Year: 2021

RedHat today announced that it’s acquiring container security startup StackRox . The companies did not share the purchase price.

RedHat, which is perhaps best known for its enterprise Linux products has been making the shift to the cloud in recent years. IBM purchased the company in 2018 for a hefty $34 billion and has been leveraging that acquisition as part of a shift to a hybrid cloud strategy under CEO Arvind Krishna.

The acquisition fits nicely with RedHat OpenShift, its container platform, but the company says it will continue to support StackRox usage on other platforms including AWS, Azure and Google Cloud Platform. This approach is consistent with IBM’s strategy of supporting multi-cloud, hybrid environments.

In fact, Red Hat president and CEO Paul Cormier sees the two companies working together well. “Red Hat adds StackRox’s Kubernetes-native capabilities to OpenShift’s layered security approach, furthering our mission to bring product-ready open innovation to every organization across the open hybrid cloud across IT footprints,” he said in a statement.

CEO Kamal Shah, writing in a company blog post announcing the acquisition, explained that the company made a bet a couple of years ago on Kubernetes and it has paid off. “Over two and half years ago, we made a strategic decision to focus exclusively on Kubernetes and pivoted our entire product to be Kubernetes-native. While this seems obvious today; it wasn’t so then. Fast forward to 2020 and Kubernetes has emerged as the de facto operating system for cloud-native applications and hybrid cloud environments,” Shah wrote.

Shah sees the purchase as a way to expand the company and the road map more quickly using the resources of Red Hat (and IBM), a typical argument from CEOs of smaller acquired companies. But the trick is always finding a way to stay relevant inside such a large organization.

StackRox’s acquisition is part of some consolidation we have been seeing in the Kubernetes space in general and the security space more specifically. That includes Palo Alto Networks acquiring competitor TwistLock for $410 million in 2019. Another competitor, Aqua Security, which has raised $130 million, remains independent.

StackRox was founded in 2014 and raised over $65 million, according to Crunchbase data. Investors included Menlo Ventures, Redpoint and Sequoia Capital. The deal is expected to close this quarter subject to normal regulatory scrutiny.

In a new statement issued by former First Lady Michelle Obama, she calls on Silicon Valley specifically to address its role in the violent insurrection attempt by pro-Trump rioters at the U.S. Capitol building on Wednesday. Obama’s statement also calls out the obviously biased treatment that the primarily white pro-Trump fanatics faced by law enforcement relative to that received by mostly peaceful BLM supporters during their lawful demonstrations (as opposed to Wednesday’s criminal activity), but it includes a specific redress for the tech industry’s leaders and platform operators.

“Now is the time for companies to stop enabling this monstrous behavior – and go even further than they have already by permanently banning this man from their platforms and putting in place policies to prevent their technology from being used by the nation’s leaders to fuel insurrection,” Obama wrote in her statement, which she shared on Twitter and on Facebook.

The call for action goes beyond what most social platforms have done already: Facebook has banned Trump, but though it describes the term of the suspension as “indefinite,” it left open the possibility for a restoration of his accounts in as little as two weeks’ time once Joe Biden has officially assumed the presidency. Twitter, meanwhile, initially removed three tweets it found offended its rules by inciting violence, and then locked Trump’s account pending his deletion of the same. Earlier on Thursday, Twitter confirmed that Trump had removed these, and that his account would subsequently be restored twelve hours after their deletion. Twitch has also disabled Trump’s channel at least until the end of his term, while Shopify has removed Trump’s official merchandise stores from its platform.

No social platform thus far has permanently banned Trump, so far as TechCrunch is aware, which is what Obama is calling for in her statement. And while both Twitter and Facebook have discussed how Trump’s recent behavior have violated their policies regarding use of their platform, neither have yet provided any detailed information regarding how they’ll address any potential similar behavior from other world leaders going forward. In other words, we don’t yet know what would be different (if anything) should another Trump-styled megalomaniac take office and use available social channels in a similar manner.

Obama is hardly the only political figure to call for action from social media platforms around “sustained misuse of their platforms to sow discord and violence,” as Senator Mark Warner put it in a statement on Wednesday. Likely once the dust clears from this week’s events, Facebook, Twitter, YouTube, et al. will face renewed scrutiny from lawmakers and public interest groups around any corrective action they’re taking.

In a new statement issued by former First Lady Michelle Obama, she calls on Silicon Valley specifically to address its role in the violent insurrection attempt by pro-Trump rioters at the U.S. Capitol building on Wednesday. Obama’s statement also calls out the obviously biased treatment that the primarily white pro-Trump fanatics faced by law enforcement relative to that received by mostly peaceful BLM supporters during their lawful demonstrations (as opposed to Wednesday’s criminal activity), but it includes a specific redress for the tech industry’s leaders and platform operators.

“Now is the time for companies to stop enabling this monstrous behavior – and go even further than they have already by permanently banning this man from their platforms and putting in place policies to prevent their technology from being used by the nation’s leaders to fuel insurrection,” Obama wrote in her statement, which she shared on Twitter and on Facebook.

The call for action goes beyond what most social platforms have done already: Facebook has banned Trump, but though it describes the term of the suspension as “indefinite,” it left open the possibility for a restoration of his accounts in as little as two weeks’ time once Joe Biden has officially assumed the presidency. Twitter, meanwhile, initially removed three tweets it found offended its rules by inciting violence, and then locked Trump’s account pending his deletion of the same. Earlier on Thursday, Twitter confirmed that Trump had removed these, and that his account would subsequently be restored twelve hours after their deletion. Twitch has also disabled Trump’s channel at least until the end of his term, while Shopify has removed Trump’s official merchandise stores from its platform.

No social platform thus far has permanently banned Trump, so far as TechCrunch is aware, which is what Obama is calling for in her statement. And while both Twitter and Facebook have discussed how Trump’s recent behavior have violated their policies regarding use of their platform, neither have yet provided any detailed information regarding how they’ll address any potential similar behavior from other world leaders going forward. In other words, we don’t yet know what would be different (if anything) should another Trump-styled megalomaniac take office and use available social channels in a similar manner.

Obama is hardly the only political figure to call for action from social media platforms around “sustained misuse of their platforms to sow discord and violence,” as Senator Mark Warner put it in a statement on Wednesday. Likely once the dust clears from this week’s events, Facebook, Twitter, YouTube, et al. will face renewed scrutiny from lawmakers and public interest groups around any corrective action they’re taking.

Six years after launching its service linking employer-sponsored insurance plans with surgical centers of excellence, the Carrum Health has raised $40 million in a new round of financing to capitalize on tailwinds propelling its business forward. 

As the COVID-19 pandemic exposes cracks in the U.S. healthcare system, one of the ways that employers have tried to manage the significant costs of insuring employees is by taking on the management of care themselves.

As they shoulder more of the burden, companies like Carrum, which offer servies that manage some of the necessary points of care for businesses, at lower costs, are becoming increasingly attractive targets for investors.

That’s why Carrum was able to attract investors led by Tiger Global Management, GreatPoint Ventures, and Cross Creek, all firms that joined returning investors Wildcat Venture Partners and SpringRock Ventures in backing the company’s Series A round.

Carrum said the money will go towards sales and marketing to more customers, adding more services and improving its existing technology stack.

Carrum uses machine learning to collect and analyze data on surgical outcomes and care to identify what it considers to be surgical centers of excellence across the U.S.

The company offers self-insured employers the opportunity to buy services directly from surgical centers for a bundled price. That can mean savings of up to 50% on surgical expenses.

Using Carrum, there are no co-pays, deductibles, and co-insurance. Instead, Carrum Health’s customers pay a fee and in return receive a 30-day warranty on procedures, meaning that the healthcare provider will cover any costs associated with care from botched operations or complications.

Employees have access to a mobile applications that gives them access to virtual care before, during, and after surgeries.

“For years, the industry has talked about redesigning healthcare to benefit patients, but the only way to really do that is to tackle the underlying economics of care, a truly difficult task,” said Sach Jain, CEO and founder of Carrum Health, in a statement. “Employers now have a modern, technology-driven solution to help patients get better care without financial headache and we’re not stopping at surgery. In 2021 we’ll be expanding our reach and impact with additional services. It’s such an honor to pave the way for a better healthcare future and we’re so excited for what’s to come.”

Carrum Health’s customers include Quest Diagnostics, US Foods, and other, undisclosed organizations in retail, manufacturing, communications and insurance, the company said.

Centers of excellence on the platform include Johns Hopkins HealthCare, Mayo Clinic, and Tenet Healthcare .

Hello and welcome back to Equity, TechCrunch’s venture-capital-focused podcast, where we unpack the numbers behind the headlines. Happy 2021, or as our own Danny Crichton aptly names it, December 38, 2020.

Equity crew is back to start the new year in full force, with Alex, Natasha, and Danny on the mics and Chris behind the scenes. The reunion led to extreme Dad joke energy from all of us, which helped get through the mountain of tech news that we had in front of us.

In fact, there was so much to talk about that we have a bonus episode coming out Saturday dealing with Roblox and the gaming environment. Stay tuned.

For now, here’s what’s in today’s episode:

• The remote work space is rushing to cure your Zoom fatigue, or at least give you new ways to handle it. This week, we saw GitHub alumni raise millions for a video repository tool, and Teamflow raise more for a virtual platform meant to mimic the serendipity (and productivity) of your currently-shuttered office.
• WeLink raised a $185 million Series A round and, while we could have made financial nomenclature jokes, there was much to unpack on the opportunity of 5G and wireless.
• Divvy locked down $165 million, making itself a unicorn in the process. Consider this one another win for Utah, and a big moment for the company itself, which is working in a very competitive space.
• We also noted a series of new VC funds that closed in the final days of 2020, including One Way, USV, Learn Capital, and Madrona.
• Hopin went shoppin’, picking up StreamYard for a quarter-billion because they thought it was boppin’. Please forgive our attempt at poetry. Regardless, Hopin spent $250 million for StreamYard, a livestreaming technology platform that it intends to operate independently. The combined company has around $65 million in annual recurring revenue, with the purchased-entity bringing $30 million of that on its own. A big deal.
• Twitter is also out in the market with a checkbook, picking up a podcasting app and a design studio.
• And on the podcast front, Amazon is also in the market. This brings up the question, what really is Amazon Prime, anyways?
• Finally, we had few words on why P&G backing off from buying Billie impacts DTC startups everywhere. 

As you can tell by our laughs and jokes this week, it is really good to be back. Enjoy the show, and don’t forget the Saturday extra!

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.

Following a slate of temporary and permanent bans from a number of the top online platforms, popular video streaming service Twitch today confirmed that it has disabled the President of the United States’ account. A spokesperson for the site told TechCrunch,

In light of yesterday’s shocking attack on the Capitol, we have disabled President Trump’s Twitch channel. Given the current extraordinary circumstances and the President’s incendiary rhetoric, we believe this is a necessary step to protect our community and prevent Twitch from being used to incite further violence.

Twitch’s actions follow similar measures taken by Facebook, Twitter and Snapchat, which over the course of the last day all placed new restrictions on the president’s account. Facebook took the unprecedented step of suspending the president’s account for the remainder of his term, which ends on January 20.

The company previously removed the “PogChamp” emote featuring the face of gaming figure Ryan Gutierrez after he expressed support for pro-Trump rioters during Wednesday’s chaos on Capitol Hill.

Developing…

It’s the image that’s been seen around the world. One of hundreds of pro-Trump supporters in the private office of House Speaker Nancy Pelosi after storming the Capitol and breaching security in protest of the certification of the election results for President-elect Joe Biden. Police were overrun (when they weren’t posing for selfies) and some lawmakers’ offices were trashed and looted.

As politicians and their staffs were told to evacuate or shelter in place, one photo of a congressional computer left unlocked still with an evacuation notice on the screen spread quickly around the internet. At least one computer was stolen from Sen. Jeff Merkley’s office, reports say.

A supporter of U.S. President Donald Trump leaves a note in the office of U.S. Speaker of the House Nancy Pelosi as the protest inside the U.S. Capitol in Washington, D.C, January 6, 2021. Demonstrators breached security and entered the Capitol as Congress debated the 2020 presidential election Electoral Vote Certification. Image Credits: SAUL LOEB/AFP via Getty Images

Most lawmakers don’t have ready access to classified materials, unless it’s for their work sitting on sensitive committees, such as Judiciary or Intelligence. The classified computers are separate from the rest of the unclassified congressional network and in a designated sensitive compartmented information facility, or SCIFs, in locked-down areas of the Capitol building.

“No indication those [classified systems] were breached,” tweeted Mieke Eoyang, a former House Intelligence Committee staffer.

But the breach will likely present a major task for Congress’ IT departments, which will have to figure out what’s been stolen and what security risks could still pose a threat to the Capitol’s network. Kimber Dowsett, a former government security architect, said there was no plan in place to respond to a storming of the building.

The threat to Congress’ IT network is probably not as significant as the ongoing espionage campaign against U.S. federal networks. But the only saving grace is that so many congressional staffers were working from home during the assault due to the ongoing pandemic, which yesterday reported a daily record of almost 4,000 people dead from COVID-19 in one day.

THE BIG PICTURE

U.S. blames “ongoing” federal agency breaches on Russia

Some consolidation is underway in the world of challenger banking apps. BBVA today told users of Simple — the pioneering mobile and online banking app that it acquired for $117 million in 2014 — that it is planning to shut down the service, moving accounts to BBVA in the process.

In a note it sent out earlier today to users — being shared on Twitter by a number of them — that it will be transitioning their accounts to be serviced by BBVA USA, which already housed the accounts.

“BBVA USA has made the strategic decision to close Simple,” the note reads. “There is no immediate impact to your accounts at Simple and nothing you need to do at this time. Since your deposits are already housed at BBVA USA, they will remain in FDIC insured accounts there, up to the applicable limits. In the future, you Simple account will become exclusively services by BBVA USA, but until then you can continue to access your account and your money through the Simple app or online at Simple.com.”

Users will receive more details in the future about the transition to BBVA, the note continued.

The response from Simple customers has been predictably downbeat. Users migrated to the service specifically to have a faster and more modern experience compared to what they were getting through previous, incumbent providers.

And even though Simple ultimately ended up getting acquired by one of those incumbents — BBVA, headquartered in Spain, is one of the largest banks in the world — it was run largely independently of its owner, as part of BBVA’s attempt to bring on more modern services to attract a younger class of users.

We have contacted both BBVA and Simple for further comment. So far, it looks like only the emailed notification is the only announcement of the changes: there are no alerts within the bank’s mobile app, or on the Simple website.

It is unclear how many users Simple has currently. It had around 100,000 users when it was acquired back in 2014, and some might say that the startup was ahead of its time.

In the years between it launching and now, we’ve seen an explosion in the number and popularity of of so-called neobanks or challenger banks around the world, including Nubank, Chime, Current, N26, Revolut, Monzo, and many more turning what seemed like a radical concept into one that is now fairly commonplace.

Tapping into using a set of APIs to bundle services, and sitting on top of other banks’ infrastructure, these neobanks are more fleet of foot, and provide more modern interfaces on more modern platforms (such as mobile apps), foregoing some of the traditional trappings of banking like visiting physical locations and transacting with tellers, and replacing them with algorithms that, for example, help people manage their finances through the month by analyzing their spend and suggesting ways to save money or organize their finances in a better way.

The turn in events for Simple plays into some of the precariousness of using newer “challenger” banking services: there is always a risk with smaller services that they might not stick around as solidly as their incumbent counterparts — although recent years and bigger banking crises have definitely overturned some of those concepts.

For its part, Simple has not always been perfect. The company has at times turned off certain features — such as Bill Pay, or types of customer accounts — without warning, leaving users scrambling to replace them alternatives.

The question will be now whether users decide to stick with BBVA or turn to exploring another challenger: there are, after all, many options to consider these days.

We’ll update this post as we learn more.

This year, Americans grappled with fear of infection, incredible loss of loved ones, financial stress, isolation and fatigue from constant uncertainty to name a few. Even though we are getting closer to returning to normality as vaccines start to roll out, we can’t write COVID-19 off just yet. We are only now beginning to see the long-lasting effects of the pandemic, specifically its dramatic impact on the mental health crisis in the United States and unfortunately, mental illness has no vaccine.

Nearly 45 million American adults live with mental illness, which has only been exacerbated this year as more than two in five U.S. residents reported struggling with mental health issues as a result of COVID-19.

Even more concerning, according to the World Health Organization, prior to the pandemic, countries around the world were spending less than 2% of national health budgets on mental health, while struggling to meet their populations’ needs. It’s evident that there is not only a lack of focus on mental healthcare, but a lack of access as well.

We’ve seen a recent influx in telemedicine and telehealth services, and provided these solutions are evidence-based and effective, this is the only way for us to scale the widespread demand for support. Put simply, we don’t have enough clinical staff to go around.

When I practiced psychiatry in the U.K.’s National Health Services (NHS), I quickly realized that we were seeing patients too late, sometimes years too late, such that they had far more serious needs than if they had been able to access good quality care earlier. Back then it was clear to me this level of supply-demand gap could only be resolved by deploying technology at scale, and the events of the last year have only reinforced that.

Investors have taken note as well, with many mental health startups raising capital. It’s clear that business leaders have begun to prioritize innovation as a way to pull ourselves out of crisis, with a renewed focus on products adapted to a changed world. We’ve already seen a massive uptick in digital mental health solutions with about 76% of clinicians solely treating patients via telemedicine. The clearest path for managing mental health at scale will be evidence-based, ethical and personalized digital solutions.

Not only will this influx help those who desire flexible care options, but telehealth has also increased the access to care for people who may have limited options in their local communities.

While increasing in popularity, digital mental health solutions have some important challenges to overcome. For one, they must win consumer trust and prove that they can handle personal data ethically and responsibly. With 81% of Americans feeling that the risks of sharing personal data outweigh the benefits, providers must show that they can responsibly secure users’ personal health data due to the sensitive nature of the information and ultimately gain that trust.

This must go beyond compliance with HIPAA and, in Europe, GDPR, and require the development and implementation of an ethical framework to underpin a provider’s digital mental health solutions. However, such efforts must be genuine and avoid falling into the trap of “ethics washing,” so I encourage providers to have the ethics frameworks audited by external experts and to commit to publishing the results.

Digital solutions must also be able to meet the needs of users on an individualized and personalized basis. Many apps meant to help manage mental health take a one-size-fits-all approach and don’t take enough advantage of the technology’s ability to adapt to peoples’ unique symptoms and personal preferences. This is not simply about offering more than one type of intervention, although that is important, it’s the recognition that people engage in technology in different ways.

For instance, at Koa Health we know that some users love going through a program in a step-by-step fashion, whereas others prefer to dip into activities as they need them, and it’s important that we cater equally well for both of these preferences. Generic approaches simply won’t work well for everyone.

Not only do digital solutions need to be responsible with data and be tailored to users, they must work harder to prove their efficacy. Recent research has shown that 64% of mental health apps claimed efficacy yet only 14% included any evidence. The growth in the adoption of technology is encouraging, but positive impact will only result from products designed for efficacy — and able to demonstrate it in high-quality trials. The stronger the evidence base for effectiveness and cost-effectiveness, the more likely healthcare providers and insurers will be to distribute the solutions.

While vaccines are on their way, the mental health impacts of the pandemic may soon overshadow the direct impacts of the pandemic. While health tech has made promising progress, it’s imperative that digital mental healthcare places a stronger emphasis on effective, ethical and personalized care to avert an even larger mental health crisis.

Mobile advertising company Tapjoy has settled with the U.S. Federal Trade Commission over allegations that it was misleading consumers about the in-app rewards they could earn in mobile games. According to the FTC, Tapjoy deceived consumers who participated in various activities — like purchasing a product, signing up for a free trial, providing their personal information like an email address, or completing a survey — in exchange for in-game virtual currency. But when it was time to pay up, Tapjoy’s partners didn’t deliver.

As a result of the ruling, Tapjoy will have to clean up its business by monitoring the offers from advertisers presented to consumers and conspicuously display the terms that explain how rewards are earned. It will also be required to follow through to ensure the offers are delivered and investigate consumer complaints if they are not. Failure to follow the terms of the settlement will result in further fines of up to $43,280 per each violation, the FTC says.

Tapjoy’s business model has been to serve as an intermediary between advertisers, gamers and game developers. The mobile game developers integrate its technology to display the ads — aka “offers” — to their own customers, in order to earn payments for their users’ activity. When the consumer completes the offer by taking whatever action was required, they’re supposed to earn in-game coins or other virtual currency. The app developers then earn a percentage of that ad revenue.

But that often wasn’t happening, the FTC said. Players would jump through hoops, even sometimes spending money and turning over their sensitive data, only to get nothing in return.

What’s more, it said Tapjoy was aware its partners were cheating these consumers and did take action, even when “hundreds of thousands” of consumers filed complaints. This also harmed the game developers, who were cheated out of the promised ad revenues they would have otherwise earned.

“Tapjoy promised gamers in-app rewards for completing advertising offers made by its partners, but then often didn’t deliver,” said Frank Gorman, Acting Deputy Director of the FTC’s Bureau of Consumer Protection, in a statement. “When companies like Tapjoy make promises that depend on their partners’ performance, they’re on the hook to make sure those promises are kept.”

The FTC said Tapjoy’s conduct violated both the FTC Act’s prohibition on unfair business practices as well as the prohibition on deceptive practices. It will now have to actively work to weed out the fraud in its industry, otherwise Tapjoy itself will be held accountable.

App platforms like Apple and Google have struggled with shady ad businesses for years, which target their own customers.

More recently, Apple implemented a policy that requires developers to disclose on its app store listing what sort of information the app collects from customers and how that data is used to track users. This policy also wraps in whatever third-party ad technology may be integrated into the app.

The move is a not-so-subtle push to get developers to stop working with bad actors (like Tapjoy, allegedly) in order monetize their apps and games, and instead turn to a business model where Apple profits: subscriptions. Apple, brilliantly, has positioned this as a fight for consumer privacy and not for consumer dollars.

What’s interesting about this FTC ruling is that it lays the fault for Tapjoy and others like it directly at the platforms’ feet.

Commissioners Rohit Chopra and Rebecca Kelly Slaughter, in a joint statement, described Tapjoy as “a minnow next to the gatekeeping giants of the mobile gaming industry, Apple and Google.”

“By controlling the dominant app stores, these firms enjoy vast power to impose taxes and regulations on the mobile gaming industry, which was generating nearly $70 billion annually even before the pandemic. We should all be concerned that gatekeepers can harm developers and squelch innovation,” the statement reads. “The clearest example is rent extraction: Apple and Google charge mobile app developers on their platforms up to 30% of sales, and even bar developers from trying to avoid this tax through offering alternative payment systems,” they said.

The Commissioners noted, too, that “larger gaming companies” are pursuing legal action against these practices — a reference to Epic Games’ Fortnite lawsuit against Apple over the App Store commissions. But it said smaller developers fear retaliation for speaking up, as it could end up destroying their business if they were to be banned from the app stores.

In other words, the FTC blames the app store business model itself for leading developers to turn to companies like Tapjoy to sustain themselves.

“This market structure also has cascading effects on gamers and consumers. Under heavy taxation by Apple and Google, developers have been forced to adopt alternative monetization models that rely on surveillance, manipulation, and other harmful practices,” the statement reads.

This is not the first FTC action that has resulted from the fallout of the modern app store business model. Last year, the FTC went after kids’ app developer HyperBeard for its use of third-party ad trackers that were used to serve behavioral advertising, in violation of the Children’s Online Privacy Protection Act (COPPA).

Apple is being given a lot of credit in recent weeks for its privacy push, with the launch of its so-called app store “nutrition labels” that help to better highlight the bad actors in the mobile app market. But some of the recent reporting has lacked balance.

Many reports neglect to explain why these alternative business models rose in the first place. The also often don’t detail how Apple will financially benefit from the shift to subscriptions that will result from this mobile ad clampdown. Plus, it’s rarely noted that Apple itself serves behavioral advertising within its own apps which is based on the user data it collects from across its catalog of first-party apps and services. That’s not to say that Apple isn’t doing a service with its privacy push, but it’s a complex matter — this isn’t sports. You don’t have to pick one side or the other.

The Commissioners in their joint statement also hinted that regulation will soon come to the app platform providers, Apple and Google as well, not just mobile ad middlemen like Tapjoy.

“…when it comes to addressing the deeper structural problems in this marketplace that threaten both gamers and developers, the Commission will need to use all of its tools – competition, consumer protection, and data protection – to combat middlemen mischief, including by the largest gaming gatekeepers,” they said.