Author: azeeadmin

What happens to technology companies with slowing growth and a rising focus on profitability before they reach behemoth scale? How much does the market value hyper-growth?

Just because a technology startup has a hot start, that doesn’t mean it will grow quickly forever. Most will wind up somewhere in the middle — or worse. Put simply, there is a larger number of tech companies that do fine or a little bit worse after they reach scale.

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But what every investor hopes for is the hot company that can keep growth alive even after reaching material scale, running through walls, competitors, economic headwinds and anything else that comes its way. Those companies don’t end up worth a few hundred million, or a billion, but can end up valued in the dozens of billions or more.

In reverse, tech companies — even those with strong gross margins — with slipping growth can see their multiples compress rapidly. Then, the vultures circle.

Which explains some of the news we’ve seen recently in the market. As Dropbox comes under fresh pressure from external parties, joining its erstwhile rival Box in the public-market growth penalty box, we’re seeing companies like Braze, Gong, Shippo and others rip ahead with rapid-fire funding rounds or public brags about their growth.

While the differential between the two groups is clear, it’s still worth exploring in more detail. Let’s talk about the growth dividend. Or, if you’d prefer, the existential cost of growth deceleration.

Grow or die

The news this week that Dropbox has attracted an activist shareholder should not have been a surprise. Its former rival Box is in the midst of a long-running struggle with an activist investor of its own. (More here.)

Locus (not to be confused with this Locus) is one of those names that’s been popping up a lot in the news — and this roundup — over the past year. Last time we spoke to the Massachusetts company, it was around a sizable raise — $150 million to be nearly precise. That effectively valued the company as a unicorn.

Core to the company’s successes are its partnerships (as is the case with any robotics fulfillment company). DHL has been a big (or the biggest) name in the mix since 2017. Amid pandemic lockdowns, the logistic giant signed up for 1,000 robots last year and, as of yesterday, is doubling that number.

DHL is really committing to robotics here. At last count, it said it had deployed around 200,000 across the U.S. alone, which puts its right around the same number as Amazon (which admittedly, hasn’t updated that figure lately). Of course, the big difference there is that Amazon is primarily pulling from in-house systems — perhaps Locus is a prime acquisition target?

The robotics company’s CEO shot down that suggestion when I spoke to him earlier this year, stating, “We have no interest in being acquired. We think we can build the most and greatest value by operating independently. There are investors that want to invest in helping everyone that’s not named ‘Amazon’ compete.”

When it comes to companies with deep pockets, though, I never say never.

Also out this morning, is a good size round from Realtime Robotics. The Boston-based company is one of a number of startups looking to streamline the process of installing and deploying industrial robotics. The $31.4 million Series A includes participation from (deep breath)  HAHN Automation, SAIC Capital Management, Soundproof Ventures , Heroic Ventures, SPARX Asset Management, Omron Ventures, Toyota AI Ventures, Scrum Ventures and Duke Angels.

There’s no such thing as a small raise, only a small…I’m not sure. Honestly, I didn’t really thing this one all the way through before I started typing. Anyway, here’s an early-stage, pre-seed from a London based startup called E-Nano. The company has developed a modular robotics system for monitoring sports turf.

Per a press release on the £100,000 ($141,000) raise, “These robots will eventually be able to assess agricultural land and contribute to landowners growing more sustainably. The team aims to implement 5G connectivity into their robots and platform, using this raise to deliver more immediate, real-time data with high throughput.”

 

Some good news for DJI comes courtesy of The Hill, which reports that the Pentagon has effectively cleared the drone giant in an audit. DJI was one of the names caught up in all of the flagging of Chinese companies that’s occurred over the past couple of years (read: during the Trump administration), which has severely kneecapped brands like Huawei and ZTE. DJI was never banned for sale outright in the States, but this is still a pretty massive relief for its ability to operate in such a large market.

The filing notes that it found “no malicious code or intent” from the company, going so far as “recommend[ing] use by government entities and forces working with US services.” Government use is a nice bonus there.

The company took a victory lap in a comment provided to TechCrunch, noting, “This U.S. government report is the strongest confirmation to date of what we, and independent security validations, have been saying for years – DJI drones are safe and secure for government and enterprise operations.”

Starship Technologies, meanwhile, snagged a high-profile name to lead the delivery robotics firm. Former Alphabet Loon CEO Alastair Westgarth will be taking the same title at his new company.

Incidentally, Starship is one of a trio of companies I’ll be speaking with during my delivery robotics panel (also Nuro and Gatik) at the upcoming TC Sessions: Mobility. We also just announced my second panel, which will be exploring a pretty vibrant category in automotive.

Max Bajracharya of TRI (Toyota), Mario Santillo of Ford and Ernestine Fu of Hyundai Motor Group will be discussing their respective employers’ approach to robotics beyond manufacturing and autonomy. They’re all doing really interesting stuff, and Hyundai, of course, is getting ready to close its acquisition of Boston Dynamics.

Should be fun. Register here.

Roku is expanding its programming for its free content hub, The Roku Channel, with today’s launch of its own weekly entertainment program called “Roku Recommends.” The 15-minute show will leverage Roku’s data to highlight the Top 5 titles for viewers to stream that week. While not exactly “original programming” the way that Roku’s recent additions of its acquired Quibi content is, the series will run only on Roku, where it can be found in The Roku Channel and Featured Free, with new episodes every Thursday.

The series is the first production to emerge from the new Roku Brand Studio — a studio that aims to produce video ads and other custom branded content for ad partners. The show is produced by Funny Or Die and Mike Farah, Beth Belew, and Jim Ziegler serve as executive producers.

The show’s co-hosts include entertainment reporter and AfterBuzz TV co-founder Maria Menounos and former NFL player, Andrew “Hawk” Hawkins. The duo will present the Top 5 titles to viewers. These recommended shows or movies may come from any of the thousands of channels across the Roku platform, based on data exclusive to the platform.

“According to Nielsen data, the average streamer spends more than seven minutes searching for what to watch next,” said Chris Bruss, Head of Roku Brand Studio, in a statement. “We are uniquely positioned to use our trending data both to help consumers find incredible movies and shows and to help advertisers go beyond the traditional 30-second ad to entertain streamers who otherwise spend time in ad-free, subscription-only environments,” he added.

The series will also allow for ad sponsors. The company says it has already signed on several national advertisers, starting with Walmart, to sponsor the program. Advertisers will have access to Roku’s Measurement Partner Program to determine whether or not their integration reaches subscription video on-demand (SVOD)-only streaming users, as well as view other metrics about their video ad campaign’s reach, brand perception and impact.

The series comes at a time when the streaming landscape is shifting. Today’s streaming services regularly serve up recommended content based on what their customers are watching — Netflix, for example, shows rows of popular and trending content, as well as a Top 10 list of newly popular titles. But as the number of available streaming services grows, larger entities merge, and content jumps around as licensing agreements end and start, consumers may be more in need of a set of current recommendations from across channels and services, not just those isolated inside one service.

Amazon Fire TV’s update recently addressed this need with the introduction of a new “Find” feature that aims to make it easier for users to search and browse movies, shows and free content across its platform. Roku, however, didn’t have a recommendation system of its own.

It’s also interesting to see that Roku is willing to use its proprietary streaming data in this way — something it could choose to do more with further down the road to help build out a broader set of recommendations, if it chose.

 

Boston-based Realtime Robotics this morning announced a $31.4 million round The funding is part of the $11.7 million Series A the company announced all the way back in late 2019. Investors include HAHN Automation, SAIC Capital Management, Soundproof Ventures , Heroic Ventures, SPARX Asset Management, Omron Ventures, Toyota AI Ventures, Scrum Ventures and Duke Angels.

Realtime is one of a number of startups building control on top of industrial robotics. Specifically, the startup looks to help companies deploy systems with limited programming and offering adaptable controls that work for multiple systems at once.

This round, which nearly doubles the company’s existing funding, will be used to accelerate it product development and extend its offering to more markets, globally. It comes as interest in robotics have ramped up amid the global pandemic.

“This investment by some of the world’s leading manufacturers and automation providers stands as a testament to our ability to dramatically improve the value proposition for robotic implementations,” CEO Peter Howard says in a release. “Having already realized early deployment success, a broad spectrum of customers and partners are working closely with us to refine features and user experiences, readying our technology for rollouts in their engineering, factory and warehouse operations.”

The company’s offerings serve a wide range of different industrial robotics tasks, including pick and place machines, packaging and palletizing boxes.

Early-stage startups are increasingly looking for alternative ways to access capital, meaning not every company wants to raise money from VCs or take on debt.

In recent years, a flurry of startups have emerged to give companies other options. (Think Pipe, for example.)

And today, San Francisco-based Architect Capital is a new firm that is launching with over $100 million in funds to serve as an “asset-based lender” to “high-growth,” early-stage tech companies. Specifically, the new firm aims to provide non-dilutive or less-dilutive financing options to asset-rich fintech, e-commerce and SaaS companies in the U.S. and Latin America, but with an emphasis on the latter. The region, Architect maintains, does not have a plethora of institutional financing available against assets.

The firm is not out to replace traditional venture capital or venture debt, emphasizes founder and CEO James Sagan, but rather to offer asset-based products that will complement them.

For some context, Sagan is no stranger to the startup world, having co-founded and served as managing partner of Arc Labs, an early-stage credit fund focused on lending to technology-enabled businesses. He’s been investing in Latin America for years, and recognized the need for new forms of financing to fund “novel and underappreciated assets.”

Also, he believes the region is home to “the most prominent fintech ecosystem in the world.”

To Sagan, traditional forms of equity and debt financing in the venture world are vital for things like growing headcount, but he believes they are “not engineered to support the growth of a company’s underlying financial products.”

“VC is highly dilutive and should be used for ROI activities such as hiring engineers and building great teams,” Sagan told TechCrunch. “It’s expensive to use equity to fund assets. Equity should not be put in a loan book. We’ll fund the loan book.”

Architect’s goal is to provide “tailored and less dilutive funding,” especially to companies that produce repeatable revenues, such as SaaS and subscription businesses. 

Sagan said he first discovered the strategy in 2015 when he was working for a multifamily office that was lending against a bunch of traditional assets.

“A colleague and good friend of mine started a business and raised some equity and venture debt, but he couldn’t find the asset-specific financing for the receivables he was generating,” Sagan recalls. “He was lending to small businesses and needed asset-specific financing against those receivables.”

Venture debt doesn’t really work for receivables-based lending because venture debt shops typically are underwriting assets, or rather, underwriting the quality of the investors in the company, Sagan believes.

“So we really tailor our underwriting towards those assets themselves right and those assets range from unsecured consumer receivables to secure small business receivables to real estate,” he told TechCrunch. “Essentially, we’re providing an additional instrument for asset-heavy businesses that will allow them to scale in a way that venture debt will not.”

Architect’s LPs are mostly large institutions, as opposed to traditional high net worth individuals. The firm’s average check size will land at around $10 million to $15 million.

“Our portfolio allocation is more concentrated in general,” Sagan said. “We expect to grow our AUM (assets under management) pretty precipitously.”

Architect Capital has invested in six companies since inception, including PayJoy, a company that delivers consumer financing and smartphone technology to customers in emerging markets; Forum Brands, a U.S.-based e-commerce marketplace aggregator; and ADDI, a fintech that aims to give Colombian consumers access to fair and affordable credit through point-of-sale-financing that recently raised $65 million.

Nextdoor, the app that helps neighbors connect, launched a new feature called Free Finds today, which will help people browse the free items available in their neighborhoods. Since the start of 2020, monthly listings to buy, sell, and give away items on Nextdoor have increased by 80%, but 25% of these listings advertised free stuff. So, the company decided to create a more streamlined way to get the word out about cool, free stuff on the curbs of your neighborhood.

You don’t have to be a member of Nextdoor to scroll through the free listings. Typically, becoming a member can be a complicated process that requires you to verify your home address via snail mail. But now, whether you’re looking for a free blender or seeking your next trash-to-treasure upcycle project, you can browse what’s up for grabs in your neighborhood.

To contact the seller, you need to set up a free account and go through the standard Nextdoor sign-up process. If your cell service billing address is at the same address where you live, the sign-up process is quick – you can verify your address via text. But, if the addresses don’t match (read: if you’re still on your parents’ family plan), it can take up to ten days to receive an invitation letter to become a verified Nextdoor member. By then, that lightly worn pair of boots might be long gone.

If you live in a densely populated area, you can probably find a neighborhood “free and for sale”-themed group pretty easily on Facebook. But, at the outset, Nextdoor adds a level of functionality by filtering items into categories, like “for young ones,” “for plant parents,” “spoil your pets,” and “hidden treasures.” It could also appeal to those who don’t want to deal with browsing through multiple Facebook groups, including those that  stretch beyond their neighborhood to nearby areas that would require a commute.

Nextdoor emphasizes the environmental benefits of a feature like Free Finds, which can help neighbors reduce waste when they discard perfectly usable items – instead, they can share resources with their neighbors. But more broadly, Free Finds is about leveraging people’s interest in free stuff to grow Nextdoor’s user base.

It also comes at a time when Facebook is threatening Nextdoor more directly. The tech giant launched its Neighborhoods feature in Canada last month, which is an obvious Nextdoor clone (Facebook copying other social media apps? Stop me if you’ve heard this one before). The feature should roll out soon for U.S. users.

Over the last year, Nextdoor has launched multiple initiatives that aim to support communities, like Sell For Good, which allowed users to sell items on the social network and donate proceeds to nonprofit causes. In response to the coronavirus outbreak, it also added features like Help Maps, Groups, a fundraising option for local businesses, and a neighborly assistance program created with Walmart.

Still, some consumers have become understandably skeptical of neighborhood-based social media apps. The Black Mirror-adjacent crime-reporting app Citizen recently came under fire when its CEO Andrew Frame bribed users with $30,000 to catch an arsonist using the app’s new livestreaming service, but had targeted the wrong person. Nextdoor, meanwhile, had in the past developed such reputation for racial profiling, that the company eventually had to roll out special tools to address this. Today, it still faces accusations of allowing unneighborly behavior, including political discussions and other posts that can make minority groups feel unwelcome or even unsafe.

Ultimately, investing in new products that encourage the opposite behavior — neighbors helping neighbors, as Free Finds offers — can only go so far to combat the app’s reputation.

The new Free Finds feature is live today in all the countries where Nextdoor operates at either nextdoor.com/freefinds or by visiting the Nextdoor Finds section in the Nextdoor app.

Japanese multinational conglomerate Fujifilm has been forced to shut down parts of its global network after falling victim to a suspected ransomware attack.

The company, which is best known for its digital imaging products but also produces high tech medical kit including devices for rapid processing of COVID-19 tests, confirmed that its Tokyo headquarters was hit by a cyberattack on Tuesday evening.

“Fujifilm Corporation is currently carrying out an investigation into possible unauthorized access to its server from outside of the company. As part of this investigation, the network is partially shut down and disconnected from external correspondence,” the company said in a statement posted to its website.

“We want to state what we understand as of now and the measures that the company has taken. In the late evening of June 1, 2021, we became aware of the possibility of a ransomware attack. As a result, we have taken measures to suspend all affected systems in coordination with our various global entities.

“We are currently working to determine the extent and the scale of the issue. We sincerely apologize to our customers and business partners for the inconvenience this has caused.”

As a result of the partial network shutdown, Fujifilm USA added a notice to its website stating that it is currently experiencing problems affecting all forms of communications, including emails and incoming calls. In an earlier statement, Fujifilm confirmed that the cyberattack is also preventing the company from accepting and processing orders. 

Fujifilm has yet to respond to our request for comment.

While Fujifilm is keeping tight-lipped on further details, such as the identity of the ransomware used in the attack, Bleeping Computer reports that the company’s servers have been infected by Qbot. Advanced Intel CEO Vitali Kremez told the publication that the company’s systems were hit by the 13-year-old Trojan, typically initiated by phishing, last month.

The creators of Qbot, also known as QakBot or QuakBot, have a long history of partnering with ransomware operators. It previously worked with the ProLock and Egregor ransomware gangs, but is currently said to be linked with the notorious REvil group.

“Initial forensic analysis suggests that the ransomware attack on Fujifilm started with a Qbot trojan infection last month, which gave hackers a foothold in the company’s systems with which to deliver the secondary ransomware payload,” Ray Walsh, digital privacy expert at ProPrivacy, told TechCrunch. “Most recently, the Qbot trojan has been actively exploited by the REvil hacking collective, and it seems highly plausible that the Russian-based hackers are behind this cyberattack.”

REvil, also known as Sodinokibi, not only encrypts a victim’s files but also exfiltrates data from their network. The hackers typically threaten to publish the victim’s files if their ransom isn’t paid. But a site on the dark web used by REvil to publicize stolen data appeared offline at the time of writing.

Ransomware attacks have been on the rise since the start of the COVID-19 pandemic, so much so that they have become the biggest single money earner for cybercriminals. Threat hunting and cyber intelligence firm Group-IB estimates that the number of ransomware attacks grew by more than 150% in 2020, and that the average ransom demand increased more than twofold to $170,000.

At the time of writing, it’s unclear whether Fujifilm has paid any ransom to the hackers responsible for the attack on its systems.

The governing party of the UK has been fined £10k by the national data protection watchdog for sending spam.

The Information Commissioner’s (ICO) Office has sanctioned the Conservative Party following an investigation triggered by complaints from 51 recipients of unwanted marketing emails sent in the name of prime minister, Boris Johnson.

The emails in question were sent during eight days in July 2019 after Johnson had been elected as Party leader (and also therefore became UK PM) — urging the recipients to click on a link that directed them to a website for joining the Conservative Party.

Direct marketing is regulated in the UK by PECR (the Privacy and Electronic Communications Regulations) — which requires senders to obtain individual consent to distribute digital marketing missives.

But the ICO’s investigation found that the Conservative Party lacked written policies addressing PECR and appeared to be operating under the misguided assumption that their “legitimate interests” overrode the legal requirements related to sending this type of direct marketing.

Our relationship with fashion has changed, not just because of the pandemic. Months in lockdown means people are probably more aware of their fashion purchases and how they consume, given its been such a long time without socialising. But the oft-talked about ‘Clueless wardrobe’ which would allow women to both see into their collections, as well as share and potentially borrow from friends, has yet to go mainstream. Now a UK startup aims to change this.

The Little Black door app, previously in closed beta, has just launched on the Apple iOS store here and on Android.

The app allows women to share the content of their wardrobes, in an Instagram-like manner by creating collections (“Lookbooks”), as well as curating their private wardrobe for their own use, with a focus on premium and luxury fashion. Women, says LBD, can “see, style and share”, as well as borrow clothes offline, and resell them.

The Lookbook feature allows women to share wardrobes collections with friends or followers in a controlled way, a feature that lets users borrow from each other.

Co-founder Lexi Willetts tells me: “We’d simply gotten to a point where we didn’t know what fashion we owned, given that almost every other area of life allows this. Most fashion can be easily dash-boarded on our phones – we couldn’t understand why our wardrobe wasn’t! Equally the effort required to list an item on resale was also super hard.”

Willetts and co-founder Marina Pengilly came up with the app when they realized they could make as much as £30,000 a year reselling their luxury clothes and accessories online. LBD is going after four key trends: the rise of resale (Depop etc); rentals like Rent the Runway; AI in e-commerce; and re-receipts.

Users upload their wardrobe by taking a photo of an item. The app will then recognize the item using computer vision. Lookbooks showcasing fashion collections, new and old also have an “I have this” button, allowing users to add items to their own wardrobes, or add as they buy automatically via links to retailers.

Another key feature allows users to see into their own wardrobes to see what they have, and, crucially, see how much they’ve spent, and own, in value.

Users can also create a Lookbook, not unlike on Pinterest, which can be shared with friends or a wider fashion community in a public or private group-controlled way. Lookbooks can be shared with a user’s network to allow them to see your style, or borrow the outfit in real life. As well as this, LBD itself also curates a feed of fashion/lifestyle news and surveys.

Willetts says partnerships with retailers and supplier deals for sales and fashion repairs are also in the offing.

LBD competes with the ‘Save Your Wardrobe’ app.

But is pushing the fact that it places a greater emphasis on sharing the wardrobe as well also allowing people to borrow items, with this focus on premium and luxury fashion – ADD …this is a truly social wardrobe.

The business model is likely to be a Premium version that unlocks extra features, affiliate revenues, advertising, and resale commissions.

Disclosure: Mike Butcher was an early, informal, adviser.

Ford is adding a new entry-level truck called Maverick to its lineup as the automaker seeks to offer pickups at every price level in this increasingly competitive market.

The company said Thursday it will debut the vehicle June 8, including on its new Tiktok channel. Little was seen of the vehicle, just a one second glimpse of it in a teaser ad on YouTube. From the photo, it is obviously a Ford and a compact one. The rest of the details will have to wait until next week, unless they’re leaked between now and then.

In Ford pickup hierarchy, that means the Maverick will sit under the mid-sized Ranger and F series models. The Ranger XL, the most affordable of the trims, starts at about $25,070 before destination fees. That means the Maverick should start at least few thousand dollars below that figure.

The automaker didn’t provide any more details about if it would be a hybrid, electric or gas-powered vehicle. However, noting the direction Ford has taken recently with the hybrid F-150 and the recently revealed all-electric F-150 Lightning, it’s likely that there will at least be a hybrid version offered.

As a reminder, the Ford F-150 is the profitable cornerstone of the U.S. automaker’s business. By adding in an electric sibling to the lineup it seemed like perhaps all the boxes had been ticked. But Ford wants to capture that entry level market of customers who want a pickup that is affordable and more suitable for city living.