Year: 2019

Following a failed attempt in July, French inventor Franky Zapata successfully crossed the Channel on top of a hoverboard this weekend. Starting his trek in Sangatte in northern France, the journey took 20 minutes, before landing in St. Margarets Bay, England.

“For the last five to six kilometers I just really enjoyed it,” Zapata told Reuters and other reports on landing near Dover. “Whether this is a historic event or not, I’m not the one to decide that, time will tell.”

Zapata, a former jet ski racer, developed the Flyboard Air some three years back. On July 14, Zapata took part in France’s Bastille Day military parade, riding the Air. That same month, he attempted the feat a first time, only to fall into the water when attempting to land on a boat-mounted platform in order to refuel.

He stopped again to refuel midway, but did so without incident this time out. Three helicopters were along for the ride and a crowd of dozens of well wishers were on-hand to cheer to him upon landing.

Roblox is big. Bigger than Minecraft big. The massively multiple online title has been around since 2006, but the game has been achieving a crazy amount of momentum of late. On Friday, it announced via blog post that it’s grown past 100 million monthly active users, pushing past Minecraft, which is currently in the (still impressive) low-90s.

Here’s a recent piece detailing the service’s dizzying growth since February 2016, who it was hovering around 9 million players. That’s more than 10x growth in a three and a half year span. User-Generated content is a big part of that number, and the company notes that it has around 40 million user created experiences in the game at present.

Sources: TechCrunch, VentureBeat, Roblox

“We started Roblox over a decade ago with a vision to bring people from all over the world together through play,” founder and CEO David Baszucki said of the big new round number. “Roblox began with just 100 players and a handful of creators who inspired one another, unlocking this groundswell of creativity, collaboration, and imagination that continues to grow.”

The company behind the game has also been pumping some big money into development. It paid $30 million in 2017 and $60 million in 2018. Next week, it will be hosting hundreds of attendees at its fifth Roblox Developer Conference.

Per the new numbers, around 40 percent Roblox users are female, with players spread out across 200 countries.

Last year, “Amazon employees met with ICE officials … to market the company’s facial recognition technology,” the ACLU informs us. Amazon VP Brad Huseman later said “We believe the government should have the best available technology.” Then, last month, Motherboard revealed Amazon has partnered with police departments around the country to create “a self-perpetuating surveillance network” of Ring products.

Allow me to be the umpteenth to say: what the hell, Amazon?

Amazon shareholders, tech employees, warehouse employees, and customers are all protesting this marketing of Rekognition to ICE, as well with the services provided by Amazon to infamous Palantir. More than 500 Amazon tech employees, in particular, have signed a letter of protest — but Amazon’s leadership does not yet seem to be willing to engage with them in good faith.

Instead, Amazon has defended itself with a “Facts on Facial Recognition with Artificial Intelligence” page, in which they seem to think the only possible problem with their technology is the possibility of false positives, and offer halfhearted half-measures as “In all public safety and law enforcement scenarios, technology like Amazon Rekognition should only be used to narrow the field of potential matches … facial recognition software should not be used autonomously.”

The technical concerns are real enough, as shown by Orlando’s cancellation of their pilot Rekognition program. But I’m tired of tech companies acting as if they have no responsibility to the public beyond fixing their bugs and getting their tech working as intended. Sometimes the intent itself is the problem.

“I feel that society develops an immune response eventually to the bad uses of new technology, but it takes time,” Jeff Bezos has said. Which is true as far as it goes. But a corollary is that, in the interim, while society hasn’t developed immune responses, we should be especially cautious about abuses. Another is that the world’s wealthiest man should not abdicate his own nontrivial part in optimizing society’s immune response. With great power, they say, comes great responsibility.

The question is not really whether Rekognition’s technical problems will be solved. The question is whether marketing it to governments and law enforcement in order to enable ubiquitous panopticon surveillance is good for any society in the world. It’s dangerously intellectually lazy to say “if it’s legal it must be OK” or “the institutions of democracy will protect us from harm, therefore as a tech maven I don’t need to think or worry about any consequences.”

In reality the law is extremely slow to react to new technologies, and our institutions are increasingly sclerotic and paralyzed — as much the tech industry will be all too eager to tell you in other contexts. Relying on them for our “immune response” is wilful negligence. Yes, technology is like fire, in that it always can be used for both good and bad; but we are rightfully far more cautious about fire in tinderbox conditions than we are during the rainy season, and we adjust our risk assessment accordingly. The unwillingness of tech companies to accept their responsibility for the risks they create is beyond worrying.

As I’ve said before, the only real, or at least real-time, check on tech companies is their own employees. So it’s heartening to see AWS employees push back against company policies — and worrying, at best, to see Amazon refuse to engage with them in good faith. The world expects better of Bezos and Amazon than dodging important questions about the risks of their technologies and passing them off as someone else’s department.

Facebook provides another cautionary tale. Hard as it may be to believe now, not all long ago they were widely respected, trusted, and even beloved. A backlash against companies like Amazon and Facebook seems at first like few minor cavils from an extremist fringe … but sometimes the pebbles of complaint suddenly accumulate into a landslide of contempt. Let’s hope Amazon sees the light before the techlash turns yet another erstwhile hero into a thoroughly modern villain.

Indian conglomerate Reliance Industries is acquiring 87.6% stake in Fynd, a seven-year-old Mumbai-based startup that connects brick and mortar retailers with online stores and consumers, for 2.95 billion Indian rupees ($42.33 million), the two said in a brief statement late Saturday.

Fynd, which was founded in 2012, helps offline retailers sell their products to consumers directly through its online store, and also enables them to connect with other “demand channels” such as third-party e-commerce platforms Amazon India and Walmart-owned Flipkart.

More than 600 brands including Nike, Raymond, Global Desi, and Being Human, and 9,000 stores are connected through Fynd’s platform, Harsh Shah, co-founder of Fynd, told TechCrunch in an interview. Many brands use Fynd’s products to also ramp up sales in their own respective e-commerce businesses.

Since Fynd works directly with brands, it offers a wider selection of items and newer inventories to consumers, as well as faster delivery, Shah claimed.

Fynd’s website

Reliance Industries, which owns the nation’s biggest physical retail chain Reliance Retail, has been a customer of Fynd for more than six years, Shah said. “Reliance runs a few major brands in the country. 25 of our existing brands are owned by them. Our Find Store product has helped their stores plug a lot of sales,” he said.

Fynd, which counts Google as one of its early investors, will continue to operate its existing business and has an option to secure an additional 1 billion India rupees ($14 million) by end of 2021 from Reliance Industries, Shah said. He declined to reveal how much capital his startup had raised prior to this week’s announcement. According to Crunchbase, Fynd has raised about $7.3 million.

“Reliance is taking the majority stake in Fynd, but at the end of the day, for us it is like any other investor coming in. We will still continue to work separately, we have our own independent roadmap, and we have own clients and products that we plan to grow. So things continue as it is,” he said.

Fynd, which takes a small commission on each transaction that occurs online, is already profitable on an operating level and expects to be fully profitable in the coming quarters, Shah said.

It will continue to build and scale its existing products, including OpenAPI that allows merchants to quickly list their products on either their own stores or third-party sites and manage their inventories and sales.

Despite tens of billions of dollars of investment in India’s e-commerce market in recent years by Amazon India and Flipkart, physical retail dominates the sales in the country. But e-commerce businesses in India are growing, too.

The nation’s e-commerce space is estimated to scale to $84 billion by 2021, up from $24 billion in 2017; compared to India’s overall retail market that is estimated to be worth $1.2 trillion by 2021, according to a recent study by Deloitte India and Retail Association of India.

Reliance Industries, run by Asia’s richest man Mukesh Ambani (pictured above), additionally has its own plan to enter the e-commerce business. Earlier this year, Ambani announced that his telecom operator Reliance Jio and Reliance Retail are working on an e-commerce platform.

Reliance Jio, which began its commercial operations in the second half of 2016, recently became the nation’s biggest telecom operator with more than 331 million subscribers at the end of June.

Separately, Amazon in talks with Reliance Industries to buy more than a quarter stake in Reliance Retail, a person familiar with the matter told TechCrunch. News outlets Reuters and Economic Times were first to report this development.

Hello, weekenders. This is Week-in-Review, where I give a heavy amount of analysis and/or rambling thoughts on one story while scouring the rest of the hundreds of stories that emerged on TechCrunch this week to surface my favorites for your reading pleasure.

Last week, I talked about the Facebook FTC fine, the Sprint/T-Mobile deal getting approved, and the creeping feeling that decisive antitrust action was going to be fairly limited in scope.

Jaap Arriens/NurPhoto via Getty Images

The big story

There’s no rest for the wicked.

The very same week that users impacted by the Equifax breach were told they wouldn’t be receiving their full $125 settlement because too many people wanted it and not enough funds were put aside, we heard about a new awful hack, this time affecting Capital One and about 100 million of its customers.

Before delving into the blame game, I’d first like to call attention to their ingenious solution towards minimizing the fallout, by hoping affected parties didn’t read the bullet points in their statement.

Why does Capital One feel it gets to act this way? Because transparency still isn’t incentivized in any way during these data breaches and for these companies damage minimization is the true crisis, not making things better for consumers.

The FTC settlement with Equifax has left the stock price in the worrisome position of being within striking distance of an all-time high. The fact that consumer payouts were lowered because the FTC didn’t understand the full scope of consumers that knew they had been affected just adds insult to injury.

We likely still don’t know the extent of the damage from this breach, but we all understand the extent of the damage that Capital One may end up feeling — our anger and not much else.

Send me feedback
on Twitter @lucasmtny or email
lucas@techcrunch.com

On to the rest of the week’s news.

Image via Getty Images / mrspopman

Trends of the week

Here are a few big news items from big companies, with green links to all the sweet, sweet added context:

• Facebook is still working on a brain-computer link
  You might imagine that after all the privacy scandals have highlighted Facebook’s inability to cope with ethical concerns on existing platforms, Facebook may be a bit more reticent to build out future platforms, but you would be wrong! Facebook picked this week to highlight some of the progress of its non-invasive thought-to-text speech that it hopes will bring sophisticated input to AR headsets in the future. Read more here.
• A Ninja disappears
  Microsoft, and you may not know this, runs a Twitch competitor called Mixer which it built on the back of its Beam acquisition. The platform received a lot more visibility this week when one of Twitch’s biggest stars, Ninja, announced he was going to be leaving the platform and streaming exclusively on the Microsoft-owned platform. I am deathly curious what the price of this deal was, shoot me an email if you have leads. Read more here.
• Trump strikes at JEDI
  Maybe $10 billion isn’t what it used to be in the age of Softbank and decacorns being the new unicorns, but to Silicon Valley’s cloud titans, the government’s $10B JEDI cloud contract is huge. Trump also hates Jeff Bezos and is lobbying the DoD not to toss Amazon any favors. Read more here.

GAFA Gaffes

How did the top tech companies screw up this week? This clearly needs its own section, in order of badness:

1. Apple reigns in Siri recording analysis after backlash:
   [Apple suspends Siri response grading in response to privacy concerns]
2. Google gets busted over voice recordings as well:
   [Google ordered to halt human review of voice AI recordings over privacy risks]

Photo by Steve Jennings/Getty Images for TechCrunch

Extra Crunch

Our premium subscription service had another week of interesting deep dives. The most interesting — of course — was what I wrote this week :) I chatted with NEA’s GP Scott Sandell about his investments in both Salesforce and Tableau and about his 25-year career in VC.

The Exit: The acquisition charting Salesforce’s future

“Sandell: Well, I don’t know, I can’t speak for the industry because I think most firms are different. But at NEA, we intentionally hire and develop associates, and some of them become partners and general partners. So we have a long tradition in a systematic way of doing that.

Matney: Why do you favor that route?

Sandell: That’s a good question. I think, looking at it from the other side, we haven’t had a lot of success, hiring in very seasoned executives and turning them into investors, and I don’t think the industry has either. I think that that’s a fairly low-probability event that somebody that’s been the CEO of XYZ turns into a great investor.

Adding somebody as a general partner means that you’re going to commit a lot of capital to them before you know whether they’re any good, so they’re a much more expensive failure if they come in as a general partner and turn out not to be a good enough investor. You know, a lot of people come in that way and think they already know everything there is to know, they’re a little bit less likely to recognize that being an investor is an entirely different skillset. And while the experience they have can be informative to that and possibly very advantageous, it’s really a completely different game…”

Here are some of our other top reads this week for premium subscribers. This week, we talked about “virtual beings” and how to handle exceptional talent at your startup.

• A guide to virtual beings and how they impact our world
• The dreaded 10x, or, how to handle exceptional employees

We’re excited to announce The Station, a new TechCrunch newsletter all about mobility. Each week, in addition to curating the biggest transportation news, Kirsten Korosec will provide analysis, original reporting and insider tips. Sign up here to get The Station in your inbox beginning this month.

“Years and Years” is an unusual show. It’s a co-production of HBO and the BBC, and in the course of six hourlong episodes, it covers a span of more than 10 years in our near future.

During that time, we see the rise of a terrifying Trump-style politician in the United Kingdom named Vivian Rook (played by Emma Thompson), along with lots more political, economic and technological upheaval. All of this is seen through the eyes of Manchester’s Lyons family — grandmother Muriel and adult siblings Rory, Edith, Daniel and Rosie, plus their spouses and children.

No one in the family is a major power player; they simply watch everything change with a growing sense of dread. That, in large part, is what makes the show effective — it feels true to the experience of trying to get on with your life while the world shifts around you.

On the latest episode of the Original Content podcast, we spend the entire hour reviewing the show. We had some reservations about the finale — which seemed to abandon the strengths of the previous episodes — but even so, we were impressed by the series, and by the way it brought so many of our fears to life.

You can listen in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also send us feedback directly. (Or suggest shows and movies for us to review!)

And if you want to skip ahead, here’s how the episode breaks down:

0:00 Intro
0:23 “Years and Years” review
30:07 “Years and Years” spoiler discussion

What founders need to know about pro rata rights

Pro rata used to be reasonably simple. Venture investors who bought preferred shares in startups had the right to lock in a certain percentage of equity provided they continued funding the company in the future rounds of financing. But as VCs have raised ever larger funds and cap tables have become ever more congested, who gets pro rata — and who keeps it — has become a massive distraction for many founders during their fundraises.

Andy Sparks, the founder of Holloway Guides (which, as my co-editor Eric Eldon wrote this week, raised $4.6 million from the New York Times and others), writes in with an analysis of pro rata rights from the latest Holloway Guide on Raising Venture Capital. We are really digging this new model of covering the issues affecting startups, and wish Sparks and his team well in their endeavor.

Pro rata is Latin for “in proportion.” Most people are familiar with the concept of prorating from dealing with landlords: if you’re entering into a lease halfway through the month, your rent may be prorated, where you pay an amount of the rent that is in proportion to your time actually occupying the property.

Almost all investors try to negotiate for pro rata rights, because if a company is doing well they want to own as much of it as possible. After all, why not double down on a winner than use that same money to invest in a newer, unproven company? In the 2018–2019 fundraising climate, though, it’s safe to say we’re at “peak pro rata.” Everybody wants pro rata, even those who don’t entirely understand how it works or affects companies.

Which immigration headlines should you care about?

Every day in the United States, immigration issues dominate the headlines. That can be very taxing for startups, which are often founded by immigrant entrepreneurs and often have sizable immigrant employee bases as well. So which stories should you pay attention to and which stories can you ignore and live in blissful ignorance?

Tesla is resurrecting a popular benefit that CEO Elon Musk once called “unsustainable” as it attempts to boost sales of its more expensive electric vehicles.

Tesla announced Saturday that all new Model S sedans and Model X SUVs will come with free unlimited access to its network of electric vehicle chargers known as superchargers.

The move comes on the heels of a second quarter of wider-than-expected losses of $408 million despite record deliveries of its electric vehicles.

The automaker reported in July it delivered a record 95,200 of its electric vehicles in the second quarter, a dramatic reversal from a disappointing first period. The company generated $6.3 billion in revenue in the second quarter from those sales, the bulk of which came from its lower margin and less expensive Model 3 vehicles.

Meanwhile, sales of the Model S and Model X have slowed. Of its 95,200 deliveries, just 17,650 were Model S and X vehicles. Tesla doesn’t separate delivery or production figures for the S and X.

In its early days, free unlimited supercharging was part of the package of buying a Tesla vehicle.

Tesla began phasing out free unlimited access to its supercharger network when it announced that customers who buy cars after January 1, 2017 will have 400 kilowatt-hours, or about 1,000 miles, of free charging every year. Once owners surpassed that amount, they would be charged a small fee.

Tesla then narrowed the free unlimited access to superchargers through a referral program and only to buyers of performance versions of the Model S, Model X and Model 3. The free unlimited supercharger referral program is now set to end September 18.

Musk has brought back the perk several times since to drive sales.

It’s unclear how long this latest offer will last. The company has been tinkering with its pricing structure, vehicle configurations and rewards programs, with changes occurring monthly.

The fashion industry has historically relied on exploitative, unsustainable and unethical labor practices in order to sell clothes — but if recent trends are any indication, it won’t for much longer. Over the last several years, the industry has entered a remarkable period of upheaval, with major and small fashion brands alike ditching traditional methods of production in favor of eco-friendly and cruelty-free alternatives. It’s a welcome, long-overdue development, and it’s showing no signs of slowing down.

Tradition fashion is unethical in almost too many ways to count. There is, of course, the monstrous toll on animal life. Every year, over one billion animals are slaughtered for their fur or pelts, usually after living their lives in horrific factory farms.

Cows, including newborn and even unborn calves, are skinned alive in order to make leather, while animals killed for their fur are executed through anal electrocution, neck-snapping, drowning and other ghastly ways in order to avoid damaging their pelts. Even wool, traditionally perceived as a more humanely-produced animal product, involves horrors on par with those at a slaughterhouse.

But animals aren’t the only ones who suffer under the traditional fashion industry. In Cambodian garment factories, which export around $5.7 billion in clothes every year, workers earning 50 cents an hour are forced to sit for 11 hours a day straight without using the restroom, according to Human Rights Watch.

Mass faintings in oppressively hot factories are common, and workers are routinely fired for getting sick or pregnant. In Bangladesh — the world’s second-largest importer of apparel behind China — a poorly-maintained garment factory collapsed in 2013, killing 1,132 people and injuring around 2,000 others. When Cambodian garment workers protested in 2014 for better working conditions, police shot and killed three of them.

Lastly, traditional fashion is killing the planet. Every year, the textile industry alone spits out 1.2 billion tons of greenhouse gases — more than all marine shipping vessels and international flights combined — and consumes 98 million tons of oil. Textile dyeing is the second-largest polluter of clean water, and on the whole, the apparel industry accounts for 10 percent of all greenhouse emissions worldwide. Worst of all, the clothes produced by this massive resource consumption produces clothes are rapidly discarded: In 2015, 73 percent of the total material used to make clothes ended up incinerated or landfilled, according to a study by the Ellen MacArthur foundation.

Thankfully, as big and small clothing manufacturers alike are realizing, there are plenty of ways to sell fashionable clothing and accessories that don’t destroy the environment, endanger workers, or cause suffering to animals.

Vegan clothes are becoming increasingly popular, and there’s no shortage of them to choose from. Some brands, like Keep Company and Unicorn Goods, offer an expansive generalized catalogue of vegan shirts, jackets, accessories and more. Other brands are more specialized: Unreal Fur has a beautiful line of vegan faux-fur, Ahisa, Beyond Skin and SUSI Studio all sell stylish vegan shoes, and Le Buns specializes in vegan swimwear. There are upscale vegan clothing retailers, such as Brave Gentleman, as well as more casual budget options, like The Third Estate.

Strict veganism isn’t the only way to manufacture clothing ethically. Hipsters For Sisters’ products are made entirely with recycled, upcycled, or deadstocked materials, earning the approval of PETA. Reformation utilizes a carbon-neutral production process to make its clothes (and offers customers a $100 store credit if they switch to wind energy), while Stella McCartney’s entire product line is vegetarian.

British fashion designer Stella McCartney poses prior her presentation during the men and women’s spring/summer 2019 collection fashion show in Milan, on June 18, 2018. (Photo by MIGUEL MEDINA / AFP) (Photo credit should read MIGUEL MEDINA/AFP/Getty Images)

Many vegan clothing companies, such as In The Soulshine and Della, have found ways to sell cruelty-free clothing while also providing humane working conditions to their factories’ workers. Amanda Hearst’s Maison de Mode features a combination of Fair Trade, recycled, cruelty-free, and organic products — as well as a comprehensive labeling system to inform customers which is which.

There are plenty of small, niche companies offering ethical clothing options, but make no mistake: The transition to sustainable and ethical fashion is an industry-wide phenomenon. Well-established brands like Dr. Marten’s, Old Navy, H&M and Zara all now sell vegan clothes. Gap, Gucci, and Hugo Boss have banned fur from their stores, and three of the largest fashion conglomerates — H&M Group, Arcadia Group and Inditex — recently pledged to stop selling mohair products by 2020.

Companies are rapidly investing in new ethical alternatives to traditional clothing as well: Save The Duck’s PLUMTECH jackets feature a cruelty-free alternative to down feathers, while companies like Modern Meadow are developing new biofabricated leather made from collagen protein and other essential building blocks found in animal skin that don’t require the slaughter of any animals.

There are, of course, some holdouts. Canada Goose still traps and kills coyotes to make its fur jackets, and uses a device that’s been banned in dozens of countries for its cruelty in order to do so. As a result, its store openings regularly draw protesters.

But by and large, the trend is in the opposite direction. From up-and-coming brands to the biggest names in fashion, the industry is moving away from the destructive practices of years past and toward cleaner, ethical ways of making clothes.

It shouldn’t be a surprise. After all, being successful in fashion has always required changing with the times — and in 2019, basing an industry on labor abuse, destruction of the environment and animal torture to make their products is no longer a sustainable business model.

Cryptocurrency fans who were hoping to use Apple’s forthcoming credit card to splash on coin are out of luck. You also won’t be able to use the Apple Card to buy lottery tickets, casino gambling chips in any form, physical or virtual, or foreign currency or travelers checks.

Reuters spotted the detail in a customer agreement posted to Apple Card’s card issuer partner Goldman Sachs’ website which lists restrictions on transactions it describes as “cash advance and cash equivalents”.

The agreement defines these as meaning “any cash advance and other cash-like transaction, including purchases of cash equivalents such as travelers checks, foreign currency, or cryptocurrency; money orders; peer to peer transfers, wire transfers or similar cash-like transactions; lottery tickets, casino gaming chips (whether physical or digital), or race track wagers or similar betting transactions”.

Given the wild swings in crypto valuations the Apple+Goldman credit tie-up saying a firm ‘no’ to cardholders splashing on such shaky stuff is hardly surprising.

Apple announced it was getting into the credit card game back in March, saying the card would offer a 2% cash back incentive for using Apple Pay to make purchases. (The physical version of the Apple Card is slightly less generous vs the digital card.) While if you’re buying stuff direct from Apple there’s 3% cash-back.

There are also no late fees and no penalty rates. Interest rates for Apple Card are in the range of 13-24%, based on the user’s creditworthiness.

As with Apple Pay, there’s a privacy promise too — with a pledge that Apple Card transaction data won’t be sold for advertising or marketing, not by Apple, Goldman or any other partners. Though data may be shared with regulators for financial reporting purposes and so on.

The Apple Card is due to be released in the US next month.