Author: azeeadmin

For IBM, much of the last 8 years simply posting positive revenue growth was a challenge. In fact, the company had a period between 2013 and 2018 when it experienced an astonishing 22 straight quarters of negative revenue growth. So when Big Blue reported yesterday that revenue was up slightly, I’m sure the company took that as a win. Investors appear to be happy with the results with the stock up 4.73% this morning as of publication.

Consider that over the last 8 quarters encompassing FY2019 and FY2020, the company had only one positive revenue quarter when it was up 0.1% in Q42019. It had had five losing quarters prior to that one. When you look at yesterday’s report in that light, and combine it with growth in the Cloud and Cognitive Services group, it adds up to a decent quarter for IBM, one it badly needed after another negative report in the prior quarter.

Looking back at the January report, the company reported Cloud and Cognitive Services revenues down 4.5% at $6.8 billion, which was a big blow considering the company has been betting much of its future on those very areas, fueled in large part by the $34 billion Red Hat acquisition in 2018.

Its most recent quarterly report proved much better with the company reporting Cloud and Cognitive Services revenues of $5.4 billion, up 3.8% YoY. Interestingly quarter-on-quarter revenue for the segment was down, but rose on a year-over-year basis. Perhaps a year-end enterprise revenue push could account for the difference between Q4 2020 and Q1 2021.

At any rate, IBM CEO Arvind Krishna saw today’s report as a positive sign that his attempts to push the company toward a future focused on hybrid computing and AI were starting to take root. He also saw enough in the report to predict some growth this year.

“In our last call, we shared our financial expectations for the year, revenue growth and $11 billion to $12 billion of adjusted free cash flow. While it’s still early in the year and a lot remains to be done, we are confident enough to say that we are on track,” Krishna said in the earnings call with analysts yesterday.

The company has made a number of smaller acquisitions over the last year including a couple of consulting companies, which should help as they try to work with customers around the transition to hybrid computing and artificial intelligence, both of which tend to require a lot of hand-holding to get done.

At the same time of course, the company is continuing apace with its spin out of the legacy infrastructure services division, which it announced last year. The plan at this point is to rename the company Kyndryl (an unfortunate choice) and complete the spin out by year’s end.

CFO Jim Kavanaugh also sees the modestly positive quarter as something the company can build on. “…in fact we are even more confident in the position we put in place with regards to our two most important measures, one, revenue growth, and second, adjusted free cash flow, which is going to provide the fuel for the investments needed for us to capture that hybrid cloud $1 trillion TAM,” Kavanaugh said in the earnings call with analysts.

All of this is being pushed by Red Hat, which grew revenue 15% in the most recent quarter, something the company is banking will continue to advance it deeper into positive territory throughout the rest of 2021.

Krishna is not looking for booming growth by any means. He just wants growth, and even sustained single digit top line expansion will make him happy. “Our systems if I take a two-year to three-year view kind of flattish, but in any given year it might increase or decrease but not by a whole lot. It doesn’t impact the topline a lot and that’s how sort of we get to the mid-single-digit sustainably,” Krishna said in the call.

The CEO simply wants to bring some long-term stability back to the company it has been sadly lacking in recent years. Of course, it’s hard to know if this quarter was a temporary upward blip on IBM’s earnings chart, one of those fluctuations up or down he spoke of, or if it is the corner the company has been looking to turn for years. Only time will tell whether IBM can sustain the modest revenue goals Krishna has set for the organization, or if it will fall back into the revenue doldrums that have plagued the company for the last eight years.

The investment landscape for insurtech startups is off to a hot start in Q2 2021. Since the end of the first quarter, we’ve seen several players in the broad startup category announce new capital, including Clearcover, Alan, Next Insurance and The Zebra.

But, as anyone who’s familiar with startups that offer insurance-related products and services knows, the sector is enough of a mixed bag that one needs to segment down to get clarity on how constituent companies are performing. So while Clearcover’s $200 million round from last week, Next Insurance’s $250 million round from the first of the month and Alan’s $220 million round from yesterday are interesting, this morning we’re going to focus a bit more on The Zebra’s side of the insurtech house. 

The Exchange explores startups, markets and money. 

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

The Exchange divides insurtech startups into three categories: neo-insurance providers, insurtech marketplaces and insurtech enablers. (You can see why we need to segment the insurtech genre!)

Briefly, neo-insurance providers are companies like Root, Metromile and Next Insurance, which use technology to underwrite and sell insurance in an updated manner; these companies also often have optimized mobile experiences.

Marketplaces like The Zebra, Gabi, Insurify and others provide a way for consumers to better identify their insurance options. And, finally, there are companies like AgentSync, which fit neatly into our third category of firms that help other companies in the insurance business digitize their operations or otherwise modernize. 

Insurtech marketplaces came back into our view when The Zebra put together a $150 million Series D earlier this month and released a host of metrics regarding its growth, and Insurify dropped the news that it is partnering with Toyota.

This morning, let’s discuss insurtech’s 2020 as a whole, peek at some preliminary 2021 venture data and then dive deep into what we’ve collected regarding growth among insurtech marketplace players. The Exchange has data and other details from The Zebra, Insurify, Wefox and more. 

Covering longitudinal progress of specific startup categories is one of our favorite things to do. So, please, walk with us!

2020 to today

PitchBook data regarding the insurtech category in 2020 underscores how large the startup niche has grown. Per the data company, $18.3 billion was spent last year on insurtech startups across venture capital, private equity and M&A activity. That was a billion dollars under its 2019 result, but given the pandemic’s onset, 2020’s final result is somewhat impressive — who expected insurance investing to hold up during an unprecedented global catastrophe?

This year is proving lucrative for the insurtech market, at least from a venture capital perspective. Normally I’d make a joke about how unprofitable some neo-insurance providers are at this juncture, but because our focus is elsewhere, bringing up the fact that, say, Lemonade’s adjusted losses in the final quarter of 2020 were around 150% of its revenue is kind of irrelevant. So we won’t!

WayUp started out as a platform to help college graduates find jobs and internships, but over time, it has increasingly focused on helping employers find diverse job candidates. And it recently introduced a new feature to help employers see exactly where their diversity and inclusion efforts may be falling short.

Co-founder and CEO Liz Wessel explained that when companies aren’t hiring enough employees from diverse backgrounds, recruiters and executives often assume “we’re not getting enough of those candidates at the top of our funnel.” That idea, she suggested, is exemplified by Wells Fargo CEO Charles Schlarf’s controversial remarks last fall, when he said the company wasn’t reaching its diversity goals because there simply aren’t enough qualified candidates.

Wessel suggested that when you take a look closer look at the data, you find that the initial outreach and recruiting is only part of the problem. WayUp’s new dashboard allows employers to tracks this, because it shows the demographic (race and gender) breakdown of the candidate pool at each part of the funnel.

For example, Wessel said that many employers hiring for technical roles discover that they’re reaching a relatively diverse candidate pool during their initial outreach, and that the pool stays diverse during the first interviews — only to become much more white and male after the technical assessments/programming tests.

Image Credits: WayUp

“Similar to the SATs, many technical assessments have high correlation to socioeconomics status,” she said.

Upon discovering this, some recruiters may choose to stop requiring these tests. Others may choose to keep them — but thanks to WayUp, at least they know where the breakdown is really happening.

After Wessel showed me the dashboard, I wondered why other hiring platforms didn’t offer something similar. In a follow-up email, she suggested that many platforms don’t realize that reaching these goals requires about more than just getting a diverse diverse pool of candidates. Plus, she said WayUp is “one of the only sourcing/job platforms that I know of that has candidates self-report their race/ethnicity, gender and veteran status (in an EEOC/OFCCP compliant way).”

She added, “We really are focusing on having our platform make it so your entire hiring process is equitable and optimizes for employers hiring a diverse workforce, [versus] putting a Band-Aid or quick fix on the issue by just sourcing more diverse candidates at the top of your funnel.”

Farshad Yousefi and Masoud Jalali used to drive through Palo Alto neighborhoods and marvel at the outrageous home prices. But the drives sparked an idea. They were not in a financial position to purchase a home in those neighborhoods (to be clear, not many people are) either for investment or to live. But what if they could invest in homes in up and coming cities throughout the U.S.?

Then they realized that even that might be a challenge considering that with all their student debt, affording a down payment would be impossible.

“There was nothing available out there besides a crowdfunding platform, which when we first signed up, took away $1,000 from our account that we didn’t have, and then our capital would be locked up for 3 to 10 years,” recalls Yousefi.

So the pair started doing research and spoke to 1,000 individuals under the age of 35. Eight out of 10 said they would like to invest in real estate but were deterred by all the barriers to entry.

“There is clearly a large demand for access to real estate,” Yousefi said. “And we wanted to give people a way to invest in it like they can in stocks, via a mobile app.”

And so the idea for Fintor was born.

Yousefi and Jalali founded the company in 2020 with the goal of purchasing homes via an LLC, and turning each into shares through a SEC-approved broker dealer. Individuals can then buy shares of the homes via Fintor’s platform. Its next step is to sign agreements with individual real estate investors or bigger real estate development firms to list their properties on the platform and give people the opportunity to buy shares.

And now Fintor has raised $2.5 million in seed money to continue building out its fractional real estate investing platform. The startup aims to “fractionalize” houses and other residential property, giving people in the U.S. access to investment opportunities “starting with as little as $5.” The company attracted the interest of investors such as 500 Startups, Hustle Fund, Graphene Ventures, Houston-based real estate investor Manny Khoshbin, Mana Ventures and other angel investors such as Cindy Bi, Skyler Fernandes, VU Venture Partners, Minal Hasan, Andrew Zalasin, Alluxo CEO and Founder Safa Mahzari, SquareFoot CEO and founder Jonathan Wasserstrum and Teachable CEO and founder Ankur Nagpal.

Image Credits: Fintor

Fintor is eying markets such as Kansas City, South Carolina, and Houston, Texas, where it already has some properties. It’s looking for homes in the $80,000 to $350,000 price range, and millennials and GenZers are its target demographic.

“Fintor can give the same return as the stock market, but at half the risk,” Yousefi said. “As two [Iranian] immigrants, we’ve seen how much this country has to offer and how real estate sits at the top of everything, yet is so inaccessible.”

The pair had originally set out to raise just $1 million but the round was quickly “way oversubscribed,” according to Yousefi, and they ended up raising $2.5 million at triple the original valuation.

Jalali said the company will use machine learning technology to filter and rate properties as it scales its business model.

“We’ll use ML to categorize neighborhoods and to come up with the price of properties to offer to potential sellers,” he added. “Our ultimate goal is to create indexes so that people can invest in multiple properties in a given city. That creates diversification right away.”

.Elizabeth Yin, co-founder and general partner of Hustle Fund, believes that Fintor is solving a generational problem with real estate.

“Retail investors have almost no access to great real estate investments today and the best opportunities are reserved for the select few,” she told TechCrunch. “Not to mention that in addition to access, retail investors often need a lot of capital in order to have a diversified portfolio or be accredited to join funds.”

Fintor’s approach to securitize real estate assets will give millions of investors who are not accredited investors access they would otherwise not have had, Yin added. 

“Simultaneously, it provides increased liquidity to property owners, while improving the user experience for both parties,” she said. “Effectively this becomes a new asset class, because it’s entirely turnkey and is fractionalized, which opens up many new pockets of investors.”

Apple’s introduction of ARKit changed the game for entrepreneurs, not unlike the App Store did on a much, much larger scale back in 2008.

One entrepreneur, Dana Loberg, has capitalized on the launch of ARKit with her startup Leo AR.

Leo is the result of a few pivots. The company first started out as MojiLala, which launched out of betaworks. It was a hassle-free sticker marketplace that allowed artists to upload their stickers and sell them through the platform for end-users to use in a number of locations.

In 2017, MojiLala released a new app called Surreal, which allowed artists to sell virtual objects to end users and lay them over their camera to record fun content. Now as Leo AR, the company is focused on 3D augmented reality objects without losing focus on giving artists an easy-to-use outlet for their virtual wares.

Today, Leo is announcing the raise of a $3 million seed round led by Great Oaks Ventures, with participation from Dennis Phelps of IVP, betaworks, Deutsch Telekom, Quake Capital, and other angel investors.

Image Credits: Leo AR

The app operates on a freemium basis, letting end users subscribe to certain artists they like on the platform. Leo takes a 30 percent cut on those purchases, but Loberg said that her main priority beyond generating revenue is ensuring that artists get paid well and are incentivized to create and sell through her platform.

Loberg also shared that the app has exploded in popularity among children, who enjoy creating videos with dinosaurs or dragons in them.

In fact, Leo users have created more than 8 million videos on the platform, and active users add more than 85 3D objects to their scenes and average 10+ minutes in the app when they use it.

Leo not only lets users distribute their content out to other platforms like Instagram, but it also has a feed of the best videos created in Leo for others to check out.

As AI gets stronger, the possibilities of what we can do with it grow exponentially (for better or worse). Synthesia, an AI video generation platform, is looking to make video content creation as simple and efficient as possible, and FirstMark is taking a bet on it.

The company has just announced the close of a $12.5 million Series A funding round led by FirstMark Capital, with participation from angels Christian Bach (CEO, Netlify) and Michael Buckley (VP Communications, Twilio), as well as existing investors LDV Capital, MMC Ventures, Seedcamp, Mark Cuban, Taavet Hinrikus, Martin Varsavsky, and TinyVC.

Though Synthesia’s technology could be applied to dozens of use cases, the startup is focused initially on educational content for organizations and enterprises. Think training videos and company- or department-wide video updates.

Here’s how it works:

Users can choose from a library of existing actors (who get paid per video they appear in) or upload their own video to create their own avatar. To use their own voice and avatar, Synthesia walks them through instructions on what type of video and audio they should send in.

Users can then type in a script, add other components like text, images, shapes, etc. and ultimately generate the video without any video creation or editing skills whatsoever. It’s also super easy to update or edit the video without having to do any traditional video editing.

The startup is well aware of how this platform could be used nefariously, and has built in multiple layers of security and authentication to ensure that users are aware of how their avatar is being used in videos, with the ability to check the script or the video before it’s generated or published.

Not only can this platform be used for the dozen or so training and educational videos that a company deploys each year, but it can be used in new and creative ways. The general principle is that video content is more compelling and engaging than text or other content. So imagine, say, that the weekly emails that come from your manager or CEO with updates on the business came in the form of video. With Synthesia, it’s super easy and low-cost to create that video quickly.

Synthesia has an entry-level plan, which is $30/month/seat, and offers 10 minutes of video per month. The startup also has an enterprise level plan that starts at $500/month and comes with many more minutes and extra feature functionality. 

The company plans on using the funding to fuel customer growth and product development.

Beyond the enterprise video platform, Synthesia is also working on an API that would allow organizations to hook the Synthesia tech into their own systems and distribute that video. Cofounder and CEO Victor Riparbelli showed an example where users could choose a stock and plug in a phone number that would automatically create a video with a daily stock price update and distribute that video to the specified phone number.

The enterprise product, called STUDIO, launched into public beta in the summer of 2020 and has since amassed more than 1000 companies as users.

Pragma is building what it calls a “backend as a service,” providing ready-made infrastructure to developers of online, live service games. And it’s announcing today that it has raised $12 million in Series A funding.

The round was led by David Thacker at Greylock, with participation from Zynga founder Mark Pincus, Oculus founder Nate Mitchell and Cloudera founder Amr Awadallah, along with previous investors Upfront Ventures and Advancit Capital. Amy Chang, who sold her business intelligence startup Accompany to Cisco, is joining Pragma’s board of directors.

Co-founder and CEO Eden Chen told me that where Unity and Unreal have built popular frontend game engines, he and his co-founder Chris Cobb (former engineering lead at Riot Games) are hoping Pragma will fill the void for a “de facto backend game engine.”

And while “many companies tried to do this” over the past decade, Chen suggested that this is the right time to launch the platform, thanks to the continued rise of live service games (like League of Legends) that have to be treated as “living, breathing products,” as well as improved tooling around infrastructure platforms like Amazon Web Services.

Image Credits: Pragma

Pragma is launching a starter kit today designed to allow developers to quickly set up and test game loops. Meanwhile, the broader platform is currently in private beta testing with studios including One More Game (started by started by Pat Wyatt, one of Blizzard’s first employees) and Mitchell’s Mountain Top Studios.

Chen said the platform’s features fall into three broad categories — player accounts/social, game loops (including lobbies and matchmaking) and player/game data. Pragma isn’t building all of this from scratch; in some cases, it’s “acting as the integrator” for other platforms like Discord. Chen also noted that while the team plans to build a fully managed solution in the future, the current version is on-premise: “We’re building an instance of Pragma on the studio’s own infrastructure, [so they can] so they can take our code base and customize it to their own preferences.”

Pragma is initially targeting game studios with about 10 to 50 team members. Eventually, Chen hopes the platform could serve larger studios while also supporting “the democratization of these tools, so that a one- to five-person team can really leverage [them] to launch a networked, online game.”

He added, “The vision for us long term is that we really want to be innovating on the social side, creating social features that improve the game and build stronger connections.”

Last week, Scale AI announced a massive $325 million Series E. Led by Dragoneer, Greenoaks Capital and Tiger Global, the raise gives the San Francisco data labeling startup a $7 billion valuation.

Alexandr Wang founded the company back in 2016, while still at MIT. A veteran of Quora and Addepar, Wang built the startup to curate information for AI applications. The company is now a break-even business, with a wide range of top-notch clients, including General Motors, NVIDIA, Nuro and Zoox.

Backed by a ton of venture capital, the company plans a large-scale increase in its headcount, as it builds out new products and expands into additional markets. “One thing that we saw, especially in the course of the past year, was that AI is going to be used for so many different things,” Wang told TechCrunch in a recent interview. “It’s like we’re just sort of really at the beginning of this and we want to be prepared for that as it happens.”

The executive will join us on stage at TC Sessions: Mobility on June 9 to discuss how the company has made a major impact on the industry in its short four years of existence, the role AI is playing in the world of transportation and what the future looks like for Scale AI.

In addition to Wang, TC Sessions: Mobility 2021 will feature an incredible lineup of speakers, presentations, fireside chats and breakouts all focused on the current and future state of mobility — like EVs, micromobility and smart cities for starters — and the investment trends that influence them all.

Investors like Clara Brenner (Urban Innovation Fund), Quin Garcia (Autotech Ventures) and Rachel Holt (Construct Capital) — all of whom will grace our virtual stage. They’ll have plenty of insight and advice to share, including the challenges that startup founders will face as they break into the transportation arena.

You’ll hear from CEOs like Starship Technologies’ Ahti Heinla. The company’s been busy testing delivery robots in real-world markets. Don’t miss his discussion touching on challenges ranging from technology to red tape and what it might take to make last-mile robotic delivery a mainstream reality.

Grab your early bird pass today and save $100 on tickets before prices go up in less than a month.

Amazon announced this morning it’s opening Amazon Salon, the retailer’s first hair salon and a place where Amazon aims to test new technologies with the general public. The salon will occupy over 1,500 sq. ft on Brushfield Street in London’s Spitalfields, where Amazon says it will initially be trialing the use of augmented reality (AR) and “point-and-learn” technology — the latter being a system that allow customers to point to products on a display shelf in order to learn more through videos and other content that then appears on a display screen.

To then order the products, the customers will scan the QR code on the shelf, which takes them to the Amazon.co.uk shopping page for the item where they can add it to their cart and check out.

Image Credits: Amazon

The salon’s AR technology, meanwhile, will be used to allow customers to experiment by virtually trying on different hair colors before making a commitment to a new shade.

Amazon has already entered the convenience store market, grocery business and other physical retail, where it’s innovating with new technologies like cashierless checkout, smart grocery carts, and biometric systems. But it’s not clear that Amazon actually has ambitions to be in the salon business itself. Instead, it seems the salon will largely serve as a testing ground for new technologies that Amazon will likely want to sell to other retail clients in the future, or perhaps implement in its own stores. And in the case of AR, Amazon may want to gather data on customers’ experiences it can use on its own shopping site, too.

Hinting that its goals are not about the salon business itself, Amazon today describes the salon as an “experiential venue where we showcase new products and technology,” and notes that it has no other plans to open more salons at this time.

The company has also recruited an existing salon owner, Elena Lavagni of Neville Hair & Beauty Salon, to help with this project, instead of hiring a new staff to run it long-term. Lavagni and her team have previously provided hairdressing services for other events, like Paris Fashion Week and the Cannes Film Festival.

Image Credits: Amazon

Amazon has not detailed what sort of data it will collect from customers who use the salon, but it’s clearly there to learn about how new retail technologies would work in a real-world environment. But the fact that Amazon is capturing customer images for its hair color virtual try-on should raise questions about what it plans to do with the data it collects from the new salon. Will it only be used to learn about the specific technology being tested, or will it be put to other uses, too?

As many recall, Amazon has a complicated history with its use of technologies like facial recognition and biometrics, having sold biometric facial recognition services to law enforcement in the U.S., while its facial recognition technology was the subject of a data privacy lawsuit. And its Ring camera company continues to work in partnership with police. Customers should be told if they’re participating in an Amazon research project, not just having fun with new tech products.

Like other Amazon physical stores, the salon will first be open to Amazon employees only before offering bookings to the wider public in the weeks to come.

Today, Apple is holding a (virtual) keynote at 10 AM PT (1 PM in New York, 6 PM in London, 7 PM in Paris). And you’ll be able to watch the event right here as the company is streaming it live.

Rumor has it that Apple plans to unveil a brand new iPad Pro. In particular, Apple’s tablet could get a big display update as the company could switch to mini-LED displays. You can expect some better specifications as well.

But that’s not all, we expect to see a refreshed iPad mini. Apple could also be ready to release AirTags after many months of rumors and leaks. As always, the only way to find out is by watching the event.

You can watch the live stream directly on this page, as Apple is streaming its conference on YouTube.

If you have an Apple TV, you don’t need to download a new app. You can open the Apple TV app and find the Apple Events section. It lets you stream today’s event and rewatch old ones.

And if you don’t have an Apple TV and don’t want to use YouTube, the company also lets you live stream the event from the Apple Events section on its website. This video feed now works in all major browsers — Safari, Firefox, Microsoft Edge and Google Chrome.