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Avatar startup Genies scores $65 million in funding round led by Mary Meeker’s Bond

By Lucas Matney

Over the past several years I’ve covered my fair share of upstart avatar companies that were all chasing the same dream — building out a customizable platform for a digital persona that gained wide adoption across games and digital spaces. Few of those startups I’ve covered in the past are still around. But by netting a string of successful partnerships with celebrity musicians, LA-based Genies has come closer than any startup before it to realizing the full vision of a wide-reaching avatar platform.

The company announced today that they’ve closed a $65 million Series B led by Mary Meeker’s firm Bond. NEA, Breyer Capital, Tull Investment Group, NetEase, Dapper Labs and Coinbase Ventures also participated in the deal. Mary Meeker will be joining the Genies board. The company didn’t disclose the Genies’ most recent valuation.

This funding comes at an inflection point for the eight-year-old company, evidenced by the investments from NBA Top Shot-maker Dapper Labs and crypto giant Coinbase. As announced last week, the company is rolling out an NFT platform on Dapper Labs’ Flow blockchain, partnering closely with the startup, which will be building out the backend for a Genies avatar accessories storefront. Like Dapper Labs has leveraged its exclusive deals with sports leagues to ship NFTs with official backing, Genies is planning to capitalize on its partnerships with celebrities in its roster, including Justin Bieber, Shawn Mendes, Cardi B and others to create a platform for buying and trading avatar accessories en masse.

In October, the company announced a brand partnership with Gucci, opening the startup to another big market opportunity.

Genies’ business has largely focused on leveraging high-profile partnerships to give its entertainer clients a digital presence that can spice up what they’re sharing on social media and beyond. As they’ve rolled out avatar creation to all users through beta mobile apps, Genies has been focusing on one of the more explicit dreams of the avatar companies before it; building out a broad network of avatar users and a broad network of compatible platforms through its SDK.

“An avatar is a vehicle to be able to showcase more of your authentic self,” Genies CEO Akash Nigam tells TechCrunch. “It’s not limited by real-world constraints, it’s an alter-ego personality.”

Trends in the NFT world have provided new realms of exploration for Genies, but so have broader pandemic-era trends that have pushed more users to wholly digital spaces where they socialize and connect. “The pandemic accelerated everything,” Nigam says.

Nigam emphasizes that despite the major opportunity its upcoming NFT platform will present, Genies is still an avatar company first-and-foremost, not an NFT startup, though he does say he is believes crypto-backed digital goods are going to be around for a long time. He has few doubts that the current environment around digital goods helped juice Genies’ funding round, which he says was “6-8X oversubscribed” and was an opportunistic play for the startup, which “could have gone years without having to raise.”

The company says their crypto marketplace will launch in the coming months, as early as this summer.

Epic Games buys artist community ArtStation, drops commissions to 12%

By Sarah Perez

One the same day as Fortnite maker Epic Games goes to trial with one of the biggest legal challenges to the App Store’s business model to date, it has simultaneously announced the acquisition of the artist portfolio community ArtStation — and immediately lowered the commissions on sales. Now standard creators on ArtStation will see the same 12% commission rate found in Epic’s own Games Store for PCs, instead of the 30% it was before. This reduced rate is meant to serve as an example the wider community as to what a “reasonable” commission should look like. This could become a point of comparison with the Apple App Store’s 30% commission for larger developers like Epic as the court case proceeds.

ArtStation today offers a place for creators across gaming, media, and entertainment to showcase their work and find new jobs. The company has had a long relationship with Epic Games, as many ArtStation creators work with Epic’s Unreal Engine. However, ArtStation has also been a home to 2D and 3D creators across verticals, including those who don’t work with Unreal Engine.

The acquisition won’t change that, the team says in its announcement. Instead, the deal will expand the opportunities for creators to monetize their work. Most notably, that involves the commission drop. For standard creators, the fees will drop from 30% to 12%. For Pro members (who pay $9.95/mo for a subscription), the commission goes even lower — from 20% to 8%. And for self-promoted sales, the fees will be just 5%. ArtEngine’s streaming video service, ArtStation Learning, will also be free for the rest of 2021, the company notes.

The slashed commission, however, is perhaps the most important change Epic is making to ArtStation because it gives Epic a specific example as to how it treats its own creator communities. It will likely reference the acquisition and the commission changes during its trial with Apple, along with its own Epic Games Store and its similarly low rate. Already, Epic’s move had prompted Microsoft to lower its cut on game sales, too, having recently announced a similar 30% to 12% drop.

In the trial, Epic Games will try to argue that Apple has a monopoly on the iOS app ecosystem and it abuses its market power to force developers to use Apple’s payment systems and pay it commissions on the sales and in-app purchases that flow through those systems. Epic Games, like several other larger app makers, would rather use its own payment systems to avoid the commission — or at the very least, be able to point users to a website where they can pay directly. But Apple doesn’t allow this, per its App Store guidelines.

Last year, Epic Games triggered Fortnite’s App Store expulsion by introducing a new direct way to pay on mobile devices which offered a steep discount. It was a calculated move. Both Apple and Google immediately banned the game for violating their respective app store policies, as a result. And then Epic sued.

While Epic’s fight is technically with both Apple and Google, it has focused more of its energy on the former because Android devices allow sideloading of apps (a means of installing apps directly), and Apple does not.

Meanwhile, Apple’s argument is that Epic Games agreed to Apple’s terms and guidelines and then purposefully violated them in an effort to get a special deal. But Apple says the guidelines apply to all developers equally, and Epic doesn’t get an exception here.

However, throughout the course of the U.S. antitrust investigations into big tech, it was discovered that Apple did, in fact, make special deals in the past. Emails shared by the House Judiciary Committee as a part of an investigation revealed that Apple had agreed to a 15% commission for Amazon’s Prime Video app at the start, when typically subscription video apps are 30% in year one, then 15% in year two and beyond. (Apple says Amazon simply qualified for a new program.) Plus, other older emails revealed Apple had several discussions about raising commissions even higher than 30%, indicating that Apple believed its commission rate had some flex.

Ahead of today’s acquisition by Epic Games, ArtStation received a “Megagrant” from Epic during the height of the pandemic to help it through an uncertain period. This could may have pushed the two companies to further discuss deeper ties going forward.

“Over the last seven years, we’ve worked hard to enable creators to showcase their work, connect with opportunities and make a living doing what they love,” said Leonard Teo, CEO and co-founder of ArtStation, in a statement. “As part of Epic, we will be able to advance this mission and give back to the community in ways that we weren’t able to on our own, while retaining the ArtStation name and spirit.”

What3Words sends legal threat to a security researcher for sharing an open-source alternative

By Zack Whittaker

A U.K. company behind digital addressing system What3Words has sent a legal threat to a security researcher for offering to share an open-source software project with other researchers, which What3Words claims violate its copyright.

Aaron Toponce, a systems administrator at XMission, received a letter on Thursday from a law firm representing What3Words, requesting that he delete tweets related to the open source alternative, WhatFreeWords. The letter also demands that he disclose to the law firm the identity of the person or people with whom he had shared a copy of the software, agree that he would not make any further copies of the software, and to delete any copies of the software he had in his possession.

The letter gave him until May 7 to agree, after which What3Words would “waive any entitlement it may have to pursue related claims against you,” a thinly-veiled threat of legal action.

“This is not a battle worth fighting,” he said in a tweet. Toponce told TechCrunch that he has complied with the demands, fearing legal repercussions if he didn’t. He has also asked the law firm twice for links to the tweets they want deleting but has not heard back. “Depending on the tweet, I may or may not comply. Depends on its content,” he said.

The legal threat sent to Aaron Toponce. (Image: supplied)

U.K.-based What3Words divides the entire world into three-meter squares and labels each with a unique three-word phrase. The idea is that sharing three words is easier to share on the phone in an emergency than having to find and read out their precise geographic coordinates.

But security researcher Andrew Tierney recently discovered that What3Words would sometimes have two similarly-named squares less than a mile apart, potentially causing confusion about a person’s true whereabouts. In a later write-up, Tierney said What3Words was not adequate for use in safety-critical cases.

It’s not the only downside. Critics have long argued that What3Words’ proprietary geocoding technology, which it bills as “life-saving,” makes it harder to examine it for problems or security vulnerabilities.

Concerns about its lack of openness in part led to the creation of the WhatFreeWords. A copy of the project’s website, which does not contain the code itself, said the open-source alternative was developed by reverse-engineering What3Words. “Once we found out how it worked, we coded implementations for it for JavaScript and Go,” the website said. “To ensure that we did not violate the What3Words company’s copyright, we did not include any of their code, and we only included the bare minimum data required for interoperability.”

But the project’s website was nevertheless subjected to a copyright takedown request filed by What3Words’ counsel. Even tweets that pointed to cached or backup copies of the code were removed by Twitter at the lawyers’ requests.

Toponce — a security researcher on the side — contributed to Tierney’s research, who was tweeting out his findings as he went. Toponce said that he offered to share a copy of the WhatFreeWord code with other researchers to help Tierney with his ongoing research into What3Words. Toponce told TechCrunch that receiving the legal threat may have been a combination of offering to share the code and also finding problems with What3Words.

In its letter to Toponce, What3Words argues that WhatFreeWords contains its intellectual property and that the company “cannot permit the dissemination” of the software.

Regardless, several websites still retain copies of the code and are easily searchable through Google, and TechCrunch has seen several tweets linking to the WhatFreeWords code since Toponce went public with the legal threat. Tierney, who did not use WhatFreeWords as part of his research, said in a tweet that What3Words’ reaction was “totally unreasonable given the ease with which you can find versions online.”

We asked What3Words if the company could point to a case where a judicial court has asserted that WhatFreeWords has violated its copyright. What3Words spokesperson Miriam Frank did not respond to multiple requests for comment.

Amid the IPO gold rush, how should we value fintech startups?

By Ram Iyer
Allen Miller Contributor
Allen Miller is a principal at Oak HC/FT based in San Francisco. He invests in early- and growth-stage companies, with a particular focus on fintech.
Tess Munsie Contributor
Tess Munsie is a senior associate at Oak HC/FT based in New York City. She focuses on early- and growth-stage investments in fintech.

If there has ever been a golden age for fintech, it surely must be now. As of Q1 2021, the number of fintech startups in the U.S. crossed 10,000 for the first time ever — well more than double that if you include EMEA and APAC. There are now three fintech companies worth more than $100 billion (Paypal, Square and Shopify) with another three in the $50 billion-$100 billion club (Stripe, Adyen and Coinbase).

Yet, as fintech companies have begun to go public, there has been a fair amount of uncertainty as to how these companies will be valued on the public markets. This is a result of fintechs being relatively new to the IPO scene compared to their consumer internet or enterprise software counterparts. In addition, fintechs employ a wide variety of business models: Some are transactional, others are recurring or have hybrid business models.

In addition, fintechs now have a multitude of options in terms of how they choose to go public. They can take the traditional IPO route, pursue a direct listing or merge with a SPAC. Given the multitude of variables at play, valuing these companies and then predicting public market performance is anything but straightforward.

It is important to note that fintech is a complex category with many different types of players, and not all fintech is created equal.

The fintech gold rush has arrived

For much of the past two decades, fintech as a category has been very quiet on the public markets. But that began to change considerably by the mid-2010s. Fintech had clearly arrived by 2015, with both Square and Shopify going public that year. Last year was a record one with eight fintech IPOs, and there has been no slowdown in 2021 — the first four months have already produced seven IPOs. By our estimates, there are more than 15 additional fintech companies that could IPO this year. The current record will almost certainly be shattered well before the end of the year.

Fintech IPOs from 2000 to 2021

Image Credits: Oak HC/FT

Boasting a pedigree in business intelligence, Sweep launches a new carbon accounting and offset tool

By Jonathan Shieber

If businesses are going to meet their increasingly aggressive targets for reducing the greenhouse gas emissions associated with their operations, they’re going to have to have an accurate picture of just what those emissions look like. To get that picture, companies are increasingly turning to businesses like Sweep, which announced its commercial launch today.

The Parisian company boasts a founding team with an impeccable pedigree in enterprise software. Co-founders Rachel Delacour and Nicolas Raspal were the co-founders of BIME Analytics, which was acquired by Zendesk. And together with Zendesk colleagues Raphael Güller and Yannick Chaze, and the founder of the Net Zero Initiative, Renaud Bettin, they’ve created a software toolkit that gives companies a visually elegant view into not just a company’s own carbon emissions, but those of their suppliers as well.

It’s the background of the team that first attracted investors like Pia d’Iribarne, co-founder and managing partner, New Wave, which made their first climate-focused investment into the software developer. 

We decided to invest before we even closed the fund,” d’Iribarne said of the investment in Sweep. “We officially invested in December or January.”

New Wave wasn’t the only investor wowed by the company’s prospects. The new European climate-focused investment firm 2050, and La Famiglia, a fund with strong ties to big European industrial companies, also participated alongside several undisclosed angel investors from the Bay Area. In all Sweep raked in $5 million for its product before it had even launched a beta.

Sweep offers users the ability to visualize each location of a company’s business by brand, location, product or division and see how those different granular operations contribute to a company’s overall carbon footprint. Users can also link those nodes to external suppliers and distributors to share carbon data. 

The effects of climate change are increasing, and companies across industries are motivated to do their part. But today’s carbon reduction efforts are being stalled by complex tools and resources that can’t match the urgency of the threat. By putting automation, connectivity and collaboration at the heart of the platform, Sweep is the first to offer companies an efficient mechanism to tackle their indirect Scope 3 emissions, and turn net zero from a buzzword into a reality. 

Like the other companies that have come on the market with carbon monitoring and management solutions, Sweep also offers the ability to finance offset projects directly from its platform. And, like those other companies, Sweep’s offsets are primarily in the forestry space.   

“Around the world, companies are under pressure from customers, investors and regulators to take action to reduce their emissions,” said Pia d’Iribarne in a statement. “As a result, we’re seeing unprecedented growth in the climate technology market and we expect it to continue to explode. What used to be an issue confined to a company’s sustainability team is now a front-and-center business objective that has the commitment of the CEO. We invested in Sweep because of their world-class expertise in sustainability and their success in developing state-of-the-art, end-to-end SaaS platforms. It’s the right team and the right product at the right time.”

Lobus raises $6 million for an art management platform on the blockchain

By Lucas Matney

Reshaping ownership proofs in the fine art markets has been one of the blockchain’s clearest real-world use cases. But in recent months as top auction houses have embraced NFTs and popular artists experiment with the crypto medium, that future has seemed more tangible than ever before.

The ex-Christie’s and Sotheby’s team at Lobus is aiming to commoditize blockchain tech with an asset management platform that they hope can bring creator-friendly mechanisms from NFT marketplaces like SuperRare to the physical art world as well, allowing art owners to maintain partial ownership of the works they sell so that they can benefit from secondary transactions down the line. While physical art sellers have grown accustomed to selling 100% of their work while seeing that value accrue over time as it trades hands, Lobus’s goal is for artist’s to maintain fractional ownership throughout those sales, ensuring that they earn a commission on sales down the road. It’s a radical idea and a logistical nightmare made feasible by the blockchain’s approach to ownership.

“We’re really on a mission of making artists into owners,” Lobus co-CEO Sarah Wendell Sherrill tells TechCrunch. “We are really leveraging the best of what NFTs are putting out there about ownership and asking the questions of how to help create different ownership structures and interrupt this asset class.”

The startup is encapsulating these new mechanics in a wide-reaching art asset management platform that they hope can entice users of the aging legacy software suites being used today. Teaming robust ownership proofs with a CRM, analytics platform and tools like dynamic pricing, Lobus wants to give the art market its own Carta-like software platform that is approachable to the wider market.

Lobus tells TechCrunch they have raised $6 million from Upside Capital, 8VC, Franklin Templeton, Dream Machine, Weekend Fund and BoostVC, among others. Angels participating in the round include Rob Hayes, Troy Carter, Suzy Ryoo, Rebecca and Cal Henderson, Henry Ward and Lex Sokolin.

A big goal for the team has been removing the complexities of understanding what the blockchain is and instead focusing on what their tech can deliver to their network of art owners. While the NFT boom of the past few months has already produced billions in sales, efforts like Lobus are attempting to cross-pollinate the mechanics of crypto art with the global art market in an effort to put stakeholders across the board on the same footing. In addition to having partnerships with around 300 active artists, Lobus has also sold their platform to collectors, artist estates and asset managers.

At the moment, Lobus has around 45,000 art objects in its database, encompassing about $5.4 billion in asset value across physical and digital objects.

A software bug let malware bypass macOS’ security defenses

By Zack Whittaker

Apple has spent years reinforcing macOS with new security features to make it tougher for malware to break in. But a newly discovered vulnerability broke through most of macOS’ newer security protections with a double-click of a malicious app, a feat not meant to be allowed under Apple’s watch.

Worse, evidence shows a notorious family of Mac malware has already been exploiting this vulnerability for months before it was subsequently patched by Apple this week.

Over the years, Macs have adapted to catch the most common types of malware by putting technical obstacles in their way. macOS flags potentially malicious apps masquerading as documents that have been downloaded from the internet. And if macOS hasn’t reviewed the app — a process Apple calls notarization — or if it doesn’t recognize its developer, the app won’t be allowed to run without user intervention.

But security researcher Cedric Owens said the bug he found in mid-March bypasses those checks and allows a malicious app to run.

Owens told TechCrunch that the bug allowed him to build a potentially malicious app to look like a harmless document, which when opened bypasses macOS’ built-in defenses when opened.

“All the user would need to do is double click — and no macOS prompts or warnings are generated,” he told TechCrunch. Owens built a proof-of-concept app disguised as a harmless document that exploits the bug to launch the Calculator app, a way of demonstrating that the bug works without dropping malware. But a malicious attacker could exploit this vulnerability to remotely access a user’s sensitive data simply by tricking a victim into opening a spoofed document, he explained.

GIF showing a proof of concept app opening uninhibited on an unpatched macOS computer.

The proof-of-concept app disguised as a harmless document running on an unpatched macOS machine. (Image: supplied)

Fearing the potential for attackers to abuse this vulnerability, Owens reported the bug to Apple.

Apple told TechCrunch it fixed the bug in macOS 11.3. Apple also patched earlier macOS versions to prevent abuse, and pushed out updated rules to XProtect, macOS’ in-built anti-malware engine, to block malware from exploiting the vulnerability.

Owens asked Mac security researcher Patrick Wardle to investigate how — and why — the bug works. In a technical blog post today, Wardle explained that the vulnerability triggers due to a logic bug in macOS’ underlying code. The bug meant that macOS was misclassifying certain app bundles and skipping security checks, allowing Owens’ proof-of-concept app to run unimpeded.

In simple terms, macOS apps aren’t a single file but a bundle of different files that the app needs to work, including a property list file that tells the application where the files it depends on are located. But Owens found that taking out this property file and building the bundle with a particular structure could trick macOS into opening the bundle — and running the code inside — without triggering any warnings.

Wardle described the bug as rendering macOS’ security features as “wholly moot.” He confirmed that Apple’s security updates have fixed the bug. “The update will now result in the correct classification of applications as bundles and ensure that untrusted, unnotarized applications will (yet again) be blocked, and thus the user protected,” he told TechCrunch.

With knowledge of how the bug works, Wardle asked Mac security company Jamf to see if there was any evidence that the bug had been exploited prior to Owens’ discovery. Jamf detections lead Jaron Bradley confirmed that a sample of the Shlayer malware family exploiting the bug was captured in early January, several months prior to Owens’ discovery. Jamf also published a technical blog post about the malware.

“The malware we uncovered using this technique is an updated version of Shlayer, a family of malware that was first discovered in 2018. Shlayer is known to be one of the most abundant pieces of malware on macOS so we’ve developed a variety of detections for its many variants, and we closely track its evolution,” Bradley told TechCrunch. “One of our detections alerted us to this new variant, and upon closer inspection we discovered its use of this bypass to allow it to be installed without an end user prompt. Further analysis leads us to believe that the developers of the malware discovered the zero-day and adjusted their malware to use it, in early 2021.”

Shlayer is an adware that intercepts encrypted web traffic — including HTTPS-enabled sites — and injects its own ads, making fraudulent ad money for the operators.

“It’s often installed by tricking users into downloading fake application installers or updaters,” said Bradley. “The version of Shlayer that uses this technique does so to evade built-in malware scanning, and to launch without additional ‘Are you sure’ prompts to the user,” he said.

“The most interesting thing about this variant is that the author has taken an old version of it and modified it slightly in order to bypass security features on macOS,” said Bradley.

Wardle has also published a Python script that will help users detect any past exploitation.

It’s not the first time Shlayer has evaded macOS’ defenses. Last year, Wardle working with security researcher Peter Dantini found a sample of Shlayer that had been accidentally notarized by Apple, a process where developers submit their apps to Apple for security checks so the apps can run on millions of Macs unhindered.

Mighty Networks raises $50M to build a creator economy for the masses

By Mary Ann Azevedo

Mighty Networks, a platform designed to give creators and brands a dedicated place to start and grow communities, has closed on $50 million in a Series B funding round led by Owl Ventures.

Ziff Capital Partners and LionTree Partners also participated in the financing, along with existing backers Intel Capital, Marie Forleo, Gretchen Rubin, Dan Rosensweig, Reid Hoffman, BBG Ventures and Lucas Venture Group. The investment brings Palo Alto-based Mighty Networks’ total raised since its 2017 inception to $67 million. 

Mighty Networks founder and CEO Gina Bianchini — who started the company with Tim Herby and Thomas Aaron — is no stranger to building nurturing environments for community building. Previously, she was the CEO and co-founder of Ning, where she led the company’s rapid growth to three million Ning Networks created and about 100 million users around the world in three years. 

With Mighty Networks, Bianchini’s goal is to build “a creator middle class” founded on community memberships, events and live online courses.  

“Basically we have a platform for people to create communities the way that they would create e-commerce stores,” she told TechCrunch. “So what Shopify has done for e-commerce, we’re doing for digital subscriptions and digital payments where the value is around a community that is mastering something interesting or important together, and not just content alone.”

The company’s flagship Business Plan product is aimed at new creators with the goal of giving them an easy way to get started with digital subscriptions, Bianchini said. Established brands, organizations and successful creators use the company’s Mighty Pro plan to get everything Mighty Networks offers on their own branded iOS, iPad and Android apps. 

Mighty Networks — which operates as a SaaS business — has seen impressive growth. In 2020, ARR climbed by “2.5x” while annual customer growth climbed by 200%. Customers are defined as paying creators who host their community, courses and events on their own Mighty Network. The company also saw a 400% annual growth in payments, or rather in subscriptions and payments where a creator or brand will sell a membership or an online course.

The pandemic was actually a boon to the business, as well as the fact that it launched live events last year.

“We were able to help many businesses quickly move online — from yoga studios to leadership speakers and consultants — and now that the world is coming back, they’ll be able to use the features that we’ve built into the platform from day one around finding members, events and groups near them, as well as making everything via not just the web but mobile apps,” Bianchini said.

One of the startup’s goals is to help people understand that they don’t need massive amounts of followers (such as 1 million followers on TikTok) to be successful creators. For example, a creator charging 30 people for a subscription that amounts to around $1,000 a year can still pull in $30,000 a year. So while it’s not huge, it’s certainly still substantial — hence the company’s intent to build a “creator middle class.”

Mighty Networks has more than 10,000 paying creators, brands and coaches today. Users include established creators and brands such as YouTube star Adriene Mishler, Xprize and Singularity University founder Peter Diamandis, author Luvvie Ajayi Jones, comedian Amanda Seales, Girlboss founder Sophia Amoruso and brands such as the TED conference and wellness scheduling platform MINDBODY.

“Content alone will kill the creator economy,” Bianchini said. “We can’t build a thriving creator movement on an exhausting, unfair dynamic where content creators rent audiences from big tech platforms, are required to produce a never-ending stream of content and get paid pennies for it, if they get paid at all. Creators need to own their own community on the internet, where members meet each other and get results and transformation.” 

Owl Ventures Managing Director Amit Patel said his firm was impressed by Mighty Networks before it even met the company.

“No company in this space has more loyal, passionate believers, and when we saw firsthand that creators could successfully build paid communities and online courses on a Mighty Network with as few as 30 members, we wanted to be a part of unlocking this creator middle class for a million more creators,” Patel said in a written statement.

The company plans to use its new capital on product development across media types, payment options and expansion into new markets. 

Earlier this month, Pico, a New York startup that helps online creators and media companies make money and manage their customer data, announced that it had launched an upgraded platform and raised $6.5 million in new funding. Essentially, the company is building what it considers to be an operating system for the creator market.

Facebook launches a series tests to inform future changes to its News Feed algorithms

By Sarah Perez

Facebook may be reconfiguring its News Feed algorithms. After being grilled by lawmakers about the role that Facebook played in the attack on the U.S. Capitol, the company announced this morning it will be rolling out a series of News Feed ranking tests that will ask users to provide feedback about the posts they’re seeing, which will later be incorporated into Facebook’s News Feed ranking process. Specifically, Facebook will be looking to learn which content people find inspirational, what content they want to see less of (like politics), and what other topics they’re generally interested in, among other things.

This will be done through a series of global tests, one of which will involve a survey directly beneath the post itself which asks, “how much were you inspired by this post?,” with the goal of helping to show more people posts of an inspirational nature closer at the top of the News Feed.

Image Credits: Facebook

Another test will work to the Facebook News Feed experience to reflect what people want to see. Today, Facebook prioritizes showing you content from friends, Groups and Pages you’ve chosen to follow, but it has algorithmically crafted an experience of whose posts to show you and when based on a variety of signals. This includes both implicit and explicit signals — like how much you engage with that person’s content (or Page or Group) on a regular basis, as well as whether you’ve added them as a “Close Friend” or “Favorite” indicating you want to see more of their content than others, for example.

However, just because you’re close to someone in real life, that doesn’t mean that you like what they post to Facebook. This has driven families and friends apart in recent years, as people discovered by way of social media how people they thought they knew really viewed the world. It’s been a painful reckoning for some. Facebook hasn’t managed to fix the problem, either. Today, users still scroll News Feeds that reinforce their views, no matter how problematic. And with the growing tide of misinformation, the News Feed has gone from just placing users into a filter bubble to presenting a full alternate reality for some, often populated by conspiracies theories.

Facebook’s third test doesn’t necessarily tackle this problem head-on, but instead looks to gain feedback about what users want to see, as a whole. Facebook says that it will begin asking people whether they want to see more or fewer posts on certain topics, like Cooking, Sports, or Politics, and more. Based on users’ collective feedback, Facebook will adjust its algorithms to show more content people say they’re interested in, and fewer posts about topics they don’t want to see.

The area of politics, specifically, has been an issue for Facebook. The social network for years has been charged with helping to fan the flames of political discourse, polarizing and radicalizing users through its algorithms, distributing misinformation at scale, and encouraging an ecosystem of divisive clickbait, as publishers sought engagement instead of fairness and balance when reporting the news. There are now entirely biased and subjective outlets posing as news sources who benefit from algorithms like Facebook’s, in fact.

Shortly after the Capitol attack, Facebook announced it would try clamping down on political content in the News Feed for a small percentage of people in the U.S., Canada, Brazil and Indonesia, for period of time during tests.

Now, the company says it will work to better understand what content is being linked negative News Feed experiences, including political content. In this case, Facebook may ask users on posts with a lot of negative reactions what sort of content they want to see less of. This will be done through surveys on certain posts as well as through ongoing research sessions where people are invited to talk about their News Feed experience, Facebook told TechCrunch.

It will also more prominently feature the option to hide posts you find “irrelevant, problematic or irritating.” Although this feature existed before, you’ll now be able to tap an X in the upper-right corner of a post to hide it from the News Feed, if in the test group, and see fewer like in the future, for a more personalized experience.

It’s not clear that allowing users to pick and choose their topics is the best way to solve the larger problems with negative posts, divisive content or misinformation, though this test is less about the latter and more about making the News Feed “feel” more positive.

As the data is collected from the tests, Facebook will incorporate the learnings into its News Feed ranking algorithms. But it’s not clear to what extent it will be adjusting the algorithm on a global basis versus simply customizing the experience for end users on a more individual basis over time. The company tells TechCrunch the survey data will be collected from a small percentage of users who are placed into the test groups, which will then be used to train a machine learning model.

It will also be exploring ways to give people more direct controls over what sort of content they see on the News Feed in the future.

The company says the tests will run over the next few months.

Micromobility’s next big business is software, not vehicles

By Rebecca Bellan

The days of the shared, dockless micromobility model are numbered. That’s essentially the conclusion reached by Puneeth Meruva, an associate at Trucks Venture Capital who recently authored a detailed research brief on micromobility. Meruva is of the opinion that the standard for permit-capped, dockless scooter-sharing is not sustainable — the overhead is too costly, the returns too low — and that the industry could splinter.

Most companies playing to win have begun to vertically integrate their tech stacks by developing or acquiring new technology.

“Because shared services have started a cultural transition, people are more open to buying their own e-bike or e-scooter,” Meruva told TechCrunch. “Fundamentally because of how much city regulation is involved in each of these trips, it could reasonably become a transportation utility that is very useful for the end consumer, but it just hasn’t proven itself to be a profitable line of business.”

As dockless e-scooters, e-bikes and e-mopeds expand their footprint while consolidating under a few umbrella corporations, companies might develop or acquire the technology to streamline and reduce operational costs enough to achieve unit economics. One overlooked but massive factor in the micromobility space is the software that powers the vehicles — who owns it, if it’s made in-house and how well it integrates with the rest of the tech stack.

It’s the software that can determine if a company breaks out of the rideshare model into the sales or subscription model, or becomes subsidized by or absorbed into public transit, Meruva predicts.

Vehicle operating systems haven’t been top of mind for most companies in the short history of micromobility. The initial goal was making sure the hardware didn’t break down or burst into flames. When e-scooters came on the scene, they caused a ruckus. Riders without helmets zipped through city streets and many vehicles ended up in ditches or blocking sidewalk accessibility.

City officials were angry, to say the least, and branded dockless modes of transport a public nuisance. However, micromobility companies had to answer to their overeager investors — the ones who missed out on the Uber and Lyft craze and threw millions at electric mobility, hoping for swift returns. What was a Bird or a Lime to do? The only thing to do: Get back on that electric two-wheeler and start schmoozing cities.

How the fight for cities indirectly improved vehicle software

Shared, dockless operators are currently in a war of attrition, fighting to get the last remaining city permits. But as the industry seeks a business to government (B2G) model that morphs into what companies think cities want, some are inadvertently producing vehicles that will evolve beyond functional toys and into more viable transportation alternatives.

The second wave of micromobility was marked by newer companies like Superpedestrian and Voi Technology. They learned from past industry mistakes and developed business strategies that include building onboard operating systems in-house. The goal? More control over rider behavior and better compliance with city regulations.

Most companies playing to win have begun to vertically integrate their tech stacks by developing or acquiring new technology. Lime, Bird, Superpedestrian, Spin and Voi all design their own vehicles and write their own fleet management software or other operational tools. Lime writes its own firmware, which sits directly on top of the vehicle hardware primitives and helps control things like motor controllers, batteries and connected lights and locks.

Billion-dollar B2B: cloud-first enterprise tech behemoths have massive potential

By Annie Siebert
Dharmesh Thakker Contributor
Dharmesh Thakker is a general partner at Battery Ventures and a former managing director at Intel Capital.

More than half a decade ago, my Battery Ventures partner Neeraj Agrawal penned a widely read post offering advice for enterprise-software companies hoping to reach $100 million in annual recurring revenue.

His playbook, dubbed “T2D3” — for “triple, triple, double, double, double,” referring to the stages at which a software company’s revenue should multiply — helped many high-growth startups index their growth. It also highlighted the broader explosion in industry value creation stemming from the transition of on-premise software to the cloud.

Fast forward to today, and many of T2D3’s insights are still relevant. But now it’s time to update T2D3 to account for some of the tectonic changes shaping a broader universe of B2B tech — and pushing companies to grow at rates we’ve never seen before.

One of the biggest factors driving billion-dollar B2Bs is a simple but important shift in how organizations buy enterprise technology today.

I call this new paradigm “billion-dollar B2B.” It refers to the forces shaping a new class of cloud-first, enterprise-tech behemoths with the potential to reach $1 billion in ARR — and achieve market capitalizations in excess of $50 billion or even $100 billion.

In the past several years, we’ve seen a pioneering group of B2B standouts — Twilio, Shopify, Atlassian, Okta, Coupa*, MongoDB and Zscaler, for example — approach or exceed the $1 billion revenue mark and see their market capitalizations surge 10 times or more from their IPOs to the present day (as of March 31), according to CapIQ data.

More recently, iconic companies like data giant Snowflake and video-conferencing mainstay Zoom came out of the IPO gate at even higher valuations. Zoom, with 2020 revenue of just under $883 million, is now worth close to $100 billion, per CapIQ data.

Graphic showing market cap at IPO and market cap today of various companies.

Image Credits: Battery Ventures via FactSet. Note that market data is current as of April 3, 2021.

In the wings are other B2B super-unicorns like Databricks* and UiPath, which have each raised private financing rounds at valuations of more than $20 billion, per public reports, which is unprecedented in the software industry.

Hadrian is building the factories of the future for rocket ships and advanced manufacturing

By Jonathan Shieber

If the eight person team behind the new startup Hadrian has their way, they’ll have transformed the manufacturing industry within the next decade.

At least, that’s the goal for the new San Francisco-based startup, founded only last year, which has set its sights on building out a new model for advanced manufacturing to enable the satellite, space ship, and advanced energy technology companies to build the future they envision better and faster.

We view our job as to provide the world’s most efficient space and defense component factory,” said Hadrian founder, Chris Power.

Initially, the company is building factories to make the parts that go on rocket ships, according to Power, but the business has implications for any company that needs bespoke components to make their equipment.

“Let me tell you how bad it is at the moment and what’s going to happen over the next 20 years. Right now everyone in space and defense, [including] SpaceX and Lockheed Martin, outsources their parts and manufacturing to small factories across the country. They’re super expensive, they’re unreliable and they’re completely invisible to the customers,” said Power. “This causes big problems with space and defense manufacturers in the design phase, because the lead time is so long and the iteration time is super long. Imagine running software and being able to iterate on your product once every 20 days? If you can imagine a Gantt chart of how to build a rocket, about 60% of that is buffer time… A lot of the delays in launches and stuff like that happen because parts got delivered three months ago. It’d be like running a McDonalds and realizing that your fries and burger providers could not tell you when the food would arrive.”

It’s hard to overstate the strategic importance of the parts suppliers to the operations of aerospace, defense, and advanced machining companies. As no less an authority on manufacturing than Elon Musk noted in a tweet, “The factory is the product.” It’s also hard to overstate the geopolitical importance of re-establishing the U.S. as a center of manufacturing excellence, according to Hadrian’s investors Lux Capital, Founders Fund, and Construct Capital. Which is one reason why they’re investing $9.5 million into the very early stage business.

“America made massive strategic mistakes in the early 90s which have left our national manufacturing ecosystem completely dilapidated,” said Founders Fund principal Delian Asparouhov. “The only way to get out of this disaster is to re-invent the most basic input into our aerospace and defense supply chains, machining metal parts quickly and with high tolerance. Right now, America’s most innovative company, SpaceX, relies on a network of near-retired machinists to produce space-worthy metal parts, and no one in technology is. focused on solving this.”

 

The factory is the product

— Elon Musk (@elonmusk) January 11, 2021

Power got to understand the problem at his previous company, Ento, which sold workforce management software to blue collar customers. It was there he realized the issue of. the aging workforce and the need for manufacturers to upgrade almost every aspect of their own technology stack. “I realized that the right way to bring technology to the industrial space is not to sell software to these companies, it’s to build an industrial business from scratch with software.”

Initially, Hadrian is focusing all of its efforts on the space industry, where the component manufacturing problem is especially acute, but the manufacturing capabilities the company is building out have broad relevance across any industry that requires highly engineered components.

“The demand for manufacturing from both the large SpaceX and Blue Origin all the way to this growing long tail of companies from Anduril to Relativity to Varda,” said Lux Capital co-founder Josh Wolfe. “Most of these guys are using mom and pop machine shops… [and] those shops are horribly inefficient. They’re not consistent, and they’re not reliable. Between the software automation, the hardware, you can cut down on inefficiency every step of the process… I like to think of value creation as waste reduction… so mundane things like quoting, scheduling, bidding, and planning all the way to the programming of the manufacturing… every one of those things takes hours to tens of hours to days and weeks, so if you can do that in minutes, it’s just a no-brainer. [Hadrian] will be the cutting edge choice for all of the new and explicitly dedicated and focused aerospace and defense companies.”

Power envisions a network of manufacturing facilities that can initially cover roughly 65% of all space and defense components, and will eventually take that number up to 95% of components. Already several of the biggest launch vehicle and satellite manufacturers are in talks with the company to produce hundreds of units for them, Power said. Some of those companies just happen to be in the Construct, Lux, and Founders Fund portfolio.

And the company’s founder sees this as a new way to revitalize American manufacturing jobs as well. “Manufacturing jobs in space and defense can easily be as high paying as a software engineering job at Google,” he said. In an ideal world, Hadrian would like to offer an onramp to high paying manufacturing careers in the 21st century in the same way that automakers provided good union jobs in the twentieth.

“We haven’t built any of this. If you look at the sheer number of people that we need to train and hire on our new technology and new systems, that people problem and that training problem is part of growing our business.”

A render of Axiom’s future commercial space station design.

Casa Blanca raises $2.6M to build the ‘Bumble for real estate’

By Mary Ann Azevedo

Casa Blanca, which aims to develop a “Bumble-like app” for finding a home, has raised $2.6 million in seed funding.

Co-founder and CEO Hannah Bomze got her real estate license at the age of 18 and worked at Compass and  Douglas Elliman Real Estate before launching Casa Blanca last year.

She launched the app last October with the goal of matching home buyers and renters with homes using an in-app matchmaking algorithm combined with “expert agents.” Buyers get up to 1% of home purchases back at closing. Similar to dating apps, Casa Blanca’s app is powered by a simple swipe left or right.

Samuel Ben-Avraham, a partner and early investor of Kith and an early investor in WeWork, led the round for Casa Blanca, bringing its total raise to date to $4.1 million.

The New York-based startup recently launched in the Colorado market and has seen some impressive traction in a short amount of time. 

Since launching the app in October, Casa Blance has “made more than $100M in sales” and is projected to reach $280 million this year between New York and its Denver launch. 

Bomze said the app experience will be customized for each city with the goal of creating a personalized experience for each user. Casa Blanca claims to streamline and sort listings based on user preferences and lifestyle priorities.

Image Credits: Casa Blanca

“People love that there is one place to book, manage feedback, schedule and communicate with a branded agent for one cohesive experience,” Bomze said. “We have a breadth of users from first time buyers to people using our platform for $15 million listings.”

Unlike competitors, Casa Blanca applies to a direct-to-consumer model, she pointed out.

“While our agents are an integral part of the company, they are not responsible for bringing in business and have more organizational support, which allows them to focus on the individual more and creates a better end-to-end experience for the consumer,” Bomze said.

Casa Blanca currently has over 38 agents in NYC and Colorado, compared to about 15 at this time last year.

“We are in a growth phase and finding a unique opportunity in this climate, in particular, because there are many women exploring new, more flexible job opportunities,” Bomze noted. 

The company plans to use its new capital to continue expanding into new markets, nationally and globally; enhancingits technology and scaling.

“As we continue to grow in new markets, the app experience will be curated to each city – for example, in Colorado you can edit your preferences based on access to ski areas – to make sure we’re offering a personalized experience for each user,” Bomze said.

Facebook to test new business discovery features in U.S. News Feed

By Sarah Perez

Facebook announced this morning it will begin testing a new experience for discovering businesses in its News Feed in the U.S. When live, users to tap on topics they’re interested in underneath posts and ads in their News Feed in order to explore related content from businesses. The change comes at a time when Facebook has been arguing how Apple’s App Tracking Transparency update will impact its small business customers — a claim many have dismissed as misleading, but nevertheless led some mom and pop shops to express concern about the impacts to their ad targeting capabilities, as a result. This new test is an example of how easily Facebook can tweak its News Feed to build out more data on its users, if needed.

The company suggests users may see the change under posts and ads from businesses selling beauty products, fitness or clothing, among other things.

The idea here is that Facebook would direct users to related businesses through a News Feed feature, when they take a specific action to discover related content. This, in turn, could help Facebook create a new set of data on its users, in terms of which users clicked to see more, and what sort of businesses they engaged with, among other things. Over time, it could turn this feature into an ad unit, if desired, where businesses could pay for higher placement.

“People already discover businesses while scrolling through News Feed, and this will make it easier to discover and consider new businesses they might not have found on their own,” the company noted in a brief announcement.

Facebook didn’t detail its further plans with the test, but said as it learned from how users interacted with the feature, it will expand the experience to more people and businesses.

Image Credits: Facebook

Along with news of the test, Facebook said it will roll out more tools for business owners this month, including the ability to create, publish and schedule Stories to both Facebook and Instagram; make changes and edits to Scheduled Posts; and soon, create and manage Facebook Photos and Albums from Facebook’s Business Suite. It will also soon add the ability to create and save Facebook and Instagram posts as drafts from the Business Suite mobile app.

Related to the businesses updates, Facebook updated features across ad products focused on connecting businesses with customer leads, including Lead Ads, Call Ads, and Click to Messenger Lead Generations.

Facebook earlier this year announced a new Facebook Page experience that gave businesses the ability to engage on the social network with their business profile for things like posting, commenting and liking, and access to their own, dedicated News Feed. And it had removed the Like button in favor of focusing on Followers.

It is not a coincidence that Facebook is touting its tools for small businesses at a time when there’s concern — much of it loudly shouted by Facebook itself — that its platform could be less useful to small business owners in the near future, when ad targeting capabilities becomes less precise as users vote ‘no’ when Facebook’s iOS app asks if it can track them.

Pearpop raises from The Chainsmokers, Alexis Ohanian, Amy Schumer, Kevin Hart, Mark Cuban, Marshmello, and Snoop Dogg

By Jonathan Shieber

Pearpop, the marketplace for social collaborations between the teeming hordes of musicians, craftspeople, chefs, clowns, diarists, dancers, artists, actors, acrobats, aspiring celebrities and actual celebrities, has raised $16 million in funding that includes what seems like half of Hollywood, along with Alexis Ohanian’s Seven Seven Six venture firm and Bessemer Venture Partners.

The funding was actually split between a $6 million seed funding round co-led by Ashton Kutcher and Guy Oseary’s Sound Ventures and Slow Ventures, with participation from Atelier Ventures and Chapter One Ventures and a $10 million additional investment led by Ohanian’s Seven Seven Six with participation from Bessemer.

TechCrunch first covered pearpop last year and there’s no denying that the startup is on to something. It basically takes Cameo’s celebrity marketplace for private shout-outs and makes it public. Allowing social media personalities to boost their followers by paying more popular personalities to shout out, duet, or comment on their posts.

“I’ve invested in pearpop because it’s been on my mind for a while that the creator economy has resulted in a lot of not equitable outcomes for creators. Where i talked about the missing middle class of the creator economy,” said Li Jin, the founder of Atelier Ventures and author of a critical piece on creator economics, “The creator economy needs a middle class“. 

“When I saw pearpop I felt like there was a really big potential for pearpop to be the one of the creators of the creative middle class. They’ve introduced this mechanism by which larger creators can help smaller creators and everyone has something of value to offer something to everyone else in the ecosystem.”

Jin discovered pearpop through the TechCrunch piece, she said. “You wrote that article and then i reached out to the team,” said Jin.

The idea was so appealing, it brought in a slew of musicians, athletes, actors and entertainers, including: Abel Makkonen (The Weeknd), Amy Schumer, The Chainsmokers, Diddy, Gary Vaynerchuk, Griffin Johnson, Josh Richards, Kevin Durant (Thirty 5 Ventures), Kevin Hart (HartBeat Ventures), Mark Cuban, Marshmello, Moe Shalizi, Michael Gruen (Animal Capital), MrBeast (Night Media Ventures), Rich Miner (Android co-founder) and Snoop Dogg.

“Pearpop has the potential to benefit all social media platforms by delivering new users and engagement, while simultaneously leveling the playing field of opportunity for creators,” said Alexis Ohanian, Founder, Seven Seven Six, in a statement. “The company has created a revolutionary new marketplace model that is set to completely reimagine how we think of social media monetization. As both a social media founder and an investor, I’m excited for what’s to come with pearpop.”

Already Heidi Klum, Loren Gray, Snoop Dogg, and Tony Hawk have gotten paid to appear in social media posts from aspiring auteurs on the social media platform TikTok.

Using the platform is relatively simple. A social media user (for now, that means just TikTok) sends a post that exists on their social feed and requests that another social media user interacts with it in some way — either commenting, posting a video in response, or adding a sound. If the request seems okay, or “on brand”, then the person who accepts the request performs the prescribed action.

Pearpop takes a 25% cut of all transactions with the social media user who’s performing the task getting the other 75%.

The company wouldn’t comment on revenue numbers, except to say that it’s on track to bring in seven figures this year.

Users on the platform set their prices and determine which kinds of services they’re willing to provide to boost the social media posts of their contractors.

Prices range anywhere from $5 to $10,000 depending on the size of a user’s following and the type of request that’s being made. Right now, the most requested personality on the marketplace is the TikTok star, Anna Banana.

These kinds of transactions do have impacts. The company said that personalities on the platform were able to increase their follower count with the service. For instance, Leah Svoboda went from 20K to 141K followers, after a pearpop duet with Anna Shumate.

If this all makes you feel like you’ve tripped and fallen through a Black Mirror into a dystopian hellscape where everything and every interaction is a commodity to be mined for money, well… that’s life.

“What I appreciate most about pearpop is the control it gives me as a creator,” said Anna Shumate, TikTok influencer @annabananaxdddd. “The platform allows me to post what I want and when I want. My followers still love my content because it’s authentic and true to me, which is what sets pearpop apart from all of the other opportunities on social media.”

Talent agencies, too, see the draw. Early adopters include Talent X, Get Engaged, and Next Step Talent and The Fuel Injector, which has added its entire roster of talent to pearpop, which includes Kody Antle, Brooke Monk and Harry Raftus, the company said.

“The initial concept came out of an obvious gap within the space: no marketplace existed for creators of all sizes to monetize through simple, authentic collaborations that are mutually beneficial,” said Cole Mason, co-founder & CEO, pearpop.  “It soon became clear that this was a product that people had been waiting for, as thousands of people rely on our platform today to gain full control of their social capital for the first time starting with TikTok.”

Autodesk acquires Upchain

By Frederic Lardinois

Autodesk, the publicly-traded software company best known for its CAD and 3D modeling tools, today announced that it has acquired Upchain, a Toronto-based startup that offers a cloud-based product lifecycle management (PLM) service. The two companies, which didn’t disclose the acquisition price, expect the transaction to close by July 31, 2021.

Since its launch in 2015, Upchain raised about $7.4 million in funding, according to Crunchbase. The central idea behind the service was that existing lifecycle management solutions, which are meant to help businesses take new products from inception production and collaborate with their supply chain in the process, were cumbersome and geared toward large multi-national enterprises. Upchain’s focus is on small and mid-sized companies and promises to be more affordable and usable than other solutions. It’s customer base spans a wide range of industries, ranging from textiles and apparel to automotive, aerospace, industrial machines, transportation and entertainment.

“We’ve had a singular focus at Upchain to up-level cloud collaboration across the entire product lifecycle, changing the way that people work together so that everyone has access to the data they need, when they need it,” Upchain CEO and founder John Laslavic said in today’s announcement. “Autodesk shares our vision for radically simplifying how engineers and manufacturers across the entire value chain collaborate and bring a top-quality product to market faster. I look forward to seeing how Upchain and Autodesk, together, take that vision to the next level in the months and years to come.”

For Autodesk, this is the company’s 15th acquisition since 2017. Earlier this year, the company made its first $1 billion acquisition when it bought Portland, OR-based Innovyze, a 35-year-old company that focuses on modeling and lifecycle management for the water management industry. 

“Resilience and collaboration have never been more critical for manufacturers as they confront the increasing complexity of developing new products. We’re committed to addressing those needs by offering the most robust end-to-end design and manufacturing platform in the cloud,” said Andrew Anagnost, President and CEO of Autodesk. “The convergence of data and processes is transforming the industry. By integrating Upchain with our existing offerings, Autodesk customers will be able to easily move data without barriers and will be empowered to unlock and harness valuable insights that can translate to fresh ideas and business success.”

Deepfake video app Avatarify, which processes on-phone, plans digital watermark for videos

By Mike Butcher

Making deepfake videos used to be hard. Now all you need is a smartphone. Avatarify, a startup that allows people to make deepfake videos directly on their phone rather than in the cloud, is soaring up the app charts after being used by celebrities such as Victoria Beckham.

However, the problem with many deepfake videos is that there is no digital watermark to determine that the video has been tampered with. So Avatarify says it will soon launch a digital watermark to prevent this from happening.

Run out of Moscow but with a U.S. HQ, Avatarify launched in July 2020 and since then has been downloaded millions of times. The founders say that 140 million deepfake videos were created with Avatarify this year alone. There are now 125 million views of videos with the hashtag #avatarify on TikTok. While its competitors include the well-funded Reface, Snapchat, Wombo.ai, Mug Life and Xpression, Avatarify has yet to raise any money beyond an angel round.

Despite taking only $120,000 in angel funding, the company has yet to accept any venture capital and says it has bootstrapped its way from zero to almost 10 million downloads and claims to have a $10 million annual run rate with a team of less than 10 people.

It’s not hard to see why. Avatarify has a freemium subscription model. They offer a 7-day free trial and a 12-month subscription for $34.99 or a weekly plan for $2.49. Without a subscription, they offer the core features of the app for free, but videos then carry a visible watermark.

The founders also say the app protects privacy, because the videos are processed directly on the phone, rather than in the cloud where they could be hacked.

Avatarify processes user’s photos and turns them into short videos by animating faces, using machine learning algorithms and adding sounds. The user chooses a picture they want to animate, chooses the effects and music, and then taps to animate the picture. This short video can then be posted on Instagram or TikTok.

The Avatarify videos are taking off on TikTok because teens no longer need to learn a dance or be much more creative than finding a photo of a celebrity to animate to.

Avartify says you can’t use their app to impersonate someone, but there is of course no way to police this.

Co-founders Ali Aliev and Karim Iskakov wrote the app during the COVID-19 lockdown in April 2020. Ali spent two hours writing a program in Python to transfer his facial expressions to the other person’s face and use a filter in Zoom. The result was a real-time video, which could be streamed to Zoom. He joined a call with Elon Mask’s face and everyone on the call was shocked. The team posted the video, which then went viral.

They posted the code on Github and immediately saw the number of downloads grow. The repository was published on 6 April 2020, and as of 19 March 2021 had been downloaded 50,000 times.

Ali left his job at Samsung AI Centre and devoted himself to the app. After Avatarify’s iOS app was released on 28 June 2020, viral videos on TikTok, created with the app, led it to App Store’s top charts without paid acquisition. In February 2021, Avatarify was ranked first among Top Free Apps worldwide. Between February and March, the app 2021 generated more than $1 million in revenue (Source: AppMagic).

However, despite Avartify’s success, the ongoing problems with deepfake videos remain, such as using these apps to make nonconsensual porn, using the faces of innocent people.

Instagram’s new test lets you choose if you want to hide ‘Likes,’ Facebook test to follow

By Sarah Perez

Instagram today will begin a new test around hiding Like counts on users’ posts, following its experiments in this area which first began in 2019. This time, however, Instagram is not enabling or disabling the feature for more users. Instead, it will begin to explore a new option where users get to decide what works best for them — either choosing to see the Like counts on others’ posts, or not. Users will also be able to turn off Like counts on their own posts, if they choose. Facebook additionally confirmed it will begin to test a similar experience on its own social network.

Instagram says tests involving Like counts were deprioritized after Covid-19 hit, as the company focused on other efforts needed to support its community. (Except for that brief period this March where Instagram accidentally hid Likes for more users due to a bug.)

The company says it’s now revisiting the feedback it collected from users during the tests and found a wide range of opinions. Originally, the idea with hiding Like counts was about reducing the anxiety and embarrassment that surrounds posting content on the social network. That is, people would stress over whether their post would receive enough Likes to be deemed “popular.” This problem was particularly difficult for Instagram’s younger users, who care much more about what their peers think — so much so that they would take down posts that didn’t receive “enough” Likes.

In addition, the removal of Likes helped reduce the sort of herd mentality that drives people to like things that are already popular, as opposed to judging the content for themselves.

But during tests, not everyone agreed the removal of Likes was a change for the better. Some people said they still wanted to see Like counts so they could track what was trending and popular. The argument for keeping Likes was more prevalent among the influencer community, where creators used the metric in order to communicate their value to partners, like brands and advertisers. Here, lower engagement rates on posts could directly translate to lower earnings for these creators.

Both arguments for and against Likes have merit, which is why Instagram’s latest test will put the choice back into users’ own hands.

This new test will be enabled for a small percentage of users globally on Instagram, the company says.

If you’ve been opted in, you’ll find a new option to hide the Likes from within the app’s Settings. This will prevent you from seeing Likes on other people’s posts as you scroll through your Instagram Feed. As a creator, you’ll be able to hide Likes on a per-post basis via the three-dot “…” menu at the top. Even if Likes are disabled publicly, creators are still able to view Like counts and other engagements through analytics, just as they did before.

The tests on Facebook, which has also been testing Like count removals for some time, have not yet begun. Facebook tells TechCrunch those will roll out in the weeks ahead.

Making Like counts an choice may initially seem like it could help to address everyone’s needs. But in reality, if the wider influencer community chooses to continue to use Likes as a currency that translates to popularity and job opportunities, then other users will continue to do the same.

Ultimately, communities themselves have to decide what sort of tone they want to set, preferably from the outset — before you’ve attracted millions of users who will be angry when you later try to change course.

There’s also a question as to whether social media users are really hungry for an “Like-free” safer space. For years we’ve seen startups focused on building an “anti-Instagram” of sorts, where they drop one or more Instagram features, like algorithmic feeds, Likes and other engagement mechanisms, such as Minutiae, Vero, Dayflash, Oggl, and now, newcomers like troubled Dispo, or under-the-radar Herd. But Instagram has yet to fail because of an anti-Instagram rival. If anything is a threat, it’s a new type of social network entirely, like TikTok –where it should be noted getting Likes and engagements is still very important for creator success.

Instagram didn’t say how long the new tests would last or if and when the features would roll out more broadly.

“We’re testing this on Instagram to start, but we’re also exploring a similar experience for Facebook. We will learn from this new small test and have more to share soon,” a Facebook company spokesperson said.

1Password acquires SecretHub and launches new enterprise secrets management tool

By Frederic Lardinois

1Password, the password management service that competes with the likes of LastPass and BitWarden, today announced a major push beyond the basics of password management and into the infrastructure secrets management space. To do so, the company has acquired secrets management service SecretHub and is now launching its new 1Password Secrets Automation service.

1Password did not disclose the price of the acquisition. According to CrunchBase, Netherlands-based SecretHub never raised any institutional funding ahead of today’s announcement.

For companies like 1Password, moving into the enterprise space, where managing corporate credentials, API tokens, keys and certificates for individual users and their increasingly complex infrastructure services, seems like a natural move. And with the combination of 1Password and its new Secrets Automation service, businesses can use a single tool that covers them from managing their employee’s passwords to handling infrastructure secrets. 1Password is currently in use by more then 80,000 businesses worldwide and a lot of these are surely potential users of its Secrets Automation service, too.

“Companies need to protect their infrastructure secrets as much if not more than their employees’ passwords,” said Jeff Shiner, CEO of 1Password. “With 1Password and Secrets Automation, there is a single source of truth to secure, manage and orchestrate all of your business secrets. We are the first company to bring both human and machine secrets together in a significant and easy-to-use way.”

In addition to the acquisition and new service, 1Password also today announced a new partnership with GitHub. “We’re partnering with 1Password because their cross-platform solution will make life easier for developers and security teams alike,” said Dana Lawson, VP of partner engineering and development at GitHub, the largest and most advanced development platform in the world. “With the upcoming GitHub and 1Password Secrets Automation integration, teams will be able to fully automate all of their infrastructure secrets, with full peace of mind that they are safe and secure.”

JXL turns Jira into spreadsheets

By Frederic Lardinois

Atlassian’s Jira is an extremely powerful issue tracking and project management tool, but it’s not the world’s most intuitive piece of software. Spreadsheets, on the other hand, are pretty much the de facto standard for managing virtually anything in a business. It’s maybe no surprise then that there are already a couple of tools on the market that bring a spreadsheet-like view of your projects to Jira or connect it to services like Google Sheets.

The latest entrant in this field is JXL Spreadsheets for Jira (and specifically Jira Cloud), which was founded by two ex-Atlassian employees, Daniel Franz and Hannes Obweger. And in what has become a bit of a trend, Atlassian Ventures invested in JXL earlier this year.

Franz built the Good News news reader before joining Atlassian, while his co-founder previously founded Radiant Minds Software, the makers of Jira Roadmaps (now Portfolio for Jira), which was acquired by Atlassian.

Image Credits: JXL

“Jira is so successful because it is awesome,” Franz told me. “It is so versatile. It’s highly customizable. I’ve seen people in my time who are doing anything and everything with it. Working with customers [at Atlassian] — at some point, you didn’t get surprised anymore, but what the people can do and track with JIRA is amazing. But no one would rock up and say, ‘hey, JIRA is very pleasant and easy to use.’ ”

As Franz noted, by default, Jira takes a very opinionated view of how people should use it. But that also means that users often end up exporting their issues to create reports and visualizations, for example. But if they make any changes to this data, it never flows back into Jira. No matter how you feel about spreadsheets, they do work for many people and are highly flexible. Even Atlassian would likely agree because the new Jira Work Management, which is currently in beta, comes with a spreadsheet-like view and Trello, too, recently went this way when it launched a major update earlier this year.

Image Credits: JXL

Over the course of its three-month beta, the JXL team saw how its users ended up building everything from cross-project portfolio management to sprint planning, backlog maintenance, timesheets and inventory management on top of its service. Indeed, Franz tells me that the team already has some large customers, with one of them having a 7,000-seat license.

Pricing for JXL seems quite reasonable, starting at $1/user/month for teams with up to 10 users. Larger teams get increasingly larger discounts, down to $0.45/user/month for licenses with over 5,000 seats. There is also a free trial.

One of the reasons the company can offer this kind of pricing is because it only needs a very simple backend. None of a customer’s data sits on JXL’s servers. Instead, it sits right on top of Jira’s APIs, which in turn also means that changes are synced back and forth in real time.

JXL is now available in the Atlassian Marketplace and the team is actively hiring as it looks to build out its product (and put its new funding to work).

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