Month: June 2019

LinkedIn has long eyed China as an important country to offset slowing growth in more mature markets. But now it’s calling time on a localized effort after failing to see it pick up steam. The company has announced that it will be shutting down Chitu — a Chinese-only app it had built targeting younger people and those who had less of a need to network with people outside of the country — at the end of July.

The closure is notable for a couple of reasons.

First, it marks a retreat of sorts for LinkedIn in the country from building standalone apps to target younger users, and specifically those targeting young professionals, at the same time that LinkedIn also faces stiff competition from other services like Maimai and Zhaopin.

Second, Chitu was a rare (and possibly the only) example of an app from LinkedIn built specifically to target one non-English market — and a very big one at that — by building a social graph independent of LinkedIn’s. Chitu’s shutdown is therefore a sign of how LinkedIn ultimately didn’t succeed in that effort.

The company posted an announcement of the change in Chinese on Chitu’s website, and a spokesperson for LinkedIn confirmed the changes further in a statement provided to TechCrunch, where it described Chitu — which has been around since 2015 — as “one of many experiments.”

It also noted that it will be upgrading the LinkedIn core app as a “one-stop shop”, incorporating some of Chitu’s features, presumably in an effort to attract Chitu’s users rather than lose them altogether.

“Chitu will officially go offline at the end of July 2019,” the company noted in the statement. “In the future, we will focus on the continuous optimization and upgrade of the LinkedIn app, serving as a one-stop shop to accompany Chinese professionals along each step of their career development and connect to more opportunities.” We’ll post the full statement LinkedIn sent us at the bottom of this article.

LinkedIn first officially set up shop in China back in 2014 as “领英”. Its branding firm pointed out at the time that the characters’ pronunciation, “ling ying,” sounding a bit like “LinkedIn” and loosely meant “to lead elites.” It was initially established as a joint venture with Sequoia and CBC since it was still an independent company and not owned by Microsoft at the time.

LinkedIn already had users in the country at that point — some 4 million individuals and 80,000 companies were already using the English-language version of the site at the time — but the idea was to set up a local operation to seize the opportunity of creating services more tailored to the world’s biggest mobile market, which would include local language support, and to meet the regulatory demands of needing to establish local operations to do that. It included efforts to build integrations with other sites like WeChat, as well as bigger partnerships with the likes of Didi.

A year later, Derek Shen, the LinkedIn executive who led the launch of LinkedIn China, spearheaded the launch of Chitu.

The idea was to build a new app that could tap into the smartphone craze that had swept the country, in particular among younger users who had foregone using computers in favor of their hand-held devices that they used to regularly check in on apps like WeChat.

“In the past year, we have done a lot of localization efforts and achieved great results, such as deep integration with WeChat, Weibo, QQ mailbox, and Alibaba,” he wrote in an essay at the time (originally in Chinese).

“However, in general, we are still maintaining a global platform that is note evolving fast enough, and localization is not determined. We believe that only a product that is independent of the global platform can fully meet the unique needs of social networking in China, so that we can really run like a startup.”

LinkedIn would at the same time continue to build out the Chinese version of LinkedIn itself targeting older and more premium users who might be interacting with people in other languages like English.

From what we understand, Chitu had a good start, with millions of users signing up in the early years, beating LinkedIn itself on user retention rates and engagement.

But a source says that internally it faced some issues for trying to develop an ecosystem independent of the LinkedIn platform, which only became more challenging after Microsoft acquired the company, the source said. (He didn’t say why, but for starters it would have been more lucrative to monetise a single user base, and to develop new features for a single platform, rather than do either across multiple apps.)

“After Microsoft acquired LinkedIn, independence became unthinkable,” the source said. “People with entrepreneurial DNA have all left, so it’s natural to shut down Chitu at this point.” It didn’t help that Shen himself left the company in 2017.

It’s unclear how many users Chitu ultimately picked up but LinkedIn says that it has 47 million LinkedIn members in China, out of a total of 610 million globally. Notably, observers point out that its two big rivals Maimai and Zhaopin are both growing faster.

More generally, and likely to better compete against local players, LinkedIn tells us that it’s rebooted its growth strategy in the country last month. That new strategy appears to be based fundamentally on any new services or partnerships now stemming from one centralised platform.

“2.0 [as the new strategic effort is called] is built on LinkedIn’s vast global network of professionals with real identities and profiles as the foundation and providing a one-stop shop services to our members and constructing an ecosystem in China,” a spokesperson said in response to a question we had about whether the company will continue to build out more partnerships with third parties. “We do not exclude any partners who participate in building this “one-stop shop “and eventually construct a powerful ecosystem.” 

Here is the full statement on the shut-down of Chitu.

“China is core to LinkedIn’s mission and vision globally – creating economic opportunity to every member of the global workforce. Since entering China in 2014, LinkedIn has explored its development path within the Chinese market, adjusting short-term strategies according to changes in the market environment. This includes Chitu, which launched in 2015, to help LinkedIn expand the social network market through the mobile app.

“Chitu is one of many experiments we conducted to continue to learn and provide more value to members. Other efforts include WeChat integration, Sesame Credit partnership etc. Based on user feedback and data analysis, we find that Chinese professionals are proactively seeking for career development opportunities. We incorporate many learnings and insights from Chitu into our new offerings on LinkedIn app that we believe will cover different needs and stages in professional and career development.

“Chitu will officially go offline at the end of July 2019, following the completion of its historical mission. In the future, we will focus on the continuous optimization and upgrade of the LinkedIn app, serving as a one-stop shop to accompany Chinese professionals along each step of their career development and connect to more opportunities.”

Exercise tech darling and service provider Peloton has filed for IPO with a confidential draft submission of its S-1 statement to the SEC on Wednesday. The company announced the news in a press release, and did not disclose the terms of its initial public offering in the release.

Peloton’s entry into the market was via its smart exercise bike, which is custom hardware paired with a large interactive display, through which users can access courses and streamed classes and coaching.

Earlier the year, Peloton released its latest product, a connected treadmill with similar service offerings for members. The company, which last raised a round of $550 million in funding in August and has a valuation at around $4 billion, has inspired similar home health and fitness businesses including smart mirror ‘Mirror,’ which caters to more generalist home exercise routines and which recently raised at a nearly $300 million valuation.

Aion Network, a non-profit dedicated to creating tools to promote blockchain technologies, announced a new virtual machine today that’s built on top of the popular Java Virtual Machine. Its ultimate goal is increasing the popularity of blockchain with developers.

Aion CEO Matthew Spoke says one of the barriers to more widespread blockchain adoption has been a lack of tooling for developers in a common language like Java. The company believed if they could build a virtual machine specifically for blockchain on top of the Java Virtual Machine (JVM), which has been in use for years, it could help promote more extensive use of blockchain.

Today, it’s announcing the Aion Virtual Machine (AVM), a virtual machine that sits on top of the JVM. AVM makes it possible for developers to use their familiar toolset while building in the blockchain bits like smart contracts in the AVM without having to alter the JVM at all.

“We didn’t want to modify the JVM. We wanted to build some sort of supplementary software layer that can interact with the JVM. Blockchains have a set of unique criteria. They need to be deterministic; the computing needs to happen across the distributed network of nodes; and the JVM was never designed with this in mind,” Spoke explained.

Aion set out to build a virtual machine for blockchain without reinventing the wheel. It recognized that Java remains one of the most popular programming languages around, and it didn’t want to mess with that. In fact, it wanted to take advantage of the popularity by building a kind of blockchain interpreter that would sit on top of the JVM without getting in the way of it.

“Rather than trying to convince people of the merits of a new system, can we just get the system they’re already familiar with on top of the blockchain? So we started engineering towards that solution. And we’ve been working on that since for about a year at this point, leading up to our release this week to prove that we can solve that problem,” Spoke told TechCrunch.

Up to this point, Aion has been focusing on the crypto community, but the company felt to really push the blockchain beyond the realm of the true believers, it needed to come up with a way for developers who weren’t immersed in this to take advantage of it.

“Our big focus now is how do we take this message of building blockchain apps and take it into a more traditional software industry audience. Instead of trying to compete for the attention of crypto developers, we want the blockchain to become almost a micro service layer to what normal software developers are solving on a day-to-day basis,” he said.

The company is hoping that by providing this way to access blockchain services, it can help popularize blockchain concepts with developers who might not otherwise have been familiar with them. It’s but one attempt to bring blockchain to more business-oriented use cases, but the company has given this a lot of thought and believes it will help them evangelize this approach with a wider audience of developers moving forward.

A new sci-fi movie called Ad Astra is heading to theaters on September 20, and it’s got some amazing star power behind it, including Brad Pitt in the lead role. It also brings Liv Tyler back to the space epic genre, after her excellent roles in both 1998’s Armageddon and the lesser-known but still wonderful Space Station 76. But most importantly, it looks like a space-based adventure thrill ride that isn’t also the 183rd instalment of a Marvel Cinematic Universe franchise flick.

In the trailer, Brad Pitt plays an astronaut who is apparently tasked with saving all life in the universe – with the twist that it looks like he’ll be saving it from his father, Tommy Lee Jones, also an astronaut and one who undertook a mission to somehow discover the secrets of a mystery material with tremendous potential power.

Based on this trailer, we can expect Brad Pitt to begrudgingly undertake a mission set to him by Donald Sutherland to fly out into space and track down his long-missing father (Jones) for a face-off of some kind – but there’s plenty of potential twists and turns for this to take, and I’ll bet it ends up somewhere less weird than something like Interstellar, but probably much more interesting and bizarre than Armaggedon‘s ‘blow up the rock’ simplicity. Plus, the setting looks like a potentially wonderful near-future, realistic hard sci-fi backdrop. Can’t wait to check this one out.

Motorcycle racing series Supercross will add e-motos and more digitization to its franchise (aided by startups) in the near future, according to Director of Operations David Prater.

The sport—where riders race high-performance machines on jump filled stadium dirt tracks—currently fields only gas two-wheelers.

This fall Supercross looks to launch its first EV class starting with the earliest of early adapters: seven to eight year-olds.

The series plans to convert its Junior Racing program, sponsored by manufacturer KTM, from gas to electric.

“They’ve been working on an electric 50cc equivalent motorcycle and their goal is to launch that in October,” Prater told TechCrunch. “We haven’t one-hundred percent-ed it yet, but it’s fairly close and we’re…going to race that electric KTM in October at the Monster Energy Cup. 

KTM North America would not comment on adding EVs to the junior Supercross class. The Austria based motorcycle manufacturer released its electric debut in the U.S. in 2018—the Freeride E-XC adult off-road e-motorcycle. This made KTM the first of the big gas companies to offer a production e-motorcycle in the U.S.

KTM unveiled its SX-E 5 (50cc equivalent) electric junior motorcycle in late 2018, saying in a release it would have a ride time of 25 minutes to 2 hours and be “available in North American dealerships in fall 2019.”

This will be the motorcycle to usher in Supercross’s first all electric class in KTM’s Junior Racing competition later this year, according to Prater.

That program is embedded within the Supercross series and allows 7 and 8 year-old girls and boys to race three laps on the same stadium track used by the adults in the main events.

On shifting the juniors to e-motos, “It’s really exciting, and I think the strategy is let’s start with the small bike, put the kids on electric bikes, and grow from there,” Supercross’s Prater said.

Combining EVs and youth could roll up into a broader strategy of established companies and e-moto startups to revive interest in motorcycles to a new generation.

The U.S. motorcycle industry has been in pretty bad shape since the recession.

E-motorcycle startups such as Zero have worked to produce models that close gaps on price, distance, charge times and performance with gas motorcycles and attract a younger, tech-savvy market segment.

None of the big name producers — Honda, Kawasaki, Suzuki, BMW — have offered a production electric street motorcycle in the U.S. (KTM’s Freeride E-XC isn’t street-legal).

Harley Davidson will enter the market this summer with its LiveWire. HD has also indicated it plans a full electric pivot, with additional e-motorcycles in the pipeline, as well as e-bicycles and scooters. The Milwaukee company acquired kids electric bicycle maker StaCyc in March.

Supercross’s upcoming electric program with KTM is significant in that it will be one of the few all electric motorcycle competition classes in the U.S, and likely the most visible.

The American Motorcyclist Association, the primary organizer of motorcycle competition in the country, allows e-motos to compete in trials and flat-track, according to AMA off-road racing manager Erek Kudla, they just have to race against other electric motorcycles.

One of the off-road specific e-moto startups, Alta, had been inching its way up to finding a way to compete with gas-bikes in Supercross and motocross, but went bankrupt before getting there.

As a sport, Supercross will create a big venue for the new electric junior class. The Feld Entertainment owned series has an air time partnership with NBCSN and claims the title of America’s fastest growing motorsport—which Prater quantified by growth in race attendance and broadcast ratings over the last five years.

For its season semi-finals in MetLife stadium 61,247 fans turned out to watch eventual Supercross champion Cooper Web clinch the 2019 450cc class title.

In addition to adding the junior e-moto class, Supercross looks to further digitize toward more fan interactivity, cord-cutters, and viewers outside the U.S.

“We’re a young sport with a young demo so we always want to be pushing the edge on the digital side,” he said.

The includes comparison for best practices. “We’ve been looking at NASCAR, the NFL, and NBA and what they’ve done with e-sports and gaming and using that to increase their international appeal.”

NASCAR launched its own app—NASCAR Mobile—in 2013, where fans can track live-broadcasts, follow live race stats and video from inside race-cars.

Supercross will explore similar digital options, including developing its video-game and VR functions, while seeking partnerships (including with startups) to link fans to race action, according to Prater.

“We’re shopping around for different possibilities, but I think the next step is an app that people can have at an event or sitting on their couch to connect to the sport live with,” he said.

The sport is already working with one startup, LitPro, that could factor into a future mobile platform. The Southern California venture creates hardware and software Supercross riders use to track motorcycle dynamics, rider bio-metrics, and lap-performance.

There’s still a question of if or when Supercross could convert more of its overall racing line-up to e-motorcycles.

While attending a stadium even this spring, several older fans told me they couldn’t imagine preferring e-supercross to the the roar of 22, 93 decibel gas machines reverberating throughout a stadium.

And that could be why Supercross and KTM are going all electric with 7 to 9 year olds.

By the time they’re teenagers e-motorcycles could be all they’ve raced or known, leading to different preferences from the gas-loving motorsports fans of today.

 

The National Security Agency has issued a rare advisory warning users to update their systems to protect against BlueKeep, a new security vulnerability with the capacity to rapidly spread between computers.

The “critical”-rated bug affecting computers running Windows XP and later, can be exploited to remotely run malware at the system level, which has full access to the computer. Because the bug is remotely exploitable, any unpatched computer connected to the internet may be at risk.

Only Windows 8 and Windows 10 are not vulnerable to the bug.

Microsoft released patches in May, yet about a million internet-facing computers and servers are still unprotected.

The intelligence agency urged computer owners to patch against the vulnerability “in the face of growing threats” amid concerns that a malicious actor could launch an attack, similar to the scale of the WannaCry ransomware attacks in 2017.

As of the time of writing, security researchers have only been able to develop proof-of-concept exploits that could remotely shut down affected computers — or so-called denial-of-service attacks. But they say it’s only a matter of time before these exploits could be used to deliver ransomware or data-stealing malware.

“NSA urges everyone to invest the time and resources to know your network and run supported operating systems with the latest patches,” said the agency’s advisory.

It’s rare to see NSA intervene in matters of consumer cybersecurity. An NSA spokesperson noted that its BlueKeep advisory is the agency’s third cybersecurity notice this year. Where NSA often exploits vulnerabilities to carry out surveillance and espionage, typically it is Homeland Security that issues advisories on serious security flaws that could be exploited by hackers.

Two years ago, the agency was left red-faced following the theft of highly classified hacking tools, which hackers later published online. The leaked EternalBlue exploit worked like a master key, opening access to almost any of the billion-plus Windows computers on the internet. Hackers believed to be associated with North Korea used the leaked EternalBlue exploit to spread ransomware on a massive scale. The malware only stopped spreading after security researchers discovered a ‘kill switch’ that neutralized the malware.

NSA has never publicly acknowledged the theft.

A cynic might see the NSA is moving proactively to avoid another public relations disaster after one of its top secret exploits was leaked and used in a global ransomware attack. An optimist, however, might say the government is trying to warn users to prevent mass damage if an exploit is used or published.

For its part, NSA said patching against BlueKeep is “critical not just for NSA’s protection of national security systems but for all networks.”

Chinese regulators might follow the European Union’s lead to make life harder for internet companies such as TikTok that closely track behavior of their users in a move that could significantly hurt their revenue.

Last week, Beijing proposed a new set of measures to enforce data security for individuals and the nation overall. According to Article 23 of the draft (see translation from China Law Translate), companies that are “using user data and algorithms to deliver news information or commercial advertisements shall conspicuously label them with the words ‘targeted’ and provide users with functionality to stop receiving information from targeted delivery.”

This is good news for users in China, who could potentially take more control over what they are shown and what tech companies collect about them.

On the flip side of the coin, stepped up data protection will “definitely have an impact” on companies that rely heavily on data crunching business, Michael Tan, partner at law firm Taylor Wessing specializing in data policies, told TechCrunch.

Advances in artificial intelligence have helped adtech players get better at predicting people’s clicks, and, boost their income. Few have done it better in the Chinese mobile age than Bytedance, the startup that operates TikTok and the popular Chinese news app Jinri Toutiao. In between viral videos and news are customized ads that help the eight-year-old company, which was last valued at a whopping $75 billion, make money.

Bytedance’s success with programmatic ads prompted more entrenched tech giants to follow suit. Baidu, which is China’s answer to Google with a lucrative ad business, added a personalized news feed to its search app in 2016 as Toutiao hit the mainstream. Tencent and Alibaba also incorporated customized feeds into their main products.

“Data is too important for internet companies,” a product manager at a Shenzhen-based tech firm told TechCrunch. A lot of businesses, he said, including Bytedance, are well-prepared for regulatory scrutiny so they have plenty of backup plans and have explored alternative revenue streams.

“For instance, the apps might trick you into giving them access to your data,” the person added. “Even if you consent, you still don’t know how your data is being used.”

Traffic control

In mid-2017, China introduced a sweeping Cybersecurity Law as Beijing sought more control over how data flows within its online borders. A lot of the clauses are broad and vague, but the government has taken incremental steps to solidify them overtime, including efforts like the proposed measures for data protection.

“So far there is no unified data protection legal framework in place, though the topic is addressed by various laws and regulations including the PRC Cybersecurity Law,” explained Tan. “This is quite different from many other jurisdictions like that of the E.U. where there is unified protection framework in place with primary focus on personal data and privacy protection.”

While the set of data regulations touch on individual privacy, Tan noted that the laws’ real focus is on topics “relating to national security protection.”

For example, Article 29 of the proposed data policies stipulates that “where mainland users visit the mainland internet, their traffic must not be routed outside the mainland.” The authority does not elaborate on what counts as “routing,” though some speculate that it might be targeting people accessing overseas websites through a VPN, the tool that allows them to get around China’s censorship apparatus.

Tan suggested otherwise, arguing that the clause might be introduced “with good intention to prevent fraudulent cases including conscious or unconscious visits to overseas websites which promote illegal business under Chinese law, for example, gambling sites,” although doing so may “inadvertently hurt China-based multinational companies that have their I.T. facilities deployed globally.”

The draft measures for data protection, which were published by the Cyberspace Administration of China, the country’s top internet authority, are currently soliciting public comment until June 28.

Nintendo Switch has Pokémon games, but it doesn’t really have its own Pokémon games, not in the true sense. Pokémon Sword and Shield, coming November 15, 2019, will be the first real Pokémon games (don’t even mention Pokémon Let’s Go – don’t) for Nintendo Switch, and now we know more about them thanks to today’s Pokémon Direct livestream event from Nintendo.

Starting with the intro video, you can tell that Sword and Shield will be a full-fledged new extension of the Pokémon world taking place in the new Galar region – a fact emphasized by the theme song that played over it which featured the catchy hook “A whoollle new worlllddd.”

Plus in this new region, part of the fiction is that everyone loves watching battles on TV, which seems like it will come into play for big battles. We also got a glimpse at a bunch of new Pokémon, including a sheep one called Wooloo; a flower thing called Gossifleur (which evolves to Eldegoss); plus a “bite” type called Dredgnaw.

There’s also a new place called, not super imaginatively, the “Wild Area” which is pretty much an open world between human settlements where you get the chance to encounter wild Pokémon you can catch. These will vary depending on weather conditions and time of day, and it looks like much more of a free-ranging experience, when compared to the relatively hard-tracked previous instalments.

Pokémon also get a special power called ‘Dynamax’ in this instalment, which is a special power that makes them huge and more powerful for three turns. This also factors into a new mode where up to four Pokémon trainers can team up to squad raid a single Dynamax wild Pokémon who retains their amped up power for the duration of the conflict. At the end, players get a chance to capture the Pokémon – and some are exclusively available to catch this way.

We also got an intro to new characters including region champion Leon, his younger brother Hop (a primary rival for the player), plus a really quick look at some of the gym battles.

The real capper though was a CG cinematic introducing the game’s legendaries, which are wolf-like Pokémon who have – you guessed it – a sword and a shield respectively. These are called Zacian and Zamazenta.

The houses along the tree-lined blocks of Josina Avenue in Palo Alto, with their big back yards, swimming pools and driveways are about as far removed from the snarls of traffic, sputtering diesel engines, and smoggy air of South America’s major metropolises as one can get.

But it was in one of those houses, about a twelve-minute bicycle ride from Stanford University, that the seed was planted for what has become a renaissance in technology entrepreneurship in Latin America.

Back in 2010, when Adeyemi Ajao, Carlo Dapuzzo, and Juan de Antonio were students at Stanford’s Graduate School of Business they could not predict that they would be counted among the vanguard of investors and entrepreneurs transforming Latin America’s startup economy.

At the time, Ajao was negotiating the sale of his first business, the Spanish social networking company, Tuenti, to Telefonica (in what would be a $100 million exit). Carlo Dapuzzo was in Palo Alto taking a break from his job at Monashees, which at that time was a small, early-stage investment fund based in Brazil focused on investing in Latin America. Juan de Antonio had left a job as a consultant at BCG to attend Stanford’s business school on a Fulbright scholarship.

In just two years, Ajao would be a founding investor in de Antonio’s ride-hailing business, Cabify, focused on Latin America and Europe; and Dapuzzo would be seeding the ride-hailing service 99Taxis. Today, Cabify is worth over $1 billion and has focused its business primarily on Latin America while 99 was sold to the Chinese ride-hailing company Didi for $1 billion — making it one of the largest deals in Latin America’s young startup history.

The three men are now at the center of a vast web of startups whose intersection can, in many cases, be traced back to the house on Josina Avenue where Dapuzzo and de Antonio lived and where Ajao spent much of his free time.

“It’s the same dynamics as the PayPal Mafia,” says Ajao. “The new unicorn batches which started in Colombia, Mexico, and Brazil. Although they’re all trans-national, they all know each other and literally they are all friends and all co-investors in each other’s companies and they all have links to Silicon Valley… and… more importantly… to Stanford.”

Stalled Economic Engines

If Ajao’s enthusiasm sounds familiar, that’s because it is. There was another wave of interest in Latin America that started surging nearly a decade ago, but crashed nearly five years into what was supposed to be the time of the region’s explosive growth in the global scene.

Back in 2008, as the U.S. was sliding into recession, global economists cast about for countries whose economic might could potentially provide some antidote to the toxic assets that were poisoning the global financial system in America and Western Europe. It was then that the concept coined by a Goldman Sachs economist back in 2001 (in the aftermath of another financial shock) baked Brazil, Russia, India and China into a BRIC — a group of nations that, as a bloc, could create enough growth to keep the global economy moving upwards.

All of them were growing at a rapid clip, albeit at different speeds and from different starting trajectories. But they were still all humming. Investment — from large financial institutions, private equity and venture capital firms — all began flowing into the four countries.

In Brazil and across Latin America, companies from the U.S. began to cast their eyes South for growth. That’s when Groupon began to make inroads into the region. When Groupon acquired the Chilean company ClanDescuento, it served as a starting gun for activity across multiple geographies.

Two years after that acquisition by Groupon, Redpoint’s Brazilian investment vehicle, Redpoint eVentures was able to close on a $130 million fund for Brazilian and Latin American investments in just under four months. While Brazil held the bulk of the capital, many of the largest startup companies were being launched out of Buenos Aires in Argentina.

Globant, Despegar, MercadoLibre, and OLX were all lucrative deals for the investors who made them. Today, they remain solid companies, but they didn’t create the ecosystem that both local investors and entrepreneurs were hoping for. Brazil’s Peixe Urbano was also a rising star at the time, but it too wound up selling, in its case to Chinese internet Baidu. Indeed, the Peixe Urbano funding gave investors like Benchmark’s Matt Cohler their first exposure to the region.

A 2012 default on Argentinian debt derailed the economy and Brazil’s economy began seizing up at around the same time. Then, in 2014, Brazil was hit by both an economic and political collapse that shook the country’s stability and ushered in a two-year-long recession.

Ultimately, the Brazilian component of the BRIC miracle, that would have potentially ushered in a brighter future for the broader region, didn’t materialize.

The next starting gun

Ajao began investing in Latin America as an angel investor during the beginnings of the downturn in Brazil and when Argentina was also seizing up. It’s also when Dapuzzo made the initial bet on 99Taxis — bringing Ajao in as an investor — and Cabify launched, eventually bringing its service to Mexico and seeing huge growth in the Latin American market.

500 Startups expanded to Mexico around the same period, in what turned out to be a prescient move. Because even as the broader economies were slowing, technology adoption — fueled by rising smartphone sales and new internet-enabled mobile services — was speeding up.

Groupon’s push into the region taught a new consumer market about the pleasures of venture-backed e-commerce, but it was ride-hailing that truly paved the way for Latin America’s future success. Many factors played a role, from the rise of smartphones to the stabilization and growth of economies in the region outside of Argentina and Brazil and the return of a generation of founders who gained exposure and experience in Silicon Valley.

Here again, the house on Josina Street and the friends that were made over the course of the two-year grad school program at Stanford would play a critical role.

“99 was the second start and this new generation of founders,” said one investor with a deep knowledge of the region.

A herd of unicorns

Ajao also sees 99 as ground zero for the network that has spawned a unicorn stampede in Latin America. It’s a group of companies that covers everything from financial services, mobility and logistics, food delivery and even pet care.

In some ways it’s an extension and culmination of the American on-demand thesis, with allowances for the unique characteristics of the region’s varied economies and cultural experience, investors and entrepreneurs said.

“In my mind 99 had a lot to do with what is happening right now with the current PayPal mafia [of Latin America] because they became the first big new exit on the continent,” Ajao says.

Entrepreneurs from 99 spun out to form Yellow, a dockless scooter and bike-sharing company that was initially backed by Monashees, Grishin Robotics and Base10 Ventures — the venture firm that Ajao co-founded and which closed a $137 million venture fund just nine months ago.

Monashees and Base10 also co-invested in Grin, a Mexico City-based dockless scooter company. Together the two companies managed to raise over $100 million before merging into one company earlier this. That deal ultimately provided a challenger to the automotive-based ride-sharing businesses that were beginning to encroach on the scooter business.

The growth of 99Taxis and the rise of startups in Latin America ultimately convinced David Velez, a former venture investor with Sequoia Capital to return to Brazil and try his hand at entrepreneurship as well. A year behind Ajao, de Antonio and Dapuzzo at Stanford, Velez was also friendly with the group.

Velez worked at Sequoia Capital and saw the opportunity that Latin America presented as an investment environment. After starting Sequoia Capital Latin America he transitioned into an entrepreneurial role and became the co-founder of Nubank, which would be Sequoia’s first Latin America investment. Now a $4 billion financial technology powerhouse, the Nubank deal was yet another proof point that the Latin American market had come of age — and another branch on a tree that has its roots in Stanford’s business school and the Silicon Valley venture community.

The final piece of this intersecting web of investments and relationships is Rappi — the Colombian delivery service business that was also backed by Monazhees and Base10. The first company from Latin America to enter YCombinator and the first investment from the new Silicon Valley power player, Andreessen Horowitz, Rappi epitomizes the new generation of Latin American startups.

“The way we think about this part of the world is as a massive market with 700 million people living on the continent and really dense cities,” says Rappi co-founder and president, Sebastian Mejia. “And it’s a region where the tech stack hasn’t been built, which gives you an opportunity to solve problems and create digital champions that look more similar to China than the U.S.”

Mejia epitomizes what Ajao calls a new breed of startup entrepreneur that doesn’t necessarily look to other markets for inspiration or business models, but solves local problems for a local customer, rather than a global one.

“Being local was more of a competitive advantage than a disadvantage and we can solve problems in a better way than a Silicon Valley company or a Chinese company could,” says Mejia. “What we’re starting to see now is that those changes in perspective allow us to build bigger companies.”

In all, Monashees and Base10 have invested in companies operating in Latin America that have a combined valuation of over $6 billion between them. Through the extended network of Stanford connections and the startups that Velez has brought to the table that number is higher than $10 billion.

The next $10 billion

If the Latin American market was once overlooked by venture investors like Sequoia Capital, Andreessen Horowitz, Benchmark or Accel, that’s certainly no longer the case.

Funds are pouring into the region at an unprecedented clip, driven by SoftBank and its interest on the continent following its commitment to launching a new $2 billion fund in the region and its subsequent $1 billion investment in Rappi.

“Latin America is on the cusp of becoming one of the most important economic regions in the world, and we anticipate significant growth in the decades ahead,” said Masayoshi Son, chairman and CEO of SBG, in a statement when SoftBank launched its fund.

“SBG plans to invest in entrepreneurs throughout Latin America and use technology to help address the challenges faced by many emerging economies with the goal of improving the lives of millions of Latin Americans,” he added.

Son is likely thinking about the 375 million internet users in Latin America and the 250 million smartphone users across the region. It’s also worth noting that retail e-commerce has been a huge driver of economic growth despite other economic obstacles. The region’s e-commerce has grown to $54 billion in 2018 up from $29.8 billion in 2015.

Even more critically, there are some key areas where innovation and new services are still sorely needed. Access to transportation isn’t great for the roughly 79% of the 700 million people across South America who live in cities. Then there are 400 million people across Latin America who are either unbanked or underbanked. Healthcare is another area where a lack of investment to date could create potential opportunities for new startups.

More generally, poor infrastructure remains a significant problem that companies like Rappi and another SoftBank investment, Loggi, are looking to make inroads into.

“Latin America was for many years, underinvested,” says de Antonio, whose Cabify business has managed to score a valuation of over $1 billion largely based on the opportunities ahead of it in the Latin American market. “You will see a bit more money to catch up. The market is big… and potentially huge… I’m a big believer that it’s a good moment now to invest.”

For de Antonio, Cabify, Rappi, and other startups are only now hitting their stride. In the future, they stand to enable a host of other opportunities, he believes.

“The entrepreneurial mindset is really ingrained in Latin America… the difference is maybe there wasn’t an ecosystem to help these ideas to scale.. .there are huge fortunes in the region but they typically… they have a lot of their assets invested in the region… but they need to diversify,” said de Antonio. “Until recently there hasn’t been an active funding market for all of these startups.”

For de Antonio and Ajao, one of the critical lessons that they learned from their time at Stanford and being exposed to the broader Silicon Valley ecosystem was the notion of collaboration.

“This is something we learned from San Francisco,” de Antonio said. “The way companies help each other is something that we haven’t seen people do before. And usually when you are a young company this can be the difference between being successful or a failure.

Zynga the casual games developer which once rode Facebook’s platform to popularity and riches is now turning its attention to Snap for growth.

Today, the gaming company is launching its new battle royale game, Tiny Royale, exclusively on Snap’s gaming platform, Snap Games.

A multiplayer shooting game first announced as part of the big unveiling of Snap Games in April, Tiny Royale’s likely aim is to bring the popular game format that has made Fortnite and PlayerUnknown’s Battlegrounds so successful to the Snap platform.

In the game, players can choose custom characters and form squads with friends or battle alone for quick two-minute rounds to gather loot and shoot their way to victory.

Up to 30 players can battle at a time in terms of up to four. The gameplay is much the same as the other battle royale games with maps shrinking in size until only one player, or team, remains, the company said.

“We are thrilled to be one of the first companies to launch a gaming experience on Snapchat,” said Bernard Kim, president of Publishing at Zynga, in a statement. “Game developers rarely get the opportunity to create an entirely new experience on an emerging platform so our team was excited to remix the battle royale genre into a fast-paced game designed to rock on Snap Games.”

Built on the PlayCanvas game engine, Snap Games features a selection of third party titles. Players can access Tiny Royale through the Snapchat messaging feature and use text and voice-based features during game play. Later the summer, Zynga will offer a ranked matchmaking feature called Tiny Royale Leagues, which will place competitors in groups of 100, broken out into 20 tiers. Players can battle to climb up in tier ranks earning trophies and rewards based on their performance.

Snap launched in April with six announced titles including Tiny Royale and:

• Bitmoji Party, you can play as yourself in a series of quick, wacky mini-games.
• Snake Squad from Game Closure, you and your squad work together to be the last ones standing!
• C.A.T.S. Drift Race from ZeptoLab, you’ll drift around the track and speed past friends for the win!
• Zombie Rescue Squad from PikPok, your squad will rescue survivors in a zombie-infested city.
• Alphabear Hustle from Spry Fox, you’ll collaborate to form words — fast! — to build your village.

“Snap Games is all about exploring new ways for friends to play together and Tiny Royale is the perfect example of that,” said Will Wu, Snap’s Head of Snap Games. “We jumped at the chance to have a global leader in mobile games like Zynga develop for our platform, and we can’t wait to see what our community thinks about this new way to connect with each other.”