Month: November 2020

Squarespace is adding a new monetization option for websites built on the platform: Member Areas, where businesses can charge for access to exclusive content.

Chief Product Officer Paul Gubbay said that particularly in the midst of the pandemic, businesses on Squarespace “want to experiment with different ways to make money.” They can already use the platform to sell products and services, and even to schedule appointments, but with Member Areas, “We allow you to sell your expertise, to sell your content.”

That could, of course, mean an online publication that wants to paywall some of its articles, but it could also mean a chef who wants to charge for access to cooking videos and recipes, or a fitness instructor hoping to make money from online classes.

Group Product Manager Kimberly Lin showed me how Member Areas are integrated into a Squarespace website, allowing the website owner to assign different access requirements to different pages — some could require a recurring membership fee, while others require a one-time payment and still others can be free with registration.

Squarespace also supports different membership tiers, as well as publishing member-only podcasts and newsletters. Site creators get access to CRM data on each of their members, with plans for more segmentation tools in the future.

Squarespace is making this available as an add-on to the core website building platform, with pricing starting at $9 per month. Gubbay emphasized the “simplicity” of adding these features to an existing Squarespace website, making it easy to put “anything you want” behind a paywall.

Lin also said that by integrating with the website builder, Squarespace can offer page protection that’s “truly secure,” because visitors can’t circumvent it by simply tracking down a paywalled URL.

As an early success story, Gubbay mentioned a jewelry merchant on Squarespace who started scheduling sessions where she gives design advice, then created Member Areas with videos and other jewelry-related content.

“First and foremost, we want to make sure we have product-market fit,” Gubbay added. “But I think what we’re going to be interested in doing as we move forward is helping people understand that, guiding them to the parts of the platform where they become a multi-modal seller.”

Federal regulators have approved Mastercard’s acquisition of Salt Lake City-based startup Finicity, which provides open-banking APIs. The deal is expected to go for $825 million.

“We were notified that the Department of Justice completed its review of our planned acquisition of Finicity and has cleared it to move forward,” Mastercard wrote in a statement. “We are pleased to have reached this milestone.”

Finicity allows users to be able to decide how their financial information is shared and who can make money decisions on their behalf through open APIs. The buy will allow Mastercard to offer consumers and businesses more choice in these transactions, without requiring them to do heavy lifting themselves.

Finicity, according to Crunchbase, has raised nearly $80 million in known venture capital as a private company. When closed, it will be one of the largest fintech acquisitions at nearly $1 billion in 2020.

The DOJ approval comes just two weeks after the body filed an antitrust lawsuit challenging Visa’s proposed $5.3 billion buy of Plaid. Plaid, which empowers a large chunk of financial services through its data network, including Venmo and Acorns, is being accused of making Visa a monopoly in online debt services.

Plaid has denied these claims, saying that “Visa intends to defend the transaction vigorously.” The feds are also looking into Intuit’s $7 billion proposed buy of Credit Karma, which was first announced in February 2020.

The approval of the Mastercard-Finicity transaction could be a shot in the arm for fintech startup valuations. After both the Plaid and Credit Karma deals came under increasing regulatory scrutiny, it was an open questions whether big-dollar M&A was going to be an option for fintech unicorns.

If the path was closed due to regulatory concerns, fintech startups would have to either pursue earlier, smaller sales themselves, or wait for an eventual IPO. If that was the case, venture capitalists might shun putting as much capital to work in the sector. However, the Finicity approval makes it clear that not all fintech M&A worth $500 million or more is going to encounter oversight headaches. That should be welcome news for late-stage fintech valuations.

WildWorks, the gaming company that makes the popular kids game Animal Jam, has confirmed a data breach.

Animal Jam is one of the most popular games for kids, ranking in the top five games in the 9-11 age category in Apple’s App Store in the U.S., according to data provided by App Annie. But while no data breach is ever good news, WildWorks has been more forthcoming about the incident than most companies would be, making it easier for parents to protect both their information and their kids’ data.

Here’s what we know.

WildWorks said in a detailed statement that a hacker stole 46 million Animal Jam records in early October but that it only learned of the breach in November.

The company said someone broke into one of its systems that the company uses for employees to communicate with each other, and accessed a secret key that allowed the hacker to break into the company’s user database. The bad news is that the stolen data is known to be circulating on at least one cybercrime forum, WildWorks said, meaning that malicious hackers may use (or be using) the stolen information.

The stolen data dates back to over the past 10 years, the company said, so former users may still be affected.

Much of the stolen data wasn’t highly sensitive, but the company warned that 32 million of those stolen records had the player’s username, 23.9 million records had the player’s gender, 14.8 million records contained the player’s birth year, and 5.7 million records had the player’s full date of birth.

But, the company did say that the hacker also took 7 million parent email addresses used to manage their kids’ accounts. It also said that 12,653 parent accounts had a parent’s full name and billing address, and 16,131 parent accounts had a parent’s name but no billing address.

Besides the billing address, the company said no other billing data — such as financial information — was stolen.

WildWorks also said that the hacker also stole player’s passwords, prompting the company to reset every player’s password. (If you can’t log in, that’s probably why. Check your email for a link to reset your password.) WildWorks didn’t say how it scrambled passwords, which leaves open the possibility that they could be unscrambled and potentially used to break into other accounts that have the same password as used on Animal Jam. That’s why it’s so important to use unique passwords for each site or service you use, and use a password manager to store your passwords safely.

The company said it was sharing information about the breach with the FBI and other law enforcement agencies.

So what can parents do?

• Troy Hunt, a security researcher and owner of Have I Been Pwned, a website that helps you find out if you’re a victim of a data breach, has already obtained a copy of the stolen data. That means anyone can go to Have I Been Pwned and check to see if they are a victim of the Animal Jam breach.

• Thankfully the data associated with kids accounts is limited. But parents, if you have used your Animal Jam password on any other website, make sure you change those passwords to strong and unique passwords so that nobody can break into those other accounts.

• If you need help safely and securely storing or generating strong passwords, use a password manager.

• Keep an eye out for scams related to the breach. Malicious hackers like to jump on recent news and events to try to trick victims into turning over more information or money in response to a breach.

As companies work with data, one of the big obstacles they face is making sure they are not exposing personally identifiable information (PII) or other sensitive data. It usually requires a painstaking manual effort to strip out that data. Gretel, an early stage startup, wants to change that by making it faster and easier to anonymize data sets. Today the company announced a $12 million Series A led by Greylock. The company has now raised $15.5 million.

Gretel founder and CEO Alex Watson says that his company was founded to make it simpler to anonymize data and unlock data sets that were previously out of reach because of privacy concerns.

“As a developer, you want to test an idea or build a new feature, and it can take weeks to get access to the data you need. Then essentially it boils down to getting approvals to get started, then snapshotting a database, and manually removing what looks like personal data and hoping that you got everything,”

Watson, who previously worked as a GM at AWS, believed that there needed to be a faster and more reliable way to anonymize the data, and that’s why he started Gretel. The first product is an open source, synthetic machine learning library for developers that strips out personally identifiable information.

“Developers use our open source library, which trains machine learning models on their sensitive data, then as that training is happening we are enforcing something called differential privacy, which basically ensures that the model doesn’t memorize details about secrets for individual people inside of the data,” he said. The result is a new artificial data set that is anonymized and safe to share across a business.

The company was founded last year, and they have actually used this year to develop the open source product and build an open source community around it. “So our approach and our go-to-market here is we’ve open sourced our underlying libraries, and we will also build a SaaS service that makes it really easy to generate synthetic data and anonymized data at scale,” he said.

As the founders build the company, they are looking at how to build a diverse and inclusive organization, something that they discuss at their regular founders’ meetings, especially as they look to take these investment dollars and begin to hire additional senior people.

“We make a conscious effort to have diverse candidates apply, and to really make sure we reach out to them and have a conversation, and that’s paid off, or is in the process of paying off I would say, with the candidates in our pipeline right now. So we’re excited. It’s tremendously important that we avoid group think that happens so often,” he said.

The company doesn’t have paying customers, but the plan is to build off the relationships it has with design partners and begin taking in revenue next year. Sridhar Ramaswamy, the partner at Greylock, who is leading the investment, says that his firm is placing a bet on a pre-revenue company because he sees great potential for a service like this.

“We think Gretel will democratize safe and controlled access to data for the whole world the way Github democratized source code access and control,” Ramaswamy said.

TechCrunch Sessions: Space (December 16 & 17) is just a few short weeks away and there is perhaps no better time than the end of this horrid year to set our eyes to the horizon and dream of some place far, far away.

David Limp, Amazon’s SVP of Amazon Devices and Services, is just the man to stoke our imaginations. Thusly, we’re stoked to have him join us for a one-on-one conversation at Sessions: Space 2020.

Limp is responsible for Amazon’s devices business, including consumer gadgets like the Echo lineup – but also Project Kuiper, Amazon’s forthcoming Starlink competitor.

Kuiper Systems is a large broadband satellite internet constellation that is expected to be made up of more than 3,000 satellites, with a mission to provide internet to tens of millions of people who currently don’t have access.

In July, Amazon received approval from the FCC to launch and operate said constellation, and the company also announced it would be investing $10 billion into Kuiper, as well as the on-ground infrastructure needed to offer broadband connectivity to those millions of users.

Limp has been with Amazon since March 2010, before which he was a venture partner at Azure Capital Partners for four years. While his role oversees a wide variety of products, including Alexa, Echo, Kindle, Fire TV, Ring and more, the scope of our conversation at Sessions: Space will focus on just that, space.

Limp joins a stellar (see what I did there?) lineup of incredible speakers at TC Sessions: Space, including Lt. Gen. John Thompson of the U.S. Air Force, Rocket Lab’s Peter Beck, and NASA’s Kathryn Lueders. You don’t want to miss it!

You can get an Early Bird Ticket for just $125 until 11:59 p.m. on Friday, November 20. And we have discounts available for groups, students, active military/government employees and for early-stage space startup founders who want to pitch and give their startup some extra visibility.

PayPal announced this morning that its customers can now use either PayPal or Venmo QR codes when checking out at over 8,200 CVS retail stores across the U.S. This is the first national retailer to integrate PayPal’s QR code checkout technology at point-of-sale, the company noted. The additional checkout option will also expand the number of ways customers can pay “touch-free” at CVS — a way to transact that’s become increasingly popular as the coronavirus outbreak continues to spread across the country.

CVS and PayPal announced their plans to cooperate on a point-of-sale solution back in July. At the time, they pegged the timeframe for the rollout as sometime in Q4 2020.

The QR code checkout process itself will pull the funds needed for the purchase from the customer’s existing PayPal or Venmo account balance, bank account, or from a debit or credit card, just as it would if the transaction was taking place online. Venmo users will additionally have the option to utilize their Venmo Rewards.

Image Credits: PayPal

The transaction does not include any fees, PayPal says. Plus, CVS’ ExtraCare Rewards Program members will still be able to redeem and apply savings using their ExtraCare account when using PayPal’s QR code checkout.

The entire transaction can be touch-free, as it involves QR code scanning as opposed to using a card that has to be swiped or inserted into a terminal or numbers punched into a keypad.

The new option arrives at a time when CVS says it’s seeing increased demand for contactless payments.

Since January, CVS has seen a 43% increase in touch-free transactions, according to data from Forrester. In addition, 11% of the U.S. population says they’re now using a digital payment method for the first time as a result of the pandemic, PayPal noted. The company’s own research also indicated that 57% of consumers said merchants’ digital payment offerings impacted their decisions to shop in their stores.

To use the new QR code checkout option, customers will first launch either their PayPal or Venmo app, click the “Scan” button, then select the “show to pay” option.

The new checkout experience was made possible through PayPal’s partnership with payments technology provider InComm, which distributed the PayPal QR code technology through its cloud-based software updates to make the feature available at point-of-sale.

While CVS is the first national retailer to rollout PayPal’s QR code checkout, PayPal said it has 10 other major retailers signed up for a similar rollout, including Nike, Tumi, Bed Bath & Beyond, and Samsonite, among others. It’s in discussions with well over 100 large retailers about the technology, as well.

“The launch of PayPal and Venmo QR codes in CVS Pharmacy stores will not only provide health-conscious customers with a touch-free way to pay at checkout, but also brings the safety and security of PayPal and Venmo transactions into the store with shoppers,” said Jeremy Jonker, PayPal Senior Vice President Head of Consumer In-Store and Digital Commerce, in a statement. “We are thrilled that PayPal and Venmo QR codes will help to maintain the safety of CVS customers and employees, especially in the essential pharmacy retail environment as we go into the winter months.”

In addition to the CVS news, PayPal today also noted that its recently announced “Pay in 4” option for splitting purchases across four installments is now fully live across millions of retailers.

The coronavirus has erased a large chunk of college’s value proposition: the on-campus experience.

Campuses are closed, sports have been paused and, understandably, students don’t want to pay the same tuition for a fraction of the services. As a result, enrollment is down across the country and university business models are under unrelenting pressure.

The entire athletics program at East Carolina University has been furloughed with pay cuts. Ohio Wesleyan University eliminated 18 majors and consolidated a number of programs to save $4 million a year. And Pennsylvania’s Kutztown University lost 1,000 students to online school within weeks of reopening its campus, sacrificing $3.5 million in room and board fees.

And that’s just in the last few weeks.

As universities struggle, edtech is being positioned as a solution for their largest problem: remote teaching. Coursera, a massive open online course (MOOC), created a campus product to help schools quickly offer digital coursework. Podium Education raised millions last month to offer universities for-credit tech programs. Eruditus brought on more than $100 million in the last few months to create programming for elite universities. In some ways, the growth is the story of edtech’s ongoing surge amid the coronavirus pandemic: Remote schooling has forced institutions to piece together third-party solutions to keep operations afloat.

However, while some startups are helping universities offer virtual programming overnight, professors on the ground are warning their institutions to think long-term about what kind of technologies are net positive to adopt.

It’s a stress test that could lead to a reckoning among edtech startups.

‘We’re talking about the next evolution of textbooks’

As the last eight months have taught us, Zoom-based school is a lackluster alternative to the in-person experience. College campuses, thus, are tasked with finding a more creative way to offer engaging virtual content to students who are stuck in their dorm rooms.

Coursera launched Coursera for Campus to help colleges bring on online courses (credit optional) with built-in exams; more than 3,700 schools across the world are using the software.

“Professors would really want super-high-quality branded content that has assessments built into it if they’re going to deliver that learning for credit,” CEO Jeff Maggioncalda said. “That’s not the kind of learning you can get on YouTube.”

For now, though, Maggioncalda says he doesn’t think the death of a physical college campus experience is the future. He’s betting that the product can help colleges save money on faculty costs and reinvest that same money into the campus.

“There will be schools that will continue to offer residential experience, and I think what they’re gonna find is, if your real value proposition is that residential experience, then lead into that heavily,” he said. “But make sure that you’ve got really good content and credentials that are available so that your students don’t have to sacrifice.”

Georgia Tech professor David Joyner says that MOOCs like Coursera “are good for outreach and access, but are not good for accreditation.” Instead, he thinks edtech needs to be built first and foremost for universities to be most effective.

Podium Education, for example, builds courses in partnership with universities to offer for-credit courses. The newly launched startup raised $12 million in October and works with more than 20 colleges. Eruditus, an edtech startup that raised over $100 million in September, creates courses in collaboration with more than 30 elite universities, including MIT, Harvard, UC Berkeley, IIT and more.

Coursera, Podium and Eruditus are all signaling a future where universities could be getting a plug-and-play model of asynchronously taught curriculum.

The last thing I recall thinking about C3.ai (C3) was seeing its billboards outside San Francisco and asking myself what the hell the company actually did and how much it was spending on a huge outdoor advertisements.

So much for what I know. The company filed to go public on Friday, and instead of being a cash-burning, buzzwordy mess, C3 is actually in pretty good financial shape, generating both growing recurring software revenues and cash in some quarters.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

C3’s growth is not as regular as some investors might like, but the company has an attractive gross margin profile and even the occasional bit of net income to point to. Its financial picture is therefore generally likable, with a few caveats that we’ll explore.

But what does C3 do, who backed it, and what can we learn from drilling into its numbers? I am glad you asked, because those were precisely the questions that I had going into its filing.

Pull up the document here, and let’s get into the numbers.

Inside the guts of a modern AI company

First, what is C3? The former startup calls itself an enterprise artificial intelligence (AI) company, selling software services that help big companies build AI apps “of extraordinary scale and complexity that offer significant social and economic benefit,” according to its S-1.

The company sells its software in two forms: as a developer environment that lets customers design, build and deploy their AI apps on their cloud of choice, and as a group of pre-built apps users can spin up quickly. If C3 were a startup, I’d ask at this point how efficacious its AI tooling really is, but as this unicorn is worth $3.3 billion and has nine-figure revenue, it must have come up with something that works.

A host of venture capital firms have invested in C3, with the company raising more than $360 million during its lifetime, according to PitchBook data. BlackRock led its Series H, FS Investors led its Series G, its $100 million Series F was led by TPG, Breyer Capital led its Series E, TPG Growth led its Series D, while its Series C and before are a little harder to parse, but it appears that Makena Capital Management and Interwest Partners were active at that stage.

Looking to ownership, founder and entrepreneur Thomas Siebel owns just under 34%, TPG owns 22.6%, and Baker Hughes owns around 15%. The company’s voting power rests in its Class B stock, which Siebel effectively controls.

Right now, is the business itself any damn good?

The numbers

C3 has an annoying fiscal year, a twelve-month period that ends on April 30th. So, when we discuss its most recent two fiscal years, we’re chatting about the four-quarter periods that ended onm April 30, 2019 and April 30, 2020. Afterwards, we’ll drill into the July 31 quarter, the most recent period for which we have data.

Spotify today launched a new feature designed to give podcast listeners a new way to organize and save content they want to listen to at a later time or keep their favorite episodes bookmarked for easy access. The feature, called “Your Episodes,” lets you bookmark individual episodes from any podcast, which are then added a new “Your Episodes” playlist.

This playlist is found pinned to the top of Your Library in the Music Playlist and Podcast Episodes tabs, says Spotify.

The new option could be useful for those times when a podcast you don’t normally subscribe to has a show you want to listen to — like an interview with a favorite celebrity, for example, or a discussion about a topic you’re passionate about. It could also be used to sample a podcast you’re unsure of by adding a couple episodes to a playlist to see how well you enjoy its content.

For example, if Spotify recommended a particular podcast based on your current listening habits, you could visit the show’s page and create a custom playlist of the episodes that looked most interesting.

In addition, users could take advantage of this new bookmarking feature to save favorite episodes they may want to listen to again at some point.

To save an episode, you’ll just click the “+” plus icon on an episode card or an episode page to add the show to the playlist.

Spotify has dabbled with podcast playlists before today. Last year, it began allowing users to add podcasts to their playlists and launched a combo music-and-podcast playlist for commuters called “Your Daily Drive.” Earlier this year, Spotify also rolled out a set of editorially curated podcast playlists to encourage discovery.

The new save feature simplifies the process of making a podcast playlist, however, as it allows users to quickly add content to a built-in playlist with a tap, instead of having to go through the more involved process of custom playlist creation.

The company says the new feature is rolling out starting today on iOS and Android to both Free users and Premium subscribers in all markets where podcasts are available.

Over the past decade, many startups have tried (and many have failed) to rethink the way we schedule our meetings and calls. But we seem to be in a calendrical renaissance, with incumbents like Google and Outlook getting smarter and smarter and newcomers like Calendly growing significantly.

Undock, an Entrepreneurs Roundtable Accelerator-backed startup, is looking to enter the space.

The startup recently closed a $1.6 million seed round with investors that include Lightship Capital, Bessemer Venture Partners, Lerer Hippeau, Alumni Ventures Group, Active Capital, Arlan Hamilton of Backstage Capital, Sarah Impach of Paypal/LinkedIn, and several other angel investors.

For now, Undock is a Chrome extension that allows users to seamlessly see mutual availability across a group, whether or not all users in the group have Undock, all from within their email. Founder and CEO Nash Ahmed wouldn’t go into too much detail about the technology that allows Undock to accomplish this. But, on the surface, users who don’t yet have Undock can temporarily link their calendar to the individual meeting request to automatically find times that work for everyone in the group. Otherwise, they can see the suggested times of the rest of the group and mark the ones that work for them.

This is just the beginning of the journey for Undock. The company plans to launch a full-featured calendar in Q1 of 2021, that would include collaborative editing right within calendar events, and embedded video conferencing.

According to Ahmed, the most important differentiating features of Undock are that it focuses on mutual availability (not just singular availability) and that it does so right within the email client.

Image Credits: undock

Scheduling will always be free within Undock, but the full calendar (when it’s released publicly) will have a variety of tiers starting at $10/month per user. Undock will also borrow from the Slack model and charge more for retention of information.

“The greatest challenge is definitely customer education,” said Ahmed, explaining that early on some users were confused by the product’s simplicity. “We messaged it by saying it’s like autocomplete. And early users would get into their email and then ask what to do next, or if they had to go back to Undock or to the Chrome extension. And we’d have to say ‘no, just keep typing.'”

The Undock team, which is Black- and female-founded, numbers 18 people. Twenty-eight percent of the team is female, 22 percent are Black, and 11 percent are LGBTQ, and the diversity of the leadership team is even higher.