Tech Crunch

Vietnam-based healthcare booking app Docosan gets $1M seed funding led by AppWorks

Based in Ho Chi Minh City, Docosan helps patients avoid long waits by letting them search and book doctors through its app. The company announced today it has raised more than $1 million in seed funding, which is claims is one of the largest seed rounds ever for a Vietnamese healthtech startup. The investment was led by AppWorks, the Taiwan-based early-stage investor and accelerator program, with participation from David Ma and Huat Ventures.

Founded in 2020, the app has been used by about 50,000 patients for bookings and now has more than 300 individual healthcare providers, ranging from small family pediatric clinics to neurosurgeons at large private hospitals, co-founder and chief executive officer Beth Ann Lopez told TechCrunch. Providers are vetted before being added to the platform and have on average 18 years of clinical experience.

Lopez said advance doctor bookings aren’t the norm in Vietnam. Instead, people who use private healthcare providers have to “choose between over 30,000 private hospitals and clinics spread across the hospital with huge variations in price and quality. This is why people use word of mouth recommendations from their family and friends to choose a healthcare provider. Then they show up at a hospital or clinic and wait in line, sometimes for hours.”

Docosan’s users can filter providers with criteria like location and specialty, and see pricing information and verified customer reviews. It recently added online payment features and insurance integrations. The company, which took part in Harvard’s Launch Lab X plans to launch telehealth and pharmacy services as well.

For healthcare providers on the app, Docosan provides software to manage bookings and ease wait times, a key selling point during the COVID-19 pandemic because many people are reluctant to sit in crowded waiting rooms. Lopez said another benefit is reducing the number of marketing and adminstrative tasks doctors have to do, allowing them to spend more time with patients.

The startup plans to expand into other countries. “Docosan is a solution that works well anywhere with a large, fragmented private healthcare system,” said Lopez. “We would all benefit from a world in which it’s as easy to find a great doctor as it is a book a Grab taxi.”

In press statement, AppWorks partner Andy Tsai said, “We noticed Docosan’s potential early on because of its participation in the AppWorks Accelerator. Docosan’s founders demonstrated strong experience and dedication to the healthcare issues in the region. We are proud to be supporting Docosan’s vision of better healthcare access for all.”

Vietnamese electric motorbike startup Dat Bike raises $2.6M led by Jungle Ventures

Son Nguyen, founder and chief executive officer of Dat Bike on one of the startup's motorbikes

Son Nguyen, founder and chief executive officer of Dat Bike

Dat Bike, a Vietnamese startup with ambitions to become the top electric motorbike company in Southeast Asia, has raised $2.6 million in pre-Series A funding led by Jungle Ventures. Made in Vietnam with mostly domestic parts, Dat Bike’s selling point is its ability to compete with gas motorbikes in terms of pricing and performance. Its new funding is the first time Jungle Ventures has invested in the mobility sector and included participation from Wavemaker Partners, Hustle Fund and iSeed Ventures.

Founder and chief executive officer Son Nguyen began learning how to build bikes from scrap parts while working as a software engineer in Silicon Valley. In 2018, he moved back to Vietnam and launched Dat Bike. More than 80% of households in Indonesia, Malaysia, Thailand and Vietnam own two-wheeled vehicles, but the majority are fueled by gas. Nguyen told TechCrunch that many people want to switch to electric motorbikes, but a major obstacle is performance.

Nguyen said that Dat Bike offers three times the performance (5 kW versus 1.5 kW) and 2 times the range (100 km versus 50 km) of most electric motorbikes in the market, at the same price point. The company’s flagship motorbike, called Weaver, was created to compete against gas motorbikes. It seats two people, which Nguyen noted is an important selling point in Southeast Asian countries, and has a 5000W motor that accelerates from 0 to 50 km per hour in three seconds. The Weaver can be fully charged at a standard electric outlet in about three hours, and reach up to 100 km on one charge (the motorbike’s next iteration will go up to 200 km on one charge).

Dat Bike’s opened its first physical store in Ho Chi Minh City last December. Nguyen said the company “has shipped a few hundred motorbikes so far and still have a backlog of orders.” He added that it saw a 35% month-over-month growth in new orders after the Ho Chi Minh City store opened.

At 39.9 million dong, or about $1,700 USD, Weaver’s pricing is also comparable to the median price of gas motorbikes. Dat Bike partners with banks and financial institutions to offer consumers twelve-month payment plans with no interest.

“These guys are competing with each other to put the emerging middle class of Vietnam on the digital financial market for the first time ever and as a result, we get a very favorable rate,” he said.

While Vietnam’s government hasn’t implemented subsidies for electric motorbikes yet, the Ministry of Transportation has proposed new regulations mandating electric infrastructure at parking lots and bike stations, which Nguyen said will increase the adoption of electric vehicles. Other Vietnamese companies making electric two-wheeled vehicles include VinFast and PEGA.

One of Dat Bike’s advantages is that its bikes are developed in house, with locally-sourced parts. Nguyen said the benefits of manufacturing in Vietnam, instead of sourcing from China and other countries, include streamlined logistics and a more efficient supply chain, since most of Dat Bike’s suppliers are also domestic.

“There are also huge tax advantages for being local, as import tax for bikes is 45% and for bike parts ranging from 15% to 30%,” said Nguyen. “Trade within Southeast Asia is tariff-free though, which means that we have a competitive advantage to expand to the region, compare to foreign imported bikes.”

Dat Bike plans to expand by building its supply chain in Southeast Asia over the next two to three years, with the help of investors like Jungle Ventures.

In a statement, Jungle Ventures founding partner Amit Anand said, “The $25 billion two-wheeler industry in Southeast Asia in particular is ripe for reaping benefits of new developments in electric vehicles and automation. We believe that Dat Bike will lead this charge and create a new benchmark not just in the region but potentially globally for what the next generation of two-wheeler electric vehicles will look and perform like.”

The 2022 Mercedes-Benz EQS stakes its claim on a luxury, electric future

A day spent driving a pre-production 2022 Mercedes Benz EQS provided an up-close look at what the German automaker has been doing with the billions of dollars it has dedicated to electrification.

The EQS is a meticulously designed flagship sedan that brings together the automaker’s MBUX infotainment system, a new electric platform and advancements in performance. It is an unapologetic pursuit to set a new benchmark for a full-size luxury sedan that happens to be electric.

The luxury electric sedan is meant to show American consumers what Mercedes can deliver (and will) in the future with EVs. And the stakes are high. The German automaker is banking on a successful rollout of the EQS in North America.

Mercedes-Benz-EQS

Image Credits: Mercedes-Benz

“It’s the beginning of a complete new era, because so far we had a completely flexible platform in place with hybrids, ICE, and BEVs,” said Christophe Starzynski, head of the EQ brand, who added that Mercedes will add three additional electric vehicles to its U.S. portfolio by 2025, including the EQE and two additional SUVs. “This is the first time that we really designed and developed and put all the technology in a battery electric vehicle.”

The EQS is the 17-foot long flagship derivative of the S-Class, Mercedes-Benz’s top-of-the-line luxury sedan that has a base price of $110,000. (So far, pricing on EQS hasn’t been revealed.) It’s stocked with its best tech to date. While most customers won’t appreciate all the doodads optioned on this car, they might enjoy knowing it’s all stored in that extensive infotainment cloud, or only a software update away.

The first drive

A fully loaded EQS is such a leap forward that it makes the new S Class already feel of another era.

The EQS 580 4Matic model I tested came spec’d out with the 56-inch Hyperscreen, head up display, acoustic glass, rear seat entertainment and an air filtration system, which Starzynski said pre-dates the pandemic, but naturally feels very of the moment.

At writing, the car’s exterior details are under wraps until its reveal April 15. The version I tested was partially cloaked, so I can’t tell you much about the sculpted nuances of its A pillar.

Mercedes-Benz-EQS

Image Credits: Mercedes-Benz

My five-year-old daughter accompanied me on the test drive. We started at the Mercedes Manhattan dealership, where EQS was displayed in the store window. As I approached the car, the driver door automatically swung open with great fanfare. From the vantage point of her booster seat, my daughter played with the rear screen that hovered in front of her. She selected ambient lighting in pink and purple hues for the cabin. Her top takeaway: “It’s a sparkly rainbow ride.”

The backseat experience actually matters quite a bit, because EQS is chauffeur friendly, a prereq for luxury cars in China, the hub for EV sales for the next decade.

Mercedes EQS

Image Credits: Mercedes-Benz

Meanwhile, up front, for a tall person like myself, the spacious driver seat — accented by the pillow that cradled the base of my neck — was one the most comfortable rides I’ve had. Once belted in, the car is all mood. Cue the lighting and sound design bells and whistles.

As much as I could appreciate the sensation of sonic silver waves to compensate for that faint EV whir, we soon opted to blast the five year old’s current favorite Barbie soundtrack from the billowing set of 15 Burmester speakers. (There are unfortunate compromises involved in bringing a five year old along for the ride.)

Everything in the EQS emanates from the 56-inch Hyperscreen OLED, which is divided into three separate displays spanning door-to-door. In person, it’s not as intrusive as it appears in photos. Its elliptical contour has a gamer-like cockpit sensibility.

The MBUX functions are housed on the main 17.7-inch OLED screen, to the right of the steering wheel. The passenger can opt to personalize their own touchscreen, too. Inside the powerful computation system is 24-gigabytes of RAM and 46.4 GB per second RAM memory, and eight CPU cores.

Mercedes EQS

Image Credits: Mercedes-Benz

The user experience

Simplicity is a hallmark of good design, embodied in the best of Apple products. In contrast, Mercedes has always been big on delivering a dizzying set of user experience options and providing multiple approaches to access information. That inclination carries over in the EQS, using controls on the steering wheel, arm rest, and main screen. On test drives, I find multiple options for controls distracting. I am never sure if it’s because I haven’t had the time to fully adapt, in the same way that a new feature on a smartphone takes a couple weeks to get used to, or if it’s plain overkill. I noted the heads up display, but it was one place too many to look during the time I spent in the car.

Mercedes-Benz-EQS

Image Credits: Mercedes-Benz

What intrigued me is that the MBUX system studies driver behavior over time. By the end of my ride, the screen module reminded me that perhaps I would like to tee up my active seat massage once more. In short, I could bypass the other controls and focus on what I wanted to use most. Voice commands were decent, though my high pitch tenor managed to stump the system. I have yet to meet an automotive voice system that understands me all the time.

There’s no room for analog in the EQS experience. The graphics are crisp, multidimensional-dimensional, and clear. One downside was that my fingerprints smudged on the touchscreens. Pro tip: bring along a good screen spritzer and cloth before shooting photos. Another small grip was that the steering wheel seemed to be designed for a person with much larger hands than mine, and it was a little awkward to access all the functions stored on the wheel, which forced me to glance down to find the right spots. I ended up relying on the MBUX center screen to adjust settings.

My favorite part of the EQS user experience is how it handled messaging about range. At all times, the various screens on the dash displayed how many miles I had left, if my calculations for my destination were realistic, and mapped where I could go to charge.

The range

About that battery. The model I drove had a 107.8 kWh battery pack powering two electric motors used in the all-wheel-drive system. The range according to European testing is 470 miles, but could drop down according to U.S. EPA testing standards. I drove about 125 miles roundtrip from Manhattan to a little town called Beacon and back without even worrying about recharging.

Mercedes EQS

Image Credits: Mercedes Benz

I pulled up the screen to plot out ChargePoint options presented one click away. It also distinguishes which stations have 200 kW DC fast-chargers available, which Mercedes says take about 15 minutes to recharge. To assuage consumers on battery life, Mercedes has added a warranty that covers loss of capacity of the battery, valid for a decade after purchase, or up 150,000 miles.

The takeaway

The drive itself delivered powerful performance, as one would expect with 517 hp and 406 lb-ft of torque at work. The EQS beats out competitors drag coefficient at .20, which is a fun car enthusiast fact, but not essential knowledge for regular drivers.

It always takes a moment to get comfortable driving a long saloon, but like the S Class, the EQS handles its proportions with grace, and it turns with ease due to standard rear-wheel steering. It mirrors the S-Class safety features and ADAS systems. The drive settings include classic and sport, achievable through steering wheel controls or through the armrest. I am generally a sporty driver, and I liked the peppy feedback that this mode delivered.

“Of course we will be developing it further,” Starzysnki said, adding that the ADAS features will improve via software updates. Customizable updates such as light settings are also available for download.

The biggest differentiator of the EQS drive is its battery recuperation system. Intelligent recuperation mode optimizes the battery and controls driver actions. Normal recuperation dialed down the interference. I played around with one-pedal driving on the highway. Drivers can also choose no support at all.

Mercedes-Benz-EQS

Image Credits: Mercedes-Benz

Mainstream EV adoption in the United States feels like its right around the corner — and it could come even faster than expected if President Biden’s infrastructure plan passes. But automakers will need to do much more than edge out Tesla if they hope to capture the attention and dollars of U.S. consumers. EVs accounted for just 1.8% of U.S. car sales in 2020, according to Experian and reported in Automotive News.

Sweeping change takes time, money and a long-term commitment. The next level Mercedes-Benz EQS edges the playing field one step closer to the tipping point when the EV part of the architecture is no longer newsworthy, but the expectation for a luxury vehicle.

(Disclosure: In 2018, I was a Mercedes-Benz EQ fellow for the Summit Series program, which was sponsored by the automaker, and I was featured on the EQ homepage.)

How one founder identified a huge healthcare gap and acquired the skills necessary to address it

Our new podcast Found is now available, and the first episode features guest Iman Abuzeid, co-founder and CEO of Incredible Health. Abuzeid’s story of founding and building Incredible Health, a career platform for healthcare professionals focusing specifically on nurses, is all about a focused entrepreneur building a unique skill set, and acquiring the experience necessary to create a world-leading solution.

Abuzeid went to medical school and acquired her MD, but decided before residency to instead go get an MBA from Wharton, in order to pursue her dream of entrepreneurship, inspired by two generations of entrepreneurs in the family that preceded her. After eventually making her way to Silicon Valley and working in a couple of other startups in the healthcare space, Abuzeid took important lessons away from those experiences about what not to do when running your own company, and embarked on building her own with co-founder Rome Portlock, now the company’s CTO.

Incredible Health is tackling a huge challenge — the shortfall of availability of skilled nurses, and the lack of mature, sophisticated career resources to help those nurses in their professional life. COVID-19 threw those issues into stark relief, and Incredible Health adjusted its game plan to adapt to its users’ needs. Abuzeid tells us all about how she made those calls, and also how she convinced venture investors to come along for the ride.

We hope you enjoy this episode, and don’t forget to subscribe in Apple Podcasts, Spotify, or your podcast app of choice. We’d love to hear your feed back, too — either on Twitter or via email, and tune in weekly for more episodes.

Found is hosted by Darrell Etherington and Jordan Crook, and is produced, mixed and edited by Yashad Kulkarni. TechCrunch’s audio products are managed by Henry Pickavet, and Bryce Durbin created the show’s artwork. Found published weekly on Friday afternoons, and you can find past episodes on TechCrunch here.

China gets serious about antitrust, fines Alibaba $2.75B

Chinese regulators have hit Alibaba with a record fine of 18 billion yuan (about $2.75 billion) for violating anti-monopoly rules as the country seeks to rein in the power of its largest internet conglomerates.

In November, China proposed sweeping antitrust regulations targeting its interent economy. In late December, the State Administration for Market Regulation said it had launched an antitrust probe into Alibaba, weeks after the authorities called off the initial public offering of Ant Group, the financial affiliate of Alibaba.

SAMR, the country’s top market regulator, said on Saturday it had determined that Alibaba had been “abusing market dominance” since 2015 by forcing its Chinese merchants to sell exclusively on one e-commerce platform instead of letting them choose freely among different services, such as Pinduoduo and JD.com. Vendors are often pressured to side with Alibaba to take advantage of its enormous user base.

Since late 2020, a clutch of internet giants including Tencent and Alibaba have been hit with various fines for violating anti-competition practices, for instance, failing to clear past acquisitions with regulators. The meager sums of these penalties were symbolic at best compared to the benefits the tech firms reap from their market concentration. No companies have been told to break up their empires and users still have to hop between different super-apps that block each other off.

In recent weeks, however, there are signs that China’s antitrust authorities are getting more serious. The latest fine on Alibaba is equivalent to 4% of the company’s revenue generated in the calendar year of 2019 in China.

“Today, we received the Administrative Penalty Decision issued by the State Administration for Market Regulation of the People’s Republic of China,” Alibaba said in a statement. “We accept the penalty with sincerity and will ensure our compliance with determination. To serve our responsibility to society, we will operate in accordance with the law with utmost diligence, continue to strengthen our compliance systems and build on growth through innovation.”

The thick walls that tech companies build against each other are starting to break down, too. Alibaba has submitted an application to have its shopping deals app run on WeChat’s mini program platform, Wang Hai, an Alibaba executive, recently confirmed.

For years, Alibaba services have been absent from Tencent’s sprawling lite app ecosystem, which now features millions of third-party services. Vice versa, WeChat is notably missing from Alibaba’s online marketplaces as a payment method. If approved, the WeChat-powered Alibaba mini app would break with precedent of the pair’s long stand-off.

Watch a monkey equipped with Elon Musk’s Neuralink device play Pong with its brain

Elon Musk’s Neuralink, one of his many companies and the only one currently focused on mind control (that we’re aware of), has released a new blog post and video detailing some of its recent updates — including using its hardware to make it possible for a monkey to play pong with only its brain.

In the video above, Neuralink demonstrates how it used its sensor hardware and brain implant to record a baseline of activity from this macaque (named ‘Pager’) as it played a game on-screen where it had to move a token to different squares using a joystick with its hand. Using that baseline data, Neuralink was able to use machine learning to anticipate where Pager was going to be moving the physical controller, and was eventually able to predict it accurately before the move was actually made. Researchers then removed the paddle entirely, and eventually did the same thing with Pong, ultimately ending up at a place where Pager no longer was even moving its hand on the air on the nonexistent paddle, and was instead controlling the in-game action entirely with its mind via the Link hardware and embedded neural threads.

The last we saw of Neuralink, Musk himself was demonstrating the Link tech live in August 2020, using pigs to show how it was able to read signals from the brain depending on different stimuli. This new demo with Pager more clearly outlines the direction that the tech is headed in terms of human applications, since, as the company shared on its blog, the same technology could be used to help patients with paralysis manipulate a cursor on a computer, for instance. That could be applied to other paradigms as well, including touch controls on an iPhone, and even typing using a virtual keyboard, according to the company.

Musk separately tweeted that in fact, he expects the initial version of Neuralink’s product to be able to allow someone with paralysis that prevents standard modes of phone interaction to use one faster than people using their thumbs for input. He also added that future iterations of the product would be able to enable communication between Neuralinks in different parts of a patient’s body, transmitting between an in-brain node and neural pathways in legs, for instance, making it possible for “paraplegics to walk again.”

These are obviously bold claims, but the company cites a lot of existing research that undergirds its existing demonstrations and near-term goals. Musk’s more ambitious claims, should, like all of his projections, definitely be taken with a healthy dose of skepticism. He did add that he hopes human trials will begin to get underway “hopefully later this year,” for instance – which is already two years later than he was initially anticipating those might start.

Taiwan-based MLOps startup InfuseAI raises $4.3M Series A led by Wistron Corporation

AI models not only take time to build and train, but also to deploy in an organization’s workflow. That’s where MLOps (machine learning operations) companies come in, helping clients scale their AI technology. InfuseAI, a MLOps startup based in Taiwan, announced today it has raised a $4.3 million Series A, led by original design manufacturer Wistron Corporation, with participation from Hive Ventures, Top Taiwan Venture Capital Group and Silicon Valley Taiwan Investments.

Founded in 2018, InfuseAI says the market for MLOps solutions is worth $30 million a year in Taiwan, with the global market expected to reach about $4 billion by 2025, according to research firm Cognilytica. Its clients include E.SUN, one of Taiwan’s largest banks, SinoPac Holdings and Chimei.

InfuseAI helps companies deploy and manage machine learning models with turnkey solutions like PrimeHub, a platform that includes a model training environment, cloud or on-premise cluster computing (including container orchestration with Kubernetes) and collaboration tools for teams. Another product, called PrimeHub Deploy, lets clients train, deploy, update and monitor AI models.

In a press statement, Hive Ventures founder and managing partner Yan Lee said, “As enterprises from manufacturing, healthcare, finance and other sectors seek to scale their AI operations and model deployments, they will require a platform like InfuseAI to allow seamless collaboration between developers and data scientists. InfuseAI fits perfectly into our investment thesis which is focused on platforms and software in the enterprise adoption cycle.”

Indian social commerce Meesho valued at $2.1 billion in new $300 million fundraise

Meesho said on Monday it has raised $300 million in a new financing round led by SoftBank Vision Fund 2 as the Indian social commerce startup works to become the “single ecosystem that will enable all small businesses to succeed online.”

The new round — a Series E — gives the five-year-old startup a valuation of $2.1 billion, up from about $600 million – $700 million in the 2019 Series D investment. The Indian startup, which has raised about $490 million to date, said existing investors Facebook, Prosus Ventures, Shunwei Capital, Venture Highway, and Knollwood Investment also participated in the new round.

This appears to be Shunwei Capital’s first investment in an Indian startup in nearly a year. New Delhi last year introduced a rule to require its approval before a Chinese investor could write a check to an Indian firm.

Bangalore-based Meesho operates an eponymous online marketplace that connects sellers with customers on social media platforms such as WhatsApp, Facebook and Instagram. Its offerings include order management, taking care of logistics, online payments, real-time shop updates, and allowing businesses to get their customers to subscribe.

The startup claims to have a network of more than 13 million entrepreneurs, a majority of whom are women, from hundreds of Indians towns who largely deal with apparel, home appliances and electronics items.

If Meesho’s mission has to be put in a short phrase, it’d be: “financial independence of women”.

So, it’s only apt that @meeshoapp has first been featured in Play Store on Women’s Day by Google India, and now in Independence Day spotlight.

Recognition of real impact at scale! pic.twitter.com/jcFz2ZOrDA

— Sudhanshu Shekhar (@sdhskr) August 10, 2019

Meesho said it will deploy the fresh capital to help 100 million individuals and small businesses in the country to sell online. “In the last one year, we have seen tremendous growth across small businesses and entrepreneurs seeking to move their businesses online,” said Vidit Aatrey, co-founder and chief executive of Meesho, in a statement.

“We have been closely tracking Meesho for the last 18 months and have been impressed by their growth, daily engagement metrics, focus on unit economics and ability to create a strong team. We believe Meesho provides an efficient platform for SME suppliers and social resellers to onboard the e-commerce revolution in India and help them provide personalized experience to consumers,” said Sumer Juneja, partner at SoftBank Investment Advisers, in a statement.

In a recent report, UBS analysts identified social commerce and business-to-business marketplaces as potential sources of competition to e-commerce firms such as Amazon and Flipkart in India.

Social commerce is one prominent bets to take on modern e-commerce that has struggled to make inroads in India, despite billions of dollars ploughed by Amazon and Flipkart. Another bet is digitizing neighborhood stores in the country — without so much of the social element — that dot tens of thousands of towns, cities and villages in India. Global giants Facebook and Google are backing both the horses.

“Globally, SoftBank has always been excited to back founders that provide unique solutions for the local market. By using the power of artificial intelligence and machine learning, Meesho has created a platform for many small business owners to sell to the next cohort of internet users. We look forward to being a part of this journey,” said Munish Varma, Managing Partner at SoftBank Investment Advisers, in a statement.

You might have just missed the best time to sell your startup

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday? Sign up here

Happy Saturday, everyone. I do hope that you are in good spirits and in good health. I am learning to nap, something that has become a requirement in my life after I realized that the news cycle is never going to slow down. And because my partner and I adopted a third dog who likes to get up early, please join me in making napping cool for adults, so that we can all rest up for Vaccine Summer. It’s nearly here.

On work topics, I have a few things for you today, all concerning data points that matter: Q1 2021 M&A data, March VC results from Africa, and some surprising (to me, at least) podcast numbers.

On the first, Dan Primack shared a few early first-quarter data points via Refinitiv that I wanted to pass along. Per the financial data firm, global M&A activity hit $1.3 trillion in Q1 2021, up 93% from Q1 2020. U.S. M&A activity reached an all-time high in the first quarter, as well. Why do we care? Because the data helps underscore just how hot the last three months have been.

I’m expecting venture capital data itself for the quarter to be similarly impressive. But as everyone is noting this week, there are some cracks appearing in the IPO market, as the second quarter begins that could make Q2 2021 a very different beast. Not that the venture capital world will slow, especially given that Tiger just reloaded to the tune of $6.7 billion.

On the venture capital topic, African-focused data firm Briter Bridges reports that “March alone saw over $280 million being deployed into tech companies operating across Africa,” driven in part by “Flutterwave’s whopping $170 million round at a $1 billion valuation.”

The data point matters as it marks the most active March that the African continent has seen in venture capital terms since at least 2017 — and I would guess ever. African startups tend to raise more capital in the second half of the year, so the March result is not an all-time record for a single month. But it’s bullish all the same, and helps feed our general sentiment that the first quarter’s venture capital results could be big.

And finally, Index Ventures’ Rex Woodbury tweeted some Edison data, namely that “80 million Americans (28% of the U.S. 12+ population) are weekly podcast listeners, +17% year-over-year.” The venture capitalist went on to add that “62% of the U.S. 12+ population (around 176 million people) are weekly online audio listeners.”

As we discussed on Equity this week, the non-music, streaming audio market is being bet on by a host of players in light of Clubhouse’s success as a breakout consumer social company in recent months. Undergirding the bets by Discord and Spotify and others are those data points. People love to listen to other humans talk. Far more than I would have imagined, as a music-first person.

How nice it is to be back in a time when consumer investing is neat. B2B is great but not everything can be enterprise SaaS. (Notably, however, it does appear that Clubhouse is struggling to hold onto its own hype.)

Look I can’t keep up with all the damn venture capital rounds

TechCrunch Early Stage was this week, which went rather well. But having an event to help put on did mean that I covered fewer rounds this week than I would have liked. So, here are two that I would have typed up if I had had the spare hours:

  • Striim’s $50 million Series C. Goldman led the transaction. Striim, pronounced stream I believe, is a software startup that helps other companies move data around their cloud and on-prem setups in real time. Given how active the data market is today, I presume that the TAM for Striim is deep? Quickly flowing? You can supply a better stream-centered word at your leisure.
  • Kudo’s $21 million Series A. I covered Kudo last July when it raised $6 million. The company provides video-chat and conferencing services with support for  real-time translation. It had a good COVID-era, as you can imagine. Felicis led the A after taking part in the seed round. I’ll see if I can extract some fresh growth metrics from the company next week. One to watch.

And two more rounds that you also might have missed that you should not. Holler raised $36 million in a Series B. Per our own Anthony Ha, “[y]ou may not know what conversational media is, but there’s a decent chance you’ve used Holler’s technology. For example, if you’ve added a sticker or a GIF to your Venmo payments, Holler actually manages the app’s search and suggestion experience around that media.”

I feel old.

And in case you are not paying enough attention to Latin American tech, this $150 million Uruguayan round should help set you straight.

Various and sundry

Finally this week, some good news. If you’ve read The Exchange for any length of time, you’ve been forced to read me prattling on about the Bessemer cloud index, a basket of public software companies that I treat with oracular respect. Now there’s a new index on the market.

Meet the Lux Health + Tech Index. Per Lux Capital, it’s an “index of 57 publicly traded companies that together best represent the rapidly emerging Health + Tech investment theme.” Sure, this is branded to the extent that, akin to the Bessemer collection, it is tied to a particular focus of the backing venture capital firm. But what the new Lux index will do, as with the Bessemer collection, is track how a particular venture firm is itself tracking the public comps for their portfolio.

That’s a useful thing to have. More of this, please.

Alex

Daily Crunch: Apple Arcade expands with classic games

Apple adds classic titles to Apple Arcade, Microsoft experiences an outage and Coinbase is going public. This is your Daily Crunch for April 2, 2021.

The big story: Apple Arcade expands with classic games

Until now, Apple’s game subscription service was limited to exclusive new titles, but today it’s introducing two new categories: App Store Greats (popular iPhone games like Monument Valley+, Fruit Ninja Classic+, Cut the Rope Remastered and Badland+) and Timeless Classics (board games and puzzle games, such as Backgammon+ and Chess Play and Learn+).

This is a major expansion to the Apple Arcade back catalog, but it’s not simply a matter of putting previously free games behind a paywall. The Arcade versions of these titles will be ad-free and without in-app purchases — you’re never paying anything beyond the $4.99 monthly subscription fee. Also, some of these games had become unavailable in their original forms due to iOS and hardware updates.

The tech giants

Microsoft outage knocks sites and services offline — Microsoft stumbled back online Thursday after an hours-long outage in the middle of the U.S. west coast working afternoon.

Startups, funding and venture capital

Coinbase to direct list on April 14th, provide financial update on April 6th — The company will trade under the ticker symbol “COIN.”

Uruguayan payments startup dLocal quadruples valuation to $5B with $150M raise — This means that the five-year-old Uruguayan company has effectively quadrupled its valuation in a matter of months.

Backflip offers an easier way to turn used electronics into cold, hard cash — The company offers customers cash on delivery for their used electronics, which could be anything from iPhones to Game Boys.

Advice and analysis from Extra Crunch

How is edtech spending its extra capital? — Edtech M&A activity has continued to swell.

Tech in Mexico: A confluence of Latin America, the US and Asia — LatAm entrepreneurs seem to be looking to Asian tech giants for product inspiration and growth strategies.

RPA market surges as investors, vendors capitalize on pandemic-driven tech shift — Robotic process automation came to the fore during the pandemic as companies took steps to digitally transform.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

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Tech in Mexico: A confluence of Latin America, the US and Asia

Kevin Xu
Contributor

Kevin Xu is an early-stage investor and founder of Interconnected, a bilingual newsletter covering tech, business and U.S.-Asia relations.

Mexico has been known as an up-and-coming tech hub and a gateway to the Latin American market. As an investor focused on developer-centered products, open-source startups and infrastructure technology companies with a particular interest in emerging market innovation, I have been wanting to do some firsthand learning there.

So, despite the ongoing pandemic, I took all the necessary precautions and spent roughly seven weeks in Mexico from January to March. I spent most of my time meeting founders to get a handle on what they are building, why they are pursuing those ideas, and how the entire ecosystem is evolving to support their ambitions.

Knowledge transfer is not the only trend flowing in the U.S.-Asia-LatAm nexus. Competition is afoot as well.

The U.S.-Asia-LatAm nexus

One fascinating, though not surprising, observation was how much LatAm entrepreneurs look to Asian tech giants for product inspiration and growth strategies. Companies like Tencent, DiDi and Grab are household names among founders. This makes sense because the market conditions in Mexico and other parts of LatAm resemble China, India and Southeast Asia more than the U.S.

What often happens is entrepreneurs first look to successful startups in the U.S. to emulate and localize. As they find product-market fit, they start to look to Asian tech companies for inspiration while morphing them to suit local needs.

One good example is Rappi, an app that started out as a grocery delivery service. Its future ambition is squarely to become the superapp of LatAm: It is expanding aggressively both geographically and productwise into delivery for restaurant orders, pharmacy and even COVID tests. It’s also introducing new payment, banking and financial-service products. Rappi Pay launched in Mexico just a few weeks ago, while I was still in the country.

Rappi now looks more like Meituan and Grab than any of its U.S. counterparts, and that’s not an accident. SoftBank, whose portfolio contains many of these Asian tech giants, invested heavily in Rappi’s previous two rounds and now has a $5 billion fund dedicated to the LatAm region. The knowledge and experience accumulated from Asian tech in the last 10 years is transferring to like-minded firms like Rappi, right under Silicon Valley’s proverbial nose.

U.S.-Asia-LatAm competition

Knowledge transfer is not the only trend flowing in the U.S.-Asia-LatAm nexus. Competition is afoot as well.

Because of similar market conditions, Asian tech giants are directly expanding into Mexico and other LatAm countries. The one I witnessed up close during my visit was DiDi.

DiDi’s foray into LatAm started in January 2018 with its acquisition of 99, a Brazilian ride-sharing company. In April 2018, DiDi entered Mexico with its bread-and-butter ride-sharing service. It wasn’t until April 2019 that DiDi launched its food delivery service, DiDi Food, in Monterrey and Guadalajara — two of the largest cities in Mexico. Its expansion hasn’t slowed down since, with a 10% extra earnings incentive to lure delivery drivers.

DiDi delivery worker recruitment promotion banner outside venue

Image Credits: Kevin Xu

My Airbnb in Mexico City happened to be two blocks away from the large WeWork building where DiDi’s local office was located. Every day, I saw a long line of people responding to the earning incentives — waiting outside to get hired as DiDi delivery workers.

Meanwhile, the Uber office that’s literally one block away had hardly any foot traffic. As Uber and Rappi fight for more wealthy consumers, DiDi is working to attract lower-income users to grab market share, hoping that one day some of these people will reach the middle class and become profitable customers.

Celonis announces significant partnership with IBM to sell its process mining software

Before you can improve a workflow, you have to understand how work advances through a business, which is more complex than you might imagine inside a large enterprise. That’s where Celonis comes in. It uses software to identify how work moves through an organization and suggests more efficient ways of getting the same work done, also known as process mining

Today, the company announced a significant partnership with IBM where IBM Global Services will train 10,000 consultants worldwide on Celonis. The deal gives Celonis, a company with around 1200 employees access to the massive selling and consulting unit, while IBM gets a deep understanding of a piece of technology that is at the front end of the workflow automation trend.

Miguel Milano, chief revenue officer at Celonis says that digitizing processes has been a trend for several years. It has sped up due to COVID, and it’s partly why the two companies have decided to work together. “Intelligent workflows, or more broadly spoken workflows built to help companies execute better, are at the heart of this partnership and it’s at the heart of this trend now in the market,” Milano said.

The other part of this is that IBM now owns Red Hat, which it acquired in 2018 for $34 billion. The two companies believe that by combining the Celonis technology, which is cloud based, with Red Hat, which can span the hybrid world of on premises and cloud, the two together can provide a much more powerful solution to follow work wherever it happens.

“I do think that moving the [Celonis] software into the Red Hat OpenShift environment is hugely powerful because it does allow in what’s already a very powerful open solution to now operate across this hybrid cloud world, leveraging the power of OpenShift which can straddle the worlds of mainframe, private cloud and public cloud. And data straddle those worlds, and will continue to straddle those worlds,” Mark Foster, senior vice president at IBM Services explained.

You might think that IBM, which acquired robotic process automation vendor, WDG Automation last summer, would simply attempt to buy Celonis, but Foster says the partnership is consistent with the company’s attempt to partner with a broader ecosystem.

“I think that this is very much part of an overarching focus of IBM with key ecosystem partners. Some of them are going to be bigger, some of them are going to be smaller, and […] I think this is one where we see the opportunity to connect with an organization that’s taking a leading position in its category, and the opportunity for that to take advantage of the IBM Red Hat technologies…” he said.

The companies had already been working together for some time prior to this formal announcement, and this partnership is the culmination of that. As this firmer commitment to one another goes into effect, the two companies will be working more closely to train thousands of IBM consultants on the technology, while moving the Celonis solution into Red Hat OpenShift in the coming months.

It’s clearly a big deal with the feel of an acquisition, but Milano says that this is about executing his company’s strategy to work with more systems integrators (SIs), and while IBM is a significant partner it’s not the only one.

“We are becoming an SI consulting-driven organization. So we put consulting companies like IBM at the forefront of our strategy, and this [deal] is a big cornerstone of our strategy,” he said.

Otrium raises $120 million for its end-of-season fashion marketplace

Otrium has raised a $120 million round just a year after raising its $26 million Series B round. BOND and returning investor Index Ventures are leading the round. Existing investor Eight Roads Ventures is also participating.

The concept behind Otrium is quite simple. When items reach the end-of-season status, brands can list those items on Otrium and keep selling them. Otrium is currently available in Europe. Right now, many brands have their own end-of-season sales. But there are some limits to this model.

Those companies often can’t sell their entire back inventory this way. Moreover, the most luxurious fashion brands don’t necessarily want to put a cheaper price tag on their items in their own stores. That’s why a lot of clothing produced stays unsold — and by unsold, it means that those items often get destroyed.

With Otrium, brands can add another sales channel for those specific items. And selling those items online makes a ton of sense as you don’t want to manage small end-of-season inventories across multiple stores. One big online inventory is all you need.

And because some brands are reluctant about selling outdated items, Otrium tries to be as friendly as possible with fashion companies. They retain control over pricing, merchandising and visibility of their excess inventory.

The startup also recently launched advanced analytics. The idea here is that Otrium can help brands identify evergreen products that should remain available year after year.

“We believe that the fashion world will see a rebalancing in the next few years, with more sales being driven by iconic items that brands sell year after year, and will be less reliant on new seasonal launches,” co-founder and CEO Milan Daniels said in a statement.

And it would be a win-win for everyone involved. Otrium would end up selling items that remain relevant for a longer time. And fashion brands could slowly build an evergreen collection of items that would nicely complement their fast fashion collections.

With today’s funding round, Otrium plans to expand to the U.S. The company currently works with several well-known fashion houses, such as Karl Lagerfeld, Joseph, Anine Bing, Belstaff, Reiss and ASICS.

Image Credits: Otrium

Everli, the European marketplace for online grocery shopping, bags $100M Series C

Everli, the European marketplace for online grocery shopping that started in Italy but now also operates in Poland, Czech Republic and France, has raised a $100 million in Series C funding.

The round is led by Verlinvest, with participation from new investors Luxor, DN Capital, C4 Ventures, and Convivialité Ventures. FITEC (part of Fondo Italiano d’Investimento), 360 Capital, Innogest, and DIP also followed on.

Everli, formerly called Supermercato24, says it will use the injection of capital to accelerate growth and further expand its international footprint.

Founded in 2014, Everli lets customers order from local supermarkets for delivery. The company uses gig economy-styled personal shoppers who go into the store and ‘pick’ the products ordered and then deliver them same-day, or for an added cost within an hour. The company charges a delivery fee to consumers, but also generates revenue from fees charged to partnering merchants, and, notably, through advertising.

It has become the delivery partner of some of Europe’s largest grocery brands, offering access to over 300,000 products across the 70 cities it operates in. And, like other online grocery offerings, Everli has benefited from a boost in e-commerce and a reliance on delivery services prompted by the pandemic and country lockdowns.

“Everli is focused specifically on the grocery space,” says Federico Sargenti, CEO at Everli. “Rather than small baskets, or picking up just the basic essentials, Everli is focused on delivering whatever you need right up to your full weekly shop, with same-day delivery and a one-hour delivery window of your choice.”

He says that what further differentiates Everli is its strong relationships with retailers, and the use of their existing infrastructure. “Instead of being tethered and restricted to a radius around our own expensive central warehouses, we are able to operate across a much wider geographical footprint, entering small-to-medium density areas and offering many customers their first opportunity to receive same day groceries, [all] while retaining sustainable unit economics”.

Sargenti describes Everli as more similar to Instacart than many other European delivery firms, including the new crop of dark stores or those that offer groceries as a secondary service to takeouts. “[This is] why we’re leading the grocery space in Europe and securing brands like Lidl, Kaufland, and Carrefour,” adds Sargenti.

In 2020, Everli sales almost quadrupled to $130 million. That growth is happening more and more outside Italy, with its international expansion now responsible for over 20% of orders.

“We are proud to have played a role in helping many people during these difficult times, but we are only getting started, as this industry will never be the same again,” says Sargenti in a statement. “The shift to online delivery is not reversing, and expectations on all sides are only increasing. We have built a model which we believe offers unparalleled value to consumers, through wide access to the retailers and products they love, even in less urban areas, and to retailers, who are now able to affordably compete online and reach a whole new consumer base”.

Adds Simone Sallustio, Executive Director at Verlinvest: “Everli combines its tech & data excellence with the grocery retail experience of its partners and this combination provides it with the perfect position to cement itself as the European e-grocery market leader, delivering the best experience to consumers, value to retail partners, and digital activation to brands”.

A Supreme Court ruling affirming Canada’s carbon tax opens the door for a startup explosion

Last week the Canadian Supreme Court ruled that the national government’s plan to tax carbon emissions was legal in a decision that could have significant implications for the nation’s climate-focused startup companies.

The ruling put an end to roughly two years of legal challenges and could set the stage for a boom in funding and commercial support for Canadian startup companies developing technologies to curb greenhouse gas emissions, according to investors and entrepreneurs representing some of the world’s largest utilities and petrochemical companies.

“The high price on carbon has the potential to make Canada a powerhouse for scaling up breakthrough decarbonization technologies and for deploying solutions like carbon capture, industrial electrification, and hydrogen electrolysis,” said one investor who works with a fund that backs startups on behalf of large energy businesses.

This 2018 Greenhouse Gas Pricing Act is the cornerstone of the Canadian climate policy pushed through by Prime Minister Justin Trudeau. It establishes minimum pricing standards that all provinces have to meet but gives the provinces the ability to set higher prices. So far, seven of the nation’s 13 provinces are currently paying the “backstop” rate set by the national government.

That price is C$30 per tonne of carbon dioxide released, but is set to rise to C$170 per tonne by 2030. That figure is just a bit higher than the current prices that Californians are charged under the state’s carbon pricing plan and roughly four times the price on carbon set by the Northeastern Regional Greenhouse Gas Initiative.

Under the plan, much of the money raised through the tax levied by the Canadian government would be used to support projects and technologies that reduce greenhouse gas emissions or create more sustainable approaches to industry.

“Climate change is real. It is caused by greenhouse gas emissions resulting from human activities, and it poses a grave threat to humanity’s future,” Chief Justice Richard Wagner wrote, on behalf of the majority, in the Supreme Court ruling.

Three provinces — Alberta, Ontario, and Saskatchewan challenged the legality of the greenhouse gas policy, and Alberta’s challenge was allowed to proceed to the high court — holding up the national implementation of the pricing scheme.

With the roadblocks removed, entrepreneurs and investors around the world expect the carbon scheme to quickly boost the prospects of Canadian startups.

“This represents underlying government support and a huge pot of money. If you wanted macro support for an underlying shift in sectoral developments that could substantiate and support tech companies working on climate change mitigation what better then when the government has told you that we care about this and money is free?” said BeZero Carbon founder, Tommy Ricketts. “There couldn’t be a better condition for startups in Canada.”

Companies that stand to directly benefit from a carbon tax in Canada include businesses like Kanin Energy, which develops decarbonization projects, including waste heat to power; CERT, which is currently competing in the carbon Xprize and is working on a way to convert carbon dioxide to ethylene; and SeeO2, a company also working on carbon dioxide conversion technologies.

Geothermal technologies like Quaise and Eavor could also see a boost as will companies that focus on the electrification of the transportation industry in Canada.

Farther afield are the companies like Planetary Hydrogen, which combines hydrogen production and carbon capture in a way that also contributes to ocean de-acidification.

“Think about the gas at the pump. That is going to get charged extra,” said one investor who works for the venture arm of one of the largest oil and gas companies in the world, who was not authorized to speak to the press.  “For cleaner energy the price will definitely be reduced. And think about where this tax is going. Most of the tax is going to go to government funding into cleantech or climate-tech companies. So you have a double boost for startups in the carbon footprint reduction area.”

Apple releases iPhone, iPad, and Watch security patches for zero-day bug under active attack

Apple has released an update for iPhones, iPads and Watches to patch a security vulnerability under active attack by hackers.

The security update lands as iOS 14.4.2 and iPadOS 14.4.2, which also covers a patch to older devices as iOS 12.5.2. watchOS also updates to 7.3.3.

Apple said the vulnerability, discovered by security researchers at Google’s Project Zero, may have been “actively exploited” by hackers. The bug is found in WebKit, the browser engine that powers the Safari browser across all Apple devices.

It’s not known who is actively exploiting the vulnerabilities, or who might have fallen victim. Apple did not say if the attack was targeted against a small subset of users or if it was a wider attack. It’s the third time (by our count) that Apple has pushed out a security-only update this year to fix flaws under active attack. Earlier this month the company released patches for similar vulnerabilities in WebKit.

Update today.

One of Canada’s top investors, John Ruffolo, is back from the brink with a new $500 million fund

John Ruffolo isn’t as famous as some investors, but he’s very well-known in Canadian business circles. The longtime head of Arthur Andersen’s tech, media, and telecommunications practice, he joined OMERS roughly a decade ago when a former colleague became CEO and brought him aboard the pension giant to create a venture fund.

The idea was to back the most promising Canadian companies, and Ruffolo steered the unit into investments like the social media management Hootsuite, the recently acquired storytelling platform Wattpad, and the e-commerce platform Shopify, among other deals. The last was particularly meaningful, given that OMERS owned around 6% of the company sailing into a 2015 IPO that valued it at roughly $1.3 billion at the time. Alas, owing to the pension fund’s rules, it also began steadily selling that entire stake, even as Shopify’s valued ticked upward. (Its market cap is currently $130 billion.)

Indeed, after helping OMERS subsequently get a growth equity unit off the ground, an antsy Ruffolo left to launch his own fund. Then came COVID, and as if the pandemic weren’t trying enough, Ruffolo further underwent a harrowing ordeal last September. An avid cyclist, he set out to ride 60 miles one sunny morning on a country road, and was knocked far off his bike by a Mack truck in an accident that shattered most of his bones and left him paralyzed from the waist down.

That kind of one-two punch might drive someone to the brink. Instead, six months and multiple surgeries later, Ruffolo, is undergoing training and therapy and intends to bike someday again. He is also very much back to work and just taking the wraps off his new Toronto-based firm, Maverix Private Equity, which has $500 million to invest in “traditional businesses” that already produce at least $100 million revenue and are using tech to grow but could use an outside investor for the first time to really hit the gas.

We talked with Ruffolo about the accident and his new fund this morning. You can hear that conversation here (it starts around the seven-minute mark, and it’s worth a listen). In the meantime, following are excerpts from that interview, edited lightly for length.

TC: You’re surely tired of answering the question, but how are you doing?

JR: Well, when somebody says it’s great to be alive, it is. I actually never knew how close I was to death, to be honest, until about eight days after the accident. When I asked for my phone, just to kind of see what’s going on in the world, there was thousands of messages coming through. And I’m like, ‘What the hell?’

People were copying various articles. I picked off the first one, and it said, ‘John suffered a life threatening injury.’ And I’m kind of thinking, ‘Life threatening? Why are they saying that? And the doctors came in and said, ‘Because it was. We thought that you were going to die in the first 48 hours.’ I subsequently spoke to some of the top physicians [in Canada], and they don’t understand why I didn’t die on impact. That kind of scared me a little bit, but I’m so glad to be alive. And my recovery is far ahead of schedule. It was only within a couple of weeks where I started feeling my legs again.

TC: You were basically pulverized, yet a recent piece about your recovery in The Globe & Mail notes that within a month or so, you were back to thinking about your new fund. Do you think you might be . . . a workaholic?

JR: Some people call it stupid. [Laughs.] But for the two months, my first memory was worrying about my family and stuff [but] I have group of cycling friends — we’re called Les Domestiques — who have committed to cycling, and it’s a lot of folks who are investors, CEOs of big banks in Canada, we’re all close friends, [and] they all came to cocoon the family to make sure that nothing went wrong. So very quickly, all of these folks take over every element of the family, and the kids were fine, everybody was fine. I then had a lot of this time in hospital, and I do get antsy, and I started placing the calls to the investors who were committing to this fund pre COVID . . . I just really wanted to tell them, ‘Hey, I’m not dead. All my faculties are there. Are you still gonna be there when I get out of hospital?’

TC: Because they’re really investing in you and your track record.

JR: That’s exactly right. And I gotta tell you, it’s an interesting comparison. I’ve had American investors, and Canadian investors. American investors are very transactional. They’re very fast to come in if they see a great value proposition. Canada is not the same thing. In Canada, I’m extremely well-known as an investor and there, it’s actually relationship-driven, which is both good and bad. It’s tough in Canada because they’re more conservative, however, they stick with you in bad times. In my case, every single investor, everyone that had committed on pre- COVID, came in. Then one in particular doubled the size of the investment. They just felt bad for me, and I was like, ‘Hey, dude, I will take that sympathy card. Anytime.’

TC: You also see a real market for a Canadian-led firm to invest in Canadian companies versus taking money from American counterparts.

JR: So now this is going a little bit to the thesis, which is not a new thesis from a US perspective but is new from a Canadian perspective: the great firms in the U.S., like an Insight [Partners], like a Madison Dearborn, Bain Capital, General Atlantic, Summit — we don’t have any of those in Canada. We have great venture capital firms, and we have great buyout private equity firms. But what was really happening here is the entrepreneurs who are building great businesses are not really tech entrepreneurs; they’re just traditional industry entrepreneurs. And really, all I’m doing is planting a Canadian flag and saying, Hey, we have a Canadian firm that will lead or highly participate in these deals [to help you scale that business].

TC: You’re drawing a distinction between old-line industries and growth-stage tech companies, in other words, and you’re going after the former?

JR: [To me] a true technology company is one that actually builds the tool sets that are used by other businesses to make them bigger, faster, and stronger and I’ve been investing in those companies for 10 years with great success, but there’s a massive oversupply of capital in those spaces, particularly in the SaaS software space. It’s just not making mathematical sense on when it comes to a lot of these valuations. Meanwhile, when it comes to financial services, health care, travel, whatever, these are not tech entrepreneurs but they’re enlightened. We’re not introducing technology into the business, they already have it. But in one case, with a travel company we’re looking at closely, they want somebody who understands the travel space and also who understands technology and the impact as you scale globally.

The profile of the companies that I’m talking about have, on average, $100 million dollars of top line [growth], with flattish EBITDA, and that haven’t done any external financing with institutions. They’re growing at 20% to 50% a year, but they really want to become the next billion-dollar company.

TC: How much of these companies do you think you can own and for what size checks?

JR: We’re looking at 20% to 40% stakes in the business, so I’d say a significant minority, and we’re cutting checks of $50 to $75 million (U.S.)

TC: There aren’t a lot of massive companies in Canada, Shopify notwithstanding. How do you get the companies you plan to work with thinking on a different scale?

JR: Canadians might be a little bit more conservative, but the irony is, take a survey and [you’ll see] how many Canadians are running huge firms in the United States or in the Valley. It’s not inherent in Canadians [that they are risk averse].

Part of why I got into venture capital was I was so frustrated in the number of companies that were building products but couldn’t even generate revenues. Since then, I think we solved in Canada the zero to $10 million problem, then the $10 million to $100 million [challenge]. But starting around 2016 or so, I started to see companies that had $50 million, $60 million, $70 million in revenue starting to plateau, and the issue was global scalability.

In the U.S., so many companies can be a domestic company  and be a billion-dollar company. In Canada, our market is too small; you’re forced to sell on a global scale, and many Canadian companies struggle with that. So my focus now is that last part of the piece. How do we get these companies from $100 million businesses into $1 billion-plus?

BBG Ventures just closed on $50 million to fund more women-led startups

BBG Ventures, an eight-year-old, New York-based seed- and early-stage venture firm that only backs founding teams which feature at least one woman, just locked down $50 million in capital for its third fund, a major leap over its first two funds, both sized at $10 million.

One determining factor in the bigger fund is that BBGV, formerly backed exclusively by AOL (now Verizon Media), now has a broader pool of institutional and individual investors, including the State of Michigan Retirement Systems, the George Kaiser Family Foundation and Verizon Ventures, along with Poshmark cofounder Tracy Sun, ClassPass cofounder Payal Kadakia, and venture capitalists Aileen Lee, Theresia Gouw, and Jennifer Fonstad.

The young firm also has a track record to which to point. Though an investment in the coworking space The Wing may have taken an unexpected turn, hurt by a national lockdown and internal turmoil, other bets have been growing, including the e-commerce platform Zola; the feminine hygiene brand Lola; and Spring Health, a mental health benefits platform for employers that recently closed on $76 million in Series B funding led by Tiger Global Management.

That’s saying nothing of the vast and underserved opportunity to invest in women-led teams that BBGV’s founders, Susan Lyne and Nisha Dua, believe most venture firms still don’t fully appreciate.

We talked earlier today about why that is with Lyne, who is a former ABC president, former Martha Stewart Living CEO and former CEO of AOL Brand Group; and Dua, who is a former lawyer, management consultant, chief of staff to Lyne, and founder. Our conversation has been edited for length.

TC You’ve raised $50 million. What size checks will you be writing? Are you looking to take bigger positions or do you have a more diverse approach?

ND: We’re looking at writing $500,000 to $1 million checks. We look for 7.5% to 10% ownership, and we’re open to co-leading, but we prefer to lead. We’ve been leading rounds already with this with this fund. We’ll likely do about 30 companies from the fund, backing a mix of pre-seed and seed-stage startups, with reserves for follow-on funding.

SL: We’ve actually done 11 investments; we started investing after the first close.

TC: You’ve invested in nearly 80 startups over the years. What has been your biggest investment to date?

ND: Planet Forward, which was founded by Zume cofounder Julia Collins.

TC: Have you — or would you — ever form a special purpose vehicle to invest more in a startup than your fund enables?

SL: We didn’t do it for our last funds, but we did our first SPV for this fund, in a company called Starface, which is skincare company that takes a very different approach to the acne problem. You’ve probably seen the gold stars [that its customers apply to their pimples] on social media. They’ve been growing very fast and did a Series A recently and we took part of it ourselves but we also opened an SPV for one of our LPs.

TC: What themes interest you right now?

SL: We’ve done a lot of investing thus far in health and well being. That’s our largest category. The second is the future of work and education; the third is climate-friendly commerce; and the fourth is really underestimated, or emerging consumers. In all of those areas, we have actually found there are many, many, many female founders who are active and building great companies

ND: Also, we [have historically] described ourselves as a consumer fund, but we are doing more B2B in this fund, where we think that the B2B approach could solve a bigger consumer problem, including for many millions of consumers.

TC: What’s an example of what you mean?

SL: Grayce, which is doing eldercare and actually selling to employers as an employee benefit. If you look at the cost to companies because of the number of hours and days that many people invest in taking care of an aging parent or trying to figure out what the next step is for them [you appreciate the need for this kind of service]. This platform not only allows you to connect with someone who can help you plan but also points you to the resources you need, including financial resources, legal resources, and living resources.

ND: Another is Full Harvest, a marketplace and logistics platform that takes all the excess food on a farm that doesn’t meet cosmetic standards and resells it to juice and salad makers and other food brands and manufacturers.

TC: You mentioned Julia Collins. Do you know how many first-time founders you’ve backed versus repeat entrepreneurs?

ND: There’s a mix. We don’t have a preference.

TC: Do you have a geographic focus?

SL: I would say, New York City is definitely our primary source for for companies for a lot of reasons, including that there’s a very rich and active female founder community here. This is the headquarters for many different kinds of industries, so you get a range of talent here. But we’ve also invested in San Francisco companies, companies in Los Angeles, in Milwaukee, in San Diego. [We see] opportunity in at least a dozen cities across the country.

TC Have have your syndicate partners changed over time, if at all?

ND: That’s been one of the most exciting things of the past few years. We love to partner with women GPs — folks like Kara Norton of Upfront Ventures and Jess Lee of Sequoia. There is a great spiderweb of women GPs emerging at these top venture funds who can create these strong relationships and are ultimately leads for follow-on rounds.

TC: Do think women-led teams are receiving the valuations they would if they were all-male teams? I was horrified to read earlier today that the wage gap between men and women has improved by 8 cents over the last 25 years. 

SL: I can’t speak authoritatively about whether women are getting lower valuations across the board. We certainly know that they are getting a vastly lower percentage of the venture capital investment. If you look at the stats about the amount of funding for women in 2020 versus men, it’s definitely disturbing and shows the vast majority of venture capital is still going to all all male teams. I think some of that is due to the megarounds that we’ve seen, but not enough of it to make a significant difference.

ND: I think it was Harvard Business Review that did some really interesting research at a [2017] TechCrunch Disrupt event that overwhelmingly suggested that men are judged on their potential and women are often judged on their current expertise, and we [might] surmise that [these factors] could have something to do with valuations.

It’s why we’re leading rounds. We see the opportunities that these female-led teams are going after — and we have the opportunity to assess them on their exact merits.

Hong Kong-based viAct raises $2M for its automated construction monitoring platform

Hong Kong-based viAct helps construction sites perform around-the-clock monitoring with an AI-based cloud platform that combines computer vision, edge devices and a mobile app. The startup announced today it has raised a $2 million seed round, co-led by SOSV and Vectr Ventures. The funding included participation from Alibaba Hong Kong Entrepreneurs Fund, Artesian Ventures and ParticleX.

Founded in 2016, viAct currently serves more than 30 construction industry clients in Asia and Europe. Its new funding will be used on research and development, product development and expanding into Southeast Asian countries.

The platform uses computer vision to detect potential safety hazards, construction progress and the location of machinery and materials. Real-time alerts are sent to a mobile app with a simple interface, designed for engineers who are often “working in a noisy and dynamic environment that makes it hard to look at detailed dashboards,” co-founder and chief operating officer Hugo Cheuk told TechCrunch.

As companies signed up for viAct to monitor sites while complying with COVID-19 social distancing measures, the company provided training over Zoom to help teams onboard more quickly.

Cheuk said the company’s initial markets in Southeast Asia will include Indonesia and Vietnam because government planning for smart cities and new infrastructure means new construction projects there will increase over the next five to 10 years. It will also enter Singapore because developers are willing to adopt AI-based technology.

In a press statement, SOSV partner and Chinaccelerator managing director Oscar Ramos said, “COVID has accelerated digital transformation and traditional industries like construction are going through an even faster process of transformation that is critical for survival. The viAct team has not only created a product that drives value for the industry but has also been able to earn the trust of their customers and accelerate adoption.”

Indian social network Public App raises $41 million

Public App, a location-based social network that connects individuals to people in their vicinity, has raised $41 million in a new round, just six months after securing $35 million as the hyper-local Indian startup looks to expand its presence in the world’s second largest internet market.

A91 Partners led the new round in Public App, valuing the Indian startup at over $250 million (more than double since its last fundraise). The Indian startup, which also operates popular news aggregator app InShorts, said some of its existing investors also participated in the round but did not identify them. Public App counts Lee Fixel’s Addition, SIG, and Tanglin Venture Partners among its investors. (The startup didn’t specify the name of the new round.)

Azhar Iqubal, founder and chief executive of Public App, said the new social network has amassed over 50 million users already and he aims to expand it outside the country eventually. The app, launched in April 2019, has already attracted individuals such as politicians and several major firms such as Amazon, HDFC Bank, and GSK that are using Public App to reach their audience.

“Public has continued to maintain best in class retention and engagement metrics while scaling. We look forward to working closely with the founders to help build an outstanding company,” said Gautam Mago, General Partner at A91 Partners, in a statement.

Public App, which is available in several major Indian languages (including Hindi, Bengali, Punjabi, Telugu, Tamil, Kannada, Malayalam, Odia, Assamese, Gujarati and Marathi), allows shop owners and other local businesses to drive e-commerce and hire local talent, and political leaders, government authorities, and media houses to reach local audiences.

“The app is already being used by over 50,000 elected officials, government authorities and citizen journalists to connect with their locality. Additionally, many local businesses have also started to use the app to reach their customers in the locality,” the startup said.

The app, which also provides entertainment and news services, sees more than 1 million videos being created on the platform each month.

The startup plans to deploy the new capital to expand its tech infrastructure, broaden its content offerings, and hire more talent.

Once thought of a crowded space, several Indian startups have launched their social networks in recent years. Kutumb, an eight-month-old startup, is in talks with Tiger Global to raise funds in a round that values it about $170 million, TechCrunch reported earlier this month.

China to ban apps from collecting excessive user data starting May

Starting May 1, apps in China can no longer force users into providing excessive personal data, according to a document jointly released by a group of the country’s top regulators, the Cyberspace Administration, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation.

It’s a common practice in China where apps ask users to provide sensitive personal information and those who decline to share are often denied access. While some of the requests are justifiable, such as one’s location information to use a navigation map, many others are unnecessary, such as one’s biometrics to make mobile payments.

In December, Chinese authorities lay out the acceptable range of data that different apps are entitled to collect, as TechCrunch reported

All forms of apps are subject to the requirements, including the increasingly popular “mini programs,” which are lite apps accessed through an all-encompassing native app such as WeChat and Alipay without the need for an app store install, said the new document.

For now, the document appears to be a guideline at best as it does not specify how the rules should be enforced and how offenders will be punished. While it marks China’s incremental progress on data protection, regulators will have to keep updating the rules as people’s daily lives are becoming more linked to digital devices at a rapid rate.

In recent months, China has been clamping down on the technological darlings that it used to pride itself on. It introduced a sweeping antitrust law to rein in its “platform economy” and slammed anti-competition fines on Alibaba and Tencent, following Ant Group’s IPO fiasco.

Indonesian savings and investment app Pluang gets $20M in pre-Series B funding

Indonesia-based fintech Pluang announced today it has raised $20 million in a pre-Series B round led by Openspace Ventures, with participation from Go Ventures and other returning investors. The company offers proprietary savings and investment products that allow users to make contributions starting from 50 cents USD.

Go Ventures, the investment arm of Gojek, also participated in Pluang’s $3 million Series A, which closed in March 2019. Pluang is available through partnerships with “super apps” like Gojek, Dana and Bukalapak, and currently claims more than one million users.

The company says it is able to maintain a low customer acquisition cost of $2 per transacting customer because it creates its own products, including investment accounts for gold, U.S equity indices and cryptocurrencies, instead of working with third-party financial service providers.

Pluang’s latest round will be used to develop proprietary financial products to cover more asset classes, including government bonds.

“Previously, these assets classes were only available to the wealthy in Indonesia,” said Pluang founder Claudia Kolonas in a statement. “However, we believe that everyone should have the opportunity to grow their savings, and our new products will reflect that.”

Pluang is among several Indonesian financial apps, including Ajaib and Bibit, that have recently raised funding. All focus on making investing accessible to more people by giving them an alternative to traditional brokerage firms that typically charge high fees.

In Indonesia, less than percent of the country’s population are retail investors, but that number is growing, especially among people aged 18 to 30. This is due to a combination of factors, including increased interest in financial planning during the pandemic and the rise of stock influencers.

In a statement, Openspace Ventures founding partner Shane Chesson said, “Pluang has demonstrated tremendous growth over the last 12 months with industry leading unit economics. We’re excited to continue supporting the team, as they sustainably accelerate their ambitions to help every Indonesian grow their savings.”

Tech companies predict the (economic) future

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Earnings season is coming to a close, with public tech companies wrapping up their Q4 and 2020 disclosures. We don’t care too much about the bigger players’ results here at TechCrunch, but smaller tech companies we knew when they were wee startups can provide startup-related data points worth digesting. So, each quarter The Exchange spends time chatting with a host of CEOs and CFOs, trying to figure what’s going on so that we can relay the information to private companies.

Sometimes it’s useful, as our chat with recent fintech IPO Upstart proved after we got to noodle with the company about rising acceptance of AI in the conservative banking industry.

This week we caught up with Yext CEO Howard Lerman and Smartsheet CEO Mark Mader. Yext builds data products for small businesses, and is betting its future on search products. Smartsheet is a software company that works in the collaboration, no-code and future-of-work spaces.

They are pretty different companies, really. But what they did share this time ’round the earnings cycle were macro notes, or details regarding their forward financial guidance and what economic conditions they anticipate. As a macro-nerd, it piqued my interest.

Yext cited a number of macroeconomic headwinds when it reported its Q4 results. And tying its future results somewhat to an uncertain macro picture, the company said that it is “basing [its] guidance on the business conditions [it sees for itself] and [its] customers currently, with the macro economy, which remains sluggish, and customers who remain cautious,” per a transcript.

Lerman told The Exchange that it was not clear when the world would open — something that matters for Yext’s location-focused products — so the company was guiding for the year as if nothing would change. Wall Street didn’t love it, but if the economy improves Yext won’t have high hurdles to jump over. This is one tack that a company can take when it talks guidance.

Smartsheet took a slightly different approach, saying in its earnings call that its “fiscal year ’22 guidance contemplates a gradual improvement in the macro environment in the second half of the year.” Mader said in an interview that his company wasn’t hiring economists, but was instead simply listening to what others were saying.

He also said that the macro climate matters more in saturated markets, which he doesn’t think that Smartsheet is in; so, its results should be more impacted by things more like “the secular shift to the cloud and digital transformation,” to quote its earnings call.

What the economy will do this year matters quite a lot for startups. An improving economy could boost interest rates, making money a bit more expensive and bonds more attractive. Valuations could see modest downward pressure in that case. And venture capital could slow fractionally. But with Yext forecasting as if it was facing a flat road and Smartsheet only expecting things to pick up pace from Q3 on, it’s likely that what we have now is mostly what we’ll get.

And things are pretty damn good for startups and late-stage liquidity at the moment. So, smooth sailing ahead for startup-land? At least as far as our current perspective can discern.

We still have a grip of notes from Splunk CEO Douglas Merritt on how to take an old-school software company and turn it into a cloud-first company, and Jamf CEO Dean Hager about packaging discrete software products. More to come from them in fits.

Various and sundry

There were rounds big and small this week. Companies like Squarespace raised $300 million, while Airtable raised $277 million. On the smaller-end of the spectrum, my favorite round of the week was a modest $2.9 million raise from Copy.ai.

But there were other rounds that TechCrunch didn’t get to that are still worth our time. So, here are a few more for you to dig into this weekend:

  • A so-called pre-Series A round for Lilli, a U.K.-based startup that uses sensors and other tech to track the well-being of folks who might need help to live on their own. Using tech to take care of folks is always good by me. The deal was worth £4.5 million, per UKTN.
  • An IPO for Tuya, a Chinese software company that raised $915 million in its American debut. Chinese IPOs on American indices were once a big deal. They are less frequent now. Surprised that I missed this one, but, hey, there’s been a lot going on.
  • And the Republic round, worth $36 million, that is banking on the recently-expanded American crowdfunding regulations. Some startups have seen success with the approach, including Juked.gg.

Upcoming attractions

Next week is Y Combinator Demo Day week, so expect a lot of early-stage coverage on the blog. Here’s a preview. From The Exchange we’re looking back into insurtech (with data from WeFox and Insurify), and talking about Austin-based software startup AlertMedia’s decision to sell itself to private-equity instead of raising more traditional capital.

And to leave you with some reading material, make sure you’ve picked through our look at the valuations of free-trading apps, the issues with dual-class shares, the recent IPO win for the New York scene and how unequal the global venture capital market really is.

Closing, this BigTechnology piece was good, as was this Not Boring essay. Hugs, and have a lovely respite,

Alex

Daily Crunch: Facebook shows off a wrist-based interface

Facebook develops a new way to interact with AR, Uber’s facial recognition policy faces scrutiny and SpaceX’s Starship rocket booster hits a major milestone. This is your Daily Crunch for March 19, 2021.

The big story: Facebook shows off wrist-based interface

This project comes out of Facebook Reality Labs and is supposed to present an alternative computer interface on your wrist, with electromyography sensors to interpret motor nerve signals.

In a blog post, Facebook said a wrist-based device “could reasonably fit into everyday life and social contexts,” while allowing the company to “bring the rich control capabilities of your hands into AR, enabling intuitive, powerful and satisfying interaction.”

Facebook identifies this as a research prototype, so don’t expect it to turn into a commercial product anytime soon. But it’s still suggestive, particularly given the company’s sometimes-surprising hardware strategy and rumors that it might be working on an Apple Watch competitor.

The tech giants

India asks court to block WhatsApp’s policy update, says new change violates laws — The Indian government alleged on Friday that WhatsApp’s planned privacy update violates local laws on several counts.

Uber under pressure over facial recognition checks for drivers — Uber’s use of facial recognition technology for a driver identity system is being challenged in the U.K.

Instagram and WhatsApp hit by outage — The outage began around 1:40 p.m. ET and lasted for more than half an hour.

Startups, funding and venture capital

SpaceX nears final assembly of its first massive testing rocket booster for Starship — SpaceX has completed what’s known as the “stacking” of its first Super Heavy prototype.

Brazilian startup Tractian gets the Y Combinator seal of approval for its equipment monitoring tech — Throughout their lives, the founders had heard their parents complain about the sorry state of maintenance and heavy equipment in their factories.

Superpedestrian positions itself as the go-to partner for cities with new e-scooter safety upgrades — Superpedestrian is considered an up-and-coming player in the micromobility world because of how it handles safety issues.

Advice and analysis from Extra Crunch

It’s time to abandon business intelligence tools — Organizations spend ungodly amounts of money on business intelligence tools, but adoption rates are still below 30%.

The lightning-fast Series A (that was 3 years in the making) — Sounding Board’s Christine Tao discusses raising her Series A on the How I Raised It podcast.

Survey: Share feedback on Extra Crunch — Tell us what you think about Extra Crunch!

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

Cloud infrastructure spending passed on-prem data centers in 2020 — That’s according to new research from Sydney Research Group.

Five trends in the boardrooms of high-growth private companies — Just as countless aspects of corporate life have been reshaped over the course of the last year, boards of directors are undergoing significant and lasting transformation.

Attend Disrupt 2021 for less than $100 — If three jam-packed days of TechCrunch Disrupt 2021 wasn’t enough to get your startup motor running, listen up.

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

Betting on China’s driverless future, Toyota, Bosch, Daimler jump on board Momenta’s $500M round

Across the street from Suzhou North, a high-speed railway station in a historic city near Shanghai, a futuristic M-shaped building easily catches the eye of anyone passing by. It houses the headquarters of the five-year-old Chinese autonomous driving startup, Momenta.

Like other major Chinese cities, Suzhou, which is famous for its serene canals and classical gardens, offers subsidized offices and policy support to attract high-tech firms. It seems to have chosen well. Momenta exceeded $1 billion in valuation in two years and became one of the most-funded driving companies in China. The startup has a dazzling list of investors, from Kai-Fu Lee’s Sinovation Ventures, the government of Suzhou, to Mercedes-Benz maker Daimler.

Momenta recently closed another massive round, which nears $500 million and lifts its total funding to over $700 million. The investment marks an important step towards the firm’s international expansion, its chief of business development Sun Huan told TechCrunch. In a few months’ time, Sun will head to Stuttgart, the German hometown of Mercedes-Benz, and open Momenta’s first European office.

The new funding, a Series C round, was led by Chinese state-backed automaker SAIC Motor, Toyota and Bosch, an indication of the traditional auto monoliths’ conviction to smart driving.

“The auto industry needs to develop more advantages when confronting Tesla’s marketing today, so they are paying more attention to autonomous driving,” Momenta’s founder and CEO Cao Xudong told TechCrunch.

Financial investors leading the round were the Singaporean sovereign fund Temasek and Alibaba founder Jack Ma’s Yunfeng Capital. Other participants included Mercedes-Benz AG, Xiaomi founder Lei Jun’s Shunwei Capital, Tencent, Cathay Capital and a few undisclosed institutions. It’s rare to see Tencent and Alibaba (or their affiliates) co-invest.

Be pragmatic

Despite the sizable financial injection, Cao said that “autonomous driving companies can no longer rely solely on fundraising to burn cash.”

Mega-fundraising has become common in the capital-intensive autonomous vehicle world. Momenta’s Chinese rivals Pony.ai has amassed over $1 billion within five years and four-year-old WeRide.ai has raised over $500 million. Like Momenta, the two firms have nabbed investments from big automakers. Pony.ai also counts Toyota as an investor, and WeRide is backed by Renault-Nissan-Mitsubishi.

Momenta declined to disclose its latest valuation. For reference, Pony.ai hit $5.3 billion in its November fundraising round.

TechCrunch went on a test ride with Momenta / TechCrunch

Momenta prides itself on what it calls a “two-legged” business model. Unlike some peers that concentrate resources on ‘Level 4,’ or real driverless passenger cars, Momenta is selling semi-automated driving software to carmakers while investing in more advanced tech that is years from mass adoption.

It also tries to cap expenses by crowdsourcing data from auto partners instead of building its own car fleets, which helps save billions of dollars, the company has reiterated. By accumulating driving data at scale, Momenta gets to finetune its algorithms through a self-correcting system. The more data it has, the better its machine becomes at driving.

“It works like a flywheel,” Cao said, using a tech industry jargon first popularized by Jeff Bezos to explain Amazon’s growth.

Driver’s habit

During a test ride TechCrunch went on, where a safety driver was present but did not intervene, a Momenta-powered Lincoln maneuvered through a neighborhood of Suzhou dotted by jaywalkers, unleashed dogs, speeding scooters and reckless truck drivers. When the sedan slowed down at a highway entrance ramp, other cars zipped past us. It felt as if we were going too slowly, but in fact all the human-steered cars were going well above the 40km/h speed limit.

“Some drivers may want the autonomous driving car to be more aggressive, so we are also exploring a system that learns from individual style,” said Jiang Yunfei, an R&D engineer at Momenta who went on the ride. “Of course, on the condition that the car is obeying traffic rules.”

A tablet next to the dashboard showed what our car was capable of seeing and predicting on the road with a set of mass-produced sensors. “Prediction relies on data,” noted Sun. “If we build our own car fleets, it will be very costly to keep the data-driven approach.”

Momenta has joined in the ranks of companies piloting robotaxis on China’s urban roads. It aims to remove some safety drivers from its robotaxis, which it jointly operates with auto partners, in 2022 and expects all of its vehicles to go driverless in 2024. By then, the company will have significantly reduced labor costs and reach a positive operating margin per vehicle.

Automate globally

Momenta has kept a quiet public profile since its inception and rarely talked about its customers except for its partnership with Toyota on high-definition maps, which predated the investment. What Cao could say was the company has fostered “deep collaborations” with carmakers and Tier-1 suppliers across China, Germany and Japan.

By the end of 2021, multiple customers will start mass-producing mid-to-high-end cars equipped with Momenta’s software. And by 2024 or 2025, Momenta’s solutions could be powering millions of vehicles, which should provide a steady stream of driving data to the startup.

“Electrification is no longer enough to differentiate one high-end car brand from another because the motors and batteries they used are quite similar. The key differentiator now is intelligence,” said the founder.

When asked whether Momenta worries about challenges faced by Chinese firms amid geopolitical tensions and continuing U.S.-China technological decoupling, Jijay Shen, who recently joined Momenta as vice president of sales and marketing, said such situations are “uncontrollable” and “regulatory compliance” is the priority for entering any new market.

“The human race was able to achieve significant technological progress in the last ten years exactly because tech companies from different countries are building on top of each other,” said Shen, who spent over a decade at Huawei and was formerly CEO of the telecoms giant’s Ireland business.

“But because of geopolitical factors, many markets will begin to consider self-subsistence in the short term… I can’t conclude what is better, but I think the whole ecosystem and supply chain need to think what’s better — self-subsistence or interdependence.”

Visualping, which scans the web for changes (including new vaccination slots), raises $2 million

Years ago, Serge Salager, a Vancouver-based entrepreneur who’d taken a small company public on the Toronto Stock Exchange, was approached by deep-pocketed buyer who was interested in buying the business. Flattered but also nervous about who else the potential acquirer was talking with, Salager found himself scouring the web obsessively for news about other possible takeover targets, from changes to their pricing and features to job offers.

Salager was right to be paranoid. The buyer acquired a rival company. On the bright side, Salager had a new business idea — to create a much better service than existed at the time to track altered information across the web.

Enter Visualping, a now six-year-old, 16-person freemium service that monitors the entire internet for changes and has amassed 1.5 million users, an undisclosed percentage of which pay the company a monthly subscription fee based on how many web pages and keywords they are following. (Two searches per day are free; 660 per day will set users back $100 per month.)

Journalists like the service as it helps them keep tabs on the people and companies they cover. Law firms use it to stay on top of changing regulations, along with other information. Employees of Apple use it to keep track of what is being said about the company and where.

The use cases are almost endless, which works in Visualping’s favor, as does its apparent ease of use. Users simply provide the company with a screenshot of a page or the part of the page they want to keep tabs on, along with any keywords, and Visualping then informs them via email as soon as a site has been altered or a keyword has appeared somewhere.

Visualping — which has a browser extension and says a mobile app is coming this summer — has also benefited from the pandemic. Indeed, in lieu of endlessly refreshing the sites of companies like Rite Aid and CVS, more people are learning to use Visualping to keep tabs on the availability of  COVID-19 vaccinations, thanks to mentions of the startup in recent months in the WSJ, CNBC, and Fox News.

In the meantime, like other data companies, Visualping is getting smarter all the time by applying machine learning to the information it’s generating on behalf of its users, insists Salager. It won’t, for example, alert someone when the banner ads on a page have changed, or if a customer is tracking a major price change, Visualping can hold off on sending that person an alert until that price change meets a certain threshold.

Of course, with data comes privacy concerns, and on this front, Salager insists that Visualping is fully compliant with GDPR, the EU law on data protection and privacy.

He adds that the company may some day serve up targeted ads to its customers based on their search preferences, as does Google, but he says that for now, Visualping is instead focused wholly on building up new enterprise products, given that more companies have begun discovering it. That’s the vision that investors are funding, too, Salager says, sharing publicly for the first time that Visualping closed on $2 million in seed funding in December from Mistral Ventures, a Canadian fund, and N49P, and AngelList syndicate.

It’s not a ton of capital, he notes, but with the revenue that Visualping is generating, it’s enough to get the startup through the next two years, he says. And after that? We ask Salager if he sees a tie-up down the road and whether he’d be open to acquisition talks, given what happened with his last company.

He does and he is, he answered candidly. While one scenario sees Visualping becoming “publicly traded like Dropbox,” he says (Dropbox also catered to consumers before later growing its business offerings), another “good fit is Google,” he adds. “We believe we fit very well with Google Alerts, so maybe an exit to Google is something we try to do, too.

Uber says it will treat UK drivers as workers in wake of Supreme Court ruling

Uber said Tuesday that drivers in the UK who use its ride-hailing app will be treated as workers, a designation that will give them some benefits such as holiday pay. However, even as Uber seemingly concedes to a Supreme Court ruling last month, a new fight could already be brewing over the company’s decision to calculate working time from the point a trip commences — rather than when drivers log on to the app.

Uber said that beginning Wednesday all drivers in the UK will be paid holiday time based on 12.07% of their earnings, which will be paid out every two weeks. Drivers will also be paid at least the minimum wage (called the National Living Wage) after accepting a trip request and after expenses, Uber said in a statement. Eligible drivers in the UK will automatically be enrolled into a pension plan with contributions from Uber. These contributions will represent approximately 3% of a driver’s earnings.

In the UK, there are three designations: self-employed, employed and worker. The “workers” designation doesn’t make them employees, but it is still entitles them to the minimum wage, holiday pay, and, if eligible, a pension.

Uber said Tuesday that based on current expectations, the company is not changing its previously announced expectations for Adjusted EBITDA for the first quarter or for 2021.

Uber has been entangled in fight over worker classification in the UK since 2016. Last month, the UK’s Supreme Court dismissed Uber’s appeal, which reaffirmed earlier rulings that drivers using the app are workers and not independent contractors. With no place to turn, Uber has conceded — sort of. Uber will only guarantee that drivers’ working time and other benefits will accrue once they accept a trip and not based on when they have signed into the app to begin working. That already has labor activists fuming.

“While we welcome Uber’s decision to finally commit to paying minimum wage, holiday pay and pensions we observe that they have arrived to the table with this offer a day late and a dollar short, literally,” according to a statement from the App Drivers & Couriers Union and signed by James Farrar and Yaseen Aslam, the two drivers who brought a case against Uber. “The Supreme Court ruled that drivers are to be recognized as workers with entitlements to the minimum wage and holiday pay to accrue on working time from log on to log off whereas Uber is committing only to these entitlements to accrue from time of trip acceptance to drop off. This means that Uber drivers will be still short-changed to the tune of 40-50%. Also, it is not acceptable for Uber to unilaterally decide the driver expense base in calculating minimum wage. This must be subject to collective agreement.

While Uber undoubtedly has made progress here, we cannot accept anything less than full compliance with legal minimums. We would also expect to see Uber make progress towards trade union recognition, a fair dismissals appeals process and a data access agreement.”

Farrar told TechCrunch that the issue has not been resolved. The next step will be to go back to the Employment Tribunal to ensure that drivers are paid what they are legally entitled to,

Even as Uber deals with continued labor issues in the UK, the company will likely turn much of its attention to cases are still playing out in courts in other European countries — decisions which could put pressure on Uber’s bottom line. Meanwhile, EU lawmakers are also consulting on how to improve conditions for gig workers so Uber’s concession in the UK is likely feed into pan-EU negotiations.

Neobroker Bitpanda raises $170M at a $1.2B valuation to take its trading platform beyond crypto

One of the bigger startups in Europe operating a trading platform for cryptocurrency has closed a big round of funding on the heels of very rapid growth and plans to open its platform to a wider stream of assets.

Bitpanda, a “neobroker” that wants to make it easier for ordinary people to invest not just in bitcoin and other digital assets, but also gold, and any established stock that takes their interest, has picked up $170 million, a Series B that catapults the company’s valuation to $1.2 billion. Bitpanda is based in Vienna, Austria and says that this equity round makes it the country’s first “unicorn” — the first startup to pass the $1 billion valuation mark.

“We are shifting to become a pan-investment platform, not just a crypto broker,” said Eric Demuth, the CEO of Bitpanda who co-founded it with Paul Klanschek and Christain Trummer. Bitpanda’s focus up to now has been primarily on building a platform to target investors in Europe, a largely untapped market, as it happens. “In the EU, we probably have less than 10% of the population owning stocks. Our growth goes hand in hand with that.”

In addition to Austria, Bitpanda is live in France, Spain, Turkey, Italy and Poland with plans to expand to more markets this year, building hubs in Madrid, Barcelona, London, Paris and Berlin. New investment options to back ETFs and “fractional” trades, which will let people invest small amounts of money in whichever stocks they would like to back, are due to be added in April, the company says.

That said, the vast majority of activity on the platform right now is related to cryptocurrency, and within that Bitcoin trading far outweighs any other digital currency.

The round is being led by Valar Ventures — the fund backed by Peter Thiel — with participation also from unnamed partners from DST Global (Yuri Milner’s fund). Both have been building name for themselves as significant backers of crypto startups. Valar is also an investor in Robinhood — which, like Bitpanda, has positioned itself as a platform to help a wider funnel of people engage and profit from trading — and most recently, earlier this month the pair co-invested in a $350 million round for BlockFi, which provides financial services like loans to crypto traders.

While DST is a new investor in Bitpanda, Valar also led a round for Bitpanda just six months ago — a $52 million Series A. Since then, Demuth and Klanschek say that the company has seen growth skyrocket (not unlike the price of bitcoin itself).

KPIs like revenue and customer numbers “have been roughly 10x,” Klanschek said, with the platform adding some 700,000 users between then and now.

“Very soon we will cross the €100 million revenue mark for the first few months of this year” said Klanschek. Annualized it will work out to around €300-400 million, he added. While the bulk of its trading is for individuals, it’s not only focused on single investors. In September, on the company’s trading volume for its “Pro” tier for companies, daily trading on the platform was $2 million. Now, it is over $25 million.

Bitpanda’s growth and enthusiasm taps into a much bigger trend in the world of trading. One of the byproducts of the Covid-19 pandemic has been consumers becoming more engaged in their own personal finance.

With interest rates down, professional futures less certain for some, a plethora of apps out there to do more with your money, a whole new set of investing classes thanks to cryptocurrency, and (last but not least) the juggernaut that is social media to help concepts go viral, people are dabbling in a wider range of activities, some having never done more than simply keep their money in a bank account before, and shuffling off a bit of money to their 401k’s or other pension funds.

Bitpanda made a decision last year to start to get more aggressive in its own fundraising to ride that wave.

“We are profitable, and we have been for four years, but in September we changed strategy and wanted to become ‘the’ investment platform for all of Europe,” Demuth said. “We needed more partners and more capital to get more top talent and this is why we did the Series A last year. Then over the past two months, we talked to our investors and said what do you think, it seems like there is some momentum. They said ‘we are in.” No roadshow needed, we will help you. We will call our contacts and they’ll join, too.”

There has been a huge wave of hype around crypto, although in the wider sense it’s still primarily an adopter phenomenon, far from being a mainstream investment, with most people having no idea how it works. Ironically, this is not that dissimilar to much of the stock market for most people although the difference these days is that apps like Robinhood, Square Cash and Bitpanda are making it easier to engage with crypto and other trading by lowering the barrier to entry, both in terms of actually putting money into the system, and also by making it possible to get engaged with only a small amount of money.

Whether cryptocurrency bears out in the longer term, it’s likely that the democratization will stay and become a part of the bigger process of how people manage their own money, if not by gambling all-in, then at least by creating a little diversification for themselves.

That doesn’t excuse the ridiculous hype merchants on social media that potentially exploit these new traders, nor the fact that there is still a very long way to go in regulators getting better oversight of how these new exchanges work, but it does point to an interesting future and more opportunities longer term for organizations and individuals to do more with their money and their assets (NFTs being an example on the other side, of how to build assets and value for investing in the first place).

“In today’s financial world everything is connected,” said Klanschek. “We saw huge growth on Bitpanda after the Covid stock crash in March 2020.” Crypto dropped then too, with “interest high but price very low.” Yet with saving accounts and other traditional, low-key ways for people to growth their money yielding nothing, “it eventually led to huge interest in financial markets, with crypto being established as its own financial asset, its own category.”

While there are a number of platforms emerging for people to engage of that, the pace of adoption for Bitpanda in Europe is what attracted investors here.

“Since we joined the board last September, we have continued to be impressed with the work that Eric, Paul and the team are doing. One of the positive changes caused by the pandemic was an increased interest in personal finance, and Bitpanda’s broad offer and commitment to demystifying investing for a new breed of retail investors means it is perfectly positioned to take advantage of the trend,” said James Fitzgerald, Founding Partner of Valar Ventures, in a statement. “With over 700,000 new users in just 6 months, we know that people want access to the platform, and we’re excited to bring Bitpanda to every investor in Europe.”

Stripe closes $600M round at a $95B valuation

On the heels of reports that Stripe was raising yet more money, the payments giant has now confirmed the details. The company has closed in on another $600 million, at a valuation of $95 billion.

Stripe said it will use the funding to expand its business in Europe, with a focus on its European HQ, and also to beef up its global payments and treasury network.

“We’re investing a ton more in Europe this year, particularly in Ireland,” said John Collison, President and co-founder of Stripe, in a statement. “Whether in fintech, mobility, retail or SaaS, the growth opportunity for the European digital economy is immense.”

Stripe said the financing included backing from two major insurance players. Allianz, via its Allianz X fund, and Axa are in the round, along with Baillie Gifford, Fidelity Management & Research Company, Sequoia Capital, and an investor from the founders’ home country, Ireland’s National Treasury Management Agency (NTMA).

The insurance angle may point to which direction the company is looking to go next. After all, fintech and insurance are closely aligned.

“Stripe is an accelerator of global economic growth and a leader in sustainable finance. We are convinced that, despite making great progress over the last 10 years, most of Stripe’s success is yet to come” said Conor O’Kelly, CEO of NTMA in a statement. “We’re delighted to back Ireland’s and Europe’s most prominent success story, and, in doing so, to help millions of other ambitious companies become more competitive in the global economy.”

The big round, rising valuation, and growing cap table will inevitably lead to questions around where the company is standing with regards to its next steps, and whether that will include a public listing. Stripe has long kept its cards to its chest when it comes to user numbers, revenues, and profit and those details, once again, are not being disclosed with the news today, and nor has it made any comments on IPO plans.

Notably, the confirmation of the news today is at a lower valuation than the valuation Stripe was reportedly trading at on the secondary market, which was $115 billion; and the round that closed at a $95 billion valuation was also rumored to be coming in at a higher number, over $100 billion.

It’s not clear whether those numbers were never accurate, or if Covid had an impact on pricing, or if European investors simply drove a hard bargain.

The focus on growing in Europe also puts the hiring of Peter Barron — the former EMEA VP of communications for Google and a former journalist — into some context.

Founded in 2010 by John and his brother Patrick Collison (the CEO), Stripe is one of a wave of commerce startups that saw the value of building a simple way for developers to integrate payments into any app or site by way of a few lines of code, at a time when digital and specifically online payments were starting to take off.

Behind that code, the company had done all the hard work of integrating all the different and complex pieces needed to make payments work both in countries and across borders.Over the years, the company has built out a bigger platform around that, a suite of services to position itself as a one-stop shop not just for helping businesses run all of the commercial aspects of their operations, including incorporation, managing fraud, managing cashflow and more.

Within that, Stripe has built out a decent footprint in Europe, with the region accounting for 31 of the 42 countries where it has customers today. While Stripe may have had its start and early traction providing payments infrastructure for startups (and especially small, new startups), today that list includes a lot of big names, too. In Europe, customers include Axel Springer, Jaguar Land Rover, Maersk, Metro, Mountain Warehouse and Waitrose, alongside Deliveroo (UK), Doctolib (France), Glofox (Ireland), Klarna (Sweden), ManoMano (France), N26 (Germany), UiPath (Romania) and Vinted (Lithuania).

Even with heavy competition in payments and adjacent services, there is a huge opportunity for more growth. Stripe says that in the wake of Covid and the rise of people shopping considerably more across the web and apps rather than in person, currently some 14% of commerce happens online, a big shift considering that just a year ago it was about 10%.

Should there be some law against raising three times in one year?

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Ready? Let’s talk money, startups and spicy IPO rumors.

Every quarter we dig into the venture capital market’s global, national, and sector-based results to get a feel for what the temperature of the private market is at that point in time. These imperfect snapshots are useful. But sometimes, it’s better to focus on a single story to show what’s really going on.

Enter AgentSync. I covered AgentSync for the first time last August, when the API-focused insurtech player raised a $4.4 million seed round. It’s a neat company, helping others track the eligibility of individual brokers in the market. It’s a big space, and the startup was showing rapid initial traction in the form of $1.9 million in annual recurring revenue (ARR).

But then AgentSync raised again in December, sharing at the time of its $6.4 million round that the valuation cap had grown by 4x since its last round. And that it had seen 4x revenue growth since the start of the pandemic.

All that must sound pretty pedestrian; a quickly-growing software company raising two rounds? Quelle surprise.

But then AgentSync raised again this week, with another grip of datapoints. Becca Szkutak and Alex Konrad’s Midas Touch newsletter reported the sheaf of data, and The Exchange confirmed the numbers with AgentSync CEO Niji Sabharwal. They are as follows:

  • Present-day revenues of less than $10 million, but with ARR growing by 6x in 2020 after 10x expansion in 2019.
  • No customer churn to date.
  • Its $25 million Series A valued the company at $220 million, which Konrad and Szkutak describe as “exactly 10x AgentSync’s valuation from eight months ago.”

That means AgentSync was worth $22 million when it raised $4.4 million, and the December round was raised at a cap of around $80 million. Fun.

Back to our original point, the big datasets can provide useful you-are-here guidance for the sector, but it’s stories like AgentSync that I think better show what the market is really like today for hot startups. It’s bonkers fast and, even more, often backed up by material growth.

Sabharwal also told The Exchange that his company has closed another $1 million in ARR since the term sheet. So its multiples are contracting even before it shared its news. 

2021, there you have it.

Meet Conscience.vc

Also this week I got to meet Ariana Thacker, who is building a venture capital fund. Her route to her own venture shop included stops at Rhapsody Venture Partners, and some time at Predictive VC. Now she’s working on Conscience.vc, or perhaps just Conscience.

Her new fund will invest in companies worth less than $15 million, have some form of consumer-facing business model (B2B and B2B2C are both fine, she said), and something to do with science, be it a patentable technology or other sort of IP. Why the science focus? It’s Thacker’s background, thanks to her background in chemical engineering and time as a facilities engineer for a joint Exxon-Shell project. 

All that’s neat and interesting, but as we cover zero new-fund announcements on The Exchange and almost never mini-profile VCs, why break out of the pattern? Because unlike nearly everyone in her profession, Thacker was super upfront with data and metrics.

Heck, in her first email she included a list of her investments across different capital vehicles with actual information about the deals. And then she shared more material on different investments and the like. Imagine if more VCs shared more of their stuff? That would rock.

Conscience had its first close in mid-January, though more capital might land before she wraps up the fundraising process. She’s reached $4 million to $5 million in commits, with a cap of $10 million on the fund. And, she told The Exchange, she didn’t know a single LP before last summer and only secured an anchor investor last October.

Let’s see what Thacker gets done. But at a minimum I think she’ll be willing to be somewhat transparent as she invests from her first fund. That alone will command more attention from these pages than most micro-funds could ever manage.

A whole bunch of other important shit

The week was super busy, so I missed a host of things that I would have otherwise liked to have written about. Here they are in no particular order:

  • FalconX, a startup that powers crypto-trading on other platforms, raised $50 million this week. The round comes after the company raised $17 million last May. I wrote about that here. Tiger Global led the round, natch, as it has led nearly every round in the last month. 
  • The FalconX round matters as the company grew from what we presume was a modest trading and revenue base into something much larger. Per the company, in “less than a year” the company’s “trading volume” grew by 12x and its “net revenue” grew 46x. That’s a lot. 
  • Privacera also raised $50 million this week. Insight Partners led the round. The deal caught my eye as it promised a “cloud-based data governance and security solution.” That reminded me of Skyflow, a quickly-growing startup that I thought might have a similar product. Privacera CEO Balaji Ganesan politely corrected my confusion in an email saying that “Skyflow is like a vault for customer data. They replace customer data with tokens. Our focus is on data governance, so it is broader. We don’t store customer data within our solution.” Fair enough. It’s still an interesting space.
  • And then there’s Woflow, which VentureBeat actually got to before I could. I chatted with the company this week, but sadly have more notes than open word count today. So let it suffice to say that the company’s model of selling structured merchant data is super cool. And the fact that it has linked up with customers in its first vertical (restaurants) like DoorDash is impressive.
  • Its round was led by Craft Ventures, a firm that has been pretty damn active in the API-powered startup landscape in recent months. More to come on Woflow.

Various and Sundry

Closing, I learned a lot about software valuations here, got to noodle on the epic Roblox direct listing here, dug into fintech’s venture successes and weaknesses, and checked out the Global-e IPO filing. Oh, and M1 Finance raised again, while Clara and Arist raised small, but fun rounds.

Alex

Tiger Global in talks to invest in young Indian social network at $170M valuation

Who says there is no room for a new social network?

Tiger Global is in advanced stages of talks to lead a round of $15 million to $20 million in seven-month-old Kutumb that values the Indian startup at about $170 million, four people familiar with the matter told TechCrunch.

The American investment firm has offered a termsheet to the Indian startup but the deal — a Series A — has not closed yet, some of the people said on the condition of anonymity as the talks are private. Usual caveat: Terms may change, or the deal may not materialize.

Kutumb, which means family in Hindi, has built a “private social network like Reddit” that connects communities based on “culture, creed, beliefs, interests, [and] professions.”

The startup’s eponymous six-month-old app has amassed over 11 million monthly active users, up from about 550,000 in December last year, according to mobile insight firm App Annie (data of which an industry executive shared with TechCrunch).

Kutumb was valued at about $15 million late last year when it raised funds from Sequoia Capital India’s Surge accelerator. It raised about $2.5 million in its seed financing round, according to insight firm Tracxn.

Tiger Global declined to comment. One of the co-founders of Kutumb didn’t respond to a request for comment.

Luminar, Volvo subsidiary partner to sell automated driving systems to automakers

Luminar Technologies has deepened ties with Volvo Cars to develop and eventually sell an automated driving system for highways to other automakers. The partnership, announced Thursday, is between Luminar and Volvo’s self-driving software subsidiary Zenseact.

The two companies are combining their tech to create what Luminar founder and CEO Austin Russell described as a “holistic autonomous vehicle stack”  made for production vehicles. Volvo will be the first customer. Russell and Zenseact CEO Ödgärd Andersson said Thursday they plan to also offer this system to other automakers.

It’s worth noting how Luminar and Zenseact define highway autonomy. The system they’re developing would allow hands-free, eyes free autonomous driving on highways. That means the driver would be out of the loop, and not expected to take over the vehicle. The transition between this level of autonomy and manual driving is a tricky one that has stumped automakers in the past.

“This is something that’s being solved for just in the next couple of years, this going to be available on vehicles that you can buy starting with Volvo and then expanding outwards — that’s the distinction,” Russell said in a webinar discussing the announcement.

The stack that will be offered to other automakers is called Sentinel, which will integrate Zenseact’s OnePilot autonomous driving software solution alongside Luminar’s Iris lidar, perception software, and other components as a foundation. The system is designed to handle highway autonomy and a number of safety measures to proactively avoid collisions with evasive maneuvers, reducing accident rates by up to seven times, according to Zenseact. The Sentinel product also has the capability of updating wirelessly, or over-the-air, to expand the operating domain of autonomy and further improve safety of vehicles over time, the companies said.

Zenseact might not sound familiar, but its 550-person team has been working on ADAS and software for years. Volvo created Zenseact after ending its joint venture with Veoneer.

Luminar and Zenseact noted that while the wider autonomous industry largely focuses on robotaxi applications, they are focused on delivering systems into series production vehicles. Lidar sensors are considered by many automakers and tech companies an essential piece of technology to safely roll out autonomous vehicles. As the timeline to deploy commercial robotaxi fleets has expanded, automakers have turned back to developing nearer term tech for production vehicles.

“The whole point of autonomous driving technology is to reduce accidents and save lives. This alliance enables us together to make that technology more broadly accessible and thus even more impactful,” Andersson said in a statement.

The announcement comes about 10 months since Volvo announced it would start producing vehicles in 2022 equipped with Luminar’s lidar and a perception stack to deploy an automated driving system for highways. Volvo has said it will take full liability for the automated driving system.

Apple starts assembling iPhone 12 in India

Apple is beginning to assemble the iPhone 12 in India as it ramps up its production capacity in the world’s second largest smartphone market. Foxconn, a contract manufacturing partner of Apple, is assembling the iPhone 12 model — though currently no other iPhone 12 model — Pro and Pro Max, and Mini — in the country.

The move underscores how India is emerging as a big production hub for global smartphone makers. Samsung, Xiaomi, Oppo, Vivo, and OnePlus have been assembling their smartphone models in India for more than half a decade and have increased their production capacities in recent years.

To attract global giants, New Delhi has been offering tax benefits to firms that locally produce in India and in recent quarters has significantly increased the perks.

“We are optimistic and looking forward to building a strong ecosystem across the value chain and integrating with the global value chains, thereby strengthening electronics manufacturing ecosystem in the country,” said India’s IT Minister Ravi Shankar Prasad last year.

Apple began locally assembling select iPhone models in India in 2017 — beginning with the iPhone SE — though for the initial years the company’s contract partners locally produced only older iPhone models in the country.

Analysts have estimated that Apple, which launched its online store in India last year and is working to set up its first physical retail store in the country this year, plans to move between seven to 10% of its iPhone production to India as it looks to cut reliance on China. TechCrunch understands the figure is “wild speculation.”

The iPhone maker suffered a setback in India late last year after a violent protest broke at a facility in Wistron, one of its key manufacturing partners of Apple, near Bangalore last year. But the Taiwanese firm appears to have resolved the issues. It said last month that it was rehiring workers and will soon be resuming production at its facility.

“Apple is dedicated to making the best products and services in the world to delight our customers. We are proud to be starting production of iPhone 12 in India for our local customers,” said an Apple spokesperson in India in a statement.

Apple assumes just 2% of the Indian smartphone market, but it has grown in recent quarters. Apple shipped more than 1.5 million iPhone units in India in the quarter that ended in December, up 100% year-on-year, making this its best quarter in the world’s largest smartphone market to date, according to research firms Counterpoint and CyberMedia Research.

Unlike several foreign firms that offer their products and services at low prices in India, Apple has focused entirely on a small fraction of the population that can afford to pay big bucks, said Jayanth Kolla, chief analyst at Convergence Catalyst. And while it took several years, Apple has carved out a slice of the market that is growing, he said.

Taipei-based Influenxio gets $2M from DCM Ventures for its “microinfluencer” marketing platform

Influencer marketing startup Influenxio's team, with founder and CEO Allan Ko in the center

Influenxio’s team, with founder and chief executive officer Allan Ko in the center

“Microinfluencers” are gaining clout among marketers. Though they may have as little as a thousand followers, microinfluencers tend to focus on specific content and be seen as more engaging and trustworthy by their audience, said Allan Ko, founder and chief executive officer of Influenxio. The Taipei-based startup, which connects brands with Instagram microinfluencers through its online platform, announced today that it has closed $2 million in pre-Series A funding led by DCM Ventures, and is launching a new subscription plan.

Founded in 2018, Influenxio has now raised over $3 million in total, including from seed investor SparkLabs Taipei. It currently operates in Taiwan and Japan, where it has databases of 100,000 and 250,000 Instagram creators, respectively. So far, over 6,000 brands have registered on Influenxio’s platform, and it has been used to run over 1,000 campaigns.

Influenxio plans to use its new funding for hiring and product development. Influenxio’s new subscription plan is a relatively novel model for the field, so one of the startup’s goals is to prove that it works, Ko told TechCrunch. The company also plans to build out its Japanese platform and expand into more countries.

A screenshot of Influenxio's platform

A screenshot of Influenxio’s platform

Influenxio analyzes past campaigns, performance data and client reviews to improve its algorithms. Since the entire campaign creation process–from finding influencers to paying them–is performed through Influenxio, this allows it to gather a wide range of data to refine its technology, Ko told TechCrunch.

Influencers typically make about $35 to $40 USD for each campaign they participate in, and most of the brands the company works with focus on food (like restaurants), fashion, beauty or lifestyle services.

Before launching Influenxio, Ko spent 15 years working in the digital marketing field, serving as an account manager at Yahoo! and Microsoft, and then head of Hong Kong and Taiwan for Google’s online partnerships group. He wanted to create a startup that would combine what he had learned about digital marketing and make accessible to more businesses.

Large brands have used Influenxio to quickly generate marketing campaigns for special occasions like Mother’s Day or Christmas. For example, one advertiser in Taiwan used Influenxio to hire almost 200 influencers in one week, who were asked to test and post about their products, and some of Influenxio’s highest profile clients include Shiseido, Shopee, iHerb and KKBox.

But the majority of Influenxio’s clients (about 80% to 90%) are small- to medium-sized businesses, and Ko said they usually create multiple campaigns to build brand awareness over time, working with a few influencers a month.

Influenxio’s new subscription plan, which costs less than $100 USD a month and is launching first in Taiwan before rolling out to other markets, was created for them. “The first year we launched the platform, we found small businesses want experts and advice,” said Ko. Many don’t have marketing managers, so Influenxio’s subscription plan automatically matches them with new influencers each month and provides them with analytics so they can see how well campaigns are performing.

Influenxio is among a growing number of startups that are tapping into the “microinfluencer economy,” with others including AspireIQ, Upfluence and Grin.

Ko said Influenxio’s biggest difference is its focus on small businesses, and serving as a one-stop marketplace for influencer campaigns. “The important thing for our platform is that it needs to be very easy and simple,” he added. “We spent a lot of time on the execution and details to make it smoother on the advertiser side. For the influencer side, we try to make it more convenient. For example, the way they receive money, our goal is to also make it easy.”

OnePlus recruits Hasselblad for three-year smartphone imaging deal

Imaging has long been the primary battlefield on which the smartphone battles are waged. It makes sense. The thing about smartphones in 2021 is that they’re mostly very good. Sure, there are differentiators, but if you spend a decent amount on a device from any major manufacturer, you’re probably going to get a pretty good device.

But there’s still plenty of opportunity to continually bridge the gap between smartphone imaging and devoted camera systems. And today OnePlus takes a potentially key step in that direction by announcing a partnership with Hasselblad. The DJI-owned Swedish camera maker has signed onto a three-year partnership with OnePlus.

According to a release tied to the news, the pair plan to spend $150 million over the course of the deal, in an attempt to vault OnePlus to the front of the pack. Hasselblad has dipped its toes in the mobile market, including a Moto Z attachment, and has created cameras for DJI drones, but this represents a pretty big move for the 180-year-old camera company.

The first fruits of the partnership will arrive on the OnePlus 9, a new handset set to launch on March 23. The companies promise a “revamped camera system.” The phone will feature a Sony IMX789 sensor, coupled with HDR video and the ability capture 4K at 120FPS and 8K at 30FPS.

Per the release:

The partnership will continuously develop over the next three years, starting with software improvements including color tuning and sensor calibration, and extending to more dimensions in the future. The two parties will jointly define the technology standards of the mobile camera experience and develop innovative imaging technologies, continuing to improve the Hasselblad Camera for Mobile. Both companies are committed to delivering immediate benefit for OnePlus users, while continuously collaborating to further improve the user experience and quality for the long-term.

The deal includes the development of four global labs, including U.S. and Japan locations and:

Pioneering new areas of smartphone imaging technology for future OnePlus camera systems, such as a panoramic camera with a 140-degree field of view, T-lens technology for lightning-fast focus in the front-facing camera, and a freeform lens – to be first introduced on the OnePlus 9 Series – that practically eliminates edge distortion in ultrawide photos.

It will be interesting to see how a company like Hasselblad will take to mobile imaging, though such a deal could be a secret weapon as OnePlus looks to keep on the flagship end of the mobile spectrum against the likes of Apple and Samsung.

This Week in Apps: App Store bill passes AZ House, ‘deep nostalgia’ goes viral, Twitter Spaces arrives on Android

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

The app industry is as hot as ever, with a record 218 billion downloads and $143 billion in global consumer spend in 2020.

Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.

This week we’re looking into the app store bill in Arizona, the trend of animating family photos and what’s next for Twitter’s Clubhouse rival, among other things.

This Week in Apps will soon be a newsletter! Sign up here: techcrunch.com/newsletters.

Top Stories

Arizona House passes a bill that would allow developers to avoid the “Apple tax”

Image Credits: Apple

The Arizona House of Representatives this week passed a bill (HB 2005) that could significantly impact Apple and Google’s grip on the App Store market. Unlike a similar measure recently shot down by the North Dakota Senate, this new bill doesn’t force app stores to offer alternative ways for developers to distribute their apps. Instead, it focuses on giving developers the right to use third-party systems that would allow them to circumvent the 15%-20% cut that Apple and Google take from app sales, in-app purchases and subscriptions.

Apple and Google lobbyists were already fighting against this bill before it was even formally introduced by Arizona State Rep. Regina Cobb. Cobb says she was approached by a lobbyist representing Match Group and the Coalition for App Fairness (CAF) — the latter, which has organized some of Apple’s largest competitors — like Epic Games, Match Group, Spotify and Tile — to fight back against Apple’s control of the app ecosystem.

CAF had also backed the North Dakota bill,, and is helping push legislation in other states, including Minnesota, Georgia and Hawaii.

Some legislators may oppose the bill on the grounds that these decisions are more of a federal matter and concerns over how the state would be able to enforce such a policy. The Arizona bill still has to make it through the Senate (and could be vetoed by Governor Doug Ducey) in order to become a law. If it did pass, it would make Arizona an attractive place to set up an app business and could set the groundwork for other states to pass similar legislation.

Animated family photos top the App Store

#MyHeritage re-animated my grandma Anny (here 16 years old in 1936) and now I’m crying tears of joy, hope, thankfulness, longing & regrets 😍😢💔pic.twitter.com/uXtjBz2UZV

— Susanne Wosnitzka 🍹 (@Donauschwalbe) February 27, 2021

MyHeritage’s recently launched update that lets users animate their old photos helped to send the app to the top of the App Store this week. The company had last week introduced “Deep Nostalgia” — a facial animation feature powered by technology from Israeli tech company (and TechCrunch Battlefield alum) D-ID. To animate the photos, the tech maps the facial features from the photo to a driver video to create what it calls a “live portrait.”

The app went viral on social media, including TikTok, as people used the photo to animate long-ago relatives and other historical figures.

@thomasflanigan_The app is called MyHeritage ##greenscreenvideo ##myheritage ##McDonaldsCCSing ##ancestors♬ record before u listen – penny lane

But in a number of more touching videos, people film themselves reacting to seeing their mom or dad “come to life” again through the tech, blinking, smiling and nodding, often set to “Remember When” by Alan Jackson or “Sign of the Times” by Harry Styles as the background track.

Though MyHeritage shot up to become the No. 1 Overall app on the App Store as of Tuesday, a smaller startup, Rosebud, quietly pivoted to address the same use case with its TokkingHeads app. The app, founded by Berkeley PhD Lisha Li, was originally intended for making funny videos and memes with friends, video game avatars or celebs by animating portrait photos with text, speech and puppetry via video — but not so well that it would cross into “deepfake” territory.

But after the release of MyHeritage’s update, TokkingHeads quickly updated to alert users to its own feature set, while also elevating the MyHeritage-like animations it offers in the app. As a result, the app started to gain a following of its own. On February 28, 2021, TokkingHeads saw 1,000 downloads. The next day, it had 8,000 downloads. The following two days, March 2 and 3, it saw 24,000 downloads and 28,000 downloads, respectively.

The app has since reached as high as No. 12 in the App Store’s Entertainment category, as of the time of writing, and No. 94 Overall. (And was climbing daily.)

@mirandasevier#tokkingheads #fyp♬ Go Rest High On That Mountain – Vince Gill

The YC-backed startup’s ambitions extend beyond animated photos, however. It’s been developing internal tools which it used to generate backgrounds and visuals for use in personalized media. It’s been testing these tools with personalized meditation videos on TikTok, but isn’t yet ready to fully announce a new product. Rosebud is backed by $2.2 million in seed funding led by Khosla Ventures, with participation from Twitch COO Kevin Lin, OpenAI co-founder Ilya Sutskever, former Coinbase CTO Balaji Srinivasan and others.

 Weekly News

Platforms: Apple

Apple Music icon on iPhone

Image Credits: TechCrunch

Apple clarifies you can’t actually set a “default” music service in iOS 14.5. It explains that the Siri feature that asks you how you want to play the music or other audio (like podcasts or audiobooks) that you’ve requested is only an example of Siri Intelligence, and is not technically making that service a “default.”

Apple’s courtroom battle with Epic Games over the App Store’s alleged anti-competitive behavior is set to start May 3. The judge believes the case is significant enough to hold an in-person trial with witnesses.

The U.K.’s anti-competition authority, CMA (Competition and Markets Authority) is opening its own investigation into Apple’s App Store, following a number of complaints from developers alleging unfair terms.

Apple releases iOS 14.5 beta 3. The new release adds a notification banner to iPhone if you have your Apple Watch set to unlock your paired phone; brings back the Siri feature to choose your preferred audio app for certain requests; updates the Find My screen with plans to support accessories; and makes reference to Apple Card Family features, among other things.

In a bit of App Store history revealed this week, Apple’s Scott Forstall once told Pandora to use jailbroken iPhones to develop their music app ahead of the App Store’s launch.

Apple shuts down Buddybuild, the app development service it acquired in 2018. The team had joined the Xcode group at Apple, but Buddybuild remained online for existing customers. An email has now informed those customers it will cease operations on March 31, 2021.

Apple’s upcoming AirTags gains an anti-stalking feature. In the latest iOS 14.5 beta, a new “Item Safety Features” option was found to be on by default. It would warn you if someone secretly hid an AirTag in your possessions.

Something I hadn’t considered before: new beta includes a Item Safety setting in Find My. This is how Apple is trying to prevent ‘stalking’ with AirTags. If someone secretly hides a tag in your possessions, your phone will notice and warn you about it. pic.twitter.com/NVJyAZlthw

— Benjamin Mayo (@bzamayo) March 4, 2021

Platforms: Google

Google Play announced it’s reducing the minimum price limit for products in over 20 markets across Latin America, EMEA and APAC. In these markets, developers can now set prices in the range of 10-30 cents U.S. equivalent — or “sub dollar” prices. Google says this will allow developers to reach new potential buyers.

Image Credits: Google

Google debuted Flutter 2, an upgrade that broadens Flutter from a mobile framework to a portable framework. Flutter 2 will allow developers to ship native apps across iOS, Android, Windows, macOS and Linux, as well as web experiences for Chrome, Safari, Firefox and Edge, and cars, TVs and smart TVs. Google says there are now more than 150,000 Flutter apps on the Play Store today, including WeChat, Grab, Yandex Go, Sonos, Betterment and others.

The Google Play Console added a new suite of metrics and comparison benchmarks that will allow developers to evaluate the app’s engagement and monetization against up to 250 different peer sets.

E-commerce

Twitter tests new e-commerce features for tweets. The company was spotted testing a different style of organic tweet which includes product info, pricing and a big “Shop” button. The company confirmed it’s one of many commerce tests in the works.

Amazon’s mobile app got a new icon…again. Customers complained the first iteration, which featured Amazon’s smiling arrow across a brown box with a piece of blue tape at the top, reminded them of Hitler. The updated look gives the tape a smooth edge.

Amazon switches look of app icon after people compare it to Hitler’s mustache https://t.co/yEdHgrzSCN pic.twitter.com/bIenYA7wIf

— philip lewis (@Phil_Lewis_) March 2, 2021

Augmented Reality

The Google Play Service for AR app, which delivers ARCore updates to Android phones, was updated to include support for dual cameras instead of just one, as before. The change was spotted by Android Police, which noted that the support would arrive on Pixel 4 devices first.

Fintech

More evidence of Apple Card Family support spotted in iOS 14.5 beta 3. The new feature will allow family members to share the same Apple Card through iCloud Family Sharing, so each member can access the card in the Wallet app.

Social

Twitter logo at CES 2020

Image Credits: TechCrunch

Twitter Spaces beat Clubhouse to Android. Twitter’s social audio service and Clubhouse rival, Twitter Spaces, has been iterating at a rapid pace. The company has been sharing features in public as they’re designed and prototyped, including titles and descriptionsscheduling options, support for co-hosts and moderatorsguest lists and more. Twitter also updated the preview card that appears in the timeline and relabeled its “captions” feature to be more accurate, from an accessibility standpoint. This fast pace of development allowed the new product to reach Android users this week, ahead of Clubhouse. However, Android users can only join Spaces for the time being, they can’t host them. Still, the move will help to serve the pent-up demand for social audio among a huge chunk of the mobile market.

LinkedIn says it will stop using IDFA ahead of the iOS App Tracking Transparency launch. The business social network is getting ahead of the change and says it will instead leverage “first-party data” to help advertisers.

Instagram accidentally hid “likes” for a number of users in the U.S., who were unintentionally added to the ongoing test where likes are no longer displayed. The company attributed this to a bug and said it was fixing the issue ASAP.

Right-wing social app Parler had dropped its lawsuit against AWS to get its cloud hosting services reinstated, but its fight isn’t over yet. In a new case, Parler is now going after Amazon with more charges, including defamation, negligence and breach of contract. The suit claims Parler lost “tens of millions” of users and future users” as well as “hundreds of millions” in revenue.

TikTok adds a Business Profile section for marketers and brands. The section offers marketing tips, insights on app usage and advertising events — and likely, in the future, e-commerce tools.

TikTok forms a Safety Advisory Council in Europe, following the death of a girl who fatally attempted the blackout challenge she saw on the app, leading to emergency intervention by Italy’s data protection authority.

Instagram launches “Live Rooms” for live broadcasts with up to four creators. Previously only two people could go live. The launch has a bit of Clubhouse envy to it, as Instagram notes it could be used for things like talk shows, Q&As and interviews, for example. A similar feature has been spotted in TikTok in recent weeks, as well.

Facebook launched BARS, a TikTok-like app for creating and sharing raps. In the app, users react with “fire” emoji while flipping through a full-screen, vertical video feed of people’s raps.

TikTok launches TikTok Q&A. The new feature will allow creators to respond to viewer questions with either text or video replies, including during livestreams. The questions and answers will also be organized in a new Q&A page, linked from the bio. The feature is a direct response to how many creators were already using the app to interact with fans.

Image Credits: TikTok

Photos

Apple introduced a service that will allow iCloud users to transfer their photos and videos to Google Photos. Anti-competitive scrutiny cracks the walled garden, it seems.

MyHeritage tops the App Store after launching a new feature called Deep Nostalgia that animates users’ old family photos.

Messaging & Communications

WhatsApp brought voice and video calls to the desktop companion app. The calls are end-to-end encrypted, and will later expand to include group calls.

WeChat updates its emojis to dial down the violence. It removed the cigar from the smoking soldier emoji and removed the blood from the meat cleaver emoji. It also no longer shows a hammer hitting a head — it’s now a frying pan.

Streaming & Entertainment

Image Credits: Netflix

Netflix launches “Fast Laughs,” a TikTok-like feed of funny videos. The mobile feature is currently iOS-only and lets users flip through a full-screen vertical video feed with short clips from Netflix programming, react, share and add items to a watchlist or immediately start streaming.

Apple pulls Music Memos, a music creation tool, from the App Store. The app was used to analyze rhythm and chords from acoustic guitar and piano recordings. The company advised users to export their content to Voice Memos library instead.

Hulu brings back picture-in-picture mode with the latest iOS update. The feature had been available previously, but was pulled so Hulu could make refinements.

Spotify’s podcast listeners in the U.S. expected to top Apple Podcasts for the first time in 2021, at 28.2 million listeners on Spotify versus 28 million on Apple Podcasts.

Gaming

Image Credits: Genshin Impact (via Sensor Tower)

Genshin Impact from miHoYo has reached $874 million in consumer spend since its September 2020 launch, reports Sensor Tower, making it already the world’s third-highest-earning mobile game.

Hypercasual games are now the largest genre for game downloads, a separate Sensor Tower report says. The genre has expanded from a 17% share of downloads in 2017 to now 31% in 2020. Other genres seeing growth include Arcade and Puzzle, increasing by 33% and 78% respectively.

Books and Reading

Flipboard expands its local coverage to over 1,000 cities and towns. The company last year launched a broader initiative around local news, allowing users to follow their local publications, TV stations, blogs and more.

Google Play Books was updated with new tools for younger readers, including “Read & Listen,” which will let kids listen to a book read out loud, “Tap to Read” to hear words spoken out loud and a kid-friendly dictionary.

Health & Fitness

COVID-19 exposure notification apps have still not seen widespread adoption, USA Today reports. Fewer than half of U.S. states offer the contact-tracing apps, and most people in participating states don’t use them.

Amazon Halo users, the app-paired health and fitness tracker from the retail giant, is being integrated with Alexa. The new feature will let you ask Echo and other Alexa devices for health stats.

Best Buy Health partnered with the Lively app to offer a range of health and safety services aimed at older adults on Apple Watch. Apple Watch users can use the app to get emergency and non-emergency assistance from the Lively agents and receive additional protection from things like Fall Detection.

Period tracking app Clue gets FDA clearance to launch a digital contraceptive. The app’s algorithmic prediction is based on Bayesian modeling and can display the days where there’s a higher risk of pregnancy.

Jamaica’s JamCOVID mobile app and website were taken offline following their third security lapse. The platform was exposing quarantine orders on over than half a million travelers.

Productivity

Image Credits: App Annie

Business and productivity apps reached 7.1 billion downloads in 2020, up 35% YoY, reports App Annie. The jump was attributed to the pandemic, with the biggest surge coming in mid-March when shelter-in-place orders kicked in.

Microsoft pulled the Delve mobile apps from the App Store and Google Play, which will be followed by a full shutdown of the service in June. Delve was designed to surface relevant info and insights using the Office Graph. Users were redirected to Outlook Mobile, which has some similar features.

Microsoft launched Group Transcribe, a new kind of mobile transcription app for in-person meetings. The app requires all meeting participants to record from their own phones, which improves accuracy and speaker identification. It also offers real-time translations to help non-native speakers follow along.

Security & Privacy

Thousands of Android and iOS app are leaking data from the cloud, Wired reports. In analysis run on more than 1.3 million Android and iOS apps, researchers found almost 84,000 Android apps and nearly 47,000 iOS apps used public cloud services. Of those, misconfigurations were found in 14% — 11,877 Android apps and 6,608 iOS apps — which were exposing personal information, passwords and medical information.

Hackers released a new jailbreak tool for almost every iPhone by using the same vulnerability Apple said last month was under active attack by hackers. The jailbreak, released by the Unc0ver team, works on iOS 11 to iOS 14.3, and iPhone 5s and later.

Google’s apps with privacy labels have begun receiving updates after lengthy pause. Apps that have started to get updates include Gmail, Slides, Docs, Sheets, Calendar, YouTube, YouTube TV, YouTube Music, Google Tasks and Google Podcasts. Google’s key apps still missing labels include Search, Photos, Assistant, Maps, Pay and Chrome.

Funding and M&A

💰 Stream raised $38 million for its service that lets developers build chat and activity feeds into apps with a few lines of code. The company now powers communications for 1 billion users, including in apps like TaskRabbit, NBC Sports, Delivery Hero, Gojek and others.

💰 Whatnot raised $20 million in Series A funding for its livestreaming platform for selling collectible toys and cards. The round was led by a16z, and follows a $4 million seed raised at the end of 2020.

💰 Snapcommerce raised $85 million for its platform that uses messaging to personalize the mobile shopping experience. Inovia Capital and Lion Capital co-led the new growth round, bringing the startup’s total raise to date to $100 million.

💰 Food delivery app Instacart raised $265 million at a $39 billion valuation. The round was raised from existing investors, including Andreessen Horowitz, Sequoia Capital, D1 Capital Partners and others and pushes the valuation up from $17.7 billion in October 2020.

🤝 Okta acquired cloud identity startup Auth0 for $6.5 billion. Auth0 offers authentication and security for apps across native mobile, desktop, and web apps. Following the deal, Auth0 will continue to operate as an independent unit inside Okta.

🤝 Fintech Square acquired Jay-Z’s streaming service TIDAL for $297 million. Perhaps those yachting trips paid off? Square plans to offer financial tools to artists to help them collect revenue. Despite the deal’s seeming oddness, a good bet is that Square plans to expand into music-based NFTs.

📈 App marketing company AppLovin filed its S-1 ahead of its IPO. The company was valued at $2 billion in 2018, but posted a net loss of $125.9 million in 2020 on revenue of $1.45 billion, up 46% YoY. The company warned investors that it may be impacted by Apple’s IDFA changes.

💰 Maestro raised $15 million for its interactive commerce, community and engagement tools for livestreams across web and mobile. Maestro can also be embedded into native mobile apps using a web view.

🤝 Indie weather app Weather Line acquired. The company didn’t provide any details on its acquisition, including the buyer, but said the app will be removed from the App Store. Existing users will continue to have access until April 1, 2022.

💰 Indian jobs app Apna raised $12.5 million in a round led by Sequoia Capital India and Greenoaks Capital. The app is now used by 80,000 employers and 6 million+ workers such as drivers, delivery personnel, electricians and beauticians.

💰 Istanbul’s Dream Games raised $50 million and launched its first mobile gaming title, Royal Match. The round, led by Index Ventures, is the largest Series A raised by a startup in Turkey.

Downloads

West Tenth 

Image Credits: West Tenth

West Tenth’s new app aims to give local home-based business owners a platform to reach potential clients and make sales. The app focuses on women who have opted out of the traditional workforce to stay home, often to raise kids and work more flexible hours. Often targeted by predatory MLMs, West Tenth aims to convince women that many of their everyday skills are, in fact, marketable businesses — like cooking and meal prep, party planning, interior design, photography, home organization, baby sleep training, fitness instructions, homemade crafts and more. The startup also offers online education classes to teach women the basics of marketing and running a home business. (iOS and Android)

Cappuccino

Social audio is growing in popularity thanks to apps like Clubhouse and Twitter’s Spaces. A startup called Cappuccino, reviewed here by TechCrunch, now wants to bring social audio to a more intimate setting: groups of friends. The anti-Clubhouse app lets friends record “podcasts,” which are designed for private consumption. (iOS and Android)

Tweets

If you had any doubts at all about the Wild Wild West that are App Store ratings & reviews, someone is currently buying fake 5-star reviews for my own FlickType app – presumably so that Apple will take my app down.

Apple’s fake review detection is failing *so* miserably. pic.twitter.com/kPcCnm7xyM

— Kosta Eleftheriou (@keleftheriou) March 5, 2021

In his interview with CNBC and New York Times journalist Andrew Ross Sorkin, Bill Gates said “I actually use an Android phone. I’ll often play around with iPhones, but the one I carry around happens to be Android. pic.twitter.com/bpX6aTl9nf

— Fossbytes (@fossbytes14) February 28, 2021

A first look at Coursera’s S-1 filing

After TechCrunch broke the news yesterday that Coursera was planning to file its S-1 today, the edtech company officially dropped the document Friday evening.

Coursera was last valued at $2.4 billion by the private markets, when it most recently raised a Series F round in October 2020 that was worth $130 million.

Coursera’s S-1 filing offers a glimpse into the finances of how an edtech company, accelerated by the pandemic, performed over the past year. It paints a picture of growth, albeit one that came at steep expense.

Revenue

In 2020, Coursera saw $293.5 million in revenue. That’s a roughly 59% increase from the year prior when the company recorded $184.4 million in top line. During that same period, Coursera posted a net loss of nearly $67 million, up 46% from the previous year’s $46.7 million net deficit.

Notably the company had roughly the same noncash, share-based compensation expenses in both years. Even if we allow the company to judge its profitability on an adjusted EBITDA basis, Coursera’s losses still rose from 2019 to 2020, expanding from $26.9 million to $39.8 million.

To understand the difference between net losses and adjusted losses it’s worth unpacking the EBITDA acronym. Standing for “earnings before interest, taxes, depreciation and amortization,” EBITDA strips out some nonoperating costs to give investors a possible better picture of the continuing health of a business, without getting caught up in accounting nuance. Adjusted EBITDA takes the concept one step further, also removing the noncash cost of share-based compensation, and in an even more cheeky move, in this case also deducts “payroll tax expense related to stock-based activities” as well.

For our purposes, even when we grade Coursera’s profitability on a very polite curve it still winds up generating stiff losses. Indeed, the company’s adjusted EBITDA as a percentage of revenue — a way of determining profitability in contrast to revenue — barely improved from a 2019 result of -15% to -14% in 2020.

Indonesian logistics startup SiCepat raises $170 million Series B

SiCepat, an end-to-end logistics startup in Indonesia, announced today it has raised a $170 million Series B funding round. Founded in 2014 to provide last-mile deliveries for small merchants, the company has since expanded to serve large e-commerce platforms, too. Its services now also cover warehousing and fulfillment, middle-mile logistics and online distribution.

Investors in SiCepat’s Series B include Falcon House Partners; Kejora Capital; DEG (the German Development Finance Institution); Telkom Indonesia’s investment arm MDI Ventures; Indies Capital; Temasek Holdings subsidiary Pavilion Capital; Tri Hill; and Daiwa Securities. The company’s last funding announcement was a $50 million Series A in April 2019.

In a press statement, The Kim Hai, founder and chief executive officer of SiCepat’s parent company Onstar Express, said the funding will be used to “further fortify SiCepat’s position as the leading end-to-end logistics service provider in the Indonesian market and potentially to explore expansion to other markets in Southeast Asia.” SiCepat claims to be profitable already and that it was able to fulfill more than 1.4 million packages per day in 2020.

The logistics industry in Indonesia is highly fragmented, which means higher costs for businesses. At the same time, demand for deliveries is increasing thanks to the growth of e-commerce, especially during the COVID-19 pandemic.

SiCepat is one of several Indonesian startups that have raised funding recently to make the supply chain and logistics infrastructure more efficient. For example, earlier this week, supply chain SaaS provider Advotics announced a $2.75 million round. Other notable startups in the space include Kargo, founded by a former Uber Asia executive, and Waresix.

SiCepat focuses in particular on e-commerce and social commerce, or people who sell goods through their social media networks. In statement, Kejora Capital managing partner Sebastian Togelang, said the Indonesian e-commerce market is expected to grow at five-year compounded annual growth rate of 21%, reaching $82 billion by 2025.

“We believe SiCepat is ideally positioned to serve customers from e-commerce giants to uprising social commerce players which contribute an estimated 25% to the total digital commerce economy,” he added.

Indian state government website exposed COVID-19 lab test results

A security flaw in a website run by the government of West Bengal in India exposed the lab results of at least hundreds of thousands of residents, though likely millions, who took a COVID-19 test.

The website is part of the West Bengal government’s mass coronavirus testing program. Once a COVID-19 test result is ready, the government sends a text message to the patient with a link to its website containing their test results.

But security researcher Sourajeet Majumder found that the link containing the patient’s unique test identification number was scrambled with base64 encoding, which can be easily converted using online tools. Because the identification numbers were incrementally sequenced, the website bug meant that anyone could change that number in their browser’s address bar and view other patients’ test results.

The test results contain the patient’s name, sex, age, postal address, and if the patient’s lab test result came back positive, negative, or inconclusive for COVID-19.

Majumder told TechCrunch that he was concerned a malicious attacker could scrape the site and sell the data. “This is a privacy violation if somebody else gets access to my private information,” he said.

Two COVID-19 lab test results, but with details redacted, to show what kind of data has been exposed.

Two redacted COVID-19 lab test results exposed as a result of a security vulnerability on the West Bengal government’s website. (Screenshot: TechCrunch)

Majumder reported the vulnerability to India’s CERT, the country’s dedicated cybersecurity response unit, which acknowledged the issue in an email. He also contacted the West Bengal government’s website manager, who did not respond. TechCrunch independently confirmed the vulnerability and also reached out to the West Bengal government, which pulled the website offline, but did not return our requests for comment.

TechCrunch held our report until the vulnerability was fixed or no longer presented a risk. At the time of publication, the affected website remains offline.

It’s not known exactly how many COVID-19 lab results were exposed because of this security lapse, or if anyone other than Majumder discovered the vulnerability. At the time the website was pulled offline at the end of February, the state government had tested more than 8.5 million residents for COVID-19.

West Bengal is one of the most populated states of India, with about 90 million residents. Since the start of the pandemic, the state government has recorded more than 10,000 coronavirus deaths.

It’s the latest of several security incidents in the past few months to hit India and its response to the coronavirus pandemic.

Last May, India’s largest cell network Jio admitted a security lapse after a security researcher found a database containing the company’s coronavirus symptom checker, which Jio had launched months earlier.

In October, a security researcher found Dr Lal PathLabs left hundreds of spreadsheets containing millions of patient booking records — including for COVID-19 tests — on a public storage server that was not protected with a password, allowing anyone to access sensitive patient data.


Send tips securely over Signal and WhatsApp to +1 646-755-8849. You can also send files or documents using SecureDrop.

Indonesian supply chain startup Advotics raises $2.75M led by East Ventures

The rapid growth of e-commerce in Indonesia, especially during the pandemic, is placing increasing demands on its supply chain infrastructure. But the country’s logistics industry is highly fragmented, with companies usually relying on multiple providers for one shipment, and many warehouses are still concentrated around major cities. Advotics wants to help with software to make the whole supply chain easier to track, and recently closed a $2.75 million funding round led by East Ventures.

Founded in 2016 by Boris Sanjaya, Hendi Chandi and Jeffry Tani, Advotics currently counts more than 70 clients, ranging from individual resellers to large corporations like Exxonmobil, Danone, Reckitt Benckiser, Sampoerna, Kalbe and Mulia Group.

According to research institution Statistics Indonesia, there are about 5 million small and medium-sized manufacturers in Indonesia. They use a supply chain with 15 million small to mid-sized distributors and about 288,000 large distribution companies. This fragmentation means higher expenses, with Report Linker estimating that logistics costs range between 25% to 30% of Indonesia’s gross domestic product.

To help make logistics more efficient for its clients, Advotics offers SaaS solutions to monitor almost their entire supply and logistics chain, from warehouse inventory to generating delivery routes for drivers. It includes a product digitalization feature that uses QR codes to track products and prevent counterfeiting. The company’s new funding will be used to launch a online-to-offline system for SMEs and grow its sales team.

Advotics is among several tech startups that are taking different approaches to tackle Indonesia’s logistics infrastructure. For example, Shipper wants to give sellers access to “Amazon-level logistics,” while Logisly is focused on digitizing truck shipments. Waresix recently acquired Trukita to connect businesses to shippers and truck shipment platform Kargo’s backers include Uber co-founder Travis Kalanick.

Humaans raises $5M seed to make it easier for companies to on-board and manage staff

Humaans, a London-based HR startup, has raised $5 million in seed funding to accelerate the development of its employee on-boarding and management platform. Backing the round is Y Combinator, Mattias Ljungman’s Moonfire, Frontline Ventures and former head of Stripe Issuing, Lachy Groom.

A number of other investors, made up of seasoned entrepreneurs and startup operators, also participated. They include LinkedIn CEO Jeff Weiner (via Next Play Ventures), Stripe COO Claire Johnson, Figma CEO Dylan Field, Intercom co-founder Des Traynor, former Workday CTO David Clarke, former Benchmark GP Scott Belsky, Notion COO Akshay Kothari, Qubit co-founder Emre Baran, Evervault CEO Shane Curren and Stripe head of security Gerardo Di Giacomo.

Founded by former Qubit employees Giovanni Luperti and Karolis Narkevicius, Humaans came into existence formerly in April 2020 after the pair quit the product agency they had founded together. With a soft launch the previous year while bootstrapping, and with validation from early users, Luperti and Narkevicius decided they had found enough product-market fit to focus on the startup full-time.

“We bootstrapped Humaans by reinvesting capital from the previous businesses we co-founded,” explains CEO Luperti. “After gaining initial commercial traction, we decided to raise capital and brought a number of investors and operators onboard, and joined Y Combinator”.

Pitching itself as a central hub for employee on-boarding and management — or a single source of truth for staffing — Humaans aims to play nicely by integrating with other existing SaaS used across the “HR stack”. This is because scaling companies are increasingly rejecting all-encompassing HR software and using the best modern SaaS offerings for various different functions.

“Companies are frustrated with poorly integrated HR stacks, making processes slow while exposing them to compliance risks,” says Luperti. “This is why the adoption of point solutions is increasing dramatically. Companies are adopting what’s best based on their needs and stage of growth to address their people needs”.

For example, a company may choose an applicant tracking system, a performance management system, contract management software and an employee engagement platform, and so on. “This makes the ‘all-in-one’ model antiquated, creating the opportunity for a solution like Humaans to emerge. We’re building a layer of infrastructure for all employee data”.

This is seeing Humaans attempt to bring together the full HR stack and automate processes like on-boarding, off-boarding and compensation management with fast workflows that can be set up not dissimilar to an IFTTT or Zapier-style type of interaction model.

Image Credits: Humaans

“If you ask around, most employees dislike their HR software,” says Luperti. “HR tools have historically been clunky, slow and not good at providing a good user experience. Existing players focused more on sales and acquisition than retention through product. But HR buyers today are more sophisticated than ever and have an appetite for best in class. We’re building the Slack of HR… an employee management platform that’s both delightful and very powerful”.

To that end, Humaans says it grew 3x in the past few months and is popular amongst distributed companies, such as Pleo, ChartMogul, Bombinate, HeySummit and Pento.

Adds the Humaans CEO: “There are two segments of existing players: those targeting SMEs, and those working with corporations. Serving the companies in the middle is the opportunity we’re going after”.

Coupang may raise up to $3.6 billion in its IPO, at a potential valuation of $51 billion

According to an amended S-1 filing, South Korean e-commerce leader Coupang expects to price its initial public offering between $27 to $30 per share, potentially raising up to $3.6 billion. After the IPO, Coupang will have a total of 1.7 billion shares outstanding, including Class A and Class B. This means the means the pricing would give Coupang a potential market capitalization between $46 billion to $51 billion, a huge increase over the $9 billion valuation it reached after its last funding round in 2018, led by SoftBank Vision Fund.

Coupang and some of its existing shareholders will offer a total of 120 million shares during the IPO.

If Coupang’s IPO is successful, it would be a huge win for SoftBank Vision Fund, which will own 36.8% of its Class A shares after the listing.

Founded in 2010 by Bom Kim, Coupang is known for its ultra-speedy deliveries and is now the largest e-commerce company in South Korea, according to Euromonitor. According to the filing, Kim will hold 76.7% of voting power after the listing, while SoftBank Vision Fund will hold about 8.6%. Other investors that currently own 5% or more of Coupang’s shares include Greenoaks Capital Partners, Maverick Holdings, Rose Park Advisors, BlackRock and Ridd Investments.

Coupang filed to go public on the New York Stock Exchange last month, under the symbol CPNG. Based on Bloomberg data, Coupang’s listing will be the fourth-biggest by an Asian company on a U.S. exchange, and the largest since Alibaba’s $25 billion IPO in 2014.

Qualcomm veteran to replace Alain Crozier as Microsoft Greater China boss

Microsoft is getting a new leader for its Greater China business. Yang Hou, a former senior vice president at Qualcomm, will take over Alain Crozier as the chairman and chief executive officer for Microsoft Greater China Region, says a company announcement released Monday.

After eight years at Qualcomm where he led sales and business development, Hou will spearhead strategy, sales and operation for Microsoft in the Greater China region. Hou was credited for achieving 3X revenue growth for Qualcomm’s semiconductor business and fostering partnerships in the smartphone, industrial and automotive industries in China, according to the announcement.

A native of northeast China, Hou had a five-year stint at McKinsey & Company after he graduated from the University of Michigan and Peking University.

Crozier joined Microsoft back in 1994 and will officially pass the torch to Hou in July. His next step is yet to be announced.

Crozier is resigning at a time when China is racing to outrace the U.S. as the global technology leader. The ongoing U.S.-China trade dispute has shaken the global supply chain, jacking up manufacturing costs for American hardware makers. Meanwhile, a number of legacy U.S. tech giants are scaling back their presence in China, where historically they have maintained research teams to better grasp the flourishing Chinese market.

In 2019, Oracle laid off hundreds of staff at its R&D center in China. Last year, IBM closed its R&D center in China after 25 years in part due to increased labor costs, former employees told TechCrunch.

The Microsoft counterpart, Microsoft Research Asia, is widely respected and regarded as the “West Point” for China’s artificial intelligence scientists. Famed alumni include ByteDance founder Zhang Yiming and the founder of autonomous driving unicorn Momenta.

Compared to its fame in China’s tech industry, Microsoft’s revenue in China is modest as a result of rampant piracy and competition. In a 2018 interview, former Microsoft CEO Steve Ballmer said 90% of companies in China were using the Microsoft operating system but only 1% were paying for it.

On the new business front, Microsoft has tried to peddle its Azure cloud computing product to Chinese enterprises but has so far been dwarfed by domestic players Alibaba, Tencent and Huawei.

China contributed less than 2% of Microsoft’s annual revenue, or around $2 billion, president Brad Smith said in January 2020.

Like other foreign tech firms operating in China, Microsoft is often caught in the middle between local authorities and speech advocates. Its professional social network LinkedIn and search engine Bing have both been criticized for censoring content considered sensitive by the Chinese government.

How investors are valuing the pandemic

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Ready? Let’s talk money, startups and spicy IPO rumors.

Kicking off with a tiny bit of housekeeping: Equity is now doing more stuff. And TechCrunch has its Justice and Early-Stage events coming up. I am interviewing the CRO of Zoom for the latter. And The Exchange itself has some long-overdue stuff coming next week, including $50M and $100M ARR updates (Druva, etc.), a peek at consumption based pricing vs. traditional SaaS models (featuring Fastly, Appian, BigCommerce CEOs, etc.), and more. Woo! 

This week both DoorDash and Airbnb reported earnings for the first time as public companies, marking their real graduation into the ranks of the exited unicorns. We’re keeping our usual eye on the earnings cycle, quietly, but today we have some learnings for the startup world.

Some basics will help us get started. DoorDash beat growth expectations in Q4, reporting revenue of $970 million versus an expected $938 million. The gap between the two likely comes partially from how new the DoorDash stock is, and the pandemic making it difficult to forecast. Despite the outsized growth, DoorDash shares initially fell sharply after the report, though they largely recovered on Friday.

Why the initial dip? I reckon the company’s net loss was larger than investors hoped — though a large GAAP deficit is standard for first quarters post-debut. That concern might have been tempered by the company’s earnings call, which included a note from the company’s CFO that it is “seeing acceleration in January relative to our order growth in December as well as in Q4.” That’s encouraging. On the flip side, the company’s CFO did say “starting from Q2 onwards, we’re going to see a reversion toward pre-COVID behavior within the customer base.”

Takeaway: Big companies are anticipating a return to pre-COVID behavior, just not quite yet. Firms that benefited from COVID-19 are being heavily scrutinized. And they expect tailwinds to fade as the year progresses.

And then there’s Airbnb, which is up around 16% today. Why? It beat revenue expectations, while also losing lots of money. Airbnb’s net loss in Q4 2020 was more than 10x DoorDash’s own. So why did Airbnb get a bump while DoorDash got dinged? Its large revenue beat ($859 million, instead of an expected $748 million), and potential for future growth; investors are expecting that Airbnb’s current besting of expectations will lead to even more growth down the road.

Takeaway: Provided that you have a good story to tell regarding future growth, investors are still willing to accept sharp losses; the growth trade is alive, then, even as companies that may have already received a boost endure increased scrutiny.

For startups, valuation pressure or lift could come down to which side of the pandemic they are on; are they on the tail end of their tailwind (remote-work focused SaaS, perhaps?), or on the ascent (restaurant tech, maybe?). Something to chew on before you raise.

Market Notes

It was one blistering week for funding rounds. Crunchbase News, my former journalistic home, has a great piece out on just how many massive rounds we’re seeing so far this year. But even one or two steps down in scale, funding activity was super busy.

A few rounds that I could not get to this week that caught my eye included a $90 million round for Terminus (ABM-focused GTM juicer, I suppose), Anchorage’s $80 million Series C (cryptostorage for big money), and Foxtrot Market’s $42 million Series B (rapid delivery of yuppie and zoomer essentials).

Sitting here now, finally writing a tidbit about each, I am reminded at the sheer breadth of the tech market. Termius helps other companies sell, Anchorage wants to keep your ETH safe, while Foxtrot wants to help you replenish your breakfast rosé stock before you have to endure a dry morning. What a mix. And each must be generating venture-acceptable growth, as they have not merely raised more capital but raised rather large rounds for their purported maturity (measured by their listed Series stage, though the moniker can be more canard than guide.)

I jokingly call this little section of the newsletter Market Notes, a jest as how can you possibly note the whole market that we care about? These companies and their recent capital infusions underscore the point.

Various and Sundry

Finally, two notes from earnings calls. The first from Root, which is a head scratcher, and the second from Booking Holdings’ results.

I chatted with Alex Timm, Root Insurance’s CEO this week moments after it dropped numbers. As such I didn’t have much context in the way of investor response to its results. My read was that Root was super capitalized, and has pretty big expansion plans. Timm was upbeat about his company’s improving economics (on a loss ratio and loss-adjusted expenses basis, for the insurtech fans out there), and growth during the pandemic.

But then today its shares are off 16%. Parsing the analyst call, there’s movement in Root’s economic profile (regarding premium-ceding variance over the coming quarters) that make it hard to fully grok its full-year growth from where I sit. But it appears that Root’s business is still molting to a degree that is almost refreshing; the company could have gone public in 2022 with some of its current evolution behind it, but instead it raised a zillion dollars last year and is public now.

Sticking our neck out a bit, despite fellow neo-insurnace player Lemonade’s continued, and impressive valuation run, MetroMile’s stock is also softening, while Root’s has lost more than half its value from its IPO date. If the current repricing of some neo-insurance players continues, we could see some private investment into the space slow. (Fewer things like this?) It’s a possible trend we’ll have eyes on this year.

Next, Booking Holdings, the company that owns Priceline and other travel properties. Given that Booking might have notes regarding the future of business travel — which we care about for clues regarding what could come for remote work and office culture, things that impact everything from startup hub locations to software sales — The Exchange snagged a call slot and dialed the company up.

Booking Holdings’ CEO Glenn Fogel didn’t have a comment as to how his company is trading at all-time highs despite suffering from sharp year-over-year revenue declines. He did note that the pandemic has shaken up expectations for conversations, which could limit short-term business travel in the future for meetings that may now be conducted on video calls. He was bullish on future conference travel (good news for TechCrunch, I suppose), and future travel more generally.

So concerning the jetting perspective, we don’t know anything yet. Booking Holdings is not saying much, perhaps because it just doesn’t know when things will turn around. Fair enough. Perhaps after another three months of vaccine rollout will give us a better window into what a partial return to an old normal could look like.

And to cap off, you can read Apex Holdings’ SPAC presentation here, and Markforged’s here. Also I wrote about the buy-now-pay-later space here, riffed on the Digital Ocean IPO with Ron Miller here, and doodled on Toast’s valuation and the Olo debut here.

Hugs, and have a lovely weekend!

Alex

 

What the NFT? VC David Pakman dumbs down the intensifying digital collectibles frenzy

Non-fungible tokens have been around for two years, but these NFTs, one-of-one digital items on the Ethereum and other blockchains, are suddenly becoming a more popular way to collect visual art primarily, whether it’s an animated cat or an NBA clip or virtual furniture.

“Suddenly” is hardly an overstatement. According to the outlet Cointelegraph, during the second half of last year, $9 million worth of NFT goods sold to buyers; during one 24-hour window earlier this week, $60 million worth of digital goods were sold.

What’s going on? A thorough New York Times piece on the trend earlier this week likely fueled new interest, along with a separate piece in Esquire about the artist Beeple, a Wisconsin dad whose digital drawings, which he has created every single day for the last 13 years, began selling like hotcakes in December. If you need further evidence of a tipping point (and it is ample right now), consider that the work of Beeple, whose real name is Mike Winkelmann, was just made available through Christie’s. It’s the venerable auction house’s first sale of exclusively digital work.

To better understand the market and why it’s blowing up in real time, we talked this week with David Pakman, a former internet entrepreneur who joined the venture firm Venrock a dozen years ago and began tracking Bitcoin soon after, even mining the cryptocurrency at his Bay Area home beginning in 2015. (“People would come over and see racks of computers, and it was like, ‘It’s sort of hard to explain.’”)

Perhaps it’s no surprise that he also became convinced early on of the promise of NFTs, persuading Venrock to lead the $15 million Series A round for a young startup, Dapper Labs, when its primary offering was CryptoKitties, limited-edition digital cats that can be bought and bred with cryptocurrency.

While the concept baffled some at the time, Pakman has long seen the day when Dapper’s offerings will be far more extensive, and indeed, a recent Dapper deal with the NBA to sell collectible highlight clips has already attracted so much interest that Dapper is reportedly right now raising $250 million in new funding at a post-money valuation of $2 billion. While Pakman declined to confirm or correct that figure, he did answer our other questions in a chat that’s been edited here for length and clarity.

TC: David, dumb things down for us. Why is the world so gung-ho about NFTs right now?

DP: One of the biggest problems with crypto — the reason it scares so many people — is it uses all these really esoteric terms to explain very basic concepts, so let’s just keep it really simple. About 40% of humans collect things — baseball cards, shoes, artwork, wine. And there’s a whole bunch of psychological reasons why. Some people have a need to complete a set. Some people do it for investment reasons. Some people want an heirloom to pass down. But we could only collect things in the real world because digital collectibles were too easy to copy.

Then the blockchain came around and [it allowed us to] make digital collectibles immutable, with a record of who owns what that you can’t really copy. You can screenshot it, but you don’t really own the digital collectible, and you won’t be able to do anything with that screenshot. You won’t be able to to sell it or trade it. The proof is in the blockchain. So I was a believer that crypto-based collectibles could be really big and actually could be the thing that takes crypto mainstream and gets the normals into participating in crypto — and that’s exactly what’s happening now.

TC: You mentioned a lot of reasons that people collect items, but one you didn’t mention is status. Assuming that’s one’s motivation, how do you show off what you’ve amassed online? 

DP: You’re right that one of the other reasons why we collect is to show it off status, but I would actually argue it’s much easier to show off our collections in the digital world. If I’m a car collector, the only way you’re going to see my cars is to come over to the garage. Only a certain number of people can do that. But online, we can display our digital collections. NBA Top Shop, for example, makes it very easy for you to show off your moments. Everyone has a page and there’s an app that’s coming and you can just show it off to anyone in your app, and you can post it to your social networks. And it’s actually really easy to show off how big or exciting your collection is.

TC: It was back in October that Dapper rolled out these video moments, which you buy almost like a Pokemon set in that you’re buying a pack and know you’ll get something “good” but don’t know what. But while almost half it sales have come in through the last week. Why?

DP: There’s only about maybe 30,000 or 40,000 people playing right now. It’s growing 50% or 100% a day. But the growth has been completely organic. The game is actually still in beta, so we haven’t been doing any marketing other than posting some stuff on Twitter. There hasn’t been attempt to market this and get a lot of players [talking about it] because we’re still working the bugs out, and there are a lot of bugs still to be worked out.

But a couple NBA players have seen this and gotten excited about their own moments [on social media]. And there’s maybe a little bit of machismo going on where, ‘Hey, I want my moment to trade for a higher price.’ But I also think it’s the normals who are playing this. All you need to play is a credit card, and something like 65% of the people playing have never owned or traded in crypto before. So I think the thesis that crypto collectibles could be the thing that brings mainstream users into crypto is playing out before our eyes.

TC: How does Dapper get paid?

DP: We get 5% of secondary sales and 100% minus the cost of the transaction on primary sales. Of course, we have a relationship with the NBA, which collects some of that, too. But that’s the basic economics of how the system works.

TC: Does the NBA have a minimum that it has to be paid every year, and then above and beyond that it receives a cut of the action?

DP: I don’t think the company has gone public with the exact economic terms of their relationships with the NBA and the Players Association. But obviously the NBA is the IP owner, and the teams and the players have economic participation in this, which is good, because they’re the ones that are creating the intellectual property here.

But a lot of the appreciation of these moments — if you get one in a pack and you sell it for a higher price — 95% of that appreciation goes to the owner. So it’s very similar to baseball cards, but now IP owners can participate through the life of the product in the downstream economic activity of their intellectual property, which I think is super appealing whether you’re the NBA or someone like Disney, who’s been in the IP licensing business for decades.

And it’s not just major IP where this NFT space is happening. It’s individual creators, musicians, digital artists who could create a piece of digital art, make only five copies of it, and auction it off. They too can collect a little bit each time their works sell in the future.

TC: Regarding NBA Top Shot specifically, prices range massively in terms of what people are paying for the same limited-edition clip. Why?

DP: There are two reasons. One is that like scarce items, lower numbers are worth more than higher numbers, so if there’s a very particular LeBron moment, and they made 500 [copies] of them, and I own number one, and you own number 399, the marketplace is ascribing a higher value to the lower numbers, which is very typical of limited-edition collector pieces. It’s sort of a funny concept. But it is a very human concept.

The other thing is that over time there has been more and more demand to get into this game, so people are willing to pay higher and higher prices. That’s why there’s been a lot of price appreciation for these moments over time.

TC: You mentioned that some of the esoteric language around crypto scares people, but so does the fact that 20% of the world’s bitcoin is permanently inaccessible to its owners, including because of forgotten passwords. Is that a risk with these digital items, which you are essentially storing in a digital locker or wallet?

DP: It’s a complex topic,  but I will say that Dapper has tried to build this in a way where that won’t happen, where there’s effectively some type of password recovery process for people who are storing their moments in Dapper’s wallet.

You will be able to take your moments away from Dapper’s account and put it into other accounts, where you may be on your own in terms of password recovery.

TC: Why is it a complex topic?

DP: There are people who believe that even though centralized account storage is convenient for users, it’s somehow can be distrustful — that the company could de-platform you or turn your account off. And in the crypto world, there’s almost a religious ferocity about making sure that no one can de-platform you, that the things that you buy — your cryptocurrencies or your NFTs. Long term, Dapper supports that. You’ll be able to take your moments anywhere you want. But today, our customers don’t have to worry about that I-lost-my-password-and-I’ll-never-get-my-moments-again problem.

Singapore-based Raena gets $9M Series A for its pivot to skincare and beauty-focused social commerce

A photo of social commerce startup Raena’s team. From left to right: chief operating officer Guo Xing Lim, chief executive officer Sreejita Deb and chief commercial officer Widelia Liu

Raena’s team, from left to right: chief operating officer Guo Xing Lim, chief executive officer Sreejita Deb and chief commercial officer Widelia Liu

Raena was founded in 2019 to create personal care brands with top social media influencers. After several launches, however, the Singapore-based startup quickly noticed an interesting trend: customers were ordering batches of products from Raena every week and reselling them on social media and e-commerce platforms like Shopee and Tokopedia. Last year, the company decided to focus on those sellers, and pivoted to social commerce.

Today Raena announced it has raised a Series A of $9 million, co-led by Alpha Wave Incubation and Alpha JWC Ventures, with participation from AC Ventures and returning investors Beenext, Beenos and Strive. Its last funding announcement was a $1.82 million seed round announced in July 2019.

After interviewing people who were setting up online stores with products from Raena, the company’s team realized that sellers’ earnings potential was capped because they were paying retail prices for their inventory.

They also saw that the even though new C2C retail models, like social commerce, are gaining popularity, the beauty industry’s supply chain hasn’t kept up. Sellers usually need to order minimum quantities, which makes it harder for people to start their own businesses, Raena co-founder Sreejita Deb told TechCrunch,

“Basically, you have to block your capital upfront. It’s difficult for individual sellers or micro-enterpreneurs to work with the old supply chain and categories like beauty,” she said.

Raena decided to pivot to serve those entrepreneurs. The company provides a catalog that includes mostly Japanese and Korean skincare and beauty brands. For those brands, Raena represents a way to enter new markets like Indonesia, which the startup estimates has $20 billion market opportunity.

Raena resellers, who are mostly women between 18 to 34-years-old in Indonesia and Malaysia, pick what items they want to feature on their social media accounts. Most use TikTok or Instagram for promotion, and set up online stores on Shopee or Tokopedia. But they don’t have to carry inventory. When somebody buys a product from a Raena reseller, the reseller orders it from Raena, which ships it directly to the customer.

This drop-shipping model means resellers make higher margins. Since they don’t have to carry inventory, it also dramatically lowers the barrier to launching a small business. Even though Raena’s pivot to social commerce coincided with the COVID-19 pandemic, Deb said it grew its revenue 50 times between January and December 2020. The platform now has more than 1,500 resellers, and claims a 60% seller retention rate after six months on the platform.

She attributes Raena’s growth to several factors, including the increase in online shopping during lockdowns and people looking for ways to earn additional income during the pandemic. While forced to stay at home, many people also began spending more time online, especially on the social media platforms that Raena resellers use.

Raena also benefited from its focus on skincare. Even though many retail categories, including color cosmetics, took a hit, skincare products proved resilient.

“We saw skincare had higher margins, and there are certain markets that are experts at formulating and producing skincare products, and demand for those products in other parts of the world,” she said, adding, “we’ve continued being a skincare company and because that is a category we had insight into, it was our first entry point into this social selling model as well. 90% of our sales are skincare. Our top-selling products are serums, toners, essences, which makes a lot of sense because people are in their homes and have more time to dedicate to their skincare routines.”

Social commerce, which allows people to earn a side income (or even a full-time income), by promoting products through social media, has taken off in several Asian markets. In China, for example, Pinduoduo has become a formidable rival to Alibaba through its group-selling model and focus on fresh produce. In India, Meesho resellers promote products through social media platforms like WhatsApp, Facebook and Instagram.

Social commerce is also gaining traction in Southeast Asia, with gross merchandise value growing threefold during the first half of 2020, according to iKala.

Deb said one of the ways Raena is different from other social commerce companies is that most of its resellers are selling to customers they don’t know, instead of focusing on family and friends. Many already had TikTok or Instagram profiles focused on beauty and skincare, and had developed reputations for being knowledgeable about products.

As Raena develops, it plans to hire a tech team to build tools that will simplify the process of managing orders and also strike deals directly with manufacturers to increase profit margins for resellers. The funding will be used to increase its team from 15 to over 100 over the next three months, and it plans to enter more Southeast Asian markets.

Rainmaking launches Motion Ventures to boost innovation in the maritime industry

A new fund has launched, with backing from the Singaporean government, to support tech innovation for the maritime industry. Called Motion Ventures, it is targeting $30 million SGD (about $22.8 million USD) and has completed its first close, with Wilhelmsen, one of the world’s largest maritime networks, and logistics company HHLA as anchor investors.

Motion Ventures was launched by Rainmaking, the venture building and investment firm that runs accelerator program Startupbootcamp, and will jointly invest in startups with SEEDS Capital, the investment arm of government agency Enterprise Singapore.

SEEDS Capital announced in June 2020 that it plans to invest $50 million SGD in maritime startups, with the goal of creating more resilient supply chains and fixing issues underscored by the COVID-19 pandemic.

Shaun Hon, general partner at Motion Ventures and director at Rainmaking, told TechCrunch that the fund plans to invest in around 20 early-stage startups focused on AI, machine learning and automation, with check sizes ranging between $500,000 SGD to $2 million SGD.

“We’ve got our eyes on some of the maritime value chain’s biggest challenges including decarbonization, supply chain resilience and improving safety. In most cases, the technology to address the industry’s issues already exists, but the missing link is figuring out how to apply these solutions in the corporate context,” Hon said.

“That’s what Motion Ventures aims to address,” he added. “If we can bring a consortium of industry adopters together to connect with entrepreneurs early in the process, we’re setting everyone up with the best chance to succeed.”

In addition to capital, Motion Ventures plans to partner startups with well-established maritime firms like Wilhelmsen to help them commercialize and integrate their technology into supply chains. For mentorship, Motion Ventures’ startups will also have access to Ocean Ventures Alliance, which was launched by Rainmaking in November 2020, and now includes more than 40 maritime value chain industry leaders.

Daily Crunch: Facebook brings news sharing back to Australia

The Facebook-Australia news battle seems to have reached an end, Android gets an update and Lucid Motors is going public via SPAC. This is your Daily Crunch for February 23, 2021.

The big story: Facebook brings news sharing back to Australia

Last week, Facebook responded to the Australian government’s proposed law requiring internet platforms to strike revenue-sharing agreements with news publishers by blocking news sharing and viewing for users in the country. But with the government amending the law, Facebook said it will restore news sharing in the “coming days.”

Among other things, the amendments call for a two-month mediation period before Facebook is forced into arbitration with publishers, and it also says the government will consider commercial agreements that the platforms have made with local publishers before deciding whether the law applies to them.

William Easton, Facebook’s managing director for Australia and New Zealand, said in a statement that the amendments address “core concerns about allowing commercial deals that recognize the value our platform provides to publishers relative to the value we receive from them.”

The tech giants

Android’s latest update will let you schedule texts, secure your passwords and more — This update will integrate a feature called Password Checkup to alert you to passwords you’re using that have been previously exposed.

Twitter relaunches test that asks users to revise harmful replies — Twitter is running a new test that will ask users to pause and think before they tweet.

Area 120 is beginning to use Google’s massive reach to scale HTML5 GameSnacks platform — GameSnacks is an HTML5 gaming platform where titles are bite-sized and load much faster.

Startups, funding and venture capital

Lucid Motors strikes SPAC deal to go public with $24B valuation — This will be the largest deal yet between a blank-check company and an electric vehicle startup.

Shippo raises $45M more at $495M valuation as e-commerce booms — The startup provides shipping-related services to e-commerce companies.

Reddit ups Series E round by another $116M — Reddit had already announced a $250 million Series E earlier this month.

Advice and analysis from Extra Crunch

How to overcome the challenges of switching to usage-based pricing — The usage-based pricing model almost feels like a cheat code, according to OpenView’s Kyle Poyar.

Oscar Health’s initial IPO price is so high, it makes me want to swear — Alex Wilhelm doesn’t mince words: “Public investors have lost their damn minds.”

RIBS: The messaging framework for every company and product — The test is designed to tell you if your story is memorable, so you can turn it into a compelling message.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

Announcing the complete agenda for TC Sessions: Justice — Our second-ever dedicated event to diversity, equity, inclusion and labor in tech is coming up on March 3.

Six Miami-based investors share their views on the region’s startup scene — Investors see a huge opportunity for the region to become a major startup hub by utilizing its diverse workforce and wonderful quality of life.

SolarWinds hackers targeted NASA, Federal Aviation Administration networks — Hackers are said to have broken into the networks of U.S. space agency NASA and the Federal Aviation Administration as part of a wider espionage campaign.

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

Katana raises $11M Series A to be the SaaS powering ‘manufacturing entrepreneurs’

Katana, an Estonian startup that has built manufacturing-specific enterprise resource planning (ERP) software for SMBs, has raised $11 million in Series A funding.

Leading the round is European venture capital firm Atomico, with participation from angel investors Ott Kaukver (Checkout.com CTO), Sten Tamkivi (CPO Topia, formerly Skype), Sergei Anikin (CTO, Pipedrive) and Kairi Pauskar (former TransferWise HR Architect). Previous backer 42Cap also followed on, bringing the total investment raised by the company to date to $16 million.

Founded in 2017 by Kristjan Vilosius (CEO), Priit Kaasik (engineering lead) and Hannes Kert (CCO), Katana positions itself as the “entrepreneur manufacturer’s secret weapon” with a plug-and-play ERP for small to medium-sized manufacturers. The idea is to wean companies off existing antiquated tools such as spreadsheets and legacy software to manage inventory and production. The startup is also playing into macro trends, such as the advent of online marketplaces and D2C e-commerce, that are resulting in an explosion of independent makers, spanning cosmetics to home décor, electronics to apparel, and food and beverages.

“We are seeing a global renaissance of small manufacturing driven by the rise of e-commerce tools and consumer demand for bespoke products produced locally,” says Vilosius. “Just walk around any big city from London to San Francisco, and you’ll see workshops all around you. Someone’s making organic cosmetics here; over there, someone is making electric bikes. These companies are run by passionate entrepreneurs selling through traditional channels, but also selling through direct-to-consumer channels, e-commerce stores and marketplaces, etc. This is a massive boom of makers wanting to create products and sell them globally, and it is not a trend that will disappear tomorrow”.

The problem, however, is that small and medium-sized manufacturers don’t have the right software to support workflows necessary to sell through multiple channels — and this is where Katana comes in. The plug-and-play software claims a superior UX designed specifically to power boutique manufacturing, including functionality supporting the workflows of modern manufacturers, i.e. inventory control and optimization, and purchasing materials, managing bill-of-materials, tracking costs and more. It also offers an API and integrations with popular e-commerce sales channels and accounting tools such as Shopify, Amazon, WooCommerce, QuickBooks, Xero and others.

“We have built the world’s most self on-board-able manufacturing ERP, and that’s a very important differentiation between us and competitors,” explains Vilosius. “Implementation is so simple that more than half of Katana’s users self-onboard. It takes less than a week on average to get Katana up and running, compared to months for competitors”.

As an example of how a company might use Katana, imagine a boutique manufacturer using Shopify as their main sales channel. Once configured, Katana pulls in orders from Shopify and knows whether or not the product is available so it can be shipped immediately. If it’s unavailable, Katana displays if the necessary raw materials needed to manufacture are in stock and by when the product could be finished. “We handle the entire process from getting the raw materials in the warehouse to planning manufacturing activities, executing and shipping when the product is done,” says Vilosius.

Katana software screen shot

Image Credits: Katana

Cue statement from Atomico partner Ben Blume, who joins the Katana board: “Atomico has always believed in the strength of Estonian-built engineering and product, and as we got to know the team at Katana, we saw a familiar pattern: a relentlessly product-focussed team with the incredible ability to build and think from their customer’s point of view, and an unwavering belief that a new generation of manufacturers with big ideas shouldn’t have to settle for less than world-class technology to support them.”

Twitter explored buying India’s ShareChat and turning Moj into a global TikTok rival

Twitter recently held talks to acquire Indian social media startup ShareChat as the company explored ways to expand its presence in the world’s second largest internet market and build a global rival to TikTok, three sources familiar with the matter told TechCrunch.

The American firm, which is already an investor in Bangalore-based ShareChat, offered to buy the Indian startup for $1.1 billion and had committed an additional investment of $900 million, two of the sources said.

The talks are no longer ongoing, two sources said, requesting anonymity as the matter is private. TechCrunch could not determine why the talks did not materialize into a deal.

Two sources said Twitter had expressed intention to take Moj, a short-form video app that ShareChat owns, to international markets and position it as a rival to Chinese app TikTok.

Twitter declined to comment and ShareChat did not respond to a request for comment.

India’s ban on TikTok last year prompted scores of local startups and international giants to try their hands at short-form video format.

Moj, with over 80 million users already, has emerged as one of the largest players in the category. Earlier this month, Snap inked a deal with ShareChat to integrate its Camera Kit into the Indian short video app. This is the first time Snap had formed a partnership of this kind with a firm in India.

With the buyout offer no longer being entertained, ShareChat has resumed talks with other investors for its new financing round. These investors include Google, Snap, the sources said.

TechCrunch reported in January that the Indian startup was talking to Google and Snap as well as some existing investors including Twitter to raise over $200 million. A potential acquisition by Twitter prolonged the investment talks.

ShareChat, which claims to have over 160 million users, offers its social network app in 15 Indian languages and has a large following in small Indian cities and towns, or what venture capitalist Sajith Pai of Blume Ventures refer as “India 2.” Very few players in the Indian startup ecosystem have a reach to this segment of this population, which thanks to users from even smaller towns and villages — called “India 3” — getting online has expanded in recent years.

In an interview with TechCrunch last year, Ankush Sachdeva, co-founder and chief executive of ShareChat, said the startup’s marquee app was growing “exponentially” and that users were spending, on an average, more than 30 minutes a day on the service.

Twitter, itself, has struggled to make inroads outside of bigger cities and towns in India. Its app reached about 75 million users in the country in the month of January, according to mobile insight firm AppAnnie, data of which an industry executive shared with TechCrunch. It inked a deal with news and social app Dailyhunt to bring Moments — curated tweets pertaining to news and other local events — to the Google-backed Indian app.

The American social network has broadened its product offering in the past year amid pressure from activist investors to accelerate growth.