Stay gold, ‘Plaid for X’ startups

A failed acquisition usually triggers the same series of questions: What does this mean for early-stage startups in the sector? Will a chilling effect occur and hurt valuations? Will VCs stop funding this category? How will the exit environment look going forward?

This week gave that narrative a bullish twist. Visa and Plaid announced that they have reached a mutual agreement to no longer pursue a merger. The $5.3 billion deal had been under antitrust scrutiny from the DOJ, and eventually ended amid these regulatory challenges.

Fintech VCs and startups alike reacted to the fallen deal with aggressive optimism about Plaid’s future as an independently-owned fintech startup.

The most common arguments?

  • Plaid’s price in this current moment is far beyond $5.3 billion, so now that it is a free bird it will pursue a much larger exit
  • Plaid will go public through SPAC because it is in charge of its own destiny.
  • And my favorite: One day, Plaid will buy Visa.

In an interview with TechCrunch, Plaid CEO Zach Perret wouldn’t give too many details on the future (and whether a SPAC is involved), but he did say he has new ‘clarity’ going forward.

The fact that fintech is bullish on the future of fintech isn’t quite surprising. I will say that while one deal can never make or break a sector, a flopped merger certainly can surface the current temperature in the market. Startups Weekly readers will remember last week’s edition about how P&G’s decision not to acquire Billie could hurt DTC exit opportunities. Fintech seems unbothered and, in fact, celebratory. The only counterargument I got, via Twitter DM, is that it could set a bad precedent on big fintech mergers.

“Or maybe…corporations learn from this and look to make riskier acquisitions earlier in a company’s lifecycle because they know that if they let the company get too big they’ll lose the chance,” Rami Essaid, founder of Finmark, told me.

Only in 2021 could a $5.3 billion break-up and a DOJ investigation be considered a blessing. Rock on, ‘Plaid for X’ startups.

Before we go on, make sure to follow me on Twitter for my bad jokes and early-stage startup coverage. You can also always reach me at natasha.m@techcrunch.com.

Columbus is the new Miami which is new the San Francisco

I hope that sub-hed gave you a headache, because that’s exactly what debates about where the best place to start a company do to me. The rise of Work From Anywhere has emboldened VCs to leave San Francisco for markets such as Miami or Austin in search of the next unsung hero of their portfolios.

For investors, though, the financial benefit of moving to an emerging market might not be apparent within months, but instead years. Venture is a long game (at least most of the time).

Here’s what to know, per Silicon Valley editor Connie Loizos: Drive Capital, a venture capital firm based in Columbus, Ohio, and started by two ex-Sequoia investors now has over $1.2 billion in assets. But before it had breakout companies like Root and Olive AI, Drive had to play the unusual role of investing in a region without key investing infrastructure.

Etc: Founding partner Chris Olsen explained how they set up their roots:

“We’ve had to spend a lot of time going into the universities and putting new seed managers in business and helping them fundraise and sort of building all of this infrastructure from scratch so that the next entrepreneur is out here [versus moves away], and it works. In our first year, we had inbound interest from 1,800 [startups], then it went to about 3,000 and now it’s up to about 7,000, which is more than I’ve heard any other venture firms say that they see in California. And I don’t think it’s because we’re great. I think that’s more [a reflection of the] scale of the opportunity that’s here now. One of the things that we would love to see more of is more venture capitalists coming here, because there’s certainly more opportunity than we can invest in.”

Ideal paper world powered with alternative wind and solar energy. environmental concept.

Image Credits: Paula Dani/ABlse (opens in a new window) / Getty Images

The CFO Tech Stack

If you want to start a company, go to a startup and look where employees are still using an Excel sheet. The best products are the ones fueled by frustrations, right?

Here’s what to know per managing editor Danny Crichton: For a trio of Palantir alums, 15 collective years at the now-public government tech company showed a huge gap in technology for CFOs. So, they started Mosaic, a techstack to help financial officers better communicate and perform their jobs.

Etc: Co-founder Bijan Moallemi describes the mistake other platforms are making:

“Everyone wants to be strategic, but it’s so tough to do because 80% of your time is pulling data from these disparate systems, cleaning it, mapping it, updating your Excel files, and maybe 20% of [your time] is actually taking a step back and understanding what the data is telling you.”

GettyImages 946391800

Image via Getty Images / alashi

The future of consumer hardware startups beyond Peloton

Are wearables still exciting? Is consumer hardware ever going to get easier to pull off? What was the strategy that made Peloton so successful?

These questions and more are answered in the latest consumer hardware-focused Extra Crunch Survey, which brings together VCs from SOSV, Lux Capital, Shasta Ventures, and more.

Here’s what to know: Everyone is studying the Peloton success recipe. But the big question for consumer hardware startups is if the at-home fitness market’s boom is translating to other use cases.

Etc: Cyril Ebersweiler of SOSV noted that supply chain distribution disruption during COVID-19 has been difficult for category startups, but the need for innovative solutions has never been more clear.

“Everybody is waiting for new and mind-blowing experiences, and I guess we’ve all experienced the shortcomings or the magic of some IoT products over the shelter-in-place [orders]. Spatial and ambient technologies that work well will be in demand (audio or visual), while “holographic Skype” will invade households thanks to Looking Glass.”

Also: In another investor survey, five VCs weighed in on the future of cannabis in 2021.

3D render, visualization of a man holding virtual reality glasses, electronic device, head surrounded by virtual data with neon green grid. Player one ready for the VR game. Virtual experience.

Pop goes the public market

We had yet another noisy week of privately-held startups going public to a Very Warm Wall Street reception. The most opulent story of the week was definitely Affirm’s debut, which doubled its already-increased price when it started to officially trade.

Here’s what to know, per our resident IPO reporter Alex Wilhelm, who writes The Exchange:

Etc:

GettyImages 1155292858

NEW YORK, NEW YORK – JUNE 11: PayPal Co-Founder & Affirm CEO Max Levchin visits “Countdown To The Closing Bell” at Fox Business Network Studios on June 11, 2019 in New York City. (Photo by John Lamparski/Getty Images)

Around TechCrunch

Extra Crunch Live is returning in a big way in 2021. We’ll be interviewing VC/founder duos about how their Series A deals went down, and Extra Crunch members will have the chance to get live feedback on their pitch deck. You can check out our plans for ECL in 2021 right here, or hit up this form to submit your pitch deck. Episodes air every Wednesday at 3pm ET/12pm PT starting in February.

And if you’re feeling extra generous, take this survey to help shape the future of TechCrunch

Across the week

Seen on TechCrunch

Glassdoor: Best tech companies to work for in 2021

Signal’s Brian Acton talks about exploding growth, monetization and WhatsApp data-sharing outrage

Two-year-old NUVIA sells to Qualcomm for $1.4 billion

Loop launches out of stealth to make auto insurance more equitable

Nuclear fusion tech developer General Fusion now has Shopify and Amazon founders backing it

Seen on Extra Crunch

Lessons from Top Hat’s acquisition spree

12 ‘flexible VCs’ who operate where equity meets revenue share

Dear Sophie: What’s the new minimum salary required for H-1B visa applicants?

Equity (and a bonus Equity)

The news keeps coming so we keep recording. This week, the trio chatted about the Plaid-Visa deal, but also about the Palantir mafia‘s next big bet. In early-stage news, I covered a fintech accelerator that pivoted into an edtech accelerator and a new startup coming out of Austin that makes car insurance more equitable. We also debated SPACs for a bit, and Danny was…optimistic?

Listen to our episode, follow the pod on Twitter, and if you so please, tune into our bonus Equity episode that just came out today. It’s an episode dedicated entirely to the barrage of payments and e-commerce funding that came out this week.

Until next week,

Natasha 

DOJ keeps 80-year-old music licensing rules affecting Apple Music intact

The Department of Justice has chosen to keep 80-year-old consent decrees relating to music licensing rules intact, a decision that keeps the way Apple Music secures licenses for songs and tracks the same without any major legal changes.

The examination of whether consent decrees from 1941 apply appropriately to the modern music industry by the Justice Department has been a closely-watched affair, as it had the potential to change how licensing fees are determined. On Friday, the department offered its decision to keep the consent decrees active.

The 80-year-old decrees dictate how the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music Inc. (BMI) performing rights organizations function,specifically regarding music licensing. The two PROs can provide a license to businesses, broadcasters, and streaming services that include the usage rights held by songwriters, composers, and others, for the use of the music.

This also includes music services like Apple Music and Spotify, which pay licensing fees to the PROs to be able to offer music for listening.

Under the rules, the rights are pooled and collectively licensed out to Apple and others, enabling music to be played, to save from having to enter into individual licensing agreements with every songwriter or publisher. The decrees force certain rules on the PROs, such as eliminating exclusive licensing and ensuring that fees are negotiated or set out in a “rate court” by a federal judge.

Variety reports the Justice Department decided to keep the rules as they are, rather than dissolving the consent decrees and forcing all parties to enter potentially costly and lengthy renegotiations. This could potentially have included the PROs raising the cost of licensing fees charged to Apple Music and other firms, or even refuse to license to them at all.

Critics have complained about the decrees for many years, with issues ranging from the age of the decrees not taking into account new technologies like streaming music, to how the decrees prevent innovation by enforcing specific licensing terms on a negotiation.

Furthermore, as the consent decrees only applied to ASCAP and BMI, which holds 90% of the market combined, it doesn’t impact smaller PROs that can work without the same restraints. This includes the Pro Music Rights (PMR) organization, which sued Apple in 2019 for allegedly streaming copyrighted music without correct licenses.

The last time music licensing in the United States received a major update was in 2018, with the Music Modernization Act combining multiple acts together and refining the process for courts to determine rates of pay.

“While we were disappointed that no action was taken, we are encouraged to see how the DOJ’s approach to these issues has evolved,” said ASCAP and BMI CEOs Elizabeth Matthews and Mike O’Neill in a joint statement. “While BMI and ASCAP have long advocated for updating and modernizing our consent decrees, it has become clear over the course of two different reviews by two different DOJ administrations in the past eight years that modifying or terminating our decrees would be extremely challenging.”

The National Music Publishers Association head David Israelite was “disappointed” in the decision, as it would have allowed “for freedoms that would have greatly helped songwriters and music publishers realize the true value of their work.” He adds he hopes the incoming Biden administration will “take decisive action” to allow songwriters and publishers to directly negotiate with Apple and tech companies, “who continue to pay below market rates.”

Startups look beyond lidar for autonomous vehicle perception

Last CES was a time of reckoning for lidar companies, many of which were cratering due to a lack of demand from a (still) non-existent autonomous vehicle industry. The few that excelled did so by specializing, and this year the trend has pushed beyond lidar, with new sensing and imaging methods pushing to both compete with and complement the laser-based tech.

Lidar pushed ahead of traditional cameras because it could do things they couldn’t — and now some companies are pushing to do the same with tech that’s a little less exotic.

A good example of addressing the problem or perception by different means is Eye Net’s vehicle-to-x tracking platform. This is one of those techs that’s been talked about in the context of 5G (admittedly still somewhat exotic), which for all the hype really does enable short-distance, low-latency applications that could be life-savers.

Eye Net provides collision warnings between vehicles equipped with its tech, whether they have cameras or other sensing tech equipped or not. The example they provide is a car driving through a parking lot, unaware that a person on one of those horribly unsafe electric scooters is moving perpendicular to it ahead, about to zoom into its path but totally obscured by parked cars. Eye Net’s sensors detect the position of the devices on both vehicles and send warnings in time for either or both to brake.

CG illustration of a bicyclist and car being warned of an imminent collision.

Image Credits: Eye Net

They’re not the only ones attempting something like this, but they hope that by providing a sort of white-label solution, a good size network can be built relatively easily, instead of having none, and then all VWs equipped, and then some Fords and some e-bikes, and so on.

But vision is still going to be a major part of how vehicles navigate, and advances are being made on multiple fronts.

Brightway Vision, for instance, addresses the issue of normal RGB cameras having limited visibility in many real-world conditions by going multispectral. In addition to ordinary visible-light imagery, the company’s camera is mated to a near-infrared beamer that scans the road ahead at set distance intervals many times a second.

CG illustration of a camera using infrared to see further ahead at night.

Image Credits: Brightway Vision

The idea is that if the main camera can’t see 100 feet out because of fog, the NIR imagery will still catch any obstacles or road features when it scans that “slice” in its regular sweep of the incoming area. It combines the benefits of traditional cameras with those of IR ones, but manages to avoid the shortcomings of both. The pitch is that there’s no reason to use a normal camera when you can use one of these, which does the same job better and may even allow another sensor to be cut out.

Foresight Automotive also uses multispectral imagery in its cameras (chances are hardly any vehicle camera will be limited to visible spectrum in a few years), dipping into thermal via a partnership with FLIR, but what it’s really selling is something else.

To provide 360-degree (or close) coverage, generally multiple cameras are required. But where those cameras go differs on a compact sedan versus an SUV from the same manufacturer — let alone on an autonomous freight vehicle. Because those cameras have to work together, they need to be perfectly calibrated, aware of the exact position of the others, so they know, for example, that they’re both looking at the same tree or bicyclist and not two identical ones.

Image showing Foresight cameras being attached magnetically to a car's body.

Image Credits: Foresight Automotive

Foresight’s advance is to simplify the calibration stage, so a manufacturer or designer or test platform doesn’t need to be laboriously re-tested and certified every time the cameras need to be moved half an inch in one direction or the other. The Foresight demo shows them sticking the cameras on the roof of the car seconds before driving it.

It has parallels to another startup called Nodar that also relies on stereoscopic cameras, but takes a different approach. The technique of deriving depth from binocular triangulation, as the company points out, goes back decades, or millions of years if you count our own vision system, which works in a similar ways. The limitation that has held this approach back isn’t that optical cameras fundamentally can’t provide the depth information needed by an autonomous vehicle, but that they can’t be trusted to remain calibrated.

Nodar shows that its paired stereo cameras don’t even need to be mounted to the main mass of the car, which would reduce jitter and fractional mismatches between the cameras’ views. Attached to the rear view mirrors, their “Hammerhead” camera setup has a wide stance (like the shark’s), which provides improved accuracy because of the larger disparity between the cameras. Since distance is determined by the differences between the two images, there’s no need for object recognition or complex machine learning to say “this is a shape, probably a car, probably about this big, which means it’s probably about this far away” as you might with a single camera solution.

Image Credits: Nodar

The industry has already shown that camera arrays do well in harsh weather conditions, just as human eyes do,” said Nodar COO and co-founder Brad Rosen. “For example, engineers at Daimler have published results showing that current stereoscopic approaches provide significantly more stable depth estimates than monocular methods and LiDAR completion in adverse weather. The beauty of our approach is that the hardware we use is available today, in automotive-grade, and with many choices for manufacturers and distributors.”

Indeed, a major strike against lidar has been the cost of the unit — even “inexpensive” ones tend to be orders of magnitude more expensive than ordinary cameras, something that adds up very quickly. But team lidar hasn’t been standing still either.

Sense Photonics came onto the scene with a new approach that seemed to combine the best of both worlds: a relatively cheap and simple flash lidar (as opposed to spinning or scanning, which tend to add complexity) mated to a traditional camera so that the two see versions of the same image, allowing them to work together in identifying objects and establishing distances.

Since its debut in 2019 Sense has refined its tech for production and beyond. The latest advance is custom hardware that has enabled it to image objects out to 200 meters — generally considered on the far end both for lidar and traditional cameras.

“In the past, we have sourced an off-the-shelf detector to pair with our laser source (Sense Illuminator). However, our 2 years of in-house detector development has now completed and is a huge success, which allows us to build short-range and long-range automotive products,” said CEO Shauna McIntyre.

“Sense has created ‘building blocks’ for a camera-like LiDAR design that can be paired with different sets of optics to achieve different FOV, range, resolution, etc,” she continued. “And we’ve done so in a very simple design that can actually be manufactured in large volumes. You can think of our architecture like a DSLR camera where you have the ‘base camera’ and can pair it with a macro lens, zoom lens, fisheye lens, etc. to achieve different functions.”

One thing all the companies seemed to agree on is that no single sensing modality will dominate the industry from top to bottom. Leaving aside that the needs of a fully autonomous (i.e. level 4-5) vehicle has very different needs from a driver assist system, the field moves too quickly for any one approach to remain on top for long.

“AV companies cannot succeed if the public is not convinced that their platform is safe and the safety margins only increase with redundant sensor modalities operating at different wavelengths,” said McIntyre.

Whether that means visible light, near-infrared, thermal imaging, radar, lidar, or as we’ve seen here, some combination of two or three of these, it’s clear the market will continue to favor differentiation — though as with the boom-bust cycle seen in the lidar industry a few years back, it’s also a warning that consolidation won’t be far behind.

This Week in Apps: Parler deplatformed, alt apps rise, looking back at 2020 trends

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

The app industry is as hot as ever, with a record 218 billion downloads and $143 billion in global consumer spend in 2020.

Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

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

The right-wing gets deplatformed

Last weekend, Google and Apple removed Parler from their respective app stores, the latter after first giving the app 24 hours to come up with a new moderation strategy to address the threats of violence and illegal activity taking place on the app in the wake of the Capitol riot. When Parler failed to take adequate measures, the app was pulled down.

What happened afterwards was unprecedented. All of Parler’s technology backend services providers pulled support for Parler, too, including Amazon AWS (which has led to a lawsuit), Stripe and even Okta, which Parler was only using as a free trial. Other vendors also refused to do business with the app, potentially ending its ability to operate for good.

But although Parler is down, its data lives on. Several efforts have been made to archive Parler data for posterity — and for tipping off the FBI. Gizmodo made a map using the GPS data of 70,000 Parler posts. Another effort, Y’all Qaeda, is also using location data to map videos from Parler to locations around the Capitol building.

These visualizations are possible because the data itself was quickly archived by internet archivist @donk_enby before Parler was taken down, and because Parler stored rich metadata with each user’s post. That means each user’s precise location was recorded when they uploaded their photos and videos to the app.

It’s a gold mine for investigators and a further indication of the privilege these rioters believed they had to avoid prosecution or the extent to which they were willing to throw their life away for their cause — the false reality painted for them by Trump, his allies and other outlets that repeated the “big lie” until they truly believed only a revolution could save our democracy.

The move to kick Parler offline followed the broader deplatforming of Trump, who’s accused of inciting the violence, in part by his refusal to concede and his continued lies about a “rigged election.” As a result, Trump has been deplatformed across social platforms like Twitter, Facebook, Instagram, TikTok, Twitch, YouTube, Reddit, Discord and Snapchat, while e-commerce platform Shopify kicked out Trump merch shops and PayPal refused to process transactions for some groups of Trump supporters.

Alternative social apps post gains following Capitol riot

Parler was the most high-profile app used by the Capitol rioters, but others found themselves compromised by the same crowd. Walkie-talkie app Zello, for instance, was used by some insurrectionists during the January 6 riot to communicate. Telegram, meanwhile, recently had to block dozens of hardcore hate channels that were threatening violence, including those led by Nazis (which were reported for years with no action by the company, some claim).

Now, many in the radical right are moving to new platforms outside of the mainstream. Immediately following the Capitol riot, MeWe, CloutHub and other privacy-focused rivals to big tech began topping the app stores, alongside the privacy-focused messengers Signal and Telegram. YouTube alternative Rumble also gained ground due to recent events. Right-wingers even mistakenly downloaded the wrong “Parlor” app and a local newspaper app they thought was the uncensored social network Gab. (They’re not always the brightest bulbs.)

This could soon prove to be another difficult situation for the platforms to address, as we already came across highly concerning posts distributed on MeWe, which had used extreme hate speech or threatened violence. MeWe claims it moderates its content, but its recent growth to now 15 million users may be making that difficult — especially since it’s inheriting the former Parler users, including the radical far-right. The company has not been able to properly moderate the content, which may make it the next to be gone.

2020 annual review

App Annie this week released its annual review of the mobile app industry finding (as noted above) that mobile app downloads grew by 7% year-over-year to a record 218 billion in 2020. Consumer spending also grew by 20% to also hit a new milestone of $143 billion, led by markets that included China, the United States, Japan, South Korea and the United Kingdom. Consumers spent 3.5 trillion minutes on Android devices in 2020. Meanwhile, U.S. users now spend more time in apps (four hours) than watching live TV (3.7 hours).

The full report examines other key trends across social, gaming, finance, e-commerce, video and streaming, mobile food ordering, business apps, edtech and much more. We pulled out some highlights here, such as TikTok’s chart-topping year by downloads, the rise in livestreamed and social shopping, consumers spending 40% more time streaming on mobile YoY and other key trends.

Sensor Tower also released its own annual report, which specifically explored the impact of COVID-19; the growth in business apps, led by Zoom; mobile gaming; and the slow recovery of travel apps, among other things.

Samsung reveals its new flagships

Image Credits: Samsung

Though not “apps” news per se, it’s worth making note of what’s next in the Android ecosystem of high-end devices. This week was Samsung’s Unpacked press event, where the company revealed its latest flagship devices and other products. The big news was Samsung’s three new phones and their now lower prices: the glass-backed Galaxy S21 ($799) and S21 Plus ($999), and the S21 Ultra ($1,199), which is S Pen compatible.

The now more streamlined camera systems are the key feature of the new phones, and include:

  • S21 and S21 Plus: A 12-megapixel ultrawide, 12-megapixel wide and 64-megapixel telephoto with 30x space zoom.
  • S21 Ultra: A 12-megapixel ultra-wide, 108-megapixel wide and, for the first time, a dual-telephoto lens system with 3x and 10x optical zoom. The Ultra also improves low-light shooting with its Bright Night sensor.

The devices support UWB and there’s a wild AI-powered photo feature that lets you tap to remove people from the background of your photos. (How well it works is TBD). Other software imaging updates allow you to pull stills from 8K shooting, better image stabilization and a new “Vlogger view” for shooting from front and back cameras as the same time.

Also launched were Samsung’s AirPods rival, the Galaxy Buds Pro, and its Tile rival, the Galaxy SmartTag.

Platforms: Apple

  • Apple releases second iOS 14.2 developer beta. The update brings improvements to the HomePod mini handoff experience and an update to the Find My app to ready it for supporting third-party accessories.
  • Apple will soon allow third-parties to join the Find My app ahead of its AirTags launch. Tile had argued before regulators last year that Apple was giving itself first-party advantage with AirTags in Find My. Apple subsequently launched the Find My Accessory Program to begin certifying third-party products. AirTags’ existence was also leaked again this week.
  • Apple is working to bring its Music and Podcasts apps to the Microsoft Store.
  • Apple may be working on a podcast subscription service, per The Information.

Platforms: Google

  • Google appears to be working on an app hibernation feature for Android 12. The feature would hibernate unused apps to free up space.
  • Google pulls several personal loan apps from the Play Store in India. The company said several of the apps had been targeting vulnerable borrowers, then abusing them and using other extreme tactics when they couldn’t pay. Critics say Google took too long to respond to the outcry, which has already prompted suicides. Police have also frozen bank accounts holding $58 million for alleged scams conducted through 30 apps, none of which had approval from India’s central bank.

Gaming

Image Credits: Sensor Tower

  • 48,000 mobile games were purged from the China App Store in December 2020, reports Sensor Tower. The games removed in 2020 for not having acquired the proper Chinese gaming license, had generated nearly $3 billion in lifetime revenue.
  • The top grossing mobile game in December 2020 was Honor of Kings with $258 million in player spending, up 58% year-over-year, according to Sensor Tower. PUBG Mobile was No. 2. followed by Genshin Impact.
  • Among Us was the most downloaded mobile game in December 2020, per Apptopia. with an estimated 48 million new downloads in the month, most through Google Play.
  • Epic Games demands Fortnite to be reinstated on the App Store, in a U.K. legal filing. The game maker is engaged in multiple lawsuits over the “Apple tax.”

Security

  • Amazon’s Ring app exposed users’ home addresses. Amazon says there’s no evidence the security flaw had been exploited by anyone.
  • New research details how law enforcements gets into iOS and Android smartphones and cloud backups of their data.

Privacy

  • Signal’s Brian Acton says recent outrage over WhatsApp’s terms are driving installs of the private messaging app. Third-party data indicates Signal has around 20 million MAUs as of December 2020. The app also saw a surge due to the U.S. Capitol riots, with 7.5 million downloads from January 6-10.
  • Telegram user base in India was up 110% in 2020. The app now has 115 million MAUs in India, which could allow it to better compete with WhatsApp.
  • Privacy concerns are also driving sign-ups for encrypted email providers, ProtonMail and Tutanota. The former reports a 3x rise in recent weeks, while the latter said usage has doubled size WhatsApp released its new T&Cs.
  • FTC settled with period-tracking app Flo for sharing user health data with third-party analytics and marketing services, when it had promised to keep data private. The app must now obtain user consent and will be subject to an independent review of its practices.
  • FTC settled with Ever, the maker of a photo storage app that had pivoted to selling facial recognition services. The company used the photos it collected to train facial recognition algorithms. It’s been order to delete that data and all face embeddings derived from photos without user consent.
  • Muslim prayer app Salaat First (Prayer Times) was found to be recording and selling user location info to a data broker. The firm collecting the data had been linked to a supply chain that involved a U.S. government contractor who worked with ICE, Customs and Border Protection, and the FBI.
  • TikTok changed the privacy settings and defaults for users under 18. Children 13-15 will have private accounts by default. Other restrictions apply on features like commenting, Dueting, Stitching and more for all under 18. TikTok also partnered with Common Sense Networks to help it curate age-appropriate content for users under 13.

Government & Policy

  • Italy’s data protection agency, the GPDP, said it contacted the European Data Protection Board (EDPB) to raise concerns over WhatsApp’s requirement for users to accept its updated T&Cs to continue to use the service. The law requires that users are informed of each specific use of their data and given a choice as to whether their data is processed. The new in-app notification doesn’t make the changes clear nor allow that option.
  • Turkey starts an antitrust investigation into Facebook and WhatsApp. The investigation was prompted by WhatsApp’s new Terms of Service, effective February 8, which allows data sharing with Facebook.
  • WhatsApp then delayed its T&C changes, as a result.

Health & Fitness

  • Google this week fixed an issue with its Android Exposure Notification System that’s used by COVID-19 tracking apps. The impacted apps took longer to load and carry out their exposure checks.

Edtech

  • Amazon makes an education push in India with JEE preparation app. The company launched Amazon Academy, a service that will help students in India prepare for the Joint Entrance Examinations (JEE), a government-backed entrance assessment for admission into various engineering colleges.
  • PayPal acquired the 30% stake it didn’t already own in China’s GoPay, making it the first foreign firm in China with full ownership of its payments business.
  • Therapy app Talkspace will go public through a $1.4 billion merger with SPAC Hudson Executive Investment Corp.
  • Snap acquired location data startup StreetCred. The team will join the company and work on maps and location-related products for Snapchat.
  • BlaBla raised $1.5 million for its language-learning app that teaches English using TikTok-like videos. The startup, a participant in Y Combinator’s 2020 summer batch, had previously applied to YC seven times. Other investors include Amino Capital, Starling Ventures and Wayra X.
  • Poshmark, the online and mobile app for reselling clothing, IPO’d and closed up more than 140% on day one.
  • Dating app Bumble also filed to go public. The company claims 42 million MAUs, with 2.4 million paying users through the first nine months of 2020. It lost $117 million on $417 million in revenue during that time.
  • Blog platform Medium acquired Paris-based Glose, a mobile app that lets you buy and read books on mobile devices.
  • Indonesian investment app Ajaib raised $25 million Series A led by Horizons Venture and Alpha JWC. Inspired by Robinhood, the app offers low-fee stock trading and access to mutual funds.
  • Mailchimp acquired Chatitive, a B2B messaging startup that helps businesses reach customers over text messages.
  • Chinese fitness app Keep raised $360 million Series F led by SoftBank Vision Fund. The six-year-old startup that allows fitness influencers to host live classes over video is now valued at $2 billion.
  • Google finalized Fitbit acquisition. Google confirmed it will allow Fitbit users to continue to connect with third-party services and said the health data will be kept separate and not used for ads.
  • On-demand U.K. supermarket Weezy raised $20 million Series A for its Postmates-like app that delivers groceries in as fast as 15 minutes, on average.

Bandsintown

COVID has cancelled concerts, which required Bandsintown to pivot from helping people find shows to attend to a new subscription service for live music. The company this week launched Bandsintown Plus, a $9.99 per month pass that gives users access to more than 25 concerts per month. The shows offered are exclusive to the platform, and not available on other sites like YouTube, Twitch, Apple Music or Spotify.

Piñata Farms

Image Credits: Piñata Farms

This new social video app lets you put anyone or anything into an existing video to make humorous video memes. The computer vision-powered app lets you do things like crop out a head from a photo, for example, or use thousands of in-app items to add to your existing video. The resulting creations can be shared in the app, privately through messaging or out to other social platforms. Available on iOS only.

Capture App

Image Credits: Numbers Protocol

This new blockchain camera app, reviewed here on TechCrunch, uses tech commercialized by the Taiwan-based startup, Numbers Protocol. The app secures the metadata associated with photos you take on the blockchain, also allowing users to adjust privacy settings if they don’t want to share a precise location. Any subsequent changes to the photo are then traced and recorded. Use cases for the technology include journalism (plus combating fake news), as well as a way for photographers to assure their photos are attributed correctly. The app is available on the App Store and Google Play.

Marsbot for AirPods

Image Credits: Foursquare Labs, Inc.

A new experiment from Foursquare Labs, Marsbot, offers an audio guide to your city. As you walk or bike around, the app gives you running commentary about the places around you using data from Foursquare, other content providers and snippets from other app users. The app is also optimized for AirPods, making it iOS-only.

Loupe

Image Credits: Loupe

Loupe is a new app that modernizes sports card collecting. The app allows users to participate in daily box breaks, host their own livestreams with chats, collect alongside fellow collectors and purchase new sports card singles, packs and boxes when they hit the market, among other things. The app is available on iOS.

Second season of Apple TV+'s 'Ted Lasso' starts production

Production has commenced on the second season of the popular sports-comedy series “Ted Lasso,” which could start airing on Apple TV by summer 2021.

A second and third season of “Ted Lasso” has been confirmed to be on the way, with Apple ordering more seasons at the time the show became available on Apple TV+. The ongoing COVID-19 pandemic forced many productions to be delayed or postponed, but now Apple has confirmed it is starting for the show.

“Time to start warming those biscuits,” Apple posted to Twitter on its official Apple TV account. “Production for @TedLasso Season 2 has officially begun!”

Taking into consideration the usual time it takes from the start of a television production to airing, it is possible that the first few episodes of the show could arrive on Apple TV+ within months. While it will most probably be well before the end of 2021, the start of season 2 could possibly be watchable by the summer at the earliest, if COVID-19 doesn’t cause too many problems.

Fans of the Jason Sudeikis and Bill Lawrence series can expect the show to run for just three seasons. In December, Lawrence advised of its limited run, hinting that it was due to Sudeikis wanting to spend more time with his children.

Checkout wants to be Rapyd and Fast

Hello and welcome back to Equity, TechCrunch’s venture-capital-focused podcast, where we unpack the numbers behind the headlines. We’re back on this lovely Saturday with a bonus episode!

Again!

There is enough going on that to avoid failing to bring you stuff that we think matters, we are back yet again for more. This time around we are not talking Roblox, we’re talking about ecommerce, and a number of rounds — big and small — that have been raised in the space. Honest question: do y’all plan to release news on the same week? Are trends a social construct?

From Natasha, Grace, Danny, and your humble servant, here’s your run-down:

  • Webflow raised $140 million in a round that it says it did not need. This is not a new thing. Some startups are doing well, and don’t burn much. So investors offer them more at a nice price. In this case $2.1 billion. (Webflow does no-code
  • Checkout.com raised $450 million. The rich really do get richer. In this case the founders of Checkout.com, whose company is now worth around $15 billion Checkout.com does, you guessed, online checkout work. Which as Danny explains is complicated and critical.
  • We also talked about this Bolt round, for context.
  • And sticking to the ecommerce theme, Rapyd raised $300 million at around a $2.5 billion valuation. There is infinte money available for late-stage fintech.
  • Early stage as well, it turns out, with Tradeswell raising $15.5 million to help businesses improve their net margins.
  • Finally, ending with a chat on infrastructure, Nacelle closed an $18 million Series A. 

And now we’re going back to bed.

Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Extra Crunch roundup: antitrust jitters, SPAC odyssey, white-hot IPOs, more

Some time ago, I gave up on the idea of finding a thread that connects each story in the weekly Extra Crunch roundup; there are no unified theories of technology news.

The stories that left the deepest impression were related to two news pegs that dominated the week — Visa and Plaid calling off their $5.3 billion acquisition agreement, and sizzling-hot IPOs for Affirm and Poshmark.

Watching Plaid and Visa sing “Let’s Call The Whole Thing Off” in harmony after the U.S. Department of Justice filed a lawsuit to block their deal wasn’t shocking. But I was surprised to find myself editing an interview Alex Wilhelm conducted with with Plaid CEO Zach Perret the next day in which the executive said growing the company on its own is “once again” the correct strategy.


Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription


In an analysis for Extra Crunch, Managing Editor Danny Crichton suggested that federal regulators’ new interest in antitrust enforcement will affect valuations going forward. For example, Procter & Gamble and women’s beauty D2C brand Billie also called off their planned merger last week after the Federal Trade Commission raised objections in December.

Given the FTC’s moves last year to prevent Billie and Harry’s from being acquired, “it seems clear that U.S. antitrust authorities want broad competition for consumers in household goods,” Danny concluded, and I suspect that applies to Plaid as well.

In December, C3.ai, Doordash and Airbnb burst into the public markets to much acclaim. This week, used clothing marketplace Poshmark saw a 140% pop in its first day of trading and consumer-financing company Affirm “priced its IPO above its raised range at $49 per share,” reported Alex.

In a post titled A theory about the current IPO market, he identified eight key ingredients for brewing a debut with a big first-day pop, which includes “exist in a climate of near-zero interest rates” and “keep companies private longer.” Truly, words to live by!

Come back next week for more coverage of the public markets in The Exchange, an interview with Bustle CEO Bryan Goldberg where he shares his plans for taking the company public, a comprehensive post that will unpack the regulatory hurdles facing D2C consumer brands, and much more.

If you live in the U.S., enjoy your MLK Day holiday weekend, and wherever you are: thanks very much for reading Extra Crunch.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Rapid growth in 2020 reveals OKR software market’s untapped potential

After spending much of the week covering 2021’s frothy IPO market, Alex Wilhelm devoted this morning’s column to studying the OKR-focused software sector.

Measuring objectives and key results are core to every enterprise, perhaps more so these days since knowledge workers began working remotely in greater numbers last year.

A sign of the times: this week, enterprise orchestration SaaS platform Gtmhub announced that it raised a $30 million Series B.

To get a sense of how large the TAM is for OKR, Alex reached out to several companies and asked them to share new and historical growth metrics:

  • Gthmhub
  • Perdoo
  • WorkBoard
  • Ally.io
  • Koan
  • WeekDone

“Some OKR-focused startups didn’t get back to us, and some leaders wanted to share the best stuff off the record, which we grant at times for candor amongst startup executives,” he wrote.

5 consumer hardware VCs share their 2021 investment strategies

For our latest investor survey, Matt Burns interviewed five VCs who actively fund consumer electronics startups:

  • Hans Tung, managing partner, GGV Capital
  • Dayna Grayson, co-founder and general partner, Construct Capital
  • Cyril Ebersweiler, general partner, SOSV
  • Bilal Zuberi, partner, Lux Capital
  • Rob Coneybeer, managing director, Shasta Ventures

“Consumer hardware has always been a tough market to crack, but the COVID-19 crisis made it even harder,” says Matt, noting that the pandemic fueled wide interest in fitness startups like Mirror, Peloton and Tonal.

Bonus: many VCs listed the founders, investors and companies that are taking the lead in consumer hardware innovation.

A theory about the current IPO market

Digital generated image of abstract multi colored curve chart on white background.

Digital generated image of abstract multi colored curve chart on white background.

If you’re looking for insight into “why everything feels so damn silly this year” in the public markets, a post Alex wrote Thursday afternoon might offer some perspective.

As someone who pays close attention to late-stage venture markets, he’s identified eight factors that are pushing debuts for unicorns like Affirm and Poshmark into the stratosphere.

TL;DR? “Lots of demand, little supply, boom goes the price.”

Poshmark prices IPO above range as public markets continue to YOLO startups

Clothing resale marketplace Poshmark closed up more than 140% on its first trading day yesterday.

In Thursday’s edition of The Exchange, Alex noted that Poshmark boosted its valuation by selling 6.6 million shares at its IPO price, scooping up $277.2 million in the process.

Poshmark’s surge in trading is good news for its employees and stockholders, but it reflects poorly on “the venture-focused money people who we suppose know what they are talking about when it comes to equity in private companies,” he says.

Will startup valuations change given rising antitrust concerns?

GettyImages 926051128

financial stock market graph on technology abstract background represent risk of investment

This week, Visa announced it would drop its planned acquisition of Plaid after the U.S. Department of Justice filed suit to block it last fall.

Last week, Procter & Gamble called off its purchase of Billie, a women’s beauty products startup — in December, the U.S. Federal Trade Commission sued to block that deal, too.

Once upon a time, the U.S. government took an arm’s-length approach to enforcing antitrust laws, but the tide has turned, says Managing Editor Danny Crichton.

Going forward, “antitrust won’t kill acquisitions in general, but it could prevent the buyers with the highest reserve prices from entering the fray.”

Dear Sophie: What’s the new minimum salary required for H-1B visa applicants?

Image Credits: Sophie Alcorn

Dear Sophie:

I’m a grad student currently working on F-1 STEM OPT. The company I work for has indicated it will sponsor me for an H-1B visa this year.

I hear the random H-1B lottery will be replaced with a new system that selects H-1B candidates based on their salaries.

How will this new process work?

— Positive in Palo Alto

Venture capitalists react to Visa-Plaid deal meltdown

A homemade chocolate cookie with a bite and crumbs on a white background

OLYMPUS DIGITAL CAMERA

After news broke that Visa’s $5.3 billion purchase of API startup Plaid fell apart, Alex Wilhelm and Ron Miller interviewed several investors to get their reactions:

  • Anshu Sharma, co-founder and CEO, SkyflowAPI
  • Amy Cheetham, principal, Costanoa Ventures
  • Sheel Mohnot, co-founder, Better Tomorrow Ventures
  • Lucas Timberlake, partner, Fintech Ventures
  • Nico Berardi, founder and general partner, ANIMO Ventures
  • Allen Miller, VC, Oak HC/FT
  • Sri Muppidi, VC, Sierra Ventures
  • Christian Lassonde, VC, Impression Ventures

Plaid CEO touts new ‘clarity’ after failed Visa acquisition

Zach Perret, chief executive officer and co-founder of Plaid Technologies Inc., speaks during the Silicon Slopes Tech Summit in Salt Lake City, Utah, U.S., on Friday, Jan. 31, 2020. The summit brings together the leading minds in the tech industry for two-days of keynote speakers, breakout sessions, and networking opportunities. Photographer: George Frey/Bloomberg via Getty Images

Zach Perret, chief executive officer and co-founder of Plaid Technologies Inc., speaks during the Silicon Slopes Tech Summit in Salt Lake City, Utah, U.S., on Friday, Jan. 31, 2020. The summit brings together the leading minds in the tech industry for two-days of keynote speakers, breakout sessions, and networking opportunities. Photographer: George Frey/Bloomberg via Getty Images

Alex Wilhelm interviewed Plaid CEO Zach Perret after the Visa acquisition was called off to learn more about his mindset and the company’s short-term plans.

Perret, who noted that the last few years have been a “roller coaster,” said the Visa deal was the right decision at the time, but going it alone is “once again” Plaid’s best way forward.

2021: A SPAC odyssey

In Tuesday’s edition of The Exchange, Alex Wilhelm took a closer look at blank-check offerings for digital asset marketplace Bakkt and personal finance platform SoFi.

To create a detailed analysis of the investor presentations for both offerings, he tried to answer two questions:

  1. Are special purpose acquisition companies a path to public markets for “potentially-promising companies that lacked obvious, near-term growth stories?”
  2. Given the number of unicorns and the limited number of companies that can IPO at any given time, “maybe SPACS would help close the liquidity gap?”

Flexible VC: A new model for startups targeting profitability

12 ‘flexible VCs’ who operate where equity meets revenue share

Spotlit Multi Colored Coil Toy in the Dark.

Spotlit Multi Colored Coil Toy in the Dark.

Growth-stage startups in search of funding have a new option: “flexible VC” investors.

An amalgam of revenue-based investment and traditional VC, investors who fall into this category let entrepreneurs “access immediate risk capital while preserving exit, growth trajectory and ownership optionality.”

In a comprehensive explainer, fund managers David Teten and Jamie Finney present different investment structures so founders can get a clear sense of how flexible VC compares to other venture capital models. In a follow-up post, they share a list of a dozen active investors who offer funding via these non-traditional routes.

These 5 VCs have high hopes for cannabis in 2021

Marijuana leaf on a yellow background.

Image Credits: Anton Petrus (opens in a new window) / Getty Images

For some consumers, “cannabis has always been essential,” writes Matt Burns, but once local governments allowed dispensaries to remain open during the pandemic, it signaled a shift in the regulatory environment, and investors took notice.

Matt asked five VCs about where they think the industry is heading in 2021 and what advice they’re offering their portfolio companies:

Apple adds 'Privacy' collection to iOS Tips app

Apple this week expanded the first-party iOS Tips app to include a section covering hardware, software, and account privacy.

The new Privacy collection consists of nine tips covering Sign in with Apple, Safari passwords, system-wide password security, camera and mic usage indicators, Messages previews, location, Photos, Private Browsing in Safari, and Safari’s Privacy Report feature.

Starting with Safari, Apple notes the web browser can create and remember passwords for specific websites. Users can elect to rely on iPhone’s Strong Password generation or type in their own for later recall.

On the same topic, Apple includes a Security Recommendations tool in Settings that alerts users to weak or compromised passwords. The feature is applicable to passwords stored in iCloud Keychain. A Privacy Report is also available to review which trackers Safari is actively blocking.

Private Browsing in Safari can be enabled by tapping on the Private Browsing tab, which allows users to surf the web without leaving tracks on their device. When a Private Browsing tab is closed, the browser deletes its browsing and search history.

Moving on to more recent additions to iOS, Sign in with Apple was introduced last year as a safe and secure log-in option for participating websites and apps. Users can use an Apple ID to create accounts without manually forging a password, and are able to mask their email address from third-party services.

Hardware level privacy tips include an explainer on the green or orange indicator dots that appear at the top of an iOS device’s screen when its camera or microphone are being accessed. Apple reminds users that they can see which app is tapping into the phone’s audio or visual feed by swiping down from the top right of the display.

The latest versions of iOS also give users more control over location preferences. For example, apps can be denied access to a handset’s precise location by toggling the option off in Location Services.

Finally, Apple notes users can hide Messages previews that appear on the lock screen through an option in Notification settings. Similarly, pictures can be selected and hidden from public view in the Photos app.

Apple introduced the Tips app in iOS 8 and has continuously updated the title to highlight new features with each subsequent operating system release.

Facebook blocks new events around DC and state capitols

As a precaution against coordinated violence as the US approaches President-elect Joe Biden’s inauguration, Facebook announced a few new measures it’s putting in place.

In a blog post and tweets from Facebook Policy Communications Director Andy Stone, the company explained that it would block any events slated to happen near the White House, the U.S. Capitol or any state capitol building through Wednesday.

The company says it will also do “secondary” sweeps through any inauguration-related events to look for violations of its policies. At this point, that includes any content connected to the “Stop the Steal” movement perpetuating the rampant lie that Biden’s victory is illegitimate. Those groups continued to thrive on Facebook until measures the company took at the beginning of this week.

Facebook will apparently also be putting new restrictions in place for U.S. users who repeatedly break the company’s rules, including barring those accounts from livestreaming videos, events and group pages.

Those precautions fall short of what some of Facebook’s critics have called for, but they’re still notable measures for a company that only began taking dangerous conspiracies and armed groups seriously in the last year.

GitLab oversaw a $195 million secondary sale that values the company at $6 billion

GitLab has confirmed with TechCrunch that it oversaw a $195 million secondary sale that values the company at $6 billion. CNBC broke the story earlier today.

The company’s impressive valuation comes after its most recent 2019 Series E in which it raised $268 million on a 2.75 billion valuation, an increase of $3.25 billion in under 18 months. Company co-founder and CEO Sid Sijbrandij believes the increase is due to his company’s progress adding functionality to the platform.

“We believe the increase in valuation over the past year reflects the progress of our complete DevOps platform towards realizing a greater share of the growing, multi-billion dollar software development market,” he told TechCrunch.

While the startup has raised over $434 million, this round involved buying employee stock options, a move that allows the company’s workers to cash in some of their equity prior to going public. CNBC reported that the firms buying the stock included Alta Park, HMI Capital, OMERS Growth Equity, TCV and Verition.

The next logical step would appear to be IPO, something the company has never shied away from. In fact, it actually at one point included the proposed date of November 18, 2020 as a target IPO date on the company wiki. While they didn’t quite make that goal, Sijbrandij still sees the company going public at some point. He’s just not being so specific as in the past, suggesting that the company has plenty of runway left from the last funding round and can go public when the timing is right.

“We continue to believe that being a public company is an integral part of realizing our mission. As a public company, GitLab would benefit from enhanced brand awareness, access to capital, shareholder liquidity, autonomy and transparency,” he said.

He added, “That said, we want to maximize the outcome by selecting an opportune time. Our most recent capital raise was in 2019 and contributed to an already healthy balance sheet. A strong balance sheet and business model enables us to select a period that works best for realizing our long-term goals.”

GitLab has not only published IPO goals on its Wiki, but its entire company philosophy, goals and OKRs for everyone to see. Sijbrandij told TechCrunch’s Alex Wilhelm at a TechCrunch Disrupt panel in September that he believes that transparency helps attract and keep employees. It doesn’t hurt that the company was and remains a fully remote organization, even pre-COVID.

“We started [this level of] transparency to connect with the wider community around GitLab, but it turned out to be super beneficial for attracting great talent as well,” Sijbrandij told Wilhelm in September.

The company, which launched in 2014, offers a DevOps platform to help move applications through the programming lifecycle.

Update: The original headline of this story has been changed from ‘GitLab raises $195M in secondary funding on $6 billion valuation.’