Author: azeeadmin

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SoftBank Investment Fund and WeWork Labs say they’ve officially kicked off the first session of Emerge, an accelerator program designed for underrepresented founders.

In their press release, the companies describe Emerge as “launched by SoftBank with support from WeWork Labs” (that’s the co-working company’s global accelerator program), with a goal of brining more equality to tech and venture capital.

It’s an equity-free, eight-week program that includes workkshops, access to mentors from SoftBank and the WeWork community and sessions SoftBank executives . It all culminates an a showcase event for investors and SoftBank partners.

The Emerge website describes the program as based in San Mateo, Calif. — but given COVID-19, the sessions and programming are all virtual.

“Supporting underrepresented founders is a top priority for us, ensuring we see more diverse startups across the tech ecosystem,” said Catherine Lenson, managing partner and chief human resources officer at SoftBank Investment Advisers, in a statement. “There is a lack of diversity in the sector as a whole, and we need to do more to address it. That is why we’re excited to launch this program and to see the positive impact that these inspiring founders will have.”

This is also a reminder that while the larger corporate entities are currently embroiled in a legal and financial dispute, WeWork and its largest investor remain closely intertwined.

Here are the 14 startups in the initial program:

• Aquagenuity, which allows users users to take any smart device an track water quality and monitor their environment in real-time from any smart device
• Bridge to College, which helps students choose colleges wisely by matching and providing data
• Caldo uses flexible automation and mobile designs to power satellite eateries for retaurants
• GameJolt, a platform for gamers to follow 100K+ games while they’re still in development
• Koniku, which diagnosing disease using beath
• Mogul, which helps employers find diverse talent
• Moment AI, which uses AI to understand the driver and improve safety
• Node, which builds houses through a proprietary assembly kit
• OjaExpress, a marketplace connecting immigrants and foodies to local ethnic mom and pop grocery stores
• Proven, which offers personalized skin care products powered by The Skin Genome Project, winner of MIT’s 2018 Artificial Intelligence Award.
• Rebellyous Foods, a production stack for plant-based meat.
• ScriptHealth, which provides easy access to prescription medications.
• Shyft, which builds IoT hardware and integrated software to connect and intelligently manage distributed energy resources
• SPS, a cross-border payments provider operating across all major U.S. states and Canada.

Amazon-owned game streaming site Twitch announced today the formation of a new group that will guide decision-making around new policies and products, the Twitch Safety Advisory Council. The eight-person council consists of both online experts and Twitch creators, who have a deep understanding of the Twitch platform, its content, and community, the company says.

“When developing this council we felt it was essential to include both experts who can provide an external perspective, as well as Twitch streamers who deeply understand creators’ unique challenges and viewpoints,” Twitch explained, in an announcement introducing the new council members. “Each member of the council was carefully selected based on their familiarity with the Twitch community and their relevant personal and professional experiences.”

Twitch says it felt the need to create a group like this to allow communities to thrive on Twitch, particularly at a time its platform is seeing record levels of engagement. Due to the coronavirus outbreak, streaming services have seen sizable increases in usage — and Twitch has been no exception.

According to recent data from Arsenal.gg, StreamElements’ analytics partner, Twitch saw 48% month-over-month growth in hours watched between March and April, including game streams and non-gaming content combined, reaching 1.65 billion hours watched last month. Year-over-year, Twitch was up by 101% in hours watched as of April, thanks to sizable growth of Twitch’s “Just Chatting” category of non-game content that alone climbed 138% year-over-year.

But the growth in viewers and content means there’s also a lot more to manage to keep the community safe, which is where the advisory council is meant to help.

The group will offer their input on the drafting of new policies and policy updates; the development of new products and features aimed at improving safety and moderation; the promotion of healthy streaming and “work-life balance” habits; the protection of interests from marginalized groups; and the identification of emerging trends that could impact the Twitch experience.

In its announcement, Twitch introduced the new members as follows (its words):

Alex Holmes

Alex is Deputy CEO at non-profit The Diana Award, which is a legacy to Princess Diana’s belief that young people have the power to change the world. He is the founder of the peer to peer support program Anti-Bullying Ambassadors, a network of trained young people dedicated to preventing peer on peer violence (on and offline) and bullying, particularly in schools. Alex sits on the global safety advisory boards of a number of the major social media and tech companies advising them on their approach to safety and online harms.

CohhCarnage

CohhCarnage is a Twitch Partner and one of the original variety streamers on Twitch. He plays most major releases and indie darlings and is well known for his 100% franchise playthroughs leading up to major game releases. He is also a regular host on Dropped Frames, which covers the hottest news and games on the streaming scene. CohhCarnage is known for his positive community “The Cohhilition” and his slogan “happy, helpful, respectful.”

Cupahnoodle

Cupahnoodle is a partnered Twitch Ambassador and host/commentator, the Mayor of Cupton, a lover of zombies, and a music connoisseur. Her streams range from playing games, to hosting conventions and on site interviews, to providing colorful commentary at esports events.

Emma Llansó

Emma is the Director of the Center for Democracy & Technology’s Free Expression Project and leads CDT’s work to promote law and policy that support Internet users’ free expression rights in the United States, the European Union, and around the world. The Project’s work spans many subjects, including human trafficking, privacy and online reputation issues, counter-terrorism and “radicalizing” content, disinformation, and online harassment. Emma’s areas of focus include intermediary liability law, the capabilities and limitations of automated content analysis, transparency reporting, and best practices in content moderation for empowering users and online communities.

FerociouslySteph

Steph has been a full time streamer since her debut playing competitive collegiate Heroes of the Storm in 2016. She was one of the first transgender streamers to ever be partnered on Twitch, and the first to bring a transgender pride flag emote to the platform. Her fight for inclusivity includes creating a competitive team composed entirely of marginalized gamers, and vehemently opposing non inclusive mechanics such as voice chat.

Dr. Sameer Hinduja

Dr. Hinduja is a Professor in the School of Criminology and Criminal Justice at Florida Atlantic University and Co-Director of the Cyberbullying Research Center. He is recognized internationally for his groundbreaking work on the subjects of cyberbullying, sexting, and social media abuse, concerns that have paralleled the exponential growth in online communication by young people. As a noted speaker and expert on teens and social media use, Dr. Hinduja also trains students, educators, parents, mental health professionals, and other youth workers on how to promote the positive use of technology. Dr. Hinduja is also the Co-Founder and Co-Editor-in-Chief of the International Journal of Bullying Prevention, a new peer-reviewed journal from Springer.

T.L. Taylor

T.L. Taylor is Professor of Comparative Media Studies at MIT and co-founder and Director of Research for AnyKey, an organization dedicated to supporting and developing fair and inclusive esports. She is a qualitative sociologist who has focused on internet and game studies for over two decades. Dr. Taylor’s research explores the interrelations between culture and technology in online leisure environments. Her 2018 book, Watch Me Play: Twitch and the Rise of Game Live Streaming, is the first of its kind to chronicle the emerging media space of online game broadcasting.

Zizaran

Zizaran is a Twitch Partner who has been streaming since 2015. His streams mostly focus on ARPGs, particularly Path of Exile. He believes that Twitch has a culture you can’t find anywhere else and looks forward to helping Twitch make rules clearer and reducing community confusion, specifically when it comes to bans and suspensions on the platform.

The council’s launch isn’t just about keeping Twitch safe and welcoming. It’s also arriving at a time when Twitch is pitching itself to advertisers, whose marketing efforts have been impacted due to the cancellations of live events and sports amid the pandemic. Advertisers, burned by YouTube in the past, are looking for brand safety.

This coronavirus pandemic has increased demand from clients who have accelerated their interest in Twitch, the company recently told The Drum in an interview. In addition, the game-streaming site can help address viewers’ demand for sports content through its sports sims, and their demand for competitions to watch through esports.

On the latter front, Twitch just weeks ago launched an esports directory on its site to cater to its growing streaming audience. It also recently partnered with Comscore to bring gaming and esports stats to advertisers.

The site generated $230 million ad revenue in 2018, which increased to $300 million in 2019, according to a report by The Information. But ad rates are down in 2020 due to the pandemic. That means Twitch may gain more interest and more advertisers, but not see a significant jump in revenue to reflect that until further down the road.

A little over a year after its graduation from Y Combinator’s demo day, the on-demand construction materials delivery service Curri is beginning to offer its services in all 50 states.

Co-founded by Matt Lafferty and Brian Gonzalez Curri aims to solve one of the major hurdles for local construction suppliers who miss out on sales because of an inability to deliver to contractors when they need it.

The company estimates that it saves its customers roughly half of the cost of deploying an in-house fleet for delivery. 

“They act as a wholesaler doing all the sales  but they’re also acting as a logistics company as well,” said Lafferty. “We provide a solution for them to flex up or down and save money.”

After graduating from Y Combinator in the summer of 2019, the company tested its services in the Southern California region. Now, as construction looks ready to return to a more normal schedule in the aftermath of the COVID-19 epidemic, the company is capitalizing on increased demand to offer its services nationwide.

“Construction has stayed essential through this whole crisis,” said Lafferty. “Depending on how states were handling it there were different levels of what was seen as essential construction. Industry-wide there was what I would call a great pause… [But] since April we’ve grown week-over-week and even moreso now when things are really lifting.”

The company charges its customers by mile traveled and operates with a similar business model to Uber or Lyft, says Lafferty. The drivers are all gig workers, but Lafferty says they’re paid a premium to other delivery services because of the urgency of the company’s deliveries. “We have high-dollar items that are going out and they’re typically more urgent,” Lafferty said. “We’re able to pay our driver 25 percent to 30 percent better.”

The Los Angeles-based company raised seed funding from Initialized Capital, the firm founded by Garry Tan and Alexis Ohanian (which also employs former TechCrunch staffer, Kim-Mai Cutler… Hi Kim-Mai!)

With the global economy still sorting itself out in the face of the pandemic, we’re hearing about fewer new venture capital funds these days. However, today is an exception, as Cathay Innovation has raised a $550 million second fund, which is about double the size of its first fund and, according to its leader Denis Barrier, is larger than the firm’s “original target.”

Cathay Innovation’s initial fund had some winners. The firm, which is part of the same org but distinct from private-equity outfit Cathay Capital, invested in Pinduoduo. The Chinese e-commerce giant raised money from Cathay Innovation when it was an early-stage startup. It’s worth around $70 billion today. Cathay Innovation’s first fund also led Chime’s Series B; that company is now worth nearly $6 billion.

We got on the horn with Barrier to learn a bit more about what’s changed for his firm and what its plans are for the new capital.

With its new fund, Barrier told TechCrunch that his firm’s model — target stage, target ownership percentage, etc. — isn’t changing. So if the model isn’t changing, why raise more money? What will it do with the surplus cash?

According to Barrier, two things. First, more money will allow the fund to follow winners a bit more over time. According to the VC, fund one might have put more capital into Pinduoduo and Chime if it had had the capacity to do so. Some venture firms use one-off special purpose vehicles (SPVs) for this sort of work. The other option is to raise a larger fund. And second, Barrier wants to do more deals in Southeast Asia.

This geographic expansion fits into Cathay Innovation’s model. The firm has offices around the world, and tries to share information from one geo to another. The goal is to learn from one and apply that knowledge elsewhere in order to spot impending trends in, say, America, after watching, say, China. The hope is that this sort of information sharing allows it to make earlier, better bets.

Indeed, this concept is something that Barrier has stressed to TechCrunch before. In our most recent chat he noted two examples of the concept in action. The first being that his firm saw the rise of neobanks (challenger banks) in Europe before they really got off the ground in the United States. Hence the Chime deal. And the Cathay Innovation executive noted that because his firm has an office in China, it had a 45-day advance on the rest of the world regarding COVID-19, giving it the chance to tell its portfolio companies what was coming.

It’s an interesting model that worked in its first fund; the real proof of the firm’s ability to see around corners will come with its second fund’s results. Given that this new capital vehicle is about twice as large as its first it has lots more returns to generate. It will need more breakout deals, and will need to ensure that it pours capital into them.

On that point, there is one more potential difference between the first and second funds. Barrier told TechCrunch that his team can now lead larger rounds if it wants. This could, again, help the firm get larger cuts of companies it believes will deliver outsize returns.

And for all the founders out there, Cathay Innovation says its investing pace is about the same as before, so if you are looking for capital, here’s a new fund that’s hunting for deals.

If you’ve been lucky enough to keep your job or business, you almost certainly know someone who wasn’t so fortunate.

Thousands have lost their jobs as companies significantly reduce workforces to adjust to uncertainties and economic challenges created by COVID-19. Many of these people in tech are now faced with a number of questions, from how they’ll pay next month’s rent to whether they’re eligible for unemployment. One area that is particularly confusing is what to do if your compensation package was tied to equity.

Here are some ways I suggest approaching the issue.

Safeguard your equity

Layoffs have become part and parcel of the current economic crisis with unemployment figures skyrocketing to record highs as a result of COVID-19. From multinational conglomerates to mom-and-pop stores, everyone is feeling the impact, and the startup sector is no different.

Despite difficult circumstances, the silver lining for employees is that we have seen many management teams go the extra mile to help their teams, especially when it comes to equity. Compared to traditional layoff situations, companies in the COVID-19 era are offering generous extensions and accelerated vesting on their options, which is undeniably good news for employees with equity.

Typically, equity plans come with a 90-day exercise window after employment termination. That means that if you leave the company, you will have to exercise your options within 90 days or they go back to the company. However, lots of management teams have decided to extend these deadlines many years out given the circumstances.

While layoffs are not easy, it’s been great to see management teams doing the right thing when it comes to equity for their employees who have been laid off. Offering extensions is a benefit that employers should be offering their employees who have helped build the company.

If your company is not offering this, consider negotiating and asking for an extension. This is the right thing to do for employees who are now out of work and a paycheck for the foreseeable future. Both options do not require the company to pay cash at the moment, so there are few reasons a company should deny this request in this environment.

Consider exercising your options

Even if you are granted an extension to exercise your options, employees that hold incentive stock options (ISOs) should look into exercising their options now to maximize their equity’s value.
Many companies are offering extensions for option exercises. While this is great in that it gives employees more time to figure out their exercise situation, waiting past the 90-day window may have much bigger tax consequences that employees need to consider.

ISOs are much more tax advantageous compared to non-qualified stock options (NSOs). They are not taxed under standard income tax and if you sell the stock two years after grant date and one year after exercise date, you sell them as part of a qualifying disposition. In short, this allows you to effectively convert everything north of your strike price to preferential long-term capital gain rates.

As part of offering these tax advantages, the tax code has limitations on ISOs. Most relevant to us at this point is that the fact that you cannot have ISOs past 90 days after you are no longer an employee. This means that even if your company allows an extension on your stock options past the typical 90-day expiration window, your ISOs will convert to NSOs and lose their tax benefit.

This creates a potential planning opportunity that employees who have been laid off need to consider. If you feel good about the upside of the company, then you should consider exercising your ISOs today to capture the potential tax benefits rather than letting them convert to NSOs. Employees who wait risk putting themselves in the same difficult situation once the extension ends at typically less favorable conditions due to an increased 409A valuation.

Negotiate for equity during a pay cut or furlough

In light of the economic slowdown many companies have begun to cut costs. Reduced pay or furloughing employees has become the new norm as businesses of all sizes struggle to navigate these changing times.

It can obviously be concerning if you find yourself in this situation. But for startup employees, the COVID-19 crisis could provide an opportunity to negotiate your compensation package to make up for this decrease, and even set yourself up to prosper in the future.

Startups typically offer equity as a means of deferred compensation and as a way to incentivize employees to own a piece of the company they are building. The compensation is deferred as most startups are cash-strapped and cannot afford to pay you what a larger company may be able to.

If your company is now asking you to take a pay cut, or even take no pay during this time, you should consider asking for additional equity to make up for the lost compensation. While not all companies may be amenable to offering more equity, there is no cash outlay from the company’s standpoint, so it’s an efficient way for your company to compensate you for your sacrifice while preserving their cash.

In addition, offering more equity shows a commitment from management to their employees during this difficult time. It may be the win-win scenario for your company and yourself in the long-run so it’s worth having the conversation with management to discuss if this is available for you.

If your company does offer you more equity, make sure you ask whether the 409A (or fair market value) of the company is being updated. With revised forecasts given the COVID-19 situation, it may be possible for your company to issue your stock at a lower strike price if the company revalues its 409A.

Don’t be afraid to ask for help

I can sympathize with startup employees right now because I faced a similar situation when I left a startup that I had joined as employee number four and was forced to wave goodbye to the equity I had banked on.

If you want to take action on equity but don’t know where to start, now might be a good time to brush up on how your stock options work. As the economy begins to reopen, there’s a good chance we’ll see a rush for candidates in tech as companies compete to bring in some of the extremely talented folks who lost their jobs this week.

Those who have a good understanding of equity may be positioned for a big payday down the line.

Back in March, Headspace announced that it would offer free content to all COVID-19 frontline responders. Now the meditation app is expanding the offer to include all unemployed people in the U.S.

You can go here to sign up, by entering information on your most recent job, including the employer’s name and the date you were last employed. There’s also a box to tick, verifying that you’re currently unemployed and that you “understand that my eligibility for this offer is conditioned on the accuracy of the information I have provided.” The app is only available to new and existing free users of the service. 

No word on how the company intends to verify that information. Of course, the free-year still applies to plenty of people, regardless. 36.5 million Americans have filed for unemployment in the past two months. As of April, the unemployment rate was 14.7% — the highest since the Great Depression. It’s all pretty staggering and felt pretty impossible to imagine when I wrote about the “15 day” ban on social gatherings when Headspace announced its first deal.

But here we are. Things are looking pretty damn bleak at the moment, if I’m being honest. Maybe finding a little peace of mind in a mobile app wouldn’t be such a bad thing.

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

The resilience of the American stock market in the face of near-record unemployment (there were nearly three million more unemployment claims reported this morning) has become a regular topic of conversation. The disconnect between what the American economy’s health appears to be (poor, falling) and the recent, rebounding performance of American equities has been covered broadly — CNBC, Fortune, the Washington Post, NYMag, the list is endless.

The answer concerning why the stock market is holding up in the face of a rapidly deteriorating economy isn’t singular. Reading around and listening, there are a number of reasons that have support from serious folks. If you hunt around even a little, you’ll run into arguments like, “well, where is everyone going to put their money when interest rates are low and the government is boosting the money supply?” or, “big tech companies are driving the major indices, and they’re holding up, so everything makes sense.”

Whichever line of thinking makes the most sense to you is fine. Most are subjective. The argument about technology companies holding up the sky, however, has some empirical truth to it. Tech companies are outperforming other cohorts, which in turn is bolstering the indices in which they reside.

How long the trend can persist is unclear. As Bloomberg’s Joe Weisenthal wrote this morning, the future of the economy can’t purely be what we consider tech because “every company that we’re talking about depends on non-tech companies to do business with.” Adding to that, others have noted that even tech giants have exposure to the slipping economy. In time, some technology companies may fall prey to the same economic gravity that is compressing so much else of the nation’s businesses.

The differing fortunes of stocks and the economy becomes even sharper if you zoom in to look at just public SaaS and cloud firms. This particular cohort of tech companies has seen an even more striking return to form than tech shares more broadly.

There’s a lot of chatter around what kind of stimulus is needed to save the economy and ensure financially vulnerable Americans can retain some degree of stability. Talks have included everything from long-term rent delays to a universal basic income (UBI). But if policymakers want to do more than just keep the floor from falling out and start laying the groundwork for an actual recovery, then they ought to be discussing a different UBI as well: Universal Basic Internet.

Just as the electrification of America brought the nation out of the Great Depression, the Wi-Fi-cation of the nation can ease us out of the COVID-19 collapse. Consider that in 1932, a mere 10% of rural Americans had electricity. As a result, a divide in opportunity emerged: On one hand, city-dwellers had the modern infrastructure required to enjoy a standard of living that would allow them to fully pursue the American Dream; on the other, millions of Americans were literally in the dark (or, at least, candle-lit dimness).

That’s why the electrification of American became a central plank of President Franklin D. Roosevelt’s Great Depression recovery plan. But his plan wasn’t just to turn the lights on, it was to empower communities by making them the owners of their newly generated electricity. So under FDR’s guidance, Congress created the Rural Electrification Administration (REA).

The REA didn’t just barge into rural towns, install electricity and leave. Instead, the REA took two critical steps to make it a truly transformative agency: (1) it employed and empowered community members and (2) it taught people how to make the most of their newfound light. On step one, the REA relied on local partners to organize cooperatives that would supply the labor to build their community’s own electricity system.

By engaging community members, the REA turned “users” into “owners” and, consequently, did much more for rural America than would have been possible under federal auspices alone. On step two, the REA launched an “electric circus” that sent REA staff to educate new electricity users on how best to operate equipment, perform chores, cook and, of course, stay safe. This “circus” was more like a civic service program that facilitated a knowledge transfer from those who knew electrified life to those being exposed to the possibilities generated by electricity for the first time.

If the Great Depression showed rural America had been left in the dark, COVID-19 has revealed the plight of the millions of Americans left offline. Forced to shelter in place, Americans have been reintroduced to the centrality of high-speed internet to learning, working and simply living. But there’s an expansive digital divide between those with high-speed internet and those left searching for access to affordable broadband. Approximately 28% of Americans in rural areas do not have access to or cannot afford broadband — the rate is 23% in urban areas.

The digital divide exists on a racial dimension as well — whites are more likely than blacks or Latinx residents to report having broadband access at home.

America needs Universal Basic Internet. Achieving UBI requires a coordinated federal effort that, like the REA, (1) involves local stakeholders as a way to increase employment and civic pride and (2) creates an “internet circus” of trainers to increase digital literacy around the nation. This approach to closing the digital divide will go a long way in helping the nation recover from the COVID collapse.

FDR was rightfully proud of the REA. He realized that the federal government had to get involved because the private sector had failed to provide an essential service for Americans.

He noted that it is particularly important that extensions of rural electrification be planned in such a way as to provide service on an area basis. The practice has been too frequent in the past for private utility companies to undertake to serve only the more prosperous and more populous rural sections. As a result, families in less favored and in sparsely settled sections were left unserved.

Sound familiar?

The government has delegated providing access to internet to the private sector for far too long. Only the “more prosperous” have been able to enjoy the full benefits of high-speed internet. The disparity in access can be explained by economics: It’s not cheap to ensure every American has the connectivity required to thrive. Way back in 2010, the National Broadband Plan estimated that closing the digital divide would take at least $24 billion. If the upfront costs weren’t daunting enough, the costs of building out a broadband network rise as the distance to reach end users increases; in other words, the least dense areas are the most expensive to serve. So it comes as no surprise that private actors have opted to instead service dense, urban areas.

That’s why the government must and can seize this crisis to close the digital divide. In the words of Rahm Emanuel, a crisis is “an opportunity to do things you think you could not do before.” House Democrats just released a $3 trillion stimulus plan — surely, there’s a couple billion to spend on a Universal Basic Internet plan.

To those worried that the spending won’t generate enough of a return, the math makes clear that closing the digital divide will generate a digital dividend. There’s no easy to way to measure the impact of broadband access on the economy, but several studies indicate that this is exactly the sort of investment we should make in a time of crisis: some have estimated that doubling broadband speeds adds around 0.3% to GDP growth; others forecast that every broadband-related job generates between 2.5 and 4.0 additional jobs; and, yet another study determined that a 10 percentage point increase in broadband access could increase GDP per capita by $13,036. Simply put, there’s a high ROI — return on internet — associated with increasing broadband access.

President Lincoln, who guided the nation through its most trying times, stated that “[t]he legitimate object of government is to do for the community of people whatever they need to have done, but cannot do at all, or cannot do as well for themselves in their separate and individual capacities.”

The digital divide is not a problem any American can solve alone. So, it’s time for the government to bring the “internet circus” to town after town and make sure that Universal Basic Internet becomes a reality.

It seems that we are in the middle of a mini acquisition spree for Kubernetes startups, specifically those that can help with Kubernetes security. In the latest development, Venafi, a vendor of certificate and key management for machine-to-machine connections, is acquiring Jetstack, a UK startup that helps enterprises migrate and work within Kubernetes and cloud-based ecosystems, which has also been behind the development of cert-manager, a popular, open source native Kubernetes certificate management controller.

Financial terms of the deal, which is expected to close in June of this year, have not been disclosed, but Jetstack has been working with Venafi to integrate its services and had a strategic investment from Venafi’s Machine Identity Protection Development Fund.

Venafi is part of the so-called “Silicon Slopes” cluster of startups in Utah. It has raised about $190 million from investors that include TCV, Silver Lake and Intel Capital and was last valued at $600 million. That was in 2018, when it raised $100 million, so now it’s likely Venafi is worth more, especially considering its customers, which include the top five U.S. health insurers; the top five U.S. airlines; the top four credit card issuers; three out of the top four accounting and consulting firms; four of the top five U.S., U.K., Australian and South African banks; and four of the top five U.S. retailers.

For the time being, the two organizations will continue to operate separately, and cert-manager — which has hundreds of contributors and millions of downloads — will continue on as before, with a public release of version 1 expected in the June-July timeframe.

The deal underscores not just how Kubernetes-based containers have quickly gained momentum and critical mass in the enterprise IT landscape, in particular around digital transformation; but specifically the need to provide better security services around that at speed and at scale. The deal comes just one day after VMware announced that it was acquiring Octarine, another Kubernetes security startup, to fold into Carbon Black (an acquisition it made last year).

“Nowadays, business success depends on how quickly you can respond to the market,” said Matt Barker, CEO and co-founder of Jetstack. “This reality led us to re-think how software is built and Kubernetes has given us the ideal platform to work from. However, putting speed before security is risky. By joining Venafi, Jetstack will give our customers a chance to build fast while acting securely.”

To be clear, Venafi had been offering Kubernetes integrations prior to this — and Venafi and Jetstack have worked together for two years. But acquiring Jetstack will give it direct, in-house expertise to speed up development and deployment of better tools to meet the challenges of a rapidly expanding landscape of machines and applications, all of which require unique certificates to connect securely.

“In the race to virtualize everything, businesses need faster application innovation and better security; both are mandatory,” said Jeff Hudson, CEO of Venafi, in a statement. “Most people see these requirements as opposing forces, but we don’t. We see a massive opportunity for innovation. This acquisition brings together two leaders who are already working together to accelerate the development process while simultaneously securing applications against attack, and there’s a lot more to do. Our mutual customers are urgently asking for more help to solve this problem because they know that speed wins, as long as you don’t crash.”

The crux of the issue is the sheer volume of machines that are being used in computing environments, thanks to the growth of Kubernetes clusters, cloud instances, microservices and more, with each machine requiring a unique identity to connect, communicate, and execute securely, Venafi notes, with disruptions or misfires in the system leaving holes for security breaches.

Jetstack’s approach to information security came by way of its expertise in Kubernetes, developing cert-mananger specifically so that its developer customers could easily create and maintain certificates for their networks.

“At Jetstack we help customers realize the benefits of Kubernetes and cloud native infrastructure, and we see transformative results to businesses firsthand,” said Matt Bates, CTO and co-founder of Jetstack, in a statement. “We developed cert-manager to make it easy for developers to scale Kubernetes with consistent, secure, and declared-as-code machine identity protection. The project has been a huge hit with the community and has been adopted far beyond our expectations. Our team is thrilled to join Venafi so we can accelerate our plans to bring machine identity protection to the cloud native stack, grow the community and contribute to a wider range of projects across the ecosystem.” Both Bates and Barker will report to Venafi’s Hudson and join the bigger company’s executive team.