Month: August 2018

Not to be confused with a dog-walking startup, Bark is a watchdog for kids’ and teens’ internet security. Today, it announces a $9 million Series A led by Signal Peak Ventures, with participation from Two Sigma Ventures, Symmetrical Ventures, Fuel Capital, Hallett Capital and Atlanta Seed Company.

The round comes as the Atlanta-based company, which uses artificial intelligence to track kids’ online activity and notifies parents when its algorithm finds concerning content, passes an impressive landmark. To date, Bark’s algorithm has analyzed more than 1 billion messages across text, email and social media platforms like Facebook, Instagram, Pinterest, Snap and GroupMe.

“Having Bark connected to your child’s devices and accounts is similar to wearing a seatbelt,” a Bark representative told me. “You would not let your child drive a car without wearing one, so why give them a device that can access the world 24/7/365 without a safeguard?”

Bark launched at TechCrunch Disrupt New York in 2016 and has quickly acquired a large user base of parents. The app, which costs $9 per month, alerts parents with an email or text when its algorithm comes across content that it deems inappropriate or dangerous, then shares that content with the parent. Bark’s hope is the app will protect kids from potentially dangerous behavior, like sexting, cyberbullying or contact with internet predators. They also want to warn parents when Bark’s AI detects signs of depression or suicidal thoughts in the child’s online behavior. 

According to the 1 billion messages processed by the app, 66% of teens and 57% of tweens have experienced cyberbullying as a bully, victim or witness; 54% of teens and 40% of tweens engaged in conversations about depression or anxiety; and 40% of teens and 28% of tweens encountered violent subject matter.

Bark was founded by Brian Bason (pictured below), the former CTO of the Twitter-acquired social marketing startup Niche. Bason and the other members of the executive team at Bark have five children among them with another on the way. They say kids and teens are receptive to the app, though it seems like something that would be less than tolerated by any teenagers I know. Bark, at least, doesn’t give parents full, unfettered access to every single message their kids send and receive.

 

“We highly encourage families to have open discussions about online safety and how using Bark helps, and to engender trust with their children by giving them appropriate privacy online,” they said. “Children appreciate that Bark does not give their parents the ability to read everything they’re doing.”

Bark says the app is not an invasion of children’s’ privacy: “Children are already giving access to their personal data to companies like Apple, Google, Instagram, Snapchat and more.”

The app is also available to school administrators, who can be notified of any issues detected in school-issued student email, chat, documents or cloud storage. Following the Parkland, FL. shooting at Marjory Stoneman Douglas High School that killed 17 students in February, Bark began offering the service to any schools using Google’s G Suite for Education for free. Schools using Microsoft Office 365 Education are now also eligible for the free service.

Of course, AI isn’t foolproof. Bark doesn’t catch everything and sometimes it alerts parents of behavior that’s just teens being teens. For times when teen jargon is too difficult to translate, the company provides resources to help parents crack the code. Don’t know what a finsta is? They’ve got your back. Or if you just want to learn the ropes of social media platforms like Instagram, they’ll guide you through them. For more serious issues, Bark’s blog also has tips on avoiding predators and dealing with cyberbullying, for example. Plus, when a parent receives a Bark alert, the service provides a list of recommended next steps.

Bark has previously brought in roughly $500,000 from Karlin Ventures and Social Starts.

Datree, an early-stage startup based in Israel, wants to help companies create a set of policies for their applications, and apply them in GitHub before a commit goes live. Today, it announced $3 million in seed funding from TLV partners.

The check was actually written last September, according to the founders, and they are making the investment public today.

Like many Israeli startups, before they wrote a line of code, they did their research talking to 40 companies, and found a common pain point in modern development techniques. Code was being committed ever faster and teams were more widely distributed. Instead of a monolithic application, you had containerized microservices, often being built by disparate teams. All of this came together in GitHub .

The team decided that the best way to deal with this kind of chaos was to try and bring some order to it by creating a catalogue of development teams and their work. The idea was to bring these teams and their work together in a central place, then apply a set of internal best practices to their code to catch any policy violations before they committed the code. It’s important to note that they only extract metadata to build this catalogue.

If you can use Datree to confirm that each pull request in GitHub complies with a set of internal policies in an automated fashion, you could potentially save your development teams a lot of pain trying to track down issues after the commit.

This is of course, the whole idea behind the DevOps model. The developers develop as fast as they can and operations is responsible for making sure the code is in decent shape, secure and complies with company policy before it gets published. Datree has created a report engine to scan all this code and report on what aligns with the policies and what doesn’t in an automated fashion. They also recognized that not every policy is rigid and that there will be exceptions, and they allow for that too.

Right now, it’s early days and the company consists of the three founders and 5 additional people “in a garage in Tel Aviv.” They are working with six design partners including HoneyBook, SimilarWeb and PlayBuzz on early versions of the solution, but they have a vision, and they have $3 million to build it out and see if it has a market fit. They plan to split their time between San Francisco and Tel Aviv as they attempt to expand their market.

Last month Google rolled out a Maps’ “match” feature which purported to predict how much you’d like a particular place, like a restaurant or bar. The feature uses the data it has on you, such as the backlog of places it knows you’ve visited, and what it can assess as your dining preferences. Look up Thai food restaurants regularly? Maps will show you similar places in the area with a high-match percentage attached to them.

Yelp and Foursquare have been trying something similar out for years. But both the AI approach and the ‘five star rating’ approach hardly appears to this new generation of users.

Now a startup out of Berlin wants to do something similar, but it wants to crowdsource that information in a simpler, easier way than other apps before it.

The YOBO app (iOS/Android) takes a new approach, likely to appeal to the Millennial and Gen-Z generations. Instead of building its location-based data and recommendations on set words and ratings, it’s using, yes, emojis and photos. What more could the Instagram generation want?

Emojis are used billion of a times a day and have been described as the fastest growing language in history. Many people, young people especially, find it easier to communicate using its smiley faces and icons than text. We saw Apple introduce Animojis and this trend is expected to grow even further. YOBO is using emojis as training data for people’s preferences for places.

There’s another problem the app is trying to solve: the fact that many places that might have been previously worth visiting are now crowded with tourists.

As co-founder Tobias Szarowicz says: “Because we were using Yelp, Foursquare, Tripadvisor and Google to plan a weekend trip to Prague, we ended up with the same annoying stag party at almost every place we went. The reason for that was simple: we all put the same popular bars, restaurants and clubs on our list and ended up at the most touristic places in town. This experience made us think about how we could use technology to personalise the real hyperlocal world around us, so people could feel local wherever they are.” YOBO is now live on iOS with users sharing across major cities like Berlin, Hamburg, London and Amsterdam.

The idea is that users share photos of locations and rate and categorise these places using emojis. These posts are then compiled into other users’ individual recommendations based on their current location. Over time, the app also claims to learn the habits of its users and recommends only places that suit them personally – along with considering the weather, the time-of-day, their activity and personal preferences.

Using Emojis to rate places is a simple and fast way for people can express their emotions. Because they are likely to get more data down to its ease of use, YOBO can use machine learning to begin to recommend local spots the user might personally like rather than just the most popular ones.

This problem about location popularity was acutely illustrated recently when “The Shed at Dulwich” became the No. 1 restaurant on TripAdvisor earlier this year. The problem was, it was fake. A London-based writer wanted to illustrate how easy it is to manipulate review sites like TripAdvisor, Yelp, Foursquare and Google, by pushing an entirely non-existent restaurant to the top spot in London. And he achieved it.

The makers of YOBO say this wouldn’t be possible because, on YOBO, users who rate things always need to be near the place they are rating.

Here’s how Yobo works:

Think of a hyperlocal Instagram: People anonymously share pictures of their favourite local places like restaurants, bars, etc. and use up to 3 emojis to rate the place and express their feelings. No typing of text. The platform’s machine learning then uses those emojis to rate the place.

Additionally, using image recognition, the app can draw conclusions on the nature of a specific place. For example, if someone shares a photo of a cup of coffee, the app knows that people can get coffee at that location and can categorise it as a breakfast or lunch place. YOBO claims this works for any specific food or any other object recognised on a picture. All recommendations are shown in a personalised places-feed.

By tapping on a specific place, the user gets presented with more details about it. Together with a gallery of images and a map, all additional information is displayed visually in an emoji cloud. The bigger the emoji the more relevant it is.

On the profile-page users can find the whole collection of places they shared and ‘bucket-listed’. The specific local taste of each user is displayed in an emoji-cloud on top of the profile page. The bigger the emoji the more relevant it is for the user’s individual taste. You can’t ‘follow’ someone on the app in the way you do on Twitter, but if someone posts a photo he or she will get notified if someone else rated that photo with emojis.

Unlike Yelp, Tripadvisor, Google, Foursquare YOBO is 100% visual. All information about a place is displayed in pictures and emojis, no text at all. For the generation it’s targeting, that speaks to their world.

How the app plans to make money is to be explored, but the startup believes there is still no efficient and convenient marketing solutions for local owner-managed businesses, so in theory they could build-in more personalised discounts to venues.

Last winter the company closed a small pre-seed-round to get the app ready for market and is now raising a seed round to enter new European cities.

The team consists of Tobias Szarowicz (CEO); Anton Kahr (CTO) is an experienced deep-tech developer; Alexander Beer (CPO) a former co-founder of Montredo, a marketplace for luxury watches; and Izabela Zięba (CMO) an expert in performance marketing.

Four of the world’s largest crypto exchanges are leading a $32 million investment in an ambitious venture out of Korea that’s aiming to develop a new stable coin using e-commerce as the lynchpin.

Global exchanges Binance Labs, OKEx, Huobi Capital, and Dunamu — the firm behind Korea’s Upbit — have all poured capital into Terra, a crypto project whose founding team is headed by Daniel Shin, founder and president of TicketMonster — the $1.7 billion Korean e-commerce firm that has been owned by both Living Social and Groupon.

This is the first time global exchanges have come together on a deal, and the stellar line-up of investors includes Polychain Capital, China’s FBG Capital, Hashed, 1kx, Kenetic Capital and Arrington XRP — the crypto fund from TechCrunch founder Michael Arrington .

The deal is a token-based investment round, as opposed to equity. Shin told TechCrunch that Terra plans to hold a private sale in a couple of weeks to add additional capital to this “highly strategic” set of investors. The company will eschew a public sale with retail investors, but it plans to hit exchanges — you guess which ones… — in the coming months.

Yet another stable coin

Stable coins, for the uninitiated, are tokens that are designed to remain at the same price… stable, as the name suggests.

They’re typically pegged to the U.S. dollar and are highly sought after in the world of crypto, where stability is hard, nay impossible, to find. Today, stable coins are mostly used for trading and exchange-related purposes and Tether, the controversial project backed by Bitfinex, is probably the best-known. There’s plenty of criticism around Tether, and research has suggested that Bitcoin’s phenomenal rise in late 2017 — when its value it a record high of nearly $20,000 — was fuelled by Tether manipulation.

Arguably, Tether is the best example of a stable coin, and since it is propped up by the injection of hundreds of millions of dollars on a routine basis, it would be fair to say that the concept has never worked.

That viewpoint might be a little cynical, and Terra believes it can make the concept work through mass adoption of its token. Its gateway for that is to leverage e-commerce in Asia.

While Terra is marketed as a stable coin in its whitepaper and other documents, it would be fair to see it as more of a fintech platform — think Alibaba’s Alipay on the blockchain. That’s because the project is kicking off by working with a slew of e-commerce firms across Korea and other parts of Asia.

Shin explained that Terra aims to complement existing payment solutions by offering its own Stripe -like payment option that would allow customers to pay using its coin (a name hasn’t been decided on yet). For merchants, that could mean circumventing existing payment networks like Visa, which take a cut of all revenue. On the other side, the project could help offer incentives for consumers to buy using the token, for example, through discounts that don’t add to the e-commerce platform’s cash burn.

Because buying crypto and using wallets still isn’t mainstream — and it is a clunky experience — there’s also the potential for consumers to earn tokens when they use platforms, Shin said. The token would be spendable across all supported e-commerce services.

Already, Terra has secured quite a list of partners. There are 15 e-commerce services signed up — including Woowa Brothers, Qoo10, Carousell, Pomelo, and Tiki — which between them boast a cumulative 40 million customers and some $25 billion in annual transaction volume.

Shin said the project is targeting Asia because it is the world’s most active crypto region. He believes that Terra can take a slice of the payments behind the partner businesses — he’s targeting payment GMV in the region of “tens, if not hundreds, of millions of U.S. dollars” before the end of 2019 — and in doing so set itself up for becoming a stable token by virtue of usage.

Of course, it also has its own stability engine. That features a second token — Luna — which Shin said acts as collateral by accumulating revenue by taking the small transaction fee incurred when spending the Terra token. Shin said an algorithm will use Luna to buy back the Terra token in high season to keep the price stable, while it will burn a portion of tokens to maintain stability during periods of recession. A more detailed explanation of the ‘reserve ratio’ can be found in the Terra whitepaper.

Alipay on the blockchain

What makes Terra particularly interesting is that the intention is to build the next Alipay.

Alibaba affiliate Ant Financial, which runs Alipay, may be little known in the U.S. and Europe, but it is dripping with ambition. It is tipped to go public in the next year or two, and already it is valued at over $100 billion following a recent $14 billion funding round.

Alipay is China’s dominant mobile payment service, and it has spawned a digital bank, lending products and more. Ant claims over 500 million users, and it has spent close to $1 billion on a series of aggressive expansions across Asia and beyond as it aims to replicate its formidable Chinese business outside of the country.

Shin explained that he believes Terra could do the same in Asia where, like Alipay, it will try to leverage e-commerce (in this case its partner businesses) to go beyond payments and into financial services.

Shin explained that the plan is to roll out with initial e-commerce partners in Korea during Q4 of this year, before widening to cover Southeast Asia and beyond in 2019. One year later — 2020 — is when he believes Terra will have the required base to welcome developers and third-parties.

“Many projects open up a developer platform prior to adoption,” he explained in an interview. “Once we have tens of millions, if not hundreds of millions, of users is when we’ll open up.”

Exactly what that platform will look like is unclear at this point. Terra is designing a multi-chain structure in order to accommodate numerous chains with its stable coin concept, but it is yet to decide which will primary and therefore the platform for third-party development. Ethereum has tended to be that canvass, but the project is a challenging phase right now so holding out isn’t necessarily a bad thing at this point.

Terra is a hugely ambitious project in the field of often-impossible ideas that is crypto.

Taking on Alipay head-to-head is tough, developing a stable coin is impossible, but doing both lengthens the odds further still. But yet Shin and his team have won the backing of a collective of top names in the crypto space. That, if nothing else, is a good reason to keep an eye on this project.

The odds may be long but, as Shin explains it, you can readily argue that there is upside to having so many big-name partners on board.

“The worst case scenario with this project is a reverse ICO with over 10 e-commerce companies,” he explained. “But the best possible outcome is that we build a platform that competes with Alipay on the blockchain.”

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Since blockchain technology appeared, there has been a persistent problem in its development: how to make it scale to billions of users. Bitcoin was famously never really designed for this, and today other platforms like Ethereum are also struggling. If you could crack this problem, the thinking goes, you’d end up with the hottest property in blockchain right now.

That, a very healthy dose of ambition, and a bench of strong computer science talent are some of the big reasons why investors are gathering around DFINITY, a startup based out of Zug, Switzerland and Palo Alto that is also a foundation, and has a very lofty goal to build what it calls the “Internet Computer”: a blockchain-based, decentralised and non-proprietary network to run the next generation of mega-applications. DFINITY aims to launch an initial version of its public network — which it has also dubbed “Cloud 3.0” — towards the end of the year.

Today, DFINITY is announcing that it has raised $102 million in funding, in a round jointly led by Andreessen Horowitz (via its crypto fund a16z crypto) and Polychain Capital. Both were previous investors in a $61 million round DFINITY announced earlier this year — which has been a blockbuster for blockchain, with at least $1.3 billion being invested into the technology in the first half of 2018 alone. DFINITY has now raised just over $195 million to date since being founded in 2015.

Other investors in this latest round include SV Angel, Aspect Ventures, Village Global, Multicoin Capital, Scalar Capital, and Amino Capital, KR1, as well as DFINITY community members.

DFINITY’s approach to the scalability problem is to resolve the dilemma between full decentralization (where every miner runs every instruction of every computation) versus delegating the mechanics to nodes or super nodes (so therefore more centralisation). DFINITY says it has tested its network to the point where it can finalize software computations in under 5 seconds, which is extremely fast. Bitcoin by contrasts takes 3600 seconds, and Ethereum 600 seconds.

DFINITY conducted an airdrop in May of 35 million Swiss Francs worth of tokens to DFINITY community members to help them become early users. Now DFINITY has followed the newer approach of raising a private sale for its token, without going to a public sale.

You can also watch a test demo of the network here:

While a lot of blockchain projects are tied up with currency (an area that DFINITY has also developed, as you can see), what’s notable about what this startup is doing is that its wider focus is on building a platform that could be used across a significantly wider set of applications.

The Internet Computer, as described by founder and chief scientist Dominic Williams, “is a public infrastructure that aims to host the world’s next generation of software and services.” The belief is that by making it open source and non-proprietary, it’s significantly more secure and less costly to maintain. DFINITY claims that R&D on such an architecture is 90 percent lower.

“We are excited to back DFINITY’s Internet Computer and their vision to host the world’s next generation of software and services on a public network,” said Chris Dixon, Partner at a16z crypto. “The Internet Computer is on track to become a critical piece of the future technology stack. This is groundbreaking and a real testament to Dominic and the incredible team at DFINITY.”

“Dfinity is exciting to a new decentralised world because it has the ability to solve the big issues of the day, including scaling and network security. It’s perhaps one of the handful of new blockchain platform’s that can achieve this. We were always impressed with Dominic and his conviction of their approach,” added Keld Van Shreven, CEO of KR1.

In addition to Williams, that team is impressive indeed.

It includes Timo Hanke as head of engineering, who is a former mathematics and cryptography professor who created AsicBoost to increase the efficiency of Bitcoin mining; Mahnush Movahedi, who joined as a senior researcher from Yale where he’s worked on “scalable and fault-tolerant distributed algorithms for consensus and secure multi-party computation, secret sharing, and interactive communication over noisy channels”; ex-Googler Ben Lynn, who is the “L” from BLS cryptography, used in Threshold Relay to “generate randomness and achieve security, speed and scale in public networks”; and Adreas Rossberg, another ex-Googler who had co-designed the WebAssembly virtual machine, which is also used at DFINITY.

While Internet networks and the largest players online today are proprietary entities with their own commercial and strategic agendas, the vision behind DFINITY is that it can be used to run “autonomous software” that will run in a more independent way. These will exist as running open source software that updates itself using inbuilt governance that can provide hard guarantees to users in the form of “smart contracts” (computing and other transactions that can be made without third parties). These can cover how data might be used, or provide guarantees to startups wishing to build functionality without the precarious worry of a platform access getting revoked. You can read more about the technology in its white paper.

DFINITY has not disclosed its valuation with this round.

Natural Cycles, a Swedish startup which touts its body temperature-based algorithmic method for tracking individual fertility as an effective alternative to hormonal birth control, has been wrapped by the UK advertising regulator which today upheld three complaints that an advert the company ran last year via Facebook’s platform was misleading.

The regulator has banned Natural Cycles from running the advert again, and warned it against exaggerating the efficacy of its product.

The ad had stated that “Natural Cycles is a highly accurate, certified, contraceptive app that adapts to every woman’s unique menstrual cycle. Sign up to get to know your body and prevent pregnancies naturally”, and in a video below the text it had also stated: “Natural Cycles officially offers a new, clinically tested alternative to birth control methods”.

The company has leaned heavily on social media marketing to target its ‘digital contraception’ app at young women.

“We told Natural Cycles Nordic AB Sweden not to state or imply that the app was a highly accurate method of contraception and to take care not to exaggerate the efficacy of the app in preventing pregnancies,” said the Advertising Standards Authority (ASA) handing down its decision.

While Natural Cycles gained EU certification for its app as a contraceptive in February 2017, and most recently FDA clearance for marketing the app as a contraception in the US (with the regulator granting its De Novo classification request this month), those regulatory clearances come with plenty of caveats about the complexity of the product.

The FDA, for example, warns that: “Users must be aware that even with consistent use of the device, there is still a possibility of unintended pregnancy.”

At the same time, Natural Cycles has yet to back up the efficacy claims it makes for the product with the scientific ‘gold standard’ of a randomized control trial. So users wanting to be able to compare the product’s efficacy against other more tried and tested birth control methods (such as the pill or condoms) are not able to do so.

No birth control method (barring abstention) is 100% effective of course but, as we’ve reported previously, Natural Cycles’ aggressive marketing and PR has lacked nuance and attempted to downplay concerns about the complexity of its system and the chance of failure even though the product’s performance is impacted by multiple individual factors — from illness, to irregular periods. Which risks being irresponsible.

In the ruling, the ASA flags up the relative complexity of Natural Cycles’ system vs more established forms of contraception — pointing out that:

The Natural Cycles app required considerably more user input than most forms of contraception, with the need to take and input body temperature measurements several times a week, recording when intercourse had taken place, supplemented with LH measurements, abstention or alternative methods of contraception during the fertile period.

The company also remains under investigation in Sweden by the medical regulator after a local hospital reported a number of unwanted pregnancies among users of the app.

Despite all that, Natural Cycles’ website bills its product as “effective contraception”, claiming the app is “93% effective under typical use” and making the further (and confusingly worded) claim that: “With using the app perfectly, i.e. if you never have unprotected intercourse on red days, Natural Cycles is 99% effective, which means 1 woman out of 100 get pregnant during one year of use.”

Perfect use of the app actually means a woman would accurately perform daily measurement of her body temperature without fail or fault, and before she’s even sat up in bed, at least several times a week, correctly inputting the data. Forgetting to do so once because — say — you got up to go to the toilet or were otherwise interrupted before taking or inputting a reading could constitute imperfect use.

The BBC spoke to a women who says she made the decision to use the app after seeing that 99% effective claim in Natural Cycles’ marketing on Instagram — and subsequently fell pregnant while using it. “I was sort of sucked into this “99% effective” [claim],” she told the broadcaster. “You know “even more effective than the pill”… What could possibly go wrong?”

In its ruling, the regulator said it investigated two issues related to the advert run by Natural Cycles on Facebook on July 20, 2017, and both issues were upheld.

The complaints were that Natural Cycles’ advert included misleading and unsubstantiated claims — specifically that the product was: 1. “Highly accurate contraceptive app”; and 2. “Clinically tested alternative to birth control methods”.

Natural Cycles told the ASA that the latter claim is in fact a quote from a Business Insider article which it “considered to be correct” and had thus reproduced in its marketing.

After taking expert evidence, and reviewing three published papers on accumulated data obtained from the app, the regulator deemed the combination of the two claims to be misleading.

It writes:

We considered that in isolation, the claim “clinically tested alternative to birth control methods” was unlikely to mislead. However, when presented alongside the accompanying claim “Highly accurate contraceptive app”, it further contributed to the impression that the app was a precise and reliable method of preventing pregnancies which could be used in place of other established birth control methods, including those which were highly reliable in preventing unwanted pregnancies. Because the evidence did not demonstrate that in typical-use it was “highly accurate” and because it was significantly less effective than the most reliable birth control methods, we considered that in the context of the ad the claim was likely to mislead.

The ASA also found the advert to have breached rules for substantiation and exaggeration of marketing messages in the Medicines, medical devices, health-related products and beauty products category, as well as being misleading.

At the time of writing Natural Cycles had not responded to requests for comment.

Cloudian, a company that specializes in helping businesses store petabytes of data, today announced that it has raised a $94 million Series E funding round. Investors in this round, which is one of the largest we have seen for a storage vendor, include Digital Alpha, Fidelity Eight Roads, Goldman Sachs, INCJ, JPIC (Japan Post Investment Corporation), NTT DOCOMO Ventures and WS Investments. This round includes a $25 million investment from Digital Alpha, which was first announced earlier this year.

With this, the seven-year-old company has now raised a total of $174 million.

As the company told me, it now has about 160 employees and 240 enterprise customers. Cloudian has found its sweet spot in managing the large video archives of entertainment companies, but its customers also include healthcare companies, automobile manufacturers and Formula One teams.

What’s important to stress here is that Cloudian’s focus is on on-premise storage, not cloud storage, though it does offer support for multi-cloud data management, as well. “Data tends to be most effectively used close to where it is created and close to where it’s being used,” Cloudian VP of worldwide sales Jon Ash told me. “That’s because of latency, because of network traffic. You can almost always get better performance, better control over your data if it is being stored close to where it’s being used.” He also noted that it’s often costly and complex to move that data elsewhere, especially when you’re talking about the large amounts of information that Cloudian’s customers need to manage.

Unsurprisingly, companies that have this much data now want to use it for machine learning, too, so Cloudian is starting to get into this space, as well. As Cloudian CEO and co-founder Michael Tso also told me, companies are now aware that the data they pull in, no matter whether that’s from IoT sensors, cameras or medical imaging devices, will only become more valuable over time as they try to train their models. If they decide to throw the data away, they run the risk of having nothing with which to train their models.

Cloudian plans to use the new funding to expand its global sales and marketing efforts and increase its engineering team. “We have to invest in engineering and our core technology, as well,” Tso noted. “We have to innovate in new areas like AI.”

As Ash also stressed, Cloudian’s business is really data management — not just storage. “Data is coming from everywhere and it’s going everywhere,” he said. “The old-school storage platforms that were siloed just don’t work anywhere.”

Vermont Senator Bernie Sanders is seeking additional information about the working conditions in Amazon warehouses in advance of legislation he’s preparing to introduce on September 5. 

Income inequality was, after all, the centerpiece of Sanders’ 2016 presidential campaign. It was a populist message that resonated strongly with voters, giving the dark horse candidate a boost among concerned progressives and independents during a tooth and nail primary battle.

But while the message, perhaps, wasn’t enough to put him over the top, it’s a mission that’s remained central to Sanders’ work on Capitol Hill, finding him taking aim at some of the world’s largest corporations. In recent months, Amazon has been in the senator’s sights.

Earlier today, Sanders tweeted out a link asking employees of the online retail giant to share their experiences working for the company. The form allows current and former Amazon employees to share their stories either on the record or anonymously. It asks whether workers “struggle[d] with the demanding working conditions,” and whether they required public assistance.

In a phone call today, Sanders told TechCrunch that his office already knows enough about the working conditions in Amazon warehouses, but is seeking additional information as it prepares to introduce legislation on September 5.

“We know that the median salary for Amazon employees is about $28,000,” the Senator told TechCrunch. “And about half the workers who work for Amazon make less than $28,000 a year.”

It’s easy to see why the company has become a prime target for Sanders. A recent SEC filing put the median salary at $28,446 — less than owner Jeff Bezos makes every 10 seconds.

“We have every reason to believe that many, many thousands of Amazon workers in their warehouses throughout the country are earning very low wages,” Sanders explained. “It’s hard to get this information. Amazon has not been very forthcoming. From what information we’ve gathered, one out of three Amazon workers in Arizona, as we understand it, are on public assistance. They are receiving either Medicaid, food stamps or public housing.”

The Senator acknowledges that nothing about what Amazon is doing, on the face of it, is breaking any laws. But the discrepancy between its highest and lowest wage earners is enough for him to call into question why government subsidies are required to buoy those on the bottom rung. This is precisely what the proposed legislation aims to address.

Put simply, Sanders says we have every reason to believe that the richest man in the world can afford to pay employees more.

“The taxpayers in this country should not be subsidizing a guy who’s worth $150 billion, whose wealth is increasing by $260 million every single day,” said Sanders. “That is insane. He has enough money to pay his workers a living wage. He does not need corporate welfare. And our goal is to see that Bezos pays his workers a living wage.”

While Amazon is notoriously tight-lipped about matters these matters, the company has been on the defensive since the senator made it a kind of pet project. Amazon won’t comment directly on the forthcoming legislation until it’s made official, but the company did provide TechCrunch with comment regarding the blowback.

“We encourage anyone to compare our pay and benefits to other retailers,” an Amazon spokesperson told TechCrunch. “Amazon is proud to have created over 130,000 new jobs last year alone. These are good jobs with highly competitive pay and full benefits. In the U.S., the average hourly wage for a full-time associate in our fulfillment centers, including cash, stock, and incentive bonuses, is over $15/hour before overtime. That’s in addition to our full benefits package that includes health, vision and dental insurance, retirement, generous parental leave, and skills training for in-demand jobs through our Career Choice program, which has over 16,000 participants.”

Amazon further suggests that those interested in learning more about warehouse conditions book a tour of one of its fulfillment centers to “see for themselves.” 

A representative from Sanders’ office tells TechCrunch that Amazon invited the senator on a tour of a fulfillment center, and he plans to take the company up on the offer.

Of course, the concerns over Amazon’s treatment of workers aren’t new. Mother Jones ran an exposé of what it was like working as an Amazon warehouse slave in 2012. In 2013, Gawker published a series of emails from employees discussing life in fulfillment centers citing things like “unrealistic goals,” “very short breaks” and “below zero temps” in warehouses. A protestor cited by The Guardian in 2014 said it was better to be homeless than work for the retailer. And, most recently, Business Insider documented the “horror stories” faced by the Amazon warehouse workers, including nonstop surveillance and so little ability to take breaks, they couldn’t even use the facilities, when needed.  

Amazon has since been on something of a charm offensive in response to those PR headaches.

Last week, there was the odd phenomenon of an army of Twitter accounts claiming to be warehouse workers who were serving up similar talking points.

“Hello!” one wrote, cheerfully. “I work in an Amazon FC in WA and our wages and benefits are very good. Amazon pays FC employess [sic] ~30% more than traditional retail stores and offers full medical benefits from day 1. Working conditions are very good- clean/well lit- Safety is a top priority at my facility!”

That Amazon positions its own offerings as “highly competitive” can, perhaps, be seen as something of an indictment of larger issues with warehouse fulfillment. While the company is an easy target, it’s certainly not alone. And Sanders notes that his office is casting the net wider than just Amazon. Disney and Walmart have also been targeted by the senator.

In June, Sanders told a crowd at an Anaheim church, “I want to hear the moral defense of a company that makes $9 billion in profits, $400 million for their CEOs and have a 30-year worker going hungry. Tell me how that is right.” 

A month later, he took to Twitter to call out CEO Bob Iger directly, writing, “Does Disney CEO Bob Iger have a good explanation for why he is being compensated more than $400 million while workers at Disneyland are homeless and relying on food stamps to feed their families?”

Earlier this week, however, Disney reached an agreement with the Walt Disney World union to pay workers a $15 minimum wage.

“We’ve seen real progress at the Disney corporation,” Sanders told TechCrunch, “and I believe that Jeff Bezos can play a profound role in American society today if he were to say, ‘yes, I’m the richest guy in the world. I will pay my workers a living wage at least $15 and make sure all of my workers have the security and dignity they need. I will improve conditions.’”

Amazon and Walmart, meanwhile, remain the two key targets for the impending legislation. With Democrats in the minority in the U.S. Senate, it seems unlikely that a hearing will be called where Bezos would be asked to testify à la Mark Zuckerberg, but the senator plans to go ahead with the legislation next week, regardless.  

“That legislation is pretty simple,” explained Sanders. “It says: if you are a large company of 500 or more employees and you’re paying your workers wages that are so low that they have to go on food stamps, Medicaid, public housing, etc., then you have to pay taxes commensurate to how much the government is now spending for that assistance. It’s going to be the employer – the Jeff Bezos, the Walton family – who will pick up the tab for these public assistance programs, rather than the middle class of the country.”

Sarah Kunst has filed to raise $10 million for her debut venture capital fund, Cleo Capital. According to Axios, the firm will give cash to female entrepreneurs who will act as scouts. 

Scouts look for viable early-stage startups for firms to invest in and then receive a cut of the profits on the investments. Kunst, pictured above, is a scout for Sequoia; it’s unclear if that will change now that she’s running her own firm. She’s also the founder of ProDay, a fitness tech startup that had raised at least $500,000 from angel investors, including Arielle Zuckerberg, but folded earlier this year.

We’ve reached out to Kunst for comment.

Cleo isn’t the only female-focused fund with which Kunst is involved. She joined Bumble as a senior adviser in February, and earlier this month, the popular dating app announced the launch of a VC fund targeting early-stage startups with women at the helm. Kunst is co-leading fund strategy alongside Bumble’s COO, Sarah Jones Simmer.

It’s no surprise Kunst is working to deploy capital to the next generation of female-founded companies. She’s been actively championing female and minority founders at least for the last several years and was one of the most vocal in the industry during tech’s #MeToo moment.

She spoke to The New York Times last year about her experience with 500 Startups founder Dave McClure, who sent her inappropriate messages on Facebook in 2014. McClure followed up with a public apology in the form of a Medium post titled “I’m a creep. I’m sorry,” and shortly after resigned from the accelerator. 

Kunst spoke at TechCrunch Disrupt last year a few months after The New York Times piece was published. On a panel focused on diversity in tech, she called out tech founders for a lack of diverse hiring practices: “I do this crazy thing that is hiring people that aren’t just white dudes. It works really great — you guys should try it,” she said.

In 2017, only 11.3 percent of partners at VC firms were women, according to PitchBook data. Female founders, meanwhile, raised just 2.2 percent of all venture funding.

On the bright side, it looks like more women are fundraising on the other side of the table. Women-run VC firms have gathered nearly $2.5 billion so far this year, putting them on pace to surpass last year’s decade high of $3.2 billion. That includes Cowboy Ventures’ $95 million fundraise and Aspect Ventures’ $181 million sophomore vehicle. Cowboy is led by Aileen Lee, a former partner at Kleiner Perkins, while Aspect is co-led by former Draper Fisher Jurvetson managing director Jennifer Fonstad and former Accel partner Theresia Gouw.

While cryptocurrencies have generated the lion’s share of investment and attention to date, I’m more excited about the potential for another blockchain-based digital asset: security tokens.

Security tokens are defined as “any blockchain-based representation of value that is subject to regulation under security laws.” In other words, they represent ownership in a real-world asset, whether that is equity, debt or even real estate. (They also encompass certain pre-launch utility tokens.)

With $256 trillion of real-world assets in the world, the opportunity for crypto-securities is truly massive, especially with regards to asset classes like real estate and fine art that have historically suffered from limited commerce and liquidity. As I’ve written previously, imagine if real estate was tokenized into security tokens that you could trade as safely and easily as you do stocks. That’s where we’re headed.

There’s a lot of forward momentum around tokenized securities, so much so that based on their current trajectory, I believe security tokens are going to become a common part of Wall Street parlance in the near future. Investors won’t just be able to buy and sell tokens on mainstream exchanges, however; “crypto-native” companies are also throwing their hats into this ring.

The starter pistol has been fired

 

Because Bitcoin and other cryptocurrencies are not classified as securities, it’s been much easier to facilitate trading on a large scale. Security tokens are more complex, requiring not just capabilities around trading, but also issuance and, critically, compliance. (See more of my thoughts on compliance here.) It’s a major undertaking, which is why we haven’t seen the Coinbase or Circle of security token trading emerge yet (or seen these companies expand their platforms to address this—more on that later).

Meanwhile, regular exchanges are blazing the trail and moving into providing tokens trading. The founder and chairman of the company that owns the NYSE announced a new venture, Bakkt, that would provide an on-ramp for institutional investors interested in purchasing cryptocurrencies. Last month, the SIX Swiss Exchange—Switzerland’s principal stock trading exchange—announced plans to build a regulated exchange for tokenized securities. The trading and issuing platform, SIX Digital Exchange, will adhere to the same regulatory standards as the non-digital exchanges and be overseen by Swiss financial regulators.

This announcement confirms a few things:

1. Most assets (stocks, bonds, real estate, etc) will be tokenized and supported on regulated trading platforms.

2. Incumbents like SIX have a head start due to their size, regulatory licensing and built-in user base. They are likely to use this advantage to defend their position of power.

3. Most investors will never know they are using distributed ledger technology, let alone trading tokenized assets. They will simply buy and sell assets as they always have.

I expect other major financial exchanges to follow SIX’s lead and onboard crypto trading before long. I can imagine them salivating over the trading fees now, Homer Simpson style.

 

Crypto companies are revving their engines

Stock exchanges won’t have the space to themselves, however. Crypto companies like Polymath and tZERO have already debuted dedicated platforms for security tokens, and all signs indicate announcements from Circle and Coinbase unveiling their own tokenized asset exchanges are not far behind.

Coinbase is much closer to offering security token products after acquiring a FINRA-registered broker-dealer in June, effectively backward-somersaulting its way into a state of regulatory compliance. President and COO Asiff Hirji all but confirmed crypto-securities are in the company’s roadmap, saying that Coinbase “can envision a world where we may even work with regulators to tokenize existing types of securities.”

Circle is also laser-focused on security tokens. Circle CEO and co-founder Jeremy Allaire explained the company’s acquisition of crypto exchange Poloniex and launch of app Circle Invest in terms of the “tokenization of everything.” In addition, it is pursuing registration as a broker-dealer with the SEC to facilitate token trading—it could also attempt to take the same backdoor acquisition approach as Coinbase.

If there’s a reason Circle and Coinbase haven’t moved into security token services even more rapidly, it’s that there simply aren’t that many security tokens yet. Much of this is due to the lack of compliance and issuance platforms, keeping high-quality securities on legacy systems issuers feel more comfortable with. As projects like Harbor ramp up more, this comfort gap will grow smaller and smaller, driving the big crypto players deeper into security token services.

The old guard vs. the new wave

 

This showdown between traditional finance incumbents and crypto giants will be worth watching. One is incentivized to preserve the status quo, while the other is looking to create a new, more global financial system.

The Swiss SIX Exchanges of the world enjoy some distinct advantages over the likes of Coinbase — they have decades of traditional financial operating experience, deep relationships throughout the industry and a head start on regulatory compliance. Those advantages probably mean that such incumbents will probably be the first to make infrastructural and logistical upgrades to their systems using security tokens. The first time you interact with a security token, it is likely to be through the Nasdaq.

Having said that, incumbents’ greatest disadvantage will be transporting an old-finance-world mentality to these innovations. Coinbase, Circle, Polymath, Robinhood and other newer players are better suited to harnessing the stepchange elements of security tokens — particularly asset interoperability and imaginative security design.

University of Oregon Professor Stephen McKeon, an authority on security tokens, told me that “the potential for programmable securities to enable the expression of new investment types is the most exciting feature.” Harbor CEO Josh Stein explained why private securities in particular will be transformed: “by automating compliance, issuers can allow their investors to trade to the limit of their liquidity across multiple exchanges. Now imagine a world where buyers and sellers around the world can trade 24/7/365 with near instantaneous settlement and no counterparty risk – that is something only possible through blockchain.”

Those hypergrowth startups are going to experiment with these new paradigms in ways that older firms won’t think of. You can see evidence of this forward thinking in Circle’s efforts to build a payment network that allows Venmo users to send value to Alipay users — exactly embracing interoperability, if not in an asset sense.

The race is on

As Polymath’s Trevor Koverko and Anthony “Pomp” Pompliano have been saying for the past year, the financial services world is moving towards security tokens. As the crypto economy matures, we’re inching closer to a new era of real-world assets being securitized on the blockchain in a regulatory compliant manner.

The challenge for both traditional and crypto exchanges will be to educate investors about this new way to buy and sell investments while powering these securities transactions via a smooth, seamless experience. Ultimately, security tokens lay the groundwork for granting investors their biggest wish — the ability to trade equity, debt, real estate and digital assets all on the same platform.