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Apple’s dangerous path

By Lucas Matney

Hello friends, and welcome back to Week in Review.

Last week, we dove into the truly bizarre machinations of the NFT market. This week, we’re talking about something that’s a little bit more impactful on the current state of the web — Apple’s NeuralHash kerfuffle.

If you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny


the big thing

In the past month, Apple did something it generally has done an exceptional job avoiding — the company made what seemed to be an entirely unforced error.

In early August — seemingly out of nowhere** — the company announced that by the end of the year they would be rolling out a technology called NeuralHash that actively scanned the libraries of all iCloud Photos users, seeking out image hashes that matched known images of child sexual abuse material (CSAM). For obvious reasons, the on-device scanning could not be opted out of.

This announcement was not coordinated with other major consumer tech giants, Apple pushed forward on the announcement alone.

Researchers and advocacy groups had almost unilaterally negative feedback for the effort, raising concerns that this could create new abuse channels for actors like governments to detect on-device information that they regarded as objectionable. As my colleague Zach noted in a recent story, “The Electronic Frontier Foundation said this week it had amassed more than 25,000 signatures from consumers. On top of that, close to 100 policy and rights groups, including the American Civil Liberties Union, also called on Apple to abandon plans to roll out the technology.”

(The announcement also reportedly generated some controversy inside of Apple.)

The issue — of course — wasn’t that Apple was looking at find ways that prevented the proliferation of CSAM while making as few device security concessions as possible. The issue was that Apple was unilaterally making a massive choice that would affect billions of customers (while likely pushing competitors towards similar solutions), and was doing so without external public input about possible ramifications or necessary safeguards.

A long story short, over the past month researchers discovered Apple’s NeuralHash wasn’t as air tight as hoped and the company announced Friday that it was delaying the rollout “to take additional time over the coming months to collect input and make improvements before releasing these critically important child safety features.”

Having spent several years in the tech media, I will say that the only reason to release news on a Friday morning ahead of a long weekend is to ensure that the announcement is read and seen by as few people as possible, and it’s clear why they’d want that. It’s a major embarrassment for Apple, and as with any delayed rollout like this, it’s a sign that their internal teams weren’t adequately prepared and lacked the ideological diversity to gauge the scope of the issue that they were tackling. This isn’t really a dig at Apple’s team building this so much as it’s a dig on Apple trying to solve a problem like this inside the Apple Park vacuum while adhering to its annual iOS release schedule.

illustration of key over cloud icon

Image Credits: Bryce Durbin / TechCrunch /

Apple is increasingly looking to make privacy a key selling point for the iOS ecosystem, and as a result of this productization, has pushed development of privacy-centric features towards the same secrecy its surface-level design changes command. In June, Apple announced iCloud+ and raised some eyebrows when they shared that certain new privacy-centric features would only be available to iPhone users who paid for additional subscription services.

You obviously can’t tap public opinion for every product update, but perhaps wide-ranging and trail-blazing security and privacy features should be treated a bit differently than the average product update. Apple’s lack of engagement with research and advocacy groups on NeuralHash was pretty egregious and certainly raises some questions about whether the company fully respects how the choices they make for iOS affect the broader internet.

Delaying the feature’s rollout is a good thing, but let’s all hope they take that time to reflect more broadly as well.

** Though the announcement was a surprise to many, Apple’s development of this feature wasn’t coming completely out of nowhere. Those at the top of Apple likely felt that the winds of global tech regulation might be shifting towards outright bans of some methods of encryption in some of its biggest markets.

Back in October of 2020, then United States AG Bill Barr joined representatives from the UK, New Zealand, Australia, Canada, India and Japan in signing a letter raising major concerns about how implementations of encryption tech posed “significant challenges to public safety, including to highly vulnerable members of our societies like sexually exploited children.” The letter effectively called on tech industry companies to get creative in how they tackled this problem.


other things

Here are the TechCrunch news stories that especially caught my eye this week:

LinkedIn kills Stories
You may be shocked to hear that LinkedIn even had a Stories-like product on their platform, but if you did already know that they were testing Stories, you likely won’t be so surprised to hear that the test didn’t pan out too well. The company announced this week that they’ll be suspending the feature at the end of the month. RIP.

FAA grounds Virgin Galactic over questions about Branson flight
While all appeared to go swimmingly for Richard Branson’s trip to space last month, the FAA has some questions regarding why the flight seemed to unexpectedly veer so far off the cleared route. The FAA is preventing the company from further launches until they find out what the deal is.

Apple buys a classical music streaming service
While Spotify makes news every month or two for spending a massive amount acquiring a popular podcast, Apple seems to have eyes on a different market for Apple Music, announcing this week that they’re bringing the classical music streaming service Primephonic onto the Apple Music team.

TikTok parent company buys a VR startup
It isn’t a huge secret that ByteDance and Facebook have been trying to copy each other’s success at times, but many probably weren’t expecting TikTok’s parent company to wander into the virtual reality game. The Chinese company bought the startup Pico which makes consumer VR headsets for China and enterprise VR products for North American customers.

Twitter tests an anti-abuse ‘Safety Mode’
The same features that make Twitter an incredibly cool product for some users can also make the experience awful for others, a realization that Twitter has seemingly been very slow to make. Their latest solution is more individual user controls, which Twitter is testing out with a new “safety mode” which pairs algorithmic intelligence with new user inputs.


extra things

Some of my favorite reads from our Extra Crunch subscription service this week:

Our favorite startups from YC’s Demo Day, Part 1 
“Y Combinator kicked off its fourth-ever virtual Demo Day today, revealing the first half of its nearly 400-company batch. The presentation, YC’s biggest yet, offers a snapshot into where innovation is heading, from not-so-simple seaweed to a Clearco for creators….”

…Part 2
“…Yesterday, the TechCrunch team covered the first half of this batch, as well as the startups with one-minute pitches that stood out to us. We even podcasted about it! Today, we’re doing it all over again. Here’s our full list of all startups that presented on the record today, and below, you’ll find our votes for the best Y Combinator pitches of Day Two. The ones that, as people who sift through a few hundred pitches a day, made us go ‘oh wait, what’s this?’

All the reasons why you should launch a credit card
“… if your company somehow hasn’t yet found its way to launch a debit or credit card, we have good news: It’s easier than ever to do so and there’s actual money to be made. Just know that if you do, you’ve got plenty of competition and that actual customer usage will probably depend on how sticky your service is and how valuable the rewards are that you offer to your most active users….”


Thanks for reading, and again, if you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny

Lucas Matney

Australia’s TechnologyOne acquires UK-based higher-ed platform Scientia for $16.6M

By Mike Butcher

TechnologyOne, an Australian SaaS enterprise, has agreed to acquire UK-based higher education software provider Scientia for £12 million /$16.6 million in cash.
 
TechnologyOne claims to have 75% of Higher Education institutions in Australia using its software, while Scientia claims 50% market share in the UK.

The acquisition includes an initial payment of £6m and further payments.
 
Adrian Di Marco, TechnologyOne founder and Executive Chairman said: “This is our company’s first international acquisition and it demonstrates our deep commitment to serving the higher education sector and the UK market. The unique IP and market-leading functionality of Scientia’s product supports our vision of delivering enterprise software that is incredibly easy to use.”

Commenting, Michelle Gillespie, Registrar and Director of Student Administration and Library Services at Swinburne University of Technology said: “The one thing that students care most about is their timetable. Being able to fully integrate a schedule into the full student experience is very important, and an exciting step for those universities – like Swinburne – that use TechnologyOne’s student management system.”

UK now expects compliance with children’s privacy design code

By Natasha Lomas

In the UK, a 12-month grace period for compliance with a design code aimed at protecting children online expires today — meaning app makers offering digital services in the market which are “likely” to be accessed by children (defined in this context as users under 18 years old) are expected to comply with a set of standards intended to safeguard kids from being tracked and profiled.

The age appropriate design code came into force on September 2 last year however the UK’s data protection watchdog, the ICO, allowed the maximum grace period for hitting compliance to give organizations time to adapt their services.

But from today it expects the standards of the code to be met.

Services where the code applies can include connected toys and games and edtech but also online retail and for-profit online services such as social media and video sharing platforms which have a strong pull for minors.

Among the code’s stipulations are that a level of ‘high privacy’ should be applied to settings by default if the user is (or is suspected to be) a child — including specific provisions that geolocation and profiling should be off by default (unless there’s a compelling justification for such privacy hostile defaults).

The code also instructs app makers to provide parental controls while also providing the child with age-appropriate information about such tools — warning against parental tracking tools that could be used to silently/invisibly monitor a child without them being made aware of the active tracking.

Another standard takes aim at dark pattern design — with a warning to app makers against using “nudge techniques” to push children to provide “unnecessary personal data or weaken or turn off their privacy protections”.

The full code contains 15 standards but is not itself baked into legislation — rather it’s a set of design recommendations the ICO wants app makers to follow.

The regulatory stick to make them do so is that the watchdog is explicitly linking compliance with its children’s privacy standards to passing muster with wider data protection requirements that are baked into UK law.

The risk for apps that ignore the standards is thus that they draw the attention of the watchdog — either through a complaint or proactive investigation — with the potential of a wider ICO audit delving into their whole approach to privacy and data protection.

“We will monitor conformance to this code through a series of proactive audits, will consider complaints, and take appropriate action to enforce the underlying data protection standards, subject to applicable law and in line with our Regulatory Action Policy,” the ICO writes in guidance on its website. “To ensure proportionate and effective regulation we will target our most significant powers, focusing on organisations and individuals suspected of repeated or wilful misconduct or serious failure to comply with the law.”

It goes on to warn it would view a lack of compliance with the kids’ privacy code as a potential black mark against (enforceable) UK data protection laws, adding: “If you do not follow this code, you may find it difficult to demonstrate that your processing is fair and complies with the GDPR [General Data Protection Regulation] or PECR [Privacy and Electronics Communications Regulation].”

Tn a blog post last week, Stephen Bonner, the ICO’s executive director of regulatory futures and innovation, also warned app makers: “We will be proactive in requiring social media platforms, video and music streaming sites and the gaming industry to tell us how their services are designed in line with the code. We will identify areas where we may need to provide support or, should the circumstances require, we have powers to investigate or audit organisations.”

“We have identified that currently, some of the biggest risks come from social media platforms, video and music streaming sites and video gaming platforms,” he went on. “In these sectors, children’s personal data is being used and shared, to bombard them with content and personalised service features. This may include inappropriate adverts; unsolicited messages and friend requests; and privacy-eroding nudges urging children to stay online. We’re concerned with a number of harms that could be created as a consequence of this data use, which are physical, emotional and psychological and financial.”

“Children’s rights must be respected and we expect organisations to prove that children’s best interests are a primary concern. The code gives clarity on how organisations can use children’s data in line with the law, and we want to see organisations committed to protecting children through the development of designs and services in accordance with the code,” Bonner added.

The ICO’s enforcement powers — at least on paper — are fairly extensive, with GDPR, for example, giving it the ability to fine infringers up to £17.5M or 4% of their annual worldwide turnover, whichever is higher.

The watchdog can also issue orders banning data processing or otherwise requiring changes to services it deems non-compliant. So apps that chose to flout the children’s design code risk setting themselves up for regulatory bumps or worse.

In recent months there have been signs some major platforms have been paying mind to the ICO’s compliance deadline — with Instagram, YouTube and TikTok all announcing changes to how they handle minors’ data and account settings ahead of the September 2 date.

In July, Instagram said it would default teens to private accounts — doing so for under 18s in certain countries which the platform confirmed to us includes the UK — among a number of other child-safety focused tweaks. Then in August, Google announced similar changes for accounts on its video charing platform, YouTube.

A few days later TikTok also said it would add more privacy protections for teens. Though it had also made earlier changes limiting privacy defaults for under 18s.

Apple also recently got itself into hot water with the digital rights community following the announcement of child safety-focused features — including a child sexual abuse material (CSAM) detection tool which scans photo uploads to iCloud; and an opt in parental safety feature that lets iCloud Family account users turn on alerts related to the viewing of explicit images by minors using its Messages app.

The unifying theme underpinning all these mainstream platform product tweaks is clearly ‘child protection’.

And while there’s been growing attention in the US to online child safety and the nefarious ways in which some apps exploit kids’ data — as well as a number of open probes in Europe (such as this Commission investigation of TikTok, acting on complaints) — the UK may be having an outsized impact here given its concerted push to pioneer age-focused design standards.

The code also combines with incoming UK legislate which is set to apply a ‘duty of care’ on platforms to take a rboad-brush safety-first stance toward users, also with a big focus on kids (and there it’s also being broadly targeted to cover all children; rather than just applying to kids under 13s as with the US’ COPPA, for example).

In the blog post ahead of the compliance deadline expiring, the ICO’s Bonner sought to take credit for what he described as “significant changes” made in recent months by platforms like Facebook, Google, Instagram and TikTok, writing: “As the first-of-its kind, it’s also having an influence globally. Members of the US Senate and Congress have called on major US tech and gaming companies to voluntarily adopt the standards in the ICO’s code for children in America.”

“The Data Protection Commission in Ireland is preparing to introduce the Children’s Fundamentals to protect children online, which links closely to the code and follows similar core principles,” he also noted.

And there are other examples in the EU: France’s data watchdog, the CNIL, looks to have been inspired by the ICO’s approach — issuing its own set of right child-protection focused recommendations this June (which also, for example, encourage app makers to add parental controls with the clear caveat that such tools must “respect the child’s privacy and best interests”).

The UK’s focus on online child safety is not just making waves overseas but sparking growth in a domestic compliance services industry.

Last month, for example, the ICO announced the first clutch of GDPR certification scheme criteria — including two schemes which focus on the age appropriate design code. Expect plenty more.

Bonner’s blog post also notes that the watchdog will formally set out its position on age assurance this autumn — so it will be providing further steerage to organizations which are in scope of the code on how to tackle that tricky piece, although it’s still not clear how hard a requirement the ICO will support, with Bonner suggesting it could be actually “verifying ages or age estimation”. Watch that space. Whatever the recommendations are, age assurance services are set to spring up with compliance-focused sales pitches.

Children’s safety online has been a huge focus for UK policymakers in recent years, although the wider (and long in train) Online Safety (neé Harms) Bill remains at the draft law stage.

An earlier attempt by UK lawmakers to bring in mandatory age checks to prevent kids from accessing adult content websites — dating back to 2017’s Digital Economy Act — was dropped in 2019 after widespread criticism that it would be both unworkable and a massive privacy risk for adult users of porn.

But the government did not drop its determination to find a way to regulate online services in the name of child safety. And online age verification checks look set to be — if not a blanket, hardened requirement for all digital services — increasingly brought in by the backdoor, through a sort of ‘recommended feature’ creep (as the ORG has warned). 

The current recommendation in the age appropriate design code is that app makers “take a risk-based approach to recognising the age of individual users and ensure you effectively apply the standards in this code to child users”, suggesting they: “Either establish age with a level of certainty that is appropriate to the risks to the rights and freedoms of children that arise from your data processing, or apply the standards in this code to all your users instead.” 

At the same time, the government’s broader push on online safety risks conflicting with some of the laudable aims of the ICO’s non-legally binding children’s privacy design code.

For instance, while the code includes the (welcome) suggestion that digital services gather as little information about children as possible, in an announcement earlier this summer UK lawmakers put out guidance for social media platforms and messaging services — ahead of the planned Online Safety legislation — that recommends they prevent children from being able to use end-to-end encryption.

That’s right; the government’s advice to data-mining platforms — which it suggests will help prepare them for requirements in the incoming legislation — is not to use ‘gold standard’ security and privacy (e2e encryption) for kids.

So the official UK government messaging to app makers appears to be that, in short order, the law will require commercial services to access more of kids’ information, not less — in the name of keeping them ‘safe’. Which is quite a contradiction vs the data minimization push on the design code.

The risk is that a tightening spotlight on kids privacy ends up being fuzzed and complicated by ill-thought through policies that push platforms to monitor kids to demonstrate ‘protection’ from a smorgasbord of online harms — be it adult content or pro-suicide postings, or cyber bullying and CSAM.

The law looks set to encourage platforms to ‘show their workings’ to prove compliance — which risks resulting in ever closer tracking of children’s activity, retention of data — and maybe risk profiling and age verification checks (that could even end up being applied to all users; think sledgehammer to crack a nut). In short, a privacy dystopia.

Such mixed messages and disjointed policymaking seem set to pile increasingly confusing — and even conflicting — requirements on digital services operating in the UK, making tech businesses legally responsible for divining clarity amid the policy mess — with the simultaneous risk of huge fines if they get the balance wrong.

Complying with the ICO’s design standards may therefore actually be the easy bit.

 

Oviva grabs $80M for app-delivered healthy eating programs

By Natasha Lomas

UK startup Oviva, which sells a digital support offering, including for Type 2 diabetes treatment, dispensing personalized diet and lifestyle advice via apps to allow more people to be able to access support, has closed $80 million in Series C funding — bringing its total raised to date to $115M.

The raise, which Oviva says will be used to scale up after a “fantastic year” of growth for the health tech business, is co-led by Sofina and Temasek, alongside existing investors AlbionVC, Earlybird, Eight Roads Ventures, F-Prime Capital, MTIP, plus several angels.

Underpinning that growth is the fact wealthy Western nations continue to see rising rates of obesity and other health conditions like Type 2 diabetes (which can be linked to poor diet and lack of exercise). While more attention is generally being paid to the notion of preventative — rather than reactive — healthcare, to manage the rising costs of service delivery.

Lifestyle management to help control weight and linked health conditions (like diabetes) is where Oviva comes in: It’s built a blended support offering that combines personalized care (provided by healthcare professionals) with digital tools for patients that help them do things like track what they’re eating, access support and chart their progress towards individual health goals.

It can point to 23 peer-reviewed publications to back up its approach — saying key results show an average of 6.8% weight loss at 6 months for those living with obesity; while, in its specialist programs, it says 53% of patients achieve remission of their type 2 diabetes at 12 months.

Oviva typically sells its digitally delivered support programs direct to health insurance companies (or publicly funded health services) — who then provide (or refer) the service to their customers/patients. Its programs are currently available in the UK, Germany, Switzerland and France — but expanding access is one of the goals for the Series C.

“We will expand to European markets where the health system reimburses the diet and lifestyle change we offer, especially those with specific pathways for digital reimbursement,” Oviva tells TechCrunch. “Encouragingly, more healthcare systems have been opening up specific routes for such digital reimbursement, e.g., Germany for DiGAs or Belgium just in the last months.”

So far, the startup has treated 200,000 people but the addressable market is clearly huge — not least as European populations age — with Oviva suggesting more than 300 million people live with “health challenges” that are either triggered by poor diet or can be optimised through personalised dietary changes. Moreover, it suggests, only “a small fraction” is currently being offered digital care.

To date, Oviva has built up 5,000+ partnerships with health systems, insurers and doctors as it looks to push for further scale by making its technology more accessible to a wider range of people. In the past year it says it’s “more than doubled” both people treated and revenue earned.

Its goal is for the Series C funding is to reach “millions” of people across Europe who need support because they’re suffering from poor health linked to diet and lifestyle.

As part of the scale up plan it will also be growing its team to 800 by the end of 2022, it adds.

On digital vs face-to-face care — setting aside the potential cost savings associated with digital delivery — it says studies show the “most striking outcome benefits” are around uptake and completion rates, noting: “We have consistently shown uptake rates above 70% and high completion rates of around 80%, even in groups considered harder to reach such as working age populations or minority ethnic groups. This compares to uptake and completion rates of less than 50% for most face-to-face services.”

Asked about competition, Oviva names Liva Healthcare and Second Nature as its closest competitors in the region.

“WW (formally Weight Watchers) also competes with a digital solution in some markets where they can access reimbursement,” it adds. “There are many others that try to access this group with new methods, but are not reimbursed or are wellness solutions. Noom competes as a solution for self-paying consumers in Europe, as many other apps. But, in our view, that is a separate market from the reimbursed medical one.”

As well as using the Series C funding to bolster its presence in existing markets and target and scale into new ones, Oviva says it may look to further grow the business via M&A opportunities.

“In expanding to new countries, we are open to both building new organisations from the ground up or acquiring existing businesses with a strong medical network where we see that our technology can be leveraged for better patient care and value creation,” it told us on that.

 

Olsam raises $165M to buy up and scale consumer and B2B Amazon Marketplace sellers

By Ingrid Lunden

On the heels of Heroes announcing a $200 million raise earlier today, to double down on buying and scaling third-party Amazon Marketplace sellers, another startup out of London aiming to do the same is announcing some significant funding of its own. Olsam, a roll-up play that is buying up both consumer and B2B merchants selling on Amazon by way of Amazon’s FBA fulfillment program, has closed $165 million — a combination of equity and debt that it will be using to fuel its M&A strategy, as well as continue building out its tech platform and to hire more talent.

Apeiron Investment Group — an investment firm started by German entrepreneur Christian Angermayer (known first for biopharmaceuticals, then investing and crypto, including playing a role in SoftBank investing in Wirecard) — led the Series A equity round, with Elevat3 Capital (another Angermayer firm that has a strategic partnership with Founders Fund and Peter Thiel) also participating. North Wall Capital was behind the debt portion of the deal. We have asked and Olsam is only disclosing the full amount raised, not the amount that was raised in equity versus debt. Valuation is also not being disclosed.

Being an Amazon roll-up startup from London that happens to be announcing a fundraise today is not the only thing that Olsam has in common with Heroes. Like Heroes, Olsam is also founded by brothers.

Sam Horbye previously spent years working at Amazon, including building and managing the company’s Business Marketplace (the B2B version of the consumer Marketplace); while co-founder Ollie Horbye had years of experience in strategic consulting and financial services.

Between them, they had also built and sold previous marketplace businesses, and they believe that this collective experience gives Olsam — a portmanteau of their names, “Ollie” and “Sam” — a leg up when it comes to building relationships with merchants; identifying quality products (versus the vast seas of search results that often feel like they are selling the same inexpensive junk as each other); and understanding merchants’ challenges and opportunities, and building relationships with Amazon and understanding how the merchant ecosystem fits into the e-commerce giant’s wider strategy.

Olsam is also taking a slightly different approach when it comes to target companies, by focusing not just on the usual consumer play, but also on merchants selling to businesses. B2B selling is currently one of the fastest-growing segments in Amazon’s Marketplace, and it is also one of the more overlooked by consumers.”It’s flying under the radar,” Ollie said.

“The B2B opportunity is very exciting,” Sam added. “A growing number of merchants are selling office supplies or more random products to the B2B customer.”

Estimates vary when it comes to how many merchants there are selling on Amazon’s Marketplace globally, ranging anywhere from 6 million to nearly 10 million. Altogether those merchants generated $300 million in sales (gross merchandise value), and its growing by 50% each year at the moment.

And consolidating sellers — in order to achieve better economies of scale around supply chains, marketing tools and analytics, and more — is also big business. Olsam estimates that some $7 billion has been spent cumulatively on acquiring these businesses, and there are more out there: Olsam estimates that there are some 3,000 businesses in the UK alone making more than $1 million each in sales on Amazon’s platform.

(And to be clear, there are a number of other roll-up startups beyond Heroes also eyeing up that opportunity. Raising hundreds of millions of dollars in aggregate,  others have made moves this year include Suma Brands ($150 million); Elevate Brands ($250 million); Perch ($775 million); factory14 ($200 million); Thrasio (currently probably the biggest of them all in terms of reach and money raised and ambitions), HeydayThe Razor GroupBrandedSellerXBerlin Brands Group (X2), Benitago, Latin America’s Valoreo and Rainforest and Una Brands out of Asia.)

“The senior team behind Olsam is what makes this business truly unique,” said Angermayer in a statement. “Having all been successful in building and selling their own brands within the market and having worked for Amazon in their marketplace team – their understanding of this space is exceptional.”

UK-based Heroes raises $200M to buy up more Amazon merchants for its roll-up play

By Ingrid Lunden

Heroes, one of the new wave of startups aiming to build big e-commerce businesses by buying up smaller third-party merchants on Amazon’s Marketplace, has raised another big round of funding to double down on that strategy. The London startup has picked up $200 million, money that it will mainly be using to snap up more merchants. Existing brands in its portfolio cover categories like babies, pets, sports, personal health and home and garden categories — some of them, like PremiumCare dog chews, the Onco baby car mirror, gardening tool brand Davaon and wooden foot massager roller Theraflow, category best-sellers — and the plan is to continue building up all of these verticals.

Crayhill Capital Management, a fund based out of New York, is providing the funding, and Riccardo Bruni — who co-founded the company with twin brother Alessio and third brother Giancarlo — said that the bulk of it will be going toward making acquisitions, and is therefore coming in the form of debt.

Raising debt rather than equity at this point is pretty standard for companies like Heroes. Heroes itself is pretty young: it launched less than a year ago, in November 2020, with $65 million in funding, a round comprised of both equity and debt. Other investors in the startup include 360 Capital, Fuel Ventures and Upper 90.

Heroes is playing in what is rapidly becoming a very crowded field. Not only are there tens of thousands of businesses leveraging Amazon’s extensive fulfillment network to sell goods on the e-commerce giant’s marketplace, but some days it seems we are also rapidly approaching a state of nearly as many startups launching to consolidate these third-party sellers.

Many a roll-up play follows a similar playbook, which goes like this: Amazon provides the marketplace to sell goods to consumers, and the infrastructure to fulfill those orders, by way of Fulfillment By Amazon and its Prime service. Meanwhile, the roll-up business — in this case Heroes — buys up a number of the stronger companies leveraging FBA and the marketplace. Then, by consolidating them into a single tech platform that they have built, Heroes creates better economies of scale around better and more efficient supply chains, sharper machine learning and marketing and data analytics technology, and new growth strategies. 

What is notable about Heroes, though — apart from the fact that it’s the first roll-up player to come out of the U.K., and continues to be one of the bigger players in Europe — is that it doesn’t believe that the technology plays as important a role as having a solid relationship with the companies it’s targeting, key given that now the top marketplace sellers are likely being feted by a number of companies as acquisition targets.

“The tech is very important,” said Alessio in an interview. “It helps us build robust processes that tie all the systems together across multiple brands and marketplaces. But what we have is very different from a SaaS business. We are not building an app, and tech is not the core of what we do. From the acquisitions side, we believe that human interactions ultimately win. We don’t think tech can replace a strong acquisition process.”

Image Credits: Heroes

Heroes’ three founder-brothers (two of them, Riccardo and Alessio, pictured above) have worked across a number of investment, finance and operational roles (the CVs include Merrill Lynch, EQT Ventures, Perella Weinberg Partners, Lazada, Nomura and Liberty Global) and they say there have been strong signs so far of its strategy working: of the brands that it has acquired since launching in November, they claim business (sales) has grown five-fold.

Collectively, the roll-up startups are raising hundreds of millions of dollars to fuel these efforts. Other recent hopefuls that have announced funding this year include Suma Brands ($150 million); Elevate Brands ($250 million); Perch ($775 million); factory14 ($200 million); Thrasio (currently probably the biggest of them all in terms of reach and money raised and ambitions), HeydayThe Razor GroupBrandedSellerXBerlin Brands Group (X2), Benitago, Latin America’s Valoreo and Rainforest and Una Brands out of Asia. 

The picture that is emerging across many of these operations is that many of these companies, Heroes included, do not try to make their particular approaches particularly more distinctive than those of their competitors, simply because — with nearly 10 million third-party sellers today on Amazon globally — the opportunity is likely big enough for all of them, and more, not least because of current market dynamics.

“It’s no secret that we were inspired by Thrasio and others,” Riccardo said. “Combined with COVID-19, there has been a massive acceleration of e-commerce across the continent.” It was that, plus the realization that the three brothers had the right e-commerce, fundraising and investment skills between them, that made them see what was a ‘perfect storm’ to tackle the opportunity, he continued. “So that is why we jumped into it.”

In the case of Heroes, while the majority of the funding will be used for acquisitions, it’s also planning to double headcount from its current 70 employees before the end of this year with a focus on operational experts to help run their acquired businesses. 

TikTok’s new Creator Marketplace API lets influencer marketing companies tap into first-party data

By Sarah Perez

TikTok is making it easier for brands and agencies to work with the influencers using its service. The company is rolling out a new “TikTok Creator Marketplace API,” which allows marketing companies to integrate more directly with TikTok’s Creator Marketplace, the video app’s in-house influencer marketing platform.

On the Creator Marketplace website, launched in late 2019, marketers have been able to discover top TikTok personalities for their brand campaigns, then create and manage those campaigns and track their performance.

The new API, meanwhile, allows partnered marketing companies to access TikTok’s first-party data about audience demographics, growth trends, best-performing videos and real-time campaign reporting (e.g. views, likes, shares, comments, engagement, etc.) for the first time.

They can then bring this data back into their own platforms, to augment the insights they’re already providing to their own customer base.

TikTok is not officially announcing the API until later in September, but it is allowing its alpha partners to discuss their early work.

One such partner is Captiv8, which tested the API with an NRF top 50 retailer on one of their first TikTok campaigns. The retailer wanted to discover a diverse and inclusive group of TikTok creators to partner with on a new collaboration and wanted help with launching its own TikTok channel. Captiv8 says the branded content received nearly 10 million views, and the campaign resulted in a “significant increase” in several key metrics, which performed above the Nielsen average. This included familiarity (+4% above average), affinity (+6%), purchase intent (+7%) and recommendation intent (+9%).

Image Credits: TikTok Creator Marketplace website

Capitv8 is now working with TikTok’s API to pull in audience demographics, to centralize influencer offers and activations, and to provide tools to boost branded content and monitor campaign performance. On that last front, the API allows the company to pull in real-time metrics from the TikTok Creator Marketplace API — which means Capitv8 is now one of only a handful of third-party companies with access to TikTok first-party data.

Another early alpha partner is Influential, which shared it’s also leveraging the API to access first-party insights on audience demographics, growth trends, best-performing videos and more, to help its customer base of Fortune 1000 brands to identify the right creators for both native and paid advertising campaigns.

One partner it worked with was DoorDash, which launched multiple campaigns on TikTok with Influential’s help. It’s also planning to work with McDonald’s USA on several new campaigns that will run this year, including those focused on the chain’s new Crispy Chicken Sandwich and the return of Spicy McNuggets.

Other early alpha partners include Whalar and INCA. The latter’s integration stems from the larger TikTok global partnership with WPP, announced in February. That deal provided WPP agencies with early access to new advertising products marketing API integrations, and new AR offerings, among other things.

Creator marketplaces are now common to social media platforms with large influencer communities as this has become a standard way to advertise to online consumers, particularly the younger generation. Facebook today offers its Brands Collabs Manager, for both Facebook and Instagram; YouTube has BrandConnect; while Snapchat recently announced a marketplace to connect brands with Lens creators. These type of in-house platforms make it easier for marketers to work with the wider influencer community by offering trusted data on metrics that matter to brands’ own ROI, rather than relying on self-reported data from influencers or on data they have to manually collect themselves. And as campaigns run, marketers can compare how well their partnered creators are able to drive results to inform their future collaborations.

TikTok isn’t making a formal announcement about its new API at this time, telling TechCrunch the technology is still in pilot testing phases for the time being.

“Creators are the lifeblood of our platform, and we’re constantly thinking of new ways to make it easy for them to connect and collaborate with brands. We’re thrilled to be integrating with an elite group of trusted partners to help brands discover and work with diverse creators who can share their message in an authentic way,” said Melissa Yang, TikTok’s head of Ecosystem Partnerships, in a statement provided to select marketing company partners.

Update, 8/31/21, 3:22 PM ET: INCA is currently using the API in the U.S. and U.K. An earlier version said it was U.K. only, based on information provided by TikTok. We’ve since corrected. 

As 5G demand grows, Sitenna helps telcos find more cell tower locations, faster

By Danny Crichton

The buildout of 5G networks continues apace, with wide-scale deployments across much of the developed world. Yet, one of the largest challenges with closing the gaps in coverage maps are constraints on 5G transmissions. Because of the spectrum that 5G technology uses compared to 4G, telecom operators need to install many times more towers to deliver the advertised bandwidth with the same quality signal that users expect.

Installing cell towers is a daunting proposition though. An operator has to find exactly the right location in terms of line of sight to users, then make sure the location has power and internet access, and then negotiate a contract with the property owner to keep the tower there for a decade or more. Now repeat tens of thousands of times (and maybe even more).

Sitenna, which will debut next week as part of Y Combinator’s Summer 2021 Demo Day, wants to radically speed up the process of selecting tower sites and securing contracts, creating a marketplace for landlords, tower operators and telcos alike.

Tower siting and access to poles have in some cases emerged as national infrastructure priorities. In the United States, the challenges around installing new towers — and new towers quickly — became a top priority of the FCC during the Trump administration, which launched a 5G FAST Plan to try to ease regulations around tower installation.

Sitenna’s founders Daniel Campion and Brian Sexton saw an opportunity with such programs to help with the movement. Over the past year, they have built out what is essentially a marketplace that on one hand, helps property owners figure out if they have an asset that’s worth investigating for telecom usage, and on the other, helps tower operators select and digitally sign deals for installation.

Sitenna co-founder and CEO Daniel Campion. Image Credits: Sitenna

The company launched in the United Kingdom in June, and “it kind of resonated,” Campion said, noting that 65,000 real estate assets and roughly 15% of the towers in the UK are now on the platform. The company has kicked off two pilots with Vodafone and its tower provider Cornerstone. He said the company intends to enter the U.S. market in the first quarter of next year.

While the company is starting with a marketplace, like many startups today, it is also augmenting that marketplace with B2B SaaS tools. In its case, that means tools for telcos to manage the process of onboarding a new tower location and then managing the asset. “Once they find the site, they ping pong emails back and forth,” Campion said. “So we have built some tools to help them on their workflows.”

Sitenna’s platform allows landlords and tower operators to inspect and transact tower locations. Image Credits: Sitenna

While there is definitely a large wave of tower installations underway now with the transition to 5G wireless, that wave doesn’t mean that tower installation will suddenly dry up in a few years. Campion notes that there is a “continual refresh of 15-20% on the carrier side” due to everything from changing usage patterns and building redevelopment to just standard hardware replacement.

And of course, there is always 6G, which while completely amorphous today, is a real thing that I get invites to conferences for. There’s always going to be a next generation of wireless, and Sitenna wants to become the center for managing that infrastructure.

Apple lowers commissions on in-app purchases for news publishers who participate in Apple News

By Sarah Perez

Apple today is launching a new program that will allow subscription news organizations that participate in the Apple News app and meet certain requirements to lower their commission rate to 15% on qualifying in-app purchases taking place inside their apps on the App Store. Typically, Apple’s model for subscription-based apps involves a standard 30% commission during their first year on the App Store, which then drops to 15% in year two. But the new Apple News Partner Program, announced today, will now make 15% the commission rate for participants starting on day one.

There are a few caveats to this condition, and they benefit Apple. To qualify, the news publisher must maintain a presence on Apple News and they have to provide their content in the Apple News Format (ANF). The latter is the JavaScript Object Notation (JSON) format that’s used to create articles for Apple News which are optimized for Mac, iPhone and other Apple mobile devices. Typically, this involves a bit of setup to translate news articles from a publisher’s website or from their CMS (content management system) to the supported JSON format. For WordPress and other popular CMS’s, there are also plugins available to make this process easier.

Meanwhile, for publishers headquartered outside one of the four existing Apple News markets — the U.S., U.K., Australia or Canada — they can instead satisfy the program’s obligations by providing Apple with an RSS feed.

On the App Store, the partner app qualifying for the 15% commission must be used to deliver “original, professionally authored” news content, and they must offer their auto-renewable subscriptions using Apple’s in-app purchase system.

Image Credits: Apple

While there is some initial work involved in establishing the publisher’s connection to Apple News, it’s worth noting that most major publishers already participate on Apple’s platform. That means they won’t have to do any additional work beyond what they’re already doing in order to transition over to the reduced commission for their apps. However, the program also serves as a way to push news organizations to continue to participate in the Apple News ecosystem, as it will make more financial sense to do so across their broader business.

That will likely be an area of contention for publishers, who would probably prefer that the reduced App Store commission didn’t come with strings attached.

Some publishers already worry that they’re giving up too much control over their business by tying themselves to the Apple News ecosystem. Last year, for example, The New York Times announced it would exit its partnership with Apple News, saying that Apple didn’t allow it to have as direct a relationship with readers as it wanted, and it would rather drive readers to its own app and website.

Apple, however, would argue that it doesn’t stand in the way of publishers’ businesses — it lets them paywall their content and keep 100% of the ad revenue from the ads they sell. (If they can’t sell it all or would prefer Apple to do so on their behalf, they then split the commission with Apple, keeping 70% of revenues instead.) In addition, for the company’s Apple News+ subscription service — where the subscription revenue split is much higher — it could be argued that it’s “found money.” That is, Apple markets the service to customers the publisher hadn’t been able to attract on its own anyway.

The launch of the new Apple News Partner program comes amid regulatory scrutiny over how Apple manages its App Store business and more recently, proposed legislation aiming to address alleged anticompetitive issues both in the U.S. and in major App Store markets, like South Korea.

Sensing this shift in the market, Apple had already been working to provide itself cover from antitrust complaints and lawsuits — like the one underway now with Epic Games — by adjusting its App Store commissions. Last year, it launched the App Store Small Business Program, which also lowered commissions on in-app purchases from 30% to 15% — but only for developers earning up to $1 million in revenues.

This program may have helped smaller publishers, but it was clear some major publishers still weren’t satisfied. After the reduced commissions for small businesses were announced in November, the publisher trade organization Digital Content Next (DCN) — a representative for the AP, The New York Times, NPR, ESPN, Vox, The Washington Post, Meredith, Bloomberg, NBCU, The Financial Times, and others — joined the advocacy group and lobbying organization the Coalition for App Fairness (CAF) the very next month.

These publishers, who had previously written to Apple CEO Tim Cook to demand lower commissions — had other complaints about the revenue share beyond just the size of the split. They also didn’t want to be required to use Apple’s services for in-app purchases for their subscriptions, saying this “Apple tax” forces them to raise their prices for consumers.

It remains to be seen how these publishers will now react to the launch of the Apple News Partner program.

While it gives them a way to lower their App Store fees, it doesn’t address their broader complaints against Apple’s platform and its rules. If anything, it ties the lower fees to a program that locks them in further to the Apple ecosystem.

Apple, in a gesture of goodwill, also said today it would recommit support to three leading media non-profits, Common Sense Media, the News Literacy Project, and Osservatorio Permanente Giovani-Editori. These non-profits offer nonpartisan, independent media literacy programs, which Apple views as key to its larger mission to empower people to become smart and active news readers. Apple also said it would later announce further media literacy projects from other organizations. The company would not disclose the size of its commitment from a financial standpoint however, or discuss how much it has sent such organizations in the past.

“Providing Apple News customers with access to trusted information from our publishing partners has been our priority from day one,” said Eddy Cue, Apple’s senior vice president of Services, in a statement. “For more than a decade, Apple has offered our customers many ways to access and enjoy news content across our products and services. We have hundreds of news apps from dozens of countries around the world available in the App Store, and created Apple News Format to offer publishers a tool to showcase their content and provide a great experience for millions of Apple News users,” he added.

More details about the program and the application form will be available at the News Partner Program website.

UK names John Edwards as its choice for next data protection chief as gov’t eyes watering down privacy standards

By Natasha Lomas

The UK government has named the person it wants to take over as its chief data protection watchdog, with sitting commissioner Elizabeth Denham overdue to vacate the post: The Department of Digital, Culture, Media and Sport (DCMS) today said its preferred replacement is New Zealand’s privacy commissioner, John Edwards.

Edwards, who has a legal background, has spent more than seven years heading up the Office of the Privacy Commissioner In New Zealand — in addition to other roles with public bodies in his home country.

He is perhaps best known to the wider world for his verbose Twitter presence and for taking a public dislike to Facebook: In the wake of the 2018 Cambridge Analytica data misuse scandal Edwards publicly announced that he was deleting his account with the social media — accusing Facebook of not complying with the country’s privacy laws.

An anti-‘Big Tech’ stance aligns with the UK government’s agenda to tame the tech giants as it works to bring in safety-focused legislation for digital platforms and reforms of competition rules that take account of platform power.

Official announcement

Government announces preferred candidate for Information Commissioner – https://t.co/2fri3ROyhm https://t.co/i8b4OBcwzC

— John Edwards (@JCE_PC) August 26, 2021

If confirmed in the role — the DCMS committee has to approve Edwards’ appointment; plus there’s a ceremonial nod needed from the Queen — he will be joining the regulatory body at a crucial moment as digital minister Oliver Dowden has signalled the beginnings of a planned divergence from the European Union’s data protection regime, post-Brexit, by Boris Johnson’s government.

Dial back the clock five years and prior digital minister, Matt Hancock, was defending the EU’s General Data Protection Regulation (GDPR) as a “decent piece of legislation” — and suggesting to parliament that there would be little room for the UK to diverge in data protection post-Brexit.

But Hancock is now out of government (aptly enough after a data leak showed him breaching social distancing rules by kissing his aide inside a government building), and the government mood music around data has changed key to something far more brash — with sitting digital minister Dowden framing unfettered (i.e. deregulated) data-mining as “a great opportunity” for the post-Brexit UK.

For months, now, ministers have been eyeing how to rework the UK’s current (legascy) EU-based data protection framework — to, essentially, reduce user rights in favor of soundbites heavy on claims of slashing ‘red tape’ and turbocharging data-driven ‘innovation’. Of course the government isn’t saying the quiet part out loud; its press releases talk about using “the power of data to drive growth and create jobs while keeping high data protection standards”. But those standards are being reframed as a fig leaf to enable a new era of data capture and sharing by default.

Dowden has said that the emergency data-sharing which was waived through during the pandemic — when the government used the pressing public health emergency to justify handing NHS data to a raft of tech giantsshould be the ‘new normal’ for a post-Brexit UK. So, tl;dr, get used to living in a regulatory crisis.

A special taskforce, which was commissioned by the prime minister to investigate how the UK could reshape its data policies outside the EU, also issued a report this summer — in which it recommended scrapping some elements of the UK’s GDPR altogether — branding the regime “prescriptive and inflexible”; and advocating for changes to “free up data for innovation and in the public interest”, as it put it, including pushing for revisions related to AI and “growth sectors”.

The government is now preparing to reveal how it intends to act on its appetite to ‘reform’ (read: reduce) domestic privacy standards — with proposals for overhauling the data protection regime incoming next month.

Speaking to the Telegraph for a paywalled article published yesterday, Dowden trailed one change that he said he wants to make which appears to target consent requirements — with the minister suggesting the government will remove the legal requirement to gain consent to, for example, track and profile website visitors — all the while framing it as a pro-consumer move; a way to do away with “endless” cookie banners.

Only cookies that pose a ‘high risk’ to privacy would still require consent notices, per the report — whatever that means.

Oliver Dowden, the UK Minister for Digital, Culture, Media and Sport, says that the UK will break away from GDPR, and will no longer require cookie warnings, other than those posing a 'high risk'.https://t.co/2ucnppHrIm pic.twitter.com/RRUdpJumYa

— dan barker (@danbarker) August 25, 2021

“There’s an awful lot of needless bureaucracy and box ticking and actually we should be looking at how we can focus on protecting people’s privacy but in as light a touch way as possible,” the digital minister also told the Telegraph.

The draft of this Great British ‘light touch’ data protection framework will emerge next month, so all the detail is still to be set out. But the overarching point is that the government intends to redefine UK citizens’ privacy rights, using meaningless soundbites — with Dowden touting a plan for “common sense” privacy rules — to cover up the fact that it intends to reduce the UK’s currently world class privacy standards and replace them with worse protections for data.

If you live in the UK, how much privacy and data protection you get will depend upon how much ‘innovation’ ministers want to ‘turbocharge’ today — so, yes, be afraid.

It will then fall to Edwards — once/if approved in post as head of the ICO — to nod any deregulation through in his capacity as the post-Brexit information commissioner.

We can speculate that the government hopes to slip through the devilish detail of how it will torch citizens’ privacy rights behind flashy, distraction rhetoric about ‘taking action against Big Tech’. But time will tell.

Data protection experts are already warning of a regulatory stooge.

While the Telegraph suggests Edwards is seen by government as an ideal candidate to ensure the ICO takes a “more open and transparent and collaborative approach” in its future dealings with business.

In a particularly eyebrow raising detail, the newspaper goes on to report that government is exploring the idea of requiring the ICO to carry out “economic impact assessments” — to, in the words of Dowden, ensure that “it understands what the cost is on business” before introducing new guidance or codes of practice.

All too soon, UK citizens may find that — in the ‘sunny post-Brexit uplands’ — they are afforded exactly as much privacy as the market deems acceptable to give them. And that Brexit actually means watching your fundamental rights being traded away.

In a statement responding to Edwards’ nomination, Denham, the outgoing information commissioner, appeared to offer some lightly coded words of warning for government, writing [emphasis ours]: “Data driven innovation stands to bring enormous benefits to the UK economy and to our society, but the digital opportunity before us today will only be realised where people continue to trust their data will be used fairly and transparently, both here in the UK and when shared overseas.”

The lurking iceberg for government is of course that if wades in and rips up a carefully balanced, gold standard privacy regime on a soundbite-centric whim — replacing a pan-European standard with ‘anything goes’ rules of its/the market’s choosing — it’s setting the UK up for a post-Brexit future of domestic data misuse scandals.

You only have to look at the dire parade of data breaches over in the US to glimpse what’s coming down the pipe if data protection standards are allowed to slip. The government publicly bashing the privacy sector for adhering to lax standards it deregulated could soon be the new ‘get popcorn’ moment for UK policy watchers…

UK citizens will surely soon learn of unfair and unethical uses of their data under the ‘light touch’ data protection regime — i.e. when they read about it in the newspaper.

Such an approach will indeed be setting the country on a path where mistrust of digital services becomes the new normal. And that of course will be horrible for digital business over the longer run. But Dowden appears to lack even a surface understanding of Internet basics.

The UK is also of course setting itself on a direct collision course with the EU if it goes ahead and lowers data protection standards.

This is because its current data adequacy deal with the bloc — which allows for EU citizens’ data to continue flowing freely to the UK is precariously placed — was granted only on the basis that the UK was, at the time it was inked, still aligned with the GDPR.

So Dowden’s rush to rip up protections for people’s data presents a clear risk to the “significant safeguards” needed to maintain EU adequacy.

Back in June, when the Commission signed off on the UK’s adequacy deal, it clearly warned that “if anything changes on the UK side, we will intervene”. Moreover, the adequacy deal is also the first with a baked in sunset clause — meaning it will automatically expire in four years.

So even if the Commission avoids taking proactive action over slipping privacy standards in the UK there is a hard deadline — in 2025 — when the EU’s executive will be bound to look again in detail at exactly what Dowden & Co. have wrought. And it probably won’t be pretty.

The longer term UK ‘plan’ (if we can put it that way) appears to be to replace domestic economic reliance on EU data flows — by seeking out other jurisdictions that may be friendly to a privacy-light regime governing what can be done with people’s information.

Hence — also today — DCMS trumpeted an intention to secure what it billed as “new multi-billion pound global data partnerships” — saying it will prioritize striking ‘data adequacy’ “partnerships” with the US, Australia, the Republic of Korea, Singapore, and the Dubai International Finance Centre and Colombia.

Future partnerships with India, Brazil, Kenya and Indonesia will also be prioritized, it added — with the government department cheerfully glossing over the fact it’s UK citizens’ own privacy that is being deprioritized here.

“Estimates suggest there is as much as £11 billion worth of trade that goes unrealised around the world due to barriers associated with data transfers,” DCMS writes in an ebullient press release.

As it stands, the EU is of course the UK’s largest trading partner. And statistics from the House of Commons library on the UK’s trade with the EU — which you won’t find cited in the DCMS release — underline quite how tiny this potential Brexit ‘data bonanza’ is, given that UK exports to the EU stood at £294 billion in 2019 (43% of all UK exports).

So even the government’s ‘economic’ case to water down citizens’ privacy rights looks to be puffed up with the same kind of misleadingly vacuous nonsense as ministers’ reframing of a post-Brexit UK as ‘Global Britain’.

Everyone hates cookies banners, sure, but that’s a case for strengthening not weakening people’s privacy — for making non-tracking the default setting online and outlawing manipulative dark patterns so that Internet users don’t constantly have to affirm they want their information protected. Instead the UK may be poised to get rid of annoying cookie consent ‘friction’ by allowing a free for all on people’s data.

 

PayPal expands the ability to buy, hold and sell cryptocurrency to the UK

By Sarah Perez

PayPal will now allow users outside the U.S. to buy, hold and sell cryptocurrency for the first time. The company announced today the launch of a new service that will allow customers in the U.K. to select between four types of cryptocurrencies — including Bitcoin, Ethereum, Litecoin, and Bitcoin Cash — which can be purchased using a connected bank account or debit card.

The company first rolled out support for cryptocurrency in the U.S. last fall, in partnership with Paxos Trust Company. That service reached all U.S. customers as of mid-November. PayPal-owned Venmo also added support for cryptocurrency last spring.

U.K. customers who want to purchase cryptocurrency can now do so via the PayPal website or mobile app, where they can choose from pre-determined purchase amounts or enter another amount of their own choosing. PayPal says users will be able to start buying as little as £1 of cryptocurrency, if they choose. There are, however, transaction fees and currency conversion fees when buying and selling cryptocurrency, the company notes. These vary based on the amount of cryptocurrency being bought or sold.

The new service itself is very much like PayPal’s U.S. offering with one notable exception. PayPal told us it’s tailoring the transaction limits for its U.K. customers. At launch, the maximum amount for any single crypto purchase is £15,000. The maximum amount for purchases over a 12-month period is £35,000. In the U.S., the company had initially launched the service with a $20,000 weekly purchase limit. But it upped that to $100,000 in July and dropped its annual purchase limit.

The company also told TechCrunch the U.K. made sense as the first international expansion for its cryptocurrency service because it’s a fintech hub as well as PayPal’s second-largest market globally, where it has a sizable base of consumer customers.

“We think that we’re going to be helping the cryptocurrency ecosystem develop further in the U.K. In the U.S, we knew there was high demand for this service. Yet we were surprised to see the level of customer engagement for PayPal’s in-app crypto service from day one,” a PayPal spokesperson said. “Since we’ve launched, we’ve seen incredible and sustained engagement from our users. Consumers who buy, hold and sell  cryptocurrency on our platform in the US log on at 2x their previous rate,” they added.

Cryptocurrency will also be a key feature in PayPal’s forthcoming “super app,” which is due to roll out over the next several months.

The company would not comment on if or when it would expand its other cryptocurrency services to the U.K., including its more recently launched “Checkout with Crypto,” which allows customers to checkout using their cryptocurrency at millions of online businesses by first converting the crypto needed for the transaction into fiat currency. Instead, PayPal said it wanted to first learn and observe how its U.K. customers adopt the new offering to buy, hold and sell cryptocurrency before rolling out more features and functionality.

Beyond its support for cryptocurrency in its own apps, PayPal’s venture capital arm has also made a number investments in crypto and the blockchain over the past months, including by participating in the $14 million Series A for cryptocurrency risk management software TRM Labs; in the $40 million Series A for digital asset trading infrastructure company, Talos; and in the $100 million Series A for crypto tax software company TaxBit.

“The pandemic has accelerated digital change and innovation across all aspects of our lives— including the digitization of money and greater consumer adoption of digital financial services,” Jose Fernandez da Ponte, Vice President and General Manager, Blockchain, Crypto and Digital Currencies at PayPal, in a statement.

“Our global reach, digital payments expertise, and knowledge of consumer and businesses, combined with rigorous security and compliance controls provides us the unique opportunity, and the responsibility, to help people in the U.K. to explore cryptocurrency. We are committed to continue working closely with regulators in the U.K., and around the world, to offer our support—and meaningfully contribute to shaping the role digital currencies will play in the future of global finance and commerce,” he added.

Currently, PayPal offers support for cryptocurrency in the U.S., excluding Hawaii, and U.S. territories, in addition to the U.K., but says it’s exploring the potential for digital currencies through partnerships with licensed and regulated cryptocurrency platforms and with central banks elsewhere in the world.

Nvidia-ARM takeover raises serious antitrust concerns, finds UK’s CMA

By Natasha Lomas

The U.K.’s competition watchdog has raised serious concerns about Nvidia’s proposed takeover of chip designer, ARM.

Its assessment was published today by the government, which will now need to decide whether to ask the Competition and Markets Authority (CMA) to carry out an in-depth probe into the proposed acquisition.

In the executive summary of the CMA’s report for the government the watchdog sets out concerns that if the deal were to go ahead the merged business would have the ability and incentive to harm the competitiveness of Nvidia’s rivals by restricting access to ARM’s IP which is used by companies that produce semiconductor chips and related products, in competition with Nvidia.

The CMA is worried that the loss of competition could stifle innovation across a number of markets — including data centres, gaming, the “internet of things”, and self-driving cars, with the resulting risk of more expensive or lower-quality products for businesses and consumers.

A behavioral remedy offered by Nvidia was rejected by the CMA — which has recommended moving to an in-depth “Phase 2” investigation of the proposed merger on competition grounds. 

Commenting in a statement, CEO Andrea Coscelli said: “We’re concerned that Nvidia controlling Arm could create real problems for NVIDIA’s rivals by limiting their access to key technologies, and ultimately stifling innovation across a number of important and growing markets. This could end up with consumers missing out on new products, or prices going up.

“The chip technology industry is worth billions and is vital to products that businesses and consumers rely on every day. This includes the critical data processing and datacentre technology that supports digital businesses across the economy, and the future development of artificial intelligence technologies that will be important to growth industries like robotics and self-driving cars.”

Nvidia has been contacted for comment. Update: The company has now sent this statement:

We look forward to the opportunity to address the CMA’s initial views and resolve any concerns the Government may have. We remain confident that this transaction will be beneficial to Arm, its licensees, competition, and the UK.

In a statement on its website, the Department for Digital, Media, Culture and Sport said the U.K.’s digital secretary is now “considering the relevant information contained in the full report” and will make a decision on whether to ask the CMA to conduct a ‘Phase Two’ investigation “in due course”.

“There is no set period in which this decision must be made, but it must take into account the need to make a decision as soon as reasonably practicable to reduce uncertainty,” it added. 

The proposed merger has faced considerable domestic opposition with opponents including one of the co-founders of ARM calling for it to be blocked.

CRANQ launches to save developers time when adding text code

By Mike Butcher

When adding text code from a 3rd party source into a platform, the process is an unavoidable and time-consuming chore. Developers currently spend a large part of their day reviewing things like “NPM” packages, and such. There are developer libraries and text code platforms like JetBrains and Visual Studio, but these don’t entirely solve the problem. A UK startup thinks it might have the answer.

CRANQ is a Low-Code IDE (integrated dev environment, like Visual Studio) which provides component authoring, with, it says, a lot of re-usability. Its focus on standardized datatypes and ports means that intent can be easily checked, says the company. It’s now raised a Pre-Seed £1m funding from Venrex and Profounders.

Developers build their code in the IDE visually, using a drag-and-drop interface. So far it’s been used to built a version of the Educai.io back-end, and Alpha trials will begin this summer.

The cofounders are Toby Rowland and Dan Stocker. Rowland, CEO, is a serial entrepreneur, best-known for co-founding King.com in 2003. His most recent digital startup – Mangahigh.com – was acquired by Westermann Publishing in 2018, and subsequently, Rowland launched RyzeHydrogen.comfor the hydrogen-for-transport market. Stocker, CTO, is an experienced developer, software architect, and inventor. Among other projects, Dan conceived and created Giant, a React competitor, in 2012.

CRANQ’s initial focus on testing will also bring it into competition with Postman.com. The Workflow space (Zapier, N8N etc.) also overlaps with CRANQ.

But CRANQ is addressing a sizeable market. The microservices market is estimated to be worth $32bn in 2023, growing at 16% you, according to some estimates.

In the wake of recent racist attacks, Instagram rolls out more anti-abuse features

By Sarah Perez

Instagram today is rolling out a set of new features aimed at helping people protect their accounts from abuse, including offensive and unwanted comments and messages. The company will introduce tools for filtering abusive direct message (DM) requests as well as a way for users to limit other people from posting comments or sending DMs during spikes of increased attention — like when going viral. In addition, those who attempt to harass others on the service will also see stronger warnings against doing so, which detail the potential consequences.

The company recently confirmed it was testing the new anti-harassment tool, Limits, which Instagram head Adam Mosseri referenced in a video update shared with the Instagram community last month. The feature aims to give Instagram users an easy way to temporarily lock down their accounts when they’re targeted with a flood of harassment.

Such an addition could have been useful to combat the recent racist attacks that took place on Instagram following the Euro 2020 final, which saw several England footballers viciously harassed by angry fans after the team’s defeat. The incidents, which had included racist comments and emoji, raised awareness of how little Instagram users could do to protect themselves when they’ve gone viral in a negative way.

Image Credits: Instagram

During these sudden spikes of attention, Instagram users see an influx of unwanted comments and DM requests from people they don’t know. The Limits feature allows users to choose who can interact with you during these busy times.

From Instagram’s privacy settings, you’ll be able to toggle on limits that restrict accounts that are not following you as well as those belonging to recent followers. When limits are enabled, these accounts can’t post comments or send DM requests for a period of time of your choosing, like a certain number of days or even weeks.

Twitter had been eyeing a similar set of tools for users who go viral, but has yet to put them into action.

Instagram’s Limits feature had already been in testing, but is now becoming globally available.

The company says it’s currently experimenting with using machine learning to detect a spike in comments and DMs in order to prompt people to turn on Limits with a notification in the Instagram app.

Another feature, Hidden Words, is also being expanded.

Designed to protect users from abusive DM requests, Hidden Words automatically filters requests that contain offensive words, phrases and emojis and places them into a Hidden Folder, which you can choose to never view. It also filters out requests that are likely spam or are otherwise low-quality. Instagram doesn’t provide a list of which words it blocks to prevent people from gaming the system, but it has now updated that database with new types of offensive language, including strings of emoji — like those that were used to abuse the footballers — and included them in the filter.

Hidden Words had already been rolled out to a handful of countries earlier this year, but will reach all Instagram users globally by the end of the month. Instagram will push accounts with a larger following to use it, with messages both in their DM inbox and in their Stories tray.

The feature was also expanded with a new option to “Hide More Comments,” which would allow users to easily hide comments that are potentially harmful, but don’t go against Instagram’s rules.

Another change will involve the warnings that are displayed when someone posts a potentially abusive comment. Already, Instagram would warn users when they first try to post a comment, and it would later display an even stronger warning when they tried to post potentially offensive comments multiple times. Now, the company says users will see the stronger message the first time around.

Image Credits: Instagram

The message clearly states the comment may “contain racist language” or other content that goes against its guidelines, and reminds users that the comment may be hidden when it’s posted as a result. It also warns the user if they continue to break the community guidelines, their account “may be deleted.”

While systems to counteract online abuse are necessary and underdeveloped, there’s also the potential for such tools to be misused to silence dissent. For example, if a creator was spreading misinformation or conspiracies, or had people calling them out in the comments, they could turn to anti-abuse tools to hide the negative interactions. This would allow the creator to paint an inaccurate picture of their account as one that was popular and well-liked. And that, in turn, can be leveraged into marketing power and brand deals.

As Instagram puts more power into creators’ hands to handle online abuse, it has to weigh the potential impacts those tools have on the overall creator economy, too.

“We hope these new features will better protect people from seeing abusive content, whether it’s racist, sexist, homophobic or any other type of abuse,” noted Mosseri, in an announcement about the changes. “We know there’s more to do, including improving our systems to find and remove abusive content more quickly, and holding those who post it accountable.”

Element Ventures pulls in $130M to double-down on the fintech enterprise trend

By Mike Butcher

With the rise of Open Banking, PSD2 Regulation, insurtech and the whole, general fintech boom, tech investors have realized there is an increasing place for dedicated funds which double down on this ongoing movement. When you look at the rise of banking-as-a-service offerings, payments platforms, insurtech, asset management and infrastructure providers, you realize there is a pretty huge revolution going on.

European fintech companies have raised $12.3 billion in 2021 according to Dealroom, but the market is still wide open for a great deal more funding for B2B fintech startups.

So it’s no surprise that B2B fintech-focused Element Ventures has announced a $130 million fund to double down on this new fintech enterprise trend.

Founded by financial services veterans Stephen Gibson and Michael McFadgen, and joined by Spencer Lake (HSBC’s former vice chairman of Global Banking and Markets), Element is backed by finance-oriented LPs and some 30 founders and executives from the sector.

Element says it will focus on what it calls a “high conviction investment strategy,” which will mean investing in only around a handful of companies a year (15 for the fund in total) but, it says, providing a “high level of support” to its portfolio.

So far it has backed B2B fintech firms across the U.K. and Europe, including Hepster (total raised $10 million), the embedded insurance platform out of Germany which I recently reported on; Billhop (total raised $6.7 million), the B2B payment network out of Sweden; Coincover (total raised $11.6 million), a cryptocurrency recovery service out of the U.K.; and Minna (total raised $25 million), the subscription management platform out of Sweden.

Speaking to me over a call, McFadgen, partner at Element Ventures, said: “Stephen and I have been investing in B2B fintech together for quite a long time. In 2018 we had the opportunity to start element and Spencer came on board in 2019. So Element as an independent venture firm is really a continuation of a strategy we’ve been involved in for a long time.”

Gibson added: “We are quite convinced by the European movement and the breakthrough these fintech and insurtech firms in Europe are having. Insurance has been a desert for innovation and that is changing. And you can see that we’re sort of trying to build a network around companies that have those breakthrough moments and provide not just capital but all the other things we think are part of the story. Building the company from A to C and D is the area that we try and roll our sleeves up and help these firms.”

Element says it also will be investing in the U.S. and Asia.

UK’s Mindtech raises $3.25M from In-Q-Tel, among others, to train CCTV cameras on synthetic humans

By Mike Butcher

Imagine a world where no one’s privacy is breached, no faces are scanned into a gargantuan database, and no privacy laws are broken. This is a world that is fast approaching. Could companies simply dump the need for real-world CCTV footage, and switch to synthetic humans, acting out potential scenarios a million times over? That’s the tantalizing prospect of a new UK startup that has attracted funding from an influential set of investors.

UK-based Mindtech Global has developed what it describes as an end-to-end synthetic data creation platform. In plain English, its system can imagine visual scenarios such as someone’s behavior inside a store, or crossing the street. This data is then used to train AI-based computer vision systems for customers such as big retailers, warehouse operators, healthcare, transportation systems and robotics. It literally trains a ‘synthetic’ CCTV camera inside a synthetic world.

It’s now closed a $3.25 million early-stage funding round led by UK regional backer NPIF – Mercia Equity Finance, with Deeptech Labs and In-Q-Tel.

That last investor is significant. In-Q-Tel invests in startups that support US intelligence capabilities and is based in Arlington, Virginia…

Mindtech’s Chameleon platform is designed to help computers understand and predict human interactions. As we all know, current approaches to training AI vision systems require companies to source data such as CCTV footage. The process is fraught with privacy issues, costly, and time-consuming. Mindtech says Chameleon solves that problem, as its customers quickly “build unlimited scenes and scenarios using photo-realistic smart 3D models”.

An added bonus is that these synthetic humans can be used to train AI vision systems to weed out human failings around diversity and bias.

Mindtech CEO Steve Harris

Mindtech CEO Steve Harris

Steve Harris, CEO, Mindtech said: “Machine learning teams can spend up to 80% of their time sourcing, cleaning, and organizing training data. Our Chameleon platform solves the AI training challenge, freeing the industry to focus on higher-value tasks like AI network innovation. This round will enable us to accelerate our growth, enabling a new generation of AI solutions that better understand the way humans interact with each other and the world around them.”

So what can you do with it? Consider the following: A kid slips from its parent’s hand at the mall. The synthetic CCTV running inside Mindtech’s scenario is trained thousands of times over how to spot it in real-time and alert staff. Another: a delivery robot meets kids playing in a street and works out how to how to avoid them. Finally: a passenger on the platform is behaving erratically too close to the rails – the CCTV is trained to automatically spot them and send help.

Nat Puffer, Managing Director (London), In-Q-Tel commented: “Mindtech impressed us with the maturity of their Chameleon platform and their commercial traction with global customers. We’re excited by the many applications this platform has across diverse markets and its ability to remove a significant roadblock in the development of smarter, more intuitive AI systems.”

Miles Kirby, CEO, Deeptech Labs said: “As a catalyst for deeptech success, our investment, and accelerator program supports ambitious teams with novel solutions and the appetite to build world-changing companies. Mindtech’s highly-experienced team are on a mission to disrupt the way AI systems are trained, and we’re delighted to support their journey.”

There is of course potential for darker applications, such a spotting petty theft inside supermarkets, or perhaps ‘optimising’ hard-pressed warehouse workers in some dystopian fashion. However, in theory, Mindtech’s customers can use this platform to rid themselves of the biases of middle-managers, and better serve customers.

Untitled Ventures joins the scramble for Russian & Eastern European startups with a $118M warchest

By Mike Butcher

Sorry Mr. Putin, but there’s a race on for Russian and Eastern European founders. And right now, those awful capitalists in the corrupt West are starting to out-gun the opposition! But seriously… only the other day a $100 million fund aimed at Russian speaking entrepreneurs appeared, and others are proliferating.

Now, London-based Untitled Ventures plans to join their fray with a €100 million / $118M for its second fund to invest in “ambitious deep tech startups with eastern European founders.”

Untitled says it is aiming at entrepreneurs who are looking to relocate their business or have already HQ’ed in Western Europe and the USA. That’s alongside all the other existing Western VCs who are – in my experience – always ready and willing to listen to Russian and Eastern European founders, who are often known for their technical prowess.

Untitled is going to be aiming at B2B, AI, agritech, medtech, robotics, and data management startups with proven traction emerging from the Baltics, CEE, and CIS, or those already established in Western Europe

LPs in the fund include Vladimir Vedeenev, a founder of Global Network Management>. Untitled also claims to have Google, Telegram Messenger, Facebook, Twitch, DigitalOcean, IP-Only, CenturyLinks, Vodafone and TelecomItaly as partners.

Oskar Stachowiak, Untitled Ventures Managing Partner, said: “With over 10 unicorns, €1Bn venture funding in 2020 alone, and success stories like Veeam, Semrush, and Wrike, startups emerging from the fast-growing regions are the best choice to focus on early-stage investment for us. Thanks to the strong STEM focus in the education system and about one million high-skilled developers, we have an ample opportunity to find and support the rising stars in the region.”

Konstantin Siniushin, the Untitled Ventures MP said: “We believe in economic efficiency and at the same time we fulfill a social mission of bringing technological projects with a large scientific component from the economically unstable countries of the former USSR, such as, first of all, Belarus, Russia and Ukraine, but not only in terms of bringing sales to the world market and not only helping them to HQ in Europe so they can get next rounds of investments.”

He added: “We have a great experience accumulated earlier in the first portfolio of the first fund, not just structuring business in such European countries as, for example, Luxembourg, Germany, Great Britain, Portugal, Cyprus and Latvia, but also physically relocating startup teams so that they are perceived already as fully resident in Europe and globally.”

To be fair, it is still harder than it needs to be to create large startups from Eastern Europe, mainly because there is often very little local capital. However, that is changing, with the launch recently of CEE funds such as Vitosha Venture Partners and Launchub Ventures, and the breakout hit from Romania that was UIPath.

The Untitled Ventures team:
• Konstantin Siniushin, a serial tech entrepreneur
• Oskar Stachowiak, experienced fund manager
• Mary Glazkova, PR & Comms veteran
• Anton Antich, early stage investor and an ex VP of Veeam, a Swiss cloud data management company
acquired by Insight Venture Partners for $5bln
• Yulia Druzhnikova, experienced in taking tech companies international
• Mark Cowley, who has worked on private and listed investments within CEE/Russia for over 20 years

Untitled Ventures portfolio highlights – Fund I
Sizolution: AI-driven size prediction engine, based in Germany
Pure app – spontaneous and impersonal dating app, based in Portugal
Fixar Global –  efficient drones for commercial use-cases, based in Latvia,
E-contenta – based in Poland
SuitApp – AI based mix-and-match suggestions for fashion retail, based in Singapore
• Sarafan.tech, AI-driven recognition, based in the USA
Hello, baby – parental assistant, based in the USA
Voximplant – voice, video and messaging cloud communication platform, based in the USA (exited)

Cyber risk startup Safe Security lands $33M from UK telco BT

By Carly Page

Safe Security, a Silicon Valley cyber risk management startup, has secured a $33 million investment from U.K. telco BT. 

Founded in 2012, Safe Security — formerly known as Lucideus — helps organizations to measure and mitigate enterprise-wide cyber risk using its security assessment framework for enterprises (SAFE) platform. The service, which is used by a number of companies including Facebook, Softbank and Xiaomi, helps businesses understand their likelihood of suffering a major cyberattack, calculates a financial cost to customers’ risks and provides actionable insight on the steps that can be taken to address them.

This funding round saw participation from Safe Security’s existing investors, including former Cisco chairman and chief executive John Chambers, and brings the total amount raised by Safe Security to $49.2 million.

BT said the investment, which is its first major third-party investment in cybersecurity since 2006, reflected its plans to grow rapidly in the sector. Philip Jansen, BT CEO said: “Cybersecurity is now at the top of the agenda for businesses and governments, who need to be able to trust that they’re protected against increasing levels of attack. 

“Already one of the world’s leading providers in a highly fragmented security market, this investment is a clear sign of BT’s ambition to grow further.”

The startup’s co-founder and chief executive Saket Modi said he was “delighted” to be working with BT.

“By aligning BT’s global reach and capabilities with SAFE’s ability to provide real-time visibility on cyber risk posture, we are going to fundamentally change how security is measured and managed across the globe,” he said.

As part of the investment, which will see Safe Security double its engineering team by the end of the year, BT will combine the SAFE platform with its managed security services, and gain exclusive rights to use and sell SAFE to businesses and public sector bodies in the UK. BT will also work collaboratively with Safe Security to develop future products, according to an announcement from the company.

Safe Security’s competitors include UpGuard, Exabeam, VisibleRisk.

Employee mental health platform Oliva raises $2.2M pre-seed round led by Moonfire Ventures

By Mike Butcher

Just as many other employee services have gone digital, so too is mental health. In the consumer space there are growing startups like Equoo, but the race is now on for the employee.

And since telemedicine has gone digital and video-based, so too is mental health provision. A number of companies are already playing in this space, including Spill Chat, On Mind, Lyra Health, Modern Health, Ginger and TalkSpace For Business.

Oliva’s take on this is not to create a marketplace or pre-recorded videos, but to put trained professionals in front of employees to talk directly to them. And there is even science to back it up. Indeed, some research suggests Psychotherapy via the internet is as good if not better than face-to-face consultations.

Oliva’s on-demand, professional-led mental healthcare for employees and managers has now attracted investment to the tune of a $2.2m pre-seed investment round, led by Moonfire Ventures, the new seed-stage VC firm from Atomico co-founder Mattias Ljungman.

The UK and Spain-based startup has also attracted angel investment from tech executives from Amazon, Booking.com, DogBuddy, Typeform, Hotjar, TravelPerk, and more.

Oliva is founded by Javier Suarez, who previously co-founded TravelPerk, and Sançar Sahin, who previously led marketing teams at Hotjar and Typeform, so both are well blooded in startups.

Suarez says he was inspired to create a mental health startup after the rigors of TravelPerk: “Employees are a company’s greatest asset – the better they feel, the better your company performs. But organizations are not set up to support their employees’ mental health in and outside of the workplace, which creates a massive problem for teammates, managers, and the organization as a whole. We’ve launched Oliva to give employees access to comprehensive online mental healthcare and to help organizations overcome the related challenges—from attracting & retaining talent and training managers to supporting remote workers.”

Privacy is addressed via the use of a secure and encrypted personal portal, where employees can chat with a care provider who matches them with a professional. They get 1-to-1 video therapy sessions from a range of mental health professionals, and can also track their progress. 

The team has also attracted Dr. Sarah Bateup, who has spent over two decades teaching and training mental healthcare professionals, who is now Chief Clinical Officer.

She said: “Oliva improves the way mental healthcare is accessed, supported, and paid for, while also adding more ongoing oversight and accountability to the process. Our ambition is for Oliva to be viewed as a badge of quality and set a new standard for workplace mental healthcare.”

Mattias Ljungman, Founder at Moonfire Ventures, added: “Mental health has been an overlooked area of care and wellbeing, especially in the workplace. Oliva’s founders are the only team we’ve seen taking a holistic, impact-driven approach to supporting mental health. While employer-funded mental health is becoming a well-established model in the US, Oliva is the first to bring a truly comprehensive approach to UK and European businesses.”

Oliva platform is integrated with Slack, providing employees with mental health drop-in sessions, therapy courses, and dedicated training and support for managers.

Percent raises $5M, aiming to become the ‘Stripe for donations’ to good causes

By Mike Butcher

What with the planet collapsing and democracy under constant attack from all quarters – you know, just the usual – one or two members of the global population have, idly or not, wondered if the private sector might want to step up? I mean, as well as shooting billionaires into space. At the same time, even! Luckily, many businesses want to do better. But there are one or two hurdles. Incorporating “purpose” into their digital offering, such as donating to a non-profit at the end of a moving documentary, is harder than it looks. Businesses don’t have the capacity to build in donation software; they can’t continually verify and audit good causes; and processing donations is fraught with legal complications, compliance, and regulatory risk. What is to be done?

Pennies is one organization that bills itself as the digital equivalent of the traditional charity collection box. However, perhaps what we need is… drum roll… an API?

Step forward Percent. Founded in 2017, Percent provides an API allowing firms to customers to donate to good causes, matching a donation made when making a payment, or rounding up a financial transaction, for instance.

It’s now closed a $5M venture round led by Morpheus Ventures, allowing it to expand in the US, as well as its existing presence in the UK and Australia. The UK’s Nationwide Building Society – also an early investor and customer of the product – is a co-investor in the round.

The company says its API-first platform takes care of auditing and compliance processes to prevent fraud and money-laundering whilst also parsing tax-efficient disbursements of funds into 200 countries worldwide. It says 7 million non-profit causes have been added to the platform and it’s vetted the potential recipients of donations.

Henry Ludlam, Founder, and CEO of Percent, said: “Percent was founded to become the global API-first infrastructure behind all giving. This will be the foundation for a better, fairer future of capitalism in which every financial transaction has social and environmental good built into it.”

In an interview I asked him if the pandemic had accelerated the opportunity: “Because of COVID, suddenly now we have brands that are really desperate to build purpose into their business in a way that they just weren’t doing 18 months ago. It’s really been an amazing shift. We’ve just seen a huge shift in what consumers expect from businesses. Consumers expect businesses to build purpose into what they do now.”

He said that the product could be even built into – surprise! – streaming services: “Say you’ve seen a documentary. And at the end of the documentary, you feel particularly moved, like you watched a David Attenborough or something like that. You could then actually be able to quickly and easily build donations into the end of it. So using our API, it would pull up a list of nonprofits, so right there and then the customer could make a donation. We’re also working with a crypto platform where you can round down your transactions and donate to any nonprofit as well. There’s loads of really cool stuff we are working on which is coming out soon.”
 
Kristian Blaszczynski, Managing Partner of Morpheus Ventures, said: “With the events of the last several years, it has become more apparent that aligning brands with purpose is driving consumer behavior and spend. However, today, the process of donating to non-profits is incredibly archaic, manual, and inefficient… Percent’s API-first platform abstracts away all of these complexities and automates the processes, allowing businesses to align closer to their stakeholders and focus on their core business.”

Percent could well be pushing at an open door. Kantar Research says that only 22% of people could name a brand they thought was doing a good job addressing issues such as climate change, plastic waste, and water pollution. On the flip side, 95% of businesses think that “purpose” is at the heart of what they do. The disparity could not be more stark.

Is Percent the stripe for donations? We’re about to find out.

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