Year: 2021

Ember today announced that founder Clay Alexander will transition to Group CEO effective February 16. In his place, the Los Angeles-based smart mug company is bringing on Jim Rowan as Consumer CEO. The executive served as CEO of Dyson from 2017 to 2020, after five years as COO.

It’s a big get for a relatively small company like Ember, which is best known for its smart, heated mugs. Founded in 2012, the hardware startup most recently raised a $20 million Series D in early 2019, bringing its total funding up to just shy of $50 million.

Alexander’s continued role at the company points to additional categories for Ember beyond consumer. “When I founded Ember, I knew there were endless applications for our temperature control technology and with Jim joining our team, we’ll be able to focus on our emerging healthcare vertical and use our technology to help improve and even save lives,” the exec said in a statement.

Courtesy of clever technology and smart design, the company has built a pretty sizable footprint for what might otherwise be a fairly niche product, expanding retail sales to Target, Costco, Best Buy and Starbucks, among others. The startup has done so while maintaining a low headcount of around 100 staffers.

“They have great IP, great design and great innovation, all around precise temperature control,” Rowan said in an interview with TechCrunch. “Obviously that started with the temperature control mugs and flasks, but that IP lends itself to so many other application. For me, that golden thread of being able to use that in myriad of different industries and markets is really, really exciting. One of them, of course, is the cold chain, which has become a lot more important since the beginning of the pandemic. That’s a good indication of how you can disrupt and innovate in new markets.

Rowan has previously served as the COO of BlackBerry and as a senior exec at Flextronics. After exiting Dyson, he joined both PCH International and KKR as an advisor. It’s Dyson, however, that provides the most direct analogy for what the executive hoping to do at Ember. At its core, Dyson is a company that moves air. That translates to vacuums, fans, hairdryers and myriad other product categories.

The underlying question is how Ember’s proprietary heating and cooling tech can translate to other fields. On an industrial level, it means, potentially, helping keep foodstuff and medicine at a predetermined temperate while shipping in the international cold chain. It also means additional consumer products built around the same underlying tech.

“There will be a lot more products that come out, beyond the current mugs and travel mugs,” Rowan says. “There’s a whole bunch of new products which are in the consumer pipeline and will launch in the next year or couple of years. And then you have the expansion into new geographies with existing products.”

That largely means Asia (Rowan will remain based in Singapore) and Europe. Thus far Ember’s footprint has been U.S.-centric, though a push toward online commerce amid the pandemic has helped expand it some. There does, however, remain a question of how high the ceiling is on adoption for a $130 electric smart mug. Ember has yet to release any actual numbers, and Rowan, whose experience at Dyson has more than familiarized him with selling premium products at a premium price point, isn’t ready to commit to a lower price point or less premium take on the space.

It’s worth noting, of course, that low end of the mug category is ready available at your local 99 cent store, and that’s not likely a space Ember is raring to compete in. And certainly those products — unlike its current lineup — likely wouldn’t end up in Apple Stores. Instead, it seems likely the company will continue a play as a premium consumer brand into additional categories at a more rapid pace. “The actual technology can expand into a whole bunch of new areas beyond just beverages because of the temperature control technology,” Rowan said.

Twitter and Square CEO Jack Dorsey and rapper Jay Z have created an endowment to fund bitcoin development initially in Africa and India, Dorsey said Friday.

The duo is putting 500 Bitcoin, which is currently worth $23.6 million, in the endowment called ₿trust. The fund will be set up as a blind irrevocable trust, Dorsey said, adding that the duo won’t be giving any direction to the team.

₿trust is looking to hire three board members. The mission of the fund is to “make bitcoin the internet’s currency,” a job application describes.

Governments in both Africa and India have so far been reluctant to embrace bitcoin and other cryptocurrencies. Friday’s move comes as New Delhi is inching closer to introduce a law that would ban private cryptocurrencies in the nation.

Dorsey has long supported the adoption of cryptocurrency. Square already supports Bitcoin and last year acquired about $50 million worth of bitcoin for its corporate treasury, and Twitter is studying the potential use of Bitcoin to pay its employees and vendors.

In an interview with CNBC earlier this week, Twitter Chief Financial Officer Ned Segal said, “We’ve done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in bitcoin, how we might pay a vendor if they ask to be [paid] in bitcoin and whether we need to have bitcoin on our balance sheet should that happen. It’s something we continue to study and look at, we want to be thoughtful about over time, but we haven’t made any changes yet.”

Many high-profile industry executives have called for nations to embrace Bitcoin. Balaji Srinivasan, an angel investor and entrepreneur who previously served as the Chief Technology Officer of Coinbase, earlier this month made a case for why India should embrace bitcoin.

“India has the talent to pull this off. Such a move would make international headlines, attract global support from the world’s technologists and financiers, differentiate India from the increasingly zero-sum economic policies pushed by America and China, and put the country at the forefront of a trillion dollar industry,” he wrote, envisioning the potential unblocking bitcoin would create for India.

Sweden’s data protection authority, the IMY, has fined the local police authority €250,000 ($300k+) for unlawful use of the controversial facial recognition software, Clearview AI, in breach of the country’s Criminal Data Act.

As part of the enforcement the police must conduct further training and education of staff in order to avoid any future processing of personal data in breach of data protection rules and regulations.

The authority has also been ordered to inform people whose personal data was sent to Clearview — when confidentiality rules allow it to do so, per the IMY.

Its investigation found that the police had used the facial recognition tool on a number of occasions and that several employees had used it without prior authorization.

Earlier this month Canadian privacy authorities found Clearview had breached local laws when it collected photos of people to plug into its facial recognition database without their knowledge or permission.

“IMY concludes that the Police has not fulfilled its obligations as a data controller on a number of accounts with regards to the use of Clearview AI. The Police has failed to implement sufficient organisational measures to ensure and be able to demonstrate that the processing of personal data in this case has been carried out in compliance with the Criminal Data Act. When using Clearview AI the Police has unlawfully processed biometric data for facial recognition as well as having failed to conduct a data protection impact assessment which this case of processing would require,” the Swedish data protection authority writes in a press release.

The IMY’s full decision can be found here (in Swedish).

“There are clearly defined rules and regulations on how the Police Authority may process personal data, especially for law enforcement purposes. It is the responsibility of the Police to ensure that employees are aware of those rules,” added Elena Mazzotti Pallard, legal advisor at IMY, in a statement.

The fine (SEK2.5M in local currency) was decided on the basis of an overall assessment, per the IMY, though it falls quite a way short of the maximum possible under Swedish law for the violations in question — which the watchdog notes would be SEK10M. (The authority’s decision notes that not knowing the rules or having inadequate procedures in place are not a reason to reduce a penalty fee so it’s not entirely clear why the police avoided a bigger fine.)

The data authority said it was not possible to determine what had happened to the data of the people whose photos the police authority had sent to Clearview — such as whether the company still stored the information. So it has also ordered the police to take steps to ensure Clearview deletes the data.

The IMY said it investigated the police’s use of the controversial technology following reports in local media.

Just over a year ago, US-based Clearview AI was revealed by the New York Times to have amassed a database of billions of photos of people’s faces — including by scraping public social media postings and harvesting people’s sensitive biometric data without individuals’ knowledge or consent.

European Union data protection law puts a high bar on the processing of special category data, such as biometrics.

Ad hoc use by police of a commercial facial recognition database — with seemingly zero attention paid to local data protection law — evidently does not meet that bar.

Last month it emerged that the Hamburg data protection authority had instigating proceedings against Clearview following a complaint by a German resident over consentless processing of his biometric data.

The Hamburg authority cited Article 9 (1) of the GDPR, which prohibits the processing of biometric data for the purpose of uniquely identifying a natural person, unless the individual has given explicit consent (or for a number of other narrow exceptions which it said had not been met) — thereby finding Clearview’s processing unlawful.

However the German authority only made a narrow order for the deletion of the individual complainant’s mathematical hash values (which represent the biometric profile).

It did not order deletion of the photos themselves. It also did not issue a pan-EU order banning the collection of any European resident’s photos as it could have done and as European privacy campaign group, noyb, had been pushing for.

noyb is encouraging all EU residents to use forms on Clearview AI’s website to ask the company for a copy of their data and ask it to delete any data it has on them, as well as to object to being included in its database. It also recommends that individuals who finds Clearview holds their data submit a complaint against the company with their local DPA.

European Union lawmakers are in the process of drawing up a risk-based framework to regulate applications of artificial intelligence — with draft legislation expected to be put forward this year although the Commission intends it to work in concert with data protections already baked into the EU’s General Data Protection Regulation (GDPR).

Earlier this month the controversial facial recognition company was ruled illegal by Canadian privacy authorities — who warned they would “pursue other actions” if the company does not follow recommendations that include stopping the collection of Canadians’ data and deleting all previously collected images.

Clearview said it had stopped providing its tech to Canadian customers last summer.

It is also facing a class action lawsuit in the U.S. citing Illinois’ biometric protection laws.

Last summer the UK and Australian data protection watchdogs announced a joint investigation into Clearview’s personal data handling practices. That probe is ongoing.

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

Natasha and Danny and Alex and Grace were all here to chat through the week’s biggest tech happenings. This week felt oddly comforting from a tech news perspective: Facebook is copying something, early-stage startup data is flawed enough to talk about and sweet DoorDash is buying robots for undisclosed sums.

So, here’s a rundown of the tech news we got into (as always, jokes aren’t previewed so you’ll have to listen to the actual show to get our critique and Award Winning Analysis*):

• Ethena raising $2 million more for corporate training that is not awful, and Zeta raising $1.5 million for couples’ banking. Natasha has been killing the early-stage beat lately.
• How seed data could be getting harder and harder to parse from Alex’s desk, and why VC data in general is dicey, from Danny’s. We discuss if directional data is useful, and why the limited numbers could have a cultural impact on signal.
• Reddit raises $250 million, but doesn’t tell us who the investors are and what the money is precisely going to. Still, the company has had quite a year so far, so the capital comes at an interesting time.
• Justo, an online grocery based in Mexico, raises $65 million as the pandemic continues to shake up the way we live and shop.
• DoorDash buys a salad robot, which brings Natasha nostalgia and Danny anger.
• The inverted SoftBank J-Curve thesis is a must-listen and read.
• And from the world of dating, a big M&A deal that caught our attention, and the latest from the Bumble IPO.

In good news, long-time Equity producer Chris Gates is back starting next week, which means we’ll have our biggest crew ever helping get the show put together. And, in other good news, there’s going to be more Equity than ever for you to hear. Coming soon.

Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

*OK, so not award-winning yet. But soon enough, because manifestation works.

The world has spent most of 2020 adapting to ever-changing guidelines and restrictions (with no end in sight, even as the vaccines start to roll out). Board meetings are quickly increasing in their significance to foster consistent and vital interactions as an organization. It’s essential for companies to capitalize on the essential time together during these uncertain times.

While we might look like the Brady Bunch while sharing a Zoom window, are you actually communicating more like the family from “Succession?”

Are your meetings organized? Do people talk over one another? Do you usually run over time? Are you giving people time to digest information?

As we move into 2021 and Q1 meetings are being put onto calendars, take some time to modernize how you conduct your board meetings.

Having served on public company boards, growth-stage businesses and Series A startups, an observation I have made in boards that are later stage are more about financial analysis and governance. Whereas earlier-stage board discussions hinge more on product strategy, key partnerships, sharing best practices to help develop founders as executives and important hiring decisions.

Since the nature of the discussions is more, let’s call it … creative in earlier-stage businesses, where the focus is on where they’ve been particularly impacted by reduced bandwidth for collaboration while meeting remotely.

As said best by Mike Maples and paraphrased by Jeff Bonforte — there are only four things a board really needs to consider:

• Has the market changed since we last met? If so, did it affect us negatively or positively?
• Has the team changed? For better or worse?
• Has our position in the market changed?
• Can we do what we said we would?

Collecting data around those points is the job. In the meeting, the team can add color.

Remember the board works for you, so be sure to put them to work. Sharing materials with participants about three days ahead of time tends to be the best. Any later and they may not get enough time to digest, send earlier and the information might be out of date by the time you meet. It’s most common to format as a deck, but lately I’m seeing more written format and even magazine-style.

The number one request I get from early-stage companies is “help find me more customers.”

Other common requests are “help me find or land this type of talent, help me with industry benchmarks for this type of business deal or compensation structure, connect me to people that have experience with X so I can learn ways we could structure our process.” It’s helpful to put these asks in the materials you send ahead because sometimes board members might not be able to react quickly and now “homework” comes up spontaneously in the discussions.

Another purpose of these meetings is to build working relationships so when strategic decisions need to be made, board members are used to working together. Sometimes it is a forum for executives to gain exposure to board members and for board members to have the opportunity to evaluate and provide input on executives. For that reason execs are often invited to participate in certain discussions.

Like the product person who presents a roadmap or a market analysis, the head of sales should give color on pipeline and competitive deals, the marketing person may lead a discussion on ABM or channel marketing tactics, the engineering lead might ask for feedback on their metrics versus other companies, etc. Generally, CEOs also bring forth an interesting topic to have a discussion, such as channel strategy, market mapping/sizing, hiring plan and related issues.

Logistics

As far as logistics, we reserve two hours in calendars but we try to hit 90 minutes. I suggest something like this for a 90-minute session:

Building off TechCrunch’s coverage of the recent 500 Startups demo day, we’re back today to talk about some favorites from three more accelerator classes. This time we’re digging into Techstars’ latest three accelerator classes.

What follows are four favorites from the Techstars’ Boston, Chicago and “workforce development” programs. As a team we tuned into the accelerator live pitches and dug into recordings when we needed to.

As always, these are just our favorites, but don’t just take our word for it. Dig into the pitches yourself, as there’s never a bad time to check out some super-early-stage startups.

Four favs from Techstars Boston

Everyday Life

• What: A platform that wants to make life insurance flexible and personalized.
• Why we like it: The insurtech wave, from auto insurance to home insurance, has underscored the need for more consumer-friendly plans. Life insurance still feels like an untapped part of the equation, and Everyday Life wants to use technology to make the process cheaper and simpler.
  The founding team says that there’s solid interest in life insurance amid the coronavirus pandemic, which amounts to a $20 billion market opportunity.
  
  

We take an in-depth look at TikTok usage in Russia, Facebook’s Oversight Board looks beyond Facebook and Sesame Workshop backs an edtech fund. This is your Daily Crunch for February 11, 2021.

The big story: TikTok becomes a political battleground in Russia

Russia has a small but fast-growing and vocal group of TikTok users. And while activity has been largely apolitical in the past, a battle appears to be brewing between the government and young activists who support the anti-corruption, anti-Putin politician Alexei Navalny.

“Before Navalny’s return, Russian TikTok was all about dancing, pranks and post-Soviet trash aesthetics,” said food blogger Egor Khodasevich. “All of a sudden, political videos have started to appear across all categories — humor, beauty, sport.”

The tech giants

Facebook Oversight Board says other social networks ‘welcome to join’ if project succeeds — The Facebook Oversight Board has only been operational for a short time, but the nascent project is already looking ahead.

Apple launches a new AR experience tied to ‘For All Mankind’ — Even for those of you who aren’t fans of the Apple TV+ show, the app is still noteworthy as another sign of Apple’s interest in AR.

Startups, funding and venture capital

Robinhood’s pain is Public’s gain as VCs rush to give it more money — The San Francisco-based fintech aims to give people the ability to invest in companies using any amount of money, with a focus on community activity over active trading.

Goldman Sachs and Sesame Workshop pour money into this edtech firm’s newest fund — Reach Capital III is a $165 million investment vehicle.

Reduct.Video raises $4M to simplify video editing — The startup’s technology is already used by customers including Intuit, Autodesk, Facebook, Dell, Spotify, Indeed, Superhuman and IDEO.

Advice and analysis from Extra Crunch

As more insurtech offerings loom, CEO Dan Preston discusses Metromile’s SPAC-led debut — Metromile began trading as a public company yesterday.

Commercializing deep tech startups: A practical guide for founders and investors — Deep tech startups go through a different evolution cycle than a typical B2B or B2C company.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

Racial disparity in Chicago cops’ use of force laid bare in new data — This rare apples-to-apples comparison supports the idea that improving diversity in law enforcement may also improve the quality of policing.

A webcam app left thousands of user accounts exposed online — The database in question belonged to Adorcam, an app for viewing and controlling several webcam models.

Top 100 subscription apps grew 34% to $13B in 2020, share of total spend remained the same — A growing part of app spend took the form of subscription payments last year, according to a new report from Sensor Tower.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

The Facebook Oversight Board has only been operational for a short time, but the nascent project is already looking ahead.

In a conversation hosted by the Carnegie Endowment Thursday, Oversight Board co-chair and former Prime Minister of Denmark Helle Thorning-Schmidt painted a more expansive vision for the group that could go beyond making policy decisions for Facebook.

The board co-chair said that if the project proves to be a success, “other platforms and other tech companies are more than welcome to join and be part of the oversight that we will be able to provide.”

Thorning-Schmidt emphasized that a broader vision for this kind of moderation body would happen well in the future, but the board’s current mission was to move away from policy decisions getting made in a “closed box” at the company.

“Until now, content moderation was basically done by the last person at Facebook or Twitter as we have seen — either Mark Zuckerberg or the other platform directors,” Thorning-Schmidt said.

“For the first time in history, we actually have content moderation being done outside one of the big social media platforms. That in itself… I don’t hesitate to call it historic.”

Those comments may capture broader aspirations for Facebook’s Oversight Board, which refers to itself only as the “Oversight Board” without an explicit reference to Facebook on its website.

Throughout the panel, those involved with the Oversight Board defended the project. The group has come under criticism from skeptics wary that its origins with Facebook make real autonomy from the company impossible.

“A lot of people want to immediately dismiss the Oversight Board and look for something new,” Oversight Board Head of Communications Dex Hunter-Torricke said.

Hunter-Torricke, who spent four years working on the Facebook executive communications team and served as a speechwriter for both Mark Zuckerberg and Sheryl Sandberg, also hinted at a more expansive vision for the board.

“This is a model that we’re testing here to see if this is the kind of institution that can have an impact in one sphere of Facebook and the content moderation challenges they face,” Hunter-Torricke said. He added that the board intends to “evolve and grow” using what it learns from handling Facebook moderation cases.

“… As we build up our expertise and our body of experience in dealing with Facebook I expect there will be more capabilities that come onto the board,” Hunter-Torricke said. “We are on a journey. It’s not something [where] we necessarily know the final destination yet but we are looking to test this model and refine it further.”

TechCrunch reached out to the Oversight Board to ask if the group sees its future as an external governing body for social networks beyond Facebook.

Facebook’ Oversight Board is currently facing the hugely consequential case of whether to reinstate former President Donald Trump, who was removed from Facebook after inciting the violent mob that attacked the U.S. Capitol in early January.

Five of the group’s 20 members will evaluate the Trump case, though the board will not disclose which members evaluate which cases. Once the five reach their decision, the broader board must pass the decision in a majority vote. The board’s verdict is expected within the next two months.

The Facebook Oversight Board’s most prominent Trump critic, legal scholar Pamela Karlan, left her role at the board to join the Biden administration last week and won’t be involved in the decision. Karlan testified at Trump’s first impeachment hearing, arguing that Trump’s actions constituted impeachable offenses.

The board is accepting comments on the Trump case through Friday in an effort to consider “diverse perspectives” in its decision process.

On Thursday, former Facebook Chief Security Officer Alex Stamos signed onto a public letter urging the Oversight Board to keep Facebook’s decision to remove Trump in place. “Without social media spreading Trump’s statements, it seems extremely unlikely these events would have occurred,” the comment’s authors wrote.

“There no doubt will be close calls under a policy that allows the deplatforming of political leaders in extreme circumstances. This was not one of them.”