Before counting a possible underwriters’ option, Bumble raised $2.15 by selling 50,000,000 million shares in its public offering. The company will begin to trade tomorrow morning.
Bumble’s debut comes amidst a number of other 2021 offerings, including MetroMile’s SPAC-led public combination earlier this week. Other well-known companies are anticipated to list this year, including Coinbase and, perhaps, Robinhood.
The public offering of Bumble shares comes after a sustained period when one company, Match, was presumed to be the only possible public dating company. However, the smaller Bumble has proven that there is room for at least one more.
TechCrunch explored Bumble’s financial results here, if you’d like more.
Before counting a possible underwriters’ option, Bumble raised $2.15 by selling 50,000,000 million shares in its public offering. The company will begin to trade tomorrow morning.
Bumble’s debut comes amidst a number of other 2021 offerings, including MetroMile’s SPAC-led public combination earlier this week. Other well-known companies are anticipated to list this year, including Coinbase and, perhaps, Robinhood.
The public offering of Bumble shares comes after a sustained period when one company, Match, was presumed to be the only possible public dating company. However, the smaller Bumble has proven that there is room for at least one more.
TechCrunch explored Bumble’s financial results here, if you’d like more.
Facebook tries to get less political, Oracle’s TikTok acquisition may not be happening and Twitter says Donald Trump is banned forever. This is your Daily Crunch for February 10, 2021.
The big story: Facebook tests a News Feed with less politics
Facebook announced today that it’s testing changes to the News Feed that would downrank political content. The company says the results will help determine how it treats such content in the future; content from health organizations and official government agencies will not be affected.
Two years ago, Facebook said it would be downranking publisher content in favor of content from family and friends, but this time it’s targeting politics specifically. For now, this test is only being conducted with a small group of users in select markets, including the United States, Canada, Brazil and Indonesia.
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.
Scalarr, a startup that says it uses machine learning to combat ad fraud, is announcing that it has raised $7.5 million in Series A funding.
The company was founded by CEO Inna Ushakova and CPO Yuriy Yashunin, who previously led the mobile marketing agency Zenna. Ushakova told me that while at Zenna, they realized that ad fraud had grown to the point that it posed a real threat to their business.
At the same time, the team wasn’t impressed by any of the existing anti-fraud solutions, so it built its own technology. Eventually, they shut Zenna down completely and moved the entire team over to Scalarr.
The startup’s products include AutoBlock, which is supposed to detect fraud before the advertiser bids on an ad, and DeepView, which is used by adtech platforms (including ad exchanges, demand-side platforms and supply-side platforms).
Scalarr says it can detect 60% more fraud than existing products on the market and that it saved its clients $22 million in ad fraud refunds in 2020. Ushakova attributed this in large part to the startup’s extensive use of machine learning technology.
She added that while large ad attribution companies are adding anti-fraud products, they aren’t the focus. And historically, companies have tried to detect fraud through a “rules-based approach,” where there’s a list of behaviors that suggest fraudulent activity — but no matter how quickly they create those rules, it’s hard to keep up with the fraudsters.
“Fraud is ever evolving,” Ushakova said. “It’s like a Tom and Jerry game, so they are ahead of you and we are trying to catch them.”
As for why machine learning works is so much more effective, she said, “Only ML could help you predict the next step, and with ML, you should be able to detect abnormalities that are not classified. Right after that, our analytics should be able to take a look at those abnormalities and decide whether something significant statistically important.”
Scalarr’s Series A led by the European Bank of Reconstruction and Development, with participation from TMT Investments, OTB Ventures, and Speedinvest. Among other things, the company will use the money to expand its presence in Asia and to continue developing the product.
Today, there are a number of website builders aimed at creators who want to point fans to a dedicated landing page from their social media profile. If you’ve spent any time on TikTok or Instagram, you’ve likely come across one of these simplified “link in bio”-style websites — like those hosted by Linktree, for example. A new startup called Beacons is now entering this market with the goal of making “link in bio” websites even more powerful. Its website builder offers creators an expanded set of tools to monetize their community, including through donations, sales, paid requests, affiliate shopping and more.
After signing up for the service, Beacons walks the user through a series of questions, many which can be answered with just a “yes” or “no.” For example, Beacons may ask the user if they want to accept donations or collect followers’ emails, if they make TikTok or YouTube videos, and which category they’re in, in terms of the content they create.
This information is used to set up their Beacons landing page with the right content sections, which Beacons calls “blocks.” At launch, Beacons offers around a dozen of these configurable blocks, like email and SMS collection modules, video embed blocks for TikTok or YouTube creators, music blocks for embedding a track or album, a Twitter block to embed a tweet or Twitter profile, and link blocks, similar to Linktree, among others.
There’s even a “friends” block, which is like a modern-day Myspace Top 8. This lets you link out to your friends on either Beacons, Instagram, Twitter or TikTok.
An area where Beacons differentiates itself from other “link in bio” website builders, however, is with its set of “monetization” blocks. Today, it has four tools for creators who want to generate revenue from their online presence. One of these is similar to Cameo, as it allows the creator to set up a menu of options to take fan requests for personalized content. For instance, fans could ask a fitness influencer to critique their routine, or they could pay to have their burning questions answered by someone they admire. The creator can then send out a personalized response either publicly or privately.
Other monetization blocks allow creators to accept donations or sell digital downloads — like e-books or paid video content, for instance.
The fourth, and perhaps most interesting, monetization block is a TikTok shopping feature. It allows creators to embed their TikTok videos where they recommend products directly on their Beacons website. From here, they can add affiliate links to the products in question, allowing them to directly generate revenue when fans purchase the items they’ve featured.
This particular feature comes at an opportune time. Today, TikTok is only beginning to formalize its plans around e-commerce. In a recent presentation to marketers, TikTok spoke of its plans to launch new online shopping tools that would allow brands to more directly reach TikTok’s younger audience. TikTok has also partnered with Shopify on social commerce, and has experimented with live video shopping, including with a holiday event hosted by Walmart.
But TikTok’s creators have already been driving shopping trends across categories like fashion, beauty, home décor, household items, toys and much more, to the point that “TikTok made me buy it,” has become a common excuse for the impulse purchases prompted by TikTok’s viral content. By allowing creators to now more directly and financially benefit from these trends is the next logical step.
Image Credits: Beacons
The idea for Beacons comes from co-founders Neal Jean, Jesse Zhang, Greg Luppescu and David Zeng. Neal, Jesse and David met while in the PhD program at Stanford studying different areas of research, like machine learning and AI. Greg, meanwhile, did his Master’s at Stanford, then went on to work at Apple on the Apple Watch team.
Neal, Jesse and David had teamed up on Beacons and went through the Y Combinator Summer 2019 batch, iterating on ideas and pivoting the product several times. Some of those early concepts may eventually return — like a Shopify integration that would connect creators with brands selling on Shopify, for example.
The broader focus, however, had always been on helping creators make money, says Neal.
“Even before our current product, we were really focused on trying to help creators solve monetization,” he explains. “When we kind of made this mini-pivot into the more Linktree-like product, we thought about building features that can help creators actually generate revenue — which I don’t think Linktree or any of the existing incumbents in the space were doing. Even today, you can’t actually make any money through Linktree,” he notes.
Unlike some of its competitors, Beacons offers its tools for free and instead monetizes through a premium plan ($10/mo) that allows creators to use their own custom domain. It also makes money by taking a percentage of sales on the requests and sales blocks, which is either 9% on the free plan or 5% on the paid plan. This rev share doesn’t bring in much money today — only “hundreds” of dollars — but the team believes that will scale as the startup grows and gains a large user base.
“Our strategy is…to continue building out more of these different kinds of revenue streams for creators,” says Neal. “And as we do that, I think, the fraction of transactional revenue will become higher relative to the subscription revenue than it is today.”
Since launching in private beta last September, Beacons has seen 90,000 sign-ups and now has over 20,000 people who are considered active users of the product — most arrived in the last couple of months when the service began to roll out some of its newer features. So far, Beacons hasn’t done any paid marketing, with around 77% of new users coming to Beacons because they saw it on someone else’s profile.
The team raised a small, post-YC angel round of around $600,000 but is looking to fundraise in the future.
The beauty of podcasting is that anyone can do it. It’s a rare medium that’s nearly as easy to make as it is to consume. And as such, no two people do it exactly the same way. There are a wealth of hardware and software solutions open to potential podcasters, so setups run the gamut from NPR studios to USB Skype rigs (the latter of which has become a kind of default during the current pandemic).
We’ve asked some of our favorite podcast hosts and producers to highlight their workflows — the equipment and software they use to get the job done. The list so far includes:
Eleanor Kagan, Senior Producer, “Welcome to Your Fantasy,” Pineapple Street Studios. Image Credits: Eleanor Kagan
Launching today from Spotify and Pineapple Street Studios (in association with Gimlet), “Welcome to Your Fantasy” explores the true crime tale behind the Chippendales phenomenon of the 1980s. Historians and “Past/Present” hosts Natalia Petrzela, Nicole Hemmer and Neil J. Young will unravel the tale over the course of an eight-episode series. The show took 18 months to create, bolstered by considerable resources from Spotify. Pineapple Street Senior Producer Eleanor Kagan (Another Round, See Something Say Something and Thirst Aid Kit) runs us through the gear the team used to create the series both in-person and remotely, once the pandemic hit.
Dancer Scott Layne walks host Natalia through one of his routines during an interview. Image Credits: Eleanor Kagan
For in-person interviews not recorded in Pineapple’s Brooklyn studio, my basic reporting kit includes a Zoom H5, which has two XLR channels and allows me to give one Rode NTG-2 shotgun mic to the host Natalia and the other to the interviewee. (On mic stands, of course — the mic itself is prone to handling noise.) I’ve got a Rode pistol grip for when we, say, knock on doors in the neighborhood of the former Chippendales club in LA, looking for people who had been around when the party scene at the club was supposedly causing wars between the owners, neighbors and the police. (Luckily, we found Naomi, 94, who had been there since 1972 and had stories for days. She’s in the podcast.) Christine showed me how she brilliantly uses a cross-body camera strap attached to her recorder so she can hang it comfortably around her. For gear bags I used to swear by the Lowepro Passport Sling, but now that I’m older (lol), one-strapping isn’t comfortable for a long day in the field, so I use a regular backpack. My kit also includes Sony MDR-7506 headphones, an assortment of three- and six-foot XLR cables (always have backups), a deadcat, extra SD cards, an Electro Voice RE50/B mic, pens, snacks, release forms and batteries. So many batteries.
Producer Christine records historian Neil describing the LA neighborhood where the original Chippendales club opened. Image Credits: Eleanor Kagan
Then the pandemic hit. We all went on lockdown. We had done most of our interviews but there were a few we still needed, plus all the host tracking for the series. So we shipped Natalia a kit: a Zoom H6, a Shure SM7B cardioid dynamic announcer microphone, a CloudLifter CL-1 Microphone Activator, a broadcast arm, XLR cables and a windscreen. Natalia set up shop in her closet, surrounded by clothes, a fleece blanket on the floor, and as many cushions as she was willing to pull off her couches and chairs. (Sound bounces off of hard surfaces. The soft materials absorb it so the recordings won’t sound echoey or “roomy.”) We sent our amazing engineer Hannis Brown mic tests so he could diagnose the set-up from afar and suggest tweaks. And Natalia, bless her, was incredibly game to essentially become her own recording engineer ON TOP OF hosting an entire show. We quickly got accustomed to doing everything remotely and over Zoom, as all of us everywhere did.
When it came to remote interviewing, we would connect over Zoom, and both Natalia and our interviewee would record themselves. (We always recorded the Zoom as a backup too.) It was up to us producers to talk our interviewees through self-syncing. Experience and teamwork was of the utmost importance here. Interviewees only had so much time, and explaining how to set up a recording on a smartphone (or iPod!, yes, really) and transfer a test recording quickly, and then troubleshooting any audio problems in their location was important to getting a high-quality interview without taxing anyone’s patience. There are several useful guides and graphics out there that walk through the set-up. There’s something a little bit lost, of course, when we don’t get to walk into people’s homes for interviews, or even when former Chippendales dancers can’t produce their original costume in the middle of the interview — as one guy did. But everyone was incredibly kind and patient and willing to do this for us, for which we are very, very grateful.
In the end, we interviewed about 70 people for this series. We wrote 26 drafts of our first episode. We reviewed 100+ hours of archival footage. And I believe there are still more stories to be told when it comes to Chippendales.
Thankfully, no matter where in the world anyone is, we have the tools to do it.
Vin Lingathoti is a partner at Cambridge Innovation Capital, where he focuses on technology investments. A software engineer by background, Vin has spent more than a decade in Silicon Valley working with tech companies. Before joining CIC, he led venture investments and acquisitions for Cisco Systems in London and San Jose.
As a deep tech investor, I have often noticed that deep tech startups go through a different evolution cycle than a typical B2B or B2C company.
Accordingly, the challenges they face along the way are different — commercialization tends to be more complex and founders are often required to approach it differently.
Deep tech companies are usually built around a novel technology that offers significant advances over existing solutions in the market; often they create new markets that don’t yet exist. Taking these technologies from “lab to market” requires substantial capital carrying a much higher degree of risk than an average venture investment.
The majority of VCs are often surprised by the amount of complexity involved in building a successful deep tech company.
Typically, the underlying intellectual property (IP) of a deep tech company is unique and hard to recreate, resulting in a significant competitive advantage.
High risk, high reward
Since most deep tech companies are built around a fundamentally new and unproven technology, they carry higher risk. Typically, the tech has been tested in a lab or a research center and the early results are therefore often derived in a controlled environment. As a result, while building a product, founders are likely to encounter technical challenges along the way and won’t be able to eliminate the technology risk until later in the process.
By comparison, if a company is building a marketplace for used cars, for example, the technology risk is almost zero. Deep tech companies have the capability to create new markets with little competition and can replace existing technologies while fundamentally transforming an industry.
Microsoft, Nvidia, ARM, Intel and Google were all deep tech startups in the beginning. These companies will almost always require higher capital, carry higher risk and have longer time to return on investment.
However, if successful, they could deliver outsized returns over an average venture investment.
Technology-first approach
An obvious, but fundamental difference with deep tech companies is their technology-first approach. Typically, the founder has developed a novel technology or IP as part of their Ph.D. thesis or postdoc work and is in search for a real-world problem it can solve. Most startups, in general, pick an existing problem in a market they know well and develop a product that solves for that problem and they have a clear sense of the problem they need to solve.
Deep tech entrepreneurs take the opposite approach and as a result they often suffer from SISP (a solution in search of a problem), as Y Combinator calls it. Founders need to be aware of this and must be willing to pivot and repivot based on market and customer feedback. Investors should be prepared for this before backing the company and support the founders as they navigate through the challenges of building a successful deep tech company.
Toyota Motor North America said Wednesday it will bring three new electrified vehicles to the U.S. market, as the automaker seeks to win over customers by offering a variety of lower emission and zero-emission cars and SUVs.
Two of the new vehicles will be all-electric and one will be a plug-in hybrid, the company said Wednesday. Sales of the vehicles are expected to being in 2022.
The aim, according to Bob Carter TMNA’s executive vice president of sales, is to offer customers multiple choices of powertrain that best suits their needs. The automaker is developing and selling hybrids, plug-in hybrids like the Toyota Prius and Toyota RAV4 and fuel cell vehicles such as the Toyota Mirai.
The company said that by 2025, its Toyota and luxury Lexus models will have an electrified option. The automaker is also developing a dedicated battery electric platform called e-TNGA, that can be configured to meet different needs.
This all-of-the-above approach is aimed at reducing greenhouse gas emissions and capturing more market share, which Toyota believes can only be achieved through variety. Toyota wants to to have 40% of new vehicle sales be electrified models by 2025. By 2030, the company expects that to increase to nearly 70%.
“We believe the fastest way to lower greenhouse gases in the transportation sector is to offer drivers lower carbon choices that meet their needs,” Gill Pratt, chief scientist of Toyota Motor Corporation and CEO of Toyota Research Institute, said in a statement. “At every price point and with multiple powertrains, we can put more people in cleaner automobiles across North America to have the greatest near-term impact on total carbon emissions.”
The company’s internal research, which was built off of a tool that shows the trade-off between GHG Emissions and total cost of ownership, found that emissions of a currently available battery-electric model and a plug-in hybrid model are roughly the same in on-road performance when factoring in pollutants created by electricity production for the average U.S. energy grid used to charge batteries.
Manufacturing is a component of GHG emissions, Toyota noted. Researchers found that the production of a PHEV emits less GHG since it uses a smaller, lighter weight battery. The company also argued that plug-in hybrids are less expensive to buy and own, compared to a BEV.
The company’s argument — that BEVs and PHEVs can provide similar environmental benefits — syncs up with its business plan.
Since the start of the year, I’ve covered nine M&A deals already, the largest being Citrix buying Wrike for $2.25 billion. But not every deal involves a huge price tag. Today we are going to look at three smaller deals that show there is plenty of activity at the lower-end of the acquisition spectrum.
As companies look for ways to enhance their offerings, and bring in some talent at the same time, smaller acquisitions can provide a way to fill in the product road map without having to build everything in-house.
This gives acquiring companies additional functionality for a modest amount of cash. In smaller deals, we often don’t even get the dollar amount, although in one case today we did. If the deal isn’t large enough to have a material financial impact on a publicly traded company, they don’t have to share the price.
Let’s have a look at three such deals that came through in recent days.
Tenable buys Alsid
For starters, Tenable, a network security company that went public in 2018, bought French Active Directory security startup Alsid for $98 million. Active Directory, Microsoft’s popular user management tool, is also a target of hackers. If they can get a user’s credentials, it’s an easy way to get on the network and Alsid is designed to prevent that.
Security companies tend to enhance the breadth of their offerings over time and Alsid gives Tenable another tool and broader coverage across their security platform. “We view the acquisition of Alsid as a natural extension into user access and permissioning. Once completed, this acquisition will be a strategic complement to our Cyber Exposure vision to help organizations understand and reduce cyber risk across the entire attack surface,” according to the investor FAQ on this acquisition.
Emmanuel Gras, CEO and co-founder, Alsid says he started the company to prevent this kind of attack. “We started Alsid to help organizations solve one of the biggest security challenges, an unprotected Active Directory, which is one of the most common ways for threat actors to move laterally across enterprise systems,” Gras said in a statement.
Alsid is based in Paris and was founded in 2014. It raised a modest amount, approximately $15,000, according to Crunchbase data.
Copper, a CRM tool built on top of the Google Workspace, announced it has purchased Sherlock, a customer experience platform. They did not share the purchase price.
The pandemic pushed many shoppers online and providing a more customized experience by understanding more about your customer can contribute to and drive more engagement and sales. With Sherlock, the company is getting a tool that can help Copper users understand their customers better.
“Sherlock is an innovative engagement analytics and scoring platform, and surfaces your prospects’ and customers’ intentions in a way that drives action for sales, account management and customer success professionals,” Copper CEO Dennis Fois wrote in a blog post announcing the deal.
He added, “Relationships are based on engagement, and with Sherlock we are going to create CRM that is focused on action and momentum.”
It’s clear that APIs have changed the way we think about software development, but they have also created a management problem of their own as they proliferate across large organizations. RapidAPI, an API management platform, announced today that it has acquired Paw.
With Paw, RapidAPI adds the ability to design your own APIs, essentially giving customers a one-stop shop for everything related to creating and managing the API environment inside a company. “The acquisition enables RapidAPI to extend its open API platform across the entire API development lifecycle, creating a connected experience for developers from API development to consumption, across multiple clouds and gateways,” the company explained in a statement.
RapidAPI was founded in 2015 and has raised over $67 million, according to Crunchbase data. Its most recent funding came last May, a $25 million round from Andreessen Horowitz, DNS Capital, Green Bay Ventures, M12 (Microsoft’s Venture Fund) and Grove.
Each of these purchases fills an important need for the acquiring company and expands the abilities of the existing platform to offer more functionality to customers without putting out a ton of cash to do it.
If you’re wondering why Zynga issued $875 million in convertible notes at the end of 2020, CEO Frank Gibeau said the company was fundraising to build up a “war chest” for more acquisitions.
“As you know, we’ve been a consolidator inside of this business for a while, and we’re going to continue to be on offense [looking for] great companies, great cultures, great teams that we can bring into Zynga,” Gibeau told me.
“There are now four or five examples of us having done this successfully,” Gibeau said. “When we started, nobody was picking up our phone calls. Now when we call, we are a bit of a destination of choice for a lot of developers out there.”
Gibeau and I were speaking about Zynga’s fourth quarter earnings, in which the company reported all-time high revenue of $616 million and a net loss of $53 million (though another measure of profitability, adjusted EBITDA, was actually positive at $90 million). Daily active users were up 77% year over year, to 36 million, while monthly active users were up 103%, to 134 million.
Looking ahead, Zynga is forecasting revenue of $2.6 billion (a 32% year-over-year increase) and adjusted EBITDA of $450 million for 2021. And while another acquisition could significantly grow the business, Gibeau noted that the company’s forecasts have “no acquisitions assumed,” adding, “We’re in a great position, because we would prefer to do acquisitions in 2021, but we don’t have to do any deals.”
There are new games lined up for 2021, including Puzzle Combat, Farmville 3 and a Star Wars title. The company also plans to continue developing hyper-casual games, to develop more cross-platform games, to expand internationally and to continue building out its ad network — in fact, he suggested that Apple’s upcoming privacy changes could be good for Zynga.
“A lot of traditional marketing services are not going to be able to survive very well,” he said. “Because we’re a first-party data company — all the data we generate is coming to our services from our games — and because we’re at scale … IDFA is an opportunity for our company.”
