Autonomous air mobility company Volocopter has added to the Series C funding round it announced in September 2019. The German electric vertical take-off and landing (eVTOL) aircraft maker announced €50 million ($54 million at today’s exchange rate) in funding at the time, and the C round has now grown to €87 million ($94 million) thanks to new lead investor DB Schenker, a German logistics company with operations all over the world.
This round also includes participation by Mitsui Sumitomo Insurance Group, as well as the venture arm of its parent MS&AD, along with TransLink Capital . Existing investors, including Lukasz Gadowski and btov, also participated in this round extension.
With this new funding, Volocopter brings its total raised to around $132 million, and it says it will use the newly acquired capital to help certify its VoloCity aircraft, its air taxi eVTOL designed to transport people, which is on track to become the company’s first-ever vehicle licensed for commercial operation. Meanwhile, Volocopter will also use the new funds to help continue development of a next-generation iteration of its VoloDrone, which is the cargo-carrying version of its aircraft. It aims to use VoloDrone to expand its market to include logistics, as well as construction, city infrastructure and agriculture.
Already, Volocopter has formed partnerships with companies including John Deere for pilots of its VoloDrone, but it says that a second-generation version of the vehicle will help it commercialize the drone. On the VoloCity side, the company recently flew a demonstration flight in Singapore, and then announced they’d be working with Grab on a feasibility study about air taxi services for potential deployment across Southeast Asia in key cities.
Alongside this round extension, Volocopter adds two advisory board members — Yifan Li from Geely Holding Group, which led the first tranche of this round closed in September, and DB Schenker CEO Jochen Thewes. Both of these are key strategic partners from investors who stand to benefit the company not only in terms of funding, but also in terms of supply-side and commercialization.
A new industry alliance led by Alphabet’s Loon high-altitude balloon technology company and SoftBank’s HAPSMobile stratospheric glider subsidiary aims to work together on standards and tech related to deploying network connectivity using high-altitude delivery mechanisms.
This extends the existing partnership between HAPSMobile and Loon, which began with a strategic alliance between the two announced last April, and which recently resulted in Loon adapting the network hardware it uses on its stratospheric balloons to work with the HAPSMobile stratospheric long-winged drone. Now, they two are welcoming more members, including AeroVironment, Airbus Defence and Space, Bharti Airtel, China Telecom, Deutsche Telekom, Ericsson, Intelsat, Nokia, HAPSMobile parent SoftBank and Telefonica.
The new HAPS Alliance, as it’s being called (HAPS just stands for ‘High Altitude Platform Station’) will be working together to promote use of the technology, as well as work with regulators in the markets where they operate on enabling its use. They’ll work towards developing a set of common industry standards for network interoperability, and also figure how to essentially carve up the or stake out the stratosphere so that participating industry players can work together without stepping on each other’s toes.
This new combined group is no slouch: It includes some of the most powerful network operators in the world, as well as key network infrastructure players and aerospace companies. Which could mean big things for stratospheric networks, which have the advantages of being closer to Earth than satellite-based internet offerings, but also avoid the disadvantages of ground-based cell towers like having to deal with difficult terrain or more limited range.
Is this the first step towards a future where our connected devices rely on high-flying, autonomous cell towers for connectivity? It’s too early to say how ubiquitous this will get, but this new group of heavyweights definitely lends more credence to the idea.
For global venture capitalists still on the fence about entering Africa, a first move could be co-investing with a proven fund that’s already working in the region.
Africa’s startup scene is performance-light — one major IPO and a handful of exits — but there could be greater returns for investors who get in early. For funds from Silicon Valley to Tokyo, building a portfolio and experience on the continent with those who already have expertise could be the best start.
Africa has one of the fastest-growing tech sectors in the world, as ranked by startup origination and year-over-year increases in VC spending. There’s been a mass mobilization of capital toward African startups around a basic continent-wide value proposition for tech.
Significant economic growth and reform in the continent’s major commercial hubs of Nigeria, Kenya, Ghana and Ethiopia is driving the formalization of a number of informal sectors, such as logistics, finance, retail and mobility. Demographically, Africa has one of the world’s fastest-growing youth populations, and continues to register the fastest global growth in smartphone adoption and internet penetration.
Africa is becoming a startup continent with thousands of entrepreneurs and ventures who have descended on every problem and opportunity.
Yellow, the accelerator program launched by Snap in 2018, has selected ten companies to join its latest cohort.
The new batch of startups coming from across the U.S. and international cities like London, Mexico City, Seoul and Vilnius are building professional social networks for black professionals and blue collar workers, fashion labels, educational tools in augmented reality, kids entertainment, and an interactive entertainment production company.
The list of new companies include:
The latest cohort from Snap’s Yellow accelerator
Since launching the platform in 2018, startups from the Snap accelerator have gone on to acquisition (like Stop, Breathe, and Think, which was bought by Meredith Corp.) and to raise bigger rounds of funding (like the voiceover video production toolkit, MuzeTV, and the animation studio Toonstar).
Every company in the Yellow portfolio will receive $150,000 mentorship from industry veterans in and out of Snap, creative office space in Los Angeles and commercial support and partnerships — including Snapchat distribution.
TechCrunch is returning to U.C. Berkeley on March 3 to bring together some of the most influential minds in robotics and artificial intelligence. Each year we strive to bring together a cross-section of big companies and exciting new startups, along with top researchers, VCs and thinkers.
In addition to a main stage that includes the likes of Amazon’s Tye Brady, U .C. Berkeley’s Stuart Russell, Anca Dragan of Waymo, Claire Delaunay of NVIDIA, James Kuffner of Toyota’s TRI-AD, and a surprise interview with Disney Imagineers, we’ll also be offering a more intimate Q&A stage featuring speakers from SoftBank Robotics, Samsung, Sony’s Innovation Fund, Qualcomm, NVIDIA and more.
Alongside a selection of handpicked demos, we’ll also be showcasing the winners from our first-ever pitch-off competition for early-stage robotics companies. You won’t get a better look at exciting new robotics technologies than that. Tickets for the event are still available. We’ll see you in a couple of weeks at Zellerbach Hall.
8:30 AM – 4:00 PM
Registration Open Hours
General Attendees can pick up their badges starting at 8:30 am at Lower Sproul Plaza located in front of Zellerbach Hall. We close registration at 4:00 pm.
10:00 AM – 10:05 AM
10:05 AM – 10:25 AM
The UC Berkeley professor and AI authority argues in his acclaimed new book, “Human Compatible,” that AI will doom humanity unless technologists fundamentally reform how they build AI algorithms.
10:25 AM – 10:45 AM
Maxar Technologies has been involved with U.S. space efforts for decades, and is about to send its sixth (!) robotic arm to Mars aboard NASA’s Mars 2020 rover. Lucy Condakchian is general manager of robotics at Maxar and will speak to the difficulty and exhilaration of designing robotics for use in the harsh environments of space and other planets.
10:45 AM – 11:05 AM
Amazon Robotics’ chief technology officer will discuss how the company is using the latest in robotics and AI to optimize its massive logistics. He’ll also discuss the future of warehouse automation and how humans and robots share a work space.
11:05 AM – 11:15 AM
Live Demo from the Stanford Robotics Club
11:30 AM – 12:00 PM
Join one of the foremost experts in artificial intelligence as he signs copies of his acclaimed new book, Human Compatible.
11:35 AM – 12:05 PM
Can robots help us build structures faster, smarter and cheaper? Built Robotics makes a self-driving excavator. Toggle is developing a new fabrication of rebar for reinforced concrete, Dusty builds robot-powered tools and longtime robotics pioneers Boston Dynamics have recently joined the construction space. We’ll talk with the founders and experts from these companies to learn how and when robots will become a part of the construction crew.
12:15 PM – 1:00 PM
Join this interactive Q&A session on the breakout stage with three of the top minds in corporate VC.
1:00 PM – 1:25 PM
Select, early-stage companies, hand-picked by TechCrunch editors, will take the stage and have five minutes to present their wares.
1:15 PM – 2:00 PM
Your chance to ask questions of some of the most successful robotics founders on our stage
1:25 PM – 1:50 PM
Leading investors will discuss the rising tide of venture capital funding in robotics and AI. The investors bring a combination of early-stage investing and corporate venture capital expertise, sharing a fondness for the wild world of robotics and AI investing.
1:50 PM – 2:15 PM
As robots become an ever more meaningful part of our lives, interactions with humans are increasingly inevitable. These experts will discuss the broad implications of HRI in the workplace and home.
2:15 PM – 2:40 PM
Autonomous driving is set to be one of the biggest categories for robotics and AI. But there are plenty of roadblocks standing in its way. Experts will discuss how we get there from here.
2:15 PM – 3:00 PM
Join this interactive Q&A session on the breakout stage with some of the greatest investors in robotics and AI
Imagineers from Disney will present start of the art robotics built to populate its theme parks.
3:10 PM – 3:35 PM
This summer’s Tokyo Olympics will be a huge proving ground for Toyota’s TRI-AD. Executive James Kuffner and Max Bajracharya will join us to discuss the department’s plans for assistive robots and self-driving cars.
3:15 PM – 4:00 PM
Join this interactive Q&A session on the breakout stage with some of the greatest engineers in robotics and AI.
3:35 PM – 4:00 PM
In 1920, Karl Capek coined the term “robot” in a play about mechanical workers organizing a rebellion to defeat their human overlords. One hundred years later, in the context of increasing inequality and xenophobia, the panelists will discuss cultural views of robots in the context of “Robo-Exoticism,” which exaggerates both negative and positive attributes and reinforces old fears, fantasies and stereotypes.
4:00 PM – 4:10 PM
Live Demo from Somatic
4:10 PM – 4:35 PM
Machine learning and AI models can be found in nearly every aspect of society today, but their inner workings are often as much a mystery to their creators as to those who use them. UC Berkeley’s Trevor Darrell, Krishna Gade of Fiddler Labs and Karen Myers from SRI will discuss what we’re doing about it and what still needs to be done.
4:35 PM – 5:00 PM
The benefits of robotics in agriculture are undeniable, yet at the same time only getting started. Lewis Anderson (Traptic) and Sebastien Boyer (FarmWise) will compare notes on the rigors of developing industrial-grade robots that both pick crops and weed fields respectively, and Pyka’s Michael Norcia will discuss taking flight over those fields with an autonomous crop-spraying drone.
5:00 PM – 5:25 PM
Robotics and AI are the future of many or most industries, but the barrier of entry is still difficult to surmount for many startups. Speakers will discuss the challenges of serving robotics startups and companies that require robotics labor, from bootstrapped startups to large scale enterprises.
5:30 PM – 7:30 PM
Unofficial After Party, (Cash Bar Only)
Come hang out at the unofficial After Party at Tap Haus, 2518 Durant Ave, Ste C, Berkeley
We only have so much space in Zellerbach Hall and tickets are selling out fast. Grab your General Admission Ticket right now for $350 and save 50 bucks as prices go up at the door.
Student tickets are just $50 and can be purchased here. Student tickets are limited.
Startup Exhibitor Packages are sold out!
Founders Fund, the investment firm led by its controversial co-founder Peter Thiel and partners Keith Rabois and Brian Singerman, has closed on $3 billion in new capital across two investment funds, TechCrunch confirmed.
News of the firm’s latest fundraising close was first reported in Axios.
The firm’s $1.2 billion Founders Fund VII closed in December and follows on the heels of a $1.3 billion Fund VI, which closed in 2016. The firm’s first growth fund, which raked in $1.5 billion, closed on Monday as well, according to a spokesperson for the investment firm. An additional $300 million in commitments is coming from the firm’s partnership to round out the $3 billion figure.
Fundraising for the new investment vehicles was first reported in The Wall Street Journal last October. And it follows the reunion earlier in 2019 of Rabois and Thiel — two of the most notorious members of the “PayPal mafia” that’s produced a number of billionaire entrepreneurs and investors.
The speed with which Founders Fund has been able to raise new capital is matched by the firm’s alacrity in deploying new dollars, according to industry watchers. Rabois in particular has made a splash at Founders Fund since joining the firm — investing large sums in competitive rounds, investors said.
But the firm’s success in fundraising is likely due to the returns it has been able to reap for its limited partners. For its 2011-vintage fund four, Founders Fund has more than quadrupled every dollar that the fund committed, to $4.60, according to a report in The Wall Street Journal (thanks to investments in Airbnb and Stripe Inc.). That figure compares favorably to the industry average of $2.11. Meanwhile, the firm’s third fund saw its returns increase to $3.80, 75 cents more than the industry average.
Founders Fund partner Cyan Banister described how the firm’s investment practices differ from other venture capital investors in a wide-ranging interview with TechCrunch last year:
As for how decisions get made, Banister explained that the voting structure is dependent on the size of the check. “So you’d meet with one or two or three or four partners, depending on your [investing] stage,” she told attendees. Because she’s looking at very early-stage startups, for example, she doesn’t have to meet with many people to make a decision. As “dollar amounts gets larger,” she continued, “you’re looking at full GP oversight,” including the involvement of senior members like Brian Singerman and Keith Rabois, and “that can a little more difficult.”
At Axios, Dan Primack reported that the growth fund would write checks of $100 million at least. The firm’s investment decisions would be structured with any two investment team members agreeing to back deals under $1.5 million. Any deal above $1.5 million requires approval from one partner and a general partner; deals above $5 million require one partner and two general partners; and deals above $10 million require approvals from two partners and the unanimous approval of Singerman, Thiel and Rabois. Any deal requiring the approval of the general partners means that the startup that is pitching has to at least talk on the phone or meet in person with the general partners.
Update: This story has been updated to reflect that the firm’s Fund VII was $1.2 billion and its Growth Fund was $1.5 billion.
Google today announced that it is calling it quits on its efforts to build and monetize its Makani wind energy kites. Makani, which was founded in 2006, came into Google/Alphabet seven years ago as a Google X project. Last year, the company spun it out of X and made it a standalone Alphabet unit. Now, Makani’s time at Alphabet as an “Other Bet” is at an end. The company is still hoping to work with Shell, one of its earliest partners, to see how the technology can be used in another way, though.
“After considering many factors, I believe that the road to commercial viability is a much longer and riskier road than we’d hoped and that it no longer makes sense for Makani to be an Alphabet company,” says Astro Teller, captain of Moonshots at X and xhairman of the Makani board, in a statement. Teller, it’s worth noting, does not oversee Alphabet’s Other Bets.
“While it’s tempting to say that all climate-related ideas deserve investment, remaining clear-eyed and directing resources to the opportunities where we think we can have the greatest impact isn’t just good business; it’s essential when it comes to a problem as urgent as the climate crisis,” Teller added.
While at X/Alphabet, the team managed to get a 20kW demonstration project off the ground and expanded this to a unit capable of producing up to 600kW. Still, though, Alphabet clearly didn’t see a path forward to turning Makani into a viable (and profitable) project in the long run.
“Creating an entirely new kind of wind energy technology means facing business challenges as well as engineering challenges,” writes Fort Felker, who became the lead for Makani at X in 2015. “Despite strong technical progress, the road to commercialization is longer and riskier than hoped, so from today Makani’s time at Alphabet is coming to an end.”
Back in the day, when it first acquired Makani, Google probably wouldn’t have worried all that much about whether this project made good business sense. Those freewheeling times at Google are behind us, though, and, at this point, there is an expectation that even these forward-looking Other Bets have to become standalone businesses in the long run.
Over the past four years, TechCrunch has brought together some of the biggest names in robotics — founders, CEOs, VCs and researchers — for TC Sessions: Robotics + AI. The show has provided a unique opportunity to explore the future and present of robotics, AI and the automation technologies that will define our professional and personal lives.
While the panels have been curated and hosted by our editorial staff, we’ve also long been interested in providing show-goers an opportunity to engage with guests. For this reason, we introduced the Q&A stage, where some of the biggest names can more directly engage with attendees.
This year, we’ve got top names from SoftBank, Samsung, Sony’s Innovation Fund, Qualcomm, Nvidia and more joining us on the stage to answer questions. Here’s the full agenda of this year’s Q&A stage:
11:30 – 12:00 Russell Book signing
1:15 – 2:00 Founders
Sebastien Boyer (FarmWise)
Noah Campbell-Ready (Built Robotics)
3:15 – 4:00 Building Robotics Platforms
Steven Macenski (Samsung)
Claire Delaunay (Nvidia)
$345 General admission tickets are still on sale — book yours here and join 1,000+ of today’s leading minds in the business for networking and discovery. The earlier you book the better, as prices go up at the door.
Students, save big with a $50 ticket and get full access to the show. Student tickets are available to current students only. Book yours here.
Air mobility startup Volocopter will be working together with on-demand transportation, food delivery and payments company Grab on a feasibility study around air mobility in Southeast Asia. The joint study is part of a Memorandum of Understanding (MOU) signed by the two companies that covers exploration of the potential deployment of air taxi services in some of the cities in the region.
This is the first step in a partnership that could eventually result in actually running test flights and establishing routes for air taxi service deployment, though how far things go will likely depend on the results of this study and the subsequent appetites of both parties involved.
Volocopter, a German startup that has been building and demonstrating vertical takeoff and landing craft powered by electricity since 2011, has already demonstrated its aircraft in Singapore, working with local Singapore aviation regulators. It also unveiled a “world first” full-scale air taxi “VoloPort” last October in the city, working with partner Skyport to develop a commercially scalable model for these urban air taxi stations.
Grab seems to see Volocopter and its aerial taxi services as another potential piece of the overall puzzle that it’s putting together across various transportation methods. “This partnership will enable Volocopter to further develop urban air mobility solutions that are relevant for Southeast Asian commuters so they can decide on their preferred journey option based on their budgets, time constraints and other needs, in a seamless way,” said Grab Ventures CEO Chris Yeo in an emailed press release.
Volocopter has said Singapore could be one of the best contenders for commercial service launch and opened offices in the region last year. Other potential commercial launch markets include Dubai and Germany, the company has said previously.
The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every Saturday in your inbox.
Hello again — or perhaps for the first time. This is Kirsten Korosec, senior transportation reporter at TechCrunch and your host here at The Station. This weekly newsletter will also be posted as an article after the weekend — that’s what you’re reading now. To get it first, subscribe for free. Please note that there will not be a newsletter February 22.
It was a drama-filled week with a hearing on the hill in D.C. about autonomous vehicle legislation that got a bit tense at times. Meanwhile, Uber tipped its hat to the past, EV startup Lucid started to lift the veil on its Air vehicle (scroll down for a spy shot!) and micromobility prepared for headwinds in Germany.
Before I ride off into the sunset for my vacation, one reminder for y’all. Don’t forget to reach out and email me at firstname.lastname@example.org to share thoughts, opinions or tips or send a direct message to @kirstenkorosec.
Welcome back to micromobbin’, a regular feature in The Station by reporter Megan Rose Dickey. Before we get into her micromobility insights, a quick note that shared scooters are facing a fight in Germany that has prompted companies to unite over their “shared” cause. (Get it?)
Micromobility vehicles, first legalized in Germany last June, have flooded the marketplace and caused a backlash in cities like Berlin, where at least six apps, including Bird, Circ (now owned by Bird), Lime, Tier, Uber Jump and Voi operate. As the Financial Times first reported, amendments to the country’s Road Traffic Act would give individual cities the power to heavily restrict the areas in which e-scooters can be parked or ban them altogether.
Now back to Dickey’s micromobbin’.
Swiftmile, the startup that wants to become the gas station for electric micromobility vehicles, announced its move into advertising this week. Swiftmile already supplies cities and private operators with docks equipped to park and charge both scooters and e-bikes. Now, the company is starting to integrate digital displays that attach to its charging stations to provide public transit info, traffic alerts and, of course, ads.
“It adds tremendous value because it’s a massive market,” Swiftmile CEO Colin Roche told TechCrunch. “Tons of these corporations want to market to that group but you cannot do that on a scooter, nor should you. So there’s a massive audience that wants to market to that group but also cities like us because we’re bringing order to the chaos.”
Meanwhile, Bird unveiled more details about its loyalty program, called Frequent Flyer. It’s currently in the pilot phase, which means it’s only available in select markets. But the benefits for riding five times in 28 days include no start fees for rides between 5 a.m. to 10 a.m., Monday through Friday and the ability to reserve your Bird in advance for up to 30 minutes at no cost.
— Megan Rose Dickey
We don’t just hear things. We see things too. This week in a little bird — the place where we share insider news, not gossip — I’m going to share two spy shots of a production version of Lucid Motors’ upcoming Air electric vehicle. See below.
The photos of the production version of the Lucid Air were taken during an event hosted for some of the vehicle’s first reservation holders. (I wasn’t there, but luckily some readers of The Station were.) By the way, we also hear that reservations are in the “low four figures.”
You’ll notice that the production version of the Air is nearly identical to the beta version. Unfortunately, we don’t see the interior. But reports suggest it falls in the understated luxury category and without giant screens.
Lucid is preparing for one of the more important moments in its history as a company. The production version of Air will be unveiled in April at the New York Auto Show. In the run-up to the auto show, Lucid is revealing more information about the vehicle, including a recent video that suggested the vehicle had a real-world range of more than 400 miles. Lucid has hit that 400-mile range in simulated testing, but how it operates on the roads is what really matters.
What’s impressive, if those numbers bear out, is that it was accomplished with a 110-kWh battery pack. That’s an improvement from back in 2016 when Lucid said it would need a 130-kWh battery pack to achieve that range. In my past conversations with CEO Peter Rawlinson — and one wild ride with him behind the wheel of an early Air prototype in Vegas — it’s clear he is obsessed with battery efficiency. That apparently hasn’t waned.
Car and Driver, which was at this special event, noted in its report that Rawlinson has a goal to get to five miles per kilowatt-hour. Right now, Tesla can lay claim to the most efficient electric vehicle with the upcoming Model Y at a claimed 4.1 miles per kilowatt-hour.
It got a little prickly on Capitol Hill during a House panel hearing this week that aimed to tackle how best to regulate autonomous vehicles. Watch the hearing to see it all unfold. Here’s a handy link to it.
A quick history lesson: The SELF DRIVE ACT was unanimously passed in 2017 by the Republican-controlled House of Representatives. AV START, a complementary bill introduced in the Senate, failed to pass because Democrats said it didn’t go far enough to address safety and liability issues.
A bipartisan group revived efforts to come up with legislation that would address Democrat concerns and give auto manufacturers and AV developers greater freedom to deploy vehicles that lack controls like a steering wheel or pedals, which are currently required by federal law.
There was some level of public agreement between the traditional auto manufacturers and AAJ over the issue of accountability. But there is still a huge divide between organizations like the Consumer Technology Association and safety advocates and trial lawyers over the issue of forced arbitration.
Groups like the American Association for Justice, a group representing trial lawyers, want to ban forced arbitration in any autonomous vehicle bill.
Meanwhile, CTA president and CEO Gary Shapiro submitted testimony that was clearly opposed to limiting the use of arbitration. The CTA argues that arbitration reduces the cost of litigation and provides more timely remedies.
People who were in the room told me they were surprised by how unwavering Shapiro’s comments were, and suggested that it wasn’t in step with how some auto manufacturers view the issue.
Following the hearing, the House Energy and Commerce and Senate Commerce, Science and Transportation committees circulated seven sections to industry groups covering issues such as crash-data sharing and cybersecurity, according to reporting by Bloomberg Government. There was one missing provision. Any guesses? Yup, the provision dealing with forced arbitration. That has caused some Democrats to abandon the bill.
There are two ways for this bill to survive in this congressional session — by unanimous consent, meaning everyone agrees to it, or by being attached to another bill. The first option is highly unlikely. And the second is just as slim, as there are limited opportunities in the Senate to attach self-driving legislation to another bill.
Two items to mention that illustrate how the world of ride hailing continues to evolve.
First up is Uber. The company is piloting a new feature aimed at older adults that will let customers dial a 1-800 number and speak to an actual human being to hail a ride. The pilot is launching in Arizona, followed by other yet unnamed states. Sounds sort of familiar, doesn’t it?
It’s not quite like calling a taxi dispatcher, though. You’ll still need a phone that can receive SMS or text messages to get information on the driver and their ETA.
Now let’s jump over to Nigeria where new regulations in the country’s commercial center of Lagos are creating some chaos.
Lagos has started to restrict where shared motorcycles, called okadas, can operate. That is affecting motorcycle-taxi businesses like ORide, Max .ng and Gokada.
In a statement via email, ORide’s senior director of Operations, Olalere Ridwan, said the rules entail “a ban on commercial motorcycles…in the city’s core commercial and residential areas, including Victoria Island and Lagos Island.”
The motorcycle taxi limitations have also thrown off Lagos’s disorderly transit grid — overloading other mobility modes (such as mini-buses) and forcing more people to pound pavement and red-dirt to get to work, according to reporter Jake Bright.
I wanted to highlight one of our ONMs, otherwise known as original news manufacturers. Ba dum bump.
Freelancer Mark Harris is back with a scoop on Google’s short-lived Bookbot program and how its death sparked a new and still-in-stealth startup called Cartken.
Bookbot was a robot created within Google’s Area 120 incubator for experimental products. The plan was to pilot an autonomous robot in Mountain View that would pick up library books from users and bring them back to the library. Apparently, it was well received. But it was killed off far before its nine-month pilot was slated to end. Bookbot’s demise followed Google’s decision to scale back efforts to compete with Amazon in shopping.
But Bookbot appears to be back, albeit in a slicker form and with a broader use case than a library book shuttle. Engineers working on Bookbot as well as a logistics expert who was once in charge of operations at Google Express left the company to form Cartken in fall 2019.
Check out Harris’ deep dive into Bookbot, Google’s shift away from shopping and Cartken.
You might have heard or read here in this newsletter that TC Sessions: Mobility is returning for a second year on May 14 in San Jose — a day-long event brimming with the best and brightest engineers, policymakers, investors, entrepreneurs and innovators, all of whom are vying to be a part of this new age of transportation.
Now here’s my discount deal for you. To get 10% off tickets, including early-bird, use code AUTO. The early-bird sale ends April 9. Early-bird tickets are available now for $250 — that’s $100 savings before prices go up. Students can book a ticket for just $50. Book your tickets today.
So far, we’ve announced:
Expect more announcements each week leading up to the May 14th event.
On Monday, budget-lodging startup Oyo reported a loss of $335 million on $951 million revenue globally for the financial year ending March 31, 2019, and pledged to cut down on its spending as the India-headquartered firm grows cautious about its aggressive expansion.
The six-year-old startup’s growing revenue, up from $211 million in financial year ending March 31, 2018 (FY18), is in line with the company’s ambitions to be in a clear path to profitability this year, said Abhishek Gupta, Global CFO of OYO Hotels & Homes, in a statement.
But the startup’s loss has widened, too. Its consolidated loss at $335 million in FY19 rose over sixfold from $52 million in FY18. In India, where Oyo clocked $604 million in revenue in FY19 (up 2.9X since FY18), it was able to reduce its loss to 14 percent (from 24 percent) of revenue in FY19 to $83 million.
Indian laws require every local startup — and international businesses — to disclose their annual financials. Most of them filed their financials in early October.
The startup, which today operates more than 43,000 hotels with over a million rooms in 800 cities in 80 nations, said its expansion in China and other international markets contributed to the loss. Oyo entered China in 2018, and says the world’s most populated nation has already become its second largest market.
“These markets constituted 36.5 percent of the global revenues. While consistently improving operating economics in mature markets like India where it’s already seeing an improvement in gross margins, the company is determined to bring in the same fiscal discipline in emerging markets in the coming financial year,” the startup said in a statement.
Aditya Ghosh, who served as a chief executive of the startup and is now a board member, said in a call with reporters that since Oyo entered a number of markets last year it was in the growth phase and that needed some investments. Speaking especially of China, Ghosh said the company, like many others, is watching the outbreak of coronavirus that has resulted in shutting down some hotels.
He also said that Oyo has pared back from some markets, including India, where it pulled out of about 200 cities. The startup is currently not looking to expand to any new markets, he added.
It is now working on improving its gross margin. In India, its gross margin increased to 14.7% from 10.6% as of FY18.
Oyo’s growth in international markets
Oyo has come under scrutiny in recent months for its aggressive expansion in a manner that some analysts have said is not sustainable. The startup, which rebrands and renovates independent budget hotels, has also engaged in sketchy ways to sign up new hotels, as documented by the New York Times earlier this year. Several hoteliers have claimed that Oyo did not honor its agreements and owed them money.
In 2019, Oyo, which counts Airbnb among its investors, expanded in Europe and the U.S. among other markets. It bought Leisure Group from Axel Springer for $415 million to target Europe’s vacation rental market. It also announced plans to invest another $335 million for this effort. In the same month, it announced it had acquired the Hooters Casino Hotel Las Vegas for about $135 million in its first U.S. property purchase.
In recent months, Oyo executives have acknowledged that the startup grew too fast and is confronting a number of “teething issues.” Oyo has laid off at least 3,000 employees, mostly in India, in last three months. Ghosh said the startup is still hiring for new roles, but only in key areas such as data science.
“The company’s increased focus on corporate governance and building a high-performing and employee-first work culture will also drive this next phase of sustainable growth for us,” said Gupta.
Want to spice up the bedroom without paying for pills or awkward visits to a sex therapist? A new app called Lover lets you take a sexual personality quiz, explore carnal knowledge tutorials, and discretely figure out which turn-ons you share with your partner. Built by board certified sexual medicine clinical psychologist Dr. Britney Blair, Lover launches today on iOS with $5 million in seed funding from Tinder founder Sean Rad and other investors.
“It is strange that there are such taboos around sex when it is something we all do…whether we enjoy ourselves or not. We think it is time to start the conversation around this important aspect of our health” says Dr. Blair. “We believe Lover can help build confidence, facilitate communication, improve partner connection and just raise consciousness about sex and sexuality.”
A solid portion of Lover’s content is free for the first seven days, including audio guides to oral sex, video explainers on how to be generous in bed, and multi-step “playlists” of content like “Getting Hard, Made Easy”. Lover charges $9.99 to keep using it to dive deeper into themed educational materials like “Coreplay Not Foreplay” and “Fantasy To Reality” that are recommended based on the result of your sexual style questionnaire.
“Almost 50% of women and 40% of men have a sexual complaint . . . [but] most people don’t realize how common and treatable their issues are” Dr. Blair tells me. “In our [pre-launch tests] focused purely on erectile dysfunction, 62% of users reported improvements to their erections within three weeks of using the app. That’s pretty wild when you think Viagra’s efficacy rate is approximately 65% and it lasts only five hours.”
With startups like digital pharmacy Ro scoring a $500 million valuation just 18 months after launching by prescribing and selling men’s health drugs like viagra, Lover sees a market for education-based alternative approaches to sexual wellness.
Lover co-founders (from left): Jas Bagniewski, Dr. Britney Blair, and Nick Pendle
Dr. Blair got interested in the space a decade ago after a Stanford grad school lecture illuminated how prevalent sexual problems are but how quickly they can be resolved with learning and communication. She teamed up with her CEO Jas Bagniewski who’d been the manager of Europe’s largest ecommerce business Zalando in the UK, and a founder of City Deal that sold to Groupon. Bagniewski and fellow Lover co-founder Nick Pendle started European Casper mattress competitor Eve Sleep and brought it to IPO.
The plan is to combine Dr. Blair’s educational materials with Bagniewski and Pendle’s ecommerce chops to monetize Lover through subscriptions and eventually recommending products like sex toys for purchase. Now they have $5 million in seed funding led by Lerer Hippeau, and joined by Manta Ray Ventures, Oliver Samwer’s Global Founders Capital, Fabrice Grinda, and Jose Marin. The cash will go towards building out an Android app and adding games that partners can play together in bed.
There are plenty of random sex tip websites out there. Lover tries to differentiate itself by personalizing content based on the results of a Myers-Briggs-esque quiz that asks you how adventurous, communicative, and assertive you are. You then receive a classification like “The Muse” with a few pages of explanation, for example revealing how you like to inspire others while being the center of attention.
From there, Lover can suggest guides for mastering your own sexual personality or branching out into new behavior patterns. There’s also a feature copied from another app called XConfessions for figuring out what you and your partner like. You connect your apps and then separately swipe yes or no on questions about whether you’d like “having your partner drip candle wax on you” or “your partner dressing as a strict cop”. If you and they match, the app tells you both so you can try it out.
Overall, Lover’s content is a lot higher quality and more compassionate than where most people learn about sex: from pornography. Having a real sexual medicine doctor overseeing the app lends credibility to Lover. And the design and tone throughout make you feel empowered rather than sleazy.
Still, Dr. Blair admits that “it’s hard to motivate people into behavioral change, people already have subscription apps on their phones and we may run into ‘subscription fatigue'”. People might feel natural paying for viagra because the impact is obvious, the value of a subscription to sex tips might feel too vague or redundant to what’s free online.
To get a lot of users opening their wallets, not just their pants, Lover will need to do a better job of previewing what’s behind the paywall, and offering more interactivity that online content lacks. But if it can give users one unforgettable night thanks to its advice, it may be able to seduce them for the long-run.
Last month, Tradeshift, a platform for supply chain payments which has achieved unicorn status in recent years, had some good news and some bad news. It announced a Series F funding round of $240 million in equity and debt, raised from a combination of existing and new investors. It’s now raised a total of $661 million since it started in 2008 and investors include Goldman Sachs, Principal Strategic Investments and Wipro Ventures among others.
The new funding came despite talk of a possible IPO last year. In effect, this new funding round was an admission by the company that it was delaying any IPO and setting the company “on a direct path to profitability in the near future,” which is exactly the kind of noises many larger tech firms have made in the wake of the WeWork and Peloton issues with the public markets.
During that announcement CEO and co-founder Christian Lanng also admitted that the drive toward profitability would mean a cost-cutting exercise ahead of any possible IPO.
Lanng said this would likely mean reducing headcount in its expensive San Francisco offices, but reallocating resources and talent to locations where that is more affordable.
The company has made no formal announcement about the detail on that, but yesterday we got confirmation from the European tech press that the cuts were indeed starting to bite.
The Danish version of ComputerWorld reported that the staffing cuts have now run into three figures and were conducted in mid-January.
The cuts came from headcount at the company’s offices in Copenhagen, San Francisco and other offices.
Mikkel Hippe Brun, a co-founder of Tradeshift and head of the company’s Asian business, confirmed the information to ComputerWorld, but indicated that “there are still some consultations around the world, where we are subject to different rules about notifications and opportunities to raise objections.”
However, he said that the company still has more than 1,000 employees worldwide, which is “significantly more employees” than two years ago.
Tradeshift has an impressive array of investors, such as Goldman Sachs, although it’s notable that this doesn’t include any of the usual round of typical SaaS-oriented Valley VCs.
Tradeshift customers have included Air France KLM, Kuehne + Nagel International AG, DHL, Fujitsu, HSBC, Siemens, Société Générale, Unilever and Volvo.
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
This morning we’re exploring Airbnb’s march to the public markets. The popular DIY hospitality startup promised last year that it would go public in 2020. That timeline means that its 2019 performance will be included in an eventual S-1 filing, putting the results on public display.
Recent news, however, doesn’t paint a perfect picture for the famous unicorn. Indeed, Airbnb’s history of rapid growth and profitability appears to have been replaced by slowing growth and profit struggles. The Wall Street Journal reported results from the company’s third quarter that are at once encouraging — a return to profitability — and troublesome; Airbnb’s first three quarters of 2019 are in the red as a group, a change from historical profitability.
If Airbnb goes public soon, as it has promised, its recent, trailing results will matter. To get ready for its IPO, let’s rewind through what we’ve learned about Airbnb’s revenue, revenue growth and profitability over the years. Doing this will help us understand how the startup went from rising profitability to posting, through the first three quarters of 2019, a nine-figure net loss.
The Airbnb public offering (likely a direct listing) is going to be the financial event of the year. Get excited.
The following data points were culled from a host of reports over the past half decade. Each is accompanied by its original source, and I encourage you to read the pieces to get a feel for how Airbnb has been discussed through time. The tone of Airbnb coverage largely tracks its performance; when Airbnb was at the steepest part of its growth curve, the media was enthused. Lately, however, the writing is a bit different.
You’ll see why:
The Space Force will be taking one giant leap towards reality if the Department of Defense’s proposed budget and operations go through. $15 billion is requested, which would fund a number of missions and help establish the more than 10,000 personnel expected to join the new military branch over the next year.
Estimates for how much it would cost to really establish the Space Force have varied widely, due in some part to the original haziness of the vision, but also because even had that vision been crystal clear, the timing and method of accomplishing it would be the subject of major debate.
In the end the Pentagon has decided in true military style to strike fast and hard at this, which for all they know may be the last opportunity to do so with this administration. Who knows what the new year may bring?
Its request, detailed as part of an overall budget proposal of $705 billion, would be for $15B in FY2021. These funds would be used to “consolidate the preponderance of space missions, units, resources, and personnel from the existing Military Services into the new U.S. Space Force,” with a goal of doing so completely by 2024.
This isn’t exactly new funding as much as shifted over from elsewhere within the Air Force, under which the new command will exist, and which currently has authority over the most of the armed forces’ space-related missions, assets and personnel. For reference, $15B is about 60 percent of the size of the proposed NASA budget (which to be clear is not coming out of the DoD’s pocket). Notably the National Reconnaissance Office, which essentially presides over space-based spying, will not transfer over.
Under the proposed budget and transfers, the Space Force will grow from a ragtag group of 122 civilians and 38 military personnel to only a few shy of 10,000 — about 35 percent civilian and the remainder military. These are mostly going to be from the Air Force’s Space Command, which is essentially being eaten by Space Force.
Three projects are given line items in the budget. $1.6B for three launches for national security purposes (unlikely to be detailed further given their nature), $1.8B for two launches of GPS satellites and related systems, and $2.5B to continue development of the Next-Generation Overhead Persistent Infrared project for missile detection.
As with other budgets we’ve covered in the last week, this one is a proposal, not an allocation; Congress will be the ones to make the final decision on amounts, though it seems unlikely that the Space Force will be derailed at this stage. Since it is largely taking custody of existing programs and service members, with new HQs and projects still years off, it seems relatively safe from cuts.
After years of development, an exciting new scientific research spacecraft has launched on its journey to study our solar system’s central player: the Sun. The Solar Orbiter, developed jointly by NASA and the European Space Agency (ESA) and built by Airbus, lifted off from Cape Canaveral Air Force Station in Florida on Sunday night, launching as planned at 11:03 PM EST (8:03 PM PST).
Solar Orbiter launched atop a United Launch Alliance (ULA) Atlas V rocket, feating a special, unique configuration of the launch vehicle designed specifically to get the nearly 4,000 lb observation craft off Earth and onto its target path to eventually approach the Sun. The Atlas V used for this launch was configured with a payload fairing 13 feet in diameter to accommodate the Orbiter, and used a single solid rocket motor to provide the necessary propulsive power.
From here, Solar Obiter embarks on a journey that will take just over a year and a half, and include two close passes to Venus and Earth in order to take advantage of their gravitational pull to propel the spacecraft towards its target destination while conserving as much fuel as possible. After it swings by those two bodies to gain momentum, it’ll end up in an orbit around the sun with a close approach distance of just 26 million miles – still about 100 times as far as the Moon is from Earth, but so close that temperatures at their peak at the spacecraft will reach nearly 1,000 degrees Fahrenheit.
Solar Orbiter’s mission sees it orbiting the Sun for at least seven years, gathering data about what’s going on in the star’s heliosphere, which is roughly equivalent to Earth’s atmosphere in that it surrounds the Sun. These findings should shed new light on what goes on in the heliosphere, which will definitely be advantageous for scientific study of our solar companion, but they could also provide new information that leads to better understanding of so-called ‘space weather,’ which includes things like solar storms and flares that actually impact the proper functioning of infrastructure including communications and navigation technology back on Earth.
Onboard Solar Orbiter, there are 10 instruments to measure various phenomena and gather different types of information from the Sun, including permeating ultraviolet imaging and taking measurements from the solar wind that radiates off the star. All of these instruments had to be hardened to withstand not only those extremely high temperatures from the Orbiter’s closest approach to the Sun, but also down to nearly -300 degrees Fahrenheit, which is an amazing engineering challenge when you’re dealing with instrumentation designed to detect very fine detail. They’ll be protected in part by a heat shield made of titanium and covered with a calcium phosphate coating that will absorb most of the 1,000-degree temperatures, however, resulting in a more tolerable range of between 4 and 122 degrees Fahrenheit for most of the actual instruments themselves.
Solar Orbiter won’t be alone in its study of the Sun: NASA’s Parker Solar Probe, which launched in 2018, will be simultaneously in solar orbit, gathering solar gas samples and providing information which can be used in tandem with data provided by Solar Orbiter for a more complete picture of what’s going on at the center of our solar system.
When Fair laid off 40% of its staff in October, CEO Scott Painter promised it wasn’t shuttering leasing services to on-demand fleets. But just one week later, Painter was removed as CEO and replaced in the interim with Adam Hieber, a CFA from Fair investor SoftBank. Today, according to two sources, Fair announced at an all-hands meeting that it would end its Fair Go program that helped Uber drivers lease cars on short-term deals. The program will cease in April. Uber now confirms the news to TechCrunch, and now Fair has directly confirmed the news to us as well.
“Due to an unexpected increase in insurance premiums that would have significantly raised prices for Fair’s rideshare drivers, we will wind down our weekly rideshare service over the coming months,” a spokesperson said. “We are working to minimize the disruption for Fair’s rideshare drivers, including notifying these customers of the status of their subscription in the coming weeks. We are working closely with Uber and exploring options with third parties to provide alternative customer mobility options to ensure a seamless transition for them, as well as continuity in Uber’s vehicle supply. We are thankful for our loyal Fair rideshare drivers and are disappointed we can no longer operate the business in a cost-effective way for our customers.”
Uber drivers who want to lease a car for a month or longer can still do so through Fair. The current program that is being wound down allowed Uber drivers to lease for increments of a week at a time. From what we understand, the program comprised as much as half of Fair’s business with Uber at its peak.
Formerly valued at $1.2 billion after raising over $2 billion in equity and debt financing from SoftBank and Lightspeed, Fair laid off 40% of its staff in October. It had bought Uber’s XChange leasing program in early 2018. The deal lets drivers lease an Uber-eligible car with subscriptions to roadside assistance and maintenance for as low as $130 per week with a $500 start fee.
But Uber had sold the leasing program because it was unprofitable and adding to its losses at a tough time for the rideshare giant. As additional fees stacked up, Fair didn’t fare much better operating it.
A source tells us Fair Go was profitable. It was an important focus for the company as it retooled its subscription services for traditional drivers. Another source says at one point Fair Go was adding about 250 to 300 car leases per day and had thousands of active leases.
But Fair Go was facing higher insurance rates from carriers, which make sense since Uber drivers can be on the road far, far longer than traditional car owners.
Rather than trying to pass those fees along to drivers — many of whom are already cash-strapped — Fair told employees it would cease to lease to Uber drivers. That’s a respectable choice, since it could have pushed Uber drivers into debt if they didn’t fully comprehend what their total costs would be.
Attempts to reach Fair for comment were complicated by many of its in-house PR team being hit with October’s layoffs. An agency representative provided the statement above after publishing time.
An Uber spokesperson confirmed the shut down of Fair Go and their partnership, telling TechCrunch that “Unlocking options for vehicle access so drivers can earn with Uber remains a top priority. We’re thankful for Fair’s collaboration, and their contributions to our vehicle rental program. We’re continuing to invest in rental partnerships, and building more flexibility beyond hourly, weekly, and monthly options available today.”
Uber tells me it remains committed to offering rental options to drivers through partnerships with Hertz, Avis, ZipCar and Getaround, and they may be able to work with Uber drivers formerly leasing from Fair.
Painter kept a role as chairman of Fair.com when he stepped away from the CEO position at the end of October — a change we are still confirming is in place today. At the time of the layoffs in October, he maintained that the action was proactive, and not in response to SoftBank pressure.
“SoftBank is a big shareholder and supporting my focus, and that is the reality right now,” Painter said at the time. “Leaning on us is not the term,” he added in response to our questions of whether SoftBank pressured it to make these changes. “They are supporting us — there is a big difference,” he stressed.
The CEO change one week later, and today’s news about Fair Go, points to a different unfolding of events that speaks to the pressure SoftBank itself is under.
The news is the latest low point for the SoftBank portfolio in the wake of the WeWork implosion. That’s caused potential repeat LPs for SoftBank’s massive Vision Fund to tighten their purse strings and other late stage investors to focus on sustainable unit economics. Late-stage startups have been left scrambling to cut their burn rates, often through layoffs.
SoftBank’s portfolio, which may have trouble raising on good terms after what many saw as inflated valuations propped up by the megafund, has been hit the hardest. This week TechCrunch broke the news that Flexport was laying off 3% of staff, or 50 employees.
Other SoftBank-funded company layoffs include Zume Pizza (80% of staff laid off), Wag (80%), Getaround (25%), Rappi (6%), and Oyo (5%). There may be more to come: activist investor Elliott Management, which now owns more than $2.5 billion of SoftBank shares, has reportedly been in talks with the company over a range of issues including better corporate governance and more transparency and management around investments.
Updated with confirmation from Fair, and a correction that Uber will continue offering car rentals through partners but not leasing as we originally printed.
Alphabet-owned Loon, the company that had been focused on delivering internet communications to remote areas via stratospheric balloons, has completed development work on a new payload for partner HAPSMobile, a subsidiary of SoftBank that’s building high-altitude solar-powered uncrewed aircraft. The two companies jointly adapted the communications technology that enables Loon’s balloons to beam communications networks to Earth for use on HAPSMobile’s drones, effectively turning them into high-flying mobile cell towers.
This is the result of a strategic partnership that the two companies announced back in April of last year, but an important step because it means that Loon’s technology will get its first functional tests on vehicles other than its ballon-based platform. The HAWK30 aircraft that HAPSMobile developed is a solar-powered electric aircraft that flies at speeds of over 100 km/h (around 60 mph) in the stratosphere (with an operating altitude or around 65,000 feet) which is much faster than Loon’s balloons, which meant adapting the payload to perform at these speeds. Part of that customization included making the antenna used to beam the LTE connectivity to devices on the ground much more responsive, allowing them to rotate quickly to maintain the best possible connection.
Loon and HAPSMobile say the their communications technology can provide connections between devices as far as 700 km (435 miles) apart, with data transfer speeds reaching as high as 1Gpbs. HAPSMobile’s goal with the HAWK30 project is to expand the scope of coverage vs. terrestrial cell towers, since their high-altitude position can cover a much larger surface area vs. even the tallest cell towers. In fact, the company notes that just 40 of its aircraft could provide coverage to the entirety of Japan, vs. “tens of thousands of existing terrestrial base stations.” Plus, fewer areas would be considered out-of-range as a result of inhospitable terrain or difficult to reach areas in terms of infrastructure installation.
For Loon, this is a signifiant expansion of their current operating model, providing another path to revenue that includes adapting their communications technology for use on different types of aircraft and delivery models. It’s yet another example of the type of commercial partnerships available to the company, even as it ramps up its existing balloon-based deployment plans with partners including Telefonica and others.
Antler is a “company builder” that emerged a couple of years ago, running startup generator programs and investing from an early stage, bringing a heady mix of technologists, product builders and operators together with its own technology stack.
Now, plenty of “company builders” have come and gone. It’s a bit like Apocalypse Now: everyone goes in thinking they will come up with the major formula to spit out startups at a prodigious rate and they come out screaming “The Horror! The Horror!”
But Antler appears to have been on an interesting run. It has so far made more than 120 investments across a wide range of companies, with several going on to raise later-stage funding from the likes of Sequoia, Golden Gate Ventures, East Ventures, Venturra Capital and the Hustle Fund.
Since its launch in Singapore two years ago, Antler now has a presence across New York, London, Singapore, Sydney, Amsterdam, Stockholm, Nairobi and Oslo.
Today, it’s announcing that it has attracted investment from British investment management company Schroders, investment house FinTech Collective and Ferd, the vehicle used by Johan H. Andresen, the Norwegian industrialist and investor.
This latest investment takes the capital raised by Antler over the past six months to more than $75 million.
These investors join an existing group that includes Facebook co-founder Eduardo Saverin, Canica International and Credit Saison, the third-largest credit card issuer in Japan. The idea here is that these investors get exposure to early-stage companies as they are built.
As with most company builders and accelerators, Antler only takes 1-1.5% of the applicants
Its portfolio includes Sampingan, an on-demand workforce in Indonesia; Xailient, a computer vision technology; Airalo, a global e-sims marketplace; and FusedBone, which enables medical centers to produce bespoke, non-metal implants on-site.
Magnus Grimeland, Antler co-founder and CEO said: “With our support, our founders start refining their ideas and building new and innovative businesses. What is equally important is the deep relationship our founders build with their peers, our advisors and backers. Having accomplished investors like Schroders, Ferd and FinTech Collective on board means we can provide a more valuable network for our startups as they grow their businesses.”
Peter Harrison, Group CEO of Schroders, who will also be joining Antler’s advisory board, said: “We are in a period of unprecedented change. The visibility on venture capital activity and innovation that Antler provides is therefore leading-edge.”
Antler says more than 40% of its portfolio companies have a female co-founder and 78% of these have a female CEO.
All it takes to win a gold medal at the Olympics is the best performance on the day of the event. Champions may be made in countless training hours, but championships, finals and even world title-representing gold medals are won in final seconds and millimeters through speed or accuracy and endurance in that final race, round or game.
To that end, Nike introduced innovation-led products with proven performance-enhancing results for Tokyo 2020.
By driving down into the minutiae of every Olympic event to find the best opportunities to improve design, the brand is ensuring its footwear directly caters to those crucial moments as much as athletes’ preparation for them.
“We are innovating into the infinitesimal and little things that really matter,” John Hoke, Nike’s chief design officer, told me. Although he’s held his position for the last decade, Hoke has actually been with Nike for about 30 years, and through seven Olympic games. “We get to stop and slow down the game and sort of study and obsess over that. We are obsessing over those moment-of-truth moments.”
This obsession resulted in a new line of shoes designed to enhance the moments of truth: the Nike Zoom Viperfly; Air Zoom BB for basketball; the Air Zoom Mercurial for soccer; and the long-awaited Nike Air Zoom Alphafly NEXT% for elite runners. The models contain innovations developed over months of research conducted in a lab in the Pacific Northwest.
In conjunction with a design team as elite as the athletes it caters to, the Nike Research Lab is an integral part of these advancements. Founded 40 years ago in Exeter, N.H., the lab is now located on Nike’s Portland campus and focuses on biomechanics, physiology, perception and human behavior, and data science.
Athletes contribute performance insights to the lab through testing and verbal feedback that the researchers quantify into performance, movement and even fatigue data to improve the product. Researchers have been able to pinpoint the moments during competition when athletes are operating from a place of need or fatigue, thus providing a direction for designers to functionally improve apparel and footwear.
This resulted in a major focus on innovations for energy preservation and responsive technology.
Additionally, with such significant advancements following the release of 2017’s Nike Zoom Vaporfly Elite, elite runners have been returning to Nike sneakers en masse.
In 2018, the addition of ZoomX foam and modern technology using carbon fiber plates allowed Nike ZoomX Vaporfly NEXT% to increase running efficiency by 4%, making wearers actually see significantly faster times.
However, this has raised questions about whether the shoes are offering an unfair advantage or are simply the most energy-efficient.
The shoe’s cushy foam midsole embedded with a single carbon fiber plate is advertised as giving athletes “the sensation of being propelled forward.” By lowering the energy expenditure, runners reduce fatigue, resulting in faster times. An independent study conducted by The New York Times found the technology actually improved runners’ efficiency 4% to 5%, which is more than what the brand claims.
In the past year, Eliud Kipchoge ran the first sub-two-hour marathon time in last fall’s INEOS 1:59 Challenge. Sifan Hassan became the first woman to win a gold medal in both the 1,500-meter and 10,000-meter events at a single World Championships or Olympic Games. Earlier last year, Britain’s middle-distance runner Laura Muir broke the British indoor mile record in a similar pair of Vaporfly prototype spikes, and Brigid Kosgei set a new women’s marathon world record. And the five fastest-ever marathons times have been recorded by runners in iterations of Nikes with the new technology.
Leveraging learnings from the elite runners’ groundbreaking successes since the release of Nike Zoom Vaporfly Elite in 2017, the Nike design team approached spike design with a fresh set of eyes. The research lab found that most runners’ final 20 meters of a 100 meter race were the slowest, and that they were actually decelerating as they crossed the finish line. The goal is to shorten the deceleration time.
“I constantly hear athletes talk about getting to a state of flow, which is this wonderful state where everything slows down and you can’t wait to occupy that space, that time, that second so that you can do exactly what you’ve been trained to do,” Hoke says.
His team is determined to provide athletes with products that allow their bodies to perform in that space.
The Nike Air Zoom Viperfly track spikes are crafted specifically for the 100-meter race. As most sprinters’ heels barely touch the ground throughout the race, the ultra-light footwear features denser knit through the body of the shoe for support and lighter knit through the heel.
More cushioning in the form of protective foam within the heel of the shoe compensates for the lighter knit, providing added protection without the weight specifically for times of deceleration.
Nike Air Zoom Viperfly track spikes
Similar to those final 20 meters of the 100-meter dash, examining basketball led researchers to determine that players experience the most fatigue in the fourth quarter, as one would expect, and that they run an average of three to four miles during gameplay. Sprinting in short, court-length bursts for three to four miles results in the most fatigue toward the end of a 40-minute Olympic basketball game.
Striving to provide a product for the most fundamentally proficient fourth quarter led the design team to the new Nike Air Zoom BB.
“The goal is to get them to the final 15 seconds without a dropped step, that they haven’t lost any ability to get to the basket or get to the ball and to keep efficient shooting form so they’re in perfect shape at the very end,” Hoke shares.
Nike React foam, which first launched in basketball sneakers in June 2017, is known for offering runners cushioning and energy return while being lightweight and maintaining durability. Typically, designs have to sacrifice comfort for energy return or weight for durability and vice versa.
The new Nike Air Zoom BB leverages Nike React foam under the heel, allowing athletes to carry less weight and receive more energy return, turning the force from their body into momentum in each step.
Two Air Zoom units are positioned under the ball of the athletes’ feet — pressure points consistent with basketball performance — to absorb and return energy, which results in reduced fatigue.
Nike Air Zoom BB
And for the Nike soccer teams, the focus comes down to ball control and the shoes’ effect on catching and passing. This brings a few firsts for Nike soccer footwear.
“If we marry these surfaces (the ball and the boot) in more of a symbiotic way, their touch radically goes up,” Hoke says of the inspiration for the innovation. “So that goes all the way up the leg into the brain, and they feel like they’re better connected to the ball.”
The Air Zoom Mercurial features a 3D-printed Flyknit-like upper, known as Flyprint, for the first time. “We’ve used skinned Flyknit or Flyknit material with a skin on top of it. We have used multiple types of synthetic and natural leathers. We’ve looked at covered canvases,” Hoke says recalling other options that were considered. Flyprint is Nike’s first 3D-printed textile upper in performance footwear and debuted on the Nike Zoom Vaporfly Elite Flyprint, worn by Kipchoge in 2017.
By thinking of the surface of the new Mercurial’s upper as a series of contoured terrains, 3D printing allows for the most precision.
“And each surface can be done specifically for a striker, a midfielder or defender,” he adds. “3D printing offers a completely new way of designing that surface.”
The cleat also features Air Zoom technology, with a 4.5 millimeter bag focusing on responsiveness more than cushioning for fatigue reduction like the larger Air Zoom systems for other sports. “When they plant their foot into the grass, and we have these cleats perfectly designed, they feel like they can push off in any direction.”
Air Zoom Mercurial
With significantly larger cushioning specifically for comfort and energy return — rather than sharp running patterns demanded of the Mercurial — the long-awaited Nike Air Zoom Alphafly NEXT% has finally been released.
Two exposed Air Zoom bags sit side by side for extra cushioning. These are designed for impact protection and performance and include the freedom to expand in order to minimize energy loss and maximize responsiveness.
A modified carbon fiber plate (different from the three exhibited in the patent docs) allows Nike to maintain the cataclysmic sensation of propelling the runner forward.
Two exposed Air Zoom bags
The plate, which is embedded in the ZoomX foam of the Alphafly NEXT%, provides stability and increased stiffness in the forefoot. And its position within the entire system also reduces stress on the ankle joint.
But there were some questions in the lead-up to the shoe’s release.
World Athletics, the governing body of track and field competitors worldwide, announced that there would be an “indefinite moratorium” on shoes with a sole exceeding 40 millimeters and containing more than one ridged embedded plate of any material.
“I believe these new rules strike the right balance by offering certainty to athletes and manufacturers as they prepare for the Tokyo 2020 Olympic Games, while addressing the concerns that have been raised about shoe technology,” said Sebastian Coe in a statement. “If further evidence becomes available that indicates we need to tighten up these rules, we reserve the right to do that to protect our sport.”
It was speculated that the combination height of the foam stack and the angle of the carbon plates could result in an unfair advantage. The stack height for the new Nike Air Zoom Alphafly NEXT% is set to increase to 39.5 millimeters, which is an increase from the 37 millimeters in the Nike ZoomX Vaporfly NEXT% that was released in 2017.
This means that the shoe won’t be affected by Friday’s World Athletics announcement.
Unseen since Kipchoge wore them in the INEOS Challenge, they’ll be available to Nike Members this month, with broader distribution later in the spring.
In what is predicted to be the hottest Olympics in history, Nike footwear innovations are dedicated to causing the lowest level of energy expenditure as possible through diving deeply into the physics of sport.
“We know that fatigue and the loss of control on space becomes where injury happens and where errors happen. We’re just trying to give athletes just a little bit more of an advantage, a little bit more confidence through our designs,” Hoke says.
After a ground-breaking year in elite running efficiency and subsequent better performance in athletes in Nikes, we’re ready to let this summer’s games begin.