Thursday, February 24, 2022

TechCrunch

TechCrunch

Singapore-based micromobility startup Beam secures $93M Series B, enters new markets

Posted: 24 Feb 2022 07:00 PM PST

Beam, a Singaporean shared micromobility operator, announced today that it has raised $93 million in a Series B round to accelerate growth into new countries in Asia.

The fresh capital, which brings its total funding raised to $135 million, was led by Affirma Capital, with participation from Sequoia Capital India, Hana Ventures, ICT Capital, EDB Investment (EDBI), AC Ventures, RTP Global and Momentum Venture Capital. The Series B brings Beam’s valuation up into the triple digits, says CEO and co-founder of Beam Alan Jiang who declined to provide exact numbers. 

Beam, which currently operates e-scooters and e-bikes in 35 cities across Malaysia, Thailand, South Korea, Australia and New Zealand, aims to spread into markets like Japan, Indonesia, the Philippines, Vietnam and Turkey. 

In addition, the new capital will enable Beam to spur its deployment of a new 5th generation Beam Saturn e-scooter, which the company intends to start rolling out in the second half of this year. The next-gen scooter will come with an updated version of Beam’s safety platform, dubbed Micromobility Augmented Riding Safety (MARS), that helps protect pedestrians and enhance local governments’ control over where e-vehicles can park or ride, says Jiang. 

Existing technologies within the platform include dead reckoning and on-edge geofencing, but the 5th gen Saturns will have a feature called Beam Pedestrian Shield, ” an onboard AI camera that can instantly and accurately detect pedestrians to prevent collisions and detect footpaths to automatically reduce vehicle speed or even prevent riding completely,” according to Deb Gangopadhyay, chief technology officer of Beam.

Beam says its on-board camera with computer vision will be rolling out at scale by Q3 this year. The company initially will be piloting the onboard camera technology, which is developed in collaboration with its undisclosed R&D partner, a spokesperson at Beam told TechCrunch.

For example, American micromobility company Spin is working with Drover AI, a computer vision startup, to pilot camera-based safety systems in a few markets, and European operator Voi is doing the same with Luna in the U.K.

Advanced rider assistance systems: Tech spawned by the politics of micromobility

New tech aside, the Saturn will also feature 12-inch wheels that are 20% larger than the average e-scooter wheels combined with hydraulic suspension. The Saturn has fully swappable batteries with sufficient capacity for 110km of riding range, double the average e-scooter battery capacity, to further improve sustainability, according to the company.

Beam also plans to add a new e-moped to its vehicle portfolio, the Beam Pluto, in the second half of this year, and expects e-mopeds to comprise up to one-third of its fleet over the next two years, Jiang said in an email interview. 

Beam

Beam’s MARS technology

Beam’s revenue has seen 15 times growth since 2020, says Jiang, despite experiencing mobility restrictions caused by the Covid-19 pandemic, but the CEO didn’t provide a baseline for that growth. When asked about tightening regulations on micromobility in some Asian countries, Jiang told TechCrunch that Beam works very closely with regulators in all geographies the company operates in to provide safe and sustainable shared micromobility and Beam rebalances vehicle assets between geographies depending on deployment opportunities. Micromobility is broadly being recognized as an indispensable mode of transport almost all over Asia, with the corresponding regulatory frameworks getting more mature, he noted.

“Our goal is to shift ‘single person journeys’ onto shared small electric vehicles, which are step function more environmentally friendly for cities and cost-efficient for consumers,”Jiang told TechCrunch. 

This article has been updated to reflect new information from Beam.

Singapore’s micromobility startup Beam raises $26 million

Carvana acquires Adesa US auction business for $2.2B to jump-start used car sales

Posted: 24 Feb 2022 05:44 PM PST

Carvana, the online used car marketplace, has agreed to buy Kar Global’s Adesa U.S. auction subsidiary for $2.2 billion in cash, an acquisition aimed at adding another revenue stream as well as a network of physical sites that could help bolster operations.

The acquisition announcement, which was made alongside a fourth-quarter earnings report, marks a transition for the pure online business into a more traditional physical car dealer. 

Today, Carvana customers can use the company’s mobile or web app to shop, buy and finance their vehicle purchase. Those vehicles can either be picked up at one of its 30 multi-story car vending machines or delivered directly to a customer’s home. Carvana also operates 15 inspection and reconditioning centers where vehicles are evaluated and spruced up before sale. Customers can also sell their vehicles to Carvana.

The additional revenue and physical footprint that Adesa U.S. offers appear to be far too appetizing and too big of an opportunity for Carvana to ignore. And it comes at an opportune time.

Carvana sold 113,016 vehicles and generated $3.75 billion in revenue in the fourth quarter, a 57% year-over-year sales growth. But that YoY figure masks a tapering of growth towards the end of 2021. In the third quarter, Carvana sold 111,949 retail units on $3.5 billion of revenue.

Carvana has yet to reach GAAP profitability. Its losses actually widened year-over-year  $182 million in the fourth quarter from from $154 million in the same period last year. However, its total losses for the year narrowed considerably. The company reported net losses of $287 million in 2021, an improvement from $462 million the previous year.

Adesa has 56 physical sites, which Carvana will also be able to use to inspect and recondition the vehicles its sells online. Carvana will continue to operate Adesa U.S.’s physical auctions while simultaneously developing the sites to include Carvana’s standard retail inspection, reconditioning and logistics capabilities, the company said in its letter to shareholders.

Carvana said Adesa U.S. reconditioning operations could help expand its production capacity from 2 million units to over 3 million units annually.

The network of 56 sites coupled with Carvana’s existing infrastructure will put 78% of the U.S. population within 100 miles of inspection and reconditioning centers.

Carvana also sees an opportunity to increase its auction capabilities and kickstart or deepen its “relationships with many large and important players in the automotive industry,” the company said in its shareholder letter.

Then there’s the revenue possibilities, an important factor for a company that saw sky-high used car sales spurred by the pandemic come back down to earth. Adesa U.S.’s business facilitated more than one million transactions through those sites, bringing in more than $800 million in revenue in 2021.

Of course, this potential reward comes with the risk that Carvana will see its operational expenses grow past its profit potential.

Carvana is using a portion of the $3.275 billion in financing it received from JPMorgan Chase Bank N.A. and Citi to fund the purchase. It will use the remaining $1 billion for improvements across Adesa U.S.’s 56 sites through a committed debt financing.

Adesa U.S.’s wholesale auction business will continue to operate under its existing brand name. John Hammer, president of Adesa U.S., along with other senior-level executives, will move over to Carvana once the deal closes.

 

UK wants to squeeze freedom of reach to take on internet trolls

Posted: 24 Feb 2022 04:53 PM PST

The UK government has announced (yet) more additions to its expansive and controversial plan to regulate online content — aka the Online Safety Bill.

It says the latest package of measures to be added to the draft are intended to protect web users from anonymous trolling.

The Bill has far broader aims as a whole, comprising a sweeping content moderation regime targeted at explicitly illegal content but also ‘legal but harmful’ stuff — with a claimed focused of protecting children from a range of online harms, from cyberbullying and pro-suicide content to exposure to pornography.

Critics, meanwhile, say the legislation will kill free speech and isolate the UK, creating splinternet Britain, while also piling major legal risk and cost on doing digital business in the UK. (Unless you happen to be part of the club of ‘safety tech’ firms offering to sell services to help platforms with their compliance of course.)

In recent months, two parliamentary committees have scrutinized the draft legislation. One called for a sharper focus on illegal content, while another warned the government’s approach is both a risk to online expression and unlikely to be robust enough to address safety concerns — so it’s fair to say that ministers are under pressure to make revisions.

Hence the bill continues to the shape-shift or, well, grow in scope.

Other recent (substantial) additions to the draft include a requirement for adult content websites to use age verification technologies; and a massive expansion of the liability regime, with a wider list of criminal content being added to the face of the bill.

The latest changes, which the Department of Digital, Culture, Media and Sport (DCMS) says will only apply to the biggest tech companies, mean platforms will be required to provide users with tools to limit how much (potentially) harmful but technically legal content they could be exposed to.

Campaigners on online safety frequently link the spread of targeted abuse like racist hate speech or cyberbullying to account anonymity, although it’s less clear what evidence they’re drawing on — beyond anecdotal reports of individual anonymous accounts being abusive.

Yet it’s similarly easy to find examples of abusive content being dished out by named and verified accounts. Not least the sharp-tongued secretary of state for digital herself, Nadine Dorries, whose tweets lashing an LBC journalist recently led to this awkward gotcha moment at a parliamentary committee hearing.

Point is: Single examples — however high profile — don’t really tell you very much about systemic problems.

Meanwhile, a recent ruling by the European Court of Human Rights — which the UK remains bound by — reaffirmed the importance of anonymity online as a vehicle for “the free flow of opinions, ideas and information”, with the court clearly demonstrating a view that anonymity is a key component of freedom of expression.

Very clearly, then, UK legislators need to tread carefully if government claims for the legislation transforming the UK into ‘the safest place to go online’ — while simultaneously protecting free speech — are not to end up shredded.

UK publishes draft Online Safety Bill

Given internet trolling is a systemic problem which is especially problematic on certain high-reach, mainstream, ad-funded platforms, where really vile stuff can be massively amplified, it might be more instructive for lawmakers to consider the financial incentives linked to which content spreads — expressed through ‘data-driven’ content-ranking/surfacing algorithms (such as Facebook’s use of polarizing “engagement-based ranking”, as called out by whistleblower Frances Haugen).

However the UK’s approach to tackling online trolling takes a different tack.

The government is focusing on forcing platforms to provide users with options to limit their own exposure — despite DCMS also recognizing the abusive role of algorithms in amplifying harmful content (its press release points out that “much” content that’s expressly forbidden in social networks' T&Cs is “too often” allowed to stay up and “actively promoted to people via algorithms”; and Dorries herself slams “rogue algorithms”).

Ministers’ chosen fix for problematic algorithmic amplification is not to press for enforcement of the UK’s existing data protection regime against people-profiling adtech — something privacy and digital rights campaigners have been calling for for literally years — which could certainly limit how intrusively (and potentially abusively) individual users could be targeted by data-driven platforms.

Rather the government wants people to hand over more of their personal data to these (typically) adtech platform giants in order that they can create new tools to help users protect themselves! (Also relevant: The government is simultaneously eyeing reducing the level of domestic privacy protections for Brits as one its ‘Brexit opportunities’… so, er… 😬)

DCMS says the latest additions to the Bill will make it a requirement for the largest platforms (so called “category one” companies) to offer ways for users to verify their identities and control who can interact with them — such as by selecting an option to only receive DMs and replies from verified accounts.

“The onus will be on the platforms to decide which methods to use to fulfil this identity verification duty but they must give users the option to opt in or out,” it writes in a press release announcing the extra measures.

Commenting in a statement, Dorries added: "Tech firms have a responsibility to stop anonymous trolls polluting their platforms.

"We have listened to calls for us to strengthen our new online safety laws and are announcing new measures to put greater power in the hands of social media users themselves.

"People will now have more control over who can contact them and be able to stop the tidal wave of hate served up to them by rogue algorithms."

Twitter does already offer verified users the ability to see a feed of replies only from other verified users. But the UK’s proposal looks set to go further — requiring all major platforms to add or expand such features, making them available to all users and offering a verification process for those who are willing to prove an ID in exchange for being able to maximize their reach.

DCMS said the law itself won’t stipulate specific verification methods — rather the regulator (Ofcom) will offer “guidance”.

“When it comes to verifying identities, some platforms may choose to provide users with an option to verify their profile picture to ensure it is a true likeness. Or they could use two-factor authentication where a platform sends a prompt to a user's mobile number for them to verify. Alternatively, verification could include people using a government-issued ID such as a passport to create or update an account,” the government suggests.

Ofcom, the oversight body which will be in charge of enforcing the Online Safety Bill, will set out guidance on how companies can fulfil the new “user verification duty” and the “verification options companies could use”, it adds.

“In developing this guidance, Ofcom must ensure that the possible verification measures are accessible to vulnerable users and consult with the Information Commissioner, as well as vulnerable adult users and technical experts,” DCMS also notes, with a tiny nod to the massive topic of privacy.

Digital rights groups will at least breathe a sign of relief that the UK isn’t pushing for a complete ban on anonymity, as some online safety campaigners have been urging.

When it comes to the tricky topic of online trolling, rather than going after abusive speech itself, the UK’s strategy hinges on putting potential limits on freedom of reach on mainstream platforms.

“Banning anonymity online entirely would negatively affect those who have positive online experiences or use it for their personal safety such as domestic abuse victims, activists living in authoritarian countries or young people exploring their sexuality,” DCMS writes, before going on to argue the new duty “will provide a better balance between empowering and protecting adults — particularly the vulnerable — while safeguarding freedom of expression online because it will not require any legal free speech to be removed”.

“While this will not prevent anonymous trolls posting abusive content in the first place — providing it is legal and does not contravene the platform's terms and conditions — it will stop victims being exposed to it and give them more control over their online experience,” it also suggests.

Asked for thoughts on the government’s balancing act here, Neil Brown, an internet, telecoms and tech lawyer at Decoded Legal, wasn’t convinced on its approach’s consistency with human rights.

“I am sceptical that this proposal is consistent with the fundamental right ‘to receive and impart information and ideas without interference by public authority’, as enshrined in Article 10 Human Rights Act 1998,” he told TechCrunch. “Nowhere does it say that one’s right to impart information applies only if one has verified one’s identity to a government-mandated standard.

“While it would be lawful for a platform to choose to implement such an approach, compelling platforms to implement these measures seems to me to be of questionable legality.”

Under the government’s proposal, those who want to maximize their online visibility/reach would have to hand over an ID, or otherwise prove their identity to major platforms — and Brown also made the point that that could create a ‘two-tier system’ of online expression which might (say) serve the extrovert and/or obnoxious individual, while downgrading the visibility of those more cautious/risk-averse or otherwise vulnerable users who are justifiably wary of self-ID (and, probably, a lot less likely to be trolls anyway).

“Although the proposals stop short of requiring all users to hand over more personal details to social media sites, the outcome is that anyone who is unwilling, or unable, to verify themselves will become a second class user,” he suggested. “It appears that sites will be encouraged, or required, to let users block unverified people en masse.

“Those who are willing to spread bile or misinformation, or to harass, under their own names are unlikely to be affected, as the additional step of showing ID is unlikely to be a barrier to them.”

TechCrunch understands that the government’s proposal would mean that users of in-scope user-generated platforms who do not use their real name as their public-facing account identity (i.e. because they prefer to use a nickname or other moniker) would still be able to share (legal) views without limits on who would see their stuff — provided they had (privately) verified their identity with the platform in question.

Brown was a little more positive about this element of continuing to allow for pseudonymized public sharing.

But he also warned that plenty of people may still be too wary to trust their actual ID to platforms’ catch-all databases. (The outing of all sorts of viral anonymous bloggers over the years highlights motivations for shielded identities to leak.)

“This is marginally better than a ‘real names’ policy — where your verified name is made public — but only marginally so, because you still need to hand over ‘real’ identity documents to a website,” said Brown, adding: “I suspect that people who remain pseudonymous for their own protection will be rightly wary of the creation of these new, massive, datasets, which are likely to be attractive to hackers and rogue employees alike.”

User controls for content filtering

In a second new duty being added to the Bill, DCMS said it will also require category one platforms to provide users with tools that give them greater control over what they’re exposed to on the service.

“The bill will already force in-scope companies to remove illegal content such as child sexual abuse imagery, the promotion of suicide, hate crimes and incitement to terrorism. But there is a growing list of toxic content and behaviour on social media which falls below the threshold of a criminal offence but which still causes significant harm,” the government writes.

“This includes racist abuse, the promotion of self-harm and eating disorders, and dangerous anti-vaccine disinformation. Much of this is already expressly forbidden in social networks' terms and conditions but too often it is allowed to stay up and is actively promoted to people via algorithms.”

“Under a second new duty, 'category one' companies will have to make tools available for their adult users to choose whether they want to be exposed to any legal but harmful content where it is tolerated on a platform,” DCMS adds.

“These tools could include new settings and functions which prevent users receiving recommendations about certain topics or place sensitivity screens over that content.”

Its press release gives the example of “content on the discussion of self-harm recovery” as something which may be “tolerated on a category one service but which a particular user may not want to see”.

Brown was more positive about this plan to require major platforms to offer a user-controlled content filter system — with the caveat that it would need to genuinely be user-controlled.

He also raised concerns about workability.

“I welcome the idea of the content filer system, so that people can have a degree of control over what they see when they access a social media site. However, this only works if users can choose what goes on their own personal blocking lists. And I am unsure how that would work in practice, as I doubt that automated content classification is sufficiently sophisticated,” he told us.

“When the government refers to ‘any legal but harmful content’, could I choose to block content with a particular political leaning, for example, that expounds an ideology which I consider harmful? Or is that anti-democratic (even though it is my choice to do so)?

“Could I demand to block all content which was in favour of COVID-19 vaccinations, if I consider that to be harmful? (I do not.)

“What about abusive or offensive comments from a politician? Or is it going to be a far more basic system, essentially letting users choose to block nudity, profanity, and whatever a platform determines to depict self-harm, or racism.”

“If it is to be left to platforms to define what the ‘certain topics’ are — or, worse, the government — it might be easier to achieve, technically. However, I wonder if providers will resort to overblocking, in an attempt to ensure that people do not see things which they have asked to be suppressed.”

An ongoing issue with assessing the Online Safety Bill is that huge swathes of specific details are simply not yet clear, given the government intends to push so much detail through via secondary legislation. And, again today, it noted that further details of the new duties will be set out in forthcoming Codes of Practice set out by Ofcom.

So, without far more practice specifics, it’s not really possible to properly understand practical impacts, such as how — literally — platforms may be able to or try to implement these mandates. What we’re left with is, mostly, government spin.

But spitballing off-of that spin, how might platforms generally approach a mandate to filter “legal but harmful content” topics?

One scenario — assuming the platforms themselves get to decide where to draw the ‘harm’ line — is, as Brown predicts, that they seize the opportunity to offer a massively vanilla ‘overblocked’ feed for those who opt in to exclude ‘harmful but legal’ content; in large part to shrink their legal risk and operational cost (NB: automation is super cheap and easy if you don’t have to worry about nuance or quality; just block anything you’re not 100% sure is 100% non-controversial!).

But they could also use overblocking as a manipulative tactic — with the ultimately goal of discouraging people from switching on such a massive level of censorship, and/or nudging them to return, voluntarily, to the non-filtered feed where the platform’s polarizing content algorithms have a fuller content spectrum to grab eyeballs and drive ad revenue… Step 3: Profit.

The kicker is platforms would have plausible deniability in this scenario — since they could simply argue the user themselves opted in to seeing harmful stuff! (Or at least didn’t opt out since they turned the filter off or else never used it.) Aka: ‘Can’t blame the AIs gov!’

Any data-driven algorithmically amplified harms would suddenly be off the hook. And online harm would become the user’s fault for not turning on the available high-tech sensitivity screen to shield themselves. Responsibility diverted.

Which, frankly, sounds like the sort of regulatory overside an adtech giant like Facebook could cheerfully get behind.

Still, platform giants face plenty of risk and burden from the full package of proposal coming at them from Dorries & co.

The secretary of state has also made no secret of how cheerful she’d be to lock up the likes of Mark Zuckerberg and Nick Clegg.

In addition to being required to proactively remove explicitly illegal content like terrorism and CSAM — under threat of massive fines and/or criminal liability for named execs — the Bill was recently expanded to mandate proactive takedowns of a much wider range of content, related to online drug and weapons dealing; people smuggling; revenge porn; fraud; promoting suicide; and inciting or controlling prostitution for gain.

So platforms will need to scan for and remove all that stuff, actively and up front, rather than acting after the fact on user reports as they’ve been used to (or not acting very much, as the case may be). Which really does upend their content business as usual.

DCMS also recently announced it would add new criminal communications offences to the bill too — saying it wanted to strengthen protections from “harmful online behaviours” such as coercive and controlling behaviour by domestic abusers; threats to rape, kill and inflict physical violence; and deliberately sharing dangerous disinformation about hoax COVID-19 treatments — further expanding the scope of content that platforms must be primed and on the lookout for.

So given the ever-expanding scope of the content scanning regime coming down the pipe for platforms — combined with tech giants’ unwillingness to properly resource human content moderation (since that would torch their profits) — it might actually be a whole lot easier for Zuck & co to switch to a single, super vanilla feed.

Make it cat pics and baby photos all the way down — and hope the eyeballs don’t roll away and the profits don’t drain away but Ofcom stays away… or something.

UK warns Facebook to focus on safety as minister eyes faster criminal sanctions for tech CEOs

UK revives age checks for porn sites

Daily Crunch: Overnight, Russia’s invasion puts Ukrainian tech industry on a war footing

Posted: 24 Feb 2022 04:05 PM PST

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

Hello and welcome to Daily Crunch for Thursday, February 24, 2022. No peppy intro from me today; I am a little consumed with news outside our orbit. Now, to work. – Alex

The TechCrunch Top 3

  • How tech is responding to Russia's invasion of Ukraine: The technology world is a global industry, which means that when geopolitical conflicts arise, it impacts the world that TechCrunch covers directly. We have notes up on cyberattacks and companies in Ukraine. Obviously war is not our editorial remit, but we'd be remiss to not note how it impacts the world we cover.
  • VCs are bullish on European innovation: Continuing our look into the deep tech in Europe, venture investors remain optimistic about where the continent is heading. As we noted previously, deep tech investment in Europe had a very strong 2021.
  • A headless, cloth unicorn: Fabric, which builds APIs for e-commerce, is now a unicorn. The company's "'modular and headless commerce" products include some 300 APIs, it turns out. It just raised $140 million at a $1.5 billion valuation. The round goes to show that the nine-figure venture market is still getting deals done, despite some public comment from investors that things are slowing down in 2022.

Startups/VC

  • Tumblr will let you pay it to eliminate ads: Yahoo once bought Tumblr, before it was itself sold to Verizon. Yahoo was merged into AOL – which Verizon had also purchased – to form Oath. TechCrunch had been owned by AOL, so we wound up at Oath. Oath was then rebranded to Verizon Media Group. Verizon Media Group sold Tumblr to Automattic, the company behind WordPress, back in 2019. Now you can pay Tumblr, by which we mean Automattic, a monthly fee to not view ads on the microblogging service. TechCrunch, in contrast, was later sold to private equity along with the rest of Verizon Media Group, where we now reside. You cannot pay TechCrunch to remove ads. Now you are caught up!
  • Okteto raises $15M Series A: Much like yourself, I often find myself unable to whip up new Kubernetes-based development environments while writing code. Happily for both of us, Okteto is building tools to help us do just that. And it now has Series A money via Two Sigma Ventures, Haystack and others.
  • Siteline is building fintech infra for the construction market: While the consumer fintech space is chock-full of tools for what feels like any and every use case, the business world is a little bit different. Siteline, which has raised more than $18 million to date, wants to speed up the pace at which money moves in the construction industry, where today it moves with what we might call glacial patience.
  • Promise wants to help you pay your government bills: If you don't track your checking account balance, this isn't for you. But if you do live more paycheck to paycheck, and have ever been a little bit short in any particular month, you know the worries that your power will get turned off. Promise, a startup, aims to sit between you and the government, offering more flexible payment plans for bills. I kinda dig it.
  • Pay your rent, build credit: That's the pitch behind Piñata, a startup that offers a service to landlords and tenants to help make the process of paying for housing while not building equity at least somewhat useful. Of course, that paying rent usually doesn't help build one's credit feels like an error in the market.
  • Reddit makes discovery easier: Reddit is a fun place to be if you know where to go. It has communities of all types and sorts and sizes. Finding them, however, can be tough. The social service is updating its app to make that process a bit easier.

And there was even more that went on today: Depict.ai raised $17 million for its work to provide e-commerce sites with better recommendation capabilities; a neobank in India called Niyo raised $100 million, or $4 for each of its customers; and Insight Partners raised $20 billion for its new flagship fund. Which is a sum of money I cannot really fathom.

How to strategically manage your startup advisor's compensation

US 100 dollar bill on a fishing hook

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

Beware of advisors who demand a share of your equity (and precious cash) in exchange for help with tactical operations like startup recruiting and marketing.

"No founder is an expert in every domain, and as they undertake the journey of getting their companies off the ground, they need to have outside support," says Matt Cohen, founder and managing partner at Ripple Ventures.

Even so, entrepreneurs still need accountability measures that protect their companies from "advisor sharks" and "grifters," he writes.

In a guest post for TC+, Cohen shares advice for setting goals and creating equity packages that will create "a more accurate alignment of incentives."

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

How to strategically manage your startup advisor’s compensation

Big Tech Inc.

  • Nikola earnings aren't awful: Troubled EV truck maker Nikola doesn't have revenues yet, but it appears to be making real progress toward them. That and slimmer-than-expected per-share losses were the good news of the day from the company.
  • App subscription revenue grows 41% in 2021: Want to know why Apple and Google are really not in favor of not getting a fat cut of app store incomes? Because they are large and growing. "The top 100 non-game, subscription-based apps saw their consumer spend increase 41% in 2021 to $18.3 billion, up from $13 billion in 2020," we report.
  • Self-driving Vegas ride-hailing? I am intent on putting self-driving news in this newsletter until I no longer have to drive. Today's item is a consortium offering self-driving rides in Las Vegas (with human backup drivers). This is cool. But what would be cooler, in fact, would be ​​Motional and Via bringing the same service to Providence, Rhode Island. For no particular reason, I assure you.

TechCrunch Experts

dc experts

Image Credits: SEAN GLADWELL / Getty Images

TechCrunch is recruiting recruiters for TechCrunch Experts, an ongoing project where we ask top professionals about problems and challenges that are common in early-stage startups. If that's you or someone you know, you can let us know here.

OMG, my Facebook was hacked! Here’s what to do

Posted: 24 Feb 2022 03:45 PM PST

Even technically sophisticated friends are currently getting “hacked” on Facebook — here’s how to avoid it, and how to make sure your hacked account is fully recovered.

Usually, accounts are “hacked” because someone somehow gets a hold of your password. That’s bad for Facebook in particular, because people often use Facebook to log into other things — so if someone gets into your Facebook account, they have access to a bunch of other things too.

If your account has been hacked

Your account being “hacked” can take many shapes. Perhaps someone is sending messages on your behalf, posting as you or doing something else weird.

If you can still log in, you’re in luck; here’s what to do:

Change your password right away — that’s your first step, if you still have the power to do so. If you can’t log in, request a password reset. If that doesn’t work, it’s possible that someone has changed the email address on the account. There’s a way of dealing with that, too.

Report the weird behavior to Facebook, so they can help stop it happening to others.

Go to your security settings, and see if you recognize everywhere you are logged in. If you don’t recognize a location or a device, press the three-dot menu, and select “not you?”. This will log you out and will help you further secure your account.

Check that you recognize all apps and websites that have access to your Facebook account. Same as above; if there’s something you don’t recognize, hit “remove”.

In your general settings, check the e-mail addresses Facebook has listed for you. If there’s anything there that isn’t yours, remove it.

Change your password one more time, now that you know hackers (in theory) don’t have access to your account anymore. It should be a secure password (with letters, numbers and special characters). Don’t re-use your password from somewhere else. Ideally, use a password manager to ensure that you can keep track of all your different passwords, and use higher-quality passwords in general.

Turn on two-factor authentication. That means that even if your password was somehow stolen, they can’t log in without also having access to your phone or your authenticator app.

And finally, whenever something weird happens to your security and/or social media, change your email password. It’s bad enough to lose access to your social accounts, but your email is the holy grail for hackers, so rotating that password regularly (every 1-3 months) and changing it whenever something strange happens is a very good idea.

How to prevent getting hacked

The most common way that a Facebook account is compromised is by tricking you into giving the hackers your password. You may get a Messenger message from a friend on Facebook, saying something like “OMG did you see who died?” with a link. You click on the link, it looks like Facebook, but suddenly you’re being asked to log in again. You think nothing of it, and you type in your email and password… Uh-oh. Problem: The site that you just gave your password to isn’t actually Facebook, and now they have your password.

The best way to avoid this is to follow the steps above and turn on two-factor authentication. Then be vigilant: Whenever you log in, are you logging into a site that starts with https://www.facebook.com? If not — if it looks like something like ffacebook.com or facebook.this-is-a-security-notification.com — don’t type in your password. The safest thing, typically, is to manually type in Facebook.com into your URL bar if you’re using a web browser.

Remember that the Facebook app has a browser built in. So it’s possible that you are ‘in’ the Facebook app, but it could ask you for a password. It looks legitimate — how could it not be, this is the Facebook app — but use your head; if you’re already in the app, why would it ask you to log in? In short: If it seems weird, it is weird — don’t type in your password!

Check the apps that have access to your Facebook account (see above) semi-regularly. If you recognize an app but you haven’t used it in a while and you don’t think you’ll need it — delete it. You can always add it again later.

SEC opens investigation into Elon Musk over possible insider trading

Posted: 24 Feb 2022 03:01 PM PST

Jon Fingas Contributor
Jon Fingas is a contributing writer at Engadget.
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Elon Musk isn’t about to catch a hoped-for break from the SEC any time soon. Sources for The Wall Street Journal claim the SEC is investigating whether Musk and his brother Kimbal violated insider trading regulations with recent share sales. Officials are concerned Elon might have told Kimbal he planned to ask Twitter followers about selling Tesla stock, leading the brother to sell 88,500 shares just a day before the November 6th tweet. If so, the company chief might have broken rules barring employees from trading on undisclosed information.

Kimbal Musk has frequently traded Tesla stock at regular intervals under a plan. He didn’t on November 5th, according to an SEC filing.

We’ve asked the SEC for comment. Tesla isn’t available for comment as it disbanded its communications team sometime in 2020. Musk clearly isn’t on friendly terms with the Commission, however, as he said a day earlier that he “will finish” a fight he believed the SEC started.

If the report is accurate, the investigation will add more tension to a years-long feud. It began in 2018, when the SEC took action against Musk over tweets about taking the company private. While Musk agreed to a settlement that included approval requirements for any financially relevant social media posts, that wasn’t the end of the fight between the two. The SEC has been looking into Musk’s tweets over the past few years over concerns production-related tweets weren’t approved, and just days ago subpoenaed Tesla for information on the EV maker’s processes for honoring the 2018 settlement.

Musk has publicly sparred with the SEC at the same time. This year, he accused the regulator of conducting a “harassment campaign” that unfairly singled him out and excluded the court from monitoring. The SEC denied the accusations. Whatever the truth behind those claims, it’s safe to presume Musk won’t welcome any new investigation with open arms.

Editor’s note: This article originally appeared on Engadget.

Implement differential privacy to power up data sharing and cooperation

Posted: 24 Feb 2022 02:51 PM PST

Maxime Agostini Contributor
Maxime Agostini is the co-founder and CEO of Sarus, a privacy company supported by Y Combinator that lets organizations leverage confidential data for analytics and machine learning.
Michael Li Contributor
Tianhui Michael Li is the founder of The Data Incubator, an eight-week fellowship to help Ph.D.s and postdocs transition from academia into industry. It was acquired by Pragmatic Institute. Previously, he headed monetization data science at Foursquare and has worked at Google, Andreessen Horowitz, J.P. Morgan, and D.E. Shaw.
More posts by this contributor

Traditionally, companies have relied upon data masking, sometimes called de-identification, to protect data privacy. The basic idea is to remove all personally identifiable information (PII) from each record. However, a number of high-profile incidents have shown that even supposedly de-identified data can leak consumer privacy.

In 1996, an MIT researcher identified the then-governor of Massachusetts' health records in a supposedly masked dataset by matching health records with public voter registration data. In 2006, UT Austin researchers re-identifed movies watched by thousands of individuals in a supposedly anonymous dataset that Netflix had made public by combining it with data from IMDB.

In a 2022 Nature article, researchers used AI to fingerprint and re-identify more than half of the mobile phone records in a supposedly anonymous dataset. These examples all highlight how "side" information can be leveraged by attackers to re-identify supposedly masked data.

These failures led to differential privacy. Instead of sharing data, companies would share data processing results combined with random noise. The noise level is set so that the output does not tell a would-be attacker anything statistically significant about a target: The same output could have come from a database with the target or from the exact same database but without the target. The shared data processing results do not disclose information about anybody, hence preserving privacy for everybody.

To implement differential privacy, one should not start from scratch, as any implementation mistake could be catastrophic for the privacy guarantees.

Operationalizing differential privacy was a significant challenge in the early days. The first applications were primarily the provenance of organizations with large data science and engineering teams like Apple, Google or Microsoft. As the technology becomes more mature and its cost decreases, how can all organizations with modern data infrastructures leverage differential privacy in real-life applications?

Differential privacy applies to both aggregates and row-level data

When the analyst cannot access the data, it is common to use differential privacy to produce differentially private aggregates. The sensitive data is accessible through an API that only outputs privacy-preserving noisy results. This API may perform aggregations on the whole dataset, from simple SQL queries to complex machine learning training tasks.

A typical set-up for leveraging personal data with differential privacy guarantees

A typical setup for leveraging personal data with differential privacy guarantees. Image Credits: Sarus

One of the disadvantages of this setup is that, unlike data masking techniques, analysts no longer see individual records to "get a feel for the data." One way to mitigate this limitation is to provide differentially private synthetic data where the data owner produces fake data that mimics the statistical properties of the original dataset.

‘I need evidence yesterday’: Gesund raises $2 million to provide algorithm-validating data

Posted: 24 Feb 2022 02:34 PM PST

It's one thing to develop a medical algorithm, quite another to prove that it actually works. To do that, you need one crucial thing that’s hard to come by: medical data. And one startup is ready to provide that in spades, along with the tools to make validation studies easier.

Gesund, founded in 2021, emerged from stealth this week with a $2 million seed round led by 500 Global. The company has already come a long way, boasting viable platforms, 30 clients in their sales pipeline and revenue expected this quarter, CEO and founder Enes Hosgor told TechCrunch.

Gesund is basically a Contract Research Organization (CRO) for AI companies developing medical algorithms, or academics testing their own models. The same way a CRO might design a clinical trial for a drug or medical device company, Gesund's platform curates data that allows AI companies to test their own products and creates the IT infrastructure to make that comparison run smoothly.

"I like to think of us as a machine learning ops company," said Hosgor. "We don't do algorithms."

A medical algorithm is only as good as the data it’s trained on, and there is evidence that getting diverse and usable data sets can be a challenge. For example, a study published in JAMA in 2020 analyzed 74 scientific papers describing deep learning algorithms across disciplines like radiology, ophthalmology, dermatology, pathology, gastroenterology and pathology; 71% of data used in these studies came from New York, California and Massachusetts.

Indeed, 34 U.S. states did not contribute any data to the pipeline that had been used to train these algorithms, calling into question how generalizable they might be to a wider population.

The issue also exists across different types of healthcare providers. You could train an algorithm on data collected at a large, esteemed, academic hospital. But if you want to deploy that in a small community hospital there’s no guarantee it will work in that very different setting.

Taken together, the data sets used to train algorithms are, in general, smaller than they should be, according to one meta-review of 152 studies published in the BMJ. Naturally, there are some algorithmic success stories, but this is an industry-wide problem.

Technology alone can't solve all these issues; you can't sort or provide data that isn't there in the first place. Think genetic studies for people of non-European ancestry, which are sorely lacking. But Gesund is focused narrowly on an issue where tech might help: making existing data easier to access and creating partnerships that open up new avenues for data sharing.

A screenshot of Gesund’s validation platform.

Gesund’s data pipeline comes from "existing data sharing agreements in place with clinical sites,” said Hosgor. Right now, Gesund is focused on imaging data collected at the University of Chicago Medical Center, Massachusetts General Hospital and Berlin's Charité. (The company plans to extend beyond radiology in the future.)

Aggregating and delivering data for use in machine learning applications is also being done by others, like the Nightingale Open Science Project, which will freely provide clinical data sets to researchers (not affiliated with Google's controversial "Project Nightingale"). But while the data itself is a critical piece of this, it's really the technology stack that Hosgor sees as the company's secret weapon.

"Everybody does ML on the cloud," explained Hosgor. "And because your average healthcare provider doesn’t have a cloud, all that goes out the window," he said. "We have built this technology stack that can reside on premises, inside a hospital firewall. It does not rely on any third-party managed services, which are the bread and butter of machine learning."

From there, the platform includes a "low code" interface. In short, physicians and providers can basically drag and drop the datasets they need and test their own algorithms against that data.

"We’re about six months old, but we hit the ground running and we built this first product that allows model owners to run their algorithms against data to produce accuracy metrics on the fly, in high compliance environments where they don’t have access to cloud resources. That’s our secret sauce," he explained.

At the moment, Gesund, somewhat like Nightingale, is providing some of its services for free. The company's Community Edition allows academics with existing algorithms to test their algorithms for free (but they'll have to upload their own data sets).

Meanwhile it's the AI companies that will foot the bill for the company’s "premium" version. This, says Hosgor, will give the paying customers access to proprietary data sets. And there's evidence they'll pay for the data they need. At the moment, Gesund claims to have a pipeline of 30 potential clients, and expects to generate revenue this quarter.

"We were at RSNA in Chicago last November and every single AI company we talked to said 'yes, I need evidence yesterday.'"

The $2 million pre-seed round represents all of Gesund's funding, but Hosgor expects the company to raise again this year. In the near future the company will focus on R&D and expanding its clinical partnerships in the U.S. and Europe.

Clubhouse adds text-based chat rooms for the mic shy

Posted: 24 Feb 2022 01:44 PM PST

The voice-first social network has finally introduced a way for longtime lurkers to get in on the action. Clubhouse announced in-room chat Thursday, adding a text chat feature into its voice rooms that’s akin to what people might see on YouTube or Twitch.

In-room chat is an optional feature, so anyone running a conversation on Clubhouse can toggle the option on when they kick off a room. When enabled, the button to access the chat box will live on the bottom left of the app, represented by a speech bubble next to the “clips” and “share” icons.

Clubhouse in-room chat

Image Credits: Clubhouse

Clubhouse calls the text chat option “another touchpoint” between creators on the platform and audience members. Like the additional of a direct messaging feature last year, it’s definitely a move toward expanding the app beyond its laser focus on audio — and also one toward making Clubhouse more accessible for more people. Many other social platforms have a running text chat box that accompanies content, so it’s also something people who consume content on more mature platforms have come to expect.

As far as content moderation goes, anyone can long press their username and report or block them them directly from chat. If you’re running a room on Clubhouse, you can appoint moderators to delete messages or kick disruptive participants out. Text chat will live on in archive form alongside the audio content of a room after it’s ended, but users won’t be able to keep participating in the chat after the fact.

Clubhouse says that the feature is rolling out now on both iOS and Android, so if you’re keen to take your lurking to the next level you can hop into the apps and try it out.

Clubhouse announces Wave, making it easier to start casual private rooms

Clubhouse ventures beyond audio with Backchannel, a new messaging feature

Clubhouse is building a DM text chat feature

Coinbase crushes expectations in Q4 earnings, but stock sinks as it reports slower start to year

Posted: 24 Feb 2022 01:39 PM PST

Shares of Coinbase, the American crypto trading giant, initially soared when it reported its Q4 2021 earnings today, but investors quickly sold off the spike bringing the stock price down as much as 9%, hovering just above an all-time low.

The company bested investor expectations in the trailing period. However, citing a “decline in crypto asset volatility and crypto asset prices,” Coinbase said that it expects retail monthly transacting users (MTUs, in its parlance) and total trading volume to decline sequentially in the first quarter.

Coinbase’s Q4

In the fourth quarter of 2021, Coinbase generated $2.50 billion in total revenue, up from $585.1 million in the year-ago quarter. The company’s massive growth in top-line led to huge profitability gains, with its net income soaring from $176.8 million in the final three months of 2020 to $840.2 million in Q4 2021. The company also reported GAAP earnings per share of $3.92, on a diluted basis, in the final quarter of last year.

Investors had expected Coinbase to report $1.94 billion in revenues, and earnings per share of $1.85. However, we’ll note that estimates for Coinbase’s revenue and profit were rather wide heading into its call, with revenue estimates ranging from $1.19 billion to $2.44 billion, per data provided by Yahoo Finance.

Moving past the numerical nuts and bolts of corporate finance, what can we glean from the Coinbase quarter as it relates to the crypto world? Lots. The following chart is rich in information:

Up top we can see that retail trading activity in volume terms remains a fraction of its institutional volume; bear in mind, however, that retail investors generate not only the vast bulk of Coinbase’s trading revenues, but also the preponderance of its total top line. Despite lower volume, retail trades were worth $2.185 billion in revenue in Q4 2021, while institutional trades only generated $90.8 million in revenue.

Moving along, Bitcoin’s era of dominance in terms of trading volume and trading revenue generation at Coinbase is clearly over. It merely tied the Ethereum blockchain for trading volume and trading revenue. And, finally from the above, the rise of other crypto assets in terms of both trading volumes and incomes is something to chew on; while the crypto world at times appears to revolve around just two blockchains and their related projects, the Coinbase revenue story is a very different picture.

Why is the stock down?

Coinbase crushed estimates, posted huge profits and grew massively from its year-ago quarter. So why is the stock down? The answer is simple: The market cares more about what you are going to do than what you’ve done. Guidance, in other words, can trump strong trailing results.

Before Coinbase dropped its Q4 report, the market had expected it to generate $1.69 billion in Q1 2022 revenues and earnings per share of $1.55. Did the company’s forecasts indicate that it might not hit those marks?

Here’s what Coinbase told investors it is seeing in Q1 2022 thus far:

  • Total trading volume of $200 billion to-date, which appears to have the company on a pace to dramatically undershoot recent quarters’ volume figures (see above table).
  • Lower “subscriptions and services revenues” than in the fourth quarter, which along with the above datapoint underscore the fact that Coinbase appears set to shrink sharply in top-line terms in Q1 2022 compared to Q4 2021.

Looking even further ahead, Coinbase says that it expects annual average retail MTUs to land between five million and fifteen million, a massive range. And the company expects “Average Transaction Revenue Per User” to decline to “pre-2021 levels.” Investors don’t love a non-growth story, and Coinbase did not promise one.

We’ll have more from the company’s earnings call, so stay tuned.

Healthcare unicorn Ro parts ways with top execs after fresh round of funding

Posted: 24 Feb 2022 12:22 PM PST

A week after healthcare unicorn Ro landed capital from existing investors at a higher valuation, two top executives have parted ways with the company, per an internal email obtained by TechCrunch from multiple employees.

In the e-mail, CEO and co-founder Zachariah Reitano said that COO George Koveos and GM of Ro Pharmacy Steve Buck are "moving on from Ro" in the coming weeks. Koveos will be working in a new field, Reitano added, and Buck is returning to a healthcare project, but will remain "as an outside advisor to Ro Pharmacy." Koveos had been at the company for 3.5 years, while Buck was hired in 2020 to meet pandemic demand.

The executive shakeup comes four months after former and current employees spoke to TechCrunch about rising tensions at Ro, noting its inability to monetize beyond its core brand and culture issues. Ro’s VP of communications Meghan Pianta did not immediately respond to request for comment on the departures.

It is unclear whether the executives chose to part ways with Ro or were laid off, but current employees note that shake-up comes after high churn on the care team, which was overseen by Koveos. Eight people out of Ro's 11-person customer service operations team have quit due to culture, the majority leaving after only being at the company for five months, employees said in November. In recent weeks, Ro's co-founders and HR team were conducting interviews with the entire operations team to better understand why so many people were quitting.

Some former care team employees tell TechCrunch that Koveos was directly responsible for them deciding to leave the company, citing "poor treatment" and "toxic culture." After the TechCrunch story was published, Koveos took the blame internally for pushing the narrative that Ro should become the “Amazon of healthcare,” a mission that employees felt added pressure to pursue profit more than efficacy.

"We're going to back away from that vision, we don't want to be the Amazon of healthcare, we want to be the Ro of healthcare," one employee told TechCrunch in that October piece. The next month, Ro hired Amazon executive JR Blaszek to be the new GM of Ro.

"With every change in leadership comes the opportunity to rethink what’s next, and that’s exactly what we’ll be doing here," Reitano continued in the e-mail. "On a permanent basis, we see an opportunity to better align the teams that play critical roles in delivering a united Ro experience."

The move will lead to a reorganization of the operations team, which ranges from customer support to care and sales roles. It is planning to hire a new operations leader, and Saman Rahmanian will be interim GM of Ro Pharmacy for the next two months, per Reitano's e-mail.

Current and former Ro employees can contact Natasha Mascarenhas by e-mail at natasha.m@techcrunch.com or on Signal, a secure encrypted messaging app, at 925 609 4188.

Existing investors double down on Ro at boosted $7 billion valuation

Employees detail rising tensions at Ro as healthcare unicorn struggles to grow beyond first win

Equity Live: A short note about the ongoing situation in Ukraine

Posted: 24 Feb 2022 12:02 PM PST

Hello friends, and welcome back to Equity, your podcast about the business of startups where we try our best to unpack the numbers and nuance behind the headlines with you.

Today we gathered to do our live show, something that was scheduled a long time ago. Obviously, the world’s condition has changed since. So, we sat down and tore up our notes doc and put most of the show on hold. What we wound up recording was short, and frankly a little bit raw and from the gut.

But it just didn’t feel right for us to sit and chit chat about funding rounds and executive shuffles when Russia is busy invading a democracy under false pretenses. TechCrunch has some notes on the situation for the tech world in Ukraine, which is worth a read.

That’s it from us. Equity will return in short order when we have our heads on straight. Hugs, and godspeed.

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.

Siri gains a new gender-neutral voice option in latest iOS update

Posted: 24 Feb 2022 11:40 AM PST

Apple has developed a new Siri voice, now available in the beta versions of its iOS 15.4 software, that doesn’t sound obviously male or female. The decision to introduce a gender-neutral voice is one that sees the tech giant taking yet another step away from the criticism that, historically, digital assistants have reinforced unfair gender stereotypes.

Over the years, industry observers and experts argued how the creation of voice assistants with female-sounding names — like Alexa, Siri and Cortana — which also speak with female-sounding voices, implied that women should be the ones to do your bidding at any time and even take your abuse. A U.N. study additionally called out the female voiced-assistants and their submissive and sometimes even flirty and coy styles.

More problematically, the decision to make so many of the virtual assistants female by default was likely driven by a lack of diversity in the teams responsible for building our everyday technology. That issue doesn’t just lead to thoughtless choices with AI voices, it has also delayed the advance of useful tools for women. For example, it took years for Apple to realize that its Health app should probably include a period-tracking feature, considering it’s a health measure relevant to roughly half the human population.

Apple, to its credit, did address concerns with the Siri voice last year when it issued an update that added more diverse voices and, notably, also made it so Siri’s voice would no longer default to being female.

But what if you didn’t have to think about the gender of your AI voice assistant at all?

That’s clearly the intention here with the addition of the new and now fifth Siri voice, though Apple hasn’t yet explicitly said that’s the case.

However, the iOS software’s code provides some hints toward Apple’s thinking.

Developer Steve Mosser found a reference to a gender-neutral Siri voice in earlier versions of the iOS 15.4 beta, and this week he noted the fifth American Siri voice was added to Beta 4 with the filename of “Quinn.”

Quinn, a name with Irish origins, is a well-known gender-neutral name that has been used over the years for both boys and girls. It’s not a coincidence that it happens to also be the name for the new Siri voice. (Apple doesn’t display the voices’ filenames to end users, though — they’re identified in the user interface as just Voice 1, Voice 2, Voice 3 and so on.)

You may end up hearing Quinn’s voice and decide it sounds a bit more female or male to your ears. Though if you set your mind to hear it one way or the other, your interpretation may change to reflect your thinking.

What’s more, the new voice comes across as gender-neutral without reverting to some sort of more robotic cadence. The voice still sounds human, that is with the same natural inflection and smooth transitions heard in the other Siri voices, both new and old.

Apple tells TechCrunch the new voice was recorded by a member of the LGBTQ+ community. It leverages Neutral Text to Speech (Neural TTS) technology to offer its natural sounds. All the English-speaking voices use Neural TTS as do the voices in six other languages (French, German, Spanish, Chinese, Japanese and Korean). In total, Siri users can choose from 16 languages when setting up their device and choosing their preferred Siri voice.

When it comes to inclusion, Apple hasn’t just focused on Siri’s voice but also on what the digital assistant says. Over the past several years, Apple added Siri responses about Black Lives Matter and Stop Asian Hate, and introduced strong responses to abusive gender or sexuality-based utterances. Apple also rolled out more accessible voice features like Speak Screen, Dictation and Voice Control.

"We're excited to introduce a new Siri voice for English speakers, giving users more options to choose a voice that speaks to them,” an Apple spokesperson said, in response to our inquires about the new Siri voice. “Last year we introduced two new voices and removed the set voice default as part of Apple's long-standing commitment to develop products and services that better reflect the diversity of the world we live in. Millions of people around the world rely on Siri every day to help get things done, so we work to make the experience feel as personalized as possible,” they said.

The new voice option will roll out English speakers with iOS 15.4, which is expected to arrive sometime in March.

If you give Tumblr $4.99 a month, you won’t have to see ads anymore

Posted: 24 Feb 2022 11:36 AM PST

Tumblr announced today that it’s rolling out an ad-free browsing experience for web and mobile. On a monthly basis, you’ll have to pay $4.99 per month for what Tumblr calls “pure, unadulterated nonsense,” but its yearly price of $39.99 gives you four months free. To opt-in, users can navigate to their account settings and press the “go ad-free” button, where they will be prompted to choose between a yearly or monthly subscription. Though ad-free browsing is available on mobile too, it can only be enabled on the web. While the feature hides third-party ads, it doesn’t hide sponsored posts from Tumblr users.

This is Tumblr’s latest attempt to monetize the platform, which has depreciated in value over the years. In the last several months alone, Tumblr has unveiled a Post+ subscription, as well as Tipping, which allows users to send their favorite bloggers cash via Stripe. Tumblr earns a 5% commission on Post+ earnings, but all tips go directly to creators, minus standard credit card fees (2.9% + $0.30).

Tumblr’s audience is notorious for lashing out against any change to the platform, but an ad-free subscription is a less-intrusive feature than paywalling posts. Tumblr serves exceptionally strange ads (our personal favorite is the one that suggests you purchase one square foot of land in Scotland to become a Lord), but some users pointed out that they already get an ad-free Tumblr by using browser extensions, so they aren’t incentivized to pay.

Trouble in fandom paradise: Tumblr users lash out against its beta subscription feature

More automatons about buildings and food

Posted: 24 Feb 2022 11:15 AM PST

As I noted last year, we're ramping up to return to Boston this July for our TC Sessions Robotics event. Our March 2020 event on the Berkeley campus was the last major in-person TechCrunch show before everything shut down. For what should probably be self-evident reasons, we decided that robotics is a subject best experienced up close, so we took 2021 off.

I've been champing at the bit for the past two years or so thinking about the programming for this one, and now that we've started the early stages, it's hard to shut off the firehose. When we're ready to start announcing guests, I'll no doubt be devoting some column space to those folks.

Meantime, I've been thinking a lot about how the industry has evolved since this all started. I feel fairly confident when I say that future historians will point to this as the moment of great acceleration, when — after decades of talking about the future — robotics truly became a part of everyday life.

Some verticals are much further along than others, of course. Delivery is making quite a bit of progress — at least from the investment side. Regulation and implementation are a  bit slower going. Understandably so. In addition to manufacturing — a longstanding application, especially in automotive — warehouse fulfillment has been white hot of late. Amazon got the ball rolling on that, and now the rest of the industry is trying to catch up.

Image Credits: RightHand Robotics

And then COVID happened. Then labor shortages. Then supply chain concerns. Decentralized logistics is really the only way to go these days, and those fulfillment centers are increasingly likely to be staffed by robots, like the pick and place machines created by RightHand, which just raised another $66 million.

The company's funding is currently hovering around $100 million. It's a healthy — but not wild — sum for a startup that's got a lot of real-world hours under its belt. Among the long list of notable investors here is Zebra Technologies, which, as I noted yesterday, bought Fetch last year.

agility robotics digit

Image Credits: Ford/Agility Robotics

Oh, and while we're talking both logistics and delivery, allow me to quickly plug my talk next week with Agility Robotics CTO Jonathan Hurst and PlayGround Global founding partner Bruce Leak. That's Wednesday at 11:30 am PT / 2:30 pm ET. More info here.

Anyway, if you were to ask me which categories are on the cusp of breakthrough, I would give you two answers: agtech and construction. These are both massive industries with so much opportunity for automation. Agriculture, in particular, is an interesting one. It's ripe for the proverbial picking. If you've read this far, you almost certainly understand how tough the category is, and we've seen some recent stumbles.

John Deere is pumping a lot of money into robotics, both through in-house development and acquisitions of companies like Bear Flag. For reasons of it being John Deere, it's well-positioned to remain a major player in autonomous tractors. But labor shortages are a very real thing here — and the average age of a farmer in the United States is a few months shy of 60, for what's often extremely back-breaking work.

The next several years are going to be wild for agriculture in general — particularly as climate change continues to be top of mind. It's a subject that will likely increase interest in alternative approaches to the category, like the vertical farming we discussed last week. But the 10,000-year-old world of agriculture isn't going to change overnight. In a sense, robotics offers a kind of way to retrofit existing ways of tending the land with new technologies.

Image Credits: Verdant

Given all of the advancements made to autonomy in recent decades, there's a lot of opportunity there. And while you obviously need to make the systems safe, you've got far fewer points of failure in a field than your average city block. Verdant this week announced an $11.5 million raise, bringing its total to $21.5 million.

The Hayward, California-based company offers a robotic system that does a combination of laser- and spray-based weeding, coupled with taking scans of fields designed to give farmers more data on their crops.

"Farmers told us not to give them more data, but to figure out what to do with the mountains of data they already have, or better yet just go do it," co-founder and CEO Gabe Sibley said. "They want a complete solution that takes action in real time and keeps farmers in control — all while improving profitability and automating dangerous, back-breaking field work."

Leko Labs housing development

Image Credits: Leko Labs

Construction is another category that's ripe for some massive robotic disruption. I say that as a resident of a city that's seemingly constantly under construction — so if you could build some quiet robots to do some of the work, that would really help me out. Anyway, Natasha had the story this week about Leko Labs' $21 million Series A. The firm is working to bring more sustainable materials to home construction, using an "automotive style, robotics driven" approach.

Image Credits: Hyphen

I wouldn't put kitchen automation at the top of the list, but it's certainly one that has been catalyzed by the pandemic in a major way. Two years in, and restaurants are having as hard a time as ever staying staffed. We wrote about Hyphen in this very newsletter as the startup came out of stealth, and this week it announced a $24 million Series A led by Tiger Global for its modular conveyer belt kitchen system.

The system specializes in bowls/salads, which is probably what you want your robot to be cooking if it's not trying to make pizzas and/or flipping burgers. Also, a quick mention for Dexai Robotics, which signed $1.6 million contract to bring its cooking arm, Alfred, to U.S. military installations.

The Automata Labs enclosure with Eva robotic arm next to it.

The Automata Labs enclosure with Eva robotic arm next to it. Image Credits: Automata

Automata is something of a dark horse this week. Lab automation isn't something we've covered much in this newsletter, but COVID has really shone a light on the need for rapid lab results. The firm this week announced a $50 million Series B aimed at fully automating the laboratory process.

"We've had to build an entirely new hardware stack that allows for this kind of automation," co-founder and CEO Mostafa ElSayed told Devin. "The benchtop is really the standard unit of all laboratories, so it's basically a whole lab bench that's amenable to automation."

And finally, the real automation we're all waiting for. Here's Amazon's Astro bringing someone a beer. The expensive home robot recently started shipping out to customers.

Image Credits: Bryce Durbin/TechCrunch

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How to strategically manage your startup advisor’s compensation

Posted: 24 Feb 2022 10:29 AM PST

Matt Cohen Contributor
Founder and managing partner at Ripple Ventures, Matt Cohen is a business operator turned early-stage investor.
More posts by this contributor

The best founders often attribute their success to a deep bench of mentors and advisors, but how do founders compensate these core parts of their network?

I see tons of founders being asked to compensate advisors with hard cash, and I'm immediately shocked to hear they have graciously agreed to do so. Advisor compensation is something founders find very difficult to navigate and I am often asked for my two cents.

When it comes to cash compensation, my initial response to founders is that cash at startups should be reserved for services like legal, accounting, marketing and other outsourced contractors. However, when it comes to more qualitative support and advice, the people helping founders need a more accurate alignment of incentives in the form of equity-based compensation.

The excess of capital in venture-funded startups has also attracted a litany of coaching services to the space, many of which are great. There are, however, a few operations out there that are angling to get exposure to the growth in tech startups. These coaches often position themselves as advisors to CEOs and either demand significant cash compensation or cash in addition to equity options from the company.

For good advisors who truly want to get their hands dirty and help founders succeed, a lucrative equity package based on results makes a ton of sense.

In order to create a better sense of alignment, I recommend that founders put in place certain terms that both parties must meet in order to unlock the value of that equity. For instance, founders can implement a vesting structure that requires advisors to meet certain metrics over time in order to unlock the value of their compensation — sometimes over many years.

A good example would be a partnership advisor: set goals around the number of partnerships from their network. If the advisor meets these goals, they're eligible for the compensation. If not, then the founder can be protected from deploying that equity. Again, these coaches, advisors, mentors or whatever title they wish to hold should not be compensated in cash. That's not because cash is more important than equity, but because it is much harder to tie to outcomes once it has been awarded.

In one of the more egregious examples of an external party taking advantage of founders that I've seen, an advisor offered to recruit talent for the startup. He purported to offer those founders a deal by taking a 50% reduction in cash relative to his usual rates, and the company paid him in shares to make up the difference.

VCs weigh in on Europe’s future in the critical deep tech market

Posted: 24 Feb 2022 09:37 AM PST

Writing about Europe is hard today. Russia is invading Ukraine as we write, and global markets are in freefall. This is the continent's political and military backdrop.

Last week, this column took a look at the European technology market's deep tech expertise. Europe's economic future, in other words.

We could have held off a day or two to compile this follow-up piece. But as many of the comments below are positive about Europe's future, it felt reasonable to continue.

The Exchange started its look at European deep tech with a report from Angular Ventures. Its data paint a picture of record-setting capital disbursement into companies on the continent that are working on complicated, hard-to-commercialize, fundamental technologies.

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

Today, we're discussing responses to the data from a number of European investors, including Michael Jackson of the Cottonwood Technology Fund, Isabel Fox of Outsized Ventures, Nick Kingsbury and Andrea Traversone of Amadeus Capital Partners, and Cyril Bertrand of XAnge.

We'll recap the data in question and then dive into differing perspectives on where European deep tech investing is going. The core views are that the pace of investment will slow some in 2022 from record highs set in 2021, that things appear stable thus far, and, finally, that this year could bring an acceleration in European deep tech investment and startup activity.

Out of fairness to our sources, it’s worth mentioning that they started drafting their answers before today. But the prospect of war was already looming, so considerations on what it might mean for private markets not immune to stock market dives, cyberattacks and other woes were already part of the conversation

On the other hand, it goes without saying that some deep tech projects will lower global – and therefore European – dependence on oil, gas and other similar fuels. There's politics inside technology, in other words; it may be even clearer to say that technological change impacts politics.

Traversone hit on this in an email to TechCrunch, writing that "the current geopolitical situation is fuelling" a lot more interest in "healthcare and cybersecurity deep tech" and so-called "sovereign tech," with focus sometimes landing on "strategic areas such as semiconductors, telecom equipment, and power technologies."

Our starting point last week was Angular’s report, with an important caveat: It focused on both enterprise and deep tech investments. The pairing of the two groups makes sense in a way, as it helped detail how Europe’s venture capital market is moving its focus away from consumer tech. But for our purposes, we want to be clear about what deep tech is and is not.

Jackson argues that deep tech “can mean a lot of things … and because of how nebulous a term it’s become, it means less and less.” We agree. And while we don’t want to narrow our focus too much, especially as new disciplines continue to emerge, we want to make it clear that we too are talking about what Jackson describes as “the 'deep' end of the deep tech pool — robotics, semiconductors, energy transfer, medical devices, hardware, all that fun stuff!”

What's ahead for deep tech in Europe

In the wake of a record-setting venture capital market in 2021, seeing minor declines in dollar or deal volume in 2022 would hardly be a retreat. At the same time, there are some venture investors who anticipate that the European deep tech market will accelerate further. As we explore our question, please keep in mind that those forecasting a deceleration are hardly pessimists; when we consider deep tech investment on the continent in 2019 and 2020, they are still likely anticipating bullish results.

Nikola reports EV truck progress, stiff losses as it closes out turbulent 2021

Posted: 24 Feb 2022 09:00 AM PST

Nikola Corp., the electric truck startup that went public via a SPAC, is coming closer to commercial activity after a history of over-promising, missed deadlines and investigations into its founder for lying to investors.

In its fourth-quarter earnings report released Thursday, Nikola ticked off a number of recent milestones and, critically, its plans to begin series production of its electric big rigs.

For investors, the developments may be little more than cold comfort after much of Nikola’s value was lost on the public markets since its mid-2020 highs. Still, the public company is very much working toward, as CEO Mark Russell wrote in its Q4 digest, “delivering vehicles and generating revenue.”

The beleaguered company, which has suffered from supply chain constraints that caused delays and investigations by securities regulators, said it will begin series production of its electric trucks in March. Nikola said it plans to deliver between 300 and 500 of the production-ready Tre battery-electric trucks to customers in the second quarter of 2022.

The forecast shows some progress — emphasis on some. Importantly, the report finally puts some distance between Nikola and Trevor Milton, the company’s controversial founder and former CEO and chairman who was charged by the U.S. Attorney’s Office for two counts of securities fraud and one count of wire fraud. Nikola agreed in December to pay a $125 million fine as part of a settlement with the U.S. Securities and Exchange Commission. The company is paying installments and is seeking reimbursement from Milton, it said in its investor update.

Shares of Nikola are up more than 7% on the earnings report, a notable result on a day in which the stock market is suffering around the world in the wake of Russia’s invasion of Ukraine, tensions between China and Taiwan, the COVID-19 pandemic, and other issues.

The company’s rosy outlook isn’t constrained to its move from prototype to volume production of its electric Nikola Tre trucks. Nikola said it plans to begin construction on its first hydrogen production hub in Arizona and announce two or more dispensing station partners in California sometime this year.

Nikola also recapped some of its more notable progress toward commercialization, including pilot testing with customers like Anheuser-Busch and Total Transportation Services Inc., securing a battery deal with Proterra, and working with ​​Corcentric Fleet Funding Solutions to help finance its trucks.

The company said it delivered the first two Tre BEVs to TTSI in California as a part of a three-month pilot program. The trucks have hauled multiple loads per day and logged more than 4,500 miles combined and have completed a 204-mile journey on a single charge, the longest range of any BEV TTSI has tested, the company said. (Readers: What non-GAAP result is your favorite? MAU/DAU ratios from social media companies or miles driven by EV concerns?)

Nikola also began piloting its fuel cell electric truck, the Tre FCEV, with Anheuser-Busch. The company said that two Nikola Tre FCEV alphas are undergoing a three-month pilot in daily service within the brewer’s Southern California distribution network.

But the above positive notes have something in common: None of them generated any income in 2021. As such, Nikola’s Q4 2021 and full-year report is a sea of red ink.

Financial results

Nikola had no revenue in the fourth quarter of 2021, or at any point in the year. So it closed 2021 with zero top line and $162.7 million worth of operating expenses. The company’s full-year operating loss was therefore just that: $162.7 million.

That result was greater, and therefore worse, than Nikola’s 2020 operating loss, which came to a slightly more modest $146.8 million. However, that metric included around $14.4 million in impairment costs, so the company’s pace of expense growth is greater than it appears from its face-value operating losses; Nikola’s rising expense base is having a material impact on its profitability (or lack thereof).

To be clear, this is what both TechCrunch and the market anticipated. Nikola remains in ramp-up mode, as noted above, which means that its expenses are rising, its revenues are forward expectations, and potential profits far in the future. Those losses may continue to grow in 2022, but with deliveries of its first production trucks beginning, it should also mean actual capital, aka revenue, should begin to flow into the company.

Still, there was good news in the company’s earnings report, namely that it lost less money than anticipated in Q4 2021. While Nikola lost $0.39 per share in the quarter when counting all costs (GAAP), its adjusted net loss per share was just $0.23, largely the result of removing share-based compensation expenses and the financial impact of regulatory expenses from its cost mix. The market had expected a $0.32 per-share loss on an adjusted basis for the fourth quarter. That, coupled with the company’s commercial progress, could be construed as encouraging.

Good news or not, the company has payments related to its settlement with the SEC ahead of it, zero revenues, and rising expenses. Its ability to sell trucks at volume, and with positive unit economics, remains uncertain. Still, investors value Nikola at $3 billion as of the time of writing. That’s a pretty big bet that the company’s trucks will roll, and that when they do, profits will draft in their wake.

Hear from these amazing investors and founders on TechCrunch Live this March

Posted: 24 Feb 2022 08:30 AM PST

TechCrunch Live has an exciting slate of episodes scheduled for March. The speakers come from a variety of disciplines, backgrounds and locations. Like always, each episode features an entrepreneur presenting their early pitch deck along with the investor who funded the company. We want to know how the founder hooked the VC, what makes their partnership work and how other founders can improve their storytelling and pitching.

We have Agility Robotics’ co-founder and CTO, followed by Snorkel AI presenting an early pitch deck, which laid the groundwork to raise $135 million in two years. DoubleVerify and early investor Blumberg Capital is speaking on how they’ve worked together since 2008.

TechCrunch Live helps founders build better venture-backed businesses. We do this by bringing together startup founders and the investors who back them to talk about what, precisely, helped close the deal. What metrics are the investors looking at? What questions did the founders answer that made the VCs want to learn more? How did the founders communicate their grand vision, and what was the step-by-step plan to get there?

We cover all this — complete with looking at these companies’ early pitch decks and more — on TechCrunch Live. TechCrunch Live is also home to the TCL Pitch-off, where founders in the audience can get on our virtual stage to pitch their startup to our esteemed guests and get their live feedback.

As with any TechCrunch event, this weekly series also features networking so you can meet and greet other attendees.

The event goes down every Wednesday at 11:30 am PT / 2:30 pm ET and is free to attend. Networking and the pitch-off submissions start at 11:30 am PT, followed by the interview at 12 pm PT and the live pitch feedback session at 12:30 pm PT. Only TechCrunch+ members get access to the complete library of on-demand content, so if you haven’t yet, sign up now!

And without any further ado, here is a look at the outstanding guests joining us on TechCrunch Live in March.

Bruce Leak (Playground Global) + Jonathan Hurst (Agility Robotics)

March 2 – 11:30 am PT / 2:30 pm ET

Agility Robotics co-founder and CTO Jonathan Hurst will join Playground Global founding partner Bruce Leak to discuss the firm's unique approach to warehouse logistics. Founded in 2015 using technology developed by the Dynamic Robotics Laboratory at Oregon State University, Agility has become a major force in robotics.

Register for TechCrunch Live with Playground Global and Agility Robotics

Image Credits: Hieu Tran / Agility Robotics

Saam Motamedi (Greylock) + Alex Ratner (Snorkel AI)

March 9 – 11:30 am PT / 2:30 pm ET

Snorkel AI was founded in the summer of 2019 and over two quick years raised a total of $135.3 million in funding over five rounds. The rocket ship seemingly still has fuel, too. The company isn't slowing down, and TechCrunch Live is thrilled to host co-founder and CEO Alex Ratner and Greylock partner Saam Motamedi.

Register for TechCrunch Live with Greylock and Snorkel AI

Image Credits: Greylock / Snorkel AI

Yodfat Harel Buchris (Blumberg Capital) + Oren Netzer (DoubleVerify)

March 16 – 11:30 am PT / 2:30 pm ET

Oren Netzer and his co-founder Alex Liverant started DoubleVerify in the heady Web 2.0 days of 2008. Blumberg Capital was the company's first institutional investor. TechCrunch Live is thrilled to have CEO Netzer and Blumberg Capital partner Yodfat Harel Buchris speak to DoubleVerify's early pitch deck.

Register for TechCrunch Live with Blumberg Capital and DoubleVerify

Image Credits: Rachel McFarlin Photography / DoubleVerify

Defy.vc’s Brian Rothenberg explains growth marketing strategies that don’t break the bank at TC Early Stage

Posted: 24 Feb 2022 08:18 AM PST

Every founder wants to crack the code that will let them attract, engage and retain lots of customers quickly, consistently and at scale. Marketing tactics from the "aughts" — like email blasts and recycling the same keywords into a Google Adwords campaign — won't cut it in today's competitive startup market.

Although you might wish for a fast-forward button to achieve long-term sustainable growth, you're out of luck. Instead, consider applying the art and science of growth marketing. When done correctly, growth marketing strategies can take your customer base to new heights, but it also gives you something even more valuable — highly engaged, loyal customers.

Implementing growth marketing strategies early in your startup journey is a smart move. That's why we've invited Brian Rothenberg, a partner at defy.vc, to lead a session called Growth Marketing for Startups at TechCrunch Early Stage on April 14. Rothenberg will break down growth marketing, how it can boost both your bottom line and your long-term viability, as well as how you can make the most of your marketing dollars.

Rothenberg knows whereof he speaks, and he brings a wealth of experience to the startup table. As an investment partner at defy.vc, he finds and supports entrepreneurs who create a new reality from their unique insight and vision. Rothenberg's investments include Aalto, Fourthwall, Moment House, Novi, Office Together, PerkUp, PocketSuite, Snapwire and Thrilling.

Before joining defy.vc, Rothenberg served as Eventbrite's first VP of Growth, scaling the company from a small startup to become the world's largest event technology platform and marketplace for live experiences — with millions of users, $300 million in revenue and an IPO with close to a $3 billion market cap.

Earlier in his career, Rothenberg co-founded SkillSlate, a VC-backed local services marketplace. He built the business through its acquisition by TaskRabbit, which was later acquired by IKEA. He also served during Yahoo!'s first 10 years where, as the company's youngest product manager, he helped build several of its early businesses.

Whether growth marketing is a new-to-you concept or you want to increase your knowledge and strengthen your marketing chops, this session is for you. Join Brian Rothenberg to better understand the benefits of growth marketing, and why it's an essential strategy in the startup playbook.

TC Early Stage will provide entrepreneurs and “want”repreneurs plenty of time to engage, ask questions and walk away with a deeper, working understanding of topics and skills that are essential to startup success. Register today before tickets run out and prices increase!
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