He specialized in taking down high-profile brands that used low-wage labor, including a line of clothing licensed by Kathie Lee Gifford.
Earlier this month, Google’s sister company, Wing, began offering a drone delivery service in the Dallas suburbs of Frisco and Little Elm. Wing drones take off from “nests” in two Walgreens parking lots to deliver things like health products or ice cream to nearby customers. Wing describes it as “the first ever commercial drone delivery service in a major US metropolitan area.”
One reason for that last caveat: Walmart has been running its own drone delivery service near its Bentonville, Arkansas, headquarters since November. Walmart delivers a range of products to customers within a 1.5-mile radius of two Walmart stores. The service will soon expand to a third Walmart store in the same corner of Arkansas.
Meanwhile, Amazon’s drone efforts got some unflattering press coverage last week. Bloomberg reported on a drone crash at an Amazon test facility in Oregon. No one was injured, but the story underscores the fact that Amazon has yet to launch a commercial drone delivery service in the United States—despite a December 2013 segment on 60 Minutes where Jeff Bezos predicted drone deliveries might reach the market in four to five years.
The electric delivery vehicle startup BrightDrop is on a roll. Set up by General Motors, BrightDrop leveraged the automaker’s investment in its new Ultium battery platform and Ultium Drive electric motors to bring the EV600 delivery van to market in just 20 months—faster than any other vehicle in GM history.
Last month, the company delivered the first five EV600 vans to FedEx, its first customer. Now, FedEx is increasing its order from 500 vans to 2,000 over “the next few years” and has plans to add up to 20,000 more in time.
Now, BrightDrop can add another marquee customer to its books. The retail giant Walmart has signed an agreement with BrightDrop for 5,000 vans, split between the bigger EV600 and smaller EV410 models. (The number indicates the van’s cargo storage in cubic feet.) Walmart will use the electric vans for its InHome delivery service.
Weeks after Amazon introduced an updated Fire TV lineup that included, for the first time, its own TVs, Roku today is announcing its own competitive products in a race to capture consumers’ attention before the holiday shopping season. Its updates include a new Roku Streaming Stick 4K and Roku Streaming Stick 4K+ — the latter which ships with Roku’s newer hands-free voice remote. The company is also refreshing the Roku Ultra LT, a Walmart-exclusive version of its high-end player. And it announced the latest software update, Roku OS 10.5, which adds updated voice features, a new Live TV channel for home screens, and other minor changes.
The new Streaming Stick 4K builds on Roku’s four-year-old product, the Streaming Stick+, as it offers the same type of stick form factor designed to be hidden behind the TV set. This version, however, has a faster processor which allows the device to boot up to 30% faster and load channels more quickly, Roku claims. The Wi-Fi is also improved, offering faster speeds and smart algorithms that help make sure users get on the right band for the best performance in their homes where network congestion is an increasingly common problem — especially with the pandemic-induced remote work lifestyle. The new Stick adds support for Dolby Vision and HDR 10+, giving it the “4K” moniker.
This version ships with Roku’s standard voice remote for the same price of $49.99. For comparison, Amazon’s new Fire TV Stick Max with a faster processor and speedier Wi-Fi is $54.99. However, Amazon is touting the addition of Wi-Fi 6 and support for its game streaming service, Luna, as reasons to upgrade.
Roku’s new Streaming Stick 4K+ adds the Roku Voice Remote Pro to the bundle instead. This is Roku’s new remote, launched in the spring, that offers rechargeability, a lost remote finder, and hands-free voice support via its mid-field microphone, so you can just say things like “hey Roku, turn on the TV,” or “launch Netflix,” instead of pressing buttons. Bought separately, this remote is $29.99. The bundle sells for $69.99, which translates to a $10 discount over buying the stick and remote by themselves.
Both versions of the Streaming Stick will be sold online and in stores starting in October.
The Roku Ultra LT ($79.99), built for Walmart exclusively, has also been refreshed with a faster processor, more storage, a new Wi-Fi radio with up to 50% longer range, support for Dolby Vision, Bluetooth audio streaming, and a built-in ethernet port.
Plus, Roku notes that TCL will become the first device partner to use the reference designs it introduced at CES for wireless soundbars, with its upcoming Roku TV wireless soundbar. This device connects over Wi-Fi to the TV and works with the Roku remote, and will arrive at major retailers in October where it will sell for $179.99.
The other big news is Roku’s OS 10.5 software release. The update isn’t making any dramatic changes this time around, but is instead focused largely on voice and mobile improvements.
The most noticeable consumer-facing change is the ability to add a new Live TV channel to your home screen which lets you more easily launch The Roku Channel’s 200+ free live TV channels, instead of having to first visit Roku’s free streaming hub directly, then navigate to the Live TV section. This could make the Roku feel more like traditional TV for cord-cutters abandoning their TV guide for the first time.
Other tweaks include expanded support for launching channels using voice commands, with most now supported; new voice search and podcast playback with a more visual “music and podcast” row and Spotify as a launch partner; the ability to control sound settings in the mobile app; an added Voice Help guide in settings; and additional sound configuration options for Roku speakers and soundbars (e.g. using the speaker pairs and soundbar in a left/center/right) or in full 5.1 surround sound system).
A handy feature for entering in email and passwords in set-up screens using voice commands is new, too. Roku says it sends the voice data off-device to its speech-to-text partner, and the audio is anonymized. Roku doesn’t get the password or store it, as it goes directly to the channel partner. While there are always privacy concerns with voice data, the addition is a big perk from an accessibility standpoint.
One of the more under-the-radar, but potentially useful changes coming in OS 10.5 is an advanced A/V sync feature that lets you use the smartphone camera to help Roku make further refinements to the audio delay when using wireless headphones to listen to the TV. This feature is offered through the mobile app.
The Roku mobile app in the U.S. is also gaining another feature with the OS 10.5 update with the addition of a new Home tab for browsing collections of movies and shows across genres, and a “Save List, which functions as a way to bookmark shows or movies you might hear about — like when chatting with friends — and want to remember to watch later when you’re back home in front of the TV.
The software update will roll out to Roku devices over the weeks ahead. It typically comes to Roku players first, then rolls out to TVs.
Earlier this year, a startup called Olive launched its new shopping site and app with the goal of making e-commerce more efficient, convenient, and sustainable by offering a way for consumers to aggregate their orders from across retailers into single shipments that arrive in reusable packaging, not cardboard. If items need to be returned, those same packages are reused. Otherwise, Olive will return to pick them up. Since its February 2021 debut, the company has grown to include over 100 retailers, predominately in the fashion space. Today, it’s expanding again by adding support for another 25 beauty retailers.
Launch partners on the new effort include brands like Supergoop!, Kora Organics, Pai Skincare, Erno Laszlo, Jecca Blac, Sahajan, Clark’s Botanicals, NuFace, Purlisse, Cover FX, LYS Beauty, SiO Beauty, Peace Out Skincare, Koh Gen Do, Julep Beauty, In Common Beauty, Indie Lee, Glow Recipe, Ursa Major, RMS Beauty, Ceremonia, Sweet Chef, Follain, and BalmLabs.
They join Olive’s numerous apparel and accessory retailers like Adidas, Superga, Rag & Bone, Birdies, Vince, Goop, Khaite, and Veronica Beard, among others.
To support the expansion, Olive also developed a new set of reusable packaging that has protective elements for more damageable items. While before, the company had offered a variety of packages like soft-sided garment bags and various sizes of more rigid containers (see below), it’s now introducing its own alternative to the air bubble strips you’ll find in most Amazon boxes these days. Olive’s version is integrated into its reusable packaging and can be easily deflated by the customer when it’s time to return the package at pickup.
The idea for Olive is a timely one. Due to the Covid-19 pandemic, e-commerce adoption has soared. But so has consumers’ guilt. Multiple packages land on doorsteps every week, with cardboard and plastic to recycle — if that’s even available in your area. Delivery trucks — Amazon, UPS, FedEx, and others — are now a daily spectacle on every city street. Meanwhile, market leaders like Amazon and Walmart seem largely interested in increasing the speed of delivery, not necessarily the efficiency and sustainability. (Amazon allows shoppers to pick an Amazon Day delivery, for consolidated shipments, but it’s opt-in.)
Olive founder Nate Faust says he was inspired to build the company after realizing how little interest there was from larger e-commerce players in addressing some of the inconveniences and inefficiencies in the market. Faust had previously served as a vice president at Quidsi (which ran Diapers.com and Soap.com and sold to Amazon), then co-founder and COO at Jet, which was acquired by Walmart for $3.3 billion. Before Olive, he was a senior vice president at Walmart.
After some soul searching, he realized he wanted to build something in the e-commerce space that was focused more on the social and environmental impact, not just on driving growth and consumption.
“I had an epiphany one evening when taking out the trash and recycling,” Faust explains. “It’s pretty crazy that we’re this far into e-commerce and this is the status quo delivery experience — all this waste, which is both an environmental issue and a hassle for consumers,” he says. “And the bigger issue than the packaging is actually the fact that the majority of those packages are delivered one at a time, and those last-mile emissions are actually the biggest contributor of carbon emissions in the post-purchase e-commerce supply chain.”
Consumers may not think about all the issues, because many of them are hidden, but they do struggle in other ways beyond dealing with the waste. Returns are still a hassle — so much so, that Amazon now allows customers to go to Kohl’s where it’s partnered on in-store return kiosks that also help the brick-and-mortar retailer increase their own foot traffic.
Plus, consumers who shop from different sites have to set up online accounts over and over, entering in addresses and payment information many times, which is an annoyance. Olive offers the convenience of an Amazon-like one-stop-shop experience on that front.
Meanwhile, Olive addresses the return issue by allowing consumers to simply place their unwanted items back in Olive’s packaging then leave them on their doorstep or with the building’s doorman for return. It works with both the USPS and a network of local carriers to serve the customers in its current footprint, which is about 100 million U.S. consumers on both coasts.
While customers don’t have to deal with packaging, it hasn’t been entirely eliminated from the equation at this point. Olive today partners with retailers who ship packages to its own west coast and east coast warehouses, where they repackage them into the reusable containers to deliver to customers. Right now, that means Olive is responsible for the recycling issues. But it’s working with its brand partners to have them pack orders directly into the reusable packaging from the start — before shipping to Olive’s consolidation warehouses for delivery. Today, it has a few retailers on board with this effort, but it hopes that will eventually expand to include all partners.
The company generates revenue on an affiliate commission model, which works for now. But over time, it may need to evolve that business model over time, as its customer base and partnerships grow. At present, around 10,000 consumers have used Olive, ahead of any large-scale marketing and customer acquisition efforts on the startup’s part.
For now, New York-based Olive is growing its business by way of a fundraise of around $15 million from investors including Invus, Primary Venture Partners, and SignalFire.
Walmart has tapped Argo AI and Ford to launch an autonomous vehicle delivery service in Austin, Miami and Washington D.C., the companies said Wednesday.
The service will allow customers to place online orders for groceries and other items using Walmart’s ordering platform. Argo’s cloud-based infrastructure will be integrated with Walmart’s online platform, routing the orders and scheduling package deliveries to customers homes. Initially, the commercial service will be limited to specific geogrpahic areas in each city and expand over time. The companies will begin testing later this year.
Walmart and Ford have partnered before in a limited test with Postmates in fall 2018. In that pilot program, which focused on Miami-Dade County, they used simulated self-driving vehicles to study the user experience of delivering groceries. Argo was not involved in that study.
This latest collaboration will use Ford vehicles integrated with Argo AI’s self-driving technology. The aim is to show the potential for for autonomous vehicle delivery services at scale, according to Argo AI CEO and co-founder Bryan Salesky.
The announcement illustrates Ford’s two-track system to launch a commercial service that uses autonomous vehicles to shuttle people and possibly packages. The automaker has been testing the business side of of how a dedicated fleet of autonomous vehicles might operate in the real world. It backed Argo AI in 2016 and tapped the company to develop and test the self-driving system.
It also shows how Austin and Miami have become central to their initials commercialization plans.
Earlier this summer, Argo AI and Ford announced plans to launch at least 1,000 self-driving vehicles on Lyft’s ride-hailing network in a number of cities over the next five years, starting with Miami and Austin. The first Ford self-driving vehicles equipped with Argo’s autonomous vehicle technology are expected to become available on Lyft’s app in Miami later this year.
We have been raised to believe in recycling, but it has mostly been a sham — only 9% of all plastic waste produced in 2018 was recycled. The beauty industry produces over 120 billion units of packaging every year, little of which is recycled. Globally, an estimated 92 million tons of textile waste ends up in landfills.
Reducing waste is key to meeting environmental milestones, and some retail firms have narrowed in on a unique approach to minimize what their customers throw away: personalization. Accurate personalization can guide consumers to the right products, reducing waste while increasing conversion and loyalty.
Reducing waste is key to meeting environmental milestones, and some retail firms have narrowed in on a unique approach to minimize what their customers throw away: personalization.
For big brands and retailers, personalization is expected to be the top category for tech investment this year. Moreover, personalization holds high appeal, with 80% of survey respondents indicating they are more likely to do business with a company if it offers personalized experiences and 90% indicating that they find personalization appealing, according to a survey by Epsilon.
Startups that deliver sustainable personalization solutions that also improve business for retailers and brands fall into three categories:
- AR virtual try-on with shade matching.
- Advanced virtual fitting rooms with VR/AR for fashion.
- Smart packaging with IoT and distributed ledger technology.
AR virtual try-on with shade matching
Faces are easy to map, since it’s not difficult to virtually place a lipstick color on a face, but using AR and AI to recommend skin-tone-matching makeup products has been challenging for many AR virtual try-on companies. “I’ve been searching for an intuitive foundation-shade-finder tool since launching Cult Beauty in 2008, and nothing has lived up to the experience of having a professional match you in daylight until I discovered MIME,” says Alexia Inge, founder of Cult Beauty. “There are so many variables like light, skin tones, prevalent undertones, device, screen, OS, formula density, formula oxidation, as well as preferences for coverage levels, finish, brand and skin type,” she says.
MIME founder and CEO Christopher Merkle said, “Virtual try-on has exploded in the past few years, but for color cosmetics, the technology doesn’t help solve the primary customer pain point: shade matching. From day one, I decided to focus our company’s R&D efforts exclusively on color accuracy. I want to make sure that when the consumer receives their foundation or concealer in the mail, it’s the perfect shade once applied to their skin.”
MIME’s Shade Finder AI allows consumers to take a photo of themselves, answer a few questions, then get matched with a makeup color that pairs with their skin tone. MIME helps retailers and brands increase their online and in-store purchase conversion by up to five times. More than 22% of beauty returns are due to poor customer color purchases, but Merkle says MIME can get returns as low as 0.1%.
In the two years since Gatik AI came out of stealth, the autonomous vehicle startup has launched pilots with Walmart and Canadian retail giant Loblaw in its bid to prove that self-driving technology combined with box trucks is the secret economic sauce for hauling goods short distances.
Now, the company is expanding into Texas — its fourth market — with a fresh bundle of capital. Gatik said Tuesday it has raised $85 million in a Series B round led by new investor Koch Disruptive Technologies, the venture arm of Koch Industries. Existing investors Innovation Endeavours, Wittington Ventures, FM Capital, Dynamo Ventures, Trucks VC, Intact Ventures and others also participated. Gatik has raised $114.5 million to date.
“We are very much in expansion mode in growth mode and felt that Koch Industries would add the most value,” Gatik CEO and co-founder Gautam Narang said in a recent interview, adding that he views the company as a strategic investor.
Gatik has been shuttling goods as part of pilot programs for Walmart in Arkansas and Louisiana and in Ontario, Canada for Loblaw Companies Limited. Gatik also struck a manufacturing partnership with Isuzu in 2020 with an aim to mass produce medium duty autonomous trucks by early 2023.
Unlike other autonomous delivery companies, Gatik isn’t targeting consumers. Instead, the startup is using its autonomous trucks to shuttle groceries and other goods from large distribution centers to retail locations. For instance, Gatik uses about five box trucks to carry goods for Loblaw. On one route in Arkansas, Gatik has removed the human safety driver, which means some of the autonomous box trucks used to carry goods are now “driverless.” The goal is to remove safety operators from all of its box trucks.
Gatik said it has opened an autonomous trucking facility in the AllianceTexas Mobility Innovation Zone, a 26,000-acre industrial, mixed-use, and residential planned development in the Dallas-Fort Worth area that has become a hub of transportation and logistics. The company is already carrying freight for several customers, which it declined to name. Narang did say that the trucks deployed in Texas are based on the Isuzu platforms.
The company plans to have presence in multiple cities within Texas, Narang said.
Its move to Texas follows other autonomous vehicle technology companies such as Aurora, Kodiak Robotics, TuSimple and Waymo that have set up shop in the state. The decision to expand into Texas was driven by its status an international shipping hub, the regulatory environment that supports autonomous vehicle testing and deployment on public roads and favorable weather. Narang added that the abundance and variety of potential customers will also allow it to have a multi-tenant operation. This means it can use the same truck throughout the day for multiple customers.
The new funding will be used add more vehicles to its fleet of Class 3-6 multi-temperature autonomous box trucks and hire more employees, particularly in Texas. Today, Gatik’s roughly 70 employees are spread between its headquarters in Palo Alto, engineering center in Toronto and operations in Arkansas and Louisiana.
Narang said they plan to double the number of employees to around 150 people in the next six to nine months.
Point Pickup Technologies, a last-mile delivery service, has acquired white label e-commerce platform GrocerKey for $42 million, according to the company. With the acquisition, Point Pickup now allows retailers to offer same-day delivery, from purchase to fulfillment to delivery, under their own brand name, rather than under third parties like Instacart.
Instacart made a killing delivering groceries and goods for retailers during the coronavirus pandemic, with a generated revenue of $1.5 billion in 2020 and $35 billion worth of sales. The company has an estimated 9.6 million active users and over 500,000 “shoppers” who pick up and deliver goods.
New entrants to the same-day delivery space are cropping up, which aligns with the expected growth of the industry to $20.36 billion by 2027, according to Allied Market Research. But companies like Amazon and Instacart that perform this service and host a delivery marketplace get far more than sales revenues – they also get all the customer data.
Tom Fiorita, founder and CEO of Point Pickup, says retailers should have a right to own that data themselves. The acquisition of GrocerKey, which brings on board the company’s front-end consumer-facing sales engine and predictive analytics, puts the data and brand recognition back in the retailer’s hands.
“If you are a customer of Instacart, you pay them a subscription, they own your buying habits, your credit cards, your data,” Fiorita told TechCrunch. “Instacart was a big thing during COVID because no one had delivery. So now retailers woke up and said, ‘Oh my god, I can’t just have an Instacart-like marketplace be selling my goods. I don’t know who my customers are, I don’t have their credit cards or data.’ And you know data runs the world now.”
Another recent, if not smaller, entrant to the space is Canadian startup Tyltgo, which operates under a similar model to what Point Pickup is now offering via GrocerKey’s technology. In both cases, the buyer goes directly onto the merchant’s platform and places the order through them, so it feels like they’re interacting with the brand they purchased from. And on Tuesday, Walmart also announced a new white-label delivery service that would allow other merchants to tap into its own delivery platform to get orders to their customers.
Fiorita founded Point Pickup in 2015 as a reaction to Amazon’s increased omnipotence with the noble, if not naive, mission to “save local America.” Walmart and Kroger, two of the largest grocery retailers in the U.S., are Point Pickup’s top customers, alongside other nationwide retailers like Albertsons, Giant Eagle and more. But Fiorita believes the service his company is offering will be even more impactful when it starts to work its way down to the mid-sized and small- to medium-sized businesses.
“We built this not only to survive against Amazon or Instacart, but because these small businesses need this for their survival,” Fiorita said. “These companies will no longer survive if they continue to allow other companies to sell their merchandise and to own their customer, including the data, the advertising, the CPG dollars and everything.”
Point Pickup offers deliveries of everything from grocery to general merchandise, pharmacy and oversized delivery. It has a network of 350,000 gig economy drivers across 25,000 ZIP codes in all 50 states.
Since the company’s network of drivers, who often pick and pack the products for the customer as well as deliver the goods, comprises all gig workers with their own vehicles, Point Pickup doesn’t have a clear picture of the percentage of its fleet that’s electric or hybrid. Fiorita speculates it’s probably on par with nationwide rates, if not higher. A recent Pew Research report found that 7% of Americans say they own an EV or hybrid.
Fiorita said that the type of car drivers own is taken into account during recruitment and that the company is looking for ways to incentivize drivers to buy less polluting vehicles. He also said Point Pickup is a vehicle-agnostic platform, meaning it’s piloting other delivery vessels like drones and autonomous robots.
To compete with the big dogs in the space like Amazon and Walmart, both of which are either testing or already have in place electric delivery vans, Point Pickup will have to also make efforts to beef up its strategy in the carbon emissions space.
Hello friends, and welcome back to Week in Review!
I’m back from a very fun and rehabilitative couple weeks away from my phone, my Twitter account and the news cycle. That said, I actually really missed writing this newsletter, and while Greg did a fantastic job while I was out, I won’t be handing over the reins again anytime soon. Plenty happened this week and I struggled to zero in on a single topic to address, but I finally chose to focus on Bezos’s Blue Origin suing NASA.
The big thing
I was going to write about OnlyFans for the newsletter this week and their fairly shocking move to ban sexually explicit content from their site in a bid to stay friendly with payment processors, but alas I couldn’t help myself and wrote an article for ole TechCrunch dot com instead. Here’s a link if you’re curious.
Now, I should also note that while I was on vacation I missed all of the conversation surrounding Apple’s incredibly controversial child sexual abuse material detection software that really seems to compromise the perceived integrity of personal devices. I’m not alone in finding this to be a pretty worrisome development despite Apple’s intention of staving off a worse alternative. Hopefully, one of these weeks I’ll have the time to talk with some of the folks in the decentralized computing space about how our monolithic reliance on a couple tech companies operating with precious little consumer input is very bad. In the meantime, I will point you to some reporting from TechCrunch’s own Zack Whittaker on the topic which you should peruse because I’m sure it will be a topic I revisit here in the future.
Now then! Onto the topic at hand.
Federal government agencies don’t generally inspire much adoration. While great things have been accomplished at the behest of ample federal funding and the tireless work of civil servants, most agencies are treated as bureaucratic bloat and aren’t generally seen as anything worth passionately defending. Among the public and technologists in particular, NASA occupies a bit more of a sacred space. The American space agency has generally been a source of bipartisan enthusiasm, as has its goal to return astronauts to the lunar surface by 2024.
Which brings us to some news this week. While so much digital ink was spilled on Jeff Bezos’s little jaunt to the edge of space, cowboy hat, champagne and all, there’s been less fanfare around his space startup’s lawsuit against NASA, which we’ve now learned will delay the development of a new lunar lander by months, potentially throwing NASA’s goal to return astronauts to the moon’s surface on schedule into doubt.
Bezos’s upstart Blue Origin is protesting the fact that they were not awarded a government contract while Elon Musk’s SpaceX earned a $2.89 billion contract to build a lunar lander. This contract wasn’t just recently awarded either, SpaceX won it back in April and Blue Origin had already filed a complaint with the Government Accountability Office. This happened before Bezos penned an open letter promising a $2 billion discount for NASA which had seen budget cuts at the hands of Congress dash its hoped to award multiple contracts. None of these maneuverings proved convincing enough for the folks at NASA, pushing Bezos’s space startup to sue the agency.
This little feud has caused long-minded Twitter users to dig up this little gem from a Bezos 2019 speech — as transcribed by Gizmodo — highlighting Bezos’s own distaste for how bureaucracy and greed have hampered NASA’s ability to reach for the stars:
“To the degree that big NASA programs become seen as jobs programs and that they have to be distributed to the right states where the right Senators live, and so on. That is going to change the objective. Now your objective is not to, you know, whatever it is, to get a man to the moon or a woman to the moon, but instead to get a woman to the moon while preserving X number of jobs in my district. That is a complexifier, and not a healthy one…[…]
Today, there would be, you know, three protests, and the losers would sue the federal government because they didn’t win. It’s interesting, but the thing that slows things down is procurement. It’s become the bigger bottleneck than the technology, which I know for a fact for all the well meaning people at NASA is frustrating.
A Blue Origin spokesperson called the suit, an “attempt to remedy the flaws in the acquisition process found in NASA’s Human Landing System.” But the lawsuit really seems to highlight how dire this deal is to the ability of Blue Origin to lock down top talent. Whether the startup can handle the reputational risk of suing NASA and delaying America’s return to the moon seems to be a question very much worth asking.
Here are the TechCrunch news stories that especially caught my eye this week:
OnlyFans bans “sexually explicit content”
A lot of people had pretty visceral reactions to OnlyFans killing off what seems to be a pretty big chunk of its business, outlawing “sexually explicit content” on the platform. It seems the decision was reached as a result of banking and payment partners leaning on the company.
Musk “unveils” the “Tesla Bot”
I truly struggle to even call this news, but I’d be remiss not to highlight how Elon Musk had a guy dress up in a spandex outfit and walk around doing the robot and spawned hundreds of news stories about his new “Tesla Bot.” While there certainly could be a product opportunity here for Tesla at some point, I would bet all of the dogecoin in the world that his prototype “coming next year” either never arrives or falls hilariously short of expectations.
Facebook drops a VR meeting simulator
This week, Facebook released one of its better virtual reality apps, a workplace app designed to help people host meetings inside virtual reality. To be clear, no one really asked for this, but the company made a full court PR press for the app which will help headset owners simulate the pristine experience of sitting in a conference room.
Social platforms wrestle with Taliban presence on platforms
Following the Taliban takeover of Afghanistan, social media platforms are being pushed to clarify their policies around accounts operated by identified Taliban members. It’s put some of the platforms in a hairy situation.
Facebook releases content transparency report
This week, Facebook released its first ever content transparency report, highlighting what data on the site had the most reach over a given time period, in this case a three-month period. Compared to lists highlighting which posts get the most engagement on the platform, lists generally populated mostly by right wing influencers and news sources, the list of posts with the most reach seems to be pretty benign.
Safety regulators open inquiry into Tesla Autopilot
While Musk talks about building a branded humanoid robot, U.S. safety regulators are concerned with why Tesla vehicles on Autopilot are crashing into so many parked emergency response vehicles.
Some of my favorite reads from our Extra Crunch subscription service this week:
The Nuro EC-1
“..Dave Ferguson and Jiajun Zhu aren’t the only Google self-driving project employees to launch an AV startup, but they might be the most underrated. Their company, Nuro, is valued at $5 billion and has high-profile partnerships with leaders in retail, logistics and food including FedEx, Domino’s and Walmart. And, they seem to have navigated the regulatory obstacle course with success — at least so far…”
A VC shares 5 keys to pitching VCs
“The success of a fundraising process is entirely dependent on how well an entrepreneur can manage it. At this stage, it is important for founders to be honest, straightforward and recognize the value meetings with venture capitalists and investors can bring beyond just the monetary aspect..“
A crash course on corporate development
“…If you’re going to get acquired, chances are you’re going to spend a lot of time with corporate development teams. With a hot stock market, mountains of cash and cheap debt floating around, the environment for acquisitions is extremely rich.”
Thanks for reading! Until next week…
Six years ago, I sat in the Google self-driving project’s Firefly vehicle — which I described, at the time, as a “little gumdrop on wheels” — and let it ferry me around a closed course in Mountain View, California.
Little did I know that two of the people behind Firefly’s ability to see and perceive the world around it and react to that information would soon leave to start and steer an autonomous vehicle company of their very own.
Dave Ferguson and Jiajun Zhu aren’t the only Google self-driving project employees to launch an AV startup, but they might be the most underrated. Their company, Nuro, is valued at $5 billion and has high-profile partnerships with leaders in retail, logistics and food including FedEx, Domino’s and Walmart. And, they seem to have navigated the regulatory obstacle course with success — at least so far.
Yet, Nuro has remained largely in the shadows of other autonomous vehicle companies. Perhaps it’s because Nuro’s focus on autonomous delivery hasn’t captured the imagination of a general public that envisions themselves being whisked away in a robotaxi. Or it might be that they’re quieter.
Those quiet days might be coming to an end soon.
This series aims to look under Nuro’s hood, so to speak, from its earliest days as a startup to where it might be headed next — and with whom.
The lead writer of this EC-1 is Mark Harris, a freelance reporter known for investigative and long-form articles on science and technology. Our resident scoop machine, Harris is based in Seattle and also writes for Wired, The Guardian, The Economist, MIT Technology Review and Scientific American. He has broken stories about self-driving vehicles, giant airships, AI body scanners, faulty defibrillators and monkey-powered robots. In 2014, he was a Knight Science Journalism Fellow at MIT, and in 2015 he won the AAAS Kavli Science Journalism Gold Award.
The lead editor of this EC-1 was Kirsten Korosec, transportation editor at TechCrunch (that’s me), who has been writing about autonomous vehicles and the people behind them since 2014; OK maybe earlier. The assistant editor for this series was Ram Iyer, the copy editor was Richard Dal Porto, and illustrations were drawn by Nigel Sussman. The EC-1 series editor is Danny Crichton.
Nuro had no say in the content of this analysis and did not get advance access to it. Harris nor Korosec have any financial ties to Nuro.
The Nuro EC-1 comprises four articles numbering 10,600 words and a reading time of 43 minutes. Here are the topics we’ll be dialing into:
- Part 1: Origin story “How Google’s self-driving car project accidentally spawned its robotic delivery rival” (3,200 words/13 minutes) — explores the early days of Nuro and its founders and how they realized that the most useful robot they could ever build would be an autonomous delivery vehicle.
- Part 2: Regulations “Why regulators love Nuro’s self-driving delivery vehicles” (2,400 words/10 minutes) — analyzes how Nuro won over federal regulators and navigated a patchwork of policies to be able to test and deploy its autonomous delivery vehicles in several states.
- Part 3: Partnerships “How Nuro became the robotic face of Domino’s” (2,500 words/10 minutes) — digs into Nuro’s relationship with Domino’s as well its trials with other companies including fast casual restaurant chain Chipotle, Kroger grocery stores and CVS pharmacies and how those relationships have affected the design and functions of the R2 bot.
- Part 4: Operations “Here’s what the inevitable friendly neighborhood robot invasion looks like” (2,500 words/10 minutes) — examines where Nuro has set up shop, and more importantly, how it goes about picking locations and learning from its experiences.
We’re always iterating on the EC-1 format. If you have questions, comments or ideas, please send an email to TechCrunch Managing Editor Danny Crichton at firstname.lastname@example.org.
Pandemic pizza was definitely a thing.
U.S. consumers forked out a record-breaking $14 billion to have pizza delivered to their doors in 2020, and nearly half of that total was spent with just one brand: Domino’s.
“Domino’s is the home of pizza delivery,” said Dennis Maloney, Domino’s chief innovation officer. “Delivery is at the core of who we are, so it’s very important for us to lead when it comes to the consumer experience of delivery.”
U.S. consumers forked out a record-breaking $14 billion to have pizza delivered to their doors in 2020, and nearly half of that total was spent with just one brand: Domino’s.
In its latest TV ad, an order of Domino’s pizza speeds to its destination inside a Nuro R2X delivery autonomous vehicle (AV). The R2X (now known as R2) deftly avoids potholes, falling trees and traffic jams caused by The Noid — a character created by Domino’s in the 1980s to symbolize the difficulties of delivering a pizza in 30 minutes or less.
The reality is much more sedate. Domino’s currently has just one R2X that operates from a single Domino’s store on the generally calm streets of Woodland Heights in Houston, Texas. And since the AV’s introduction in April, The Noid has yet to put in an appearance.
“The R2X adds a bunch of efficiencies while not taking away from any existing capabilities,” Maloney said. “As we start getting the bot into regular operation, we’ll see if it plays out the way we expect it to. So far, all the indications are good.”
Partnerships are key for Nuro. The company’s business model is to sign contracts with established brands that either have their own branded vehicles or use traditional delivery companies like UPS or the U.S. Postal Service.
Nuro is carrying out trials and pilot deliveries with a number of companies, including fast casual restaurant chain Chipotle, Kroger grocery stores, CVS pharmacies, bricks-and-mortar retail behemoth Walmart, and, most recently, global parcel courier FedEx. While it is a dizzyingly impressive list for a company less than five years old, their interest was driven as much by global trends as by Nuro’s technology, admits Cosimo Leipold, head of partnerships at Nuro.
“Everybody today wants what they want and they want it faster than ever, but frankly they’re not willing to pay for it,” Leipold said. “We’ve reached a point where almost every company is going to have to offer delivery services, and now it’s just the question of how they’ll do it in the best possible way and with the most possible control.”
Nuro’s delivery AVs — aka bots — offer the tantalizing promise of safe, reliable and efficient delivery without sacrificing revenue and customer data to third-party platforms like Grubhub, DoorDash or Instacart. Alongside Nuro’s stated aim of driving the cost of delivery down to zero, it is little surprise that Nuro now finds itself in the enviable position of being able to pick and choose the partners it wants — and the less enviable position of having to choose which partner to prioritize.
Here’s the story of how one of Nuro’s biggest partnerships came to be, and the lessons and companies that will drive its future growth.
Deliveries with extra cheese
Domino’s has a long history of innovating in delivery, usually accompanied by a strong marketing campaign. In the 1980s, the company bought 10 customized Tritan Aerocar 2s, a Jetsons-styled three-wheeler, for use as delivery vehicles. In 2015, the company unveiled the DXP, a Chevrolet Spark modified with a single seat and a built-in warming oven, designed specifically for transporting pizza.
In early 2021, a Nuro autonomous delivery vehicle pulled to a halt at a four-way stop in its hometown of Mountain View, California to let a user cross. This seemingly humdrum moment quickly looked like a decidedly science fiction storyline — the user was a small sidewalk robot from another startup on its own mission.
“Obviously, we yielded to it, but it was, wow, we have entered a different world,” said Amy Jones Satrom, head of Operations at Nuro.
Mountain View is home to competitor Waymo and other autonomous vehicle testing activity. But for those who want to take part in that science fiction scene, Houston provides the full experience.
Nuro’s operations team has to delicately balance speed, safety, convenience and congestion, even as the company embarks on a growth spurt that will see robots spreading to other cities, states and partners in the months ahead.
Waymo is testing self-driving trucks in Houston, and a fully driverless shuttle service is due to start public service there early next year. Nuro’s Texas effort started in April, when an R2 robot began its commercial pizza delivery service in partnership with Domino’s. Some customers ordering pizzas from the Domino’s Woodland Heights store will see the option to have their pies delivered by robot.
Customers can trace the progress of the self-driving vehicle on the Domino’s app and, when it pulls up outside their home, tap in a unique PIN on its touchscreen to access their order. Nuro is also operating in Houston with Kroger supermarkets and FedEx.
“One of the things we laugh about is how customers constantly talk to the bot,” Dennis Maloney, Domino’s chief innovation pfficer said. “It’s almost like they think it’s ‘Knight Rider.’ It’s very common for customers to thank it or say goodbye, which is great because that indicates we’re creating an engaging experience that they’re not frustrated by.”
Creating an experience, where people want to chat with their new robot neighbors instead of chasing them down the street with pitchforks, falls to Jones Satrom’s operations team. It has to delicately balance speed, safety, convenience and congestion, even as Nuro embarks on a growth spurt that will see robots spreading to other cities, states and partners in the months ahead.
Here’s how it manages that, and what the future holds for Nuro’s ever-so-gentle robot invasion.
Mapping the territory
Few people are as well suited to overseeing Nuro’s high-stakes robot rollout as Jones Satrom, who started her career as a nuclear engineer on an aircraft carrier and previously managed the integration of Kiva Systems’ robots into Amazon’s warehouses.
Amazon and parent of its top Indian seller Cloudtail have decided to not continue their joint venture after May 2022, the two firms said in a statement Monday, hours after India’s top court ruled that the American e-commerce firm and Walmart’s Flipkart must face antitrust investigations.
Billionaire N.R. Narayana Murthy’s Catamaran, the parent firm of Cloudtail, and Amazon launched the joint venture in the country in 2014. The joint venture had restructured its ownership in 2019 following India’s new regulations for e-commerce firms.
The development follows India’s Supreme Court ruling earlier in the day that Amazon and Flipkart must face antitrust investigations ordered against them in the country. The Indian watchdog — the Competition Commission of India — ordered an investigation into the firms last year for allegedly promoting select sellers (those in which they own a stake) on their e-commerce platforms and using business practices that stifle competition.
In a statement Monday, the two firms said Cloudtail — registered as Prione Business Services — enabled over 300,000 sellers and entrepreneurs to go online and provided 4 million merchants with digital payment capabilities. The joint venture, they said, helped merchants and small businesses access millions of customers in India.
Cloudtail is one of the largest sellers on Amazon in India. The e-commerce group has stakes in a few more third-party sellers including Appario Retail, which is its joint venture with Patni Group.
“As our JV with Amazon reaches the end of its tenure, I reflect on this successful partnership that introduced the power of digitization and empowered hundreds of thousands of SMBs across big and small towns,” said M.D. Ranganath, President of Catamaran, in a statement.
Long-standing laws in India have constrained Amazon, which has yet to turn a profit in the country, and other e-commerce firms to not hold inventory or sell items directly to consumers. To bypass this, firms have operated through a maze of joint ventures with local companies that operate as inventory-holding firms.
India got around to fixing this loophole in late 2018 in a move that was widely seen as the biggest blowback to the American firm in the country at the time. Amazon and Walmart-owned Flipkart scrambled to delist hundreds of thousands of items from their stores and made their investments in affiliated firms way more indirect.
In June this year, India proposed even tougher e-commerce rules that, among other things, prohibits Amazon, Flipkart and other e-commerce players from running their in-house / private labels. The new proposal asks e-commerce firms to ensure that none of their related and associated parties are listed on their platforms as sellers for selling to customers directly.
“Amazon and Catamaran entered into a JV in the early days of e-commerce in India with a shared vision of transforming hundreds of thousands of small businesses in a fast-changing digital world, by providing online capabilities enabling them to access customers both in India and globally,” said Amit Agarwal, Global Senior VP and Country Head of Amazon India, in a statement.
Amazon announced this morning it’s expanding its faster, same-day delivery service to half a dozen more U.S. cities. The service, which the retailer has been working to make same-day delivery even faster over the past year, now offers consumers in a number of markets the ability to shop up to 3 million items on Amazon.com, then receive their orders in only a few hours.
To do so, Amazon invested in what it called “mini-fulfillment centers” closer to where customers lived in select U.S. markets, initially in Philadelphia, Phoenix, Orlando, and Dallas. Those customers could then shop across a dozen merchandise categories, including Baby, Beauty & Health, Kitchen & Dining, Electronics, Pet Supplies, and more. As the pandemic continued to impact Amazon’s business, in November 2020, Amazon expanded its faster same-day service to more cities, to include Nashville and Washington, D.C.
With today’s expansion, Amazon is rolling out same-day delivery to Prime members in Baltimore, Chicago, Detroit, Tampa, Charlotte, and Houston, bringing the total markets served to 12. In these markets, shoppers will be able to place orders online throughout the day then have items on their doorstep in as fast as 5 hours, Amazon says. Customers can also place orders by midnight to have their orders arrive the following morning.
The service continues to be free with no additional charges on orders over $35 that qualify for same-day delivery. Orders under $35 have a $2.99 fee for Prime customers, and a $12.99 fee for non-members. Prime membership, meanwhile, is $12.99 per month or $119 per year.
The time frame commitments for same-day delivery are the same as those Amazon promised last year when it first announced its plans to speed up Prime delivery. Orders placed between midnight and 8 AM will arrive today by 1 PM. Orders placed between 8 AM and 1 PM arrive by 6 PM; those placed between 1 PM and 5 PM will arrive by 10 PM; and those placed between 5 PM and midnight will arrive overnight by 8 AM. That means customers can place orders fairly late and receive their items before they head out of the house the next day.
Faster same-day delivery has been one of the most significant services Amazon has used to challenge rivals like Walmart and Target, who both benefit from having a large brick-and-mortar footprint that allows them to more quickly serve their customers through same-day order pickup, curbside pickup, and same-day delivery services. While Walmart partners with third-parties on its same-day service, Express delivery, largely focused on grocery, Target acquired delivery service Shipt in 2017 to bring its fast delivery services in-house.
In response to the growing competition, Amazon has been recently acquiring smaller warehouse space inside major urban metros, including in these six new markets where it’s now announcing same-day delivery, as well as larger markets, like New York, and even suburban neighborhoods. It also acquired Whole Foods for $137.7 billion in 2017, not only to more fully participate in the online grocery business, but also in part because of its large retail footprint.
As Amazon has sped up the pace of what’s available under “Prime” delivery, it has wound down its older “Prime Now” business, which was retired Aug. 30 and will be fully shut down by year-end. The separate app had allowed customers to shop items that were available in one or two hours for an additional fee.
The news follows Amazon’s earning miss last week, when the retailer fell short of Wall St.’s estimates for revenue, and gave a weaker than-expected outlook for the quarter ahead, which Amazon attributed to difficult comparisons with a time frame that included Covid lockdowns during height of the pandemic in 2020. The company reported $113.08 billion in revenue and earnings of $15.12, versus expectations of $115.2 billion and $12.30.
What comes to mind when you think of livestreaming? In the U.S., most people would name their favorite celebrity leading a Q&A on Instagram or a gamer doing a speedrun on Twitch.
In China, it’s shopping, streamed live.
Livestream e-commerce has taken off in China in the last few years and is expected to yield more than $60 billion this year. In 2019, 37% of online shoppers in China (a cool 265 million people) made purchases on livestreams — and that was well before quarantine. In 2020, it’s estimated to have reached around 560 million people.
During Taobao’s annual Single’s Day Global Shopping Festival in 2020 (China’s Black Friday), livestreams accounted for $6 billion in sales — nearly doubled from a year earlier.
Starting to see a trend? The big U.S. companies have noticed, and they’re jumping on the bandwagon faster than you can say, “Swipe up to buy now!”
Last December, Walmart livestreamed shopping events on TikTok. Amazon released a live platform where influencers promote items and chat with customers. Instagram launched a Shop feature that encourages users to browse and buy within the app. Facebook also kicked off Live Shopping Fridays for the beauty and fashion categories.
“It’s an entertaining way for shops to tell the story behind their products. It brings buyers closer than ever to their favorite creators and allows them to have a voice in the conversation.”
Startups are growing fast to keep up with the heavy hitters — PopShop.Live raised $20 million to let people buy everything from books and toys to jewelry from sellers who livestream their offerings, and Whatnot raised a $50 million Series B, largely to expand its livestream commerce infrastructure. There’s also a burgeoning category of SaaS tools such as Bambuser, which is working with brands like Klarna to test native livestream shopping directly within branded apps.
At this pace, retailers will all welcome livestream commerce teams like they have influencer partnerships in recent years. It’ll just be part of the digital equation to stay competitive and relevant in the future of marketplaces and e-commerce.
From B.C. to 5G: The evolution of shopping
What is old is new again. Your grandparents spent years watching QVC because it balanced the experience of speaking with an associate with the convenience of their retirement community’s TV room. Livestream is today’s version of “shoptainment,” where hosts showcase products dynamically, interact with their audiences and build urgency with short-term offers, giveaways and limited-edition items.
Now, with livestream commerce, hosts can form deeper customer connections and answer questions in real time. It’s a new standard of communication that holds a longstanding truth from Istanbul’s Grand Bazaar to smartphones: People shop to kill time and are more likely to buy when they feel connected with a salesperson.
Walmart’s investments in software and retail technologies it used to transform its business from a brick-and-mortar to one that combines both in-person and online shopping will now be made available to other retailers for the first time, the company announced today. Through a strategic partnership with Adobe, Walmart will integrate access to Walmart’s Marketplace, as well as its various online and in-store fulfillment and pickup technologies, into the Adobe Commerce Platform.
The technologies will be made available to both Adobe Commerce and Magento Open Source customers, Adobe says.
The deal will allow Walmart to potentially reach thousands of small to mid-sized retailers, who will effectively be able to tap into the same tools that one of the largest global retailers is using to run their business.
Through the partnership, Adobe retail customers will be able to do things like show store pickup eligibility and available pickup times online; offer multiple pickup options like curbside and in-store pickup; provide their store associates with mobile tools to pick for orders, validate item selections and handle substitutions; and use tools to communicate with customers about their pickup orders, like those where customers can alert store associates of their ETA or arrival for curbside pickup.
Another aspect of the partnership will allow retailers to syndicate and sell their products across Walmart’s Marketplace.
The arrangement not only aims to benefit Walmart’s bottom line as it offers new revenue streams related to retail technologies, it could also serve as another tool in Walmart’s battle with Amazon for online retail dominance.
Retail businesses will use the Adobe Commerce platform to reach an expanded set of customers by listing products on Walmart’s Marketplace and then leverage Walmart’s Fulfillment Services to offer two-day shopping across the U.S.
And this, in turn, could boost the number of available products sold on Walmart’s Marketplace, which is still largely dwarfed by Amazon.
Walmart’s Marketplace had grown to an estimated 70,000 sellers in 2020, fueled by a surge in online shopping triggered by the pandemic, according to third-party estimates. This was a more than doubling over 2019. Today, the marketplace is topping 100,000 sellers, per Marketplace Pulse data. Amazon’s Marketplace, on the other hand, counts an estimated 6.3 million total sellers worldwide, 1.5 million of which are currently active, per estimates.
Part of Walmart’s problem in scaling its marketplace business could be related to its ease-of-use on the seller side. Many smaller sellers have reported that Walmart’s Marketplace is far more difficult to use than Amazon’s, and they’ve complained about waiting months to hear back from Walmart about whether they were approved to sell on the platform.
Adobe’s partnership could help to address some of those challenges.
Adobe also notes it’s working to consolidate its other channel solutions into a single, unified extension that would allow its retail customers to sell across multiple sales channels — including Amazon’s — using one, integrated tool for easy account setup and catalog syndication.
This is the first time Walmart has made its retail technologies available to other businesses, the company said. And it has yet to forecast what sort of revenue the new partnership could bring in. But it’s a path that Amazon has also been pursuing in recent years to maximize the return on investment from its novel, retail innovations, like its A.I. and computer vision-powered Just Walk Out system that lets customers skip the checkout line.
“The core mission of helping people save money and live better is at the heart of every idea including Scan & Go and checkout technologies, AI-powered smart substitutions and pickup and delivery,” said Suresh Kumar, chief technology officer and chief development officer of Walmart Inc., in a statement. “Combining Adobe’s strength in powering commerce experiences with our unmatched omni-customer expertise, we can accelerate other companies’ digital transformations,” he said.
Adobe’s retail customers in the U.S. will be able to integrate Walmart’s technologies in their own storefronts starting in early 2022, the companies said. Pricing and other details will be provided closer to launch.
While today’s announcement concerns channel partner Adobe, who will help to resell the technologies, Walmart also has a GoToMarket team that will target retailers directly.
Yes Virginia, there are advantages to exhibiting in (the sold-out) Startup Alley at TC Disrupt 2021. Out of all the early-stage startups ready to exhibit on September 21-23, Team TechCrunch hand-picked 50 to form the Startup Alley+ cohort.
Startup Alley+ is a VIP experience designed to help founders grow their business and increase their opportunities right now in the run-up to Disrupt.
Hold up: Don’t miss the opportunity to meet and network with all the innovative startups you’ll find in Startup Alley — including the Startup Alley+ cohort. Attend Disrupt for less than $100 — if you buy your early bird pass before prices go up on July 30 at 11:59 pm (PT).
The VIP experience includes three masterclass sessions on crucial topics that all startup founders need to, well, master. Case in point: product-market fit. It’s an elusive and yet essential first step to unlocking growth. You can’t build success without a product that quenches the demand of a thirsty market.
On August 24, Dan Olsen will conduct a masterclass on the art and science of product-market fit. Olsen, a product management trainer and consultant, works with CEOs and product leaders to build strong product teams. His clients include Google, Facebook, Amazon, Uber, Box and Walmart.
A best-selling author of The Lean Product Playbook, Olsen has literally written the book on product-market fit. In his masterclass, How to Create Product-Market Fit, Dan will draw on material in the book and share his simple but effective framework. He will explain his Product-Market Fit Pyramid and The Lean Product Process, a six-step methodology that guides you through how to:
- Determine your target customer
- Identify underserved customer needs
- Define your value proposition
- Specify your MVP feature set
- Create your MVP prototype
- Test your MVP with customers
Dan will illustrate these concepts with real-world examples and a comprehensive case study.
We’re especially excited to have Dan present his masterclass because he’s firmly rooted in TechCrunch lore. Way back in 2009, a company called YourVersion — founded by Olsen — won the peoples’ choice at TechCrunch50, the precursor to Disrupt.
Olsen’s product-market fit expertise — and his personal connection to the early-stage founder experience — will help the Startup Alley+ cohort learn how to turn product management into more of a science than an art and improve their odds of success.
TechCrunch Disrupt 2021 takes place September 21-23. Don’t miss your opportunity to attend for less than $100. Buy your early bird pass here before the deal expires on July 30 at 11:59 pm (PT).
Is your company interested in sponsoring or exhibiting at Disrupt 2021? Contact our sponsorship sales team by filling out this form.
In the United States, same-day and next-day Amazon Prime deliveries have become the de facto standard in e-commerce. People want convenience and instant gratification, evidenced by the fact that an astonishing ~45% of U.S. consumers are Amazon Prime members.
Most major retailers are scrambling to catch up to Amazon by partnering with last-mile delivery startups. Walmart has become a major investor in Cruise for autonomous-vehicle deliveries, and Target acquired Shipt and Deliv last-mile delivery startups to increase its delivery speed. Costco partnered with Instacart for same-day deliveries, and even Domino’s Pizza has jumped in by partnering with Nuro for last-mile delivery using autonomous vehicles.
E-commerce in LatAm has taken off at a compound annual industry growth rate of 16% over the past five years.
The holdout: Latin America
Venture capitalists have been investing heavily in last-mile delivery over the past five years on a global scale, but Latin America (LatAm) has lagged behind. Over $11 billion has been invested globally in last-mile logistics over the past decade, but Latin America only saw about $1 billion over the same period (Source: PitchBook and WIND Ventures research).
Within this, only about $300 million was in Spanish-speaking Latin America — a surprisingly small amount for a region that has 110 million more consumers than in the U.S.
Brazil-based Loggi accounts for about 60% of last-mile VC investment in Latin America, but it only operates in Brazil. That leaves major Spanish countries like Mexico, Colombia, Chile and Argentina without a leading independent last-mile logistics company.
In these countries, about 60% of the last-mile delivery market is dominated by small, informal companies or independent drivers using their own trucks. This results in inefficiencies due to a lack of technologies such as route optimization as well as a lack of operating scale. These issues are quickly becoming more pronounced as e-commerce in LatAm has taken off at a compound annual industry growth rate of 16% over the past five years.
Retailers are missing an opportunity to give customers what they want. Customers today expect free, reliable same- or next-day delivery — on-time, all the time, and without damage or theft. All of these are challenging in LatAm. Theft, in particular, is a significant problem, because unprofessional drivers often steal products out for delivery and then sell them for a profit. Cost is a problem, too, because free same- and next-day deliveries are simply not available in many places.
Operational and technological roadblocks abound
Why does Latin America lag when it comes to the last mile? First, traditional LatAm e-commerce delivery involves multiple time-consuming steps: Products are picked up from the retailer, delivered to a cross-dock, distributed to a warehouse, delivered to a second cross-dock, and then finally delivered to the customer.
By comparison, modern delivery operations are much simpler. Products are picked up from the retailer, delivered to a cross-dock, and then delivered directly to the customer. There’s no need for warehousing and an extra pre-warehouse cross-dock.
And those are just the operational challenges. Lack of technology also plays a significant role. Most delivery coordination and routing in LatAm are still done via a spreadsheet or pen and paper.
Dispatchers have to manually pick up a phone to call drivers and dispatch them. In the U.S., computerized optimization algorithms dramatically cut both delivery cost and time by automatically finding the most efficient route (e.g., packing the most deliveries possible on a truck along the route) and automatically dispatching the driver that can most efficiently complete the route based on current location, capacity and experience with the route. These algorithms are almost unheard of in the Latin America retail logistics sector.
Major retail brands are the last-mile catalyst
The Conversion Wizards, a conversion rate optimization (CRO) consultancy, was entrusted with boosting the conversion rates of a multibillion dollar company.
We used research to optimize the page and ran an A/B test. The winning version, labeled “radical,” resulted in a 75% increase in sales.
The original and double-control pages are actually identical. And to ensure that our judgment is sound, we always include a double-control.
We took the average of those two identical pages as the baseline to determine the lift, and it revealed a 75% increase at 99% statistical significance.
Here are the Google optimize screenshots:
A look under the hood
Before I discuss the changes that produced the lift, it is important that I quickly go over the research that informed those changes. Why? Because it is a critical aspect of the process and too many CRO practitioners do not devote enough attention to figuring out why more site visitors aren’t converting.
Help TechCrunch find the best growth marketers for startups.
Provide a recommendation in this quick survey and we’ll share the results with everybody.
We surveyed both bouncing visitors and subscribers to the Subscribe & Save program. One of the important questions we asked the bouncing visitors was: “If you did not purchase today, what was your reason?”
Alt-Bionics made waves back in late 2019 when the brand new startup competed at the University of Texas at San Antonio (UTSA) Tech Symposium. The company finished second to 3BM’s infrared paint-curing system, but Alt went on to capture national and international headlines on the strength of promising technology and a great story.
A writeup on the school’s site noted that, at $700, its prosthetic hand cost a mere fraction of the cost of standard systems. Most of the subsequent coverage has focused on the story of the team’s journey from good idea to marketable product, with CEO/co-founder (and USTA engineering grad) Ryan Saavedra noting that these sorts of products can range from $10,000-$150,000 a pop. The company is working to a price point around $3,500.
In the meantime, the Alt-Bionics team has been chronicling product development on social media. Before we get this roundup stared in earnest, we wanted to check in with Saavedra about how the past three years have gone and what the future holds for the company. And bonus: We’ve got a couple of unreleased renderings that Alt notes are “not indicative of our final product. Just merely a celebratory rendering our team put together to announce the completion of our patent” — so take that as you will.
TechCrunch: Why are prosthetics prohibitively expensive?
I’ll start by saying that they aren’t expensive to manufacture and they do not need to be so expensive to the user. At all. There is no one answer for this, but I will do my best to summarize the multiple reasons behind the exorbitant prices surrounding bionic hands. We have found that there are two parts to the end price/cost of prosthetic devices. A third (but secondary reason) will also be discussed.
The manufacturer. The manufacturer develops and creates these bionic devices and then sells them to prosthetic and orthotic clinics (one of the few places you can be fitted for and purchase these devices). The most affordable bionic prosthetic hand sold to P&O clinics starts at about $10,000 and can go up to hundreds of thousands of dollars. Oddly enough, this cost doesn’t always reflect the functionality or performance of the devices. These manufacturers ultimately determine the prices of their devices. The larger among them cite overhead costs as the primary reason they cannot lower their price tags.
The prosthetic & orthotic clinic. We are still learning more about the specifics, but these clinics handle the medical insurance side of things. This means that they submit LCodes (insurance codes for bionic hands, suggested by the manufacturer) to the medical insurance company for reimbursement. These LCodes have floor and ceiling reimbursement amounts that the prosthetist can select. The reimbursement amount is commonly more than what they paid for the hand, and covers the time and effort the clinic and clinician put into procurement, fitting, testing, assembly and patient care. While normally a reasonable margin is obtained (through reimbursement amounts closer to the floor), we have seen reimbursement amounts exceed $124,000 for a $10,000 hand (from a 2018 patient receipt).
Technological stagnation. The technology for bionic hands has been stagnant for almost 15 years, with companies only just now emerging as competitors in this space. Larger companies in this space are tackling more than the one area of transradial (below elbow) bionic prosthetic devices. This means that their attention is not solely focused on the development and affordability aspects of upper extremity prostheses. The stagnation has meant that there are no external factors or forces being pressed on the existing devices and their manufacturers. Essentially, they have no reason to lower the prices, so they remain the same. This is more of an affirmation that reason No. 1 is a larger problem.
TechCrunch: How has the reception been from the broader medical community?
Wonderful! Clinics, clinicians, patients, potential users and other competing companies have all been incredibly supportive of our mission. The space and companies, while competitive, are all aiming for the same thing: using technological advancements to give people a better quality of life.
There is obviously some skepticism at first at how we are able to achieve our much lower price point ($3,500), but it is quickly assuaged when we talk with them about our technologies and processes. We are currently discussing partnerships with prosthetic and orthotic clinics to help develop devices that not only help patients, but also lessen the burden of prosthetists in the repair and maintenance of these devices.
TechCrunch: How far along is the project? What’s the current timeline for bringing it to market?
The project is just emerging from its infancy and is about 42% complete. Some notable achievements are as follows:
- Successful proof of concept with Army Ranger, Ryan Davis. December, 2019.
- Alt-Bionics was formed. May 2020.
- $42,000 SolidWorks grant from D’Assault Systems. July, 2020.
- Provisional patent filed. June, 2021.
- $50,000 investment from the city of San Antonio’s SAMMI Fund. July 2021.
The current timeline to bring our device to market is one year from the closing of our seed round of financing. We have, to date, raised $142,000 of our $200,000 goal and are looking to close out this round by September.
TechCrunch: What have the biggest challenges been so far?
Navigating the FDA regulatory space and raising capital. It is no secret that the FDA regulatory process is a fearsome beast. There are even companies dedicated to assisting those looking to bring medical devices to market, navigate the process and all its intricacies. Alt-Bionics was recently accepted into a biomedical accelerator program based out of San Antonio, Texas, and will be working with regulatory experts to ensure we have a smooth rest of the ride to market. While our mission is noble and our business plan sound, COVID has brought about many worries and fears from investors. The inability to pitch to a live audience has hindered us from being able to appear in front of investors and has made raising capital a little more difficult than it normally is for a company like ours.
TechCrunch: What is your funding status? How much have you raised thus far and are you looking to raise more?
To date, Alt-Bionics has raised a total of $142,000 from a handful of investors and has received a $50,000 investment from the city of San Antonio’s SAMMI fund. We are looking for an additional $58,000 from accredited investors to help fill out our seed round. From there our timeline of one year to market begins (though we have a hefty head start) and Alt-Bionics will push into its Series A, which will allow us to bring on additional engineers, develop the technology further and expand into international markets.
TechCrunch: Are developing markets going to be a key target?
Developing countries will be a key market for Alt-Bionics, particularly through NGOs, and will play an important part in our international expansion. We see a large opportunity to provide our medical devices to these markets. Affordability is critical to our mission to provide access to these devices and therefore we believe we will be successful with this expansion.
And now back to your regularly scheduled roundup.
I’ll cop to the fact that when Berkshire Grey announced a “$23+” million deal for grocery picking robots, I had one name in mind: Walmart. After talking a bit about Walmart’s mixed robotics play in this panel a couple of weeks back, I’d heard rumblings the company was getting set for a big new play in the category.
Granted, the Symbotic deal doesn’t necessarily mean BG isn’t teaming with Walmart on this one, but it’s worth noting that the mega-retailer loves talking about its big spending on automation. From the outside, looking in, at least, it seems like these deals are often as much about the PR of looking like it’s ready to compete with Amazon as they are about actually competing with Amazon (win-win, I guess).
The deal will bring Symbotic’s tech to 25 additional Walmart distribution centers (the two have been running pilots since 2017) in a rollout that will take “several years,” per Walmart. I’ve speculated before (and will happily continue to do so) that one or several of these robotic fulfillment companies are a no-brainer acquisition for Walmart, though Symbotic is probably a bit tougher, given existing ties with competitors like Target.
Berkshire Grey, meanwhile, continues to go the public route. Revolution Acceleration Acquisition Corp. (RAAC) shareholders are set to vote on the SPAC deal on July 20. Newly soon to be acquired Fetch, meanwhile, announced a deal with supply chain logistics company Korber for a new pallet robot designed to replace forklifts.
A pair of cool research projects this week. Devin wrote about a team from Facebook AI, UC Berkeley and Carnegie Mellon University that is exploring Rapid Motor Adaptation, a method that allows quadrupedal robots to adapt to uneven terrain on the fly. This quote from one of the Berkley researchers gets to the heart of the matter: “We do not learn about sand, we learn about feet sinking.”
Meanwhile, I wrote about research at MIT’s CSAIL that involves using robotic arms to get people dressed. It’s a promising bit of functionality for eldercare robotics and technology that could assist people with mobility issues.
Ask anyone who runs a fulfillment/warehouse robotics company what companies’ top motivation is for embracing automation and they’ll probably cite labor shortages or shipping speeds. The looming truth of the matter boils down to one word: Amazon. And while it’s true that smaller businesses are feeling the worst crunch, no one is immune to the online retailer’s dominance. Not even Walmart.
Today, the fellow retail giant announced its latest robotics partnership, teaming with Massachusetts-based automation company Symbotic. The two announced today an extension of their relationship that will bring robotics to 25 regional Walmart distribution centers. The company says the rollout will take “several years” to complete.
The deal follows a 2017 pilot that brought Symbotic’s autonomous robotics platform to Walmart’s Brooksville, Florida distribution center in a bid to increase freight sorting, stocking and unloading.
“The digital transformation happening today, alongside evolving customer habits, is reshaping the retail industry,” Walmart’s Joe Metzger said in a release. “To serve customers now, and in the future, our business must provide the right tools and training to our associates so they can deliver the items our customers want, when they want them, with unmatched convenience. We’re investing in our supply chain at an unprecedented scale in order to optimize that process end-to-end.”
Walmart has been aggressive about piloting robots over the last several years, in hopes of expediting some of its processes. As we’ve noted before, however, its results have, thus far, been uneven. Most notable is the case of Bossa Nova Robotics. The startup was thrown for a loop when Walmart ended its contract with the inventory robotics maker. That’s what pilots are for, of course, but that likely doesn’t dull the sting for the smaller company.
Symbotic has a significantly stronger track record, however. The company lists among its partners one of Walmart’s biggest competitors: Target. And while Walmart could be exploring the possibility of acquiring its own startups (à la Amazon, which built its robotics wing atop its acquisition of Kiva Systems), it seems like existing ties could make such a deal a large hurdle.
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.
It was a busy weekend for everyone, regardless of whether you were watching the technology, what Branson was up to, or the footie. I won’t take sides on the match, but I will say that it was gripping unto the very end and a great example of sport. Now, the news:
- Microsoft is said to be hunting up the purchase of RiskIQ, a cybersecurity firm. The deal is reported to be worth around $500 million.
- And this weekend, Twitter began to conform with new regulations in India, moves that come after it lost some legal protections during a scrap with the Indian government.
- China’s tech market has been busy: News is out concerning ByteDance’s IPO delay, Tencent is being forced to drop some music label exclusivity, and the Chinese government recently blocked a merger of streaming giants in the country.
- There’s big news out from Flipkart this morning, thanks to its recent and huge new funding round worth $3.6 billion.
- And returning to the cybersecurity theme from earlier, startups in the sector are having a lovely time raising capital in recent months, it turns out.
And don’t forget that earnings season is just around the corner. It’s a pretty important cycle. Why? Because startup valuations are hot, and could take a hit if earnings come up short. And the IPO market is pretty freaking active; poor earnings from major tech companies could crimp exit-prices for mature startups.
Ok! Talk to you on Wednesday!
It’s no surprise that the coronavirus pandemic has changed the way we shop, especially when it comes to groceries. Grocery delivery apps experienced a record number of downloads in March 2020, and by the following month, Walmart Grocery (which is now integrated into the Walmart app) surpassed Amazon as the No. 1 shopping app on both Google Play and the App Store. But even as pandemic restrictions have eased, consumers are still using ordering groceries for delivery or pickup more frequently than they were pre-pandemic.
As Walmart’s grocery delivery services have continued to boom, posing competition to companies like Amazon and Instacart, the tech that Walmart uses has expanded too. Today, Walmart shared information about how it’s training its AI to make smarter substitutions in online grocery orders.
Bringing this technology to grocery delivery isn’t novel by any means. Last May, Walmart reported how it used to AI to determine eligibility for its Express delivery service, which was brand new at the time. A year into the United States’ coronavirus outbreak, Instacart engineers reported that they crunched “petabytes daily to predict what will be on grocery shelves and even how long it will take to find parking.”
So what makes Walmart’s AI for grocery substitutions unique? According to Srini Venkatesan, an Executive Vice President at Walmart Global Tech, it’s the sheer quantity of data that Walmart can use to teach its AI. Over 200 million people shop at Walmart in-store and online each week for more than 150,000 different grocery products. The AI uses that data to predict consumer behavior, preferences, and needs.
“The tech we built uses deep learning AI to consider hundreds of variables — size, type, brand, price, aggregate shopper data, individual customer preference, current inventory and more — in real time to determine the best next available item,” explained Venkatesan. “It then preemptively asks the customer to approve the substituted item or let us know they don’t want it, an important signal that’s fed back into our learning algorithms to improve the accuracy of future recommendations.”
Rather than asking a Personal Shopper to make a quick decision about how to substitute for cherry yogurt (do you get a different flavor from the same brand, the same flavor from a more expensive brand, and so on), the AI makes that choice for them. Walmart started developing this algorithm last year, and in the time since, customer acceptance of substitutions has improved.
“We were at about 90% before this algorithm rolled out,” said Venkatesan. “We are now around 97% to 98%.”
In the last year, Walmart doubled its number of Personal Shoppers to over 170,000 workers. About 3,750 stores are enabled for order pickup, and 3,000 stores are enabled for delivery, which covers 68% of the population. Earlier this year, Walmart dropped the $35 order minimum on its Express delivery service, a competitor to Amazon’s Prime Now.
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 Breathwrk, Wikipedia, Quizlet, StatMuse, and Tabelog participated in the beta test, and now, TikTok says providers like BuzzFeed, Jumprope, IRL, 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.
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.
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…
Not looking to send any more business Amazon’s way on Prime Day? We can’t blame you. If you’re still hoping to snag a nice price on a good gadget, though, one side effect of Amazon’s manufactured holiday is that it has spawned a number of competing sales from other retailers. Target has kicked off a three-day “Deal Days” sale to directly counter Amazon’s event, for instance, while Walmart is advertising its own “Deals for Days” promotion.
As with Prime Day, most of the offers here aren’t particularly notable, but for the ones that are, these sales price-match much of what’s available on Amazon’s site. So if you’d rather opt out of Amazon’s summer cash grab, you don’t need to miss out on a discount that’s caught your eye.
To help you out, we’ve gathered up the best non-Prime-Day deals we can find that are currently going on at Target, Walmart, Best Buy, and other online tech outlets. The offers include good prices on Google’s Nest smart home gear and new Roku media streamers a recently launched back-to-school sale from Apple that bundles a pair of AirPods with various Macs and iPads, the lowest price we’ve tracked on Sony’s excellent WH-1000XM4 noise-canceling headphones, a good drop on Xbox Game Pass subscriptions, and more. You can check out our full roundup below.