“You know we don’t drive down that road,” my father said.
I had asked him why we never took the shortest path to the beach. Just eight years old, I was fascinated by maps and was questioning my father’s choice. Years later I would learn the route I suggested was mired with armed groups of all stripes whose interests didn’t align with mine or that of other Colombian families.
You may be familiar with the conflicts that plagued Colombia for decades, but you might not be aware of the progress institutions, advocacy groups and its government have made with regard to building a future where citizens have options and mobility that’s not constrained by armed conflict.
In fact, Colombia has at times improved its “ease of doing business” ranking as measured by the World Bank. The country, its institutions and its leaders have a longer way to go when it comes to ensuring that opportunity reaches all corners of the country, particularly at a time that COVID-19 magnifies the inequities that persist. But one thing is for sure, the path to prosperity would look a lot better if Colombia further embraced innovation.
I have dedicated the last decade to Colombia’s path to prosperity. I have done so by studying at Colombia’s most prestigious Universidad de Los Andes, raising more than $10 million in venture capital and building two companies that generate direct and indirect earnings for more than 70,000 Colombians. I have directly retained hundreds of computer engineers by showing young Colombians that it’s possible to earn a good living without emigrating for professional opportunities. Heck, I’ve even convinced a few past emigrants to return to Colombia and work for me at Picap.
My contribution to Colombia’s prosperity and the contribution of thousands of talented engineers that build technology in Colombia is at risk. It’s at risk because the Colombian authorities and the legislative branch have been slow to update transportation and technology regulation designed for an era when regulation could last decades because the pace of societal innovation was measured in, well, decades.
In Colombia, we need to update regulations governing technology and transportation. The ever present threats that Colombian authorities and regulators have imposed on Uber and Picap are not only futile attempts to put the technology genie back into the bottle, but also delay the critical conversations that would build long-term partnership for mutual success.
It’s urgent that Colombia and countries around the globe construct regulatory frameworks that simultaneously advance the public good and technology innovation. We, in fact, have evidence of the kinds of benefits that can expand when new mobility models and technologies are embraced. Take GoJek or Grab which started, like Picap, as two-wheel ride-hailing platforms. Each is now worth billions and facilitates commerce, financial services and more, all for the benefit of societies which then produce more consumer surplus, formalize economic activity and stimulate new forms of innovation. Picap, and others, can do this in Colombia and more places across Latin America with regulatory advancements.
There are congressional leaders in Colombia who have made considerable efforts to advance their understanding of technology platforms, but their efforts, however laudable, have not advanced. Now, more than ever, Colombia’s leaders must, for example, recognize that private transport services need regulation that works for the citizens that power new mobility options. Every country in the globe faces a reckoning based on how easily COVID-19 weakened state-supported and independent systems of health, mobility and economic activity. Technology will be an inevitable component of strengthening health, mobility and economic activity in every country. We’ve already seen that delivery platforms, including Pibox by Picap, increasingly play a role in helping countries preserve social distancing. And yet there’s an opportunity for states to differentiate and think about not just defensive strategies during the pandemic, but also how to remake themselves for the future.
Colombia can learn from the example of South Korea, which for years positioned itself to fulfill the world’s future demands for the types of silicon chips that subsequently made LG and Samsung household names. South Korea did this not by impeding technological advancement, but by facilitating the development of know-how, investing in education and partnering with technology. As technologists, there’s nothing that would make us prouder than helping Colombia develop the kinds of economic activity that will strengthen the country in the long-term. I’ve seen the future, I practice it daily, and I know that Latin America, and Colombia in particular, need to invest in retaining tech talent and advancing regulatory frameworks that attract technology investment, or our economies will struggle even further in the coming years of potential recovery from COVID-19.
Recently, the Alianza IN, a mobility platform trade group, launched in Colombia with the goal of advancing conversations with Colombian lawmakers and regulators on the principles that the Colombian MinTIC (Ministry of Information Technologies and Communications) could incorporate to help attract more investment, retain talent and proactively prepare for a future in which mobility and technology platforms are critical partners of the country’s economic future. Technology platforms are already a part of the present, and the Alianza IN’s actions are a great step on the path toward ensuring that updated regulatory frameworks serve the millions of Colombian citizens who depend on mobility and technology platforms for income, mobility and improved quality of life.
Last year, Colombian technology companies received more than $1.2 billion of investment capital. I am impressed with the new headlines my generation and Colombian colleagues across technology have achieved in only 20 years. But I can assure you that Colombia’s headlines in the 21st century will be stunted if Colombian politicians and authorities do not address the underlying need to improve regulation that embraces technology and new mobility, including Picap. We have room to grow and show the world how our tenacity and resilience will help address not just Colombian or Latin American challenges, but global challenges.
I look forward to soon meeting the young Colombian woman who in 20 or even three years will have developed a renewable energy or disease-prevention innovation that serves billions of people. We have to remove roadblocks. We’ve begun doing so across Colombia on some fronts; we need to continue to do so on the technology front. I, alongside, my generation, will continue to attract the capital, retain the talent and further develop the competitive advantages that will position Colombia to lead in the 21st century.
I hope that the Colombian government, regulators and the Duque administration does this, as well.
In Indonesia, there are about 60 million “micro-merchants,” typically small store owners who sell food and other staple items, and have close relationships with their customers. Many often extend informal lines of credit to shoppers, but much of their financial tracking is still done with pen and paper ledgers. Chinmay Chauhan and Abhinay Peddisetty, the co-founders of BukuWarung, want to digitize the process with a financial platform designed especially for small Indonesian businesses. Their goal is to start with bookkeeping tools, before expanding into services including access to working capital.
The startup is currently taking part in Y Combinator’s startup accelerator program. BukuWarung has also raised seed funding from East Ventures, AC Ventures, Golden Gate Ventures, Tanglin Ventures, Samporna, as well as strategic angel investors from Grab, Gojek, Flipkart, PayPal, Xendit, Rapyd, Alterra, ZEN Rooms and other companies.
Chauhan and Peddisetty met while working together at Singapore-based peer-to-peer marketplace Carousell, where they focused on developing monetization products for sellers. Chauhan also worked on products for merchants at Grab, the largest ride-sharing and on-demand delivery company in Southeast Asia. But the inspiration behind BukuWarung is also personal, because both Chauhan and Peddisetty’s families run small neighborhood stores.
“We can look at this more deeply given the experience we have monetizing merchants at Grab and Carousell,” Chauhan said. “We also know good potential exists in Indonesia, where we can help 60 million micro-merchants come online and digitize. From a macro-level, we felt this would be a huge opportunity, and there is also the personal element of being potentially being able to impact millions of merchants.”
Paper records not only make tracking finances a labor-intensive process, but also means it is harder for merchants to gain access to lines of credit. Chauhan and Peddisetty told TechCrunch that their goal is to expand the company to financial services as well, doing for Indonesian merchants what KhataBook and OKCredit have done in India. Since launching last year, BukuWarung has signed up 600,000 merchants across 750 cities and towns in Indonesia and currently has about 200,000 monthly average users. The founders say their goal is to reach all 60 million micro-, small- and medium-sized businesses in Indonesia. It has already made its first acquisition: Lunasbos, one of the first Indonesian credit tracking apps.
While preparing to launch BukuWarung, the founders traveled through Indonesia, speaking to almost 400 merchants about their challenges with bookkeeping, credit tracing and accounting. Based on those conversations, the two decided to start by focusing on a bookkeeping app, which launched 10 months ago.
Despite a partial lockdown in Indonesia from April to June, BukuWarung continued to grow because most of its users sell daily necessities, like groceries. In smaller cities and villages, merchants often offer credit lines because their customers’ cash flow is very tight, and many do not have a regular monthly paycheck, Chauhan said. “Everyone is buying and selling on credit, that is something we validated in our research.”
Then there is the community aspect, where many merchants are close to their customers.
“This changes depending on the location of the business, but business owners have often known a lot of people in their neighborhoods for a long time, and when it comes to credit, they typically offer 500 Indonesian rupiah all the way up to about one million rupiah [about USD $70.56],” Chauhan said. But when it’s time to settle bills, which often means going to customers’ homes and asking for payment, many merchants feel hesitant, he added.
“They will never chase or call the person. The app we built sends automatic reminders to customers, and this ‘soft message’ really helps merchants not feel shy while at the same time professionally giving customer reminders.”
While talking to merchants, BukuWarung’s founders also realized that many were using pay-as-you-go data plans and lower-end smartphones. Therefore, their app needed to be as lightweight as possible, and work offline so users could access and update their records anytime. This focus on making their app take up as little data and space as possible differentiates them from other bookkeeping apps, the founders said, and helps them sign up and retain users in Indonesia.
Chauhan and Peddisetty said the company will partner with financial tech companies as it grows to give users access to online payment systems, including digital wallets, and financing.
In a statement to TechCrunch, Y Combinator partner Gustaf Alströmer said, “Building digital infrastructure for emerging economies is a huge opportunity, especially in the post-COVID world. And we believe BukuWarung is a team that can take on this challenge. We have seen this journey before with Khatabook and OkCredit in India and see that BukuWarung is on a similar growth trajectory to empower micro-businesses in Indonesia.”
BMW today announced a number of updates to its in-car software experience during a VR press event, complete with a virtual drive through Munich to show off some of these features. These new updates will come to most recent BMWs that support the company’s Operating System 7 later this year — and new cars will already have them built-in.
The automaker is now able to not only update the car’s infotainment system but virtually every line of code that’s deployed to the various compute systems that make up a modern vehicle. And because of this, the company is now also able to bring a couple of features to market that it has long talked about.
Perhaps most notable is the update to the program that allows you to subscribe to specific hardware features that may already be built into your car but that you didn’t activate when you bought the car — like heated seats or advanced driver assistance systems.
BMW has talked about this for a while, but it is now making this a reality. That means if you didn’t buy the heated steering wheel and seats, for example, your new BMW may now offer you a free three-month trial and you can then essentially buy a subscription for this feature for a set amount of time.
“We offer maximum flexibility and peace of mind to our customers when it comes to choosing and using their optional equipment in their BMWs, whether this BMW is new or used,” a company spokesperson said during today’s press event. “So flexible offers, immediate availability, simpler booking and easy usability for choice, at any time, when it comes to your optional equipment. We already started connectivity over 20 years ago and since 2014, we are online with our Connected Drive Store, where digital services can already be booked.”
Those were very much infotainment features, though. Now, BMW will let you enable vehicle functions and optional equipment on demand and over the air. The company started offering some features like active cruise control with stop and go functionality, a high beam assistant and access to the BMW IconicSounds Sport. The carmaker will add new features to this line-up over time.
Surprisingly, it’s often easier and cheaper for car manufacturers to build some hardware into cars, even if it is not activated, simply because it removes complexity from the production process. A lot of the features that BMW is talking about consist of a combination of software and hardware, though.
What’s new here is the ability to only subscribe to some features for a short time.
“In the near future, we will not only be able to add more functions here, but we will also be able to add even more flexibility for our customers with temporary bookings so booking of options for three years, for one year, or even shorter periods of time, like a few months,” a spokesperson said.
The company also notes that this will give somebody who buys a used car a lot more flexibility, too. It’s worth noting that Apple CarPlay support was also originally a subscription feature in new BMWs, costing $80 a year. That really felt like nickel-and-diming drivers, though, since none of its competitors charged for this. The company’s customers were not very happy, so the company reversed that decision last December.
It’ll be interesting to see how drivers will react to additional subscription services, but the focus now is more on convenience features that would usually be an option when you buy a new car, so my guess is that this will be less of an issue.
Among the other new and updated digital services the company showcased today is support for Apple’s new ‘Car Keys,’ which BMW brands as the BMW Digital Key, as well as an updated BMW Personal Assistant. Some of these new Assistant features are more cosmetic and about how it is showcased on the in-car display.
One nifty new Assistant feature is a kind of IFTTT for your car, where you can program it to automatically roll down your windows when you enter your company’s parking garage, for example, so that you can easily scan your badge to open the boom gate.
Other updates include the new BMW Maps, the company’s built-in GPS system, which the company described as a ‘major leap.’
This cloud-based service can now find routes faster, has more granular traffic data and also includes the ability to find parking spaces for you — and that parking feature itself is based on a lot of work the company is doing in aggregating sensor data from across its fleet, which already covers and maps close to 99% of the German highway system once a day in HD.
Speaking of maps, the company, which is still in the middle of the roll-out of its hybrid-electric vehicles, also announced today that its hybrid fleet will make it easier for drivers to find charging stations and will automatically switch to electric driving when they enter low-emission zones in 80 European cities, with support for additional cities coming over time.
“Digital technologies belong to the core of BMW – because hardware and software are of
equal importance for premium cars,” said Oliver Zipse, the Chairman of the Board of Management of BMW. “Our mission is to integrate advanced digital technologies with highest product excellence to enhance our customers’ experience and driving pleasure even more.”
European lawmakers are eyeing binding transparency requirements for Internet platforms in a Digital Services Act (DSA) due to be drafted by the end of the year. But the question of how to create governance structures that provide regulators and researchers with meaningful access to data so platforms can be held accountable for the content they’re amplifying is a complex one.
Platforms’ own efforts to open up their data troves to outside eyes have been chequered to say the least. Back in 2018, Facebook announced the Social Science One initiative, saying it would provide a select group of academics with access to about a petabyte’s worth of sharing data and metadata. But it took almost two years before researchers got access to any data.
“This was the most frustrating thing I’ve been involved in, in my life,” one of the involved researchers told Protocol earlier this year, after spending some 20 months negotiating with Facebook over exactly what it would release.
Facebook’s political Ad Archive API has similarly frustrated researchers. “Facebook makes it impossible to get a complete picture of all of the ads running on their platform (which is exactly the opposite of what they claim to be doing),” said Mozilla last year, accusing the tech giant of transparency-washing.
Facebook, meanwhile, points to European data protection regulations and privacy requirements attached to its business following interventions by the US’ FTC to justify painstaking progress around data access. But critics argue this is just a cynical shield against transparency and accountability. Plus of course none of these regulations stopped Facebook grabbing people’s data in the first place.
In January, Europe’s lead data protection regulator penned a preliminary opinion on data protection and research which warned against such shielding.
“Data protection obligations should not be misappropriated as a means for powerful players to escape transparency and accountability,” wrote EDPS Wojciech Wiewiorówski. “Researchers operating within ethical governance frameworks should therefore be able to access necessary API and other data, with a valid legal basis and subject to the principle of proportionality and appropriate safeguards.”
Nor is Facebook the sole offender here, of course. Google brands itself a ‘privacy champion’ on account of how tight a grip it keeps on access to user data, heavily mediating data it releases in areas where it claims ‘transparency’. While, for years, Twitter routinely disparaged third party studies which sought to understand how content flows across its platform — saying its API didn’t provide full access to all platform data and metadata so the research couldn’t show the full picture. Another convenient shield to eschew accountability.
More recently the company has made some encouraging noises to researchers, updating its dev policy to clarify rules, and offering up a COVID-related dataset — though the included tweets remains self selected. So Twitter’s mediating hand remains on the research tiller.
A new report by AlgorithmWatch seeks to grapple with the knotty problem of platforms evading accountability by mediating data access — suggesting some concrete steps to deliver transparency and bolster research, including by taking inspiration from how access to medical data is mediated, among other discussed governance structures.
The goal: “Meaningful” research access to platform data. (Or as the report title puts it: Operationalizing Research Access in Platform Governance: What to Learn from Other Industries?)
“We have strict transparency rules to enable accountability and the public good in so many other sectors (food, transportation, consumer goods, finance, etc). We definitely need it for online platforms — especially in COVID-19 times, where we’re even more dependent on them for work, education, social interaction, news and media consumption,” co-author Jef Ausloos tells TechCrunch.
The report, which the authors are aiming at European Commission lawmakers as they ponder how to shape an effective platform governance framework, proposes mandatory data sharing frameworks with an independent EU-institution acting as an intermediary between disclosing corporations and data recipients.
It’s not the first time an online regulator has been mooted, of course — but the entity being suggested here is more tightly configured in terms of purpose than some of the other Internet overseers being proposed in Europe.
“Such an institution would maintain relevant access infrastructures including virtual secure operating environments, public databases, websites and forums. It would also play an important role in verifying and pre-processing corporate data in order to ensure it is suitable for disclosure,” they write in a report summary.
Discussing the approach further, Ausloos argues it’s important to move away from “binary thinking” to break the current ‘data access’ trust deadlock. “Rather than this binary thinking of disclosure vs opaqueness/obfuscation, we need a more nuanced and layered approach with varying degrees of data access/transparency,” he says. “Such a layered approach can hinge on types of actors requesting data, and their purposes.”
A market research purpose might only get access to very high level data, he suggests. Whereas medical research by academic institutions could be given more granular access — subject, of course, to strict requirements (such as a research plan, ethical board review approval and so on).
“An independent institution intermediating might be vital in order to facilitate this and generate the necessary trust. We think it is vital that that regulator’s mandate is detached from specific policy agendas,” says Ausloos. “It should be focused on being a transparency/disclosure facilitator — creating the necessary technical and legal environment for data exchange. This can then be used by media/competition/data protection/etc authorities for their potential enforcement actions.”
Ausloos says many discussions on setting up an independent regulator for online platforms have proposed too many mandates or competencies — making it impossible to achieve political consensus. Whereas a leaner entity with a narrow transparency/disclosure remit should be able to cut through noisy objections, is the theory.
The infamous example of Cambridge Analytica does certainly loom large over the ‘data for research’ space — aka, the disgraced data company which paid a Cambridge University academic to use an app to harvest and process Facebook user data for political ad targeting. And Facebook has thought nothing of turning this massive platform data misuse scandal into a stick to beat back regulatory proposals aiming to crack open its data troves.
But Cambridge Analytica was a direct consequence of a lack of transparency, accountability and platform oversight. It was also, of course, a massive ethical failure — given that consent for political targeting was not sought from people whose data was acquired. So it doesn’t seem a good argument against regulating access to platform data. On the contrary.
With such ‘blunt instrument’ tech talking points being lobbied into the governance debate by self-interested platform giants, the AlgorithmWatch report brings both welcome nuance and solid suggestions on how to create effective governance structures for modern data giants.
On the layered access point, the report suggests the most granular access to platform data would be the most highly controlled, along the lines of a medical data model. “Granular access can also only be enabled within a closed virtual environment, controlled by an independent body — as is currently done by Findata [Finland’s medical data institution],” notes Ausloos.
Another governance structure discussed in the report — as a case study from which to draw learnings on how to incentivize transparency and thereby enable accountability — is the European Pollutant Release and Transfer Register (E-PRTR). This regulates pollutant emissions reporting across the EU, and results in emissions data being freely available to the public via a dedicated web-platform and as a standalone dataset.
“Credibility is achieved by assuring that the reported data is authentic, transparent and reliable and comparable, because of consistent reporting. Operators are advised to use the best available reporting techniques to achieve these standards of completeness, consistency and credibility,” the report says on the E-PRTR.
“Through this form of transparency, the E-PRTR aims to impose accountability on operators of industrial facilities in Europe towards to the public, NGOs, scientists, politicians, governments and supervisory authorities.”
While EU lawmakers have signalled an intent to place legally binding transparency requirements on platforms — at least in some less contentious areas, such as illegal hate speech, as a means of obtaining accountability on some specific content problems — they have simultaneously set out a sweeping plan to fire up Europe’s digital economy by boosting the reuse of (non-personal) data.
Leveraging industrial data to support R&D and innovation is a key plank of the Commission’s tech-fuelled policy priorities for the next five+ years, as part of an ambitious digital transformation agenda.
This suggests that any regional move to open up platform data is likely to go beyond accountability — given EU lawmakers are pushing for the broader goal of creating a foundational digital support structure to enable research through data reuse. So if privacy-respecting data sharing frameworks can be baked in, a platform governance structure that’s designed to enable regulated data exchange almost by default starts to look very possible within the European context.
“Enabling accountability is important, which we tackle in the pollution case study; but enabling research is at least as important,” argues Ausloos, who does postdoc research at the University of Amsterdam’s Institute for Information Law. “Especially considering these platforms constitute the infrastructure of modern society, we need data disclosure to understand society.”
“When we think about what transparency measures should look like for the DSA we don’t need to reinvent the wheel,” adds Mackenzie Nelson, project lead for AlgorithmWatch’s Governing Platforms Project, in a statement. “The report provides concrete recommendations for how the Commission can design frameworks that safeguard user privacy while still enabling critical research access to dominant platforms’ data.”
You can read the full report here.
AWS today launched Amazon Honeycode, a no-code environment built around a spreadsheet-like interface that is a bit of a detour for Amazon’s cloud service. Typically, after all, AWS is all about giving developers all of the tools to build their applications — but they then have to put all of the pieces together. Honeycode, on the other hand, is meant to appeal to non-coders who want to build basic line-of-business applications. If you know how to work a spreadsheet and want to turn that into an app, Honeycode is all you need.
To understand AWS’s motivation behind the service, I talked to AWS VP Larry Augustin and Meera Vaidyanathan, a general manager at AWS.
“For us, it was about extending the power of AWS to more and more users across our customers,” explained Augustin. “We consistently hear from customers that there are problems they want to solve, they would love to have their IT teams or other teams — even outsourced help — build applications to solve some of those problems. But there’s just more demand for some kind of custom application than there are available developers to solve it.”
In that respect then, the motivation behind Honeycode isn’t all that different from what Microsoft is doing with its PowerApps low-code tool. That, too, after all, opens up the Azure platform to users who aren’t necessarily full-time developers. AWS is taking a slightly different approach here, though, but emphasizing the no-code part of Honeycode.
“Our goal with honey code was to enable the people in the line of business, the business analysts, project managers, program managers who are right there in the midst, to easily create a custom application that can solve some of the problems for them without the need to write any code,” said Augustin. “And that was a key piece. There’s no coding required. And we chose to do that by giving them a spreadsheet-like interface that we felt many people would be familiar with as a good starting point.”
A lot of low-code/no-code tools also allow developers to then “escape the code,” as Augstin called it, but that’s not the intent here and there’s no real mechanism for exporting code from Honeycode and take it elsewhere, for example. “One of the tenets we thought about as we were building Honeycode was, gee, if there are things that people want to do and we would want to answer that by letting them escape the code — we kept coming back and trying to answer the question, ‘Well, okay, how can we enable that without forcing them to escape the code?’ So we really tried to force ourselves into the mindset of wanting to give people a great deal of power without escaping to code,” he noted.
There are, however, APIs that would allow experienced developers to pull in data from elsewhere. Augustin and Vaidyanathan expect that companies may do this for their users on tthe platform or that AWS partners may create these integrations, too.
Even with these limitations, though, the team argues that you can build some pretty complex applications.
“We’ve been talking to lots of people internally at Amazon who have been building different apps and even within our team and I can honestly say that we haven’t yet come across something that is impossible,” Vaidyanathan said. “I think the level of complexity really depends on how expert of a builder you are. You can get very complicated with the expressions [in the spreadsheet] that you write to display data in a specific way in the app. And I’ve seen people write — and I’m not making this up — 30-line expressions that are just nested and nested and nested. So I really think that it depends on the skills of the builder and I’ve also noticed that once people start building on Honeycode — myself included — I start with something simple and then I get ambitious and I want to add this layer to it — and I want to do this. That’s really how I’ve seen the journey of builders progress. You start with something that’s maybe just one table and a couple of screens, and very quickly, before you know, it’s a far more robust app that continues to evolve with your needs.”
Another feature that sets Honeycode apart is that a spreadsheet sits at the center of its user interface. In that respect, the service may seem a bit like Airtable, but I don’t think that comparison holds up, given that both then take these spreadsheets into very different directions. I’ve also seen it compared to Retool, which may be a better comparison, but Retool is going after a more advanced developer and doesn’t hide the code. There is a reason, though, why these services were built around them and that is simply that everybody is familiar with how to use them.
“People have been using spreadsheets for decades,” noted Augustin. “They’re very familiar. And you can write some very complicated, deep, very powerful expressions and build some very powerful spreadsheets. You can do the same with Honeycode. We felt people were familiar enough with that metaphor that we could give them that full power along with the ability to turn that into an app.”
The team itself used the service to manage the launch of Honeycode, Vaidyanathan stressed — and to vote on the name for the product (though Vaidyanathan and Augustin wouldn’t say which other names they considered.
“I think we have really, in some ways, a revolutionary product in terms of bringing the power of AWS and putting it in the hands of people who are not coders,” said Augustin.
The fintech revolution is just getting started.
At least that’s the impression we got after a conversation with Plaid co-founder Zach Perret. He appeared on Extra Crunch Live last week to talk about his company’s announced exit to Visa and the larger fintech landscape.
Perret and Plaid announced a deal to sell the company to Visa earlier this year for $5.3 billion, a transaction that highlighted the company’s central position in the fintech world. Plaid provides APIs that link consumer bank accounts to apps and other financial services, making it the connective tissue of the fintech boom.
It’s probably no surprise, then, that Perret is bullish: “You’ve heard it a million times, but the quote of software eating the world [is true], and my corollary to that is [that] every company is a fintech company. And certainly every financial services company should be a fintech company.”
He said there’s lots of room left for fintech and finservices companies to create new products, which is not a bad view of the future if you want to be cheered up. Perret also noted that there are widespread opportunities for fintech companies to help underbanked people in the U.S. and abroad, which indicates a massive, untapped total addressable market.
To make sure you can take your own notes, we’ve included the full session below and excerpted a few passages from the transcript. (You can sign up for Extra Crunch here if you need access.)
First up, here’s the full call:
BMW Group and Mercedes-Benz AG have punted on what was meant to be a long term collaboration to develop next-generation automated driving technology together, less than a year after announcing the agreement.
The German automakers called the break up “mutual and amicable” and have each agreed to concentrate on their existing development paths. Those new paths may include working with new or current partners. The two companies also emphasized that cooperation may be resumed at a later date.
The partnership, which was announced in July 2019, was never meant to be exclusive. Instead, it reflected the increasingly common approach among legacy manufacturers to form loose development agreements in an aim to share the capitally intensive work of developing, testing and validating automated driving technology.
The two companies did have some lofty goals. The partnership aimed to develop driver assistance systems, highly automated driving on highways, and automated parking and launch those technology in series vehicles scheduled for 2024.
It seems that the perceived benefits of working together were overshadowed by reality: creating a shared technology platform was a more complex and expensive task than expected, according to comments from the companies. BMW and Mercedes-Benz AG said they were unable to hold detailed expert discussions and talk to suppliers about technology roadmaps until the contract was signed last year.
“In these talks — and after extensive review — both sides concluded that, in view of the expense involved in creating a shared technology platform, as well as current business and economic conditions, the timing is not right for successful implementation of the cooperation,” the companies said.
BMW and Mercedes have other projects and partners. BMW, for instance, is part of a collaboration with Intel, Mobileye, Fiat Chrysler Automobiles and Ansys. Daimler and Bosch launched a robotaxi pilot project in San Jose last year.
Meanwhile, both companies are still working together in other areas. Five years, BMW and Daimler, the parent company of Mercedes-Benz, joined Audi AG to acquire location and technology platform HERE. That ownership consortium has since grown to include more companies.
And last year, BMW Group and Daimler AG also pooled their mobility services in a joint venture under the umbrella of the NOW family.
Separately, BMW said Friday it will cut 6,000 jobs in an agreement reached with the German Works Council. The cuts, prompted by sluggish sales caused by the COVID-19 pandemic, will be reportedly accomplished through early retirement, non-renewal of temporary contracts, ending redundant positions and not filling vacant positions, Marketwatch reported.
Imagine Impact, the entertainment accelerator launched by Brian Grazer and Ron Howard to try and bring Silicon Valley-style mentorship and project development techniques to Hollywood, has inked a development deal with Netflix and is looking for submissions.
Under the agreement, Impact will identify and develop film ideas in four specific genres over the next year that they will then bring to Netflix to produce and distribute, through a global submission process.
The companies did not disclose the financial terms of the agreement.
“Netflix is the most innovative content creation and distribution company of the last decade, leading the way in streaming since 2007 and changing the original content game with House of Cards in 2013,” said Brian Grazer, Ron Howard and Tyler Mitchell, co-founders of Impact, in a joint statement. “As Impact continues to evolve the way that global talent is discovered, projects are developed and how the creative industry connects, this partnership demonstrates both companies’ commitment to improving the development system in order to generate more original, quality IP to meet the growing demand.”
The first genre that Imagine Impact is looking for pitches in is “large scale action-adventure movies for all audiences.” Writers need to submit an idea and a writing sample from today through July 6.
Launched two years ago, Imagine Impact is a program that Howard, Grazer and Mitchell established to cultivate writing talent by combining the Silicon Valley mentorship model from accelerators like Y Combinator with the Hollywood storytelling magic that Grazer and Howard have perfected over decades as two of the entertainment industry’s most celebrated producers and writers, actors and directors.
The Imagine Impact vetting process involves both experienced readers and a natural language processing system that the talent incubator developed internally. From its first cohort through to last year’s team of presenters, Imagine Impact not only provides mentorship, but brings selected screenwriters to Los Angeles for an intensive period of workshopping, subsidized by the accelerator.
From the beginning, the Imagine Impact team recognized that Netflix was democratizing storytelling and creating a global platform for talent. Hollywood, the founders felt, was the best place to nurture that talent, according to interviews with the founders conducted at the company’s last demo day.
Since the first Impact program, the accelerator program has accepted 65 writers and paired them with industry experts including Akiva Goldsman of “A Beautiful Mind” fame. So far, 62 developed projects have come out of the process with 22 sold or set-up with major studios, networks and streaming services, including Godwin Jabangwe’s Tunga, an original animated family adventure musical inspired by the mythology of the Shona culture of Zimbabwe set up at Netflix, the company said.
“Brian and Ron run one of the most creative and forward-thinking production companies in the business,” said Tendo Nagenda, Vice President of Netflix Films. “Having worked with them and Imagine Entertainment on the upcoming Hillbilly Elegy and Tick, Tick … Boom!, we were excited to extend our partnership to Imagine Impact on this new endeavor. We are looking forward to being a part of this new way stories and talent are discovered and mentored.”
Remessa Online, the Brazilian money transfer service, said it has closed on $20 million in financing from one of the leading Latin American venture capital firms, Kaszek Ventures, and Accel Partners’ Kevin Efrusy, the architect of the famed venture capital firm’s Latin American investments.
Since its launch in 2016, Remessa Online has provided a pipeline for over $2 billion worth of international transfers for small and medium-sized businesses in the country. The company now boasts over 300,000 customers from 100 countries and says its fees are typically one eighth the cost of the local money transfer options.
“We understand that transferring money is just the beginning, and we are eager to build a global financial system that will make life easier for global citizens and businesses alike,” Liuzzi said.
Money transfer services are a huge business that startups have spent the last decade trying to improve in Europe and the US. European money transfer company, TransferWise has raised over $770 million alone in its bid to unseat the incumbents in the market. Meanwhile, the business-to-business cross-border payment gateway, Payoneer, has raised roughly $270 million to provide those services to small businesses.
Remessa Online already boasts a powerful group of investors and advisors including André Penha, the co-founder of apartment rental company Quinto Andar, and the former chief operating officer of Kraft Heinz USA, Fabio Armaganijan. With the new investment from Kaszek, firm co-founder Hernan Kazah, the co-founder of the Latin American e-commerce giant, MercadoLibre, and co-founder of Kaszek Ventures, will take a seat on the company’s board.
“We developed an online solution that is faster and substantially cheaper than traditional banking platforms, with digital and scalable processes and an omnichannel customer support offered by a team of experts”, said Remessa Online’s co-founder and strategy director Alexandre Liuzzi, in a statement.
Last year, the company expanded its money transfer service to the UK and Europe, allowing Brazilians abroad to invest money, pay for education or rent housing without documentation or paperwork. The company’s accounts now come with an International Banking Account Number that allows its customers to receive money in nine currencies.
With the new year, Remessa has added additional services for small and medium-sized businesses and expanded its geographic footprint to include Argentina and Chile.
Latin American countries — especially Brazil — have been hit hard by the COVID-19 pandemic. While much of the economy is still reeling, the broad trends that are moving consumers and businesses to adopt ecommerce and mobile payment solutions are just as pronounced in the region as they are in the US, according to investors like Kazah.
“This crisis is accelerating the digitization process of several industries around the world and Remessa Online has taken the lead to transform the cross-border segment in Brazil , specially for SMBs,” he said in a statement.
Founded in 2016, by Fernando Pavani, Alexandre Liuzzi, Stefano Milo, and Marcio William, Remessa Online was born from the founders own needs to find an easier way to send and receive money from abroad, according to the company.
In 2018, after a $4 million investment from Global Founders Capital and MAR Ventures, the company developed international processing capabilities and a more robust compliance tool kit to adhere to international anti-money laundering and know your customer standards. In the latter half of 2019, the company entered the SMB market with the launch of a toolkit for businesses that had been typically ignored by larger financial services institutions in Brazil.
“We believe in a world without physical borders. Our mission is to help our clients with their global financial needs, so that they can focus on what matters: their international dreams,” said Liuzzi.
Contracts for a number of coronavirus data deals that the U.K. government inked in haste with U.S. tech giants, including Google and Palantir, plus a U.K.-based AI firm called Faculty, have been published today by openDemocracy and law firm Foxglove — which had threatened legal action for withholding the information.
Concerns had been raised about what is an unprecedented transfer of health data on millions of U.K. citizens to private tech companies, including those with a commercial interest in acquiring data to train and build AI models. Freedom of Information requests for the contracts had been deferred up to now.
In a blog post today, openDemocracy and Foxglove write that the data store contracts show tech companies were “originally granted intellectual property rights (including the creation of databases), and were allowed to train their models and profit off their unprecedented access to NHS data.”
“Government lawyers have now claimed that a subsequent (undisclosed) amendment to the contract with Faculty has cured this problem, however they have not released the further contract. openDemocracy and Foxglove are demanding its immediate release,” they add.
The big story, so far, is that the original agreements didn't protect IP very well. AI firms like Faculty could easily have profited off their unprecedented access to NHS data. HMG say they fixed it after our FOI, but haven't given us the version they say cures the problem. https://t.co/Fd2EKeIDH9
— Foxglove (@Foxglovelegal) June 5, 2020
They also say the contracts show that the terms of at least one of the deals — with Faculty — were changed “after initial demands for transparency under the Freedom of Information Act.”
They have published PDFs of the original contracts for Faculty, Google, Microsoft and Palantir. Amazon Web Services was also contracted by the NHS to provide cloud hosting services for the data store.
An excerpt from the Faculty contract regarding IP rights
Back in March, as concern about the looming impact of COVID-19 on the UK’s National Health Service (NHS) took hold, the government revealed plans for the health service to work with the aforementioned tech companies to develop a “data platform” — to help coordinate its response, touting the “power” of “secure, reliable and timely data” to inform “effective” pandemic decisions.
However the government’s lack of transparency around such massive health data deals with commercial tech giants — including the controversial firm Palantir, which has a track record of working with intelligence and law enforcement agencies to track individuals, such as supplying tech to ICE to aid deportations — raises major flags.
As does the ongoing failure by the government to publish the amended contracts — with the claimed tightened IP clauses.
The (now published, original) Google contract — to provide “technical, advisory and other support” to NHSX to tackle COVID-19 — is dated March 1, and specifies that services will be provided by Google to the NHS for zero charge.
The Palantir contract, for provision of its Foundry data management platform services, is dated as beginning March 12 and expiring June 11 — with the company charging a mere £1 ($1.27) for services provided.
While the Faculty contract — providing “strategic support to the NHSX AI Lab” — has a value in excess of £1M (including VAT), and an earlier commencement date (February 3), with an expiry date of August 3.
The government announced its plan to launch an AI Lab within NHSX, the digital transformation branch of the health service, just under a year ago — saying then that it would plough in £250 million to apply AI to healthcare related challenges, and touting the potential for “earlier cancer detection, discovering new treatments and relieving the workload on our NHS workforce.”
The lab had been slated to start spending on AI in 2021. Yet the Faculty contract, in which the AI firm is providing “strategic support to the NHSX AI Lab,” and described as an “AI Lab Strategic Partner,” suggests the pandemic nudged the government to accelerate its plan.
We’ve reached out to the Department of Health with questions.
Last month, NHS England and NHS Improvement responded to an FOI request that TechCrunch filed in early April asking for the contracts — but only to say a response was delayed, already around a month after our original request. (The normal response time for U.K. FOIs is within 20 working days, although the law allows for “a reasonable extension of time to consider the public interest test.”)
Earlier this month, The Telegraph reported that Google-owned DeepMind co-founder Mustafa Suleyman — who has since moved over to work for Google in a policy role — was temporarily taken on by the NHS in March, in a pro bono advisory capacity that reportedly included discussing how to collect patient data.
An NHSX spokesperson told Digital Health that Suleyman had “volunteered his time and expertise for free to help the NHS during the greatest public health threat in a century,” and denied there had been any conflict of interest.
The latter refers to the fact that when Suleyman was still leading DeepMind the company inked a number of data-sharing agreements with NHS Trusts — gaining access to patient health data as part of an app development project. One of these contracts, with the Royal Free NHS Trust, was subsequently found to have breached U.K. data protection law. Regulators said patients could not have “reasonably expected” their information to be shared for this purpose. The Trust was also reprimanded over a lack of transparency.
Google has since taken over DeepMind’s health division and taken on most of the contracts it had inked with the NHS — despite Suleyman’s prior insistence that NHS patient data would not be shared with Google.
“Employee Wellbeing” SaaS platforms have been around for some time. Both regulation and increasing stress levels and health problems in the workplace have fed the rise of this sector of tech, and with many corporates painting long-term contracts with providers, it’s a lucrative business. Furthermore, with the COVID-19 pandemic ongoing, large remote-workforces look here to stay for the foreseeable future and are likely to need these platforms more than ever. Notable players in the space include Rally Health, Dacadoo and Virgin Pulse.
Tictrac is a startup in this space that uses a combination of personalized content, lifestyle campaigns and incentivized challenges to motivate staff. It combines this with behavioral science to identify trigger points to egg-on staff to positive behaviors. Existing investors of Tictrac include world-class tennis champion, Andy Murray and American basketball player, Carmelo Anthony who has been named an NBA All-Star 10 times.
Today it secures a £6m ($7.5M) in a funding round led by London-based Puma Private Equity, bringing its total investment to date to £13.5m ($17M). The latest round will allow the company to expand its Employee Wellbeing platform for its thousand-plus customers. It will also now expand its Enterprise platform, which enables insurance companies and health providers to engage their customers in their health and tailor relevant products and services to them.
Tictrac relies heavily on content, contributed by well-known health and fitness influencers, covering fitness, yoga, meditation, mindfulness, recipes and blog posts which provide its users with inspiration and advice on how to improve their lifestyle.
Unlike a lot of other “Employee Welbeing” platforms, users can follow the content or experts that they can relate to (much like with Instagram, Calm or Glo Yoga) powered by a campaign engine that delivers creative themes across Tictrac features, like healthy habit-forming action plans and activity challenges.
In a statement Martin Blinder, CEO and founder of Tictrac, commented: “Now more than ever, companies have a greater role and responsibility in supporting the health of their workforce. And while businesses are focused on sustaining retention and productivity – particularly with so many people working remotely – they are now tasked with trying to navigate health issues such as burn-out and striking a healthy work-life balance.”
Rupert West, Managing Director at Puma Private Equity said: “We have been consistently impressed with Tictrac’s ability to heighten health and wellbeing engagement, which in turn will help alleviate some of the pressures our health services continue to face.”
Audi has created a new business unit called Artemis to bring electric vehicles equipped with highly automated driving systems and other tech to market faster — the latest bid by the German automaker to become more agile and competitive.
The traditional automotive industry, where the design to start of production cycle might take five to seven years, has been grappling with how to bring new and innovative products to market more quickly to meet consumers’ fickle demands. The model is more akin to how Tesla or a consumer electronics company operates.
The first project under Artemis will be to “develop a pioneering model for Audi quickly and unbureaucratically,” Audi AG CEO Markus Duesmann said in a statement Friday. The unit is aiming to design and produce what Audi describes as a “highly efficient electric car” as early as 2024.
Artemis will be led by Alex Hitzinger, who was in charge of Audi’s Autonomous Intelligent Driving, the self-driving subsidiary that was launched just in 2017 to develop autonomous vehicle technology for the VW Group. AID was absorbed into the European headquarters of Argo AI, a move that was made after VW invested $2.6 billion in capital and assets into the self-driving startup.
Hitzinger, who takes the new position beginning June 1, will report directly to Duesmann. Artemis will be based at the company’s tech hub of its INCampus in Ingolstadt, Germany.
Artemis is under the Audi banner. However, the aim is for this group’s work to benefit brands under its parent company VW Group. Hitzinger and the rest of his team will have access to resources and technologies within the entire Volkswagen Group . For instance, Car.Software, an independent business unit under the VW Group, will provide digital services to Artemis. The upshot: to create a blueprint that will make VW Group a more agile automaker able to bring new and technologically advanced vehicles to market more quickly.
VW Group plans to produce and sell 75 electric vehicle models across its brands by 2029, a group that includes VW passenger cars and Audi. The creation of Artemis hasn’t changed Audi’s plans to produce 20 new all-electric vehicles and 10 new plug-in hybrids by 2025.
“The obvious question was how we could implement additional high-tech benchmarks without jeopardizing the manageability of existing projects, and at the same time utilize new opportunities in the markets,” Duesmann said.
Due to COVID-19, business continuity has been put to the test for many companies in the manufacturing, agriculture, transport, hospitality, energy and retail sectors. Cost reduction is the primary focus of companies in these sectors due to massive losses in revenue caused by this pandemic. The other side of the crisis is, however, significantly different.
Companies in industries such as medical, government and financial services, as well as cloud-native tech startups that are providing essential services, have experienced a considerable increase in their operational demands — leading to rising operational costs. Irrespective of the industry your company belongs to, and whether your company is experiencing reduced or increased operations, cost optimization is a reality for all companies to ensure a sustained existence.
One of the most reliable measures for cost optimization at this stage is to leverage elastic services designed to grow or shrink according to demand, such as cloud and managed services. A modern product with a cloud-native architecture can auto-scale cloud consumption to mitigate lost operational demand. What may not have been obvious to startup leaders is a strategy often employed by incumbent, mature enterprises — achieving cost optimization by leveraging managed services providers (MSPs). MSPs enable organizations to repurpose full-time staff members from impacted operations to more strategic product lines or initiatives.
Link Commerce offers a white-label solution for doing digital-sales in emerging markets.
Retailers can plug into the company’s e-commerce platform to create a web-based storefront that manages payments and logistics.
With the investment one of the world’s largest delivery services looks to build a broader client-base globally using a business built in Africa.
Folayan originally founded MallforAfrica, which paved the way for Link Commerce. DHL’s investment in the company — the amount of which is undisclosed — has roots in collaboration with Folayan’s original startup.
MallforAfrica began a partnership with DHL in 2015 and launched DHL Africa eShop in 2019. The sales platform is powered by Link Commerce and has brought more than 200 U.S. and U.K. sellers — from Neiman Marcus to Carters — online to African consumers in 34 countries.
Image Credits: DHL
Similar to MallforAfrica’s model, Africa eShop allows users to purchase goods directly from the websites of any of the app’s partners.
For the global retailers selling on Africa eShop, the hurdles that held back distribution on the continent — payments, currency risk, logistics — are handled by the underlying Link Commerce operating platform.
“That’s what our service does. It takes care of that whole ecosystem to enable global e-commerce to exist, no matter what country you’re in,” Folayan told TechCrunch in 2019.
Link Commerce was built out of Folayan’s startup MallforAfrica.com, which he founded in 2011 after studying and working in the U.S.
A common practice among Africans — that of giving lists of goods to family members abroad to buy and bring home — highlighted a gap between supply and demand for the continent’s consumer markets.
With MallforAfrica Folayan aimed to close that gap by allowing people on the continent to purchase goods from global retailers directly online.
MallforAfrica and Link Commerce founder Chris Folayan, Image Credits: MallforAfrica
The e-commerce site went on to onboard over 250 global retailers and now employs 30 people at order processing facilities in Oregon and the UK.
MallforAfrica’s Africa eShop expansion put it on a footing to compete with Pan African e-commerce leader Jumia — which went public on the NYSE in 2019 — and China’s Alibaba, anticipated to enter online retail on the continent at some point.
The Link Commerce, DHL deal won’t change that, but Folayan has shifted the hirearchy of his businesses to make Link Commerce the lead operation and Africa one market of many.
Image Credits: Link Commerce
“We changed the structure. So now Link Commerce is above MallforAfrica and MallforAfrica is now powered by Link Commerce,” Folayan explained on a recent call.
“Right now the focus is on Africa…but we’re taking this global,” he added.
Folayan and DHL plan to extend the platform to emerging markets around the world, where other companies may look to grow by wrapping an online store, payments, and logistics solution around their core business.
That could include any large entity that wants to launch an international e-commerce site, according to Folayan.
“Link Commerce is focused on banks, mobile companies, shipping companies and partnering with them to expand globally,” he said.
That’s a big leap from Folayan’s original venture, MallforAfrica.com
What began as a startup to sell brand name jeans and sneakers online in Africa, has pivoted to a global e-commerce fulfillment business partially owned by logistics giant DHL.
Serial entrepreneur Rohit Nadhani, who last sold his Newton email app to Essential in 2018— an app so popular it’s been saved from shutting down multiple times — is today launching a new startup, Kubera. The service aims to offer an alternative to using a spreadsheet to keep track of your assets, investments, cryptocurrencies, debts, insurance, and other important documents that would need to be transferred to a loved one in the event of your death.
The founder was inspired to create Kubera — a reference to the Indian “lord of wealth” — due to a traumatic personal experience. While swimming in Costa Rica, he was caught in a riptide and had to be rescued. After coming home, the first thing he did was to start putting together a list of all his assets to share with his wife in the event of his death.
The task was fairly difficult, as it turned out, as that list now included more than just real estate, stocks and bonds, retirement accounts, and insurance.
Nadhani realized he also wanted to list other assets like crypto investments, collectibles, precious metals, private and foreign investments, trademarks and other digital assets, as well as debts owed him — like loans he had made to family and friends.
Plus, he wanted a few more features that a simple spreadsheet could provide — like the ability to automatically update the value of the assets, similar to Intuit’s Mint, and basic reporting. More importantly, he didn’t want to share access to his personal net worth data and accounts unless it was absolutely necessary.
Existing solutions didn’t meet Nadhani’s needs, he said, as they used outdated technology, lacked the features he wanted, or used users’ data to make budgeting or investment recommendations. That, along with feedback from friends who said they were also stuck using spreadsheets for this task, prompted the founder to create his own solution with Kubera.
To do so, he reached out to former colleague Manoj Marathayil, the founding engineer at Nadhani’s two prior companies, CloudMagic (Newton) and Webyog, which exited to IDERA in 2018. Also joining Kubera is the former Head of Product & Design from Newton Mail at CloudMagic, Umesh Gopinath.
Kubera is launching today as a custom-built solution for the task of listing your assets, both traditional and non-traditional alike.
To use the service, you begin by listing your assets in a simple table, then add details like cost, value, or the documents associated with them, if available. You can either opt to update the values in the table as you go, or you can connect assets to your online accounts to update their value automatically.
The service uses trusted financial data aggregation services like Plaid and Yodlee to make the connections, which means it has “read-only” access to your financial data — Kubera cannot make transactions on your behalf. This also allows it to support connections to over 10,000 banks across the world.
The service also uses the open standard AES-256 encryption algorithm to encrypt user data, requires HTTPS on all web pages, uses HSTS to require browsers use only secure connections, and supports 2-step verification through Google Sign-in with other 2-step options launching soon.
The company’s business model is a subscription service, which allows it to generate revenue without having to share data with a third-party or advertiser. The basic service is free to use if you don’t want to automatically update your asset values. If you do, it’s $10 per month.
Once the initial entry has been done, Kubera will periodically remind you to update asset values and check in. Its “life beat” check will track if you’ve been inactive for a certain number of days (specified by you during setup) and try to reach you.
If you don’t respond to Kubera’s attempts to reach you, it will then try to reach your beneficiary by way of email and text, if provided. The service sends an email with all the information you’ve provided in a downloadable format to your beneficiary. If they don’t respond after several reminders, Kubera will then reach out to your backup contact, a “Trusted Angel.”
Kubera to some extent competes with services like Mint, YNAB and other online budgeting tools. But these services don’t offer the same extensive net worth tracking and have a different focus. It also competes with financial advisor and wealth management companies, like Personal Capital. But instead of pushing you to connect with a financial advisor or other paid services, Kubera isn’t doling out investing advice.
Further down the road, Kubera may expand into estate planning — like helping with wills or trusts, or connecting you to partners who can provide these services. But for the time being, the service is meant to be used in conjunction with users’ existing wills and trusts.
The bootstrapped startup is a five-person team. At launch, Kubera is offering 100-day free trials, allowing you the time to organize assets before making a decision on subscribing to the service.
When former Bill Clinton speechwriter and political wunderkind Andrei Cherny launched Aspiration four years ago, the upstart fintech startup was one of Los Angeles’ early entrants into a financial services market dominated by players from Europe and the financial capital of the U.S. in New York City.
Fast forward four years and the big New York fintechs are still around, but Cherny’s Aspiration remains undimmed and has today disclosed a $153 million funding round to get even bigger.
Unlike other financial services startups that compete around a suite of product offerings designed to offer no-fee checking and deposits or upfront cash payments and short-term no-interest loans, Aspiration differentiates itself with a focus on sustainability and conscious consumerism.
The company first pitched the market with an investment management service like those from Betterment and Wealthfront, but one where customers could choose their own fees. It also guaranteed investments in sustainable companies and a portfolio that would not include fossil fuel companies or other businesses deemed to be less-than-friendly to Mother Nature.
The conscious consumerism is a through-line that knits together the other products in the Aspiration portfolio including its Impact Measurement Score product that gives customers a window into how their shopping habits measure up with their desires to be more earth-friendly.
The company’s just-announced $135 million cash infusion brings the total capital raised to $200 million and was led by local investor Alpha Edison. Additional new and existing investors including UBS O’Connor Capital Solutions, DNS Capital, Radicle Impact, Sutter Rock, Jeff Skoll, Joseph Sanberg, Social Impact Finance, the Pohlad Companies, and AGO Partners, also participated in the financing.
So far, 1.5 million Americans have signed up to use Aspiration’s financial management and banking services and the company has seen $4 billion in transactions pass through its accounts.
There’s a whole suite of new services designed to help customers go green too. The company launched a matching feature where the company plants a tree for every debit card purchase that its customers make, when they round up to the nearest dollar. And it’s offering a premium subscription tier that includes debit cards made from recycled ocean plastic. The card offers higher cash back and interest rates and a feature that offsets the carbon emissions of every mile a customer drives.
Finally, Aspiration has inked partnerships with other socially conscious companies like Toms and Warby Parker giving its customers extra cash back rewards when they shop at those businesses.
“Aspiration has built deep, trusting customer relationships that are beginning to unlock latent demand for financial services among the tens of millions of conscious consumers,” said Nate Redmond of Alpha Edison, in a statement. “We are excited to lead a great group of investors to fuel Aspiration’s durable growth and lasting impact.”
“I’ve got a really high attention to detail, which might sound great, but it’s possibly a curse because I can’t help but spot problems with everything around me,” says Peter Ramsey .
He’s the founder of Built for Mars, a U.K.-based UX advisory, and he has spent the last three months documenting and analyzing the user experience of a dozen leading British banks — both incumbents and challengers — including Barclays, HSBC, Santander, Monzo, Starling and Revolut.
“Quite literally, I opened 12 real bank accounts,” he explains. “You remember the stress of opening one account? I did that 12 times, [and] it was probably a terrible idea. But I really needed to control as many variables as possible, and this was the only way of doing that.”
Next, Ramsey says he “logged everything,” recording every click, screen and action. “I saved every letter, and made a note of when they arrived. I recorded pretty much everything I could,” he recalls. “At one point I even weighed all the debit cards to see if some were heavier. That was a total waste of time though, because they all weighed the same amount. But you see what I mean, I just thought about making it as scientific as possible. Also, UX is really quite subjective, so I wanted to back up my opinions with some more quantifiable metrics.”
The resulting analysis — covering opening an account, making a first payment and freezing your card — supported by individual bank case studies, is being published on the Built for Mars website over the month with a new interactive chapter released weekly.
After being given early access to the first three chapters and an initial series of case studies, I put several questions to Ramsey to understand his motivation, methodology and what he learned. And if you’re wondering which bank came out on top, keep reading.
TechCrunch: Why did you choose to do this on banks?
Peter Ramsey: My background is in fintech, and I think the banks are just in this weird place right now. When they first came out I think consumers were surprised at how much better the apps were. Banking was renowned for having old software, it was almost acceptable for an old bank to be buggy. But now that these challenger banks have been out for five years, I think that perception has changed. So I chose the banks because they represent this industry of “challenger” versus “legacy.” Plus, for billion-dollar companies, you’d expect them all to really care about experience.
TikTok’s parent company ByteDance has added Lingxi, a Beijing-based startup that applies machine intelligence to financial services such as debt collection and insurance sales, to its ever-expanding portfolio of investments.
The AI startup has raised a $6.2 million Series A round co-led by ByteDance and Rocket Internet, the German accelerator that has incubated e-commerce giants Lazada and Jumia. Junsan Capital and GSR Ventures also participated in the round, which officially closed in April.
This marks one of ByteDance’s first investment deals for purely monetary returns, rather than for an immediate strategic purpose. However, with ByteDance’s recent foray into the financial services domain, that relationship could shift over time.
TikTok’s parent company previously focused narrowly on strategic deals, with the aim of leveraging these smaller startups’ technology, industry know-how, talents and other resources for its own business objectives. The most prominent example is perhaps its acquisition of Musical.ly, through which TikTok gained access to tens of millions of American users and a reputed product team led by founder Alex Zhu.
In 2019, ByteDance’s strategic investment team began its search for venture capital-style funding opportunities. Spearheading the effort is former Sequoia China investor Yang Jie.
There are, however, clear strategic synergies in ByteDance’s first financial investment. The online entertainment giant has already received an insurance broker license and is in the process of obtaining one for consumer finance, according to Lingxi founder and chief executive Zhongpu “Vincent” Xia. When asked if he sees ByteDance eventually deploying Lingxi’s machine intelligence in its future financial services, Xia responded, “Why not?”
ByteDance declined to comment on its entry into the financial sector.
Despite billing themselves as AI-first companies, both ByteDance and Lingxi recognize the essential role of humans before AI reaches the desired level of sophistication. ByteDance today relies on thousands of human auditors to screen content published across its TikTok, Douyin, Today’s Headlines and other apps. Likewise, Lingxi is labor-intensive and manages 200 customer representatives aided by a team of 30 AI experts.
The core of Lingxi is to “augment humans, not to replace them,” said Xia in a phone interview with TechCrunch .
Xia was leading a team of 90 people to work on Baidu’s commercialization of AI when he had an epiphany to do something of his own. He was convinced that AI would enhance humans’ cognitive capability, he said, the same way the steam engine had boosted humans’ physical production a century ago. The Chinese search pioneer has widely been perceived as the poster child of the nation’s booming AI industry because of its early and outsized investment in the technology, but by the end of 2017, Xia felt Baidu’s model of touting AI as a tool wasn’t working.
“We hit a bottleneck. The technology [AI] wasn’t mature enough yet, which means you have to combine it with a big team of people to perform manual tasks like data labeling, so you not only need to hire AI experts, professionals in the business you serve, but also a large number of workers to label data and train the machines,” he said.
Xia is among the industry practitioners who recognize the limitation of machines. While computers can outperform humans in completing repetitive, menial tasks, they remain unreliable in handling complex human emotions and can lead to counterproductive and even detrimental repercussions were they left with full autonomy.
The result of relying completely on machines is “client dissatisfaction,” said Xia. “The client might be very happy for the first few months, but as its business evolves and new needs arise, it will start to realize that the so-called machines are getting dumber and dumber. Artificial intelligence becomes artificial retardedness.”
Lingxi staff at work during the COVID-19 pandemic
Most self-proclaimed AI startups in China make money by selling bots akin to how old-fashioned software was sold with pre-programmed objectives, allowing little room for iteration or upgrade later on. Lingxi, in contrast, is service-based and takes a commission from client revenues.
Take debt collection — Lingxi’s primary focus at this stage — for example. When a client, a financial affiliate of one of China’s biggest internet firms, assigned Lingxi with 1.9 million yuan (about $270,000) worth of debt, the startup’s algorithms first determined how much the machines could handle. It turned out that the robots recovered 1.7 million yuan and left the rest of the cases, which Xia categorized as “irrational and complicated,” to human staff. By Q1 2020, Lingxi was able to achieve 2.5 times the average output of debt collection agencies, and it aims to ramp up the ratio to 4 times by the end of the year.
Conventionally, a company selling AI tools deals only with the IT department from its clients. Lingxi works with the business department instead. In the client’s eye, the AI startup is no different from a traditional debt collector. In practice, Lingxi is a debt collector with souped-up productivity enabled by computing power.
“The client doesn’t care what tools we use. They care only about the result,” said Xia. “The difference in working with these two departments is that the one in charge of the actual business is result-driven and will give us much stricter KPIs.”
The immediate impact of this model is that the AI-driven vendor must keep improving its algorithms, manually sampling and correcting machine decisions to improve their accuracy. “We might not be making money in the beginning, but over time, our output will certainly surpass those of our competitors.”
The service-oriented approach pushes Lingxi to get its hands dirty, upending the image of tech startups coding away in their sleek and comfortable offices. Its engineers are asked to regularly talk to clients about their real-life business challenges, whereas its customer representatives are required to attend training in how AI works.
“Fusion is what defines our company culture,” said Xia introspectively. “The technical team needs to understand business practices. Vice versa, our business people need to understand technology.”
It’s not hard to see why Xia chose to target China’s financial services industry. The booming sector is lucrative and tends to be more progressive in embracing technological innovations. Competition in fintech runs high, leveling the playing field for newer entrants against those that are more established.
“There’s a saying in the Chinese tech world that goes: If you can conquer the financial industry, you have conquered the business-to-business world,” said the founder.
The three-year-old startup is targeting 40-80 million yuan ($5.6 million to $11.3 million) in revenue in 2020. It’s one of the few businesses that have, against the odds, thrived under the COVID-19 pandemic because more people are taking out loans to tide the looming economic downturn.
Meanwhile, traditional debt collectors are struggling to hire during city lockdowns due to travel bans across the country, which started to ease in March, while machine-only vendors still fail to satisfy the whole range of client demands. That gave Lingxi a big window to onboard a significant number of new clients, prompting it to hire new staff.
The entrepreneurial and investor focus of the last decade has largely been centered on increased convenience and consumerism, and has encouraged companies to prioritize scaling, with little care for how it affects stakeholders, employees, consumers and even the environment. We have been talking about a shift for some time, but now more than ever, it has become obvious that companies have to take humanity into account as they build and scale in this new paradigm.
The last 10 years of startup growth have been about building and investing in these “nice to haves.” We believe the next 10 years will be focused on building and investing in “need to haves,” and the greatest business opportunities will be found in what we at Human Ventures call The Human Needs Economy — products and services that have material impact on basic needs and livelihoods and address a core draw on a consumer’s time, money or energy. For 2020, we are focusing on solving problems within three categories that we believe will have a huge impact on the Human Needs Economy: health and wellness, the future of work and community.
As the first category of the Human Needs Economy, we outline the opportunity within health and wellness and specific areas in which we are excited to build and invest.
Looking back at a decade focused on scaling nice to haves, it shouldn’t come as a surprise that we are living with unaddressed health and wellness issues. And the statistics are staggering. In 2019, an estimated 47.6 million adults (19% of the country) had a mental illness, but only 43% received any kind of mental health care. When it comes to sexual and reproductive health, whole populations of minorities and underrepresented groups receive subpar care and face stigma around health issues. And we’re on track for a shortage of 120,000 doctors in the U.S. by 2030, a signal that these issues are set to get worse. (The United States’ response to the COVID-19 pandemic has highlighted how dangerous this is in a crisis.)
These challenges and others represent what we call the wellness deficit — the sum of human needs that have gone unmet in the areas of health and wellness. And even though it may seem that every block has a new boutique fitness studio popping up or everyone you know has the latest wearable to measure their sleep, we believe we are just at the starting line when it comes to making up ground and building great businesses that tackle these issues.
Below are 10 areas that are poised to make up this wellness deficit:
When I first met Bustle Digital Group’s Jason Wagenheim, it was right as New York City was beginning to go into lockdown. The BDG offices were empty thanks to the company’s newly instituted work-from-home policy, but it still seemed reasonable to meet in-person to learn more about BDG’s broader vision.
At the time, Wagenheim — a former Fusion and Condé Nast executive who joined BDG as chief revenue officer before becoming president in February — acknowledged that we were entering a period of uncertainty, but he sounded a note of cautious optimism for the year ahead.
Since then, of course, things have been pretty rough for the digital media industry (along with the rest of the world), with a rapid reduction in ad spending leading to layoffs, furloughs and pay cuts. BDG (which owns properties like Elite Daily, Input, Inverse, Nylon and Bustle itself) had to make its share of cuts, laying off two dozen employees, including the entire staff of The Outline.
And indeed, when I checked back in with Wagenheim, he told me that he’s anticipating a 35% decline in ad revenue for this quarter. And where he’d once hoped BDG would reach $120 or $125 million in ad revenue this year, he’s now trying to figure out “what does our company look like at $75 or $90 million?”
At the same time, he insisted that executives were determined not to completely dismantle the businesses they’d built, and to be prepared whenever advertising does come back.
We also discussed how Wagenheim handled the layoffs, how the company is reinventing its events sponsorship business and the trends he’s seeing in the ad spending that remains. You can read an edited and condensed version of our conversation below.
TechCrunch: We should probably just start with the elephant in the room, which is that you guys had to make some cuts recently. You were hardly the only ones, but do you want to talk about the thought process behind them?
Jason Wagenheim: Yeah, we ended up having to say goodbye to about 7% of our team, and we had salary reductions to the tune of 18% company-wide for those that made over $70,000. And then we had 30% pay cuts for executives.
You’ve read about all this, I’m sure. It was a really, really hard decision. We spent two weeks in planning, dozens of spreadsheets, negotiating with our investors on a plan that would keep the company moving forward, but [had to] be very sober to the reality of what was happening around us. But also most importantly for us, for our executive team, we weren’t about to disassemble the company that we spent the last 12 to 18 months building.