Month: August 2021

We’ve all been there. (Or at least I have.)

You’re getting ready to vacate a property you’ve rented, only to be told by the landlord that you won’t be getting your security deposit back.

This happened to me the first time I ever rented a place in the late 90s. I was shocked, but more than anything, I was angry at the injustice because I knew that what the landlord claimed was not true. It was her word against mine and my roommate’s. Still, we took her to small claims court, not so much over the $800 she was trying to keep but more to prove her wrong. In the end, we won.

But it was a lot of work, and a lot of time spent. If only there was some kind of technology available to have helped us make our case.

Well, today there is. RentCheck, a startup that is out to help solve the “he said, she said” challenge in these situations with an automated property inspection platform, has recently raised $2.6 million in seed money.

Lydia Winkler and Marco Nelson started the company in mid-2019 after Winkler experienced a similar situation to mine and ended up suing her landlord in small claims court. She was working on getting her JD/MBA at Tulane University at the time.

“It was an injustice for me not to pursue it,” she told TechCrunch. “I took meticulous photos of the move-out condition of my apartment. The process took 18 months. But not everyone has the time or knowledge to fight in court.”

She then met Nelson, who had bought several properties that he ended up renting out. He had issues with security deposits too, but the opposite ones. He had to settle disputes over deposits, and found himself documenting properties’ condition at the time of move-out.

“I met Lydia and we realized we were passionate about the same problem,” Nelson recalled.

And so New Orleans-based RentCheck was born.

Image Credits: RentCheck; Co-founders Marco Nelson and Lydia Winkler

There are an estimated 48 million rental units in the U.S., with an average deposit of $1,000.

“A good chunk of that is being fought after on aggregate,” Winkler said. “And so many need that money to put down a deposit on another unit.”

To address the problem, RentCheck built a web app for property managers that they believe also benefits tenants. The company’s digital platform works by providing a way for property managers to facilitate and conduct remote, guided property inspections. For obvious reasons, the company saw increased demand upon the onset of the COVID-19 pandemic, considering that the platform was automated and contactless. It saw 1,000% — mostly organic — growth in terms of the number of properties on the platform.

“What we do is, using a guided inspection process, prompt users and guide them room by room, telling them exactly what to take photos of so that floors, ceilings, windows and walls are all accounted for,” Winkler said.

Everything is done within the app so that users can’t upload photos that were previously on their camera roll “to ensure the integrity of the inspection” and that  everything is time stamped. Once the inspection is complete, whoever does it signs off on it that they completed it accurately and honestly. Then the property manager can also sign off on it so both parties can agree on the move-out condition.

The company operates as a SaaS business, and charges property management companies a subscription fee based on the number of properties that they have on the RentCheck platform. They can then conduct “as many inspections as they want,” Nelson says, “whether the residents are doing them, their internal teams are doing them, or a third-party vendor, or a hybrid of the three.”

Image Credits: RentCheck/Bryce Ell Photography

The startup has attracted some large-name investors since its inception, first catching the attention of James “Jim” Coulter, the founder of TPG Capital, when the company won New Orleans Entrepreneurship Week. Coulter subsequently became one of the company’s first investors in its $1 million pre-seed round.

The company’s seed round included participation from Cox Enterprises, for its operations in the multifamily housing space, and angels such as Jim Payne, who previously sold MoPub to Twitter, and MAX to AppLovin; Ken Goldman, the former CFO of Yahoo, and who currently runs Hillspire, Eric and Wendy Schmidt’s family office; Mark Zaleski and John Kuolt of BCG Digital Ventures, and Brian Long, the founder of Attentive, who previously sold TapCommerce to Twitter. It also included institutional investors such as Irongrey, Context Ventures and Techstars. 

“What we love about RentCheck is that it’s using very clever technology to automate and solve arguably the industry’s biggest problem in terms of money and time for both property managers and tenants,” said Kuolt, former managing director at BCG Digital Ventures and an early RentCheck investor. “The deposit deduction issue needs a technology-based solution, and almost everyone, at some time, has felt like they’ve been screwed over on their deposit by a landlord. When you see and use RentCheck’s solution, it makes you think: ‘Why didn’t I think of this?’ ” 

Roku this morning announced an expansion of its original content lineup, with the addition of 23 new Roku Original programs that will debut on August 13 on The Roku Channel free streaming hub. The new programing — which also hails from Roku’s acquisition of failed streamer Quibi’s catalog — will supplement the initial slate of 30 originals which were first released in May. Among the new programs are four shows that had not yet gone live on Quibi’s service before Roku purchased the content catalog for its own originals business.

These unreleased programs include “Eye Candy,” a “Nailed It!”-like competition series hosted by Josh Groban and inspired by Japan’s “Sokkuri Sweets;” “Squeaky Clean,” a cleaning competition series hosted by Leslie Jordan; Season 2 of pay-it-forward reality show “Thanks a Million,” executive produced by Jennifer Lopez; and a ten-part docuseries “What Happens in Hollywood,” directed by Marina Zenovich, which details some of the industry’s most controversial secrets.

Other programs now arriving include: “&Music,” “The Andy Cohen Diaries,” “Benedict Men,” “Elba vs Block,” “Fierce Queens,” “Floored,” “Gone Mental with Lior,” “Mapleworth Murders,” “Memory Hole,” “Nice One!,” “Nikki Fre$h,” “Run this City,” “The Sauce,” “Sex Next Door,” “Singled Out,” “Skrrt with Offset,” “The Stranger,” “Survive,” and “Wireless.”

Roku had praised the performance of its original lineup during its second quarter earnings last week, saying the new catalog had demonstrated “good performance,” without sharing specific metrics.

The company also said it would continue to invest in originals, but downplayed the size of their role in its larger strategy for The Roku Channel, where original programming is a smaller fraction of the content Roku offers to its customers.

Noted Roku CEO Anthony Wood, The Roku Channel’s catalog consists mainly of content that comes from the licensing deals Roku strikes with various partners.

“It’s a portfolio approach and the originals are part of that portfolio,” he said. “The primary source of content is still licensing, but originals have benefits, as well. And as part of the portfolio, they’re a great addition,” Wood added. He also was careful to explain that the addition of originals wouldn’t have any impact on the gross margins related to The Roku Channel’s ad-supported video on demand (AVOD) business model. Instead, the expansion into originals, which has also included Roku’s purchase of “This Old House,” is more about user acquisition and its ad business.

“The other advantage of the originals is, of course, there’s a halo effect. So it’s helpful with the Upfronts, it’s helpful with our advertising business, and it’s helpful for bringing in new customers into The Roku Channel,” Wood said.

The company explained that originals drove more engagement among users, which then drove more advertisers — including new advertisers — and that gives Roku more money to invest in more content and further scale its business. Roku said that over 42% of its advertisers were first-time upfront advertisers with the company, which had a lot do with its ability to offer original programming on The Roku Channel.

Overall, however, Roku saw a mixed Q2. The company beat Wall St. expectations with earnings per share of $0.52 versus estimates of $0.13, and revenue of $645 million versus estimates of $618 million, but reported a decline in streaming hours. Roku said streaming hours decreased by 1 billion from the first quarter of 2021, but attributed this to the pandemic, as more people were leaving their homes for activities like dining, entertainment, and travel. Shares fell by over 8% after the earnings report, despite Roku reporting that streaming hours had grown year-over-year by 19% worldwide.

Back in December 2020 we covered the launch of a new kind of smartphone app-based search engine, Xayn.

“A search engine?!” I hear you say? Well, yes, because despite the convenience of modern search engines’ ability to tailor their search results to the individual, this user-tracking comes at the expense of privacy. This mass surveillance might be what improves Google’s search engine and Facebook’s ad targeting, to name just two examples, but it’s not very good for our privacy.

Internet users are admittedly able to switch to the US-based DuckDuckGo, or perhaps France’s Qwant, but what they gain in privacy, they often lose in user experience and the relevance of search results, through this lack of tailoring.

What Berlin-based Xayn has come up with is personalized, but a privacy-safe web search on smartphones, which replaces the cloud-based AI employed by Google et al with the innate AI in-built into modern smartphones. The result is that no data about you is uploaded to Xayn’s servers.

And this approach is not just for ‘privacy freaks’. Businesses that need search but don’t need Google’s dominant market position are increasingly attracted by this model.

And the evidence comes today with the new that Xayn has now raised almost $12 million in Series A funding led by the Japanese investors Global Brain and KDDI (a Japanese telecommunications operator), with participation from previous backers, including the Earlybird VC in Berlin. Xayn’s total financing now comes to more than $23 million to date.

It would appear that Xayn’s fusion of a search engine, a discovery feed, and a mobile browser has appealed to these Asian market players, particularly because Xayn can be built into OEM devices.

The result of the investment is that Xayn will now also focus on the Asian market, starting with Japan, as well as Europe.

Leif-Nissen Lundbæk, Co-Founder and CEO of Xayn said: “We proved with Xayn that you can have it all: great results through personalization, privacy by design through advanced technology, and a convenient user experience through clean design.”

He added: “In an industry in which selling data and delivering ads en masse are the norm, we choose to lead with privacy instead and put user satisfaction front and center.”

The funding comes as legislation such as the EU’s GDPR or California’s CCPA have both raised public awareness about personal data online.

Since its launch, Xayn says its app has been downloaded around 215,000 times worldwide, and a web version of its app is expected soon.

Over a call, Lundbæk expanded on the KDDI aspect of the fund-raising: “The partnership with KDDI means we will give users access to Xayn for free, while the corporate – such as KDDI – is the actual customer but gives our search engine away for free.”

The core features of Xayn include personalized search results; a personalized feed of the entire Internet which learns from their Tinder-like swipes, without collecting or sharing personal data;
an ad-free experience.  

Naoki Kamimeada, Partner at Global Brain Corporation said: “The market for private online search is growing, but Xayn is head and shoulders above everyone else because of the way they’re re-thinking how finding information online should be.”

Kazuhiko Chuman, Head of KDDI Open Innovation Fund, said: “This European discovery engine uniquely combines efficient AI with a privacy-protecting focus and a smooth user experience. At KDDI, we’re constantly on the lookout for companies that can shape the future with their expertise and technology. That’s why it was a perfect match for us.”

In addition to the three co-founders Leif-Nissen Lundbæk (Chief Executive Officer), Professor Michael Huth (Chief Research Officer), and Felix Hahmann (Chief Operations Officer), Dr Daniel von Heyl will come on board as Chief Financial Officer, Frank Pepermans will take on the role of Chief Technology Officer, and Michael Briggs will join as Chief Growth Officer.

The Chinese government’s crackdown on its domestic technology industry continues, with Tencent under fresh pressure despite the company’s efforts to follow changing regulatory expectations.

News broke over the weekend that Beijing filed a civil suit against Tencent “over claims its messaging-app WeChat’s Youth Mode does not comply with laws protecting minors,” per the BBC. And NetEase, a major Chinese technology company, will delay the IPO of its music arm in Hong Kong. Why? Uncertain regulations, per Reuters.

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The latest spate of bad news for China’s technology industry follows a raft of regulatory changes and actions by the nation’s government that have deleted an enormous quantity of equity value. After a period of relatively light-touch regulatory oversight, domestic Chinese technology companies have found themselves on defense after the Chinese Communist Party (CCP) came after their market power in antitrust terms — and some of their business operations from other perspectives. Sectors hit the hardest include fintech and edtech.

Gaming is also in the CCP crosshairs.

After state media criticized the gaming industry as providing the digital equivalent of drugs to the nation’s youth last week, shares of companies like Tencent and NetEase fell. Tencent owns Riot Games, makers of the popular “League of Legends” title. And NetEase generated $2.3 billion in gaming revenue out of total revenues of $3.1 billion in its most recent quarter.

NetEase stock traded around $110 per share in late July. It’s now worth around $90 per share after expectations shifted in light of the gaming news, indicating that investors are concerned about its future performance. Tencent’s Hong Kong-listed stock has also fallen, from HK$775.50 to HK$461.60 this morning.

Tencent tried to head off regulatory pressure, announcing changes to how it controls access to its games after the government’s shot across the bow. The effort doesn’t appear to have worked. That Tencent is being sued by the government despite its publicly announced changes implies that its proposed curbs to youth gaming were either insufficient or perhaps moot from the beginning.

When Oleg Stavitsky and his co-founders started Endel, they didn’t necessarily expect for it to become a venture-backed business with the likes of Amazon’s Alexa Fund as investors. Stavitsky and his founding team describe themselves as a “collective of imaginative creatives and artists,” and the group had previously developed a unique set of apps for children called Bubl that were designed to foster creative development and avoid the usual tropes of character-based kid-focused entertainment.

Endel is a wholly different project, delivering personalized soundscapes to its users that help them achieve states of focus, relaxation and sleep. These are tailored specifically to individual users, and have more in common with meditative exercises and other wellness techniques than with traditional music. And the company has attracted a lot of big-name attention, including a partnership with Grimes that originated when she reached out because she loved using the app and wanted to see if they could work together.

Oleg talks to us all about his experience building Endel, and what it’s like being part of a highly unconventional founder collective building a consumer tech startup outside of Silicon Valley.

We loved our time chatting with Oleg, and we hope you love yours listening to the episode. And of course, we’d love if you can subscribe to Found in Apple Podcasts, on Spotify, on Google Podcasts or in your podcast app of choice. Please leave us a review and let us know what you think, or send us direct feedback either on Twitter or via email at found@techcrunch.com, or leave us a voicemail at (510) 936-1618. And please join us again next week for our next featured founder.

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

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and me here.

It’s going to be a busy week, with a Samsung event and a host of earnings reports that we’ll have to pay attention to. But more important there are a few stories still dominating the news cycle:

• Apple’s privacy choices: The American hardware company’s plans to scan iPhones for some illegal material is once again raising the issue of privacy versus safety.
• China’s tech crackdown: The continued clampdown by regulators continued this weekend with Tencent once again under the spotlight.
• The American crypto regulatory push: This is still causing waves this morning as Congress works to pass a major bill that could include crypto regulations that are opposed by industry leaders.

All that and we also riffed on the Siemens-Sqills deal, Cornerstone OnDemand going private, and Delivery Hero buying a piece of Deliveroo.

And, for added flavor and fun, Canopy Servicing just raised a $15 million Series A, while Siga OT Solutions raised a $8.1 million Series B.

Amazon and parent of its top Indian seller Cloudtail have decided to not continue their joint venture after May 2022, the two firms said in a statement Monday, hours after India’s top court ruled that the American e-commerce firm and Walmart’s Flipkart must face antitrust investigations.

Billionaire N.R. Narayana Murthy’s Catamaran, the parent firm of Cloudtail, and Amazon launched the joint venture in the country in 2014. The joint venture had restructured its ownership in 2019 following India’s new regulations for e-commerce firms.

The development follows India’s Supreme Court ruling earlier in the day that Amazon and Flipkart must face antitrust investigations ordered against them in the country. The Indian watchdog — the Competition Commission of India — ordered an investigation into the firms last year for allegedly promoting select sellers (those in which they own a stake) on their e-commerce platforms and using business practices that stifle competition.

In a statement Monday, the two firms said Cloudtail — registered as Prione Business Services — enabled over 300,000 sellers and entrepreneurs to go online and provided 4 million merchants with digital payment capabilities. The joint venture, they said, helped merchants and small businesses access millions of customers in India.

“As our JV with Amazon reaches the end of its tenure, I reflect on this successful partnership that introduced the power of digitization and empowered hundreds of thousands of SMBs across big and small towns,” said M.D. Ranganath, President of Catamaran, in a statement.

Long-standing laws in India have constrained Amazon, which has yet to turn a profit in the country, and other e-commerce firms to not hold inventory or sell items directly to consumers. To bypass this, firms have operated through a maze of joint ventures with local companies that operate as inventory-holding firms.

India got around to fixing this loophole in late 2018 in a move that was widely seen as the biggest blowback to the American firm in the country at the time. Amazon and Walmart-owned Flipkart scrambled to delist hundreds of thousands of items from their stores and made their investments in affiliated firms way more indirect.

In June this year, India proposed even tougher e-commerce rules that, among other things, prohibits Amazon, Flipkart and other e-commerce players from running their in-house / private labels. The new proposal asks e-commerce firms to ensure that none of their related and associated parties are listed on their platforms as sellers for selling to customers directly.

“Amazon and Catamaran entered into a JV in the early days of e-commerce in India with a shared vision of transforming hundreds of thousands of small businesses in a fast-changing digital world, by providing online capabilities enabling them to access customers both in India and globally,” said Amit Agarwal, Global Senior VP and Country Head of Amazon India, in a statement.

Facebook has today announced that it has added two new destinations for when you want to move your data from the social network. In a blog post, the company said that users will be able to move their images to Photobucket and event listings to Google Calendar. Product Manager Hadi Michel said that the tool has been “completely rebuilt” to be “simpler and more intuitive,” giving people more clarity on what they can share to which platforms. In addition, users can now launch multiple transfers, with better fine-grain control on what they’re choosing to export in any one transfer.

This is yet another feature piled on to the Data Transfer Project, an open-source project developed by Google, Facebook and Microsoft. Facebook users can already send their photos to Google’s own image-storage service, as well as Dropbox, Blogger, Google Documents and WordPress. This is, in part, a way to address the long-in-progress ACCESS Act, which would enable users to transfer their data to any competing platform. Facebook says that it calls on government to “make clearer rules about who is responsible for protecting that data as it is transferred to different services.”

Editor’s note: This post originally appeared on Engadget.

Canopy Servicing announced this morning it recently closed a $15 million Series A. The startup sells software to fintechs and others, allowing customers to create loan programs and service the resulting products.

The company raised a $3.5 million seed round in 2020. Canaan led its Series A, with participation from Homebrew, Foundation and BoxGroup, among others. Per Canopy, its valuation grew by 5x from its seed round to its Series A.

The company has raised $18.5 million to date.

So far this reads much like any other post announcing a new startup funding round, kicking off with an array of information concerning the round and who chipped into the transaction. Next, we’d probably note the competitors, growth and what investors in the company in question have to say about their recent purchase. This morning, however, I want to riff a bit on the future of fintech and how the financial tech stack of the future may be built.

TechCrunch chatted with Canopy CEO Matt Bivons last week. He has an interesting take on where fintech is headed. Let’s discuss it and work through what Canopy does.

Canopy

As with many startups, Canopy was built to scratch an itch. Bivons had run into issues regarding loan servicing in prior jobs. He went on to found a startup that aimed to build a student credit card. But after working on that project, Bivons and co-founder Will Hanson pivoted the company to a B2B-focused concern building loan servicing technology.

Behind the decision was market research undertaken by the Canopy crew that uncovered that a great number of fintech startups wanted to get into the credit market. That makes sense; credit products can provide far more attractive economics to fintech startups than, say, checking and savings accounts. Knowing that loan servicing was a bear and a half to manage, Canopy decided to focus on it.

Bivons framed Canopy as a modern API for loan servicing that can be used to create and manage loans at any point in their lifecycle. He noted that what the startup is doing is akin to what several successful fintech companies have done, namely taking a piece of the fintech world and making it better for developers.

This is where Bivons’ view of the future of fintech products comes into play. According to the CEO, in the future, companies will not buy a monolithic financial technology stack. Instead, he thinks, they will buy the best API for each slice of the fintech world that they need to implement. This matters because we could argue that Canopy is targeting too small a product space. Not that its market isn’t large — debt and its servicing are massive problem spaces — but seeing a company find a niche to focus on makes more sense when its leaders expect focused fintech products to win out over large bundles of services.

Bivons added that much of the fintech focus of the last five years has been on debit, citing Chime, Step and Greenlight as examples. The next decade, he said, is going to focus on credit products. That would be good news for Canopy.

Canopy co-founders via the company. CTO Will Hanson (left) and CEO Matt Bivons (right).

Critically, and for the finance nerds out there, Bivons told TechCrunch that its loan servicing technology does not require the company to take on any credit risk, and that it has gross margins of around 90%. I never trust a too-round number, but the figure indicates that what Canopy has built could grow into an attractive business.

Today, Canopy is a traditional SaaS, though Bivons said that it wants to move toward usage-based pricing in time. Its service costs around 50 cents per account per month, or around $6 per year in its current form. Today, around 40% of Canopy’s customers are seed and Series A-scale startups, though Bivons noted that it is moving up the customer size chart over time.

The resulting growth is impressive. Canopy’s customer count grew 4.5x from February to May of 2021. Of course, Canopy is a young company, so its overall customer base could not have been massive at the start of the year. Still, that’s the sort of growth that makes investors sit up and pay attention, making the Canopy Series A somewhat unsurprising.

Fintech growth doesn’t seem to be slackening much, meaning that the market for what Canopy is selling should expand. Provided that its view that best-of-breed, more particular fintech products will beat larger stacks in the market, it could have an interesting trajectory ahead of it. And now that it has raised its Series A, we can start to annoy it with more concrete questions about its growth from here on out.

James Evans and his co-founders at CommandBar were working on a software product when they hit a wall while trying to access certain functionalities within the software.

That’s when the lightbulb moment happened and, in 2020, the team shifted to building a product search engine add-on to make software easier to use.

“We thought this paradigm feels like it could be useful, but it is hard to build well, so we built it,” Evans told TechCrunch.

On Monday, CommandBar emerged from beta and announced its $4.8 million seed round, led by Thrive Capital, with participation from Y Combinator, BoxGroup and a group of angel investors including, AngelList’s Naval Ravikant, Worklife Ventures’ Brianne Kimmel, StitchFix president Mike Smith and others.

CommandBar’s business-to-business tool, referred to as “command k,” was designed to make software simpler and faster to use. The technology is a search interface that sits on top of web-based apps so that users can access functionalities by searching simple keywords. It can also be used to boost new users with recommended prompts like referrals.

CommandBar in Clubhouse. Image Credits: CommandBar

Companies integrate CommandBar by pasting in a line of code and using configuration tools to quickly add commands relevant to their apps. The product was purposefully designed as low-code so that product and customer success teams can add configurations without relying on engineering support, Evans said.

Initially, it was a difficult sell: One of the more challenging parts in the early days of the company was helping customers and investors understand what CommandBar was doing.

“It was hard to describe over the phone, we had to try to get people on Zoom so they could see it,” he said. “It is easier now to sell the product because they can see it being used in an app. That is where many new users come from.”

CommandBar is already being used by companies like Clubhouse.io, Canix and Stacker that are serving hundreds of thousands of users. The most common use case for CommandBar so far is onboarding new software users.

He intends to use the new funding to grow the team, hiring across engineering, sales and marketing. The beta testing was successful in receiving good feedback from the early customers, and Evans wants to reflect that in new products and functionalities that will come out later this year.

Vince Hankes, an investor at Thrive Capital, was introduced to CommandBar through one of its pre-seed investors.

His interest is in B2B software companies and applications, and one of the things that became obvious to him while looking into the space was the natural tension between the simplicity and functionality of apps.

Apps are sometimes hard for even a power user to navigate, he said, but CommandBar makes something as simple as resetting a password easier by being able to search for that term and go right to that page if it is configured that way by the company.

“The types of companies interested in their product are impressive,” Hankes said. “We began to see demand from a broad range of companies that weren’t obvious. In fact, they are using CommandBar as a tool for deeper customer engagement.”