Alibaba Health generated less revenue, the platform enjoys a larger user base, thanks to Alibaba’s sprawling ecosystem. In the year ended June, a total of 250 million users made purchases through the online pharmacy of Tmall, Alibaba’s business-to-consumer marketplace. Meanwhile, Alibaba Health’s direct-to-consumer drugstore saw 65 million annual active users.

In comparison, 72.5 million people had at least made one purchase through JD Health’s platform in the past year.

Doctor resources

Both companies provide online health consultation services, which saw a surge in demand during the COVID-19 outbreak. Alibaba Health had a network of over 39,000 doctors by September, compared to JD Health’s pool of over 65,000 doctors, both in-house and third-party.