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Africa Roundup: DHL invests in MallforAfrica, Zipline launches in US, Novastar raises $200M

By Jake Bright

Events in May offered support to the thesis that Africa can incubate tech with global application.

Two startups that developed their business models on the continent — MallforAfrica and Zipline — were tapped by international interests.

DHL acquired a minority stake in Link Commerce, a turn-key e-commerce company that grew out of MallforAfrica.com — a Nigerian digital-retail startup.

Link Commerce offers a white-label solution for doing online-sales in emerging markets.

Retailers can plug into the company’s platform to create a web-based storefront that manages payments and logistics.

Nigerian Chris Folayan founded MallforAfrica in 2011 to bridge a gap in supply and demand for the continent’s consumer markets. While living in the U.S., Folayan noted a common practice among Africans — that of giving lists of goods to family members abroad to buy and bring home.

With MallforAfrica, Folayan aimed to allow people on the continent to purchase goods from global retailers directly online.

The e-commerce site went on to onboard more than 250 global retailers, and now employs 30 people at order processing facilities in Oregon and the U.K.

Folayan has elevated Link Commerce now as the lead company above MallforAfrica.com. He and DHL plan to extend the platform to emerging markets around the world and offer it to companies who want to wrap online stores, payments and logistics solution around their core business.

“Right now the focus is on Africa…but we’re taking this global,” Folayan said.

Another startup developed in Africa, Zipline, was tapped by U.S. healthcare provider Novant for drone delivery of critical medical supplies in the fight against COVID-19.

The two announced a partnership whereby Zipline’s drones will make 32-mile flights on two routes between Novant Health’s North Carolina emergency drone fulfillment center and the nonprofit’s medical center in Huntersville — where front-line healthcare workers are treating coronavirus patients.

Zipline and Novant are touting the arrangement as the first authorized long-range drone logistics delivery flight program in the U.S. The activity has gained approval by the U.S. Federal Aviation Administration and North Carolina’s Department of Transportation.

The story behind the Novant, Zipline UAV collaboration has a twist: The capabilities for the U.S. operation were developed primarily in Africa. Zipline has a test facility in the San Francisco area, but spent several years configuring its drone delivery model in Rwanda and Ghana.

Image Credits: Novant Health

Co-founded in 2014 by Americans Keller Rinaudo, Keenan Wyrobek and Will Hetzler, Zipline designs its own UAVs, launch systems and logistics software for distribution of critical medical supplies.

The company turned to East Africa in 2016, entering a partnership with the government of Rwanda to test and deploy its drone service in that country. Zipline went live with UAV distribution of life-saving medical supplies in Rwanda in late 2016, claiming the first national drone-delivery program at scale in the world.

The company expanded to Ghana in 2016, where in addition to delivering blood and vaccines by drone, it now distributes COVID-19-related medication and lab samples.

In addition to partner Novant Health, Zipline has caught the attention of big logistics providers, such as UPS — which supported (and studied) the startup’s African operations back to 2016.

The presidents of Rwanda and Ghana  — Paul Kagame and Nana Akufo-Addo, respectively — were instrumental in supporting Zipline’s partnerships in their countries. Other nations on the continent, such as Kenya, South Africa and Zambia, continue to advance commercial drone testing and novel approaches to regulating the sector.

African startups have another $100 million in VC to pitch for after Novastar Ventures’ latest raise.

The Nairobi and Lagos-based investment group announced it has closed $108 million in new commitments to launch its Africa Fund II, which brings Novastar’s total capital to $200 million.

With the additional resources, the firm plans to make 12 to 14 investments across the continent, according to Managing Director Steve Beck .

On-demand mobility powered by electric and solar is coming to Africa.

Vaya Africa, a ride-hail mobility venture founded by Zimbabwean mogul Strive Masiyiwa, launched an electric taxi service and charging network in Zimbabwe this week with plans to expand across the continent.

The South Africa-headquartered company is using Nissan Leaf EVs and has developed its own solar-powered charging stations. Vaya is finalizing partnerships to take its electric taxi services on the road to countries that could include Kenya, Nigeria, South Africa and Zambia, Vaya Mobility CEO Dorothy Zimuto told TechCrunch.

The initiative comes as Africa’s on-demand mobility market has been in full swing for several years, with startups, investors and the larger ride-hail players aiming to bring movement of people and goods to digital platforms.

Uber and Bolt have been operating in Africa’s major economies since 2015, where there are also a number of local app-based taxi startups. Over the last year, there’s been some movement on the continent toward developing EVs for ride-hail and delivery use, primarily around motorcycles.

Beyond environmental benefits, Vaya highlights economic gains for passengers and drivers of shifting to electric in Africa’s taxi markets, where fuel costs compared to personal income is generally high for drivers.

Using solar panels to power the charging station network also helps Vaya’s new EV program overcome some of challenges in Africa’s electricity grid.

Vaya is exploring EV options for other on-demand transit applications — from mini-buses to Tuk Tuk taxis.

In more downbeat news in May, Africa-focused tech talent accelerator Andela had layoffs and salary reductions as a result of the economic impact of the COVID-19 crisis, CEO Jeremy Johnson confirmed to TechCrunch.

The compensation and staff reductions of 135 bring Andela’s headcount down to 1,199 employees. None of Andela’s engineers were included in the layoffs.

Backed by $181 million in VC from investors that include the Chan Zuckerberg Initiative, the startup’s client-base is comprised of more than 200 global companies that pay for the African developers Andela selects to work on projects.

There’s been a drop in the demand for Andela’s services, according to Johnson.

More Africa-related stories @TechCrunch  

African tech around the ‘net

Cisco to acquire internet monitoring solution ThousandEyes

By Ron Miller

When Cisco bought AppDynamics in 2017 for $3.7 billion just before the IPO, the company sent a clear signal it wanted to move beyond its pure network hardware roots into the software monitoring side of the equation. Yesterday afternoon the company announced it intends to buy another monitoring company, this time snagging internet monitoring solution ThousandEyes.

Cisco would not comment on the price when asked by TechCrunch, but published reports from CNBC and others pegged the deal at around $1 billion. If that’s accurate, it means the company has paid around $4.7 billion for a pair of monitoring solutions companies.

Cisco’s Todd Nightingale, writing in a blog post announcing the deal said that the kind of data that ThousandEyes provides around internet user experience is more important than ever as internet connections have come under tremendous pressure with huge numbers of employees working from home.

ThousandEyes keeps watch on those connections and should fit in well with other Cisco monitoring technologies. “With thousands of agents deployed throughout the internet, ThousandEyes’ platform has an unprecedented understanding of the internet and grows more intelligent with every deployment, Nightingale wrote.

He added, “Cisco will incorporate ThousandEyes’ capabilities in our AppDynamics application intelligence portfolio to enhance visibility across the enterprise, internet and the cloud.”

As for ThousandEyes, co-founder and CEO Mohit Lad told a typical acquisition story. It was about growing faster inside the big corporation than it could on its own. “We decided to become part of Cisco because we saw the potential to do much more, much faster, and truly create a legacy for ThousandEyes,” Lad wrote.

It’s interesting to note that yesterday’s move, and the company’s larger acquisition strategy over the last decade is part of a broader move to software and services as a complement to its core networking hardware business.

Just yesterday, Synergy Research released its network switch and router revenue report and it wasn’t great. As companies have hunkered down during the pandemic, they have been buying much less network hardware, dropping the Q1 numbers to seven year low. That translated into a $1 billion less in overall revenue in this category, according to Synergy.

While Cisco owns the vast majority of the market, it obviously wants to keep moving into software services as a hedge against this shifting market. This deal simply builds on that approach.

ThousandEyes was founded in 2010 and raised over $110 million on a post valuation of $670 million as of February 2019, according to Pitchbook Data.

A 12 year journey ends as Skimlinks is acquired by retail marketing platform Connexity

By Mike Butcher

Connexity, a lead-gen platform for online retailers, has acquired Skimlinks, a UK platform for publishers to make money through affiliate links. Terms of the deal were undisclosed. According to Crunchbase, Skimlinks had raised a total of $25.5M and reached a late a Series C stage of funding, the final round coming from Frog Capital which invested $16M.

An early Seed investor was Sussex Place Ventures way back in 2009. For context, San Francisco-based competitor VigLink, which has raised a total of $27.3 million, remains an independent company.

Sources in the VC industry indicate that the acquisition was a “decent one” that may even have hit three figures, with a possible a large-ish earnout and equity component. Certainly, this was not a ‘firesale,’ by any means.

Although coy on the price of the acquisition, co-founder and President Alicia Navarro said: “Every party, including many staff, has made money out of this deal and is very happy.”

Cofounded in 2007 by Navarro and Joe Stepniewski, Skimlinks rode the wave of online activity as publishers struggled to monetize their ballooning online operations in the mid-teens of the last decade. Affiliate programs allow publishers to get a cut of the revenue when their link drives a purchase on an e-commerce site. Skimlinks makes the process easier through automation.

Originally spinning out of an idea Navarro had about consumer online commerce habits — a startup called Skimbit which resembled Pinterest in some respects — it had scaled to the US by the time I interviewed Navarro in 2012.

In 2013 it took on a growth financing round led by Greycroft Partners.

A couple of years later the platform was driving more than $500 million in e-commerce sales for publishers.

By 2016 editorial content from its publisher network of 1.5M domains had driven nearly $1 billion of ecommerce transactions and the company said it was on a path to profitability.

In 2018 Navarro stepped away from the CEO position, taking on the role of President, and handed the reigns to Sebastien Blanc, previously Chief Revenue Officer.

Speaking to TechCrunch, Navarro said the COVID-19 pandemic had accelerated the growth of the business as more publishers in its network monetized the massively increased online traffic, brought about by global lockdown policies.

Bill Glass, CEO of Connexity said in a statement: “Our solutions help retailers acquire new customers and sales while enabling ecommerce-oriented publishers to monetize engaged shopping audiences. Combining the companies creates more scale on both sides of the marketplace.”

Sebastien Blanc, CEO of Skimlinks said: “By marrying Connexity’s CPC search budgets with the broad CPA affiliate monetization coverage of Skimlinks, we provide best-in-class monetization for publishers. Our combined scale will fortify Connexity as a critically important customer acquisition channel for retailers and will strengthen publisher monetization solutions.”

And what of the founders? Stepniewski has taken on a senior role with Facebook UK. Navarro is now working on a fresh startup she bills as “AirBnB-meets-Calm as a service” allowing founders or executives to unplug and get into what is known as ‘Deep Work’.

She is now in the process of early-stage fundraising, so her entrepreneurial journey is clearly going to continue.

Vaya Africa launches electric ride-hail taxi network

By Jake Bright

Vaya Africa, a ride-hail mobility venture founded by Zimbabwean mogul Strive Masiyiwa, has launched an electric taxi service and charging network in Zimbabwe with plans to expand across the continent.

The South Africa headquartered company has acquired a fleet of Nissan Leaf EVs and developed its own solar powered charging stations.

The program goes live in Zimbabwe this week, as Vaya finalizes partnerships to begin on-demand electric taxi and delivery services in markets that could include Kenya, Nigeria, South Africa and Zambia.

“Zimbabwe is a sandbox really. We’ve moved on to doing pilots with other countries right across Africa,” Vaya Mobility CEO Dorothy Zimuto told TechCrunch on a call from Harare.

Vaya is a subsidiary of Strive Masiyiwa’s Econet Group, which includes one of Southern Africa’s largest mobile operators and Liquid Telecom, an internet infrastructure company.

Masiyiwa has become one of Africa’s Gates, Branson type figures, recognized globally as a business leader and philanthropist with connections and affiliations from President Obama to the Rockefeller Foundation.

Working with Zimuto on the Vaya EV product is Liquid Telecom’s innovation partnerships lead, Oswald Jumira.

The initiative comes as Africa’s on demand mobility market has been in full swing for several years, with startups, investors, and the larger ride-hail players aiming to bring movement of people and goods to digital product models.

Ethiopia has local ride-hail ventures Ride and Zayride. Uber’s been active in several markets on the continent since 2015 and like competitor Bolt, got into the motorcycle taxi business in Africa in 2018.

Over the last year, there’s been some movement on the continent toward developing EV’s for ride-hail and delivery use, primarily around two-wheeled transit.

In 2019, Nigerian mobility startup MAX.ng raised a $7 million Series A round backed by Yamaha, a portion of which was dedicated to pilot e-motorcycles powered by renewable energy.

Last year the Government of Rwanda established a national plan to phase out gas motorcycle taxis for e-motos, working in partnership with EV startup Ampersand.

Vaya Mobility CEO Dorothy Zimuto, Image Credits: Econet Group

The appeal of shifting to electric in Africa’s taxi markets — beyond environmental benefits — is the unit economics, given the cost of fuel compared to personal income is generally high for most of the continent’s drivers.

“Africa is excited, because we are riding on the green revolution: no emissions, no noise and big savings… in terms of running costs of their vehicles,” Zimuto said.

She estimates a cost savings of 40% on the fuel and maintenance costs for drivers on the ride-hail platform.

At the moment, with fuel prices in Vaya’s first market of Zimbabwe at around $1.20 a liter, the average trip distance is 22 kilometres for a price of $19, according to Econet Group’s Oswald Jumira.

With the Nissan Leaf vehicles on Vaya’s charging network, the cost to top up will be around $5 for a range of 150 to 200 kilometres.

Image Credits: Vaya Africa

“It’s the driver who benefits. They take more money home. And that also means we can reduce the tariff for ride hailing companies to make it more affordable for people,” Jumira told TechCrunch .

The company has adapted its business to the spread of COVID-19 in Africa. Vaya provides PPE to its drivers and sanitizes its cars four to five times a day, according to Zimuto.

Vaya is exploring EV options for other on-demand transit applications — from delivery to motorcycle and Tuk Tuk taxis.

On the question of competing with Uber in Africa, Vaya points to the reduced fares offered by its EV program as one advantage.

The CEO of Vaya Mobility, Dorothy Zimuto, also points to certain benefits of knowing local culture and preferences.

“We speak African. That’s the language we understand. We understand the people and what they want across our markets. That’s what makes the difference.” she said.

It will be something to watch if Vaya’s EV bet and local consumer knowledge translates into more passenger flow and revenue generation as it goes head to head with other ride-hail companies, such as Uber, across Africa.

Omidyar-backed Spero Ventures invests in Mexico City’s Mati, a startup pitching ID-verification

By Jonathan Shieber

Spero Ventures, the venture capital firm backed by eBay founder Pierre Omidyar, has gone to Mexico City for its latest investment, backing the identity verification technology developer Mati.

Launched in San Francisco, the two co-founders Filip Victor and Amaury Soviche, decided to relocate to Mexico because of its proximity to big, untapped markets in Mexico, Brazil, and Colombia.

“After developing the technology in San Francisco, we chose to start commercially in Latin America. It has been the perfect petri dish for us: the markets here, especially in Mexico, Brazil and Colombia, are very exciting. These countries have the highest payments fraud rates in the world, which makes their identity issues the most interesting,” said Victor in a statement.

The rise of a new generation of fintech startup across Latin America creates a unique opportunity for Mati in a number of markets — and so does a new generation of financial services regulations, the company said. “We view the fintech regulations sweeping across LatAm as an opportunity to help a lot of promising fintechs and marketplaces get to the next level”, Victor said.

Already working across three countries, with operations in Mexico City, St. Petersburg, and San Francisco, Mati is an example of the global scope that even very early stage companies can now achieve.

Identity verification is at the core of much of the modern gig economy and much of the social networking defining life during a pandemic.

The company said it will use the capital investment — it would not disclose the amount of money it raised — to continue product development and expand its geographic footprint.

The scope of the identity verification problem is what brought Spero to the table to discuss an investment, according to a statement from Shripriya Mahesh, the founding partner at Spero.

“For us, identity is foundational to scaling the vast array of gig economy, fintech, social, and commerce platforms that represent our collective future of work,” Mahesh said. “The ability to have safe and trusted interactions at an unprecedented scale, especially with people in places where national identity infrastructure is limited, will create opportunities and global connections we can’t yet even forecast.”

Work collaboration unicorn Notion is blocked in China [Update: It’s back]

By Rita Liao

Notion, the fast-growing work collaboration tool that recently hit a $2 billion valuation, said on Twitter Monday that its service was blocked in China.

The productivity app has attracted waves of startups and tech workers around the world — including those in China — to adopt its all-in-one platform that blends notes, wikis, to-dos, and team collaboration. The seven-year-old San Francisco-based app is widely seen as a serious rival to Evernote, which started out in 2004.

Notion said it was “monitoring the situation and will continue to post updates,” but the timing of the ban noticeably coincided with China’s annual parliament meeting, which began last week after a two-month delay due to the COVID-19 pandemic. Internet regulation and censorship normally toughen around key political meetings in the country.y

Update: On Tuesday — about 24 hours after its notice of the restriction — Notion confirmed with TechCrunch that it had been unblocked in most regions across the country and most of its users can still access their data, without elaborating on what was done to bring its service back. Tests by website performance tool Chinaz also showed that the tool was accessible in most provinces as of Tuesday morning.

For Notion and other apps that have entered the public eye in China but remained beyond the arm of local laws, a looming crackdown is almost certain. The country’s cybersecurity watchdog could find Notion’s free flow of note-sharing problematic. Some users have even conveniently turned the tool’s friendly desktop version into personal websites. If Notion were to keep its China presence, it would have to bow to the same set of regulations that rule all content creation platforms in China.

Its predecessor Evernote, for example, established a Chinese joint venture in 2018 and released a local edition under the brand Yinxiang Biji, which comes with compromised features and stores user data within China.

Rivalry in work collaboration

Just before its ban in China, Notion surged on May 21 to become the most-downloaded productivity app in the domestic Android stores, according to third-party data from App Annie. The sudden rise followed on the heel of its decision to make its core feature free for individual users. It also appears to be linked to its Chinese copycat Hanzhou (寒舟), which stirred up controversy within the developer community over its striking resemblance to Notion.

In an apologetic post published on May 22, Xu Haihao, the brain behind Hanzhou and a former employee of ByteDance-backed document collaboration app Shimo, admitted to “developing the project based on Notion.”

“We are wrong from the beginning,” wrote Xu. “But I intended to offend nobody. My intention was to learn from [Notion’s] technology.” As a resolution, the developer said he would suspend Hanzou’s development and user registration.

Some of the largest tech firms in China are gunning for the workplace productivity industry, which received a recent boost during the coronavirus crisis. Alibaba’s Dingtalk claimed last August that more than 10 million enterprises and over 200 million individual users had registered on its platform. By comparison, Tencent’s WeChat Work said it had logged more than 2.5 million enterprises and some 60 million active users by December.

The article was updated on May 26, 2020 to reflect that Notion was unblocked in most of China.

The Station: Hertz files for bankruptcy, hailing “self-driving” scooters, Memorial Day travel

By Kirsten Korosec

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every Saturday in your inbox.

Hi and welcome back to The Station. Memorial Day is this coming Monday, a holiday meant to honor military personnel who died while serving in the U.S. Armed Forces. Over the years, it has evolved for many Americans who use the three-day weekend to fire up the grill, go camping, head to the beach, local amusement park or take a road trip. It’s become the unofficial kickoff to the summer season — even though we still have more than three weeks of spring.

Every year around this time, AAA provides an estimate for travel over the weekend. For the first time in 20 years, AAA said it would not issue a Memorial Day travel forecast, as the accuracy of the economic data used to create the forecast has been undermined by COVID-19.

The travel forecast often reflects the state of the economy or at least certain aspects of it. For instance, Memorial Day 2009 holds the record for the lowest travel volume at nearly 31 million travelers. Last year, 43 million Americans traveled for Memorial Day Weekend, the second-highest travel volume on record since 2000, when the organization began tracking this data.

I will put my prognosticator hat on for a moment knowing I might very well be wrong (I’m sure ya’ll will remind me later). I expect this weekend to be a low travel holiday, but I fully anticipate this summer will mark the return of the road trip. And that’s not just my forecast for the U.S. I expect Europeans will stick closer to home and opt for road and possibly train travel over long haul flights for their summer holidays. That has all kinds of implications, positive and negative. And it’s why I’m going to spend some time in the coming weeks driving a variety of new SUV models in search of road trip worthy vehicles.

This past week I drove the 2020 VW Atlas Cross Sport V6 SEL (premium trim), a more smaller and approachable version of the massive three-row Atlas. I will share a few thoughts about it next week. After that, I will be driving the 2020 Land Cruiser standard trim. Have a vehicle suggestion? Reach out and I’ll try to put it in my queue.

Reach out and email me at kirsten.korosec@techcrunch.com to share thoughts, criticisms, offer up opinions or tips. You can also send a direct message to me at Twitter — @kirstenkorosec.

Shall we get down to it? Vamos.

Micromobbin’

the station scooter1a

Micromobility had some good action this week so let’s dive on in. Here in San Francisco, Bird’s Scoot redeployed 300 electric kick scooters. By Memorial Day weekend, Scoot will have 500 electric scooters available. Additionally, Scoot expanded its scooter service area to serve more parts of San Francisco.

Over in Atlanta, GoX and Tortoise teamed up to deploy teleoperated electric scooters. In Peachtree Corners, GoX riders can hail a scooter equipped with tech from Tortoise. As Keaks, aka Kirsten Korosec, explained earlier this week, riders can request a scooter to come to them and once they’re done, the scooter will drive itself back to a parking spot.

Meanwhile, in Europe, Tier brought integrated helmets to its electric scooters. The foldable helmets fit inside a box attached to the scooter below the handlebars. This month, Tier plans to deploy 200 scooters equipped with helmets in Paris and Berlin. Over the summer, Tier will deploy an additional 5,000 helmet-equipped scooters. Additionally, given concerns about COVID-19, Tier is experimenting with an antibacterial, self-disinfecting handlebar technology from Protexus. Tier is testing these handlebars in Paris and Bordeaux.

Also, don’t miss my analysis of why micromobility may come back stronger after the pandemic.

Megan Rose Dickey

Deal of the week

money the station

Vroom, the online used car marketplace that has raised some $700 million since 2013, filed for an IPO this week. (Yes, IPOs qualify as deals in my book). It plans to trade on the Nasdaq under VRM with Goldman Sachs as lead underwriter.

Vroom is an interesting company that I’ve been writing about for years now. And there have been times that I wondered if it would fold altogether. The company managed to keep raising funds though, most recently $254 million in December 2019 in a Series H round that valued the company at around $1.5 billion.

A look at the S-1 shows modest growth, rising losses and slim gross margins. Eck!

Here’s a quick breakdown:

  • Vroom’s revenue grew 39.3% in 2019 compared to 2018. During that same period, its gross margin fell from 7.1% to 4.9%. The company’s net losses as a percent of revenue rose from 10% in 2018 to 12% in 2019. (That doesn’t include costs relating to “accretion of redeemable convertible preferred stock.” By counting the non-cash cost, add $13 million to Vroom’s 2018 net loss and $132.8 million to its 2019 figure.)
  • In the first quarter of 2020, Vroom generated revenue of $375.8 million, leading to gross profit of $18.4 million, or about 4.9% of revenue. It also reported a net loss of $41.1 million in the first quarter, putting it on a run-rate to lose even more money in 2020 than it did in 2019.

TechCrunch’s Alex Wilhelm takes a look under Vroom’s hood and digs into why the company is heading to the public markets during this volatile time. Check it out.

Other deals:

Missfresh, a Chinese grocery delivery company backed by Tencent, is closing in on $500 million in new funding.

Autonomous aviation startup Xwing locked in a $10 million funding round before COVID-19 hit. Now the San Francisco-based startup is using the capital to hire talent and scale the development of its software stack as it aims for commercial operations later this year — pending FAA approvals. The Series A funding round was led by R7 Partners, with participation from early-stage VC Alven, Eniac Ventures and Thales Corporate Ventures.

Fly Now Pay Later, a London-based fintech startup focused on travel, raised £5 million in Series A equity funding and another £30 million in debt funding.

French startup Angell has signed a wide-ranging partnership with SEB, the French industrial company behind All-Clad, Krups, Moulinex, Rowenta, Tefal and others. As part of the deal, SEB will manufacture Angell’s electric bikes in a factory near Dijon, France. SEB’s investment arm, SEB Alliance, is also investing in Angell. The terms of the deal are undisclosed, but Angell says it plans to raise between $7.6 and $21.7 million with a group of investors that include SEB.

Layoffs, business disruptions and people

Signage is displayed at the Hertz Global Holdings Inc. rental counter at San Francisco International Airport in San Francisco, California, U.S., on Tuesday, May 5, 2020. Photo: Getty Images

Hertz filed for Chapter 11 bankruptcy protection on Friday, a move we’ve been anticipating for awhile now. The bankruptcy protection stems from the COVID-19 pandemic.

Here’s why.

Once business trips and other travel was halted, Hertz was suddenly sitting on an unused asset — lots and lots of cars. It wasn’t just that the revenue spigot was turned off. Used car prices have dropped, further devaluing its fleet.

The company said that it has more than $1 billion in cash on hand, which it will use to keep the business operating through the bankruptcy process. Hertz also said its principal international operating regions, including Europe, Australia and New Zealand are not included in the U.S. Chapter 11 proceedings, nor are franchised locations.

Other layoffs:

Indian ride-hailing firm Ola has seen revenue drop by 95% in the last two months as India enforced a stay-at-home order for its 1.3 billion citizens in late March. You can guess what has happened as a result. Ola co-founder and CEO Bhavish Aggarwal said in an internal email the company is cutting 1,400 jobs in India, or 35% of its workforce in the home market.

India’s top food delivery startup Swiggy is cutting 1,100 jobs and scaling down some adjacent businesses as it looks to reduce costs to survive the coronavirus pandemic.

Here’s something on the “new” job front

There’s been a lot of attention on autonomous delivery robots. These companies will most certainly struggle to become profitable. On-demand delivery is a tricky business. But COVID-19 might have inadvertently expanded the labor pool for these companies.

On-demand delivery startup Postmates has seen an increase in demand for its autonomous delivery robots known as Serve, which operate in Los Angeles and San Francisco. The company uses teleoperators, humans who remotely monitor and guide the autonomous robots. COVID-19 prompted Postmates to set up teleoperations centers within each employee’s home. Postmates sees potential to reach a new group of workers.

Tortoise, which we mentioned earlier in Micromobbin’, sees the same potential, according to its founder and CEO Dmitry Shevelenko.

A little bird

blinky cat bird green

We hear (and see) things. But we’re not selfish. We share!

For those not familiar with “a little bird,” this is a periodic section that shares insider tips that have been vetted. This week comes out of the super-hyped world of on-demand delivery. It’s a business that might be seeing a lot of demand. But demand doesn’t always square with profitability.

Take Postmates for example. The company has raised about $900 million to date, including a $225 million round announced in October that valued the company at about $2.5 billion. But now it seems that common shares are trading at a 45% discount on the secondary market, according to our sources.

Early investors do take money off the table from time to time. But it can also indicate other troubles worth watching out for. Postmates filed confidential IPO paperwork in February 2019, but those plans have been delayed. The company is also fighting for market share against giants like Doordash. A Uber-Grubhub merger would put it even with DoorDash.

That leaves Postmates in a distant fourth. Dan Primack over at Axios noted “multiple sources” have told him the company is seeking raise around $100 million in new private-market funding.

Other notable bits

Here are a few other items that caught my eye …

Amazon is joining India’s online food delivery market just as top local players Swiggy and Zomato reduce their workforce to steer through the coronavirus pandemic and months after Uber Eats’ exit from the nation.

GM has a “big team” working on an advanced version of its hands-free driving assistance system, Super Cruise, that will expand its capability beyond highways and apply it to city streets, the automaker’s vice president of global product development Doug Parks said during a webcasted interview at Citi’s 2020 Car of the Future Symposium.

Cake, the Stockholm-based mobility startup, debuted the Kalk OR, a 150-pound, battery-powered two-wheeler engineered for agile off-road riding and available in a street-legal version.

Nauto has launched a new feature in its driver behavior learning platform that is designed to detect imminent collisions to help reduce rear-end accidents. It works by taking in driver behavior data, vehicle movement, traffic elements, and contextual data to help predict and prevent collisions.

Organizers of the New York International Auto Show, once hoping to hold the rescheduled event in August, have decided to scrap the entire year. The show has been officially canceled for 2020 due to the COVID-19 pandemic, organizers announced Friday. The next show will take place April 2 to April 11, 2021. Press days will be March 31 and April 1.

Tesla CEO Elon Musk said the company is raising the price of its “Full Self-Driving” package of its Autopilot driver assistance package by around $1,000 on July 1. This has happened before and it will, I promise happen again. The Verge has a good breakdown of why. I, of course, care about the financial reasons. Right now, Tesla can only count about half of the revenue it generates from FSD. The other half is deferred revenue — money that Tesla can recognize on its balance sheet at a later date.

Wunder Mobility, the Hamburg-based startup that provides a range of mobility services, from carpooling to electric scooter rentals, announced the launch of Wunder Vehicles and a business-to-business partnership with Chinese EV manufacturer Yadea. Wunder Vehicles is a service that gives customers a toolkit of sorts to launch a fleet-sharing company. The company provides software, a marketing plan, data, financing options and the electric vehicles, which will come from Yadea.

Rad Power Bikes unveiled the newest iteration of its electric cargo bike. The RadWagon 4 has been fully redesigned from the ground up. Trucks VC’s Reilly Brennan recently described this on Twitter as the possible F-150 of micromobility. We hope to test it soon.

Image Credits: Rad Power Bikes

Scale AI releases free lidar data set to power self-driving car development

By Kirsten Korosec

High-quality data is the fuel that powers AI algorithms. Without a continual flow of labeled data, bottlenecks can occur and the algorithm will slowly get worse and add risk to the system.

It’s why labeled data is so critical for companies like Zoox, Cruise and Waymo, which use it to train machine learning models to develop and deploy autonomous vehicles. That need is what led to the creation of Scale AI, a startup that uses software and people to process and label image, lidar and map data for companies building machine learning algorithms. Companies working on autonomous vehicle technology make up a large swath of Scale’s customer base, although its platform is also used by Airbnb, Pinterest and OpenAI, among others.

The COVID-19 pandemic has slowed, or even halted, that flow of data as AV companies suspended testing on public roads — the means of collecting billions of images. Scale is hoping to turn the tap back on, and for free.

The company, in collaboration with lidar manufacturer Hesai, launched this week an open-source data set called PandaSet that can be used for training machine learning models for autonomous driving. The data set, which is free and licensed for academic and commercial use, includes data collected using Hesai’s forward-facing PandarGT lidar with image-like resolution, as well as its mechanical spinning lidar known as Pandar64. The data was collected while driving urban areas in San Francisco and Silicon Valley before officials issued stay-at-home orders in the area, according to the company.

“AI and machine learning are incredible technologies with an incredible potential for impact, but also a huge pain in the ass,” Scale CEO and co-founder Alexandr Wang told TechCrunch in a recent interview. “Machine learning is definitely a garbage in, garbage out kind of framework — you really need high-quality data to be able to power these algorithms. It’s why we built Scale and it’s also why we’re using this data set today to help drive forward the industry with an open-source perspective.”

The goal with this lidar data set was to give free access to a dense and content-rich data set, which Wang said was achieved by using two kinds of lidars in complex urban environments filled with cars, bikes, traffic lights and pedestrians.

“The Zoox and the Cruises of the world will often talk about how battle-tested their systems are in these dense urban environments,” Wang said. “We wanted to really expose that to the whole community.”

Lidar - Scale AI PandaSet flyover GIF

Image Credits: Scale AI

The data set includes more than 48,000 camera images and 16,000 lidar sweeps — more than 100 scenes of 8s each, according to the company. It also includes 28 annotation classes for each scene and 37 semantic segmentation labels for most scenes. Traditional cuboid labeling, those little boxes placed around a bike or car, for instance, can’t adequately identify all of the lidar data. So, Scale uses a point cloud segmentation tool to precisely annotate complex objects like rain.

Open sourcing AV data isn’t entirely new. Last year, Aptiv and Scale released nuScenes, a large-scale data set from an autonomous vehicle sensor suite. Argo AI, Cruise and Waymo were among a number of AV companies that have also released data to researchers. Argo AI released curated data along with high-definition maps, while Cruise shared a data visualization tool it created called Webviz that takes raw data collected from all the sensors on a robot and turns that binary code into visuals.

Scale’s efforts are a bit different; for instance, Wang said the license to use this data set doesn’t have any restrictions.

“There’s a big need right now and a continual need for high-quality labeled data,” Wang said. “That’s one of the biggest hurdles overcome when building self-driving systems. We want to democratize access to this data, especially at a time when a lot of the self-driving companies can’t collect it.”

That doesn’t mean Scale is going to suddenly give away all of its data. It is, after all a for-profit enterprise. But it’s already considering collecting and open sourcing fresher data later this year.

Steve Case and Clara Sieg on how the COVID-19 crisis differs from the dot-com bust

By Matt Burns

Steve Case and Clara Sieg of Revolution recently spoke on TechCrunch’s new series, Extra Crunch Live. Throughout the hour-long chat, we touched on numerous subjects, including how diverse founders can take advantage during this downturn and how remote work may lead to growth outside Silicon Valley. The pair have a unique vantage point, with Steve Case, co-founder and former CEO of AOL turned VC, and Clara Sieg, a Stanford-educated VC heading up Revolution’s Silicon Valley office.

Together, Case and Sieg laid out how the current crisis is different from the dot-com bust of the late nineties. Because of the differences, their outlook is bullish on the tech sector’s ability to pull through.

And for everyone who couldn’t join us live, the full video replay is embedded below. (You can get access here if you need it.)

Case said that during the run-up to the dot-com bust, it was a different environment.

“When we got started at AOL, which was back in 1985, the Internet didn’t exist yet,” Case said. “I think 3% of people were online or online an hour a week. And it took us a decade to get going. By the year 2000, which is sort of the peak of AOL’s success, we had about half of all the U.S. internet traffic, and the market value soared. That’s when suddenly, when any company with a dot-com name was getting funded. Many were going public without even having much in the way of revenues. That’s not we’re dealing with now.”

Venture partner Sieg agreed, pointing to the number of funds currently available in the venture capital asset class. Unlike twenty years ago when valuations were based on unsubstantiated future growth, the current crisis happened during a period of steady expansion. Because of this, funds and startups are in a better position to make it to the other side of this pandemic, she said.

Sieg pointed to one of Revolution Venture’s portfolio companies, Mint House, which aims to build a better temporary housing experience for business travelers. The company raised $15 million in May 2019, and according to Sieg, it focused on being capital-efficient from the start instead of chasing growth for its own sake. She said the company went from almost 90% occupancy to zero overnight and yet now, after a slight pivot, it’s back to a 60-65% occupancy rate by moving quickly to providing housing to healthcare workers.

The company’s strong balance sheet gave it room to pivot, she said.

And yet there are challenges. Sieg pointed out that for the first time in Revolution’s history, the firm’s funds are investing without meeting founder teams in person. It’s a longer process than the old way, she said, though noted that it levels the playing field for founders outside of the traditional circle. Investors have more time on their hands now, so she encourages founders to be persistent and keep reaching out for virtual meetings.

“I think it is important to take advantage of this time where you have people sitting around with more availability on their calendars and more willingness to engage,” Sieg said. “The nice thing about removing some of the in-person components is there’s a stronger focus on market opportunity, product and company, and the real metrics that [founders] can show. Removing some of that person-to-person noise and just focusing on the business means that a lot of these biases are going to be overcome.”

The pair said they believe some companies will have a strong tailwind coming out of this crisis. Case and Sieg pointed to trends that are rapidly accelerating: e-commerce, telehealth and direct-to-consumer companies. In this new environment, Case said location will matter more than ever. While he points out there are many smart people in Silicon Valley, there’s a reason why, for example, Monsanto is in St. Louis. “Some of the smartest people around healthtech are in Minneapolis where UnitedHealth is, or Rochester, Minnesota where Mayo is, or with MD Anderson in Texas or in Ohio with Cleveland Clinic or Johns Hopkins in Baltimore.”

“There are also specific categories that resonate now more than ever,” Sieg said. “We’re investors in a company called Bright Cellars that ships wine to your house. Obviously, people are staying at home, and they’re drinking a lot more. And [Bright Cellars] has been positively impacted by [stay-at-home orders] from a revenue perspective. There’s a company like Bloomscape, which is in Detroit, Michigan, and they’ve had their challenges with keeping their supply chain up and running, but they managed to do so. People are finding a lot of comfort in gardening and taking care of plants because it is something that can be done at home and feel like you’re engaged with something that’s alive, and you see the progression when you’re stuck at home.”

Steve Case is looking at founders who are managing today, but also imagining for the future. One example is Clear, he said, which fast-tracked the development of a flight pass for healthcare workers. And now, when people start flying again, the company will return to its strong core business while having additional momentum around this new business that provides passes to hospitals and arenas. This wouldn’t have happened if it was not for this crisis, Case said.

“I think [the COVID-19 crisis] is one of those shake-the-snowglobe moments where things are being reassessed,” Case said, “and one of the areas I think it’s going to accelerate is what I’ve called the ‘third wave of the internet.'”

Case explained he wrote about this new phase a few years ago in his book, aptly titled “The Third Wave: An Entrepreneur’s Vision of the Future.” According to Case’s thesis, the first wave was when AOL and other providers were introducing and onboarding users to the Internet. The second wave was when apps and software could be created using existing infrastructure. And now, according to this thought, the internet is meeting the real world with new solutions. The current crisis is accelerating the development of telehealth, smart cities, and industries in regulated sectors.

“Perseverance is going to matter more,” Case said. “The tough problems don’t lend themselves to overnight successes. It’s going to be a slog, and kind of like AOL of a 10-year in the making overnight success.”

The dot-com bust upended a lot of startups, and the COVID-19 crisis will do the same though with different results.

“The third wave of the Internet is when the Internet meets the real world, Steve Case said. “It’s things like health care, food, smart cities, and many other areas that haven’t changed much in the first and second waves that are going to change a lot in the third wave. We believe it’s going to be a different playbook.”


The future of flight can be energy-efficient

By Walter Thompson
Damon Vander Lind Contributor
Damon Vander Lind is general manager for Heaviside at Kitty Hawk, a company whose mission is to free the world from traffic with eVTOL vehicles.

We are at the dawn of a new era in transportation.

At the turn of the 20th century, cars began to replace horses. Now, a century later, we would like to see mobility move to the sky. Kitty Hawk has built several prototype vehicles that are electrically powered, take off and land vertically and fly in between like a fixed-wing plane. Collectively, these are called eVTOL (electric vertical takeoff and landing) aircraft.

eVTOLs — such as the ones built by Project Heaviside — show great potential for everyday transportation. With that as an eventual use case, a common question that comes up is: can eVTOL vehicles be green? Specifically, can eVTOL vehicles be more energy-efficient than cars?

Under the EPA’s standard freeway driving test, a 2020 Nissan Leaf Plus uses about 275 Watt-hours per mile when it averages 50 miles per hour. It can comfortably seat four, but its average occupancy is somewhere around 1.6. Thus, the Leaf’s energy consumption is about 171Wh per passenger mile across all trips.

Our current Heaviside prototype uses about 120Wh per passenger mile, and does so at twice the speed of the Leaf: 100 miles per hour (of course, we can fly much faster, if we choose). We can save another 15% of energy because while roads are not straight, flight paths usually are. All together, Heaviside requires 61% as much energy to go a mile.

Why is Heaviside this efficient — doesn’t it take more energy to go faster? Yes, and it makes the high efficiency we’ve achieved even more dramatic. The answer is that Heaviside can take advantage of slim and low-drag aerodynamic forms that are just not practical on cars.

The difference in drag between a clean, aerodynamic shape like the wing section below, and a bluff body like the cylinder, is vast. So vast in fact that the two shapes drawn will have about the same amount of drag.

                                              The cylinder can be hard to see, it’s over here  ↑ 

What is probably less obvious is that clean shapes like wings must make lift when they are put at an angle to the wind. This is not just observation, but can be mathematically proven.

Car manufacturers put tremendous effort into designing shapes that minimize drag, but will not make lift or side force in wind, which would result in poor and squirrelly handling — remember the last time you drove over a bridge in high winds, or in the opposite direction of a large truck on a narrow country road.

When a car drives by, it takes quite a bit of air along with it.

Image Credits: Kitty Hawk

Project Heaviside, in contrast, leaves a small disturbance in the air it passes through.

So, Heaviside is quite energy-efficient. But what if people choose to travel farther when this option exists? What I find personally surprising about the ranges we have been able to achieve is that Heaviside is a vehicle that, because of the extremely low power consumption, is more efficient than a car traveling for an equal amount of time.

This leaves out the most important element of eVTOL aircraft, which is that they are fully electric, and the cars we would like to see them replace are nearly all gas and diesel-powered. While it may be a hard sell to convince the average consumer to switch to an electric car simply because of emissions, it is likely to be much easier to convince them to use a device that gives them time back.

To put this another way, if your commute is the U.S. average of 16 miles, and if you commuted in a Heaviside-type vehicle, three standard rooftop solar panels would power your commute both ways.

While we have a significant road ahead of us in developing and fielding our aircraft commercially, and we cannot be sure the final products will be as efficient as our prototypes, we are still very excited to demonstrate that efficiency and personal flight need not be at odds.

With an ex-Uber exec as its new CEO, digital mental health service Mindstrong raises $100 million

By Jonathan Shieber

Daniel Graf has had a long career in the tech industry. From founding his own startup in the mid-2000s to working at Google, then Twitter, and finally Uber, the tech business has made him extremely wealthy.

But after leaving Uber, he wasn’t necessarily interested in working at another business… At least, not until he spent an afternoon in the spring of 2019 with an old friend, General Catalyst managing director Hemant Taneja, walking in San Francisco’s South Park neighborhood and hearing Taneja talk about a new startup called Mindstrong.

Taneja told Graf that by the fall of that year, he’d be working at Mindstrong… and Taneja was right.

“I was intrigued by healthtech previously,” said Graf.  “The problem always was…and  it sounds a little too money oriented.. but if there’s no clear visibility around who pays who in a startup, the startup isn’t going to work,” and that was always his issue with healthcare businesses. 

NEW YORK, NY – MAY 21: Daniel Graf accepts a Webby award for Google Maps for Iphone at the 17th Annual Webby Awards at Cipriani Wall Street on May 21, 2013 in New York City. (Photo by Bryan Bedder/Getty Images for The Webby Awards)

With Mindstrong, which announced today that it has raised $100 million in new financing, the issue of who pays is clear.

So Graf joined the company in November as chief executive, taking over from Paul Dagum, who remains with Mindstrong as its chief scientific officer.

“Daniel joined the company as it was moving from pure R&D into being something commercially available,” said Taneja, in an email. “In healthcare, it’s increasingly important to understand how to build for the consumer and that’s where Daniel’s experience and background comes in. Paul remains a core part of the team because none of this happens without the science.”

The company, which has developed a digital platform for providing therapy to patients with severe mental illnesses ranging from schizophrenia to obsessive compulsive disorders, is looking to tackle a problem that costs the American healthcare system $20 billion per month, Graf said.

Unlike companies like Headspace and Calm that have focused on the mental wellness market for the mass consumer, Mindstrong is focused on people with severe mental health conditions, said Graf. That means people who are either bipolar, schizophrenic or have major depressive disorder.

It’s a much larger population than most Americans think and they face a critical problem in their ability to receive adequate care, Graf said.

“1 in 5 adults experience mental illness, 1 in 25 experience serious mental illness, and the pandemic is making these numbers worse. Meanwhile, more than 60% of US counties don’t have a single practicing psychiatrist,” said Joe Lonsdale, the founder of 8VC, and investor in the latest Mindstrong Health round, in a statement.  

Dagum, Mindstrong Health’s founder has been working on the issue of how to provide better access and monitor for indications of potential episodes of distress since 2013. The company’s technology provides a range of monitoring and measurement tools using digital biomarkers that are currently being validated through clinical trials, according to Graf.

“We’re passively measuring the usage of the phone and the timing of the keyboard strokes to measure how [a patient] is doing,” Graf said. These smartphone interactions can provide data around mental acuity and emotional valence, according to Graf — and can provide signs that someone might be having problems.

The company also provides access to therapists via phone and video consultations or text-based asynchronous communications, based on user preference.

“Think of us more as a virtual hospital… our care pathways are super complex for this population,” said Graf. “We’re not aware of other startups working with this population. These folks, the best you get right now is the county mental health.”

Mindstrong’s Series C raise included participation from new and existing investors, including General Catalyst, ARCH Ventures, Optum Ventures, Foresite Capital, 8VC, What If Ventures and Bezos Expeditions, along with other, undisclosed investors.  

And while mental health is the company’s current focus, the platform for care delivery that the company is building has broader implications for the industry, especially in the wake of the COVID-19 epidemic, according to General Catalyst managing director, Taneja.

“I expect that we’ll see discoveries in biomarker tech like Mindstrong’s that could be applied horizontally across almost any area of healthcare,” Taneja said in an email. “Because healthcare is so broad and varied, going vertical like Mindstrong is makes a lot of sense. There’s opportunity to become a successful and very impactful company by staying narrowly focused and solving some really hard problems for even a smaller part of the overall population.”

Crypto Startup School: How to scale companies using crypto

By Henry Pickavet
Zoran Basich Contributor
Zoran Basich is the crypto editor for Andreessen Horowitz.

Editor’s note: Andreessen Horowitz’s Crypto Startup School brought together 45 participants from around the U.S. and overseas in a seven-week course to learn how to build crypto companies. Andreessen Horowitz is partnering with TechCrunch to release the online version of the course over the next few weeks. 

In week two of a16z’s Crypto Startup School, three company-builders provide real-world advice on using the qualities of crypto to create new business models and networks.

Coinbase founder and CEO Brian Armstrong walks us through “Setting Up and Scaling a Crypto Company,” explaining how crypto can help startups raise money, acquire customers and build a global profile. The issuing of tokens, for example, can align the incentives of early users and reinforce network effects, helping solve the “cold-start” problem that can derail many startups.

Armstrong also outlines the disadvantages of crypto that entrepreneurs must watch out for, including regulatory uncertainty. On balance, he thinks crypto is where the internet was in the early days.

“In five or 10 years, pretty much every startup that gets created, it’s going to use the internet, it’s going to use AI and it’s also going to use some form of cryptocurrency somewhere in that product.”

In the next lecture, Balaji Srinivasan, an angel investor and co-founder of multiple companies, including Earn.com and Counsyl, gives an overview of “Applications: Today & 2025.”

Srinivasan starts off by tracing the history of crypto from Bitcoin and Ethereum to the present. He highlights the crypto applications that have already gotten traction — infrastructure providers such as exchanges, wallets and miners; decentralized finance (DeFi) apps; and stablecoins that eliminate the volatility of early cryptocurrencies — and looks ahead to the ones that are likely to emerge in the next five years. These include personal tokenization, new financial instruments, decentralized autonomous organizations and gaming.

Finally, Forte co-founder and CEO Josh Williams does a deep dive on “Opportunities for Crypto and Gaming.” Williams explains that blockchain technology could have an even bigger impact on gaming than the internet because it’s not just connecting people, but potentially changing business models by aligning the incentives of developers and players. It can do this by allowing players to truly own the assets in games and verify their provenance, and by enabling developers to code rich incentive systems and rewards into games.

By incorporating these mechanisms, Williams believes, an already exploding gaming industry will grow and create multi-billion-dollar marketplaces within games that will truly benefit players and developers.

Autonomous aviation startup Xwing raises $10M to scale its software for pilotless flights

By Kirsten Korosec

Autonomous aviation startup Xwing locked in a $10 million funding round before COVID-19 hit. Now the San Francisco-based startup is using the capital to hire talent and scale the development of its software stack as it aims for commercial operations later this year — pending FAA approvals.

The company announced Wednesday its Series A funding round, which was led by R7 Partners, with participation from early-stage VC Alven, Eniac Ventures and Thales Corporate Ventures. Xwing has already hired several key executives with that fresh injection of capital, including Terrafugia’s former co-founder and COO Anna Dietrich and Ed Lim, a Lockheed Martin and Aurora Flight Sciences veteran who more recently led guidance navigation and control for Uber’s autonomous car division as well as Zipline’s AV delivery drone.

Xwing is different from some of the other autonomous aviations startups that have popped up in recent years. The startup isn’t building autonomous helicopters and planes. Instead, it’s focused on the software stack that will enable pilotless flight of small passenger aircraft.

Xwing is also aircraft agnostic. The company’s engineers are focused on the key functions of autonomous flight, such as sensing, reasoning and control. The software stack, which is designed to work across different kinds of aircraft, is integrated into existing aerospace systems. That strategy of retrofitting existing aircraft will speed up deployment, while maintaining safety and keeping costs in check, according to founder and CEO Marc Piette. It also is a straighter path towards regulatory approval.

“It’s more effective for us to not constrain ourselves to a given vehicle and to develop technology that is considered more of an enabler— from a marketing perspective — than going full stack, Piette said when asked if Xwing would ever try to build an autonomous aircraft from the groundup.

Since Xwing’s last funding round — $4 million in summer 2018 — the company has been developing its tech and working with the FAA to receive flight certification for pilotless aircraft. Once approved, the company will seek to commercialize pilotless flights.

The startup hasn’t named any commercial partners yet. And Piette hasn’t provided details about its commercial strategy either, although he said to expect more announcements this year.

Xwing is already working with Bell for NASA’s Unmanned Aircraft Systems (UAS in the NAS) program, an initiative meant to mature the key remaining technologies that are needed to integrate unmanned aircraft in U.S. airspace. The program plans to hold demonstration flights this summer.

Color receives FDA authorization for COVID-19 test tech that speeds up results

By Darrell Etherington

Color has received an Emergency Use Authorization from the U.S. Food and Drug Administration (FDA) for use of a testing method for detecting COVID-19 that provides accuracy it says is on par with currently approved best-in-class methods, but that can also produce results around 50 percent faster and with different supply requirements. That means more tests, done more quickly, and without the same supply chain bottlenecks – and Color is making its protocol for the tests available publicly for other labs.

In March, Color announced its intent to launch a high-throughput COVID-19 testing lab, and LAMP provides a big part of improving turnaround time since many parts of the testing process can be automated – which isn’t possible with the existing RT-PCR tests. Both these tests are molecular, meaning they detect presence of the actual virus int eh body, and LAMP has been used previously as a technique for testing for Zika and dengue fever.

In addition to making the LAMP testing protocol it developed freely available to other labs for their own implementation, Color is offering a protocol it designed based on available data for population-based screening and regular testing in order to facilitate back-to-work efforts, while also keeping workforces as safe as possible. The protocol details two phases, including one where there hasn’t been any confirmed case in a workplace, but alert remains high, and a second where there’s been a number of confirmed cases and containment is necessary.

Color has ben working with the city of San Francisco on testing protocol for its essential and frontline workforce, and it has also been working with MIT’s Broad Institute and Harvard and Weill Cornell Medicine in development of its tech. These combined efforts put it in a good position to share its learnings with others as more in the U.S. seek to stage re-openings while continuing to contain the spread of the virus.

Polestar to open first US stores in the second half of 2020

By Kirsten Korosec

Polestar’s first U.S. retail stores will open in Los Angeles, New York City and two locations in San Francisco later this year — the latest milestone for the automaker as it gets closer to bringing its all-electric vehicle to market.

Polestar, which is jointly owned by Volvo Car Group and Zhejiang Geely Holding of China, was once a high-performance brand under Volvo Cars. The 2021 Polestar 2 is the first EV to come out of Polestar since it was recast as an electric performance brand in 2017.

The company has had plans to open physical retail showrooms called “Polestar Spaces.” Those plans have been delayed by stay-at-home orders prompted by the COVID-19 pandemic. The stores are expected to open in the second half of 2020.

Polestars plans to expand its retail footprint in the first half of 2021 with locations in Boston, Denver, Texas, Washington, D.C. and Florida. More than 80% of Polestar 2 reservation holders reside within a 150-mile range of the stores scheduled to open by mid 2021, according to Gregor Hembrough, head of Polestar USA.

Unlike the traditional dealership model, Polestar will sell or lease its cars online to customers in all 50 states. The physical stores, which will be in partnership with retailers such as Manhattan Motorcars, Galpin Motors and Price-Simms Automotive Group, are meant to supplement its digital strategy.

3 views on the future of work, coffee shops and neighborhoods in a post-pandemic world

By Devin Coldewey

The novel coronavirus pandemic has disordered traditional notions of work, travel, socializing and the way we collaborate with colleagues.

It seems obvious that the future of work must evolve, given what we’re experiencing, but what will that future look like? Which changes are here to stay and which ones will revert the moment offices reopen?

TechCrunch has been a WFH employer for essentially its entire existence. Our staff is distributed across major startup hubs like SF and NYC, but we also have writers in smaller cities around the world, so we compiled reflections and thoughts from three of them about how remote work has changed our lifestyles and what we predict to see in the next few years, post-COVID 19.

Devin Coldewey talks about what’s going to change with coffee shops and co-working spaces, Alex Wilhelm discusses the future of the home office setup and Danny Crichton talks about the revitalization of urban and semi-urban neighborhoods.

Devin Coldewey on coffee shops and more flexible work arrangements

I’ve worked from home for over a decade and part of what makes it so lovely is the ability to do my work from a nearby cafe, or even a restaurant or bar. I’m lucky in that my part of the city is famously packed with excellent coffee shops, but in the time I’ve lived here I’ve seen them grow increasingly packed with — well, people like me. Some days they seem more like co-working spaces than cafes — and this is something business owners and neighborhoods are going to need to acknowledge one way or the other.

Most urban and suburban American communities were formed around the convention of commuting, which means fewer work-related resources where people live. Instead, we have all the restaurants, bodegas, thrift stores and all the other things that cater to people who aren’t working.

Runa Capital closes Fund III at $157M, with an added focus on quantum computing

By Mike Butcher

VC fund Runa Capital was launched with $135 million in 2010, and is perhaps best known for its investment into NGINX, which powers many web sites today. In more recent years it has participated or led investments into startups such as Zipdrug ($10.8 million); Rollbar this year ($11 million); and Monedo (for €20 million).

HQ’d in San Francisco, it has now completed the final closing on its $157 million Runa Capital Fund III, which, they say, exceeded its original target of $135 million.

The firm typically invests between $1 million and $10 million in early-stage companies, predominantly Series A rounds, and has a strong interest in cloud infrastructure, open-source software, AI and machine intelligence and B2B SaaS, in markets such as finance, education and healthcare.

Dmitry Chikhachev, co-founder and managing partner of Runa Capital, said in a statement: “We are excited to see many of our portfolio companies’ founders investing in Runa Capital III, along with tech-savvy LPs from all parts of the world, who supported us in all of our funds from day one… We invested in deep tech long before it became the mainstream for venture capital, betting on Nginx in 2011, Wallarm and ID Quantique in 2013, and MariaDB in 2014.”

Going forward the firm says it aims to concentrate much of its firepower in the realm of machine learning and quantum computing.

In addition, Jinal Jhaveri, ex-CEO & founder of SchoolMint, a former portfolio company of Runa Capital which was acquired by Hero K12, has joined the firm as a venture partner.

Runa operates out of its HQ in Palo Alto to its offices throughout Europe. Its newest office opened in Berlin in early 2020, given Runa Capital’s growing German portfolio. German investments have included Berlin-based Smava and Mambu, as well as the recently added Monedo (formerly Kreditech), Vehiculum and N8N (a co-investment with Sequoia Capital) . Other investments made from the third fund include Rollbar, Reelgood, Forest Admin, Uploadcare and Oxygen.

N8N and three other startups were funded through Runa Capital’s recently established seed program that focuses on smaller investments up to $100,000.

How Apple reinvented the cursor for iPad

By Matthew Panzarino

Even though Apple did not invent the mouse pointer, history has cemented its place in dragging it out of obscurity and into mainstream use. Its everyday utility, pioneered at Xerox Parc and later combined with a bit of iconic* work from Susan Kare at Apple, has made the pointer our avatar in digital space for nearly 40 years.

The arrow waits on the screen. Slightly angled, with a straight edge and a 45 degree slope leading to a sharp pixel-by-pixel point. It’s an instrument of precision, of tiny click targets on a screen feet away. The original cursor was a dot, then a line pointing straight upwards. It was demonstrated in the ‘Mother of all demos’ — a presentation roughly an hour and a half long that contained not only the world’s first look at the mouse but also hyper linking, document collaboration, video conferencing and more.

The star of the show, though, was the small line of pixels that made up the mouse cursor. It was hominem ex machina — humanity in the machine. Unlike the text entry models of before, which placed character after character in a facsimile of a typewriter, this was a tether that connected us, embryonic, to the aleph. For the first time we saw ourselves awkwardly in a screen.

We don’t know exactly why the original ‘straight up arrow’ envisioned by Doug Engelbart took on the precise angled stance we know today. There are many self-assured conjectures about the change, but few actual answers — all we know for sure is that, like a ready athlete, the arrow pointer has been there, waiting to leap towards our goal for decades. But for the past few years, thanks to touch devices, we’ve had a new, fleshier, sprinter: our finger.

The iPhone and later the iPad didn’t immediately re-invent the cursor. Instead, it removed it entirely. Replacing your digital ghost in the machine with your physical meatspace fingertip. Touch interactions brought with them “stickiness” — the 1:1 mating of intent and action. If you touched a thing, it did something. If you dragged your finger, the content came with it. This, finally, was human-centric computing.

Then, a few weeks ago, Apple dropped a new kind of pointer — a hybrid between these two worlds of pixels and pushes. The iPad’s cursor, I think, deserves closer examination. It’s a seminal bit of remixing from one of the most closely watched idea factories on the planet.

In order to dive a bit deeper on the brand new cursor and its interaction models, I spoke to Apple SVP Craig Federighi about its development and some of the choices by the teams at Apple that made it. First, let’s talk about some of the things that make the cursor so different from what came before…and yet strangely familiar.

—————————

The iPad cursor takes on the shape of a small circle, a normalized version of the way that the screen’s touch sensors read the tip of your finger. Already, this is different. It brings that idea of placing you inside the machine to the next level, blending the physical nature of touch with the one-step-removed trackpad experience.

Its size and shape is also a nod to the nature of iPad’s user interface. It was designed from the ground up as a touch-first experience. So much so that when an app is not properly optimized for that modality it feels awkward, clumsy. The cursor as your finger’s avatar has the same impact wherever it lands.

Honestly, the thinking could have stopped there and that would have been perfectly adequate. A rough finger facsimile as pointer. But the concept is pushed further. As you approach an interactive element, the circle reaches out, smoothly touching then embracing and encapsulating the button.

The idea of variable cursor velocity is pushed further here too. When you’re close to an object on the screen, it changes its rate of travel to get where you want to go quicker, but it does it contextually, rather than linearly, the way that OS X or Windows does.

Predictive math is applied to get you to where you’re going without you having to land precisely there, then a bit of inertia is applied to keep you where you need to be without over shooting it. Once you’re on the icon, small movements of your finger jiggle the icon so you know you’re still there.

The cursor even disappears when you stop moving it, much as the pressure of your finger disappears when you remove it from the screen. And in some cases the cursor possesses the element itself, becoming the button and casting a light ethereal glow around it.

This stir fry of path prediction, animation, physics and fun seasoning is all cooked into a dish that does its best to replicate the feel of something we do without thinking: reaching out and touching something directly.

These are, in design parlance, affordances. They take an operation that is at its base level much harder to do with a touchpad than it is your finger, and make it feel just as easy. All you have to do to render this point in crystal is watch a kid who uses an iPad all day try to use a mouse to accomplish the same task.

The idea that a cursor could change fluidly as needed in context isn’t exactly new. The I-Beam (the cursor type that appears when you hover over editable text) is a good example of this. There were also early experiments at Xerox Parc — the birthplace of the mouse — that also made use of a transforming cursor. They even tried color changes, but never quite got to the concept of on-screen elements as interactive objects — choosing to emulate functions of the keyboard.

But there has never been a cursor like this one. Designed to emulate your finger, but also to spread and squish and blob and rush and rest. It’s a unique addition to the landscape.

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Given how highly scrutinized Apple’s every release is, the iPad cursor not being spoiled is a minor miracle. When it was released as a software update for existing iPads — and future ones — people began testing it immediately and discovering the dramatically different ways that it behaved from its pre-cursors.*

Inside Apple, the team enjoyed watching the speculation externally that Apple was going to pursue a relatively standard path — displaying a pointer on screen on the iPad — and used it as motivation to deliver something more rich, a solution to be paired with the Magic Keyboard. The scuttlebutt was that Apple was going to add cursor support to iPad OS, but even down to the last minute the assumption was that we would see a traditional pointer that brought the iPad as close as possible to ‘laptop’ behavior.

Since the 2018 iPad Pro debuted with the smart connector, those of us that use the iPad Pro daily have been waiting for Apple to ship a ‘real’ keyboard for the device. I went over my experiences with the Smart Keyboard Folio in my review of the new iPad Pro here, and the Magic Keyboard here, but suffice to say that the new design is incredible for heavy typists. And, of course, it brings along a world class trackpad for the ride.

When the team set out to develop the new cursor, the spec called for something that felt like a real pointer experience, but that melded philosophically with the nature of iPad.

A couple of truths to guide the process:

  • The iPad is touch first.
  • iPad is the most versatile computer that Apple makes.

In some ways, the work on the new iPad OS cursor began with the Apple TV’s refreshed interface back in 2015. If you’ve noticed some similarities between the way that the cursor behaves on iPad OS and the way it works on Apple TV, you’re not alone. There is the familiar ‘jumping’ from one point of interest to another, for instance, and the slight sheen of a button as you move your finger while ‘hovering’ on it.

“There was a process to figure out exactly how various elements would work together,” Federighi says. “We knew we wanted a very touch-centric cursor that was not conveying an unnecessary level of precision. We knew we had a focus experience similar to Apple TV that we could take advantage of in a delightful way. We knew that when dealing with text we wanted to provide a greater sense of feedback.”

“Part of what I love so much about what’s happened with iPadOS is the way that we’ve drawn from so many sources. The experience draws from our work on tvOS, from years of work on the Mac, and from the origins of iPhone X and early iPad, creating something new that feels really natural for iPad.”

And the Apple TV interface didn’t just ‘inspire’ the cursor — the core design team responsible works across groups, including the Apple TV, iPad OS and other products.

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But to understand the process, you have to get a wider view of the options a user has when interacting with an Apple device.

Apple’s input modalities include:

  • Mouse (Mac)
  • Touchpad (Mac, MacBook, iPad)
  • Touch (iPhone, iPad)
  • AR (iPhone, iPad, still nascent)

Each of these modalities has situational advantages or disadvantages. The finger, of course, is an imprecise instrument. The team knew that they would have to telegraph the imprecise nature of a finger to the user, but also honor contexts in which precision was needed.

(Image:Jared Sinclair/Black Pixel)

Apple approached the experience going in clean. The team knew that they had the raw elements to make it happen. They had to have a touch sensitive cursor, they knew that the Apple TV cursor showed promise and they knew that more interactive feedback was important when it came to text.

Where and how to apply which element was the big hurdle.

When we were first thinking about the cursor, we needed it to reflect the natural and easy experience of using your finger when high precision isn’t necessary, like when accessing an icon on the home screen, but it also needed to scale very naturally into high precision tasks like editing text,” says Federighi.

“So we came up with a circle that elegantly transforms to accomplish the task at hand. For example, it morphs to become the focus around a button, or to hop over to another button, or it morphs into something more precise when that makes sense, like the I-beam for text selection.“

The predictive nature of the cursor is the answer that they came up with for “How do you scale a touch analogue into high precision?”

But the team needed to figure out the what situations demanded precision. Interacting with one element over another one close by, for example. That’s where the inertia and snapping came in. The iPad, specifically, is multipurpose computer so it’s way more complex than any single-input device. There are multiple modalities to service with any cursor implementation on the platform. And they have to be honored without tearing down all of the learning that you’ve put millions of users through with a primary touch interface.

We set out to design the cursor in a way that retains the touch-first experience without fundamentally changing the UI,” Federighi says. “So customers who may never use a trackpad with their iPad won’t have to learn something new, while making it great for those who may switch back and forth between touch and trackpad.”

The team knew that it needed to imbue the cursor with the same sense of fluidity that has become a pillar of the way that iOS works. So they animated it, from dot to I-beam to blob. If you slow down the animation you can see it sprout a bezier curve and flow into its new appearance. This serves the purpose of ‘delighting’ the user — it’s just fun — but it also tells a story about where the cursor is going. This keeps the user in sync with the actions of the blob, which is always a danger any time you introduce even a small amount of autonomy in a user avatar.

Once on the icon, the cursor moves the icon in a small parallax, but this icon shift is simulated — there are not layers here like on Apple TV, but they would be fun to have.

Text editing gets an upgrade as well, with the I-Beam conforming to the size of the text you’re editing, to make it abundantly clear where the cursor will insert and what size of text it will produce when you begin typing.

The web presented its own challenges. The open standard means that many sites have their own hover elements and behaviors. The question that the team had to come to grips with was how far to push conformity to the “rules” of iPad OS and the cursor. The answer was not a one-size application of the above elements. It had to honor the integral elements of the web.

People were not going to re-write the web for Apple, Federighi acknowledges.

Perfecting exactly where to apply these elements was an interesting journey. For instance, websites do all manner of things – sometimes they have their own hover experiences, sometimes the clickable area of an element does not match what the user would think of as a selectable area,” he says. “So we looked carefully at where to push what kind of feedback to achieve a really high level of compatibility out the gates with the web as well as with third party apps.”

Any third-party apps that have used the standard iPad OS elements get all of this work for free, of course. It just works. And the implementation for apps that use custom elements is pretty straightforward. Not flick-a-switch simple, but not a heavy lift either.

The response to the cursor support has been hugely positive so far, and that enthusiasm creates momentum. If there’s a major suite of productivity tools that has a solid user base on iPad Pro, you can bet it will get an update. Microsoft, for instance, is working on iPad cursor support that’s expected to ship in Office for iPad this fall.

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System gestures also feel fresh and responsive even on the distanced touchpad. In some ways, the flicking and swiping actually feel more effective and useful on the horizontal than they do on the screen itself. I can tell you from personal experience that context switching back and forth from the screen to the keyboard to switch between workspaces introduces a lot of cognitive wear and tear. Even the act of continuously holding your arm up and out to swipe back and forth between workspaces a foot off the table introduces a longer term fatigue issue.

When the gestures are on the trackpad, they’re more immediate, smaller in overall physical space and less tiring to execute.

Many iPad gestures on the trackpad are analogous to those on the Mac, so you don’t have to think about them or relearn anything. However, they respond in a different, more immediate way on iPad, making everything feel connected and effortless,” says Federighi.

Remember that the first iPad multitasking gestures felt like a weird offshoot. An experiment that appeared useless at worst but an interesting curiosity at best. Now, on the home button free iPad Pro, the work done by the team that built the iPhone X shines brightly. It’s pretty remarkable that they built a system so usable that it even works on trackpad — one element removed from immediate touch.

Federighi says that they thought about rethinking 3 finger gestures altogether. But they discovered that they work just fine as is. In the case of anything that goes off of the edge you hit a limit and just push beyond it again to confirm and you get the same result.

There are still gaps in the iPad’s cursor paradigms. There is no support for cursor lock on iPad, making it a non starter for relative mouse movement in 3D apps like first person games. There’s more to come, no doubt, but Apple had no comment when I asked about it.

The new iPad cursor is a product of what came before, but it’s blending, rather than layering, that makes it successful in practice. The blending of the product team’s learnings across Apple TV, Mac and iPad. The blending of touch, mouse and touchpad modalities. And, of course, the blending of a desire to make something new and creative and the constraint that it also had to feel familiar and useful right out of the box. It’s a speciality that Apple, when it is at its best, continues to hold central to its development philosophy.

Alphabet’s Loon partners with AT&T to extend coverage globally in case of disasters

By Darrell Etherington

Alphabet-owned Loon, the company focused on providing connectivity via high-altitude, stratosphere skimming balloons that can act as on-demand, deployable cell towers, has signed a new agreement with AT&T. This partnership will help Loon ensure it’s in a much better position to address any potential need for disaster response cellular network coverage, thanks to AT&T and it global network partners.

The main benefit of the tie-up is that Loon’s system will now be fully integrated with AT&T, and this will also extend to any third-party mobile service provider that is already partnered with the U.S. carrier in order to provide international roaming for its network. That’s a key ingredient because the nature of disaster preparedness means you can’t really be sure when or where service will be needed, so the extended AT&T network provides a good swath of global coverage ready to be turned on in relatively short notice.

This is actually one of the most time-consuming elements of the entire process of setting up an emergency response Loon deployment, and can take “weeks or months” according to the company. Perhaps not surprisingly to anyone who has worked with carriers, there’s a lot of discussion and negotiation involved, which in many ways is more difficult than launching balloons to the stratosphere and navigating them thousands of miles with sensitive antenna attached.

The new partnership means that Loon should have over 200 global roaming partners ready to go in case of need, thanks to AT&T’s existing agreements. Loon notes that this won’t mean they don’t still work with local operators directly in order to improve and expedite response, and it still needs to work with local regulators and ensure that there is ground infrastructure present that can work with its equipment.

Loon is also tackling those potential hurdles, however, securing agreements with various regulatory bodies and governments for fly-over permission (it has signed over 50 thus far), and it’s also placing ground infrastructure where it’s likely to be needed most – like in the Caribbean, where it’s in the process of installing ground stations in anticipation of the forthcoming hurricane season for this year.

Loon previously worked with AT&T during its disaster response efforts in Puerto Rico after Hurricane Maria, so the two have a history of working collaboratively in times of need.

Meanwhile, Loon is also readying its first commercial service deployment in Kenya, which will be a big milestone in terms of its broader goals of providing reliable service to hard-to-reach areas around the world.

Grab your Disrupt Digital Pro Pass today for Disrupt SF 2020

By Emma Comeau

We’ve always wanted to make the Disrupt SF (September 14-16) experience available to people who can’t travel to San Francisco. Nothing like a global pandemic to shift priorities and spur innovation. We’ve reserved the Moscone Center for September 14-16, but if you can’t attend in person — for any reason — why not join us online with a Disrupt Digital Pass?

The Digital Pass offers unprecedented, interactive online access to a range of Disrupt SF content. As always, we offer different pricing tiers to keep Disrupt accessible to as many people as possible. You have your choice of two digital ways to play.

Looking for the most immersive, interactive Disrupt experience and the opportunity to engage with the global TechCrunch community? We’ve got you covered — and it won’t break the bank.

The Disrupt Digital Pro Pass is just $245 for a limited time and includes access to content from all stages via live-stream and videos-on-demand so you can watch on your own schedule. You’ll have live-stream and VOD access to:

The Extra Crunch Stage — where top experts (think growth gurus, investors, legal eagles and leading technologists) join TechCrunch editors to discuss the crucial topics founders need to succeed

The Q&A Stage submit questions during live Q&A sessions with speakers who have appeared with TechCrunch editors on the Disrupt and Extra Crunch stages.

The Showcase Stage — watch as top founders exhibiting in Startup Alley step on stage, pitch their products and field questions from TechCrunch editors.

Startup Alley — peruse and interact virtually with hundreds of exhibiting startups, view product demos and schedule virtual one-on-one meetings with founders.

Disrupt wouldn’t be Disrupt without world-class networking, and that still holds true in 2020. Experience easy, effective networking from home with CrunchMatch. This AI-driven networking tool helps you find like-minded attendees, request meetings and connect via a private video conference. It’s the easiest way to network with the people who can help you move forward.

Engage with sponsors. They’re a smart bunch of folks, and Digital Pro pass holders will have plenty of opportunity to schedule one-on-one meetings with reps or watch sponsor presentations.

For those with tighter budgets, we created the free Disrupt Digital Pass. This pass provides access to the Disrupt Stage live stream and access to all the Disrupt Stage content via video on demand (VOD).

What happens on the Disrupt Stage? TechCrunch editors interview the biggest names in tech. Disrupt always features an amazing lineup of speakers with top founders, investors and experts from across the startup ecosystem. Case in point: Don’t miss the conversation with Atlassian co-founder and co-CEO Mike Cannon-Brookes, who also knows a thing or two about investing in software, fintech, agriculture and energy.

Disrupt SF 2020 takes place on September 14-16, and even if you can’t join us in person, you can still experience all the opportunities Disrupt offers. Get your Disrupt Digital Pass today, and keep your startup moving forward.

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