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Yesterday — November 13th 2019Your RSS feeds

Mirantis acquires Docker Enterprise

By Frederic Lardinois

Mirantis today announced that it has acquired Docker’s Enterprise business and team. Docker Enterprise was very much the heart of Docker’s product lineup, so this sale leaves Docker as a shell of its former, high-flying unicorn self. Docker itself, which installed a new CEO earlier this year, says it will continue to focus on tools that will advance developers’ workflows. Mirantis will keep the Docker Enterprise brand alive, though, which will surely not create any confusion.

With this deal, Mirantis is acquiring Docker Enterprise Technology Platform and all associated IP: Docker Enterprise Engine, Docker Trusted Registry, Docker Unified Control Plane and Docker CLI. It will also inherit all Docker Enterprise customers and contracts, as well as its strategic technology alliances and partner programs. Docker and Mirantis say they will both continue to work on the Docker platform’s open-source pieces.

The companies did not disclose the price of the acquisition, but it’s surely nowhere near Docker’s valuation during any of its last funding rounds. Indeed, it’s no secret that Docker’s fortunes changed quite a bit over the years, from leading the container revolution to becoming somewhat of an afterthought after Google open-sourced Kubernetes and the rest of the industry coalesced around it. It still had a healthy enterprise business, though, with plenty of large customers among the large enterprises. The company says about a third of Fortune 100 and a fifth of Global 500 companies use Docker Enterprise, which is a statistic most companies would love to be able to highlight — and which makes this sale a bit puzzling from Docker’s side, unless the company assumed that few of these customers were going to continue to bet on its technology.

Here is what Docker itself had to say. “Docker is ushering in a new era with a return to our roots by focusing on advancing developers’ workflows when building, sharing and running modern applications. As part of this refocus, Mirantis announced it has acquired the Docker Enterprise platform business,” Docker said in a statement when asked about this change. “Moving forward, we will expand Docker Desktop and Docker Hub’s roles in the developer workflow for modern apps. Specifically, we are investing in expanding our cloud services to enable developers to quickly discover technologies for use when building applications, to easily share these apps with teammates and the community, and to run apps frictionlessly on any Kubernetes endpoint, whether locally or in the cloud.”

Mirantis itself, too, went through its ups and downs. While it started as a well-funded OpenStack distribution, today’s Mirantis focuses on offering a Kubernetes-centric on-premises cloud platform and application delivery. As the company’s CEO Adrian Ionel told me ahead of today’s announcement, today is possibly the most important day for the company.

So what will Mirantis do with Docker Enterprise? “Docker Enterprise is absolutely aligned and an accelerator of the direction that we were already on,” Ionel told me. “We were very much moving towards Kubernetes and containers aimed at multi-cloud and hybrid and edge use cases, with these goals to deliver a consistent experience to developers on any infrastructure anywhere — public clouds, hybrid clouds, multi-cloud and edge use cases — and make it very easy, on-demand, and remove any operational concerns or burdens for developers or infrastructure owners.”

Mirantis previously had about 450 employees. With this acquisition, it gains another 300 former Docker employees that it needs to integrate into its organization. Docker’s field marketing and sales teams will remain separate for some time, though, Ionel said, before they will be integrated. “Our most important goal is to create no disruptions for customers,” he noted. “So we’ll maintain an excellent customer experience, while at the same time bringing the teams together.”

This also means that for current Docker Enterprise customers, nothing will change in the near future. Mirantis says that it will accelerate the development of the product and merge its Kubernetes and lifecycle management technology into it. Over time, it will also offer a managed services solutions for Docker Enterprise.

While there is already some overlap between Mirantis’ and Docker Enterprise’s customer base, Mirantis will pick up about 700 new enterprise customers with this acquisition.

With this, Ionel argues, Mirantis is positioned to go up against large players like VMware and IBM/Red Hat. “We are the one real cloud-native player with meaningful scale to provide an alternative to them without lock-in into a legacy or existing technology stack.”

While this is clearly a day the Mirantis team is celebrating, it’s hard not to look at this as the end of an era for Docker, too. The company says it will share more about its future plans today, but didn’t make any spokespeople available ahead of this announcement.

Yahoo Japan and Line are reportedly going to merge

By Romain Dillet

According to Nikkei, messaging app Line and Yahoo Japan are about to merge and form a single tech company. Despite the name, Yahoo Japan is currently 100% owned by Z Holdings, a company that is controlled by Japanese telecom company SoftBank (Yahoo Japan isn’t related with TechCrunch’s parent company Verizon Media). Line Corporation is owned by Naver Corporation, a South Korean internet giant.

The two companies are still discussing terms of the deal according to Nikkei. But you could imagine Z Holdings becoming a 50-50 joint venture between SoftBank and Naver, with Z Holdings owning both Yahoo Japan and Line.

Line operates one of the most popular messaging apps in Japan. In addition to conversations, the company operates Line Pay, Line Taxi and other services. But competition has been fierce in the messaging space.

Yahoo Japan was originally formed by Yahoo and SoftBank in the late 1990s. When Verizon acquired Yahoo in 2017, Verizon didn’t acquire Yahoo’s stake in Alibaba and Yahoo Japan. Yahoo created a spin-out company called Altaba to hold those stakes.

Altaba first sold its stake in Yahoo Japan. In July 2018, SoftBank acquired part of Altaba’s stake in Yahoo Japan in order to increase its ownership of Yahoo Japan. Altaba later sold its remaining Yahoo Japan shares, its Alibaba shares and shut down. In 2019, SoftBank received additional shares to become Yahoo Japan’s parent company.

Yahoo Japan is a household name and a big internet conglomerate in Japan. It has an online advertising business, an e-commerce business, finance services and more. Yahoo Japan and Line probably hope to reach more users and boost engagement with the merger.

We’ve reached out to Line Corporation and Z Holdings and will update if we hear back.

Plum, the ‘AI’ money management app, raises $3M more and comes to Android

By Steve O'Hear

Plum, the U.K.-based “AI assistant” to help you manage your money and save more, has raised $3 million in additional funding — money it plans to use for further growth, including European expansion.

The London company has also quietly launched its app for Android phones, adding to an existing iOS app and Facebook Messenger chatbot.

Backing this round — which is essentially a second tranche to Plum’s earlier $4.5 million raise in the summer — is EBRB and VentureFriends, both existing investors. Christian Faes, founder and CEO of LendInvest has also participated.

It brings the fintech startup’s total funding to $9.3 million since being founded by early TransferWise employee Victor Trokoudes, and Alex Michael, in 2016.

The new investment is said to come at the end of a year of “rapid expansion for Plum” in both London and Athens, including growing the team to 31 employees. Senior hires include Max Mawby, Plum’s head of Behavioural Science, who previously worked for the U.K. government and ran the fintech sector-focused Behavioural Insights Team.

In a call, Trokoudes told me that take-up for Plum’s iOS app has been high and Android is also following a similar trajectory, proof that the startup’s AI assistant has perhaps outgrown its chatbot and Facebook Messenger beginnings (competitor Cleo has also released dedicated iOS and Android apps as an alternative to Facebook Messenger).

He also says Plum now has 650,000 registered users, of which around 70% are active monthly. In recent user feedback sessions conducted by the startup, the biggest draw to the app is that its aim of changing financial behaviour to help people save more appears to be working.

When users stick around using Plum for long enough, Trokoudes says they are surprised (and delighted) that it actually works.

Like similar apps, Plum’s “artificial intelligence” deems what you can afford to save by analysing your bank transactions. It then puts money away each month in the form of round-ups and/or regular savings.

You can open an ISA investment account and invest based on themes, such as only in “ethical companies” or technology. Another related feature is “Splitter,” which, as the name suggests, lets you split your automatic savings between Plum savings and investments, selecting the percentage amounts to go into each pot from 0-100%.

Trokoudes says that Plum recently launched two new “intelligent” saving rules: the 52-Week Challenge, which aims to help you save £1367 over a year; and the Rainy Day Rule, which puts aside money whenever it rains (yes, really!).

“Saving rules use automation to help people save more effectively without overloading them with information,” adds the Plum founder in a statement. “We have good evidence that this approach works: our automated round-ups feature, that we launched earlier this year has become a firm favourite among Plum users, boosting their savings by 50% on average.”

Meanwhile, another one of Plum’s competitors, Chip, recently raised £3.8 million in equity crowdfunding on Crowdcube. It was part of a round targeting $7.3 million in total, although it isn’t clear if all of that has closed yet (last time I checked the company had so far secured $5 million). Noteworthy, the equity crowdfund gave Chip a pre-money valuation of £36.78 million based on “over 153,000” accounts opened.

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HBO’s former CEO said to be in talks with Apple TV+ for an exclusive production deal

By Darrell Etherington

The man who oversaw the creation of some of HBO’s most highly-praised ‘prestige TV’ could soon be making shows for Apple TV+, according to a new report from the Wall Street Journal. Richard Plepler, who was HBO’s Chairman and CEO up until he parted ways with the company last February following its acquisition by AT&T, is nearing an exclusive production deal with Apple’s new original content streaming service, the report says.

Plepler, who spent almost 30 years at HBO, including six as its CEO during which the media company aired some of its biggest hits, including ‘Game of Thrones,’ would definitely bring some big-name industry influence to Apple’s efforts. Not that Apple TV+ lacks for that in its early offing, either: The premiere slate of original shows include Jennifer Aniston and Reese Witherspoon-led ‘The Morning Show,’ and and a show centred around Oprah’s Book Club, just to name a couple of examples.

The deal, which isn’t yet final but might be signed officially “within the next few weeks,” per the report, would be between Apple and Plepler’s RLP & Co., a production company he established after leaving HBO. There’s nothing yet to indicate what kind of projects he’d be working on for Apple TV+, but it’s a logical target for Apple’s new original content enterprise to pursue, given that its focus thus far appears to be on fewer, big budget and high-profile projects, but critical reception hasn’t been up to par with the kind of TV that HBO has a track record of producing.

Lawyers hate timekeeping — Ping raises $13M to fix it with AI

By Josh Constine

Counting billable time in six-minute increments is the most annoying part of being a lawyer. It’s a distracting waste. It leads law firms to conservatively under-bill. And it leaves lawyers stuck manually filling out timesheets after a long day when they want to go home to their families.

Life is already short, as Ping CEO and co-founder Ryan Alshak knows too well. The former lawyer spent years caring for his mother as she battled a brain tumor before her passing. “One minute laughing with her was worth a million doing anything else,” he tells me. “I became obsessed with the idea that we spend too much of our lives on things we have no need to do — especially at work.”

That’s motivated him as he’s built his startup Ping, which uses artificial intelligence to automatically track lawyers’ work and fill out timesheets for them. There’s a massive opportunity to eliminate a core cause of burnout, lift law firm revenue by around 10% and give them fresh insights into labor allocation.

Ping co-founder and CEO Ryan Alshak (Image Credit: Margot Duane)

That’s why today Ping is announcing a $13.2 million Series A led by Upfront Ventures, along with BoxGroup, First Round, Initialized and Ulu Ventures. Adding to Ping’s quiet $3.7 million seed led by First Round last year, the startup will spend the cash to scale up enterprise distribution and become the new timekeeping standard.

I was a corporate litigator at Manatt Phelps down in LA and joke that I was voted the world’s worst timekeeper,” Alshak tells me. “I could either get better at doing something I dreaded or I could try and build technology that did it for me.”

The promise of eliminating the hassle could make any lawyer who hears about Ping an advocate for the firm buying the startup’s software, like how Dropbox grew as workers demanded easier file sharing. “I’ve experienced first-hand the grind of filling out timesheets,” writes Initialized partner and former attorney Alda Leu Dennis. “Ping takes away the drudgery of manual timekeeping and gives lawyers back all those precious hours.”

Traditionally, lawyers have to keep track of their time by themselves down to the tenth of an hour — reviewing documents for the Johnson case, preparing a motion to dismiss for the Lee case, a client phone call for the Sriram case. There are timesheets built into legal software suites like MyCase, legal billing software like TimeSolv and one-off tools like Time Miner and iTimeKeep. They typically offer timers that lawyers can manually start and stop on different devices, with some providing tracking of scheduled appointments, call and text logging, and integration with billing systems.

Ping goes a big step further. It uses AI and machine learning to figure out whether an activity is billable, for which client, a description of the activity and its codification beyond just how long it lasted. Instead of merely filling in the minutes, it completes all the logs automatically, with entries like “Writing up a deposition – Jenkins Case – 18 minutes.” Then it presents the timesheet to the user for review before they send it to billing.

The big challenge now for Alshak and the team he’s assembled is to grow up. They need to go from cat-in-sunglasses logo Ping to mature wordmark Ping.  “We have to graduate from being a startup to being an enterprise software company,” the CEO tells meThat means learning to sell to C-suites and IT teams, rather than just build a solid product. In the relationship-driven world of law, that’s a very different skill set. Ping will have to convince clients it’s worth switching to not just for the time savings and revenue boost, but for deep data on how they could run a more efficient firm.

Along the way, Ping has to avoid any embarrassing data breaches or concerns about how its scanning technology could violate attorney-client privilege. If it can win this lucrative first business in legal, it could barge into the consulting and accounting verticals next to grow truly huge.

With eager customers, a massive market, a weak status quo and a driven founder, Ping just needs to avoid getting in over its heads with all its new cash. Spent well, the startup could leap ahead of the less tech-savvy competition.

Alshak seems determined to get it right. “We have an opportunity to build a company that gives people back their most valuable resource — time — to spend more time with their loved ones because they spent less time working,” he tells me. “My mom will live forever because she taught me the value of time. I am deeply motivated to build something that lasts . . . and do so in her name.”

PacketAI predicts IT incidents by parsing large event data sets

By Romain Dillet

Meet PacketAI, a French startup that wants to alert you when there’s something wrong with your app or service. The company uses machine learning to parse raw event data and find out if there’s anything wrong.

PacketAI can intercept incidents at many different levels. For instance, the service can tell you if your users can’t write something on your database or if there’s something wrong with your compute layer.

PacketAI doesn’t try to reinvent the wheel. The startup is well aware that there are many monitoring tools our there — Datadog, Splunk and Dynatrace for instance.

“Those tools are primarily designed for humans so that they can understand information delivered by machines,” co-founder and CEO Hardik Thakkar told me.

PacketAI integrates directly with the APIs of Datadog, Splunk or Dynatrace to analyze raw event data in real time. Instead of scrolling through thousands of lines, you can get an alert that tells you that bank transfers take a a lot more time than usual to go through for instance.

Eventually, you should be able to repair your problem much more quickly, which could potentially improve your revenue.

For now, the startup creates a machine learning model for each client. But the plan is to create a model for each vertical as soon as you have four or five companies in the same space using PacketAI. You could imagine a model for banking companies, a model for telecom companies, etc.

The startup already raised $2.3 million (€2.1 million) from Aster Capital, BNP Paribas Developpement, Entrepreneur First and SGPA.

PacketAI is already working with some clients on the first implementations of its product. The service will be available to anyone in early 2020. Pricing varies depending on the number of nodes (any physical or virtual network element) you want to monitor using PacketAI.

Angular Ventures outs $41M seed fund for European and Israeli enterprise and ‘deep tech’ startups

By Steve O'Hear

Angular Ventures, the early-stage enterprise and “deep tech”-focused VC firm founded by former DFJ Esprit partner Gil Dibner, is announcing the closing of its debut fund at $41 million.

Targeting startups in Europe and Israel, Angular Ventures has been operating in so-called “stealth mode” for almost two years, seeing its portfolio grow to 12 companies. The VC typically invests between $250,000 and $1.5 million, from writing a startup’s first cheque to Series A. It says it aims to do five-seven new investments per year.

Companies backed by Angular include “service intelligence” startup Aquant.io, HR workplace misconduct platform Vault, nano-tech security technology provider Dust Identity (also backed by Kleiner Perkins) and food supply chain optimization company Trellis.

Notably, Dibner is Angular Ventures’ sole general partner. Prior to founding Angular Ventures, he was most recently running an angel syndicate on AngelList, although his venture career goes back much further.

Prior to leading the syndicate, Dibner was a partner at London-based venture capital firm DFJ Esprit, which he departed in March 2015. Before that he was a principal at Index Ventures, also in London, and had earlier spells at Israeli VCs Gemini Israel Ventures and Genesis Partners, both in Tel Aviv.

Dibner says he wanted to “re-imagine” early-seed venture capital in Europe and Israel by building what he describes as a sector-focused firm, and removing geographical boundaries by investing in both Europe and Israel, and establishing a U.S. presence to support portfolio startups with global expansion.

Whether or not you think that is particularly unique, you’re mileage may vary, but there is no doubt Dibner has a decent investment track record in the enterprise space and beyond, either way.

Throughout his career to date, Dibner says he has backed 40 companies. Breaking this down further: 28 have raised capital from U.S.-based VC firms or exited to U.S.-based acquirers. In fact, he’s seen eight exits overall, and two of Dibner’s investments — JFrog and SiSense — have reached “unicorn” status, i.e. a valuation of $1 billion or more.

Despite his track record, Dibner says it took four years to finally close this fund, which has given him even more empathy for founders during fundraising.

“It took nearly four years to get from concept to a first close, and although we were ultimately significantly oversubscribed, I had to hear a lot of ‘nos’ to get this done,” he tells TechCrunch. “There are a lot of differences between raising a fund and raising money for a company, but experience has given me even more empathy with founders who are often enduring very difficult fundraising pathways. The most ambitious ideas usually have the most difficult fundraising.”

It is also probably worth noting that all of Angular’s LPs are private/commercial — in other words, no taxpayer money is at stake here, unlike a plethora of European VC funds. And whilst Dibner is the sole GP, he says he’s working with a team of advisors helping to source deals, provide due diligence and support portfolio companies.

They include: Fred Simon, founder of JFrog; Eldad Farkash, founder of SiSense and Firebolt, an Angular portfolio company; Guy Poreh, former EVP New Media at BBDO, who led Wix’s U.S. market launch and founded Playground; Jerry Dischler, who leads product for Google search and YouTube search; and Phil Wickham, who founded Sozo Ventures and is the chairman of the Kauffman Fellows Program.

Balderton Capital raises new $400M fund to back European tech startups at Series A

By Steve O'Hear

Balderton Capital, one of the so-called “big four” early-stage VC firms in London (the others being Accel, Atomico and Index), has raised a new $400 million fund to continue backing European tech startups at Series A.

Dealroom recently released a report that pegged Balderton as the most active Series A investor in Europe (between 2014-2018), and in many ways this new fund is a continuation, and business as usual for the firm. It is also roughly the same size as the VC’s last Series A fund, which it closed in 2017 at $375 million.

That’s not to be confused with Balderton’s other recently launched “secondary” fund, which is dedicated to buying equity stakes from early shareholders in European-founded “high-growth, scale-up” technology companies. The move essentially formalised the secondary share dealing that already happens — typically as part of a Series C or other later rounds — which often sees founders take some money off the table so they can improve their own financial situation and won’t be tempted to sell their company too soon, but also gives early investors a way out so they can begin the cycle all over again.

Meanwhile, Balderton says the new Series A fund is being launched against a backdrop of “unprecedented momentum” within the European tech ecosystem. The VC notes that the number of Series A rounds in Europe per year has quadrupled since 2012, with the total amount of VC funding going into European startups hitting record highs last year — from €11.5 billion in 2014 to a chunky €24.6 billion in 2018.

That, together with the sheer number of new funds that have launched over the last 12 months — and three I’m covering this week — leads me to wonder out loud if tech, and Europe in particular, has entered a bubble.

“I don’t think we are,” Balderton Partner Suranga Chandratillake tells me during a call, before acknowledging that it is often hard to know if you are in a bubble if you are actually in one. “If you look at the public markets, the valuations around tech companies, while they are high, I would argue that in many cases they are justifiable when you look at the profitability and the growth rate of those businesses, especially things like enterprise software. But I think it’s harder when you get into businesses where they are more one-off… [where] we don’t necessarily know exactly how to value those long term.”

On Europe specifically, Chandratillake points out that some European tech hubs are more heated than others and that sentiment can vary considerably per geography. “As you get to more and more the local level, of course, you can experience what feel like sort of comparative bubbles. So, you know, maybe London was expensive two years ago, and France is expensive right now at Series A or whatever, but I don’t think those things really matter in the long run, because ultimately they iron out as long as the employee valuations are sensible. And as an investor, you’re paying attention to that stuff when you’re going to make an investment.”

One rumour within London VC is there are firms that have felt pressured to do follow-on investments in portfolio companies they otherwise might not have during cooler times, for fear of signalling to the market not just that a company isn’t doing well but that the VC firm itself isn’t as founder-friendly as competing VCs. How does Balderton think about signaling?

“Signaling is a massive deal [in venture capital],” says Chandratillake. “And actually, this is an area where, you know, we think we have a fairly strong position, because for over 10 years now we have focused almost entirely on Series A… and we are very open about that.”

He says that unlike other Series A VCs that invest at Series B or Series C, too, and also quite often dabble in seed, companies backed by Balderton shouldn’t expect the firm to “lead or be a major part of your Series B.”

“Of course, we’ll help, we’re going to do some of our pro-rata or maybe all of our pro-rata to try and protect some of our ownership, all those sorts of rational things we do. But we’re not raising a fund which allows us to be a big investor in your Series B and your C and your D and so on. I think as long as you’re really open with entrepreneurs about that early, they totally get that and they understand why it works economically for us and why it’s a good thing.

“Then if you do that for a long enough period of time, as we have, and stick to that — so you don’t do weird things like, you know, say that, but then on the other hand with the most interesting company, you try to bully your way into more of a Series B or whatever, then the ecosystem overall starts to realise… then the signal problem goes away.”

With regards to future investments, Chandratillake says Balderton will continue to invest all over Europe across any sector where “information technology” is being leveraged and creating value.

In the fund prior to last, for example, fintech was a major focus, backing companies like Revolut and Nutmeg, but more recently the VC has been investing more in health tech, where computer science is helping life science solve problems faster or cheaper.

“I think that there will be more of that,” says Chandratillake. “There’s a lot more to be done in this health tech space, both at the patient level, but also actually a lot of really interesting things behind the scenes that will help health systems operate more efficiently and use technology in interesting ways. It’s a really interesting area for Europe, because we have, you know, within the continent, a plethora of different health systems — from almost fully private systems through to obviously entirely state single payer systems like the NHS. It’s a great place to experiment with different models. It’s also of course, as a continent, home to some of the most important pharmaceutical companies [in the world].”

OLX Group invests up to $400M in used car marketplace Frontier Car Group at $700M valuation

By Ingrid Lunden

Frontier Car Group, the Berlin-based startup building used-car marketplaces targeting high-growth, emerging markets, has picked up another significant round of funding from a strategic backer also focusing on the same geographical opportunity.

Today, OLX, the online classifieds division Prosus (the digital division of Naspers that listed earlier this year in Europe) announced that it would invest up to $400 million in Frontier, in a mix of equity, secondary share acquisitions and existing business shares. The deal will include a primary capital injection of an unspecified amount, which OLX has confirmed to me values Frontier Car Group at $700 million, post-money.

In terms of business shares: OLX also said that it will be contributing its shares in a JV it had in place with Frontier in India and Poland. Meanwhile, the secondary acquisitions — the shares are currently held by other investors, founders and management — are subject to a tender process. The markets that Frontier operates in now include Nigeria, Mexico, Chile, Pakistan, and Indonesia, and the USA (where it acquired WeBuyAnyCar last year) in addition to India and Poland.

Notably, even before the full $400 million amount is exercised (that is, after the tender process is completed), an OLX spokesperson confirmed that first capital injection will make it Frontier’s largest single shareholder (but not the majority shareholder), which essentially values the deal at less than $350 million (based on the $700 million valuation).

Today, Frontier Car Group offers buyers and sellers a range of services: in addition to basic inventory listings, there are inspection reports, financial, pricing guides, warranties and insurance. The plan will be to expand more services for one of the key players in the used-car space, dealers — via Frontier’s Dealer Management System — more resale services (via OLX), and more CarFax/Blue Book-style pricing guides and other products.

Frontier sold about $700 million worth of cars in the past year, triple its value of a year before.

As a point of reference, in May of last year, when the company raised $58 million, it had sold 50,000 cars to date and was on track for $200 million in annualised revenues. CEO and cofounder Sujay Tyle says the company has been on a growth tear.

“FCG has nearly tripled performance across every key metric since the first OLX Group investment less than 18 months ago and has expanded to four new countries in that time,” said Sujay Tyle, the co-founder and CEO, in a statement. “This is a testament to FCG’s team, the ripe market opportunity, and the results of early integration with OLX in our key markets. Together with OLX and Prosus, we are aiming to revolutionize the used car market in several emerging and developed economies by adding trust, transparency and a comprehensive suite of services to all participants in the ecosystem.”

“Together with FCG, we are aiming to build the leading global used car marketplace, offering a premium and convenient service to millions of car buyers, sellers and dealers,” said Martin Scheepbouwer, CEO of OLX Group. “We’re in a unique position to accelerate the expansion of this platform worldwide. Our experience in India is a great proof of concept, where within the space of a year, our joint venture has already increased the number of stores threefold, with car purchase volumes continuing to grow by 10% month-on-month.”

This is the second time that OLX has invested in Frontier: in May 2018, Naspers had invested $89 million in the business, an investment that came just weeks after Frontier had raised $58 million from Balderton, TPG and others.

The deal underscores the longtime trend of consolidation in e-commerce businesses — something Prosus is also seeing played out in a completely different arena, that of food delivery.

The basics of the economy-of-scale principle, as applied to used car sales, goes something like this: economies of scale makes a platform more useful (there will be more cars on it, and less on competitors’ sites); but it also potentially means that Frontier would be making more transactions, thereby more revenues overall; and building and running more sales on the same platform improves the margins on the investment that gets made in building and operating that platform.

Targeting P2P used car sales in emerging markets is a big potential business: in part because of the nature of those economies, car owners are more likely to sweat out assets rather than go for buying completely new vehicles. OLX notes that combining the operations in Frontier’s footprint with those of the JV businesses that it is now taking over, plus OLX’s own business in Latin America, Asia and Poland, results in a market where some 30 million used cars are sold annually, “more than double that of China.”

Prosus makes $6.3B hostile bid for Just Eat; Just Eat rejects deal in favor of Takeaway merger

By Ingrid Lunden

As Amazon-backed Deliveroo expands into click-and-collect and procurement services to grow its footprint with restaurants in Europe, a food fight among three other takeout and delivery players continues apace in an ongoing consolidation march to compete better against the likes not just of Deliveroo but also Uber Eats and more.

Today, Prosus — the recently-listed arm of Naspers comprising its extensive online assets (including a significant stake in Tencent) — said that it would be willing to pay £4.9 billion ($6.3 billion) in cash for Just Eat, one of the big players in the food takeout and delivery market in Europe. The bid is a hostile one: Just Eat has been in the middle of working on a combination with Takeaway.com, another large competitor in the market; and today Just Eat wasted no time in asking its shareholders to reject the Prosus offer.

“The Board believes that Just Eat is a leading strategic asset in the food delivery sector and the Prosus Offer fails to appropriately reflect the quality of Just Eat and its attractive assets and prospects, the benefits of first mover advantage in a consolidating sector, and the significant future upside available to Just Eat shareholders through remaining invested in Just Eat and the Takeaway.com Combination,” it noted in a statement. “The Board of Just Eat believes that the Takeaway.com Combination is based on a compelling strategic rationale that will deliver a number of strategic benefits and greater value creation to Just Eat shareholders than the terms of the Prosus Offer. Accordingly, the Board of Just Eat continues to unanimously recommend the Takeaway.com Combination to Just Eat shareholders.”

Prosus’ offer, which works out to 710 pence per Just Eat Share, is 20% higher than Takeaway.com’s offer of 594 pence (which itself was at a premium to Just Eat’s share price).

The Takeaway offer has been months in the making and has had a number of twists and turns. The first announcement for a $10 billion merger was made in July, but in the interim Prosus made its first hostile offer, and so the deal switched to a takeover this month in hopes of securing shareholder agreement faster.

At stake for all players is the fact that the delivery business continues to be a fast-growing but very crowded field, with a number of players operating unprofitably and hoping for consolidation in order to improve their economies of scale and margins. If economies of scale and better margins is the rock, the competition is the hard place: all three have a strong and very highly capitalised set of a pair of competitors in the form of Uber Eats and Amazon-backed Deliveroo, with a number of smaller but also fast-growing startups continuing to crowd the field.

Just Eat and Takeaway.com have already done some consolidating of other operations. The latter two have gobbled up different parts of DeliveryHero’s European business in recent times. Prosus, meanwhile, has a 22% stake in the remaining DeliveryHero business (outside of Europe), alongside stakes in India’s Swiggy and iFood in Latin America. This would mean that Prosus taking over Just Eat would be less about consolidation of European holdings, which could be one reason why Just Eat is less keen on the idea.

Takeaway.com has also issued a response to the news, noting that it’s the only one of the three that has working on building profitability into the business: it’s currently profitable in the Netherlands, its home market, and is on track to getting there in Germany (a track it believes it can continue with more scale).

“Given the circumstances, I can fully understand that the current cash values of both our and the competing offer aren’t particularly appealing to the Just Eat shareholders, and seem to be quite far removed from the fair value of Just Eat. We do however believe that the agreed merger ratio between Just Eat and Takeaway.com is appropriate,” noted Jitse Groen, CEO of Takeaway.com, in a statement. “Takeaway.com now operates in two out of the world’s four major profit pools. Including the UK, the Just Eat Takeaway.com combination will therefore operate in three out of the four major profit pools globally available. This in stark contrast with most other food delivery websites, which are loss-making, and in our opinion, will likely never become profitable.”

Naspers’ Prosus has said that it is not interested in buying the merged company, should Just Eat go ahead with a combination with Takeaway.com. In any case, this is unlikely to be the final word on how food delivery and takeout will play out in Europe (or globally).

The market is still largely operating in the red globally — and even the most established players, like GrubHub, are not seeing much stability. And with about half a dozen giant players operating in different markets, and lots of capital riding on each of them, we’ll be seeing a number of deals and product expansions — for example the emergence of more “virtual” kitchens and other added services such as restaurant procurement — before it’s all gravy for this industry.

Correction: Prosus is not making a final offer. Corrected to say that it is not interested in a combination with Takeaway.com, solely Just Eat.

Voi raises another $85M for its European e-scooter service

By Steve O'Hear

Voi Technology, the “micro-mobility” startup that operates an e-scooter service in a 38 cities across 10 European countries, has raised an $85 million in Series B funding.

Backing the round is a mixture of existing and new investors. They include Balderton Capital, Creandum, Project A, JME Ventures, Raine Ventures, Kreos Capital, Inbox Capital, Rider Global, and Black Ice Capital. The new funding brings the total raised by Voi to $136 million.

Eagled-eyed readers will have noticed that, based on our previous Voi coverage, the total figure is $32 million short. That’s because not all of Voi’s previous Series A commitment was cashed in after the company was offered more favourable terms for its $30 million Series A extension and therefore elected not to draw down the second tranche of its original Series A.

Launched in 2018, the company is best-known for its e-scooter rentals but now pitches itself as a micro-mobility provider, offering a number of different transport devices. These include various e-scooter and e-bike models, in a bid to become a broader transport operator helping to re-shape urban transport and wean people off using cars.

To date, Voi says it has 4 million registered users and has powered 14 million rides. More recently it has launched new, more robust hardware that has been designed to sustain the rigours of commercial e-bike sharing. The idea is that more suitable hardware will help e-scooter companies improve margins since more rides can be extracted from the life-span of each vehicle.

On that note, Voi says it will use the new funding to develop “strong profitable businesses” in the 38 cities where it is already operating, as well as increase its R&D spend to improve its technology platform and products. Earlier this year, the company announced that it is already profitable in the cities of Stockholm and Oslo.

“Clearly, we feel we are on track to achieve this in more of our cities and that is our aim,” Voi co-founder and CEO Fredrik Hjelm tells me. “At this point, a key focus for us is to ensure we continue to increase the lifetime of our e-scooters, forge key partnerships and continue to work in those cities which provide the best conditions for a profitable e-scooter business”.

Hjelm says that Voi’s version 2 scooters are projected to last over 18 months, which means the company should be in profit before it needs to raise again. However, he wouldn’t be drawn on when that might be.

With regards to R&D and improvements to the Voi platform, the company will continue to work on the lifetime of its e-scooters, in addition to improved repair management via integrating “predictive diagnostics”.

Hjelm also says Voi is developing “AI-powered” fleet management and more generally the platform’s capability to support future product portfolio expansion. In other words, we can expect new micro-mobility device categories in the future.

Alpaca nabs $6M for stocks API so anyone can build a Robinhood

By Josh Constine

Stock trading app Robinhood is valued at $7.6 billion, but it only operates in the U.S. Freshly funded fintech startup Alpaca does the dirty work so developers worldwide can launch their own competitors to that investing unicorn. Like the Stripe of stocks, Alpaca’s API handles the banking, security and regulatory complexity, allowing other startups to quickly build brokerage apps on top for free. It has already crossed $1 billion in transactions within a year of launch.

The potential to power the backend of a new generation of fintech apps has attracted a $6 million Series A round for Alpaca led by Spark Capital . Instead of charging developers, Alpaca earns its money through payment for order flow, interest on cash deposits and margin lending, much like Robinhood.

“I want to make sure that people even outside the U.S. have access” to a way of building wealth that’s historically only “available to rich people” Alpaca co-founder and CEO Yoshi Yokokawa tells me.

Alpaca co-founder and CEO Yoshi Yokokawa

Hailing from Japan, Yokokawa followed his friends into the investment banking industry, where he worked at Lehman Brothers until its collapse. After his grandmother got sick, he moved into day-trading for three years and realized “all the broker dealer business tools were pretty bad.” But when he heard of Robinhood in 2013 and saw it actually catering to users’ needs, he thought, “I need to be involved in this new transformation” of fintech.

Yokokawa ended up first building a business selling deep learning AI to banks and trading firms in the foreign exchange market. Watching clients struggle to quickly integrate new technology revealed the lack of available developer tools. By 2017, he was pivoting the business and applying for FINRA approval. Alpaca launched in late 2018, letting developers paste in code to let their users buy and sell securities.

Now international developers and small hedge funds are building atop the Alpaca API so they don’t have to reinvent the underlying infrastructure themselves right away. Alpaca works with clearing broker NTC, and then marks up margin trading while earning interest and payment for order flow. It also offers products like AlpacaForecast, with short-term predictions of stock prices, AlpacaRadar for detecting price swings and its MarketStore financial database server.

AlpacaForecast

The $6 million from Spark Capital, Social Leverage, Portag3, Fathom Capital and Zillionize adds to $5.8 million in previous funding from investors, including Y Combinator. The startup plans to spend the cash on hiring to handle partnerships with bigger businesses, supporting its developer community and ensuring compliance.

One major question is whether fintech businesses that start to grow atop Alpaca and drive its revenues will try to declare independence and later invest in their own technology stack. There’s the additional risk of a security breach that might scare away clients.

Alpaca’s top competitor, Interactive Brokers, offers trading APIs, but other services as well that distract it from fostering a robust developer community, Yokokawa tells me. Alpaca focuses on providing great documentation, open-source contribution and SDKs in different languages that make it more developer-friendly. It will also have to watch out for other fintech services startups like DriveWealth and well-funded Galileo.

There’s a big opportunity to capitalize on the race to integrate stock trading into other finance apps to drive stickiness because it’s a consistent, voluntary behavior rather than a chore or something only done a few times a year. Lender SoFi and point-of-sale system Square both recently became broker dealers as well, and Yokokawa predicts more and more apps will push into the space.

Why would we need so many stock trading apps? “Every single person is involved with money, so the market is huge. Instead of one-player takes all, there will be different players that can all do well,” Yokokawa tells me. “Like banks and investment banks co-exist, it will never be that Bank of America takes 80% of the pie. I think differentiation will be on customer acquisition, and operations management efficiency.”

The co-founder’s biggest concern is keeping up with all the new opportunities in financial services, from cash management and cryptocurrency that Robinhood already deals in, to security token offerings and fractional investing. Yokokawa says, “I need to make sure I’m on top of everything and that we’re executing with the right timing so we don’t lose.”

The CEO hopes that Alpaca will one day power broader access to the U.S. stock market back in Japan, noting that if a modern nation still lags behind in fintech, the rest of the world surely fares even worse. “I want to connect this asset class to as many people as possible on the earth.”

Sinclair leads $10.3M investment in rideshare advertising startup Octopus

By Anthony Ha

Octopus Interactive, a startup bringing an interactive TV and ad experience into Uber and Lyft rides, has raised a $10.3 million funding round led by Sinclair Digital Group.

Backseat TVs mixing show snippets and commercials have become a common part of the taxi experience in New York City and elsewhere. Octopus is offering something of a more interactive version of this concept to rideshare drivers, who can use it to keep their passengers entertained and also earn extra money.

Octopus says it provides drivers with tablets that combine games (which can include cash prizes, and can also be sponsored), ride information (like maps and weather) and advertising in a 13-minute loop. Even if the passenger doesn’t win anything, this could help keep them occupied during a long ride, which could lead to higher driver ratings. And if the passenger isn’t interested, they can just mute the screen.

The company says it’s deploying technology to make the advertising smarter, for example with geofences to target ads or increase their frequency in a certain neighborhood, and by offering real-time analytics to advertisers. It also monitors the seat to confirm that there’s actually a passenger sitting there when an ad plays.

After launching in 2018, Octopus says it’s now reaching more than 3 million people each month across 10,000 screens in markets like New York, Los Angeles, Chicago and Washington, D.C. By working with Sinclair Digital Group — an affiliate of controversial TV giant Sinclair — the startup can bring content from local TV stations onto the platform.

“What we see here is an untapped medium with a truly captive audience that is buckled in and looking to engage,” said Sinclair Executive Chairman David Smith in a statement. “We invested in Octopus because the team has successfully created an innovative and differentiated branding opportunity that we can help scale further.”

MathCapital, an investment firm partnered with programmatic advertising company MediaMath, also participated in the funding.

FCC approves T-Mobile/Sprint merger despite serious concerns

By Devin Coldewey

The FCC has given its stamp of approval to T-Mobile and Sprint’s proposed merger, saying the deal will “enhance competition” and hasten 5G deployment. Those opposed say the merger defies common sense, creating a triumvirate of mobile giants that will “divide up the market, increase prices, and compete only for the most lucrative customers.”

The two mobile companies have been attempting to merge for years, ostensibly in order to compete with the considerably larger AT&T and Verizon. (Disclosure: TechCrunch is owned by Verizon Media, but this does not affect our coverage in the slightest.)

Previous attempts at deals were blocked more or less on the grounds that while a consolidated market might make the new T-Mobile/Sprint entity more competitive, it would be a net negative for consumers, who would have less choice than ever.

This latest foray has met with more success, and the Department of Justice approved it in July. The DoJ’s proposed remedies for competition problems created by the merge apparently gave the FCC “further confidence” in its approval, which Chairman Ajit Pai signaled earlier this year — interestingly, before those remedies were proposed.

Among other things, Sprint must sell its Boost Mobile brand, and T-Mobile must sell its interest in Dish Network. The hope is that Dish, Boost, and a few other players will somehow band together to form a new insurgent wireless network that will rise to compete with its former masters.

Sound a bit far-fetched? FCC Commissioner Rosenworcel thinks so as well.

Commissioner Rosenworcel at her confirmation hearing.

“Instead of promoting vigorous competition among providers, today’s order justifies increased concentration by jerry-rigging a new provider dependent on the government dictating who sells what to whom and when,” she said in a statement.”

Commissioner Starks indicated his dissent on other grounds as well, specifically recent charges that Sprint has been irresponsibly deploying funds from the Commission’s Lifeline program for low-income mobile subscribers.

“Sprint may be responsible for the most egregious violations of our Lifeline rules in FCC history,” Starks wrote in a statement. “Our review should have been held in abeyance following the Chairman’s recent announcement of an investigation into Sprint’s alleged misappropriation of Lifeline support for 885,000 ineligible accounts. If substantiated, this would represent the misuse of nearly 10 percent of the funds for the entire program.”

More than anything else, though, critics remain skeptical of the basic idea that consolidation will produce increased competition. In fact the Justice Department even thinks that may happen, which is why it is requiring the carriers to hastily assemble a new competitor out of whatever parts are left laying around, including some still being used by T-Mobile and others.

“The proposed transaction is exactly the type of merger that the Justice Department and the Commission have discouraged and rejected in the past: one that would harm competition and result in higher prices and poorer service, particularly for the most vulnerable consumers,” wrote Starks.

Others are concerned that the deal seemed to be a done deal even before Justice handed down its recommendations to improve competition following the merger.

“The FCC majority prejudged the merits of this merger two months before the Justice Department found the combination of T-Mobile and Sprint to be anticompetitive and required the creation of a new fourth competitor to pass legal muster. Despite this radical change in the merger, Chairman Pai has refused to put the new arrangement out for public comment,” noted Gigi Sohn, former general counsel for the FCC.

“Three of my colleagues agreed to this transaction months ago without having any legal, engineering, or economic analysis from the agency before us,” wrote Rosenworcel. “The procedural irregularities that have plagued the FCC’s review of this transaction make it difficult to ensure this agency’s findings are credible—especially when in so many key respects they are at odds with the findings of the Department of Justice.”

Proponents of the deal lean heavily on promises being made that “New T-Mobile,” as it is referred to in the decision, will use its new position to quickly and efficiently deploy 5G to many markets it might not otherwise have reached.

“This transaction will provide New T-Mobile with the scale and spectrum resources necessary to deploy a robust 5G network across the United States,” said Chairman Pai in his statement regarding the decision. “New T-Mobile will make the mobile broadband market more competitive in large swaths of rural America where neither Sprint nor T-Mobile is currently a strong competitor to AT&T and Verizon.”

Pai says that the idea that reducing the number of major carriers from four to three will be harmful to competition is a “simplistic, backward-looking claim.” The truth, he says, is that in many places this merger will increase the number of competitors from two (Verizon and AT&T) to three as T-Mobile enters the market. That’s fair speculation to be sure, but as Commissioner Starks points out, that idea too is simplistic. The truth is that reducing the number of major carriers will likely have serious and immediate negative effects as well as well as Pai’s imagined long-term benefits.

“In the short term, this merger will result in the loss of potentially thousands of jobs. In the long term, it will establish a market of three giant wireless carriers with every incentive to divide up the market, increase prices, and compete only for the most lucrative customers,” Starks writes.

While Justice and FCC approval were the largest obstacles to the proposed merger, much still has to occur before Sprint customers find their phones switching over to the T-Mobile network. More than a dozen states have opposed the merger and filed lawsuits, though those might be mooted under the new proposed scheme. Still, state-level challenges are no joke and may further delay the merger, especially if they are elevated to the federal level.

AT&T will pay $60 million over fake unlimited data ‘bait and switch scam’

By Devin Coldewey

AT&T is being punished at last for its shady claims of plans with “unlimited data” but were in reality nothing of the kind: The company has agreed to a $60 million settlement with the FTC, which has pursued the case for years. Some 3.5 affected customers can expect partial refunds — little more than pocket money, but it’s something.

The complaint was filed almost exactly five years ago, after customer complaints from previous years had piled up. AT&T, after offering truly unlimited data plans for a few years, made changes to how the plans worked but not to how they were advertising. Starting in 2011, the company began throttling customers with “unlimited data” who hit data caps to a fraction of the speed they normally got. We’re talking kilobits here.

Naturally that’s not quite in line with the “unlimited” claims, and some people took AT&T and others to court early on over it. But the FTC’s 2014 complaint indicated that the feds were taking this seriously.

Since the complaint was so obviously true, AT&T attempted to thwart it via process, claiming that the net neutrality rules adopted in 2015 moved the authority to regulate mobile carriers from the FTC to the FCC, retroactively mooting the case. They pursued this ridiculous argument until last year, when a federal court slapped it down and the FTC’s process was allowed to continue unimpeded. And here we are 18 months later with a $60 million settlement.

“AT&T’s bait-and-switch scam is a good window into the many harms that result from dominant companies operating without the discipline of meaningful competition,” said FTC Chairman Rohit Chopra in a spicy statement accompanying the announcement. “Their market power, financial resources, and one-sided information gives them license to ignore their own contractual obligations while aggressively enforcing every little clause in the fine print. Consumers can accept the bad deal, walk away, or fight it, but each choice carries a cost, with dominant firms prevailing almost every time.”

$60 million is a drop in the bucket for a company the size of AT&T, but the FTC action and other pressure also put executives on warning for prioritizing profits over customers with scams like this one.

“The company could have upheld its obligations to its customers by making the right infrastructure investments,” Chopra continued. “It certainly had the money to do so. In 2012, as the company boasted to investors that customers were fleeing its unlimited plan for tiered plans, it spent more on share buybacks than it invested in its wireless network. The bottom line is that AT&T fleeced its customers to enrich its executives and its investors.”

Unfortunately those customers will remain fleeced, as there are some 3.5 million of them and only $60 million to distribute. This will be divided between current and former AT&T customers as follows according to the proposed settlement:

  • $7.5 million to be split by current AT&T customers who experienced throttling to 128 kbps
  • $29.7 million to be split by current AT&T customers who experienced throttling to 256 or 512 kbps
  • $6.3 million to be split by former AT&T customers who experienced throttling to 128kbps
  • $16.5 million to be split by former AT&T customers who experienced throttling to 256 or 512 kbps

All this will be done “pro rata,” so if you were an early adopter who got throttled every month of your year-long contract to 128 kbps, you’ll get a bigger share than someone who only went over once and got throttled to 512 kbps.

There’s no need to fill anything out or submit a claim; If you’re currently an AT&T customer, you’ll get a bill credit, and if you’re a former customer you should get a check in the mail.

Naturally AT&T is barred from pulling anything like this again: The company can’t claim something is “unlimited” without prominent disclosure of the actual limitations on the service.

How Arweave’s Permaweb cheaply hosts sites & apps forever

By Josh Constine

What if you could pay now to store something online permanently? You could preserve a website against censorship, save legal contracts, or offer an app even after your company fails. That’s the promise of Arweave‘s Permaweb.

The startup has built a new type of blockchain that relies on Moore’s Law-style declining data storage costs. Users pay for a few hundred years upfront (about half a cent per megabyte), and the interest accrued by the excess payment will perpetually cover the costs of shrinking storage prices.

The Permaweb quietly launched last June. Over 100 permanent apps have been built on Arweave’s infrastructure including an email client in the last six months, while 50,000 objects were stored on the Permaweb in October alone. As long as some node operators keep hosting the data on unused hard drive space, they keep getting paid, and the sites, apps, or files remain available. Instead of needing some special blockchain browser to access what’s stored, the Permaweb can be accessed through traditional web browsers and URLs.

Arweave founder Sam Williams

The potential of the Permaweb has attracted $5 million in funding led by Andreessen Horowitz’s a16z Crypto, and joined by other top blockchain investors Union Square Ventures and Multicoin Capital who’ve exchanged the cash for tokens from Arweave. Those tokens, and the rest Arweave is sitting on, could become increasingly valuable if the Permaweb becomes popular.

“Arweave’s mission is to become the new Library of Alexandria” Arweave founder Sam Williams writes, “but invulnerable to the pitfalls of centralised points of failure, ensuring that humanity’s shared knowledge and history is available to all future generations.”

Filling Orwell’s Memory Hole

The idea spawned from a slew of PhDs dropouts trying to address the fake news problem. They figured if sites or articles could be stored permanently in their original form, they couldn’t be changed or eradicated by a future despot.

The team discovered blockchains could handle this at small scale. But to decentralize large amounts of data, they developed a special kind of blockchain where miners are rewarded for storing a random old block from the chain, not just the most recent one. That meant the more of the total blocks they stored, the more they’d stand to earn.

After going through TechStars Berlin and recruiting some of their accelerator-mates, Arweave launched the Permaweb mid last year. Those who want to store something download a free Chrome, Firefox, or Brave browser extension, fund their wallet, and make a one-time payment. For example, here’s a permanently hosted forum that won’t disappear like many online communities have over the years.

While pricier than alternatives like AWS in the short-term, the Permaweb could theoretically keep files alive forever. Williams says that data storage costs have declined around 30% per year for a while, but the decentralized network would still be able to cover costs as long as that rate doesn’t fall lower than 0.5%. “If we dropped below 0.5% storage cost decline, then really, really bad things will have happened to humans.” And even then, today’s payments would cover 200 years of storage.

Another benefit is that users of applications can choose to use the original version of a Perma app instead of an updated one. That way if a developer polluted later versions with ads or privacy invasions, users could rely on the old one.

An important concern is that the Permaweb could be used to enable piracy. But Williams tells me the majority of node operators have to vote to approve hosting a file, so they could refuse copyrighted music or revenge porn. And anyways, torrenting is a free and so likely more appealing to pirates. We’ll see if other players try to crash into the market with a similar concept and trigger a perma pricing war. But Williams claims Bitcoin, Ethereum, and EOS can’t do this type of storage while Archive.org, The Wayback Machine, and Perma.cc are focused on academic uses for shallow web preservation.

Arweave likens itself to an Uber for storage, matching users needing to save files with those with excess storage capacity. But it acts as if there’s no middleman like Uber taking a cut. Instead the startup will sell tokens as necessary to stay funded until the network is sufficiently decentralized and runs itself.

“A lot of crypto projects are long on white papers but short on code. Arweave was the opposite” says Union Square Ventures partner Albert Wenger. His fund tried out the Permaweb by storing the National Oceanic and Atmospheric Administration’s ongoing measurements of carbon dioxide — something climate change deniers might want to suppress.

The goal was always to stop misinformation. Williams concludes “We think that we’re closing what Orwell called the memory hole so people can’t change what was said, so everyone can see it that way in the future without the possibility of redaction or censorship.”

Seismic acquires Percolate to expand its marketing tools

By Anthony Ha

Seismic is announcing that it’s acquiring Percolate in a deal that it says is combining “two essential pillars of the marketing technology stack.”

It sounds like the two companies aren’t direct competitors, but they offer related tools: Seismic helps companies create and manage the content they use in sales and marketing, while Percolate expanded from a social media publishing tool to a broader suite of software for managing the marketing process.

As part of the acquisition, Percolate CEO Randy Wootton is joining the Seismic team, where he will continue to lead Percolate, and where he will report to Seismic CEO Doug Winter. The combined company will have a headcount of more than 800 people.

“Both of our companies endeavor to foster better alignment between marketing and sales and improve the buyer/seller interaction, resulting in accelerated deals and pipeline for our customers,” Wootton said in a statement. “Combining with Seismic allows Percolate to provide even more capability to our customer base and more value to the marketing ecosystem.”

The financial terms of the acquisition were not disclosed. Percolate raised a total of $106.5 million from investors including GGV Capital, Sequoia Capital, Lightspeed, Slow Ventures, Lerer Hippeau and First Round Capital, according to Crunchbase.

Seismic, meanwhile, raised a $100 million investment at a $1 billion valuation last year.

Workday to acquire online procurement platform Scout RFP for $540M

By Ron Miller

Workday announced this afternoon that it has entered into an agreement to acquire online procurement platform Scout RFP for $540 million. The company raised over $60 million on a post valuation of $184.5 million, according to Pitchbook data.

The acquisition builds on top of Workday’s existing procurement solutions, Workday Procurement and Workday Inventory, but Workday chief product product officer Petros Dermetzis wrote in a blog post announcing the deal that Scout gives the company a more complete solution for customers.

“With increased importance around the supplier as a strategic asset, the acquisition of Scout RFP will help accelerate Workday’s ability to deliver a comprehensive source-to-pay solution with a best-in-class strategic sourcing offering, elevating the office of procurement in strategic importance and transforming the procurement function,” he wrote.

It’s not a coincidence that Workday chose this particular online procurement startup. In fact, Workday Ventures has been an investor in the company since 2018, and it’s also an official Workday partner, making it a known quantity for the organization.

As the Scout RFP founders stated in a blog post about today’s announcement, the two companies have worked well together and a deal made sense. “Working closely with the Workday team, we realized how similar our companies’ beliefs and values are. Both companies put user experience at the center of product focus and are committed to customer satisfaction, employee engagement and overall business impact. It was not surprising how easy it was to work together and how quickly we saw success partnering on go-to-market activities. From a culture standpoint, it just worked,” they wrote. A deal eventually came together as a result.

Scout RFP is a fairly substantial business with 240 customers in 155 countries. There are 300,000 users on the platform, according to data supplied by the company. The company’s 160 employees will be moving to Workday when the deal closes, which is expected by the end of January, pending standard regulatory review.

CTO.ai’s developer shortcuts eliminate coding busywork

By Josh Constine

There’s too much hype about mythical “10X developers”. Everyone’s desperate to hire these ‘ninja rockstars’. In reality, it’s smarter to find ways of deleting annoying chores for the coders you already have. That’s where CTO.ai comes in.

Emerging from stealth today, CTO.ai lets developers build and borrow DevOps shortcuts. These automate long series of steps they usually have to do manually thanks to integrations with GitHub, AWS, Slack, and more. CTO.ai claims it can turn a days-long process like setting up a Kubernetes cluster into a 15-minute task even sales people can handle. The startup offers both a platform for engineering and sharing shortcuts, and a service where it can custom build shortcuts for big customers.

What’s remarkable about CTO.ai is that amidst a frothy funding environment, the 60-person team quietly bootstrapped its way to profitability over the past two years. Why take funding when revenue was up 400% in 18 months? But after a chance meeting aboard a plane connected its high school dropout founder Kyle Campbell with Slack CEO Stewart Butterfield, CTO.ai just raised a $7.5 million seed round led by Slack Fund and Tiger Global.

“Building tools that streamline software development is really expensive for companies, especially when they need their developers focused on building features and shipping to customers” Campbell tells me. The same way startups don’t build their own cloud infrastructure and just use AWS, or don’t build their own telecom APIs and just use Twilio, he wants CTO.ai to be the ‘easy button’ for developer tools.

Teaching snakes to eat elephants

“I’ve been a software engineer since the age of 8” Campbell recalls. In skate-punk attire with a snapback hat, the young man meeting me in a San Francisco mission district cafe almost looked too chill to be a prolific coder. But that’s kind of the point. His startup makes being a developer more accessible.

After spending his 20s in software engineering groups in the Bay, Campbell started his own company Retsly that bridged developers to real estate listings. In 2014, it was acquired by property tech giant Zillow where he worked for a few years.

That’s when he discovered the difficulty of building dev tools inside companies with other priorities. “It’s the equivalent of a snake swallowing an elephant” he jokes. Yet given these tools determine how much time expensive engineers waste on tasks below their skill level, their absence can drag down big enterprises or keep startups from rising.

CTO.ai shrinks the elephant. For example, the busywork of creating a Kubernetes cluster such as having to the create EC2 instances, provision on those instances, and then provision a master node gets slimmed down to just running a shortcut. Campbell writes that “tedious tasks like running reports can be reduced from 1,000 steps down to 10” through standardization of workflows that turn confusing code essays into simple fill-in-the-blank and multiple-choice questions.

The CTO.ai platform offers a wide range of pre-made shortcuts that clients can piggyback on, or they can make and publish their own through a flexible JavaScript environment for the rest of their team or the whole community to use. Companies that need extra help can pay for its DevOps-As-A-Service and reliability offerings to get shortcuts made to solve their biggest problems while keeping everything running smoothly.

5(2X) = 10X

Campbell envisions a new way to create a 10X engineer that doesn’t depend on widely mocked advice on how to spot and capture them like trophy animals. Instead, he believes 1 developer can make 5 others 2X more efficient by building them shortcuts. And it doesn’t require indulging bad workplace or collaboration habits.

With the new funding that also comes from Yaletown Partners, Pallasite Ventures, Panache Ventures and Jonathan Bixby, CTO.ai wants to build deeper integrations with Slack so developers can run more commands right from the messaging app. The less coding required for use, the broader the set of employees that can use the startup’s tools. CTO.ai may also build a self-service tier to augment its seats plus complexity model for enterprise pricing.

Now it’s time to ramp up community outreach to drive adoption. CTO.ai recently released a podcast which saw 15,000 downloads in its first 3 weeks, and it’s planning some conference appearances. It also sees virality through its shortcut author pages, which like GitHub profiles let developers show off their contributions and find their next gig.

One risk is that GitHub or another core developer infrastructure provider could try to barge directly into CTO.ai’s business. Google already has Cloud Composer while GitHub launched Actions last year. Campbell says its defense comes through neutrally integrating with everyone, thereby turning potential competitors into partners.

The funding firepower could help CTO.ai build a lead. With every company embracing software, employers battling to keep developers happy, and teams looking to get more of their staff working with code, the startup sits at the intersection of some lucrative trends of technological empowerment.

“I have 3-year-old at home and I think about what it will be like when he comes into creating things online” Campbell concludes. “We want to create an amazing future for software developers, introducing automation so they can focus on what makes them such an important aspect. Devs are defining society!”

[Image Credit: Disney/Pixar via WallHere Goodfon]

Sumo Logic acquires JASK to fill security operations gap

By Ron Miller

Sumo Logic, a mature security event management startup with a valuation over $1 billion, announced today that it has acquired JASK, a security operations startup that raised almost $40 million. The companies did not share the terms of the deal.

Sumo’s CEO Ramin Sayer, says that the combined companies give customers a complete security solution. Sumo offers what’s known in industry parlance as a security information and event management (SIEM) tool, while JASK provides a security operations center or SOC (pronounced “sock“). Both are focused on securing workloads in a cloud native environment and can work in tandem.

Sayer says that as companies shift workloads to the cloud they need to reevaluate their security tools. “The interesting thing about the market today is that the traditional enterprises are much more aggressively taking a security-first posture as they start to plan for new workloads in the cloud, let alone workloads that they are migrating. Part of that requires them to evaluate their tools, teams, and more importantly a lot of their processes that they’ve built in and around their legacy systems as well as their SOC,” he said.

He says that combining the two organizations helps customers moving to the cloud automate a lot of their security requirements, something that’s increasingly important due to the lack of highly skilled security personnel. That means the more that software can do, the better.

“We see a lot of dysfunction in the marketplace and the whole movement towards automation really compliments and supplements the gap that we have in the workforce, particularly in terms of security folks. This what JASK has been trying to do for four plus years, and it’s what Sumo has been trying to do for nearly 10 years in terms of using various algorithms and machine learning techniques to suppress a lot of false alerts, triage the process and help drive efficiency and more automation,” he said.

JASK CEO and co-founder Greg Martin says the shift to the cloud has also precipitated two major changes in the security space that have driven this growing need for security automation. “The perimeter is disappearing and that fundamentally changes how we have to perform cyber security. The second is that the footprint of threats and data are so large now that security operations is no longer a human scalable problem” he said. Echoing Sayer, he says that requires a much higher level of automation.

JASK was founded in 2015, raising $39 million, according to Crunchbase data. Investors included Battery Ventures, Dell Technologies Capital, TenEleven Ventures and Kleiner Perkins. Its last round was a $25 million Series B led by Kleiner in June 2018.

Deepak Jeevankumar, managing director at Dell Technologies Capital, whose company was part of JASK’s Series A investment and who invests frequently in security startups, sees  the two companies joining forces as a strong combination.

Sumo Logic and JASK have the same mission to disrupt today’s security industry which suffers from legacy security tools, siloed teams and alert fatigue. Both companies are pioneers in cloud-native security and share the same maniacal customer focus. Sumo Logic is therefore a great culture and product fit for JASK to continue its journey,” Jeevankumer told TechCrunch.

Sumo has raised $345 million, according to the company. It was valued at over $1 billion in its most recent funding round last May when it raised $110 million.

CRN first reported that this deal was in the works in an article on October 22nd.

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