TechCrunch

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• Cheugiest tech moments of 2021
• When fundraising, New Zealand startup founders should play the ‘Kiwi card’
• Let’s talk CES 2022 trends
• The Equity team’s 2022 predictions
• India antitrust watchdog orders investigation into Apple’s business practices
• Securing the global digital economy beyond the China challenge
• Record number of unicorns and IPOs: Indian startups raised $39B in 2021

Cheugiest tech moments of 2021 Posted: 31 Dec 2021 11:24 AM PST Technology has come a long way in 2021. There's widespread mRNA vaccines! An asteroid-deflecting space mission! A very powerful laptop with a very controversial notch! But it’s unfortunately easier to think about the cringiest moments of the year than it is to remember times when we marveled at indoor farming robots.  So hop aboard the choo-choo-cheugy train. We promise, this isn’t just a list of things Elon Musk tweeted in 2021. Facebook is so Meta Facebook changes its corporate branding to Meta The biggest and most eye-wateringly silly rebrand of the year is uncontested: Facebook, one of the most recognizable names in the world, changed its name to Meta in order to distract from unflaggingly awful decisions and the irreparable harm it has caused countless people focus on the “metaverse,” something no one asked for and certainly no one wanted Facebook of all companies to take the lead on. Block this out Square is changing its name to Block Meta's not the only rebrand that went teeth-grindingly meta this year. Readers, we present… Block, FKA Square, originally a small business champion known for square-shaped card swiping dongles (quant!). Now, it's taking a bite out of blockchain for its new name and identity, although apparently Block is not just about that. The company says it's also a reference to block parties, building code, obstacles to overcome, "and of course, tungsten cubes." (click for more cringe) Well, not so fast, Jack! H&R Block is already suing Block for trademark infringement, with the name, a block in its logo, and a green color scheme that all come a little too close to home, since H&R Block, best known for tax filing prep, also happens to sell accounting services to SMBs, mobile banking to consumers and other fintech services just like Square's… I mean, Block's. Hard to guess which blockhead will back down first/move to settle here. Saturday Night Musk Image Credits: Bloomberg (opens in a new window) / Getty Images Mr. Musk perhaps said it best when he played a doctor in the Gen Z Hospital skit: "You all might want to sit down, what I have to say might be a little cringe." Elon may have hoodwinked a substantial part of the population of global fanboys hoping to get rich on his coattails, but at the end of the day this couldn't hold any water on Saturday Night Live. He's not an actor, and he's not that funny, so even with the wattage of being one of the world's richest men and a major celeb on social media, his SNL hosting was… a smug, wooden, boring, awkward dud. You're left wondering how/why he was anointed to be in the limelight in the first place (but then again, I wonder that about him most of the time). How do you do, fellow NFT owners Inside the Realms of Ruin The gold rush over NFTs caused some otherwise smart people to attempt to implement them in regrettable ways. Numerous companies announced NFT-adjacent projects, like using them to tokenize fanfic, in-game items, Discord things(?), and so on. After failing to read the internet in general's skepticism of this interesting but at present highly dubious tech, the companies backpedaled madly, sometimes within hours of announcements or rumors. Literally anyone would have said it was a bad idea, try asking next time! Bezos thanks everyone for their money, which he shot into space Image Credits: Joe Raedle / Getty Images The relentless self-congratulatory fanfare around Blue Origin and Virgin Galactic’s first “real” trips to space was extremely tiring. While there was some relief in Branson’s company getting grounded for shady maneuvers, and in Bezos eliciting scorn for his tamales and his giant hat, the chef’s-kiss moment was the latter’s tone-deaf thanks offered to the world that financed his ego trip by shopping at his ethically bankrupt mega-corporation. “I want to thank every Amazon employee, and every Amazon customer, because you guys paid for all this.” I’m sure he meant every word, which is why it’s so bad. (Also pity the poor cowboy hat, which Bezos has definitely also ruined for me.) Blue Origin whining postpones the next Moon landing After losing big time on the Human Landing System contract to arch-rival SpaceX, Blue Origin sued NASA, alleging impropriety. Its claims were dismissed in a highly embarrassing manner (NASA basically pantsed the company in front of the entire industry) but the necessary rigmarole resulted in the planned 2024 crewed lunar landing being pushed out to 2025. To be fair, we all suspected this would be the case anyway, but Blue presented itself as a perfect scapegoat. The blunder may have permanently tainted relations with NASA, which isn't great when they're pretty much Blue Origin's only source of real money… other than "every Amazon employee, and every Amazon customer," of course. OnlyFans bans itself OnlyFans bans explicit content We all know what OnlyFans is for, and it’s been great seeing a platform where sex workers, among others, can monetize themselves. Until that platform abruptly announced that the people who’d made it rich in the first place were henceforth banned. Bye, good luck! The backlash was so severe that the decision, unconvincingly blamed on prudish bankers, was reversed within a week. Don’t bite the hand that feeds you, people. (Unless the hand consents as part of a healthy fantasy.) From the desk of Donald J. Trump Trump’s tempestuous relationship with social media is perhaps too serious a matter to treat of here, but one aspect of it deserves a palm to the face, and that’s his short-lived “social” platform, From The Desk of Donald J. Trump. This barebones microblog appeared after his ouster from every major social media network, but it was so minimally functional and got so little traffic that it only lasted a month or so before being mothballed. No doubt so his media team could focus on borrowing Mastodon’s code for the follow-up, Truth Social. But even that was all just preliminary to the desperate-looking pitch deck and SPAC we would receive later in the year. As they say, if at first you fail badly, fail, fail again. Senator Blumenthal asks Facebook rep to "commit to ending finsta" Now known as the Facebook whistleblower, Frances Haugen leaked thousands of internal documents from her former employer, including some showing that Instagram is aware of its adverse effect on teenage girls. Soon after, Facebook Global Head of Security Antigone Davis was summoned to testify before the Senate about children's internet safety. Senator Richard Blumenthal (D-CT), a 75-year-old, was worried about young people using secret accounts that they hid from their parents. "Will you commit to ending finsta?" he asked. "Senator, let me explain. We don't actually do finsta. What finsta refers to is young people setting up accounts where they may want to have more privacy," Davis patiently replied. Facebook's leaked benefits enrollment video It must be hard to work at Facebook – or, as it's called now, Meta – on days when the company is getting loads of bad press for, you know, not doing enough to stop the January 6 insurrection. But it's also probably hard to work at Facebook when you have to enroll in your benefits. There's some pretty awful stuff detailed in the files that Haugen leaked, but if you want to experience some lower-stakes incredulity at our Metaverse overlords, check out this video. I'm sure Facebook has good benefits – they're a huge, trillion-dollar tech company, after all – but is the subsidized care even worth it when there's choreographed dancing involved? NFTs aren't even good at gatekeeping Bored Apes Yacht Club is like a fraternity for people who love Coinbase. Instead of paying dues to join an exclusive Greek society of bros, you can buy a 52 ETH (~$210,000 at time of publication) NFT of an ape to be part of a cool club. Yes, Jimmy Fallon, Steph Curry and Post Malone are Yacht Club members – just like how some B-list actor was in your college's fraternity twenty years before you were born. But it's not just about the ape – the value of the NFT is that you get access to fancy events and stuff. So, nightlife journalist Adlan Jackson concocted a clever plan to sneak into a Bored Apes party. As it turned out, a friend's boss owned an Ape and sent Jackson a screenshot of a QR code that could get them into the party. The bouncers were checking for some wristband from a previous event, though, not the literal NFT, so he was turned away despite his Ape possession. Later in the night, Jackson tried to get in again, and… they simply let him in. No wristband, no NFT, no nothing. So much for exclusivity! Luckily, Jackson was just in time to see The Strokes frontman Julian Casablancas ask on stage, "This is kind of about art, right? NFTs? I don't know, what the hell. All I know is… a lot of dudes here tonight." Please make it stop GameStop, meme stocks, and the revenge of the retail trader If NFTs are now blowing up in the speculation bubble that is financial social media (how does that not have a short name? FiSo?) they owe a lot to Gamestop, the memestock that could. The company could have headed into oblivion like so many other mediocre retailers crowded out by innovations in technology, consumer habits and changing tastes in entertainment. But instead, it was picked up and carried on the wings of a wave of hype that drove its price into the stratosphere, leading to so, so many questions about who gets to be the gatekeeper in the world of trading, who makes money, and who are the biggest losers. You hate to see people getting manipulated, but also understand why those who bought in hated to be treated like unempowered peons. No one gets covered in glory in this one. But amazing, there has yet to be a final chapter in this saga: the stock is lower compared to January's stratospheric peak, but it's not that far off. Spotify Wrapped is cheugy Yeah, yeah, we know that sharing your Spotify Wrapped round-up is basically just doing free PR for Spotify. But the copywriting on Wrapped read like it was penned by a forty-year-old communications staffer who asked his niece for some phrases that gen-Zers like.Spotify even hired an aura reader named Mystic Michaela to collaborate with them on generating audio auras. The result? Cheugy. "There was one podcast that lived in your head, rent-free, all year long," it said. "You always understood the assignment." "While everyone else was trying to figure out what NFTs were, you had one song on repeat." "You deserve a playlist as long as your skincare routine." why does spotify talk like this? pic.twitter.com/YOm1BUwMKs — Rajat Suresh (@rajat_suresh) December 1, 2021 Elizabeth Holmes has stans Former Theranos founder and CEO Elizabeth Holmes was on trial for criminal fraud for over four months this year. But on the first day of the trial, some fans – yes, fans – showed up dressed as Elizabeth Holmes. If you're blonde, it's a pretty easy costume – just wear a black turtleneck and some red lipstick, put your hair in a low ponytail, and there you go! You're ready for the Halloween party! But these cosplayers were legit, as far as the reporters who talked to them could tell. They really admired Elizabeth Holmes, despite the fact that she may or may not be guilty of serious criminal fraud charges running a company that actively jeopardized people's health by giving them false blood test results. But to each their own. Elizabeth Holmes has arrived at the courthouse and is surrounded by cameras. Three of her fans try to catch a glimpse without losing their spot in line. pic.twitter.com/O5AbR4XTJw — Dorothy Atkins (@doratki) September 8, 2021 Even LinkedIn wants to be like TikTok Basically every social or entertainment platform is finding a way to wedge in a vertically-oriented short form video feed. It makes sense for direct TikTok competitors like Instagram or Snapchat to do this, even though it feels very inorganic and derivative. But toward the end of the year, even companies like Netflix, Spotify, Reddit, Twitter and Pinterest were trying it out. In 2022, Linkedin plans to join them. The professional networking platform tried doing stories this year, but it wasn't as successful as Instagram at integrating that Snapchat copy-cat feature. Fleets fly away Twitter is shutting down Fleets on August 3, citing low usage Then again, Twitter didn't do so hot with Fleets either. I guess you could have seen the writing on the wall with this one: Twitter basically sealed Fleets' fate with its very name. Its own attempt to throw a hat into the short, ephemeral videos never quite struck a note with Twitter users, who mainly love the format precisely for what it does differently from the rest of social media: fast-paced, short punctuations of words and pictures that flutter down from each other with biting humor, searing criticism, perfectly-timed factoids and occasional glimpses of greatness, regardless of your follow numbers. Who really needs another Story format? Especially one launching so late in the day, with no great twist or even easy way to be used? Instagram forgot to turn on teen safety features on the web In July, Instagram tried to cover its metaphorical ass when it comes to user safety by rolling out some new features. One feature made it so that any new account from a user under 16 would default to private. But Senator Marsha Blackburn (R-TN) put tech journalists to shame by unearthing a scoop that was right in front of our eyes for months. If a teen made an Instagram account on the web, it defaulted to public. To be fair, who even uses Instagram for the web? Still, this felt like a pretty big oversight. Head of Instagram Adam Mosseri had to admit under oath that his team messed up. It was pretty cringe, but at the same time, it's an alarming, lackadaisical error for a company that's been repeatedly defending its commitment to teen safety in the Senate this fall. The headline of this article It was Devin’s idea. Amanda enthusiastically approved. Still cheugy.

When fundraising, New Zealand startup founders should play the ‘Kiwi card’ Posted: 31 Dec 2021 10:02 AM PST New Zealand, a country of 5 million people in the South Pacific, has witnessed a shifting tech startup landscape over the last couple of years. While some major global companies like Xero, Rocket Lab, LanzaTech and Seequent have shined a spotlight on New Zealand’s startup scene, the country historically hasn’t had access to much venture capital. As a country with an economy that primarily exports agricultural products, the New Zealand startup world has usually relied on funding from a community of high-net-worth individuals and family offices who probably made their millions through real estate or farming. In March last year, the New Zealand government launched Elevate, an NZD $300 million fund of funds program that’s been providing millions to local VCs to invest into the startup community to fill the early-stage capital gap. At the same time, foreign investors have been flooding onto the scene, attracted to the small country that has a reputation for producing great companies. Founders and VCs in New Zealand are hopeful that the increase in funding from multiple sources is a signal that technology might just become the country’s next big industry. That is, if the momentum that has led to more early-stage capital continues. We spoke to two founders (Peter Beck of Rocket Lab and Cecilia Robinson of Au Pair Link, My Food Bag and Tend) as well as two investors (Phoebe Harrop, principal at Blackbird Ventures, and Robbie Paul, CEO of Icehouse Ventures) to nail down the top tips for New Zealand founders looking to put their mark on the markets. Here’s what we learned. Think big and back yourself New Zealanders typically tend to have an introspective view, failing to think big and globally from day one, Beck said. This is in part due to the fact that Kiwis grow up in a culture that suffers from “tall poppy syndrome,” a phenomenon where people who have achieved any measure of success are derided, cut down or sabotaged. As a result, not many people want to be a tall poppy. Play the Kiwi card. New Zealand sits favorably on the minds of the international community. Icehouse Ventures CEO Robbie Paul “If you’re going to build a company, it’s incredibly painful, it takes a lot of work,” Beck told TechCrunch. “Why would you waste your time building a little company? Let’s build a big company. So go after big problems.” In order to psych yourself up to tackle those big problems, don’t be too humble. New Zealand consistently punches above its weight and produces world-class entrepreneurs and tech startups, Paul said. “Back yourself and know you can win on a global stage,” Paul told TechCrunch. “While starting on a rock at the bottom of the world comes with challenges, there are plenty of advantages, too.” Don’t get starry-eyed over a big check “Remember that the least valuable thing an investor ever gives you is their money,” said Beck. “As you think about building your business, how and where you want to go, make sure you utilize investors to help you get there. People get starry-eyed by the check and don’t really sit back and go, ‘Well, is this person actually strategic to me or not?'” When Beck was building Rocket Lab, he was highly selective about the investors he brought in, saying the differentiating factor between investors is not their capital, but rather who they can call. For example, Khosla Ventures participated in Rocket Lab’s Series A round, which Beck said opened the door to another big VC, Bessemer, to invest, in a Series B. DCVC led the Series C, but by the time Rocket Lab got around to its Series D, Bessemer was paving the way to Greenspring, which is a limited partner (LP) of Bessemer. Sovereign wealth funds, where the real big checks come from, participated in the company’s E round, and they were LPs of Greenspring. “So as your company continues to grow, there are larger and larger pools of capital that you can then go and attract, and if all you’ve got is John from Pakuranga, John doesn’t have the phone number and credibility to sovereign wealth funds,” said Beck. “It’s all about setting up the company so that when you want to do a bigger round, you can go and tap that venture capitalist’s LPs and then it can tap that LP’s LPs and ultimately end up in sovereign wealth funds or others that can write a $100 million check no problems at all. It’s a smooth path there, and where it’s tricky is when there’s no path or the path is truncated, and the challenge with New Zealand is even though there are some better quality venture capital firms in New Zealand, where are their relationships with LPs?”

Let’s talk CES 2022 trends Posted: 31 Dec 2021 09:14 AM PST I spent a chunk of yesterday morning rediscovering the big trends of CES 2012. It's a strange experience, examining so much technology that feels — at once — extremely dated and very recent. With 10 years between you and an event, the macro trends really take shape. Some items are a clear part of a continuum that brings us to the present day. Even more often, however, these things prove to be a kind of evolutionary dead end. Even so, there's a lot we can learn in the moment. CES is billed as a bellwether for the year to come. It also demonstrates how the tech world responds to largely global trends, in a one-stop shop. And let's be real, there's really one key global trend from the past couple of years that's going to drive what happens at the show in every way imaginable. Over the past few weeks, we've received some pushback on our coverage of big-name drop-outs from the in-person portion of the event. To some degree, I understand — or at least can empathize with — the criticism of focusing coverage on COVID-fueled exits, rather than the manufacturer news tied to the event. To that I say, simply, we'll be covering that, too, only we'll be doing it next week when it's actually announced at the show (albeit remotely). In the lead up to the show, however, we can identify/predict the industry trends that are best poised to define CES — and, perhaps by extension, 2022. First, the elephant in the room. CES drop-outs As I write this the list of big-name tech companies that have announced they will be opting out of (or dramatically scaling back from) in-person events includes: GM, Google, Microsoft, AMD, OnePlus, MSI, Lenovo, Intel, T-Mobile, AT&T, Meta, Twitter, Amazon, Proctor & Gamble, Mercedes, BMW, Panasonic, IBM, TikTok and Pinterest. The media side includes TechCrunch, Engadget, The Verge, CNET, PCMag, Tom's Guide, Tech Radar and more. It's not exactly a full list — but it's surely a lot more than the CTA hoped for. There are, however, still some big names participating, including Samsung, Sony, LG and Qualcomm. Given the late stage at which many companies opted out, those who attend the show are due for a surreal experience, full of big-name, unstaffed booths. CES dodged the shutdown bullet in 2020 by the skin of its teeth. 2021, meanwhile, felt like a referendum on whether a hardware event at this scale can go entirely virtual. Based on our own experiences of navigating the show online, the answer was decidedly a no. With the CTA planning a return to an in-person event for 2022, I will be interested to see whether the organization has dramatically improved the experience for those who won't be in Vegas. Connected fitness The last few years have been huge for this category — for what should be obvious reasons. Mirror was acquired by Lulu Lemon, Peloton had a banner couple of years (in spite of numerous setbacks) and the funding flowed for a range of different home fitness suppliers. This was fueled by widespread gym closures, coupled with the general inactivity of those forced to stay at home. There's been some regression for companies as gyms have reopened in different parts of the country and world, but with the arrival of troubling variants like delta and omicron, many have remained committed to their home workout routines. Bonus: Expect more startups trying new wearable form factors, including rings, after Oura proved out success on that side. Mindfulness and sleep will also be focuses, in addition to more traditional health tracking. Robots As someone who writes a lot about robots, it's heartening to see them playing an increasingly important role at CES. That includes moving beyond sheer novelty and tried and true form factors like robot vacuums. My list includes exoskeletons, elder tech, agtech, prosthesis and — at the very top — disinfecting robots. There are going to be a TON of these, driven by an increased focus on surface-based disease transmission during the pandemic and the fact that it's reasonably simple to mount UV-C light panels to an autonomous robot that can take laps around an office. Bonus: With last-mile delivery robots taking off in a big way, expect to see a number of newer companies getting in on the act during the show. Lidar Okay, so Velodyne has opted out of the in-person event, but between robotics, self-driving cars and drones (among others) the demand for lidar is massive. Expect to see a lot of new offers from companies at the show — both new and old. Bonus: It's going to be a big year for e-bikes, too. Mark my words. Remote work This one's a bit nebulous, I confess, but the pandemic had a profound impact on the category. After years of decline, PC and tablet sales shot up, as people scrambled to build home offices. Even after nearly two years in isolation, there's still a lot that needs improving with our home setups. If you started building solutions like webcams, lighting, conferencing devices and microphones at the beginning of the pandemic, CES 2022 would be a great place to debut them — for many reasons. Bonus: For the (large number)th year in a row, smart home stuff will occupy a huge portion of mindshare for the show. CES 2022 kicks off next week. We'll be there (virtually), so stay tuned.

The Equity team’s 2022 predictions Posted: 31 Dec 2021 07:00 AM PST Hello and welcome back to Equity, a podcast about the business of startups where we unpack the numbers and nuance behind the headlines. As is tradition on the show, we used the last episode of the year to make predictions about the next year. To continue an annual tradition, Grace and Chris joined Natasha and Mary Ann and Alex on the mic, a rare treat and one simply for your enjoyment. Expectedly, they had a lot to say. So what did we manifest for 2022? Here’s a sampling: We’re bullish on climate-focused startups: A notable theme from a number of us was the importance of climate startups, and how many types of startups are going to have a climate-flavor. In short, as the planet changes, it’s going to touch just about everything. And if sustainability is not your entire pitch, it’s going to be at least a strategy soon enough. We had a lot to say about crypto: Sure, we’re all a bit tired of talking crypto, but there’s also no chance that we could get away from the topic when considering next year. The classic tension between reinvention and regulation continues to be a dynamic we all care about, and predict will be full force over the next twelve months. We’re not nearly as bullish on media: The Buzzfeed SPAC had some of us bummed out, but when it came to creators and not just writers, we were a bit more positive. Everything is media, even if everything doesn’t make money. Space is controversial: We won’t spoil it, but the space chat got a bit spicy. The argument wound up showing an interesting issue in the tech space, namely is all the money going to where it will have the greatest impact? A big hug from the Equity team for your continued listenership this year. Thanks for sticking with us, and we’re back in a heartbeat with another year’s shows – some of which may even be in person! Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 a.m. PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!

India antitrust watchdog orders investigation into Apple’s business practices Posted: 31 Dec 2021 05:24 AM PST The Indian antitrust watchdog on Friday ordered an investigation into Apple’s business practices — in particular, the company mandating iPhone app developers to use a proprietary payments system — in India, where the American firm commands less than 2% of the smartphone market. The Competition Commission of India, which ordered the Director General to conduct the probe within 60 days, said it is of the prima facie view that the mandatory use of Apple’s in-app payments system for paid apps and in-app purchases “restrict[s] the choice available to the app developers to select a payment processing system of their choice especially considering when it charges a commission of up to 30% for app purchases and in-app purchases.” The watchdog began reviewing the case after a complaint filed by Together We Fight Society, a non-profit based in India’s western state of Rajasthan. The organization said Apple’s move, which prevents app developers from using a third-party or their own payments system, makes a significant dent in the revenues they generate. Apple had urged the CCI to dismiss the case, saying it was too small a player in India. India is the latest nation to express concerns over Apple and Google requiring app developers to use the firm’s payments system for in-app purchases. (The Indian watchdog opened the investigation into Google’s business practices last year.) Earlier this year, South Korea approved a measure that makes it illegal for Apple and Google to make a commission by forcing developers to use their proprietary payments systems. In the U.S., Fortnite-maker gaming firm Epic publicly challenged Google and Apple by introducing its own payments system in the sleeper hit title. Now it’s locked in legal battles with Google and Apple. This year, attorneys general from 36 U.S. states filed an antitrust lawsuit against Google alleging its Google Play app store is an illegal monopoly. A bipartisan bill introduced this year in the U.S. Senate seeks to restrict how the Apple and Google app stores operate and what rules can be imposed on app developers. The European Union last year proposed the Digital Markets Act, which is meant to prevent technology platforms from abusing their gatekeeper position. “At this stage, it appears that the lack of competitive constraint in the distribution of mobile apps is likely to affect the terms on which Apple provide[s] access to its App Store to the app developers, including the commission rates and terms that thwart certain app developers from using other in-app payment systems,” the CCI wrote Friday in a 20-page order. The CCI said it is also worth probing whether Apple uses data it collects from the users of its competitors to “improve its own services.” Despite a considerable uptick in iPhone sales in India in recent years, Apple is still a small player in the market. Google’s Android commands a marketshare that swings between 98 to 99% each year. We have reached out to Apple for comment.

Securing the global digital economy beyond the China challenge Posted: 31 Dec 2021 05:05 AM PST Ainikki Riikonen Contributor Ainikki Riikonen is a research associate with the Technology and National Security Program at the Center for a New American Security (CNAS). She is a co-author of the CNAS report "Edge Networks, Core Policy: Securing America's 6G Future." The TechCrunch Global Affairs Project examines the increasingly intertwined relationship between the tech sector and global politics. The push by countries at all levels of development to modernize their information and communications networks has created unprecedented demand for technological infrastructure. Governments and industry are investing billions of dollars to expand digital connectivity worldwide. New deployments of 4G, 5G, satellites and fiber-optic cables could create huge opportunities for host nations but pose significant risks if networks are built without adequate safeguards. The U.S. has a role to play in securing the future of the internet and the global digital economy but will need to move beyond confrontation with China to succeed. China's network effects Digital access is the foundation for digital services, like fintech and e-commerce, that connect communities to trade and financial resources. As startups in Latin America and Sub-Saharan Africa draw billions in investment, their services require a strong and wide-reaching information communications technology (ICT) backbone to flourish. ​​China, through its Digital Silk Road, Belt and Road Space Information Corridor and other state-led initiatives, has become a leading purveyor of ICT infrastructure virtually everywhere, especially by financing projects in less affluent nations. But these investments come with a price: cybersecurity and manipulation risks due to the influence of China's government on its vendors. Due to legal obligations to the Chinese state — including sharing customer data at its request — China's tech firms cannot guarantee that they will put their clients first. Many firms also host internal Party organizations that influence decision-making. The Communist Party of China (CPC) is not omnipotent — some companies have slow-rolled compliance with information requests — but the CPC's ongoing crackdown on tech companies is diminishing their ability to circumvent directives. But because network modernization is an economic imperative and Chinese firms often offer lower prices than their global competitors, many countries choose to source their technology despite these political and security hazards. While the risks posed by companies such as Huawei are not evidence of collaboration with China's government, these legal and institutional pressures, combined with engineers' track record of spying for other national governments, such as in Uganda and Zambia, suggest that even China's most powerful ICT companies can be susceptible to co-option. As the digital economy grows and diversifies, more kinds of data, from personal communications to financial, business, health and other sensitive information will become vulnerable to a "data trap." While state intervention is not guaranteed, the CPC's approach to foreign affairs heightens that likelihood. Beijing wants international audiences to accommodate its priorities and activities and pursues "information dominance" with that purpose in mind. Data is important for understanding the information environment and shaping perceptions of the CPC, so access to and influence over ICT infrastructure — the vehicle for modern communications — makes the companies that provide it pivotal to Chinese foreign policy. Information dominance also means preference for CPC-friendly content and platforms, which hinders opportunities for local populations. For example, StarTimes, a Beijing-based media company that upgraded and operates television networks in 30 African countries, received hundreds of millions of dollars from China's EXIM Bank to enter African markets. It offers state-run media channels in its cheapest subscriptions or even for free which "tell the China story well" to local audiences, at the cost of excluding bandwidth dedicated to local perspectives or media free from CPC propaganda. America's response: Still loading In response to the spread of China's network projects, U.S. policymakers have begun to tackle vendor security assessments and expand government mechanisms to finance ICT. Buried under the Trump administration's "us or China" rhetoric, the State Department's Clean Network initiative included country-agnostic criteria for assessing vendor-based cyber risks and support for the multilateral Prague Proposals, which underscored non-technical aspects of 5G security. The administration also retooled the U.S. International Development Finance Corporation (DFC) to better support digital modernization and network construction. In an early victory for DFC, Ethiopia selected a Vodafone-led group in lieu of a bid linked to China's Silk Road Fund, despite long-standing relationships with Huawei and ZTE to supply telecommunications. These developments highlight the U.S. commitment to generating alternatives, in collaboration with other countries. But these measures alone may be insufficient to address the scale of China's approach. In addition to vast government investments into overseas projects, China has subsidized its tech giants to such an extent that Huawei once proposed a 5G project at "a price that wouldn't even cover the cost of parts." The United States, while motivated to offset China's influence, should not look to outspend it or mimic its approach. Instead, U.S. leadership should mobilize a variety of sustainable investments, find technology solutions to make tech adoption cheaper and pitch neutral infrastructure that will offer equitable opportunities for local economies. The White House should spearhead creation of a multilateral digital development bank to make more resources available to states looking to modernize their networks. Doing so would also add heft to commitments the Biden administration has made under the G7's Build Back Better World initiative. In coordination with Congress, the Biden administration should also back efforts to lower the cost of equipment itself to sustainably compete with China's low-priced kit. One solution is interoperability in technology standards; Open RAN for 5G networks is one example of how this approach has already proven less expensive than traditional network architecture. Another avenue to lower costs is to invest in research and development for network technologies that can replace the most expensive legacy components. For example, fiber-optic cables are expensive to deploy on land; workarounds may include wireless optic solutions or integration of satellite mesh networks with terrestrial systems. Finally, the White House should explore ways to integrate net neutrality principles into network financing projects run by agencies such as DFC. Net neutrality could offer economic benefits to host nations by keeping the digital playing field open for local media and innovation. Neutral networks would set the foundation for a third way forward from what has been criticized as digital colonization by China's government and similar criticisms of the U.S. private sector. A digital network is ultimately a means to an end: infrastructure for interpersonal communications, content, services, industry and innovation. While few countries, at least for now, supply ICT infrastructure to the majority of the world, that majority should have full access to the opportunities it can offer. A revised route to digital modernization, premised on open participation, can not only offset the local costs of China's cyber and influence power, but pave the way for an equitable internet for all.

Record number of unicorns and IPOs: Indian startups raised $39B in 2021 Posted: 31 Dec 2021 04:26 AM PST In late March last year, as the virus started to spread across India, investors began to worry about the impact a potential pandemic could have on their portfolio firms. They exchanged notes, and on April 1, penned a joint open letter to the local startup ecosystem, advising firms to "prepare for the worst." In the months that followed, the virus engulfed the South Asian market and, among other things, hit the brakes on funding activity. Scrambling to steer through the unprecedented event, startups began to cut expenses. Some didn't survive, and a few got acquired in fire sales. Many entrepreneurs and investors stepped up and volunteered to help the nation fight the pandemic, too. Investors were right about the impact the virus would have on the country, and by extension, on the firms attempting to fuel the economy. But very few were prepared for what was about to happen in just a few quarters. Scores of startups, many operating in edtech and fintech categories, began to report fast growth. "We started to see three years and five years of growth in one year," said Ashish Dave, chief executive of Mirae Asset Venture's India business. While several investors, including many tier 1 funds that are generally very active in India, were still cautious, a group of investors including Tiger Global, Falcon Edge Capital, and SoftBank shifted into a higher gear. Navroz Udwadia of Alpha Wave Global (formerly known as Falcon Edge Capital) said in a conference earlier this year that his firm likes to get aggressive when most other funds are cautious about the market conditions. Tiger Global backed Infra.Market in February this year, propelling the business-to-business e-commerce platform's valuation from $200 million to over $1 billion in a span of two months. In a letter to investors in February, Tiger Global said the opportunity it sees in areas such as consumer, enterprise, and financial technology in the U.S., China, and India is "very large relative to the amount of capital we manage and evolving at a rate that is often hard to comprehend." Several factors worked in India’s favor, many investors said. There's an abundance of dry powder in the market and investors are increasingly looking at growth avenues such as emerging regions as their next big bets. It also helped that Beijing enforced a series of crackdowns on its own startups and made it difficult for foreign money to flow into China. Another thing swinging in favor of India was the record number of IPOs that we saw this year. Food delivery firm Zomato made a stellar debut. Fashion commerce Nykaa, online insurer PolicyBazaar also made strong debuts on the stock exchanges. Paytm filed for the nation’s largest IPO, though the public market is still giving it less valuation than it sought. Dave said Indian startups going public addressed the exit challenge that many investors have faced over the years. The investors' bullishness on India was on full display in April, when the virus was beginning to gain pace again in the country. Eight Indian startups — including social commerce Meesho, fintech CRED, investment platform Groww, business-to-business messaging platform Gupshup, payments firm Chargebee — joined the unicorn club in April. Tiger minted five of these unicorns. The sudden flow of cash also created a crunch for talent in the market. Startups began to offer lucrative stock options and salary hikes to employees to win and retain them. In total, capital flowing to private Indian startups surged over four times to about $39 billion this year and nearly three times from the previous best of $14.6 billion in 2019, according to data from insight platform Tracxn, which has also filed for an IPO. India now has 81 unicorns, 44 of which joined the club this year. Several of the unicorns and many other fast growing startups have raised multiple rounds this year and increased their valuations multiple times over. Fintech Slice, which is giving millions of Indians access to credit card features and helping them build credit scores, increased its valuation multiple-fold in a recent round it raised from Insight Partners and Tiger Global. CRED, for instance, has raised three funding rounds and has held talks for a fourth one, TechCrunch reported earlier. Indian edtech giant Byju’s has raised over $1.5 billion since last year. Instant grocery delivery startup Zepto, co-founded by two 19-year-old Stanford dropouts, doubled its valuation to $570 million in a span of two months. Fintech startup Jar, which is helping hundreds of thousands of Indians start their investment journey, is about to close a round from a high-profile investor, said two people familiar with the matter. The startup, founded this year, is likely to increase its valuation by about 15 times in the new round. Bangalore-based QuestBook, which is helping developers transition to web3, is about to close a round from a number of investors including entrepreneur Balaji Srinivasan, according to a person familiar with the matter. Polygon is in talks to raise from Sequoia Capital India and Steadview Capital, TechCrunch reported this month. (Also Amazon is in talks to back an agritech startup, per two people familiar with the matter.) Ramakant Sharma, founder of Livspace, is working on a crypto startup called “TheSpiderMan,” according to three people familiar with the matter and investor deck reviewed by TechCrunch. "Startups have become mainstream in India," said Dave, pointing to a number of recent developments including the arrival of Shark Tank in the country. "Indian parents are no longer hesitant to tell their friends that their kid works at a startup or has founded one. Everyone now knows what a startup is. For years, I had to explain to my dad what I do for a living!" Tiger Global, which has made over 50 investments in India this year, is currently conducting due diligence to back an additional nine startups in the country, according to a person familiar with the matter. Other than Tiger Global, SoftBank, and Alpha Wave Global have also deployed serious capital in the country this year. SoftBank has invested over $3 billion in India this year. Alpha Wave Global has poured over $2 billion. The frenetic pace at which some of these firms have written checks to Indian startups this year has also forced many of their global peers to take India more seriously. Temasek, which typically backs late stage startups, has made a record 20 investments in India this year. Insight Partners, which became more prolific in India this year, made some changes to its investment process in the country to speed up the time it takes to back a startup, two people familiar with the matter said. It's currently engaging to back Indian NFT platform Faze, according to two people with knowledge of those proceedings. General Catalyst is building a team in India, too. The firm is also in talks to back a number of startups including OneCode, a person familiar with the matter said. Andreessen Horowitz made its first investment in India this year. B Capital Group has also appointed a new India head. "Tiger has changed the game," said Dave. "Every fund on the planet has at some point relooked and reassessed their strategy and tried to figure out what is the best they can do. Not everyone can play Tiger's game. But what is the next best you can do? Because you can't play the same game that you used to." Sequoia Capital India, which has been investing in India for over a decade, remains the most prolific investor in India and Southeast Asia. It has made over 60 investments this year. Dave said he expects the pace of investments to continue in the new year. "The market will continue to become more competitive. Just look at the number of people who are beginning to do angel investing." "Overseas, the market is huge. The number of investors and firms are also very large. That's still not the case in India. So the competition for good deals is very high."

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