Tech Crunch

Huawei posts revenue growth in H1 despite sanctions and pandemic

Huawei reported a 13.1% year-over-year revenue growth in the first half of 2020, even if countries around the world continued to weigh up bans on its equipment and smartphone sales shrink amid the pandemic, the telecom giant said in a brief on Monday.

The firm’s revenue reached 454 billion yuan ($64.88 billion) in the period, with its carrier, enterprise, and consumer businesses accounting for 35%, 8% and 56% of total revenue, respectively. It finished with a net profit margin of 9.2%, a slight increase from 8.7% in the same period last year.

The privately-owned company did not specify what contributed to its H1 growth, but said in the release that amid the COVID-19 pandemic, “information and communications technologies” — the main focus of its business — “have become not only a crucial tool for combatting the virus, but also an engine for economic recovery.”

The growth came amid the U.S.’s ongoing campaign urging allies to remove Huawei from their network infrastructure. The U.K. is reportedly scheduled to phase out Huawei gear in its 5G network as soon as this year, a plan that critics warn could cause network outages and other security risks.

Though Huawei does not break down its regional sales, it’s reasonable to expect China to be its bedrock of growth as it stumbles abroad. The company and its local competitor ZTE — which is also on the U.S. trade blacklistdivide up the bulk of 5G base station contracts from China’s main carriers. The network operators have also agreed to procure 5G phones from Huawei, which would naturally give the company a boost in sales.

Microsoft spins out 5-year-old Chinese chatbot Xiaoice

Microsoft is shedding its empathetic chatbot Xiaoice into an independent entity, the U.S. software behemoth said (in Chinese) Monday, confirming an earlier report by the Chinese news site Chuhaipost in June.

The announcement came several months after Microsoft announced it would close down its voice assistant app Cortana in China among other countries late last year.

Xiaoice has over the years enlisted some of the best minds in artificial intelligence and ventured beyond China into countries like Japan and Indonesia. Microsoft said it called the shots to accelerate Xiaoice’s “localized innovation” and buildout of the chatbot’s “commercial ecosystem.”

The spinoff will see the new entity license technologies from Microsoft for subsequent research and development in Xiaoice and continue to use the Xiaoice brand (and Rinna in Japanese), while Microsoft will retain its stakes in the new company.

In 2014, a small team of Microsoft’s Bing researchers unveiled Xiaoice, which means “Little Bing” in Chinese. The bot immediately created a sensation in China and was regarded by many as their virtual girlfriend. The chatbot came just a few weeks after Microsoft rolled out Cortana in the country. Modeled on the personality of a teenage girl, Xiaoice aims to add a more human and social element to chatbots. In Microsoft’s own words, she wants to be a user’s friend.

Like all foreign companies, Microsoft has to grapple with China’s censorship. In 2017, Xiaoice was removed by Tencent’s instant messenger QQ over suspicions of politically sensitive speech.

The project has involved some of the most prestigious scientists in the AI land, ranging from Lu Qi, who went on to join Baidu as its chief operating officer and brought Y Combinator to China; Jing Kun, who took up a post at Baidu to head the search giant’s smart devices; and Harry Shum, a former executive at Microsoft’s storied Artificial Intelligence and Research unit and now sits on the board of fledgling news app News Break.

Shum will serve as chairman at Xiaoice’s new standalone entity. Li Di, general manager of Xiaoice, will serve as chief executive officer. Chen Zhan, a developer of the Japanese chatbot Rinna, is appointed general manager of the Japanese office.

The new company will retain the right to use the “Xiaoice” and “Rinna” brands, with a mission to further develop its client base across the Greater China region, Japan and Indonesia.

Microsoft claimed that Xiaoice has a reach of 660 million users and 450 million third-party smart devices globally at the last count. The chatbot has found applications in such areas as finance, retail, auto, real estate and fashion, in which it claimed it can “mine context, tonality and emotions from text to create unique patterns within seconds.”

Startups Weekly: The world is eating tech

Editor’s note: Get this free weekly recap of TechCrunch news that any startup can use by email every Saturday morning (7am PT). Subscribe here.

You could almost hear the internet cracking apart this week as international businesses pulled away from Hong Kong and the US considered a ban on TikTok. Software can no longer eat the entire world like it had attempted last decade. Startups across tech-focused industries face a new reality, where local markets and efforts are more protected and supported by national governments. Every company now has a smaller total addressable market, whether or not it succeeds in it.

Facebook, for example, appears to be getting an influx of creators who are worried about losing TikTok audiences, as Connie Loizos investigated this week. This might mean more users, engagement and ultimately revenue for many consumer startups, and any other companies that rely on paid marketing through Facebook’s valuable channels. But it means fewer platforms to diversify to, in case you don’t want to rely on Facebook so much for your business.

As trade wars look more and more like cold wars, it also means that Facebook itself will have a more limited audience than it once hoped to offer its own advertisers. After deciding to reject requests from Hong Kong-based Chinese law enforcement, it seems to be on the path to getting blocked in Hong Kong like it is on the mainland. But as with other tech companies, it doesn’t really have a choice — the Chinese government has pushed through legal changes in the city that allow it to arrest anyone in the world if it claims they are organizing against it. Compliance with China would bring on government intervention in the US and beyond, among other reasons why doing so is a non-starter. 

This also explains why TikTok itself already pulled out of Hong Kong, despite being owned by mainland China-based Bytedance. The company is still reeling from getting banned in India last week and this maneuver is trying to the subsidiary look more independent. Given that China’s own laws allow its government to access and control private companies, expect many to find that an empty gesture.

Startups should plan for things to get harder in general. See: the next item below.

(Photo by Alex Wong/Getty Images)

Student visas have become the next Trump immigration target

International students will not be allowed to stay enrolled at US universities that offer only remote classes this coming academic year, the Trump administration decided this past week. As Natasha Mascarenhas and Zack Whittaker explore, many universities are attempting a hybrid approach that tries to allow some in-person teaching without creating a community health problem.

Without this type of approach, many students could lose their visas. Here’s our resident immigration law expert, Sophie Alcorn, with more details on Extra Crunch:

International students have been allowed to take online classes during the spring and summer due to the COVID-19 crisis, but that will end this fall. The new order will force many international students at schools that are only offering remote online classes to find an “immigration plan B” or depart the U.S. before the fall term to avoid being deported.

At many top universities, international students make up more than 20% of the student body. According to NAFSA, international students contributed $41 billion to the U.S. economy and supported or created 458,000 jobs during the 2018-2019 academic year. Apparently, the current administration is continuing to “throw out the baby with the bathwater” when it comes to immigration.

Universities are scrambling as they struggle with this newfound untenable bind. Do they stay online only to keep their students safe and force their international students to leave their homes in this country? Or do they reopen to save their students from deportation, but put their communities’ health at risk?

For students, it means finding another school, scrambling to figure out a way to depart the States (when some home countries will not even allow them to return), or figuring out an “immigration plan B.”

Who knows how many startups will never exist because the right people didn’t happen to be at the right place at the right time together? What everyone does know is that remote-first is here to stay.

No Code goes global

A few tech trends seem unstoppable despite any geopolitics, and one seems to be the universal human goal of making enterprise software suck less. (Okay, nearly universal.) Alex Nichols and Jesse Wedler of CapitalG explain why now is the time for no code software and what the impact will bel, in a very popular article for Extra Crunch this week. Here’s their setup:

First, siloed cloud apps are sprawling out of control. As workflows span an increasing number of tools, they are arguably getting more manual. Business users have been forced to map workflows to the constraints of their software, but it should be the other way around. They need a way to combat this fragmentation with the power to build integrations, automations and applications that naturally align with their optimal workflows.

Second, architecturally, the ubiquity of cloud and APIs enable “modular” software that can be created, connected and deployed quickly at little cost composed of building blocks for specific functions (such as Stripe for payments or Plaid for data connectivity). Both third-party API services and legacy systems leveraging API gateways are dramatically simplifying connectivity. As a result, it’s easier than ever to build complex applications using pre-assembled building blocks. For example, a simple loan approval process could be built in minutes using third-party optical character recognition (a technology to convert images into structured data), connecting to credit bureaus and integrating with internal services all via APIs. This modularity of best-of-breed tools is a game changer for software productivity and a key enabler for no code.

Finally, business leaders are pushing CIOs to evolve their approach to software development to facilitate digital transformation. In prior generations, many CIOs believed that their businesses needed to develop and own the source code for all critical applications. Today, with IT teams severely understaffed and unable to keep up with business needs, CIOs are forced to find alternatives. Driven by the urgent business need and assuaged by the security and reliability of modern cloud architecture, more CIOs have begun considering no code alternatives, which allow source code to be built and hosted in proprietary platforms.

Photo: Jason Alden/Bloomberg

Palantir has finally filed to go public

It’s 16 years old, worth $26 billion and widely used by private and public entities of all types around the world, but this employer of thousands is counted as a startup tech unicorn, because, well, it was one of the pioneers of growing big, raising bigger, and staying private longer. Aileen Lee even mentioned Palantir as one of the 39 examples that helped inspire the “unicorn” term back in 2013. Now the secretive and sometimes controversial data technology provider is finally going to have its big liquidity event — and is filing confidentially to IPO, which means the finances are still staying pretty secret.

Alex Wilhelm went ahead and pieced together its funding history for Extra Crunch ahead of the action, and concluded that “Palantir seems like the Platonic ideal of a unicorn. It’s older than you’d think, has a history of being hyped, its valuation has stretched far beyond the point where companies used to go public, and it appears to be only recently growing into its valuation.”

It also appears to be one of the unicorns that has seen a lot of upside lately. It has been in the headlines recently for cutting big-data deals with governments for pandemic work, on top of a long-standing relationship with the US military and other arms of the government. As with Lemonade, Accolade and a range of other IPOing tech companies that we have covered in recent weeks, it is presumably in a positive business cycle and primed to take advantage of an already receptive market.

(Photo by Kimberly White/Getty Images for TechCrunch)

Meaningful change from BLM

In an investor survey for Extra Crunch this week, Megan Rose Dickey checked in with eight Black investors about what they are investing in, in the middle of what feels like a new focus on making the tech industry more representative of the country and the world. Here’s how Arlan Hamilton of Backstage Capital responded when Megan asked what meaningful change might come from the recent heightened attention on the Black Lives Matter movement.

I happen to be on the more optimistic side of things. I’m not at a hundred percent optimistic, but I’m close to that. I think that there’s an undeniable unflinching resolve right now. I think that if we were to go back to status quo, I would be incredibly surprised. I guess I would not be shocked, unfortunately, but I would be surprised. It would give me pause about the effectiveness of any of the work that we do if this moment fizzles out and doesn’t create change. I do think that there is going to be a shift. I can already feel it. I know that more people who are representative of this country are going to be writing checks, whether through being hired, or taken through the ranks, or starting their own funds, and our own funds. I think there’s more and more capital that’s going to flow to underrepresented founders. That alone, I think, will be a huge shift.

Around TechCrunch

Extra Crunch support expands into Argentina, Brazil and Mexico

Five reasons to attend TC Early Stage online

Hear from James Alonso and Adam Zagaris how to draw up your first contracts at Early Stage

Hear how to manage your enterprise infrastructure from Sam Pullara at TechCrunch Early Stage

Kerry Washington is coming to Disrupt 2020

Amazon’s Alexa heads Toni Reid and Rohit Prasad are coming to Disrupt

Ade Ajao, Maryanna Saenko, Charles Hudson, Ulili Onovakpuri and Melissa Bradley are coming to Disrupt

Minted’s Mariam Naficy will join us at TechCrunch Early Stage

Across the week

TechCrunch

14 VCs discuss COVID-19 and London’s future as a tech hub

Societal upheaval during the COVID-19 pandemic underscores need for new AI data regulations

PC shipments rebound slightly following COVID-19-fueled decline

Here’s a list of tech companies that the SBA says took PPP money

Equity Monday: Uber-Postmates is announced, three funding rounds and narrative construction

Regulatory roadblocks are holding back Colombia’s tech and transportation industries

Extra Crunch

In pandemic era, entrepreneurs turn to SPACs, crowdfunding and direct listings

Four views: Is edtech changing how we learn?

VCs are cutting checks remotely, but deal volume could be slowing

GGV’s Jeff Richards: ‘There is a level of resiliency in Silicon Valley that we did not have 10 years ago’

Logistics are key as NYC startup prepares to reopen office

#EquityPod

From Alex:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

We wound up having more to talk about than we had time for but we packed as much as we could into 34 minutes. So, climb aboard with DannyNatasha and myself for another episode of Equity.

Before we get into topics, a reminder that if you are signing up for Extra Crunch and want to save some money, the code “equity” is your friend. Alright, let’s get into it:

Whew! Past all that we had some fun, and, hopefully, were of some use. Hugs and chat Monday!

Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

CBP says it’s ‘unrealistic’ for Americans to avoid its license plate surveillance

U.S. Customs and Border Protection has admitted that there is no practical way for Americans to avoid having their movements tracked by its license plate readers, according to its latest privacy assessment.

CBP published its new assessment — three years after its first — to notify the public that it plans to tap into a commercial database, which aggregates license plate data from both private and public sources, as part of its border enforcement efforts.

The U.S. has a massive network of license plate readers, typically found on the roadside, to collect and record the license plates of vehicles passing by. License plate readers can capture thousands of license plates each minute. License plates are recorded and stored in massive databases, giving police and law enforcement agencies the ability to track millions of vehicles across the country.

The agency updated its privacy assessment in part because Americans “may not be aware” that the agency can collect their license plate data.

“CBP cannot provide timely notice of license plate reads obtained from various sources outside of its control,” the privacy assessment said. “Many areas of both public and private property have signage that alerts individuals that the area is under surveillance; however, this signage does not consistently include a description of how and with whom such data may be shared.”

But buried in the document, the agency admitted: “The only way to opt out of such surveillance is to avoid the impacted area, which may pose significant hardships and be generally unrealistic.”

CBP struck a similar tone in 2017 during a trial that scanned the faces of American travelers as they departed the U.S., a move that drew ire from civil liberties advocates at the time. CBP told Americans that travelers who wanted to opt-out of the face scanning had to “refrain from traveling.”

The document added that the privacy risk to Americans is “enhanced” because the agency “may access [license plate data] captured anywhere in the United States,” including outside of the 100-mile border zone within which the CBP typically operates.

CBP said that it will reduce the risk by only accessing license plate data when there is “circumstantial or supporting evidence” to further an investigation, and will only let CBP agents access data within a five-year period from the date of the search.

A spokesperson for CBP did not respond to a request for comment on the latest assessment.

CBP doesn’t have the best track record with license plate data. Last year, CBP confirmed that a subcontractor, Perceptics, improperly copied license plate data on “fewer than 100,000” people over a period of a month-and-a-half at a U.S. port of entry on the southern border. The agency later suspended its contract with Perceptics.

U.S. government may finalize ban on federal contractors using equipment from Huawei this week

The Trump administration is set to finalize regulations this week that ban the United States government from working with contractors who use technology from five Chinese companies: Huawei, ZTE, Hikvision, Dahua and Hytera Communications, according to a Reuters report.

The ban was first introduced as a provision in the 2019 National Defense Authorization Act that prevents government agencies from signing contracts with companies that use equipment, services and systems from Huawei, ZTE, Hytera, Hikvision and Dahua, or any of their subsidiaries and affiliates, citing national security concerns.

Contractors were given until August 13, 2020 to comply, but immediately began voicing concerns over the ambiguity of the law.

More recently, the National Defense Industrial Association, a trade group, asked the government to extend the deadline because it said many contractors are currently dealing with the economic impact of the COVID-19 pandemic, reported Defense News.

Another challenge for federal contractors is that the companies on the blacklist are global market leaders in their respective categories, making it harder to find alternatives. For example, Huawei and ZTE are two of the largest telecom equipment providers in the world; Dahua and Hikvision are two of the biggest providers of surveillance equipment and cameras; and Hytera is a market leader for two-way radios.

The ban is one of many entanglements Huawei has had with the U.S. government since it was first identified as a national security threat, along with ZTE, in a 2012 Congressional report.

In May 2019, Huawei filed a legal motion against the provision in the National Defense Authorization Act, with the company’s chief legal officer stating that “politicians in the U.S. are using the strength of an entire nation to come after a private company.”

The United States, however, is not the only country with national security concerns about Huawei. On Thursday, for example, Reuters reported that Telecom Italia (TIM) decided to exclude Huawei from its tender for 5G equipment in Italy and Brazil, as the Italian government deliberates whether to bar Huawei’s tech from the country’s 5G network. Huawei told Reuters that “the security and development of digital Italy should be based on an approach grounded in facts and not baseless allegations.”

The United Kingdom is also reportedly considering a similar ban on Huawei in its 5G network.

Google reportedly cancelled a cloud project meant for countries including China

After reportedly spending a year and a half working on a cloud service meant for China and other countries, Google cancelled the project, called “Isolated Region,” in May due partly to geopolitical and pandemic-related concerns. Bloomberg reports that Isolated Region, shut down in May, would have enabled it to offer cloud services in countries that want to keep and control data within their borders.

According to two Google employees who spoke to Bloomberg, the project was part of a larger initiative called “Sharded Google” to create data and processing infrastructure that is completely separate from the rest of the company’s network. Isolated Region began in early 2018 in response to Chinese regulations that mean foreign tech companies that want to enter the country need to form a joint venture with a local company that would hold control over user data. Isolated Region was meant to help meet requirements like this in China and other countries, while also addressing U.S. national security concerns.

Bloomberg’s sources said the project was paused in China in January 2019, and focus was redirected to Europe, the Middle East and Africa instead, before Isolated Region was ultimately cancelled in May, though Google has since considered offering a smaller version of Google Cloud Platform in China.

After the story was first published, a Google representative told Bloomberg that Isolated Region wasn’t shut down because of geopolitical issues or the pandemic, and that the company “does not offer and has not offered cloud platform services inside China.”

Instead, she said Isolated Region was cancelled because “other approaches we were actively pursuing offered better outcomes. We have a comprehensive approach to addressing these requirements that covers the governance of data, operational practices and survivability of software. Isolated Region was just one of the paths we explored to address these requirements.”

Alphabet, Google’s parent company, broke out Google Cloud as its own line item for the first time in its fourth-quarter and full-year earnings report, released in February. It revealed that its run rate grew 53.6% during the last year to just over $10 billion in 2019, making it a more formidable rival to competitors Amazon and Microsoft.

Too little, too late: Facebook’s Oversight Board won’t launch until ‘late fall’

Facebook has announced that the limp “Oversight Board” intended to help make difficult content and policy decisions will not launch until “late fall,” which is to say, almost certainly after the election. You know, the election everyone is worried Facebook’s inability to police itself will serious affect.

On Twitter, the board explained that as much as it would like to “officially begin our task of providing independent oversight of Facebook’s content decisions,” it regrets that it will be unable to do so for some time. “Our focus is on building a strong institution that will deliver concrete results over the long term.”

That sounds well enough, but for many, the entire point of creating the oversight board — which has been in the offing since late 2018 — was to equip Facebook for the coming Presidential election, which promises to be something of a hot one.

As my colleague Natasha Lomas described the board when it was officially announced:

The Oversight Board is intended to sit atop the daily grind of Facebook content moderation, which takes place behind closed doors and signed NDAs, where outsourced armies of contractors are paid to eyeball the running sewer of hate, abuse and violence so actual users don’t have to, as a more visible mechanism for resolving and thus (Facebook hopes) quelling speech-related disputes.

But as we soon found out, the board would have nothing to do with what many would call the most dangerous content on Facebook: fast-spreading misinformation. The board will for now primarily concern itself with disputed takedowns of content, not simply disputed content. On many matters its decisions will be merely advisory.

Facebook has taken a relatively laissez-faire attitude towards manipulated media, deliberate misinformation, misleading political ads and other troubling content, and executives including Mark Zuckerberg have regularly reinforced that attitude.

An attempt to hit the company in its wallet has proven unexpectedly successful, with many large companies pledging to at least temporarily advertising from Facebook to protest these policies. Coca-Cola, Ford, REI, and even TechCrunch’s parent company Verizon have signed on to #StopHateforProfit. Facebook met with representatives of the effort today and the latter were, predictably, disappointed.

“Today we saw little and heard just about nothing,” said Anti-Defamation League’s CEO Jonathan Greenblatt said. It seems that Facebook does not consider the present pecuniary punishment heavy enough to warrant a serious response.

The delay of the Oversight Board, even the defanged one being promised, is just one more straw on the camel’s back.

Secretive data startup Palantir has confidentially filed for an IPO

Secretive big data and analytics startup Palantir, co-founded by Peter Thiel, said late Monday it has confidentially filed paperwork with the U.S. Securities and Exchange Commission to go public.

Its statement said little more. “The public listing is expected to take place after the SEC completes its review process, subject to market and other conditions.”

Palantir did not say when it plans to go public nor did it provide other information such as how many shares it would potentially sell or the share price range for the IPO . Confidential IPO filings allow companies to bypass the traditional IPO filing mechanisms that give insights into their inner workings such as financial figures and potential risks. Instead, Palantir can explore the early stages of setting itself up for a public listing without the public scrutiny that comes with the process. The strategy has been used by companies such as Spotify, Slack and Uber. However, a confidential filing doesn’t always translate to an IPO.

A Palantir spokesperson, when reached, declined to comment further.

Palantir is one of the more secretive firms in Silicon Valley, a provider of big data and analytics technologies, including to the U.S. government and intelligence community. Much of that work has drawn controversies from privacy and civil liberties activists. For example, investigations show that the company’s data mining software was used to create profiles of immigrants and consequently aid deportation efforts by the ICE.

As the coronavirus pandemic spread throughout the world, Palantir pitched its technology to bring big data to tracking efforts.

Last week, Palantir filed its first Form D in four years indicating that it is raising $961 million. According to the filing, $550 million has already been raised and capital commitments for the remaining allotment have been secured.

With today’s news, the cash raise looks complementary to the company’s ambitions to go public. One report estimates that the company’s valuation hovers at $26 billion.

Palantir’s filing is another example of how the IPO market is heating up yet again, despite the freeze COVID-19 put on so many companies. Last week, insurance provider Lemonade debuted on the public market to warm waters. Accolade, a healthcare benefits company, similarly is sold more shares than expected.

Rocket Lab launch fails during rocket’s second stage burn, causing a loss of vehicle and payloads

Rocket Lab’s ‘Pic or it didn’t happen’ launch on Saturday ended in failure, with a total loss of the Electron launch vehicle and all seven payloads on board. The launch vehicle experienced a failure during the second stage burn post-launch, after a lift-off from the Rocket Lab Launch Complex 1 on Mahia Peninsula in New Zealand.

The mission appeared to be progressing as intended, but the launch vehicle appeared to experience unexpected stress during the ‘Max Q’ phase of launch, or the period during which the Electron rocket experiences the most significant atmospheric pressure prior to entering space.

Launch video cut off around six minutes after liftoff during the live stream, and rocket was subsequently shown to be falling from its current altitude before the web stream was cut short. Rocket Lab then revealed via Twitter that the Electron vehicle was lost during the second stage burn, and committed to sharing more information when it becomes available.

This is an unexpected development for Rocket Lab, which has flown 11 uneventful consecutive Electron missions since the beginning of its program.

Rocket Lab CEO and founder Peter Beck posted an apology to Twitter, noting that all satellites were lost, and that he’s “incredibly sorry” to all customer who suffered loss of payload today. That includes Canon, which was flying a new Earth imaging satellite with demonstration imaging tech on board, as well as Planet, which had five satellites for its newest and most advanced Earth imaging constellation on the vehicle.

We’ll update with more info about the cause and next steps from Rocket Lab when available.

Tesla is taking reservations for its Cybertruck in China

Tesla has opened up reservations for its all-electric Cybertruck to customers in China, a move that will test the market’s appetite for a massive, futuristic truck.

The reservations page on Tesla’s China website was first posted in Reddit channel r/teslamotors by user u/aaronhry. Electrek also reported on the Reddit post.

The Cybertruck, which was unveiled in November at the Tesla Design Center in Hawthorne, Calif., isn’t expected to go into production until late 2022. But that hasn’t stopped thousands of U.S. consumers to plunk down a $100 refundable deposit for the truck. Just weeks after the official unveiling, Tesla CEO Elon Musk tweeted that there were 250,000 reservations for the vehicle.

Tesla is now testing potential interest among Chinese consumers.

It’s impossible to predict how many of these reservations — in China and the U.S. — will convert to actual sales. It will be more than a year before there are any answers. Tesla hasn’t even finalized its decision of where it will build the vehicle.

Musk tweeted in March that Tesla was scouting locations for a factory that would be used to produce Model Y crossovers for the East Coast market as well as the Cybertruck.  At the time, Musk said that the factory would be located in the central part of the United States.

Initially, Tesla was eyeing Nashville and had been in talks with officials there. The company has since turned its attention to Austin and Tulsa. Talks in Austin have progressed rapidly and it appears likely that the factory will end up in a location just outside of the city. Although Tulsa officials have been quick to note that talks with Tesla have continued there as well.

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

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

Intel to invest $253.5 million in India’s Reliance Jio Platforms

Intel said on Friday it will invest $253.5 million in Jio Platforms, joining a roster of high-profile investors including Facebook, General Atlantic, and Silver Lake that have backed India’s top telecom operator in recent months.

The American chipmaker’s investment arm said it is acquiring a 0.39% stake in Jio Platforms, giving the Indian firm a valuation of $65 billion. Intel Capital is the 12th investor to buy a stake in Jio Platforms, which has raised more than $15.5 billion by selling a 25% stake since April this year.

“Jio Platforms’ focus on applying its impressive engineering capabilities to bring the power of low-cost digital services to India aligns with Intel’s purpose of delivering breakthrough technology that enriches lives. We believe digital access and data can transform business and society for the better,” said Wendell Brooks, Intel Capital President, in a statement.

The announcement today comes weeks after Mukesh Ambani, who controls Reliance Industries — the parent firm of Jio Platforms — suggested that Saudi Arabia’s PIF $1.5 billion investment on June 18 in his digital unit had marked the “end of Jio Platforms’ current phase of induction of financial partners.”

Ambani, who is India’s richest man, said on Friday that he was excited to “work together with Intel to advance India’s capabilities in cutting-edge technologies that will empower all sectors of our economy and improve the quality of life of 1.3 billion Indians.”

The new deal further illustrates the opportunities foreign investors see in Jio, a four-year-old subsidiary of Reliance Industries (India’s most valuable firm) that has upended the telecommunications market in India with cut-rate voice calls and mobile data tariffs. Jio has about 400 million subscribers.

Analysts at Bernstein said last month that they expect Jio Platforms to reach 500 million customers by 2023, and control half of the market by 2025. Jio Platforms competes with Bharti Airtel and Vodafone Idea, a joint venture between British giant Vodafone and Indian tycoon Kumar Mangalam Birla’s Aditya Birla Group.

Jio Platforms also operates a bevy of digital apps and services, including music streaming service JioSaavn (which it says it will take public), on-demand live television service JioTV and payments app JioMoney, as well as smartphones and broadband business. These services are available to Jio subscribers at no additional charge.

On Thursday evening, Jio Platforms launched JioMeet, a video-conferencing service that offers unlimited calls with “up to 24 hours” time limit on each session. The service, which currently has no paid plans, looks uncannily like Zoom.

Good artists borrow, great artists steal 😂pic.twitter.com/r7KpIfwIFC

— Avinash Raghava (@avinashraghava) July 3, 2020

Last month, Ambani said the funds in Jio Platforms had helped him clear oil-to-retail giant Reliance Industries’ net debt of about $21 billion. Ambani had originally pledged to clear Reliance’s debt due by early 2021.

Cendana Capital, which has been backing seed funds for a decade, has $278 million more to invest

When in 2010, former VC Michael Kim set out to raise a fund that he would invest in a spate of micro VC managers, the investors to which he turned didn’t get it. Why pay Kim and his firm, Cendana Capital,  a management fee on top of the management fees that the VC managers themselves charge?

Fast forward to today, and Kim has apparently proven to his backers that he’s worth the extra cost. Three years after raising $260 million across a handful of vehicles whose capital he plugged into up-and-coming venture firms, Kim is now revealing a fresh $278 million in capital commitments, including $218 million for Cendana’s fourth flagship fund, and $60 million that it will be managing expressly for the University of Texas endowment.

We talked with Kim last week about how he plans to invest the money, which differs slightly from how he has invested in the past.

Rather than stick solely with U.S.-based seed-stage managers who are raising vehicles of $100 million or less, he will split Cendana into three focus areas. One of these will remain seed-stage managers. A smaller area of focus — but one of growing importance, he said — is pre-seed managers who are managing $50 million or less and mostly funding ideas (and getting roughly 15% of each startup in exchange for the risk).

A third area of growing interest is in international managers in cities where seed-stage startups can now reliably find follow-on financial support. In fact, Kim says Cendana has already backed small venture firms in Australia (Blackbird Ventures), China (Cherubic Ventures, which is a cross-border investor that is also focused on the U.S.), Israel (Entree Capital), and India (Saama Capital), among other spots.

Altogether, Cendana is now managing around $1.2 billion. For its services, it charges its backers a 1% management fee and 10% of its profits atop the 2.5% management fee and 20% “carried interest” that his fund managers collect.

“To be extremely clear about it and transparent,” said Kim, “that’s a stacked fee that’s on top of what our [VC] fund managers charge. So Cendana LPs are paying 3.5% and 30%.” An observer “might think that seems pretty egregious,” he continued. “But a number of our LPs are either not staffed to go address this market or are too large to actually write smaller checks to these seed funds. And we provide a pretty interesting value proposition to them.”

That’s particularly true, Kim argues, when contrasting Cendana with other, bigger fund managers.

“A lot of these well-known fund of funds are asset gatherers,” he says. “They’re not charging carried interest. They’re in it for the management fee. They have shiny offices around the world. They have hundreds of people working at them. They’re raising billion-dollar-plus kind of funds. And they’re putting 30 to 50 names into each one, so in a way they become index funds.” The problem, says Kim: “I don’t think venture is really an asset class. Unlike an ETF that’s focused on the S&P 500, venture capital is where a handful of fund managers capture most of the alpha. Our differentiation is that we’re creating very concentrated portfolios.”

How concentrated? Cendana typically holds anchor positions in up to 12 funds, plus makes $1 million bets on another handful of more nascent managers that it will fund further if they prove out their theses.

Some of the managers that Cendana has backed have outgrown the outfit from an assets standpoint. Cendana caps its investments in funds that are $100 million or less in size. Over time, however, it has backed 22 seed-stage managers, including 11.2 Capital, Accelerator Ventures, Angular Ventures, Bowery Capital, Collaborative Fund, Forerunner Ventures, Founder Collective, Freestyle Capital, IA Ventures, L2 Ventures, Lerer Hippeau, MHS Capital, Montage Ventures, Moxxie Ventures, Neo, NextView Ventures, Silicon Valley Data Capital, Spider Capital, Susa Ventures, Uncork VC (when it was still SoftTech VC), Wave Capital and XYZ Ventures.

As for its pre-seed fund managers, Cendana has been the anchor investor in roughly 10 outfits, including Better Tomorrow Ventures, Bolt VC, Engineering Capital, K9 Ventures, Mucker Capital, Notation Capital, PivotNorth Capital, Rhapsody Venture Partners, Root Ventures, and Wonder Ventures.

For those curious about its returns, Kim says that Cendana’s very first fund, a $28.5 million vehicle, is “marked at north of 3x” and “that’s net of everything.”

He’s optimistic that the firm’s numbers will look even better over time.

According to Kim, Cendana currently has 38 so-called unicorns in its broader portfolio. It separately hold stakes in 160 companies that are valued at more than $100 million.

Strap in — a virtual Tour de France kicks off this weekend on the online racing platform Zwift

The pandemic has wreaked havoc on all manner of professional sports this year, and cycling has not been immune. For example, the best-known race on the planet, the Tour de France, normally staged in July, has had to be pushed back to August 29 through September 20.

That doesn’t mean that the world — and professional cyclists — can’t enjoy world-class racing this summer. In fact, beginning this coming weekend, 23 top men’s teams and 17 women’s teams will participate in a virtual version of the event that’s being hosted by six-year-old Zwift, after it was chosen by the official race organizer of the real tour, Amaury Sport Organization (ASO), as its partner on the event.

It’s a coup for the Long Beach, Calif., company whose multiplayer video game technology is used by both amateur and pro cyclists and that, according to Outside magazine, is now the biggest player in the growing online racing world.

Investors have noticed, funding the company to the tune of $170 million so far, says cofounder and CEO Eric Min.

This Tour has the potential to drive many more users its way, too.

For one thing, the virtual version of the event, which will feature six stages that last roughly hour over the next three weekends beginning this Saturday — it gets underway with the first women’s stage, followed immediately by the men — will be broadcast in more than 130 countries. (In the U.S., it will be broadcast on NBC Sports.) It’s hard to imagine another way for a company like Zwift to get so much exposure as quickly.

The race is also open to any cyclists on its platform who want to race on the same roads as the professionals, meaning anyone who wants to “compete” in this virtual tour needs to sign up for an account, though it’s worth noting a few things.

First, mere mortals won’t be racing at the same time as the cyclists in the Tour but during mass participation events during the week that will ostensibly provide them the chance to experience exactly what the pros went through and to compare their power, heart rate, cadence and other data to their pro rider heroes.

Also, Zwift is a subscription service. Users can check out the platform for a free, seven-day trial, but after that, Zwift charges $15 per month. Riders also need a smart trainer, which costs around $300. Zwift doesn’t make its own trainers — yet — but its software works with the hardware of a dozen or so companies.

Unsurprisingly, Min sounded both excited and terrified when we caught up with him last week to talk about the race, whose first two stages will be held in Zwift’s existing game world, Watopia, with the other stages orchestrated in virtual versions of real courses from the race.

Though Zwift has staged virtual races before —  including the Giro d’Italia, which is basically the Tour de France for Italy, and the Vuelta a Espana, an annual multi-stage race in Spain — it “doesn’t get any bigger than this,” said Min, who told us the idea was hatched six weeks ago with ASO and that Zwift has been working furiously to prepare for the race ever since.

It could prove a turning point for the outfit. It already has nearly two million accounts, and while subscribers ebb and flow, depending on the time of year, the virtual Tour is an opportunity for some of those riders to “reengage,” Min says, adding that Zwift has been growing 50 percent year over year, and has unsurprisingly seen pick-up accelerate throughout the pandemic.

Zwift doesn’t just cater to competitive athletes, Min stresses, saying that more than half the company’s customers are overweight and that, unlike Peleton, its customers are drawn less to particular instructors and more to the idea of being part of a club where they can train, take part in events, and compete with one another another, either in a public way or by via private rides wherein users share maps with friends, for example.

Either way, both amateur rider and professional racers will undoubtedly have high expectations of the Tour itself, even while it comes with more inherent challenges, including less time to break away from fellow riders than in the real-world tour, where each stage can take five or six hours.

Min thinks Zwift is ready. On our call, he discussed how Zwift convincingly creates drag, for example, walking through the software’s calculations, including a rider’s weight and body mass and the terrain they’re on and whether a rider is receiving draft from riders in front. Apply resistance to the machine  or easing it is what gives riders a sense of motion and inertia. “It’s not exactly like outdoor riding,” said Min, but combined with the software’s visual tools, meant to fool the mind, “it gets pretty darn close.

And that software, including the Tour maps, is now largely done, Min said. Now, Zwift just needs to ensure that its broadcast tools work as well as possible, among other last-minute priorities.

“We’ll do some dry runs [this] week. Then it’s showtime,” he said, before adding: “The stakes are pretty high. It has to be rock solid.”

Indian startups diversify their businesses to offset COVID-19 induced losses

E-commerce giant Flipkart is planning to launch a hyperlocal service that would enable customers to buy items from local stores and have those delivered to them in an hour and a half or less. Yatra, an online travel and hotel ticketing service, is exploring a new business line altogether: Supplying office accessories.

Flipkart and Yatra are not the only firms eyeing new business categories. Dozens of firms in the country have branched out by launching new services in recent weeks, in part to offset the disruption the COVID-19 epidemic has caused to their core offerings.

Swiggy and Zomato, the nation’s largest food delivery startups, began delivering alcohol in select parts of the country last month. The move came weeks after the two firms, both of which are seeing fewer orders and had to let go hundreds of employees, started accepting orders for grocery items in a move that challenged existing online market leaders BigBasket and Grofers.

Udaan, a business-to-business marketplace, recently started to accept bulk orders from some housing societies and is exploring more opportunities in the business-to-commerce space, the startup told TechCrunch.

These shifts came shortly after New Delhi announced a nationwide lockdown to contain the spread of the coronavirus. The lockdown meant that all public places including movie theaters, shopping malls, schools, and public transport were suspended.

Instead of temporarily halting their businesses altogether, as many have done in other markets, scores of startups in India have explored ways to make the most out of the current unfortunate spell.

“This pandemic has given an opportunity to the Indian tech startup ecosystem to have a harder look at the unit-economics of their businesses and become more capital efficient in the shorter and longer-term,” Puneet Kumar, a growth investor in Indian startup ecosystem, told TechCrunch in an interview.

Of the few things most Indian state governments have agreed should remain open include grocery shops, and online delivery services for grocery and food.

People buy groceries at a supermarket during the first day of the 21-day government-imposed nationwide lockdown as a preventive measure against the spread of the COVID-19 coronavirus, in Bangalore on March 25, 2020. (Photo by MANJUNATH KIRAN/AFP via Getty Images)

E-commerce firms Snapdeal and DealShare began grocery delivery service in late March. The move was soon followed by social-commerce startup Meesho, fitness startup Curefit, and BharatPe, which is best known for facilitating mobile payments between merchants and users.

Meesho’s attempt is still in the pilot stage, said Vidit Aatrey, the Facebook-backed startup’s co-founder and chief executive. “We started grocery during the lockdown to give some income opportunities to our sellers and so far it has shown good response. So we are continuing the pilot even after lockdown has lifted,” he said.

ClubFactory, best known for selling low-cost beauty items, has also started to deliver grocery products, and so has NoBroker, a Bangalore-based startup that connects apartment seekers with property owners. And MakeMyTrip, a giant that provides solutions to book flight and hotel tickets, has entered the food delivery market.

Another such giant, BookMyShow, which sells movie tickets, has in recent weeks rushed to support online events, helping comedians and other artists sell tickets online. The Mumbai-headquartered firm plans to make further inroads around this business idea in the coming days.

For some startups, the pandemic has resulted in accelerating the launch of their product cycles. CRED, a Bangalore-based startup that is attempting to help Indians improve their financial behavior by paying their credit card bill on time, launched an instant credit line and apartment rental services.

Kunal Shah, the founder and chief executive of CRED, said the startup “fast-tracked the launch” of these two products as they could prove immensely useful in the current environment.

For a handful of startups, the pandemic has meant accelerated growth. Unacademy, a Facebook-backed online learning startup, has seen its user base and subscribers count surge in recent months and told TechCrunch that it is in the process of more than doubling the number of exam preparation courses it offers on its platform in the next two months.

Since March, the number of users who access the online learning service each day has surged to 700,000. “We have also seen a 200% increase in viewers per week for the free live classes offered on the platform. Additionally there has been a 50% increase in paid subscribers and over 50% increase in average watchtime per day among our subscribers,” a spokesperson said.

As with online learning firms, firms operating on-demand video streaming services have also seen a significant rise in the number of users they serve. Zee5, which has amassed over 80 million users, told TechCrunch last week that in a month it will introduce a new category in its app that would curate short-form videos produced and submitted by users. The firm said the feature would look very similar to TikTok.

The pandemic “has also accelerated the adoption of online services in India across all demographics. Many who would not have considered buying goods and services online are starting to adopt the online platforms for basic necessities at a faster pace,” said venture capitalist Kumar.

“As far as expansion into adjacent categories is concerned, some of this was a natural progression and startups were slowly moving in that direction anyway. The pandemic has forced people to get there faster.”

Roosh, a Mumbai-based game developing firm founded by several industry veterans, launched a new app ahead of schedule that allows social influencers to promote games on platforms such as Instagram and TikTok, Deepak Ail, co-founder and chief executive of Roosh, told TechCrunch.

ShareChat, a Twitter-backed social network, recently acquired a startup called Elanic to explore opportunities in social-commerce. OkCredit, a bookkeeping service for merchants, has been exploring ways to allow users to purchase items from neighborhood stores.

And NowFloats, a Mumbai-based SaaS startup that helps businesses and individuals build an online presence without any web developing skills, is on-boarding doctors to help people consult with medical professionals.

Startups are not the only businesses that have scrambled to eye new categories. Established firms such as Carnival Group, which is India’s third-largest multiplex theatre chain, said it is foraying into cloud kitchen business.

Amazon, which competes with Walmart’s Flipkart in India, has also secured approval from West Bengal to deliver alcohol in the nation’s fourth most populated state. The e-commerce giant is also exploring ways to work with mom and pop stores that dot tens of thousands of cities and towns of India.

Last week, the American giant launched “Smart Stores” that allows shoppers to walk to a participating physical store, scan a QR code, and pick and purchase items through the Amazon app. The firm, which is supplying these mom and pop stores with software and QR code, said more than 10,000 shops are participating in the Smart Stores program.

Alexis Ohanian is leaving Initialized Capital

Reddit co-founder Alexis Ohanian is leaving Initialized Capital, the investment firm he co-founded in 2011 with Garry Tan, as first reported by Axios and confirmed by TechCrunch. The move comes weeks after Ohanian publicly stepped down from the Reddit board of directors, with Y Combinator president Michael Seibel taking his spot.

Ohanian launched Initialized Capital back in 2011 with a $7 million investment vehicle. Since then, the San Francisco-based firm has grown immensely and made early-stage bets in companies like Flexport, Instacart, Cruise, Coinbase and Codecademy. Most recently, it closed a $225 million investment vehicle in 2018, its fourth fund to date.

Ohanian is leaving Initialized Capital to work on “a new project that will support a generation of founders in tech and beyond,” the firm said in a statement to TechCrunch. According to the Axios story, Ohanian is leaving Initialized to work more closely on pre-seed efforts. On its website, Initialized details that many teams it talks to already have launched products and have a plan to earn revenue.

“We understand that products and business models evolve, but it’s good to see in a very concrete way how teams are able to ship products and work together,” the firm wrote. If Ohanian raises a pre-seed fund, it will be interesting to see how he changes this methodology.

Ohanian did not directly respond to a request for comment.

It’s worth mentioning that partner departures in venture capital are rarely crystal clear break-ups. As Initialized confirmed, Ohanian will remain involved in the firm’s existing investment vehicles and portfolio companies due to legal ties. It is unclear if Ohanian will remain on any board he is on. Ro, a company in which Ohanian has a board seat, did not immediately respond to a request for comment.

One big question is whether Ohanian’s departure would trigger a key-man clause in the firm’s limited partnership agreement. “Key-man” clauses, which are typical in limited partner agreements, require that certain designated people (typically the main partners in a firm) must stay continuously employed at a firm and be active investors. When a key-man clause is triggered, limited partners often have a variety of tools, ranging from control over new hiring to outright ending the investing at a fund, in order to protect their investment in a fund.

In this case, it would be surprising if Alexis Ohanian wasn’t a key man, as he is one of the leading general partners and a founder of the firm.

Ohanian stepped away from being involved in the day to day of Reddit in 2018, and recently left his board seat at the company following protests against police brutality. The co-founder urged Reddit to fill the seat with a Black board member. Reddit ultimately selected Y Combinator CEO Michael Seibel to fill the position.

Tan, the other founding partner of Initialized, helped YC grow in its early days and helped build the famed accelerator’s internal software system and late-stage funding program. “[Tan] will continue to lead Initialized Capital into the future, finding and funding great entrepreneurs as he has done for nearly a decade,” the firm wrote in a statement to TechCrunch. “Garry and Alexis remain committed to each other as long-standing friends and business partners. The firm fully supports Alexis in his future pursuits.”

Initialized Capital currently has $500 million assets under management and has backed over 200 companies to date.

Additional reporting by Danny Crichton.

All the tech in Ford’s most important vehicle: the 2021 F-150 truck

Ford rolled out all the stops Thursday evening for the reveal of its all-new F-150 truck, right down to the splashy videos dominated by electric guitar riffs. Heck, the automaker even cast the sharp-tongued Denis Leary as its MC.

Of course, none of that really matters. It’s all about what Ford has done to improve the most important and profitable vehicle in its lineup. It’s been six years since the last redesign. This all-new F-150 offers kind of performance and abundance options that Ford truck owners have come to expect. Ford is offering 11 different grille options, for instance.

But what stands out this time is the tech as well as a push beyond mild hybrids into the realm of a full hybrid powertrain.

Here’s all the technology in the new F-150, starting with the interior and specifically the infotainment system.

Control center

The base XL version of the truck will come standard with an 8-inch center touchscreen display. However, on higher trims — XLT and above — the F-150 will have a 12-screen that can be split so that users can control multiple functions simultaneously, including navigation, music or truck features.

Ford F-150

Image Credits:

Connectivity and OTAs

Who cares if the display is big if it doesn’t have the underlying connectivity to support a host of features? The important aspect to note is the F-150 has a new SYNC 4 system and embedded 4G LTE modem, which can provide Wi Fi access for up to 10 devices. SYNC 4, which has twice the computing power or the previous generation, is going to be standard in all models of the F-150 and will feature natural voice control and real-time mapping. The requisite on-demand audio content offered via SiriusXM will also be available.

The system will also wirelessly connect a smartphone to Apple CarPlay or Android Auto.

The critical new piece here is that system, which was built within Ford instead of outsourced, can support over-the-air software updates. That means the system roll out upgrades to the vehicle such as adding or improving driver assistance features and keeping maps up to date. SYNC 4 will offer third-party apps through its AppLink system, including Waze and a version of Amazon’s Alexa called Ford+Alexa.

Office, bed or dining room?

Ford is clearly aiming for people who spend a lot of time working out of their truck. The new F-150 will come with an optional work surface in the center console area. The surface is designed to be used as a convenient place to sign documents, set up a laptop up to 15-inches in size or park that sandwich. The nifty part is that Ford managed to keep the console shifter. The driver hits the button, it folds into a compartment and makes room for the laptop work area.

Image Credits: Ford

Out on the tailgate is another work surface that includes integrated rulers, a mobile device holder, cupholder and pencil holder.

Ford F-150 Tailgate Work Surface

Image Credits: Ford

Back inside the cab are the sleeper seats, which got a bit of coverage before the big reveal. These “max recline” seats are available in the higher end models like King Ranch, Platinum and Limited and do as advertised: fold flat to nearly 180 degrees.

Hybrid system

Ford is offering its “PowerBoost” system, which refers to the full hybrid powertrain, on trim levels from the F-150 XL to the Limited. The system combines Ford’s 3.5-liter V6 engine and 10-speed transmission with a 35-kilowatt electric motor. This electric motor will use regenerative braking energy capture to help recharge the 1.5-kilowatt-hour lithium-ion battery, which is located underneath the truck..

Ford said it’s targeting an EPA-estimated range of about 700 miles on a single tank of gas and will deliver at least 12,000 pounds of available maximum towing.

Power

The truck will also offer an onboard generator called Pro Power Onboard. The feature is available with a 2.0-kilowatt output on optional gas engines. The hybrid F-150 will come standard with 2.4 kilowatts of output or an
optional 7.2 kilowatts of output.

Owners can access this power source through outlets located in the cabin as well as up to four 120-volt 20-amp outlets in the cargo. The 7.2 kw power option will include a 240-volt 30-amp outlet. The system will allow for the batteries on tool to charge while the vehicle is moving.

Assistants everywhere

There are so many in here, it’s hard to keep them straight. The driver assistance features are part of Ford’s branded Co-Pilot 360 2.0 system. The important details are that more of these advanced driver assistance features are standard on the base XL trim, including a pre-collision assist with automatic emergency braking and pedestrian detection, rearview camera with dynamic hitch assist and auto high-beam headlamps and auto
on/off headlamps.

Ford has added (checks notes) 10 new driver-assist features. The most notable one is Active Drive Assist, the hands-free driving feature that Ford plans to roll out via software updates to specific vehicles, including the all-electric Mustang Mach-E in the third quarter of 2021.

The hands-free feature will work on about 100,000 miles of pre-mapped, divided highways in the U.S. and Canada. The monitoring system will include an advanced infrared driver-facing camera that will track eye gaze and head position to ensure drivers are paying attention to the road. The DMS will be used in the hands-free mode and when drivers opt for lane-centering mode, which works on any road with lane lines. Drivers who don’t keep their eyes forward will be notified by visual prompts on their instrument cluster.

Then there’s “Intersection Assist,” which detects oncoming traffic while the driver is attempting a left turn, and “Active Park Assist 2.0,” which handles all steering, shifting, braking and accelerator controls during a parallel or perpendicular parking maneuver while the driver holds down a button.

Finally, there is “Trailer Reverse Guidance” and “Pro Trailer Backup Assist.” Neither are new, but they’re important features for users who haul trailers.

Masayoshi Son resigns from board of Alibaba; defends SoftBank Group’s investment strategy

SoftBank Group founder Masayoshi Son said on Thursday he is leaving the board of Jack Ma’s Chinese e-commerce giant Alibaba Group today, a month after Ma left the board of Son’s technology group.

Son said he sees the move as “graduating” from Alibaba Group’s board, his most successful investment to date, as he swiftly moved to defend the Japanese group’s investment strategy, which has been the subject of scrutiny and public mockery in recent quarters.

Son said his conglomerate’s holding has recovered to the pre-coronavirus outbreak levels. The firm has benefited from the rising value of Alibaba Group and its stake in Sprint, following the telecom operator’s merger with T-Mobile. Son said his firm has seen an internet rate of return (or IRR, a popular metric used by VC funds to demonstrate their performance) of 25%.

In a shareholder meeting today, he said he was worried that many people think that SoftBank is “finished” and are calling it “SoftPunku,” a colloquial used in Japan which means a broken thing. All combined, SoftBank’s shareholder value now stands at $218 billion, he said.

Son insisted that he was leaving the board of Alibaba Group, a position he has held since 2005, on good terms and that there hadn’t been any disagreements between him and Ma.

Son’s move follows Jack Ma, who co-founded Alibaba Group, leaving the board of SoftBank last month after assuming the position for 13 years. Son famously invested $20 million in Alibaba 20 years ago. Early this year, SoftBank still owned shares worth $100 billion in Alibaba.

A range of SoftBank’s recent investments has spooked the investment world. The firm, known for writing big checks, has publicly stated that its investment in ride-hailing giant Uber, office space manager WeWork, and a range of other startups has not provided the return it had hoped.

Several of these firms, including Oyo, a budget-lodging Indian startup, has moreover been hit hard by the pandemic.

Son, who has raised $20 billion by selling T-Mobile stake, said after factoring in other of his recent deals SoftBank had accumulated $35 billion or 80% of the total planned unloading of investments.

AI researchers condemn predictive crime software, citing racial bias and flawed methods

A collective of more than 1,000 researchers, academics and experts in artificial intelligence are speaking out against soon-to-be-published research claims to use neural networks to “predict criminality.” At the time of writing, more than 50 employees working on AI at companies like Facebook, Google and Microsoft had signed on to an open letter opposing the research and imploring its publisher to reconsider.

The controversial research is set to be highlighted in an upcoming book series by Springer, the publisher of Nature. Its authors make the alarming claim that their automated facial recognition software can predict if a person will become a criminal, citing the utility of such work in law enforcement applications for predictive policing.

“By automating the identification of potential threats without bias, our aim is to produce tools for crime prevention, law enforcement, and military applications that are less impacted by implicit biases and emotional responses,” Harrisburg University Professor and co-author Nathaniel J.S. Ashby said.

The research’s other authors include Harrisburg University Assistant Professor Roozbeh Sadeghian and Jonathan W. Korn, a Ph.D. student highlighted as an NYPD veteran in a press release. Korn lauded software capable of anticipating criminality as “a significant advantage for law enforcement agencies.”

In the open letter opposing the research’s publication, AI experts expressed “grave concerns” over the study and urged Springer’s review committee to withdraw its offer. The letter also called on other publishers to decline to publish similar future research, citing a litany of reasons why both facial recognition and crime prediction technology should be approached with extreme caution and not leveraged against already vulnerable communities.

The publication’s opponents don’t just worry that the researchers have opened an ethical can of worms—they also cast doubt on the research itself, criticizing “unsound scientific premises, research, and methods, which numerous studies spanning our respective disciplines have debunked over the years.”

Facial recognition algorithms have long been criticized for poor performance in identifying non-white faces, among many other scientific and ethical concerns frequently raised about this kind of software. Given that the research in question developed facial recognition software that can be applied for predictive policing purposes, the technology’s stakes couldn’t be higher.

“Machine learning programs are not neutral; research agendas and the data sets they work with often inherit dominant cultural beliefs about the world,” the letter’s authors warn.

“The uncritical acceptance of default assumptions inevitably leads to discriminatory design in algorithmic systems, reproducing ideas which normalize social hierarchies and legitimize violence against marginalized groups.”

Horizon Quantum raises $3.23M for its quantum software development tools

Horizon Quantum is part of a new crop of startups that focus on building new tools for building software for quantum computers. The Singapore-based company, which is hardware-agnostic but also launched a close partnership with Rigetti Computing in 2018, today announced that it has raised a $3.23 million funding round led by Sequoia Capital India. Previous investors SGInnovate, Abies Ventures, DCVC, Qubit Protocol, Summer Capital and Posa CV also participated.

At its core, Horizon Quantum aims to democratize quantum development. Because there is very little about quantum computing that is intuitive, the company argues, it will take a new set of tools to help today’s developers tackle quantum. What makes Horizon unique is that it takes conventional source code and then automatically analyzes that to figure out where a quantum computer could speed up an algorithm. Right now, the company can identify potential speedups in code written for Matlab and Octave.

“The conventional approach to developing quantum applications is to explicitly specify the individual steps of a quantum algorithm, or to use a library where such explicit steps are specified. What makes our approach unique is that we construct quantum algorithms directly from conventional source code, automatically identifying places where it can be sped up,” explained Si-Hui Tan, the chief science officer at Horizon Quantum. “Everything that relates to quantum mechanics happens under-the-hood and on-the-fly in our compiler. This automation is what alleviates the need for any quantum knowledge. All our users have to do is to provide their program in a conventional programming language.”

Horizon Quantum’s Joe Fitzsimons (CEO) and Si-Hui Tan (CSO).

At the same time, the company’s tools also make life for experienced quantum software developers easier by giving them the tools to write more succinct code that is also automatically optimized for the underlying quantum processors.

“We’re building a compiler that can go all the way from conventional, classical, code down to the control signals sent to the quantum hardware,” Quantum Horizon CEO Joe Fitzsimons told me in an email. “We’re still building, and we have a lot still to do, but we’ve demonstrated key parts of the technology, from identifying speedups in classical code down to characterising and mitigating errors in quantum processors. Our hope is that it will make quantum computing more easily accessible for the millions of software developers out there, and will allow us to leverage quantum computing in new domains (we specifically think about domains like geophysics for the energy sector and computational fluid dynamics for aerospace and automotive sectors).”

The company says it will use the new funding to help bring its technology to market and engage with its early customers.

This Week in Apps: App Store outrage, WWDC20 prep, Android subscriptions change

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week, one story completely took over the news cycle: Hey vs. Apple. An App Store developer dispute made headlines not because Apple was necessarily in the wrong, per its existing rules, but because of a growing swell of developer resentment against those rules. We’re giving extra bandwidth to this story this week, before jumping into the other headlines.

Also this week we look at what’s expected to arrive at next week’s WWDC20, the TikTok clone Zynn getting banned from both app stores (which is totally fine, I guess!), Facebook’s failed attempts to get its Gaming app approved by Apple, as well as some notable Android updates and other app industry trends.

Main Story: Hey vs. Apple

One story dominated this week’s app news. Unless you were living under the proverbial rock, there’s no way you missed it. After Basecamp received App Store approval for its new email app called Hey, the founders, David Heinemeier Hansson and Jason Fried, turned to Twitter to explain how Apple had now rejected the app’s further updates. Apple told Basecamp it had to offer in-app purchases (IAP) for its full email service within the app, in addition to offering it on the company website. They were not happy, to say the least.

This issue came to a head at a time when regulators are taking a closer look at Apple’s business. The company is facing antitrust investigations in both the U.S. and the E.U. which, in part, will attempt to determine if Apple is abusing its market power to unfairly dominate its competitors. In Hey’s case, the subscription-based app competes with Apple’s built-in free Mail app, which could put this case directly in the regulators’ crosshairs.

But it also brings up the larger concerns over how Apple’s App Store rules have evolved to become a confusing mess which developers — and apparently even Apple’s own App Store reviewers — don’t fully understand. (Apple reportedly told Basecamp that Hey should have never been approved in the first place without IAP.)

Apple has carved out a number of conditions where apps don’t have to implement IAP, by making exceptions for enterprise apps that may have per-seat licensing plans for users and for a set of apps that more directly compete with Apple’s own. These, Apple calls “reader” apps, as they were originally directed making an exception for Amazon’s Kindle. But now this rule offers exceptions to the IAP rule for apps focused on magazines, newspapers, books, audio, music, video, VoIP, access to professional databases, cloud storage, and more.

That leaves other digital service providers wondering why their apps have to pay when others don’t.

Apple didn’t help its argument, when earlier in the week it released a report that detailed how its App Store facilitated $519B in commerce last year. The company had aimed to prove how much business flows through the App Store without Apple taking a 30% commission, positioning the portion of the market Apple profits from as a tiny sliver. But after the Hey debacle, this report only drives home how Apple has singled out one type of app-based business — digital services — as the one that makes the App Store its money.

Apple’s decision to squander its goodwill with the developer community the week before WWDC is an odd one. Heinemeier Hansson, a content marketing expert, easily bested the $1.5 trillion dollar company by using Apple’s hesitance to speak publicly against it. He set the discussion on fire, posted App Store review email screenshots to serve as Apple’s voice, and let the community vent.

Amid the Twitter outrage, large publishers’ antitrust commentary added further fuel to the fire, including those from Spotify, Match, and Epic Games.

For more reading on this topic, here are some of the key articles:

  • TechCrunch’s exclusive interview with iOS App Store head, Phil Schiller. The exec said Apple’s position on the Hey app is unchanged and no changes to App Store rules are imminent. “You download the app and it doesn’t work, that’s not what we want on the store,” he argued. (Except of course, at those times when such an experience is totally fine with Apple, as in the case of “reader” apps.) Schiller also said Basecamp could have avoided the problems if Hey had offered a free version with paid upgrades, or if it offered IAP at a higher price than on its own website.
  • Daring Fireball’s comments on the “flimsiness” of Business vs. Consumer as a justification for Apple’s rejection of Hey. John Gruber points out that the line between what’s a business app and a consumer app is too blurred. Apple allows some business apps to forgo IAP if they sell enterprise plans (e.g. per seat plans) that often involve upgraded feature sets that aren’t even iOS-specific. But in this day and age, who’s to say that an email service doesn’t deserve the same ability to opt out of IAP in order to serve its own business user base? After all, what if it upgrades its paid service with web-only features — why should Apple get a cut of that business, too?
  • App Store policy criticism from The Verge. Nilay Patel sat down with Rep. David Cicilline (D-RI) and Basecamp CTO David Heinemeier Hansson to discuss the plight of Hey for its The Vergecast podcast. Cicilline said Apple’s fees were “exorbitant” and amounted to “highway robbery, basically.” He said Apple bullied developers by charging 30% of their business for access to its market — a decision which crushes smaller developers. “If there were real competition in this marketplace, this wouldn’t happen,” he added. The Verge’s Dieter Bohn also argued that Apple’s interpretation and enforcement of its App Store policies is terrible.
  • Basecamp CEO’s take on Apple’s App Store payment policies: Basecamp, the makers of the Hey app, put out a company statement about the App Store rules. The statement doesn’t add anything new to the conversation that wasn’t already in the tweetstorm, except the Basecamp response to Schiller’s suggestions which was something along the lines of 😝. The bottom line is that Hey wants to make the choice for its own business whether it needs the benefit of being able to acquire its users through the App Store or not. One way requires IAP and the other does not.
  • Vox’s Recode examines the antitrust case against Apple. The article doesn’t reference Hey, but lays out some of the other antitrust arguments being leveraged against Apple, including its “sherlocking” behavior,

Headlines

Apple has denied Facebook’s Gaming app at least 5 times since February

The Hey debacle is only one of many examples of how Apple exerts its market power over rivals. It has also repeatedly denied Facebook’s Gaming app entry to its App Store, citing the rule (Apple Store Review Guidelines, section 4.7) about not allowing apps whose main purpose is to sell other app, The NYT revealed this week.

Facebook’s Gaming app, which launched on Android in April, isn’t just another app store, however. The app offers users a hub to watch streamers play live, social networking tools, and the ability to play casual games like Zynga’s Words with Friends or Chobolabs Thug Life, for example. The latter is the point of contention, as Apple wants all games sold directly on the App Store, where it’s able to take a cut of their revenues.

One of the iterations Facebook tried was a version that looked almost exactly like how Facebook games are presented within the main Facebook iOS app — a single, alphabetized, unsortable list. The fact that this format was rejected when Apple already allows it elsewhere is an indication that even Apple doesn’t play by its own rules.

Zynn gets kicked out of App Store

Image Credits: Zynn

Zynn, the TikTok clone that shot to the top of the app store charts in late May, was pulled from Apple’s App Store on Monday. Before its removal, Sensor Tower estimates Zynn was downloaded 5 million times on iOS and 700,000 times on Google Play.

Ford Bronco debut date moved so it wouldn’t fall on O.J. Simpson’s birthday

Ford has changed the debut of its 2021 Bronco once again because its planned July 9 reveal falls on the birthday of O.J. Simpson, one of the iconic SUV’s most infamous passengers

The automaker tweeted Friday that it has moved the unveiling to July 13.

The reveal of the all-new Bronco lineup will now happen on Monday, July 13. This is instead of July 9. We are sensitive and respectful to some concerns raised previously about the date, which was purely coincidental.

— Ford Motor Company (@Ford) June 19, 2020

Here’s a short history lesson for those who might not understand why Simpson’s birthday and a Bronco are linked. In 1994, Simpson was charged in the double murder of his wife, Nicole Brown Simpson and her friend Ronald Goldman. He was involved in a slow speed chase as a passenger in a 1993 white Bronco driven by his friend after failing to turn himself in. The incident was broadcast on local and cable networks and the white Bronco became a pop culture moment. Simpson was acquitted.

Ford said that picking the debut date was coincidental.

The relaunch of the Bronco has been anticipated for years now. In 2017, Ford announced it was bringing back the Bronco after years of customer requests and speculation. The mid-size SUV that ended its 30-year production run in 1996 was supposed to debut in March. Then COVID-19 happened and well everything got cancelled, including numerous vehicle reveals.

Former Facebook exec thinks big tech will get broken up “over the next 10 years”

Investor Chamath Palihapitiya made part of his fortune at Facebook, where he was a vice president for more than four years, leaving one year before its 2012 IPO.

Though he has voiced concerns numerous times since about his former employer, he also believes it has played an active role in enabling users to report and disseminate important information. For example, he suggests it was smart phones and social media that has made so many Americans aware of the George Floyd tragedy and enabled citizens in the U.S. and at least 12 other countries to organize protests against racism. Without these platforms, he suggests, we might even be engaged in a traditional civil war in this country.

That doesn’t mean Facebook or others of its gigantic peers are any more immune to be regulated, however — not in his view.  As Palihapitiya said today of the companies during an online tech event: “Are they going to get broken up? Yes. Will every single government go after them? Absolutely.”

His more specific prediction is that Facebook, as well as Amazon, Google, and Apple, will continue to be investigated and fined by regulators around the world until they are no longer the leviathans they have become. “First, they’ll taxed to death, then they’ll get trust-busted,” said Palihapitiya.

He doesn’t think it will take all that much longer, either.

While investors are currently being rewarded for “going long” on the companies as they grow largely unabated, Palihapitiya said that, “on the margin, over the next 10 years . . . regulators will get their way” because “these internet companies undermine what regulators want, which is power. And the more you distribute power and information to the edges, the more in the crosshairs you will be.” (Palihapitiya noted that the only big tech company that hasn’t become a target of antitrust regulators is Microsoft, and he suggested it won’t be spared forever, either. He more or less thinks the company was given a break, following the consent decree approved in 2002 that curbed some of Microsoft’s practices and that only expired in 2011.)

Interestingly, no matter Facebook’s size going forward, Palihapitiya thinks the “pendulum will swing for it to be more sort of Middle America, the sort of ‘Fox News,’” of social media, as Twitter meanwhile swings to the “coastal cities in the United States.” It’s already easy to see these “demographic segmentations that are happening amongst these huge products,” he said.

The latter development may be much closer at hand. Kevin Roose, a New York Times columnist covering the intersection of technology, business and culture, occasionally tweets about the top-performing posts on Facebook. Yesterday, as is often the case, the searches skewed heavily toward conservative figures and themes.

Top-performing posts on Facebook today (link posts only, ranked by interactions, data from @crowdtangle) are from:

1. Donald J. Trump
2. Franklin Graham
3. Fox News
4. Fox News
5. Ben Shapiro
6. Ben Shapiro
7. Ben Shapiro
8. Blue Lives Matter
9. Occupy Democrats
10. Sean Hannity

— Kevin Roose (@kevinroose) June 16, 2020

Teased by interviewer Robin Wigglesworth of the FT about how Facebook might react to the comparison, Palihapitiya said matter-of-factly of the different platforms, “The content reinforces the kind of person that wants to be using them. It’s no different today than when you choose to watch MSNBC versus CBS versus Fox News.”

African payment startup Chipper Cash raises $13.8M Series A

African cross-border fintech startup Chipper Cash has closed a $13.8 million Series A funding round led by Deciens Capital and plans to hire 30 new staff globally.

The raise caps an event filled run for the San Francisco based payments company, founded two years ago by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled.

The two came to America for academics, met in Iowa while studying at Grinnell College and ventured out to Silicon Valley for stints in big tech: Facebook for Serunjogi and Flickr and Yahoo! for Moujaled.

The startup call beckoned and after launching Chipper Cash in 2018, the duo convinced 500 Startups and and Liquid 2 Ventures — co-founded by American football legend Joe Montana — to back their company with seed funds.

Two years and $22 million in total capital raised later, Chipper Cash offers its mobile-based, no fee, P2P payment services in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.

“We’re now at over one and a half million users and doing over a $100 million dollars a month in volume,” Serunjogi told TechCrunch on a call.

Chipper Cash does not release audited financial data, but does share internal performance accounting with investors. Deciens Capital and Raptor Group co-led the startup’s Series A financing, with repeat support from 500 Startups and Liquid 2 Ventures .

Deciens Capital founder Dan Kimmerling confirmed the fund’s lead on the investment and review of Chipper Cash’s payment value and volume metrics.

Parallel to its P2P app, the startup also runs Chipper Checkout: a merchant-focused, fee-based mobile payment product that generates the revenue to support Chipper Cash’s free mobile-money business.

The company will use its latest round to hire up to 30 people across operations in San Francisco, Lagos, London, Nairobi and New York — according to Serunjogi.

Image Credits: Chipper Cash

Chipper Cash has already brought on a new compliance officer, Lisa Dawson, whose background includes stints with the U.S. Department of Treasury’s Financial Crimes Enforcement Network and Citigroup’s anti-money laundering department.

“You know in the world we live in the AML side is very important so it’s an area that we want to invest in from the get go,” said Serunjogi.

He confirmed Dawson’s role aligned with getting Chipper Cash ready to meet regulatory requirements for new markets, but declined to name specific countries.

With the round announcement, Chipper Cash also revealed a corporate social responsibility component to its business. Related to current U.S. events, the startup has formed the Chipper Fund for Black Lives.

“We’ve been huge beneficiaries of the generosity and openness of this country and its entrepreneurial spirit,” explained Serunjogi. “But growing up in Africa, we’ve were able to navigate [the U.S.] without the traumas and baggage our African American friends have gone through living in America.”

The Chipper Fund for Black Lives will give 5 to 10 grants of $5,000 to $10,000. “The plan is to give that to…people or causes who are furthering social justice reforms,” said Serunjogi.

In Africa, Chipper Cash has placed itself in the continent’s major digital payments markets. As a sector, fintech has become Africa’s highest funded tech space, receiving the bulk of an estimated $2 billion in VC that went to startups in 2019.

Africa Top VC Markets 2019

Image Credits: TechCrunch

Those ventures, and a number of the continent’s established banks, are in a race to build market share through financial inclusion.

By several estimates — including The Global Findex Database — the continent is home to the largest percentage of the world’s unbanked population, with a sizable number of underbanked consumers and SMEs.

Increasingly, Nigeria has become the most significant fintech market in Africa, with the continent’s largest economy and population of 200 million.

Chipper Cash expanded there in 2019 and faces competition from a number of players, including local payments venture Paga. More recently, outside entrants have jumped into Nigeria’s fintech scene.

In 2019, Chinese investors put $220 million into OPay (owned by Opera) and PalmPay — two fledgling startups with plans to scale first in West Africa and then the broader continent.

Over the next several years, expect to see market events — such as fails, acquisitions, or IPOs — determine how well funded fintech startups, including Chipper Cash, fare in Africa’s fintech arena.

SoftBank confirms it may sell some of its T-Mobile stake

SoftBank Group confirmed today it is considering selling its T-Mobile U.S. shares.

Bloomberg reported last month that SoftBank was nearing an agreement to sell about $20 billion of its T-Mobile U.S. shares to investors including Deutsche Telekom, T-Mobile’s controlling shareholder, in an effort to offset major losses from its investment business, including the Vision Fund.

In today’s notice, SoftBank Group, which owns about 25% of T-Mobile U.S. shares, said it is exploring transactions that could include private placements or public offerings and transactions with T-Mobile or its shareholders, including Deutsche Telekom AG, or third parties.

The potential sale would be part of SoftBank Group’s program, announced in March, to sell or monetize up to $41 billion in assets to reduce debt and increase its cash reserves. The company said, however, that it cannot assure any of the transactions involving T-Mobile shares will be completed.

ByteDance to shut down Vigo apps in India

Chinese internet giant ByteDance has announced plans to discontinue two of its apps in India, its biggest overseas market, and urged users to move to TikTok.

Vigo Video and Vigo Lite, two apps that allow users to create and share short-form sketches and lip-syncing to Bollywood songs, posted a message early Monday (local time) to announce that they would be discontinued at the end of October this year.

In its post, titled “a farewell letter,” ByteDance said it was saddened to shut down the apps but did not offer an explanation for the decision. Indian news outlet Entrackr first spotted the letter.

Unlike TikTok, ByteDance’s most popular app, Vigo Video and Vigo Lite have struggled to make inroads in the world’s second largest internet market. While TikTok has more than 200 million users in India, Vigo Video had about 4 million monthly active users last month and Vigo Lite could only amass 1.5 million users, according to one of the top mobile insight firms — data of which an industry executive shared with TechCrunch.

While Vigo Video gained fewer than 1 million users in a year, Vigo Lite shredded just as many in the same period, the data showed.

Both the apps counted India as their biggest market but have been available in several other markets, including neighboring nation Bangladesh, for instance. It’s unclear whether ByteDance is discontinuing the apps in every market. The company did not immediately respond to a request for comment.

The move, despite the apps’ poor reception in India, comes as a surprise. Recruitment posts submitted by ByteDance as late as last month described Vigo as one of the company’s biggest businesses in India.

ByteDance also operates Helo app, which enables users to share their thoughts with friends, and Lark, a productivity suite similar to Google Drive. The company recently stopped charging Lark customers in India for the foreseeable future in response to the coronavirus crises.

Other recent job recruitment posts reveal that the company is looking to hire executives to aggressively explore ways to monetize its services in the country.

ByteDance’s TikTok app has been scrutinized in India in recent weeks for failing to actively remove videos that promoted violence, animal cruelty, racism, child abuse, and objectification of women.

In its message to users on Vigo apps today, ByteDance said it will help them migrate their videos to TikTok. On TikTok, “you will be able to show your talent to a larger group of friends. We are eager to see you [there]!” the message reads.

Tesla’s U.S.-made Model 3 vehicles now come equipped with wireless charging, USB-C ports

Tesla Model 3 vehicles produced at its Fremont, Calif. factory will reportedly come standard with a wireless charging pad and USB-C ports, upgrades that were first spotted by Drive Tesla Canada.

Electrek also reported on the changes.

The upgrades now put U.S.-made Model 3s on par with the same vehicles made at Tesla’s factory in China.

The wireless phone charger and USB-C ports first appeared in the newer Model Y, which customers began to receive in March. Tesla has since taken steps to bring some of these new Model Y features into the older Model 3. The upgrades initially showed up in vehicles assembled in China. Drive Tesla Canada said the upgrades became standard in Model 3 vehicles assembled after June 4.

Tesla still offers a $125 upgrade (seen below) for those who own pre-June 4 2020 Model 3 vehicles. Aftermarket company Jeda Products also sells a Qi wireless phone charger for about $99.

tesla wireless charging pad

Image Credits: Tesla

The upgrades are likely part of Tesla’s aim to make its automotive assembly more efficient as well as make its vehicles more attractive to potential customers who have slowed purchases during COVID-19 pandemic.

Tesla delivered 88,400 vehicles in the first quarter, beating most analysts expectations despite a 21% decrease from the previous quarter as the COVID-19 pandemic put downward pressure on demand and created logistical challenges. Tesla produced 103,000 electric vehicles in the first quarter, about 2% lower than the previous period.

COVID-19 disrupted the supply chain and global sales in China and Europe in the first quarter, which ended March 31. The pandemic spread its economic gloom to the U.S. towards the end of the first quarter, and then dug in its heels in the second period. Tesla typically reports quarter production and delivery figures a few days after the end of the quarter. The second quarter ends June 30.

Lo Toney has some ideas about how to (really) bring VC into the 21st century

Last week, we suggested that for a truly diverse venture industry, the limited partners who provide investing capital to VCs — institutions like universities and hospital systems — need to start incorporating diversity mandates into their work. Say a venture firm wanted to secure a commitment from the University of Texas System; it would first need to agree, in writing, to pour a certain percentage of its capital into startups founded by underrepresented groups.

Given how fragmented the world of institutional investing is, the idea might sound impracticable. But Lo Toney, one of a small but growing number of black VCs in Silicon Valley, suggests it might actually be inevitable. He points, for example, to pension funds like the California Public Employees’ Retirement System, which manages the assets of 1.6 million employees, many of whom “look like me,” says Toney. Imagine what might happen if they started asking more questions about who is managing their money.

Not that Toney is waiting on this development. He doesn’t need to. As a former partner at Comcast Ventures, then GV, Toney was able to secure Alphabet as the anchor investor in his own investment firm, Plexo Capital, whose debut vehicle has been funding venture outfits, as well as making direct startup investments.

Now, with renewed attention being paid to the lack of people of color throughout the startup industry, Plexo has LPs knocking on its door again, and Toney’s plans for that second fund involve not just helping his current fund managers but helping more investors of color form venture firms of their own.

It’s an extension of work that’s already in progress. Plexo, which closed its debut fund last year with $42.5 million — including from the Ford Foundation, Intel, Cisco Systems, the Royal Bank of Canada, and Hampton University — already has stakes in 20 funds, including Precursor Ventures, Ingressive Capital, Kindred Ventures, Equal Ventures, Boldstart Ventures, and Work-Bench.

Most are run exclusively or in part by people of color. “We have enough reports from the Harvard’s and the McKinsey’s of the world to show us that diversity at all levels matters,” says Toney. “We see better performance from companies with diverse boards, public companies with diverse management teams; when there are diverse managers, we see better performance.”

With his second fund, he’s hoping to turn the dial even further. More specifically, he says, Plexo aims to “develop a Y Combinator of sorts” that enables “a great investor” to transition into “a great fund manager.”

Part of the idea is to institutionalize the work that Plexo already does in an ad-hoc way around helping managers to prepare marketing materials, pitch their strategy to both high-net-worth individuals and institutions, and manage LP communications after that base of investors has been established. And those are just three aspects of the many elements of fund management with which Plexo can help, he says.

Plexo is also exploring “putting a strategy in place [to] help a lot of these younger GPs with working capital, to be able to incur the expenses that it takes to start a fund, [given that] it can take, on average, a million dollars.” (That’s taking into account no salary during the fundraising process, travel expenses, service providers, and the money that a general partner typically has to kick in to the fund.)

It’s a model that Plexo thinks it can use to move things along faster than were it solely investing in individual companies. Still, Plexo can’t do it alone. Neither can its friends and allies, including Elliott Robinson of Bessemer Venture Partners, Frederik Groce of Storm Ventures and Sydney Sykes of the retail startup Dolls Kill, all of whom separately steer a young organization called BLCK VC that works to connect and advance black venture investors.

Toney remains especially concerned over the few people of color at bigger and later-stage venture firms — investors who might otherwise have the networks and know-how to support black entrepreneurs as their startups mature.

It’s a valid worry. According to a 2018 report in The Information, there were just seven black decision-makers at the 102 venture firms with more than $250 million under management, and those numbers are relatively unchanged today. The dearth is particularly glaring for black investors who are women.

The industry could, slowly, over time, grow more inclusive of underrepresented groups. But it would happen faster if institutions that accept federal funding or else manage the money of public employees decided to focus more on the issue. In fact, it’s conceivable that the constituents of these institutions — including donors and employees through their pension fund contributions — might eventually insist on it.

“There’s often not really a collective realization of the power and influence that one can have within our asset class to actually affect change,” says Toney. “I suspect — and I don’t know this, and I’m not part of any initiatives — that we’ll see more of these [pension] funds take a stance, and that [this shift] will come from the bottom up, from their employee base.”

It might not take much to get the ball rolling. “They could put the pressure on our industry even simply asking questions [including]: ‘How many black partners do you have?’ ‘How many women do you have?’ ‘What does the composition of your portfolio look like?’”

“Even just asking those questions as a first step — that in and of itself would affect change,” he says, “because who wants to look bad when answering those questions?”

Spike raises $8 million to make your email look like a chat app

Asynchronous chat apps like Slack have done their best to kill email, but maybe the key to chat replacing email is just making email look like chat? That’s the idea of Spike, a productivity startup that has built an email app that organizes emails into chat bubbles with an interface that encourages users to keep it short and simple.

Spike’s software began with a focus solely on re-skinning the email experience, but today they’re also launching support for collaborative notes and tasks into their interface as they look to provide a cohesive solution for productivity. The company is fitting an awful lot of functionality into one window, but they hope that streamlining these apps together can leave users spending less time tabbing through separate windows and more time getting stuff done.

“Email is a collection of your tasks, so why should it be separated from where your other tasks are?” asks CEO Dvir Ben-Aroya.

The new functionality widens the ambitions of the software but also refocuses the app on a more complete business use case. Ben-Aroya admits that the company hasn’t pushed monetization very hard in the past, instead looking to scale up its base of free users in an effort to eventually scale up inside organizations. As the app looks to bring small businesses and larger enterprises onboard, the app is keeping its free tier, but to get past limits on message history and note/task creation users are going to have to upgrade to a $7.99 per month per user plan ($5.99 per month when billed annually).

Alongside its product news, the startup also shared today that it has raised $8 million in a Series A round led by Insight Partners . Wix, NFX and Koa Labs also participated in the round. The company plans to use the cash to aggressively scale hiring and double its team this year.

“[W]e see a massive addressable market for centralized communication hubs to connect disparate messaging channels,” Insight Partners VP Daniel Aronovitz said in a statement. “The current climate and associated macro-tailwinds behind remote teamwork have only strengthened our belief that there is a sizable and growing demand for digital collaboration tools.”

The company’s platform is compatible with most email services and the app is available on Android, iOS, Mac and Windows.

Email startups are often privy to some of a user’s most sensitive data and can receive a lot of inquiries regarding privacy. As a result, Ben-Aroya believes his company is far ahead of competitors when it comes to safety. “Unlike many other available email clients, we’re never touching, manipulating, using, reusing or selling any part of the user data,” he says.

Spike has raised $16 million in funding to date.

Ethyca raises $13.5M to help businesses automate data privacy and compliance

The upcoming CCPA regulations coming into effect in the US have put a renewed focus on how companies online are handling the issues of data privacy and compliance. Today a startup that’s built a platform to help them navigate those waters more easily is announcing a round of funding to meet that demand.

Ethyca, which lets organisations both identify where sensitive data may be used and then provides an easy set of API tools to create permissions, reporting and analytics around it, has raised $13.5 million in financing after picking up a number of major companies, including some high-profile tech companies, as customers.

The crux of the issue that Ethyca is tackling is that online privacy compliance has become a critical issue, in part because of regulations, but mainly because the online world has, before anyone had a chance to blink, become a critical component of our lives so getting things wrong can be disastrous.

“Move fast and break things sounds good on a T-shirt, but the web is effectively society infrastructure now,” explained co-founder and CEO Cillian Kieran, who hails from Ireland but now lives in New York. “If you met a bridge builder wearing a t-shirt saying that you’d panic. So despite the omnipresence of tech we don’t have the tools to deal with privacy issues. The aim here is to build safe systems, and we provide the data and data maps to do that.”

The funding comes on the back of a seed round Ethyca raised in July 2019 and brings the total raised to about $20 million. 

IA Ventures, Affirm and PayPal cofounder Max Levchin’s SciFi VC, CAA cofounder Michael Ovitz, Warby Parker cofounders Neil Blumenthal and Dave Gilboa, Harry’s cofounder Jeff Raider, Allbird’s cofounder Joey Zwillinge, Behance cofounder Scott Belsky, former Chief Data Scientist of the US Office of Science and Technology Policy DJ Patil, Lachy Groom, and Abstract Ventures make up the long list of high-profile names and firms that are a part of this latest round, which speaks to some of the traction and attention that New York-based Ethyca has had to date.

On the enterprise side, the company works with a number of large tech businesses including banks and some major tech companies that don’t want their names disclosed, to help them both better map personal data within their systems, as well as create better workflows for extracting that information when it’s requested either by a user, or for the purposes of reporting for data compliance regulations, or more often to make sure that when new products are being built, that they take that existing personal data into account comply with data policies around it.

If it sounds odd that a tech company might need to turn to a third-party startup for privacy services, it’s not so strange. Even at big tech companies, which would have spent years and millions of dollars preparing for privacy regulations, the complexity has meant that not all use cases can be accounted for.

On the smaller end of the scale, it also has a number of well known brands like luggage company Away, Parachute Home and Aspire IQ as well a number of other smaller businesses implementing its tools.

As Kieran describes it, while there are already others out there building tools to navigate data protection and privacy regulations like CCPA and GDPR in Europe (OneTrust and DataGuard being two in the startup arena that have raised big rounds), the aim of Ethyca is to build a layer that makes it quick and relatively easy to implement a compliance layer into a system.

The company has APIs but also now has introduced a self-service version of its product for smaller businesses, which he says means that “any customer can turn it on and follow the automated process in a TurboTax type of way.”

CCPA compliance can take 8-10 weeks to implement, and you often need consultants and more technical talent to get the work done and run services afterwards, he said. “Now it can be done in as little as an hour for an average midsized business.” Larger companies may take a few days, he added.

Kieran and his co-founder Miguel Burger-Calderon know first-hand about some of the issues that brands and other online businesses might face when it comes to identifying what kind of data might fall under these newer regulations, and the challenges of navigating that once you do. BrandCommerce, a previous company that the two founded, helps brands and businesses build and run D2C operations online. (You can also see, therefore, why Ethyca may have in part picked up the particular investors that it has.)

“Companies can no longer simply strive to be compliant and get by – enterprises need to think long-term and show their customers that they can be trusted with their data,” said Roger Ehrenberg of IA Ventures in a statement. “Forward-thinking companies have recognised the value of Ethyca’s product to their bottom line as you can see from looking at the growing set of blue-chip brands and technology customers so far.”

 

BTS label Big Hit Entertainment inks broad partnership with streaming tech company Kiswe

The town of New Providence, N.J. may seem like an unlikely home for a company that’s just inked a new deal with Big Hit Entertainment (the label behind the global K-pop supergroup BTS) and raised tens of millions of dollars from some of the largest venture capital firms in the United States, but Kiswe Mobile is proof that valuable startups can come from anywhere.

Founded in 2013 and led by chief executive, Mike Schabel, Kiswe Mobile is now extending its relationship with Big Hit from a one-time show in early December to an agreement that will extend well beyond the next BTS gig in what the two companies described as a “global partnership”.

Schabel declined to disclose any terms of the partnership agreement but said that it was more than a simple business contract between the two entities.

For the past seven years Kiswe has worked with some of the biggest sports and entertainment leagues in the U.S., including the National Basketball Association, Major League Soccer and the Professional Golf Association on streaming live events. In recent years the company has added eSports  to its roster — and live events including that December BTS show.

Founded by former President of Bell Labs, Jeong Kim, along with Wim Sweldens and Jimmy Lynn back in 2013, Kiswe Mobile offers a streaming service that has four different components that live entertainment needs to get back on track in the post-COVID era of social distancing.

The company’s technology offers a central production system for concert producers to process video and audio,  multi-camera and interactive viewing options for fans watching the show to communicate with the live performers and each other, and presenting it exclusively by either geo-location or through ticketing.

“This MOU opens the possibility for diversified innovation in the global market by combining Big Hit’s content planning know-how and Kiswe’s technology, said Big Hit chief executive Lenzo Yoon, in a statement.

Behind all of this technology are a number of high profile investors including New Enterprise Associates, the multi-billion venture capital firm based outside of Balitmore. Other investors include Revolution, the Washington, DC-based investment firm founded by Steve Case; Ted Leonsis, a co-founder of Revolution and the founder of Monumental Sports Group, and company founder Jeong Kim.

The company has raised well over $20 million in financing since its launch in 2013, but Schabel declined to disclose the total amount the company raised.

The Big Hit deal is meant to serve a precursor to the launch of a new BTS Concert and convention called “BANG BANG CON The Live” later this month.

That show is, itself, a prelude to more interactive events from Big Hit’s roster of talent powered by Kiswe Mobile.

Technologies like Kiswe’s are arriving at a time when live events need them the most. The recent Travis Scott Fortnite experience, and Marshmello’s earlier turn behind the virtual wheels of steel in Epic Games’ breakout hit are among a number of new technologies that are looking to bring at least some of the magic of shared experiences and entertainment to fans that are hungry for it.

Several startups are taking this moment to push interactive live experiences for audiences. They include the virtual concert design and distribution platform, WaveXR; the interactive streaming service, Caffeine, and development firms like Zoan, which created a virtual concert experience for Helsinki’s May Day celebrations that brought a crowd of 1 million.

Kiswe’s deal with Big Hit arguably taps into the biggest, and most rabid fo the music industry’s fanbases by reaching the members of the BTS Army.

As Schabel acknowledged in a statement, “Kiswe’s relationship with Big Hit Entertainment expands our huge global sports and media footprint into the music sector and allows Kiswe and Big Hit to explore new ventures in the industry.”

The Station: Bird spikes Circ in the Middle East, Kitty Hawk folds Flyer, Cruise attempts a hiring coup

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every Saturday in your inbox.

Hi friends and first-time readers. Welcome back to The Station, a newsletter dedicated to all the present and future ways people and packages move from Point A to Point B. I’m your host Kirsten Korosec, senior transportation reporter at TechCrunch.

In the past two weeks, demonstrators have taken to the streets to protest police brutality following the murder of George Floyd (and many other black men and women who have been killed by police). Newsletters about transportation hardly seem important right now.

I will note that transportation, or the lack of access to it, has played a huge part in continued and systemic racism in the United States. The Station aims to highlight the founders, urban planners, bike advocates, lawmakers, tech companies and venture capitalists who are helping — and hurting — the efforts to make transportation accessible to all.

Reach out and email me at kirsten.korosec@techcrunch.com to share thoughts, criticisms, offer up opinions or tips. You can also send a direct message to me at Twitter — @kirstenkorosec.

Alright, time to dig in. Vamos.

Micromobbin’

The scooter and bike scrapping keeps on keepin’ on. Last month, it was Uber tossing more than 20,000 JUMP bikes into a recycling yard following its deal to offload the JUMP brand to Lime.

This week, it’s scooter sharing company Bird. The company shut down scooter sharing in several cities in the Middle East, an operation that was managed by Circ, the micromobility startup it acquired in January. About 100 Circ employees were laid off and as many as 10,000 Circ scooters were sent to a third-party UAE-based company for recycling, TechCrunch learned from multiple sources.

Bird couched the shutdown as “pausing of operations” and was quick to note that it was still in Tel Aviv. This pause comes less than six months after Bird announced it had acquired its European counterpart and touted plans to expand. Bird’s decision to shut down Circ’s entire Middle East business affects operations in Bahrain, UAE and Qatar.

Bird says it will return to the region. But my sources disagree, noting that the company ruined its relationships with transportation agencies in places like Abu Dhabi.

Meanwhile, electric-bike maker Cowboy released a new iteration of its bike, the Cowboy 3. It’s a relatively small update that should make the experience better for newcomers, Roman Dillet reports.

Oh and remember our little snippet last week about Superpedestrian? Megan Rose Dickey noted Superpedestrian, the startup that makes self-diagnosing electric scooters, had teamed up with Zagster and quietly launched a shared electric scooter service called LINK.

Turns out Zagster is Superpedestrian. Growth equity firm Edison Partners said this week it has sold its portfolio company Zagster to Superpedestrian.

Deal of the week

money the station

This week, we turn our attention to Volkswagen’s $2.6 billion investment into Argo AI, the Pittsburgh-based self-driving car startup that came out of stealth in 2017 with $1 billion in backing from Ford. The deal, which was announced in July 2019, was finalized this week.

It’s notable for a few reasons. Argo is now a global company with two customers — VW and Ford — as well as operations in the U.S. and Europe. The company’s workforce just popped by more than 40% as Autonomous Intelligent Driving (AID), the self-driving subsidiary that was launched in 2017 to develop autonomous vehicle technology for the VW Group, will be absorbed into Argo AI. AID’s Munich offices will become Argo’s European headquarters.

Argo also has offices in Detroit, Palo Alto and Cranbury, N.J. The company has fleets of autonomous vehicles mapping and testing on public roads in Austin, Miami and Washington, D.C.

This is all very exciting. Of course, now the hard work begins. Argo must juggle two huge, traditional automotive customers and maintain multiple offices with more than 1,000 employees. Welcome to the big time.

Argo AI CMU

An Argo AI autonomous vehicle at Carnegie Mellon University.

Other deals that got our attention:

OTTO Motors, the industrial division of Clearpath Robotics, raised $29 million in funding in a Series C funding round led by led by Kensington Private Equity Fund, with participation from Bank of Montreal Capital Partners, Export Development Canada (EDC) and previous investors iNovia Capital and RRE Ventures. To date, the company has raised $83 million in funding.

Beam, a Singapore-headquartered micromobility firm that offers shared e-scooters, has raised $26 million in a Series A round led by Sequoia India and Hana Ventures. Several more investors from the Asia Pacific region participated, including RTP Global, AppWorks, Right Click, Cherubic and RedBadge Pacific, Beam said. The startup, which has raised $32.4 million to date, plans to use the capital to expand its footprint in Korea, Australia, Malaysia, New Zealand and Taiwan.

Navmatic, a startup that provides high-accuracy positioning for micromobility, robotics and mobile phones, came out of stealth mode earlier this year on $4 million in funding. The round, which was finalized pre-COVID 19, was led by Lear Corporation’s Lear Innovation Ventures, and also includes UpWest, Next Gear Ventures, and several private investors.

Navmatic is aiming to solve one of the stickier problems of micromobility: precise location within centimeters. Navmatic CEO and co-founder Boaz Mamo says the tech, which goes beyond GPS, is the backbone of micromobility that will help cities, customers and scooter companies. Mamo also weighed in on the pandemic and its impact on shared mobility. He expects that while micromobility has been negatively affected by COVID, it will return as people try to avoid public transportation and seek other means of getting around.

Gojek, the five-year-old Southeast Asian ride-hailing startup that also offers food delivery and mobile payments, is attracting more high-profile backers. Facebook and PayPal are the latest to participate in its ongoing Series F financing round, which brings it total raise-to-date to over $3 billion. Google and Tencent have also invested in Gojek.

Softbank announced a new investment vehicle to back entrepreneurs of color called the Opportunity Growth Fund, which “will only invest in companies led by founders and entrepreneurs of color,” according to an internal memo from SoftBank’s COO Marcelo Claure. The fund will initially start at $100 million.

Andreessen Horowitz is launching a fund designed to invest in underrepresented and underserved founders. The Talent x Opportunity (TxO) fund starts with $2.2 million in donations from the firm’s partners. TxO will be invested in a small group of seed-stage startups the first year and expand in size going forward.

Vroom released an updated IPO filing that provides pricing information for a somewhat odd public offering. The company expects to price its IPO between $15 and $17 per share, according to the filing. It hopes to sell 18.75 million shares in its debut, generating gross proceeds of between $281.25 million and $318.75 million. Alex Wilhelm spends some time sorting through the latest financial bits.

It’s electric

the station electric vehicles1

There was too much electric vehicle news this week to put under my catch-all at the bottom of the newsletter. Plus lots of photos too!

Let’s kick things off with James Dyson, the man behind the high-tech vacuum cleaners and fans company. Dyson was working on an electric vehicle until he wasn’t. The project, known internally as N526, was killed in October.

Dyson popped back up this week with a blog post, video and photos that describe the project in greater detail and shared new tidbits. Dyson spent £500 million (or about $605 million)he project) of his own money on the EV project that, at one point, had 600 people working on it. Dyson described it as a fantastic result with interesting features like no visible door handles and all controls on the steering wheel. “It’s a brilliant car with very special features and a very intelligent hard-working team,” he said in a video.

Image Credits: Screenshot/Dyson

And yet despite this seeming slam dunk, the electric vehicle project was ended because it wasn’t commercially viable. “It’s a great shame, that’s probably the best way of putting it,” Dyson said in one of the videos.

One insider told me at the time the project ended that this came down to choice and legacy. Dyson, who had already made his fortune, could walk away despite the enormous expense. To continue, would be to risk the legacy he had built.

Tesla and its CEO Elon Musk didn’t have that luxury during its most challenging times, the insider noted. It was either push on or die.

Other electric news

GM’s electric offensive to bring at least 20 new EVs to market by 2023 reportedly includes a commercial van. The company is developing an electric van for the commercial market, Reuters reported. Code-named BV1, the van is expected to start production in late 2021 and will use the Ultium battery system that was revealed in March.

As I noted in my own reporting,  GM will join an increasingly crowded pool if it delivers on that goal. Amazon ordered 100,000 electric delivery vans from Rivian, the first of which are expected to be on the road in 2021. Ford has announced an electric Transit van that’s expected to launch in 2021. Startups such as Arrival, Chanje, Enirde and XoS have all received orders for electric vans from package delivery companies such as Ryder and UPS.

Bollinger Motors has been granted a patent for its Passthrough and Frunkgate, two features that take advantage of its electric architecture.

The Passthrough is an opening that spans the length of the vehicle, from the front-cargo space through the interior of the cab, to the rear of the vehicle. The Passthrough enables an uninterrupted 13-foot on its B1 sport utility truck and a 16-foot path, on its B2 pickup.

Bollinger electric vehicle Passthrough

Image Credits: Bollinger Motors

The Frunkgate is the fold-down portion on the nose of the truck, similar to a tailgate and allows cargo to be inserted through the front of both the Bollinger B1 and B2. Production for the Bollinger Motors B1 sport utility truck and B2 pickup is slated to begin in 2021.

Nikola Motors, the maker of electric and hybrid trucks and vehicles, went public this week. The company did a reverse merger with VectoIQ and took over its stock ticker. Forbes examines the company, its plans and founder.

Jalopnik took a deep dive into an electric vehicle that senior editor Jason Torchinsky ordered for $900 ($1,200 by the end) from Alibaba. The vehicle, built by the Changzhou Changli Vehicle Factory, is more impressive than you might expect for the price.

Changli electric vehicle

Image Credits: Alibaba/screenshot

Notable reads and other tidbits

Before we dive into all the news bits, I wanted to draw your attention to a draft transportation bill released this week by House Democrats.

The $494 billion, 5-year plan is called Investing in a New Vision for the Environment and Surface Transportation in America Act. The proposed legislation would replace the FAST Act, which was passed in 2015 and expires later this year.

Rail and transit get a proposed funding boost. The federal Transportation Alternatives Program, which focuses on bike and pedestrian projects, got a 60% increase above the $850 million authorized in the FAST Act. However, the bulk of the draft bill is still focused on roads and related infrastructure.

AV news

Yandex, the Russian search giant that has been working on autonomous vehicle technology, unveiled its fourth-generation self-driving cars that were jointly developed with Hyundai Mobis. If you recall, Yandex and Hyundai partnered in March 2019 to develop software and hardware for autonomous car systems.

The latest generation platform operates on the 2020 Hyundai Sonata, joining Yandex’s existing fleet of more than 100 self-driving Toyota Priuses. [On a side note: I took a ride in one of Yandex’s self-driving (and driverless) Toyota Priuses in Las Vegas this January during CES. I was surprised by the bold and assertive decision making and driving by the vehicle.]

These fourth-generation self-driving Sonatas are now operating in Moscow. The company plans to add another 100 Sonatas by the end of 2020. The vehicles will be integrated into its robotaxi program in Innopolis, Russia, as well as joining its fleet in Michigan.

California Department of Motor Vehicles has given its autonomous vehicle web portal a new look. Let’s hope it’s easier to navigate and find the important stuff like incident reports.

The AP Stylebook made an important update last week that I failed to mention last week. Four points that have now been cast in stone forevermore:

  1. The term autonomous vehicles describes vehicles that can monitor the road and surroundings and drive for all or part of a trip without human supervision. They also can be called self-driving vehicles
  2. The term driverless should not be used unless there is no human backup driver.

  3. Some vehicles have driver-assist systems that can perform tasks such as changing lanes, driving at low speeds, or keeping a safe distance from vehicles ahead of them, but they still need human supervision. These should be referred to as partially automated.

  4. Avoid the term semi-autonomous because it implies that these systems can drive themselves. At present, human drivers must be ready to intervene at any time.

The IIHS caused a bit of a kerfuffle with a study that undercuts some of the presumed safety benefits around autonomous vehicles. AV developers and PAVE, or Partners for Automated Vehicle Education, pushed back. Here is PAVE’s counterargument. Both are worth the read.

Miscellaneous bits

Rumors of buses full of antifa protestors plying the countryside are causing panic in rural counties throughout the country — even though there’s no evidence they exist, The Verge reports. The Associated Press has catalogued at least five separate rural counties where locals have warned of imminent attacks, although none of the rumors have been substantiated.

Amazon has added 12 new cargo aircraft to Amazon Air, bringing its total fleet to more than 80 aircraft, in part because of increased demand for shipments during the COVID-19 pandemic. Amazon said one of the planes will begin transporting cargo this month, and the rest will be delivered next year.

The Boring Co., another Elon Musk company, has proposed a a high-speed tunnel linking Rancho Cucamonga with Ontario International Airport. This week, San Bernardino County transportation agency voted unanimously to support the idea, the San Jose Mercury News reports. Staff have been directed flesh out the proposal and postpone a $3 million study of other airport-rail connections.

LanzaTech, which develops technologies that can turn carbon emissions into ethanol that can be used for chemicals and fuel, has spun out a new company. This spinout, conducted alongside its corporate partners Mitsui, Suncor and All Nippon Airways, aims to bring sustainable aviation fuel to the commercial market.

Layoffs, business disruptions and people

Remember a week ago when I used the term “knife fight” to describe the pursuit of talent within the autonomous vehicle technology industry? Yeah, welp.

Cruise co-founder and CTO Kyle Vogt sent an email to employees at Zoox with a direct appeal to join his company. It’s no secret that Zoox has had to do some belt tightening in the past year and is reportedly being pursued by Amazon. Zoox is in an uncertain time and Vogt didn’t waste the opportunity.

“I’m writing because your company is potentially about to go through a major transition, and I want to ensure you have the ability to do what you signed up to do: transform transportation …,” the email read, according to an initial report from Reuters, a follow on from The Information and confirmed by TechCrunch.

This ploy didn’t sit well with Tim Kentley Klay, the co-founder and ousted CEO of Zoox. Klay sent a tweet Saturday morning that called Vogt a “vulture” and said Zoox engineers are “better than yours.” Grab the popcorn.

Layoffs

On-demand parking startup Spothero laid off 40 people, citing economic challenges caused by the COVID-19 pandemic.

TrueCar, the online car marketplace, laid off 30% of its staff.

And under the weird hiring-layoff hybrid

Kitty Hawk is shutting down its Flyer program, the aviation startup’s inaugural moonshot to develop an ultralight electric flying car designed for anyone to use.

The company, backed by Google co-founder Larry Page and led by Sebastian Thrun, said it’s now focused on scaling up Heaviside, a sleeker, more capable (once secret) electric aircraft that is quiet, fast and can fly and land anywhere autonomously.

Kitty Hawk is laying off most of Flyer’s 70-person team, TechCrunch learned. But it says it is “doubling down” on Heaviside, a plan that includes hiring more folks for that project.

Rivian laid off 40 employees at its Plymouth, Michigan office, a story that The Verge first reported. There appears to be confusion over why there were layoffs. Employees said it was related to COVID-19, while Rivian said it was performance based.

Meanwhile the company told TechCrunch it has hired a new COO and filled several new position. Rod Copes, who previously worked at Royal Enfield and Harley Davidson, is the new COO. The new positions were filled by employees who have worked at Apple, Lucid Motors, Nissan, Tesla and Waymo.

Rivian hired Beth Harrington as director of strategic programs, Matt Horton as executive vice president of energy and charging Solutions, Noe Mejia as senior director of service operations, Charly Mwangi as executive vice president of manufacturing engineering and Georgios Sarakakis as vice president of reliability engineering.

2020 Volkswagen Atlas Cross Sport SEL

2020 vw atlas cross sport

2020 Volkswagen Atlas Cross Sport

As I mentioned last week, I spent a few days test driving 2020 VW Atlas Cross Sport V6 SEL (premium trim), a smaller and more approachable version of the massive three-row Atlas. Over the next several weeks I plan to test and share my thoughts on a few new SUVs because as I previously mentioned — this is the summer of the reimagined road trip thanks to COVID-19.

Last November, I tested the bigger VW Atlas during a climbing and camping trip in Joshua Tree. At the time, I felt that the Atlas was simply too much car for my needs — even with a full climbing rack and camping gear stuffed inside. There are two engines offered in the Atlas Cross Sport — a 2.0-liter turbo four with produces 235 horsepower and a 3.6-liter V6 with 276 horsepower. Both versions have an 8-speed automatic transmission.

My vehicle was a pyrite silver Atlas Cross Sport with the 3.6-liter V6 and had a base price of $49,350, including the required destination fee.

 

VW packed a lot of the same features into the smaller Atlas Cross Sport V6 SEL. I was first struck by how much lower it sits, giving it a sportier stance. The ground clearance is actually the same as its bigger sibling, and yet its overall height is more than 2 inches lower. The vehicle has the same 117.3-inch wheelbase as the full-sized Atlas, but is 5.7 inches shorter.

The outcome is a more manageable ride. Despite its sportier package it didn’t feel zippier than the full sized Atlas. The performance and get-up-and-go were similar in both vehicles.

I’m a sucker for a large moonroof — at least during a road trip — and the Atlas Cross Sport didn’t disappoint. The vehicle interior is loaded with features like heated leather-wrapped steering wheel, heated and ventilated seats, and 10-way power driver’s seat. There are USB charging only ports in the front and back rows and a center console with dual USB data and charging ports and cup holders. The seats folded down easily to create loads of space — 77.8 cubic feet — for gear. If that’s not enough room, the vehicle has a roof rails that can be outfitted to hold roof boxes and bike attachments. It also has trailer hitch and can tow 5,000 pounds. Heck, there are even 11 cup holders.

And then there’s the ADAS system, which includes parking assist adaptive cruise control, forward collision warning and automated emergency braking, active blind spot monitor, lane keeping system and traffic jam assist. All of these are easy enough to locate and activate after a few moments of fiddling around.

My big quibble is how long a driver can have ACC and lane assist on without their hands on the wheel. Remember, this is a “lane assist” feature. If a driver takes their hands off the wheel while this feature is engaged, a visual warning pops up on the display after about 7 seconds. Several seconds later, an audible warning followed. The lane assist feature is consistent enough to warrant a stricter system to avoid distraction and abuse.

vw atlas cross sport screen

Overall, it’s a vehicle ready to take a family or gear on the road and has lots of the comforts one might expect for a nearly $50,000 vehicle. The sporty stance makes the Cross Sport standout, but its performance doesn’t quite match up with its visual appeal.

These free tools blur protesters’ faces and remove photo metadata

Millions have taken to the streets across the world to protest the murder of George Floyd, an unarmed black man killed by a white police officer in Minneapolis last month.

Protesters have faced both unprecedented police violence and surveillance. Just this week, the Justice Department granted the Drug Enforcement Administration, an agency typically tasked with enforcing federal drug-related laws, the authority to “conduct covert surveillance” on civilians as part of the government’s efforts to quell the protests. As one of the most tech savvy government agencies, it has access to billions of domestic phone records, cell site simulators, and, like many other federal agencies, facial recognition technology.

It’s in part because of this intense surveillance that protesters fear they could face retaliation.

But in the past week, developers have rushed to build apps and tools that let protesters scrub hidden metadata from their photos, and mask or blur faces to prevent facial recognition systems from identifying protesters.

Everest Pipkin built a web app that strips images of their metadata and lets users blur faces — or mask faces completely, making it more difficult for neural networks to reverse blurring. The web app runs entirely in the browser and doesn’t upload or store any data. They also open-sourced the code, allowing anyone to download and run the app on their own offline device.

i built a tool for quickly scrubbing metadata from images and selectively blurring faces and identifiable features. it runs on a phone or computer, and doesn’t send info anywhere.

process your images so that you and others are safe:https://t.co/GbQu5ZweDq pic.twitter.com/jKjABTgPRX

— everest (@everestpipkin) May 31, 2020

Pipkin is one of a few developers who have rushed to help protesters protect their privacy.

“I saw a bunch of discourse about how law enforcement is aggregating videos of the protests from social media to identify protesters,” developer Sam Loeschen told TechCrunch. He built Censr, a virtual reality app that works on the iPhone XR and later, which masks and pixelates photos in real-time.

The app also scrubs images of metadata, making it more difficult to identify the source and the location of the masked image. Loeschen said it was an “really easy weekend project.” It’s currently in beta.

📣📣 Announcing censr: a simple camera app for protecting your identity!

available for iPhone XR and up

distributing to protestors and press through TestFlight. Send me a DM for the link! pic.twitter.com/J1Znd2ZKqN

— Sam Loeschen (@polygone_) June 5, 2020

Noah Conk built an iPhone Shortcut that uses Amazon’s facial recognition system and automatically blurs any faces it detects. Conk said in a tweet there was no way to blur images on the device but that he does not save the image.

The idea is smart, but it does mean any photos uploaded could theoretically (and if stored) be obtained by law enforcement with a legal order. You also need to “allow untrusted shortcuts”, which could open the door to potentially malicious shortcuts. Know the risks before allowing untrusted shortcuts, and keep it disabled when you don’t need it.

Helping protesters and others blur and anonymize photos is an idea that’s taking off.

Just this week, end-to-end encrypted messaging app Signal included its own photo blurring feature, one that couldn’t come soon enough as its user base spiked thanks to the massive adoption since the protests started.

Signal founder Moxie Marlinspike said in a blog post that the move was to help “support everyone in the streets,” including those protesting in the U.S. and around the world, in many cases defying social distancing rules by governments put in place to slow the spread of the coronavirus pandemic.

“One immediate thing seems clear: 2020 is a pretty good year to cover your face,” said Marlinspike.

Fast-growing Madison Reed is eyeing men’s hair next; “We’re going to blow the doors off that market”

Amy Errett’s company, Madison Reed, sells women’s in-home hair coloring products. It may not sound like a glamorous business but, as it turns out, it’s a very durable one, done the right way. Not only has the seven-year-old outfit been slowly chipping away at the dominant personal care giants like L’Oreal that have long controlled what’s currently a $30 billion market, but during one of the most dramatic economic downturns of the past century, it has been attracting new customers.

In fact, Errett — who was previously a VC with Maveron Ventures and has a side hustle as a venture partner with True Ventures — says the 300-person company is seeing revenue in excess of $100 million per year and that it will be profitable in the second half of this year. Presumably, that makes it a likely candidate for an IPO in the not-too-distant future.

We asked Errett earlier this week for an update on the business, which has raised $125 million to date from investors, including True Ventures, Norwest Venture Partners, and Comcast Ventures. Our chat has been edited for length and clarity.

TC: Like a lot of direct-to-consumer brands, you more recently began opening real-world stores — color bars. How many did you have up and running before COVID-19 took hold?

AE: We had 12. We are reopening them now with 20 [because we had] eight that never got opened in March, April and May.  We’ll end the year with 25.

TC: Are they just scattered around the U.S.?

AE: They’re in hubs that we have selected based on the demographics of the women that live in those hubs and what we know from our online business. So they are in Northern California, where we’re headquartered. They’re New York, Dallas, Houston, and the Washington D.C. area. And we’re reopening in Atlanta, adding more in Dallas and Houston, and by year end, we’ll be in Miami and Denver.

TC: Can you comment on the financial metrics of the company? At one point, we’d read the company was doing around $50 million annually with 78% gross margins.

AE: The product margin of the business is in excess of 80%, meaning the actual product; the gross margin of the business, meaning fully loaded, is 60%. The growth has been amazing. We have 300,000 subscribers now, and we’re ahead of 2x the financials [you stated]. We’re a private company, so I don’t disclose [specifics] but we will be profitable the second half of this year.

TC: Obviously, you’ve captured some new customers who couldn’t go to a salon during this national lockdown. What percentage of your overall business do those 300,000 subscribers represent?

AE: It moves from day to day. So 52% of women in the U.S. color exclusively at home; 48% go to salons, some to our color bars; then 25% are called duelists. They’re excessively gray, or they want to stretch out salon appointments, so they do their hair at home [in between bookings].

Typically, 60% of the people that come to us that are salon goers, and 50% are home users. During the surge, the numbers did tip in the direction of 70% of the people that were coming to us were salon goers because they had no other place to go. The good news is that we are retaining an enormous amount of them. The average [subscriber] orders from us every six weeks, then we have people who buy a single box but there are serial one-timers who act like subscribers, so these are startlingly sustainable cohorts compared to typical D2C businesses.

TC: So you didn’t lay off anyone even as you were closing these color bars?

AE: I think seven employees decided they had kids at work and couldn’t even work on a distributed work basis, but we have not done any furloughing. We closed all of our color bars around March 15. . . and we moved all of our in store colorists to our call center. We had to buy and send headsets to everyone at home, teach them about all of the technology support in customer service, which is very different than the skills you’d use working in the store. And away we went.

[Everyone at our call center] was already a certified licensed colorist as our sale is a very technical sale. Every woman in the world has at least five bad hair stories, so we put what I call a belt and suspenders around the advice because the most important thing for a customer at Madison Reed is to get the color right. You get one shot.

TC: States are reopening. As colorists return to your stores, what precautions are you taking, and how uniform are your processes across different states?

ER:  We are reopening stores, at first with retail only [where] we’ll get the bag and bring it out to you, and [over time] with sensible scheduling. We don’t know when we’ll go back to every chair.

And we’re taking the most stringent guidelines of any state and laying that across the entire system. So even if a state says that a client doesn’t need to wear a mask, we’re wearing masks and our clients are wearing masks. Some people don’t want to do that. That’s okay. Then we’re not the right place for people to come if that’s true [because] our clients’ and our team members’ safety comes first.

TC: Last year, you announced a plan to roll out 600 stores, 100 of which would be operated by the company and 500 that were to be franchised. Is it fair to say that those plans are on hold and, if so, are they perhaps permanently on hold?

ER:  We were just starting to sell franchises in February. We actually had our first set of meetings with potential franchisees and we were about to file the documentation that one needs to file for disclosure of franchises — then this happened. And we made a decision right now that for the rest of this year, we’re pushing that decision off. We have not decided whether that’s final or not.

I think one of the things that I’ve learned through all of this is that making big, broad decisions right now isn’t the smartest thing a CEO can do. The world is just in flux. I can’t tell you with certainty what date we can take people back into our headquarters. I can’t tell you with any certainty if there [will be a] vaccine or a drug protocol or if it’s going to spread again or there will be hotspots. I can’t tell you, and I don’t think anybody can.

TC: Given your traction, is there any reason your next funding event wouldn’t be a a public offering?

ER: This is a massive category that has been widely overlooked. And when you look at the size of the prize — $15 billion alone in the U.S., with repetitive purchase patterns – – it has all the characteristics of a successful–

I’m an investor [too]. I was a GP and open and ran Maveron’s office in the Bay Area. Connie, you and I probably first met while I was a VC, having a more relaxing life. I’m also a partner at True, so I do invest as well as part of the investment team. And so I’m actually just commenting with that hat on. Like, 80%-plus of our revenues are recurring in this company. At our color bars, we’re the only people who have the ability to use our own product.

TC: Meaning?

The stylist is never going to give the product to most women going to a salon today. They’re never going to say, ‘Oh, you’re going on vacation? Take this home with to you.’ I use Madison Reed and I can walk into a Madison Reed color bar and get the same consistency. The same exact color that I could take home, someone’s going to apply for me. That is a game changer in this industry.

We are the only people who are agnostic as to whether you want us to color your hair [in a store] or you do it at home. If you look at L’Oreal, 85% of its business is selling tubes of color to stylists in salons. It is not a direct relationship with a consumer. The direct relationship with the consumer is the box sitting at Walgreens, which is a very small percentage of their business and it’s not a percentage they’re [focused on] because the margins are so thin. Remember, they’re charging $10; I’m charging $25.

The secret sauce here is that L’Oreal’s and Unilever’s professional channel [creates] a conflict for them to innovate directly, based on technology or otherwise, to the direct consumer.

TC: Do you see them moving in your direction?

They are smart and they can decide that they’re going to come after us in different ways, and that’s fine. I’ll take the customer service, the relationship to the client, the product innovation, the way that we lead with mobile technology first any single day.

TC: Speaking of these giants, how many products does Madison Reed sell currently, and what might you roll out that would surprise customers?

AE: We have about 15 products, all in the category of [ammonia-free] hair color that’s better for you, whether it’s permanent hair color, semi-permanent hair color, glosses, toners, a highlight kit with non-ammonia bleach . . .We’re also rolling out color depositing masks [that you apply in the shower] that aren’t permanent.

And then I’ll just give you this hint: right now our business is really focused on women, so you can imagine that there’s a separate gender that may color their hair. That is a market that’s just terrific, right? Just for Men?  I mean, are you kidding me? We’re going to blow the doors off that market.

India’s Reliance Jio Platforms to sell $1.2 billion stake to Mubadala

Abu Dhabi-based sovereign firm Mubadala has become the latest investor in Mukesh Ambani’s Reliance Jio Platforms, joining five American firms including Facebook and Silver Lake that have secured stakes in India’s biggest telecom operator at the height of a once-in-a-century global pandemic.

Mubadala said it had agreed to invest $1.2 billion in Reliance Jio Platforms for a 1.85% stake in the firm. The deal valued the Indian telecom operator, which launched in the second half of 2016, at $65 billion.

A subsidiary of Reliance Industries, the most valued firm in India whose core businesses are in oil refining and petrochemicals, Reliance Jio Platforms has raised $11.5 billion by selling 19% stake in the last seven weeks.

“Through my longstanding ties with Abu Dhabi, I have personally seen the impact of Mubadala’s work in diversifying and globally connecting the UAE’s knowledge-based economy. We look forward to benefitting from Mubadala’s experience and insights from supporting growth journeys across the world,” Mukesh Ambani, the chairman and managing director of Reliance Industries, said in a statement.

The announcement today further shows the appeal of Jio Platforms to foreign investors that are looking for a slice of the world’s second-largest internet market. Media reports have claimed in recent weeks that Amazon is considering buying stakes worth at least $2 billion in Bharti Airtel, India’s third-largest telecom operator, while Google has held talks for a similar deal in Vodafone Idea, the second largest telecom operator.

India has emerged as one of the biggest global battlegrounds for Silicon Valley and Chinese firms that are looking to win the nation’s 1.3 billion people, most of whom remain without a smartphone and internet connection.

Khaldoon Al Mubarak, managing director and group chief executive of Mubadala Investment Company, said, “We have seen how Jio has already transformed communications and connectivity in India, and as an investor and partner, we are committed to supporting India’s digital growth journey. With Jio’s network of investors and partners, we believe that the platform company will further the development of the digital economy.”

Mubadala, which has more than $229 billion in assets, is also an investor in AMD and Alphabet’s Waymo, and SoftBank.

The new capital should help Ambani, India’s richest man, further solidify his commitment to investors when he pledged to cut Reliance’s net debt of about $21 billion to zero by early 2021 — in part because of the investments it has made to build Jio Platforms, said Mahesh Uppal, director of Com First, a communications consultancy.

Its core business — oil refining and petrochemicals — has been hard hit by the coronavirus outbreak. Its net profit in the quarter that ended on March 31 fell by 37%.

Singapore-based caregiving startup launches Homage Health for online and home medical consultations

Homage, the Singapore-based startup that matches families and caregivers, has launched a new service that provides home medical visits, telehealth consultations and medication delivery. Called Homage Health, the service was already being developed before the COVID-19 pandemic, but co-founder and CEO Gillian Tee told TechCrunch that its launch was accelerated because many of the company’s caregiving recipients are elderly or have long-term health conditions, and are at higher risk for the disease.

Backed by investors including HealthXCapital, Alternate Ventures and KDV Capital, Homage launched in 2016 with a caregiving program that focuses on people who need long-term assisted living and rehabilitation care. This integrates with Homage Health because the platform’s caregivers, including nurses, are able to provide in-person support for online consultations with doctors and help followup on recommended healthcare regimens.

Before launching Homage Health, the startup worked with healthcare organizations to deliver mobile medical services, including doctor house calls, for its clients, and telehealth consultations as part of its COVID-19 response. Even before the pandemic, however, there was demand because many clients need regular health screenings.

“Particularly with COVID-19, as an essential service, we felt a higher impetus to ensure our care recipients can continue to gain access to in-home and caregiving services,” she said.

“A key example would be where our care recipients can receive speech therapy through teleconsultations,” she added. “For specific hallmark assessment sessions where a therapy care plan is defined, or where subsequent delivery is adjusted due to progressional improvements made, in-person sessions can be conducted, leading to best health, accessibility and cost outcomes.”

Having caregivers, medical sessions and prescriptions records on one platform also makes long-term healthcare management easier. For example, Homage can provide baseline medical assessment reports for medical and care providers.

Homage prescreens doctors before adding them to the platform. All of them are registered with the Singapore Medical Council, have a minimum of five years practicing medicine and receive medical teleconsultation training. The service can be used to diagnose common conditions, like the cold or allergies, or when prescriptions need to be refilled. It can also provide the follow-up consultations needed by people recovering from strokes or with chronic conditions like Parkinson’s disease and hypertension.

Homage Health will expand to include more rehabilitation and therapy categories. Basic teleconsultations have a flat fee of SGD $20, excluding prescriptions and delivery fees. Mobile medical services, which start at SGD $180, include at-home blood tests, home visits by doctors and minor surgery like wound care and drainage.

LanzaJet launches to make renewable jet fuel a reality

Over a fifteen year stretch, LanzaTech has developed technologies that can turn carbon emissions into ethanol that can be used for chemicals and fuel. Today, the company announced the spinout of LanzaJet alongside its corporate partners Mitsui, Suncor, and All Nippon Airways, to bring sustainable aviation fuel to the commercial market.

The new company has launched with commitments from the Japanese trading and investment company, Mitsui & Co. and Canadian oil and gas producer Suncor Energy to invest $85 million to back the first pilot and development scale facilities that LanzaJet will be constructing.

The first tranche of money, a $25 million commitment from Suncor and Mitsui will be used to build a demonstration plant that will produce 10 million gallons per year of sustainable aviation fuel and renewable diesel starting from sustainable ethanol sources.

For LanzaTech chief executive, Jennifer Holmgren, the launch of LanzaJet is the next step in the process of bringing her company’s technology, which promises to reduce greenhouse gas emissions and curb climate change by creating a more circular carbon economy, to market.

LanzaTech bills itself as a leader in gas fermentation, a process that takes industrial gases and makes sustainable fuels and chemicals from industrial off-gases; syngas generated from any biomass resources like municipal solid waste, organic industrial waste, agricultural waste; and reformed biogas. Through synthetic biology and industrial processing, the company says it can make over 100 different chemicals.

With the LanzaJet spinoff, the focus is squarely on sustainable jet fuels.

“We finished the investment side and the off-take agreements and that’s all committed,” said Holmgren. “Now we’re working on getting the feedstock… We’re making sure that we can source low-carbon intensity ethanol.”

Those suppliers of second generation cellulosic ethanol needs to meet the right carbon footprint criteria and LanzaJet is working with the relevant renewable energy standards organization to make sure that the ethanol its using has the right pedigree.

A history of innovation in second generation biofuels

Of course, some of that feedstock could come from LanzaTech itself. The Chicago-based company has been developing processes to capture emissions from power plants and other sources and convert those emissions into ethanol by injecting them into microbe-filled vats. The microbes convert the gas into ethanol which can then be used as fuel or feedstock for chemical manufacturing.

Once LanzaJet identifies its feedstock supplier, the company expects to begin working on building the demonstration facility, which should be completed by 2022, when production will begin on the first line.

In addition to its corporate partners, LanzaJet received a $14 million grant from the Department of Energy to work on the development of cellulosic ethanol manufacturing processes and the development of a biorefinery at the company’s site in Soperton, Ga.

Indeed, the whole story of LanzaTech’s fifteen year journey is woven with public private partnerships that were conducted alongside government research agencies. The conversion technology at the heart of LanzaJet’s process was the result of years of collaborative research between LanzaTech and the U.S Energy Department’s Pacific Northwest National Laboratory (PNNL).

It was the PNNL that developed the catalytic process to upgrade ethanol to alcohol-to-jet synthetic paraffinic kerosene (ATJ-SPK) that LanzaTech took from the laboratory to pilot scale.

Vintage illustration of couples walking inside chemistry beakers in front of a chemical processing plant, 1952. Screen print. (Illustration by GraphicaArtis/Getty Images)

 

Investors with benefits

For Suncor and ANA, the development of sustainable alternatives is a strategic necessity. The International Air Transport Association has committed to cut emissions in half by 2050 compared to 2005 levels and to achieve carbon-neutral growth by the end of this year.

While national lockdowns imposed earlier this year to combat the spread of COVID-19 reduced travel and dramatically cut into the emissions causing global climate change, the aviation industry will have to shift its sources of fuel consumption and invest heavily in carbon offsets if it wants to achieve its stated goals.

“ANA is thrilled to work alongside LanzaTech, Mitsui and Suncor on this new venture,” said Akihiko Miura, Executive Vice President of ANA, in a statement. “We believe that this partnership is a great step forward for carbon-neutral growth initiatives. ANA is happy to share in this innovative endeavor and to be a part of a carbon-free future in the aviation industry.”

For its part, Suncor, a Canadian oil and gas company with significant operations in that country’s controversial oil sands region, looks at LanzaTech’s LanzaJet technology as another way to diversify beyond the traditional oil and gas business.

The company has already begun installing charging stations for electric vehicles across its network of filling stations that span the breadth of Canada. With LanzaJet’s fuel, the company can add sustainable jet fuels to its services for customers at airports in Calgary, Denver, Colo., Edmonton, Montreal, and Toronto.

Its diversification comes at a time when even Suncor’s chief executive is acknowledging the transition to a different energy mix.

“While Canadian oil and gas will remain a significant part of the global energy mix for some time, we have to take advantage of new opportunities that offer attractive growth prospects,” Suncor CEO Mark Little wrote in an opinion article for Canada’s Corporate Knights magazine, Reuters reported. “The temporary economic lockdown triggered by the 2020 pandemic is giving us a glimpse into a not-too-distant future where the transformation of our energy system could disrupt demand on a similar scale.”

The company’s work with LanzaTech can also help move it toward the commitments it has made to hit emissions reductions targets associated with the Paris Accord’s two degrees celsius goals.

“We’re taking a view towards how do we think the energy transition is going to progress,” said Suncor’s vice president of strategy and corporate development, Andrea Ducore. For the company, bio-based, low-carbon fuels is one solution, Ducore said. “As the owner of Petro-Canada gas stations across Canada, we’re asking ourselves what do our customers want today and what do they want ten years from now.”

Photo: Getty Images/ipopba/iStock

Taking Flight

Leading the charge as LanzaJet rockets into the sustainable aviation fuel industry is Jimmy Samartzis, a former United Airlines executive and current boardmember at the Fermi National Accelerator Laboratory.

With experience in both technology and aviation — including a stint with the International Air Transport Association — Samartzis is well positioned to make the new company’s pitch to potential consumers.

Samartzis and Holmgren, LanzaTech’s founder, initially met when she was working at Universal Oil Products (now a subsidiary of Honeywell). Eventually the two collaborated when LanzaTech began marketing its sustainable jet fuel to companies in the industry for pilot flights nearly a decade ago.

“When we did all of that, he was one of the people at United that was involved in sustainable aviation fuel,” Holmgren recalled.

As LanzaTech searched for an executive who could take the reins at its new jet fuel initiative, Samartzis was one of the first calls that the young company made, Holmgren said.

“The launch of LanzaJet marks an historic milestone in the clean energy transition that is underway globally. I’ve been part of many renewable energy and sustainability firsts over the last decade, and this one is the most exciting,” said Samartzis, in a statement. “The commercialization of LanzaJet – built on the shoulders of LanzaTech, Suncor, Mitsui, ANA and with the support of the U.S. Department of Energy – gives our world, and aviation in particular, an important solution in shaping a cleaner future.”

While Holmgren thinks LanzaTech could be one of the main suppliers for the feedstock that LanzaJet needs to operate, she said the goal in spinning out the company was to ensure that there was broad-based demand for ethanol coming from multiple potential vendors.

One of the reasons we created LanzaJet and decoupled them from LanzaTech was because it will incentivize others to produce the right low-carbon ethanol feedstock,” said Holmgren. “If you want a low-carbon future it cannot be about LanzaTech and LanzaJet. We thought lifting that limitation was the right thing to do.”

Eventually, those fuel sources could include things like ethanol from direct air capture of carbon dioxide and other emissions that cause climate change.

“LanzaJet as an entity can drive that to incentivize producer to drive to the lowest carbon intensity ethanol to provide feedstock for aviation fuels,” said Holmgren. 

India rejects Walmart-owned Flipkart’s proposed foray into food retail business

The Indian government has rejected Flipkart’s proposal to enter the food retail business in a setback for Walmart, which owns majority of the Indian e-commerce firm and which recently counted its business in Asia’s third-largest economy as one of the worst impacted by the global coronavirus pandemic.

The Department for Promotion of Industry and Internal Trade (DPIIT), a wing of the nation’s Ministry of Commerce and Industry, told Flipkart, which competes with Amazon India, that its proposed plan to enter the food retail business violates regulatory guidelines.

Flipkart’s proposed food retail business, called Flipkart FarmerMart, cannot be structured on a 100% foreign direct investment, the Indian agency said. Rajneesh Kumar, chief corporate affairs officer at Flipkart, told TechCrunch that the company was evaluating the agency’s response and intended to re-apply.

“At Flipkart, we believe that technology and innovation driven marketplace can add significant value to our country’s farmers and food processing sector by bringing value chain efficiency and transparency. This will further aid boosting farmers’ income & transform Indian agriculture,” he added.

While announcing the plan to enter the nation’s growing food retail market, Kalyan Krishnamurthy, Flipkart Group CEO, said in October last year that the company planned to invest $258 million in the new venture.

Flipkart planned to invest deeply in the local agriculture-ecosystem, supply chain, and work with tens of thousands of small farmers, their associations, and the nation’s food processing industry, Krishnamurthy said. The food retail unit would help “multiply farmers’ income and bring affordable, quality food for millions of customers across the country.”

Several e-commerce and grocery firms in India, including Amazon, Zomato, and Grofers, have previously secured approval from New Delhi, which earlier permitted 100% foreign direct investment in food and a handful of other sectors, for entering the food retail business.

The Indian government has since revisited the guidelines to clarify that food retail, like any other e-commerce sector, can only operate as a marketplace that allows third-party sellers to engage with buyers — and not offer their own inventories, nor have equity in any of the players who sell on the platform.

Food and grocery are compelling categories for e-commerce businesses in India as it enables them to engage with their customers more frequently. According to research firm Forrester, India’s online food and grocery market remain significantly tiny, accounting for just 1% of the overall sales.

In the most recent quarterly earnings call, Walmart said limited operations at Flipkart had negatively affected the group’s overall growth. New Delhi announced one of the world’s stringent lockdowns across the nation in late March that restricted Amazon and Flipkart from delivering in many states and only sell “essential items” such as grocery and hygienic products.

India maintains the stay-at-home orders for its 1.3 billion citizens, though it has eased some restrictions in recent weeks to resuscitate the economy.

SpaceX’s astronaut launch marks the dawn of the commercial human spaceflight industry

SpaceX on Saturday launched two NASA astronauts aboard its Crew Dragon spacecraft, and the accomplishment is a tremendous one for both the company and the U.S. space agency. At a fundamental level, it means that the U.S. will have continued access to the International Space Station, without having to rely on continuing to buy tickets aboard a Russian Soyuz spacecraft to do so. But it also means the beginning of a new era for the commercial space industry – one in which private companies and individual buying tickets for passenger trips to space is a consistent and active reality.

With this mission, SpaceX will complete the final step required by NASA to human-rate its Falcon 9 and Crew Dragon spacecraft, which means that it can begin operationally transporting people from Earth essentially as soon as this mission concludes (Crew Dragon still has to rendezvous with the space station tomorrow, and make its way back to Earth with astronauts on board in a few weeks). Already, SpaceX has signed an agreement with Space Adventures, a private space tourism booking company that has previously worked with Roscosmos on sending private astronauts to orbit.

SpaceX wants to start sending up paying tourists on orbital flights (without any ISS stops) starting as early as next year aboard Crew Dragon. The capsule actually supports up to seven passengers per flight, though only four seats will ever be used for official NASA crew delivery missions for the space station. SpaceX hasn’t released pricing on private trips aboard the aircraft, but you can bet they’ll be expensive since a Falcon 9 launch (without a human rated capsule) costs around $60 million, and so even dividing that by seven works out to a high price of entry.

So this isn’t the beginning of the era of accessible private spaceflight, but SpaceX is the first private company to actually put people into space, despite a lot of talk and preparatory work by competitors like Virgin Galactic and Blue Origin. And just like in the private launch business, crossing the gulf between having a private company that talks about doing something, and a company that actually does it, will absolutely transform the space industry all over again.

Here’s how.

Tourism

SpaceX is gearing up to launch tourists as early as next year, as mentioned, and while those tourists will have to be deep-pocketed, as eight everything that SpaceX does, the goal is to continue to find ways to make more aspects of the launch system reusable and reduce costs of launch in order to bring prices down.

Even without driving down costs, SpaceX will have a market, however niche, and one that hasn’t yet really had any inventory to satisfy demand. Space Adventures has flown a few individuals by buying tickets on Soyuz launches, but that hasn’t really been a consistent or sustainable source of commercial human spaceflight, and SpaceX’s system will likely have active support and participation from NASA.

That’s an entirely new revenue stream for SpaceX to add to its commercial cargo launches, along with its eventual launch of commercial internet service via Starlink. It’s hard to say yet what kind of impact that will actually have on their bottom line, but it could be big enough to have an impact – especially if they can figure out creative ways to defray costs over successive years, since each cut will likely considerably expand their small addressable audience.

SpaceX’s impact on the launch business was to effectively create a market for small satellites and more affordable orbital payloads that simply didn’t make any economic sense with larger existing launch craft, most of which were bankrolled almost entirely by and for defence and NASA use. Similarly, it’s hard to predict what the space tourism market will look like in five years, now that a company is actually offering it and flying a human-rated private spacecraft that can make it happen.

Research

Private spacefarers won’t all be tourists – in fact, it could make a lot more financial sense for the majority of passengers to and from orbit to be private scientists and researchers. Basically, imagine a NASA astronaut, but working for a private company rather than a publicly-funded agency.

Astronauts are essentially multidisciplinary scientists, and the bulk of their job is conducing experiments on the ISS. NASA is very eager to expand commercial use of the ISS, and also to eventually replace the aging space station with a private one of which they’re just one of multiple customers. Already, the ISS hosts commercial experiments and cargo, but if companies and institutions can now also send their own researchers as well, that may change considerably how much interest their is in doing work on orbit, especially in areas like biotech where the advantages of low gravity can produce results not possible on Earth.

Cost is a gain a significant limiting factor here, since the price per seat will be – no pun intended – astronomical. But for big pharma and other large companies who already spend a considerable amount on R&D it might actually be within reach. Especially in industries like additive manufacturing, where orbit is an area of immense interest, private space-based labs with actual rotating staff might not be that farfetched an idea.

Marketing & Entertainment

Commercial human spaceflight might actually be a great opportunity to make actual commercials – brands trying to outdo each other by shooting the first promo in space definitely seems like a likely outcome for a Superbowl spot. It’s probably not anyone’s priority just now, given the ongoing global pandemic, but companies have already discussed the potential of marketing partnerships as a key driver of real revenue, including lunar lander startup ispace, which has signed a number of brand partners to fund the build and flight of its hardware.

Single person rides to orbit are definitely within budget for the most extreme marketing efforts out there, and especially early on, there should be plenty of return on that investment just because of how audacious and unique the move is. The novelty will likely wear off, but access to space will remain rarified enough for the forseeable future that it could still be part of more than a few marketing campaigns.

As for entertainment, we’ve already seen the first evidence of interest there – Tom Cruise is working on a project to be filmed at least in part in space, apparently on board the International Space Station. SpaceX is said to be involved in those talks, and it would make a lot of sense for the company to consider a Crew Dragon flight with film crew and actors on board for both shooting, and for transportation to ‘on location’ shoots on the ISS.

Cruise probably isn’t the only one to consider the impact of a space-based motion picture project, and you can bet at least one reality show producer somewhere is already pitching ‘The Bachelor’ in space. Again, it’s not going to be within budget for every new sci-fi project that spins up, but it’s within blockbuster budget range, and that’s another market that grew by 100% just by virtue of the fact that it didn’t exist as a possibility before today.

Novel industry

It’s hard to fully appreciate what kind of impact this will have, because SpaceX has literally taken something that previously wasn’t possible, and made it available – at costs that, while high, aren’t so high as to be absurd. As with every other such expansion, it will likely create new and innovative opportunities that haven’t even been conceived, especially once the economics and availability of flights, etc. are clarified. GPS, another great space-based innovation, formed the bedrock of an industry that changed just about every aspect of human life – private commercial spaceflight could do the same.

Amid unprecedented growth on its platform, Acorns cuts roles and shuts down an office

Acorns, which helps millions of people invest their spare change in the stock market, has laid off between 50 to 70 people, TechCrunch has learned from multiple sources.

The Irvine, Calif.-based company would not confirm the total number of people laid off, but did confirm that there were cuts at the company as a result of broader business changes.

The news emerged days after the fintech company closed its Portland office earlier this week, one of four offices the company maintained. While Acorns offered Portland employees an opportunity to relocate to its Irvine headquarters, some roles were terminated as part of the relocation, the company said.

Employees laid off largely were members of Acorns’ support team. And the internal cuts are related to an external partnership with TaskUs, which out-sources customer care and support needs for other businesses. Acorns will bring on roughly 80 new TaskUs support roles in the next year, which the company said would grow its support team, just not its internal staff.

The internal Acorns support team will handle high-touch customer care situations via phone, while external roles will handle email support.

Beyond support roles, Acorns cut some people from various teams across the company.

Acorns has found unprecedented growth as the coronavirus brings new users into its world of investing and saving money. The company recently hit a milestone of 7 million sign-ups, continuing the trend that trading apps are benefiting from a down market.

At the same time, Acorns also launched a debit card that depends on users spending in order to make sense as a business product. Payment processing is a risky space to play in right now because consumer spending has nosedived due to shelter in place orders. It could be a weak spot for the company at the moment. Earlier today, Brex laid off 62 staff members, just one week after raising $150 million in venture capital money.

So, why does a company like Acorns, that is facing immense growth, need to do layoffs? Even if you’re winning right now, the pandemic and potential of an extended recession is forcing businesses to reevaluate the way they’re spending money. In Acorns’ case, it will have more headcount next year than it does right now. But dig a little deeper, and its choice to outsource roles and shut down an office means that growing right now can come at the cost of slimming down.

Investors in Acorns include PayPal, DST Global, Rakuten, Greycroft and Bain Capital.

Magic Leap CEO Rony Abovitz is out

Magic Leap talked a big game, and few were more responsible for fostering a cult of hype and excitement around its vision of the future than the company’s founder and CEO Rony Abovitz. Today, the CEO announced that the company has indeed secured a new bout of funding, but that the company will be attempting to mount a major turnaround without him at the helm.

According to a memo sent to staff, first obtained by Business Insider, Abovitz will continue on with the company through a transition period but that the company has been “actively recruiting candidates” to replace him.

“We have closed significant new funding and have very positive momentum towards closing key strategic enterprise partnerships,” the staff memo reads. “As the Board and I planned the changes we made and what Magic Leap needs for this next focused phase, it became clear to us that a change in my role was a natural next step. I discussed this with the Board and we have agreed that now is the time to bring in a new CEO who can help us to commercialize our focused plan for spatial computing in enterprise.”

The announcement comes after the augmented reality startup announced substantial layoffs earlier this month and announced that it would be pivoting from developing consumer products to fully focusing on its enterprise business. It was reported earlier this month that Magic Leap had locked down an additional $350 million in funding which would help the startup avoid further layoffs.

The startup has raised billions of venture capital funding under Abovitz’s tenure, but the startup has also undergone plenty of hurdles as they attempted to outdo Apple, Microsoft and Facebook in the race to create a mainstream AR device. Abovitz always seemed to have a consumer focus for his company, so it’s unsurprising that the company’s board would look elsewhere as the company shifts focus to enterprise.

Dishcraft Robotics is using robots to save reopening restaurants from creating more waste

Dishcraft Robotics has a simple pitch to corporate kitchens and restaurants that could potentially save tons of single use plastic, non-compostable takeout containers, dishware and cutlery from ending up landfills.

Use its cleaning service that will drop off all the clean, reusable dishware and cutlery a restaurant or corporate kitchen could possibly need in the morning and pick up all the dirty dishes, cups and silverware that the foodservice location uses throughout the day.

“In this model we take care of the collection and cleaning of dishes,” said Linda Pouliot, the company’s founder and chief executive officer.

That’s the offer. Behind the scenes the company will use its compliment of robots that can clean up 10,000 pieces of dishware or cutlery to quickly and efficiently clean up the mess.

The restaurants, Pouliot says, have more inventory than they could possibly need — even as Dishcraft only runs one drop-off and pick up service throughout the day at corporate offices.

The company has just announced a $20 million round of funding that will expand its service beyond the corporate kitchen and into communities that are worried about the waste produced by the explosion in takeout that’s occurred as a result of the COVID-19 epidemic.

A green business model is at the heart of Dishcraft’s new pitch. The company launched in June of last year with a massive dishwashing robot that it was debating selling to kitchens around the country. Now it’s settled on a services approach that makes its robotic-powered dishwashers an easier sell to businesses. “We saw that cloud kitchens took off… we’re the same. We’re cloud dishwashing,” said Pouliot.  

The company has a collection system that works in a 25 mile radius and uses biodiesel to power its fleet of trucks that pickup and deliver the clean dishes, according to Pouliot.

The founder of an automated floor cleaning robotic service, Neato Robotics, Pouliot has a long history of applying high tech solutions to real world problems.

Along with co-founder Paul Birkmeyer, the company’s chief technology officer and a former employee of SRI International, Pouliot founded Dishcraft in 2015. The two discussed the opportunity for a robotics business cleaning dishes over lunch at a restaurant. The restaurant’s dishwasher had called out sick for the day and the head chef came over to spend a few minutes with the two entrepreneurs discussing the pains of the dishwashing business, Pouliot recalled.

The company’s technology involves the integration of sensors, computer vision, machine learning, UV lighting, and innovative mechanics to autonomously sort, scrub, inspect, and rack dishware, the company said. Plates are cleaned and inspected multiple times using sensors that can spot miniscule particles invisible to the human eye, the company said.

Current customers include Affirm and foodservice company Guckenheimer, and the company said it would announce others soon.

Image credit: Dishcraft Robotics

After an early investment from Lemnos Labs, the company moved from the garage where it had been prototyping its robotic designs and moved into Lemnos’ offices.

Pouliot is a 15 year robotics industry veteran, and after Neato Robotics knew that the cleaning industry represented a special niche for robotics that not many other companies were pursuing.

Dishcraft currently works out of a cleaning facility in San Carlos, Calif. and will use some of the capital it raised to expand the facility as it builds out its to-go solution for cleaning reusable containers. “Communities and cities are interested in more sustainable solutions,” said Pouliot, and that interest is driving demand for Dishcraft.

“For example… Alameda, Calif. has 300 restaurants and 100 have signed up for a zero waste initiative,” Pouliot said, which is creating interest at the city government level for Dishcraft’s services.

“With a cafeteria we have a collection system and every day we pick up the dishwares,” she said. “With cities there will be a specified drop off point and a system that will take all the wares back to our centralized hub and clean them and inspect them and deliver clean wares the following day.”

The new $20 million will be used to expand the number of hubs. Funding for the new round was led by new investor Grit Ventures. Returning investors First Round Capital, Baseline Ventures, Fuel Capital, and Lemnos also participated in the round, according to the company. As a result of the funding, Marc Randolph, co-founder and former CEO of Netflix, and Kelly Coyne, founder and partner at Grit Ventures, will join Dishcraft’s board of directors. 

So far, Dishcraft has raised $46 million in venture funding.

“Even pre-COVID, Dishcraft was on track to be a significant force of disruption in the world of food services,” said Kelly Coyne, founder and partner at Grit Ventures, in a statement. “In recent years, robotics has introduced major operational improvements in traditional industry. In particular, firms like Dishcraft that leverage RaaS (robotics-as-a-service) have been able to rapidly gain traction and sell effortlessly into long-stagnant industries.” 

Ola Electric acquires Etergo, to launch own line of electric two wheelers this year

Ola Electric, the EV business that spun out of the ride-hailing giant Ola last year, has acquired an Amsterdam-based electric scooter startup as the Indian firm looks to locally produce and launch its own line of two wheelers as soon as this year.

The Indian firm said Wednesday it had acquired Etergo, a Dutch firm that has built a scooter that uses swappable, high energy battery that delivers a range of up to 240 km (149 miles).

Ola did not reveal the terms of the deal, but Etergo was valued at around $90 million in its previous financing round, a person familiar with the matter told TechCrunch. The six-year-old startup had raised €20.3 million from the market before its acquisition today, according to Crunchbase.

Etergo’s electric-powered two wheeler

The Indian firm, which gained the unicorn status last year when it raised $300 million, said it plans to launch its electric two wheeler in India next year, though TechCrunch understands that the company is internally hoping to reach the milestone by end of this year.

“This acquisition will further bolster Ola Electric’s strong engineering and design capabilities with the Etergo team’s extensive vehicle development experience with leading automotive companies like Tesla, General Motors, Ferrari, Jaguar, and BMW. Etergo’s team will continue to be based out of Amsterdam as they join Ola Electric,” it said in a statement.

More to follow…

China’s food delivery giant Meituan hits $100B valuation amid pandemic

Meituan’s shares hit a record high on Tuesday, bringing its valuation to over $100 billion.

The Hong Kong-listed giant, which focuses on food delivery with smaller segments in travel and transportation, is the third Chinese firm to reach the landmark valuation. Tencent and Alibaba respectively topped the number back in 2013 and 2014.

Tencent-backed Meituan saw shares rally to HK$138 ($17.8) on Tuesday after it earmarked a smaller-than-projected decrease in revenue during Q1 and a net loss of 1.58 billion yuan ($220 million) after three consecutive profitable quarters.

While nationwide lockdowns might have increased the need for food delivery, Chinese consumers have been tightening their belt amid a worsening economy triggered by COVID-19. Overall food delivery transactions slid as a result. Meituan also had to pay incentives to delivery riders who work during the pandemic and subsidies to merchants to keep their heads above the water.

There’s one silver lining: While Meituan’s daily average number of transactions dropped by 18.2% to 15.1 million, the average value per order jumped by 14.4% as delivered meals, which were conventionally seen as a habit for office workers, became normalized among families that stayed at home. In the first quarter, a large number of premium restaurants joined Meituan’s food delivery services, and they could continue to attract bigger ticket purchases in the post-pandemic era.

All in all, though, Meituan executives warned of the uncertainties brought by COVID-19. “Moving on to the remaining of 2020, we expect that factors including the ongoing pandemic precautions, consumers’ insufficient confidence in offline consumption activities and the risk of merchants’ closure would continue to have a potential impact on our business performance.”

Work collaboration unicorn Notion is blocked in China

Notion, the fast-growing work collaboration tool that recently hit a $2 billion valuation, said on Twitter Monday that its service is blocked in China.

The productivity app has attracted waves of startups and tech workers around the world — including those in China — to adopt its all-in-one platform that blends notes, wikis, to-dos, and team collaboration. The four-year-old San Francisco-based app is widely seen as a serious rival to Evernote, which started out in 2004.

Notion said it is “monitoring the situation and will continue to post updates,” but the timing of the ban noticeably coincides with China’s annual parliament meeting, which began last week after a two-month delay due to the COVID-19 pandemic. Internet regulation and censorship normally toughen around key political meetings in the country.

Notion could not be immediately reached for comment.

For Notion and other apps that have entered the public eye in China but remained beyond the arm of local laws, a looming crackdown is almost certain. The country’s cybersecurity watchdog could find Notion’s free flow of note-sharing problematic. Some users have even conveniently turned the tool’s friendly desktop version into personal websites. If Notion were to keep its China presence, it would have to bow to the same set of regulations that rule all content creation platforms in China.

Its predecessor Evernote, for example, established a Chinese joint venture in 2018 and released a local edition under the brand Yinxiang Biji, which comes with compromised features and stores user data within China.

Rivalry in work collaboration

Just before its ban in China, Notion surged on May 21 to become the most-downloaded productivity app in the domestic Android stores, according to third-party data from App Annie. The sudden rise appears to be linked to its Chinese copycat Hanzhou (寒舟), which stirred up controversy within the developer community over its striking resemblance to Notion.

In an apologetic post published on May 22, Xu Haihao, the brain behind Hanzhou and a former employee of ByteDance-backed document collaboration app Shimo, admitted to “developing the project based on Notion.”

“We are wrong from the beginning,” wrote Xu. “But I intended to offend nobody. My intention was to learn from [Notion’s] technology.” As a resolution, the developer said he would suspend Hanzou’s development and user registration.

Some of the largest tech firms in China are gunning for the workplace productivity industry, which received a recent boost during the coronavirus crisis. Alibaba’s Dingtalk claimed last August that more than 10 million enterprises and over 200 million individual users had registered on its platform. By comparison, Tencent’s WeChat Work said it had logged more than 2.5 million enterprises and some 60 million active users by December.

Hackers release a new jailbreak that unlocks every iPhone

A renowned iPhone hacking team has released a new “jailbreak” tool that unlocks every iPhone, even the most recent models running the latest iOS 13.5.

For as long as Apple has kept up its “walled garden” approach to iPhones by only allowing apps and customizations that it approves, hackers have tried to break free from what they call the “jail,” hence the name “jailbreak.” Hackers do this by finding a previously undisclosed vulnerability in iOS that break through some of the many restrictions that Apple puts in place to prevent access to the underlying software. Apple says it does this for security. But jailbreakers say breaking through those restrictions allows them to customize their iPhones more than they would otherwise, in a way that most Android users are already accustomed to.

The jailbreak, released by the unc0ver team, supports all iPhones that run iOS 11 and above, including up to iOS 13.5, which Apple released this week.

Details of the vulnerability that the hackers used to build the jailbreak aren’t known, but it’s not expected to last forever. Just as jailbreakers work to find a way in, Apple works fast to patch the flaws and close the jailbreak.

Security experts typically advise iPhone users against jailbreaking, because breaking out of the “walled garden” vastly increases the surface area for new vulnerabilities to exist and to be found.

The jailbreak comes at a time where the shine is wearing off of Apple’s typically strong security image. Last week, Zerodium, a broker for exploits, said it would no longer buy certain iPhone vulnerabilities because there were too many of them. Motherboard reported this week that hackers got their hands on a pre-release version of the upcoming iOS 14 release several months ago.

‘Fallout Shelter’ joins Tesla arcade in latest software update

Nearly a year ago, Todd Howard, the director of Bethesda Games, said that the company’s “Fallout Shelter” game would be coming to Tesla displays. It arrived, via the 2020.20 software update, this week, which was first noted at driver’s platform Teslascope.

Fallout Shelter is the latest — and one of the more modern games — to join Tesla’s Arcade, an in-car feature that lets drivers play video games while the vehicle is parked. It joins 2048, Atari’s Super Breakout, Cuphead, Stardew Valley, Missile Command, Asteroids, Lunar Lander and Centipede. The arcade also includes a newly improved (meaning more difficult) backgammon game as well as chess.

The 2020.20 software update that adds the game, along with a few other improvements, hasn’t reached all Tesla vehicles yet, including the Model 3 in this reporter’s driveway (that vehicle has the prior 2020.16.2.1 update, which includes improvements to backgammon and a redesigned Tesla Toybox).

However, YouTube channel host JuliansRandomProject was one of the lucky few who did receive it and released a video that provides a look at Fallout and how it works in the vehicle. Roadshow also discovered and shared the JuliansRandomProject video, which is embedded below.

Fallout Shelter is just one of the newer features in the software update. Some functionality was added to the steering wheel so owners can use the toggle controls to play, pause and skip video playback in Theater Mode, the feature that lets owners stream Netflix and other video (while in park).

Tesla also improved Trax, which lets you record songs. Trax now includes a piano roll view that allows you to edit and fine tune notes in a track.

Steve Case and Clara Sieg on how the COVID-19 crisis differs from the dot-com bust

Steve Case and Clara Sieg of Revolution recently spoke on TechCrunch’s new series, Extra Crunch Live. Throughout the hour-long chat, we touched on numerous subjects, including how diverse founders can take advantage during this downturn and how remote work may lead to growth outside Silicon Valley. The pair have a unique vantage point, with Steve Case, co-founder and former CEO of AOL turned VC, and Clara Sieg, a Stanford-educated VC heading up Revolution’s Silicon Valley office.

Together, Case and Sieg laid out how the current crisis is different from the dot-com bust of the late nineties. Because of the differences, their outlook is bullish on the tech sector’s ability to pull through.

And for everyone who couldn’t join us live, the full video replay is embedded below. (You can get access here if you need it.)

Case said that during the run-up to the dot-com bust, it was a different environment.

“When we got started at AOL, which was back in 1985, the Internet didn’t exist yet,” Case said. “I think 3% of people were online or online an hour a week. And it took us a decade to get going. By the year 2000, which is sort of the peak of AOL’s success, we had about half of all the U.S. internet traffic, and the market value soared. That’s when suddenly, when any company with a dot-com name was getting funded. Many were going public without even having much in the way of revenues. That’s not we’re dealing with now.”

Venture partner Sieg agreed, pointing to the number of funds currently available in the venture capital asset class. Unlike twenty years ago when valuations were based on unsubstantiated future growth, the current crisis happened during a period of steady expansion. Because of this, funds and startups are in a better position to make it to the other side of this pandemic, she said.

Sieg pointed to one of Revolution Venture’s portfolio companies, Mint House, which aims to build a better temporary housing experience for business travelers. The company raised $15 million in May 2019, and according to Sieg, it focused on being capital-efficient from the start instead of chasing growth for its own sake. She said the company went from almost 90% occupancy to zero overnight and yet now, after a slight pivot, it’s back to a 60-65% occupancy rate by moving quickly to providing housing to healthcare workers.

The company’s strong balance sheet gave it room to pivot, she said.

And yet there are challenges. Sieg pointed out that for the first time in Revolution’s history, the firm’s funds are investing without meeting founder teams in person. It’s a longer process than the old way, she said, though noted that it levels the playing field for founders outside of the traditional circle. Investors have more time on their hands now, so she encourages founders to be persistent and keep reaching out for virtual meetings.

“I think it is important to take advantage of this time where you have people sitting around with more availability on their calendars and more willingness to engage,” Sieg said. “The nice thing about removing some of the in-person components is there’s a stronger focus on market opportunity, product and company, and the real metrics that [founders] can show. Removing some of that person-to-person noise and just focusing on the business means that a lot of these biases are going to be overcome.”

The pair said they believe some companies will have a strong tailwind coming out of this crisis. Case and Sieg pointed to trends that are rapidly accelerating: e-commerce, telehealth and direct-to-consumer companies. In this new environment, Case said location will matter more than ever. While he points out there are many smart people in Silicon Valley, there’s a reason why, for example, Monsanto is in St. Louis. “Some of the smartest people around healthtech are in Minneapolis where UnitedHealth is, or Rochester, Minnesota where Mayo is, or with MD Anderson in Texas or in Ohio with Cleveland Clinic or Johns Hopkins in Baltimore.”

“There are also specific categories that resonate now more than ever,” Sieg said. “We’re investors in a company called Bright Cellars that ships wine to your house. Obviously, people are staying at home, and they’re drinking a lot more. And [Bright Cellars] has been positively impacted by [stay-at-home orders] from a revenue perspective. There’s a company like Bloomscape, which is in Detroit, Michigan, and they’ve had their challenges with keeping their supply chain up and running, but they managed to do so. People are finding a lot of comfort in gardening and taking care of plants because it is something that can be done at home and feel like you’re engaged with something that’s alive, and you see the progression when you’re stuck at home.”

Steve Case is looking at founders who are managing today, but also imagining for the future. One example is Clear, he said, which fast-tracked the development of a flight pass for healthcare workers. And now, when people start flying again, the company will return to its strong core business while having additional momentum around this new business that provides passes to hospitals and arenas. This wouldn’t have happened if it was not for this crisis, Case said.

“I think [the COVID-19 crisis] is one of those shake-the-snowglobe moments where things are being reassessed,” Case said, “and one of the areas I think it’s going to accelerate is what I’ve called the ‘third wave of the internet.’”

Case explained he wrote about this new phase a few years ago in his book, aptly titled “The Third Wave: An Entrepreneur’s Vision of the Future.” According to Case’s thesis, the first wave was when AOL and other providers were introducing and onboarding users to the Internet. The second wave was when apps and software could be created using existing infrastructure. And now, according to this thought, the internet is meeting the real world with new solutions. The current crisis is accelerating the development of telehealth, smart cities, and industries in regulated sectors.

“Perseverance is going to matter more,” Case said. “The tough problems don’t lend themselves to overnight successes. It’s going to be a slog, and kind of like AOL of a 10-year in the making overnight success.”

The dot-com bust upended a lot of startups, and the COVID-19 crisis will do the same though with different results.

“The third wave of the Internet is when the Internet meets the real world, Steve Case said. “It’s things like health care, food, smart cities, and many other areas that haven’t changed much in the first and second waves that are going to change a lot in the third wave. We believe it’s going to be a different playbook.”


Daily Crunch: Facebook embraces remote work

Facebook takes more steps to support and expand a remote workforce, IBM announces layoffs and TechCrunch’s big annual conference is going virtual. (I know, I know — I have mixed feelings about it, too.)

Here’s your Daily Crunch for May 22, 2020.

1. Facebook makes big remote work moves with plan for new hubs in Dallas, Denver and Atlanta

Facebook CEO Mark Zuckerberg estimated that over the course of the next decade, half of the company could be working fully remotely. As the next step toward that goal, Facebook will be setting up new company hubs in Denver, Dallas and Atlanta.

For Menlo Park employees looking for greener pastures, there’s one sizable catch. Starting on January 1 of next year, the company will localize all salaries, which means scaling compensation to the local cost of living.

2. IBM confirms layoffs are happening, but won’t provide details

IBM isn’t sharing details, but analyst Patrick Moorhead said. “I’m hearing it’s a balancing act between business units. IBM is moving as many resources as it can to the cloud.”

3. TechCrunch Disrupt 2020 is going virtual

As you can imagine, this is largely due to the impact that the coronavirus has had on the world. But it also gives us a chance to make our event even more accessible to more people than ever before, and Disrupt will now stretch over five days — September 14-18.

4. Netflix to start cancelling inactive customers’ subscriptions

Netflix said it will ask customers who have not watched anything in a year or more if they want to maintain their subscription. If it doesn’t hear back, it will cancel their membership.

5. API startups are so hot right now

Alex Wilhelm looks at FalconX, Treasury Prime, Spruce, Daily.co, Skyflow and Evervault — all API-focused startups that are experiencing some early success. (Extra Crunch membership required.)

6. Magic Leap has apparently raised another $350 million, in spite of itself

Magic Leap has reportedly received a $350 million lifeline, a month after slashing 1,000 jobs and dropping its consumer business. Noted by Business Insider and confirmed by The Information, CEO Rony Abovitz sent a note to staff announcing the funding, courtesy of unnamed current and new investors.

7. Cake brings a Swedish take on e-motorcycle design to the US

The Stockholm-based mobility startup’s debut, the Kalk OR, is a 150-pound, battery-powered two-wheeler engineered for agile off-road riding and available in a street-legal version.

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 9am Pacific, you can subscribe here.

The ‘PuffPacket’ could help researchers learn when, how and why people vape

Vaping is a controversial habit: it certainly has its downsides, but anecdotally it’s a fantastic smoking cessation aid. The thing is, until behavioral scientists know a bit more about who does it, when, how much and other details, its use will continue to be something of a mystery. That’s where the PuffPacket comes in.

Designed by Cornell engineers, the PuffPacket is a small device that attaches to e-cigarettes (or vape pens, or whatever you call yours) and precisely measures their use, sharing that information with a smartphone app for the user, and potentially researchers, to review later.

Some vaping devices are already set up with something like this, to tell a user when the cartridge is running low or a certain limit has been reached. But generally when vaping habits are studied, they rely on self-report data, not proprietary apps.

“The lack of continuous and objective understanding of vaping behaviors led us to develop PuffPacket to enable proper measurement, monitoring, tracking and recording of e-cigarette use, as opposed to inferring it from location and activity data, or self-reports,” said PhD student Alexander Adams, who led the creation of the device, in a Cornell news release.

The device fits a number of e-cigarette types, fitting between the mouthpiece and the heating element. It sits idle until the user breathes in, which activates the e-cigarette’s circuits, and the PuffPacket’s as well. By paying attention to the voltage, it can tell how much liquid is being vaporized, as well as simpler measurements like the duration and timing of the inhalation.

An example using real data of how location and activity could be correlated with vaping

This data is sent to the smartphone app via Bluetooth, where it is cross-referenced with other information, like location, motion and other metadata. This may lead to identifiable patterns, like that someone vapes frequently when they walk in the morning but not the afternoon, or after coffee but not meals, or far more at the bar than at home — that sort of thing. Perhaps even (with the proper permissions) it could track use of certain apps — Instagram and vape? Post-game puff?

Some of these might be obvious, others not so much — but either way, it helps to have them backed up by real data rather than asking a person to estimate their own usage. They may not know, understand or wish to admit their own habits.

“Getting these correlations between time of day, place and activity is important for understanding addiction. Research has shown that if you can keep people away from the paths of their normal habits, it can disrupt them,” said Adams.

No one is expecting people to voluntarily stick these things on their vape pens and share their info, but the design — which is being released as open source — could be used by researchers performing more formal studies. You can read the paper describing PuffPacket here.

Meet EventBot, a new Android malware that steals banking passwords and two-factor codes

Security researchers are sounding the alarm over a newly discovered Android malware that targets banking apps and cryptocurrency wallets.

The malware, which researchers at security firm Cybereason recently discovered and called EventBot, masquerades as a legitimate Android app — like Adobe Flash or Microsoft Word for Android — which abuses Android’s in-built accessibility features to obtain deep access to the device’s operating system.

Once installed — either by an unsuspecting user or by a malicious person with access to a victim’s phone — the EventBot-infected fake app quietly siphons off passwords for more than 200 banking and cryptocurrency apps — including PayPal, Coinbase, CapitalOne and HSBC — and intercepts and two-factor authentication text message codes.

With a victim’s password and two-factor code, the hackers can break into bank accounts, apps and wallets, and steal a victim’s funds.

“The developer behind Eventbot has invested a lot of time and resources into creating the code, and the level of sophistication and capabilities is really high,” Assaf Dahan, head of threat research at Cybereason, told TechCrunch.

The malware quietly records every tap and key press, and can read notifications from other installed apps, giving the hackers a window into what’s happening on a victim’s device.

Over time, the malware siphons off banking and cryptocurrency app passwords back to the hackers’ server.

The researchers said that EventBot remains a work in progress. Over a period of several weeks since its discovery in March, the researchers saw the malware iteratively update every few days to include new malicious features. At one point the malware’s creators improved the encryption scheme it uses to communicate with the hackers’ server, and included a new feature that can grab a user’s device lock code, likely to allow the malware to grant itself higher privileges to the victim’s device like payments and system settings.

But while the researchers are stumped as to who is behind the campaign, their research suggests the malware is brand new.

“Thus far, we haven’t observed clear cases of copy-paste or code reuse from other malware and it seems to have been written from scratch,” said Dahan.

Android malware is not new, but it’s on the rise. Hackers and malware operators have increasingly targeted mobile users because many device owners have their banking apps, social media, and other sensitive services on their device. Google has improved Android security in recent years by screening apps in its app store and proactively blocking third-party apps to cut down on malware — with mixed results. Many malicious apps have evaded Google’s detection.

Cybereason said it has not yet seen EventBot on Android’s app store or in active use in malware campaigns, limiting the exposure to potential victims — for now.

But the researchers said users should avoid untrusted apps from third-party sites and stores, many of which don’t screen their apps for malware.