Author: azeeadmin

A new voice-based social app that cites Clubhouse as its biggest inspiration offers a playful new way to stay in touch with close friends and family. Zebra leaves video out of the equation altogether, inviting users to snap on-the-fly photos and send them off paired with casual voice updates.

Zebra focuses on asynchronous sharing, but it also lets users call one another if they’re both already hanging out on the app. The result is a fun and casual way to stay in touch for anyone who doesn’t feel like accidentally getting sucked into Instagram’s endless, ad-strewn feed every time they want to give a friend a quick update.

For now Zebra is a two-person team consisting of CEO Dennis Gecaj, a product designer based in Berlin and Amer Shahnawaz, Zebra’s Head of Engineering, who previously worked on Snap Maps at Snapchat. With the pre-seed funding, led by Alexis Ohanian’s fresh early stage venture firm Seven Seven Six, which the Reddit co-founder announced in June. The app will launch formally in August but is now open for pre-orders through the App Store and as a beta in TestFlight.

“It’s no secret that we are in the midst of an audio revolution, one that has ushered in a series of new audio-first social platforms and content vehicles,” Ohanian said, noting that Zebra’s unique blend of photos and voice is what caught his eye.

Gecaj sees voice-based social networking as a much richer alternative to text-dominant platforms. While products like Instagram allow voice messages and technically let users make voice calls by disabling the camera, voice usually plays second fiddle to video. But video calls are more taxing and require more commitment — it’s no coincidence more and more Zoom cameras blinked offline as the pandemic dragged on.

Unlike Clubhouse, which Gecaj calls a “huge inspiration, Zebra is social audio designed for your inner circle. “With everything opening back up we saw an incredible opportunity for an asynchronous format for that,” he told TechCrunch.

Gecaj hopes that Zebra’s “talking photos” can capture the collective imagination in a way that makes early growth natural. Anyone who downloads Zebra can invite friends individually without needing to share their full contact list (and they’ll need to since you can’t do anything on the app without friends). Because Zebra’s interface is so clean and streamlined, this process is painless and doesn’t necessitate any extra digging through menus.

The idea of a “zebra” — naturally, Zebra is trying to make “zebra” happen — is that people like to see what they are talking about. On a different messaging app, this would require sending a photo and then sending a voice message in quick succession. But on Zebra, sending a photo is the main thing you can do. The app opens right to the camera where you snap a picture. You then hold the photo to record a snippet of voice to go along with it and send it off to friends and family, who appear in a row beneath the camera.

Zebra isn’t worried about the prospect of talking people into downloading another app. Gecaj sees a natural split emerging as creators and audiences increasingly become the focus of social platforms that were initially designed to help friends stay in touch.

“I think the trend is a division between creator platforms where you go to be entertained and platforms you go to hang out with your friends,” Gecaj told TechCrunch.

On top of that, he hopes that Zebra’s dual focus on voice and photos, two aspects of social networking that platforms either don’t prioritize or are actively abandoning, can make it appealing for people who aren’t as interested in video.

“We really also think that text messaging doesn’t have the same emotion as voice… and voice has been really neglected,” Gecaj said. “There’s really a richness to voice, a power to voice that nothing else has.”

Not every startup wants to raise venture capital. And then there are those that do want to raise VC money but don’t want to use it for specific things.

In recent years, a number of firms have emerged looking to meet the credit needs of such venture-backed and growth startups: i80 Group is one of those firms.

Former Goldman Sachs investment banker Marc Helwani founded i80 in 2016 after investing in early-stage New York-based fintechs in 2014-2015 via his VC fund, Avenue A Ventures.

“It became very clear to me that fintech was going to explode,” he recalls. “At that time, it was still relatively new. And every time I spoke to a company, they would tell me, ‘We know how to raise VC, but what about the credit?’ I just saw this white space.”

For example, proptechs that buy homes on behalf of buyers don’t want to use venture money. Fintechs that want to make loans to consumers don’t want to use equity to do it. Instead, in those cases, credit might be more desirable.

Enter i80. The firm offers credit exclusively, and over the years has quietly committed more than $1 billion to over 15 companies –including real estate marketplace Properly, finance app MoneyLion and SaaS financing company Capchase — that have all raised a significant amount of venture capital but are looking for credit “to help them scale very efficiently and in a non-dilutive manner so they can retain more ownership of their companies,” Helwani said. 

Its $1 billion milestone follows fund commitments nearing $500 million from an unnamed “leading global asset manager” as well as other institutional and retail investors.

Image Credits: Founder and Chief Investment Officer Marc Helwani / i80 Group

I80 — which derives its name from the highway that connects New York and San Francisco — is mainly focused on the fintech and proptech sectors. 

“They are the two centers for the venture ecosystem,” Helwani said. “And we’re trying to be a bridge between those two cities.” I80 has offices in both locations and will soon be opening one in Montreal.

The firm works in conjunction with VC firms such as a16z (more formally known as Andreessen Horowitz); Affirm and PayPal co-founder Max Levchin’s SciFi; Khosla Ventures; Union Square Ventures; and QED.

“In a perfect world, venture capital would be called venture equity,” Helwani said. “VCs’ capital is critical for companies to hire and get office space. But when it comes time to do what the actual business is, such as provide loans or buy homes, capital like ours is very accretive without VCs and management losing ownership in the business. In these cases, using both credit and equity makes a lot of sense.”

Helwani is reluctant to call what i80 offers venture “debt.” He says that has a very specific connotation and is what Silicon Valley Bank and others like it do in providing debt as a percentage of a previous equity round. Instead, according to Helwani, i80’s approach is to minimize fees. The vast majority of its deals are “interest-rate related.”

“With mortgages, for example, we never think about the fees upfront, and focus more on the interest rate,” Helwan said. “We believe the more transparent we are, the more companies will want to work with us.”

I80 conducts quarterly calls with VCs and for now, that’s how it typically sources most of its deal flow. It also gets referrals. Helwani believes that i80 stands out from other firms also offering credit in that it’s “not trying to be credit investors in VC clothing.”

He also thinks that the fact that the i80 team is made of operators, as well as investors, is a contributing factor.

The firm is set to close another half a dozen deals in the next 60 to 90 days, and then plans to set its sights on raising more capital.

“We want to fill this void, and help companies raise money in their subsequent rounds at higher valuations,” Helwani said.

New York-based startup Sketchfab has been acquired by Epic Games, the company behind Fortnite and Unreal Engine. Sketchfab has been building a platform to upload, download, view, share, sell and buy 3D assets. Essentially, it is the leading repository for 3D files on the web.

Epic Games isn’t disclosing the terms of the deal. Sketchfab will still operate as a separate brand and offering. Epic Games also says that all integrations with third-party tools will remain available, including with Unity.

The deal makes a ton of sense as Epic Games has been developing — and acquiring — some of the most popular creation tools. Unreal Engine has been one of the most popular video game engines of the past couple of decades.

More recently, Unreal Engine has been used for different use cases beyond video games, such as special effects, 3D explorations of virtual worlds, mixed reality projects and more.

But an engine without assets is pretty useless. That’s why creators either design their own 2D and 3D assets, outsource this process or buy assets directly. It led to the creation of an entire ecosystem of assets and creators.

Epic Games has its own Unreal Engine marketplace, but Sketchfab has been working on building the definitive 3D marketplace for many years with three important pillars — technology, reach and collaboration.

On the technology front, Sketchfab lets you view 3D models on any platform. The Sketchfab viewer works with all major browsers on both desktop and mobile — you can see an example on Sketchfab. It also works with VR headsets. You can upload 3D models from your favorite 3D modeling app, such as Blender, 3ds Max, Maya, Cinema 4D and Substance Painter.

Sketchfab can also convert any format into glTF and USDZ file formats. Those formats work particularly well on Android and iOS.

When it comes to reach, Sketchfab has grown tremendously over the years. In 2018, the company shared some metrics — 1 billion views, 2 million members and 3 million 3D models. Around the same time, the company launched a store so that creators can buy and sell assets directly on the platform.

Finally, Sketchfab launched an interesting feature for companies that work with 3D models all the time — Sketchfab for Teams. It’s a software-as-a-service play that lets you share a Sketchfab account with the rest of the team. Essentially, it works a bit like a shared Google Drive folder — but for 3D models.

With today’s acquisition, Epic Games is making some immediate changes. Starting today, store fees have been reduced from 30% to 12% — just like on the Epic Games Store. The company lowered commissions on ArtStation immediately after acquiring ArtStation as well.

As for Sketchfab users paying a monthly subscription fee, everything is a bit cheaper now. All features in the Plus plan are now available for free, all features in the Pro plan are available to Plus subscribers, etc.

“We built Sketchfab with a mission to empower a new era of creativity and provide a service for creators to showcase their work online and make 3D content accessible,” Sketchfab co-founder and CEO Alban Denoyel said in the announcement. “Joining Epic will enable us to accelerate the development of Sketchfab and our powerful online toolset, all while providing an even greater experience for creators. We are proud to work alongside Epic to build the Metaverse and enable creators to take their work even further.”

With the acquisitions of ArtStation and Capturing Reality, Epic Games has been on an acquisition spree. It’s clear that the company wants to build an end-to-end developer suite for the gaming industry.

Space propulsion developer Accion Systems has closed its most significant funding round yet. The company raised $42 million in a Series C led by Tracker Capital, bringing its valuation to $83.5 million.

Along with the investment, Tracker Capital also acquired a majority stake in the company. This latest injection of capital will facilitate the development and manufacturing of the company’s fourth generation propulsion system, dubbed the tiled ionic liquid electrospray (TILE) system.

The TILE system uses electrical energy to push charge particles (ions) out its back to generate propulsion. While ion engines have been around for decades, Accion uses a liquid propellant, an ionic liquid salt, instead of gas. The liquid is inert and non-pressurized, meaning there’s no risk of explosion. It also results in a product that doesn’t need bulky components like ionization chambers, and an overall smaller and lighter weight system relative to the spacecraft – key considerations in space, where every gram of payload has a high price tag.

“It lets us build really, really small systems,” Accion co-founder Natalya Bailey explained to TechCrunch. “Instead of trying to take an existing ion engine the size of a Prius and shrink it down, we can start with very small systems because of this propellant.” And she does mean small – each thruster tile is about the size of a postage stamp.

The TILE system is also scalable and modular, meaning it could feasibly be used on anything from cubesats to propelling an interplanetary spacecraft, Accion CEO Peter Kant added in a recent interview with TechCrunch. “It’s one of the few occasions where the total addressable market and the actual addressable market that we can serve are pretty closely aligned and almost overlap,” he said.

The newest generation of the TILE system is the same size as its predecessors, but Accion is increasing the number of emitters on a given chip – emitters being the technology that actually shoots out the ions, generating the momentum – by almost tenfold. “We get more ions per area and that gives us a whole lot more thrust with the same amount of space,” Kant said.

Accion is looking to ship the first fourth-gen thruster systems in the middle to late summer of 2022.

The TILE system was developed by Accion co-founders Natalya Bailey and Louis Perna while the two were at the Massachusetts Institute of Technology. The tech generated a ton of interest from big aerospace companies, but they decided to found Accion in 2014 rather than sell. The company manufactures and assembles its product at its facility in Charlestown, Massachusetts.

The TILE system was onboard commercial spacecraft, one with Astra Digital and one with NanoAvionics, that went up on SpaceX’s Transporter-2 launch at the end of June. Accion started by focusing on serving smaller spacecraft first, like cubesats, but Bailey said that was just the beginning.

“We’re going after that segment initially, and then intending to reinvest our learnings in building larger and larger systems that eventually can do big geostationary satellites and interplanetary missions and so on. The systems that went up on the most recent launcher [is] probably good for a satellite up to about 50 kilograms [. . .] For us, it’s on the smaller end of where we intend to go.”

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

For this week’s deep dive, Alex and Natasha took a trip down memory lane to the great WeWork saga. We had WSJ reporter and author Eliot Brown on the show to chat about his new book, The Cult of We, written with his colleague Maureen Farrell. You can snag it here if you haven’t already.

Brown and Farrell were key reporting voices during WeWork’s rise, and fall, covering the company’s growth, hijinks, and demise.

Recently, WeWork has filed to go public via a SPAC, bringing the co-working startup to the public markets years after it initially tried for an IPO. It will debut at a fraction of the value that it once commanded on the private markets.

• For fun, you can read the original WeWork S-1 filing here.
• The WeWork-SPAC deck is here.

While we had Brown on the show, we took the time to dive into how he handled reporting the WeWork story, what his take is on today’s startup market, and how the tech media in general can do a better job. It felt like a masterclass for journalists and founders alike, which we’d argue is Equity’s sweet spot.

What lessons can we take away from WeWork’s rise and fall? At a very basic level, that companies with slim gross margins are not software companies and should not be valued as such. And that allowing founders to have monarchical control of their company goes against historical norms of good corporate governance, which isn’t so smart.

California-grown automotive software company Sonatus raised $35 million in a Series A round that attracted high-profile technology and automotive industry companies including Hyundai Motor Group, SAIC Capital, LG Electronics and Hyundai Mobis.

Silicon Valley VC Translink Capital led the round, with other investors including Marvell, SK hynix, United Microelectronics Corporation (UMC), Mando Corporation and Wanxiang Group Company.

Sonatus, which was founded in 2018, intends to use the new funds to establish itself as a brand through marketing efforts, new partnerships with OEMs and expanding local teams, according to Jeff Chou, Sonatus’s CEO and co-founder. The startup says its product helps to make vehicles into “data centers on wheels” by providing the underlying infrastructure that allows for big data collection, running new applications or adding new features to the car.

“Basically we have two pieces of our product – an in-vehicle portion and a cloud portion, and they kind of work together,” Chou told TechCrunch. “The in-vehicle part of our product allows the OEM to collect any data that the car generates. So whether that be on a traditional [Controller Area Network] bus, whether that be in the infotainment head unit, whether that be on traffic that’s flowing across an in-vehicle network like Ethernet. Anything that gets generated or transmitted across an in-vehicle network is data that we have access to. And depending on what the OEM wants to collect and when they want to collect it, they can inform our software in the vehicle to do the right thing.”

The cloud portion of the software connects to all the vehicles where Sonatus’s underlying architecture resides and  ingests all the data so it can store, analyze or expose it to either the OEM’s own data scientists or to their partners.

Sonatus says its first generation product is already in production with a top global automaker, which will be announced in the coming weeks.

“We actually built the company without any investment money at all, and we grew from a couple of us to now beyond 50 people,” said Chou. “And now we’re already launching and in mass production. Our software has already been incorporated into the vehicles of an OEM and in their dealer showrooms.”

Chou said the first incarnation of Sonatus’ product will be in a combustion engine vehicle, but that the product is drivetrain-agnostic. In fact, Chou thinks the electrification of vehicles has been a tailwind for the company because it’s causing OEMs to rethink in-vehicle architecture and be more open to adopting new technologies.

One of Sonatus’ investors in this round, Hyundai has been pouring money into auto-related technologies. The automaker has invested $20.5 billion (KRW 23.5 trillion) in future technologies for its vehicles, including electrification, connectivity, autonomous driving, fuel cell, UAM, AI and robotics through 2025, according Henry Chung, SVP and head of Hyundai CRADLE Silicon Valley.

“A lot of the technology in our cars is probably 50 years old in some areas, especially on the comms side of things,” Chung told TechCrunch. “There’s four or five decades worth of data center evolution that’s occurred on the IT front, and those technologies and approaches basically need to be brought into vehicles now because of the amount of data that’s being generated, the sensors, the software algorithms that are running, the compute power that’s now involved. They literally are super computers on wheels. We’re asking vehicles to do more and consumers at are asking for services at a greater clip as well, so in order to deliver those services and value added functions, all of that needs supporting infrastructure and that’s what Sonatus delivers essentially. This is long overdue.”

One of the capabilities that may soon be realized in the automotive industry is Vehicle-to-Everything (V2X) technology, in which the vehicle communicates to other vehicles and surrounding infrastructure to provide better driver assistance systems, which could lead to autonomous driving one day. Sonatus says it provides the architecture upon which V2X can be utilized.

“That’s part of this edge cloud architecture that we’re delivering for vehicles, but in this case the edge instead of being data center, it’s really an edge on wheels,” said Chou.

Sonatus’s data center, which the company says is incredibly secure, and its architecture allow automakers to remotely add in features, manage vehicle usage data and remedy problems quicker and more efficiently because it doesn’t use over-the-air software updates that require time and a full upload. Rather, automakers can send the software specific messages to enact changes in real time.

“Imagine a scenario where on the fly somebody detects that there could be something wrong with brakes for vehicles that they shipped in North America, and they need to send out an update right away to get real time data on braking and engine of certain models when an accident occurs,” said Chou. “They might say, ‘Send me information 60 seconds before the accident and 60 seconds after and I only want this information.’ That can be done in real time, without an OTA update. It’s what we call codeless updates.”

There are many use cases where OEMs will benefit from having access to so much data, especially as they continue to innovate. For Sonatus’s part, the company wants to move in the direction wherein it can also collect and analyze the data from automakers to perhaps use records of driver behavior in the development of autonomous technology, but Chou said they’re not doing anything about it just yet.

Loop Returns, a software company looking to handle the costly and inefficient process of retail/ecommerce returns, has announced the close of a $65 million Series B financing round. The round was led by CRV, with participation from Shopify, Renegade Partners, as well as existing investors FirstMark Capital, Ridge Ventures, Peterson Ventures, and Lerer Hippeau.

It paid off. The company has grown its team from 20 employees in 2019 to 100, with 41 percent of the team identifying as female and 16 percent identifying as BIPOC.

In terms of traction, the company has gone from 200 to 700 customers, and from $26 million in returns processed to just over $100 million in the same time frame.

Poma told TechCrunch that the greatest challenge for the startup is scaling the team.

“It’s about bringing great people and keeping them aligned toward a common goal, especially in this remote first world,” said Poma.

Coding is not just for engineers and computer programmers anymore: the pace of technology and its growing ubiquity mean that even non-tech roles will require workers to have some degree of knowledge to do their jobs in the future. Today a company called Sololearn — which has built a popular mobile-first education platform to meet that demand, now with over 21 million users across some 25 curriculum categories like Python, JavaScript, Java, C++, HTML, and SQL — is announcing $24 million in funding to expand its business.

Drive Capital led the round, with participation from past backers from Sololearn’s previous $1.2 million Series A round in 2016. They include Learn Capital and Prosus Ventures.

Of note, Drive Capital was co-founded by two alums from Sequoia out of Columbus, Ohio, with a mission to focus on founders outside of the “usual” hubs. That’s precisely what they have done here: Sololearn comes from Yerevan, Armenia, which has produced a lot of engineering talent, but interestingly not as many startups. (PicsArt, which is actually also HQ’d in San Francisco, may the biggest name to come out of there.)

Sololearn was founded and is currently led by Yeva Hyusyan, who tells me that the impetus for the company came out of a previous project she worked on while working for Microsoft in the country, a startup accelerator.

One side effort to that was a coding bootcamp they put together to help upskill would-be entrepreneurs. The bootcamp took on a life of its own eventually, with tech companies in the country, and specifically the capital city, approaching Hyusyan to source interesting candidates for jobs, and soon after to take and train people in specific areas on behalf of the tech companies themselves. In the process, the accelerator started building tools that could be used outside of the classroom. Through all of that, Hyusyan said she realised that there was an opportunity in itself to focus just on this. And thus Sololearn was born.

Now I know what you must be thinking at this point: aren’t there already dozens, maybe hundreds, of decent online coding courses and tools out in the market already? Why fund Yet One More?

Key to what Sololearn is doing is that it has taken a realistic approach: on mobile people want short bursts of content, so coding education on that platform should follow from that. The “lessons” such as they are come in bite-size engagements, which can be run through in minutes if needed. Its target users are equally distributed among those who are focused on learning deeply about coding, and non-tech people who are trying to learn some specific skills for their jobs, and she said that both have taken to the format.

“Everyone was critical about the idea of learning coding on a mobile screen, so we built a compiler a few years ago,” she said. “But believe me, the younger generation prefers to code on mobile. It’s as normal as a desktop. You’d be amazed at the thousands of lines of code they put together, all on a phone.”

The Duolingo-like approach to the curriculum further followed by the fact that there are no formal “teachers” but if people need help they can turn to others in the Sololearn community. Helpers are incentivized, Hyusyan said, “because they learn and they get recognition from the community.”

“The best helpers are community influencers, experts that work with us for free and basically help everyone out. They are our best and most influential members,” she added.

The formula seems to have worked. Sololearn is adding between 200,000 and 300,000 new users every month, she said, with active users up 300% over last year. The 21 million people who are already using the platform essentially gravitated to it by word of mouth. (That will surely change now that Sololearn has raised this big round…)

The potential audience is a massive one. “Billions will need to re-skill in the next 10 years,” Hyusyan said, with the implication being that Sololearn (and others like it) will take on that re-skilling role. “We think the era of institutional learning is over. No one institution, not even a consortium, could cope with that demand.”

With the company also seeing a lot of traction for learning in platform-specific languages, such as C# and Swift for Apple iOS, Kotlin for Android, and Go for Google cloud computing, it will be using the funding both to continue expanding into more languages, but also more learning tailored to specific job categories.

With Dulingo and other bite-sized content players seeing huge growth, that speaks to a lot of potential in the educational realm, and with Sololearn specifically.

“Sololearn provides bite-sized habit-forming instruction at scale, a warm and supportive community, and amazing user-generated content,” said Masha Khusid, Partner at Drive Capital, in a statement. “And with Sololearn bringing that same proven approach to a subject matter with such a profound impact on millions of peoples’ financial futures, it’s particularly exciting and rewarding to be their Series B lead.”

Amid the chaos of the COVID-19 pandemic and the murky path to profitability for shared electric micromobility, an increasing number of companies have turned to subscriptions. It’s a business model that some founders and investors argue hits the profit center sweet spot — an approach that appeals to customers who are wary of sharing as well as paying upfront to own a scooter or e-bike, all while minimizing overhead costs and depreciation of assets.

Across the United States, Europe, some of Canada and at least one Middle Eastern city, existing mobility companies are adding a subscription business line to their repertoire, and entirely new companies are being formed on the basis of the hardware-as-a-service model. But will this new playbook push the unit economics of micromobility in a positive direction? And what will determine which companies win at the subscription game?

In general, subscriptions for everything from groceries and streaming video to exercise equipment and clothing are on an upward slope. Subscription businesses are expected to grow at a rate of 30% this year, according to a 2021 study by digital services monetization company Telecoming.

Micromobility vendors keen to follow other industries into this model are focused on several factors, according to experts following the industry: the ease of scaling, return on investment and cost-per-mile to operate.

“Subscription services for a single vehicle are far more interesting and scalable than the subscription model that was trialed by the shared mobility services,” Oliver Bruce, angel investor and co-host of the Micromobility Podcast with Horace Dediu, told TechCrunch. “The cost per kilometer is just an order of magnitude smaller, and it’s not constrained by citywide caps.”

Shawn Carolan, managing director at Menlo Ventures, is also bullish on the micromobility subscription model because it makes more sense for the consumer, as most people will prefer to pay a low monthly fee rather than a higher upfront fee.

“The best customers are repeat customers, commuters or local neighborhood trips,” Carolan said. “Repeatedly paying per ride is both expensive and cognitively taxing. People want low friction in transportation. Getting from here to there shouldn’t require a lot of thought.”

The key players: E-bikes

Bird and Lime might dominate the shared micromobility space, but they’re not leading the subscription market, largely because their bikes and scooters are built to be heavier and more robust in order to handle city usage. Their operating systems are also designed to manage fleets and keep the vehicles in specific territories within a city. Bird and Spin have announced intentions to offer subscriptions, but so far there’s only been a chance to sign up for a waitlist.

Meanwhile, subscription services tend to offer lighter-weight vehicles that can be carried up flights of stairs or even folded down.

Swapfiets, the bike-sharing company with the distinctive blue front wheel, is one of the pioneers in the world of bike-sharing. In 2015, Richard Burger, Martijn Obers and Dirk de Bruijn started the Dutch company as university students in Delft when they realized that owning a bike could be somewhat of a hassle. The Netherlands is renowned for having more bicycles than people, but that doesn’t make it any easier to buy, sell and maintain them, especially with such high fees at bike shops.

“We asked how we could shift this and get only benefits from using a bike to go from A to B and not have all this hassle,” Burger told TechCrunch. “And for us, the subscription model was really the realization that would fix that.”