Author: azeeadmin

22 Mar 2019

Keatz, a European ‘cloud kitchen’ startup, raises further €12M

Keatz, one of a growing number of so-called “cloud kitchens” — delivery only restaurant brands running on the rails of Deliveroo and UberEats — has raised €12 million in new funding.

Backing the round are existing investors Project A Ventures, Atlantic Labs, UStart, K Fund and JME Ventures, who are joined by RTP Global. It adds to €7 million raised last May, and will be used by the Berlin-based company to further expand its roll-out of cloud kitchens across Europe.

Launched in Spring 2016, Keatz now operates 10 cloud kitchens across Europe, having expanded beyond Berlin to Amsterdam, Madrid, Barcelona and Munich. The startup’s network of satellite kitchens are designed negate the high front-of-house costs found in conventional restaurants, while also selling takeout food that is better suited to delivery.

“We believe the last unsolved part in food delivery is the preparation of food itself,” Keatz co-founder Paul Gebhardt tells TechCrunch. “Delivery food today is often compromised and sold by companies focusing on hospitality and not delivery food. Classical brick and mortar restaurants simply have a different business model, namely hospitality, which is all about the experience and location and the food is meant to be eaten immediately. Nobody at Nandos or Byron Burger designed the food keeping in mind that the food might travel on a Deliveroo bike for another 15 miles, mostly upside down in a delivery bag”.

Similar to other cloud kitchen startups, such as France’s Taster, Gebhardt says Keatz is changing this by focusing exclusively on food “made for delivery,” including designing dishes that can withstand a minimum 15 journey. The startup has a portfolio of eight delivery-only food brands, which are all prepared in the same shared kitchens.

“Our kitchens are usually between 100-200 square metres big and serve a delivery radius of 1-2 kilometres and we sell exclusively on existing delivery platforms, such as Deliveroo, UberEats, Glovo, JustEat, Delivery Hero, and TakeAway. Food arrives warm in nice sustainable packaging,” he says.

Meanwhile, although Gebhardt thinks the future of takeout food will ultimately be drones delivering robot-cooked meals, he says autonomous kitchens are much more in reach than autonomous food delivery and already forms a large part of Keatz’s vision to build “highly automated kitchens”.

“It is much easier for us to iteratively automate our kitchens compared to drone-delivery, which is a fairly binary technological transition,” he explains. “Our existing cloud kitchens today are already much more automated than traditional kitchens, from WiFi-connected convection ovens to a software supported food assembly process. At the end of the day high quality food preparation is an on-demand manufacturing problem: a customer orders a Burrito on UberEats and expects a warm meal 20 minutes later. This is quite a technological challenge we are trying to solve”.

To that end, Keatz’s cloud kitchens can be thought of as akin to a “factory” operator. Rather than developing autonomous kitchen hardware of its own, Gebhardt says the company is partnering with kitchen equipment and automation companies in a similar way to BMW partnering with companies to build its car manufacturing plants.

“Despite our ambition to automate the kitchen, we are also very keen on being a great employer,” he adds, citing above market pay and comprehensive training opportunities. Today, Keatz employs around 200 people across its 10 kitchens in Europe.

22 Mar 2019

Asia’s AnyMind pulls in another $8M and expands into outdoor advertising

Asia-focused marketing startup AnyMind Group has landed a further $8 million in funding to close out its Series B fundraising.

The company announced a $13.4 million raise back in November, but that has now expanded to $21.4 million thanks to an additional injection from VGI Global Media, a Thailand-based firm that specializes in outdoor media, and Tokyo Century, a financial services firm that has invested in Grab among others. Japanese messaging app Line and Mirai Creation Fund, which is backed by Toyota, are among the original investors in the round, which valued the company at $200 million — though it isn’t clear if that number has increased with this new tranche of investment. The company has now raised close to $36 million to date.

AnyMind, which was formerly known as AdAsia, started out with a focus on internet advertising but it has since expanded to offer HR and marketing services. There are also further vertical expansions following this capital. AnyMind is moving into outdoor advertising in Thailand — through a joint venture with VGI focused on covering commuter routes and public transport — while, also in Thailand, it has acquired YouTube media company Moindy. Both of these moves are likely to come with regional expansions further down the line, according to AnyMind, which has a sizeable office in Thai capital city Bangkok.

Finally, AnyMind is also launching another new service: CastingAsia Creators Network, which is a network of social media influencers to complement its marketing and advertising media units.

Here’s more background on the company from our earlier report on the earlier Series B announcement:

AnyMind was founded in April 2016 by Japanese duo CEO Kosuke Sogo, the former managing director of Japan’s MicroAd in APAC, and COO Otohiko Kozutsumi, who had been with MicroAd Vietnam — and both men are ambitious with their plans to grow.

Indeed, despite being less than three years old, AnyMind says it has been profitable since early 2017. It said total revenue for 2017 was $26 million, up from $12.9 million one year previous. In an interview with TechCrunch, Sogo said he expects revenue for this year to be more than double that of 2017. He added that Southeast Asia, where the firm first set its focus, accounts for the lion’s share of revenue, with its one-year Japan operation pulling the remaining 30 percent.

Today, the company has 12 offices — including a product development center in Vietnam — and its services are present in 11 markets across Asia. It has some 330 staff, up from 90 just 18 months ago, and serves more than 1,000 clients across its three businesses.

22 Mar 2019

Tesla’s customer referral program is back weeks after it was killed off

Tesla killed off its customer referral program way back on Feb. 1, 2019 because the popular program was getting too costly to maintain. But now, less than two months later, Tesla is bringing it back with new incentives aimed at rewarding its customers, and bringing in new ones.

Tesla’s customer referral program had offered a bevy of incentives, including six months of free charging at Supercharger stations, launching a chosen photo into deep space orbit, VIP invitations, and even free Roadsters. The prizes, CEO Elon Musk said at the time, were beginning to add cost to its vehicles. In short: incentives to keep existing customers engaged and drive new sales were cutting into the company’s margins.

Tesla announced Thursday it would introduce a new referral program, a decision that was driven, in part, by customer feedback.

“While our previous Referral Program was very successful, it came with significant costs, and ending the program last year allowed us to pass those savings along to customers,” Tesla wrote in a blog post. “We’ve since restructured the program to save the company money while also offering rewards that are super exclusive.”

Under the new program, if a customer buys a new Tesla using a referral code, both the new and existing owners will receive 1,000 miles of free Supercharging.

Each referral also gives people a chance to win a Founder’s Series Model Y each month and a Founder’s series Roadster supercar quarterly, both signed by Elon Musk and Franz von Holzhausen, the company said.

The Model Y, which was revealed in earlier this month, is expected to come to market in fall 2020.

Tesla owners who already have unlimited Supercharging get two chances to win with each referral.

22 Mar 2019

Tesla’s customer referral program is back weeks after it was killed off

Tesla killed off its customer referral program way back on Feb. 1, 2019 because the popular program was getting too costly to maintain. But now, less than two months later, Tesla is bringing it back with new incentives aimed at rewarding its customers, and bringing in new ones.

Tesla’s customer referral program had offered a bevy of incentives, including six months of free charging at Supercharger stations, launching a chosen photo into deep space orbit, VIP invitations, and even free Roadsters. The prizes, CEO Elon Musk said at the time, were beginning to add cost to its vehicles. In short: incentives to keep existing customers engaged and drive new sales were cutting into the company’s margins.

Tesla announced Thursday it would introduce a new referral program, a decision that was driven, in part, by customer feedback.

“While our previous Referral Program was very successful, it came with significant costs, and ending the program last year allowed us to pass those savings along to customers,” Tesla wrote in a blog post. “We’ve since restructured the program to save the company money while also offering rewards that are super exclusive.”

Under the new program, if a customer buys a new Tesla using a referral code, both the new and existing owners will receive 1,000 miles of free Supercharging.

Each referral also gives people a chance to win a Founder’s Series Model Y each month and a Founder’s series Roadster supercar quarterly, both signed by Elon Musk and Franz von Holzhausen, the company said.

The Model Y, which was revealed in earlier this month, is expected to come to market in fall 2020.

Tesla owners who already have unlimited Supercharging get two chances to win with each referral.

22 Mar 2019

Nintendo’s Labo: VR Kit is not Virtual Boy 2.0

Even the most successful tech company is going to have a stumble from time to time. Nintendo’s 45 years in the video game industry is spotted with a few doozies, but none are more infamous than the Virtual Boy. The 1994 portable console was marketed as an early home entry into virtual reality, but in actual reality ended up being little more than a blood-red headache.

Nintendo knew the comparisons to the doomed console would come fast and furiously when it launched its next VR venture, so the company took the time to get it just right. In a sense, Labo VR is a cautious push into the virtual realm. It’s nowhere near the all-in approach of Oculus, Vive or even PlayStation VR, for that matter — but it’s uniquely Nintendo.

Like the first Labo kits, it’s a friendly reminder that Nintendo’s chief job is to surprise and delight, and it happily delivers on both fronts. But just as the Labo piano shouldn’t be mistaken for a real musical instrument, Labo VR ought not be viewed as a real virtual reality.

It’s not just the pop-out cardboard form factor, either. Google made that a perfectly acceptable beginner’s approach to VR. It’s more that Nintendo has taken a very casual approach to all of this. The kit’s virtual reality experience is an extension of Labo itself. It’s no more important than the process of building the headset and various accessories step by step on the app. Or, for that matter, sharing all of the above experiences with others.

During a demo of the new kits in New York this week, Nintendo was quick to point out that the headsets are built without a strap. It claims this was a conscious decision so that the experience can be passed around and shared. I’m sure there are some practical reasons behind this decision as well, but it’s certainly a nice thought.

Virtual reality is, by nature of its form factor, a solitary experience. Labo VR doesn’t have any sort of video-out feature to share the experience on a big screen (for now, at least), so the idea of offering it up in a more social play-and-pass scenario is appealing. This goes double for the fact that, like the original Labo kits, all of the games included fall under the casual banner. The experiences share a common lineage with Nintendo analog titles like Mario Party or Mario Paint.

Your mileage with each title will vary. Certainly some (Bird and Blaster spring to mind) will stay with you longer than others and demand more repeat play. On the whole, each buildable peripheral launches with one (maybe two) compatible games. The good news, however, is that, like Labo, the company packs a lot of controllers (and therefore experiences) into a single kit.

The standard Labo: VR Kit ships with six Toy-Con projects (VR Goggles, Toy-Con Blaster, Toy-Con Camera, Toy-Con Bird, Toy-Con Wind Pedal and Toy-Con Elephant), while the cheaper Starter Set comes with two (Goggles and Blaster). If you go for the latter to dip your toes in the water or just to save on cash, there are a pair of “expansion sets” to get the full experience.

Unlike the last time Nintendo came to town with a Labo press tour, we didn’t actually get any time to build. That said, if previous kits are any indication, that’s half of the fun and value proposition here. Also, the amount of time you’ll spend building varies greatly from project to project — take it from me, someone who spent most of a work morning building that damn piano.

Once built, the VR experience is about on-par with what you’d expect from a Google VR. Again, it’s a set of lenses attached to a hunk of cardboard. This is no Rift or Vive and the immersiveness of your own experience will vary. The graphics are cartoony and oftentimes just large polygons. But a well-crafted casual gaming experience can be enough to pull you out of your own head for a bit. Bird is the best example of this.

The controller clips on the headset, with a Toy-Con popping out the other end like a beak. As a player, you hook your hands on either side of the display and flap along as you play a bird, flying around trees and completing different missions to feed an army of hatchlings. It’s a relaxing reprieve from some of the faster-paced games, as you glide around the skies. Add in the foot-controlled Wind Pedal, and the system delivers a puff of air to your face as you boost your bird, adding to the effect.

Blaster, a big, fun novelty gun, is the most engaging of the bunch. When I ended my demos with some extra time to spare, the Nintendo rep asked me if I wanted to give any of the games another go. The answer was simple. A simple first-person shooter, Blaster pits you against an army of alien blobs. You load the gun by cocking it like a shot-gun, and pull the trigger to an explosive effect.

Honorable mention goes to Doodle, which uses the bizarre elephant-shaped controller. The experience is unique from the rest in that it’s not actually a game, but rather a 3D drawing tool. It’s one of the more clever additions to the pack, though actually drawing on a 3D plane with a cardboard controller shaped like an elephant’s trunk is easier said than done. The implementation is a bit lacking, but it offers interesting insight into where Labo VR might go in the future.

Honestly, I just scratched the surface during my briefing. But there’s little question that Labo VR is a fun and singular experience. There’s also a special screen holder, so users who have rough time with VR can experience a 2D version of the games and accessories. Also, as with the standard Labo kit, Nintendo has bundled in Toy-Con Garage, so users can start building their own games when they tire of the pre-packaged experiences.

If there’s one disappointment in all of this, it’s that it will likely be a while before we see a full standalone VR experience from Nintendo. The idea of playing as Mario, Link and the like in virtual reality is no doubt something of a lifelong dream for plenty of gamers who grew up on the characters. But while Virtual Boy is a quarter-century in the past, the memory still lingers.

Until then, Labo VR is a fully engaging take on VR, and a uniquely Nintendo one, to boot.

21 Mar 2019

Trump promotes Michael Kratsios to US Chief Technology Officer

More than two years into the Trump administration, the long vacant post of U.S. Chief Technology Officer will be filled. Bloomberg first reported that today Trump is elevating Michael Kratsios, current deputy U.S. CTO, to the nation’s top tech position. Prior to his experience within the Trump administration, Kratsios served as chief of staff at Peter Thiel’s investment firm Thiel Capital and as chief financial officer at another Thiel project, the hedge fund Clarium Capital.

The U.S. CTO role was created during the Obama years and three CTOs have served to date, the last of which was former Googler Megan Smith, known for leading early acquisitions at Google before her move to Google.org.

The CTO position advises the president on tech issues, works to shape tech policy and importantly serves as a link to the private sector. In contrast with his predecessors, Kratsios brings a distinct venture capital-colored perspective to the role, which sits within the White House Office of Science and Technology Policy.

21 Mar 2019

Tech regulation in Europe will only get tougher

European governments have been bringing the hammer down on tech in recent months, slapping record fines and stiff regulations on the largest imports out of Silicon Valley. Despite pleas from the world’s leading companies and Europe’s eroding trust in government, European citizens’ staunch support for regulation of new technologies points to an operating environment that is only getting tougher.

According to a roughly 25-page report recently published by a research arm out of Spain’s IE University, European citizens remain skeptical of tech disruption and want to handle their operators with kid gloves, even at a cost to the economy.

The survey was led by the IE’s Center for the Governance of Change — an IE-hosted research institution focused on studying “the political, economic, and societal implications of the current technological revolution and advances solutions to overcome its unwanted effects.” The “European Tech Insights 2019” report surveyed roughly 2,600 adults from various demographics across seven countries (France, Germany, Ireland, Italy, Spain, The Netherlands, and the UK) to gauge ground-level opinions on ongoing tech disruption and how government should deal with it.

The report does its fair share of fear-mongering and some of its major conclusions come across as a bit more “clickbaity” than insightful. However, the survey’s more nuanced data and line of questioning around specific forms of regulation offer detailed insight into how the regulatory backdrop and operating environment for European tech may ultimately evolve.

 

Distractions

21 Mar 2019

To fund Y Combinator’s top startups, VCs scoop them before Demo Day

Hundreds gathered this week at San Francisco’s Pier 48 to see the more than 200 companies in Y Combinator’s Winter 2019 cohort present their two-minute pitches. The audience of venture capitalists, who collectively manage hundreds of billions of dollars, noted their favorites. The very best investors, however, had already had their pick of the litter.

What many don’t realize about the Demo Day tradition is that pitching isn’t a requirement; in fact, some YC graduates skip out on their stage opportunity altogether. Why? Because they’ve already raised capital or are in the final stages of closing a deal.

ZeroDown, Overview.AI and Catch are among the startups in YC’s W19 batch that forwent Demo Day this week, having already pocketed venture capital. ZeroDown, a financing solution for real estate purchases in the Bay Area, raised a round upwards of $10 million at a $75 million valuation, sources tell TechCrunch. ZeroDown hasn’t responded to requests for comment, nor has its rumored lead investor: Goodwater Capital.

Without requiring a down payment, ZeroDown purchases homes outright for customers and helps them work toward ownership with monthly payments determined by their income. The business was founded by Zenefits co-founder and former chief technology officer Laks Srini, former Zenefits chief operating officer Abhijeet Dwivedi and Hari Viswanathan, a former Zenefits staff engineer.

The founders’ experience building Zenefits, despite its shortcomings, helped ZeroDown garner significant buzz ahead of Demo Day. Sources tell TechCrunch the startup had actually raised a small seed round ahead of YC from former YC president Sam Altman, who recently stepped down from the role to focus on OpenAI, an AI research organization. Altman is said to have encouraged ZeroDown to complete the respected Silicon Valley accelerator program, which, if nothing else, grants its companies a priceless network with which no other incubator or accelerator can compete.

Overview .AI’s founders’ resumes are impressive, too. Russell Nibbelink and Christopher Van Dyke were previously engineers at Salesforce and Tesla, respectively. An industrial automation startup, Overview is developing a smart camera capable of learning a machine’s routine to detect deviations, crashes or anomalies. TechCrunch hasn’t been able to get in touch with Overview’s team or pinpoint the size of its seed round, though sources confirm it skipped Demo Day because of a deal.

Catch, for its part, closed a $5.1 million seed round co-led by Khosla Ventures, NYCA Partners and Steve Jang prior to Demo Day. Instead of pitching their health insurance platform at the big event, Catch published a blog post announcing its first feature, The Catch Health Explorer.

“This is only the first glimpse of what we’re building this year,” Catch wrote in the blog post. “In a few months, we’ll be bringing end-to-end health insurance enrollment for individual plans into Catch to provide the best health insurance enrollment experience in the country.”

TechCrunch has more details on the healthtech startup’s funding, which included participation from Kleiner Perkins, the Urban Innovation Fund and the Graduate Fund.

Four more startups, Truora, Middesk, Glide and FlockJay had deals in the final stages when they walked onto the Demo Day stage, deciding to make their pitches rather than skip the big finale. Sources tell TechCrunch that renowned venture capital firm Accel invested in both Truora and Middesk, among other YC W19 graduates. Truora offers fast, reliable and affordable background checks for the Latin America market, while Middesk does due diligence for businesses to help them conduct risk and compliance assessments on customers.

Finally, Glide, which allows users to quickly and easily create well-designed mobile apps from Google Sheets pages, landed support from First Round Capital, and FlockJay, the operator an online sales academy that teaches job seekers from underrepresented backgrounds the skills and training they need to pursue a career in tech sales, secured investment from Lightspeed Venture Partners, according to sources familiar with the deal.

Pre-Demo Day M&A

Raising ahead of Demo Day isn’t a new phenomenon. Companies, thanks to the invaluable YC network, increase their chances at raising, as well as their valuation, the moment they enroll in the accelerator. They can begin chatting with VCs when they see fit, and they’re encouraged to mingle with YC alumni, a process that can result in pre-Demo Day acquisitions.

This year, Elph, a blockchain infrastructure startup, was bought by Brex, a buzzworthy fintech unicorn that itself graduated from YC only two years ago. The deal closed just one week before Demo Day. Brex’s head of engineering, Cosmin Nicolaescu, tells TechCrunch the Elph five-person team — including co-founders Ritik Malhotra and Tanooj Luthra, who previously founded the Box-acquired startup Steem — were being eyed by several larger companies as Brex negotiated the deal.

“For me, it was important to get them before batch day because that opens the floodgates,” Nicolaescu told TechCrunch. “The reason why I really liked them is they are very entrepreneurial, which aligns with what we want to do. Each of our products is really like its own business.”

Of course, Brex offers a credit card for startups and has no plans to dabble with blockchain or cryptocurrency. The Elph team, rather, will bring their infrastructure security know-how to Brex, helping the $1.1 billion company build its next product, a credit card for large enterprises. Brex declined to disclose the terms of its acquisition.

Hunting for the best deals

Y Combinator partners Michael Seibel and Dalton Caldwell, and moderator Josh Constine, speak onstage during TechCrunch Disrupt SF 2018. (Photo by Kimberly White/Getty Images)

Ultimately, it’s up to startups to determine the cost at which they’ll give up equity. YC companies raise capital under the SAFE model, or a simple agreement for future equity, a form of fundraising invented by YC. Basically, an investor makes a cash investment in a YC startup, then receives company stock at a later date, typically upon a Series A or post-seed deal. YC made the switch from investing in startups on a pre-money safe basis to a post-money safe in 2018 to make cap table math easier for founders.

Michael Seibel, the chief executive officer of YC, says the accelerator works with each startup to develop a personalized fundraising plan. The businesses that raise at valuations north of $10 million, he explained, do so because of high demand.

“Each company decides on the amount of money they want to raise, the valuation they want to raise at, and when they want to start fundraising,” Seibel told TechCrunch via email. “YC is only an advisor and does not dictate how our companies operate. The vast majority of companies complete fundraising in the 1 to 2 months after Demo Day. According to our data, there is little correlation between the companies who are most in demand on Demo Day and ones who go on to become extremely successful. Our advice to founders is not to over optimize the fundraising process.”

Though Seibel says the majority raise in the months following Demo Day, it seems the very best investors know to be proactive about reviewing and investing in the batch before the big event.

Khosla Ventures, like other top VC firms, meets with YC companies as early as possible, partner Kristina Simmons tells TechCrunch, even scheduling interviews with companies in the period between when a startup is accepted to YC to before they actually begin the program. Another Khosla partner, Evan Moore, echoed Seibel’s statement, claiming there isn’t a correlation between the future unicorns and those that raise capital ahead of Demo Day. Moore is a co-founder of DoorDash, a YC graduate now worth $7.1 billion. DoorDash closed its first round of capital in the weeks following Demo Day.

“I think a lot of the activity before demo day is driven by investor FOMO,” Moore wrote in an email to TechCrunch. “I’ve had investors ask me how to get into a company without even knowing what the company does! I mostly see this as a side effect of a good thing: YC has helped tip the scale toward founders by creating an environment where investors compete. This dynamic isn’t what many investors are used to, so every batch some complain about valuations and how easy the founders have it, but making it easier for ambitious entrepreneurs to get funding and pursue their vision is a good thing for the economy.”

This year, given the number of recent changes at YC — namely the size of its latest batch — there was added pressure on the accelerator to showcase its best group yet. And while some did tell TechCrunch they were especially impressed with the lineup, others indeed expressed frustration with valuations.

Many YC startups are fundraising at valuations at or higher than $10 million. For context, that’s actually perfectly in line with the median seed-stage valuation in 2018. According to PitchBook, U.S. startups raised seed rounds at a median post-valuation of $10 million last year; so far this year, companies are raising seed rounds at a slightly higher post-valuation of $11 million. With that said, many of the startups in YC’s cohorts are not as mature as the average seed-stage company. Per PitchBook, a company can be several years of age before it secures its seed round.

Nonetheless, pricey deals can come as a disappointment to the seed investors who find themselves at YC every year but because their reputations aren’t as lofty as say, Accel, aren’t able to book pre-Demo Day meetings with YC’s top of class.

The question is who is Y Combinator serving? And the answer is founders, not investors. YC is under no obligation to serve up deals of a certain valuation nor is it responsible for which investors gain access to its best companies at what time. After all, startups are raking in larger and larger rounds, earlier in their lifespans; shouldn’t YC, a microcosm for the Silicon Valley startup ecosystem, advise their startups to charge the best investors the going rate?

21 Mar 2019

Gig workers need health & benefits. Catch is their safety net

One of the hottest Y Combinator startups just raised a big seed round to clean up the mess created by Uber, Postmates, and the gig economy. Catch sells health insurance, retirement savings plans, and tax withholding directly to freelancers, contractors, or anyone uncovered. By building and curating simplified benefits services, Catch can offer a safety net for the future of work.

“In order to stay competitive as a society, we need to address inequality and volatility. We think Catch is the first step to offering alternatives to the mandate that benefits can only come from an employer or the government” writes Catch co-founder and COO Kristen Tyrrell. Her co-founder and CEO Andrew Ambrosino, a former Kleiner Perkins design fellow, stumbled onto the problem as he struggled to juggle all the paperwork and programs companies typically hire an HR manager to handle. “Setting up a benefits plan was a pain. You had to be come an expert in the space, and even once you were, executing and getting the stuff you needed was pretty difficult.” Catch does all this annoying but essential work for you.

Now Catch is getting its first press after piloting its product with tens of thousands of users. TechCrunch caught wind of its highly competitive seed round closing, and Catch confirms it’s raised $5.1 million at a $20.5 million post-money valuation co-led by Khosla Ventures, NYCA Partners, and Steve Jang. This follow-up to its $1 million pre-seed will fuel its expansion into full heath insurance enrollment, life insurance, and more.

“Benefits, as a system built and provided by employers, created the mid-century middle class. In the post-war economic boom, companies offering benefits in the form of health insurance and pensions enabled familial stability that led to expansive growth and prosperity” recalls Tyrell, who was formerly the director of product at student debt repayment benefits startup FutureFuel.io. “Emboldened by private-sector growth (and apparent self-sufficiency), the 1970s and 80s saw a massive shift in financial risk management from the government to employers. The public safety net contracted in favor of privatized solutions. As technological advances progressed, employers and employees continued to redefine what work looked like. The bureaucratic and inflexible benefits system was unable to keep up. The private safety net crumbled.”

That problem has ballooned in recent years with the advent of the on-demand economy where millions become Uber drivers, Instacart shoppers, DoorDash deliverers, and TaskRabbits. Meanwhile, the destigmatization of remote work and digital nomadism has turned more people into permanent freelancers and contractors, or full-time employees without benefits. “A new class of worker emerged: one with volatile, complex income streams and limited access to second-order financial products like automated savings, individual retirement plans, and independent health insurance. We entered the new millennium with rot under the surface of new opportunity from the proliferation of the internet” Tyrrell declares. “The last 15 years are borrowed time for the unconventional proletariat. It is time to come to terms and design a safety net that is personal, portable, modern, and flexible. That’s why we built Catch.”

Catch co-founders Andrew Ambrosino and Kristen Tyrrell

Currently Catch offers the following services, each with their own way of earning the startup revenue:

  • Health Explorer lets users compare plans from insurers and calculate subsidies, while Catch serves as a broker collecting a fee from insurance providers
  • Retirement Savings gives users a Catch robo-advisor compatible with IRA and Roth IRA, while Catch earns the industry standard 1 basis point on saved assets
  • Tax Withholding provides an FDIC-insured Catch account that automatically saves what you’ll need to pay taxes later, while Catch earns interest on the funds
  • Time Off Savings similarly lets you automatically squirrel away money to finance ‘paid’ time off, while Catch earns interest

These and the rest of Catch’s services are curated through its Guide. You answer a few questions about what benefits you have and need, connect your bank account, choose what programs you want, and get push notifications whenever Catch needs your decisions or approvals. It’s designed to minimize busy work so if you have a child, you can add them to all your programs with a click instead of slogging through reconfiguring them all one at a time. That simplicity has ignited explosive growth for Catch, with the balances it holds for tax withholding, time off, and retirement balances up 300% in each of the last three months.

In 2019 it plans to add Catch-branded student loan refinancing, vision and dental enrollment plus payments via existing providers, life insurance through a partner such as Ladder or Ethos, and full health insurance enrollment plus subsidies and premium payments via existing insurance companies like Blue Shield and Oscar. And in 2020 it’s hoping to build out its own blended retirement savings solution and income smoothing tools.

If any of this sounds boring, that’s kind of the point. Instead of sorting through this mind-numbing stuff unassisted, Catch holds your hand. Its benefits Guide is available on the web today and it’s beta testing iOS and Android apps that will launch soon. Catch is focused on direct-to-consumer sales because “We’ve seen too many startups waste time on channels/partnerships before they know people truly want their product and get lost along the way” Tyrrell writes. Eventually it wants to set up integrations directly into where users get paid.

Catch’s biggest competition is people haphazardly managing benefits with Excel spreadsheets and a mishmash of healthcare.gov and solutions for specific programs. 21 percent of Americans have saved $0 for retirement, which you could see as either a challenge to scaling Catch or a massive greenfield opportunity. Track.tax, one of its direct competitors, charges a subscription price that has driven users to Catch. And automated advisors like Betterment and Wealthfront accounts don’t work so well for gig workers with lots of income volatility.

So do the founders think the gig economy, with its suppression of benefits, helps or hinders our species? “We believe the story is complex, but overall, the existing state of
the gig economy is hurting society. Without better systems to provide support for freelance/contract workers, we are making people more precarious and less likely to succeed financially.”

When I ask what keeps the founders up at night, Tyrrell admits “The safety net is not built for individuals. It’s built to be distributed through HR departments and employers. We are very worried that the products we offer aren’t on equal footing with group/company products.” For example, there’s a $6,000/year IRA limit for individuals while the corporate equivalent 401k limit is $19,000, and health insurance is much cheaper for groups than individuals.

To surmount those humps, Catch assembled a huge list of angel investors who’ve built a range of financial services including Nerdwallet founder Jake Gibson, Earnest founders Louis Beryl and Ben Hutchinson, ANDCO (acquired by Fiverr) founder Leif Abraham, Totem founder Neal Khosla, Commuter Club fonder Petko Plachkov, Playable (acquired by Stripe) founder Tad Milbourn, and Synapse founder Bruno Faviero. It also brough on a wide range of venture funds to open doors for it. Those include Urban Innovation Fund, Kleiner Perkins, Y Combinator, Tempo Ventures, Prehype, Loup Ventures, Indicator Ventures, Ground Up Ventures, and Graduate Fund.

Hopefully the fact that there are three lead investors and so many more in the round won’t mean that none feel truly accountable to oversee the company. With 80 million Americans lacking employer-sponsored benefits and 27 million without health insurance and median job tenure down to 2.8 years for people ages 25 to 34 leading to more gaps between jobs, our workforce is vulnerable. Catch can’t operate like a traditional software startup with leniency for screw-ups. If it can move cautiously and fix things, it could earn labor’s trust and become a fundamental piece of the welfare stack.

21 Mar 2019

Facebook’s AI couldn’t spot mass murder

Facebook has given another update on measures it took and what more it’s doing in the wake of the livestreamed video of a gun massacre by a far right terrorist who killed 50 people in two mosques in Christchurch, New Zealand.

Earlier this week the company said the video of the slayings had been viewed less than 200 times during the livestream broadcast itself, and about about 4,000 times before it was removed from Facebook — with the stream not reported to Facebook until 12 minutes after it had ended.

None of the users who watched the killings unfold on the company’s platform in real-time apparently reported the stream to the company, according to the company.

It also previously said it removed 1.5 million versions of the video from its site in the first 24 hours after the livestream, with 1.2M of those caught at the point of upload — meaning it failed to stop 300,000 uploads at that point. Though as we pointed out in our earlier report those stats are cherrypicked — and only represent the videos Facebook identified. We found other versions of the video still circulating on its platform 12 hours later.

In the wake of the livestreamed terror attack, Facebook has continued to face calls from world leaders to do more to make sure such content cannot be distributed by its platform.

The prime minister of New Zealand, Jacinda Ardern told media yesterday that the video “should not be distributed, available, able to be viewed”, dubbing it: “Horrendous.”

She confirmed Facebook had been in contact with her government but emphasized that in her view the company has not done enough.

She also later told the New Zealand parliament: “We cannot simply sit back and accept that these platforms just exist and that what is said on them is not the responsibility of the place where they are published. They are the publisher. Not just the postman.”

We asked Facebook for a response to Ardern’s call for online content platforms to accept publisher-level responsibility for the content they distribute. Its spokesman avoided the question — pointing instead to its latest piece of crisis PR which it titles: “A Further Update on New Zealand Terrorist Attack”.

Here it writes that “people are looking to understand how online platforms such as Facebook were used to circulate horrific videos of the terrorist attack”, saying it therefore “wanted to provide additional information from our review into how our products were used and how we can improve going forward”, before going on to reiterate many of the details it has previously put out.

Including that the massacre video was quickly shared to the 8chan message board by a user posting a link to a copy of the video on a file-sharing site. This was prior to Facebook itself being alerted to the video being broadcast on its platform.

It goes on to imply 8chan was a hub for broader sharing of the video — claiming that: “Forensic identifiers on many of the videos later circulated, such as a bookmarks toolbar visible in a screen recording, match the content posted to 8chan.”

So it’s clearly trying to make sure it’s not singled out by political leaders seek policy responses to the challenge posed by online hate and terrorist content.

Further details it chooses to dwell on in the update is how the AIs it uses to aid the human content review process of flagged Facebook Live streams are in fact tuned to “detect and prioritize videos that are likely to contain suicidal or harmful acts” — with the AI pushing such videos to the top of human moderators’ content heaps, above all the other stuff they also need to look at.

Clearly “harmful acts” were involved in the New Zealand terrorist attack. Yet Facebook’s AI was unable to detected a massacre unfolding in real time. A mass killing involving an automatic weapon slipped right under the robot’s radar.

Facebook explains this by saying it’s because it does not have the training data to create an algorithm that understands it’s looking at mass murder unfolding in real time.

It also implies the task of training an AI to catch such a horrific scenario is exacerbated by the proliferation of videos of first person shooter videogames on online content platforms.

It writes: “[T]his particular video did not trigger our automatic detection systems. To achieve that we will need to provide our systems with large volumes of data of this specific kind of content, something which is difficult as these events are thankfully rare. Another challenge is to automatically discern this content from visually similar, innocuous content – for example if thousands of videos from live-streamed video games are flagged by our systems, our reviewers could miss the important real-world videos where we could alert first responders to get help on the ground.”

The videogame element is a chilling detail to consider.

It suggests that a harmful real-life act that mimics a violent video game might just blend into the background, as far as AI moderation systems are concerned; invisible in a sea of innocuous, virtually violent content churned out by gamers. (Which in turn makes you wonder whether the Internet-steeped killer in Christchurch knew — or suspected — that filming the attack from a videogame-esque first person shooter perspective might offer a workaround to dupe Facebook’s imperfect AI watchdogs.)

Facebook post is doubly emphatic that AI is “not perfect” and is “never going to be perfect”.

“People will continue to be part of the equation, whether it’s the people on our team who review content, or people who use our services and report content to us,” it writes, reiterating yet again that it has ~30,000 people working in “safety and security”, about half of whom are doing the sweating hideous toil of content review.

This is, as we’ve said many times before, a fantastically tiny number of human moderators given the vast scale of content continually uploaded to Facebook’s 2.2BN+ user platform.

Moderating Facebook remains a hopeless task because so few humans are doing it.

Moreover AI can’t really help. (Later in the blog post Facebook also writes vaguely that there are “millions” of livestreams broadcast on its platform every day, saying that’s why adding a short broadcast delay — such as TV stations do — wouldn’t at all help catch inappropriate real-time content.)

At the same time Facebook’s update makes it clear how much its ‘safety and security’ systems rely on unpaid humans too: Aka Facebook users taking the time and mind to report harmful content.

Some might say that’s an excellent argument for a social media tax.

The fact Facebook did not get a single report of the Christchurch massacre livestream while the terrorist attack unfolded meant the content was not prioritized for “accelerated review” by its systems, which it explains prioritize reports attached to videos that are still being streamed — because “if there is real-world harm we have a better chance to alert first responders and try to get help on the ground”.

Though it also says it expanded its acceleration logic last year to “also cover videos that were very recently live, in the past few hours”.

But again it did so with a focus on suicide prevention — meaning the Christchurch video would only have been flagged for acceleration review in the hours after the stream ended if it had been reported as suicide content.

So the ‘problem’ is that Facebook’s systems don’t prioritize mass murder.

“In [the first] report, and a number of subsequent reports, the video was reported for reasons other than suicide and as such it was handled according to different procedures,” it writes, adding it’s “learning from this” and “re-examining our reporting logic and experiences for both live and recently live videos in order to expand the categories that would get to accelerated review”.

No shit.

Facebook also discusses its failure to stop versions of the massacre video from resurfacing on its platform, having been — as it tells it — “so effective” at preventing the spread of propaganda from terrorist organizations like ISIS with the use of image and video matching tech.

It claims  its tech was outfoxed in this case by “bad actors” creating many different edited versions of the video to try to thwart filters, as well as by the various ways “a broader set of people distributed the video and unintentionally made it harder to match copies”.

So, essentially, the ‘virality’ of the awful event created too many versions of the video for Facebook’s matching tech to cope.

“Some people may have seen the video on a computer or TV, filmed that with a phone and sent it to a friend. Still others may have watched the video on their computer, recorded their screen and passed that on. Websites and pages, eager to get attention from people seeking out the video, re-cut and re-recorded the video into various formats,” it writes, in what reads like another attempt to spread blame for the amplification role that its 2.2BN+ user platform plays.

In all Facebook says it found and blocked more than 800 visually-distinct variants of the video that were circulating on its platform.

It reveals it resorted to using audio matching technology to try to detect videos that had been visually altered but had the same soundtrack. And again claims it’s trying to learn and come up with better techniques for blocking content that’s being re-shared widely by individuals as well as being rebroadcast by mainstream media. So any kind of major news event, basically.

In a section on next steps Facebook says improving its matching technology to prevent the spread of inappropriate viral videos being spread is its priority.

But audio matching clearly won’t help if malicious re-sharers just both re-edit the visuals and switch the soundtrack too in future.

It also concedes it needs to be able to react faster “to this kind of content on a live streamed video” — though it has no firm fixes to offer there either, saying only that it will explore “whether and how AI can be used for these cases, and how to get to user reports faster”.

Another priority it claims among its “next steps” is fighting “hate speech of all kinds on our platform”, saying this includes more than 200 white supremacist organizations globally “whose content we are removing through proactive detection technology”.

It’s glossing over plenty of criticism on that front too though — including research that suggests banned far right hate preachers are easily able to evade detection on its platform. Plus its own foot-dragging on shutting down far right extremists. (Facebook only finally banned one infamous UK far right activist last month, for example.)

In its last PR sop, Facebook says it’s committed to expanding its industry collaboration to tackle hate speech via the Global Internet Forum to Counter Terrorism (GIFCT), which formed in 2017 as platforms were being squeezed by politicians to scrub ISIS content — in a collective attempt to stave off tighter regulation.

“We are experimenting with sharing URLs systematically rather than just content hashes, are working to address the range of terrorists and violent extremists operating online, and intend to refine and improve our ability to collaborate in a crisis,” Facebook writes now, offering more vague experiments as politicians call for content responsibility.