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Molekule hopes to clear the air with $58 million in Series C funding and Berkeley Lab’s seal of approval

By Sarah Buhr

Silicon Valley air purifier startup Molekule was born out of an idea Florida University Dr. Yogi Goswami had back in the 90’s using photo-voltaic technology to kill air pollutants. His son, a young boy at the time, suffered from severe allergies and Dr. Goswami wanted to build something those like him could use in their home to clear the air. But the sleekly designed Molekule took a bit of a blow last fall when Wirecutter called it “the worst air purifier we’ve ever tested.”

Molekule has since told TechCrunch comparing its PECO technology to the more common HEPA air filter technology is like comparing apples to oranges. “Up until now, everything has been air filtration, not real air purification,” co-founder and CEO of the company Jaya Rao told TechCrunch.

To disprove the naysayers, Molekule sent off its tech for testing at the Berkeley Lab, which concluded no measurable amount of VOC’s or ozone were emitted, Molekule effectively removed harmful chemicals in the air like toluene, limonene, formaldehyde as well as ozone and that “no secondary byproducts were observed when the air cleaner was operated in the presence of a challenge VOC mixture.”

Compare that to Wirecutter’s own assessment that, “on its auto setting, which is its medium setting, the Molekule reduced 0.3-micron particulates by (in the best case) only 26.4 percent over the course of half an hour. Compare that with the 87.6 percent reduction the Coway Mighty achieved on its medium setting.” TechCrunch reached out to Wirecutter and was told it still stands by its findings and does not recommend consumers purchase a Molekule.

It should be noted Consumer Reports also tested the Molekule device and it, too, did not recommend a purchase as the unit was not “proficient at catching larger airborne particles.” However, Molekule demonstrated to other news outlets at its own facilities that the photochemical reaction in its units did break down contaminants and kill mold spores.

“To test PECO technology you actually need really sophisticated equipment,” Rao said. “Boiling it down to really simple factors is not enough because air is made up of many tiny but toxic things. These are air-born chemicals nanometers in size, which Wirecutter admittedly did not test at all for.”

Wirecutter’s Tim Heffernan disputes Molekule’s claims of superiority in the category, however. “Now they are comparing apples to oranges,” he told TechCrunch. “The claims about destroying bacteria and viruses, for example, HEPA filters capture them and they capture them permanently.”

So how’s a consumer to know what’s right? First, take into account Molekule commissioned the Berkeley Lab for their independent testing and that Wirecutter and Consumer reports ran their own independent testing. However, it might boil down to understanding the premise of the technology. HEPA filters came out of the Manhattan Project in the 40’s, when scientists needed to develop a filter suitable for removing radioactive materials from the air. It works by capturing and filtering out harmful particles, viruses and mold. However, PECO, the technology in a Molekule unit, uses the science of light to kill mold and bacteria and break down harmful particulates in the air.

Regardless of whether you want an air purifier that captures particulates or breaks them down,  Molekule has continued to move forward. The company has since launched a mini unit meant for smaller rooms and started to grow business verticals outside of the direct-to-consumer model, forging partnerships with hotels and hospitals.

It has also raised just announced a raise of $58 million in Series C funding, bringing just over $91 million to its coffers. Rao tells TechCrunch the raise was unexpected but came out of chats with Samantha Wang from RPS Ventures, which led the round.

“We feel confident in Molekule’s PECO technology, and have taken an extensive look at the science behind it. It is not only backed by decades of academic research, it has also gone through the peer-reviewed process numerous times, and has been tested and validated by third-party scientists and laboratories across the country,” Wang told TechCrunch.

Molekule also tells TechCrunch it has seen a healthy growth trajectory in the past year, despite the negative press. According to the company, Molekule has seen a 3x increase in our year over year filter subscription revenue since launch and its repeat customer growth sits at about 200%.

It’s a well-designed, though pricier air purification machine with an interesting future in the commercial space, particularly in hospitals, schools, commercial manufacturing, and hotels, as Wang points out. As long as the tech truly works.

Other participation in the round included Founder’s Circle Capital and Inventec Appliances Corp (IAC). Existing investors Foundry Group, Crosslink Capital, Uncork Capital, and TransLink Capital also participated in the financing.

Africa e-tailer Jumia reports first full-year results post NYSE IPO

By Jake Bright

Pan-African e-commerce company Jumia got into the black (by a small amount) on its gross profit vs. fulfillment expenses, expanded financial services and still posted losses.

The online sales company, with an operations center in China, also anticipates some negative impact on 2020 growth from the coronavirus outbreak, CEO Sacha Poigonnec said.

Those were highlights today for Jumia’s fourth-quarter and full-year results — 10 months after the company become the first vc-backed startup in Africa to go public on a major exchange.

The results

Jumia — with online goods and service verticals in 11 countries — posted 2019 revenue growth of 24% (€160 million) over 2018. The company increased its annual active customer base in the fourth-quarter by 54% (to 6.1 million) from 4.0 million for the same period last year.  

Jumia’s 2019 Gross Merchandise Value (GMV) — the total amount of goods sold over the period — contracted by 3% to €301 million in the fourth-quarter.

Poignonnec attributed the decline to “business mix re-balancing”, which entailed reducing expenditures on promotions. The company also saw a contraction in sales of phones and electronics, which impacted GMV.

The online retailer had a 49% increase in orders from 5.5 million in Q4 2018 to 8.3 million in Q4 2019.

Perhaps the brightest spot in Jumia’s 2019 performance was the company’s ability to reach a gross profit of €1.0 million after fulfillment expenses in Q4.

That obviously doesn’t get them to profitability over all the company’s other expenses, but fulfillment costs have been historically high for Jumia as an online-retailer in Africa.    

The overall pattern of growing revenues and customers YoY has been consistent for Jumia.

But so too have the company’s losses, which widened 34% in 2019 to €227.9 million, compared to €169.7 million. Negative EBITDA for Q4 increased 5% to €51.2 million from €48.6 over the same period in 2018.

CEO Sacha Poignonnec pointed to Jumia’s ability in Q4 to reach positive gross-profit over fulfillment expenses — one of the company’s largest costs — as a sign it could eventually get into the black overall. 

 “As we reach these milestones we’ll bring new milestones. This year we were profitable after fulfillment expenses and one day we’ll be profitable after marketing [expenses] and so on and so forth,” he said. 

What’s new

Jumia exited several countries in 2019 — suspending e-commerce operations in Tanzania, Cameroon, and Rwanda. “We believe those countries have…potential in the long-term but decided to allocate our resources to the countries that best support our long-term growth and path to profitability,” said Poignonnec. 

Jumia also saw lift in its JumiaPay digital finance product — and notably — is developing new financial services (including for SMEs) aided by its big financial investors, Mastercard and Axa. 

Jumia launched an Axa money market fund product in Nigeria in 2019 and some promotional programs on Mastercard’s network, as noted in page 10 of its investor presentation.

Total payment volume on JumiaPay increased 57% year-over-year to €45.6 million in 2019 and JumiaPay was used for 29% of Jumia e-commerce orders. 

This is significant, as the company has committed to generate more revenues from higher margin digital payment products and offer JumiaPay as a standalone service across Africa.

Since its founding in 2012, Jumia has been forced to adapt to slower digital payments integration in its core market Nigeria and allow cash-on-delivery payments, which are costly and more problematic than digital processing.

Poignonnec also acknowledged the company’s 2020 revenues could be negatively impacted by the coronavirus. “The recent…outbreak in China is likely to affect growth over the coming quarters, and here we are starting to face some challenges to fulfill our cross-border sales,” he said.

Share price

Surprisingly absent from Jumia’s earnings call (and the subsequent Q&A) was discussion of the company’s share price, which spiked then plummeted after its April 2019 NYSE listing. 

The online retailer gained investor confidence out of the gate, more than doubling its $14.50 opening share price post IPO.

That lasted until May, when Jumia’s stock came under attack from short-seller Andrew Left, whose firm Citron Research issued a report accusing the company of fraud — which sent the company’s share price plummeting — from $49 to $26

Then on its second-quarter earnings call in August, Jumia offered greater detail on the fraud perpetrated by some employees and agents of its JForce sales program. 

The company declared the matter closed, but Jumia’s stock price plummeted more after the August earnings call (and sales-fraud disclosure), and has lingered in single-digit value for several months.

That’s 50% below the company’s IPO opening in April and 80% below its high.

For the remainder of 2020, bringing back growth in GMV and more positive metrics, such as attining gross profit after fulfillment expenses, could revive investor confidence in Jumia and its share price.

It could also put the company in a better position to match competition — such as the Marketplace Africa e-commerce platform of MallforAfrica and DHL — and the possible entry in Africa of China’s Alibaba. 

Daily Crunch: Amazon opens its first cashier-less grocery store

By Anthony Ha

Amazon expands its Just Walk Out technology beyond convenience stores, Intuit acquires Credit Karma in its biggest acquisition ever and Grab raises hundreds of millions of dollars. Here’s your Daily Crunch for February 25, 2020.

1. Amazon opens its first cashierless grocery store

Amazon is opening its first grocery store to pilot the use of the retailer’s cashier-less “Just Walk Out” technology, which previously powered 25 Amazon Go convenience stores in a handful of major U.S. metros. The store is 10,400 square feet overall, making it the largest use of Amazon’s Just Walk Out technology to date.

Based in the company’s hometown of Seattle, the new Amazon Go Grocery store allows customers to shop for everyday grocery items like fresh produce, meat, seafood, bakery items, household essentials, dairy, easy-to-make dinner options, beer, wine and spirits and more.

2. Intuit confirms that it is buying Credit Karma for $7.1B in cash and stock

Intuit announced that it plans to acquire Credit Karma — the fintech startup with more than 100 million registered users, 37 million of them active monthly users, which lets people check their credit scores, shop for credit cards and loans, file taxes and more. The financial software giant says it will pay $7.1 billion for the acquisition, making this Intuit’s biggest-ever acquisition to date, and one of the biggest in the category of privately held fintech companies.

3. Grab raises up to $856M to boost payments business as rumors swirl of a merger with rival Gojek

Southeast Asian on-demand transport startup Gojek denies that it is involved in talks to merge with Grab, but today Grab announced a piece of news that could either divert attention from that story — or more likely stoke the fires of speculation that it is indeed gearing up for a deal.

4. New Netflix feature reveals the top 10 most popular programs on its service

The new top 10 list doesn’t offer any hard metrics, but it can at least help point to popular programming and highlight breakout successes Netflix might have in the future. The feature is rolling out now to users worldwide, so you may not see your list quite yet.

5. Instead of IPOs and acquisitions, exiting to community is one alternative

Greg Brodsky, who helps cooperative startups through the Start.coop accelerator, pointed to the “exit to community” idea as an option for startups looking to transition out of the more traditional Silicon Valley model. In this framework, some portion of the company is sold back to the workers or end users. (Extra Crunch membership required.)

6. Revolut raises $500M at a $5.5B valuation

Revolut is building a financial service to replace traditional bank accounts. You can open an account from an app in just a few minutes. You can then receive, send and spend money from the app or use a debit card.

7. Firefox to enable DNS-over-HTTPS by default to US users

Mozilla will bring its new DNS-over-HTTPS security feature to all Firefox users in the U.S. by default in the coming weeks, the browser maker has confirmed. It follows a year-long effort to test the new security feature, which is designed to make browsing the web more secure and private.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

Disney blocks John Oliver’s new episode critical of India’s PM Modi

By Manish Singh

Hotstar, India’s largest on-demand video streaming service with over 300 million users, has blocked the newest episode of HBO’s “Last Week Tonight With John Oliver” that was critical of Prime Minister Narendra Modi in a move that has angered many of its customers ahead of Disney+’s launch in one of the world’s largest entertainment markets next month.

In the episode, aired hours before the U.S. President Donald Trump’s visit to India, Oliver talked about some of the questionable policies enforced by the ruling government in India and recent protests against “controversial figure” Modi’s citizenship measures.

The episode is available to stream in India through HBO’s official channel on YouTube where it has garnered over 4 million views. Hotstar is the exclusive syndicating partner of HBO, Showtime, and ABC in India.

Spokespeople of Star India, which operates Hotstar, and Disney, which owns the major Indian broadcasting network, did not respond to multiple requests for comment.

A spokesperson of the Information and Broadcasting Ministry, the governing agency which regulates information, broadcasts, movies, and the press in India, said the government was not involved in any censorship discussions.

Numerous people in India began speculating on Monday whether Hotstar, which like Netflix and Amazon Prime Vide self-censors some content, would stream the new episode at 6am on Tuesday, when it typically makes new episodes of Oliver’s show available on the platform.

It became very apparent on Tuesday that the Disney-owned platform, which has a knack of censoring numerous sensitive subjects including sketches that make fun of its sponsors, was not going to risk upsetting the ruling party.

Last year, Amazon also removed an episode of the CBS show “Madam Secretary”, in which references to Hindu nationalism and extremists were made from its streaming service in India. Netflix also pulled an episode in Saudi Arabia of Hasan Minhaj’s “Patriot Act” that criticized the kingdom’s crown prince.

Announcing the TC Pitch Night: Robotics + AI startups

By Neesha A. Tambe

The night before the Robotics + AI event at UC Berkeley, TechCrunch is hosting a private Pitch Night, featuring innovative startups in robotics and artificial intelligence. After reviewing hundreds of applications, TechCrunch selected the early-stage startups below to pitch in front of industry executives, TC writers and our expert panel of judges: Brian Heater (TC’s own Hardware Editor), Aaron Jacobson (NEA), Jennifer Roberts (Grit Ventures) and Rob Coneybeer (Shasta Ventures).

Founders will pitch in front of the crowd followed by a tough Q&A from the judges. After all companies have pitched, the judges will select the top five teams to demo onstage at the main event on March 3: TC Sessions: Robotics + AI.

Check out the featured companies here:

AirWorks
Augean Robotics
BlinkAI Technologies
KEWAZO GmbH
Olis Robotics
RoboTire
SLAMcore
Tombot
Valyant AI

To see the startups pitching at the main event, book your $345 General Admission ticket today and save $50 before prices go up at the door. But no one likes going to events alone. Why not bring the whole team? Groups of four or more save 15% on tickets when you book here.

For investors, late-stage fintech startups are a lucrative bet

By Alex Wilhelm

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

Over the past three months, a number of financial events have occurred in the fintech and finservices world that have caught our eye. Between two rounds at $500 million and two exits in the billions of dollars, financial technology and services startups have been on fire.

Today I’d like to rewind and go over the four largest events from the past three months in fintech and finservices (total value: $13.4 billion) and pull in data on other rounds that have happened recently. This will help us get a handle on what’s going on in the two heated startup sectors.

Recall that our last look into fintech’s venture activity wrapped up its Q4 2019 results. Today, thanks to the punishing news cycle that the sector has kept up over the last few weeks, we’re going a bit further. Into the breach!

Four events

We have two rounds ($500 million rounds for Revolut and Chime) and two sales (exits for Plaid and Credit Karma) to wrap up today. Here’s what each of those deals might tell us about the current market for money-focused startups and investment, starting with our two rounds and followed by our two exits:

  • Chime raises $500 million, boosting its valuation from $1.5 billion (March 2019) to $5.8 billion (December 2019). Chime’s round demonstrated that the neobanking boom, at least in terms venture interest, is far from over. The America-focused financial services company grew its accounts figure to 6.5 million, giving it a valuation of a little under $1,000 per account; how much revenue and margin it can extract from its existing accounts is almost a red herring given its current pace of growth. But even with the growth caveat, investors have bet big that its long-term revenues will help support a valuation of over $10 billion in time. (The company’s most recent investors expect material return on their funds.) This implies confidence in the long-term economics of neobanking and general bullishness on the company’s category — so the existing 6.5 million accounts better churn out good chunks of top line.

Amazon opens its first cashierless grocery store

By Sarah Perez

Amazon today is opening its first grocery store to pilot the use of the retailer’s cashierless “Just Walk Out” technology that has previously powered 25 Amazon Go convenience stores in a handful of major U.S. metros. Based in Amazon’s hometown of Seattle, the new Amazon Go Grocery store allows customers to shop for everyday grocery items like fresh produce, meat, seafood, bakery items, household essentials, dairy, easy-to-make dinner options, beer, wine and spirits and more.

The store is 7,700 square feet in the front of the house and 10,400 square feet overall, making it the largest use of Amazon’s Just Walk Out technology to date.

As with Amazon Go convenience stores, shoppers first use the Amazon Go app to scan in as they enter the store, then shop as usual. Cameras and sensors track the items removed from the shelves which are then added to the shopper’s virtual cart. When the customer exits the store, their cart is checked out automatically using their payment card on file.

The end result is a grocery store with no lines or waiting. Meanwhile, store staff are freed up to take care of other aspects of the business — like restocking shelves and customer service.

This model has been working for Amazon’s convenience stores, where customers come in to grab items quickly. But grocery shopping presents a new challenge for Amazon’s cashierless technology. Grocery shoppers tend to examine items more closely — often picking up fresh produce, giving it a squeeze, then putting it back. They may push the produce around on the shelf to find one they like. Or they comparison shop, by picking up two products to compare labels, then put one in the cart and another back on the shelf — sometimes in an incorrect spot. They even discard items on different isles instead of walking back to return it to the proper area when they change their minds.

In traditional grocery stores, this wouldn’t be an issue — if another shopper later grabbed the misplaced item, it could still be rung up properly. Amazon’s technology may struggle to determine what that item was, however.

The Seattle store is located at AVA Capital Hill (610 E. Pike Street). Its hours of operation are 7 AM – 11 PM Sunday through Thursday, and 7 AM – midnight on Friday, Saturday and Sunday.

In addition to the typical grocery items, the store promises also a mix that includes organic brands, special finds, and are favorites. Local vendors in the debut assortment include La Parisienne, Donut Factory, Tony’s Coffee, Seattle Bagel Bakery, Lopez Island Creamery, Ellenos Yogurt, Uli’s Famous Sausage, Beecher’s, Eat Local, Sri Bella, Carso’s Pasta Company, and Theo’s Chocolate.

Reports that Amazon was looking to launch its own grocery store business, separate from Whole Foods, began to circulate last year. But it was unconfirmed at the time whether or not Amazon’s grocery plans included the use of its cashierless, A.I.-driven technology, or if the new stores would be more conventional grocery stores designed also to serve as hubs for Amazon’s grocery-delivery business.

It seems Amazon is interested in testing out how well its cashierless technology can scale, but it’s not yet clear how many cashierless stores it wants to open in the months and years ahead.

Blockchain security startup CoolBitX raises $16.75M Series B

By Catherine Shu

CoolBitX, a blockchain security startup based in Taiwan, announced today it has raised $16.75 million in Series B funding, led by returning investor SBI Holdings, a Japanese financial group.

Korean cryptocurrency exchange Bitsonic, Monex Group, another Japanese financial group, and Taiwan’s National Development Fund also participated.

Founded in 2014, CoolBitX makes two products. One is CoolWallet S, a Bluetooth-enabled hardware wallet for cryptocurrency. The other is called called Sygna, a solution created to help virtual asset service providers (VASPs) become compliant with a new rule passed last year by the Financial Action Task Force (FATF).

Referred to as the “travel rule,” it is meant to prevent money laundering and the financing of terrorist acts by requiring virtual asset service providers to collect personally identifiable information (PII) from customers during transactions. All virtual asset service providers in FATF member countries need to comply by June.

With its new funding, CoolBitX plans to expand Sygna’s presence beyond the Asia-Pacific region. The startup says that 12 cryptocurrency exchanges have already signed memorandums of understanding with it and are currently using or testing Sygna, including SBI VC Trade, Coincheck, Bitbank, DMM Bitcoin, BITpoint, MaiCoin, BitoPro and Ace.

CoolBitX founder and CEO Michael Ou told TechCrunch in an email that Sygna’s deployment helps differentiates it from competitors like Shyft and Ciphertrace, which also offer travel rule compliance solutions, because it has been tested and proven by users.

“In addition, Sygna ensures that VASPs can quickly comply with new regulations with minimal disruptions to their day-to-day operations,” he added. “By focusing on seamless user experience, maximum security during the transmission of data, Sygna aims t facilitate the mainstream adoption of the crypto currency.”

In a press statement, SBI Holdings president and CEO Yoshitaka Kitao said, “As one of the early investors in CoolBitX, SBI Holdings is happy to see the breakthroughs made by the CoolBitX team to drive cryptocurrency adoption forward. As such, we are delighted to participate in our second tranche of investment in CoolBitX. The borderless nature of digital assets requires a solution that isn’t bound by geographical boundaries and we are proud to partner with CoolBitX on their journey to bring a secure and easy-to-implement system to the world.”

Grab raises up to $856M to boost payments business as rumors swirl of a merger with rival Gojek

By Catherine Shu

Southeast Asian on-demand transport startup Gojek denies that it is involved in talks to merge with Grab but today Grab announced a piece of news that — at the very least — will divert attention from that story, or more likely stoke the fires of speculation that it is indeed gearing up for a deal: Grab said that it has raised $856 million more in funding, in two tranches from strategic Japanese investors, specifically to help grow the other arm of its business, in payments and financial services. Grab did not disclose its valuation with the latest investments.

The news comes directly on the heels of rumors that Grab is in talks to merge with its big regional rival, Gojek . Gojek has denied the reports directly to TechCrunch, while Grab declined to comment (but pointedly did not deny) although a source close to one of them confirms that they have been talking for 3.5 months — starting just after Gojek founder and former CEO left the company in October to join Indonesian president Joko Widodo’s cabinet.

Ever since GoJek founder left the startup, there has been internal tension at the firm, the source said. The tension escalated after GoJek failed to secure new funds from SoftBank, the talks of which have not been previously reported, the source said. This led the startup’s board to push for a merger.

The funding is coming in two tranches that were actually announced separately.

The first, from Mitsubishi UFJ Financial Group, Inc, will see the firm invest “up to $706 million into Grab to jointly develop next generation bespoke financial services in Southeast Asia to boost financial inclusion in the region,” the two said in a joint statement. MUFG and its regional affiliates will also become “First Choice Bank” to Grab, meaning that Grab will use MUFG first in countries where it operates when it requires a banking partnership for payments or other financial services.

The second tranche is coming from TIS INTEC, an IT solutions business out of Japan, which is putting in $150 million along with a strategic deal to help Grab develop the infrastructure needed to run is growing financial services business, starting with digital payments by way of GrabPay.

Both deals are important not just for Grab but its new investors, which are looking for more opportunities and customer channels into a wider region of Asia beyond their common home market of Japan.

Grab’s growth of its “super app” — in which it (like others pursuing a similar strategy) provides a one-stop shop for consumers to both see to their transportation needs, but also other aspects of their connected consumer life, such as eating, entertainment and managing their money — has involved the company partnering with a number of other financial giants, including Mastercard, Credit Saison, Chubb, and ZhongAn Online P&C Insurance Co. Ltd.

“MUFG’s investment into Grab is a vote of confidence in our super app strategy and our ability to build a long-term, sustainable business. Together with MUFG, we look forward to playing a key role in driving financial inclusion in Southeast Asia and offering greater and affordable access to financial products and services to millions of customers across the region,” said Ming Maa, President, Grab, in a statement.

“MUFG has been developing business in Southeast Asia by building a platform centered on our partner banks. We are excited to be able to provide customers with next-generation financial services by combining Grab’s advanced technologies and data management expertise with our financial knowledge and know-how,” said Hironori Kamezawa, Deputy President, Group COO & Group CDTO, MUFG, in a statement. “We believe that this alliance will also generate additional momentum for our ongoing digital transformation of MUFG.”

The financing development looks like it may have been precipitated by the report that surfaced on Monday from The Information, which reported that it is in merger discussions with Gojek, a ride-hailing business based out of Indonesia and also a big player in on-demand transportation and related services in the region.

A Gojek spokesperson told TechCrunch that “there are no plans for any sort of merger, and recent media reports regarding discussions of this nature are not accurate.” A Grab representative, meanwhile, said that the company declines to comment on market rumors and speculation.

A merger is one possible solution to the costly rivalry being waged by the two companies in Southeast Asia and the statements may be an effort to ward off attention before a deal nears completion.

With a $14 billion valuation and investors including SoftBank, Uber and Didi Chuxing, Grab is the larger company, but it competes head-to-head in Indonesia with Gojek, which has financial backing from Tencent, Google and Visa, among others. Both companies have expanded beyond ride-hailing into a wide range of services, including food deliveries and payments, through their apps.

The logic here is that while ride-hailing has proven to be a very popular business (both in terms of attracting drivers and passengers in the two-sided marketplace), the unit economics of ride-hailing on their own have nevertheless proven time and again to be disastrous — largely because the operational costs needed to build and run these kinds of businesses are just too high when you take into account the competitive landscape.

The biggest companies in the space, such as Uber, have reported billions of dollars in operating losses, leading them to divest of some of the most unprofitable efforts to once-rivals — Grab for example has become involved in Uber’s business in Southeast Asia — and, parallel to that, invest big in expanding to other services to capitalise on their economies of scale.

Thus, with Grab and Gojek, the pair have expanded into delivering other things besides passengers — such as food — and using the financial relationships they already have with users paying for transport in the app to provide other financial services.

But even that may not be enough to tip into the black — a need that investors would have eventually called in, after handing over billions in funding and waiting sometimes for many years to get a return. And that, most likely, is why we are now hearing about deals like this, and will probably hear about more in other regions, too.

According to the Information, executives from Gojek and Grab have met occasionally over the past several years, and began to discuss a merger more seriously recently. But for now it’s the usual story: the two disagree over the businesses’ valuations and how control of the combined company would be split, with Grab telling its major investors that Gojek wants its shareholders to hold 50% of its combined Indonesian operations, and wish to avoid Gojek’s operations getting absorbed by Grab.

If these talks don’t find their way to a signed contract, it’s not clear whether Gojek will have to go out for more funding, or if either/both will look for other strategic partners. One thing is certain: the bigger consolidation trend does mean the field of players is getting smaller.

If they agree to merge, the two companies would potentially also deal with regulatory challenges similar to the ones Grab had to deal with when it bought Uber’s Southeast Asia operations in 2018.

How to make a deal with a VC at a tech conference

By Walter Thompson
Mahendra Ramsinghani Contributor
Mahendra Ramsinghani is the founder of Secure Octane Investments, which includes Demisto, CyberGRX and 16 other infrastructure and cybersecurity companies. He is the author of "The Business of Venture Capital" and "Startup Boards," co-authored with Brad Feld.

Are the schmooze sessions, after-parties and secret dinners with investors that take place during tech conferences mere distractions, or are these events an opportunity for founders to close a deal?

Which parties should you attend? How do you get in? And above all, what outcome are you working toward?

Some events are small, while others are shows of pomp, power and pizzazz.For me, this is a time to bring value to my portfolio,” says Sid Trivedi, partner at Foundation Capital. Foundation’s RSA 2020 event is a small gathering of 50 people who fall into one of three categories: buyers from Global 2000 companies, channel partners or portfolio CEOs.

“In particular, I am focused on helping seed-stage companies because they rarely get access to such a buyer universe,” Trivedi says. At the other end of the spectrum, some events will have several hundred attendees, which raises the odds of getting lost in a crowd.

“If the event has a well-curated attendee list, it makes it worthwhile for both sides. Often, I can scan the room in 15 minutes and know if I want to stay here,” said Ariel Tseitlin, a partner at Scale Venture Partners. Some conference events are hosted by top-tier investors and partnership-heavy corporate VCs, while others are driven by consulting groups that share market trends and research content. As one founder bemoaned, “why can’t we just have a Tinder for VC-CEO match-making?”

Bypassing the firewall

If you don’t have an invitation, I don’t advise just showing up at the door; these are well-guarded events. Gate-crashing is a good strategy for a 19-year-old (who has the maturity of a 12-year-old), but not for the rest of us. Some founders use a simple tactic: get an existing portfolio CEO to take you in as their guest. Most VCs love it when they get such an introduction; it’s a great start and much better than sending a cold email or a LinkedIn to the lead partner.

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Original Content podcast: Netflix’s ‘Locke & Key’ offers spooky delights

By Anthony Ha

At times, it can be hard to tell exactly who “Locke & Key” was made for.

Adapted from a comic book series written by Joe Hill and illustrated by Gabriel Rodriguez, the show tells the story of the Locke family after they move into the mysterious Keyhouse, where they soon discover hidden keys that can be used for a variety of magical purposes.

With its emphasis on adolescent romance and magical powers, “Locke & Key” often feels like a young adult adaptation, but it also strays into darker territory, with plenty of horror, as well as a persuasive focus on the family’s ongoing trauma following the violent death of husband/father Rendell Locke.

Despite some quibbles, your Original Content podcast hosts agree that the show manages to balance these different elements effectively, with surprising plot twists, creepy visuals and a particularly compelling sibling relationship between the two teenaged Lockes, Tyler (played by Connor Jessup) and Kinsey (Emilia Jones).

In addition to reviewing the show, we also discuss the announcement that Netflix has acquired Adam McKay’s next film, “Don’t Look Up,” which will star Jennifer Lawrence. We had less to say about the movie itself and more about our respective attitudes towards a potential asteroid apocalypse.

You can listen in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also send us feedback directly. (Or suggest shows and movies for us to review!)

And if you want to skip ahead, here’s how the episode breaks down:

0:00 Intro
0:35 “Don’t Look Up” discussion
14:19 “Locke and Key” spoiler-free review
29:48 “Locke and Key” spoiler discussion

Daily Crunch: Coronavirus causes likely PC shipment decline

By Anthony Ha

The coronavirus outbreak continues to impact the tech industry, Facebook’s Libra Association signs up a new partner and short-form video service Quibi is available for pre-order. Here’s your Daily Crunch for February 21, 2020.

1. PC shipments expected to drop this year because of coronavirus outbreak

The coronavirus outbreak could result in at least a 3.3% drop — and as high as a 9% dip — in the volume of PCs that will ship globally this year, according to research firm Canalys.

“In the best-case scenario, production levels are expected to revert to full capacity by April 2020, hence the biggest hit will be to sell-in shipments in the first two quarters, with the market recovering in Q3 and Q4,” the firm said.

2. Shopify joins Facebook’s cryptocurrency Libra Association

After eBay, Visa, Stripe and other high-profile partners ditched the Facebook-backed cryptocurrency collective, Libra scored a win with the addition of Shopify. The e-commerce platform will become a member of Libra Association, contributing at least $10 million and operating a node that processes transactions for the Facebook-originated stable coin.

3. Quibi’s streaming service app launches in app stores for pre-order

Quibi, the mobile-only streaming service from Jeffrey Katzenberg, is now open for pre-orders. The company declined to fully show off its app only a month ago at CES — instead, demos focused on its “TurnStyle” technology — but it appears the app is ready nonetheless.

4. Volocopter extends Series C funding to $94M with backing from logistics giant DB Schenker and others

With this new funding, Volocopter brings its total raised to around $132 million, and it says it will use the newly acquired capital to help certify its VoloCity aircraft, an air taxi designed to transport people, which is on track to become the company’s first-ever vehicle licensed for commercial operation.

5. Where top VCs are investing in manufacturing and warehouse robotics

With our 2020 Robotics + AI sessions event less than two weeks away, we’ve decided to perform temperature checks across some of the hottest robotics sub-verticals to see which trends are coming down the pipe and where checks are actually being written. (Extra Crunch membership required.)

6. How ‘The Mandalorian’ and ILM invisibly reinvented film and TV production

While a successful live-action Star Wars TV series is important in its own right, the way this particular show was made represents a far greater change, perhaps the most important since the green screen.

7. Shogun raises $10M to help e-commerce brands build faster websites

The company’s first product, Page Builder, offers a drag-and-drop interface to make it easier for e-commerce brands to build their storefronts on Shopify, BigCommerce, Salesforce and Magento. And there’s a new product, Shogun Frontend, which allows brands to create a web storefront that’s entirely customized while still using one of the big commerce platforms as their back end.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

These leaders are coming to Robotics + AI on March 3. Why aren’t you?

By Emma Comeau

TechCrunch Sessions: Robotics + AI brings together a wide group of the ecosystem’s leading minds on March 3 at UC Berkeley. Over 1000+ attendees are expected from all facets of the robotics and artificial intelligence space – investors, students, engineerings, C-levels, technologists, and researchers. We’ve compiled a small list of highlights of attendees’ companies and job titles attending this year’s event below.

ATTENDEE HIGHLIGHTS

  • ABB Technology Ventures, Vice President
  • Amazon, Head, re:MARS Product Marketing
  • Amazon Web Services, Principal Business Development Manager
  • Autodesk, Director, Robotics
  • AWS, Principal Technologist
  • BMW, R&D Engineer
  • Bosch Venture Capital, Investment Principal
  • Capital One, President of Critical Stack
  • Ceres Robotics Inc, CEO
  • Deloitte, Managing Director
  • Facebook AI Research, Research Lead
  • Ford X, Strategy & Operations
  • Goldman Sachs, Technology Investor
  • Google, Vice President
  • Google X, Director, Robotics
  • Greylock, EIR
  • Hasbro, Principal Engineer
  • Honda R&D Americas Inc., Data Engineer
  • HSBC, Global Relationship Manager
  • Huawei Technologies, Principal System Architect of Corporate Technology Strategy
  • Hyundai CRADLE, Industrial Design
  • Intel, Hardware Engineer
  • Intuit, Inc., Software Engineer
  • iRobot, CTO
  • John Deere, Director, Precision Ag Marketing and Innovation
  • Kaiser Permanente, Director
  • Kawasaki Heavy Industries (USA), Inc., Technical Director
  • LG Electronics, Head of Engineering
  • LockHeed Martin, Engineering Manager
  • Moody’s Analytics, Managing Director
  • Morgan Stanley, Executive Director
  • NASA, Senior Systems Architect
  • Nestle, Innovation Manager
  • NVIDIA, Senior Systems Software Engineer
  • Qualcomm Ventures, Investment Director
  • Samsung, Director, Open Innovations & Tech Partnership
  • Samsung Ventures, Managing Director
  • Shasta Ventures, Investor
  • Softbank Ventures Asia, Investor
  • Surgical Theater, SVP Engineering
  • Takenaka Corporation, Senior Manager, Technology Planning
  • Techstars, Managing Director
  • Tesla, Sr. Machine Learning Engineer
  • Toyota Research Institute, Manager, Prototyping & Robotics Operations
  • Uber, Engineering Manager
  • UPS, Director of Research and Development

STUDENTS & RESEARCHERS FROM:

  • Columbia University
  • Georgia Institute of Technology
  • Harvard University
  • Northwestern University
  • Santa Clara University
  • Stanford University
  • Texas A&M University
  • UC Berkeley
  • UC Davis
  • UCLA
  • USC
  • Yale University

Did you know that TechCrunch provides a white-glove networking app at all our events called CrunchMatch? You can connect and match with people who meet your specific requirements, message them, and connect right at the conference. How cool is that!?

Want to get in on networking with this caliber of people? Book your $345 General Admission ticket today and save $50 before prices go up at the door. But no one likes going to events alone. Why not bring the whole team? Groups of four or more save 15% on tickets when you book here.

DSP Concepts raises $14.5M for its Audio Weaver platform

By Anthony Ha

DSP Concepts — a startup whose Audio Weaver software is used by companies as varied as Tesla, Porsche, GoPro and Braun Audio — is announcing that it has raised $14.5 million in Series B funding.

The startup goal, as explained to me by CEO Chin Beckmann and CTO Paul Beckmann (yep, they’re a husband-and-wife founding team), is to create the standard framework that companies use to develop their audio processing software.

To that end, Chin told me they were “picky about who we wanted on the B round, we wanted it to represent the support and endorsement of the industry.”

So the round was led by Taiwania Capital, but it also includes investments from the strategic arms of DSP Concepts’ industry partners — BMW i Ventures (which led the Series A), the Sony Innovation Growth Fund by Innovation Growth Ventures, MediaTek Ventures, Porsche Ventures and the ARM IoT Fund.

Paul said Audio Weaver started out as the “secret weapon” of the Beckmanns’ consulting business, which he could use to “whip out” the results of an audio engineering project. At a certain point, consulting customers started asking him, “Hey, how about you teach me how to use that?,” so they decided to launch a startup focused on the Audio Weaver platform.

Audio Weaver - AWE Designer

Paul described the software as a “graphical block diagram editor.” Basically, it provides a way for audio engineers to combine and customize different software modules for audio processing.

“Audio is still in the Stone Ages compared to other industries,” he said. “Suppose you’re building a product with a touchscreen — are you going write the graphics from scratch or use a framework like Qt?”

Similarly, he suggested that while many audio engineers are still “down in the weeds writing code,” they can take advantage of Audio Weaver’s graphical interface to piece everything together, as well as the company’s “hundreds of different modules — pre-written, pre-tested, pre-optimized functions to build up your system.”

For example, Paul said that by using the Audio Weaver platform, DSP Concepts engineers could test out “hundreds of ideas” for algorithms for reducing wind noise in the footage captured by GoPro cameras, then ultimately “hand the algorithms over to GoPro,” whose team could them plug the algorithms into their software and modify it themselves.

The Beckmanns said the company also works closely with chip manufacturers to ensure that audio software will work properly on any device powered by a given chipset.

Other modules include TalkTo, which is designed to give voice assistants like Alexa “super-hearing,” so that they can still isolate voice commands and cancel out all the other noise in loud environments, even rock concerts. (You can watch a TalkTo demo in the video below.)

DSP Concepts has now raised more than $25 million in total funding.

 

Where top VCs are investing in manufacturing and warehouse robotics

By Arman Tabatabai

Robotics and automation tools are now foundational parts of warehouses and manufacturing facilities around the world. Unlike many other robotics and AI use cases, the technology has moved well beyond the theoretical into practice and is used by small suppliers and large companies like Amazon and Walmart.

There’s no doubt that automation will transform every step of the supply chain, from manufacturing to fulfillment to shipping and logistics. The only question is how long such a revolution will take.

There’s still plenty of market left to transform and lots of room for new players to redefine different verticals, even with many of the existing leaders having already staked their claim. Naturally, VCs are plenty eager to invest millions in the technology. In 2019 alone, manufacturing, machinery and automation saw roughly 800-900 venture-backed fundraising rounds, according to data from Pitchbook and Crunchbase, close to two-thirds of which were still early-stage (pre-seed to Series B) investments.

With our 2020 Robotics+AI sessions event less than two weeks away, we’ve decided to perform temperature checks across some of the hottest robotics sub-verticals to see which trends are coming down the pipe and where checks are actually being written. Just as we did with construction robotics last week, this time, we asked six leading VCs who actively invest in manufacturing automation robotics to share what’s exciting them most and where they see opportunities in the sector:

Rohit Sharma, True Ventures

Which trends are you most excited about in manufacturing/warehouse automation robotics from an investing perspective?

Volocopter extends Series C funding to $94M with backing from logistics giant DB Schenker and others

By Darrell Etherington

Autonomous air mobility company Volocopter has added to the Series C funding round it announced in September 2019. The German electric vertical take-off and landing (eVTOL) aircraft maker announced €50 million ($54 million at today’s exchange rate) in funding at the time, and the C round has now grown to €87 million ($94 million) thanks to new lead investor DB Schenker, a German logistics company with operations all over the world.

This round also includes participation by Mitsui Sumitomo Insurance Group, as well as the venture arm of its parent MS&AD, along with TransLink Capital . Existing investors, including Lukasz Gadowski and btov, also participated in this round extension.

With this new funding, Volocopter brings its total raised to around $132 million, and it says it will use the newly acquired capital to help certify its VoloCity aircraft, its air taxi eVTOL designed to transport people, which is on track to become the company’s first-ever vehicle licensed for commercial operation. Meanwhile, Volocopter will also use the new funds to help continue development of a next-generation iteration of its VoloDrone, which is the cargo-carrying version of its aircraft. It aims to use VoloDrone to expand its market to include logistics, as well as construction, city infrastructure and agriculture.

Already, Volocopter has formed partnerships with companies including John Deere for pilots of its VoloDrone, but it says that a second-generation version of the vehicle will help it commercialize the drone. On the VoloCity side, the company recently flew a demonstration flight in Singapore, and then announced they’d be working with Grab on a feasibility study about air taxi services for potential deployment across Southeast Asia in key cities.

Alongside this round extension, Volocopter adds two advisory board members — Yifan Li from Geely Holding Group, which led the first tranche of this round closed in September, and DB Schenker CEO Jochen Thewes. Both of these are key strategic partners from investors who stand to benefit the company not only in terms of funding, but also in terms of supply-side and commercialization.

Loon and SoftBank’s HAPSMobile team with Airbus, China Telecom and more on stratospheric cell networks

By Darrell Etherington

A new industry alliance led by Alphabet’s Loon high-altitude balloon technology company and SoftBank’s HAPSMobile stratospheric glider subsidiary aims to work together on standards and tech related to deploying network connectivity using high-altitude delivery mechanisms.

This extends the existing partnership between HAPSMobile and Loon, which began with a strategic alliance between the two announced last April, and which recently resulted in Loon adapting the network hardware it uses on its stratospheric balloons to work with the HAPSMobile stratospheric long-winged drone. Now, they two are welcoming more members, including AeroVironment, Airbus Defence and Space, Bharti Airtel, China Telecom, Deutsche Telekom, Ericsson, Intelsat, Nokia, HAPSMobile parent SoftBank and Telefonica.

The new HAPS Alliance, as it’s being called (HAPS just stands for ‘High Altitude Platform Station’) will be working together to promote use of the technology, as well as work with regulators in the markets where they operate on enabling its use. They’ll work towards developing a set of common industry standards for network interoperability, and also figure how to essentially carve up the or stake out the stratosphere so that participating industry players can work together without stepping on each other’s toes.

This new combined group is no slouch: It includes some of the most powerful network operators in the world, as well as key network infrastructure players and aerospace companies. Which could mean big things for stratospheric networks, which have the advantages of being closer to Earth than satellite-based internet offerings, but also avoid the disadvantages of ground-based cell towers like having to deal with difficult terrain or more limited range.

Is this the first step towards a future where our connected devices rely on high-flying, autonomous cell towers for connectivity? It’s too early to say how ubiquitous this will get, but this new group of heavyweights definitely lends more credence to the idea.

SpaceX alumni are helping build LA’s startup ecosystem

By Jonathan Shieber

During the days when Snapchat’s popularity was booming, investors thought the company would become the anchor for a new Los Angeles technology scene.

Snapchat, they hoped, would spin-off entrepreneurs and angel investors who would reinvest in the local ecosystem and create new companies that would in turn foster more wealth, establishing LA as a hub for tech talent and venture dollars on par with New York and Boston.

In the ensuing years, Los Angeles and its entrepreneurial talent pool has captured more attention from local and national investors, but it’s not Snap that’s been the source for the next generation of local founders. Instead, several former SpaceX employees have launched a raft of new companies, capturing the imagination and dollars of some of the biggest names in venture capital.

“There was a buzz, but it doesn’t quite have the depth of bench of people that investors wanted it to become,” says one longtime VC based in the City of Angels. “It was a company in LA more than it was an LA company.” 

Perhaps the most successful SpaceX offshoot is Relativity Space, founded by Jordan Noone and Tim Ellis. Since Noone, a former SpaceX engineer, and Ellis, a former Blue Origin engineer, founded their company, the business has been (forgive the expression) a rocket ship. Over the past four years, Relativity href="https://techcrunch.com/2019/10/01/relativity-a-new-star-in-the-space-race-raises-160-million-for-its-3-d-printed-rockets/"> has raised $185.7 million, received special dispensations from NASA to test its rockets at a facility in Alabama, will launch vehicles from Cape Canaveral and has signed up an early customer in Momentus, which provides satellite tug services in orbit.

DeFi aims to bridge the gap between blockchains and financial services

By Romain Dillet

If you’ve been following cryptocurrency news for the past few months, there’s one word that keeps coming back — DeFi, also known as decentralized finance. As the name suggests, DeFi aims to bridge the gap between decentralized blockchains and financial services.

The original purpose of bitcoin hasn’t changed; it’s a crypto asset that lets users transfer money digitally without any bank in the middle. During the early days of bitcoin, people claimed that the blockchain could replace banks altogether.

But retail banks provide a ton of services beyond payments. If you have a bank account, it’s unlikely that you only use it to store, receive and send money. You may have a credit card, a savings account, a loan, some shares, etc.

That’s why developers have been looking at ways to port financial services to blockchains that support smart contracts. Some blockchains, such as Ethereum, EOS or Tezos, let you add a script to a transaction. The script is executed when some conditions are met.

And this is a key element of DeFi — the financial product shouldn’t be managed by a central server. Everything happens on the blockchain. If you want to read the fine print of your financial product, you can look at the code on the blockchain directly.

Daily Crunch: Twitter threads are getting easier

By Anthony Ha

Twitter is rolling out a “continue thread” button, ViacomCBS has big plans for its streaming service and Morgan Stanley acquires E-Trade. Here’s your Daily Crunch for February 20, 2020.

1. Twitter adds a button so you can thread your shower thoughts

Twitter is adding a new feature for mobile users to make it easier to link dispersed tweets together. Per 9to5Mac, the feature — which Twitter tweeted about yesterday — is slowly rolling out to its iOS app. (At the time of writing we spotted it in Europe.)

The feature lets you pull down as you’re composing a tweet to create a thread, or to see a “continue thread” option.

2. CBS All Access to gain content from Nick, MTV, Comedy Central, Paramount Pictures & more

Until now, CBS All Access was of primary interest to Star Trek fans, but in today’s otherwise underwhelming Q4 earnings of the newly merged ViacomCBS, the company said the plan is to launch a new “broad pay” streaming service that will include CBS All Access content along with other ViacomCBS assets in film and TV.

3. What the $13B E-Trade deal says about Robinhood’s valuation

News broke this morning that Morgan Stanley, a banking behemoth, will buy E-Trade, an online brokerage and financial services firm, for around $13 billion in stock. Meanwhile, Robinhood has about twice the accounts as E-Trade — but E-Trade probably has more assets under management. (Extra Crunch membership required.)

4. A group of ex-NSA and Amazon engineers are building a ‘GitHub for data’

Data is often highly sensitive and out of reach, kept under lock and key by red tape and compliance, requiring weeks for approval. So the aforementioned engineers started Gretel, an early-stage startup that aims to help developers safely share and collaborate with sensitive data in real time.

5. HungryPanda, a food delivery app for Chinese communities, raises $20 million

Founded in the United Kingdom, where its service first launched in Nottingham, HungryPanda is now available in 31 cities in the U.K., Italy, France, Australia, New Zealand and the U.S.

6. Google gobbling Fitbit is a major privacy risk, warns EU data protection advisor

The European Data Protection Board has intervened to raise concerns about Google’s plan to scoop up the health and activity data of millions of Fitbit users. Google confirmed its plan to acquire Fitbit last November, but regulators are in the process of considering whether to allow the tech giant to gobble up all of Fitbit’s data.

7. Sling TV reports first-ever subscriber decline

This week, the company reported its first-ever decline in Sling TV subscribers, with a drop of 94,000 customers in the fourth quarter. Dish says the streaming service ended the year with 2.59 million total subscribers.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

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