Aug
02

Digital identity startup Yoti raises additional £8M at a valuation of £82M

Yoti, the London startup offering a digital identity platform and app that lets you prove who you say you are when accessing services or making age-verified purchases, has raised £8 million in additional funding.

Backing the round is unnamed private investors, Yoti employees and Robin Tombs, the startup’s co-founder and CEO, who previously founded and exited online gambling company Gamesys. I’m told that the startup has had around £65 million in investment in total since being founded in 2014, the majority of which has been made by Tombs and another Yoti co-founder, Noel Hayden.

Noteworthy, Yoti says the injection of capital comes with a new valuation of £82 million, up from £40 million when Yoti raised £8 million about a year and a half ago. The caveat being, of course, that Tombs and Hayden have effectively helped to set that valuation from both sides of the table.

“The current identity system is broken, outdated and insecure; we still have to show physical identity documents simply to prove who we are,” says Tombs, explaining the problem Yoti has set out to solve. “But this results in us sharing an excessive amount of personal information, putting us at risk of identity fraud. Additionally, millions of ID documents are lost and stolen every year, and our online accounts are vulnerable to data hacks.”

Launched in November 2017, Yoti’s solution includes the Yoti digital identity app, which claims more than 4.7 million installs. It essentially replaces a traditional ID card or other paper proof of identity. Yoti also has various partnerships that sees organisations use its ID verification technology within their own apps and websites.

The idea is that Yoti can be used to prove your age on nights out, to check out faster when buying age-restricted items at a store, for safer online dating and other social interactions online or for accessing various business or government services.

The underlying system is granular, too: a company or organisation can ask to verify only certain aspects of your identity that you choose to share on a need-to-know basis.

“At Yoti we believe in putting people in control to share less personal information and enabling businesses to know who they are dealing with using less, higher-quality verified data,” says Tombs. “For instance, someone could use Yoti to prove their age to buy age-restricted goods, but only share that they are 18+ to the business. This helps protect the individual’s personal data and privacy, whilst giving the company the details they need to be compliant. Everyone wins.”

Yoti can also potentially be used to help children be safer online by reducing the number of fake accounts and ensuring age guidelines are more strictly adhered to.

“As a parent, it’s very concerning just how easy it is for young kids to create social media accounts and access explicit age-restricted content online unchecked,” he says. “It’s too easy to create a fake profile online and give false details, so we can’t be confident about who we are meeting online.”

More broadly, Tombs argues that a digital identity platform can also support social inclusion for people who otherwise have no form of identity at all. “Over 1.1 billion people around the world don’t have any form of identification; leaving them socially excluded, left behind and unable to access essential services. We want to help fix these issues. We believe everyone, no matter who they are or where they’re from, deserves a safe way of proving their identity,” he says.

To that end, Yoti has formed a variety of partnerships spanning retail, government, travel and social media. These include Heathrow Airport, which is working with Yoti to explore biometric travel for passengers; NCR, which is using Yoti to improve age-verification at self-checkouts; and Yubo, which is deploying Yoti to verify the age of users and to “safeguard” young people online.

Last year, Yoti was selected by the Government of Jersey as its digital identity provider. This, we are told, has seen 10% of the Jersey adult population use Yoti.

Meanwhile, Yoti says it has developed a “private and secure” browser-based age verification solution called ProveMyAge, as it looks to cash in on the U.K.’s upcoming new Digital Economy Act. The product is designed to help adult websites comply with the age verification requirements of the legislation, which is set to come into force later this year.

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Jul
11

Casper opens a storefront for $25 naps

In July, French television company Canal+ acquired the ROK film studio from VOD company IROKOtv.

Canal+ would not disclose the acquisition price, but confirmed there was a cash component of the deal.

Founded by Jason Njoku in 2010 — and backed by $45 million in VC — IROKOtv boasts the world’s largest online catalog of Nollywood: a Nigerian movie genre that has become Africa’s de facto film industry and one of the largest globally (by production volume).

Based in Lagos, ROK film studios was incubated to create original content for IROKOtv, which can be accessed digitally anywhere in the world.

ROK studio founder and producer Mary Njoku will stay on as director general under the Canal+ acquisition.

With the ROK deal, Canal+ looks to bring the Nollywood production ethos to other African countries and regions. The new organization plans to send Nigerian production teams to French-speaking African countries starting this year.

The ability to reach a larger advertising network of African consumers on the continent and internationally was a big acquisition play for Canal+.

San Francisco and Lagos-based fintech startup Flutterwave partnered with Chinese e-commerce company Alibaba’s Alipay to offer digital payments between Africa and China.

Flutterwave is a Nigerian-founded B2B payments service (primarily) for companies in Africa to pay other companies on the continent and abroad.

Alipay is Alibaba’s digital wallet and payments platform. In 2013, Alipay surpassed PayPal in payments volume and currently claims a global network of more than 1 billion active users, per Alibaba’s latest earnings report.

A large portion of Alipay’s network is in China, which makes the Flutterwave integration significant to capturing payments activity around the estimated $200 billion in China-Africa trade.

Flutterwave will earn revenue from the partnership by charging its standard 3.8% on international transactions. The company currently has more than 60,000 merchants on its platform, according to CEO Olugbenga Agboola.

In a recent Extra Crunch feature, TechCrunch tracked Flutterwave as one of several Africa-focused fintech companies that have established headquarters in San Francisco and operations in Africa to tap the best of both worlds in VC, developers, clients and digital finance.

Flutterwave’s Alipay collaboration also tracks a trend of increased presence of Chinese companies in African tech. July saw Chinese-owned Opera raise $50 million in venture spending to support its growing West African digital commercial network, which includes browser, payments and ride-hail services. The funds are predominately for OPay, an Opera -owned, Africa-focused mobile payments startup.

Lead investors included Sequoia China, IDG Capital and Source Code Capital. Opera also joined the round in the payments venture it created.

OPay will use the capital (which wasn’t given a stage designation) primarily to grow its digital finance business in Nigeria — Africa’s most populous nation and largest economy.

OPay will also support Opera’s growing commercial network in Nigeria, which includes motorcycle ride-hail app ORide and OFood delivery service.

Opera founded OPay in 2018 on the popularity of its internet search engine. Opera’s web-browser has ranked No. 2 in usage in Africa, after Chrome, the last four years.

July also saw transit tech news in East Africa. Global ride-hail startup InDriver launched its app-based service in Kampala (Uganda), bringing its Africa operating countries to four: Kenya, Uganda, South Africa and Tanzania. InDriver’s mobile app allows passengers to name their own fare for nearby drivers to accept, decline or counter.

Nairobi-based internet hardware and service startup BRCK and Egyptian ride-hail venture Swvl are partnering to bring Wi-Fi and online entertainment to on-demand bus service in Kenya.

BRCK is installing its routers on Swvl vehicles in Kenya to run its Moja service, which offers free public Wi-Fi — internet, music and entertainment — subsidized by commercial partners.

Founded in Cairo in 2017, Swvl is a mass transit service that has positioned itself as an Uber for shared buses.

The company raised a $42 million Series B round in June, with intent to expand in Africa, Swvl CEO Mostafa Kandil said in an interview.

BRCK and Swvl wouldn’t confirm plans on expanding their mobile internet partnership to additional countries outside of Kenya .

Africa’s ride-hail markets are becoming a multi-wheeled and global affair, making the continent home to a number of fresh mobility use cases, including the BRCK and Swvl Wi-Fi partnership.

More Africa-related stories @TechCrunch

VertoFX raises $2M for its African and EM currency trading platformWhy this Nigerian fintech startup is volunteering audited financialsChina’s Vivo is eyeing smartphone users in Africa and the Middle EastOnly 2% of genomic material available for research comes from Africa; 54gene wants to change that

African tech around the ‘net

MTN granted operating license to launch financial service in Nigeria  Kenya’s Sokowatch raises further $2.5m funding, expands to Rwanda, Uganda4Di Capital launches $9.4m fund to invest in SA tech startups

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Jul
11

Nurx raises $36 million and adds Chelsea Clinton to its board of directors

The White House has hit pause on the JEDI contract. Associated Press

Good morning! This is the tech news you need to know this Friday.

The White House reportedly directed the Department of Defense to review a $10 billion cloud contract because it would probably go to Amazon. The Secretary of Defense says that JEDI won't be awarded pending a full review of the deal. US regulators are talking to founders of companies Facebook acquired as part of the government's new antitrust probe. It's not immediately clear which founders of which companies have been approached by the FTC, but Facebook has a long history of purchasing startups working in similar fields to itself. Google has been temporarily forced to stop listening in on its users across Europe after leaked data sparked privacy concerns. The ban comes as a result of a July report in which a Dutch media outlet used leak audio snippets from a third-party reviewer to show that some Google Assistant users had been recorded by their devices unknowingly. Apple will temporarily suspend and review a global program that allows contractors to listen to Siri recordings. The program's suspension follows a report published by The Guardian last week that revealed contractors involved in the review program could "regularly hear confidential medical information, drug deals, and recordings of couples having sex" often as a result of Siri being triggered by accident. Facebook took down hundreds of accounts connected to the Saudi Arabian government, which were being used to spread propaganda. The social network suspended more than 350 different accounts and pages, which had about 1.4 million followers. Professional gamer Ninja is leaving Amazon's Twitch for an exclusive deal with Microsoft's video game streaming platform, Mixer. Ninja will leave more than 14 million followers behind on Twitch, along with a large number of paid subscribers. DoorDash is buying its competitor Caviar from Square for $410 million as the red-hot delivery space continues to heat up. Square's stock price fell as much as 8% following the announcement, which coincided with the company's quarterly earnings report. Pinterest's stock popped more than 12% after beating Wall Street's Q2 targets. Pinterest's $261 million in revenue for Q2 was higher than analysts anticipated and up 62% from the same period the year prior. Amazon is disabling its Dash buttons, the little buttons that let people re-order groceries with a push. The company stopped selling the buttons earlier this year, but had continued to support ones already in customers' hands. Microsoft hired a man named Mac Book to star in its latest ad slamming Apple's laptops. The ad takes a jab at Apple's MacBook laptops by saying Surface computers perform faster, last longer, and have touch screens.

Have an Amazon Alexa device? Now you can hear 10 Things in Tech each morning. Just search for "Business Insider" in your Alexa's flash briefing settings.

You can also subscribe to this newsletter here — just tick "10 Things in Tech You Need to Know."

Original author: Isobel Asher Hamilton

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Feb
17

Boston’s year jump starts as two local startups raise $520M in two rounds

Apple will temporarily suspend and review a global program that allows contractors to listen to recordings of queries made to the voice assistant Siri, following a report from The Guardian that contractors "regularly" hear private and confidential information.

TechCrunch reported Thursday night that Apple is tabling the program — called grading — which allows the company to monitor user interaction with Siri used for quality control.

"We are committed to delivering a great Siri experience while protecting user privacy," an Apple spokesperson said in a statement to The Verge. "While we conduct a thorough review, we are suspending Siri grading globally. Additionally, as part of a future software update, users will have the ability to choose to participate in grading."

According to Apple, user recordings from Siri queries are saved for a six-month period "so that the recognition system can utilize them to better understand the user's voice." After six months, another copy of the recording "without its identifier" is saved for up to two years by Apple in order to "improve and develop" Siri functions.

Las week a report from The Guardian that revealed that contractors involved in the review program could "regularly hear confidential medical information, drug deals, and recordings of couples having sex."

Read more: Amazon workers reportedly listen to what you tell Alexa — here's how Apple and Google handle what you say to their voice assistants

An anonymous contractor expressed concern to The Guardian about the amount of "extremely sensitive personal information" picked up by Siri when its often triggered by accident by its "wake word." Contractors responsible for grading note these interactions, along with deliberate queries.

Apple told The Guardian that "less than 1%" of daily Siri activations are utilized by graders and are typically "only a few seconds long." The company told the Guardian that requests are not associated with an Apple ID and "all reviewers are under the obligation to adhere to Apple's strict confidentiality requirements."

Apple did not immediately response to Business Insider's request for comment.

Original author: Rosie Perper

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Aug
02

UrbanClap, India’s largest home services startup, raises $75M

UrbanClap, a marketplace for freelance labor in India and the UAE, has raised $75 million in a new financing round to expand its business.

The Series E round for the four-and-a-half-year old India-based startup was led Tiger Global. Existing investors Steadview Capital, which led the startup’s Series D in December last year, and Vy Capital also participated in the current round. The startup, which has raised about $185 million to date, said some early investors sold portions of their stake as part of the new round.

Through its platform, UrbanClap matches service people such as cleaners, repair staff and beauticians with customers across 10 cities in India as well as Dubai and Abu Dhabi. The startup supports 20,000 “micro-franchisees” (service professionals) with around 450,000 transactions taking place each month, co-founder and CEO Abhiraj Bhal told TechCrunch.

Bhal said that UrbanClap helps offline service workers, who have traditionally relied on getting work through middleman such as some store or word of mouth networks, find more work. And they earn more, too. UrbanClap offers a more direct model, with workers keeping 80% of the cost of their jobs. That, Bhal said, means workers can earn multiples more and manage their own working hours.

“The UrbanClap model really allows them to become service entrepreneurs. Their earnings will shoot up two or three-fold, and it isn’t uncommon to see it rise as much as 8X — it’s a life-changing experience,” he said. Average value of a service is between $17 to $22, according to the company.

In recent years, UrbanClap has also started to offer training, credit and basic banking services to better support the service workers on its platform. On its website, UrbanClap claims to offer 73 services — including kitchen cleaning, hairdressing and yoga training. It says it has served 3 million customers.

Bhal said that around 20-25% of applicants are accepted into the platform; that’s a decision based on in-person meetings, background and criminal checks, as well as a “skills” test. Workers are encouraged to work exclusively — though it isn’t a requirement — and they wear UrbanClap outfits and represent the brand.

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Jul
12

406th Roundtable For Entrepreneurs Starting NOW: Live Tweeting By @1Mby1M - Sramana Mitra

While you’d be hard-pressed to find any startup not brimming with confidence over the disruptive idea they’re chasing, it’s not often you come across a young company as calmly convinced it’s engineering the future as Dasha AI.

The team is building a platform for designing human-like voice interactions to automate business processes. Put simply, it’s using AI to make machine voices a whole lot less robotic.

“What we definitely know is this will definitely happen,” says CEO and co-founder Vladislav Chernyshov. “Sooner or later the conversational AI/voice AI will replace people everywhere where the technology will allow. And it’s better for us to be the first mover than the last in this field.”

“In 2018 in the U.S. alone there were 30 million people doing some kind of repetitive tasks over the phone. We can automate these jobs now or we are going to be able to automate it in two years,” he goes on. “If you multiple it with Europe and the massive call centers in India, Pakistan and the Philippines you will probably have something like close to 120 million people worldwide… and they are all subject for disruption, potentially.”

The New York-based startup has been operating in relative stealth up to now. But it’s breaking cover to talk to TechCrunch — announcing a $2 million seed round, led by RTP Ventures and RTP Global: An early-stage investor that’s backed the likes of Datadog and RingCentral. RTP’s venture arm, also based in NY, writes on its website that it prefers engineer-founded companies — that “solve big problems with technology.” “We like technology, not gimmicks,” the fund warns with added emphasis.

Dasha’s core tech right now includes what Chernyshov describes as “a human-level, voice-first conversation modelling engine;” a hybrid text-to-speech engine which he says enables it to model speech disfluencies (aka, the ums and ahs, pitch changes etc. that characterize human chatter); plus “a fast and accurate” real-time voice activity detection algorithm which detects speech in less than 100 milliseconds, meaning the AI can turn-take and handle interruptions in the conversation flow. The platform also can detect a caller’s gender — a feature that can be useful for healthcare use cases, for example.

Another component Chernyshov flags is “an end-to-end pipeline for semi-supervised learning” — so it can retrain the models in real time “and fix mistakes as they go” — until Dasha hits the claimed “human-level” conversational capability for each business process niche. (To be clear, the AI cannot adapt its speech to an interlocutor in real time — as human speakers naturally shift their accents closer to bridge any dialect gap — but Chernyshov suggests it’s on the roadmap.)

“For instance, we can start with 70% correct conversations and then gradually improve the model up to say 95% of correct conversations,” he says of the learning element, though he admits there are a lot of variables that can impact error rates — not least the call environment itself. Even cutting edge AI is going to struggle with a bad line.

The platform also has an open API so customers can plug the conversation AI into their existing systems — be it telephony, Salesforce software or a developer environment, such as Microsoft Visual Studio.

Currently they’re focused on English, though Chernyshov says the architecture is “basically language agnostic” — but does requires “a big amount of data.”

The next step will be to open up the dev platform to enterprise customers, beyond the initial 20 beta testers, which include companies in the banking, healthcare and insurance sectors — with a release slated for later this year or Q1 2020.

Test use cases so far include banks using the conversation engine for brand loyalty management to run customer satisfaction surveys that can turnaround negative feedback by fast-tracking a response to a bad rating — by providing (human) customer support agents with an automated categorization of the complaint so they can follow up more quickly. “This usually leads to a wow effect,” says Chernyshov.

Ultimately, he believes there will be two or three major AI platforms globally providing businesses with an automated, customizable conversational layer — sweeping away the patchwork of chatbots currently filling in the gap. And, of course, Dasha intends their “Digital Assistant Super Human Alike” to be one of those few.

“There is clearly no platform [yet],” he says. “Five years from now this will sound very weird that all companies now are trying to build something. Because in five years it will be obvious — why do you need all this stuff? Just take Dasha and build what you want.”

“This reminds me of the situation in the 1980s when it was obvious that the personal computers are here to stay because they give you an unfair competitive advantage,” he continues. “All large enterprise customers all over the world… were building their own operating systems, they were writing software from scratch, constantly reinventing the wheel just in order to be able to create this spreadsheet for their accountants.

“And then Microsoft with MS-DOS came in… and everything else is history.”

That’s not all they’re building, either. Dasha’s seed financing will be put toward launching a consumer-facing product atop its B2B platform to automate the screening of recorded message robocalls. So, basically, they’re building a robot assistant that can talk to — and put off — other machines on humans’ behalf.

Which does kind of suggest the AI-fueled future will entail an awful lot of robots talking to each other…

Chernyshov says this B2C call-screening app will most likely be free. But then if your core tech looks set to massively accelerate a non-human caller phenomenon that many consumers already see as a terrible plague on their time and mind then providing free relief — in the form of a counter AI — seems the very least you should do.

Not that Dasha can be accused of causing the robocaller plague, of course. Recorded messages hooked up to call systems have been spamming people with unsolicited calls for far longer than the startup has existed.

Dasha’s PR notes Americans were hit with 26.3 billion robocalls in 2018 alone — up “a whopping” 46% on 2017.

Its conversation engine, meanwhile, has only made some 3 million calls to date, clocking its first call with a human in January 2017. But the goal from here on in is to scale fast. “We plan to aggressively grow the company and the technology so we can continue to provide the best voice conversational AI to a market which we estimate to exceed $30 billion worldwide,” runs a line from its PR.

After the developer platform launch, Chernyshov says the next step will be to open access to business process owners by letting them automate existing call workflows without needing to be able to code (they’ll just need an analytic grasp of the process, he says).

Later — pegged for 2022 on the current roadmap — will be the launch of “the platform with zero learning curve,” as he puts it. “You will teach Dasha new models just like typing in a natural language and teaching it like you can teach any new team member on your team,” he explains. “Adding a new case will actually look like a word editor — when you’re just describing how you want this AI to work.”

His prediction is that a majority — circa 60% — of all major cases that business face — “like dispatching, like probably upsales, cross sales, some kind of support etc., all those cases” — will be able to be automated “just like typing in a natural language.”

So if Dasha’s AI-fueled vision of voice-based business process automation comes to fruition, then humans getting orders of magnitude more calls from machines looks inevitable — as machine learning supercharges artificial speech by making it sound slicker, act smarter and seem, well, almost human.

But perhaps a savvier generation of voice AIs will also help manage the “robocaller” plague by offering advanced call screening? And as non-human voice tech marches on from dumb recorded messages to chatbot-style AIs running on scripted rails to — as Dasha pitches it — fully responsive, emoting, even emotion-sensitive conversation engines that can slip right under the human radar maybe the robocaller problem will eat itself? I mean, if you didn’t even realize you were talking to a robot how are you going to get annoyed about it?

Dasha claims 96.3% of the people who talk to its AI “think it’s human,” though it’s not clear on what sample size the claim is based. (To my ear there are definite “tells” in the current demos on its website. But in a cold-call scenario it’s not hard to imagine the AI passing, if someone’s not paying much attention.)

The alternative scenario, in a future infested with unsolicited machine calls, is that all smartphone OSes add kill switches, such as the one in iOS 13 — which lets people silence calls from unknown numbers.

And/or more humans simply never pick up phone calls unless they know who’s on the end of the line.

So it’s really doubly savvy of Dasha to create an AI capable of managing robot calls — meaning it’s building its own fallback — a piece of software willing to chat to its AI in the future, even if actual humans refuse.

Dasha’s robocall screener app, which is slated for release in early 2020, will also be spammer-agnostic — in that it’ll be able to handle and divert human salespeople too, as well as robots. After all, a spammer is a spammer.

“Probably it is the time for somebody to step in and ‘don’t be evil,’ ” says Chernyshov, echoing Google’s old motto, albeit perhaps not entirely reassuringly given the phrase’s lapsed history — as we talk about the team’s approach to ecosystem development and how machine-to-machine chat might overtake human voice calls.

“At some point in the future we will be talking to various robots much more than we probably talk to each other — because you will have some kind of human-like robots at your house,” he predicts. “Your doctor, gardener, warehouse worker, they all will be robots at some point.”

The logic at work here is that if resistance to an AI-powered Cambrian Explosion of machine speech is futile, it’s better to be at the cutting edge, building the most human-like robots — and making the robots at least sound like they care.

Dasha’s conversational quirks certainly can’t be called a gimmick. Even if the team’s close attention to mimicking the vocal flourishes of human speech — the disfluencies, the ums and ahs, the pitch and tonal changes for emphasis and emotion — might seem so at first airing.

In one of the demos on its website you can hear a clip of a very chipper-sounding male voice, who identifies himself as “John from Acme Dental,” taking an appointment call from a female (human), and smoothly dealing with multiple interruptions and time/date changes as she changes her mind. Before, finally, dealing with a flat cancellation.

A human receptionist might well have got mad that the caller essentially just wasted their time. Not John, though. Oh no. He ends the call as cheerily as he began, signing off with an emphatic: “Thank you! And have a really nice day. Bye!”

If the ultimate goal is Turing Test levels of realism in artificial speech — i.e. a conversation engine so human-like it can pass as human to a human ear — you do have to be able to reproduce, with precision timing, the verbal baggage that’s wrapped around everything humans say to each other.

This tonal layer does essential emotional labor in the business of communication, shading and highlighting words in a way that can adapt or even entirely transform their meaning. It’s an integral part of how we communicate. And thus a common stumbling block for robots.

So if the mission is to power a revolution in artificial speech that humans won’t hate and reject, then engineering full spectrum nuance is just as important a piece of work as having an amazing speech recognition engine. A chatbot that can’t do all that is really the gimmick.

Chernyshov claims Dasha’s conversation engine is “at least several times better and more complex than [Google] Dialogflow, [Amazon] Lex, [Microsoft] Luis or [IBM] Watson,” dropping a laundry list of rival speech engines into the conversation.

He argues none are on a par with what Dasha is being designed to do.

The difference is the “voice-first modeling engine.” “All those [rival engines] were built from scratch with a focus on chatbots — on text,” he says, couching modeling voice conversation “on a human level” as much more complex than the more limited chatbot-approach — and hence what makes Dasha special and superior.

“Imagination is the limit. What we are trying to build is an ultimate voice conversation AI platform so you can model any kind of voice interaction between two or more human beings.”

Google did demo its own stuttering voice AI — Duplex — last year, when it also took flak for a public demo in which it appeared not to have told restaurant staff up front they were going to be talking to a robot.

Chernyshov isn’t worried about Duplex, though, saying it’s a product, not a platform.

“Google recently tried to headhunt one of our developers,” he adds, pausing for effect. “But they failed.”

He says Dasha’s engineering staff make up more than half (28) its total headcount (48), and include two doctorates of science; three PhDs; five PhD students; and 10 masters of science in computer science.

It has an R&D office in Russia, which Chernyshov says helps makes the funding go further.

“More than 16 people, including myself, are ACM ICPC finalists or semi finalists,” he adds — likening the competition to “an Olympic game but for programmers.” A recent hire — chief research scientist, Dr. Alexander Dyakonov — is both a doctor of science professor and former Kaggle No.1 GrandMaster in machine learning. So with in-house AI talent like that you can see why Google, uh, came calling…

But why not have Dasha ID itself as a robot by default? On that Chernyshov says the platform is flexible — which means disclosure can be added. But in markets where it isn’t a legal requirement, the door is being left open for “John” to slip cheerily by. “Bladerunner” here we come.

The team’s driving conviction is that emphasis on modeling human-like speech will, down the line, allow their AI to deliver universally fluid and natural machine-human speech interactions, which in turn open up all sorts of expansive and powerful possibilities for embeddable next-gen voice interfaces. Ones that are much more interesting than the current crop of gadget talkies.

This is where you could raid sci-fi/pop culture for inspiration. Such as Kitt, the dryly witty talking car from the 1980s TV series “Knight Rider.” Or, to throw in a British TV reference, Holly the self-depreciating yet sardonic human-faced computer in “Red Dwarf.” (Or, indeed, Kryten, the guilt-ridden android butler.) Chernyshov’s suggestion is to imagine Dasha embedded in a Boston Dynamics robot. But surely no one wants to hear those crawling nightmares scream…

Dasha’s five-year+ roadmap includes the eyebrow-raising ambition to evolve the technology to achieve “a general conversational AI.” “This is a science fiction at this point. It’s a general conversational AI, and only at this point you will be able to pass the whole Turing Test,” he says of that aim.

“Because we have a human-level speech recognition, we have human-level speech synthesis, we have generative non-rule based behavior, and this is all the parts of this general conversational AI. And I think that we can we can — and scientific society — we can achieve this together in like 2024 or something like that.

“Then the next step, in 2025, this is like autonomous AI — embeddable in any device or a robot. And hopefully by 2025 these devices will be available on the market.”

Of course the team is still dreaming distance away from that AI wonderland/dystopia (depending on your perspective) — even if it’s date-stamped on the roadmap.

But if a conversational engine ends up in command of the full range of human speech — quirks, quibbles and all — then designing a voice AI may come to be thought of as akin to designing a TV character or cartoon personality. So very far from what we currently associate with the word “robotic.” (And wouldn’t it be funny if the term “robotic” came to mean “hyper entertaining” or even “especially empathetic” thanks to advances in AI.)

Let’s not get carried away though.

In the meantime, there are “uncanny valley” pitfalls of speech disconnect to navigate if the tone being (artificially) struck hits a false note. (And, on that front, if you didn’t know “John from Acme Dental” was a robot you’d be forgiven for misreading his chipper sign off to a total time waster as pure sarcasm. But an AI can’t appreciate irony. Not yet anyway.)

Nor can robots appreciate the difference between ethical and unethical verbal communication they’re being instructed to carry out. Sales calls can easily cross the line into spam. And what about even more dystopic uses for a conversation engine that’s so slick it can convince the vast majority of people it’s human — like fraud, identity theft, even election interference… the potential misuses could be terrible and scale endlessly.

Although if you straight out ask Dasha whether it’s a robot Chernyshov says it has been programmed to confess to being artificial. So it won’t tell you a barefaced lie.

How will the team prevent problematic uses of such a powerful technology?

“We have an ethics framework and when we will be releasing the platform we will implement a real-time monitoring system that will monitor potential abuse or scams, and also it will ensure people are not being called too often,” he says. “This is very important. That we understand that this kind of technology can be potentially probably dangerous.”

“At the first stage we are not going to release it to all the public. We are going to release it in a closed alpha or beta. And we will be curating the companies that are going in to explore all the possible problems and prevent them from being massive problems,” he adds. “Our machine learning team are developing those algorithms for detecting abuse, spam and other use cases that we would like to prevent.”

There’s also the issue of verbal “deepfakes” to consider. Especially as Chernyshov suggests the platform will, in time, support cloning a voiceprint for use in the conversation — opening the door to making fake calls in someone else’s voice. Which sounds like a dream come true for scammers of all stripes. Or a way to really supercharge your top performing salesperson.

Safe to say, the counter technologies — and thoughtful regulation — are going to be very important.

There’s little doubt that AI will be regulated. In Europe policymakers have tasked themselves with coming up with a framework for ethical AI. And in the coming years policymakers in many countries will be trying to figure out how to put guardrails on a technology class that, in the consumer sphere, has already demonstrated its wrecking-ball potential — with the automated acceleration of spam, misinformation and political disinformation on social media platforms.

“We have to understand that at some point this kind of technologies will be definitely regulated by the state all over the world. And we as a platform we must comply with all of these requirements,” agrees Chernyshov, suggesting machine learning will also be able to identify whether a speaker is human or not — and that an official caller status could be baked into a telephony protocol so people aren’t left in the dark on the “bot or not” question. 

“It should be human-friendly. Don’t be evil, right?”

Asked whether he considers what will happen to the people working in call centers whose jobs will be disrupted by AI, Chernyshov is quick with the stock answer — that new technologies create jobs too, saying that’s been true right throughout human history. Though he concedes there may be a lag — while the old world catches up to the new.

Time and tide wait for no human, even when the change sounds increasingly like we do.

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Aug
01

Amazon is disabling its Dash buttons, the little buttons that let people re-order groceries with a push (AMZN)

Amazon's Dash buttons will soon be disabled.

The e-commerce giant will be turning off the devices, which allowed customers to order particular products with the press of a button, at the end of this month, company spokeswoman Robyn Stewart said in an emailed statement Thursday. Amazon had announced in February it was ceasing sales of the gadgets, but had since then continued to support those already in use.

"Amazon is constantly evaluating our product and service offerings to best serve customers," Stewart said in the statement. "Since sales of Dash Button devices ceased earlier this year, we have seen continued growth of other shopping options to meet customer needs."

CNET previously reported that Amazon was deactivating the Dash buttons.

Amazon launched the Dash buttons four years ago. Each one was tied to a particular product from a specific brand. They were designed to make it easy for customers to replenish household items when they ran out of them. Among the dozens of different brands that offered buttons were Tide, Lysol, and Red Bull.

Read this: Amazon just added a ton of new Dash Buttons — here's the full list

Instead of using the physical buttons, Amazon customers can create virtual ones on the company's web site. They can also place orders through the company's Echo smart speakers or other devices that support its Alexa voice assistant.

Got a tip about Amazon or another tech company? Contact this reporter via email at This email address is being protected from spambots. You need JavaScript enabled to view it., message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

Original author: Troy Wolverton

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Aug
01

Coatue, a prominent tech-focused hedge fund, has reportedly hired a former Facebook exec to lead a new $700 million venture fund

SoftBank isn't the only new kid on the block on Sand Hill Road. Outsized returns have caught the eyes of some of Silicon Valley's most successful hedge funds, and they're looking for skin in the game.

According to a report from The Information on Thursday, tech hedge fund Coatue Management has raised a $700 million venture fund to invest in early-stage tech companies.

Although typically the riskiest stage to invest in, the earlier an investor gets in, the larger the returns could be, which apparently appealed to Philippe Laffont and his brother Thomas Laffont, the founders of Coatue. The founders told The Information they were eager to get into prospective companies earlier as they continue to compete with larger, more well-known venture firms in Silicon Valley.

The early-stage fund will be run by former Facebook vice president Dan Rose, according to the report, and it's already invested in data-centric startups like Weights & Biases, Figma, AppZen, and Persona.

Read More: Andreessen Horowitz partner Scott Kupor explains the valuable lesson that today's startups can learn from the dot-com bubble: Be careful about selling to other startups

The Laffont brothers have made a name for themselves by taking big bets on some of Silicon Valley's biggest names, albeit at later stages. Coatue Management had stakes in Snap, Uber, Lyft, Grab, and Airtable, to name a few of the firm's biggest hits. But as capital continues to flow into Silicon Valley, it helps to get in as early as possible.

In addition to the $17 billion under management, Coatue Management also benefits from a proprietary data analytics tool that helps guide investment, the Laffonts told The Information. According to the report, Coatue spends more than $30 million to purchase data for its algorithms, and nearly half of its investment team are engineers.

Coatue Management did not respond to Business Insider's request for comment.

Original author: Megan Hernbroth

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Aug
01

This VC's fund manages $500 million in assets. Here's why it's focusing on late-stage companies and how it thinks it can help them take off. (AKAM)

Venture capital firms have different strategies and philosophies when it comes to their interactions with their portfolio companies.

Some VC firms take a more laid-back approach, giving founders and executive teams plenty of room to operate. Others are much more interested in playing an active role in their companies, helping direct operations and guide decision-making.

HighBar Partners is on the more active end of the continuum. Most of its team has experience working at and managing startups. A big part of its strategy is to invest in mature startups that have already proven their business models and help them reach exponential growth by working closely with their managers, Brian Peters, a managing director at HighBar, told Business Insider in a recent interview. The firm specifically seeks out founders and managing teams that are looking for the kind of advice and guidance it can offer, he said.

"We're a hands-on investment group," Peters said. He continued: "If the management team is one that's not looking for help ... it might not be the right investment for us."

Read this: One of the first backers of Skype and Wix.com explains why the European startup scene is starting to close the gap with Silicon Valley

That philosophy guides the number and type of investments HighBar makes, Peters said. The firm manages about $500 million in assets. But it has only about a dozen active investments at any one time and it only makes a handful of new ones each year, he said.

"Our model is not high volume," he said. "We're not sitting on 10 boards each."

At a time when tech startups have a broader choice of investors than ever before, from sovereign wealth funds to corporate VC firms like Google's GV and Salesforce Ventures, HighBar is betting a high-touch approach will become increasingly valuable — at least with a certain type of startup.

HighBar's partners work closely with founders

Once HighBar invests in companies, its partners sit down with management teams and go over various aspects of their businesses, Peters said. They look at how well the startups are attracting customers and the effectiveness of their marketing efforts. They scrutinize the companies product innovation processes, he said. And they look at how well the teams are scaling their businesses, and whether they're doing so efficiently or productively.

HighBar likes to establish benchmarks for particular metrics right after it invests and monitor whether those are improving over time, Peters said.

"We're looking to roll up our sleeves with each of these teams," he said.

The firm largely focuses on software companies, Peters said. It's particularly interested in ones that help customers' process and make sense of large amounts of data.

One of its most recent investments, for example, was in Signpost, a New York startup that offers customer relationship management software for local businesses. Founded in 2010, Signpost has collected data on 70 million US consumers. Last month, HighBar led a $52 million late-stage investment in the company.

"We love large data plays," Peters said.

The firm is focusing on the digital transformation and automation

Lately, HighBar has been concentrating on companies that are focused on three big trends — the digital transformation of companies, business process automation, and the move of corporate workflows to mobile devices.

On the digital transformation front, it was an investor in Janrain, a startup that helps companies manage online customer registration and authentication. Akamai bought Janrain in January for $124 million in cash, according to the former's latest quarterly report.

In the mobile workflow area, it's a backer of PatientSafe, a San Diego-based startup that's developed an app for doctors and nurses that helps them keep track of and communicate about treatments for particular patients.

Both investments exemplify its strategy. Both were part of larger, late-stage deals that occurred after the companies had already proven themselves.

"We like to own large stakes in business with a significant capital infusion and leverage our expertise," Peters said.

Got a tip about a startup or venture capital? Contact this reporter via email at This email address is being protected from spambots. You need JavaScript enabled to view it., message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

Original author: Troy Wolverton

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Aug
01

MacKenzie Bezos is officially Amazon's second-largest individual shareholder and the third-wealthiest woman in the world (AMZN)

MacKenzie Bezos, now the ex-wife of Amazon CEO Jeff Bezos, has come into two significant titles in the wake of the divorce: The second-largest individual shareholder of Amazon, according to Bloomberg, and the third wealthiest woman in the world, according to Forbes.
Regulatory filings show that Jeff Bezos transferred some 19.7 million Amazon shares to MacKenzie Bezos, as Bloomberg reports. That transfer brought Jeff Bezos' ownership stake in the company from 16% down to 12%, with the 4% of difference going to MacKenzie, according to USA Today.

Those filings were in relation to stock sales made by Jeff Bezos during the last 3 days of July, in which he sold more than 965,000 Amazon shares, worth $1.8 billion.

Meanwhile, MacKenzie Bezos' 4% stake is valued at some $37 billion, based on Amazon stock prices — and makes her the second-largest invidual shareholder in Amazon, behind her ex-husband. Jeff Bezos, for his part, now has a net worth of around $115 billion, according to Forbes.
This news is right in line with the divorce agreement that Jeff Bezos and MacKenzie Bezos announced in April, wherein Jeff would keep 75% of the Amazon holdings co-owned by the couple, and would retain voting control over MacKenzie's stake in the company. MacKenzie Bezos also agreed to grant Jeff Bezos her interests in the Washington Post and Blue Origin. The divorce was finalized in early July.

MacKenzie Bezos also said in April she had signed the Giving Pledge, a promise taken by some of the world's wealthiest to donate at least half of their assets to charity in their lifetime or will.

Jake Kanter and Paige Leskin contributed to this report.

Original author: Rebecca Aydin

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Jul
12

406th Roundtable For Entrepreneurs Starting In 30 Minutes: Live Tweeting By @1Mby1M - Sramana Mitra

StockX, a popular site for buying and selling sneakers and other apparel, has admitted it reset customer passwords after it was “alerted to suspicious activity” on its site, despite telling users it was a result of “system updates.”

“We recently completed system updates on the StockX platform,” said the email to customers sent to TechCrunch on Thursday. The email provided a link to a password reset page but said nothing more.

The company was only last month valued at over $1 billion after a $110 million fundraise.

Companies reset passwords all the time for various reasons. Some security teams obtain lists of previously breached passwords that make their way online, scramble them in the same format that the company stores passwords, and find matches. By triggering the reset, it prevents passwords stolen from other sites from being used against one of a company’s own customers. In less than desirable circumstances, passwords are reset following a data breach.

But the company admitted it was not “system updates” as it had told its customers.

“StockX was recently alerted to suspicious activity potentially involving our platform,” said StockX spokesperson Katy Cockrel. “Out of an abundance of caution, we implemented a security update and proactively asked our community to update their account passwords.”

“We are continuing to investigate,” said the spokesperson.

The password reset email sent by StockX on Thursday (Image: supplied)

We asked several follow-up questions — including who alerted StockX to the suspicious activity, if any customer data was compromised and why it misrepresented the reason for the password reset — but the spokesperson declined to comment further.

Throughout the day customers were tweeting screenshots of the email, worried that their accounts had been compromised. Others questioned whether the email was genuine or if it was part of a phishing attack.

“Did they get hacked, find out somehow, and then to cover it up send out that email and ask for a password change?,” one of the affected customers told TechCrunch.

Customers were given no prior warning of the password reset.

StockX founder Josh Luber kept with the company’s line, telling a customer in a tweet that the password reset was “legit” but did not respond to users asking why.

StockX tweeted back to several customers with a boilerplate response: “The password reset email you received is legitimate and came from our team,” and to contact the support email with any questions. We did just that — from our TechCrunch email address — and heard nothing back hours later.

Security experts expressed doubt that a company would reset passwords over a “systems update” as StockX had claimed.

Security researcher John Wethington said it is “rare” to see security overhauls that require password resets. “You wouldn’t just send out a random email about it,” he said. Jake Williams, founder of Rendition Infosec, said it was “bad communication” in any case.

Several took to Twitter to criticize StockX for its handling of the password reset.

One customer called the email “fishy,” another called it “suspicious” and another called on the company to explain why they had to reset passwords in this unorthodox way. Another said in a tweet that he asked StockX twice but they “refused to provide an answer.”

“Guess I’m closing my account,” he said.

Read more:
Slack resets user passwords after 2015 data breach
Capital One breach also hit other major companies, say researchers
An exposed password let a hacker access internal Comodo files
Security lapse exposed weak points on Honda’s internal network
Cryptocurrency loan site YouHodler exposed unencrypted user credit cards and transactions

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Aug
01

Jeff Bezos just sold $1.8 billion worth of Amazon shares — here's our best guess at why (AMZN)

Amazon CEO Jeff Bezos just sold $1.8 billion worth of the company's shares in what may have been his largest stock sale in the internet company's history.

Bezos cashed in more than 960,000 shares valued at about $1,900 per share in the last three days of July, as company filings with the Security and Exchange Commission show. That represented 1.6% of Bezos' total stake in the company, and it could be the largest sale of Amazon stock that Bezos has ever made since he started the company more than 20 years ago, according to Forbes.

Bezos also transferred 19.7 million shares to ex-wife MacKenzie Bezos, making her the company's second-largest individual shareholder as Bloomberg notes. Her 4% holding in the company is worth $37 billion.

It's unclear why Bezos decided to sell off his shares at this time. To be sure, the sales were part of a so-called 10b5-1 trading plan, in which shares are automatically sold at pre-determined dates to avoid any perception of trading on insider knowledge.

Still, an executive cashing out big chunks of stock is often considered a negative sign, since it suggests the person may not be as bullish about the stock's potential as in the past.

As the owner of several other companies, including a space exploration company and the Washington Post newspaper, Bezos has a lot going on. There are plenty of personal reasons why Bezos might have sold his shares that have nothing to do with Amazon.

Here are our best guesses at where the money from his stock sales might be going, as well as some of the big issues clouding Amazon's future that coincide with the moves.

Amazon did not immediately respond to Business Insider's request for more details about the sale.

Original author: Lisa Eadicicco

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Aug
01

Bloomscape raises $7.5M to sell you plants of all sizes

Direct-to-consumer plant retailer Bloomscape has raised $7.5 million in Series A funding, with several high-profile D2C startup founders signing on as investors.

Founder and CEO Justin Mast told me that his family has five generations of experience as greenhouse owners and operators, and that he first tried to get Bloomscape off the ground more than a decade ago. Since then, Mast has worked at other startups, but he said, “Bloomscape was the one that got away. I would find myself dreaming about it.”

The current version of the startup launched just over a year ago, and has shipped more than 100,000 plants since then. The company is headquartered in Detroit, and ships plants from its greenhouses near Grand Rapids, Mich.

When asked what’s wrong with the existing brick-and-mortar plant-buying process, Mast said convenience is a big factor, particularly once you start talking about plants that are too big to carry in one hand — he said Bloomscape’s packing and shipping methods can accommodate everything from a 10-inch aloe plant to a five-foot bird of paradise.

Bloomscape also helps people care for their plants through its Plant Mom service, allowing customers to ask for advice from an expert. The Plant Mom is, in fact, Mast’s mother Joyce, who has more than 40 years of horticulture experience.

Mast said the service is designed to replicate his own experience texting his Mom for help when his plants weren’t doing well: “We wanted to figure out how to do this in a way that didn’t feel like tech support, that actually felt convenient, warm and helpful.” (Bloomscape has since hired other experts to support her.)

Mast added that he sees the free service as “this tremendous opportunity to create value,” particularly since “people who feel confident that they’re going to be able to keep their plants alive go and buy more plants.”

Ultimately, Mast’s vision is for Bloomscape to be involved in “plant life in every area of the home and garden.”

The new round was led by Revolution Ventures, with participation from Endeavor, as well as Allbirds co-founder Joey Zwillinger, Away co-founder Jen Rubio, Eventbrite co-founder Kevin Hartz, Harry’s co-founder Jeff Raider, Quora co-founder Charlie Cheever and Warby Parker co-founders Neil Blumenthal and Dave Gilboa.

“Plants are a highly fragmented, fast growing industry, but the market has been slow to come online – warehousing and shipping living things is hard,” Revolution Ventures partner Clara Sieg said in a statement. “Drawing on five generations of horticultural experience, Justin and the Bloomscape team combines the ease of e-commerce with care and maintenance resources in a beautifully branded, consumer-centric experience that empowers even the least green thumbed among us to be successful plant parents.”

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Aug
01

People are calling Ninja a 'sellout' over his big deal to abandon Amazon's Twitch for Microsoft's Mixer (MSFT, AMZN)

Tyler "Ninja" Blevins, the most followed streamer on Twitch, is already facing backlash after announcing that he'll be leaving the platform for Microsoft's streaming service, Mixer. Ninja currently boasts more than 14 million followers on Twitch — more than twice as many as the second-most popular account.

While Microsoft is clearly betting that this exclusive partnership with Ninja will bring that massive audience to Mixer, upset Twitch users have already started slamming the superstar for swapping platforms.

It's not clear exactly what Mixer offered Ninja to secure the exclusive partnership, or how long the deal will last. Viewers will still be able to watch Ninja for free on Mixer, and people who paid to subscribe to Ninja's Twitch stream will be allowed to transfer their subscription to another Twitch user at no additional cost.

Twitch removed Ninja's verified checkmark from his account shortly after the announcement, but his channel remains open.

When asked about his departure, Twitch offered the following statement: "We've loved watching Ninja on Twitch over the years and are proud of all that he's accomplished for himself and his family, and the gaming community. We wish him the best of luck in his future endeavors."

Despite the well wishes from Twitch, some have already started criticizing Ninja for moving to Mixer, even before his first official stream on the platform, which is expected to go down on Friday, August 2nd.

Ninja's Mixer debut will come live from Lollapalooza 2019. His stream will broadcast from a Red Bull-sponsored studio from August 2 through August 4 starting at 12 p.m. CT each day.

Read more: Ninja wants to be more than just 'the Fortnite Guy,' but the world's most popular gamer is headed into uncharted territory

While there have been plenty of harsh responses, some people have credited Ninja for making a wise business decision. The streamer is best known for playing "Fortnite," but he has said he wants to expand his repertoire and be open to more opportunities.

Even before this news, data from Streamlabs showed that despite his massive number of followers, Ninja had started to fall behind other Twitch streamers in actual viewership this year. The move to Mixer seems to come as his popularity on Twitch has passed some kind of inflection point.

Ninja's move to Mixer seems likely to provide him greater financial security, but it remains to be seen if he can maintain the same level of viral popularity on the platform, which is far less visible and generally less popular than Twitch.

In the past Ninja has talked about the struggle to main subscribers on Twitch, including losing 40,000 paying subscribers during a two-day trip — the equivalent of $100,000 in monthly income.

Original author: Kevin Webb

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Feb
07

February 19 – Rendezvous Meetup to Discuss How to Compete with Heavily Funded Competitors - Sramana Mitra

Three Republican Congressman on the House Oversight Committee have some questions for Amazon CEO Jeff Bezos about the security of Amazon's cloud, Amazon Web Services.

They sent a letter to Amazon on Thursday expressing concerns about the Capital One breach and the underlying security of AWS.

Amazon, with its market leading cloud, is widely considered to be the frontrunner for a winner-take-all contract to provide cloud services for the defense department. This contract, known as the Joint Enterprise Defense Infrastructure (JEDI), is worth up to $10 billion over 10 years.

The lawmakers who sent the letter are Jim Jordan (R-OH); Michael Cloud (R-TX) and Mark Meadows (R-NC), and it was sent in response to Capital One's major hack, and AWS's role in that hack.

A former AWS employee, Paige Thompson, has been arrested and accused of being behind the attack. Capital One famously uses AWS. That hack affected the personal information of over 100 million people, including some Social Security and bank-account numbers.

AWS has acknowledged in other news reports that Thompson was a former employee and that Capital One is one of its customers. But Capital One has said that Amazon was not at fault, and the criminal complaint seems to back that up. The complaint says that the hacker discovered and used a "misconfiguration" of a computer security device known as a firewall.

A misconfiguration is a common mistake made with software and it doesn't indicate any inherent security vulnerabilty in the software or the underlying hardware. That underlying infrastructure is the part that Amazon provides. Capital One even credited the cloud for helping it find and analyze the hack quickly, in 10 days.

"AWS services or infrastructure were not compromised in any way," a person familiar with the matter told Business Insider.

Still, lawmakers say that they want to investigate because the government is on the brink of trusting AWS with some of the nation's most sensitive data.

"Because AWS will provide the trusted Internet connection and cloud support for the 2020 Census and could potentially run the Department of Defense's Joint Enterprise Defense Infrastructure cloud computing system, the Committee may carefully examine the consequences of this breach," the letter said.

Amazon should be equipped to respond. It has already achieved an armload of federally mandated security certifications and is the cloud of choice for a number of federal agencies.

But the fact that these lawmakers have brought up the JEDI contact is interesting. JEDI competitors have been lobbying President Trump to try and stop the award from going to Amazon, the biggest cloud competitor out there. Such pressure means that Microsoft has become a real contendor for the contract, even though Amazon is said to have more of the cloud features that department departments want in a cloud provider.

On Thursday, Trump's Secretary of Defense put the award of this contract on pause so his office could personally review it. And the three Republican congressmen are known to be vocal supporters of Trump.

Washington's anomosity towards Amazon these days seems to be one of the few things that both parties agree on. Trump has routinely fueded with Amazon CEO Jeff Bezos, who also owns the Washington Post. And the FTC has begun asking questions about Amazon.

Meanwhile Democrat presidential hopefuls have been slamming Amazon for paying no federal taxes with some, like Elizabeth Warren, even calling for Amazon to be broken up.

Original author: Julie Bort

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Aug
01

Software intelligence company Dynatrace soared 49% on its first day of trading. Its top execs explain how a 'technology refresh' helped the company grow. (DT)

On Thursday, Dynatrace became the latest tech company to go public — and soared as high as 58% in its first day of trading, before closing the day up 49% at $23.85.

The software intelligence company, which is majority-owned by private equity firm Thoma Bravo, creates software that helps companies monitor and manage their business applications, spotting performance bottlenecks and spotting cybersecurity problems. It competes with companies like Cisco and Broadcom.

In 2014, Thoma Bravo bought a company called Compuware for $2.5 billion. That same year, Thoma Bravo took some of Compuware's business and spun it out as an independent company that we now know as Dynatrace, though it kept a controlling interest.

Dynatrace raised $570 million in its IPO, which it sees as giving it some fuel to continue chasing growth.

"This is a huge opportunity with this market," Bernd Greifeneder, founder and CTO of Dynatrace, told Business Insider. "It gives us the right funding to invest more. Honestly, I'm primarily driven by the best solutions for our customers."

According to that filing, Dynatrace posted revenues of $431 million in its 2019 fiscal year which ended March 31, up 8% from the previous year. It reported a net loss of $116 million in FY19, down from a profit of $9 million the previous year.

Dynatrace CFO Kevin Burns says that over the last three years or so, the company went through a "significant technology refresh." Before, Dynatrace sold traditional software licenses, but in the last two to three years, it transitioned to a subscription business.

Now, he says, over 80% of Dynatrace's revenue comes from subscriptions. The company saw 35% growth in subscription and services revenue in the most recent quarter.

"For the last couple of years, technology transformation, we've been starting an acceleration in revenue growth," Burns said.

This change in business model has been the biggest motivation for the company to go public, Burns says. With the faster pace of growth, he says, the company has a better position from which to reach customers, and being publicly traded

"We've got a lot of momentum in the business," Burns said. "As a public company, there's bigger podium to speak from."

Read more: Dynatrace, a Cisco and Broadcom rival, is going public in an IPO that could raise as much as $300 million

Burns says that going forward, he wants Dynatrace to continue on the path it's been on. It plans to continue growing its customers and hiring more talent to its company.

"We've been a market leader, a technology leader," Burns said. "We continue to reinvent and innovate. We want to continue to scale."

Dynatrace is the latest in a string of other enterprise tech companies, like Zoom, PagerDuty, CrowdStrike, Slack, Fastly, and Medallia, that have all gone public this year.

Got a tip? Contact this reporter via email at This email address is being protected from spambots. You need JavaScript enabled to view it., Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request. You can also contact Business Insider securely via SecureDrop.

Original author: Rosalie Chan

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Aug
01

DoorDash is buying its competitor Caviar from Square for $410 million as the red-hot delivery space continues to heat up (SQ)

DoorDash announced Thursday that it plans to buy competing delivery company Caviar from Square in a $410 million cash-and-stock deal.

Caviar, which operates in about thirty cities throughout the United States, was originally acquired by the payments company, helmed by Twitter founder Jack Dorsey, in 2014.

DoorDash said it was interested in buying the competitor in order to acquire its "leading technology and exceptional team." Gokul Rajaram, head of the Caviar division at Square, will join DoorDash as well, the company said, adding that the deal is expected to close this year.

"We have long-admired Caviar, which has a coveted brand, an exceptional portfolio of premium restaurants and leading technology," DoorDash CEO Tony Xu said in a press release.

The acquisition further enhances the breadth of our merchant selection, enabling us to offer customers even more choice when they order through DoorDash. We look forward to welcoming the Caviar team to DoorDash and expanding our partnership with Square in the future."

Shares of Square sank as much as 8% in after-hours trading Thursday Markets Insider Shares of Square sank as much as 8% in after-hours trading following the Caviar deal's announcement, which coincided with a quarterly earnings report that was mostly in-line with Wall Street's expectations.

DoorDash came under fire in July for a controversial tipping policy, which it eventually changed, after backlash from customers and workers. Under the old system, some customer tips were counted towards a delivery partner's guaranteed base pay. Tips are now always counted on top of a minimum base rate, Xu announced in late July.

Read more: We asked Uber, Lyft, Instacart and other gig-economy startups how much of your tips go directly to their workers

DoorDash's acquisition is the latest in a string of delivery startup mergers in the red-hot industry. Earlier this week, Delivery.com announced it would acquired Mr. Delivery, a smaller competitor based in Austin, Texas. In July, two European delivery powerhouses, Takeaway and Just Eat, merged in a $10 billion deal. Amazon, meanwhile, has backed another European competitor, London-based Deliveroo.

"We are increasing our focus on and investment in our two large, growing ecosystems—one for businesses and one for individuals," Square CEO Jack Dorsey said in the press release. "This transaction furthers that effort, and we believe partnering with DoorDash provides valuable and strategic opportunities for Square."

Carmen Reinicke contributed to this report.

Original author: Graham Rapier

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Aug
01

August 7 – Rendezvous Meetup to Discuss How to Compete with Heavily Funded Competitors - Sramana Mitra

For entrepreneurs interested to meet and chat with Sramana Mitra in person, please join us for our bi-monthly and informal group meetups. If you are living in the San Francisco Bay Area or are just...

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Original author: Maureen Kelly

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Jul
12

Thought Leaders in Cloud Computing: Fred Voccola, CEO of Kaseya (Part 4) - Sramana Mitra

A Wall Street analyst says some investors now see Red Hat CEO Jim Whitehurst as a likely successor to IBM chief Ginni Rometty, in what could be the most meaningful result of IBM's blockbuster $34 billion acquisition.

IBM closed its acquisition of Red Hat three weeks ago, and on Thursday unveiled its ambitious plan for the open source cloud software company. The acquisition was a controversial move that some observers said would lead to another failed megamerger. A big worry is that Red Hat would lose its edge under IBM given the two companies diverse cultures.

Morgan Stanley analyst Katy Huberty noted that one of the risks in big mergers is that the "acquired company loses key executives, sales or R&D teams, diluting the value of intangibles spanning culture, brand and customer relationships."

But that may not be a worry with the IBM-Red Hat merger.

"In the case of Red Hat, Jim Whitehurst will remain with IBM and is viewed by many investors as a potential CEO successor," Huberty wrote in a research note.

Whitehurst's possible ascent to the IBM's top post has come up in media reports in the past. The latest speculation on Whitehurst's IBM future comes at a time IBM is unveiling its ambitious plans for Red Hat, which it says will be key in its bid to dominate the hybrid cloud market. IBM is meeting with investors on Friday "to talk about our go-to-market strategy with Red Hat," a spokesperson told Business Insider.

Red Hat's products are popular among developers and could potentially expand the tech giant's reach in enterprise cloud.

IBM certainly needs such a boost. The company has seen its revenue decline in 26 of the last 29 quarters.

Known as a corporate powerhouse that dominated the enterprise tech market for decades, IBM found itself outmaneuvered in the rapid growth of the cloud, which allowed businesses to set up and maintain computing networks on web-based platforms. That market is dominated by the likes of Amazon, Microsoft and Google.

But IBM has been pushing for a bigger cloud presence by zeroing in on the hybrid cloud market, where businesses store and process data and use applications on a public cloud, while keeping a significant portion of the workload in their own data centers.

Huberty of Morgan Stanley resumed coverage of IBM on Thursday with an overweight rating, which is equivalent to a buy, based on recent trends in IBM's business and the potential gain from Red Hat.

"IBM is in the latter innings of a transformation meant to return the company to growth and margin expansion, both of which kicked in over the past year and should accelerate post the closing of the Red Hat acquisition."

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Original author: Benjamin Pimentel

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Aug
01

Pinterest's stock pops more than 12% after beating Wall Street's Q2 targets (PINS)

Pinterest raised its revenue forecast for the rest of the year on Thursday after reporting second quarter results that came in well above Wall Street targets, sending the social media company's stock soaring more than 12% in after-hours trading.

Pinterest's revenue in the second quarter increased 62% year-over-year, to roughly $236 million, as the number of consumers and advertisers using the platform grew. In his second earnings report since taking Pinterest public in in April, CEO Ben Silbermann said the company reached 300 million monthly active users (MAUs) by the end of the second quarter, up from the 231 million MAUs (or, 30%) it had during the same period the year prior.

Silbermann said in prepared remarks that the company made progress diversifying its roster of advertisers during the quarter and improved its tools for marketers to measure the effectiveness of their spending.

Here are the key numbers from Pinterest's Q2 financial report:

Revenue: $261.3 million, compared to $235.8 million expected by analysts, and up 62% year-over-year. Adjusted loss per share:-$0.06, compared to -$0.08 expected by analysts. Full year 2019 revenue outlook: $1.095 billion to $1.115 billion, versus its previous forecast of $1.055 billion to $1.080 billion. Monthly Active Users (MAUs): 300 million, up from 231 million during the same period the year prior.

On the heels of strong earnings reports recently from some of Silicon Valley's top tech companies, Pinterest joined in the hot streak by posting $261 million in revenues for Q2, up 62% from the same period the year prior.

Although Pinterest is still relatively tiny compared to tech giants like Facebook and Google, some analysts have pointed to its positioning as an advantage — as the company will likely dodge the looming antitrust investigations facing the industry's largest companies. Analysts also see Pinterest's avoidance of any privacy-related issues, as well as its high-potential ad products as reasons the company could fare well in the near term.

Original author: Nick Bastone

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