Author: azeeadmin

China’s technology scene has been in the news for all the wrong reasons in recent months. In the wake of the scuttling of Ant Group’s IPO, the Chinese government has gone on a regulatory offensive against a host of technology companies. Edtech got hit. On-demand companies took incoming fire. Ride-hailing? Check. Gaming? You bet.

The result of the government fusillade against some of the best-known companies in China was falling share prices. The damage topped $1 trillion among just public Chinese companies listed abroad.

The Exchange explores startups, markets and money.

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

What about startups in sectors that were reformed overnight? If their public comps are any indication, even more wealth was deleted in the recent wave of crackdowns.

The Exchange was curious about the impact of the Chinese government’s actions on the venture capital market. The Chinese startup economy has produced a number of world-leading companies. Tencent and Alibaba, yes, and even Baidu have become well-known for a reason. Could regulatory changes shake up the venture model that helped grow the country’s largest tech concerns?

After we checked in on the same question this Monday, SoftBank provided a partial answer, noting yesterday that it is pausing investments in China. The Japanese teleco, conglomerate and investing powerhouse has been deploying capital at a rapid pace in recent weeks. That will slow, at least in China. Here’s the WSJ:

The regulatory initiative in China has become so unpredictable and widespread that SoftBank and its funds are planning to hold off on investing much more there until the risks become clearer, [SoftBank CEO Masayoshi Son] said at an earnings press conference in Tokyo.

Is SoftBank early to its decision to shake up its investing strategy, missing Chinese deals for some time? Or is it late? We secured data from PitchBook and Traxcn that paints a somewhat surprising picture of venture capital activity at least thus far in Q3 2021.

But first, a reminder of how well China’s venture capital market was performing as 2020 eased its way into 2021.

Before the shakeup

China had a reasonably good Q2 2021 despite the turmoil.

Sure, funding flowing into Chinese startups was down 18% compared to Q4 2020, per CB Insights, but that quarter had recorded an all-time high of $27.7 billion. With $22.8 billion raised, Q2 2021 still did better than every other quarter since Q2 2016 with the exception of Q2 2018, Q4 2020 and Q1 2021. Indeed, the ecosystem had started to cool down in late 2018 before picking up pace again at the end of 2020.

However, that’s only one way to look at the numbers. If you compare recent Chinese venture results with other regions, it underperformed. During Q2 2021, U.S. funding reached a new high of $70.4 billion, with places like Latin America, Canada and India also establishing new records.

This also means that China lost ground as to its share of global startup dealmaking, and the same goes for unicorn creation. According to Tech Buzz China’s summary of CB Insights data, the U.S. accounted for 132 unicorn births between January 1 and June 16, 2021, compared with just three in China.

Slightly falling quarterly venture capital totals and a notable decline in unicorn formation does not a startup winter make. So let’s look at what’s happened more recently.

So, what about Q3?

The thesis that there would be an instantly obvious slowdown in Chinese venture capital activity is not supported by the data we secured.

Samsung is set to introduce a whole bunch of new products, starting today at 7 AM PT/10 AM ET. I wrote a whole bunch of words about what to expect from the company’s latest Unpacked event. It’s a long list and a kind of return to the pre-pandemic days, back before companies started taking liberties by holding separate events for all their new products.

You can stream the proceedings here:

Here’s the short bulleted version, based on a deluge of leaks over the past several weeks and months:

• Galaxy Z Fold 3
• Galaxy Z Flip 3
• Galaxy Watch 4
• Galaxy Buds 2

Samsung has more or less confirmed the first three already. The company gave some substantial details on its forthcoming foldables. We’ve also heard a good deal about the new smartwatch — from a software standpoint, at least. Both Samsung and Google have been discussing their upcoming joint software platform.

More info on all of the above, soon. And perhaps even a surprise or two? Perhaps. We’ll be following along with the latest.

Trust wants to give smaller businesses the same advantages that large enterprises have when marketing on digital and social media platforms. It came out of beta with $9 million in seed funding from Lerer Hippeau, Lightspeed Venture Partners, Upfront Ventures and Upper90.

The Los Angeles-based company was started in 2019 by a group of five Snap alums working in various roles within Snap’s revenue product strategy business. They were building tools for businesses to fund success with digital marketing, but kept hearing from customers about the advantage big advertisers had over smaller ones — the ability to receive good payment terms, credit lines, as well as data and advice.

Aiming to flip the script on that, the group created Trust, which is a card and business community to help digital businesses navigate the ever-changing pricing models to market online, receive the same incentives larger advertisers get and make the best decision of where their marketing dollars will reach the furthest.

Trust dashboard

Trust does this in a few ways: Its card, built in partnership with Stripe, enables businesses to increase their buying power by up to 20 times and have 45 days to make payments on their marketing investments, CEO James Borow told TechCrunch. Then as part of its community, companies share knowledge of marketing buys and data insights typically reserved for larger advertisers. Users even receive news via their dashboard around their specific marketing strategy, he added.

“The ad platforms are a wall of gardens, and most people don’t know what is going on inside, so our customers work together to see what is going on,” Borow said.

The growth of e-commerce is pushing more digital marketing investments, providing opportunity for Trust to be a huge business, Borow said. E-commerce sales in the U.S. grew by 39% in the first quarter, while digital advertising spend is forecasted to increase 25% this year to $191 billion. Meanwhile, Google, Facebook, Snapchat and Twitter all recently reported rapid growth in their year-over-year advertising revenues, Borow said.

The new funding will go toward increasing the company’s headcount.

“We have active customers on the platform, so we wanted to ramp up hiring as soon as we went into general release,” he added. “We are leaving beta with 25 businesses and a few hundred on our waitlist.”

That list will soon grow. In addition to the funding round, Trust announced a strategic partnership with social shopping e-commerce platform Verishop. The company’s 3,500 merchants will receive priority access to the Trust card and community, Borow said.

Andrea Hippeau, partner at Lerer Hippeau, said she knew Borow from being an investor in his previous advertising company Shift, which was acquired by Brand Networks in 2015.

When Borow contacted Lerer about Trust, Hippeau said this was the kind of offering that would be applicable to the firm’s portfolio, which has many direct-to-consumer brands, and knew marketing was a huge pain point for them.

“Digital marketing is important to all brands, but it is also a black box that you put marketing dollars into, but don’t know what you get,” she said. “We hear this across our portfolio — they spend a lot of money on ad platforms, yet are treated like mom-and-pop companies in terms of credit. When in reality Casper is outspending other companies by five times. Trust understands how important marketing dollars are and gives them terms that are financially better.”

Impossible sent me a tube of its plant-based sausage to try ahead of today’s news. As an aside, the big box with several frozen packs inside was maybe not the most efficient way to send it, but I don’t know, maybe there’s no great way to send frozen foodstuffs. Someone feel free to disrupt that industry at your earliest convenience.

That said, I’ve got no complaints about the contents. I’ve tossed the sausage (Notsage? Fauxsage?) into a couple of pasta dishes and am currently defrosting what’s left for dinner tonight. As someone who hasn’t eaten pork or beef for probably a decade and a half, I’m probably not the best judge of how close they’ve come to the actual thing, but I dunno, it tasted pretty much what I remember sausage tasting like.

Image Credits: Impossible

The product is Impossible’s follow-up to its popular Burger, introduced earlier at a number of diners across the U.S. It’s also gone on sale at around 200 coffee shops around Hong Kong. Today, the company is announcing retail availability for the product, as it arrives in a number of major supermarket chains. The list includes, Kroger, Ralphs, King Soopers, Fred Meyer, Safeway, Albertsons, Wegmans, Stop & Shop, Hannaford, Giant Martin’s, Giant Food, Sprouts Farmers Market and Heinen’s.

The product is entirely plant-based and contains no cholesterol or trans fats, with nine grams of fat, including four grams of saturated fat per a 56 gram serving. That also includes seven grams of protein and zero grams of pigs. Impossible lists the number of pigs killed for food each year in the U.S., but I’ll save you that and just say…it’s a lot of pigs. Americans eat a lot of pigs.

Image Credits: Impossible

The product also uses 79% less water, 41% less land and emits significantly less greenhouse gas than pork production. I can also attest to the fact that it cooks quite well in a skillet.

Cart.com, a Houston-based company providing end-to-end e-commerce services, brought in its third funding round this year, this time a $98 million Series B round to bring its total funding to $143 million.

Oak HC/FT led the new round of funding and was joined by PayPal Ventures, Clearco, G9 Ventures, Mercury Fund, Valedor Partners and Arsenal Growth. Strategic investors in the Series B include HeyDay CEO Sebastian Rymarz and Casper CEO Philip Krim. This new round follows a $25 million Series A round, led by Mercury and Arsenal in July, and a $20 million seed round from Bearing Ventures.

Cart.com CEO Omair Tariq, who was previously an executive at Home Depot and COO of Blinds.com, co-founded the company in September 2020 with Jim Jacobson, former CEO of RTIC Outdoors.

Tariq told TechCrunch that the company provides software, services and infrastructure to small businesses so they can scale online. Cart.com is taking the best parts of selling direct-to-consumer on marketplaces like Amazon and Shopify to create value for brands. Tariq said he is pioneering the term “e-commerce-as-a-service” to bring together under one platform a suite of business tools like store software, marketing, fulfillment, payments and customer service.

“We see the power of having an interconnected platform,” Tariq said. “There also needs to be a hybrid between selling direct-to-consumer on Amazon and Shopify for companies that don’t have the money to pay for a percentage of their sales and receive no access to customers or data, and needing 20 different plug-ins that are not connected.”

Cart.com went after the new funding after seeing validation of its idea: brands coming to them wanting more products and services, which led to acquisitions. The company has acquired seven companies so far, including — AmeriCommerce, SpaceCraft Brands and, more recently, Dumont Project and Sauceda Industries. Tariq is planning for another three or four by the end of the year.

In addition, it received inbound interest from strategic investors, like Oak and PayPal, which Tariq said was going to enable the company “to be more successful faster.”

Allen Miller, principal at Oak HC/FT, said after spending time with Tariq to understand his vision about Cart.com’s software, payments and services, he felt that the company was doing something that didn’t exist in today’s commerce infrastructure.

He said that Cart.com is well positioned to help companies, like those with $1 million in sales, stay focused on growing the business while Cart.com stitches together all of the tools for them to operate in the background.

“It’s a unique offering to merchants that has a high value proposition,” Miller said. “The vision and drive that Omair and Jim have, along with an inspiring mission they want to achieve — to be brand-centric and help the next generation of merchants. These guys also have a good playbook on finding companies and teams to acquire, as well as handling the post M&A to have everyone on one platform.”

The new financing will enable Cart.com to further invest in technology development and to increase headcount by at least 15 times, with plans to go from fewer than two dozen employees to more than 300 team members by the end of the year. The company has nearly 70 jobs posted on its website for positions in engineering, technology, digital marketing and e-commerce. Tariq also expects half of the funds to go toward more acquisitions.

Cart.com currently serves over 2,000 e-commerce brands, including GNC, Haymaker Coffee, KeHE and Gravatiq, and processes more than $700 million in gross merchandise value per year. The company saw revenue increase 400% since the platform’s launch in November.

In addition, the company has nine fulfillment centers across the country, and is increasing its access to reach 80% of the U.S. population with two-day shipping, Tariq added.

“We are giving the power back to brands by giving them what they need to operate e-commerce,” he said. “There are still a few pieces to fill in so brands have a unified experience, but with us, they can add fulfilment, marketing or customer conversion tools with the click of a couple of buttons.”

Will Clem knows all too well about restaurant workers not showing up for a shift. At least one person would have car trouble or need to stay home with sick children, and it became a common occurrence on the weekends for the co-founder of Memphis Meats and owner of Baby Jacks BBQ in Memphis.

Needing to fill a shift one Friday night, Clem decided to prop his laptop in the drive-thru lane of one of his restaurants and took orders from home by remoting into the system. No one noticed that he wasn’t actually taking orders from the kitchen itself. Thus came the idea for Bite Ninja, a remote hiring technology platform for restaurants.

Clem connected with Orin Wilson to start the company in 2020 and worked for a year on the technology before launching it in March. Today, the company announced $675,000 in pre-seed funding led by Y Combinator, AgFunder and Manta Ray.

With many restaurants unable to find workers as a result of the global pandemic, Clem and Wilson wanted to build a technology that would enable restaurants to go back to normal operating hours, or even reopen their stores. At the same time, the workers, or “Ninjas” as they are referred to, can work the drive-thru or counter for a lunch or dinner rush shift from home, but appear on-screen to customers via menu boards, Wilson said.

Bite Ninja drive-thru. Image Credits: Bite Ninja

“When a restaurant is slammed, you need an army of people to work the rush, but it is not reasonable to ask them to get in their uniform and get in their cars, last-minute, to clock in for just an hour or two,” he added. “They have control of their schedule and can pick the right shift for them. It is so popular that we typically have five to 10 people bidding on each shift.”

Bite Ninja is providing a better experience and reaches potential workers that would not necessarily have an interest in performing fast food work. Many of the 3,000 Ninjas already working with the company are stay-at-home moms and retirees with customer service experience, but who can’t physically come into a store, Clem said. In addition, the company is working with the Nurse-Family Partnership to help women get back into the workforce.

The company initially ran three pilot programs and has expanded services to curbside and front cashier stations. The funding will enable Bite Ninja to scale initiatives, hire additional software engineers and prepare for a rollout at national food chains.

Since launching earlier this year, Bite Ninja is already being used in a few thousand stores.

Manuel Gonzalez, partner at AgFunder, said restaurants are a big part of entrepreneurship, but the pandemic forced more than 110,000 of them out of business.

“Bite Ninja’s solution is one that decreases costs to restaurant owners, but increases the income of the worker,” he said. “It also helps entrepreneurs and the community because restaurants are important for economic, cultural, community and social points of view.”

Most people probably don’t realize just how much our devices are time driven, whether it’s your phone, your laptop or a network server. For the most part, time keeping has been an esoteric chore, taken care of by a limited number of hardware manufacturers. While these devices served their purpose, a couple of Facebook engineers decided there had to be a better way. So they built a new more accurate time keeping device that fits on a PCI Express (PCIe) card, and contributed it to the Open Compute Project as an open source project.

At a basic level, says Olag Obleukhov, a production engineer at Facebook, it’s simply pinging this time-keeping server to make sure each device is reporting the same time. “Almost every single electronic device today uses NTP — Network Time Synchronization Protocol — which you have on your phone, on your watch, on your laptop, everywhere, and they all connect to these NTP servers where they just go and say, ‘what time is it’ and the NTP server provides the time,” he explained.

Before Facebook developed a new way of doing this, there were basically two ways to check the time. If you were a developer, you probably used something like Facebook.com as a time checking mechanism, but a company like Facebook, working at massive scale, needed something that worked even when there wasn’t an internet connection. Companies running data centers have a hardware device called Stratum One, which is a big box that sits in the data center, and has no other job than acting as the time keeper.

Because these time-keeping boxes were built by a handful of companies over years, they were solid and worked, but it was hard to get new features. What’s more, companies like Facebook couldn’t control the boxes because of their proprietary nature. Obleukhov and his colleague research scientist, Ahmad Byagowi began to attack the problem by looking for a way to create these devices by building a PCIe card with off-the-shelf parts that you could stick into any PC with an open slot.

Image Credits: Facebook

They literally drew the first design on an iPad and began to build that vision into a prototype. A time appliance relies on a couple of key components: a GNSS receiver and what’s called a high stability oscillator. In a blog post describing the project, Obleukhov and Byagowi explained the role of these two parts:

“It all starts from a GNSS receiver that provides the time of day (ToD) as well as the 1 pulse per second (PPS). When the receiver is backed by a high-stability oscillator (e.g., an atomic clock or an oven-controlled crystal oscillator), it can provide time that is nanosecond-accurate. The time is delivered across the network via an off-the-shelf network card,” the two engineers wrote.

It all sounds pretty basic when described like this, but it’s actually quite complex and perhaps that’s why nobody had ever thought to attack the problem in this way, simply accepting that the current methods of determining time worked fine. But these two Facebook engineers were annoyed by the limitations of these approaches and decided to build something better themselves.

“A lot of it came from frustration. We were frustrated with whatever exists in the market, and we needed certain features like security features to maintain different things and monitor what’s going on. And we had to always ask the vendors [for these new features] and every time a request would take like six months to one year, and [it wouldn’t be exactly what we wanted] and we had to change things all the time, so that’s why we had to basically make this from scratch in this way,” Obleukhov said.

One thing that made it possible to put a time keeping device on a PCIe card was the advances in miniaturization of the atomic clock/oscillator. So when you combine the timing of their frustration with the current capabilities of the technologies, they realized they could do this themselves if they dedicated themselves to the task.

As the design began coming together, the engineers decided to make it flexible to enable engineers to play off the basic design and drop in whatever components met their needs. Some might need highly sophisticated expensive parts, but others could get away with much cheaper parts, depending on their requirements.

They also decided early on to open source the design process, and to involve the Open Compute Project so that other companies and engineers could contribute to the design. “It was actually going to be open source from the get-go, and the reason for that is we needed to have community support. I didn’t want it to be just one in-house project and let’s say if I lost interest or the businesses lost interest [it could go away]. I wanted this to [keep going] regardless [of what happened],” Obleukhov said.

Today there are a dozen vendors involved in the project and a number of cards out there including the one designed by these engineers, as well as a commercial offering from Orilia, but the goal is to continue improving the design, and by making it open source, the community of companies and engineers involved will continue to improve it.

US cybersecurity firm NortonLifeLock has confirmed it is acquiring British rival Avast in order to create a global consumer security powerhouse.

The agreement, which comes just weeks after both companies confirmed they were in advanced discussions regarding a possible combination of the two brands, will see Avast stockholders receive cash and shares that value the deal at $8.1 billion to $8.6 billion. That makes this merger the third-largest cybersecurity acquisition of all time, following Thoma Bravo‘s $12.3 billion takeover of Proofpoint and Broadcom’s $10.7 billion acquisition of Symantec’s enterprise business. 

NortonLifeLock, formed in 2019 as a spin-off from Symantec following the latter, says the deal will create an industry-leading consumer cyber safety business, unlock approximately $280 million of annual gross cost synergies, and dramatically expand its user numbers thanks to Avast’s 435 million-strong customer base.

“With this combination, we can strengthen our cyber safety platform and make it available to more than 500 million users,” NortonLifeLock CEO Vincent Pilette said in a statement. “This transaction is a huge step forward for consumer cyber safety and will ultimately enable us to achieve our vision to protect and empower people to live their digital lives safely.”

Avast, founded in 1988, focuses on cybersecurity software for consumers and small and medium-sized businesses and describes itself as one of the largest security companies. However, the company has not been without controversy during its near-25-year history; Avast was forced to shut down its marketing technology subsidiary Jumpshot last year after it was found to be peddling web browsing data that could be linked to individual users.

Once NortonLifeLock’s acquisition of the company is complete, Pilette will remain CEO of the new business, while Avast CEO Ondrej Vlcek will become president and join the board, the companies said.

“Our talented teams will have better opportunities to innovate and develop enhanced solutions and services, with improved capabilities from access to superior data insights,” Vlcek said. “Through our well-established brands, greater geographic diversification and access to a larger global user base, the combined businesses will be poised to access the significant growth opportunity that exists worldwide.”

The final name of the merged company has yet to be determined, but NortonLifeLock has confirmed it will be dual headquartered in the Czech Republic and Tempe, Arizona, and will seek to cut its number of employees from 5,000 workers to around 4,000 over the next two years. The combined company will be listed on the Nasdaq, rather than Avast’s current London Stock Exchange home.

The deal, which has been confirmed just weeks after NortonLifeLock bought free antivirus provider Avira for £360 million, is expected to close in mid-2022. 

Students around the country are about to return to school after the summer holiday, and they’re doing so at a time when both coronavirus transmission and the effects of climate change are mounting. Last year, HopSkipDrive, a rideshare platform for kids, had to let go much of its staff amid school lockdowns. Now, the company is betting that demand for its rideshare service will increase as parents send their kids back to school. To help fund that growth and expand into 30 new markets over the next year and a half, HopSkipRide raised $25 million in a Series C.

“We are also continuing to invest in our route optimization software, which just helps districts get more efficient and greener,” Joanna McFarland, CEO and co-founder, told TechCrunch. “By reducing overall fleet size, we play a significant role in the overall acceleration of the electrification of the entire yellow bus network.”

McFarland also said HopSkipDrive plans to use the new cash injection, which came from Energy Impact Partners, Keyframe Capital, FirstMark Capital and 1776 Ventures, to invest in electrification initiatives that will spur the company’s goal of helping its CareDrivers transition to electric vehicles affordably via partnerships with OEMs. Currently, hybrid or electric vehicles make up 19% of the startup’s CareDriver network vehicles, which are owned by gig economy workers similar to Uber or Lyft.

Unlike those rideshare giants, however, HopSkipDrive’s drivers have over five years of caregiving experience, and as a result, are predominantly women who enjoy flexible work schedules and the ability to contribute to the ridesharing economy without driving sketchy drunk people around at night.

HopSkipDrive is among a small handful of emerging startups dedicated to modernizing the public school bus system. Zūm, another student transportation service, has a similar mission statement with a different path to market. Whereas Zūm takes over the entire transportation system and even has lofty goals of acquiring 10,000 electric buses by 2025, HopSkipDrive focuses more on meeting the transportation needs that don’t neatly fit on a school bus or on a school route. 

“I think prior to Covid, we were really seen as an alternative transportation solution for districts, so helping with individualized transport solutions for students with special needs, for students experiencing homelessness or in foster care, and that’s the core service we offer today,” said McFarland. “But as we’ve seen during Covid, all of these trends have only been accelerated and districts have had to deal with a lot more of that than they ever have in the past, but they’re also suffering from a severe bus driver shortage that is reaching a critical point. So anytime you have less than 12 kids on a school bus, we are a cost effective solution, and we are also a much cleaner solution.”

HopSkipDrive’s more complementary approach has helped the company acquire contracts with over 300 districts in nine states plus Washington, D.C. During the pandemic, the startup signed on about 150 new contracts, and this year has renewed 100% of its existing contracts, many of them with price increases, according to McFarland.

Even as Delta variant cases continue to rise to record levels, schools are planning to reopen, which means services like HopSkipDrive’s will be essential. McFarland says the company has Covid SafeRide standards, which include policies around sanitization and mask-wearing, as well as anonymous exposure tracing via the app. 

“I don’t think we’ll see school closures again like we did in 2020,” said McFarland. “I think the tide has turned where everybody realizes that the cost of keeping kids out of school was far greater than the risk of them attending school in person.” 

ChargePoint has made its second acquisition since going public in March, purchasing European electric fleet management company ViriCiti for €75 million ($88 million) in cash. The news comes just a few weeks after the EV charging network operator announced the purchase of European charging software company has·to·be.

Like the has·to·be buy, this newer deal will beef up ChargePoint’s portfolio of hardware and vehicle management software for electric fleet customers, as well as add another 2,500 networked ports and 3,500 connected vehicles to its growing portfolio. ViriCiti customers include Chicago Transit Authority, San Francisco Municipal Transportation Authority, British public transportation company Arriva and Berlin’s main public transport service Berliner Verkehrsbetriebe.

Beyond this customer base, ChargePoint CEO Pasquale Romano told TechCrunch the acquisition of ViriCiti will give the company access to a much larger software feature set for customers beyond ChargePoint’s core offerings of charger management and vehicle charger scheduling, like battery health monitoring, vehicle operations data and greater vehicle telematics capabilities.

“It’s really important for us here to make it easy for fleets to electrify and this [acquisition] is all about making us continually having the most complete offering for fleets,” Romano said.

ChargePoint operates the largest vehicle charging network in North America, with more than 115,000 charging points globally. The company also offers customers access to another 113,000 public charging spots through network roaming agreements. While the company might be best known for this extensive branded network, it also has a cloud subscription platform, as well as a considerable commercial and fleet division. The company went public in March after merging with blank-check company Switchback Energy Acquisition Corporation.

Some of ViriCiti’s services, like battery health monitoring, could be applicable for residential customers, or even simply for fleet customers that let employees take home or use a company vehicle full-time. “If you have vehicles that go home with the driver […] it would stand to reason that what you need to do in the take-home scenario is, your infrastructure needs to look like a logical extension of the infrastructure that you would have in your depots. So we’re pleasantly surprised at how much commercial and residential relevance there is.”

Crucially, ChargePoint will also be absorbing ViriCiti’s more than 50-person workforce, a whole team of mostly software engineers that will transfer their expertise to the new company. “If you just want to see evidence of where our mindset is, look at how many software engineers [are] in the sum total of those two acquisitions,” Romano said. “It’s the majority of both of those companies’ staffs are engineers, and they’re all software in general […] You can see where our focus is in terms of in terms of investment.”