Chime might call itself the “fastest-growing fintech in the U.S.,” but it has agreed to stop referring to itself as a “bank,” per a new report out of American Banker.

Evidently, the eight-year-old, San Francisco-based outfit was the target of an investigation by the California Department of Financial Protection and Innovation after Chime used “chimebank” in its website address, as well as used “bank” and “banking” elsewhere in its advertisements, according to the agency in a settlement agreement.

As noted by AB, Chime made the decision to settle ahead of a deadline imposed by the regulatory body.

The development won’t surprise anyone familiar with U.S. banking laws. No outfit can represent itself as a bank or credit union unless it’s licensed to engage in the business of banking. The commission that pushed back on Chime issues such licenses and regulates state-chartered banks in the state of California through the Department of Financial Protection and Innovation, and it said in the settlement that “at all relevant times herein, Chime was not licensed to operate as a bank in California or in any other jurisdiction, nor was it exempt from such licensure.”

Chime has at times attempted to draw a distinction between itself and a bank. When the company raised its most recent round of funding — a $485 million Series F round last September that valued the business at $14.5 billion — CEO Chris Britt told CNBC: “We’re more like a consumer software company than a bank . . . It’s more a transaction-based, processing-based business model that is highly predictable, highly recurring and highly profitable.”

Still, Chime, like many newer fintech companies, has seemingly embraced the term “neobank” and “challenger bank,” and perhaps it’s no wonder. It’s certainly easier to convey to consumers what it is selling, which is banking services that include — in this case — debit cards, spending accounts and savings accounts, all offered through users’ mobile phones.

Given the settlement, expect to see more startups like Chime make clearer that in most cases, they do not have a bank charter and instead are being provided services by banks that do. In Chime’s case, for example, it now makes more plain on its website that it is a “financial technology company” and “not a bank” and that its services are being provided by the The Bancorp Bank and Stride Bank, which are both FDIC members.

Early-stage startups — now is your time to shine at the TechCrunch Early Stage event on July 8 and 9. This is part two of the highly successful event from April where top experts train and teach founders how to build, launch and scale their companies. In April we hosted the inaugural TC Early Stage Pitch-Off with 10 top companies from around the globe. TC is on the hunt to feature a new batch of 10 companies this summer to pitch in front of TC editors, global investors, press and hundreds of attendees. Step into the spotlight now. Apply here by June 7th.

The Pitch. Ten founders will pitch onstage for five minutes, followed by a five-minute Q&A with an esteemed panel of VC judges. The winner will receive a feature article on TechCrunch.com, one-year free subscription to Extra Crunch and a free Founder Pass to TechCrunch Disrupt this fall.

The Training. Nervous to pitch onstage in front of thousands? Fear not. After completing the application, selected founders will receive training sessions during a remote mini-bootcamp, communication training and personalized pitch-coaching by the Startup Battlefield team. Selected startups will also be announced on TechCrunch.com in advance of the show. 

Qualifications. TechCrunch is looking for early-stage, pre-Series A companies with limited press. Our last pitch-off had one of the most geographically diverse batches from a TC event. The Early Stage Pitch-Off is open to companies from around the world, consumer or enterprise and in any industry — biotech, space, mobility, impact, SaaS, hardware, sustainability and more. 

Founders, don’t miss your chance to pitch your company on the world’s best tech stage. Apply today!

Metacore, a Finnish mobile games company, seems to have an amazing “relationship” with Supercell, another (quite successful) Finnish mobile games company.

Back in September 2020, Metacore raised $17.7 million in equity from Supercell and another $11.8 million line of credit, sometimes also called a debt round. That amazing relationship appears to be ongoing. Because Metacore has now raised yet another debt round from Supercell, but this time for €150 million ($180 million). These guys really like each other.

The simple reason for this is two words: Merge Mansion. This game has been so spectacularly successful that Supercell clearly wants a stake in that success, and it has the cash reserves to make that bet.

The puzzle discovery game has 800,000 daily players, and an annual revenue run rate of more than €45 million, so it’s really on a growth curve.

Why so successful? Well, players have really loved the idea that they can literally merge two items they pick up in the game to make a brand new thing. So for instance, you can merge two rakes and you get another kind of tool that you can then can use somewhere else. This is a very unique mechanic in mobile games.

Supercell is also enamored of Metacore’s games development strategy: It creates games with two- to three-person teams and only adds resources when a game takes off. This innovative approach to game development is at least part of the reason Supercell is doubling down on its investment, not just Merge Mansion itself. It’s a sort of “fail-fast” approach to game-making that is clearly paying dividends.

So why this approach to the latest financing?

I spoke to CEO and co-founder Mika Tammenkoski, who told me: “Yes, it is a credit line. We are more about scaling up the company as we are scaling up revenue. We already have meaningful revenue, we can invest the money, and we can expect a certain kind of return on investment. So this is the cheapest investment that we can get. Equity investment would dilute us. So this makes sense from that point of view. With Supercell, we have a really great partner backing us. They know exactly what is ahead of us. They know exactly the kind of challenges that we have, and that makes us aligned in that sense… We both think long term, we both want to scale the game as big as possible. And with Supercell we get the best terms overall.”

So there you have it. Metacore and Supercell are locked in an embrace which any other outside investor is going to have to invest in big to get a look in on the action.

The number of SPACs in the deep tech sector was skyrocketing, but a combination of increased SEC scrutiny and market forces over the past few weeks has slowed the pace of new SPAC transactions. The correction is an inevitable step on the path to mainstreaming SPACs as an alternative to IPOs, but it won’t cause them to go away. Instead, blank-check vehicles will evolve and will occupy a small and specialized — but important — part of the startup financing landscape.

The tsunami of SPAC financings sparked commentary from all corners of the capital markets community, from equity analysts and securities lawyers to VCs and fund managers — and even central bankers. That’s understandable, as more than $60 billion of SPAC deals have been announced since the beginning of 2020, plus $55 billion in PIPE capital, according to investment bank PJT Partners.

The views debated by finance experts often relate to the reasonableness of SPAC pricing and transaction structures, the alignment of incentives for stakeholders, and post-merger financial and stock price performance. But I’m not going to add another voice to the debate on the risk-reward calculus.

As the co-founder of a quantum computing software startup who worked in financial markets for two decades, I’d like to offer my perspective on two issues that I think my peers care more about: Can SPACs still solve the funding problem for capital-intensive, deep tech startups? And will they become a permanent financing option?

Keeping the lights on at deep tech startups

I believe that SPAC financings can solve a major problem for all capital-intensive technology startups: the need for faster — and potentially cheaper — access to large amounts of capital to fund product development over multiple years.

SPACs have created a limitless well of capital that deep tech startups are diving into. That’s because they are proving to be more attractive than other sources of financing, such as taking investments from later-stage VC funds or growth equity funds with finite fund sizes and specific investment themes.

The supply of growth capital from these vehicles has been astounding. In 2020, SPACs alone raised more than $83 billion via 248 IPOs, which is equal to a third of the total $300 billion raised by the entire global VC community. If the present rate of financings had continued, the annual amount of SPAC financings would have been on par with the total R&D expenditure of the U.S. government —  roughly $130 billion to $150 billion.

This new supply of capital can let startups keep the lights on, helping them address a practical need while they develop products that may take a decade to field. Before SPACs, any startup that wanted to remain independent had to lurch from one round of VC financing to the next. That, as well as the intense IPO process, is a major time sink for management teams and distracts them from focusing on product development.

People have been discussing the importance of expanding opportunities for women in venture capital and startup entrepreneurship for decades. And for some time it appeared that progress was being made in building a more diverse and equitable environment.

The prospect of more women writing checks was viewed as a positive for female founders, a cohort that has struggled to attract more than a fraction of the funds that their male peers manage. All-female teams have an especially tough time raising capital compared to all-male teams, underscoring the disparity.

Then COVID-19 arrived and scrambled the venture and startup scene, creating a risk-off environment during the end of Q1 and the start of Q2 2020. Following that, the venture world went into overdrive as software sales became a safe harbor in the business world during uncertain economic times. And when it became clear that the vaunted digital transformation of businesses large and small was accelerating, more capital appeared.

But data indicate that the torrent of new capital has not been distributed equally — indeed, some of the progress that female founders made in recent years may have eroded.

The Exchange explores startups, markets and money.

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

During a time of plenty, many female founders are still going without. The Exchange reached out to a number of American and European investors and founders to get their perspective on how today’s venture market treats female founders.

Recurring among the responses was a general view that more women venture capitalists would help lessen the gender gap in investments, and that VCs became more conservative due to COVID-19 and its constituent economic disruption, reverting to offering capital to repeat founders and their existing networks, both groups that are less diverse than the pool of new founders.

Our collection of founders and investors also said that women have been especially double-tasked during the pandemic to take on more domestic responsibilities in part due to sexist societal expectations, adding that that sexism more generally remains a problem that either isn’t improving or is improving too slowly.

But before we get into the core issues that prevent improvements in gender equity in venture funding, let’s check in on the data from last year and contrast it to its antecedents.

What the data show

While there have already been reports on gender disparities in funding, Nokia-backed VC firm NGP Capital made a great contribution to research on the topic with its 2021 dossier.

Text Blaze, which was a part of the recent Winter 2021 Y Combinator accelerator batch, announced that it has closed a $3.3 million seed round. The company’s investment was led by Two Sigma Ventures’s Villi Iltchev and Susa Ventures’s Leo Polovets.

The company’s product hybridizes two trends that TechCrunch has been tracking in recent years, namely automation and the written word. On the automation front, we’ve seen Zapier grow into a behemoth, while no-code products and RPA have made the concept of letting software boost worker output increasingly mainstream. And on the writing-assistance side of things, from Grammarly to Copy.ai, it’s clear that people are willing to pay for tools to help them writer better and more quickly.

So what does Text Blaze do? Two main things. First, its Chrome extension allows users to save “snippets” of text that they can add to emails, and other notes in rapid-fire fashion. I might save “Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines” to “/intro in Text Blaze, saving myself lots of time whenever I kick off a new podcast script.

But saving snippets and quickly inserting them into various text boxes in a user’s browser are just part of what makes Text Blaze neat. The product can also save template snippets with various boxes left open for users to fill in. So, a user could have a user-feedback snippet saved, that reserved spots for them to add in names, and other unique information quickly, while reusing the bulk of the text itself.

Text Blaze also has integrations with external services to ensure that its service can save users time. For example, the service can pull in CRM data from Hubspot into a text snippet used in Gmail. The idea is to link different services and data sources automatically, helping users shave minutes from their days, and hours from their weeks.

So far Text Blaze has run lean, according to its co-founder Dan Barak, who told TechCrunch that its staff of four will grow to around 10 this year, thanks to its new capital. Like nearly every startup that we’ve spoken to in recent months, Barak said that Text Blaze is a remote-first startup with a wide hiring lens.

Text Blaze’s model is freemium, with a consumer paid offering that costs $2.99 monthly. The key limitation in its free product, Barak, is a hard cap of 20 snippets. Past that you’ll need to pay. TechCrunch was modestly confused at the low price point, and relatively robust free feature set that the startup is offering. The co-founder explained that the company’s long-term plan is to sell into enterprises, making the pro version of Text Blaze more of a tool to generate awareness in what its service can do more than its final monetization scheme.

Some 70% of the company’s users so far have signed up using their corporate email, which could provide a wide avenue into later enterprise sales. According to the Text Blaze website, business users will pay a little more than double what its prosumer users will.

The company’s strategy appears to be working. Not only is it attracting users — its Chrome extension notes more than 70,000 users — and early revenue, but it also managed to convert Iltchev and Polovets into believers in its product. “When I first saw Text Blaze, it reminded me of the early days of Zapier which helped professionals to automate repetitive tasks, except Text Blaze provides a more approachable and easier to adopt entry point though written communications,” the Two Sigma investor told TechCrunch.

Susa’s Polovets said that he “fell in love with the [startup’s] product,” adding that he “wanted to invest as soon as I tried the product.”

Text Blaze’s round closed a few weeks ago. Let’s see how quickly it can scale with the new funds under its belt.

There’s no shortage of commentary around the chief marketing officer title these days, and certainly no lack of opinions about the role’s responsibilities and meaning within a company. There’s a reason for that. CMO is the shortest tenured C-suite role — the average tenure of a CMO is the lowest of all C-suite titles at 3.5 years.

That’s because the chief marketing officer’s role is increasingly complex. Qualifications require broad, strategic thinking while also maintaining tactical acumen across several functions. There’s a big disparity in what companies expect from CMOs. Some want a strategist with an eye for go-to-market planning, while others want a focus on close alignment with sales in addition to brand awareness, content strategy and lead generation.

Still other companies want their CMO to emphasize product marketing and management. Ask 10 CMOs how they define their role and you’ll get 10 different answers.

So, I’m sharing my honest, straight from the mouth of a tenured CMO take on what the role actually means, plus the key attributes of today’s modern CMO.

We must be the Master Builder

Hat tip to “The Lego Movie” for this analogy. Today’s marketing executives must bring functions and teams together. From sales and marketing alignment to product and everything in between, chief marketers are the connective tissue between every function. Driving alignment between these functions is table stakes.

Same goes for people teams and culture — I’ve experienced an increase in CMOs serving as the linchpin of a company’s culture. My CEO lives by the famous phrase “culture eats strategy for breakfast” and driving culture alignment now sits squarely on marketing’s shoulders.

Consistently drives new opportunities

Ah, demand generation. Driving new opportunity creation will continue to be a top priority for CMOs, of course. I’m not sharing anything new here, but the stakes are higher. CMOs either produce the numbers or we find another job. Doesn’t get any more straightforward than that. But, simply generating leads to check a box doesn’t cut it in board rooms anymore.

We’re looking for motivated early-stage founders who want to take advantage of every possible opportunity to launch their startups to new levels of success. Historically, one of the most effective ways to do that is to exhibit in Startup Alley, at TechCrunch Disrupt.

This year at TechCrunch Disrupt 2021 (September 21-23) we’re shaking up history and adding a new layer of opportunity exclusively for founders who apply for a Startup Alley Pass. It’s called Startup Alley+, and here’s what you need to know.

Every exhibiting founder is eligible for Startup Alley+ — an experience designed to set you up with additional education, exposure and success before Disrupt even starts.

However, the TechCrunch team will select only 50 founders to form the cohort, and they’ll kick things off by attending TechCrunch Early Stage: Marketing & Fundraising in July — for free. That’s right. You won’t pay anything to participate in Startup Alley+ beyond the initial cost of your Startup Alley Pass.

Other perks include three months of free business development support. You’ll attend three masterclasses on topics that every early-stage founder needs to well, master:

Who wouldn’t want to perfect their pitch long before diving into Disrupt to impress investors? Startup Alley+ participants will do just that by pitching at one of our mini pitch-offs during our weekly Extra Crunch Live events. Check your calendar now and get ready to bring the heat.

Keep your pitching arm warmed up and ready, because TechCrunch will introduce Startup Alley+ participants to top investors through our new VC match-making program. And don’t forget, there’s even more pitching in your future when you get to TC Disrupt. Every exhibitor in Startup Alley gets two minutes to pitch during a breakout feedback session.

We set a low hoop to jump through in order to be considered for Startup Alley+ — simply exhibit in Startup Alley. TechCrunch will choose the founders to participate in Startup Alley+ by the end of June.

Apply for your Startup Alley Pass now to make sure you have a shot. Even better — apply before the early-bird price expires next Friday, May 13 at 11:59 p.m. (PDT), and you’ll also save $50.

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EngineEars today announced a $1 million raise. The company’s first round of funding features investments from Kendrick Lamar, DJ Mustard, Roddy Rich and Slauson and Co. “Quality of sound is still important in music,” Lamar said in a quote provided to TechCrunch. “Ali has always been a progressive thinker. Engineers will transcend the culture.”

The service was launched in 2018 by Grammy winner Derek “MixedByAli” Ali, who has worked on a slew of high-profile tracks from artists including Lamar, Jay Rock, SZA, Nipsey Hussle and Snoop Dogg.

The educational courses turned into a touring curriculum, with 15 workshops in four countries, where Ali says he was able to determine what the community most needed.

“During that time, we really learned what the problem is,” says Ali. “All of the problems entailed tracking payments, being credited, the antiquated business model of file transfers and essentially just helping an independent audio engineer sustain and create a business for themselves.”

Source:  Claima Stories 

EngineEars has since branched out into something more akin to a marketplace for audio engineers. Independent mixers can offer their services and connect with artists and labels, get credit for the tracks they’ve worked on and — perhaps most importantly in the world of freelancing — get paid.

The platform launched an alpha version in January and since has 120 engineers verified by an existing vetting process. The invite-only service has another 2,000 people on its waiting list, according to Ali.

The service is currently working on a feature roadmap based on the requests of existing users and looking toward potential additions like the ability to buy beats, going forward. Other suggested features include contract negotiations for work-for-hire, but much of this is still very much in early stages.

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Solid state battery systems have long been considered the next breakthrough in battery technology, with multiple startups vying to be the first to commercialization. Automakers have been some of the top investors in the technology, each of them seeking the edge that will make their electric vehicles safer, faster and with increased range.

Ford Motor Company and BMW Group have put their money on battery technology company Solid Power.

The Louisville, Colorado-based SSB developer said Monday its latest $130 million Series B funding round was led by Ford and BMW, the latest signal that the two OEMs see SSBs powering the future of transportation. Under the investment, Ford and BMW are equal equity owners, and company representatives will join Solid Power’s board.

Solid Power received additional investment in the round from Volta Energy Technologies, the venture capital firm spun out of the U.S. Department of Energy’s Argonne National Laboratory.

Solid state batteries are so named because they lack a liquid electrolyte, as Mark Harris explained in an Extra Crunch article earlier this year. Liquid electrolyte solutions are usually flammable and at risk of overheating, so SSBs are considered to be generally safer. The real value of SSBs versus their lithium-ion counterparts is the energy density. Solid Power says its batteries can provide as much as a 50% to 100% increase in energy density compared to rechargeable batteries. Theoretically, electric vehicles with more energy-dense batteries can travel longer distances on a single charge.

This latest round of investment will help Solid Power boost its manufacturing to produce battery cells with the company’s highest ampere hour (Ah) output yet. Under separate joint development agreements with Ford and BMW, it will deliver to the OEMs 100 Ah cells for testing and vehicle integration from 2022.

Until this point, the company has been manufacturing cells with 2 Ah and 20 Ah output. “Hundreds” of 2 Ah battery cells were validated by Ford and BMW late last year, Solid Power said in a statement. Meanwhile, it is currently producing 20 Ah solid state batteries on a pilot basis with standard lithium-ion equipment.

As opposed to the 20 Ah pilot-scale cells — which are composed of 22-layers at 9×20 cm — these 100 Ah cells will have a larger footprint and even more layers, Solid Power spokesman Will McKenna told TechCrunch. (“Layers” refers to the number of double-sided cathodes, McKenna explained — so the 20 Ah cell has 22 cathodes and 22 anodes, with an all-solid electrolyte separator in between each, all in a single cell.)

Unlike Solid Power’s manufacturing, traditional lithium-ion batteries must undergo electrolyte filling and cycling in their production processes. Solid Power says these additional steps account for 5% and 30% of capital expenditure in a typical GWh-scale lithium-ion facility.

This isn’t the first time Solid Power has landed investments from the automakers. The company’s $20 million Series A in 2018 attracted capital from BMW and Ford, as well as Samsung, Hyundai, Volta and others. It’s part of a new wave of companies that have attracted the attention of OEMs. Other notable examples include Volkswagen-backed QuantumScape and General Motors, which has put its money on SES.

Ford is also independently researching advanced battery technologies and is planning to open a $185 million R&D battery lab, the company said last week.