Year: 2019

Before Tableau was the $15.7 billion key to Salesforce’s problems, it was a couple of founders arguing with a couple of venture capitalists over lunch about why its Series A valuation should be higher than $12 million pre-money.

Salesforce has generally been one to signify corporate strategy shifts through their acquisitions, so you can understand why the entire tech industry took notice when the cloud CRM giant announced its priciest acquisition ever last month.

The deal to acquire the Seattle-based data visualization powerhouse Tableau was substantial enough that Salesforce CEO Marc Benioff publicly announced it was turning Seattle into its second HQ. Tableau’s acquisition doesn’t just mean big things for Salesforce. With the deal taking place just days after Google announced it was paying $2.6 billion for Looker, the acquisition showcases just how intense the cloud wars are getting for the enterprise tech companies out to win it all.

The Exit is a new series at TechCrunch. It’s an exit interview of sorts with a VC who was in the right place at the right time but made the right call on an investment that paid off. [Have feedback? Shoot me an email at lucas@techcrunch.com]

Scott Sandell, a general partner at NEA (New Enterprise Associates) who has now been at the firm for 25 years, was one of those investors arguing with two of Tableau’s co-founders, Chris Stolte and Christian Chabot. Desperate to close the 2004 deal over their lunch meeting, he went on to agree to the Tableau founders’ demands of a higher $20 million valuation, though Sandell tells me it still feels like he got a pretty good deal.

NEA went on to invest further in subsequent rounds and went on to hold over 38% of the company at the time of its IPO in 2013 according to public financial docs.

I had a long chat with Sandell, who also invested in Salesforce, about the importance of the Tableau deal, his rise from associate to general partner at NEA, who he sees as the biggest challenger to Salesforce, and why he thinks scooter companies are “the worst business in the known universe.”

The interview has been edited for length and clarity. 

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Lucas Matney: You’ve been at this investing thing for quite a while, but taking a trip down memory lane, how did you get into VC in the first place? 

Scott Sandell: The way I got into venture capital is a little bit of a circuitous route. I had an opportunity to get into venture capital coming out of Stanford Business School in 1992, but it wasn’t quite the right fit. And so I had an interest, but I didn’t have the right opportunity.

There is surely no shortage of data in the modern enterprise, and data is the fuel for AI. Yet packaging that data in machine learning models remains a huge challenge for large companies. Without that capability, automating processes with AI underpinnings remains elusive for many companies.

RealityEngines wants to change that by creating research-driven cloud services that can reduce some of the inherent complexity of working with AI tools. We are excited to be including Bindu Reddy, co-founder and CEO at RealityEngines at TechCrunch Sessions: Enterprise, taking place in San Francisco on September 5.

Reddy will be joining investor Jocelyn Goldfein, a Managing Director at Zetta Venture Partners and others. They will be discussing the growing role of AI in the enterprise with TechCrunch editors, as companies try to take advantage of the capabilities machines have over humans to process large amounts of information quickly.

She knows from whence she speaks. Before joining founding Reality Engines, Reddy helped launch AI Verticals at AWS where she served as General Manager. She was responsible for bringing Amazon Personalize and Amazon Forecast to market, two tools that help organizations create machine learning models.

Before that, she was CEO and co-founder at yet another AI startup called Post Intelligence, a company that purported to help social media influencers write AI-driven Tweets. She later sold that company to Uber. If that isn’t enough for you, she served as Head of Products for Google Apps, where she was in charge of Docs, Sheets, Slides, Sites and Blogger.

Early Bird tickets to see Bindu and our lineup of enterprise influencers at TC Sessions: Enterprise are on sale for just $249 when you book here; but hurry, prices go up by $100 soon! Students, grab your discounted tickets for just $75 here.

Adobe’s Customer Experience Platform provides a place to process all of the data that will eventually drive customer experience applications in the Adobe Experience Cloud. This involves bringing in vast amounts of transactional and interactional data being created across commerce platforms. This process is complex and involves IT, applications developers and data scientists.

Last Fall, the company introduced a couple of tools in Beta for the last group. Data scientists need familiar kinds of tools to work with the data as it streams into the platform in order to create meaningful models for the application developers to build upon. Today, it made two of those tools generally available — Query Service and Data Science Workspaces — which should go a long way towards helping data scientists feel comfortable working with data on this platform.

Ronell Hugh, group manager at Adobe Experience Platform, says these tools are about helping data scientists move beyond pure data management and getting into deriving more meaningful insights from it. “Data scientists were just bringing data in and trying to manage and organize it, and now we see that with Experience Platform, they are able to do that in a more seamless way, and can spend more time doing what they really want to do, which is deriving insights from the data to be actionable in the organization,” Hugh told TechCrunch.

Part of that is being able to do queries across the data sets they have brought into the platform. The newly released Query Service will enable data scientists and analysts to write queries to understand the data better and get specific answers based on the data faster.

“With Query Service in Adobe Experience Platform, analysts and data scientists can now poll all of their datasets stored in Experience Platform to answer specific cross-channel and cross-platform questions, faster than ever before. This includes behavioral data, as well as point-of-sale (POS), customer relationship management (CRM) and more,” the company wrote in a blog post announcing the new tool.

In addition, the company made the Data Science Workspace generally available. As the name implies, it provides a place for data scientists to work with the data and build models derived from it. The idea behind this tool is to use artificial intelligence to help automate some of the more mundane aspects of the data science job.

“Data scientists can take advantage of this new AI that fuels deeper data discovery by using Adobe Sensei pre-built models, bringing their existing models or creating custom models from scratch in Experience Platform,” the company wrote in the announcement blog post.

Today, it was the data scientists’ turn, but the platform is designed to help IT manage underlying infrastructure, whether in the cloud or on premises, and for application developers to take advantage of the data models and build customer experience applications on top of that. It’s a complex, yet symbiotic relationship, and Adobe is attempting to pull all of it together in a single platform.

The emergence of online hyperlocal services and e-commerce firms in India has led to the creation of about 200,000 jobs for blue-collar workers who deliver items to customers, according to industry estimates.

But it is also the kind of job that continues to see a high attrition rate. This means that companies like Zomato, Swiggy, Dunzo, Amazon India, and Flipkart have to replace a significant portion of their delivery workforce every three to four months.

“A small portion of these workers either switch jobs to go to a different delivery company, or they take up a different job,” said Madhav Krishna. “And a large chunk of them end up going back to their villages to work on their farms.”

“There is a cyclical migration phenomenon in India wherein a very large population migrates from villages to cities looking for a job. They work in cities for a few months and then return to their hometowns in time for the next crop harvesting season,” he said.

The attrition rate is so high that it has become a major challenge for companies to keep hiring new people, Krishna said. Additionally, with e-commerce and on-demand delivery space projected to grow four to five times in India by 2025, efficient supply acquisition is a major requirement for growth.

Three years ago, Krishna, who obtained his Masters in machine learning from Columbia University before moving to Bangalore, founded Vahan, a startup that is attempting to help these companies find potential blue-collar workers at scale.

Vahan operates a WhatsApp Business account where it informs potential candidates of the available jobs in the industry. Interested candidates are presented with a series of qualifying questions, screened, and are authenticated by Vahan.

Much of this process, which takes merely minutes, is automated via an AI-driven chatbot, and Vahan (Hindi for “vehicle”) directs the shortlisted candidates to its clients for a walk-in interview and on-boarding. Its clients today include food delivery firms such as Zomato and Swiggy, hyperlocal concierge service Dunzo, and logistics company Lalamove.

“There are three things that need to come together: What do people want? What are their capabilities? And the third is, what is available in the market?” Krishna said. “It’s really a matching problem that we’re trying to solve. We are using data and machine learning to solve a complex matching problem.”

Y Combinator (YC) recently selected Vahan to participate in its Summer 2019 batch. In a statement, Adora Cheung, a partner at YC, said, “High mobile penetration coupled with massive growth in data consumption has made it possible for companies such as Vahan to reach millions of Indian via digital channels.”

“Vahan is addressing a space that is severely underserved and is poised for disruption via tech. Their use of WhatsApp is a great fit for reaching the blue-collar audience and their traction proves it. We are excited to back them and see them grow!”

Vahan makes revenue from taking a cut each time its suggested candidates become part of the corporate client’s workforce. For one of the aforementioned clients, the referral cut is about 7.5%, two sources at that company said. The amount also varies based on how long those candidates stick to the platform, they added.

In the last year, Vahan has amassed over a million users and has helped over 20,000 people secure a job. Each day, around 5,000 users check Vahan to look for a job. “This is all through zero-marketing spend. Job seekers are finding us through their friends,” Krishna said.

This is why Vahan operates on WhatsApp, too. “Most of the people we’re trying to help, they are not active on any online recruitment platform. WhatsApp is one of the few apps they use heavily,” Krishna said. “We send over 50,000 messages a day on WhatsApp and 95% of them get read. In fact, 15% get read in under 10 seconds”, he added.

WhatsApp, with more than 400 million users in India, has become a daily habit for much of the internet-connected population of the country. In recent years, many companies have built their businesses on top of the platform to use it as an effective distribution channel for their businesses.

For instance, Meesho, a social commerce app, helps millions of people in the country buy and sell products on WhatsApp. It recently received an investment from Facebook, the first of its kind by the social juggernaut in the country. Dunzo, which has been backed by Google, and Sharechat, which counts Twitter as one its investors, also started on Facebook’s instant messaging app.

As for Vahan, it plans to soon offer skiling courses to its users as they navigate more job opportunities in the future. It is also working with many companies for deeper system-level integrations.

As it sees the platform receive traction, Vahan also wants to expand its offering beyond delivery jobs.

Are your co-workers ignoring you? Welcome to my world! In your case, however, that is probably because Slack is currently down (as of about 11AM EST). According to its status page, some workspaces are experiencing issues with messages sending and loading.

We will update this post once the Slack outage is over.

Huawei on Friday announced the upcoming release of its first 5G handset in its home market. Following on the heels of its UK debut, the Mate 20 X is currently up for pre-order, with an expected China arrival of August 16.

The handset beats the foldable Mate X to market, in spite of that handset having made its debut way back at Mobile World Congress in February. Of course, companies are understandably cautious about foldable in the wake of the mess with the Samsung Galaxy Fold, which finally got an approximate release date last week.

China Mobile flipped the switch on its Huawei-powered 5G transport network late last month, with commercial rollout expected to begin in October. In June, China Telecom and China Unicom were also granted licenses to operate commercial 5G networks, after some delay. Last week, ZTE’s Axon 10 Pro 5G went up for presale in its native China, as well.

Until rollout begins, those purchasing 5G handsets will have to rely on older networks like the rest of us, putting the U.S. and China in similar boats on that front. Of course, security concerns have put both Huawei and ZTE in the crosshairs internationally, particularly North America.

Huawei has reportedly been looking to build much of its own hardware and software in house, particularly in the wake of a ban on its use offerings from U.S. companies. Notably it also announced a $436 million investment in building out an ecosystem around its Arm-based Kunpeng server chip.

Tesla is getting ready to deliver the in-car video streaming services that CEO Elon Musk suggested would eventually come to the automaker’s cars ‘soon.’ Musk shared this (somewhat vague) updated timeline on Twitter over the weekend, after noting earlier in June at E3 that Tesla’s infotainment displays would eventually be getting YouTube and streaming video support.

This is also the first time Musk has specifically said that both YouTube and Netflix would be coming, after previously noting that version 10 of the in-car software would support video streaming generally in reply to a question from a fan on Twitter. Musk added that these would be available to stream video only while the vehicle is stopped – but the plan is to change that once full self-driving becomes a reality.

Once full autonomous driving capabilities are “approved by regulators,” Musk said, the plan is to turn on the ability to stream video in the vehicle while it’s in motion. This plan likely extends to Tesla’s in-car gaming features, too – though that’s a separate level of distraction since you’re actually interacting with what’s happening on the screen, which may not be the best idea for initial roll-out of autonomous features where a driver might be required to take over manual control in case of any incidents.

The Tesla CEO said that the experience of watching video on Netflix and YouTube in a Tesla vehicle is akin to “an old school drive in movie experience, but with much better sound” and that it has an “immersive, cinematic feel” thanks to the surround audio available via the Tesla’s audio system and its “comfy seats.”

It may seem like a weird software update priority for a car, but it’s entirely possible Tesla owners spent so much on their vehicles that they don’t have spare cash for a fixed address, in which case an entertainment system for their tiny apartment actually makes a lot of sense.

Europe’s top court has made a ruling that could affect scores of websites that embed the Facebook ‘Like’ button and receive visitors from the region.

The ruling by the Court of Justice of the EU states such sites are jointly responsible for the initial data processing — and must either obtain informed consent from site visitors prior to data being transferred to Facebook, or be able to demonstrate a legitimate interest legal basis for processing this data.

The ruling is significant because, as currently seems to be the case, Facebook’s Like buttons transfer personal data automatically, when a webpage loads — without the user even needing to interact with the plug-in — which means if websites are relying on visitors’ ‘consenting’ to their data being shared with Facebook they will likely need to change how the plug-in functions to ensure no data is sent to Facebook prior to visitors being asked if they want their browsing to be tracked by the adtech giant.

The background to the case is a complaint against online clothes retailer, Fashion ID, by a German consumer protection association, Verbraucherzentrale NRW — which took legal action in 2015 seeking an injunction against Fashion ID’s use of the plug-in which it claimed breached European data protection law.

Like ’em or loath ’em, Facebook’s ‘Like’ buttons are an impossible-to-miss component of the mainstream web. Though most Internet users are likely unaware that the social plug-ins are used by Facebook to track what other websites they’re visiting for ad targeting purposes.

Last year the company told the UK parliament that between April 9 and April 16 the button had appeared on 8.4M websites, while its Share button social plug-in appeared on 931K sites. (Facebook also admitted to 2.2M instances of another tracking tool it uses to harvest non-Facebook browsing activity — called a Facebook Pixel — being invisibly embedded on third party websites.)

The Fashion ID case predates the introduction of the EU’s updated privacy framework, GDPR, which further toughens the rules around obtaining consent — meaning it must be purpose specific, informed and freely given.

Today’s CJEU decision also follows another ruling a year ago, in a case related to Facebook fan pages, when the court took a broad view of privacy responsibilities around platforms — saying both fan page administrators and host platforms could be data controllers. Though it also said joint controllership does not necessarily imply equal responsibility for each party.

In the latest decision the CJEU has sought to draw some limits on the scope of joint responsibility, finding that a website where the Facebook Like button is embedded cannot be considered a data controller for any subsequent processing, i.e. after the data has been transmitted to Facebook Ireland (the data controller for Facebook’s European users).

The joint responsibility specifically covers the collection and transmission of Facebook Like data to Facebook Ireland.

“It seems, at the outset, impossible that Fashion ID determines the purposes and means of those operations,” the court writes in a press release announcing the decision.

“By contrast, Fashion ID can be considered to be a controller jointly with Facebook Ireland in respect of the operations involving the collection and disclosure by transmission to Facebook Ireland of the data at issue, since it can be concluded (subject to the investigations that it is for the Oberlandesgericht Düsseldorf [German regional court] to carry out) that Fashion ID and Facebook Ireland determine jointly the means and purposes of those operations.”

Responding the judgement in a statement attributed to its associate general counsel, Jack Gilbert, Facebook told us:

Website plugins are common and important features of the modern Internet. We welcome the clarity that today’s decision brings to both websites and providers of plugins and similar tools. We are carefully reviewing the court’s decision and will work closely with our partners to ensure they can continue to benefit from our social plugins and other business tools in full compliance with the law.

The company said it may make changes to the Like button to ensure websites that use it are able to comply with Europe’s GDPR.

Though it’s not clear what specific changes these could be, such as — for example — whether Facebook will change the code of its social plug-ins to ensure no data is transferred at the point a page loads. (We’ve asked Facebook and will update this report with any response.)

Facebook also points out that other tech giants, such as Twitter and LinkedIn, deploy similar social plug-ins — suggesting the CJEU ruling will apply to other social platforms, as well as to thousands of websites across the EU where these sorts of plug-ins crop up.

“Sites with the button should make sure that they are sufficiently transparent to site visitors, and must make sure that they have a lawful basis for the transfer of the user’s personal data (e.g. if just the user’s IP address and other data stored on the user’s device by Facebook cookies) to Facebook,” Neil Brown, a telecoms, tech and internet lawyer at U.K. law firm Decoded Legal, told TechCrunch.

“If their lawful basis is consent, then they’ll need to get consent before deploying the button for it to be valid — otherwise, they’ll have done the transfer before the visitor has consented

“If relying on legitimate interests — which might scrape by — then they’ll need to have done a legitimate interests assessment, and kept it on file (against the (admittedly unlikely) day that a regulator asks to see it), and they’ll need to have a mechanism by which a site visitor can object to the transfer.”

“Basically, if organisations are taking on board the recent guidance from the ICO and CNIL on cookie compliance, wrapping in Facebook ‘Like’ and other similar things in with that work would be sensible,” Brown added.

Also commenting on the judgement, Michael Veale, a UK-based researcher in tech and privacy law/policy, said it raises questions about how Facebook will comply with Europe’s data protection framework for any further processing it carries out of the social plug-in data.

“The whole judgement to me leaves open the question ‘on what grounds can Facebook justify further processing of data from their web tracking code?'” he told us. “If they have to provide transparency for this further processing, which would take them out of joint controllership into sole controllership, to whom and when is it provided?

“If they have to demonstrate they would win a legitimate interests test, how will that be affected by the difficulty in delivering that transparency to data subjects?’

“Can Facebook do a backflip and say that for users of their service, their terms of service on their platform justifies the further use of data for which individuals must have separately been made aware of by the website where it was collected?

“The question then quite clearly boils down to non-users, or to users who are effectively non-users to Facebook through effective use of technologies such as Mozilla’s browser tab isolation.”

How far a tracking pixel could be considered a ‘similar device’ to a cookie is another question to consider, he said.

The tracking of non-Facebook users via social plug-ins certainly continues to be a hot-button legal issue for Facebook in Europe — where the company has twice lost in court to Belgium’s privacy watchdog on this issue. (Facebook has continued to appeal.)

Facebook founder Mark Zuckerberg also faced questions about tracking non-users last year, from MEPs in the European Parliament — who pressed him on whether Facebook uses data on non-users for any other uses vs the security purpose of “keeping bad content out” that he claimed requires Facebook to track everyone on the mainstream Internet.

MEPs also wanted to know how non-users can stop their data being transferred to Facebook? Zuckerberg gave no answer, likely because there’s currently no way for non-users to stop their data being sucked up by Facebook’s servers — short of staying off the mainstream Internet.

The food delivery wars in Europe remain hotter than a vindaloo, and that’s leading to some major consolidation: today Just Eat and Takeaway.com, two of the bigger take-out and delivery businesses in the region, announced that they are in the “advanced stages” of a merger. The deal would help them combine forces and take on more scale to compete better with Uber Eats and Amazon-backed Deliveroo.

Both companies are currently publicly listed, Just Eat in London and Takeaway.com in Amsterdam, each with a market cap of around $5 billion.

The combined entity would have an estimated market value of more than €10 billion, or $10 billion — although the share prices are moving quickly right now — and the companies say it would make world’s largest online food delivery platforms, which processed 360 million orders worth €7.3 billion ($8 bilion) in 2018.

Under merger rules in the UK, there is a time limit on how long the two can sit on this deal. They now have until August 24 to get final approval from investors to get the deal squared away.

The companies say the two boards have already agreed on the specific terms, which are as follows:

— Jitse Groen, currently CEO of Takeaway.com, would become CEO of the merged company. Paul Harrison, currently CFO of Just Eat, would become the CFO. Brent Wissink, currently CFO of Takeaway.com, and Jörg Gerbig, currently COO of Takeaway.com, would become co-COOs of the Combined Group.

— The company combined would be headquartered in Amsterdam, but “with a premium listing on the London Stock Exchange” and a “significant part” of its operations in the United Kingdom, which is Just Eat’s home market.

— Just Eat shareholders would get 0.09744 Takeaway.com shares in exchange for each Just Eat share.

— Just Eat shareholders would own approximately 52.2% of the business; Takeaway.com shareholders would own approximately 47.8% (based on the fully diluted ordinary issued share capital of Takeaway.com but excluding dilution from any conversion of Takeaway.com’s convertible bonds, and the fully diluted share capital of Just Eat, in each case, as at the date of this announcement).

— These terms imply a value for Just Eat of 731 pence per share based on Takeaway.com’s closing share price on 26 July 2019 of €83.55, a premium of 15% to Just Eat’s closing share price on Friday.

— Mike Evans, who is the Chairman of Just Eat, would become the Chairman of the Supervisory Board of the Combined Group. Adriaan Nühn, currently Chairman of the Takeaway.com Supervisory Board, will assume the role of Vice-Chairman of the Supervisory Board of the Combined Group.

Takeaway.com — which went public in 2016 — is no stranger to snapping up once-rivals in a bid to expand its business against increasing competition from Uber Eats and Deliveroo. Last year, it paid $1.1 billion to buy Delivery Hero’s German operations, as the latter (ironically based in Berlin) continued to turn its attention to operations in developing markets.

Economies of scale are a critical part of making the financials of delivery and other transportation and e-commerce services work better. You can develop more efficient routes and plot drivers more closely to pick-ups and drop-offs. In the case of food services, this is especially important considering the freshness of the passenger.

There are other areas where it also makes more sense, such as in terms of the investments that a delivery company will make in building better back-end systems to operate the services: having a wider network of restaurants and drivers tapping into those investments makes the payoff faster.

Indeed, the fact that the CEO of Just Eat would become the CFO underscores some of the clear financial reasons for the deal.

 

Minut, a Swedish startup that has developed a camera-less home security device that it claims protects privacy better than competitors, has raised $8 million in Series A funding.

The round is led by KPN Ventures, with participation from international energy and services company Centrica. Existing backers Karma Ventures, SOSV, and Nordic Makers also followed on, bringing total funding for Minut to $10 million.

Founded in 2014 and headed up by CEO Nils Mattisson, who I’m told spent seven years in the Exploratory Design Group at Apple, Minut wants to make home security monitoring more affordable, but in a way that doesn’t compromise on privacy.

To square that circle, so to speak, the startup’s IoT device is camera-less (in the traditional sense), and instead relies on other sensors including infrared motion detection and a microphone. Crucially, the real-time data captured to determine if anything untoward is taking place in your home is processed on the device itself rather than being shared to the cloud.

“Feeling safe shouldn’t be a luxury, or come at the cost of privacy,” Mattisson says. “Until recently, the most affordable solution for home security and monitoring has been Wi-Fi connected cameras, but people don’t want or trust them in their homes”.

This realisation has seen privacy be the driver of Minut’s design decisions from “day one”, and is why the company was one of the first device makers to do machine learning “at the edge of the network”.

“This approach is technically much more challenging than recording sounds and sending them to a back-end for analysis like an Amazon Alexa or Google Assistant, but it enables us to identify events, such as a window-break or the presence of people, without ever actually recording any sound,” explains Mattisson.

“Features are instead extracted from sensor data in real-time and analysed on the device. When the local neural network recognises that something can be an event, only the extracted fingerprint then gets sent to a global classifier that can do a deeper and more accurate assessment. It’s not possible to reconstruct the sound from the fingerprint”.

The upshot is that Minut can monitor a home while “respecting the integrity of the people who live there”. Mattisson says that developing this architecture was a significant undertaking, and that the company’s unique approach was granted a patent earlier this year”.

To date, Minut has sold more than 10,000 units in 60 countries. It employees around 30 people across its HQ in Malmö, Stockholm and a newly opened office in London. Meanwhile, today’s new capital will be used “accelerate growth across markets and to strengthen the product portfolio”.