The carbon accounting and management platform Persefoni now has $9.7 million more in funding to support its international expansion, product development, and recruitment efforts.
The round, led by Rice Investment Group with participation from NGP ETP, the electricity, renewable and sustainability-focused investment arm of the oil and gas and power focused investment fund NGP, comes only about six months after the startup’s initial launch in August.
Founded only last January, Persefoni touts its tools to assemble, calculate, manage, and report organizational carbon footprints.
The company’s software promises real time reports on scope 1 through 3 emissions (these are emissions generated by a company’s direct operations, its purchases of power and the emissions of its suppliers).
“On the back of a banner year of net-zero commitments from governments, asset managers, and organizations the world over, we saw the venture and software investor communities wake up to what is the formation of the largest regulatory compliance software market since the introduction of Sarbanes Oxley”, said Kentaro Kawamori, CEO and co-founder of Persefoni, in a statement. “We applaud the efforts of financial regulators around the world who are implementing carbon and climate disclosure requirements. Such regulation is one of the most impactful ways to get companies accounting for, and reducing, their carbon footprint.”
Private equity firms like TPG are signing on to Persefoni’s service and Greg Lyons, a principal at NGP will be taking a seat on the company’s board of directors.
Additional investors in the company include the Carnrite Group and Sallyport Investments.
“Sallyport looks to partner with high-growth companies with an aim of making a meaningful industry impact,” said Doug Foshee, founder and owner of Sallyport Investments, in a statement.
Boosting the company’s environmental, social, and corporate governance bona fides is the addition of Robert G. Eccles, the founding chairman of the Sustainability Accounting Standards Board, to Persefoni’s board of advisors.
PlexTrac, a Boise, ID-based security service that aims to provide a unified workflow automation platform for red and blue teams, today announced that it has raised a $10 million Series A funding round led by Noro-Moseley Partners and Madrona Venture Group. StageDot0 ventures also participated in this round, which the company plans to use to build out its team and grow its platform.
With this new round, the company, which was founded in 2018, has now raised a total of $11 million, with StageDot0 leading its 2019 seed round.
“I have been on both sides of the fence, the specialist who comes in and does the assessment, produces that 300-page report and then comes back a year later to find that some of the critical issues had not been addressed at all. And not because the organization didn’t want to but because it was lost in that report,” PlexTrac CEO and President Dan DeCloss said. “These are some of the most critical findings for an entity from a risk perspective. By making it collaborative, both red and blue teams are united on the same goal we all share, to protect the network and assets.”
With an extensive career in security that included time as a penetration tester for Veracode and the Mayo Clinic, as well as senior information security advisor for Anthem, among other roles, DeCloss has quite a bit of first-hand experience that led him to found PlexTrac. Specifically, he believes that it’s important to break down the wall between offense-focused red teams and defense-centric blue teams.
“Historically there has been more of the cloak and dagger relationship but those walls are breaking down– and rightfully so, there isn’t that much of that mentality today– people recognize they are on the same mission whether they are internal security team or an external team,” he said. “With the PlexTrac platform the red and blue teams have a better view into the other teams’ tactics and techniques – and it makes the whole process into an educational exercise for everyone.”
At its core, PlexTrac makes it easier for security teams to produce their reports — and hence free them up to actually focus on ‘real’ security work. To do so, the service integrates with most of the popular scanners like Qualys, and Veracode, but also tools like ServiceNow and Jira in order to help teams coordinate their workflows. All the data flows into real-time reports that then help teams monitor their security posture. The service also features a dedicated tool, WriteupsDB, for managing reusable write-ups to help teams deliver consistent reports for a variety of audiences.
“Current tools for planning, executing, and reporting on security testing workflows are either nonexistent (manual reporting, spreadsheets, documents, etc…) or exist as largely incomplete features of legacy platforms,” Madrona’s S. Somasegar and Chris Picardo write in today’s announcement. “The pain point for security teams is real and PlexTrac is able to streamline their workflows, save time, and greatly improve output quality. These teams are on the leading edge of attempting to find and exploit vulnerabilities (red teams) and defend and/or eliminate threats (blue teams).”
Facebook confirmed it’s testing a video speed-dating app called Sparked, after the app’s website was spotted by The Verge. Unlike dating app giants such as Tinder, Sparked users don’t swipe on people they like or direct message others. Instead, they cycle through a series of short video dates during an event to make connections with others. The product itself is being developed by Facebook’s internal R&D group, the NPE Team, but had not been officially announced.
“Sparked is an early experiment by New Product Experimentation,” a spokesperson for Facebook’s NPE Team confirmed to TechCrunch. “We’re exploring how video-first speed dating can help people find love online.”
They also characterized the app as undergoing a “small, external beta test” designed to generate insights about how video dating could work, in order to improve people’s experiences with Facebook products. The app is not currently live on app stores, only the web.
Sparked is, however, preparing to test the experience at a Chicago Date Night event on Wednesday, The Verge’s report noted.
Image Credits: Facebook
During the sign-up process, Sparked tells users to “be kind,” “keep this a safe space,” and “show up.” A walkthrough of how the app also works explains that participants will meet face to face during a series of 4-minute video dates, which they can then follow up with a 10-minute date if all goes well. They can additionally choose to exchange contact info, like phone numbers, emails, or Instagram handles.
Facebook, of course, already offers a dating app product, Facebook Dating.
That experience, which takes place inside Facebook itself, first launched in 2018 outside the U.S., and then arrived in the U.S. the following year. In the early days of the pandemic, Facebook announced it would roll out a sort of virtual dating experience that leveraged Messenger for video chats — a move came at a time when many other dating apps in the market also turned to video to serve users under lockdowns. These video experiences could potentially compete with Sparked, unless the new product’s goal is to become another option inside Facebook Dating itself.
Image Credits: Facebook
Despite the potential reach, Facebook’s success in the dating market is not guaranteed, some analysts have warned. People don’t think of Facebook as a place to go meet partners, and the dating product today is still separated from the main Facebook app for privacy purposes. That means it can’t fully leverage Facebook’s network effects to gain traction, as users in this case may not want their friends and family to know about their dating plans.
Facebook’s competition in dating is fierce, too. Even the pandemic didn’t slow down the dating app giants, like Match Group or newly IPO’d Bumble. Tinder’s direct revenues increased 18% year-over-year to $1.4 billion in 2020, Match Group reported, for instance. Direct revenues from the company’s non-Tinder brands collectively increased 16%. And Bumble topped its revenue estimates in its first quarter as a public company, pulling in $165.6 million in the fourth quarter.
Image Credits: Facebook
Facebook, on the other hand, has remained fairly quiet about its dating efforts. Though the company cited over 1.5 billion matches in the 20 countries it’s live, a “match” doesn’t indicate a successful pairing — in fact, that sort of result may not be measured. But it’s early days for the product, which only rolled out to European markets this past fall.
The NPE Team’s experiment in speed dating could ultimately help to inform Facebook of what sort of new experiences a dating app user may want to use, and how.
The company didn’t say if or when Sparked would roll out more broadly.
The crypto industry as a whole has seen a momentous year of growth, heavily spurred on by the entrance of institutional investors adopting bitcoin due to its store of value properties. The 2020 spike bitcoin experienced was also accelerated by its global adoption as the number of global cryptocurrency users surpassed 100 million in Q3 2020.
For Luno, a U.K.-based crypto company founded by Marcus Swanepoel and Timothy Stranex in 2013, it grew to 6 million customers from January 2020 to January 2021. However, that number has since gone up to 7 million. Today the company, headquartered in London, has nearly 400 employees across London, South Africa, Malaysia, Indonesia, Nigeria and Singapore, with customers in 40 countries globally.
According to CEO Swanepoel, Luno’s numbers have been increasing month-on-month over the last seven years. However, this is the first time it is observing an acceleration of this magnitude.
There are a couple of reasons for Luno’s surge in numbers (like any other crypto exchange startup). Generally, despite talks of bitcoin being used in everyday life by crypto enthusiasts and interests from institutional entrants like BNY Mellon, Mastercard and Tesla, it is a long shot before becoming mainstream.
For now, crypto mainly serves investment purposes. This singular factor has particularly made it very popular with Africans — a demographic that has been a major part of Luno’s growth and the huge traction it is witnessing.
Last year, the company surveyed the markets in which it currently operates. It featured 15,000 respondents from South Africa, U.K., France, Italy, Indonesia, Malaysia and Nigeria; the answers helped Luno understand how the pandemic influenced attitudes towards the current financial system. According to the survey, 54% of Africans were ready to adopt a single global digital currency, compared to 41% for Asia and 35% for Europe.
Africa’s dominance also shows in its numbers. Out of the 7 million customers it has globally, 4.7 million people are in Africa. This number was 2.3 million in January 2020. Luno’s app installs across the continent have increased by 271% within this time frame, and trading volumes skyrocketed 12x, from $555 million to $7 billion. For context, Luno did $8.3 billion in total trading volume.
But a large part of this growth is down to Luno’s early play in the market. Over the last few years, infrastructure in parts of the world that could not previously support the crypto market has improved substantially. Luno has played a vital role as one of the first platforms to improve the crypto marketplace experience by including local currencies. It also helped to lay the groundwork for educating people on digital currencies.
“The last time bitcoin went up as it did during the past year was in 2017 and 2018, and it was mostly driven by retail, but it was still very difficult to buy crypto. There were trust issues; it would take days to get your account verified and even set up a wallet,” Swanepoel told TechCrunch. “Now, over the last three years, companies like ours, especially in Africa, have built up this infrastructure, KYCs, new payment methods, customer experience and support. The experience is much better and education levels are a lot higher. To me, I think that’s played a large role in crypto adoption in the continent.”
In September last year, Luno got acquired by Digital Currency Group (DCG), an investment firm that builds, buys and invests in blockchain companies. Some of its portfolio companies include Coindesk, Genesis and Grayscale Investments. Before acquiring Luno, BCG first invested in the company’s seed round in 2014. Then last year, Swanepoel said he saw the opportunity to take Luno to a larger scale after noticing the immense growth and adoption on its platform.
“The first five to six years for us was on a small scale and now, we want to go big. So it helps to have a global platform like DCG to do it from because they have large amounts of capital and are committed to investing in Africa as well as outside the continent,” he remarked.
The CEO adds that DCG has more visibility on the crypto industry and trends. The acquisition was simply for Luno to leverage DCG’s insights and stay ahead of the curve, which looks to have paid off. Since the acquisition, Luno has seen the number of active users increase by 167%. As of January, the average user held more than $7,000 in their wallet, up 56% from December 2020.
Nothing lasts forever, but if the crypto market bull run is anything to go by, crypto isn’t the fad people once thought it was. In Q1 2021, companies like Coinbase (going public Wednesday) and Robinhood experienced monster numbers showing strong growth projections. For Luno, it expects to continue growing exponentially, a trajectory that sets the company on track to reach 1 billion customers by 2030.
The race is on for companies building e-commerce empires by rolling up smaller, promising businesses that sell via Amazon and other marketplaces and growing by using some economies of scale to operate them as one. In the latest development, Berlin Brands Group has raised $240 million that it says it will be using to acquire smaller but promising enterprises in Europe and North America — specifically the U.S. — that are already making between $1 million and $100 million in sales via marketplaces like Amazon.
The funding is coming in the form of debt, not equity, and it is coming specifically from UniCredit, Deutsche Bank and Commerzbank, BBG founder and CEO Peter Chaljawski said in an interview. BBG is profitable and earlier this year it committed more than $300 million off its balance sheet for buying up and operating companies, and so with this debt round, it now has $540 million for that purpose.
“We’re in a wonderful situation with a proven business model, and this is the cheapest money you could get,” he said of the decision to go for debt, a choice often made by startups that are in capital-intensive modes but either reluctant or do not need to give up equity to raise capital to scale if they are generating cash. In the case of BBG it’s the latter, since the company is profitable. “This is better than equity. BBG does not have any debt as of 2020, and we had cash on hand for our first acquisitions, 20 brands that we bought in cash from our balance sheet. Now we want to accelerate that even more.”
BBG has to date mostly built its business around starting up and scaling its own in-house brands that sell on Amazon and elsewhere — starting first with home audio equipment, coming out of Chaljawski’s own interests in sound technology from a previous life as a budding dance music DJ. Its brands include Klarstein (kitchen appliances), auna (home electronics and music equipment), Capital Sports (home fitness) and blumfeldt (garden).
In a big move to scale and build out what it’s established itself, last year BBG shifted over to the roll-up model: leveraging a more buying power to cut better deals with manufacturers and other suppliers, consolidating some of the other functions like marketing, and providing a more comprehensive set of analytics around what is selling best, who is buying, how best to market an item, and more. It says it has 1.3 million square feet of warehouse space in Europe, Asia and the U.S. and is one of the biggest Amazon sellers in Europe today.
The basic idea of rolling up businesses that sell on the Amazon platform with FBA (Fulfillment by Amazon) has been around for years in fact, but the notable and more recent shift is that it has taken on a startup profile in part because of how some of the latest entrants are leveraging big data analytics, the latest innovations in manufacturing and logistics technology and a founder-led, e-commerce ethos to grow the model.
“Without data, you would go nowhere in this business,” Chaljawski said. “But on top of that, there is something you can’t pull from market data — a toolbox of manufacturing and engineering expertise that we use to evaluate products.” He says that BBG’s data scientists build algorithms that millions of products, and hundreds of thousands of sellers, to produce the data that it uses both to source potential acquisitions and to run the business.
U.S. players like Thrasio — which itself closed a $1.2 billion Series C for the same purposes: rolling up and scaling — have led the charge. But in recent months we’ve seen a number of others also move into the space, buoyed by hundreds of millions of dollars in funding from investors very keen to ride the e-commerce wave and the vision of tapping into some of the economies of scale and the marketplace model that have been such a juggernaut for Amazon.
It’s a two-sided marketplace, and Amazon has focused primarily on earning money from operating the marketplace itself and sales to consumers, so that leaves a huge opportunity on the table for someone else (or as it happens, many others) to tackle the opportunity to address the needs and services of the other side of that marketplace: the sellers.
In addition to BBG and Thrasio, others in the same space include Branded, which launched its own roll-up business on $150 million in funding earlier this year; SellerX, Heyday, Heroes, Perch, among several others. Even removing the very-highly capitalized Thrasio and BBG from the equation, these companies have collectively raised or committed from their own balance sheets hundreds of millions of dollars to buy up small but promising third-party merchants.
If that sounds like a crowded market, well, it probably is. These are also startups, after all, and so the chances that some of these roll-up consolidators will not be that skilled at running multiple companies — with their disparate supply chains, customer bases, replacement cycles and marketing strategies — are as risky as in any other area of e-commerce startup interest.
On the other hand, though, there are a lot of opportunities to play for here.
By one estimate, there are about 5 million third-party sellers on Amazon today, a number that appears to be growing exponentially, with more than 1 million sellers joining the platform in 2020 alone. Out of those, Thrasio estimates that there are probably 50,000 businesses selling on the Amazon platform with FBA (Fulfillment by Amazon) that are making $1 million or more per year in revenues.
We have pointed out before that within that bigger number of merchants, there are a huge amount of clones and companies of questionable quality. What is interesting is that there are distinct companies, built around more originality and flair, swimming in that sea: some of them have broken through and floated, while others that have not.
So for a company like BBG, the opportunity lies in the fact that for many of these smaller but promising merchants, they have not been built with longer-term growth visions in place. The merchants might not be prepared for the kind of scaling, investment or operational commitment that would need to be made to keep their businesses going, or they simply don’t have the appetite for it. BBG’s selling point — as it is with others in this space — is that they do.
And BBG’s added pitch is that they can help open another door, to Europe. In the region, Amazon on average has about a 10% market share of marketplaces, BBG estimates, with regional players accounting for more marketplace activity than in the U.S. BBG not only has the links into selling on these other marketplaces, but the promise is that it can help improve how a brand will sell on Amazon itself in the region, given its traction in the market already. Conversely, it hopes to do the same for European brands by giving them a better window into selling in the U.S.
Looking ahead, BBG may well tap an equity round in the near future to bring on investors to shape its own growth and set a valuation for the company, Chaljawski said. He also is realistic about the profusion of companies like his, and is “sure” there will be some casualties down the road. He also believes that we may start to see some emerge around specific verticals as an alternative.
“Yes, I’m sure consolidation will happen, but I also think that we’ll see some specialization, with roll-ups focusing on one vertical or another. I think it will be a mix,” he said.
A month ago, Coupang arrived on Wall Street with a bang. The South Korean e-commerce giant — buoyed by $12 billion in 2020 revenue — raised $4.55 billion in its IPO and hit a valuation as high as $109 billion. It is the biggest U.S. IPO of the year so far, and the largest from an Asian company since Alibaba’s.
But long before founder Bom Kim rang the bell, I knew him as a fellow founder on the hunt for a good idea. We stayed in touch as he formed his vision for what would become Coupang, and I built it alongside him as an investor and board member.
As a board member, I’ve observed a brief quiet period following the IPO. But now I want to share how exactly our paths intersected, largely because Bom exemplifies what founders should aspire to and should seek: big risks, dogged determination, and obsessive responsiveness to the market.
Bom fearlessly turned down an acquisition offer from then-market-leader Groupon, ferociously learned what he didn’t know, made a daring pivot even after becoming a billion-dollar company, and iteratively built a vision for end-to-end market dominance.
In 2008, I met Bom while playing a weekend game of pickup basketball at Stuyvesant High School. We realized we had a mutual acquaintance through my recently-sold startup, Community Connect Inc. He told me about the magazine he had sold and his search for a next move. So we agreed to meet up for lunch and go over some of his ideas.
To be honest, I don’t remember any of those early ideas, probably because they weren’t very good. But I really liked Bom. Even as I was crapping on his ideas, I could tell he was sharp from how he processed my feedback. It was obvious he was super smart and definitely worth keeping in touch with, which we continued to do even after he relocated to go to HBS.
I soon began investing in and incubating businesses, starting mostly with my own capital. When I got a call from an executive recruiter working for a company in Chicago called Groupon — who told me they were at a $50 million run rate in only a few months — I became fascinated with their model and started talking to some of the investors, former employees, and merchants.
Inspired, and as a new parent, I decided to launch a similar daily-deal business for families: Instead of skydiving and go-kart racing, we offered deals on kids’ music classes and birthday party venues. While I was working on this idea, John Ason, an angel investor in Diapers.com, said I should meet with the founder and CEO Marc Lore. By the end of the meeting, Marc and I etched a partnership to launch DoodleDeals.com co-branded with Diapers.com. The first deal did over $70,000 — great start.
I’ve observed a brief quiet period following the IPO. But now I want to share how exactly our paths intersected, largely because Bom exemplifies what founders should aspire to and should seek: big risks, dogged determination, and obsessive responsiveness to the market.
All that time, I kept in touch with Bom. In February 2010, we were catching up over lunch at the Union Square Ippudo, and he asked if I had heard of Buywithme, a Boston-based Groupon clone. He hadn’t yet heard about Groupon, so I explained the business model and shared the numbers. He thought something similar might transfer well to South Korea, where he was born and his parents still lived.
This kind of conversation is exactly why I love working with founders early, even before the idea forms: You learn a lot about them as they explore, wrestle with uncertainty, and eventually build conviction on a business they plan to spend the next decade-plus building. Ultimately, success comes down to founders’ belief in themselves; when you develop the same belief in them as an investor, it is pretty magical. I was starting to really believe in Bom.
I’m not Korean — I am ethnically Chinese — so Bom put together slides on the Korean market and why it was perfect for the daily-deal model. In short: a very dense population that’s incredibly online. Image Credits: Ben Sun
I told Bom he should drop out of business school and do this. He said, “You don’t think I can wait until I graduate?” I responded, “No way! It will be over by then!”
First-mover advantage is real in a business like this, and it didn’t take Bom long to see that. He raised a small $1.3 million seed round. I invested, joined the board. Because of my knowledge of the deals market and my entrepreneurial experience, Bom asked me to get hands-on in Korea — not at all typical for an investor or even a board member, but I think of myself as a builder and not just a backer, and this is how I wanted to operate as an investor.
Once he realized time was of the essence, Bom was heads down. For context, he was engaged to his longtime girlfriend, Nancy, who also went to Harvard undergrad and was a successful lawyer. Imagine telling your fiancée, “Honey, I am dropping out of business school, moving to Korea to start a company. I will be back for the wedding. Not sure if I will ever be coming back to the U.S.”
I emailed Bom, saying: “Bom — honestly as a friend. Enjoy your wedding. It is a real blessing that your fiancée is being so supportive of you doing this. Launching a site a few weeks before the wedding is going to be way too distracting and she won’t feel like your heart is in it. Launching a few weeks later is not going to make or break this business. Trust me.”
Bom didn’t listen. He launched Coupang in August 2010, two weeks before the wedding. He flew back to Boston, got married, and — running on basically no sleep — sneaked out for a 20-minute nap in the middle of his reception. Right after the wedding, he flew back to Seoul. Nancy has to be one of the most supportive and understanding partners I have ever seen. They are now married and have two kids.
Cybersecurity training startup Hack The Box, which emerged originally from Greece, has raised a Series A investment round of $10.6 million, led by Paladin Capital Group and joined by Osage University Partners, Brighteye Ventures, and existing investors Marathon Venture Capital. It will use the funding to expand. Most recently it launched Hack The Box Academy.
Started in 2017, Hack The Box specializes in using ‘ethical hacking’ to train cybersecurity techniques. Users are given challenges to “attack” virtual vulnerable labs in a simulated, gamified, and test environment. This approach has garnered over 500,000 platform members, from beginners to experts, and brought in around 800 organizations (such as governments, Fortune 500 companies, and academic institutions) to improve their cyber-adversarial knowledge.
Haris Pylarinos, Hack The Box Co-Founder and CEO said: “Everything we do is geared around creating a safer Internet by empowering corporate teams and individuals to create unbreakable systems.”
Gibb Witham, Senior Vice President, Paladin Capital Group commented: “We’re excited to be backing Hack The Box at this inflection point in their growth as organizations recognize the increasing importance of an adversarial security practice to combat constantly evolving cyber attacks.”
Hack The Box is using a SaaS business model. In the B2C market it provides monthly and annual subscriptions that provide unrestricted access to the training content and in the B2B market, it provides bi-annual and annual licenses which provide access to dedicated adversarial training environments with value-added admin capabilities.
The details for Ant’s overhaul have arrived. Ant Group, the fintech affiliate of Alibaba controlled by Jack Ma, will become a financial holding company that will bring more regulatory scrutiny over how it lends and generates profits, China’s central bank said on Monday.
Ant started as an online payments processor for Alibaba marketplaces and has over time blossomed into an empire of payments, lending, wealth management and insurance. Its encroachment onto the existing financial industry had not been particularly welcome in China, and a few years ago, the giant began positioning itself as a “technology provider” rather than one competing with big banks and conventional wealth managers.
Despite these efforts, the government wanted to further rein in the fintech giant.
As part of what the government dubs a “rectification plan” for Ant, of which initial public offering was called off in November as regulators sought to curb the power of the country’s internet giants, Ant will “correct its anti-competitive practices.” That entails giving consumers more options in payment methods and removing unscrupulous tricks that lure users into getting loans.
Ant, which has over 1 billion annual users around the world, most of whom are in China, is also asked to end its monopoly on user data and ensure the information safety of individuals and the nation.
As a financial holding company, Ant will also need to control the liquidity risk of its financial products and shrink the size of its money-market fund, one of the world’s biggest.
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Before jump into micromobbin’ and the rest, I wanted to point you to another Extra Crunch piece, this time a deep dive into second-life batteries. As Aria Alamalhodaei reports:
The average electric vehicle lithium-ion battery can retain up to 70% of its charging capacity after being removed. The business proposition for second-life batteries is therefore intuitive: Before sending the battery to a recycler, automakers can potentially generate additional revenue by putting it to use in another application or selling it to a third party.
The upshot: automakers are starting to make moves.
Keep an eye out for Extra Crunch stories on the business of hydrogen, software in micromobility and voice in cars.
One last housekeeping item. The folks at Elemental Excelerator are looking to scale more climate technologies and invest in its 10th cohort of companies. If you’re not familiar, Elemental is a commercial catalyst for growth-stage companies in energy, mobility, agriculture, water, the circular economy, and beyond. (TechCrunch just recently wrote about ChargerHelp!, which is going through the Elemental Excelerator incubator)
Btw, my email inbox is always open. Email me at firstname.lastname@example.org to share thoughts, criticisms, offer up opinions or tips. You can also send a direct message to me at Twitter — @kirstenkorosec.
Transit authorities in New York City and London have remained steadfast in their refusal to announce the winners of their respective e-scooter pilots, which both should have started weeks ago. But a peek at company websites, LinkedIns and job boards reveal who is at least preparing to enter the last two big frontiers of dockless, shared micromobility.
I’m betting on Lime securing both cities, which feels more like an educated guess given the company’s reach. Dott looks like it’ll be opening up in London; Superpedestrian, and maybe Spin, in NYC. Bird and Voi also have job listings in both cities, but the evidence backing concession wins is not conclusive based on listings alone.
Speaking of Lime, the company rolled out its first e-mopeds in Washington, D.C. and Paris over the past two weeks. This launch makes D.C. the ultimate Lime-stan, being the first city to host all three modes of the company’s transport options which also include e-bikes and e-scooters. City officials and Lime agreed that riders will have to snap a mandatory helmet selfie to be able to take off.
Lime isn’t the only shared micromobility company that’s eyeing expansion. Dutch e-scooter startup Go Sharing is spreading its wings outside the Netherlands with a launch in Vienna, and Berlin-based Tier has acquired Budapest’s app maker Makery. It’s not clear how much Tier paid for the company, but Makery will serve as Tier’s tech hub in Central and Eastern Europe as the company plans expansion later this year.
It seems like the dockless rideshare industry is on its way up, but let us not forget how many stars need to align to make it work. After weeks of delays, U.K.-based Beryl canceled its launch of e-scooters in Staten Island, citing logistical and supply chain issues due to Covid.
China’s Niu appears to be doing well, reporting a surge in electric scooter sales in the first quarter, up 273% to almost 150,000 e-scooters. On Tuesday, Niu launched four new vehicles, including a new electric kick scooter that will be sold in international markets starting at $599.
While we’re discussing sexy new rides, check out Segway’s futuristic-looking e-motorcycle. (No, I didn’t think “sexy” and “Segway” could exist in the same sentence either, yet here we are.)
This particular sports bike is a reminder that the company has branched out into the world of cool electric mobility since its 2015 acquisition by Ninebot. The Apex H2 is definitely not the stuff of mall cops and tour groups. What’s more, the new motorcycle is powered by a combination of hydrogen and electricity — essentially hydrogen stored in tanks will be converted into electricity and then stored in a battery. The only byproduct would be water vapor released from the tailpipe.
Many policy-focused armchair experts have discussed the potential benefits of cities intertwining with micromobility and rideshare companies to encourage a post-Covid public transit recovery. Sydney, Australia might be the first city to give it a shot.
Starting mid-2021, up to 10,000 riders will be able to use their digital Opal Card to pay for an Uber, a fixed fare Ingogo taxi trip or a Lime bike journey. If they catch public transport within an hour of those rides, they’ll get up to a $3 credit on their Opal account.
— Rebecca Bellan
OK, so it’s not a done deal yet, but it has the makings of being so large that I just had to make it ‘deal of the week.’
Citing unnamed sources, Bloomberg reported that Southeast Asian ride-hailing and delivery giant Grab Holdings has attracted backing from T. Rowe Price Group Inc. and Temasek Holdings Pte for its planned merger with a blank-check company.
Grab isn’t just a ride-hailing app anymore. It has added all kinds of services to its app such as financial services and food delivery. The value of that app might explain the number of firms that are apparently lining up to join a private investment in public equity offering (PIPE) to support Grab’s combination with Altimeter Growth Corp. BlackRock Inc. is one of those firms that is in talks to participate in the PIPE, which could raise about $4 billion.
The upshot? The deal could value Grab at more than $34 billion. That would make it the biggest SPAC ever.
I’m going to call it. Peak SPAC is here.
Other deals that got my attention this week …
Elior, the corporate catering company has acquired French delivery startup Nestor for an undisclosed amount.
Kavak, the Mexican startup focused on the used car market in Mexico and Argentina, raise a Series D round of $485 million, which now values the company at $4 billion. Kavak is now one of the top five highest-valued startups in Latin America.
Kolonial, a startup based out of Oslo that offers same-day or next-day delivery of food, meal kits and home essentials, has raised €223 million ($265 million) in an equity round of funding. Along with that, the company — profitable as of this year — is rebranding to Oda and plans to use the money (and new name) to expand to more markets, starting first with Finland and then Germany in 2022, Ingrid Lunden reports.
LanzaJet, the company commercializing a process to convert alcohol into jet fuel, gained energy giant Shell as a strategic investor. All Nippon Airways, Suncor Energy, Mitsui and British Airways are also investors. The funding amount wasn’t disclosed. LanzaJet is a spinoff from LanzaTech, one of the last surviving climate tech startups from the first cleantech boom that’s still privately held.
Nuvocargo, a digital logistics platform for cross-border trade, raised a $12 million Series A funding round led by QED Investors and participation from David Velez, Michael Ronen, Raymond Tonsing, FJ Labs and Clocktower. Previous investors NFX and ALLVP also put money into this round.
QuantumScape Corporation said it successfully met the technical milestone that was a condition to close the additional $100 million investment by VW Group. The milestone required Volkswagen to successfully test the latest generation of QuantumScape’s solid-state lithium-metal cells in their labs in Germany. This will be the second and final closing under the May 14, 2020 stock purchase agreement between VW and QuantumScape that provided for a total $200 million investment. (I missed this one last week).
Spinny, the India-based online used car marketplace, raised $65 million in its Series C financing round led by Silicon Valley-headquartered venture firm General Catalyst. Feroz Dewan’s Arena Holdings, Think Investments and existing investors Fundamentum Partnership — backed by tech veterans Nandan Nilekani and Sanjeev Aggarwal — and Elevation Capital participated as well.
Swyft, a company that helps retailers compete with Amazon by offering same-day delivery, raised $17.5 million in a Series A round co-led by Inovia Capital and Forerunner Ventures, with participation from Shopify and existing investors Golden Ventures and Trucks VC.
Some interesting items this week.
Uber announced a $250 million stimulus to try to entice drivers back after the pandemic. As vaccinations increase, so do Uber bookings, but there are not enough drivers to meet demand after many stopped working over the last year. This stimulus will see existing, returning and new drivers receive bonuses.
Apple CEO Tim Cook hinted heavily at the autonomous future of its Apple car, during an interview on the “Sway” podcast with Kara Swisher.
Aurora CEO Chris Urmson, who is the new chair of the World Economic Forum’s Global AV Council, led a discussion with industry and government leaders about the benefits of self-driving trucking – safety, service, and sustainability – and how self-driving will change our workforce. Urmson later shared his views in a post on LinkedIn. Uber CEO and Aurora Board member Dara Khosrowshahi was the previous chair of this council.
Verizon and Honda announced a partnership on Thursday to test 5G and mobile edge computing to make driving safer. We’re a long way away from even having a viable 5G network, let alone cars that can operate on it. But eventually, they hope to apply this kind of tech to self-driving vehicles. Side note: This isn’t Verizon’s first 5G-meets-MEC-and-vehicle rodeo. The company has been testing at Mcity since 2019. Last November, Renovo Auto (which Verizon is backing) released a video demonstrating how 5G and MEC coupled with its automotive data platform indexes and filters Advanced Driver Assistance System vehicle-data in near-real time. The tests were also conducted at Mcity.
GM is adding an electric Chevrolet Silverado pickup truck to its lineup, as the automaker pushes to deliver more than 1 million electric vehicles globally by 2025. The Chevrolet Silverado electric full-size pickup will be based on the automaker’s Ultium battery platform and GM estimates the range will be more than 400 miles on a full charge. GM is targeting both the consumer and commercial market with this new electric pickup.
Polestar set a “moonshot goal” to create the first climate-neutral car by 2030. It’s a goal that won’t achieved by widely practiced offsetting measures, such as planting trees. Instead, Polestar aims to rethink every piece of the supply chain, from materials sourcing through to manufacturing, and even by making the vehicle more energy efficient.
Wildcat Discovery Technologies, a technology company developing new battery materials, has gained Peter Lamp, general manager of the battery cell technology group at BMW AG, as a board member.
Wisk Aero, the air mobility company borne out of a joint venture between Kitty Hawk and Boeing, filed a lawsuit against Archer Aviation alleging patent infringement and trade secret misappropriation.
GM confirmed that its idling more plants and extending shutdowns at other facilities in North America due to a continued shortage of semiconductor chips that are used to control myriad operations in vehicles, including the infotainment, power steering and brake systems. Eight assembly plants are affected by the temporary closures.
Of course, GM is hardly the only automaker to be impacted by the global chip shortage. Competitor Ford has also had to temporarily pause production at some factories, while other automakers such as Subaru and Stellantis (the automaker formed by the 2021 merger of Fiat Chrysler Automobiles and Groupe PSA).
The TC Sessions: Mobility 2021 event will be virtual again. But that hasn’t stopped us from putting together a stellar list of participants. We just starting to announce who will be on our virtual stage June 9.
Here’s one biggie: we’re bringing Joby Aviation founder JoeBen Bevirt and famed investor and LinkedIn co-founder Reid Hoffman together on stage. If my recent interview with those two provides an indication of what’s to come, it should be eye opening.
Bevirt and Hoffman will discuss building a startup — and keeping it secret while raising funds — the future of flight and, of course, SPACs. If you recall, Joby announced in February that it would become a publicly traded company through a merger with Reinvent Technology Partners, a special purpose acquisition company formed by Hoffman and Zynga founder Mark Pincus.
“We approach it (SPACs) as venture capital at scale,” Hoffman told TechCrunch in a February interview. So it’s not a ‘this-year thing,’ it’s a next three years, next five years, next 10 years.”
And yes, Hoffman believes SPACs are here to stay. Although we plan to check in on his stance in June. “I think that it’s valuable to the market and valuable to society to have multiple, different paths by which companies can go public,” Hoffman said.
Other guests to TC Sessions: Mobility 2021, includes investors Clara Brenner of Urban Innovation Fund, Quin Garcia of Autotech Ventures and Rachel Holt of Construct Capital, as well as Starship Technologies co-founder and CEO/CTO Ahti Heinla. Stay tuned for more announcements in the weeks leading up to the event.
Chinese regulators have hit Alibaba with a record fine of 18 billion yuan (about $2.75 billion) for violating anti-monopoly rules as the country seeks to rein in the power of its largest internet conglomerates.
In November, China proposed sweeping antitrust regulations targeting its interent economy. In late December, the State Administration for Market Regulation said it had launched an antitrust probe into Alibaba, weeks after the authorities called off the initial public offering of Ant Group, the financial affiliate of Alibaba.
SAMR, the country’s top market regulator, said on Saturday it had determined that Alibaba had been “abusing market dominance” since 2015 by forcing its Chinese merchants to sell exclusively on one e-commerce platform instead of letting them choose freely among different services, such as Pinduoduo and JD.com. Vendors are often pressured to side with Alibaba to take advantage of its enormous user base.
Since late 2020, a clutch of internet giants including Tencent and Alibaba have been hit with various fines for violating anti-competition practices, for instance, failing to clear past acquisitions with regulators. The meager sums of these penalties were symbolic at best compared to the benefits the tech firms reap from their market concentration. No companies have been told to break up their empires and users still have to hop between different super-apps that block each other off.
In recent weeks, however, there are signs that China’s antitrust authorities are getting more serious. The latest fine on Alibaba is equivalent to 4% of the company’s revenue generated in the calendar year of 2019 in China.
“Today, we received the Administrative Penalty Decision issued by the State Administration for Market Regulation of the People’s Republic of China,” Alibaba said in a statement. “We accept the penalty with sincerity and will ensure our compliance with determination. To serve our responsibility to society, we will operate in accordance with the law with utmost diligence, continue to strengthen our compliance systems and build on growth through innovation.”
The thick walls that tech companies build against each other are starting to break down, too. Alibaba has submitted an application to have its shopping deals app run on WeChat’s mini program platform, Wang Hai, an Alibaba executive, recently confirmed.
For years, Alibaba services have been absent from Tencent’s sprawling lite app ecosystem, which now features millions of third-party services. Vice versa, WeChat is notably missing from Alibaba’s online marketplaces as a payment method. If approved, the WeChat-powered Alibaba mini app would break with precedent of the pair’s long stand-off.
Digital mortgage lender Better.com has raised a $500 million round from Japanese investment conglomerate SoftBank that values the company at $6 billion.
The financing is notable for a few reasons. For one, that new $6 billion valuation is up 50% from the $4 billion it was valued at last November when it raised $200 million in Series D financing. It’s also up tenfold from its $600 million valuation at the time of its Series C raise in August 2019.
Secondly, it’s further proof that mortgage — a traditionally “unsexy” industry that has long been in need of disruption — is officially hot. For all its controversy, when SoftBank invests, people pay attention.
The COVID-19 pandemic and historically low mortgage rates fueled acceleration in the online lending space in a way that no one could have anticipated. That, combined with the general fervor in venture funding, means it’s not a big surprise that Better.com has raised $700 million in just a matter of months.
The investment brings Better.com’s total funding raised to over $900 million since its 2014 inception. Other backers include Goldman Sachs, Kleiner Perkins, American Express, Activant Capital and Citi, among others.
According to The Wall Street Journal, SoftBank is buying shares from Better’s existing investors, and agreed to give all of its voting rights to CEO and founder Vishal Garg “in a sign of its eagerness” to invest in the company.
During a one-on-one interview at LendIt Fintech’s USA 2020 virtual event in October, Garg told me that an IPO was definitely in the works.
“We’ll do it when it’s right,” he said. “One of the core tenets of American capitalism is the ability for your customers to buy your stock.”
And in February, Bloomberg reported that the startup had tapped Morgan Stanley and Bank of America Corp. for a planned initial public offering in the U.S. But there’s been no further word since. It’s not unusual for companies to raise large sums before an IPO. Affirm did it last year, for example.
Also last October, Varg told me that before the pandemic, Better was processing about $1.2 billion a month in loans. But as of October 2020, it was funding over $2.5 billion per month, and had gone from 1,500 staffers to about 4,000 worldwide.
“When the pandemic started we were doing less than sort of like $50 million a month of revenue,” he said at the time. “We’re two-and-a half times that now.”
Since then, those numbers have gone up even more. A company spokesperson told me today that Better.com funded $14 billion in loan volume in the first quarter of 2021 alone and that it is currently funding over $4 billions in loans a month. For some context, Better.com funded $25 billion in loan volume in all of 2020. And, it currently has 6,000 employees — up 2,000 from last October.
This article was updated post-publication with some additional numbers provided by the company.
Iyuno-SDI Group, a provider of translated subtitles and other media localization services, announced today it has raised $160 million in funding from SoftBank Vision 2. The company said this makes the fund one of its largest shareholders.
Iyuno-SDI Group was formed after Iyuno Media Group completed its acquisition of SDI Media last month. In a recent interview with TechCrunch, Iyuno-SDI Group chief executive officer David Lee, who launched Iyuno in 2002 while he was an undergraduate in Seoul, described how the company’s proprietary cloud-based enterprise resource planning software allows it to perform localization services—including subtitles, dubbing and accessibility features—at scale.
Iyuno also built its own neural machine translation engines, trained on data from specific entertainment genres, to help its human translators work more quickly. The company’s clients have included Netflix, Apple iTunes, DreamWorks, HBO and Entertainment One.
Now that its merger is complete, Iyuno-SDI Group operates a combined 67 offices in 34 countries, and is able to perform localization services in more than 100 languages.
SoftBank Group first invested in Iyuno Media Group through SoftBank Ventures Asia, its venture capital arm, in 2018. SoftBank Vision 2 will join Lee and investors Altor, Shamrock Capital Advisors and SoftBank Ventures Asia Corporation on Iyuno-SDI Group’s board of directors.
Polestar, the Swedish electric vehicle brand spun out of Volvo Car Group, set on Wednesday a “moonshot goal” of creating the first climate neutral car by 2030. But instead of getting there through more widely-practiced offsetting measures, such as planting trees, the company said it’s going to fundamentally change the way the new EV is made.
That means rethinking every piece of the supply chain, from materials sourcing through to manufacturing, and even by making the vehicle more energy efficient.
“We’re going to do it by reducing emissions, eliminating emissions, rather than offsetting, like many are relying on today, because we see that offsetting is a worrying strategy,” Fredrika Klarén, Polestar’s Head of Sustainability, said in an interview with TechCrunch. “The science is not actually backing it up in terms of its capability of offsetting emissions from producing products.”
While the direct outcome will be a new car – what the company is calling Polestar 0 – it will require a total overhaul of the manufacturing process that could eventually extend to Polestar’s other models. Klarén said that although Polestar’s entire fleet will not be climate neutral by 2030, the company and its parent Volvo have already set targets of being climate neutral across their operations, including Polestar, by 2040.
Both of Polestar’s current models, Polestar 1 and 2, are manufactured in China. Klarén said while much about the Polestar 0 has yet to be determined, the company hopes that it, too will be Chinese-made. Although the country still has a strong reliance on coal, there’s massive development in sustainable technology and manufacturing, she pointed out.
“If I get to vote, we will continue producing in China, but that being said, the Polestar 0, the solutions we will use are not identified yet and we’re going to need to think in new ways we didn’t think was possible prior – where it will be produced, what materials will go in [it],” said Klarén.
Nor are any of the internal systems settled. Geely AG, the parent company of Volvo Cars and Polestar, has been developing its own internal computer-and-battery platform, but it hasn’t been decided whether the new Polestar model will use this system.
She said the most challenging parts of the EV manufacturing process to transition to climate neutral are the materials, specifically aluminum, steel, and battery components.
“We need to tackle the production-related emissions,” she explained. The environmental impact of producing steel, aluminum and the basic materials found in lithium-based batteries is still significant.
Along with the new vehicle, Polestar also launched a product sustainability declaration that clearly lists the carbon footprint of Polestar 2 and all coming models.
“Offsetting is a cop-out,” Polestar CEO Thomas Ingenlath said in a statement. “By pushing ourselves to create a completely climate-neutral car, we are forced to reach beyond what is possible today. We will have to question everything, innovate and look to exponential technologies as we design towards zero.”
Electric cars and trucks seem to have everything going for them: They don’t produce tailpipe emissions, they’re quieter than their fossil-fuel-powered counterparts and the underlying architecture allows for roomier and often sleeker designs. But the humble lithium-ion battery powering these cars and trucks leads a difficult life. Irregular charging and discharge rates, intense temperatures and many partial charge cycles cause these batteries to degrade in the first five to eight years of use, and eventually, they end up in a recycling facility.
Instead of sending batteries straight to recycling for raw material recovery — and leaving unrealized value on the table — startups and automakers are finding ways to reuse batteries as part of a small and growing market.
Low consumer uptake and the relatively recent introduction of EVs to the market has kept the supply of used batteries low, but automakers are already pursuing a number of second-life projects.
That’s because the average electric vehicle lithium-ion battery can retain up to 70% of its charging capacity after being removed. The business proposition for second-life batteries is therefore intuitive: Before sending the battery to a recycler, automakers can potentially generate additional revenue by putting it to use in another application or selling it to a third party.
Low consumer uptake and the relatively recent introduction of EVs to the market has kept the supply of used batteries low, but automakers are already pursuing a number of second-life projects.
To name only a few such projects that have popped up in recent years, Nissan is using old batteries to power small robots; French carmaker Groupe Renault, with partners, is launching stationary energy storage systems made with old EV batteries; and Audi Environmental Foundation, the daughter organization of Audi AG, worked with Indian startup Nunam to build solar nanogrids out of used e-tron battery modules.
Other OEMs, like Lucid Motors, BMW and Proterra, are incorporating reuse principles into their battery design. In fact, Lucid has built its batteries to work across its electric vehicle and energy storage products, including in second-life uses, Chief Engineer Eric Bach told TechCrunch. And BMW has used a “plug-and-play” concept with the batteries in its i3 model so that they can be easily removed and inserted into second-life applications, BMW spokesperson Weiland Bruch said in an interview with TechCrunch. “We believe that battery second-life will become its own self-standing business field,” he added.
Automakers are increasingly bullish on second-life uses, though the size of their role in this budding market is still unclear. Matthew Lumsden, CEO of U.K.-based Connected Energy, told TechCrunch that he has noticed a shift in the past two years where some OEMs have begun viewing batteries as an asset rather than a liability.
Two-year-old CRED has become the youngest Indian startup to be valued at $2 billion or higher.
Bangalore-based CRED said on Tuesday it has raised $215 million in a new funding round — a Series D — that valued the Indian startup at $2.2 billion (post-money), up from about $800 million valuation in the $81 million Series C round in January this year.
New investor Falcon Edge Capital and existing investor Coatue Management led the new round. Insight Partners and existing investors DST Global, RTP Global, Tiger Global, Greenoaks Capital, Dragoneer Investment Group, and Sofina also participated in Series D, which brings CRED’s total to-date raise to about $443 million.
TechCrunch reported last month that CRED was in advanced stages of talks to raise about $200 million at a valuation of around $2 billion.
CRED operates an app that rewards customers for paying their credit card bills on time and gives them access to a range of additional services such as credit and a premium catalog of products from high-end brands.
An individual needs to have a credit score of at least 750 to be able to sign up for CRED. By keeping such a high bar, the startup says it is ensuring that people are incentivized to improve their financial behavior. (More on this later.)
CRED today serves more than 6 million customers, or about 22% of all credit card holders — and 35% of all premium credit card holders — in the world’s second largest internet market.
Kunal Shah, founder and chief executive of CRED, told TechCrunch in an interview that the startup intends to become the platform for affluent customers in India and also not limit its offerings to financial services.
He said the startup’s aforementioned e-commerce service, for instance, has been growing fast. He attributed the early success to customers enjoying the curation of items on CRED and merchants finding the platform appealing as the ticket size of each transaction on CRED tends to be higher.
Our focus on helping CRED members progress financially and have access to a high-trust environment has given us a massive opportunity to shape responsible behaviour, imagine new use cases, and create a rewarding platform for members.
— Kunal Shah (@kunalb11) April 6, 2021
The startup plans to deploy the fresh funds to scale several of its revenue channels and engage in more experimentations, he said.
When asked whether CRED would like to serve all credit card users in India some day, Shah said the selection criteria limits the startup from doing so, but he was optimistic that more users will improve their scores in the future.
The startup, unlike most others in India, doesn’t focus on the usual TAM (addressable market) — hundreds of millions of users of the world’s second-most populated nation — and instead caters to some of the most premium audiences.
Consumer segmentation and addressable market for fintech firms in India (BofA Research)
“India has 57 million credit cards (vs 830 million debit cards) [that] largely serves the high-end market. The credit card industry is largely concentrated with the top 4 banks (HDFC, SBI, ICICI and Axis) controlling about 70% of the total market. This space is extremely profitable for these banks – as evident from the SBI Cards IPO,” analysts at Bank of America wrote in a recent report to clients.
“Very few startups like CRED are focusing on this high-end base and [have] taken a platform-based approach (acquire customers now and look for monetization later). Credit card in India remains an aspirational product. The under penetration would likely ensure continued strong growth in coming years. Overtime, the form-factor may evolve (i.e. move from plastic card to virtual card), but the inherent demand for credit is expected to grow,” they added.
CRED has become one of the most talked about startups in India, in part because of the pace at which it has raised money of late, its growing valuation, and the fact that it only caters to select customers.
Some users have also said that CRED doesn’t offer as appealing perks as it used to a year ago.
Shah, who is one of the most prolific angel investors in India and delivered one of the rare successful exits in the country with his previous venture, said CRED is already addressing these concerns. A recent feature, which allows customers to use CRED points at over a thousand merchants, for instance, has made the reward more appealing, he said, adding that the startup is slowly incorporating that into its own e-commerce store as well.
“What will soon happen is that customers will realize that these points are asset and not a liability. They will start to see benefits of the points in more places,” he said, adding that the pandemic derailed some of the things CRED had planned.
The startup, which bought back shares worth $1.2 million from employees in January this year, told them in an email today that it will soon be buying back stocks worth $5 million. “As the funding helps CRED invest in its future, hopefully the buyback will help some of you do that too,” the email said.
As governments scrambled to lock down their populations after the COVID-19 pandemic was declared last March, some countries had plans underway to reopen. By June, Jamaica became one of the first countries to open its borders.
Tourism represents about one-fifth of Jamaica’s economy. In 2019 alone, four million travelers visited Jamaica, bringing thousands of jobs to its three million residents. But as COVID-19 stretched into the summer, Jamaica’s economy was in free fall, and tourism was its only way back — even if that meant at the expense of public health.
The Jamaican government contracted with Amber Group, a technology company headquartered in Kingston, to build a border entry system allowing residents and travelers back onto the island. The system was named JamCOVID and was rolled out as an app and a website to allow visitors to get screened before they arrive. To cross the border, travelers had to upload a negative COVID-19 test result to JamCOVID before boarding their flight from high-risk countries, including the United States.
Amber Group’s CEO Dushyant Savadia boasted that his company developed JamCOVID in “three days” and that it effectively donated the system to the Jamaican government, which in turn pays Amber Group for additional features and customizations. The rollout appeared to be a success, and Amber Group later secured contracts to roll out its border entry system to at least four other Caribbean islands.
But last month TechCrunch revealed that JamCOVID exposed immigration documents, passport numbers, and COVID-19 lab test results on close to half a million travelers — including many Americans — who visited the island over the past year. Amber Group had set the access to the JamCOVID cloud server to public, allowing anyone to access its data from their web browser.
Whether the data exposure was caused by human error or negligence, it was an embarrassing mistake for a technology company — and, by extension, the Jamaican government — to make.
And that might have been the end of it. Instead, the government’s response became the story.
By the end of the first wave of coronavirus, contact tracing apps were still in their infancy and few governments had plans in place to screen travelers as they arrived at their borders. It was a scramble for governments to build or acquire technology to understand the spread of the virus.
As part of an investigation into a broad range of these COVID-19 apps and services, TechCrunch found that JamCOVID was storing data on an exposed, passwordless server.
This wasn’t the first time TechCrunch found security flaws or exposed data through our reporting. It also was not the first pandemic-related security scare. Israeli spyware maker NSO Group left real location data on an unprotected server that it used for demonstrating its new contact tracing system. Norway was one of the first countries with a contact tracing app, but pulled it after the country’s privacy authority found the continuous tracking of citizens’ location was a privacy risk.
Just as we have with any other story, we contacted who we thought was the server’s owner. We alerted Jamaica’s Ministry of Health to the data exposure on the weekend of February 13. But after we provided specific details of the exposure to ministry spokesperson Stephen Davidson, we did not hear back. Two days later, the data was still exposed.
After we spoke to two American travelers whose data was spilling from the server, we narrowed down the owner of the server to Amber Group. We contacted its chief executive Savadia on February 16, who acknowledged the email but did not comment, and the server was secured about an hour later.
We ran our story that afternoon. After we published, the Jamaican government issued a statement claiming the lapse was “discovered on February 16” and was “immediately rectified,” neither of which were true.
Instead, the government responded by launching a criminal investigation into whether there was any “unauthorized” access to the unprotected data that led to our first story, which we perceived to be a thinly veiled threat directed at this publication. The government said it had contacted its overseas law enforcement partners.
When reached, a spokesperson for the FBI declined to say whether the Jamaican government had contacted the agency.
Things didn’t get much better for JamCOVID. In the days that followed the first story, the government engaged a cloud and cybersecurity consultant, Escala 24×7, to assess JamCOVID’s security. The results were not disclosed, but the company said it was confident there was “no current vulnerability” in JamCOVID. Amber Group also said that the lapse was a “completely isolated occurrence.”
A week went by and TechCrunch alerted Amber Group to two more security lapses. After the attention from the first report, a security researcher who saw the news of the first lapse found exposed private keys and passwords for JamCOVID’s servers and databases hidden on its website, and a third lapse that spilled quarantine orders for more than half a million travelers.
Amber Group and the government claimed it faced “cyberattacks, hacking and mischievous players.” In reality, the app was just not that secure.
The security lapses come at a politically inconvenient time for the Jamaican government, as it attempts to launch a national identification system, or NIDS, for the second time. NIDS will store biographic data on Jamaican nationals, including their biometrics, such as their fingerprints.
The repeat effort comes two years after the government’s first law was struck down by Jamaica’s High Court as unconstitutional.
Critics have cited the JamCOVID security lapses as a reason to drop the proposed national database. A coalition of privacy and rights groups cited the recent issues with JamCOVID for why a national database is “potentially dangerous for Jamaicans’ privacy and security.” A spokesperson for Jamaica’s opposition party told local media that there “wasn’t much confidence in NIDS in the first place.”
It’s been more than a month since we published the first story and there are many unanswered questions, including how Amber Group secured the contract to build and run JamCOVID, how the cloud server became exposed, and if security testing was conducted before its launch.
TechCrunch emailed both the Jamaican prime minister’s office and Jamaica’s national security minister Matthew Samuda to ask how much, if anything, the government donated or paid to Amber Group to run JamCOVID and what security requirements, if any, were agreed upon for JamCOVID. We did not get a response.
Amber Group also has not said how much it has earned from its government contracts. Amber Group’s Savadia declined to disclose the value of the contracts to one local newspaper. Savadia did not respond to our emails with questions about its contracts.
Following the second security lapse, Jamaica’s opposition party demanded that the prime minister release the contracts that govern the agreement between the government and Amber Group. Prime Minister Andrew Holness said at a press conference that the public “should know” about government contracts but warned “legal hurdles” may prevent disclosure, such as for national security reasons or when “sensitive trade and commercial information” might be disclosed.
That came days after local newspaper The Jamaica Gleaner had a request to obtain contracts revealing the salaries state officials denied by the government under a legal clause that prevents the disclosure of an individual’s private affairs. Critics argue that taxpayers have a right to know how much government officials are paid from public funds.
Jamaica’s opposition party also asked what was done to notify victims.
Government minister Samuda initially downplayed the security lapse, claiming just 700 people were affected. We scoured social media for proof but found nothing. To date, we’ve found no evidence that the Jamaican government ever informed travelers of the security incident — either the hundreds of thousands of affected travelers whose information was exposed, or the 700 people that the government claimed it notified but has not publicly released.
TechCrunch emailed the minister to request a copy of the notice that the government allegedly sent to victims, but we did not receive a response. We also asked Amber Group and Jamaica’s prime minister’s office for comment. We did not hear back.
Many of the victims of the security lapse are from the United States. Neither of the two Americans we spoke to in our first report were notified of the breach.
Spokespeople for the attorneys general of New York and Florida, whose residents’ information was exposed, told TechCrunch that they had not heard from either the Jamaican government or the contractor, despite state laws requiring data breaches to be disclosed.
The reopening of Jamaica’s borders came at a cost. The island saw over a hundred new cases of COVID-19 in the month that followed, the majority arriving from the United States. From June to August, the number of new coronavirus cases went from tens to dozens to hundreds each day.
To date, Jamaica has reported over 39,500 cases and 600 deaths caused by the pandemic.
Prime Minister Holness reflected on the decision to reopen its borders last month in parliament to announce the country’s annual budget. He said the country’s economic decline last was “driven by a massive 70% contraction in our tourist industry.” More than 525,000 travelers — both residents and tourists — have arrived in Jamaica since the borders opened, Holness said, a figure slightly more than the number of travelers’ records found on the exposed JamCOVID server in February.
Holness defended reopening the country’s borders.
“Had we not done this the fall out in tourism revenues would have been 100% instead of 75%, there would be no recovery in employment, our balance of payment deficit would have worsened, overall government revenues would have been threatened, and there would be no argument to be made about spending more,” he said.
Both the Jamaican government and Amber Group benefited from opening the country’s borders. The government wanted to revive its falling economy, and Amber Group enriched its business with fresh government contracts. But neither paid enough attention to cybersecurity, and victims of their negligence deserve to know why.
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From the earliest days of the pandemic, it was no secret that video chat was about to become a very hot space.
Over the past several months investors have bankrolled a handful of video startups with specific niches, ranging from always-on office surveillance to platforms that encouraged plenty of mini calls to avoid the need for more lengthy team-wide meetings. As the pandemic wanes and plenty of startups begin to look towards hybrid office models, there are others who have decided to lean into embracing a fully remote workforce, a strategy that may require new tools.
PingPong, a recent launch from Y Combinator’s latest batch, is building an asynchronous video chat app for the workplace. We selected PingPong as one of our favorite startups that debuted last week.
The company’s central sell is that for remote teams, there needs to be a better alternative to Slack or email for catching up with co-workers across time zones. While Zoom calls might be able to convey a company’s culture better than a post in a company-wide Slack channel, for fully remote teams operating on different continents, scheduling a company-wide meeting is often a non-starter.
PingPong is selling its service as an addendum to Slack that helps remote product teams collaborate and convey what they’re working on. Users can capture a short video of themselves and share their screen in lieu of a standup presentation and then they can get caught up on each other’s progress on their own time. PingPong’s hope is that users find more value in brainstorming, conducting design reviews, reporting bugs and more inside while using asynchronous video than they would with text.
“We have a lot to do before we can replace Slack, so right now we kind of emphasize playing nice with Slack,” PingPong CEO Jeff Whitlock tells TechCrunch. “Our longer term vision is that what young people are doing in their consumer lives, they bring into the enterprise when they graduate into the workforce. You and I were using Instant Messenger all the time in the early 2000s and then we got to the workplace, that was the opportunity for Slack… We believe in the next five or so years, something that’s a richer, more asynchronous video-based Slack alternative will have a lot more interest.”
Building a chat app specifically designed for remote product teams operating in multiple time zones is a tight niche for now, but Whitlock believes that this will become a more common problem as companies embrace the benefits of remote teams post-pandemic. PingPong costs $100 per user per year.
Although the round is still ongoing, Pipe has reportedly raised $150 million in a “massively oversubscribed” round led by Baltimore, Md.-based Greenspring Associates. While the company has signed a term sheet, more money could still come in, according to the source. Both new and existing investors have participated in the fundraise.
The increase in valuation is “a significant step up” from the company’s last raise. Pipe has declined to comment on the deal.
A little over one year ago, Pipe raised a $6 million seed round led by Craft Ventures to help it pursue its mission of giving SaaS companies a funding alternative outside of equity or venture debt.
The buzzy startup’s goal with the money was to give SaaS companies a way to get their revenue upfront, by pairing them with investors on a marketplace that pays a discounted rate for the annual value of those contracts. (Pipe describes its buy-side participants as “a vetted group of financial institutions and banks.”)
Just a few weeks ago, Miami-based Pipe announced a new raise — $50 million in “strategic equity funding” from a slew of high-profile investors. Siemens’ Next47 and Jim Pallotta’s Raptor Group co-led the round, which also included participation from Shopify, Slack, HubSpot, Okta, Social Capital’s Chamath Palihapitiya, Marc Benioff, Michael Dell’s MSD Capital, Republic, Alexis Ohanian’s Seven Seven Six and Joe Lonsdale.
At that time, Pipe co-CEO and co-founder Harry Hurst said the company was also broadening the scope of its platform beyond strictly SaaS companies to “any company with a recurring revenue stream.” This could include D2C subscription companies, ISP, streaming services or a telecommunications companies. Even VC fund admin and management are being piped on its platform, for example, according to Hurst.
“When we first went to market, we were very focused on SaaS, our first vertical,” he told TC at the time. “Since then, over 3,000 companies have signed up to use our platform.” Those companies range from early-stage and bootstrapped with $200,000 in revenue, to publicly-traded companies.
Pipe’s platform assesses a customer’s key metrics by integrating with its accounting, payment processing and banking systems. It then instantly rates the performance of the business and qualifies them for a trading limit. Trading limits currently range from $50,000 for smaller early-stage and bootstrapped companies, to over $100 million for late-stage and publicly traded companies, although there is no cap on how large a trading limit can be.
In the first quarter of 2021, tens of millions of dollars were traded across the Pipe platform. Between its launch in late June 2020 through year’s end, the company also saw “tens of millions” in trades take place via its marketplace. Tradable ARR on the platform is currently in excess of $1 billion.
Arm today announced Armv9, the next generation of its chip architecture. Its predecessor, Armv8 launched a decade ago and while it has seen its fair share of changes and updates, the new architecture brings a number of major updates to the platform that warrant a shift in version numbers. Unsurprisingly, Armv9 builds on V8 and is backward compatible, but it specifically introduces new security, AI, signal processing and performance features.
Over the last five years, more than 100 billion Arm-based chips have shipped. But Arm believes that its partners will ship over 300 billion in the next decade. We will see the first ArmV9-based chips in devices later this year.
Ian Smythe, Arm’s VP of Marketing for its client business, told me that he believes this new architecture will change the way we do computing over the next decade. “We’re going to deliver more performance, we will improve the security capabilities […] and we will enhance the workload capabilities because of the shift that we see in compute that’s taking place,” he said. “The reason that we’ve taken these steps is to look at how we provide the best experience out there for handling the explosion of data and the need to process it and the need to move it and the need to protect it.”
That neatly sums up the core philosophy behind these updates. On the security side, ArmV9 will introduce Arm’s confidential compute architecture and the concept of Realms. These Realms enable developers to write applications where the data is shielded from the operating system and other apps on the device. Using Realms, a business application could shield sensitive data and code from the rest of the device, for example.
“What we’re doing with the Arm Confidential Compute Architecture is worrying about the fact that all of our computing is running on the computing infrastructure of operating systems and hypervisors,” Richard Grisenthwaite, the chief architect at Arm, told me. “That code is quite complex and therefore could be penetrated if things go wrong. And it’s in an incredibly trusted position, so we’re moving some of the workloads so that [they are] running on a vastly smaller piece of code. Only the Realm manager is the thing that’s actually capable of seeing your data while it’s in action. And that would be on the order of about a 10th of the size of a normal hypervisor and much smaller still than an operating system.”
As Grisenthwaite noted, it took Arm a few years to work out the details of this security architecture and ensure that it is robust enough — and during that time Spectre and Meltdown appeared, too, and set back some of Arm’s initial work because some of the solutions it was working on would’ve been vulnerable to similar attacks.
Unsurprisingly, another area the team focused on was enhancing the CPU’s AI capabilities. AI workloads are now ubiquitous. Arm had already done introduced its Scalable Vector Extension (SVE) a few years ago, but at the time, this was meant for high-performance computing solutions like the Arm-powered Fugaku supercomputer.
Now, Arm is introducing SVE2 to enable more AI and digital signal processing (DSP) capabilities. Those can be used for image processing workloads, as well as other IoT and smart home solutions, for example. There are, of course, dedicated AI chips on the market now, but Arm believes that the entire computing stack needs to be optimized for these workloads and that there are a lot of use cases where the CPU is the right choice for them, especially for smaller workloads.
“We regard machine learning as appearing in just about everything. It’s going to be done in GPUs, it’s going to be done in dedicated processors, neural processors, and also done in our CPUs. And it’s really important that we make all of these different components better at doing machine learning,” Grisenthwaite said.
As for raw performance, Arm believes its new architecture will allow chip manufacturers to gain more than 30% in compute power over the next two chip generations, both for mobile CPUs but also the kind of infrastructure CPUs that large cloud vendors like AWS now offer their users.
“Arm’s next-generation Armv9 architecture offers a substantial improvement in security and machine learning, the two areas that will be further emphasized in tomorrow’s mobile communications devices,” said Min Goo Kim, the executive vice president of SoC development at Samsung Electronics. “As we work together with Arm, we expect to see the new architecture usher in a wider range of innovations to the next generation of Samsung’s Exynos mobile processors.”
UPDATE: Per the Wall Street Journal, this is actually not happening and was instead an April Fool’s joke gone wrong. VW USA still has not responded to requests for comment, but VW Europe told the publication that it was in fact a joke. The release announcing the news remains live on VW’s official U.S. media site with no indication that it’s not in fact true. Reuters is now reporting the same, citing three unnamed sources.]
Automaker Volkswagen wants you to know it’s serious about electric vehicles — so serious, in fact, that it’s officially rebranding around a pun in the U.S. The company revealed in a press release that it’s changing its name from “Volkswagen of America” to “Voltswagen of America” in a press release today. News this could happen leaked late Monday, but many speculated it might be an April Fool’s joke that got out a bit early, but the automaker seems serious about switching the official brand from May 2021 onward given the official release on its newsroom.
Voltswagen (neé Volkswagen) says that the reason behind the change is to firmly demonstrate its commitment to “future-forward investment in e-mobility,” which said more simply, implies that it’s super serious about its electric drivetrain plans. In a more literal sense, ‘Volkswagen’ is actually from the German for “the people’s car,” which suggests that Voltswagen is a car for … volts?
Sort of, but not really, says VW (hey that still works!):
“We have said, from the beginning of our shift to an electric future, that we will build EVs for the millions, not just millionaires,” explained VW CEO and President Scott Keogh in the release announcing the swap. “This name change signifies a nod to our past as the peoples’ car and our firm belief that our future is in being the peoples’ electric car.”
This announcement comes just as Volkswagen has begun shipping its all-electric SUV, the ID.4, in the U.S. It ha a price tag of $33,995, before either federal and tax incentives, so that is indeed on the more affordable side of the existing U.S. electric vehicle market, with even more options set to come for cost-conscious consumers in the future as the company spurs its commitments of lowering emissions by achieving one million global EV sales by 2025, and playing host to a lineup of over 70 models across VW and its sub-brands worldwide by 2029.
Voltswagen branding will include use of a higher blue tone on the VW logo for all-electric vehicles, while gas cars will retain the more traditional dark blue look. The actual word “Voltswagen” will be used on EVs in addition to the initials logo, with the icon graphic itself will be the sole branding on gas cars in the U.S. going forward.