GamesBeat Decides that Hitman 3 is good, and nothing you can say or do will ever change that fact. Also, some news happened.Read More

We look at tech and AI policy issues in the U.S. Senate after Georgia runoffs and a coup attempt fueled by misinformation and white supremacy.Read More

Envisics founder and CEO Dr. Jamieson Christmas launched the startup three years ago to “revolutionize” the in-car experience with its holographic technology. Now, it has a partner that could help it achieve that mission.

The U.K.-based holographic technology startup said Friday it reached an agreement with Panasonic Automotive Systems to jointly develop and commercialize a new generation of head-up displays for cars, trucks and SUVs. Panasonic Automotive Systems is a Tier 1 automotive supplier and a division of Panasonic Corporation of North America. The head-up displays are units integrated in the dash of a vehicle that project images onto the windshield to aid drivers with navigation and provide other alerts. The Panasonic HUDs, as they’re often called, will use Envisics holographic technology.

The deal, announced ahead of the virtual 2021 CES tech trade show, follows Envisics’ $50 million Series B funding round and news that its tech will be integrated in the upcoming Cadillac Lyriq electric vehicle. The funding round, which brought Envisics a valuation of more than $250 million, included investments from Hyundai Mobis, GM Ventures, SAIC Ventures and Van Tuyl Companies.

Envisics’ technology, the foundation of which came out of Christmas’ PhD studies at Cambridge University more than 15 years ago, electronically manipulates the speed of light. This process enables images to appear three-dimensional, Christmas explained in a recent interview. The company has secured more than 250 patents and has another 160 pending certification.

The company is solely focused upon the automotive application of holography, Christmas said, adding that its first generation is already integrated in more than 150,000 Jaguar Land Rover vehicles.

Christmas said this new agreement aims to combine Panasonic’s expertise in optical design and its global reach as a Tier 1 supplier with Envisics’ technology to bring holography into the mainstream. Mass production of vehicles using its technology is slated for 2023, according to the companies.

“This is very much about part of our business plan, you know the Series B funding round we undertook was about scaling the business and enabling us to move forward as we enter the market,” Christmas said. “Part of that was a commitment to engage in partnerships with Tier ones that we can then work with to deliver these products to market.

“This is the first of those agreements,” he added, suggesting that Envisics has a much larger aim.

What that means, Christmas said, will be head-up displays with high resolution, wide color gamut and large images that can be overlaid upon reality. The technology can also project information at multiple distances simultaneously.

“That really unlocks very interesting applications,” he said. “In the short term, it will be kind of relatively simple augmented reality applications like navigation, highlighting the lane you’re supposed to be in and some safety applications. But as you look forward into things like autonomous driving it unlocks a whole realm of other opportunities like entertainment and video conferencing.”

He added that it could even be used for night vision applications such as overlaying enhanced information upon a dark road to make it clear where the road is going and what obstacles might be out there.

This has been quite a week.

Instead of walking backward through the last few days of chaos and uncertainty, here are three good things that happened:

Google employee Sara Robinson combined her interest in machine learning and baking to create AI-generated hybrid treats.A breakthrough could make water desalination 30%-40% more effective.Bianca Smith will become the first Black woman to coach a professional baseball team.

Despite many distractions in our first full week of the new year, we published a full slate of stories exploring different aspects of entrepreneurship, fundraising and investing.

We’ve already gotten feedback on this overview of subscription pricing models, and a look back at 2020 funding rounds and exits among Israel’s security startups was aimed at our new members who live and work there, along with international investors who are seeking new opportunities.

Plus, don’t miss our first investor surveys of 2021: one by Lucas Matney on social gaming, and another by Mike Butcher that gathered responses from Portugal-based investors on a wide variety of topics.

Thanks very much for reading Extra Crunch this week. I hope we can all look forward to a nice, boring weekend with no breaking news alerts.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription

The Roblox Gambit

In February 2020, gaming platform Roblox was valued at $4 billion, but after announcing a $520 million Series H this week, it’s now worth $29.5 billion.

“Sure, you could argue that Roblox enjoyed an epic 2020, thanks in part to COVID-19,” writes Alex Wilhelm this morning. “That helped its valuation. But there’s a lot of space between $4 billion and $29.5 billion.”

Alex suggests that Roblox’s decision to delay its IPO and raise an enormous Series H was a grandmaster move that could influence how other unicorns will take themselves to market. “A big thanks to the gaming company for running this experiment for us.”

I asked him what inspired the headline; like most good ideas, it came to him while he was trying to get to sleep.

“I think that I had ‘The Queen’s Gambit’ somewhere in my head, so that formed the root of a little joke with myself. Roblox is making a strategic wager on method of going public. So, ‘gambit’ seems to fit!”

8 investors discuss social gaming’s biggest opportunities

For our first investor survey of the year, Lucas Matney interviewed eight VCs who invest in massively multiplayer online games to discuss 2021 trends and opportunities:

Hope Cochran, Madrona Venture GroupDaniel Li, Madrona Venture GroupNiko Bonatsos, General CatalystEthan Kurzweil, Bessemer Venture PartnersSakib Dadi, Bessemer Venture PartnersJacob Mullins, Shasta VenturesAlice Lloyd George, RogueGigi Levy-Weiss, NFX

Having moved far beyond shooters and sims, platforms like Twitch, Discord and Fortnite are “where culture is created,” said Daniel Li of Madrona.

Rep. Alexandria Ocasio-Cortez uses Twitch to explain policy positions, major musicians regularly perform in-game concerts on Fortnite and in-game purchases generated tens of billions last year.

“Gaming is a unique combination of science and art, left and right brain,” said Gigi Levy-Weiss of NFX. “It’s never just science (i.e., software and data), which is why many investors find it hard.”

How to convert customers with subscription pricing

Startups that lack insight into their sales funnel have high churn, low conversion rates and an inability to adapt or leverage changes in customer behavior.

If you’re hoping to convert and retain customers, “reinforcing your value proposition should play a big part in every level of your customer funnel,” says Joe Procopio, founder of Teaching Startup.

What is up with Tesla’s value?

Alex Wilhelm followed up his regular Friday column with another story that tries to find a well-grounded rationale for Tesla’s sky-high valuation of approximately $822 billion.

Meanwhile, GM just unveiled a new logo and tagline.

As ever, I learned something new while editing: A “melt up” occurs when investors start clamoring for a particular company because of acute FOMO (the fear of missing out).

Delivering 500,000 cars in 2020 was “impressive,” says Alex, who also acknowledged the company’s ability to turn GAAP profits, but “pride cometh before the fall, as does a melt up, I think.”

Note: This story has Alex’s original headline, but I told him I would replace the featured image with a photo of someone who had very “richest man in the world” face.

How Segment redesigned its core systems to solve an existential scaling crisis

On Tuesday, enterprise reporter Ron Miller covered a major engineering project at customer data platform Segment called “Centrifuge.”

“Its purpose was to move data through Segment’s data pipes to wherever customers needed it quickly and efficiently at the lowest operating cost,” but as Ron reports, it was also meant to solve “an existential crisis for the young business,” which needed a more resilient platform.

Dear Sophie: Banging my head against the wall understanding the US immigration system

Dear Sophie:

Now that the U.S. has a new president coming in whose policies are more welcoming to immigrants, I am considering coming to the U.S. to expand my company after COVID-19. However, I’m struggling with the morass of information online that has bits and pieces of visa types and processes.

Can you please share an overview of the U.S. immigration system and how it works so I can get the big picture and understand what I’m navigating?

— Resilient in Romania

The first “Dear Sophie” column of each month is available on TechCrunch without a paywall.

Revenue-based financing: The next step for private equity and early-stage investment

For founders who aren’t interested in angel investment or seeking validation from a VC, revenue-based investing is growing in popularity.

To gain a deeper understanding of the U.S. RBI landscape, we published an industry report on Wednesday that studied data from 134 companies, 57 funds and 32 investment firms before breaking out “specific verticals and business models … and the typical profile of companies that access this form of capital.”

Lisbon’s startup scene rises as Portugal gears up to be a European tech tiger

Mike Butcher continues his series of European investor surveys with his latest dispatch from Lisbon, where a nascent startup ecosystem may get a Brexit boost.

Here are the Portugal-based VCs he interviewed:

Cristina Fonseca, partner, Indico Capital PartnersPedro Ribeiro Santos, partner, Armilar Venture PartnersTocha, partner, Olisipo WayAdão Oliveira, investment manager, Portugal VenturesAlexandre Barbosa, partner, FaberAntónio Miguel, partner, Mustard Seed MAZEJaime Parodi Bardón, partner, impACT NOW CapitalStephan Morais, partner, Indico Capital PartnersGavin Goldblatt, managing partner, Portugal Gateway

How late-stage edtech companies are thinking about tutoring marketplaces

How do you scale online tutoring, particularly when demand exceeds the supply of human instructors?

This month, Chegg is replacing its seven-year-old marketplace that paired students with tutors with a live chatbot.

A spokesperson said the move will “dramatically differentiate our offerings from our competitors and better service students,” but Natasha Mascarenhas identified two challenges to edtech automation.

“A chatbot won’t work for a student with special needs or someone who needs to be handheld a bit more,” she says. “Second, speed tutoring can only work for a specific set of subjects.”

Decrypted: How bad was the US Capitol breach for cybersecurity?

While I watched insurrectionists invade and vandalize the U.S. Capitol on live TV, I noticed that staffers evacuated so quickly, some hadn’t had time to shut down their computers.

Looters even made off with a laptop from Senator Jeff Merkley’s office, but according to security reporter Zack Whittaker, the damages to infosec wasn’t as bad as it looked.

Even so, “the breach will likely present a major task for Congress’ IT departments, which will have to figure out what’s been stolen and what security risks could still pose a threat to the Capitol’s network.”

Extra Crunch’s top 10 stories of 2020

On New Year’s Eve, I made a list of the 10 “best” Extra Crunch stories from the previous 12 months.

My methodology was personal: From hundreds of posts, these were the 10 I found most useful, which is my key metric for business journalism.

Some readers are skeptical about paywalls, but without being boastful, Extra Crunch is a premium product, just like Netflix or Disney+. I know, we’re not as entertaining as a historical drama about the reign of Queen Elizabeth II or a space western about a bounty hunter. But, speaking as someone who’s worked at several startups, Extra Crunch stories contain actionable information you can use to build a company and/or look smart in meetings — and that’s worth something.

Equifax will pay $640 million to acquire Kount, which uses AI to drive fraud prevention and digital identity services.Read More

F5 Networks will position itself as an alternative for delivering application code to edge computing platformsRead More

In case you missed it, you can listen to the recording here: 514th 1Mby1M Roundtable Jan. 7, 2021: With Venktesh Shukla, Monta Vista Capital

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Dragon Quest V is an easy recommendation for any JRPG fan that loves classic experiences with turn-based battles.Read More

The last year taught us that the connection between the stock market and the economy is imprecise at best.

Despite some useful commentary underscoring the two are at least somewhat linked, it’s clear that many Americans can lose their jobs and financial security at the same time that stocks can keep on rising like the boom times will never end.

That’s the macro picture; 2021 is teaching us its microcorollary — smaller groups of stocks can keep rising regardless of what is going on with their fundamentals.

And in the micro-micro case, that Tesla’s value is unlimited, because [fill in your reasons here].

To avoid all useless Twitter whining, yes, Tesla’s ability to turn GAAP profits — albeit at times by selling regulatory credits — is a win, and joining the S&P 500 is great. Delivering 500,000 cars in 2020, a full 75% of GM’s third-quarter deliveries, is impressive as well.

I am certainly not arguing that Tesla is worthless, or that the group of companies like those that comprise the ARK Innovation ETF, are all overpriced. Instead, it seems that today’s market is willing to value stocks not on their past performance, current performance or analyst-expected future performance but on the rosiest future that investors have imagined for their favorite companies.

You can see elements of this logic at work if you ever talk about stocks on the internet. Don’t call Tesla a car company, for example — this despite automotive revenues making up nearly 87% of the company’s Q3 top line. Tesla is a battery company, its religious fans will tell you.

That’s why it’s fine to pay 31x sales for Tesla, while GM is worth 0.5348x sales today. Amazon, for comparison, is worth 4.6x sales. Tesla shares are valued like Twilio’s own in terms of their price-sales ratio, but the difference is that the car company had gross margins of 23.5% in Q3 2020, while the software company managed twice that. And Twilio is growing more quickly.

A software AI agent developer wants to develop joint ventures with companies interested in transforming their businesses with digital workers.Read More

Jumbotail, an online wholesale marketplace for grocery and food items, said on Friday it has raised an additional $14.2 million as the Bangalore-based startup chases the opportunity to digitize neighborhood stores in the world’s second-largest internet market.

The five-year-old startup said the new tranche of its Series B financing round was led by VII Ventures, with participation from Nutresa, Veronorte, Jumbofund, Klinkert Investment Trust, Peter Crosby Trust, Nexus Venture Partners and Discovery Ventures.

The startup told TechCrunch that the new tranche concludes its Series B round, which it kickstarted in 2019 with a tranche of $12.7 million. It ended up raising about $44 million in the Series B round (including Friday’s tranche), and to date has amassed about $54 million in equity investment, the startup told the publication.

Jumbotail said it serves more than 30,000 neighborhood stores (popularly known in India as kiranas) in the country. In addition to its business-to-business marketplace, the startup also provides working capital to neighborhood stores through partnerships with financial institutions.

The startup, which has built its own supply chain network to enable last-mile delivery, also supplies these stores with point-of-sale devices so they can easily get access to a much wider selection of catalog and have the new inventory shipped to them within two days. It also integrates these stores with hyperlocal delivery startups such as Dunzo and Swiggy to help mom and pop shops further expand their customer base.

Ashish Jhina, co-founder of Jumbotail, said he believes the startup has reached an inflection point in its growth and is now ready for its next chapter, which includes hiring top talent and expanding to more regions in the country, especially in several cities in South India.

“We are seeing tremendous interest from investors across the globe who are drawn to our highly scalable and operationally profitable business model, built on the industry’s best technology and customer NPS,” said Jhina.

At a recent virtual conference, Jhina said that the coronavirus pandemic, which prompted New Delhi to order a nationwide lockdown and put restrictions on e-commerce firms, has illustrated just how crucial neighborhood stores are in people’s lives. And for all the ills that the virus has wrought, it did help accelerate the adoption of technology among these stores.

A number of food brands whose products neighborhood stores sell today are not standardized, which poses a question about their quality. To fill this gap, Jumbotail runs its own private label portfolio and Jhina said the startup will deploy part of the fresh fund to broaden this catalog. Having a private label also allows Jumbotail to ensure that its retail partners can get the supply of items throughout the year — and of course, it also helps the startup, which has been operationally profitable for nearly three quarters, improve its margin.

There are more than 30 million neighborhood stores in India located across the thousands of cities and towns in the country. These small businesses have been around for decades and survived — and even thrived — despite e-commerce giants pouring billions of dollars in India to change how people shop. In recent years, scores of startups — and giants — in India have begun to explore ways to work with these neighborhood stores.

One of them is India’s largest retail chain Reliance Retail, which serves more than 3.5 million customers each week through its nearly 10,000 physical stores in more than 6,500 cities and towns in the country. In late 2019, it entered the e-commerce space with JioMart through a joint venture with sister subsidiary telecom giant Jio Platforms. By mid last year, JioMart had expanded to over 200 Indian cities and towns — though currently its reach within those cities and customer service leave a lot to be desired.

Reliance Retail also maintains a partnership with Facebook for WhatsApp integration. Facebook, which invested $5.7 billion in Jio Platforms last year, has said that it will explore various ways to work with Reliance to digitize the nation’s mom and pop stores, as well as other small and medium-sized businesses.

For JioMart, Reliance Retail is working with neighborhood shops, giving them a digital point-of-sale machine to make it easier for them to accept money electronically. It is also allowing these shops to buy their inventory from Reliance Retail, and then use their physical presence as delivery points. At present, the platform is largely focused on grocery delivery. In a recent report to clients, Goldman Sachs analysts estimated that Reliance could become the largest player in online grocery within three years.

Oomnitza CEO Arthur Lozinski talks about an excellent pivot that is quite enlightening. Sramana Mitra: Let’s start at the beginning of your journey. Where are you from? Where were you born and...

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Taiwan is known for being a tech powerhouse, the headquarter of companies like Foxconn, Pegatron, TSMC, Acer and Asus. But while Taiwan’s tech industry is defined by well-established players, it is also home to a growing startup scene. Ahead of the official start of CES, the Taiwan Excellence awards were announced by nonprofit trade promotion group Taiwan External Trade Development Council (known as TAITRA) and ShowStoppers, giving a preview of what its startups offer. Awards went to seven startups, while 11 other companies also presented. They cover a wide range of sectors, ranging from fitness and health to industrial monitoring.

More startups will showcase their tech next week at CES’ Taiwan Pavilion, organized by Taiwan Tech Arena.

The seven Taiwan Excellence Award winners are:

Advantech‘s LoRaWAN solutions are designed to control applications across wide distances and have been used for a diverse array of scenarios, including monitoring floods, critical care patients in hospitals and transportation infrastructure. Two of its latest devices include the WISE-6610, a gateway for connecting up to 500 sensors and sending their data to cloud platforms using 3G/LTE or wired Ethernet connections. The other one is the WISE-2410, a vibration sensor for monitoring motor-powered mechanical equipment and identifying potential issues so manufacturers can schedule maintenance before machines malfunction, resulting in expensive downtime.

CyberLink is the developer of the machine learning-based FaceMe Facial Recognition Engine, which is used in AIoT applications, including security, smart retail and surveillance. As the COVID-19 pandemic continues, CyberLink’s new product FaceMe Health can identify faces even with masks on, and send alerts if someone isn’t wearing a mask or has a high temperature. It is meant to assist in pandemic control measures at places like hospitals, airports, retail stores and factories.

Dyaco‘s workout equipment line, called SOLE Fitness, includes its new SOLE CC81 Cardio Climber, which combines features from steppers and climbers into one machine. The SOLE CC81 is designed to be ergonomic, so users can get high-intensity cardio workouts while reducing wear on their joints.

Green Jacket Sports is showcasing its Golface smart system, which helps golf courses monitor and collect data on their operations in real time, while allowing golfers to track their performance. The smart system’s other features include includes aerial videos and real-time scoring functions.

Maktar is the maker of a smartphone backup device called Qubii. Shaped like a small cube, Qubii automatically backs up phones while they are charging and doesn’t need internet or Wi-Fi connections. Instead, users insert a microSD card into Qubii and connect it to their smartphones with their usual power adapters or chargers. Every time the smartphone is charged, Qubii backs up their photos, videos and contacts. The device also has a patented SD card lock feature to protect data.

Image Credits: MioMiTAC Digital Technology’s Mio dashcam range produces clear videos even in dark spaces like parking lots. The latest Mio dashcam, called the MiVue 798, uses Sony’s lowlight STARVISTM sensor and an all-glass lens, and produces wide-angle videos with quality of up to 2.8K. The MiVue 798 also has embedded WiFi connectivity for video backups and online sharing through the MiVue Pro App. Other features include GPS tracking, a patented smart alert system with fixed-distance warnings and speed limit alerts, and a driver assistance system that warns of lane departures, driver fatigue and forward collisions.

Winmate will present its M133WK Ultra Rugged Tablet PC, created for vehicle diagnostics. Powered by 8th-gen Intel Core i5-8265U Whiskey Lake processor, for high-performance with low power consumption, the M133WK features a 1920 X 1080 PCAP touchscreen that is viewable even in heavy sunlight.

Here are the other 11 startups that TAITRA and ShowStoppers are presenting:

ATrack‘s AK11 Fleet Hub is a 4G LTE device for the real-time management of fleets across different verticals.

ELECLEAN 360 uses what it describes as the “world’s first nano-catalysis electrochemical technology” to turn water into hydrogen peroxide and hydroxyl radicals, for cleaning and disinfection.

In Win Development is introducing the SR Pro CPU Cooler, which uses patented twin-turbine pumps running in parallel to optimize water flow and ensure thermal performance. It comes with high-airflow AJF120 fans to cool PCs more quickly.

Innolux makes full range of LCD panels for televisions, monitors, notebooks, industrial, medical, mobile and other applications.

Planet Technology is building a secure network called PLANET Powerful Enterprise VPN Cybersecurity and Firewall Solutions for the “post-COVID-19 era.”

Rice Air makes LUFT Cube, a small filterless nanotech personal air purifier.

Systems & Technology Corp. (Systech)‘s fleet management platform uses intelligent telematics so organizations can track where vehicles are and more efficiently manage their fleets.

Tokuyu Biotech creates smart massage chairs and health care-related products that are connected to apps and sensor technologies.

Winnoz is the maker of Haiim, a portable vacuum-assisted device for collecting blood samples from fingertips.

WiseChip develops transparent OLEDs with touch functions for use in home appliance control panels, automotive, transportation applications (like passenger information display systems) and wearable devices.

Yztek‘s E+ Autoff is an IoT device created to stop people from forgetting to turn off their stoves. In addition to auto turn-off, it also has cooking time adjustment and energy saving features.

For the past nine months, Amy and I have started our morning together. I get up, pee, weigh myself, brush my teeth, meditate for 20 to 30 minutes, and then we have “morning coffee” together.

Morning coffee lasts for two cups of coffee (one regular, one decaf). This ends up being between 15 and 30 minutes, depending on what we are talking about. After spending the vast majority of our 30 years together on the road until a few years ago, this has been an incredible joy for me. Regardless of the previous day, it gives me a clear way to Simply Being Again, each morning with my beloved.

When I woke up Monday morning, I didn’t expect so much of our morning coffee this week to discuss what was going on in politics in the United States. Today, one of the things we riffed on was our respective first political memories.

Mine was Richard Nixon being impeached. I was seven years old. We didn’t watch very much television in my house growing up – mostly PBS (Channel 13 in Dallas) and sports my dad liked to watch (mostly Dallas Cowboys football.) I remember a few TV shows like Happy Days and Gilligan’s Island, but Daniel and I were only allowed one hour of TV a day, and I often didn’t use mine because I preferred to read.

I never watched the news as a kid. Maybe my parents did in their bedroom, but it took an extraordinary event for us to watch TV news together. I remember the Iran Hostage Crisis, Oliver North, and one of the moon landings (I don’t remember which one.)

We had two TVs in the house – one in my parent’s bedroom and one in the room we called “the family room.” I remember sitting on the floor in my parent’s bedroom, watching Congress impeach Nixon. I only have one visual image of it, so my guess is there was only one day that we watched it. But whatever it was, it was a climactic moment that cemented itself in my memory.

Amy remembers it also. Her family didn’t have a TV growing up, so she remembers going to the Anchor River Inn, owned by Bob and Julie Clutts, and watching the TV at the bar. I bet that we were watching TV simultaneously, me in Dallas, Texas, and Amy in Anchor Point, Alaska.

We are each lifetime members of Generation X. The broad brush of Gen X being cynical and disaffected is probably true, unless you choose purpose, meaning, joy, and empathy.

Our earliest experience with politics is of the deep cracks in the foundations of the institutions our parents could believe in. At 55, I am experiencing that again. It’s been continual low-level noise my entire life, but the volume was just turned up to 11. Or maybe even 12.

Simply begin again.

The post What Is Your First Political Memory? appeared first on Feld Thoughts.

So it turns out that Roblox is worth $29.5 billion.

That’s the lesson the market learned this week when the gaming platform company announced that it had raised $520 million in an epic Series H.

For a company valued at just $4 billion last February when it raised $150 million in a round led by Andreessen Horowitz, that new valuation could be considered a victory. But is it?

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

For all the griping amongst private-market capitalists that public-market capitalists are ripping off their investments as they look to cross the private-public divide through an IPO, it’s hard to square a company’s valuation going from $4 billion to nearly $30 billion in just 11 months.

Sure, you could argue that Roblox enjoyed an epic 2020, thanks in part to COVID-19. That helped its valuation. But there’s a lot of space between $4 billion and $29.5 billion, and recall that its February Series B valued Roblox at around 7.3x its Q4 2019 revenue run rate.

The same company at its new $29.5 billion valuation is now priced at just over 30x its Q3 2020 run rate (the most recent quarter for which we have data today).

Perhaps Roblox was right to hold off on its IPO, raise a huge block of cash at a new valuation and pursue a direct listing. But it’s hard to fret heavily about private-market complaints concerning startup value when the IPO facilitators are hardly the only folks making trips to the bank with a wheelbarrow.

All that is preamble. This morning, let’s talk about Roblox’s flotation strategy. Why is the company raising private market money and then floating instead of raising public market money on its path to trading as a public company? And does its strategy solve the major flaws that the IPO process appears to have? Let’s get into it.

The ol’ raise-and-float

One way to go public is to file an S-1, prepare a presentation, go on a roadshow, drive interest in your shares and work with bankers to price the shares you want to sell at a dollar amount all parties can agree to. The next morning, your shares begin to trade, and you count the money you raised.

That is a traditional IPO, admittedly simplified.

There are issues in there, namely that the price discovery mechanism has proved to be uncertain, especially when it comes to the public offerings of companies considered attractive investments by the active retail trading market. Why? The hotter the company, the fewer shares that are available for trade at the start of its life as a public firm — the very opposite of that which is happening on the demand side.

Lots of demand, few shares and up goes the price. Then up go the complaints that Wall Street is a bunch of thieves. Hearing this from other capital players is always whimsical to some degree, but let’s stick to our theme.

Sramana Mitra: Are Shopify stores your largest customer base? Mark Kapczynski: Most of our customers use Shopify stores, but we also have merchants that operate on places like Etsy, Amazon,...

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Entrepreneurs are invited to the 515th FREE online 1Mby1M Mentoring Roundtable on Thursday, January 14, 2021, at 8 a.m. PST/11 a.m. EST/5 p.m. CET/9:30 p.m. India IST. If you are a serious...

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Quibi is dead, but its shows will live on.

The Wall Street Journal reported last week that Roku was in talks to acquire the short-form video service’s content. And this morning, Roku announced that it has indeed reached a deal for the exclusive distribution rights to all of Quibi’s programs.

Financial terms of the acquisition were not disclosed.

Roku said it will make this content available for free with ads on The Roku Channel. That doesn’t just include the shows that were previously available on Quibi, but also “more than a dozen” programs making “their exclusive debut on The Roku Channel” — in other words, they were created for the service but unreleased due to the app’s shutdown.

“Today’s announcement marks a rare opportunity to acquire compelling original content that features some of the biggest names in entertainment,” said Roku’s vice president of programming Rob Holmes in a statement. “We’re excited to make this content available to our users in The Roku Channel through an ad-supported model. We are also thrilled to welcome the incredible studios and talented individuals who brought these stories to life and showcase them to our tens of millions of users.”

While Roku is best known for its streaming TV devices and software, advertising is a growing part of its business. And it says The Roku Channel (which offers both free content and subscription channels) reached 61.8 million U.S. viewers in the fourth quarter of last year.

Quibi, meanwhile, announced its shutdown in October, just six months after its splashy launch. The service was focused on creating video episodes that lasted 10 minutes or less and were designed for viewing on-the-go — a poor fit for a period of pandemic and lockdowns.

In their farewell note, executives Jeffrey Katzenberg and Meg Whitman suggested that the service failed due to a combination of bad timing and the fact that “the idea itself wasn’t strong enough to justify a standalone streaming service.”

“The most creative and imaginative minds in Hollywood created groundbreaking content for Quibi that exceeded our expectations,” Katzenberg said in today’s announcement. “We are thrilled that these stories, from the surreal to the sublime, have found a new home on The Roku Channel.”

It’s also worth noting that the service was initially focused entirely on mobile viewing, with no way to watch the shows on smart TVs. That eventually changed, starting with the addition of AirPlay support. Now, with the Roku acquisition, it seems that shows designed to be watched on your smartphone will instead be viewed primarily on your TV.

Zack Parisa and Max Nova, the co-founders of the carbon offset company SilviaTerra, have spent the last decade working on a way to democratize access to revenue-generating carbon offsets.

As forestry credits become a big, booming business on the back of multibillion-dollar commitments from some of the world’s biggest companies to decarbonize their businesses, the kinds of technologies that the two founders have dedicated 10 years of their lives to building are only going to become more valuable.

That’s why their company, already a profitable business, has raised $4.4 million in outside funding led by Union Square Ventures and Version One Ventures, along with Salesforce founder and the driving force between the One Trillion Trees Initiative, Marc Benioff .

“Key to addressing the climate crisis is changing the balance in the so-called carbon cycle. At present, every year we are adding roughly 5 gigatons of carbon to the atmosphere. Since atmospheric carbon acts as a greenhouse gas this increases the energy that’s retained rather than radiated back into space which causes the earth to heat up,” writes Union Square Ventures managing partner Albert Wenger in a blog post. “There will be many ways such drawdown occurs and we will write about different approaches in the coming weeks (such as direct air capture and growing kelp in the oceans). One way that we understand well today and can act upon immediately are forests. The world’s forests today absorb a bit more than one gigatons of CO2 per year out of the atmosphere and turn it into biomass. We need to stop cutting and burning down existing forests (including preventing large scale forest fires) and we have to start planting more new trees. If we do that, the total potential for forests is around 4 to 5 gigatons per year (with some estimates as high as 9 gigatons).”

For the two founders, the new funding is the latest step in a long journey that began in the woods of Northern Alabama, where Parisa grew up.

After attending Mississippi State for forestry, Parisa went to graduate school at Yale, where he met Louisville, Kentucky native Max Nova, a computer science student who joined with Parisa to set up the company that would become SilviaTerra.

The two men developed a way to combine satellite imagery with field measurements to determine the size and species of trees in every acre of forest.

While the first step was to create a map of every forest in the U.S., the ultimate goal for both men was to find a way to put a carbon market on equal footing with the timber industry. Instead of cutting trees for cash, potentially landowners could find out how much it would be worth to maintain their forestland. As the company notes, forest management had previously been driven by the economics of timber harvesting, with over $10 billion spent in the U.S. each year.

The founders at SilviaTerra thought that the carbon market could be equally as large, but it’s hard for most landowners to access. Carbon offset projects can cost as much as $200,000 to put together, which is more than the value of the smaller offset projects for landowners like Parisa’s own family and the 40 acres they own in the Alabama forests.

There had to be a better way for smaller landowners to benefit from carbon markets too, Parisa and Nova thought.

To create this carbon economy, there needed to be a single source of record for every tree in the U.S. and while SilviaTerra had the technology to make that map, they lacked the compute power, machine learning capabilities and resources to build the map.

That’s where Microsoft’s AI for Earth program came in.

Working with AI for Earth, SilviaTierra created their first product, Basemap, to process terabytes of satellite imagery to determine the sizes and species of trees on every acre of America’s forestland. The company also worked with the U.S. Forestry Service to access their data, which was used in creating this holistic view of the forest assets in the U.S.

With the data from Basemap in hand, the company has created what it calls the Natural Capital Exchange. This program uses SilviaTerra’s unparalleled access to information about local forests, and the knowledge of how those forests are currently used to supply projects that actually represent land that would have been forested were it not for the offset money coming in.

Currently, many forestry projects are being passed off to offset buyers as legitimate offsets on land that would never have been forested in the first place — rendering the project meaningless and useless in any real way as an offset for carbon dioxide emissions. 

“It’s a bloodbath out there,” said Nova of the scale of the problem with fraudulent offsets in the industry. “We’re not repackaging existing forest carbon projects and trying to connect the demand side with projects that already exist. Use technology to unlock a new supply of forest carbon offset.”

The first Natural Capital Exchange project was actually launched and funded by Microsoft back in 2019. In it, 20 Western Pennsylvania land owners originated forest carbon credits through the program, showing that the offsets could work for landowners with 40 acres, or, as the company said, 40,000.

“We’re just trying to get inside every landowners annual economic planning cycle,” said Nova. “There’s a whole field of timber economics… and we’re helping answer the question of given the price of timber, given the price of carbon does it make sense to reduce your planned timber harvests?”

Ultimately, the two founders believe that they’ve found a way to pay for the total land value through the creation of data around the potential carbon offset value of these forests.

It’s more than just carbon markets, as well. The tools that SilviaTerra have created can be used for wildfire mitigation as well. “We’re at the right place at the right time with the right data and the right tools,” said Nova. “It’s about connecting that data to the decision and the economics of all this.”

The launch of the SilviaTerra exchange gives large buyers a vetted source to offset carbon. In some ways it’s an enterprise corollary to the work being done by startups like Wren, another Union Square Ventures investment, that focuses on offsetting the carbon footprint of everyday consumers. It’s also a competitor to companies like Pachama, which are trying to provide similar forest offsets at scale, or 3Degrees Inc. or South Pole.

Under a Biden administration there’s even more of an opportunity for these offset companies, the founders said, given discussions underway to establish a Carbon Bank. Established through the existing Commodity Credit Corp. run by the Department of Agriculture, the Carbon Bank would pay farmers and landowners across the U.S. for forestry and agricultural carbon offset projects.

“Everybody knows that there’s more value in these systems than just the product that we harvest off of it,” said Parisa. “Until we put those benefits in the same footing as the things we cut off and send to market…. As the value of these things goes up… absolutely it is going to influence these decisions and it is a cash crop… It’s a money pump from coastal America into middle America to create these things that they need.” 

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