Jan
21

Cynicism in Silicon Valley

As I was reading The Atlantic article Silicon Valley Abandons the Culture That Made It the Envy of the World I kept flashing to the end of Anna Wiener’s awesome memoir Uncanny Valley. And it was no surprise to see this article in the Boulder Daily Camera titled Big tech in hot seat at congressional hearing at CU Boulder.

Readers of this blog and my book Startup Communities know that I’m a huge fan of AnnaLee Saxenian. She has a great quote in The Atlantic article.

This is a full reversal of the language that tech promoters used to sell Silicon Valley–style innovation and competitiveness for decades. Saxenian has noticed the change in how the Valley describes itself, or at least in how the dominant firms do. “Advocacy of the small, innovative firm and entrepreneurial ecosystem is giving way to more and more justifications for bigness (scale economics, competitive advantage, etc.),” Saxenian wrote to me in an email. “The big is beautiful line is coming especially from the large companies (Facebook, Google, Amazon, Apple) that are threatened by antitrust and need to justify their scale.”

Margaret O’Mara, who wrote The Code: Silicon Valley and the Remaking of America, also has a good reminder.

“The story the Valley told about itself has been very much a small-is-beautiful story since the 1970s,” O’Mara told me. “It has a politics—this Vietnam-era rejection of the military-industrial complex, rejection of the mainframe, Big Business, Big Government, big universities.” This led people to take risks and launch new projects and firms. Entrepreneurs from all over the world migrated to a place where people understood why they wanted to start companies. And the idea even embedded itself right near the heart of the Valley, at Google. The company’s slogan, “Don’t be evil”, had a particular meaning when it was adopted around the millennium. In the classic Valley mind-set, “evil is bigness of all kinds,” O’Mara said.

The techlash is in full bloom and Silicon Valley is in the center of it. Ironically, of the three public companies that have > $1 trillion market caps, one of them (Microsoft) is headquartered in Seattle, which is definitely not part of Silicon Valley. Oh, and Amazon … Nonetheless, it’s part of the pending mess that is going to hit all of society very hard in the next few years, as the collision between the various factors—and factions—around innovation are going to be profound.

I expect historians will look back on this time with curiosity. They will wonder why there is such a huge disconnect between what is said. what is wanted, and what is done. Here are a few recent artifacts to ponder.

And, in case you thought the government was the solution, here are a few more to read.

Every time someone tells me they are going to “change the world” or “put a dent in the universe”, I think to myself, “For better, or for worse?”

Original author: Brad Feld

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Jan
21

Thought Leaders in Cyber Security: Portshift CEO Ran Ilany (Part 2) - Sramana Mitra

Ran Ilany: The second thing that we’re doing is authenticating the communication of those workloads. That is to say, the actual identity of the workload is injected into the traffic stream so that...

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Original author: Sramana Mitra

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Jan
21

Thought Leaders in Cyber Security: Portshift CEO Ran Ilany (Part 1) - Sramana Mitra

This interview puts the spotlight on a highly specialized area of cyber security, identity-based workload protection. Sramana Mitra: Let’s start by introducing our audience to yourself as well as to...

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Original author: Sramana Mitra

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Oct
13

IBM launches AI service to assist companies with climate change analysis

San Francisco and Lagos-based fintech startup Flutterwave has raised a $35 million Series B round and announced a partnership with Worldpay FIS for payments in Africa.

With the funding, Flutterwave will invest in technology and business development to grow market share in existing operating countries, CEO Olugbenga Agboola — aka GB — told TechCrunch.

The company will also expand capabilities to offer more services around its payment products.

More than payments

“We don’t just want to be a payment technology company, we have sector expertise around education, travel, gaming, e-commerce, fintech companies. They all use our expertise,” said GB.

That means Flutterwave will provide more solutions around the broader needs of its clients.

The Nigerian-founded startup’s main business is providing B2B payments services for companies operating in Africa to pay other companies on the continent and abroad.

Launched in 2016, Flutterwave allows clients to tap its APIs and work with Flutterwave developers to customize payments applications. Existing customers include Uber, Booking.com and e-commerce company Jumia.

In 2019, Flutterwave processed 107 million transactions worth $5.4 billion, according to company data.

Flutterwave did the payment integration for U.S. pop-star Cardi B’s 2019 performances in Nigeria and Ghana. Those are two of the countries in which the startup operates, in addition to South Africa, Uganda, Kenya, Tanzania, Zambia, the U.K. and Rwanda.

“We want to scale in all those markets and be the payment processor of choice,” GB said.

The company will hire more business development staff and expand its developer team to create more sector expertise, according to GB.

“Our business goes beyond payments. People don’t want to just make payments, they want to do something,” he said. And Fluterwave aims to offer more capabilities toward what those clients want to do in Africa.

Olugbenga Agboola, aka GB

“If you are a charity that wants to raise money for cancer research in Ghana, or you want to sell online, or you’re Cardi B…who wants to do concerts in Africa…we want to be able to set up payments, write the code and create the platform for those needs,” GB explained.

That also means Flutterwave, which built its early client base across global companies, aims to serve smaller African businesses, including startups. Current customers include African-founded tech companies, such as moto ride-hail venture Max.ng.

Worldpay partnership

The new round makes Flutterwave the payment provider for Worldpay in Africa.

“With this partnership, any Worldpay merchant in Europe or the U.S. can accept any African payment. If someone goes to pay Netflix with an African card, it just works,” GB said.

In 2019, Worldpay was acquired for a reported $35 billion by FIS, a U.S. financial services provider. At the time of the purchase, it was projected the two companies would generate revenues of $12 billion annually, yet neither has notable presence in Africa.

Therein lies the benefit of collaborating with Flutterwave.

FIS’s Head of Ventures Joon Cho confirmed the partnership with TechCrunch. FIS also backed Flutterwave’s $35 million Series B. US VC firms Greycroft and eVentures led the round, with participation of Visa, Green Visor and African fund CRE Venture Capital.

Flutterwave’s latest funding brings the company’s total investment to $55 million and follows a year in which the fintech venture announced a series of weighty partnerships.

In July 2019, the startup joined forces with Chinese e-commerce company Alibaba’s Alipay to offer digital payments between Africa and China.

The Alipay collaboration followed one between Flutterwave and Visa to launch a consumer payment product for Africa, called GetBarter.

Flutterwave and African fintech

Flutterwave’s $35 million round and latest partnership are among the reasons the startup has become a standout in Africa’s digital-finance landscape.

As a sector, fintech gains the bulk of dealflow and the majority of startup capital flowing to African startups annually. VC to Africa totaled $1.35 billion in 2019, according to WeeTracker’s latest stats.

While a number of payment startups and products have scaled — see Paga in Nigeria and M-Pesa in Kenya — the majority of the continent’s fintech companies are P2P in focus and segregated to one or two markets.

Flutterwave’s platform has served the increased B2B business payment needs spurred by the decade of growth and reform that has occurred in Africa’s core economies.

The value the startup has created is underscored not just by transactional volume the company generates, but the partnerships it has attracted.

A growing list of the masters of the payment universe — Visa, Alipay, Worldpay — have shown they need Flutterwave to do finance in Africa.

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Jan
21

Stasher, the luggage storage app for travelers, raises $2.5M additional funding

Stasher, the luggage storage app for travelers, has raised $2.5 million in additional funding. Leading the round is VentureFriends, along with various angels, including Johan Svanstrom, former president of Expedia-owned Hotels.com.

Launched in 2015, and now calling itself a “sharing economy solution” to luggage storage, the Stasher marketplace and app connects travelers, event attendees and vacation rental guests with local shops and hotels that can store their luggage on a short to medium-term basis.

Insurance is included with each booking, and items stored at a StasherPoint are covered for damage, loss and theft up to the value of £1,000.

Meanwhile, the revenue share for hosts is roughly 50% of the storage fee. The idea is that brick and mortar shops can access an additional revenue stream, thanks to the so-called sharing economy.

More broadly, the problem Stasher wants to solve is that having to carry around luggage can often stop you enjoying part of your day when traveling, time that is otherwise wasted. “If you’ve ever been forced out of your Airbnb at 10am, you may be familiar with the issue,” co-founder Anthony Collias told me back in 2018.

To that end, the Stasher network has grown a lot since then, and now has a presence in 250 cities, up from 20. This has included bringing the luggage storage app to the U.S. and Australia.

This has seen the startup partner with the likes of Klook, Sonder, Marriott and Hotels.com, along with brands such as Premier Inn, Expedia, Holiday Express, OYO and Accor.

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Jan
21

Berlin’s Home pulls in €11M Series A for its landlord and tenant solution

Home, the Berlin-based startup that set out offering an app to help landlords manage rentals but has since pivoted to solve the landlord-tenant problem more directly, has raised €11 million in Series A funding.

Backing the round is Capnamic, EQT Ventures, FJ Labs and Redalpine, whilst the new capital will be used for “product innovation,” particularly on the tenant side. In addition, Home plans to bring its offering to new cities.

“[We] started with an app for landlords, which tracked rent payments etc., but Home is now a managed marketplace for landlords and tenants,” Home co-founder and CEO Thilo Konzok tells me.

“Home now acts as both the tenant and the landlord. Landlords get an instant offer and sign a contract with Home. A digital lock is fitted at the apartment and the landlord then simply gets rent — no maintenance stresses, financial risks etc.”

The idea of essentially becoming a full-stack landlord (my words, not Konzok’s) is so that property owners don’t need to become experts in renting apartments, understanding legislation, maintenance and knowing what rent to charge.

“Tenants also have a far better, more transparent experience,” argues the Home CEO. This includes the ability to visit and book apartments themselves, thanks to Home’s use of smart locks. “If they need anything, they can reach Home 24/7 via the app,” he adds.

The proposition is currently available in Berlin, Munich and Hamburg, and appears to be proving popular. Konzok says that every month more than 1,100 landlords request an offer from Home. To be able to accept more of these requests, the company will expand into new cities throughout 2020. Specifically, this should see seven more German cities by April 2020 and one international city in October 2020.

Adds Jörg Binnenbrücker, managing partner at Capnamic: “When we first met Thilo and Moritz we were impressed by their vision of creating a new asset class and form of ownership. Capnamic is excited to have found the best team to bring this new housing experience to everyone and capture a massive market opportunity.”

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Jan
20

1Mby1M Virtual Accelerator Investor Forum: With Anand Rajaraman of rocketship.vc (Part 1) - Sramana Mitra

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Anand Rajaraman was recorded in October 2019. Anand...

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Original author: Sramana Mitra

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Jan
20

Automattic Beefs up its Platform - Sramana Mitra

According to W3Techs, WordPress is used by 35% of all websites and it dominates the content management system market with a market share of 62.3%. Automattic, the company behind WordPress, last year...

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Original author: Sramana_Mitra

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Apr
16

The CEO of billion-dollar startup Airtable explains why its founders decided on a corporate culture before they even had a product

Amy and I didn’t feel like taking a Christmas or New Year’s vacation this year so we just hung around Boulder, worked, and did our thing. We then decamped to Mexico last week for warmth, sun, beach, and books. News flash: there are a lot fewer people at a fancy resort in Mexico in the third week of January.

It was a good reading week.

How to Raise an Adult: Break Free of the Overparenting Trap and Prepare Your Kid for Success: We don’t have kids, but a friend recommended this. I decided to read it to see if any of it applied to being an investor or board member in a company. Yup – a bunch of it was spot on. After reading it, I’m still glad I don’t have kids.

The Heap: A Novel: This one ended up on my Kindle because of my weekly perusal of the NY Times Book Review. The premise intrigued me. A 500 story tall building collapses in the desert and a community develops around it to excavate it. Once it got rolling, it moved quickly, but the interwoven historical backstory became a little tedious. But, for a first novel, it’s a great effort.

Veil: I got to read a draft of Eliot Peper‘s new book. Wowza. Elliot has turned into an incredible writer who totally dominates a near-term science fiction novel.

Atomic Accidents: A History of Nuclear Meltdowns and Disasters: From the Ozark Mountains to Fukushima: Yum yum. Todd Vernon pointed me at this one. It was long, chewing, and spectacular. After watching Chernobyl on HBO, I’ve become fascinated with nuclear energy. Unfortunately, it’s impossible to get a short course on it and I’ve thought about going back to MIT to get a degree in Course 22. While that’s a pretty steep hill to climb, I’m just enjoying a bunch of books for now. And yes, count me on the side of more nuclear.

Uncanny Valley: A Memoir: Loved it. Fantastic. Go get it right now. I particularly enjoyed how the author called people and companies out without naming them. This book nourished my inner Silicon Valley cynic.

Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones. This one was recommended by Katie Elliott. I was hoping it was about nuclear energy, but it wasn’t. Amy looked over my shoulder while I was reading it and said, “James Clear’s book. You don’t need to read it because you do all that stuff already.” I read it anyway, one page at a time.

I sense an annual mid-January off-the-grid vacation in a warm place for the rest of my time on this planet.

Original author: Brad Feld

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Jan
20

Open banking platform Tink raises €90M at a post-money valuation of €415M

Tink, the European open banking platform, is disclosing €90 million in new funding, just 11 months after the Sweden-headquartered company announced a €56 million round of funding.

Co-leading this new round is Dawn Capital, HMI Capital and Insight Partners. The round also includes the incumbent postal operator and Italy’s largest financial services network Poste Italiane as a new investor, along with existing investors Heartcore Capital, ABN AMRO Ventures and BNP Paribas’ venture arm, Opera Tech Ventures.

The injection of capital will enable Tink to accelerate its European expansion plans and further develop its product accordingly.

“During 2020, we are committed to building out our platform with more bank connections and, on top of that, expand our product offering,” Tink co-founder and CEO Daniel Kjellén tells me. “Our aim is to become the preferred pan-European provider of digital banking services and increase our local presence across the region”.

Originally launched in Sweden in 2013 as a consumer-facing finance app with bank account aggregation at its heart, Tink has long since repositioned its offering to become a fully-fledged open banking platform, requisite with developer APIs, to enable banks and other financial service providers to ride the open banking/PSD2 train.

Through its various APIs, Tink provides four pillars of technology: “Account Aggregation,” “Payment Initiation,” “Personal Finance Management” and “Data Enrichment.” These can be used by third parties to roll their own standalone apps or integrated into existing banking applications.

“We have grown significantly, both in terms of our platform’s connectivity and as an organisation,” says Kjellén, when asked what has changed in the last 11 months. “We have during the year launched our platform in Belgium, Austria, the U.K., Germany, Spain, the Netherlands, Portugal and Italy. In total, our open banking platform is right now live in twelve European markets and connects to more than 2,500 banks that reach more than 250 million bank customers across Europe”.

The company’s headcount has also grown a lot, too. In the beginning of 2019 it sat at around 120, but is now at 300 employees. Most but not all are based in its headquarters in Stockholm, alongside local offices including recently opened sites in Paris, Helsinki, Oslo, Madrid, Warsaw, Milan and Copenhagen.

Perhaps better positioned than most, I asked Kjellén what types of use cases are really resonating with open banking, given that many industry commentators don’t think it has quite yet lived up to the hype.

“Many of our customers are seeing the advantage of being able to build smart multi-banking products with the data that they are now able to fetch and use to add value for their end users,” he says. “The use cases that really show the potential of open banking that we see our customers thriving with are those that leverage the full value of the financial data to deliver truly personalised experiences at scale, or remove friction in the user journey to a minimum, such as proactive price comparison, enhanced credit scoring and onboarding. Use cases such as these show that the consumer’s data can really work for them and bring improvements to their everyday interactions”.

One example Kjellén gives me is Klarna, the checkout credit provider, which he says is using open banking to provide a “wonderful” in-app experience. “I love that I as a consumer can now choose to change my mind and slice up the payments for a purchase I have already paid in full with my bank card,” he explains. “This shows how the potential of open banking goes way beyond just accessing a transaction history and allows the most innovative players, such as Klarna, to create a new standard in consumer experience”.

Kjellén says another standout use-case is using PSD2 APIs to verify identity to complete any type of customer registration completely automatically. “[That is] something that I find very innovative. It automates the previously time-consuming administration on the business side and delivers a completely seamless digital service on the end user side,” he says.

Meanwhile, Tink says its customer numbers have “quadrupled” in the past year, and includes PayPal, Klarna, NatWest, ABN AMRO, BNP Paribas Fortis, Nordea and SEB. “More than 4,000 developers are currently using Tink to build and power new innovative financial services and products,” adds Kjellén.

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Jan
20

Catching Up On Readings: IT Spending 2020 - Sramana Mitra

This report from Gartner forecasts the worldwide IT spending to grow 3.4% to $3.9 trillion in 2020 driven by the adoption of SaaS. For this week’s posts, click on the paragraph links. Tech...

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Original author: jyotsna popuri

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Oct
14

Treyarch unveils the story for Call of Duty: Vanguard — Zombies

Facebook spying on teens, Twitter accounts hijacked by terrorists, and sexual abuse imagery found on Bing and Giphy were amongst the ugly truths revealed by TechCrunch’s investigating reporting in 2019. The tech industry needs more watchdogs than ever as its size enlargens the impact of safety failures and the abuse of power. Whether through malice, naivety, or greed, there was plenty of wrongdoing to sniff out.

Led by our security expert Zack Whittaker, TechCrunch undertook more long-form investigations this year to tackle these growing issues. Our coverage of fundraises, product launches, and glamorous exits only tell half the story. As perhaps the biggest and longest running news outlet dedicated to startups (and the giants they become), we’re responsible for keeping these companies honest and pushing for a more ethical and transparent approach to technology.

If you have a tip potentially worthy of an investigation, contact TechCrunch at This email address is being protected from spambots. You need JavaScript enabled to view it. or by using our anonymous tip line’s form.

Image: Bryce Durbin/TechCrunch

Here are our top 10 investigations from 2019, and their impact:

Facebook pays teens to spy on their data

Josh Constine’s landmark investigation discovered that Facebook was paying teens and adults $20 in gift cards per month to install a VPN that sent Facebook all their sensitive mobile data for market research purposes. The laundry list of problems with Facebook Research included not informing 187,000 users the data would go to Facebook until they signed up for “Project Atlas”, not receiving proper parental consent for over 4300 minors, and threatening legal action if a user spoke publicly about the program. The program also abused Apple’s enterprise certificate program designed only for distribution of employee-only apps within companies to avoid the App Store review process.

The fallout was enormous. Lawmakers wrote angry letters to Facebook. TechCrunch soon discovered a similar market research program from Google called Screenwise Meter that the company promptly shut down. Apple punished both Google and Facebook by shutting down all their employee-only apps for a day, causing office disruptions since Facebookers couldn’t access their shuttle schedule or lunch menu. Facebook tried to claim the program was above board, but finally succumbed to the backlash and shut down Facebook Research and all paid data collection programs for users under 18. Most importantly, the investigation led Facebook to shut down its Onavo app, which offered a VPN but in reality sucked in tons of mobile usage data to figure out which competitors to copy. Onavo helped Facebook realize it should acquire messaging rival WhatsApp for $19 billion, and it’s now at the center of anti-trust investigations into the company. TechCrunch’s reporting weakened Facebook’s exploitative market surveillance, pitted tech’s giants against each other, and raised the bar for transparency and ethics in data collection.

Protecting The WannaCry Kill Switch

Zack Whittaker’s profile of the heroes who helped save the internet from the fast-spreading WannaCry ransomware reveals the precarious nature of cybersecurity. The gripping tale documenting Marcus Hutchins’ benevolent work establishing the WannaCry kill switch may have contributed to a judge’s decision to sentence him to just one year of supervised release instead of 10 years in prison for an unrelated charge of creating malware as a teenager.

The dangers of Elon Musk’s tunnel

TechCrunch contributor Mark Harris’ investigation discovered inadequate emergency exits and more problems with Elon Musk’s plan for his Boring Company to build a Washington D.C.-to-Baltimore tunnel. Consulting fire safety and tunnel engineering experts, Harris build a strong case for why state and local governments should be suspicious of technology disrupters cutting corners in public infrastructure.

Bing image search is full of child abuse

Josh Constine’s investigation exposed how Bing’s image search results both showed child sexual abuse imagery, but also suggested search terms to innocent users that would surface this illegal material. A tip led Constine to commission a report by anti-abuse startup AntiToxin (now L1ght), forcing Microsoft to commit to UK regulators that it would make significant changes to stop this from happening. However, a follow-up investigation by the New York Times citing TechCrunch’s report revealed Bing had made little progress.

Expelled despite exculpatory data

Zack Whittaker’s investigation surfaced contradictory evidence in a case of alleged grade tampering by Tufts student Tiffany Filler who was questionably expelled. The article casts significant doubt on the accusations, and that could help the student get a fair shot at future academic or professional endeavors.

Burned by an educational laptop

Natasha Lomas’ chronicle of troubles at educational computer hardware startup pi-top, including a device malfunction that injured a U.S. student. An internal email revealed the student had suffered a “a very nasty finger burn” from a pi-top 3 laptop designed to be disassembled. Reliability issues swelled and layoffs ensued. The report highlights how startups operating in the physical world, especially around sensitive populations like students, must make safety a top priority.

Giphy fails to block child abuse imagery

Sarah Perez and Zack Whittaker teamed up with child protection startup L1ght to expose Giphy’s negligence in blocking sexual abuse imagery. The report revealed how criminals used the site to share illegal imagery, which was then accidentally indexed by search engines. TechCrunch’s investigation demonstrated that it’s not just public tech giants who need to be more vigilant about their content.

Airbnb’s weakness on anti-discrimination

Megan Rose Dickey explored a botched case of discrimination policy enforcement by Airbnb when a blind and deaf traveler’s reservation was cancelled because they have a guide dog. Airbnb tried to just “educate” the host who was accused of discrimination instead of levying any real punishment until Dickey’s reporting pushed it to suspend them for a month. The investigation reveals the lengths Airbnb goes to in order to protect its money-generating hosts, and how policy problems could mar its IPO.

Expired emails let terrorists tweet propaganda

Zack Whittaker discovered that Islamic State propaganda was being spread through hijacked Twitter accounts. His investigation revealed that if the email address associated with a Twitter account expired, attackers could re-register it to gain access and then receive password resets sent from Twitter. The article revealed the savvy but not necessarily sophisticated ways terrorist groups are exploiting big tech’s security shortcomings, and identified a dangerous loophole for all sites to close.

Porn & gambling apps slip past Apple

Josh Constine found dozens of pornography and real-money gambling apps had broken Apple’s rules but avoided App Store review by abusing its enterprise certificate program — many based in China. The report revealed the weak and easily defrauded requirements to receive an enterprise certificate. Seven months later, Apple revealed a spike in porn and gambling app takedown requests from China. The investigation could push Apple to tighten its enterprise certificate policies, and proved the company has plenty of its own problems to handle despite CEO Tim Cook’s frequent jabs at the policies of other tech giants.

Bonus: HQ Trivia employees fired for trying to remove CEO

This Game Of Thrones-worthy tale was too intriguing to leave out, even if the impact was more of a warning to all startup executives. Josh Constine’s look inside gaming startup HQ Trivia revealed a saga of employee revolt in response to its CEO’s ineptitude and inaction as the company nose-dived. Employees who organized a petition to the board to remove the CEO were fired, leading to further talent departures and stagnation. The investigation served to remind startup executives that they are responsible to their employees, who can exert power through collective action or their exodus.

If you have a tip for Josh Constine, you can reach him via encrypted Signal or text at (585)750-5674, joshc at TechCrunch dot com, or through Twitter DMs

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Jan
19

Thought Leaders in Cyber Security: Portshift CEO Ran Ilany (Part 3) - Sramana Mitra

Sramana Mitra: Going back to the ecosystem, where do you sit in the ecosystem? Ran Ilany: We start with the vendors for container and security solutions that focus on scanning. We assume that what...

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Original author: Sramana Mitra

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Jan
18

Taiwan’s entrepreneurs move forward after tense presidential election

Last Saturday, Taiwanese voters re-elected President Tsai Ing-wen to her second term after an election that split the country among generational and ideological lines. A crucial issue were the differences in how Tsai, a member of the Democratic Progressive Party (DPP), and her main opponent, Han Kuo-yu of the Kuomintang (KMT), approach Taiwan’s fraught relationship with China.

Despite the highly polarizing run-up to the election, however, both the DPP and KMT have taken measures to foster entrepreneurship in Taiwan. Now that Tsai has won, many investors don’t expect a dramatic impact, but instead are keeping an eye on how policies put in motion by both parties will play out. They are also looking for political allies who understand the startup ecosystem in Taiwan, which is often overshadowed by large hardware OEMs and semiconductor companies.

Policy

Joseph Huang, an investment partner at Infinity Ventures, has worked with both the DPP and KMT as limited partners, and says “from our side, they are always asking for how to create more awareness of Taiwan startups, how do we help them with institutions, how do we help them more?”

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Jan
18

Startups Weekly: Plaid’s $5.3B acquisition is a textbook Silicon Valley win

Hi everyone, my name is Eric Eldon and I’m the new writer of the Startups Weekly newsletter. 

I’ll be picking my favorite explicitly startup-focused articles of the week for you from Extra Crunch (where I’m the editor now), as well as TechCrunch (where I was the co-editor years ago… long story). 

Some people tell us that TechCrunch doesn’t cover startups like it used to. I don’t know if that is true, but it is definitely hard to keep track of our startup coverage mixed in with the rest of our news.

This newsletter will highlight the best startup coverage on TechCrunch and Extra Crunch to help fix that.

I probably hate reading bad startup advice and analysis even more than you do, and not only because I’ve had to read a lot of it over the years as an editor. I’ve also started a few companies myself, and I’ve had the chance to experience exits, failures and venture backing.

I’ll be highlighting articles that I think address something significant about building a company, and I’ll tell you why each one is worth a read. 

There will also be some experiments. Thanks for reading! And if you want it in your inbox, you can subscribe here

Everybody loves Plaid

Plaid’s product is beyond boring to most people, but it is already a name brand to its enterprise users and across the greater startup world, as its stats and funding rounds have grown. The $5.3 billion outcome announced this week cements its status as a top SaaS/fintech startup story of this era, in addition to being a popular platform for developers who need to sync user payment data.

Alex Wilhelm was all over the news. He dug into Visa’s presentation explaining the purchase on Extra Crunch — it paid more than twice Plaid’s last valuation — and found the classic tale of a large, slow-moving incumbent strategically buying a hot younger company in order to grow into newer markets. Then he got comments for Extra Crunch from a range of analysts… who basically said the same thing. 

You can now tune into the latest TechCrunch Equity episode to hear him talk about it with our resident former VC Danny Crichton.

Atrium gets out of the human law firm business

Closely watched Atrium is shutting down the law firm to focus on the tech company. Founder Justin Kan tells Josh Constine on TechCrunch that this is part of the evolution toward providing a better tech service.

The law firm had been designed to provide the human touch in a way that machines couldn’t, but Kan says that lawyers do that great as third parties.

Many SaaS startups are trying to take on the back office processes of the 20th century. Atrium’s change will be another reason for them to go all-in on software, with humans not included.

PR expert says maybe don’t do PR right now

One of the most loved and feared people in tech communications today, Brooke Hammerling has been in the middle of key stories of the decade with founders young and old. And sometimes on the opposite side of me.

 She knows her stuff. Here’s one of my favorite gems from the full interview with Jordan Crook over on Extra Crunch:

If you’re an early-stage company, and you’re an unknown founder, and you’re coming out with your own take on something, you don’t want to spend your money on PR too early.

You want to spend that money on product development and engagement and engineering and so forth.

Big funds do the small funding rounds now

That’s the word on the street from our resident former VC, who was recently out in San Francisco visiting his many friends and professional acquaintances. Danny put his notes together for TechCrunch back in the comfort of his New York apartment, and found that everyone is raising huge rounds [emphasis his] — and it’s all about being there for the future. Plaid’s cap table is a good example.

One of my favorite quotes:

As one VC explained to me last week (paraphrasing), “What’s weird today is that you have firms like Sequoia who show up for seed rounds, but they don’t really care about … anything. Valuation, terms, etc. It’s all a play for those later-stage rounds.” I think that’s a bit of an exaggeration to be clear, but ultimately, those one million-dollar checks are essentially a rounding error for the largest funds. The real return is in the mega rounds down the road. 

He also noticed for TechCrunch that VCs today seem to be especially tired. You can tell him what you think about these observations at This email address is being protected from spambots. You need JavaScript enabled to view it..

(Photo by David Becker/Getty Images)

Home robots are making moves at CES

I have never been to CES and don’t plan to go, but Brian Heater always goes and this year he came back thinking that the home robot sector is getting serious.

His takeaway for Extra Crunch: 

There’s a cynical (and probably at least partially correct) view that these sorts of deals are publicity stunts — big companies using CES to demonstrate how forward-thinking they are about new technologies. But there’s something to be said for the show’s position at the forefront of such technologies. The products are real, even if wider use is hypothetical. And in an era when Amazon has deployed more than 100,000 robots across its U.S. fulfillment centers to enable next and same-day delivery, we’re well into the realm of real-world use.

Brian is also hosting a one-day TechCrunch conference focused on robotics startups at UC Berkeley in early March, for those who are focused on this space. The event last year was a huge hit and we’re looking forward to the next one. Follow the link to learn more. 

Will Silicon Valley win at weed?

Eaze has been one of the highest-profile cannabis distributors, but now it might be running out of cash, report Ingrid Owen and Josh Constine. There are many structural reasons why any cannabis business is very hard, legal or otherwise. 

But it’s interesting to take a look at who is succeeding in the consumer cannabis market and why.

One local example is Berner, a high school dropout in San Francisco who became a budtender and partnered with cannabis geneticists to create and promote the Girl Scout Cookies strain, and also became an international rap star (the main topic is his weed) and clothing designer.  

These days, he’s opening more and more Cookies retail cannabis outlets, including in Oakland and L.A., and cutting licensing and certification deals with a broad network of partners, (and claims to be turning down huge acquisition offers). Basically, his cannabis is also his modern multi-platform brand and the cool kids are into it. He does not appear to be running out of cash.

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Jan
18

Colors: Winter Forest, Monochrome - Sramana Mitra

I’m publishing this series on LinkedIn called Colors to explore a topic that I care deeply about: the Renaissance Mind. I am just as passionate about entrepreneurship, technology, and business, as I...

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Original author: Sramana Mitra

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Jan
18

LaunchDarkly CEO Edith Harbaugh explains why her company raised another $54M

This week, LaunchDarkly announced that it has raised another $54 million. Led by Bessemer Venture Partners and backed by the company’s existing investors, it brings the company’s total funding up to $130 million.

For the unfamiliar, LaunchDarkly builds a platform that allows companies to easily roll out new features to only certain customers, providing a dashboard for things like “canary launches” (pushing new stuff to a small group of users to make sure nothing breaks) or launching a feature only in select countries or territories. By productizing an increasingly popular development concept (“feature flagging”) and making it easier to toggle new stuff across different platforms and languages, the company is quickly finding customers in companies that would rather not spend time rolling their own solutions.

I spoke with CEO and co-founder Edith Harbaugh, who filled me in on where the idea for LaunchDarkly came from, how their product is being embraced by product managers and marketing teams and the company’s plans to expand with offices around the world. Here’s our chat, edited lightly for brevity and clarity.

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Jan
17

As Alphabet crests the $1T mark, SaaS stocks reach all-time highs of their own

Continuing our irregular surveys of the public markets, two things happened this week that are worth our time. First, a third domestic technology company — Alphabet — passed the $1 trillion market capitalization threshold. And, second, software as a service (SaaS) stocks reached record highs on the public markets after retreating over last summer.

The two milestones, only modestly related events, indicate how temperate the public waters are for technology companies today, a fact that should extend warmth into the private market where startups, and their venture capital backers, work.

The happenings are good news for technology startups for a number of reasons, including that major tech players have never had as much wealth in hand with which to buy smaller companies, and strong SaaS valuations help both smaller startups fundraise, and their larger brethren possibly exit.

Indeed, the stridently good valuations that major tech companies and their smaller siblings enjoy today should be just the sort of market conditions under which unicorns want to debut. We’ll continue to make this point so long as the public markets continue to rise, pricing tech companies that have already floated higher like the cliche’s own tide.

But while Alphabet, Microsoft and Apple are worth $3.68 trillion as a trio, and SaaS stocks are now worth 12.3x times their revenue (using enterprise value instead of market cap, for those keeping score at home), not every private, venture-backed company will necessarily benefit from public investor largesse.

What about tech-ish startups?

How much the current public-market tech valuation expansion will help companies that are increasingly sorted into the tech-enabled bucket isn’t clear; some companies that went public in 2019 were quickly spit up by investors unwilling to support valuations that matched or rose above their final private valuations. SmileDirectClub was one such offering.

The dividing line between what counts as tech — often fuzzy — appears to be slicing along gross margin lines, and the repeatability of business. The higher margin, and more recurring a company is, the more it’s worth. This market reality is why SaaS stocks’ recent return to form is not a surprise.

For Casper and One Medical, the first two venture-backed IPO hopefuls of the year, the more tech-ish they can appear between now and pricing the better. Because technology companies today are valued so highly, perhaps even a faint dusting of tech will save their valuations as they cross the chasm between private and adult.

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Jan
17

Eaze’s struggles reflect falling VC interest in cannabis startups

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Yesterday, TechCrunch reported that Eaze, a well-known cannabis-focused startup, is struggling to stay in business amidst a cash crunch, leadership turmoil, banking issues and a business model pivot. It’s a compelling, critical read.

The news, however, asks a question: How are other cannabis-focused startups faring? We’ll explore the question through the lens of fundraising and the public market results of public cannabis companies in Canada.

Fundraising

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Jan
17

Baraja’s unique and ingenious take on lidar shines in a crowded industry

It seems like every company making lidar has a new and clever approach, but Baraja takes the cake. Its method is not only elegant and powerful, but fundamentally avoids many issues that nag other lidar technologies. But it’ll need more than smart tech to make headway in this complex and evolving industry.

To understand how lidar works in general, consult my handy introduction to the topic. Essentially a laser emitted by a device skims across or otherwise very quickly illuminates the scene, and the time it takes for that laser’s photons to return allows it to quite precisely determine the distance of every spot it points at.

But to picture how Baraja’s lidar works, you need to picture the cover of Pink Floyd’s “Dark Side of the Moon.”

GIFs kind of choke on rainbows, but you get the idea.

Imagine a flashlight shooting through a prism like that, illuminating the scene in front of it — now imagine you could focus that flashlight by selecting which color came out of the prism, sending more light to the top part of the scene (red and orange) or middle (yellow and green). That’s what Baraja’s lidar does, except naturally it’s a bit more complicated than that.

The company has been developing its tech for years with the backing of Sequoia and Australian VC outfit Blackbird, which led a $32 million round late in 2018 — Baraja only revealed its tech the next year and was exhibiting it at CES, where I met with co-founder and CEO Federico Collarte.

“We’ve stayed in stealth for a long, long time,” he told me. “The people who needed to know already knew about us.”

The idea for the tech came out of the telecommunications industry, where Collarte and co-founder Cibby Pulikkaseril thought of a novel use for a fiber optic laser that could reconfigure itself extremely quickly.

We thought if we could set the light free, send it through prism-like optics, then we could steer a laser beam without moving parts. The idea seemed too simple — we thought, ‘if it worked, then everybody would be doing it this way,’ ” he told me, but they quit their jobs and worked on it for a few months with a friends and family round, anyway. “It turns out it does work, and the invention is very novel and hence we’ve been successful in patenting it.”

Rather than send a coherent laser at a single wavelength (1550 nanometers, well into the infrared, is the lidar standard), Baraja uses a set of fixed lenses to refract that beam into a spectrum spread vertically over its field of view. Yet it isn’t one single beam being split but a series of coded pulses, each at a slightly different wavelength that travels ever so slightly differently through the lenses. It returns the same way, the lenses bending it the opposite direction to return to its origin for detection.

It’s a bit difficult to grasp this concept, but once one does it’s hard to see it as anything but astonishingly clever. Not just because of the fascinating optics (something I’m partial to, if it isn’t obvious), but because it obviates a number of serious problems other lidars are facing or about to face.

First, there are next to no moving parts whatsoever in the entire Baraja system. Spinning lidars like the popular early devices from Velodyne are being replaced at large by ones using metamaterials, MEMS, and other methods that don’t have bearings or hinges that can wear out.

Baraja’s “head” unit, connected by fiber optic to the brain.

In Baraja’s system, there are two units, a “dumb” head and an “engine.” The head has no moving parts and no electronics; it’s all glass, just a set of lenses. The engine, which can be located nearby or a foot or two away, produces the laser and sends it to the head via a fiber-optic cable (and some kind of proprietary mechanism that rotates slowly enough that it could theoretically work for years continuously). This means it’s not only very robust physically, but its volume can be spread out wherever is convenient in the car’s body. The head itself also can be resized more or less arbitrarily without significantly altering the optical design, Collarte said.

Second, the method of diffracting the beam gives the system considerable leeway in how it covers the scene. Different wavelengths are sent out at different vertical angles; a shorter wavelength goes out toward the top of the scene and a slightly longer one goes a little lower. But the band of 1550 +/- 20 nanometers allows for millions of fractional wavelengths that the system can choose between, giving it the ability to set its own vertical resolution.

It could for instance (these numbers are imaginary) send out a beam every quarter of a nanometer in wavelength, corresponding to a beam going out every quarter of a degree vertically, and by going from the bottom to the top of its frequency range cover the top to the bottom of the scene with equally spaced beams at reasonable intervals.

But why waste a bunch of beams on the sky, say, when you know most of the action is taking place in the middle part of the scene, where the street and roads are? In that case you can send out a few high frequency beams to check up there, then skip down to the middle frequencies, where you can then send out beams with intervals of a thousandth of a nanometer, emerging correspondingly close together to create a denser picture of that central region.

If this is making your brain hurt a little, don’t worry. Just think of Dark Side of the Moon and imagine if you could skip red, orange and purple, and send out more beams in green and blue — and because you’re only using those colors, you can send out more shades of green-blue and deep blue than before.

Third, the method of creating the spectrum beam provides against interference from other lidar systems. It is an emerging concern that lidar systems of a type could inadvertently send or reflect beams into one another, producing noise and hindering normal operation. Most companies are attempting to mitigate this by some means or another, but Baraja’s method avoids the possibility altogether.

“The interference problem — they’re living with it. We solved it,” said Collarte.

The spectrum system means that for a beam to interfere with the sensor it would have to be both a perfect frequency match and come in at the precise angle at which that frequency emerges from and returns to the lens. That’s already vanishingly unlikely, but to make it astronomically so, each beam from the Baraja device is not a single pulse but a coded set of pulses that can be individually identified. The company’s core technology and secret sauce is the ability to modulate and pulse the laser millions of times per second, and it puts this to good use here.

Collarte acknowledged that competition is fierce in the lidar space, but not necessarily competition for customers. “They have not solved the autonomy problem,” he points out, “so the volumes are too small. Many are running out of money. So if you don’t differentiate, you die.” And some have.

Instead companies are competing for partners and investors, and must show that their solution is not merely a good idea technically, but that it is a sound investment and reasonable to deploy at volume. Collarte praised his investors, Sequoia and Blackbird, but also said that the company will be announcing significant partnerships soon, both in automotive and beyond.

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