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Novakid’s investors bet $35M that it can teach kids English

By Natasha Mascarenhas

If you’re trying to develop fluency in a non-native tongue, language immersion is a crucial part of the learning process. Surrounding yourself with native speakers helps with pronunciation, context building, and most of all, confidence.

But what if you’re an eight-year-old kid in Spain learning English and can’t swing a solo trip to the United States for the summer?

Novakid, founded by Maxim Azarov, wants to be your next best option. The San Francisco-based edtech startup offers virtual-only, English language immersion for kids between the ages of four through 12, by combining a mix of different services from live tutors to gamification.

After closing its $4.25 million Series A round last December, Novakid announced today that it is back with a $35 million Series B financing, led by Owl Ventures and Goodwater Capital. Existing investors also participated in the round, including PortfoLion, LearnStart, TMT Investments, Xploration Capital, LETA Capital and BonAngels.

The startup is raising capital in response to an active start to its year. The company’s active client base grew 350% year over year, currently at over 50,000 paying students. The money will be used to get more students into its universe of tools, as well as help Novakid expand into international markets with high populations of speakers who want to learn English.

The company’s suite of services are built around two principles: First, that it can immerse early-age learners into the world of English at scale, and second, that it can actually be fun to use.

When a user signs up, they are first connected to one of Novakid’s 2,000 live tutors for their first class. Tutors must be native English speakers with a B.A. degree or higher, as well as an international teaching certificate such as DELTA, CELTA, TESOL or TEFL.

“One of the things that is really important, even psychologically, is to start listening to the language, start interacting with a live person, and remove being afraid of not understanding something,” Azarov said. The company wants to recreate the conditions of how a kid likely learned their first language.

In the class, the tutors only speak English, and users are encouraged to do the same to slowly build and mistake their way into confidence. While the live, video-based classes are a key part of Novakid’s product, Azarov said it was important that his company “was not just giving you access to a teacher” as its main value proposition.

“Most of the competitors are taking teachers and making them available remotely so you don’t have to travel and you have a bigger selection,” he said. But if you look at the industry in the bigger picture, guys like Oxford, Cambridge, Pearson who provide content for the language learning industry, their product basically sucks. It’s really bad.” So, Novakid puts most of its energy into rebuilding a curriculum that works with better design, and includes games.

Gamified content lives both in and out of classes. Within the classroom, a teacher may take a student on a VR-enhanced tour through famous landmarks and museums to practice vocabulary. Self-paced content could look like a multiplayer “battle” between two students answering questions within a certain time period to get a better score. Novakid has an entire team dedicated to game design and development.

Students are clicking in. Novakid users spend two-thirds of their time on the website with tutors, and one-third with self-paced content that the company built in-house. The company wants to switch those concentrations because more students are spending time with the asynchronous content around grammar and vocabulary, and teachers are reserved for more complex information like speaking and conversation.

Part of the difficulty of scaling up a language learning business is that users need to stay motivated. Gamification helps with engagement, but Novakid’s clientele of children could also be fast to churn compared to adult learners, simply due to priorities. Azarov said that he sees how some would view selling exclusively to children as a disadvantage, but he views their focus as differentiation.

“You get better brand equity when you’re more focused,” he said. “The way kids learn language is vastly different from the way adults learn language, and I don’t think the general players who do ‘everything from everybody’ will be able to do [the former] as well as we are.” Duolingo recently launched Duolingo ABC, a free English literacy app with hundreds of short-form exercises. While the now-public company has strong branding, Novakid’s strategy differs by adding in more services around live learning and speaking.

So far, the company has proven that its strategy is sticking. Its revenue in 2020 was $9 million, and in 2021 it is expected to hit between $36 million to $45 million in revenue. It declined to disclose the specifics around diversity of the team, but plans to kick off a quite intensive recruiting spree going forward. Azarov plans to add 200 people to his 300-person company in the next six months.

Demand Curve: Questions you need to answer in your paid search ads

By Ram Iyer
Stewart Hillhouse Contributor
Stewart Hillhouse writes actionable growth marketing insights as senior content lead at Demand Curve. By night, he interviews marketers and creatives on his podcast, Top Of Mind. Before getting into marketing, Stewart was a semi-professional lumberjack. He also writes at stewarthillhouse.com.

Around 15% of website traffic comes through paid search ads. But to turn passive searchers into active shoppers, your ads should answer their question and entice them to click.

We’ve tested thousands of paid search ads at Demand Curve and through our agency Bell Curve. This post breaks down 14 questions your paid search ads should answer to ensure you’re only paying for the highest-intent shoppers.

Question 1: “What’s in it for me?”

An important distinction between paid search and organic search is that paid ads are an interruption. Users of search engines are simply looking for an answer to their question. The people who see your ads don’t owe you anything. Just because you’re paying to have your ad show up first doesn’t mean they’re going to pay attention to it.

To generate genuine interest in your paid ads, reframe your offer as a favor.

You can do this in two ways:

  • Describe the features of your product as the solution to your customers’ problem.
  • Emphasize the outcome your customer seeks.

For example, reframing free delivery as an extra convenience makes the offer that much more attractive.

Use ad extensions by listing additional benefits in the description of the page. For example, including “customized plans” in the pricing extension page signals to your customer that they’ll have control over the cost. This will help to attract the curiosity of even the most cost-conscious buyers.

To capture genuine interest in your paid ads, re-frame your offer as a favor.

Image Credits: Demand Curve

Question 2: “Why should I buy now?”

Approximately 80% of e-commerce shopping carts are abandoned, mostly because shoppers don’t feel any urgency to complete the transaction. Online shoppers aren’t in any rush, as the internet is open 24/7 and inventory feels unlimited.

Use ad copy that bridges the gap between their problem and your solution. The easiest way to create that curiosity bridge is by asking a question.

To answer the question, “Why should I buy now?”, you’re going to have to create an incentive to get them to take action now.

Planted raises another $21M to expand its growing plant-based meat empire (and add schnitzel)

By Devin Coldewey

Swiss alternative protein company Planted has raised its second round of the year, a CHF 19 million (about $21 million at present) “pre-B” fundraise that will help it continue its growth and debut new products. A U.S. launch is in the cards eventually, but for now Planted’s exclusively European customers will be able to give its new veggie schnitzel a shot.

Planted appeared in 2019 as a spinoff from Swiss research university ETH Zurich, where the founders developed the original technique of extruding plant proteins and water into fibrous structures similar to real meat’s. Since then the company has diversified its protein sources, adding oat and sunflower to the mix, and developed pulled pork and kebab alternative products as well.

Over time the process has improved as well. “We added fermentation/biotech technologies to enhance taste and texture,” wrote CEO and co-founder Christoph Jenny in an email to TechCrunch. “Meaning 1) we can create structures without form limitation and 2) can add a broader taste profile.”

The latest advance is schnitzel, which is of course a breaded and fried piece of pounded-thin meat style popular around the world, but especially in the company’s core markets of Germany, Austria and Switzerland. Jenny noted that Planted’s schnitzel is produced as one piece, not pressed together from smaller bits. “The taste and texture benefit from fermentation approach, that makes the flavor profile mouth watering and the texture super juicy,” he said, though of course we will have to test it to be sure. Expect schnitzel to debut in Q3.

It’s the first of several planned “whole” or “prime” cuts, larger pieces that can be prepared like any other piece of meat — the team says their products require no special preparation or additives and can be dropped in as 1:1 replacements in most recipes. Right now the big cuts are leaving the lab and entering consumer testing for taste tuning and eventually scaling.

The funding round came from “Vorwerk Ventures, Gullspång Re:food, Movendo Capital, Good Seed Ventures, Joyance, ACE & Company (SFG strategy) and Be8 Ventures,” and was described as a follow-on to March’s CHF 17M series A. No doubt the exploding demand for alternative proteins and growing competition in the space has spurred Planted’s investors to opt for more aggressive growth and development strategies.

The company plans to enter several new markets over Q3 and Q4, but the U.S. is still a question mark due to COVID-19 restrictions on travel. Jenny said they are preparing so that they can make that move whenever it becomes possible, but for now Planted is focused on the European market.

(Update: This article originally misstated the new round as also being CHF 17M — entirely my mistake. This has been corrected.)

Amazon will pay you $10 in credit for your palm print biometrics

By Zack Whittaker

How much is your palm print worth? If you ask Amazon, it’s about $10 in promotional credit if you enroll your palm prints in its checkout-free stores and link it to your Amazon account.

Last year, Amazon introduced its new biometric palm print scanners, Amazon One, so customers can pay for goods in some stores by waving their palm prints over one of these scanners. By February, the company expanded its palm scanners to other Amazon grocery, book and 4-star stores across Seattle.

Amazon has since expanded its biometric scanning technology to its stores across the U.S., including New York, New Jersey, Maryland and Texas.

The retail and cloud giant says its palm scanning hardware “captures the minute characteristics of your palm — both surface-area details like lines and ridges as well as subcutaneous features such as vein patterns — to create your palm signature,” which is then stored in the cloud and used to confirm your identity when you’re in one of its stores.

Amazon’s latest promotion: $10 promotional credit in exchange for your palm print. (Image: Amazon)

What’s Amazon doing with this data exactly? Your palm print on its own might not do much — though Amazon says it uses an unspecified “subset” of anonymous palm data to improve the technology. But by linking it to your Amazon account, Amazon can use the data it collects, like shopping history, to target ads, offers and recommendations to you over time.

Amazon also says it stores palm data indefinitely, unless you choose to delete the data once there are no outstanding transactions left, or if you don’t use the feature for two years.

While the idea of contactlessly scanning your palm print to pay for goods during a pandemic might seem like a novel idea, it’s one to be met with caution and skepticism given Amazon’s past efforts in developing biometric technology. Amazon’s controversial facial recognition technology, which it historically sold to police and law enforcement, was the subject of lawsuits that allege the company violated state laws that bar the use of personal biometric data without permission.

“The dystopian future of science fiction is now. It’s horrifying that Amazon is asking people to sell their bodies, but it’s even worse that people are doing it for such a low price,” said Albert Fox Cahn, the executive director of the New York-based Surveillance Technology Oversight Project, in an email to TechCrunch.

“Biometric data is one of the only ways that companies and governments can track us permanently. You can change your name, you can change your Social Security number, but you can’t change your palm print. The more we normalize these tactics, the harder they will be to escape. If we don’t [draw a] line in the sand here, I am very fearful what our future will look like,” said Cahn.

When reached, an Amazon spokesperson declined to comment.

 

Can your startup support a research-based workflow?

By Ram Iyer
João Graça Contributor
João Graça is CTO and co-founder of Unbabel, an AI-powered language operations platform that enables any agent to communicate in any language.

The President’s Council of Advisors on Science and Technology predicts that U.S. companies will spend upward of $100 billion on AI R&D per year by 2025. Much of this spending today is done by six tech companies — Microsoft, Google, Amazon, IBM, Facebook and Apple, according to a recent study from CSET at Georgetown University. But what if you’re a startup whose product relies on AI at its core?

Can early-stage companies support a research-based workflow? At a startup or scaleup, the focus is often more on concrete product development than research. For obvious reasons, companies want to make things that matter to their customers, investors and stakeholders. Ideally, there’s a way to do both.

Before investing in staffing an AI research lab, consider this advice to determine whether you’re ready to get started.

Compile the right research team

Assuming it’s your organization’s priority to do innovative AI research, the first step is to hire one or two researchers. At Unbabel, we did this early by hiring Ph.D.s and getting started quickly with research for a product that hadn’t been developed yet. Some researchers will build from scratch and others will take your data and try to find a pre-existing model that fits your needs.

While Google’s X division may have the capital to focus on moonshots, most startups can only invest in innovation that provides them a competitive advantage or improves their product.

From there, you’ll need to hire research engineers or machine learning operations professionals. Research is only a small part of using AI in production. Research engineers will then release your research into production, monitor your model’s results and refine the model if it stops predicting well (or otherwise is not operating as planned). Often they’ll use automation to simplify monitoring and deployment procedures as opposed to doing everything manually.

None of this falls within the scope of a research scientist — they’re most used to working with the data sets and models in training. That said, researchers and engineers will need to work together in a continuous feedback loop to refine and retrain models based on actual performance in inference.

Choose the problems you want to solve

The CSET research cited above shows that 85% of AI labs in North America and Europe do some form of basic AI research, and less than 15% focus on development. The rest of the world is different: A majority of labs in other countries, such as India and Israel, focus on development.

Salesforce steps into RPA buying Servicetrace and teaming it with Mulesoft

By Ron Miller

Over the last couple of years, Robotic Process Automation or RPA has been red hot with tons of investor activity and M&A from companies like SAP, IBM and ServiceNow. UIPath had a major IPO in April and has a market cap over $30 billion. I wondered when Salesforce would get involved and today the company dipped its toe into the RPA pool, announcing its intent to buy German RPA company Servicetrace.

Salesforce intends to make Servicetrace part of Mulesoft, the company it bought in 2018 for $6.5 billion. The companies aren’t divulging the purchase price, suggesting it’s a much smaller deal. When Servicetrace is in the fold, it should fit in well with Mulesoft’s API integration, helping to add an automation layer to Mulesoft’s tool kit.

“With the addition of Servicetrace, MuleSoft will be able to deliver a leading unified integration, API management, and RPA platform, which will further enrich the Salesforce Customer 360 — empowering organizations to deliver connected experiences from anywhere. The new RPA capabilities will enhance Salesforce’s Einstein Automate solution, enabling end-to-end workflow automation across any system for Service, Sales, Industries, and more,” Mulesoft CEO Brent Hayward wrote in a blog post announcing the deal.

While Einstein, Salesforce’s artificial intelligence layer, gives companies with more modern tooling the ability to automate certain tasks, RPA is suited to more legacy operations, and this acquisition could be another step in helping Salesforce bridge the gap between older on-prem tools and more modern cloud software.

Brent Leary, founder and principal analyst at CRM Essentials says that it brings another dimension to Salesforce’s digital transformation tools. “It didn’t take Salesforce long to move to the next acquisition after closing their biggest purchase with Slack. But automation of processes and workflows fueled by realtime data coming from a growing variety sources is becoming a key to finding success with digital transformation. And this adds a critical piece to that puzzle for Salesforce/MulseSoft,” he said.

While it feels like Salesforce is joining the market late, in an investor survey we published in May Laela Sturdy, general partner at CapitalG told us that we are just skimming the surface so far when it comes to RPA’s potential.

“We’re a long way from needing to think about the space maturing. In fact, RPA adoption is still in its early infancy when you consider its immense potential. Most companies are only now just beginning to explore the numerous use cases that exist across industries. The more enterprises dip their toes into RPA, the more use cases they envision,” Sturdy responded in the survey.

Servicetrace was founded in 2004, long before the notion of RPA even existed. Neither Crunchbase nor Pitchbook shows any money raised, but the website suggests a mature company with a rich product set. Customers include Fujitsu, Siemens, Merck and Deutsche Telekom.

All-electric 2022 Audi e-tron GT and RS e-tron GT provide a pop of tech in understated packaging

By Abigail Bassett

Luxury, technology and a whole lot of flash often go hand in hand. In the age of space-faring billionaires, we all expect the latest wiz-bang gadget to look like something from the future, right?

Not in Audi’s view. The 2022 Audi e-tron GT and RS e-tron GT are a pair of all-electric grand touring halo cars that don’t look like something from 2060. They look just like sleek gasoline-powered GTs, but beneath the skin, there’s a whole lot more power, technological pop and panache than the design implies at first glance.

The 2022 Audi e-tron GT and RS e-tron GT get a low-slung roofline, wide track and long wheelbase like those grand tourers of the past, with the addition of a few design flourishes to bring it in line with Audi’s subtle, yet luxurious aesthetic. While the e-tron GT and the RS e-tron GT were both produced alongside the Audi R8 (its roofline is lower than the R8) and borrow a few things from that iconic design, these electric grand tourers are a pair of beasts all their own.

Nuts and bolts

Based on the same 800-volt architecture as the Porsche Taycan, the e-tron GT makes 469 combined horsepower (up to 522 hp with overboost) from a pair of dual, permanent-magnet motors powering the front and rear wheels. The RS e-tron GT makes 590 (637 hp with overboost) horsepower from those same motors and Audi says it can do 0-60 in 3.1 seconds.

Both vehicles are capable, confident and quick and don’t tarry on mountain roads or long highway stretches. Acceleration is almost seamless, as it is in most electric vehicles.

Thanks to Audi’s electric quattro all-wheel drive with torque vectoring system, both vehicles are sure-footed and well sorted, even when the wheels start to squeal. This system allows a variable amount of power to be sent to wheels that slip when cornering hard, making a sudden lane change, or driving in slippery conditions.

The vehicles I drove were outfitted with summer tires, and I got to test a bit of this out on a closed slalom course with a sudden lane change at the end at the Agua Dulce Airpark about 50 miles northeast of downtown Los Angeles. I ran the RS e-tron GT through the cones three consecutive times to get a feel for the system and each time the car felt secure, planted and under control.

Steering, speed and range

Audi RS e-tron GT Tango Red_03

2022 Audi RS e-tron GT. Image Credits: Audi

Both the e-tron GT and the RS e-tron GT also get optional rear-wheel steering. Under 30 mph, the rear wheels can turn up to 2.8 degrees in the opposite direction to the front wheels to help make the turning radius of the e-tron GT and the RS e-tron GT smaller. Above 30 mph the rear wheels turn in the same direction as the front. This system is similar (with fewer degrees of rotation) to that in the Porsche Taycan.

While I did not get to try out overboost in either vehicle on the smooth tarmac at the airpark, I did run a series of back-to-back 0 to 100 mph accelerations using launch control in the RS e-tron GT. Amongst the cohort of journalists there, I came in second, doing 0-60 in 3.24 seconds and 0-100 in 7.29 seconds. In 102-degree heat, on cold tires, those numbers are plenty impressive. By the end of the runway, I saw speeds approaching 120 mph, 32 mph short of the electronically limited 155 mph, (152 mph in the e-tron GT) before hitting the brakes. After three back-to-back runs, the fully charged RS e-tron GT had only lost 20 miles of range.

The EPA-estimated range for the RS e-tron GT is 232 miles while the e-tron GT is estimated to get 239 miles of range.

Charging up

2022 Audi e-tron GT Ascari Blue_54

2022 Audi e-tron GT. Image Credits: Audi

Those estimated EPA ranges are a result of the low-slung 93 kWh battery pack (the same in both vehicles) that Audi says can charge up to 80% in 23 minutes on 270-volt chargers (DC fast charging).

The e-tron GT starts at $99,900 and the RS e-tron GT pops to a higher $139,900 (both excluding the $1,045 destination charge). That price tag does come with one-time limited benefit.

Audi paired up with Electrify America to offer free, unlimited public charging for three years (without time restrictions). They also offer at-home charging stations set up through Qmerit. Both the e-tron GT and the RS e-tron GT come with standard dual charging ports and a 9.6 kW charging system with 240-volt capability so that owners can charge anywhere. Electrify America was launched by the Volkswagen Group, which owns Audi, following the Dieselgate scandal.

Finding any charger is available through the infotainment system, known as the MMI, and the 10.1-inch touchscreen in the center console. Head to navigation and then hit the icon marked with a plug and a list of chargers near you will populate.

While I didn’t get the opportunity to try to find chargers on the one-day drive, Audi says that finding EA chargers and their status and availability is easy through both Audi’s MyAudi app (available via smartphone and desktop), and through the MMI.  Audi says that drivers can sort by their preferred charging level (Level 1 through DC fast chargers) and navigate to the charger all without leaving Audi’s in-vehicle interface.

Drivers can also perform the search on their phone through EA’s app or through the MyAudi app and send directions to the car either via wireless CarPlay, which is currently available or wireless Android Auto, which is coming on production models, though it wasn’t available in the e-tron GT or the RS e-tron GT that I drove. Drivers can also connect their smartphone through a USB-C port located in the center armrest.

I didn’t get to try the MyAudi app since I am not an owner (it requires tying the vehicle’s VIN to the app to ensure that privacy is maintained), but Audi says that drivers can plan a route on their MyAudi app, and the system will automatically include charge stops along the way to ensure that they arrive with plenty of battery in reserve.

For those luxury buyers who want a bit more support to make a seamless transition to an all-electric luxury car, Audi is launching what they call Audi Care for EVs with the e-tron GT and RS e-tron GT. At participating dealers, owners can pay an additional $999 plus tax to get vehicle servicing for four years that includes high-wear items like wipers and brake pads, available valet pick-up and drop-off for service appointments, mobile service (tire changes, basic maintenance) and, if an owner needs it, up to 10 free tows to an Audi center per year. Audi is also offering seven free days of rentals from Audi by Silvercar with the purchase of an e-tron GT or a RS e-tron.

That virtual cockpit, though

Audi-e-tron GT Ascari Blue

2022 Audi e-tron GT. Image Credits: Audi

The e-tron GT and the RS e-tron GT blend features from both the e-tron (the SUV) and the Audi R8, and both GTs get dual screens that offer tons of features for drivers and passengers. The 12.3-inch virtual cockpit in front of the driver is highly customizable, like it is on most modern Audis today, offering everything from map views to battery status access with few simple inputs on the steering wheel.

The system makes navigating a breeze and drivers or passengers can use voice control to set destinations by simply pressing the button on the steering wheel and giving the car an address, point of interest or city.

The voice system is surprisingly robust and while it was a bit laggy when I used it, it recognizes natural language inputs and verbally prompts the speaker to use specific terms when choosing between two options — say canceling a route and putting in a new destination versus making a stopover. Never once did I have to try multiple times to get the system to recognize what I wanted to do.

The 10.1-inch infotainment system in the center console offers everything from drive mode selection to specific Audi apps, navigation options, optional massage, heat and cooled seats, and much more.

The Audi MMI center screen is touch capacitive and users can drag and drop icons around, allowing owners and their passengers to customize the home screen in any way. The seat heater, cooler and the massage can all be run at the same time, should someone so desire (and have the right equipment), all from the MMI.

Maybe just a little flash?

2022 Audi RS e-tron GT Tango Red_23

2022 Audi RS e-tron GT. Image Credits: Audi

Both GTs are pushing $100,000, and for that, some buyers may want just a little bit more razzle dazzle.

For the launch year, Audi is offering one pricey, but special option on the RS e-tron GT: the Year One package. For $20,350, owners get the “carbon performance” package with features like carbon-fiber trim, illuminated door sills, black badges and rear-wheel steering, along with special 21-inch wheels, red ceramic brake calipers, red seatbelts and red stitching inside.

For those who want the prestige, power and advanced technology of a luxury brand, in an electric halo grand tourer that doesn’t (necessarily) come with all the flash, the 2022 Audi e-tron GT and Audi RS e-tron GT fit the bill. Both are on sale now.

The next generation of global payments: Afterpay + Square

By Ram Iyer
Dana Stalder Contributor
Dana Stalder is a partner at Matrix Partners. The former commercial chief (Product, Sales and Marketing) at PayPal, he now leads fintech investing at Matrix Partners, where he also invests in consumer marketplaces and enterprise software.

Sunday was a big day in fintech: Afterpay has agreed to merge with Square. This agreement sets two of the most admired financial technology companies in recent history on a path to becoming one.

Afterpay and Square have the potential to build one of the world’s most important payments networks. Square has built a very significant merchant payment network, and, via Cash App, a thriving high-growth consumer payment service. However, these two lines of business have historically not been integrated. Together, Square and Afterpay will be able to weave all of these services together into a single integrated experience.

Afterpay and Cash App each have double-digit millions of consumers, and Square’s seller ecosystem and Afterpay’s merchant network both record double-digit billions of payment volume per year. From the offline register and the online checkout flow to sending money in just a few taps, Square and Afterpay will tell a complete story of next-generation economic empowerment.

As Afterpay’s only institutional venture investor, I wanted to share some perspective on how we got here and what this merger means for the future of consumer finance and the payments industry.

Afterpay and Square have the potential to build one of the world’s most important payments networks.

Critical innovations in fintech

Every five to 10 years, the global payments industry undergoes a critical innovation cycle that determines the winners and losers for the next several decades. The last major transition was the shift to NFC-based mobile payments, which I wrote about in 2015. The major mobile OS vendors (Apple and Google) cemented their position in the global payments stack by deftly bridging the needs of the networks (Visa, Mastercard, etc.) and consumers by way of the mobile devices in their pockets.

Afterpay sparked the latest critical innovation cycle. Conceived in a living room in Sydney by a millennial, Nick Molnar, for millennials, Afterpay had a key insight: Millennials don’t like credit.

Millennials came of age during the global mortgage crisis of 2008. As young adults, they watched their friends and family lose their homes by overextending on mortgage debt, bolstering their already lower trust for banks. They also have record levels of student debt. Therefore, it’s no surprise that millennials (and Gen Z right behind them) strongly prefer debit cards over credit cards.

But it’s one thing to recognize the paradigm shift and quite another to do something about it. Nick Molnar and Anthony Eisen did something, ultimately building one of the fastest-growing payments startups in history on their core product: Buy now, pay later … and never any interest.

Afterpay’s product is simple. If you have $100 in your cart and choose to pay with Afterpay, it will charge your bank card (typically a debit card) $25 every two weeks in four installments. No interest, no revolving debt and no fees with on-time payments. For the millennial consumer, this meant they could get the primary benefit of a credit card (the ability to pay later) with their debit card, without the need to worry about all the bad things that come with credit cards — high interest rates and revolving debt.

All upside, no downside. Who could resist? For the early merchants, virtually all of whom relied on millennials as their key growth segment, they got a fair trade: Pay a small fee above payment processing to Afterpay, get significantly higher average order values and conversions to purchase. It was a win-win proposition and, with lots of execution, a new payment network was born.

The rise of Afterpay

Image Credits: Matrix Partners

Imitation is the greatest form of flattery

Afterpay went somewhat unnoticed outside Australia in 2016 and 2017, but once it came to the U.S. in 2018 and built a business there that broke $100 million net revenues in only its second year, it got attention.

Klarna, which had struggled with product-market fit in the U.S., pivoted their business to emulate Afterpay. And Affirm, which had always been about traditional credit — generating a significant portion of their revenue from consumer interest — also noticed and introduced their own BNPL offering. Then came PayPal with “Pay in 4,” and just a few weeks ago, there has been news that Apple is expected to enter the space.

Afterpay created a global phenomenon that has now become a category embraced by mainstream players across the industry — a category that is on track to take a meaningful share of global retail payments over the next 10 years.

Afterpay stands apart. It has always been the BNPL leader by virtually every measure, and it has done it by staying true to their customers’ needs. The company is great at understanding the millennial and Gen Z consumer. It’s evident in the voice, tone and lifestyle brand you experience as an Afterpay user, and in the merchant network it continues to build strategically. It’s also evident in the simple fact that it doesn’t try to cross-sell users revolving debt products.

Most importantly, it’s evident in the usage metrics relative to competition. This is a product that people love, use and have come to rely on, all with better, fairer terms than were ever available to them than with traditional consumer credit.

Consumer loyalty and frequency drives powerful network effect, securing the lifetime value of a consumer

Image Credits: Afterpay H1 FY21 results presentation

Square + Afterpay: The perfect fit

I’ve been building payment companies for over 15 years now, initially in the early days of PayPal and more recently as a venture investor at Matrix Partners. I’ve never seen a combination that has such potential to deliver extraordinary value to consumers and merchants. Even more so than eBay + PayPal.

Beyond the clear product and network complementarity, what’s most exciting to me and my partners is the alignment of values and culture. Square and Afterpay share a vision of a future with more opportunity and fewer economic hurdles for all. As they build toward that future together, I’m confident that this combination is a winner. Square and Afterpay together will become the world’s next generation payment provider.

Lilium in talks with Brazilian airline for $1B order

By Aria Alamalhodaei

German electric aircraft startup Lilium is negotiating the terms for a 220-aircraft, $1 billion order with one of Brazil’s largest domestic airlines, the companies said Monday. Should the deal with Azul move forward, it would mark the largest order in Lilium’s history and its first foray into South American markets.

“A term sheet has been signed and we will move towards a final agreement in the coming months,” a Lilium spokesperson told TechCrunch.

The 220 aircraft would fly as part of a new, co-branded airline network that would operate in Brazil. Should the two companies come to an agreement, Azul would operate and maintain the fleet of the flagship 7-seater aircraft, and Lilium would provide custom spare parts, including replacement batteries, and an aircraft health monitoring platform.

Deliveries would commence in 2025, a year after Lilium has said it plans to begin commercial operations in Europe and the United States. These timelines are dependent upon Lilium receiving key certification approvals from each country’s requisite aerospace regulator. Azul said in a statement it would “support Lilium with the necessary regulatory approval processes in Brazil” as part of the agreement.

Even if a deal is reached, it would likely be subject to Lilium hitting certain performance standards and benchmarks, similar to the conditions of Archer Aviation’s $1 billion order with United Airlines. Still, orders of this value are seen as a positive signal to markets and investors that an electric vertical take-off and landing aircraft is more than smoke and mirrors.

Also like Archer, Lilium is planning on taking the SPAC route to going public. The company in March announced its intention to merge with Qell Acquisition Corp. and list on Nasdaq under ticker symbol “LILM.” SPACs have become a popular vehicle for public listing across the transportation sector, but they’ve become especially popular with capital-intensive eVTOL startups.

The merger may be necessary for the company’s continued operations. According to the German news website Welt, Lilium added a risk warning to its 2019 balance sheet noting that it will run out of money in December 2022 should the SPAC merger not be completed.

Tech leaders can be the secret weapon for supercharging ESG goals

By Ram Iyer
Jeff Sternberg Contributor
Jeff Sternberg is a technical director in the Office of the CTO (OCTO) at Google Cloud, a team of technologists and industry experts that help Google Cloud's customers solve challenging problems and disrupt their industries.

Environmental, social and governance (ESG) factors should be key considerations for CTOs and technology leaders scaling next generation companies from day one. Investors are increasingly prioritizing startups that focus on ESG, with the growth of sustainable investing skyrocketing.

What’s driving this shift in mentality across every industry? It’s simple: Consumers are no longer willing to support companies that don’t prioritize sustainability. According to a survey conducted by IBM, the COVID-19 pandemic has elevated consumers’ focus on sustainability and their willingness to pay out of their own pockets for a sustainable future. In tandem, federal action on climate change is increasing, with the U.S. rejoining the Paris Climate Agreement and a recent executive order on climate commitments.

Over the past few years, we have seen an uptick in organizations setting long-term sustainability goals. However, CEOs and chief sustainability officers typically forecast these goals, and they are often long term and aspirational — leaving the near and midterm implementation of ESG programs to operations and technology teams.

Until recently, choosing cloud regions meant considering factors like cost and latency to end users. But carbon is another factor worth considering.

CTOs are a crucial part of the planning process, and in fact, can be the secret weapon to help their organization supercharge their ESG targets. Below are a few immediate steps that CTOs and technology leaders can take to achieve sustainability and make an ethical impact.

Reducing environmental impact

As more businesses digitize and more consumers use devices and cloud services, the energy needed by data centers continues to rise. In fact, data centers account for an estimated 1% of worldwide electricity usage. However, a forecast from IDC shows that the continued adoption of cloud computing could prevent the emission of more than 1 billion metric tons of carbon dioxide from 2021 through 2024.

Make compute workloads more efficient: First, it’s important to understand the links between computing, power consumption and greenhouse gas emissions from fossil fuels. Making your app and compute workloads more efficient will reduce costs and energy requirements, thus reducing the carbon footprint of those workloads. In the cloud, tools like compute instance auto scaling and sizing recommendations make sure you’re not running too many or overprovisioned cloud VMs based on demand. You can also move to serverless computing, which does much of this scaling work automatically.

Deploy compute workloads in regions with lower carbon intensity: Until recently, choosing cloud regions meant considering factors like cost and latency to end users. But carbon is another factor worth considering. While the compute capabilities of regions are similar, their carbon intensities typically vary. Some regions have access to more carbon-free energy production than others, and consequently the carbon intensity for each region is different.

So, choosing a cloud region with lower carbon intensity is often the simplest and most impactful step you can take. Alistair Scott, co-founder and CTO of cloud infrastructure startup Infracost, underscores this sentiment: “Engineers want to do the right thing and reduce waste, and I think cloud providers can help with that. The key is to provide information in workflow, so the people who are responsible for infraprovisioning can weigh the CO2 impact versus other factors such as cost and data residency before they deploy.”

Another step is to estimate your specific workload’s carbon footprint using open-source software like Cloud Carbon Footprint, a project sponsored by ThoughtWorks. Etsy has open-sourced a similar tool called Cloud Jewels that estimates energy consumption based on cloud usage information. This is helping them track progress toward their target of reducing their energy intensity by 25% by 2025.

Make social impact

Beyond reducing environmental impact, CTOs and technology leaders can have significant, direct and meaningful social impact.

Include societal benefits in the design of your products: As a CTO or technology founder, you can help ensure that societal benefits are prioritized in your product roadmaps. For example, if you’re a fintech CTO, you can add product features to expand access to credit in underserved populations. Startups like LoanWell are on a mission to increase access to capital for those typically left out of the financial system and make the loan origination process more efficient and equitable.

When thinking about product design, a product needs to be as useful and effective as it is sustainable. By thinking about sustainability and societal impact as a core element of product innovation, there is an opportunity to differentiate yourself in socially beneficial ways. For example, Lush has been a pioneer of package-free solutions, and launched Lush Lens — a virtual package app leveraging cameras on mobile phones and AI to overlay product information. The company hit 2 million scans in its efforts to tackle the beauty industry’s excessive use of (plastic) packaging.

Responsible AI practices should be ingrained in the culture to avoid social harms: Machine learning and artificial intelligence have become central to the advanced, personalized digital experiences everyone is accustomed to — from product and content recommendations to spam filtering, trend forecasting and other “smart” behaviors.

It is therefore critical to incorporate responsible AI practices, so benefits from AI and ML can be realized by your entire user base and that inadvertent harm can be avoided. Start by establishing clear principles for working with AI responsibly, and translate those principles into processes and procedures. Think about AI responsibility reviews the same way you think about code reviews, automated testing and UX design. As a technical leader or founder, you get to establish what the process is.

Impact governance

Promoting governance does not stop with the board and CEO; CTOs play an important role, too.

Create a diverse and inclusive technology team: Compared to individual decision-makers, diverse teams make better decisions 87% of the time. Additionally, Gartner research found that in a diverse workforce, performance improves by 12% and intent to stay by 20%.

It is important to reinforce and demonstrate why diversity, equity and inclusion is important within a technology team. One way you can do this is by using data to inform your DEI efforts. You can establish a voluntary internal program to collect demographics, including gender, race and ethnicity, and this data will provide a baseline for identifying diversity gaps and measuring improvements. Consider going further by baking these improvements into your employee performance process, such as objectives and key results (OKRs). Make everyone accountable from the start, not just HR.

These are just a few of the ways CTOs and technology leaders can contribute to ESG progress in their companies. The first step, however, is to recognize the many ways you as a technology leader can make an impact from day one.

The tale of two edtech IPOs

By Natasha Mascarenhas

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. Last week, Natasha and Alex jumped on Twitter Spaces to discuss the tale of two edtech IPOs: Duolingo, the consumer language learning company, and Powerschool, the enterprise K-12 software platform. It was a rare moment in the sun for the recently-revitalized sector, which saw two companies list on the NASDAQ on the same dang day.

Special shout out to our producer Chris Gates for handling this impromptu live chat, tech difficulties and all, and bringing it to your ears on this lovely Monday. Don’t forget that Equity is largely on break this week!

Here’s what we got into, featuring some edtech entrepreneurs nice enough to drop on by:

  • China’s edtech crackdown and how it is impacting startups both internationally and domestically. The regulations, one of which will force for-profit tutoring companies to turn into non-profits, are also getting the cold shoulder from U.S. edtech VCs, it seems.
  •  As Lightspeed Ventures investor Mercedes Bent so aptly put it, the news is somewhat ironic: “[T]he US edtech IPO market is on fire (after being dormant for so long) and the China edtech market is crumbling (after being on fire for so long).”
  • Evidence of that can be found in the Duolingo IPO pricing arc. The company first posted a strong estimate of its worth, raised its range, priced above that raised interval, and still managed to trade higher. The company is still up more than $30 from its IPO price.
  • Powerschool was a bit different. It priced at $18 per share, the low-end of its $18 to $20 range. The company is up from its IPO price, albeit a much more modest two, or three percent in today’s early trading.

In the second half of the show, we brought on the following host of edtech founders to share their hot takes about the current state of edtech:

Before we go, Equity is on a “break” this week, as we do some soul searching and refresh before our next run of shows. Obviously we still had to shaare this episode, and um, are recording another episode this week too, but you, my dear friend, will hear from us again next Monday.

Equity drops every Monday at 7:00 a.m. PDT, Wednesday, and Friday morning at 7:00 a.m. PDT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Yaydoo secures $20M, aims to simplify B2B collections, payments

By Christine Hall

It’s no secret that the technology for easy business-to-business payments has not yet caught up to its peer-to-peer counterparts, but Yaydoo thinks it has the answer.

The Mexico City-based B2B software and payments company provides three products, VendorPlace, P-Card and PorCobrar, for managing cash flow, optimizing access to smart liquidity, and connecting small, midsize and large businesses to an ecosystem of digital tools.

Sergio Almaguer, Guillermo Treviño and Roberto Flores founded Yaydoo — the name combines “yay” and “do” to show the happiness of doing something — in 2017. Today, the company announced the close of a $20.4 million Series A round co-led by Base10 Partners and monashees.

Joining them in the round were SoftBank’s Latin America Fund and Leap Global Partners. In total, Yaydoo has raised $21.5 million, Almaguer told TechCrunch.

Prior to starting the company, Almaguer was working at another company in Mexico doing point-of-sale. His large enterprise customers wanted automation for their payments, but he noticed that the same tools were too expensive for small businesses.

The co-founders started Yaydoo to provide procurement, accounts payable and accounts receivables, but in a simpler format so that the collection and payment of B2B transactions was affordable for small businesses.

Image Credits: Yaydoo

The idea is taking off, and vendors are adding their own customers so that they are all part of the network to better link invoices to purchase orders and then connect to accounts payable, Almaguer said. Yaydoo estimates that the automation workflows reduced 80% of time wasted paying vendors, on average.

Yaydoo is joining a sector of fintech that is heating up — the global B2B payments market is valued at $120 trillion annually. Last week, B2B payments platform Nium announced a $200 million in Series D funding on a $1 billion valuation. Others attracting funding recently include Paystand, which raised $50 million in Series C funding to make B2B payments cashless, while Dwolla raised $21 million for its API that allows companies to build and facilitate fast payments.

The new funding will enable the company to attract new hires in Mexico and when the company expands into other Latin American countries. Yaydoo is also looking at future opportunities for its working capital business, like understanding how many invoices customers are setting, the access to actual payments, and how money flows out and in so that it can provide insights on working capital funding gaps. The company will also invest in product development.

The company has grown to over 800 customers, up from 200 in the first quarter of 2020. Its headcount also grew to 100 from 30 during the same time. In the last 12 months, over 70,000 companies have transacted on the Yaydoo network, and total payment volume grew to hundreds of millions of dollars.

Yaydoo is a SaaS subscription model, but the new funding will also enable the company to create a pool of potential customers with a “freemium” offering with the goal of converting those customers into the subscription model as they grow, Almaguer said.

Rexhi Dollaku, partner at Base10 Partners, said the firm saw the way B2B payments were becoming modernized and “was impressed” by the Yaydoo team and how it built a complicated infrastructure, but made it easy to use.

He believes Latin America is 10 years behind in terms of B2B payments but will catch up sooner than later because of the digital transformation going on in the region.

“We are starting to see early signs of the network being built out of the payments product, and that is a good indication,” Dollaku said. “With the funding, Yaydoo will be also able to provide more financial services options for businesses to address a working fund gap.”

Newtopia closes first fund of $50M to invest in LatAm startups

By Christine Hall

Early-stage venture capital fund Newtopia VC launched Monday with $50 million to invest in tech startups based in Latin America.

The fund will invest between $250,000 and $1 million in startups at the seed stage to help them achieve the milestones needed on the path to raising a Series A.

Newtopia is led by five major players in the regional entrepreneurial ecosystem:

  • Patricio Jutard, co-founder of MURAL;
  • Mariano Mayer, former national secretary for entrepreneurs and SMEs in Argentina and founder of Marea Venture Partners;
  • Sacha Spitz, co-founder and partner of Yavu Ventures and former director at the Universidad de San Andrés incubation program;
  • Jorge Aguado, former national science, technology and innovation secretary in Argentina;
  • Juan Pablo Lafosse, founder and former CEO of Almundo.

The group has already invested in startups in Mexico, Brazil and Argentina, including Aleph (B2B SaaS for e-commerce), Apperto (social commerce), Choiz (healthtech), Exactly (DeFi), Elevva (e-commerce brands), Inipay (fintech), Leef (sustainability), Wibson (e-privacy) and Yerbo (wellness).

Mayer told TechCrunch that he sees a great moment happening in Latin America around global venture capital firms — like Sequoia Capital, Andreessen Horowitz and SoftBank —making bets in the region, especially targeting later-stage investments. There are home-grown venture capital firms doing well, too, citing Kazek’s $1 billion funds.

“However, we see a gap in investments in seed and road to Series A,” he added. “We aim to help entrepreneurs in those stages. Newtopia started with conversations during the pandemic, and now we see a big momentum for transformation of traditional sectors and the talent to make businesses out of these opportunities.”

Newtopia is offering both investment and a hands-on mentorship model to guide startups through the initial stages so they can grow regionally or globally. The fund has already amassed a community of more than 70 founders to invest, advise and be venture partners to the portfolio companies.

The Newtopia 10-Week Program works with companies to find product-market fit, achieve initial goals and set a foundation for further growth. The firm opened the call for applicants and will select 10 startups to receive a spot in the program and $100,000 each.

By taking a lead in early-stage investing, it will feed the rest of the venture capital firms that are doing later-stage investing, Mayer said.

He sees investments growing in Latin America every year, estimating there was a record $4 billion spread across the region, turning some companies into unicorns, including Jutard’s Mural, which raised $50 million in July. That has more than validated that there will be more money in coming years, Mayer added.

Jutard said the fund’s founders were all investing or mentoring companies on their own, but the new funding will enable them to structure that assistance to help hundreds of startups rather than a handful.

“Early-stage companies go through an emotional rollercoaster where they feel alone, encounter times when it is hard to sell their product or recruit, so we are focused on building a community of support,” Jutard added.

Mixlab raises $20M to provide purrfect pharmacy experience for pet parents

By Christine Hall

Pet pharmacy Mixlab has developed a digital platform enabling veterinarians to prescribe medications and have them delivered — sometimes on the same day — to pet parents.

The New York-based company raised a $20 million Series A in a round of funding led by Sonoma Brands and including Global Founders Capital, Monogram Capital, Lakehouse Ventures and Brand Foundry. The new investment gives Mixlab total funding of $30 million, said Fred Dijols, co-founder and CEO of Mixlab.

Dijols and Stella Kim, chief experience officer, co-founded Mixlab in 2017 to provide a better pharmacy experience, with the veterinarian at the center.

Dijols’ background is in medical devices as well as healthcare investment banking, where he became interested in the pharmacy industry, following TruePill and PillPack, which he told TechCrunch were “creating a modern pharmacy model.”

As more pharmacy experiences revolved around at-home delivery, he found the veterinary side of pharmacy was not keeping up. He met Kim, a user experience expert, whose family owns a pharmacy, and wanted to bring technology into the industry.

“The pharmacy industry is changing a lot, and technology allows us to personalize the care and experience for the veterinarian, pet parent and the pet,” Kim said. “Customer service is important in healthcare as is dignity and empathy. We kept that in mind when starting Mixlab. Many companies use technology to remove the human element, but we use it to elevate it.”

Mixlab’s technology includes a digital service for veterinarians to streamline their daily medication workflow and gives them back time to spend with patient care. The platform manages the home delivery of medications across branded, generic and over-the-counter medications, as well as reduces a clinic’s on-site pharmacy inventories. Veterinarians can write prescriptions in seconds and track medication progress and therapy compliance.

The company also operates its own compound pharmacy where it specializes in making medications on-demand that are flavored and dosed.

On the pet parent side, they no longer have to wait up to a week for medications nor have to drive over to the clinic to pick them up. Medications come in a personalized care package that includes a note from the pharmacist, clear and easy-to-read instructions and a new toy.

Over the past year, adoptions of pets spiked as more people were at home, also leading to an increase in vet visits. This also caused the global pet care industry to boom, and it is now projected to reach $343 billion by 2030, when it had been valued at $208 billion in 2020.

Pet parents are also spending more on their pets, and a Morgan Stanley report showed that they see pets as part of their family, and as a result, 37% of people said they would take on debt to pay for a pet’s medical expenses, while 29% would put a pet’s needs before their own.

To meet the increased demand in veterinary care, the company will use the new funding to improve its technology and expand into more locations where it can provide same-day delivery. Currently it is shipping to 47 states and Dijols expects to be completely national by the end of the year. He also expects to hire more people on both the sales team and in executive leadership positions.

The company is already operating in New York and Los Angeles and growing 3x year over year, though Dijols admits operating during the pandemic was a bit challenging due to “a massive surge of orders” that came in as veterinarians had to shut down their offices.

As part of the investment, Keith Levy, operating partner at Sonoma Brands and former president of pet food manufacturer Royal Canin USA, will join Mixlab’s board of directors. Sonoma Brands is focused on growth sectors of the consumer economy, and pets was one of the areas that investors were interested in.

Over time, Sonoma found that within the veterinary community, there was space for a lot of players. However, veterinarians want to home in on one company they trust, and Mixlab fit that description for many because they were getting medication out faster, Levy said.

“What Mixlab is doing isn’t completely unique, but they are doing it better,” he added. “When we looked at their customer service metrics, we saw they had a good reputation and were relentlessly focused on providing a better experience.”

The Station: The script for Elon Musk’s Loop drivers, Redwood snags $700M and a chat with Kodiak Robotics’ co-founder

By Kirsten Korosec

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every weekend in your inbox.

Hello readers: Welcome to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B.

In case you missed it, our scoop machine Mark Harris was at it again. This time, he found some interesting and entertaining documents related to Elon Musk’s underground Loop system in Las Vegas received via a Freedom of Information Act. Among the treasure is a “ride script” that instructs drivers for the Loop system to bypass passengers’ questions about how long they have been driving for the company, declare ignorance about crashes, and shut down conversations about Musk himself.

The takeaway: the script shows just how serious The Boring Company, which built and operates the system, is about controlling the public image of the new system, its technology and especially Musk.

Importantly, the documents confirm that Autopilot, the advanced driver assistance system in the Tesla vehicles used in the Loop system, must be disabled.

As always, you can email me at kirsten.korosec@techcrunch.com to share thoughts, criticisms, offer up opinions or tips. You can also send a direct message to me at Twitter — @kirstenkorosec.

Micromobbin’

This is a step outside the norm of what I usually think of when I think of micromobility (you’ll see what I did there in a second), but this week I wrote about a new in-shoe navigation system that helps the visually impaired walk around town.

Ashirase, as both the system and the name of the company is called, involves attaching a three-dimensional vibration device, including a motion sensor, inside a pair of shoes. This bit of hardware is connected to a smartphone app that someone with low vision can use to enter their destination. Vibrations in the front part of the shoe give the cue to walk straight, and vibrations on the left and right cue the user to make a left or right turn. The aim is to free up the hands while walking to use a cane and allow the walker to put more of their full attention on audio signals in the environment, thus making their commutes a bit more intuitive and their lives more independent.

It’s a really interesting bit of tech because it uses a similar stack to what we’re seeing in autonomous driving and advanced driver assistance systems. Which makes sense because that’s the founder’s background. Wataru Chino worked in Honda’s EV motor control and automated driving systems departments since 2009. His startup is a product of Honda’s incubator, Ignition, that features original technology, ideas, and designs of Honda associates with the goal of solving social issues and going beyond the existing Honda business.

Accessibility: We love to see it

Cabify recently announced a new feature that makes its rideshare service more accessible to the elderly, people with partial visual impairment and people with cognitive disabilities. The feature provides voice notifications to alert the user when a driver is on their way or has just arrived, when the ride starts, when a stop has been reached, when a message has come into the app’s chat, etc.

The notification makes use of a text-to-speech functionality that Android and iOS phones have.

“Apple and Google operating systems allow us to pronounce sentences with the system’s voice but we have developed the text and established the situations where we inform and draw the user’s attention,” a Cabify spokesperson told me.

Lime’s push for world domination

And we’re back with the latest on Lime’s plans to take over the world, one electric scooter at a time. The micromobility goliath has announced an integration with the Moovit transit planning app. From Monday onwards, Moovit users in 117 cities across 20 countries will see Lime’s electric scooters, bikes and mopeds show up as an option for travel, either as the whole journey or as part of a multi-modal journey. This news follows a trend we’re seeing as cities start to see micromobility companies as less of a public nuisance and more of a public solution, particularly for first- and last-mile travel. Integrating with Moovit, an app that’s solely focused on public transportation, is a move that helps in the long run creating a broader transportation ecosystem.

New whips

Espin released its limited edition fixie style e-bike called the Aero. It’s just the thing for Seattle hipsters, particularly ones with a stick-and-poke bike tattoo. The bike frame is just as sleek as you’d expect from a single gear bike, all clean lines and comes in either a forest green or a smoke gray. The Aero can reach top speeds of 20 mph and can hit 30 miles on a single charge. Best of all, it doesn’t break the bank at $1,399.

Splach, which normally makes e-scooters and e-bikes, has come out with something it’s calling the Transformer. I truly don’t know how to categorize it but it looks like a lot of fun to ride. The company is calling the light-duty e-vehicle a “mini-moto Robust scooter specialized for rugged terrains.” It looks like a dirt bike has been sized way down and given a long neck so you can stand on it and still steer it. It also looks like it would indeed do well on rugged terrains, based on videos of people shredding down dirt paths. Splach used Indiegogo to fund the thing, and said it reached its goal within an hour.

Deal of the week

money the station

Get ready to hear a lot more about supply chain constraints around batteries with virtually every automaker shouting out pledges to shift their entire portfolio away from internal combustion engines and towards electric powertrains.

Cell producers need access to the raw materials like nickel that are needed to make batteries. Mining those materials is the most common means, but that isn’t sustainable (and I’m not just talking about the environmental toll). JB Straubel, who is best known as the former Tesla co-founder and longtime CTO, is tackling the supply chain issue through his startup Redwood Materials. The battery recycling company is aiming to create a circular supply chain. This closed-loop system, Straubel says, will be essential if the world’s battery cell producers hope to have the supply needed for consumer electronics and the coming wave of electric vehicles.

High-profile investors like Amazon, funds managed by T. Rowe and Bill Gates’ Breakthrough Ventures fund recognize the opportunity and have injected $700M in fresh capital into Redwood Materials. This is comically large compared to the startup’s last raise of $40 million. And sources tell me that this pushes Redwood Material’s valuation to $3.7 billion.

I interviewed Straubel about the raise and what struck me was how aggressively he wants to scale; he is treating this issue as if there is no time to lose — and he’s not wrong.

Other deals that got my attention this week …

Clarios, the maker of low-voltage vehicle batteries, postponed its IPO, citing market volatility, Bloomberg reported. the Milwaukee area-based company backed by Brookfield Asset Management had filed to raise $1.7 billion by offering 88.1 million shares at a price range of $17 to $21.

Fisker, the electric vehicle startup turned publicly traded company via a SPAC, has turned investor to support EV charging company Allego. Fisker said it is investing $10 million in private-investment-in-public equity (PIPE) funding for the merger of Allego and special purpose acquisition company Spartan Acquisition Corp III. The merger puts Allego at a pro forma equity value of $3.14 billion.

Flock, which went from providing drone insurance to commercial vehicle insurance, raised $17 million in a Series A funding led by Social Capital, the investment vehicle run by Chamath Palihapitiya, best known as a SPAC investor and chairman of Virgin Galactic. Flock’s existing investors Anthemis and Dig Ventures also participated. This round brings Flock’s total funding to $22 million. Justin Saslaw (Social Capital’s fintech partner) joins Flock’s board of directors, as does Ross Mason (founder of Dig Ventures and MuleSoft).

HappyFresh, the on-demand grocery app based in Indonesia, raised $65 million in a Series D round led by Naver Financial Corporation and Gafina B.V., with participation from STIC, LB and Mirae Asset Indonesia and Singapore. It also included returning investors Mirae-Asset Naver Asia Growth Fund and Z Venture Capital. The company’s previous round of funding was a $20 million Series C announced in April 2019.

Lordstown Motors got a lifeline from a hedge fund managed by investment firm Yorkville Advisors about five weeks after the automaker issued a warning that it might not have enough funds to bring its electric pickup truck to market. The hedge fund agreed to buy $400 million worth of shares over a three-year period, according to a regulatory filing.

Merqueo, the on-demand delivery service that operates in Latin America, raised $50 million in a Series C round of funding co-led by IDC Ventures, Digital Bridge and IDB Invest. MGM Innova Group, Celtic House Venture Partners, Palm Drive Capital and previous shareholders also participated. The financing brings the Bogota, Colombia-based startup’s total raised to $85 million since its 2017 inception.

Niron Magnetics, a company developing permanent magnets free of rare earths, raised $21.3 million in new financing from the Volvo Cars Tech Fund and Volta Energy Technologies, which joined existing investors Anzu Partners and the University of Minnesota. Niron will use the funding to build its pilot production facility in Minnesota.

Onto, the EV car subscription company raised $175 million in a combined equity and debt Series B round. The equity piece was led by Swedish VC Alfvén & Didrikson. British investment company Pollen Street Capital provided the senior-secured asset-backed debt facility. The company, which has raised a total of $245 million, says it plans to double its fleet size every three to six months and that any new vehicles will be used as collateral. Onto did not disclose how much of the round came from equity versus debt.

Zūm, a student transportation startup, was awarded a five-year $150 million contract to modernize San Francisco Unified School District transport service throughout the district. Zūm, which already operates its rideshare-meets-bus service in Oakland, much of Southern California, Seattle, Chicago and Dallas, will be responsible for handling day-to-day operations, transporting 3,500 students across 150 school campuses starting this fall semester.

A little bird

blinky cat bird green

I hear things. But I’m not selfish. Let me share!

You might have missed my article late Friday about Argo AI landing a permit in California that will allow the company to give people free rides in its self-driving vehicles on the state’s public roads.

Tl;dr: The California Public Utilities Commission issued Argo the so-called Drivered AV pilot permit, which is part of the state’s Autonomous Vehicle Passenger Service pilot. This puts Argo in a small and growing group of companies seeking to expand beyond traditional AV testing — a signal that the industry, or at least some companies, are preparing for commercial operations.

Regulatory hurdles remain and don’t expect Argo to be offering and charging for “driverless” rides anytime soon. But progress is being made and I would expect the company to secure the next permit — in a long line of them — later this year.

Argo has never officially indicated what city it is targeting for a robotaxi service in California. The company has been testing its autonomous vehicle technology in Ford vehicles around Palo Alto since 2019. Today, the company’s test fleet in California is about one dozen self-driving test vehicles. It also has autonomous test vehicles in Miami, Austin, Washington D.C., Pittsburgh and Detroit. (In July, Argo and Ford announced plans to launch at least 1,000 self-driving vehicles on Lyft’s ride-hailing network in a number of cities over the next five years, starting with Miami and Austin.)

I’m hearing from some sources familiar with Argo’s strategy for California that we should look south of the Bay Area. Way south.

The city that jumps to mind is San Diego. Some AV companies are already playing around the Irvine area and Los Angeles seems too unwieldy. Plus, Ford already has a footprint in San Diego. The automaker partnered way back in 2017 with AT&T, Nokia and Qualcomm Technologies to test Cellular vehicle-to-everything (CV2X) at the San Diego Regional Proving Ground with the support of the San Diego Association of Governments, Caltrans, the city of Chula Vista, and intelligent transportation solutions provider McCain. The upshot of these trials? To improve traffic efficiency, vehicle safety and “support a path towards autonomous vehicles.”

Policy corner

the-station-delivery

Hi everyone. Let’s dive into two key pieces of proposed legislation this week: the infrastructure bill and the tailpipe emissions standards.

After months of negotiations, U.S. senators have finally settled on a $550 billion infrastructure package that includes investments in roads, bridges, broadband and more. The bill would provide $7.5 billion to electrify buses and ferries, including school buses, and $7.5 billion to build out a national network of public EV charging stations. Subsequent statements on the bill from the White House say directly that the EV investments are intended to keep the U.S. competitive on the world stage: “U.S. market share of plug-in electric vehicle (EV) sales is only one-third the size of the Chinese EV market. The President believes that must change.”

The budget is just a fraction of the $2.25 trillion bill President Joe Biden originally introduced in March. That version of the bill earmarked billions more for transportation electrification, especially in rebates and incentives to get consumers buying more EVs. The bill is still with the Senate for final approval. Then it will head to the House before finally ending up on Biden’s desk.

The Environmental Protection Agency and the Department of Transportation have proposed rules that would beef up tailpipe emissions standards, which had been rolled back under President Donald Trump. The rules would be identical to the agreement the state of California reached with Ford, VW, Honda, BMW and Volvo in 2019, the AP reported. If approved, the rules would apply starting with model year 2023 vehicles.

The aim is to cut carbon emissions from transportation and encourage more people to buy hybrid and electric. But many environmental groups like the Sierra Club — plus some EV automakers — don’t think they go far enough.

“This draft proposal would drive us in the right direction after several years in reverse–but slowly getting back on track is not enough,” Chris Nevers, senior director of environmental policy at Rivian, told TechCrunch. EPA and NHTSA must maximize the stringency of the program beyond the voluntary deal and account for current and future developments in vehicle electrification.

One more thing that caught my eye this week…The Washington Post reported that Biden and a group of automakers are negotiating for the latter group to make a “formal pledge” to have at least 40% of all vehicles sold in 2030 to be electric. The article doesn’t specify which OEMs are part of the talks. However, it’s hard to imagine automakers signing onto anything — even a “voluntary pledge” — without some hefty federal spending to go along with it. We’ll have to see if the provisions in the infrastructure bill are enough.

— Aria Alamalhodaei

Notable reads and other tidbits

As per ushe, there was a ton of transportation news this week. Let’s dig in.

ADAS

Yep, ADAS gets its own section now in an effort to make it abundantly clear that advanced driver assistance systems are not self-driving cars. Never. Never ever.

New York Times’ Greg Bensinger weighs in on beta testing and Tesla in this opinion column.

Autonomous vehicles

Aurora co-founder and chief product officer Sterling Anderson put out a blog and a bunch of tweets to layout a blueprint for an autonomous ride-hailing business that will launch in late 2024 with partners Toyota and Uber. Aurora has spent the past year or so pushing its messaging on self-driving trucks, which the company says is its best and most viable first commercial product. Aurora never entirely ditched the robotaxi idea, but it was pretty quiet on the topic. Until now.

The blog comes about a week after competitor Argo AI and Ford announced a partnership with Lyft. While the timing might not be related, it does show that competition is heating up in both areas — robotaxis and self-driving trucks — with every AV company keen to show progress and deep partnerships.

TuSimple, the self-driving truck company that went public earlier this year, has partnered with Ryder as part of its plan to build out a freight network that will support its autonomous trucking operations. Ryder’s fleet maintenance facilities will act as terminals for TuSimple’s so-called AFN, or autonomous freight network.

Electric vehicles

Ford released Wednesday its second quarter earnings for 2021, which besides containing a surprise profit despite the ongoing chip shortage, revealed that its F-150 Lightning electric pickup has generated 120,000 preorders since its unveiling in May. Ford reported revenue of $26.8 billion, slightly below expectations, and net income of $561 million in the second quarter.

Lucid Group (formerly Lucid Motors) will be expanding its factory in Casa Grande, Arizona, by 2.7 million square feet, CEO Pete Rawlinson said just hours after the company officially went public with a $4.5 billion injection of capital. The company also said it has 11,000 paid reservations for its flagship luxury electric sedan, the Lucid Air.

Polestar said it plans to launch in nine more markets this year, doubling its global presence as it seeks to sell more of its electric sedans. The company, which is the electric performance vehicle brand under Volvo Car Group, also wants to double the number of retail stores to 100 locations and add more service centers by the end of the year. The Swedish automaker has more than 650 so-called “service points” in Polestar markets and wants to exceed 780 by the end of 2021.

REE Automotive has picked Austin for its U.S. headquarters. The company said the headquarters will help it address the growing U.S. market demand for mission-specific EVs from delivery and logistics companies, Mobility-as-a-Service and new technology players.

Tesla reported its second-quarter earnings and it was packed with news, including that the company generated $1.14 billion in net income, marking the first time the company’s quarterly profit (on a GAAP basis) has passed the three-comma threshold. And they hit that profitability metric without completely relying on the sale of zero-emissions credits to other automakers.

Tesla CEO Elon Musk weighed in on the company’s battery strategy and disclosed that the company is pushing the launch of its electric Semi truck program to 2022 due to supply chain challenges and the limited availability of battery cells. And everything is pointing to the Cybertruck also being delayed until next year.

And finally, Tesla’s latest quarterly earnings report showed growth in its energy storage and solar business. The company reported $801 million in revenue from its energy generation and storage business — which includes three main products: solar, its Powerwall storage device for homes and businesses, and its utility storage unit Megapack. More importantly, the cost of revenue for its solar and energy storage business was $781 million, meaning that for the first time the total cost of producing and distributing these energy storage products was lower than the revenue it generated. That’s good news.

eVTOLs and other flying things

Joby Aviation completed the longest test flight of an eVTOL to date: Its unnamed full-sized prototype aircraft concluded a trip of over 150 miles on a single charge. The test was completed at Joby’s Electric Flight Base in Big Sur, California, earlier this month. It’s the latest in a succession of secretive tests the company’s been conducting, all part of its goal to achieve certification with the Federal Aviation Administration and start commercial operations.

Lilium, the electric air taxi startup, has tapped German manufacturer Customcells to supply batteries for its flagship seven-seater Lilium Jet.

People stuff

AEye, a lidar company, has been adding to its executive team in the past few months. The most recent is the hiring of automotive veteran and former Valeo executive Bernd Reichert as senior vice president of ADAS. the company has also hired Velodyne’s former COO Rick Tewell, Bob Brown from Cepton and Hod Finkelstein as chief research and design officer from Sense Photonics.

Cruise is also on a bit of an executive and engineering hiring spree. The company sent me a list of recent folks who have joined including former Southwest Airlines employee Anthony Gregory as VP of market development, Phil Maher, the former Virgin Atlantic COO, as VP of central operations and Bhavini Soneji as VP of product engineering. Soneji was most recently VP of engineering at Headspace, and was at Microsoft and Snapchat before that.

Cruise also hired Vinoj Kumar, who oversaw Google’s cloud infrastructure and software systems, as VP of Infrastructure and Yuning Chai, former lead perception researcher at Waymo, as head of AI Research. In all, Cruise now employs more than 1,900 people.

Don Burnette, the co-founder and CEO of self-driving trucks company Kodiak Robotics, sat down with TechCrunch as part of our ongoing Q&A series with the founders of transportation startups. The interview covers a lot of ground, including Burnette’s views on the company’s strategy, current funding conditions in the industry and what he learned at Otto. the self-driving trucks startup he co-founded and that was acquired by Uber.

Trevor Milton, the fast-talking showman founder of Nikola and the electric truck startup’s former CEO and executive chairman, was charged with three counts of fraud. He is free on $100 million bail.

Milton “engaged in a fraudulent scheme to deceive retail investors” for his own personal benefit, according to the federal indictment unsealed by U.S. Attorney’s Office in Manhattan. Milton was charged with two counts of securities fraud and wire fraud by a federal grand jury.

 

E-scooter company Fenix acquires Palm for $5M, gains entry to Turkish market

By Rebecca Bellan

Abu Dhabi-based micromobility company Fenix has acquired Palm, a shared e-scooter company in Turkey, for $5 million – the exact amount the company raised last November and this past February during its seed round.

Despite having not even raised a Series A round yet, Fenix scrounged together the cash and equity needed to fund this buy and stretch into Turkey, calling on additional capital from existing investors Maniv Mobility and Emkan Capital. Fenix would not disclose the terms of the acquisition or how much it recently raised.

This acquisition marks Fenix’s expansion into its fifth Middle Eastern country and 13th city since its launch last November, making it the largest shared micromobility operator in the region, ahead of regional competitors KIWIride, Careem and Arnab Mobility.

“Palm has a meaningful presence in Istanbul, and the city will be a major focus for our company in the near term,” Jaideep Dhanoa, co-founder and CEO, told TechCrunch. “Beyond Istanbul, we see tremendous opportunity across Turkey. The country is home to 83 million people and there are 24 cities with a million or more people. Mersin, for example, is another coastal city Palm operates in today where we will continue to invest.”

Berhan Goskin and Alican İstanbullu, Palm’s founders, will continue to lead the company and Fenix’s expansion plans across Turkey. Existing Palm shareholders will also migrate over and support Fenix’s efforts to lead the market in Turkey, according to a statement from the company.

The Palm acquisition not only hands off Palm’s fleet of around 1,500 Ninebot e-scooters to Fenix, bringing the startup’s total vehicle size up to 10,000, but it also gives Fenix a built-in permit with Istanbul, a city of 15.5 million people.

“Recently the Turkey Ministry of Transport legalized shared e-scooters nationally in a very progressive and pro-competition manner,” said Dhanoa. “This regulatory clarity increased the attractiveness of the market for investment and was a significant motivator for the transaction. There are several local market requirements to qualify for a five-year license which is partially why we went in inorganically. With Palm we now have a five-year license for e-scooter sharing in Turkey and expect to receive permits in some of the highest potential  districts in the country.”

Istanbul’s first round of applications for capped e-scooter permits were due earlier this month, so the acquisition means Fenix didn’t need to apply for a new license. It will, however, have to comply with all local Turkey market requirements.

Fenix says it will begin deploying several thousands of its vehicles, laden with built-in hand sanitizers, in August, adding to Palm’s existing fleet, which will be rebranded to reflect new ownership. Fenix did not disclose who its manufacturing partner is for its vehicles, but told TechCrunch that it’s “not one of the usual suspects” and that the partnership is exclusive and involves a co-development of custom vehicles for their markets.

As part of its entry into Istanbul, Fenix also has plans to establish an R&D center on the ground for software and hardware in order to “develop breakthrough technologies for the Turkish market and to export to the Greater Middle East region,” according to a statement.

“Turkey has some of the top tech talent in the broader region, and now that we’ll also be operating there, we’re excited about leveraging that talent pool to help us craft solutions for the Turkey market, as well as apply them to the rest of our network,” IQ Sayed, co-founder and CTO, told TechCrunch. “This holds for all our offerings and all parts of our tech stack, but I’m especially looking forward to augmenting our payments tech, machine learning and IoT capabilities there.  We will also be looking into local manufacturing opportunities.”

Indian edtech Unacademy valued at $3.44 billion in $440 million fundraise

By Manish Singh

Unacademy has raised $440 million in a new financing round as the Indian online learning startup looks to expand into multiple additional categories.

Temasek led the Bangalore-based startup’s new financing round while Mirae Asset and existing investors including SoftBank Vision Fund 2, General Atlantic, Tiger Global as well as Zomato co-founder and chief executive Deepinder Goyal and Oyo founder Ritesh Agarwal participated in it, the startup said without disclosing the name of the new round (which should be Series G).

The new round values the six-year-old startup at $3.44 billion, up from $2 billion in November last year. The investment brings Unacademy’s to-date raise to about $860 million.

The online learning platform, which began its journey on YouTube and still uses Google’s video platform to on-board educators, helps students prepare for competitive exams to get into college, as well as those who are pursuing graduate-level courses.

On its app, students watch live classes from educators and later engage in sessions to review topics in more detail. The startup has over 50,000 educators on its platform, many of whom are very popular on YouTube. These educators help Unacademy sell more subscriptions and in return get a commission, according to industry executives familiar with the business arrangement.

Unacademy has amassed over 6 million monthly active users (over 600,000 of whom pay for the service) in over 10,000 cities in India.

Gaurav Munjal, Unacademy co-founder and chief executive, said the startup will deploy the fresh capital to broaden its bets on new categories such as upskilling, jobs and hiring.

Relevel is “giving people a path to get their dream job irrespective of their educational background, while Graphy is “empowering creators to build their online businesses to sell digital goods including NFTs,” he said in a tweet.

In a recent conversation with TechCrunch, Munjal said he wants Unacademy to become the “Tencent of India.”

The startup competes with scores of firms including Byju’s, which is India’s most valuable startup (at $16.5 billion valuation), GGV-backed Vedantu, Tiger Global-backed Classplus, and Lightspeed Venture-backed Teachmint.

All these startups have reported growth in the past year as India — like most other countries — enforced lockdowns and closed schools to contain the spread of the coronavirus.

At stake is India’s online education market, which is estimated to grow to be worth about $20 billion by 2030 (up from about $1 billion last year), according to Bernstein.

As of last year, there were about 6 million students in India who were paying for an online learning app, a figure Bernstein analysts expect to reach about 70 million by the end of the decade.

Spendings on education in India is among the highest globally (Source: A report from analysts at Goldman Sachs to clients last year.)

Unacademy said last week it was creating a $40 million fund for educators on its platform. “On Day One (which is today) we already have more than 300 Educators eligible for the Grant which they will get immediately. Over the next few years we will give Grants of over $40M to our Educators,” said Munjal in a tweet.

The new investment comes at a time when Indian startups are raising record capital and a handful of mature firms are beginning to explore the public markets. Business-to-business commerce and financing startup Ofbusiness said over the weekend it had raised $160 million in a new financing round (led by SoftBank Vision Fund 2) at a valuation of $1.5 billion, becoming the 18th Indian startup to attain the unicorn status, up from 11 last year.

5 lessons from Duolingo’s bellwether edtech IPO of the year

By Natasha Mascarenhas

Duolingo landed onto the public markets this week, rallying excitement and attention for the edtech sector and its founder cohort. The language learning business’ stock price soared when it began to trade, even after the unicorn raised its IPO price range, and priced above the raised interval.

Duolingo’s IPO proves that public market investors can see the long-term value in a mission-driven, technology-powered education concern; the company’s IPO carries extra weight considering the historically few edtech companies that have listed.

Duolingo’s IPO proves that public market investors can see the long-term value in a mission-driven, technology-powered education concern; the company’s IPO carries extra weight considering the historically few edtech companies that have listed.

For those that want the entire story of Duolingo, from origin to messy monetization to historical IPO, check out our EC-1. It has dozens of interviews from executives, investors, linguists and competitors.

For today, though, we have fresh additions. We sat down with Duolingo CEO Luis von Ahn earlier in the week to discuss not only his company’s IPO, but also what impact the listing may have on startups. Duolingo’s IPO can be looked at as a case study into consumer startups, mission-driven companies that monetize a small base of users, or education companies that recently hit scale. Paraphrasing from von Ahn, Duolingo doesn’t see itself as just an edtech company with fresh branding. Instead, it believes its growth comes from being an engineering-first startup.

Selling motivation, it seems, versus selling the fluency in a language is a proposition that international consumers are willing to pay for, and an idea that investors think can continue to scale to software-like margins.

1. The IPO event will bring “more sophistication” to Duolingo’s core service

Duolingo has gone through three distinct phases: Growth, in which it prioritized getting as many users as it could to its app; monetization, in which it introduced a subscription tier for survival; and now, education, in which it is focusing on tacking on more sophisticated, smarter technology to its service.

This Week in Apps: Instagram restricts teens’ accounts, Elon Musk criticizes App Store fees, Google Play’s new policies

By Sarah Perez

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year over year.

This Week in Apps will finally be a newsletter! It will launch on August 7. Sign up now! 

Top Stories

Google Play updates its policies

Did you hear the one about Google Play banning sugar daddy dating apps? Google this week updated its terms to clarify that apps where users offer sex acts in exchange for money, or “sugar dating,” as the new terms state, are no longer allowed as of September 1, 2021.

More interesting, perhaps, to the larger group of legitimate Android developers is this week’s unveiling of the UI for the upcoming Google Play safety section and the accompanying app labels. The labels will function as the Android counterpart to the app “nutrition labels” the Apple App Store recently introduced. Google is giving developers plenty of time to get used to the idea of increased transparency and disclosure, by offering a detailed timeline of when it expects developers to have their privacy label submissions ready. By April 2022, all developers will need to declare specific info and have a privacy policy.

Developers will have to disclose to users whether their app uses security practices like data encryption, whether it follows Google Play’s Families policy for apps aimed at kids, whether users have a choice in data sharing, whether the app’s safety section had been verified by a third party, and if the app allowed users to request data deletion at the time of uninstalling, among other things.

Apps that don’t disclose won’t be able to list or update until the problems are fixed.

The safety section wasn’t the only Google Play policy news to be announced this week.

Google also reminded developers that it was making a technical change to how advertising IDs work. Now, when users opt out of interest-based advertising or ads personalization, their advertising ID is removed and replaced with a string of zeros. The change, however, is a phased rollout, affecting apps running on Android 12 devices starting late 2021 and expanding to all apps running on devices that support Google Play in early 2022.

Google also said it will test a new feature that notifies developers and ad/analytics service providers of user opt-out preferences and is prohibiting linking persistent device identifiers to personal and sensitive user data or resettable device identifiers. Kids apps will also not be able to transmit an ad ID.

Another policy update includes a plan to close dormant accounts. Google says if the account is inactive or abandoned after a year, it will be closed. This will include accounts where the developer has never uploaded an app or accessed Google Play Console in a year.

Tools to build accessible experiences will also be locked down, as Google is adding new requirements on how AccessibilityService API and IsAccessibilityTool can be used.

Apple tries to fix the Safari mess

In response to feedback and complaints, Apple is clearly trying to fix some of the issues that arose from this change. It re-added a Share button to the tab bar and put additional controls under that menu. There’s also once again a reload button in the tab bar next to the domain name, though it’s a bit smaller, and a Reader Mode button will appear in the tab bar when Reader is available

On iPad, Safari also reverted back to the traditional separate row of tabs, instead of the new compact experience.

The Refresh button is now permanently showing in the iOS 15 Safari address bar #iOS15DevBeta4 pic.twitter.com/v8AoRB68QI

— Apple Software Updates (@AppleSWUpdates) July 27, 2021

Elon Musk sides with Epic Games

Elon Musk sided with Fortnite maker Epic Games in the Apple App Store antitrust lawsuit, as the Tesla CEO tweeted on Friday that Apple’s App Store fees were “a de facto global tax on the Internet.” The lawsuit alleges Apple is abusing its platform power with how it commissions apps and in-app purchases on its App Store platform — fees that add up to big numbers for a game like Fortnite, which arguably doesn’t need an App Store for discovery, marketing, payments and distribution. But there’s no other way to sell to iOS users today. On Android, apps can at least be sideloaded. It’s not currently clear why Musk has decided to take a stand on the issue, as none of his companies’ apps are dramatically impacted by Apple’s fees at present.

Weekly News

Other Platform News (Apple & Google)

Apple announced plans to end support for a number of SiriKit intents and commands, including those that could impact major apps — like ride-sharing app Uber. In total, there are over 20 SiriKit intent domains that will be deprecated and no longer supported in new and existing OS releases, Apple says.

Apple tweaked the controversial iOS 15 Safari changes in the latest betas (iOS 15 and iPadOS 15, beta 4). The new Safari design had moved the tab bar (URL bar) to the bottom of the screen — a fairly radical change for one of the iPhone’s most used apps. It was meant to make the controls easier to reach but critics said that the change made other often used features — like the reload button or Reader Mode — harder to find and use, impacting the overall usability of the browser itself.

Google this week launched version 1.0 of Jetpack Compose, Android’s new, native UI toolkit aimed at helping developers build better apps faster. The tool had been in beta since March. The new production release is built to integrate with the Jetpack libraries developers already use, and offers an implementation of Material Design components and theming. New features include Compose Preview and Deploy Preview, which require Android Studio Arctic Fox, which is also out now in a stable release.

Google also announced the availability of the CarHardwareManager API via the Android for Cars App Library as part of Jetpack.

E-commerce

Twitter launched a U.S. e-commerce pilot test that will help determine the current appetite for online shopping on its platform. The test allows brands and businesses to feature a “Shop Module” with various products for sale at the top of their Professional Profile, a business-friendly version of a profile page with support for things like an address, hours, phone number and more. Users can click on the Shop Module to go to a retail website and transact. Early testers include Game Stop and Arden Cove. The feature itself is somewhat bare bones for now, as it’s really just an image that launches an in-app browser. That’s not enough to really compete with something like Instagram Shop or Shopify’s Shop and the integrated, native checkout experience those types of app offers.

Fintech

Fintech giant Robinhood raised $2.1 billion in its IPO this week. The IPO valued the trading app at $31.8 billion, making it larger that traditional rivals like Charles Schwab, even though the offering priced at the bottom of its range. The stock dropped 8% during its first day’s trading, however. Robinhood now has 21.3 million MAUs.

PayPal during its second-quarter earnings call announced its new “super app” is now code-complete and ready to roll out. The app will feature early direct deposit, check cashing, high yield savings, budgeting tools, improved bill pay, crypto support, subscription management, buy now, pay later functionality, mobile commerce, and person-to-person messaging features. The latter hadn’t yet been announced and would allow users to chat outside of the payments process.

Code found in Apple’s Wallet app indicates that iOS 15 will require users to verify their identities by taking a selfie when they add their driver’s license or other state identification card to the iPhone.

Social

Instagram announced a series of significant changes to how it handles the accounts of younger teens. The company says it will now default users to private accounts at sign-up if they’re under the age of 16  — or under 18 in certain locales, including in the EU. It will also push existing users under 16 to switch their account to private if they have not already done so. In addition, Instagram is rolling out new technology aimed at reducing unwanted contact from adults — like those who have already been blocked or reported by other teens — and it will change how advertisers can reach its teenage audience. The changes give the company a way to argue to regulators that it’s capable of self-policing as it attempts to roll out a version of Instagram to younger users under the age of 13.

Twitter rolls out an update to its live audio platform, Twitter Spaces, that will make it easier to share the audio room with others. Users will be able to compose a tweet right from the Space that links to the room and includes any accompanying hashtags. iOS users also received new guest management controls for hosts.

Snapchat resolved an outage that was stopping people from logging in on Thursday. Unlike other app blips, which fix themselves often without users’ awareness, Snap told users to manually update their app if the issues continued.

Snapchat also this week added a “My Places” feature to Snap Map, which allows users to log their favorite spots, share them with friends and find recommendations. The feature supports over 30 million businesses and allows Snap to differentiate its map from a utility like Google Maps or Apple Maps, because it’s about personal recommendations from people you know and trust: your friends.

Instagram added support for 60-second videos to its TikTok clone, Reels. Previously, only Reels of up to 30 seconds were supported. Sixty seconds is in line with other platforms like YouTube Shorts and Snapchat’s Spotlight. But TikTok is now inching into YouTube territory, as it recently expanded to support three-minute videos.

TikTok expanded its LIVE platform with a huge lineup of new features including the ability to go live with others, host Q&As, use moderators and improved keyword filters, and more. For viewers, TikTok is adding new discovery and viewing tools, including picture-in-picture mode and ways to jump to LIVE streams from the For You and Following feeds. Some markets, including the U.S. already had access to LIVE Events, but the feature is now expanding. Meanwhile, the co-host feature currently supports going live with one other creator, but TikTok says it’s now testing multiple hosts.

Discord launched a new feature, Threads, which will make it easier to read through longer conversations on busy servers. Now, any server with “Community” features enabled will be able to transform their messages into threaded conversations across mobile and desktop. The threads will be designated by their own subject name and can be created by selecting a new hashtag symbol that appears in the menu when hovering over messages or by pressing the + sign in the chat bar.

Pinterest shares dropped by more than 12% after the company reported its second-quarter earnings on Thursday. Despite beating on estimates with revenue of $613.2 million and earnings per share of 25 cents, investors were disappointed by the miss on user growth. The company reported monthly active user growth of just 9% to reach 454 million, when analysts were expecting 482 million. Pinterest blamed COVID impacts for the slowdown. The news follows Pinterest’s launch of new tools for creators to monetize their content, with Ideas Pins — the recently launched video-first format that lets creators show off their work. Now, creators can make their pins “shoppable” and take commissions on those purchases.

Messaging

WhatsApp is testing support for higher image upload quality on iOS devices. The feature was discovered on WhatsApp’s TestFlight version for iOS but is not yet public and offers three options: auto, best quality or data saver.

Streaming & Entertainment

Spotify’s Clubhouse clone, Greenroom, is off to a slow start. The app has only been downloaded 140,000+ times on iOS and 100,000+ on Android, including installs from its earlier life as Locker Room, an app that Spotify acquired to move into live audio. Meanwhile, Spotify has 365 million monthly active users on its flagship streaming app.

Spotify also reported its Q2 earnings this week, where it posted a $23.6 million loss and failed to reach its forecast for total MAUs, despite growing MAUs 22% YOY to 365 million. It now has 165 million paying subscribers, which is up 20% YOY.

In a change to its app, Spotify added an attention-grabbing “What’s New” feed that offers personalized updates about new releases and new podcast episodes. The feature is available through a notification bell icon and uses a blue dot to indicate when there’s something new to see. Dots like this are a psychological hacks popularized by social apps like Facebook and Instagram to addict users, which could impact user engagement time on Spotify’s app.

Apple’s GarageBand app for iOS and iPadOS now lets you remix tracks from top artists and producers like Dua Lipa and Lady Gaga. There are also new Producer Packs with beats, loops and instruments created for GarageBand by top producers, including Boys Noize, Mark Lettieri, Oak Felder, Soulection, Take A Daytrip, Tom Misch and TRAKGIRL.

Google TV’s mobile app was updated with new services and personalized recommendations, following last fall’s launch of the Google TV user experience for Chromecast devices. The app now sports 16:9 widescreen movie and show posters, and added new providers Discovery+, Viki, Cartoon Network, PBS Kids, Boomerang, plus on-demand content from live TV services, including YouTube TV, Philo and fuboTV.

Gaming

Epic Games announced that Fortnite will host another in-game event it’s calling the “Rift Tour,” which kicks off Friday, August 6 and runs through Sunday, August 8. What it hasn’t yet said is what the Rift Tour is, beyond a “musical journey into magical new realities” that will feature a “record-breaking superstar.”

Health & Fitness

Facebook’s Oculus division is exploring an integration of Oculus Workouts with Apple’s Health app, according to the app’s code. An integration would allow users to store their workout data in Health.

Productivity

Usage of mobile video conferencing apps like Zoom grew by 150% in the first half of 2021, according to a report from Sensor Tower. Zoom, Microsoft Teams and Google Meet saw a surge in usage, collectively climbing to nearly 21x higher than in H1 2019, the firm found.

Google Voice’s app was updated with a few refinements, including a way to see the reason for a missed call or dropped call, and an easy way to redial. iOS users can now show their Google Voice number as their caller ID when they get a calling through a forwarding number. Another change will allow users to delete multiple SMS messages at once.

Edtech

Language learning app Duolingo raised $521 million in its U.S. IPO, priced above the marketed range. The company priced 5.1 million shared at $102, after first marketing them at $95 to $100.

Utilities

Amazon this week rolled out an update to its Alexa iOS app that allows users to add an Alexa widget to their iOS homescreen. The widget lets you tap on a button to speak to the virtual assistant and issue commands. Watch out Siri! (Ha, just kidding.)

Google Maps also updated its iOS app this week to add support for a homescreen widget. There are two different widgets sizes to choose from — one that gives info like weather and traffic, while another is more of a shortcut to nearby places like gas stations, restaurants, work and home.

Google is working on a”Switch to Android” app for iOS users that will copy over data and apps from an iPhone to bring them to a new Android device. Apple already offers a similar app, called “Move to iOS” for Android users.

Transportation

Parking app usage has popped to pre-pandemic levels, Apptopia reported. Apps in this space help users find availability in lots and garages nearby and facilitate payments. Browsing time in apps was up 57% YOY in July, and overall parking app usage is now 6.2% above Jan. 2020 pre-pandemic levels.

Moovit integrated Lime’s electric scooters, bikes and mopeds into its transit-planning app that’s live in 117 cities across 20 countries and continents, including the United States, South America, Australia and Europe.

Government & Policy

Tencent’s WeChat suspended new user registrations in China to comply with “relevant laws and regulations.” The move comes amid a broad crackdown on tech companies by Chinese regulators, related to data collection and other harmful practices.

Recently, China ordered Tencent and 13 other developers to fix problems related to pop-ups inside their apps, as part of the tech crackdown. The regulator also said it would tighten controls on misleading and explicit content used for marketing, and issued fines for offensive content to Tencent, Kuaishou and Alibaba.

Security & Privacy

Apple released patches for iOS, iPadOS and macOS to address a zero-day vulnerability that had been exploited in the wild. Apple said the exploit could exploit the vulnerability known as CVE-2021-30807 to execute arbitrary code with kernel privileges on a vulnerable and unpatched device.

Google Play Protect failed an Android security test, according to a report from Bleeping Computer. The mobile threat protection solution ranked last out of 15 Android security apps tested over a span of six months, between January to June 2021.

Funding and M&A

💰 Product insights and analytics startup Pendo raised $150 million at a $2.6 billion valuation, ahead of its expected IPO. The round was led by B Capital, the firm from Facebook co-founder Eduardo Saverin, and included new investor Silver Lake Waterman, alongside existing backers. Pendo’s platform helps companies gather data on how customers use their apps, including clients like Okta, Toast and others.

🤝 Twitter “acqui-hired” the team from subscription news app, Brief, who will now join Twitter’s Experience.org group, which works on Twitter Spaces and Explore. Brief had offered a non-biased news app that allowed you to get both sides of a story and all the necessary facts. Deal terms weren’t disclosed.

💰 Delivery app Gopuff confirmed its $1 billion fundraise at a $15 billion valuation, aimed at expanding its instant delivery service. TechCrunch previously reported the news when the Series H was still being closed.

💰 Indian travel app Ixigo raised $53 million (Rs 395 crore), prepping the business for a valuation of $750 million-$800 million for its upcoming IPO. The round was led by Singapore sovereign wealth fund GIC.

💰Mobile-first digital wallet Valora native to the Celo network raised $20 million in Series A funding led by Andreessen Horowitz (a16z), a Celo backer, to become a global gateway to crypto.

💰 Crypto wallet company Eco, backed by a16z, raised $60 million in new funding led by Activant Capital and L Catterton. Eco offers a digital wallet with rewards and no fees, and has average deposits of around $6,000.

💰 Search API startup Algolia, which lets developers integrate real-time search in apps or websites, raised $150 million in Series D funding, valuing the business at $2.25 billion, post-money. The round was led by Lone Pine Capital. Algolia now has over 10,000 customers, including Slack, Stripe, Medium, Zendesk and Lacoste.

💰 Brain Technologies raised $50+ million for Natural, a natural language search engine and super app for iOS, which wants users to stop switching between apps to order food, groceries or go shopping. Backers include Laurene Powell Jobs’ Emerson Collective, Goodwater Capital, Scott Cook and WTT Investment.

💰 Messaging app Element, built on the decentralized Matrix protocol, raised $30 million in a Series B round of funding. Investors include open-source R&D lab Protocol Labs and Metaplanet. a fund from Skype co-founder Jaan Tallinn, as well as past investors Automattic and Notion.

💰 Indonesia-based grocery app HappyFresh raised $65 million in Series D funding in a round led by Naver Financial Corporation and Gafina B.V. The app offers an Instacart-like grocery delivery service for parts of Asia, which today operates in Indonesia, Malaysia and Thailand.

💰 Indian D2C beauty brand MyGlamm, which sells products through an app and website, raised $71.3 million in Series C financing, from Amazon, Ascent Capital and Wipro.

Downloads

Nanogram

Image Credits: Nanogram

Developer Kosta Eleftheriou may have taken on Apple in legal battles and on Twitter, as he points out the numerous app scams on the App Store, but that hasn’t stopped him from building new apps.

This week, Eleftheriou introduced Nanogram, a Telegram client app that works on the Apple Watch without needing an iPhone connection. Eleftheriou said he was inspired to build Nanogram because he wanted a Telegram app for his LTE Apple Watch and didn’t like the official version that didn’t provide “basic and reliable messaging functionality.” So he built his own app from scratch using the Telegram SDK, which allows you to send, receive and view all your messages and notifications right from your wrist — even if you don’t have your phone nearby. The app also supports Eleftheriou’s FlickType Swipe Keyboard for faster replies while on the go.

Eleftheriou notes the app doesn’t collect any personal information and requires an Apple Watch Series 3 or later, running watchOS 7 or later.

Lightricks’ Videoleap for Android

Image Credits: Lightricks

After seeing a 70% yearly increase for its iOS version, Lightricks brought its Videoleap app to the Google Play Store. The app has grown popular with online creators for offering professional quality editing tools on mobile, including those that let you apply artistic effects, mix videos with images, add text and layer transformations and more. The company says Videoleap users are now creating 35 million pieces of content per month, and 47% of users are exporting their creations to TikTok in pursuit of monetizing their content further. The app, like others from Lightricks (which also makes FaceTune and others), monetizes by way of in-app subscriptions.

Tweets

Apple app store fees are a de facto global tax on the Internet. Epic is right.

— Elon Musk (@elonmusk) July 30, 2021

There’s a total of *six* different touch targets in the iOS 15 beta 4 tab bar in Safari.

These exclude the ability to long-press the tab bar, swipe across it to change tabs, and swipe it up to open the Tabs view.

I’m…starting to think a single, small toolbar just won’t do. 😬pic.twitter.com/EiD2mekVRL

— Federico Viticci (@viticci) July 27, 2021

Shortcuts has a new “Return to Home Screen” action in iOS 15 developer beta 4 – this has been long requested from the community and is great to see! pic.twitter.com/8E3ZB7FIYX

— Matthew Cassinelli (@mattcassinelli) July 27, 2021

I've been fascinated to watch the reaction to Safari in iOS 15 because in 2016-2017, I worked on a similar redesign for mobile Chrome that we never launched. Finally decided to tell a bit of that story here: https://t.co/gF4hepQM5V

— Chris Lee (@cleerview) July 25, 2021

something fun & playful our team has been working on. what are *creative* ways we can utilize voice for more engaging convos on Spaces? how would you use these tools?

let’s have fun & learn together🧏🏽‍♂️@RichardPlom @reedm @audgeyaudgey @callmeparri @niw pic.twitter.com/4ZBahxwkDN

— Danny Singh (@Mr_DannySingh) July 22, 2021

Bring your own environment: The future of work

By Ram Iyer
Michael Biltz Contributor
Michael Biltz is managing director of Accenture Technology Vision, where he leads the enterprise's annual visioning process to focus on how technology will impact the way we work and live.

The world has just witnessed one of the fastest work transformations in history. COVID-19 saw businesses send people home en masse, leaning on technology to maintain business as usual. Working from home, once the exception rather than the rule, became responsible for two-thirds of economic activity as an estimated 1.1 billion people around the world were forced to perform their daily jobs remotely, up from 350 million in 2019.

As we explain in the 2021 Accenture Technology Vision report, this transformation is just the beginning. Looking ahead, where and how people work will be much more flexible concepts with the potential to bring benefits to employees and employers alike. In fact, 87% of executives Accenture surveyed believe that the remote workforce opens up the market for difficult-to-find talent.

These benefits will only be fully realized if enterprises adopt a strategic approach to the future of work. Think back to a few years ago, when the bring your own device (BYOD) trend was in vogue. Faced with demand from workers to use their own devices in the enterprise setting, businesses had to think through new policies and controls to support this model.

Employers must now do the same thing, but on a much bigger scale. BYOD has become “BYOE”: Employees are bringing their entire environments to work. These environments include a broader range of worker-owned tech (smart speakers, home networks, gaming consoles, security cameras and more) and their work setting. One person may have a home office set up in a shed in their garden, another may be working from the kitchen table, surrounded by their family.

Businesses need to accept that their employees’ environments are a permanent part of their enterprise and adjust them accordingly.

The workplace reimagined

Looking ahead, the BYOE-style of work won’t be limited to employees’ homes. People will be free to work from anywhere, and they will want to work in the environment that’s best for them — whether that’s the office, home or a hybrid mix of the two. This is something leaders must accommodate rather than fight.

Indeed, leaders can rethink the purpose of working at the warehouses, depots, factories, offices, labs and other locations that make up their businesses. They should consider carefully when it makes sense for people to be at certain sites and with certain people. They will thereby be able to optimize their operations.

A few years from now, the organizations that succeed will be the ones that resisted the urge to race everyone back to the office and instead rethought how their workforce operates. They will have put in place a robust strategy for change that includes the adoption of technology enablers like the cloud, AI, IoT and XR. But more importantly, this will outline how their reimagined workforce model can support and enable their people and how this can be reflected in the corporate culture.

Enabling the new

The first step toward this future requires gaining visibility into the employee experience. With BYOE, the employee experience has never been more important, but it has also never been harder to monitor. Workplace analytics will therefore be critical to understanding how employees’ environments are impacting their work and finding insights that can improve their experience and productivity.

Security is another primary enabler. Businesses need to accept that their employees’ environments are a permanent part of their enterprise and adjust them accordingly. IT security teams will have to do more than ensure that a worker’s laptop is secured with the latest firewall patches, and consider the worker’s network security and the security of all devices linked to that network, such as baby monitors and smart TVs.

Once the technology, analytics and security foundations are in place, businesses will be better positioned to unlock the full value of BYOE: operating model transformation. When companies go virtual-first, they have new opportunities to integrate emerging technologies into the workforce. With a virtual-first BYOE strategy, for example, businesses can have a warehouse full of robots doing the physical work, coupled with offsite employees safely monitoring and overseeing strategy.

Cultural change is key

Success in BYOE will also come down to culture. The enterprise must accept that the employee environment is now part of the “workplace” and accommodate people’s needs. This will be a large, slow-to-emerge cultural shift, but there will be quick wins, too.

Take the disconnect between in-person and remote workers as an example. So much is currently tied to geography, but the future will be all about balance. Workers in different roles will benefit from the work environment best suited to their needs. However, without careful implementation, the approach could lead to a divided workforce, where in-office and remote workers struggle to collaborate. Quora is already looking to overcome this challenge by requiring all employees who are attending meetings, regardless of whether they’re home or in the office, to appear on their own video screen.

Reimagining the organization for BYOE is a moving target and best practices are still emerging. But one thing is already clear: You can’t afford to wait. To attract the best talent and keep employees engaged, start planning now.

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