Virgin Galactic is set to launch its first passengers to space tomorrow morning, and you can watch the whole thing right here. The launch is scheduled for 6 AM Pacific, with streaming festivities (including commentary by Stephen Colbert) starting on the hour.
This launch is the 22nd for VSS Unity, Virgin Galactic’s first spacecraft to leave the atmosphere. As before, Unity will leave the Spaceport attached to the belly of VMS Eve, which will take it up out of the thickest part of the atmosphere.
Unity will drop off and ignite its rocket engine, reaching speeds approaching Mach 3 until it reaches the 80 kilometer mark, the lowest altitude considered to be in space. When the engines shut off, the pilots and passengers will enjoy a short period of weightlessness and of course stunning views.
The whole thing will be livestreamed, from the ground and, connectivity permitting, from the craft itself. When they return safely there will be a triumphant press conference and, remarkably, live music from Khalid.
I’ll be there on the ground, but you can see what I see by tuning in to the official stream below:
Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.
The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.
Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.
This Week in Apps offers a way to keep up with this fast-moving industry in one place with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and suggestions about new apps and games to try, too.
Android ad prices jump in wake of privacy updates on iOS
The Wall St. Journal reported this week how Apple’s privacy changes are changing the world of mobile advertising — in this case, ad pricing across platforms. The news outlet has been covering the broader impact of Apple’s decision to let users block apps from tracking them, noting how ad sales, including Facebook’s ad business, would be affected. (And how Apple’s own ad business would gain.)
This week, The WSJ says most users are declining tracking on iOS (less than 33% opt in), and as a result, mobile ad prices on iOS have fallen. The outlet cites data from ad measurement firm Tenjin which notes that spending on iOS mobile ads has dropped around one-third between June 1 and July 1. Around the same time, Android spending rose 10% — an indication that, for the time being, some portion of the ad market has just shifted platforms. Facebook ad spend also shifted to Android, with year-over-year growth of 46% for Android users in May to 64% in June.
The news follows a story this week from The FT, which noted that Chinese tech giants’ plan to route around the IDFA changes with CAID (the Chinese Advertising ID), had failed. Apple blocked updates to apps using CAID, which led to it losing support and the project’s failure.
For most app users, the ability to block tracking is a welcome change, as far too much user data had been shared behind-the-scenes without users’ informed consent. But the full impacts of how the update will impact app monetization long-term — and ultimately which companies then choose to build on iOS — still remain to be seen.
37 AGs target Google Play in an antitrust lawsuit
A group of 37 attorneys general filed a second major antitrust lawsuit against Google, accusing the company of using its market power to stifle competition. The suit takes aim at Google’s Play Store, which requires users to pay for apps and in-app purchases using Google’s own payments system — which gives Google a percentage of the revenue. In addition, the suit alleges that Google makes misleading security claims about the need for a walled garden app store like Google Play, in order to maintain its dominant position.
Google responded by calling the lawsuit “meritless” and noting that it ignores the openness of the Android platform, which permits other app stores and sideloading.
First Look: Pok Pok’s award-winning kids’ app Pok Pok Playroom shows off its sound design
Image Credits: Pok Pok
Recently launched Pok Pok Playroom from Pok Pok, a spinout from app maker Snowman (Alto’s Adventure, Alto’s Odyssey, Skate City), just took home an Apple Design Award in the “Delight and Fun” category for its app launched just months ago. Unlike other kids’ apps, Pok Pok promises an app that’s more of a digital “toy” that encourages real and imaginative play, not a mobile kids game. Now the company is sharing some of the techniques that helped it build this award-winning experience.
The company says it wanted to make sure there were no annoying sounds or repetitive music in the app that would bother parents or get stuck in kids’ heads. So it worked with its sound designer, Matt Miller, to ensure all the sounds in Pok Pok Playroom were sensory accessible and not overstimulating.
Miller often uses what he calls “found sounds” — that is, sounds he created by finding things to record — like a soup can, a vintage toy sourced from a local thrift shop, birds chirping, a spoon knocking on a pinecone and more. These give Pok Pok Playroom a more natural feel than other toys, which can sometimes feature loud or electronic-sounding noises that are overstimulating for kids and disruptive to those around them.
Weekly News
Platforms
A new Comscore study offers a look at how much people use their preinstalled apps from Apple and Google. Not surprisingly, these built-in utilities and services — like email, notes, messaging, maps, photos, clocks and more — dominate people’s app usage. 75% of the top 20 most-used apps on iPhone were made by Apple, and 60% of the top Android apps were made by Google, but here’s the funny thing: The study was paid for by Facebook, a company that’s looking for any angle to make it seem like it’s not a monopoly. So of course it had to find the only other bigger apps it could — the ones that ship with your smartphone.
Image Credits: comscore
OnePlus confirmed it’s throttling a number of popular apps on the OnePlus 9 and OnePlus 9 Pro in order to improve battery life. Apps such as Chrome, Twitter, Zoom, WhatsApp, Facebook, Instagram, Snapchat, YouTube, Discord, Microsoft’s Office apps, Firefox and Samsung Internet, were affected. The issue was discovered due to inconsistent benchmarks in testing.
Fintech
PayPal was the most downloaded P2P payments app globally during the first half of 2021, according to Apptopia. Rounding out the top 10 were Google Play, Alipay, PhonePe, Cash App, Paytm, Venmo, Zelle, Western Union and Remitly.
Personal finance app Charlie launched a redesign and a new feature called Direct Pay, which allows users to add their credit cards to the app to make extra payments toward their debt at their own pace. Or they can let the app recommend when it’s best to make payments toward their credit card debt. The company notes its users are now saving $66 monthly, which has added up to $30K+ of interest saved over the lifetime of their loans.
TikTok is piloting a new program that will allow U.S. users to apply for jobs using a TikTok video as a resume. Video applicants are asked to showcase their skillsets and experiences on video, then add #TikTokResumes to their caption. Pilot testers include a number of employers — like Chipotle, Target, WWE, Alo Yoga, Shopify, Contra, Movers + Shakers and others. The question is, will TikTokers feature these videos on the same account where they’ve posted personal content, dances and trends, or will this give way to a rise in Rinsta and Finsta-like TikTok accounts, where personal and more public content remains separated?
TikTok is also testing its own version of Cameo. The company was spotted testing a new feature that allows fans to pay for a shout-out video from their favorite creators directly in the app. According to screenshots of the feature, fans can request birthday wishes, pep talks and other messages, then pay using TikTok’s in-app currency.
TikTok launches Shoutouts – fans can request birthday wishes, pep talks and other messages from their favourite creators.
Fans can directly pay in-app, through TikTok’s in-apps currency (also used for live-stream gifting). pic.twitter.com/i5zQJKNfP5
— Fabian (Bern) Ouwehand 法比安 (@iamfabianbern) July 4, 2021
Twitter shared a few more ideas it’s thinking about in terms of new features around conversation health and privacy. This includes a one-stop “privacy check-in” feature that would introduce Twitter’s newer conversation controls options to users, and others that would allow people to be more private on the service, or to more easily navigate between public and private tweets or their various accounts.
TikTok on Tuesday experienced a widespread technical outage that lasted for over five hours before services were restored. U.S. users found that many videos were not loading during this time.
TikTok parent company ByteDance launched a new business arm called BytePlus, which will license the company’s various technologies to other businesses. This includes its AR effects, computer vision and machine translation tools, analytics and testing tools, and its recommendation engine that supports over 1.5 billion users. The company’s tools are being used by GOAT, Wego, Chilibeli, GamesApp, Webuy, Lark, and others, in addition to TikTok.
Trump has now sued Facebook, Twitter and Google for being “censored.” The companies enforced their terms of service in taking down Trump’s account across top social media platforms in the wake of the Jan. 6 attack on the Capitol. Trump’s lawsuit claims his First Amendment rights are being violated. The First Amendment applies to government censorship, not actions taken by businesses, however. Trump likely knows this but wanted to stir up some headlines.
Photos
Image Credits: Picsart
Popular photo-editing app PicsArt launched a brand refresh that includes a new name (Picsart), new logo, and a fresh new look across web and mobile, and more creator-friendly design flows. The app today has over 150 million monthly active users worldwide.
Everyone has thoughts on Instagram Head Adam Mosseri’s latest comments where he declared Instagram is “no longer” a photo-sharing app. His post was meant to alert users to upcoming tests that will see Instagram doing more experiments around how to better feature video in the app, but some are taking it as a sign that Instagram is more fully pivoting to a video-first experience.
Streaming & Entertainment
Reese Witherspoon’s media company, Hello Sunshine, is looking for an acquirer. The company has reportedly been in talks with multiple suitors, including Apple, The WSJ said. While the larger part of Hello Sunshine is it TV and movie film business, the company also operates the book club app, Reese’s Book Club, which serves as a place where many of the movie/TV deals are initially sourced.
More Spotify Premium users are reporting having gained access to the new feature, announced in May, that will allow them to download music to their Apple Watch so they can listen offline. The feature had been graduating rolling out, but appears to now be reaching a global audience.
Gaming
Image Credits: Sensor Tower
Pokémon Go revenue from player spending has topped $5 billion as the game celebrates its five-year anniversary. According to Sensor Tower, the AR game now generates $1 billion on average per year, putting it at the op of the Geolocation AR category globally, ahead of others like Dragon Quest Walk and Square Enix.
The Alto’s Adventure series from Snowman is getting a new installment in the form of an upcoming Apple Arcade release called Alto’s Odyssey: The Lost City. The game is like a special edition of Alto’s Odyssey (the sequel to Alto’s Adventure), as it include extra features and content that’s deeply integrated, not just tacked on, including a new location called the Lost City. The game arrives on Apple Arcade on July 16th.
Health & Fitness
Amazon launched a new, employee-only app called Amazon WorkingWell for its health and wellness program that includes Associate-facing support, education and safety-prevention information across text content, videos, podcasts, and more.
Vaccine passport apps have hit 10 million global downloads, according to data from Apptopia. The firm analyzed the downloads for top apps including NHS, VeriFLY, NYS Excelsior, and CommonPass.
Image Credits: Apptopia
Government & Policy
Chinese ride-hailing giant Didi was pulled from several apps stores in China, including Apple’s App Store. According to Chinese regulators, the app was illegally collecting users’ personal info. Didi said it was making “corrections” and is halting new user sign-ups, but the app for existing users remained operational. China’s cybersecurity watchdog also suggested the company delay its IPO, and the app was removed from China’s WeChat and Alipay apps for new users.
Security & Privacy
9 Android apps with 5.8 million combined downloads were caught stealing users’ Facebook passwords. A security firm found apps offering photo editing, exercise, horoscopes and utilities that were tricking users into entering their Facebook credentials with the promise of removing ads from the app after signing into Facebook. Google has banned all the apps and their developers from the Play Store.
10 opioid addiction treatment apps were found sharing sensitive data with third parties, including a unique identifier on Android, unique device identifiers, phone numbers, and lists of installed apps. The apps have 180K combined downloads.
Google released its July 2021 security update for Pixel which patches a few “high”-priority (but not critical) vulnerabilities. The update is rolling out to a range of Pixel devices.
Funding and M&A (and a SPAC)
Publishing platform Hiber raised $15 million for its web platform that allows people to create user-generated games, similar to Roblox. The company also offers a creation app for Android devices and allows players to use Safari to create games on iOS.
Juni, a neobanking app for e-commerce and online marketing companies, raised $21.5 million in Series A funding. The round was co-led by DST Global and Felix Capital. The banking app has signed up 3,000 businesses on its waitlists, of which 200 have now joined.
Neighborhood social networking app Nextdoor said it’s going public via a SPAC. The company plans to merge with Khosla Ventures Acquisition Co. II, taking itself public at the same time. The transaction will value the business at approximately $4.3 billion, up from its 2019 valuation of $2.17 billion. The app has 27 million weekly active users across the U.S.
Pleo, a startup offering smart company cards for SMBs that automate expense reports, raised $150 million at a $1.7 billion valuation for its service that works across web and mobile.
Popshop Live raised $20 million in Series A funding at a $100 million valuation for its livestream shopping service, available on web and mobile. The round was led by Benchmark, and comes after 500% growth of the number of sellers on the platform in the last 3 months.
Live video shopping startup Talkshoplive raised $6 million in a seed extension round led by Raine Ventures. The company publishes an app that sellers can use with its live stream shopping platform.
Indian social commerce startup DealShare, which began as an e-commerce platform on WhatsApp, raised $144 million in Series D funding led by Tiger Global. The round values the company at $455 million post-money and will be used to help fund international expansion.
Indian edtech Teachmint raised $20 million in a “pre-Series B” round led by Learn Capital for its mobile-first, video-first tech platform.
European neobank Bunq, which offers a bank account you control from a mobile app, raised $228 million in Series A funding that values the business at $1.9 billion. The round was led by Pollen Street Capital and is the largest round for a European fintech.
Downloads
Rec Room (Android launch)
Image Credits: Rec Room
Social gaming platform Rec Room, which recently became the first VR unicorn, has launched on the Google Play Store. The platform originally targeted only the VR market but expanded to other platforms as VR headset sales remained slow. Similar to Roblox and others, Rec Room allows players to dress up their avatars and play games built by other creators. To date, the app had been available on iOS, PlayStation 4 and 5; Xbox Series X and Xbox One, PC (via Steam), Oculus Quests and other VR headsets. It’s now live on Android to serve the larger global market.
OnMail (Android launch)
Image Credits: OnMail
Email service OnMail, which has previously been available on iOS, launched its app on the Google Play Store. The app aims to solve users’ biggest problems with email, including those with unwanted mail, email trackers, and more. As on iOS, OnMail lets you accept or reject senders before they hit your mailbox, blocks spy pixels, nudges you to follow up on emails, automatically organizes mail into smart folders (shopping, travel, packages, events), offers easy unsubscribe, monitors for refunds, checks grammar, makes it easier to send large attachments, and a lot more.
SwoonMe
Image Credits: SwoonMe
A new startup called SwoonMe aims to fix the problem with superficial dating apps, where users primarily make decisions based on how someone looks in their photos. Instead, on SwoonMe, you take a selfie which the app converts into an avatar. This is what others will see when they come to your profile. You then record a voice clip to tell others about yourself and what you’re looking for in a partner. The result is that when people scroll through SwoonMe, they’re not making snap decisions based on what they’re seeing, but are rather making more thoughtful decisions based what they hear. When two people match, the app encourages them to continue to get to know each other using voice messages and soon, icebreaker games — not texting and photo-sharing. As they communicate, their avatar will slowly unveil their real photo.
Slide
Image Credits: Raise.com
A new app from gift card marketplace Raise.com, Slide, offers users 4% cash back on their purchases online and at over 150 popular stores, including Lowe’s, Petco, ULTA, Office Depot, Bed Bath & Beyond, Chipotle, Panera Bread, Chili’s, DoorDash, Domino’s, Aeropostale, Express, H&M, Foot Locker, Loft, REI, GameStop, AMC, Groupon, Southwest Airlines, Uber, AutoZone, and others. To use Slide and get 4% back, users open the app at checkout, choose their store, and enter their exact purchase amount. They’ll then show the barcode to the cashier, or if paying online, enter the code. The cash back can be transferred to Venmo or PayPal or saved for a future purchase.
Users should be aware the additional cash comes at a price: the data Slide collects from users will allow companies to retarget them with ads and offers across devices, according to the app’s Privacy Policy. The app is free on iOS and Android.
After months of beta testing, Y Combinator has launched a co-founder matching platform. The platform invites entrepreneurs to create profiles, which include information about themselves and preferences for a co-founder, such as location and skill sets. It digests that information and offers a number of potential candidates that fit those needs — kind of like Tinder for co-founders. To date, the accelerator says it has made 9,000 matches across 4,500 founders.
Y Combinator is obviously well positioned to execute this tool. The accelerator offers the popular Startup School, a free online program with resources and lectures surrounding how to start a company, to anyone who wants to start a company. The school has cultivated a community of 230,000 founders in 190 countries. A matching tool is thus an easy jump to make, one that could help the partners there move even earlier in aggregating and eavesdropping on nascent talent. Notably, two companies who met through the matching platform are part of the YC Summer 2021 batch. Yay ecosystems!
Here’s my hot take, though: The tool may appear as a neat, in-demand and simplistic tool that connects people to each other, but this is far harder to execute in a meaningful way than one may think — even if you’re an accelerator as famed and well known as YC. What follows is a list of suggestions, or rather wishes, for the tool, put together after I spoke to January Ventures co-founder Jennifer Neundorfer for her thoughts as well.
Co-founder matching tools are best for founders who don’t have built-in networks and need ways to find collaborators in their earliest days. Startup School is indeed a wide net, but because Y Combinator struggles with diversity and representation of minorities in its batches, it will need to find ways to make sure that doesn’t get compounded when matching founders with each other. Can there be a filter for gender or ethnic background? Should there be? It’s a slippery slope.
YC told me here that “we don’t ask for demographic information from Startup School participants with the exception of a recent open text box for gender; and a large percentage have yet to fill this out. Right now, we’re using this info within co-founder matching — if you’re a woman, we let you mark that you’re seeking a woman co-founder and we increase the chances the co-founder candidates you see are women.”
Adverse selection is a real thing. Neundorfer told me that in the past, co-founder matching tools only attracted founders without networks, which didn’t do much good once they combined their backgrounds and still couldn’t get meetings with VCs. How does a co-founder matching tool find its Goldilocks situation — attracting the star PM at a hot startup thinking about entrepreneurship and the ambitious post-graduate with a love for code but absolutely no connections to people in the Valley.
It’s never as easy as swiping right. Can YC figure out a way to help co-founders within the matching service learn easy ways to vet compatibility? A riff on 36 questions that lead to love, as popularized by the NY Times, but with your co-founder would be perfect.
In a blog post announcing the tool, YC addressed this last point. “You probably shouldn’t marry someone after just one date, and similarly, it’ll take more than one video call to decide whether to co-found a company with someone,” it reads. “We encourage matched co-founders to meet and, when appropriate, work together on a time-boxed trial project with clear expectations and goals in order to vet co-founder compatibility.”
All in all, I’m rooting for this because, well, who wouldn’t? As Neundorfer puts it, “founder matching tools are an interesting way to expand the supply of founders and diversify the base of founders.” It just matters that the tools are built with diversity and accessibility in mind.
In the rest of this newsletter, we’ll get into a rare executive shuffle at a pre-IPO company, an EC-1 that digs into the modern web delivery tech stack and Didi. You can find me at Twitter @nmasc_ and DM me for my Signal for tips (no pitches, please).
The Instacart shuffle
Image Credits: Instacart
Instacart has hired Facebook executive Fidji Simo as its new CEO ahead of an expected IPO. The grocery delivery company, last valued at $39 billion, will transition current CEO and founder Apoorva Mehta to executive chairman.
Here’s what to know: A major executive shuffle ahead of a public debut is as rare as it is questionable. Instacart’s Mehta is leaving his original role before taking the company he founded nearly 10 years ago public. But, per The Information, Simo’s new job is yet another example of Instacart’s long-going “talent raid” of Facebook. The publication estimates that in 2021, Instacart has hired at least 55 engineers, product managers, recruiters, designers and data scientists from Facebook. Of course, Simo’s new job means that Facebook has lost one of its highest-ranking female executives, which is not a good look for a company that already struggles with diversity.
Say that subhead five times fast. The latest EC-1, our deep dive into a company from origin to execution to challenges ahead, is all about NS1, which launched with a plan to disrupt the core of the modern web delivery tech stack.
Here’s what to know: It’s a key read even for those of us who aren’t the biggest nerds on IT and enterprise infrastructure. Why? Because the story talks about how a startup competes in a matured space full of well-funded Big Tech companies and VC-backed heavyweights — and why the need for a reengineering of internet traffic isn’t a niche one.
Here’s what to know: The most interesting part of the episode was the conversation around Didi, and its impact on Chinese companies listing in the United States. Regulatory problems have a way of lessening investor interest, and Didi isn’t the only example that we’ve had to point to in recent weeks.
Other things in the show via Alex’s notes:
What’s going on with facial recognition tech? With AnyVision raising a $235 million round, Danny and Alex tangled over the future of privacy, and what counts as good enough when it comes to keeping ourselves to ourselves.
Nextdoor is going public: Via a SPAC, mind, but the transaction had our tongues wagging about its history, growth and how hard it can be to build a social network.
Dataminr buys WatchKeeper: In its first acquisition, Dataminr bought a smaller company to help it better visualize the data it collects. It’s a neat deal, and especially fun given that Dataminr should go public sooner rather than later.
Make sure to use code “STARTUPSWEEKLY” for a discount on ExtraCrunch, our premium subscription business where most of our deep analysis lives. The investment will break open access to some of the most interesting tidbits on the site, and support our team!
Big shout out to all the amazing founders and builders who attended TC Early Stage this past week. For those who didn’t attend, recap posts are coming in the next weeks, so keep your eyes out for them.
Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by what the weekday Exchange column digs into, but free, and made for your weekend reading. Want it in your inbox every Saturday? Sign up here.
It’s the end of a short week, but instead of not having much to chat about we have a lot. But it’s all very good fun, so let’s enjoy ourselves!
First, let’s talk about expensive four-legged beasts.
Trillion-dollar horse?
The Exchange started digging into the Q2 2021 venture capital market this week. Thanks to Anna’s help our first piece came out pretty well, I think. We have a lot more coming soon. But the unicorn stats really grabbed me by the nape. Consider:
136 unicorns were minted in Q2 2021, an all-time record.
As CB Insights notes, that’s “nearly 6x the 23 unicorns born a year ago in Q2’20, and already higher than the 128 unicorns born in all of 2020.”
The result of this boom in the horned equestrian population is that there are now 750 unicorns in the world. When former TechCruncher and excellent human Katie Roof tweeted that stat, my first thought was shit, that means unicorns are worth more than $1 trillion.
I was way off. The real number is nearly $2.4 trillion (CB Insights data). Which is a shatteringly high figure. In comparative terms, the un-exited unicorn population of the world is worth nearly precisely what Apple is worth today — $2.42 trillion, per Yahoo Finance.
Perhaps I am overreacting to the amount of unicorn equity that is currently sitting, largely frozen, in the private markets. Especially when unicorn exits are up. But are even today’s elevated exit levels enough to clear this particular ledger over time? No, I don’t think so. Not when we are minting 1.5 unicorns per day in Q2, counting weekends and the like and the unicorn count is ever-increasing.
Funding rounds
I only wrote about one funding round this week — this r2c round that was pretty interesting — mostly because I had a bunch of other things to chew through. But I’ve also seen my inbound venture capital round pitches slow since declaring that I’d not cover rounds that didn’t include more detailed financial information.
It is not clear yet if pitch volume is down due to the holiday week, or if I have scared everyone off. But I do use my inbound volume of funding round pitches both in aggregate, and in sector–directional terms to help gauge what’s going on. So, here’s hoping that (1) people will send me stuff and (2) they will do so and also share a lot more information at the same time.
SPACs in space
Y Combinator is a neat entity. One of its recent companies was Albedo, a startup that is hoping to build a network of low-orbit satellites that will take super high-res photos of the planet. To do so is hard af, as Natasha would say, but perhaps possible thanks to off-the-shelf (kinda) satellite parts, in-orbit refueling and a bunch of other new stuff.
Albedo and its ilk are why I still trot out every year to watch Demo Day. I get to see what could be coming, and that’s very good, illustrative fun.
All that’s to say that when two satellite imaging companies announced that they were going public via SPACs this week I was intrigued. Turns out they are not really in competition with what Albedo wants to do, as they offer lower-resolution images. But they are … notable for other reasons.
And Planet for the following, namely a look into how the economics of satellite tech are pretty heavily weighted toward the future:
Image Credits: Planet
The company’s long-term gross margin target is 80% to 85% (COGS of 15%-20%, per the deck), but you can see how long it takes to get there. This poses an interesting issue for the venture capital world.
Namely that companies like Albedo are going to need a lot of time and money to build out their constellations and get to scale. And, I presume, to scale to the sort of gross margins that software companies can generate from their first day selling product.
This is one reason why there is so much money chasing software products with even a hint of durable growth; high-margin recurring revenue is the business equivalent of a cheat code when it comes to value creation. Thus every investor wants to shovel money into it. Satellite tech, while super fucking critical in general, simply is more expensive and slower-burn.
My question: Is software so good at generating venture capital returns that other forms of startup work will struggle to compete for attention and capital? Are they already?
Future
Finally, Future. Or more precisely, Future’s future. I am curious about the a16z publication.
Since it launched I’ve checked in a few times each week, hoping to see what was coming out of the venture capital firm’s collective mind. I do so not only because I am a huge dweeb — I am! — but also because after all the hand-wringing that I’ve had to read about how the media hates tech — nope! — I was curious what a cosmically well-funded venture group would build. It has hired some great people, after all.
It appears that we are in between publishing cycles at the Future blog. The last pieces of Main Content came out nearly a month ago, and its most recent entry is dated June 25th. And that piece is just a note promising more content in July.
It all feels a bit flat? Given the budget, promise, fancy domain and number of people in the a16z world who should have things to say? Why not make more words appear? Let’s see what July brings.
Ok that’s enough from me for the week. Hugs, and talk to you Monday morning on the pod.
Digital technologies have disrupted the structure of markets with unprecedented breadth and scale. Today, there is yet another wave of innovation emerging, and that is the decarbonization of the global economy.
While governments still lack the conviction necessary to truly fight the climate crisis, the overall direction is clear. The carbon price in Europe rose from below $10 to over $50 per ton. Shell was handed a resounding defeat by a Dutch court. The major blackout in Texas at the beginning of the year revealed the fragility of the existing energy supply even in a highly industrialized country. We must urgently invest more into developing and deploying reliable, clean electricity generation technologies to make decarbonization a reality.
Forward-thinking investors understand this. Global investment in low-carbon technologies climbed to $500 billion in 2020, according to Bloomberg. Renewable energy accounted for around $300 billion of that, followed by electrification of transport ($140 billion) and heating ($50 billion).
Fusion, the process that powers the stars, could be the cleanest energy source for humanity.
That’s why we need to continue backing new technologies with breakthrough potential. Of particular promise is nuclear fusion. Fusion, the process that powers the stars, could be the cleanest energy source for humanity. We are already indirectly harvesting the power of fusion through solar energy. Being able to build fusion reactors would give us an “always on” version, independent of weather conditions.
But why fund fusion at all, given that we don’t yet know how to do it? First, this isn’t an either-or proposition. We can afford to build out renewable energy and investigate new forms of energy production at the same time because the latter — at least at this early stage of development — will require a comparatively trivial amount of money. The U.S. government’s latest plan is to spend $174 billion over 10 years on the electrification of car transport alone, so to invest $2 billion to create a fusion power plant seems doable.
Second, we are about to need a lot more electricity than we ever have. The global demand for carbon-free energy sources is set to triple by 2050, driven by increasing urbanization, the electrification of industrial processes, the loss of biodiversity and the increase in energy consumption in emerging markets.
Third, there’s been tremendous progress in the necessary supporting technologies. Superconducting magnets for the magnetic-confinement approach to fusion have become much cheaper, lasers for inertial confinement fusion have become much more powerful, and breakthroughs in material science have made nanostructured targets available, which enable the use of completely new approaches to fusion, such as the low-neutronic fuel pB11.
Thankfully, there is a growing number of entrepreneurial efforts from world-class teams to try and build fusion. At least 25 startups around the world are targeting fusion right now, approaching the problem with a wide range of technologies. The amount invested in private fusion companies across the world increased tenfold to almost $1 billion in 2020, according to Crunchbase.
The upside of successful fusion is nearly unlimited. The clean energy generation market represents a trillion-dollar opportunity. An estimated 26 TW of primary energy capacity needs to be built globally from 2030 to 2050 to serve the rising global energy needs, according to Materials Research Society. Just 1 TW of capacity will generate $300 billion in revenue, and a 15% market share from 2030 to 2050 would yield more than $1 trillion in annual revenue.
We need many shots on goal here, which is why Susan Danziger and I have personally invested in three different fusion startups already (Zap Energy and Avalanche in the United States and Marvel Fusion in Germany).
But it is not primarily the potential for financial upside that motivates us: There is an opportunity to make an indelible difference in the trajectory of human history. If even a small fraction of the large wealth accumulated by entrepreneurs and investors in the last couple of decades is invested here, the likelihood of successful fusion rises dramatically. That, in turn, will unlock much more investment from both venture funds and governments.
Now is the time to go all-in on decarbonization. Funding fusion with its breakthrough potential must be part of that effort.
Last year, during the pandemic, a free browser extension called Netflix Party gained traction because it enabled people to play the same Netflix TV shows and movies as far-flung friends and family. It also enabled them to dish about the action in a side bar chat.
Yet that company — later renamed Teleparty — was just the beginning. So argue two companies that have raised seed funding, one of which just closed its round this week led by Craft Ventures, and the other a four-year-old startup that has raised $3 million in seed funding, including from 500 Startups, and having developed quite a bit of its tech already, is talking with investors anew.
Both suggest that while investors have been throwing money at virtual events and edtech companies, there is an even bigger opportunity in a kind of multiplayer browsing experience that enables people to do much more together online while apart, from watching sporting events and movie watching and to reviewing X-rays with one’s doctor. In fact, both say that for younger users who’ve largely grown up socializing online, more web surfing together is inevitable.
The companies are taking somewhat different approaches. The startup on which Craft just made a bet, leading its $2.2 million seed round, is Giggl, a year-old, London-based startup that invites users of its web app to tap into virtual Chrome sessions, which it calls “portals,” to which they can invite friends to browse content together, as well as text chat and call in. The portals can be private rooms or public so that anyone can join.
The company was founded by four teenagers who grew up together, led by 19-year-old CEO Tony Zog, and the startup is fairly nascent. Indeed, it only recently graduated from the LAUNCH accelerator program. Now it plans to use its new funding to build its own custom server infrastructure to minimize downtime and reduce its costs.
It’s somewhat of a field-of-dreams strategy, with just 60,000 people signed up currently on Giggle, one third of them monthly active users, Zog tells us. But the idea is to build a stickier product that works in all kinds of scenarios and is available in both free and paid versions. For example, people can right now chat while surfing social media with friends, or while watching events together like Apple Worldwide Developers Conference. Eventually, however, Giggl plans to charge consumers for more premium features, as well as sell enterprise subscriptions to outfits that are looking for more ways to collaborate. (You can check out a demo of Giggl’s current service below.)
The other “multiplayer” startup — the one backed by 500 Startups, along with numerous angel investors — is Hearo.live, which is the brainchild of Ned Lerner, who previously spent 13 years as a director of engineering with Sony Worldwide Studios and a short time before that as the CTO of an Electronic Arts division.
Hearo has a more narrow strategy in that the company is “all about watching,” says Lerner. “We’re kind of a special case in that you can’t browse absolutely anything” as with Giggle. Instead, Hearo enables users to access upwards of 35 broadcast services in the U.S. (from NBC Sports to YouTube to Disney+), and it relies on data synchronization to ensure that every user sees the same original video quality.
Hearo has also, unsurprisingly, focused a lot of its efforts on sound, aiming to ensure that when multiple streams of audio are being created at the same time — say users are watching the basketball playoffs together and also commenting — not everyone involved is confronted with a noisy feedback loop.
Instead, he says, through echo cancellation and other “special audio tricks” that Hearo’s small team has developed, users can enjoy the experience without “noise and other stuff messing up the experience.” (“Pretty much we can do everything Clubhouse can do,” says Lerner. “We’re just doing it as you’re watching something else because I honestly didn’t think people just sitting around talking would be a big thing.”)
Like Giggl, Hearo Lerner envisions a subscription model; it also anticipates an eventual revenue split with sports broadcasters and says it’s already working with one in Europe, the European Broadcasting Union, on that front.
While interesting in their respective ways, the startups aren’t the first to focus on watch-together type experiences. Rabbit, a company founded in 2013, enabled people to remotely browse and watch the same content simultaneously, as well as to text and video chat all the while.
Notably, Rabbit eventually ran aground. Lerner says that’s because the company was screen-sharing other people’s copyrighted material and so couldn’t charge for its service. (“Essentially,” observes Lerner, “you can get away with some amount of piracy if it’s not for your personal financial benefit.”)
Still, the the degree to which people are interested in “online watch parties” isn’t yet clear, even if, through their own tech offerings, Hearo and Giggl have viable paths to generating revenue. Like Giggl, Hearo’s users numbers are conservative by most standards, with 300,000 downloads to date of its app for iOS, Android, Windows, and macOS, and 60,000 actively monthly users. While the company has been hard at work building its tech instead of marketing, it’s probably fair to wonder in what direction those numbers will move, particularly as people reintegrate into the physical world post-pandemic.
For his part, Lerner isn’t worried about at all about demand. He points to a generation that is far more comfortable watching video on a phone than elsewhere. He also notes that screen time has become “an isolating thing,” when it could easily become “an ideal time to hang out with your buddies.” He thinks it’s inevitable, in fact.
“Over the last 20 years, games went from single player to multiplayer to voice chats showing up in games so people can actually hang out,” he says. “We think the same is going to happen to the rest of the media business because mobile is everywhere and social is fun. And it’s nothing more complicated than that.”
Zog echoes the sentiment. “It’s obvious that people are going to meet up more often” as the pandemic winds down, he says. But all that real-world socializing “isn’t really going to be a substitute” for the kind of online socializing that’s already happening in so many corners of the internet.
Besides, he adds Giggl wants to “make it so that being together online is just as good as being together in real life. That’s the end goal here.”
Last year, during the pandemic, a free browser extension called Netflix Party gained traction because it enabled people to play the same Netflix TV shows and movies as far-flung friends and family. It also enabled them to dish about the action in a side bar chat.
Yet that company — later renamed Teleparty — was just the beginning. So argue two companies that have raised seed funding, one of which just closed its round this week led by Craft Ventures, and the other a four-year-old startup that has raised $3 million in seed funding, including from 500 Startups, and having developed quite a bit of its tech already, is talking with investors anew.
Both suggest that while investors have been throwing money at virtual events and edtech companies, there is an even bigger opportunity in a kind of multiplayer browsing experience that enables people to do much more together online while apart, from watching sporting events and movie watching and to reviewing X-rays with one’s doctor. In fact, both say that for younger users who’ve largely grown up socializing online, more web surfing together is inevitable.
The companies are taking somewhat different approaches. The startup on which Craft just made a bet, leading its $2.2 million seed round, is Giggl, a year-old, London-based startup that invites users of its web app to tap into virtual Chrome sessions, which it calls “portals,” to which they can invite friends to browse content together, as well as text chat and call in. The portals can be private rooms or public so that anyone can join.
The company was founded by four teenagers who grew up together, led by 19-year-old CEO Tony Zog, and the startup is fairly nascent. Indeed, it only recently graduated from the LAUNCH accelerator program. Now it plans to use its new funding to build its own custom server infrastructure to minimize downtime and reduce its costs.
It’s somewhat of a field-of-dreams strategy, with just 60,000 people signed up currently on Giggle, one third of them monthly active users, Zog tells us. But the idea is to build a stickier product that works in all kinds of scenarios and is available in both free and paid versions. For example, people can right now chat while surfing social media with friends, or while watching events together like Apple Worldwide Developers Conference. Eventually, however, Giggl plans to charge consumers for more premium features, as well as sell enterprise subscriptions to outfits that are looking for more ways to collaborate. (You can check out a demo of Giggl’s current service below.)
The other “multiplayer” startup — the one backed by 500 Startups, along with numerous angel investors — is Hearo.live, which is the brainchild of Ned Lerner, who previously spent 13 years as a director of engineering with Sony Worldwide Studios and a short time before that as the CTO of an Electronic Arts division.
Hearo has a more narrow strategy in that the company is “all about watching,” says Lerner. “We’re kind of a special case in that you can’t browse absolutely anything” as with Giggle. Instead, Hearo enables users to access upwards of 35 broadcast services in the U.S. (from NBC Sports to YouTube to Disney+), and it relies on data synchronization to ensure that every user sees the same original video quality.
Hearo has also, unsurprisingly, focused a lot of its efforts on sound, aiming to ensure that when multiple streams of audio are being created at the same time — say users are watching the basketball playoffs together and also commenting — not everyone involved is confronted with a noisy feedback loop.
Instead, he says, through echo cancellation and other “special audio tricks” that Hearo’s small team has developed, users can enjoy the experience without “noise and other stuff messing up the experience.” (“Pretty much we can do everything Clubhouse can do,” says Lerner. “We’re just doing it as you’re watching something else because I honestly didn’t think people just sitting around talking would be a big thing.”)
Like Giggl, Hearo Lerner envisions a subscription model; it also anticipates an eventual revenue split with sports broadcasters and says it’s already working with one in Europe, the European Broadcasting Union, on that front.
While interesting in their respective ways, the startups aren’t the first to focus on watch-together type experiences. Rabbit, a company founded in 2013, enabled people to remotely browse and watch the same content simultaneously, as well as to text and video chat all the while.
Notably, Rabbit eventually ran aground. Lerner says that’s because the company was screen-sharing other people’s copyrighted material and so couldn’t charge for its service. (“Essentially,” observes Lerner, “you can get away with some amount of piracy if it’s not for your personal financial benefit.”)
Still, the the degree to which people are interested in “online watch parties” isn’t yet clear, even if, through their own tech offerings, Hearo and Giggl have viable paths to generating revenue. Like Giggl, Hearo’s users numbers are conservative by most standards, with 300,000 downloads to date of its app for iOS, Android, Windows, and macOS, and 60,000 actively monthly users. While the company has been hard at work building its tech instead of marketing, it’s probably fair to wonder in what direction those numbers will move, particularly as people reintegrate into the physical world post-pandemic.
For his part, Lerner isn’t worried about at all about demand. He points to a generation that is far more comfortable watching video on a phone than elsewhere. He also notes that screen time has become “an isolating thing,” when it could easily become “an ideal time to hang out with your buddies.” He thinks it’s inevitable, in fact.
“Over the last 20 years, games went from single player to multiplayer to voice chats showing up in games so people can actually hang out,” he says. “We think the same is going to happen to the rest of the media business because mobile is everywhere and social is fun. And it’s nothing more complicated than that.”
Zog echoes the sentiment. “It’s obvious that people are going to meet up more often” as the pandemic winds down, he says. But all that real-world socializing “isn’t really going to be a substitute” for the kind of online socializing that’s already happening in so many corners of the internet.
Besides, he adds Giggl wants to “make it so that being together online is just as good as being together in real life. That’s the end goal here.”
One might think that a short week due to a U.S. holiday calls for a short weekly recap, but we have plenty to share about growth marketing from our coverage over the week. With the help of your recommendations, this week we were able to interview Peep Laja and Lucy Heskins, and publish multiple guest columns on growth-related topics including homepage testing, marketing lies to watch out for, VR ad opportunities, company-naming and ad compliance.
TechCrunch is collecting responses in this survey to find the best growth marketer for founders to work with. We’ve included some of our favorites, below the links.
Navigating ad fraud and consumer privacy abuse in programmatic advertising: Did you know that “ad fraud exceeded $35 billion last year, a figure expected to rise to $50 billion by 2025”? Jalal Nasir, CEO of marketing compliance startup Pixalate, lends his thoughts about how business leaders and brands can ensure they don’t fall victim to the problem.
(Extra Crunch) Can advertising scale in VR?: Have you been on the fence about VR advertising for your company? AR/VR analyst Michael Boland lists out the pros and cons in this article.
As always, please let us know if you can recommend a top-tier growth marketer who works with startups by filling out this quick survey.
Marketer: Nikita Vorobyev
Recommender: Ruby Club
Testimonial: “Nikita & his company, Buildrbrand, have worked tirelessly to bring my idea to life and did everything in his power to get it to the level it is today. He & his team created a world-class conditional quiz visual experience that I think would be really cool for him to share with the industry. He doesn’t know I nominated him, but I definitely wanted to give back to him in any way I can since I believe his agency creates some of the best brands going viral online right now.”
Testimonial: “They [have] shown considerable and demonstrable growth marketing success at various companies. One of them being MisterGreen, a Dutch Tesla-leasing company that had grown 10x under Max’s leadership.”
Testimonial: “Hired her to lead Product Marketing and she identified the opportunity to do growth in a much different way, which could significantly accelerate our company’s growth. So, she founded the Growth Marketing team and scaled the team from 1 person to 30 people in less than 2 years, based on all the success they had in growing our member base.”
To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.
Hello and welcome to Daily Crunch for July 9, 2021. We’ve made it to Friday, y’all, be proud. But we can’t relax just yet — there’s quite a lot to get through today. From deceitful auto companies now posing as tech companies to the current venture capital frenzy, we have it all. Let’s go! — Alex
The TechCrunch Top 3
Startups have never had it so good:That’s our read of the Q2 2021 venture capital market. Records were smashed around the world, a record number of unicorns were born and valuations ticked up. If you are a founder considering raising capital, now is probably a good time to do so.
Biden takes on megacorps:We jokingly call the public-company section of this newsletter Big Tech because, well, the most famous technology companies are freakin’ massive. And that has a lot of folks worried that some firms have become so large that they should be broken up to engender more competition. Tech companies disagree, naturally. Regardless, the noise from the U.S. government regarding goliath companies is starting to result in action.
What’s ahead for European startups? We usually reserve these three slots for the biggest news of the day, but I wanted to share an essay written by a German venture capitalist about his country. The investor is bullish, but has two ideas regarding where the country could do better: employee stock options and regulations regarding spinoffs. It’s worth reading if you want to consider why some countries wind up with more active startup communities than others.
Startups/VC
First, key startup news:
Korean grocery startup Kurly raises $200M: The online grocer is now worth more than $2 billion. Even more, its plans for an IPO in the United States are kaput. Instead, the company will look to list locally in the future. Chop from the Didi mess or something else? Whatever the case, the company is one to keep an eye on.
Today’s Tiger round? Brazilian HR startup Flash:The company just put together a $22 million Series B that the hyper-caffeinated venture capital group led. The São Paulo-based startup provides a new way to offer benefits in the country.
$500M more for Ola:The ride-hailing market’s insatiable appetite for capital was fed another half-billion today with news that India’s Ola has raised new funds from “Temasek and an affiliate of Warburg Pincus,” per TechCrunch. Maybe the Didi fiasco is being viewed by investors as a one-off, at least when it comes to the world of on-demand rides.
Second, from the venture capital side of the market:
TechCrunch’s Ron Miller wrote a profile of The Artemis Fund, which is worth reading. The investing group, which was founded by women and often invests in women, has “ invested in 11 companies with plans to invest in 4-5 more [before raising its] the next fund.”
DN Capital has raised a $350 million fund after several of the startups that it backed went public. The firm invests mostly in Europe as opposed to the U.K., a market where its partners say more U.S.-based venture capitalists show up.
Three venture capitalists banded together to write up some tips for robotics-focused startups. So, if you are building hardware that moves, this is for you.
3 analysts weigh in: What are Andy Jassy’s top priorities as Amazon’s new CEO?
Now that he’s stepping away from AWS and taking over for Jeff Bezos, what are the biggest challenges facing incoming Amazon CEO Andy Jassy?
Enterprise reporter Ron Miller reached out to three analysts to get their take:
Robin Ody, Canalys
Sucharita Kodali, Forrester
Ed Anderson, Gartner
Amazon is listed second in the Fortune 500, but it’s not all sunshine and roses — maintaining growth, unionization, and the potential for antitrust regulation at home and abroad are just a few of his responsibilities.
“I think the biggest to-do is to just continue that momentum that the company has had for the last several years.,” said Kodali. “He has to make sure that they don’t lose that. If he does that, I mean, he will win.”
(Extra Crunch is our membership program, which helps founders and startup teams get ahead.You can sign up here.)
Big Tech Inc.
Wrapping up the newsy portion of today’s missive, two final entries. First, a dig into why the EU just fined a number of automakers. Rebecca reports:
As environmental issues really came of age in the 1990s, certain German automakers were meeting in secret groups to make sure their cars would continue to industriously contribute to greenhouse gas emissions. According to the European Union, Volkswagen, Audi, Porsche, BMW and Mercedes-Benz parent company Daimler have been illegally colluding to restrict competition in emission cleaning for new diesel passenger cars, essentially slowing the deployment of cleaner emissions tech.
Yes, you can be very mad about that.
Finally, from the world of Facebook, good news for all you WhatsApp users out there. You will be able to select an option to send higher-quality images and videos, getting around what TechCrunch called the service’s “iffy image compression.” See, not all news is bad news!
We’re reaching out to startup founders to tell us who they turn to when they want the most up-to-date growth marketing practices. Fill out the survey here.
Read one of the recommendations we’ve received below!
Name of marketer: Nikita Vorobyev
Name of recommender: Ruby Club
Recommendation: “Nikita and his company, Buildrbrand, have worked tirelessly to bring my idea to life and did everything in his power to get it to the level it is today. He and his team created a world-class conditional quiz visual experience that I think would be really cool for him to share with the industry. He doesn’t know I nominated him, but I definitely wanted to give back to him in any way I can since I believe his agency creates some of the best brands going viral online right now.”
Netskope, focused on Secure Access Service Edge architecture, announced Friday a $300 million investment round on a post-money valuation of $7.5 billion.
The oversubscribed insider investment was led by ICONIQ Growth, which was joined by other existing investors, including Lightspeed Venture Partners, Accel, Sequoia Capital Global Equities, Base Partners, Sapphire Ventures and Geodesic Capital.
Netskope co-founder and CEO Sanjay Beri told TechCrunch that since its founding in 2012, the company’s mission has been to guide companies through their digital transformation by finding what is most valuable to them — sensitive data — and protecting it.
“What we had before in the market didn’t work for that world,” he said. “The theory is that digital transformation is inevitable, so our vision is to transform that market so people could do that, and that is what we are building nearly a decade later.”
With this new round, Netskope continues to rack up large rounds: it raised $340 million last February, which gave it a valuation of nearly $3 billion. Prior to that, it was a $168.7 million round at the end of 2018.
Similar to other rounds, the company was not actively seeking new capital, but that it was “an inside round with people who know everything about us,” Beri said.
“The reality is we could have raised $1 billion, but we don’t need more capital,” he added. “However, having a continued strong balance sheet isn’t a bad thing. We are fortunate to be in that situation, and our destination is to be the most impactful cybersecurity company in the world.
Beri said the company just completed a “three-year journey building the largest cloud network that is 15 milliseconds from anyone in the world,” and intends to invest the new funds into continued R&D, expanding its platform and Netskope’s go-to-market strategy to meet demand for a market it estimated would be valued at $30 billion by 2024, he said.
Even pre-pandemic the company had strong hypergrowth over the past year, surpassing the market average annual growth of 50%, he added.
Today’s investment brings the total raised by Santa Clara-based Netskope to just over $1 billion, according to Crunchbase data.
With the company racking up that kind of capital, the next natural step would be to become a public company. Beri admits that Netskope could be public now, though it doesn’t have to do it for the traditional reasons of raising capital or marketing.
“Going public is one day on our path, but you probably won’t see us raise another private round,” Beri said.
TikTok is 
Publishing platform Hiber raised $15 million for its web platform that allows people to create user-generated games, similar to Roblox. The company also offers a creation app for Android devices and allows players to use Safari to create games on iOS.
Neighborhood social networking app Nextdoor 
