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Massachussetts AG greenlights Uber, Lyft-backed gig worker ballot initiative

By Rebecca Bellan

Massachusetts Attorney General Maura Healey gave a coalition of app-based service providers like Uber and Lyft the go-ahead to start collecting signatures needed to put a proposed ballot measure before voters that would define drivers as independent contractors rather than employees.

Backers of the initiative, which is essentially a MA version of Proposition 22, would need to gather tens of thousands of signatures for the measure to make it to the November 2022 ballot. Despite the fact that last year Healey filed a lawsuit that challenged Uber and Lyft’s classifications of drivers as contractors who are therefore not entitled to benefits like sick leave, overtime or minimum wage, on Wednesday, the AG certified the current measure met constitutional requirements.

The news comes nearly two weeks after a superior court judged ruled California’s Prop 22, which was passed in 2020, unconstitutional. The union-backed Coalition to Protect Workers’ Rights urged Healey to reject the measure under the same grounds, and told Reuters that it is considering suing to challenge the measure.

The Massachusetts Coalition for Independent Work, the coalition of members including Uber, Lyft, DoorDash and Instacart, filed the petition for this ballot initiative last month, a move that Uber CEO Dara Khosrowshahi said he thinks is “the right move.” The proposed initiative would also allow drivers to earn a minimum of $18 per hour in 2023 before tips and provide those who work for at least 15 hours per week with healthcare stipends. Drivers would also be guaranteed at least 26 cents per mile to cover vehicle upkeep and gas.

The coalition has until December 1 to collect and file 80,239 signatures from voters. If they miss that deadline, they can gather an additional 13,374 signatures by July 6, 2022 to get the initiative on the ballot.

Insurify, a ‘virtual insurance agent,’ raises $100M Series B

By Mary Ann Azevedo

How many of us have not switched insurance carriers because we don’t want to deal with the hassle of comparison shopping?

A lot, I’d bet.

Today, Insurify, a startup that wants to help people make it easier to get better rates on home, auto and life insurance, announced that it has closed $100 million in an “oversubscribed” Series B funding round led by Motive Partners.

Existing backers Viola FinTech, MassMutual Ventures, Nationwide, Hearst Ventures and Moneta VC also put money in the round, as well as new investors Viola Growth and Fort Ross Ventures. With the new financing, Cambridge, Massachusetts-based Insurify has now raised a total of $128 million since its 2013 inception. The company declined to disclose the valuation at which the money was raised.

Since we last covered Insurify, the startup has seen some impressive growth. For example, it has seen its new and recurring revenue increase by “6x” since it closed its Series A funding in the 2019 fourth quarter. Over the last three years, Insurify has achieved a CAGR (compound annual growth rate) of 151%, according to co-founder and CEO Snejina Zacharia. It has also seen consistent “2.5x” year-over-year revenue growth, she said.

Insurify has built a machine learning-based virtual insurance agent that integrates with more than 100 carriers to digitize — and personalize — the insurance shopping experience. There are others in the insurtech space, but none that we know of currently tackling home, auto and life insurance. For example, Jerry, which has raised capital twice this year, is focused mostly on auto insurance, although it does have a home product. The Zebra, which became a unicorn this year, started out as a site for people looking for auto insurance via its real-time quote comparison tool. Over time, it has also evolved to offer homeowners insurance with the goal of eventually branching out into renters and life insurance. But it too is mostly focused on auto.

Zacharia said that since Insurify’s Series A funding, it has expanded its home insurance marketplace, deepened its carrier integrations to provide users an “instant” purchase experience and launched its first two embedded insurance products through partnerships with Toyota Insurance Management Solutions and Nationwide (the latter of which also participated in the Series B funding round).

Image Credits: Insurify

Last year, when ShyScanner had to lay off staff, Insurify scooped up much of its engineering team and established an office in Sofia, Bulgaria.

Zacharia, a former Gartner executive, was inspired to start the company after she was involved in a minor car accident while getting her MBA at MIT. The accident led to a spike in her insurance premium and Zacharia was frustrated by the “complex and cumbersome” experience of car insurance shopping. She teamed up with CTO Tod Kiryazov to build Insurify, which the pair describe as a virtual insurance agent that offers real-time quotes.

“We decided to build the most trusted virtual insurance agent in the industry that allows for customers to easily search, compare and buy fully digitally — directly from their mobile phone, or desktop, and really get a very smart, personalized experience based on their unique preferences,” Zacharia told TechCrunch. “We leverage artificial intelligence to be able to make recommendations on both coverage as well as carrier selection.”

Notably, Insurify is also a fully licensed agent that takes over the fulfillment and servicing of the policies. Since the company is mostly working as an insurance agent, it gets paid new and renewed commission. So while it’s not a SaaS business, its embedded insurance offerings have SaaS-like monetization.

“Our goal is to provide an experience for the end consumer that allows them to service and manage all of their policies in one place, digitally,” Zacharia said. “We think that the data recommendations that the platform provides can really remove most of the friction that currently exists in the shopping experience.”

Insurify plans to use its fresh capital to continue to expand its operations and accelerate its growth plans. It also, naturally, wants to add to its 125-person team.

“We want to build into our API integrations so customers can receive real-time direct quotes with better personalization and a more tailored experience,” Kiryazov said. “We also want to identify more embedded insurance opportunities and expand the product functionality.”

The company also down the line wants to expand into other verticals such as pet insurance, for example.

Insurify intends to use the money in part to build brand awareness, potentially through TV advertising.

“Almost half of our revenue comes from self-directed traffic,” Zacharia said. “So we want to explore more inorganic growth.”

James “Jim” O’Neill, founding partner at Motive Partners and partner Andy Rear point out that online purchasing now accounts for almost all of the growth in U.S. auto insurance. 

“The lesson from other markets which have been through this transition is that customers prefer choice, presented as a simple menu of products and prices from different insurers, and a straightforward online purchasing process,” they wrote via email. “The U.S. auto market is huge: even a slow transition to online means a massive opportunity for Insurify.”

In conducting their due diligence, the pair said they were impressed with how the startup is building a business model “that works for customers, insurers and white-label partners.”

Harel Beit-On, founder and general partner at Viola Growth, believes that the quantum leap in e-commerce due to COVID-19 will completely transform the buying experience in almost every sector, including insurance.

“It is time to bring the frictionless purchasing experience that customers expect to the insurance space as well,” she said. “Following our fintech fund’s recent investment in the company, we watched Insurify’s immense growth, excellent execution with customer acquisition and building a brand consumers trust.”

A popular smart home security system can be remotely disarmed, researchers say

By Zack Whittaker

A cybersecurity company says a popular smart home security system has a pair of vulnerabilities that can be exploited to disarm the system altogether.

Rapid7 found the vulnerabilities in the Fortress S03, a home security system that relies on Wi-Fi to connect cameras, motion sensors and sirens to the internet, allowing owners to remotely monitor their home anywhere with a mobile app. The security system also uses a radio-controlled key fob to let homeowners arm or disarm their house from outside their front door.

But the cybersecurity company said the vulnerabilities include an unauthenticated API and an unencrypted radio signal that can be easily intercepted.

Rapid7 revealed details of the two vulnerabilities on Tuesday after not hearing from Fortress in three months, the standard window of time that security researchers give companies to fix bugs before details are made public. Rapid7 said its only acknowledgment of its email was when Fortress closed its support ticket a week later without commenting.

Fortress owner Michael Hofeditz opened but did not respond to several emails sent by TechCrunch with an email open tracker. An email from Bottone Reiling, a Massachusetts law firm representing Fortress, called the claims “false, purposely misleading and defamatory,” but did not provide specifics that it claims are false, or if Fortress has mitigated the vulnerabilities.

Rapid7 said that Fortress’ unauthenticated API can be remotely queried over the internet without the server checking if the request is legitimate. The researchers said by knowing a homeowner’s email address, the server would return the device’s unique IMEI, which in turn could be used to remotely disarm the system.

The other flaw takes advantage of the unencrypted radio signals sent between the security system and the homeowner’s key fob. That allowed Rapid7 to capture and replay the signals for “arm” and “disarm” because the radio waves weren’t scrambled properly.

Arvind Vishwakarma from Rapid7 said homeowners could add a plus-tagged email address with a long, unique string of letters and numbers in place of a password as a stand-in for a password. But there was little for homeowners to do for the radio signal bug until Fortress addresses it.

Fortress has not said if it has fixed or plans to fix the vulnerabilities. It’s not clear if Fortress is able to fix the vulnerabilities without replacing the hardware. It’s not known if Fortress builds the device itself or buys the hardware from another manufacturer.

Read more:

Google faces a major multi-state antitrust lawsuit over Google Play fees

By Taylor Hatmaker

A group of 37 attorneys general filed a second major multi-state antitrust lawsuit against Google Wednesday, accusing the company of abusing its market power to stifle competitors and forcing consumers into in-app payments that grant the company a hefty cut.

New York Attorney General Letitia James is co-leading the suit alongside the Tennessee, North Carolina and Utah attorneys general. The bipartisan coalition represents 36 U.S. states, including California, Florida, Massachusetts, New Jersey, New Hampshire, Colorado and Washington, as well as the District of Columbia.

“Through its illegal conduct, the company has ensured that hundreds of millions of Android users turn to Google, and only Google, for the millions of applications they may choose to download to their phones and tablets,” James said in a press release. “Worse yet, Google is squeezing the lifeblood out of millions of small businesses that are only seeking to compete.”

In December, 35 states filed a separate antitrust suit against Google, alleging that the company engaged in illegal behavior to maintain a monopoly on the search business. The Justice Department filed its own antitrust case focused on search last October.

In the new lawsuit, embedded below, the bipartisan coalition of states allege that Google uses “misleading” security warnings to keep consumers and developers within its walled app garden, the Google Play store. But the fees that Google collects from Android app developers are likely the meat of the case.

“Not only has Google acted unlawfully to block potential rivals from competing with its Google Play Store, it has profited by improperly locking app developers and consumers into its own payment processing system and then charging high fees,” District of Columbia Attorney General Karl Racine said.

Like Apple, Google herds all app payment processing into its own service, Google Play Billing, and reaps the rewards: a 30 percent cut of all payments. Much of the criticism here is a case that could — and likely will — be made against Apple, which exerts even more control over its own app ecosystem. Google doesn’t have an iMessage equivalent exclusive app that keeps users locked in in quite the same way.

While the lawsuit discusses Google’s “monopoly power” in the app marketplace, the elephant in the room is Apple — Google’s thriving direct competitor in the mobile software space. The lawsuit argues that consumers face pressure to stay locked into the Android ecosystem, but on the Android side at least, much of that is ultimately familiarity and sunk costs. The argument on the Apple side of the equation here is likely much stronger.

The din over tech giants squeezing app developers with high mobile payment fees is just getting louder. The new multi-state lawsuit is the latest beat, but the topic has been white hot since Epic took Apple to court over its desire to bypass Apple’s fees by accepting mobile payments outside the App Store. When Epic set up a workaround, Apple kicked it out of the App Store and Epic Games v. Apple was born.

The Justice Department is reportedly already interested in Apple’s own app store practices, along with many state AGs who could launch a separate suit against the company at any time.

Croatia’s Gideon Brothers raises $31M for its 3D vision-enabled autonomous warehouse robots

By Mike Butcher

Proving that Central and Eastern Europe remains a powerhouse of hardware engineering matched with software, Gideon Brothers (GB), a Zagreb, Croatia-based robotics and AI startup, has raised a $31 million Series A round led by Koch Disruptive Technologies (KDT), the venture and growth arm of Koch Industries Inc., with participation from DB Schenker, Prologis Ventures and Rite-Hite.

The round also includes participation from several of Gideon Brothers’ existing backers: Taavet Hinrikus (co-founder of TransferWise), Pentland Ventures, Peaksjah, HCVC (Hardware Club), Ivan Topčić, Nenad Bakić and Luca Ascani.

The investment will be used to accelerate the development and commercialization of GB’s AI and 3D vision-based “autonomous mobile robots” or “AMRs”. These perform simple tasks such as transporting, picking up and dropping off products in order to free up humans to perform more valuable tasks.

The company will also expand its operations in the EU and U.S. by opening offices in Munich, Germany and Boston, Massachusetts, respectively.

Gideon Brothers founders

Gideon Brothers founders. Image Credits: Gideon Brothers

Gideon Brothers make robots and the accompanying software platform that specializes in horizontal and vertical handling processes for logistics, warehousing, manufacturing and retail businesses. For obvious reasons, the need to roboticize supply chains has exploded during the pandemic.

Matija Kopić, CEO of Gideon Brothers, said: “The pandemic has greatly accelerated the adoption of smart automation, and we are ready to meet the unprecedented market demand. The best way to do it is by marrying our proprietary solutions with the largest, most demanding customers out there. Our strategic partners have real challenges that our robots are already solving, and, with us, they’re seizing the incredible opportunity right now to effect robotic-powered change to some of the world’s most innovative organizations.”

He added: “Partnering with these forward-thinking industry leaders will help us expand our global footprint, but we will always stay true to our Croatian roots. That is our superpower. The Croatian startup scene is growing exponentially and we want to unlock further opportunities for our country to become a robotics & AI powerhouse.”

Annant Patel, director at Koch Disruptive Technologies, said: “With more than 300 Koch operations and production units globally, KDT recognizes the unique capabilities of and potential for Gideon Brothers’ technology to substantially transform how businesses can approach warehouse and manufacturing processes through cutting edge AI and 3D AMR technology.”

Xavier Garijo, member of the Board of Management for Contract Logistics, DB Schenker, added: “Our partnership with Gideon Brothers secures our access to best in class robotics and intelligent material handling solutions to serve our customers in the most efficient way.”

GB’s competitors include Seegrid, Teradyne (MiR), Vecna Robotics, Fetch Robotics, AutoGuide Mobile Robots, Geek+ and Otto Motors.

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