Year: 2020

In the wake of India’s decision to ban TikTok and other dozens of other Chinese apps over privacy concerns, Instagram has expanded its TikTok rival, known as Reels, in the region. The launch in India also comes only days after Facebook announced its standalone TikTok clone, Lasso, would be shutting down on July 10.

In addition to India, Instagram Reels is live in Brazil, and of recently, France and Germany. But an Instagram spokesperson hints the expansion may go even broader, without offering specific details.

“We’re planning to start testing an updated version of Reels in more countries,” a spokesperson told TechCrunch, when asked about the feature’s arrival in India. “Reels,” they added, “is a fun, creative way for people to both express themselves and be entertained.”

Unlike Lasso, which had been its own separate app, Reels has been designed to be a feature within Instagram itself. Reels allows users to create and post short, 15-second videos set to music or other audio, similar to TikTok. Also like TikTok, the feature offers a set of editing tools — like a countdown timer and those that adjust the video’s speed, for example — that aim to make it easier to record creative content. However, Instagram doesn’t have the same sort of two-tabbed, scrollable feed, like TikTok offers, just for watching Reels’ content.

Following the launch of Reels last year in Brazil, Instagram updated the feature based on user feedback. Users said they wanted a space to compile their Reels and watch those made by others. To address these concerns, Instagram moved Reels to a dedicated space on the user Profile page and now features Reels in its Explore section, if they’re published by a public account. That gives Reels the potential to go viral by catching the eye of Instagram users who don’t yet follow the creator’s account. (Before, Reels had been only available to Instagram Stories, which limited their exposure.)

Business Insider India was the first to report on Reels’ expansion in India, citing unnamed sources for the discovery.

The Reels launch is timely for a number of reasons. For starters, Facebook in June announced it had entered a global deal with Saregama, one of India’s largest music labels, which would allow it to license music for videos and other social experiences across both Facebook and Instagram. Facebook also has agreements with other Indian labels, including Yash Raj Films, Zee Music Company and T-Series. However, the addition of Saregama may have cleared the path for Reels to launch given the breadth of its content, which includes over 100,000 tracks like those from Indian music legends, plus Bollywood tunes, devotional music, ghazals, indipop and others.

But mainly, it’s ideal timing for Reels to come to India, given the country’s decision to ban TikTok.

The ban on Chinese apps knocked out TikTok from its largest overseas market, leaving a massive opportunity for Instagram to swoop in and pick up new users for Reels. Before its removal, TikTok had amassed more than 200 million users in India, which is a significant loss for the Beijing-headquared video app.

But Instagram is not without competition for those users. Reuters recently reported a surge in popularity for other Indian video-sharing apps, like Roposo, Chingari and Mitron, for example. Roposo even saw its user base jump by 22 million in the two days after India banned TikTok, the report noted.

Instagram didn’t indicate when Reels would launch in other key markets, like the U.S.

Sequoia Capital India on Monday announced it has secured $1.35 billion from LPs for two new funds in the country as the storied venture firm looks to ramp up its investments in the world’s second largest internet market and Southeast Asia and finance existing portfolio startups.

The two new funds — a $525M venture fund and a $825M growth fund — will help the venture firm, which already maintains a seed fund, more comprehensively serve the startup ecosystem, said Shailendra Singh, a managing director at Sequoia Capital India.

“A fundraise represents a massive responsibility to deliver attractive returns to Sequoia’s Limited Partners, the majority of which are non-profits, foundations and charities. We do this by partnering with outstanding founders who are building category defining companies,” he said.

Sequoia Capital India, which roped in former Google India head Rajan Anandan last year, made more than 50 investments last year, more than any firm in the country.

Top VC firms in India last year based on the number of investments they made

The firm, which began investing in India 14 years ago, closed its last fund, of $695 million, for India and Southeast Asia in 2018. That was its sixth fund for the region.

The VC firm has made several high-profile investments over the years, including in edtech giant Byju’s, which is now valued at $10.5 billion, Singapore e-commerce startup Zilingo, and fintech startup PineLabs, and Khatabook, which offers bookkeeping services to merchants. Last year, Sequoia Capital India sold most of its stake in budget hotel startup Oyo. 

The new funds from Sequoia comes as a time when several investors have lost appetite as the coronavirus pandemic disrupts businesses. The per capita income of Indians, which remains some of the lowest across the globe, has also not improved over the years.

More to follow…

This morning as the markets rally, shares of Lyft are up 3% while Uber shares are up 6%.

Why is Uber so far ahead of Lyft, its domestic ride-hailing rival that is suffering from the same economic impacts? It appears that investors are heartened that Uber has closed its Postmates acquisition after both firms danced around each other for some time, leading to all sorts of leaks that wound up being not coming true.

The Exchange is a daily look at startups and the private markets for Extra Crunch subscribers; use code EXCHANGE to get full access and take 25% off your subscription. 

This explains why Uber investors are excited about Uber’s Postmates buy; what about the smaller company is making Uber shares so buoyant? Let’s take a walk through the numbers this morning.

If we reexamine Uber Eats’ recent growth, contrast it to Ubers Rides’ own growth, mix in Eats’ profitability improvements along with Postmates’ own financial results, we can start to see why public investors might be heartened by the deal.

Afterward, we’ll toss in a note about how Postmates may provide Uber some narrative ammunition heading into earnings. This exercise should be fun, and a good break from our recent IPO coverage. Let’s get into the numbers.

Growth, losses

In case you are behind, Uber is buying Postmates for $2.65 billion in an all-cash deal. Uber estimated that it would issue around 84 million shares to pay for the transaction. At its share price as of the time of writing, the deal is worth $2.72 billion at Uber’s newer share price. For reference, that price tag is about 4.8% of Uber’s current-moment market cap.

To understand why Uber would spend nearly 5% of its worth to buy a smaller rival, let’s remind ourselves of the performance of the group that it will plug into, namely Uber Eats.

From Uber’s Q1 2020 financial reporting, the following chart will ground our exploration, showing how Eats has performed in recent quarters:

Via Uber’s financial reporting. Q1 2019 on the left, Q1 2020 on the right.

The much-anticipated addition of “Hamilton” seems to have paid off for Disney+. According to new data from app store analytics firm Apptopia, Disney’s streaming service saw a big jump in downloads over the July 4 holiday weekend in the U.S., following the worldwide debut of “Hamilton” on Friday, July 3rd. Between Friday and Sunday, that translated to over half a million new global downloads (513K+) for the Disney+ mobile app, excluding India and Japan. Some 266,084 of those downloads were in the U.S, the firm estimated.

These figures represent a 46.6% increase over the average seen during the previous four weekends in June (Friday through Sunday), Apptopia noted. But the numbers don’t include India or Japan as Disney+ is streamed via Hotstar in the former; and in the latter, via a partnership with NTT Docomo through an existing service that later transitioned to Disney+.

The download figures also represented a 72.4% increase over the four prior weekends in June, in the U.S, indicating that a significant amount of interest in “Hamilton,” not surprisingly — given its “founding fathers” subject matter — comes from U.S. subscribers.

Notably, these downloads represent paid subscribers, not free trial users, as Disney+ ended its free week-long trial offering back in June. 

Rival firm Sensor Tower estimates a slightly different “Hamilton”-related bump for Disney+. During the week of June 29 to July 5, downloads spiked 64% over the week prior, Yahoo reported.

Apptopia also founded that “Hamilton” represented the biggest content launch of all of 2020, so far, in terms of downloads. That means it also outpaced the streaming launch of “Frozen 2,” which arrived while consumers were under coronavirus lockdowns. It was also bigger than “Onward,” “Artemis Fowl,” and others, the firm found.

Image Credits: disney

Of course, mobile download numbers don’t provide a full picture of how many signed up just for “Hamilton.” Many of the new Disney+ subscribers likely only signed up via a TV app and have yet to download the mobile companion.

If Roku’s online channel store offered a “top charts” section with rankings, we would have another window into Disney+ popularity given its status of a top streaming device and TV maker in the U.S. But it’s worth pointing out that Roku’s user base has given the Disney+ app a 4.3-star rating across 1,55,006 total reviews. For comparison, Netflix has 3,675,383 reviews — which shows how quickly the still relatively new service Disney+ is gaining on the market leader.

In May, Disney announced its streaming service had grown from 33.5 million subscribers as of March 28 to 54.4 million Disney+ subscribers as of May 4.

The service appeals to those who follow Disney’s top brands like Star Wars and Marvel, for example, but it’s also found a lot of growth among families who now more than ever need content to keep kids entertained amid the coronavirus outbreak, which has limited families’ usual activities and kept kids indoors. And at the $6.99 per month price point (or $69.99/yr), it’s one of the more affordable streaming services available.

Facebook has confirmed it has suspended processing demands for user data from Hong Kong authorities following the introduction of a new Beijing-imposed national security law.

A spokesperson for the social networking giant told TechCrunch it will “pause” the processing of data demands until it can better understand the new national security law, “including formal human rights due diligence and consultations with human rights experts.” The spokesperson added: “We believe freedom of expression is a fundamental human right and support the right of people to express themselves without fear for their safety or other repercussions.”

Facebook said its suspension will also apply to WhatsApp, which it owns.

News of the suspension was first reported by The Wall Street Journal.

Tech giants have long seen Hong Kong as a friendly outpost in Asia as a semi-independent city nation state, albeit under the control of Beijing under its “one country, two systems” principles. Hong Kong has far greater freedoms from mainland China, where government surveillance and censorship is widespread.

But the new national security law, imposed unilaterally by the Chinese government on June 30, effectively undermines any protections Hong Kong nationals had. The law removes provisions for authorities to require a court order before it can demand data from internet companies, like Facebook.

One industry leader, who chairs the Hong Kong Internet Service Providers Association, said internet providers would have little choice but to comply with the new law.

The move is likely to put Facebook — and other tech giants that follow in its footsteps — on notice with Beijing, which already has sweeping bans against some Western tech giants, like Facebook and Twitter, on the mainland. WhatsApp is highly popular in Hong Kong, alongside Telegram and WeChat.

Facebook’s transparency report shows the social media giant received 384 demands for user data from Hong Kong authorities last year, the latter half of the year saw Facebook comply with fewer than half of all demands.

Messaging app Telegram also reportedly said Monday that it will no longer process data requests from Hong Kong authorities.

In the future, students might dismiss stories about weather-related school closures as folklore.

The COVID-19 pandemic compelled us to experiment with edtech, but it’s still unclear whether attending school virtually with a laptop at the kitchen table offers the same benefits as being in a classroom. One recent study found that only 27% of schools asked teachers to monitor student attendance and 37% were required to do 1:1 check-ins on an ongoing basis.

Can education in a post-pandemic world become more accessible, asynchronous and persistent? Or will our digital divide deepen existing inequities in our educational system?

To consider the issue, four TechCrunch staffers looked at the future of edtech and remote learning:

• Devin Coldewey
• Natasha Mascarenhas
• Alex Wilhelm
• Danny Crichton

Devin Coldewey: gaming will transform remote learning, but stigma must be addressed

When I was a kid, we played SimCity in computer class once we’d finished our typing lessons, five-paragraph essays and so on. I always thought I was pulling a fast one by zipping through the assignments and getting straight to building my city, but the truth is I was learning just as much with one as the other. The game fooled me into learning about city infrastructure, taxes and other civic concepts that I probably would have fallen asleep had I been reading about them.

As a preschool teacher I found myself on the other side of this phenomenon, finding ways to impart learning on my little charges without boring them — and they were easily bored. It was always better to learn by doing, but kids don’t do anything unless it’s fun.

The pandemic isn’t just affecting higher education; 4th-graders and middle school kids are being thrown for a loop as well — not to mention their teachers. Gaming has to be part of the solution.

Our education system has a sort of built-in fun-to-learning ratio that gets smaller as the years go on, because many of the tools we use to teach core concepts are dated and static. There are a few “edutainment” products if kids are lucky enough to have the iPads or laptops to use them on, but not enough, and they’re plainly of a lower order than the real games kids play all the time. When a kid’s hobby is playing something like Fortnite or Breath of the Wild, does an algebra worksheet dressed up like a 2002 Flash game really seem like anything more than work?

Educational games are stuck on the idea of adding fun to old methods of teaching instead of rethinking how learning can be accomplished outside of those methods. Yet the possibilities of teaching using remote presence and virtual worlds are staggering.

A simple and laudable example is Ubisoft’s educational mode, present in its last two Assassin’s Creed games set in ancient Egypt and classical Athens. For all that they came up short as AAA games, these astonishingly detailed sandboxes offer an entire college course’s worth of anthropology and history; in fact, a special non-violent mode exists just for exploring those aspects of the game.

Imagine telling a classroom full of 14-year-olds that their assignment was to play Assassin’s Creed for an hour a day, find something interesting, look it up and write a paragraph about it. Or build a functioning rocket in Kerbal Space Program. Or finish a set of puzzles in The Witness and list the hidden rules that govern them. Or work with three other kids to build a model of the school in Minecraft or Roblox .

Right now, that’s practically unthinkable (outside a few forward-thinking classrooms), partly because the culture around gaming is weird, toxic and few people take the medium seriously for educational purposes. But if remote learning is going to be part of K-12 education from now on — and we’d better plan for that — we need to meet kids where they are, not try to contort them into a mold cast a century ago.

It’s difficult to visualize because “real” games aren’t built for education except as a secondary consideration. But virtual worlds are becoming venues for more than competition, and embracing that from first principles, by involving educators and students to see what is needed and how those needs can be met, will be a fruitful path for the industry to pursue.

At Early Stage, the first event of its kind from TechCrunch, entrepreneurs will have the opportunity to learn from some of the greatest minds in the tech world across categories like fundraising, scaling, operations and marketing. Alongside these VCs, lawyers, growth marketers, operators and recruiters, we’ll also be hearing directly from entrepreneurs who have charted their own course.

One such entrepreneur is Mariam Naficy, founder and CEO of Minted. Naficy is an early trailblazer of the ecommerce and crowdsourcing spaces, and a serial entrepreneur to boot.

Minted started as a marketplace for unique paper stationary, all the way back in 2007. The vision was to build out a platform that crowdsourced incredible, unique design into a single marketplace, elevating beautiful products and amplifying independent designers. Today, Minted sells wall art, stationary and home goods, and also sources design for other retailers and brands.

Independent designers on the platform hail from all 50 states and more than 100 countries, and their products have made their way to more than 75 million homes worldwide. The company has raised nearly $300 million from investors Norwest Venture Partners, Benchmark, TCV, and Ridge Ventures.

At Early Stage, we’ll talk to Naficy about how she’s grown Minted over the years. From securing funding to using that funding, from scaling the community to scaling the team, everything is on the table.

Marketplaces are, historically speaking, incredibly hard to build, but Naficy is an expert on the subject. We’ll talk specifically about how to maintain that perfect balance between customer and creator all while growing at a rapid clip.

TC Early Stage (July 21 and 22) has so much to offer. The show will bring together 50+ experts across startup core competencies, such as fundraising, operations, and marketing. Cyan Bannister is set to explain how to get an investor to say yes to your startup. Asher Abramson will be sharing how to create growth assets for paid channels, lawyers James Alonso and Adam Zagaris will share how to draw up your first contracts, and Priti Choksi is hosting a session on how to get a company acquired rather than selling.

The two-day show features more than 50 sessions, but don’t worry; attendees will get access to the videos on demand for all of them. What’s more, most of the speakers, who happen to be investors, are participating in TechCrunch’s CrunchMatch, our platform that connects founders to investors based on shared interests. 

Here’s the fine print. Each of the 50+ breakout sessions is limited to around 100 attendees. We expect a lot more attendees, of course, so signups for each session are on a first-come, first-serve basis.

Buy your ticket today, and you can sign up for the breakouts we are announcing today, as well as those already published. Pass holders will also receive 24-hour advance notice before we announce the next batch. (And yes, you can “drop” a breakout session in favor of a new one, in the event there is a schedule conflict.)

Get your TC Early Stage pass today and jump into the inside track on the sessions we announced so far, as well as the ones to be published in the coming weeks.

Possible sponsor? Hit us up right here.

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

This is Equity Monday, our week-starting primer in which we go over the latest news, dig into the week ahead, talk about some neat funding rounds, and dive into the latest big news from the startup world. (You can follow the show on Twitter here, and myself here, if you are so inclined! Don’t forget to check out last Friday’s episode as well. All the cool kids are doing it.)

What a weekend! After some quiet, somewhat dull off-week periods, this weekend brought us twists and turns that were good fun. Most dealt with a possible Uber -Postmates tie up, so we wrote the show to talk about the transaction’s unconfirmed nature.

Then, it got confirmed. So, here’s the second edition of today’s Equity Monday, recast due to the deal’s official nature:

• Uber will buy Postmates for $2.65 billion in an all-stock transaction. Uber shares were up this morning ahead of the open on the wings of the rumor — wings that beat even harder after the deal was confirmed. Uber investors seem pleased, for now, that after losing out on GrubHub their company has managed to buy a smaller player. Doing so may give Uber more leverage over restaurants and drivers, and boost Uber’s H2 2020 revenue numbers that will still be impacted by COVID-19 and its resulting economic impacts.
• Q3 earnings don’t kick off for tech and other VC-backed companies for a bit, and heading into the week the public markets are up. Despite all the bad news. The inverse correlation between bad news (short-term, economic), and stock market gains is slowly moving from joke to sordid reality.
• This week we’re keeping tabs on US and Chinese economic data, the geopolitical situation in Hong Kong and the India-China border, and Q2 VC data as it comes out.
• We also dug into three funding rounds this morning, detailing Scalefast raising $22 million, DigniFi raising $14 million, and AirVet raising $14 million as well. More international rounds to come, we promise.

We wrapped this morning wondering if Postmates can provide a narrative boost to Uber, a company that isn’t going to have the best Q2 numbers in its history. With Postmates tucked under its arm going into the earnings call, Uber can double-down on its Uber Eats narrative, flash Postmates around the room, and promise that Rides data will get better as well.

Perhaps that would be enough?

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

This is Equity Monday, our week-starting primer in which we go over the latest news, dig into the week ahead, talk about some neat funding rounds, and dive into the latest big news from the startup world. (You can follow the show on Twitter here, and myself here, if you are so inclined! Don’t forget to check out last Friday’s episode as well. All the cool kids are doing it.)

What a weekend! After some quiet, somewhat dull off-week periods, this weekend brought us twists and turns that were good fun. Most dealt with a possible Uber -Postmates tie up, so we wrote the show to talk about the transaction’s unconfirmed nature.

Then, it got confirmed. So, here’s the second edition of today’s Equity Monday, recast due to the deal’s official nature:

• Uber will buy Postmates for $2.65 billion in an all-stock transaction. Uber shares were up this morning ahead of the open on the wings of the rumor — wings that beat even harder after the deal was confirmed. Uber investors seem pleased, for now, that after losing out on GrubHub their company has managed to buy a smaller player. Doing so may give Uber more leverage over restaurants and drivers, and boost Uber’s H2 2020 revenue numbers that will still be impacted by COVID-19 and its resulting economic impacts.
• Q3 earnings don’t kick off for tech and other VC-backed companies for a bit, and heading into the week the public markets are up. Despite all the bad news. The inverse correlation between bad news (short-term, economic), and stock market gains is slowly moving from joke to sordid reality.
• This week we’re keeping tabs on US and Chinese economic data, the geopolitical situation in Hong Kong and the India-China border, and Q2 VC data as it comes out.
• We also dug into three funding rounds this morning, detailing Scalefast raising $22 million, DigniFi raising $14 million, and AirVet raising $14 million as well. More international rounds to come, we promise.

We wrapped this morning wondering if Postmates can provide a narrative boost to Uber, a company that isn’t going to have the best Q2 numbers in its history. With Postmates tucked under its arm going into the earnings call, Uber can double-down on its Uber Eats narrative, flash Postmates around the room, and promise that Rides data will get better as well.

Perhaps that would be enough?

Competition continues to heat up in the food delivery wars. In the latest development, Uber today announced that it has acquired Postmates in a $2.65 billion, all-stock deal. It plans to run the business alongside its own food delivery business, Uber Eats and keep the Postmates running, it said, while merging operations at the back end.

The deal confirms reports that emerged last week, and got re-reported last night with more financial detail, that Postmates and Uber were in negotiations. That deal itself sprung up in the wake of Uber failing to acquire another competitor, Grubhub, which was instead acquired by Europe’s takeout behemoth Just Eat Takeaway for $7.3 billion.

“Uber and Postmates have long shared a belief that platforms like ours can power much more than just food delivery—they can be a hugely important part of local commerce and communities, all the more important during crises like COVID-19. As more people and more restaurants have come to use our services, Q2 bookings on Uber Eats are up more than 100 percent year on year. We’re thrilled to welcome Postmates to the Uber family as we innovate together to deliver better experiences for consumers, delivery people, and merchants across the country,” said Uber CEO Dara Khosrowshahi in a statement.

“Over the past eight years we have been focused on a single mission: enable anyone to have anything delivered to them on-demand. Joining forces with Uber will continue that mission as we continue to build Postmates while creating an even stronger platform that brings this mission to life for our customers. Uber and Postmates have been strong allies working together to advocate and create the best practices across our industry, especially for our couriers. Together we can ensure that as our industry continues to grow, it will do so for the benefit of everyone in the communities we serve,” said Postmates Co-Founder and CEO Bastian Lehmann in his statement.

The all-stock deal valuation that Uber is paying out is a slight bump on Postmates’ last valuation of $2.4 billion, which it reached in September 2019 on the back of a private equity round. But with the ‘money’ all in paper, it puts a lot of pressure both on Postmates and Uber to continue to deliver on growth — pun intended.

For Uber, Uber Eats has been one good news story amid what has otherwise been a very tough life as a publicly listed company. That predicament has taken on a more critical edge in recent months through the COVID-19 pandemic.

In its last quarterly earnings results, the Uber Eats business grew 52% and managed to somewhat offset a big decline in its ride-hailing revenues. In both cases, you can draw a line from the results to social distancing requirements that people have been following around the world: consumers have been staying home more and ordering take-out food to be delivered to them; and at the same time they have been staying away from shared, small spaces, such the ones that you might encounter in an Uber ride. However, with the boost at Uber Eats, the company lost $3 billion last quarter.

The trend of those numbers is one reason why Uber has been looking to expand its food delivery business. The other is the one that has been motivating the larger consolidation trend in food delivery, and that is the principle of economies of scale and how that plays out in terms of operational expenditures, with single drivers able to cover more restaurants and orders, and also the costs of operating the business.

The wider business model requires a lot of subsidising to grow, so taking out a competitor somewhat reduces that kind of costly competitive pressure. It doesn’t eradicate it completely, though: DoorDash, Grubhub (now supercharged with Just Eat Takeaway profits and financial muscle) are still around and will represent strong alternatives both for consumers and restaurants looking for delivery partners.

The public markets is a tough place to play out a growth story for a company that is still profoundly in the red like Uber. In that regard, it’s an ironic place for Postmates to land.

The latter had also been eyeing up a public listing, going so far as to confidentially file for an IPO in February 2019. “Choppy” market forces got the better of it, however, and it put off the plans. Although there were rumors even as recently as last week that the company was still considering this option, in retrospect, that was quite possibly a report planted and spun by those hoping to hedge a better deal out of Uber.