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Friday, February 14, 2020

Today Crunch News, News Updates, Tech News

Today Crunch News, News Updates, Tech News

Astronomers warn of ‘worrisome’ light pollution from satellite constellations

Posted: 14 Feb 2020 02:53 PM PST

The International Astronomical Union has issued the preliminary results from a study on the potential effects of multi-thousand satellite constellations like that being built by StarLink. Finding that Earth-based astronomical observations may be “severely affected,” the body warned that mitigations and rules had better be formed sooner rather than later.

The group expressed its concerns last summer, but undertook a broader study and survey of possible effects, asking various observatories and organizations to chime in. The general feeling is one of “hope for the best, but prepare for the worst.”

According to the IAU’s estimates, once there are tens of thousands of satellites in low Earth orbit, somewhere around 1,500 will be above the horizon at any given time, though fewer (250-300) would be more than 30 degrees above it, in the area usually observed by astronomers.

“The vast majority” will be too faint to be seen by the naked eye except during specific periods when the sun’s light is more likely to reflect off their surfaces — in the early hours of darkness, generally. Measures are being taken to reduce the visibility and reflectivity of these supernumerous satellites, but we won’t be sure how effective they are until they’re up there, at which point of course it is too late to do anything about it.

More “worrisome,” as the IAU puts it, is the potential effect on wide-field observations like the Large Synoptic Survey Telescope’s (lately renamed the Rubin Observatory). Almost a third of 30-second exposures done by such telescopes could be affected by satellites overhead, which will be far more visible to their sensitive instruments.

There may be ways around this, but it’s hard not to read a sense of frustration into the IAU’s statement:

In theory, the effects of the new satellites could be mitigated by accurately predicting their orbits and interrupting observations, when necessary, during their passage. Data processing could then be used to further "clean" the resulting images. However, the large number of trails could create significant and complicated overheads to the scheduling and operation of astronomical observations.

In other words, if the operators of these constellations refuse to do anything about it, there are at least things we can do. But they won’t be without cost or drawbacks.

This is all strictly relating to visible light issues; possible interference with observations of radio-frequency and other invisible radiation due to the transmissions of these constellations is still something of an unknown.

Ultimately, though the IAU’s statement is careful to maintain a veneer of neutrality; it’s clear they’re all rather put out.

“A great deal of attention is also being given to the protection of the uncontaminated view of the night sky from dark places, which should be considered a non-renounceable world human heritage,” they write. “There are no internationally agreed rules or guidelines on the brightness of orbiting man-made objects. While until now this was not considered a priority topic, it is now becoming increasingly relevant. Therefore the IAU will regularly present its findings at the meetings of the UN Committee for Peaceful Uses of Outer Space, bringing the attention of the world government representatives to the threats posed by any new space initiative on astronomy and science in general.”

In other words, they’re not going to quietly sit in their observatories and let a handful of companies clutter up the night sky.

HQ Trivia shuts down after acquisition falls through

Posted: 14 Feb 2020 02:38 PM PST

HQ Trivia is dead. Today the company laid off its full staff of 25 and will cease operation of its trivia, sports and word guessing games, a source close to the company confirmed.

HQ Trivia had a deal in the works to be acquired, but the buyer pulled out yesterday and investors aren’t willing to fund it any longer, CEO and co-founder Rus Yusupov said in a statement attained by CNN Business’ Kerry Flynn:

“We received an offer from an established business to acquire HQ and continue building our vision, had definitive agreements and legal docs, and a projected closing date of tomorrow, and for reasons we are still investigating, they suddenly changed their position and despite our best efforts, we were unable to reach an agreement,” Yusupov writes. “Unfortunately, our lead investors are no longer willing to fund the company, and so effective today, HQ will cease operations and move to dissolution. All employees and contractors will be terminated as of today.”

Launched in October 2017, TechCrunch wrote the first coverage of the 12-question live video trivia game started by two of the former Vine founders. Users could win real money by answering all the questions and not being eliminated in multiple daily games. HQ Trivia had raised more than $15 million, including a Series A led by Founders Fund. At one point it had more than 2.3 million concurrent players.

hq trivia app 1

But eventually the novelty began to wear off. Cheaters came in, splitting the prize money down to just a few dollars or cents per winner. Copycats emerged internationally. Engineering issues led users to get kicked out of the game.

Then tragedy struck. Co-founder Colin Kroll passed away. That exacerbated internal problems at HQ Trivia. Product development was slow, leading users to grow tired of the game. New game types and viral features materialized too late.

A failed internal mutiny saw staffers prepare to petition the board to remove Yusupov from the CEO position. When he caught wind of the plot, organizers of the revolt were fired. Morale sunk. By July 2019, downloads were just 8% of their previous year’s, and 20% of the staff was laid off. HQ managed about 15 million all-time installs, peaking at 2 million in February 2018, while last month it had just 67,000, according to Sensor Tower.

The demise of HQ Trivia demonstrates the fickle nature of the gaming industry, and the startup scene as a whole. Momentary traction is no guarantee of future success. Products must continually evolve and adapt to their audience to stay relevant. And executives must forge ahead while communicating clearly with their teams, even amongst uncertainty, or find their companies withered by the rapid passing of time.

Rocket Lab will launch a satellite to the Moon for NASA to prepare for the Lunar Gateway

Posted: 14 Feb 2020 01:57 PM PST

Launch startup Rocket Lab has been awarded a contract to launch a CubeSat on behalf of NASA for the agency’s CAPSTONE experiment, with the ultimate aim of putting the CAPSTONE CubeSat into cislunar (in the region in between Earth and the Moon) orbit — the same orbit that NASA will eventually use for its Gateway Moon-orbiting space station. The launch is scheduled to take place in 2021.

The CAPSTONE launch will take place at Rocket Lab’s new Launch Complex 2 (LC-2) facility at Wallops Flight Facility in Virginia. Rocket Lab opened its launch pad there officially in December, and will launch its first missions using its Electron vehicle from the site starting later this year.

The launch is significant in a number of ways, including being the second lunar mission to launch from the Virginia flight facility. It’s also going to employ Rocket Lab’s Photon platform, which is an in-house designed and built satellite that can support a range of payloads. In this case, Photon will transport the CAPSTONE CubeSat, which weighs only around 55 lbs, from Earth’s orbit to the Moon, at which point CAPSTONE will fire up its own small engines to enter its target cislunar orbit.

Rocket Lab introduced Photon last year, noting at the time that it is designed in part to provide longer-range delivery for small satellites — including to the Moon. That’s a key capability to offer as NASA embarks on its Artemis program, which aims to return human astronauts to the lunar surface by 2024, and establish a more permanent human presence on and around the Moon in preparation for eventual missions to Mars.

CAPSTONE will play a key role in that mission by acting “as a pathfinder” for the lunar Gateway that NASA eventually hopes to build and deploy.

"CAPSTONE is a rapid, risk-tolerant demonstration that sets out to learn about the unique, seven-day cislunar orbit we are also targeting for Gateway," said Marshall Smith, director of human lunar exploration programs at NASA in a press release. Detailing the news, "We are not relying only on this precursor data, but we can reduce navigation uncertainties ahead of our future missions using the same lunar orbit."

In total, the launch contract with Rocket Lab has a fixed price of $9.95 million, the agency said. NASA expects contractors Advanced Space and Tyvak Nano-Satellite Systems to begin building the CAPSTONE spacecraft this month ahead of its planned 2021 launch.

Vodafone Idea shares tumble 23% after India orders it to pay billions in dues

Posted: 14 Feb 2020 01:49 PM PST

Shares of Vodafone Idea fell by more than 23% on Friday after India's apex court ordered the country's second-largest telecom operator and Airtel, the third-largest telecom network, to arrange and pay billions of dollars in dues in a month.

In a strongly worded judgement, the Supreme Court rejected telecom networks' application to defer paying historic $13 billion levies to the government. “This is pure contempt, 100% contempt,” Justice Arun Mishra told lawyers.

The order today, which may result in U.K. telecom giant Vodafone's local joint venture's collapse, saw Vodafone Idea's shares plunge by 23.21%. Vodafone Idea had more than 336 million subscribers as of November last year, according to official figures (PDF).

The company did not respond to a request for comment.

The Supreme Court's order was followed by direction from the Department of Telecoms to pay the dues by the end of Friday. The local ministry of telecommunications also ordered the telecom companies to keep their relevant offices open on Saturday to "facilitate" payments and answer queries.

In October, the Supreme Court ruled that Vodafone Idea and Bharti Airtel, as well as several other operators, including some that are no longer operational, will have to pay the government within 90 days a combined $13 billion in adjusted gross revenue as spectrum usage charges and license fees.

The Indian government and telecom operators have for a decade disputed how gross revenue should be calculated. The government has mandated the license and spectrum fee to be paid by operators as a share of their revenue. Telcos have argued that only core income accrued from use of spectrum should be considered for calculation of adjusted gross revenue.

Commenting on the ruling, Airtel said that it would pay $1.3 billion by next week and the remainder (about $5 billion) before March 17, when the Supreme Court hears the case again. Its shares rose 4.69% on Friday as the telecom operator is in a better position to pay and the prospects of it being only the second major telecom network to fight Reliance Jio, the top network run by India's richest man Mukesh Ambani .

In recent months, executives of U.K.-headquartered Vodafone, which owns 45% of Vodafone Idea, have said that the group's telecom business in India would "shut shop" if the government does not offer it any relief. Vodafone Idea, which is already saddled by $14 billion in net debt, owes about $4 billion in levies to the Indian government.

Vodafone Idea Chairman Kumar Mangalam Birla said in December that the firm is headed toward insolvency in the absence of a relief from the government. “It doesn't make sense to put good money after bad,” he said then.

The last few years have been difficult for telecom operators in India, which arrived in the nation to secure a slice of the world’s second most populous market. But since 2016, they have lost tens of millions of subscribers after Ambani launched Reliance Jio and offered free data and voice calls for an extended period of time, forcing every other company to slash their tariffs.

Sidharth Luthra, a senior advocate at Supreme Court, said in a televised interview that the court is within its rights to reach such a decision, but said that perhaps they should have considered the economic consequences of the ruling that would impact jobs, and could disrupt the everyday lives of people who rely on a network's services.

Vodafone Idea is the top trending topic on Twitter as of early Saturday (local time), as numerous people expressed concerns about the future prospects of the telecom network and worried if the service would remain operational for them.

Class action suit against Clearview AI cites Illinois law that cost Facebook $550M

Posted: 14 Feb 2020 12:35 PM PST

Just two weeks ago Facebook settled a lawsuit alleging violations of privacy laws in Illinois (for the considerable sum of $550 million). Now controversial startup Clearview AI, which has gleefully admitted to scraping and analyzing the data of millions, is the target of a new lawsuit citing similar violations.

Clearview made waves earlier this year with a business model seemingly predicated on wholesale abuse of public-facing data on Twitter, Facebook, Instagram and so on. If your face is visible to a web scraper or public API, Clearview either has it or wants it and will be submitting it for analysis by facial recognition systems.

Just one problem: That’s illegal in Illinois, and you ignore this to your peril, as Facebook found.

The lawsuit, filed yesterday on behalf of several Illinois citizens and first reported by Buzzfeed News, alleges that Clearview “actively collected, stored and used Plaintiffs’ biometrics — and the biometrics of most of the residents of Illinois — without providing notice, obtaining informed written consent or publishing data retention policies.”

Not only that, but this biometric data has been licensed to many law enforcement agencies, including within Illinois itself.

All this is allegedly in violation of the Biometric Information Privacy Act, a 2008 law that has proven to be remarkably long-sighted and resistant to attempts by industry (including, apparently, by Facebook while it fought its own court battle) to water it down.

The lawsuit (filed in New York, where Clearview is based) is at its very earliest stages and has only been assigned a judge, and summonses sent to Clearview and CDW Government, the intermediary for selling its services to law enforcement. It’s impossible to say how it will play out at this point, but the success of the Facebook suit and the similarity of the two cases (essentially the automatic and undisclosed ingestion of photos by a facial recognition engine) suggest that this one has legs.

The scale is difficult to predict, and likely would depend largely on disclosure by Clearview as to the number and nature of its analysis of photos of those protected by BIPA.

Even if Clearview were to immediately delete all the information it has on citizens of Illinois, it would still likely be liable for its previous acts. A federal judge in Facebook’s case wrote: “the development of face template using facial-recognition technology without consent (as alleged here) invades an individual's private affairs and concrete interests,” and is therefore actionable. That’s a strong precedent and the similarities are undeniable — not that they won’t be denied.

You can read the text of the complaint here.

Tinder founder funds sex tips app Lover

Posted: 14 Feb 2020 12:26 PM PST

Want to spice up the bedroom without paying for pills or awkward visits to a sex therapist? A new app called Lover lets you take a sexual personality quiz, explore carnal knowledge tutorials and discretely figure out which turn-ons you share with your partner. Built by board-certified sexual medicine clinical psychologist Dr. Britney Blair, Lover launches today on iOS with $5 million in seed funding from Tinder founder Sean Rad and other investors.

“It is strange that there are such taboos around sex when it is something we all do…whether we enjoy ourselves or not. We think it is time to start the conversation around this important aspect of our health,” says Dr. Blair. “We believe Lover can help build confidence, facilitate communication, improve partner connection and just raise consciousness about sex and sexuality.”

A solid portion of Lover’s content is free for the first seven days, including audio guides to oral sex, video explainers on how to be generous in bed and multi-step “playlists” of content like “Getting Hard, Made Easy.” Lover charges $9.99 per month or $59.99 per year for continued access to themed educational materials like “Coreplay Not Foreplay” and “Fantasy To Reality” that are recommended based on the results of your sexual questionnaire.

Almost 50% of women and 40% of men have a sexual complaint . . . [but] most people don't realize how common and treatable their issues are,” Dr. Blair tells me. “In our [pre-launch tests] focused purely on erectile dysfunction, 62% of users reported improvements to their erections within three weeks of using the app. That's pretty wild when you think Viagra's efficacy rate is approximately 65% and it lasts only five hours.”

Startups like digital pharmacy Ro have scored $500 million valuations just 18 months after launch by prescribing and selling men’s health drugs like Viagra. Lover sees a market for education-based alternative approaches to sexual wellness.

Lover co-founders (from left): Jas Bagniewski, Dr. Britney Blair and Nick Pendle

Dr. Blair got interested in the space a decade ago after a Stanford grad school lecture illuminated how prevalent sexual problems are but how quickly they can be resolved with learning and communication. She teamed up with her CEO Jas Bagniewski, who’d been the manager of Europe’s largest e-commerce business, Zalando in the U.K., and a founder of City Deal that sold to Groupon. Bagniewski and fellow Lover co-founder Nick Pendle started European Casper mattress competitor Eve Sleep and brought it to IPO.

The plan is to combine Dr. Blair’s educational materials with Bagniewski and Pendle’s e-commerce chops to monetize Lover through subscriptions and eventually recommending products like sex toys for purchase. Now they have $5 million in seed funding led by Lerer Hippeau, and joined by Manta Ray Ventures, Oliver Samwer’s Global Founders Capital, Fabrice Grinda and Jose Marin. The cash will go toward building out an Android app and adding games that partners can play together in bed.

There are plenty of random sex tip websites out there. Lover tries to differentiate itself by personalizing content based on the results of a Myers-Briggs-esque quiz. This asks you how adventurous, communicative and assertive you are. You then receive a classification like “The Muse” with a few pages of explanation, for example, revealing how you like to inspire others while being the center of attention.

From there, Lover can suggest guides for mastering your own sexual personality or branching out into new behavior patterns. There’s also a feature copied from another app called XConfessions for figuring out what you and your partner like. You connect your apps and then separately swipe yes or no on questions about whether you’d like “having your partner drip candle wax on you” or “your partner dressing as a strict cop.” If you and they match, the app tells you both so you can try it out.

Overall, Lover’s content is a lot higher quality and more compassionate than where most people learn about sex: pornography. Having a real sexual medicine doctor overseeing the app lends credibility to Lover. And the design and tone throughout make you feel empowered rather than sleazy.

Still, Dr. Blair admits that “it's hard to motivate people into behavioral change, people already have subscription apps on their phones and we may run into ‘subscription fatigue.’ ” People might feel natural paying for Viagra because the impact is obvious. The value of a subscription to sex tips might seem too vague or redundant to what’s free online.

To get a lot of users opening their wallets, not just their pants, Lover will need to do a better job of previewing what’s behind the paywall, and offering more interactivity that online content lacks. But if it can give users one unforgettable night thanks to its advice, it may be able to seduce them for the long-run.

SpaceX’s Crew Dragon is now in Florida to prep for its first flight with astronauts onboard

Posted: 14 Feb 2020 11:53 AM PST

SpaceX has moved its Crew Dragon commercial astronaut spacecraft to Florida, the site from which it’ll launch in likely just two to three months if all goes to plan. The Crew Dragon capsule is now going to undergo final testing and checkouts in Florida before its departure from Cape Canaveral Air Force Station, where it’ll launch atop a Falcon 9 rocket, with NASA astronauts Bob Behnken and Doug Hurley onboard.

Behnken and Hurley will be taking a trip to the International Space Station (ISS) courtesy of the Crew Dragon, as part of a demonstration mission codenamed “Demo-2” by SpaceX and NASA that will serve as a key step in the ultimate verification of the spacecraft for regular service carrying people to and from the ISS. SpaceX’s Crew Dragon is one of two spacecraft that aim to achieve this operational status for NASA, alongside the Boeing Starliner CST-100 crew vehicle, which is undergoing development and testing.

Boeing’s spacecraft has recently encountered some issues that could extend its testing timeline and set back its goals of performing its first flights with astronauts onboard. The Starliner encountered two potentially serious software issues during an uncrewed demonstration mission that took place in December, and now NASA and the company are determining corrective action, including safety reviews of Boeing and its software development and testing processes.

Meanwhile, SpaceX performed an in-flight abort test in January, the last major demonstration it needed to do before moving on to the crewed demo mission. That test was by all accounts a success, showing how the Crew Dragon would separate and distance itself from the launch craft in case of an unexpected error, in order to safeguard the astronauts onboard.

SpaceX has been sharing details of its preparation for this final planned demo before operational commercial crew flights, tweeting earlier this week about its spacecraft undergoing ultrasonic testing. Currently, the Demo-2 mission is tentatively set for May 2, though that date is said to be flexible and could be moved up or pushed to later, depending on mission needs and remaining preparation progress.

General Catalyst leads $6 million investment in team productivity startup Range

Posted: 14 Feb 2020 11:45 AM PST

In case you haven’t heard, VCs are loving on workplace software as of late, and productivity tools that help teams collaborate seem to be a particular frothy area of investment. A smattering of top VC firms and angels, including General Catalyst, First Round Capital, Bloomberg Beta, Biz Stone and Ellen Pao, are throwing their confidence behind a new productivity startup called Range.

The tool is focused around helping small teams collaborate, grow closer and track their work together. There are quite a few startups with this exact pitch, Range’s key advantage seem to sit with their founding team, which is helmed by Medium’s former head of engineering Dan Pupius, Jennifer Dennard (people ops at Medium) and Braden Kowitz, who was a design partner at GV. The company has used their network to build out an early network of customers, including teams at Twitter, Carta and Mozilla, as well as a network of VCs that are bankrolling their efforts.

The SF-based team tells me they have locked down $6 million in seed funding led by General Catalyst as they look to expand their customer base. I chatted with the very nice team of co-founders over a Zoom call and got to see how they used the product internally.

“I left Google to join Medium with [Ev Williams and Biz Stone], and we were experimenting with a bunch of different organizational practices, really trying to answer the question of why do companies get worse as they get bigger and could we deploy different management practices at Medium in order to prevent that issue,” Pupius told TechCrunch. “Through that journey we started building internal tools and we kind of saw this opportunity for software to intentionally encode a lot of the organizational processes or values, and then towards the end of my tenure at Medium, I reconnected with Braden and Jen and we just essentially decided to tackle the problem together.”

The core of the product is a bit of a replacement to stand-ups, prompting each user to note what they’re working on every morning, which they can tag to existing larger projects and which is then all interconnected and viewable by members of the specific Range team. The need for a product like this really highlights one of Slack’s big limitations, where even with threads, there really isn’t a great way for communications to be organized in a digestible manner. Every update in Slack drives a conversation that pushes salient info further up the history into obscurity, something that can especially harm remote teams.

Beyond check-ins, Range is also helping teams keep track of their objectives and meetings as well as team directories. The product has integration support with Google Docs, Google Calendar, Slack, Asana, Jira, GitHub, Trello, Quip, Figma and others to ensure that information isn’t getting further siloed by adding a new piece of productivity software to the mix. The product has a startup-friendly pricing structure; it’s free for teams under 10 and each additional member costs $14 per month. Pricing obviously gets a bit more customized when it comes to larger customers.

Range will likely draw some comparisons with Notion from an organization standpoint, though it also feels much more smoother as a result of being less open-ended. One of the more unique aspects of the product is that the top of the home screen isn’t centered on OKRs or analytics, rather it asks team members a new question every day meant to foster further bonding, and asks them to describe how they’re feeling with an emoji. It’s kind of silly, but the team hopes that short bursts of introspection can push teams closer together in subtle ways that collaboration software doesn’t usually enable.

“We found that people are doing really cool things but they’re not talking to each other about it,” Dennard told TechCrunch. “And so one of the advantages we have as a company is that we can actually help create that community for people.”

Married co-founders are a startup’s secret weapon

Posted: 14 Feb 2020 10:52 AM PST

"If I was running Clearbanc by myself, it probably would have gone off the cliff eight times at this point," says Clearbanc co-founder Andrew D’Souza. 

"If I were running the company by myself, it would be half its size," adds Michele Romanow, Clearbanc’s other co-founder.

In addition to starting the $420 million-backed fintech company together, D'Souza and Romanow are in a relationship.

The two initially met at an event in San Francisco, and followed up with a friendly informational interview at a Mexican restaurant. D'Souza’s fundraising experience was a draw for Romanow, who at the time was looking for information about how to raise cash for her startup. Romanow ended up selling her company to Groupon, but her conversation with D'Souza helped to anchor the valuation. It was also the beginning of a relationship. 

When they started dating in 2014, they swapped war stories about company building. Their connection hinged on this initial commonality — D'Souza had fundraised all his businesses, whereas Romanow had bootstrapped. It was from these conversations that they created Clearbanc, the Canada-based VC firm that specializes in non-dilutive revenue share agreements for startups.

Startups with coupled co-founders at the helm are scoring big funding rounds and exiting companies. Julia and Kevin Hartz co-founded Eventbrite, which went public on the New York Stock Exchange in 2018. Married couple Diane Greene and Mendel Rosenblum were on the co-founding team of VMware, which sold to Dell in 2015. The bond of a relationship may be a secret weapon in company building for new-wave tech startups, but that doesn’t come without risks, like co-founder disharmony, equity supermajority and even divorce.

Clearbanc founders Andrew D’Souza and Michele Romanow

“Just put the phone down.”

Talk to anyone with a co-founder title at a startup and you’ll find one trend: free time is nearly nonexistent. Couples running a business together say it’s advantageous to be on the same workday cycle. "When you're working on the same business, you're on the same cadence of when things are blowing up,” says Romanow. “So I know exactly why Andrew is on his phone. I know that if he doesn’t do this, I will have to do it." 

NEXT Trucking co-founders Lidia Yan and Elton Chung have raised $125 million total for their logistics startup, including a $97 million Series C from Brookfield and Sequoia. The pair says that the company is a presence that's fully built into their lives and their relationship at all times. While that may be great for a business, it’s not always great for their marriage. "We got into a momentum of talking about work all the time. Not only at the office but at home," says Yan. The solution is a simple rule enforced by an iPhone alarm. All work-related talk must cease after 8pm every day after the alarm goes off. They also use free time on the weekends to go to restaurants in LA, one of their shared passions. 

NEXT Trucking co-founders Lidia Yan and Elton Chung

Co-founder couples say that if you're scaling a company, you'll have to be okay with putting other life decisions on hold, like going on your honeymoon or having kids. 

Leslie Voorhees and Calley Means were married in 2016, but still haven't taken their honeymoon. They co-founded Anomalie, a wedding dress customization startup that has raised $18.1 million. Instead of vacationing to Bora Bora the day after their wedding, the newlywed founders hopped on a plane to China, where Leslie stayed for a couple of months to set up the supply chain for Anomalie. The couple admits that even now, they don't make time for their personal lives.

"We have not spent more than an hour of our entire marriage not talking about wedding dresses. It's not necessarily the healthiest thing, but we've enjoyed obsessing about wedding dresses every day," says Leslie.

Their skills complement each other: Calley's superpower is that he can move fast, whereas Leslie is more methodical and good at setting up structure. While they say that being a co-founder couple has strengthened their bond, they're working on setting boundaries. Being a founder means you have to sacrifice other areas of your life for the company. 

“Once we raise the Series D, we'll start thinking about having kids," jokes Calley — in what may not actually be a joke. 

Leslie Voorhees and Calley Means, Anomalie co-founders

Investors are warming up to married co-founders

Clearbanc wants to make it easier and faster for startups to raise growth capital. Their 20-minute term sheet product is meant to help founders raise money in 20 minutes, rather than the traditional 3 to 6 months the process typically takes. But how did investors react to Clearbanc’s co-founders relationship status? Not well, at first. 

A Clearbanc investor passed on an early round, explaining to D’Souza and Romanow that they would have backed either of them individually, but that they were worried about backing them as a couple, especially since they had only been dating for a year at that point.

"The same investor ended up coming in two rounds later at 100 times the valuation," says D'Souza. This, they felt, proved that fear of investing in a couple was a false sense of increased risk.

It seems investors today agree. When the married co-founders of Apli, a Mexico-based on-demand recruiting platform, walked into the office of ALLVP, the fund wasn’t entirely sure about what it meant to invest in a company run by a married couple.

Founders Vera and Jose met while studying together at Harvard Business School before working at two separate Rocket Internet companies in Mexico and foundling Apli. The business model, product market fit and potential impact for the company were typical factors the fund mulled over before writing a check, but ALLVP also considered the founders’ married status.

"After some discussion, we decided to analyze the team as any other founding team," says ALLVP partner Federico Antoni. Besides the obvious personal chemistry, there was a professional chemistry between Vera and Jose. "We weighed the risk of divorce and decided to take it. We gained a team fully invested in the company and one that could balance personal life and startup life." 

Equity could pose another risk factor. Investors could be wary of founder couples depending on the equity structure. If their finances are combined, a co-founder couple could own a supermajority of a startup. Say two non-married founders owned 20% of a company — a co-founder couple whose finances are tied together would own 40%. Given this logic, VCs would inherently have more negotiating power if the founders aren’t financially linked.

VCs I talked to didn’t necessarily agree with that logic, though.

"The only thing with equity that matters to me is if the founders have enough,” says Andreessen Horowitz General Partner David Ulevitch. “Venture capital investments are inherently minority investments, so it's really just about ensuring founders are motivated and rewarded for building something enduring." 

But what happens when the dual identities of co-founder and spouse don’t work?

Divorce won’t necessarily be the demise of a startup

Sara and Josh Margulis founded Honeyfund, a honeymoon registry site, in 2006. The then-married couple appeared on Shark Tank in 2015, winning an investment from Kevin O'Leary. Sara says that Honeyfund is different from popular wedding startups like Zola and The Knot in that the core product is a crowdfunding platform enabling newly engaged couples to organize wedding and honeymoon financing. 

When Sara and Josh divorced in 2019, the first instinct was to sell the company. However, "the more we pulled apart professionally, the more opportunities I saw to organize the team the way I wanted to and push the priorities that I wanted," Sara says. Ultimately, Sara decided she would buy her ex-husband out of the company and continue on a new trajectory as CEO. 

"If we hadn’t been working together, our separation process would have been different. There were truths that needed to be spoken that were emotionally difficult in a marriage, that I didn't want to put on Josh in the middle of a big Target partnership launch."

The genesis of their business was rooted in their own experience as a married couple. They'd won the affection of Sharks, operating in a $72 billion industry hinging on the commoditization of love and lasting marriage. But the honeymoon phase can’t last forever. Up to 50% of married couples in the United States will split, according to the American Psychological Association.  

Now, Margulis’ experience of divorcing her co-founder is informing new products and a marketing strategy as she continues to iterate on her startup.

Post-divorce, Margulis has been working on a content-focused strategy at Honeyfund that will include a book and a podcast centered around the idea of how couples can successfully navigate marriages. She’s sourcing 14 years’ worth of Honeyfund couples to be interviewed, along with research from psychologists and marriage experts to help couples avoid the doom she went through. 

The secret weapon

Co-founder couples are the first to eagerly point out an obvious advantage. Aligned passions, equal motivation, complementary skillsets and industry experience are a baseline for any co-founder relationship, married or non-married. But being married to your co-founder includes unique challenges like time management and setting boundaries in the boardroom and in the bedroom.

“Co-founder disputes are the number one early startup killer, but it doesn’t have to be that way,” writes Garry Tan, managing partner at Initialized Capital and former Y Combinator partner.

Co-founders aren't always aligned on big decisions at the company. Is remote work allowed? Who do we accept funding from and how do we deploy capital? Who do we hire for a key executive role?

There are plenty of things to fight about when the stakes are high and your employees’ careers are at risk. And co-founder disharmony has been a key reason many startups flounder. But being proactive about conflict management rather than avoiding it is key — as is knowing when to get professional help from an executive coach or a therapist. This could help early-stage companies recalibrate and dodge turmoil. 

If this line of reasoning holds, co-founder couples may be at an advantage because they already have built-in communication tools in their relationship.

Ulevitch says that for him, couples as co-founders is not a turn off.

“Lots of co-founding teams fall apart, and it's often to not really knowing each other very well, especially when the going gets tough. Couples actually solve for that aspect nicely." Founders certainly back up this assertion. 

"One of the company values is to disagree and commit," says NEXT Trucking’s Lidia Yan. In what she describes as a rare occasion when executives are not aligned on a decision, she says that a vote will take place, and then the team will all commit to the final decision. In order to mitigate risk, founders say it’s key to have well-defined job descriptions. Stay in your zone, and because you are partners, you should already trust each other with what each person is specialized at. 

Being married to your co-founder is a secret weapon, according to Helena Price Hambrecht and Woody Hambrecht.

Haus co-founders Helena Price Hambrecht and Woody Hambrecht

Helena and Woody met during the pre-swipe era on OkCupid in 2012. "I had just joined the online dating space and saw this hot farmer dude. We were a 96% match, so I messaged him," says Helena of how she first connected with her future husband. 

"I literally thought someone was catfishing me," thought Woody upon reading Helena's message. "There's no way this person is writing me. It took me three or four times to write her back because I wasn't sure if she was a real person." 

After some back and forth, the two met at a dive bar in the San Francisco Richmond neighborhood on a date that culminated in drinking 40s and watching rap videos on their phones in the park. "It's kind of hard to explain, but it was just so easy. We knew we were going to know each other for the rest of our lives. Maybe as friends, maybe more, we didn't know." They stayed friends for four years, and were married in 2018. 

Haus' genesis was a combination of the founders’ backgrounds, and the direct-to-consumer aperitif brand just scored a $4.5 million seed round. Woody owned a wine and aperitif brand but felt that he wasn’t making a big enough impact. Helena, a Silicon Valley branding and production veteran, felt that Gen Z didn’t want to get drunk anymore, and millennials are tired of compulsory, expensive happy hours. In deciding where to put their money, younger consumers are thinking about their bodies, brand image, transparency, sustainability and authenticity.

Helena wondered why the same standards aren’t being applied to as big of an industry as liquor. Why was there not a Glossier or Everlane of alcohol? She felt that while there's a massive opportunity with all these shifting consumer trends, no one can make a direct-to-consumer alcohol brand. Haus was born from what the founders say was a magic "techie married a wine maker" moment. Woody knew about a legal loophole that could allow the couple to build the Glossier of alcohol. 

“There's this tiny sliver in the aperitif realm, where if a beverage is made of mostly grapes and is under 24% alcohol, it can be classed as a wine and sold DTC,” explains Helena. They had that idea when they had a three-month-old baby. "We do not have time to do this but we have to do it because it's the best idea we'll ever have in our life," she says. 

"We have a tool kit. We are married. If we have a disagreement about something, we are going to work it out because we're married. Our skillsets are so clearly defined so there's not much friction. For us it’s this cool balance where we have two totally separate camps of expertise,” remarks Helena. 

Woody and Helena have another secret weapon. They work with a business coach who has a background in psychotherapy, and believe that all co-founders should go to therapy together, because it’s always deeper than just business. 

Talkspace founders Roni and Oren Frank

Talkspace’s Roni and Oren Frank would agree. Their journey to the mental health world started from a crisis within their own relationship.

"Our marriage was falling apart, and we eventually decided to give it a last chance in couples therapy." It was the first time either of them had experienced therapy. It taught them how to communicate better, read each other and support each other better. It gave them tools to manage conflict. 

Therapy inspired Roni to leave her career as a software developer and go back to graduate school to study psychology. While studying, she says she was exposed to how broken the mental health system in America is.

Roni says that research showed 25% of Americans suffer from mental health complications, yet an entire two-thirds of that bucket has no access to mental health care. The two founders both felt passionate about fixing this problem based on how instrumental therapy was in rescuing their own marriage. They decided to launch a platform that lets patients and therapists communicate online. 

Talkspace, which wants to open access to mental healthcare, has now raised $110 million, most recently a $50 million Series D. The product ideation for the company was integral to the relationship, and the company now has more than 100 employees. But when Talkspace was a young, 10-person startup, it was a lot harder. Roni notes that the co-founder relationship provoked extreme anxiety.

"I didn’t sleep well, I didn’t eat well and I experienced burnout." She says she had to force herself to place boundaries when it comes to being consumed with work. However, overall, her experience has been that sharing a mission and a goal empowers the marriage, a healthy inverse.

Co-founder couples rave about the experience of running a business with their spouse. It’s no doubt these companies are developing proprietary products, running winning marketing strategies and generating big rounds and exits.

The married co-founder dynamic appears to be great for business, but time will tell if it works as equally well for marriages.

6 strategic stages of seed fundraising in 2020

Posted: 14 Feb 2020 10:17 AM PST

Seed fundraising is rarely easy, but it certainly used to be a lot less complicated than it is today. In a simpler world, a seed investor (or maybe two) would lead a round, which meant that they would write the terms of the deal in a term sheet and then pass that document to their friends to flesh out the funds and eventually close the round. That universe of investors was small and (unfortunately) often cliquish, but everyone sort of knew each other and founders always knew at least who to start with in these early fundraises.

That world is long since gone, particularly at the seed stage. Now there are thousands of people who write checks into the earliest startup venture rounds, making it increasingly challenging for founders to find the right investors. "Pre-seed," "seed," "post-seed," "seed extension," "pre-Series A" and more terms get batted about, none of which are all that specific about what kinds of startups these investors actually invest in.

Worse, obvious metrics in the past that helped stack-rank investors — like size of potential check — have come to matter far less. In their place are more nuanced metrics like the ability to accelerate a deal to its closing. Today, your greatest lead investor may be the one who ends up writing the smallest check.

Given how much the landscape has changed, I wanted to do two things for founders thinking through a seed fundraise. First, I want to talk about how to strategize around a seed fundraise today, given the radical changes in the market over the past few years. Second, I want to talk about a couple of the archetypes of startup stages you see in the market today and discuss how to handle each of them.

This article focuses on "conventional" seed fundraising and doesn't get into a bunch of alternative models of VC that I intend to explore in the coming weeks. If you thought traditional seed investing is complicated, wait until you see what the alternatives look like. The upshot, though, is that founders with the right strategy have more choices than ever, and, ultimately, that means there are more efficient ways to use capital to get the desired outcome for your startup.

Thinking through a seed fundraise strategy

Let's get some preliminaries out of the way. This discussion assumes that you are a startup, looking to fundraise a seed round of some kind (i.e. you're not looking to bootstrap your company) and that you are looking to close some sort of conventional venture capital round (i.e. not debt, but equity).

The problem with most seed fundraising advice is that it isn't tailored to the specific stage of the startup under discussion. As I see it, there are now roughly six stages for startups before they reach scale. Those stages are:

Why startups are raising more venture debt as VC dollars near all-time records

Posted: 14 Feb 2020 09:55 AM PST

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

As I write to you, SaaS and cloud stocks are busy setting fresh all-time highs and as we’ve seen, venture interest in modern software companies is pushing more money into the sector. But despite it appearing to be an incredibly good time to raise equity funding, venture debt and revenue-based financing appear to be having a moment.

So why are more folks talking about and raising debt to help power their startups, even when valuations are high and there is a lot of venture capital to be raised?

As with all explorations of complex, evolving trends, there’s no one answer. But, some data from a 2019-era survey on venture debt and a conversation I had with equity-free SaaS finance shop Element Finance’s John Gallagher (Element is a Scaleworks spinout) help explain what’s going on. Let’s start with how big the venture debt world is and how fast it is growing and then turn to what’s powering its expansion.

Rising debt

The data we’re going to discuss is directional and probably pretty accurate, which is just fine for what we want to do today: detail a general trend of rising venture debt volume over the past few years to confirm what we’ve presumed to be a trend for some time.

Thanks to a report from last year undertaken by Kruze (a startup accounting and HR consultancy), what the firm described as the “largest survey of the venture debt market” undertaken, including firms that “control well over half of the venture debt dollars in the United States,” here are estimated totals of domestic venture debt volumes for the past half-decade:

Tesla locks in stock surge with $2B offering at $767 per share

Posted: 14 Feb 2020 09:48 AM PST

Tesla has priced its secondary common stock offering at $767, a 4.6% discount from Thursday’s share price close, according to a securities filing Friday.

Tesla said in the filing it will sell 2.65 million shares at that discounted price to raise more than $2 billion. Lead underwriters Goldman Sachs and Morgan Stanley have the option to buy an additional 397,500 shares in the offering.

Tesla shares closed at $804 on Thursday. The share price opened lower Friday, jumped as high at $812.97 and has hovered around $802.

The automaker surprised Wall Street on Thursday when it announced plans to raise more than $2 billion through a common stock offering, despite signaling just two weeks ago that it would not seek to raise more cash.

CEO Elon Musk will purchase up to $10 million in shares in the offering, while Oracle co-founder and Tesla board member Larry Ellison will buy up to $1 million worth of Tesla shares, according to the securities filing.

Tesla said it will use the funds to strengthen its balance sheet and for general corporate purposes. In a separate filing Thursday that was posted prior to the stock offering notice, Tesla said capital expenditures could reach as high as $3.5 billion this year.

The stock offering conflicts with statements Musk and CFO Zach Kirkhorn made last month during Tesla's fourth-quarter earnings call. An institutional investor asked that given the recent run in the share price, why not raise capital now and substantially accelerate the growth in production? At the time, Musk said the company was spending money sensibly and that there is no "artificial hold back on expenditures."

At the time of Thursday’s announcement, Tesla shares had risen more than 35% since the January 29 earnings call, perhaps proving too tempting of an opportunity to ignore.

Better know a CSO: Dropbox head of security Justin Berman

Posted: 14 Feb 2020 08:26 AM PST

Justin Berman has one of the most important jobs at Dropbox .

As head of security, he oversees the company’s cybersecurity strategy, its defenses and works daily to keep its more than 600 million users’ data private and secure.

No pressure, then.

Berman joined the file storage and workspace giant a year ago during a period of transition for the company. During its early years, Dropbox was hit by a data breach that saw more than 60 million user passwords stolen during a time where tech giants were entrenched in a “move fast and break things” culture. But things have changed, particularly at Dropbox, which made good on its promise to improve the company’s security and also went far beyond what any Silicon Valley company had done before to better protect security researchers.

In this series, we’ll look at the role of the CSO — the chief security officer — at some of the biggest companies in tech to better understand the role, what it means to keep an organization secure without hindering growth and what advice startups can learn from some of the most experienced security professionals in the industry.

We start with Berman, who discussed in a recent interview what drew him to the company, what it means to be a security chief and what other companies can learn from Dropbox’s groundbreaking security policies

This interview has been edited for length and clarity.

TechCrunch: You’ve been at Dropbox since June. Before this you were at Zenefits, Flatiron Health and Bridgewater. What brought you to Dropbox?

Justin Berman: First and foremost, I think the people here are amazing. And I think the problems I get to solve here are not the ones that a lot of security leaders find themselves solving. Because the company has had a historical commitment to security, privacy, and trust and risk, I’m not coming in and having to boot the culture of security from the ground up. That culture already exists. And the question we ask ourselves is how do we use that culture to do the right level of things as opposed to just doing as much as possible where you might slow down the business?

Blue Origin’s new rocket engine production facility opens on Monday

Posted: 14 Feb 2020 08:22 AM PST

Blue Origin is opening its new rocket engine production center in Huntsville, Ala. on Monday, the company said today on Twitter. The new Huntsville facility will be able to produce its rocket engines at a much higher rate than is currently possible, which will be useful as the company is using its in-development BE-4 engine for its own New Glenn rocket, as well as for supplying the United Launch Alliance with thrust for its new Vulcan launch vehicle.

Blue Origin started working on BE-4 in 2011, and though it was originally designed for use specifically on Blue Origin’s own New Glenn rocket, which is its first orbital launch vehicle, in 2014 ULA announced it would be using the engines to power its own next-generation Vulcan craft as well. BE-4 has 550,000 lbs of thrust using a mixture of liquid natural gas and oxygen for fuel, and is designed from the ground up for heavy lift capability.

Blue Origin says it will deliver the first two production BE-4 engines this year, with deliveries to ULA to integrate them on the Vulcan for its first static hot fire tests. Blue Origin also aims to fly New Glenn equipped with the engines for their first test flight in 2021. It’s in the process of running longer tests to prove out the engines, and will aim to qualify them in their entirety through life cycle testing, which aims to replicate the kind of stress and operating conditions the hardware will undergo through its actual lifetime use.

Part of Blue Origin’s testing process will include retrofitting and upgrading Test Stand 4670 at NASA’s Marshall Space Flight Center, allowing the company to test a BE-3 engine one side and a BE-4 engine on the other.

It’s an exciting time for Blue Origin and its BE-4, and the engine has been a long time in the making. What comes next could set it up as an integral and core part of the U.S. space launch program going forward, regardless of how its own launch vehicle plans proceed.

Bloomberg memes push Instagram to require sponsorship disclosure

Posted: 14 Feb 2020 07:41 AM PST

Instagram is changing its advertising rules to require political campaigns’ sponsored posts from influencers to use its Branded Content Ads tool that adds a disclosure label of “Paid Partnership with.” The change comes after the Bloomberg presidential campaign paid meme-makers to post screenshots that showed him asking them to make him look cool.

Instagram provided this statement to TechCrunch:

Branded content is different from advertising, but in either case we believe it's important people know when they're seeing paid content on our platforms. That's why we have an Ad Library where anyone can see who paid for an ad and why we require creators to disclose any paid partnerships through our branded content tools. After hearing from multiple campaigns, we agree that there's a place for branded content in political discussion on our platforms. We're allowing US-based political candidates to work with creators to run this content, provided the political candidates are authorized and the creators disclose any paid partnerships through our branded content tools.

Instagram is also clarifying how fact-checking will work for political sponsored content, since political ads are currently exempt. Instagram tells TechCrunch that it will give guidance to third-party fact checkers that if a influencer's post contains speech clearly in the voice of the politician, it should not be fact-checked. If the post merely endorses or promotes the politician in the voice of the influencer or content creator, it will be eligible for fact checking. Posts fact-checked as false will have their reach in the feed decreased.

So for example, if an influencer posted "I support Bloomberg because he's a veteran and a war hero", that would be in their own voice and could be fact-checked as false since he did not serve in the armed forces. But if an influencer posted "Michael Bloomberg says 'Vote for me. I'm a war hero'", that would be in the politician's voice and ineligible for fact-checking.

Whether that makes any sense depends on your view of Facebook refusing to fact-check all political ads, which I've staunchly opposed. The lack of preparation for how to handle these edge cases ahead of the election cycle underscores Facebook's haphazard approach political advertising.

Back to the memes, Instagram explains to TechCrunch that branded content is different from advertising because Facebook doesn’t receive any payment and it can’t be targeted. If marketers or political campaigns pay to boost the reach of sponsored content, it’s then subject to Instagram’s ad policies and goes in its Ad Library for seven years.

But previously, Instagram banned political operations from running branded content because the policies that applied to it covered all monetization mediums on Instagram, including ad breaks and subscriptions. Those features see Facebook collect money from advertisers or users and share it with content creators. Facebook didn’t want to be seen as giving monetary contributions to campaigns, especially as the company tries to appear politically neutral.

Yet now Instagram is changing the rule and not just allowing but requiring political campaigns to use the Branded Content Ads tool when paying influencers to post sponsored content. That’s because Instagram and Facebook don’t get paid for these sponsorship deals between campaigns and influencers. It’s now asking all sponsorships, including the Bloomberg memes retroactively, to be disclosed with a label using this tool. That would add a “Paid Partnership with Bloomberg 2020” warning to posts and Stories that the campaign paid meme pages and other influencers to post. This rule change is starting in the U.S. today.

Instagram was moved to make the change after Bloomberg DM memes flooded the site. The New York Times’ Taylor Lorenz reported that the Bloomberg campaign worked with Meme 2020, an organization led by the head of the “FuckJerry” account’s Jerry Media company, Mick Purzycki, to recruit and pay the influencers. Their posts made it look like Bloomberg himself had Direct Messaged the creators asking them to post stuff that would make him relevant to a younger audience.

Part of the campaign’s initial success came because users weren’t fully sure if the influencers’ posts were jokes or ads, even if they were disclosed with #ad or “yes this is really sponsored by @MikeBloomberg.” There’s already been a swift souring of public perception on the meme campaign, with some users calling it cringey and posting memes of Bernie Sanders, who’s anti-corporate stance pits him opposite of Bloomberg.

The change comes just two days after the FTC voted to review influencer marketing guidelines and decide if advertisers and platforms might be liable for penalties for failing to mandate disclosure.

At least the Democratic field of candidates is finally waking up to the power of memes to reach a demographic largely removed from cable television and rally speeches. The Trump campaign has used digital media to great effect, exploiting a lack of rules against misinformation in Facebook ads to make inaccurate claims and raise money. With all his baked-in media exposure from being president already, the Democratic challengers need all the impressions they can get.

[Update 11am pacific: Article updated with Instagram's position on fact-checking of political sponsored content.] 

PhotoSquared app exposed customer photos and shipping labels

Posted: 14 Feb 2020 07:38 AM PST

Popular photo printing app PhotoSquared has exposed thousands of customer photos, addresses and orders details.

At least 10,000 shipping labels were stored in a public Amazon Web Services (AWS) storage bucket. There was no password on the bucket, allowing anyone who knew the easy-to-guess web address access to the customer data. All too often, these AWS storage buckets are misconfigured and set to “public” and not “private.”

The exposed data included high-resolution user-uploaded photos and generated shipping labels, dating back to 2016, and was updating by the day. The app has more than 100,000 users, according to its Google Play listing.

It’s not known how long the storage bucket was left open.

One of the customer orders, including photos and the customer’s shipping address. The exposed storage bucket also had thousands of shipping labels. (Image: TechCrunch)

Security researchers provided the name of the exposed bucket to TechCrunch. We matched a number of shipping labels against existing public records, and contacted PhotoSquared on Wednesday to warn of the exposure.

Keith Miller, chief executive of Strategic Factory, which owns PhotoSquared, confirmed that the data was no longer exposed; however, Miller declined to say if it planned to inform customers or regulators under data breach notification laws.

At the time of writing, PhotoSquared has made no reference to the security lapse on its website or its social media accounts.

This co-op wants to put money back into patients’ hands

Posted: 14 Feb 2020 07:28 AM PST

Too often, people are asked to give away their insights and time for free. Jen Horonjeff, founder and CEO of healthcare startup Savvy, knows this first hand and is trying to change that by applying a cooperative model to her business.

As an infant, Horonjeff was diagnosed with juvenile idiopathic arthritis. Since then, she has been diagnosed with a number of autoimmune conditions. Seven years ago this month, she had a brain tumor removed.

“I’ve just always been somebody who’s been a patient,” Horonjeff tells TechCrunch.

Horonjeff’s experience in the health system led her to become a human factors engineer focused on human-centered design, she says. In that area, work centers on trying to fit the world to people with different abilities, rather than the other way around. From there, Horonjeff, who has her doctorate in environmental medicine, has been most interested in patient-centered outcomes.

“So what matters to patients and what affects their health and health behaviors outside of just the traditional things [are what] we’ve been looking at,” she says. “It was being on that side of the professional equation that I heard my colleagues and partners talking about wanting to help patients, but they were never talking with them. And what they were talking about were not the same priorities as the patient communities that I was part of. And because I’m very open about my condition, they kept coming to me to ask me to be that sole patient representative. When they kept coming back to me, that was really a signal of a diversity issue, since I am white with a Ph.D. in New York City.”

Horonjeff’s discomfort with the lack of diversity led her to become a matchmaker between healthcare innovators and patient communities. This is where the idea for Savvy was born.

Tradeshift cuts headcount by three figures in effort to turn towards profitability

Posted: 14 Feb 2020 07:28 AM PST

Last month, Tradeshift, a platform for supply chain payments that has achieved unicorn status in recent years, had some good news and some bad news. It announced a Series F funding round of $240 million in equity and debt, raised from a combination of existing and new investors. It's now raised a total of $661 million since it started in 2008 and investors include Goldman Sachs, Principal Strategic Investments and Wipro Ventures among others.

The new funding came despite talk of a possible IPO last year. In effect, this new funding round was an admission by the company that it was delaying any IPO and setting the company "on a direct path to profitability in the near future," which is exactly the kind of noises many larger tech firms have made in the wake of the WeWork and Peloton issues with the public markets.

During that announcement CEO and co-founder Christian Lanng also admitted that the drive toward profitability would mean a cost-cutting exercise ahead of any possible IPO.

Lanng said this would likely mean reducing headcount in its expensive San Francisco offices, but reallocating resources and talent to locations where that is more affordable.

The company has made no formal announcement about the details on that, but yesterday we got confirmation from the European tech press that the cuts were indeed starting to bite.

The Danish version of ComputerWorld reported that the staffing cuts have now run into three figures and were conducted in mid-January.

The cuts came from headcount at the company’s offices in Copenhagen, San Francisco and other offices.

Mikkel Hippe Brun, a co-founder of Tradeshift and head of the company’s Asian business, confirmed the information to ComputerWorld, but indicated that "there are still some consultations around the world, where we are subject to different rules about notifications and opportunities to raise objections."

However, he said that the company still has more than 1,000 employees worldwide, which is "significantly more employees" than two years ago.

At the same time, the company has also brought in new executives from SAP, Oracle and Microsoft, among others, as the company tightens its belt, according to ComputerWorld.

Tradeshift has an impressive array of investors, such as Goldman Sachs, although it's notable that this doesn't include any of the usual round of typical SaaS-oriented Valley VCs.

Tradeshift customers have included Air France KLM, Kuehne + Nagel International AG, DHL, Fujitsu, HSBC, Siemens, Société Générale, Unilever and Volvo.

Alibaba Cloud revenue reaches $1.5B for the quarter on 62% growth rate

Posted: 14 Feb 2020 07:12 AM PST

Alibaba issued its latest earnings report yesterday, and the Chinese eCommerce giant reported that cloud revenue grew 62 percent to $1.5 billion U.S., crossing the RMB10 billion revenue threshold for the first time.

Alibaba also announced that it had completed its migration to its own public cloud in the most recent quarter, a significant milestone because the company can point to its own operations as a reference to potential customers, a point that Daniel Zhang, Alibaba executive chairman and CEO, made in the company’s post-earnings call with analysts.

“We believe the migration of Alibaba’s core e-commerce system to the public cloud is a watershed event. Not only will we ourselves enjoy greater operating efficiency, but we believe, it will also encourage others to adopt our public cloud infrastructure,” Zhang said in the call.

It’s worth noting that the company also warned that the Coronavirus gripping China could have impact on the company’s retail business this year, but it didn’t mention the cloud portion specifically.

Yesterday’s revenue report puts Alibaba on a $6 billion U.S. run rate, good for fourth place in the cloud infrastructure market share race, but well behind the market leaders. In the most recent earnings reports, Google reported $2.5 billion in revenue, Microsoft reported $12.5 billion in combined software and infrastructure revenue and market leader AWS reported a tad under $10 billion for the quarter.

As with Google, Alibaba sits well in the back of the pack, as Synergy Research’s latest market share data shows. The chart was generated before yesterday’s report, but it remains an accurate illustration of the relative positions of the various companies.

Alibaba has a lot in common with Amazon. Both are eCommerce giants. Both have cloud computing arms. Alibaba, however, came much later to the cloud computing side of the house, launching in 2009, but really only beginning to take it seriously in 2015.

At the time, cloud division president Simon Hu boasted to Reuters that his company would overtake Amazon in the cloud market within 4 years. “Our goal is to overtake Amazon in four years, whether that's in customers, technology, or worldwide scale,” he said at the time.

They aren’t close to achieving that goal, of course, but they are growing steadily in a hot cloud infrastructure market. Alibaba is the leading cloud vendor in China, although AWS leads in Asia overall, according to the most recent Synergy Research data on the region.

Big meditation money, new VC funds, and how do you value Airbnb?

Posted: 14 Feb 2020 06:00 AM PST

Hello and welcome back to Equity, TechCrunch's venture capital-focused podcast, where we unpack the numbers behind the headlines.

After having a good time with NEA’s Rick Yang last week, we thought we’d bring on another venture capitalist. So this week Danny and I had Elliott Robinson from Bessemer swing over for the show. As it turned out, he was about as correct as guest as possible as not only did the topics of the week line up with where he invests, he’s also friends with some of the folks that we discussed on the show.

So what did we talk about? A whole host of things including two rounds:

Then we turned to two new funds, including Battery’s battery of new capital vehicles that add up to $2 billion. In this part of the discussion we also touched on capital velocity, and why some firms are writing the same number of checks, but still need more capital. On the other end of the capital spectrum, Equal Ventures put together its first fund, and we riffed on the health of the micro-fund ecosystem.

The news run continued, with our trio touching on Airbnb’s recent financial results, and our wonderment about how to price the firm, the closure of Brandless (RIP), and the issues at SoftBank.

All that and we had to leave Lyft’s fascinating earnings and Uber’s profit promises alone as we ran a bit long with just that set of topics. A good week, and we’re back Monday morning!

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