Thursday, April 15, 2021

TechCrunch

TechCrunch

SoftBank in talks to invest up to $500 million in Swiggy

Posted: 15 Apr 2021 02:41 AM PDT

SoftBank Vision Fund 2 is in advanced stages of talks to invest up to half a billion dollars into food delivery startup Swiggy, two sources familiar with the matter told TechCrunch. The new investment values the Indian startup at about $5.5 billion, the sources said.

The new investment would add to the $800 million fundraise Swiggy unveiled earlier this month. SoftBank began exploring investment in India’s food delivery space earlier this year, and also looked at Swiggy’s rival Zomato. But the investment firm picked Swiggy earlier this week, a person familiar with the matter said.

Swiggy and SoftBank declined to comment.

The new investment talks come amid Zomato raising $910 million in recent months as the Gurgaon-headquartered firm prepares for an IPO this year. The last tranche of investment valued Zomato at $5.4 billion. During its fundraise, Zomato said it was raising money partially to fight off "any mischief or price wars from our competition in various areas of our business."

A third player, Amazon, also entered the food delivery market in India last year, though its operations are still limited to parts of Bangalore.

At stake is India's food delivery market, which analysts at Bernstein expect to balloon to be worth $12 billion by 2022, they wrote in a report to clients earlier this year.

After raising $800 million, Swiggy co-founder and chief executive Sriharsha Majety told employees in a memo that the new fundraise “gives us a lot more firepower than the planned investments for our current business lines. Given our unfettered ambition though, we will continue to seed/experiment new offerings for the future that may be ready for investment later. We will just need to now relentlessly invent and execute over the next few years to build an enduring iconic company out of India."

He added in that memo that the long-term goal for the startup is to serve 500 million users in the next 10-15 years, pointing to Chinese food giant Meituan, which had 500 million transacting users last year and is valued at over $100 billion.

"We're coming out of a very hard phase during the last year given Covid and have weathered the storm, but everything we do from here on needs to maximise the chances of our succeeding in the long-term," he wrote.

Swiggy, which counts Prosus Ventures among its largest investors, last year eliminated some jobs — so did Zomato — and scaled down its cloud kitchen efforts as it attempted to stay afloat during the pandemic, which had prompted New Delhi to enforce a months-long lockdown.

Indian news outlet the CapTable offers more color on the talks between Swiggy and SoftBank:

On the other hand, Swiggy has had a close relationship with SoftBank Vision Fund India partner and country head Sumer Juneja. In 2015, it had raised a series B investment round from Norwest Venture Partners, where Juneja was a partner. Since then, Juneja has maintained a close relationship with Swiggy CEO Sriharsha Majety and has a seat on the company's board.

"During his stint at Norwest, Sumer was closely involved in Swiggy operationally as well, to the extent that he tracked if the company was successful in onboarding new restaurants, its exclusive partnerships, etc.," said a former employee at Swiggy.

TechCrunch reported on Wednesday that SoftBank Vision Fund 2 is also in talks to invest in Zeta. The investment firm, which has also written checks to e-commerce giant Flipkart, ride-hailing firm Ola, and budget hospitality startup Oyo, earlier this month backed social commerce Meesho.

Further reading: Swiggy seeks a breakout category in high-speed grocery delivery (the CapTable).

Cado Security locks in $10M for its cloud-native digital forensics platform

Posted: 15 Apr 2021 02:22 AM PDT

As computing systems become increasingly bigger and more complex, forensics have become an increasingly important part of how organizations can better secure them. As the recent Solar Winds breach has shown, it’s not always just a matter of being able to identify data loss, or prevent hackers from coming in in the first place. In cases where a network has already been breached, running a thorough investigation is often the only way to identify what happened, if a breach is still active, and whether a malicious hacker can strike again.

As a sign of this growing priority, a startup called Cado Security, which has built forensics technology native to the cloud to run those investigations, is announcing $10 million in funding to expand its business.

Cado’s tools today are used directly by organizations, but also security companies like Redacted — a somewhat under-the-radar security startup in San Francisco co-founded by Facebook’s former chief security officer Max Kelly and John Hering, the co-founder of Lookout. It uses Cado to carry out the forensics part of its work.

The funding for London-based Cado is being led by Blossom Capital, with existing investors Ten Eleven Ventures also participating, among others. As another signal of demand, this Series A is coming only six months after Cado raised its seed round.

The task of securing data on digital networks has grown increasingly complex over the years: not only are there more devices, more data and a wider range of configurations and uses around it, but malicious hackers have become increasingly sophisticated in their approaches to needling inside networks and doing their dirty work.

The move to the cloud has also been a major factor. While it has helped a wave of organizations expand and run much bigger computing processes are part of their business operations, it has also increased the so-called attack surface and made investigations much more complicated, not least because a lot of organizations run elastic processes, scaling their capacity up and down: this means when something is scaled down, logs of previous activity essentially disappear.

Cado’s Response product — which works proactively on a network and all of its activity after it’s installed — is built to work across cloud, on-premise and hybrid environments. Currently it’s available for AWS EC2 deployments and Docker, Kubernetes, OpenShift and AWS Fargate container systems, and the plan is to expand to Azure very soon. (Google Cloud Platform is less of a priority at the moment, CEO James Campbell said, since it rarely comes up with current and potential customers.)

Campbell co-founded Cado with Christopher Doman (the CTO) last April, with the concept for the company coming out of their respective experiences working on security services together at PwC, and respectively for government organizations (Campbell in Australia) and AlienVault (the security firm acquired by AT&T). In all of those, one persistent issue the two continued to encounter was the issue with adequate forensics data, essential for tracking the most complex breaches.

A lot of legacy forensics tools, in particular those tackling the trove of data in the cloud, was based on “processing data with open source and pulling together analysis in spreadsheets,” Campbell said. “There is a need to modernize this space for the cloud era.”

In a typical breach, it can take up to a month to run a thorough investigation to figure out what is going on, since, as Doman describes it, forensics looks at “every part of the disk, the files in a binary system. You just can’t find what you need without going to that level, those logs. We would look at the whole thing.”

However, that posed a major problem. “Having a month with a hacker running around before you can do something about it is just not acceptable,” Campbell added. The result, typically, is that other forensics tools investigate only about 5% of an organization’s data.

The solution — for which Cado has filed patents, the pair said — has essentially involved building big data tools that can automate and speed up the very labor intensive process of looking through activity logs to figure out what looks unusual and to find patterns within all the ones and zeros.

“That gives security teams more room to focus on what the hacker is getting up to, the remediation aspect,” Campbell explained.

Arguably, if there were better, faster tracking and investigation technology in place, something like Solar Winds could have been better mitigated.

The plan for the company is to bring in more integrations to cover more kinds of systems, and go beyond deployments that you’d generally classify as “infrastructure as a service.”

"Over the past year, enterprises have compressed their cloud adoption timelines while protecting the applications that enable their remote workforces," said Imran Ghory, partner at Blossom Capital, in a statement. "Yet as high-profile breaches like SolarWinds illustrate, the complexity of cloud environments makes rapid investigation and response extremely difficult since security analysts typically are not trained as cloud experts. Cado Security solves for this with an elegant solution that automates time-consuming tasks like capturing forensically sound cloud data so security teams can move faster and more efficiently. The opportunity to help Cado Security scale rapidly is a terrific one for Blossom Capital."

Flipkart to acquire online travel firm Cleartrip

Posted: 15 Apr 2021 01:39 AM PDT

Flipkart said on Thursday it has agreed to acquire online travel and hotel ticketing firm Cleartrip as the Walmart-owned e-commerce firm looks to expand its offerings in the world’s second largest internet market.

The deal values 14-year-old Cleartrip, which raised about $74 million prior to the acquisition, at about $40 million, a person familiar with the matter told TechCrunch. The distress sale comes as Cleartrip, like most other travel firms, faces unprecedented stress amid the global pandemic that has severely slowed down people’s appetite to move around.

Indian news outlet MoneyControl reported about the two companies exploring the deal last month.

Cleartrip raised about $74 million prior to selling to Flipkart for $40 million. (Data: Tracxn)

Cleartrip is also a partner of Amazon in India, powering the ticketing engine for the American e-commerce group. The two firms inked a deal in 2019. TechCrunch asked Amazon earlier this week if it was aware and fine with its vendor partner exploring a buyout deal with Flipkart. The American e-commerce firm, which is currently fighting a court battle to block its estranged Indian partner Future Group from selling business to Reliance Retail, did not respond.

Cleartrip will continue to operate as a separate brand, retaining all employees while working closely with Flipkart to “further develop technology solutions to make travel simple for customers,” the two companies said today.

Flipkart has been rumored to be working on introducing flight tickets purchase feature on its marketplace for over a year.

“The Flipkart Group is committed to transforming customer experiences through digital commerce. Cleartrip is synonymous with travel for many customers, and as we diversify and look at new areas of growth, this investment will help strengthen our wide range of offerings for customers. We welcome the Cleartrip team with their deep industry knowledge and technology capabilities to the Flipkart Group and look forward to providing deeper value and travel experiences for customers together,” said Kalyan Krishnamurthy, CEO of Flipkart Group, in a statement.

Philippines ‘buy now, pay later’ startup Plentina raises $2.2M seed round

Posted: 15 Apr 2021 01:12 AM PDT

Plentina co-founders Kevin Gabayan and Earl Valencia

Plentina co-founders Kevin Gabayan and Earl Valencia

E-wallets are rapidly gaining popularity in the Philippines, overtaking credit cards, which have a penetration rate of under 10%. Fintech startup Plentina is leveraging that trend with buy now, pay later (BNPL) installment loans that can be used and repaid through e-wallets.

The company announced today it has closed a $2.2 million seed round, co-led by former Tableau executive and ClearGraph chief executive officer Andrew Vigneault, Unpopular Ventures and DV Collective. Other participants included JG Digital Equity Ventures (JGDEV), Amino Capital, Canaan Partners Scout Fund and Ignite Impact Fund.

Its last funding was $750,000 pre-seed round raised last year from investors including Techstars, Emergent Ventures and the 500 Startups Vietnam Fund. Plentina also participated in the Techstars Western Union and Stanford's StartX accelerator programs.

Plentina launched in the Philippines in October 2020 and has been downloaded more than 30,000 times. Its merchant partners include 7-Eleven Philippines and Smart Communications, a telecom provider with more than 70 million prepaid subscribers.  The company will use its seed round to onboard more merchant partners in the Philippines before expanding in Southeast Asia and other regions.

As BNPL startups raise, a look at Klarna, Affirm and Afterpay earnings

Plentina uses machine learning models to gauge the creditworthiness of loan applicants, drawing on founders Kevin Gabayan and Earl Valencia's data science backgrounds. Gabayan was data science lead at Bump Technologies and then spent five years working at Google after it acquired the startup. Valencia’s experience includes serving as managing director of digital transformation at Charles Schwab.

"We're making BNPL work in emerging markets where few have credit scores and merchants can't easily integrate technology," Valencia, Plentina's chief business officer, told TechCrunch. In addition to alternative credit scoring, the startup also focuses on making installment payment work with merchants' legacy workflows, he said.

So for, Plentina has generated 10 million credit scores from alternative data sources, including mobile data obtained with user permission and retail loyalty programs, and will continue to develop its models as its merchant partnerships and customer base grows. Customers who build good credit scores with Plentina can increase their credit limits and unlock more offers.

Making sense of Klarna

Loans have a flat 5% service fee, with no interest. 7-Eleven and Smart Communications both offer 14 day loans, and Plentina will introduce more dynamic loan terms in the future, Valencia said. Loans can be used to purchase goods at all of 7-Eleven's 3000 stores in the Philippines and prepaid mobile airtime with Smart Communications.

Other installment loan services in the Philippines include BillEase, Tendopay and Cashalo. Valencia said Plentina “aim[s] to be a customer’s financial service partner throughout their lifetime. We're starting by offering closed-loop store credit for essentials purchases for consumers to easily establish their financial identity. As a customer's financial wellness matures, we can graduate them into additional financial services.”

In a press statement about his investment, Vigneault said, "I've worked with many early stage fintech companies over the years. However, I've come across few founders who are as impressive as Kevin and Earl and have been able to achieve such levels of success with customers, channel partners, and product at such an early stage."

Will Carbon and Shahry usher in a wave of buy now, pay later services in Africa?

Cloud kitchen startup JustKitchen to go public on the TSX Venture Exchange

Posted: 15 Apr 2021 12:22 AM PDT

JustKitchen, a cloud kitchen startup, will start trading on the Toronto Stock Exchange (TSX) Venture Exchange on Thursday morning. It is doing a direct listing of its common shares, having already raised $8 million at a $30 million valuation.

The company says this makes it one of the first—if not the first—cloud kitchen company to go public in North America. While JustKitchen launched operations last year in Taiwan, it is incorporated in Canada, with plans to expand into Hong Kong, Singapore, the Philippines and the United States. TSX Venture is a board on the Toronto Stock Exchange for emerging companies, including startups, that can move to the main board once they reach certain thresholds depending on industry.

JustKitchen is using cloud kitchens to create the next generation of restaurant franchising

"It's a really convenient way to get into the market and with the ghost kitchen industry in particular, it's early stage and there's a lot of runway," co-founder and chief executive officer Jason Chen told TechCrunch. "We felt there really was a need to get going as quickly as we could and really get out into the market."

Participants in JustKitchen's IPO rounds included returning investor SparkLabs Taipei (JustKitchen took part in its accelerator program last year), investment institutions and retail clients from Toronto. More than half of JustKitchen's issued and outstanding shares are owned by its executives, board directors and employees, Chen said.

One of the reasons JustKitchen decided to list on TSX Venture Exchange is Chen's close ties to the Canadian capital markets, where he worked as an investment banker before moving to Taiwan to launch the startup. A couple of JustKitchen's board members are also active in the Canadian capital markets, including Darren Devine, a member of TSX Venture Exchange's Local Advisory Committee.

These factors made listing on the board a natural choice for JustKitchen, Chen told TechCrunch. Other reasons included ability to automatically graduate to the main TSX board once companies pass certain thresholds, including market cap and net profitability, and the ease of doing dual listings in other countries. Just Kitchen is also preparing to list its common shares on the OTCQB exchange in the U.S. and the Frankfurt Stock Exchange in Germany.

Spying a pivot to ghost kitchens, SoftBank’s second Vision Fund pours $120 million into Ordermark

Lingoda, an on-demand online language school with live instructors and Zoom classrooms, raises $68M

Posted: 15 Apr 2021 12:17 AM PDT

A startup out of Berlin that’s built and grown a successful online language learning platform based around live teachers and virtual classrooms is announcing some funding today to continue expanding its business.

Lingoda, which connects students who want to learn a language — currently English, Spanish, French or German — with native-speaking teachers who run thousands of 24/7 live, immersion classes across a range of language levels, has picked up $68 million (€57 million). CEO Michael Shangkuan said the funding will be used both to continue enhancing its tech platform — with more tools for teachers and asynchronous supplementary material — and to widen its footprint in markets further afield such as the U.S.

The company currently has some 70,000 students, 1,400 teachers and runs more than 450,000 classes each year covering some 2,000 lessons. Shangkuan said that its revenue run rate is at 10x that of a year ago, and its customer base in that time grew 200% with students across 200 countries, so it is not a stranger to scaling as it doubles down on the model.

“We want the whole world to be learning languages,” Shangkuan said. “That is our vision.”

The funding is being led by Summit Partners, with participation from existing investor Conny Boersch, founder of Mountain Partners. The valuation is not being disclosed.

Founded in 2015 by two brothers — Fabian and Felix Wunderlich (now respectively CFO and head of sales) — Lingoda had only raised around $15 million before now, a mark of the company being pretty capital efficient.

“We only run classes that are profitable,” said Shangkuan (who is from the US, New Jersey specifically) in an interview. That being said, he added, “We can't answer if we are profitable, but we're not hugely unprofitable.” The market for language learning globally is around $50 billion so it’s a big opportunity despite the crowds of competition.

A lot of the innovation in edtech in recent years has been focused around automated tools to help people learn better in virtual environments: technology built with scale, better analytics or knowledge acquisition in mind.

So it’s interesting to come across edtech startups that may be using some of these same tools — the whole of Lingoda is based on Zoom, which it uses to run all of its classes online, and it’s keen to bring more analytics and other tech into the equation to improve learning between lessons, to help teachers get a better sense of students’ engagement and progress during class, and to more — but are fundamentally also retaining one of the more traditional aspects of learning, humans teaching other humans.

This is very much by design, Shangkuan said. At first, the idea was to disrupt in-person language schools, but if the startup had ever considered how and if it would pivot to more automated classes and cut the teachers out of the equation, it decided that it wasn’t worth it.

Shangkuan — himself a language enthusiast who moved himself to Germany specifically to immerse himself in a new country and language, from where he then proceeded to look for a job — noted that feedback from its students showed a strong inclination and preference for human teachers, with 97% saying that language learning in the Lingoda format has been more effective for them than the wave of language apps (which include the likes of Duolingo, Memrise, Busuu, Babbel, Rosetta and many more).

“For me as an entrepreneur trying to provide a great product, that is the bellwether, and why we are focused on delivering on our original vision,” he said, “one in which it does take teachers and real quality experiences and being able to repeat that online.” Indeed, it’s not the only tech startup that’s identified this model: VIPKid out of China and a number of others have also based learning around live teachers.

There are a number of reasons for why human teaching may be more suitable for language acquisition — starting with the fact that language is a living knowledge and so learning to speak it requires a pretty fundamental level of engagement from the learner.

Added to that is the fact that the language is almost never spoken in life in the same way that it is in textbooks (or apps) so hearing from a range of people speaking the language, as you do with the Lingoda format, which is not focused on matching a student with a single instructor (there is no Peloton-style following around instructors here), works very well.

On the subject of the teachers, it’s an interesting format that taps a little into the concept of the gig economy, although it’s not the same as being employed as a delivery driver or cleaner.

Lingoda notes that teachers set their own schedules and call classes themselves, rather than being ordered into them. Students meanwhile pay for courses along a sliding scale depending on various factors like whether you opt for group or one-to-one classes, how frequently you use the service, and which language you are learning, with per-classes prices typically ranging between $6.75 and $14.30 depending on what you choose.

Students can request a teaching level if they want it: there is always a wide selection yet with dozens of levels between basic A1 and advanced C1 proficiency, if you don’t find what you want and order it, it can take between a day and a week for it to materialise, typically with 1-5 students per class. But in any case, a teacher needs to set the class herself or himself. This format makes it fall into more standardized language learning labor models.

“We closely mirror the business model of traditional (brick and mortar) in-person language schools, where teachers work part time in compliance with local laws and have the flexibility to schedule their own classes,” a spokesperson said. “The main difference is that our model brings in-person classes online, but we are still following the same local guidelines.”

After students complete a course, Lingoda provides them with a certification. In English, you can take a recognized Cambridge assessment to verify your proficiency.

Lingoda’s growth is coming at an interesting moment in the world of online education, which has been one of the big juggernauts of the last year. Schools shutting down in-person learning, people spending more time at home, and the need for many of us to feel like we are doing something at a time of so many restrictions have all driven people to spend time learning online have all driven edtech companies to expand, and the technology that’s being used for the purpose to continue evolving.

To be clear, Lingoda has been around for years and was not hatched out of pandemic conditions: many of the learners that it has attracted are those who might have otherwise attended an in-person language class run by one of the many smaller schools you might come across in a typical city (London has hundreds of them), learning because they are planning to relocate or study abroad, or because people have newly arrived in a country and need to learn the language to get by, or they have to learn it for work.

But what’s been interesting in this last year is how services created for one kind of environment have been taken up in our “new normal.” The classes that Lingoda offers become a promise of a moment when we will be able to visit more places again, and hopefully order coffees, argue about jaywalkers, and chat with strangers here and there a little more easily.

"The language learning market is increasingly shifting to online offerings that provide consumers with a more convenient, flexible and cost-effective way to improve their foreign language skills," said Matthias Allgaier, MD at Summit Partners, in a statement. "We believe Lingoda has developed one of the most comprehensive and effective online language learning solutions globally and is positioned to benefit from the ongoing and accelerating trend of digitization in education. We are thrilled to partner with the entire Lingoda team, and we are excited about the future for this business." Allgaier is joining Lingoda’s board with this round.

Updated with an additional investor and a slight change in funding amount due to conversion rates.

Challenger bank N26 to offer insurance products

Posted: 15 Apr 2021 12:00 AM PDT

Fintech startup N26 is launching N26 Insurance as it plans to offer insurance products that you can access from the company's mobile app and website. The first insurance product is a smartphone insurance plan for German customers.

But the startup doesn't plan to stop there. N26 says it is also working on private liability insurance, home insurance, life insurance, pet insurance and coverage for bikes, electronics and large purchases.

The idea is that you'll be able to purchase coverage, manage your plans and initiate claims within the N26 app. As N26 already has your personal information, it should be easier to sign up to a new insurance product through N26 compared to creating a new account in a separate app.

The challenger bank isn't becoming an insurtech company overnight. Instead, it is partnering with other companies, such as Simplesurance, for those products.

"The big thing we're doing in Q1 and Q2 is a big focus on the marketplace," co-founder and CEO Valentin Stalf told me a few months ago. "Early on we always tried to integrate the full experience."

N26 Insurance is the first release of this new API-driven strategy. Partners will be able to integrate their products on their own and N26 will make it easy to share KYC files ('know your customer'), transfer money between N26 and partners, etc.

"Most fintech startups are super low frequency," Stalf said. He mentioned mortgage as one financial product that you set up once and never touch again. These companies have high customer acquisition costs, so N26 can help on that front. For instance, if you purchase a bike online, N26 could recommend a bike insurance product after your purchase.

As for phone insurance launching today, prices will vary depending on your phone. If you spent a lot of money on your phone, your insurance plan is going to be more expensive. N26 lets you opt for annual plans to save a bit of money.

Phone insurance also contributes to the freemium strategy of N26. The company offers free and paid accounts that start at €4.90 per month. The most expensive plan, N26 Metal, costs €16.90 per month and includes phone insurance.

Some customers who might want to insure their phone might be tempted to switch to N26 Metal to insure their phone and get more features, such as travel insurance.

N26 started revamping its plans in November 2020 by introducing a new mid-tier plan called N26 Smart. In Europe, N26 no longer sends you a plastic debit card if you create a free account — you get a virtual debit card that you can add to Apple Pay or Google Pay by default. You either have to pay a one-off €10 fee to receive a plastic card or subscribe to N26 Smart for €4.90 per month.

Offering new products in the app and pushing users toward paid subscriptions should definitely help N26 when it comes to profitability. The startup has grown tremendously over the past few years and the company is focused on consolidating the business as much as possible now.

N26 launches mid-tier subscription plan for €4.90 per month

Atrium, which help sales managers more easily see who is (or isn’t) crushing it, just raised $13.5 million

Posted: 14 Apr 2021 06:44 PM PDT

There’s no shortage of data-driven sales management tools in the market. Naturally, Atrium, a five-year-old, San Francisco-based company cofounded by serial entrepreneur Pete Kazanjy, says it does a far better job of empowering sales managers to improve their team’s performance. How? By giving them easy, digestible, real-time insights into who on their team is outperforming, who is on track to reach his or her goals, and who is losing momentum and in what areas so that potential issues don’t spiral into major problems.

Atrium has convinced investors of its merits. Though Kazanjy candidly offers that an earlier version of the software “was not phenomenal,” its current product line-up just prompted Bonfire Ventures, Bullpen Capital, CRV and First Round Capital to provide the 30-person company with $13.5 million in seed funding so it can more aggressively grow its reach inside of organizations, both big and small. (It already counts roughly 100 companies as customers, including SalesLoft, Clearbit, and SaasOptics.)

As for what Atrium is selling exactly, it’s the continuous monitoring of dozens of key performance indicators like bookings, average selling prices, the number of customer-facing meetings a rep has had in any given week and the length of deal cycles. The idea is to provide managers a clear view into their teams so that when something is off or, conversely, when it’s going better than planned, those same managers can drive positive behavior change.

Perhaps as important, Atrium says it provides automated root-cause analytics via anomaly detection with additional filters to uncover why someone’s performance may be peaking or dipping.  Consider: if someone is doing particularly well, other team members might want to emulate the behaviors that are fueling that success.

The cost of all that monitoring costs $5,000 per year smaller outfits and much more than that for some of Atrium’s bigger customers.

The findings are also delivered to managers where they live, which is via their email and Slack channels, though there’s a web app, too.

As with many software tools, the need for what Atrium makes really began to explode as companies abruptly saw their workforces scatter because of pandemic lockdowns. “The importance of data-driven sales management only only accelerated [in a world] where all of a sudden, managers can’t really tell themselves a story of like, ‘Yeah, I know what’s going on with my team because I can see them right from across the sales floor,'” notes Kazanjy.

He has some personal insight into the issue. Atrium’s own team is largely based in San Francisco, but because it’s also more distributed than before COVID-19 struck the U.S., the company is using its own software, as well as selling it.

Kazanjy previously cofounded TalentBin, a talent search engine that allowed technical recruiters and hiring managers to find passive candidates and which was acquired by Monster in 2014.

He also recently authored a book called Founding Sales, which bills itself as an “early-stage, go-to-market handbook.”

Kazanjy’s background is actually in product management and product marketing, but like a lot of founders, when he launched his last company, the looming question quickly became: who is going to sell this stuff?

Kazanjy quickly realized the answer was himself, in the process becoming TalentBin’s first sales rep, then its first sales manager.

It’s how he learned modern sales and data-driven sales management, deciding afterward to write about the missteps he’d made —  and the solutions he struck on — so people “won’t make the same mistakes.”

Daily Crunch: Coinbase goes public

Posted: 14 Apr 2021 03:06 PM PDT

Coinbase makes an impressive public debut, Dell spins out VMware and Ford announces a new hands-free driving system. This is your Daily Crunch for April 14, 2021.

The big story: Coinbase goes public

Cryptocurrency exchange Coinbase went public today via direct listing at an opening price of $381 per share, climbing to nearly $430 before closing at $328.28 (giving the company a market capitalization of $85.8 billion).

The listing is a major milestone for the cryptocurrency world (with various crypto prices soaring today as well), though there’s at least a tiny bit of irony in the fact that this success comes via the traditional stock market.

The tech giants

Dell is spinning out VMware in a deal expected to generate over $9B for the company — Dell acquired VMware as part of the massive $58 billion EMC acquisition in 2015.

Google's FeedBurner moves to a new infrastructure but loses its email subscription service — Since its acquisition in 2007, FeedBurner lingered in an odd kind of limbo.

Instagram's new test lets you choose if you want to hide 'Likes,' Facebook test to follow — The app has been experimenting with hiding Likes since 2019.

Startups, funding and venture capital

Astranis raises $250M at a $1.4B valuation for smaller, cheaper geostationary communications satellites — While a lot of other companies are looking to build satellite constellations in low-Earth orbit, Astranis is focused on the GEO band, where the large legacy communications satellites currently operate.

MIT startup Pickle raises $5.75M for its package-picking robot — The robot’s name is Dill.

Outschool is the newest edtech unicorn — The new funding values Outschool at $1.3 billion, around four times higher than its roughly $320 million valuation set less than a year ago.

Advice and analysis from Extra Crunch

How to pivot your startup, save cash and maintain trust with investors and customers — Olive CEO Sean Lane explains a painful process.

Alexa von Tobel outlines how founders should manage personal finances — Von Tobel laid out the steps you can take to stay out of debt, build credit and accumulate wealth through investments to ensure you have financial peace of mind as you start a company.

Inside the US' epic first-quarter venture capital results — Funding in the United States nearly doubled compared to the same quarter of 2020, according to PitchBook.

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

Everything else

Ford takes aim at Tesla, GM with its new hands-free driving system — Ford will debut its new hands-free driving feature on the 2021 F-150 pickup truck and certain 2021 Mustang Mach-E models through a software update later this year.

Kroger launches its first Ocado-powered 'shed', a massive, robot-filled fulfillment center in Ohio — Built with a giant grid along the floor, "the shed", as Ocado calls its warehouses, will feature some 1,000 robots alongside 400 human employees.

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

Creator monetization and CRM startup Pico raises $6.5M

Posted: 14 Apr 2021 02:55 PM PDT

Pico, a New York startup that helps online creators and media companies make money and manage their customer data, announced today that it has launched an upgraded platform and raised $6.5 million in new funding.

In a statement, the startup’s co-founder and CEO Nick Chen said Pico helps creators with their two biggest problems — “how to make money more easily and how to get to know your audience better” — while also giving them control over their two most important assets, namely “your brand and the relationship to your audience.”

The company provides a long list of different tools, including landing pages, pop-ups to collect email addresses, paid newsletters, subscription paywalls, tiered membership programs, recurring and one-time donations and video revenue tools. With version 2.0, the company says it’s bringing all these features together with a unified data structure, so that customers can see “who is paying for what content and where they came from” in one dashboard.

Via email, co-founder and President Jason Bade (pictured above with Chen) pointed to “the power of our CRM to help creators understand their audience” as the most significant upgrade, suggesting that this “makes Pico the operating system for the creator economy.”

Pico

Image Credits: Pico

“A creator can't scale a business without the proper tools,” Bade continued. “Take email capture, that is the first step in audience development. But what next? You need data and a CRM to handle it. 2.0 upgrades every part of Pico to rearchitect it for the scalability and extensibility that the creator economy demands.”

Pico also said it will be launching an API soon to support integrations with different parts of the platform.

Apparently, the company has seen its customer count increase nearly 5x in the past year, with customers including The Colorado Sun, Defector Media and The Generalist. And it recently recruited Rodolphe Ködderitzsch (who held a number of roles at YouTube, including global head of partner sales) as its chief revenue officer.

The new funding was led by Ann Lai at Bullpen Capital and brings Pico’s total funding to $10 million. Other investors include Precursor Ventures, Stripe, BloombergBeta and Village Global.

Building customer-first relationships in a privacy-first world is critical

Stripe and Precursor lead $4.5M seed into media CRM startup Pico

 

Hear how to raise big funding (and use it well) from FirstMark’s Rick Heitzmann and Orchard’s Court Cunningham

Posted: 14 Apr 2021 02:30 PM PDT

Orchard, founded in 2017, was relatively early to the proptech industry. The company, originally called Perch, focused on dual-trackers, which are folks who are both buying and selling a home simultaneously. FirstMark Capital led both the Series A and the Series B funding rounds for Orchard, doubling down on the real estate platform.

It goes without saying, we’re absolutely thrilled to have FirstMark Capital Managing Partner Rick Heitzmann and Orchard CEO Court Cunningham join us on an upcoming episode of Extra Crunch Live. The event takes place on May 5 at 3pm ET/noon PT. Register here.

Orchard has raised more than $350 million, including a $200 miilion+ debt financing. Alongside running a full brokerage company for dual-tracking home buyers and sellers, it also offers title and mortgage services. But what’s most interesting about the vertically integrated company is the innovation it’s doing around the consumer experience. Namely, Orchard is taking an entirely new approach to home searching, which has been incredibly stagnant despite the rush to digitize the process by major tech players.

Orchard allows consumers to get ML-driven recommendations based on homes they’ve already liked, and search by different rooms in the house. For example, perhaps the backyard or the kitchen is the most important part of the house — Orchard lets you default to that pic when browsing listings.

Meanwhile, Rick Heitzmann founded FirstMark Capital all the way back in 2008. He’s led investments in companies including Pinterest, Airbnb, StubHub, Tapad, DraftKings, Riot Games, Ro, Discord, Carta and more.

On Extra Crunch Live, we’ll talk more about what Heitzmann looks for in a founder, what he sees in Cunningham and the future of proptech, why Cunningham chose FirstMark and even take a walk through Orchard’s early pitch deck.

We’ll also look at pitch decks submitted by the audience, giving you the chance to hear directly from a founder and investor how they consume funding decks, what works and what doesn’t. If you want to submit your deck to be featured in a future episode of ECL, hit up this link.

It’s gonna be a blast.

As a reminder, anyone can attend Extra Crunch Live, but on-demand access to the content is reserved strictly for Extra Crunch members. You can join Extra Crunch here.

Building customer-first relationships in a privacy-first world is critical

Posted: 14 Apr 2021 02:24 PM PDT

Travis Clinger Contributor
Travis Clinger is SVP, head of addressability and ecosystem at LiveRamp, a data connectivity platform safely moving data through the pipes connecting most every brand, tech platform, publisher and advertiser on the open internet.
Jeff Nienaber Contributor
Jeff Nienaber is senior director, global audience ads at Microsoft Advertising, which provides intelligent solutions that empower advertisers to deliver engaging, personalized experiences to over half a billion people worldwide.

In business today, many believe that consumer privacy and business results are mutually exclusive — to excel in one area is to lack in the other. Consumer privacy is seen by many in the technology industry as an area to be managed.

But the truth is, the companies who champion privacy will be better positioned to win in all areas. This is especially true as the digital industry continues to undergo tectonic shifts in privacy — both in government regulation and browser updates.

By the end of 2022, all major browsers will have phased out third-party cookies — the tracking codes placed on a visitor's computer generated by another website other than your own. Additionally, mobile device makers are limiting identifiers allowed on their devices and applications. Across industry verticals, the global enterprise ecosystem now faces a critical moment in which digital advertising will be forever changed.

Up until now, consumers have enjoyed a mostly free internet experience, but as publishers adjust to a cookieless world, they could see more paywalls and less free content.

They may also see a decrease in the creation of new free apps, mobile gaming and other ad-supported content unless businesses find new ways to authenticate users and maintain a value exchange of free content for personalized advertising.

The truth is, the companies who champion privacy will be better positioned to win in all areas.

When consumers authenticate themselves to brands and sites, they create revenue streams for publishers as well as the opportunity to receive discounts, first-looks and other specially tailored experiences from brands.

To protect consumer data, companies need to architect internal systems around data custodianship versus acting from a sense of data entitlement. While this is a challenging and massive ongoing evolution, the benefits of starting now are enormous.

Putting privacy front and center creates a sustainable digital ecosystem that enables better advertising and drives business results. There are four steps to consider when building for tomorrow's privacy-centric world:

Transparency is key

As we collectively look to redesign how companies interact with and think about consumers, we should first recognize that putting people first means putting transparency first. When people trust a brand or publishers’ intentions, they are more willing to share their data and identity.

This process, where consumers authenticate themselves — or actively share their phone number, email or other form of identity — in exchange for free content or another form of value, allows brands and publishers to get closer to them.

Dell is spinning out VMware in a deal expected to generate over $9B for the company

Posted: 14 Apr 2021 01:34 PM PDT

Dell announced this afternoon that it’s spinning out VMware, a move that has been suspected for some time. Dell acquired VMware as part of the massive $58 billion EMC acquisition (announced as $67 billion) in 2015.

The way that the deal works is that Dell plans to offer VMware shareholders a special dividend of between $11.5 and $12 billion. As Dell owns approximately 81% of those shares that would work out to somewhere between $9.3 and $9.7 billion coming into Dell’s coffers when the deal closes later this year.

“By spinning off VMware, we expect to drive additional growth opportunities for Dell Technologies as well as VMware, and unlock significant value for stakeholders. Both companies will remain important partners, with a differentiated advantage in how we bring solutions to customers,” Dell CEO Michael Dell said in a statement.

$67 billion Dell-EMC deal closes today

While there is a fair amount of CEO speak in that statement, it appears to mean that the move is mostly administrative as the companies will continue to work closely together, even after the spin-off is official. Dell will remain as chairman of both companies.

In a presentation to investors, the companies indicated that the plan to work together is more than lip service. There is a five-year deal commercial agreement in place with plans to revisit that deal each year thereafter. In addition, there is a plan to sell VMware products through the Dell sales team and for VMware to continue to work with Dell Financial Services. Finally, there is a formalized governance process in place related to achieving the commercial goals under the agreement, so it’s pretty firm that these companies will continue to work closely together at least for another five years.

For its part, VMware said in a separate release that the deal will allow it “increased freedom to execute its strategy, a simplified capital structure and governance model and additional strategic, operational and financial flexibility, while maintaining the strength of the two companies' strategic partnership.”

Dell shares are up more than 8% following the announcement. The company intends on using parts of its proceeds to deleverage, writing in a release that it will use “net proceeds to pay down debt, positioning the company well for Investment Grade ratings.” By that it means that Dell will reduce its net debt position and, it hopes, garner a stronger credit rating that will limit its future borrowing costs.

Unpacking how Dell's debt load and VMware stake could come together

Even when it was part of EMC, VMware had a special status in that it operates as a separate entity with its own executive team and board of directors, and the stock has been sold separately as well.

The deal is expected to close at the end of this year, but it has to clear a number of regulatory hurdles first. That includes garnering a favorable ruling from the IRS that the deal qualifies for a tax-free spin-off, which could prove to be a considerable hurdle for a deal like this.

The transaction is not a surprise. The company has been open about its intention to shake up its broader corporate structure. And with Dell bloated in debt terms and, perhaps, in product scope as well, the VMware deal could be an intelligent way forward. Dell investors are more excited about the transaction than VMware shareholders, with the latter company’s stock is up a more modest 1.4%.

VMware’s most recent earnings release notes that it had $4.715 billion in “total cash, cash equivalents and short-term investments.” Perhaps its shareholders aren’t enthused at the prospect of levering VMware’s balance sheet to help Dell do the opposite.

Dell’s debt hangover from $67B EMC deal could put VMware stock in play

 

Grocery startup Mercato spilled years of data, but didn’t tell its customers

Posted: 14 Apr 2021 01:20 PM PDT

A security lapse at online grocery delivery startup Mercato exposed tens of thousands of customer orders, TechCrunch has learned.

A person with knowledge of the incident told TechCrunch that the incident happened in January after one of the company’s cloud storage buckets, hosted on Amazon’s cloud, was left open and unprotected.

The company fixed the data spill, but has not yet alerted its customers.

Mercato was founded in 2015 and helps over a thousand smaller grocers and specialty food stores get online for pickup or delivery, without having to sign up for delivery services like Instacart or Amazon Fresh. Mercato operates in Boston, Chicago, Los Angeles and New York, where the company is headquartered.

TechCrunch obtained a copy of the exposed data and verified a portion of the records by matching names and addresses against known existing accounts and public records. The data set contained more than 70,000 orders dating between September 2015 and November 2019, and included customer names and email addresses, home addresses and order details. Each record also had the user’s IP address of the device they used to place the order.

Mercato raises $26M Series A to help smaller grocers compete online

The data set also included the personal data and order details of company executives.

It’s not clear how the security lapse happened since storage buckets on Amazon’s cloud are private by default, or when the company learned of the exposure.

Companies are required to disclose data breaches or security lapses to state attorneys-general, but no notices have been published where they are required by law, such as California. The data set had more than 1,800 residents in California, more than three times the number needed to trigger mandatory disclosure under the state’s data breach notification laws.

It’s also not known if Mercato disclosed the incident to investors ahead of its $26 million Series A raise earlier this month. Velvet Sea Ventures, which led the round, did not respond to emails requesting comment.

In a statement, Mercato chief executive Bobby Brannigan confirmed the incident but declined to answer our questions, citing an ongoing investigation.

“We are conducting a complete audit using a third party and will be contacting the individuals who have been affected. We are confident that no credit card data was accessed because we do not store those details on our servers. We will continually inform all authoritative bodies and stakeholders, including investors, regarding the findings of our audit and any steps needed to remedy this situation,” said Brannigan.

How to respond to a data breach

Know something, say something. Send tips securely over Signal and WhatsApp to +1 646-755-8849. You can also send files or documents using our SecureDrop. Learn more. 

How to pivot your startup, save cash and maintain trust with investors and customers

Posted: 14 Apr 2021 01:14 PM PDT

A few years ago, founder Sean Lane thought he’d achieved product-market fit.

Speaking to attendees at TechCrunch’s Early Stage virtual event, Lane said Queue, a secure digital check-in tablet for hospital waiting rooms that reduced wait times by uniting and correcting electronic medical records, was “selling like hotcakes.” But once Lane realized it would only ever address one piece of a much bigger market opportunity, he sold off the product, laid off two-thirds of the people affiliated with it and redirected the employees who were left.

Lane explained that what he really wanted to build is what his company — since renamed Olive — has now become, a robotic process automation (RPA) company that takes on hospital workers’ most tedious tasks so nurses and physicians can spend more time with patients.

Customers seem to like it. According to Lane, more than 600 hospitals use the service to assist employees with tasks like prior authorizations and patient verifications.

Investors clearly approve of what Olive is selling, too: Last year, the company raised three rounds of funding totaling roughly $380 million and valuing the company at $1.5 billion. According to Crunchbase, it’s raised a total of $456 million altogether.

In fact, VCs think so much of Lane that in February, they invested $50 million in another company that Lane runs simultaneously called Circulo, a startup that describes itself as building the “Medicaid insurance company of the future.”

Still, the path from point A to B was painful, and it might not have happened if Lane didn’t have a few things going for him, including a deeply personal reason to build something that could have greater impact on the U.S. healthcare system.

Ford takes aim at Tesla, GM with its new hands-free driving system

Posted: 14 Apr 2021 12:48 PM PDT

Ford will debut its new hands-free driving feature on the 2021 F-150 pickup truck and certain 2021 Mustang Mach-E models through a software update later this year, technology that the automaker developed to rival similar systems from Tesla and GM.

That hands-free capability — which uses cameras, radar sensors and software to provide a combination of adaptive cruise control, lane centering and speed-sign recognition — has undergone some 500,000 miles of development testing, Ford emphasized in its announcement and tweet from its CEO Jim Farley in a not-so-subtle dig at Tesla’s approach of rolling out beta software to customers. The system also has an in-cabin camera that monitors eye gaze and head position to help ensure the driver's eyes remain on the road.

The hands-free system will be available on vehicles equipped with Ford’s Co-Pilot360 Technology and will only work on certain sections of divided highways. The system, which will be rolled out via software updates later this year, will initially be available on more than 100,000 miles of highways in North America.

The system does comes with a price. BlueCruise software, which includes a three-year service period, will cost $600. The price of upgrading the hardware will depend on the vehicle. For instance, F-150 owners will have to plunk down another $995 for the hardware, while owners of the “select” Mustang Mach-E model variant will have to pay an additional $2,600. BlueCruise comes standard on CA Route 1, Premium and First Edition variants of the Mustang Mach-E.

While nearly every automaker offers some driver assistance features, Ford is clearly aiming to compete with or capture market share away from GM and Tesla — the two companies with the best-known and capable ADAS. Convincing customers that its system is worth the expense will be critical to meeting its internal target of selling more than 100,000 vehicles equipped with BlueCruise in the first year, based on company sales and take-rate projections.

GM is working on a hands-off advanced driving system for city streets

GM Super Cruise uses a combination of lidar map data, high-precision GPS, cameras and radar sensors, as well as a driver attention system, which monitors the person behind the wheel to ensure they're paying attention. Unlike Tesla's Autopilot driver assistance system, users of Super Cruise do not need to have their hands on the wheel. However, their eyes must remain directed straight ahead.

Tesla’s Autopilot feature also combines sensors like cameras and radar, computing power and software. Autopilot, which comes standard in all new Tesla vehicles, will steer, accelerate and brake automatically within its lane. Tesla uses a torque sensor in the steering wheel to determine if drivers are paying attention, although many owners have found and publicly documented hacks so they can keep their hands off the wheels and eyes off the road ahead. Tesla charges $10,000 for its upgrade to FSD (its own internal branding meant to stand for full self-driving). FSD is not an autonomous system. It does provide a number of more capable driver-assist functions, including automatic lane changes, the ability to recognize and act upon traffic lights and stop signs and a navigation feature that will suggest lane changes en route and automatically steer the vehicle toward highway interchanges and exits.

Ford said that its system communicates with drivers in different ways, including displaying text and blue lighting cues in the instrument cluster, which it says is effective even for those with color blindness.

The so-called BlueCruise hands-free technology will be offered in other Ford vehicle models in the future, the company said. Drivers who opt for the technology will continue to receive software updates as it is improved. Ford said future improvements will include a feature that will let the vehicle change lanes by tapping the turn signal indicator as well as one that will predict and then adjust vehicle speed for roundabouts and curves. The company also said it plans to offer regular mapping updates.

Ford’s Bronco relaunch demonstrates the power of nostalgia

TikTok funds first episodic public health series ‘VIRAL’ from NowThis

Posted: 14 Apr 2021 12:42 PM PDT

TikTok is taking another step toward directly funding publishers’ content with today’s announcement that it’s financially backing the production of media publisher NowThis’ new series, “VIRAL,” which will feature interviews with public health experts and a live Q&A session focused on answering questions about the pandemic. The partnership represents TikTok’s first-ever funding of an episodic series from a publisher, though TikTok has previously funded creator content.

Through TikTok’s Instructive Accelerator Program, which was formerly known as the Creative Learning Fund, other TikTok publishers have received grants and hands-on support from TikTok so they could produce quality instructive content for TikTok’s #LearnOnTikTok initiative. The program today is structured as four eight-week cycles, during which time publishers post videos four times per week.

NowThis had also participated in the Creative Learning Fund last year and was selected for the latest cycle of the Instructive Accelerator Program. But its “VIRAL” series is separate from these efforts.

NowThis says it brought the concept for the show to TikTok earlier this year outside of the accelerator program, and TikTok greenlit it. TikTok then co-produced the series and provided some funding. Neither NowThis nor TikTok would comment on the extent of the financial backing involved, however.

The “VIRAL” series itself is hosted by infectious disease clinical researcher Laurel Bristow, who spent the last year working on COVID treatments and research. Every Thursday, Bristow will break down COVID facts in easy-to-understand language, NowThis says, including things like vaccine efficacy, transmission timelines and treatment. The show will also bust COVID myths, provide information about ongoing public health risks and feature interviews with a cross-section of experts.

Each episode will be 45 minutes in length and will also include an interactive segment where the TikTok viewing audience will be able to engage in a real-time Q&A session about the show’s content. In total, five episodes are being produced, and will air starting on Thursday April 15 at 6 PM ET and will run through Thursday May 13 on the @NowThis main TikTok page.

@nowthisTune in to our new TikTok live show VIRAL on Thursdays at 6pm ET with host @kinggutterbaby♬ original sound – nowthis

NowThis has become one of the most-followed news media accounts on TikTok, with 4.6 million followers across its news and politics channels, since launching a little over a year ago. Because of its focus on video, it’s been a good fit for the TikTok’s platform.

The approach TikTok is taking with “VIRAL’s” production, it’s worth noting, stands in contrast to how other social media platforms are handling the pandemic and COVID-19 information. While most, including TikTok, have pledged to fact-check COVID-19 information, remove misinformation and conspiracies, point users to official sources for health information and provide other resources, TikTok is directly funding public health content featuring scientists and researchers, and then promoting it on its network.

The company explained to TechCrunch its thinking on the matter.

“As the pandemic continues to evolve, we think it’s important to provide our community an outlet to dispel misinformation and communicate with public health experts in real time,” said Robbie Levin, manager of Media Partnerships at TikTok. “NowThis has consistently been a great partner that produces engaging and informative content, so we felt this series would be an impactful and important avenue for our users to receive credible information on our platform,” Levin noted.

Clubhouse promises its accelerator participants either brand deals or $5K per month during the program

While the pandemic has driven the topic of choice here, paying creators for content is not new. And TikTok isn’t the only one to do so. Instagram and Snapchat are both funding creator content for their TikTok clones, Reels and Spotlight, respectively. And new social platforms like Clubhouse are funding creators’ shows, as well.

TikTok says it’s not currently talking to other publishers to produce more series like “VIRAL,” but it isn’t ruling out the idea of expanding its creator funding and producing efforts. In addition to its accelerator program, which is continuing, TikTok says if “VIRAL” proves successful and the community responds positively, it will pursue similar opportunities in the future.

TikTok is a marketer’s shiny new toy, but how do you optimize campaigns?

Beat the deadline: Apply to compete in Startup Battlefield at TC Disrupt 2021

Posted: 14 Apr 2021 12:01 PM PDT

Startup Battlefield — the matriarch of all pitch competitions — is the stuff of tech legend. Heck, it even played a role in the HBO show, "Silicon Valley," and its influence touches early-stage startups around the globe. Under no circumstance will you find a bigger, better platform for launching your startup to the world.

Battlefield has a long history of producing notable names. Need an example? A little startup by the name of Dropbox competed in the Battlefield at TC50 (the precursor to Disrupt) way back in 2008.

TechCrunch is on the hunt for innovative, game-changing startups to take the Startup Battlefield challenge and wrangle with the best-of-the-best at TC Disrupt 2021 in September. Are you game?

Apply to compete in Startup Battlefield before the deadline closes on May 13 11:59 pm (PT).

The stakes: A shot at $100,000 in equity-free prize money. Major exposure for all competing startups — think investors eager to find and fund the next big thing, journalists in search of exciting, game-changing startups to cover and potential customers and partners who can help take your business to new levels of success.

The investment: Your time. Yup, that's it. Applying to and participating in Startup Battlefield is 100% free. No fees, no equity cut. You simply invest your time — all participating founders receive several weeks of training with the Startup Battlefield team. Your demo and presentation will be, well, pitch perfect when you deliver it to panels of top VC judges. And you'll be thoroughly prepped to handle the Q&A that follows.

The perks: In addition to the massive interest from just about all Disrupt attendees, competing startups get exhibition space in the Startup Alley expo area, free passes to future TechCrunch events, a free membership to Extra Crunch and invitations to private events like the Startup Battlefield reception.

You'll meet members of the Startup Battlefield alumni community — we're talking about 922 companies (like Vurb, Mint, Yammer and, yes, Dropbox) that have collectively raised $9.5 billion and produced 117 exits. Once Disrupt ends, you're part of this phenomenal community — just imagine the networking possibilities.

The details: Read more about how Startup Battlefield works.

Applications for Startup Battlefield at TC Disrupt 2021 are now open

TC Disrupt 2021 takes place September 21-23. If you've got an innovative, game-changing startup, apply to compete in Startup Battlefield. Make sure you submit your completed application before the deadline expires on May 13 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.

Kroger launches its first Ocado-powered ‘shed’, a massive, robot-filled fulfillment center in Ohio

Posted: 14 Apr 2021 11:48 AM PDT

After inking a deal to work together almost three years ago, U.S. supermarket chain Kroger and U.K. online grocer Ocado today took the wraps off the first major product of that deal. Kroger has launched a new Ocado-powered customer fulfillment center in Monroe, Ohio, outside of Cincinnati, a gigantic warehouse covering 375,000 square feet and thousands of products for packing and delivering Kroger orders from online shoppers.

Built with a giant grid along the floor, “the shed”, as Ocado calls its warehouses, will feature some 1,000 robots alongside 400 human employees to pick, sort and move items. It is expected to process as much as $700 million in sales annually, the sales of 20 brick-and-mortar stores.

Those orders, in turn, will be delivered in temperature-controlled Kroger Delivery vans, built on the model of Ocado’s vans in the U.S. and able to store up to 20 orders. These will also be run using Ocado software, mapping algorithms to optimize deliveries along the fastest and most fuel-efficient routes.

Image Credits: Kroger

Kroger and Ocado’s partnership was a long time in the making, but the focus on what has come out of it is probably at its keenest right now, given the huge boost online shopping has had in the past year. The COVID-19 pandemic, and the resulting push for more social distancing, has driven a lot of people to the internet to shop, opting for deliveries over physical store visits for some or all of their food and other weekly essentials.

That trend has also spelled more competition in the space, too: the likes of Amazon, Walmart, other traditional grocers getting their digital strategies in order and online players all are hoping for a piece of the market of consumers now ready to buy online.

That tide has also lifted Kroger’s boat. In a call today with journalists, Rodney McMullen, Kroger’s chairman and CEO, said that delivery had grown 150% for Kroger last year.

While some of that may well melt back into physical shopping as and when COVID-19 cases wane (fingers crossed), many in the industry believe that the genie has been let out of the bottle, so to speak: Many consumers introduced to shopping online will stay, at least in part, and so this is about building infrastructure to meet that new demand.

(And there is some data that backs that up: Ocado CEO and co-founder Tim Steiner noted that at Ocado, pre-pandemic the average order value for the company was £105 ($144). That grew to £180 last year, and is now at £120.)

Kroger, like many brick-and-mortar players, has been building out multiple fronts in its digital strategy. Alongside Ocado, the company has also been investing in technology to boost the efficiency of its in-store operations (for example, by working with companies like Shelf Engine), and it has a grocery delivery partnership with Instacart.

Kroger’s partnership with Instacart will remain in place, not least because it covers a much wider geography than the Ocado approach, which is live now in Cincinnati, and sounds like it will also expand to Florida. While Kroger today said that CFCs will vary in size and be built on the concept of “modules” (the Monroe facility is built on seven modules), this is still a capital intensive approach compared to the Instacart model, so might overall face a slower rollout and perhaps only make sense in Kroger’s denser markets.

“The two partnerships are critical to Kroger and our customers,” said Yael Cosset, Kroger’s CIO, in the call today. “We expect to work very closely in strategic partnership with Instacart and with Ocado.”

Ocado, an early player that started out in the U.K. back in 2000, is seen by many as the industry standard for how to build and run an online-only grocery business.

Where top VCs are investing in manufacturing and warehouse robotics

But rather than growing by taking its direct grocery business outside the U.K., the company has been expanding its reach by way of using the technology that it has built for itself and turning it into a product — a process that is still very much in development, with the company working now on robotic pickers and other autonomous systems, along with other technology to power and make its delivery service more efficient.

Ocado’s “AWS” strategy of turning tech that it has built for itself into a product to sell to others has born fruit: it now has partnerships to power online grocery services, and specifically fulfillment centers, in Japan (with Aeon), France (with Casino) and Canada (with Sobeys). That means the Kroger rollout is now a tested model, but it’s still a very notable move for the company to break into the U.S. while at the same time giving Kroger a much-needed bit of infrastructure to better compete with bigger players in the country like Walmart and Amazon.

In that regard, it will be interesting to see how and if Kroger leverages its much bigger Ocado-powered infrastructure for its other projects. The company is working with Mirakl to develop its own marketplace for third-party retailers, going head to head with similar offerings from — yes — Amazon and Walmart.

Deepfake video app Avatarify, which processes on-phone, plans digital watermark for videos

Posted: 14 Apr 2021 10:48 AM PDT

Making deepfake videos used to be hard. Now all you need is a smartphone. Avatarify, a startup that allows people to make deepfake videos directly on their phone rather than in the cloud, is soaring up the app charts after being used by celebrities such as Victoria Beckham.

However, the problem with many deepfake videos is that there is no digital watermark to determine that the video has been tampered with. Avatarify says it will soon launch a digital watermark to prevent this from happening.

Run out of Moscow but with a U.S. HQ, Avatarify launched in July 2020 and since then has been downloaded millions of times. The founders say that 140 million deepfake videos were created with Avatarify this year alone. There are now 125 million views of videos with the hashtag #avatarify on TikTok. While its competitors include the well-funded Reface, Snapchat, Wombo.ai, Mug Life and Xpression, Avatarify has yet to raise any money beyond an angel round.

Despite taking only $120,000 in angel funding, the company has yet to accept any venture capital and says it has bootstrapped its way from zero to almost 10 million downloads and claims to have a $10 million annual run rate with a team of less than 10 people.

It's not hard to see why. Avatarify has a freemium subscription model. They offer a 7-day free trial and a 12-month subscription for $34.99 or a weekly plan for $2.49. Without a subscription, they offer the core features of the app for free, but videos then carry a visible watermark.

The founders also say the app protects privacy, because the videos are processed directly on the phone, rather than in the cloud where they could be hacked.

Avatarify processes user’s photos and turns them into short videos by animating faces, using machine learning algorithms and adding sounds. The user chooses a picture they want to animate, chooses the effects and music, and then taps to animate the picture. This short video can then be posted on Instagram or TikTok.

The Avatarify videos are taking off on TikTok because teens no longer need to learn a dance or be much more creative than finding a photo of a celebrity to animate to.

Avartify says you can't use their app to impersonate someone, but there is of course no way to police this.

Co-founders Ali Aliev and Karim Iskakov wrote the app during the COVID-19 lockdown in April 2020. Ali spent two hours writing a program in Python to transfer his facial expressions to the other person's face and use a filter in Zoom. The result was a real-time video, which could be streamed to Zoom. He joined a call with Elon Mask’s face and everyone on the call was shocked. The team posted the video, which then went viral.

They posted the code on Github and immediately saw the number of downloads grow. The repository was published on 6 April 2020, and as of 19 March 2021 had been downloaded 50,000 times.

Ali left his job at Samsung AI Centre and devoted himself to the app. After Avatarify's iOS app was released on 28 June 2020, viral videos on TikTok, created with the app, led it to App Store's top charts without paid acquisition. In February 2021, Avatarify was ranked first among Top Free Apps worldwide. Between February and March, the app 2021 generated more than $1 million in revenue (Source: AppMagic).

However, despite Avartify's success, the ongoing problems with deepfake videos remain, such as using these apps to make nonconsensual porn, using the faces of innocent people.

Deep science: AI is in the air, water, soil and steel
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Hi I hope you're doing well. I'm reaching out to discuss the possibility of publishing articles on your website. Along with guest ...