Year: 2020

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

“Dear Sophie” columns are accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one or two-year subscription for 50% off.

Borders can’t stop germs. But borders will also never be able to stop ideas, or love, either.

Last night Trump tweeted that he will temporarily suspend immigration. I’m still waiting to review the text of the executive order, which at the time of this late writing, hasn’t been published yet. I expect significant litigation, as only Congress has the authority to cease immigration pursuant to the Immigration and Nationality Act. I’m hopeful that a court will issue a temporary restraining order in the near future.

We’re monitoring the situation closely and will continue to provide updates. Stay tuned, and be well. We all share this one Earth. We’ve got this. We’ll figure things out, one step at a time. Together.

Big hugs,
S

Dear Sophie:

We’ve decided to wind down our existing startup to move on to a new biotech opportunity. A co-founder is on H-1B and we sponsored an employee for a TN. How can we support both of them to stay in the U.S.?

— Winding Down in Woodside

Dear Winding Down,

It sounds like you’re handling the transition with grace. Every new experience teaches us what we want and what we don’t want, so I’m excited for all of you that you’ll be freeing yourselves to pursue new ideas. The fact that you care so much about your team makes you a strong leader. Your international colleagues will greatly appreciate your support as everybody transitions to new roles and new adventures.

Uber Eats customers have given $3 million in direct contributions to restaurants using a new feature on the app designed in response to the COVID-19 pandemic.

The milestone caps off a related campaign by Uber Eats to match up to $3 million in contributions made by customers. Uber Eats is sending its $3 million in matched funds to the National Restaurant Association’s Restaurant Employee Relief Fund. The company had previously donated $2 million to RERF.

The matching campaign has ended. However, the restaurant contribution feature, which was first rolled out in New York and is now in 20 countries, will continue.

The restaurant contribution feature was developed by a team of engineers in a flurry of activity over about seven days, according to Theresa Lim, who leads the restaurant product management team for Uber Eats.

“There was no executive who said ‘oh we need to build this feature, you all go build this now,” Lim said, adding that this was a grassroots effort prompted by the wave of restaurants that were forced to close regular dine-in eating due to the spread of COVID-19. Lim said Uber Eats users started reaching out to employees via LinkedIn, email and other means to ask how they could help restaurants.

“We started to see restaurants get impacted severely by this,” Lim said. “This was particularly true as the various states started implementing shelter-in-place or stay-at-home orders.”

The team had two primary concerns — beyond the basic backend operations — about the feature. They didn’t want it to cannibalize the amount of tips that users gave delivery workers, nor did they want it to cause customers to buy less from restaurants.

The team started to roll out the feature in a small area within New York City on April 1 to make sure tipping of delivery workers wasn’t impacted. The feature launched April 3 across the entire city and then expanded over the next week to the rest of the United States. The contribution feature is now live on the Uber Eats in 20 countries.

“We didn’t want to introduce anything that actually hurts restaurants,” Lim said. “It was important to make sure we weren’t introducing  friction into the experience that would cause a user to become impatient or displeased with the outcomes and maybe not actually finish their order.”

Those concerns didn’t bear out, according to data compiled since the app feature launched. Customers not only tipped more, they were also frequent users of Uber Eats.

Users who made restaurant contributions tipped their couriers 30% to 50% more than orders without a contribution, according to Uber. About 15% of Uber Eats customers in the U.S. who made a restaurant contribution were repeat contributors.

Data also shows that early dinner time, around 6 p.m., was the most generous time period, according to Lim. Dinner time, between 5 p.m. to 11 p.m., was the most popular for contributions, making up 60% of contribution dollars.

And certain foods, namely international cuisine, encouraged more contributions from users. French, Ethiopian, Argentinian and Thai restaurants had the highest contribution rates, according to Uber.

Some states were more generous than others. The top five most generous states, by percentage of active Uber Eats users who made at least one contribution, were Washington, Vermont, Montana, Connecticut, and South Carolina.

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

This morning we’re hunting up “green shoots” for software companies. Green shoots is financial slang for positive signals that could point to an economic recovery — or good news amidst a greater pullback. You can even use the term sarcastically, perhaps noting that unemployment claims, while still elevated to historic levels, are falling on a week-over-week basis: Only 2.5 million jobs lost last week! #greenshoots

You get the idea. But today we’re not joking. At the end trading yesterday, the Bessemer cloud index had recovered to around a 10% decline, in total, since the start of the COVID-19 era. Given that the same basket of cloud and SaaS companies was down as much as 37.9% at its 2020 low, its recovery has been little short of monstrous.

But there’s a bit more to dig into. This morning we’ve parsed a set of recent, fascinating survey data from Stifel, a wealth management and investment banking concern. The firm’s technology group asked a few hundred “tech executives, entrepreneurs, and investors” what they are seeing in the market regarding churn. There’s good news for software companies in the mix.

And we’ve pulled a grip of new data from Crunchbase to understand what we know about April’s venture capital market so far. It’s not bad news!

So, some positive vibes today, even if the markets are down. Let’s go!

Green Shoots

How bad SaaS churn will get during the present market downturn is not clear. TechCrunch has covered the issue, asking venture capitalists and doing various surveys of founders about what they are seeing in the market. The results are cautionary, with one survey indicating that three-quarters of founders expecting to see their net retention rates falling “by at least 3% and up to 20+.” That wasn’t a great sign.

The pandemic may feel all-encompassing at the moment, but Confluent announced a $250 million Series E today, showing that major investment continues in spite of the dire economic situation at the moment.

Today’s round follows last year’s $125 million Series D. At that point the company was valued a mere $2.5 billion. Investors obviously see a lot of potential here.

Coatue Management led the round with help from Altimeter Capital and Franklin Templeton. Existing investors Index Ventures and Sequoia Capital also participated. Today’s investment brings the total raised to $456 million.

The company is based on Apache Kafka, the open source streaming data project that emerged from LinkedIn in 2011. Confluent launched in 2014 and has gained steam, funding and gaudy valuations along the way.

CEO and co-founder Jay Kreps reports that growth continued last year when sales grew 100% over the previous year. A big part of that is the cloud product the company launched in 2017. It added a free tier last September, which feels pretty prescient right about now.

But the company isn’t making money giving stuff away, so much as attracting users, who can become customers at some point as they make their way through the sales funnel. The beauty of the cloud product is that you can buy by the sip.

The company has big plans for the product this year. Although Kreps was loath to go into detail, he says that there will be a series of changes coming up this year that will add significantly to the product’s capabilities.

“As part of this we’re going to have a major new set of capabilities for our cloud service, and for open source Kafka, and for our product that we’re going to announce every month for the rest of the year,” Kreps told TechCrunch. These will start rolling out the first week in May.

While he wouldn’t get specific, he says that it relates to the changing nature of cloud infrastructure deployment. “This whole infrastructure area is really evolving as it moves to the cloud. And so it has to become much, much more elastic and scalable as it really changes how it works. And we’re going to have announcements around what we think are the core capabilities of event streaming in the cloud,” he said.

While a round this big with a valuation this high and an institutional investor like Franklin Tempeton involved typically means an IPO could be the next step, Kreps was not ready to talk about that, except to say the company does plan to begin behaving in the cadence of a public company with a set of quarterly earnings, just not for public consumption yet.

The company was founded in 2014. It has 1000 employees and has plans to continue to hire and to expand the product. Kreps sees plenty of opportunity here in spite of the current economics.

“I don’t think you want to just turtle up and hang on to your existing customers and not expand if you’re in a market that’s really growing. What really got this round of investors excited is the fact that we’re onto something that has a huge market, and we want to continue to advance, even in these really weird uncertain times,” he said.

Alphabet-owned Loon, the high-altitude broadband connectivity company for hard-to-reach places, has launched the first balloons that will provide its first ever commercial connectivity services to Kenyans following the approval of its service deployment by the government of Kenya a couple of weeks ago. The balloons are now in testing, but pending the results of those tests, they’ll turn on service “in the coming weeks,” according to the company.

Loon is working with partner Telkom Kenya to provide services to that network’s subscribers in the country. Its balloons fly at a height of roughly 65,000 feet, in the Earth’s stratosphere, with the goal of providing stable, reliable and fast connectivity to a specific area without requiring satellites and with access for remote areas not served by ground cell tower infrastructure.

The Loon balloons actually have quite the journey to make to get to the area they’ll service in Kenya, taking off from either Puerto Rico or Nevada, as Loon CTO Sal Candido explains in a Medium post. From there, they navigate on air currents to make their way to their target destination, using “the fastest route that drifting on the stratospheric winds allow,” to traverse upwards of 6,800 miles through a somewhat circuitous route, which is determined by Loon’s automated navigation software.

Upon arrival in Kenya, those same machine learning powered-algorithms are used to help the balloons maintain a relatively stable position over the target coverage area. Balloons move up and down in the stratosphere to catch different air currents, taking short trips in a fixed geographic area to provide 24-hour coverage to customers on the ground.

Loon’s model and partnership with Telkom means that it can provide access through Telkom’s network to that company’s customers instantly once the system is tested and proven, but that also means Telkom sets the rates, which African internet accessibility startup BRCK has noted might be a barrier to some. Still, this first commercial deployment is a significant milestone for Loon, and should help make the case for more and more varied deployments to follow, including a range of different business model approaches.

Nintendo is selling a lot of Switches. The convertible console has been a lifesaver for people sheltering in place around the world. COVID-19-induced travel restrictions and the long-awaited arrival of Animal Crossing: New Horizons have proven to be a perfect storm for the three-year-old platform.

New numbers out from NPD this morning shed some light on just how good last month was for Nintendo. Switch sales more than double their numbers from March 2019, per the analyst firm. It was a March record for the console, which launched in March 2017. It was also the best first quarter unit sales for any gaming console since the company’s DS system, way back in 2010.

The arrival of Animal Crossing: New Horizons was no doubt a bit part of the sales bump. The latest addition to the popular sim series was both the the best selling game on any platform for March and had the third-best -selling launch month of any title in Nintendo’s history since NPD started tracking. Only Super Smash Bros. Ultimate and Super Smash Bros. Brawl (2018 and 2008, respectively) sold more physical units in their first month.

New Horizons is already the best selling title in Animal Crossing’s history, according to the firm. Both the timing of the title and its focus on social gaming play have been a huge boost to the game. It’s also been a hit with critics, currently sporting a 91% on Metacritic.

Stores have struggled to keep Switch units in stock amid a sharp bump in sales. Nintendo is reportedly boosting production of the system up by 10% in order to keep up with demand.

“If your kids aren’t sleeping, you aren’t sleeping,” says Moshi founder and CEO Ian Chambers.

As mindfulness apps grow increasingly popular among adults, Moshi is looking to bring mindfulness and meditative techniques to children. The app today announced the close of a $12 million Series B financing led by Accel, with participation from Latitude Ventures (the follow-on sister fund to LocalGlobe) and Triplepoint Capital. Bill Roedy, former MTV CEO, also participated in the round.

As part of the deal, Latitude Ventures’ Julia Hawkins will join the Moshi board.

Moshi was originally born out of Mind Candy, which was founded by Michael Acton Smith (founder and CEO of Calm) who created an online entertainment platform for kids called Moshi Monsters. In 2015, Smith stepped down as CEO to go build Calm, and Moshi CEO Ian Chambers stepped in, ultimately developing and launching Moshi in 2017. Mind Candy is now rebranding to Moshi.

Moshi is an app that helps kids sleep. The app offers close to 150 bits of original content, with 80 original 30-minute bedtime stories written and produced entirely by the company. Leading that charge is Steve Cleverley, the app’s Chief Creative Officer and Director of Dozing, a BAFTA-winning writer who authors, composes and produces each bit of content on the app.

Moshi’s bed time stories all follow a similar formula: verse (narration), chorus (song), and the underlying musical score. Each story is crafted with meticulous attention to detail. For example, one of the app’s most popular stories, “Mr. Snoodle’s Twilight Train” has the ‘chuga-chuga-choo-choo’ of train noise in the background throughout the story. That sound effect is timed up to the average resting heart rate of a child, purposefully lulling them into a restful place.

Moshi has also managed to get celebrities involved in the project, with narrations from Goldie Hawn and Sir Patrick Stewart, alongside other voice over actors.

The app offers parents the ability to create their own custom playlist or choose from a themed playlist within the app, such as ‘Busy Little Minds.’

Beyond sleep, Moshi is also offering mindfulness content to be used during the day, whether it’s for timeout or anxiety management or what have you.

Moshi offers a free one-week trial before charging USD$40 annually, with six pieces of content free for anyone.

The company has more than 100,000 subscribers, with 85 million stories played. Chambers told TechCrunch that 70 percent of all stories are completed.

Moshi plans to use the financing to launch new features and content in collaboration with sleep industry experts and scientists, as well as scaling up user acquisition through marketing, advertising and partnerships.

“The reason I get up in the morning to do this, and it sounds a bit cliche, but it’s the feedback,” said Chambers. “It’s the human stories of how we’re helping families to improve how they operate and having a positive impact on their health and wellbeing. That’s what excites us.”

In the time many of us live in now, we all know our online media consumption is — to state the obvious — going through the roof. Subsequently, the amount of data pertaining to online marketing is, equally, reaching stratospheric heights and in recent years tech companies like Datorama and Funnel.io, SuperMetrics and Adverity have appeared to give marketeers a data intelligence platform to deal with the welter of spreadsheets and reports necessary to track everything.

Last year, Vienna HQ’d Adverity closed an €11 million Series B funding round for its AI-driven platform to produce actionable insights in real-time for marketers.

Today it’s announcing a Series C financing round of $30 million, bringing the total amount it has raised to $50 million. The latest funding round is led by Valley-based Sapphire Ventures . Also participating is Mangrove Capital Partners, Felix Capital, SAP.iO and aws Gründerfonds who have all re-invested in this latest round. 

The Series C funding will be used to accelerate Adverity’s business growth, office network and R&D. Adverity’s clients include IKEA, Red Bull, Unilever, MediaCom and IPG Mediabrands.

Alexander Igelsböck, CEO and co-founder of Adverity, said in a statement: “Our platform plays a crucial role in helping enterprises become agile, empowering digital teams with intelligent insights. It is imperative we invest in evolving and developing new solutions, improving access and quality, and tackle the challenges of data complexity.”

Nino Marakovic, CEO and managing director at Sapphire Ventures commented that Adverity has “the opportunity to help all companies become more data-driven in their marketing.”

In an interview with TechCrunch, long-time Adverity investor Frederic Court of Felix Capital said: “We backed them as marketing is becoming a science with increasing complexity, we see this across all our consumer investments. Take Farfetch, where there is a dedicated team just for marketing. Adverity enables brands and ad agencies to aggregate their marketing data and extract intelligence automatically. I describe it as having a data scientist in a box, where a brand can understand its marketing data and get smart insights effortlessly. Their technology is very strong and their sales have taken off strongly.”

Speaking to this latest round of investment, he told me: “We were not fundraising but Sapphire was a very compelling partner. Post COVID-19, e-commerce is going to grow even faster (as we see with Shopify, Amazon and across our portfolio) and the company can benefit from this accelerated transition to e-commerce.”

LabCorp’s at-home COVID-19 test, which is called ‘Pixel,’ has received the first Emergency Use Authorization (EUA) for such a test missed by the U.S. Food and Drug Administration (FDA). The test is an at-home collection kit, which provides sample collection materials including a nasal swab to the user, who then uses the included shipping package to return the sample to a lab for testing.

Until now, the FDA has not authorized any at-home testing or sample collection kits for use, and in fact clarified its guidelines to specifically note that their use was not authorized under its guidelines when a number of startup companies debuted similar products for at-home collection and round-trip testing with labs already certified to run molecular RT-PCR tests to detect the presence of COVID-19.

The FDA notes that only LabCorp’s COVID-19 RT-PCR test has received this authorization, and that it still requires any such test to have an EUA before they can being offering services, whether or not the test is administered at home with the help of guidance from an authorized medical professional via telemedicine. Some labs facilitating at home serology tests using an exception in the FDA guidelines, but these are not viewed by the agency as tests that can confirm a case of COVID-19.

Opening up at-home testing (even via just sample collection, vs. full at-home test administration) is a big step in terms of a change in the way the agency has operated thus far. The FDA has recently updated its guidelines to note that it is working with at-home test providers to determine the best way to make those available to the public, since it “sees the public health value in expanding the availability of COVID-19 testing through safe and accurate tests that may include home collection.”

LabCorp is a U.S. medical diagnostics company with over 40 years of experience, including at-home testing via its Pixel line for colorectal cancer, diabetes, and cardiac lipid conditions. It seems like the FDA is favoring long-standing industry experience in terms of who it’s willing to open up authorizations for with at-home collection, which is likely due to the potential for increased error when you add unsupervised self-collection, packing and logistics into the mix.

Testing for COVID-19 in the U.S. currently relies on drive-through sites, as well as in-clinic and hospital testing. These tests have a high bar for access in terms of risk profile and symptom presentation, and their administration also exposes the healthcare professionals running them to risk of contracting the infection themselves. At-home testing could increase overall testing rates, while decreasing risk to frontline healthcare workers, providing a better picture of the true extent and depth of the COVID-19 pandemic.

Last week, Lightspeed Venture Partners announced that it had closed on $4.2 billion in new capital across three distinct funds — an $890 million early-stage venture fund, a $1.83 billion later-stage fund and a $1.5 billion “opportunity fund.”

With offices in the U.S., China, India, South East Asia, U.K. and Israel, the firm certainly has wide access to courting new deals in the midst of a crisis. The question is how easy it will be to source those deals.

Lightspeed partner Nicole Quinn joined the company in 2016 to help build out its consumer investment portfolio. Quinn’s investments include direct-to-consumer fashion company Rothy’s, celebrity shout-out platform Cameo, meditation app Calm and liquor company Haus.

I talked with Quinn last week about how her schedule is changing, who she’s talking to and where she is looking to invest next.

This conversation has been edited for length and clarity.

TechCrunch: What’s your schedule looking like these days? How much have things changed?

Nicole Quinn: My schedule has certainly changed; I’m spending much more time with portfolio companies. It’s thinking through uncharted waters and we’re thinking through all of these aspects because we’re encouraging them to make sure that they are in the strongest position they can be in. After that is making sure they have two years of runway, because who knows how long this is going to last — it’s pretty hard to model out a global pandemic.