As more and more workplaces pause or end the expectation of three days a week in the office, a large-scale return may never be on the horizon.
A short-term rental gold rush is fueling concern for the area’s signature trees and debates about whether the nature of life in the desert of southeastern California is changing forever.
TV-themed itineraries are on the rise, taking travelers on adventures with familiar shows during a time of uncertainty.
The revenue is enticing, but the work can be daunting. We spoke with experts about the dos and don’ts of the short-term rental market.
Wars bring out the best and the worst of humanity. Surprises are the only constant.
As Ukrainians flood into Poland, the travel industry has become part of an effort to supply transportation, accommodations and more to people fleeing the Russian invasion.
The bill would ensure that victims have the option of suing in federal, state or tribal court, depriving perpetrators of a secretive process that can weigh heavily in their favor.
New legislation will require hosts of short-term rentals to register with the city — the latest move in a long battle between New York and the rental companies.
Romantic partners and families rejoiced as they met in airports after long months of separation because of pandemic travel restrictions.
Cities and counties will vote on measures, like tax hikes and curbs on Airbnb, aimed at creating more affordable housing.
A U.S. federal judge last week struck down Apple rules restricting app developers from selling directly to customers outside the App Store.
Apple’s stock fell 3% on the news, which is being regarded as a win for small and midsize app developers because they’ll be able to build direct billing relationships with their customers. But Apple is just one of many Big Tech companies that dominate their sector.
The larger issue is how this development will impact Amazon, Facebook, Grubhub and other tech giants with online marketplaces that use draconian terms of service to keep their resellers subservient. The skirmish between Apple and small and midsize app developers is just a smaller battle in a much larger war.
App makers pay up to 30% on every sale they make on the Apple App Store. Resellers on Amazon pay a monthly subscription fee, a sales commission of 8% to 15%, fulfillment fees and other miscellaneous charges. Grubhub charges restaurants 15% of every order, a credit card processing fee, an order processing fee and a 10% delivery commission.
Like app developers, online resellers and social media influencers are all falling for the same big lie: that they can build a sustainable business with healthy margins on someone else’s platform. The reality is the App Store, online marketplaces and even social networks that dominate their sectors have the unilateral power to selectively deplatform and squeeze their users, and there’s not much to be done about it.
Healthy competition exists inside the App Store and among marketplace resellers and aspiring social media influencers. But no one seems to be talking about the real elephants in the room, which are the social networks and online marketplace providers themselves. In some respects, they’ve become almost like digital dictators with complete control over their territories.
It’s something every small and midsize business that gets excited about some new online service catering to their industry should be aware of because it directly impacts their ability to grow a stable business. The federal judge’s decision suggests the real goal in digital business is a direct billing relationship with the end user.
On the internet, those who are able to lead a horse to water and make them drink — outside the walled gardens of digital marketplace operators like Uber, Airbnb and Udemy — are the true contenders. In content and e-commerce, this is what most small and midsize companies don’t realize. Your own website or owned media, at a top-level domain that you control, is the only unfettered way to sell direct to end users.
Mobile app makers on Apple’s App Store, resellers on Amazon and aspiring content creators on Instagram, YouTube and TikTok are all subject to the absolute control of digital titans who are free to govern by their own rules with unchecked power.
For access to online marketplaces and social networks, we got a raw deal. We’re basically plowing their fields like digital sharecroppers. Resellers on Amazon are forced to split their harvest with a landlord who takes a gross percentage with no caps. Amassing followers on TikTok is building an audience that’s locked inside their venue.
These tech giants — all former startups that built their audiences from scratch — are free to impose and selectively enforce oppressive rules. If you’re a small fry, they can prohibit you from asking for your customer’s email address and deplatform you for skimming, but look the other way when Spotify and The New York Times do the same thing. Both were already selling direct and through the App Store prior to Friday’s ruling.
How is that competitive? Even after the ruling, Big Tech still gets to decide who they let violate their terms of service and who they deplatform. It’s not just their audience. It’s their universe, their governance, their rules and their enforcement.
In the 1948 court case United States v. Paramount Pictures, the Supreme Court ruled that film studios couldn’t own their own theaters because that meant they could exclusively control what movies were screened. They stifled competition by controlling what films made it to the marquee, so SCOTUS broke them up.
Today, social networks control what gets seen on their platforms, and with the push of a button, they can give the hook to whoever they want, whenever they want. The big challenge that the internet poses to capitalism is that the network effect is fundamentally anti-competitive. Winner-take-all markets dominated by tech giants look more like government-controlled than free-market economies.
On the one hand, the web gives us access to a global marketplace of buyers and sellers. On the other, a few major providers control the services that most people use to do business, because they don’t have the knowledge or resources to stand up a competitive website. But unless you have your own domain and good search visibility, you’re always in danger of being deplatformed and losing access to your customers or audience members with no practical recourse.
The network effect is such that once an online marketplace becomes dominant, it neutralizes the competitive market, because everyone gravitates to the dominant service to get the best deal. There’s an inherent conflict between the goals of a winner-takes-all tech company and the goals of a free market.
Dominant online marketplaces are only competitive for users. Meanwhile, marketplace providers operate with impunity. If they decide they want to use half-baked AI or offshore contractors to police their terms of service and shore up false positives, there’s no practical way for users to contest. How can Facebook possibly govern nearly 3 billion users judiciously with around 60,000 employees? As we’ve seen, it can’t.
For app makers, online resellers and creators, the only smart option is open source on the open web. Instead of relying on someone else’s audience (or software for that matter), you own your online destination powered by software like WordPress or Discord, and you never have to worry about getting squeezed when the founders go public or their platform gets bought by profit-hungry investment bankers. Only then can you protect your profit margins. And only then are the terms of service the laws of the land.
Politics aside, as former President Donald Trump’s deplatforming demonstrated, if you get kicked off Facebook and Twitter, there’s really nowhere else to go. If they want you out, it’s game over. It’s no coincidence Trump lost his Facebook and Twitter accounts on the same day the Republicans lost the Senate. If the GOP takes back the Senate, watch Trump get his social media accounts back. Social networks ward off regulators by appeasing the legislative majority.
So don’t get too excited about the new Amazon Influencer Program. If you want to build a sustainable digital business, you need an owned media presence powered by software that doesn’t rake commissions, have access to your customer contact information and has an audience that can’t be commandeered with an algorithm tweak.
After the Delta variant disrupted plans to reopen after Labor Day, many businesses pushed their targets further out or left them open-ended.
After a difficult year, the travel industry is gaining steam again this summer and Thatch is carving out a space for itself in the sector by enabling travel creators to monetize their recommendations.
Today the company announced a $3 million Seed II round led by Wave Capital. They were joined by Freestyle VC’s Jenny Lefcourt, Netflix co-founder Marc Randolph and Airbnb’s head of data science for user trust, Kapil Gupta. It brings Thatch’s total investment to $5.2 million since the company was founded by West Askew, Abby West and Shane Farmer in 2018.
Prior to the global pandemic, the company was a subscription-based consumer travel service that matched travelers with someone who would essentially plan their trips from top to bottom. Then the industry came to a grinding halt in 2020, and the co-founders saw a bigger need to help travel creators — those who share their experiences on social media — better connect to their followers and capture value for the travel recommendations, tips and perspectives they create.
“We noticed consumers were willing to pay individuals for their time and expertise,” Abby West told TechCrunch. “Increasingly, instead of going to travel agencies, they are going to Instagram or YouTube and then DM’ing them for information. We are formalizing that relationship so that the travel creator can get paid and can then provide a better experience for the end user.”
Askew and West say travel creators drive billions of dollars of consumer travel spending. Thatch’s free mobile app provides tools for them to build their own travel-based businesses in order to curate, share and will soon be able to sell interactive travel guides and planning services. Thatch makes money when the creators do, taking a small percentage of the transactions.
While the pandemic was detrimental to the travel industry, it gave the Thatch team time to build out its app, and now it is focused on building the creator side and marketing to attract creators to the app. This is where the new funding will come in: The company intends to hire additional engineers, build out new content and launch new features for selling or earning tips on interactive guides that creators produce in the app.
(opens in a new tab)
Among the travel creators already using the app, their audience reach is over 12 million, and the company saw a bump in usage in July, a sign that the travel industry is improving, Askew said.
Following the seed, the company will go live with the monetization and booking features so the creators can get paid, and it is looking at a strong first quarter in terms of potential bookings. The founders also want to attract larger creators and build a network for them, with Askew saying they need to be considered like the small businesses that they are and wants to help them grow.
“There is unfortunately a graveyard full of travel companies, but we are doing things differently,” West said. “We are unique with our people-to-people angle, and in this case, with people who have a built-in audience and who are trusted by that audience. That is something we don’t see in this space today.”
Wave Capital’s general partner Riley Newman said he and his other general partner, Sara Adler, both former Airbnb executives, were introduced to the company through one of Thatch’s existing investors.
His firm typically invests in marketplaces at the seed stage and the investment in Thatch marks the first into the travel sector, saying, “It is one we know well from Airbnb and a good moment to dive back into the industry.”
The travel market is poised for growth in the years ahead, especially with the pent-up demand for travel post-pandemic, Newman said. At the same time, the creator economy is on the same trajectory to democratize travel planning similar to the way he said Airbnb did, and that was a compelling vision for Wave Capital.
“Travel planning has been around for a long time, but this is an interesting new angle,” Newman added. “We look at the founding team and see Abby and West having complementary backgrounds and energy. This is a good moment for travel given their approach, and their concept for attacking the market is right and needed.”
Airbnb announced on Thursday it will allow anyone with available space to sign up to provide housing for Afghan refugees. The new initiative aims to build upon Airbnb’s initial commitment to provide free temporary housing for 20,000 Afghan refugees.
The company says existing Airbnb hosts and anyone else can sign up to provide free or discounted stays to Afghan refugees through its dedicated website for emergency housing. Airbnb notes it waives its fees on all refugee stays. For those who are unable to open up their homes but are still eager to help, Airbnb says they can aid the crisis by donating money to support housing for Afghan refugees.
On Tuesday, Airbnb announced its initial commitment to house 20,000 Afghan refugees and said the company will cover the costs for the housing, using funds from contributions to its nonprofit Airbnb.org and a specific Refugee Fund established by that division, as well as personal contributions from Airbnb CEO Brian Chesky himself.
“Since the announcement, we have received enormous interest from people within the Airbnb community and beyond looking for ways to support Airbnb and Airbnb.org’s work with partner organizations to house Afghan refugees. In many cases, we have heard from people who want to offer their space free of charge,” the company said in a statement. “The response has been overwhelming and today we’re sharing more details on how people can help us expand on efforts to meet this unprecedented need for temporary, emergency stays for refugees arriving from Afghanistan.”
Airbnb.org and Airbnb are also extending support to the federal government, along with states and cities that have expressed interest in receiving refugees to help provide stays as needed.
The company’s housing initiatives come at a time when tens of thousands of people are attempting to flee Afghanistan. Amid the crisis, companies and governments are facing increasing pressure to aid refugees fleeing the country. There are currently nearly 2.5 million registered refugees from Afghanistan, according to the United Nations High Commissioner for Refugees.
Airbnb CEO Brian Chesky said on Tuesday the company plans to offer free temporary housing to 20,000 Afghan refugees around the world amid the Taliban’s rise to power in Afghanistan.
Chesky said the company will cover the costs for the housing, using funds from contributions to its nonprofit Airbnb.org and a specific Refugee Fund established by that division, as well as personal contributions from Chesky himself. Airbnb will also work alongside NGOs through Airbnb.org, which provides people with emergency housing in times of crisis.
“The displacement and resettlement of Afghan refugees in the U.S. and elsewhere is one of the biggest humanitarian crises of our time. We feel a responsibility to step up,” Chesky said in a tweet.
In a follow-up tweet, Chesky said Airbnb hosts who are willing to offer up their residences will soon be able to sign up to accommodate a refugee family fleeing Afghanistan. Airbnb plans on sharing more details on how hosts and the broader community can support the initiative. Chesky said he hopes Airbnb’s initiative will inspire other business leaders to do the same.
The company said it has already worked with partners to place 165 refugees in safe housing after reaching the U.S. this past weekend. Airbnb plans to work with resettlement agencies to evolve the initiative and provide support as necessary.
Airbnb’s initiative comes at a time when tens of thousands of people are attempting to flee Afghanistan. Amid the crisis, companies and governments are facing increasing pressure to aid refugees fleeing the country. There are currently nearly 2.5 million registered refugees from Afghanistan, according to the United Nations High Commissioner for Refugees. Since August 15, countries have evacuated around 58,700 people from the country’s capital, Kabul.
“As tens of thousands of Afghan refugees resettle around the world, where they stay will be the first chapter in their new lives. For these 20,000 refugees, my hope is that the Airbnb community will provide them with not only a safe place to rest and start over, but also a warm welcome home,” Chesky said in a statement.
It’s worth noting Airbnb has historically provided free housing to those in need over the past few years. In 2017, the company offered free housing to stranded refugees, students and green card holders affected by former President Donald Trump’s executive order limiting refugees. More recently, Airbnb provided free or subsidized housing for 100,000 healthcare workers amid the COVID-19 pandemic. Airbnb notes it has connected approximately 25,000 refugees to temporary housing over the past four years.
The company said it was working with resettlement agencies. It did not specify how long refugees could stay in the apartments and houses.
Newly reported financial data from Bird, an American scooter sharing service, shows a company with an improving economic model, and a multi-year path to profitability. However, that path is fraught unless a number of scenarios all work out, in concert and without a glitch.
Bird, well-known for its early battles with domestic rival Lime, is pursuing a SPAC-led deal that will see it go public and raise fresh capital. The former startup is merging with Switchback II Corporation in a deal that values it at around $2.3 billion, including a $160 million PIPE (private investment in public equity) component. (Note: The group purchasing TechCrunch’s parent company from its own parent company, is part of the Bird PIPE.)
The Exchange explores startups, markets and money.
COVID-19 hasn’t been kind to Bird and similar companies around the world. As many around the world stayed home, usage of shared-asset services and ride-hail applications fell sharply. Bird saw rides decline. Airbnb took a temporary hit. Uber and Lyft saw ride demand fall.
Responses to the crisis were varied. Airbnb cut costs, and raised external capital. Lyft cut expenses and focused on its core model, while Uber grew its food delivery business, which saw transaction volume soar as demand fell for its traditional business.
Meanwhile, Bird flipped its entire business model. That decision has helped the scooter outfit improve its economics markedly, giving it a shot at generating profit in the future — provided its forecasts prove achievable.
This morning, let’s talk about how Bird has changed its business, their impacts on its operating results, and how long the company thinks its climb to profitability is.
Fleet management → Fleet managers
In their initial forms, Bird and Lime bought and deployed large fleets of electric scooters. Not only was this capital intensive, the companies also wound up with costs that were more than sticky — charging wasn’t simple or cheap, moving scooters around to balance demand took both human capital and vehicles, and the list went on.
Throw in vehicle depreciation — the pace at which scooters in the wild degraded from use or abuse — and the businesses proved excellent vehicles for raising capital and throwing that money at more scooters, costs, and, as it turned out, losses.
Results improved somewhat over time, though. As scooter-share companies increasingly built their own hardware, their economics improved. Sturdier scooters meant lower depreciation, and better battery tech could allow for more rides per charge. That sort of thing.
But the model wasn’t incredibly lucrative even before COVID-19 hit. Costs were high, and the model did not break even even on a gross margin basis, let alone when considering all corporate expenses. You can see the financial mess from that period of operations in historical Bird results.
You can start by making rules, and then enforcing them.
Five years ago, the playbook for launching a new company involved a tried-and-true list of to-dos. Once you built an awesome product with a catchy name, you’d try to get a feature article on TechCrunch, a front-page hit on Hacker News, hunted on ProductHunt and an AMA on Quora.
While all of these today remain impressive milestones, it’s never been harder to corral eyeballs and hit a breakout adoption trajectory.
In this new decade, it is possible to first out-market your competitor, and then raise lots of money, hire the best team and build, rather than the other way around (building first, then marketing).
Outbound marketing tools and company newsletters are useful, but they’re also a slow burn and offer low conversion in the new creator economy. So where does this leave us?
With audiences spread out over so many platforms, reaching cult status requires some level of hacking. Brand-building is no longer a one-hit game, but an exercise in repetition: It may take four or five times for a user to see your startup’s name or logo to recognize, remember or Google it.
Below are some growth tactics that I hope will help jump-start the effort to building an engaged user base.
Laying the groundwork for user-generated content
Before users are evangelists, they are observers. Consider creating a bot to alert you of any product mentions on Twitter, or surface subject-matter discussions on Reddit (“Best tools to manage AWS costs?” or “Which marketplace do you resell your old electronics on?”), which you can then respond to with thoughtful commentary.
Join relevant communities on Discord, infiltrate Slack groups of relevant conferences (including past iterations of a conference — chances are those groups are still alive with activity), follow forums on StackOverflow and engage in the discussions on all these channels.
The more often you post, the better your posts convert. The more your handle appears on newsfeeds, the more likely it will be included on widely quoted “listicles.”
Most “user-generated content” in the early innings should be generated by you, from both personal accounts and company accounts.
Build in public …
Building in public is scary given the speed at which ideas can be copied, but competition will always exist, since new ideas are not born in vacuums. Companies like Railway and Replit post to Twitter every time they post a new changelog. Stir brands its feature releases as “drops,” similar to streetwear drops.
Building in public can also lend opportunities for virality, which requires drama, comedy or both. Hey.com’s launch was buoyed by Basecamp’s public fight against Apple over existing App Store take rates.
Mmhmm, the virtual camera app that adds TV-presenter flair to video meetings, launched with a viral video that hit over 1.5 million views. The company continues to release entertaining YouTube demos to showcase new use cases.
Help TechCrunch find the best growth marketers for startups.
Provide a recommendation in this quick survey and we’ll share the results with everybody.
… or build in private
Like an artist teasing an upcoming album, some companies are able to drum up substantial anticipation ahead of exiting stealth mode. When two ex-Apple execs founded Humane, they crafted beautiful social media pages full of sophisticated photography without revealing a single hint of what they set out to build.
Home-stay giant Airbnb and on-demand delivery concern DoorDash reported their quarterly results today after the bell.
Both companies were heavily impacted by the onset of COVID-19. Airbnb saw its revenues collapse in 2020 during early lockdowns, leading the company to raise expensive capital and batten its hatches. The company recovered as the year continued, leading to its eventual IPO.
DoorDash, in contrast, managed a simply incredible 2020 as folks stayed home and ordered in. Given that we got both reports on the same day, let’s digest ’em and see how COVID has — and may — impact their results.
In the second quarter, Airbnb reported revenues of $1.3 billion, which compares favorably with its Q2 2020 result of $335 million and its 2019 Q2 revenue total of $1.21 billion. In percentage terms, Airbnb’s revenue grew 299% from its Q2 2020 level and 10% from what the company managed during the same period of 2019.
Analysts had expected $1.23 billion in revenue for the period.
Airbnb lost $68 million in the quarter when counting all costs. The company’s adjusted EBITDA, a heavily modified profit metric, came to $217 million in the quarter. Cash from operations in Q2 2021 was $791 million. Looking ahead, here’s what Airbnb had to say regarding its revenue outlook:
[We] expect Q3 2021 revenue to be our strongest quarterly revenue on record and to deliver the highest Adjusted EBITDA dollars and margin ever.
How did the market digest Airbnb’s better-than-expected growth, rising adjusted profit, falling net losses, massive cash generation and expectations of record Q3 revenue? By bidding its shares lower. Airbnb is off around 4.5% in after-hours trading.
Confused? Investors may be worried about the following note from the company, also from the guidance section of its earnings letter:
In the near term, we anticipate that the impact of COVID-19 and the introduction and spread of new variants of the virus, including the Delta variant, will continue to affect overall travel behavior, including how often and when guests book and cancel. As a result, year-over-year comparisons for Nights and Experiences Booked and GBV will continue to be more volatile and non-linear.
While Q3 2021 is looking great for Airbnb, it appears that its future growth could be lumpy or delayed thanks to the ongoing pandemic. There are public indicators pointing to travel rates declining, which could impact Airbnb.
The company’s Q2 results and Q3 anticipations are impressive when compared to where Airbnb was a year ago. But that doesn’t mean that it is entirely out of the COVID woods.
Despite generally lower COVID friction in its market during Q2 2021, DoorDash managed to set records for orders and the value of those orders. In the three-month period concluding June 30, 2021, the on-demand food delivery company turned $10.46 billion in order value (marketplace GOV) into $1.24 billion in total revenue. The marketplace GOV number was 70% greater than the Q2 2020 result, while DoorDash’s revenues expanded by 83%.
Investors had expected the company to post $1.08 billion in total revenues, so DoorDash handily bested expectations.
How profitable was DoorDash during the quarter? DoorDash was unprofitable overall, with a net loss of $102 million. In adjusted EBITDA terms, DoorDash saw $113 million in profit during Q2 2021. That’s not too bad, given that Uber cannot manage the same feat with its own food delivery business. DoorDash’s net income was worse than what it managed in Q2 2020, while its adjusted EBITDA improved.
Shares of DoorDash are off around 3.5% in after-hours trading.
Why? It’s not entirely clear. DoorDash said that it expects “Q3 Marketplace GOV to be in a range of $9.3 billion to $9.8 billion, with Q3 Adjusted EBITDA in a range of $0 million to $100 million.” Sure, that’s down a smidgen from its Q2 GOV number, but investors were anticipating DoorDash to post less revenue in Q3 than Q2, so you would think that GOV expectations were also more modest.
Is COVID the answer? Mentions of COVID-19 in the company’s earnings document tend to deal with trailing results and historical efforts to provide relief to restaurants that use DoorDash for orders or delivery. So, there’s not a lot of juice to squeeze there. However, the company did say the following toward the end of its report:
We believe the broad secular shift toward omni-channel local commerce remains nascent. However, the scale and fragmentation of local commerce suggests the problems to be solved will get more difficult, coordination between internal and external stakeholders will become more complex, and vectors for competitive threats will increase. At the same time, we expect the pace of consumer behavioral shifts to slow compared to the extraordinary pace of change in recent quarters.
Simplifying that for us: DoorDash expects slower growth in the future, a more complex business climate and rising competition as it enters new markets. That’s not a mix that would make any investor more excited, we don’t think.
Market timing — how relevant an idea is to the current state and direction of a market — is the most important factor in determining the durability of that idea.
Several inputs inform market timing: The skew of consumer preferences in response to a pandemic. The price of goods for a resource that is finite and becoming scarce. The creation of a novel algorithmic or genetic technique that enlarges the potential of what can be streamlined, repaired and built.
But market timing is also defined by a less discussed area that is born not in capital markets but in the public sector — the regulatory landscape — namely, the decisions of government, the broader legal system and its combined level of scrutiny toward a particular subject.
We can understand the successes and challenges of several valuable companies today based on their combustion with the regulatory landscape.
We can understand the successes and challenges of several valuable companies today based on their combustion with the regulatory landscape, and perhaps also use it as an optic to see what areas represent unique opportunities for new companies to start and scale.
Looking back: The value in regulatory gray areas
“The tech comes in and moves faster than regulatory regimes do, or can control it,” Uber co-founder and former CEO Travis Kalanick said at The Aspen Institute in 2013.
The brash statement downplayed that the regulatory landscape had, in fact, driven a number of pivotal outcomes for the company up to that event. It changed its name from UberCab to Uber after receiving a cease-and-desist order in its first market, California. Several early employees left because of the startup’s regulatory challenges and iconoclastic ethos. It shut down its taxi service in New York after just a month of operations, and then in early 2013 received its lifeline in the city after being approved through a pilot program.
Fast forward to the present, and Uber has a market cap of about $82 billion, with the ousted Kalanick having a personal net worth in the neighborhood of $2.8 billion.
Still, even at its scale, many of its most important questions on growth centered around how favorably the regulatory landscape would treat its category. Most recently, this came with the U.K. Supreme Court ruling that Uber drivers could not be classified as independent contractors.
The regulatory fabric has had similar leverage over other sharing-economy companies. In October 2014, for example, Airbnb’s business model became viable in San Francisco when Mayor Ed Lee legalized short-term rentals. In November 2015, Proposition F in the city aimed to restrict short-term rentals like Airbnb, and the startup spent millions in advertisements to mobilize voters in opposition.
Airbnb’s current market cap stands at $92 billion, and its CEO, Brian Chesky, has an estimated net worth over $11 billion. Like Uber, its regulatory tribulations continue, most recently being fined and judged to owe $9.6 million to the city of Paris.
The stories of these two companies and others in the sharing economy space demonstrate the value that the regulatory fabric can add or subtract from a company’s wealth, but also underscore the value — for founding teams, early employees, investors and customers — of navigating the gray areas.
Looking around: The data economy
The present regulatory fabric has precipitated market timing for ideas in a number of categories. Solutions that enable data privacy, like BigID, and ones that embed data privacy into larger customer value propositions, like Blotout, are on streamlined growth tailwinds from the GDPR in Europe and their inspired analogs in the U.S.
Traditional MBA programs can be costly, lengthy, and often lack the application of real world skills. Meanwhile, big global brands and companies who need Product Managers to grow their businesses can’t sit around waiting for people to graduate. And the EdTech space hasn’t traditionally catered for this sector.
This is perhaps why Product School, says it has secured $25 million in growth equity investment from growth fund Leeds Illuminate (subject to regulatory approval) to accelerate its product and partnerships with client companies.
The growth funding for the company comes after bootstrapping since 2014, in large part because product managers (PMs) no longer just inside tech companies but have become sought after across almost virtually all industries.
Product School provides certificates for individuals as well as team training, and says it has experienced and upwelling of business since Covid switched so many companies into Digital ones. It also now counts Google, Facebook, Netflix, Airbnb, PayPal, Uber, and Amazon amongst its customers.
“Product managers have an outsized role in driving digital transformation and innovation across all sectors,” said Susan Cates, Managing Partner of Leeds Illuminate. “Having built the largest community of PM’s in the world validates Product School’s certification as the industry standard for the market and positions the company at the forefront of upskilling top-notch talent for global organizations.”
Carlos Gonzalez de Villaumbrosia, CEO and Founder of Product School, who started the company after moving from Spain, said: “There has never been a better time in history to build digital products and Product School is excited to unlock value for product teams across the globe to help define the future. Our company was founded on the basis that traditional degrees and MBA programs simply don’t equip PMs with the real-world skills they require on the job.”
It’s main competitor is MindTheProduct community and training platform, which has also boostrapped.
A large chunk of the internet dropped offline on Thursday. Some of the most popular sites, apps and services on the internet were down, including UPS and FedEx (which have since come back online), Airbnb, Fidelity, and others are reporting Steam, LastPass, and the PlayStation Network are all experiencing downtime.
Many other websites around the world are also affected, including media outlets in Europe.
What appears to be the cause is an outage at Akamai, an internet security giant that provides networking and content delivery services to companies. At around 11am ET, Akamai reported an issue with its Edge DNS, a service that’s designed to keep websites, apps and services running smoothly and securely.
DNS services are critically important to how the internet works, but are known to have bugs and can be easily manipulated by malicious actors. Companies like Akamai have built their own DNS services that are meant to solve some of these problems for their customers. But when things go wrong or there’s an outage, it can cause a knock-on effect to all of the customer websites and services that rely on it.
Akamai said it was “actively investigating the issue,” but when reached a spokesperson would not say if its outage was the cause of the disruption to other sites and services that are currently offline. Akamai would not say what caused the issue but that it was already in recovery.
“We have implemented a fix for this issue, and based on current observations, the service is resuming normal operations. We will continue to monitor to ensure that the impact has been fully mitigated,” Akamai told TechCrunch.
It’s not the first time we’ve seen an outage this big. Last year Cloudflare, which also provides networking services to companies around the world, had a similar outage following a bug that caused major sites to stop loading, including Shopify, Discord and Politico. In November, Amazon’s cloud service also stumbled, which prevented it from updating its own status page during the incident. Online workspace startup Notion also had a high-profile outage this year, forcing the company to turn to Twitter to ask for help.
A court in Paris has fined Airbnb, the popular marketplace for vacation rentals. According to the court, the tech company has failed to comply with local regulation when it comes to listing your apartment on the platform. Airbnb should pay $9.6 million (€8.08 million) to the City of Paris.
This decision has been years in the making. Like many major cities around the world, Airbnb has had some impact on the housing market in Paris. Many apartments disappeared from the housing market as they became full-time Airbnb apartments, leading to high rents.
In 2017, it became a bit more difficult to list your home on Airbnb if you live in Paris. For instance, you can’t rent an apartment for more than 120 nights a year. This way, landlords would think twice before switching from full-time tenants to Airbnb customers.
As there are multiple vacation rental platforms, the City of Paris implemented a registration system. If you want to list your apartment on Airbnb, you have to get a registration number first. Platforms like Airbnb would have to ask for that registration number and cap listings to 120 nights per year.
At first, the Mayor’s Office flagged around 1,000 apartments that were not properly registered. They sent the list to Airbnb, asking the company to take down those listings.
In 2019, the City of Paris sued Airbnb for the same reason. Thanks to some regulatory changes, the responsibility was shared between the hosts and the platform. And it leads us to today’s fine.
“This is the first time in France that a local government wins a case against a tech giant,” Paris Deputy Mayor Ian Brossat said in a statement. “Platforms are finally held accountable. A wonderful win for Parisians.”
Airbnb told the AFP that 95% of listings in Paris have been reserved for less than 120 nights in the past year. It means that those last 5% of listings represent much more than 5% of nights.
The gap between workers and C.E.O.s widened during the pandemic as public companies granted top executives some of the richest pay packages ever.
As workers prepare to return to the office in coming months, here are six towns and cities to consider squeezing in a working vacation or two.
The price for Ubers, scooters and Airbnb rentals is going up as tech companies aim for profitability.
Fixing workplace misconduct reporting is a mission that’s snagged London-based Vault Platform backing from Google’s AI focused fund, Gradient Ventures, which is the lead investor in an $8.2 million Series A that’s being announced today.
Other investors joining the round are Illuminate Financial, along with existing investors including Kindred Capital and Angular Ventures. Its $4.2M seed round was closed back in 2019.
Vault sells a suite of SaaS tools to enterprise-sized or large/scale-up companies to support them to pro-actively manage internal ethics and integrity issues. As well as tools for staff to report issues, data and analytics is baked into the platform — so it can support with customers’ wider audit and compliance requirements.
In an interview with TechCrunch, co-founder and CEO Neta Meidav said that as well as being wholly on board with the overarching mission to upgrade legacy reporting tools like hotlines provided to staff to try to surface conduct-related workplace risks (be that bullying and harassment; racism and sexism; or bribery, corruption and fraud), as you might expect Gradient Ventures was interested in the potential for applying AI to further enhance Vault’s SaaS-based reporting tool.
A feature of its current platform, called ‘GoTogether’, consists of an escrow system that allows users to submit misconduct reports to the relevant internal bodies but only if they are not the first or only person to have made a report about the same person — the idea being that can help encourage staff (or outsiders, where open reporting is enabled) to report concerns they may otherwise hesitate to, for various reasons.
Vault now wants to expand the feature’s capabilities so it can be used to proactively surface problematic conduct that may not just relate to a particular individual but may even affect a whole team or division — by using natural language processing to help spot patterns and potential linkages in the kind of activity being reported.
“Our algorithms today match on an alleged perpetrator’s identity. However many events that people might report on are not related to a specific person — they can be more descriptive,” explains Meidav. “For example if you are experiencing some irregularities in accounting in your department, for example, and you’re suspecting that there is some sort of corruption or fraudulent activity happening.”
“If you think about the greatest [workplace misconduct] disasters and crises that happened in recent years — the Dieselgate story at Volkswagen, what happened in Boeing — the common denominator in all these cases is that there’s been some sort of a serious ethical breach or failure which was observed by several people within the organization in remote parts of the organization. And the dots weren’t connected,” she goes on. “So the capacity we’re currently building and increasing — building upon what we already have with GoTogether — is the ability to connect on these repeated events and be able to connect and understand and read the human input. And connect the dots when repeated events are happening — alerting companies’ boards that there is a certain ‘hot pocket’ that they need to go and investigate.
“That would save companies from great risk, great cost, and essentially could prevent huge loss. Not only financial but reputational, sometimes it’s even loss to human lives… That’s where we’re getting to and what we’re aiming to achieve.”
There is the question of how defensible Vault’s GoTogether feature is — how easily it could be copied — given you can’t patent an idea. So baking in AI smarts may be a way to layer added sophistication to try to maintain a competitive edge.
“There’s some very sophisticated, unique technology there in the backend so we are continuing to invest in this side of our technology. And Gradient’s investment and the specific we’re receiving from Google now will only increase that element and that side of our business,” says Meidav when we ask about defensibility.
Commenting on the funding in a statement, Gradient Ventures founder and managing partner, Anna Patterson, added: “Vault tackles an important space with an innovative and timely solution. Vault’s application provides organizations with a data-driven approach to tackling challenges like occupational fraud, bribery or corruption incidents, safety failures and misconduct. Given their impressive team, technology, and customer traction, they are poised to improve the modern workplace.”
The London-based startup was only founded in 2018 — and while it’s most keen to talk about disrupting legacy hotline systems, which offer only a linear and passive conduit for misconduct reporting, there are a number of other startups playing in the same space. Examples include the likes of LA-based AllVoices, YC-backed Whispli, Hootsworth and Spot to name a few.
Competition seems likely to continue to increase as regulatory requirements around workplace reporting keep stepping up.
The incoming EU Whistleblower Protection Directive is one piece of regulation Vault expects will increase demand for smarter compliance solutions — aka “TrustTech”, as it seeks to badge it — as it will require companies of more than 250 employees to have a reporting solution in place by the end of December 2021, encouraging European businesses to cast around for tools to help shrink their misconduct-related risk.
She also suggests a platform solution can help bridge gaps between different internal teams that may need to be involved in addressing complaints, as well as helping to speed up internal investigations by offering the ability to chat anonymously with the original reporter.
Meidav also flags the rising attention US regulators are giving to workplace misconduct reporting — noting some recent massive awards by the SEC to external whistleblowers, such as the $28M paid out to a single whistleblower earlier this year (in relation to the Panasonic Avionics consultant corruption case).
She also argues that growing numbers of companies going public (such as via the SPAC trend, where there will have been reduced regulatory scrutiny ahead of the ‘blank check’ IPO) raises reporting requirements generally — meaning, again, more companies will need to have in place a system operated by a third party which allows anonymous and non-anonymous reporting. (And, well, we can only speculate whether companies going public by SPAC may be in greater need of misconduct reporting services vs companies that choose to take a more traditional and scrutinized route to market… )
“Just a few years back I had to convince investors that this category it really is a category — and fast forward to 2021, congratulations! We have a market here. It’s a growing category and there is competition in this space,” says Meidav.
“What truly differentiates Vault is that we did not just focus on digitizing an old legacy process. We focused on leveraging technology to truly empower more misconduct to surface internally and for employees to speak up in ways that weren’t available for them before. GoTogether is truly unique as well as the things that we’re doing on the operational side for a company — such as collaboration.”
She gives an example of how a customer in the oil and gas sector configured the platform to make use of an anonymous chat feature in Vault’s app so they could provide employees with a secure direct-line to company leadership.
“They’ve utilizing the anonymous chat that the app enables for people to have a direct line to leadership,” she says. “That’s incredible. That is such a progress, forward looking way to be utilizing this tool.”
Meidav says Vault has around 30 customers at this stage, split between the US and EU — its core regions of focus.
And while its platform is geared towards enterprises, its early customer base includes a fair number of scale-ups — with familiar names like Lemonade, Airbnb, Kavak, G2 and OVO Energy on the list.
Scale ups may be natural customers for this sort of product given the huge pressures that can be brought to bear upon company culture as a startup switches to expanding headcount very rapidly, per Meidav.
“They are the early adopters and they are also very much sensitive to events such as these kind of [workplace] scandals as it can impact them greatly… as well as the fact that when a company goes through a hyper growth — and usually you see hyper growth happening in tech companies more than in any other type of sector — hyper growth is at time when you really, as management, as leadership, it’s really important to safeguard your culture,” she suggests.
“Because it changes very, very quickly and these changes can lead to all sorts of things — and it’s really important that leadership is on top of it. So when a company goes through hyper growth it’s an excellent time for them to incorporate a tool such as Vault. As well as the fact that every company that even thinks of an IPO in the coming months or years will do very well to put a tool like Vault in place.”
Expanding Vault’s own team is also on the cards after this Series A close, as it guns for the next phase of growth for its own business. Presumably, though, it’s not short of a misconduct reporting solution.
Here in the U.S. the concept of using driver’s data to decide the cost of auto insurance premiums is not a new one.
But in markets like Brazil, the idea is still considered relatively novel. A new startup called Justos claims it will be the first Brazilian insurer to use drivers’ data to reward those who drive safely by offering “fairer” prices.
And now Justos has raised about $2.8 million in a seed round led by Kaszek, one of the largest and most active VC firms in Latin America. Big Bets also participated in the round along with the CEOs of seven unicorns including Assaf Wand, CEO and co-founder of Hippo Insurance; David Velez, founder and CEO of Nubank; Carlos Garcia, founder and CEO Kavak; Sergio Furio, founder and CEO of Creditas; Patrick Sigris, founder of iFood and Fritz Lanman, CEO of ClassPass. Senior executives from Robinhood, Stripe, Wise, Carta and Capital One also put money in the round.
Serial entrepreneurs Dhaval Chadha, Jorge Soto Moreno and Antonio Molins co-founded Justos, having most recently worked at various Silicon Valley-based companies including ClassPass, Netflix and Airbnb.
“While we have been friends for a while, it was a coincidence that all three of us were thinking about building something new in Latin America,” Chadha said. “We spent two months studying possible paths, talking to people and investors in the United States, Brazil and Mexico, until we came up with the idea of creating an insurance company that can modernize the sector, starting with auto insurance.”
Ultimately, the trio decided that the auto insurance market would be an ideal sector considering that in Brazil, an estimated more than 70% of cars are not insured.
The process to get insurance in the country, by any accounts, is a slow one. It takes up to 72 hours to receive initial coverage and two weeks to receive the final insurance policy. Insurers also take their time in resolving claims related to car damages and loss due to accidents, the entrepreneurs say. They also charge that pricing is often not fair or transparent.
Justos aims to improve the whole auto insurance process in Brazil by measuring the way people drive to help price their insurance policies. Similar to Root here in the U.S., Justos intends to collect users’ data through their mobile phones so that it can “more accurately and assertively price different types of risk.” This way, the startup claims it can offer plans that are up to 30% cheaper than traditional plans, and grant discounts each month, according to the driving patterns of the previous month of each customer.
“We measure how safely people drive using the sensors on their cell phones,” Chadha said. “This allows us to offer cheaper insurance to users who drive well, thereby reducing biases that are inherent in the pricing models used by traditional insurance companies.”
Justos also plans to use artificial intelligence and computerized vision to analyze and process claims more quickly and machine learning for image analysis and to create bots that help accelerate claims processing.
“We are building a design driven, mobile first and customer experience that aims to revolutionize insurance in Brazil, similar to what Nubank did with banking,” Chadha told TechCrunch. “We will be eliminating any hidden fees, a lot of the small text and insurance specific jargon that is very confusing for customers.”
Justos will offer its product directly to its customers as well as through distribution channels like banks and brokers.
“By going direct to consumer, we are able to acquire users cheaper than our competitors and give back the savings to our users in the form of cheaper prices,” Chadha said.
Customers will be able to buy insurance through Justos’ app, website, or even WhatsApp. For now, the company is only adding potential customers to a waitlist but plans to begin selling policies later this year..
During the pandemic, the auto insurance sector in Brazil declined by 1%, according to Chadha, who believes that indicates “there is latent demand rearing to go once things open up again.”
Justos has a social good component as well. Justos intends to cap its profits and give any leftover revenue back to nonprofit organizations.
The company also has an ambitious goal: to help make insurance become universally accessible around the world and the roads safer in general.
“People will face everyday risks with a greater sense of safety and adventure. Road accidents will reduce drastically as a result of incentives for safer driving, and the streets will be safer,” Chadha said. “People, rather than profits, will become the focus of the insurance industry.”
Justos plans to use its new capital to set up operations, such as forming partnerships with reinsurers and an insurance company for fronting, since it is starting as an MGA (managing general agent).
It’s also working on building out its products such as apps, its back end and internal operations tools as well as designing all its processes for underwriting, claims and finance. Justos’ data science team is also building out its own pricing model.
The startup will be focused on Brazil, with plans to eventually expand within Latin America, then Iberia and Asia.
Kaszek’s Andy Young said his firm was impressed by the team’s previous experience and passion for what they’re building.
“It’s a huge space, ripe for innovation and this is the type of team that can take it to the next level,” Young told TechCrunch. “The team has taken an approach to building an insurance platform that blends being consumer centric and data driven to produce something that is not only cheaper and rewards safety but as the brand implies in Portuguese, is fairer.”
Lordstown Motors released its Q1 earnings yesterday, and the electric vehicle manufacturer is facing a few challenges.
Expenses were higher than expected, it plans to slash production by about 50%, and the company reported zero revenue and a net loss of $125 million. Oh, it also needs more capital.
“But there’s more to the Lordstown mess than merely a single bad quarter,” writes Alex Wilhelm. “Lordstown’s earnings mess and the resulting dissonance with its own predictions are notable on their own, but they also point to what could be shifting sentiment regarding SPAC combinations.”
In light of the company’s lackluster earnings report (and a pending SEC investigation), Alex unpacks the company’s Q1, “but don’t think that we’re only singling out one company; others fit the bill, and more will in time.”
May 27 Clubhouse chat: How to ensure data quality in the era of Big Data
Join TechCrunch reporter Ron Miller and Patrik Liu Tran, co-founder and CEO of automated real-time data validation and quality monitoring platform Validio, on Thursday, May 27 at 9 a.m. PDT/noon EDT for a Clubhouse chat about ensuring data quality in the era of Big Data.
The world produces 2.5 quintillion bytes of data daily, but modern data infrastructure still lacks solutions for monitoring data quality and data validation.
Among other topics, they’ll discuss the build versus buy debate, how to better understand data failures, and why traditional methods for identifying data failures are no longer operational.
Thanks very much for reading Extra Crunch; have a great week!
Senior Editor, TechCrunch
Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.
How Expensify shed Silicon Valley arrogance to realize its global ambitions
Expensify may be the most ambitious software company ever to mostly abandon the Bay Area as the center of its operations.
The startup’s history is tied to places representative of San Francisco: The founding team worked out of Peet’s Coffee on Mission Street for a few months, then crashed at a penthouse lounge near the 4th and King Caltrain station, followed by a tiny office and then a slightly bigger one in the Flatiron building near Market Street.
Thirteen years later, Expensify still has an office a few blocks away on Kearny Street, but it’s no longer a San Francisco company or even a Silicon Valley firm. The company is truly global with employees across the world — and it did that before COVID-19 made remote working cool.
It makes sense that a company founded by internet pirates would let its workforce live anywhere they please and however they want to. Yet, how does it manage to make it all work well enough to reach $100 million in annual revenue with just a tad more than 100 employees?
As I described in Part 2 of this EC-1, that staffing efficiency is partly due to its culture and who it hires. It’s also because it has attracted top talent from across the world by giving them benefits like the option to work remotely all year as well as paying SF-level salaries even to those not based in the tech hub. It’s also got annual fully paid month-long “workcations” for every employee, their partner and kids.
Brian Chesky describes a faster, nimbler post-pandemic Airbnb
Managing Editor Jordan Crook interviewed Airbnb co-founder and CEO Brian Chesky to discuss the future of travel and what it was like leading the world’s biggest hospitality startup during a global pandemic.
“Our business initially dropped 80% in eight weeks. I say it’s like driving a car. You can’t go 80 miles an hour, slam on the brakes, and expect nothing really bad to happen.
Now imagine you’re going 80 miles an hour, slam on the brakes, then rebuild the car kind of while still moving, and then try to accelerate into an IPO, all on Zoom.”
Embedded finance will help fill the life insurance coverage gap
There’s latent demand for life insurance currently unaddressed by much of the financial services industry, and embedded finance can be the solution.
It’s imperative for companies to consider product lines and partnerships to expand markets, create new revenue streams and provide added value to their customers.
Connecting consumers with products they need through channels they already know and trust is both a massive revenue opportunity and a social good, providing financial resilience to families at a time when they need it most.
Zeta Global’s IPO filing uncovers modest growth, strong adjusted profitability
Zeta Global raised north of $600 million in private capital in the form of both equity financing and debt, making it a unicorn worth understanding.
The gist is that Zeta ingests and crunches lots of data, helping its users market to their customers on a targeted basis throughout their individual buying lifecycles. In simpler terms, Zeta helps companies pitch customers in varied manners depending on their own characteristics.
You can imagine that, as the digital economy has grown, the sort of work Zeta Global supports has only expanded. So, has Zeta itself grown quickly? And does it have an attractive business profile? We want to know.
5 predictions for the future of e-commerce
In 2016, more than 20 years after Amazon’s founding and 10 years since Shopify launched, it would have been easy to assume e-commerce penetration (the percentage of total retail spend where the goods were bought and sold online) would be over 50%.
But what we found was shocking: The U.S. was only approximately 8% penetrated — only 8% for arguably the most advanced economy in the world!
Despite e-commerce growth skyrocketing over the past year, the reality is the U.S. has still only reached an e-commerce penetration rate of around 17%. During the last 18 months, we’ve closed the gap to South Korea and China’s e-commerce penetration of more than 25%, but there is still much progress to be made.
Here are five key predictions for what this road to further penetration will hold.
Develop a buyer’s guide to educate your startup’s sales team and customers
Every company wants to be innovative, but innovation comes with its share of difficulties. One key challenge for early-stage companies that are disrupting a particular space or creating a new category is figuring out how to sell a unique product to customers who have never bought such a solution.
This is especially the case when a solution doesn’t have many reference points and its significance may not be obvious.
Some buyers could use a walkthrough of the buying process. If you are building a singular product in a nascent market that necessitates forward-looking customers and want to drastically shorten sales cycles, create a buyer’s guide.
When to walk away from a VC who wants to invest in your startup
Pay attention to red flags when meeting with VCs: If they cancel late or leave you waiting, it’s a sign, just like being asked generic questions that demonstrate little or no understanding of the proposition. If they critique you or your business, that’s fine (obviously), but make sure you find out what’s behind their assertions to judge how well informed they are.
If you’re going to face these people each month and debate the direction of your business, the least you can expect is a robust argument outlining precisely why you may not have all the right answers.
If you fail to spot the warning signs, you’ll live to regret it. But do your due diligence and work constructively with them and, together, you might actually build a sustainable future.
Deep Science: Robots, meet world
This column aims to collect some of the most relevant recent discoveries and papers — particularly in, but not limited to, artificial intelligence — and explain why they matter.
In this edition, we have a lot of items concerned with the interface between AI or robotics and the real world. Of course, most applications of this type of technology have real-world applications, but specifically, this research is about the inevitable difficulties that occur due to limitations on either side of the real-virtual divide.
2 CEOs are better than 1
Netflix has two CEOs: Co-founder Reed Hastings oversees the streaming side of the company, while Ted Sarandos guides Netflix’s content.
Warby Parker has co-CEOs as well — its co-founders went to college together. Other companies like the tech giant Oracle and luggage maker Away have shifted from having co-CEOs in recent years, sparking a wave of headlines suggesting that the model is broken.
While there isn’t a lot of research on companies with multiple CEOs, the data is more promising than the headlines would suggest. One study on public companies with co-CEOs revealed that the average tenure for co-CEOs, about 4.5 years, was comparable to solitary CEOs, “suggesting that this arrangement is more stable than previously believed.”
Furthermore, it’s impossible to be in two places at once or clone yourself. With co-CEOs, you can effectively do just that.
As we transition from the pandemic to whatever comes next, Airbnb is evolving. The company announced a major redesign of its website and introduced a bevy of features focused on both hosts and guests today. All told, the release includes more than 100 new features or upgrades, with the goal of increasing and diversifying the supply side of the business to not only fuel overall growth but also meet the changing demands of guests.
The changes come in response to the way travel has evolved during the pandemic; Airbnb as a company has changed, too.
TechCrunch sat down with Brian Chesky, Airbnb co-founder and CEO, to discuss the future of travel, how his company worked to support a changing market and what it was like leading the world’s biggest travel startup during a global pandemic.
If you want to read more about today’s update, you can check out our article on it here.
The TL;DR version is as follows:
- New search flexibility around dates, destinations and matching criteria
- Easier onboarding and efficiency for hosts
- Increased and enhanced customer support
From a very high level, the first change is designed to help drive demand, the second to boost supply and the third to keep both sides of the marketplace healthy.
TechCrunch’s interview with Chesky follows. It has been lightly edited for length and clarity.
TechCrunch: A lot of the announcement today comes from the fact that we’ve been through more than a year of a pandemic and travel has evolved, and you are responding to that. As a CEO, you’ve been through so many big moments, from the IPO to the early launch days to a long regulatory journey. Where does leading a company during a pandemic fit into the CEO journey for you?
Brian Chesky: Yeah, Jordan, I would probably say that I never thought we would do anything as crazy as starting Airbnb. I kind of assumed, until last year, that that would probably be the craziest story I’ll ever have. Little did I know that a travel company in a pandemic might even be crazier than starting a company based on strangers living together. I kind of feel like I’m now 39 going on 49. It was definitely the craziest year ever.
Our business initially dropped 80% in eight weeks. I say it’s like driving a car. You can’t go 80 miles an hour, slam on the brakes, and expect nothing really bad to happen. Now imagine you’re going 80 miles an hour, slam on the brakes, then rebuild the car kind of while still moving, and then try to accelerate into an IPO, all on Zoom.
As we head into the summer of vaccination, travel is bound to start bouncing back from the lows of 2020, and Airbnb is betting it will look very different than it did in the pre-COVID era.
The home-sharing platform has introduced some big changes, across a wide variety of feature sets, that focus on flexibility for the guests and simplicity for the hosts. The end goal, according to Airbnb Head of Guest Experience Sam Shank, is to increase both the volume and diversity of the supply side of the operation.
To start, Airbnb has streamlined the process of becoming a host, minimizing the amount of steps it takes to get a listing up. Machine learning algorithms can also now automatically arrange photos based on guest appeal, and hosts are provided suggestions from Airbnb about the best titles and descriptions for their listing.
The company is also adding new layers of data to the system, integrating with publicly available real estate data, so that hosts can simply enter their address and have information like number of bedrooms and bathrooms automatically filled in.
Other improvements to the hosting experience include a redesigned ‘Welcome to Hosting’ hub, and a new Today tab that helps hosts keep track of new messages, tasks, etc.
On the guests side, Airbnb is doubling down on features around flexibility.
In February, for example, the company introduced flexible date search, letting people search for listings based on the type of trip, rather than the dates. Users can now search for a long weekend, a week-long trip, or a month-long trip.
Today, Airbnb announced that it is making its search product even more supple with “Flexible Matching” and “Flexible Destinations.”
Flexible Matching essentially adds wiggle room to a more specific search. For example, if a user searches for listings under $250/night, it might show listings that fit all other criteria but are priced slightly outside of that range. Or, if a user searches for a certain set of amenities, it might show a listing that’s only missing one.
Flexible Destinations allow a user to search for a certain type of listing regardless of the location. Think treehouses or beach side properties.
Combined, this type of flexible search will expose guests to a much more diverse pool of listings, and the updated hosts flow is expected to increase supply in some of these less explored destinations.
“Brian [Chesky] said we have the right amount of hosts for this summer, but also that we have the capacity to add millions of hosts,” said Shank, explaining that changing how people find places expands their search to more diverse supply.
“If you were boiling down one big theme, it’s really around helping us get more diverse, unique supply and helping more people become very successful at being hosts, and recognizing the benefits of that,” said Shank. “There are financial benefits and also the chance to meet people from around the world.”
Alongside flexible search updates and the improved host flow, Airbnb is also making upgrades to its community support department, doubling the number of support agents available on the phone this summer and expanding support coverage from 11 to 42 languages. The company has also redesigned the Help Center, with easier navigation, for both hosts and guests.
All told, this release includes more than 100 updates to the product.
Much of it was informed by Airbnb’s 2021 trend report, which showed that families both drove and diversified travel through the summer of 2020, with family travel growing from 27 percent of nights booked to 33 percent in the summer of 2021 globally. Of family travel, 42 percent of the nights booked were in rural destinations, which is up 10 percentage points from the summer of 2019.
The company’s work to expand its listing supply is not surprising given that it is now a public company, giving it a slightly less-forgiving investor pool to impress on a quarterly basis. Airbnb survived the COVID-19 pandemic better than some expected, thanks in part to users booking long stays while they quarantined. But now Airbnb needs to lead its industry into the post-COVID world if it wants to not only defend its market position, but also the very growth rates that helped it become the well-known brand that it remains today.
Of course, onboarding more hosts with more automated tooling opens to the door to quality risks. We’ll see how users respond to both more supply, and more computer-aided supply generation.
We live in a world where companies have to send out ‘gifts’ to individuals. Chocolate bars. Bottles of wine. You name it. Companies are gifting it. But right now, that operation is buried in a marketing department on a spreadsheet, as is mostly pretty disorganized.
A handful of startups realized it could be done better and at scale, among them Sendoso (which has raised $52.7M) and ReachDesk ($6M).
Joining this clan is a startup with the tortuous name of “&Open” (yes, ‘ampersand open’, pronounced ‘And Open’ for those of you at the back).
Suffice it to say, that despite its name it’s raised $7.2 million to makes it easier for brands to send carefully gifts to customers to boost loyalty and engagement. First Round Capital and LocalGlobe led the Seed round along with participation from angel investors including Andrew Robb (Farfetch), Des Traynor (Intercom) and Liam Casey (PCH). The funds will be used to scale to Europe and the US. Currently &Open claims to deliver more than 3,500 gifts every week.
Dublin-based &Open launched in 2017 and was founded by Ciara Flood, formerly buyer at Net-a-Porter and part of the founding team at Mr Porter, together with her husband Jonathan Legge, and her and brother-in-law, Mark Legge. The brothers previously founded the high-end gift and homeware venture Makers & Brothers.
&Open (please God, take me now…) counts Airbnb, Spotify, and Peloton among their customers.
Gifting can be powerful. According to one study which the company cites, customers who feel emotionally connected to a brand have been shown to create a 306% higher lifetime value. This is in stark contrast to existing, traditional Meanwhile, Schemes like corporate gifts, branded merchandise, loyalty programmes, and vouchers don’t work, claims &Open.
Jonathan Legge said: “Customers will choose brands who prioritize care and connection over transactional relationships. A thoughtful gift can make all the difference — both for a customer’s experience and their advocacy and loyalty to a brand.”
Hayley Barna, Partner at First Round Capital, said: “Gone are the days of relying on a points-based loyalty scheme to keep your customers engaged and happy. Brands increasingly need to work harder to retain customers and &Open provides an elegant solution to this conundrum.”
Amount, a company that provides technology to banks and financial institutions, has raised $99 million in a Series D funding round at a valuation of just over $1 billion.
WestCap, a growth equity firm founded by ex-Airbnb and Blackstone CFO Laurence Tosi, led the round. Hanaco Ventures, Goldman Sachs, Invus Opportunities and Barclays Principal Investments also participated.
Notably, the investment comes just over five months after Amount raised $86 million in a Series C round led by Goldman Sachs Growth at a valuation of $686 million. (The original raise was $81 million, but Barclays Principal Investments invested $5 million as part of a second close of the Series C round). And that round came just three months after the Chicago-based startup quietly raised $58 million in a Series B round in March. The latest funding brings Amount’s total capital raised to $243 million since it spun off from Avant — an online lender that has raised over $600 million in equity — in January of 2020.
So, what kind of technology does Amount provide?
In simple terms, Amount’s mission is to help financial institutions “go digital in months — not years” and thus, better compete with fintech rivals. The company formed just before the pandemic hit. But as we have all seen, demand for the type of technology Amount has developed has only increased exponentially this year and last.
CEO Adam Hughes says Amount was spun out of Avant to provide enterprise software built specifically for the banking industry. It partners with banks and financial institutions to “rapidly digitize their financial infrastructure and compete in the retail lending and buy now, pay later sectors,” Hughes told TechCrunch.
Specifically, the 400-person company has built what it describes as “battle-tested” retail banking and point-of-sale technology that it claims accelerates digital transformation for financial institutions. The goal is to give those institutions a way to offer “a secure and seamless digital customer and merchant experience” that leverages Amount’s verification and analytics capabilities.
HSBC, TD Bank, Regions, Banco Popular and Avant (of course) are among the 10 banks that use Amount’s technology in an effort to simplify their transition to digital financial services. Recently, Barclays US Consumer Bank became one of the first major banks to offer installment point-of-sale options, giving merchants the ability to “white label” POS payments under their own brand (using Amount’s technology).
“The pandemic dramatically accelerated banks’ interest in further digitizing the retail lending experience and offering additional buy now, pay later financing options with the rise of e-commerce,” Hughes, former president and COO at Avant, told TechCrunch. “Banks are facing significant disruption risk from fintech competitors, so an Amount partnership can deliver a world-class digital experience with significant go-to-market advantages.”
Also, he points out, consumers’ digital expectations have changed as a result of the forced digital adoption during the pandemic, with bank branches and stores closing and more banking done and more goods and services being purchased online.
Amount delivers retail banking experiences via a variety of channels and a point-of-sale financing product suite, as well as features such as fraud prevention, verification, decisioning engines and account management.
Overall, Amount clients include financial institutions collectively managing nearly $2 trillion in U.S. assets and servicing more than 50 million U.S. customers, according to the company.
Hughes declined to provide any details regarding the company’s financials, saying only that Amount “performed well” as a standalone company in 2020 and that the company is expecting “significant” year-over-year revenue growth in 2021.
Amount plans to use its new capital to further accelerate R&D by investing in its technology and products. It also will be eyeing some acquisitions.
“We see a lot of interesting technology we could layer onto our platform to unlock new asset classes, and acquisition opportunities that would allow us to bring additional features to our platform,” Hughes told TechCrunch.
Avant itself made its first acquisition earlier this year when it picked up Zero Financial, news that TechCrunch covered here.
Kevin Marcus, partner at WestCap, said his firm invested in Amount based on the belief that banks and other financial institutions have “a point-in-time opportunity to democratize access to traditional financial products by accelerating modernization efforts.”
“Amount is the market leader in powering that change,” he said. “Through its best-in-class products, Amount enables financial institutions to enhance and elevate the banking experience for their end customers and maintain a key competitive advantage in the marketplace.”