Author: azeeadmin

16 Jan 2019

EVs and online marketplaces thrive despite slump in Chinese car sales

China’s massive auto market hit the brakes last year as trade tensions and a softening economy dampened consumer confidence, but one segment soared on account of increasing internet penetration — used car sales.

New passenger car sales fell to 23.7 million last year, representing a 4.1 year-over-year drop according to a new report by China’s Association of Automobile Manufacturers, the country’s top auto association. That marks the very first annual decline in the world’s biggest car market since the 1990s.

A few factors were at play. For one, the tit-for-tat U.S.-China trade war has led to a slew of tariffs on U.S. car imports and weighed on consumers. The standoff prompted Tesla to cut prices for Model 3 in China and Jaguar Land Rover to temporarily close a factory after sales plummeted in the country. Internally, China is coping with a cooling economy that has undermined consumer demand across a spectrum of sectors. Regulators have also rolled back a tax-cut scheme on smaller cars that began in 2017.

Despite the overall industry slowdown, electric and hybrid vehicles continued to enjoy a healthy growth rate at 61.7 percent to clock sales of 1.26 million new units. That comes as expected as China is aiming to cut carbon footprints and lead in the global alternative energy revolution by splurging on subsidies for both consumers and manufacturers. But stumbling blocks remain for the budding industry, such as a lack of charging stations. Beijing is also mulling subsidy cuts on EVs to temper overcapacity in the long term.

As consumers tighten their purse strings amid the economic downturn, cheaper secondhand cars become more appealing. China’s Automobile Dealers Association shows that secondhand car sales reached 12.6 million for the first 11 months of 2018, marking a 13 percent growth.

The sector is only half the size of new cars, but a string of e-commerce channels are fueling the industry in a country where in-person transactions were still the norm just a few years ago. For one thing, online marketplaces inject honesty to the car-buying process by claiming to provide more price transparency for customers. A major turning point came in 2017 when China lifted constraints on cross-provincial used car deals, which means customers in less developed regions — many of whom never owned a car before — now have access to a greater variety of models compared to what’s available in their hinterland homelands.

Some of the top players in the space include Didi Chuxing-backed Renrenche, Tencent-backed Guazi and Uxin, which floated on the Nasdaq last year and recently entered a strategic partnership with Alibaba. In 2017, e-commerce transactions accounted for 17.6 percent of overall car sales in the country, a study from Uxin’s research institute found.

“Over the past few years, consumers have become increasingly receptive to buying used cars as a cost-effective alternative to new vehicles. This is particularly the case for consumers in lower-tier cities,” said Kun Dai, founder and chief executive officer of Uxin . “With extremely limited used car selection in most cities, there is a rapidly growing demand for an online platform that expands access to used cars from across the country.”

16 Jan 2019

HyperScience, the machine learning startup tackling data entry, raises $30 million Series B

HyperScience, the machine learning company that turns human readable data into machine readable data, has today announced the close of a $30 million Series B funding round led by Stripes Group, with participation from existing investors FirstMark Capital and Felicis Ventures, as well as new investors Battery Ventures, Global Founders Fund, TD Ameritrade and QBE.

HyperScience launched out of stealth in 2016 with a suite of enterprise products focused on the healthcare, insurance, finance and government industries. The original products were HSForms (which handled data-entry by converting hand-written forms to digital), HSFreeForm (which did a similar function for hand-written emails or other non-form content) and HSEvaluate (which could parse through complex data on a form to help insurance companies approve or deny claims by pulling out all the relevant info).

Now, the company has combined all three of those products into a single product called HyperScience. The product is meant to help companies and organizations reduce their data-entry backlog and better serve their customers, saving money and resources.

The idea is that many of the forms we use in life or in the workplace are in an arbitrary format. My bank statements don’t look the same as your bank statements, and invoices from your company might look different than invoices from my company.

HyperScience is able to take those forms and pipe them into the system quickly and easily, without help from humans.

Instead of charging by seat, HyperScience charges by documents, as the mere use of HyperScience should mean that fewer humans are actually “using” the product.

The latest round brings HyperScience’s total funding to $50 million, and the company plans to use a good deal of that funding to grow the team.

“We have a product that works and a phenomenally good product market fit,” said CEO Peter Brodsky. “What will determine our success is our ability to build and scale the team.”

16 Jan 2019

Techstars will build and launch startups with new venture studio

Similar to Y Combinator, early-stage technology startup accelerator Techstars has spent much of the last decade supporting and seeding innovative projects, including Plated, ClassPass, SendGrid and PillPack. Now, it wants to take its service a step further.

Today, Techstars is announcing the launch of Techstars Studio, a new venture that will have the accelerator developing and launching venture-scale businesses with the support of several corporate partners. Leveraging its large network of entrepreneurs, Techstars has invited large companies to co-create startups targeting specific challenges within their industry. Techstars says it has signed on 25 corporate partners so far, each of which will pay an annual membership fee to access an early look at the Techstars Studio projects, as well as updates from the team, as concepts transition into prototypes then to full-fledged companies.

Techstars Studio plans to complete four full spin-outs per year and will identify talent from within its network to lead each venture. The companies will be seeded with a varying amount of capital depending on the business’s needs.

The news is the latest in a series of developments from within Techstars that illustrate the accelerator’s bid to marry corporations and the startup ecosystem. On top of the startup studio, Techstars announced in September a Network Engagement Program, which offers concierge-style connections for corporations looking to build relationships with startups and a 54-hour Innovation Bootcamp, which teaches corporate employees “to rapidly identify and validate solutions for critical business problems.”

“We think of ourselves as the worldwide network that helps entrepreneurs succeed — this will help entrepreneurs in our world be successful,” Techstars co-founder and co-chief executive officer David Cohen told TechCrunch. “We have the history and the talent to do it but this is new for us, so we have to build that muscle.”

Cohen will lead the studio along with portfolio co-founder Isaac Saldana, who will serve as chief technology officer. Saldana co-founded Techstars-backed SendGrid, an email platform acquired by Twilio for $2 billion in October. Mike Rowan, SendGrid’s former vice president, and Sabrina Kelly, Techstars VP of talent, have also joined the new effort.

A slew of Techstars-backed founders have also signed on to advise the projects, including the founders of Remitly, Sphero and DataRobot.

Founded in 2006, Techstars now operates 44 programs in 14 countries with more than 1,600 companies in its portfolio.

16 Jan 2019

DoorDash is officially live in all 50 states

Hot off the heels of a $250 million funding round and a lofty $4 billion valuation, DoorDash is launching in an additional six markets. As of today, the service is live in Anchorage, Alaska; Billings, Bozeman and Missoula, Montana; Sioux Falls, South Dakota; Fargo, North Dakota; Morgantown and Huntington, West Virginia; and Cheyenne, Wyoming, making it the first on-demand food delivery startup to operate in all 50 U.S. states.

“In the past year alone we’ve more than quintupled our geographic footprint from 600 to 3,300 cities across North America, democratizing access to door-to-door delivery for hundreds of millions of Americans across the nation,” DoorDash co-founder and chief executive officer Tony Xu said in a statement.

Founded in 2013, San Francisco-based DoorDash has raised nearly $1 billion in venture capital funding from SoftBank, Sequoia, Coatue Management, DST Global, Kleiner Perkins, Khosla Ventures, CRV and several others.

16 Jan 2019

Most Facebook users still in the dark about its creepy ad practices, Pew finds

A study by the Pew Research Center suggests most Facebook users are still in the dark about how the company tracks and profiles them for ad-targeting purposes.

Pew found three-quarters (74%) of Facebook users did not know the social networking behemoth maintains a list of their interests and traits to target them with ads, only discovering this when researchers directed them to view their Facebook ad preferences page.

A majority (51%) of Facebook users also told Pew they were uncomfortable with Facebook compiling the information.

While more than a quarter (27%) said the ad preference listing Facebook had generated did not very or at all accurately represent them.

The researchers also found that 88% of polled users had some material generated for them on the ad preferences page. Pew’s findings come from a survey of a nationally representative sample of 963 U.S. Facebook users ages 18 and older which was conducted between September 4 to October 1, 2018, using GfK’s KnowledgePanel.

In a senate hearing last year Facebook founder Mark Zuckerberg claimed users have “complete control” over both information they actively choose to upload to Facebook and data about them the company collects in order to target ads.

But the key question remains how Facebook users can be in complete control when most of them they don’t know what the company is doing. This is something U.S. policymakers should have front of mind as they work on drafting a comprehensive federal privacy law.

Pew’s findings suggest Facebook’s greatest ‘defence’ against users exercising what little control it affords them over information its algorithms links to their identity is a lack of awareness about how the Facebook adtech business functions.

After all the company markets the platform as a social communications service for staying in touch with people you know, not a mass surveillance people-profiling ad-delivery machine. So unless you’re deep in the weeds of the adtech industry there’s little chance for the average Facebook user to understand what Mark Zuckerberg has described as “all the nuances of how these services work”.

Having a creepy feeling that ads are stalking you around the Internet hardly counts.

At the same time, users being in the dark about the information dossiers Facebook maintains on them, is not a bug but a feature for the company’s business — which directly benefits by being able to minimize the proportion of people who opt out of having their interests categorized for ad targeting because they have no idea it’s happening. (And relevant ads are likely more clickable and thus more lucrative for Facebook.)

Hence Zuckerberg’s plea to policymakers last April for “a simple and practical set of — of ways that you explain what you are doing with data… that’s not overly restrictive on — on providing the services”.

(Or, to put it another way: If you must regulate privacy let us simplify explanations using cartoon-y abstraction that allows for continued obfuscation of exactly how, where and why data flows.)

From the user point of view, even if you know Facebook offers ad management settings it’s still not simple to locate and understand them, requiring navigating through several menus that are not prominently sited on the platform, and which are also complex, with multiple interactions possible. (Such as having to delete every inferred interest individually.) 

The average Facebook user is unlikely to look past the latest few posts in their newsfeed let alone go proactively hunting for a boring sounding ‘ad management’ setting and spending time figuring out what each click and toggle does (in some cases users are required to hover over a interest in order to view a cross that indicates they can in fact remove it, so there’s plenty of dark pattern design at work here too).

And all the while Facebook is putting a heavy sell on, in the self-serving ad ‘explanations’ it does offer, spinning the line that ad targeting is useful for users. What’s not spelt out is the huge privacy trade off it entails — aka Facebook’s pervasive background surveillance of users and non-users.

Nor does it offer a complete opt-out of being tracked and profiled; rather its partial ad settings let users “influence what ads you see”. 

But influencing is not the same as controlling, whatever Zuckerberg claimed in Congress. So, as it stands, there is no simple way for Facebook users to understand their ad options because the company only lets them twiddle a few knobs rather than shut down the entire surveillance system.

The company’s algorithmic people profiling also extends to labelling users as having particular political views, and/or having racial and ethnic/multicultural affinities.

Pew researchers asked about these two specific classifications too — and found that around half (51%) of polled users had been assigned a political affinity by Facebook; and around a fifth (21%) were badged as having a “multicultural affinity”.

Of those users who Facebook had put into a particular political bucket, a majority (73%) said the platform’s categorization of their politics was very or somewhat accurate; but more than a quarter (27%) said it was not very or not at all an accurate description of them.

“Put differently, 37% of Facebook users are both assigned a political affinity and say that affinity describes them well, while 14% are both assigned a category and say it does not represent them accurately,” it writes.

Use of people’s personal data for political purposes has triggered some major scandals for Facebook’s business in recent years. Such as the Cambridge Analytica data misuse scandal — when user data was shown to have been extracted from the platform en masse, and without proper consents, for campaign purposes.

In other instances Facebook ads have also been used to circumvent campaign spending rules in elections. Such as during the UK’s 2016 EU referendum vote when large numbers of ads were non-transparently targeted with the help of social media platforms.

And indeed to target masses of political disinformation to carry out election interference. Such as the Kremlin-backed propaganda campaign during the 2016 US presidential election.

Last year the UK data watchdog called for an ethical pause on use of social media data for political campaigning, such is the scale of its concern about data practices uncovered during a lengthy investigation.

Yet the fact that Facebook’s own platform natively badges users’ political affinities frequently gets overlooked in the discussion around this issue.

For all the outrage generated by revelations that Cambridge Analytica had tried to use Facebook data to apply political labels on people to target ads, such labels remain a core feature of the Facebook platform — allowing any advertiser, large or small, to pay Facebook to target people based on where its algorithms have determined they sit on the political spectrum, and do so without obtaining their explicit consent. (Yet under European data protection law political beliefs are deemed sensitive information, and Facebook is facing increasing scrutiny in the region over how it processes this type of data.)

Of those users who Pew found had been badged by Facebook as having a “multicultural affinity” — another algorithmically inferred sensitive data category — 60% told it they do in fact have a very or somewhat strong affinity for the group to which they are assigned; while more than a third (37%) said their affinity for that group is not particularly strong.

“Some 57% of those who are assigned to this category say they do in fact consider themselves to be a member of the racial or ethnic group to which Facebook assigned them,” Pew adds.

It found that 43% of those given an affinity designation are said by Facebook’s algorithm to have an interest in African American culture; with the same share (43%) is assigned an affinity with
Hispanic culture. While one-in-ten are assigned an affinity with Asian American culture.

(Facebook’s targeting tool for ads does not offer affinity classifications for any other cultures in the U.S., including Caucasian or white culture, Pew also notes, thereby underlining one inherent bias of its system.)

In recent years the ethnic affinity label that Facebook’s algorithm sticks to users has caused specific controversy after it was revealed to have been enabling the delivery of discriminatory ads.

As a result, in late 2016, Facebook said it would disable ad targeting using the ethnic affinity label for protected categories of housing, employment and credit-related ads. But a year later its ad review systems were found to be failing to block potentially discriminatory ads.

The act of Facebook sticking labels on people clearly creates plenty of risk — be that from election interference or discriminatory ads (or, indeed, both).

Risk that a majority of users don’t appear comfortable with once they realize it’s happening.

And therefore also future risk for Facebook’s business as more regulators turn their attention to crafting privacy laws that can effectively safeguard consumers from having their personal data exploited in ways they don’t like. (And which might disadvantage them or generate wider societal harms.)

Commenting about Facebook’s data practices, Michael Veale, a researcher in data rights and machine learning at University College London, told us: “Many of Facebook’s data processing practices appear to violate user expectations, and the way they interpret the law in Europe is indicative of their concern around this. If Facebook agreed with regulators that inferred political opinions or ‘ethnic affinities’ were just the same as collecting that information explicitly, they’d have to ask for separate, explicit consent to do so — and users would have to be able to say no to it.

“Similarly, Facebook argues it is ‘manifestly excessive’ for users to ask to see the extensive web and app tracking data they collect and hold next to your ID to generate these profiles — something I triggered a statutory investigation into with the Irish Data Protection Commissioner. You can’t help but suspect that it’s because they’re afraid of how creepy users would find seeing a glimpse of the the truth breadth of their invasive user and non-user data collection.”

In a second survey, conducted between May 29 and June 11, 2018 using Pew’s American Trends Panel and of a representative sample of all U.S. adults who use social media (including Facebook and other platforms like Twitter and Instagram), Pew researchers found social media users generally believe it would be relatively easy for social media platforms they use to determine key traits about them based on the data they have amassed about their behaviors.

“Majorities of social media users say it would be very or somewhat easy for these platforms to determine their race or ethnicity (84%), their hobbies and interests (79%), their political affiliation (71%) or their religious beliefs (65%),” Pew writes.

While less than a third (28%) believe it would be difficult for the platforms to figure out their political views, it adds.

So even while most people do not understand exactly what social media platforms are doing with information collected and inferred about them, once they’re asked to think about the issue most believe it would be easy for tech firms to join data dots around their social activity and make sensitive inferences about them.

Commenting generally on the research, Pew’s director of internet and technology research, Lee Rainie, said its aim was to try to bring some data to debates about consumer privacy, the role of micro-targeting of advertisements in commerce and political activity, and how algorithms are shaping news and information systems.

Update: Responding to Pew’s research in a statement, Facebook said:

We want people to see better ads — it’s a better outcome for people, businesses, and Facebook when people see ads that are more relevant to their actual interests. One way we do this is by giving people ways to manage the type of ads they see. Pew’s findings underscore the importance of transparency and control across the entire ad industry, and the need for more consumer education around the controls we place at people’s fingertips. This year we’re doing more to make our settings easier to use and hosting more in-person events on ads and privacy.

16 Jan 2019

The Motorola Razr could return as a $1,500 foldable smartphone

Motorola has revived the Razr name a few times over the years, but the once mighty brand has failed to regain the heights of its early days as an ultra-slim flip phone. But what better time for for the phone maker’s parent Lenovo to bring back the brand in earnest as the mobile world is readying itself for a wave of foldable smartphones?

Nostalgia’s a bit of a mixed bag in consumer electronics. Take the recent returns of Nokia (good), BlackBerry (okay) and Palm (yikes). Slapping a familiar brand on a new product is a fast track to prominence, but not necessarily success. What ultimately may hinder Razr’s rumored return, however, is price.

All of this stems from a new Wall Street Journal report noting Lenovo’s plan to revive the Razr as a foldable smartphone. The price point puts the handset north of even Apple and Samsung’s flagships, at $1,500. Of course, there isn’t really a standardized price point for the emerging foldables category yet.

The Royole FlexPai starts at around $1,300 — not cheap, especially for a product from a relative unknown. And Samsung, the next on the list to embrace the foldable, has never been afraid to hit a premium price point. Ultimately, $1,500 could well be standard for these sorts of products. Whether or not consumers are willing to pay that, however, is another question entirely.

The new Razr is apparently destined for Verizon this year. The carrier (which, as it happens, also owns TechCrunch) has had a longstanding relationship with Motorola. Success, however, is going to hinge on more than name recognition alone.

16 Jan 2019

Alexa gets a professional ‘newscaster’ voice for reading the day’s news

Amazon already gave Alexa the ability to whisper, and now it’s rolling out another way to change the assistant’s speaking style – it’s giving Alexa a “newscaster” voice. Starting today, when U.S. customers ask Alexa “what’s the latest?” to hear the day’s news, Alexa will respond using a voice that’s similar to how a professional newscaster delivers news.

The voice knows which words should be emphasized for a more realistic delivery of the news, explains Amazon.

To achieve this new voice, Amazon took advantage of recent developments it made with Neural TTS technology, or NTTS. This technology delivers a more natural sounding voice, and allows Alexa to adapt her speaking style based on the context of your request. For the newscaster voice, NTTS produced speech with better intonation that emphasizes the right words in a sentence, Amazon says.

In addition, Amazon scientists used an approach called direct waveform modeling that applies deep learning to produce the speech signal.

The company had detailed this technology in November, saying at the time its latest text-to-speech system could be trained to use the newscaster style after just a few hours of training data. The development could pave the way for Alexa and other services to adopt different speaking styles for other contexts in the future, the researchers noted.

“The ability to teach Alexa to adapt her speaking style based on the context of the customer’s request opens the possibility to deliver new and delightful experiences that were previously unthinkable,” said Andrew Breen, Sr. Manager with the TTS Research team at Amazon, in a statement. “We’re thrilled that our customers will get to listen to news and Wikipedia information from Alexa in this new way.”

Below is an audio sample of the previous technology, followed by one of the new newscaster voice:

The company also showed off how NTTS technology could allow Alexa to employ a neutral voice when reading Wikipedia information:

16 Jan 2019

Instamojo raises $7M to help SMEs and ‘micro-entrepreneurs’ in India sell online

In India, startups are quietly building the tools and platforms to enable a different kind of gig economy: one that allows ‘micro-entrepreneurs’ to tap growing access to the internet to sell goods and services online.

One such figure helping this burgeoning economy is Instamojo, a seven-year-old Bengaluru-based startup, has pulled in a $7 million Series B as it aims to grow its reach to over one million SMEs and micro-SMEs in India.

Founded in 2012 as a side-project, Instamojo offers independent merchants the means to operate a mobile-optimized storefront, collect payment and even take micro-loans. In an interview with TechCrunch, CEO and co-founder Sampad Swain said the company has some 650,000 merchants, and it is adding a further 1,200 daily. Most of them, he said, tend to earn less than $30,000 in annual sales; with around half sell physical products, such as e-commerce items, and the remainder using Instamojo to invoice for physical services or sell digital items such as courses.

The idea is to tap into those just testing the water of online commerce and give them the tools to ramp up their fledgling enterprise as India’s internet ‘population’ rises past 400 million people.

“A lot of micro-merchants in India are adopting [India’s payment service] UPI through [services like Paytm and PhonePe] but once they become a little more serious, at around 10-20 sales per month, we ask: ‘Can we give you lending, logistics, online store?'” explained Swain, who started the business with co-founders Akash Gehani and Harshad Sharma.

It’s a market that few banks or financial institutions care about because small loans and sales require enormous scale to be relevant to them. But Swain is bullish, and he believes the company will pass one million retailers this year.

The new funding is led by existing investor AnyPay — the Japanese fintech startup — with other returning backers Kalaari Capital, Beenext, and angel investor Rashmi Kwatra joining. Gunosy Capital, the VC arm of Japanese news app Gunosy, joined as a new investor. The deal takes Instamojo to around $9 million from investors to date.

Instamojo collects revenue through a two percent cut on sales, a fee on successful deliveries and commission on its micro-loan product, which essentially gives merchants advanced credit (same day or next-day) on their sales. The loans — which Swain describes as ‘sachet’ lending — are from Instamojo’s recently-established Mojo Capital unit which includes partnerships with 12 financial organizations. In just four months, Instamojo has dished out around $4 million in credit — through 50,000-odd dispersions — and Swain predicts it will scale to a $30 million run rate before the end of this year.

“Even I am surprised!” he said of the rapid uptake.

Instamojo founders [left to right] Akash Gehani, Sampad Swain and Harshad Sharma

Unlike Meesho, a YC-backed micro-entrepreneurship service in India that recently raised $50 million, Instamojo isn’t dominated by e-commerce to friends, family and neighbors. Swain said typical Instamojo sellers look to reach audiences outside of people they know, with platforms like YouTube, Facebook, WhatsApp and others commonly used to reach audiences. Instamojo’s big selling point is ease of sale; that’s through a unique link that sellers share with customers for the checkout therein bypasses some of the challenges of online payment in India, which include somewhat cumbersome steps for card transactions.

“Sellers just create a link and share it with the customer,” Swain explained. “Essentially they click and check out with debit or credit card or other means. Over the years we realized that’s the best beginning for our business.”

That was Instamojo’s first launch, and since then it has built out online store options to manage inventory and product as well as the recent credit launch. Beyond growing its scale, Swain said the next big focus is on developing a community for merchants, where they can share tips, collaborate and more. He is also aiming to increase the tech team and raise Instamojo’s headcount from 120 right now to around 250 by 2020.

For now, Swain said the company isn’t seeking overseas opportunities, although he did admit that the business could expand to regions like Africa or Southeast Asia. But more immediately, he sees a huge opportunity in India, where believes there are 65 million SMEs, of which 25 million are “micro-merchants,” to tackle initially. The company is planning a Series C round for later this year to finance a deeper push.

16 Jan 2019

YC-backed Upsolve is automating bankruptcy for everyone

The popular image of a Chapter 7 bankruptcy might be a large company like Enron failing, or maybe some lazy drifter trying to shirk their financial responsibilities. The reality is anything but those sorts of images. Today in America, the most common reason for bankruptcy is to discharge egregious sums of medical debt [1], which might have been incurred in a short stint in a hospital emergency room.

Bankruptcy allows people to get out from under a debilitating and permanent state of financial crisis — assuming one can afford it. Applying for bankruptcy itself costs money, potentially thousands of dollars depending on the attorney used. The cruel irony is that the people who can least afford to apply are those who are most locked out from the help they need.

Upsolve, one of the three non-profit tech startups in Y Combinator’s current winter batch, is building a unified and efficient software product to allow users easy access to the bankruptcy system. Users go through a series of questions to collect the required information about their financial circumstances, and then Upsolve provides automated bankruptcy forms reviewed by an Upsolve attorney — all for free.

“Our mission is to help the victims of our broken financial system,” Upsolve CEO and co-founder Rohan Pavuluri said to me. “If you are poor, you don’t have access to the same rights.” He describes Upsolve as “TurboTax for bankruptcy” (although to be clear, TurboTax is a for-profit business line of Intuit). Much like tax, bankruptcy is convoluted. “There are 23 forms to file for bankruptcy,” he said.

So far, the software platform seems to be finding traction. Since starting in summer of 2016, Upsolve has processed $16 million in bankruptcies on behalf of 400 people, and has diagnosed debt problems for 5,000 users, according to Pavuluri. We’re “automating a $40k check to these folks…. for three hours worth of time.”

Unlike legal processes like estate planning, which are burdened with handling 50 different state processes, bankruptcy is based on federal law, which means that Upsolve’s solution can work across the country. Today, it supports 47 states, and the startup’s first target markets are New York and Illinois.

Where Upsolve gets really interesting is on the financial side, both in how it approaches revenues from users and also how it funds its operations.

On the revenue side, Upsolve is free. Inspired by GoFundMe and other startups, Pavuluri and his team have created a model where users donate “what they think is fair” for the service. That has worked so far, as “on a unit basis we cover our costs from the tipping model,” he said.

Over time, he hopes to break even using just the tipping model, but today the organization relies on legal aid funds to partially fund its operations. The U.S. government and many state governments have funding set aside to finance civil legal aid, and the Legal Services Corporation is the largest funder to date of Upsolve.

I asked about whether incumbent lawyers are threatened by Upsolve. Pavuluri said that most lawyers don’t want to handle these cases in the first place, because they are not profitable and generally need to be handled pro bono. He said that for simple chapter 7 cases, you (almost certainly) don’t need a lawyer, and “we challenge legal exceptionalism in that sense.” He has spent the last two years criss-crossing the country meeting with bankruptcy groups, judges, bar associations and attorneys to undergird support for the startup’s work.

In addition to Y Combinator, Upsolve has been funded by Harvard University, the Robin Hood Foundation, Schmidt Futures (Eric Schmidt), Fast Forward, and Breyer Labs.

[1] There is a large academic debate on how many bankruptcies are triggered by medical debt. The percentage varies hugely between different studies (from say 4% to 62%), and it really depends on how you define someone’s lead cause of bankruptcy. Most filers with medical debt also have other forms of debt, so what specifically triggered a bankruptcy? Due to stigma, filers will often point to medical debt when other forms of debt may be larger.

TechCrunch is experimenting with new content forms. This is a rough draft of something new — provide your feedback directly to the author (Danny at danny@techcrunch.com) if you like or hate something here.

Share your feedback on your startup’s attorney

My colleague Eric Eldon and I are reaching out to startup founders and execs about their experiences with their attorneys. Our goal is to identify the leading lights of the industry and help spark discussions around best practices. If you have an attorney you thought did a fantastic job for your startup, let us know using this short Google Forms survey and also spread the word. We will share the results and more in the coming weeks.

Stray Thoughts (aka, what I am reading)

Short summaries and analysis of important news stories

Slack’s Financials are quite strong

Zoë Bernard and Alfred Lee at The Information have the scoop on Slack’s financials. Huge revenue growth of about 75% last year to $389 million. The challenge is that Slack’s valuation is still very heady given its revenues, and is currently valued at about an18x multiple according to the writers. That’s expensive, but perhaps still desirable by investors who are otherwise looking at a relatively bleak market of investment opportunities.

What’s next & obsessions

  • I am reading The Color of Law by Richard Rothstein. About half way through – and it’s quite thought-provoking (and depressing).
  • Arman is reading Never Lost Again by Bill Kilday, a history of mapping at Google and beyond.
  • Arman and I are interested in societal resilience startups that are targeting areas like water security, housing, infrastructure, climate change, disaster response, etc. Reach out if you have ideas or companies here.
16 Jan 2019

On-demand telehealth company Tyto Care adds Sanford Health, Itochu and Shenzhen Capital Group as strategic investors

Tyto Care, a telehealth company that enables physicians to conduct on-demand remote exams, announced today that it has added $9 million to its Series C, bringing the round’s total to $33.5 million. The new funding comes from strategic investors Sanford Health, Itochu, and Shenzhen Capital Group. First announced last year, the oversubscribed Series C was led by Ping An Global Voyager Fund, run by the Chinese financial conglomerate.

Itochu, Shenzhen Capital Group, and Sanford Health, the largest rural not-for-profit health care system in the United States, will serve as Tyto’s new strategic partners as it expands in Japan, China, and the U.S., its largest market. The New York-based company has now raised $54 million to date.

Tyto’s telehealth service combines a set of connected hardware that patients keep at home and video calls with doctors. Called TytoHome, the small handheld tools are used to examine the heart, lungs, throat, ears, skin, abdomen, heart rate, and body temperature of a patient, enabling doctors to assess their condition remotely and decide if they need further medical care. Tyto also integrates with third-party tools for blood pressure, blood oxygen saturation, and weight scales. Patient data can be aggregated into Tyto’s data platform, which the company says will eventually be used to help with diagnosis and health alerts.

Remote health exams are especially helpful for children, elderly people, patients with chronic conditions, and patients recovering from operations who need frequent monitoring. In an email, CEO and co-founder Dedi Gilad told TechCrunch that the company also targets rural areas that have limited access to healthcare facilities or are affected by the global shortage of physicians.

The U.S., Japan and China “are all turning to digital health technology to help solve a myriad of public health issues, including expensive healthcare and aging and dense populations,” Gilad said.

Founded in 2012, the company launched in the U.S. in 2017 after receiving clearance from the Food and Drug Administration, and in 2018 in Canada after it also received regulatory approval there. Because of different healthcare systems and regulations in each of its markets, the company expands in new markets like Japan and China through strategic partnerships with health systems, telehealth companies (including Ping An Good Doctor in China, which has 170 million users), large private practices, and self-insured employers. So far it has struck partnerships with 50 health organizations.

Tyto’s new funding will be used to find new partners in the U.S. and expand into new markets in Europe and Asia. It also plans to add new modular exam tools for home diagnostics and remote monitoring.

In statement, Shenzhen Capital Group chairman Zewang Ni said “Tyto Care’s mission of making high-quality healthcare accessible from the comfort of home is crucial, especially in China. We believe that telehealth will significantly improve the lives of Chinese consumers, whether they are parents with sick children at home, elderly patients facing chronic illnesses, or citizens living in remote areas with less access to medical care.”