Month: August 2018

It seems like everyone is out there raising new funds in Southeast Asia. Weeks after we reported Golden Gate Ventures hit a first close on its third fund aimed at $100 million, so Openspace Ventures — the Singapore-based firm formerly known as NSI — has announced a final close of $135 million for its second fund.

Founded in 2014 by entrepreneur Hian Goh and finance exec Shane Chesson, Openspace is best known for being an early backer of Indonesian ride-hailing unicorn Go-Jek. A selection of its other investments includes fintech startup FinAccel, e-commerce player Love Bonito, restaurant booking service Chope, health-focused insurance brokerage CXA Group, and bread maker Rotimatic.

Openspace specializes in Series A with a typical check size of $3 million to $5 million, and capital for follow-on deals. Goh told TechCrunch around the time of the first close that the plan is to expand the focus on startups operating marketplaces and/or the e-commerce space to cover emerging verticals such as fintech, health tech and education.

Chesson, his partner, said that in areas like healthcare, progress from startups has been “remarkable” while he sees “great opportunities” to develop new kinds of consumer-centric brands in e-commerce, both B2C and B2B.

Beyond vertical expansion, the firm may also seek opportunities in new geographies — it invested alongside Go-Jek in Bangladesh-based on-demand service Pathao, for example. It also plans to utilize local teams in Thailand, Indonesia and Vietnam and perhaps expand its network to more markets, too.

The target for the capital is Southeast Asia, a region of more than 650 million consumers where rising internet access is creating new opportunities for tech startups and internet-based businesses.

A report co-authored by Google last year forecast the region’s internet economy reaching $200 billion per year by 2025, up from $31 million in 2015. Already, Southeast Asia has more internet users than the U.S. population, and the total value of its digital economy was said to reach $50 million in 2017.

Between 2016 and 2017, investors pumped over $12 billion into Southeast Asia-based startups. It’s an impressive stat, but most of the capital was captured by the largest businesses and that’s why more seed and early-stage funds are needed — and are arriving — in the region.

The Openspace Ventures team

At investor level, there certainly seems to be a growing appetite among global LPs, the investors who fund the funds.

Openspace, for example, was originally targeting a $125 million raise, but the firm said it saw significant interest and so raised the additional figure to “embed deeper regional and operating capabilities” into its team.

Singapore sovereign fund Temasek and U.S. PE firm StepStone Group are among the named LPs. Openspace said others include pension funds, university endowments, insurance companies and family offices across the U.S., Europe, Japan, China and Australia.

“For most of these LPs, Openspace is their first and only investment in this region. For some, they have returned and increased their commitment since fund one,” Chesson told TechCrunch via email. “It has taken some time for LPs of this caliber to get comfortable with the region, but we are pleased that we now have the track record at the fund and the interest in the region to bring them on board.”

“This is a big change from a few years back and is a testament to all the entrepreneurs and ecosystem partners who have developed this market so rapidly. There is still much work to be done though in fulfilling the promise, realizing gains, filling in gaps in the regional capability set and we look forward to being part of this,” he added.

This second pot has already been open and, combined with a $90 million debut fund, the firm has backed 19 startups to date. That portfolio, it said, has raised over $2.6 billion in follow-on capital which, even without $2 billion from Go-Jek, is pretty impressive. Indeed, Openspace says its inaugural fund is ranked the third best performing VC fund in the 2003-2015 bracket, according to investment tracking service Preqin.

911 and other emergency numbers have been a key route for people to contact medical, police or fire services, with some 240 million calls are made for urgent help in the US alone each year. But while calling the numbers is a breeze, sometimes passing on crucial information is far from that, with most of these services built and operating on legacy infrastructure that makes pinpointing accurate locations and getting more detail about the problem (including to determine whether the call might have been in error) is a challenge.

Now a company that has developed a system to improve emergency response is announcing a round of funding in the race to update those platforms.

Carbyne, a startup out of Israel that has developed a new emergency callout platform that helps providers pinpoint a callers’ exact location and enable other services to improve and speed up communication and response times — by some 65 percent on average — has raised $15 million in Series B funding.

The round is significant not just because of the boost that it will give to Carbyne itself, but because of who is doing the backing. Led by Elsted Capital Partners, it also includes Founders Fund, the VC that has backed the likes of Facebook and Airbnb, but also startups that have made strong inroads into working with government and other public sector organizations on data-based services, such as Palantir, Anduril and Deep Mind (now a part of Google).

Previous backers of Carbyne have included the former prime minister of Israel, Ehud Barak, who is also the company’s chairman, and the company has now raised about $24 million, with a valuation that I understand to be in the region of $100 million, although the company is not commenting on the number.

Most of the emergency calling services that are in place around the world were built to be used with legacy wired phone networks. In many countries, however, not only are people doing away with their fixed lines, but they are making these calls from mobile phones — in some cases up to 80 percent of all emergency calls are coming from mobile phones. This means that not only are some inbound calls to public safety answering points (PSAPs) unable to provide the data that the legacy systems need, but — coming from smartphones — they potentially could provide a far richer set of data, if the systems were set up to receive it.

On top of this, it can simply take too long, or be impossible, for a reporter of an emergency to convey crucial information through a phone conversation. (Indeed, the idea for the service was hatched after founder Amir Elichai discovered how long it took to identify his location and other details to emergency services after he was mugged.)

Carbyne — originally called Reporty and rebranded earlier this year to the word for what is now considered to be the world’s strongest substance — lets emergency response providers connect with reporters through two products to fill that gap.

There is an app, called C-Now, that people can download on iOS or Android to provide instant video, down-to-one-meter location data, and lots of other details when making a report to emergency response call centre. (This potentially can include whatever an emergency response organization might want to collect, within the scope of a phone and the data that it can pick up either directly or via APIs from other devices, such as heart rate monitors.) The app is live in 161 countries.

There is also a service, C-Lite, that plugs directly into legacy 911 services, which lets PSAPs send links to reporters to collect additional information without the reporter needing to download an app, and without the PSAP needing to upgrade its legacy systems. Both C-Lite and the app are cloud-based to create more redundancy in case of service outages. The company also says that it is GDPR compliant and uses “military-grade” security protocols to protect people’s information when they call.

Between all of that, the company has also developed technology to pinpoint locations in indoor spaces, and also a platform that monitors all calls and other data (such as video coming from a surveillance camera) at a specific location in order to build a more comprehensive picture of the emergency.

Carbyne is not the only startup that is looking to fill the gap between legacy 911 offerings and the promises of what the next generation of cloud-based communication and mobile technology can bring to improve efficiency in these services. RapidSOS provides a bridge between mobile phone calls to 911 and legacy 911 PSAP services, so that those making calls on mobile can still provide location data. RapidSOS also serves as a supplement that works just on mobile in the event that the legacy system falls over, and it really came into its own during the trio of tropical disasters last autumn across Puerto Rico, Texas and Florida.

Like Carbyne, RapidSOS has some big-name supporters: it is backed by former FCC chairmen Tom Wheeler and Julius Genachowski, in addition to a range of other investors. It’s also now integrated with services like Uber and Apple’s iOS for faster reporting of location.

One of the points of differentiation between RapidSOS and Carbyne is that the latter is potentially a full replacement for the 911 system in the event that an organization was considering that route. Elichai said that there are several organizations evaluating Carbyne now in across Europe, and it is already rolling out its service in Fayette County in Georgia.

But by and large there aren’t many startups looking to disrupt this area, which was one reason why Founders Fund was interesting in backing the company. “I’m looking for businesses that aren’t massively competitive, and Carbyne stands alone in a really unpopular industry,” Trae Stephens, a partner at the firm who is leading the investment, told TechCrunch. “In the world of emergency services, it’s really important for tech to contribute to fixing some of the antiquated systems, and that is what excited me. I definitely looked at other companies in emergency services, but but nothing came remotely close to the approach that Carbyne has taken, which is platform-agnostic.”

Longer term, Elichai said that while emergency services will remain a primary interest, there are potential other areas where its technology could be applied.

“We see ourselves connecting any device to the platform,” he said in an interview. “Because of the fact that we have a strong real-time communications platform, we have received request from other industries.” These have included, for example, insurance companies.

“If you ski in Aspen or Chamonix, you get extreme sports insurance. If you have to make a claim, most people ski with their cell . phones now, and if you use Carbyne you would be able to open the claim automatically with evidence from the scene, making checking and processing much more efficient.”

A week after spinning out its driver services business and giving it $1 billion in investment capital, Didi Chuxing has added to it through an acquisition.

Xiaoju Automobile Solutions (XAS), which the Didi spinout is called, announced today it has bought Hiservice, a three-year-old company that provides after-service care for car owners using a digital platform.

The deal was undisclosed, but XAS said that Hiservice will be combined with its maintenance and repair division to form a new unit that’s focused on car-owner services such as maintenance, parts and components. That’ll be called Xiaoju Auto Care (小桔养车) for those of you who are keeping up with the names of these Didi subsidiaries.

That auto care business will be jointly run by Yinbo Yi, who had run Didi’s auto care business, and Hiservice founder Cheng Qian, Didi confirmed. The new business claims 28 physical maintenance centers across seven cities in Asia.

Didi’s move to create XAS, which removes an asset-heavy business from the core Didi books, is seen by many as a sign that the company plans to go public soon. Unsurprisingly, Didi isn’t commenting on that at this point. The company was last valued at $56 billion when it raised a $4 billion round late last year — it has since added a $500 million strategic investment from travel company Booking Holdings.

While it is organizing its China-based business, Didi has also spent this year expanding into new markets. It has launched in Mexico, Australia and Taiwan while it acquired Uber rival 99 in Brazil. It is also edging close to launching a taxi-booking service in Japan via a joint venture with SoftBank.

Down in the dumps while the cryptos are getting rekt? Quirky billionaire and long-time Bitcoin bull Tim Draper is here for you with what is apparently called a rap song.

Draper performed a version of this thing at The Next Web’s event earlier this year… yes, I had to listen to both. Anyhow, we wish it had ended there. It didn’t.

[Blame Drew for making us aware of this]

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

Barely weeks after WeWork China raised $500 million, one of its main rivals is refueling its tanks too. Ucommune — the company formerly known as UrWork until a WeWork lawsuit forced a rebrand — announced its $43.5 million Series C round.

Beijing-based Ucommune’s new round was led by real estate-focused investment firms Prosperity Holdings and RK Properties. The company said the deal gives its business a $1.8 billion post-money valuation. to date, it has raised around $450 million from investors, according to Crunchbase data. For comparison, WeWork China has pulled in $1 billion overall since being spun out of WeWork’s global business one year ago.

Both investors are strategic, according to Ucommune. It said that its partnership with Prosperity, in particular, will help it expand its presence in Southeast Asia, where it has a presence in Singapore and an investment in Indonesia. While it will work with RK Properties to upgrade its existing office spaces, perhaps in the style of WeWork’s ‘Powered By We’ program.

In total, Ucommune claims to manage 160 locations in over 35 cities. That’s primarily China but outside of Asia its reach does include New York, London, Hong Kong and Taiwan, too.

News of this new funding comes one day after another Chinese co-working brand, My Dream, raised $120 million.

Three big names is nothing though, the field used to be comprised of dozens of players. Some have died out but the market has also seen plenty of consolidation. WeWork bought its closest rival Naked Hub in a deal reportedly worth $400 million. Meanwhile, Ucommune has made four acquisitions this year, including Workingdom for around $45 million this summer.

Hello And Welcome Back To The Latest Edition Of All The Cryptos Are Getting Rekt Right Now.

Crypto bloodbaths have become fairly common in 2018 — mainly because of the insane growth in 2017 — but we’ve not covered them all because they are so numerous and often include so-called ‘flash crashes’ or small drops, but the fall happening today is worth noting for several wider reasons.

Primarily that’s because this is a major test for Ether — the token associated with the Ethereum Foundation that is the second largest cryptocurrency by volume — has been on a downward spiral with little sign of change.

Ether, which is the preferred platform of choice for most developers building on the blockchain, is down nearly 17 percent over the past day. That’s erased billions of dollars in paper (crypto) value as the bear market for cryptocurrencies continues to pull markets south.

The drop also marks the first time ever that the price of an Ether has fallen below its valuation over one year: one Ether is worth $266 right now at the time of writing, versus $304 on August 14 2017. The token has been steadily falling since early May, when its peak value was $808, and as the lynchpin for many ICO project tokens, its demise has sent the value of most other tokens down, too.

Just looking at Coinmarketcap.com this morning, all but two of the top 100 tokens are down over the last 24 hours with many losing 10-25 percent of their value over the past day. Bitcoin, too, has dropped below $6,000, having topped $8,000 for a time last month.

Ether’s plummet below $300 has sparked a mixed debate among those in the crypto community. The token had been held as visionary, an improvement on Bitcoin that gives developers a platform to build on — whether it be decentralized apps, decentralized systems or more — but that hasn’t been reflected in in this months-long price retreat.

Certainly, two founders who spoke TechCrunch and have held ICOs expressed a belief that Ether “needs to find some price stability” to allow the focus to become about product and not just ‘get rich’ speculation. Of course, it helps that the two founders and many of those who held token sales have long since sold the Ether or Bitcoin they raised in exchange for fiat currency. Indeed, if their token sale was last year, the chances are they got a lot more real-world cash than they initially bargained for or would get now.

But still, the idea of consistency is shared by others who are in crypto professionally. That includes investors like Kenrick Drijkoningen, who is in the midst of raising a $10 million fund for LuneX, a spinout of Singapore-based VC firm Golden Gate Ventures.

In an interview last week, Drijkoningen told TechCrunch that raising a fund and doing deals in a ‘low tide’ market like now beats attempting to do the same amid a frothy period with hype and peak valuations — one Ether was worth nearly $1,400 in January, for example. A number of others VCs have long said that, ultimately, stability is good for the ecosystem.

Vitalik Buterin is the creator of Ethereum

But, on the other side, there are more pessimistic voices.

Among some investors canvassed by TechCrunch, the sense is that with the downturn of the ICO funding boom that fueled much of Ethereum’s rise, there may be less incentive to hold as the broader market’s interest in the cryptocurrency wanes.

For one Bitcoin bull, the intrinsic value of Bitcoin as an immutable, decentralized ledger acts as a more powerful draw than the perceived mutability and centralization that the Ethereum platform offers.

“People are also beginning to understand the unique value of an immutable, decentralized ledger, and recognize that Ethereum is not that,” the investor wrote in an email.

Another long-term problem that Ethereum faces, according to this investor, is that the promise of decentralized apps backed by the token is yet to be released. Crypto Kitties, a smash hit earlier this year, has faded and now there’s competition as Bitcoin’s Lightning Network is adding nodes and apps — referred to as LApps — which can operate in a similar but leverage the Bitcoin ledger.

It’s still early days, of course, and markets will always rise and fall, but this is the first big test for Ether and Ethereum. Beyond the sport of price speculation, it’ll be worth watching to see where this heads next.

Note: One of the authors of this post — Jon Russell — owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

U.S. government agencies will be forbidden from using certain components or services from several Chinese tech firms, including Huawei and ZTE. The ban was signed into law today by President Trump as part of the Defense Authorization Act and will go into effect over the next two years.

The bill covers anything that is a “substantial or essential component of any system,” as well as tech that is used to route or view user data. So even though it doesn’t mandate an outright ban on Huawei and ZTE products, it still means many government workers or contractors, or companies that want to do business with the government, will have to jettison much of their current technology. The Defense Authorization Act also directs U.S. agencies to allocate funding to companies that need to replace equipment as a result of the new bill.

Last month, ZTE struck a deal with the Commerce Department to lift a denial order that was put in place after it violated sanctions against North Korea and Iran. The denial order, barring ZTE from working with American suppliers, would have seriously damaged its business and was a major point of contention in the U.S.-China trade war.

Lawmakers on both sides of the political aisle opposed the deal and continue to view ZTE as a security threat, but Senate Republications abandoned an attempt to re-impose sanctions on the company last month, which paved the way for the less severe provision in the Defense Authorization Act.

TechCrunch has contacted Huawei and ZTE for comment.

Huawei and ZTE, in particular, have been singled out as national security threats by the U.S. since a Congressional report in 2012. But the ban also covers video surveillance and telecommunications hardware produced by Hytera Communications, Hangzhou Hikvision Digital Technology Company and Dahua Technology Company, all Chinese firms.

After raising $35 million to develop driverless car technology and a strategy to build a fleet of shared vehicles, UK startup FiveAI is announcing its first on-street trial: a service aimed at commuters in the London outer boroughs of Bromley and Croydon. Projected to begin in late 2019, it will kick off first with a 10-month “data gathering” exercise, which will see five FiveAI vehicles, with drivers, collect information about road conditions, the movement of pedestrians and various vehicles, and other variables to help train its AI platform.

The new trial will be the first on-street effort from the UK startup, which has up to now been testing its technology primarily in Bedfordshire, at automotive testing centre Milbrook Proving Ground, according to Ben Peters, FiveAI’s VP of product who is also a co-founder of the company (alongside Stan Boland, Steve Allpress, John Redford and Simon Walker).

The news of the London trial comes as TechCrunch has learned that FiveAI is also in the process of raising a new round of funding.

While the $35 million FiveAI has raised to date is considered the highest amount of funding for an autonomous car company in Europe, it is a very modest figure when compared to startups in the US and China. Indeed, although transportation across Europe is estimated to be a $400 billion market, Peters estimates that no more than $100 million has been raised by autonomous driving startups in the region, versus around $8 billion by autonomous car startups the US, home to startups like Zoox and Nutonomy (which, like FiveAI, are building platforms that they plan to use in their own fleets), transportation providers like Uber, and car makers (which themselves are acquiring startup talent to kickstart their efforts), and tech giants like Google that approach cars like the next big hardware challenge.

But there is a clear opportunity: Europe has a lot of urban density, roads that are less likely to follow grid patterns, and road names are very often the opposite of clearly marked. These factors make Europe a hard problem to tackle, but one that a local company might be more amenable to trying.

With that in mind, Peters would not say how much FiveAI is looking to raise, or anything about the investors, but he did confirm that the round would be FiveAI’s largest to date, with the aim of expanding trials to more cities across Europe. The round should be closed by the end of this year.

In the meantime, Bromley and Croydon may not be the most high-profile parts of London to those outside of England, but Peters said that FiveAI is eschewing Central London and opting instead to focus on these two boroughs for a couple of reasons.

One is that the area affords the startup some sympathetic guinea pigs, or as Peters calls them, “friendly users.” First Direct, the insurance company that is an investor in FiveAI, has recently moved its offices to Bromley from Croydon, and so there are employees living in the latter borough who have to commute to the former on a regular basis. This gives FiveAI an opportunity to build a service tailored to that market.

Another is the opportunity to fill a gap that isn’t being addressed by others. The center of London is very congested, but there are already a number of transportation alternatives attempting to address that issue. “There are a lot of problems to solve there, but they are very well served by current providers,” said Peters. “But in Zones 4 to 6 [the outer boroughs of London], about one quarter of people are still driving their own vehicles to and from work.” That presents an opportunity for a shared mobility service.

It will take a good 10 months before the first FiveAI vehicles can offer rides, and likely more months before no driver has to be present to engage the vehicle if something goes awry. Peters said that this slow early work will help the startup add more roads, areas and cities to the service more quickly down the line. “It doesn’t have to be as slow in the future, maybe just a few months to get up and going,” he said. “We’re really targeting an urban service, which is the difficult part. Autonomous driving in urban areas is the hardest challenge, one that is still unsolved.”

Don’t want to get pregnant? There’s a Food and Drug Administration approved app for that. The FDA has just given the go ahead for Swedish app Natural Cycles to market itself as a form of birth control in the U.S.

Natural Cycles was already in use as a way to prevent pregnancy in certain European countries. However, this is the first time a so-called ‘digital contraceptive’ has been approved in America.

The app works using an algorithm based on data given by women using the app such as daily body temperature and monthly menstrual cycles. It then calculates the exact window of days each month a woman is most fertile and therefore likely to conceive. Women can then see which days the app recommends they should avoid having sex or use protection to avoid getting pregnant.

Tracking your cycle to determine a fertile window has long been used to either become pregnant or avoid conceiving. However, Natural Cycles put a scientific spin on the age-old method by evaluating over 15,000 women to determine its algorithm had an effectiveness rate with a margin of error of 1.8 percent for “perfect use” and a 6 percent failure rate for “typical use.”

What that means is almost two in every 100 women could likely conceive on a different date than the calculated fertile window. That’s not exactly fool-proof but it is higher than many other contraceptive methods. A condom, for instance, has an 18 percent margin of error rate, according to the Centers for Disease Control (CDC).

And though the app makers were able to convince the FDA of its effectiveness, at least one hospital in Stockholm has opened an investigation with Sweden’s Medical Products Agency (MPA) after it recorded 37 unwanted pregnancies among women who said they had been using the app as their contraception method.

“Consumers are increasingly using digital health technologies to inform their everyday health decisions, and this new app can provide an effective method of contraception if it’s used carefully and correctly,” assistant director for the health of women in the FDA’s Center for Devices and Radiological Health Terri Cornelison said in a statement.

However, she also acknowledged there was a margin of error in the app’s algorithm and other contraceptive methods. “Women should know that no form of contraception works perfectly, so an unplanned pregnancy could still result from correct usage of this device,” she said.

The Discord gaming community boasts 150 million members and 46 million active monthly users, who spend their days chatting about games, finding people to play with and looking for advice on how to resolve issues. Up until now, game publishers have had to monitor public discussions looking for people who need help or relied on expert users to assist them, but that’s about to change with Zendesk’s new Discord support bot.

Zendesk VP of product and platform, Luke Behnke, says they count a fair number of gaming companies as customers, and they have been looking for a way to have more direct communication with Discord users right where they play. With the Zendesk-Discord integration, users can request help by typing /support, and then the nature of the problem. This activates the Zendesk bot and triggers the creation of a help ticket, paving the way for a customer service rep to work directly with a person having an issue.

Calling the Zendesk bot in Discord. Screenshot: Zendesk

Prior to this, the only way that the game publishers could use Zendesk to generate help tickets was through the traditional sources like email, texts or phone calls, which required their users to leave the flow of the game. This integration allows the publishers to let the customers come to them for help without leaving the community.

Behnke says his company has been talking to Discord, whose members generate more than 530 million messages a day, about creating an integration that would work for their users. “We worked with Discord on this and they have been testing it internally and giving us feedback,” he said.

Conversation with game publisher CSR using Zendesk-Discord bot. Screenshot: Zendesk

Of course, it requires people know that you type /support to activate it, but Behnke believes that if the integration works well, word will get around that this is a useful way to get support directly from the publisher without leaving Discord. He says his company sees this as a unique approach to customer service, one that the gaming publishers, who tend to be innovative, are particularly open to.

Future updates could include the ability to push messages to the community such as information on an outage, or for the bot to answer common questions without accessing a human CSR. For now, this integration is in early release. The company is still working out the kinks with publishers, but they hope to get it into full production by the end of the year.