As limited partners increasingly demand greater exposure to emerging market opportunities, venture capital firms with a focus on Asia are bulking up their funds and chasing deals in an increasingly competitive race to own stakes in the next generation of local startups with global aspirations.

Over the last year, firms including DCM Ventures, GGV Capital, Matrix Partners China, and Qiming Venture Partners have all significantly increased the targets for their new funds. If each firm hits their targets, there’s roughly $4.4 billion in new capital that could be flooding into an already scorching market for investment into Chinese startups, according to SEC filings.

The largest of these new funds, by far, is GGV Capital, which has registered a new $1.8 billion fund with the Securities and Exchange Commission. Qiming Ventures has targeted $900 million for its latest fund, while DCM Ventures and Matrix Partners China are each looking for $750 million for their own new investment vehicles, according to securities filings.

Managing partners at the firms did not respond to a request for comment.

These four firms are among the last standing from the initial flood of U.S.-based venture capital firms that poured into Asia (and China specifically) in the first decade of the new millennium.

While marquee names like Kleiner Perkins, DFJ and others foundered in China, these four firms (along with global venture capital juggernauts like Sequoia Capital and NEA) put down deep roots and notched notable wins with investments in startups like Didi-Chuching, Kuaidi, Meituan-Dianping, Xiaomi, and many many more.

In part, these massive new funds are simply a response to the new world that venture investors find themselves in thanks to the massive amounts of capital raised by SoftBank with its $100 billion Vision Fund, or Sequoia with its $9 billion new investment vehicle.

Firms are also under pressure to raise more capital from limited partners, who want to reduce their exposure and consolidate their own investments around venture firms with track records of success and the ability to deploy capital into larger checks.

Couple those facts with the (still) low cost of capital given where interest rates are, and the sustained growth of technology companies across emerging market geographies, and you have a more willing pool of investors that want to commit more capital to emerging technology ecosystems (this is happening in Latin America too).

But there are also some contours of China’s competitive environment that are pushing these venture capital firms to raise increasingly larger funds.

One is the sheer size of the opportunity that exists for new technology companies in China. As the WeChat messaging service increasingly evolves into a new operating system, there are opportunities to scale quickly with larger infusions of capital to capture the market.

Like their peers in the U.S., Chinese companies are also delaying their public offerings and spending more time to build a better outcome with their IPOs. That’s putting pressure on earlier stage investors to raise capital so they don’t get crowded out in those later stage rounds.

Chinese entrepreneurs are also often putting in their own money to finance companies at the earliest stages, which means startups are more mature when they’re seeking their first round. It’s this phenomenon which leads to the $100 million Series A and B rounds that crop up in the Chinese market more regularly than in the U.S.

The Gillmor Gang — Frank Radice, Keith Teare, Michael Markman, and Steve Gillmor . Recorded live Tuesday, August 7, 2018.
Waiting for the midterms, Twitter meets the Constitution, uncommon carriers, straw man superheros.

G3: Helping Hands — Elisa Camahort Page, Francine Hardaway, Maria Ogneva, and Tina Chase Gillmor. Recorded live Friday, August 3, 2018.

@stevegillmor, @fradice, @mickeleh, @kteare

Produced and directed by Tina Chase Gillmor @tinagillmor

Liner Notes

Live chat stream

The Gillmor Gang on Facebook

G3: Helping Hands

G3 chat stream

G3 on Facebook

In the future everyone will be naked for fifteen minutes. It’s with this novel thought in mind that I connect with a model named Nazanin who will walk me through the new world of bi-directional teledildonic cam life.

I was there to test a new device from Kiiroo called the Kiiroo Launch. This novel sex jar connects with a Flashlight – essentially a masturbator – and can send and receive signals from a remote dildo. When I first explored the Kiiroo system three years ago and found it fascinating although, arguably, it was like having sex with a 3D printer. And so I was ready to work with Nazanin.

This is going to be NSFW by the way.

Bi-directional, you say?

In the world of cam-based teledildonics the models usually wear some sort of vibrator connected to a tipping system. When the viewer tips them the model’s vibrator vibrates, adding a frisson of interactivity to what is usually a one-way street. This became the norm for most cam sites and the Lush from Lovense is a popular choice in the current cam world.

What Kiiro has done is add that level of interactivity to its offerings. The Launch, for example, can send sensations to other devices including the OhMiBod, the We-Vibe, and the Kiiroo Pearl. You can either vibrate any of these things with tips or, in some cases, send signals from the Launch to the vibrator which sort of mimic your movements in real time.

Cam site Flirt4Free is the first site to enable this functionality and was also one of the first to enable Kiiroo in general, allowing models to send sensations to viewers using a robotic sex jar.

I told you this would be NSFW.

Sex jar, you say?

The experience, for the most part, was quite pleasant. The Launch is an excellent device – Engadget loved it – and it is far superior to the original Kiiroo Onyx I reviewed a few years ago. The Launch is a massive thing that holds an entirely separate sex toy inside it and it literally looks like a giant black egg sack.

I connected with the model using an app called Feel Connect that uses QR codes to link two phones or devices. In this case I linked to Nazanin’s room directly during a private session. Private sessions on Flirt4Free are paid in credits and you get 1050 credits for $100. Each model sets up their own pricing system – 40 credits per minute, for example – and once you’re in private you can talk, flirt, and show each other your bits.

In this case we were testing a device for science so Nazanin and I began a mating dance involving the swapping of QR codes and the preparation of various robotic attachments. The game proceeded apace with my signals reaching her and hers reaching me and I found myself asking fewer and fewer journalistic questions as the interview continued. She said she liked the feelings I was sending and I enjoyed the feelings she sent. It was, in the end, like a Slack room but naked.

“Up until now, performers have been using ‘read-only’ interactive devices, which react to the wildly popular tip-by-sound functionality,” said Flirt4Free President Greg Clayman .
“With compatible devices, clients can now play with their device, causing the model’s device to react- and the model can also control their device, resulting in the most realistic, mind-blowing experience ever!”

Ultimately I suspect most of us will have something like this in the home. Given the prevalence of masturbation in the human mammal and our lifelong dedication to technology, I can imagine this being just another way for all of us to get off. While it’s not perfect – my battery went dead during the session – nothing really is and I suspect the camaraderie and hearty hail-fellow-well-met nature of video sex will make a few converts over the next few years.

Ultimately tech touches everything. The fact that I’m able to send a message – be it an email or a vibration – around the world is fascinating. And as tech enters our lives more and more completely tools like the Launch will become commonplace. We trade a lot for this evolution of pleasure, to be sure, but we gain much as well. Nazanin said she liked it too, which was nice.

I told you this was going to be NSFW, didn’t I?

The inside of data centers is loud and hot — and keeping servers from overheating is a major factor in the cost of running them. It’s no surprise then that the big players in this space, including Facebook, Microsoft and Google, all look for different ways of saving cooling costs. Facebook uses cool outside air when possible, Microsoft is experimenting with underwater data centers and Google is being Google and looking to its AI models for some extra savings.

A few years ago, Google, through its DeepMind affiliate, started looking into how it could use machine learning to provide its operators some additional guidance on how to best cool its data centers. At the time, though, the system only made recommendations and the human operators decided whether to implement them. Those humans can now take longer naps during the afternoon, because the team has decided the models are now good enough to give the AI-powered system full control over the cooling system. Operators can still intervene, of course, but as long as the AI doesn’t decide to burn the place down, the system runs autonomously.

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The new cooling system is now in place in a number of Google’s data centers. Every five minutes, the system polls thousands of sensors inside the data center and chooses the optimal actions based on this information. There are all kinds of checks and balances here, of course, so the chances of one of Google’s data centers going up in flames because of this is low.

Like most machine learning models, this one also became better as it gathered more data. It’s now delivering energy savings of 30 percent on average, compared to the data centers’ historical energy usage.

One thing that’s worth noting here is that Google is obviously trying to save a few bucks, but in many ways, the company is also looking at this as a way of promoting its own machine learning services. What works in a data center, after all, should also work in a large office building. “In the long term, we think there’s potential to apply this technology in other industrial settings and help tackle climate change on an even grander scale,” DeepMind writes in today’s announcement.

Elon Musk, the embattled chief executive of electric automaker and sustainable energy company Tesla, tried to “set the record straight” about his recent behavior in an hour-long exclusive interview with the New York Times. Instead, it only served to further underscore how out-of-touch the billionaire chief executive seems from the ongoing operations at his company. The fallout has already begun with shares falling in early trading.

His erratic behavior could cost investors billions and potentially destroy a company that has, in fact, revolutionized the automotive industry in America.

In the wide-ranging interview, Musk acknowledged the personal and physical toll running Tesla was taking on him and tried to explain away his recent behavior.

The latest drama began with a simple midday tweet last week indicating that Musk had secured funding to take Tesla private at a price of $420 per share.

The number (which is both within the range of a 20% premium of Tesla shares at the time, and a code with special significance for people who smoke marijuana), the timing of the announcement, and the medium on which it was issued all raised eyebrows.

From there, it has pretty much been all downhill for Musk and Tesla as the company’s executive bounced from one public relations blunder to another.

There are the allegations of illegal drug use, which Musk feebly addresses in his interview, saying:

“I was not on weed, to be clear,” he said.

“Weed is not helpful for productivity. There’s a reason for the word ‘stoned.’ You just sit there like a stone on weed.”

Reporting from the Times also contradicts another assertion that Musk made in the interview — which is that Tesla’s board is not seeking someone to take the reins as a chief operating officer at the company. Something which would indubitably help take some of the pressures of running the business off of Musk’s shoulders.

The chief executive acknowledged the physical toll that managing Tesla has taken on him, but said that he does not regret any of his recent actions.

Given that the Securities and Exchange Commission is investigating the circumstances around the tweet, that may be another position that is subject to revision.

It’s been a long, hot summer for Tesla’s operations and Musk has only exacerbated problems for the company with his very public complaints about short sellers, whistle-blowers, reporters, analysts and others who have openly questioned the company’s viability.

There are very real concerns about production of the company’s newest model, alongside claims from whistleblowers that the pressures of meeting deadlines for the new car have led to cutting corners on safety.

Throughout all of it, Tesla’s board has remained firmly committed to protecting Musk and preserving his role as chief executive officer.

As the board said in a statement it released to the Times: 

“There have been many false and irresponsible rumors in the press about the discussions of the Tesla board,” the statement said. “We would like to make clear that Elon’s commitment and dedication to Tesla is obvious. Over the past 15 years, Elon’s leadership of the Tesla team has caused Tesla to grow from a small start-up to having hundreds of thousands of cars on the road that customers love, employing tens of thousands of people around the world, and creating significant shareholder value in the process.”

Perhaps the best thing that the company’s caretakers can do now, is ensure that Musk gets some help (in the c-suite — and potentially outside of it).

It seems from the interview that Musk is asking for the same thing.

“[If] you have anyone who can do a better job, please let me know. They can have the job. Is there someone who can do the job better? They can have the reins right now,” Musk told the Times. 

Back at CES in January, Google put on a big show with the launch of a new product category designed to take on Amazon’s Echo Show and Spot. Three companies — LG, Lenovo and JBL — were waiting in the wings with their own take on the screen-powered smart speaker.

Google itself, on the other hand, was conspicuously absent. The company seemed content to rely on third-party hardware makers to do the heavy lifting in taking on Amazon. According to a new report from Nikkei Asian Review, however, the company is planning a screen sporting Home device before year’s end.

Lenovo’s Smart Display — the best looking of the original trio — launched late last month. Google, meanwhile, has been actively courting hardware makers to develop their own take on the product. At I/O, the company even handed out prototyping kits to attendees.

The strategy seemed a bit surprising, given the success Google has had with its own Home line. A recent report from Canalys shows a 449 percent year over year growth in global shipments, putting the company comfortably ahead of Amazon. If nothing else, however, letting manufacturers go first here was a vote of confidence that Google would continue to support third-party use of Google Assistant, even as it expands its own Home line.

Given the expected launch of the Pixel 3 in October, Google could well have the perfect platform to showcase new Home products just in time for the holidays.

According to recent reports, Facebook has updated its Commerce Policy to specifically ban the sale of Kodi boxes on its site – that is, devices that come with pre-installed Kodi software, which are often used for illegally streaming digital content. However, the ban is not a new one – Facebook confirms its policy on Kodi box sales hasn’t changed since last summer, and its external Policy Page – the one being cited as evidence of the new ban – was updated in December.

It’s true that the changes have flown under the radar until now, though.

The policy change was first reported by Cord Cutters News, and later linked to by TorrentFreak and Techdirt.

The original report claims that Facebook added a new rule on its list of “Digital Media and Electronic Devices” under “Prohibited Content,” which specifically calls out Kodi boxes. It says that Facebook posts “may not promote the sale of devices that facilitate or encourage streaming digital content in an authorized manner or interfering with the functionality of electronic devices.”

The Policy page lists a few examples of what this means, including wiretapping devices, jamming or descrambling devices, jailbroken or loaded devices, and, then “promoting the sale or use of streaming devices with Kodi installed.” (The only permitted items are “add-on equipment for Kodi devices, such as keyboards and remotes.”)

But this ban on Kodi boxes, Facebook says, is not a recently implemented policy.

According to a Facebook spokesperson, it launched a new policy last summer that prohibited the sale of electronic devices that facilitate or are intended for unauthorized streaming or access to digital content – including Kodi boxes. This policy has not changed since last summer, but its external Policy Page – this one being cited by the various reported – was updated in December 2017 to offer additional illustrative examples and more detailed information on all its policies, including the one related to unauthorized streaming devices.

In other words, Facebook has been banning Kodi boxes since it decided to crackdown on unauthorized streaming devices last year. It’s just now being noticed.

The ban affects all posts on Marketplace, Buy and Sell Groups, and Shop Sections on Pages.

Facebook explains it takes a very strong enforcement approach when “Kodi” is mentioned with a product for sale.

As Techdirt pointed out, that’s problematic because the Kodi software itself is actually legal.

However, device makers like Dragon Box or SetTV have been using the open-source Kodi platform and other add-ons to make copyright infringement easier for consumers.

Facebook does seem to understand that Kodi software isn’t illegal, but it knows that when “Kodi” is mentioned in a product (e.g. a device) listing, it’s very often a product designed to circumvent copyright. The company tells us that its intent is not to ban Kodi software altogether, however, and it’s in the process of reviewing its guidelines and these examples to more closely target devices that encourage unauthorized streaming.

That could mean it will, at some point, not outright ban a device that includes Kodi software, but focus more on other terms used in the sale, like “fully loaded” or some sort of description of the illegal access the box provides, perhaps. (Facebook didn’t say what might change.)

As for Kodi, the company says Facebook’s move doesn’t affect them.

“It doesn’t impact us, since we don’t sell devices,” says Keith Herrington, who handles Business Relations at the XBMC Foundation (Kodi).

He said his organization would love to talk to someone at Facebook – since they’ve never been in touch – in order to ensure that devices that are in compliance with Kodi’s trademark policy are not banned. Both Amazon and eBay have worked with Kodi on similar policies, he added.

“We’ve gotten thousands of devices which were in violation of our trademark policy removed from eBay,” Herrington said.

It’s unclear how well-enforced Facebook’s ban really is – I’m in Facebook groups myself where people talk about how to jailbreak “Fire sticks” and include posts from those who sell them pre-jailbroken. (It’s for research purposes. Ahem.)

Industry crackdowns go beyond Facebook

Facebook isn’t the only company that’s attempting to crack down on these devices. Netflix, Amazon and the major studios are suing Dragon Box for facilitating piracy by making it easy for consumers to access illegal streams of movies and TV shows.

In January 2018, a U.S. District Court judge handed down a preliminary injunction against TickBox TV, a Georgia-based set-top box maker that was sued by the major studios, along with streaming services Netflix and Amazon, for profiting from the sale of “Kodi boxes.”

Google has removed the word “kodi” from the autocomplete feature of Search, along with other piracy-related terms.

And more recently, the FCC asked Amazon and eBay to stop selling fake pay TV boxes. It said these boxes often falsely bear the FCC logo to give them the appearance of legitimacy, but are actually used to  perpetuate “intellectual property theft and consumer fraud,” the FCC said in letters to Amazon CEO Jeff Bezos and eBay CEO Devin Wenig.

Why Streaming Piracy is Growing

There’s a reason Kodi devices are so popular, and it’s not just because everyone is being cheap about paying for access to content.

For starters, there’s a lack of consequence for consumers who do illegally stream media – it’s not like back in the day when the RIAA was suing individuals for pirating music. While there has been some activity – Comcast several years ago issued copyright infringement notices to Kodi users, for example – you can today basically get away with illegal streaming. The copyright holders are currently focused on cutting off piracy at the source – box makers and the platforms that enable their sale – not at the individual level.

The rise of cord cutting has also contributed to the issue by creating a highly fragmented streaming ecosystem. Shows that used to be available under a single (if pricey) cable or satellite TV subscription, are now spread out across services like Netflix, Amazon, Hulu, Sling TV, HBO NOW, and others used by cord cutters.

Customers are clearly willing to pay for some of these services (largely, Netflix and maybe one or two others), but most can’t afford a subscription for each one. And they definitely don’t want to when all they’re after is access to a single show from a network. That’s another reason they then turn to piracy.

Finally, there is the fact that film distributors have forever withheld their movies from streaming services for months, creating a demand for illegal downloads and streams. Though the release window has shrunk some in more recent years, the studios haven’t yet fully bought into the idea of much smaller windows to cater to the audience who will never go to the theater to watch their movie. And when this audience is cut out the market, they also turn to piracy.

Eventually, the record industry adapted to consumers’ desire for streaming, and services like Spotify and Apple Music emerged. Eventually, streaming services may be able to make piracy less attractive, too. Amazon Channels, could become a key player here if it expands to include more add-ons. Today, it’s the only true a la carte TV service available. And that perhaps – not skinny bundles – is what people really want.

Four days after admitting that it continues to track users even after the Location History tracking has been disabled, Google has updated its website to more accurately reflect the nature of its location policy. 

“This setting does not affect other location services on your device, like Google Location Services and Find My Device,” the updated Google Account Help page now reads. “Some location data may be saved as part of your activity on other services, like Search and Maps. When you turn off Location History for your Google Account, it’s off for all devices associated with that Google Account.”

The update was noted by the Associated Press, which first brought the tracking issue to light earlier this week in a report. Google initially denied its own inaccurate reporting, but later backtracked, adding that it had added clarifying language.

The company told TechCrunch earlier this week,

Location History is a Google product that is entirely opt in, and users have the controls to edit, delete, or turn it off at any time. As the story notes, we make sure Location History users know that when they disable the product, we continue to use location to improve the Google experience when they do things like perform a Google search or use Google for driving directions.

Google further clarified that it had tweaked the language to offer more insight into continued tracking. The company told AP, “We have been updating the explanatory language about Location History to make it more consistent and clear across our platforms and help centers.”

Of course, fixing the language on a Help page isn’t the same as addressing the issue of continued tracking. Nor does it fully clarify the company’s tracking policy. And let’s be honest, most users will never see the Help page with that information listed. Transparency on the issues goes a long way when it comes to maintaining consumer trust.

Klarity, a member of the Y Combiner 2018 Summer class, wants to automate much of the contract review process by applying artificial intelligence, specifically natural language processing.

Company co-founder and CEO Andrew Antos has experienced the pain of contract reviews first hand. After graduating from Harvard Law, he landed a job spending 16 hours a day reviewing contract language, a process he called mind-numbing. He figured there had to be a way to put technology to bear on the problem and Klarity was born.

“A lot of companies are employing internal or external lawyers because their customers, vendors or suppliers are sending them a contract to sign,” Antos explained They have to get somebody to read it, understand it and figure out whether it’s something that they can sign or if it requires specific changes.

You may think that this kind of work would be difficult to automate, but Antos said that  contracts have fairly standard language and most companies use ‘playbooks.’ “Think of the playbook as a checklist for NDAs, sales agreements and vendor agreements — what they are looking for and specific preferences on what they agree to or what needs to be changed,” Antos explained.

Klarity is a subscription cloud service that checks contracts in Microsoft Word documents using NLP. It makes suggestions when it sees something that doesn’t match up with the playbook checklist. The product then generates a document, and a human lawyer reviews and signs off on the suggested changes, reducing the review time from an hour or more to 10 or 15 minutes.

They launched the first iteration of the product last year and have 14 companies using it with 4 paying customers so far including one of the world’s largest private equity funds. These companies signed on because they have to process huge numbers of contracts. Klarity is helping them save time and money, while applying their preferences in a consistent fashion, something that a human reviewer can have trouble doing.

He acknowledges the solution could be taking away work from human lawyers, something they think about quite a bit. Ultimately though, they believe that contract reviewing is so tedious, it is freeing up lawyers for work that requires a greater level of intellectual rigor and creativity.

Antos met his co-founder and CTO, Nischal Nadhamuni, at an MIT entrepreneurship class in 2016 and the two became fast friends. In fact, he says that they pretty much decided to start a company the first day. “We spent 3 hours walking around Cambridge and decided to work together to solve this real problem people are having.”

They applied to Y Combinator two other times before being accepted in this summer’s cohort. The third time was the charm. He says the primary value of being in YC is the community and friendships they have formed and the help they have had in refining their approach.

“It’s like having a constant mirror that helps you realize any mistakes or any suboptimal things in your business on a high speed basis,” he said.