Author: azeeadmin

Last year, Charlie Bergevin and Brian Cristol, co-founders of Uber’s trucking logistics business Uber Freight, heard Reid Hoffman say Turvo had some of the best technology he had ever seen. Frustrated with the direction Uber Freight had taken, they called up Turvo’s founder and chief executive officer Eric Gilmore.

It wasn’t long before offers were on the table and now, they’ve joined Turvo full-time. Cristol as head of enterprise partnerships and Bergevin as an enterprise partnerships executive. Bin Chang, a founding engineer at Uber Freight, is joining Turvo, too, a move I’m told Cristol and Bergevin were unaware of until they’d already accepted roles at the venture-funded startup. Chang begins Feb. 11.

“Brian and Charlie … have contributed so much to incubate this business and scale it to where we are today,” Uber Freight chief Lior Ron wrote in an internal email to employees shared with TechCrunch. “They were always on the forefront of exploration and innovation and were able to constantly push themselves, and all of us, to the next frontier.”

Cristol and Bergevin were Uber’s first B2B sales hires when they joined the ride-hailing firm in 2016. Tasked with finding product market fit for Uber’s final-mile businesses under the ‘Uber Everything’ initiative, they began learning about the truckload transportation and logistics industry. That’s when they linked up with Curtis Chambers, Uber’s long-time director of engineering. Together, the trio pitched their idea for a logistics business unit within Uber to then CEO Travis Kalanick.

Turvo’s real-time logistics platform.

Today, Uber Freight has roughly 750 employees and $1 billion in revenue. While the loss of two of its key dealmakers, who established relationships with Uber Freight’s Fortune 1000 customers, is cause for concern, Cristol and Bergevin suggested the unit is a rocket ship waiting to take off. 

“Uber Freight has by far the biggest market size and is by far the newest and it was made from scratch,” Bergevin told TechCrunch in reference to other Uber-branded businesses. “Sure we had the brand but with Uber Eats we had drivers, too, this was starting from scratch.”

So why are they leaving? The pair told TechCrunch they simply don’t feel like they are solving enough of the key issues plaguing the industry, particularly legacy systems. Uber Freight, for its part, focuses on freight brokerage, optimizing for top-line revenue. The business automates the backend operations that exist in transportation and truckload brokerage today, aggregating trucking fleets via the Uber Freight app and connecting drivers with shippers.

Turvo, on the other hand, works across the supply chain. The company, which has raised a total of $88.6 million at a $435 million valuation, according to PitchBook, helps shippers, brokers and carriers work together in real time using a software interface on their desktops and mobile phones. Turvo emerged from stealth two years ago with a $25 million Series A led by Activant Capital, with participation from Felicis Ventures, Upside Partnership, Slow Ventures and more. In November, the startup closed a Series B funding of $60 million led by Mubadala Ventures.

“Turvo’s platform is providing this solution to legacy logistics platforms and really maximizing all parts of the supply chain, not just pieces of it, which we were accustomed to at Uber,” Cristol told TechCrunch. “We were excited about how Turvo was innovating around the nucleus of logistics.”

Cristol and Bergevin officially began work at Turvo last week.

The New York City Economic Development Corporation (NYCEDC) and CIV:LAB – a nonprofit dedicated to connecting urban tech leaders – have announced the launch of The Grid, a member-based partnership network for New York’s urban tech community. The goal of the network is to link organizations, academia and local tech leaders, in order to promote collaboration and the sharing of knowledge and resources.

In addition to connecting member companies and talent, The Grid will host various events, educational programs, and co-innovation projects, while hopefully improving access to investors as well as pilot program opportunities. The Grid is launching with over 70 member organizations – approved through an application and screening process – across various stages and sectors.

In recent years, the tech and startup scene in New York has notably ballooned – evolving from the Valley’s obscure younger sibling to one of the top cities for talent, entrepreneurship, and venture capital investment. And while the city has seen countless startups, VCs, accelerators, and other entrepreneurial resources set up shop within its borders, getting the right tools in place is only part of the battle.

New York wants to prove its initiatives are more than just “show-and-tell” projects and city officials believe that building a truly sustainable innovation economy is dependent on all its local resources working in conjunction, allowing entrepreneurship to permeate every arm of commerce. With an institutionalized network like The Grid, New York hopes it can further fuse its pockets of innovation into to one well-oiled machine, consistently producing transformative ideas.

“The Grid represents a promising new way for NYCEDC to work across sectors to strengthen collaboration and innovation, first in New York City and hopefully soon in many more cities across the country and around the world,” said NYCEDC President and CEO James Patchett in a statement. “It signals that New York City is leading with  a new approach to technology and startup culture, with a real focus on diversity, inclusion, equity, and community.”

As one of the largest and most industrially diverse cities in the world, New York has naturally placed a heightened focus on the growing sector of “urban tech” – which has been broadly categorized as innovation focused on improving city functionality, equality or ease of living. According to NYCEDC, the urban tech space has seen nearly $80 billion in VC investment since 2016, with nearly 10% going to New York-based beneficiaries.

The launch of The Grid is part of an expansion of NYCEDC’s larger UrbanTech NYC program, which has already helped establish the New York innovation hubs New Lab, Urban Future Lab, and Company. Alongside the membership network and a new site for UrbanTech NYC, NYCEDC is also launching The Grid Academy, an adjacent academic group with the mission of creating applied R&D partnerships between local academic institutions and corporate sponsors. The expansion of UrbanTech NYC represents the latest of several initiatives NYCEDC is pursuing to develop the broader ecosystem, coming just months after the EDC announced the launch of Cyber NYC, a $30 million investment initiative focused on growing New York’s cybersecurity presence and infrastructure.

The group will be led by a steering committee that will guide decisions related to strategic priorities, funding, events, and communications. Members of the committee include some of The Grid’s largest government and corporate members including the Bronx Cooperative Development Initiative, the Downtown Brooklyn Partnership, Civic Hall, Company, New Lab, Urban Future Lab, Dreamit UrbanTech, URBAN-X, Urban.Us, Accenture, Samsung NEXT, Rentlogic, Smarter Grid Solutions, Civic Consulting USA, and the World Economic Forum.

“Since its early days, innovation has been part of the DNA that is New York City,” said Jeff Merritt, Head of IoT + Smart Cities at World Economic Forum. “Nowhere else in the world can you find an ecosystem that combines as many industries and nationalities. New York’s thriving urban technology community is a natural byproduct of what happens when you allow diversity, entrepreneurship and ambition to collide in one of the greatest cities in the world.” 

The Grid’s first meeting will be held on February 19th at Samsung NEXT’s New York HQ. Membership applications for The Grid are accepted on a rolling basis and can be found here on the UrbanTech NYC website.

Six months after an episode of “Homeland” showed hackers exploiting security vulnerabilities in the (fictional) Vice President’s pacemaker, Mike Kijewski, the founder of a new startup security company called Medcrypt, was approached by his (then) employers at Varian Medical Systems with a unique problem. 

“A hospital came to the company and said we are treating a patient and a nation-state may attempt to assassinate the patient that we’re treating by using a cybersecurity vulnerability in a medical device to do it,” Kijewski recalled.

At the time, there were no universal solutions to those types of security threats — so companies were left to cobble together one-off solutions for their devices, which is what Kijewski’s former employer likely attempted to do.

Ever since, Kijewski became obsessed with the security holes that exist in the foundation of the healthcare industry’s practice — the devices used to diagnose and treat patients.

“My partner Eric Pancoast and I looked into the problem of medical device cybersecurity and we found two things,” says Kijewski. “Number one there were no regulations forcing medical device companies to use cybersecurity protections at all. Number two, any given company has only one core competency — maybe two. And are medical device vendors going to have cryptography and cybersecurity competencies?”

Medcrypt was launched in 2016 to ensure that medical device manufacturers wouldn’t need to be cryptographic experts. The company is graduating from the latest batch of Y Combinator (after raising a $3 million seed round from Eniac Ventures and other investors) with a pitch to secure medical devices using just a single line of code.

It’s a technological necessity thanks to new guidelines from the Food and Drug Administration requiring medical devices to include security features like encryption, signature verification, and intrusion detection.

By inserting a single line of code into the software of a device, Medcrypt can provide the security manufacturers need at the device level, according to Kijewski.

The company not only encrypts the data on the device, but it also provide intrusion detection services by analyzing medical device metadata to identify standard device behaviors and deviations from that behavior, Kijewski said.

Medcrypt is one of a growing number of startups that are securing medical devices and hospital networks as the threats to the healthcare system proliferate.

Other startups are working on protecting hospital networks. Companies like Medigate, founded by ex-Israeli officers from the Israeli Defense Forces, which just raised $15 million from investors including YL Ventures and US Venture Partners; and Cylera, which is backed by Samsung Next and launched from the DreamIT healthcare accelerator are two such companies.

By 2017, Beckers Health IT and CIO Report counted over 107 technology companies pitching cybersecurity solutions to healthcare practitioners and medical device manufacturers.

The UK government has announced it’s working on a process to support so-called ‘advanced trials’ of autonomous vehicles — i.e. trials without human safety drivers.

It also says it will be beefing up the existing Code of Practice for testing driverless cars to provide a framework to support the evolution of the tech, saying it’s on track to meet its goal of fully driverless cars being tested on public roads by 2021.

Commenting in a statement, Richard Harrington, automotive minister, said: “We want to ensure through the Industrial Strategy Future of Mobility Grand Challenge that we build on this success and strength to ensure we are home to development and manufacture of the next generation of vehicles.

“We need to ensure we take the public with us as we move towards having self-driving cars on our roads by 2021. The update to the Code of Practice will provide clearer guidance to those looking to carry out trials on public roads.”

The government gave the greenlight for hands-free testing of driverless cars back in 2015, though it still require there to be a (human) safety driver behind the wheel (which also of course requires the vehicle to have a wheel in the first place).

The move was quickly followed by a Code of Practice for testing autonomous vehicles in public places — which remains in operation. But a Department for Transport spokesman said there’s been an increase in trial activity across the UK since then.

Hence the plan to update and strengthen the code and also make provisions for fully autonomous trials — to “set even clearer expectations for safe and responsible trials”, as the government’s press release puts it.

The current code of practice allows for automated vehicle trials on any UK road in compliance with UK law — which means test vehicles must include a remote driver.

But in the coming years the government is preparing to drop that requirement.

In its stead, it says the updated code will include an expectation on those carrying out trials to publish safety information; trial performance reports; and to carry out risks assessments before conducting a trial.

Trialling organisations will also be expected to inform the relevant authorities, emergency services, and “anyone who might be affected by trial activity” — which could potentially entail a lot of outreach for autonomous vehicle startups hoping to run tests in densely populated urban environments. (Ergo, remote, rural regions may end up being test locations of initial choice.)

“Advanced trials will not be supported unless they have passed rigorous safety assessments,” the government also warns.

The devil will clearly be in the detail of the updated code and it’s not clear exactly when it will be published. Nor whether trials of fully autonomous vehicles will be able to take to public roads before 2021.

A report in today’s Times newspaper suggests such vehicles could be being tested by the end of this year. But the Department for Transport spokesman we spoke to would not confirm that timeframe — pointing only to the existing government target of trials by 2021.

Calm, the meditation and wellness app that launched back in 2012, has today announced the close of an $88 million Series B financing with a valuation of $1 billion. (We have not been able to clarify whether the valuation was post- or pre-money.)

The funding was led by TPG Growth, with participation from CAA and existing investors Insight Venture Partners and Sound Ventures.

As meditation grows in popularity across the U.S. — the CDC says it tripled from 4.1 percent in 2012 to 14.2 percent in 2017 — Calm has capitalized on the craze by offering a suite of mindfulness and wellness tools, from guided meditation sessions to a product called “Sleep Stories,” via a subscription.

But Calm is also meeting stress where it lives. For example, the company invested $3 million in XPresSpa late in 2018. XPresSpa is a chain of quick spa stores found in airports. Meanwhile, Calm partnered with American Airlines to offer Calm content within AA’s in-flight entertainment system.

The growth of Calm is hard to deny. The company says that it has topped 40 million downloads worldwide, with more than one million paying subscribers. Calm also says that it quadrupled its revenue in 2018 — the company is now profitable — and is on track to do $150 million in annual revenue.

With the new financing, Calm’s total amount raised comes to $116 million.

Moreover, Calm’s valuation has soared from $250 million at the beginning of 2018, on the heels of a $27 million Series A, to now hit $1 billion.

Here’s what cofounder and co-CEO Michael Acton Smith had to say in a prepared statement:

We started as a meditation app, but have grown far beyond that. Our vision is to build one of the most valuable and meaningful brands of the 21st century. Health and wellness is a $4 trillion industry and we believe there is a big opportunity to build the leading company in this fast growing and important space.

Cofounder and co-CEO Alex Tew said that the funding will predominantly go towards international growth and increased investment in content.

Spotify continues to see growing uptake for its all-you-can-eat streaming music (and increasingly podcast) services, even as it fell short of analyst expectations on sales in its earnings.

In Q4 results reported today alongside the blockbuster news that it was acquiring Gimlet and Anchor to step up its podcast push, the company said that monthly active users have hit 207 million, up nearly 30 percent on a year ago, and that it is for the first time reporting positive operating profit — of €94 million — and net income — of €442 million, making this Spotify’s first ever quarter to post positive operating profit, net income, and free cash flow.

But those strong numbers were also dimmed by one of the big downsides of being a public company: failing to meet analyst expectations on its financials.

The company reported revenues of €1,495 million, up 30 percent on the same quarter a year ago. This works out to $1,702 million, falling short of the $1.71 billion analysts collectively were expecting.

On the earnings per share front, however, the company’s strong net income helped it well exceed estimates. Spotify noted diluted EPS of $0.36, while analysts had expected a loss per share of $0.22.

Spotify is still a relatively young company, and as it continues to face competition from the likes of Apple, Amazon and Google, it’s still showing very strong growth despite not meeting some targets.

With a push into more countries in the Middle Eastern region, Spotify is now active in 78 countries and it said it has plans to add more this year. Across that footprint, listening time is growing, both in its free (ad-supported) and paid tiers, with 15 billion hours of content consumed in the quarter.

While the company continues to build out its free tier with more adtech both across its music and now podcast offerings, its Premium tier is also continuing to grow and still represents the bulk of the company’s revenues.

Subscribers now stand at 96 million for its paid services, up 36 percent, with Spotify attributing some of the strong performance to promotions with Google Home — its first-ever hardware bundle — and the holiday season rush. The company has been increasingly diversifying its paid tiers, now offering student and family plans alongside its individual subscriptions.

Revenues from paid subs account for nearly all of Spotify’s turnover. In Q4 it was €1,320 million, or 88 percent of the total, and in line with revenue growth overall, were also up 30 percent over last year. Average revenue per user was €4.89, Spotify said.

Ad-Supported revenue, meanwhile, accounted for just €175 million of its total turnover.

The company’s B2B sales are similarly being developed in earnest. Spotify for Artists — which helps to measure how tracks are played and other business aspects of an artists’ profile on Spotify — is now used by 300,000 creators, the company said.

Now that there is also a supplementary Spotify for Podcasters service, given that Spotify is now amping up its spoken content with the Gimlet and Anchor acquisitions, that may also start to see a bump in usage. Currently Spotify says that 10,000 podcasters are using its analytics tool for audience and other insights, which is a relatively small number. The jury is still out on this and Spotify’s other pushing analytics efforts.

Spotify is going after podcasts in a major way in 2019.

The music streaming service today confirmed that it has snapped up two podcast networks — Gimlet and Anchor — in undisclosed deals. But that’s not all, the firm said it has plans to spend a further $400-$500 million “on multiple acquisitions in 2019” to get even deeper into the space.

The Gimlet is said to be upwards of $200 million, according to Recode — which broke news of the deal last week — but it isn’t yet clear how much the company has spent on Anchor, which helps podcasters record their shows and then distribute them online.

The deals are a major push for Spotify, but the writing has been on the wall for those paying attention. We reported last month from CES that is going after podcasting this year. The company has been going after exclusive shows — at CES it added “Unbothered” from journalist Jemele Hill — while it is also working on specialist ad units around its podcast network.

We’ve heard Spotify talk a big game on ‘the future of radio’ before, but this time around it is putting money behind its ambitions. The big strategy, beyond catering to the growth of podcasts, is to develop a new channel for consumption of its core business as Courtney Holt, the head of Spotify Studios, told us in January.

“People who consume podcasts on Spotify are consuming more of Spotify — including music,” Holt said. “So we found that in increasing our [podcast] catalog and spending more time to make the user experience better, it wasn’t taking away from music, it was enhancing the overall time spent on the platform.”

That also includes a much more personal and tailored approach to content, which is important given that Spotify offers a catalog of over 40 million tracks.

“Think about what we’ve done around music,” Brian Benedik, VP and Global Head of Advertising Sales at Spotify, told TechCrunch. “The more understanding you have around the music you stream, the more we can personalize the ad experience. Now we can take that to podcasts.”

As more organizations move to cloud-based IT architectures, a startup that’s helping them secure that data in an efficient way has raised some capital. vArmour, which provides a platform to help manage security policies across disparate public and private cloud environments in one place, is announcing today that it has raised a growth round of $44 million.

The funding is being led by two VCs that specialise in investments into security startups, AllegisCyber and NightDragon.

CEO Tim Eades said that also participating are “two large software companies” as strategic investors that vArmour works with on a regular basis but declined to name them. (You might consider that candidates might include some of the big security vendors in the market, as well as the big cloud services providers, as two possibilities.) This Series E brings the total raised by vArmour to $127 million.

When asked, Eades said that the company would not be disclosing its valuation. That lack of transparency is not uncommon among startups, but perhaps especially should be expected at a business that operated in stealth for the first several years of its life. However, according to PitchBook, vArmour was valued at $420 million when it last raised money, a $41 million round in 2016.

That would put the startup’s valuation at $464 million with this round, if everything is growing at a steady pace, or possibly more if investors are keen to tap into what appears to be a growing need.

That need might be summarised like this: we’re seeing a huge migration of IT to cloud-based services, with public cloud services set to grow 17.3 percent in 2019. A large part of those deployments — for companies typically larger than 1,000 people — are spread across multiple private and public clouds.

This, in turn, has opened a new front in the battle to secure data. “We believe that hybrid cloud security is a market valued somewhere between $6 billion and $8 billion at the moment,” said Eades.

Many organizations are storing information and apps across multiple locations — between seven and eight data centers on average for, say, a typical bank, Eades said — and while that may help them hedge bets, save money and reach some efficiencies, but the lack of cohesion also opens to door to security loopholes.

“Organizations are deploying multiple clouds for business agility and reduced cost, but the rapid adoption is making it a nightmare for security and IT pros to provide consistent security controls across cloud platforms,” said Bob Ackerman, Founder and Managing Director at AllegisCyber, in a statement. “vArmour is already servicing this need with hundreds of customers, and we’re excited to help vArmour grow to the next stage of development.”

vArmour is among the companies — Cisco and others are also competing with it — that are providing a platform to take something that is somewhat messy — disparate security policies covering disparate containers and apps — and handle it in a more cohesive and neat way by providing a single way to manage and provision compliance and policies across all of them. This not only helps to manage the data but potentially can help halt a breach by letting an organization put a stop in place across multiple environments.

“From my experience, this is an important solution for the cloud security space,” said Dave DeWalt, founder of NightDragon, in a statement. “With security teams now having to manage a multitude of cloud estates and inundated with regulatory mandates, they need a simple solution that’s capable of continuous compliance. We haven’t seen anyone else do this as well as vArmour.”

Eades said that the big change in the last couple of years for vArmour is that, as cloud services have grown in popularity, it has been putting in place a self-service version of the main product, which it sells as the vArmour Application Controller, aimed at smaller organizations. It’s also been leaning heavily on channel partners (Telstra, which led its last round, is one strategic of this kind) to help with the heavy lifting of sales.

vArmour isn’t disclosing revenues or how many customers it has at the moment, but Eades said that it’s been growing at 100 percent each year for the last two. At this rate, he says that plan will be to take the company public in the next couple of years.

Global investor SparkLabs is adding another business line after it announced a new consultancy division that’s aimed at working with Fortune 500 companies and other global corporates keen to deepen their position in tech.

Best known for its funds — which cover global deals, a crypto vehicle and a Korea-based fund — and over half a dozen accelerator programs worldwide, the organization is responding to interest it has fielded from LPs, corporates and other businesses keen to tap into its network and insights, SparksLabs Group co-founder Jimmy Kim told TechCrunch.

“We’ll be providing research reports on certain key industries and doing key networking and introductions into startups of their interest,” he said in an interview. “Initially, there will be a handful of staff and then we’ll just scale from there.”

SparkLabs Foundry will be headquartered in San Francisco but it will tap into the group’s global reach, including offices in markets like Singapore and Korea, and insight from a portfolio of more than 220 startups across its various activities.

Kim explained that, particularly for corporations based in Asia, simply opening an office in Silicon Valley doesn’t guarantee that they walk into the right networks for deal flow or gain key insight. That’s where SparkLabs is hoping to make a difference, and it expects that frontier tech including machine learning, blockchain, security and AI will be major focuses.

The new venture will be lead by some familiar faces. Scott Sorochak, a long-time mentor with the firm, recently joined from Blarney Ventures, and his team includes chief business officer Jaeson Ma, who co-founded SparkLabs portfolio startup 88Rising. Its list of advisors includes names like Sid Anand, PayPal’s chief data engineer, ex Procter & Gamble CTO Bruce Brown and smart oven startup Brava’s CEO Jon Pleasants.

Amazon’s formidable presence in the world of retail stems partly from the fact that it’s just not a commerce giant, it’s also a tech company — building solutions and platforms in house that make its processes, from figuring out what to sell, to how much to have on hand and how best to distribute it — more efficient and smarter than those of its competition. Now, one of the startups that is building retail technology to help those that are not Amazon compete better with it, has raised a significant round of funding to meet that challenge.

Relex — a company out of Finland that focuses on retail planning solutions by helping both brick-and-mortar as well as e-commerce companies make better forecasts of how products will sell using AI and machine learning, and in turn giving those retailers guidance on how and what should be stocked for purchasing — is today announcing that it has raised $200 million from TCV. The VC giant — which has backed iconic companies like Facebook, Airbnb, Netflix, Spotify and Splunk — last week announced a new $3 billion fund and this is the first investment out of it that is being made public.

Relex is not disclosing its valuation but from what I understand it’s a minority stake, which would put it at between $400 million and $500 million. The company has been around for a few years but has largely been very capital efficient, raising only between $20 million and $30 million before this from Summit Partners, with much of that sum still in the bank.

That lack of song and dance around VC funding also helped keep the company relatively under radar, even while it has quietly grown to work with customers like supermarkets Albertson’s in the US, Morrisons in the UK and a host of others. Business today is mostly in North America and Europe, with the US growing the fastest, CEO Mikko Kärkkäinen — who co-founded the company with Johanna Småros and Michael Falck — said in an interview.

While the company has already been growing at a steady clip — Kärkkäinen said sales have been expanding by 50 percent each year for a while now — the plan now will be to accelerate that.

Relex competes with management systems from SAP, JDA and Oracle, but Kärkkäinen said that these are largely “legacy” solutions, in that they do not take advantage of advances in areas like machine learning and cloud computing — both of which form the core of what Relex uses — to crunch more data more intelligently.

“Most retailers are not tech companies, and Relex is a clear leader among a lot of legacy players,” said TCV general partner John Doran, who led the deal.

Significantly, that’s an approach that the elephant in the room pioneered and has used to great effect becoming one of the biggest companies in the world.

“Amazon has driven quite a lot of change in the industry,” Kärkkäinen said (he’s very typically Finnish and understated). “But we like to see ourselves as an antidote to Amazon.”

Brick-and-mortar stores are an obvious target for a company like Relex, given that shelf space and real estate are costs that these kinds of retailers have to grapple with more than online sellers. But in fact Kärkkäinen said that e-commerce companies (given that’s also where Amazon primarily operates too) have been an equal target and customer base. “For these, we might be the only solution they have purchased that has not been developed in house.”

The funding will be used in two ways. First, to give the company’s sales a boost especially in the US, where business is growing the fastest at the moment. And second, to develop more services on its current platform.

For example, the focus up to now has been on demand forecasting, Kärkkäinen said, and how that effects prices and supply, but it would like to expand its coverage also to labor optimisation alongside that; in other words, how best to staff a business according to forecasts and demands.

Of course, while Amazon is the big competition for all retailers, they potentially also exist as a partner. The company regularly productizes its own in-house services, and it will be interesting to see how and if that translates to Amazon emerging as a competitor to Relex down the line.