Author: azeeadmin

InReach Ventures, the so-called “AI-powered” venture capital firm based in London, is announcing the first closing of a new €53 million fund targeting early-stage European technology companies — surpassing the original fund target of €50 million, apparently.

Founded by former Balderton Capital General Partner Roberto Bonanzinga, along with Ben Smith (former U.K. Engineering Director at Yammer) and John Mesrie (former General Counsel at Balderton Capital), InReach set out in 2015 to use technology to help scale VC, especially across Europe’s idiosyncratic and highly fragmented market.

The firm’s proprietary software-based approach, which is underpinned by machine learning, claims to be able to generate and evaluate deal-flow more efficiently than traditional venture firms that mostly employ human VCs alone — although, admittedly, practically every VC firm is underpinned by some eliminate of data science and/or technology these days. Berlin’s Fly VC is another machine learning-enabled early-stage VC that comes to mind.

However, InReach certainly appears to be putting its money where its mouth is, disclosing that it has invested over €3 million in the development of its software, codenamed “DIG”. To back this up, Bonanzinga tells me the firm employs “more software engineers than investors”. (I saw an early demo of the software a couple of years ago and even then it seemed legit.)

Regards the new fund, Bonanzinga says InReach is targeting the most promising and innovative startups across Europe, primarily in the areas of consumer internet, software as a service and marketplaces. “We are geographically agnostic and will invest in companies anywhere in Europe, from Helsinki to Barcelona, from Warsaw to Rome,” he says. “In most cases we will be the first institutional investors and our first cheques will be between €500,000 and €2 million”.

To date, InReach Ventures has invested in eight startups from across Europe. They include Oberlo (Lithuania), which was subsequently acquired by Shopify, Soldo (Italy/UK), Tutorful (U.K.), Shapr3D (Hungary), Traitly (Sweden) and Loot (Germany).

Below follows a lightly edited Q&A with Bonanzinga on the new fund, how AI can be used to scale venture capital, and why machines won’t put VCs out of a job entirely any time soon.

TC: You have often said that venture capital doesn’t scale, especially across a fragmented market like Europe, but what do you mean by this?

RB: People get very excited about ecosystems but the data shows that startups can come from anywhere; the big technology hubs or more remote locations. This is carried through to Europe’s largest exists: from Betfair in London to Zalando in Berlin, from Supercell and Spotify in the Nordics, to Critio in France and Yoox in Italy, and so on. So not only is deal sourcing fragmented across Europe, but so are the returns.

Traditional ventures firms have looked to manage this fragmentation by throwing people at the problem, but if you want true coverage you need to have a presence in every city in Europe. This is how you need to think of our technology platform, as like having a highly trained associate in every city and town across the whole of Europe, providing structured diligent deal-flow. With this data/technology driven approach we can be truly pan-European at the early-stage, even as the first institutional investor on the cap-table.

TC: A lot of VCs say they use technology to help find or manage deal-flow, how is InReach any different?

RB: Many venture firms talk about data and software. Lately, it has become a hot topic in pitches to limited partners. I predict a new hype: the rush of needing to check the box of “we have a data strategy”. We will have many firms with 30+ investment professionals and a data engineer in a corner. The real question is how many firms are willing to transform their professional service DNA into a product DNA? As always, this is more of a people/organisational question, rather than a question simply of the use of technology.

Take a look at InReach, we are a very atypical founding team for a venture firm. In particular, Ben Smith comes from a software engineering background and has built many data platforms and product development teams (most recently at Yammer/Microsoft). The majority of the people at InReach are software engineers. This is the only Venture Firm we know in which there are more software engineers than investors! So far we have invested over €3m in developing our proprietary technology platform.

TC: Without giving away your secret sauce, how does the InReach platform work, both in terms of the machine learning/feedback loop or the signals/data you plug into it?

RB: From a technology perspective, our logical architecture is primarily based on 3 distinct layers: data, intelligence, and workflow. The data layer is a mix of massive data aggregation, with deep data enhancement, including the generation of a large set of original data. The intelligence layer makes sense of these millions of data points through an ensemble of machine learning algorithms, ranging in complexity from simple rules to advanced networks. Given this data-driven approach and the significant deal-flow this generates, we invest heavily in building a workflow product which allows us to efficiently process thousands of companies each month.

TC: You say the final investment decision is still made by humans: why is that and do you think this will always be the case?

RB: As with any AI company, it’s all about data. We have spent the past 3 years aggregating data from across the internet and building algorithms to provide us with significant dealflow. Much more crucially, we have been collecting and generating our own proprietary data-set of investment decisions and how these startups grow and adapt over time. Clearly this will only get more powerful.

However, especially at this early-stage, so much of the investment decision is based on the founders and what we call the DNA fit of the founders and the problem they are trying to solve. Some of this can be encoded in algorithms and learnt by AI, but there are still intangibles that ultimately require that we ask the question: do we enjoy spending time together?

RB: What has been the reaction by under the radar founders when they are discovered really early via InReach’s software?

RB: The first question is always ‘How did you find out about us?’. Once we explain what we do and how the platform works we create an immediate connection with the entrepreneur. This is exactly what happened when we reached out to 5 entrepreneurs in Vilnius who had started a company called Oberlo. Over the following year, we helped them grow and expand to 30 people across both Vilnius and Berlin, prior to their acquisition by Shopify.

We are taking a very entrepreneurial approach to investing; we run InReach more as a product development organisation, rather than a professional services firm, so we look and feel native to the entrepreneurs we talk to. We try to share our experiences and current-best-practices through the company building process, whether it be OKRs, different agile development methodologies, product roadmaps, etc.

Reaching out to promising entrepreneurs early is not the only advantage that DIG gives us. We are also very efficient and responsive when analysing inbound opportunities. In fact, if you look at our website, we optimize our website to convert visitors to share their startup with us. We are not concerned with being bombarded by opportunities because we have developed a scalable workflow that allows us to efficiently manage significant dealflow.

Four new animated Marvel series, plus a crossover special, are coming to Hulu.

According to the Hollywood Reporter, Hulu has greenlit “MODOK,” “Hit-Monkey,” “Tigra & Dazzler Show” and “Howard the Duck.” The characters will then come together in a special titled “The Offenders.”

These aren’t exactly A-list, or even B-list, Marvel characters. Howard the Duck (created by Steve Gerber) is probably the best-known — mostly for starring in a notorious ’80s flop — but I’ve also got a soft spot for MODOK, a gloriously ridiculous villain whose full name is Mental Organism Designed Only for Killing.

Presumably, the strategy here is to make funny shows about some of the weirder Marvel characters. And there are some established names working behind the scenes, with Kevin Smith signed up as a writer and executive producer on “Howard the Duck,” Patton Oswalt serving in a similar role on “MODOK” and Chelsea Handler on “Tigra and Dazzler Show.”

Meanwhile, the Netflix-Marvel partnership — which also started out with four superhero series and a big crossover — appears to be coming to an end, with only “Jessica Jones” and “The Punisher” left uncanceled (for now).

Hulu is already the home to another Marvel series, “Runaways,” and it makes sense that the relationship for to deepen after the Fox acquisition, which made Marvel’s corporate parent Disney into the majority owner of Hulu. And if that’s not enough streaming superhero content for you, there are also shows about Loki and other characters from the Marvel Cinematic Universe in the works for the yet-to-launch Disney+.

Jobvite, the company that was once an early mover in leveraging social networks to help source job opportunities and find interesting candidates for openings, is today announcing two big moves to double down on its ambition to build a bigger platform for recruitment and applicant tracking.

The company has picked up an investment of over $200 million, and it will be using the money to acquire three smaller companies focusing on different aspects of the recruitment process: Talemetry (which specializes in recruitment marketing); RolePoint (for employee referrals and in-company moves); and Canvas (a text-based conversational bot to get the screening process started).

Jobvite is not disclosing its valuation with the funding, which is coming from private equity firm K1, but for a little guidance, in an interview, Dan Finnigan, Jobvite’s CEO, said it was a majority stake but nowhere near a full acquisition. (PitchBook’s last valuation of the company, of around $150 million, is very old, dating from September 2014; and it has never been confirmed by the company.)

The combined company will have 2,000+ customers that include Schneider Electric, Lenovo, Santander, PayPal, Genuine Parts, and Panasonic.

Finnigan says that Jobvite’s growth, and investor interest in backing that, is happening in tandem with two changes, one technological and another the evolution in how organizations handle human resources.

Several years ago, many companies — hoping to cut costs — merged together their personnel and recruitment operations, “and recruiting became an afterthought,” he said. That led to companies tacking on, as a kind of minimum viable solution, applicant tracking software but little or nothing else.

But more recently, the war for talent has escalated — not just because unemployment is low but because there are now multiple different opportunities and shortages of suitable people for specific, often emerging skills. In turn, businesses have started to realise “that recruiting is the backbone of every company, and that applicant tracking is just not enough,” he said.

At the same time, there have been evolutions in the technology. While a lot of recruitment software (and the recruitment process) has traditionally been quite fragmented, a move to cloud solutions has provided an avenue for consolidating the process and using one platform to manage it. (Google’s launch of Hire, which lets users manage job applicants using G Suite apps; LinkedIn’s recruitment platform; Zoho and SmartRecruiter are all prime examples of how cloud platforms are being used to build more complete sourcing and tracking services.)

Coupled with this is a rising use of technology like machine learning to remove some of the more mechanical aspects of a recruiter’s job to speed up processes.

Jobvite’s three acquisitions all play into both of these trends. Canvas, for example, uses a bot to source initial information about a candidate to start the screening process before human recruiters step in to take over.

Talemetry, meanwhile, taps into marketing tech to help identify where the most ideal candidates might be in order to better target job opportunities at them, in the form of ads or other kind of content.

Lastly, RolePoint will add a new feature to tap into referrals from existing employees, and to help manage in-company moves.

Finnigan likens the cloud-based platform approach that we’re seeing in the market to the impact Salesforce has had on the expanding concept of CRM. “We know that marketing and sales software have continued to evolve with new features like content marketing, and the same has happened in recruitment,” he said.

“We are excited to be investing in such an innovative set of technologies,” says Ron Cano, managing partner at K1 Investment Management, in a statement. “The talent acquisition industry is critical to our economy and ripe for disruption with outdated software still prevalent. K1’s investment will create the only true end-to-end talent acquisition platform and will provide our customers with accelerated growth in innovation of product features and services.”

Bevy announced today that it has acquired CMX, which it describes as “the world’s largest community for community professionals.”

In other words, CMX is trying to connect and support the people whose job is to build communities around their companies. To do that, it organizes the CMX Summit and also offers membership to a private network called CMX Pro.

Bevy, meanwhile, has built software for companies to manage community events. In fact, the company was created by the organizers of Startup Grind, who said they initially built Bevy because of the challenge involved in managing all the different Startup Grind events.

The company now says it works with customers including Slack, Atlassian, Asana, Gainsight and Duolingo — in fact, Duolingo uses it to host 1,000 monthly events.

In an email, Bevy CEO Derek Andersen told me, “I’ve been a  CMX community speaker, sponsor, and member for many years, and there is no better way to get educated and networked in the community industry than CMX.”

The financial terms of the acquisition were not disclosed. CMX’s co-founder and CEO David Spinks will continue to lead CMX initiatives within Bevy, and he will become the company’s vice president of community.

“People are in desperate need of meaningful community,” Spinks said in the acquisition announcement. “They’re craving more depth, and that often comes through in-person, real world connection. [CEO Derek Andersen] and the Bevy team have built a great platform to help teams scale their IRL community programs. We’re thrilled to join forces and work toward a more meaningfully connected world.”

Just days after Postmates filed confidential paperwork for an initial public offering, the latest news in the on-demand delivery space is that competitor DoorDash is in the process of raising a $500 million round, The Wall Street Journal reports. The round would reportedly value DoorDash at more than $6 billion and possibly up to $7 billion.

According to the WSJ, Temasek Holdings Pte., Singapore’s state investment firm, is expected to lead the round.

Last year, DoorDash raised a $250 million round of financing that valued the company at $4 billion. In total, DoorDash has raised nearly $1 billion in funding from investors like SoftBank, Sequoia, DST Global, Kleiner Perkins and others.

Earlier this year, the food-delivery startup became the first startup to operate in all 50 states. Meanwhile, similar to Instacart, DoorDash has also reportedly been subsidizing worker pay with tips from customers, but DoorDash still has yet to respond to TechCrunch regarding the practice.

I’ve reached out to DoorDash and will update this story if I hear back.

Amazon is about to expand its smart home offerings in a big way. The company just announced its intention to acquire Bay Area-based home mesh router startup, Eero. It’s a pretty clear fit for the online retailer as it pushes to make Alexa feature in the connected home.

The move also makes sense for five-year-old Eero, which, in spite of being early to the home mesh router game and pulling in some high profile investors, has struggled. This time last year, the company laid off 30 employees — roughly one-fifth of its work force.

Amazon’s certainly got the deep pockets, and the addition of Alexa to routers from Huawei and Netgear last year have demonstrated that this category can be a viable one. It makes sense, as these coverage extending mesh routers, like Echo Dots, are designed to be plugged into every room of the home. 

Amazon has been picking up a number of high profile home automation startups in recent years, including Ring and Blink, as it looks to launch its own in-house Alexa smart home ecosystem. In many cases, Amazon has opted to retain the startups’ branding, which could bode well for the future of the Eero name — though the company admittedly doesn’t have the same sort of recognition as a Ring. 

“We are incredibly impressed with the eero team and how quickly they invented a WiFi solution that makes connected devices just work,” Amazon SVP Dave Limp said in a press release. “We have a shared vision that the smart home experience can get even easier, and we’re committed to continue innovating on behalf of customers.”

The deal is still waiting for all of the standard regulatory approval. Details of the acquisition have yet to be disclosed.

I think most of us have had this experience, especially when you’re in a big city: you step off of public transit, take a peek at Google Maps to figure out which way you’re supposed to go… and then somehow proceed to walk two blocks in the wrong direction.

Maybe the little blue dot wasn’t actually in the right place yet. Maybe your phone’s compass was bugging out and facing the wrong way because you’re surrounded by 30-story buildings full of metal and other things that compasses hate.

Google Maps’ work-in-progress augmented reality mode wants to end that scenario, drawing arrows and signage onto your camera’s view of the real world to make extra, super sure you’re heading the right way. It compares that camera view with its massive collection of Street View imagery to try to figure out exactly where you’re standing and which way you’re facing, even when your GPS and/or compass might be a little off. It’s currently in alpha testing, and I spent some hands-on time with it this morning.

A little glimpse of what it looks like in action:

Google first announced AR walking directions about nine months ago at its I/O conference, but has been pretty quiet about it since. Much of that time has been spent figuring out the subtleties of the user interface. If they drew a specific route on the ground, early users tried to stand directly on top of the line when walking, even if it wasn’t necessary or safe. When they tried to use particle effects floating in the air to represent paths and curves, a Google UX designer tells us, one user asked why they were ‘following floating trash’.

The Maps team also learned that no one wants to hold their phone up very long. The whole experience has to be pretty quick, and is designed to be used in short bursts — in fact, if you hold up the camera for too long, the app will tell you to stop.

Firing up AR mode feels like starting up any other Google Maps trip. Pop in your destination, hit the walking directions button… but instead of “Start”, you tap the new “Start AR” button.

A view from your camera appears on screen, and the app asks you to point the camera at buildings across the street. As you do so, a bunch of dots will pop up as it recognizes building features and landmarks that might help it pinpoint your location. Pretty quickly — a few seconds, in our handful of tests — the dots fade away, and a set of arrows and markers appear to guide your way. A small cut-out view at the bottom shows your current location on the map, which does a pretty good job of making the transition from camera mode to map mode a bit less jarring.

When you drop the phone to a more natural position – closer to parallel with the ground, like you might hold it if you’re reading texts while you walk — Google Maps will shift back into the standard 2D map view. Hold up the phone like you’re taking a portrait photo of what’s in front of you, and AR mode comes back in.

In our short test (about 45 minutes in all), the feature worked as promised. It definitely works better in some scenarios than others; if you’re closer to the street and thus have a better view of the buildings across the way, it works out its location pretty quick and with ridiculous accuracy. If you’re in the middle of a plaza, it might take a few seconds longer.

Google’s decision to build this as something that you’re only meant to use for a few seconds is the right one. Between making yourself an easy target for would-be phone thieves or walking into light poles, no one wants to wander a city primarily through the camera lens of their phone. I can see myself using it the first step or two of a trek to make sure I’m getting off on the right foot, at which point an occasional glance at the standard map will hopefully suffice. It’s about helping you feel more certain, not about holding your hand the entire way.

Google did a deeper dive on how the tech works here, but in short: it’s taking the view from your camera and sending a compressed version up to the cloud, where it’s analyzed for unique visual features. Google has a good idea of where you are from your phones’ GPS signal, so it can compare the Street View data it has for the surrounding area to look for things it thinks should be nearby — certain building features, statues, or permanent structures — and work backwards to your more precise location and direction. There’s also a bunch of machine learning voodoo going on here to ignore things that might be prominent but not necessarily permanent (like trees, large parked vehicles, and construction.)

The feature is currently rolling out to “Local Guides” for feedback. Local Guides are an opt-in group of users who contribute reviews, photos, and places while helping Google fact check location information in exchange for early access to features like this.

Alas, Google told us repeatedly that it has no idea when it’ll roll out beyond that group.

Lyft is donating $700,000 to TransForm, an organization focused on improving access to transportation in underserved areas throughout California. In partnership with Oakland Mayor Libby Schaaf, Lyft and TransForm will invest in a free bike library and community parklets in Oakland, Calif. Lyft will also offer free rides to low-income residents of Oakland.

“At Lyft, we believe it is our civic responsibility to make cities better places to live,” Lyft co-founder and President John Zimmer said in a statement. “We know that transportation is a major key to unlocking economic mobility. We also know that transportation has been inaccessible for far too many communities for far too long. We have a unique opportunity to set a new standard for transportation equity and inclusiveness.”

Lyft, which bought bike-share behemoth Motivate for about $250 million last July, is working with these organizations to figure out the best places to put bike-share stations. In addition to Lyft offering free rides and a $5 per month pass for bikes and scooters, the money will also enable East Oakland Collective to offer subsidized AC Transit passes for qualifying residents.

The $700,000 is specifically going toward TransForm partner organizations East Oakland Collective and Scraper Bikes. Those two organizations will focus on improving bike-share station placement and launching a community-run bike-lending library.

“The Scraper Bike Team is excited to be a partner on this program to empower black and brown residents and get more butts on bikes!” Scraper Bikes founder and Executive Director Champ Stevenson said in a statement.  “We’ll help make sure the programs and infrastructure reflect the existing community and culture here in deep East Oakland. We plan on employing folks from the community to assist with some of the equity work that will move Oakland in the direction we the people believe it needs to be moving in.”

Update 2:08pm PT: While Lyft is donating $700,000 upfront, it will work with TransForm to raise an additional $300,000 from foundations.

Lenovo’s Watch X was widely panned as “absolutely terrible.” As it turns out, so was its security.

The low-end $50 smartwatch was one of Lenovo’s cheapest smartwatches. Available only for the China market, anyone who wants one has to buy one directly from the mainland. Lucky for Erez Yalon, head of security research at Checkmarx, an application security testing company, he was given one from a friend. But it didn’t take him long to find several vulnerabilities that allowed him to change user’s passwords, hijack accounts and spoof phone calls.

Because the smartwatch wasn’t using any encryption to send data from the app to the server, Yalon said he was able to see his registered email address and password sent in plain text, as well as data about how he was using the watch, like how many steps he was taking.

“The entire API was unencrypted,” said Yalon in an email to TechCrunch. “All data was transferred in plain-text.”

The API that helps power the watch was easily abused, he found, allowing him to reset anyone’s password simply by knowing a person’s username. That could’ve given him access to anyone’s account, he said.

Not only that, he found that the watch was sharing his precise geolocation with a server in China. Given the watch’s exclusivity to China, it might not be a red flag to natives. But Yalon said the watch had “already pinpointed my location” before he had even registered his account.

Yalon’s research wasn’t just limited to the leaky API. He found that the Bluetooth-enabled smartwatch could also be manipulated from nearby, by sending crafted Bluetooth requests. Using a small script, he demonstrated how easy it was to spoof a phone call on the watch.

Using a similar malicious Bluetooth command, he could also set the alarm to go off — again and again. “The function allows adding multiple alarms, as often as every minute,” he said.

Lenovo didn’t have much to say about the vulnerabilities, besides confirming their existence.

“The Watch X was designed for the China market and is only available from Lenovo to limited sales channels in China,” said spokesperson Andrew Barron. “Our [security team] team has been working with the [original device manufacturer] that makes the watch to address the vulnerabilities identified by a researcher and all fixes are due to be completed this week.”

Yalon said that encrypting the traffic between the watch, the Android app and its web server would prevent snooping and help reduce manipulation.

“Fixing the API permissions eliminates the ability of malicious users to send commands to the watch, spoof calls, and set alarms,” he said.

Apple’s push to get developers to build subscription-based apps is now having a notable impact on App Store revenues. According to a new report from Sensor Tower due out later this week, revenue generated per U.S. iPhone grew 36 percent, from $58 in 2017 to $79 last year. As is typical, much of that increase can be attributed to mobile gaming, which accounted for more than half of this per-device average. However, more substantial growth took place in the categories outside of gaming — including those categories where subscription-based apps tend to rule the top charts, the firm found.

According to the report’s findings, per-device app spending in the U.S. grew more over the past year than it did in 2017.

From 2017 to 2018, iPhone users spent an average of $21 or more on in-app purchases and paid app downloads — a 36 percent increase compared with the 23 percent increase from 2016 to 2017, when revenue per device grew from $47 to $58.

However, 2018’s figure was slightly lower than the 42 percent increase in average per-device spending seen between 2015 and 2016, when revenue grew from $33 to $47, noted Sensor Tower.

As usual, mobile gaming continued to play a large role in iPhone spending. In 2018, gaming accounted for nearly 56 percent of the average consumer spend — or $44 out of the total $79 spent per iPhone.

But what’s more interesting is how the non-gaming categories fared this past year.

Some categories — including those where subscription-based apps dominate the top charts — saw even higher year-over-year growth in 2018, the firm found.

For example, Entertainment apps grew their spend per device increase by 82 percent to $8 of the total in 2018. Lifestyle apps increased by 86 percent to reach $3.90, up from $2.10.

And though it didn’t make the top five, Health & Fitness apps also grew 75 percent year-over-year to account for an average of $2.70, up from $1.60 in 2017.

Other categories in the top five included Music and Social Networking apps, which both grew by 22 percent.

This data indicates that subscription apps are playing a significant role in helping drive iPhone consumer spending higher.

The news comes at a time when Apple has reported slowing iPhone sales, which is pushing the company to lean more on services to continue to boost its revenue. This includes not just App Store subscriptions, but also things like Apple Music, Apple Pay, iCloud, App Store Search ads, AppleCare and more.

As subscriptions become more popular, Apple will need to remain vigilant against those who would abuse the system.

For example, a number of sneaky subscription apps were found plaguing the App Store in recent weeks. They were duping users into paid memberships with tricky buttons, hidden text, instant trials that converted in days and the use of other misleading tactics.

Apple later cracked down by removing some of the apps, and updated its developer guidelines with stricter rules about how subscriptions should both look and operate.

A failure to properly police the App Store or set boundaries to prevent the overuse of subscriptions could end up turning users off from downloading new apps altogether — especially if users begin to think that every app is after a long-term financial commitment.

Developers will need to be clever to convert users and retain subscribers amid this shift away from paid apps to those that come with a monthly bill. App makers will need to properly market their subscription’s benefits, and even consider offering bundles to increase the value.

But in the near-term, the big takeaway for developers is that there is still good money to be made on the App Store, even if iPhone sales are slowing.