Author: azeeadmin

The U.S. SPAC market kept rolling along this week with news that Satellogic will go public on the Nasdaq stock exchange thanks to a merger with a blank check company. The Earth-imagery-focused company is standard SPAC fare, with strong capital needs and distant revenues. It was not alone in pursuing the transaction type Tuesday, with news breaking that Nextdoor will also go public on the Nasdaq via a SPAC.

Nextdoor’s projections, as TechCrunch noted, were more modest and thus more believable than what we’ve seen from many other SPAC-led debuts.

These companies represent the two poles of blank-check-powered public offerings: Some startups taking the SPAC route are more speculative, banking on revenues to come, while others feature more established companies with a history of material revenue growth. It’s easy to find more examples of both varieties. Acorns’ deal fits the established trend. Lidar SPACs? Less so.

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Given the breadth of companies pursuing blank-check deals, the SPAC boom isn’t over even if there has been chatter that the party is breaking up. Bessemer partner Mary D’Onofrio told The Exchange, for example, that while the “pace of SPAC IPOs” and combinations have slowed, “there is still $128 billion of SPAC dry powder in the market seeking acquisitions and incentivized to transact.”

Matt Murphy, a partner at Menlo Ventures, helped explain the SPAC pace deceleration that D’Onofrio discussed, telling The Exchange that the pace of SPAC deals “has slowed as they’ve gotten more scrutiny and don’t seem quite as ‘easy’ as they once were.”

But this week’s U.S. SPAC news tells us that blank-check companies are still finding a diverse set of companies to take public. But what about other regions? Unicorns are hardly unique to the U.S. startup ecosystem. Are we seeing similar SPAC interest in Europe?

The Exchange tried to find out, given that we’ve seen huge rounds from the region and a few IPOs over various types. Is the SPAC game afoot in Europe?

Hunting European targets

There’s a huge number of SPACs trading in the United States currently hunting for a deal. And there is historical precedent for U.S.-listed blank-check companies taking on European targets. Global law firm Skadden counts 16 U.S. SPAC-led transactions with European companies from 2015 through February of this year, for example.

“For the past few weeks, we’ve been approached on a recurring basis, much like all known French and European scale-ups,” Aircall’s co-founder Jonathan Anguelov told French financial newspaper Les Échos last March (translation: TechCrunch). However, being approached doesn’t necessarily mean that European unicorns are entertaining the offers.

Corporate venture capital used to get a bad rap. The money flowed from corporations into startups when times were good, and quickly disappeared when the market turned.

But startups and corporations discovered something over time: They’re a lot stronger together no matter the market conditions. Most big companies can’t gain enough insight into what’s bubbling up in the market without deep ties to founders; meanwhile, founders benefit greatly from having a renowned corporation on the balance sheet. Not only can a big brand give an upstart near-instant credibility, a corporate partner can also open doors and provide startups with a far better understanding about the needs of established companies.

It’s because the corporate venture relationship has become so key to founders that we’re thrilled to be welcoming Arvind Purushotham to TC Early Stage – Marketing & Fundraising happening tomorrow, July 8-9. Purushotham is a longtime VC who started his career as a circuit designer with Intel before spending nearly a decade with Menlo Ventures. Then, in 2011, he helped found Citi’s corporate venture capital group, where he remains the outfit’s global head of venture investing and sets the group’s overall strategy.

Indeed, having since partnered with all kinds of companies over this last decade with Citi  —  just some of its checks have gone to Square, DocuSign, Honey, Plaid, Betterment, Jet.com, DataRobot, Tanium, Pindrop and Digit — Purushotham knows what it takes to drive a business forward and how corporate VCs can help in the mission.

He’ll share what his own team looks for when meeting with a founding team and how Citi specifically identifies, then invests in startups as a way to bring cutting-edge tech to Citi’s businesses and functions.

He’ll also share what not to do and why, how much to reveal and when, and how to think about a corporate venture partner once that investment is made.

It’s going to be one of the highlights of our event, which is coming up quickly and is a must-see if your startup or a startup that you’re advising is looking for insights into how to better approach the key pillars of both marketing and fundraising. Get your ticket today before prices increase tonight.

When the Pentagon killed the JEDI cloud program yesterday, it was the end of a long and bitter road for a project that never seemed to have a chance. The question is why it didn’t work out in the end, and ultimately I think you can blame the DoD’s stubborn adherence to a single vendor requirement, a condition that never made sense to anyone, even the vendor that ostensibly won the deal.

In March 2018, the Pentagon announced a mega $10 billion, decade-long cloud contract to build the next generation of cloud infrastructure for the Department of Defense. It was dubbed JEDI, which aside from the Star Wars reference, was short for Joint Enterprise Defense Infrastructure.

The idea was a 10 year contract with a single vendor that started with an initial two year option. If all was going well, a five year option would kick in and finally a three year option would close things out with earnings of $1 billion a year.

While the total value of the contract had it been completed was quite large, a billion a year for companies the size of Amazon, Oracle or Microsoft is not a ton of money in the scheme of things. It was more about the prestige of winning such a high-profile contract and what it would mean for sales bragging rights. After all, if you passed muster with the DoD, you could probably handle just about anyone’s sensitive data, right?

Regardless, the idea of a single-vendor contract went against conventional wisdom that the cloud gives you the option of working with the best-in-class vendors. Microsoft, the eventual winner of the ill-fated deal acknowledged that the single vendor approach was flawed in an interview in April 2018:

Leigh Madden, who heads up Microsoft’s defense effort, says he believes Microsoft can win such a contract, but it isn’t necessarily the best approach for the DoD. “If the DoD goes with a single award path, we are in it to win, but having said that, it’s counter to what we are seeing across the globe where 80 percent of customers are adopting a multi-cloud solution,” Madden told TechCrunch.

Perhaps it was doomed from the start because of that. Yet even before the requirements were fully known there were complaints that it would favor Amazon, the market share leader in the cloud infrastructure market. Oracle was particularly vocal, taking its complaints directly to the former president before the RFP was even published. It would later file a complaint with the Government Accountability Office and file a couple of lawsuits alleging that the entire process was unfair and designed to favor Amazon. It lost every time — and of course, Amazon wasn’t ultimately the winner.

While there was a lot of drama along the way, in April 2019 the Pentagon named two finalists, and it was probably not too surprising that they were the two cloud infrastructure market leaders: Microsoft and Amazon. Game on.

The former president interjected himself directly in the process in August that year, when he ordered the Defense Secretary to review the matter over concerns that the process favored Amazon, a complaint which to that point had been refuted several times over by the DoD, the Government Accountability Office and the courts. To further complicate matters, a book by former defense secretary Jim Mattis claimed the president told him to “screw Amazon out of the $10 billion contract.” His goal appeared to be to get back at Bezos, who also owns the Washington Post newspaper.

In spite of all these claims that the process favored Amazon, when the winner was finally announced in October 2019, late on a Friday afternoon no less, the winner was not in fact Amazon. Instead, Microsoft won the deal, or at least it seemed that way. It wouldn’t be long before Amazon would dispute the decision in court.

By the time AWS re:Invent hit a couple of months after the announcement, former AWS CEO Andy Jassy was already pushing the idea that the president had unduly influenced the process.

“I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal,” Jassy said at that time.

Then came the litigation. In November the company indicated it would be challenging the decision to choose Microsoft charging that it was was driven by politics and not technical merit. In January 2020, Amazon filed a request with the court that the project should stop until the legal challenges were settled. In February, a federal judge agreed with Amazon and stopped the project. It would never restart.

In April the DoD completed its own internal investigation of the contract procurement process and found no wrong-doing. As I wrote at the time:

While controversy has dogged the $10 billion, decade-long JEDI contract since its earliest days, a report by the DoD’s Inspector General’s Office concluded today that, while there were some funky bits and potential conflicts, overall the contract procurement process was fair and legal and the president did not unduly influence the process in spite of public comments.

Last September the DoD completed a review of the selection process and it once again concluded that Microsoft was the winner, but it didn’t really matter as the litigation was still in motion and the project remained stalled.

The legal wrangling continued into this year, and yesterday The Pentagon finally pulled the plug on the project once and for all, saying it was time to move on as times have changed since 2018 when it announced its vision for JEDI.

The DoD finally came to the conclusion that a single vendor approach wasn’t the best way to go, and not because it could never get the project off the ground, but because it makes more sense from a technology and business perspective to work with multiple vendors and not get locked into any particular one.

“JEDI was developed at a time when the Department’s needs were different and both the CSPs’ (cloud service providers) technology and our cloud conversancy was less mature. In light of new initiatives like JADC2 (the Pentagon’s initiative to build a network of connected sensors) and AI and Data Acceleration (ADA), the evolution of the cloud ecosystem within DoD, and changes in user requirements to leverage multiple cloud environments to execute mission, our landscape has advanced and a new way-ahead is warranted to achieve dominance in both traditional and non-traditional warfighting domains,” said John Sherman, acting DoD Chief Information Officer in a statement.

In other words, the DoD would benefit more from adopting a multi-cloud, multi-vendor approach like pretty much the rest of the world. That said, the department also indicated it would limit the vendor selection to Microsoft and Amazon.

“The Department intends to seek proposals from a limited number of sources, namely the Microsoft Corporation (Microsoft) and Amazon Web Services (AWS), as available market research indicates that these two vendors are the only Cloud Service Providers (CSPs) capable of meeting the Department’s requirements,” the department said in a statement.

That’s not going to sit well with Google, Oracle or IBM, but the department further indicated it would continue to monitor the market to see if other CSPs had the chops to handle their requirements in the future.

In the end, the single vendor requirement contributed greatly to an overly competitive and politically charged atmosphere that resulted in the project never coming to fruition. Now the DoD has to play technology catch-up, having lost three years to the histrionics of the entire JEDI procurement process and that could be the most lamentable part of this long, sordid technology tale.

In his first press event since leaving office earlier this year, former President Donald Trump announced that he would be launching a volley of class action lawsuits against Twitter, Facebook and Google and their CEOs, claiming that the three companies violated his First Amendment rights.

“We’re demanding an end to the shadow-banning, a stop to the silencing and a stop to the blacklisting, banishing and canceling that you know so well,” Trump said at the press conference, held at his Bedminster, New Jersey golf club.

Following the January 6 attack on the Capitol, social media platforms swiftly revoked then President Trump’s posting privileges. For years, Trump tested the boundaries of platforms’ policies around misinformation and even violent threats, but his role in the events of that day crossed a line. Trump soon found himself without a megaphone with which to reach his many millions of followers across Twitter, Facebook and YouTube.

Trump’s fate on Twitter is known: the former president faces a lifetime ban there. But on Facebook and YouTube, there’s a possibility that his accounts could be restored. Facebook is currently deliberating that decision in a back-and-forth exchange with its new external policy making body, the Facebook Oversight Board.

Trump will be the lead plaintiff in the suits, which are being filed in the U.S. District Court for the Southern District of Florida. The lawsuits seek “compensatory and punitive damages” and the restoration of Trump’s social media accounts.

This morning r2c, a startup building a SaaS service around the Semgrep open-source project, announced that it has closed a $27 million Series B. Felicis led the round, which the company said was a pre-emptive deal.

Prior investors firms Redpoint and Sequoia also participated in the fundraising event; r2c last raised a $13 million Series A in October of 2020.

The startup fits into several trends that TechCrunch has explored in recent quarters, including what appears to be a growing number of open-source (OSS) grounded startups raising capital, more rounds coming to exist thanks to investors looking to get the jump on inside rounds before they can form.

On the OSS point, r2c works with Semgrep, which the company likens to a “code-aware grep.” Still confused? Don’t worry, this is all a bit technical, but interesting. Grep is a tool for searching through plain-text that has been around for decades. Semgrep is related, but focused on finding things inside of written code.

Given the sheer volume of code that is written daily in the world, you can imagine that there is an ever-rising demand for finding particular bits of text quickly; Semgrep is an evolution of the original project, that was initially built inside of Facebook.

Per r2c CEO Isaac Evans, however, the project failed to attract much awareness. His startup has built what Evans described to TechCrunch has the “canonical” Semgrep fork, or version, and has crafted a software service around the code to make it easier for other companies to use.

The r2c team, via the company.

There are many ways to generate revenue from open-source software. Two popular monetization routes are througuh support services or offers to host particular projects. But, R2c is a doing something a bit different. The startup sells a monthly, per-developer subscription (SaaS) that packages a broad set of security-focused rules across different coding languages, allowing companies to easily check their own software for possible security issues.

Or as Evans succinctly explained it, r2c offers something akin to application security in a box.

Focusing on cybersecurity is a reasonable tack for the company. Given the ever-growing number of breaches that the public endures, helping companies leak less data, and suffer fewer intrusions is big business.

You don’t have to pay r2c, however. Semgrep is OSS and the rules associated with various languages are available under a LGPL license — more on that definition here. Developers could build their own version of what the company offers. But, Evans argued, it won’t be ready to help you pick which rules you may want to apply to your code, something that his company is happy to help with for a fee.

From a wide lens, r2c fits into the developer tools category. It is content to land and expand inside of companies, perhaps allowing it a lower cost of acquiring customers than we see at some SaaS startups. But that doesn’t mean that the company won’t go to market to sell its service. Per Evans, the startup has historically underinvested in marketing, something that it may now be able to focus more on thanks to its recent financing.

It is not uncommon to see companies with technically-minded founders initially spend too little on the sales and marketing parts of operating a software business. But our impression after discussing the company’s plans with Evans is that r2c intends to get that part of its house in order.

Evans told TechCrunch that his company took aboard more cash because it doesn’t want to build the best search tool for, say, the C programming language. It wants to go broad, fusing what the CEO described as the “customizability of Semgrep” and wide language support.

Let’s see how quickly the company can staff up, bolster its marketing efforts, and take on enterprise clients. Raising a Series C puts the company somewhere past its startup adolescence, so from here on out we can pester the company for concrete growth numbers.

If you’re a frequent TechCrunch reader, you probably already know about mmhmm, the startup with the name you likely either love or hate. It’s Phil Libin’s second act after Evernote, and it’s a startup born of the pandemic maybe more so than any other, providing improved video chat tools including automatic background removal and advanced presentation features. The company, which is just over a year old, has now raised a total of around $140 million thanks to a fresh injection of $100 million first reported by Bloomberg on Tuesday, which is somewhat astounding if you remember using the first early beta versions like me.

Startups with silly names raising lots of money is hardly an exceptional occurrence in tech, but Libin’s startup earns extra credit for barely having a name at all (it’s really just a sound). The company was built on the idea that current video tools really fail to provide users with access to all the potential that modern technology offers, particularly when it comes to presentations. Mmhmm’s core presenter tools help your meetings look more like professional newscasts than warmed over digital versions of transparency slideshows and whiteboard scrawls, and the company has steadily been adding features and improving its performance through frequent iterations since its founding.

As it stands, mmhmm works in tandem with the existing video services that people use for virtual meetings, including Zoom. But Bloomberg says it’s going to go standalone as well, and introduce a mobile app version. That sounds like a good use of the new funds, which come from SoftBank’s Vision Fund, Sequoia Capital and more.

Even projecting forward to a post-pandemic world where virtual meetings are less important, they’re probably still a permanent part of the working world. But mmhmm’s feature set also seems to almost define the concept of ‘feature, not product’ that is presented as a cautionary tale to startups crafting wings of wax and soaring as high as they can in terms of raises and valuation.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.

Dear Sophie,

I co-founded a startup a few years ago and currently have an O-1A visa.

My wife wants to return to work, but as you know, she cannot get work authorization on an O-3. I read that if I switch to International Entrepreneur Parole, she can get work authorization.

What is the process for getting Entrepreneur Parole and for my wife to get a work permit?

— Supportive Spouse in San Jose

Dear Supportive,

I’m so excited by all the opportunities opening up thanks to the revived International Entrepreneur Parole (IEP) program. It would be awesome if your wife could resume her career!

Take a listen to my podcast on the parole entry process, what you have to do to get it and what to expect when you do, including when your wife can apply for an Employment Authorization Document (EAD). Tomorrow, I’ll be participating in a free educational panel hosted by the National Venture Capital Association with representatives of the U.S. Department of Homeland Security that you’re welcome to join as well.

Although this IEP has been around for more than four years, the Department of Homeland Security only recently revived it after the Trump administration tried and failed to get rid of it. Given that the IEP program is so new, I recommend working with an experienced immigration attorney when applying for IEP. An immigration attorney can also discuss other options that would allow your wife to work.

How do I apply for Entrepreneur Parole?

You must fill out the application for Entrepreneur Parole and submit it to U.S. Citizenship and Immigration Services (USCIS) along with evidence that demonstrates your rapidly growing startup will create jobs and significantly contribute to the U.S. economy. If you want more details on the qualification requirements for IEP, take a look at a previous Dear Sophie column on that topic or listen to my podcast, International Entrepreneur Parole is back! To get parole for your spouse and children (under the age of 21 and unmarried), you can concurrently file their applications for Advance Parole.

If USCIS approves your application for IEP, you will receive a parole document that is valid for 30 months, supports multiple entries and can be extended once for another 30 months if you and your startup continue to meet the extension criteria. However, USCIS approval alone does not grant you or your family parole.

Who grants parole?

A U.S. Customs and Border Patrol (CBP) officer at an airport or other U.S. port of entry will have the final say on whether you and your family are granted parole — a temporary stay in the U.S. — and for how long. There is no equivalent of a “change of status” here.

That means if you and your family are in the U.S., you must first leave the U.S. and then show your parole documents to the CBP officer upon reentering the U.S. The CBP officer has the discretion to approve or deny your entry, so your immigration attorney should prepare you by letting you know the type of questions you may be asked and how to succinctly and honestly answer them.

If you and your wife are returning to the U.S. via airplane or boat, you will need to go to a U.S. embassy or consulate to obtain a boarding foil. That foil — also known as a travel foil — will enable you to board an airplane or boat since you won’t have a visa stamp in your passport under IEP.

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

Canadian nationals traveling from Canada to a U.S. port of entry can present an approved parole document without obtaining travel documentation. I believe individuals are allowed to enter the land border from Mexico, which some of our clients will be testing. (More updates to come!)

Although IEP allows for an initial stay in the U.S. of up to 30 months, CBP officers could approve your parole into the U.S. for only one year, requiring you to exit and reenter the U.S. again in 12 months. The CBP officer will stamp your passport with your parole expiration date.

To renew parole beyond the initial 30 months for another 30 months, you will have to meet the IEP extension requirements and file a new Entrepreneur Parole application.

How does my spouse get an EAD?

Once you and your wife are paroled into the U.S., she can apply for an Employment Authorization Document (EAD), otherwise known as a work permit. Your wife cannot begin working until she receives the EAD, and it will only be valid for the length of the parole stay. Given the current USCIS processing delays, the EAD may only be valid for a few months before your wife has to apply for a new EAD.

Depending on your wife’s field of expertise, it may make more sense for her to find a job with an employer willing to sponsor her for a visa or green card. Given the tight labor market in some industry sectors in the U.S., many employers are increasingly willing to invest in international talent.

Or, if you both want to remain in the U.S. permanently, you can also consider self-petitioning for an EB-1A green card for individuals with extraordinary ability or an EB-2 NIW (National Interest Waiver) green card for individuals with exceptional ability. Your immigration attorney should be able to help you determine which immigration option is right for you and your wife.

Best wishes to you and your wife as you navigate this process to live your dreams!

Sophie

Have a question for Sophie? Ask it here. We reserve the right to edit your submission for clarity and/or space.

The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer. You can contact Sophie directly at Alcorn Immigration Law.

Sophie’s podcast, Immigration Law for Tech Startups, is available on all major platforms. If you’d like to be a guest, she’s accepting applications!

Unit21, a startup that helps businesses monitor fraudulent activities with its no-code software, announced today it has raised $34 million in a Series B round of funding led by Tiger Global Management.

The round values San Francisco-based Unit21 at $300 million and comes nine months after the startup raised a $13 million Series A that included investments from the founders of Plaid, Chime and Shape Security as well as former Venmo COO Michael Vaughan.

ICONIQ Capital and existing backers Gradient Ventures (Google’s AI venture fund), A.Capital and South Park Commons participated in the latest funding event. 

Former Affirm product manager Trisha Kothari and Clarence Chio founded Unit21 in 2018 with the goal of giving risk, compliance and fraud teams a way to fight financial crime via a “secure, integrated, no-code platform.” 

Image Credits: Unit21

The pair say they started Unit21 based on the belief that the existing model of “black box” machine learning used for fraud prevention and detection was flawed. Their idea was to develop an alternative system to provide risk and compliance teams with more control over their operations. Unit21 describes its core technology as a “flag-and-review” toolset designed to give non-technical operators and anti-money laundering (AML) teams the ability to “easily” write complex statistical models and deploy customized workflows without having to involve their engineering teams. Unit21 says it provides this toolset to companies with the aim of helping them mitigate fraud and money laundering risks through Know Your Customer (KYC) verification, transaction monitoring detection and suspicious activity report (SAR) case management. 

Unit21 has built up an impressive customer base of over 50 enterprise clients, including Chime, Intuit, Coinbase, Gusto, Flywire, Wyre and Twitter, among others. The company says it has monitored more than $100 billion in activity via its API and dashboard since its 2018 inception. It also says that it has saved more than 20 million users over $100 million in fraud loss/suspicious activity. The company declined to reveal hard revenue figures, saying only revenue grew by “12x” in 2020 compared to 2019.

“Data is the most important weapon in the fight against fraud and money laundering,” Kothair said. “This funding will support our mission to democratize data and make it more accessible to  operations teams.”

The company will also use its new capital in part toward expanding its engineering, research & development and go-to-market  teams. As of late June, Unit21 had 53 employees, up from 12 at the same time last year. The startup also plans evolve its platform for generalized flag + review use cases beyond financial crimes and fraud. It’s also eyeing expansion in the Asia-Pacific (APAC) and Europe/Middle East (EMEA) markets.

Tiger Global Partner John Curtius said Unit21 is transforming organizations’ ability to “analyze data to its advantage for risk management and compliance.”

The space is a hot one with a number of other fraud-prevention companies raising capital in recent months including Sift, Seon and Feedzai. According to Compliance Week (citing analysis by Fenergo), financial institutions were hit with an estimated $10.4 billion in global fines and penalties related to anti-money laundering (AML), know your customer (KYC), data privacy, and MiFID (Markets in Financial Instruments Directive) regulations in 2020, bringing the total to $46.4 billion for those types of breaches since 2008. The report, spanning up to its release date of Dec. 9, said there has been 198 fines against financial institutions for AML, KYC, data privacy, and MiFID deficiencies, representing a 141% increase since 2019.

Opaque, a new startup born out of Berkely’s RISELabs, announced a $9.5 million seed round today to build a solution to access and work with sensitive data in the cloud in a secure way, even with multiple organizations involved. Intel Capital led today’s investment with participation by Race Capital, The House Fund and FactoryHQ.

The company helps customers work with secure data in the cloud while making sure the data they are working on is not being exposed to cloud providers, other research participants or anyone else, says company president Raluca Ada Popa.

“What we do is we use this very exciting hardware mechanism called Enclave, which [operates] deep down in the processor — it’s a physical black box — and only gets decrypted there. […] So even if somebody has administrative privileges in the cloud, they can only see encrypted data,” she explained.

Company co-founder Ion Stoica, who was a co-founder at Databricks, says the startup’s solution helps resolve two conflicting trends. On one hand, businesses increasingly want to make use of data, but at the same time are seeing a growing trend toward privacy. Opaque is designed to resolve this by giving customers access to their data in a safe and fully encrypted way.

The company describes the solution as “a novel combination of two key technologies layered on top of state-of-the-art cloud security—secure hardware enclaves and cryptographic fortification.” This enables customers to work with data — for example to build machine learning models — without exposing the data to others, yet while generating meaningful results.

Popa says this could be helpful for hospitals working together on cancer research, who want to find better treatment options without exposing a given hospital’s patient data to other hospitals, or banks looking for money laundering without exposing customer data to other banks, as a couple of examples.

Investors were likely attracted to the pedigree of Popa, a computer security and applied crypto professor at UC Berkeley and Stoica, who is also a Berkeley professor and co-founded Databricks. Both helped found RISELabs at Berkeley where they developed the solution and spun it out as a company.

Mark Rostick, vice president and senior managing director at lead investor Intel Capital says his firm has been working with the founders since the startup’s earliest days, recognizing the potential of this solution to help companies find complex solutions even when there are multiple organizations involved sharing sensitive data.

“Enterprises struggle to find value in data across silos due to confidentiality and other concerns. Confidential computing unlocks the full potential of data by allowing organizations to extract insights from sensitive data while also seamlessly moving data to the cloud without compromising security or privacy,” Rostick said in a statement

He added, “Opaque bridges the gap between data security and cloud scale and economics, thus enabling inter-organizational and intra-organizational collaboration.”

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 of swiping through profiles, SwoonMe’s idea is to use a combination of avatars and audio to encourage users to connect based on someone’s personality, not their appearance.

To use the app, you take a selfie which SwoonMe 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. You’ll also answer a few questions — like whether you’re looking for marriage or something more casual and what your love language is (e.g. physical touch, gifts, words of affirmation, etc.), among other things.

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.

Image Credits: SwoonMe

The idea for SwoonMe comes from Tanvi Gupta, a former Facebook product specialist who was involved with a number of high-profile products, including those that shipped in Messenger and in Instagram Direct, such as Messenger reactions, a Messenger redesign, chat heads on Android, and more. This experience taught her a lot about launching new products built from scratch, and helping them to find product market fit, she says.

But Gupta decided to build SwoonMe because of her own personal struggles with modern-day dating apps, where men who messaged her immediately wanted to share selfies and meet her without having read anything on her profile.

“The dating world always felt super-indexed on looks, given the proliferation of apps like Tinder and Bumble,” Gupta explains. “And what I felt was they were not solving my personal need for somebody who wants to connect for a long-term relationship,” she says.

Gupta began work on SwoonMe during the pandemic, when the market was hungry for new ways to connect people online — a trend that had led the to the launch of audio apps like Clubhouse, and later, its many clones. The founder says she was also inspired by Clubhouse, as it demonstrated the potential in audio-based social networking, including how it could be used for more personal connections.

“Platforms like Clubhouse have shown that taking video and looks out of the equation allow people to lean into actual topics,” Gupta says. “It creates new levels of intimacy and interaction, and we’re basically trying to capture this with SwoonMe, but in the dating world.”

Though SwoonMe isn’t necessarily limited only to people looking for relationships, it may initially appeal to that demographic because it requires a bit more time and focus to listen to soundbites and engage in audio-based messaging. This experience would be more likely to attract someone who is taking dating more seriously, not someone in search of a quick hookup or causal connection.

Image Credits: SwoonMe

SwoonMe is not the first social app to use avatars instead of photos, however. Avatar-based social discovery apps have been popular in other markets in Asia and in Brazil, but have yet to make their way to the U.S. That may soon change, though, as Tinder parent Match Group this year acquired Seoul-based social app maker Hyperconnect — its biggest acquisition ever at $1.73 billion. AR-powered avatars are a part of the app portfolio that came with the deal.

The startup is also not the first dating app to take the idea of the “face reveal” — a somewhat gimmicky concept popularized by online creators — into the world of dating. There are a number of voice-based based apps on the app stores today, which have seen varying degrees of success.

In February, for example, an app called Jigsaw raised $3.7 million for its own so-called “anti-superficial” dating app that places puzzle pieces over users’ faces which can only be removed after a pre-set amount of in-app engagement. But in Jigsaw’s case, the puzzle pieces were to be applied over full body photos, and it had banned selfies. That means the app was doing the opposite of what it proposes. Instead of encouraging daters to ignore images, some users were likely making decisions based on what someone’s body looked like in their photo with their face removed. That’s even worse. (After expressing my concerns to Jigsaw and declining to cover them, the startup told me it ended its selfie ban and now accepts a wide range of imagery.)

Gupta also feels strongly that women, in particular, deserve a different way to meet people that’s not about their looks alone.

“As a female, one of the main drivers behind founding company like SwoonMe, which is audio-first and not photos, is because I personally am tired, and have been tired, of being objectified by men…We’re living in 21st century and I am done with that. I want someone to like me because of my personality, because of my voice, because of what I bring into a relationship,” she says. “Sure, physical attraction is important, but that is not the only thing,” Gupta adds.

As it turns out, there’s demand for a less superficial dating app from men, too. In fact, SwoonMe currently has more male users than female at present. (The app, to be clear, is open to all gender identities and sexual orientations as the issues it aims to solve can impact everyone. It also offers an inclusive sign-up flow.)

Though it’s too soon to report user numbers and growth, Gupta says the app has “a good number” of early testers and they’ve been able to get solid user feedback so far.

The bigger question for SwoonMe is whether or not it can attract people looking for real relationships, as many of those people  avoid dating apps altogether. It’s also competing with a growing number of video-first dating apps, like Snack, aimed at Gen Z users who are more comfortable filming themselves thanks to their use of social media platforms like TikTok.

At launch, SwoonMe doesn’t generate revenue, but plans to add premium features if it reaches scale. Longer-term, the company would like to expand its platform beyond dating to help keep couples connected during their relationship, too.

SwoonMe soft-launched across both the App Store and Play Store for beta testing, but is today announcing its official launch. Currently, SwoonMe is targeting the dating markets of San Francisco and L.A., but is open to anyone who wants to try it.

The startup is a small team and currently working to raise $1 million in seed funding.