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Today — January 19th 2021Your RSS feeds

Qualcomm-backed chipmaker Kneron nails Foxconn funding, deal

By Rita Liao

A startup based out of San Diego and Taipei is quietly nailing fundings and deals from some of the biggest names in electronics. Kneron, which specializes in energy-efficient processors for edge artificial intelligence, just raised a strategic funding round from Taiwan’s manufacturing giant Foxconn and integrated circuit producer Winbond.

The deal came a year after Kneron closed a $40 million round led by Hong Kong tycoon Li Ka-Shing’s Horizons Ventures. Amongst its other prominent investors are Alibaba Entrepreneurship Fund, Sequoia Capital, Qualcomm and SparkLabs Taipei.

Kneron declined to disclose the dollar amount of the investment from Foxconn and Winbond due to investor requests but said it was an “eight figures” deal, founder and CEO Albert Liu told TechCrunch in an interview.

Founded in 2015, Kneron’s latest product is a neural processing unit that can enable sophisticated AI applications without relying on the cloud. The startup is directly taking on the chips of Intel and Google, which it claims are more energy-consuming than its offering. The startup recently got a talent boost after hiring Davis Chen, Qualcomm’s former Taipei head of engineering.

Among Kneron’s customers are Chinese air conditioning giant Gree and German’s autonomous driving software provider Teraki, and the new deal is turning the world’s largest electronics manufacturer into a client. As part of the strategic agreement, Kneron will work with Foxconn on the latter’s smart manufacturing and newly introduced open platform for electric vehicles, while its work with Winbond will focus on microcontroller unit (MCU)-based AI and memory computing.

“Low-power AI chips are pretty easy to put into sensors. We all know that in some operation lines, sensors are quite small, so it’s not easy to use a big GPU [graphics processing unit] or CPU [central processing unit], especially when power consumption is a big concern,” said Liu, who held R&D positions at Qualcomm and Samsung before founding Kneron.

Unlike some of its competitors, Kneron designs chips for a wide range of use cases, from manufacturing, smart home, smartphones, robotics, surveillance, payments, to autonomous driving. It doesn’t just make chips but also the AI software embedded in the chips, a strategy that Liu said differentiates his company from China’s AI darlings like SenseTime and Megvii, which enable AI service through the cloud.

Kneron has also been on a less aggressive funding pace than these companies, which fuel their rapid expansion through outsize financing rounds. Six-year-old SenseTime has raised about $2.6 billion to date, while nine-year-old Megvii has banked about $1.4 billion. Kneron, in comparison, has raised just over $70 million from a Series A round.

Like the Chinese AI upstarts, Kneron is weighing an initial public offering. The company is expected to make a profit in 2023, Liu said, and “that will probably be a good time for us to go IPO.”

Before yesterdayYour RSS feeds

12 ‘flexible VCs’ who operate where equity meets revenue share

By Walter Thompson
David Teten Contributor
David Teten is founder of Versatile VC and writes periodically at teten.com and @dteten.
Jamie Finney Contributor
Jamie Finney is a founding partner at Greater Colorado Venture Fund, where he blogs about his work on VC and small communities.

Previously, we introduced the concept of flexible VC: structures that allow founders to access immediate risk capital while preserving exit and ownership optionality. We list here all the active flexible VCs we have identified, broken into these categories:

  • Revenue-based
  • Compensation-based
  • Blended-return streams

Revenue-based flexible VCs

These investors are paid back primarily based on a percentage of revenues.

Capacity Capital

Chattanooga, TN-based Capacity Capital was launched in 2020 with a primary focus on the southeastern U.S. Jonathan Bragdon, its CEO, describes Capacity as “a team of founders-turned-funders making non-dilutive, founder-aligned investments of $50,000-$300,000 in post-startup, post-revenue businesses planning to 2x revenues in 12-24 months. Investments are typically in exchange for a capped, single-digit revenue share and a right to equity under certain circumstances.

If the company sells or raises enough capital, the investment converts into an agreed-upon percentage of equity. If the company grows without raising additional equity funding, founders redeem most of the equity right, based on a pre-agreed return amount. With a portfolio that includes food, tech and services, the fund is industry-agnostic and focused on the overlooked and underrepresented with high-margin business models.”

Jonathan sometimes refers to their investments as “micro-mezzanine” because “mezz is typically structured as a contractual periodic payment, with some equity-like upside, but subordinate to other debt … so most lenders look at it like equity. But, it is typically shorter term with fewer control mechanisms than equity (i.e., not VC). I wanted [a term for] something similar (between debt and equity) but on an extremely small scale.”

In addition to a fund, the overall Capacity organization provides direct mentorship, consulting and connects founders to a broad network of talent, diverse forms of capital and existing resources focused on the post-startup stage of growth. The founders, LPs and venture partners have a long history in local startup ecosystems in the Southeast including LaunchTN, The Company Lab, CO.STARTERS and several other regional funds and resources.

Greater Colorado Venture Fund

Greater Colorado Venture Fund (GCVF) is a $17 million seed fund that invests in high-growth startups in rural Colorado using equity and flexible VC structuring.

A typical GCVF flexible VC investment is $100,000-$250,000 for up to 10% ownership, of which 9% is redeemable, with a sub-10% revenue share and 12-month-plus holiday period. GCVF specializes in providing critical support to founders based in small communities, while connecting them to an unfair network well-beyond their small-town headquarters.

GCVF is pioneering the future of venture capital and high-growth startups for all small communities. With Colorado as an ideal pilot community, the GCVF team (which includes Jamie Finney, a co-author of this article) has helped grow multiple staple initiatives in the rural Colorado startup ecosystem, including West Slope Startup Week, Telluride Venture Accelerator, Startup Colorado, Energize Colorado Gap Fund and the Greater Colorado Pitch Series.

Recognizing the need for creative investment structures in their Colorado market, they co-founded the Alternative Capital Summit, creating the first community of flexible VCs and alternative startup investors.

They share their learnings on flexible VC and pioneering rural startup ecosystems on the GCVF blog.

Sources: Hinge Health has raised $310M Series D at a $3B valuation

By Steve O'Hear

Hinge Health, the San Francisco-based company that offers a digital solution to treat chronic musculoskeletal (MSK) conditions — such as back and joint pain — has closed a $310 million in Series D funding, according to sources.

The round is led by Coatue and Tiger Global, and values 2015-founded Hinge at $3 billion post-money, people familiar with the investment tell me. It comes off the back of a 300% increase in revenue in 2020, with investors told to expect revenue to nearly triple again in 2021 based on the company’s booked pipeline.

I also understand that Hinge’s founders — Daniel Perez and Gabriel Mecklenburg — retain voting control of the board. I’ve reached out to CEO Perez for comment and will update this post should I hear back.

Hinge’s existing investors include Bessemer Venture Partners, which backed the company’s $90 million Series C round in February, along with Lead Edge Capital, Insight Partners (which led the Series B), Atomico (which led the Series A), 11.2 Capital, Quadrille Capital and Heuristic Capital.

Originally based in London, Hinge Health primarily sells into U.S. employers and health plans, billing itself as a digital healthcare solution for chronic MSK conditions. The platform combines wearable sensors, an app and health coaching to remotely deliver physical therapy and behavioral health.

The basic premise is that there is plenty of existing research to show how best to treat chronic MSK disorders, but existing healthcare systems aren’t up to the task due to funding pressures and for other systematic reasons. The result is an over tendency to use opioid-based painkillers or surgery, with poor results and often at even greater cost. Hinge wants to reverse this through the use of technology and better data, with a focus on improving treatment adherence.

Meanwhile, Hinge’s jump in valuation is significant. According to sources, the company’s February round produced a valuation of around $420 million, so the new valuation is more than a 6x increase.

Color raises $167 million funding at $1.5 billion valuation to expand ‘last mile’ of US health infrastructure

By Darrell Etherington

Healthcare startup Color has raised a sizable $167 million in Series D funding round, at a valuation of $1.5 billion post-money, the company announced today. This brings the total raised by Color to $278 million, with its latest large round intended to help it build on a record year of growth in 2020 with even more expansion to help put in place key health infrastructure systems across the U.S. — including those related to the “last mile” delivery of COVID-19 vaccines.

This latest investment into Color was led by General Catalyst, and by funds invested by T. Rowe Price, along with participation from Viking Global investors as well as others. Alongside the funding, the company is also bringing on a number of key senior executives, including Claire Vo (formerly of Optimizely) as chief product officer, Emily Reuter (formerly of Uber, where she played a key role in its IPO process) as VP of Strategy and Operations, and Ashley Chandler (formerly of Stripe) as VP of Marketing.

“I think with the [COVID-19] crisis, it’s really shone the light on that lack of infrastructure. We saw it multiple times, with lab testing, with antigen testing and now with vaccines,” Color CEO and co-founder Othman Laraki told me in an interview. “The model that we’ve been developing, that’s been working really well and we feel like this is the opportunity to really scale it in a very major way. I think literally what’s happening is the building of the public health infrastructure for the country that’s starting off from a technology-first model, as opposed to, what ends up happening in a lot of industries, which is you start off taking your existing logistics and assets, and add technology to them.”

Color’s 2020 was a record year for the company, thanks in part to partnerships like the one it formed with San Francisco to establish testing for healthcare workers and residents. Laraki told me they did about five-fold their prior year’s business, and while the company is already set up to grow on its own sustainably based on the revenue it pulls in from customers, its ambitions and plans for 2021 and beyond made this the right time to help it accelerate further with the addition of more capital.

Laraki described Color’s approach as one that is both cost-efficient for the company, and also significant cost-saving for the healthcare providers it works with. He likens their approach to the shift that happened in retail with the move to online sales — and the contribution of one industry heavyweight in particular.

“At some point, you build Amazon — a technology-first stack that’s optimized around access and scale,” Laraki said. “I think that’s literally what we’re seeing now with healthcare. What’s kind of getting catalyzed right now is we’ve been realizing it applies to the COVID crisis, but also, we started actually working on that for prevention and I think actually it’s going to be applying to a huge surface area in healthcare; basically all the aspects of health that are not acute care where you don’t need to show up in hospital.”

Ultimately, Color’s approach is to rethink healthcare delivery in order to “make it accessible at the edge directly in people’s lives,” with “low transaction costs,” in a way that’s “scalable, [and] doesn’t use a lot of clinical resourcing,” Laraki says. He notes that this is actually very possible once you reasses the problem without relying on a lot of accepted knowledge about the way things are done today, which result in a “heavy stack” versus what you actually need to deliver the desired outcomes.

Laraki doesn’t think the problem is easy to solve — on the contrary, he acknowledges that 2021 is likely to be even more difficult and challenging than 2020 in many ways for the healthcare industry, and we’ve already begun to see evidence of that in the many challenges already faced by vaccine distribution and delivery in its initial rollout. But he’s optimistic about Color’s ability to help address those challenges, and to build out a “last mile” delivery system for crucial care that expands accessibility, while also making sure things are done right.

“When you take a step back, doing COVID testing or COVID vaccinations … those are not complex procedures at all — they’re extremely simple procedures,” he said. “What’s hard is doing them massive scale and with a very low transaction cost to the individual and to the system. And that’s a very different tooling.”

UK judge denies US request to extradite WikiLeaks’ founder, Julian Assange

By Natasha Lomas

A U.K. district court judge has refused to extradite WikiLeaks founder Julian Assange to the U.S.

In a hearing at Westminster Magistrates’ Court this morning, Judge Vanessa Baraitser denied the extradition on grounds that Assange is a suicide risk and extradition to the U.S. prison system would be oppressive, given the likely impact on his fragile mental health.

The U.S., which has been seeking to bring Assange to the country to put him on trial for conspiracy to hack as well as a number of charges under the controversial Espionage Act, has said it will appeal.

The case has been seen as a pivotal test of press freedoms and freedom of expression versus state power.

Breaking: UK judge rules against extradition of Assange to US #AssangeCase

— WikiLeaks (@wikileaks) January 4, 2021

In the judgement Baraitser dismissed a number of other defence arguments against Assange’s extradition but concurred with clinical testimony that he is a suicide risk and that he possesses the intellect to circumvent measures that could be taken to prevent him taking his own life.

“I am satisfied that the risk that Mr. Assange will commit suicide is a substantial one,” she writes in the 132-page judgement, discussing the testimony of a number of psychiatrists during last year’s extradition hearing.

“I accept that oppression as a bar to extradition requires a high threshold. I also accept that there is a strong public interest in giving effect to treaty obligations and that this is an important factor to have in mind. However, I am satisfied that, in these harsh conditions, Mr. Assange’s mental health would deteriorate causing him to commit suicide with the ‘single minded determination’ of his autism spectrum disorder.

“I find that the mental condition of Mr. Assange is such that it would be oppressive to extradite him to the United States of America,” she added.

The judgement orders Assange’s immediate release, although at the time of writing the WikiLeaks founder remains in custody — pending a bail hearing.

The U.S. has 14 days to lodge an appeal.

Assange, who (self) incarcerated in the Embassy of Ecuador in London between 2012 and 2019 to avoid a warrant against him, was arrested last year after Ecuador withdrew his diplomatic asylum.

He was found guilty in a U.K. court of breaching bail conditions and sentenced to 50 weeks.

The U.S. immediately said it would seek his extradition on its separate roster of charges — which relate to how the WikiLeaks founder obtained and published classified information leaked to it by former army intelligence analyst and whistleblower, Chelsea Manning.

Update: A spokesman for the Justice Department confirmed its intention to appeal, sending us this statement: “While we are extremely disappointed in the court’s ultimate decision, we are gratified that the United States prevailed on every point of law raised. In particular, the court rejected all of Mr. Assange’s arguments regarding political motivation, political offense, fair trial, and freedom of speech. We will continue to seek Mr. Assange’s extradition to the United States.”

 

Sidewalk Infrastructure Partners looks to make CA power grids more reliable with a $100 million investment

By Jonathan Shieber

Sidewalk Infrastructure Partners, the company which spun out of Alphabet’s Sidewalk Labs to fund, develop, and own the next generation of infrastructure, has unveiled its latest project — Reslia, which focuses on upgrading the efficiency and reliability of power grids.

Through a $20 million equity investment in the startup OhmConnect, and an $80 million commitment to develop a demand response program leveraging OhmConnect’s technology and services across the state of California, Sidewalk Infrastructure Partners intends to plant a flag for demand-response technologies as a key pathway to ensuring stable energy grids across the country.

‘We’re creating a virtual power plant,” said Sidewalk Infrastructure Partners co-CEO, Jonathan Winer. “With a typical power plant … it’s project finance, but for a virtual power plant… We’re basically going to subsidize the rollout of smart devices.”

The idea that people will respond to signals from the grid isn’t a new one, as Winer himself acknowledged in an interview. But the approach that Sidewalk Infrastructure Partners is taking, alongside OhmConnect, to roll out the incentives to residential customers through a combination of push notifications and payouts, is novel. “The first place people focused is on commercial and industrial buildings,” he said. 

What drew Sidewalk to the OhmConnect approach was the knowledge of the end consumer that OhmConnect’s management team brought to the table The company’s chief technology officer was the former chief technology officer of Zynga, Winer noted.

“What’s cool about the OhmConnect platform is that it empowers participation,” Winer said. “Anyone can enroll in these programs. If you’re an OhmConnect user and there’s a blackout coming, we’ll give you five bucks if you turn down your thermostat for the next two hours.”

Illustration of Sidewalk Infrastructure Partners Resilia Power Plant. Image Credit: Sidewalk Infrastructure Partners

The San Francisco-based demand-response company already has 150,000 users on its platform, and has paid out something like $1 million to its customers during the brownouts and blackouts that have roiled California’s electricity grid over the past year.

The first collaboration between OhmConnect and Sidewalk Infrastructure Partners under the Resilia banner will be what the companies are calling a “Resi-Station” — a 550 megawatt capacity demand response program that will use smart devices to power targeted energy reductions.

At full scale, the companies said that the project will be the largest residential virtual power plant in the world. 

“OhmConnect has shown that by linking together the savings of many individual consumers, we can reduce stress on the grid and help prevent blackouts,” said OhmConnect CEO Cisco DeVries. “This investment by SIP will allow us to bring the rewards of energy savings to hundreds of thousands of additional Californians – and at the same time build the smart energy platform of the future.” 

California’s utilities need all the help they can get. Heat waves and rolling blackouts spread across the state as it confronted some of its hottest temperatures over the summer. California residents already pay among the highest residential power prices in the counry at 21 cents per kilowatt hour, versus a national average of 13 cents.

During times of peak stress earlier in the year, OhmConnect engaged its customers to reduce almost one gigawatt hour of total energy usage. That’s the equivalent of taking 600,000 homes off the grid for one hour.

If the Resilia project was rolled out at scale, the companies estimate they could provide 5 gigawatt hours of energy conservation — that’s the full amount of the energy shortfall from the year’s blackouts and the equivalent of not burning 3.8 million pounds of coal.

Going forward, the Resilia energy efficiency and demand response platform will scale up other infrastructure innovations as energy grids shift from centralized power to distributed, decentralized generation sources, the company said. OhmConnect looks to be an integral part of that platform.

“The energy grid used to be uni-directional.. .we believe that in the near future the grid is going to be become bi-directional and responsive,” said Winer. “With our approach, this won’t be one investment. We’ll likely make multiple investments. [Vehicle-to-grid], micro-grid platforms, and generative design are going to be important.” 

Govtech intelligence platform, The Atlas for Cities, bought by Government Executive Media Group

By Jonathan Shieber

The Atlas for Cities, the 500 Startups-backed market intelligence platform connecting tech companies with state and local governments, has been acquired by the Growth Catalyst Partners-backed publishing and market intelligence company Government Executive Media Group.

The San Diego-based company will become the latest addition to a stable of publications and services that include the Route Fifty, publication for local government and the defense-oriented intelligence service, DefenseOne.

The Atlas provides peer-to-peer networks for state and local government officials to share best practices and is a marketing channel for the startups that want to sell services to those government employees. Through The Atlas, government officials can talk to each other, find case studies for best practices around tech implementations, and post questions to crowdsource ideas.

Government contractors can use the site to network with leadership and receive buyer intent data to inform their strategy in the sector, all while getting intelligence about the problems and solutions that matter to state and local jurisdictions across the nation. 

The Atlas delivers on GEMG’s promise to look for companies that complement and supplement the full suite of offerings that we provide to our partners to reach decision makers across all facets of the public sector,” said Tim Hartman, CEO of Government Executive Media Group, said in a statement.

Led by Ellory Monks and Elle Hempen, The Atlas for Cities launched in 2019 and is backed by financing from individual investors and the 500 Startups accelerator program. It now counts 21,000 government officials across 3,400 cities on its platform.

“State and local governments in the United States spend $3.7 trillion per year. That’s almost 20% of GDP,” said Elle Hempen, co-founder of The Atlas. “Our mission to increase transparency and access for local leaders has the opportunity to transform this enormous, inefficient market and enable tangible progress on the most important issues of our times.”

Obvious Ventures outlines the ‘world-positive’ impact of its startups and shares what’s next

By Connie Loizos

Today, the early-stage, mission-focused, San Francisco-based venture firm Obvious Ventures released a very readable overview of how each of its portfolio companies is benefiting the world in its own way.

Its report shines a light on the grocery deliver service Good Eggs, for example, sharing that roughly 70% of the products sold by the company are grown or produced within 250 miles of its food hub in Oakland, California That matters because fresher food is more nutritious. The electric bus company Proterra is meanwhile starting to save cities millions of dollars in diesel fuel costs while also eliminating thousands of tons of carbon dioxide.

It’s the kind of investing to which more people are gravitating, says Obvious’s cofounder and managing director James Joaquin . We talked with him last week along with one of his firm cofounders, the serial entrepreneur Ev Williams. You can find part of our conversation with Williams here; below, we talked mostly with Joaquin about how Obvious is thinking about 2021 and what the team finds most interesting these days. (Hint, hallucinogens are now in the mix.)

TC: For founders reading this, how many companies is Obvious talking with on a weekly basis right now?

JJ: Annually, we look at or consider about 2,000 investment opportunities. It’s obviously not completely linear distribution, but in terms of incoming investment opportunities that we track, it’s a very large number. Most of those get filtered right up front as either being in a geography we don’t invest in because we’re focused on North America — we’re not focused on Europe or Asia — or maybe they’re what we would call world neutral or world negative [so] outside of our thematic areas. But then a subset of those our team will meet with, and the bottom of that funnel is that we make between 10 to 12 investments per year.

TC: At some firms, everyone is a generalist. At Obvious, each partner seems to have a specific focus, like your focus in part on plant startups. Is this correct? 

JJ:  That’s one of the areas that that that I focus on, for sure. I mean, we’ve got five investing partners in the firm. Within food, I lead our work in plant-based protein and plant-forward food and consumer products companies. Thanks to work that Ev and [Twitter cofounder Biz Stone] did, we were very early investors in Beyond Meat. We’re also an early lead investor in Miyoko’s Creamery, which is a plant-based butter and cheese company that is one of our fastest-growing portfolio companies right now.

TC: How do deals get green-lit?

JJ: The inside baseball is that we tend to form two-person teams on a given deal when it reaches the due diligence stage. So there’s always a lead partner or managing director who’s championing the deal, but there’s a second person from the investment team working on it, too. Then ultimately, a CEO or a management team presents to the full investment committee before we make a decision to to issue a term sheet.

The process isn’t quite unanimous, but each managing director at the firm has the power of veto, so if someone feels really strongly that Obvious shouldn’t make that investment, they have that power to stop an investment, but that rarely occurs.

TC: Who are you seeing that’s newer to the table? More firms say they are paying attention to the themes on which you’ve been focused the start.

JJ: I would say there are a number of new firms that kind of are similar age to us that have also been investing in some of these frontiers. Firms like Lux capital have done a lot of co-investing with us in the computational biology space. Data Collective is a firm that we’ve co-invested with in some of the full stack healthcare work that we do. S2G Ventures is a great plant-based protein food firm that we’ve co-invested with,  so those are some of the new faces that we think are part of this world-positive generation of investors trying to solve big problems with startups and with cutting edge tech.

TC: Are you interested in hallucinogens? 

JJ: It’s absolutely a theme where we’ve been doing research. I should say we’re interested in it specifically for medical use, but we think that these former Schedule 1 drugs like ketamine, MDMA [commonly known as ecstasy], and psilocybin have great potential to solve the mental health crisis that not just the US but that the world is seeing ramped to be a top five human health issue. In the early trials around treatment-resistant depression, PTSD, suicidal ideation, these molecules are showing great promise.

We think there’s an opportunity to create a full-stack healthcare company similar to what we’ve done with Virta Health for [type 2] diabetes, or the work that DevotedHealth, one of our portfolio companies, is doing for seniors in the Medicare space. We think there’s going to be one or more new mental health companies built around this new kind of drug-assisted therapy that these molecules will enable.

TC: Ev, you’re an investor in a company that last month announced a small seed round called Sanity, a platform that helps users build and manage content flows on sites, which seems like a perfect fit for you. When is a deal an Ev Williams deal versus an Obvious Ventures deal?

EW: That was one of the rare deals that I did separate from the firm. I used to do a bit of angel investing before before we formed Obvious and one of the great reliefs for me has been to just send all my deal flow to James and the team. However, as James described, there’s a focus at Obvious both in deal size and area that doesn’t include everything, so Sanity is basically an enterprise product and the reason it was interesting to me is is because of the future infrastructure of how content is [distributed] is super interesting to me for Medium’s purposes. I liked what Sanity is doing. I was really impressed. It just didn’t align necessarily with the focus areas of Obvious, so that’s why I did that deal. But it’s really rare.

TC: What percentage of the firm’s deals are inbound versus outbound?

JJ: We make sure we have the bandwidth to do both. We call it hunting and farming. Farming is farming the inbox, [and reviewing] all those introductions from our networks that come in. Probably 60% to 70% of our investment portfolio came from that inbound, but 30% to 40% came from hunting, which is building apoint of view around a theme that we care about,then going out and mapping out who are all the entrepreneurs who are doing work in that area, and who are the angel investors and pre-seed funds that are doing good work in that area, because those are important relationships for us as well.

TC: What’s your position on Bitcoin?

JJ: We definitely did our research and we tried to answer the question: are there world-positive applications for blockchain writ large and then specifically for Bitcoin as a blockchain cryptocurrency? We haven’t found any that we’ve made an investment in yet, but we’re open to the idea we continue to research that space.

TC: You recently added Tina Hoang-To to the team; she joined you from the late-stage and crossover fund Technology Crossover Ventures. Will Obvious be making more growth-stage investments?

JJ: We’re known for our early stage work, but from day one, we crafted a barbell strategy where we said, because we’re thematic, because we want to find the best plant protein companies, find the best electric transportation companies, we knew that some of those companies that we would be hunting might already be at the growth stage. So we architected our funds to be 75% early stage and 25% emerging growth roughly. Now, with the addition of Tina, we’re basically increasing our horsepower [on that front]. We’ve got someone better and smarter than us who knows [growth stage companies] really well.

TC: Might we see Obvious form a special purpose acquisition company, or SPAC, around a growth-stage company?

JJ: Ev, I know you’ve gotten incoming about SPACs. Our take at Obvious is that we do not have any plans to create an Obvious Ventures SPAC. We tend to stick to our knitting. I will say that a number of our companies that are that are at the growth stage, [meaning in the] $50 million to $100 million dollars [range] of annual revenue where they’re thinking about public markets, they’re being approached by a number of SPAC [sponsors] as interesting targets. So we’re seeing that, and it’s really up to our founders, not us [if they move forward with these]. But we certainly have a voice on the board and we’re considering in some cases, our portfolio companies going public via a SPAC

EW: I haven’t haven’t looked into [SPACs] seriously yet. I think liquidity can be a good thing, and hopefully many of these SPACs will work out, but I’m kind of in a wait-and see-mode like a lot of people.

Bottom-up SaaS: A framework for mapping pricing to customer value

By Walter Thompson
Caryn Marooney Contributor
Caryn Marooney is general partner at Coatue Management and sits on the boards of Zendesk and Elastic. In prior roles she oversaw communications for Facebook, Instagram, WhatsApp and Oculus and co-founded The OutCast Agency, which served clients like Salesforce.com and Amazon.
David Cahn Contributor
David Cahn is an investor at Coatue, where he focuses on software investments. David is passionate about open-source and infrastructure software and previously worked in the Technology Investment Banking Group at Morgan Stanley.

A few years ago, building a bottom-up SaaS company – defined as a firm where the average purchasing decision is made without ever speaking to a salesperson – was a novel concept. Today, by our count, at least 30% of the Cloud 100 are now bottom-up.

For the first time, individual employees are influencing the tooling decisions of their companies versus having these decisions mandated by senior executives. Self-serve businesses thrive on this momentum, leveraging individuals as their evangelists, to grow from a single use-case to small teams, and ultimately into whole company deployments.

In a truly self-service model, individual users can sign up and try the product on their own. There is no need to get compliance approval for sensitive data or to get IT support for integrations — everything can be managed by the line-level users themselves. Then that person becomes an internal champion, driving adoption across the organization.

Today, some of the most well-known software companies such as Datadog, MongoDB, Slack and Zoom, to name a few, are built with a primarily bottom-up product-led sales approach.

In this piece, we will take a closer look at this trend — and specifically how it has fundamentally altered pricing — and at a framework for mapping pricing to customer value.

Aligning value with pricing

In a bottom-up SaaS world, pricing has to be transparent and standardized (at least for the most part, see below). It’s the only way your product can sell itself. In practice, this means you can no longer experiment as you go, with salespeople using their gut instinct to price each deal. You need a concrete strategy that aligns customer value with pricing.

To do this well, you need to deeply understand your customers and how they use your product. Once you do, you can “MAP” them to help align pricing with value.

The MAP customer value framework

The MAP customer value framework requires deeply understanding your customers in order to clearly identify and articulate their needs across Metrics, Activities and People.

Not all elements of MAP should determine your pricing, but chances are that one of them will be the right anchor for your pricing model:

Metrics: Metrics can include things like minutes, messages, meetings, data and storage. What are the key metrics your customers care about? Is there a threshold of value associated with these metrics? By tracking key metrics early on, you’ll be able to understand if growing a certain metric increases value for the customer. For example:

  • Zoom — Minutes: Free with a 40-minute time limit on group meetings.
  • Slack — Messages: Free until 10,000 total messages.
  • Airtable — Records: Free until 1,200 records.

Activity: How do your customers really use your product and how do they describe themselves? Are they creators? Are they editors? Do different customers use your product differently? Instead of metrics, a key anchor for pricing may be the different roles users have within an organization and what they want and need in your product. If you choose to anchor on activity, you will need to align feature sets and capabilities with usage patterns (e.g., creators get access to deeper tooling than viewers, or admins get high privileges versus line-level users). For example:

Digital marketing firms file UK competition complaint against Google’s Privacy Sandbox

By Natasha Lomas

Google’s push to phase out third party tracking cookies — aka its ‘Privacy Sandbox’ initiative — is facing a competition challenge in Europe. A coalition of digital marketing companies announced today that it’s filed a complaint with the UK’s Competition and Markets Authority (CMA), calling for the regulator to block implementation of the Sandbox.

The coalition wants Google’s phasing out of third party tracking cookies to be put on ice to prevent the Sandbox launching in early 2021 to give regulators time to devise or propose what it dubs “long term competitive remedies to mitigate [Google’s dominance]”.

“[Our] letter is asking for the introduction of Privacy Sandbox to be delayed until such measures are put in place,” they write in a press release.

The group, which is badging itself as Marketers for an Open Web (MOW), says it’s comprised of “businesses in the online ecosystem who share a concern that Google is threatening the open web model that is vital to the functioning of a free and competitive media and online economy”.

A link on MOW’s website to a list of “members” was not functioning at the time of writing. But, per Companies House, the entity was incorporated on September 18, 2020 — listing James Roswell, CEO and co-founder of UK mobile marketing company, 51 Degrees, as its sole director.

The CMA confirmed to us that it’s received MOW’s complaint, adding that some of the coalition’s concerns reflect issues identified in a detailed review of the online ad market it published this summer.

However it has not yet taken a decision on whether or not to investigate.

“We can confirm we have received a complaint regarding Google raising certain concerns, some of which relate to those we identified in our online platforms and digital advertising market study,” said the CMA spokesperson. “We take the matters raised in the complaint very seriously, and will assess them carefully with a view to deciding whether to open a formal investigation under the Competition Act.

“If the urgency of the concerns requires us to intervene swiftly, we will also assess whether to impose interim measures to order the suspension of any suspected anti-competitive conduct pending the outcome of a full investigation.”

In its final report of the online ad market, the CMA concluded that the market power of Google and Facebook is now so great that a new regulatory approach — and a dedicated oversight body — is needed to address what it summarized as “wide ranging and self reinforcing” concerns.

Although the regulator chose not to take any enforcement action at that point — preferring to wait for the UK government to come forward with pro-competition legislation.

In its statement today, the CMA makes it clear it could still choose to act on related competition concerns if it feels an imperative to do so — including potentially blocking the launch of Privacy Sandbox to allow time for a full investigation — while it waits for legislators to come up with a regulatory framework. Though, again, it has not yet made any decision to do so.

Reached for a response to the MOW complaint, Google sent us this statement — attributed to a spokesperson:

The ad-supported web is at risk if digital advertising practices don’t evolve to reflect people’s changing expectations around how data is collected and used. That’s why Google introduced the Privacy Sandbox, an open initiative built in collaboration with the industry, to provide strong privacy for users while also supporting publishers.

Also commenting in a statement, MOW’s director Roswell said: “The concept of the open web is based on a decentralised, standards-based environment that is not under the control of any single commercial organisation.  This model is vital to the health of a free and independent media, to a competitive digital business environment and to the freedom and choice of all web users.  Privacy Sandbox creates new, Google-owned standards and is an irreversible step towards a Google-owned ‘walled garden’ web where they control how businesses and users interact online.”

The group’s complaint follows a similar one filed in France last month (via Reuters) — albeit, in that case targeting privacy changes incoming to Apple’s smartphone platform that are also set to limit advertisers access to an iPhone-specific tracking ID that’s generated for that purpose (IDFA).

Apple has said the incoming changes — which it recently delayed until early next year — will give users “greater control over whether or not they want to allow apps to track them by linking their information with data from third parties for the purpose of advertising, or sharing their information with data brokers”. But four online ad associations — IAB France, MMAF, SRI and UDECAM — bringing the complaint to France’s competition regulator argues Apple is abusing its market power to distort competition.

The move by the online ad industry to get European competition regulators to delay Apple’s and Google’s privacy squeeze on third party ad tracking is taking place at the same time as industry players band together to try to accelerate development of their own replacement for tracking cookies — announcing a joint effort called PRAM (Partnership for Responsible Addressable Media) this summer to “advance and protect critical functionalities like customization and analytics for digital media and advertising, while safeguarding privacy and improving consumer experience”, as they put it.

The adtech industry now appears to be coalescing behind a cookie replacement proposal called UnifiedOpen ID 2.0 (UID2).

A document detailing the proposal which had been posted to the public Internet — but was taken down after a privacy researcher drew attention to it — suggests they want to put in place a centralized system for tracking Internet users that’s based on personal data such as an email address or phone number.

“UID2 is based on authenticated PII (e.g. email, phone) that can be created and managed by constituents across advertising ecosystem, including Advertisers, Publishers, DSPs, SSPs,” runs a short outline of the proposal in a paper authored by two people from a Demand Side Platform called The Trade Desk (which is proposing to build the tech but then hand it off to an “independent and non-partial entity” to manage).

One component of the UID2 proposal consists of a “Unified ID Service” that it says would apply a salt and hash process to the PII to generate UID2 and encrypting that to create a UID2 Token, as well as provision login requests from publishers to access the token.

The other component is a user facing website that’s described as a “transparency & consent service” — to handle requests for data or UID2 logouts etc.

However the proposal by the online ad industry to centralize Internet users’ identity by attaching it to hashed pieces of actual personal data — and with a self-regulating “Trusted Ads Ecosystem” slated to be controlling the mapping of PII to UID2 — seems unlikely to assuage the self-same privacy concerns which are fuelling the demise of tracking cookies in the first place (to put it mildly).

Trusting the mass surveillance industry to self regulate a centralized ID system for Internet users is for the birds.

But adtech players are clearly hoping they can buy themselves enough time to cobble together a self-serving cookie alternative — and sell it to regulators as a competition remedy. (Their parallel bet is they can buy off inactive privacy regulators with bogus claims of ‘transparency and consent’.)

So it will certainly be interesting to see whether the adtech industry succeeds in forcing competition regulators to stand in the way of platform level privacy reforms, while pulling off a major reorg and rebranding exercise of its privacy-hostile tracking operations.

In a counter move this month, European privacy campaign group, noyb, filed two complaints against Apple for not obtaining consent from users to create and store the IDFA on their devices.

So that’s one bit of strategic pushback.

Real-time bidding, meanwhile, remains under regulatory scrutiny in Europe — with huge questions over the lawfulness of its processing of Internet users’ personal data. Privacy campaigners are also now challenging data protection regulators over their failure to act on those long-standing complaints.

A flagship online ad industry tool for gathering web users’ consent to tracking is also under attack and looks to be facing imminent action under the bloc’s General Data Protection Regulation (GDPR) .

Last month an investigation by Belgium’s data protection agency found the IAB Europe’s so-called Transparency and Consent Framework (TCF) didn’t offer either — failing to meet the GDPR standard for transparency, fairness and accountability, and the lawfulness of data processing. Enforcement action is expected in early 2021.

Verizon partners with Apple to launch 5G Fleet Swap

By Frederic Lardinois

Apple and Verizon today announced a new partnership that will make it easier for their business partners to go all-in on 5G. Fleet Swap, as the program is called, allows businesses to trade in their entire fleet of smartphones — no matter whether they are currently a Verizon customer or not — and move to the iPhone 12 with no upfront cost and either zero cost (for the iPhone 12 mini) or a low monthly cost.

(Disclaimer: Verizon is TechCrunch’s corporate parent. The company has zero input into our editorial decisions.)

In addition, Verizon also today announced its first two major indoor 5G ultra wideband services for its enterprise customers. General Motors and Honeywell are the first customers here, with General Motors enabling the technology at its Detroit-Hamtramck Assembly Center, the company’s all-electric vehicle plant. To some degree, this goes to show how carriers are positioning 5G ultra wideband as more of an enterprise feature than the lower-bandwidth versions of 5G.

“I think about how 5G [ultra wide band] is really filling a need for capacity and for capability. It’s built for industrial commercial use cases. It’s built on millimeter wave spectrum and it’s really built for enterprise,” Verizon Business CEO Tami Erwin told me.

It’s important to note that these two projects are not private 5G networks. Verizon is also in that business and plans to launch those more broadly in the future.

“No matter where you are on your digital transformation journey, the ability to put the power of 5G Ultra Wideband in all of your employees’ hands right now with a powerful iPhone 12 model, the best smartphone for business, is not just an investment for growth, it’s what will set a business’s future trajectory as technology continues to advance,” Erwin said in today’s announcement.

As for 5G Fleet Swap, the idea here is obviously to get more businesses on Verizon’s 5G network and, for Apple, to quickly get more iPhone 12s into the enterprise. Apple clearly believes that 5G can provide some benefits to enterprises — and maybe more so than to consumers — thanks to its low latency for AR applications, for example.

“The iPhone 12 lineup is the best for business, with an all-new design, advanced 5G experience, industry-leading security and A14 Bionic, the fastest chip ever in a smartphone,” said Susan Prescott, Apple’s vice president of Markets, Apps and Services. “Paired with Verizon’s 5G Ultra Wideband going indoors and 5G Fleet Swap, an all-new device offer for enterprise, it’s now easier than ever for businesses to build transformational mobile apps that take advantage of the powerful iPhone 12 lineup and 5G.”

In addition, the company is highlighting the iPhone’s secure enclave as a major security benefit for enterprises. And while other handset manufacturers launch devices that are specifically meant to be rugged, Apple argues that its devices are already rugged enough by design and that there’s a big third-party ecosystem to ruggedize its devices.

Investors including Microsoft’s climate fund back hyperlocal environmental monitoring tech developer Aclima

By Jonathan Shieber

Mitigating the effects of climate change and pollution is a global problem, but it’s one that requires local solutions.

While that seems like common sense, most communities around the world don’t have tools that can monitor emissions and pollutants at the granular levels they need to develop plans that can address these pollutants.

Aclima, a decade-old startup founded by Davida Herzl, is looking to solve that problem and has raised $40 million in new funding from strategic and institutional venture capital investors to accelerate its growth.

“We’ve built a platform that enables hyperlocal measurement. We measure all the greenhouse gases as well as regulated air pollutants. We deploy sensor networks that combine mobile sensing where we use fleets of vehicles as a roving network. And we bring that all together and bring that into a back end,” Herzl said. 

The networks of air quality monitoring technology that exists — and is subsidized by the government — is costly and lacking in the kinds of minute details on a neighborhood by neighborhood basis that communities can use to effectively address pollution problems.

“A typical air quality monitoring station would cost somewhere between $1 million to $2 million. Here in the Bay Area, the regulator is paying less than $3 million for access to all of this for the entire Bay Area,” Herzl said. 

Aclima’s technologies are already being deployed across California, and some of the company’s largest customers are municipalities in the Bay Area and down south in San Diego. 

GettyImages 1155300963

Image Credits: Getty Images under a license.

The company has two main offerings: an enterprise professional software product that’s geared toward regulators, experts, and businesses that want to get a handle on their greenhouse gas emissions and environmentally polluting operations and a free tool that’s available to the public.

A third revenue stream is through partnerships with companies like Google, which have attached Aclima’s sensors to its roving mapping vehicles to capture climate and environmental quality data alongside geographic information.

“You’re seeing a lot of large companies in traditionally who are now investing significant amount into really trying to understand their emissions profile and prioritize emission reductions in a data driven way,” Herzl said.

The company’s data is also providing real world tools to communities that are looking to address systemic inequalities in locations that have been hardest hit by industrial pollution.

West Oakland, for instance, has used Aclima’s data to develop community intervention plans to reduce pollution in the communities that have been most impacted by the regions industrial economy.

“The interconnected crises of climate change, public health and environmental justice urgently require lasting solutions,” said Herzl, in a statement. “Measurement will play a key role in shaping solutions and tracking progress. With this coalition of investors, we’re expanding our capacity to support new and existing customers and partners taking bold climate action.”

As a result of the new round of funding, led by Clearvision Ventures, the fund’s founder and managing partner, Dan Ahn will take a seat on the board of directors.

Photo: Greg Epperson/Getty Images

“They are the clear category leader in an important and emerging field of data and standards at the intersection of climate, public health and the economy,” Ahn said in a statement. “Both governments and industry will need Aclima’s critical data and analytics to benchmark and accelerate progress to reduce emissions.”

Other investors in Aclima’s latest round include the corporate investment arm of the sensor manufacturer Robert Bosch, which views the company as a strategic component of its efforts to use sensor data to combat climate change. 

“Aclima has built an expansive mobile and stationary sensor network that generates billions of measurements about our most critical resources every week,” says Dr. Ingo Ramesohl, Managing Director of RBVC, in a statement. “Bosch invents and delivers connected solutions for a smarter future across transportation, home, industrial, and many other fields. What Aclima has achieved in connected environmental sensing is an impressive feat. Together, we can accelerate Aclima’s ability to support customers in taking decisive and data-driven climate action.”

Another key investor is Microsoft, which has backed the company through one of the first direct investments from the Microsoft Climate Innovation Fund. 

“We established our Climate Innovation Fund earlier this year to accelerate the development of environmental sustainability solutions based on the best available science,” said Brandon Middaugh, Director, Climate Innovation Fund, Microsoft, in a statement. “We’re encouraged by Aclima’s pioneering approach to mapping air pollution sources and exposures at a hyperlocal level and the implications this technology can have for making data-driven environmental decisions with consideration for climate equity.”

Other investors also adding Aclima to their portfolios in this round include Splunk Inc. GingerBread Capital, KTB Network, ACVC Partners, and the Womens VC Fund II. Existing shareholders participating in the round include Social Capital, Rethink Impact, Kapor Capital, and the Schmidt Family Foundation, the company said in a statement.

 

Greece’s Marathon Venture Capital completes first close for Fund II, reaching $47M

By Mike Butcher

Marathon Venture Capital in Athens, Greece has completed the first closing of its second fund, reaching the €40m / $47M mark. Backing the new fund is the European Investment Fund, HDBI, as well as corporates, family offices and HNWIs around the world (plus many Greek founders). It plans to invest in Seed-stage startups from €1m to 1.5m initial tickets for 15-20% of equity.

Team changes include Thaleia Misailidou being promoted to Principal, and Chris Gasteratos is promoted to Associate.

Marathon’s most prominent portfolio company is Netdata, which last year raised a $17 million Series A led by Bain Capital, and later raised another $14m from Bessemer. On the success side, Uber’s pending $1.4B+ acquisition of BMW/Daimler’s mobility group was in part driven by a Marathon-backed startup, Taxibeat, which was earlier acquired by Daimler.

Partners George Tziralis and Panos Papadopoulos tell me the fund is focused generally on enterprise/B2B, plus “Greek founders, anywhere”.

Highlights of Fund One’s investments include:

  • Netdata (leading infra monitoring OSS, backed by Bessemer & Bain)
  • Lenses (leader in DataOps, backed by 83North)
  • Hack The Box (cybersecurity adversarial training labs)
  • Learnworlds (business-in-a-box for course creators)
  • Causaly (cause-and-effect discovery in pharma)
  • Augmenta (autonomous precision agriculture)

Tziralis tells me the majority of its next ten companies have already raised a Series A round.

Tziralis and Papadopoulos have been key players in the Greek startups scene, backing many of the first startups to emerge from the country over 13 years ago. And they were enthusiastic backers of our TechCrunch Athens meetup many years ago.

Three years ago, they launched Marathon Venture Capital to take their efforts to the next level. Fund I invested in 10 companies with the first fund, and most have raised a Series A. The portfolio as a whole has raised 4x their total invested amount and maintains an estimated total enterprise value of $350 million.

They’ve also been running the “Greeks in Tech” meetups all over the world – Berlin to London to New York to San Francisco, and many more locations in between, connecting with Greek founders.

African fintech startup Chipper Cash raises $30M backed by Jeff Bezos

By Jake Bright

African cross-border fintech startup Chipper Cash has raised a $30 million Series B funding round led by Ribbit Capital with participation of Bezos Expeditions — the personal VC fund of Amazon CEO Jeff Bezos.

Chipper Cash was founded in San Francisco in 2018 by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled. The company offers mobile-based, no fee, P2P payment services in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.

Parallel to its P2P app, the startup also runs Chipper Checkout — a merchant-focused, fee-based payment product that generates the revenue to support Chipper Cash’s free mobile-money business. The company has scaled to 3 million users on its platform and processes an average of 80,000 transactions daily. In June 2020, Chipper Cash reached a monthly payments value of $100 million, according to CEO Ham Serunjogi .

As part of the Series B raise, the startup plans to expand its products and geographic scope. On the product side, that entails offering more business payment solutions, crypto-currency trading options, and investment services.

“We’ll always be a P2P financial transfer platform at our core. But we’ve had demand from our users to offer other value services…like purchasing cryptocurrency assets and making investments in stocks,” Serunjogi told TechCrunch on a call.

Image Credits: Chipper Cash

Chipper Cash has added beta dropdowns on its website and app to buy and sell Bitcoin and invest in U.S. stocks from Africa — the latter through a partnership with U.S. financial services company DriveWealth.

“We’ll launch [the stock product] in Nigeria first so Nigerians have the option to buy fractional stocks — Tesla shares, Apple shares or Amazon shares and others — through our app. We’ll expand into other countries thereafter,” said Serunjogi.

On the business financial services side, the startup plans to offer more API payments solutions. “We’ve been getting a lot of requests from people on our P2P platform, who also have business enterprises, to be able to collect payments for sale of goods,” explained Serunjogi.

Chipper Cash also plans to use its Series B financing for additional country expansion, which the company will announce by the end of 2021.

Jeff Bezos’s backing of Chipper Cash follows a recent string of events that has elevated the visibility of Africa’s startup scene. Over the past decade, the continent’s tech ecosystem has been one of the fastest growing in the world by year year-over-year expansion in venture capital and startup formation, concentrated in countries such as Nigeria, Kenya, and South Africa.

Africa Top VC Markets 2019

Image Credits: TechCrunch/Bryce Durbin

Bringing Africa’s large unbanked population and underbanked consumers and SMEs online has factored prominently. Roughly 66% of Sub-Saharan Africa’s 1 billion people don’t have a bank account, according to World Bank data.

As such, fintech has become Africa’s highest-funded tech sector, receiving the bulk of an estimated $2 billion in VC that went to startups in 2019. Even with the rapid venture funding growth over the last decade, Africa’s tech scene had been performance light, with only one known unicorn (e-commerce venture Jumia) a handful of exits, and no major public share offerings. That changed last year.

In April 2019, Jumia — backed by investors including Goldman Sachs and Mastercard — went public in an NYSE IPO. Later in the year, Nigerian fintech company Interswitch achieved unicorn status after a $200 million investment by Visa.

This year, Network International purchased East African payments startup DPO for $288 million and in August WorldRemit acquired Africa focused remittance company Sendwave for $500 million.

One of the more significant liquidity events in African tech occurred last month, when Stripe acquired Nigerian payment gateway startup Paystack for a reported $200 million.

In an email to TechCrunch, a spokesperson for Bezos Expeditions confirmed the fund’s investment in Chipper Cash, but declined to comment on further plans to back African startups. Per Crunchbase data, the investment would be the first in Africa for the fund. It’s worth noting Bezos Expeditions is not connected to Jeff Bezo’s hallmark business venture, Amazon.

For Chipper Cash, the $30 million Series B raise caps an event-filled two years for the San Francisco-based payments company and founders Ham Serunjogi and Maijid Moujaled. The two came to America for academics, met in Iowa while studying at Grinnell College and ventured out to Silicon Valley for stints in big tech: Facebook for Serunjogi and Flickr and Yahoo! for Moujaled.

Chipper Cash founders Ham Serunjogi (R) and Maijid Moujaled; Image Credits: Chipper Cash

The startup call beckoned and after launching Chipper Cash in 2018, the duo convinced 500 Startups and Liquid 2 Ventures — co-founded by American football legend Joe Montana — to back their company with seed funds. The startup expanded into Nigeria and Southern Africa in 2019, entered a payments partnership with Visa in April and raised a $13.8 million Series A in June.

Chipper Cash founder Ham Serunjogi believes the backing of his company by a notable tech figure, such as Jeff Bezos (the world’s richest person), has benefits beyond his venture.

“It’s a big deal when a world class investor like Bezos or Ribbit goes out of their sweet spot to a new area where they previously haven’t done investments,” he said. “Ultimately, the winner of those things happening is the African tech ecosystem overall, as it will bring more investment from firms of that caliber to African startups.”

LA-based A-Frame, a developer of celebrity-led personal care brands, raises cash for its brand incubator

By Jonathan Shieber

A-Frame, a Los Angeles-based developer of personal care brands supported by celebrities, has raised $2 million in a new round of funding led by Initialized Capital.

Joining Initialized in the round is the serial entrepreneur Moise Emquies, whose previous clothing lines, Ella Moss and Splendid, were acquired by the fashion holding company VFC in 2017.

A-Frame previously raised a seed round backed by cannabis dispensary Columbia Care. The company’s first product is a hand soap, Keeper. Other brands in suncare and skincare, children and babycare, and bath and body will follow, the company said.

“We partner with the investment groups at the agencies,” said company founder and chief executive, Ari Bloom. “We start interviewing different talent, speaking with their agents and their managers. We create an entity that we spin out. I wouldn’t say that we compete with the agencies.”

So far, the company has worked with CAA, UTA and WME on all of the brands in development, Bloom said. Two new brands should launch in the next couple of weeks.

As part of the round, actor, activist, and author Hill Harper has joined the company as a co-founder and as the company’s chief strategy officer. Emquies is also joining the company as its chief brand officer.

“Hill is my co-founder. He and I have worked together for a number of years. He’s with me at the holding company level. Identifying the opportunities,” said Bloom. “He’s bridging the gap between business and talent. He’s a part of the conversations when we talk to the agencies, managers and the talent. He’s a great guy that I think has a lot of respect in the agency and talent world.”

Initialized General Partner Alda Leu Dennis took point on the investment for Initialized and will take a seat on the company’s board of directors alongside Emquies. Other directors include Columbia Care chief executive, Nicholas Vita, and John D. Howard, the chief executive of Irving Place Capital.

“For us the calculus was to look at personal care and see what categories need to be reinvented because of sustainability,” said Bloom. “It was important to us once we get to a category what is the demographic opportunity. Even if categories were somewhat evolved they’re not all the way there… everything is in non-ingestible personal care. When you have a celebrity focused brand you want to focus on franchise items.”

The Keeper product is a subscription-based model for soap concentrates and cleansing hand sprays.

A serial entrepreneur, Bloom’s last business was the AR imaging company, Avametric, which was backed by Khosla Ventures and Y Combinator and wound up getting acquired by Gerber Technology in 2018. Bloom is also a founder of the Wise Sons Delicatessen in San Francisco.

“We first invested in Avametric at Initialized in 2013 and he had experience prior to that as well. From a venture perspective I think of these all around real defensibility of brand building,” said Dennis.

The investors believe that between Bloom’s software for determining market preferences, A-Frame’s roster of celebrities and the company’s structure as a brand incubator, all of the ingredients are in place for a successful direct to consumer business.

However, venture capitalists have been down this road before. The Honest Co. was an early attempt to build a sustainable brand around sustainable personal care products. Bloom said Honest provided several lessons for his young startup, one of them being a knowledge of when a company has reached the peak of its growth trajectory and created an opportunity for other, larger companies to take a business to the next level.

“Our goal is a three-to-seven year horizon that is big enough at a national scale that a global player can come in and internationally scale it,” said Bloom.

Deep Vision announces its low-latency AI processor for the edge

By Frederic Lardinois

Deep Vision, a new AI startup that is building an AI inferencing chip for edge computing solutions, is coming out of stealth today. The six-year-old company’s new ARA-1 processors promise to strike the right balance between low latency, energy efficiency and compute power for use in anything from sensors to cameras and full-fledged edge servers.

Because of its strength in real-time video analysis, the company is aiming its chip at solutions around smart retail, including cashier-less stores, smart cities and Industry 4.0/robotics. The company is also working with suppliers to the automotive industry, but less around autonomous driving than monitoring in-cabin activity to ensure that drivers are paying attention to the road and aren’t distracted or sleepy.

Image Credits: Deep Vision

The company was founded by its CTO Rehan Hameed and its Chief Architect Wajahat Qadeer​, who recruited Ravi Annavajjhala, who previously worked at Intel and SanDisk, as the company’s CEO. Hameed and Qadeer developed Deep Vision’s architecture as part of a Ph.D. thesis at Stanford.

“They came up with a very compelling architecture for AI that minimizes data movement within the chip,” Annavajjhala explained. “That gives you extraordinary efficiency — both in terms of performance per dollar and performance per watt — when looking at AI workloads.”

Long before the team had working hardware, though, the company focused on building its compiler to ensure that its solution could actually address its customers’ needs. Only then did they finalize the chip design.

Image Credits: Deep Vision

As Hameed told me, Deep Vision’s focus was always on reducing latency. While its competitors often emphasize throughput, the team believes that for edge solutions, latency is the more important metric. While architectures that focus on throughput make sense in the data center, Deep Vision CTO Hameed argues that this doesn’t necessarily make them a good fit at the edge.

“[Throughput architectures] require a large number of streams being processed by the accelerator at the same time to fully utilize the hardware, whether it’s through batching or pipeline execution,” he explained. “That’s the only way for them to get their big throughput. The result, of course, is high latency for individual tasks and that makes them a poor fit in our opinion for an edge use case where real-time performance is key.”

To enable this performance — and Deep Vision claims that its processor offers far lower latency than Google’s Edge TPUs and Movidius’ MyriadX, for example — the team is using an architecture that reduces data movement on the chip to a minimum. In addition, its software optimizes the overall data flow inside the architecture based on the specific workload.

Image Credits: Deep Vision

“In our design, instead of baking in a particular acceleration strategy into the hardware, we have instead built the right programmable primitives into our own processor, which allows the software to map any type of data flow or any execution flow that you might find in a neural network graph efficiently on top of the same set of basic primitives,” said Hameed.

With this, the compiler can then look at the model and figure out how to best map it on the hardware to optimize for data flow and minimize data movement. Thanks to this, the processor and compiler can also support virtually any neural network framework and optimize their models without the developers having to think about the specific hardware constraints that often make working with other chips hard.

“Every aspect of our hardware/software stack has been architected with the same two high-level goals in mind,” Hameed said. “One is to minimize the data movement to drive efficiency. And then also to keep every part of the design flexible in a way where the right execution plan can be used for every type of problem.”

Since its founding, the company raised about $19 million and has filed nine patents. The new chip has been sampling for a while and even though the company already has a couple of customers, it chose to remain under the radar until now. The company obviously hopes that its unique architecture can give it an edge in this market, which is getting increasingly competitive. Besides the likes of Intel’s Movidius chips (and custom chips from Google and AWS for their own clouds), there are also plenty of startups in this space, including the likes of Hailo, which raised a $60 million Series B round earlier this year and recently launched its new chips, too.

17 Practical Gift Ideas for New Parents

By Adrienne So
From a booger buster to a videophone, these gifts make this amazing job just a little easier.

London and SF have become Impact Tech hubs, with 280% increase in VC in 5 years

By Mike Butcher

New research has found that San Francisco and London have become two of the world’s leading hubs for VC investment into tech solutions that address one or more of the 17 UN’s Sustainable Development Goals (SDG), more commonly referred to as “Impact Tech”. They are followed by Paris, Berlin, Stockholm, Shanghai and Beijing.

Tech solutions for such pressing issues as the climate crisis and social inequality have seen a 280% increase in global VC investment from 2015 to 2020, while investment in this space more than doubled in both cities over the past five years. The report was put together by London & Partners and Dealroom as part of this week’s Silicon Valley Comes to the UK virtual event. More than 5,000 startups were surveyed to create the data.

According to the research, VC investment into London-based impact tech startups has grown by almost 800% (7.8 times) since 2015, compared to 3.1 times in Europe as a whole. 2020 is set to be a record year for London’s impact tech companies, which have received $1.2 billion in VC investment from January to October, already matching 2019 levels. London’s impact firms have also secured 429 deals between 2015 and 2020, more than any other city globally.

San Francisco’s impact-based tech companies have also shown strong growth over the past five years, with the data revealing that VC investment into its impact tech companies has almost tripled (2.8 times) from 2015 to 2020. So far this year, SF-based impact tech companies attracted $1.7 billion of VC investment in 2020 — more than any other city globally. At a national level, the United States received more VC funding for impact tech companies than any other country in the past five years, with investors pumping $35.8 billion into U.S. firms since 2015, double the amount invested into China ($16.8 billion) and the United Kingdom ($6.1 billion).

The research also found that the U.K. capital has produced 241 impact startups since 2006, with 95 companies founded in San Francisco. In London, “impact unicorns” include Octopus Energy (green energy), Arrival (zero-emission, public transportation vehicles), Gousto (food) and Babylon Health (AI health tech).

Climate change and clean energy solutions have attracted the most interest from investors in both cities, making up over 50% of overall VC investment over the last five years. Funding rounds including at least one North American investor made up $234 million of VC investment so far this year in London, up from $85 million in 2018, and equating to a fifth of all VC investment into London’s impact startups.

Funding rounds for London impact companies involving North American investors in 2020 include a $118 million growth equity round into Arrival by BlackRock, an $80 million Series B round for COMPASS Pathways and a $25 million Series C funding for Tractable.

Meanwhile, impact startups are crossing the pond in both directions. Arrival is now operating in Los Angeles, while Octopus Energy launched in the U.S. market in September after closing a $360 million funding round in April and acquiring Silicon Valley-based startup Evolve Energy. And San Francisco-based Allbirds, the sustainable shoe retailer, opened its first European flagship store in London in July 2018.

Commenting, Janet Coyle, managing director for business, London & Partners said: “San Francisco and London are two of the world’s top hubs for innovation and technology. But today’s figures also show that they are leading the way in creating purpose-driven companies striving to tackle some of the most pressing environmental and social challenges.”

 

Mine raises $9.5M to help people take control of their personal data

By Anthony Ha

TechCrunch readers probably know that privacy regulations like Europe’s GDPR and California’s CCPA give them additional rights around their personal data — like the ability to request that companies delete your data. But how many of you have actually exercised that right?

An Israeli startup called Mine is working to make that process much simpler, and it announced this morning that it has raised $9.5 million in Series A funding.

The startup was founded by CEO Gal Ringel, CTO Gal Golan and CPO Kobi Nissan . Ringel and Golan are both veterans of Unit 8200, the cybersecurity unit of the Israeli Defense Forces.

Ringel explained that Mine scans users’ inboxes to help them understand who has access to their personal data.

“Every time that you do an online interaction, such as you sign up for a service or purchase a flight ticket, those companies, those services leave some clues or traces within your inbox,” he said.

Mine

Image Credits: Mine

Mine then cross-references that information with the data collection and privacy policies of the relevant companies, determining what data they’re likely to possess. It calculates a risk score for each company — and if the user decides they want a company to delete their data, Mine can send an automated email request from the user’s own account.

Ringel argued that this is a very different approach to data privacy and data ownership. Instead of building “fences” around your data, Mine makes you more comfortable sharing that data, knowing that you can take control when necessary.

“The product gives [consumers] the freedom to use the internet feeling more secure, because they know they can exercise their right to be forgotten,” he said.

Ringel noted that the average Mine user has a personal data footprint across 350 companies — and the number is more like 550 in the United States. I ran a Mine audit for myself and, within a few minutes, found that I’m pretty close to the U.S. average. (Ringel said the number doesn’t include email newsletters.)

Mine launched in Europe earlier this year and says it has already been used by more than 100,000 people to send 1.3 million data deletion requests.

The legal force behind those requests will differ depending on where you live and which company you are emailing, but Ringel said that most companies will comply even when they’re not legally required to do so, because it’s part of creating a better privacy experience that helps them “earn trust and credibility from consumers.” Plus, “Most of them understand that if you want to go, they’ve already lost you.”

The startup’s core service is available for free. Ringel said the company will make money with premium consumer offerings, like the ability to offload the entire conversation with a company when you want your data deleted. It will also work with businesses to create a standard interface around privacy and data deletion.

As for whether giving Mine access to your inbox creates new privacy risks, Ringel said that the startup collects the “bare minimum” of data — usually just your email address and your full name. Otherwise, it knows “the type of data, but not the actual data” that other companies have obtained.

“We would never share or sell your data,” he added.

The Series A was led by Google’s AI-focused venture fund Gradient Ventures, with participation from e.ventures, MassMutual Ventures, as well as existing investors Battery Ventures and Saban Ventures. Among other things, Ringel said the money will fund Mine’s launch in the United States.

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