Year: 2019

15 Nov 2019

Hulu increases price for live TV by $10, to $55 per month

Hulu just sent an email to subscribers of its Hulu + Live TV plan announcing that the price of the basic live TV plan will increase from $44.99 per month to $54.99 per month.

This is Hulu + Live TV’s second price hike this year, with a $5 increase in January, followed by this twice-as-large increase, which is supposed to take effect on December 18.

In the email, Hulu says this increase “allows us to continue delivering the best live and on-demand TV experience for you.” However, as a the price keeps going up, the price advantage that a “skinny bundle” of TV channels offers over plain old cable starts to shrink.

The streaming service launched its live TV package at the beginning of 2018, and it supposedly past 1 million subscribers before the year was done.

Hulu’s ownership has also been changing, with Disney becoming a majority shareholder following its acquisition of Fox, and then taking full operational control of the company earlier this year. Hulu is part of Disney’s broader streaming strategy, which saw the company launching its own Disney+ service earlier this week and offering Disney+, ESPN+ and Hulu (without live TV) together in a $12.99 bundle.

15 Nov 2019

More layoffs at pivoting London edtech startup pi-top

London edtech startup pi-top has gone through another round of layoffs, TechCrunch has learned.

pi-top confirmed that eight jobs have been cut in the London office, saying the job losses resulted from a “restructuring our business to focus on the U.S. education market”.

In August we broke the news that the STEM hardware focused company had cut 12 staff after losing out on a major contract. pi-top told us then that its headcount had been reduced from 72 to 60.

The latest cuts suggest the workforce has been reduced to around 50 — although we have also heard that company headcount is now considerably lower than that.

One source told us that 12 jobs have gone in the London office this week, as well as additional cuts in the China office where the company’s hardware team is based — but pi-top denied there have been any changes to its China team.

pi-top said in August that the layoffs were related to implementing a new strategy.

Commenting on the latest cuts, it told us: “We have made changes within the company that reflect our business focus on the U.S. education market and our increasingly important SaaS learning platform.”

“The core of our business remains unchanged and we are happy with progress and the fantastic feedback we have received on pitop 4 from our school partners,” pi-top added.

Additionally, we have heard that a further eight roles at the UK office have been informed to staff as at risk of redundancy. Affected jobs at risk include roles in product, marketing, creative services, customer support and finance.

We also understand that a number of employees have left the company of their own accord in recent months, following an earlier round of layoffs.

pi-top did not provide comment on jobs at risk of redundancy but told us that it has hired three new staff “to accelerate the SaaS side of our education offering and will be increasing our numbers in the U.S. to service our growth in the region”.

We understand that the latest round of cuts have been communicated to staff as a cost reduction exercise and also linked to implementing a new strategy. Staff have also been told that the business focus has shifted to the U.S schools market.

As we reported earlier this year, pi-top appointed a new executive chairman of its board who has a strong U.S. focus: Stanley Buchesky served in the Trump administration as an interim CFO for the US department for education under secretary of state, Betsy DeVos. He is also the founder of a U.S. edtech seed fund.

Sources familiar with pi-top say the company is seeking to pivot away from making proprietary edtech hardware to focus on a SaaS learning platform for teaching STEM, called pi-top Further.

At the start of this year it crowdfunded a fourth gen STEM device, the pi-top 4, with an estimated shipping date of this month. The crowdfunder attracted 521 backers, pledging close to $200k to fund the project.

In the pi-top 4 Kickstarter pitch the device is slated as being supported by a software platform called Further — which is described as a “free social making platform” that “teaches you how to use all the pi-top components through completing challenges and contributing projects to the community”, as well as offering social sharing features.

The plan now is for pi-top to monetize that software platform by charging subscription fees for elements of the service — with the ultimate goal of SaaS revenues making up the bulk of its business as hardware sales are de-emphasized. (Hardware is hard; and pi-top’s current STEM learning flagship has faced some challenges with reliability, as we reported in August.)

We understand that the strategic change to Further — from free to a subscription service — was communicated to staff internally in September.

Asked about progress on the pi-top 4, the company told us the device began shipping to backers this week. 

“We are pleased to announce the release of pi-top 4 and pi-top Further, our new learning and robotics coding platform,” it said. “This new product suite provides educators the ability to teach coding, robotics and AI with step-by-step curriculum and an integrated coding window that powers the projects students build. With pi-top, teachers can effectively use Project Based Learning and students can learn by doing and apply what they learn to the real world.”

Last month pi-top announced it had taken in $4M in additional investment to fund the planned pivot to SaaS — and “bridge towards profitability”, as it put it today.

“The changes you see are a fast growing start-up shifting from revenue focus to a right-sized profit generating company,” it also told us.

15 Nov 2019

Know your startup’s value so you can communicate it to investors

I’ve always told companies that investors have a much easier job than they do. To be good at their jobs, investors have to know how to do math and make decisions. As a business owner, you have to do both while also running your business.

The math piece can seem cumbersome, but it’s vital for understanding whether your company is creating or destroying value. A few simple metrics can demonstrate to investors the health and viability of your company, and they can show you which levers to pull that will best optimize your company for investor interest (and secure a higher price). But before you can ever hope to communicate your business’ value to an investor, you must understand it yourself.

The numbers are simple; it’s the calculations that are complex

Investment math itself is not complicated. In essence, it’s just about understanding whether your company is creating or destroying value by asking:

  • Where is your company investing its financial resourcesMost growing companies invest heavily in sales and marketing or research and development.
  • What is the return on this investment?  For example, how much gross profit (revenue x gross margin percentage) does a given sales and marketing investment produce?
  • How does that number compare to your cost of capital? If it’s higher, your company is creating value. If it’s lower, you’re destroying it.

Investors use this information to determine if their return would be higher than their expectation (e.g., 15% hurdle rate), should you continue down your current path of creating or destroying value. Then, they make their decision based on that calculation.

A caveat I’ll add here is that it’s not necessarily a deal-breaker if your company is declining in value. Oil rigs, after all, are considered investment assets, even though they are perpetually declining and will eventually run out (i.e., destroy all of their value). Although this article focuses on calculations that demonstrate value creation, all investment assets can be financed at the right price.

A deep dive into calculating value

One of the best metrics you can use to demonstrate value creation is your cohort-level return on investment. It’s a calculation most investors are familiar with, but it may not be as straightforward to companies who don’t see it as often. Again, while the metrics and concepts of investment math are simple, it’s the process of getting there that requires complex analysis.

Whether you are evaluating these metrics yourself or bringing in outside counsel to assist you, use the process below to show investors you are creating value.

Determine which information to analyze

The first step in calculating value is to understand which information from your income and cash flow statements to analyze as “investments.”

Start by dividing your capital allocation into three main buckets: short-term investments, long-term investments and expenses. In general, short-term investments will be the ones you want to focus on, but it’s helpful to walk through each.

  • Short-term investments (pay back within 24 months)
15 Nov 2019

Virgin Galactic begins ‘Astronaut Readiness Program’ for first paying customers

Virgin Galactic has begun its ‘Astronaut Readiness Program’ this week, which is being run out of Under Armour Global HQ to start. Under Armour is Virgin Galactic’s partner on its official astronaut uniforms, which its first paying space tourists will don on the company’s initial trips beyond Earth.

The Astronaut Readiness Program is a preparatory course that all of Virgin Galactic’s passengers undertake before they can get their trip aboard the company’s VSS Unity sub-orbital spaceplane. It involves guidance and instruction provided by Virgin Galactic team members, including its Chief Astronaut Instructor Beth Moses and Chief Pilot Dave Mackay. Both Mackay and Moses were on Virgin’s February demonstration flight to space, and so can provide not only guidance based on their considerable expertise, but also share insights from actually having flown aboard the same vessel that will take the company’s paying passengers up.

Under Armour is also involved in the program, in more ways than just providing and reading the outfits that passengers will wear. They’re providing guidance on how Astronauts will get around aboard the spacecraft, as well as on nutrition and fitness programs to ready the space tourists for their adventure. A Virging Galactic in-house medical team is also on-hand to consult with each passenger. Virgin’s customers don’t need to match the strenuous physical fitness requirements of NASA astronauts, but the company says it’s still focused on ensuring its customers are healthy and hale on their trips.

Being an early customer for Virgin Galactic means not only training through programs like the one run this week in Baltimore, but also helping the new company develop and refine its process for future use.

“We will now be using the feedback from this week in Baltimore to build on that model,” Virgin Galactic said in a press release. “We discussed with our Future Astronauts how the training and the community can be best shaped for those waiting to fly and for those who have flown.”

To date, Virgin Galactic has 600 customers signed up to fly aboard its SpaceShipTwo spacecraft, which launches from a customized cargo jet aircraft to reach sub-orbital space and provides customs with a 90-minute flight, for a $250,000 ticket. It’s looking to launch its first flights for paying customers in the first half of next year.

15 Nov 2019

LA warns of ‘juice-jacking’ malware, but admits it has no cases

Los Angeles’ district attorney is warning travelers to avoid public USB charging points because “they may contain dangerous malware.”

Reading the advisory, you might be forgiven for thinking that every USB outlet you see is just waiting for you to plug in your phone so it can steal your data. This so-called “juice-jacking” attack involves criminals loading malware “on charging stations or cables they leave plugged in at the stations so they may infect the phones and other electronic devices of unsuspecting users,” it reads. “The malware may lock the device or export data and passwords directly to the scammer.”

But the county’s chief prosecutor’s office told TechCrunch said that it has “no cases” of juice-jacking on its books, though it said there are known cases on the east coast.When asked where those cases were, the spokesperson did not know. And when asked what prompted the alert to begin with, the spokesperson said it was part of “an ongoing fraud education campaign.”

Which begs the question — why?

Security researcher Kevin Beaumont tweeted that he hasn’t seen “any evidence of malware being used in the wild on these things.” In fact, ask around and you’ll find very little out there. Several security researchers have dropped me messages saying they’ve seen proof-of-concepts, but nothing actively malicious.

Juice-jacking is a real threat, but it’s an incredibly complicated and imperfect way to attack someone when there are far easier ways.

The idea, though — that you can plug in your phone and have your secrets stolen — is not entirely farfetched. Over the years there have been numerous efforts to demonstrate that it’s possible. As ZDNet points out in its coverage of the juice-jacking warning, the FBI sent out a nationwide alert about the threat after security researcher Samy Kamkar developed an Ardunio-based implant designed to look like a USB charger to wirelessly sniff the air for leaky key strokes. And just earlier this year, a security researcher developed an iPhone charger cable clone that let a nearby hacker run commands on the vulnerable computer.

LA recommend using an AC power outlet and not a charging station, and to take your cables with you. That’s sound advice, but it’s just one of many things you need to do to keep your devices and data safe.

15 Nov 2019

LA warns of ‘juice-jacking’ malware, but admits it has no cases

Los Angeles’ district attorney is warning travelers to avoid public USB charging points because “they may contain dangerous malware.”

Reading the advisory, you might be forgiven for thinking that every USB outlet you see is just waiting for you to plug in your phone so it can steal your data. This so-called “juice-jacking” attack involves criminals loading malware “on charging stations or cables they leave plugged in at the stations so they may infect the phones and other electronic devices of unsuspecting users,” it reads. “The malware may lock the device or export data and passwords directly to the scammer.”

But the county’s chief prosecutor’s office told TechCrunch said that it has “no cases” of juice-jacking on its books, though it said there are known cases on the east coast.When asked where those cases were, the spokesperson did not know. And when asked what prompted the alert to begin with, the spokesperson said it was part of “an ongoing fraud education campaign.”

Which begs the question — why?

Security researcher Kevin Beaumont tweeted that he hasn’t seen “any evidence of malware being used in the wild on these things.” In fact, ask around and you’ll find very little out there. Several security researchers have dropped me messages saying they’ve seen proof-of-concepts, but nothing actively malicious.

Juice-jacking is a real threat, but it’s an incredibly complicated and imperfect way to attack someone when there are far easier ways.

The idea, though — that you can plug in your phone and have your secrets stolen — is not entirely farfetched. Over the years there have been numerous efforts to demonstrate that it’s possible. As ZDNet points out in its coverage of the juice-jacking warning, the FBI sent out a nationwide alert about the threat after security researcher Samy Kamkar developed an Ardunio-based implant designed to look like a USB charger to wirelessly sniff the air for leaky key strokes. And just earlier this year, a security researcher developed an iPhone charger cable clone that let a nearby hacker run commands on the vulnerable computer.

LA recommend using an AC power outlet and not a charging station, and to take your cables with you. That’s sound advice, but it’s just one of many things you need to do to keep your devices and data safe.

15 Nov 2019

Takeaways from Nvidia’s latest quarterly earnings

Nvidia has been on a wild growth ride the past five years. Surfing a wave around AI deep learning and cryptocurrency where its specialized chip architecture is among the highest performing, the company’s share price rose from the low $20s in late 2014 to eventually soar to almost $300 in September 2018. And then crypto winter set in, and within weeks the company’s market cap was sliced nearly in half as crypto miners canceled their orders and inventories at Nvidia started building up a glut of chips.

Since that nadir in late 2018, the company has mostly been on the upswing as it has pushed expansion into a variety of other verticals like automotive, most notably by announcing the purchase of Israeli chip maker Mellanox for $6.9 billion in an all cash deal.

So with its latest earnings announcement coming after the bell yesterday, the big questions were how it was continuing to navigate chip inventories, and whether its transaction with Mellanox would close. The company ultimately presented a bit of a mixed bag, and Wall Street seems to have barely budged on the stock price as we all wait resolution on some of the key questions facing the company.

Before we dive into the analysis, first the high level numbers for Q3, which ended on October 27: top-line revenues declined slightly to just above $3 billion, from roughly $3.2 billion in the year ago quarter. Gross profits were flat from a year ago, but net income was down 27% to $899 million, mostly due to higher R&D costs and lower income from operations. Earnings per share was $1.47, down from $2.02 a year ago.

Now though, there were some more interesting takeaways from the results beyond the sort of lukewarm numbers emanating off the income statements.

China trade war still affecting Nvidia through Mellanox

15 Nov 2019

Web Summit cancels next year’s Rise conference over tension in Hong Kong

The ongoing tension in Hong Kong between the government and pro-democracy protesters continues to spill into tech domain.

Rise, the largest tech conference in Asia, has cancelled its next year’s event because of the “Hong Kong situation,” its organizer Web Summit said.

The organizer said it is postponing the sixth edition of its annual conference, which is held in Hong Kong, to March 2021 from March 2020. Web Summit, which hosts similar large scale conference in other parts of the world, made the announcement today in an email to previous attendees. A spokesperson confirmed the veracity of the email to TechCrunch.

“Over recent months, we have been monitoring the ongoing situation in Hong Kong. Our number one concern is the wellbeing, safety, and security of attendees at our events,” it said in a statement.

“Given the uncertainty of the situation by early 2020 and after consulting with experts and advisories, we have decided to postpone RISE until 2021.”

In recent years, Rise has emerged as the largest tech conference in Asia. Some of its recent speakers have included top executives of Uber, Byju’s, Grab, Gojek, Razor, Stripe, as well as many key partners from top VC funds and officials from several governments.

This year, the conference attracted over 16,000 attendees ranging from the “world’s leading founders, Fortune 500 CEOs, investors, media, and the most promising startups from over 100 countries,” according to official figures provided by Rise.

Web Summit’s announcement today comes hours after Clockenflap, the biggest music festival in Hong Kong, was cancelled citing the same reason. American singer-songwriter Halsey, rapper Lil Pump, British band Mumford & Sons and Japanese headbangers Babymetal were set to play at the festival. Several more events have postponed or cancelled in recent weeks.

15 Nov 2019

WeWork gives 0 forks, and Docker containerizes its future into a casket

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week Kate was in China, so TechCrunch’s Danny Crichton and Alex took the helm while she was out grilling Lime. So, with our producer (the excellent Mr. Gates) in San Francisco and Danny in New York and Alex in the provinces, we got into the following to start:

  • Jetpack Aviation and it’s seed round to build a flying motorcycle, because of course why not
  • An endurance racing startup raising money from Usain Bolt
  • Norwest’s mega new $2B fund
  • EQT’s mega new $750 million rumored European growth fund
  • And a new round for Peanut, the social network for mothers

Pivoting into the biggest news from the week, 1Password raised a comically-large $200 million Series A round of funding. The firm quite obviously hadn’t raised much capital before but had grown to be quite large. Hence the large check. Recall that Series A really means a company’s first institutional round, not a specific dollar range.

Next we discussed DoorDash and its possible $100 million add-on to its $600 million round from earlier this year. The new capital should keep the on-demand technology company’s valuation pegged just above where it was set during its preceding round. So, a down round this is not.

Meanwhile, Docker received a $35M investment from Benchmark and sold much of its business to Marantis, which has all the appearances of a recap for the formerly high-flying unicorn.

What else? JUUL is laying off staff, WeWork is still losing an ocean of dollars, and Line is partnering up with Yahoo Japan.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

15 Nov 2019

Despite bans, Giphy still hosts self-harm, hate speech, and child sex abuse content

Image search engine Giphy bills itself as providing “fun and safe way” to search and create animated GIFs. But despite its ban on illicit content, the site is littered with self-harm and child sex abuse imagery, TechCrunch has learned.

A new report from Israeli online child protection startup L1ght — previously AntiToxin Technologies — has uncovered a host of toxic content hiding within the popular GIF-sharing community, including illegal child abuse content, depictions of rape, and other toxic imagery associated with topics like white supremacy and hate speech. The report, shared exclusively with TechCrunch, also showed content encouraging viewers into unhealthy weight loss and glamorizing eating disorders.

TechCrunch verified some of the company’s findings by searching the site using certain keywords. (We did not search for terms that may have returned child sex abuse content as doing so would be illegal.) Although Giphy blocks many hashtags and search terms from returning results, search engines like Google and Bing still cache images with certain keywords.

When we tested using several words associated with illicit content, Giphy sometimes showed content from its own results. When it didn’t return any banned materials, search engines often returned a stream of would-be banned results.

L1ght develops advanced solutions to combat online toxicity. Through its tests, one search of illicit material returned 195 pictures on the first search page alone. L1ght’s team then followed tags from one item to the next, uncovering networks of illegal or toxic content along the way. The tags themselves were often innocuous in order help users escape detection, but they served as a gateway to the toxic material.

Despite a ban on self-harm content, researchers found numerous keywords and search terms to find the banned content. We have blurred this graphic image. (Image: TechCrunch)

Many of the more extreme content — including images of child sex abuse — are said to have been tagged using keywords associated with known child exploitation sites.

We are not publishing the hashtags, search terms, or sites used to access the content, but we passed on the information to the National Center for Missing and Exploited Children, a national non-profit established by Congress to fight child exploitation.

Simon Gibson, Giphy’s head of audience, told TechCrunch that content safety was of the “utmost importance” to the company and that it employs “extensive moderation protocols.” He said that when illegal content is identified, the company works with the authorities to report and remove it.

He also expressed frustration that L1ght had not contacted Giphy with the allegations first. L1ght said that Giphy is already aware of its content moderation problems.

Gibson said Giphy’s moderation system “leverages a combination of imaging technologies and human validation,” which involves users having to “apply for verification in order for their content to appear in our searchable index.” Content is “then reviewed by a crowdsourced group of human moderators,” he said. “If a consensus for rating among moderators is not met, or if there is low confidence in the moderator’s decision, the content is escalated to Giphy’s internal trust and safety team for additional review,” he said.

“Giphy also conducts proactive keyword searches, within and outside of our search index, in order to find and remove content that is against our policies,” said Gibson.

L1ght researchers used their proprietary artificial intelligence engine to uncover illegal and other offensive content. Using that platform, the researchers can find other related content, allowing them to find vast caches of illegal or banned content that would otherwise and for the most part go unseen.

This sort of toxic content plagues online platforms but algorithms only play a part. More tech companies are finding human moderation is critical to keeping their sites clean. But much of the focus to date has been on the larger players in the space, like Facebook, Instagram, YouTube, and Twitter.

Facebook, for example, has been routinely criticized for outsourcing moderation to teams of lowly paid contractors who often struggle to cope with the sorts of things they have to watch, even experiencing post-traumatic-like symptoms as a result of their work. Meanwhile, Google’s YouTube this year was found to have become a haven for online sex abuse rings, where criminals had used the comments section to guide one another to other videos to watch while making predatory remarks.

Giphy and other smaller platforms have largely stayed out of the limelight, during the past several years. But L1ght’s new findings indicate that no platform is immune to these sorts of problems.

L1ght says the Giphy users sharing this sort of content would make their accounts private so they wouldn’t be easily searchable by outsiders or the company itself. But even in the case of private accounts, the abusive content was being indexed by some search engines, like Google, Bing and Yandex, which made it easy to find. The firm also discovered that pedophiles were using Giphy as the means of spreading their materials online, including communicating with each other and exchanging materials. And they weren’t just using Giphy’s tagging system to communicate — they were also using more advanced techniques like tags placed on images through text overlays.

This same process was utilized in other communities, including those associated with white supremacy, bullying, child abuse and more.

This isn’t the first time Giphy has faced criticism for content on its site. Last year a report by The Verge described the company’s struggles to fend off illegal and banned content. Last year the company was booted from Instagram for letting through racist content.

Giphy is far from alone, but it is the latest example of companies not getting it right. Earlier this year and following a tip, TechCrunch commissioned then-AntiToxin to investigate the child sex abuse imagery problem on Microsoft’s search engine Bing. Under close supervision by the Israeli authorities, the company found dozens of illegal images in the results from searching certain keywords. When The New York Times followed up on TechCrunch’s report last week, its reporters found Bing had done little in the months that had passed to prevent child sex abuse content appearing in its search results.

It was a damning rebuke on the company’s efforts to combat child abuse in its search results, despite pioneering its PhotoDNA photo detection tool, which the software giant built a decade ago to identify illegal images based off a huge database of hashes of known child abuse content.

Giphy’s Gibson said the company was “recently approved” to use Microsoft’s PhotoDNA but did not say if it was currently in use.

Where some of the richest, largest and most-resourced tech companies are failing to preemptively limit their platforms’ exposure to illegal content, startups are filling in the content moderation gaps.

L1ght, which has a commercial interest in this space, was founded a year ago to help combat online predators, bullying, hate speech, scams, and more.

The company was started by former Amobee chief executive Zohar Levkovitz and cybersecurity expert Ron Porat, previously the founder of ad-blocker Shine, after Porat’s own son experienced online abuse in online game Minecraft. The company realized the problem with these platforms was something that had outgrown users’ own ability to protect themselves, and that technology needed to come to their aid.

L1ght’s business involves deploying its technology in similar ways as it has done here with Giphy— in order to identify, analyze, and predict online toxicity with near real-time accuracy.