Author: azeeadmin

Known for its innovations in the payments sector, Square is now officially a bank.

Nearly one year after receiving conditional approval, Square said Monday afternoon that its industrial bank, Square Financial Services, has begun operations. Square Financial Services completed the charter approval process with the FDIC and Utah Department of Financial Institutions, meaning its ready for business.

The bank, which is headquartered in Salt Lake City, Utah, will offer business loan and deposit products, starting with underwriting, and originating business loans for Square Capital’s existing lending product.

Historically, Square has been known for its card reader and point-of-sale payment system, used largely by small businesses – but it has also begun facilitating credit for the entrepreneurs and smalls businesses who use its products in recent years.

Moving forward, Square said its bank will be the “primary provider of financing for Square sellers across the U.S.”

In a statement, Square CFO and executive chairman for Square Financial Services, Amrita Ahuja said that bringing banking capability in house will allow the fintech to “operate more nimbly.”

Square Financial Services will continue to sell loans to third-party investors and limit balance sheet exposure. The company said it does not expect the bank to have a material impact on its consolidated balance sheet, total net revenue, gross profit, or adjusted EBITDA in 2021.

Opening the bank “deepens Square’s unique ability to expand access to loans and banking tools to underserved populations,” the company said.

Lewis Goodwin had been tapped to serve as the bank’s CEO, and Brandon Soto its CFO. With today’s announcement, Square also announced the following new appointments:

• Sharad Bhasker, Chief Risk Officer
• Samantha Ku, Chief Operating Officer
• Homam Maalouf, Chief Credit Officer
• David Grodsky, Chief Compliance Officer
• Jessica Jiang, Capital Markets and Investor Relations Lead

The trend of fintechs becoming bank continues. In February, TechCrunch reported on the fact that Brex had applied for a bank charter.

The fast-growing company, which sells a credit card tailored for startups with Emigrant Bank currently acting as the issuer, said that it had submitted an application with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions (UDFI) to establish Brex Bank.

A number of fintech companies, or those with fintech services, have spun up products typically offered by banks, including deposit and chequings accounts as well as credit offerings. Often, these are designed to provide capital to customers who might not be able to get funding on favorable terms from traditional banking institutions, but who might qualify for business-building loans from a provider who knows their company, like Square, inside and out.

Kaltura, a software company focused on providing video technology to other concerns, has filed to go public.

The Kaltura S-1 filing only partially surprised. TechCrunch previously covered the company as part of our ongoing $100 million ARR series focusing on private companies that have reached material scale. (TechCrunch has also covered its product life to a moderate degree.)

The company’s IPO documentation details a business that did more than merely accelerate its growth in 2020, and more specifically, during the COVID-19 era. Seeing a company that powers video tooling do well when much of the world has transitioned to remote work and education is not a bolt from the blue. What is notable, however, is that the company’s revenue growth has accelerated yearly since at least 2018 and its final quarter of 2020 placed the company at a new growth rate maximum.

Public investors, hungry for growth, may find such a progression compelling.

Kaltura also has an interesting profitability profile: As its GAAP net losses scaled in the last year, its adjusted profitability improved. Depending on your stance regarding adjusted metrics, Kaltura’s bottom line will either irk or delight you.

This afternoon, let’s rip into the company’s S-1 and yank out what we need to know. It is IPO season, with SPACs galore and other private companies taking more traditional routes to the public markets, including Coupang announcing a price range for its traditional debut today and Coinbase’s impending direct listing.

For now we’ll focus on Kaltura. Let’s get into it.

Inside Kaltura’s IPO filing

When TechCrunch last covered Kaltura’s financial results, we noted that the company founded in 2006 had raised just north of $166 million, crossed the $100 million ARR mark, and was, per its own reporting, “profitable on an EBITDA.” Kaltura also told TechCrunch that it had margins in the 60% range and was growing at around 25% year over year. That was just over a year ago.

Do those figures hold up? In the Q1 2020 period Kaltura recorded $25.9 million in revenue, software margins of around 78% and blended gross margins of 59.8%. And the company had grown 16.6% from the year-ago quarter. In Kaltura’s defense, the company’s growth accelerated to 24% in the year, so its self-reported numbers were mostly fair. Better than, I think, most numbers we get from private companies.

Kaltura, a software company focused on providing video technology to other concerns, has filed to go public.

The Kaltura S-1 filing only partially surprised. TechCrunch previously covered the company as part of our ongoing $100 million ARR series focusing on private companies that have reached material scale. (TechCrunch has also covered its product life to a moderate degree.)

The company’s IPO documentation details a business that did more than merely accelerate its growth in 2020, and more specifically, during the COVID-19 era. Seeing a company that powers video tooling do well when much of the world has transitioned to remote work and education is not a bolt from the blue. What is notable, however, is that the company’s revenue growth has accelerated yearly since at least 2018 and its final quarter of 2020 placed the company at a new growth rate maximum.

Public investors, hungry for growth, may find such a progression compelling.

Kaltura also has an interesting profitability profile: As its GAAP net losses scaled in the last year, its adjusted profitability improved. Depending on your stance regarding adjusted metrics, Kaltura’s bottom line will either irk or delight you.

This afternoon, let’s rip into the company’s S-1 and yank out what we need to know. It is IPO season, with SPACs galore and other private companies taking more traditional routes to the public markets, including Coupang announcing a price range for its traditional debut today and Coinbase’s impending direct listing.

For now we’ll focus on Kaltura. Let’s get into it.

Inside Kaltura’s IPO filing

When TechCrunch last covered Kaltura’s financial results, we noted that the company founded in 2006 had raised just north of $166 million, crossed the $100 million ARR mark, and was, per its own reporting, “profitable on an EBITDA.” Kaltura also told TechCrunch that it had margins in the 60% range and was growing at around 25% year over year. That was just over a year ago.

Do those figures hold up? In the Q1 2020 period Kaltura recorded $25.9 million in revenue, software margins of around 78% and blended gross margins of 59.8%. And the company had grown 16.6% from the year-ago quarter. In Kaltura’s defense, the company’s growth accelerated to 24% in the year, so its self-reported numbers were mostly fair. Better than, I think, most numbers we get from private companies.

A startup by an Apple alum that has become home to millions of low-skilled workers in India said on Tuesday it has raised an additional $12.5 million, just five months after securing $8 million from high-profile investors.

One-year-old Apna said Sequoia Capital India and Greenoaks Capital led the $12.5 Series B investment in the startup. Existing investors Lightspeed India and Rocketship VC also participated in the round. The startup, whose name is Hindi for “ours,” has now raised over $20 million.

More than 6 million low-skilled workers such as drivers, delivery personnel, electricians, beauticians have joined Apna to find jobs, and upskill themselves. But there’s more to this.

An analysis of the platform showed how workers are helping one another solve problems — such as a beautician advising another beautician to perform hair dressing in a particular way that tends to make customers happier and tip more, and someone sharing how they negotiated a hike in their salary from their employer.

“The sole idea of this is to create a network for these workers,” said Nirmit Parikh, Apna founder and chief executive told TechCrunch in an interview. “Network gap has been a very crucial challenge. Solving it enables people to unlock more and more opportunities,” he said. Harshjit Sethi, Principal at Sequoia India, said Apna was making inroads with “building a professional social network for India.”

The startup has become an attraction for several big firms including Amazon, Flipkart, Unacademy, Byju’s, Swiggy, BigBasket, Dunzo, BlueStar, and Grofers who have joined as recruiters to hire workers. Apna offers a straightforward onboarding process — thanks to support for multiple local languages — and allows users to create a virtual business card, which is then shown to the potential recruiters.

The past six months have been all about growth at Apna, said Parikh. The app, available on Android, had 1.2 million users in August last year, for instance. During this period, there have been 60 million interactions between recruiters and potential applicants, he said. The platform, which has amassed over 80,000 employers, has a retention rate of over 95%, said Parikh.

“Apna has taken a jobs-centric approach to upskilling that we are very excited about. Lack of accountability has been the core issue with current skill / vocational learning alternatives for grey and blue-collar workers. Apna has turned the problem on its head by creating net-positive job outcomes for anyone who chooses to upskill on the platform,” said Vaibhav Agrawal, Partner at Lightspeed India, in a statement.

Parikh got the idea of building Apna after he kept hearing about the difficulty his family and friends faced in India in hiring people. This was puzzling to Parikh as he wondered how could there be a shortage of workers in India when there are hundreds of millions of people actively looking for such jobs. The problem, Parikh realized was that there wasn’t a scalable networking infrastructure in place to connect workers with employers.

Before creating the startup, Parikh met workers and worked with them to understand where the core challenges they faced. That journey has not ended. The startup talks to over 15,000 users each day to understand what else Apna could do for them.

“One of the things we heard was that users were facing difficulties with interviews. So we started groups to practice them with interviews. We also started upskilling users, which has made us an edtech player. We plan to ramp up this effort in the coming months,” he said.

Parikh said the startup is overwhelmed each day with the response it is getting from its customers and the industry. Each day, he said, people share how they were able to land jobs, or increase their earnings. In recent months, several high-profile executives from companies such as Uber and BCG have joined Apna to scale the startup’s vision, he said, adding that the problem Apna is solving in India exists everywhere and the startup’s hope is to eventually serve people across the globe.

The app currently has no ads, and Parikh said he intends to not change that. “Once you get in the ad business, you start doing things you probably shouldn’t be doing,” he said. The startup instead plans to monetize its platform by charging recruiters, and offering upskill courses. But Parikh maintained that Apna will always offer its courses to users for free. The premium version will target those who need extensive assistance, he said.

As is the case elsewhere, millions of people lost their livelihood in India in the past year as coronavirus shut many businesses and workers migrated to their homes. There are over 250 million blue and grey-collar workers in India, and providing them meaningful employment opportunities is one of the biggest challenges in our country, said Sethi.

This is a developing story. More to follow…

A challenger bank raises funding at a massive valuation, Instagram adds Live Rooms and Google updates Workspace. This is your Daily Crunch for March 1, 2021.

The big story: Klarna valued at $31B

The Swedish challenger bank and buy-now-pay-later (BNPL) service has raised $1 billion at a post-money valuation of $31 billion. Klarna says it will commit 1% of the capital to “key sustainability challenges around the world,” with the initiative formally launching on April 22 (Earth Day).

For its BNPL business, Klarna both integrates with a variety of retailers and has created its own shopping app, where users can browse all the stores that support payment through Klarna. The company is active in more than 17 countries and has more than 250,000 retail partners.

The tech giants

Instagram launches ‘Live Rooms’ for live broadcasts with up to four creators — Previously, the app only allowed users to livestream with one other person, similar to Facebook Live.

Twitter rolls out vaccine misinformation warning labels and a strike-based system for violations — The company says that when necessary, it will attach notices warning users that the content “may be misleading” and linking out to vetted public health information.

Google updates Workspace — The highlight here is probably that you can now use Assistant in combination with Google Workspace.

Startups, funding and venture capital

Autonomous drone maker Skydio raises $170M led by Andreessen Horowitz — Skydio’s fresh capital comes on the heels of its expansion last year into the enterprise market.

Clue gets FDA clearance to launch a digital contraceptive — The digital contraceptive will offer users a statistical prediction of ovulation as a birth control tool.

Rocket Lab CEO Peter Beck explains why the company needs a bigger rocket, and why it’s going public to build it — Rocket Lab packed a ton of news into Monday: It’s going public via a SPAC merger, and it’s also building a new, larger launch vehicle called Neutron.

Advice and analysis from Extra Crunch

Why your organization needs product principles — VP of Design Ethan Eismann writes that at Slack, every process and feature has been designed with the primary goal of making Slack a workplace tool that feels human.

Justworks’ Series B pitch deck may be the most wonderfully simple deck I’ve ever seen — On Extra Crunch Live, Bain Capital Ventures’ Matt Harris and Justworks CEO Isaac Oates sat down to talk through how they resolve disagreements and more.

As Coinbase looks to list, Robinhood rides the crypto boom — Coinbase is hardly the only company enjoying a crypto bounce.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

EU to propose a ‘digital pass’ for COVID-19 vaccination/test status to help safer travel — President Ursula von der Leyen said today that the planned digital tool will aim to provide proof that a person has been vaccinated.

Walmart drops the $35 order minimum on its 2-hour ‘Express’ delivery service — The move seems designed to directly challenge Amazon.

Hear from Uber, Facebook and Netflix about diversity, equity and inclusion at TC Sessions: Justice — We’ll dive into the myth of the pipeline problem, as well as the idea of imposter syndrome and much more.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Google over the weekend began to update many of its flagship iOS apps after a lengthy delay caused by the company’s failure to add Apple’s newly required privacy labels in a timely fashion. Though Google earlier this year said it would “soon” begin to add the labels to its apps as they were updated, it has still yet to do so for a number of key properties — including Search, Photos, Assistant, Maps, Pay, Chrome, and others.

Per Apple’s policy, developers cannot issue further updates until privacy labels are applied. That prevented Google from updating many of its top apps for a much longer period of time than usual — especially for a company of its size where minor updates containing bug fixes and performance improvements are issued on a regular basis.

Gmail, for example, hadn’t been updated for three months before the update that rolled out this weekend.

According their iOS App Store listings, Slides, Docs, Sheets and Calendar all received updates this weekend, as well. And over the past couple of weeks, updates for other newly labeled Google apps have also been restarted — including YouTube, YouTube TV, YouTube Music, Google Tasks, and Google Podcasts, for example.

We’ve been tracking Google’s app updates here in Google Sheets. (Appfigures confirmed our spreadsheet’s accuracy by running it against its own data.)

This weekend’s set of newly updated apps aren’t the only ones from Google to have received their privacy labels in 2021. Labels can be applied without issuing an app update which makes them harder to spot, sometimes.

Across Google’s full suite of iOS apps, those apps with labels now include:

Google One, Google Podcasts, Google Stadia, Google Fit, Google Fi, Google Tasks, Google Chat, Onduo, Project Baseline, YouTube, YouTube TV, YouTube Music, YouTube Kids, YouTube Studio, Google Meet, Google Smart Lock, Motion Stills, Google Fiber, Google Ads, Wear OS, Google Calendar, Google Classroom, Google Slides, Google Sheets, Google Docs, Google Drive, Google Play Movies, Google Home, Fiber TV, Google Translate, and Google Authenticator.

Google has not said why it taking so long to apply its labels. It initially attributed its delay to add the privacy labels to its annual holiday code freeze — a time of the year when the company pauses updates on its apps while many people take time off.

But as the weeks turned into months, it was clear that Google was taking a much more cautious and methodical approach to applying the labels than other large tech companies. As a result, it’s received increased attention and scrutiny of its app updates.

In fact, every time a new Google app was updated with a label, it made headlines.

Engadget today reported on Gmail and other apps being updated over the weekend, for example.

In mid-January, Google officially responded to the curiosity over its delays with a blog post explaining that its iOS apps would receive privacy labels as it received its next update. But the two have not necessarily gone hand-in-hand. Gmail received its privacy label back on Feb. 22, according to reports, but hadn’t been updated until just now.

And the list of labeled apps is far longer than the list of updated ones.

Google has not responded to a request for comment at this time.

 

Commitments to carbon neutrality keep coming from all corners of the business world — over the past few weeks, companies ranging from the fast-casual restaurant chain Sweetgreen to the security-focused networking IT company Palo Alto Networks to the online craft retailer Etsy committed to net-zero carbon emission plans.

As the companies look for ways to reduce their energy consumption, they’re turning to carbon offset programs as a stopgap measure until the energy grid decarbonizes, they implement technologies to reduce their energy consumption, or both.

This push toward corporate sustainability is creating all kinds of strange bedfellows and startup opportunities, with major corporate offset programs and the establishment of new startups focused on offsets creating channels for sustainable technologies to get to market.

The latest example of a company leveraging a sustainability angle to tie a corporate partner even closer to their business is the agreement between Delta and Deloitte, which involves the accounting and consulting firm paying Delta for renewable jet fuel to offset the emissions of its corporate travel.

To be clear, a better policy for Deloitte would be to cut back on non-essential travel significantly and focus on doing as much remote work as possible to reduce the need for flights. But in some cases business travel is unavoidable, and most folks want to get back to a pre-pandemic normal, which — at least in the U.S. and other countries — will include significantly ramping up air travel for a percentage of the population.

As the BBC noted, air travel accounts for roughly 5 percent of the emissions that contribute to global climate change, but only a small percentage of the world actually uses air transport. According to one analysis from the International Council on Clean Transport, just 3 percent of the world’s population flies regularly. And if everyone in the world did fly, aircraft emissions would top the CO2 emissions of the entire U.S.

Which brings us back to Deloitte and Delta and startups.

Delta’s deal to buy sustainable aviation fuel that would offset a portion of the carbon emissions associated with Deloitte’s business travel is one small step toward greening the airline industry, but the question is whether it’s a significant first step or just an attempt to greenwash the unsustainable travel habits of a consulting industry that prides itself on such perks.

AWS launched the DeepRacer League in 2018 as a fun way to teach developers machine learning, and it’s been building on the idea ever since. Today, it announced the latest league season with two divisions: Open and Pro.

As Marcia Villalba wrote in a blog post announcing the new league, “AWS DeepRacer is an autonomous 1/18th scale race car designed to test [reinforcement learning] models by racing virtually in the AWS DeepRacer console or physically on a track at AWS and customer events. AWS DeepRacer is for developers of all skill levels, even if you don’t have any ML experience. When learning RL using AWS DeepRacer, you can take part in the AWS DeepRacer League where you get experience with machine learning in a fun and competitive environment.”

While the company started these as in-person races with physical cars, the pandemic has forced them to make it a virtual event over the last year, but the new format seemed to be blocking out newcomers. Since the goal is to teach people about machine learning, getting new people involved is crucial to the company.

That’s why it created the Open League, which as the name suggests is open to anyone. You can test your skills and if you’re good enough, finishing in the top 10%, you can compete in the Pro division. Everyone competes for prizes as well such as vehicle customizations.

The top 16 in the Pro League each month race for a chance to go to the finals at AWS re:Invent in 2021, an event that may or may not be virtual, depending on where we are in the pandemic recovery.

Facebook was ordered to pay $650 million Friday for running afoul of an Illinois law designed to protect the state’s residents from invasive privacy practices.

That law, the Biometric Information Privacy Act (BIPA), is a powerful state measure that’s tripped up tech companies in recent years. The suit against Facebook was first filed in 2015, alleging that Facebook’s practice of tagging people in photos using facial recognition without their consent violated state law.

1.6 million Illinois residents will receive at least $345 under the final settlement ruling in California federal court. The final number is $100 higher than the $550 million Facebook proposed in 2020, which a judge deemed inadequate. Facebook disabled the automatic facial recognition tagging features in 2019, making it opt-in instead and addressing some of the privacy criticisms echoed by the Illinois class action suit.

A cluster of lawsuits accused Microsoft, Google and Amazon of breaking the same law last year after Illinois residents’ faces were used to train their facial recognition systems without explicit consent.

The Illinois privacy law has tangled up some of tech’s giants, but BIPA has even more potential to impact smaller companies with questionable privacy practices. The controversial facial recognition software company Clearview AI now faces its own BIPA-based class action lawsuit in the state after the company failed to dodge the suit by pushing it out of state courts.

A $650 million settlement would be enough to crush any normal company, though Facebook can brush it off much like it did with the FTC’s record-setting $5 billion penalty in 2019. But the Illinois law isn’t without teeth. For Clearview, it was enough to make the company pull out of business in the state altogether.

The law can’t punish a behemoth like Facebook in the same way, but it is one piece in a regulatory puzzle that poses an increasing threat to the way tech’s data brokers have done business for years. With regulators at the federal, state and legislative level proposing aggressive measures to rein in tech, the landmark Illinois law provides a compelling framework that other states could copy and paste. And if big tech thinks navigating federal oversight will be a nightmare, a patchwork of aggressive state laws governing how tech companies do business on a state-by-state basis is an alternate regulatory future that could prove even less palatable.

 

TC Sessions: Justice is coming up on Wednesday, and we’ve decided to sweeten the deal for what’s included with your event pass. Buy your ticket now and you’ll get a free month of access to Extra Crunch, our membership program focused on founders and startup teams with exclusive articles published daily.

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What is TC Sessions: Justice? 

TC Sessions: Justice is a single-day, virtual event that explores diversity, equity and inclusion in tech, the gig worker experience, the justice system and more. We’ll host a series of interview with key figures in the tech community. 

The event will take place March 3, and we’d love to have you join. 

View the event agenda here, and purchase tickets here. 

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