Author: azeeadmin

Duolingo CEO and co-founder Luis von Ahn was tired of the gray and dreary design aesthetic edtech companies used to emulate universities. Instead, he and the company’s early team sought inspiration from games like Angry Birds and Clash Royale, looking to build a class that screamed more cartoon anarchy than lecture hall. From that frenetic creativity came the company’s distinctive mascot: a childish and rebellious evergreen-colored owl named Duo.

Duolingo didn’t just throw out the old colors though — it wanted to completely rethink language learning from the bottom up for mobile. So it replaced top-down curriculums with analytics-driven growth strategies, becoming consumed by an ethos that has more recently been dubbed product-led growth.

Used by companies such as Calendly, Slack and Dropbox, product-led growth is a strategy in which a company iterates its product to create loyal fans-turned-customers who popularize the product with others, creating a viral growth loop. It’s an attractive route because it vastly lowers the cost of acquiring users while also increasing engagement and thus retention. Duolingo, for example, has taken this model and found ways to embed engagement hooks, pockets of joy and addictive education features within its core app.

With early venture capital in its pocket, Duolingo could afford to focus on product over profits.

In part one of this EC-1, we explored how von Ahn’s previous products around CAPTCHA led to Duolingo’s launch, the rise and fall of crowdsourced translation as a way to disrupt language learning, and the accidental iteration of a top education app by a pair of interns. The startups’ early signs of success gave it energy to focus on growth to accomplish two things: know what they’re doing works, and garner a lot of user data so it continued iterating the product into something that was ever more addicting to use.

Now, we’ll analyze how Duolingo used product-led growth as a lever to expand its consumer base, and how a company built on gamification tries to balance its whimsy with education outcomes.

Duo, Duolingo’s mascot, flying around. Image Credits: Duolingo

From Angry Birds to an amusing and sometimes scowling owl

Tyler Murphy, having graduated from his intern position at Duolingo launching the company’s iOS app, noticed that the gaming world was rapidly innovating around him in the mid-2010s. Angry Birds was no longer the only popular game on mobile, and video games generally were getting more engaging, with in-app currencies, progress bars and an experience that felt creatively addictive. He suddenly saw connections between the entertainment that games provided and the patient learning required for languages.

“Wouldn’t it be cool if the skill got harder and harder, kind of like how a character in a game gets more powerful and powerful?” he remembers asking. Duolingo had taken early inspiration from Angry Birds as well as Clash Royale later, following that game’s launch in 2016. “Half the people at Duolingo were playing Clash Royale, at some point,” he said. “And I think that shaped our product roadmap a lot and our design language a lot.”

Games solved a problem that was acutely personal for Murphy. The employee, who would go on to become chief designer at Duolingo, had gone to college to teach Spanish to students, but ultimately left the field after struggling to inspire kids in a classroom setting. The realization that Duolingo could borrow from gaming instead of monotonous edtech companies gave an adrenaline rush — and permission — to the team to experiment with new approaches to learning.

Every game needs some form of experience points and leveling up, and for Duolingo learners, that progress comes in the form of skill trees.

These trees, which were conceived by a design agency during the company’s early development, are Duolingo’s core experience, a visual representation of language skills that are interconnected and get progressively more difficult and refined over time. Each skill is a prerequisite for another. Sometimes it’s just logic: in order to be able to speak about restaurants, you probably should be able to introduce yourself first. Sometimes, however, it’s a necessary building block: in order to speak about your routine, you should be able to speak about basic everyday activities.

In Duolingo, each unit has its own suite of skills, each of which is broken down into five lessons. Once you complete all five lessons, you can move to the next skill. Complete all skills and you can move to the next unit. Depending on the language, a user might encounter an average of 60 skills across nine different units within a course.

Duolingo Skill Tree UX in 2012. Image Credits: Duolingo

Duolingo Skill Tree UX in 2021. Image Credits: Duolingo

The growth power of a cartoon owl meme

Duolingo had its “leveling up” model figured out, but now it had to integrate gamification into every nook and cranny of its app. One of its first challenges was rebuilding the sort of teacher-student emotional bond that can help students stay motivated to learn. No one likes to fail, and Duolingo stumbled upon a scalable approach through its cartoon owl mascot Duo — also thought of by the design agency behind the skill trees.

Whenever users succeed or fail at their lessons today, they are likely to be encouraged or admonished by Duo’s presence. Designers sprinkled Duo throughout the product, looking at Super Mario Brothers as an example of how to use iconic art to create a friendly gaming experience. In early iterations of the app, Duo was present but static, more of an icon than a personality. That changed as the company increasingly pushed harder on engagement.

As its meandering route to monetization will demonstrate, Duolingo isn’t mission-oriented, it’s mission-obsessed.

Co-founders Luis von Ahn and Severin Hacker never wanted to charge consumers for access to Duolingo content, a purpose imbued throughout the company’s culture. For years in order to work at Duolingo, you had to be comfortable with joining a company in Pittsburgh that was in no rush to make money. The startup, filled with education enthusiasts and mission-driven employees, became “very college pizza vibes,” Gina Gotthilf, former VP of Marketing at Duolingo, described. Everyone was against making money and having structure — some employees even threatened to quit if Duolingo ever charged a cent to users.

“One thing that recruited me was this brilliance that we can kill two birds with one stone,” she said, referring to Duolingo’s original translation-service business model we talked about in part one of this EC-1. “It was obviously tied to Luis’ thinking and reCAPTCHA and it was magical and brilliant.”

Free may not have paid the bills, but it did come with a valuable upside: growth. By 2017, Duolingo would boast having 200 million users, which was double von Ahn’s goal when he first launched to the public on the TechCrunch Disrupt stage.

Duolingo launched saying it would never do advertisements, subscriptions or in-app purchases — approaches that now all exist on the platform. Today, Duolingo has a simple freemium business model that is remarkably unconventional. It has a free version with all of its learning content, and it charges a subscription of $6.99 per month for paywalled features such as unlimited hearts, no advertisements and progress tracking. It also has a number of other revenue streams it’s developing, such as language proficiency tests.

As we’ll explore, Duolingo’s route from anti-business rebel to conventional consumer subscription is complex, full of twists and turns. While Duolingo never wanted to look like other edtech companies, as we saw with its product strategy in part two, it turns out that evolving from college pizza vibes meant that it would have to take a page from its peers.

Duocon, Duolingo’s new conference to celebrate education and language. Image Credits: Duolingo

Business only speaks one language: Money

“They had users and in Silicon Valley, there was this notion that if you have users, you can turn anything into money,” said Bing Gordon, the Kleiner Perkins Caufield & Byers (KPCB) partner who led Duolingo’s $20 million Series C in 2014.

“This was not very controversial back then, at least with investors,” von Ahn said. “This became controversial for us once we raised a ton of money, and we still weren’t making more money.”

While the company’s investors were relatively lenient in the early years, patience was starting to run thin. In June 2015, Duolingo raised a $45 million Series D round led by Laela Sturdy of Google Capital (later rebranded CapitalG), valuing the company at $470 million. She invested because of Duolingo’s growth and engagement numbers, but confronted von Ahn with some direct advice.

“She said to me, ‘Look, it worked for you to continue getting bigger and bigger checks from venture capital,’” von Ahn said. “‘But this is the last time it works for you … if you’re trying to con people, you cannot con anybody bigger than us [at Google].’” Duolingo’s valuation wouldn’t just be at stake next time it went fundraising on Sand Hill Road — its very survival would be as well.

Looking back, Sturdy said that she always “had confidence that they would come up with a revenue model” because of Duolingo’s passionate and organic users.

When a startup chooses to raise venture capital, it sets itself on a heavily-prescribed course. Suddenly, success isn’t defined merely as cash-flow breakeven with a long-term sustainable business. It has to be an exit of some sorts, and a big one at that. While Duolingo used venture as a lifeline to fund its product development, venture also came with pressure to become a billion-dollar company, or more. And that meant making revenue, not just growing engagement.

Von Ahn says his conversation with Sturdy is what really changed his mindset about money. After the Google check hit Duolingo’s bank account, he and Hacker began thinking about ways to make Duolingo as much a monetary success as it had been an educational one.

Duolingo’s Pittsburgh HQ. Image Credits: Duolingo

Dr. Ahn or: How I learned to stop worrying and love the revenue(s)

“It was clear that Luis didn’t have commercial instincts, he had cultural instincts and a deep focus on learning,” said Gordon. “[When we invested] Duolingo predicted it was on the verge of revenue growth, and it turned out it was not on the verge of revenue growth.”

What Gordon is alluding to was a litany of monetization attempts in Duolingo’s past. Translation, which helped von Ahn’s previous two startups, didn’t work when applied to language-learning services, and the company only secured two customers before ending the service. Business partnerships, such as a relationship with Uber to certify and train drivers in Brazil to speak English, didn’t catch fire.

Duolingo has been wildly successful. It has pulled in 500 million total registered learners, 40 million active users, 1.5 million premium subscribers and $190 million in booked revenues in 2020. It has a popular and meme-ified mascot in the form of the owl Duo, a creative and engaging product, and ambitious plans for expansion.There’s just one key question in the midst of all those milestones: Does anyone actually learn a language using Duolingo?

“Language is first and foremost a social, relational phenomenon,” said Sébastien Dubreil, a teaching professor at Carnegie Mellon University. “It is something that allows people to make meaning and talk to each other and conduct the business of living — and when you do this, you use a tone of different kinds of resources that are not packaged in the vocabulary and grammar.”

Duolingo CEO and co-founder Luis von Ahn estimates that Duolingo’s upcoming product developments will get users from zero to a knowledge job in a different language within the next two to three years. But for now, he is honest about the limits of the platform today.

“I won’t say that with Duolingo, you can start from zero and make your English as good as mine,” he said. “That’s not true. But that’s also not true with learning a language in a university, that’s not true with buying books, that’s not true with any other app.”

Luis von Ahn, the co-founder of Duolingo, visiting President Obama in 2015. Image Credits: Duolingo

While Dubreil doesn’t think Duolingo can teach someone to speak a language, he does think it has taught consistency — a hard nut to crack in edtech. “What Duolingo does is to potentially entice students to do things you cannot pay them enough time to actually do, which is to spend time in that textbook and reinforce vocabulary and the grammar,” he said.

That’s been the key focus for the company since the beginning. “I said this when we started Duolingo and I still really strongly believe it: The hardest thing about learning a language is staying motivated,” von Ahn said, comparing it to how people approach exercise: it’s hard to stay motivated, but a little motion a day goes a long way.

With an enviable lead in its category, Duolingo wants to bring the quality and effectiveness of its curriculum on par with the quality of its product and branding. With growth and monetization secured, Duolingo is no longer in survival mode. Instead, it’s in study mode.

In this final part, we will explore how Duolingo is using a variety of strategies, from rewriting its courses to what it dubs Operation Birdbrain, to become a more effective learning tool, all while balancing the need to keep the growth and monetization engines stoked while en route to an IPO.

Duolingo’s office decor. Image Credits: Duolingo

“Just a funny game that is maybe not as bad as Candy Crush.”

Duolingo’s competitors see the app’s massive gamification and solitary experience as inherently contradictory with high-quality language education. Busuu and Babbel, two subscription-based competitors in the market, both focus on users talking in real time to native speakers.

Bernhard Niesner, the co-founder and CEO of Busuu, which was founded in 2008, sees Duolingo as an entry-level tool that can help users migrate to its human-interactive service. “If you want to be fluent, Duolingo needs innovation,” Niesner said. “And that’s where we come in: We all believe that you should not be learning a language just by yourself, but [ … ] together, which is our vision.” Busuu has more than 90 million users worldwide.

Duolingo has been the subject of a number of efficacy studies over the years. One of its most positive reports, from September 2020, showed that its Spanish and French courses teach the equivalent of four U.S. university semesters in half the time.

Babbel, which has sold over 10 million subscriptions to its language-learning service, cast doubt on the power of these findings. Christian Hillemeyer, who heads PR for the startup, pointed out that Duolingo only tested for reading and writing efficacy — not for speaking proficiency, even though that is a key part of language learning. He described Duolingo as “just a funny game that is maybe not as bad as Candy Crush.”

Putting the ed back into edtech

One of the ironic legacies of Duolingo’s evolution is that for years it outsourced much of the creation of its education curriculum to volunteers. It’s a legacy the company is still trying to rectify.

The year after its founding, Duolingo launched its Language Incubator in 2013. Similar to its original translation service, the company wanted to leverage crowdsourcing to invent and refine new language courses. Volunteers — at least at first — were seen as a warm-but-scrappy way to bring new material to the growing Duolingo community and more than 1,000 volunteers have helped bring new language courses to the app.

With Verizon’s long-anticipated sale of its media business now finally in progress — by way of a deal, announced earlier today, with private equity firm Apollo paying $5 billion for Yahoo, AOL, and the many various internet brands and services that are part of the operation (including us, TechCrunch) — the next very likely question is, what comes next?

Hans Vestberg, the CEO of Verizon, laid out a taste of what is to come: commerce, content and betting.

In an internal memo to employees, Vestberg said that Apollo’s “powerful vision” will be not just playing on revenue-generating businesses that have been grown out as a part of Verizon Media, but leveraging that to work with other assets that Apollo has in its portfolio, which include a pretty wide range of companies in the TMT sector such as Rackspace and Charter Communications, as well as a ton of other kinds of companies across retail, financial services, industrial and manufacturing, and more.

That could involve more advertising or sales customers — Claire’s, the accessories chain is also in the Apollo mix — or something else altogether.

“What made Apollo’s offer so appealing, is that it includes leveraging the entire Verizon Media ecosystem of adtech, affiliate relationships, data, insights, targeting and reach,” Vestberg said.

You can read a bigger analysis of the deal here. The full memo is below.

V Team,

Moments ago we made an important announcement. We’ve entered into an agreement with a leading global investment manager, Apollo, to acquire Verizon Media. While this is a bittersweet moment, Verizon will maintain a minority stake in the new company, which upon deal closing will be called Yahoo.

This is a big step forward for our Media team. A team that delivered an incredible turnaround these past 2.5 years – capped off by the last 2 quarters of double digit growth. This move will help accelerate that growth.

After a strategic review, Guru and I discussed, and believed, that the full value of Media’s offerings have yet to be unlocked. Apollo has a powerful vision that includes aggressively pursuing growth areas in commerce, content and betting. One that also features synergies with many of the traditional brick and mortar companies in their portfolio who can benefit from Media’s e-commerce platform. What made Apollo’s offer so appealing, is that it includes leveraging the entire Verizon Media ecosystem of adtech, affiliate relationships, data, insights, targeting and reach.

I believe this move is right for all of our stakeholders including the Media employees. Our purpose is to create the networks that move the world forward, and this will help us better focus all our energy and resources on our core competencies.

I couldn’t be more proud of the work that Guru, his leadership team, and the entire Media team of “Builders” has done to get to this point. In fact, it’s important to note that Guru will continue in his current leadership role.

As a reminder, as with any deal like this, the transition will take time to complete. It’s important that we continue to stay focused on our ongoing work together, across all our business units and continue to deliver the best customer experiences we are known for.

This is but one more chapter in an iconic and storied brand. I am excited about where they will take the new Yahoo.

Hans V.

With Verizon’s long-anticipated sale of its media business now finally in progress — by way of a deal, announced earlier today, with private equity firm Apollo paying $5 billion for Yahoo, AOL, and the many various internet brands and services that are part of the operation (including us, TechCrunch) — the next very likely question is, what comes next?

Hans Vestberg, the CEO of Verizon, laid out a taste of what is to come: commerce, content and betting.

In an internal memo to employees, Vestberg said that Apollo’s “powerful vision” will be not just playing on revenue-generating businesses that have been grown out as a part of Verizon Media, but leveraging that to work with other assets that Apollo has in its portfolio, which include a pretty wide range of companies in the TMT sector such as Rackspace and Charter Communications, as well as a ton of other kinds of companies across retail, financial services, industrial and manufacturing, and more.

That could involve more advertising or sales customers — Claire’s, the accessories chain is also in the Apollo mix — or something else altogether.

“What made Apollo’s offer so appealing, is that it includes leveraging the entire Verizon Media ecosystem of adtech, affiliate relationships, data, insights, targeting and reach,” Vestberg said.

You can read a bigger analysis of the deal here. The full memo is below.

V Team,

Moments ago we made an important announcement. We’ve entered into an agreement with a leading global investment manager, Apollo, to acquire Verizon Media. While this is a bittersweet moment, Verizon will maintain a minority stake in the new company, which upon deal closing will be called Yahoo.

This is a big step forward for our Media team. A team that delivered an incredible turnaround these past 2.5 years – capped off by the last 2 quarters of double digit growth. This move will help accelerate that growth.

After a strategic review, Guru and I discussed, and believed, that the full value of Media’s offerings have yet to be unlocked. Apollo has a powerful vision that includes aggressively pursuing growth areas in commerce, content and betting. One that also features synergies with many of the traditional brick and mortar companies in their portfolio who can benefit from Media’s e-commerce platform. What made Apollo’s offer so appealing, is that it includes leveraging the entire Verizon Media ecosystem of adtech, affiliate relationships, data, insights, targeting and reach.

I believe this move is right for all of our stakeholders including the Media employees. Our purpose is to create the networks that move the world forward, and this will help us better focus all our energy and resources on our core competencies.

I couldn’t be more proud of the work that Guru, his leadership team, and the entire Media team of “Builders” has done to get to this point. In fact, it’s important to note that Guru will continue in his current leadership role.

As a reminder, as with any deal like this, the transition will take time to complete. It’s important that we continue to stay focused on our ongoing work together, across all our business units and continue to deliver the best customer experiences we are known for.

This is but one more chapter in an iconic and storied brand. I am excited about where they will take the new Yahoo.

Hans V.

Building and sustaining a startup is as challenging as it is fulfilling. Doing it during a global pandemic takes unprecedented (oy, there’s that word again) ingenuity, support and expert insight. You’ll find all of that and more at TC Disrupt 2021 on September 21-23.

A shut-the-front-door moment: Want to access all the expert advice, networking, community connection and potential growth opportunities for less than $100? Heck yeah. You have just two left weeks to score the super early-bird price. Buy your pass to Disrupt 2021 before the deadline expires on May 13, 11:59 pm (PST).

Every TC Disrupt features one-on-one interviews, presentations and breakout sessions with tech titans, fascinating founders, top-tier VCs and countless other subject-matter experts spanning the tech ecosystem. We’re building a righteous roster of speakers, and we’ll be announcing them in the coming weeks.

Here’s one example we can share today. Luis von Ahn co-founded Duolingo, a gamified language-learning app used by hundreds of millions around the world. And get this — von Ahn debuted Duolingo on the Disrupt stage nine years ago. He might have a few helpful hints, amirite?

Show of hands — who can’t wait for Startup Battlefield? If you think you have what it takes to win this famously epic global pitch competition, apply right here. Take your shot and you might just walk away with $100,000. Every competing team benefits from intense media and investor exposure. Not ready to throw down? That’s cool — you can learn a lot just by watching the pitches and hearing the questions posed by leading VC judges.

Speaking of Startup Battlefield judges. So far, we’ve tapped Sydney Thomas (Precursor Ventures), Alexa von Tobel (Inspired Capital) and Terri Burns (GV) — with more to come. These folks know their stuff, so get ready to impress the best.

Don’t forget about Startup Alley. We’ve supercharged the exposure opportunities for exhibitors in our virtual expo, including a chance to participate in Startup Alley+ — read about the new Startup Alley benefits and opportunities. Beat the super early bird deadline (only two weeks left!) and you’ll save $100 on a Startup Alley Pass.

Why should you attend Disrupt? Rachael Wilcox, a creative producer at Volvo Cars, tells us why she keeps coming back.

I love Disrupt because it features incredible companies. My work exposes me to lots of companies all over the world but, inevitably, I run across startups at Disrupt I haven’t heard of yet. It’s always fascinating to explore opportunities and find ways to work together.

TC Disrupt 2021 takes place on September 21-23. Come find the inspiration, opportunities and expert information you need to drive your business forward. And you’ll find it for less than $100 — if you buy your pass before May 13, 11:59 pm (PST).

Is your company interested in sponsoring or exhibiting at Disrupt 2021? Contact our sponsorship sales team by filling out this form.

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.

This morning was a notable one in the life of TechCrunch the publication, as our parent company’s parent company decided to sell our parent company to a different parent company. And now we’re to have to get new corporate IDs, again, as it appears that our new parent company’s parent company wants to rebrand our parent company. As Yahoo.

Cool.

Anyway, a bunch of other stuff happened as well:

• Flywire, a Boston-based payments company filed to go public. More on the site about this shortly.
• Earnings this week are coming from Uber and Lyft and PayPal and Square and more.
• Dell is offloading Boomi to private equity as it wants to de-lever. Again.
• Cloud market share numbers are out, but what matters is that the growth of the cloud market helps explain the growth that we’re seeing in the startup game. (Our own Ron Miller dug into some rival cloud metrics here.)
• The Chinese government’s crackdown on its tech giants continues. And it’s impacting valuations.
• And Wealthsimple raised an epic CAD$750 million round, while Ohio-based Path Robotics just raised a $56 million Series B. Super cool.

We’re back Wednesday with something special. Chat then!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!

Clubhouse, the voice-based networking app that’s now being knocked off by every major tech platform, is bringing its service to Android. The company announced during its weekly Townhall event that its Android version has entered beta testing with a handful of non-employees who will provide the company with early feedback ahead of a public launch.

In its release notes, Clubhouse referred to this test as involving a “rough beta version” that’s in the process of being rolled out to a group of “friendly testers.” That means there’s not a way for the broader public to sign up for the Android app just yet.

The lack of an Android client combined with its invite system initially gave Clubhouse an aura of exclusivity. You had to know someone to get in, and then you would need an iOS device to participate. But the delay to provide access to Android users also gave larger competitors time to catch up with Clubhouse and court users who were being left behind. One of the largest of the rivals, Facebook, recently challenged Clubhouse across all its platforms and services, in fact.

Facebook announced a full audio strategy that included a range of new products, from short-form audio snippets to a direct Clubhouse clone that works across Facebook and Messenger. It also announced a way for Instagram Live users to turn off their video and mute their mics, similar to Clubhouse. Even Facebook’s R&D division tested a Clubhouse alternative, Hotline, which offers a sort of mashup between the popular audio app and Instagram Live, with more of a Q&A focus.

Meanwhile, Twitter is continuing to expand its audio rooms feature, Twitter Spaces, and there are Clubhouse alternatives from Reddit, LinkedIn, Spotify, Discord, Telegram, and others, in the works, too.

For Clubhouse, that means the time has come to push for growth — especially as there are already some signs its initial hype is wearing off. According to app store intelligence firm Apptopia, Clubhouse has seen an estimated 13.5 million downloads on iOS to date, but the number of daily downloads has been falling, mirroring a decline in the number of daily active users.

Image Credits: Apptopia

Apptopia’s data shows that Clubhouse’s daily active users are down 68% from a high in February 2021, though that doesn’t necessarily mean that Clubhouse is over — it’s just becoming less of a daily habit. However, if the company is able to build out its creator community and establish a number of popular shows, which it’s aiming to do via its accelerator, it could still see users tuning in on a weekly and monthly basis. And those sessions would be longer in comparison with some other social apps, as Clubhouse users often tune into shows that run over an hour — even leaving the app open as they do other tasks.

Plus, Clubhouse is taking aim at the challenges around re-engaging people whose usage may have dwindled in recent days. Also during its Townhall, the company announced it would introduce a bell icon for events that will allow users to be notified about the events they’ve RSVP’d to. This will be important for creators who are advertising their events, as well.

Clubhouse didn’t give a specific timeframe as to when its Android app would reach more testers or the wider public, only noting that it’s looking forward to welcoming more Android users in the “coming weeks.” In March, Clubhouse had said the Android launch would take a couple of months.

In the real world – the world on which the global economy runs – we don’t expose every aspect of our financial activity in public. We want to be able to select which parties can access our financial data and under what circumstances – for example, our credit history or bank transactions. The problem with the blockchain world is that this financial privacy doesn’t really exist. This has led to pretty bad abuses, such as the practice of front-running’ where a nefarious person can take advantage of you immediately after seeing your transaction on a public blockchain. What’s required is a real infrastructure improvement to this problem, for, without it, the Crypto ‘Shangri-la’ of ‘DeFi’ (decentralized finance) will never have a hope of taking off.

It’s therefore significant that some well-known organizations in the realm of blockchain financing are investing the equivalent of $11.5 million into SCRT, the native coin of the Secret Network blockchain. The investment was led by Arrington Capital and Blocktower Capital and also include Spartan Group, and Skynet Trading.

Previous investors in in Secret includs Outlier Ventures, Fenbushi Capital, and Hashed, as well as Secret Foundation and Enigma MPC, and node operators such as Figment and Staked.

Tor Bair, founder of Secret Foundation said: “The addition of these valuable and experienced partners to the Secret ecosystem marks a significant inflection point for Secret Network as we concentrate on expanding and supporting our fast-growing application layer.”

Secret, which used to be called Enigma before a pivot, claims to have been the first privacy-first smart contract platform. (The first version of this blockchain was called the “Enigma Mainnet,” but this branding was changed to Secret Network via a governance vote in summer 2020).

So far in 2021, the Secret Network ecosystem has launched several native applications, including SecretSwap, a “front-running resistant”, cross-chain AMM with privacy protections. It is also developing Secret NFTs.

So why is this at all significant?

Why should we care? It’s simply because, without privacy, DeFi is highly unlikely to go mainstream.

Without privacy in transactions, the traditional economic system won’t bother taking any notice of crypto and blockchain, outside of noting whether the price of bitcoin goes up or down.

Admittedly, Secret is not the only player tackling this area. It is playing in the same arena as blockchain projects such as Phala (not yet on mainnet, and built on Polkadot), Oasis, and Aleo, which recently just fundraised via Andreessen Horowitz.

What these projects all have in common is this race towards what’s known as the Web3 ‘application privacy’ space. Once again, they are trying to reproduce the kind of financial privacy that we have all come to expect from the traditional financial system, but which remains elusive in the blockchain world.

However, this approach should not be confused with privacy coins like Monero and Zcash. These are coins, and therefore not the same at all as the above-named projects, which are aiming at what’s known as ‘programmable privacy’.

Bair told me: “Transactional privacy [via privacy coins] just means hiding simple aspects of transactions from other parties – a narrow form of privacy. Smart contract privacy – what we call ‘programmable privacy’ – is a much more powerful idea, allowing developers to build complex decentralized and permissionless applications that also protect data privacy, with big consequences for Web3 security and usability. As an analogy – imagine trying to build a decentralized Facebook. Normal blockchains expose all data by default, a much worse outcome for user privacy and security. Only smart contract privacy allows you to build these types of complex applications without compromising the user experience and threatening their safety.”

Front-running is often described as getting a transaction first in line before a known future transaction occurs. Bair claims Secret protects against this at the protocol level because all interactions with smart contracts are encrypted and cannot be viewed even by the network validators, “so all DeFi applications built on Secret network are front running resistant by default” he told me.

That said, Secret will still have to compete with the myriad privacy projects already on – for instance – Ethereum, such as Automata. The Secret Network is a standalone blockchain and would still require a developer community to be successful, versus Ethereum and Polkadot, which technically have a head start, of sorts. But these blockchains are public by default. So Secret’s hyper-focus on the issue of privacy may yet make Secret a major player in this realm.

Bair commented: “Only programmable privacy can give users and developers this level of control in the DeFi world. Without programmable privacy, DeFi will never achieve mass adoption outside of purely speculative activity. Secret Network intends to become the foundation for new types of DeFi applications that better protect users while also allowing traditional institutions to participate securely, with protections for sensitive data. Also, blockchains don’t need thousands of developers to succeed in the short term – they need the right developers who build the early critical applications.”

Furthermore, Secret has in its favor the fact that due to the whole nature of decentralization of the blockchain space isn’t nearly as much a ‘winner-take-all’ environment as the general Internet has become due to the growth of the large BigTech platforms – that would be counter to the point of decentralization. As Bair told me: “Secret’s vision is to become a data privacy hub for all public blockchains, collaborating more than competing with networks like Ethereum (to which we already have a live bridge with over $100M in assets locked).”

Secret Network claims it was one of the first blockchains to feature privacy-preserving smart contracts, which it launched on mainnet in September 2020. It says this means all decentralized applications built on Secret Network have data privacy by default. The Secret Network blockchain itself is based on Cosmos SDK / Tendermint, giving it its own independent consensus, on-chain governance, and features like slashing and delegation. It is secured by the native coin Secret (SCRT), which must be staked by network validators and is used for transaction and computation fees as well as governance, said the foundation.

Commenting on the investment, Michael Arrington, founder of Arrington Capital said: “Secret is the first blockchain ecosystem to prioritize privacy. Financial privacy is critical to individual freedom, and Arrington Capital has long been committed to financial privacy and censorship resistance. The rapid expansion of Decentralized Finance makes solutions like Secret Network a timely addition to the DeFi ecosystem.” (Arrington Capital was established by Arrington, who was also previously the founder of TechCrunch, but who has no involvement in the title these days).

Jamie Burke, founder of Outlier Ventures in the UK and a Secret backer, told me: “Privacy will be essential to the security and adoption of Web3, from DeFi to NFTs and beyond. Secret Network brings new and unique privacy functionality to the space, and as a result we believe it will be foundational to the next generation of successful Web3 applications.”

Secret is also getting support from DeFi players such as the Sienna Network. Monty Munford, Chief Evangelist and Core Contributor to the privacy DeFi company told me: “Of all the networks in all the world, we chose Secret because it was a yes-yes-yes brainer. They understand privacy and we understand DeFi; it’s a match made in heaven.”

Zoomo, the Australian startup with a mission to electrify delivery fleets through e-bike subscriptions, announced a $12 million interim capital raise on Monday.

The company made a name for itself through partnerships with UberEats and DoorDash to help delivery workers access e-bikes through weekly subscriptions at discounted rates. Zoomo then grew to offer monthly subscriptions to corporate partners in Australia, the U.S. and London for last mile delivery, with a fleet that has expanded beyond 10,000 units globally.

Now, the startup hopes to expand its service outward towards continental Europe and other states across the U.S. It currently operates in New York City, San Francisco, Los Angeles and Philadelphia. Zoomo also wants to build up its consumer model, which mainly serves couriers but is extending to commuters, and will invest in the development of its next generation of vehicle offerings.

“We initially built our products to service the demands of gig workers in the food delivery industry,” Mina Nada, Zoomo CEO and co-founder said in a statement. “Their expectations for quality commercial vehicles, on demand service, flexible financing and tech enabled security features spurred us to innovate. We’re now seeing enterprises and fleet managers benefiting from the platform we have built. Enterprise fleet managers looking for clean and efficient vehicles are choosing us.”

Zoomo’s focus on e-bikes for food delivery makes it unique in the electric bike rental space. Its business model offers a full-stack e-bike, from the hardware and software to same-day servicing and financing options, which especially helps big business partners deploy and manage large fleets of vehicles at scale. It’s a tall order, and Zoomo’s strategy could be leading a new trend in micromobility of being a one-stop-shop that promises quick scalability.

German mobility software provider Wunder Mobility recently announced its efforts to offer a souped up e-moped that’s been co-designed with Chinese consumer manufacturer Yadea for the dockless sharing market. It also launched a new subsidiary to finance the vehicles, along with its software, to shared micromobility providers. Wunder Mobility plans to offer e-scooters and e-bikes for financing in the future, but it doesn’t design its own vehicles or sell them outright. While the business models and target customers don’t perfectly align, the blueprint is the same: Corner a market, provide top quality hardware and software and make it as accessible as possible.

Coronavirus spurred a demand for delivery in all industries, and we can see companies like FluidTruck and Rivian stepping up to the plate to meet the needs of eco-conscious e-commerce giants with their electric delivery vans. The online food delivery industry is no different with a market that’s expected to reach $192.16 billion in 2025 at a compound annual growth rate of 11%. But for delivery within cities, e-bikes offer a smarter solution for meeting climate change goals while dodging traffic congestion.

Zoomo’s custom designed bikes can bear more than 200 kilograms of load via various cargo options, according to a Zoomo spokesperson. For enterprise customers, like health food company Cornucopia, e-cargo delivery vehicles like a Trailer Trike or a Covered Trike are used to deliver goods sustainably. Gorillas, an on-demand grocery delivery company, and Just Eat Takeaway, acquirer of Grubhub and Seamless, are also clients of Zoomo’s.

“At Just Eat Takeaway.com, we want to build a sustainable future for food delivery, and are committed to doing our bit to help keep carbon emissions to a minimum, as well as providing an efficient customer experience from order to delivery,” said a Just Eat Takeaway spokesperson in a statement. “E-Vehicles are an integral part of the Scoober model and we are pleased to work in cooperation with Zoomo.”

Zoomo’s newest funding round, led by Australian VC AirTree, follows an $11 million Series A raised in August 2020, with support in both rounds from the Clean Energy Finance Corporation, Maniv Mobility and Contrarian Ventures. Withrop Square and Wisdom VC, mobility and clean tech-focused investors, also joined this round.