Alphabet and Google CEO, Sundar Pichai, is the latest tech giant kingpin to make a public call for AI to be regulated while simultaneously encouraging lawmakers towards a dilute enabling framework that does not put any hard limits on what can be done with AI technologies.
In an op-ed published in today’s Financial Times, Pichai makes a headline-grabbing call for artificial intelligence to be regulated. But his pitch injects a suggestive undercurrent that puffs up the risk for humanity of not letting technologists get on with business as usual and apply AI at population-scale — with the Google chief claiming: “AI has the potential to improve billions of lives, and the biggest risk may be failing to do so” — thereby seeking to frame ‘no hard limits’ as actually the safest option for humanity.
Simultaneously the pitch downplays any negatives that might cloud the greater good that Pichai implies AI will unlock — presenting “potential negative consequences” as simply the inevitable and necessary price of technological progress.
It’s all about managing the level of risk, is the leading suggestion, rather than questioning outright whether the use of a hugely risk-laden technology such as facial recognition should actually be viable in a democratic society.
“Internal combustion engines allowed people to travel beyond their own areas but also caused more accidents,” Pichai writes, raiding history for a self-serving example while ignoring the vast climate costs of combustion engines (and the resulting threat now posed to the survival of countless species on Earth).
“The internet made it possible to connect with anyone and get information from anywhere, but also easier for misinformation to spread,” he goes on. “These lessons teach us that we need to be clear-eyed about what could go wrong.”
For “clear-eyed” read: Accepting of the technology-industry’s interpretation of ‘collateral damage’. (Which, in the case of misinformation and Facebook, appears to run to feeding democracy itself into the ad-targeting meat-grinder.)
Meanwhile, not at all mentioned in Pichai’s discussion of AI risks: The concentration of monopoly power that artificial intelligence appears to be very good at supercharging.
Of course it’s hardly surprising a tech giant that, in recent years, rebranded an entire research division to ‘Google AI’ — and has previously been called out by some of its own workforce over a project involving applying AI to military weapons technology — should be lobbying lawmakers to set AI ‘limits’ that are as dilute and abstract as possible.
The only thing that’s better than zero regulation are laws made by useful idiots who’ve fallen hook, line and sinker for industry-expounded false dichotomies — such as those claiming it’s ‘innovation or privacy’.
Pichai’s intervention also comes at a strategic moment, with US lawmakers eyeing AI regulation and the White House seemingly throwing itself into alignment with tech giants’ desires for ‘innovation-friendly’ rules which make their business easier. (To wit: This month White House CTO Michael Kratsios warned in a Bloomberg op-ed against “preemptive, burdensome or duplicative rules that would needlessly hamper AI innovation and growth”.)
The new European Commission, meanwhile, has been sounding a firmer line on both AI and big tech.
It has made tech-driven change a key policy priority, with president Ursula von der Leyen making public noises about reining in tech giants. She has also committed to publish “a coordinated European approach on the human and ethical implications of Artificial Intelligence” within her first 100 days in office. (She took up the post on December 1, 2019 so the clock is ticking.)
Last week a leaked draft of the Commission proposals for pan-EU AI regulation suggest it’s leaning towards a relatively light touch approach (albeit, the European version of light touch is considerably more involved and interventionist than anything born in a Trump White House, clearly) — although the paper does float the idea of a temporary ban on the use of facial recognition technology in public places.
The paper notes that such a ban would “safeguard the rights of individuals, in particular against any possible abuse of the technology” — before arguing against such a “far-reaching measure that might hamper the development and uptake of this technology”, in favor of relying on provisions in existing EU law (such as the EU data protection framework, GDPR), in addition to relevant tweaks to current product safety and liability laws.
While it’s not yet clear which way the Commission will jump on regulating AI, even the lightish-touch version its considering would likely be a lot more onerous than Pichai would like.
In the op-ed he calls for what he couches as “sensible regulation” — aka taking a “proportionate approach, balancing potential harms, especially in high-risk areas, with social opportunities”.
For “social opportunities” read: The plentiful ‘business opportunities’ Google is spying — assuming the hoped for vast additional revenue scale it can get by supercharging expansion of AI-powered services into all sorts of industries and sectors (from health to transportation to everywhere else in between) isn’t derailed by hard legal limits on where AI can actually be applied.
“Regulation can provide broad guidance while allowing for tailored implementation in different sectors,” Pichai urges, setting out a preference for enabling “principles” and post-application “reviews”, to keep the AI spice flowing.
The op-ed only touches very briefly on facial recognition — despite the FT editors choosing to illustrate it with an image of the tech. Here Pichai again seeks to reframe the debate around what is, by nature, an extremely rights-hostile technology — talking only in passing of “nefarious uses” of facial recognition.
Of course this wilfully obfuscates the inherent risks of letting blackbox machines make algorithmic guesses at identity every time a face happens to pass through a public space.
You can’t hope to protect people’s privacy in such a scenario. Many other rights are also at risk, depending on what else the technology is being used for. So, really, any use of facial recognition is laden with individual and societal risk.
But Pichai is seeking to put blinkers on lawmakers. He doesn’t want them to see inherent risks baked into such a potent and powerful technology — pushing them towards only a narrow, ill-intended subset of “nefarious” and “negative” AI uses and “consequences” as being worthy of “real concerns”.
And so he returns to banging the drum for “a principled and regulated approach to applying AI” [emphasis ours] — putting the emphasis on regulation that, above all, gives the green light for AI to be applied.
What technologists fear most here is rules that tell them when artificial intelligence absolutely cannot apply.
Ethics and principles are, to a degree, mutable concepts — and ones which the tech giants have become very practiced at claiming as their own, for PR purposes, including by attaching self-styled ‘guard-rails’ to their own AI operations. (But of course there’s no actual legal binds there.)
At the same time data-mining giants like Google are very smooth operators when it comes to gaming existing EU rules around data protection, such as by infesting their user-interfaces with confusing dark patterns that push people to click or swipe their rights away.
But a ban on applying certain types of AI would change the rules of the game. Because it would put society in the driving seat.
Laws that contained at least a moratorium on certain “dangerous” applications of AI — such as facial recognition technology, or autonomous weapons like the drone-based system Google was previously working on — have been called for by some far-sighted regulators.
And a ban would be far harder for platform giants to simply bend to their will.
So for a while I was willing to buy into the whole tech ethics thing but now I’m fully on the side of tech refusal. We need to be teaching refusal.
— Jonathan Senchyne (@jsench) January 16, 2020
Continuing our irregular surveys of the public markets, two things happened this week that are worth our time. First, a third domestic technology company — Alphabet — passed the $1 trillion market capitalization threshold. And, second, software as a service (SaaS) stocks reached record highs on the public markets after retreating over last summer.
The two milestones, only modestly related events, indicate how temperate the public waters are for technology companies today, a fact that should extend warmth into the private market where startups, and their venture capital backers, work.
The happenings are good news for technology startups for a number of reasons, including that major tech players have never had as much wealth in hand with which to buy smaller companies, and strong SaaS valuations help both smaller startups fundraise, and their larger brethren possibly exit.
Indeed, the stridently good valuations that major tech companies and their smaller siblings enjoy today should be just the sort of market conditions under which unicorns want to debut. We’ll continue to make this point so long as the public markets continue to rise, pricing tech companies that have already floated higher like the cliche’s own tide.
But while Alphabet, Microsoft and Apple are worth $3.68 trillion as a trio, and SaaS stocks are now worth 12.3x times their revenue (using enterprise value instead of market cap, for those keeping score at home), not every private, venture-backed company will necessarily benefit from public investor largesse.
How much the current public-market tech valuation expansion will help companies that are increasingly sorted into the tech-enabled bucket isn’t clear; some companies that went public in 2019 were quickly spit up by investors unwilling to support valuations that matched or rose above their final private valuations. SmileDirectClub was one such offering.
The dividing line between what counts as tech — often fuzzy — appears to be slicing along gross margin lines, and the repeatability of business. The higher margin, and more recurring a company is, the more it’s worth. This market reality is why SaaS stocks’ recent return to form is not a surprise.
For Casper and One Medical, the first two venture-backed IPO hopefuls of the year, the more tech-ish they can appear between now and pricing the better. Because technology companies today are valued so highly, perhaps even a faint dusting of tech will save their valuations as they cross the chasm between private and adult.
Alphabet this afternoon became the fourth tech giant to join the highly exclusive trillion-dollar club, one whose original member, Apple, saw its market cap soar past $1 trillion for the first time in August 2018 and which has since welcomed — and pushed back out — Amazon, which passed the $1 trillion mark in September 2018 but is now valued at $931 billion; and Microsoft, a charter member since August 2019 and now worth $1.27 trillion.
Saudi Aramco, the petroleum and natural gas company that went public last month, also now has a market value of $1.19 trillion.
That Alphabet would be the next tech giant to crack into the ranks is hardly surprising. The now 22-year-old company has grown like gangbusters since its second year in business and has exploded in value since going public in 2004. Still, it’s impossible not to draw a line between today’s development and the news in early December that the company’s founders, Larry Page and Sergey Brin, were handing over day-to-day control to Sundar Pichai, the CEO of Alphabet’s Google since 2015. (That’s when Alphabet itself was incorporated as a holding company.)
For one thing, investors seem to like that much of Pichai’s compensation is tied to the company’s performance. According to an SEC filing from last month, Pichai — now the CEO of both Google and Alphabet — will receive $2 million in salary per year, but he’s poised to earn much more — at least $150 million — if the company hits certain performance targets this year, next year and in 2022.
Analysts have also said they’re hopeful the leadership transition will see Alphabet become more transparent when it comes to reporting its financials to investors. Indeed, despite the company’s many holdings — from YouTube to Waymo, its self-driving car business — Alphabet has been famously vague when it comes to explaining how its various bets are panning out.
Not last, there’s a widespread expectation that Alphabet will become more amenable to larger share buybacks, or that it might institute a dividend payment for the first time because so much of Pichai’s bonus is tied to share performance.
Naturally there are broader trends that have led to this moment.
Alphabet has long been the biggest beneficiary of the ongoing shift online of global advertising and marketing spending, and it has only tightened its grip on the market over time. Just Tuesday, its Google unit announced plans to phase out support for third-party cookies in Chrome within the next two years, which could be the death knell for the rest of the long-suffering online ad industry.
Meanwhile, despite questions about some of its subsidiaries, including Waymo, whose progress has been slower than expected, its 2006 acquisition of YouTube has proven one of the smartest and most lucrative deals in internet history.
Either way, as the WSJ notes, citing Dow Jones Market Data, it took Alphabet nearly two years to rise from a company with an $800 billion market cap to one that enjoyed a $900 billion market cap. In contrast, it has jumped from $900 billion to $1 trillion in just the last several months.
Look, this is the last post I’m writing in 2019 and I’m tired. But I can’t let the year close without taking stock of how well tech stocks did this year. It was bonkers.
So let’s mark the year’s conclusion with some notes for our future selves. Yes, we know that the Nasdaq has been setting new records and SaaS had a good year. But we need to dig in and get the numbers out so that we can look back and remember.
Let’s cap off this year the way it deserves to be remembered, as a kick-ass trip ’round the sun for your local, public technology company.
We’ll start with the indices that we care about:
Next, the highest-value U.S.-based technology companies:
Now let’s turn to some companies that we care about, even if they are smaller than the Big Five:
And so on.
The technology industry’s epic run has been so strong that The Wall Street Journal noted this morning that, powered by tech companies, U.S. stocks “are poised for their best annual performance in six years.” The Journal highlighted the performance of Apple and Microsoft in particular for helping drive the boom. I wonder why.
How long will we live in the neighborhood of Nasdaq 9,000? How long can two tech companies be worth more than $1 trillion at the same time? How long can the biggest tech companies be worth a combined $4.93 trillion (I remember when $3 trillion for the Big Five was news, and I recall when the group reach a collective value of $4 trillion).1
But the worst trade in recent years has been the pessimists’ gambit. No matter what, stocks have kept going up, short-term hiccoughs and other missteps aside.
For nearly everyone, that is. While tech stocks in general did very well, some names that we all know did not. Let’s close on those reminders that a rising tide lifts only most boats.
Several of the most lackluster public tech companies were 2019 technology IPOs, interestingly enough. Who didn’t do well? Uber earns a spot on the naughty list for not only being underwater from its IPO price, but also from its final private valuations. And as you guessed, Lyft is down from its IPO price as well, which is not good.
Some 2019 IPOs did well in the middle of the year, but fell a little flat as the year came to a close. Pinterest, Beyond Meat and Zoom meet that criteria, for example. And some SaaS companies struggled, even if we think they will reach $1 billion in revenue in time.
But it was mostly a party. The public markets were good, and tech stocks were great. This helped create another 100+ unicorns in the year.
Such was 2019. On to 2020!
Waymo has acquired Latent Logic, a UK company that spun out of Oxford University’s computer science department, as the autonomous vehicle company seeks to beef up its simulation technology.
The acquisition also marks the launch of Waymo’s first European engineering hub will be in Oxford, UK. This likely won’t be the end of Waymo’s expansion and investment in Europe and the UK. The former Google self-driving project that is now an Alphabet business said it will continue to look for opportunities to grow the team in the UK and Europe.
Earlier this year, Waymo locked in an exclusive partnership with Renault and Nissan to research how commercial autonomous vehicles might work for passengers and packages in France and Japan. In October, Waymo said that its working with Renault to study the possibility of establishing an autonomous transportation route in Paris.
Waymo has made simulation a one of the pillars of its autonomous vehicle development program. But Latent Logic could help Waymo make its simulation more realistic by using a form of machine learning called imitation learning.
Imitation learning models human behavior of motorists, cyclists and pedestrians. The idea is that by modeling the mistakes and imperfect driving of humans, the simulation will become more realistic and theoretically improve Waymo’s behavior prediction and planning.
Waymo isn’t sharing financial details of the acquistion. But it appears that the two founders Shimon Whiteson and João Messia, CEO Kirsty Lloyd-Jukes and key members of the engineering and technical team will join Waymo. The Latent Logic team will remain in Oxford.
In June, PayPal announced its Chief Operating Officer Bill Ready would be departing the company at the end of this year. Now we know where he’s ending up: Google. Ready will join Google in January as the company’s new commerce chief, reporting directly to Prabhakar Raghavan, SVP, Ads, Commerce and Payments.
Ready’s role at Google will not involve payments, which means he won’t be directly involved with PayPal’s competitor, Google Pay. Instead, as Google’s new president of Commerce, Ready will focus on leading Google’s vision, strategy and delivery of its commerce products. However, the role will see Ready working in close partnership with both the advertising and payments operations.
Google’s prior head of ads, commerce and payments, Sridhar Ramaswamy, left the company in 2018 after more than 15 years, which is when Raghavan stepped in. But Ready’s role is a new one, as it will focus on commerce specifically.
“Bill’s exceptional track record building great experiences for consumers and deeply strategic partnerships makes him a powerful addition to our team. I couldn’t be more excited for the future of commerce at Google,” said Raghavan, in a statement.
Added Ready, “I’ve long admired how Google has enabled access to the digital economy for everyone. Google has been making world-class commerce capabilities universally accessible to partners of all sizes, and I look forward to furthering that mission,” he said.
Ready joined PayPal in 2013 when it acquired his startup, the payments gateway Braintree, for $800 million (he became CEO of Braintree and Venmo). Today, Braintree powers payments for businesses like Uber, Airbnb, Facebook and Jet.com, while Venmo sees more than $25 billion in transaction volume on a quarterly basis.
Once at PayPal, Ready moved up the ranks to become EVP and COO in 2016. In this role, he was responsible for product, technology and engineering at PayPal, as well as the end-to-end customer experiences for PayPal’s consumer, merchant, Braintree, Venmo, Paydiant and Xoom businesses. He was also co-chair of PayPal’s Operating Group, which focuses on delivering on revenue and profit goals for the company.
At PayPal, Ready was behind a number of the company’s biggest moves, including the introduction of its most-rapidly adopted product ever, PayPal One Touch, as well as Pay with Venmo, the redesign of the PayPal mobile app, PayPal Commerce and the expansion of Braintree’s global reach.
PayPal announced Ready’s plans for departure this summer, saying he was planning to engage in other entrepreneurial interests outside the company.
Heading up commerce at Google will be a big task for Ready, given commerce’s close proximity to parent company Alphabet’s main source of revenue, which is advertising. In Q3 2019, Google’s ad revenue was $33.92 billion out of total revenue of $40.5 billion.
Today, many consumers visit Google first to shop for products, which allows it to charge top dollar for its ads. But over the years, Amazon has been steadily chipping away at Google’s lead as more consumers go directly to its site to hunt for products.
To address this challenge, Google has begun to transform its Shopping business.
At Google Marketing Live this year, Google unveiled a new look and feel for its shopping properties, which included rebranding its Google Express app as the new Google Shopping app. The goal with the changes is to better serve the way consumers now shop online. Today, people often start “shopping” by doing things like browsing Pinterest for inspiration or seeing what influencers are posting on Instagram, for example. Instagram capitalized on this trend with the launch of Instagram Shopping in March, which allows users to checkout right in its app.
PayPal is also now moving in this direction. The company recently made its largest-ever acquisition with a $4 billion deal for shopping and awards platform Honey. With Honey’s integrations, PayPal will be able to target shoppers with personalized promotions and offers earlier on in their shopping journey, then direct them to PayPal’s checkout as the final step.
Google’s commerce plans are similar in that regard.
It envisions a universal cart and new ways to shop across its platform of services, including Search, Shopping, Images, and even YouTube and Gmail. This will allow Google to also capture shoppers’ attention as they engage with Google properties — like browsing images for product ideas or watching YouTube videos, for example.
As a part of the Google Shopping revamp, the dedicated Shopping homepage was updated to allow consumers to filter products by brands they love, features they want, as well as read product reviews and videos. Shoppers could add items to a universal cart where purchases were backed by a Google guarantee, as well as receive customer service and make easy returns, as before with Google Express.
Google’s travel business also falls under commerce, and similarly received new attention this year with updates designed to simplify the experience of trip planning on google.com/travel, and more features around tracking flight price drops and predictions.
On the advertising side, Google’s highly visual Showcase Shopping ads were expanded outside of Google Shopping. And Shopping Actions — customers’ ability to shop directly from Google surfaces, like Google Assistant — are making their way to new services, like YouTube.
Google is also ramping up its ability to serve smaller and local businesses with features aimed at driving in-store pickup traffic to brick-and-mortar stores.
Critical to making Google’s new Shopping platform successful is being able to forge retail partnerships — as, unlike Amazon, Google itself is not really in the business of selling directly to consumers, outside of its own hardware devices.
Ready’s experience will prove valuable here, too. At PayPal, he was able to build strategic partnerships with a number of unlikely players — including Visa, Mastercard, Apple, Walmart, Samsung, and even Google.
What Ready’s strategy and vision will more precisely entail for Google will have to wait until after he’s on board, however.
“I’m thrilled to welcome Bill to Google as we continue our work to create more helpful commerce experiences and build a thriving ecosystem for partners of all sizes,” said Sundar Pichai, CEO of Google and Alphabet.
Image Credits: Getty Images — Bloomberg/Contributor; Ready: Google
Now that Larry Page has stepped down as CEO of Google’s parent company Alphabet, he could be following in Bill Gates’s footsteps and tackling global health challenges.
According to charity and business documents obtained by TechCrunch, the billionaire co-founder of Google has been quietly waging a war on the flu.
Thousands of children and teachers in San Francisco’s Bay Area will receive free flu shots at their schools this year from Shoo The Flu, which describes itself as a “community-based initiative.” In fact, it is wholly funded by a for-profit company controlled by Page. Another of his companies, Flu Lab, is supporting multi-million dollar efforts to develop a universal flu vaccine. Neither effort makes public Page’s role in them.
Comedian Sacha Baron Cohen has waded into the debate about social media regulation.
In an award-acceptance speech to the Anti-Defamation League yesterday, the creator of Ali G and Borat delivered a precision take-down of what he called Facebook founder Mark Zuckerberg’s “bullshit” arguments against regulating his platform.
The speech is well worth watching in full as Cohen articulates, with a comic’s truth-telling clarity, the problem with “the greatest propaganda machine in history” (aka social media platform giants) and how to fix it: Broadcast-style regulation that sets basic standards and practices of what content isn’t acceptable for them to amplify to billions.
“There is such a thing as objective truth,” said Cohen. “Facts do exist. And if these internet companies really want to make a difference, they should hire enough monitors to actually monitor, work closely with groups like the ADL and the NAACP, insist on facts and purge these lies and conspiracies from their platforms.”
Attacking social media platforms for promulgating “a sewer of bigotry and vile conspiracy theories that threaten our democracy and to some degree our planet,” he pointed out that freedom of speech is not the same as freedom of reach.
“This can’t possibly be what the creators of the internet had in mind,” he said. “I believe that’s it’s time for a fundamental rethink of social media and how it spreads hate, conspiracies and lies.”
“Voltaire was right. Those who can make you believe absurdities can make you commit atrocities — and social media lets authoritarians push absurdities to billions of people,” he added.
Cohen also rubbished Zuckerberg’s recent speech at Georgetown University in which the Facebook founder sought to appropriate the mantle of “free speech” to argue against social media regulation.
“This is not about limiting anyone’s free speech. This is about giving people — including some of the most reprehensible people in history — the biggest platform in history to reach a third of the planet.”
“We are not asking these companies to determine the boundaries of free speech across society, we just want them to be responsible on their platforms,” Cohen added.
On Facebook’s decision to stick by its morally bankrupt position of allowing politicians to pay it to spread lying, hatefully propaganda, Cohen also had this to say: “Under this twisted logic if Facebook were around in the 1930s it would have allowed Hitler to post 30-second ads on his solution to the ‘Jewish problem.’ ”
YouTube also came in for criticism during the speech, including for its engagement-driven algorithmic recommendation engine which Cohen pointed out had single-handedly recommended videos by conspiracist Alex Jones “billions of times.”
Just six people decide what information “so much of the world sees,” he noted, name-checking the “silicon six” — as he called Facebook’s Zuckerberg, Google’s Sundar Pichai, Alphabet’s Larry Page and Sergey Brin, YouTube’s Susan Wojcicki and Twitter’s Jack Dorsey.
“All billionaires, all Americans, who care more about boosting their share price than about protecting democracy. This is ideological imperialism,” he went on. “Six unelected individuals in Silicon Valley imposing their vision on the rest of the world, unaccountable to any government and acting like they’re above the reach of law.
“It’s like we’re living in the Roman Empire and Mark Zuckerberg is Caesar. At least that would explain his haircut.”
Cohen ended the speech with an appeal for societies to “prioritize truth over lies, tolerance over prejudice, empathy over indifference, and experts over ignoramuses” and thereby save democracy from the greed of “high tech robber barons.”
Yodel.io, an Austria-founded startup that developed a “digital receptionist” to help SMBs and other small teams handle in and outbound phone-calls, has picked up $1 million in “pre-seed” funding. It brings total funding to just over $1.8 million.
Backing this round is EXF Alpha, the fund of the European Super Angels Club, and various other unnamed European angel investors. This investment will be used to establish a New York office, in addition to the startup’s existing presence in Vienna, London and San Francisco.
In development since 2016 and a Seedcamp alumni, Yodel’s tech acts as a digital phone receptionist that plugs into popular team chat applications such as Slack, Zapier, and Drift to help SMBs handle calls more efficiently. The idea is to provide these small and medium-sized businesses with call-handling technology more akin to that typically available to larger enterprises but at a price they can afford.
It is similar thinking to Google’s recently launched CallJoy, although Yodel argues its product is better and says it is already used by over 2,000 SMBs in 30 languages across 47 countries.
Yodel and CallJoy both offer the ability to transcribe calls, manage inbounds through “human-like” answering, log calls, tag calls and record calls.
However, in addition, Yodel says its tech also allows for customisable canned responses, and that its AI is able to ask for a reason for the call and then process calls accordingly. Other features include call conferencing, and the ability to send and receive SMS messages.
“SMBs are stuck with old school phone systems that lack flexibility,” explain two of Yodel’s co-founders, Nina Hödlmayr and Mike Heininger, in an email. “At the same time, customers of SMBs don’t receive the support they expect via the phone, they want the processes and systems of the multinationals, without considering the backend costs.
The pair argue that by using Yodel, less well-resourced companies can offer voice calls for customers, which they argue is still the most direct channel. “This is an effective way of increasing sales and having fewer unsatisfied customers,” they tell TechCrunch.
Yodel.io Slack integration: waiting inbound call
“The caller receives a better experience by being greeted from a digital voice assistant and getting forwarded to the right team member. The company views all information in one place without needing to switch tools. This is also a main benefit for distributed and modern teams. Each bit of information is shared and can be collaborated on which improves decisions and overall internal knowledge”.
Operating a typical SaaS model, Yodel charges per “seat” per month. This includes a phone number per user, unlimited inbound minutes and call credit for outbound calls. There are additional fees for more outbound minutes and additional phone numbers. Depending on features the subscription is with $25 per month or $35 per month.
Twiga, a B2B food distribution company, will use its funds to set up a distribution center in Nairobi and deepen its conversion to offering supply chain services for both agricultural and FMCG products.
The startup is also targeting Pan-African expansion to French speaking West Africa by third quarter 2020, CEO Peter Njonjo told TechCrunch.
The venture has moved quickly on diversifying its supply-chain product mix. “We’re not just doing fruits and vegetables…I’d say we’re at 50/50 now between FMCG and fresh,” said Njonjo.
Twiga doesn’t plan to move toward entering or supplying B2C e-commerce, where it could become a competitor to other online retailers, such as Jumia.
But the company has factored for advantages in the B2C e-commerce space. “If you’re able to serve Nairobi’s 180,000 retailers, it means that the furthest customer would be less than two kilometers away from any shop. That’s the power of building a B2C business on top of a B2B platform. So definitely, the potential is there,” said Njonjo.
China is known for its relationship with Africa based on trade and infrastructure, but not so much for tech. That’s changing with a number of Chinese actors increasing the country’s digital influence across the continent’s tech markets.
This includes Africa focused mobile phone Transsion’s IPO and planned expansion in Africa and recent moves on the continent by Alibaba and Chinese owned Opera.
In an ExtraCrunch feature, TechCrunch detailed China’s growing tech ties with Africa and what they could mean for the continent’s innovation ecosystem and Africa’s relationship with China overall.
In two stories in Ocotober, TechCrunch followed Jumia’s IPO lockup expiry and volatile share-price ahead of the Jumia’s November third-quarter earnings call.
The Africa focused e-commerce company — with online verticals in 14 countries — has had a bumpy ride since becoming the first tech venture operating in Africa to list on a major exchange. Jumia saw its opening share price of $14.50 jump 70% after its NYSE IPO in April.
Then in May, Jumia’s stock tumbled when it came under assault from a short-seller, Andrew Left, who accused the company of fraud in its SEC filings.
In August, Jumia’s 2nd quarter earnings showed upside and downside: revenue growth still with big losses. Much of it may have been overshadowed by Jumia’s own admission of a fraud perpetrated by some employees and agents of its JForce sales program.
Jumia’s core investors appeared to show continued confidence in the company in October, when there wasn’t a big sell-off after the IPO lockup period expired.
It appears that what Jumia disclosed does not validate the claims in Citron Research’s May report. But the markets still seem wary of the company’s stock, which now stands at roughly half its opening IPO price.
Jumia will have a chance to clear up any lingering confusion and showcase its latest numbers on its third-quarter earnings call November 12.
TechCrunch reported additional details to two big African tech market events that happened over the last year. First, Naspers Foundry’s new leader, Phuthi Mahanyele-Dabengwa, confirmed the 1.4 billion rand (≈$100 million) VC arm of South Africa’s Naspers is accepting pitches.
Announced in late 2018, Naspers Foundry will make equity investments in various amounts, primarily from Series A up to Series B in South African ventures. Founders from other parts of Africa with startup operations in South Africa can be considered for funding, Mahanyele-Dabengwa clarified.
CcHub and iHub CEO Bosun Tijani revealed more detail about the recent merger of both names. CcHub – iHub will pursue more operating revenue from consulting and VC investing, vs. grants, according to Tijani. The new Nigeria and Kenya based innovation network will also look to bring an Africa startup tour to the U.S. and is considering opening an office in San Francisco, he said.
More Africa-related stories @TechCrunch
At the recent TechCrunch Disrupt SF, Senegalese VC investor Marieme Diop suggested that Silicon Valley’s unicorn IPO model might not be right for African startups. The is largely because the …
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