Author: azeeadmin

Edtech was long defined by stodgy sales cycles, sluggish adoption and splashy pitches to K-12 districts with tight budgets, but the COVID-19 pandemic turned that reputation on its head in short order.

Now, companies in the space are entering Q2 — traditionally a slower time reserved for product development and extra focus on existing clients — busier than ever. In this piece, we’ll unpack some of the dollar signs indicating that edtech may be entering a new era.

Broader investor interest

A number of edtech founders who are not seeking venture capital have recently told me their inboxes are cluttered with notes from investors looking to chat.

It’s a refreshing break from the usual fundraising doom-and-gloom we’ve been hearing about during this pandemic, but I want to note the nuance: We’re seeing investors who have never been interested in edtech become bullish on the category as a whole. If these investors put their money where their mouths are, we’ll start to see an uptick of venture funding sector-wide.

For EdSights, co-founded by sister duo Claudia and Carolina Recchi, doors are opening. Before COVID-19, they say they mainly attracted interest from opportunity investors and edtech investors. Now, they’re talking to a number of VCs, none solely from edtech-focused funds.

GM said Wednesday that it will postpone its upcoming reveal of a GMC-branded electric Hummer due to the COVID-19 pandemic.

The Hummer EV debut, which was scheduled to occur May 20, is the latest automotive event to be delayed in recent months due to COVID-19, the disease caused by the coronavirus. The Geneva Motor Show and Cadillac’s Lyriq reveals were also canceled or postponed.

GM said it will reschedule the reveal and that development work on the GMC Hummer EV is “on track and undeterred.”

Earlier this year, GM announced it was bringing back the Hummer in a new electric form. Since the announcement, GM has teased the “super truck” in several videos, including a 30-second Super Bowl ad for the Hummer called “Quiet Revolution” that starred NBA  phenom LeBron James.

GM hasn’t released the base price of the vehicle, although it has shared some specs, including  that it will produce the equivalent of 1,000 horsepower, have a 0 to 60 mph acceleration of 3 seconds and 11,500 feet of torque.

The Hummer EV will be produced at its Detroit-Hamtramck assembly plant in Michigan. GM previously announced plans to invest $2.2 billion into its Detroit-Hamtramck assembly plant to produce all-electric trucks and SUVs, as well as a self-driving vehicle unveiled by its subsidiary Cruise. The automaker said at the time it will invest an additional $800 million in supplier tooling and other projects related to the launch of the new electric trucks.

Stripe and Shopify have transformed the face of commerce for small business users, yet when it comes to putting that cash somewhere, SMBs have found that the banking options aren’t quite as transformative.

Wise is a new challenger bank built specifically for small businesses. The startup is aiming to insert itself as an essential service in the small business repertoire by bundling banking with payment services powered by Stripe. Customers can receive payments, manage their cash, and pay employees all via Wise’s app.

CEO Arjun Thyagarajan tells TechCrunch that his company has closed a $5.7 million seed round led by Base10 Partners. Abstract Ventures, Backend Capital, The Fund, Two Culture Capital also participated in the round.

While the advent of challenger banks has helped drive plenty of innovation on the consumer banking side, says Rexhi Dollaku, a Principal at Base10 who led the Wise deal, “very little of that innovation has happened in the business banking context.”

Thyagarajan and his investors hope that the startup can keep churn low by embedding a wider scope of financial services products inside its core product, expanding beyond the traditional scope of banking features by offering functionality to power things like payroll and accounting.

Rather than plunging into direct customer sales, Wise is partnering with behemoth platforms like Shopify to onboard small businesses where they already are. “If you look at other [banking] options out there, they’re going direct to the customer, what we’ve learned is that it is better to partner,” Thyagarajan says. “They’re signing up inside these ecosystems so we want to partner with these ecosystems.”

The small team has already built up a customer base of 1,000 businesses. The average Wise customer has between 2-10 employees and is pulling in somewhere between $500,000 and $5 million in ARR, the company tells us. Bank accounts on Wise’s platform are FDIC-insured up to $250,000 through the startup’s partnership with banking partner BBVA USA.

While Thyagarajan says they’ve seen online spend increasing, the COVID-19 pandemic has impacted plenty of Wise’s potential customers, and has pushed the company to stay flexible in the businesses they cater to. “I think a lot of industries are going to get accelerated and fast-forwarded,” he says. “The customers we want to cater to are rapidly modernizing.”

Alongside the funding announcement, the startup shared that Raghav Lal, a former General Manager of Small Business at Visa, will be joining the startup as its President.

Chegg has confirmed its third data breach in the past three years.

The education tech giant, which last year was acquired by Thinkful for $80 million, said hackers stole 700 current and former employee records, including their names and Social Security numbers.

Chegg said it enlisted an outside forensic firm — without naming the firm — and notified law enforcement of the breach.

A spokesperson for Chegg did not respond to a request for comment.

The education tech company has been beset by several security incidents. In 2018, hackers made off with 40 million customer records, forcing the company to reset user passwords. Then, almost exactly a year later and just days after Thinkful’s acquisition, Chegg confirmed another data breach.

Just yesterday, a federal judge in Baltimore granted Chegg’s motion to force a lawsuit stemming from the 2018 data breach into arbitration.

At the time of writing, Chegg’s stock price was up by 2% in early-afternoon trading in New York.

Apple and Google have released the very first version of their exposure notification API, which they previously called the contact tracing API . This is a developer-focused release, and is a seed of the API in development with the primary intent of collecting feedback from developers who will be using the API to create new contract tracing and notification apps on behalf of public health agencies.

Last week, Apple CEO Tim Cook told EU Commissioner Thierry Breton that the API would be arriving shortly, and this version is indeed now available – albeit to a specific and limited group that includes select developers working on behalf of public health authorities globally, according to the companies. This is a test release that’s intended to provide the opportunity for development and feedback in advance of the API’s public release in mid-May, at which time developers will be able to use the software feature on devices with publicly available apps released through the iOS and Google software stores, respectively.

Apple and Google say they will be providing additional details this coming Friday about the API and its release, including sample code to show how it operates in practice. Both are intent on providing updates to the documentation as they become available, and in adding access to new developers throughout testing, though this will be gated because the companies are limiting access to this API to authorized public health authorities only.

Already, Apple and Google have made available documents that describe the specification in detail on its respective developer websites, and it provided an update with improvements to the tech’s functioning, including in terms of its protection of user privacy, and the ease with which developers can deploy it within their apps, as discussed during a press call last week.

This update includes an added ability for health authorities to define and calcite an exposure risk level for individuals based on their own criteria, since that varies organization to organization. This will be variable based on approximate distance of an individual to a confirmed exposed COVID-19 patient, as well as the duration of that exposure. Developers can customize notification messaging based on their defined exposure levels to ensure alerts correspond correctly to calculated risk.

Apple and Google first announced the combined API and eventual system-level contact tracing feature on April 10, and intend to release the first version of the API publicly in mid-May, with the system-level integration to follow in the coming months. The tech is designed to be privacy-preserving, ensuring that contact IDs are rotating and randomized, and never tied to an individual’s specific identifying information.

Twitter is making its possible for developers and researchers to study the public conversation around COVID-19 in real-time with an update to its API platform. The company is introducing a new COVID-19 stream endpoint to those participating in Twitter Developer Labs — a program that offers access to new API endpoints and other features ahead of their public release. The new COVID-19 endpoint will allow approved developers to access COVID-19 and coronavirus-related tweets across languages, resulting in a dataset that will include tens of millions of tweets daily, Twitter says.

The data can be used to research a range of topics related to the coronavirus pandemic, including things like the spread of the disease, the spread of misinformation, crisis management within communities, and more.

Developers may also use the new dataset to build machine learning and data tools to help the scientific community answer key questions about COVID-19, Twitter notes.

The company itself will determine which tweets qualify for inclusion in this dataset based on which words are used in the tweets — like “COVID-19” or “coronavirus,” for example. It will also pull tweets that use common coronavirus hashtags, which tend to be language-agnostic. These, by the way, are the same keywords that Twitter uses for its existing COVID-19 topic, which is powered by a Tweet annotation.

Twitter will also filter this data stream to exclude spammy and low-quality content.

While access to endpoint will be free, Twitter will be hand-selecting which developers and researchers will be granted permission to use it. Developers will also have to inform Twitter of their project plan, detail their experience in working with big data, and detail the available resources they have to process such a dataset.

“Given the expertise and computational resources necessary to handle this data, and recognizing the sensitivity of it, we’ve created a dedicated application to access this endpoint and plan to carefully review access requests to ensure they support the public good,” notes Twitter in an announcement. “We also encourage applicants to describe in detail the safeguards they intend to implement to protect the privacy and safety of people represented in these data, including applicable institutional reviews and ethics screenings,” it says.

Twitter says it will prioritize processing applications from researchers and developers with established expertise and resources.

The application and endpoint are launching today. No developers or researchers had early access.

In addition to the application requirement to access the new endpoint, developers will also need to already have an approved developer account and adhere to the terms of Twitter’s Developer Agreement and Policy, which provides guidance about restricted use cases relevant to projects analyzing health-related topics. To ensure the data is kept in compliance, approved developers will also gain access to a new compliance stream endpoint, as well.

The new endpoint is one of several efforts Twitter has made since the coronavirus outbreak began focused on connecting people with information about the pandemic. Across its platform, it introduced changes to make COVID-19 facts and reliable health information more accessible. It also updated its ads policy, partnered with relief organizations, and matched fundraising donations, among other things.

“Public conversation can help the world learn faster, solve problems better and realize we’re all in this together,” said Twitter CEO Jack Dorsey, in a statement released today. “Facing a devastating global pandemic really brings that, and Twitter’s role, to light,” he added.

The year’s already off to a rocky start for hardware companies, and we’re only beginning to see the true impact COVID-19 will ultimately have on the market. Arm — the UK company behind the designs of chips for everyone form Apple to Qualcomm to Samsung — is hoping to kickstart developing by offering up access to around 75% of its chip portfolio for free to qualified startups.

The move marks an expansion of the company company’s Flexible Access program. With it, Arm will open access to its IP for early stage startups. While some of the biggest companies pay the chip designer big bucks for that information, the cost can be prohibitive for those just starting out.

“In today’s challenging business landscape, enabling innovation is critical – now more than ever, startups with brilliant ideas need the fastest, most trusted route to success and scale,” SVP Dipti Vachani, said in a statement. “Arm Flexible Access for Startups offers new silicon entrants a faster, more cost-efficient path to working prototypes, resulting in strengthened investor confidence for future funding.”

It’s a nice bit of access for up and coming startups. Of course, Arm’s not simply doing this out of the goodness of its heart. The company certainly has a vested interested in helping foster hardware startups amid what could shape up to be an unprecedented slow down for the industry after a few years of rapid funding and growth.

Interested parties can access the full list of available IP here. Arm believes the launch of Flexible Access for Startups could help companies accelerate time to market by up to a year.

Every time we realize something new about the coronavirus, it’s always worse than we thought: maybe we don’t develop immunity to it; maybe six feet of social distancing isn’t far enough; maybe the spread won’t wane in warmer weather.

Every time we realize something new about the economy, it’s equally bleak: maybe we can’t safely reopen for months (Georgia and South Carolina notwithstanding), maybe unemployment will top Great Depression levels, maybe travel won’t resume till mid-2021, maybe most of the businesses who have shuttered their doors will never return.

But like everything in life, within all of the bad, there’s usually some good too. And for businesses who have to deal with regulation, this may be an unusually good time to get what you need.

The federal government does not have to balance its budget, which is why multi-trillion dollar legislation like the CARES Act is possible. But cities and states have to produce a budget every fiscal year that at least looks balanced on paper. In good times, that leads to lots of new spending. But in bad times, it requires a painful series of cuts, tax and fee increases and tough decisions that are normally avoided by politicians at all costs. All of that creates opportunity for startups.

Local government will desperately need new sources of revenue. Figuring out what a politician is going to do isn’t that difficult: identify the choice with the least political downside and that’s almost always the answer. That’s why controversial policy issues like legalizing mobile sports betting or recreational marijuana often stall in state legislatures when the budget is flush (disclosure, we’re investors in FanDuel) . But now, lawmakers face a very different situation: to balance the budget, they will either need to enact deep spending cuts, raise fees and taxes, or find new sources of revenue. All of a sudden, legalizing gambling and drugs doesn’t seem so risky, politically or substantively.

Any company that can offer material new tax revenues can now see their product or service legalized and permitted in a fraction of the time it would normally take. Companies who can offer direct savings to government can now secure contracts and win procurements at a rapidly faster clip. A broke government is a friendly government. This is the moment to be aggressive.
It was less than a year ago when Amazon tried to build its second headquarters in New York City.

Despite strong support from Governor Andrew Cuomo and tepid support from Mayor Bill de Blasio, the project was widely derided as an unfair corporate boondoggle and Amazon was swiftly run out of town. In good economic times, voters have the luxury of focusing on issues that aren’t critical to their own day-to-day survival and politicians have the luxury of saying no to new jobs and tax revenue to try to score points with the base.

Not anymore. Startups in blue cities and states up and down both coasts have vastly more political leverage than they’ve had in years. Issues like privacy, worker classification reform and fears of AI are all about to take a back seat to pocketbook issues like jobs, crime and access to health care. Startups who can promise to retain jobs can now drive meaningful changes on policy, regulation, permitting, zoning, licensing and everything else they need to operate.

Startups that can offer solutions to living in a pandemic (digital payments, D2C, telemedicine, teleconferencing, tele-anything) will become shiny new toys that lawmakers want to be seen with. Delivery drones, autonomous cars, at home medical testing and other concepts that seem a little edgy will now become ideas that lawmakers have to seriously consider – if a new technology could potentially save lives during a pandemic, you really don’t want to be the politician who killed the idea.

Proposals to screw with startups won’t automatically become the top priority for the San Francisco Board of Supervisors. Facebook even now has a much stronger argument to lobby for Libra (no one in this climate wants to use cash if they can help it). The power dynamic just flipped on its head. But that only works if you understand it and take advantage of it.

In the continual debate over whether tech startups should ask government for permission or beg for forgiveness over the last few years, the zeitgeist has shifted significantly towards asking for permission. The tech-lash against Facebook, Google, Amazon, Apple and Twitter created regulatory headaches for virtually every tech company, even some early stage startups.

All of that just changed. Regulators and lawmakers now have far bigger things to worry about than whether an electric scooter needs a particular type of permit. And if saying no to new ideas from new companies means turning away desperately needed jobs and tax revenue, for all of the same reasons that it was politically salient for lawmakers to reclassify all California sharing economy workers as full time employees or reject Amazon’s overtures or limit the spread of homesharing, the opposite is now true.

Now you get points for creating jobs and avoiding spending cuts. Now you’re far more reticent to tell a constituent that they can’t make a few extra bucks by renting out a room (assuming anyone ever travels again). The label of job killer will start to become politically toxic, even in the most progressive wards, districts and neighborhoods in the bluest cities on each coast. The dynamic is clearly shifting back to begging for forgiveness (don’t be stupid and do things that are clearly illegal but interpreting gray areas of regulation as friendly is now a lot easier).

Unlike the financial crisis in 2008, businesses are not the culprit here. Tech companies are actually even some of the heroes of fighting the coronavirus. But most important, being punitive towards startups is no longer a clear political winner, even in the most liberal cities and states. Even if it seems counterintuitive, now is exactly the time for startups to aggressively seek policy change and regulatory relief.

Politics is about leverage. Startups now have it. They should take advantage of it before things change again.

Less than 24 hours after it was reported that Uber was considering layoffs of 20% of staff, its big rival Lyft is announcing its own cuts.

Today the company said it would be reducing employee count by 17%, working out to 982 employees, and furloughing an additional 288, due to the affects of the COVID-19 pandemic and its impact on Lyft’s business.

It will also put in place salary reductions of 30%  for executive leadership, 20% for vice presidents and 10% for all other employees, while members of Lyft’s board of directors will forego 30% of their cash compensation for the second quarter of 2020.

Lyft said that it will take a restructuring charge of between $28 million and $36 million as a result, which will come through in its Q2 financials.

The news comes in the wake of technology sector layoffs now crossing 32,221 people since March 11. Transportation has been hit in a particularly tough way, in part because people are not moving around as much due to stay-at-home orders; and in part because of the worries of infection that people have around driving in vehicles in close quarters where others have been.

More to come.

Google is making a big push for its Zoom competitor, Samsung outlines how COVID-19 is reshaping consumer demand and Ford delays its autonomous vehicle plans.

Here’s your Daily Crunch for April 29, 2020.

1. Google is making Meet free for everyone

Meet is Google’s video meeting tool for businesses. (Hangouts is the company’s free consumer equivalent.) Until now, you could participate in a Meet call without being a paying user, but you needed a paid G Suite account to start calls.

Meanwhile, Google’s parent company Alphabet reported that its business grew more than expected in the first quarter of the year — but with a “significant slowdown” in March.

2. Samsung expects COVID-19 to hurt smartphone and TV sales, but increase demand for memory

More earnings news: In its first-quarter report, Samsung said it expects the COVID-19 pandemic to continue impacting its business for the rest of the year, cutting into sales for smartphones and TVs, but increasing demand for PCs, servers and memory chips as people continue to work or study from home.

3. Ford postpones autonomous vehicle service until 2022

“Understanding customer behavior is a critically important part of building a new mobility service built around trust and making people’s lives easier,” the company said. In fact, Ford said COVID-19 has already affected consumer behavior in China, prompting the automaker to turn to online sales.

4. As COVID-19 misinformation grows, YouTube brings video fact-checking to the US

Fact-check articles will begin appearing in relevant search results, using information pulled from a dozen or so third-party publishers, including The Dispatch, FactCheck.org, PolitiFact and The Washington Post Fact Checker.

5. A conversation with Sasha Astafyeva, Atomico’s new consumer-focused investment partner

We caught up with Astafyeva for a conversation that spanned the coronavirus crisis’ impact on her area of interest, new trends during and potentially after lockdown and how it feels to be a consumer-focused investor in turbulent times. (Extra Crunch membership required.)

6. Spotify Q1 beats on sales of $2B with monthly active users up 31% to 286M

The coronavirus may be decimating some corners of the economy, but the impact on the digital music — as evidenced by the world’s biggest music streaming company — appears to be minimal.

7. Smart contact lens startup Mojo Vision raises $51M

Mojo Vision’s technology still felt early-stage when we met with the company back at CES — but the demos we did see were enough to convince us that there really could be something to the California startup’s smart content lens technology.

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