Tech Crunch

Samasource CEO Leila Janah passes away at 37

The startup community has lost another moral leader today.

Leila Janah, a serial entrepreneur who was the CEO and founder of machine learning training data company Samasource, passed away at the age of 37 due to complications from Epithelioid Sarcoma, a form of cancer, according to a statement from the company.

She focused her career on social and ethical entrepreneurship with the goal of ending global poverty, founding three distinct organizations over her career spanning the for-profit and non-profit worlds. She was most well-known for Samasource, which was founded a little more than a decade ago to help machine learning specialists develop better ML models through more complete and ethical training datasets.

Janah and her company were well ahead of their time, as issues related to bias in ML models have become top-of-mind for many product leaders in Silicon Valley today. My TechCrunch colleague Jake Bright had just interviewed Janah a few weeks ago, after Samasource raised more than $15 million in venture capital, according to Crunchbase.

In its statement, the company said:

We are all committed to continuing Leila’s work, and to ensuring her legacy and vision is carried out for years to come. To accomplish this, Wendy Gonzalez, longtime business partner and friend to Leila, will take the helm as interim CEO of Samasource. Previously the organization’s COO, Wendy has spent the past five years working alongside Leila to craft Samasource’s vision and strategy.

In addition to Samasource, Janah founded SF-based Samaschool, a 501(c)(3) nonprofit dedicated to helping low-income workers learn critical freelancing skills by helping them negotiate the changing dynamics in the freelance economy. The organization has built partnerships with groups like Goodwill to empower them to offer additional curricular resources within their own existing programs and initiatives.

Janah also founded LXMI, a skin-care brand that emphasized organic and fair-trade ingredients, with a focus on sourcing from low-income women’s cooperatives in East Africa. Founded three years ago, the company raised a seed round from the likes of NEA, Sherpa, and Reid Hoffman according to Crunchbase.

Across all of her initiatives, Janah consistently put the concerns of under-represented people at the forefront, and designed organizations to empower such people in their daily lives. Her entrepreneurial spirit, commitment, and integrity will be sorely missed in the startup community.

Our editor Josh Constine had this to say of Janah’s impact. “Leila was propulsive. Being around her, you’d swear there were suddenly more hours in the day just based on how much she could accomplish. Yet rather than conjuring that energy through ruthless efficiency, she carried on with grace and boundless empathy. Whether for her closest friends or a village of strangers on the other side of the world, she embraced others’ challenges as her own. Leila turned vulnerability into an advantage, making people feel so comfortable in her presence that they could unwind their personal and professional puzzles. Leila is the kind of founder we need more of, and she’ll remain an example of how to do business with heart.”

Here are all 21 companies from Alchemist Accelerator’s latest batch

We’re down in Sunnyvale, CA today, where Alchemist Accelerator is hosting a demo day for its most recent batch of companies. This is the 23rd class to graduate from Alchemist, with notable alums including LaunchDarkly, MightyHive, Matternet, and Rigetti Computing. As an enterprise accelerator, Alchemist focuses on companies that make their money from other businesses, rather than consumers.

21 companies presented in all, each getting five minutes to explain their mission to a room full of investors, media, and other founders.

Here are our notes on all 21 companies, in the order in which they presented:

i-50: Uses AI to monitor human actions on production lines, using computer vision to look for errors or abnormalities along the way. Founder Albert Kao says that 68% of manufacturing issues are caused by human error. The company currently has 3 paid pilots, totalling $190k in contracts.

Perimeter: A data visualization platform for firefighters and other first responders, allowing them to more quickly input and share information (such as how a fire is spreading) with each other and the public. Projecting $1.7M in revenue within 18 months.

Einsite: Computer vision-based analytics for mining and construction. Sensors and cameras are mounted on heavy machines (like dump trucks and excavators). Footage is analyzed in the cloud, with the data ultimately presented to job site managers to help monitor progress and identify issues. Founder Anirudh Reddy says the company will have $1.2M in bookings and be up and running on 2100 machines this year.

Mall IQ: A location-based marketing/analytics SDK for retail stores and malls to tie into their apps. Co-founder Batu Sat says they’ve built an “accurate and scalable” method of determining a customer’s indoor position without GPS or additional hardware like Bluetooth beacons.

Ipsum Analytics: Machine learning system meant to predict the outcome of a company’s ongoing legal cases by analyzing the relevant historical cases of a given jurisdiction, judge, etc. First target customer is hedge funds, helping them project how legal outcomes will impact the market.

Vincere Health: Works with insurance companies to pay people to stop smoking. They’ve built an app with companion breathalyzer hardware; each time a user checks in with the breathalyzer to prove they’re smoking less, the user gets paid. They’ve raised $400k so far.

Harmonize: A chat bot system for automating HR tasks, built to work with existing platforms like Slack and Microsoft Teams. An employee could, for example, message the bot to request time off — the request is automatically forwarded to their manager, presenting them with one-click approve/deny buttons which handle everything behind the scenes. The company says it currently has 400 paying customers and is seeing $500k in ARR, projecting $2M ARR in 2020.

Coreshell Technologies: Working on a coating for lithium-Ion batteries which the company says makes them 25% cheaper and 50% faster to produce. The company’s co-founder says they have 11 patents filed, with 2 paid agreements signed and 12 more in the pipeline.

in3D: An SDK for 3D body scanning via smartphone, meant to help apps do things like gather body measurements for custom clothing, allow for virtual clothing try-ons, or create accurate digital avatars for games.

Domatic: “Intelligent power” for new building construction. Pushes both data and low-voltage power over a single “Class 2” wire , making it easier/cheaper for builders to make a building “smart”. Co-founder Jim Baldwin helped build Firewire at Apple, and co-founder Gladys Wong was previously a hardware engineer at Cisco.

MeToo Kit: a kit meant to allow victims of sexual assault or rape to gather evidence through an at-home, self-administered process. Co-founder Madison Campbell says that they’ve seen 100k kits ordered by universities, corporations, non-profits, and military organizations. The company garnered significant controversy in September of 2019 after multiple states issued cease-and-desist letters, with Michigan’s Attorney General arguing that such a kit would not be admissible in court. Campbell told Buzzfeed last year that she would “never stop fighting” for the concept.

AiChemist Metal: Building a thin, lightweight battery made of copper and cellulose “nanofibers”. Co-founder Sergey Lopatin says the company’s solution is 2-3x lighter, stronger, and cheaper than alternatives, and that the company is projecting profitability in 2021. Focusing first on batteries for robotics, flexible displays, and electric vehicles.

Delightree: A task management system for franchises, meant to help owners create and audit to-dos across locations. Monitors online customer reviews, automatically generating potential tasks accordingly. In pilot tests with 3 brands with 16 brands on a waitlist, which the company says translates to about $400k in potential ARR.

DigiFabster: A ML-powered “smart quoting” tool for manufacturing shops doing things like CNC machining to make custom parts and components. Currently working with 125 customers, they’re seeing $500k in ARR.

NachoNacho: Helps small/medium businesses monitor and manage software subscriptions their employees sign up for. Issues virtual credit cards which small businesses use to sign up for services; you can place budgets on each card, cancel cards, and quickly determine where your money is going. Launched 9 months ago, NachoNacho says it’s currently working with over 1600 businesses.

Zapiens: a virtual assistant-style tool for sharing knowledge within a company, tied into tools like Slack/Salesforce/Microsoft 365. Answers employee questions, or uses its understanding of each employee’s expertise to find someone within the company who can answer the question.

Onebrief: A tool aiming to make military planning more efficient. Co-founder/Army officer Grant Demaree says that much of the military’s planning is buried in Word/Powerpoint documents, with inefficiencies leading to ballooning team sizes. By modernizing the planning approach with a focus on visualization, automation and data re-usability, he says planning teams could be smaller yet more agile.

Perceive: Spatial analytics for retail stores. Builds a sensor that hooks into existing in-store lighting wiring to create a 3D map of stores, analyzing customer movement/behavior (without face recognition or WiFi/beacon tracking) to identify weak spots in store layout or staffing.

Acoustic Wells: IoT devices for monitoring and controlling production from oil fields. Analyzes sound from pipes “ten thousand feet underground” to regulate how a machine is running, optimizing production while minimizing waste. Charges monthly fee per oil well. Currently has letters of intent to roll out their solution in over 1,000 wells.

SocialGlass: A marketplace for government procurement. Lets governments buy goods/services valued under $10,000 without going through a bidding process, with SocialGlass guaranteeing they’ve found the cheapest price. Currently working with 50+ suppliers offering 10,000 SKUs.

Applied Particle Technology: Continuous, realtime worker health/safety tracking for industrial environments. Working on wireless, wearable monitors that stream environmental data to identify potential exposure risks. Focusing first on mining and metals industries, later moving into construction, firefighting, and utilities environments.

Opera and the firm short-selling its stock (alleging Africa fintech abuses) weigh in

Internet services company Opera has come under a short-sell assault based on allegations of predatory lending practices by its fintech products in Africa.

Hindenburg Research issued a report claiming (among other things) that Opera’s finance products in Nigeria and Kenya have run afoul of prudent consumer practices and Google Play Store rules for lending apps.

Hindenburg — which is based in NYC and managed by financial analyst Nate Anderson — went on to suggest Opera’s U.S. listed stock was grossly overvalued.

That’s a primer on the key info, though there are several additional shades of the who, why, and where of this story to break down, before getting to what Opera and Hindenburg had to say.

A good start is Opera’s ownership and scope. Founded in Norway, the company is an internet services provider, largely centered around its Opera browser.

Opera was acquired in 2016 for $600 million by a consortium of Chinese investors, led by current Opera CEO Yahui Zhou.

Two years later, Opera went public in an IPO on NASDAQ, where its shares currently trade.

Web Broswers Africa 2019 Opera

Though Opera’s web platform isn’t widely used in the U.S. — where it has less than 1% of the browser market — it has been number-one in Africa, and more recently a distant second to Chrome, according to StatCounter.

On the back of its browser popularity, Opera went on an African venture-spree in 2019, introducing a suite of products and startup verticals in Nigeria and Kenya, with intent to scale more broadly across the continent.

In Nigeria these include motorcycle ride-hail service ORide and delivery app OFood.

Central to these services are Opera’s fintech apps: OPay in Nigeria and OKash and Opesa in Kenya — which offer payment and lending options.

Fintech focused VC and startups have been at the center of a decade long tech-boom in several core economies in Africa, namely Kenya and Nigeria.

In 2019 Opera led a wave of Chinese VC in African fintech, including $170 million in two rounds to its OPay payments service in Nigeria.

Opera’s fintech products in Africa (as well as Opera’s Cashbean in India) are at the core of Hindenburg Research’s brief and short-sell position. 

The crux of the Hindenburg report is that due to the declining market-share of its browser business, Opera has pivoted to products generating revenue from predatory short-term loans in Africa and India at interest rates of 365 to 876%, so Hindenburg claims.

The firm’s reporting goes on to claim Opera’s payment products in Nigeria and Kenya are afoul of Google rules.

“Opera’s short-term loan business appears to be…in violation of the Google Play Store’s policies on short-term and misleading lending apps…we think this entire line of business is at risk of…being severely curtailed when Google notices and ultimately takes corrective action,” the report says.

Based on this, Hindenburg suggested Opera’s stock should trade at around $2.50, around a 70% discount to Opera’s $9 share-price before the report was released on January 16.

Hindenburg also disclosed the firm would short Opera.

Founder Nate Anderson confirmed to TechCrunch Hindenburg continues to hold short positions in Opera’s stock — which means the firm could benefit financially from declines in Opera’s share value. The company’s stock dropped some 18% the day the report was published.

On motivations for the brief, “Technology has catalyzed numerous positive changes in Africa, but we do not think this is one of them,” he said.

“This report identified issues relating to one company, but what we think will soon become apparent is that in the absence of effective local regulation, predatory lending is becoming pervasive across Africa and Asia…proliferated via mobile apps,” Anderson added.

While the bulk of Hindenburg’s critique was centered on Opera, Anderson also took aim at Google.

“Google has become the primary facilitator of these predatory lending apps by virtue of Android’s dominance in these markets. Ultimately, our hope is that Google steps up and addresses the bigger issue here,” he said.

TechCrunch has an open inquiry into Google on the matter. In the meantime, Opera’s apps in Nigeria and Kenya are still available on GooglePlay, according to Opera and a cursory browse of the site.

For its part, Opera issued a rebuttal to Hindenburg and offered some input to TechCrunch through a spokesperson.

In a company statement opera said, “We have carefully reviewed the report published by the short seller and the accusations it put forward, and our conclusion is very clear: the report contains unsubstantiated statements, numerous errors, and misleading conclusions regarding our business and events related to Opera.”

Opera added it had proper banking licenses in Kenyan or Nigeria. “We believe we are in compliance with all local regulations,” said a spokesperson.

TechCrunch asked Hindenburg’s Nate Anderson if the firm had contacted local regulators related to its allegations. “We reached out to the Kenyan DCI three times before publication and have not heard back,” he said.

As it pertains to Africa’s startup scene, there’ll be several things to follow surrounding the Opera, Hindenburg affair.

The first is how it may impact Opera’s business moves in Africa. The company is engaged in competition with other startups across payments, ride-hail, and several other verticals in Nigeria and Kenya. Being accused of predatory lending, depending on where things go (or don’t) with the Hindenburg allegations, could put a dent in brand-equity.

There’s also the open question of if/how Google and regulators in Kenya and Nigeria could respond. Contrary to some perceptions, fintech regulation isn’t non-existent in both countries, neither are regulators totally ineffective.

Kenya passed a new data-privacy law in November and Nigeria recently established guidelines for mobile-money banking licenses in the country, after a lengthy Central Bank review of best digital finance practices.

Nigerian regulators demonstrated they are no pushovers with foreign entities, when they slapped a $3.9 billion fine on MTN over a regulatory breach in 2015 and threatened to eject the South African mobile-operator from the country.

As for short-sellers in African tech, they are a relatively new thing, largely because there are so few startups that have gone on to IPO.

In 2019, Citron Research head and activist short-seller Andrew Left — notable for shorting Lyft and Tesla — took short positions in African e-commerce company Jumia, after dropping a report accusing the company of securities fraud. Jumia’s share-price plummeted over 50% and has only recently begun to recover.

As of Wednesday, there were signs Opera may be shaking off Hindenburg’s report — at least in the market — as the company’s shares had rebounded to $7.35.

Ophelia Brown’s Blossom Capital raises new $185M European early-stage fund

Blossom Capital, the early-stage VC firm co-founded by ex-Index Ventures and LocalGlobe VC Ophelia Brown, is announcing a second fund, less than 12 months since fund one was closed.

The new fund, which is described as “heavily oversubscribed,” sits at $185 million. That’s up from $85 million first time around.

Blossom’s remit remains broadly the same: to be the lead investor in European tech startups at Series A, along with doing some seed deals, too. In particular, the VC will continue to focus on finance, design, marketplaces, travel, developer-focused tools, infrastructure and “API-first” companies.

Its differentiator is pitched as so-called “high conviction” investing, which sees it back fewer companies by writing larger cheques, along with claiming to have close ties to U.S. top tier investors ready to back portfolios at the next stage.

And whilst a “bridge to the valley” is a well worn claim by multiple European VCs, Blossom’s track record so far bares this is out somewhat, even if it nascent. Of the firm’s portfolio, travel booking platform Duffel has received two follow-on investment rounds led by Benchmark and Index Ventures; cybersecurity automation platform Tines received follow-on investment led by Accel Partners; and payments unicorn Checkout.com is also backed by Insight Partners.

In addition, I understand that about half of Blossom’s LPs are in the U.S., and that all of the firm’s original LPs invested in this second fund, which Brown concedes was a lot easier to raise than the first. That’s presumably down to the up round valuations Blossom is already able to tout.

Citing benchmark data from Cambridge Associates and Preqin, Blossom says it sits in the top 5% of funds of 2018/2019 vintage in the U.S. and EU. Although, less than a year old, I would stress that it is still very early days.

More broadly, Brown and Blossom’s other partners — Imran Gohry, Louise Samet and Mike Hudack — argue that the most successful European companies historically are those that were able to attract U.S. investors but that companies no longer need to relocate to the U.S. to seize the opportunity.

“When we looked at the data it was very clear at the growth stage that, outside of Index and Accel, the most successful European outcomes were driven by the combination of European early-stage investors and top-tier U.S. growth investors,” explained Blossom Capital partner, Imran Ghory, in a statement. “From day one we prioritised building those relationships, both to share knowledge but also provide a bridge for European founders to access the best growth capital as they scale”.

Challenger business bank Qonto raises $115 million round led by Tencent and DST Global

French startup Qonto has raised a $115 million Series C funding round led by Tencent and DST Global. Today’s news comes a few days after another French fintech startup Lydia raised some money from Tencent.

Existing investors Valar and Alven are also participating in today’s funding round. TransferWise co-founder Taavet Hinrikus and Adyen CFO Ingo Uytdehaage are also joining the round. Qonto says that it represents the largest funding round for a French fintech company.

Qonto is a challenger bank, or a neobank, but for B2B use cases. Instead of attracting millions of customers like N26 or Monzo, Qonto is serving small and medium companies as well as freelancers in Europe.

According to the startup, business banking in Europe is broken. The company thinks it can provide a much better user experience with an online- and mobile-first product.

The company has managed to attract 65,000 companies over the past two years and a half. The product is currently live in France, Italy, Spain and Germany. In 2019 alone, Qonto has managed €10 billion in transaction volume.

With today’s funding round, the company plans to double down on its existing markets, develop new features that make the platform works better in each country based on local needs and hire more people. The team should grow from 200 to 300 employees within a year.

Qonto obtained a payment institution license in June 2018 and has developed its own core banking infrastructure. Around 50% of the company’s user base is currently using Qonto’s own core banking system. Others are still relying on a third-party partner.

Moving from one back end to another requires some input from customers, which explains why there are still some customers using the legacy infrastructure. Over the coming months, Qonto plans to launch new payment features that should convince more users to switch to Qonto’s back end.

Even more important, Qonto plans to obtain a credit institution license, which could open up a ton of possibilities when it comes to features and revenue streams. The company says that it should have its new license by the end of the year.

For instance, you could imagine being able to get a credit card, apply for an overdraft and get a small loan with Qonto.

Compared to traditional banks, Qonto lets you open a bank account more easily. After signing up, Qonto offers a modern interface with your activity. You can export your transactions in no time, manage your expenses and get real-time notifications. Qonto also integrates with popular accounting tools.

When it comes to payment methods, Qonto gives you a French IBAN as well as debit cards. You can order physical or virtual cards whenever you want, customize limits and freeze a card. Qonto also supports direct debit and checks. Like many software-as-a-service products, you can also manage multiple user accounts and customize permission levels.

Catalyst Fund gets $15M from JP Morgan, UK Aid to back 30 EM fintech startups

The Catalyst Fund has gained $15 million in new support from JP Morgan and UK Aid and will back 30 fintech startups in Africa, Asia, and Latin America over the next three years.

The Boston based accelerator provides mentorship and non-equity funding to early-stage tech ventures focused on driving financial inclusion in emerging and frontier markets.

That means connecting people who may not have access to basic financial services — like a bank account, credit or lending options — to those products.

Catalyst Fund will choose an annual cohort of 10 fintech startups in five designated countries: Kenya, Nigeria, South Africa, India and Mexico. Those selected will gain grant-funds and go through a six-month accelerator program. The details of that and how to apply are found here.

“We’re offering grants of up to $100,000 to early-stage companies, plus venture building support…and really…putting these companies on a path to product market fit,” Catalyst Fund Director Maelis Carraro told TechCrunch.

Program participants gain exposure to the fund’s investor networks and investor advisory committee, that include Accion and 500 Startups. With the $15 million Catalyst Fund will also make some additions to its network of global partners that support the accelerator program. Names will be forthcoming, but Carraro, was able to disclose that India’s Yes Bank and University of Cambridge are among them.

Catalyst fund has already accelerated 25 startups through its program. Companies, such as African payments venture ChipperCash and SokoWatch — an East African B2B e-commerce startup for informal retailers — have gone on to raise seven-figure rounds and expand to new markets.

Those are kinds of business moves Catalyst Fund aims to spur with its program. The accelerator was founded in 2016, backed by JP Morgan and the Bill & Melinda Gates Foundation.

Catalyst Fund is now supported and managed by Rockefeller Philanthropy Advisors and global tech consulting firm BFA.

African fintech startups have dominated the accelerator’s companies, comprising 56% of the portfolio into 2019.

That trend continued with Catalyst Fund’s most recent cohort, where five of six fintech ventures — Pesakit, Kwara, Cowrywise, Meerkat and Spoon — are African and one, agtech credit startup Farmart, operates in India.

The draw to Africa is because the continent demonstrates some of the greatest need for Catalyst Fund’s financial inclusion mission.

By several estimates, Africa is home to the largest share of the world’s unbanked population and has a sizable number of underbanked consumers and SMEs.

Roughly 66% of Sub-Saharan Africa’s 1 billion people don’t have a bank account, according to World Bank data.

Collectively, these numbers have led to the bulk of Africa’s VC funding going to thousands of fintech startups attempting to scale payment solutions on the continent.

Digital finance in Africa has also caught the attention of notable outside names. Twitter/Square CEO Jack Dorsey recently took an interest in Africa’s cryptocurrency potential and Wall Street giant Goldman Sachs has invested in fintech startups on the continent.

This lends to the question of JP Morgan’s interests vis-a-vis Catalyst Fund and Africa’s financial sector.

For now, JP Morgan doesn’t have plans to invest directly in Africa startups and is taking a long-view in its support of the accelerator, according to Colleen Briggs — JP Morgan’s Head of Community Innovation

“We find financial health and financial inclusion is a…cornerstone for inclusive growth…For us if you care about a stable economy, you have to start with financial inclusion,” said Briggs, who also oversees the Catalyst Fund.

This take aligns with JP Morgan’s 2019 announcement of a $125 million, philanthropic, five-year global commitment to improve financial health in the U.S. and globally.

More recently, JP Morgan Chase posted some of the strongest financial results on Wall Street, with Q4 profits of $2.9 billion. It’ll be worth following if the company shifts its income-generating prowess to business and venture funding activities in Catalyst Fund markets such as Nigeria, India and Mexico.

Week in Review: Forget cord cutting, here comes the stream slashing

Hey everyone, welcome back to Week in Review where I dive deep into a bit of news from the week or just share some thoughts and go over some of the more interesting stories of the week.

If you’re reading this on the TechCrunch site, you can get this in your inbox here, and follow my tweets here.


The big story

“Cord cutting” might still be a major trend for those walking away from cable subscriptions in favor of online streaming services, but the world of online subscription TV is nearly saturated and as 2020 prepares to inundate us with more services, it’s likely growing time for consumers to stop adding services and start prioritizing.

NBCUniversal delivered some more details this week on its Peacock network and earlier this month we heard more about the mobile-only streaming network Quibi . These launches will come along in the spring, arriving just months after the high-profile launches on Apple TV+ and Disney+. Adding four high-spend streaming platforms in a short time frame could rattle the cages of consumers that have been bumbling along with only a couple streaming service subscriptions.

NBCUniversal’s Peacock seems to walk the line between both worlds, leveraging Comcast subscribers without seeming to invest heavily in original content for the service. Their strategy is pinned on the attractiveness of their existing content library which they’re promoting heavily on both free and paid plans. There could be something here, it feels like a marked return to the early Hulu playbook, which could very well be played out.

I still don’t know what to think of Quibi. They are dropping plenty of cash but spending your way into building a Gen Z network seems like a tall order. They’ve already nabbed a big partnership with T Mobile which seems promising when considering their broader industry adoption and yet it still seems like Snapchat Discover Prime. I’ll withhold judgment until launch but other mobile-first video networks have had less than stellar receptions.

Side note: At this point in the streaming video product life cycle, I would imagine cracking down on password-sharing is going to start being a more attractive option for streaming service operators.

We’ll see how this all shakes out, but it’s getting crowded.

Trends of the week

Here are a few big news items from big companies, with green links to all the sweet, sweet added context:

  • Visa buys Plaid for $5.2 billion
    The biggest acquisition of the week was the very bold purchase of Plaid by Visa. Visa paid up double the banking API startup’s last private valuation. Read more here.
  • Google acquires Pointy
    Google has announced a couple deals in the past few weeks. This week, we heard that they had acquired the Dublin startup Pointy, which builds hardware and software to help physical retailers track product inventory levels. Read more about it in our coverage.
  • Alphabet is a $1 trillion company
    In the current age of big tech, there’s an elite club for public companies worth more than $1 trillion in market cap. This week, Alphabet joined its ranks. Read more here.

Extra Crunch

Our premium subscription business had another great week of content. My colleague Darrell Etherington talked a bit about the next frontier of early-stage space investments.

Space Angels’ Chad Anderson on entering a new decade in the ‘entrepreneurial space age’

“Space as an investment target is trending upwards in the VC community, but specialist firm Space Angels has been focused on the sector longer than most. The network of angel investors just published its most recent quarterly overview of activity in the space startup industry, revealing that investors put nearly $6 billion in capital into space companies across 2019.…”

Sign up for more newsletters, including my colleague Darrell Etherington’s new space-focused newsletter Max Q, here.

Deep tech VCs on what they view as some of the most impactful young startups right now

During this week’s Democratic debate, there was a lot of talk, unsurprisingly, about ensuring the future of this country’s children and grandchildren. Climate change was of particular interest to billionaire Tom Steyer, who said repeatedly that addressing it would be his top priority were he elected U.S. president.

As it happens, earlier the same day, we’d spent time on the phone with two venture capitalists who think of almost nothing else every day. The reason: they both invest in so-called deep tech, and they meet routinely with startups whose central focus is on making the world habitable for generations of people to come — as well as trying to produce outsize financial returns, of course.

The two VCs with whom we talked know each other well. Siraj Khaliq is a partner at the global venture firm Atomico, where he tries to find world-changing startups that are enabled by machine learning, AI, and computer vision. He has strong experience in the area, having cofounded The Climate Corporation back in 2006, a company that helps farmers optimize crop yield and that was acquired by Monsanto in 2013 for roughly $1 billion.

Seth Bannon is meanwhile a founding partner of Fifty Years, a nearly five-year-old, San Francisco-based seed-stage fund whose stated ambition is backing founders who want to solve the world’s biggest problems. The investors’ interests overlap so much that Khaliq is also one of Fifty Years’s investors.

From both, we wanted to know which companies or trends are capturing their imagination and, in some cases, their investment dollars. Following are excerpts from our extended conversation earlier this week. (We thought it was interesting; hopefully you will, too.)

TC: Seth, how would you describe what you’re looking to fund at your firm?

SB: There’s a Winston Churchill essay [penned nearly 100 years ago] called “Fifty Years Hence” that describes what we do. He predicts genomic engineering, synthetic biology, growing meat without animals, nuclear power, satellite telephony.  Churchill also notes that because tech changes so quickly that it’s important that technologists take a principled approach to their work. [Inspired by him] we’re backing founders who can make a ton of money while doing good and focusing on health, disease, the climate crisis . . .

TC: What does that mean exactly? Are you investing in software?

SB: We’re not so enthusiastic about pure software because it’s been so abstracted away that it’s become a commodity. High school students can now build an app, which is great, but it also means that competitive pressures are very high. There are a thousand funds focused on software seed investing. Fortunately, you can now launch a synthetic biology startup with seed funding, and that wasn’t possible 10 years ago. There are a lot of infrastructural advancements happening that makes [deep tech investing even with smaller checks] interesting.

TC: Siraj, you also invest exclusively on frontier, or deep tech, at Atomico . What’s your approach to funding startups?

SK: We do Series A [deals] onward and don’t do seed stage. We primarily focus on Europe. But there’s lot of common thinking between us and Seth. As a fund, we’re looking for big problems that change the world, sometimes at companies that won’t necessarily be big in five years but if you look out 10 years could be necessary for humanity. So we’re trying to anticipate all of these big trends and focus on three or four theses a year and talk as much as we can with academics and other experts to understand what’s going on. Founders then know we have an informed view.

Last year, we focused on synthetic biology, which is a becoming so broad a category that it’s time to start subdividing it. We were also doing AI-based drug discovery and quantum computing and we started to spend some time on energy as well. We also [continued an earlier focus on ] the future of manufacturing and industry. We see a number of trends that make [the latter] attractive, especially in Europe where manufacturing hasn’t yet been digitized.

TC: Seth, you mentioned synthetic biology infrastructure. Can you elaborate on what you’re seeing that’s interesting on this front?

SB: You’ve maybe heard of directed evolution, technology that allows biologists to use the power of evolution to get microbes or other biological machines to do what they want them to do that would have been impossible before. [Editor’s note: here, Bannon talked a bit about Frances Arnold, the Nobel Prize-winning chemist who was awarded the prize in 2018 for developing the technique.]

So we’re excited to back [related] startups. One, Solugen, enzymatically makes industrial chemicals [by combining genetically modified enzymes with organic compounds, like plant sugars]. Hydrogen peroxide is a $6 billion dollar industry, and it’s currently made through a petroleum-based process in seven-football-field-long production plants that sometimes explode and kill people.

TC: Is this then akin to Zymergen, which develops molecules in order to create unique specialty materials?

SB: Zymergen mainly works as a kind of consultant to help companies engineer strains that they want. Solugen is a vertically integrated chemicals company, so it [creates its formulations], then sells directly into industry.

TC: How does this relate to new architectures?

SB: The way to think about it is that there’s a bunch of application-level companies, but as synthetic biology companies start to take off, there’s a bunch of emerging infrastructure layer companies. One of these is Ansa Biotechnologies, which has a fully enzymatic process or writing DNA. Like Twist, which went public, they make DNA using a chemical process [to sell to clients in the biotechnology industry. [Editor’s note: More on the competition in this emerging space here.]

Also, if you look at plant-based alternatives to meat, they’re more sustainable but also far more expensive than traditional beef. Why is that? Well plant-based chicken is more expensive because the processing infrastructure being used is more than 10 years behind real chicken processing, where you’ll see robot arms that cut up chicken so efficiently that it looks like a Tesla factory.

[Alternative meat] companies are basically using these extruders built in the ’70s because the industry has been so small, and that’s because there’s been a lot of skepticism from the investment community in these companies. Or there was. The performance of Beyond Meat’s IPO ended it. Now there’s a rush of founders and dollars into that space, and whenever you have a space where the core infrastructure has been neglected, there’s opportunity. A former mechanical engineer with Boeing has started a company, Rebellyous Foods, to basically build the AWS for the plant-based food industry, for example. She’s using [the machines she’s building] to sell plant-based chicken nuggets, [but that’s the longer-term plan].

TC: Siraj, you say last year you started to spend time on energy. What’s interesting to you as it relates to energy?

SK: There’s been some improvement in how we capture emissions, but [carbon emissions] are still very deleterious to our health and the planet’s health, and there are a few areas to think about [to address the problem]. Helping people measure and control their consumption is one approach, but also we think about how to produce new energy, which is a shift we [meaning mankind] need to undertake. The challenge [in making that shift] is often [capital expenditures]. It’s hard for venture investors to back companies that are [building nuclear reactors], which makes government grants the best choice for early innovation oftentimes. There is one company, Seaborg, that has figured out a clever reactor. It’s not a portfolio company but it’s [compelling].

SB: We also really like what Seaborg is doing. These [fourth generation] nuclear companies have a whole host of approaches that allow for smaller, safer reactors that you wouldn’t mind having in your backyard. But Siraj put his finger on it: as an early-stage deep tech investor, we have to consider the capital plan of a company, and if it needs to raise billions of dollars, early investors will get really diluted, so early-stage venture just isn’t the best fit.

TC: There are other areas you like, though, because costs have fallen so much.

SB: Yes. Satellite telephony used to be one of those areas. Some of the satellites in space right now cost $350 million [to launch] and took three to four years to build, which would be really hard for any early-stage investor to fund. But now, a new generation of companies is building satellites for one-tenth of the cost in months, not years. That’s a game changer. They can iterate faster. They can build a better product. They don’t have to raise equity to build and launch either; they can raise from a debt financier [from whom they can] borrow money and pay it back over time. That model isn’t available to a company like Uber or Lyft, because those companies can’t say, ‘X is going to cost us Y dollars and it will pay back Z over time.’

TC: What of concerns that all these cheap satellites are going to clog up the sky pretty quickly?

SB: It’s a real concern. Most [of today’s satellites] are low earth satellites, and the closer to the earth they are, the brighter they are; they reflect the sun more, the more satellites we’re seeing instead of stars. I do think it’s incumbent on all of these companies to think about how they are contributing to the future of humanity. But [when you can transmit more information from satellites], the stability of governments improves, too, so maybe the developed world needs to sacrifice a bit. I think that’s a reasonable tradeoff. If on the other hand, we’re putting up satellites to help people buy more crap . . .

TC: It’s like the argument for self-driving cars in a way. Life becomes more efficient, but they’ll require far more energy generation, for example. There are always second-order consequences.

SK: But think of how many how many people are killed in driving accidents, versus terrorist attacks. Humans have many great qualities, but being able to drive a lethal machine consistently isn’t one of them. So when we take that into perspective, it’s really important that we build autonomous vehicles.

You [voice] a legitimate concern, and often when there are step changes, there are discontinuities along the way that lead to side effects that aren’t great. That comes down to several things. First, infrastructure will have to keep up. We’ll also have to create regulations that don’t lead to the worst outcomes. One our investments, Lilium in Munich, has built an entirely electric air taxi service that’s built on vertical takeoff. It’s nimble. It’s quiet enough to operate in city environments.

On roads, cars are constrained by 2D terrain and buildings, but [in the air] if you can do dynamic air traffic control, it opens up far much efficient transport. If you can get from downtown London to Heathrow [airport] in five minutes versus 50 minutes in a Tesla? That’s far more energy efficient.

Trucks VC general partner Reilly Brennan is coming to TC Sessions: Mobility

The future of transportation industry is bursting at the seams with startups aiming to bring everything from flying cars and autonomous vehicles to delivery bots and even more efficient freight to roads.

One investor who is right at the center of this is Reilly Brennan, founding general partner of Trucks VC, a seed-stage venture capital fund for entrepreneurs changing the future of transportation.

TechCrunch is excited to announce that Brennan will join us on stage for TC Sessions: Mobility.

In case you missed last year’s event, TC Sessions: Mobility is a one-day conference that brings together the best and brightest engineers, investors, founders and technologists to talk about transportation and what is coming on the horizon. The event will be held May 14, 2020 in the California Theater in San Jose, Calif.

Brennan is known as much for his popular FoT newsletter as his investments, which include May Mobility, Nauto, nuTonomy, Joby Aviation, Skip and Roadster.

Stay tuned to see who we’ll announce next.

And … $250 Early-Bird tickets are now on sale — save $100 on tickets before prices go up on April 9; book today.

Students, you can grab your tickets for just $50 here.

Crowdfunded hardware startups are breathing fresh life into music making

I love music. Seriously, it’s one of the few things that brings solace in this cold, lonely world. Want to go deep on Joni Mitchell, William Onyeabor or Pablo Casals? I’m game. Yes, I worked at multiple record stores years before TechCrunch. Yes, I will always be that guy. What I will never be, however, is a musician, professional or otherwise.

I’m resolved to this fact at this point in my life. I’ll never be a rock star like I’ll never be a professional baseball player — both facts I’ve mostly made peace with. We don’t need to go into the two years of junior high when I played the trombone, or the decade and a half I attempted to master the guitar. All you need to know is I had absolutely zero aptitude for either.

It’s not for lack of desire to make music. It’s just a straight-up, good-old-fashioned lack of talent. For precisely this reason, I view any new piece of musical equipment with great interest. There’s a ton of money to be made for the startup that can truly unlock the potential of music making for those lacking the basic skills to do so.

Roli has long been of interest to me for this reason. I was one of the first people to cover the Seaboard when it debuted at SXSW a number of years ago. It’s a fascinating instrument, letting users bend notes courtesy of a soft material makeup, but mastering it — or, really, making any music at all — requires some ability to play piano.The company’s modular block system, announced a few years ago, was even more compelling, but similarly failed to scratch that itch.

Last week at CES, the fine folks at Kickstarter introduced me to the founders of a trio of crowdfunding companies that fit the bill to some degree. French startup Joué actually went on to win top prize at our CES pitch-off this year, with its modular MIDI controller of the same name.

The device operates on a similar principle as the Sensel Morph we’ve covered before, with silicone skins that overlay atop a touch surface to offer a variety of different controllers. Joué’s take is more music-focused than Sensel’s ever was. And besides, based on a conversation with Sensel at the show, I think it’s pretty fair to say that the company is turning most of its focus away from that device, in favor of compelling touch components it’s working to build into third-party handsets.

The Kickstarter project is an impressive one, as evidenced by the brief demo. It’s extremely versatile, requiring just a new skin and sound pack for the system to take on completely different aural qualities. The company also discussed the potential for customized sound packs. Joué brought NWA founder Arabian Prince in to perform at its both all week. An odd fit for CES, to be sure, but an interesting example of the kinds of artists such a product might be able to draw. It’s easy to see musicians expressing interest in a customized pad.

That said, while the company seems to be positioning the product as perfect for beginners, I do expect there’s a reasonably large learning curve here. That seems removed somewhat from Rhythmo. The Austin-based startup’s project combines music making with a guided dip into the maker world.

It’s a MIDI controller drum kit that you make out of a cardboard box. It ships with all of the pieces, and putting it together offers a nice connection into the process of creating a musical instrument. Founder Ethan Jin let me take a constructed model for a spin on the CES floor. The demo was a little glitchy for various reasons, but it was fun. The kit features large arcade buttons that can be mapped to a variety of sounds. You can use the Rhythmo app or interface with your music software of choice in iPad, desktop, etc. It’s a fun entry into that world.

Artiphon, however, is probably closest to fulfilling my very specific desires. The company is best known for its massively successful Kickstarter project, Instrument 1. That racked in a mind-boggling $1.3 million with the promise of delivering a guitar, violin, piano and drum machine all in a single device.

The newer Orba ($1.4 million this time), however, really caught my eye. The puck-shaped device is a pocket synthesizer/looper/MIDI controller that requires little if any musical knowledge to get up and running. After a conversation with founder Mike Butera, I’ve come to regard it at a very base-level as a sort of musical fidget spinner.

That is to say, it’s simple enough that you can use it absentmindedly to make music while you pace around your apartment, trying to come up with a half-decent headline for the story of crowdfunded music projects at CES you’ve been writing (a purely hypothetical example that in no way reflects my life).

Of the three, that’s the one I’m most key to review, in hopes of finally scratching that musical itch.

CES 2020 coverage - TechCrunch

Another women-led venture firm gains momentum, with Uber exec Rachel Holt as cofounder

Last November, Axios reported that New Enterprise Associates partner Dayna Grayson was leaving the storied venture firm after roughly six years to launch her own shop in Washington, D.C. called Construct Capital.

Today, we know Grayson has company, too. Rachel Holt, one of Uber’s first employees and until now its head of new mobility, announced this morning that she’s joining Grayson as her cofounder.

Outside of tweeting about their partnership, neither Grayson nor Holt are commenting on their new firm, presumably owing to SEC rules about promoting a new fund before it has been raised. But it looks likely that the two met at NEA in recent years if not sooner, with Holt working in the capacity of an “explorer” or scout for NEA since 2018. It was a role through which she was investing in early-stage startups on behalf of the firm, in a manner similar to the way that Sequoia Capital empowers “scouts” in its network — usually founders or operators at fast-growing companies — to do the same.

As for what’s next, I’ll be joining @daynagrayson to co-found @constructcap, a new VC firm based in DC. I’m really excited to take everything I’ve learned at Uber to help find, fund and scale the next generation of tech entrepreneurs. (2/6)

— Rachel Holt (@RachelJHolt) January 14, 2020

More to come! 👏👏👏https://t.co/iS6UjQ30ds

— dayna grayson (@daynagrayson) January 14, 2020

Either way, 2020 already looks poised to be a big year for women in venture.

As we reported earlier this week, a former Kleiner Perkins investor, Lynn Chou O’Keefe, just took the wraps off her own digital health-focused venture firm, Define Ventures, which raised an impressive $87 million in commitments for its debut.

Some time this year, longtime VC Renata Quintini — formerly of Felicis Ventures and Lux Capital — is expected to close the debut fund that she is raising with Roseanne Wincek, formerly of IVP. (The reported target for their new outfit, Renegade Partners, is $300 million.)

Last month, London-based Ada Ventures, cofounded by investor Francesca Warner, also took the wraps off its debut fund, which closed with $34 million in capital commitments.

Based on our conversations last fall with limited partners, the institutions and individuals who fund venture firms, there were a lot of people knocking on their door in anticipation of a possible economic slowdown, so we’d guess this is just the beginning of a very long list of new funds that will emerge on the scene this year, from investors of all stripes.

Our guess is that a fair amount of them — more than we’ve seen previously — will be women with deep industry expertise like Grayson and Holt.

Comcast launches SportsTech startup accelerator with NASCAR and others

Comcast NBCUniversal believes its can access startup innovation while supporting future Olympic gold-medalists.

The American mass media company launched its new SportsTech accelerator today, based in part, on that impetus.

TechCrunch attended a briefing with Comcast execs at 30 Rock NYC to learn more about the initiative.

The SportsTech accelerator is a partnership across Comcast NBCUniversal’s sports media brands: NBC Sports, Sky Sports and the Golf Channel.

The program brings in industry partners NASCAR, U.S. Ski & Snowboard and USA Swimming — all of whose sports broadcast on Comcast NBC channels.

Starting today, pre-Series A sports technology startups can apply to become part of a 10-company cohort.

Accepted ventures will gain $50,000 in equity-based funding and enter SportsTech’s three-month accelerator boot camp — with sports industry support and mentorship — to kick off at Comcast’s Atlanta offices August 2020.

Boomtown Accelerators will join Comcast in managing the SportsTech program, with both sharing a minimum of 6% equity in selected startups.

Industry partners, such as NASCAR and U.S. Ski & Snowboard, will play an advisory role in startup selection, but won’t add capital.

An overarching objective for SportsTech emerged during conversations with execs and Jenna Kurath, Comcast’s VP for Startup Partner Development, who will run the new accelerator.

Comcast and partners aim to access innovation that could advance the business and competitive aspects of each organization.

From McDonald’s McD Tech Labs to Mastercard’s Start Path, corporate incubators and accelerators have become common in large cap America, where companies look to tap startup ingenuity and deal-flow to adapt and hedge disruption.

Toward its own goals, SportsTech has designated several preferred startup categories. They include Business of Sports, Team and Coach Success and Athlete and Player Performance.

SportsTech partners, such as NASCAR, hope to access innovation to drive greater audience engagement. The motorsport series (and its advertising-base) has become more device-distributed, and NASCAR streams more race-day data live, from the pits to the driver’s seat.

“The focus has grown into what are we going to do to introduce more technology in the competition side of the sport…the fan experience side and how we operate as a business,” said NASCAR Chief Innovation Officer Craig Neeb.

“We’re confident we’re going to get access to some incredibly strong and innovative companies,” he said of NASCAR’s SportsTech participation.

U.S. Ski & Snowboard — the nonprofit that manages America’s snowsport competition teams  — has an eye on performance and medical tech for its athletes.

“Wearable technology [to measure performance]…is an area of interest…and things like computer vision and artificial intelligence for us to better understand technical elements, are quite interesting,” said Troy Taylor, U.S. Ski & Snowboard’s Director of High Performance.

US Ski Team

Credit: U.S. Ski & Snowboard

Some of that technology could boost prospects of U.S. athletes, such as alpine skiers Tommy Ford and Mikaela Shiffrin, at the 2022 Beijing Winter Olympics.

In a $7.75 billion deal inked in 2014, Comcast NBCUniversal purchased the U.S. broadcast rights for Olympic competition —  summer and winter —  through 2032.

“We asked ourselves, ‘could we do more?’ The notion of an innovation engine that runs before, during and after the Olympics. Could that give our Team USA a competitive edge in their pursuit for gold?,” said Jenna Kurath.

The answer came up in the affirmative and led to the formation of Comcast’s SportsTech accelerator.

Beyond supporting Olympic achievement, there is a strategic business motivation for Comcast and its new organization.

“The early insights we gain from these companies could lead to other commercial relationships, whether that’s licensing or even acquisition,” Will McIntosh, EVP for NBC Sports Digital and Consumer Business, told TechCrunch.

SportsTech is Comcast’s third accelerator, and the organization has a VC fund, San Francisco-based Comcast Ventures — which has invested in the likes of Lyft, Vimeo and Slack and racked up 67 exits, per Crunchbase data.

After completing the SportsTech accelerator, cohort startups could receive series-level investment or purchase offers from Comcast, its venture arm or industry partners, such as NASCAR.

“Our natural discipline right now is…to have early deliverables. But overtime, with our existing partners, we’ll have conversations about who else could be a logical value-add to bring into this ecosystem,” said Bill Connors, Comcast Central Division President.

Startups Weekly: In a crowded field of unicorns, ClassPass becomes another unicorn

I hope you’ve all had a good week. Normally I’m behind the scenes (where I’m most comfortable), but I’ll be managing the Startups Weekly newsletter until I assign it to someone else. More on that in a few weeks. Want it in your inbox? Sign up here for this and other great newsletters we have to offer, including ones on space and transportation. For now, let’s get on with it, shall we?

A unicorn workout

Working out never did a body so good as it did for ClassPass this week. The popular startup that created a way to help people exercise more easily just became a unicorn with an influx of Series E cash. 

The latest funding, in the amount of $285 million, was led by L Catterton and Apax Digital, with participation from existing investor Temasek. It brings ClassPass’s total known raise to about $550 million.

We reported a couple of weeks ago that ClassPass, then at a $536.4 million valuation, was sniffing around for the round, which would promote it to the unicorn club.

We are motivated by the impact we’ve had on members and partners, including 100 million hours of workouts that have already been booked,” said ClassPass Founder and Chairman Payal Kadakia in a statement about the raise. “This investment is a significant milestone that will further our mission to help people stay active and spend their time meaningfully.

Photo: ClassPass

Funding real estate

A couple of real estate-ish startups got some attention this week. Los Angeles-based Luxury Presence raised $5.4 million to help it help agents round out their digital marketing arsenals.

In other real estate funding this week, Orchard, previously known as Perch, announced that it has raised $36 million. The company solves the problem that so-called “dual-trackers” face: selling their home while trying to buy one. It’s stressful and costs a lot of money.

As Jordan Crook wrote in her story on the raise: “Orchard solves this by making an offer on buyers’ old houses that is guaranteed for 90 days. Orchard co-founder Court Cunningham says that more than 85% of those homes sell at a market price before the 90-day period.”

GettyImages 979844616

Image via Getty Images / Feng Yu

Lora DiCarlo’s return to CES

Brian Heater had a chat with Lora DiCarlo CEO Lora Haddock about the sex tech company’s return to CES. But the interview wasn’t conducted at a table in a crowded press room in some random hotel. It was in a truck with a big, glass trailer. It’s Vegas, obviously, so why not?

As Brian put it:

Driving down the Las Vegas Strip in a transparent box is a curious, extremely Vegas experience: puzzled tourists and confused CES attendees gawk from the sidewalks. Four of us are sitting in a makeshift living room with fuzzy white carpet: CEO Lora Haddock, Enzo Ferrari Drift DiCarlo (her fuzzy black-and-white Pomeranian), and a colleague, who holds Enzo in their lap. A four-foot-tall faux sex toy sits in a corner, swaying occasionally.

Last year, you might recall, the consumer tech show awarded Lora DiCarlo with an innovation award, but then took it back. They also banned the company from the show floor, stating it didn’t fit into a product category. Months later, they scored some funding and got an apology from the CES show runners.

Read the interview on Extra Crunch.

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SAN FRANCISCO, CALIFORNIA – OCTOBER 03: Lora DiCarlo Founder & CEO Lora Haddock speaks onstage during TechCrunch Disrupt San Francisco 2019 at Moscone Convention Center on October 03, 2019 in San Francisco, California. (Photo by Kimberly White/Getty Images for TechCrunch)

Around the horn

Extra Crunch

Over on Extra Crunch we published a bunch of great stuff this week, including stories about Ring and its evolving stance on security and privacy, how gig economy companies are trying to keep workers classified as independent contractors, and whether online privacy will make a comeback this year.

Here are a few more:

Head here if you aren’t a subscriber yet for a super-discounted first month.

#EquityPod

Alex Wilhelm was back on the mic this week with Danny Crichton, TechCrunch’s managing editor. Their docket included news of Lily AI’s $12.5 million Series A, Insight’s $1.1 billion acquisition of Armis Security, a round for a self-driving forklift startup called Vecna and SoftBank’s Vision Fund.

Listen to the episode here, and if you haven’t subscribed yet, you can do that here.

But that’s not the only Equity news I have for you. Alex wants to help you all get started each week with Equity Mondays. In his own words:

The Equity crew will put together a short, zero-bullshit episode designed to get your week started. What news did you miss over the weekend? What recent venture rounds do you need to know about? What’s ahead in the coming week? And what’s on our minds? That’s what Equity Monday will bring you each and every morning in about seven minutes.

The good news is it’ll show up in the Equity feed you already know and love. Have a listen to the first Monday edition here.

After delays, noise-adapting NuraLoop earbuds are coming soon and sound great

A few buffet mistakes aside, NuraLoop were the biggest disappointment of my 2019 CES. When the headphones showed up at the show as dummy units, it hurt my heart a little. The original Nuraphones made an appearance on my 2017 best of the year list, and the idea of a portable version I could take on long flights seemed almost too good to be true.

And for a full year, it was exactly that. Understandably, the Australian startup ran into a few roadblocks attempting to bring the product to market. It’s still a young company, even though its first gen product when over remarkably well. The noise-adapting headphones were extremely well thought out, right down to the package.

The hangup for their portable, in-ear counterparts is pretty surprising, to be honest. For much of the year, Nura just couldn’t crack the code of the cable, of all things. It’s a doubly odd sticking point, given how many of its competitors have ditched the cabling altogether. It should be noted up front, however, that the decision to keep things tethered is more pragmatic than aesthetic (honestly, it wouldn’t have been choice from a design standpoint).

As CEO Dragan Petrovic mentioned in a briefing at the show this week, the customer base for the original over-ears includes a pretty strong base of professional musicians, The cable includes a magnetic adapter for an analog headphone jack, so they can be used on stage monitors. There are a number of other times that still require capable — I’m writing this on a plane, for example. What am I supposed to do, just stare at Gemini Man?

There are other benefits, including a stated 16+ hours of battery life, without requiring a charging case. Also, you can wear them around your neck while not in use, if that’s a thing you like to do.

It’s never fun to have to delay a product, of course. In the year between CESes, Apple launched the AirPods Pro. The devices are two distinctly different approaches to the category, but Apple’s product does edge into NuraLoops’ territory, with a built-in fit check and great noise canceling. Again, different products with different audiences, but one has to wonder how many folks waiting for the NuraLoop pulled the trigger on the new AirPods, instead.

I’m happy to report that the sound quality on the NuraLoop is still extremely excellent. Sure, you lose the over-ear immersive bass effect without the ear cups, but the customized sound profile is still firmly in tact. The calibration is more or less the same, and when you’re done, you can swap between profiles to see how big a difference the customization makes (hint: it’s big).

The headphones are a bit on the bulky side. I’m definitely going to go exercise with them as soon as I get a review pair to see how well they stay put. The control scheme is clever — a touch well on the outside of each ear that perform a variety of different functions.

The year-long wait was less than ideal, but if you held out, you’ll probably find them worth it. The Nuraloop are another excellent product from the small Australian startup, which has managed to distinguish itself well in an overly crowded category. They run $200 and will start shipping in March.

CES 2020 coverage - TechCrunch

Waymo’s Anca Dragan and Ike Robotics CTO Jur van den Berg are coming to TC Sessions: Robotics+AI

The road to “solving” self-driving cars is riddled with challenges, from perception and decision making to figuring out the interaction between humans and robots.

Today we’re announcing that joining us at TC Sessions: Robotics+AI on March 3 at UC Berkeley are two experts who play important roles in the development and deployment of autonomous vehicle technology: Anca Dragan and Jur van den Berg.

Dragan is an assistant professor in UC Berkeley’s electrical engineering and computer sciences department, as well as a senior research scientist and consultant for Waymo, the former Google self-driving project that is now a business under Alphabet. She runs the InterACT Lab at UC Berkeley, which focuses on algorithms for human-robot interaction. Dragan also helped found, and serves on, the steering committee for the Berkeley AI Research Lab, and is co-PI of the Center for Human-Compatible AI.

Last year, Dragan was awarded the Presidential Early Career Award for Scientists and Engineers.

Van den Berg is the co-founder and CTO of Ike Robotics, a self-driving truck startup that last year raised $52 million in a Series A funding round led by Bain Capital  Ventures. Van den Berg has been part of the most important, secretive and even controversial companies in the autonomous vehicle technology industry. He was a senior researcher and developer in Apple’s special projects group, before jumping to self-driving trucks startup Otto. He became a senior autonomy engineer at Uber after the ride-hailing company acquired Otto .

All of this led to Ike, which was founded in 2018 with Nancy Sun and Alden Woodrow, who were also veterans of Apple, Google and Uber Advanced Technologies Group’s self-driving truck program.

TC Sessions: Robotics+AI returns to Berkeley on March 3. Make sure to grab your early-bird tickets today for $275 before prices go up by $100. Students, grab your tickets for just $50 here.

Startups, book a demo table right here and get in front of 1,000+ of Robotics/AI’s best and brightest — each table comes with four attendee tickets.

PayU acquires controlling stake in Indian credit business PaySense, to merge it with LazyPay

PayU is acquiring a controlling stake in fintech startup PaySense at a valuation of $185 million and plans to merge it with its credit business LazyPay as the nation’s largest payments processor aggressively expands its financial services offering.

The Prosus-owned payments giant said on Friday that it will pump $200 million — $65 million of which is being immediately invested — into the new enterprise in the form of equity capital over the next two years. PaySense, which employs about 240 people, has served more than 5.5 million consumers to date, a top executive said.

Prior to today’s announcement, PaySense had raised about $25.6 million from Nexus Venture Partners, and Jungle Ventures, among others. PayU became an investor in the five-year-old startup’s Series B financing round in 2018. Regulatory filings show that PaySense was valued at about $48.7 million then.

The merger will help PayU solidify its presence in the credit business and become one of the largest players, said Siddhartha Jajodia, Global Head of Credit at PayU, in an interview with TechCrunch. “It’s the largest merger of its kind in India.” he said. The combined entity is valued at $300 million, he said.

PaySense enables consumers to secure long-term credit for financing their new vehicle purchases and other expenses. Some of its offerings overlap with those of LazyPay, which primarily focuses on providing short-term credit to consumers to facilitate orders on food delivery platforms, e-commerce websites and other services. Its credit ranges between $210 and $7,030.

Cumulatively, the two services have disbursed over $280 million in credit to consumers, said Jajodia. He aims to take this to “a couple of billion dollars” in the next five years.

PaySense’s Prashanth Ranganathan and PayU’s Siddhartha Jajodia pose for a picture

As part of the deal, PaySense and LazyPay will build a common and shared technology infrastructure. But at least for the immediate future, LazyPay and PaySense will continue to be offered as separate services to consumers, explained Prashanth Ranganathan, founder and chief executive of PaySense, in an interview with TechCrunch.

“Overtime as the businesses get closer, we will make a call if a consolidation of brands is required. But for now, we will let consumers direct us,” added Ranganathan, who will serve as the chief executive of the combined entity.

There are about a billion debit cards in circulation in India today, but only about 20 million people have a credit card. (The official government figures show that about 50 million credit cards are active in India, but many individuals tend to have more than one card.)

This has meant that most Indians don’t have a traditional credit score, so they can’t secure loans and a range of other financial services from banks. Scores of startups in India today are attempting to address this opportunity by using other signals and alternative data — such as the kind of a smartphone a person has — to evaluate whether they are worthy of being granted some credit.

Digital lending is a $1 trillion opportunity (PDF) over the four and a half years, according to estimates from Boston Consulting Group.

PayU’s Jajodia said PaySense and LazyPay will likely explore building new offerings such as credit for small and medium businesses. He did not rule out exploring getting a stake in more fintech startups in the future. PayU has already invested north of half a billion dollars in its India business. Last year, it acquired Wibmo for $70 million.

“At PayU, our ambition is to build financial services using data and technology. Our first two legs have been payments [processing] and credit. We will continue to scale both of these businesses. Even this acquisition was about getting new capabilities and a strong management team. If we find more companies with some unique assets, we may look at them,” he said.

PayU leads the payments processing market in India. It competes with Bangalore-based RazorPay. In recent years, RazorPay has expanded to serve small businesses and enterprises. In November, it launched corporate credit cards and other services to strengthen its neo banking play.

Together with portfolio company AMP Robotics, Sidewalk Labs launches recycling pilot in Toronto

Nearly a year after China stopped accepting the world’s garbage, cities around the globe are wrestling with what to do with all of their waste. 

China’s new policy, which once accepted 70% of municipal solid waste generated around the world, means that cities like New York, London, and Paris need to find a new way to deal with their dumps. In Toronto, the municipal government is targeting a 70 percent reduction in the amount of recyclables and organics that are going into landfills or waste disposal by 2026.

The goal is made more difficult by one problem that cities have in common — multi-tenant residences (like apartments, condos, and coops) have a hard time organizing waste for recycling and landfills.

That’s why Sidewalk Labs and its portfolio company AMP Robotics are working on a pilot program that would provide residents of a single apartment building representing 250 units in Toronto with detailed information about their recycling habits.

“Multi-family buildings are notoriously hard for sorting. Single family has 60 to 70 percent diversion rates,” says Emily Kildow, Associate Director of Sustainability at Sidewalk Labs.

Working with the building and a waste hauler, Sidewalk Labs would transport the waste to a Canada Fibers material recovery facility where trash will be sorted by both Canada Fibers employees and AMP Robotics. Once the waste is categorized, sorted, and recorded Sidewalk will communicate with residents of the building about how they’re doing in their recycling efforts.

Sidewalk says that the tips will be communicated through email, an online portal, and signage throughout the building every two weeks over a three-month period.

For residents, it’s an opportunity to have a better handle on what they can and can’t recycle and Sidewalk Labs is betting that the information will help residents improve their habits. And for folks who don’t want their trash to be monitored and sorted, they can opt out of the program.

If that hypothesis is correct, it’s a technology that could potentially help other cities facing similar predicaments.

Sidewalk is also aware of the privacy concerns that could arise from having the trash monitored by its portfolio company, so in concert with the city, the company created a Responsible Data Use Assessment process and is assuring residents that any data collected will be de-identified and aggregated and only focus on the types of waste that’s being thrown out.

“The non-personal, aggregate data about the waste recorded by the materials recovery facility and AMP will be shared with Sidewalk Labs, residents in the buildings, and building owners,” the company said. “Once the pilot is complete, Sidewalk Labs will share a report to the public using the same aggregate and non-identifying data.”

Impossible adds ‘ground pork’ and ‘sausages’ to its lineup of plant-based foods

Impossible Foods made huge waves in the food industry when it came up with a way of isolating and using “heme” molecules from plants to mimic the blood found in animal meat (also comprised of heme), bringing a new depth of flavor to its vegetarian burger.

This week at CES, the company is presenting the next act in its mission to get the average consumer to switch to more sustainable, plant-based proteins: it unveiled its version of pork — specifically ground pork, which will be sold as a basic building block for cooking as well as in sausage form. It’s a critical step, given that pork is the most-eaten animal product in the world.

Impossible has set up shop in CES’s outdoor area, situated near a line of food trucks, and it will be cooking food for whoever wants to come by. (I tasted a selection of items made from the new product — a steamed bun, a meatball, some noodles and a lettuce wrap — and the resemblance is uncanny, and not bad at all.) And after today, the new product will be making its way first to selected Burger King restaurants in the US before appearing elsewhere.

It may sound a little far-fetched to see a food startup exhibiting and launching new products at a consumer electronics show, attended by 200,000 visitors who will likely by outnumbered by the number of TVs, computers, phones, and other electronic devices on display. Indeed, Impossible is the only food exhibitor this year.

But if you ask Pat Brown, the CEO and founder of Impossible Foods (pictured right, at the sunny CES stand in the cold wearing a hat), the company is in precisely the right place.

“To me it’s very natural to be at CES,” he said in an interview this week at the show. “The food system is the most important technology on earth. It is absolutely a technology, and an incredibly important one, even if it doesn’t get recognised as such. The use of animals as a food technology is the most destructive on earth. And when Impossible was founded, it was to address that issue. We recognised it as a technology problem.”

That is also how Impossible has positioned itself as a startup. Its emergence (it was founded 2011) dovetailed with an interesting shift in the world of tech. The number of startups were booming, fuelled by VC money and a boom in smartphones and broadband. At the same time, we were starting to see a new kind of startup emerging built on technology but disrupting a wide range of areas not traditionally associated with technology. Technology VCs, looking for more opportunities (and needing to invest increasingly larger funds), were opening themselves up to consider more of the latter opportunities.

Impossible has seized the moment. It has raised around $777 million to date from a list of investors more commonly associated with tech companies — they include Khosla, Temasek, Horizons Ventures, GV, and a host of celebrities — and Impossible is now estimated to be valued at around $4 billion. Brown told me it is currently more than doubling revenues annually.  

With his roots in academia, the idea of Brown (who has also done groundbreaking work in HIV research) founding and running a business is perhaps as left-field a development as a food company making the leap from commodity or packaged good business to tech. Before Impossible, Brown said that he had “zero interest” in becoming an entrepreneur: the bug that has bitten so many others at Stanford (where he was working prior to founding Impossible) had not bitten him.

“I had an awesome job where I followed my curiosity, working on problems that I found interesting and important with great colleagues,” he said.

That changed when he began to realise the scale of the problem resulting from the meat industry, which has led to a well-catalogued list of health, economic and environmental impacts (including increased greenhouse gas emissions and the removal of natural ecosystems to make way for farming land. “It is the most important and consequential issue for the future of the world, and so the solution has to be market-based,” he said. “The only way we can replace themes that are this destructive is by coming up with a better technology and competing.”

Pork is a necessary step in that strategy to compete. America, it seems, is all about beef and chicken when it comes to eating animals. But pigs and pork take the cake when you consider meat consumption globally, accounting for 38% of all meat production, with 47 pigs killed on average every second of every day. Asia, and specifically China, figure strongly in that demand. Consumption of pork in China has increased 140% since 1990, Impossible notes.

Pigs’ collective footprint in the world is also huge: there are 1.44 billion of them, and their collective biomass totals 175 kg, twice as much as the biomass of all wild terrestrial vertebrates, Impossible says.

Whether Impossible’s version of pork will be enough or just an incremental step is another question. Ground meat is not the same as creating structured proteins that mimic the whole-cuts that are common (probably more common) when it comes to how pork is typically cooked (ditto for chicken and beef and other meats).

That might likely require more capital and time to develop.

For now, Impossible is focused on building out its business on its own steam: it’s not entertaining any thoughts of selling up, or even of licensing out its IP for isolating and using soy leghemoglobin — the essential “blood” that sets its veggie proteins apart from other things on the market. (I think of licensing out that IP, as the equivalent of how a tech company might white label or create APIs for third parties to integrate its cool stuff into their services.)

That means there will be inevitable questions down the line about how Impossible will capitalise to meet demand for its products. Brown said that for now there are no plans for IPOs or to raise more externally, but pointed out that it would have no problem doing either.

Indeed, the company has built up an impressive bench of executives and other talent to meet those future scenarios. Earlier this year, Impossible hired Dennis Woodside — the former Dropbox, Google and Motorola star– as its first president. And its CFO, David Lee, joined from Zynga back in 2015, with a stint also in the mass-market food industry, having been at Del Monte prior to that.

Lee told me that the company has essentially been running itself as a public company internally in preparation for a time when it might follow in the footsteps of its biggest competitor, Beyond Meat, and go public.

“From a tech standpoint I’m absolutely confident that we can outperform what we get from animals in affordability, nutrition and deliciousness,” said Brown. “This entire industry is most destructive by far and has major responsibility in terms of climate and biodiversity, but it going to be history and we are going to replace it.”

CES 2020 coverage - TechCrunch

Mercedes-Benz and James Cameron built an Avatar-inspired car perfect for Pandora

Mercedes-Benz channeled the wild and imaginative world of James Cameron’s hit movie Avatar for its latest concept car — an electric autonomous vehicle covered in bionic flaps that aims to show how man and machine can merge and live responsibly in nature.

The concept car, appropriately named AVTR for Advanced Vehicle Transformation, was unveiled Monday night at CES 2020, the giant tech trade show held each year in Las Vegas. And like many concept cars, it’s outrageous and sleek and a little bit out there. Did we mention it has scales?

To be clear, this is a show car. This means the Vision AVTR won’t be available to buy now, next year or in five.  But as Ola Källenius, Daimler’s Chairman and the head of Mercedes-Benz noted Monday night, “show cars are here to spark our imagination, just like science fiction movies do.”

The idea is that these exercises conducted periodically by automakers not only spark creativity among engineers and designers, it can also telegraph where they’re headed. For Mercedes, the big message that Källenius was pushing Monday evening during his CES 2020 keynote was sustainability throughout the entire life cycle of a vehicle from the plant it is built in to materials used in the battery.

And this is indeed a goal within Mercedes-Benz.

The concept car has no steering wheel or pedals because it’s theoretically autonomous. The interior is completely vegan and it has a wide sweeping display that seems to cover and curve over the entire front dash. But that’s not the wild part.

Once sitting inside the user can control the vehicle by touching the center console. The car then comes to life and can recognize the driver’s pulse and breath. From here, the driver can lift there hand, turn their palm towards a projected light. The driver picks the projected icon they want, squeezes their hand shut and the off the car goes — again theoretically.

The vehicle is made of sustainability materials all the way down to the organic battery made from recyclable materials, which are compostable and recyclable.

The 33 multi-directionally movable surface elements on the back of the vehicle act as bionic flaps and are
reminiscent of scales of reptiles. Speaking of animals, the AVTR can move sideways by 30 degrees in a “crab movement” that gives it maximum agility.

Amazon partners with India’s second largest retailer to sell its goods online

Amazon is deepening its relationship with India’s second largest retail chain, Future Retail, as the e-commerce giant widens its footprint in one of its key overseas markets.

The two said on Monday that they have entered into a long-term business agreement to expand the reach of Future Retail’s stores through Amazon India marketplace. Future Retail operates more than 1,500 stores across India, but until now, it has not aggressively explored sales online.

As part of the agreement, Amazon India will become the authorized online sales channel for Future Retail stores including department and grocery stores chain Big Bazaar and lifestyle food superstore Foodhall, the two said. Additionally, India’s second largest retail chain, which attracts over 350 million footfalls a year across its network, will list its items on Amazon’s two-hour delivery platform Prime Now, which is currently operational in Delhi, Mumbai, Bengaluru, and Hyderabad.

The two giants said that they have agreed to focus on grocery — a category that Amazon has been working in India for awhile — general merchandize, fashion and apparel, and beauty products.

Future Retail will “augment its existing store-infrastructure” at its retail outlets for facilitating seamless packaging and pickup of products ordered online. The two have already launched this service across 22 stores and the early results have been “encouraging,” they said.

Future Consumer, which is also a part of Future Retail, has also formed a long-term partnership with Amazon to secure an online distribution through the Amazon India marketplace.

Future Consumer offers a wide-range of food, home care, personal care, and beauty products and has built a number of in-house brands such as Tasty Treat for snacks, Voom for fabric care, Dreamery for dairy, Karmiq for dry fruits, Mother Earth for organic staples, Kara for personal care, and CleanMate for household cleaning.

Kishore Biyani, Chairman and Managing Director of Future Retail, said the partnership will “allow us to build upon each other’s strengths in the physical and digital space so that customers benefit from the best services, products, assortment and price.”

The announcement today comes months after Amazon bought stakes in Future Retail’s Future Coupons — that effectively gave it a 3.58% stake in the retail chain group’s India business — and days after India’s largest retail chain, Reliance Retail, began its e-commerce venture.

“Future Retail’s national footprint of stores offering thousands of products across fashion, appliances, home, kitchen and grocery will now be available to millions of customers shopping on Amazon.in, in hours across 25+ cities,” said Amit Agarwal, SVP and Country Head of Amazon India, in a statement.

According to research firm Technopak Advisors, retail in India is estimated to be a $188 billion business in next three years, up from about $79 billion in 2018. Online sales still account for less than 5% of overall retail.

Samsung confirms February 11 event for its next flagship launch

The Saturday night before CES seems like a less than ideal time to drop some big smartphone news — but it appears Samsung’s hand was forced on this one. Granted, the smartphone giant has never been great about keeping big news under wraps, but this morning’s early release of a promo video through its official Vimeo channel was no doubt all the motivation it needed.

The company has just made the February 11 date officially official for the launch of its upcoming flagship. As for what the flagship will be called, well, that (among other things) leaves some room for speculation. Rumors have pointed to both the more traditional S11, along with the more fascinating jump to the S20.

Say hello to a whole new Galaxy. Unpacked on February 11, 2020 #SamsungEvent pic.twitter.com/ln1pqt2vu7

— Samsung Mobile (@SamsungMobile) January 5, 2020

I’ve collated a bunch of the rumors into an earlier post. The TLDR is even larger screens across the board, coupled with a bunch of camera upgrades and a healthy battery increase. The invite art, which matches the earlier the video, appears to confirm the existence of two separate devices, with different dimensions. That could well point to the reported followup to the Galaxy Fold. In additional to better reinforced folding (a follow up to last year’s issues), the device reportedly adopts a clamshell form factor, more akin to the newly announced Motorola Razr.

More info (and rumors) to come. As ever, we’ll be there (San Francisco) as the news breaks.

Reading Isaac Asimov at 100

In his recently published book “Astounding,” the author Alec Nevala-Lee brings American science fiction’s Golden Age back into focus by following four key figures: John W. Campbell, Robert A. Heinlein, L. Ron Hubbard — and Isaac Asimov, who officially turned 100 today (his exact birth date was unknown).

Nevala-Lee’s warts-and-all portrait paints Asimov — known to his fans as the Good Doctor — far more sympathetically than the genre’s other founding fathers. He’s charming and self-deprecating, generous to other writers and editors, a politically progressive thinker and a tireless defender of science and rationality.

But Nevala-Lee is clear about another aspect of Asimov’s story: He was someone who unapologetically groped women.

As recounted in “Astounding,” Judith Merrill said Asimov was known in his younger days as “the man with a hundred hands.” Harlan Ellison wrote, “Whenever we walked up the stairs with a young woman, I made sure to walk behind her so Isaac wouldn’t grab her tush.” And Frederik Pohl even recalled Asimov telling him, “It’s like the old saying. You get slapped a lot, but you get laid a lot too.”

And these aren’t the words of Asimov’s critics or detractors; they’re his friends and peers. Asimov’s habits were so well-known that in 1962, the chairman of the World Science Fiction Convention invited him to give a talk on “The Positive Power of Posterior Pinching.”

Foundation Hari Seldon

I’d already heard rumors about Asimov’s behavior back in 2014, when I wrote a birthday essay for BuzzFeed describing him as my favorite author. But I limited the piece to my personal relationship with his work — to the ways in which the Foundation and Robot books turned me into a lifelong science fiction fan, and how his wide-ranging nonfiction expanded my horizons.

Six years later, Asimov remains one of my favorites (alongside Ursula Le Guin, Samuel Delany and Philip K. Dick). And I’ve been happy to sing his praises when he’s in the news.

Still, it seems increasingly difficult to ignore the less admirable aspects of his personality. Fans, friends and other defenders might argue (as Ellison did) that “times were different,” that Asimov saw his behavior as “harmless” and that it’s a relatively minor blemish on his otherwise laudable career. But harassment at conventions is a serious problem, and if Asimov hadn’t died in 1992, it’s hard to imagine that he would have (or should have) escaped the #MeToo era unscathed.

Television critic Emily Nussbaum confronts some of these issues in her essay “Confessions of a Human Shield,” in which she asks, “What should we do with the art of terrible men?”

In the past, Nussbaum says she followed the conventional method of separating the art and the artist: “Decent people sometimes create bad art. Amoral people can and have created transcendent works. A cruel and selfish person — a criminal, even — might make something that was generous, life-giving, and humane.” But now, she admits that “the sociopath’s approach” no longer satisfies.

Robots of Dawn

That’s particularly true with Asimov, whose personality seems inseparable from his work. One of his strengths as a writer was his ability to be clear, conversational and personal. When you read one of his science books or essays, you come away feeling like your good friend Isaac has been explaining things to you in a way that you can finally understand. Even his science fiction is usually prefaced by autobiographical essays written in that same friendly voice.

So for me, it’s not simply a question of separating the art and the artist. It’s about acknowledging that so much of what’s admirable in Asimov’s writing seems to emanate from the man himself — and that, like or it not, he did more to shape my worldview than any other single writer, convincing me (as I put it six years ago) that “ideas matter and the universe can be explained” — while also acknowledging how indefensibly he treated women.

And in the end, it may be something simpler that poses the biggest threat to Asimov’s reputation — namely, the passage of time.

Science fiction has changed dramatically in the past decade, with a gratifyingly diverse group of writers reshaping the field. A new canon is forming, one that doesn’t center on Asimov, Heinlein and Arthur C. Clarke. As the writer John Scalzi put it, “Heinlein and Clarke and Asimov and etc were and are titans. But remember that the titans were overthrown by newer gods — and that those gods themselves were supplanted over time.”

Getty Images

This is probably how it should be. After all, Asimov’s work is very much of its era. Readers in 2020 and beyond will have an increasingly difficult time recognizing the future he depicted: a future without personal computers or the internet, and in which no one finds it remarkable that every single scientist, politician and person of importance is a man. (The major exception being the roboticist Susan Calvin, who’s still defined by her preeminence in a male-dominated field.)

Not that I think Asimov is about to fade into obscurity. In fact, Apple is producing a new TV+ series based on his Foundation stories, which take place over hundreds of years, depicting the efforts of a small group of scientists to rebuild civilization after the fall of the Galactic Empire.

So Asimov will probably be reentering the conversation soon. And despite my reservations, I’m glad.

Because for all the ways in which he might have missed major technological trends, and for all the ways in which his worldview was rooted in the 1930s and ’40s, Asimov still speaks to the challenges we face today. Not just in his famous Foundation and Robot stories, not just in the essays in which he defends science against religious fundamentalism, but also in “The Gods Themselves,” which I recently reread. Published back in 1972, the novel remains scarily prescient in its depiction of how humanity’s stupidity, greed and attachment to cheap energy can blind us to an existential threat.

And one of Asimov’s major subjects was the very passage of time that’s eroded his prominence in the field. His best work makes that it clear each generation will be eager to leave the last one behind, that it must face new problems with new ideas.

Despite his very real flaws as a writer and as a person, he encouraged us to search for those better ideas and work for that better future. That’s why his books will always have a place on my shelves. And that’s why I hope he’d be happy to give up some of that shelf space to writers who don’t look, think or write like him.

Tech’s biggest companies are worth ~$5T as 2019’s epic stock market run wraps

Look, this is the last post I’m writing in 2019 and I’m tired. But I can’t let the year close without taking stock of how well tech stocks did this year. It was bonkers.

So let’s mark the year’s conclusion with some notes for our future selves. Yes, we know that the Nasdaq has been setting new records and SaaS had a good year. But we need to dig in and get the numbers out so that we can look back and remember.

Let’s cap off this year the way it deserves to be remembered, as a kick-ass trip ’round the sun for your local, public technology company.

Keeping score

We’ll start with the indices that we care about:

  • The tech-heavy Nasdaq Composite rose 35% in 2019
  • The SaaS-heavy Bessemer Cloud Index rose 41% this year

Next, the highest-value U.S.-based technology companies:

  • Microsoft was up around 55% in 2019
  • Apple managed an 86% gain in the year
  • Not be left out, Facebook rose 57%
  • Amazon posted its own gain of 23% in 2019
  • Alphabet managed to grow by 29%, as well

Now let’s turn to some companies that we care about, even if they are smaller than the Big Five:

  • Salesforce? Up 19% this year
  • Adobe was up 46% in 2019, which was astounding
  • Intel picked up 28% in the year, making it no slouch
  • Even Oracle managed to gain 17% in 2019

And so on.

The technology industry’s epic run has been so strong that The Wall Street Journal noted this morning that, powered by tech companies, U.S. stocks “are poised for their best annual performance in six years.” The Journal highlighted the performance of Apple and Microsoft in particular for helping drive the boom. I wonder why.

How long will we live in the neighborhood of Nasdaq 9,000? How long can two tech companies be worth more than $1 trillion at the same time? How long can the biggest tech companies be worth a combined $4.93 trillion (I remember when $3 trillion for the Big Five was news, and I recall when the group reach a collective value of $4 trillion).1

But the worst trade in recent years has been the pessimists’ gambit. No matter what, stocks have kept going up, short-term hiccoughs and other missteps aside.

For nearly everyone, that is. While tech stocks in general did very well, some names that we all know did not. Let’s close on those reminders that a rising tide lifts only most boats.

2019 naughty list

Several of the most lackluster public tech companies were 2019 technology IPOs, interestingly enough. Who didn’t do well? Uber earns a spot on the naughty list for not only being underwater from its IPO price, but also from its final private valuations. And as you guessed, Lyft is down from its IPO price as well, which is not good.

Some 2019 IPOs did well in the middle of the year, but fell a little flat as the year came to a close. Pinterest, Beyond Meat and Zoom meet that criteria, for example. And some SaaS companies struggled, even if we think they will reach $1 billion in revenue in time.

But it was mostly a party. The public markets were good, and tech stocks were great. This helped create another 100+ unicorns in the year.

Such was 2019. On to 2020!

  1. In time, those numbers will look small. But sitting here on December 31, 2019, they appear huge and towering and, it must be said, somewhat perilously stacked.

India’s richest man is ready to take on Amazon and Walmart’s Flipkart

As Amazon and Walmart-owned Flipkart spend billions to make a dent in India’s retail market and reel from recent regulatory hurdles, the two companies have stumbled upon a new challenge: Mukesh Ambani, Asia’s richest man.

Reliance Retail and Reliance Jio, two subsidiaries of Ambani’s Reliance Industries, said they have soft launched JioMart, their e-commerce venture, in parts of the state of Maharashtra — Mumbai, Kalyan and Thane.

The e-commerce venture, which is being marketed as “Desh Ki Nayi Dukaan” (Hindi for new store for the country), currently offers a catalog of 50,000 grocery items and promises “free and express delivery.”

In an email to employees, accessed by TechCrunch, the two aforementioned subsidiaries that are working together on the e-commerce venture, said they plan to expand the service to many parts of India in coming months. A Reliance spokesperson declined to comment.

The soft launch this week comes months after Ambani, who runs Reliance Industries — India’s largest industrial house — said that he wants to service tens of millions of retailers and store owners across the country.

If there is anyone in India who is positioned to compete with heavily-backed Amazon and Walmart, it’s him. Reliance Retail, which was founded in 2006, is the largest retailer in the country by revenue. It serves more than 3.5 million customers each week through its nearly 10,000 physical stores in more than 6,500 Indian cities and towns.

Reliance Jio is the largest telecom operator in India with more than 350 million subscribers. The 4G-only carrier, which launched commercial operations in the second half of 2016, disrupted the incumbent telecom operation in the country by offering bulk of data and voice calls at little to no charge for an extended period of time.

In a speech in January, Ambani, an ally of India’s Prime Minister Narendra Modi, invoked Mahatama Gandhi and said like Gandhi, who led a movement against political colonization of India, “we have to collectively launch a new movement against data colonization. For India to succeed in this data-driven revolution, we will have to migrate the control and ownership of Indian data back to India – in other words, Indian wealth back to every Indian.” Modi was among the attendees.

E-commerce still accounts for just a fraction of total retail sales in India. India’s retail market is estimated to grow to $188 billion in next four years, up from about $79 billion last year, according to research firm Technopak Advisors.

In an interview earlier this year, Amit Agarwal, manager of Amazon India, said, “one thing to keep in mind is that e-commerce is a very, very small portion of total retail consumption in India, probably less than 3%.”

To make their businesses more appealing to Indians, both Amazon and Flipkart have expanded their offerings and entered new businesses. Both of the platforms are working on food retail, for instance. Amazon has bought stakes in a number of retailers in India, including in India’s second largest retail chain Future Retail’s Future Coupons, Indian supermarket chain More, and department store chain Shopper’s Stop.

Flipkart has invested in a number of logistic startups including ShadowFax and Ninjacart. Amazon India was also in talks with Ninjacart to acquire some stake in the Bangalore-based startup, people familiar with the matter said.

More to follow…

Indian tech startups raised a record $14.5B in 2019

Indian tech startups have never had it so good.

Local tech startups in the nation raised $14.5 billion in 2019, beating their previous best of $10.5 billion last year, according to research firm Tracxn .

Tech startups in India this year participated in 1,185 financing rounds — 459 of those were Series A or later rounds — from 817 investors.

Early stage startups — those participating in angel or pre-Series A financing round — raised $6.9 billion this year, easily surpassing last year’s $3.3 billion figure, according to a report by venture debt firm InnoVen Capital.

According to InnoVen’s report, early stage startups that have typically struggled to attract investors saw a 22% year-over-year increase in the number of financing deals they took part in this year. Cumulatively, at $2.6 million, their valuation also increased by 15% from last year.

Also in 2019, 128 startups in India got acquired, four got publicly listed, and nine became unicorns. This year, Indian tech startups also attracted a record number of international investors, according to Tracxn.

This year’s fundraise further moves the nation’s burgeoning startup space on a path of steady growth.

Since 2016, when tech startups accumulated just $4.3 billion — down from $7.9 billion the year before — flow of capital has increased significantly in the ecosystem. In 2017, Indian startups raised $10.4 billion, per Tracxn.

“The decade has seen an impressive 25x growth from a tiny $550 million in 2010 to $14.5 billion in 2019 in terms of the total funding raised by the startups,” said Tracxn.

What’s equally promising about Indian startups is the challenges they are beginning to tackle today, said Dev Khare, a partner at VC fund Lightspeed Venture Partners, in a recent interview to TechCrunch.

In 2014 and 2015, startups were largely focused on building e-commerce solutions and replicating ideas that worked in Western markets. But today, they are tackling a wide-range of categories and opportunities and building some solutions that have not been attempted in any other market, he said.

Tracxn’s analysis found that lodging startups raised about $1.7 billion this year — thanks to Oyo alone bagging $1.5 billion, followed by logistics startups such as Elastic Run, Delhivery, and Ecom Express that secured $641 million.

176 horizontal marketplaces, more than 150 education learning apps, over 160 fintech startups, over 120 trucking marketplaces, 82 ride-hailing services, 42 insurance platforms, 33 used car listing providers, and 13 startups that are helping businesses and individuals access working capital secured funding this year. Fintech startups alone raised $3.2 billion this year, more than startups operating in any other category, Tracxn told TechCrunch.

The investors

Sequoia Capital, with more than 50 investments — or co-investments — was the most active venture capital fund for Indian tech startups this year. (Rajan Anandan, former executive in charge of Google’s business in India and Southeast Asia, joined Sequoia Capital India as a managing director in April.) Accel, Tiger Global Management, Blume Ventures, and Chiratae Ventures were the other top four VCs.

Steadview Capital, with nine investments in startups including ride-hailing service Ola, education app Unacademy, and fintech startup BharatPe, led the way among private equity funds. General Atlantic, which invested in NoBroker and recently turned profitable edtech startup Byju’s, invested in four startups. FMO, Sabre Partners India, and CDC Group each invested in three startups.

Venture Catalysts, with over 40 investments including in HomeCapital and Blowhorn, was the top accelerator or incubator in India this year. Y Combinator, with over 25 investments, Sequoia Capital’s Surge, Axilor Ventures, and Techstars were also very active this year.

Indian tech startups also attracted a number of direct investments from top corporates and banks this year. Goldman Sachs, which earlier this month invested in fintech startup ZestMoney, overall made eight investments this year. Among others, Facebook made its first investment in an Indian startup — social-commerce firm Meesho and Twitter led a $100 million financing round in local social networking app ShareChat.

Snapchat will launch Bitmoji TV, a personalized cartoon show

Snapchat’s most popular yet under-exploited feature is finally getting the spotlight in 2020. Starting in February with a global release, your customizable Bitmoji avatar will become the star of a full-motion cartoon series called Bitmoji TV. It’s a massive evolution for Bitmoji beyond the chat stickers and comic strip-style Stories where they were being squandered to date.

Creating original in-house shows for its Discover section that can’t be copied could help Snapchat differentiate from the plethora of short-form video platforms out there ranging from YouTube to Facebook Watch to TikTok. Bitmoji TV could also up the quality of Discover, which still feels like a tabloid magazine rack full of scantly clad women, gross-out imagery, and other shocking content merely meant to catch the eye and draw a click.

With Bitmoji TV, your avatar and those of your friends will appear in regularly-scheduled adventures ranging from playing the crew of Star Treky spaceship to being secret agents to falling in love with robots or becoming zombies. The trailer Snapchat released previews an animation style reminiscent of Netflix’s Big Mouth.

TechCrunch asked Snap for more details, including how long episodes will be, how often they’ll be released, whether they’ll include ads, and if the company acquired anyone or brought on famous talent to produce the series. A Snap spokesperson declined to provide more details, but sent over this statement: “Bitmoji TV isn’t available in your network yet, but stay tuned for the global premiere soon!”

The Snapchat Show page for Bitmoji TV notes it is coming in February 2020. Users can visit here on mobile to subscribe to Bitmoji TV so it shows up prominently on their Discover page, or turn on notifications about its new content.

Snap realizes Bitmoji’s value

Snap has had a tough few years as many of its core features have been ruthlessly copied by the Facebook family of apps. Instagram Stories killed Snap’s growth for years and effectively stole the broadcast medium from its inventor. Facebook also ramped up it augmented reality selfie filters, added more ephemeral messaging features, and launched Watch as a competitor to Snapchat Discover.

Two years ago I wrote that Facebook was crazy not to be competing with Bitmoji too. Six months later we were first to report Facebook Avatars was in the works, and this year they launched as Messenger chat stickers in Australia with plans for a global release in 2019 or early 2020. But Facebook’s slow movement here, Google’s half-assed entry, and Twitter’s lack of an attempt have given Snapchat’s Bitmoji a massive headstart. And now Snap is finally leveraging it.

“TV” is actually a return to Bitmoji’s roots. The startup Bitstrips originally offered an app for customizing the face, hair, clothes, and more of your avatar and then creating comic strips for them to appear in. Snap acquired Bitstrips back in 2016 for just $64.2 million — a steal not far off from Facebook snatching Instagram for under a billion. The standalone Bitmoji app blew up as soon as Snapchat began offering the avatars as chat stickers. It had over 330 million downloads as of April according to Sensor Tower despite Snapchat now letting you create your avatar in its main app.

Eventually, Snap began expanding Bitmoji’s uses. In 2017 Bitmoji went 3D and you could start overlaying them as augmented reality characters on your Snaps. The next year Snap improved their graphics, then launched the Snap Kit developer platform and Bitmoji Kit. This allows apps to build atop Snapchat login and use your Bitmoji as a profile pic. Soon they were appearing as Fitbit smart watch faces, alongside your Venmo transaction, and on Snapchat-sold merchandise from t-shirts to mugs. It’s part of a wise strategy to beat copycats by allowing allies to use real thing rather than building their own knock-off. That’s fueled the “Snapback” comeback which has seen Snap’s share price climb out of the gutter at $5.79 at the start of 2019 to $16.09 now.

One of Snap smartest innovations was Bitmoji Stories — the ancestor to Bitmoji TV. These daily Stories let you tap frame-by-frame through short comic strip-style interactions starring your avatar. Occasionally Bitmoji Stories would include rudimentary animation, but most frames were still images with text bubbles. Bitmoji could once again drive a narrative, rather than just being a communication tool. Still, they seem underutilized.

In 2019, Snapchat wised up. Bitmoji have become nearly ubiquitous amongst teens and Snapchat’s 210 million daily users. They’re the Google or Kleenex of cartoonish personalized avatars. Their goofy nature is also a perfect fit for Snapchat, and a reason they’re tough for stiffer and older tech giants to convincingly copy.

In April, Snap announced its new games platform inside its messaging feature that let you play as your Bitmoji against friends’ avatars in games ranging from Mario Party ripoff Bitmoji Party to tennis, shoot-em ups, and cooking competitions. Snap injects ads into the games, making Bitmoji key to its efforts to monetize its central messaging use case. Last month it launched custom and branded clothing for Bitmoji, which could open opportunities to earn money selling premium outfits or showing off brand sponsorships.

To truly take advantage of Bitmoji’s unique popularity, though, Snap needed to build longer-form experiences with the avatars at the center that . Stickers and Stories and games were fun, but none felt like must-see content. With Bitmoji TV, Snap may have found a way to get users to drag their friends into the app. Since everyone sees their own Bitmoji as the star, the cartoons could be more compelling then ones with impersonal characters you might find elsewhere around the web.

But Bitmoji TV’s success will depend largely on the quality of the writing. If your avatar is constantly getting into funny, meme-worthy situations, you’ll keep coming back to watch. But Snap’s teen audience has a keen nose for inauthentic bullsh*t. If the Shows feel forced, too childish, or boring, Bitmoji TV will flop. Snap would be savvy to invest in great Hollywood talent to produce the episodes.

High quality Bitmoji TV shorts could rescue Snapchat Discover from its own mediocrity. There are a few strong brands like ESPN SportsCenter on the platform, and Snap has several original Shows with over 25 million unique viewers. It’s also greenlit additional seasons of Shows like Dead Girls Detective Agency and new biopic clips from Serena Williams and Arnold Schwarzenegger. Still, a scroll through the Discover and Shows sections reveals plenty of trashy clickbait that surely scares away premium advertisers.

Bitmoji TV could offer video that’s not only fun and snackable, but out of reach for competitors who don’t have a scaled avatar platform of their own. As with the recent launch of Snapchat Cameos, the company has realized that the most addictive experiences center on its users’ own faces. Snapchat turned the selfie into the future of communication. Bitmoji TV could make an animated recreation of your selfie into the future of content.

Wikimedia Foundation expresses deep concerns about India’s proposed intermediary liability rules

Wikimedia Foundation, the nonprofit group that operates Wikipedia and a number of other projects, has urged the Indian government to rethink the proposed changes to the nation’s intermediary liability rules that would affect swathes of companies and the way more than half a billion people access information online.

The organization has also urged the Indian government to make public the latest proposed changes to the intermediary rules so that all stakeholders have a chance to participate in a “robust and informed debate about how the internet should be governed in India.”

India proposed changes to intermediary rules (PDF) in late December last year and it is expected to approve it in the coming months. Under the proposal, the Indian Ministry of Electronics and IT requires “intermediary” apps — which as per its definition, includes any service with more than 5 million users — to set up a local office and have a senior executive in the nation who can be held responsible for any legal issues.

Amanda Keton, general counsel of Wikimedia Foundation, said on Thursday that India’s proposed changes to the intermediary rules may have serious impact on Wikipedia’s business — as it operates an open editing model that relies on users to contribute new articles and make changes to existing articles on Wikipedia — as well as those of other organizations.

The rules may also create a “significant financial burden” for nonprofit technology organizations and impede free expression rights for internet users in India, she said. Wikimedia Foundation conveyed its concerns to Ravi Shankar Prasad, the Minister of Electronics and IT in India. The company also published the letter on its blog for the world to see.

India’s latest changes to intermediary rules, which have been drafted to make the internet a safer experience for local residents, also require intermediaries to deploy automated tools “for proactively identifying and removing or disabling public access to unlawful information or content.”

The proposed changes have raised concerns for many. In a joint letter (PDF) earlier this year, Mozilla, Microsoft’s GitHub and Wikimedia had cautioned the Indian government that requiring intermediaries to proactively purge their platforms of unlawful content “would upend the careful balance set out in the existing law which places liability on the bad actors who engage in illegal activities, and only holds companies accountable when they know of such acts.”

The groups also cautioned that drafted measures “would significantly expand surveillance requirements on internet services.” Several trade bodies in India, that represent a number of major firms including Google and Facebook, have also suggested major changes to the proposal.

In the open letter published today, Wikimedia’s Keton reiterated several of those concerns, adding that “neither participants in the consultation nor the public have seen a new draft of these rules since [last year].” She also requested the government to redefine, how it has in another recently proposed set of rules, the way it classifies an entity as an intermediary as the current version seems to have far-reaching scope.

India is the fifth largest market for Wikipedia — more than 771 million users from the country visited the online encyclopaedia last month. Wikimedia has run several programs in India to invite people to expand the online encyclopaedia in Indic languages.

Keton urged the government to rethink the requirement to bring “traceability” on online communication, as doing so would interfere with the ability of Wikipedia contributors to freely participate in the project. (On the point of traceability, WhatsApp has said complying to such requirement would compromise encryption for every user.)

Chinese apps are losing their hold on India to local developers

Apps from Chinese developers have been gaining popularity on Indian app stores for sometime. Last year, as many as 44 of the top 100 Android apps in India were developed by Chinese firms.

But things have changed this year as local developers put on a fight. According to app analytics and marketing firm AppsFlyer, Indian apps as a whole have recaptured their original standing.

41% of top 200 apps in Indian editions of Google’s Play Store and Apple’s App Store in Q2 and Q3 this year were developed by Indian developers and local firms, up from 38% last year, the report said. Data from App Annie, another research firm, corroborates the claim.

“This uptick happened chiefly at the expense of Chinese apps, which fell from their lead position to 38% from 43% in 2018. Altogether, Chinese and Indian apps make up almost four-fifths (79%) of the list,” the report said.

The shift comes as scores of Indian firms have launched payments, gaming, news, and entertainment apps in the last year and a half, said AppsFlyer, which analyzed 6.5 billion installs in the second and third quarters of this year.

But Chinese developers are not giving up and continue to maintain an “impressive” fight in each category, the report said.

India — which is home to more than 450 million smartphone users and maintains relatively lax laws to support an open market — has naturally emerged as an attractive battleground for developers worldwide.

Many Chinese firms including Xiaomi and ByteDance count India as one of their largest markets. TikTok app has amassed over 200 million users in India, for instance. Xiaomi, which leads the Indian smartphone market, is quickly building a portfolio of services for users in India. It launched a lending app in the country earlier this month.

Gaining traction among first time internet users, most of whom have lower financial capacity, can prove challenging. Those developing travel apps had to spend about 170 Indian rupees ($2.4) for each install, for instance. Food and drink app makers spent 138 Indian rupees ($1.9) per install during the aforementioned period, while games cost 13.5 Indian rupees.

Data from @AppsFlyer state of App Marketing 2019 India – key highights:
– Indian Apps claimed more installs in 2019 vs chinese Apps
– Apps in finance category spent the most in non-organic install (easy to guess which ones)
– As a result, finance Apps saw 59% uninstall on Day 1 pic.twitter.com/ROADpk9VQK

— Deepak Abbot (@deepakabbot) December 23, 2019

Despite the marketing spends, retention rate for these apps was 23.4% on day 1, a figure that plummeted to 2.6% by the end of the month. (This is still an improvement over retention rates of 22.8% on day 1, and 2.3% on day 30 last year.)

DJI patents an off-road rover with a stabilized camera on top

DJI is easily the leading brand when it comes to camera drones, but few companies have even attempted a ground-based mobile camera platform. The company may be moving in that direction, though, if this patent for a small off-road vehicle with a stabilized camera is any indication.

The Chinese patent, first noted by DroneDJ, shows a rather serious-looking vehicle platform with chunky tires and a stabilized camera gimbal. As you can see in the image above, the camera mount is protected against shock by springs and pneumatics, which would no doubt react actively to sudden movements.

The image is no simple sketch like those you sometimes see of notional products and “just in case” patents — this looks like a fleshed-out mechanical drawing of a real device. Of course, that doesn’t mean it’s coming to market at all, let alone any time soon. But it does suggest that DJI’s engineers have dedicated real time and effort to making this thing a reality.

Why have a “drone” on the ground when there are perfectly good ones for the air? Battery life, for one. Drones can only be airborne for a short time, even less when they’re carrying decent cameras and lenses. A ground-based drone could operate for far longer — though naturally from a rather lower vantage.

Perhaps more importantly, however, a wheeled drone makes sense in places where an aerial one doesn’t. Do you really want to fly a drone through narrow hallways in security sweeps, or in your own home? And what about areas where you might encounter people? It would be better not to have to land and take off constantly for safety’s sake.

It’s likely that DJI has done its homework and knows that there are plenty of niches to which they could extend if they diversified their offerings a bit. And like so many situations where drones have become commonplace, we’ll all think of these robot-powered industries as obvious in retrospect. For instance, the winner of our Startup Battlefield at Disrupt Berlin, Scaled Robotics, which does painstaking automated inspections of construction sites.

In fact DJI already makes a ground-based robotic platform, the RoboMaster S1. This is more of an educational toy, but may have served as a test bed for technologies the company hopes to apply elsewhere.

Whether this little vehicle ever sees the light of day or not, it does make one think seriously about the possibility of a wheeled camera platform doing serious work around the home or office.

Who will the winners be in the future of fintech?

Nik Milanovic
Contributor

Nik Milanovic is a fintech and financial inclusion enthusiast, with a decade of work across mobile payments, online lending, credit and microfinance.

So what happens when fintech ‘brings it all together’? In a world where people access their financial services through one universal hub, which companies are the best-positioned to win? When open data and protocols become the norm, what business models are set to capitalize on the resulting rush of innovation, and which will become the key back-end and front-end products underpinning finance in the 2020s?

It’s hard to make forward-looking predictions that weather a decade well when talking about the fortunes of individual companies. Still, even if these companies run into operating headwinds, the rationale for their success will be a theme we see play out over the next ten years.

Here are five companies positioned to win the 2020s in fintech:

1. Plaid

In 2014, I met Zach Perret and Carl Tremblay when they reached out to pitch Funding Circle on using Plaid to underwrite small and medium businesses with banking data. At the time, I couldn’t understand how a bank account API was a valuable business.

Plaid’s Series C round in 2018 came with a valuation of $2.65 billion, which caught a lot of people in fintech off-guard. The company, which had been modestly building financial services APIs since 2012, recently crossed the threshold of 10 billion transactions processed since inception.

For those unfamiliar with Plaid’s business model, it operates as the data exchange and API layer that ties financial products together. If you’ve ever paid someone on Venmo or opened a Coinbase account, chances are you linked your bank account through Plaid. It’s possible in 2020 to build a range of powerful financial products because fintechs can pull in robust data through aggregator services like Plaid, so a bet on the fintech industry is, in a sense, a derivative bet on Plaid.

Those 10 billion transactions, meanwhile, have helped Plaid understand the people on its’ clients fintech platforms. This gives it the data to build more value-added services on top of its transactions conduit, such as identity verification, underwriting, brokerage, digital wallets… the company has also grown at a breakneck pace, announcing recent expansions into the UK, France, Spain, and Ireland.

As banks, entrepreneurs, and everyone in-between build more tailored financial products on top of open data, those products will operate on top of secure, high-fidelity aggregators like Plaid.

The biggest unknown for aggregators like Plaid is whether any county debuts a universal, open-source financial services API that puts pricing pressure on a private version. However, this looks like a vanishingly remote possibility given high consumer standards for data security and Plaid’s value-added services.

2. Stripe

Predicting Stripe’s success is the equivalent of ‘buying high,’ but it is hard to argue against Stripe’s pole position over the next fintech decade. Stripe is a global payments processor that creates infrastructure for online financial transactions. What that means is: Stripe enables anyone to accept and make payments online. The payment protocol is so efficient that it’s won over the purchase processing business of companies like Target, Shopify, Salesforce, Lyft, and Oxfam.

Processing the world’s payments is a lucrative business, and one that benefits from the joint tailwinds of the growth of ecommerce and the growth of card networks like Visa and Mastercard. As long as more companies look to accept payment for services in some digital form, whether online or by phone, Stripe is well-positioned to be the intermediary.

The company’s success has allowed Stripe to branch into other services like Stripe Capital to lend directly to ecommerce companies based off their cashflow, or the Stripe Atlas turnkey tool for forming a new business entirely. Similar to Plaid, Stripe has a data network effects business, which means that as it collects more data by virtue of its transaction-processing business, it can leverage this core competency to launch more products associated with that data.

The biggest unknown for Stripe’s prospects is whether open-source payment processing technology gets developed in a way that puts price pressure on Stripe’s margins. Proponents of crypto as a medium of exchange predict that decentralized currencies could have such low costs that vendors are incentivized to switch to them to save on the fees of payment networks. However, in such an event Stripe could easily be a mercenary, and convert its processing business into a free product that underpins many other more lucrative services layered on-top (similar to the free trading transition brought about by Robinhood).

Boeing’s Starliner crew spacecraft will attempt a landing on Sunday

Boeing launched its Starliner CST-100 commercial crew spacecraft to the International Space Station (ISS) for the first time on Friday morning in an uncrewed test, and while an error with the onboard mission clock meant that the Starliner didn’t reach its target orbit as intended and subsequently didn’t have enough fuel on board to actually meet up and dock with the ISS, it’s still doing as much testing as it can to complete other mission objectives. One of those objectives is landing the Starliner spacecraft, and Boeing and NASA have scheduled that landing for Sunday at 7:57 AM EST (4:57 AM PST).

The landing will take place at White Sands, New Mexico, and will involve a controlled de-orbit and descent of the Starliner capsule. The spacecraft will begin its de-orbit burn at 7:23 AM EST if all goes to plan, and NASA will begin a live broadcast of the entire landing attempt starting at 6:45 AM EST (3:45 AM PST) on Sunday morning if you want to tune in to the stream embedded below.

Boeing and NASA held a press conference today to provide updates about the mission status after the unplanned mission timer incident on Friday. Boeing SVP of Space and Launch Jim Chilton said during the conference that the team has managed to successfully run a number of its test objective with the mission despite the setback, including extending the docking system to see that it performs as expected, and testing the abort system on board the crew capsule.

The landing is another key test, and could even be more crucial to crew safety in terms of its execution. Both NASA and Boeing have said that were astronauts on board the Starliner during this mission, the mission clock timer incident that occurred would not have put them in any actual danger at any time. Problems with the automated landing sequence would be a different story, potentially – though astronauts are trained to do everything manually in case of any issues encountered while they’re actually in the spacecraft.

Should anything warrant skipping the first attempt at landing tomorrow, NASA and Boeing have a back-up landing opportunity about eight hours after the first. Tune in tomorrow to see how this spacecraft, which will still hopefully carry its first human passengers next year, does with its landing maneuvers.

A highly subjective list of some of this year’s notable young startups

I’m not a venture capitalist. I don’t play one on TV, either (though I might if anyone asked!). Still, after many years of covering startups, including as an editor with TechCrunch, in a daily newsletter I publish called StrictlyVC, and at numerous media outlets before that (anyone remember the early years of Red Herring magazine?), there have always been startups that stand out a little more than others.

This is not to say that what I find intriguing will be a predictor of success. A lot of great ideas never find a broad or lucrative base customer base. Some perish owing to mismanagement or misadventure(!) or good-old competition. Note, too, that what I’m about to feature is a small sampling of a much broader pool of companies I’d include if I had all the time in the world and you did, too.

I’m also keeping the focus on fairly young companies — they’re mostly only seed-funded at this point — that represent a wide variety of industries and markets and that (with one exception) disclosed their funding in the last couple of months, as did many hundreds of other startups.

What is interesting, and not intentional, is how few of these picks are based in the Bay Area — an amazing region in many ways but also one that’s lost its earlier stranglehold on talent and great ideas.

Herewith, 10 recent standouts, at least to this particular brain.


Xilis. This Durham, North Carolina company just yesterday announced a $3 million seed round to continue working on its microfluidic organoid technology. What’s that mean? In this case, the company says its tech creates 10,000 micro tumors from a single cancer biopsy, then tests which cancer treatments will or won’t work for a patient — presumably expediting the time it takes to find the most effective treatment for that person. Can it cure cancer? Who knows, but the company was founded by Duke professors who are medical oncologists. They say that they’re also finding success already in clinical trials. My colleague Jon wrote about the company here.


Terradepth. It’s a 16-month-old, Austin, Tex.-based company that was founded by two ex-Navy SEALs and aims to use autonomous submersible vehicles to provide access to deep-ocean information on a data-as-a-service basis, which I’d guess plenty of industries could use. The company just raised $8 million in funding led by Seagate Technology, the hardware company, and it has number of competitors, but I like this idea directionally. Let’s face it —  oceans do cover roughly 70 percent of the Earth’s surface. Darrell wrote about this one earlier this week.


Apostrophe, an eight-year-old, Oakland, Ca.-based dermatology telemedicine startup that makes it easier to receive medications and treatments over the phone, announced $6 million in seed funding earlier this month led by SignalFire, with participation from FJ Labs. There are at least half a dozen other telemedicine companies focused on dermatology. I don’t pretend to know which is best. But given that skin is the largest organ we humans have, combined with fact that ultraviolet radiation reaching Earth’s surface has steadily increased in recent decades owing to decreasing levels of stratospheric ozone, enabling people to get examined as quickly and conveniently as possible just makes sense. (By the way, if you’re wondering how Apostrophe specifically makes money, it also has a mail-order pharmacy.) Jordan wrote about Apostrophe here.


Conservation Labs. This one is a 3.5-year-old, Pittsburgh, Pa.-based startup whose tech takes measurements from a building’s pipes, then translates those signals to assess water flow estimates and detect leaks. The company has raised $1.7 million in seed funding, including from the Amazon Alexa Fund, and I like that it’s good for the world, good for building owners, and tackling a very big industry. As the company itself is quick to note, there are more than three trillion gallons of water wasted each year in the U.S alone, costing the country $70 billion.


Aircam. People are both vain and impatient, two reasons why on a very superficial level, I like this roughly two-year-old, Santa Monica, Ca.-based startup that allows anyone to get instant access to pictures taken by professional photographers at weddings, parties and other events. That its founders are brothers who sold their last company to Apple inspires some confidence, too. So far, the company has raised $6.5 million in seed funding led by Upfront Ventures, with participation from Comcast Ventures, and Anthony wrote about it last month.


BuildOps. This is a 1.5-year-old, Santa Monica, Ca.-based maker of a field service and business process software platform for small and mid-size subcontractors working in commercial real estate that has raised $5.8 million across two tranches of seed funding, including a round that closed this fall. BuildOps is one of an astonishing number of startups trying to take a bite out of the commercial construction industry, on which hundreds of billions of dollars are spent each year in the U.S. alone. It’s also targeting a segment of the market where there is no go-to player yet. While lots of architects, property owners, and large general contractors are already reliant on different software packages, the small and medium-size contractors and subcontractors who work on buildings typically still operate in distinct silos, and they — along with building owners — could benefit greatly from software that brings together the overall picture so unnecessary missteps, miscommunications, and expenses can be avoided. Jon had covered this one, too.


Medinas is a two-year-old, Berkeley, Ca.-based marketplace for reusable medical equipment, which is right now largely sold directly by equipment companies that largely just list what they’re looking to sell in what seems like an awfully clunky approach. Medina instead works with dozens of medical centers to assess what they have, what they need, and what they need to ditch, then handles all aspects of the sale, from early inventory checks to shipment and reinstallation. It’s a surprisingly big market (almost $38 billion, according to one market research group), but I also like that it’s helping developing regions in need of equipment, as Crunchbase News noted when it wrote about the company in October. Think CT scanners sent off to Cambodia, ventilators shipped to India, and defibrillators packed off to Mexico. Medinas raised $5 million in seed funding a couple of months ago, led by NFX.


Mable. This year-old, Boston-based wholesale commerce platform is trying to help small food and grocery businesses stock their shelves with local and emerging brands, which sounds kind of quaint — even boring — but is actually a huge opportunity as envisioned by Arik Keller, whose last company was acquired by Facebook. Small to medium-size grocery stores, brands, and distributors are part of a $650 billion market that comprises roughly 150,000 independently owned grocery and convenience stores — and most of them apparently buy goods and restock their shelves through phone calls, emails and texts. Keller, a former PayPal product director who later bought a grocery store, realized that if he can persuade these business owners to use a mobile app that helps them manage their procurement, he can make their lives easier, as well as more defensible against companies like Amazon and Walmart. As for Mable’s revenue, some grocers pay a monthly fee for the service; in other cases, Mable is getting a cut from brands like new specialty food companies that it’s helping find their way into new locations. So far, the company has raised $3.1 million in seed funding.


Phylagen. It’s a 4.5-year-old, San Francisco-based data analytics startup that says it’s creating a microbial map of the world for everything from food to textiles to counterfeit goods to determine from where it came. It’s basically looking for an item’s ‘DNA footprint,’ meaning the unique combination of bacteria, fungi and pollen that adheres to a product wherever it’s made (and also to its packaging). It’s a big and growing opportunity that it’s targeting. According to Allied Market Research, the food traceability market alone is expected to become a $14 billion market by next year.  Worth noting, Phylagen is a little further along in its fundraising ‘journey.’ It closed on $14 million in Series A funding earlier this year, including from Cultivian Sandbox, Breakout Ventures and Working Capital.


Bunch is a 2.5-year-old, San Francisco-based app that, once downloaded, can connect friends via audio or video chat with friends who are playing mobile games. On its face, it might seems like a lightweight idea compared to, say, Tissium, a company that’s further along along the funding front and building a vascular sealant out of synthetic polymers (which is also pretty neat). But in a society where people are increasingly “apart together” — and study after study shows that social ties boost our longevity — the app has wide appeal from not just an entertainment but a wellness standpoint. The fact that this startup raised seed funding — $3.85 million in November — from top game makers, including Supercell, Tencent, Riot Games, Miniclip and Colopl Next, also means a lot. Specifically, it means (I think) that these companies would prefer to partner with Bunch than to ice it out. Jordan had covered this one, too.

Tesla vehicles are getting Stardew Valley

 

Tesla owners have seen a bunch of games added to their car’s in-dash display over the last few months, from a handful of Atari classics to the painfully hard Cuphead. Next up? The oh-so-sweet farm living RPG, Stardew Valley.

In addition to just being kind of cool, the in-dash games (playable only when parked, because duh) are meant to help Tesla owners kill time while at superchargers. Stardew Valley is… sort of the perfect game for this. Beyond being so charming that it hurts, it’s an absolutely incredible way to burn 30 minutes in the blink of an eye. Oh, you’ve got ten minutes to waste? Why not tend to your crops? Or explore the mines? Or catch some fish?

Word of the addition comes from a Musk tweet:

Tesla holiday software update has FSD sneak preview, Stardew Valley, Lost Backgammon & a few other things

— Elon Musk (@elonmusk) December 20, 2019

Musk also mentions a full self driving (FSD) “sneak preview”… which would normally be a headline on its own, except that no one really knows exactly what it’ll entail, or just how much the “preview” will actually include. But it’s coming!

The tweet also mentions “Lost Backgammon”, which I can only assume is a game of backgammon where JJ Abrams continuously throws in all sorts of mysterious new stuff only to end the whole thing without really explaining 90% of it.

Musk doesn’t get specific about when this update will land. Seeing as he calls it the “holiday” update, though, it’ll presumably be sometime soon.

 

 

Fashion platform Zilingo acquires Sri Lankan SaaS startup nCinga for $15.5M

Singapore’s fashion startup Zilingo has acquired Sri Lanka’s SaaS startup nCinga in a $15.5 cash and stock deal, the two said today.

nCinga, founded in 2014, offers an IoT platform to enable real-time production monitoring on factory floors and data analytics tools. Its acquisition is one of Sri Lanka’s largest tech exits in recent times, the two said.

Zilingo, which has built several pieces of supply chain — manufacturing, logistics, payments, etc for retailers and brands, said it will deploy the Sri Lankan startup’s Manufacturing Execution System (MES) software across its network of 6,000 factories and 75,000 businesses.

Ankiti Bose, co-founder and chief executive of Zilingo, said, nCinga’s product has helped the startup “drastically improve” efficiency and drive insights by digitizing the shop floor. “Their work has been crucial to our mission of creating a transparent, sustainable, economically viable and socially responsible apparel supply chain,” she said.

Zilingo “has long” been a client of nCinga, she said.

Retailers continue to struggle with meeting consumer demand for fast, responsibly produced products due to inefficiencies and information asymmetry, said Zilingo, which is steps away from becoming the latest Southeast Asian unicorn. The acquisition will enable it to help customers in the United States, Europe and Australia, where brands traditionally lack transparency over supply chain and manufacturing processes, it said.

Zilingo will also help to expand the reach of nCinga’s software to core fashion manufacturing markets such as Bangladesh, India, Vietnam, Indonesia, Thailand and Turkey. In a statement, nCinga chief executive Imal Kalutotage said the startup “hopes to do great things together.”

The announcement today comes weeks after Zilingo said it planned to invest $100 million to expand its supply chain in the U.S.

It’s unclear how much capital nCinga had raised prior to today’s announcement. According to Crunchbase, nCinga’s last financing was its seed round five years ago.

Apple and Spotify’s podcasts come to Echo devices in the US

Amazon Alexa can now play podcasts from Apple, making Amazon’s line of Echo devices the first third-party clients to support the Apple Podcasts service without using AirPlay. Before, this level of support was limited to Apple’s HomePod. According to Amazon, the addition brings to Alexa devices Apple’s library of more than 800,000 podcasts. It also allows customers to set Apple Podcasts as their preferred podcast service.

The move is the latest in a series of partnerships between the two rivals, which also included the launch of the Apple TV app on Amazon’s Fire TV platform, as well as the launch of Apple Music on Echo devices and Fire TV. Amazon, in response, has expanded its assortment of Apple inventory to include Apple TV, iPad, iPhone, Apple Watch and more.

To get started, Apple users who want to stream from Apple Podcasts will first need to link their Apple ID in the Alexa app. Customers can then ask Alexa to play or resume the podcasts they want to hear. Other player commands, like “next” or “fast forward,” work, too. And as you move between devices, your progress within each episode will also sync, which means you can start listening on Alexa, then pick up where you left off on your iPhone.

In the Alexa app’s Settings, users will also be able to specify Apple Podcasts as their default player, which means any time they ask Alexa for a podcast without indicating a source, it will stream from the Apple Podcasts service.

Not to be outdone, Spotify also today announced its support for streaming podcasts on Alexa in the U.S.

Of course, Spotify Premium users have been able to use Spotify Connect to stream to Echo before today.

But now, Spotify says that both Free and Premium U.S. customers will be able to ask Alexa for podcasts as well as set Spotify as their default player.

Alexa’s support for Spotify podcasts was actually announced in September (alongside other news) at Amazon’s annual Alexa event in Seattle, so it’s less of a surprise than the Apple addition.

At the time, Amazon said it was adding support for Spotify’s podcast library in the U.S., which would bring “hundreds of thousands” of podcasts to Alexa devices. That also includes Spotify’s numerous exclusive podcasts — something that will give Echo users a reason to set Spotify as their default, perhaps.

Shortly after that announcement, Spotify said its free service would also now stream to Alexa devices, instead of only its paid service for Premium subscribers.

Blue Origin moves closer to human spaceflight with 12th New Shepard launch

Jeff Bezos -founded Blue Origin has recorded another successful mission for its New Shepard sub-orbital launch vehicle, which is a key step as it readies the spacecraft for human spaceflight. This is also the sixth flight of this re-used booster, which is a record for Blue Origin in terms of relying on and recovering one of its rocket stages.

This is the ninth time that Blue Origin has flown commercial payloads aboard New Shepard, and each launch moves it one step closer to demonstrating the system’s readiness for carrying crew on board. This launch carried experimental payloads that will be used for research, including materials used in student studies. It also had thousands of postcards on board written by students from around the world, which were submitted to the Club for the Future nonprofit set up by Blue Origin earlier this year to provide educational resources about space to schools and students.

Blue Origin intends to fly paying space tourists aboard New Shepard eventually, along with other commercial astronauts making the trip for research and other missions. Up to six passengers can fit in Blue Origin’s capsule atop the New Shepard, but we don’t yet know when it’ll actually be carrying anyone on board, either for testing or for commercial flights.

Introducing ‘Dear Sophie,’ an advice column for U.S.-bound immigrant employees

Sophie Alcorn
Contributor

Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Extra Crunch is excited to announce the launch of “Dear Sophie,” an advice column with answers for all your questions on attracting, hiring and retaining immigrant employees — and more.

Dear Sophie is a collaborative forum hosted by ExtraCrunch and curated by Sophie Alcorn, certified as a Specialist Attorney in Immigration and Nationality Law by the State Bar of California Board of Legal Specialization. Sophie is the founder of Alcorn Immigration Law, the fastest-growing immigration law firm in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.”


Dear Reader,

As I pack my bags to speak at TechCrunch Disrupt in Berlin this week, I’m happy to announce the first edition of my new column, Dear Sophie. I’m excited to answer your questions about U.S. immigration!

And, If you’re in the area, I invite you to join me at Disrupt Berlin 2019. You can use promo code ALCORN for discounted admission and meet me in person for a free consultation with CrunchMatch, or attend one of my two sessions: 

Hope to see you there,

Sophie


Dear Sophie: I’m scared: I feel like I should really be in Silicon Valley to grow my company, but everything I read about immigration makes it sound so hard. Is my dream possible?

— Dreaming in Dresden

Dear Dreaming: Yes, coming to the U.S. to build a startup is absolutely possible. In fact, I see founders like you do it all the time. Your dream is valid and definitely worth pursuing.

The first piece of advice I’d give you is to be careful about which news sources you trust! You might not be getting the whole story. While dramatic changes are taking place in the United States, we still have a functioning immigration system that allows people to come live and work here — people just like you. 

The second piece of advice I have is to research the many visa and green card options that can allow you to come to the United States and grow your company (you can read about them on my blog). You’ll find that some visas grant you the ability to work for the short-term or the long-term (potentially), and some allow you to visit and see what things are like here. 

With these visas, you can find a co-founder and build the early stage of your company, establish a U.S. branch of your existing business, seek venture capital and so much more. 

The third piece of advice I have is to really clarify why you want to come to America — that way, you can be strategic about achieving your goals. You might require a little guidance here, which is one example of where immigration lawyers like myself can be helpful. 

When I meet people in your situation, I reassure them that, not only are they safe to dream with me, but I’ve also helped hundreds of people just like them realize their dreams, even when they didn’t believe it was possible. Almost everybody who comes here once asked the same questions you’re asking.

My last piece of advice is simply to follow your heart. The world needs your ideas and contributions. There are lots of resources and ways to get informed and educated, which is the first step on this journey. Once you have a clear vision, you can work to make your dream a reality — It’s not always easy, but where there’s a will, there’s a way.

You’ve already asked for help, which is a great way to get started. I wish you the best!

Dear Sophie: I have a startup that has been quite successful in Germany. What’s the best way for me to spend some time in the United States exploring product-market fit, gauging business development, and talking to venture capitalists?

— Founder in Frankfurt

Dear Founder: Congratulations on your startup! And bravo for considering taking steps toward strengthening the U.S. marketplace. 

The first thing I suggest you decide is how long it will likely take for you to accomplish your goals. 

If you think you can get the answers you need in less than 90 days, the answer is pretty simple: apply for ESTA (Electronic System for Travel Authorization), which is available to citizens of about 40 countries (including Germany). You’re allowed to visit for business or pleasure with ESTA, but you’re not allowed to work — and you must definitely depart the United States before the end of the authorized period. 

ESTA could be great for a short business trip or a brief accelerator program in Silicon Valley. Be careful with programs that run longer than 90 days. I’ve seen founders in these longer programs leave on day 88 to go back home for a week and then return to the U.S. to complete the program, hoping that this is a safe workaround of the time limit. Remember that ESTA is a non-immigrant status, and if Customs and Border Protection suspects that you are trying to live here or work here, they have the authority to deny your entry to the United States. 

On the other hand, if you know you’ll need to spend 4-6 months in the U.S. without interruption, I suggest you talk to an attorney about the possibility of applying for a B-1/B-2 visitor visa (even if you have ESTA). A visitor visa allows you to stay in the U.S. for up to six months on a single visit. 

People often ask me how long they can stay in the U.S. during a calendar year or how long they need to be outside of the United States after a six-month visit. While there is no fixed answer to these questions, I remind them that ESTA, B-1, and B-2 are non-immigrant statuses, Customs and Border Protection has the authority to deny you entry if you appear to be living or working in the U.S. In my experience, reentry seems OK when people are spending less than 50% of the time in the country as visitors. Still, it’s always best to talk with an attorney about your particular situation. For example, sometimes our clients request that we provide them with letters of support explaining why their trip is temporary, which they can show to the officers at the airport if they get questioned.

I encourage people in your situation to at least come for 90 days. It’s a great opportunity to network, have some great conversations, and clarify your long-term goals in the U.S. Take some time to think about it, reach out online, so you have things set up before you arrive, and plan out your finances so you can make the most of your trip. I’m wishing you every success!

Dear Sophie: I am a venture capitalist, and my fund recently had great success. We’re now raising a second round and building out the infrastructure of our organization. I have a brilliant contractor working for me who scouts new startups. She was born in India, just got her Bachelor’s degree in Computer Science from an Ivy League university, and was also recently accepted back into a Master’s program there. I want to help her plan for her future. Can she keep working for me after OPT, or should she go back to school? How do these choices affect her prospects for short-term and long-term chances for immigration?

— Venture in Venice Beach

Huawei sues FCC over “unconstitutional” ban on the use of federal subsidies to buy its equipment

Huawei said today it is suing the Federal Communications Commission, asking to overturn a ban on carriers from using money from the Universal Service Fund (USF) to buy equipment from Huawei and ZTE.

The $8.5 billion USF supports the purchase of equipment to build communications infrastructure, especially in rural communities. Huawei is asking the United States Court of Appeals for the Fifth Circuit to overrule the FCC’s order, passed on Nov. 22.

Small carriers buy equipment from Huawei and ZTE because it is dependable and cheap. According to a Reuters report, some carriers are considering Nokia and Ericsson for replacements, but their equipment is priced less competitively.

During a press conference in Shenzhen today, Glen Nager, Huawei’s lead counsel for the lawsuit, claimed the ban goes beyond the FCC’s authority and violates the constitution. “The order fails to give Huawei constitutionally required due process before stigmatizing it as a national security threat, such as an opportunity to confront supposed evidence and witnesses, and a fair and neutral hearing process,” he said.

Huawei chief legal officer Song Liuping claims that FCC chairman and Ajit Pai and other commissioners did not present evidence to back its claim that Huawei is a security threat.

“This is a common trend in Washington these days. ‘Huawei is a Chinese company.’ That’s his only excuse,” Song said. He also claimed that the FCC ignored 21 rounds of “detailed comments” submitted by Huawei to explain how the order would harm businesses in rural areas, adding “This decision, just like the Entity List decision in May, is based on politics, not security.”

In March, Huawei also cited the Constitution in another lawsuit filed against the U.S. government arguing that a ban on the use of its products by federal agencies and contractors violate due process.

Huawei and ZTE were first identified as potential national security threats in 2012 by a U.S Congressional panel, but federal actions against Huawei and ZTE have intensified over the past year as the trade war between the U.S. and China escalates.

Earlier this year, it was placed on the U.S. Entity List and the Department of Justice announced it was pursuing several criminal charges against Huawei, including conspiracy to steal trade secrets. Huawei’s chief financial officer, Meng Wanzhou also faces fraud charges in New York. In response, Huawei has dramatically increased the amount it spends on lobbying in the U.S.

In China, Huawei’s announcement today about its FCC lawsuit was overshadowed by controversy about a former employee, Li Hongyuan who was arrested and detained for eight months after demanding severance pay. Li was arrested on extortion charges and released because of insufficient evidence and his treatment has triggered controversy and anger over the treatment of workers by Huawei and other tech companies.

Mass media vs. social media

In the waning years of the last millennium, at my university, one of the cause célèbres of the progressive left was a concept known as “Manufacturing Consent,” the title of a book and film, by and starring Noam Chomsky. Its central thesis was that US mass media “are effective and powerful ideological institutions that carry out a system-supportive propaganda function, by reliance on market forces, internalized assumptions, and self-censorship.”

It’s fair to say that history has been pretty kind to this theory. Consider the support drummed up by mass media for the invasion of Iraq in 2003. To quote the public editor of the New York Times, “To anyone who read the paper between September 2002 and June 2003, the impression that Saddam Hussein possessed, or was acquiring, a frightening arsenal of W.M.D. seemed unmistakable. Except, of course, it appears to have been mistaken.” Consider the September 2002 dossier published by the UK government “to bolster support for war” which turned out to be full of spectacularly incorrect information, and the media’s failure to interrogate those claims.

It’s hard to overstate just how cataclysmic these errors were. If the mass media had pushed back against the false claims of weapons of mass destruction, we might have avoided the Iraq war, which killed hundreds of thousands and cost trillions of dollars. Saddam Hussein was not exactly a tough act to follow, but the US still managed to follow its falsely motivated war with a botched occupation which turned Iraq, and arguably the larger Middle East to this day, into a bloodbath.

An interesting question is: what would have happened if today’s social media had been around in 2003? Today, if a wrong assertion is promoted by the mass media, it doesn’t take long for subject-matter experts to appear on Facebook and Twitter, correcting them, and either going viral themselves or becoming the subjects of countervailing media stories.

This doesn’t necessarily mean catastrophe would have been averted. But at least a possible corrective to the collective hysteria of the mass media would have existed, unlike in 2002-3. (Yes, those were the days of Blogspot and LiveJournal, but they didn’t have anything like the reach or significance of today’s social media.)

Consider a more recent event: the 2016 American presidential election. It has become an article of faith, in certain quarters, that it was won and lost by the diabolical use of Facebook ads, especially in conjunction with the psychographic superscience of Cambridge Analytica. This is ridiculous. First, no one credible thinks CA’s purported ability to mind control Facebook users by showing them “psychographically” targeted ads was anything other than snake-oil nonsense.

Second, as Nate Silver points out, the impact of social-media ads was enormously less than the impact of mass media. Remember the months of hysteria about Hillary Clinton’s emails? Remember how it turned out to be a complete non-story? Doesn’t this remind you of Iraq’s WMDs?

One of the weird things about the campaign press is how it vastly, vastly—like, by an order of magnitude—overrates the importance of paid media (advertising) relative to “earned media” (the volume and tone of press coverage). https://t.co/BRcQpVpOBD

— Nate Silver (@NateSilver538) November 28, 2019

“The media’s coverage of Hillary Clinton’s email scandal was probably literally 50 times more important to the outcome of the 2016 election than Trump ads on Facebook.” Perhaps, my fellow mass media, the fault lies not in our psychographic bullshit artists, but in ourselves

Social media has many downsides. You don’t have to go particularly deeply into my own back catalog to discover that I am a harsh critic of Facebook myself. But let’s not pretend that mass media, just because it’s older, is therefore perfect. It has its own catastrophic failure modes itself. In fact — whisper it — maybe we’re a lot better off, net, with social media and mass media, in that each can act as a counterbalancing corrective on the other’s flaws and failure modes.

The progressive left may have gone from “mass media is the enemy” to “Big Tech social media is the enemy,” but maybe, and I know this sounds crazy because it’s on the Internet, but hear me out here, maybe there’s room for a little nuance; maybe they both have good and bad aspects, and could possibly balance one another out. If you don’t think mass media needs a corrective, let me remind you once again of the Iraq War and But Her Emails, to name but two of many, many examples. Maybe there exists a future in which social and mass media are each a cure for what ails the other.

Africa Roundup: Nigerian fintech gets $360M, mints unicorn, draws Chinese VC

November 2019 could mark when Nigeria (arguably) became Africa’s unofficial capital for fintech investment and digital finance startups.

The month saw $360 million invested in Nigerian focused payment ventures. That is equivalent to roughly one-third of all the startup VC raised for the entire continent in 2018, according to Partech stats.

A notable trend-within-the-trend is that more than half — or $170 million — of the funding to Nigerian fintech ventures in November came from Chinese investors. This marks a pivot in China’s engagement with Africa to tech. We’ll get to that.

Before the big Chinese backed rounds, one of Nigeria’s earliest fintech companies, Interswitch, confirmed its $1 billion valuation after Visa took a minority stake in the company. Interswitch would not disclose the amount to TechCrunch, but Sky News reporting pegged it at $200 million for 20%.

Founded in 2002 by Mitchell Elegbe, Interswitch pioneered the infrastructure to digitize Nigeria’s then predominantly paper-ledger and cash-based economy.

The company now provides much of the tech-wiring for Nigeria’s online banking system that serves Africa’s largest economy and population. Interswitch offers a number of personal and business finance products, including its Verve payment cards and Quickteller payment app.

The financial services firm has expanded its physical presence to Uganda, Gambia and Kenya . The Nigerian company also sells its products in 23 African countries and launched a partnership in August for Verve cardholders to make payments on Discover’s global network.

Visa and Interswitch touted the equity investment as a strategic collaboration between the two companies, without a lot of detail on what that will mean.

One point TechCrunch did lock down is Interswitch’s (long-awaited) and imminent IPO. A source close to the matter said the company will list on a major exchange by mid-2020.

For the near to medium-term, Interswitch could stand as Africa’s sole tech-unicorn, as e-commerce venture Jumia’s volatile share-price and declining market-cap — since an April IPO — have dropped the company’s valuation below $1 billion.

Circling back to China, November was the month that signaled Chinese actors are all in on African tech.

In two separate rounds, Chinese investors put $220 million into OPay and PalmPay — two fledgling startups with plans to scale in Nigeria and the broader continent.

PalmPay, a consumer oriented payments product, went live last month with a $40 million seed-round (one of the largest in Africa in 2019) led by Africa’s biggest mobile-phone seller — China’s Transsion.

The startup was upfront about its ambitions, stating its goals to become “Africa’s largest financial services platform,” in a company release.

To that end, PalmPay conveniently entered a strategic partnership with its lead investor. The startup’s payment app will come pre-installed on Transsion’s mobile device brands, such as Tecno, in Africa — for an estimated reach of 20 million phones.

PalmPay also launched in Ghana in November and its UK and Africa based CEO, Greg Reeve, confirmed plans to expand to additional African countries in 2020.

OPay’s $120 million Series B was announced several days after the PalmPay news and came only months after the mobile-based fintech venture raised $50 million.

Founded by Chinese owned consumer internet company Opera — and backed by 9 Chinese investors — OPay is the payment utility for a suite of Opera developed internet based commercial products in Nigeria. These include ride-hail apps ORide and OCar and food delivery service OFood.

With its latest Series A, OPay announced it would expand in Kenya, South Africa, and Ghana.

Though it wasn’t fintech, Chinese investors also backed a (reported) $30 million Series B for East African trucking logistics company Lori Systems in November.

With OPay, PalmPay, and Lori Systems, startups in Africa have raised a combined $240 million from 15 Chinese investors in a span of months.

There are a number of things to note and watch out for here, as TechCrunch reporting has illuminated (and will continue to do in follow-on coverage).

These moves mark a next chapter in China’s engagement in Africa and could raise some new issues. Hereto, the country’s interaction with Africa’s tech ecosystem has been relatively light compared to China’s deal-making on infrastructure and commodities.

There continues to be plenty of debate (and critique) of China’s role in Africa. This new digital-phase will certainly add a fresh component to all that. One thing to track will be data-privacy and national-security concerns that may emerge around Chinese actors investing heavily in African mobile consumer platforms.

We’ve seen lines (allegedly) blur on these matters between Chinese state and private-sector actors with companies such as Huawei.

As OPera and PalmPay expand, they may need to do some reassuring of African regulators as countries (such as Kenya) establish more formal consumer protection protocols for digital platforms.

One more thing to follow on OPay’s funding and planned expansion is the extent to which it puts Opera (and its entire suite of consumer internet products) in competition with multiple actors in Africa’s startup ecosystem. Opera’s Africa ventures could go head to head with Uber, Jumia, and M-Pesa — the mobile money-product that put Kenya out front on digital finance in Africa before Nigeria.

Shifting back to American engagement in African tech, Twitter and Square CEO Jack Dorsey was on the continent in November. No sooner than he’d finished his first trip, Dorsey announced plans to move to Africa in 2020, for 3 to 6 months, saying on Twitter “Africa will define the future (especially the bitcoin one!).”

We still don’t know much about what this last trip — or his future foray — mean in terms of concrete partnerships, investment, or market moves in Africa from Dorsey and his companies.

He visited Nigeria, Ghana, South Africa and Ethiopia and met with leaders at Nigeria’s CcHub (Bosun Tijani), Ethiopia’s Ice Addis (Markos Lemming), and did some meetings with fintech founders in Lagos (Paga’s Tayo Oviosu).

I know most of the organizations and people Dorsey talked to pretty well and nothing has shaken out yet in terms of partnership or investment news from his recent trip.

On what could come out of Dorsey’s 2020 move to Africa, per his tweet and news highlighted in this roundup, a good bet would be it will have something to with fintech and Square.

More Africa-related stories @TechCrunch

African tech around the ‘net

Black Friday sees record $7.4B in online sales, $2.9B spent using smartphones

Following swiftly on the heels of a Thanksgiving that broke records with $4.2 billion in online sales, Black Friday also hit a new high, although it just fell short of predictions. According to analytics from Adobe, consumers spent $7.4 billion online yesterday buying goods online via computers, tablets and smartphones. The figures were up by $1.2 billion on Black Friday 2018, but they actually fell short of Adobe’s prediction for the day, which was $7.5 billion.

Salesforce, meanwhile, said that its checks revealed $7.2 billion in sales (even further off the forecast).

Popular products included toys on the themes of Frozen 2, L.O.L Surprise, and Paw Patrol. Best selling video games included FIFA 20, Madden 20, and Nintendo Switch. And top electronics, meanwhile, included Apple Laptops, Airpods, and Samsung TVs.

A full $2.9 billion of Black Friday sales happened on smartphones. These conversions are growing faster than online shopping overall, so we are now approaching a tipping point where soon smartphones might outweigh web-based purchases through computers.

“With Christmas now rapidly approaching, consumers increasingly jumped on their phones rather than standing in line,” said Taylor Schreiner, Principal Analyst & Head of Adobe Digital Insights, in a statement. “Even when shoppers went to stores, they were now buying nearly 41% more online before going to the store to pick up. As such, mobile represents a growing opportunity for smaller businesses to extend the support they see from consumers buying locally in-store on Small Business Saturday to the rest of the holiday season. Small Business Saturday will accelerate sales for those retailers who can offer unique products or services that the retail giants can’t provide.”

Adobe Analytics tracks sales in real-time for 80 of the top 100 US retailers, covering 55 million SKUs and some 1 trillion transactions during the holiday sales period. Salesforce uses Commerce Cloud data and insights covering more than half a billion global shoppers across more than 30 countries.

One of the reasons we may be seeing slightly less fervent sales than the analysts had predicted is because the holiday sales season is starting earlier and earlier. Black Friday, the day after Thanksgiving when many people have days off, has for a long time been seen by retailers as the start of holiday shopping season. That has changed as retailers hope to catch more sales over a longer period of time.

As more people shop, they are also shopping for more expensive items. Adobe noted that Average Order Value was $168, a new record level yesterday for Black Friday, up 5.9% on a year ago.

Smartphone sales were up 21% over last year and those who were not buying were, as a start, browsing, with whopping 61% of all online traffic to retailers coming from smartphones, up 15.8% since last year.

As with yesterday, e-commerce “giants” with over $1 billion in sales annually were doing better than smaller sites: they had more smartphone sales, and 66% conversions on browsers on smartphones, Adobe said. They have overall also seen a 62% boost in sales this season, versus 27% for smaller retailers.

As with the Thanksgiving sales patterns — when bigger retailers also appeared to do better than their smaller counterparts — there are a couple of reasons for this. One is that the bigger sites have a wider selection of goods and can afford to take hits with deep discounts on some items, in order to lure users in to add other items to their shopping cars that are not as deeply discounted. Or, bigger online retailers can simply afford to give bigger markdowns.

The other is that the bigger stores often have more flexible delivery options. Adobe noted that those using click-and-collect orders, or buy online, pick up in store / curbside grew by 43 percent.

The story is not all rosy for big retailers, however. Edison Trends notes that some big platforms are actually seeing very mixed results this time around.

It will be interesting to see how and if patterns change for smaller retailers on Sunday, which is being dubbed “small business Sunday” to focus on buying from smaller and independent shops. Shoppers have already spent $470 million, and Adobe believes it will pass the $3 billion mark. Cyber Monday, the biggest of them all, is expected to make $9.4 billion in sales.

2019 Thanksgiving e-commerce sales show 14% rise on 2018, $470M spent so far

With popular social networks seeing some downtime, most shops closed, and many people off work today for Thanksgiving, bargain hunters are flocking online to start their holiday shopping.

Adobe says that as of 2pm Pacific time, $2.1 billion had been spent online, up 20.2% on the same period a year ago.

That shows that as the day went on, sales accellerated. Prior to that, at 10am Adobe said $470 million has been spent online, a rise of 14.5% compared to sales figures from the same time last year. Overall, sales patterns are largely on track to hit Adobe’s prediction of $4.4 billion in sales today.

Over at Shopify, as of 11.30 Pacific time, the e-commerce backend provider noted that it was seeing around 4,500 transactions per minute, working out to just under $400,000 spent each minute.

Within that, some 66% of all sales were being made on mobile devices, with apparel and accessories the most popular category, and New York the top-selling city. Average cart price has been $78.66.

Adobe Analytics tracks sales in real-time for 80 of the top 100 US retailers, covering 55 million SKUs and some 1 trillion transactions during the holiday sales period. Shopify, meanwhile, uses data from across the range of online retailers that use Shopify APIs to run their sales.

Black Friday (the day after Thanksgiving) used to be seen as the traditional start to holiday sales, but consumers spending time at home on Thanksgiving itself are increasingly coming online — on a day when most brick-and-mortar stores are closed — to get the ball rolling.

This year, Thanksgiving is coming a week later this year than in 2018 (when it fell on the 22nd of the month), which will make for a more compressed, and potentially more frenzied, selling period.

As Sarah pointed out yesterday, many retailers this year made an early jump on their Black Friday deals, and so far some $53 billion has been spent in the month of November up to today. This year’s holiday sales overall are predicted to hit nearly $144 billion.

We’ll be updating this post with more figures as they come in.

As a point of comparison, in 2018, online sales hit $3.7 billion, according to Adobe’s analysis.

Adobe notes that in the $53 billion spent so far this month, all 27 days in November have surpassed $1 billion in sales. Eight days passed $2 billion, and yesterday saw $2.9 billion in sales. That was up 22% on a year ago, which either points to increased sales overall, or simply that the strategy of extending “holiday” shopping to start earlier and earlier is paying off for retailers.

Another interesting insight is that some $18.2B in purchases have been made by smartphones this month, which is up 49.5% compared to last year.

“The strong online sales performance to-date suggests that holiday shopping starts much earlier than ever before. Steep discounts on popular items like computers on the day before Thanksgiving indicate that many of the season’s best deals are already up for grabs. This has led to significant growth in online sales (16.1% YoY increase) so far. What will be important for retailers to track is whether the early discounts will drive continued retail growth overall, or if they have induced consumers to spend their holiday budgets earlier,” noted Jason Woosley, vice president of commerce product & platform at Adobe.

TikTok apologizes for removing viral video about abuses against Uighurs, blames a “human moderation error”

TikTok has issued a public apology to a teenager who had her account suspended shortly after posting a video that asked viewers to research the persecution of Uighur people and other Muslim groups in Xinjiang. TikTok included a “clarification on the timeline of events,” and said that the viral video was removed four days after it was posted on November 23 “due to a human moderation error” and did not violate the platform’s community guidelines (the account @getmefamouspartthree and video have since been reinstated).

But the user, Feroza Aziz, who describes herself in her Twitter profile as “just a Muslim trying to spread awareness,” rejected TikTok’s claims, tweeting “Do I believe they took it away because of an unrelated satirical video that was deleted on a previous deleted account of mine? Right after I finished posting a 3 part video about the Uyghurs? No.”

In the video removed by TikTok, Aziz begins by telling viewers to use an eyelash curler, before telling them to put it down and “use your phone, that you’re using right now, to search up what’s happening in China, how they’re getting concentration camps, throwing innocent Muslims in there, separating families from each other, kidnapping them, murdering them, raping them, forcing them to eat pork, forcing them to drink, forcing them to convert. This is another Holocaust, yet no one is talking about it. Please be aware, please spread awareness in Xinjiang right now.”

TikTok is owned by ByteDance and the video’s removal led to claims that the Beijing-based company capitulated to pressure from the Chinese Communist Party (Douyin, ByteDance’s version of TikTok for China, is subject to the same censorship laws as other online platforms in China).

Though the government-directed persecution of Muslim minority groups in China began several years ago and about a million people are believed to be detained in internment camps, awareness of the crisis was heightened this month after two significant leaks of classified Chinese government documents were published by the New York Times and the International Consortium of Investigative Journalists, confirming reports by former inmates, eyewitnesses and researchers.

Aziz told BuzzFeed News she has been talking about the persecution of minority groups in China since 2018 because “as a Muslim girl, I’ve always been oppressed and seen my people be oppressed, and I’ve always been into human rights.”

In the BuzzFeed News article, published before TikTok’s apology post, the company claimed Aziz’s account suspension was related to another video she made that contained an image of Osama Bin Laden. The video was created as a satirical response to a meme about celebrity crushes and Aziz told BuzzFeed News that “it was a dark humor joke that he was at the end, because obviously no one in their right mind would think or say that.” A TikTok spokesperson said it nonetheless “violated its policies on terrorism-related content.”

“While we recognize that this video may have been intended as satire, our policies on this front are currently strict. Any such content, when identified, is deemed a violation of our Community Guidelines and Terms of Service, resulting in a permanent ban of the account and associated devices,” a TikTok spokesperson told BuzzFeed, adding that the suspension of Aziz’s second account, which the makeup tutorial video was posted on, was part of the platform’s blocking of 2,406 devices linked to previously suspended accounts.

In TikTok’s apology post today, TikTok US head of safety Eric Tan wrote that the platform relies on technology to uphold community guidelines and human moderators as a “second line of defense.”

“We acknowledge that at times, this process will not be perfect. Humans will sometimes make mistakes, such as the one made today in the case of @getmefamouspartthree’s video,” he added. “When those mistakes happen, however, our commitment is to quickly address and fix them, undertake trainings or make changes to reduce the risk of the same mistakes being repeated, and fully own the responsibility for our errors.”

Aziz told the Washington Post, however, that “TikTok is trying to cover up this whole mess. I won’t let them get away with this.”

The controversy comes as TikTok faces an inquiry by the U.S. government into how it secures the personal data of users. Reuters reported yesterday that TikTok plans to separate its product and business development, and marketing and legal teams from Douyin in the third quarter of this year.

 

India’s electric bike rental startup Yulu inks strategic partnership with Bajaj Auto, raises $8M

Yulu, a Bangalore-based electric bike sharing platform that maintains a partnership with Uber, said today it has won the backing of one of the country’s largest automaker firms.

The two-year-old startup said it has entered into a strategic partnership with Bajaj Auto, which has also funded Yulu’s $8 million Series A financing round. As part of the partnership, Bajaj will co-design and manufacture future generation of Yulu two-wheelers, Amit Gupta, cofounder and chief executive of Yulu, told TechCrunch in an interview.

Yulu, which operates in Bengaluru and recently entered portions of New Delhi and Mumbai, has raised about $18.5 million to date, he said.

The startup maintains over 3,000 electric bikes on its platform. A customer can rent the bike through Yulu’s app for 14 cents, pay another 14 cents for each hour of usage and then park it at the nearest zone.

Gupta said Yulu plans to have 100,000 two-wheelers in its fleet by end of next year. And that’s where its partnership with Bajaj Auto would come in handy. The startup currently relies on its Chinese original design manufacturer partners to build its bikes. But Bajaj Auto, which has decades of building two-wheelers in the nation, will be taking care of the manufacturing from here, he said. “They clearly have much better understanding of Indian context than most,” he said.

In a statement, Rajiv Bajaj, Managing Director of Bajaj, said, “in Yulu we find an experienced and committed partner with robust achievement of success metrics in a very short time. And this is why we decided to partner with them in their journey of bringing Yulu service to every neighborhood of Urban India.”

Yulu is also expanding its presence quickly in the nation. In Delhi, it has been granted the permission to offer electric bikes at 250 subway stations. “We are already servicing in nine of those,” said Gupta, who also co-founded advertising tech giant InMobi.

“We work through clusters. So we deploy about 1000 vehicles, and set up 200 to 300 parking stations and 25 to 30 charging stations. We have been able to replicate this cluster model in many places,” he said.

These bikes can ride as fast as 35 kmph (21.7 mph), and cover 60 kms (37.2 miles) in one charging cycle. The startup works with neighborhood stores, individuals to expand its parking and charging stations. “It’s very economical,” Gupta said. Yulu also has an army of workers who swap the used battery with freshly charged one, he said.

More to follow…

Tesla Cybertruck reservations hit 146,000

Tesla has received 146,000 reservations to order the Tesla Cybertruck, pulling in some $14.6 million in deposits just two days after the company’s CEO Elon Musk unveiled the futuristic and angled vehicle.

Reservations require a $100 refundable deposit. How many of those deposits will convert to actual orders for the truck, which is currently priced between $39,900 and $69,900, is impossible to predict. And there will likely be plenty of speculation over the next two years. Production of the tri-motor variant of the cybertruck is expected to begin in late 2022, Tesla said.

Musk tweeted Saturday that 146,000 Cybertruck orders have been made so far. Of those, 41% picked the most expensive tri-motor option and 42% of future customers chose the dual motor version. The remaining 17% picked the cheapest single-motor model.

146k Cybertruck orders so far, with 42% choosing dual, 41% tri & 17% single motor

Elon Musk (@elonmusk) November 23, 2019

The Tesla Cybertruck, which Musk unveiled in dramatic fashion at the Tesla Design Center in Hawthorne, Calif., has been polarizing with skeptics heaping on the criticism and supporters pushing back in kind. Even Tesla fans at the Cybertruck event, which TechCrunch attended, seemed torn with some praising it and others wishing Musk had created something a bit more conventional.

The vehicle made of cold-rolled steel and features armored glass that cracked in one demonstration and an adaptive air suspension.

Tesla said it will offer three variants of the cybertruck. The cheapest version, a single motor and rear-wheel drive model, will cost $39,900, have a towing capacity of 7,500 pounds and more than 250 miles of range. The middle version will be a dual-motor all-wheel drive, have a towing capacity of more than 10,000 pounds and be able to travel more than 300 miles on a single charge. The dual motor AWD model is priced at $49,900.

The third version will have three electric motors and all-wheel drive, a towing capacity of 14,000 pounds and battery range of more than 500 miles. This version, known as “tri motor,” is priced at $69,900.

More than 1 million T-Mobile customers exposed by breach

T-Mobile has confirmed a data breach affecting more than a million of its customers, whose personal data (but no financial or password data) was exposed to a malicious actor. The company alerted the affected customers but did not provide many details in its official account of the hack.

The company said in its disclosure to affected users that its security team had shut down “malicious, unauthorized access” to prepaid data customers. The data exposed appears to have been:

  • Name
  • Billing address
  • Phone number
  • Account number
  • Rate, plan and calling features (such as paying for international calls)

The latter data is considered “customer proprietary network information” and under telecoms regulations they are required to notify customers if it is leaked. The implication seems to be that they might not have done so otherwise. Of course some hacks, even hacks of historic magnitude, go undisclosed sometimes for years.

In this case, however, it seems that T-Mobile has disclosed the hack in a fairly prompt manner, though it provided very few details. When I asked, a T-Mobile representative indicated that “less than 1.5 percent” of customers were affected, which of the company’s approximately 75 million users adds up to somewhat over a million.

The company reports that “we take the security of your information very seriously,” a canard we’ve asked companies to stop saying in these situations.

The T-Mobile representative stated that the attack was discovered in early November and shut down “immediately.” They did not answer other questions I asked, such as whether it was on a public-facing or internal website or database, how long the data was exposed and what specifically the company had done to rectify the problem.

The data listed above is not necessarily highly damaging on its own, but it’s the kind of data with which someone might attempt to steal your identity or take over your account. Account hijacking is a fairly common tactic among cyber-ne’er-do-wells these days and it helps to have details like the target’s plan, home address and so on at one’s fingertips.

If you’re a T-Mobile customer, it may be a good idea to change your password there and check up on your account details.

Tesla accidentally busted two windows on the Cybertruck while demonstrating how tough they are

Well, I don’t think that was supposed to happen.

In what was one of the more surreal product launches I’ve seen, Tesla debuted its $39,900 Cybertruck pickup tonight. After running through some specs and hitting the truck’s door with a sledge hammer, Elon asked an on-stage companion (Tesla’s lead designer, Franz von Holzhausen) to demonstrate the strength of the Tesla “Armor Glass” by throwing a solid metal, baseball-sized ball at the driver side window.

It… did not go well.

While the glass didn’t completely shatter, it did appear to crack from edge to edge.

“Oh my [bleeping] God,” Musk laughs. “Well, maybe that was a little too hard.”

So they tried it again on the rear passenger window… and it cracked too. “Room for improvement,” Musk says with a shrug.

Was this a gag? A “Hah hah! Just kidding, here’s a test on the real glass!” sort of thing? Nope. Elon stood in front of the truck, two broken windows and all, and completed the presentation.

While no one would expect most standard windows to stand up to a test like this, even Elon seemed surprised by the results. “We threw wrenches, we threw everything.” he said on stage. “We even literally threw a kitchen sink at the glass, and it didn’t break. For a little weird reason it broke now, I don’t know why.”

“We’ll fix it in post,” he followed up with a laugh then moved on to talking about the car’s suspension. The video went private on Tesla’s YouTube channel about 30 seconds after the live stream was over.

And with that, the undeniable truth that is “live demos never work” lives on.

tesla cybertruck

Michael Grimes, “Wall Street’s Silicon Valley whisperer,” says direct listings are “absolutely” more efficient than IPOs

Michael Grimes has been called “Wall Street’s Silicon Valley whisperer” for landing a seemingly endless string of coveted deals for his bank, Morgan Stanley. In more recent years, it has served as the lead underwriter for Facebook, Uber, Spotify and Slack. Grimes, who has been a banker for 32 years — 25 of them at Morgan Stanley —  has also played a role in the IPOs of Google, Salesforce, LinkedIn, Workday and hundreds of other companies.

Because some of these offerings have gone better than others, Morgan Stanley and other investment banks are now being asked by buzzy startups and their investors to embrace more direct listings, a maneuver pioneered by Spotify and copied by Slack wherein rather than sell a percentage of shares to the public in a fundraising event, companies are essentially moving all their stock from the private markets to public ones in one fell swoop.

They cost the companies less money in banking fees. They also immediately free everyone on a company’s cap table to share their shares if they so choose, which has made the concept especially popular with VCs like BIll Gurley and Michael Moritz — though investors also cite the money that companies have been leaving on the table with traditional IPOs. Gurley specifically has talked publicly about underpriced offerings costing newly public outfits $170 billion over the last 30 years.

Grimes, in a rare public appearance last week at a StrictlyVC event, said he supports direct listings completely, calling the “pricing mechanism” more efficient, “absolutely.” He has reason to be a proponent of this new “product.” Both Spotify and Slack turned to Morgan Stanley to organize their direct listings — a process that involves running simultaneous auctions to determine the price at which demand and supply meet — and to ensure there would be enough liquidity for the listings to go smoothly.

Given the success of both, the bank is now better positioned than any to continue orchestrating direct listings for potential issuers, including, reportedly, Airbnb and DoorDash. (Grimes wouldn’t confirm the plans of any companies with which Morgan Stanley plans to work.)

Still, during last week’s sit-down, we wanted to know more about how they work and whether there’s a chance that banks will eventually try to thwart the process, given that they require just as much work, are potentially less lucrative, and keep banks from rewarding some of their best customers — meaning the institutions that are accustomed to being funneled IPO shares ahead of retail investors in traditional offerings.

Grimes patiently sat through roughly 40 minutes of questions, all of which you can read tomorrow if you’re a subscriber of Extra Crunch, where much more of the transcript is being published. In the meantime, here are some highlights from our conversation:

Morgan Stanley was the lead underwriter for Uber. You don’t think Uber went public too late? It seems like it was enjoying a lot of momentum last year, so much so that it was reportedly told by bankers that it could be valued at $120 billion in an IPO — which is nearly triple where it’s valued right now. Did you think it would go out at that number?

MG: If you look at how companies are valued, at any given point of time right now, public companies with growth prospects and margins that are not yet at their mature margin, I think you’ll find on average price targets by either analysts who work at banks or buy-side investors that can be 100%, 200%, and 300% different from low to high. That’s a typical spread. You can have somebody believe a company will be worth $30, $60 or $80 per share three years out. That’s a huge amount of variability.

So that variability isn’t based on different timelines?

MG: It’s based on penetration. Let’s say, what, 100 million people or so [worldwide] have have been monthly active users of Uber, somewhere in that range. So what percentage of the population is that? Less than 1% or something. Is that 1% going to be  2%, 3%, 6%, 10%, 20%? Half a percent, because people stop using it and turn instead to some flying [taxi]?

So if you take all those variable, possible outcomes, you get huge variability in outcome. So it’s easy to say that everything should trade the same every day, but [look at what happened with Google]. You have some people saying maybe that is an an outcome that can happen here for companies, or maybe it won’t. Maybe they’ll [hit their] saturation [point] or face new competitors.

It’s really easy to be a pundit and say, ‘It should be higher’ or ‘It should be lower,’ but investors are making decisions about that every day.

Is it your job to be as optimistic as possible about the pricing? How are you coming up with the number, given all these variables?

MG: We think our job is to be realistically optimistic. If tech stops changing everything and software stops eating the world, there probably would be less of an optimistic bias. But fundamentally — it sounds obvious but sometimes people forget — you can only lose 100 percent of your money, and you can make multiples of your money. I don’t think VCs are as risk-averse as they say, by the way. Some 80% or 90% of investments end up under water, and 5% or 10% produce 10 or 20 or 30x and so that’s the portfolio approach. It’s not as pronounced with institutional investors investing at IPOs, but it’s the same concept: you can only lose 100 percent of your money.

Let’s say you put five equal quantums of investment out to work in five different companies and one of them grows tenfold. Do I even need to tell you what happened with the other four to know you made money? Worst case, you’ve more than doubled your money, and therefore you’re probably going to lean into that again. So generally speaking, there’s an upward bias, but our job is to be realistic and to try to get that right. We view it as a sacred obligation. There’s variability and volatility within that. We try to give really good advice on receptivity. And when the process works as intended, we have predicted it as well as you can within a range of high variability.

StrictlyVC

This summer on CNBC, Bill Gurley told viewers that banks, including the top banks, have mispriced IPOs to the tune of $170 billion over the last three years, meaning that’s the amount of money that companies left on the table. Do you think we need direct listings and can you explain why they could potentially be better?

MG: Sure. We think Bill has done a great service by focusing a spotlight on the product, which we innovated with Spotify and then later with Slack . We do love the product, we’re bullish on it.

You’re asking how they work?

TC: Yes, as it relates to price discovery. So in a direct offering, you’re talking to people who own the stock and people who might want to buy the stock to figure out where they meet, which doesn’t sound that different than what goes on with a traditional IPO.

MG: It’s actually different in a technical way. In a traditional IPO, there’s a range, let’s say $8 to $10. And the orders we’re taking every day for two weeks, let’s say, while the prospectus is filed, we’re taking orders from institutions [regarding] how many shares they want to buy within that range. That means generally within that range, they’re buying. It’s not binding but generally speaking, they’re going to follow through. If it’s outside of that range, we have to go back and ask them again. So if there’s a whole lot of demand and the number of shares being sold is fixed so that supply is fixed . . . the company’s goal is for oversubscription because they want an upward bias. They don’t want to trade up too much [and leave] money on the table and they don’t want to trade down at all — even a little bit — and they don’t want to trade flat because that could be [perceived] to be down; they want to trade up modestly. An exception was the Google IPO, which was designed to trade flat and traded up modestly, 14% or something like that.

The range might be moved once, maybe twice — because there’s not a lot of time because there’s a regulatory review to turn it around — so [let’s say] it’s moved from $8 to 10 to $10 to $12 and there’s still much more demand than supply; it’s a judgment call as to, is that going to price at $14? $15? $12? Some investors might think it should trade at $25 while others think it should trade at $12. So there could be real variability there, and when trading opens, only the shares that were sold the night before in the IPO, some subset of them are trading and that’s it, everything else is locked up —  the whole cap table. So for six months, it’s those same shares trading over and over, other than maybe [a small sampling] or investors of former employees who weren’t locked up.

TC: Okay, so let’s switch now to a direct listing.

MG: So with a direct listing, the company is not issuing any shares. There is no underwriting where the banks buy the shares and sell them immediately to institutional and retail investors. But there is market making and the way the trading opens is similar but the size is totally flexible. There’s no lock-up. The whole cap table can essentially sell shares, versus the average IPO right now where I think it’s 16 percent of the cap table is sold in an IPO, and that’s down by half, by the way, from 15 years ago.

TC: So everyone can sell on day one, but are there handshake deals to ensure that not everyone dumps the shares on day one?

MG: No, there’s no hidden agreement. They can sell as many shares as they want, but it’s going to depend on the price. The way a direct listing opens trading is a critical function because there’s no order book. No one has been taking orders for two weeks. The company has met with investors and done investor education. We’ve helped them write a prospectus, etcetera, but there are no orders, there’s no price range, and off we go. With Slack and Spotify, we were the bank responsible for the trading. What that means is on our trading floor in Times Square, our head trader, John Paci, and his team are in touch with anyone on the cap table who might want to sell and institutional investors who might want to buy, and what’s happening are two auctions at the same time.

So in the traditional IPO, we were taking orders for size within a range that might move a little bit, [but] this is now any price. So take the buyers. [We’re trying to find out] who will pay $8 who will pay $12. Will anyone pay $16? So you’re taking that demand and sorting it by price. At the same time, you’re taking that supply, asking, ‘VC No. 1, is there a price at which you would sell shares?’ If this person says, ‘Yes, but at $20’ and we don’t have any demand at that price, then we figure out: who would sell at $18? Maybe VC No. 2 says they would sell 5 percent of their shares at $18. So we have some buyers, but it’s not enough to open trading with enough liquidity, which is key to all this. If you had one VC and one buyer, the buyer would go away. They’d say, ‘You didn’t tell me I was going to be trading with myself.’ So we have to figure out where a simultaneous demand auction for the highest price, and a supply reverse auction for the lowest price clears and meets. If you can move a billion dollars worth of stock at $14 and get demand for a billion worth of stock, then that’s the price.

That’s then sent to the exchange where the exchange can take and add any other market maker or bank that has another seller or a buyer — so they add in, call it, another 30 percent from other brokers — and that produces the opening transaction.

Stay tuned tomorrow for much more from that interview, where other discussion areas included whether lock-up periods might eventually be done away with in traditional IPOs, why VCs are suddenly so motivated to bang the drum on direct listings, and what really went wrong with Google’s auction-style offering back in 2004.

Volkswagen’s new all-electric concept wagon could be coming to the U.S. by 2022

Volkswagen revealed Tuesday evening a new concept vehicle called the ID Space Vizzion, and despite the crazy Frank Zappaesque name, this one might actually make it into production in Europe and North America.

The ID Space Vizzion is the seventh concept that VW has introduced since 2016 that uses its MEB platform, a flexible modular system — really a matrix of common parts — for producing electric vehicles that VW says make it more efficient and cost-effective.

The first vehicles to use this MEB platform will be under the ID brand, although this platform can and will be used for electric vehicles under other VW Group brands such as Skoda and Seat. The ID.3 is the first model in its new all-electric ID brand and the beginning of the automaker’s ambitious plan to sell 1 million EVs annually by 2025. A production version of the ID. 3 was unveiled in September.

The ID Space Vizzion is equipped with a rear-mounted 275-horsepower motor and a 82 kilowatt-hour battery pack with a range of up to 300 miles under the EU’s WLTP cycle. A second motor can be added to give it all-wheel drive capability and a total output of 355 horsepower.

This concept will likely be described in a number of ways — and during the event at the Petersen Museum in Los Angeles it was — but this is a wagon through and through.

What the ID. Space Vizzion will ultimately look like is unclear although much of the shape and overall stance shown Tuesday evening. But Scott Keogh, CEO of Volkswagen of America, did say in his closing remarks that something like the concept shown tonight will come to the U.S.

Playbuzz becomes Ex.co and expands its content marketing platform

Playbuzz, a startup that helps publishers to add things like polls and galleries to their articles, has rebranded itself as Ex.co.

Co-founder and CEO Tom Pachys told me the name stands for “the experience company,” and he said it reflects the company’s broader content marketing ambitions. Ex.co will continue working with news publishers, but Pachys said there’s a bigger market for what the company has built.

“We’re seeing businesses wanting to become publishers in a way, to interact with their users in a way that’s very similar to what a publisher does,” Pachys said.

Playbuzz/Ex.co is hardly the first publishing startup realize that there may be more money in content marketing, but Pachys argued that this isn’t just a sudden pivot. After all, the company is already working with clients like Visa, Red Bull and Netflix (as well as our corporate siblings at The Huffington Post).

“The previous name does not reflect the values that we stand for today — not even future values,” he said.

Tom Pachys

Tom Pachys

Pachys also suggested that existing content marketing tools are largely focused on operations and workflow — things like hiring the right freelancer — while Ex.co aims at making it easier to actually create the content.

“We’re the ones innovate within the core — not around it, but the core itself,” he said. “And rather than trying to call them competition, we want to integrate with as much players in the ecosystem as possible.”

In addition to announcing the rebrand, Ex.co is also relaunching its platform as a broader content marketing tool, with new features like content templates, real-time analytics and lead generation.

Pachys, by the way, is new to the CEO role, having served as COO until recently, while previous Playbuzz CEO Shaul Olmert has become the company’s president. Pachys said the move wasn’t “directly correlated” with the other changes, and instead allows the two of them to focus on their strengths — Pachys oversees day-to-day operations, while Olmert focuses on investor relations and strategic deals.

“I co-founded the company with Shaul, who’s a very good friend of mine, we’ve known each other 20 years,” Pachys said. “Shaul is very much involved in the company.”