Year: 2020

An Indian court rejected Future Group’s plea that sought to prevent its partner Amazon from raising objections and interfering in the Indian retail giant’s $3.4 billion asset sale deal to Mukesh Ambani’s Reliance Industries, delivering a glimmer of hope to the American e-commerce firm that has invested more than $6.5 billion in the world’s second largest internet market.

The Delhi High Court ruling on Monday is the latest episode in the high-stake battle between Amazon and Future Group. Amazon bought 49% in one of Future’s unlisted firms last year in a deal that was valued at over $100 million. As part of that deal, Future could not have sold assets to rivals, Amazon said in court filings.

Things changed this year after the coronavirus pandemic starved the Indian firm of cash, Future Group chief executive and founder Kishore Biyani said at a recent virtual conference. In August, Future Group said that it had reached an agreement with Ambani’s Reliance Industries, which runs India’s largest retail chain, to sell its retail, wholesale, logistics, and warehousing businesses for $3.4 billion.

Months later, Amazon protested the deal by reaching an arbitrator in Singapore and asked the court to block the deal between the Indian retail giants. Amazon secured emergency relief from the arbitration court in Singapore in late October that temporarily halted Future Group from going ahead with the sale.

But it remained unclear whether that ruling would hold any water in front of Indian courts — until today. So much so that on the day Singapore arbitration court announced its ruling, Future Group and Reliance said in a statement that will be going ahead with the deal.

Amazon had also reached out to the Competition Commission of India, the Indian watchdog, to block the deal. Competition Commission of India, however, approved the deal between the Indian firms. In earlier hearings, lawyers for Future Group likened Amazon’s effort to block Future Group’s deal to the East India Company, the British trading house whose arrival in India kicked off nearly 200 years of colonial rule.

At stake is India’s retail market that is estimated to balloon to $1.3 trillion by 2025, up from $700 billion last year, according to consultancy firm BCG and local trade group Retailers’ Association India. Online shopping accounts for about 3% of all retail in India.

This is a developing story. More details to follow…

SoftBank Investment Advisers may file as early as Monday to raise between $500 million and $600 million through an initial public offering of its first special purpose acquisition vehicle, reports Axios.

SoftBank Investment Advisers manages the two Vision Funds and may continue leaning into SPACs, with two more reportedly in the works.

The conglomerate first revealed its SPAC plans in October when SoftBank Investment Advisers chief executive officer Rajeev Misra said he was planning a SPAC while speaking at the Milken Institute Global Conference. An SPAC would give the Vision Fund another way of investing in private companies, and also allow the public to invest in SoftBank’s portfolio picks.

SPACs are blank-check companies created for the purpose of merging or acquiring other companies, and have gained popularity this year as an alternative to traditional stock market debuts.

While this would be SoftBank’s first SPAC, one of its portfolio companies, real-estate platform OpenDoor, recently went public through an SPAC. Another one of its investments, Indonesian e-commerce giant Tokopedia, is also considering going public through a SPAC backed by Richard Li and Peter Thiel, after putting its IPO plans because of the pandemic.

When Payam Banazadeh and his team started Capella Space in 2016, they had visions of providing private industry with a wealth of new data that they could use in all sorts of ways to create business opportunities and improve efficiencies.

Four years later, Banazadeh is still waiting for that commercial opportunity.

Capella is still successful. The company has managed to raise $82 million in venture capital financing and has a robust pipeline of government contracts, but Banazadeh has not seen the kinds of uptake in private industry.

He’s not the only one.

Speaking at TC Sessions: Space 2020, Banazadeh was among a number of executives including Peter Platzer, the chief executive officer of Spire Global; Helsinki-based ICEYE’s co-founder and chief executive Rafal Modrzewski; and Melanie Stricklan, the founder and chief strategy officer of Slingshot Aerospace; who spoke about the central role government plays in the current space business and how they’re hoping that will change.

“I think regulation in the US… has made huge improvements this past year. But the challenge is always how do you balance national security concerns with making sure that the US industrial space can keep up with the competition internationally,” Banazadeh said. “I think we need to… in the US… we need to take a leadership position to not just restrict the US companies on following what international companies are doing, but rather allow US companies to go above and beyond and be able to capture more of the commercial market by being able to provide some of the more advanced features [that they have] on the government side.”

Modrzewski agreed.

“When we were starting ICEYE, we were kind of all under the impression that the idea behind new space and things that we are doing, is really to enable the use of observation for the betterment of the world… For improving efficiencies of businesses, monitoring climate change, doing all these things that that that we haven’t been able to do to do before,” he said. “And when I look at basically democratizing data and handing best capabilities available to commercial industries, as well as to the government, ultimately, right, because they are users of the same, the same supply chain. I see that you know, the largest factor that’s currently stopping the evolution is actually national approach to particular sets of activities. I think the the more globally we approach to the market, the broader the competition, the less limitation we impact… It seems to work significantly better for everyone as a global community, if we allow those companies to freely collaborate, and the data exchange to be free. So if there was one wish that I had for 2021, it is to have less borders, and more open markets in terms of exchange of data.”

Governments are, already, massive customers for most of these businesses. In total government spending represents around half of the total $423 billion spent on the space industry already, according to data from Statista.

But if the industry is to achieve the $1 trillion potential revenue that Morgan Stanley projects for businesses in the next 20 years, then more will have to be done to unlock private industry.

“When we started the company, we saw the immediate opportunity in commercial. And as we dug a little deeper and made some progress, we realized that the commercial market is still not as mature as we had hoped it to be. And in the meantime, we quickly found out that the government market, both US government, as well as international governments are expanding and growing much faster than, than before, specifically for this type of data, because of the new challenges and challenges and threats that are that are around the corner,” Banazadeh said. “And so we’ve pivoted and focused on going after governments in catering to their needs… We do want to get back into commercial, we have that aspiration. And that’s our long term goal. We just think that we’re probably a few years out to get there.”

While the commercial market may not have materialized to the degree that these entrepreneurs would have hoped, there are still opportunities for plenty of business from government contracts thanks, in part, to the increasing complexity of operating in space.

That means big business for company’s like Slingshot, which provides what Stricklan calls “situational awareness.”

“Whether that’s in orbit or terrestrially, we provide answers to our customers around their risk and and how to mitigate that risk, or at least how to understand the risk as it pertains to spatial-temporal information,” Stricklan said. “And so right now … their most important asset is their data [and] in order to get that data, they have to have their satellites in orbit, and they have to have safety of flight and all those different things.”

The exploding number of satellites in orbit and the presence of nearly 500,000 pieces of space debris means that operationally these very expensive assets are at greater risk than they were. Slingshot tries to solve that problem by giving its customers orbital awareness of potential risks, and providing ways to process data to understand the terrestrial risks that companies face.

Everyone from insurance companies to logistics providers to financial investors use satellite data and imagery in their decision making process and an increasing driver for all of these businesses is a chance to model out impacts from climate change, according to Platzer.

“I think I think the demand for a global understanding off the planet, to use its resources in an effective and responsible way, is unabated. You know, perspire in particular, you know, the impact of climate change through weather on every single business in every single country, for every single person is certainly not going away. And so that demand is is absolutely increasing,” Platzer said. “So I honestly actually see mostly, almost exclusively opportunities, and not necessarily obstacles, funding in the industry is growing at 46%. year over year. Company creation is growing at 32% year over year. So I think I think it’s really a very, very dynamic period, which is more dominated by opportunities than obstacles I would say.”

Increasingly, startups will be able to meet these opportunities, especially if they can receive a boost from government entities that can highlight the areas that are emerging business opportunities and leave it to private industry to pursue them, Modrzewski said.

Still, the panelists agreed that there’s no better time to start a company focused on the space industry than now.

“If I could encourage those that have any sort of inspiration to start a company around space to do it, just do it. Execute on that, that vision, but understand all of the, the things that we talked about today are different than the risk of say, starting a marketing company or those different things. So be up to the challenge to understand the government as part of this and understand rules and regulations, and outside the government that impact how we fly satellites, how we take care of satellites, how we provide data and understand that there’s a lot of legacy that comes with this industry,” Stricklan said. “I think the global space ecosystem is one that remains heavily siloed. It’s not like the digital transformations that have happened in Silicon Valley. Over the last 10 or 15 years. This industry still needs that digital transformation and so the the world is your oyster, but be prepared and be up for the challenge.”

When Payam Banazadeh and his team started Capella Space in 2016, they had visions of providing private industry with a wealth of new data that they could use in all sorts of ways to create business opportunities and improve efficiencies.

Four years later, Banazadeh is still waiting for that commercial opportunity.

Capella is still successful. The company has managed to raise $82 million in venture capital financing and has a robust pipeline of government contracts, but Banazadeh has not seen the kinds of uptake in private industry.

He’s not the only one.

Speaking at TC Sessions: Space 2020, Banazadeh was among a number of executives including Peter Platzer, the chief executive officer of Spire Global; Helsinki-based ICEYE’s co-founder and chief executive Rafal Modrzewski; and Melanie Stricklan, the founder and chief strategy officer of Slingshot Aerospace; who spoke about the central role government plays in the current space business and how they’re hoping that will change.

“I think regulation in the US… has made huge improvements this past year. But the challenge is always how do you balance national security concerns with making sure that the US industrial space can keep up with the competition internationally,” Banazadeh said. “I think we need to… in the US… we need to take a leadership position to not just restrict the US companies on following what international companies are doing, but rather allow US companies to go above and beyond and be able to capture more of the commercial market by being able to provide some of the more advanced features [that they have] on the government side.”

Modrzewski agreed.

“When we were starting ICEYE, we were kind of all under the impression that the idea behind new space and things that we are doing, is really to enable the use of observation for the betterment of the world… For improving efficiencies of businesses, monitoring climate change, doing all these things that that that we haven’t been able to do to do before,” he said. “And when I look at basically democratizing data and handing best capabilities available to commercial industries, as well as to the government, ultimately, right, because they are users of the same, the same supply chain. I see that you know, the largest factor that’s currently stopping the evolution is actually national approach to particular sets of activities. I think the the more globally we approach to the market, the broader the competition, the less limitation we impact… It seems to work significantly better for everyone as a global community, if we allow those companies to freely collaborate, and the data exchange to be free. So if there was one wish that I had for 2021, it is to have less borders, and more open markets in terms of exchange of data.”

Governments are, already, massive customers for most of these businesses. In total government spending represents around half of the total $423 billion spent on the space industry already, according to data from Statista.

But if the industry is to achieve the $1 trillion potential revenue that Morgan Stanley projects for businesses in the next 20 years, then more will have to be done to unlock private industry.

“When we started the company, we saw the immediate opportunity in commercial. And as we dug a little deeper and made some progress, we realized that the commercial market is still not as mature as we had hoped it to be. And in the meantime, we quickly found out that the government market, both US government, as well as international governments are expanding and growing much faster than, than before, specifically for this type of data, because of the new challenges and challenges and threats that are that are around the corner,” Banazadeh said. “And so we’ve pivoted and focused on going after governments in catering to their needs… We do want to get back into commercial, we have that aspiration. And that’s our long term goal. We just think that we’re probably a few years out to get there.”

While the commercial market may not have materialized to the degree that these entrepreneurs would have hoped, there are still opportunities for plenty of business from government contracts thanks, in part, to the increasing complexity of operating in space.

That means big business for company’s like Slingshot, which provides what Stricklan calls “situational awareness.”

“Whether that’s in orbit or terrestrially, we provide answers to our customers around their risk and and how to mitigate that risk, or at least how to understand the risk as it pertains to spatial-temporal information,” Stricklan said. “And so right now … their most important asset is their data [and] in order to get that data, they have to have their satellites in orbit, and they have to have safety of flight and all those different things.”

The exploding number of satellites in orbit and the presence of nearly 500,000 pieces of space debris means that operationally these very expensive assets are at greater risk than they were. Slingshot tries to solve that problem by giving its customers orbital awareness of potential risks, and providing ways to process data to understand the terrestrial risks that companies face.

Everyone from insurance companies to logistics providers to financial investors use satellite data and imagery in their decision making process and an increasing driver for all of these businesses is a chance to model out impacts from climate change, according to Platzer.

“I think I think the demand for a global understanding off the planet, to use its resources in an effective and responsible way, is unabated. You know, perspire in particular, you know, the impact of climate change through weather on every single business in every single country, for every single person is certainly not going away. And so that demand is is absolutely increasing,” Platzer said. “So I honestly actually see mostly, almost exclusively opportunities, and not necessarily obstacles, funding in the industry is growing at 46%. year over year. Company creation is growing at 32% year over year. So I think I think it’s really a very, very dynamic period, which is more dominated by opportunities than obstacles I would say.”

Increasingly, startups will be able to meet these opportunities, especially if they can receive a boost from government entities that can highlight the areas that are emerging business opportunities and leave it to private industry to pursue them, Modrzewski said.

Still, the panelists agreed that there’s no better time to start a company focused on the space industry than now.

“If I could encourage those that have any sort of inspiration to start a company around space to do it, just do it. Execute on that, that vision, but understand all of the, the things that we talked about today are different than the risk of say, starting a marketing company or those different things. So be up to the challenge to understand the government as part of this and understand rules and regulations, and outside the government that impact how we fly satellites, how we take care of satellites, how we provide data and understand that there’s a lot of legacy that comes with this industry,” Stricklan said. “I think the global space ecosystem is one that remains heavily siloed. It’s not like the digital transformations that have happened in Silicon Valley. Over the last 10 or 15 years. This industry still needs that digital transformation and so the the world is your oyster, but be prepared and be up for the challenge.”

Citizen Lab researchers say they have found evidence that dozens of journalists had their iPhones silently compromised with spyware known to be used by nation states.

For more than the past year, London-based reporter Rania Dridi and at least 36 journalists, producers and executives working for the Al Jazeera news agency were targeted with a so-called “zero-click” attack that exploited a now-fixed vulnerability in Apple’s iMessage. The attack invisibly compromised the devices without having to trick the victims into opening a malicious link.

Citizen Lab, the internet watchdog at the University of Toronto, was asked to investigate earlier this year after one of the victims, Al Jazeera investigative journalist Tamer Almisshal, suspected that his phone may have been hacked.

In a technical report out Sunday and shared with TechCrunch, the researchers say they believe the journalists’ iPhones were infected with the Pegasus spyware, developed by Israel-based NSO Group.

The researchers analyzed Almisshal’s iPhone and found it had between July and August connected to servers known to be used by NSO for delivering the Pegasus spyware. The device revealed a burst of network activity that suggests that the spyware may have been delivered silently over iMessage.

Logs from the phone show that the spyware was likely able to secretly record the microphone and phone calls, take photos using the phone’s camera, access the victim’s passwords, and track the phone’s location.

Citizen Lab said the bulk of the hacks were likely carried out by at least four NSO customers, including the governments of Saudi Arabia and the United Arab Emirates, citing evidence it found in similar attacks involving Pegasus.

The researchers found evidence that two other NSO customers hacked into one and three Al Jazeera phones respectively, but that they could not attribute the attacks to a specific government.

A spokesperson for Al Jazeera, which just broadcast its reporting of the hacks, did not immediately comment.

NSO sells governments and nation states access to its Pegasus spyware as a prepackaged service by providing the infrastructure and the exploits needed to launch the spyware against the customer’s targets. But the spyware maker has repeatedly distanced itself from what its customers do and has said it does not who its customers target. Some of NSO’s known customers include authoritarian regimes like China and Russia. Saudi Arabia allegedly used the surveillance technology to spy on the communications of columnist Jamal Khashoggi shortly before his murder, which U.S. intelligence concluded was likely ordered by the kingdom’s de facto ruler, Crown Prince Mohammed bin Salman.

Citizen Lab said it also found evidence that Dridi, a journalist at Arabic television station Al Araby in London, had fallen victim to a zero-click attack. The researchers said Dridi was likely targeted by the UAE government.

In a phone call, Dridi told TechCrunch that her phone may have been targeted because of her close association to a person of interest to the UAE.

Dridi’s phone, an iPhone XS Max, was targeted for a longer period, likely between October 2019 and July 2020. The researchers found evidence that she was targeted on two separate occasions with a zero-day attack — the name of an exploit that has not been previously disclosed and that a patch is not yet available — because her phone was running the latest version of iOS both times.

“My life is not normal anymore. I don’t feel like I have a private life again,” said Dridi. “To be a journalist is not a crime,” she said.

Citizen Lab said its latest findings reveal an “accelerating trend of espionage” against journalists and news organizations, and that the growing use of zero-click exploits makes it increasingly difficult — though evidently not impossible — to detect because of the more sophisticated techniques used to infect victims’ devices while covering their tracks.

When reached on Saturday, NSO said it was unable to comment on the allegations as it had not seen the report, but declined to say when asked if Saudi Arabia or the UAE were customers or describe what processes — if any — it puts in place to prevent customers from targeting journalists.

“This is the first we are hearing of these assertions. As we have repeatedly stated, we do not have access to any information related to the identities of individuals upon whom our system is alleged to have been used to conduct surveillance. However, when we receive credible evidence of misuse, combined with the basic identifiers of the alleged targets and timeframes, we take all necessary steps in accordance with our product misuse investigation procedure to review the allegations,” said a spokesperson.

“We are unable to comment on a report we have not yet seen. We do know that CitizenLab regularly publishes reports based on inaccurate assumptions and without a full command of the facts, and this report will likely follow that theme NSO provides products that enable governmental law enforcement agencies to tackle serious organized crime and counterterrorism only, but as stated in the past, we do not operate them. Nevertheless, we are committed to ensuring our policies are adhered to, and any evidence of a breach will be taken seriously and investigated.”

Citizen Lab said it stood by its findings.

Spokespeople for the Saudi and UAE governments in New York did not respond to an email requesting comment.

The attacks not only puts a renewed focus on the shadowy world of surveillance spyware, but also the companies having to defend against it. Apple rests much of its public image on advocating privacy for its users and building secure devices, like iPhones, designed to be hardened against the bulk of attacks. But no technology is impervious to security bugs. In 2016, Reuters reported that UAE-based cybersecurity firm DarkMatter bought a zero-click exploit to target iMessage, which they referred to as “Karma.” The exploit worked even if the user did not actively use the messaging app.

Apple told TechCrunch that it had not independently verified Citizen Lab’s findings but that the vulnerabilities used to target the reporters were fixed in iOS 14, released in September.

“At Apple, our teams work tirelessly to strengthen the security of our users’ data and devices. iOS 14 is a major leap forward in security and delivered new protections against these kinds of attacks. The attack described in the research was highly targeted by nation-states against specific individuals. We always urge customers to download the latest version of the software to protect themselves and their data,” said an Apple spokesperson.

NSO is currently embroiled in a legal battle with Facebook, which last year blamed the Israeli spyware maker for using a similar, previously undisclosed zero-click exploit in WhatsApp to infect some 1,400 devices with the Pegasus spyware.

Facebook discovered and patched the vulnerability, stopping the attack in its tracks, but said that more than 100 human rights defenders, journalists and “other members of civil society” had fallen victim.

Let’s be clear: “Songbird” is not a good movie.

It’s hard to see how it could have been any good, since “Songbird” was written shortly after the pandemic began and filmed a few months later — so the filmmakers had to write a screenplay, shoot it in the midst of a pandemic and edit it, all in under a year.

So it feels remarkable that they managed to succeed in at least making an entertaining — if very silly — B-movie. The story is set in the near future, when the lockdown has extended for years and the virus has mutated into COVID-23. Managing the pandemic has fallen to the Department of Sanitation, which can quickly identifies anyone infected and drags them away to unseen Q-Zones.

You might be wondering whether you want to watch a movie that hits so close to the real-life nightmare that we’re currently living through. The good news is that there’s nothing particularly believable in “Songbird,” and a more than a few things that are outright laughable.

But as we explain in the latest episode of the Original Content podcast, Anthony and Darrell both enjoyed the film (currently available to rent on-demand), perhaps because they went in expecting a complete disaster, so they were pleasantly surprised to discover an goofy, unpretentious thriller with one or two genuinely chilling scenes. Jordan, on the other hand, had high hopes, which may explain why she hated it.

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

And if you’d like to skip ahead, here’s how the episode breaks down:
0:00 Intro
0:20 “Songbird” review
19:51 “Songbird” spoiler discussion

Welcome back to Mixtape, the TechCrunch podcast that looks at the human element that powers technology.

For this episode we spoke with Meredith Whittaker, co-founder of the AI Now Institute and Minderoo Research Professor at NYU; Mara Mills, associate professor of Media, Culture and Communication at NYU and co-director of the NYU Center for Disability Studies; and Sara Hendren, professor at Olin College of Engineering and author of the recently published What Can a Body Do: How We Meet the Built World.
It was a wide-ranging discussion about artificial intelligence and disability. Hendren kicked us off by exploring the distinction between the medical and social models of disability:

So in a medical model of disability, as articulated in disability studies, the idea is just that disability is a kind of condition or an impairment or something that’s going on with your body that takes it out of the normative average state of the body says something in your sensory makeup or mobility or whatever is impaired, and therefore, the disability kind of lives on the body itself. But in a social model of disability, it’s just an invitation to widen the aperture a little bit and include, not just the body itself and what it what it does or doesn’t do biologically. But also the interaction between that body and the normative shapes of the world.

When it comes to technology, Mills says, some companies work squarely in the realm of the medical model with the goal being a total cure rather than just accommodation, while other companies or technologies – and even inventors – will work more in the social model with the goal of transforming the world and create an accommodation. But despite this, she says, they still tend to have “fundamentally normative or mainstream ideas of function and participation rather than disability forward ideas.”

“The question with AI, and also just with old mechanical things like Brailers I would say, would be are we aiming to perceive the world in different ways, in blind ways, in minoritarian ways? Or is the goal of the technology, even if it’s about making a social, infrastructural change still about something standard or normative or seemingly typical? And that’s — there are very few technologies, probably for financial reasons, that are really going for the disability forward design.”

As Whittaker notes, AI by its nature is fundamentally normative.

“It draws conclusions from large sets of data, and that’s the world it sees, right? And it looks at what’s most average in this data and what’s an outlier. So it’s something that is consistently replicating these norms, right? If it’s trained on the data, and then it gets an impression from the world that doesn’t match the data it’s already seen, that impression is going to be an outlier. It won’t recognize that it won’t know how to treat that. Right. And there are a lot of complexities here. But I think, I think that’s something we have to keep in mind as sort of a nucleus of this technology, when we talk about its potential applications in and out of these sorts of capitalist incentives, like what is it capable of doing? What does it do? What does it act like? And can we think about it, you know, ever possibly in company encompassing the multifarious, you know, huge amounts of ways that disability manifests or doesn’t manifest.”

We talked about this and much much more on the latest episode of Mixtape, so you click play above and dig right in. And then subscribe wherever you listen to podcasts.

 

 

 

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday? Subscribe here. 

Ready? Let’s talk money, startups and spicy IPO rumors.

Sweet dreams are made of IPOs, so merry f****** Christmas

We’re all very tired but there’s still so much news to go over I am sorry

Can you IPO sneakers? Also, this is the last Exchange roundup of the year

Hello everyone, hope you are well. This is the final Exchange newsletter of 2020. There will be a handful of columns next week before I take some time off. Equity will publish episodes throughout the termination of this accursed annum, as well.

And now that we’re done with housekeeping, our two focuses of the week: Who is going public and how fast a particular cohort of startups are growing.

Sure, the two topics aren’t incredibly related issues, but I am not going to let unending IPO news ruin what I wanted to talk about. So, SEC broccoli first, and then we get to have some fun.

IPOh-no-they-didn’t

IPO news was busy this week, with Coinbase and UIPath filing privately, Poshmark filing publicly, and Bumble reportedly filing privately. In short, we’ve added four names to our IPO roll-call, that already included Affirm and Roblox, which have delayed their own offerings.

And with names like Chime, Robinhood, Expensify, and others already of sufficient scale to go public at-will, the brand-name IPO crop of 2021 could rival what we saw this year.

Thanks to unicorns looking to graze public pastures, and public markets near all-time-highs, it appears that we’re going to see it rain liquidity over the coming months. This means that aggregate venture capital DPI and TVPI metrics will scoot higher, making the entire asset class even more attractive than it was in today’s yield-hungry world.

The music continues.

Just how big is the software business?

Earlier this week, TechCrunch covered Ramp’s new round. Ramp launched in February, and was dismissed by some as a Brex clone at the time. Ramp and Brex compete with Divvy and other startups (more on two others in a moment) to help other companies manage their spend through a combination of real and virtual cards, and software.

Along with some new software features, Ramp announced growth metrics as part of its news bundle. When reached to Divvy for similar numbers, the company supplied them. Brex declined to share results, which was fine. And I failed to mention a few competing companies, namely Airbase and Plate IQ.

Airbase I should have included as I covered it in March, 2020 when it raised $23.5 million in a Series A-extension (the new capital came in at a trebled-valuation, so you could call it a Series B, frankly). Regardless, Airbase matters not only because it is a competitor to Ramp and Divvy and Brex, but because while it offers similar products to its rivals, it also charges for its software.

This is in contrast, as far as I can tell, with Divvy and Brex and Ramp, companies more focused on signing up great masses of companies and driving revenues from interchange incomes. (Not charging for software that is wrapped around commodity cards is a way to keep sales-friction low, and thus, in theory, customer-growth high.)

But while Airbase wants corporate customers to pay for its software, it’s still growing like all heck. According to an email from Airbase CEO Thejo Kote, the startup’s annual recurring revenue (ARR) has grown by 2.5x this year, and payment volume has “grown 7X on an annualized basis.”

Those are super-good numbers. Adding another company to the success mix, well-known investor Garry Tan said on Twitter that Plate IQ, a company I have yet to meet, is “doing more than $500M in annual transactions and is profitable (real earnings).” For contrast, the relatively young Ramp just announced that it had cleared $100 million in aggregate managed spend.

My takeaway from this spate of reporting is not that any single company is going to win, or that one company is the clear leader. Instead this week’s poking around a single software niche reminded me of just how big the software market is.

How is there room for all of these competing startups to grow so quickly at the same time? The answer is that the global economy is huge, and software is still merrily grinding its way into more and more of its heft. I bet we wind up with three of our five companies in this piece surviving to public-scale, and just two being snapped up by private rivals or public giants.

I suppose this makes me long cloud. Whatever. Just don’t tell VC Twitter.

Market Notes

This week to make things easy, I’ve broken up the rest of the things you need to know into two groups. The first is everything that was not a round. The second is all the rounds. Let’s go:

• Slack’s venture capital fund is back for more, the parent company is self-funding the project, and the capital pool has doubled in size to $50 million.
• StockX has reached IPO scale. TechCrunch covered its fundraising news this week, writing at the time that the marketplace for used clothing goods was an IPO candidate. So we took a look. Yep. It’s an IPO candidate.
• The Information reported this week that SoFi did around $200 million in revenue during Q3, and was EBITDA-positive.
• Axios reported on the growth of the creator economy. Stop rolling your eyes. It’s more than big enough to take seriously, so get on board. We also chatted about the situation on Equity, if you are into podcasts with jokes.
• Crypto is back in the headlines, and recent price gains amongst the asset category are not based on pure hype.
• Robinhood had a tough week. The company’s shot at an IPO if it wants one probably won’t come under siege — it wouldn’t be the only company to go public in recent quarters with some legal matters underway — but it was still not the week that the stock trading company wanted. And its rival Public.com raised precisely as much money as Robinhood had to pay in fines. Ouch.
• Startup valuations are, in Silicon Valley at least, on the other-side of the COVID-depression.

Now, a stampede of megarounds.

Huge and Important

Our Various & Sundry section this week is anything but. So I renamed it for this final newsletter of the year. Here they are, the rounds both huge and important:

• Brazil’s Creditas raised $255 million. TechCrunch placed the round amongst a larger wave of Latin America-focused fintech rounds.
• Zenoti, based in Bellevue near Microsoft, raised $160 million, a round that made it a unicorn. What does it do? Per The Seattle Times, it “makes cloud-computing software for managing spas and salons.” Don’t laugh. Vertical SaaS is huge. Barbershop focused vertical SaaS player Squire was valued at $250 million the other week.
• Adding another payments-focused round to the newsletter, GoCardless is nearly a unicorn after raising more money this week.
• And sticking to fintech, France’s Lydia, which “aims to be an all-in-one, in-hand platform for any financial needs” of younger consumers, according to Tech.EU, extended its Series B by $86 million this week. (Accel led that round, and Public’s latest as well. Big week for that firm.)
• TechCrunch reported that ClickUp has put together a new $100 million round that values the company at $1 billion. It raised $35 million in June. Why do we care about ClickUp? It’s part of a wave of companies that closed two rounds in 2020. Ramp. Welcome. SkyFlow. The list goes on.
• In the Insurtech world, Bestow raised $70 million for its digital life insurance product. Insurtech has been hot lately, with AgentSync, a player in the space, raising two rounds this year alone.
• Finally, Paxos, which does crypto work for PayPal among other things, raised $142 million in a mammoth Series C. Chalk this one up to the crypto boom.

And now I shall disappear in a cloud of JUUL mist to lose some more games of Civ 6 to my nemesis, Hugs and and all the best.

Alex

 

 

This was quite the week for Pinterest and not in a good way. While the company settled the gender discrimination lawsuit brought forth by its former COO, the hefty $22.5 million settlement highlighted some of the tech industry’s inequities. 

Meanwhile, Airbnb outlined some new goals around diversity and inclusion, despite having not produced a diversity report since last year, when it disclosed its 2018 data. 

All that and more in this week’s edition of Human Capital. Sign up here to get this newsletter in your inbox every Friday at 1 p.m. PT.

Pinterest settles gender discrimination lawsuit for $22.5 million

Pinterest announced it had settled the gender discrimination lawsuit brought forth by former COO Francoise Brougher. In August, Brougher sued Pinterest, alleging gender discrimination, retaliation and wrongful termination.

As part of the settlement, Pinterest will pay $20 million to Brougher and her attorneys, and both Pinterest and Brougher will commit $2.5 million toward “Advancing women and underrepresented communities” in the tech industry, the company wrote in a filing.

On Black women laying “the groundwork for someone else to swoop in and collect ‘progress’”

Before Brougher filed suit against Pinterest, former Pinterest employees Ifeoma Ozoma and Aerica Shimizu Banks publicly alleged racial and gender discrimination while working at the company. I spoke with Ozoma and Banks about the settlement and how it compared to their outcomes. 

On a call with TechCrunch earlier this week, Ozoma and Banks described a double standard in their experiences compared to Brougher’s. While Brougher received a $20 million payout, Ozoma and Banks received less than one year’s worth of severance. Here are some pertinent words they shared on the settlement:

Banks:

This follows the time-honored tradition in America where Black women come forward, blazing a trail, revealing injustice and white women coming in and reaping all the benefits of that.

Ozoma:

So we, like in many, many, many other cases, Black women put ourselves on the line, shared absolutely everything that happened to us, then laid the groundwork for someone else to swoop in and collect ‘progress. No progress has been made here because no rights have been made with people who harm has been done to.

Pinterest agrees to adopt DEI recommendations

Pinterest committed to adopting the recommendations from its special committee of the board of directors. The committee formed earlier this year in June, shortly after two former employees, Ifeoma Ozoma and Aerica Shimizu Banks, went public with their allegations of racial and gender discrimination while working at Pinterest. 

Here are a few of those recommendations:

• mandatory unconscious bias training for every employee, including managers and executives
• offer additional trainings on inclusivity and unconscious bias
• include “diverse employees” in interview panels with job candidates
• reward employees for their efforts to support and promote DEI
• publish a diversity report twice a year for at least two years; after two years, publish the report annually
• establish criteria for promotion eligibility
• enhance Pinterest’s harassment and discrimination policy
• create a centralized workplace investigations team to ensure consistent and fair outcomes

Gig workers are ready for battle as we enter the new year

Over on Extra Crunch, I did a deep dive into what’s next for gig workers and companies in light of the passage of Prop 22. 

The gist is that Prop 22 does not mark the end of the battle of the status of gig workers. Companies are looking to pursue similar legislation in other places while gig workers are gearing up for another battle.

Moving forward, it’s hard to predict where companies like Uber and Lyft will go next, Brian Chen of the National Employment Law Project said, but it’s likely they’ll want to go to big markets.

“Places where they know there’s been on-the-ground workers organizing and activists they’d finally like to stomp out, and where enforcement has been strong against the company,” he told TechCrunch.

Chen pointed to New York, Illinois, Massachusetts, New Jersey, Colorado, Pennsylvania, Washington, Oregon and Michigan. Wherever these companies bring the battle next, Chen says NELP will be heavily involved in fighting back. As will workers.

“We already know companies are doing this proactively, so we need to be doing this proactively as well,” Bain told me. “I think there is a lot we are going to be up against. It depends on some of the people who are appointed in labor positions and what their actual principles and values are, but I’m a little more optimistic. Things that were not possible to do under Trump will just be really difficult to do under Biden, but not impossible.”

You can read the full, 2,318-word story here.

Gig Workers Rising to launch app to help workers understand their rights under Prop 22

Gig Workers Rising is gearing up to release an app to help gig workers understand their new rights and benefits under Prop 22. 

“[…] workers know that gig companies have a history of making and breaking promises to workers,” the site states. “These corporations depend on you not knowing your rights and being unable to advocate for the benefits you are owed.”

Earlier in the week, Lyft outlined the benefits that are now available to drivers. 

Airbnb sets new DEI goals

Airbnb, which recently went public and became a $100 billion company, recently set two goals to try to improve diversity at the home-sharing and experiences company because it “is nowhere near satisfied with the status quo,” the company wrote in a blog post.

By the end of 2025, Airbnb is aiming for 20% of its U.S. workforce to be underrepresented minorities, which includes folks who self-identify as American Indian or Alaska Native, Black or African American, Hispanic or Latinx, Native Hawaiian or Other Pacific Islander. Currently, underrepresented minorities make up just 12% of the company’s employee base.

The second goal is to increase the representation of women to 50% by the end of 2025. 

Intel’s diversity report breaks out underrepresented women data for first time

Some highlights from the report:

 

• Representation of Hispanic employees increased from 10% to 10.5% year over year
• Representation of underrepresented minorities in the exec level decreased to 8.4% from 8.8%
• Underrepresented women in exec roles increased from 1.8% to 2.4%

TechCrunch Sessions: Justice 2021 tickets on sale

Lastly, tickets are now available for TC Sessions: Justice 2021. Don’t worry, it’ll be an entirely virtual event and tickets are just $5 a pop. 

The event is taking place from your living room on March 3, 2021. Already, we’ve lined up speakers like Backstage Capital founder and Managing Partner Arlan Hamilton, Kickstarter Union co-organizer Clarissa Redwine and Ethel’s Club/Somewhere Good founder and CEO Naj Austin. 

More to come!