TechCrunch |
- Raising big money in a sour market
- TikTok reportedly drops plans to expand its live ecommerce ‘Shop’ venture to the US
- Google halts KakaoTalk updates on Play Store in Korea after messaging app refused to remove its own payment links
- Today, last chance to snap up a TechCrunch Disrupt two-for-one ticket
- Rocket Lab rockets to the moon and other TC news
- Contrarian bets in a downturn
- Startup founders. Consider your language. Keep it simple.
- UK to combat Russia’s ‘hostile online warfare’ by forcing internet firms to remove disinformation
- Maolac pours new funding into superfood mimicking breast milk health benefits
- Tesorio’s tools aim to help businesses automate payments collection
- European parliament backs ‘historic’ reboot to EU’s digital rulebook
- American Robotics’ owner set to acquire fellow drone firm, Airobotics
- Twitter sues India’s government over content takedown orders
- Sequoia Capital China raises $9B amid cooling tech sector
- Google-backed Glance to launch in US within two months
- McEasy is digitizing Indonesia’s logistics, transportation and supply chain industries
- Onomondo secures cash to expand its wireless network for IoT devices
- Climentum backs startups with $157M to ‘accelerate Europe’s green transition’
- Pina Earth gets seed backing to grow sustainable forestry carbon credits
- Founder of auto giant Geely buys Meizu as smartphone demand weakens
| Raising big money in a sour market Posted: 05 Jul 2022 09:30 AM PDT One easy complaint to make when it comes to venture capital is that it’s mostly not. Venture-ous, that is. It’s definitely capital. During the last decade, for example, a huge portion of venture capital investment went into software-as-a -ervice companies, some of the least risky private technology companies out there. Sure, some fail, but the SaaS model tends to be durable, and its performance trackable to the point that anyone with a pencil can model out future growth and come to a valuation conclusion. The Exchange explores startups, markets and money. Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday. Where are the venturesome gambles on space factories, superfoods and the like? Sorry — you got DocuSign instead. But not all funds are timid, even if we find the present lack of material wagers on mega-projects disappointing. No, some funds are bucking the downturn by raising new, huge venture vehicles to invest in markets that don’t appear healthy from an outsider’s perspective. In a sense, this is actual venture capital activity, as the investors are taking their money on an adventure into parts — and market conditions — unknown.
That makes recent funds from Sequoia Capital China and a16z all the more interesting to talk about. And why their returns could be all the sweeter. Zagging while others zigBriefly, the news: Sequoia Capital China is raising a huge new fund. That means that the Sequoia crew is gearing up to expend a bank’s worth of cash in the country. Welcome news, assuredly, to the beleaguered Chinese technology ecosystem that has seen slowing growth and increasing layoffs. But why now? One reason could be that the Chinese tech market is just that: beleaguered. Next up: a16z’s massive new crypto fund. Worth some $4.5 billion, it’s the company’s biggest yet, and, like the Sequoia fund, it could represent a material portion of the coming venture funding for its chosen market, namely web3. As China’s venture capital market and technology industry suffer and the crypto industry endures rapid climate change from NFT Summer to Meltdown Winter, investors with a thesis about both areas of investment are raising new, huge funds. Why do the opposite of the market? Because that’s — potentially, at least — where the money is. |
| TikTok reportedly drops plans to expand its live ecommerce ‘Shop’ venture to the US Posted: 05 Jul 2022 09:08 AM PDT TikTok has reportedly dropped plans to expand its live ecommerce “TikTok Shop” initiative to the United States and additional parts of Europe, according to the Financial Times. The company launched TikTok Shop in the UK last year, its first market outside Asia, allowing companies and influencers to sell products through QVC-style live streams. However, the venture has struggled to gain traction with consumers and suffered from internal problems. The company had reportedly planned to launch TikTok Shop in Germany, France, Italy and Spain in the first half of this year, and then in the US later this year. People familiar with the matter told the Financial Times that the expansion plans have been abandoned after influencers dropped out of the project in the UK and the venture struggled to gain traction with users. A TikTok employee told the Financial Times that general consumer awareness and adoption is still low in the UK, as many TikTok Shop livestreams achieved poor sales despite efforts to encourage brands and influencers to sell through the app. The Financial Times reports that TikTok said it doesn’t have any current plans to expand its shopping features and is focused on making TikTok Shop a success in the UK. TikTok did not respond to TechCrunch’s request for comment. Livestream shopping is becoming increasingly more popular in Asia and particularly in China, as TikTok parent company ByteDance has seen sales on Douyin, TikTok’s Chinese sister app, more than triple year-over-year. The report comes as TechCrunch recently reported that TikTok is testing a dedicated "Shop" feed tab that lets users browse and purchase products from a number of different categories, such as clothing and electronics. The feed tab is currently being tested in Indonesia and serves as a hub for products being sold in TikTok Shop. TikTok's new Shop tab seems to be similar to Instagram's. The Meta-owned platform introduced its redesigned Shop tab in 2020 and describes it as a place for users to browse products from their favorite brands and creators. TikTok's larger goal with its Shop tab could ultimately be to challenge Facebook and Instagram. The launch of the Shop tab indicates that TikTok is doubling down on its TikTok Shop plans in Asia, while retracting them in some markets. |
| Posted: 05 Jul 2022 08:07 AM PDT Google has stopped providing updates to popular messaging app KakaoTalk in South Korea, according to a local report, after Kakao continued using an external payment link in its Android app, against Google’s new in-app payments policy. Google’s new policy requires developers selling digital goods and services to use Google’s first-party billing system, but Kakao has been using an external link to its own website. This is the first time Google has stopped PlayStore users from updating an app after its new payments policy went into effect last month. KakaoTalk can be updated on other app operators such as Apple’s AppStore and OneStore, per the local media report. Two big questions now will be whether Google turns its attention to stopping updates on other apps similarly providing external payment links, or goes one step further and proceeds to remove them altogether. “All developers selling digital goods and services in their apps are required to use Google Play’s billing system,” Google writes in a note detailing its new in-app payments policy. “Apps using an alternative in-app billing system will need to remove it in order to comply with the payments policy… Starting June 1, 2022, any app that is still not compliant will be removed from Google Play.” Google said last year it would comply with alternative billing systems in South Korea by allowing Android app developers to use third-party payment options, but to offer them alongside Google Play’s own billing system after the country passed its in-app payment law — the first of its kind in the world — in August last year. That law, pointedly, is regularly referred to as the “anti-Google law.” Developers, however, can’t add links that point to their own websites inside their apps, which would allow their users to buy directly, bypassing Google’s billing entirely. South Korean app developers and content providers have increased their paid subscription and service fees on Google’s Play due to the heavy 15-30% commissions now required following Google’s policy changes. The Korea Communications Commission said in April that the prohibition of app developers from using the weblink payment option would breach South Korea’s app payment law that requires operators of app stores to allow third-party payments. The KCC told TechCrunch last month that it would keep an eye on Google to see if they would remove any app against its new policy. Apple announced last week that developers will have to submit a separate binary for iOS and iPadOS “distributed solely on the App Store in South Korea” to use a third-party payment system for the South Korea App Store. TechCrunch has reached out to Kakao, which did not immediately respond to a request for comment about Google’s move. Google did not respond to requests for comment. |
| Today, last chance to snap up a TechCrunch Disrupt two-for-one ticket Posted: 05 Jul 2022 08:00 AM PDT Take a few minutes right now to score two-for-one passes to TechCrunch Disrupt in San Francisco on October 18-20. This holiday flash-sale won't last forever. In fact, it ends today, July 5, at precisely 11:59 pm (PT). The sale applies to every pass level — General Admission, Investor and Student / Non-Profit. Buy a two-for-one pass to Disrupt, split the cost with a friend and save a very tidy 50%. Leave no colleague behind; bring your entire team for half the price. Your people can cover more sessions and check out more of the Startup Battlefield 200 — the only early-stage startups exhibiting on the expo floor (applications close soon, so get your foot in the door and start your application today!). Amp up your networking, connect with more founders, investors and other attendees to discover more opportunities for partnerships or collaborations. Here are some exciting speakers you’ll get to hear from at Disrupt this year:
TechCrunch Disrupt is where early-stage startup founders can learn essential information from some of the best minds in the tech industry. We'll have lots more exciting speakers, presentations and programs to share with you in the run-up to Disrupt. Keep your fingers on the pulse of TechCrunch — sign up for event updates to receive the latest announcements and discounts. TechCrunch Disrupt takes place in San Francisco on October 18-20 with an online day on October 21. Don't miss out on our July 4th flash sale. Buy your two-for-one passes before the deadline expires today, July 5, at 11:59 pm (PT). Is your company interested in sponsoring or exhibiting at TechCrunch Disrupt? Contact our sponsorship sales team by filling out this form.
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| Rocket Lab rockets to the moon and other TC news Posted: 05 Jul 2022 07:12 AM PDT This week on The TechCrunch Podcast our host, Managing Editor Darrell Etherington talks with TC's Amanda Silberling about VidCon and the creator economy coming of age. He also speaks to Aria Alamalhodaei about NASA and Rocket Lab launching a scouting mission for a future orbital moon base. And, as always, you'll get a rundown of the week's top news on TechCrunch. Articles from the episode:
Other news from the week: |
| Posted: 05 Jul 2022 07:03 AM PDT Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. Alex and Grace are back to cover the biggest, boldest and baddest technology news. We are back on Tuesday, as the United States was off yesterday. So a day late, but hopefully not a dollar short, here’s what we got into today:
All that and we had a good time! We are back tomorrow morning, and Friday morning! Equity drops every Monday at 7 a.m. PDT and Wednesday and Friday at 6 a.m. PDT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. |
| Startup founders. Consider your language. Keep it simple. Posted: 05 Jul 2022 06:35 AM PDT Research shows that more than half of Americans can’t read very well. Their reading skill is below a sixth-grade level. As a startup founder, that is an important statistic. It is something you have to pay attention to. Especially if you are creating a company for regular folks. In a world of apps and websites, language is important. I get it. You are very clever, and you can use big words. You understand that a complicated word sometimes is more precise than a simple word. Remember that you also have a duty to your audience. The problem is not that they cannot understand. They can. A sixth grader can read complicated texts. But it takes a lot of energy. And that is not always necessary. I used to run a startup about death. It was a tool that helped people talk to a chatbot about the end of life. At the time, the American Bar Association recommended a document. It was at a grade 20 reading level. That is no good. Everybody dies. Everybody needs good information. The trick is to strike a balance. Use a tool like Hemingway App to gauge how hard your website is to read. This article may be a little strange to read. Unlike most of my writing, there are many short sentences. There are not a lot of jokes and puns. According to Hemingway App, it is at a grade 3 reading level. Perhaps that is a little overkill. But I am making a point. All I’m saying is that it is possible. Consider your audience, and write in a way that suits them. The choice is yours. Know that it can make a huge difference.  The Hemingway App rating for this article. Image Credits: Screenshot of the Hemingway App (opens in a new window) |
| UK to combat Russia’s ‘hostile online warfare’ by forcing internet firms to remove disinformation Posted: 05 Jul 2022 06:08 AM PDT The U.K. government is pushing to make “foreign interference” such as disinformation a priority offence under its proposed Online Safety Bill, forcing technology firms to remove contravening content shared by foreign state actors. The move follows recent legislation announced by the U.K. that is designed to deter foreign state actors seeking to “undermine U.K. interests,” which includes targeting attempts at foreign interference in elections with heftier maximum penalties. The proposed legislation comes shortly after MI5 warned that a Chinese agent with links to the Chinese Communist Party (CCP) had infiltrated Parliament, while subsequently the U.K. has also been ramping up its efforts to counter Russian disinformation and “troll factories” seeking to spread disinformation around the war in Ukraine. And then there was the prank call to Ben Wallace, the U.K.’s Secretary of State for Defence, from Russian hoaxers pretending to be Ukrainian Prime Minister Denys Shmyhal. It’s also worth noting that the U.K. is no stranger to disinformation controversy, perhaps most notably around Russia’s alleged interference in the 2016 Brexit referendum vote which saw the U.K. exit the European Union. A subsequent report found that the British government and intelligence agencies didn’t conduct any real assessment of Russia’s attempts to interfere with the referendum, despite the evidence on hand. Russia and ‘hostile online warfare’While today’s announcement applies to disinformation from all foreign actors, the U.K.’s Digital Secretary Nadine Dorries pointed specifically to recent “hostile online warfare” emanating from Russia. “The invasion of Ukraine has yet again shown how readily Russia can and will weaponise social media to spread disinformation and lies about its barbaric actions, often targeting the very victims of its aggression,” Dorries said in a statement published by the Department for Digital, Culture, Media & Sport. “We cannot allow foreign states or their puppets to use the internet to conduct hostile online warfare unimpeded. That's why we are strengthening our new internet safety protections to make sure social media firms identify and root out state-backed disinformation.” This essentially sees the U.K. draw closer ties between two new bills that are currently making their way through Parliament — the National Security Bill, which was introduced at the Queen’s Speech in May as a replacement to existing espionage laws, and the Online Safety Bill, which includes new rules on how online platforms should manage dubious online content. Under the latter bill, which is expected to come into force later this year, online platforms such as Facebook or Twitter would be required to take proactive action against illegal or “harmful” content, and could face fines of up to £18 million ($22 million) or 10% of their global annual turnover, depending on which is higher. On top of that, the government’s regulatory body Ofcom would have new powers to block access to specific websites. Priority offenceAs a so-called “priority offence,” disinformation joins a host of offences already covered in the Online Safety Bill, including terrorism, harassment and stalking, hate crime, people trafficking, extreme pornography and more. With this latest amendment, social media companies, search engines and other digital entities that host user-generated content will “have a legal duty to take proactive, preventative action” to minimize exposure to state-sponsored disinformation that seeks to interfere with the U.K. Part of this will involve identifying fake accounts that have been set up by groups or individuals representing foreign states, with the express purpose of influencing democratic or legal processes. It will also include the spread of “hacked information to undermine democratic institutions,” which — while not entirely clear — may include accurate content that has been surreptitiously procured from the U.K. government or political parties. So this might mean that Facebook et al will be forced to remove content if it includes embarrassing reveals about prominent British politicians. But if we’ve learned anything over the past decade of managing user-generated content online, it’s that it’s incredibly difficult to do so at scale — and even then, it’s often not easy to tell whether a user is legitimate or a bad actor employed by a foreign government. Faced by the prospect of gargantuan fines, it’s a challenge that could see a lot of legitimate online content or accounts caught in the firing line as internet companies struggle to comply with the legislation. |
| Maolac pours new funding into superfood mimicking breast milk health benefits Posted: 05 Jul 2022 06:02 AM PDT Inspiration for a new company can come from many different places. For Maya Ashkenazi Otmazgin, a biomedical engineer, it was while nursing her first child that she got the idea for harnessing the health benefits of breast milk, but in food and wellness supplements for adults. "I wondered why we were not understanding the proteins inside breast milk and trying to find bioequivalents in other sources," she told TechCrunch. "Breast milk is the 'gold standard' for nutrients, and grownups are being deprived of one of life's greatest resources."  Maya Ashkenazi Otmazgin, CEO and co-founder of Maolac Image Credits: Maolac She teamed up with Dr. Ariel Orbach and Eli Lerner in 2018 to form Maolac, an Israeli food tech startup focused on creating a superfood by extracting proteins from bovine colostrum or plant-based analogs. Together, the company's team put together a library of sorts of over 1,500 known bioactive proteins in human breast milk. They then identified that bovine colostrum is one of those "other sources" that has over 400 homolog proteins with over 95% biosimilarity with human breast milk. Colostrum is a nutrient-rich substance that is present in the milk of mammals for the first few days after giving birth. It is often discarded at dairies, which accounts for more than 5 billion liters of waste per year, Ashkenazi Otmazgin said. She also touts that the company is the first to "identify and extract the functional proteins from bovine colostrum" and make functional milk protein mixtures from that colostrum, using a proteomics discovery platform and computational biology that could be used for different immune-boosting applications. The milk protein mixture looks like a white powder that is digested in the human body similarly to breast milk and is suitable to add to food, even cooked foods like pasta, without losing functionality, Ashkenazi Otmazgin added. Maolac's mixture was also proven to produce higher overall efficacy at lower dosages. Competitors in the space are charging $500 per kilogram, and Ashkenazi Otmazgin says her company will charge similar for its product, but Maolac can deliver better efficacy at a fraction of the unit economics. Maolac is pre-revenue at this point and working on its first product line of anti-inflammatory aids, one for athletes to reduce muscle strain and improve recovery time, and one to improve elderly mobility. Ashkenazi Otmazgin expects these products to hit the market in 2023. She also claims the market potential for functional ingredients is huge, about $22 billion per year. Helping to accelerate the products is a new $3.2 million seed round that was closed in January. OurCrowd led the investment and was joined by the Strauss Group's Kitchen FoodTech Hub, the Food Tech Lab, Ventures Israel, NAOMI Investments and Mediterranean Towers Ventures. The investment boosts the company's total funding to just over $4 million. “The idea of transforming the first, nutrient-rich milk of cows that have just given birth into a source for human protein is a stroke of pure genius," OurCrowd CEO Jon Medved said in a written statement. "Billions of liters of bovine colostrum are discarded each year. Maolac takes this waste and creates a product of huge potential benefit to millions at a time when the world is desperately searching for new sustainable sources of protein. The company is a perfect example of the circular economy in action.” The new funding enables Maolac to build a pilot facility that will feature small-scale production capabilities of about 100 kilograms per month and create analytics and samples for customers and clinical trials. Ashkenazi Otmazgin also plans to add to the company's team of 12 employees. In addition, the company is currently working on getting regulatory approval in both the U.S. and Europe and is in discussions with food and supplement companies in Israel and dairy companies around the world. |
| Tesorio’s tools aim to help businesses automate payments collection Posted: 05 Jul 2022 06:00 AM PDT Although finance teams ultimately control budgets within their companies, investment in technology under the chief financial officer’s purview had been limited — at least until recently. That’s the assertion of Tesorio CEO Carlos Vega, who observed that, prior to the pandemic, most cash management processes had been run in spreadsheets and Word documents. “Cash is becoming the number one priority for all organizations. The industry's main competitor is the inertia of doing it the old way, despite it being manual, error-prone, and highly inefficient … All of a sudden, [tools like automation] have gone from vitamin to painkiller,” Vega told TechCrunch via email. “At current inflation rates, companies are losing over 2% in real terms every 90 days they sit on their receivables. That may not seem like much, but for a mid-market business with a $10 million outstanding receivables balance, that's costing them $210 per quarter or the equivalent of two employees for a year.” Of course, Vega has a product to promote — Tesorio sells automation solutions designed to help customers manage their accounts receivables. But at least one source supports his claim that automation can transform accounts receivable workflows for the better. In April 2022, American Express and Pymnts.com published a survey that found that about two-thirds of firms that have automated accounts receivable processes report benefiting from improved days sales outstanding (a measure of the average number of days that it takes for a company to collect payment after a sale has been made), while about half said that they achieved lower delinquency rates. “Historically, the account receivable process has been driven by tribal knowledge within the accounting team,” Vega said. “They ‘know’ based on personal experience that a certain customer always pays ‘X’ days late and another customer breaks their promise-to-pay dates, while another set of customers can be relied upon to pay early when asked to do so. If someone leaves the company or is out on vacation, this data is lost.” Tesorio attempts to capture this knowledge using AI models that look across a customer’s payment history and predict when, exactly, they’ll pay. Vega co-launched the company in 2015 with Fabio Fleitas, who he met while studying business at the University of Pennsylvania’s Wharton School. Tesorio was originally focused on supply chain financing, helping businesses save by paying their small- and medium-sized business vendors early. But a year later, the startup pivoted to “directly serving the companies getting paid,” in Vega’s words. Investors seemingly favor the move. Today, Tesorio closed a $17 million Series B round led by BAMCAP Ventures with participation from Madrona Venture Group, First Round Capital, and YouTube CEO Susan Wojcicki and her sister, 23andMe co-founder and CEO Anne Wojcicki. Floodgate, FundersClub, Hillsven, Mango Capital, Carao Ventures and Xplorer Capital also contributed, bringing Tesorio’s total raised to $37.6 million.  Businesses can use Tesorio’s platform to automate parts of their accounts receivables workflow. Image Credits: Tesorio “I spent about a decade working in finance, most recently at Lazard investment banking in Latin America. I co-founded a factoring company as a side business to finance small- and medium-sized business receivables. However, it felt like payday lending for business and wanted to find a better way to help companies with their cash flow,” Vega said. “In March 2017, [the modern] Tesorio was reborn with Couchbase and Veeva Systems among our first three customers.” Tesorio customers can connect their enterprise resource management and customer relationship management systems to the platform to train the aforementioned payment prediction AI models. Training takes about 30 days, with setup averaging around 5 days, Vega says. “The models are … able to train themselves by looking across our entire dataset of anonymized invoice history, covering billions in transactional volume, to further refine and improve its forecasting accuracy,” Vega added. “If companies can get paid when they expect it, their cash flow becomes more predictable so they can plan their growth better, they become more resilient, and they can fulfill their own mission without relying as much on external sources of capital.” Tesorio also lets customers create email reminder templates and self-service payment portals. And on the back end, the platform hosts digital workspaces that allow teams to share notes and aggregate accounts receivable data in one place. From the workspaces, teams can also track metrics and monitor cash flow performance, either using out-of-the-box reports or building their own from scratch. Plenty of vendors compete for business in the accounts receivables management space. There’s Upflow, Tipalti, and Quadient-owned YayPay, which offer software-as-a-service products focused on collecting money from outstanding invoices. Yaydoo aims to simplify collections more broadly. Another startup, Churpy, recently raised $1 million to help enterprises reconcile and manage payments across Africa. An outstanding challenge for Tesorio and its competitors is convincing companies that they need the software. It’s a hurdle in any industry, but particularly finance, where teams are likely to perceive their processes as sufficiently modern. According to a study by Billtrust, while 86% of accounts receivable teams rate their department as “very” or “somewhat” modernized, 40% don’t offer self-service capabilities while over 60% haven’t digitized a majority of their invoices. Economic headwinds might help Tesorio’s case, Vega believes. While the startup isn’t yet cash-flow positive, Vega claims that it has over 130 customers, including Slack, Box, Twilio, GitLab and Bank of America. “The funding follows a third consecutive year of triple-digit revenue growth. We expect to continue the strong growth trend over the next two years, especially with the market's renewed focus on cash flow,” Vega said. “Although the current economic climate with inflation and higher interest rates has given pause to decision makers with regards to spending, it actually puts a major, positive, spotlight on the value of Tesorio. In a world where cash is king and the cost of capital is no longer nominal, having a product like Tesorio that enables an organization to more effectively free up and manage its cash is more critical than ever.” Vega says that the proceeds from Tesorio’s latest financing will be put toward expanding the company’s go-to-market efforts and product development, and growing its team from “just north of 50” employees to around 90 within the next year. |
| European parliament backs ‘historic’ reboot to EU’s digital rulebook Posted: 05 Jul 2022 05:01 AM PDT The European Parliament has given a final stamp of approval to two major pieces of regulation which will update the EU’s rules for digital businesses. The Digital Markets Act (DMA) will introduce new ‘ex ante’ competition rules for gatekeeping tech giants to ensure markets are fair and open; while the Digital Services Act (DSA), which applies more broadly — to services and platforms both large and small — will set governance rules around the handling of illegal content and products, as well as dialling up broader accountability on larger platforms which have extra responsibilities under the framework. The incoming regulations were proposed by the Commission at the end of 2020 so adoption has been swift — reflecting broad consensus by lawmakers around the bloc on the need for tougher and tighter rules for online services. Today’s plenary vote of the parliament follows political agreement on the two files reached between the EU’s co-legislators earlier this year — back in March for the DMA; and April for the DSA. You can read our earlier coverage of those political deals — which is the core of what the parliament has confirmed its backing for today — here: The regulations are expected to start applying early next year after the formal adoption process is completed. The European Commission, which drafted the laws, welcomed the parliament’s formal adoption of the files — with internal market commissioner, Thierry Breton, dubbing the “landslide” vote “historic“. The parliament voted 588 in favor of the DMA; while 539 MEPs backed the DSA.
Commission EVP Margrethe Vestager also put out a statement — lauding what she described as a “global first”:
From here, there are just a few steps left in the EU’s lawmaking procedure: Notably, formal approval of the texts by the Council — after which they will be published in the EU’s official journal, coming into force 20 days later (so the expected timeline for adoption is the fall; although, as noted above, application of the laws won’t start until 2023 — with some DSA provisions having a longer implementation period).
Enforcement resourcing questionsThe Commission will be taking up a major enforcement role for both regulations — as the sole enforcer of the DMA and the lead for so-called very large online platforms (aka VLOPs) for the DSA. Under the DMA fines for breaches can scale up to 10% of a tech giant’s global annual turnover — or even as much as 20% for repeat offenders. While penalties under the DSA can be up to 6% of global annual turnover. So the stakes are high for all concerned. Many questions remain over enforcement resourcing, and how generally fit for purpose and ‘fleet of foot’ the EU’s executive will prove to be for such a massive new regulatory duty. Likely in response to some of this concern, Breton has offered a “sneak peak” of how the Commission is approaching its new oversight duties. Writing in a blog post published on LinkedIn today, immediately after the parliament vote, he said the Commission will set up dedicated teams within the EU’s Directorate General for Communications Networks, Content and Technology (aka, DG Connect) — which will be “organised around thematic domains”; including “the societal aspects, the technical aspects, and the economic aspects”. “Issues such as risk assessments and audits will be handled by the societal issues team,” he writes in the post, offering a few examples of how these teams’ duties will shake out. “The technical team will take responsibility for issues such as interoperability of messenger services or the use of non-fungible tokens for product tracing, or the development of standards supporting the new rules. “Finally, the economic team will cover DMA-related unfair trading practices, such as data accessor so-called FRAND conditions; or ensuring respect to the DSA-related liability exemptions or ‘know-your-business customer’ rules for marketplaces.” He also notes that the teams will work closely together to avoid too siloed a response to platforms that he acknowledged “usually” create cross-cutting challenges — also with a "program office" taking a coordinating role and dealing with “international issues and litigation”. So the Commission is clearly preparing for tech giants to push back against its centralized enforcement — and perhaps also to enlist their own politicians to use high level channels to complain (and potentially retaliate; tariffs anyone?) on their behalf. The EU has said it will boost staffing levels next year and in 2024, and seek to ramp up internal technical expertise, to meet the demands of the enforcement challenge — in addition to redeploying some existing staff and resource to the new duties. But in the blog post Breton said he expects the dedicated DMA and DSA DG Connect team to have more than 100 full time staff following this recruitment drive. Nonetheless, questions are likely to remain over whether that level of resource will be enough for the incoming major workload attached to regulating scores of large (and some truly massive) platforms. The Commission is partially recouping the cost of staffing DSA enforcement by levying a fee on larger platforms and big search engines. Breton’s post notes this without specifying the fee platform giants will have to pay — but reports have suggested platforms were successful at lobbying to shrink how much they’ll have to shell out for being policed. So the resourcing concern seems likely to stick around. Another new component of the EU’s oversight of platforms which Breton does include in his sneak peak involves establishing what he refers to as “a high-profile European Centre for Algorithmic Transparency” — which the EU wants to underpin the DSA’s algorithmic transparency requirements for VLOPs. “This new Centre will attract world-class scientific talent in data science and algorithms that will complement and assist the enforcement teams,” he suggests. Again, though, whether the Commission will be able to pay enough to attract the necessary talent for the scale and complexity of grappling with platforms’ black boxes remains to be seen. At a press conference following the parliament vote, rapporteurs for the DMA and DSA, MEPs Andreas Schwab and Christel Schaldemose, were asked about resourcing — and whether they’re confident the Commission will both have enough staff, and be able to attract the level of technical expertise necessary, to effectively oversee platforms and services. They responded by saying they hoped enough resource would be marshalled — while not denying the scale of the challenge facing the EU’s executive as it takes up this new oversight role. “The key question now [for the DMA] — it’s about how the Commission can take up the challenge and enforce this law for the first time only alone. Because competition policy cases have always been done in comparison and in cooperation with Member States. And we don’t know yet but we believe that we can managed this if we use the rules that the European Commission has at its hands to hire people that are able,” said Schwab, singling out the DMA as the bigger of the two challenges. The Commission itself has also suggested it won’t be easy to rein in Big Tech — with commissioner Vestager hinting back in February it’s expecting the world’s most powerful tech platforms to try to circumvent the incoming ex ante rules, rather than neatly falling in line. On talent, Schwab suggested there will be a pool of willing qualified experts for the Commission to draw from — name-checking the likes of Facebook whistleblower Frances Haugen, who has previously floating the idea, in public discussions with lawmakers on how best to regulate platform power, that staffers who become concerned about algorithmic impacts they’re witnessing as part of their jobs inside tech companies could, ultimately, find a perch in external oversight agencies and repurpose their insider knowledge for a greater good. “I have no doubt that with, not only Frances Haugen and other examples, there will be more and more people in the world and also in gatekeepers that will say listen, hey, why shouldn’t we make these markets better and fairer?” argued Schwab. “Therefore I am optimistic that not only will the Commission find the right people, and will also bring in more people to enforce these systems… but also the gatekeepers and people that know about algorithms and technology will take responsibility themselves and will speak out and that that altogether will help to create more transparency.” But, in budget discussions, Schwab said the parliament has been asking for 150 people — purely for DMA enforcement. So MEPs appear to be pushing for more staff than the Commission itself. “On enforcement, in the DSA we’re saying that the very large online platforms the Commission will have the power to enforce and we have also provided the Commission with funds for this — we agreed on a supervisory fee — because we expected that it could be difficult otherwise to have enough qualified staff to help the enforcement,” added Schaldemose. ” I guess that with these funds and the structure in place we will see that the Commission will be able to deliver. “And — if not — we will — I will monitor them from here and I will ask questions and I will make sure that they are doing what we expect them to do. But I’m optimistic because, I have to say, talking to the Commission — and especially the two commissioners responsible, Vestager and Breton, they’re very eager to start working. “They really want to do something for the very large online platforms… The rest is up to Member States, and then we have the classical structure with the country of origin principle in place. So I guess with the news structure it will be better. We have the funds and of course the Commission will have to compete with all the big companies for the good staff but that’s how it is.” Asked specifically how many people the rapporteurs believe the Commission needs to oversee the DSA and the DMA, Schaldemose pointed to initial Commission estimate, of 70 people — but Schwab reiterated the parliament’s recommendation that many more staff than that will be needed. “In the end, the DMA will work in a structure that on every core platform service of every gatekeeper there will be probably a need to have a team — maybe not on every core platform service at the beginning but nearly on every one,” he suggested. “That means you need a case handler, you need a manager, you need a data analyst — so you need easily 10 people for one file; one per gatekeeper, per core platform service. And that means that the 150 [staff looks inadequate].” “Therefore I think this is the right demand from the side of the parliament,” he added. “It’s our task here to make these laws be respected by those companies that are targeted with it.” On application of the DMA, and the looming designation process — whereby the Commission will need to do the work to confirm a gatekeeper core service does fall in scope — Schwab said the parliament expects the gatekeeper designation process to commence on March 1, 2023, following the six month implementation period after the law is published in the EU’s Official Journal. But he said the parliament also expects the Commission to have undertaken preparatory work — so that, by mid March 2023, it come could with the first designation. Giving a hint on which tech giant will have the ‘honor’ of being first in line for the DMA rules to apply, Schwab suggested it will “definitely be one of the GAFAM companies; maybe without the ‘M’ — referring to the acronym that’s used to refer collectively to Google, Apple, Facebook, Amazon and Microsoft (but here he’s de-emphasizing Microsoft). “Maybe you start at the beginning — or in the middle; it will be very easy,” he went on, suggesting he’s expecting either Google (Alphabet) or Facebook (Meta) to be at the front of the queue. “But the key question — or the more difficult question will be — what core platform service will they choose first from one of these companies? And that’s, I think, a very open question.” This report was updated with additional reporting from the press conference |
| American Robotics’ owner set to acquire fellow drone firm, Airobotics Posted: 05 Jul 2022 05:00 AM PDT Some drone industry consolidation this morning as Ondas Holdings, the company behind Waltham, Massachusetts–based American Robotics announced its plans to acquire Airobotics. It's admittedly been a few years since we covered the latter, when the Israeli firm announced a combined $28.5 million A/B round. To date, the company has raised $130 million since its 2014 founding. American Robotics, meanwhile, was acquired by Ondas in August of last year. The new deal should prove a good fit, as both companies play similar roles within the broader industrial drone space. While there's bound to be a fair bit of redundancy, Ondas notes that such a merging would give the combined companies a better global foothold in a rapidly expanding category.  Image Credits: American Robotics The companies write in a joint press release,
American Robotics' primary play is Scout, a fully autonomous drone system that can operate on remote sites without direct human oversight. Similarly, Airobotics offers an all-in-one autonomous drone solution. The company's Optimus drone launches out of an automated docking space that serves as a base and transmits data to the quadcopter. Applications include emergency response, mapping and surveying. “American Robotics and Airobotics have matured different elements of the DIB ecosystem, and this business combination allows for an accelerated offering set that furthers our leadership position in a broader set of market opportunities,” American Robotics CEO Reese Mozer tells TechCrunch. “Said another way, in the near term we will learn from each other to further mature our respective systems. Longer term, the Scout System and the Optimus System will be different models existing within the same product family, with each specializing in a different set of use cases. See the attached infographic highlighting the primary differences between the two current platforms.”  Image Credits: American Robotics The joint companies will maintain operation in the U.S. and Israel, and will have an office in Asia. Mozer expects Airobotics to maintain its existing staff. The brands, meanwhile, will remain differentiated in the short-term, with Airobotics eventually being rolled into the American Robotics banner. Based on current stock prices, the deal is currently estimated at $18.4 million. Its deal is expected to close in Q4. |
| Twitter sues India’s government over content takedown orders Posted: 05 Jul 2022 03:26 AM PDT Twitter has sued the Indian government to challenge some of its block orders on tweets and accounts, further escalating the tension between the American social giant and New Delhi. In its lawsuit, filed Tuesday in Karnataka High Court, Twitter alleges that New Delhi has abused its power by ordering it to arbitrarily and disproportionately remove several tweets from its platform, a source familiar with the matter said. The lawsuit follows a rough year and a half for Twitter in India, a key overseas market for the firm, where it has been asked to take down hundreds of accounts and tweets, many of which critics argue were objectionable because they denounced the Indian government’s policies and Prime Minister Narendra Modi. Twitter moved to the court after New Delhi threatened to open criminal proceedings against its chief compliance officer in India, a person familiar with the matter said. A Twitter spokesperson declined to comment. Twitter has partially complied with the requests over the past year and a half, but sought to fight back many of the challenges. Under India’s new IT rules, which went into effect last year, Twitter has little to no room left to individually challenge the takedown orders and noncompliance may result in legal actions against its compliance officer in the country. The new IT rules required any large social media firm to appoint chief compliance officer, nodal contact person and resident grievance officer in the country to address local concerns. The tension between the two was apparent on May 24 last year, when Delhi police, controlled by India's central government, visited two offices of Twitter — in the national capital state of Delhi and Gurgaon, in the neighboring state of Haryana — to seek more information about Twitter's rationale to label one of the tweets by ruling partly BJP spokesperson as "manipulated media." Delhi police said at the time that it had received a complaint about the classification of the spokesperson’s tweet and visited the offices to serve Twitter India's head a notice of the inquiry. In a statement, the police said Twitter India's managing director's replies on the subject had been "very ambiguous." Twitter at the time described the episode as “intimidation.” The company has “concerns with regards to the use of intimidation tactics by the police in response to enforcement of our global Terms of Service, as well as with core elements of the new IT Rules," it said. Twitter India managing director resigned from the firm last year. Twitter is not the first tech giant to sue the Indian government. WhatsApp sued New Delhi last year, challenging new regulations that could allow authorities to make people's private messages "traceable," and conduct mass surveillance. It’s unclear if the new lawsuit will have any impact on Twitter’s proposed acquisition by Elon Musk. Musk’s Tesla has been attempting to enter the Indian market for several years but wants the government to let it first sell and service imported cars. |
| Sequoia Capital China raises $9B amid cooling tech sector Posted: 05 Jul 2022 02:08 AM PDT Sequoia Capital’s China affiliate has pulled in $9 billion in fresh capital to back the country’s tech companies across all stages, The Information first reported. The raise arrived at a time when global investors are reevaluating risks in China amid a COVID-hit economy and an ongoing regulatory crackdown on the country’s internet upstarts. The fresh capital came from pensions, endowment funds and family offices from the U.S., Europe, the Middle East and Southeast Asia, Bloomberg reported. The firm received more than $12 billion in a 50% oversubscribed round, but went ahead with the higher end of its original target, according to a person with knowledge. With the new financial injection, the firm will continue to bet on Chinese companies focused on deep tech, healthcare and consumer tech, according to SEC filings. The capital will be allocated to four separate funds targeting businesses across all stages –from seed, venture and growth to “expansion”, which are those deemed market leaders in an industry. The storied investment powerhouse has funded over 900 companies in China, including household names like Pinduoduo and Meituan, since it launched under Neil Shen’s helm in 2005. Sequoia Capital China declined to comment. |
| Google-backed Glance to launch in US within two months Posted: 05 Jul 2022 01:25 AM PDT Glance, a subsidiary of adtech giant InMobi Group, is planning to launch its lockscreen platform on Android smartphones in the U.S. within two months, a source familiar with the matter told TechCrunch. The startup is engaging with wireless carriers in the U.S. for partnerships and is gearing up to launch on several smartphone models by next month, the source said, requesting anonymity as the deliberations are ongoing and private. Glance, valued at around $2 billion, serves media and current affairs content and casual games on Android handsets' lockscreens. The service, which has amassed presence on about 400 million smartphones in Asian markets, is building a “premium offering” for the U.S., where individuals have higher propensity to pay for digital services, the source said. A spokesperson for Glance declined to comment Tuesday. The startup said in February that it planned to expand globally in the coming years. The tie-up with U.S. carriers is a shift in strategy for Glance, which maintains direct relationships with nearly every Android smartphone maker in Asia. But in the U.S., carriers command most of the smartphone sales and handsets are sold bundled with mobile data plans. Three-year-old Glance is largely credited for identifying an opportunity to serve content on the lockscreen, prized real-estate which monetization has enabled smartphone vendors to boost their revenue in recent years. The startup personalizes content feed on the lockscreen based on users’ interests, prompting them to engage deeply with content. In a move that further cemented Glance’s model, Apple said last month that it will be revamping the lockscreen on iOS with widgets, real-time info and other personalization features. The fast adoption of Glance has helped it attract several high-profile investors, including Google and Jio Platforms, India’s largest telecom carrier with over 420 million subscribers. In recent months, the startup has been testing live commerce on its platform and is also engaging with television vendors to bring Glance to their customer TV operating systems. Glance is also a core offering in Pragati OS, the custom Android operating system developed by Google and Jio Platforms for affordable smartphones. |
| McEasy is digitizing Indonesia’s logistics, transportation and supply chain industries Posted: 05 Jul 2022 01:14 AM PDT In Indonesia, many logistics providers still use old-fashioned systems to track their operations and fleets, including pen-and-paper ledgers. McEasy wants to change that. The startup, which develops software-as-a-service solutions for the logistics and supply chain industry, has raised $6.5 million in Series A funding led by East Ventures. The startup was founded in 2017 by Raymond Sutjiono and Hendrik Ekowaluyo, and now serves more than 200 clients, including Cleo Pure Water, KMDI Logistics, MGM Bosco Logistics, Rosalia Indah and the Tanto Intim Line. Its software and smart tracker, called Vehicle Smart Management System, has been adopted by users like passenger buses, freight forwarding services and refrigerated vehicles used to transport pharmaceuticals, meat, seafood, dairy and frozen foods. Other products include Mobility Software-as-a-Service to digitize vehicles for real-time tracking, solutions for improving business efficiency and an open API ecosystem. The new capital will be used on developing products for SMEs and establishing a stronger foothold in Indonesia's Tier 2 and Tier 3 cities. McEasy says it has grown more than 12x in the past 18 months. Sutjiono told TechCrunch that he met and became best friends with Ekowaluyo while both were studying mechanical engineering at Purdue University. The two then worked at Ford in structural engineering. Sutjiona said Ekowaluyo is an expert in structural design and program management in cars, while he focuses more on engine electronics, system control and data handling. After returning to Indonesia, the two started McEasy to produce hybrid motorcycles. But after researching the market, they realized that the market was shifting to digital instead of hybrid bikes, so they came up with a smart tracker for motorcycles. But because the trackers were cost-prohibitive, they decided to do another shift to B2B logistics and automotive. "B2B logistics players were still using the conventional method, and we wanted to make a digital solution to improve the business process," said Sutjiono. "The logistics sector was chosen because of its promising potential and growth during the pandemic. Indonesia has more than 22.5 million units of passenger vehicles and more than 5 million units of freight cars. The founders say that more than 85% of businesses in the transportation and supply chain sectors still use paper ledgers for their operations, including managing drivers, expenses, fuel consumption and route efficiency. To convince people to move from their legacy systems to McEasy, it offers a free trials and is growing its operations through word of mouth." In a prepared statement, East Ventures co-founder Willson Cuaca said, "McEasy has managed to accelerate positively in this post-pandemic environment. They combine the best of both worlds – logistics and technology – to elevate their offerings, strengthen their national footprints, and maintain profitability levels." |
| Onomondo secures cash to expand its wireless network for IoT devices Posted: 05 Jul 2022 12:01 AM PDT Onomondo, a startup offering a dedicated wireless network for internet of things (IoT) devices, today announced that it raised $21 million in a funding round led by Verdane with participation from Maersk Growth, People Ventures, and The Danish Growth Fund. In an email, CEO Michael Karlsen told TechCrunch that the new cash will be put toward productization, go-to-market efforts, and marketing as Onomondo scales its team from 50 people to around 100 by the end of the year. Karlsen co-founded Onomondo in 2012 alongside Henrik Aagaard with the goal of, in Karlsen’s words, “expanding the capabilities of what a network can solve for IoT.” Onomondo built a wireless network for IoT devices on the back of hundreds of cellular providers that operates in over 180 countries. Prior to co-launching Onomondo, Karlsen was the CFO at indie game studio Playdead and co-founded Tel42, a Danish network wholesaler on the Danish Telenor network. Aagaard was the CTO at Tel42 until it was acquired by IoT services provider Greenwave Systems. “Our solution is unique to the market as … we've built and operate our own network core from the ground up, which offers end-to-end control and visibility from any cellular antenna across the world to any cloud,” Karlsen told TechCrunch in an email interview. “We have built an IoT tech stack with a set of unique power tools on top, which makes the service fundamentally different from anything else available on the market today.”  Image Credits: Onomondo A network reserved for IoT devices isn’t a novel concept. London-based FloLive built a cloud-based solution to stitch together private, local cellular networks for IoT connectivity. Helium and Kepler Communications eschewed cellular for other technologies, such as miniature satellites and “LongFi,” to help IoT devices talk to each other. Major players like Comcast, SoftBank, Orange, SKT, KPN, Swisscom, Verizon, Vodafone were at one point creating or maintaining nationwide IoT networks, as well, not to mention Amazon and Samsung. Dedicated IoT networks offer several advantages over traditional cellular, Karlsen argues. For example, mobile phone networks aren’t typically battery-efficient because devices on the network must communicate frequently with cell towers. By contrast, networks like Onomondo are optimized for long-range data transfers and very low power consumption, and — at least in Onomondo’s case — only charge for data when devices are active. “The IoT market has almost been conditioned to think of connectivity as something that needs to be designed around and ‘made to fit,’ which has become the status quo and normalized,” Karlsen said. “So, when we tell our customers they can also use the network to double their devices’ lifetime, half battery consumption, lower data consumption by 90%, drive down debugging time, cut costs and increase stability with nothing but a network change, that's when people really start to listen and realize the power that lies in controlling the full network architecture and tailoring that to IoT.” When a customer installs one of Onomondo's SIM cards in their IoT devices, information about each device is sent to the cloud. As the devices move from one country to the next, the platform automatically routes the connection through the local network infrastructure. The device doesn't need to update itself or share sensitive data with local networks, and the device owner stays in control, Karlsen claims. Pål Malmros, a partner at Verdane, said that companies in “asset-rich” industries like transport, manufacturing, and logistics are the target for Onomondo’s technology. “[These industries] have long attempted to harness IoT to manage supply chains, improve automation, and drive efficiency,” he told TechCrunch in an email Q&A. “By redesigning existing connectivity architecture to create a single virtualized IoT network, without reliance on the traditional operator network stack, the Onomondo team is bringing a fresh, next-generation approach to the challenges the IoT market continues to face.” It’s a tough market indeed. In January, Sigfox, a French IoT startup that had raised more than $300 million, filed for bankruptcy protection as the pandemic sharply depressed sales. The company blamed the global chip shortage, in part, for squeezing the larger electronic components market and — by extension — the demand for IoT device networks.  Image Credits: Onomondo But Karlsen insists that Onomondo remains resilient, onboarding around 50 new customers per quarter. Current customers include Bosch, Carlsberg, and Maersk. “Business in the first quarter of 2022 was solid and we saw an x4 increase in new customer intake as well as continued triple-digit yeasr-over-year growth within our existing customer base compared to 2021,” Karlsen said. “With this new funding, we are looking to meet our planned projection of tripling our ARR twice over the next two years … [It’ll] allow us to accelerate our strategy and capture more market share predominantly in Europe.” To date, Onomondo has raised more than $26 million in capital. |
| Climentum backs startups with $157M to ‘accelerate Europe’s green transition’ Posted: 05 Jul 2022 12:00 AM PDT Despite the economic downturn and perilous position many startups find themselves in, some industries are seeing continued momentum in terms of inwards investments — one of those is climate tech. In 2021 alone, some $40 billion was invested across more than 600 deals, a trend that is seemingly continuing into 2022 with significant capital plowed into startups combatting the climate crisis. In tandem, we’ve seen a slew of new funds emerge dedicated to the cause, positioning fledgling climate-focused companies well to flourish against a backdrop of scale-backs and layoffs elsewhere in the startup world. The latest such fund to emerge on the scene is Climentum Capital, which today announced the first close of its inaugural €150 million ($157 million) fund, which is designed to help curb CO2 emissions and “accelerate Europe’s green transition,” the company said. TechCrunch caught up with founding partner Yoann Berno to get the lowdown on what Climentum is striving to achieve, and how it sets itself apart from the incumbents in the space. Sustainable investmentThe driving force behind Climentum’s investment philosophy is Europe’s new Sustainable Finance Disclosure Regulation (SFDR), which came into force last year. SFDR is designed to improve transparency in the sustainable investment sphere, so finance companies are more accountable for specific claims they make around their sustainability credentials — it’s partly to do with preventing greenwashing. Climentum, specifically, is focused on being a so-called “Article 9 fund,” which means that it’s making sustainable investments and carbon emission reduction a core investment objective. And in the process, it gives the fund’s backers access to all the relevant data they need to report on their own ESG (environmental, social, and governance) targets. Climentum’s operations are spread across three core Northern European hubs in Denmark (Copenhagen), Sweden (Stockholm), and Germany (Berlin), with backing from a host of Nordic pension funds and Europe-based conglomerates. This includes chemical giant BASF’s venture capital arm, which sees Climentum as a conduit to achieving its own climate-focused goals. “We are backed by BASF which sees in us a strategic investment to get closer to their decarbonization objectives, and a source of intel to guide their corporate strategy in the coming decade,” Berno continued. Berno was also keen to stress that two of Climentum’s five founding general partners are female (one of whom has yet to be formally announced), which he sees as a positive differentiator in an industry dominated by men. “We are 40% female, which is as good as it gets in the industry — [it’s] still not at full parity, but we will continue pushing our gender equality agenda,” Berno explained.  Climentum Capital: Morten Halborg, managing partner (Copenhagen); Yoann Berno, investment partners (Berlin); Dörte Hirschberg, investment partners (Berlin); and Stefan Mård, impact partner (Copenhagen). One more partner is to be announced, based out of Stockholm. Climentum has currently only secured around half of the targeted €150 million for its first close, but it expects to close the full fund by the year’s end. In the longer term, it’s looking to make some 25 investments across Europe from late-seed stage to series A, with individual figures ranging from around €1 million to €5 million. The six core focus categories that Climentum will target for reducing CO2 will be next-gen renewables; food and agriculture; industry and manufacturing; buildings and architecture; transportation and mobility; and waste and materials. Climentum said that it is already close to finalizing three investments which are currently at the due-diligence stage, which are focused on material recycling, alternative protein production, and insect farming. So far, so good. But in a field teeming with climate-focused investors and a seemingly insatiable appetite for startups promising to help repair Planet Earth, Climentum is touting tough thresholds in terms of how the team benefit financially from their collective investments. In essence, it has to overcome two stringent hurdles as part of what it’s calling a “dual carry” investment model. “The first hurdle is financial with a competitive return target of three-times over the fund’s lifetime,” Berno said. “The second [hurdle] is a [climate] impact hurdle with an ambitious CO2 emissions reduction target, which will be measured at the portfolio level at the end of the fund.” In other words, Climentum is measuring success not purely on how much of a return they get for their backers, but how much of an impact their investments have on their climate goals. It’s also important not to overlook the strategic locations that Climentum has focused on. The firm is not only going where the policies and attitudes toward green technologies are among the strongest of anywhere else in the world, but also where there is already a significant climate-focused tech startup community. “Sweden, Germany, and Denmark are in the top five countries in the world in terms of forward environmental regulations and public mandate to accelerate the green transition,” Berno explained. “[And] the three capital cities are some of the most active startup hubs in Europe, with a disproportionate amount of climate tech startups.” A climate of changeIt’s also worth looking at the timing of Climentum’s fund launch, which looks pretty good from myriad standpoints. With growing pressure on the energy markets due to the war in Ukraine, and many countries trying to reduce their reliance on Russian gas, this bodes well for “alternative” energy sources, as well as technologies that promise to help nations reduce their energy consumption. On top of that, supply chain issues are causing a shortage of food such as protein, which places emerging startups focused on insect farming, for example, in a strong position. Moreover, the broader economic downturn also puts investors such as Climentum in a good position, including the terms they may now be able to agree with startups. “The current economic slowdown has stopped the euphoria on the VC market and caused a significant reduction in startup valuations and amounts deployed,” Berno said. “As an investor, we are liquidity provider to a market that desperately needs more liquidity to continue financing rapidly evolving innovation.” When everything is thrown together into a giant melting pot, it seems clear that now is as good a time as there ever has been for climate-tech startups to flourish. There is demand from consumers and corporations alike, while governments are cooking up policies that make society-wide green philosophies much more than a “nice-to-have” — any business that wants to function in today’s world needs to take its climate responsibilities seriously. “The climate tech companies that have a real solution to some of the world’s biggest problems already have pent up demand from consumers, corporates and governments,” Berno said. “This phenomenon justifies some of the high valuations which will be amplified by the demand for acquisitions from corporates desperate to meet their 2030 emission targets.” |
| Pina Earth gets seed backing to grow sustainable forestry carbon credits Posted: 05 Jul 2022 12:00 AM PDT YC-backed climate tech startup, Pina Earth, has closed a $2.5 million seed round of funding a year after being founded and a few months since it presented at the accelerator’s Winter 2022 Demo Day in March. The seed is led by Franco-German VC XAnge, with participation from London-based VC firm Nordstar, as well as a number of business angels and serial founders, including Gustaf Alstromer (partner at Y Combinator), Sundeep Ahuja (partner at Climate Capital), Lea-Sophie Cramer (founder at Amorelie) and Anselm Bauer-Wohlleb (Alasco, Stylight). As we reported back in February, when we took a first look at the Munich-based startup, Pina Earth is building an online platform for European forest owners to get certified to sell carbon credits — with a special focus on encouraging landowners to increase woodland biodiversity and future-proof their forests. That’s important as climate change increases risks to the survival of trees, with more droughts, forest fires, disease and other extreme weather predicted. But the startup’s premise is also that more sustainable forestry management can generate extra carbon credits for forest owners, too. As a first step, Pina Earth’s platform helps forest owners register their forest for carbon credits. It then sells, essentially, a high tech forest management service — supporting landowners to make adaptations to their forests, such as planting climate-resilient tree species, which should, over years, generate extra carbon credits vs if they did not undertake the sustainability-focused measures that will enable the forest to take up more carbon. The startup is using AI modelling to predict how climate change will affect the future growth of forests, combined with remote data capture to monitor customers’ projects and verify improvements to forests — to boost the quality of carbon credits. That’s also important given the proliferation of low quality or bogus carbon offset projects during the ‘greenwashing’ scramble over the last decade+, as companies have rushed to claim they’re taking steps to reduce their business’ climate impact — while, all too often, not actually taking meaningful steps. The reputation of offsetting as a climate change-fighting tool remains low — while tree-based offsetting attracts specific scepticism given the timescales involved and the difficulty of monitoring over the long haul to ensure the claimed carbon sequestration actually occurs — but given the scale of the challenge humanity is facing, to rapidly shrink carbon emissions in order to avoid climate disaster, offsetting will undoubtedly have some role to play in the mix of solutions. When we spoke to Pina Earth co-founder and CEO Dr. Gesa Biermann earlier this year, the startup was operating two pilot projects across 1,200 hectares in its home market of Germany and preparing for a commercial launch this year. Since then, she says it’s been focused on moving from initial pilot projects to expanding its reach in Germany. The commercial launch is still pending. “We have also recently signed new team members for key positions, in tech, forestry, and business,” she tells TechCrunch. “We are switching from initial pilot projects — which helped us develop our core technology — over to adding thousands more acres of forest projects to our pipeline. We are in private beta with the owners of the respective forests at the moment — testing key features before our public launch of the platform later this year.” On the product dev front, Biermann says the seed funding will be used for “critical steps in carbon project development include checking for eligibility of the project area, gathering data, calculating the carbon optimization potential and finally, project documentation”. “After having completed the process for our first projects, we are translating our learnings into replicable processes, automating the bottlenecks of carbon project development,” she continues. “We have already built software to forecast the effect of climate change based on a digital twin of the forest. Next, we aim to replace input traditionally requested from forest owners with third-party data sources to increase speed and independence. We are further expanding our carbon project toolkit, learning to simulate the effect of different types of forest adaptation methods in our software. This will help us address the needs of a diverse range of forest owners.” Asked if the startup is expecting to launch into additional European markets or would it need to raise again before it takes that step, she talks up the prospect of imminent expansion without offering a clear yes or no — suggesting it’s benefitting by being able to draw on its new European investors’ networks to “forge connections with key players”, before adding: “We are also being approached by both forest owners and project developers worldwide and are keen to bring our product to further regions. After all, over half of Europe's forests are vulnerable to climate risks — an urgent problem to tackle.” “Our priorities for the next 12 months are automating further parts of the carbon project development process, expanding to thousands more acres of forest in Germany and selling our first carbon credits to financially incentivize forest owners to adapt their forests to climate change. These priorities are guided by our mission: To offer landowners the most accessible way to get rewarded for making their forest climate-resilient.” Commenting on Pina Earth’s seed raise in a joint statement, Nadja Bresous, partner (Paris) and Astrid Moullé-Berteaux, associate (Berlin) of XAnge, said: “XAnge is proud to continue investing in climate tech and support European forest adaptation. Pina Earth's technology generates high-quality European nature-based carbon credits, for which demand will continue increasing. This investment is a contribution to protecting both the financial and the environmental value forests provide." While there are a number of other, more established startups focused on expanding access to carbon markets — such as US-focused SilviaTerra (now called NCX) — Biermann argues that Europe remains a “blue ocean opportunity” for forest carbon markets. “This is partly due to the challenge of a more fragmented ownership structure, meaning smaller sized carbon projects. Therefore, low entry barriers for forest owners, automation and efficiency are central to our product strategy,” she suggests. |
| Founder of auto giant Geely buys Meizu as smartphone demand weakens Posted: 04 Jul 2022 11:42 PM PDT Remember Meizu, the once-promising competitor to Xiaomi? The Alibaba-backed Chinese smartphone maker is making a comeback — in a way — as it gets acquired by the founder of Geely, China’s largest private automaker and Volvo’s parent comapny. China’s smartphone industry is notoriously competitive. Founded in 2003, Meizu has been making affordable, trendy Android-based smartphones that allowed it to gain brief moments of prominence at home and abroad. As of late, the phone maker’s market share in China has been marginal — 1% in Q4 2019, according to market research firm Counterpoint. But the firm is now taking another shot as Xingji Technology, a smartphone company launched by Geely’s founder and chairman Eric Li last September, acquired a controlling stake of 79.09% from it. Meizu will continue to operae as an “independent brand” following the strategic investment. Its founder Huang Zhang, also known as Jack Wong, will be involved as the brand’s “product strategy advisor.” The tie-up joins a raft of phone and auto makers working closer together and betting on a future where in-car control and handset operating systems are more integrated. Last March, Xiaomi created a subsidiary to make electric vehicles and pledged to spend $10 billion on the new business in the upcoming years. In the highly homogenous consumer device market, Meizu and Xingji aim to build “a multi-device, scenario-agnostic, and immersive” digital experience. Xingji was founded with a focus on premium smartphones, mixed reality and wearables. It’s hard to be too excite about another new phone brand at a time global economy is slowing down. Smartphone shipment worldwide is expected to slump 3.5% this year, according to market researcher IDC. And there’s ample competition. The upcoming Nothing phone, spearheaded by OnePlus’s co-founder Carl Pei, vows to be different with refreshing designs and affordability, but its success will hinge on actual execution. Xingji plans to release its first phone model by 2023 and sell 3 million units in the first year, Reuters reported earlier. Taking on premium-phone leaders Apple and Huawei, as well as aspiring players like Oppo, will be no small feat. |
strong, ambitious & global first rulebook of 
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