Year: 2020

The right candidate to fill your job may not actually be looking for a job right now. HireSweet, which is part of Y Combinator’s current class of startups, is trying to help companies find exactly these candidates that are perfect for a job but not actively looking.

Like so many other recruiting platforms, the HireSweet team started working on an assessment tool but then realized that the problem companies were facing wasn’t really assessment, it was scouring the right candidates.

“So we moved a bit higher on the value chain and we moved to help companies source engineers,” HireSweet co-founder and CEO Robin Choy told me. “And what’s really interesting on the market is that most people are not actively looking for a job. StackOverflow’s figures show that 30% of candidates will move after applying to a position and 60% are open to new opportunities but never actively looking for a job.”

To recruit these candidates, companies first have to identify these passive candidates and then essentially apply to them, the same way a candidate would apply to a job. Traditionally, recruiters have been doing this manually, by looking at LinkedIn and GitHub — or by outsourcing this work to agencies.

What HireSweet is doing is automating this process. Its systems search the web for public profiles of potential job candidates, then send that info to employers. As Choy noted, though, this isn’t just about saving time. “Thanks to that massive [amount] of information, we’re able to detect patterns that a human would miss. So we do know, for instance, when somebody updates their LinkedIn resume or when there is a discrepancy between their LinkedIn resume and their GitHub activity, which proves that they may be interested in changing technologies,” he said.

The company promises significantly better accuracy, compared to competitors. Choy argues that some of its customers are seeing about 80% accuracy, which HireSweet defines as having an 80% contact rate for the candidates it shows. And while some of the company’s tech stack involves machine learning, a lot of it also still involved good-old regular expressions (after all, if a resume says somebody is a “freelancer,” there’s no need to build an algorithm that predicts that this person is indeed a freelancer).

HireSweet also takes a very hands-on approach with onboarding new customers. “We always get people on the phone with a company — Superhuman-style — because we want to really understand what the company is looking for,” Choy explained. “That’s also a very specific learning that we had in the last few years: public job descriptions are very rarely the actual job descriptions of the person they will be hiring. So we spent a lot of time talking to the company.”

Because virtually all companies already offer recruiting tools, HireSweet offers a number of integrations with these, and Choy tells me that team plans to expand on this to allow for more and deeper integrations.

HireSweet started working on this product about three and a half years ago and then raised about $1.5 million two and a half years ago. Today, the Paris -based company has 30 employees, and its customers now include the likes of BlaBlaCar, Dashlane and Nokia. After mostly focusing on the European market, the team is not working on expanding to the U.S. market, where it now has about 100 customers. This also meant adapting the system to the way U.S. companies recruit and how employees move between jobs, which changes quite a bit between countries. Choy noted that the team will likely focus its roadmap on the U.S. going forward and then bring those innovations to Europe over time.

In the world of venture capital, where trust between investors and founders is paramount to the success of both, investing in a company that competes with another startup in a firm’s portfolio is a no-no. Still, in a case that takes this understanding to a brow-raising extreme, Sequoia Capital has, for the first time in its history, revoked a term sheet offered to a company over a purported conflict of interest and, almost more shockingly, handed back over its board seat, its information rights, its shares and its full investment.

It wasn’t a small check. According to sources close to the situation, it just gave up $21 million.

Candidly, we’re still trying to piece together what we might be missing, but what we know so far: This morning, Finix, a payments infrastructure company that was founded four years ago in San Francisco, told its roughly 70 employees that Sequoia — which led the company’s $35 million Series B round in early winter — is parting ways with the startup.

The reason, Finix told employees: Sequoia concluded soon after issuing its check that Finix competes too directly with Stripe, the payments company that represents Sequoia’s biggest private company holding currently and that in turn counts Sequoia as its biggest investor.

As a result of Sequoia allowing Finix to keep its capital (thus materially strengthening Finix’s balance sheet), earlier backers in Finix — led by Inspired Capital of New York and including PSP Growth and others — have invested an additional $10 million in the company, which has now raised $65 million in capital altogether.

As part of the new arrangement, Penny Pritzker, who cofounded Inspired Capital and is the founder and chairman of PSP Partners, has joined the board of Finix.

Pritzker’s Inspired Capital cofounder, Alexa von Tobel, has meanwhile joined as a board observer.

On the one hand, Finix and its stakeholders can’t be happy to be losing Sequoia and the sheen associated with an investment from the firm. At the same time, having a former U.S. Secretary of Commerce join one’s board could go a long way in ensuring its continued momentum.

More obviously, who could complain $21 million in free money?

Well, who other than Sequoia’s investors, perhaps. Though we’d presume the firm won’t lose anyone’s financial support over this apparent flub given the outsize returns it has produced over the years, the entire situation is strange to say the least, and we’d guess that Sequoia’s limited partners — even if they stay silent — can’t be pleased about it.

For starters, it’s difficult to understand how Sequoia could have only realized after making the investment that Finix and Stripe compete on some level — and might do so increasingly over time.

Finix has told TechCrunch before that, unlike Stripe, it doesn’t think of itself as a payments company but rather a payment infrastructure company. Most notably, it likes to note that it doesn’t take a percentage of transaction fees but instead charges customers charges for a monthly software fee, along with a sliding fee associated with the number of payments they process. Yet Stripe has a product, Stripe Connect, that operates much the same way and has since its debut in 2013.

Indeed, while a source close to the situation suggests that Sequoia moved too quickly on this one (Finix was evidently seen as a hot ticket after a conference appearance last fall), all it would have taken was a few conversations with Stripe to conclude that the two companies are chasing after the same customers in some cases.

Asked about its due diligence process, Sequoia — which has never backed out of an announced deal before in its 48-year history —  declined to comment.

The firm instead sent us a statement by Pat Grady, the Sequoia partner behind the deal, that reads: “While we’d previously concluded that Finix was not a direct competitor to any existing portfolio companies, after making the investment we came across a variety of small data points that collectively painted a different picture of the market. This decision had nothing to do with Finix, and everything to do with Sequoia’s desire to honor our commitments. It is incredibly difficult to part ways with Richie, Sean, and their team at Finix. They are exceptional people and leaders, and their future is bright.”

A spokesperson for Stripe who was asked whether Stripe and Sequoia discussed its investment in Finix at any point, also declined to comment.

Beyond this somewhat baffling explanation, of course, is the investment itself. While Sequoia might have wanted to disentangle itself from Finix in the most painless possible way for both outfits, it’s hard to understand why it felt compelled to give away $21 million — money that institutions like Stanford and hospitals give to Sequoia to invest on their behalf.

It isn’t like Sequoia committed a crime. Surely, too, there were other alternatives. For example, it might have converted the capital to debt and enabled Finix to pay it back at a low — even zero — percent interest rate. It could have told Finix to keep a quarter — or even half —  of the capital as a kind of generous break-up fee.

While we’re still puzzling over this one, Finix suggests it has already moved on from the saga — and given its much stronger financial footing, it’s no wonder.

Asked about what went happened exactly, the company sent over a statement from its founder and CEO, Richie Serna, about its excitement about the future and the strengthened involvement of Inspired Capital. As for Sequoia, Serna’s statement says that, “While the changes to our relationship with Sequoia were unexpected, we’ve never been more fired up about the future of Finix and our position in the market. We appreciate Sequoia’s speed in dealing with this situation and respect their commitment to doing what’s right for their portfolio companies. They have been transparent and helpful throughout this process.”

A security researcher said he was forced to take down a blog post describing an apparent bug in Talkspace’s website that gave him a year’s subscription for free, after the company rejected his findings and sent the researcher a legal threat.

John Jackson said he was able to sign up to Talkspace, a popular therapy app, as if he were an employee at one of the companies whose health insurance plans covers Talkspace’s services. Some of these sign-up links are found in Google search results, some of which aren’t advertised on the company’s website.

But Jackson said he found little to no evidence that the sign-up page verifies that a user is eligible for the free year-long subscription.

Jackson tested his theory by creating an account. A month later, the account is still active, he said.

Talkspace does not offer a way for security researchers to submit bugs. With help from TechCrunch, the researcher contacted Talkspace to warn of the potential bug, fearing that malicious hackers or users could be abusing the system and claiming free therapy. But the company rejected the claims, telling Jackson that it has “multiple internal processes in place to protect against abuses,” without providing specifics.

Within hours of Jackson publishing his findings on his blog — which TechCrunch has seen — Talkspace sent Jackson a cease and desist letter, accusing the researcher of defaming Talkspace “by broadcasting untruths” in his blog post.

“In no instance would Talkspace charge an enterprise partner or a health plan for services rendered to a user not deemed eligible by that partner,” said the letter, signed and sent by Talkspace general counsel John Reilly.

“This letter is formal notice to cease and desist, as well as immediately retract such statements with clarification to your blatant and damaging misstatements,” said the letter. “Failure to do so will result in further and immediate legal action.”

When reached, Talkspace would not say on the record what its anti-fraud mechanisms are, or if or how many fraudulent incidents it has discovered, only that the sign-up program is “designed in collaboration with each partner based upon their individual objectives,” said Gil Margolin, Talkspace’s chief technical officer.

We’ve published the cease and desist letter. The letter did not address the technical claims made by Jackson in his blog post.

When reached, Talkspace spokesperson JoAnna Di Tullio deferred comment to Reilly, who repeated the claims from his letter, that the company is “well aware of how we structure our employer relationships and secure eligibility for our services,” and described Jackson’s blog post as “pure defamation” and “utterly untrue.”

Jackson’s case is just the latest example of security researchers facing legal threats for their work. Months ago, aerospace security researcher Chris Kubecka said she was threatened by Boeing after finding a security issue on a plane. Two security researchers were also prosecuted last year amid claims they overstepped the limits of their penetration test at an Iowa courthouse. The case was later dropped.

Many companies nowadays embrace security researchers by offering bug reporting programs, which reward or pay researchers for finding security flaws and other bugs that could otherwise go unreported and exploited by malicious hackers.

Other companies, like Dropbox, Mozilla and Tesla, go further by offering “safe harbor” provisions by promising not to take legal action against researchers who act in good faith.

Got a tip? You can send tips securely over Signal and WhatsApp to +1 646-755–8849.

Google VP Vint Cerf has voiced support for a single set of standards for Internet platforms to apply around political advertising.

Speaking to the UK parliament’s Democracy and Digital Technologies Committee today, the long time Googler — who has been chief Internet evangelist at the tech giant since 2005 — was asked about the targeting criteria it allows for political ads and whether he thinks there should be a common definition all platforms should apply.

“Your idea that there might be common criteria for political advertising I think has a certain merit to it,” he told the committee. “Because then we would see consistency of treatment — and that’s important because there are so many different platforms available for purposes of — not just advertising but political speech.”

“In the US we’ve already experienced the serious side effects of some of the abuse of these platforms and the ability to target specific audiences for purposes of inciting disagreement,” he added. “We should make it difficult for our platforms to be abused in that way.”

The committee had raised the point that Google and Facebook currently apply different criteria around political ads — also asking whether advertisers could use Google’s tools to target political issue ads at a particular geographical region, such as South Bend in Northern Indiana.

“I don’t think that criterion is allowed in our advertising system,” Cerf responded on that specific example. “I don’t think that we’re that refined, particularly in the political space… We have a small number of criteria that are permitted for targeting political ads.”

Last November Google announced limits on political microtargeting — saying it would limit the ability for advertisers to target political demographics, and also committing itself to take action against “demonstrably false claims.”

The move remains in stark contrast to Facebook which dug in at the start of this year — refusing to limit targeting criteria for political ads. Instead it trumpeted a few settings tweaks that it claimed would afford users more controls over ads. As we (and many others) warned at the time, such tweaks offer no meaningful way for Facebook users to prevent the company’s pervasive background profiling of their Internet activity from being repurposed as an attack surface to erode democracy.

Last year some of Facebook’s own staff also critcized its decision not to restrict politicians from lying in ads and called for it to limit the use of Custom Audiences — arguing microtargeting works against the public scrutiny that Facebook claims keeps politicians honest. However the company has held the line on refusing to apply limits to political ads — with the occasional exception.

The committee also asked Cerf if he has any concerns about online misinformation and disinformation emerging on platforms related to the novel coronavirus outbreak.

Cerf responded by saying he’s “very concerned about the abuse of the system and looking for ways to counter that”.

“I use our tools every single day. I don’t think I would survive without having the ability to search through the world wide web — get information — get answers. I exercise critical thinking as much as I can about the sources and the content. I am a very optimistic person with regard to the value of what’s been done so far. I am very concerned about the abuse of the system and looking for ways to counter that — and those ways may be mechanical but they also involve the ‘wet ware’ up here,” he said, gesturing at his head.

“So my position is this is all positive stuff but how do we preserve the value of what we defend against the abuse? … We’re human beings and we should try very hard to make our tools serve us and our society in a positive way.”

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

The world is a mess today. Everything that trades is down, and sentiment is in the toilet. Even Robinhood is undertaking its ritual downtime, ensuring that its userbase holds through the selloff. The unicorn’s inability to stay online could be viewed as feature instead of a bug. How? Because it prevents panic selling, we suppose.

On a more serious note, what is going to happen to startups during all of this? In honor of thinking out loud, I have a few guesses that I wanted to write down. As always, though, I want to hear from you. Email in if you have a prediction that’s worth sharing.¹ I might post a few later in the week.

For everyone in a hurry, here’s my set of guesses (details below): SaaS valuations retreat, but retain their premium; D2C’s problems multiply, but select players survive; customer acquisition costs (CAC) issues lessen as spend slows; venture totals slip materially in Q1 (never mind what you read on VC Twitter); Q1 IPOs are garbage and Q2 doesn’t get much better unless stocks return to highs.

Let’s dig into each in detail.

Predictions

When it comes to the space launch revolution, Peter Beck’s Rocket Lab is by far the fastest emerging contender in that crowded field of startups. It’s also one of the few space unicorns and backed by the who’s who of space investors, which is why we’re beyond delighted to announce that Beck will be joining us at our TC Sessions: Space event on June 25 in Los Angeles.

This is TechCrunch’s first big space show, and it’s shaping up to be very big indeed. We have already announced that Jim Bridenstine, the head of NASA, will be speaking, and we have confirmed and will announce shortly the two generals leading the United States Space Force (USSF)  and the USSF’s Space and Missile Systems Center (SMC). Together, they represent the biggest government budgets for space and are very publicly courted startups gain new capabilities and speed up deployment.  Many space startups — as well as many dual use technology companies — get their earliest contracts from government sources, a factor that makes the space category quite unique.

Peter Beck’s Rocket Lab is no exception. It’s dedicated small satellite launch capability has already placed in orbit payloads for DARPA, NASA, the NRO, the United States Air Force, as well as for commercial partners, from the world’s first and only private orbital launch range, located on New Zealand’s Māhia Peninsula. At TC Sessions: Space, Beck will discuss what it took to build Rocket Lab, which he started in 2006, and where he believes the new space economy will go from here. 

Join Beck and over 1,000 industry analysts, investors, and founders at the Sheraton Gateway Hotel in Los Angeles on June 25. Get your tickets today and save with our Early Bird rate. We even have special discounts for government and military employees and for students.

Interested in sponsoring, contact us here.

TechCrunch is mindful of the Covid-19 issue and its impact on live events. You can follow our updates here.

Spotify has been slowly rolling out a redesigned mobile app in small sections — first with an update to podcast pages, then to other parts of the experience. Today, the company is revamping the most critical part of the Spotify app: the Home screen. Now, when Spotify users launch the app, they’ll notice the new home screen greets them depending on what time of day it is with a “Good Morning,” “Good Afternoon,” or “Good Evening,” for example. But the screen’s content and recommendations will also change with the time time of day, Spotify says, and the content has also been better organized so you more easily jump back in or browse recommendations from the main page.

Before, Spotify’s home screen emphasized your listening history by putting things like your “Recently Played,” “Your Top Podcasts,” and “Your Heavy Rotation” at the top of the page.

Effectively, the update breaks up the app’s home screen into two main parts: familiar content on top and new or recommended content on the bottom half.

Now, the home screen reserves six spots underneath the daily greeting where you can pick back up with things like the podcast you stream every morning, your workout playlist, or the album you’ve been listening to on heavy rotation this week. This content will update as your day progresses to better match your activities and interests, based on prior behavior.

Beneath these six spots, the home page will display other things like your top podcasts, “made for you” playlists, recommendations for new discoveries based on your listening, and more.

The concept for the new home screen is similar to what Pandora recently rolled out with its personalized “For You” tab late last year. Like Spotify, Pandora’s tab also customizes the content displayed based on the time of day, in addition to the day of the week and other predictions it can make about a customer’s mood or potential activity, based on prior listening data.

Pandora’s revamp led to double the number of users engaging with the personalized page, compared with the old Browse experience, it says. Spotify, too, is likely hoping to see a similar bump in usage and engagement as users won’t have to dart around the app as much to find their favorite content or recommendations. That way, they’ll be able to start streaming more quickly after the app is launched, potentially leading to longer sessions and more discovery of new content.

Spotify to date has defined itself by its advanced personalization and recommendation technology, but its app hasn’t always been the easiest to use and navigate — especially in comparison to its top U.S. rival, Apple Music, which favors a simpler and cleaner look-and-feel. Its recent changes have tried to address this problem by making its various parts and pages easier to use.

Spotify says the updated home screen will roll out starting today to all global users with at least 30 days of listening history.

Investors using the trading app from Robinhood are once again locked out of trading as the app is down again.

The latest outage comes one week after an outage took down the app on what was one of the busiest trading days of the year.

In the aftermath of the outage, Robinhood founders said that they would compensate investors impacted by the outage on a case-by-case basis.

As we reported, Robinhood was offline from Monday at 6:30am Pacific to 11pm Pacific, then had another outage this morning from 6:30am Pacific until just before 9am Pacific.

Here’s how the company is compensating users for the earlier outage.

The $912 million-funded fintech giant said it would provide compensation to all customers of its Robinhood Gold premium subscription for borrowing money to trade plus access to Morningstar research reports, Nasdaq data, and bigger instant deposits. It’s offering them three months of service.

A month of Robinhood Gold costs $5 plus 5% yearly interest on borrowing above $1,000, charged daily. Before a pricing change, the flat fee per month could range as high as $200. However, compensated users will only get the $5 off per month, for a total of $15. That could seem woefully insufficient if Robinhood users missed out on buying back into stocks like Apple that went up over 9% on Monday. Robinhood is calling it a “first step”.

Impacted Robinhood users can contact the company here to ask for compensation. Below you can see the email Robinhood sent to customers late last night.

This story is developing.

TFLiving, looking to bring amenities to residential and commercial spaces, has today announced the close of a $4.8 million seed financing led by Camber Creek. Courtside Ventures, and other strategic investors, also participated in the round.

TFLiving uses technology to connect service providers, like massage therapists, yoga instructors and dog walkers, with property managers and their residents. The service allows residents to sign up for classes or services, as well as request other community events or services, directly from an app.

The most popular use case of the service is fitness, both classes and individual trainings, but TFLiving offers a relatively broad variety of services and experiences to residents at its 300 partnered properties.

Here’s how it works.

TFLiving signs partnerships with property managers of buildings that don’t currently offer amenities. After checking out the building, TFLiving determines if there is any under-utliized space in the building, such as a rooftop or a vacant unit, that could be repurposed for community classes.

After evaluating the space, TFLiving surveys residents and determines what they’re interested in via the app, which then serves up options from actual service providers on the service within the guidelines of the property manager’s financial guidelines.

One of the strengths of the business, according to founder and CEO Devin Wirt, is that the cost structure of the platform is highly customizable. Who pays is a question that can be answered by the property manager. If the building has a huge budget for community engagement and the property manager sees value in offering 5 classes/month and unlimited on-demand massage, they can choose to do so. The property manager can also grant TFLiving access to the building without paying a dime, passing on the full cost of the service to residents.

In most cases, property managers will foot the bill for community events, while residents pay for their own individual services like massage and dog walking.

Because TFLiving’s pricing is based on service and not calculated by number of units, the product can be priced at an affordable cost within the budget of the property and based on demand from the residents.

TFLiving also allows property managers to mark up the class or service and keep a cut of the profit. For example, if a property manager doesn’t have the budget for community classes or services, but doesn’t mind letting residents book individual personal training in the on-site gym, that property manager can mark up the cost of fitness classes by 20 percent and generate some revenue that could eventually go toward community events.

“One of the things that we stay pretty stringent on is just how far they’re able to market the prices,” said Wirt. “As a core mission of staying affordable to all asset classes, we understand that because we’re not paying a lease, we’re able to charge below market pricing. We still want to stay true to our core mission that we want to provide affordable services.”

Unlike ClassPass, which also connects service providers to users in the fitness space, TFLiving does not dynamically price its various classes and services based on popularity or quality. Fitness classes, for example, are always between $50 and $80, with geography being the main determining factor on specific price.

The company declined to share the revenue breakdown between the company and service providers, but noted that it varies by vertical and that service providers receive a majority of the revenue.

TFLiving currently has agreements with properties across 29 states, with contracts at over 800 properties, soon covering more than 200,000 units.

Wirt says that he sees the potential to implement TFLiving in commercial spaces as well, such as offices.

Moreover, TFLiving has worked on the tech side to be as useful, not necessarily as prominent, as possible. TFLiving integrates with a variety of property management platforms, from mobile doorman apps to platforms for paying rent to maintenance requests. Residents using those apps can request and book TFLiving amenities straight from those platforms.

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. (Here’s last week’s episode with Danny Crichton in which we took a look at the new Kleiner fund.)

This morning was more of the same. More COVID-19 bad news and stock market worry. But this weekend saw other, new issues, like a collapse in oil prices and record low yields in Treasuries. What happens when all U.S. government notes yield less than 1%? We’re about to find out.

For us this morning what matters is that COVID-19 is still spreading, the global stock markets are still falling, and domestic equities are about to get hit hard, if pre-market trading is any indication. Currently stocks are flashing about 5% losses as we write to you.

Skipping the show’s order, here’s what on our minds this morning:

• What happens to private market valuations now as the public market continues to reprice? When does sentiment shift?
• What happens when startups pull back spend and hunt for slower, but more efficient growth?
• Finally, what happens to all the companies looking to go public? Like Asana (more here), Procore (notes here), Accolade (our coverage), not to mention Postmates, DoorDash (read this), and Airbnb (more here). Currently, it looks like we could jet into Q2 2020 with two venture-backed, non-biotech IPOs under our belts.

Finally on the show, we did get to mention Seed rounds for Airmeet, Sama, and Vivoo. Those, at least, brought a little bit of optimism to the day.

More soon, and stay informed this week. It’s a good time to stay abreast of the news.