Month: October 2018

If a twinkle in the eye of a venture capitalist could predict the longevity of a startup, Vital Labs is going all the way.

During a quick demo of the Burlingame, Calif.-based startup’s app, called Vitality, True Ventures partner Adam D’Augelli’s enthusiasm was potent. The company, which emerges from stealth today, is pioneering a new era of personalized cardiovascular healthcare, he said.

Vitality can read changes in a person’s blood pressure using an iPhone’s camera and graphics processing power. The goal is to replace blood pressure cuffs to become the most accurate method of measuring changes in blood pressure and eventually other changes in the cardiovascular system.

The app is still in beta testing and is expected to complete an official commercial rollout in 2019.

Here’s how it works: The technology relies on a technique called photoplethysmography. By turning on the light from a phone’s flash and placing a person’s index finger over the camera on the back of the phone, the light illuminates the blood vessels in the fingertip and the camera captures changes in intensity as blood flows through the vessels with each heartbeat. This technique results in a time-varying signal called the blood-pulse waveform (BPW). The app captures a 1080p video at 120 frames per second and processes that data in real-time using the iPhone’s graphics processing unit to provide a high-resolution version of a person’s BPW.

The startup was founded by Tuhin Sinha, Ph.D., the former technical director for the University of California, San Francisco’s Health eHeart Study. He’s been working on the app for several years.

“Part of the reason this project strikes a chord with me is because if I look at the stats of my own family, I probably only have 20 years left,” Sinha told TechCrunch. “Most people on my dad’s side of the family have passed away before 60 from cardiovascular disease.”

Prior to joining UCSF, Sinha was an instructor at Vanderbilt University and the director of the Center for Image Analysis, where he directed and developed medical image analysis algorithms.

He linked up with True Ventures in June 2015, raising a total of $1 million from the early-stage venture capital firm.

“[Sinha] saw an opportunity to improve a stagnant practice and invented a new approach that takes full advantage of today’s technologies,” True’s D’Augelli said in a statement.

Three years after that initial funding, Sinha says Vital Labs is looking to raise another round of capital with plans to create additional digital tools to advance cardiovascular health.

 

 

Tesla delivered 83,500 electric vehicles in the third quarter, more than double from the previous period as the company steered by Elon Musk pulled out all the stops to get its newest sedan, the Model 3, to customers.

The company delivered 55,840 Model 3 sedans up from 18,440 in the previous quarter, which was in line within its own guidance. The company’s delivery numbers fell just short of the 56,000 deliveries expected by a consensus of analysts surveyed by FactSet.

Tesla emphasized in its report Tuesday that thousands of vehicles — 8,048 Model 3 and 3,776 Model S and X vehicles — were in transit to customers at the end of the quarter. The company is standing by its overall target of 100,000 Model S and X deliveries in 2018 remains.

Delivery logistics became the primary pinch point for the company in the third quarter with customers reporting delays and confusion over how to pick up their new Model 3s. Hundreds of Tesla owners ended up heading down to various Tesla showrooms where Model 3s were being handed over to customers in an effort to help the company meet its goal.

The question raised by several analysts is whether Tesla’s unconventional production and delivery methods are sustainable. Jeremy Acevedo, Edmunds manager of industry analysis, noted that Tesla’s production announcement offered some redemption and that “producing 50,000 Model 3s in Q3 is significant milestone.”

“It’s refreshing to see the company making headlines for producing cars, not controversies,” Acevedo said in a statement. “The real question now is if Tesla can really sustain this pace, particularly in light of the delivery issues the company has faced recently. While Tesla superfans and owners have generously volunteered their time to assist, this isn’t necessarily a sustainable model that Elon can count on moving forward.”

Tesla acknowledged the problems with deliveries and said it plans to make improvements to its system in the fourth quarter. Deliveries to a customers’ homes and offices, which began in the third quarter, will be expanded.

Tesla produced more than 80,000 electric vehicles in the third quarter, a 50% increase from the previous quarter.

The production and delivery numbers, which were announced early Tuesday, cap off a tumultuous quarter that were plagued by Musk’s controversial “funding secured” tweet. That tweet triggered an SEC investigation and ultimately charges of securities fraud. Musk and Tesla reached a settlement with the SEC on Saturday.

Production breakdown for Q3:

• Tesla produced 53,239 Model 3 vehicles
• Tesla produced 26,903 Model S and X vehicles
• Total: 80,142

Delivery breakdown in Q3:

• 55,840 Model 3 vehicles
• 14,470 Model S
• 13,190 Model X
• Total: 83,500

 

Heed, a startup looking to create new ways for sports leagues and clubs to engage with fans, is announcing that it has raised $35 million led by SoftBank Group International.

As laid out for me by CEO Danna Rabin, the company sits at the intersection of sports and IoT — which makes sense, since it was founded by Internet of Things company AGT International and talent agency Endeavor .

“Our primary mission is to connect the young audience with sports leagues and clubs,” Rabin said. “[Those] audiences are consuming less broadcast TV, consuming less of anything linearly. Sports clubs and brands are having more and more issues connecting with and reengaging those younger audiences.”

To create that connection, Heed places sensors around the match or game venue, even potentially on players’ clothing and equipment.

For example, the team let me make a couple punches using gloves with sensors inside, which were created for the mixed martial arts league UFC. Afterwards, I could see the measured force of each of my swings. (I didn’t really have any points of comparison, but I think it’s safe to say that my numbers weren’t too impressive.)

Rabin emphasized that Heed’s real focus isn’t on building fancy hardware, but rather on the artificial intelligence it uses to take that data (which can also be drawn from video and audio footage of the match) and transform it into a general narrative that can be viewed on the Heed smartphone app.

Pointing to the UFC glove, Rabin said, “We extract, only from this sensor, 70 different data points. What’s happening is, the fusion of these data points is what creates the stories.”

Put another way, the goal is to replace the generic commentary that you often get in sports coverage and live games with unique details about how the game or match is unfolding. Those aren’t just numbers like how hard someone is punching, but also inferences about a player’s emotional state based on the data.

“One of our core promises is that it’s not editorial driven,” Rabin added. “The AI is selecting what’s interesting in a match. Of course, we have a creative team that designs the formats, the visuals, how the packaging should look like, but that’s incorporated into the technology, which is automatically selecting the moments and creating the experiences with no human interpretation.”

So does Heed aim to be a technology provider or a sports media company of its own? Well, Rabin said it didn’t make sense to simply provide the tech to individual leagues or teams.

“A specific club does not have the breadth of technologies to keep evolving,” she said. Plus, she argued that the audience isn’t looking for just a one-off site with stories about one team, but an all-around destination where they can “get a bit of everything.”

In addition to the UFC, Heed is also working with EuroLeague (the European basketball league), various soccer clubs and Professional Bull Riding. In the latter case, it’s not just creating content, but actually working with the organization to create a more automated and objective form of judging.

“By leveraging AI and IoT, HEED has developed a unique platform that is changing the way fans watch and interact with sports,” said Softbank President and CFO Alok Sama. “HEED is taking a traditionally static experience and providing fans with deeper insights into the physical and emotional aspects of the sporting event by gathering and analyzing large, complex data in real time.”

If you’ve ever tried to write something long – a thesis, a book, or a manifesto outlining your disappointment in the modern technocracy and your plan to foment violent revolution – you know that distractions can slow you down or even stop the creative process. That’s why the folks at Astrohaus created the Freewrite, a distraction-free typewriter, and it’s always why they are launching the Traveler, a laptop-like word processor that’s designed for writing and nothing else.

The product, which I saw last week, consists of a hearty, full-sized keyboard and an E ink screen. There are multiple “documents” you can open and close and the system autosaves and syncs to services like Dropbox automatically. The laptop costs $279 on Indiegogo and will have a retail price of $599.

The goal of the Freewrite Traveler is to give you a place to write. You pull it out of your bag, open it, and start typing. That’s it. There are no Tweets, Facebook sharing systems, or games. It lasts for four weeks on one charge – a bold claim but not impossible – and there are some improvements to the editing functions including virtual arrow keys that let you move up and down in a document as you write. There are also hotkeys to bring up ancillary information like outlines, research, or notes.

If the Traveler is anything like the original Freewrite then you can expect some truly rugged hardware. I tested an early model and the entire thing was built like a tank or, more correctly, like a Leica. Because it is aimed at the artistic wanderer, the entire thing weighs two pounds and is about as big as the collected stories of Raymond Carver.

Is it for you? Well, if you liked the original Freewrite or even missed the bandwagon when it first launched, you might really enjoy the Traveler. Because it is small and light it could easily become a second writing device for your more creative work that you pull out in times of pensive creativity. It is not a true word processor replacement, however, and it is a “first-thought-best-thought” kind of tool, allowing you to get words down without much fuss. I wouldn’t recommend it for research-intensive writing but you could easily sketch out almost any kind of document on the Traveler and then edit it on a real laptop.

There aren’t many physical tools to support distraction-free writing. Some folks, myself included, have used the infamous AlphaSmart, a crazy old word processor used by students or simply set up laptops without a Wi-Fi connection. The Freewrite Traveler takes all of that to the next level by offering the simplest, clearest, and most distraction-free system available. Given it’s 50% off right now on Indiegogo it might be the right time to take the plunge.

Hey, did you hear? There’s a big Google event coming up next week. There’s gonna be a big new phone and, no doubt, some additions to the Home line. In the meantime, here’s a mint (officially “Aqua”) Google Home Mini.

The new color scheme is arriving on October 29, for the usual $49 price point. The timing of all of this is a bit odd, given the platform the company has next week. That said, this is probably just Google’s way of showing the world that it’s got too much to pack into the Pixel event.

If the hue looks familiar, it’s probably because it’s surfaced in leaks of the upcoming Pixel 3. Aesthetic consistency among its hardware line has become an increasing focus for Google in recent years.

It’s a quick way to remind everyone about its big event, the day that Microsoft is fighting for mindshare with its own big launch. It also appears to be a sign that the Home Mini, which was a focus at last year’s show, won’t be getting much of a refresh next week.

Petal, the startup credit card company that’s offering a no-fee credit line to people without a credit history, is now publicly available.

Launched earlier this year by co-founders Jason Gross, Andrew Endicott, Andrew Ehrich, and Jake Arenas, Petal has received a $34 million credit facility from Jeffries and Silicon Valley Bank to bring its consumer lending product to the masses.

That money will take Petal beyond the few thousand customers that have trialed the company’s credit card in a pre-release to broad distribution for applicants.

Petal uses information from a customer’s bank account and payments to develop a credit score for individuals who haven’t had time to build up a financial picture that most banks or credit card companies use to create risk profiles and issue credit.

“We use more data than credit history to make credit decisions,” says Jason Gross, Petal’s co-founder and chief executive. “They’re common sense metrics about your finances: how much you make save and spend every month.”

Gross says this window into its customers spending habits allows his company to issue credit lines with higher limits than its competitors and with annual financing rates that are among the lowest for first time borrowers.

Annual percentage rates begin at 14% and are up to 25%, which is the standard for the industry, says Gross. And Petal offers credit limits that are, in many cases, ten times higher than its competitors. Another difference between Petal and its older competitors is the company’s elimination of all fees.

“We want to eliminate traps and fees. We have no fee. No late fees, international fee, or over the limit fees,” says Gross. Petal makes its money on the interest it pays and the transaction charges it receives from vendors when its customers use its card. 

“We want you to pay on time and we want you to build your credit,” says Gross. It’s also transparent about how much interest rates will wind up costing its users, Gross says. “Before you carry an interest on Petal… we show you how much it’s going to cost you… .you have a minimum payment and the statement balance…. All of the costs associated with the minimum payment… we make that information clear,” he said.

Those credit limits and the card’s transparent approach to costs and fees make up for the lack of other perks that cardholders would get with competing lenders.

And, Gross stresses that Petal is for first time borrowers, primarily. People who are looking to rebuild their credit score will likely not be approved for a Petal card. Indeed, the company’s demographics skew younger and solidly middle class, according to Gross.

The typical applicants for the Petal card are in their 20s, and are making somewhere between $30,000 and $70,000 per year.

In the market for the past year, Petal has issued cards to over 1,000 early adopters and is on pace to hit 10,000 borrowers signed up with the company by the end of the year.

The company, which most recently raised a $13 million round Valar Ventures, The Social Entrepreneurs Fund, Third Prime, The Gramercy Fund, Story Ventures, RiverPark Ventures, Ride Ventures and other institutional investors.

In fact, investors are throwing a lot of money at the credit space, and specifically trying to find a way to get at the thin-file customers that are Petal’s target audience. Deserve, a startup backed by Accel Partners (among others) is also pitching potential borrowers with a similar approach.

It’s certainly an important market to address.

“If you look at folks who are thin-file, credit invisible, those who don’t have an accurate score, they’re predominantly young people but they’re disproportionately groups that have historically lacked access to financial services,” Gross has previously saidsaid. “Minorities, immigrants, if you lack a score — or an accurate score — it can cost you very real money throughout your life. Having no score, you’re treated as subprime, you won’t qualify for most financial products, or they’ll be more expensive and inferior.”

Security continues to remain top of mind for organizations and consumers, as each day seems to bring another high-profile network breach. One of the faster-growing startups in the space is capitalising on that by raising some significant funding to fuel its growth. Tanium today said that it has raised another $200 million in funding with a post-money valuation of $6.5 billion. The funding was led by Wellington Management, with Baillie Gifford & Company and Adage Capital Management LP also participating.

The money is notable not just for the size and valuation, but for the timing: it comes less than five months since the company closed its last round, $175 million at a $5 billion valuation. The company has now raised just under $683 million in total with other investors including Andreessen Horowitz, Citi Ventures, Franklin Templeton Investments, and Geodesic Capital.

Fazal Merchant, the COO and CFO of the company, said in an interview that the proximity in part was because of the fact that money is coming in fast right now for the fastest-moving startups, but it’s also because the impetus behind the funding is a little different.

“The last round was largely an inside round,” he said of the May 2018 deal, which came entirely from previous investor TPG. He described this latest investment as “deliberate” and focused instead on new outside investors. “We have friends and family who have been investors for a long time and this gives them liquidity.”

What Tanium doesn’t need, he said, was the funding to extend its runway. The company announced at the end of 2017 that it had turned profitable and while it’s not commenting directly on that today, Merchant said that the company has stayed cash-flow positive. “We have grown Tanium with the belief that profitability and cash flow are not an afterthought,” he said.

The company says that in 2018 (fiscal year end 2017), it had $320 million in cash and equivalents, and positive operating cash flow of $25 million, with billings growing to more than $270 million, and ARR of approximately $230 million, up over 80 percent from the prior year. Net renewal rates — a big metric for enterprise SaaS businesses — was over 150 percent, it said.

Large organizations tend to run their security services on two tracks: one sets and tracks compliance with security policies, while another runs operations across the network to detect potential breaches or other behavior that might occur outside that policy framework, tapping into the fact that the growth of mobile has led to a huge proliferation of new devices that are touching an organization’s network. Tanium up to now has built its business by effectively offering services across both tracks, and by building services in-house, and positioning itself as a platform, versus a single-purpose security offering.

Merchant said that going forward that will continue to be the case: “Acquisitions are often made when a company’s organic growth starts to plateau, but that hasn’t been a constraint for us yet,” he said. The company has definitely looked at options — there has been a lot of fragmentation, and consolidation, in the wider security space, and that has doubtless affected Tanium both as a potential buyer and acquisition target — but to date it has not made a single acquisition.

“Tanium is an extraordinary platform, providing IT security and management at scale for some of the world’s most successful companies,” said Peter Singlehurst, head of the unlisted equities team at Baillie Gifford, in a statement. “As long-term investors, we look forward to supporting Tanium’s management team over the coming years as it continues to build a world-class technology business.”

The news today — and Tanium’s run this year — potentially puts to bed another bumpy part in the company’s story. In 2017, the company was singled out as “troubled” due to the fact that it saw a huge wave of departures among its executive team, including seeing its CTO swap out in place of the CEO (his brother) to run the business.

“We introduced our technology to the world five years ago, and in that time, we have grown to be over 800 team members strong and helped hundreds of the world’s largest enterprises — including over half of the Fortune 100 — achieve stronger business resilience,” said the current Tanium CEO, co-founder Orion Hindawi, in a statement. “We are thrilled to have such a strong set of investors support the Tanium vision of transforming the way industry-leading companies are able to manage and secure their networks against ever-advancing technology-based disruptions.”

 

The education market has long been one of the cornerstones of growth for Apple’s hardware business, and today the company is leveraging its popularity in it, specifically among college-aged students, to build out a newer effort. Today, Apple started to integrate university student ID cards — used to access buildings, pay for food or books, and any other transactional campus services — into Wallet, its contactless payment system on the Apple Watch and the iPhone. The first schools to come online are Duke University, the University of Alabama and the University of Oklahoma.

Apple had actually announced the service back in June, during WWDC, earmarking the three schools going live today. It said that Johns Hopkins University, Santa Clara University and Temple University will start using the service by the end of this year.

The expansion comes at a time when Apple is riding on a growth high for its mobile wallet. iPhone and Watch owners have been shown to be enthusiastic users of their devices for making purchases (thrice as more avid, it seems, than Android users), and on the back of that, Apple Pay — which is now live in 24 markets — has laid claim to being the most popular mobile contactless payment in use today, with some 1 billion transactions in the last quarter alone, up three-fold from a year before.

Many of those transactions are specifically related to Apple Pay, made using more traditional payment cards such as American Express or Visa credit cards, and at traditional retail locations — Apple says it expects 60 percent of all US retail locations to support Apple Pay by the end of this year, including over 70 of the top 100 retail chains.

But Apple has also been pursuing a second wave of growth to make Wallet useful, by encouraging people to upload and use the myriad cards they have for various other services, such as loyalty cards and passes for city transport systems. Twelve US metro areas already use Apple Pay, and there is ground being gained internationally too in markets like the UK, China and Japan.

Adding in university student cards falls within that scope, Apple says.

“iPhone and Apple Watch have brought us into a new era of mobility, helping to transform everyday experiences,” said Jennifer Bailey, Apple’s vice president of Internet Services, said in a statement. “When we launched Apple Pay, we embarked on a goal to replace the physical wallet. By adding transit, loyalty cards and contactless ticketing we have expanded the capabilities of Wallet beyond payments, and we’re now thrilled to be working with campuses on adding contactless student ID cards to bring customers even more easy, convenient and secure experiences.”

Apple Pay may not appear to massively profit Apple in a direct way — as it’s been pointed out by others, the percentages on payment transactions are tiny — but what it does give the company indirectly is another tie into how people use their phones and watches, making the devices more valuable to their owners, and those users more tied into the Apple ecosystem.

At colleges (and other schools), we’ve seen an increasing use of student ID cards not just as a way to identify yourself, but to access services and buildings, and also to pay for things, and use of contactless versions of these has been on the rise. Part of the reason for this is safety: having one card for everything means students need to carry less valuables, and if they lose it or it’s stolen, the card can be more easily replaced. At the same time, watches and phones are not items they’re leaving behind, so further consolidating, and making those cards more secure by way of Apple’s device locks, makes sense.

What we don’t know is if Apple is getting a commission (even a tiny one) on the payment transactions made via these student cards. We have asked the company and will update as we learn more.

Educational institutions aren’t the only not-strictly-retail locations that are being put into Wallet. Apple’s been adding sports venues to let attendees use Wallet to carry their tickets, and to then buy food and other concessions once you get in. (See how Apple uses one non-commissioned transaction to lead you into using it for one that might be?)

Today, Apple is estimated to account for between 14 percent and 17 percent of the K-12 education market in the US, and with the likes of Google and Microsoft also pushing hard for growth both here and in higher education, you can see how adding in more services like this could help Apple expand its piece of the pie.

Empires rise and fall, and none more so than business empires. Whole industries that once dominated the planet are just a figment in memory’s eye, while new industries quietly grow into massive behemoths.

New York City has certainly seen its share of empires. Today, the city is a global center of finance, real estate, legal services, technology, and many, many more industries. It hosts the headquarters of roughly 10% of the Fortune 500, and the metro’s GDP is roughly equivalent to that of Canada.

So much wealth and power, and all under constant attack. The value of technology and data has skyrocketed, and so has the value of stealing and disrupting the services that rely upon it. Cyber crime and cyber wars are adding up: according to a report published jointly between McAfee and the Center for Strategic and International Studies, the costs of these operations are in the hundreds of billions of dollars – and New York’s top industries such as financial services bare the brunt of the losses.

Yet, New York City has hardly been a bastion for the cybersecurity industry. Boston and Washington DC are far stronger today on the Acela corridor, and San Francisco and Israel have both made huge impacts on the space. Now, NYC’s leaders are looking to build a whole new local empire that might just act as a bulwark for its other leading ecosystems.

Today, the New York City Economic Development Corporation (NYCEDC) announced the launch of Cyber NYC, a $30 million “catalyzing” investment designed to rapidly grow the city’s ecosystem and infrastructure for cybersecurity.

James Patchett, CEO of NYCEDC, explained in an interview with TechCrunch that cybersecurity is “both an incredible opportunity and also a huge threat.” He noted that “the financial industry has been the lifeblood of this city for our entire history,” and the costs of cybercrime are rising quickly. “It’s a lose-lose if we fail to invest in the innovation that keeps the city strong” but “it’s a win if we can create all of that innovation here and the corresponding jobs,” he said.

The Cyber NYC program is made up of a constellation of programs:

• Partnering with Jerusalem Venture Partners, an accelerator called Hub.NYC will develop enterprise cybersecurity companies by connecting them with advisors and customers. The program will be hosted in a nearly 100,000 square foot building in SoHo.
• Partnering with SOSA, the city will create a new, 15,000 square foot Global Cyber Center co-working facility in Chelsea, where talented individuals in the cyber industry can hang out and learn from each other through event programming and meetups.
• With Fullstack Academy and Laguardia Community College, a Cyber Boot Camp will be created to enhance the ability of local workers to find jobs in the cybersecurity space.
• Through an “Applied Learning Initiative,” students will be able to earn a “CUNY-Facebook Master’s Degree” in cybersecurity. The program has participation from the City University of New York, New York University, Columbia University, Cornell Tech, and iQ4.
• With Columbia University’s Technology Ventures, NYCEDC will introduce a program called Inventors to Founders that will work to commercialize university research.

In addition to Facebook, other companies have made commitments to the program, including Goldman Sachs, MasterCard, PricewaterhouseCoopers, and edX.org. Two Goldman execs, Chief Operational Risk Officer Phil Venables and Chief Information Security Officer Andy Ozment, have joined the initiative’s advisory boards.

The NYCEDC estimates that there are roughly 6,000 cybersecurity professionals currently employed in New York City. Through these programs, it estimates that the number could increase by another 10,000. Patchett said that “it is as close to a no-brainer in economic development because of the opportunity and the risk.”

From Jerusalem to New York

To tackle its ambitious cybersecurity goals, the NYCEDC is partnering with two venture firms, Jerusalem Venture Partners (JVP) and SOSA, with significant experience investing, operating, and growing companies in the sector.

Jerusalem-based JVP is an established investor that should help founders at Hub.NYC get access to smart capital, sector expertise, and the entrepreneurial experience needed to help their startups scale. JVP invests in early-, late-, and growth-stage companies focused on cybersecurity, big data, media, and enterprise software.

Erel Margalit, who founded the firm in 1993, said that “If you look at what JVP has done … we create ecosystems.” Working with Jerusalem’s metro government, Margalit and the firm pioneered a number of institutions such as accelerators that turned Israel into an economic powerhouse in the cybersecurity industry. His social and economic work eventually led him to the Knesset, Israel’s unicameral legislature, where he served as an MP from 2015-2017 with the Labor Party.

Israel is a very small country with a relative dearth of large companies though, a huge challenge for startups looking to scale up. “Today if you want to build the next-generation leading companies, you have to be not only where the ideas are being brewed, but also where the solutions are being [purchased],” Margalit explained. “You need to be working with the biggest customers in the world.”

That place, in his mind, is New York City. It’s a city he has known since his youth – he worked at Moshe’s Moving IN NYC while attending Columbia as a grad student where he got his PhD in philosophy. Now, he can pack up his own success from Israel and scale it up to an even larger ecosystem.

Since its founding, JVP has successfully raised $1.1 billion across eight funds, including a $60 million fund specifically focused on the cybersecurity space. Over the same period, the firm has seen 32 successful exits, including cybersecurity companies CyberArk (IPO in 2014) and CyActive (Acquired by PayPal in 2013).

JVP’s efforts in the cybersecurity space also go beyond the investment process, with the firm recently establishing an incubator, known as JVP Cyber Labs, specifically focused on identifying, nurturing and building the next wave of Israeli cybersecurity and big data companies.

On average, the firm has focused on deals in the $5-$10 million range, with a general proclivity for earlier-stage companies where the firm can take a more hands-on mentorship role. Some of JVP’s notable active portfolio companies include Source Defense, which uses automation to protect against website supply chain attacks, ThetaRay, which uses big data to analyze threats, and Morphisec, which sells endpoint security solutions.

Opening up innovation with SOSA

The self-described “open-innovation platform,” SOSA is a global network of corporations, investors, and entrepreneurs that connects major institutions with innovative startups tackling core needs.

SOSA works closely with its partner startups, providing investor sourcing, hands-on mentorship and the physical resources needed to achieve growth. The group’s areas of expertise include cybersecurity, fintech, automation, energy, mobility, and logistics. Though headquartered in Tel Aviv, SOSA recently opened an innovation lab in New York, backed by major partners including HP, RBC, and Jefferies.

With the eight-floor Global Cyber Center located in Chelsea, it is turning its attention to an even more ambitious agenda. Uzi Scheffer, CEO of SOSA, said to TechCrunch in a statement that “The Global Cyber Center will serve as a center of gravity for the entire cybersecurity industry where they can meet, interact and connect to the finest talent from New York, the States, Israel and our entire global network.”

With an already established presence in New York, SOSA’s local network could help spur the local corporate participation key to the EDC’s plan, while SOSA’s broader global network can help achieve aspirations of turning New York City into a global cybersecurity leader.

It is no coincidence that both of the EDC’s venture partners are familiar with the Israeli cybersecurity ecosystem. Israel has long been viewed as a leader in cybersecurity innovation and policy, and has benefited from the same successful public-private sector coordination New York hopes to replicate.

Furthermore, while New York hopes to create organic growth within its own local ecosystem, the partnerships could also benefit the city if leading Israeli cybersecurity companies look to relocate due to the limited size of the Israeli market.

Big plans, big results?

While we spent comparatively less time discussing them, the NYCEDC’s educational programs are particularly interesting. Students will be able to take classes at any university in the five-member consortium, and transfer credits freely, a concept that the NYCEDC bills as “stackable certificates.”

Meanwhile, Facebook has partnered with the City University of New York to create a professional master’s degree program to train up a new class of cybersecurity leaders. The idea is to provide a pathway to a widely-respected credential without having to take too much time off of work. NYCEDC CEO Patchett said, ”you probably don’t have the time to take two years off to do a masters program,” and so the program’s flexibility should provide better access to more professionals.

Together, all of these disparate programs add up to a bold attempt to put New York City on the map for cybersecurity. Talent development, founder development, customer development – all have been addressed with capital and new initiatives.

Yet, despite the time that NYCEDC has spent to put all of these partners together cohesively under one initiative, the real challenge starts with getting the community to participate and build upon these nascent institutions. “What we hear from folks a lot of time,” Patchett said to us, is that “there is no community for cyber professionals in New York City.” Now the buildings have been placed, but the people need to walk through the front doors.

The city wants these programs to be self-sustaining as soon as possible. “In all cases, we don’t want to support these ecosystems forever,” Patchett said. “If we don’t think they’re financially sustainable, we haven’t done our job right.” He believes that “there should be a natural incentive to invest once the ecosystem is off the ground.”

As the world encounters an ever increasing array of cyber threats, old empires can falter – and new empires can grow. Cybersecurity may well be one of the next great industries, and it may just provide the needed defenses to ensure that New York City’s other empires can live another day.

Chinese internet giant Tencent is reorganizing its business to place more emphasis on enterprise as it prepares for the future of technology and looks to alleviate the pressure on its under-fire consumer business.

The reorg, which Reuters reports is the company’s first shakeup for six years, was announced over the weekend — ahead of a holiday in China — and it comes at a challenging time. Tencent’s share price is down 33 percent from a record high in January, and the firm just experienced a rare quarterly profit drop largely on account of regulators freezing new game releases in China.

Gaming is where the firm is strongest — Honour of Kings over 200 million monthly players and is one of the top-grossing games ever, while Tencent has stakes in current blockbusters Fornite and PUBG — but a change in government regulation has prevented any new titles being released in China for months. Titles already in the market have also been affected. Under pressure from the government, Tencent was forced to acknowledge that some gamers are addicted and it has introduced systems to combat that — which now include a facial recognition pilot.

This structural change seems to be targeted at helping Tencent grow revenue beyond the consumer space, where it has seen tremendous success with WeChat, China’s top messaging app, perhaps its most successful product.

The change will see Tencent retain four units — ‘Corporate & Development,’ ‘Interactive Entertainment,’ ‘Technology Engineering’ and ‘Weixin’ (its WeChat business) — but add two new ones. Those will include ‘Platform & Content’ which will unite its digital services beyond WeChat, that includes its social networks, online media and content divisions.

The other new addition is ‘Cloud & Smart Industries,’ as the name implies that caters to cloud services, maps, security and other enterprise-led initiatives from the company. In addition, the firm’s advertising operations will be united in a single division which will sit under the corporate and development department.

Finally, Tencent is also putting a renewed focus on upcoming technology with a newly created ‘Technology Committee’ that’ll be tasked with looking at “cutting-edge technologies,” including AI, robotics, quantum research and more.

Chairman and CEO Pony Ma said in a statement that the changes mark “a new beginning” that’ll prepare Tencent for the next 20 years of operations:

It is a very important strategic upgrade as we step into the second stage of the Internet, the Industrial Internet era. In the first stage, we connected users to high quality services. In the second stage, we aspire to enable our partners in different industries to better connect with consumers via an expanding, open and connected ecosystem. As an Internet-based company focused on innovation, communications, and content, Tencent views technology as our core infrastructure. With the emergence of AI and 5G, we will use technology as our innovation engine, and to explore new connections between social networks and content. We need to not only focus on our existing businesses, but even more so seek to position ourselves for the long-term future. Together with this strategic upgrade, we will reinforce our investment in cutting-edge technologies.