Investors seem to be taking a wait-and-see approach to the markets right now, after a bumpy evening where a Presidential tweet and commitment of economic support seemingly sent traders to smash buy buttons before realizing that there was no new substance behind Monday’s night moves.
Economies around the world are in for a rough ride as businesses shut down and social distancing measures take effect to limit the spread of the novel coronavirus, which is already a global pandemic and an epidemic in the US.
After their worst day of trading since 1987, stocks rose sharply in overnight trading. The pattern of shares falling sharply, followed by a rebound of sorts continues, then, as traders continue to look for signals amidst the global noise; how to value one promise of further government stimulus, for example, against more border shutdowns and bad corporate news is now daily labor.
But as stocks opened domestically, they did manage slight gains, a welcome sight after yesterday’s sharply negative trading. Here’s the morning report at the open:
Dow Jones Industrial Average: rose 314.81 to 20,503.33 for a gain of 1.56%
S&P 500: rose 52.91 to 2,439.04 for a gain of 2.22%
Nasdaq Composite: rose 147.45 to 7,052.05+147.45 for a gain of 2.14%
Even cryptocurrencies are seeing a bit of a comeback, though they, like stocks, remain depressed when compared to recent highs. Bitcoin, the most famous of all cryptos, as the distributed tokens are sometimes called, is off by about half.
The latest economic forecasts are bleak. Goldman Sachs expects a Q1 contraction of perhaps 5%, a shocking figure. Even more, per reporting, the bank sees it likely that the US will enter a recession. If you were waiting for the correction, this is it. We have now seen the end of the long-running bull cycle that brought companies like Dropbox and Airbnb and Slack and Zoom from little to nothing to giant-status. This is the downturn. A new generation of startups will soon be born that will lead the markets higher in the future. But, given the economic data we’re seeing, not yet.
The TechCrunch crew will keep tracking the public markets so long as they are fascinating. More on how select companies performed when the day closes.
Intelsat has tapped SpaceX for the launch of its Intelsat 40e spacecraft, a high-throughput communications satellite that will join the company’s existing geostationary network. The satellite is being built by Maxar, Intelsat announced last month, and will be carried to its target orbit by a Falcon 9 rocket using a flight-proven first stage booster.
Intelsat is a connectivity infrastructure company that operates a communications network providing video and broadband services globally. The Intelsat 40e satellite will specifically help serve customers in North and Central America.
SpaceX has provided launch services for Intelsat previously, flying its 35e satellite to orbit in 2017. That satellite is currently in operation, offering connectivity to customers across North and South America, as well as in Europe and Africa.
This next launch is set to take place in 2022, so not immediately, but it’s an important get and a valuable return client for SpaceX
Intelsat has tapped SpaceX for the launch of its Intelsat 40e spacecraft, a high-throughput communications satellite that will join the company’s existing geostationary network. The satellite is being built by Maxar, Intelsat announced last month, and will be carried to its target orbit by a Falcon 9 rocket using a flight-proven first stage booster.
Intelsat is a connectivity infrastructure company that operates a communications network providing video and broadband services globally. The Intelsat 40e satellite will specifically help serve customers in North and Central America.
SpaceX has provided launch services for Intelsat previously, flying its 35e satellite to orbit in 2017. That satellite is currently in operation, offering connectivity to customers across North and South America, as well as in Europe and Africa.
This next launch is set to take place in 2022, so not immediately, but it’s an important get and a valuable return client for SpaceX
Good morning friends, and welcome back to TechCrunch’s Equity Monday, a short-form audio hit to kickstart your week. Regular Equity episodes still drop Friday morning, so if you’ve listened to the show over the years, don’t worry — we’re not changing the main show.
Equity Monday is a day late this week as I was off yesterday, but it’s here today and what a mess the world is at the moment. That was a key theme of the show, but not the only thing that we mentioned. Here are some other bits of news that caught our eye:
AI startups are being snapped up at record rates, with a record-setting 231 deals in 2019. According to the same dataset, the Big Five were buy buying the most AI startups, along with Intel.
Looking ahead there’s little to anticipate aside from Tencent earnings. So, instead, meet Hourly, a neat company that just raised $7.2 million.
Hourly
Hourly provides a software solution for labor tracking and payroll processing, noting industries like construction, service, and light industry on its website. If a company has a workforce that gets paid by the hour (the company’s name is a tip-off), Hourly wants to help them keep tabs on the labor, and help them pay for it.
The startup charges for its tooling on a recurring basis, a regular setup for a modern software product delivered as a service. After paying some modest base prices, time tracking costs $8 per employee per month, while its payroll service costs a bit more at $10 per employee per month. According to Hourly CEO Tom Sagi, the company may bundle the two services in the future and offer a discount of perhaps 20% for companies that buy both.
Time tracking and payroll, however, aren’t the only ways that Hourly generates revenue.
Growth
Hourly also drives top line through its workers compensation insurance product, which it refers to as “powered by” itself and “backed by A rated carriers.” According to Sagi, the company currently generates about half its revenue from workers comp commissions.
That means that Hourly has a two-part SaaS business and a technology-powered insurance business. (Sagi detailed to TechCrunch the ins and outs of worker comp payments, employee classification and more; it’s reasonably complex, perhaps providing the startup with a moat of sorts.) If that sounds pretty impressive for a company that just put together $7.2 million, it is—at least compared to how much other startups seem to get done before a round of that size.
How did Hourly get so far with so little money? The firm bootstrapped, hiring engineers in Colombia — the firm now has 10 staffers in that country, but is headquartered out of Palo Alto — to reduce costs. Keeping its costs low let Hourly avoid outside capital—aside from things like family funding and credit cards—before today. And that means that for its external capital base, the company feels somewhat product mature.
That maturity is letting it bring on larger clients. According to Sagi, Hourly has been increasingly “appealing to larger companies,” which he clarified to mean firms with 20 people or more. Larger customers means larger contract values, which can mean faster growth.
What else?
Oh just the closing of the unicorn exit window for some time. Aside from distressed sales, what sort of company would want to exit in a time like this? More from the Equity crew soon, hang tight.
Last week, I talked with Mike Volpi, longtime Index Ventures partner and the former head of M&A at Cisco for many years before that. We originally planned to talk about Index and general market trends, and we did. The topics we discussed included whether self-driving technologies have attracted too much funding and the damage inflicted by SoftBank on its portfolio companies.
Still, few could have predicted how extraordinarily trying the week would be leading up to our interview. Little wonder we spent much of our time talking about who is likely to snap shut their checkbook first, and why, in some cases, the best thing to do now is to keep the money flowing.
We have parts of our conversation available in podcast form here; other pieces, including those not included in the podcast, follow. These excerpts have been lightly edited for length.
TechCrunch: Let’s talk first about Index. You closed your last funds in 2018 with $1.65 billion in capital commitments. Are you in the market again now?
Mike Volpi: We raise funds every three-ish years. So, at some point, yeah, we’ll be in the market again. [We are] not specifically at this point in time, but sooner or later we’ll raise another fund.
More broadly speaking — and because the market is tanking so badly as we speak — do LPs tend to snap their checkbooks shut as soon as trouble hits? What’s been your experience over the years?
Volkswagen CEO Herbert Diess this week announced plans to suspend production at European factories, over COVID-19 fears. The news will impact a number of prominent makes under the umbrella of the world’s largest car maker by sales.
Plants in Spain, Portugal and Italy will be suspended before the end of this week, with VW’s native Germany and other European countries getting ready to follow suit. Production suspension is expect to last two or three weeks, per Reuters. Of course, these number are always subject to flux, depending on how the remainder of the pandemic plays out.
“Given the present significant deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants,” Diess said, “production is to be suspended in the near future at factories operated by Group brands.”
A number of automakers have run into major supply issues, as China was the first country to be hit the outbreak. In many cases, however, production has begun to ramp back up, as authorities in the country had taken dramatic actions to stem the spread of the virus. As of earlier this week, some 31 of the 33 VW factories are up and running in the country.
Production continues at many U.S. plants, though executives are monitoring the situation and looking to adjust production schedules. Other automakers, including Fiat Chrysler, PSA Group and Renault announced the shut down of European plants earlier this week. In addition to issues of employee health and safety, travel restrictions have made it untenable for many factories to continue production.
It’s no secret I’m a fan of the reMarkable, a tablet with a paper-like display that’s focused on text and sketching rather than rich media and games. The sequel to the original, announced today, looks to make a good thing even better.
Designed for the creation and consumption of monochromatic content like long documents, ebooks, notes and sketches, the reMarkable set itself apart as a more minimalist alternative (or complement) to the likes of the iPad or Surface. The device was crowdfunded and has sold more than 100,000 units; meanwhile the company has grown and attracted a $15 million A round. One sees in retrospect that the money helped launch this successor.
The most obvious change is to the design. It has a bold asymmetrical look with a chrome band along the left side, indicating the tablet’s main use as an alternative to a paper notebook: Hold it with your left hand and write with your right. Sorry, lefties.
The new tablet is just 4.7 mm (0.19 in) thick, thinner than the iPad Pro and Sony’s competing Digital Paper tablets, both of which are 5.9 mm. Let’s be honest — at these levels of thinness it’s getting hard to tell the difference, but it’s an accomplishment nevertheless.
Probably the best thing about the original reMarkable, however, was how good it felt to write and draw on, and the company has spent the last few years improving that wherever they can. For one thing, the already very small delay of about 40 ms between touching the screen with the stylus and a line appearing has been nearly cut in half.
That’s an area where every milli-unit counts. The lag on a real pen and paper is zero, of course, and while the reMarkable was good, there was still a very slight lag, especially when making large gestures or lines. As ?????? explained to me:
The hardware to further push the latency down further did not exist, so we decided to invent the technology ourselves. We redesigned both the hardware and software architecture that controls the display through a completely new display controller that changes how the display itself is electrically controlled, down to the voltages and electrical currents applied in complex waveforms to each individual pixel, millions at a time. The result is a 20ms latency, smoother ink flow with less jitter, and a completely uncontested digital writing experience perfected.
I intend to investigate this myself once I get my hands on one of the new devices. The company worked with E Ink, the main manufacturer and investor in e-paper type displays, to accomplish the new display, which has the same specs as the previous one otherwise: 10.3 inches, monochrome, 1872×1404 resolution for 226 DPI.
Here’s the inevitable, yet well-executed, aspirational promo video:
The software running on the reMarkable has received several major updates since the product made its debut, adding things like handwriting recognition, a new interface, better performance and so on. But one of the most requested features is finally coming with the new device: saving articles from the web.
Unfortunately they didn’t answer my specific request of adding Pocket integration, deciding instead to roll their own with a Chrome plugin that sends a reformatted webpage to the device. Unfortunately I use Firefox, but I can make an exception for this.
The company is claiming a 3x boost to battery life, using the same 3000 mAh battery, based on performance improvements throughout and a more efficient (but more powerful) dual-core ARM processor. That means two weeks of use and 90 days of standby. This is welcome news, because frankly the battery life and power management on the last one were not great.
Lastly, the “Marker” itself is getting an upgrade I’ve desperately wanted since the first day I tried the tablet: an eraser. You could always erase by selecting that tool, of course, but now one of the tips of the stylus will activate it automatically, a feature borrowed from Wacom and accomplished in collaboration with them. Of course, the eraser-enabled “Marker Plus” costs $99, $50 more than the plain one. They both stick onto the tablet via magnet, though.
“We’ve worked closely with Wacom the last two years to create Marker Plus, the most beautiful pen we have ever made,” reMarkable co-founder and CEO Magnus Wanberg told TechCrunch. “In addition to premium materials and design, it features an end-cap eraser that works seamlessly with the reMarkable software. We’ve fined-tuned the eraser sensor in collaboration with Wacom’s engineering team to make sure it looks and feels like just a real eraser on paper.”
But overall you’re looking at a much cheaper package. The reMarkable, for all its merits, was not cheap at $700. The reMarkable 2 will sell for $399 if you pre-order, and comes with a Marker and a nice folio case. For anyone who was on the fence about the first one, the sequel may prove irresistible.
A new study published in science journal Nature Medicine (via Bloomberg) examines the case of a patient who contracted COVID-19 in Wuhan and fell ill in Melbourne, Australia could provide a more comprehensive view of how and why certain people react to the virus more seriously than others.
The patient’s case was described as a “mild-to-moderate” case, and while she was hospitalized, she was only treated with intravenous fluids to counter dehydration and didn’t receive any other drugs, nor did she require being put on a ventilator. Accordingly, her case was one of the less severe that required hospitalization, providing an opportunity for scientists to study in detail her body’s mostly positive immune response to the novel coronavirus.
Researchers from the Peter Doherty Institute for Infection and Immunity received the patient’s permission to participate in their research, along with a number of other subjects, and were able to collect blood samples that showed how her immune responses performed, and when they activated. The research showed that the patient started developing antibodies in the patient’s blood before her symptoms fully disappeared, and that they remained present at least seven days after the infection went away.
While this case alone won’t provide any definitive information without additional study and examination of other patients, it’s a promising step towards evaluating how healthcare professionals treating COVID-19 patients might be able to discover earlier which patients will end up with more severe symptoms, and which will develop milder cases. They could also inform the development of new medical interventions to ultimately reduce case severity, or help develop vaccines with maximum efficacy.
This research could also help us better understand how post-illness immunity works for COVID-19. With other coronaviruses, like the common cold and the flu, immunization is temporary, which is why we have a seasonal flu shot, for instance. We don’t yet know in great detail how immunity works for recovered COVID-19 patients, and this research could provide more insight into that.
Leading the round is new investor RTP Global and existing investor HV Holtzbrinck Ventures. Also participating is ABN AMRO Ventures and Berliner Volksbank Ventures, and Finleap (the fintech company builder that has a majority stake in Penta).
The new investment sees Alex Pavlov, Partner RTP Global, join Penta’s board, which also includes Barbod Namini, Partner at HV, and Michael Hock, CFO at Finleap.
Comments RTP Global’s Pavlov: “We are always searching for exceptional teams who are ready for the sprints, prepare for the marathons and have the tenacity to grow their business and disrupt their respective market. In Penta, we found all of that: a strong team, rapid growth and the mission of solving the problems of their SME customers by thinking outside the traditional banking frame”.
Headquartered in Berlin, with offices in Milan and Belgrade, Penta provides banking for small and medium-sized enterprises (SMEs). In April 2019, it was acquired by Finleap, the German company builder that co-founded and also owns a stake in banking platform solarisBank, of which Penta is a customer. Shortly after the deal went through, it was confirmed that Marko Wenthin, who previously co-founded solarisBank, had become Penta’s new CEO, replacing outgoing CEO and Penta co-founder Lav Odorović.
Most recently, the banking fintech partnered with BBVA-backed card reader company SumUp in a bid to attract more offline businesses, such as restaurants, craftsman, healthcare and architects. Businesses can order a SumUp Card Reader via Penta, and in doing so will save money on the initial SumUp setup fee and be able to seamlessly integrate SumUp-powered payments with their Penta account.
They also get access to the existing Penta features, such as being able to open a business banking account entirely digitally, issue multiple payment cards, grant limits and permissions per card for staff, facilitate expense management and integrate with popular accounting tools.
Uber has suspended its shared ‘Uber Pool’ class of rides, the company announced on Tuesday. The Uber Pool option would match up to three passengers together in one vehicle based on their destination, and Uber said in a statement from Uber Rides and Platform Vice President Andrew Macdonald that the company’s “goal is to help flatten the curve on community spread in the cities we serve” through suspension of the service.
This applies in the U.S. and Canada for now, and the company is evaluating enacting similar measures in other countries where pooled rides are an option. Meanwhile, regular Uber on-demand rides for individual bookings, as well a Uber Eats delivery services, will still be operating as before. Uber did institute a new persistent in-app message for its ride-hailing app for riders, however, labelled “Flatten the Curve” and advising users to “travel only if necessary,” and to “exercise caution for your safety and the safety of our community.”
Uber also announced that its Uber Eats program will waive the delivery fee for local restaurants in the U.S. and Canada, as well as allowing requests for food to be left at the doorstep by delivery couriers. It’s also committing to deliver over 300,000 meals to healthcare workers and first responders working on the front line of the epidemic.
In addition to these measures, Uber is also offering financial assistance to drivers on its platform t hat are infected by COVID-19 and put into quarantine by a public health authority, with a a payment structure based on the average earning of the driver over the past six months.
