Month: September 2020

Pan-African fintech company Interswitch plans to fire up its corporate venture arm again—according to CEO Mitchell Elegbe—who spoke at TechCrunch Disrupt on Wednesday.

The Nigerian founder didn’t offer much new on the Lagos-based firm’s expected IPO, but he did reveal Interswitch will revive investments in African startups.

Founded by Elegbe in 2002, Interswitch pioneered the infrastructure to digitize Nigeria’s then predominantly cash-based economy. The company now provides much of the rails for Nigeria’s online banking system that serves Africa’s largest economy and population of 200 million people. Interswitch has expanded to offer personal and business payment products in 23 Africa countries.

The fintech firm achieved unicorn status in 2019 after a $200 million equity investment by Visa gave it a $1 billion valuation.

Reviving venture investing

Interswitch, which is well beyond startup phase, launched a $10 million venture arm in 2015 that has been dormant since 2016, after it acquired Vanso—a Nigerian fintech security company.

But Interswitch will soon be back in the business of making startup bets and acquisitions, according to Elegbe. “We’ve just certified a team and the plan is to begin to make those kinds of investments again.”

He offered a glimpse into the new fund’s focus. “This time around we want to make financial investments and also leverage the network that Interswitch has and put that at the disposal of these companies,” Elegbe told TechCrunch.

“We’ll be very selective in the companies we invest in. They should be companies that Interswitch clearly as an entity can add value to. They should be companies that help accelerate growth by the virtue of what we do and the customers that we have,” he said.

Recent venture events in African tech have likely pressed Interswitch to get back in the investing arena. As an ecosystem, VC on the continent has increased (roughly) by a factor of four over last five years, to around $2 billion in 2019. But most of that has come from single-entity investment funds, while corporate venture funding (and tech M&A activity) has remained light. That’s shifted over the last several months and the entire uptick has occurred in African fintech around entities that could be viewed as Interswitch competitors.

In July, Dubai’s Network International acquired Kenya -based payment mobile payment processing company DPO for $288 million. Shortly after the acquisition, DPO’s CEO Eran Feinstein said the company would pursue more African acquisitions on its own. In June, another mobile-money payment processor, MFS Africa, acquired digital finance company Beyonic. And in August, South Africa’s Standard Bank—Africa’s largest by assets and lending—acquired a stake in fintech security firm TradeSafe.

Since the rise of Safaricom’s dominant M-Pesa mobile money product in Kenya, fintech in Africa has become infinitely larger and more competitive. The sector has hundreds of startups and now receives nearly 50% of all VC investment on the continent.

The opportunity investors and founders are chasing is bringing Africa’s large unbanked population and underbanked consumers and SMEs online. Roughly 66% of Sub-Saharan Africa’s 1 billion people don’t have a bank account, according to World Bank data, and mobile-based finance platforms have presented the best use-cases to shift that across the region.

Interswitch has established itself as a leader in the Africa’s digital finance race. But it’s hard to envision how it can maintain or extend that role without an active venture arm that invests in and acquires innovative, young fintech startups.

No news on IPO

Elegbe had less to offer on Interswitch’s long-anticipated IPO. Asked if the company still planned to list publicly, he offered up a non-answer answer. “At this point in time we’re focused on growing the business and creating value for our customers and that is the our primary focus.”

When pressed “yes or no” on whether an IPO was still a possibility Elegbe confirmed it was. “We have private equity investors and at some point in the life of the business they want exits.” he said. “When it is time for them to exit there are various options on the table and an IPO is an option.”

There’s been talk of an Interswitch IPO for years. In 2016, Elegbe told TechCrunch a dual-listing on the Lagos and London Stock Exchanges was possible. Then word came through other Interswitch channels that it was delayed due to recession and currency volatility in Nigeria in 2017. In November 2019, a source with knowledge of the situation told TechCrunch on background, “an IPO is still very much in the cards; likely sometime in the first half of 2020.” Then came the Covid-19 crisis and the accompanying global economic slump, which may have delayed Interswitch’s IPO plans yet again.

If and when the company goes public, it would be a major event for Nigerian and African fintech. No VC backed fintech firm on the continent has listed globally. Exits for Interswitch’s investors would likely attract to Nigeria and broader Africa more VC from major funds—many of whom remain on the fence about startup opportunities on the continent.

Focus on Africa

On global product expansion, Interswitch plans to maintain an African focus for now, Elegbe explained. “There are enough opportunities for Interswitch on the continent. We’d like to be in as many African countries as possible…and position Interswitch as the (financial) gateway to the continent,” he said.

Elegbe explained the company would continue to work through alliances with major financial services firms to open up global financial access for its African client base. In August 2019, Interswitch launched a partnership that allows its Verve cardholders to make payments on Discover’s global network.

CEO Mitchell Elegbe concluded his Disrupt session with some perspective on balancing the stigmas and possibilities of doing business in Nigeria. Over recent years the country has shifted to become an unofficial hub for big tech expansion, VC investment, and startup formation in Africa. But Nigeria continues to have a difficult operating environment with regard to infrastructure and is often associated with political corruption and instability in its Northeast region due to the Boko Haram insurgency.

“Nigeria has a very large population and a very large market. We have lots of challenges that need to be solved, but it makes sense to me that lots of money is finding its way to Nigeria because the opportunity is there,” he said.

Elegbe’s advice to tech investors considering the country, “Don’t take a short-termist view. There are good people on the ground doing fantastic work—honest people who want to make impact. You need to  seek those people out.”

Infarm, the vertical farming company that has built a network of urban farms to grow fresh food closer to consumers, has raised $170 million in new investment in a “first close” of a Series C.

Leading the round — which is expected to reach $200 million and is a mixture of equity and debt — is LGT Lightstone, with participation from Hanaco, Bonnier, Haniel, and Latitude. Existing Infarm investors Atomico, TriplePoint Capital, Mons Capital and Astanor Ventures also followed on. It brings the company’s total funding to date to more than $300 million.

That’s likely testament to the speed of new retail partnerships over the last twelve months. They include Albert Heijn (Netherlands), Aldi Süd (Germany), COOP/Irma (Denmark), Empire Company’s Sobeys, Safeway, and Thrifty Foods (Canada), Kinokuniya (Japan), Kroger (U.S.), and Marks & Spencer and Selfridges (U.K.).

With operations across 10 countries and 30 cities worldwide, Infarm says it now harvests over 500,000 plants monthly, and in a much more sustainable way than traditional farming and supply chains. Its modular, IoT-powered vertical farming units claim to use 99.5% less space than soil-based agriculture, 95% less water, 90% less transport and zero chemical pesticides. In addition, 90% of electricity used throughout the Infarm network is from renewable energy and the company has set a target to reach zero emission food production next year.

Founded in 2013 by Osnat Michaeli, and brothers Erez and Guy Galonska, Infarm’s “indoor vertical farming” system is capable of growing herbs, lettuce and other vegetables. It then places these modular farms in a variety of customer-facing city locations, such as grocery stores, restaurants, shopping malls, and schools, thus enabling the end-customer to actually pick the produce themselves. To further scale, it also installs Infarms in local distribution centres.

The distributed system is designed to be infinitely scalable — you simply add more modules, space permitting — whilst the whole thing is cloud-based, meaning the farms can be monitored and controlled from Infarm’s central control centre. It’s also incredibly data-driven, a combination of IoT, Big Data and cloud analytics akin to “Farming-as-a-Service”.

The idea, the founding team told me back in 2017 when I profiled the nascent company, isn’t just to produce fresher and better tasting produce and re-introduce forgotten or rare varieties, but to disrupt the supply chain as a whole, which remains inefficient and produces a lot of waste.

“Behind our farms is a robust hardware and software platform for precision farming,” explained Michaeli at the time. “Each farming unit is its own individual ecosystem, creating the exact environment our plants need to flourish. We are able to develop growing recipes that tailor the light spectrums, temperature, pH, and nutrients to ensure the maximum natural expression of each plant in terms of flavor, colour, and nutritional quality”.

On that note, I caught up with two of Infarm’s founders to get a brief update on the Berlin-headquartered company and to dive a little deeper into how it will continue to scale.

TechCrunch: What assumptions did you make early on that have turned out to be true or, more interestingly, not panned out as expected?

Osnat Michaeli: When we first chatted about four years ago…, we were 40 people in Berlin and much of the conversation centered around the potential that our approach to urban vertical farming might have for retailers. While for many it was intriguing as a concept, we couldn’t have imagined that a few years later we would have expanded to almost 10 countries (Japan is on its way) and 30 cities, with partnerships with some of the largest retailers in the world. Our assumptions at the time were that retailers and their customers would be attracted to the taste and freshness of produce that grew right in front of them in the produce section, in our farms.

What we didn’t anticipate was how much and how quickly the demand for a sustainable, transparent and modular approach to farming would grow as we, as society, begin to feel the impact of climate change and supply chain fragility upon our lives, our choices and our food. Of course we also did not anticipate a global pandemic, which has underscored the urgency of building a new food system that can democratize access to high quality, amazing tasting food, while helping our planet regenerate and heal. The past few months have confirmed the flexibility and resilience of our farming model, and that our mission is more relevant than ever.

In terms of signing on new retailers, based on your progress in the last 12 months, I’m guessing this has got easier, though undoubtedly there are still quite long lead times. How have these conversations changed since you started?

Erez Galonska: While lead times and speed of conversations can vary depending upon the region and retailer. In mature markets where the concept is familiar and we’re already engaged, deal conversations can reach maturity in as little time as 3 months. Since we last spoke we are already working with most of the leading retailers that are well established in Europe, U.K. and North America. Brands which in each of their markets are both forerunners in a retail industry rapidly evolving to meet the demand for consumer-focused innovation, while proving that access to sustainable, high quality, fresh and living produce is not only possible, but can be available in produce aisles today, and every day of the year, with Infarm.

I’m interested to understand where Infarms are installed, in terms of if the majority is in-store and consumer-facing or if the most scalable and bulk of Infarm’s use-cases are really much larger distribution hubs in cities or close to cities i.e. not too far away from places with population/store density but not actually in stores. Perhaps you can enlighten me on what the ratio looks like today and how you see it developing as vertical farming grows?

Erez Galonska: Today across our markets, the split between our farms in stores and in distribution centers is roughly 50:50. However as you anticipate, we will be expanding our network this year with many more distribution hubs. This expansion will likely lead to an 80:20 split as early as next year, with the majority of our regions being served with fresh, living produce delivered throughout the week from centrally-located hubs. This not only offers retailers and restaurants flexibility in terms of volumes of output, and the ability to adapt the presentation of our offerings to floor areas of different sizes, but it also allows us to begin to serve whole regions from our next generation farms under development today.

Based in our hubs, these farms will deliver the crop-equivalent of an acre or more of fresh produce on a 25 m2 footprint, with significant further savings in energy, water, labor and land-use. We believe this technology will truly challenge ideas of what is possible in sustainable, vertical farming and we look forward to talking about it more soon.

Lastly, what are the main product lines in terms of food on the shelves?

Osnat Michaeli: We have a catalog of more than 65 herbs, microgreens, and leafy greens, that is constantly growing. Our offerings range from the known and common varieties like Coriander, Basil, or Mint, to specialty products like Peruvian Mint, Red Veined Sorrel or Wasabi Rucola.

Because our farms give us excellent control over every part of a plant’s growth process, and can imitate the complexity of different ecosystems, we will be able to expand the diversity of Infarm produce available to consumers to include root vegetables, mushrooms, flowering crops and even superfoods from around the world in the near future. What you see today with Infarm is still only the beginning.

There have been a couple of articles published in the last two days reporting on an impromptu sweep that took place outside of a venue we are using for our TechCrunch Disrupt event in San Francisco this week. We wanted to detail what we know about what happened and the steps that are being taken to make this right.

This week we are hosting a virtual version of our TechCrunch Disrupt conference from a studio in San Francisco. In order to stage the show we rented a venue from a company named Non Plus Ultra. 

Yesterday we were informed by Non Plus Ultra that a reporter had reached out to ask about a sweep that had taken place in the early hours of last Thursday morning before our team arrived. This was the first time we had heard about Non Plus Ultra having coordinated an unsanctioned sweep outside of their building. 

This was not an action that we asked Non Plus Ultra to perform and is not something that we would ever ask them to do. Upon further investigation, we discovered that belongings and personal effects had been removed or discarded by a private company hired by Non Plus Ultra.

This is absolutely unacceptable, and we’re working to take immediate action. First, we will no longer be working with Non Plus Ultra at any of their venues in San Francisco for any TechCrunch event in the future. 

In addition, Non Plus Ultra has committed to working with local partners Community Housing Partnership, and DISH to support the homeless community on 12th Street. They are also committing to set up a system to replace or, where possible, return property to the people who were unfairly targeted by this sweep. TechCrunch will ensure that Non Plus Ultra follows through on these commitments. 

The city of San Francisco continues to struggle with a housing crisis and a large houseless population. Our neighbors who are living on the streets are suffering even more as they endure a pandemic and hazardous air quality from the California wildfires.

Everyone deserves to be treated with compassion and humanity, regardless of how or where they live. TechCrunch focuses on technology and the economy that drives it; much of that economy is centered in and around the Bay Area. 

Many of us live in San Francisco and in the surrounding areas and we feel it is our basic duty as humans to see that our events benefit the community and do no harm to our neighbors. 

To those affected by this situation we are deeply sorry. We will make every effort to see that this is made right.

Thank you.

 

In a Wednesday filing in federal court, the United States government said that users who use or download WeChat “to convey personal or business information” will not be subject to penalties under President Donald Trump’s executive order banning transactions with the Tencent-owned messaging app.

Trump issued the executive order against WeChat on August 6, the same day he issued a similar one banning transactions with ByteDance, the parent company of TikTok, claiming national security concerns. Both orders caused confusion because they are set to go into effect 45 days after being issued, but said that Secretary of Commerce Wilbur Ross will not identify what transactions are covered until then.

With that deadline now looming at the end of this week, WeChat users in America are still uncertain about the app’s future. Though WeChat is the top messaging app by far in China, where it also serves as an essential conduit for payments and other services, the U.S. version of the app has relatively limited features. It is used by Chinese-Americans, and other members of the Chinese disapora in the U.S., to keep in touch with their family and other people in China. With other popular messaging apps, like Facebook Messenger and WhatsApp, banned in China, WeChat is often the most direct communication channel available to them.

The U.S. government’s filing (embedded below) was made as part of a request for a preliminary injunction against the executive order brought by the U.S. WeChat Users Alliance, a non-profit organization initiated by attorneys who want to preserve access to WeChat for users in the U.S. A hearing is scheduled for Thursday.

In it, attorneys from the Justice Department said the U.S. Commerce Department is continuing to review transactions and will clarify which ones are affected by Sept. 20, but “we can provide assurances that [Secretary Ross] does not intend to take actions that would target persons or groups whose only connection to WeChat is their use or downloading of the app to convey personal or business information between users, or otherwise define the relevant transaction in such a way that would impose criminal or civil liability on such users.”

But in a response (also embedded below), the U.S. WeChat Users Alliance said that the Department of Justice’s filing instead demonstrates why a preliminary injunction is necessary. “Having first failed to articulate any actual national security concerns, the administration’s latest ‘assurances’ that users can keep using WeChat, and exchange their personal and business information, only further illustrates the hollowness and pre-textual nature of the Defendants’ ‘national security rationales.'”

The U.S. WeChat Users Alliance filed for the injunction on August 21. In an open letter published on its site, it said a complete ban of WeChat “will severely affect the lives and the work of millions of people in the U.S. They will have a difficult time talking to family relatives and friends back in China. Countless people or businesses who use WeChat to develop and contact customers will also suffer significant economic losses.”

The group also believes that the executive order “violates many provisions of the U.S. Constitution,” and the Administrative Procedure Act.

Building and growing a startup is hard, but pivoting said startup into something new and then achieving that same growth is even harder. But it’s not impossible.

Phaedra Ellis-Lamkins, founder and CEO of PromisePay, and Jessica Matthews, founder and CEO of Uncharted Power, both have experiences doing this. At TechCrunch Disrupt, they shed some light on their respective, yet somewhat similar, paths.

PromisePay, formerly known as Promise, got its start as a bail reform startup that aimed to reduce the number of people held behind bars simply because they can’t pay bail. Now, it’s focused on helping people make payments for parking and traffic tickets, court fees and child support.

“We actually had this huge existential crisis,” Ellis-Lamkins said. “We at Promise are focused on ending mass incarceration and on decreasing the number of people in jails. So we started to be very successful and we sold very well. And what we realized fundamentally is when we created efficiency, it made the systems more efficient at incarcerating people. It didn’t make them more efficient at what our wrong assumption had been, which is if the system is more efficient, it would decrease the number of people in the system. And so we made a decision that growth was not consistent with who we were as a company. So I went back to our investors, which is hard when you’re making money and said, this is not the path because I don’t think this is a long-term path.”

She told investors there are already people who sell their tech to law enforcement, but what Promise wants to do is liberate people. It became clear to her that she was selling to the wrong people when she was talking to a client who said the difference between them and her was that she cares about people in the criminal justice system and they don’t. Ellis-Lamkins told investors she was going to stop selling to prisons and jails, and offered to give investors their money back.

Instead, she started looking at why people are ending up incarcerated.

“And luckily, that spurred growth, but I’m just not going to be a company that grows on the backs of poor people and Black and brown people, because there is a better way,” she said. “But it was frightening in the moment to abandon a market in which we’re making money.”

Thankfully, she said, not one of her investors had a problem with her decision.

Matthews said she had a relatively similar experience with her company, Uncharted Power, which got its start as Uncharted Play. Her company’s first product was an energy-harnessing soccer ball that could power a lamp after just a few hours of playing with it. She later integrated that tech intro strollers to power cell phones.

But after raising her Series A round for Uncharted Play, Matthews realized that her company needed to go all-in on infrastructure. She thought about the ultimate goal of her company, which is to get people the infrastructure they need in their lives. She just didn’t see a way of doing that with soccer balls.

“So we got good at making these things and pushing them and scaling them out, but when you have this balance of not just profit and impact but impact because you know that you’re a member of the group you’re trying to serve. For me, it was sitting down and saying is this actually solving the problem even if it’s successful.”

Matthews said she realized it wasn’t. So that meant walking away from the products that were bringing in millions and had 64% gross profit margins, Matthews said.

But it all paid off. Last year, Uncharted Power raised additional funding from an investor that validated her thesis for the future of power infrastructure.

“That moment was huge for us,” she said.

Matthews and Ellis-Lamkins also had some other gems worth sharing about imposter syndrome and measuring success. Here are some more highlights from the conversation.

On imposter syndrome and representation 

Ellis-Lamkins:

It feels like tech has failed so significantly in investing in people they don’t know and missed out in growing companies because of that. So I think our obligation is to help make sure that we are not the only ones.

Matthews:

It’s not imposter syndrome, it’s representation syndrome because I feel the exact same way. When we raised our Series A, the immediate thing I thought was, ‘Oh, man. I can not lose these people’s money.’ This is huge and if we don’t work, it’s not even about us, it’s about every other person who looks like me.

On measuring success

Ellis-Lamkins:

I think part of what we should measure is how does technology improve our society in general, a measurement of success. I do think that if we measure success, it should not just be, I could make a billion dollars or have a company that valued at a billion dollars if the consequences are greater than the actual benefit and so I think that’s really important.

Matthews:

Let’s get rid of the term “social enterprise.” It’s bullshit. Enterprise is an enterprise. A problem’s a problem. Let’s create a value system based on the problems. There are some problems that are more important than others. And knowing that means we need to back and support the founders who get that more than others, and then beyond that.

Lightspeed Venture Partners announced the launch of its Southeast Asia operations today. Based out of the firm’s new regional headquarters in Singapore, Lightspeed’s team there will invest in startups throughout Southeast Asia from the three global funds it closed earlier this year, which total about $4 billion.

The Southeast Asia team consists of partner Akshay Bhushan, who was a founding member of Flipkart’s corporate development team before joining Lightspeed five years ago; partner Bejul Somaia, who helped set up Lightspeed India; vice president Pinn Lawjindakul, a veteran of Grab and Tiger Global Management; and senior investment associate Marsha Sugana, who previously worked at L Catterton and Goldman Sachs.

Bhushan told TechCrunch that Lightspeed opened its Singapore office in January to serve as a base for its team as they met with entrepreneurs throughout the region. Obviously, the onset of COVID-19 curtailed travel, but they continued talking to startups through video calls and emails.

Lightspeed focuses on early-stage investments and has already invested in some of the most prolific startups in Southeast Asia, including Grab. Its other portfolio companies in the region are Indonesian startups Chilibeli, a social commerce platform, B2B wholesale marketplace Ula and e-commerce logistics platform Shipper, as well as Singaporean software developer NextBillion.AI.

Some of Lightspeed’s investments in other countries have also taken a keen interest in Southeast Asia as a key market for global expansion, including Indian startups OYO Rooms, Darwinbox and Yellow Messenger.

Having regional operations will allow Lightspeed to work more closely with its portfolio companies and make deeper connections with entrepreneurs, Bhushan said.

He added that the pandemic has prompted the rapid adoption of technologies, including platforms that help small businesses digitize their operations or sell online, supply chain solutions and remote working or online education-related services.

In sectors like fintech or logistics, there is also a lot of opportunity in several Southeast Asian countries to build transformative platforms and services. For example, Bhushan said, Shipper is focused on solving some of the biggest supply chain and logistics challenges facing e-commerce sellers in Indonesia, while Grab has made digital payments and other financial services like insurance easier to access.

“The big opportunity in most emerging markets, and this applies to most of the markets in Southeast Asia, is that we generally find that a lot of the fundamental infrastructure is broken, and founders can leverage technology to fill those gaps,” he said. “What excites us are founders who are solving those infrastructural problems, and a lot of our investments are to that effect.”

Millions of high school kids play online multiplayer games, but they seldom have crosstown rivals in Fortnite or Valorant. PlayVS wants to make that happen with its platform for school-sponsored esports, and it’s growing like crazy, doubling its staff in the last year and putting thousands of schools on its platform.

PlayVS connects online games with official school administration and branding, elevating esports from hobby to school-sponsored activity.

“I think we’re building the biggest company in gaming,” founder and CEO Delane Parnell said in an interview at Disrupt  2020 this week. With around 20,000 high schools signed up currently and nearly a hundred million dollars in the bank to grow with, it’s not a totally unrealistic statement.

The company collects $64 per player per semi-yearly season, which starts to add up real quick when you have Counter-Strike teams of a dozen people with alternates, or competing League teams at the same school — multiplied by 20,000, of course. A bit of napkin math suggests income from existing customers is easily in the tens of millions.

Parnell offered the following metaphor to explain what the company aspired to.

“Imagine if there was one basketball court, and every kid who ever wanted to play basketball, whether it’s on behalf of their school, or pick up, or some sort of tournament, that’s the court that they had to play on,” he said. “That’s what we’re building.”

Sure, it sounds a little bit like a monopoly on hoops, but the problem right now is that there really isn’t a shared court at all. Esports is wildly disorganized at that level, if it’s organized at all (and let’s be honest, even at the pro level it’s a bit of a jumble). PlayVS wants to provide the connective tissue so that there’s one place that both players and administrators go to when it comes to inter-school competitive gaming.

Parnell explained that the last year has been about learning the ropes and establishing a presence in the also quite confusing world of state school systems.

“We certainly built the base of the business on the partnership with the NFHS — essentially the NCAA of high schools, they govern and write the rules for our high school sports,” he said. But then individual relationships need to be established with districts, financial programs, state leaders, and of course the game publishers themselves, which are understandably eager to connect with the younger generation of gamers.

So far schools in 23 states have signed up, and Parnell said they’re on track to get every state in the union on board by 2022.

“Those are partnerships that take a little time to form. It also takes additional time to build the technology that actually enables online esports, which most people think exists today, but it actually doesn’t,” he said. “So we’ve started to invest very deeply into hiring a team to build our product. We have a ton of capital in the bank and we intend to use that very wisely.”

The product build-out is more than buying servers — it’s attempting to create parity with the tools available in the context of sports like football and basketball.

“There’s products and services that we can bake in, things like recruiting, scouting, proven technology, highlights… these are things that would normally exist from independent companies within traditional sports,” he said. “One company does one thing, a thousand companies do ancillary things that make the sports experience better for every stakeholder, a parent, a coach, a player, etc. We’re going to be able to do all of those things within the PlayVS ecosystem, because we’re the league operator and the sole holder of that data. We will effectively have complete control of what that experience looks like and all of the revenue models associated with that.”

For comparison he suggested fantasy sports, now a huge industry but not one dominated by a single entity. “If there was one group, like CBS for example, that could have aggregated all that behavior, that’d be a $40-50 billion a year company. But they couldn’t get in with, you know, the NFL, the NBA, to give them exclusive rights to be the only fantasy provider on the market,” Parnell explained. “Game publishers are willing to do that with us, they’re willing to integrate with our product because they know we can execute. So I think that’s a big opportunity. And one could be worth hundreds of billions of dollars.”

PlayVS won’t be expanding into pro leagues, he confirmed, saying that the high school and college level work is as much as they can handle right now. But they’re overwhelmed in the best way.

“It’s almost as if the NBA existed for four years, and then they went back and said hey, we need to build high school basketball, college basketball, etc,” he said. “Obviously there’s a lot of catching up to do.”

Facebook makes its next steps in VR, Apple releases iOS 14 and the PlayStation 5 gets a launch date. This is your Daily Crunch for September 16, 2020.

The big story: Facebook unveils the Oculus Quest 2

Facebook announced the smaller, more affordable follow-up to the Oculus Quest VR headset launching on October 13 at a starting price of $299. At the same time, Lucas Matney has already tried out the device and sounded very impressed in his review:

This is the most convincing argument Oculus has made for VR since its inception … It’s still largely for gamers and will still be in danger of getting mainstream users excited for a few weeks and then spending the rest of its life in the closet.

The announcement was part of today’s Facebook Connect event, where the company also debuted a virtual office space called Infinite Office, announced a fitness tracking device and revealed plans to launch smart glasses next year.

Meanwhile, R.I.P. Oculus Rift.

The tech giants

Apple burns developer goodwill with surprise release of iOS 14 — iOS 14 is now available for download, with yesterday’s surprise announcement leaving many developers scrambling to prepare their apps.

Amazon Music adds podcasts, including its own original shows — The first slate of originals on Amazon Music will include shows hosted by creators like DJ Khaled, Becky G, Will Smith, Dan Patrick and others.

Dropbox CEO Drew Houston says the pandemic forced the company to reevaluate what work means — Houston spoke at TechCrunch Disrupt, arguing that COVID has accelerated a shift to distributed work that will not go away.

Startups, funding and venture capital

Zwift, maker of a popular indoor training app, just landed a whopping $450 million in funding led by KKR — Zwift has now raised $620 million altogether and is valued at north of $1 billion.

Volocopter kicks off pre-sales for its first air taxi flights, with a wait time of 2-3 years — If your sad-faced technology mantra is “we were promised flying cars and all we got were these shitty internet trolls,” never fear, Volocopter is here.

Kerry Washington explains why she became a startup investor — She also discussed her investment in The Wing, the female co-working startup that’s faced some recent scandals.

Advice and analysis from Extra Crunch

Four perspectives on Apple’s new service bundle — For one thing, Cupertino is engaging in a form of future-proofing to offset slowing hardware sales and potentially a loss of App Store income.

Dear Sophie: How can I get my 2-year foreign residency requirement for my J-1 waived? — Another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

JFrog and Snowflake’s aggressive IPO pricing point to strong demand for cloud shares — At their final IPO prices, the two debuts are aggressively valued, showing continued optimism amongst public investors that cloud shares are an attractive bet.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Sony’s PlayStation 5 arrives November 12, priced at $500 — On that date, the console will be available in North America, Japan, Australia, New Zealand and South Korea.

China tops 110 million 5G users in less than a year — This makes China the largest 5G market in terms of user size, according to the China Academy for Information and Communications Technology.

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For people who are blind or visually impaired, JAWS is synonymous with freedom to operate Windows PCs with a remarkable degree of control and precision with output in speech and Braille. The keyboard-driven application makes it possible to navigate GUI-based interfaces of web sites and Windows programs. Anyone who has ever listened to someone proficient in JAWS (the acronym for “Job Access With Speech”) navigate a PC can’t help but marvel at the speed of the operator and the rapid fire machine-voice responses from JAWS itself.

For nearly 25 years, JAWS has dominated the field of screen readers, and is in use by hundreds of thousands of people worldwide. It is inarguably one of the greatest achievements in modern assistive technology. We are delighted to announce that Glen Gordon, the architect of JAWS for over 25 years, is joining the agenda at Sight Tech Global, which is a virtual event (Dec. 2-3) focused on how AI-related technologies will influence assistive technology and accessibility in the years ahead. Attendance is free and registration is open.

Blind since birth, Gordon’s interest in accessibility developed out of what he calls “a selfish desire to use Windows at a time when it was not at all clear that graphical  user interfaces could be made accessible.”  He has an MBA from the UCLA Anderson School, and he learned software development through “the school of hard knocks and lots of frustration trying to use inaccessible software.” He is an audio and broadcasting buff and host of FSCast, the podcast from Freedom Scientific.

The latest public beta release of JAWS contains a glimpse of the future for the storied software: It now works with certain user voice commands – “Voice Assist” – and provides more streamlined access to image descriptions, both thanks to AI technologies that the JAWS team at Freedom Scientific is using  in JAWS as well as FUSION (which combines JAWS and ZoomText, a screen magnifier). Those updates address two of JAWS’ challenges – the complexity of the available keyboard command set that intimidates some users and “alt tags” on images that don’t always adequately describe the image.

“The upcoming versions of JAWS, ZoomText,  and Fusion use natural language processing to allow many screen reader commands to be performed verbally,” says Gordon. “ You probably wouldn’t want to speak every command, but for the less common ones Voice assist offers a way to minimize the key combinations that you need to learn.”

“Broadly speaking, we’re looking to make it easier for  people to  use a smaller command set to work efficiently. This fundamentally means making our products smarter, and being able to anticipate what a user wants and needs based on their prior actions. Getting there is an imprecise process and we’ll continue to rely on user feedback to help guide us towards what works best.”

The next generation of screen readers will take advantage of AI among other technologies, and that will be a major topic at Sight Tech Global on Dec. 2-3. Get your free pass now.

Sight Tech Global Sight Tech Global welcomes sponsors. Current sponsors include Verizon Media, Google, Waymo, Mojo Vision and Wells Fargo, The event is organized by volunteers and all proceeds from the event benefit The Vista Center for the Blind and Visually Impaired in Silicon Valley.