Year: 2019

Several weeks ago, the WSJ reported that SpaceX, Elon Musk’s rocket company, was set to raise $500 million from earlier shareholders and the Scottish money management firm Baillie Gifford & Co. in a bid to help get its internet-service business off the ground.

The Hawthorne, Ca. company still hasn’t announced the round, but it nevertheless made things official today, filing more details about the fundraise with the SEC. Though the filing doesn’t confirm Baillie Gifford’s involvement, it does show that the company has secured at least $273.2 million toward a planned $500 million round from 8 investors.

It also, notably, lists the involvement longtime investor Steve Jurvetson, who has been on the board of both SpaceX and Musk’s car company, Tesla Motors, for 10 and 13 years, respectively. Why it’s worth mentioning: After Jurvetson left DFJ, the venture capital firm he co-founded, in 2017 amid questions about his personal conduct, there was uncertainty around whether he would keep those director positions. Indeed, at the time, a Tesla spokesperson told the outlet Recode that Steve Jurvetson “is on a leave of absence from the SpaceX and Tesla boards pending resolution of these allegations.”

DFJ’s investigation into those allegations led the firm to later apologize for an event hosted at the Half Moon Bay home of Jurvetson, which reportedly featured sex and drug use. Musk, however, who attended the event, suggested that it was far more sedate, telling WIRED at the time, “If there are ‘sex parties’ in Silicon Valley, I haven’t seen or heard of one . .  If you want wild parties, you’re in the wrong place. Obviously. That DFJ party was boring and corporate, with zero sex or nudity anywhere.”

Either way, Jurvetson wasted little time in forming a new venture firm, Future Ventures, which has been up and running for 11 months and looks to fund startups in commercial space exploration, deep learning, quantum computing, robotics, AI, blockchain, sustainable transportation, synthetic biology and clean meat.

Now we know that he remains very involved in SpaceX, too.

It’s not so surprising, given that Musk and Jurvetson have enjoyed a long relationship. In fact, because SpaceX remains privately held and Musk holds super-voting shares, he has extra power in corporate decison-making, as Recode noted in a more recent report.

Meanwhile, publicly traded Tesla has also stuck by Jurvetson. Despite changes to the board’s composition that were brought about as part of its settlement with the SEC — late last year, it added new board members Larry Ellison and Kathleen Thompson-Wilson, and Robyn Denholm replaced Musk as chairman — Jurvetson remains a director.

Assuming SpaceX closes its newest round of funding, it will have raised $2.5 billion in equity funding altogether, according to Dow Jones VentureSource.

Other outside directors listed on the new filing include Luke Nosek of Founders Fund; Donald Harrison, a longtime Googler who is currently the company’s president of global partnerships and corporate development; and Antonio Gracias of Valor Equity Partners, who, like Jurvetson, also sits on the board of Tesla.

Several weeks ago, the WSJ reported that SpaceX, Elon Musk’s rocket company, was set to raise $500 million from earlier shareholders and the Scottish money management firm Baillie Gifford & Co. in a bid to help get its internet-service business off the ground.

The Hawthorne, Ca. company still hasn’t announced the round, but it nevertheless made things official today, filing more details about the fundraise with the SEC. Though the filing doesn’t confirm Baillie Gifford’s involvement, it does show that the company has secured at least $273.2 million toward a planned $500 million round from 8 investors.

It also, notably, lists the involvement longtime investor Steve Jurvetson, who has been on the board of both SpaceX and Musk’s car company, Tesla Motors, for 10 and 13 years, respectively. Why it’s worth mentioning: After Jurvetson left DFJ, the venture capital firm he co-founded, in 2017 amid questions about his personal conduct, there was uncertainty around whether he would keep those director positions. Indeed, at the time, a Tesla spokesperson told the outlet Recode that Steve Jurvetson “is on a leave of absence from the SpaceX and Tesla boards pending resolution of these allegations.”

DFJ’s investigation into those allegations led the firm to later apologize for an event hosted at the Half Moon Bay home of Jurvetson, which reportedly featured sex and drug use. Musk, however, who attended the event, suggested that it was far more sedate, telling WIRED at the time, “If there are ‘sex parties’ in Silicon Valley, I haven’t seen or heard of one . .  If you want wild parties, you’re in the wrong place. Obviously. That DFJ party was boring and corporate, with zero sex or nudity anywhere.”

Either way, Jurvetson wasted little time in forming a new venture firm, Future Ventures, which has been up and running for 11 months and looks to fund startups in commercial space exploration, deep learning, quantum computing, robotics, AI, blockchain, sustainable transportation, synthetic biology and clean meat.

Now we know that he remains very involved in SpaceX, too.

It’s not so surprising, given that Musk and Jurvetson have enjoyed a long relationship. In fact, because SpaceX remains privately held and Musk holds super-voting shares, he has extra power in corporate decison-making, as Recode noted in a more recent report.

Meanwhile, publicly traded Tesla has also stuck by Jurvetson. Despite changes to the board’s composition that were brought about as part of its settlement with the SEC — late last year, it added new board members Larry Ellison and Kathleen Thompson-Wilson, and Robyn Denholm replaced Musk as chairman — Jurvetson remains a director.

Assuming SpaceX closes its newest round of funding, it will have raised $2.5 billion in equity funding altogether, according to Dow Jones VentureSource.

Other outside directors listed on the new filing include Luke Nosek of Founders Fund; Donald Harrison, a longtime Googler who is currently the company’s president of global partnerships and corporate development; and Antonio Gracias of Valor Equity Partners, who, like Jurvetson, also sits on the board of Tesla.

With all of the advances made by computer vision tech in the past few years, it might seem a little crazy that so much of the x-ray security equipment being used at sensitive locations is leaning so heavily on human workers to stop weapons from slipping through.

Synapse Technology is creating computer vision tech which can interface with existing x-ray machines through a hardware add-on that doesn’t void the warranty but does add a neural net-powered assistant to lend a second set of eyes to the items being scanned.

The startup has announced the close of a $6 million seed round led by Founders Fund, 8VC and Village Global.

While the company’s largely focused on security checkpoints for “critical infrastructure” sites like government buildings or schools, the company has key interests in getting their tech into airports, another clear market for the tech. Synapse is running a pilot program at Tokyo’s Narita airport and the company says that the scanners are pulling in 14 percent more prohibited items as a result of using their technology.

The startup has helped scanned more than 5 million bags to date and is pushing to expand the scope of what they can detect. The company has been performing lab test to detect 3D-printed weapons with their technology.

“[X-ray machines] are relying on human beings which are just fundamentally limited,” Synapse President Ian Cinnamon told TechCrunch in an interview. “With our software and AI, they can now automatically be detecting weapons with a much higher degree of accuracy.

Synapse’s tech isn’t analyzing luggage to make sure you aren’t packing toiletries over 3 oz. in your carry-on. For now the team’s really focused on detecting the more high-profile threats such as guns and sharp objects like knives. Beyond improving the quality of life for airport security workers, the company says that their AI tech makes it easier for them to detect objects behind large electronics, meaning that Synapse tech could one day let people leave their laptop in bags without compromising security.

For airports, the list of prohibited items stretches into the dozens so Synapse isn’t really looking to replace workers but give them fewer things to worry about. “The more that our algorithms take on, the better that humans are able to perform,” Cinnamon tells us.

The startup will be using this funding to get its product into more critical infrastructure location and ramp up hiring.

With all of the advances made by computer vision tech in the past few years, it might seem a little crazy that so much of the x-ray security equipment being used at sensitive locations is leaning so heavily on human workers to stop weapons from slipping through.

Synapse Technology is creating computer vision tech which can interface with existing x-ray machines through a hardware add-on that doesn’t void the warranty but does add a neural net-powered assistant to lend a second set of eyes to the items being scanned.

The startup has announced the close of a $6 million seed round led by Founders Fund, 8VC and Village Global.

While the company’s largely focused on security checkpoints for “critical infrastructure” sites like government buildings or schools, the company has key interests in getting their tech into airports, another clear market for the tech. Synapse is running a pilot program at Tokyo’s Narita airport and the company says that the scanners are pulling in 14 percent more prohibited items as a result of using their technology.

The startup has helped scanned more than 5 million bags to date and is pushing to expand the scope of what they can detect. The company has been performing lab test to detect 3D-printed weapons with their technology.

“[X-ray machines] are relying on human beings which are just fundamentally limited,” Synapse President Ian Cinnamon told TechCrunch in an interview. “With our software and AI, they can now automatically be detecting weapons with a much higher degree of accuracy.

Synapse’s tech isn’t analyzing luggage to make sure you aren’t packing toiletries over 3 oz. in your carry-on. For now the team’s really focused on detecting the more high-profile threats such as guns and sharp objects like knives. Beyond improving the quality of life for airport security workers, the company says that their AI tech makes it easier for them to detect objects behind large electronics, meaning that Synapse tech could one day let people leave their laptop in bags without compromising security.

For airports, the list of prohibited items stretches into the dozens so Synapse isn’t really looking to replace workers but give them fewer things to worry about. “The more that our algorithms take on, the better that humans are able to perform,” Cinnamon tells us.

The startup will be using this funding to get its product into more critical infrastructure location and ramp up hiring.

The unbundling of the bank has begun.

Just 10 years ago, the average consumer had very few financial relationships and interacted with just one or two institutions to fulfill all of their financial needs. But fintech companies are breaking up the old guard by focusing on specific things that banks have done and simply doing them better. As a result, the average consumer now has numerous financial relationships, each with a clear-cut purpose.

The fintech revolution started after the 2008 financial crisis, and was driven largely out of frustration with the existing establishment. Facing heavy scrutiny, banks pulled back dramatically on a lot of their activities to reduce risk, which left a significant gap in the marketplace. Fintech companies stepped in and brought new ideas to an industry that had seriously lacked innovation. But now that the economy has rebounded, banks are aggressively running straight into that gap to recapture what they lost.

The established banks are focused on copying the best of what fintech has to offer. They’re moving slowly and are a solid five years behind, but their goal is to provide a just-good-enough mobile experience to ensure their customers stay with them. Banks know they don’t need to be better than the fintech companies; their advantages of scale and distribution ensure they can maintain their substantial customer base with a sufficient product.

Those advantages prevent fintech companies from truly competing against banks. If a bank really wants to be in a certain business, it can dominate a fintech company every single day because it has lower cost of funds and can afford to pay more per customer. That makes me generally pessimistic about any fintech company whose only wedge is serving a market that banks don’t serve. Most of those companies will find themselves unable to grow beyond a certain level in the long-term because they will be copied by the establishment.

Thinking about how to stay relevant as a fintech company, the only defensible, long-term strategy is driven by automation.

The next 20 years are going to be defined by the way automation transforms the average person’s life. An intelligent service will make, and then execute, most of an individual’s financial decisions in the not-so-distant future. That service will collaborate with the person to understand their human objectives — when they want to retire or where they can afford to send their children to college — and use its super intelligence and its ability to execute things in microseconds over and over to put the entire financial system to work for the person. The individual may not understand how or why the intelligent service is doing all of these things, but he or she knows the actions are completely in the service of improving his or her life.

Imagine a scenario where a person ports their entire financial profile wherever they want it. With the push of a button, all of their accounts are transferred from one place to another, much like porting a phone number.

The cellphone industry, for example, fought very hard to prevent the porting of numbers because not allowing it created stickiness. That stickiness reduced people’s willingness to switch carriers, which allowed the carriers to charge higher prices. In 2003, when the government forced the industry to allow the porting of phone numbers, cellphone plan prices went down. Excess profits evaporated when this friction was eliminated.

Automation is the ultimate reduction in friction because it allows optimizations to happen perpetually. Automation allows optimizations to happen at zero marginal cost. Automation allows optimizations to happen without human involvement, and when you’re able to do that, the customer is always matched with the ideal financial situation.

This is a nightmare scenario for banks: Once automation reduces enough friction in the financial industry, banks lose their relationships with customers. They become a utility; a provider of pipes and wires that allow money to be stored and moved from place to place. Then, specialized fintech companies swoop in and use their data expertise to make decisions for people and execute on those decisions. The end result is an invisible, intelligent service that figures out everything for the customer and does it for them.

In this sense, the power of automation goes beyond an intelligent service’s ability to decide what’s best and take action on behalf of a customer. Automation’s ability to reduce friction allows for a more competitive market, and those actions can create additional wealth for the customer by matching them with the best available product in the marketplace.

Figuring out how to weave intelligent automation into a product experience, a manufacturing process or a product development process is crucial to growth and success for fintech companies. Those that fail to recognize the changing technological landscape run the risk of losing their market share and their position in the marketplace.

The unbundling of the bank has begun.

Just 10 years ago, the average consumer had very few financial relationships and interacted with just one or two institutions to fulfill all of their financial needs. But fintech companies are breaking up the old guard by focusing on specific things that banks have done and simply doing them better. As a result, the average consumer now has numerous financial relationships, each with a clear-cut purpose.

The fintech revolution started after the 2008 financial crisis, and was driven largely out of frustration with the existing establishment. Facing heavy scrutiny, banks pulled back dramatically on a lot of their activities to reduce risk, which left a significant gap in the marketplace. Fintech companies stepped in and brought new ideas to an industry that had seriously lacked innovation. But now that the economy has rebounded, banks are aggressively running straight into that gap to recapture what they lost.

The established banks are focused on copying the best of what fintech has to offer. They’re moving slowly and are a solid five years behind, but their goal is to provide a just-good-enough mobile experience to ensure their customers stay with them. Banks know they don’t need to be better than the fintech companies; their advantages of scale and distribution ensure they can maintain their substantial customer base with a sufficient product.

Those advantages prevent fintech companies from truly competing against banks. If a bank really wants to be in a certain business, it can dominate a fintech company every single day because it has lower cost of funds and can afford to pay more per customer. That makes me generally pessimistic about any fintech company whose only wedge is serving a market that banks don’t serve. Most of those companies will find themselves unable to grow beyond a certain level in the long-term because they will be copied by the establishment.

Thinking about how to stay relevant as a fintech company, the only defensible, long-term strategy is driven by automation.

The next 20 years are going to be defined by the way automation transforms the average person’s life. An intelligent service will make, and then execute, most of an individual’s financial decisions in the not-so-distant future. That service will collaborate with the person to understand their human objectives — when they want to retire or where they can afford to send their children to college — and use its super intelligence and its ability to execute things in microseconds over and over to put the entire financial system to work for the person. The individual may not understand how or why the intelligent service is doing all of these things, but he or she knows the actions are completely in the service of improving his or her life.

Imagine a scenario where a person ports their entire financial profile wherever they want it. With the push of a button, all of their accounts are transferred from one place to another, much like porting a phone number.

The cellphone industry, for example, fought very hard to prevent the porting of numbers because not allowing it created stickiness. That stickiness reduced people’s willingness to switch carriers, which allowed the carriers to charge higher prices. In 2003, when the government forced the industry to allow the porting of phone numbers, cellphone plan prices went down. Excess profits evaporated when this friction was eliminated.

Automation is the ultimate reduction in friction because it allows optimizations to happen perpetually. Automation allows optimizations to happen at zero marginal cost. Automation allows optimizations to happen without human involvement, and when you’re able to do that, the customer is always matched with the ideal financial situation.

This is a nightmare scenario for banks: Once automation reduces enough friction in the financial industry, banks lose their relationships with customers. They become a utility; a provider of pipes and wires that allow money to be stored and moved from place to place. Then, specialized fintech companies swoop in and use their data expertise to make decisions for people and execute on those decisions. The end result is an invisible, intelligent service that figures out everything for the customer and does it for them.

In this sense, the power of automation goes beyond an intelligent service’s ability to decide what’s best and take action on behalf of a customer. Automation’s ability to reduce friction allows for a more competitive market, and those actions can create additional wealth for the customer by matching them with the best available product in the marketplace.

Figuring out how to weave intelligent automation into a product experience, a manufacturing process or a product development process is crucial to growth and success for fintech companies. Those that fail to recognize the changing technological landscape run the risk of losing their market share and their position in the marketplace.

The State of Texas has indicted Cody Wilson, a 3D-printed gun rights activist who fought to allow makers to post and print guns, of sexual assault after he had sex with a 17-year-old girl. The affidavit noted that he met the girl on a website for finding “sugar daddies.” The indictment, posted on Ars, notes that he faces “four counts of sexual assault of a child, two charges of indecency with a child by contact, and two charges of indecency with a child by exposure.”

The charges are punishable by up to 20 years in prison and a $10,000 fine.

The affidavit on the crime said Wilson used the name Sanjuro on the site and that he paid the 17-year-old $500 for sex. His company, DefenseDistributed, has dumped him as founder.

Wilson is out on $150,000 bond and not yet in jail.

He rose to prominence for supporting 3D-printed guns as far back as 2013, causing a panic that reduced interest in the 3D printing industry and led to a court decision in July that found 3D printed gun plans to be legal.

The State of Texas has indicted Cody Wilson, a 3D-printed gun rights activist who fought to allow makers to post and print guns, of sexual assault after he had sex with a 17-year-old girl. The affidavit noted that he met the girl on a website for finding “sugar daddies.” The indictment, posted on Ars, notes that he faces “four counts of sexual assault of a child, two charges of indecency with a child by contact, and two charges of indecency with a child by exposure.”

The charges are punishable by up to 20 years in prison and a $10,000 fine.

The affidavit on the crime said Wilson used the name Sanjuro on the site and that he paid the 17-year-old $500 for sex. His company, DefenseDistributed, has dumped him as founder.

Wilson is out on $150,000 bond and not yet in jail.

He rose to prominence for supporting 3D-printed guns as far back as 2013, causing a panic that reduced interest in the 3D printing industry and led to a court decision in July that found 3D printed gun plans to be legal.

Cruise is partnering with DoorDash to pilot food and grocery delivery in San Francisco using self-driving vehicles.

The companies announced Thursday that the testing program will begin in early 2019 with an initial focus on the San Francisco market.

“Delivery is a significant opportunity for Cruise as we prepare to commercialize our autonomous vehicle technology and transform transportation,” said Dan Ammann, who became CEO of Cruise late last year. “Partnering with DoorDash will provide us with critical learnings as we further our mission to deliver technology that makes people’s lives better and more convenient.” Cruise co-founder Kyle Vogt stepped down as CEO and now holds the CTO position at the company.

The program will be available to select DoorDash customers, who will be able to receive deliveries from restaurants via a Cruise autonomous vehicle. The partnership will also explore grocery fulfillment via Cruise vehicles for select grocers already partnered with DoorDash.

“We see autonomous vehicles playing a major role in the future of delivery as consumer behaviors continue to shift online, and we are confident Cruise’s leading technology will help us scale to meet growing consumer demand,”  DoorDash CEO Tony Xu said in a statement.

The pilot program adds an interesting twist to Cruise’s plans to launch a self-driving ride-hailing service in 2019. The partnership with DoorDash could be viewed as a way for Cruise to perfect its tech and how it can be used in different ways, particularly how it interacts with people.

Apple today is sharing some good news in the wake of yesterday’s reveal of a significant, market-moving cut to its revenue forecast, attributed to declining iPhone sales in China’s slowing economy. The company says its App Store, at least, was having a good holiday. This year, customers spent $1.22 billion during the 2018 holiday season and broke a new single-day record on New Year’s Day.

The $1.22 billion in App Store spending occurred between Christmas Eve and New Year’s Eve, Apple said. This is typically the peak season for App Store consumer spend, as customers load up new iPhones and iPads with apps, and use their App Store Gift Cards to buy paid apps and games.

Apple also said customers spent over $322 million on New Year’s Day 2019, which set a new record for single-day spend.

Over the holidays, games and self-care apps were the most popular categories, with Fortnite and PUBG among the most downloaded games, along with Brawl Stars, Asphalt 9 and Monster Strike, Apple said.

Meanwhile, as the New Year kicks off, customers are now turning to health and fitness apps, educational apps, and productivity apps – likely to some extent inspired by their New Year’s Resolutions. The apps leading these categories include 1Password, Sweat, and Luminosity.

Last year, Apple had also announced a record-breaking holiday season, with $890 million spent during the week of Christmas Eve and $300 milion on New Year’s Day 2018.

Apple CEO Tim Cook, in his letter yesterday, signaled that the App Store remains one of the bright spots in the company’s “Services” category, even as he delivered the crushing news of a slowdown in iPhone sales.

The company said it is now expecting $84 billion in the quarter that ended Saturday, down from its earlier estimate of $89 billion to $93 billion. However, “Services” generated over $10.8 billion in revenue during the quarter, with each geography hitting a new quarterly record. The company noted, too, it’s still on track to achieve its goal of doubling the size of this business from 2016 to 2020.

Today, Apple said the “Services” business set all-time records beyond the App Store in Apple Music, Cloud Services, App Pay, and the App Store’s search ad business.

A record-breaking end of the year for the App Store shouldn’t come as a surprise, given that the overall app economy is continuing to grow, with mobile games still driving revenues and the subscription app business also making gains. App Annie recently predicted app stores will surpass $122 billion globally in 2019, including the App Store, Google Play, and third-party Android app stores in China, combined.

Prior to Apple’s report, app store intelligence firm Sensor Tower had last week noted that the U.S. App Store broke spending records on Christmas, with a record of $54 million on that day alone – up 31 percent over the year before. It had also passed the $52 million spent on Black Friday 2018, the firm said.

Apple typically releases an App Store holiday report at this time of the year, so its release today isn’t necessarily an attempt to create good press a time when its stock is crashing. But given Apple’s usual attempts at spin, it may be seen that way.