EU puts out final guidance on data transfers to third countries

The European Data Protection Board (EDPB) published its final recommendations yesterday setting on guidance for making transfers of personal data to third countries to comply with EU data protection rules in light of last summer’s landmark CJEU ruling (aka Schrems II).

The long and short of these recommendations — which are fairly long; running to 48 pages — is that some data transfers to third countries will simply not be possible to (legally) carry out. Despite the continued existence of legal mechanisms that can, in theory, be used to make such transfers (like Standard Contractual Clauses; a transfer tool that was recently updated by the Commission).

However it’s up to the data controller to assess the viability of each transfer, on a case by case basis, to determine whether data can legally flow in that particular case. (Which may mean, for example, a business making complex assessments about foreign government surveillance regimes and how they impinge upon its specific operations.)

Companies that routinely take EU users’ data outside the bloc for processing in third countries (like the US), which do not have data adequacy arrangements with the EU, face substantial cost and challenge in attaining compliance — in a best case scenario.

Those that can’t apply viable ‘special measures’ to ensure transferred data is safe are duty bound to suspend data flows — with the risk, should they fail to do that, of being ordered to by a data protection authority (which could also apply additional sanctions).

One alternative option could be for such a firm to store and process EU users’ data locally — within the EU. But clearly that won’t be viable for every company.

Law firms are likely to be very happy with this outcome since there will be increased demand for legal advice as companies grapple with how to structure their data flows and adapt to a post-Schrems II world.

In some EU jurisdictions (such as Germany) data protection agencies are now actively carrying out compliance checks — so orders to suspend transfers are bound to follow.

While the European Data Protection Supervisor is busy scrutinizing EU institutions’ own use of US cloud services giants to see whether high level arrangements with tech giants like AWS and Microsoft pass muster or not.

Last summer the CJEU struck down the EU-US Privacy Shield — only a few years after the flagship adequacy arrangement was inked. The same core legal issues did for its predecessor, ‘Safe Harbor‘, though that had stood for some fifteen years. And since the demise of Privacy Shield the Commission has repeatedly warned there will be no quick fix replacement this time; nothing short of major reform of US surveillance law is likely to be required.

US and EU lawmakers remain in negotiations over a replacement EU-US data flows deal but a viable outcome that can stand up to legal challenge as the prior two agreements could not, may well require years of work, not months.

And that means EU-US data flows are facing legal uncertainty for the foreseeable future.

The UK, meanwhile, has just squeezed a data adequacy agreement out of the Commission — despite some loudly enunciated post-Brexit plans for regulatory divergence in the area of data protection.

If the UK follows through in ripping up key tenets of its inherited EU legal framework there’s a high chance it will also lose adequacy status in the coming years — meaning it too could face crippling barriers to EU data flows. (But for now it seems to have dodged that bullet.)

Data flows to other third countries that also lack an EU adequacy agreement — such as China and India — face the same ongoing legal uncertainty.

The backstory to the EU international data flows issues originates with a complaint — in the wake of NSA whistleblower Edward Snowden’s revelations about government mass surveillance programs, so more than seven years ago — made by the eponymous Max Schrems over what he argued were unsafe EU-US data flows.

Although his complaint was specifically targeted at Facebook’s business and called on the Irish Data Protection Commission (DPC) to use its enforcement powers and suspend Facebook’s EU-US data flows.

A regulatory dance of indecision followed which finally saw legal questions referred to Europe’s top court and — ultimately — the demise of the EU-US Privacy Shield. The CJEU ruling also put it beyond legal doubt that Member States’ DPAs must step in and act when they suspect data is flowing to a location where the information is at risk.

Following the Schrems II ruling, the DPC (finally) sent Facebook a preliminary order to suspend its EU-US data flows last fall. Facebook immediately challenged the order in the Irish courts — seeking to block the move. But that challenge failed. And Facebook’s EU-US data flows are now very much operating on borrowed time.

As one of the platform’s subject to Section 702 of the US’ FISA law, its options for applying ‘special measures’ to supplement its EU data transfers look, well, limited to say the least.

It can’t — for example — encrypt the data in a way that ensures it has no access to it (zero access encryption) since that’s not how Facebook’s advertising empire functions. And Schrems has previously suggested Facebook will have to federate its service — and store EU users’ information inside the EU — to fix its data transfer problem.

Safe to say, the costs and complexity of compliance for certain businesses like Facebook look massive.

But there will be compliance costs and complexity for thousands of businesses in the wake of the CJEU ruling.

Commenting on the EDPB’s adoption of final recommendations, chair Andrea Jelinek said: “The impact of Schrems II cannot be underestimated: Already international data flows are subject to much closer scrutiny from the supervisory authorities who are conducting investigations at their respective levels. The goal of the EDPB Recommendations is to guide exporters in lawfully transferring personal data to third countries while guaranteeing that the data transferred is afforded a level of protection essentially equivalent to that guaranteed within the European Economic Area.

“By clarifying some doubts expressed by stakeholders, and in particular the importance of examining the practices of public authorities in third countries, we want to make it easier for data exporters to know how to assess their transfers to third countries and to identify and implement effective supplementary measures where they are needed. The EDPB will continue considering the effects of the Schrems II ruling and the comments received from stakeholders in its future guidance.”

The EDPB put out earlier guidance on Schrems II compliance last year.

It said the main modifications between that earlier advice and its final recommendations include: “The emphasis on the importance of examining the practices of third country public authorities in the exporters’ legal assessment to determine whether the legislation and/or practices of the third country impinge — in practice — on the effectiveness of the Art. 46 GDPR transfer tool; the possibility that the exporter considers in its assessment the practical experience of the importer, among other elements and with certain caveats; and the clarification that the legislation of the third country of destination allowing its authorities to access the data transferred, even without the importer’s intervention, may also impinge on the effectiveness of the transfer tool”.

Commenting on the EDPB’s recommendations in a statement, law firm Linklaters dubbed the guidance “strict” — warning over the looming impact on businesses.

“There is little evidence of a pragmatic approach to these transfers and the EDPB seems entirely content if the conclusion is that the data must remain in the EU,” said Peter Church, a Counsel at the global law firm. “For example, before transferring personal data to third country (without adequate data protection laws) businesses must consider not only its law but how its law enforcement and national security agencies operate in practice. Given these activities are typically secretive and opaque, this type of analysis is likely to cost tens of thousands of euros and take time. It appears this analysis is needed even for relatively innocuous transfers.”

“It is not clear how SMEs can be expected to comply with these requirements,” he added. “Given we now operate in a globalised society the EDPB, like King Canute, should consider the practical limitations on its power. The guidance will not turn back the tides of data washing back and forth across the world, but many businesses will really struggle to comply with these new requirements.”

 

#andrea-jelinek, #china, #data-controller, #data-protection, #data-security, #edpb, #edward-snowden, #eu-us-privacy-shield, #europe, #european-data-protection-board, #european-union, #facebook, #general-data-protection-regulation, #germany, #india, #law-enforcement, #law-firms, #linklaters, #max-schrems, #policy, #privacy, #schrems-ii, #surveillance-law, #united-kingdom, #united-states

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Transmit Security raises $543M Series A to kill off the password

Transmit Security, a Boston-based startup that’s on a mission to rid the world of passwords, has raised a massive $543 million in Series A funding.

The funding round, said to be the largest Series A investment in cybersecurity history and one of the highest valuations for a bootstrapped company, was led by Insight Partners and General Atlantic, with additional investment from Cyberstarts, Geodesic, SYN Ventures, Vintage, and Artisanal Ventures. 

Transmit Security said it has a pre-money valuation of $2.2 billion, and will use the new funds to expand its reach and investing in key global areas to grow the organization.

Ultimately, however, the funding round will help the company to accelerate its mission to help the world go passwordless. Organizations lose millions of dollars every year due to “inherently unsafe” password-based authentication, according to the startup; not only do weak passwords account for more than 80% of all data breaches, but the average help desk labor cost to reset a single password stands at more than $70. 

Transmit says its biometric-based authenticator is the first natively passwordless identity and risk management solution, and it has already been adopted by a number of big-name brands including Lowes, Santander, and UBS. The solution, which currently handles more than 9,000 authentication requests per second, can reduce account resets by 96%, the company says, and reduces customer authentication from 1 minute to 2 seconds. 

“By eliminating passwords, businesses can immediately reduce churn and cart abandonment and provide superior security for personal data,” said Transmit Security CEO Mickey Boodaei, who co-founded the company in 2014. “Our customers, whether they are in the retail, banking, financial, telecommunications, or automotive sectors, understand that providing an optimized identity experience is a multimillion-dollar challenge. With this latest round of funding from premier partners, we can significantly expand our reach to help rid the world of passwords.”

Transmit Security isn’t the only company that’s on a mission to kill off the password. Microsoft has announced plans to make Windows 10 password-free, and Apple recently previewed Passkeys in iCloud Keychain, a method of passwordless authentication powered by WebAuthn, and Face ID and Touch ID.

#access-control, #authenticator, #banking, #boston, #ceo, #computer-security, #cryptography, #funding, #general-atlantic, #identification, #insight-partners, #lowes, #microsoft, #microsoft-windows, #password, #retail, #security, #telecommunications, #transmit-security, #ubs

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Hamburger-flipping robotics company Miso introduces an automated beverage dispenser

How do you follow up a burger-flipping robot? If you’re Miso Robotics (which you likely are, if you’ve created a burger-flipping robot), the answer is simple: beverages. The robotics startup continues to focus on the fast food service industry with the planned launch of an automated beverage-dispensing robot.

The system, which is being created as part of a partnership with beverage dispenser manufacturer Lancer, brings an added level of automation to your standard fast food fountain. It has a point of sale system directly integrated, which kicks off the process of pouring, sealing and advancing the drink. Beyond that, it’s integrated with a larger sales system to ensure that it’s getting orders right, between in-person customers and delivery drivers.

Image Credits: Miso Robotics

Basically it’s a much smarter version of the fountain you encounter in every fast food restaurant and movie theater. Naturally, the company says that interest in the category has only increased amid labor shortages and a pandemic that froze much of the available workforce over the past year and a half.

“Lancer has a legacy of stand-out industry quality and shares in our vision for beverage innovation and futuristic design,” Miso Chief Strategy Officer Jake Brewer said in a press release tied to this morning’s news. “Order fulfillment is a major factor for customer satisfaction and operators can’t afford to have a beverage left behind when a delivery driver or customer visits. We are extremely excited to create a product that will not only make the lives of those working in commercial kitchens better, but will be a game changer for the industry as a whole to deliver a world-class customer experience.”

Image Credits: Miso Robotics

Speaking of striking while the iron is hot, the company is also using the opportunity to announce a planned Series D, following up on a recently closed $25 million Series C.

#beverages, #fast-food, #food, #lancer, #miso-robotics, #robotics

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Chinese sellers on Amazon in hot demand by VCs and e-commerce roll-ups

Chinese merchants selling on Amazon are having a moment. The scruffy exporters are used to roaming about suburban factory areas and dealing with constant cash flow strain, but suddenly they find themselves having coffee with top Chinese venture capital firms and investment representatives from internet giants, who come with big checks to hunt down the next Shein or Anker. While VCs can provide the money for them to scale quickly, many lack the expertise to help on the strategic side.

This is where brand aggregators can put their retail know-how to work. Also called roll-ups, these companies go around acquiring promising e-commmerce brands for operational synergies. After taking off in the United States, Europe, and lately Southeast Asia, it has also quietly landed in China, where traditional white-label manufacturers are trying to move up the value chain and establish their own brand presence.

The latest roll-up to enter China is Berlin Brands Group (BBG), which aims to buy “dozens of” brands in the country over the next few years, its founder and CEO Peter Chaljawski told TechCrunch. This will significantly boost the German company’s existing portfolio of 14 brands.

The move came on the back of BBG’s $240 million funding raised from debt and its announcement to commit $300 million on its balance sheet to buying up companies. The firm opted for debt in part because it has been profitable since its inception. The recent funding won’t be its last round and it may use other financial instruments in the future, said the founder.

Chaljawski doesn’t see VC and corporate investors as direct competitors in the hunt for brands. “There are tens of thousands of sellers in China that generate significant revenue on Amazon. I think the VC money applies to some of them, and the roll-up model applies also to only some of them. But ‘some’ is a very, very big number.”

BBG is no stranger to China. The 15-year-old company has been relying on Chinese manufacturers to make its kitchenware, gardening tools, sports gear and other home appliances, with 90% of its products still made in the country today. For the new brand buy-out initiative, it’s hiring dozens of staff in Shenzhen, which Chalijawski dubbed the “Silicon Valley of Amazon,” referring to the southern city’s key role in global export, manufacturing, and increasingly, design.

Amazon alternative

BBG hopes to offer a new way for Chinese consumer products to scale in Europe and the U.S. beyond being an anonymous brand on Amazon. Sellers may want to break free of the American behemoth to seize more control over consumer data, but building a direct-to-consumer (D2C) brand is no small feat.

Many merchants that are good at operating Amazon third-party businesses lack the infrastructure to go beyond Amazon, like an in-house logistics system, said the founder. In Europe, BBG manages 120,000 square meters of fulfillment centers, allowing it to shed dependence on Amazon.

Chinese brands may also want to find Amazon alternatives in Europe, where the e-commerce landscape is a lot more fragmented than that in the U.S, noted Chaljawski.

“If you look at the U.S., Amazon is dominant. If you look at Europe, Amazon only has 10% of the market share of online retail. So 90% is beyond Amazon. In the Netherlands, you have platforms like Bol. In Poland, you have Allegro, and in France, you have other dominant players.”

To bridge the gap for international brands targeting Europe, BBG operates close to 20 D2C web stores in major European countries, aside from selling on Amazon. Its sales growth in the U.S. has also been in full steam. Currently, over 60% of the firm’s revenues come from non-Amazon channels.

BBG is already in advanced negotiations with “some brands” in China but cannot disclose their names at this stage.

#amazon, #asia, #berlin-brands-group, #brand, #china, #consumer-products, #e-commerce, #e-commerce-aggregator, #ecommerce, #europe, #manufacturing, #online-retail, #online-shopping, #retailers, #roll-ups, #shenzhen, #tc

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Dutch payments startup Mollie raises another $800M at a $6.5B valuation

A payments startup whose backend was originally built by the founder while still living with his parents and bootstrapping the company is today announcing a massive round of funding that catapults it into being one of the most valuable startups in Europe. Mollie, an Amsterdam-based startup that provides a way for businesses to integrate payments into sites, documents and other services by way of an API, is today announcing that it has raised €665 million ($800 million) in an all-equity round that values the company at €5.4 billion ($6.5 billion).

Blackstone Growth (BXG)Blackstone’s growth equity investing business, led the investment, with participation also from EQT GrowthGeneral AtlanticHMI Capital, Alkeon Capital, and TCV. TCV led Mollie’s breakout Series B in September last year.

Mollie has been on a major growth tear in recent years. The company is currently on track to process some €20 billion (nearly $24 billion) in payments in 2021, up 100% on the year before when it processed around €10 billion. It currently has 120,000 monthly active merchants (versus 100,000 in 2020), and customers include the likes of Deliveroo, Unicef, Acer and Guess. It’s adding between 400 and 500 new customers each day.

To be sure, the pandemic saw a massive shift in commerce with all kinds of transactions — buying goods, paying for services, handling your banking and other finances — all moving into the digital world, and that also played out for Mollie.

But that is also not the full story: growing at the same pace this year as last appears to indicate that even as we start to see more signs of the pandemic moving on (well, at least for some…), the shift to paying and buying online (and using Mollie’s rails to do so) will stay.

“The only thing you can reliably measure in payments is consumer spend. That was at 10% and now it’s at 15-20%,” said Shane Happach, who took over as CEO of Mollie in April of this year from founder Adriaan Mol (who, incidentally, was also the founder of MessageBird; Mol’s knickname is Mollie, hence the name of this company).

In an interview, Happach explained that consumer spend, and the subsequent addressable consumer market, is the metric that best indicates how a company like Mollie will grow. So while Mollie has largely been profitable since being founded back in 2004, the plan now will be to put the gas on growth, building related services around payments to continue expanding its product offering while also continuing to move move into more geographies beyond its core, and biggest, market of Europe, helped in no small part by its new, big investors.

That will bring it into deeper competition with a whole raft of players. That is to say, Mollie is far from the only payments company on the market, nor is it the only one that has seen business boom in recent times. But it is bigger and much more fragmented than you might think. Happach — who spent a decade at WorldPay before joining Mollie — points out that the top ten players in payments have 50% of the market, but the other 50% is held by about 5,000 players.

“You’d be really surprised, companies like Stripe are in the 5,000. They’re not in the top ten,” he said. (JP Morgan, WorldPay, Fiserv (First Data), PayPal are among those that make up the first ten.). That essentially gives the company a lot of opportunity to grow and consolidate, while also underscoring just how big the market is for everyone.

Stripe came up a few times in our conversation, in particular when talking about competitive threats — its basic premise, like Mollie’s, has been the building of a payments platform (complex for any non-payment company to do) that can be integrated by customers anywhere by way of a simple API; when talking about valuations (Stripe is now valued at $95 billion); and when talking about product playbooks.

In all cases, the main takeaway seems to be that Stripe’s success speaks to the market Mollie has ahead of it. “We see a huge opportunity in the super underserved population of SMBs,” Happach said. “Especially if you look at our core markets, where most of our customers come from today, the financial services that they can get access to are very clunky.” The company, he added, will be focusing on a few areas that it believes it can do better than what’s out there now, which also complements its payments business: working capital for small businesses, card issuing and corporate card programs, expense management, and business banking. (All areas, I should note, where Stripe also has launched products.)

It will also be interesting to watch how and if Mollie, as it grows, gets more confident to potentially change its cut. It’s taken PayPal years, but it has recently rebalanced its rates. Happach notes Mollie never has and has no plans to follow it.

One area where Mollie is less likely to invest the new capital is in acquisitions, however.

“I came from a company that had acquired a load of other companies, and I think there’s pluses and minuses,” Happach said. “For Mollie, we are building an organic plan…. [Acquisitions are] always an opportunity, [but] I would say it’s not the thesis of what we have agreed with investors is the most likely things that we’d like to do…. I think, right now, we’re mainly focused on hiring as much great talent as we can, really beefing up our commercial product and engineering teams. There’s still quite a lot to do by just investing in our own business building and training our own people and serving the customers that we’ve already got in the best possible way.”

The company, indeed, hasn’t really grown through a sales force or big marketing investments but largely through word of mouth up to now, one reason Blackstone came knocking.

“One of the things that really impressed us at Blackstone is that of the hundreds that sign up to Mollie on a daily basis, 90-95% of them have almost no interaction with Mollie directly,” said Paul Morrissey, who heads up Blackstone’s investing activities in Europe. “They’re just finding Mollie, loving the product and just getting going and that goes back to kind of the unit economics of the business… It talks to their competitive position in the market.”

That is somewhat due to change with the company embarking on a big hiring push, taking its team of 480 to just under 800 in the next nine months.

#tc

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Vienna’s GoStudent raises $244M at a $1.7B valuation for its online tutor marketplace

Online teaching came into the spotlight for many students and parents in the last year, and today one of the companies that saw a big lift during that rush of activity is announcing a big round of funding to carry it into what has emerged as a more permanent change of habits for many learners.

GoStudent, a marketplace where K-12 students (and their parents) can find and engage with one-to-one video-based tutors in a variety of subjects, has raised €205 million ($244 million), in a Series C round that values the company at €1.4 billion ($1.7 billion).

The funding is coming at a time of strong growth. The Vienna, Austria-based startup is now live in 18 countries and sees some 400,000 sessions booked monthly on its platform, up 700% year-on-year (and up 15% month-on-month). It says it is on track to double employees to 1,000 and reach 10,000 tutors by the end of this year. The plan is to expand to more countries — Mexico and Canada are next on the list — and to continue growing its lists of tutors and subjects covered.

“We now plan to be even more aggressive geographically and plan to invest more into the brand,” Felix Ohswald, cofounder and CEO, told TechCrunch.

(As a point of comparison, when it last fundraised in March, GoStudent was booking a mere 250,000 tutoring sessions over its platform.)

DST Global is leading the round, with SoftBank (via its Vision Fund 2), Tencent, Dragoneer and previous backers Coatue, Left Lane Capital and DN Capital also participating. Vienna, Austria-based GoStudent has raised €291 million to date, including a €70 million round only this past March and €13.3 million in a Series A this past November.

The rapid pace of funding and GoStudent’s rising valuation — this investment makes it the highest-valued edtech startup in Europe, the company said — comes amid a streak of funding rounds for edtech companies.

And that may be no surprise: online and other digital tools in the last year especially felt more relevant (and in many cases were used more) than ever before due to social distancing during the pandemic. (Other recent deals have included funding for Byju’s, Kahoot, Formative, Engageli, Lingoda, Brainly, ClassDojo, Newsela, and Yuanfudao, among many others.)

But in the case of GoStudent, it’s also because the startup itself is also doing an A+ job in scaling its concept.

The company has been around since 2016 — when it started out initially providing a network for people to help each other answer questions (similar to Brainly), as well as connect with tutors, and for tutors to organize classes — but it was only about 2.5 years ago that GoStudent started to focus more squarely on one-to-one tutoring.

GoStudent provides a fully-integrated service, which lets students and their parents select from a range of topics that are typically taught in schools — currently some 30 subjects, including sciences, math, computing, languages, history, business and more — that they can be tutored on generally or specifically with the aim of taking an exam.

Tutoring comes from people who are tested, vetted and interviewed by GoStudent before they can join the platform; and before engaging tutors, parents and students interview an individual tutor and go through a practice lesson as part of that.

Learning plans are then organized according to students’ schedules and what they are setting out to do (they can send over their homework, or chapters they’re studying in school or even a curriculum outline); and the classes, assessments and payments (based on packages booked), are all handled over the platform, too.

Although there are a number of ways of learning a subject over the internet today — and specifically a number of online-only direct tutoring platforms in the market now (including Brainly, Yuanfudao, and others) — Ohswald said that by and large GoStudent’s biggest competition is the bigger in-person business of teaching, and of students and tutors connecting with each other through word of mouth — the “offline shadow market of tutors,” as he calls it.

All the same, while there are tech tools involved in provisioning and running lessons, at its heart GoStudent is also still about humans connecting to help each other, rather than humans connecting with computer programs.

Interestingly, its founders believe that the Covid-19 pandemic effect was not uniformly positive for its business.

“The pandemic had mixed effects,” Ohswald said. “On the one hand there was a natural demand from kids and parents. But with the schools closed, there was less pressure, less exams, less demand for after-school study. That aspect had a negative effect. But more broadly, there was a BIG boost for digital education. So the mindset of the parent and family drastically shifted.”

He noted that many families turned to tutoring to help “support the kids at home, to help them to stop being overwhelmed.” (And I would add, especially in the first part of the lockdown last year when schools were scrambling a little to regroup and teach online, that as a parent, we found it a relief to have at least some consistency with private tutors online at that time.)

What that means, essentially, is that while GoStudent did well in the last year, the company does not want to tie its growth to a specific set of pandemic circumstances that may well become less of an issue in the year ahead.

Indeed, for better or worse, there are bigger factors at play that predate the pandemic. Increasing pressure on students to perform their best competing against others, a continuing focus on testing, and a general level of academic ambition; but also a much easier and cheaper way of finding and connecting with people who can help students feel more supported in their efforts: all of these are also playing a role.

“GoStudent is one of the fastest growing companies that we have ever backed. The company has grown 800% in terms of revenue and 70x in terms of value since 2020 and we are convinced that this is just the beginning,” Nenad Marovac, founder and managing partner, DN Capital, told TechCrunch. “We believe that GoStudent can become one of the top digital schools in the world. By leveraging technology GoStudent democratizes quality education to all at affordable prices.”

#edtech, #education, #europe, #funding, #gostudent, #online-education, #tutoring, #tutors

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Gillmor Gang: Who Knew

The Gillmor Gang recording session is nestled on Friday midday on the East Coast and midmorning out West. Streamed live on Twitter, Facebook Live, and Youtube embed, the show is then edited, sweetened with titles and music, and released on Techcrunch. It’s a kind of hybrid between podcast, Zoom collaboration meeting, and work-from-anywhere encounter group. The Gang grew out of the early days of podcasting, now undergoing rescaffolding from social, drop-in, or just plain fast following from a variety of social networks. The latest entry, Live Audio Rooms from Facebook, is “soft-launching” with verified famous people and creators in good standing up first.

Facebook typically waits just long enough to decide what features to copy, and appears ready to aggregate the strategies of the rest of the market behind a Facebook infrastructure if not firewall. This may incorporate not just social audio features like tipping and raising hands to speak but also live video streaming and perhaps screen-sharing tools like ones announced at Apple’s WWDC for Facetime. Inevitably, the context returns to Clubhouse and its parallel tech media strategy.

Andreessen Horowitz (A16Z) debuted their publishing site, and the media tried its best to push back without burning any bridges to the high-flying venture firm. Even more interesting than the future.com website was a Clubhouse Launch Party where we met authors and their editors for about two hours of chat. Marc Andreessen sat in at the beginning, and A16Z partner Margit Wennmachers provided context for the launch. The strategy: project trust and insight from a venture firm and go direct from technologists to the tech and investment audience. It’s an interesting time in the wake of the Trumpian alternative facts blight, where the cable media seems tied in knots by trying to salvage ratings gold with yet another crisis-to-crisis breaking news schtick.

After that gambit begins to tire, the pitch shifts to the undermining of Democracy by the Autocrats, which although real, is not exactly compelling ratings magic. With vaccinations reaching movie popcorn immunity levels, streaming television is shifting from all out binge releases to the much more familiar weekly cliffhanger model. Working from anywhere is being negotiated based on a hybrid of the best of watching your kids grow up while getting back to a collaborative office when you’ve seen enough of them or them of you.

On the Gang this time, Keith Teare suggests Netflix may be in a bit of a tough spot, as the easing pandemic puts pressure on new shows slowed down by production lockouts. It’s true: the quality seems to be slipping almost imperceptibly, but nothing is accelerating to put pressure on the Big 4 or 5 Flixes including Disney, Amazon Prime, and maybe Hulu. DiscoBros (Frank Radice’s catchy rebrand for Discovery/WarnerMedia) can be fun, Apple TV+ should buy in to boost production, and then we need to look to the Creator Economy to hurry up and save us.

Every few days there’s another social audio pivot/acquisition/update, the most interesting besides Facebook’s if you can call it that being Spotify Greenroom with its auto record and captioning features and inevitable integration with its Anchor podcasting tools. Tip jar resistance is almost a thing, in case you’re wondering. The only thing more enervating is speculation on whether Clubhouse is jumping the shark — I don’t think so. If the Future.com suggests more copying of The Information’s events model, there’s plenty of runway ahead. And social audio gold is anything about Clubhouse on Clubhouse.

For those of us who still remember tech news, the Apple announcements almost reach orbit with the mixture of M1 magic and iOS/MacOS/WatchOS/TVOS blurring. My favorite list is of features that don’t show up on Intel machines, all the cool ones. For the first time in years, we traded up to M1’s on both our Macbooks including a Pro and Air, and in the process enabled Blur mode on Zoom on both essentially for free. The hardware is starting to feel like a subscription service (HaaS) which as Salesforce’s trajectory suggests is likely a very big deal. (Disclosure: I work for Salesforce.) For creators, moving from hardware like Newtek’s Tricaster and BlackMagic’s ATEM Mini to software-based OBS and then NDI5 over the public network is not prime time, but getting there real soon now. Keith thinks so, Brent Leary says maybe. I say, if Apple bundles Apple TV and Apple TV+ with newsletter plugins from Twitter Revue and Substack subscriptions….

from the Gillmor Gang Newsletter

__________________

The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary and Steve Gillmor. Recorded live Friday, June 11, 2021.

Produced and directed by Tina Chase Gillmor @tinagillmor

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

Subscribe to the new Gillmor Gang Newsletter and join the backchannel here on Telegram.

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#brent-leary, #denis-pombriant, #frank-radice, #keith-teare, #michael-markman, #steve-gillmor, #tc, #video

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Tesla backs vision-only approach to autonomy using powerful supercomputer

Tesla CEO Elon Musk has been teasing a neural network training computer called ‘Dojo’ since at least 2019. Musk says Dojo will be able to process vast amounts of video data to achieve vision-only autonomous driving. While Dojo itself is still in development, Tesla today revealed a new supercomputer that will serve as a development prototype version of what Dojo will ultimately offer. 

At the 2021 Conference on Computer Vision and Pattern Recognition on Monday, Tesla’s head of AI, Andrej Karpathy, revealed the company’s new supercomputer that allows the automaker to ditch radar and lidar sensors on self-driving cars in favor of high-quality optical cameras. During his workshop on autonomous driving, Karpathy explained that to get a computer to respond to new environment in a way that a human can requires an immense dataset, and a massively powerful supercomputer to train the company’s neural net-based autonomous driving technology using that data set. Hence the development of these predecessors to Dojo.

Tesla’s newest-generation supercomputer has 10 petabytes of “hot tier” NVME storage and runs at 1.6 terrabytes per second, according to Karpathy. With 1.8 EFLOPS, he said it might be the fifth most powerful supercomputer in the world, but he conceded later that his team has not yet run the specific benchmark necessary to enter the TOP500 Supercomputing rankings.

“That said, if you take the total number of FLOPS it would indeed place somewhere around the fifth spot,” Karpathy told TechCrunch. “The fifth spot is currently occupied by NVIDIA with their Selene cluster, which has a very comparable architecture and similar number of GPUs (4480 vs ours 5760, so a bit less).”

Musk has been advocating for a vision-only approach to autonomy for some time, in large part because cameras are faster than radar or lidar. As of May, Tesla Model Y and Model 3 vehicles in North America are being built without radar, relying on cameras and machine learning to support its advanced driver assistance system and autopilot. 

Many autonomous driving companies use lidar and high definition maps, which means they require incredibly detailed maps of the places where they’re operating, including all road lanes and how they connect, traffic lights and more. 

“The approach we take is vision-based, primarily using neural networks that can in principle function anywhere on earth,” said Karpathy in his workshop. 

Replacing a “meat computer,” or rather,  a human, with a silicon computer results in lower latencies (better reaction time), 360 degree situational awareness and a fully attentive driver that never checks their Instagram, said Karpathy.

Karpathy shared some scenarios of how Tesla’s supercomputer employs computer vision to correct bad driver behavior, including an emergency braking scenario in which the computer’s object detection kicks in to save a pedestrian from being hit, and traffic control warning that can identify a yellow light in the distance and send an alert to a driver that hasn’t yet started to slow down.

Tesla vehicles have also already proven a feature called pedal misapplication mitigation, in which the car identifies pedestrians in its path, or even a lack of a driving path, and responds to the driver accidentally stepping on the gas instead of braking, potentially saving pedestrians in front of the vehicle or preventing the driver from accelerating into a river.

Tesla’s supercomputer collects video from eight cameras that surround the vehicle at 36 frames per second, which provides insane amounts of information about the environment surrounding the car, Karpathy explained.

While the vision-only approach is more scalable than collecting, building and maintaining high definition maps everywhere in the world, it’s also much more of a challenge, because the neural networks doing the object detection and handling the driving have to be able to collect and process vast quantities of data at speeds that match the depth and velocity recognition capabilities of a human.

Karpathy says after years of research, he believes it can be done by treating the challenge as a supervised learning problem. Engineers testing the tech found they could drive around sparsely populated areas with zero interventions, said Karpathy, but “definitely struggle a lot more in very adversarial environments like San Francisco.” For the system to truly work well and mitigate the need for things like high-definition maps and additional sensors, it’ll have to get much better at dealing with densely populated areas.

One of the Tesla AI team game changers has been auto-labeling, through which it can automatically label things like roadway hazards and other objects from millions of videos capture by vehicles on Tesla camera. Large AI datasets have often required a lot of manual labelling, which is time-consuming, especially when trying to arrive at the kind of cleanly-labelled data set required to make a supervised learning system on a neural network work well.

With this latest supercomputer, Tesla has accumulated 1 million videos of around 10 seconds each and labeled 6 billion objects with depth, velocity and acceleration. All of this takes up a whopping 1.5 petabytes of storage. That seems like a massive amount, but it’ll take a lot more before the company can achieve the kind of reliability it requires out of an automated driving system that relies on vision systems alone, hence the need to continue developing ever more powerful supercomputers in Tesla’s pursuit of more advanced AI.

#artificial-intelligence, #tc, #tesla-dojo, #tesla-supercomputer, #transportation

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Fintech veteran Jitendra Gupta is ready for his new inning — now he is going after banks in India

For most people in India, having to engage with banks doesn’t instill a sense of joy. Banks in the South Asian market are notorious for making unannounced spam calls to upsell customers loans and credit cards, even when they have been explicitly asked not to do so.

Moreover, when a customer does reach out to a bank with a query, it can take forever to get the job done. Take ICICI Bank, India’s third largest bank and until recently my only banking partner for over six years, for an example.

It is now in its third month in figuring out who exactly in its relationship with Amazon is supposed to re-issue me a credit card. I have moved on with my life, and it looks like they did, too, likely before they even looked at my query.

Small and medium-sized businesses aren’t a big fan of banks, either. If you operate an early-stage startup, it’s anyone’s guess if you will ever be able to convince a bank to issue you a corporate account. So of course, startups — Razorpay and Open — took it upon themselves to fix this experience.

For consumers, too, in recent years, scores of startups have arrived on the scene to improve this banking experience. Whether you are a teenager, or just out of college, or a working professional, or don’t have a credit score, there are firms that can get you a credit card and loan.

But even these services have a ceiling limit of some sort. And customers aren’t loyal to any startup.

“A customer’s relationship is always with the entity where they park their savings deposit,” said Jitendra Gupta, a high-profile entrepreneur who has spent a decade in the fintech world. Since these customers are not parking their money with fintech, “the startups have been unable to disrupt the bank. That’s the hard reality.”

So what’s the alternative? Gupta, who co-founded CitrusPay (sold to Naspers’ PayU) and served as managing director of PayU, has been thinking about these challenges for more than two years.

“If you really want to change the banking industry, you cannot operate from the side. You have to fight from the centre, where they deposit their money. It’s a very time-consuming process and requires a lot of initial capital and experience with banks,” he told TechCrunch in an interview.

After more than a year and a half of raising about $24 million — from Sequoia Capital India, 3one4 Capital, Amrish Rau, Kunal Shah, Kunal Bahl, Tanglin Venture Partners, Rainmatter and others — Gupta is ready to launch what he believes will address a lot of the issues individuals face with their banks.

His new startup, called Jupiter, wants to bring “delight” to the banking experience, and it will launch in India on Thursday.

“We believe that a bank account should be a smart account, where it gives you insight, shares personalized tips and guides you through attaining some financial discipline,” he said.

A snapshot of the reach of banks and fintech startups in India. Data: CIBIL, Statista, BofA Global Research. Image: BofA

To be sure, Jupiter, too, will offer loans and other financial services to customers. But instead of making irrelevant calls to customers, it will assess which of its customers are running short on money and give the option to take a credit line from its app itself, he said. “The upsell doesn’t need to happen by way of spam. It needs to happen by way of contextualization and personalization.”

“Jupiter has been built in a deep integration with the underlying bank, allowing the consumer to have a frictionless experience for all their banking needs,” said Amrish Rau, chief executive of Pine Labs, co-founder of CitrusPay and longtime friend of Gupta.

The startup, which employs 115 people, has developed a number of products for customers joining on day one. The products include the ability to buy now and pay later on UPI, a feature first offered in the market by Jupiter, and a mutual fund portfolio analyzer. A debit card, in-app chat with a customer service agent, expense categorisation, finding the right card, determining the existing health insurance coverage, and more are ready to ship, the startup said.

Jupiter is currently working on providing zero mark-up on forex transactions, and frictionless two-factor authentication. The startup has published a public Trello page where it has outlined the features it is working on and when it expects to ship them, as well as features suggested by its beta-testing customers. “I want to establish full transparency in what we are working on to build trust with customers,” said Gupta.

Jupiter will have its own customer relationship team that will engage with the startup’s users. The startup, which last month opened a waiting list for customers to sign up, had amassed more than 25,000 applications as of two weeks ago.

Even Jupiter, which one day wishes to disrupt the banking sector, currently has to partner with banks. Its partners are Federal Bank and Axis Bank.

I asked Gupta about the excitement his investors see in Jupiter. “Everyone believes, as you see with fintech giants such as Nubank globally, that we will become a full bank,” he said.

But for the time being, Gupta said he is not looking to partner with more banks. “I don’t want Jupiter to attract customers because they want to bank with Federal or Axis. I want them to come to Jupiter because they want to bank with Jupiter,” he said.

In the next 12 months, the startup hopes to serve more than 1 million customers.

#apps, #asia, #banking, #finance, #india, #jitendra-gupta, #startups

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Clubhouse is building a DM text chat feature

Some Clubhouse users were treated to a surprise feature in their favorite app, but it wasn’t long for this world. A new UI element called “backchannel” popped up briefly before disappearing late last week, pointing the Clubhouse faithful to a new area of the app and generating plenty of chatter among users ready for more ways to connect.

While the backchannel screen was totally blank without so much as a text entry box, it looks like the company is working on building out the text chat feature that Clubhouse CEO Paul Davison previously discussed in a company town hall.

“…. I think that there are so many people who do DM backchannels all the time, so many people who want to deepen friendships and relationships with people and do all sorts of other stuff — I think this is something that we should have,” Davison said.

The Clubhouse co-founder went on to say that building the feature to suit the app’s use cases won’t be trivial and wouldn’t be happening right away. He also declined to elaborate on if the app would add traditional one-on-one DMs or a more open group text chat feature.

When reached for comment, Clubhouse didn’t dissuade TechCrunch from the assumption that a messaging feature is around the corner, but issued a coy statement.

“As part of our product building process, Clubhouse regularly explores and tests potential features,” a Clubhouse spokesperson told TechCrunch. “These functions sometimes become part of the app, sometimes they don’t.”

Spotify’s new Clubhouse copycat app Greenroom offers its own live text chatroom that users can access by swiping right in the app, giving it a bit of flexibility that Clubhouse has yet to offer. From the looks of the Clubhouse backchannel feature, it also lives in a window accessed through swiping, though that’s obviously subject to change.

#clubhouse, #messages, #mobile-applications, #paul-davison, #social, #social-media, #software, #spotify, #tc

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Mobile commerce startup Via rounds up $15 million in Series A funding

Mobile commerce is where it’s at, and rising investment in so-called conversational commerce startups underscores the opportunity.

Via, a two-year-old, Bay Area-based startup, is among those riding the wave, having identified some trends that are becoming clearer by the month. First, more e-commerce sales will be on mobile phones this year than desktops (as much as 70% by some estimates), people tend to read text messages almost immediately, and consumers spend upwards of 30 minutes a day engaging with mobile messaging apps.

Via also insists that unlike an expanding pool of startups that are focused on helping retailers and other broadcast their marketing messages in SMS, there’s room for a player to better address the many other pieces that add up to a happy consumer experience, from delivering coupon codes to starting the returns process.

Indeed, according to cofounder and CEO Tejas Konduru — a Brigham Young grad whose parents immigrated to the U.S. from India and who have themselves have worked at tech startups — one of insights his now 50-person company had early on was that despite that so many of their customers now use the mobile browser to visit and shop from their stores, many retailers use website builders like Shopify or BigCommerce to “cram everything everything into mobile, leaving only enough space for, like, one picture and a Buy button.” Konduru figured there must be a way to take the shopping experience that all these customers have with brands on their website and make them happen in a quick, mobile-native way.

Via’s solution, he says, is to help those businesses interact with customers on the devices and apps they use most often. “When someone uses Shopify of BigCommerce of any of those platforms,” says Konduru, “we also connect it to Via, and it basically takes the entire shopping experience and allows [customers] to quickly swipe right through a menu or like through a catalog on, for example, Facebook Messenger. Via will also create like a native iOS Android app by taking a  website, cloning it into a native iOS Android app, then sell the push notification in-app chat layer. Essentially,” he adds, “anytime someone shops on the phone and they’re not using the browser is what Via is handling.”

The ‘message’ seems to be getting through to the right people. Via, which launched last year, says it now employs 54 people on a full-time basis, has 190 brands as customers, and just secured $15 million in funding in Series A funding led by Footwork, the new venture firm cofounded by former Stitch Fix COO Mike Smith and former Shasta Ventures investor Nikhil Basu Trivedi.

Other participants in the round include Peterson Ventures, where Konduru once interned; famed founder Josh James of Domo, where Konduru also once interned; and a long list of other notable individual investors, including Ryan Smith of Qualtrics and Lattice cofounder and CEO Jack Altman.

As for how the company charges, it doesn’t ask for a monthly or yearly fee, as per traditional SaaS companies but instead charges per interaction, whether that’s an SMS or a voice minute or video or a GIF.

It’s starting to add up, according to Konduru, who says that Via’s average customer is seeing 15 times return on its investment and that from May of 2020 — when the company’s service went live —  through December, the company generated $51 million in sales. Konduru declined to say exactly how much Via saw from those transactions but says the company is on track to reach $10 million in annual recurring revenue this year.

As for how brands get started with Via, it’s pretty simple, by the company’s telling. As long as a company is using a commerce platform — from Shopfiy to WooCommerce to Salesforce– it takes just five minutes or so to produce a mobile app with a menu featuring the types of interactions the brand can enable via Via’s platform, says Konduru.

Konduru, who dabbled in investment banking before deciding to launch Via, says he isn’t surprised by the startup’s fast traction, though he says he has been taken aback by the breadth of conversations the company sees. While he imagined Via would be a strong marketing channel for brands that use the platform to push out notifications about abandoned shopping carts and upcoming deliveries, it’s more of a two-way street than he’d imagined.

“Every month, there are maybe 15,000 people who start the returns process through Via and will get a notification from a channel that Via supports. But suddenly — let’s say the customer gets the wrong T-shirt size — people start communicating with the brand. You see everything from fan appreciation to address changes to messaging about bad discount codes to where’s-my-order type exchanges.  That’s something I didn’t expect,” says Konduru, who says that before raising its Series A round, Via raised $4.2 million in seed funding led by Peterson Ventures.

“I thought that people would just look at the notification and, like, move it into the abyss somewhere. Instead, people start interacting with the brand.”

#conversational-commerce, #mobile-commerce, #peterson-ventures, #recent-funding, #series-a, #shopify, #startups, #tc, #venture-capital, #via

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Facebook’s entry into VR advertising isn’t going too well

Facebook’s efforts to bring advertising to the Oculus virtual reality platform it has spent billions of dollars building out doesn’t seem to be off to a great start.

The company announced last week that they were planning to roll out their first in-game ads inside the title Blaston from the prolific VR game developer Resolution Games, and just days later the game studio has shared that after hearing an earful from users they’ve decided to abandon the ad rollout.

“After listening to player feedback, we realize that Blaston isn’t the best fit for this type of advertising test,” a tweet from the Blaston account read. “Therefore, we no longer plan to implement the test. We look forward to seeing you in the arena and hope you try the Crackdown Update that went live today!”

This potential ad rollout had been particularly noteworthy because the ads were being tested inside a title from a third-party developer. Facebook has purchased a handful of VR studios in recent months and owns a number of the most popular Quest titles inside its marketplace, so the opportunity to roll out advertising with a third-party partner gave Facebook an chance to frame the advertising rollout as a way for other developers to open up their monetization channels, rather than for Facebook to do so.

The announcement last week still brought out plenty of critics in the VR community who weren’t thrilled about Facebook’s broader struggles with balancing advertising efforts with user privacy, but other users seemed to be more annoyed by the prospect of ads being rolled out inside a paid title they had already purchased. Blaston retails for $9.99 in the Oculus store.

Update: Resolution Games reached out to TechCrunch with a statement, floating the possibility of further ad tests down the road inside one of the developer’s free apps. “To make it clear, we realize that Blaston isn’t the best fit for this type of advertising test. As an alternative, we are looking to see if it is feasible to move this small, temporary test to our free game, Bait! sometime in the future.”

Resolution Games abandoning the test before it even started is an early setback for Facebook’s VR advertising efforts that showcases just how skeptical the Oculus platform’s most vocal users still are of Facebook. In a blog post last week, Facebook sought to address early concerns with what user data would be used to serve up advertising in VR, specifically noting that conversations recorded by the headset’s microphone and images analyzed by the onboard tracking cameras would not be used.

Facebook saw considerable backlash last year from virtual reality fans when they shared that new headset owners would need a Facebook account in order to activate their devices. While criticism poured in following the announcement, the recently released $299 Quest 2 headset has already outsold all of Facebook’s previous VR devices combined, the company has said.

We’ve reached out to Facebook for comment.

 

#computing, #facebook, #facebook-horizon, #mixed-reality, #oculus, #oculus-quest, #player, #software, #tc, #virtual-reality, #vr, #wearable-devices

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Daily Crunch: Facebook rolls out podcasts and Live Audio Rooms for US listeners

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello and welcome to Daily Crunch for June 21, 2021. The tech industry is skipping any sort of a summer slowdown. Facebook is taking on Clubhouse and Spotify, India is still figuring out how to manage its burgeoning technology industry, and everyone is raising money. Plus, we have notes on a new VC fund that has quite a twist. Let’s get into it! — Alex

The TechCrunch Top 3

  • Facebook wants your voice: Facebook’s live-audio service is out, putting Big Blue in competition with Clubhouse, a buzzy startup, and Spotify. In the wake of Clubhouse’s super-active early 2021, a host of Big Tech companies are looking to capture the magic that the startup managed to bottle. How successful Facebook will be at cutting in on Clubhouse’s game is not clear; so far, Facebook has yet to dominate the dating world, for example, making its entrance into the live-audio space more potential than promise of domination.
  • Consumer fintech is looking good: New numbers from European fintech unicorn Revolut dropped today, with TechCrunch’s Romain Dillet taking a look at the company for our publication. The gist is that Revolut had a deeply unprofitable 2020, but one that showed a real ramp toward smaller losses as it went on. I doodled on the company’s numbers here, if that’s your thing.
  • IPOs keep coming: Sure, we’re still waiting for Robinhood to file to go public, but after WalkMe’s public debut last week, there are new tech companies approaching the public markets. Couchbase filed today, kicking off the process of floating the database software company backed by Accel, Mayfield and Ignition Partners. Expect more filings in the coming weeks.

Startups

To keep proper tabs on both sides of the startup fundraising marketplace, we’re stripping VC news into its own section on occasion. Today is one such day. First, however, some startup news:

  • $10M for e-bikes: Ubco, a New Zealand-based electric utility bike startup, announced a $10 million raise today. The company is best known for its Ubco 2X2, an “all-wheel-drive electric motorbike that looks like a dirt bike but rides like a moped” — and looks rather fetching. Urban transit is changing as cities look to limit their car — and carbon — footprints. If trends hold, startups like Ubco could find themselves selling into a market that is moving in their direction.
  • Consumers love debt: TechCrunch covered news today that Kredivo, an Indonesian buy now, pay later (BNPL) startup, added $100 million to its credit facilities. The new capital access doubles the amount of debt that Kredivo can access. The news illustrates both the global consumer appetite for rejiggered debt products that transcend traditional credit cards, as well as the willingness of investors around the world to provide BNPL companies with ever more capital access. More on the subject here.
  • Music licensing remains complicated, lucrative: When Ludacris rapped that up-and-coming artists should “get a entertainment lawyer in the music profession,” he wasn’t kidding. The musical world is complicated. Mechanical licenses, platform cuts — it’s a lot. And where there’s complexity, there’s opportunity. Songtradr just raised $50 million to help license music to “high-profile names for advertising, films, TV, gaming and the like,” TechCrunch wrote in covering its latest round. Songtradr has now raised more than $100 million to fund its efforts.
  • Are shoes still hot? Backers of SoleSavy think so. They just put $12.5 million into the company’s Series A round. Unlike StockX — which is big business these days — SoleSavy isn’t a retail marketplace. Instead, it’s a company looking to build a sneaker head community. A community is like a subreddit, but on a different CMS and hosting provider, in case you’d forgotten.

Venture Capital News

What educational background generates the best entrepreneurs? Every university will tell you that they are the best. Many founders manage without a degree at all. The Academy Investor Network is betting that graduates of American military academies will prove lucrative. The fund just announced a $2.5 million anchor LP for its first fund, adding to capital from Scout Ventures, where co-founder Emily McMahan is a venture partner. She’s partnering with Sherman Williams in targeting a $50 million first raise.

Let’s see how far their thesis carries them. At least they will be able to brag with confidence that when it comes to rucking they will have the highest founder quality in the world.

Seed is not the new Series A

Usually, a teacher who grades students on a curve is boosting the efforts of those who didn’t perform well on the test. In the case of cloud companies, however, it’s the other way around.

As of Q1 2021, startups in this sector have a median Series A around $8 million, reports PitchBook. With $100+ million rounds becoming more common, company valuations are regularly boosted into the billions.

Andy Stinnes, general partner at Cloud Apps Capital Partners, says founders who are between angel and Series A should seek out investors who are satisfied with $200,000 to $500,000 in ARR. Usually a specialist firm, these VCs are open to betting on startups that haven’t yet found product-market fit.

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

Big Tech Inc.

India’s tech scene deals with more government oversight: The Indian e-commerce industry is huge, with Amazon and Walmart battling with domestic companies — or buying them, in the case of Flipkart and Walmart — for market share in a growing market. All the activity is attracting complaints and possible government intervention. TechCrunch reported today that India “proposed … banning flash sales on e-commerce platforms and preventing their affiliate entities from being listed as sellers as the South Asian market looks to further tighten rules.”

India’s government is also busy battling with Twitter, as we’ve reported at length.

Germany is not enthused with Apple: With a fourth investigation opened, this time involving Apple, Germany’s oversight of competition in the tech world ratcheted up another few degrees today. In the case of Big Phone, the governmental body will “determine whether or not the iPhone maker meets the threshold of Germany’s updated competition law.” If Apple does, it would allow the country’s government to “intervene proactively” regarding the company’s activity.

Apple is also taking fire in its domestic market for what some perceive as heavy-handed tactics regarding its mobile app ecosystem, a market that the Cupertino-based company both moderates and extracts rents from.

Uber buys Cornershop: Today is a notable day for Latin American tech startups as the U.S. ride-hailing giant agreed to buy the 47% of Cornershop that it doesn’t own. The price? 29 million Uber shares. That’s about $1.3 billion worth of Uber equity.

The car service and delivery magnate bought Postmates last year, adding to its ability to deliver more than merely rides. The Cornershop buy fits into the thesis because the smaller company is also in the delivery market.

TechCrunch Experts: Growth Marketing

Illustration montage based on education and knowledge in blue

Image Credits: SEAN GLADWELL (opens in a new window) / Getty Images

TechCrunch wants to help startups find the right expert for their needs. To do this, we’re building a shortlist of the top growth marketers. We’ve received great recommendations for growth marketers in the startup industry since we launched our survey.

We’re excited to read more responses as they come in! Fill out the survey here.

Our editorial coverage about growth marketing includes articles from the TechCrunch team, guest columns and posts like “5 tips for brands that want to succeed in the new era of influencer marketing” by Eric Dahan on Extra Crunch. If you’re interested in writing a column, learn more here.

#daily-crunch, #newsletters, #tc

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What does Red Hat’s sale to IBM tell us about Couchbase’s valuation?

The IPO rush of 2021 continued this week with a fresh filing from NoSQL provider Couchbase. The company raised hundreds of millions while private, making its impending debut an important moment for a number of private investors, including venture capitalists.

According to PitchBook data, Couchbase was last valued at a post-money valuation of $580 million when it raised $105 million in May 2020. The company — despite its expansive fundraising history — is not a unicorn heading into its debut to the best of our knowledge.

We’d like to uncover whether it will be one when it prices and starts to trade, so we dug into Couchbase’s business model and its financial performance, hoping to better understand the company and its market comps.

The Couchbase S-1

The Couchbase S-1 filing details a company that sells database tech. More specifically, Couchbase offers customers database technology that includes what NoSQL can offer (“schema flexibility,” in the company’s phrasing), as well as the ability to ask questions of their data with SQL queries.

Couchbase’s software can be deployed on clouds, including public clouds, in hybrid environments, and even on-prem setups. The company sells to large companies, attracting 541 customers by the end of its fiscal 2021 that generated $107.8 million in annual recurring revenue, or ARR, by the close of last year.

Couchbase breaks its revenue into two main buckets. The first, subscription, includes software license income and what the company calls “support and other” revenues, which it defines as “post-contract support,” or PCS, which is a package of offerings, including “support, bug fixes and the right to receive unspecified software updates and upgrades” for the length of the contract.

The company’s second revenue bucket is services, which is self-explanatory and lower-margin than its subscription products.

#couchbase, #ec-cloud-and-enterprise-infrastructure, #enterprise, #fundings-exits, #ibm, #nosql, #red-hat, #startups

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Twitch suspends two popular female creators over sexy ASMR streams

Popular Twitch streamers Amouranth and Indiefoxx are the two latest casualties of Twitch’s ongoing battle to enforce its own confusing rules around sexually suggestive content.

Both creators were suspended following ASMR streams that pushed the bounds of Twitch’s community guidelines forbidding content that isn’t quite sexual in nature but is still too risqué for a platform deeply self-conscious about its advertising business. The Amazon-owned company declined to comment on the length of the bans or what provoked them, but pointed TechCrunch toward its rules on sexual content.

It’s possible that both Amouranth (Kaitlyn Siragusa) and Indiefoxx (Jenelle Dagres) will be reinstated Monday, 72 hours after their Friday ban, but both channels remained unavailable at the time of writing. Siragusa confirmed to Polygon that she was suspended after a stream in which she did yoga poses while making ear-licking sounds into a microphone.

The so-called “ASMR-meta” on Twitch, where streamers boost their views by whispering into their microphones or producing licking sounds, sometimes while holding yoga poses, follows the controversy around hot tubs on Twitch that exploded last month. In both instances, some Twitch creators believe that the platform’s rules are selectively enforced.

“With ASMR meta and crazy yoga poses, believe it or not I watched two other girls doing it to the tune of 2-5k views without any bans for months before I folded the activity into ASMR creating the infamous ‘ASMR’ meta,” Siragusa wrote on Twitter. “Those other streamers are still unbanned and continue to do it. My sin was taking inaction as a sign of tacit acceptance, and then blowing the top off the secret and hitting 30k viewers.”

Because both the ASMR meta and the hot tub meta were dominated by female streamers, the whole situation has attracted even more misogyny within the Twitch community, where female streamers are still regularly harassed off the platform.

In a blog addressing the proliferation of women streaming from pools and hot tubs at the time, Twitch wrote that “being found to be sexy by others is not against our rules, and Twitch will not take enforcement action against women, or anyone on our service, for their perceived attractiveness.” The company clarified that while a bathing suit in a bedroom might break the rules, “contextually appropriate” swimwear is allowed.

Twitch also acknowledged the complexity of its own difficult to parse rules:

“Our intention with the Sexually Suggestive policy was to draw a line on content that is overtly or explicitly sexually suggestive, not to ban all content that could be viewed as sexually suggestive – but we acknowledge that our rules are not as clear as they could be.

Prohibiting every form of content that could be interpreted as suggestive would also result in far more restrictions on the video games and premium content that we currently allow, especially considering the ways that female characters are sometimes objectified or presented in a sexualized manner.”

Its solution at the time was to create a “Pools, Hot Tubs, and Beaches” category where that content could live. Most of Twitch’s categories are dedicated to specific games, with most of the platform’s non-gaming streams listed in the popular catch-all category “Just Chatting.”

ASMR has its own category with 2.4 million followers, encompassing ear-tingling ASMR streams that don’t push the boundaries of Twitch’s rules with the more recent crop of those that do. So far, instead of building out a more thoughtful way to corral sexually suggestive content, the company is opting to punish anybody who it decides crosses the line. But it’s possible that could all change: Last month, Twitch said it was working on new policies to further clarify the rules on sexually suggestive content.

Unfortunately for Twitch — and for the female creators disproportionately affected by its uneven policies — the abundance of ear-licking streams suggests that until then, the company will be making these same determinations over and over as it tries to draw a line within a gray area of its own making.

#amazon, #articles, #asmr, #content-moderation, #tc, #twitch, #twitter, #video-hosting

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Electric utility bike startup Ubco raises $10 million to fund its global expansion

Ubco, the New Zealand-based electric utility bike startup, has raised $10 million to fund a global expansion focused on the U.S. market and scale up its commercial subscription service business. 

Ubco’s hero product, the Ubco 2X2, is an all-wheel drive electric motorbike that looks like a dirt bike but rides like a moped. What began as a solution for farmers to get around pastures and farms easily, safely and quickly has expanded to include an urban version of the bike that caters to fleet enterprise customers, gig economy workers and city riders. 

Since its founding in 2015, the company has produced two versions of its 145-pound utility bike: The Work Bike, the original off-road vehicle, and the Adventure Bike, the newer version that’s made for city riding but can handle itself off-road. 

Now that Ubco’s got a fresh cash infusion from the round led by Seven Peak Ventures, Nuance Capital and TPK Holdings, it hopes to continue expanding into existing verticals, like food delivery, postal service and last-mile logistics. The company already works with Domino’s in New Zealand and the United Kingdom, as well as a range of other national clients, like the New Zealand Post, the Defense Force, the Department of Conservation and Pāmu, or Landcorp Farming Limited and other local restaurants and stores.

“We have a strong enterprise market in New Zealand and have developed a strong pipeline of sales internationally,” Timothy Allan, CEO and co-founder, told TechCrunch. 

While direct consumer sales make up for most of Ubco’s revenue at present, the company is pushing aggressively into enterprise, and more specifically, subscription services. The 2X2 is built on an intelligent platform that includes vehicle and power systems, cloud connectivity and data analysis, which enables the subscription model to work alongside fleet management systems. 

Ubco expects revenue to climb from $2.1 million in 2020 to $8.4 million by the end of 2021 as it pushes to increase its annual recurring revenue through subscriptions. Ubco’s subscription model, which costs about $50 to $60 per week ($75 to $85 NZD) for fleet enterprise customers, is being rolled out in New Zealand, Australia, the U.K., Europe and the U.S. this year and into 202. Consumers will get access to the subscriptions as well within the next couple of months, according to a spokesperson for the company. 

Allan sees subscriptions as the future of the EV industry, not just because it allows for a high chance of profitability, but also because it’s far more environmentally sustainable. As the company expands this part of its business model, it hopes to lead the circular economy space.

The company predicts that vehicles run through the subscription model will have four times the life expectancy as those sold outright and produce 80% less carbon overall compared to a combustion vehicle. 

“Subscription means we own the vehicle, so we manage the lifecycle,” said Allan. “So the first life starts at high intensity, and that might be 60,000 kilometers delivering pizza, or it might be 30,000 kilometers on a farm, which are equally hard for different reasons. Then after, that vehicle will go down to a lower intensity application. After that the battery can then be pulled out, and that might go into passive solar storage or something like that.”

Allan sees solving the end-of-life issue as a personal and professional challenge, one with room for creativity since no one has fully figured out the correct way of doing it. He says he takes a bottom up approach when it comes to the engineering of the vehicle in a way that allows for easier recycling.

“Like when you design a battery, fuck putting fire retardant foam into it because you can’t get it back at the end of life,” he said. “So it starts with correctly labeling, engineering with intent so that you’re designing for this type of assembly, and then your business or commercial system needs to support the concept. Now, we’ve got the advantage because the economics and incentives are aligned, and that all aligns with New Zealand’s product stewardship legislation.”

Trying to perfect the circular economy through utility vehicles isn’t just about doing what’s right for the environment. Allan thinks it’ll be a smart business decision in the end, one that will draw in customers and give the company a competitive edge with enterprise clients. 

“This is a part of your journey with us as a customer,” said Allan. “If we can design subscriptions and the life of the vehicle in such a way that you feel good about it, that’s where we’re driving from. Most people want to do the right thing, and we can provide something that logically fits the economics, can be done at scale and can be managed holistically.”

#ebikes, #electric-bikes, #electric-vehicles, #transportation, #ubco

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Spielberg’s Amblin inks multi-year feature film deal with Netflix

In something of an about-face, Amblin Partners, Steven Spielberg’s long-running film production company, will produce several films per year for Netflix. The deal reflects Netflix’s rising star and arguably acceptance by the legendary director of a new order to the cinematic world where home viewing is a first class citizen.

The deal, announced in a press release with few details except glowing quotes from Amblin and Netflix executives. All that is certain is that Amblin will produce “multiple new feature films per year” for Netflix.

“From the minute Ted [Sarandos, Netflix Co-CEO and Chief Content Officer] and I started discussing a partnership, it was abundantly clear that we had an amazing opportunity to tell new stories together and reach audiences in new ways,” said Spielberg in the release.

Those new ways didn’t sound so amazing to Spielberg a couple years ago when he was reportedly pushing to exclude Netflix films from the Academy Awards.

“Once you commit to a television format, you’re a TV movie,” Spielberg told ITV in March of 2019. “I don’t believe films that are just given token qualifications in a couple of theaters for less than a week should qualify for the Academy Award nomination.”

Ultimately no real push was made, though. Whether Spielberg was misrepresented, changed his mind, or just read the room, he has since tempered his position. He has said rather that he simply wants to cherish and protect “the theatrical experience” — understandable from one of the pioneers of the modern blockbuster.

Naturally it’s a huge get for Netflix, which will get a steady stream of Amblin features, though there’s no guarantee of a Spielberg picture. Meanwhile Amblin will continue its longtime partnership with Universal, which fills the more traditional moviemaking and distribution side of things. The company has already broken bread with streaming companies, with shows and films made for and distributed by Netflix and others, but this is most significant partnership so far.

Perhaps it was COVID that suggested to Spielberg and Amblin that streaming platforms are, far from going away, simply the future of the industry in many ways. In a world where the “theatrical experience” is a potential superspreader event and people are perfectly happy to watch (and pay for) a “premiere” at home, it may be better to roll with the punches and hope that things bounce back.

#amblin, #amblin-partners, #media, #netflix

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Sneaker community startup SoleSavy raises $12.5 million Series A to build an end-to-end sneakersphere

Collectibles boomed during the pandemic and while NFT outfits like NBA Top Shot exploded as consumers flirted with newer efforts, the sneaker world grew even more mature with enthusiasts digging deeper into communities dedicated to the hobby/passion/obsession/alternative asset class.

Vancouver’s SoleSavy, a sneaker community dedicated to giving fans a curated place to navigate the world of shoes, with all of its drops, news and rumors, has raised a $12.5 million Series A just months after wrapping a $2 million seed round, showcasing investor enthusiasm behind vertical-specific premium social experiences. The round was led by Bedrock Capital with participation from Dapper Labs’ CEO Roham Gharegozlou, Diplo, Bessemer Ventures and Turner Novak’s Banana Capital, among others.

CEO Dejan Pralica says the company has tripled its user base since its seed raise late last year, while growing its team from 10 to 37 employees in the same period.

Today, SoleSavy’s community is based largely around a network of Slack groups where users can discuss just about everything. Though the platform’s chat communities are organized in Slack now, Pralica sees a future where the company could build its own chat hub for members, something to further tie-in the startup’s app, website and online conversations. The more near-term goal is to grow this community into a hub of trusted buyers and sellers where a peer-to-peer member marketplace can thrive. SoleSavy is at the forefront of a new generation of more social internet marketplaces where vertical-specific communities can gather and grow inside an all-encompassing platform.

“I do envision on end-to-end platform that’s very integrated,” Pralica tells TechCrunch.”I want to make sneakers fun again and enjoyable for the people that are passionate about them.”

Part of that fun has been diminished by free-for-all chat groups that can quickly grow toxic or grow exploitative as moderators look to cash in on their networks, something SoleSavy hopes a more curated approach can bring back.

As my boss (and TC’s resident sneaker head) Matthew said in his write-up of SoleSavy’s seed raise earlier this year:

That positive community vibe is what Pralica says is SoleSavy’s long-term focus and differentiating factor that keeps the 4,000 members across the U.S. and Canada interacting with the group on a nearly daily basis… I’ve been in a dozen or so different groups focused on buying large quantities of each release to re-sell over the years and many of them are, at best, rowdy and at worst toxic. That’s an environment that SoleSavy wanted to stay away from, says Pralica. Instead, SoleSavy tries to court those who want to buy and wear the shoes, trade them and yes, maybe even resell personal pairs eventually to obtain and wear another grail.

The company’s sizable Series A raise just months after a seed showcases that plenty of investors are intrigued by the idea of verticalized marketplaces built up around social communities, Pralica sees the funding as a chance to ignore fundraising for a while and focus on “building for the future” while identifying new opportunities in the sneakersphere.

SoleSavy has been pretty focused on North American sneaker heads so far, but Pralica see that hefty Series A check taking the platform into new markets, including Australia and New Zealand, United Kingdom, Singapore, Japan and broader Europe. The company also plans to use the new funding to build out its editorial network with podcasts, editorial features, original video and member events.

#australia, #bedrock-capital, #bessemer-ventures, #canada, #ceo, #consumer-goods, #culture, #dapper-labs, #europe, #footwear, #groupware, #japan, #matthew, #national-basketball-association, #nba, #new-zealand, #peer-to-peer, #shoe, #singapore, #slack, #sneakers, #software, #tc, #united-kingdom, #united-states, #vancouver

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How to land the top spot in Google search with featured snippets in 2021

Search is changing. Most search engines now don’t just bring up a page of 10 search results and two ads at the top when you type in a query. Instead, Google search queries can bring up a whole range of results, and sometimes answer your questions without you ever having to click through to a page.

Take, for example, a search like this: “how many days until halloween.”

Example of a featured snippet

A featured snippet counting down the days to Halloween. Image Credits: Ryan Sammy

You can see that instead of displaying the top result right away, Google answers the question for you in a rich snippet. It also gives you related search queries featuring countdowns for other holidays. On the right is a knowledge panel from Wikipedia about Halloween, and below that, you’ll see the featured snippets section. These snippets will expand when clicked with answers for related questions.

Featured snippets are collections of sentences or words that Google pulls directly from a webpage relevant to the search query.

Finally, after these answers to your queries and any related questions, you get to the first result. At this point, do you even need to visit the website?

Google search is not what it used to be. We all want to be No. 1 on the search results page, but these days, getting to that position isn’t enough. It might be worth your while to instead go after the top featured snippet position.

What’s a featured snippet?

Featured snippets are collections of sentences or words that Google pulls directly from a webpage relevant to the search query. These snippets are displayed right below the search box and are meant to answer search queries quickly. The snippets can appear in the form of lists, how-to steps, tables, short paragraph boxes and other formats.

#advertising-tech, #ahrefs, #column, #digital-marketing, #ec-column, #ec-how-to, #ec-marketing-tech, #ecommerce, #featured-snippet-optimization, #featured-snippets, #google-search, #search-engine-optimization, #search-results, #seo

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TikTok launches Jump, a third-party integration tool

TikTok announced today the launch of its Jump program, which expands the app’s potential for third-party integrations. TikTok began beta-testing this feature in February with Whisk, a recipe-sharing app, though only select creators could use the feature. Now, Jump will start rolling out to all users with an expanded slate of partners.

Jumps can only be built by third-party providers after being approved through an application process. Platforms like BreathwrkWikipediaQuizletStatMuse, and Tabelog participated in the beta test, and now, TikTok says providers like BuzzFeedJumpropeIRL, and WATCHA will begin implementing their own Jumps in the coming weeks. So, an educational creator could link to Quizlet flashcards to review a concept they explained in a TikTok, or a yoga instructor could share breathing exercises on Breathwrk. For a platform that doesn’t even let all users include a link in their bio yet, this expands the existing tools creators have to engage their audience.

Image Credits: TikTok

TikTok is positioning Jump as a feature that propels discovery. Sean Kim, Head of Product, TikTok US writes, “TikTok has become a destination both to be entertained and to learn; through TikTok Jump, we’re creating that ‘last mile’ of our community’s discovery journey and helping to spark action and deeper interaction both on and off the platform.”

Jump seems similar to competitor Snapchat’s Minis feature, which are lightweight, simplified versions of apps that live in the Chat section of the app. Both Minis and Jump integrations can be built using HTML5. WeChat facilitates over $250 billion dollars in annual transactions through its own mini apps – there were over a million mini apps on WeChat as of 2018.

While Instagram has been ramping up its e-commerce features on Reels, its TikTok competitor, it’s possible that Jump could later be used to sell items featured in a video. In December, Walmart piloted video shopping on TikTok, which performed well enough that they did it again in March. But for now, it seems like Jump is being used to improve user experience and deepen the platform’s relationships with third-party partners.

#apps, #buzzfeed, #bytedance, #computing, #head, #jumprope, #quizlet, #reels, #software, #tiktok, #video-hosting, #walmart

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India proposes tougher e-commerce rules to address ‘widespread cheating’ complaints

India proposed on Monday banning flash sales on e-commerce platforms and preventing their affiliate entities from being listed as sellers as the South Asian market looks to further tighten rules that could hurt the future prospects of Amazon and Walmart’s Flipkart in the world’s second largest market.

The proposal, unveiled by India’s Ministry of Consumer Affairs on Monday evening, comes at a time when brick-and-mortar retailers in India have ramped up their complaints to raise concerns about the what they allege as unfair practices employed by Amazon and Flipkart as they expand their operations in the country.

In its proposal, India’s Ministry of Consumer Affairs said that e-commerce firms should not be allowed to hold flash sales that are very popular during festive season in the country. During flash sales, which are akin to Amazon’s Prime Day, e-commerce firms see some of their biggest spikes in customer orders as brands offer heavy discounts on their products.

“Certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back to back’ or ‘flash’ sales wherein one seller selling on platform does not carry any inventory or order fulfilment capability but merely places a ‘flash or back to back’ order with another seller controlled by platform. This prevents a level playing field and ultimately limits customer choice and increases prices,” the ministry said in a statement.

As it has done with its recent IT rules, India is also proposing that e-commerce firms appoint Chief Compliance Officer, a nodal contact person for 24×7 coordination with law enforcement agencies, officers to ensure compliance to their orders and Resident Grievance Officer for redressing of the grievances of the consumers on the e-commerce platform.

“This would ensure effective compliance with the provisions of the Act and Rules and also strengthen the grievance redressal mechanism on e-commerce entities,” the ministry said.

Amazon said it was reviewing the proposed policies while Flipkart had no immediate comment.

In a court hearing on Monday, a Flipkart lawyer said the company sees nothing wrong in offering to cut charges for sellers on its platform if they lower product prices.

The ministry said it is making the proposal, for which it plans to seek industry feedback over the next 15 days, after receiving “several complaints against widespread cheating and unfair trade practices being observed in e-commerce ecosystem.”

Additionally, the new proposal asks e-commerce firms to introduce a mechanism to identify goods on their platforms based on country of origin and suggest alternatives to “ensure fair opportunity to domestic goods.”

The announcement comes at a time when Flipkart is in talks to raise as much as $3 billion and explore the public markets. Both Amazon and Flipkart are also the subject of an ongoing antitrust probe in India.

This is a developing story. More to follow…

#amazon, #amazon-india, #asia, #ecommerce, #flipkart, #india, #walmart

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Toyota Research Institute shows how its robotics work with difficult surfaces in the home

Following this morning’s announcement that Hyundai has closed its acquisition of Boston Dynamics, another automotive company has posted some robotics news. The Toyota Research Institute announcement is decidedly less earthshaking than that big deal — if anything, it’s more of a progress check on what the division has been working on.

Of course, incremental updates tend to be the name of the game when it comes to robotics of all sorts. This does, however, shed some interesting light on the work TRI has been doing in the home. Today the company announced some key advances to robotics it has designed to perform domestic tasks.

“TRI roboticists were able to train robots to understand and operate in complicated situations that confuse most other robots, including recognizing and responding to transparent and reflective surfaces in a variety of circumstances,” the Institute writes in a blog post.

Image Credits: Toyota Research Institute

With settings like kitchens, the robots come in contact with a variety of transparent and reflective surfaces — a hurdle for traditional vision systems. Specifically in the kitchen, things like a transparent glass or reflective appliance can create an issue.

“To overcome this, TRI roboticists developed a novel training method to perceive the 3D geometry of the scene while also detecting objects and surfaces,” TRI Robotics VP Max Bajracharya said in a post describing the research. “This combination enables researchers to use large amounts of synthetic data to train the system.” Using synthetic data also alleviates the need for time-consuming, expensive or impractical data collection and labeling.

With an aging population in its native Japan, Toyota has made eldercare a key focus in its ongoing robotics research. So it makes a lot of sense that sort of robotics tasks form a core of much of its research in the category, as well as those elements that bleed into the work it’s doing on Woven City. And certainly the company gets credit for putting in some work here, before the orchestrated appearances we’ve seen of robotics offerings from companies like Samsung.

Image Credits: Toyota Research Institute

“It’s not only about keeping people in their homes longer and living independently,” Bajracharya  recently told me in an interview. “That’s one aspect of it — but in Japan, in 20-30 years, the number of people who are over 65 will roughly be the same as the number of people who are under 65. That’s going to have a really interesting socioeconomic impact, in terms of the workforce. It’s probably going to be much older and we at Toyota are looking at how these people can keep doing their jobs, so they can get the fulfillment from doing their jobs or staying at home longer. We don’t want to just replace the people. We really think about how we stay human-centered and amplify people.”

#robotics, #toyota, #toyota-research-institute, #tri

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Uber to become the sole owner of grocery delivery startup Cornershop

Uber has reached a deal to become the sole owner of Latin American delivery startup Cornershop, just one year after acquiring a majority stake in the company. The ride-hailing giant said in a regulatory filing Monday that it will purchase the remaining 47% interest in Cornershop in exchange for 29 million shares. The transaction is expected to close in July.

Uber announced in 2019 plans to take a majority ownership in Cornershop. That transaction wasn’t completed until the third quarter of 2020 other than in Mexico, which closed in January 2021. This latest agreement, which was reached June 18 and reported Monday, will make Cornershop a wholly owned subsidiary of Uber. The deal is a logical next-step in the Uber-Cornershop relationship, a source familiar with the matter told TechCrunch.

The deal suggests Uber’s bullishness in delivery hasn’t waned. With Cornershop as wholly owned subsidiary, Uber can beef up its grocery delivery options, a service made popular during the pandemic. The company started offering grocery delivery in select cities across Latin America, Canada and the U.S. last summer after it acquired Postmates in a deal valued at $2.65 billion. Uber CEO Dara Khosrowshahi said in a statement that the company’s grocery and new verticals business has exceeded a $3 billion annual bookings run rate for this year.

“That’s why we’re excited to deepen our commitment to the team at Cornershop and to support their vision as they scale globally,” he added. “Together, we will double down on the strategy of bringing same-day grocery delivery to the Uber platform worldwide.”

Cornershop, which is headquartered in Chile, was founded in 2015 by Oskar Hjertonsson, Daniel Undurraga and Juan Pablo Cuevas. The company expanded its operations to eight countries up and down the Americas, including Chile, Mexico, Brazil, Colombia, Costa Rica, Peru, the U.S. and Canada. The company raised $31.7 million over four rounds of funding from investors that include Accel and Jackson Square Ventures.

Uber wasn’t the only grocery service with its eyes on Cornershop; the startup was supposed to be acquired by Walmart in a $225 million deal, but it ultimately fell through after Mexican antitrust regulators blocked the deal from moving forward. It is unclear whether this deal will be subject to the same risks.

Uber faces stiff competition from grocery retailers themselves, many of whom offer delivery through partnering with startups like DoorDash or Favor Fleet.

TechCrunch has reached out to Cornershop for comment. We will update the story if they respond.

The story has been updated to include Uber’s comments.

#apps, #cornershop, #dara-khosrowshahi, #exit, #grocery-delivery, #postmates, #startups, #tc, #uber

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Can the military academies compete with Stanford and Harvard in venture? Two veterans are raising $50M to find out

Soldier-entrepreneurs are unfortunately still a rare breed in Silicon Valley, despite the region’s origins in Cold War defense spending. While the courage and perseverance required to fight in an overseas battlefield (or the office bureaucracy on base) would seem a perfect fit for the travails of the founder, the reality is that the journey from solider to CEO is a long and arduous transition.

A couple of organizations have popped up over the years to make the leap easier. For instance, Patriot Boot Camp, which I profiled back in 2018, works in the earliest days of the startup journey to help veteran founders learn the key skills of building a company and fundraising. Yet, there still remains a lack of networking and funding that particularly targeted this group of entrepreneurs.

That’s the opportunity that Emily McMahan and Sherman Williams, the two managing partners of Academy Investor Network, saw when looking at their peers at the five U.S. service academies. The firm is targeting a final first fund of $50 million, and today announced the close of its anchor investor, insurance and financial services provider USAA, which will invest $2.5 million. Prior to USAA, the fund’s first investor was Scout Ventures, which focuses on frontier tech and where McMahan is a venture partner.

McMahan graduated from West Point in 2001 right as the War on Terror began. I “went really straight into the action post 9/11,” she said. From there, she pivoted into a startup targeting the federal market, before founding Capitol Post, which taught entrepreneurial skills to veterans and their spouses and also had a co-working space in northern Virginia before folding into Bunker Labs in 2019.

“My career has always been focused around community, working with entrepreneurs, and really kind of harnessing the energy of the veteran entrepreneur community,” she said. She is based in DC, and also sits on the board of Patriot Boot Camp.

The Pentagon, headquarters of the Department of Defense. Jeremy Christensen via Getty Images

Meanwhile, Williams hails from the Naval Academy, graduating in 2003 before going on four deployments in the midst of the war in Iraq, which started just weeks before his graduation. He ultimately ended up at Chicago’s Booth School, where he studied finance and pivoted his career into investment banking focused on M&A. “I knew I needed to learn a lot,” he said. I “started investing and advising startups while as a banker, and then made made the flip to work with Emily to start AIN Ventures.” He’s based in New York City.

The firm’s first foray into venture was building an investment syndicate composed of alums of the five service academies, which was launched in June 2020. “We’ve got astronauts, we’ve got Navy SEALs,” McMahan said. “We really think that we’re very well positioned as a group, because we’ve all lived it on active duty, and now we continue to see it and continue to serve.” The syndicate has invested in a handful of deals since launching, including into Polco, an online community engagement platform for local governments, and online identity service ID.Me.

“This is also where a lot of our service academy grads are excited to have a seat at that table and help these companies scale, connect, hire, all of those things,” McMahan said. “So we’re really excited to be on par with some of these other institutions — the Harvards, the Stanfords — who also have these types of syndicates.“

Williams said the goal with the syndicate was to work out the investment processes for the firm before turning toward a more traditional VC fund model. They kicked off fundraising in January.

The new fund has a two-track thesis of investing in veterans across industries while also selecting startups building “dual-use” technologies that are useful to the private sector and governments. “Civic technology, disaster tech — think FEMA — defense tech, obviously the military, intelligence agencies, and space tech. Things in and around climate that will affect constituents and governments,” Williams said as examples where he sees the firm investing. “We want the company, when it achieves maturity, to achieve the majority of the revenue outside the government.”

The firm centers its investing around the stage right after product-market fit, although since the veterans pipeline can be a real gauntlet, Williams said the firm will selectively invest at the pre-seed stage there.

The firm is also seeking to diversify the ranks of both venture capitalists and founders. McMahan said, “I’m a female, Sherman’s an African American, you know, even in the military, we’re sort of a unique team, and so we think we are also able to reach out to a much broader audience of underrepresented minorities, women, and groups, and we feel like we’re pretty attractive in terms of that as a team.“

USAA’s anchor investment is perhaps not surprising given the financial services company’s focus on active service members and veterans. It has made other investments and sponsorships around veteran entrepreneurship, including into Patriot Boot Camp. The company has also invested directly in startups such as PrecisionHawk and Coinbase.

#government, #usaa, #venture-capital

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Porsche to make high-performance batteries in joint venture with Customcells

Luxury sports car manufacturer Porsche AG is going into the battery business. The automaker said Monday it plans to open a new factory that will produce high-performance cells through a joint venture with lithium-ion battery developer Customcells.

Porsche invested in “the high double-digit millions” in the new joint venture, dubbed Cellforce Group GmbH, executive board member Michael Steiner told reporters in a media briefing ahead of the announcement. The factory also benefited from a €60 million ($71.4 million) investment from the German government and the state of Baden-Württemberg, where it will be located. Chemical company BASF SE was selected to supply the cathode materials.

The batteries will use silicon as the anode material, which Porsche says will significantly boost the energy density and their capacity to withstand high temperatures – both important variables for racing cars, which must be recharged quickly, but challenging in battery production (batteries don’t tend to like getting very hot).

For that reason, the factory will be small scale, at least compared to other automakers such as the 35 gigawatt-hour “gigafactory” capacity at the Tesla and Panasonic joint facility in Sparks, Nevada or even its parent company VW’s plan to bring 240 GwH of production to Europe by 2030. Porsche and Customcells’ aim is an annual capacity of 100 megawatt-hours, or around enough batteries for 1,000 vehicles, starting in 2024. The initial workforce is expected to grow from around 13 people to up to 80 by 2025.

The automaker has no plans to scale the technology for use in Porsche’s more mainstream lineup of vehicles, Steiner said, though he noted that there may be a chance for higher volume in the future if the company sees a potential to bring down production costs. “In this market, we are looking for special purpose cells for high-end cars and motorsports, and this is not available in the market today,” he said.

It may be a challenge to scale this technology to passenger vehicles. The silicon anode-based cell chemistry has not shown the capacity to function in very cold conditions or to remain stable over many charging cycles, Porsche said in a statement. But it wouldn’t be the first time that a Porsche vehicle benefited from technology developed for the race track: its leading electric model Taycan borrowed many of its technical features from the Porsche 919 Hybrid racing car.

Although the first vehicles to use these batteries will be Porsche-made, Steiner said the technology will be made available to other brands in the Volkswagen Group, like Lamborghini or Bugatti.

“The battery cell is the combustion chamber of the future,” Porsche CEO Oliver Blume said in a statement Monday. “This joint venture allows us to position ourselves at the forefront of global competition in developing the most powerful battery cell and make it the link between the unmistakable Porsche driving experience and sustainability. This is how we shape the future of the sports car.”

#automotive, #battery-ventures, #cellforce-group, #customcells, #electric-vehicle-batteries, #porsche, #transportation

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Biden’s executive order on cybersecurity should include behavior transparency

The Biden administration this spring announced an executive order designed to strengthen government cybersecurity defenses in the wake of several major recent hacks, including the SolarWinds, Microsoft Exchange Server and Pulse Secure incidents, which impacted numerous federal agencies and private companies. The order’s importance was underscored by the DarkSide ransomware attack on Colonial Pipeline just a few weeks later.

One key element of the cyber executive order is a “software bill of materials” (SBOM) that vendors would be required to provide as part of the federal procurement process. The SBOM would detail the exact software components utilized in a given product, including any open-source components, making it much easier and faster for federal agencies to determine whether they are subject to a vulnerability uncovered in one of these components.

The SBOM is an important step in shoring up federal cybersecurity, but it’s not enough. Understanding the software components included in various products will help agency security teams react more quickly when vulnerabilities come to light, but in other scenarios, like SolarWinds-style supply-chain attacks that surreptitiously insert software components, its impact is limited.

Establishing standards at the federal level for disclosures about software products will benefit cybersecurity in the private sector, as well as improve the overall security of the software supply chain.

That’s why the Biden administration should extend the cyber executive order to include not only an SBOM, but also “behavior transparency.”

Transparency requirements are not a new concept in technology. Certificate transparency (CT) is a public ledger of all certificates issued by any public certificate authority (CA) that provides a framework for monitoring and auditing CA activity, while Apple’s recently announced App Tracking Transparency allows users to see what activity apps are tracking and opt out. Behavior transparency is a proposed application of this concept to known software behaviors.

The purpose of a behavior transparency framework is to enumerate the expected actions of interest that a given piece of software will take on a device or on the network. This helps security analysts distinguish between expected noise and indications of compromise. This, in turn, can give security teams an advantage in identifying the exploitation of unknown vulnerabilities in any proprietary or open-source software.

The good news is that the enumeration of common software behaviors is already a standard industry practice for external network activity. Most major software vendors, including Meraki, McAfee, Tenable, LogMeIn/GoToMeeting, and my own company, ExtraHop, already publish lists of common product behaviors. Even SolarWinds has documentation describing its network behaviors.

But the Biden administration can help effect critical changes that improve upon this industry practice and improve the overall security posture for public and private organizations alike.

Establish standards for behavior transparency

First, the cyber executive order should form a working group in partnership with representative software and security software vendors, as well as organizations such as MITRE, to create standards for the types of network activity that must be included for full behavior transparency.

At a minimum, this should include things like external network destinations, internal network connection behavior with other software components, and, where applicable, a list of associated network ports and the purposes for which those ports are used. The behavior transparency framework should also include other network behavior, especially (but not limited to) anything that looks like scanning or reconnaissance behavior.

Make behavioral data available to common security tools

Second, the cyber executive order should mandate that known software behaviors be published in a machine-readable format such as JSON or CSV that could be ingested into common security products like security information and event management (SIEM), firewalls, endpoint protection platforms, network detection and response, and change management tools.

This is a crucial distinction from the current model, in which most behaviors are listed on a webpage or in a PDF that isn’t machine-readable. With this change, common security tools could use that machine-readable behavioral data to help build baselines for activity within an organization to more quickly and accurately detect deviations that indicate compromise. Meraki is already doing this by providing its list in CSV format.

Centralize access to behavioral information

Third, the cyber executive order should establish a clearinghouse for behavior transparency data, administered by the Cybersecurity and Infrastructure Security Agency or another appropriate federal agency. The status quo is to hunt around on a vendor’s website, consult their in-product documentation or open a support case to find out about network behavior. If the information provided is incorrect, that’s also a support case.

The current decentralized approach is deeply problematic. Unfettered network access for enterprise software products introduces substantial security risk — Zero Trust frameworks have been established to prevent precisely this — but typical practitioners do not have the time or expertise to individually track down the expected behaviors of each piece of enterprise software they have in the environment. Without centralized access to behavior transparency data, even the best Zero Trust implementations will have major gaps surrounding enterprise software.

A clearinghouse would provide a centralized repository for behavior transparency data, organized by company, product and product version. A forum like GitHub is an ideal mechanism for such a clearinghouse, providing a widely used, centralized repository for this information.

Streamline feedback between users and vendors

Fourth, the clearinghouse should include a mechanism by which product users can easily provide feedback to software vendors. Feedback can be in the form of issues or even pull requests, though the companies should be involved in approving changes. This way, deficiencies in the behaviors can be pointed out in a public forum. Most deficiencies will be for reasons like a product update that wasn’t reflected in the behavior transparency data, though as time goes on, companies will ideally make it a practice to make sure these are kept up to date. But there will also be true positives found.

Protecting the software supply chain with behavior transparency

The SolarWinds software supply chain attack, first disclosed in December 2020, illustrates and underscores the importance of behavior transparency. Prior to December 11, when FireEye first identified the vulnerability in the SolarWinds Orion software, at least two other cybersecurity companies, Palo Alto and Fidelis, identified that their SolarWinds installations communicating with the attacker-controlled “stage 1” avsvmcloud[.]com domain. Palo Alto observed and blocked additional malicious behavior, but at the time neither company determined that the communication with avsvmcloud[.]com itself was suspect. That’s due in large part to the notorious amount of “noise” involved in looking at network data.

But if more organizations had ready access to SolarWinds’ behavior transparency data, as well as a forum in which to compare deviations from the baseline, things might have played out differently.

SolarWinds Orion doesn’t reach out to a lot of external destinations, so when the first stage of the supply chain attack started hitting subdomains off of “appsync-api.eu-west-1.avsvmcloud[.]com,” an analyst on a threat hunt running a SIEM query, or a machine-learning-based EDR or NDR product armed with that information, might have more quickly determined that something was amiss.

Likewise, a low-friction public feedback mechanism could have tipped off SolarWinds and the industry that what seemed like noise in isolation (“appsync-api, seems legit?”) was actually something far more nefarious.

The cyber executive order, alongside the sanctions on Russia, are strong early indications that the Biden administration intends to take a far more proactive approach to cybersecurity. Critical to the success of these efforts will be the partnership the administration forges with private-sector technology providers. Establishing standards at the federal level for disclosures about software products will benefit cybersecurity in the private sector, as well as improve the overall security of the software supply chain.

#colonial-pipeline, #column, #computer-security, #cybercrime, #cybersecurity, #event-management, #extrahop, #government, #opinion, #russia, #security, #software-vendors, #solarwinds, #supply-chain-attack, #tc

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Seed is not the new Series A

The incredible success of the cloud business applications space in recent years has driven up valuations and fundraising across all stages of venture investment. That has in turn increased VC fund sizes, led to massive cloud IPOs and brought a new cadre of investors to further fuel the fire.

The median Series A raised by cloud companies these days is about $8 million and can often go well above $10 million, according to PitchBook data from the first quarter of 2021. Series Cs now routinely include secondary capital for founders, and many Series Ds are above $100 million with valuations in the billions.

There is a widening gap in the funding continuum between angel/seed funding at inception and the new-age $10 million Series A at $2 million in ARR.

Such an influx of capital and interest has upended many structures and long-held norms about how startups are funded. Venture funds continue to grow and must write larger checks, but ever-higher valuations force many firms to hunt for opportunities earlier. The VC alphabet soup has been spilled, making A rounds look like Bs used to, and the Bs seem like the Cs of old.

Which begs an interesting question: Is the seed round the new Series A?

We don’t think so.

Seed rounds have certainly grown — averaging about $3 million nowadays from around $1 million to $2 million previously — but otherwise, seed investments are the same as before and remain very different from Series As.

#angel-investor, #cloud, #column, #corporate-finance, #ec-cloud-and-enterprise-infrastructure, #ec-column, #ec-news-and-analysis, #private-equity, #saas, #seed-money, #startup-company, #startups, #venture-capital

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Equity Monday: China hates crypto, and the Vision Fund’s vision lives on

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

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.

Our live show is this week! And we’re very excited about it! Details here, and you can register here. It’s free, of course, so swing by and hang with us.

Back on theme, we had a lot to get through this morning, so inside the show you can find the following and more:

  • The Chinese cryptocurrency clampdown is a big damn deal: With lots of the nation’s mining capacity heading offline, there’s a scramble to relocate rigs and generally figure out what a crypto market sans China might look like.
  • In the wake of the news, the value of cryptocurrencies fell. As did shares of Coinbase this morning in pre-market trading.
  • Facebook’s Clubhouse rival is out. The American social giant follows Spotify into the live-audio market. You have to give it to modern software companies, who thought that they could be both leading tech shops and Kinko’s clones at the same time?
  • Revolut is unprofitable as hell but increasingly less so. That could be good news for fintech as a whole.
  • Amber Group raised $100 million; Forto raised $240 million.

See you this Thursday at the live show!

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

#audio, #china, #clubhouse, #coinbase, #crypto, #cryptocurrencies, #equity-monday,