Year: 2020

The rise of the cloud over the past decade has forced software developers and DevOps engineers to completely rearchitect the modern web application, ensuring scalability, performance, and security. That’s a really painful proposition when done manually, which is where Hashicorp comes in to play. The company’s suite of products helps everyone in the tech workforce from IT admins to software developers operate in the cloud (mostly) effortlessly and natively.

The company’s products have long garnered rave reviews from technical staffs, and now the company is looking at a brand new massive valuation.

The SF-based startup announced today that it has raised $175 million in Series E financing from Franklin Templeton Investments at a scorching $5.1 billion valuation. For context, when we last covered the company back in late 2018, its valuation was only a “paltry” $1.9 billion following a $100 million round led by growth investor IVP.

The company in its release today touted its success in doubling revenues and customers every year for four straight years as the key reason behind the flush valuation. The company is making a (not so) subtle point that David McJannet, who joined the company as CEO in mid-2016 following a stint as an EIR at Greylock, has seen some success in his new role.

Hashicorp CEO David McJannet. Photo via Hashicorp

The company, founded by Mitchell Hashimoto and Armon Dadgar in 2012, is one of the major pioneers in helping companies build high-quality infrastructure that’s a mix of multi-cloud providers, private cloud, and even legacy systems.

It’s most well-known product is Terraform, which allows developers to write repeatable rules around enterprise infrastructure rather than a patchwork of different scripts that might not work as its writers intended. The idea is that with a consistent framework, Hashicorp’s product can help companies reduce costs (by protecting against, say, over-provisioning of resources) while also helping to balance scale and performance. The company’s other products include Consul around network automation, Vault for security, and Nomad for application deployment.

Hashicorp touches on a bunch of competitive products, but its cohesive set of tools and strong outreach to the developer community has set itself apart from the competition in recent years.

Franklin Templeton is a fairly late stage investor that has funded such enterprise companies as Cloudflare, which went public last year, logs management platform SumoLogic, and cybersecurity business Tanium, all according to Crunchbase.

With a hefty $5.1 billion valuation, the company narrowly missed the catastrophic decline of SaaS stocks over the past few weeks, which have been buffeted by the rapidly spreading global pandemic. But with a new war chest and a focus on a popular and growing enterprise market, the company seems poised to continue its growth.

Y Combinator’s Demo Day has historically drawn crowds of investors and journalists into a big warehouse to watch hundreds of startups come out to the public for the first time ever. Think two minute pitches, a big audience, and tons of networking opportunities after. 

This year, citing COVID-19 concerns, the accelerator canceled its in-person Demo Day and moved it to online-only, a week earlier than expected. You need to be pre-approved to access the list of companies, and more than 1,200 investors RSVPd. 

So while there won’t be the usual flurry of live tweets and on the ground reporting, TechCrunch caught up with YC CEO Michael Seibel to go the behind-the-scenes on this year’s batch, nonetheless. It’s Seibel’s second equity appearance, so we skipped the housekeeping and got right into the good stuff.

SAN FRANCISCO, CA – SEPTEMBER 07: Y Combinator Partner Michael Seibel speaks onstage during Day 3 of TechCrunch Disrupt SF 2018 at Moscone Center on September 7, 2018 in San Francisco, California. (Photo by Kimberly White/Getty Images for TechCrunch)

Click below to listen to a clip; you can hear the entire episode after the jump. 

Seibel got into how YC’s scrappiness led them to Demo Day’s new format and how investors weighed in on changes within the incubator. Other topics we got into include his advice for what companies are thinking about applying, and what in the world a YC post-mortem is.

Seibel, recalling his early days in startupland in 2006, also hinted at a sector he thinks might be making a comeback soon: software.

“Once people realize that getting software up and running and getting customers is faster and cheaper than almost any other startup idea, they’re going to rush to that. And so it’s going to be really exciting to see what people do on their nights and weekends and what products people start working on,” he said. 

TransferWise, the London-headquartered international money transfer service most recently valued by investors at $3.5 billion, has partnered with China’s Aliplay for international transfers.

The launch enables TransferWise’s now 7 million-plus users to be able to send Chinese yuan from 17 currencies to users of Alipay, which serves more than 1.2 billion people worldwide including via its local e-wallet partners.

Promising “instant” money transfers — under 20 seconds, apparently — TransferWise users simply need the recipient’s name and Alipay ID to initiate a money transfer. The money will then be sent to the bank account linked to the recipient’s Alipay profile.

It could be a potentially smart bit of business by TransferWise, which has sometimes struggled to secure the kind of partnerships that can accelerate its customer base and increase transaction volume. According to a 2019 report, the fintech is citing, China is projected to be one of the top remittance recipient countries in the world, with £54bn expected to be sent back home by Chinese expats and migrants living abroad.

“The partnership is a major expansion for TransferWise as it reaches a new, additional market of people managing their money via the Alipay platform,” says the company.

With that said, Alipay is the second meaningful partnership that TransferWise has announced in the last few months. In November, it joined forces with GoCardless, the London fintech that lets customers pay via recurring bank payments (known as Direct Debits in the U.K.). GoCardless is used by more than 50,000 businesses worldwide, spanning multinational corporations to SMBs, and the partnership sees its own FX functionality powered by TransferWise.

I’ll admit it: When it comes to food, I’m lazy.

There are dozens of great dining options within a few blocks of my home, yet I still end up ordering food through delivery apps four or five times per week. With the growing coronavirus pandemic closing restaurants and consumers self-isolating, it is likely we will see a spike in food delivery much like the 20% jump China reported during the peak of its crisis.

With the food delivery sector rocketing toward a projected $365 billion by the end of the decade, I’m clearly not the only one turning to delivery apps even before the pandemic hit. Thanks to technology (and VC funding) we can get a ride, laundry service, car wash and even booze or marijuana delivered to our home or office at the push of a button. And the implicit trade-off we all make as consumers is that we are willing to pay a little extra for the convenience of having things delivered to our doorstep.

But while consumers have signed on to pay a premium for convenience, the food delivery ecosystem suffers from a lack of differentiation, compounded by an opaque and confusing web of markups and fees. In their quest to achieve profitability, today’s leading food delivery apps have thus far focused their innovation around new ways to charge consumers for the same items instead of innovating on differentiated products or services. Aside from a handful of exclusive delivery partnerships with a few premium restaurants, consumers are instead faced with a delivery market where the services are virtually indistinguishable, yet the price they pay for exact same item from the exact same restaurant can vary by 20% or more depending on the app they use.

Over the past decade we have seen a new wave of industry-leading technology companies emerge by focusing on innovation in otherwise commoditized markets, from financial services to consumer products. Buying stocks? Ordering a razor? Getting a prescription filled? From Robinhood to Dollar Shave Club to PillPack and beyond, today’s leading consumer companies have won through innovation and pricing transparency.

Competition between delivery companies with billions in funding is fierce, and with so much of that capital going toward chasing top-line growth through promos, discounts and other give-aways, innovation on core product has fallen by the wayside. In spite of the billions already invested into the food delivery sector by venture capitalists and massive growth projected in the years ahead, we believe that the industry is still in its infancy, and remains ripe for innovation. The ultimate winners will be those companies that achieve profitability and market leadership through the delivery of not just food, but better products, better services and transparent pricing.

Food delivery: The pricing matrix

Earlier today, San Francisco Mayor London Breed announced a shelter-in-place order in an attempt to slow the spread of COVID-19. The order legally requires people to stay home as much as possible unless it’s essential that they leave to do things like go to the grocery store, buy gas or go to the pharmacy. So, no more going out to restaurants, gyms or nightclubs. Residents can, however, still order food for delivery from restaurants, as well as take Uber and Lyft rides, but “only for essential travel.”

That means workers for Postmates, Instacart, DoorDash, and UberEats are still on the hook for delivering food to people, and rideshare drivers transporting passengers are at risk of contracting the virus.

As some gig workers have advocated since the beginning of the year, it’s time for California to fully enforce gig worker protections law AB 5 to ensure all of these workers have access to paid sick leave, disability, family leave and unemployment insurance. Recently, Gig Workers Rising sent a letter to California Gov. Gavin Newsom and other state officials, asking them to step in and protect workers during this pandemic.

“We are demanding that state officials protect gig workers during the coronavirus pandemic by fully enforcing AB5 and ensuring workers have access to benefits like paid sick leave, disability, family leave and unemployment insurance,” rideshare driver and Gig Workers Rising member Steve Gregg wrote in the letter. “Over the next weeks and months, these actions will be the difference between who gets to live, who gets to keep their housing, who gets to eat, and who doesn’t.”

Gig economy companies have begun taking steps to help gig workers. Uber, for example, set up funds to support drivers who are infected or placed in quarantine by a public health authority. Instacart introduced a sick pay policy for in-store shoppers and extended pay for all shoppers, including independent contractors, who are affected by COVID-19. Similarly, Postmates has started offering two weeks of paid sick leave for people who test positive for the virus.

While these companies are able to subside some financial worries, these workers are still left without disability, family leave and unemployment insurance. Some workers are also without health insurance. Sure, these companies are not forcing people to keep driving and delivering food for them, but many people need the income in order to pay their rent or mortgages, and support their families.

“Sickness is not an option for me because not working is not an option,” rideshare driver and Gig Workers Rising member Edan A. said in a statement last week. “If I do get sick, I will have to continue to work or I will lose my ability to exist – it’s not just income. Before the coronavirus outbreak, I managed to pay my bills on a monthly basis, with no room for error. Here are the things at risk: paying rent, my car payment, my health insurance, and of course food. If I have to stop working without any safety net I would lose all of these things.”

An engineer from Charter, one of the largest phone and internet providers in the U.S., sent an email blast to a senior vice president and hundreds of engineers on Friday.

In the email, Nick Wheeler, a video operations engineer based in Denver, criticized his employer for not allowing its staff to work from home despite ongoing efforts to lock down vast swathes of the U.S. to combat the coronavirus pandemic.

The email was short. “I do not understand why we are still coming into the office as the COVID-19 pandemic surges around us,” he wrote.

“The CDC guidelines are clear. The CDPHE guidelines are clear. The WHO guidelines are clear. The science of social distancing is real. We have the complete ability to do our jobs entirely from home,” he wrote, reeling off the advice from several state and federal government departments and international health organizations. “Coming into the office now is pointlessly reckless. It’s also socially irresponsible. Charter, like the rest of us, should do what is necessary to help reduce the spread of coronavirus. Social distancing has a real slowing effect on the virus — that means lives can be saved.

“A hazard condition isn’t acceptable for the infrastructure beyond the short-term. Why is it acceptable for our health?” wrote Wheeler.

Hours later, he was no longer an employee.

Just a few minutes after Wheeler sent the email, he was summoned to a vice president’s office to a conference call with human resources. In a call with TechCrunch, Wheeler said his email was described as “irresponsible” and “inciting fear.” He said it was to understand why Charter had not implemented a work-from-home policy after the coronavirus outbreak was upgraded to a pandemic.

Wheeler said he was given an ultimatum. Either he could work from the office or take sick leave. Staff are not allowed to work from home, he was told. Wheeler offered his resignation, but was sent home instead and asked to think about his decision until Monday.

Later in the day, he received a call from work. Charter accepted his resignation, effective immediately.

Although Charter — and others — have pledged not to charge late fees or terminate its services to customers during the pandemic, employees are internally expressing frustration that their health and safety appear not to be a priority.

Wheeler is going on the record because he said it was unacceptable that Charter is, unlike other companies, not employing a work-from-home strategy in an effort to combat the spread of COVID-19.

Just on Monday, the San Francisco Bay Area was put on lockdown, and both New York and Denver — where Wheeler lives — announced the closure of bars and restaurants and the banning of public gatherings of more than 50 people to limit the virus’s spread. Shortly after, the White House said it is advising against gatherings of 10 people or more, and that Americans should continue to practice social distancing.

“If I can understand and do this at a human level, Charter should be able to do it at a larger level,” he said.

Cameron Blanchard, a spokesperson for Charter, said the company does not “discuss individual employee circumstances.” In a broader statement, Charter said it’s “continuing our normal operations” but that it’s “reviewing our business continuity plans daily as conditions are changing rapidly.”

Charter finds itself largely alone in mandating employees to work from its offices as its rivals push ahead with advising staff to work from home where possible.

AT&T said in its guidance that it’s asking employees “who are in jobs that can be done from home should do so until further notice.” Verizon, which owns TechCrunch, also said it’s encouraging employees to work remotely. Comcast is reportedly testing a number of work-from-home scenarios.

TechCrunch spoke to several Charter employees, who we are not naming as they fear retribution from the company. The employees said they had seen Wheeler’s email. One described the email as speaking what was already a “bubbling of concern” among employees.

The employees said that Charter’s leadership has long disallowed working from home, and that management decides on a case-by-case basis and only when they’ve seen a doctor’s note. The employees said that in absence of a work-from-home policy, employees are expected to burn through their sick leave.

Staff are given a week of sick leave a year, which accrues over time, but current government guidance is to self-quarantine for two weeks after symptoms subside, meaning some staff would have to take a portion of unpaid sick leave.

But Charter has shown little sign of backing down. In an all-staff email sent Saturday and seen by TechCrunch, Charter’s chief executive Tom Rutledge doubled down on the policy.

“You may have heard that some companies are instituting broad remote working policies for some of their employees. While we are preparing for that possibility by geography, Charter is not doing the same today,” said Rutledge. “We provide critical communications services and we believe our approach to supporting front line employees is the right way for us to operate at this time to continue to deliver those important services to our customers.”

The email said that the 15% of its employees who perform back office work and management are expected to continue coming into the offices.

“Stay home if you are sick, or caring for someone who is sick, but continue to report to your usual work location if you are not,” the email said. “While some back office and management functions can be performed remotely, they are more effective from the office,” said Rutledge.

One of the employees we spoke to described the email as “tone-deaf.”

The employees said two or three staff had been tested for coronavirus, according to internal emails from Charter’s human resources, but that their test results had not been disclosed, compounding their fears about having to continue to go into the office.

Wheeler is not alone in his concerns. At least two other emails allegedly sent by employees, which were posted anonymously to Reddit but TechCrunch is unable to verify their authenticity, criticized Charter for putting its employees “under harm and risk.”

One of the employees we spoke to agreed. “There’s no reason why the backend staff can’t be working from home,” they said.

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Former Coinbase chief legal officer Brian Brooks has been tapped as the chief operating officer and first deputy comptroller of the Office of the Comptroller of the Currency, beginning April 1, 2020.

In the role, Brooks will help the OCC in its mission of chartering, regulating and supervising national banks and federal savings associations, along with federal branches and agencies of foreign banks.

Specifically, the chief operating officer is involved with oversight of banking supervision policy, large bank supervision, midsize and community bank supervision, the office of innovation, supervision system and analytical support and systemic risk identification support and specialty supervision.

Nowhere in that word-salad does it mention bitcoin, but it’s likely that cryptocurrencies will be one area where Brooks will spend at least some of his time, given his previous job and areas of expertise.

“Brian Brooks is a strong leader with extensive experience in the financial services sector,” said Treasury Secretary Steven T. Mnuchin, in a statement. “I look forward to working with him to ensure the stability of our financial system and its ability to foster greater economic growth for the benefit of all Americans.”

Brooks served as the chief legal officer for Coinbase since September 2018, and previously served as executive vice president, general counsel and corporate secretary of Fannie Mae.

Three days after announcing plans to reduce theater attendance by 50%, Regal Cinemas announced that it will be closing all theater locations, effective March 17. The company announced the news via social media, noting that “All theatres will remain closed until further notice.”

The dramatic shift comes amid declining attendance over fears of the rapid spread of COVID-19. It also follows moves by a number of cities and states that have blocked large gatherings and all non-essential travel in order to encourage “social distancing.” The move was no doubt as much an attempt to protect public health as it is recognition that staying open simple isn’t feasible at the moment.

Regal currently operates 549 theaters, comprising 7,211 screens spread out over 42 States, American Samoa, the District of Columbia, Guam and Saipan, according to its site. The company has not announced whether it has any plans to help compensate employees, nor how it will handle users with an Unlimited Pass.

AMC last week announced its own reduced operations. We reached out to the company to see if it had any plans for a full shutdown amid all of the recent news. We’ll update when we hear something back.

Movie studios, meanwhile, are reconsidering their approach for films set for a theatrical release. Notably, NBCUniversal announced that it would be releasing films like “The Hunt,” “The Invisible Man” and “Emma” through on-demand services, in addition to theaters.

Rocket Lab is acquiring Sinclair Interplanetary, a manufacturer of spacecraft hardware based in Toronto that has provided hardware for more than 90 satellites sent to orbit to date, including AstroDigital, BlackSky, ALE and Rocket Lab itself. Sinclair also worked on The Planetary Society’s LightSail 2, which is an experimental spacecraft developed by a non-profit organization to demonstrate in-space propulsion using only the energy generated by the light of the Sun.

The acquisition will help bolster Rocket Lab’s own satellite division, which is responsible for making its Photon spacecraft line, introduced by the company last year. Photon is an extension of Rocket Lab’s available suite of mission services, which provides clients with small satellite ambitions to bring their own payload and have Rocket Lab handle the design, build and launch of their spacecraft.

Meanwhile, Sinclair will continue to offer its services to its customers, and Rocket Lab says it will even “bring additional resources to grow Sinclair’s already strong merchant spacecraft components business.” That means that clients like Kepler Communication, which is using Sinclair reaction wheels in its own constellation of small communications satellites, which it is launching to provide IoT communications.

Sinclair benefits from Rocket Lab’s resources, and Rocket Lab benefits by having one of the most trusted and experienced hardware component providers in the small satellite industry as an in-house advantage of using its satellite platform. It’s a win-win, and a smart union that should boost the business of both parties.

As governments across the country weigh whether to push non-essential public venues like gyms to close, more people are searching out expensive gear from Peloton .

The public markets are obviously seeing some pretty substantial swings in recent days, but newly public Peloton is proving more aptly positioned than other tech stocks. Today, the exercise brand saw a nearly 13% spike on the backs of a market where stocks cratered across the board. The NASDAQ dropped just over 12 percent today by comparison.

While trends toward social responsibility pushes more people to stay home as public institutions close temporarily, companies that are optimized for at-home experiences are unsurprisingly going to be seeing some growth during the next several months. The challenge will, of course, be to combat externalities while maintaining growth rates as the rest of the market — hopefully — recovers.

In an effort to onboard more customers, the company announced Monday that it was extending the free trial period of the company’s app from 30 days to 90 days in the US, UK and Canada. While many of the company’s live classes require their quite expensive hardware, the company also offers on-demand classes for exercises like yoga, cardio and meditation. Notably the company is maintaining the 30 day trial for its actually bike hardware.

Peloton has seen negative impacts as well, the company has shuttered its retail showrooms through the end of the month and announced that they were closing their live studios to the public. Live classes from the New York showroom were halted the first half of the week and scheduled to resume on Thursday.