Business News

Smart home startup Level Home emerges from stealth with $71M and a new take on the smart lock

Startup News - 1 hour 18 min ago

As companies like Google, Amazon and Apple hone their strategies to build the brain that helps you use the smart home of the future, where a new wave of internet-enabled appliances, climate and security systems and other connected objects can be connected and controlled through their hubs, a new smart home startup called Level Home is emerging from stealth today with a big packet of funding and a hope of bringing something new to the table, by focusing on ways of rethinking old things you own already, starting with the lock on your front door.

The Level Lock, the first patented product, is a system — tested for durability, powered by a basic CR2 battery (average life: one year), equipped with ANSI GRADE 1/A security and encryption — that is fitted into the existing dead bolt on your door to make it “smart”. Level Home says you can install the Lock yourself using a basic number two scredriver — “the most common tool in the American home”, says CEO and co-founder John Martin — or you can engage Level Home’s installation partner, HelloTech, to set it up.

The key thing with the Level Lock is that you door will not look any different after you install it. But linking it up with HomeKit, you can then use an Apple iPhone or Watch to unlock it (or, you can also still use the physical keys that come with the lock to open the door). Through the app, you can then also provide one-off or repeat access to others and monitor who comes and goes.

Priced at $249 when it goes on sale (first in the US), the Lock is available now for preorder on Level Home’s site. But there is a good chance that when the Lock does become generally available, you will be able to get it in more places beyond Level’s site.

That’s because, along with the launch of the Level Lock and the company itself, Level Home is also announcing that it has raised $71 million in funding in the years that it has been in stealth, with investors including a firm called Hut 8 Ventures (unclear if connected to Hut 8 cryptocurrency mining, I’m asking), Lennar Homes — the home maker that has worked with the likes of Apple and Amazon to build in connected features into new properties — and Walmart.

The retail giant has been working double time to “level up” to Amazon on the e-commerce front, building a range of services online and increasing the ways in which it can connect with shoppers beyond visits to its large retail locations, and while Level is not disclosing any details yet on how it will work with its strategic investors, you could imagine its involvement having more than one touchpoint.

It could be a very strong sales channel for the Level Lock through its many well-visited retail locations.

But it could also be sold potentially as part of a bigger service offering, in competition with something like Amazon Key, where Walmart offers smart locks to its customers as part of a bigger home delivery business. (Walmart has already started down this road: back in 2017 it first partnered with smart lock maker August to test in-home delivery.)

Partnerships with the likes of Walmart and Lennar sound like a big deal, considering that the company hasn’t tested its product or brand in the market, and the area of smart home hardware is also very crowded already.

Part of the reason for the leap may be because of the background of the founders. John Martin (CEO) and Ken Goto (CTO) have worked together for decades across a range of major tech and other consumer companies including Microsoft, Starbucks and Apple. Underneath them, they have assembled a wider team of about 50 of like-minded people to bring that vision into the physical world.

“Much of the current company are people from Google, Microsoft, and Facebook and others,” said Goto. “We have a shared level of talent and capability.”

To be very clear, Martin and Goto are very far from the image of young startup-hopefuls, Martin told me he didn’t even really like the term “startup.” Instead, the two are taking a measured and very confident approach to the bigger task of thinking about how to approach a new generation of hardware.

For them, it isn’t so much as “disrupting” what is already being used, as it is trying to augment it to bring in a wider population of adopters beyond those who embrace the cutting edge of tech.

“We could have made anything for the connected home, so and we thought for weeks about what to invent,” Martin told me about the pair’s decision to focus first on the front door lock three years ago. “We had a couple of fundamentals: we wanted products for everyday life, and we didn’t want home automation out of the mainline of what normally happens. We didn’t want lightbulbs to change color for the sake of it, and we didn’t want to appeal just to the tech professional. So we thought entry was the right point to start.” Or, you could say entry was a good point of entry.

Of course, Level Home isn’t the first to come on this progression of logic. Smart doors and smart locks are everywhere now, although ironically, they are not being used all that much.

“When we looked at first generation smart locks, we were offended by how aggressively the experience was departing from how people use locks today.” By this, Martin is referring to things like physical keys, or aesthetically pleasing doors and locks without large objects attached to them.

Indeed, the smart home market has not been a home run so far, but it shows some promise. The smart home market overall is projected to generate revenues of nearly $74 million this year, nearly doubling to $141 billion by 2023. A stream of hardware sales will underpin that growth, with some 140 million smart locks and other home security devices — the second-biggest category after video entertainment — expected to be shipped this year, growing to 352 million by 2023 globally.

But within that, penetration has not been massive: in Europe, only around 11 percent of homes have smart home devices in them (not counting phones), and in the US, the figure is only slightly higher, at 15%. That speaks to a still-nascent market, but also the fact that many people’s imaginations, and crucially wallets, have get to be captured by what is on offer today.

That spells opportunity for the smart home entrepreneurs, and investors willing to take the leap to back them.

Martin and Goto said that they have a pipeline of several other products that they will be working on, although for now, they are keeping quiet on what those might be. I’ve searched and can only so far find patents for the Lock system, but they tell me that the basic idea will be to continue present an alternative version of the smart home: to quietly make our lives at home easier and more connected, but without any massively perceptible shifts. Move slow, don’t break things.

In a market with a lot of options for how to bring more modern objects into the mix that genuinely look like the future, this could be a good differentiator.

“We’re pleased to make an investment in Level Home as they unveil their latest technology, the Level Lock,” said Ashley Hubka, Senior Vice President of Corporate Strategy, Development and Partnerships, Walmart, in a statement. “Smart technology products and home automation provide us with more opportunities to serve customers in new ways today and into the future.”

“Level Home’s unique approach and technology is a game changer for homebuilders,” said Eric Feder, Managing General Partner, Lennar Ventures, in a statement. “As one of the nation’s leading home builders, Lennar is founded on a long tradition of quality craftsmanship and attention to detail. The Level Lock will transform the smart lock category by allowing home builders to offer innovation without having to compromise on their home experience.”

Categories: Business News

South Korea-based Mathpresso, developer of tutoring app Qanda, raises $14.5 million Series B

Startup News - 4 hours 27 min ago

Seoul-based education technology startup Mathpresso announced today that it has raised $14.5 million in Series B funding. The company’s flagship app is Qanda, which provides students with math and science help and tutoring. Participants in the round include Legend Capital, InterVest, NP Investments and Mirae Asset Venture Investment.

This brings Mathpresso’s total funding so far to $21.2 million. Its previous round of funding was a $5.3 million Series A announced at the end of last year.

Mathpresso says Qanda (the name stands for “Q and A”) is currently used by a third of students in South Korea. The app launched in markets including Japan, Vietnam, Indonesia and Singapore last year and now has users in more than 50 countries. Qanda uses AI-based optical character recognition to scan math problems. Students take a photo of a problem and upload it to get instructions for how to solve it from the app or tutors.

In a statement, Legend Capital managing director Joon Sung Park said, “As an early investor of China’s leading mobile education companies such as Zuoyebang and Onion Math, Legend Capital has witnessed robust growth of China’s mobile education market. We strongly believe that Mathpresso has the technological and operation capabilities to expand overseas and grasp new opportunities emerging from the digitization of education, such as offering personalized learning for each student.”

Categories: Business News

Bird’s chief legal & policy officer is leaving the company

Startup News - 10 hours 14 min ago

Bird, the $2.5 billion electric scooter business, is losing its chief legal and policy officer. David Estrada, who was hired last year from Kitty Hawk, is joining another mobility company, SoftBank-backed Nuro.

A spokesperson for Bird tells TechCrunch Estrada is leaving the Santa Monica-based company to be closer to his family. Nuro, for its part, is based in Mountain View, CA.

Bird’s former chief legal officer, David Estrada.

Estrada, who previously oversaw public policy at the electric aircraft company Kitty Hawk as its chief legal officer, has been responsible for Bird’s compliance and government relations efforts as the company scaled to over 100 global cities. Prior to joining Kitty Hawk, Estrada spent nearly two years as Lyft’s vice president of government relations and worked as the legal director for Google X, partnering with states on legislation around autonomous vehicles, Google Glass and drone delivery.

How Nuro plans to spend Softbank’s $940 million

Nuro, founded in June 2016, has emerged as a key player in the rapidly-expanding autonomous delivery sector. The company has attracted a whopping $1.03 billion in venture capital funding to date, according to Pitchbook. SoftBank funneled an astounding $940 million into the business earlier this year at an undisclosed valuation. In addition to SoftBank, Nuro is backed by Greylock and the Chinese venture capital firm Gaorong Capital.

The company has been developing a self-driving stack and combining it with a custom unmanned vehicle designed for last-mile delivery of local goods and services. It began piloting grocery delivery in 2018 in the Phoenix suburb of Scottsdale.

Bird has overcome a number of unique hurdles with many more afoot, including pushback from local governments who were aggravated by the sudden appearance of hundreds of scooters. At Nuro, Estrada will have the opportunity to focus on the future of unmanned delivery, another sector faced with regulatory challenges and political barriers.

Bird raises $275 million Series D round at a $2.5 billion valuation

Categories: Business News

WeWork pulls thousands of phone booths out of service over formaldehyde scare

Startup News - 14 hours 44 min ago

WeWork, the co-working empire once valued at $47 billion before reality struck, plunging the business and its investors into crisis, has another problem to add to its growing pile — one which doesn’t exactly reflect well on its core business of kitting out and maintaining modern working environments.

The problem is a safety concern affecting users of WeWork co-working spaces in the U.S. and Canada. Today the company emailed members in the regions to warn that around 1,600 phone booths installed at WeWork locations have been found to have elevated levels of formaldehyde — which it warns could cause health issues for people exposed to the gas.

WeWork blames the issue on a manufacturer of the booths.

The booths are provided in its co-working spaces for WeWork members to be able to take calls in private — given other common areas are shared by all users. 

“After a member informed us of odor and eye irritation, WeWork performed an analysis, including having an outside consultant conduct a series of tests on a sampling of phone booths. Upon receiving results late last week, we began to take all potentially impacted phone booths out of service,” it writes in an email to members.

Affected phone booths “are being taken out of service immediately, and will be removed from your location as soon as possible,” it adds. 

In addition to ~1,600 booths it has confirmed are affected, a further 700 booths are being taken out of service in what WeWork describes as “an abundance of caution” — i.e. while it carries out more checks — with the promise of a further update once it has concluded its tests. 

Members wanting to know which booths are safe to use in the meanwhile are told to contact the community team at their WeWork location.

WeWork also says alternative quiet spaces will be provided, such as in conference rooms and unused offices. 

Discussing the health risks of formaldehyde gas — a chemical which is used in various building materials –WeWork’s email warns: “Short-term exposure to formaldehyde at elevated levels may cause acute temporary irritation of the nose, throat, and respiratory system, including coughing or wheezing. These effects are typically transient and usually subside after removal of the formaldehyde source.

“Long-term exposure to formaldehyde, such as that experienced by workers in jobs who experience high concentrations over many years, has been associated with certain types of cancers. You can find additional information in this FAQ from the Occupational Safety and Health Administration.”

The email encourages any WeWork members with health concerns to contact a doctor.

A tipster who sent us the email reported experiencing a sensation of “burning eyes” after using the booths.

They also said several people in their team had experienced the same issue.

“Some complained that they felt nauseous after spending time inside the booths,” the tipster wrote. “I never felt that, but the burning eyes was 100% there for me several times. Scary stuff.”

Reached for comment, a WeWork spokesperson confirmed the formaldehyde issue, saying it’s taking “a number” of booths out of service at “some” locations in the U.S. and Canada — due to “potentially elevated levels of formaldehyde caused by the manufacturer.”

“The safety and well-being of our members is our top priority, and we are working to remedy this situation as quickly as possible,” it adds in a statement.

It is not clear exactly how many WeWork locations contain affected booths at this point.

Nor has WeWork provided more detailed information about how long members might have been exposed to elevated levels of formaldehyde — with its email merely suggesting some of the booths have been in place for “months.” 

“The potentially impacted phone booths have been installed over the past few months, exact timing varies based on location,” it writes.

Although clearly the level of exposure will vary from person to person depending on their use of the booths.

The company did not respond to a question asking whether any of its international WeWork locations are affected by the issue.

Categories: Business News

Founder’s guide to the pre-IPO secondary market

Startup News - 17 hours 52 min ago
Ryan Conner Contributor Share on Twitter Ryan Conner is a corporate attorney at Atrium part of the General Counsel Group representing early-stage startups.

The increase in activity in the pre-IPO secondary market means that founders, early employees, and investors are receiving liquidity much sooner in a company’s lifecycle than ever before. For most startups and privately held companies, liquidity is often an issue for stockholders as no market exists for selling shares and/or transfer restrictions prevent their sale. Secondary stock transactions, however, are a way to work around this problem.

Here’s a quick look at how they work and what to keep in mind, especially if you’re going through the process for the first time. (If you’re not familiar, secondaries are transactions in which an existing stockholder sells their stock for cash to third parties or back to the company itself before the company undergoes an exit; traditionally, an exit refers to an M&A or an IPO.)

Offering secondary transactions to founders is a tool VCs have been using to win deals. For example, if a VC promises that the founders will receive $1,000,000 in cash through a secondary sale from a $15,000,000 venture financing round, the founders will likely prefer that VC’s term sheet to a term sheet from a VC that does not offer that deal.

Why would a founder consider a secondary sale of their equity?

Categories: Business News

DoorDash opens a shared kitchen in Redwood City

Startup News - 2019, October 14 - 11:02pm

DoorDash is opening its first shared commissary kitchen in Redwood City, Calif., bringing new delivery and pickup options to customers in Peninsula towns, including Atherton, Menlo Park and Palo Alto.

This is part of a broader trend of companies like Deliveroo opening shared kitchens that allow restaurant partners to expand their delivery footprint without dealing with all the expenses of opening a new location.

DoorDash says this first kitchen will be used by restaurants including Nation’s Giant Hamburgers, Rooster & Rice, Humphry Slocombe and The Halal Guys.

The company also says it designs the kitchen spaces in collaboration with its partners, and argues that by putting all these restaurants together in one location, it can offer unique menu items and pairings — at launch, if you order from Rooster & Rice, you can add Humphry Slocombe ice cream pints to your order.

“Given our founders’ Bay Area roots, we are always interested in how technology can change the way food is delivered and shared,” said Rooster & Rice CFO Min Park in a statement. “We were impressed by the overall partnership and scale DoorDash could reach with this concept, and we found the notion of a delivery-only kitchen in Redwood City very appealing as it helps us test out demand in new markets, reaching new customers and areas quickly.”

As part of the launch, the company says it will offer 0% delivery fees to its DoorDash Kitchens partners through the end of the year.

DoorDash, now valued at $12.6B, shoots for the moon

Categories: Business News

Opendoor appoints CFO, CPO

Startup News - 2019, October 14 - 10:00pm

Opendoor has named Gautam Gupta its chief financial officer and chief business officer, critical roles as the business continues to alter the way in which homes are bought and sold. Uber’s former head of finance, Gupta joined the $3.8 billion home-selling platform as its chief operating officer in 2017.

The company, which has raised more than $4 billion in debt and equity funding to date, is announcing several new hires this morning. Venrock’s Tom Willerer has joined as the company’s first-ever chief product officer. Willerer previously led product at Coursera and Netflix. He joined the Silicon Valley venture capital firm Venrock in 2017 and has since struck deals with edtech startups including Make School and Flockjay.

Opendoor has also hired Julie Todaro as its president of homes and services, another newly created role. Todaro, who spent more than a decade at Amazon, most recently as its vice president of consumer electronics, will oversee market operations, customer experience and home services.

Finally, Carrie Wheeler, a partner at TPG for 20 years, and Jason Kilar, the founding CEO of Hulu, have joined Opendoor’s board of directors.

Founded in 2014, San Francisco-based Opendoor is backed by General Atlantic, Hawk Equity, SoftBank, Access Technology Ventures, Lennar Corporation, Fifth Wall Ventures, SV Angel, Norwest Venture Partners, NEA, GGV Capital, Khosla Ventures, GV and more.

Opendoor raises $300M on a $3.8B valuation for its home marketplace

Categories: Business News

Foodvisor automatically tracks what you eat using deep learning

Startup News - 2019, October 14 - 5:10pm

Meet Foodvisor, a startup that has built a mobile app that helps you log everything you eat in order to lose weight, follow a diet or get healthier. You can add data by capturing a photo of your plate before you eat.

“We’ve spent a little over two years doing research and development before we launched the app in 2018 in France,” co-founder and CMO Aurore Tran told me. Foodvisor has raised $1.5 million so far (€1.4 million).

The company is using deep learning to enable image recognition to detect what you’re about to eat. In addition to identifying the type of food, the app tries to estimate the weight of each item.

Foodvisor tries to evaluate the distance between your plate and your phone using camera autofocus data. It then calculates the area of each food item. The company then tries to extrapolate the volume of each item depending on the type of food.

And of course, if Foodvisor got something wrong, you can manually correct it before you log your meal. Many people give up on nutrition trackers because it’s too demanding. Foodvisor’s technology is all about making the data entry process as seamless as possible.

After that, you get a list of nutrition facts about what you just ate — calories, proteins, carbs, fats, fibers, etc. You can then set a goal, log activities and monitor your progress over time.

The startup has managed to attract 1.8 million app downloads already. It is available on iOS and Android in French, English, German and Spanish. “We have adjusted our product, we’ve enriched our database to better target the American market,” Tran said.

It offers a premium subscription for $5 to $10 per month. In addition to more analysis and diet plans, the main feature of the premium plan is that you can chat with a registered dietitian/nutritionist directly in the app. It turns out that artificial intelligence can’t replace real human nutritionists altogether.

Categories: Business News

Friday deadline alert: Apply to TC Top Picks @ Disrupt Berlin 2019

Startup News - 2019, October 14 - 5:00pm

We dedicate this countdown post to all the early-stage startup founders who hunger for an opportunity to break new ground. This is the final week you can apply to be a TC Top Pick and exhibit your startup — for free — in Startup Alley at Disrupt Berlin 2019 on 11-12 December.

The application window remains open until this Friday, 18 October at 12 p.m. (PT). Don’t miss your shot at media attention, investor interest and plenty of exposure to potential customers and collaborators — apply to be a TC Top Pick right now.

If you haven’t heard about our Top Picks program, here’s a brief rundown. In this pre-Disrupt competition, TechCrunch editors closely review and vet applications from any early-stage startups that fit in one of these tech categories: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, CRM/Enterprise and Education.

They’re searching for innovative, interesting startups with a real shot at success. Check out the TC Top Picks from Disrupt Berlin 2018 to get a sense of what they look for. Ultimately, they’ll select up to five startups to represent each category.

All TC Top Picks receive a free Startup Alley Exhibitor Package which, among other perks, includes three Founders passes and one full day exhibiting in a prime location within Startup Alley. This truly is a VIP experience that includes invitations to networking parties and plenty of attention from investors, global press and potential customers.

In a classic “but wait, there’s more” moment, our TechCrunch editors will take to the Showcase Stage to interview every Top Pick. We’ll record the interviews and promote the videos across our social media platforms. Talk about a great conversation starter when you’re meeting with potential clients or investors.

You don’t have anything to lose by applying to be a TC Top Pick, but you do have a lot to gain. Here’s what Caleb John, co-founder and CEO of Cedar Robotics, had to say about his experience.

“Being a TC Top Pick validates your startup, helps your business gain traction and opens doors to investors, customers or vendors. The onstage interview was a great experience, and the YouTube video exposure is huge for us.”

Disrupt Berlin 2019 takes place on 11-12 December, but you have only until this Friday, 18 October at 12 p.m. (PT) to apply to be a TC Top Pick. Take a shot and break new ground for your outstanding startup. Come and show us what you’ve got!

Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact our sponsorship sales team by filling out this form.

Categories: Business News

AI-based firefighter safety startup Prometeo wins IBM Call for Code Challenge

Startup News - 2019, October 13 - 10:00am

During an event at the United Nations Delegates Dining Room in New York City, IBM unveiled the winners of its annual Call for Code Global Challenge. The competition, which is targeted at computing solutions for global problems, crowned five winners, ranging from first responders to healthcare info.

Prometeo took the top prize for its Watson-based AI solution targeted at firefighters. The team, which is led by a 33-year firefighting veteran, has developed a tool designed to monitor health and safety in the industry, both long term and in real time. The Spanish startup developed a smartphone-sized device that straps onto the wearer’s arm to gauge things like temperature, smoke and humidity.

“If the color signal is green, the health of the firefighter is okay,” co-founder Salomé Valero explains on IBM’s site. “But if the color signal is yellow or red, the command center must do something. They must take immediate action in order to rescue or remove the firefighter from the fire.”

The team is working to roll out the device for testing in Spain, but is currently seeking funding for the project. The $200,000 prize from IBM ought to help out a bit.

The second place prize went to India/China/U.S.-based Sparrow, which has developed a platform for addressing physical and psychological health during natural disasters. UCLA’s team, Rove, scored third place with a similar concept.

Call for Code is a five-year program that aims to hand out $30 million for teams addressing widespread societal issues.

Categories: Business News

Why each Libra member’s mutiny hurts Facebook

Startup News - 2019, October 13 - 8:07am

There’s a strategic cost to the defection of Visa, Stripe, eBay, and more from the Facebook -led cryptocurrency Libra Association . They’re not just names dropping off a list. Each potentially made Libra more useful, ubiquitous, or reputable. Now they could become obstacles to the token’s launch or growth.

Fearing regulators’ inquiries not just into their Libra involvement but the rest of their businesses, these companies are pulling out at least for now. None had made precise commitments to integrating Libra into their products, and they’ve said they could still get involved later. But their exit clouds the project’s future and leaves Facebook to absorb more of the blowback.

Here’s what each of the departing Libra Association members brought to the table and how they could spawn new challenges for the cryptocurrency:

Visa

With one of most widely-accepted payment methods, Visa could have helped make Libra universally spendable. It’s also one of the most prestigious names in finance, lending deep credibility to the project. Visa’s departure leaves Libra looking more like tech companies barging into payments, conjuring fears of their move fast, break things approach that could cause financial ruin if Libra runs into problems. It also could leave Libra with a much weaker presence in brick-and-mortar shops. No one will want to own a cryptocurrency that doesn’t appreciate in value and can’t be easily spent.

MasterCard

The involvement of MasterCard alongside Visa made Libra look like the incumbents adapting to modern technologies. This made it less threatening, and gave cryptocurrency an air of inevitability. MasterCard would have also brought an even wider network of locations where Libra could one day be used for payment. Now MasterCard and Visa might actively work against Libra to prevent their payment methods being made obsolete by Libra and its elimination of transaction fees through the blockchain. Two of Libras biggest allies could become its biggest foes.

PayPal

Facebook has repeatedly told regulators that its Calibra app plus integrations into Messenger and WhatsApp would not be the only Libra wallets, pointing to PayPal . Facebook’s head of Libra David Marcus told Congress when asked about the social network’s outsized power to exploit Libra through its own Calibra wallet that “you have companies like PayPal and others that will, of course, collaborate, but [also] compete with us”. Now Facebook won’t have a scaled payment method it doesn’t own to point to as a likely alternative for people who don’t want to trust Facebook’s Calibra, Messenger, or WhatsApp to be their Libra wallet. The Libra Association also loses PayPal’s enormous network of online merchants that accept it, plus the inroad to integration into its peer-to-peer payback app Venmo. PayPal convinced the mainstream public to trust online payments — the exact kind of trust Facebook desperately needs. The fact that Marcus was also the former president of PayPal but couldn’t keep it in the association raises concerns about the group’s coalition-building prowess.

Stripe

Stripe’s enormous popularity with ecommerce vendors made it a valuable Libra Association member. Together with PayPal, Stripe facilitates a huge portion of online transactions outside of China. Its ease of integration made it a top pick for developers Facebook surely hoped would build atop Libra. Stripe’s exit destroys a critical bridge to the fintech startup ecosystem that could have helped institutionalize Libra. Now the association will have to work on engineering payment widgets from scratch without Stripe’s assistance, which could slow adoption if it ever launches.

There’s a clear reason all these payment processors bailed. Senators Brian Schatz (D-HI) and Sherrod Brown (D-OH) wrote a letter to Visa, MasterCard, and Stripe’s CEOs this week explaining that “If you take this on, you can expect a high level of scrutiny from regulators not only on Libra-related activities, but on all payment activities.”

eBay

As one of the longest standing ecommerce companies, eBay bolstered beliefs that Libra could be used to power transactions between untrusted strangers without a costly middleman. It might have also put Libra into practice on one of the top western online marketplaces outside of Amazon. Without destinations like eBay onboard, average netizens will have fewer opportunities to be exposed to Libra’s potential to eliminate transaction fees.

Mercado Pago

One of the lesser-known Libra Association members, Mercado Pago helps merchants receive payments via email or in installments. The idea of connecting financially underserved populations has been core to Facebook’s pitch for why Libra should exist. The Libra Association has been light on the details of how exactly it serves this demographic, relying on the inclusion of partners like Mercado Pago to help it figure this out later. Mercado Pago’s departure leaves Libra looking more like a financial power grab rather than a tool to assist the disadvantaged.

Who’s Left?

On Monday, the remaining Libra Association members will meet to finalize the initial member list, elect a board, and create a charter to govern the project. This forced the hands of the companies above, who had their last chance to depart this week before being pulled deeper into Libra.

UNITED STATES – JULY 16: David Marcus, head of Facebook’s Calibra digital wallet service, prepares to testify during the Senate Banking, Housing and Urban Affairs Committee hearing on “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations” on Tuesday, July 16, 2019. (Photo By Bill Clark/CQ Roll Call)

Who’s left includes venture capital firms, ride sharing companies, non-profits, and cryptocurrency companies. They are less tied up with the status quo of payment processing, and therefore had less to lose. The blockchain-specific companies were likely hoping to piggyback on financial giants like Visa to get Libra approved and create more legitimacy for their industry as a whole.

Pegging Libra to just the $ could soothe regulators, a16z says

These partners could help fund an ecosystem of Libra developers, create daily use cases, spread the system in the developing world, and push for alliances between Libra and cryptocurrency players. Facebook will need to fight to keep them aboard if it wants to avoid Libra looking like a unilateral disruption of the economy.

For Libra to actually launch, Facebook needs to make serious concessions and divert from its initial vision. Otherwise if it continues to butt heads with regulators, more members could flee. One option floated by Libra Association member Andreessen Horowitz’s a16z Crypto partner Chris Dixon was for Libra to be denominated in US dollars instead of a basket of international currencies. That might lessen fears that Libra intends to compete directly with the dollar.

It’s become apparent that Facebook will not get its ideal cryptocurrency out the door. This is the brand tax of 100 scandals coming back to bite it. Now the best it can hope for is to get even a watered-down version launched, prove it can actually help the underbanked, and then hope to convince regulators it’s well-intentioned.

Categories: Business News

Startups Weekly: YC grad Revel’s plan to connect women over 50

Startup News - 2019, October 12 - 9:00pm

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy news pertaining to startups and venture capital. Before I jump into today’s topic, let’s catch up a bit. I’ve been on a bit of a startup profile kick as of late. Last week, I was tired from Disrupt. Before that, I wrote about up and coming telemedicine company Alpha Medical.

Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

Startup Spotlight

Y Combinator’s latest batch concluded two months ago, which means my inbox is beginning to fill with pitches from companies ready to talk about the first rounds of fundraising. We’ve profiled many of the companies already, like Tandem, Narrator, SannTek Labs and more to come.

This week, I have some notes on Revel, a recent grad from the hot accelerator network that plans to create a nationwide subscription-based network tailored to women over the age of 50. The startup’s founders, Harvard Business School graduates Lisa Marron and Alexa Wahl, say there are no good existing options in the market to help women in this demographic foster new relationships.

“I think a lot of the things that exist are nonprofits that are a little antiquated now,” Marron tells TechCrunch. “I think we saw that those are really serving the need of our members’ parents’ generation, but they haven’t really adapted as much to the modern age.”

Women 50 years and older can become a member of Revel. For now, the service is free, though the company plans to charge a $100 annual fee in the coming months. Currently, Revel’s community includes 500 women. With a $2.5 million funding led by Forerunner Ventures’ Kirsten Green, the small team plans to expand within the Bay Area. They said they won’t begin establishing Revel outside the region until they raise a Series A.

It’s hard to imagine women will stay committed to paying an annual Revel membership, considering the real value comes from the company’s ability to facilitate introductions to like-minded women. Once those introductions have been made, women can discontinue their membership and develop relationships outside the service. Forerunner Ventures, however, is known for backing successful and prominent brands, like Glossier, Warby Parker and Outdoor Voices. My guess is Revel has ambitions to become the brand representing women over 50 seeking meaningful connections.

“We want to take this wide in a short number of years because we feel there is a need and opportunity to build this strong community for women of this age; venture capital in that sense was rocket fuel,” adds Marron.

VC rounds M&A
  • Uber plans to buy a majority stake in a Latin American grocery delivery business called Cornershop. The Chilean startup was founded in 2015 by Oskar Hjertonsson, Daniel Undurraga and Juan Pablo Cuevas. It will continue to operate under that leadership in its current form for now, says Uber.
  • To beat Amazon Go, Standard Cognition is buying DeepMagic, a pioneer in autonomous retail kiosks. “The $86 million-funded Standard Cognition is racing to equip storefronts with an independent alternative using cameras to track what customers grab and charge them. But Amazon’s early start in the space poses a risk that it could patent troll the startup,” writes TechCrunch’s Josh Constine.
Extra Crunch

Extra Crunch subscribers have a lot to chew on this week. Reminder, if you haven’t yet signed up for our premium content service, you still can here.

This week, I wrote about the importance of having a culture expert on staff at a venture capital firm. Increasingly, startups are being judged for their cultures, diversity of staff and more. VCs, for the most part, are unprepared to help their companies foster more inclusive environments, and that’s a problem. One firm, True Ventures, has taken a big step toward holding their companies accountable for culture and giving them real resources to help them improve things early. I talked to True Ventures’ Madeline Kolbe Saltzman about her new title, VP of Culture.

Equity

I took a break from Equity this week, but my co-host Alex Wilhelm was in studio with IPO expert James Clark. Listen to the excellent conversation here.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

Categories: Business News

Source: Nike has picked up Russell Wilson’s Tally/TraceMe in a rare acquisition

Startup News - 2019, October 12 - 7:47am

Nike has long been synonymous with premium sneakers and other sports gear, but now it seems that the company could be extending its brand into another area — digital media — thanks to the rumored acquisition of a Seattle-based startup.

TechCrunch has learned from a source that the multibillion-dollar sports giant has acquired TraceMe, which originally built an app to let fans engage with sports stars and other celebrities before later pivoting into a service called Tally, a platform aimed at sports teams, broadcasters and venues to help fans engage around sporting events.

TraceMe was originally founded by Russell Wilson, the champion quarterback of the Seattle Seahawks, who was the executive chairman of the startup. The company had raised at least $9 million from investors that included the Seattle-based Madrona Venture Group and Bezos Expeditions (Amazon CEO Jeff Bezos’ fund), as well as YouTube co-founder Chad Hurley and others, and it was last valued, in 2017, at $60 million.

Our source said the deal closed in recent weeks and that “it was a good outcome” for the company and investors. It involved both IP — the main interest, the source said, was in TraceMe’s tech rather than Tally’s — and the team.

Indeed, at least eight of them, including TraceMe’s CEO Jason LeeKeenan, an ex-Hulu executive, are now listing Nike as their place of employment. LeeKeenan describes his new role as the head of Nike Seattle. Others on the team now have taken roles that include software engineers, head of product and product designers.

No one at TraceMe and Nike that we contacted has responded to our requests for comment, but just a little while ago GeekWire (which likely had the same tip we did) published a post noting that it had a source that confirmed the deal.

The athletic footwear giant Nike is no stranger to the world of technology: it has been a longtime collaborator with the likes of Apple to develop apps for its devices and has been an early mover on the concept of bringing and integrating cutting-edge (yes, possibly gimmicky) tech into its footwear and other gear. And that’s before you consider Nike as an e-commerce force.

But while the dalliance between sports, tech and fashion is well established, this deal opens up a different frontier for the company. It’s very rare for Nike to make an acquisition, but it makes sense that if it were going to do some M&A, it would be in the area of digital media and picking up engineers to execute on a wider vision in that area.

The company is best known, of course, for its shoes and related sporty clothes, which it has for a long time created in co-branding with the biggest sports stars and has more recently started to extend to a wider circle of celebrities and hot brands in a spirit of sporty street style. These have included the likes of so-cool Supreme, Travis Scott and seemingly tentative forays into music culture.

Nike overshadows all other sports shoe brands in size, with its current market cap at nearly $117 billion, more than twice that of its closest competitor, Adidas . But Adidas has been stealing a march when it comes to partnerships with a wide network of celebrities (even if Drake prefers checks over stripes).

While it isn’t clear yet how and if Nike will be using the startup’s existing services, you could see how a deal like this could help Nike start to think about how it might leverage the collaborations and endorsements it already has in place into experiences beyond shoes, advertising and athletic performance. In this age of Instagram and influencers playing a massive role in shifting consumer sentiment (and dollars), this could give Nike a shot at building its own media platform, independent of these, on its own terms.

This is a bigger trend that we’re seeing across a lot of digital media. Consider how companies like Spotify have extended beyond simple music streaming, investing in building tools to help artists on its platform with marketing and expanding their brands: selling shoes means selling a concept, and that concept needs to have a foothold in a digital experience. 

Categories: Business News

Brad Feld: what founders need to know about recent changes in VC deal terms

Startup News - 2019, October 12 - 5:08am

Extra Crunch offers members the opportunity to tune into conference calls led and moderated by the TechCrunch writers you read every day. This week, TechCrunch’s Connie Loizos hopped on the line with prominent investor, entrepreneur, thought leader, and Techstars co-founder Brad Feld to chat about the latest edition of his book “Venture Deals,” his advice to founders and investors, and his take on hot-button issues of the day.

In their conversation, Brad and Connie discuss the need to know information when it comes to preparing for, structuring and executing venture deals, and how that information has changed over the past several decades. Feld walks through the major topics that have been added in the latest edition of the book, such as how to handle venture debt, along with tactical attributes that aren’t currently in the book, such as secondary market trading.

Brad also shares his take on the most effective fundraising tactics for founders, and which common pieces of advice might be overblown.

Brad Feld: “I think the approach to the amount of money that you’re raising is both nuanced and evolves based on what financing round you’re at. So if you’re in an early round, some of the characteristics are different than if you’re in a later round. But I think the general truism… that I like to use when people say, ‘Well, how much money should I raise?’

I start with two variables and you the entrepreneur get to define those two variables. The two variables are: the amount of money you raise and what getting to the next level means. The amount of money you should raise is the amount of money that you need to get your business to the next level. There are lots of different ways to define what next level is and by forcing yourself internally to define next level and then define what you need in terms of capital to get to that next level… when you’re raising that first round of financing or even the second or third round of financing, it helps you size rationally what you need versus reactively to whatever the market characteristics are.

I actually encourage entrepreneurs to raise the least amount of money they need to get to the next level, or at least that’s the number that they go out to market with. Not a range, not a big number because you’re trying to drive some kind of valuation characteristic off a big number, but the amount of money that you actually think you need to get to the next level. Then if you can be oversubscribed, that’s an awesome situation.”

Feld and Connie dive deeper into current issues in the startup and venture landscape, including Brad’s take on the impact of the SoftBank Vision Fund, what went down internally and externally at both WeWork and Uber, as well as how boards, executives and founders can manage cult of personality and static company cultures.

For access to the full transcription and the call audio — and for the opportunity to participate in future conference calls — become a member of Extra Crunch. Learn more and try it for free. 

Connie Loizos: I think the last time I saw you in person was out here in San Francisco at an event I was hosting and that was maybe two years ago?

Brad Feld: Yup, that’s right. That was at the Autodesk Lab if I remember correctly.

Loizos: Yes. It’s good to hear your voice, and thank you for joining us on this call. We have a lot of readers who are big fans of yours that are on the line and are eager to learn about your book “Venture Deals” and your broader thoughts about the current state of the market. That said — and I know you only have so much time — let’s dive first into the book. So Wiley, your publisher has just put out the fourth edition of this book “Venture Deals,” and it’s really easy to appreciate why. I was looking through it and it’s so incredibly instructive how venture deals come together and possible pitfalls to avoid. And given there are always new entrepreneurs emerging, it continues to be highly relevant.

How do you go about updating a book like this, given that some things change and some things stay the same?

Categories: Business News

Instacart shoppers are organizing a nationwide protest

Startup News - 2019, October 12 - 2:19am

Instacart has long been at odds with its shoppers — the people who go to the grocery store on behalf of customers. From November 3-5, thousands of Instacart shoppers plan to protest with three demands. They want Instacart to change the default tip amount to at least 10%, ditch the service fee and commit to always giving 100% of the tip to the shopper.

“We did not arrive at the 10% figure arbitrarily, rather this is what the default tip amount was back when I and many others started working for Instacart,” Vanessa Bain, an Instacart shopper wrote on Medium this week. “We are simply demanding the restoration of what was originally promised.”

Back in 2016, Instacart removed the option to tip in favor of guaranteeing its workers higher delivery commissions. About a month later, following pressure from its workers, the company reintroduced tipping. Then, in April 2018, Instacart began suggesting a 5% default tip and reduced its service fee from a 10% waivable fee to a 5% fixed fee.

“We take the feedback of the shopper community very seriously and remain committed to listening to and using that feedback to improve their experience,” an Instacart spokesperson told TechCrunch.

This protest is on the heels of a class-action lawsuit over wages and tips, as well as a tipping debacle where Instacart included tips in its base pay for shoppers. Instacart, however, has since stopped that practice and provided shoppers with back pay. Though, Fast Company recently reported that Instacart delivery drivers’ tips are mysteriously decreasing.

But it’s a new day for gig economy workers — at least in California. Last month, California Governor Gavin Newsom signed into law gig worker protections bill AB-5. This legislation will make it harder for gig economy companies to classify their workers as 1099 independent contractors when it goes into effect in January. The victory came after gig workers made their voices heard through protests and other direct actions.

What’s clear at this point is that workers are refusing to stay silent and are more than willing to advocate for themselves. Organizers of the Instacart protest have outlined three ways for shoppers to get involved. The more active approach would entail shoppers signing up for as many hours as possible from November 3 -5, but keep letting the batches time out. The more passive approach entails not signing up for any hours at all, and not accepting any on-demand batches.

“Despite loyalty to Instacart and the customers we’ve gotten to know over the years, many of us have been forced to find other gigs to make ends meet,” Bain wrote. “But not all Shoppers are so lucky or even have the ability to be so fluid with their careers or their time. A large portion of the working body are single parents, caregivers, are disabled or have other conditions or obligations that would make getting other work difficult or impossible. Instacart is highly aware of this and weaponizes this fact against us when turning the pay dials lower and lower.”

Categories: Business News

Polte raises $12.5 million to track devices using LTE signal

Startup News - 2019, October 12 - 1:18am

Polte has raised another $12.5 million. The company is building a service that leverages 4G (and potentially 5G) signal to track things for commercial and industrial use cases. The main advantage is that using cellular signal uses a lot less battery than acquiring GPS location and transmitting it over cellular.

Today’s funding round is an extension of the company’s Series A round. In 2017, Polte raised $6 million — and the company is raising another $12.5 million this year. Polte isn’t disclosing the list of investors. The startup participated in TechCrunch’s Startup Battlefield.

There are many potential use cases for Polte, but most of them involve tracking stuff on the move with as little battery as possible. You could use it for your supply chain, if you’re running a logistics or transportation company, in the energy or automotive industry, etc.

If you want to use an IoT device to track a package over multiple weeks, it can be a costly effort as you need to determine the location of the package using GPS and transmit the location of the package over the air. While GPS is insanely accurate, it also requires a ton of battery just to position a device on a map.

That’s why some devices rely on Wi-Fi signal to triangulate a position with a database of Wi-Fi access points. But that’s not as accurate, especially in the countryside.

Polte turns data from the cell modem into location information. It works with existing modems; Polte is a software solution. None of the computing is done on the device itself. Polte-enabled devices transmit 300 bytes of data back to Polte’s servers so the company can determine the location a few seconds later.

This way, you can use cheaper IoT devices to track packages. And if you’re running a company that wants to track thousands or millions of items, that could help you save a ton of money over the long run.

Categories: Business News

Uber to acquire grocery delivery startup Cornershop

Startup News - 2019, October 11 - 11:09pm

Uber will acquire Cornershop, a grocery delivery startup that began life serving the Latin American market and recently shifted to offer service in Toronto, its first North American city. Uber announced on Friday that it expects its acquisition of a majority ownership stake in Cornershop in early 2020, once it receives all the necessary regulatory sign-offs.

Cornershop was founded in 2015 by Oskar Hjertonsson, Daniel Undurraga and Juan Pablo Cuevas; it’s headquartered in Chile. The company will continue to operate under that leadership in its current form for now, Uber says, and will report to a board that counts Uber leadership in the majority of its overall makeup.

Over the course of four rounds of funding, Cornershop raised $31.7 million from investors including Accel, Jackson Square Ventures and others. The on-demand grocery company was supposed to be acquired by Walmart in a deal valued at $225 million announced in September, but that deal ultimately fell apart in June when Mexican anti-trust regulators blocked it from going through.

Meanwhile, Walmart has continued to work with Cornershop, expanding its service offerings in Toronto with the startup as recently as yesterday. Uber has previously experimented with grocery delivery, including in partnership with Walmart, and Uber CEO Dara Khosrowshahi has said that grocery delivery is a natural place for the company to expand its business, given the success of Uber Eats. It’ll face competition from entrenched players, including Instacart and Postmates, but Uber Eats also faced competition from much more established players at its genesis, too.

The deal is still subject to regulatory approval, as mentioned, and that’s exactly where the planned Walmart acquisition stumbled, so it’s worth keeping a close eye on this one. Still, Uber’s not making any secret of its intentions with the grocery category, so that looks likely to take shape one way or another.

Categories: Business News

Club Factory raises $100M to expand its lifestyle e-commerce platform in India

Startup News - 2019, October 11 - 11:00pm

Club Factory, a Chinese e-commerce platform that sells fashion and beauty items and electronics accessories, has raised $100 million in a new financing round as it looks to expand its footprint in India.

The new financing round — Series D — was led by Qiming Venture Partners, Bertelsmann, IDG Capital “and  other Fortune 500 companies from the U.S. and Asia,” the five-year-old Hangzhou-headquartered startup said. Club Factory, which raised $100 million in its previous financing round early last year, has raised about $220 million to date.

Club Factory has amassed more than 70 million users on its platform, of which about 40 million live in India. The startup cited figures from app analytics firm App Annie to claim that Club Factory is now the third-largest e-commerce platform in India, surpassing once a market-leader Snapdeal.

Club Factory does not charge local sellers any commission fee, incentivizing them to cut down the cost of their items and expand offerings. The number of sellers on its platform in India has grown by 10X in the last six months, the startup claimed. Club Factory, which has about 5,000 sellers in India, plans to double that figure by year-end, it said.

A screenshot of Club Factory’s homepage

“At the same time, we have also pioneered to strengthen the ‘store-within-platform’ concept in India’s e-commerce industry, allowing direct contact between buyers and sellers through our application,” said Vincent Lou, co-founder and chief executive of Club Factory, in a statement.

He added, “We have changed the status of the Indian e-commerce industry that monopolized information of buyers and sellers, allowing SMEs to own their customers and run their business better. All this, combined with our strategy to reduce the transaction costs of buyers and sellers and allow more local players to enter the ecosystem, has worked very well for us in India.”

The startup said in the coming months it will also bulk up more items on its platform and introduce new product categories.

Categories: Business News

Apester unveils a new Story Strip format for online publishers

Startup News - 2019, October 11 - 10:43pm

Apester, which helps digital publishers add interactivity to their content, is rolling out a new format called the Story Strip.

CEO and co-founder Moti Cohen told me that the Story Strip is modeled on the Story format popularized by Snapchat and Instagram — a format that he praised for being one of the few content types that’s truly “tailored to the mobile experience,” offering a fast, interactive experience for readers.

Cohen said that by bringing the format out of “the social walled gardens” and allowing publishers to embed Story Strips into their articles, Apester is “paving the way for media companies to capture a new audience, a young audience.”

You can see a Story Strip for yourself on TV Insider, a pop culture and entertainment website of NTVB Media. It appears in articles as a carousel of related stories, allowing readers to select the story that interests them and then quickly swipe through slides summarizing the story highlights.

Cohen said a Story Strip can be created by a publisher’s editorial team, or Apester can automatically generate them based on an article. And because they can also include ads, this creates new monetization opportunities for publishers. In fact, Apester says TV Insider has seen its daily revenue double since the two companies started working together.

As for how these kinds of content widgets might fit in as publishers explore subscriptions and other business models beyond advertising, Cohen argued that even as business models change, “the blend is what’s going to be important.”

And by allowing publishers to engage with users and collect data about their behavior, he said, “Apester is going to allow you to monetize all of [your audiences] differently … You can use the engagement that’s happening and understand why it’s happening in order to drive the right action.”

Publisher adtech startups Taboola and Outbrain merge in $850M deal to take on Google and Facebook

Categories: Business News

Rahko raises £1.3M seed from Balderton for quantum machine learning tech

Startup News - 2019, October 11 - 9:34pm

There remains a problem with the race to create a quantum computer, which is that experiments in this area can be extremely error-prone. Rahko is a new U.K. startup that thinks it can address this problem with what’s known as “Quantum machine learning.”

It’s now raised £1.3 million ($1.6 million) in a seed round led by Balderton Capital, a rare move for a VC that normally only comes in at a Series A level. Joining the round is AI Seed and angel investors Charles Songhurst (former Microsoft head of Corporate Strategy), Tom McInerney (founder, TGM Ventures), John Spindler (CEO, Capital Enterprise) and James Field (CEO, LabGenius).

Rahko says it is building “quantum discovery” capabilities for chemical simulation, which could enable groundbreaking advances in batteries, chemicals, advanced materials and drugs. It was started by co-founders Leonard Wossnig, Edward Grant, Miriam Cha and Ian Horobin.

Leo and Ed were longtime collaborators through their PhDs at University College London. They had been working on research in quantum machine learning (QML) with now lead developers Shuxiang Cao and Hongxiang Chen for several years and had been consolidating all their research into a QML platform.

They say the QML platform attracted serious attention from a tech giant and overtures were made. Leo and Ed made the decision not to give away control of the sum of their work, and decided instead to launch a business to commercialize it.

Chemical simulation is a vital capability for research that has not advanced significantly in recent years due to the limited computational power of classical computers. Rahko claims it has an arsenal of tools that may make quantum computers accessible and commercially usable at an accelerated pace, often through the use of hybrid approaches with classical computers.

Leo Wossnig, CEO, said: “Most people find quantum computers mysterious and wonder if they are going to save or break the world as we know it. In reality, quantum computing is going to unlock radical advances in areas of research and technology in which we have found ourselves stuck for some time now. Our team is excited to get together every day to work on problems that would have been impossible to solve only a couple of years ago. We are delighted to welcome on board this unique group of investors who truly share our excitement.” Earlier this year, Wossnig was the recipient of the prestigious 2019 Google Fellowship in Quantum Computing for his achievement in computer science.

Lars Fjeldsoe-Nielsen, general partner at Balderton Capital, said: “Rahko is one of the top teams in the world working on a complex space at the very edge of science and computing. The application of discoveries within quantum has already been profound and impacted our fundamental understanding of the world around us. The pace and rate of change in this field over the past few years has been astonishing, and we feel incredibly lucky to be supporting this exceptional team as they continue to push the boundaries of what’s possible.”

Rahko is one of several startups originating from UCL’s Computer Science programme, supported by Conception X, a venture builder for deep tech startups. It works in partnership with several of the world’s largest quantum hardware manufacturers, leading academic teams and national laboratories.

Wossnig added: “Quantum software is a relatively new field. It is growing very quickly but at this stage the field is small enough for us to know all of the best teams out there and be working with many of them. IBM and Microsoft, for instance, have large software teams but we are partners with both of them.”

The entire quantum computing industry is relying on quantum hardware maturing to a scale that will allow powerful, commercially valuable applications. It’s estimated this will be in three-five years. Until this happens it is a little premature to say definitively who is leading the race.

Categories: Business News

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