Category: UNCATEGORIZED

Today’s the day! In just a few hours I am chatting with with Jai Das, a managing director at Sapphire Ventures.

The conversation is part of the second season of Extra Crunch Live series that has seen all sorts of investors and founders join TechCrunch for a dig into their work.

Das’ participation comes at the perfect moment: he invested early in MuleSoft, which sold to Salesforce for $6.5 billion back in 2018. Salesforce is expected to announce its purchase of Slack later today, perhaps before our chat. Either way, we’ll ask Das about selling companies, selling them to Salesforce in particular and what we should take away concerning the enterprise software M&A market from the deal.

Here are notes from the last episode of Extra Crunch Live with Bessemer’s Byron Deeter.

And as we noted last week, we will also dig into the role of corporate venture capital in 2020 and beyond, the state of early-to-growth stage investing as Sapphire leads rounds from Series A to Series C, API-led startups, along with the importance of geographic location in the pandemic for founding teams, and more.

It’s going to be fun! And it’s in just a few hours. So make sure that your Extra Crunch login works, hit the jump, save the time to your calendar and submit a question ahead of time if you want me to see your notes before we start. In the meantime, I’m going to find my most Zoom-friendly shirt and run through my intro a few times.

We’re live in mere hours! See you soon.

Details

Below are links to add the event to your calendar and to save the Zoom link. We’ll share the YouTube link shortly before the discussion:

Many U.S. consumers spent this year’s Black Friday sales event shopping from home on mobile devices. That led to first-time installs of mobile shopping apps in the U.S. to break a new record for single-day installs on Black Friday 2020, according to a report from Sensor Tower. The firm estimates that U.S. consumers downloaded approximately 2.8 million shopping apps on November 27th — a figure that’s up by nearly 8% over last year.

However, this number doesn’t necessarily represent faster growth than in 2019, which also saw about an 8% year-over-year increase in Black Friday shopping app installs, the report noted. This could be because mobile shopping and the related app installs are now taking place throughout the month of November, though, as retailers adjusted to the pandemic and other online shopping trends by hosting earlier sales or even month-long sales events.

The data seems to indicate this is true. Between Nov. 1 and Nov. 29, U.S. consumers downloaded approximately 59.2 million shopping apps from across the App Store and Google Play — an increase of roughly 15% from the 51.7 million they downloaded in Nov. 2019. That’s a much higher figure than the 2% year-over-year growth seen during this same period in 2019.

Another shift taking place in mobile shopping is the growing adoption of app from brick-and-mortar retailers. During the first three quarters of 2020, apps from brick-and-mortar retailers grew installs 27%. This trend continued on Black Friday, when 5 out of the top 10 mobile shopping apps were those from brick-and-mortar retailers, led by Walmart.

Walmart saw the highest adoption this year, with around 131,000 Black Friday installs, followed by Amazon at 106,000, then Shopify’s Shop at 81,000. Combined, the top 10 apps saw 763,000 total new installs, or 27% of the first-time downloads in the Shopping category.

Because the firms are only looking at new app installs, they aren’t giving a full picture of the U.S. mobile shopping market, as many consumers already have these apps installed on their devices. And many more simply shop online via a desktop or laptop computer.

To give these figures some context, Shopify reported on Saturday it had seen record Black Friday sales of $2.4 billion, with 68% on mobile. And today, Amazon announced its small business sales alone topped $4.8 billion from Black Friday to Cyber Monday, a 60% year-over-year increase, but it didn’t break out the percentage that came from mobile.

Sensor Tower and rival app store analytics firm App Annie largely agreed on the top 5 shopping apps downloaded this Black Friday. They both saw Walmart again beating Amazon to become the most-downloaded U.S. shopping app on Black Friday — as it did in 2019. The two firms reported that Amazon remained No. 2 by downloads, followed by Shopify’s Shop app, then Target. However, Sensor Tower put Best Buy in 5th place, followed by Nike, while App Annie saw those positions swapped.

The rest of Sensor Tower’s top 10 included SHEIN, Sam’s Club, Klarna, then Offer Up, while App Annie’s list was rounded out by SHEIN, Sam’s Club, Wish, then Offer Up.

The pandemic’s impact may not have been obvious given the growth in online shopping this year, but the recession it triggered has played a role in how U.S. consumers are paying for their purchases. “Buy Now, Pay Later” apps like Klarna were up this year, even breaking into the top 10 per Sensor Tower’s data. The firm also noted that many new shopping apps launched this year focused on discounts and deals and retailers ran longer sales this year, as well.

A Facebook -funded body that the tech giant set up to distance itself from tricky and potentially reputation-damaging content moderation decisions has announced the first bundle of cases it will consider.

In a press release on its website the Facebook Oversight Board (FOB) says it sifted through more than 20,000 submissions before settling on six cases — one of which was referred to it directly by Facebook.

The six cases it’s chosen to start with are:

Facebook submission: 2020-006-FB-FBR

A case from France where a user posted a video and accompanying text to a COVID-19 Facebook group — which relates to claims about the French agency that regulates health products “purportedly refusing authorisation for use of hydroxychloroquine and azithromycin against COVID-19, but authorising promotional mail for remdesivir”; with the user criticizing the lack of a health strategy in France and stating “[Didier] Raoult’s cure” is being used elsewhere to save lives”. Facebook says it removed the content for violating its policy on violence and incitement. The video in questioned garnered at least 50,000 views and 1,000 shares.

The FOB says Facebook indicated in its referral that this case “presents an example of the challenges faced when addressing the risk of offline harm that can be caused by misinformation about the COVID-19 pandemic”.

User submissions:

Out of the five user submissions that the FOB selected, the majority (three cases) are related to hate speech takedowns.

One case apiece is related to Facebook’s nudity and adult content policy; and to its policy around dangerous individuals and organizations.

See below for the Board’s descriptions of the five user submitted cases:

• 2020-001-FB-UA: A user posted a screenshot of two tweets by former Malaysian Prime Minister, Dr Mahathir Mohamad, in which the former Prime Minister stated that “Muslims have a right to be angry and kill millions of French people for the massacres of the past” and “[b]ut by and large the Muslims have not applied the ‘eye for an eye’ law. Muslims don’t. The French shouldn’t. Instead the French should teach their people to respect other people’s feelings.” The user did not add a caption alongside the screenshots. Facebook removed the post for violating its policy on hate speech. The user indicated in their appeal to the Oversight Board that they wanted to raise awareness of the former Prime Minister’s “horrible words”.

• 2020-002-FB-UA: A user posted two well-known photos of a deceased child lying fully clothed on a beach at the water’s edge. The accompanying text (in Burmese) asks why there is no retaliation against China for its treatment of Uyghur Muslims, in contrast to the recent killings in France relating to cartoons. The post also refers to the Syrian refugee crisis. Facebook removed the content for violating its hate speech policy. The user indicated in their appeal to the Oversight Board that the post was meant to disagree with people who think that the killer is right and to emphasise that human lives matter more than religious ideologies.

• 2020-003-FB-UA: A user posted alleged historical photos showing churches in Baku, Azerbaijan, with accompanying text stating that Baku was built by Armenians and asking where the churches have gone. The user stated that Armenians are restoring mosques on their land because it is part of their history. The user said that the “т.а.з.и.к.и” are destroying churches and have no history. The user stated that they are against “Azerbaijani aggression” and “vandalism”. The content was removed for violating Facebook’s hate speech policy. The user indicated in their appeal to the Oversight Board that their intention was to demonstrate the destruction of cultural and religious monuments.

• 2020-004-IG-UA: A user in Brazil posted a picture on Instagram with a title in Portuguese indicating that it was to raise awareness of signs of breast cancer. Eight photographs within the picture showed breast cancer symptoms with corresponding explanations of the symptoms underneath. Five of the photographs included visible and uncovered female nipples. The remaining three photographs included female breasts, with the nipples either out of shot or covered by a hand. Facebook removed the post for violating its policy on adult nudity and sexual activity. The post has a pink background, and the user indicated in a statement to the Oversight Board that it was shared as part of the national “Pink October” campaign for the prevention of breast cancer.

• 2020-005-FB-UA: A user in the US was prompted by Facebook’s “On This Day” function to reshare a “memory” in the form of a post that the user made two years ago. The user reshared the content. The post (in English) is an alleged quote from Joseph Goebbels, the Reich Minister of Propaganda in Nazi Germany, on the need to appeal to emotions and instincts, instead of intellect, and on the unimportance of truth. Facebook removed the content for violating its policy on dangerous individuals and organisations. The user indicated in their appeal to the Oversight Board that the quote is important as the user considers the current US presidency to be following a fascist model

Public comments on the cases can be submitted via the FOB’s website — but only for seven days (closing at 8:00 Eastern Standard Time on Tuesday, December 8, 2020).

The FOB says it “expects” to decide on each case — and “for Facebook to have acted on this decision” — within 90 days. So the first ‘results’ from the FOB, which only began reviewing cases in October, are almost certainly not going to land before 2021.

Panels comprised of five FOB members — including at least one from the region “implicated in the content” — will be responsible for deciding whether the specific pieces of content in question should stay down or be put back up.

Facebook’s outsourcing of a fantastically tiny subset of content moderation considerations to a subset of its so-called ‘Oversight Board’ has attracted plenty of criticism (including inspiring a mirrored unofficial entity that dubs itself the Real Oversight Board) — and no little cynicism.

Not least because it’s entirely funded by Facebook; structured as Facebook intended it to be structured; and with members chosen via a system devised by Facebook.

If it’s radical change you’re looking for, the FOB is not it.

Nor does the entity have any power to change Facebook policy — it can only issue recommendations (which Facebook can choose to entirely ignore).

Its remit does not extend to being able to investigate how Facebook’s attention-seeking business model influences the types of content being amplified or depressed by its algorithms, either.

And the narrow focus on content taken downs — rather than content that’s already allowed on the social network — skews its purview, as we’ve pointed out before.

So you won’t find the board asking tough questions about why hate groups continue to flourish and recruit on Facebook, for example, or robustly interrogating how much succour its algorithmic amplification has gifted to the antivaxx movement.  By design, the FOB is focused on symptoms, not the nation-sized platform ill of Facebook itself. Outsourcing a fantastically tiny subset of content moderations decisions can’t signify anything else.  

With this Facebook-commissioned pantomime of accountability the tech giant will be hoping to generate a helpful pipeline of distracting publicity — focused around specific and ‘nuanced’ content decisions — deflecting plainer but harder-hitting questions about the exploitative and abusive nature of Facebook’s business itself, and the lawfulness of its mass surveillance of Internet users, as lawmakers around the world grapple with how to rein in tech giants.  

The company wants the FOB to reframe discussion about the culture wars (and worse) that Facebook’s business model fuels as a societal problem — pushing a self-serving ‘fix’ for algorithmically fuelled societal division in the form of a few hand-picked professionals opining on individual pieces of content, leaving it free to continue defining the shape of the attention economy on a global scale. 

BlackBerry shares shot up in early trading on news that the company will partner with Amazon Web Services to jointly develop and market its vehicle data integration and monitoring platform, IVY.

BlackBerry stock was up 35% or $2.11 at the opening bell on the New York Stock Exchange. It’s a sign of both the potential market for smart vehicle services and the ability of Amazon businesses to turn boost the fortunes of businesses with its attention.

The former undisputed heavyweight of the smartphone market, BlackBerry has transformed itself into a provider of business security and information integration services and it’s through this transformation that the company attracted the attention of Amazon’s web services business.

The companies first announced a collaboration in the pre-pandemic January of 2020 when BlackBerry said it would collaborate with AWS on connected vehicle safety and security services for in-vehicle applications.

Around 175 million vehicles are already using BlackBerry and AWS-enabled QNX service, which was first launched five years ago.

“In the past five years we’ve gone from BlackBerry QNX technology helping to power 60 million cars to today’s announcement of more than 175 million – a nearly threefold increase and a testament to the fact that today’s leading automakers and their tier one suppliers continue to put their trust in BlackBerry and our ability to provide them with safe and secure software upon which the next generation of vehicles is being built,” said John Chen, Executive Chairman and CEO, BlackBerry.

The newest iteration of connected car services from the Waterloo, Canada-based company allows automakers to read vehicle sensor data coming off of equipment from multiple vendors, normalize that data and provide insights around the data for use either remotely or in vehicles.

The IVY software system can run inside a vehicle’s embedded systems, but configured from the cloud to let automakers providers drivers with features that can include indications about road conditions, driver performance, or battery use for electric vehicles.

The BlackBerry toolkit can also make it easier for automakers to collaborate with a wider pool of developers to create new services around vehicle performance optimization, reduce maintenance costs and perform remote software updates on vehicles. Call it the potential for the Tesla-fication of a broad class of vehicles that use the service.

“Data and connectivity are opening new avenues for innovation in the automotive industry, and BlackBerry and AWS share a common vision to provide automakers and developers with better insights so that they can deliver new services to consumers,” said John Chen, Executive Chairman and CEO, BlackBerry, in a statement. “This software platform promises to bring an era of invention to the in-vehicle experience and help create new applications, services, and opportunities without compromising safety, security, or customer privacy. We are pleased to expand our relationship with AWS to execute this vision and deliver BlackBerry IVY.”

Meanwhile… The Internet has jokes.

With the pandemic playing havoc with children’s education EdTech startups have been on a roll. A new fundraising seems to come almost every week at this point.

Today it’s Novakid’s turn. This EdTech startup is yet another ‘learning English as a second language for children’ startup. But it at least has a chance among the plethora of solutions out there, having raised a $4.25 million Series A financing led by Hungary-based PortfoLion (part of OTP, a leading banking group in Eastern Europe), alongside a prominent EdTech-focused US fund LearnStart. LearnStart is part of the LearnCapital VC which has previously backed VIPKID and Brilliant.org. TMT Investments and Xploration Capital also joined the round. Both seed investors – South Korea-based BonAngels, as well as LETA Capital, took part in this financing round in January this year, of $1.5M.

Novakid’s teaching method is based around the ideas of language acquisition by Asher, Thornbury, Krashen and Chomsky, and it is specifically suited for children aged 4-12. It is incorporated in the US with development and customer support around Europe.

Max Azarow, Co-founder and CEO said: “Novakid is reinventing English learning for kids in countries where English is not a primary spoken language. There, English would usually be taught as an abstract subject, with focus on grammar and with little live practice offered. Novakid on the other hand, implements a unique format that combines a highly-interactive digital curriculum and with individual live tutor sessions where students & tutor only speak English for a 100% language immersion.”

Aurél Påsztor, Partner at PortfoLion, commented: “Novakid attracted investor attention due to its excellent traction, which resulted in over 500% growth year-on-year both in terms of number of students and in terms of revenue. Other attractive points were strong customer retention, international business footprint and a solid monetization via paid subscriptions.”

For all the ways that the Silicon Valley scene excels, diversity and inclusion is not one of them. But a new startup called Fundr is looking to do the heavy lifting to help investors diversify their portfolio.

Fundr is an investment marketplace founded by Lauren Washington, Boris Moyston, and Jean-Philippe Desmontils. The platform is aimed at angel investors, but available to institutional VCs as well, to do the vetting and due diligence across the startup ecosystem that angels don’t always have the resources to pull off on their own.

Here’s how it works:

Startups apply to the platform and share in-depth quantitative data about their market, team, traction, and background, which ultimately results in a Fundr score assigned to each company. This score determines how much that company is able to raise, or if they’re even eligible to be on the platform to begin with.

Fundr then uses that information to put these companies in a diversified portfolio. In fact, today Fundr is announcing its first portfolio of 15 startups out of more than 450 global applications.

Investors can then write a check to invest into that portfolio, with the ability to opt out of investing in certain companies or allocate more of their funds to their top picks. The goal is to raise $1.5 million and invest $100k into all 15 companies, with plans to close fundraising for this portfolio on December 11.

According to Fundr, there are more than 13.6 million accredited investors out there, only three percent are actively angel investing. Washington explained that the major barriers to angel investing are time, resources, and access to high-quality startups. Moreover, broad indexing at the seed stage usually outperforms individual investor selection by upwards of 90 percent over ten years, according to the company.

Within Fundr’s first portfolio, ten industries are represented (including clean energy, AI, blockchain and fintech). Fifty-six percent of founders in the portfolio identify as underrepresented people of color, and 44 percent identify as female, with 75 percent of founders hailing from outside traditional tech hubs like Silicon Valley and New York.

Washington said that the company tested its algorithm at the Black Women Talk Tech international pitch competition this year, and correctly predicted the winner. It took a seasoned team of investors six hours to come to the same conclusion.

Fundr is bootstrapped save for $100,000 that it raised through an Austin-based accelerator, and plans to first raise for its new portfolio before it raises more funding for itself.

You can check out the full list of startups in Fundr’s portfolio right here.

NTreatment, a technology company that manages electronic health and patient records for doctors and psychiatrists, left thousands of sensitive health records exposed to the internet because one of its cloud servers wasn’t protected with a password.

The cloud storage server server was hosted on Microsoft Azure and contained 109,000 files, a large portion of which contained lab test results from third-party providers like LabCorp, medical records, doctor’s notes, insurance claims, and other sensitive health data for patients across the U.S., a class of data considered protected health information under the Health Insurance Portability and Accountability Act (HIPAA). Running afoul of HIPAA can result in steep fines.

None of the data was encrypted, and nearly all of the sensitive files were viewable in the browser. Some of the medical records belonged to children.

TechCrunch found the exposed data as part of a separate investigation. It wasn’t initially clear who owned the storage server, but many of the electronic health records that TechCrunch reviewed in an effort to trace the source of the data spillage were tied to doctors and psychiatrists and healthcare workers working at hospitals or networks known to use nTreatment. The storage server also contained some internal company documents, including a non-disclosure agreement with a major prescriptions provider.

The data was secured on Monday after TechCrunch contacted the company. In an email, NTreatment co-founder Gregory Katz said the server was “used as a general purpose storage,” but did not say how long the server was exposed.

Katz said the company would notify affected providers and regulators of the incident.

It’s the latest in a series of incidents involving the exposure of medical data. Earlier this year we found a bug in LabCorp’s website that exposed thousands of lab results, and reported on the vast amounts of medical imaging floating around the web.

Qualcomm kicked off an all-virtual version of its annual summit this morning by announcing the launch of the the Snapdragon 888 platform. The chipmaker is clearly saving some key information for later in the virtual event, because it has yet to reveal a ton about its next SoC.

We do, however, have an extremely modest quote from Qualcomm president Cristiano Amon to go on: “Creating premium experiences takes a relentless focus on innovation. It takes long-term commitment, even in the face of immense uncertainty. It takes an organization that’s focused on tomorrow, to continue to deliver the technologies that redefine premium experiences.”

Granted, that’s more self-congratulatory than legitimately helpful. We do know that some key device makers have signed up to include the chip on future handsets, including ASUS, Black Shark, LG, MEIZU, Motorola, Nubia, realme, OnePlus, OPPO, Sharp, vivo, Xiaomi and ZTE.

Also, Qualcomm when ahead and blew past the expected 875. The company tells TechCrunch,

8 has always been a special number for Snapdragon. For over a decade, the number 8 has stood for premium. The Snapdragon 8-series is comprised of our premium tier mobile platforms, which is where we debut our latest technology innovations that will power the next generation mobile experiences. Year after year, these advancements are not only firsts for Snapdragon, but also for the mobile industry. Especially this year, 5G is rapidly expanding globally and creating new experiences and new opportunities, which are far beyond the industry’s expectation. Snapdragon is the platform of choice to deliver those 5G experiences to more consumers worldwide.

The number 8 is also a lucky number around the world. For some, it signifies infinity, success or inner wisdom, while for others it symbolizes luck. For example, in India the number 8 is known as Ashtha, Asta, or Ashta in Sanskrit and is the number of wealth and abundance. While in Chinese numerology 888 is a representation of triple luck.

So, not dissimilar from moves we’ve seen from handset makers like OnePlus. Naturally, 5G is on board. The chip will sport the company’s third-gen X60 5G modem, which sports both sub-6 and mmWave 5G bands. There’s also a 6th-gen AI Engine, capable of performing 26 tera operations per second (TOPS) with improved power efficiency.

Imaging is, naturally, a big piece of the puzzle, as well. The 888 features an up to 35% faster ISP, with support for up to 2.7 gigapixels per second (~120 12-megapixel photos). Gaming performance has also been improved, courtesy of an update to its Elite Gaming platform. More info — including the first few smartphones to sport the new SoC — soon, no doubt.

This morning Airbnb released an S-1/A filing that details its initial IPO price range. The home-sharing unicorn intends to price its shares between $44 and $50 per share in its debut.

Per the company’s own accounting, it will have 596,399,007 or 601,399,007 shares outstanding, depending on whether its underwriters exercise their option. That gives the company a valuation range of $26.2 billion to $30.1 billion at the extremes.

The company’s simple share count does not include a host of other shares that have vested but not yet been exercised. Including those shares, the company’s fully diluted valuation stretches to $35 billion, by CNBC’s arithmetic.

---

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

---

The top-end of Airbnb’s simple valuation places it near its Series F valuation set in 2017. Its fully-diluted valuation exceeds that $30.5 billion valuation and is far superior to the $18 billion, post-money valuation that it raised at during its troubled period early in the COVID-19 pandemic.

For those investors, Silver Lake and Sixth Street, the company’s initial IPO price range is a win. For the company’s preceding investors, to see the company appear ready to at least match its preceding private valuation is a win as well, given how much damage Airbnb’s business sustained early in the pandemic.

But how do those Airbnb valuation numbers match up against its revenues, and will public market investors value the company based on its current results, or expectations for a return-to-form once a vaccine comes to market? And if so, is Airbnb expensive or not?

Expectations, hopes and hype

Shares of Booking Holdings, which owns travel services like Kayak, Priceline, OpenTable and others, have almost doubled in value since its pandemic lows and is within spitting distance of its all-time highs. This despite its revenues falling 48% in its most recent quarter. There’s optimism in the market that travel companies are on the cusp of a return to form, buoyed — we presume — by good news regarding effective coronavirus vaccines.

My expectation is that Airbnb is enjoying a similar bump, as investors intend to buy its shares not to bask in awe of its Q4 2020 results, but instead to enjoy what happens in the back half of 2021 as vaccines roll out and the travel industry recovers.

But happens if we stack Airbnb’s revenues against its valuation today?

The Libra Association, a consortium created by Facebook to support its Libra cryptocurrency efforts, announced this morning that it has a new name — the Diem Association — and made some key hires ahead of its launch.

This is just the latest course correction since the Libra project was announced last year. In an attempt to appease financial regulators around the world, the association shifted its strategy away from creating a global stablecoin and will instead launch multiple stablecoins, each tied to a different fiat currency (such as the U.S. dollar and the euro).

The project has also seen some high-profile departures, with announced partners like Visa and Stripe leaving the project. And Facebook has rebranded its cryptocurrency wallet, changing the name from Calibra to Novi.

In a statement, Diem Association CEO Stuart Levey more-or-less acknowledged that the new name is an attempt to distance the group from Facebook, and from its earlier controversies.

“The Diem project will provide a simple platform for fintech innovation to thrive and enable consumers and businesses to conduct instantaneous, low-cost, highly secure transactions,” Levey said. “We are committed to doing so in a way that promotes financial inclusion – expanding access to those who need it most, and simultaneously protecting the integrity of the financial system by deterring and detecting illicit conduct. We are excited to introduce Diem – a new name that signals the project’s growing maturity and independence.”

As for the new hires, they include Chief Technology Officer Dahlia Malkhi, Chief of Staff Christy Clark, Chief Legal Officer Steve Bunnel and Executive Vice President for Growth and Innovation/Deputy General Counsel Kiran Raj. Diem Networks, the subsidiary that will actually operate the Diem payment system, has also hired James Emmett as managing director, Sterling Daines as chief compliance officer, Ian Jenkins as chief financial and risk officer and Saumya Bhavsar as general counsel.

While today’s announcement doesn’t include any specifics about timing, it suggests the association is positioning itself for an imminent launch — albeit one that will “proceed only upon receiving regulatory approval, including a payment systems license for the operational subsidiary of the Association from FINMA.”