Year: 2020

River, the latest venture from Wander founder Jeremy Fisher, has today announced the close of a $10.4 million funding round from Founders Fund, .406, BoxGroup, Josh Kushner and Scooter Braun.

River is meant to rethink the way we consume content across the internet. The app pulls stories and content from across the entire internet, including from publishers, Twitter and other social media, etc. and organizes that content based on the topic.

For example, the confirmation hearings for Hon. Amy Coney Barrett were in my River feed this morning, with stories from a wide variety of publishers. River clips the story down to a headline, but gives users the ability to click through to the full text of the story. The app also prioritizes video content, giving users a chance to get more context on the story without clicking through at all.

What’s most interesting about River, however, is that there is no user account or profile, and no following. That means that the behavior of an individual user (or a phone, as Fisher calls it) will be the only influence on the content they’re served, rather than their social graph playing a role. According to PEW, 55 percent of U.S. adults get their news either ‘often’ or ‘sometimes’ from social media. The combination of the social graph with information consumption can cause echo chambers and social media has been a place where misinformation can proliferate quickly.

River serves up content from publishers and across the web without using account information, a social graph, or past browsing history, which allows those users to discover a broader range of perspectives. The more users get on the platform, the better it gets at serving them the content that’s relevant to them.

Onboarding to River simply includes ticking boxes for categories that interest you and you’re off to the races.

Rather than understanding everything about the user, River tries to understand everything it can about the content itself.

“We look at things like: who published that content, whether they’re a professional or a regular consumer, whether they are part of an organization that’s a subsidiary of another organization, what placement in that publication do they typically get, how are they connected to other people, what are the topics that are in that tweet or that video or that article,” said Fisher. “We look at how all those things are related to one another.”

Fisher and his cofounders Lev Brie and Leland Maschmeyer had originally planned to launch River before the pandemic struck with a variety of social sharing features. However, as the pandemic hit and protests in the wake of George Floyd’s murder grew into a global movement, the team realized that both consumption and content sharing were evolving rapidly.

This led the team to rethink the sharing features inside River and ultimately build a standalone, separate app called Overflow.

Overflow allows users to post a selfie video alongside news content out to other social networks. Overflow has an editorially selected feed of content from users, but users can also put their videos on their Instagram Stories or TikTok.

With $10 million+ in funding, River is not currently planning any specific revenue models.

The team is made up of 12 people and Fisher says that a third of the team is “diverse,” but declined to specify the breakdown by gender and/or ethnicity.

Fisher has been building products for nearly ten years, most notably coming from Wander, which sold to Yahoo back in 2014.

When asked what he learned from Wander that carries into River, he said that it’s about building a product that fits into the gaps of already established user behavior and keeping things as simple as possible.

“Often, you start with a really overdetermined product and an attitude that ‘more is more’,” said Fisher. “What I’ve learned over the years is that a product is the average of its features and not the sum of its features. Incremental things actually detract from the experience. You want every feature to be a ’10’.”

Application security platform NeuraLegion announced today it has raised a $4.7 million seed round led by DNX Ventures, an enterprise-focused investment firm. The funding included participation from Fusion Fund, J-Ventures and Incubate Fund. The startup also announced the launch of a new self-serve, community version that allows developers to sign up on their own for the platform and start performing scans within a few minutes.

Based in Tel Aviv, Israel, NeuraLegion also has offices in San Francisco, London, and Mostar, Bosnia. It currently offers NexDAST for dynamic application security testing, and NexPLOIT to integrate application security into SDLC (software development life-cycle). It was launched last year by a founding team that includes chief executive Shoham Cohen, chief technology officer Bar Hofesh, chief scientist Art Linkov, and president and chief commercial officer Gadi Bashvitz.

When asked who NeuraLegion views as its closest competitors, Bashvitz said Invicti Security and WhiteHat Security. Both are known primarily for their static application security testing (SAST) solutions, which Bashvitz said complements DAST products like NeuraLegion’s.

“These are complementary solutions and in fact we have some information partnerships with some of these companies,” he said.

Where NeuraLegion differentiates from other application security solutions, however, is that it was created for specifically for developers, quality assurance and DevOps workers, so even though it can also be used by security professionals, it allows scans to be run much earlier in the development process than usual while lowering costs.

Bashvitz added that NeuraLegion is now used by thousands of developers through their organizations, but it is releasing its self-serve, community product to make its solutions more accessible to developers, who can sign up on their own, run their first scans and get results within fifteen minutes.

In a statement about the funding, DNX Ventures managing partner Hiro Rio Maeda said, “The DAST market has been long stalled without any innovative approaches. NeuraLegion’s next-generation platform introduces a new way of conducting robust testing in today’s modern CI/CD environment.”

Savana, a machine learning-based service that turns clinical notes into structured patient information for physicians and pharmacists, has raised $15 million to take its technology from Spain to the U.S., the company said.

The investment was led by Cathay Innovation with participation from the Spanish investment firm Seaya Ventures, which led the company’s previous round, and new investors like MACSF, a French insurance provider for doctors. 

The company has already processed 400 million electronic medical records in English, Spanish, German, and French.

Founded in Madrid in 2014, the company is relocating to New York and is already working with the world’s largest pharmaceutical companies and over 100 healthcare facilities.

“Our mission is to predict the occurrence of disease at the patient level. This focuses our resources on discovering new ways of providing medical knowledge almost in real time — which is more urgent than ever in the context of the pandemic,” said Savana chief executive Jorge Tello. “Healthcare challenges are increasingly global, and we know that the application of AI across health data at scale is essential to accelerate health science.”

Company co-founder and chief medical officer, Dr. Ignacio Hernandez Medrano, also emphasized that while the company is collecting hundreds of millions of electronic records, it’s doing its best to keep that information private.

“One of our main value propositions is that the information remains controlled by the hospital, with privacy guaranteed by the de-identification of patient data before we process it,” he said. 

 

The French and Dutch governments have signalled support for EU rules that can proactively intervene against so-called gatekeepers, aka “structuring platforms” or “large digital platforms with significant network effects acting as gatekeepers” — or, more colloquially, ‘big tech’.

They have also called for a single European body with enforcement powers over such platforms — and the ability to audit their algorithms.

Interventions should also be ‘case-by-case, flexible and proportionate’ in their view — with the pair suggesting regulatory authorities be empowered to “impose tailor-made remedies to a structuring platform”.

The position paper also voices support for access obligations — such as obligations to share data; provide interoperability; and/or proactively offer alternatives to users — as a potential intervention to ensure market openness, while cautioning of the need to properly investigate ‘pros and cons’ before such enforcement.

On sanctions for infringements, the French and Dutch ministers urge “significant enough” penalties that platforms are effectively deterred from breaking rules, i.e. rather than being able to factor them in as a line of business cost (as now).

“The level of these fines or other sanctions should be significant enough to ensure the effectiveness of the rules at stake by deterring the platform from breaking them. The requirement of an efficient and deterrent mechanism of sanctions is all the more important here since any breach of the rules would be likely to induce serious and irreversible harm,” they write. 

On enforcement, the paper calls for a single “European body” outfitted with “proper tools” — including “broad investigation, audit and monitoring powers, and the ability to audit algorithms” — to be entrusted with enforcing the new regulations. 

That would mark a step-change from the EU’s data protection framework (GDPR), where responsibility for enforcement is decentralized to a patchwork of under-resourced local/national data protection agencies. Critics maintain the pace of GDPR enforcement in complex, cross-border cases against big tech is too slow to be effective. A two-year review of the regulation by the Commission this summer also found a general lack of uniformly vigorous enforcement.

That stands as a warning signal to EU lawmakers shaping the next generation of digital regulations that very careful attention needs to be paid to ensuring effective enforcement.

Brendan Sweeney didn’t know anything about the restaurant business before he and his co-founders launched the Atlanta-based startup Popmenu.

What Sweeney did know was that it was nuts that while every other business was using incredible graphics, curated text, carefully crafted images and fancy videos to make their pitch to customers restaurants were — posting a text-based menu.

“It’s just crazy that restaurants present their inventory, which is their whole story, their whole selling proposition in plain text,” Sweeney said.

Popmenu, he company he co-founded with three former colleagues from software businesses around the Atlanta area (and which has closed on $17 million in new financing) offers a solution.

What the company’s software aims to do is keep customers on restaurant’s own online real estate by incorporating third party reviews, images, recommendations, and better descriptions into the webpages that it hosts for the culinary creators that use its service. “If you had all that information on a restaurant website it would probably reduce the need to bounce out so much,” Sweeney said.

Popmenu does more than just prettify webpages for the savory savants whose coding skills may not match their craft in the kitchen. The software also helps with social media management, emailing and, yes, even the all-important delivery services that have become vital in the time of a still-spreading pandemic.

It’s the pandemic that juiced the company’s growth, Sweeney said. “We saw ten years of trends in the first ten weeks of COVID-19,” he said. “A lot of people were unprepared for it.”

Sweeney and his co-founders Mike Gullo, Anthony Roy, and Justis Blasco had all worked together at either CareerBuilder or Commissions Inc. It was the experience at Commissions that actually gave Sweeney and his colleagues the idea to start Popmenu.

Where Commissions was about designing tools to help local real estate agents and brokers take some power back from the large online platforms that were eating their lunch, Popmenu is bringing the same tools for small businesses to restaurateurs.

“I got this playbook for helping small business with SAAS. [And we’re] helping restaurants take control back from Yelp and TripAdvisor,” said Sweeney.

Other companies around the country, like ChowNow out of Los Angeles, are trying to do something similar. But while ChowNow is focused on online ordering, Popmenu started with marketing and… well… making menus “pop”.

The company is going to use the new cash it raised to add services like on-premises contactless transactions and from there could have a connection from the front-of-the-house to the back-of-the-house operations and ordering and fulfillment services.

Existing investors like Base10 Partners and Felicis Ventures returned to finance the company’s Series B along with new lead investor Bedrock Capital. Popmenu has also received some celebrity financing in the form of a commitment from Mantis VC, the newly launched investment firm from the wildly popular Chainsmokers band.

Apparently, they wanted something just like this, according to Milan Koch of Mantis VC. “When Alex, Drew and I met the Popmenu team, it was obvious to us right away how much they really cared about restaurateurs,” Koch said in a statement. “Having close ties with owners and hospitality groups worldwide and knowing the unique challenges they face, we got excited about how Popmenu’s product could help impact their businesses in so many different ways.”

Popmenu sells its software for a monthly fee of $269 per-location.

“So many industries have experienced radically accelerated trends through the COVID crisis, probably none more so than the restaurant industry,” said Sweeney, in a statement. “They’ve embraced technology as key to weathering these challenging times. We are fired up to give them even more help attracting guests and reducing costs and complexity on the road to recovery.”

 

When Stripe announced earlier this year that it had picked up another $600 million in funding, it said one big reason for the funding was to expand its API-based payments services into more geographies. Today the company is coming good on that plan in the form of some M&A.

Stripe is acquiring Paystack, a startup out of Lagos, Nigeria that, like Stripe, provides a quick way to integrate payments services into an online or offline transaction by way of an API. (We and others have referred to it in the past as “the Stripe of Africa.”)

Paystack currently has around 60,000 customers, including small businesses, larger corporates, fintechs, educational institutions, and online betting companies, and the plan will be for it to continue operating independently, the companies said.

Terms of the deal are not being disclosed but sources close to it confirm that it’s over $200 million. That makes this the biggest startup acquisition to date to come out of Nigeria, as well as Stripe’s biggest acquisition to date anywhere. (Sendwave, acquired by WorldRemit in a $500 million deal in August, is based out of Kenya.)

It’s also a notable shift in Stripe’s strategy as it continues to mature: typically, it has only acquired smaller companies to expand its technology stack, rather than its global footprint.

The deal underscores two interesting points about Stripe, now valued at $36 billion and regularly tipped as an IPO candidate (note: it has never commented on those plans up to now). First is how it is doubling down on geographic expansion: even before this news, it had added 17 more countries to its platform in the last 18 months, along with progressive feature expansion. And second is how Stripe is putting a bet on the emerging markets of Africa specifically in the future of its own growth.

“There is enormous opportunity,” said Patrick Collison, Stripe’s co-founder and CEO, in an interview with TechCrunch. “In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050.”

For Paystack, the deal will give the company a lot more fuel (that is, investment) to build out further in Nigeria and expand to other markets, CEO Shola Akinlade said in an interview.

“Paystack was not for sale when Stripe approached us,” said Akinlade, who co-founded the company with Ezra Olubi (who is the CTO). “For us, it’s about the mission. I’m driven by the mission to accelerate payments on the continent, and I am convinced that Stripe will help us get there faster. It is a very natural move.”

Paystack had been on Stripe’s radar for some time prior to acquiring it. Like its US counterpart, the Nigerian startup went through Y Combinator — that was in 2016, and it was actually the first-ever startup out of Nigeria to get into the world-famous incubator. Then, in 2018, Stripe led an $8 million funding round for Paystack, with others participating including Visa and Tencent. (And for the record, Akinlade said that Visa and Tencent had not also approached it for acquisition. Both have been regular investors in startups on the continent.)

In the last several years, Stripe has made a number of investments into startups building technology or businesses in areas where Stripe has yet to move. This year, those investments have included backing an investment in universal checkout service Fast, and backing the Philippines-based payment platform PayMongo.

Collison said that while acquiring Paystack after investing in it was a big move for the company, people also shouldn’t read too much into it in terms of Stripe’s bigger acquisition policy.

“When we invest in startups we’re not trying to tie them up with complicated strategic investments,” Collison said. “We try to understand the broader ecosystem, and keep our eyes pointed outwards and see where we can help.”

That is to say, there are no plans to acquire other regional companies or other operations simply to expand Stripe’s footprint, with the interest in Paystack being about how well they’d built the company, not just where they are located.

“A lot of companies have been, let’s say, heavily influenced by Stripe,” Collison said, raising his eyebrows a little. “But with Paystack, clearly they’ve put a lot of original thinking into how to do things better. There are some details of Stripe that we consider mistakes, but we can see that Paystack ‘gets it,’ it’s clear from the site and from the product sensibilities, and that has nothing to do with them being in Africa or African.”

Stripe, with its business firmly in the world of digital transactions, already has a strong line in the detection and prevention of fraud and other financial crimes. It has developed an extensive platform of fraud protection tools, but even with that incidents can slip through the cracks. Just last month, Stripe was ordered to pay $120,000 in a case in Massachusetts after failing to protect users in a $15 million cryptocurrency scam.

Now, bringing on a business from Nigeria could give the company a different kind of risk exposure. Nigeria is the biggest economy in Africa, but it is also one of the more corrupt on the continent, according to research from Transparency International.

And related to that, it also has a very contentious approach to law and order. Nigeria has been embroiled in protests in the last week with demonstrators calling for the disbanding of the country’s Special Anti-Robbery Squad, after multiple accusations of brutality, including extrajudicial killings, extortion and torture. In fact, Stripe and Paystack postponed the original announcement in part because of the current situation in the country.

But while those troubles continue to be worked through (and hopefully eventually resolved, by way of government reform in response to demonstrators’ demands), Paystack’s acquisition is a notable foil to those themes. It points to how talented people in the region are identifying problems in the market and building technology to help fix them, as a way of improving how people can transact, and in turn, economic outcomes more generally.

The company got its start back when Akinlade, for fun (!) built a quick way of integrating a card transaction into a web page, and it was the simplicity of how it worked that spurred him and his co-founder to think of how to develop that into something others could use. That became the germination of the idea that eventually landed them at YC and in the scope of Stripe.

“We’re still very early in the Paystack payments ecosystem, which is super broken,” said Akinlade. The company today provides a payments API, and it makes revenue every time a transaction is made using it. He wouldn’t talk about what else is on Paystack’s radar, but when you consider Stripe’s own product trajectory as a template, there is a wide range of accounting, fraud, card, cash advance and other services to meet business needs that could be built around that to expand the business. “Most of what we will be building in Africa has not been built yet.”

Last month, at Disrupt, we interviewed another successful entrepreneur in the country, Tunde Kehinde, who wisely noted that more exits of promising startups — either by going public or getting acquired — will help lift up the whole ecosystem. In that regard, Stripe’s move is a vote of confidence not just for the potential of the region, but for those putting in the efforts to build tech and continue improving outcomes for everyone.

 

Uber said on Thursday it is working to hire 225 engineers in India, strengthening its tech team in the key overseas market months after it eliminated thousands of jobs globally.

The ride-hailing firm, which competes with Ola in India, said today it has hired Manikandan Thangarathnam, who spent nearly 13 years as a director of engineering at Amazon, to lead the company’s rider and platform engineering teams in Bangalore. (Last month, Uber announced it would hire 140 engineers in India. Today it said it was in the process of hiring an additional 85 engineers.)

The move comes as several high-profile engineers have left Uber India in recent months to join Google and Amazon among other tech giants. A senior engineer, who recently left Uber, told TechCrunch that many of his peers had lost confidence in Uber’s future prospects in the country.

Uber said its tech expansion plans in India were in line with its vision to make mobility and delivery “more accessible” and becoming the “backbone” of transportation in thousands of cities across the globe.

The company recently also hired Jayaram Valliyur as a senior director to lead its global finance technology team. Prior to this role, Jayaram, too, worked at Amazon, where he spent 14 years.

In July, news outlet The Information described Uber chief executive Dara Khosrowshahi’s plan to move engineering roles to India as a cost saving measure. The report said Khosrowshahi’s plan had sparked internal debates.

Thuan Pham, Uber’s longtime chief technology officer, who left the company earlier this year, reportedly cautioned that hiring more engineers so quickly in India would “require accepting lower-quality candidates.”

Uber and Ola both claim to be the No. 1 ride-hailing service in India. But Rajeev Misra, the chief of SoftBank Vision Fund which is a common investor in both the companies, said last month that Ola maintained a “small lead” over Uber in India.

Separated by a strait, the internet in Taiwan and mainland China are two different worlds. Even mainland tech giants Alibaba and Tencent have had little success entering the island, often running into regulatory hurdles.

Less than a year after Taobao launched on the island through an Alibaba-backed joint venture, the marketplace announced it will cease operations by the end of this year, the platform said in a notice to customers on Thursday.

The decision came two months after the Investment Commission under Taiwan’s Ministry of Economic Affairs ruled that Taobao Taiwan is a Chinese-controlled company and required the firm to either leave or re-register under a different corporate structure. Under Taiwanese law, Chinese investors must obtain permission from the government to directly or indirectly acquire a stake of more than 30% in any Taiwanese company.

Taobao Taiwan is owned and operated by British-registered Claddagh Venture Investment, which is 28.77% owned by Alibaba. Nonetheless, the investment regulator ruled that the one with de facto control over Taobao Taiwan is Alibaba, which has “veto power” over Claddagh’s board decisions.

The app is currently the most downloaded shopping app in the Taiwanese Google Play store, according to app tracking firm App Annie. Unexpectedly, the Chinese edition of Taobao comes in sixth in the iOS shopping category, where Shopee tops.

Taobao Taiwan is separate from Alibaba’s main marketplaces, which last boast 874 million mobile monthly users. Most of Alibaba’s shoppers are in mainland China, though customers in Hong Kong and Taiwan have long been able to shop on the Chinese Taobao app and have the goods imported to them with extra fees.

Taobao Taiwan, on the other hand, established to attract local vendors in a market of around 24 million people, competing with popular alternatives like Singapore-headquartered Shopee and the indigenous PChome 24.

This isn’t the first time Taobao has been hit by local law. In 2015, the authority ordered Taobao Taiwan, at the time set up by a Hong Kong entity of Alibaba, to leave because of its Chinese association. Even Shopee wasn’t exempt and was under investigation in 2017 for Tencent owned around 40% of its parent company Sea.

“We respect the decision by Claddagh,” an Alibaba representative said in a statement to TechCrunch. “Alibaba businesses are operating as normal in the Taiwan market, and we will continue to serve local consumers with quality products through our Taobao app.”

It’s unclear how Claddagh came to decide on its retreat rather than restructuring the joint venture. The firm has not responded to TechCrunch’s request for comment.

Menlo Ventures, the 44-year-old venture firm with offices in Menlo Park and San Francisco, is taking the wraps of its fifteenth early-stage fund today, a vehicle it closed with $500 million in capital commitments.

It’s the same amount that Menlo announced last year for a growth-stage fund, the second in the firm’s history.

We talked with managing director Venky Ganesan earlier this week about the new fund. It will not, notably, include longtime Menlo managing director Mark Siegel, who joined the firm 24 years ago after a business development stint at Netscape, and who — like peers Bill Gurley of Benchmark and Todd Chaffee of IVP — is now making room for some of the firm’s more recent additions.

Ganesan also said that Menlo, which invests in consumer, enterprise, frontier tech, and healthcare startups, might index a bit more on health-related bets, which is unsurprising but also interesting in an historical context.

Gilead Sciences was actually incubated at Menlo back in 1987, but the firm dropped its life sciences practice for roughly 20 years before resuscitating it in 2017, hiring Greg Yap as a partner to lead related investments. At the time, Yap’s mandate was to invest roughly 15% of the firm’s last, $450 million, early-stage fund into tech-driven life sciences, but Ganesan can imagine that even more of its new fund will be poured into tech-driven health and medical startups.

As for check sizes, Ganesan said that Menlo will continue to do the occasional seed round but that it’s far more focused on Series A and B deals, writing initial checks of between $8 million to $15 million at the Series A for a targeted 20% of each startup, and checks beginning at $12 million to $14 million at the Series B stage. (Its later-stage fund makes the bigger bets beyond that.)

Menlo has long counted Washington State as its anchor tenant, and this fund is no different, having secured a $125 million commitment from its investment board.

A newer investor, says Ganesan, is the State of New Mexico Investment Council, which is one of three new investors in the fund — all of which were introduced to Menlo through other investors, and all of which agreed to back the firm via Zoom.

Given the firm’s recent exits, institutional interest in the new fund isn’t surprising. Menlo led Uber’s Series B round back in 2011, and according to the firm, even before Uber’s IPO last year, Menlo had already earned $973 million — or a 93x return — on its $10.5 million investment by selling nearly half of its Uber stock to a syndicate led by SoftBank.

Another big win for the firm has been Roku, which makes a variety of digital media players for video streaming and went public in 2017. At the time, its shares traded at around $15 each; today its shares trade at $233 apiece.

Meanwhile, Menlo has active portfolio companies that also appear poised to produce returns for its investors. The consignment company Poshmark said late last month that it has confidentially submitted to securities regulators a draft registration statement for its IPO, for example. And Chime, a start-up that delivers banking services through mobile phone, closed a round of funding last month that valued the company at $14.5 billion.