Under new guidance issued by the Small Business Administration it seems non-profits and faith-based groups can apply for the Paycheck Protection Program loans designed to keep small business afloat during the COVID-19 epidemic, but most venture-backed companies are still not covered.
Late Friday night, the Treasury Department updated its rules regarding the “affiliation” of private entities to include religious organizations but keep in place the same rules that would deny most startups from receiving loans.
(b) If you are a faith-based organization, *no affiliation rules apply to you,* because the SBA just said so. Out of nowhere. At like 10pm on a Friday night.
— Doug Rand (@doug_rand) April 4, 2020
The NVCA and other organizations had pushed Treasury Secretary Steve Mnuchin to clarify the rules regarding startups and their potential eligibility for loans last week. And House Republican leader Kevin McCarthy even told Axios that startups would be covered under the revised regulations.
2/ There are rumors that the PPP Loan program may still fix the Affiliate Rule next week. Until fixed, it's nearly impossible for most VC-backed startups to apply because it would require huge legal lift to amend all of the charters of these companies to change control provisions
— Mark Suster (@msuster) April 4, 2020
At its essence, the issue for startups seems to be centered on the board rights that venture investors have when they take an equity stake in a company. For startups with investors on the board of directors, the decision-making powers that those investors hold means the startup is affiliated with other companies that the partner’s venture firm has invested in — which could mean that they’re considered an entity with more than 500 employees.
“[If] there’s a startup that’s going gangbusters right now, they shouldn’t apply for a PPP loan,” wrote Doug Rand, the co-founder of Seattle-based startup Boundless Immigration, and a former Assistant Director for Entrepreneurship in the Office of Science and Technology Policy during the Obama administration, in a direct message. “But most startups are getting killed because, you know, the economy is mostly dead.”
The $2 trillion CARES Act passed by Congress and signed by President Trump was designed to help companies that are adversely affected by the economic fallout resulting from the COVID-19 outbreak in the US and their employees — whether those businesses are directly affected because their employees can’t leave home to do their jobs or indirectly, because demand for goods and services has flatlined.
While some tech startups have seen demand for their products actually rise during these quarantined days, many companies have watched as their businesses have gone from one to zero.
The sense frustration among investors across the country is palpable. As the Birmingham-based investor, Matt Hottle, wrote, “After 4 days of trying to help 7 small businesses navigate the SBA PPP program, the program went to shit on launch. I’m contemplating how many small businesses, counting on this money, are probably locked out. I feel like I/ we failed them.”
After 4 days of trying to help 7 small businesses navigate the @SBAgov PPP program, the program went to shit on launch. I’m contemplating how many small businesses, counting on this money, are probably locked out. I feel like I/ we failed them.
— Matt Hottle (@MattRedhawk) April 4, 2020
And although the rules around whether or not many startups are eligible remain unclear, it’s probably wise for companies to file an application, because, as the program is currently structured, the $349 billion in loans are going to be issued on a first-come, first-served basis, as Suster flagged in his tweets on the subject.
General Catalyst is advising its companies that are also backed by SBIC investors to apply for the loans, because that trumps any other rules regarding affiliation, according to an interview with Holly Maloney Burbeck, a managing director at the firm.
And there’s already concerns that the money could run out. In a tweet, the President announced that he would request more money from Congress “if the allocated money runs out.”
I will immediately ask Congress for more money to support small businesses under the #PPPloan if the allocated money runs out. So far, way ahead of schedule. @BankofAmerica & community banks are rocking! @SBAgov @USTreasury
— Donald J. Trump (@realDonaldTrump) April 4, 2020
“Congress saw fit to allow Darden to get a forgivable small business loan—actually a taxpayer-funded grant—for like every Olive Garden in America. But Congress somehow neglected to provide comparable rescue measures for actual small businesses that have committed the sin of convincing investors that they have the potential to employ a huge number of people if they can only survive,” Rand wrote in a direct message. “The Trump administration has full authority to ride to the rescue, and they did… but only for large religious organizations.”
With movie theaters largely closed due to the COVID-19 pandemic, Disney is pushing back its slate of upcoming films. And at least one movie won’t be making it into theaters at all, with “Artemis Fowl” heading straight to streaming instead.
The company announced today that that the film will debut exclusively on Disney+, and that the release date will be revealed soon.
All of the Hollywood studios are scrambling to adapt to the theatrical closures. NBCUniversal broke the theatrical window by releasing “The Hunt,” “The Invisible Man” and “Emma” as streaming rentals while they were ostensibly still in theaters, and it will release “Trolls World Tour” digitally on April 10 — the same day as its official theatrical release.
Other studios followed suit. There were also reports that Paramount struck a deal to debut the Kumail Nanjiani/Issa Rae comedy “The Lovebirds” on Netflix instead of in theaters, but there’s been no announcement or release date yet.
Disney, meanwhile, already brought “Frozen 2” to Disney+ early, then took more aggressive steps for the Pixar film “Onward,” which went on-sale digitally just a few weeks after its release in theaters, and is launching on Disney+ today.
Directed by Kenneth Branagh, “Artemis Fowl” tells the story of a young criminal mastermind of the same name, and it’s based on a series of young adult fantasy novels by Eoin Colfer. It was originally scheduled for release on August 9, 2019, before being delayed until May 29 of this year.
So why not delay it again, as Disney is doing with other films? It may simply be less of a sure bet in theaters than “Mulan,” “Black Widow” or even “Jungle Cruise.”
“Director Kenneth Branagh and his spectacular cast take viewers right into the vibrant, fantasy world of the beloved book, which fans have been waiting to see brought to life onscreen for years,” said Disney+ President of Content and Marketing Ricky Strauss. “It’s great family entertainment that is the perfect addition to Disney+’s summer lineup.”
That much was pretty clear already, and other reports have already suggested that Disney+ was the most downloaded app and biggest search trend in the United States last year. Now a new report from mobile intelligence company Apptopia and customer engagement platform Braze suggests that Disney’s streaming service has continued its spectacular success into 2020.
The report examines the months leading up to and after the service’s U.S. launch, and it includes charts of the most popular streaming apps for the first three months of 2020.
According to those charts, Netflix was the most downloaded streaming app globally, with 59.1 million downloads, followed by YouTube at 39.4 million. Disney+ (which is currently launching across Europe and India) was number seven on the list, with 17.5 million downloads.
In the United States however, Disney+ leads with 14.1 million downloads, versus 11.9 million for Netflix (which may have already saturated the U.S. market) and 8.1 million for Hulu (which is also owned primarily by Disney).
Lest you think this is purely a one-on-one contest between Netflix and Disney, it’s also worth noting that neither of them wins on time spent in-app — instead, it’s YouTube Kids that wins in both the United States and globally.
And yes, the COVID-19 pandemic is leading to even more streaming, with the report showing a 30.7% increase in streaming sessions in March
The report suggests that the success of Disney+ means that there’s still room for new streaming services. (It might, however, simply reflect Disney’s dominance of the entertainment world. It remains to be seen whether Quibi, NBCUniversal’s Peacock and WarnerMedia’s HBO Max can achieve similar success as they launch in the coming months.)
The report also looks at strategies that successfully drive engagement, as measured by daily active users. It points out that the most popular brands are 21% more likely to send push notifications and 300% more likely to send in-app messages. It also concludes that “content that creates fandom is king”:
Adult Swim’s cartoon series Rick and Morty proved to be the most effective content for generating both short-term and long-term monthly active users (MAU). Over the course of the most recent season of Rick and Morty, the Adult Swim app’s daily active users (DAU) increased by 504%. Amazon Prime Video’s The Marvelous Mrs. Maisel, HBO’s Game of Thrones, and sporting events also drove DAU growth in a meaningful way.
Two Tesla employees, who had been working at home for nearly two weeks, have tested positive for COVID-19, according to an internal email sent Thursday morning by the company’s head of environmental, health, and safety department and viewed by TechCrunch .
The employees were not symptomatic in the office, and both are quarantined at home and recovering well, according to the email from Tesla’s EHS department head Laurie Shelby. Their co-workers, who were already working from home for nearly two weeks as well, were notified so they can quarantine, the email read. The email did not disclose what locations the employees were working at.
“In both cases, interactions with the individuals had a low likelihood of transmission based on the minimal staff onsite and social distancing measures we took earlier this month,” Shelby wrote in the email.
Tesla could not be reached for comment. Business Insider previously reported on the same internal email.
The email has heightened concern among several Tesla employees that TechCrunch has spoken to, as they weigh the risk of coming into work or using paid-time off or unpaid leave to stay at home. Tesla employs more than 48,000 people at its headquarters, factories, sales and service centers and delivery hubs throughout the U.S. While some employees are able to work from home, the company still has workers at its delivery and service centers as well as an estimated 2,500 people at its Fremont, Calif. factory.
Tesla suspended production at its Fremont factory beginning March 23, days after a shelter-in-place order went into effect in Alameda County due to the COVID-19 pandemic. Some basic operations that support Tesla’s charging infrastructure and what it describes as its “vehicle and energy services operations” have continued at the factory, which under normal circumstances employs more than 10,000 people.
The decision to suspend production at Fremont came after a multi-day public tussle between the automaker and local officials in Alameda County over what was considered an “essential” business.
Tesla has also suspended operations at its factory in Buffalo, N.Y., except for “those parts and supplies necessary for service, infrastructure and critical supply chains,” the company said in a statement. Tesla CEO Elon Musk tweeted Wednesday that he plans to reopen the Buffalo factory to produce ventilators, a critical piece of medical equipment used in severe cases of COVID-19.
The email comes just two days after reports of at least two positive COVID-19 cases at SpaceX, another company headed up Musk. The positive cases at SpaceX sent some employees into quarantine, CNBC reported. The company is making hand sanitizer in house and taking other steps to protect nervous workers, according to CNBC. TechCrunch could not reach SpaceX for comment.
COVID-19, the disease caused by coronavirus, has rippled through corporate and industrial America. Manufacturers have suspended production of vehicles, tech companies have ordered employees to work from home and city, county and state governments have issued a variety of orders to try and slow the spread of COVID-19.
For instance, California Gv. Gavin Newsom issued a stay-at-home directive that ordered all nonessential businesses to close and for residents to only leave their homes for essential needs like groceries or to visit the pharmacy. Other states where Tesla has operations such as New York are also under a stay-at-home order.
Musk’s actions during the pandemic have caused a variety of reactions among employees, critics and his millions of Twitter followers. He has appeared dismissive of COVID-19 in emails to employees and on Twitter, where he has spread a misinformation on the disease, including that children are “essentially immune,” a statement that contradicts with information provided by the Centers for Disease Control and Prevention. In one internal email sent to SpaceX employees, Musk noted that they were more likely to die in a car crash than from the disease.
Even as Musk seemed to downplay the disease, he has also stepped up to donate medical supplies needed by hospitals and has directed employees to not come to work if they feel ill or are uncomfortable. Tesla employees have received emails from human resources head Valerie Workman that if they could not or were reluctant to come to work they could use PTO or take unpaid time off after they exhaust their PTO. The email told one employee (who spoke to TechCrunch on condition of anonymity) that they would be not be penalized for their decision or face disciplinary action for attendance based on health or impossibility to come to work.
Musk has also donated essential personal protective equipment to hospitals that are facing a shortage of these supplies and has committed to trying to help ramp up production of ventilators.
500 Startups is scrapping its cohort model for accelerating companies and moving to a rolling admissions process, the accelerator said during its latest demo day.
One of the progenitors of the accelerator model in the US along with Techstars and Y Combinator, 500 has been a cornerstone of the early-stage company building platform. The move to a rolling admissions mirrors an approach taken by other accelerator programs including MuckerLab, the wildly successful Los Angeles-based early stage program.
“Demo is changing the way it runs its accelerator to be rolling recruitment,” said Aaron Blumenthal, a 500 Startups venture partner. “It will be making investment decisions year round instead of twice a year. Demo Days will still happen twice a year, founders can pick which Demo Day they want to be a part of.”
Given the profusion of accelerator programs globally, the move to a rolling admissions schedule likely makes sense, giving entrepreneurs more flexibility around when and how they join.
The decision from 500 follows other significant changes from Y Combinator, which is moving to a virtual model for its own accelerator program — a decision influenced by the global response to the COVID-19 epidemic which has disrupted economies and threatened lives globally.
Blumenthal explained the switch in a blog post. Writing:
In a business where timing is everything, I realized the current accelerator model was serving an injustice to founders. That’s why shortly after I was put in charge of our flagship accelerator, I knew it was time to do exactly what we tell our founders to do every day—to innovate. So, after shepherding 26 batches of thousands of founders over the past 10 years, 500 is shaking things up.
We’re proud to announce that we’ve designed an entirely new platform that’s flexible and tailored to our founders’ timing and needs—not our own. Our goal is to move away from the one-size-fits-all approach of the past, and towards delivering relevant content, based on each founders’ growth stage and needs, precisely when they’re ready for it.
This new flexible approach reinforces our continued commitment to invest in founders from all over the world. We realize it’s not always feasible for every founder to move to San Francisco for four months at the drop of a hat, and we want to accommodate for that.
You can expect to see our new model in action in the near future. After we wrap up Batch 26’s Demo Day on March 26th, our accelerator applications will open indefinitely. We’ll begin accepting founders to our program on a continuous rolling basis, with more flexibility on start and end dates. That means no more application deadlines, and no more missing out on companies because the timing isn’t right. There will still be two demo days per year and plenty of opportunities to take advantage of the expertise the entire 500 community has to offer — all that changes is our flexibility to invest in companies and founders we believe in and their ability to join our programming when it’s the right time for them.
TechCrunch has covered 500’s current batch of startups here, and will have a post up shortly about our favorites from its demo day.
There are already a number of resources available for mapping the spread of confirmed COVID-19 cases both in the U.S. and globally, but IBM and its subsidiary The Weather Company have launched new tools that bring COVID-19 mapping and analysis to more people via their Weather Channel mobile app and weather.com.
Existing tools are useful, but come from fairly specialized sources including the World Health Organization (WHO) and Johns Hopkins University. This new initiative combines data fro these same sources, including global confirmed reported COVID-19 cases, as well as reported data from sources at both the state and county level. This is collected on a so-called “incident map” that displays color-coded reported case data for states and counties, as well as on state-wide trend graphs and through reporting of stats including relative percentage increase of cases week-over-week.
On top of these sections built into the core, consumer-facing Weather.com products, IBM has also launched a more in-depth analytics reporting dashboard, providing views of global reported COVID-19 cases, as well as rate of spread based on available data, county-by-county stats and more.
This information from IBM, which runs on its Watson and Cognos Analytics tools, are intended for use by both researchers and public officials – but they’re also meant for general public consumption. IBM is also providing resources including fact-checking resources and practical guidance for both COVID-19 patients and the general public, to help not only inform people about the spread of the virus, but also the steps they can take to protect themselves and others.
One of the key elements of COVID-19 mitigation is making sure that the average American has access to reliable and accurate information, including the most up-to-date guidelines about social distancing and isolation from trusted experts including the WHO and the Centers for Disease Control and Prevention (CDC). That makes this a key resource in the ongoing efforts to curb the spread of the coronavirus, since it resides in an app that is among the most popular pieces of software available for smartphones. There are around 45 million or so monthly active users of the Weather Channel app, which means that this information will now be readily accessible by a large percentage of the U.S. population.
Disney+ launches in seven European countries, Microsoft admits to a “critical” Windows security flaw and we review the new iPad Pro. Here’s your Daily Crunch for March 24, 2020.
As expected, Disney announced that it is officially launching its streaming service across seven markets in Europe — but doing so using reduced bandwidth given the strain on broadband networks as more people are staying home because of the coronavirus pandemic.
So starting today, Disney+ will be live in the U.K., Ireland, Germany, Italy, Spain, Austria and Switzerland; Disney also confirmed a delayed debut in France on April 7. This is the largest multi-country launch for the service so far.
The security flaw, which Microsoft deems “critical” — its highest severity rating — is found in how Windows handles and renders fonts, according to the advisory posted Monday. The bug can be exploited by tricking a victim into opening a malicious document. Once the document is opened — or viewed in Windows Preview — an attacker can remotely run malware, such as ransomware, on a vulnerable device.
Matthew Panzarino has been using an iPad Pro as his main portable work machine for the past 18 months. This week, he tried out the latest version of the device, concluding that it offers an attractive refresh for new buyers — but not for owners of the 2018 model.
Ford has announced the details of its current manufacturing efforts around building much-needed medical supplies for frontline healthcare workers and COVID-19 patients. Its efforts include building Powered Air-Purifying Respirators with partner 3M.
The TechCrunch team was curious —especially in the wake of the troubled Casper IPO — about how investor sentiment might have shifted and what venture capitalists are looking for in the category, so we asked some smart investors. (Extra Crunch membership required.)
Starting today, anybody in the U.S. can sign up and get a Revolut debit card. For this launch, Revolut has partnered with Metropolitan Commercial Bank for the banking infrastructure — deposits are FDIC-insured up to $250,000.
Firefox Better Web with Scroll combines the tracking protection built into Mozilla’s Firefox browser with the ad-free browsing experience offered by Scroll. Anyone in the United States who’s interested in trying this out can sign up for a Firefox account and install the Better Web with Scroll extension.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.
Disney+, the streaming service from the Walt Disney Company, has been rapidly ramping up in the last several weeks. But while some of that expansion has seen some hiccups, other regions are basically on track. Today, as expected, Disney announced that it is officially launching across 7 markets in Europe — but doing so using reduced bandwidth given the strain on broadband networks as more people are staying home because of the coronavirus pandemic. From today, it will be live in the U.K., Ireland, Germany, Italy, Spain, Austria and Switzerland; Disney also reconfirmed the delayed debut in France will be coming online on April 7. It’s the largest multi-country launch so far for the service.
“Launching in seven markets simultaneously marks a new milestone for Disney+,“ said Kevin Mayer, Chairman of Walt Disney Direct-to-Consumer & International, in a statement. “As the streaming home for Disney, Marvel, Pixar, Star Wars, and National Geographic, Disney+ delivers high-quality, optimistic storytelling that fans expect from our brands, now available broadly, conveniently, and permanently on Disney+. We humbly hope that this service can bring some much-needed moments of respite for families during these difficult times.”
Pricing is £5.99/€6.99 per month or £59.99/€69.99 for an annual subscription. Belgium, the Nordics, and Portugal, will follow in summer 2020.
The service being rolled out will feature 26 Disney+ Originals plus an “extensive collection” of titles (some 500 films, 26 exclusive original movies and series and thousands of TV episodes to start with) from Disney, Pixar, Marvel, Star Wars, National Geographic, and other content producers owned by the entertainment giant, in what has been one of the boldest moves yet from a content company to go head-to-head with OTT streaming services like Netflix, Amazon and Apple.
The expansion of Disney+ has been caught in the crossfire of world events.
The new service is launching at what has become an unprecedented time for streaming media. Because of the coronavirus pandemic, a lot of of the world is being told to stay home, and many people are turning to their televisions and other screens for diversion and information.
That means huge demand for new services to entertain or distract people who are now sheltering in place. And that has put a huge strain on broadband networks. So, to be a responsible streamer (and to make sure quality is not too impacted), Disney confirmed (as it previously said it would) that it would be launching the service with “lower overall bandwidth utilization by at least 25%.”
There are now dozens of places to get an online video fix, but Disney has a lot of valuable cards in its hand, specifically in the form of a gigantic catalog of famous, premium content, and the facilities to produce significantly more at scale, dwarfing the efforts (valiant or great as they are) from the likes of Netflix, Amazon and Apple .
Titles in the mix debuting today include “The Mandalorian” live-action Star Wars series; a live-action “Lady and the Tramp,” “High School Musical: The Musical: The Series,”; “The World According to Jeff Goldblum” docuseries from National Geographic; “Marvel’s Hero Project,” which celebrates extraordinary kids making a difference in their communities; “Encore!,” executive produced by the multi-talented Kristen Bell; “The Imagineering Story” a 6-part documentary from Emmy and Academy Award-nominated filmmaker Leslie Iwerks and animated short film collections “SparkShorts” and “Forky Asks A Question” from Pixar Animation Studios.
Some 600 episodes of “The Simpsons” is also included (with the latest season 31 coming later this year).
With entire households now being told to stay together and stay inside, we’re seeing a huge amount of pressure being put on to broadband networks and a true test of the multiscreen approach that streaming services have been building over the years.
In this case, you can use all the usuals: mobile phones, streaming media players, smart TVs and gaming consoles to watch the Disney+ service (including Amazon devices, Apple devices, Google devices, LG Smart TVs with webOS, Microsoft’s Xbox Ones, Roku, Samsung Smart TVs and Sony / Sony Interactive Entertainment, with the ability to use four concurrent streams per subscription, or up to 10 devices with unlimited downloads. As you would expect, there is also the ability to set up parental controls and individual profiles.
Carriers with paid-TV services that are also on board so far include Deutsche Telekom, O2 in the UK, Telefonica in Spain, TIM in Italy and Canal+ in France when the country comes online. No BT in the UK, which is too bad for me (sniff). Sky and NOW TV are also on board.
Is it good news to say that stocks fell less sharply than they had on previous days?
That’s the bright side of another turbulent trading day across the Nasdaq and New York Stock Exchange. The major indices were down again — although their declines were less severe than they had been during the week.
Investors appeared to shake off positive labor statistics (the U.S. added 273,000 jobs, ahead of expectations), as the expanding number of coronavirus cases in the U.S. and lack of a coordinated response from the Trump Administration took their toll on investor confidence that the impact on the economy would be minimal.
With that said, things could have been worse?
The Dow fell 256.50 points, or just under 1%, to close at 25,864.78, while the S&P stumbled 51.57 points, or 1.7%, to close at 2,972.37 while the Nasdaq slid 1.8%, or 162.98 to close at 8,575.62. The benchmark indices are in the territory of a market correction — hovering at around a 10% loss already on the year.
For startups, it’s important to note that these market pressures can have implications for their businesses. Jittery buyers may be inclined to curb spending and save to conserve cash on their own balance sheets; consumers may rethink priorities and focus on essential purchases as they tighten their own belts.
Sequoia Capital warned in a blog post yesterday that things may change as time rolls along and the global economy stutters.
This isn’t the first time that one of the country’s most successful venture capital firms has warned its portfolio about the possibility of an economic crisis. In the wake of the 2008 financial crisis the firm issued an infamous slide deck warning “RIP Good Times”.
For financial markets the funeral bells are already tolling in the early part of the year. Now, a reckoning may be coming for startups that were on the edge of the bubble.
We all know the disruptive stories of female-founded startups like Glossier and ezCater. And we also know how those success stories belie the much harder time thousands of other women entrepreneurs have when it comes to raising capital.
That’s why it’s so important to have historical data and a window into how these things may be changing, so that the industry can consistently benchmark its successes and failures in an attempt to correct historical inequities in the ways venture firms distributed capital.
In 2019, female-founded startups across the world landed a record 4,399 investments, according to data from All Raise, a nonprofit organization that wants to increase the diversity in the venture capital industry, and Pitchbook data.
While deal count has increased, dollars raised declined in 2019 sliding to $37.7 billion from $49.9 billion in 2018. It’s worth noting that 2018 included an outsized round from Ant Financial, which may have skewed dollar totals. It’s also worth pointing out that over the same period venture capital firms in the U.S. alone invested more than $130 billion into startup companies.
For what it’s worth, 2019 broke all kinds of records. All Raise and Pitchbook’s data shows that 2019, compared to a decade ago, had a 1408% increase in deal value. Additionally, according to Crunchbase data, female-founded unicorns, companies valued at over $1 billion, were being born at an unprecedented rate in 2019. While a female-founded unicorn is still rare, the proliferation is notable, and goes well with one of All Raise’s goals: to increase investment in female-founded companies.
However, All Raise’s latest data doesn’t touch on one of its goals, which is to double the percentage of female investment partners at tech VC firms over the next 10 years. Last month, Pam Kostka, the CEO of All Raise, wrote a Medium blog on how more women became VC partners than ever before in 2019. All Raise claimed major US firms added 52 women partners in 2019. Last month, Recode said those numbers might be “overstating the progress” due to the different definitions of partner. For example, some female partners may have the title of partner, but not the decision-making capabilities.
Bottom line: the numbers are important, but the nuance within them is more telling, especially when it comes to diversity. For proof, look as far as Kostka’s headline: “More Women Became VC Partners Than Ever Before In 2019 But 65% of Venture Firms Still Have Zero Female Partners.”
Five years ago, it was hard to come by any numbers for annual VC investment in Africa. These days the challenge is choosing which number to follow.
That’s the case for three venture funding studies for Africa that turned up varied results.
From high to low, Partech pegged total 2019 VC for African startups at $2 billion, compared to WeeTracker’s $1.3 billion estimate and Disrupt Africa’s $496 million.
That’s a fairly substantial spread of $1.5 billion between the assessments. The variance filtered down to country VC valuations, though it was a little less sharp.
Partech and WeeTracker shared the same top-three countries for 2019 VC investment in Africa — Nigeria, Kenya, and Egypt — but with hundred-million dollar differences.
Disrupt Africa came up with a different lead market for startup investment on the continent — Kenya — though its $149 million estimate for the East African country was some $500 million lower than Partech and WeeTracker’s VC leader, Nigeria.
So what accounts for the big deviations? TechCrunch spoke to each organization (and reviewed the reports) and found the contrasting stats derive from different methodologies — namely defining what constitutes a startup and an African startup.
Partech’s larger overall VC valuation for the continent comes from broader parameters for companies and quantifying investment.
“We do not limit the definition of startups by age of the incorporation or size of funds raised,” Partech General Partner Tidjane Deme told TechCrunch.
This led the fund, for example, to include Visa’s $200 million investment in Nigerian financial-services company Interswitch . The corporate round was certainly tech-related, though few would classify Interswitch — which launched in 2002, acquires companies, and has a venture fund — as a startup.
Partech’s higher annual VC value for Africa’s startups could also connect to tallying confidential investment data.
“We…collect and analyze undisclosed deals, accessing more detailed information thanks to our relationships within the ecosystem,” the fund’s report disclosed.
WeeTracker’s methodology also included data on undisclosed startup investments and opened up the count to funding sources beyond VC.
“Debt/loans, grants/awards/prizes/non-equity assistance, crowdfunding, [and] ICOs are included,” WeeTracker clarified in a methodology note.
Disrupt Africa used a more conservative approach across companies and investment. “We are a bit more narrow on what we consider a startup to be,” the site’s co-founder Tom Jackson told TechCrunch.
“In the clearest scenario, an African startup would be headquartered in Africa, founded by an African, and have Africa as its primary market,” Disrupt Africa’s report stated — though Jackson noted all these factors don’t always align.
“Disrupt Africa tackles this issue on a case-by-case basis,” he said.
Partech was more liberal in its definition of an African startup, including investment for tech-companies that count Africa as their primary market, but not insisting they be incorporated or operate HQs on the continent.
That opened up inclusion of large 2019 rounds to Africa focused, New York headquartered tech-talent accelerator Andela and investment to Opera’s verticals, such as OPay in Nigeria.
In addition to following a more conservative definition of African startup, Disrupt Africa’s report was more particular to early-stage ventures. The site’s report primarily counted investment for companies founded within the last five year and excluded “spin-offs of corporates or any other large entity…that [has]…developed past the point of being a startup.”
For all the differences on annual VC counts for Africa, there were some common threads across WeeTracker, Partech, and Disrupt Africa’s investment reports.
The first was the rise of Nigeria — which has Africa’s largest population and economy — as the top destination for startup VC investment on the continent.
The second was the prominence of fintech as the most funded startup sector across Africa, gaining 54% of all VC in Partech’s report and $678 million of the $1.3 billion to startups in WeeTracker’s study.
An unfortunate commonality in each report was the preponderance of startup investment going to English speaking Africa. No francophone country made it into the the top five in any of the three reports. Only Senegal registered on Partech’s country-list, with a small $16 million in VC in 2019.
The Dakar Angel Network launched last year to bridge the resource gap for startups in French-speaking African countries.
There may not be a right or wrong stat for annual investment to African startups, just three reports with different methodologies that capture unique snapshots.
Partech and WeeTracker offer a broader view of multiple types of financial support going to tech companies operating in Africa. Disrupt Africa’s assessment is more specific to a standard definition of VC going to startups originating and operating in Africa.
Three reports with varying numbers on the continent’s startup investment is a definite upgrade to what was available not so long ago: little to no formal data on VC in Africa.
Google cancels its big developer conference, Justin Kan’s legal startup shuts down and Robinhood offers more details about a recent outage. Here’s your Daily Crunch for March 4, 2020.
After Facebook canceled its F8 developer conference and Google itself moved its Cloud Next event in April to a digital-only conference, this wasn’t a huge surprise, but it provides another sign of how the COVID-19 coronavirus is clearing the 2020 industry calendar.
Meanwhile, Mark Zuckerberg has outlined some of the steps that Facebook and his family’s nonprofit, the Chan Zuckerberg Initiative, are taking to respond to the pandemic. Facebook’s response focuses on three areas: providing accurate information, stopping misinformation and providing data for research.
Justin Kan’s hybrid legal software and law firm startup Atrium is shutting down today after failing to figure out how to deliver better efficiency than a traditional law firm. The startup has now laid off all its employees; it will return some of its $75.5 million in funding to investors, including Series B lead Andreessen Horowitz . The separate Atrium law firm will continue to operate.
It wasn’t the leap year, a coding blip or a hack that caused Robinhood’s massive outages earlier this week that left customers unable to trade stocks. Instead, the co-CEOs write that “the cause of the outage was stress on our infrastructure — which struggled with unprecedented load. That in turn led to a ‘thundering herd’ effect — triggering a failure of our DNS system.”
India’s Supreme Court has overturned the central bank’s two-year-old ban on cryptocurrency trading in the country in what many said was a “historic” verdict. The Reserve Bank of India had imposed a ban on cryptocurrency trading in April 2018 that barred banks and other financial institutions from facilitating “any service in relation to virtual currencies.”
Behind the scenes, an alternative approach to California’s AB 5 worker protection law has been picking up steam. Called the Cooperative Economy Act, the draft legislation is designed to accomplish much of what AB 5 aims to achieve, such as worker protections and benefits. But it also brings unions and co-ops into the mix. (Extra Crunch membership required.)
VSCO already allowed users to apply photo-like edits to their videos by doing things like applying filters or adjusting the exposure. But Montage is an entirely different sort of video editing experience.
In January, Uber announced that it had sold the India business of Uber Eats to Zomato for a 9.99% stake in the loss-making Indian food delivery startup. In a regulatory filing, the company has now disclosed that the deal was worth $206 million.
VC firm TLcom Capital closed its Tide Africa Fund at $71 million in February, and announced plans to invest in 12 startup over the next 18 months.
He told TechCrunch the fund was somewhat agnostic on startup sectors, but was leaning toward infrastructure, logistics ventures vs. consumer finance companies.
On geographic scope, TLcom Capital will focus primarily on startups in Africa’s big-three tech hubs — Nigeria, Kenya, South Africa — but is also eyeing rising markets, such as Ethiopia.
Both of these companies have gone on to expand in Africa and receive subsequent investment by U.S. investment bank, Goldman Sachs .
For those startups who wish to pitch to TLcom Capital, Caio encouraged founders to contact one of the fund’s partners and share a value proposition. “If it’s something we find vaguely interesting, we’ll make a decision,” he said.
One $50 million round wasn’t enough for South Africa’s Jumo, so the fintech firm raised another — $55 million — in February, backed by
Goldman Sachs led the Cape Town based company’s $52 million round back in 2018.
“This fresh investment comes from new and existing…investors including Goldman Sachs, Odey Asset Management and LeapFrog Investments,” Jumo said in a statement — though Goldman told TechCrunch its participation in this week’s round isn’t confirmed.
After the latest haul, Jumo has raised $146 million in capital, according to Crunchbase.
Founded in 2015, the venture offers a full tech stack for partners to build savings, lending, and insurance products for customers in emerging markets.
Jumo is active in six markets and plans to expand to two new countries in Africa (Nigeria and Ivory Coast) and two in Asia (Bangladesh and India).
The company’s products have disbursed over $1 billion loans and served over 15 million people and small businesses, according to Jumo data.
Jumo joins a growing list of African digital-finance startups raising big money from outside investors and expanding abroad. A $200 million investment by Visa in 2019 catapulted Nigerian payments firm Interswitch to unicorn status, the same year the company launched its Verge card product on Discover’s global network.
Amazon Web Services has entered a partnership with Safaricom — Kenya’s largest telco, ISP and mobile payment provider — in a collaboration that could spell competition between American cloud providers in Africa.
In a statement to TechCrunch, the East African company framed the arrangement as a “strategic agreement” whereby Safaricom will sell AWS services (primarily cloud) to its East Africa customer network.
Partnering with Safaricom plugs AWS into the network of one East Africa’s most prominent digital companies.
Safaricom, led primarily by its M-Pesa mobile money product, holds remarkable dominance in Kenya, Africa’s 6th largest economy. M-Pesa has 20.5 million customers across a network of 176,000 agents and generates around one-fourth of Safaricom’s ≈ $2.2 billion annual revenues (2018).
A number of Safaricom’s clients (including those it provides payments and internet services to) are companies, SMEs and startups.
The Safaricom-AWS partnership points to an emerging competition between American cloud service providers to scale in Africa by leveraging networks of local partners.
The most obvious rival to the AWS-Safaricom strategic agreement is the Microsoft -Liquid Telecom collaboration. Since 2017, MS has partnered with the Southern African digital infrastructure company to grow Microsoft’s AWS competitor product — Azure — and offer cloud services to the continent’s startups and established businesses.
More Africa-related stories @TechCrunch
African tech around the ‘net
Waymo, the former Google self-driving car project that is now a business under Alphabet, said Monday it raised $2.25 billion in a fundraising round led by Silver Lake, Canada Pension Plan Investment Board, and Mubadala Investment Company.
This is the company’s first external investment, which also included Magna, Andreessen Horowitz, and AutoNation and its parent company Alphabet.
“We’ve always approached our mission as a team sport, collaborating with our OEM and supplier partners, our operations partners, and the communities we serve to build and deploy the world’s most experienced driver,” said Waymo CEO John Krafcik said in blog the company posted Monday. “Today, we’re expanding that team, adding financial investors and important strategic partners who bring decades of experience investing in and supporting successful technology companies building transformative products. With this injection of capital and business acumen, alongside Alphabet, we’ll deepen our investment in our people, our technology, and our operations, all in support of the deployment of the Waymo Driver around the world.”
The round follows a flurry of activity in the past year that illustrated Waymo efforts to ramp up into a commercial enterprise. Much of the activity has focused on mapping and testing its autonomous vehicle technology in new locales such as Florida while continuing to expand its core fleet in Mountain View, Calif., and the Phoenix area.
Waymo has long focused on testing and eventually launching an on-demand ride-hailing service called Waymo One using its autonomous vehicles in the suburbs surrounding Phoenix. In October, Waymo began pulling safety drivers out of some of the vehicles on its Waymo One service.
But here have been other expansions, including a focus on finding new business applications for its autonomous vehicle technology such as delivery and trucking and even a plan to start selling its custom lidar sensors, to companies outside of self-driving cars such as robotics, security and agricultural technology.
In January, Waymo announced that it would begin mapping and eventually testing its autonomous long-haul trucks in Texas and parts of New Mexico.
Waymo has also expanded through acquisitions and partnerships. Waymo acquired in December a U.K. company called Latent Logic that spun out of Oxford University’s computer science department. The company uses a form of machine learning called imitation learning that could beef up Waymo’s simulation efforts. The acquisition marked the launch of Waymo’s first European engineering hub, which will be in Oxford, U.K.
Last spring, Waymo hired more than a dozen engineers from Anki, the robotics startup that shut down in April. The 13 robotics experts includes Anki’s co-founder and former CEO Boris Sofman, who is leading engineering in the autonomous trucking division.
Excitement for The Europas Awards for European Tech Startups is heating up. Here is the first wave of speakers and judges — with more coming!
The Awards — which have been running for over 10 years — will be held on 25 June 2020 in London, U.K. on the front lawn of the Geffrye Museum in Hoxton, London — creating a fantastic and fun garden-party atmosphere in the heart of London’s tech startup scene.
The application form to enter is here.
We’re scouting for the top late-stage seed and Series A startups in 22 categories.
You can nominate a startup, accelerator or venture investor that you think deserves to be recognized for their achievements in the last 12 months.
CLOSING DATE FOR APPLICATIONS: 25 March 2020
For the 2020 awards, we’ve overhauled the categories to a set that we believe better reflects the range of innovation, diversity and ambition we see in the European startups being built and launched today. This year we are particularly looking at startups that are able to address the SDGs/Globals Boals.
The Europas Awards
The Europas Awards results are based on voting by experts, experienced founders, hand-picked investors and the industry itself.
But the key to it is that there are no “off-limits areas” at The Europas, so attendees can mingle easily with VIPs.
Timeline of The Europas Awards deadlines:
Submissions now open!
25 March 2020 – Submissions close
14 April – Public voting begins
25 April – Public voting ends
8 June – Shortlist Announced
25 June – Awards evening, winners announced
We’re also shaking up the awards dinner itself. There are more opportunities to network. Our awards ceremony this year will be in the setting of a garden/lawn party, where you’ll be able to meet and mingle more easily, with free-flowing drinks and a wide selection of street food (including vegetarian/vegan). The ceremony itself will last less than 45 minutes, with the rest of the time dedicated to networking. If you’d like to talk about sponsoring or exhibiting, please contact Claire Dobson on firstname.lastname@example.org
Instead of thousands and thousands of people, think of a great summer event with the most interesting and useful people in the industry, including key investors and leading entrepreneurs.
The Europas Awards have been going for the last 10 years, and we’re the only independent and editorially driven event to recognise the European tech startup scene. The winners have been featured in Reuters, Bloomberg, VentureBeat, Forbes, Tech.eu, The Memo, Smart Company, CNET, many others — and of course, TechCrunch.
• No secret VIP rooms, which means you get to interact with the speakers
• Key founders and investors attending
• Journalists from major tech titles, newspapers and business broadcasters
The Pathfounder Afternoon Workshops
In the afternoon prior to the awards we will be holding a special, premium content event, The Pathfounder, designed be a “fast download” into the London tech scene for European founders looking to raise money or re-locate to London. Sessions include “How to Craft Your Story”; “Term Sheets”; “Building a Shareholding Structure”; Investor Panel; Meet the Press; and a session from former Europas winners. Followed by the awards and after-party!
The Europas “Diversity Pass”
We’d like to encourage more diversity in tech! That’s why we’ve set aside a block of free tickets to ensure that pre-seed female and BAME founders are represented at The Europas. This limited tranche of free tickets ensures that we include more women and people of colour who are specifically “pre-seed” or “seed-stage” tech startup founders. If you are a women/BAME founder, apply here for a chance to be considered for one of the limited free diversity passes to the event.
Anne Boden is founder and CEO of Starling Bank, a fast-growing U.K. digital bank targeting millions of users who live their lives on their phones. After a distinguished career in senior leadership at some of the world’s best-known financial heavyweights, she set out to build her own mobile bank from scratch in 2014. Today, Starling has opened more than one million current accounts for individuals and small businesses and raised hundreds of millions of pounds in backing. Anne was awarded an MBE for services to financial technology in 2018.
Nate Lanxon (Speaker)
Editor and Tech Correspondent
Nate is an editor and tech correspondent for Bloomberg, based in London. For over a decade, he has particularly focused on the consumer technology sector, and the trends shaping the global industry. Previous to this, he was senior editor at Bloomberg Media and was head of digital editorial for Bloomberg.com in Europe, the Middle East and Africa. Nate has held numerous roles across the most respected titles in tech, including stints as editor of WIRED.co.uk, editor-in-chief of Ars Technica UK and senior editor at CBS-owned CNET. Nate launched his professional career as a journalist by founding a small tech and gaming website called Tech’s Message, which is now the name of his weekly technology podcast hosted at natelanxon.com.
CEO and founder
/> Tania is an internationally recognized women’s health expert and has held leadership positions for various global NGOs and the United Nations. Passionate about challenging taboo women’s issues, Tania founded Elvie in 2013, partnering with Alexander Asseily to create a global hub of connected health and lifestyle products for women.
CEO and co-founder
Thread makes it easy for guys to dress well. They combine expert stylists with powerful AI to recommend the perfect clothes for each person. Thread is used by more than 1 million men in the U.K., and has raised $35 million from top investors, including Balderton Capital, the founders of DeepMind and the billionaire former owner of Warner Music. Prior to Thread, Kieran founded one of the first video sharing websites at age 15 and sold it for $1.25 million at age 19. He was then CEO and co-founder of Playfire, the largest social network for gamers, which he grew to 1.5 million customers before being acquired in 2012. He’s a member of the Forbes, Drapers and Financial Times 30 Under 30 lists.
Chief Commercial Officer
Clare is the chief commercial officer of what3words; prior to this, her background was in the development and growth of social enterprises and in impact investment. Clare was featured in the 2019 Forbes 30 under 30 list for technology and is involved with London companies tackling social/environmental challenges. Clare also volunteers with the Streetlink project, doing health outreach work with vulnerable women in South London.
Luca Bocchio joined Accel in 2018 and focuses on consumer internet, fintech and software businesses. Luca led Accel’s investment in Luko, Bryter and Brumbrum. Luca also helped lead Accel’s investment and ongoing work in Sennder. Prior to Accel, Luca was with H14, where he invested in global early and growth-stage opportunities, such as Deliveroo, GetYourGuide, Flixbus, SumUp and SecretEscapes. Luca previously advised technology, industrial and consumer companies on strategy with Bain & Co. in Europe and Asia. Luca is from Italy and graduated from LIUC University.
CEO and c-founder
/> Bernhard co-founded busuu in 2008 following an MBA project and has since led the company to become the world’s largest community for language learning, with more than 90 million users across the globe. Before starting busuu, Bernhard worked as a consultant at Roland Berger Strategy Consultants. He graduated summa cum laude in International Business from the Vienna University of Economics and Business and holds an MBA with honours from IE Business School. Bernhard is an active mentor and business angel in the startup community and an advisor to the Austrian Government on education affairs. Bernhard recently received the EY Entrepreneur of the Year 2018 UK Awards in the Disruptor category.
CEO and founder
Chris is the founder and CEO of Lyst, the world’s biggest fashion search platform used by 104 million shoppers each year. Including over 6 million products from brands including Burberry, Fendi, Gucci, Prada and Saint Laurent, Lyst offers shoppers convenience and unparalleled choice in one place. Launched in London in 2010, Lyst’s investors include LVMH, 14W, Balderton and Accel Partners. Prior to founding Lyst, Chris was an investor at Benchmark Capital and Balderton Capital in London, focusing on the early-stage consumer internet space. He holds an MA in physics and philosophy from Cambridge University.
CEO and co-founder
/> Husayn Kassai is the Onfido CEO and co-founder. Onfido helps businesses digitally onboard users by verifying any government ID and comparing it with the person’s facial biometrics. Founded in 2012, Onfido has grown to a team of 300 across SF, NYC and London; received over $100 million in funding from Salesforce, Microsoft and others; and works with over 1,500 fintech, banking and marketplace clients globally. Husayn is a WEF Tech Pioneer; a Forbes Contributor; and Forbes’ “30 Under 30”. He has a BA in economics and management from Keble College, Oxford.
Hotstar, India’s largest on-demand video streaming service with over 300 million users, has blocked the newest episode of HBO’s “Last Week Tonight With John Oliver” that was critical of Prime Minister Narendra Modi in a move that has angered many of its customers ahead of Disney+’s launch in one of the world’s largest entertainment markets next month.
In the episode, aired hours before the U.S. President Donald Trump’s visit to India, Oliver talked about some of the questionable policies enforced by the ruling government in India and recent protests against “controversial figure” Modi’s citizenship measures.
The episode is available to stream in India through HBO’s official channel on YouTube where it has garnered over 4 million views. Hotstar is the exclusive syndicating partner of HBO, Showtime, and ABC in India.
Spokespeople of Star India, which operates Hotstar, and Disney, which owns the major Indian broadcasting network, did not respond to multiple requests for comment.
A spokesperson of the Information and Broadcasting Ministry, the governing agency which regulates information, broadcasts, movies, and the press in India, said the government was not involved in any censorship discussions.
Numerous people in India began speculating on Monday whether Hotstar, which like Netflix and Amazon Prime Vide self-censors some content, would stream the new episode at 6am on Tuesday, when it typically makes new episodes of Oliver’s show available on the platform.
It became very apparent on Tuesday that the Disney-owned platform, which has a knack of censoring numerous sensitive subjects including sketches that make fun of its sponsors, was not going to risk upsetting the ruling party.
Last year, Amazon also removed an episode of the CBS show “Madam Secretary”, in which references to Hindu nationalism and extremists were made from its streaming service in India. Netflix also pulled an episode in Saudi Arabia of Hasan Minhaj’s “Patriot Act” that criticized the kingdom’s crown prince.
During the days when Snapchat’s popularity was booming, investors thought the company would become the anchor for a new Los Angeles technology scene.
Snapchat, they hoped, would spin-off entrepreneurs and angel investors who would reinvest in the local ecosystem and create new companies that would in turn foster more wealth, establishing LA as a hub for tech talent and venture dollars on par with New York and Boston.
In the ensuing years, Los Angeles and its entrepreneurial talent pool has captured more attention from local and national investors, but it’s not Snap that’s been the source for the next generation of local founders. Instead, several former SpaceX employees have launched a raft of new companies, capturing the imagination and dollars of some of the biggest names in venture capital.
“There was a buzz, but it doesn’t quite have the depth of bench of people that investors wanted it to become,” says one longtime VC based in the City of Angels. “It was a company in LA more than it was an LA company.”
Perhaps the most successful SpaceX offshoot is Relativity Space, founded by Jordan Noone and Tim Ellis. Since Noone, a former SpaceX engineer, and Ellis, a former Blue Origin engineer, founded their company, the business has been (forgive the expression) a rocket ship. Over the past four years, Relativity href="https://techcrunch.com/2019/10/01/relativity-a-new-star-in-the-space-race-raises-160-million-for-its-3-d-printed-rockets/"> has raised $185.7 million, received special dispensations from NASA to test its rockets at a facility in Alabama, will launch vehicles from Cape Canaveral and has signed up an early customer in Momentus, which provides satellite tug services in orbit.
Cape Town based startup Zindi has registered 10,000 data-scientists on its platform that uses AI and machine learning to crowdsolve complex problems in Africa.
Founded in 2018, the early-stage venture allows companies, NGOs or government institutions to host online competitions around data-oriented challenges.
Zindi opens the contests to the African data scientists on its site who can join a competition, submit solution sets, move up a leader board and win — for a cash prize payout.
The highest purse so far has been $12,000, according to Zindi co-founder Celina Lee. Competition hosts receive the results, which they can use to create new products or integrate into their existing systems and platforms.
It’s free for data scientists to create a profile on the site, but those who fund the competitions pay Zindi a fee, which is how the startup generates revenue.
The South African National Roads Agency sponsored a challenge in 2019 to reduce traffic fatalities in South Africa. The stated objective is “to build a machine learning model that accurately predicts when and where the next road incident will occur in Cape Town… to enable South African authorities… to put measures in place that will… ensure safety.”
Attaining 10,000 registered data-scientists represents a more than 100 percent increase for Zindi since August 2019, when TechCrunch last spoke to Lee.
The startup — which is in the process of raising a Series A funding round — plans to connect its larger roster to several new platform initiatives. Zindi will launch a university wide hack-competition, called UmojoHack Africa, across 10 countries in March.
“We’re also working on a section on our site that is specifically designed to run hackathons…something that organizations and universities could use to upskill their students or teams specifically,” Lee said.
Lee (who’s originally from San Francisco) co-founded Zindi with South African Megan Yates and Ghanaian Ekow Duker. They lead a team in the company’s Cape Town office.
For Lee, the startup is a merger of two facets of her experience.
“It all just came together. I have this math-y tech background, and I was working in non-profits and development, but I’d always been trying to join the two worlds,” she said.
That happened with Zindi, which is for-profit — though roughly 80% of the startup’s competitions have some social impact angle, according to Lee.
“In an African context, solving problems for for-profit companies can definitely have social impact as well,” she said.
With most of the continent’s VC focused on fintech or e-commerce startups, Zindi joins a unique group of ventures — such as Andela and Gebeya — that are building tech-talent in Africa’s data-scientist and software engineer space.
If Zindi can convene data-scientists to solve problems for companies and governments across the entire continent that could open up a vast addressable market.
It could also see the startup become an alternative to more expensive consulting firms operating in Africa’s large economies, such as South Africa, Nigeria and Kenya .
Tesla said Thursday it plans to raise more than $2 billion through a common stock offering and will use the funds to strengthen its balance sheet and for general corporate purposes, despite signaling just two weeks ago that it would not seek to raise more cash.
Tesla CEO Elon Musk will purchase up to $10 million in shares in the offering, while Oracle co-founder and Tesla board member Larry Ellison will buy up to $1 million worth of Tesla shares, according to the securities filing.
The automaker has also granted underwriters a 30-day option to purchase up to $300 million of additional common stock. If underwriters exercise that option, Tesla could raise as much as $2.3 billion.
The stock offering conflicts with statements Musk and CFO Zach Kirkhorn made last month during Tesla’s fourth-quarter earnings call. An institutional investor asked that given the recent run in the share price, why not raise capital now and substantially accelerate the growth in production? At the time, Musk said the company was spending money sensibly and that there is no “artificial hold back on expenditures.”
“We’re spending money I think efficiently and we’re not artificially limiting our progress,” Musk said dueing the January 29 call. “And then despite all that we are still generating positive cash. So in light of that, it doesn’t make sense to raise money because we expect to generate cash despite this growth level.”
Kirkhorn added to Musk’s comments noting that the company had laid a good foundation and was not holding back on growth.
“We have two products, two vehicle products launching right now and that will consume much of the bandwidth of the company to stabilize those over the course of the year,” Kirkhorn said. “And then looking into next year, we have even more products launching, more factories. So we want to be smart about how we spend money and grow in a way that’s sustainable. So we don’t fall victim to the mistakes I think we made a year and a half or so ago.”
However, Tesla shares have risen more than 35% since the January 29 earnings call, perhaps proving too tempting of an opportunity to ignore.
This latest stock raise could prove critical to fund Tesla’s number of projects. A regulatory filing posted prior to the stock offering notice indicates Tesla’s capital expenditures could reach as high as $3.5 billion this year.
“Considering the expected pace of the manufacturing ramps for our products, construction and expansion of our factories, and pipeline of announced projects under development, and consistent with our current strategy of using partners to manufacture battery cells, as well as considering all other infrastructure growth, we currently expect our average annual capital expenditures in 2020 and the two succeeding fiscal years to be $2.5 billion to $3.5 billion,” Tesla said in its 10K filing, which was posted Thursday.
VC firm TLcom Capital has closed its Tide Africa Fund at $71 million with plans to make up to 12 startup investments over the next 18 months.
“We’re rather sector agnostic, but right now we are looking at companies that are more infrastructure type tech rather than super commoditized things like consumer lending,” he told TechCrunch on a call.
On geographic scope, TLcom Capital will focus primarily on startups in Africa’s big-three tech hubs — Nigeria, Kenya, South Africa — but is also eyeing rising markets, such as Ethiopia.
Part of the fund’s investment approach, according to Caio, is backing viable companies with strong founders and then staying out of the way.
“We are venture capitalists that believe in looking at Africa as an investment opportunity that empowers local entrepreneurs without…coming in and explaining what to do,” said Caio.
TLcom’s team includes Caio (who’s Italian), partners Ido Sum and Andreata Muforo (from Zimbabwe) and senior partner Omobola Johnson, the former Minister of Communication Technology in Nigeria.
Speaking at TechCrunch Disrupt Berlin in 2018, Johnson offered perspective on next startups in Africa that could reach billion-dollar valuations. “When I look at the African market I suspect it’s going to be a company that’s very much focused on business to business and business to very small business — a company that can that can solve their challenges,” she said.
TLcom’s current Africa portfolio reflects startups similar to what Johnson described. The fund has invested in Nigerian trucking logistics venture Kobo360, which is working to reduce business delivery costs in Africa.
Both of these companies have gone on to expand in Africa and receive subsequent investment by U.S. investment bank, Goldman Sachs .
The firm’s close of the $71 million Tide Africa Fund comes on the high-end of a several-year mobilization of capital for the continent’s startup scene. Investment shops specifically focused on Africa have been on the rise. A TechCrunch and Crunchbase study in 2018 tracked 51 viable Africa specific VC funds globally, TLcom included.
This trend has moved in tandem with a quadrupling of venture funding for the continent over the past six years. Accurately measuring VC for Africa is a work in progress, but one of the earlier reliable estimates placed it at just over $400 million in 2014. Recent stats released by Partech peg Africa focused VC funding at over $2 billion for 2019.
TLcom’s listed in a number of the larger rounds that made up Partech’s tally.
The fund’s latest $71 million raise, which included support from Sango Capital and IFC, reversed the roles a bit for TLcom founder Maurizio Caio.
The VC principal — who usually gets pitches from African startups — needed to sell the value of African tech to other investors.
“It’s been tough to raise the fund, there’s no doubt about it,” Caio said. TLcom highlighted its past exit record and the viability of the African market and founders to bring investors on board.
“We had the advantage of showing some good exits…The emphasis was also on the gigantic size of these markets that are underserved, the role that technology can play, and the fact that the entrepreneurs in Africa are just as good as anywhere else,” said Caio.
He also referenced African startups being constrained by the social impact factors often placed on them from outside investors.
“The equation is not just about ensuring employment and inclusion, but also about the fact that African entrepreneurs have to be in charge of their own destiny without instructions from the West,” he said.
For those startups who wish to pitch to TLcom Capital, Caio encouraged founders to contact one of the fund’s partners and share a value proposition. “If it’s something we find vaguely interesting, we’ll make a decision,” he said.