Month: July 2018

The Data Transfer Project is a new team-up between tech giants to let you move your content, contacts, and more across apps. Founded by Facebook, Google, Twitter, and Microsoft, the DTP today revealed its plans for an open source data portability platform any online service can join. While many companies already let you download your information, that’s not very helpful if you can’t easily upload and use it elsewhere — whether you want to evacuate a social network you hate, back up your data somewhere different, or bring your digital identity along when you try a new app. The DTP’s tool isn’t ready for use yet, but the group today laid out a white paper for how it will work.

Creating an industry standard for data portability could force companies to compete on utility instead of being protected by data lock-in that traps users because it’s tough to switch services. The DTP could potentially offer a solution to a major problem with social networks I detailed in April: you can’t find your friends from one app on another. We’ve asked Facebook for details on if and how you’ll be able to transfer your social connections and friends’ contact info which it’s historically hoarded.

From porting playlists in music streaming services to health data from fitness trackers to our reams of photos and videos, the DTP could be a boon for startups. Incumbent tech giants maintain a huge advantage in popularizing new functionality because they instantly interoperate with a user’s existing data rather than making them start from scratch. Even if a social networking startup builds a better location sharing feature, personalized avatar, or payment system, it might be a lot easier to use Facebook’s clone of it because that’s where your profile, friends, and photos live.

If the DTP gains industry-wide momentum and its founding partners cooperate in good faith rather than at some bare minimum level of involvement, it could lower the barrier for people to experiment with new apps. Meanwhile, the tech giants could argue that the government shouldn’t step in to regulate them or break them up because DTP means users are free to choose whichever app best competes for their data and attention.

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

This week we had another full house which made for a good time. Our own Connie Loizos, Matthew Lynley and I were joined by Renata Quintini, a partner at Lux Capital.

Today’s episode is a grab bag of topics, including some self-driving stuff, late-stage venture noodling, and Microsoft. So, this show hit on every topic I used to have listed on my OkCupid profile.

First up was Zoox’s epic $500 million infusion. The self-driving company is notable for its full-stack approach, and, as Lux is a long-time investor in the project, we had the perfect guest on hand to help us discuss it. As you can imagine, we dug around who else is working in the space, what SoftBank is up to, and why Zoox might need so much capital.

Oddly enough everyone ’round the table found the dollar amount pretty reasonable. We apologize for the lack of drama.

Next up we peeked at Insight Venture Partners’ epic new fund, and how some founders are looking to provide liquidity to their investors without exiting. As you can imagine, we wanted to know how these Very Large Indeed funds are going to return enough capital to make their LPs happy. We also spent some time chewing on what happens to startups that wind up growing, but not as quickly as their venture backers had originally hoped.

Finally, Microsoft’s earnings. We don’t do too much about the already-public, but Microsoft’s latest digest was something that we couldn’t pass up. The company posted another set of healthy growth as it scampers along in the $1 trillion race.

And that’s about it. We’ll be back in a week with more Equity.

Blavity, the digital lifestyle media company geared toward black millennials, recently closed a $6.5 million Series A round led by GV with participation from Comcast Ventures, Plexo Capital and Baron Davis Enterprises. As part of the investment, GV Partner John Lyman is joining Blavity’s board of directors.

As the media landscape continues to change, with some businesses up for sale, a prominent black media publication moving under new leadership and other ones shuttering, Blavity is at a point where it’s thinking about what phase two looks like, Blavity CEO Morgan DeBaun told TechCrunch over the phone.

“There’s just a lot going on where it’s important now more than ever that Blavity is committed and has the resources it needs to grow as a publication,” DeBaun told me.

Most of the funding will go toward opening a new office that is strictly focused on engineering and data, DeBaun said. As part of that, Blavity intends to triple the size of its engineering team. The office, which will likely be in Atlanta, will be home to engineers on additional products and content creation tools to facilitate better storytelling.

“A lot of innovation will come out of that office in the next six to nine months,” she said.

Currently, Blavity employs 30 people full-time and has between 60-80 contractors across its five brands. Since launching in 2014, Blavity has acquired Travel Noire, a travel startup for black millennials and media platform Shadow and Act to expand its focus from news to lifestyle.

Founded by DeBaun, Aaron Samuels, Jonathan Jackson and Jeff Nelson, Blavity ultimately aims to be a digital voice for black millennials. Prior to this Series A, Blavity raised a little over $1.8 million from MACRO, New Media Ventures, Base Ventures, Cross Culture Ventures, Harlem Capital Partners, the Knight Enterprise Fund and others.

EBay is a very distant second behind Amazon when it comes to e-commerce sales in the U.S., but abroad — and in particular in Asia — it is willing to invest to grow its footprint in a targeted way. In February, eBay paid a total of $573 million to acquire Qoo10, a Japanese sales platform, according to the company’s quarterly earnings filing.

In more detail, the deal consisted of $306 million in cash and the relinquishment of about $266 million in shares in Giosis, a pan-Asian e-commerce marketplace business originally founded as a joint venture with Korea’s Gmarket. Qoo10, which claims two million shoppers, was originally part of Giosis.

The acquisition is similar to a deal eBay did in Korea in 2001 when it purchased Internet Auction Co and linked the Korean service up to its global network of buyers and sellers. That integration has been successful, and today South Korea is eBay’s fourth largest market based on revenue behind only the U.S., Germany and UK, respectively.

Although the acquisition of Qoo10 was first announced in February, the actual price was not disclosed until the company’s earnings report dropped on Thursday. “We believe the acquisition will allow us to offer Japanese consumers more inventory and grow our international presence,” eBay explained in the filing.

The deal underscores how eBay is at the same time pulling back from general plays while doubling down on more targeted opportunities. Earlier this year, the company gave up its stake in Flipkart as part of its acquisition by Walmart, but at the same time committed to investing in a new, standalone eBay operation in India, using some of the $1.1 billion in proceeds it made from selling its Flipkart stake to Walmart.

EBay had an unsuccessful effort in China which ended in 2006 and it hasn’t returned to the country.

According to its latest financial results, the company’s U.S.-based business accounted for $1.1 billion out the company’s total quarterly sales of $2.6 billion. That North American revenue was up five percent year-on-year, but eBay’s revenue from other international locations grew by more over the same period to give the company’s total sales a nine percent annual increase.

That didn’t impress investors, however, and the company’s share price dropped by 10 percent to close Thursday at $34.11.

EBay doesn’t break out revenue for Japan — where Qoo10 operates — but revenue from Korean rose by 13 percent to $304 million in the most recent quarter. Sales for ‘rest of the world’ were up nine percent to $505 million.

While it used to be neck-and-neck with Amazon in terms of e-commerce sales and presence in the US, it has fallen behind over the years and now accounts for just 6.6 percent of online transactions in the country, versus 49.1 percent for its bigger rival.

More growth abroad could be one route to improving those fortunes, with India one of the world’s fastest-growing and most populous economies. But success in the country will be challenging with Flipkart joining forces with Walmart and Amazon’s India unit continuing to grow in strength.

But eBay isn’t going to go head-to-head with those two. Instead, its India operations will focus on cross-border sales, so essentially looking to connect buyers and sellers in the country with opportunities overseas within its network. That’s the same model it has used to effect in other parts of the world, so its acquisition of Qoo10 and its other international services will be a key part of that India strategy, and vice versa.

In a bid to cut down on the spread of false information and spam, WhatsApp recently added labels that indicate when a message has been forwarded. Now the company is sharpening that strategy by imposing limits on how many groups a message can be sent on to.

Originally, users could forward messages on to multiple groups, but a new trial will see that forwarding limited to 20 groups worldwide. In India, however, which is WhatsApp’s largest market with 200 million users, the limit will be just five. In addition, a ‘quick forward’ option that allowed users to pass on images and videos to others rapidly is being removed from India.

“We believe that these changes — which we’ll continue to evaluate — will help keep WhatsApp the way it was designed to be: a private messaging app,” the company said in a blog post.

The changes are designed to help reduce the amount of information that goes viral on the service, although clearly this isn’t a move that will end the problem altogether.

The change is in direct response to a series of incidents in India. The BBC recently wrote about an incident which saw one man dead and two others severely beaten after rumors of their efforts to abduct children from a village spread on WhatsApp. Reportedly 17 other people have been killed in the past year under similar circumstances, with police saying false rumors had spread via WhatsApp.

In response, WhatsApp — which is of course owned by Facebook — has bought full-page newspaper ads to warn about false information on its service.

Beyond concern about firing up vigilantes, the saga may also spill into India’s upcoming national general election next year. Times Internet today reports that Facebook and WhatsApp plan to introduce a fake news verification system that it used recently in Mexico to help combat spam messages and the spreading of incorrect news and information. The paper said that the companies have already held talks with India’s Election Commission.

As image recognition advances continue to accelerate, startups with a mind towards security applications are seeing some major interest to turn surveillance systems more intelligent.

AnyVision is working on face, body and object recognition tech and the underlying system infrastructure to help companies deploy smart cameras for various purposes. The tech works when deployed on most types of camera and does not require highly sophisticated sensors to operate, the company says

“It’s not just how accurate the system is, it’s also how much it scales,” Etshtein tells TechCrunch. “You can put more than 20 concurrent full HD camera streams on a single GPU.”

The Tel Aviv-based AI startup announced today that it has closed a $28 million Series A funding round led by Bosch. The quickly growing company already has 130 employees and has plans to open up three new offices by the year’s end.

Right now, AnyVision is working on products in a few different verticals. Its security product called “Better Tomorrow” has been a key focus for the company.

Even as tech giants in the U.S. like Amazon and Google are scrutinized for contracts with government orgs that involve facial recognition tech, Etshtein believes that their company’s solution will be an improvement over existing video surveillance technologies in terms of protecting the public’s privacy.

“Today, the video management systems basically record everything and you can see individuals faces, you can see everything.”Etshtein says. “Once our system is installed it pixelates all the faces in the stream automatically, even the operator in the control center cannot see your face because the mathematical models just represent the persons of interest.”

The company also recently released a product called FaceKey that leverages the company’s facial recognition tech for verification purposes, allowing customers with phones that are not just the iPhone X to use their face as a two-factor authentication method in things like banking apps. Now, there have certainly been a lot of issues with maintaining the needed accuracy which is exactly what has made FaceID so novel, but AnyVision CEO Eylon Etshtein claims to have “cracked the problem.”

Other products AnyVision is working on include some new efforts in the sports and entertainment spaces as well as a retail analytics platform that they’re hoping to release later this summer.

Tilray, a five-year-old, British Columbia-based medical cannabis company that sells its products to patients, researchers, pharmacies and even governments, saw its shares get high (sorry) on the Nasdaq today, after the company priced 9 million shares at $17 apiece and watched them soar, closing at $22.39, a jump of slightly more than 32 percent.

The company raised $153 million in the offering, capital it will reportedly use in part to fuel its marijuana growing and processing facilities in Ontario.

It was a huge win for the cannabis industry, which has been growing like a weed (sorry again). Related startups attracted $593 million in funding last year, twice what they raised in 2016 and a meaningful jump from the $121 million invested in related startups in 2014, according to CB Insights. Among the different types of companies to garner investor dollars, shows CB Insights’ research, are: startups focused on research or distribution of medical marijuana products (as with Tilray); tools for ensuring compliance with state and federal marijuana laws; startups focused on payments for marijuana companies; startups collecting data and producing marketing insights about the industry; and companies creating novel strains and types of marijuana using new farming techniques.

Tilray’s performance today is also a very positive signal for Seattle-based Privateer Holdings, a private equity firm that owned 100 percent of the startup as it headed into its offering. In fact, Privateer’s CEO, Brendan Kennedy, is also the CEO of Tilray. (Cannabis companies are weird.)

Privateer has itself raised more than $200 million since its founding in 2010, including from Founders Fund and Subversive Capital, and it has used that capital to fund, acquire and incubate companies. While it incubated Tilray, for example, it also owns Leafly, a large cannabis information resource that it acquired in 2011. Another of its portfolio companies is Marley Natural, a Bob Marley-branded cannabis line that it launched in partnership with the Marley’s estate and that sells a line of cannabis strains, smoking accessories and even body care products.

It isn’t exactly clear how much Privateer had sunk into Tilray (we have a press request into the company). Tilray had announced C$60 million in Series A funding back in February, composed of a “group of leading global institutional investors.” But according to its S-1, it was solely owned until today by Privateer.

What we do know: Tilray remains unprofitable, reporting a net loss of $7.8 million last year. The company also cannot sell its products in the U.S. market, given that marijuana remains illegal under federal law, despite that 30 states and Washington, D.C. have legalized it in some form. The reason: The U.S. government classifies marijuana as a schedule 1 drug, meaning it’s considered to have no medical value and a high potential for abuse.

That could change, but as this Vox explainer makes clear, a review process for the current schedule would need to be initiated by either the secretary of health and human services or the attorney general, and current Attorney General Jeff Sessions despises marijuana, saying once that “Good people don’t smoke marijuana.”

He seems to be among a dwindling minority. According to a Gallup Poll published last October, 64 percent of Americans favor legalization.

Walt Disney Animation Studio is set to debut its first VR short film, Cycles, this August in Vancouver, the Association for Computing Machinery announced today. The plan is for it to be a headliner at the ACM’s computer graphics conference (SIGGRAPH), joining other forms of VR, AR and MR entertainment in the conference’s designated Immersive Pavilion.

This film is a first for both Disney and its director, Jeff Gipson, who joined the animation team in 2013 to work as a lighting artist on films like Frozen, Zootopia and Moana. The objective of this film, Gipson said in the statement released by ACM, is to inspire a deep emotional connection with the story.

“We hope more and more people begin to see the emotional weight of VR films, and with Cycles in particular, we hope they will feel the emotions we aimed to convey with our story,” said Gipson.

Cycles centers around the meaning of creating a home and focuses on the ups and downs of a family as they create a life in theirs.

“Every house has a story unique to the people, the characters who live there,” says Gipson. “We wanted to create a story in this single place and be able to have the viewer witness life happening around them.”

While VR is a perfect candidate for this kind of emotionally driven story, the process of bringing an idea like this to life is no simple task. Apart from the technical feats involved (the short took about four months with 50 collaborators) even the notion of storyboarding is new when designing films like these. When working on Cycles, the team used both Quill VR animations and motion capture to bring their idea into a 3D space.

While this film is Disney’s first foray into VR films, it is terrain that its subsidiary Pixar Animation Studios explored this past winter in a VR trailer for the award-winning film Coco. And, according to a statement Pixar studio executives gave The Washington Post in December, it’s an area the studio would like to explore further through possible VR spin-offs.

Films like Cycles are far from mainstream, but as influential companies like Disney and Pixar continue to experiment in this space the distant future of widespread VR cinema may be beginning to finally approach.

The San Francisco Municipal Transportation Agency is still reviewing the 12 applications from companies to operate electric scooters in the city. In early June, companies like Uber, Lime, Bird, Lyft and others applied for permits to operate electric scooter-share services in San Francisco. San Francisco’s permit process came as a result of Bird, Lime and Spin deploying their electric scooters without permission in the city in March. As part of a new city law, which went into effect June 4, scooter companies are not able to operate their services in San Francisco without a permit.

The SFMTA initially said it expected to make a decision about which five, if any, companies would receive permits by the end of June. Well, it’s now July and still no decision. The SFMTA expects to finalize its recommendations and documentation “in the coming weeks,” the SFMTA wrote in a blog post today. Once that’s done, the agency says it will work with companies to finalize and clarify the terms and conditions of the permit. The goal, according to the blog post, is to issue permits sometime in August.

As part of the 24-month pilot program, electric scooter companies selected to operate in the city will need to provide user education and insurance, share its detailed trip data with the city, have a privacy policy that protects user data, offer a low-income plan and operate in a to-be-approved service area. The city will allow no more than 2,500 electric scooters on the streets at any one time.

Despite the standstill in San Francisco, scooter companies are moving full force ahead, snatching up venture funding and partnering with larger players. Last week, Lime raised a $335 million round led by GV with participation from Uber. Late last month, Spin announced it’s closing a $125 million security token offering. That came shortly after electric scooter startup Bird raised a $300 million round led by Sequoia Capital.

For a breakdown of the ongoing scooter wars, be sure to read TC’s overview.

You would think that Amazon, Reddit, Wikipedia and other highly popular websites would by now tell you that “password1” or “hunter2” is a terrible password — just terrible. But they don’t. A research project that has kept tabs on the top sites and their password habits for the last 11 years shows that most provide only rudimentary password restrictions and do little to help users.

Steven Furnell, of the University of Plymouth, first did a survey of websites’ password practices in 2007, repeating the process in 2011 and 2014 — and then once more this week. His conclusions?

It is somewhat disappointing to find that the overall story in 2018 remains largely similar to that of 2007. In the intervening years, much has been written about the failings of passwords and the ways in which we use them, yet little is done to encourage or oblige us to follow the right path.

Although the university writeup notes that Google, Microsoft and Yahoo had the best password practices and Amazon, Reddit and Wikipedia had the worst, it diplomatically declined to go into specifics. Fortunately, I acquired the paper for myself and am prepared to name and shame.

The top 10 unique sites in English (as measured by Alexa; the lineup has changed somewhat over the years) were evaluated: Google, Facebook, Wikipedia, Reddit, Yahoo, Amazon, Twitter, Instagram, Microsoft Live and Netflix.

The biggest failure is inarguably Amazon, which combines truly inadequate password controls with an incredibly valuable and personal service. Wikipedia and Reddit had fewer restrictions, but neither protects such important data; an Amazon account being accessed by malicious actors is a far greater danger.

Amazon accepted practically every password Furnell threw at it, including repeats of the username, the user’s own name and, of course, the all-time classic, “password.” (Netflix and Reddit also took “password,” though Wikipedia didn’t. Wikipedia, on the other hand, accepted single-character passwords like “b.”)

Even sites that do have restrictions, like requiring multiple character types or rejecting commonly used passwords, seldom explain themselves. Presented with no feedback at the start, users creating an account may enter a password, only to be told it must be longer… and then, again, that it can’t have a certain word (like the user’s last name)… and then, again, that it must include special characters. And some sites have different requirements when you sign up than when you set a new one!

Why not lay it all out at the start? And for that matter, why not explain the reasoning behind it? It’d be trivial to make a little info box saying “We require X because Y.” But hardly any of the top sites do.

The one bit of light in this dreary report is that two-factor authentication — arguably more important than a good password — is in fact making strides, and some of the worst offenders in password policy (looking at you, Amazon) allow it. Now they just have to move it off of SMS and onto a secure authenticator app.

The final word is pretty the same as it’s been for the last decade:

The basic argument here – as with the earlier versions of the study and the others referenced – is for provision of user-facing security to be matched with accompanying support. Passwords are a good example because we know that many people are poor at using them. And yet the lesson continues to go unheeded and we continue to criticise the method and blame the users instead.

Two-factor is a start, but:

Users arguably require more encouragement – or indeed obligation – to use them. Otherwise, like passwords themselves, they will offer the potential for protection, while falling short of doing so in practice.

In other words, quit talking about how bad passwords are and do something about it!