Audi has created a new business unit called Artemis to bring electric vehicles equipped with highly automated driving systems and other tech to market faster — the latest bid by the German automaker to become more agile and competitive.
The traditional automotive industry, where the design to start of production cycle might take five to seven years, has been grappling with how to bring new and innovative products to market more quickly to meet consumers’ fickle demands. The model is more akin to how Tesla or a consumer electronics company operates.
The first project under Artemis will be to “develop a pioneering model for Audi quickly and unbureaucratically,” Audi AG CEO Markus Duesmann said in a statement Friday. The unit is aiming to design and produce what Audi describes as a “highly efficient electric car” as early as 2024.
Artemis will be led by Alex Hitzinger, who was in charge of Audi’s Autonomous Intelligent Driving, the self-driving subsidiary that was launched just in 2017 to develop autonomous vehicle technology for the VW Group. AID was absorbed into the European headquarters of Argo AI, a move that was made after VW invested $2.6 billion in capital and assets into the self-driving startup.
Hitzinger, who takes the new position beginning June 1, will report directly to Duesmann. Artemis will be based at the company’s tech hub of its INCampus in Ingolstadt, Germany.
Artemis is under the Audi banner. However, the aim is for this group’s work to benefit brands under its parent company VW Group. Hitzinger and the rest of his team will have access to resources and technologies within the entire Volkswagen Group . For instance, Car.Software, an independent business unit under the VW Group, will provide digital services to Artemis. The upshot: to create a blueprint that will make VW Group a more agile automaker able to bring new and technologically advanced vehicles to market more quickly.
VW Group plans to produce and sell 75 electric vehicle models across its brands by 2029, a group that includes VW passenger cars and Audi. The creation of Artemis hasn’t changed Audi’s plans to produce 20 new all-electric vehicles and 10 new plug-in hybrids by 2025.
“The obvious question was how we could implement additional high-tech benchmarks without jeopardizing the manageability of existing projects, and at the same time utilize new opportunities in the markets,” Duesmann said.
On Monday, Virgin Orbit attempted the first full flight of its orbital payload launch system, which includes a modified Boeing 747 called ‘Cosmic Girl’ that acts as a carrier aircraft for its air-launched rocket LauncherOne. While Virgin Orbit has flown Cosmic Girl and LauncherOne previously for different tests and demonstrations, this was the first end-to-end system test. Unfortunately, that test ended much earlier than planned – just shortly after the LauncherOne rocket was released from Cosmic Girl.
We've confirmed a clean release from the aircraft. However, the mission terminated shortly into the flight. Cosmic Girl and our flight crew are safe and returning to base.
— Virgin Orbit (@Virgin_Orbit) May 25, 2020
Cosmic Girl took off just before 12 PM PT (3 PM ET) from Mojave Air and Spaceport in California. The aircraft was piloted by Chief Test Pilot Kelly Latimer, along with her co-pilot Todd Ericson. The aircraft then flew to its target release point, where LauncherOne did manage a “clean release” from the carrier craft as planned at around 12:50 PM PT (3:50 PM ET), but Virgin noted just a few minutes later that the mission was subsequently “terminated.”
While the Cosmic Girl crew and all other employees are confirmed safe by the company, this is likely to be a disappointing test. Still, Virgin Orbit’s CEO Dan Hart and VP Will Pomerantz cautioned that many first test missions for new launch systems don’t go quite as planned – which is why you test, after all.
The full planned flight map today for Virgin One’s orbital test.
The company will still likely be able to collect a lot of valuable data from this mission, which should provide insight into what went wrong. We’ll also be reaching out to the company to seek details of what caused the early ending to today’s mission. Once the company addresses the problems, it’s likely to set another attempt, and that might not be as far away as you might expect because Virgin has been very active on its launch vehicle pipeline and has backup craft nearly ready to fly.
Hello and welcome back to TechCrunch’s China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world. It’s been a tumultuous week for Chinese tech firms abroad: Huawei’s mounting pressure from the U.S., a big blow to U.S.-listed Chinese firms, and TikTok’s high-profile new boss.
Over the years, American investors have been pumping billions of dollars into Chinese firms listed in the U.S., from giants like Alibaba and Baidu to emerging players like Pinduoduo and Bilibili. That could change soon with the Holding Foreign Companies Accountable Act, a new bill passed this week with bipartisan support to tighten accounting standards on foreign companies, with the obvious target being China.
“For too long, Chinese companies have disregarded U.S. reporting standards, misleading our investors. Publicly listed companies should all be held to the same standards, and this bill makes commonsense changes to level the playing field and give investors the transparency they need to make informed decisions,” said Senator Chris Van Hollen who introduced the legislation.
Here’s what the legislation is about:
1) Foreign companies that are out of compliance with the Public Company Accounting Oversight Board for three years in a row will be delisted from U.S. stock exchanges.
PCAOB, which was set up in 2002 as a private-sector nonprofit corporation overseen by the SEC, is meant to inspect audits of foreign firms listed in the U.S. to prevent fraud and wrongdoing.
The rule has not sat well with foreign accounting firms and their local regulators, so over time PCAOB has negotiated multiple agreements with foreign counterparts that allowed it to perform audit inspections. China is one of the few countries that has not been cooperating with the PCAOB.
2) The bill will also require public companies in the U.S. to disclose whether they are owned or controlled by a foreign government, including China’s communist government.
The question now is whether we will see Chinese companies give in to the new rules or relocate to bourses outside the U.S.
The Chinese firms still have a three-year window to figure things out, but they are getting more scrutiny already. Most recently, Nasdaq announced to delist Luckin, the Chinese coffee challenger that admitted to fabricating $310 million in sales.
Those that do choose to leave the U.S. will probably find a warmer welcome in Hong Kong, attracting investors closer to home who are more acquainted with their businesses. Alibaba, for instance, already completed a secondary listing in Hong Kong last year as the city began letting investors buy dual-class shares, a condition that initially prompted many Chinese internet firms to go public in the U.S.
The long-awaited announcement is here: TikTok has picked its new chief executive, and taking the helm is Disney’s former head of video streaming, Kevin Mayer.
It’s understandable that TikTok would want a global face for its fast-growing global app, which has come under scrutiny from foreign governments over concerns of its data practices and Beijing’s possible influence.
Curiously, Mayer will also take on the role of the chief operating officer of parent company ByteDance . A closer look at the company announcement reveals nuances in the appointment: Kelly Zhang and Lidong Zhang will continue to lead ByteDance China as its chief executive officer and chairman respectively, reporting directly to ByteDance’s founder and global CEO Yiming Zhang, as industry analyst Matthew Brennan acutely pointed out. That means ByteDance’s China businesses Douyin and Today’s Headlines, the cash cows of the firm, will remain within the purview of the two Chinese executives, not Mayer.
Huawei is in limbo after the U.S. slapped more curbs on the Chinese telecoms equipment giant, restricting its ability to procure chips from foreign foundries that use American technologies. The company called the rule “arbitrary and pernicious,” while it admitted that the attack would impact its business.
As Huawei faces pressure abroad due to the Android ban, other Chinese phone makers have been steadily making headway across the world. One of them is Oppo, which just announced a partnership with Vodafone to bring its smartphones to the mobile carrier’s European markets.
The U.S. has extended sanctions to more Chinese tech firms to include CloudWalk, which focuses on developing facial recognition technology. This means all of the “four dragons of computer vision” in China, as the local tech circle collectively calls CloudWalk, SenseTime, Megvii and Yitu, have landed on the U.S. entity list.
China has a new master plan to invest $1.4 trillion in everything from AI to 5G in what it dubs the “new infrastructure” initiative.
The smartwatch maker is eyeing a transparent, self-disinfecting mask, becoming the latest Chinese tech firm to jump on the bandwagon to develop virus-fighting tech.
The TikTok parent bankrolled financial AI startup Lingxi with $6.2 million, marking one of its first investments for purely monetary returns rather than for an immediate strategic purpose.
The once-obscure video site for anime fans is now in the mainstream with a whopping 172 million monthly user base.
It’s part of the smartphone giant’s plan to conquer the world of smart home devices and wearables.
Like Amazon, Alibaba has a big ambition in the internet of things.
The debate over encryption continues to drag on without end.
In recent months, the discourse has largely swung away from encrypted smartphones to focus instead on end-to-end encrypted messaging. But a recent press conference by the heads of the Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) showed that the debate over device encryption isn’t dead, it was merely resting. And it just won’t go away.
At the presser, Attorney General William Barr and FBI Director Chris Wray announced that after months of work, FBI technicians had succeeded in unlocking the two iPhones used by the Saudi military officer who carried out a terrorist shooting at the Pensacola Naval Air Station in Florida in December 2019. The shooter died in the attack, which was quickly claimed by Al Qaeda in the Arabian Peninsula.
Early this year — a solid month after the shooting — Barr had asked Apple to help unlock the phones (one of which was damaged by a bullet), which were older iPhone 5 and 7 models. Apple provided “gigabytes of information” to investigators, including “iCloud backups, account information and transactional data for multiple accounts,” but drew the line at assisting with the devices. The situation threatened to revive the 2016 “Apple versus FBI” showdown over another locked iPhone following the San Bernardino terror attack.
After the government went to federal court to try to dragoon Apple into doing investigators’ job for them, the dispute ended anticlimactically when the government got into the phone itself after purchasing an exploit from an outside vendor the government refused to identify. The Pensacola case culminated much the same way, except that the FBI apparently used an in-house solution instead of a third party’s exploit.
You’d think the FBI’s success at a tricky task (remember, one of the phones had been shot) would be good news for the Bureau. Yet an unmistakable note of bitterness tinged the laudatory remarks at the press conference for the technicians who made it happen. Despite the Bureau’s impressive achievement, and despite the gobs of data Apple had provided, Barr and Wray devoted much of their remarks to maligning Apple, with Wray going so far as to say the government “received effectively no help” from the company.
This diversion tactic worked: in news stories covering the press conference, headline after headline after headline highlighted the FBI’s slam against Apple instead of focusing on what the press conference was nominally about: the fact that federal law enforcement agencies can get into locked iPhones without Apple’s assistance.
That should be the headline news, because it’s important. That inconvenient truth undercuts the agencies’ longstanding claim that they’re helpless in the face of Apple’s encryption and thus the company should be legally forced to weaken its device encryption for law enforcement access. No wonder Wray and Barr are so mad that their employees keep being good at their jobs.
By reviving the old blame-Apple routine, the two officials managed to evade a number of questions that their press conference left unanswered. What exactly are the FBI’s capabilities when it comes to accessing locked, encrypted smartphones? Wray claimed the technique developed by FBI technicians is “of pretty limited application” beyond the Pensacola iPhones. How limited? What other phone-cracking techniques does the FBI have, and which handset models and which mobile OS versions do those techniques reliably work on? In what kinds of cases, for what kinds of crimes, are these tools being used?
We also don’t know what’s changed internally at the Bureau since that damning 2018 Inspector General postmortem on the San Bernardino affair. Whatever happened with the FBI’s plans, announced in the IG report, to lower the barrier within the agency to using national security tools and techniques in criminal cases? Did that change come to pass, and did it play a role in the Pensacola success? Is the FBI cracking into criminal suspects’ phones using classified techniques from the national security context that might not pass muster in a court proceeding (were their use to be acknowledged at all)?
Further, how do the FBI’s in-house capabilities complement the larger ecosystem of tools and techniques for law enforcement to access locked phones? Those include third-party vendors GrayShift and Cellebrite’s devices, which, in addition to the FBI, count numerous U.S. state and local police departments and federal immigration authorities among their clients. When plugged into a locked phone, these devices can bypass the phone’s encryption to yield up its contents, and (in the case of GrayShift) can plant spyware on an iPhone to log its passcode when police trick a phone’s owner into entering it. These devices work on very recent iPhone models: Cellebrite claims it can unlock any iPhone for law enforcement, and the FBI has unlocked an iPhone 11 Pro Max using GrayShift’s GrayKey device.
In addition to Cellebrite and GrayShift, which have a well-established U.S. customer base, the ecosystem of third-party phone-hacking companies includes entities that market remote-access phone-hacking software to governments around the world. Perhaps the most notorious example is the Israel-based NSO Group, whose Pegasus software has been used by foreign governments against dissidents, journalists, lawyers and human rights activists. The company’s U.S. arm has attempted to market Pegasus domestically to American police departments under another name. Which third-party vendors are supplying phone-hacking solutions to the FBI, and at what price?
Finally, who else besides the FBI will be the beneficiary of the technique that worked on the Pensacola phones? Does the FBI share the vendor tools it purchases, or its own home-rolled ones, with other agencies (federal, state, tribal or local)? Which tools, which agencies and for what kinds of cases? Even if it doesn’t share the techniques directly, will it use them to unlock phones for other agencies, as it did for a state prosecutor soon after purchasing the exploit for the San Bernardino iPhone?
We have little idea of the answers to any of these questions, because the FBI’s capabilities are a closely held secret. What advances and breakthroughs it has achieved, and which vendors it has paid, we (who provide the taxpayer dollars to fund this work) aren’t allowed to know. And the agency refuses to answer questions about encryption’s impact on its investigations even from members of Congress, who can be privy to confidential information denied to the general public.
The only public information coming out of the FBI’s phone-hacking black box is nothingburgers like the recent press conference. At an event all about the FBI’s phone-hacking capabilities, Director Wray and AG Barr cunningly managed to deflect the press’s attention onto Apple, dodging any difficult questions, such as what the FBI’s abilities mean for Americans’ privacy, civil liberties and data security, or even basic questions like how much the Pensacola phone-cracking operation cost.
As the recent PR spectacle demonstrated, a press conference isn’t oversight. And instead of exerting its oversight power, mandating more transparency, or requiring an accounting and cost/benefit analysis of the FBI’s phone-hacking expenditures — instead of demanding a straight and conclusive answer to the eternal question of whether, in light of the agency’s continually-evolving capabilities, there’s really any need to force smartphone makers to weaken their device encryption — Congress is instead coming up with dangerous legislation such as the EARN IT Act, which risks undermining encryption right when a population forced by COVID-19 to do everything online from home can least afford it.
The best–case scenario now is that the federal agency that proved its untrustworthiness by lying to the Foreign Intelligence Surveillance Court can crack into our smartphones, but maybe not all of them; that maybe it isn’t sharing its toys with state and local police departments (which are rife with domestic abusers who’d love to get access to their victims’ phones); that unlike third-party vendor devices, maybe the FBI’s tools won’t end up on eBay where criminals can buy them; and that hopefully it hasn’t paid taxpayer money to the spyware company whose best-known government customer murdered and dismembered a journalist.
The worst-case scenario would be that, between in-house and third-party tools, pretty much any law enforcement agency can now reliably crack into everybody’s phones, and yet nevertheless this turns out to be the year they finally get their legislative victory over encryption anyway. I can’t wait to see what else 2020 has in store.
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
There’s a famous old post going around Twitter this week by entrepreneur and developer David Heinemeier Hansson (@DHH). DHH is a critic of certain elements of the startup world, especially wild valuations. This entry from him is, in my view, a classic of the genre.
The post in question is titled “Facebook is not worth $33,000,000,000,” and was written back in 2010.
You can already imagine who might find the post irksome — namely folks who are in the business of putting capital into high-growth companies. This sort of snark, though not precisely recent, is a good example of how posts like the Facebook entry are read on Twitter.
If you take a moment to actually read DHH’s blog, however, you’ll find that the first part of his argument is that selling a minute slice of a company at a high price, thus “revaluing” the company at a new, stratospheric valuation, is a little silly. DHH didn’t like that by selling a few percentage points of itself, Facebook’s worth was pegged at $33 billion. We’ve seen some similarly-small-dollar, high-valuation rounds recently that could be scooted into the same bucket.
It’s a somewhat fair point.
But what struck me this morning while re-reading the DHH piece was that his second two points are useful rubrics for framing the modern, post-unicorn era. DHH wrote that profits matter, companies are ultimately valued on them, and that companies that don’t scale financial results as they add customers (or users) aren’t great.
Chief, the social network dedicated exclusively to women in professional leadership positions, announced today that it has $15 million in funding from its existing investors, including General Catalyst, Inspired Capital, GGV Capital, Primary Venture Partners, Flybridge Capital and BoxGroup.
The startup is a highly-vetted network of women who are leaders in their business, either managing a budget, a large team or both. The women are often at the VP or executive level. The company has more than 2,000 members in New York, Los Angeles and Chicago from companies like Google, IBM, HBO, Chobani, Walmart, Visa, Teladoc, Doctors Without Borders and the New York Times.
Chief was founded by Carolyn Childers and Lindsay Kaplan, who saw an opportunity to bring community, mentorship and guidance to a very underserved client: the female business leader.
Childers was SVP of Operations at Handy and led the launch of Soap.com, serving as GM there through its acquisition by Amazon. Kaplan was on the founding team of Casper, serving as VP of Communications and Brand, before leaving to co-found Chief.
Chief members are placed into a Core Group, which is industry agnostic, to receive training from one of the company’s contracted and vetted executive coaches alongside their peers. In these peer groups, members talk about their challenges and receive support and guidance from one another, as well as an executive coach. Members also have access to a community chat feature, and Chief’s events, which include leadership workshops, conversations with industry leaders and community roundtables.
Obviously, the coronavirus pandemic has put a damper on in-person features of the platform, such as Core Groups and live events. But Chief has moved swiftly to put all these core services on the web for members to attend and participate virtually.
The company has also fast-tracked the launch of its hiring board, which gives members the ability to privately list great candidates and open positions to the broader network.
Chief vets its members to ensure that the women on the platform ‘get it,’ as Kaplan likes to say.
“We all know it gets lonely at the top, and it gets a lot lonelier a lot earlier for women,” said Childers. “Women are on panels or on the circuit and they’re exhausted. This is a community they don’t have to be the one in the spotlight and feel all the pressure, but can actually be supported in a network of women who feel the exact same way. These women are the only person or one of the few people in their organization who have hit that level of leadership, and really need support from people who get it.”
The company looks at the applicants experience, the size of their organization and immediate team, the reporting structure, budget size, awards and credentials, thought leadership and impact as well as current member nominations.
Interestingly, no more than 9 percent of the Chief membership work in a single industry, which leads to cognitive diversity within the community. The average age of a Chief member is 43, and members manage over $10 billion in collective budget at their organizations and more than 100,000 employees.
Executive-level members pay $7,900 annually, while VP-level members pay $5,800 each year. Chief says that 40 percent of its members are Executives, with the other 60 percent are VPs. The company says that 30 percent of its membership base are women of color.
Chief also operates a Membership Grant program, created to promote diversity of background and thought among members, that brings the cost of an annual membership down to $3,800 for folks coming from non-corporate or underfunded organizations. The company did not disclose what percentage of customers are on the grant program.
Some napkin math then tells us that Chief is likely generating more than $10 million in revenue in 2020, on the conservative end. Kaplan and Childers say that they have a waitlist of 8,000 to join.
The new funding will be used to accelerate growth to meet demand in new cities and support the build-out of technology infrastructure. This latest round brings Chief’s total funding to $40 million.
Porsche has been placing more resources into developing digital services as it tries to match the tech demands of its customers. The latest effort from its Porsche Digital subsidiary is an app that lets U.S. buyers who have ordered a 911 sports car track its progress from production to the dealership.
The app, which is integrated with the My Porsche web portal, provides customers updates on 14 events, including production in Germany, the vehicle’s departure and trek across the Atlantic, port entry into the U.S. and its arrival at the dealership. The digital service, called Porsche Track Your Dream, provides background information about each milestone and shows a countdown in miles and days.
The Porsche tracker is a niche product with a narrow customer base. It will only be offered to 911 buyers. The automaker sold last year 9,265 Porsche 911 sports cars in the United States. But the company does plan to add other vehicles in the future, including its all-electric Taycan.
The app is part of a broader strategy to up its digital game. Earlier this month, Porsche Cars North America launched an online platform called Porsche Finder that lets customers search for used vehicles across its dealership network. The platform lets customers search by vehicle model and generation and includes additional filters for price, equipment and packages, as well as interior and exterior vehicle colors.
In April, the automaker unveiled a line of head units designed to replicate the vintage look while still featuring modern connectivity, such as Bluetooth, DAB+ and Apple CarPlay.
SoftBank Group Corp. is currently seeking buyers for about $20 billion of its shares in T-Mobile US, according to reports in the Wall Street Journal and Bloomberg. If the proposed sale goes through, its proceeds could help offset SoftBank’s heavy investment losses over the past year.
According to its first-quarter earnings report yesterday, SoftBank’s Vision Fund lost $17.4 billion in value for the year ended March 31, obliterating the $12.8 billion gain the fund recorded a year ago. Earlier this year, the company announced plans to sell up to $41 billion of its assets to increase its share buyback program.
Bloomberg reports that under the proposed deal, which could be announced this week, SoftBank would sell part of its stake to Deutsche Telekom AG, T-Mobile’s parent company. Deutsche Telekom currently owns about 44% of T-Mobile’s shares, but would achieve majority ownership if the deal with SoftBank goes through. Softbank would then sell some of its remaining stake to other investors in a secondary offering.
T-Mobile is the United States’ third-largest wireless carrier, after AT&T and Verizon Wireless*, and it has a current market capitalization of about $126 billion, which means SoftBank’s stake is worth about $31 billion, while Deutsche Telekom’s is about $55 billion.
According to the Wall Street Journal, banks including Morgan Stanley and Goldman Sach Group are currently seeking investors for the proposed sale.
*Disclosure: Verizon is TechCrunch’s parent company.
It would be one of the greatest startup investments of all time. Masayoshi Son, riding high in the klieg lights of the 1990s dot-com bubble, invested $20 million dollars into a fledgling Hong Kong-based startup called Alibaba. That $20 million investment into the Chinese e-commerce business would go on to be worth about $120 billion for SoftBank, which still retains more than a quarter ownership stake today.
That early check and the rise, fall, and rise of Son and Alibaba’s Jack Ma helped to cement an intricately connected partnership that has endured decades of ferocious change in the tech industry. Ma joined SoftBank’s board in 2007, and the two have been tech titans together ever since.
So it is notable and worth a minute of reflection that SoftBank announced overnight that Jack Ma would be leaving SoftBank’s board after almost 14 years.
Yet, one can’t help connect the various dots of news that hovers between the two companies and not realize that the partnership that has endured so much is now increasingly fraying, and due to forces far beyond the ken of the two dynamos.
On one hand, there is a pecuniary point: SoftBank has been rapidly selling Alibaba shares the past few years after decades of going long as it attempts to shore up its balance sheet amidst intense financial challenges. According to Bloomberg in March, SoftBank intended to sell $14 billion of its Alibaba shares, and that was after $11 billion in realized returns on Alibaba stock in 2019 from a deal consummated in 2016. It’s just a bit awkward for Ma to be sitting on a board that is actively selling his own legacy.
Yet, there is more here. Jack Ma has become a figure in the fight against COVID-19, and has burnished China’s image (and his own) of responding globally to the crisis. In the process, though, there has been blowback, as concerns about the quality of face masks and other goods have been raised by health authorities.
And of course, there is the deepening trade war, not just between the United States and China, but also between Japan and China. Japan’s government is increasingly looking for a way to find a “China exit” and become more self-sufficient in its own supply chains and less financially dependent on Chinese capitalism.
Meanwhile, the Trump administration has been seeking out avenues of decoupling the U.S. from China. Overnight, the largest chip fab in the world, TSMC, announced that it would no longer accept orders from China’s Huawei following new export controls put in place by the U.S. last week and its announcement of a new, $12 billion chip fab plant in Arizona.
SoftBank itself has gotten caught up in these challenges. As an international conglomerate, and with the Vision Fund itself officially incorporated in Jersey, it has confronted the tightening screws of U.S. regulation of foreign ownership of critical technology companies through mechanisms like CFIUS. Its acquisition of ARM Holdings a few years ago may not have been completed if it had tried today, given the environment in the United Kingdom or the U.S.
So it’s not just about an investor and his entrepreneur breaking some ties after two decades in business together. It’s about the fraying of the very globalization that powered the first wave of tech companies — that a Japanese conglomerate with major interests in the U.S. and Europe could invest in a Hong Kong / China startup and reap huge rewards. That tech world and the divide of the internet and the world’s markets continues unabated.
Apple outlines new safety measures as it reopens stores, Huawei responds to new U.S. chip curbs and Jack Ma departs SoftBank’s board of directors.
Here’s your Daily Crunch for May 18, 2020.
In mid-March, Apple closed all of its stores outside of China “until further notice.” In a statement issued today under the title, “To our Customers,” Retail SVP Deirdre O’Brien offered insight into the company’s plans to reopen locations.
Nearly 100 stores have already resumed services, according to O’Brien. Face covers will be required for both employees and customers alike. In addition, temperature checks are now conducted at the store’s entrance, coupled with posted health questions. Apple has also instituted deeper cleaning on all surfaces, including display products.
Following the U.S. government’s announcement that it would further thwart Huawei’s chip-making capability, the Chinese telecoms equipment giant condemned the new ruling for being “arbitrary and pernicious.” Adding to its woes, the Nikkei Asian Review reported that Taiwanese Semiconductor Manufacturing Co. has stopped taking new orders from the company. (Huawei declined to comment, while TSMC said the report was “purely market rumor.”)
The company did not give a reason for the resignation, but over the past year, Ma has been pulling back from business roles to focus on philanthropy. Last September, he resigned as Alibaba’s chairman, and is also expected to step down from its board at its annual general shareholder’s meeting this year.
Facebook-owned Oculus released a new sales figure as the company reaches the one-year anniversary of the release of the Quest headset. We didn’t get unit sales, but the company did share that it has sold $100 million worth of Quest content in the device’s first year — a number that indicates that although the platform is still nascent, a handful of developers are definitely making it work for them.
Devin Coldewey talks about what’s going to change with coffee shops and co-working spaces, Alex Wilhelm discusses the future of the home office setup and Danny Crichton talks about the revitalization of urban and semi-urban neighborhoods. (Extra Crunch membership required.)
In an internal email, which the Bangalore-headquartered food delivery startup published on its blog, Swiggy co-founder and chief executive Sriharsha Majety said the company’s core food business had been “severely impacted.”
The latest full episode of Equity looks at a funding round for pizza delivery company Slice and the possibility of Uber acquiring Grubhub, while the Monday news roundup takes a deeper look at the financials of the food delivery business. Meanwhile, Original Content is back on a weekly schedule, and we review the new Netflix series “Never Have I Ever.”
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re digging into SoftBank’s latest earnings slides. Not only do they contain a wealth of updates and other useful information, but some of them are gosh-darn-freaking hilarious. We all deserve a bit of levity after the last few months.
The visual elements we quote below come from SoftBank’s reporting of its own results from its fiscal year ending March 31, 2020. Much of the deck is made up of financial reporting tables and other bits of stuff you don’t want to read. We’ve cut all that out and left the fun parts.
Before we dive in, please note that we are largely giggling at some slide design choices and only somewhat at the results themselves. We are certainly not making fun of people who’ve been impacted by layoffs and other such things that these slides’ results encompass.
But we are going to have some fun with how SoftBank describes how it views the world, because how can we not? Let’s begin.
TechCrunch has a number of folks parsing SoftBank’s deck this morning, looking to do serious work. That’s not our goal. Sure, this post will tell you things like the fact that there are 88 companies in the Vision Fund portfolio, and that when it comes to unrealized gains and losses, the portfolio has seen $13.4 billion in gains and $14.2 billion in losses. $4.9 billion of gains have been realized, mind you, while just $200 million of losses have had the same honor.
And this post will tell you that the “net blended [internal rate of return] for SoftBank Vision Fund investors is -1%.”
Hell, you probably also want to know that Uber was detailed as Vision Fund’s worst-performing public company, generating a $1.46 billion loss for the group. In contrast, Guardant Health is good for a $1.67 billion gain, while 2019 IPO Slack has been good for $605 million in profits. Those were the two best companies in the Vision Fund’s public portfolio.
But what you really want is the good stuff. So, shared by slide number, here you go:
SoftBank Group said today that Jack Ma, co-founder of Alibaba Group, will step down from its board after serving as a director for 13 years. Ma’s resignation will be effective on June 25, the date of SoftBank Group’s annual shareholder meeting.
The company did not give a reason for the resignation, but over the past year, Ma has been pulling back from business roles to focus on philanthropy. Last September, he resigned as Alibaba’s chairman, and is also expected to step down from its board at its annual general shareholder’s meeting this year.
Ma has a long business relationship with Softbank Group chairman and CEO Masayoshi Son. SoftBank was one of Alibaba’s first major backers, investing a reported $20 million in 2000, one year after the e-commerce company was founded. As of a February 2020 SEC filing, it owned about 25.1% of Alibaba shares. Its stake in Alibaba is currently worth more than $100 billion, making it SoftBank Group’s most valuable investment.
SoftBank Group’s announcements were made a few hours before it is scheduled to release a dour first quarter earnings report. The company said last month it expects its $100 billion Vision Fund to lose about $16.5 billion, due largely to the near collapse of WeWork, and the impact of the COVID-19 pandemic on other portfolio companies, including Uber and Oyo. It is also expected to post an annual operating loss of $12.5 billion.
To lower debt and increase its cash reserves, SoftBank Group said in March that it is selling or monetizing $41 billion of its assets and buying back $4.7 billion of its shares.
Ma is the only person out of SoftBank Group’s current 11 directors who is leaving. The company also said it nominated three new board directors for election at the shareholders meeting: SoftBank Group chief financial officer Yoshimitsu Goto; Cadence Design Systems chief executive Lip-Bu Tan; and Waseda Business School professor Yuko Kawamoto.
When I first met Bustle Digital Group’s Jason Wagenheim, it was right as New York City was beginning to go into lockdown. The BDG offices were empty thanks to the company’s newly instituted work-from-home policy, but it still seemed reasonable to meet in-person to learn more about BDG’s broader vision.
At the time, Wagenheim — a former Fusion and Condé Nast executive who joined BDG as chief revenue officer before becoming president in February — acknowledged that we were entering a period of uncertainty, but he sounded a note of cautious optimism for the year ahead.
Since then, of course, things have been pretty rough for the digital media industry (along with the rest of the world), with a rapid reduction in ad spending leading to layoffs, furloughs and pay cuts. BDG (which owns properties like Elite Daily, Input, Inverse, Nylon and Bustle itself) had to make its share of cuts, laying off two dozen employees, including the entire staff of The Outline.
And indeed, when I checked back in with Wagenheim, he told me that he’s anticipating a 35% decline in ad revenue for this quarter. And where he’d once hoped BDG would reach $120 or $125 million in ad revenue this year, he’s now trying to figure out “what does our company look like at $75 or $90 million?”
At the same time, he insisted that executives were determined not to completely dismantle the businesses they’d built, and to be prepared whenever advertising does come back.
We also discussed how Wagenheim handled the layoffs, how the company is reinventing its events sponsorship business and the trends he’s seeing in the ad spending that remains. You can read an edited and condensed version of our conversation below.
TechCrunch: We should probably just start with the elephant in the room, which is that you guys had to make some cuts recently. You were hardly the only ones, but do you want to talk about the thought process behind them?
Jason Wagenheim: Yeah, we ended up having to say goodbye to about 7% of our team, and we had salary reductions to the tune of 18% company-wide for those that made over $70,000. And then we had 30% pay cuts for executives.
You’ve read about all this, I’m sure. It was a really, really hard decision. We spent two weeks in planning, dozens of spreadsheets, negotiating with our investors on a plan that would keep the company moving forward, but [had to] be very sober to the reality of what was happening around us. But also most importantly for us, for our executive team, we weren’t about to disassemble the company that we spent the last 12 to 18 months building.
Despite the global panic caused by the current pandemic, startups in Latin America have continued to attract international capital. In April, Mexico’s Alphacredit, Colombia’s Frubana and Brazil’s CargoX were among those that raised particularly large rounds to support their growth during this challenging time. All three companies target markets that may have grown since the start of the pandemic, namely lending, food delivery and cargo delivery, respectively.
Alphacredit, a Mexican lending startup, raised a $100 million equity round from SoftBank and previous investors to continue to expand its digital banking services across Mexico. This round comes just months after the startup received a $125 million Series B round from SoftBank in January of this year. Alphacredit’s CEO explained that the round would enable the company to help clients during the current liquidity crisis, increasing financial inclusion in Mexico.
Meanwhile, fresh produce delivery platform Frubana raised a $25 million Series A led by GGV and Monashees, with support from SoftBank, Tiger Global and several other private investors. The startup delivers fresh produce to restaurants and small retailers directly from farmers across Colombia, and participated in Y Combinator in 2019.
Frubana has seen a boom in demand for its products since the start of the COVID-19 pandemic. People have shied away from visiting large grocery stores, preferring to visit local mom-and-pop shops that receive the startup’s deliveries. Frubana raised $12 million in mid-2019 to help scale into Mexico and Brazil after it hit a monthly growth rate of 50% in the Colombian market. The startup’s founder, Fabián Gomez, started Frubana after serving as head of Expansion at Rappi, one of Latin America’s fastest-growing startups and Colombia’s first unicorn.
Finally, Brazil’s “Uber for Trucks,” CargoX raised an $80 million Series E round led by LGT Lightstone Latin America, with contributions from Valor Capital, Goldman Sachs and Farallon Capital. The startup has quietly grown to become one of the largest players in Brazil’s inefficient trucking industry, managing a fleet of nearly 400,000 truck drivers, without owning a single truck.
This investment brings CargoX’s total capital raised to $176 million and has enabled the company to launch a $5.6 million fund for the delivery of essential goods in Brazil during COVID-19. This fund will help CargoX keep drivers employed and ensure the proper delivery of essential goods like medication, food and cleaning products.
Nubank launches $3.8 million COVID-19 fund to support clients
Brazil’s largest neobank, Nubank, announced a $3.8 million (R$20 million) fund to help its clients survive the current pandemic. The fund also relies on partnerships with iFood, Rappi, Hospital Sírio-Libanês and Zenklub to help struggling clients access food, supplies, medical care and online psychological treatment throughout the pandemic.
Nubank will use the fund to grant credits to people who cannot leave their home, providing them with discounted groceries and free delivery service. Through the partnership with Hospital Sírio-Libanês, the neobank will pay for more than 1,000 free online consultations with doctors for its home-bound clients.
Nubank has more than 20 million clients across Brazil and Mexico, where it launched in 2019. CEO David Velez stated that he believed the fund could serve tens of thousands of people in need by the end of April. Customers who wished to receive these benefits were directed to reach out to Nubank via phone, email or chat to be connected with a representative who could grant the appropriate credits.
iFood merges with Domicilios to fight Rappi in its home territory
Brazil’s largest food deliverer, iFood, recently announced a partnership with Delivery Hero to merge with their Colombian subsidiary, Domicilios. The parties did not disclose the price of the deal but have shared that iFood is now the majority shareholder in Domicilios, holding 51% of the company.
IFood operates in Mexico and Colombia, as well as Brazil, but has struggled to gain traction in Spanish-speaking Latin America. This merger makes iFood geographically the largest food delivery company in the country, with more than 12,000 restaurants in its network. However, local last-mile delivery startup Rappi continues to dominate the market, using SoftBank backing to blitzscale across the region.
By comparison, iFood has focused on developing its technology, using artificial intelligence to improve the user experience across its platforms in Mexico, Colombia and Brazil. Using these systems, iFood processes more than 26 million deliveries each month, helping restaurants across the region adapt to the new protocols caused by the virus and social-distancing policies. IFood hopes the merger will help provide a more competitive delivery service for Colombians, as well as helping boost growth for local restaurants.
Freight-forwarding startup Nuvocargo raised $5.3 million in seed funding to support the growth of its trade routes across the U.S.-Mexico border. Founded by Ecuadorian-born Deepak Chhugani in 2018, Nuvocargo has grown quickly since participating in Y Combinator, although this funding was their first institutional round. The round drew investors from both sides of the border, including Mexico’s ALLVP. Nuvocargo also marks the first investment by new partner Antonia Rojas Eing. Nuvocargo is working hard to ensure its truck drivers are safe as they continue to deliver essential supplies across the border through the pandemic.
Mexican online credit platform Kueski announced that it would lay off employees due to the economic crunch caused by COVID-19. Kueski provides microloans to more than 500,000 Mexicans and has been struggling financially as business slows during the pandemic. While Kueski did not disclose an official number, it is estimated that they laid off around 90 employees.
Latin American venture capital firm Magma Partners acquired Guadalajara-based accelerator Rampa Ventures to intensify its investments in Mexico. Rampa’s headquarters will serve as a Mexican base for Magma Partners as it continues to invest in the country, where it already has 12 startups in its portfolio. As a part of the deal, Rampa’s founder Mak Gutierrez will take over as CEO of Magma Partners’ internal agency, Magma Infrastructure, which helps startups grow and market themselves in the region.
The Brazilian direct to consumer dental tech startup SouSmile raised a $10 million Series A this month, closing the deal before investors began to show concerns about COVID-19. SouSmile uses 3D scanners to rapidly create invisible alignment devices for customers to provide them with affordable orthodontics for 60% cheaper than current models. This model has proved highly successful in Latin America, where access to orthodontics is quite low and cost-prohibitive.
Despite an impending global economic crisis, startup investment in Latin America showed signs of resilience in April. Startups in industries like delivery, healthcare and essential services have seen growth this month, and many are providing support to their customers and suppliers in this challenging time.
It is hard to predict what the world will look like for startups, let alone for anyone, by the end of next month. The resilience of Latin America’s startups provides hope that some businesses will bounce back and continue to support their customers throughout the global recovery from this pandemic.
Autotech Ventures popped on the scene three years ago with a $120 million debut fund and a plan to invest in early-stage ground transportation startups. Now, with investments in 26 startups and a handful of exits, including Xnor.ai, DeepScale and Frontier Car Group, the venture firm is back with a new, bigger fund and the same strategy.
Autotech Ventures has raised more than $150 million in its second fund with capital commitments from both financial and corporate investors, including Volvo Group Venture Capital AB, Lear, Bridgestone and Stoneridge, as well as other vehicle manufacturers, parts suppliers, repair shop chains, leasing corporations, dealership groups and trucking firms.
The new fund brings the firm to more than $270 million under management to date.
While Autotech’s funds include institutional financial investors, it has largely focused on corporation.
“The corporate LP base is a key part of our strategy as a firm and a key differentiator for us,” Daniel Hoffer, managing director at Autotech, said in a recent interview with TechCrunch. “At a high level we provide capital, transportation market intelligence and access to large corporations in the industry, including our LPs. Startups really value those connections because we can accelerate their go-to market and their distribution channels in addition to providing greater access to other forms of business development and even M&A opportunities.”
The firm typically aims for the seed and Series A sweet spot. But it occasionally will participate in Series B and later-stage funding rounds, Hoffer said. Its new $150 million-plus fund will target early-stage startups in several sectors that fall under the “ground transportation and mobility” umbrella, including connectivity, autonomy, shared-use mobility, electrification and digital enterprise applications.
Autotech Ventures does invest globally, although the majority of its investments are in the U.S. Outside of North America, the firm has a proportionate interest in Europe and Israel, according to Hoffer.
Some of its notable investments include computer vision startup DeepScale (which was snapped up by Tesla last year), Lyft, used vehicle marketplace operator Frontier Car Group, Outdoorsy, Swvl, parking app SpotHero, Volta Charging and Xnor.ai, which Apple acquired in January.
Hoffer said the firm is sensitive to the well-hyped trends, such as autonomous vehicle technology, that everybody is chasing, but it also is interested in the more niche opportunities that people might be less aware of.
The COVID-19 pandemic, which has upended the shared mobility sector, ride-hailing and public transportation, has Hoffer and his fellow Autotech venture capitalists focused on logistics and supply chain visibility — two areas that have promise in this “COVID-oriented world.”
Autotech is also interested in overlooked opportunities, such as software that enables the industry to execute recalls, and even visibility into junkyard inventory, Hoffer added. The company also sees investment opportunities in “off highway” autonomous vehicle technology ventures, such as in mining and construction.
Volkswagen plans to start selling the launch edition of its ID.3 vehicle next month to customers who placed pre-orders of the all-electric hatchback.
Customers who made reservations for the launch edition, known as ID.3 1st, will be able to order their vehicle starting June 17, according to a tweet posted by Volkswagen board member Jürgen Stackmann. Volkswagen has registered more than 37,000 reservations for the first edition, which will be limited to 30,000 units. Orders for right-hand drive markets will open in July, Stackmann said.
The announcement follows the automaker’s decision last month to restart production of the ID.3 at its Zwickau, Germany factory, which had been suspended due to the COVID-19 pandemic. Production of the ID.3 1st resumed April 23, initially with reduced capacity and slower cycle times.
The ID.3 is the first model in the company’s new all-electric ID brand and the beginning of its ambitious plan to sell 1 million electric vehicles annually by 2025. The ID.3 will only be sold in Europe. Other models under the ID brand will be sold in North America.
Our #VWID3 1st pre-bookers can order their car from 17th June, 2020 You will be contacted by your dealer shortly! In right-hand-drive markets the start of ordering should be about 4 weeks later. You will be contacted by your dealer shortly! Thanks for your patience! pic.twitter.com/fOpxB5sYu2
— Jürgen Stackmann (@jstackmann) May 5, 2020
The four-door, five-seater hatchback is as long as the VW Golf. However, thanks to the ID.3’s shorter overhangs, its wheelbase is larger, giving the vehicle a roomier interior. The special-edition version will start less than €40,000 in Germany, the company has previously said.
Volkswagen will fulfill its orders for the special launch edition of the ID.3 first. VW customers paid a deposit of €1,000 ($1,122 based on conversion last year) to pre-order the special-edition vehicle. Volkswagen said that the ID.3 1st will include free electric charging for the first year, up to a maximum of 2,000 kWh, at all public charging points connected to the Volkswagen charging app WeCharge and using the pan-European rapid charging network IONITY.
Volkswagen plans to produce the ID.3 in three configurations — the Pure, Pro and Pro S.
The ID.3 Pure is the entry-level model that will be equipped with a 45 kWh battery pack that can travel up to an estimated 260 miles under the WLTP standard. The entry-level version will be priced less than €30,000 on the German market and come standard with 18-inch steel wheels, LED headlights with automatic lighting control and LED tail-light clusters.
The ID.3 Pro has a larger battery than the Pure, increased range, more power and shorter charging times, and will start at less than €35,000 in Germany. The Pro S sits at the top of the model range and includes sportier equipment, including 19-inch Andoya wheels and “Play & Pause” design pedals.
WeWork co-founder Adam Neumann accused SoftBank Group of abusing its power in a new lawsuit filed Monday that alleges breach of contract and breach of fiduciary duty for pulling a $3 billion tender offer for WeWork shares.
The lawsuit, filed in Delaware Court of Chancery, included a motion to consolidate his case with a lawsuit filed last month by a Special Committee of WeWork’s board. Both lawsuits focus on Softbank Group and its Vision Fund’s decision to back out of a deal to buy shares of the co-working company.
SoftBank Group pulled its $3 billion tender offer for WeWork shares April 1, citing COVID-19’s impact on the business but also closing conditions not being met. Specifically, it pointed to outstanding regulatory investigations, a growing body of litigation against the company and the failure to restructure a joint venture in China as reasons to torpedo the agreement.
“SoftBank will vigorously defend itself against these meritless claims,” Rob Townsend, senior vice president and chief officer at SoftBank, said in a statement. “Under the terms of our agreement, which Adam Neumann signed, SoftBank had no obligation to complete the tender offer in which Mr. Neumann – the biggest beneficiary – sought to sell nearly $1 billion in stock.”
A deal was struck in October 2019 to buy out some of the equity held by Neumann, as well as the venture capital Benchmark Capital and many individual company employees. Neumann was set to receive almost $1 billion for his shares.
WeWork and Neumann gave control of the company to SoftBank, which increased its ownership at a significantly reduced price, according to the complaint.
“SoftBank has abused its position of power to “renege on its promise to pay [Neumann, shareholders, and hundreds of employees] for the benefits it already received,” the complaint said. The lawsuit claims that SoftBank was “secretly taking actions to undermine it” by pressuring investors not to waive certain rights and preventing the China roll-up transaction from closing.
The lawsuit further alleges that SoftBank’s financial condition influenced the company’s decision to terminate the tender offer.
The lawsuit alleges that SoftBank “abused its power” after WeWork’s special committee filed a lawsuit by insisting that only the board, which is controlled by SoftBank, could take legal action.
“In real time, Softbank Group and Softbank Vision Fund are abusing their control of WeWork in an effort to stop the Special Committee’s meritorious lawsuit from being heard,” the complaint reads.
The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every Saturday in your inbox.
Hi readers. Welcome back to The Station, a weekly newsletter dedicated to the future (and present) of transportation. I’m your host Kirsten Korosec, senior transportation reporter at TechCrunch.
While COVID-related stay-at-home orders have been extended in places like the San Francisco Bay area, officials in other counties and states in the U.S. have decided to open up for business. The rest of us are watching and waiting to see how these two experiments play out.
These opposing approaches have managed to create even more tension in the United States. If politics didn’t divide us before, how and when to open amid a health pandemic is proving to be an effective wedge.
The “how” is as important, or even more so, than the “when.” What will life and business look like? Wuhan, China, a transportation and manufacturing metropolis of 11 million people and where COVID-19 started, offers a view into one approach. (The photo below shows a worker disinfecting a bus in Wuhan on April 30.)
A staff member sprays disinfectant on a bus at a long-distance bus station in Wuhan in China’s central Hubei province on April 30, 2020, ahead of the Labor Day holiday which started May 1.
When those stay-at-home orders are finally lifted, returning to work won’t be quick or easy. Wuhan was placed on lockdown January 23. Wuhan officials eased outgoing travel restrictions April 8. While the strictest component of that lockdown has been lifted, many businesses remain closed. Didi didn’t reopen its ride-hailing services in the city until April 30.
In short, it’s going to be complex. Ford’s back-to-work playbook is a case in point. The plan includes a number of daily measures such as online health self-certifications completed before work every day, face masks and no-touch temperature scans upon arrival. But that’s just a sliver of what it will take. Check out their complete playbook.
Alrighty folks, shall we dig in? Vamos.
It was a rough week for micromobility. Over at Lyft, the company laid off 982 employees and furloughed 288 amid the COVID-19 pandemic. Lyft also permanently ceased scooter operations in Oakland, San Jose and Austin.
“We’re focusing our resources where we can have the biggest impact and best serve cities and riders,” a Lyft spokesperson said in a statement to TechCrunch. “We’re continuing to invest in our bike and scooter business, but have made the tough decision to shift resources away from three scooter markets and toward opportunities where we are set up for longer-term success.”
At Lime, the startup let go 13% of its staff while the very next day relaunching its electric scooters in Baltimore and Ogden, Utah.
“Almost overnight, our company went from being on the eve of accomplishing an unprecedented milestone — the first next-generation micromobility company to reach profitability — to one where we had to pause operations in 99% of our markets worldwide to support cities’ efforts at social distancing,” Lime CEO Brad Bao wrote in a note to employees.
Just one day after those layoffs, the company relaunched scooters in Baltimore to help support essential medical workers as well as in Ogden.
Uber is weighing its own layoffs. The Information reported that the company could cut up to 20% of its staff. That translates to more than 5,000 jobs. Those cuts could be announced in stages over the next several weeks. Meanwhile, Thuan Pham, who was hired as Uber’s chief technology officer by former CEO Travis Kalanick back in 2013, is leaving the company in three weeks, the ride-share giant revealed in an SEC filing.
— Megan Rose Dickey
Chinese electric vehicle startup Nio secured a $1 billion investment from several state-owned companies in Hefei in return for agreeing to establish headquarters in the city’s economic development hotspot and giving up a stake in one of its business units.
The injection of capital comes from several investors, including Hefei City Construction and Investment Holding Group, CMG-SDIC Capital and Anhui Provincial Emerging Industry Investment Co.
Why deal of the week? The deal alleviates some concerns about Nio’s liquidity. It also marks the latest Chinese EV startup to turn to the state as private capital has shrunk.
There is no free lunch, however. The deal itself is complex and involves some asset shuffling. Nio is transferring its core businesses in China into a new company called Nio China. The investors will get a 24.1% stake in Nio China. The shareholding structure of the parent company is unchanged.
Other deals announced this week are below. Keep in mind that just because a deal is announced that doesn’t mean it closed amid the COVID-19 pandemic. Fundraising rounds often close weeks and even months before they’re announced.
Otonomo, an automotive data services startup based in Israel, raised $46 million in a Series C funding round that included investments from SK Holdings, Avis Budget Group and Alliance Ventures. Existing investors Bessemer Venture Partners also participated. Otonomo has raised $82 million, to date.
The company has a software platform that captures and anonymizes vehicle data so it can then be used to create apps to provide services such as electric vehicle management, subscription-based fueling, parking, mapping, usage-based insurance and emergency service.
KlearNow, a startup that has built a software platform to automate the customs clearance process, raised $16 million in a Series A funding round led by GreatPoint Ventures, with additional participation from Autotech Ventures, Argean Capital and Monta Vista Capital. Ashok Krishnamurthi, managing partner at GreatPoint Ventures, will join KlearNow’s board. Daniel Hoffer from Autotech Ventures is joining as a board observer.
Skycell, a Switzerland-based startup that builds hardware and operates a logistics network designed to transport pharmaceuticals has raised $62 million.
A merger between U.K.’s JustEat and the Netherlands’ Takeaway.com has been approved by regulators. The merged company announced that it had raised €700 million ($756 million) in new outside funding in the form of new shares and convertible bonds.
Cheetah, a San Francisco-based startup that provided a wholesale delivery service and has pivoted to selling to consumers during COVID-19, raised $36 million in Series B funding.
Computer vision company Eyesight Technologies has tweaked its driver monitoring system so it can detect driver distraction and drowsiness even while wearing a medical face mask.
This “innovation of the week” gets back to my opening remarks about “how” we get back to work. Face masks will likely be a part of our world for some time.
Driver monitoring systems, which are increasingly being used by commercial fleets, are trained to detect and monitor facial features of the driver. The system will take in data points like head pose, mouth, eyes and eyelids and use the gathered visual data to detect signs of drowsiness and distraction. If the sensor can’t read one or more of these features the system could fail to detect a drowsy truck driver or inattentive transit worker.
Eyesight Technologies says that its computer vision and AI algorithms have been trained to detect distraction and drowsiness even if a driver is wearing a mask and glasses.
“We are living in unprecedented times,” Eyesight Technologies CEO David Tolub said. “Without a concrete end date to the current situation, wearing medical masks may be a reality for the foreseeable future. Eyesight Technologies is forging ahead and adapting to provide a reliable solution to help guarantee safety even under less than ideal circumstances.”
The feature, which is branded Traffic Jam Pilot, theoretically allows the vehicle to operate on its own without the human driver keeping their eyes on the road. But it’s never been commercially deployed.
Traffic Jam Pilot was supposed to be in the latest-generation A8 that debuted in 2017. It’s now 2020. What happened? Regulations, or lack of them, have been the primary scapegoat. But it’s not quite the whole story.
TechCrunch reached out to Audi to dig into why? In short, the company told us, that it’s complicated. The lack of a legal framework has raised concerns about liability. To further complicate the problem, the A8 is now progressing through its generational life cycle. And Audi was faced with continuing to pour money into the feature to adapt it without promise of framework progressing.
Here’s a few tidbits from the folks at Audi.
On the legal framework:
As of now, there is no legal framework for Level 3 automated driving. Consistently it is not possible to homologate such function anywhere in the world in a series production car. It is still very challenging to plan the exact introduction scenarios for level 3 systems, as we continuously moving in an intensive interplay between the findings from ongoing testing and the requirements that legislators and approval authorities are now defining for conditional automated driving.
On development costs:
As these clarifications and safeguards continue to take time, we also monitor economic aspects in addition. This includes development costs, which are summing up continuously. Secondly, the remaining life of the determined target model A8 combined with the forecasted installation rate and the expected market greediness in the individual countries are playing an important role.
This has brought us to the following decision: We will not see the traffic jam pilot on the road with its originally planned level 3 series function in the current model generation of the Audi A8 because our luxury sedan has already gone through a substantial part of its model life cycle.
Audi’s belief in automated driving:
We still believe in the technology of automated driving and today we know better than almost anyone when it comes to the decisive technological key factors. During the development phase we continuously learned more and more technical “unknown unknowns” and developed approaches how to handle the fact, that there will appear more.
Together with the above mentioned dependencies concerning legislation and type approval, we believe that actually it is not the right moment to deliver the function to the customer. This is our attitude of responsibility.
How Audi is moving forward:
An important part of the truth, which the industry is now facing: development of automated driving is extremely complex and cost-intensive. Our aim more than ever before is to generate the greatest possible synergies.
Within the VW group we therefore have the best preconditions. We have consolidated our efforts to further develop level 3 automated driving in the Car.Software organization. This is a new organization within the Volkswagen Group .
Former Audi managers will be head of two out of the five domains within this new organization: Thomas Müller will manage the automated driving area, and Dr. Klaus Büttner will manage the Intelligent Body&Cockpit area. Together with the specialists coming from Audi, Volkswagen and Porsche, this ensures that the current expertise in this cross-brand organization is available for the greatest possible benefit to everyone in the Volkswagen Group.
Backblaze started out as an affordable cloud backup service but over the last few years, the company has also taken its storage expertise and launched the developer-centric B2 Cloud Storage service, which promises to be significantly cheaper than similar offerings from the large cloud vendors. Pricing for B2 starts at $0.005 per GB/month. AWS S3 starts at $0.023 per GB/month.
The storage price alone isn’t going to make developers switch providers, though. There are some costs involved in supporting multiple heterogeneous systems, too.
By making B2 compatible with the S3 API, developers can now simply redirect their storage to Backblaze without the need for any extensive rewrites.
“For years, businesses have loved our astonishingly easy-to-use cloud storage for supporting
them in achieving incredible outcomes,” said Gleb Budman, the co-founder and CEO of
Backblaze. “Today we’re excited to do all the more by enabling many more businesses to use
our storage with their existing tools and workflows.”
Current B2 customers include the likes of American Public Television, Patagonia and Verizon’s Complex Networks (with Verizon being the corporate overlords of Verizon Media Group, TechCrunch’s parent company). Backblaze says it has about 100,000 total customers for its B2 service. Among the launch partners for today’s launch are Cinafilm, IBM’s Aspera file transfer and streaming service, storage specialist Quantum and cloud data management service Veeam.
“Public cloud storage has become an integral part of the post-production process. This latest enhancement makes Backblaze B2 Cloud Storage more accessible—both for us as a vendor, and for customers,” said Eric Bassier, Senior Director, Product Marketing at Quantum. “We can now use the new S3 Compatible APIs to add BackBlaze B2 to the list of StorNext compatible public cloud storage targets, taking another step toward enabling hybrid and multi-cloud workflows.”
But according to data tracker Layoffs.fyi, the cuts have affected certain job roles more than others.
Sales and customer success roles are the most affected by post-coronavirus startup layoffs, crowd-sourced data shows. Other top categories include engineering and operations roles.
Earlier this month, restaurant tech startup Toast cut 50 percent of staff. About 70% of those laid off were in the sales or customer success roles. In restaurant review platform Yelp’s layoffs, 67% of cut positions were in the same bucket.
Equity management startup Carta laid off people, too, and about 47 percent of those cuts were in the sales or customer success roles.
It is not hard to make sense of why sales and marketing roles are the most impacted. The very function of these jobs is tied to a healthy market.
Sales and new deals have slowed or halted altogether for many businesses during the COVID-19 pandemic. This is because social distancing, and overall economic weariness, might not have people spending as much as they normally would have.
The cuts filter out disproportionately to other startup ecosystems, as sales and marketing roles are often based in satellite offices.
But the cuts don’t just impact sales. In a number of cases, layoffs in one department adversely impact all departments of the company. For example, Carta’s CEO Henry Ward noted that reductions across sales, marketing, onboarding and support will likely seep into other roles as well.
“As those departments become smaller, many of the teams that support those departments like recruiting, HR, operations, and parts of R&D, have to downsize with them,” Ward wrote in a Medium post. “Even though the analysis starts with customers, it quickly starts affecting all parts of the organization. This makes sense. We exist only because our customers exist and allow us to serve them. And when our customers suffer we suffer too.”
The graph below shows a makeup of roles impacted by COVID-19 related layoffs.
Engineers aren’t immune either. According to the report, engineers historically land high, competitive salaries versus sales roles, which largely are based on commission. In some cases, it means that a company trying to dial back costs needs to look at the highest-paid roles and slim accordingly.