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Yesterday — January 17th 2021Your RSS feeds

Twitter’s decentralized future

By Lucas Matney

This week, Twitter CEO Jack Dorsey finally responded publicly to the company’s decision to ban President Trump from its platform, writing that Twitter had “faced an extraordinary and untenable circumstance” and that he did not “feel pride” about the decision. In the same thread, he took time to call out a nascent Twitter-sponsored initiative called “bluesky,” which is aiming to build up an “open decentralized standard for social media” that Twitter is just one part of.

Researchers involved with bluesky reveal to TechCrunch an initiative still in its earliest stages that could fundamentally shift the power dynamics of the social web.

Bluesky is aiming to build a “durable” web standard that will ultimately ensure that platforms like Twitter have less centralized responsibility in deciding which users and communities have a voice on the internet. While this could protect speech from marginalized groups, it may also upend modern moderation techniques and efforts to prevent online radicalization.

Jack Dorsey, co-founder and chief executive officer of Twitter Inc., arrives after a break during a House Energy and Commerce Committee hearing in Washington, D.C., U.S., on Wednesday, Sept. 5, 2018. Republicans pressed Dorsey for what they said may be the “shadow-banning” of conservatives during the hearing. Photographer: Andrew Harrer/Bloomberg via Getty Images

What is bluesky?

Just as Bitcoin lacks a central bank to control it, a decentralized social network protocol operates without central governance, meaning Twitter would only control its own app built on bluesky, not other applications on the protocol. The open and independent system would allow applications to see, search and interact with content across the entire standard. Twitter hopes that the project can go far beyond what the existing Twitter API offers, enabling developers to create applications with different interfaces or methods of algorithmic curation, potentially paying entities across the protocol like Twitter for plug-and-play access to different moderation tools or identity networks.

A widely adopted, decentralized protocol is an opportunity for social networks to “pass the buck” on moderation responsibilities to a broader network, one person involved with the early stages of bluesky suggests, allowing individual applications on the protocol to decide which accounts and networks its users are blocked from accessing.

Social platforms like Parler or Gab could theoretically rebuild their networks on bluesky, benefitting from its stability and the network effects of an open protocol. Researchers involved are also clear that such a system would also provide a meaningful measure against government censorship and protect the speech of marginalized groups across the globe.

Bluesky’s current scope is firmly in the research phase, people involved tell TechCrunch, with about 40-50 active members from different factions of the decentralized tech community surveying the software landscape and putting together proposals for what the protocol should ultimately look like. Twitter has told early members that it hopes to hire a project manager in the coming weeks to build out an independent team that will start crafting the protocol itself.

A Twitter spokesperson declined to comment on the initiative.

Bluesky’s initial members were invited by Twitter CTO Parag Agrawal early last year. It was later determined that the group should open the conversation up to folks representing some of the more recognizable decentralized network projects, including Mastodon and ActivityPub, which joined the working group hosted on the secure chat platform Element.

Jay Graber, founder of decentralized social platform Happening, was paid by Twitter to write up a technical review of the decentralized social ecosystem, an effort to “help Twitter evaluate the existing options in the space,” she tells TechCrunch.

“If [Twitter] wanted to design this thing, they could have just assigned a group of guys to do it, but there’s only one thing that this little tiny group of people could do better than Twitter, and that’s not be Twitter,” said Golda Velez, another member of the group who works as a senior software engineer at Postmates and co-founded civ.works, a privacy-centric social network for civic engagement.

The group has had some back and forth with Twitter executives on the scope of the project, eventually forming a Twitter-approved list of goals for the initiative. They define the challenges that the bluesky protocol should seek to address while also laying out what responsibilities are best left to the application creators building on the standard.

Parrot.VC Twitter account

Image: TechCrunch

Who is involved

The pain points enumerated in the document, viewed by TechCrunch, encapsulate some of Twitter’s biggest shortcomings. They include “how to keep controversy and outrage from hijacking virality mechanisms,” as well as a desire to develop “customizable mechanisms” for moderation, though the document notes that the applications, not the overall protocol, are “ultimately liable for compliance, censorship, takedowns etc.”

“I think the solution to the problem of algorithms isn’t getting rid of algorithms — because sorting posts chronologically is an algorithm — the solution is to make it an open pluggable system by which you can go in and try different algorithms and see which one suits you or use the one that your friends like,” says Evan Henshaw-Plath, another member of the working group. He was one of Twitter’s earliest employees and has been building out his own decentralized social platform called Planetary.

His platform is based on the secure scuttlebutt protocol, which allows users to browse networks offline in an encrypted fashion. Early on, Planetary had been in talks with Twitter for a corporate investment as well as a personal investment from CEO Jack Dorsey, Henshaw-Plath says, but the competitive nature of the platform prompted some concern among Twitter’s lawyers and Planetary ended up receiving an investment from Twitter co-founder Biz Stone’s venture fund Future Positive. Stone did not respond to interview requests.

After agreeing on goals, Twitter had initially hoped for the broader team to arrive at some shared consensus, but starkly different viewpoints within the group prompted Twitter to accept individual proposals from members. Some pushed Twitter to outright adopt or evolve an existing standard while others pushed for bluesky to pursue interoperability of standards early on and see what users naturally flock to.

One of the developers in the group hoping to bring bluesky onto their standard was Mastodon creator Eugen Rochko, who tells TechCrunch he sees the need for a major shift in how social media platforms operate globally.

“Banning Trump was the right decision though it came a little bit too late. But at the same time, the nuance of the situation is that maybe it shouldn’t be a single American company that decides these things,” Rochko tells us.

Like several of the other members in the group, Rochko has been skeptical at times about Twitter’s motivation with the bluesky protocol. Shortly after Dorsey’s initial announcement in 2019, Mastodon’s official Twitter account tweeted out a biting critique, writing, “This is not an announcement of reinventing the wheel. This is announcing the building of a protocol that Twitter gets to control, like Google controls Android.”

Today, Mastodon is arguably one of the most mature decentralized social platforms. Rochko claims that the network of decentralized nodes has more than 2.3 million users spread across thousands of servers. In early 2017, the platform had its viral moment on Twitter, prompting an influx of “hundreds of thousands” of new users alongside some inquisitive potential investors whom Rochko has rebuffed in favor of a donation-based model.

Image Credits: TechCrunch

Inherent risks

Not all of the attention Rochko has garnered has been welcome. In 2019, Gab, a social network favored by right-wing extremists, brought its entire platform onto the Mastodon network after integrating the platform’s open-source code, bringing Mastodon its single biggest web of users and its most undesirable liability all at once.

Rochko quickly disavowed the network and aimed to sever its ties to other nodes on the Mastodon platform and convince application creators to do the same. But a central fear of decentralization advocates was quickly realized, as the platform type’s first “success story” was a home for right-wing extremists.

This fear has been echoed in decentralized communities this week as app store owners and networks have taken another right-wing social network, Parler, off the web after violent content surfaced on the site in the lead-up to and aftermath of riots at the U.S. Capitol, leaving some developers fearful that the social network may set up home on their decentralized standard.

“Fascists are 100% going to use peer-to-peer technologies, they already are and they’re going to start using it more… If they get pushed off of mainstream infrastructure or people are surveilling them really closely, they’re going to have added motivation,” said Emmi Bevensee, a researcher studying extremist presences on decentralized networks. “Maybe the far-right gets stronger footholds on peer-to-peer before the people who think the far-right is bad do because they were effectively pushed off.”

A central concern is that commoditizing decentralized platforms through efforts like bluesky will provide a more accessible route for extremists kicked off current platforms to maintain an audience and provide casual internet users a less janky path towards radicalization.

“Peer-to-peer technology is generally not that seamless right now. Some of it is; you can buy Bitcoin in Cash App now, which, if anything, is proof that this technology is going to become much more mainstream and adoption is going to become much more seamless,” Bevensee told TechCrunch. “In the current era of this mass exodus from Parler, they’re obviously going to lose a huge amount of audience that isn’t dedicated enough to get on IPFS. Scuttlebutt is a really cool technology but it’s not as seamless as Twitter.”

Extremists adopting technologies that promote privacy and strong encryption is far from a new phenomenon, encrypted chat apps like Signal and Telegram have been at the center of such controversies in recent years. Bevensee notes the tendency of right-wing extremist networks to adopt decentralized network tech has been “extremely demoralizing” to those early developer communities — though she notes that the same technologies can and do benefit “marginalized people all around the world.”

Though people connected to bluesky’s early moves see a long road ahead for the protocol’s development and adoption, they also see an evolving landscape with Parler and President Trump’s recent deplatforming that they hope will drive other stakeholders to eventually commit to integrating with the standard.

“Right at this moment I think that there’s going to be a lot of incentive to adopt, and I don’t just mean by end users, I mean by platforms, because Twitter is not the only one having these really thorny moderation problems,” Velez says. “I think people understand that this is a critical moment.”

Marc Lore leaves Walmart a little over four years after selling Jet.com for $3B

By Jonathan Shieber

Marc Lore, the executive vice president, president and CEO of U.S. e-commerce for Walmart, is stepping down a little over four years after selling his e-commerce company Jet.com to the country’s largest retailer for $3 billion.

Lore’s tenure at the company was a mixed bag. Walmart instituted several new technology initiatives under Lore’s tenure, but the Jet.com service was shuttered last May and other initiatives from Lore, like an option to have customers order items via text, was also a money-loser for the Bentonville, Arkansas-based company.

“After Mr. Lore retires on January 31, 2021, the U.S. business, including all the aspects of US retail eCommerce, will continue to report to John Furner, Executive Vice President, President and Chief Executive Officer, Walmart U.S., beginning on February 1, 2021,” Walmart said in a filing.

Walmart has continued to push ahead with a number of tech-related initiatives, including the launch of a new business that will focus on developing financial services.

That initiative is being undertaken through a strategic partnership with the fintech investment firm, Ribbit Capital and adds to a startup tech portfolio that also includes the incubator Store N⁰8, which launched in 2018.

“Reflecting on the past few years with so much pride – Walmart changed my life and the work we did together will keep changing the lives of customers for years to come. It has been an honor to be a part of the Walmart family and I look forward to providing advice and ideas in the future,” Lore said in a statement posted to Linkedin. “Looking forward, I’ll be taking some time off and plan to continue working with several startups. Excited to keep you all up to date on what’s next.”

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Home services platform Porch acquires four companies

By Frederic Lardinois

Only a few weeks after its SPAC IPO, Porch today announced that it has made four acquisitions, worth a total of $122 million. The most important here is probably the acquisition of Homeowners of America for $100 million, which gets Porch deeper into the home insurance space. In addition, Porch is also acquiring mover marketing and data platform V12 for $22 million, as well as home inspection service Palm-Tech and iRoofing, a SaaS application for roofing contractors. Porch did not disclose the acquisition prices for the latter two companies.

You may still think of Porch as a marketplace for home improvement and repair services — and that’s what it started out as when it launched about seven years ago. Yet while it still offers those services, a couple of years after its 2013 launch, the company pivoted to building what it now calls a “vertical software platform for the home.” Through a number of acquisitions, the Porch Group now includes Porch.com, as well as services like HireAHelper, Inspection Support Network for home inspectors, Kandela for providing services around moving and an insurance broker in the form of the Elite Insurance Group. In some form or another, Porch’s tools are now used — either directly or indirectly — by two-thirds of U.S. homebuyers every month.

Porch founder and CEO Matt Ehrlichman. Image Credits: Porch

As Porch founder and CEO Matt Ehrlichman told me, he had originally planned to take his company public through a traditional IPO. He noted that going the increasingly popular SPAC route, though, allowed him to push his timeline up by a year, which in turn now enables the company to make the acquisitions it announced today.

“In total, we had a $323 million fundraise that allows us now to not only be a public company with public currency, but to be very well capitalized. And picking up that year allows us to be able to go and pursue acquisitions that we think make really good fits for Porch,” Ehrlichman told me. While Porch’s guidance for its 2021 revenue was previously $120 million, it’s now updating that guidance to $170 million based on these acquisitions. That would mean Porch would grow its revenue by about 134% year-over-year between 2020 and 2021.

As the company had previously laid out in its public documents, the plan for 2021 was always to get deeper into insurance. Indeed, as Ehrlichman noted, Porch these days tends to think of itself as a vertical software company that layers insurtech on top of its services in order to be able to create a recurring revenue stream. And because Porch offers such a wide range of services already, its customer acquisition costs are essentially zero for these services.

Image Credits: Homeowners of America

Porch was already a licensed insurance brokerage. With Homeowners of America, it is acquiring a company that is both an insurance carrier as well as a managing general agent..

“We’re able to capture all of the economic value from the consumer as we help them get insurance set up with their new home and we can really control that experience to delight them. As we wrap all the technology we’ve invested in around that experience we can make it super simple and instant to be able to get the right insurance at the right price for your new home. And because we have all of this data about the home that nobody else has — from the inspection we know if the roof is old, we know if the hot water system is gonna break soon and all the appliances — we know all of this data and so it just gives us a really big advantage in insurance.”

Data, indeed, is what a lot of these acquisitions are about. Because Porch knows so much about so many customers, it is able to provide the companies it acquires with access to relevant data, which in turn helps them offer additional services and make smarter decisions.

Homeowners of America is currently operating in six states (Texas, Arizona, North Carolina, South Carolina, Virginia and Georgia) and licensed in 31. It has a network of more than 800 agencies so far and Porch expects to expand the company’s network and geographic reach in the coming months. “Because we have [customer acquisition cost]-free demand all across the country, one of the opportunities for us is simply just to expand that across the nation,” Ehrlichman explained.

As for V12, Porch’s focus is on that company’s mover marketing and data platform. The acquisition should help it reach its medium-term goal of building a $200 million revenue stream in this area. V12 offers services across multiple verticals, though, including in the automotive space, and will continue to do so. The platform’s overall focus is to help brands identify the right time to reach out to a given consumer — maybe before they decide to buy a new car or move. With Porch’s existing data layered on top of V12’s existing capabilities, the company expects that it will be able to expand these features and it will also allow Porch to not offer mover marketing but what Ehrlichman called “pro-mover” services, as well.

“V12 anchors what we call our marketing software division. A key focus of that is mover marketing. That’s where it’s going to have, long term, tremendous differentiation. But there are a number of other things that they’re working on that are going to have really nice growth vectors, and they’ll continue to push those,” said Ehrlichman.

As for the two smaller acquisitions of iRoofing and Palm-Tech, these are more akin to some of the previous acquisitions the company made in the contractor and inspection verticals. Like with those previous acquisitions, the plan is to help them grow faster, in part through integrating them into the overall Porch group’s family of products.

“Our business is and continues to be highly recurring or reoccurring in nature,” said Porch CFO Marty Heimbigner. “Nearly all of our revenues, including that of these new acquisitions, is consistent and predictable. This repeat revenue is also high margin with less than 20% cost of revenue and is expected to grow more than 30% per year on our platform. So, we believe these deals are highly accretive for our shareholders.”

2020 was one of the warmest years in history and indicates mounting risks of climate change

By Jonathan Shieber

It’s official. 2020 was one of the warmest years on record either edging out or coming in just behind 2016 for the warmest year in recorded history according to data from US government agencies.

The National Aeronautics and Space Administration had the year just tied with 2016, while the National Oceanic and Atmospheric Administration put the figure just behind 2016’s totals.

No matter the ranking, the big picture for the climate isn’t pretty according to scientists from NASA’s Goddard Institute for Space Studies (GISS) in New York and the Washington, DC-based NOAA.

“The last seven years have been the warmest seven years on record, typifying the ongoing and dramatic warming trend,” said GISS Director Gavin Schmidt, in a statement. “Whether one year is a record or not is not really that important – the important things are long-term trends. With these trends, and as the human impact on the climate increases, we have to expect that records will continue to be broken.”

That’s a dire message for the nation considering the cost of last year’s record-breaking 22 weather and climate disasters. At least 262 people died and scores more were injured by climate-related disasters, according to the NOAA.

And the combination of wildfires, droughts, heatwaves, tornados, tropical cyclones, and severe weather events like hail storms in Texas and the derecho that wrecked the Midwest cost the nation $95 billion.

Homes are engulfed in flames in Vacaville, California during the LNU Lightning Complex fire on August 19, 2020.

Homes are engulfed in flames in Vacaville, California during the LNU Lightning Complex fire on August 19, 2020. – As of the late hours of August 18,2020 the Hennessey fire has merged with at least 7 fires and is now called the LNU Lightning Complex fires. Dozens of fires are burning out of control throughout Northern California as fire resources are spread thin. (Photo by JOSH EDELSON/AFP via Getty Images)

Both organizations track temperature trends to get some sort of picture of the impact that human activities — specifically greenhouse gas emissions — have on the planet. The image that comes into focus is that human activity has already contributed to increasing Earth’s average temperature by more than 2 degrees Fahrenheit since the industrial age took hold in the late 19th century.

Most troubling to scientists is that this year’s near record-setting temperatures happened without a boost from the climatic weather phenomenon known as El Niño, which is a large-scale ocean-atmosphere climate interaction linked to a periodic warming.

“The previous record warm year, 2016, received a significant boost from a strong El Niño. The lack of a similar assist from El Niño this year is evidence that the background climate continues to warm due to greenhouse gases,” Schmidt said, in a statement.

The warming trends the word is experiencing are most pronounced in the Arctic, according to NASA. There, temperatures have warmed three times as a fast as the rest of the globe over the past 30 years, Schmidt said. The loss of Arctic sea ice — whose annual minimum area is declining by about 13 percent per decade — makes the region less reflective, which means more sunlight is being absorbed by oceans, causing temperatures to climb even more.

These accelerating effects of climate change could be perilous for the world at large, Katharine Hayhoe, a professor at Texas Tech University wrote in an email to The Washington Post.

“What keeps us climate scientists up in the dead of night is wondering what we don’t know about the self-reinforcing or vicious cycles in the Earth’s climate system,” Hayhoe wrote. “The further and faster we push it beyond anything experienced in the history of human civilization on this planet, the greater the risk of serious and even dangerous consequences. And this year, we’ve seen that in spades… It’s no longer a question of when the impacts of climate change will manifest themselves: They are already here and now. The only question remaining is how much worse it will get.”

Beyond Meat shares soar after inking deal with Taco Bell on new menu items

By Jonathan Shieber

Shares of Beyond Meat are soaring on news that the company will be working with Taco Bell on new menu items.

The company’s stock was up $17.13, or 13.67%, to $142.48 and climbing in midday trading after Taco Bell announced that it would embrace Beyond Meat to come up with new menu items due to be tested in the next year.

The decision from Taco Bell, a subsidiary of Yum Brands, is a departure from the Mexican fast food chain’s commitment to go it alone as it developed new vegetarian menu items.

“We’ve looked. We’ve met with Beyond, we’ve met with Impossible — our head of innovation knows everybody, and they all know her,” Julie Felss Masino, Taco Bell’s president of North American operations, told CNBC back in 2019. “But I think what we’re proud of is that we’ve been doing vegetarian for 57 years.”

Now the company wants más alternative proteins from the Southern California alternative protein provider. “We have long been a leader in the vegetarian space, but this year, we have more meatless options in store that vegetarians, veggie-curious and even meat-eaters will love,” said Liz Matthews, Taco Bell’s Global Chief Food Innovation Officer. 

Taco Bell boasts that it already has over 30 vegetarian ingredients on the U.S. menu, but its lack of protein alternatives was noticeable, as many of its competitors embraced the meat substitute craze.

Swimm raises $5.7M to help teams document their code

By Frederic Lardinois

Most developers don’t enjoy writing documentation for their code and that makes life quite a bit harder when a new team member tries to get started on working on a company’s codebase. And even when there are documentation or in-line comments in the source code, that’s often not updated and over time, that information becomes close to irrelevant. Swimm, which today announced that it has raised a $5.7 million seed round, aims to automate as much of this process as possible after the initial documentation has been written by automatically updating it as changes are made.

The funding round was led by Pitango First, with TAU Ventures, Axon Ventures and Fundfire also investing in this round, together with a group of angel investors that include the founder of developer platform Snyk.

Image Credits: Swimm

Swimm’s marketing mostly focuses on helping teams speed up onboarding, but it’s probably a useful tool for any team. Using Swimm, you can create the standard — but auto-updated — documentation, but also walkthroughs and tutorials. Using its code browser, you can also easily find all of the documentation that relates to a given file.

The nifty part here is that while the tool can’t write the documentation for you, Swimm will automatically update any code examples in the documentation for you — or alert you when there is a major change that needs a manual update. Ideally, this will reduce the drift between the codebase and documentation.

Image Credits: Swimm

The founding team, Oren Toledano (CEO), Omer Rosenbaum (CTO), Gilad Navot (Chief Product Officer) and Tom Ahi Dror (Chief Business Officer), started working on this problem based on their experience while running Israel Tech Challenge, a coding bootcamp inspired by the training program used by the Israeli Defence Forces’ 8200 Intelligence Unit.

“We met with many companies in Israel and in the US to understand the engineering onboarding process,” Toledano told me. “And we felt that it was kind of broken — and many times, we heard the sentence: ‘we throw them to the water, and they either sink or swim.'” (That’s also why the company is called Swimm). Companies, he argues, often don’t have a way to train new employees on their code base, simply because it’s impossible for them to do so effectively without good documentation.

“The larger the company is, the more scattered the knowledge on the code base is — and a lot of this knowledge leaves the company when developers leave,” he noted.

With Swimm, a company could ideally not just offer those new hires access to tutorials that are based on the current code base, but also an easier entryway to start working on the production codebase as well.

Image Credits: Swimm

One thing that’s worth noting here is that developers run Swimm locally on a developer’s machine. In part, that’s because this approach reduces the security risks since no code is ever sent to Swimm’s servers. Indeed, the Swimm team tells me that some of its early customers are security companies. It also makes it easier for new users to get started with Swimm.

Toledano tells me that while the team mostly focused on building the core of the product and working with its early design partners (and its first set of paying customers), the plan for the next few months is to bring on more users after launching the product’s beta.

“Software development is now at the core of every modern business. Swimm provides a structured, contextual and transparent way to improve developer productivity,” said Yair Cassuto, a partner at Pitango First who is joining Swimm‘s board. “Swimm’s solution allows for rapid and insightful onboarding on any codebase. This applies across the developer life cycle: from onboarding to project transitions, adopting new open source capabilities and even offboarding.”                                                                                   

UK on-demand supermarket Weezy raises $20M Series A led by NYC’s Left Lane Capital

By Mike Butcher

Weezy — an on-demand supermarket that delivers groceries in fast times such as 15 minutes — has raised $20 million in a Series A funding led by New York-based venture capital fund Left Lane Capital. Also participating were UK-based fund DN Capital, earlier investors Heartcore Capital and angel investors, notably Chris Muhr, the Groupon founder.

Although the company hasn’t made mention of a later US launch, the presence of US investors would tend to suggest that. Weezy is reminiscent of Kozmo, the on-demand groceries business from the dotcom boom of the late ’90s. However, it differs from Postmates in that it doesn’t do pickups.

The cash injection will be used to expand its grocery delivery service across London and the broader UK, and open two fulfillment centers across London. Some 40 more UK sites are planned by the end of 2021 and it plans to add 50 new employees in the next 4 months.

Launched in July 2020, Weezy uses its own delivery people on pedal cycles or electric mopeds to deliver goods in less than 15 minutes on average. As well as working with wholesalers, it also sources groceries from independent bakers, butchers and markets.

It has pushed at an open door during the pandemic. In Q2 2020 half a million new shoppers joined the grocery delivery sector, which is now worth £14.3bn in the UK, according to research.

Kristof Van Beveren, Co-founder and CEO of Weezy, said in a statement: “People are no longer happy to wait around for deliveries, and there is strong demand for a more efficient service.”

Weezy’s co-founders are Kristof Van Beveren and Alec Dent. Van Beveren is formerly from the consumer goods world at Procter & Gamble and McKinsey & Company, while Dent headed up operations at UK startup Drover and business development at BlaBlaCar.

Harley Miller, managing partner, Left Lane Capital, commented: “Weezy’s founding team have the right balance of drive, experience and temperament to lead in e-commerce innovation
and convenience within the UK grocery market and beyond.”

Nenad Marovac, founder and managing partner, DN Capital, said: “Even before the pandemic, interest in online grocery shopping was on the rise. The first time I ordered from Weezy, my delivery arrived in seven minutes and I was hooked.”

Zocdoc founder returns with Shadow, an app that finds lost dogs

By Sarah Perez

Every year, around 10 million pets go missing in the U.S., and millions of those end up in shelters where they aren’t always reunited with their owners, due to their lack of identification or a microchip. A new mobile app, Shadow, aims to tackle this problem by leveraging a combination of a volunteer network and A.I. technology to help dog owners, in particular.

The startup is working in partnership with animal shelters and rescue organizations around the U.S. to pull in photos of the dogs they’re currently housing, then supplements this with photos pulled from social media platforms, like Twitter and Facebook.

It then uses A.I. technology to match the photograph of the missing dogs to possible matches from nearby shelters or the web.

Image Credits: Shadow

If there’s not a match found, Shadow will then programmatically set a search radius based on where and when the dog went missing, and suggest other actions that the dog’s owner can take as the next steps.

This includes viewing all the photographs from the shelters directly, in the case that the technology matching process missed a possible match, as well as working with other Shadow users to help crowdsource activities like hanging “Lost Dog” flyers around a neighborhood, for example, among other things.

The app also relies on a network of volunteers who help by also reviewing shelter photographs and broadcasting missing posters to social media sites they use to increase the chances of the dog being found. Dog owners can even advertise a reward in the app to encourage people to help search.

Today, Shadow has grown its volunteer user base to over 30,000. And it’s partnered with the ASPCA, Animal Care Centers of New York and L.A., the Dallas shelter system, and others.

Image Credits: Shadow

While Shadow is free to use, it makes money through a virtual tipping mechanism when it makes a successful match and the dog is found. It also offers users the ability to buy an Instagram ad in-app for $10. Here, Shadow provides the visual assets and manages the ad-buying process and placement process on owners’ behalf.

The startup, founded by former Zocdoc founder Cyrus Massoumi, has been in a sort of public stealth mode for a few years as it grew beyond its hometown of New York. It’s now offering dog-finding services in 76 counties across 20 U.S. states.

We should note that Massoumi’s exit from Zocdoc was complicated. He sued his co-founders and CFO for orchestrating a plot to oust him from the company during a Nov. 2015 board meeting, claiming fraud. The lawsuit detailed the internal strife inside Zocdoc at the time. A New York Supreme Court judge recently determined this lawsuit, which is ongoing, needs to be filed in Delaware, instead of New York. So a ruling is yet to be determined.

Ahead of this, Zocdoc had been accused by Business Insider of having developed a stressful,  “bro culture,” in which young, male employees would make inappropriate remarks about the women who worked there. This was ahead of the larger rise of the Me Too movement, which has since impacted how businesses address these issues in the workplace.

Massoumi disputes the claims were exactly as described by the article. The company had 300 salespeople at the time, and while he agrees some people may have acted inappropriately, he also believes company’s response to those actions was handled properly.

“The allegations were fully investigated at Zocdoc and found to be without merit,” he told TechCrunch, adding that Zocdoc was repeatedly recognized as a “best place to work” while he was CEO.

Shadow today claims a different makeup. It has a team twelve people, and two-thirds of its product and engineering team are women. Some Zocdoc investors have also returned to back Massoumi again.

The startup is funded by Founders Fund, Humbition (Massoumi and Indiegogo founder Slava Rubin’s fund), Lux Capital, firstminute Capital, and other angels, including a prior Zocdoc

Despite the complicated Zocdoc history, the work Shadow is doing is solving a problem many people do care about. Millions of pet owners lose their pets to euthanization as they end up at shelters that cannot keep animals indefinitely due to lack of space. Meanwhile, the current system of having lost pet messages distributed across social media can mean many of those posts aren’t seen — especially in larger metros where there are numerous “lost pet” groups.

Image Credits: Shadow

 

 

As Shadow began its work in 2018, it was local to the New York area. Its first year, it reunited 600 dogs. The next year, it reunited 2,000 dogs. The third year, it reunited 5,000 dogs. Today, it’s nearing 10,000 dogs reunited with owners.

More than half of those were since the pandemic began, which saw many new pet owners and increased time spent outdoors with those pets, when dogs can sometimes get loose.

Massoumi says he was inspired to found Shadow after a friend lost his own dog, the namesake Shadow. It took the friend over a month to find the dog after both following false leads and being connected with people who tried to help him.

“I’m thinking to myself, this is something that happens 100 million times a year, globally…and for people who love pets, this is a lost family member,” Massoumi explains. “It seemed to me to be a similar problem that I’d already been solving in healthcare, where there’s fragmentation — people want to see the doctor and the doctor wants to see the patient, but there’s just not a central way to make it work,” he says.

More broadly, he wants to see technology being put to good use to solve problems that people actually care about.

“I think there needs to be more technology that injects the humanity back in what everyone does. I think that it’s very core that’s what we’re doing,” he says.

Shadow’s app is a free download on iOS and Android.

TikTok update will change privacy settings and defaults for users under 18

By Sarah Perez

TikTok announced today it’s making changes to its app to make the experience safer for younger users. The company will now set the accounts for users ages 13 to 15 to private by default, as well as tighten other controls for all users under 18, in terms of how they can interact with other users and TikTok content itself. TikTok is also announcing a partnership with nonprofit Common Sense Networks, an education and advocacy group that helps parents and educators navigate today’s media landscape, including children’s use of technology.

The partnership will see Common Sense Networks working with TikTok to provide additional guidance on the appropriateness of its content for users under 13.

The social video app in 2019 had been fined $5.7 million by the Federal Trade Commission (FTC) for violating U.S. children’s privacy laws. The FTC had begun looking into the app back when it was known as Musical.ly. The earlier version, prior to its acquisition by ByteDance, had collected personal information for children under 13 without parents’ consent.

As a result of that ruling, TikTok created a new, legally compliant experience for younger users in the U.S. with age-appropriate content and no ability to publish videos.

Now, TikTok will restrict the experience for other minors using the app who are over 13, too.

For children ages 13 to 15, accounts will be set to private by default and TikTok will turn the setting “Suggest your account to others” to Off. This will allow users’ videos to only be seen by those they approve as a follower and limits their account from being recommended to others elsewhere in the app.

Commenting controls are also being locked down for these users.

They’ll now be able to choose between “Friends” or “No One” in terms of who can comment on their videos, and the “Everyone” option will be removed. The Dueting and Stitching features will also be removed, which limits how these younger users can engage with other TikTok users and their content. They won’t be able to make their videos downloadable either.

For those ages 16 to 17, the default setting for Duet and Stitch will be set to “Friends,” and they’ll only be able to download videos created by users 16 and over as a result of the lockdowns for younger users. Downloads for their own videos will also be set to Off by default, but they can enable this, if they choose.

TiTok had already restricted younger users’ accounts before today in various ways, including not only through the under-13 age gated experience, but also by restricting direct messaging and hosting live streams to accounts 16 and over, and restricting virtual gifts to users over 18. Parents additionally have had the option to control their child’s experience through the Family Pairing feature, which offers parental controls and screen time limits, among other things.

Of course, any of these restrictions can be worked around for those who lie about their age upon sign-up. But it’s still fairly unusual for a large social network to do more than look the other way when it knows that minors are on its app.

In TikTok’s case, however, it has a large underage user base — some estimates had said that 41% of TikTok is between ages 16 and 24. But in the U.S., TikTok has attracted a particularly large teenage userbase. The company said in 2020 that 60% of its 26.5 million monthly active users in the U.S. were between 16 and 24. Even some of TikTok’s biggest stars, like Charli D’Amelio, are still just teenagers.

The attention to minor safety and parental controls gathered TikTok praise from notable youth safety experts, which the company also shared.

Today, TikTok is touting praise it’s received from the National PTA, ConnectSafely, NCMEC, Family Online Safety Institute, and WeProtect Global Alliance. The groups believe the changes will help teens be able to use the app more safely, responsibility, and without the further risk of exploitation.

“We couldn’t be more pleased about partnering with TikTok to develop better content experiences for users under the age of 13,” added Eric Berger, CEO of Common Sense Networks, in reference to his organization’s partnership with the social video platfrom. “At Common Sense Networks, we see this engagement as an opportunity to double down on our commitment to elevate the quality of children’s digital media so that age-appropriate content is the rule in our industry and not the exception,” he said.

The changes will roll out starting today.

 

App stores saw record 218 billion downloads in 2020, consumer spend of $143 billion

By Sarah Perez

Mobile adoption continued to grow in 2020, in part due to the market forces of the COVID-19 pandemic. According to App Annie’s annual “State of Mobile” industry report, mobile app downloads grew by 7% year-over-year to a record 218 billion in 2020. Meanwhile, consumer spending grew by 20% to also hit a new milestone of $143 billion, led by markets that included China, the United States, Japan, South Korea and the United Kingdom.

Consumers also spent 3.5 trillion minutes using apps on Android devices alone, the report found.

In another shift, app usage in the U.S. surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours on their mobile device.

The increase in time spent is a trend that’s not unique to the U.S., but can be seen across several other countries, including both developing mobile markets like Indonesia, Brazil and India, as well as places like China, Japan, South Korea, the U.K., Germany, France and others.

The trend isn’t isolated to any one demographic, either, but is seen across age groups. In the U.S., for example, Gen Z, millennials and Gen X/Baby Boomers spent 16%, 18% and 30% more time in their most-used apps year-over-year, respectively. However, what those favorite apps looked like was very different.

For Gen Z in the U.S., top apps on Android phones included Snapchat, Twitch, TikTok, Roblox and Spotify.

Millennials favored Discord, LinkedIn, PayPal, Pandora and Amazon Music.

And Gen X/Baby Boomers used Ring, Nextdoor, The Weather Channel, Kindle and ColorNote Notepad Notes.

The pandemic didn’t necessarily change how consumers were using apps in 2020, but rather accelerated mobile adoption by two to three years’ time, the report found.

Investors were also eager to fuel mobile businesses as a result, pouring $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year. According to Crunchbase data, 26% of total global funding dollars in 2020 went to businesses that included a mobile solution.

From 2016 to 2020, global funding to mobile technology companies more than doubled compared with the previous five years, and was led by financial services, transportation, commerce and shopping.

Mobile gaming adoption also continued to grow in 2020. Casual games dominated the market in terms of downloads (78%), but Core games accounted for 66% of games’ consumer spend and 55% of the time spent.

With many stuck inside due to COVID-19 lockdowns and quarantines, mobile games that offered social interaction boomed. Among Us, for example, became a breakout game in several markets in 2020, including the U.S.

Other app categories saw sizable increases over the past year, as well.

Time spent in Finance apps in 2020 was up 45% worldwide, outside of China, and participation in the stock market grew 55% on mobile, thanks to apps like Robinhood in the U.S. and others worldwide, that democratized investing and trading.

TikTok had a big year, too.

The app saw incredible 325% year-over-year growth, despite a ban in India, and ranked in the top five apps by time spent. The average monthly time spent per user also grew faster than nearly every other app analyzed, including 65% in the U.S. and 80% in the U.K., surpassing Facebook. TikTok is now on track to hit 1.2 billion active users in 2021, App Annie forecasts.

Other video services boomed in 2020, thanks to a combination of new market entrants and a lot of time spent at home. Consumers spent 40% more hours streaming on mobile devices, with time spent in streaming apps peaking in the second quarter in the west as the pandemic forced people inside.

YouTube benefitted from this trend, as it became the No. 1 streaming app by time spent among all markets analyzed except China. The time spent in YouTube is up to 6x that of the next closet app at 38 hours per month.

Of course, another big story for 2020 was the rise of e-commerce amid the pandemic. This made the past year the biggest ever for mobile shopping, with an over 30% increase in time spent in Shopping apps, as measured on Android phones outside of China.

Mobile commerce, however, looked less traditional in 2020.

Social shopping was a big trend, with global downloads of Pinterest and Instagram growing 50% and 20% year-over-year, respectively.

Livestreaming shopping grew, too, led by China. Downloads of live shopping TaoBao Live in China, Grip in South Korea and NTWRK in the U.S. grew 100%, 245% and 85%, respectively. NTWRK doubled in size last year, and now others are entering the space as well — including TikTok, to some extent.

The pandemic also prompted increased usage of mobile ordering apps. In the U.S., Argentina, the U.K., Indonesia and Russia, the app grew by 60%, 65%, 70%, 80% and 105%, respectively, in Q4.

Business apps, like Zoom and Google Meet among others, grew 275% in Q4, for example, as remote work and sometimes school, continued.

The analysis additionally included lists of the top apps by downloads, spending and monthly active users (MAUs).

Although TikTok had been topping year-end charts, Facebook continued to beat it in terms of MAUs. Facebook-owned apps controlled the top charts by MAUs, with Facebook at No. 1 followed by WhatsApp, Messenger and Instagram.

TikTok, however, had more downloads than Facebook and ranked No. 2 by consumer spending, behind Tinder.

The full report is available only as an online interactive experience this year, not a download. The report largely uses data from both the iOS App Store and Google Play, except where otherwise noted.

Uber and Moderna partner on COVID-19 vaccine access and information

By Darrell Etherington

Uber and pharmaceutical company Moderna have announced a partnership around COVID-19 vaccination, which will include a number of different initiatives. To start, it’s only confirmed component is to provide users with credible, factual information about COVID-19 vaccine safety through Uber’s consumer app, but the companies have also discussed additional “options” including building ride scheduling via Uber directly into the immunization appointment booking process.

Still in its early days, the U.S. COVID-19 vaccination program is already beset with challenges, including providing timely access to vaccines to swaths of the population who need it most. The inoculation program also has to contend with significant misinformation proliferating on social media about vaccine safety, and any app with the surface area of something like Uber has a chance to get positive messages and accurate information in front of a lot of people, so that’s good news on its own.

But one of the very real challenges to an effective vaccination campaign remains logistical, and getting people to make their initial and follow-up appointments for the first round of the Moderna vaccine, and its second shot booster, is a bigger challenge than many might suspect. I spoke to Healthvana CEO Ramin Bastani about their work with  LA County on creating an immunization record that integrates with Apple Wallet to provide patients with timely info and reminders about vaccination appointments, but integrating a ride-booking service or appointment reminder directly in the Uber app that most users already have on their phone anyway could be another very effective way to increase success rates for first and follow-up inoculation visits.

Uber has already offered up free and discounted rides to help lower the friction of actually going out and getting a vaccine, but a product-level integration could do a lot more than that by providing easy, user-friendly access. As noted, this is still just one of the options being discussed, but if Uber and Moderna are willing to commit it to print, that at least means they’re serious about trying to find a way. We’re holding them to account, too, so rest assured we’ll follow up on their progress as this collaboration develops.

Amazon is removing products promoting the QAnon conspiracy

By Jonathan Shieber

Amazon has begun the process of removing QAnon-related products from its platform.

A spokesperson for the company said that the process may take a few days. Any sellers that attempt to evade the company’s systems and list products will be subject to action, including a blanket selling ban across Amazon stores.

News of the ban was first reported by The New York Times.

The company is shutting down the nation’s newest favorite conspiracy theory by removing products sold by QAnon adherents from its platform after supporters were prominently on display at the riot in the nation’s Capitol last week.

Amazon’s ban of Q-related products follows the company’s decision to remove Parler from its web servers and cloud services platform.

The ban applies to any self-published books that promote QAnon or any clothing, posters, stickers, or other merchandise related to the Q conspiracy theory.

Amazon has policies that prohibit products that “promote, incite, or glorify hate or violence toward any person or group,” the company said.

A cursory search of the company’s platform on Monday revealed that the ban isn’t being applied to all of the Q-related products for sale.

Seven pages of Q-related products were surfaced under the search for “WWG1WGA” an acronym for the Q-related phrase, “Where we go one, we go all.”

The widely discredited Q conspiracy theory was born from a stew of different conspiracy theories that emerged from the 4chan message boards back in 2017.

Since its emergence, the conspiracy theory has grabbed the attention of conservative activists, and its supporters were highly visible among the group of rioters that stormed the Capitol building last week — even as at least one Q-believer joined Congress the same week.

Amazon’s decision to ban the sale of Q-related goods comes many, many, many years after the movement was first linked to violence, as TechCrunch previously reported.

Criminal acts committed by believers have included the fatal shooting a mob boss in Staten Island and blocking the Hoover Dam bridge in an armed standoff.

The conspiracy’s followers have also interfered with legitimate child safety efforts by hijacking the hashtag #savethechildren, and exporting their extreme ideas into mainstream conversation under the guise of helping children. Facebook, which previously banned QAnonlimited the hashtag’s reach in late 2020 because of the interference.

Sneaker enthusiast group SoleSavy raises $2M, setting the stage for a community-driven commerce boom

By Matthew Panzarino

SoleSavy, a community built around buying hot sneakers and related items that are increasingly hard to acquire at retail, raised $2 million in a round that closed late last year. SoleSavy is a group of communities that is currently mostly hosted on Slack. 

SoleSavy’s co-founders Dejan Pralica and Justin Dusanj founded the company in 2018 as a paid community for collectors and enthusiasts seeking pairs that were getting snapped up by bots or resellers. Pralica previously co-founded Kicks Deals, a sneaker shipping site focused on less than retail pricing and Dusanj is the former director of Operations at New Age Sports, a Nike retailer. 

SoleSavy’s $2 million party raise includes investment from Panache Ventures, Jason Calacanis’ LAUNCH, Turner Novak, Ben Narasin, Morning Brew’s Alex Lieberman and Austin Rief, Tiny Capital, Wesley Pentz (yes, Diplo), Matthew Hauri aka Yung Gravy, Ryan Holmes, Roham Gharegozlou and Bedrock Capital.

SoleSavy has built an engaged community (several communities, really) around the ebb and flow of the sneakerhead consumer universe (SCU). I just coined that, by the way, please make it a thing. The SCU is an interesting place filled with fascinating characters and behaviors. Every once in a while it pokes its head into the mainstream, whether via a documentary, a hot shoe release or a strong-arm robbery attempt. In 2021, I believe that we will see more of this world breaking out of its box into the larger consumer consciousness. 

The trends that are leading us to this place are varied, but some of them have been front and center during the pandemic, as a decade’s worth of consumer behavioral change has occurred in the space of a few months. You only have to look at how hard it was to get a PS5 or Xbox One X or a GPU for the holiday season, and how many services, Twitter accounts and monitor groups rose up to try to help people do that to see what the future of shopping looks like. 

I joked about not being able to buy butter without a bot, but it’s not far from the truth — nearly every category of goods has had its own shortages over the last year. But the mother of all limited goods category for decades now has been sneakers. 

Every release is hotly anticipated and eagerly purchased by people looking for the latest shoe. The massive increase in interest in the sneaker as the marquee desirable item and the unwillingness of the biggest manufacturers to lose the hype halo has led to each drop being harder to get than the last. Second-market startups like StockX and GOAT have sprung up to facilitate those who don’t mind paying 30%-200% premiums on each release. 

The solution for many lies in the countless “cook groups” that help buyers anticipate demand and stock for each drop and plan to purchase them on release date. 

SoleSavy’s function is ostensibly to do just that: help regular enthusiasts to strategize and execute the release-day cop. But beyond that, Pralica says that the group has come to be about the community of people around those shoes more than the purchase itself. 

Image Credits: SoleSavy

SoleSavy is at its heart a Slack group (a series of groups actually that act as cohorts, leading people through the tiers of community that the team has built) with rooms that help people to understand what’s happening in sneakers, get the releases and commiserate around the culture. Pralica says that they’ve built that community out slowly (the waitlist for the group grows by 400 people per day) in order to maintain a positive atmosphere and to properly onboard new people to the group. They also have an app that drives push notifications and a podcast. 

That positive community vibe is what Pralica says is SoleSavy’s long-term focus and differentiating factor that keeps the 4,000 members across the U.S. and Canada interacting with the group on a nearly daily basis.

I’ve been in a dozen or so different groups focused on buying large quantities of each release to re-sell over the years and many of them are, at best, rowdy and at worst toxic. That’s an environment that SoleSavy wanted to stay away from, says Pralica. Instead, SoleSavy tries to court those who want to buy and wear the shoes, trade them and yes, maybe even resell personal pairs eventually to obtain and wear another grail.

Though cook groups have been the “core” of the Discord and Slack-based communities in the sneaker world, other iterations have been booming too. Entrepreneurial communities based in the same hustle principles like Tyler Blake’s In This Economy and fanbase-focused groups around popular streamers top the Disboard. And bets on social token outfits like Zora are also focused on community as the glue that holds together a user base. 

Community is the future of all commerce, whether you’re looking for a specific product (see the huge PS5 monitors) or want to steep yourself in a particular universe of product interest (the SCU). The trends that I’ve been seeing all point to 2021 being the year that community-driven purchasing breaks out of the underbelly of fandom and becomes officially “a thing.”

Image Credits: SoleSavy

SoleSavy has been experimenting with a variety of ways to keep the community knit going, including live chats, get-togethers and even a handsome custom community-designed Jordan 1. These efforts have driven the previously bootstrapped company to some impressive early numbers. Pralica says that SoleSavy is currently profitable, with $1.5 million ARR on $33 monthly subscriptions plus affiliate revenue and that their DAUs are at 90% — an engagement number that would make any retailer salivate. 

Though the funding closed (very) late last year I thought that this would be a great kick-off story for the year ahead. Though SoleSavy seems to have a really compelling story and a great growth curve, I think they’re at the tip of a very large trend, one that we will see continue to build throughout the year. 

 

Parler jumps to No. 1 on App Store after Facebook and Twitter ban Trump

By Jonathan Shieber

Users are surging on small, conservative, social media platforms after President Donald Trump’s ban from the world’s largest social networks, even as those platforms are seeing access throttled by the app marketplaces of tech’s biggest players.

The social network, Parler, a network that mimics Twitter, is now the number one app in Apple’s app store and Gab, another conservative-backed service, claimed that it was seeing an explosion in the number of signups to its web-based platform as well.

Parler’s ballooning user base comes at a potentially perilous time for the company. It has already been removed from Google’s Play store and Apple is considering suspending the social media app as well if it does not add some content moderation features.

Both Parler and Gab have billed themselves as havens for free speech, with what’s perhaps the most lax content moderation online. In the past the two companies have left up content posted by an alleged Russian disinformation campaign, and allow users to traffic in conspiracy theories that other social media platforms have shut down.

The expectation with these services is that users on the platforms are in charge of muting and blocking trolls or offensive content, but, by their nature, those who join these platforms will generally find themselves among like-minded users.

Their user counts might be surging, but would-be adopters may soon have a hard time finding the services.

On Friday night, Google said that it would be removing Parler from their Play Store immediately — suspending the app until the developers committed to a moderation and enforcement policy that could handle objectionable content on the platform.

In a statement to TechCrunch, a Google spokesperson said:

“In order to protect user safety on Google Play, our longstanding policies require that apps displaying user-generated content have moderation policies and enforcement that removes egregious content like posts that incite violence. All developers agree to these terms and we have reminded Parler of this clear policy in recent months. We’re aware of continued posting in the Parler app that seeks to incite ongoing violence in the US. We recognize that there can be reasonable debate about content policies and that it can be difficult for apps to immediately remove all violative content, but for us to distribute an app through Google Play, we do require that apps implement robust moderation for egregious content. In light of this ongoing and urgent public safety threat, we are suspending the app’s listings from the Play Store until it addresses these issues.“

On Friday, Buzzfeed News reported that Parler had received a letter from Apple informing them that the app would be removed from the App Store within 24 hours unless the company submitted an update with a moderation improvement plan. Parler CEO John Matze confirmed the action from Apple in a post on his Parler account where he posted a screenshot of the notification from Apple.

“We want to be clear that Parler is in fact responsible for all the user generated content present on your service and for ensuring that this content meets App Store requirements for the safety and protection of our users,” text from the screenshot reads. “We won’t distribute apps that present dangerous and harmful content.

Parler is backed by the conservative billionaire heiress Rebekah Mercer, according to a November report in The Wall Street Journal. Founded in 2018, the service has experienced spikes in user adoption with every clash between more social media companies and the outgoing President Trump. In November, Parler boasted some 10 million users, according to the Journal.

Users like Fox Business anchor Maria Bartiromo and the conservative talk show host Dan Bongino, a wildly popular figure on Facebook who is also an investor in Parler, have joined the platform. In the Journal article Bongino called the company “a collective middle finger to the tech tyrants.”

It’s worth noting that Parler and Gab aren’t the only companies to see users numbers soar after the Trump bans. MeWe Network, OANN, Newsmax and Rumble have also seen adoption soar, according to data from the analytics company Apptopia.

The company noted that Parler was the #1 app on the iOS app store for two days surging from 18th on Thursday and 592 on Wednesday. Overall, the app was the 10th most downloaded social media app in 2020 with 8.1 million new installs.

“It is an event driven app though,” a company analyst noted. “After events like the election, BLM protests, Twitter first applying labels to Trump’s Tweets, we see bursts of downloads and usage but it will then drop off.”

Sarah Perez and Lucas Matney contributed additional reporting to this article. 

 

Extra Crunch roundup: 2 VC surveys, Tesla’s melt up, The Roblox Gambit, more

By Walter Thompson

This has been quite a week.

Instead of walking backward through the last few days of chaos and uncertainty, here are three good things that happened:

  • Google employee Sara Robinson combined her interest in machine learning and baking to create AI-generated hybrid treats.
  • A breakthrough could make water desalination 30%-40% more effective.
  • Bianca Smith will become the first Black woman to coach a professional baseball team.

Despite many distractions in our first full week of the new year, we published a full slate of stories exploring different aspects of entrepreneurship, fundraising and investing.

We’ve already gotten feedback on this overview of subscription pricing models, and a look back at 2020 funding rounds and exits among Israel’s security startups was aimed at our new members who live and work there, along with international investors who are seeking new opportunities.

Plus, don’t miss our first investor surveys of 2021: one by Lucas Matney on social gaming, and another by Mike Butcher that gathered responses from Portugal-based investors on a wide variety of topics.

Thanks very much for reading Extra Crunch this week. I hope we can all look forward to a nice, boring weekend with no breaking news alerts.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


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Use discount code ECFriday to save 20% off a one- or two-year subscription


The Roblox Gambit

In February 2020, gaming platform Roblox was valued at $4 billion, but after announcing a $520 million Series H this week, it’s now worth $29.5 billion.

“Sure, you could argue that Roblox enjoyed an epic 2020, thanks in part to COVID-19,” writes Alex Wilhelm this morning. “That helped its valuation. But there’s a lot of space between $4 billion and $29.5 billion.”

Alex suggests that Roblox’s decision to delay its IPO and raise an enormous Series H was a grandmaster move that could influence how other unicorns will take themselves to market. “A big thanks to the gaming company for running this experiment for us.”

I asked him what inspired the headline; like most good ideas, it came to him while he was trying to get to sleep.

“I think that I had ‘The Queen’s Gambit’ somewhere in my head, so that formed the root of a little joke with myself. Roblox is making a strategic wager on method of going public. So, ‘gambit’ seems to fit!”

8 investors discuss social gaming’s biggest opportunities

girl playing games on desktop computer

Image Credits: Erik Von Weber (opens in a new window) / Getty Images

For our first investor survey of the year, Lucas Matney interviewed eight VCs who invest in massively multiplayer online games to discuss 2021 trends and opportunities:

  • Hope Cochran, Madrona Venture Group
  • Daniel Li, Madrona Venture Group
  • Niko Bonatsos, General Catalyst
  • Ethan Kurzweil, Bessemer Venture Partners
  • Sakib Dadi, Bessemer Venture Partners
  • Jacob Mullins, Shasta Ventures
  • Alice Lloyd George, Rogue
  • Gigi Levy-Weiss, NFX

Having moved far beyond shooters and sims, platforms like Twitch, Discord and Fortnite are “where culture is created,” said Daniel Li of Madrona.

Rep. Alexandria Ocasio-Cortez uses Twitch to explain policy positions, major musicians regularly perform in-game concerts on Fortnite and in-game purchases generated tens of billions last year.

“Gaming is a unique combination of science and art, left and right brain,” said Gigi Levy-Weiss of NFX. “It’s never just science (i.e., software and data), which is why many investors find it hard.”

How to convert customers with subscription pricing

Giant hand and magnet picking up office and workers

Image Credits: C.J. Burton (opens in a new window) / Getty Images

Startups that lack insight into their sales funnel have high churn, low conversion rates and an inability to adapt or leverage changes in customer behavior.

If you’re hoping to convert and retain customers, “reinforcing your value proposition should play a big part in every level of your customer funnel,” says Joe Procopio, founder of Teaching Startup.

What is up with Tesla’s value?

Elon Musk, founder of SpaceX and chief executive officer of Tesla Inc., arrives at the Axel Springer Award ceremony in Berlin, Germany, on Tuesday, Dec. 1, 2020. Tesla Inc. will be added to the S&P 500 Index in one shot on Dec. 21, a move that will ripple through the entire market as money managers adjust their portfolios to make room for shares of the $538 billion company. Photographer: Liesa Johannssen-Koppitz/Bloomberg via Getty Images

Image Credits: Bloomberg (opens in a new window) / Getty Images

Alex Wilhelm followed up his regular Friday column with another story that tries to find a well-grounded rationale for Tesla’s sky-high valuation of approximately $822 billion.

Meanwhile, GM just unveiled a new logo and tagline.

As ever, I learned something new while editing: A “melt up” occurs when investors start clamoring for a particular company because of acute FOMO (the fear of missing out).

Delivering 500,000 cars in 2020 was “impressive,” says Alex, who also acknowledged the company’s ability to turn GAAP profits, but “pride cometh before the fall, as does a melt up, I think.”

Note: This story has Alex’s original headline, but I told him I would replace the featured image with a photo of someone who had very “richest man in the world” face.

How Segment redesigned its core systems to solve an existential scaling crisis

Abstract glowing grid and particles

Image Credits: piranka / Getty Images

On Tuesday, enterprise reporter Ron Miller covered a major engineering project at customer data platform Segment called “Centrifuge.”

“Its purpose was to move data through Segment’s data pipes to wherever customers needed it quickly and efficiently at the lowest operating cost,” but as Ron reports, it was also meant to solve “an existential crisis for the young business,” which needed a more resilient platform.

Dear Sophie: Banging my head against the wall understanding the US immigration system

Image Credits: Sophie Alcorn

Dear Sophie:

Now that the U.S. has a new president coming in whose policies are more welcoming to immigrants, I am considering coming to the U.S. to expand my company after COVID-19. However, I’m struggling with the morass of information online that has bits and pieces of visa types and processes.

Can you please share an overview of the U.S. immigration system and how it works so I can get the big picture and understand what I’m navigating?

— Resilient in Romania

The first “Dear Sophie” column of each month is available on TechCrunch without a paywall.

Revenue-based financing: The next step for private equity and early-stage investment

Shot of a group of people holding plants growing out of soil

Image Credits: Hiraman (opens in a new window) / Getty Images

For founders who aren’t interested in angel investment or seeking validation from a VC, revenue-based investing is growing in popularity.

To gain a deeper understanding of the U.S. RBI landscape, we published an industry report on Wednesday that studied data from 134 companies, 57 funds and 32 investment firms before breaking out “specific verticals and business models … and the typical profile of companies that access this form of capital.”

Lisbon’s startup scene rises as Portugal gears up to be a European tech tiger

Man using laptop at 25th of April Bridge in Lisbon, Portugal

Image Credits: Westend61 (opens in a new window)/ Getty Images

Mike Butcher continues his series of European investor surveys with his latest dispatch from Lisbon, where a nascent startup ecosystem may get a Brexit boost.

Here are the Portugal-based VCs he interviewed:

  • Cristina Fonseca, partner, Indico Capital Partners
  • Pedro Ribeiro Santos, partner, Armilar Venture Partners
  • Tocha, partner, Olisipo Way
  • Adão Oliveira, investment manager, Portugal Ventures
  • Alexandre Barbosa, partner, Faber
  • António Miguel, partner, Mustard Seed MAZE
  • Jaime Parodi Bardón, partner, impACT NOW Capital
  • Stephan Morais, partner, Indico Capital Partners
  • Gavin Goldblatt, managing partner, Portugal Gateway

How late-stage edtech companies are thinking about tutoring marketplaces

Life Rings flying out beneath storm clouds are a metaphor for rescue, help and aid.

Image Credits: John Lund (opens in a new window)/ Getty Images

How do you scale online tutoring, particularly when demand exceeds the supply of human instructors?

This month, Chegg is replacing its seven-year-old marketplace that paired students with tutors with a live chatbot.

A spokesperson said the move will “dramatically differentiate our offerings from our competitors and better service students,” but Natasha Mascarenhas identified two challenges to edtech automation.

“A chatbot won’t work for a student with special needs or someone who needs to be handheld a bit more,” she says. “Second, speed tutoring can only work for a specific set of subjects.”

Decrypted: How bad was the US Capitol breach for cybersecurity?

Image Credits: Treedeo (opens in a new window) / Getty Images

While I watched insurrectionists invade and vandalize the U.S. Capitol on live TV, I noticed that staffers evacuated so quickly, some hadn’t had time to shut down their computers.

Looters even made off with a laptop from Senator Jeff Merkley’s office, but according to security reporter Zack Whittaker, the damages to infosec wasn’t as bad as it looked.

Even so, “the breach will likely present a major task for Congress’ IT departments, which will have to figure out what’s been stolen and what security risks could still pose a threat to the Capitol’s network.”

Extra Crunch’s top 10 stories of 2020

On New Year’s Eve, I made a list of the 10 “best” Extra Crunch stories from the previous 12 months.

My methodology was personal: From hundreds of posts, these were the 10 I found most useful, which is my key metric for business journalism.

Some readers are skeptical about paywalls, but without being boastful, Extra Crunch is a premium product, just like Netflix or Disney+. I know, we’re not as entertaining as a historical drama about the reign of Queen Elizabeth II or a space western about a bounty hunter. But, speaking as someone who’s worked at several startups, Extra Crunch stories contain actionable information you can use to build a company and/or look smart in meetings — and that’s worth something.

SilviaTerra wants to bring the benefits of carbon offsets to every landowner everywhere

By Jonathan Shieber

Zack Parisa and Max Nova, the co-founders of the carbon offset company SilivaTerra, have spent the last decade working on a way to democratize access to revenue generating carbon offsets.

As forestry credits become a big, booming business on the back of multi-billion dollar commitments from some of the world’s biggest companies to decarbonize their businesses, the kinds of technologies that the two founders have dedicated ten years of their lives to building are only going to become more valuable.

That’s why their company, already a profitable business, has raised $4.4 million in outside funding led by Union Square Ventures and Version One Ventures, along with Salesforce founder and the driving force between the 1 trillion trees initiative, Marc Benioff .

“Key to addressing the climate crisis is changing the balance in the so-called carbon cycle. At present, every year we are adding roughly 5 gigatons of carbon to the atmosphere*. Since atmospheric carbon acts as a greenhouse gas this increases the energy that’s retained rather than radiated back into space which causes the earth to heat up,” writes Union Square Ventures managing partner Albert Wenger in a blog post. “There will be many ways such drawdown occurs and we will write about different approaches in the coming weeks (such as direct air capture and growing kelp in the oceans). One way that we understand well today and can act upon immediately are forests. The world’s forests today absorb a bit more than one gigatons of CO2 per year out of the atmosphere and turn it into biomass. We need to stop cutting and burning down existing forests (including preventing large scale forest fires) and we have to start planting more new trees. If we do that, the total potential for forests is around 4 to 5 gigatons per year (with some estimates as high as 9 gigatons).”

For the two founders, the new funding is the latest step in a long journey that began in the woods of Northern Alabama, where Parisa grew up.

After attending Mississippi State for forestry, Parisa went to graduate school at Yale, where he met Louisville, Kentucky native Max Nova, a computer science student who joined with Parisa to set up the company that would become SiliviaTerra.

SilviaTerra co-founders Max Nova and Zack Parisa. Image Credit: SilivaTerra

The two men developed a way to combine satellite imagery with field measurements to determine the size and species of trees in every acre of forest.

While the first step was to create a map of every forest in the U.S. the ultimate goal for both men was to find a way to put a carbon market on equal footing with the timber industry. Instead of cutting trees for cash, potentially landowners could find out how much it would be worth to maintain their forestland. As the company notes, forest management had previously been driven by the economics of timber harvesting, with over $10 billion spent in the US each year.

The founders at SilviaTerra thought that the carbon market could be equally as large, but it’s hard for moset landowners to access. Carbon offset projects can cost as much as $200,000 to put together, which is more than the value of the smaller offset projects for landowners like Parisa’s own family and the 40 acres they own in the Alabama forests.

There had to be a better way for smaller landowners to benefit from carbon markets too, Parisa and Nova thought.

To create this carbon economy, there needed to be a single source of record for every tree in the U.S. and while SiliviaTerra had the technology to make that map, they lacked the compute power, machine learning capabilities and resources to build the map.

That’s where Microsoft’s AI for Earth program came in.

Working with AI for Earth, TierraSilva created their first product, Basemap, to process terabytes ofsatellite imagery to determine the sizes and species of trees on every acre of America’s forestland. The company also worked with the US Forestry Service to access their data, which was used in creating this holistic view of the forest assets in the U.S.

With the data from Basemap in hand, the company has created what it calls the Natural Capital Exchange. This program uses SilviaTerra’s unparalleled access to information about local forests, and the knowledge of how those forests are currently used to supply projects that actually represent land that would have been forested were it not for the offset money coming in.

Currently, many forestry projects are being passed off to offset buyers as legitimate offsets on land that would never have been forested in the first place — rendering the project meaningless and useless in any real way as an offset for carbon dioxide emissions. 

“It’s a bloodbath out there,” said Nova of the scale of the problem with fraudulent offsets in the industry. “We’re not repackaging existing forest carbon projects and try to connect the demand side with projects that already exist. Use technology to unlock a new supply of forest carbon offset.”

The first Natural Capital Exchange project was actually launched and funded by Microsoft back in 2019. In it, 20 Western Pennsylvania land owners originated forest carbon credits through the program, showing that the offsets could work for landowners with 40 acres, or, as the company said, 40,000.

Landowners involved in SilivaTerra’s pilot carbon offset program paid for by Microsoft. Image Credit: SilviaTerra

“We’re just trying to get inside every landowners annual economic planning cycle,” said Nova. “There’s a whole field of timber economics… and we’re helping answer the question of given the price of timber, given the price of carbon does it make sense to reduce your planned timber harvests?”

Ultimately, the two founders believe that they’ve found a way to pay for the total land value through the creation of data around the potential carbon offset value of these forests.

It’s more than just carbon markets, as well. The tools that SilviaTerra have created can be used for wildfire mitigation as well. “We’re at the right place at the right time with the right data and the right tools,” said Nova. “It’s about connecting that data to the decision and the economics of all this.”

The launch of the SilviaTerra exchange gives large buyers a vetted source to offset carbon. In some ways its an enterprise corollary to the work being done by startups like Wren, another Union Square Ventures investment, that focuses on offsetting the carbon footprint of everyday consumers. It’s also a competitor to companies like Pachama, which are trying to provide similar forest offsets at scale, or 3Degrees Inc. or South Pole.

Under a Biden administration there’s even more of an opportunity for these offset companies, the founders said, given discussions underway to establish a Carbon Bank. Established through the existing Commodity Credit Corp. run by the Department of Agriculture, the Carbon Bank would pay farmers and landowners across the U.S. for forestry and agricultural carbon offset projects.

“Everybody knows that there’s more value in these systems than just the product that we harvest off of it,” said Parisa. “Until we put those benefits in the same footing as the things we cut off and send to market…. As the value of these things goes up… absolutely it is going to influence these decisions and it is a cash crop… It’s a money pump from coastal America into middle America to create these things that they need.” 

Chris Krebs and Alex Stamos have started a cyber consulting firm

By Zack Whittaker

Former U.S. cybersecurity official Chris Krebs and former Facebook chief security officer Alex Stamos have founded a new cybersecurity consultancy firm, which already has its first client: SolarWinds .

The two have been hired as consultants to help the Texas-based software maker recover from a devastating breach by suspected Russian hackers, which used the company’s software to set backdoors in thousands of organizations and to infiltrate at least 10 U.S. federal agencies and several Fortune 500 businesses.

At least the Treasury Dept., State Dept. and the Department of Energy have been confirmed breached, in what has been described as likely the most significant espionage campaign against the U.S. government in years. And while the U.S. government has already pinned the blame on Russia, the scale of the intrusions are not likely to be known for some time.

Krebs was one of the most senior cybersecurity officials in the U.S. government, most recently serving as the director of Homeland Security’s CISA cybersecurity advisory agency from 2018, until he was fired by President Trump for his efforts to debunk false election claims — many of which came from the president himself. Stamos, meanwhile, joined the Stanford Internet Observatory after holding senior cybersecurity positions at Facebook and Yahoo. He also consulted for Zoom amid a spate of security problems.

In an interview with the Financial Times, which broke the story, Krebs said it could take years before the hackers are ejected from infiltrated systems.

SolarWinds chief executive Sudhakar Ramakrishna acknowledged in a blog post that it had brought on the consultants to help the embattled company to be “transparent with our customers, our government partners, and the general public in both the near-term and long-term about our security enhancements.”

Connecting employer healthcare plans to surgical centers of excellence nets Carrum Health $40 million

By Jonathan Shieber

Six years after launching its service linking employer-sponsored insurance plans with surgical centers of excellence, Carrum Health has raised $40 million in a new round of financing to capitalize on tailwinds propelling its business forward. 

As the COVID-19 pandemic exposes cracks in the U.S. healthcare system, one of the ways that employers have tried to manage the significant costs of insuring employees is by taking on the management of care themselves.

As they shoulder more of the burden, companies like Carrum, which offer services that manage some of the necessary points of care for businesses, at lower costs, are becoming increasingly attractive targets for investors.

That’s why Carrum was able to attract investors led by Tiger Global Management, GreatPoint Ventures and Cross Creek, all firms that joined returning investors Wildcat Venture Partners and SpringRock Ventures in backing the company’s Series A round.

Carrum said the money will go toward sales and marketing to more customers, adding more services and improving its existing technology stack.

Carrum uses machine learning to collect and analyze data on surgical outcomes and care to identify what it considers to be surgical centers of excellence across the U.S.

The company offers self-insured employers the opportunity to buy services directly from surgical centers for a bundled price. That can mean savings of up to 50% on surgical expenses.

Using Carrum, there are no co-pays, deductibles or co-insurance. Instead, Carrum Health’s customers pay a fee and in return receive a 30-day warranty on procedures, meaning that the healthcare provider will cover any costs associated with care from botched operations or complications.

Employees have access to a mobile application that gives them access to virtual care before, during and after surgeries.

“For years, the industry has talked about redesigning healthcare to benefit patients, but the only way to really do that is to tackle the underlying economics of care, a truly difficult task,” said Sach Jain, CEO and founder of Carrum Health, in a statement. “Employers now have a modern, technology-driven solution to help patients get better care without financial headache and we’re not stopping at surgery. In 2021 we’ll be expanding our reach and impact with additional services. It’s such an honor to pave the way for a better healthcare future and we’re so excited for what’s to come.”

Carrum Health’s customers include Quest Diagnostics, US Foods, and other, undisclosed organizations in retail, manufacturing, communications and insurance, the company said.

Centers of excellence on the platform include Johns Hopkins HealthCare, Mayo Clinic and Tenet Healthcare .

 

 

Twitter will reinstate Trump’s account following his deletion of tweets

By Brian Heater

A Twitter spokesperson has confirmed with TechCrunch this morning that Trump has deleted three tweets that led to the temporarily suspension of this account last night.

Twitter locked the account pending deletion of the offending tweets on Wednesday following the riot and siege of the Capitol building in Washington, D.C., and said that the suspension would remain in place so long as the tweets were not removed, and that any further violation of its rules could result in an actual permanent account suspension for Trump.

The President’s account is to remain locked 12 hours after his deletion of the tweets (seen below). While we don’t have exact timing on when the countdown started, he has yet to tweet from the account. The account also still bears the warning that, “this Tweet is no longer available because it violated the Twitter Rules.”

While Trump has previously enjoyed the benefit of a rule Twitter put in place that allowed a special exemption for content that would normally violate its terms of service, but that it would allow to remain in the interest of public access in cases where it comes from accounts with a significant public interest component, like Trump’s while he’s occupying the office of U.S. President.

The three tweets that finally proved a bridge too far for Twitter included a video posted by Trump that called for an end to the violence on Capitol Hill, but that also said “We love you, you’re very special” to the terrorists taking part in the action. The other two included statements that falsely suggested the legitimate results of the most recent U.S. presidential election were somehow fraudulent, including one that suggested the terrorist actions in Washington that resulted were somehow justified.

It’s worth noting that Twitter didn’t actually deleted the offending tweets; the company generally has a policy of removing tweets that violate its terms from public view, and notifying the offending account that they must be deleted by the account holder themselves in order to re-instate the ability to actively use the account.

While Trump does not have access to his own official Twitter account, his deputy chief of staff Dan Scavino posted a statement early Thursday morning about the Electoral Certification process, which was completed in the early hours. The statement again included inciting language falsely disputing the election results, but remains available and untouched by any of Twitter’s flagging measures.

Until this week, most anticipated that Trump would continue to enjoy protections that come with his political status. Yesterday’s move marked a shift for Twitter, but there remains a major question around his status in the remaining two weeks of his Presidential term. Facebook, meanwhile, has taken the opposite action, altogether banning Trump from its platform, for “at least the next two weeks.”

Trump’s ability to maintain his favorite platform will hinge on whether Twitter determines that he has crossed the line one final time.

 

Kanarys raises $3 million for its data-driven platform to assess diversity and inclusion efforts

By Jonathan Shieber

Mandy Price was already a highly successful lawyer in private practice before she took the jump into entrepreneurship alongside two co-founders to launch Kanarys a little over one year ago.

The Harvard Law School graduated didn’t have to start her company, which helps businesses measure the efficacy of their diversity and inclusion efforts using hard data, but she needed to start the company.

Now, a year after its launch, the company counts companies like Yum Brands, the Dallas Mavericks, and Neiman Marcus among the dozen or so companies using its service and has $3 million in seed funding to help it expand.

For Price, the drive to launch Kanarys came from her own experiences working in law. It wasn’t the microagressions, or the lower pay, or casually dismissive attitude of colleagues toward her well-earned success that led Price to start Kanarys, but the knowledge that her experience wasn’t unique and that thousands of other women and minorities faced the same experiences daily.

I have had many things happen to me in the workplace that is similar to what many other women and women of color have dealt with and didn’t want to have my children have to go through similar issues,” Price said. 

So alongside her husband, Bennie King (himself a serial entrepreneur in the Dallas area), and her University of Texas at Austin and Harvard classmate, Star Carter, Price launched Kanarys in late 2019.

The company uses Equal Employment Opportunity reports and assessments of various policies involving promotion, recruitment, and benefits to track how a company is performing in relation to its industry peers.

“A lot of the inequities we see are from a structural and systemic standpoint. That is where Kanarys can see how they’re perpetuating inequity,” Price said. 

Kanarys starts with an independent assessment of a company’s policies and practices and then conducts quarterly surveys with employees of its customers to see how well they are meeting their stated goals and objectives. They also integrate with existing human resources systems to track things like pay equity and promotions.

The service has attracted the attention of the Rise of the Rest fund, Morgan Stanley, Jigsaw Ventures, Segal Ventures and Zeal Capital Partners, which led the company’s $3 million seed round.

“Organizations have typically tried to address this with individual interventions,” said Price. “What we’re saying is we have to address it on both fronts. So much of the inequities that we see are based off of institutional and systemic policies and practices.”

Not only does Kanarys track information on diversity and inclusion efforts for customers, but for job seekers there’s a database of about 1,000 companies which operates like Glassdoor . The focus is not just on worker satisfaction, but on how employees view the diversity efforts their employers are undertaking.

Notably, Kanarys founders join the (far-too-few) ranks of Black entrepreneurs launching businesses and raising venture capital. In 2017, studies showed that 98 percent of venture capital raised in the U.S. went to men, according to data provided by the company. Black entrepreneurs in general receive less than one percent of venture capital, and Black women founders make up only 0.6 percent of venture capital funding raised. 

“We know that a focus on DEI in business is not just the right thing to do for employees, it also makes good business sense,” said Price, CEO and co-founder of Kanarys, in a statement. “Kanarys’ DEI data arms companies, for the first time, to make precise, immediate, and informed decisions using real, intersectional metrics around their diversity goals and inclusion programs that ultimately drive bottom-line business objectives.”

 

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