Welcome back to This Week in Apps, the TechCrunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

Top Stories

Apple reduces App Store commissions to 15% for ‘vast majority’ of developers

The changes apply to developers with less than $1 million in revenue.

Apple this week announced a major shakeup to its App Store commission rate. The company, as of January 1, 2021, will only charge App Store developers 15% on paid apps and in-app purchases if their business has not exceeded $1 million in proceeds during 2020 for all their apps combined. Qualification for the new App Store Small Business Program, as it’s called, will be re-assessed revenues on an annual basis going forward.

The changes arrive at a time when Apple has been under increased regulatory scrutiny over how its App Store operates, which includes antitrust investigations in the U.S. and E.U. It has also waged war with developers throughout the year over in-app purchases, leading the company to revise its already complex rules even further, and spell out how and when it gets to charge its so-called “Apple tax.” And it’s in the middle of a nasty legal battle with Fortnite maker Epic Games, which doesn’t want to be forced to use Apple payments or even, necessarily, the App Store.

The commission changes may help silence some disgruntled voices from the wider app development community, while giving Apple a way to show regulators that it’s enabling fair competition.

However, several of Apple’s largest and harshest critics reacted negatively to the news.

The advocacy group, the Coalition for App Fairness, which includes Epic, Basecamp, Deezer, Match Group, Spotify and many others, said: “developers want a level playing field from Apple, not a symbolic gesture.” They argued that Apple still owns the customer relationship, the threshold of $1M is arbitrary, and they said the majority of developers who “generate livable revenue,” won’t benefit.

Match, Spotify and Epic separately echoed these sentiments in statements of their own.

Apple, though, had claimed the change would benefit the “vast majority” of the App Store development community. Today its App Store hosts 1.8 million apps that reach more than 1.5 billion Apple devices.

Individual developers we spoke to, including those who would qualify for the program, weren’t complaining. And many were fairly surprised by Apple’s move.

“I think it’s fair to say that this change wouldn’t have happened without either the impending antitrust investigations, or the Epic lawsuit. But something can be both a very clever piece of political manoeuvring, and still genuinely welcome and beneficial to the vast majority of developers out there,” said indie developer James Thomson, maker of the PCalc app and others.

“We fall significantly under the million dollar threshold, so we’re looking at roughly a 20% increase in our income under the new system. We’re in a much better position than most businesses under the pandemic, in that our sales are purely digital and people always need calculators (or dice), but we’ve certainly seen a decrease in sales over the last eight months. I can see the current situation taking a good while to resolve, so that extra revenue is appreciated,” he added. “These changes will particularly help the small developers who have traditionally been the heart of the developer community, and I as happy about this, as I am surprised,” Thomson said.

Others also said they were generally happy with the changes. But some expressed reservations about the details of how the program works.

“Overall, I’m very pleased with this new program,” said developer David Smith, maker of Widgetsmith, Watchsmith, Sleep++ and a range of other iOS apps. “It will help countless small developers who can really benefit from that extra margin. I’m excited for all the indie developers who will now be able to focus full time on their apps just that little bit sooner.”

But Smith noted that it was odd that the program isn’t applied in a way that’s similar to a graduated tax rate, where, he explained, “your first $1M is at 15% and the rest at the higher rate.”

“The proposed system creates an awkward differentiation between developers, and one of the things I’ve always appreciated most about the App Store was that it treats developers equally,” Smith continued. “It also creates a strange disincentive for growth for mid-sized businesses who are approaching the threshold.”

We turned to third-party analytics firms to try to better understand the market.

According to App Annie data, around 98% of all iOS developers in 2019 (meaning, unique publisher accounts) fell under the $1 million annual consumer spend threshold. This supports Apple’s claims that the “vast majority” of developers would benefit. This group of developers accounts for 567,000 unique apps, or 93% of all apps generating revenue through in-app purchases.

Combined, their revenues represented just under 8% of the overall App Store revenue share — in other words, it’s money Apple could stand to lose.

App Annie also found that the group of mid-range developers who are “nearing” that $1 million threshold is really small. The data indicates roughly 0.5% of developers are making between $800,000 and $1 million. And just over 1% are in the $500,000-$800,000 range.

Most developers have much smaller revenue streams, with 87.7% making less than $100,000 in 2019.

Some expressed concern that Apple’s system would unfairly penalize developers who made just $1 over the $1 million threshold, and then trap them at the higher rate (30%).

But others suspected that the percentage of developers who were growing “slowly” at over $800,000 in ARR was actually pretty small.

From the data we’ve collected, it seems that subscription-based apps tend to keep growing fairly quickly once they pass that $1 million threshold. According to data from subscription platform RevenueCat, the apps on its platform grow, on average, at 1.5x year-over-year. So once an app crossed the $1 million threshold, the most likely scenario is that it would make $1.5 million the next year. Plus, the apps that are “nearing” the threshold tend to be growing even faster than the average rate, we understand. And they rarely backslide.

“Apple has made a lot of changes to the App Store over the years, and this is one of the first I’ve seen where there’s really not much to complain about,” said RevenueCat CEO Jacob Eiting. “It’s impactful to the App Store economy broadly and meaningful to individual indie developers. Sure it may have been for PR and they might not have a lot of downside in doing this, but it’s genuinely a great thing for so many developers,” he said.

We’ll have more data on this subject in the weeks ahead. 

Parler’s funders revealed…it’s the Mercers; parents warned about the app

The “Free speech” app Parler rising in the charts after Facebook and Twitter increased fact-checks, turns out to be funded by prominent conservative donor and Trump supporter Rebekah Mercer, The WSJ revealed.

Rebekah is the daughter of Robert Mercer, the hedge fund manager and principal investor in Cambridge Analytica — the data analytics firm behind the largest data leak in Facebook history, where 87 million users had their data harvested for the purposes of political advertising. The Mercers have also backed Breitbart News, the Heritage Foundation think tank, the Federalist Society, a super PAC that initially backed Ted Cruz’s bid for the Republican presidential nomination (before switching to Trump) and Citizens United (which distributed a 2007 anti-Clinton movie and succeeded in a Supreme Court ruling that reversed campaign finance restrictions), among other things.

This week, the nonprofit ParentsTogether issued a warning to parents about Parler, saying that the app’s weak moderation policies and extremist user base put kids at risk of exploitation, abuse and recruitment for racist violence. The organization described Parler as hosting dangerous content, including hate speech, incitements of violence and widespread disinformation.

In addition, the group was concerned that while Apple’s App Store rates the app at 17+, Google Play has it listed as suitable for kids ages 13+.

“All parents of children under age 18 to immediately check their kids’ phones and tablets to ensure that their children have not installed Parler,” the group warned parents, in a statement. “If your child has installed Parler, we strongly recommend that you delete their account and the app.”

Twitter launches Fleets

Twitter this week launched its own version of Stories — aka “Fleets” — to its global user base. The product, which allows users to post ephemeral content that disappears in 24 hours, had already rolled out to select markets, including Brazil, India, Italy, South Korea and, most recently, Japan. The rollout almost immediately ran into some snags, with Fleets suffering performance and stability issues. Twitter said it would pause things while it worked this out. On Thursday, the company announced the feature was globally available.

Reactions to Fleets has been mixed. Some users hate the feature, which is designed to encourage more users to post to Twitter, when they’ve otherwise been too shy to participate — largely because of Twitter’s “cancel culture” vibe where mistakes, bad takes and unpopular opinions are harshly criticized, even when they’re more minor offenses. It’s not clear how a Stories feature resolves this, however, as Fleets are still being published to Twitter’s public social network.

Twitter also said it will begin testing a Clubhouse rival where users will join audio chat rooms.

These changes follow the activities by activist investor Elliott Management Group, which took a sizable stake in Twitter earlier this year, along with Silver Lake. The firms did so with a plan to push the company for more innovation and new executive leadership. The companies later struck a deal to spare Twitter CEO Jack Dorsey’s ousting, gain board seats, and put someone on the board with expertise in technology and artificial intelligence. Dorsey disagreed with the characterization that their involvement had any impact on product development.

Weekly News

Platforms

• Apple’s IDFA is targeted by EU privacy complaints. Apple had already told advertisers they’ll soon have to allow users the option to opt-out of ad tracking, but the new complaints are more about the fact that IDFA was ever created and stored in the first place, and that Apple’s planned changes don’t go far enough as they restrict its use for third parties, but not Apple itself.
• Apple’s Developer Transition Kits (DTKs) help developers get their apps ready for Apple’s silicon. But it turns out they won’t be able to install iOS or iPadOS apps like M1 Macs can.
• Google reminds Android developers they only have until January 18, 2021 to get approval to continue using background location data if they want to stay on Google Play.
• Apple releases a new version of iOS 14.2 for iPhone 12. The update appears to fix the iPhone 12 mini lock screen issue that caused some users’ lock screens to not respond to touches. The update also fixes issues with MMS messages, Made for iPhone hearing devices and more.
• Google also reminds Android developers that, starting Augut 2021, Google Play will require all apps to use the Android App Bundle publishing format and make other changes.
• Apple now allows developers to market and distribute their subscriptions with offer codes. These one-time, alphanumeric codes can be redeemed either on the App Store or within the app itself, allowing developers to acquire and retain customers or win back lapsed subscribers with special deals. Here are some tips on putting them to work.
• Apple’s iOS 14.3, beta 2 indicates that Apple will do away with the intermediate step of opening the Shortcuts app when app shortcuts are launched. This was one of the major pet peeves from the iOS 14 home screen customization trend, where users designed iOS themes using custom icons and widgets.

Services

• Due to Apple’s App Store rules, Google Stadia and Nvidia’s GeForce Now cloud gaming services will both come to iOS as web apps.

Security & Privacy

• Dating app Bumble’s vulnerabilities puts Facebook Likes, locations and pictures of 95 million online daters at risk. Bumble took six months to fix the flaws and says no user data had been compromised.
• TikTok expands parental controls to include search, commenting and account privacy. The company launched Family Pairing in April, allowing parents to link their account to their teen’s in order to manage screen time, direct messaging and whether or not the teen’s account would be in “Restricted” mode — a special mode which limits TikTok’s feed to a safer set of more moderated content. This week, it also gave parents the ability to control whether the teen’s Liked Videos are visible to others, control who can comment on the teen’s videos and decide whether the teen is allowed to use TikTok search.
• Messaging app Go SMS Pro exposed millions of users’ private photos and files. The app, popular on Android, didn’t respond to security researchers about the problem. Typically, companies are given a 90-day deadline before vulnerabilities are made public.

Apps in the News

• Epic Games added video chat to Fortnite, via a Houseparty integration. The company bought the video chat app last year. Players use their phone or tablet as the webcam while they play on PCs, PS4 or PS5.
• Epic Games sues Apple in Australia too. The Fortnite maker is currently in a legal battle in the U.S. over Apple’s requirement to use Apple Pay and pay commissions on in-app purchases. In an interview this week, Epic Games founder Tim Sweeney likened the fight with Apple to a fight for civil rights. (That’s a bit much, we’d say.)
• Snap acquired Voisey, a U.K.-based app that lets users create music tracks and videos by overlaying their own vocals. The app had raise $1.88 million to date, but deal terms weren’t immediately available.

• Google Maps is updated with more COVID info and adds its Assistant driving mode. The COVID layer in Google Maps on Android and iOS can now show the number of all-time detected cases in an area, links to COVID resources from local governments and how busy transit lines are. The driving mode can read texts and lets you control your music from Maps.
• Facebook’s Messenger Kids redesigned to look more like Messenger. The updated app puts chats in a more traditional vertical list, with message and media previews, and bold text and blue dots to indicate their unread status. It also added a new tabbed navigation, which better highlights the separation between apps and games.
• YouTube launches 15-second audio ads aimed at users who listen to music or podcasts while the app plays in the background.
• Apple’s Shazam passes 200 million monthly active users.
• Instagram expands its Guides features and upgrades Search. Guides now allow creators to share tips, resources and other long-form content in a dedicated tab on their profiles. Now, everyone can make guides for Products, Places and Posts. Users can also now search by keywords, instead of just by names, usernames, hashtags and locations.
• Instagram also updates its Threads mobile messaging app. The app now adds a tab for easier navigation between stories and statuses. All users should also now have the tabbed inbox where they can see everyone’s stories, not just close friends, and have the option to publish to stories, not just close friends’ stories.
• Facebook sued an operator of Instagram clone websites. The operator had scraped Instagram data of some 100,000 accounts using its own 30,000 fake accounts that pretended to be humans to avoid detection.

• SoundCloud adds profile verification with official blue checks.
• App Growth Awards announce their finalists. 
• Google launches iOS 14 widgets for Gmail, Drive and Fit. Says Calendar and Chrome widgets will come soon.
• State and federal investigators are preparing to bring antitrust charges against Facebook over its acquisition of Instagram and WhatsApp, The Washington Post reports.
• Twitter and Facebook sat for another congressional tech hearing that again largely served to give lawmakers a chance to just talk about whatever they wanted, instead of the topic at hand: social media’s role during the election. The CEOs were asked about their apps’ addictiveness, their algorithms, their approaches to misinformation and more.

Deadpool

• Google pulls the plug on its Expeditions VR app, and instead migrates the VR tours to its Arts & Culture app. *Checks watch*… is the VR future here yet?

Trends

• U.S. mobile strategy game spending surges 22% to $2.8 billion in the first 10 months of 2020, Sensor Tower reports. The top game by player spending during this time was Clash of Clans, which generated close to $262 million in the U.S.
• Top home screen widget apps have reached 1 in 7 U.S. iPhones, another Sensor Tower report claims. The five most popular apps — Widgetsmith, Color Widgets, Photo Widget: Simple, WidgetBox and Photo Widget — have collectively seen 13 million iPhone installs since the launch of iOS 14. Globally, they’ve reached 45 million installs to date.

 

Funding and M&A (and IPOs)

• Language learning app Duolingo confirms its raise of $35 million on a $2.4 billion valuation. The news was reported last week, but the numbers are now official. The app was valued at $1.65 billion earlier this year.
• Baidu to acquire Joyy’s Chinese live-streaming service YY for $3.6 billion. The search giant has been struggling to fight newcomers, like ByteDance, and video giant Kuaishou. Last year, Joyy’s YY took a $1.45 billion majority stake in Bigo, which operates streaming app Bigo Live and TikTok rival Likee.
• OpenPhone raises $14 million to replace outdated corporate phone systems with an app. Yammer founder David Sacks’ Craft Ventures led the round.
• Flipkart acquires AR startup Scapic to build an immersive shopping experience. Deal terms were undisclosed.
• Athlete social platform Strava raises $110 million in Series F financing from TCV and Sequoia Capital, with by Dragoneer Investment Group and existing investors including Madrone Capital Partners, Jackson Square Ventures and Go4it Capital.
• Yubo raises $47.5 million for its social app offering live-streaming rooms, now used by 40 million users. Existing investors Idinvest Partners, Iris Capital, Alven and Sweet Capital returned, and new investor Gaia Capital Partners joined.
• English learning app AllRight raises $5 million from Genesis Investments. The Ukraine startup combines real teachers with AI-powered tutors.
• ContextLogic, the maker of the mobile e-commerce app Wish, filed to go public. Wish saw revenues slow in 2019, but has grown more quickly in 2020. In the first nine months of 2019, Wish generated $1.33 billion in revenue compared with $1.75 billion during the same period in 2020, or up 32%.
• Roblox files for its IPO, noting it has lost $206 million on $589 million in revenue, has 31.1 million daily active users who now spend up to 22.2 billion hours in app, a figure up 122% year-over-year.

Downloads

Amazon’s GameOn

Amazon this week launched GameOn for Android, an app that lets users record 30-second to five-minute long gameplay clips — including through a “Recall” feature that saves the clip after it happens. Clips are then shared the GameOn social network or elsewhere on social media. The app supports more than 1,000 games at launch, including PUBG Mobile, Crossy Road, Final Fantasy Brave Exvius and Angry Birds 2. A selfie camera lets gamers add their own commentary to the clips. Winners of weekly challenges get special profile badges. The launch follows Amazon’s release of its cloud gaming platform Luna.

Google Pay

Google Pay launched a major redesign of its app on Android and iOS this week with a ton of new features, including a mobile bank account. The company partnered with 11 banks, including Citi and Stanford Federal Credit Union, to launch Plex, a mobile banking service where accounts are held at partner banks but Google Pay operates as the front end. Plex users will have no monthly fees, overdraft charges or minimum balances and can pay both businesses and friends from their account. They can also explore offers and rewards to save money while shopping and get spending insights, including from their connected bank accounts outside the app. Another new feature makes it easier to split bills with friends, like restaurant checks, rent or utilities.

Moment’s RTRO app

RTRO, launched earlier this year, offers a way to record and share vintage-looking photos and video. This week, the app was updated with “Instant Film,” which lets you emulate instant film photos powered by the app’s “analog effects engine.” The resulting photos will give you the feel of a instant camera pic.

SpaceX is set to launch a Falcon 9 from Vandenberg Air Force Base in California on Saturday morning, with a target liftoff time of 9:17 AM PST (12:17 PM EST). This is the Sentinel-6 Michael Freilich Mission, which carries a satellite of the same name developed by the European Space Agency, NASA, and both U.S. and European meteorological monitoring bodies.

The Sentinel-6 is named for former NASA Earth Science Division Director Michael Freilich, who occupied the position between 2006 and 2019 and passed away in August. It’s one of two Sentinel-6-series satellites that will be launched for the program, with the Sentinel-6B set to join the Sentinel-6 Michael Freilich sometime in 2025.

SpaceX will be looking to recover the Falcon 9 first stage booster with a powered landing back on Earth at Landing Zone 4 at Vandenberg. This is the first SpaceX launch from Vandenberg since June of last year, though it has flown plenty of missions from both Cape Canaveral Air Force Station and Kennedy Space Center in Florida.

The webcast above will go live approximately 15 minutes prior to the liftoff time, so at around 9:02 AM PST (12:02 PM EST). Should this mission have to be canceled today, there’s a backup opportunity set for Sunday at 9:04 AM PST (12:04 PM PST).

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

This is an all-time first for the show, it’s an Equity Leftovers. Which means that we’re not focusing on a single topic like we would in an Equity Shot. This is just, well, more Equity.

Danny and I and Chris got together to chat about a few things that we could not leave out:

• Our piece looking at which venture capital firms are expected to make the most bank from the recent IPO deluge.
• Roblox’s IPO filing, and our take on its impending debut.
• All things Wish IPO, including what’s up with its revenue costs, and the broader ecommerce market.
• DoorDash’s epic financials, and how COVID helped propel the food delivery giant into the business hall of fame.
• The exit of one of Robinhood’s co-CEOs from the role.
• The HuffPo-Buzzfeed tie-up. And what is up with media companies in general.

And with this, our fourth episode in six days, we shall pause until Monday. Hugs from the Equity crew.

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

Roblox opens its books, Snap makes an acquisition and Pfizer and BioNTech seek regulatory approval for their vaccine. This your Daily Crunch for November 20, 2020.

The big story: Roblox is going public

The child-friendly gaming company filed confidentially to go public in October, but it only published its S-1 document with financial information late yesterday.

How do the numbers look? Well, Roblox is certainly growing quickly — total revenue increased 56% in 2019, and then another 68% in the first three quarters of 2020, when it saw $588.7 million in revenue. At the same time, losses are growing as well, nearly quadrupling to $203.2 million during those same three quarters.

The company also acknowledged that its success depends on its ability to “provide a safe online environment” for children. Otherwise, “business will suffer dramatically.”

The tech giants

Snap acquired Voisey, an app to create music tracks overlaying your own vocals — Voisey users can apply audio filters to their voices, and they can browse and view other people’s Voisey tracks.

Despite commitment to anti-racism, Uber’s Black employee base has decreased — Uber’s latest diversity report shows a decline in the overall representation of Black employees in the U.S.

Google, Facebook and Twitter threaten to leave Pakistan over censorship law — This comes after Pakistan’s government granted blanket powers to local regulators to censor digital content.

Startups, funding and venture capital

Loadsmart raises $90M to further consolidate its one-stop freight and logistics platform — Loadsmart offers booking for freight transportation across land, rail and through ports, all from a single online portal.

ORIX invests $60M in Israeli crowdfunding platform OurCrowd — OurCrowd also says that the two groups will collaborate to create financial products and investment opportunities for the Japanese and global market.

Kea raises $10M to build AI that helps restaurants answer the phone — CEO Adam Ahmad says the startup has created a “virtual cashier” who can do the initial intake with customers, process most routine orders and bring in a human employee when needed.

Advice and analysis from Extra Crunch

If you didn’t make $1B this week, you are not doing VC right — Don’t yell at me, Danny Crichton said it!

Why is GoCardless COO Carlos Gonzalez-Cadenas pivoting to become a full-time VC — “I think this is the best moment in entrepreneurship in Europe.”

What is Roblox worth? — A deeper dive into Roblox’s numbers.

(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Pfizer and BioNTech to submit request for emergency use approval of their COVID-19 vaccine today — These emergency approvals still require supporting information and safety data, but they are fast-tracked relative to the full, formal and more permanent approval process.

Mixtape podcast: Building a structural DEI response to a systemic issue with Y-Vonne Hutchinson — Hutchinson is the CEO of ReadySet, a consulting firm that works with companies to create more inclusive and equitable work environments.

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.

DoorDash, Affirm, Roblox, Airbnb, C3.ai and Wish all filed to go public in recent days, which means some venture capitalists are having the best week of their lives.

Tech companies that go public capture our imagination because they are literal happy endings. An Initial Public Offering is the promised land for startup pilgrims who may wander the desert for years seeking product-market fit. After all, the “I” in “ISO” stands for “incentive.”

A flurry of new S-1s in a single week forced me to rearrange our editorial calendar, but I didn’t mind; our 360-degree coverage let some of the air out of various hype balloons and uncovered several unique angles.

For example: I was familiar with Affirm, the service that lets consumers finance purchases, but I had no idea Peloton accounted for 30% of its total revenue in the last quarter.

“What happens if Peloton puts on the brakes?” I asked Alex Wilhelm as I edited his breakdown of Affirm’s S-1. We decided to use that as the subhead for his analysis.

The stories that follow are an overview of Extra Crunch from the last five days. Full articles are only available to members, but you can use discount code ECFriday to save 20% off a one or two-year subscription. Details here.

Thank you very much for reading Extra Crunch this week; I hope you have a relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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What is Roblox worth?

Gaming company Roblox filed to go public yesterday afternoon, so Alex Wilhelm brought out a scalpel and dissected its S-1. Using his patented mathmagic, he analyzed Roblox’s fundraising history and reported revenue to estimate where its valuation might land.

Noting that “the public markets appear to be even more risk-on than the private world in 2020,” Alex pegged the number at “just a hair under $10 billion.”

What China’s fintech can teach the world

For all the hype about new forms of payment, the way I transact hasn’t been radically transformed in recent years — even in tech-centric San Francisco.

Sure, I use NFC card readers to tap and pay and tipped a street musician using Venmo last weekend. But my landlord still demands paper checks and there’s a tattered “CASH ONLY” taped to the register at my closest coffee shop.

In China, it’s a different story: Alibaba’s employee cafeteria uses facial recognition and AI to determine which foods a worker has selected and who to charge. Many consumers there use the same app to pay for utility bills, movie tickets and hamburgers.

“Today, nobody except Chinese people outside of China uses Alipay or WeChat Pay to pay for anything,” says finance researcher Martin Chorzempa. “So that’s a big unexplored side that I think is going to come into a lot of geopolitical risks.”

Inside Affirm’s IPO filing: A look at its economics, profits and revenue concentration

Consumer lending service Affirm filed to go public on Wednesday evening, so Alex used Thursday’s column to unpack the company’s financials.

After reviewing Affirm’s profitability, revenue and the impact of COVID-19 on its bottom line, he asked (and answered) three questions:

• What does Affirm’s loss rate on consumer loans look like?
• Are its gross margins improving?
• What does the unicorn have to say about contribution profit from its loans business?

If you didn’t make $1B this week, you are not doing VC right

“The only thing more rare than a unicorn is an exited unicorn,” observes Managing Editor Danny Crichton, who looked back at Exitpalooza 2020 to answer “a simple question — who made the money?”

Covering each exit from the perspective of founders and investors, Danny makes it clear who’ll take home the largest slice of each pie. TL;DR? “Some really colossal winners among founders, and several venture firms walking home with billions of dollars in capital.

5 questions from Airbnb’s IPO filing

The S-1 Airbnb released at the start of the week provided insight into the home-rental platform’s core financials, but it also raised several questions about the company’s health and long-term viability, according to Alex Wilhelm:

• How far did Airbnb’s bookings fall during Q1 and Q2?
• How far have Airbnb’s bookings come back since?
• Did local, long-term stays save Airbnb?
• Has Airbnb ever really made money?
• Is the company wealthy despite the pandemic?

Autodesk CEO Andrew Anagnost explains the strategy behind acquiring Spacemaker

Earlier this week, Autodesk announced its purchase of Spacemaker, a Norwegian firm that develops AI-supported software for urban development.

TechCrunch reporter Steve O’Hear interviewed Autodesk CEO Andrew Anagnost to learn more about the acquisition and asked why Autodesk paid $240 million for Spacemaker’s 115-person team and IP — especially when there were other startups closer to its Bay Area HQ.

“They’ve built a real, practical, usable application that helps a segment of our population use machine learning to really create better outcomes in a critical area, which is urban redevelopment and development,” said Anagnost.

“So it’s totally aligned with what we’re trying to do.”

Unpacking the C3.ai IPO filing

On Monday, Alex dove into the IPO filing for enterprise artificial intelligence company C3.ai.

After poring over its ownership structure, service offerings and its last two years of revenue, he asks and answers the question: “is the business itself any damn good?”

Is the internet advertising economy about to implode?

In his new book, “Subprime Attention Crisis,” writer/researcher Tim Hwang attempts to answer a question I’ve wondered about for years: does advertising actually work?

Managing Editor Danny Crichton interviewed Hwang to learn more about his thesis that there are parallels between today’s ad industry and the subprime mortgage crisis that helped spur the Great Recession.

So, are online ads effective?

“I think the companies are very reticent to give up the data that would allow you to find a really definitive answer to that question,” says Hwang.

Will Zoom Apps be the next hot startup platform?

Even after much of the population has been vaccinated against COVID-19, we will still be using Zoom’s video-conferencing platform in great numbers.

That’s because Zoom isn’t just an app: it’s also a platform play for startups that add functionality using APIs, an SDK or chatbots that behave like smart assistants.

Enterprise reporter Ron Miller spoke to entrepreneurs and investors who are leveraging Zoom’s platform to build new applications with an eye on the future.

“By offering a platform to build applications that take advantage of the meeting software, it’s possible it could be a valuable new ecosystem for startups,” says Ron.

Will edtech empower or erase the need for higher education?

Without an on-campus experience, many students (and their parents) are wondering how much value there is in attending classes via a laptop in a dormitory.

Even worse: Declining enrollment is leading many institutions to eliminate majors and find other ways to cut costs, like furloughing staff and cutting athletic programs.

Edtech solutions could fill the gap, but there’s no real consensus in higher education over which tools work best. Many colleges and universities are using a number of “third-party solutions to keep operations afloat,” reports Natasha Mascarenhas.

“It’s a stress test that could lead to a reckoning among edtech startups.”

3 growth tactics that helped us surpass Noom and Weight Watchers

I look for guest-written Extra Crunch stories that will help other entrepreneurs be more successful, which is why I routinely turn down submissions that seem overly promotional.

However, Henrik Torstensson (CEO and co-founder of Lifesum) submitted a post about the techniques he’s used to scale his nutrition app over the last three years. “It’s a strategy any startup can use, regardless of size or budget,” he writes.

According to Sensor Tower, Lifesum is growing almost twice as fast as Noon and Weight Watchers, so putting his company at the center of the story made sense.

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Every year, we ask TechCrunch reporters, VCs and our Extra Crunch readers to recommend their favorite books.

Have you read a book this year that you want to recommend? Send an email with the title and a brief explanation of why you enjoyed it to bookclub@techcrunch.com.

We’ll compile the suggestions and publish the list as we get closer to the holidays. These books don’t have to be published this calendar year — any book you read this year qualifies.

Please share your submissions by November 30.

Dear Sophie: Can an H-1B co-founder own a Delaware C Corp?

Dear Sophie:

My VC partner and I are working with 50/50 co-founders on their startup — let’s call it “NewCo.” We’re exploring pre-seed terms.

One founder is on a green card and already works there. The other founder is from India and is working on an H-1B at a large tech company.

Can the H-1B co-founder lead this company? What’s the timing to get everything squared away? If we make the investment we want them to hit the ground running.

— Diligent in Daly City

FoodBoss aims to be something like Kayak for online food ordering — the place where you can search across different service and apps to find the lowest prices and fastest delivery times.

One limitation, however, is the fact that the service was limited to third-party services like Uber Eats and Postmates, with no way to order from the restaurant itself — until recently, with the launch of a new feature called Restaurant Direct.

FoodBoss co-founder and CEO Michael DiBinedetto said that restaurants are placing an increasing emphasis on accepting delivery and pickup orders directly, both to save on the fees they pay to third-party services, and also to have a direct relationship with their customers.

“The main problem is they spent all this money to build out the [ordering] infrastructure, but they don’t necessarily know that they have to spend marketing dollars to drive consumers to their site or app,” DiBinedetto said. “That’s where we’re really helping.”

Restaurant Direct may present some additional technical hurdles, because it will require FoodBoss to integrate with a variety of ordering systems. DiBinedetto said the company will be connecting through APIs in some cases and can also work directly with restaurant IT departments.

He emphasized that FoodBoss will remain agnostic about how you order — the goal is just to show you all the options, and to highlight the ordering method that best matches your priorities.

“At FoodBoss, we’re focused on making sure we’re helping third parties and [restaurants] have a lower overall marketing cost,” DiBinedetto continued. “Everybody wants to be profitable on delivery.”

The first restaurant available through Restaurant Direct is Lou Malnati’s in Chicago, with plans to add Sbarro in multiple markets next year. In a statement, Lou Malnati’s President Heather Stege said, “The challenge for restaurants is being able to serve customers through the users preferred channels, while still providing them with exceptional food. FoodBoss helps simplify that by offering multiple options, including our own, to attract customers.”

FoodBoss aims to be something like Kayak for online food ordering — the place where you can search across different service and apps to find the lowest prices and fastest delivery times.

One limitation, however, is the fact that the service was limited to third-party services like Uber Eats and Postmates, with no way to order from the restaurant itself — until recently, with the launch of a new feature called Restaurant Direct.

FoodBoss co-founder and CEO Michael DiBinedetto said that restaurants are placing an increasing emphasis on accepting delivery and pickup orders directly, both to save on the fees they pay to third-party services, and also to have a direct relationship with their customers.

“The main problem is they spent all this money to build out the [ordering] infrastructure, but they don’t necessarily know that they have to spend marketing dollars to drive consumers to their site or app,” DiBinedetto said. “That’s where we’re really helping.”

Restaurant Direct may present some additional technical hurdles, because it will require FoodBoss to integrate with a variety of ordering systems. DiBinedetto said the company will be connecting through APIs in some cases and can also work directly with restaurant IT departments.

He emphasized that FoodBoss will remain agnostic about how you order — the goal is just to show you all the options, and to highlight the ordering method that best matches your priorities.

“At FoodBoss, we’re focused on making sure we’re helping third parties and [restaurants] have a lower overall marketing cost,” DiBinedetto continued. “Everybody wants to be profitable on delivery.”

The first restaurant available through Restaurant Direct is Lou Malnati’s in Chicago, with plans to add Sbarro in multiple markets next year. In a statement, Lou Malnati’s President Heather Stege said, “The challenge for restaurants is being able to serve customers through the users preferred channels, while still providing them with exceptional food. FoodBoss helps simplify that by offering multiple options, including our own, to attract customers.”

The last time we wrote about JoyRun, it was raising $10 million. Today, the Bay Area startup has some very different news to share, as it becomes part of Walmart as Walmart has purchased select assets in a bid to enhance its supply chain. The mega-retailer announced today that it has acquired “select assets – including the talent, technology platform and IP” from the company, in a bid to incorporate its peer-to-peer food and drink delivery service into its own last-mile logistics.

Walmart EVP Srini Venkatesan notes that the app has amassed a network of 540 third-party merchant partners and north of 30,000 people who have delivered goods with the service since its launch half-a-decade ago. JoyRun’s service is a bit of twist on more standard delivery apps like Seamless and Uber Eats.

As we described it back in 2017, “The company’s app lets people find out who, nearby, is already heading out to a restaurant that they like, then tack on an order of their own.” It will be interesting to see how Walmart integrates this technology into its existing chain, though from the sound it, Walmart would essentially be relying on non-professionals to delivery goods like groceries.

The system would likely operate in a manner like Amazon Flex — a kind of Uber/Lyft gig economy-style approach to delivery.

“This acquisition allows us to further augment our team and ongoing efforts to explore even more ways to deliver for customers in the future,” Venkatesan adds. “For instance, Runners could complement our SPARK program and 3rd Party delivery providers. Our goal is to deliver as quickly and efficiently as possible.”

Walmart expects the deal to close “in the coming weeks,” which will incorporate JoyRun into its Supply Chain Technology team. Terms of the deal were not disclosed.

Kea is a new startup giving restaurants an opportunity to upgrade one of the more old-fashioned ways that they take orders — over the phone.

Today, Kea is announcing that it has raised a $10 million Series A led by Marbruck, with participation from Streamlined Ventures, Xfund, Heartland Ventures, DEEPCORE, Barrel Ventures and AVG Funds, as well as angel investors Raj Kapoor (chief strategy officer at Lyft), Craig Flom (who was on the founding team at Panera Bread), Wingstop franchisee Tony Lam and Five Guys franchisee Jonathan Kelly.

Founder and CEO Adam Ahmad said that with restaurants perpetually understaffed, they usually don’t have someone who can devote their attention to answering the phone. (Many of you, after all, are probably pretty familiar with the experience of calling a restaurant and being immediately placed on hold.)

At the same time, he suggested it remains an important ordering channel — especially during the pandemic, as takeout and delivery has become the biggest source of revenue for many restaurants. The New Yorker’s Helen Rosner put it succinctly when she suggested that anyone who wants to support restaurants should “pick up the damn phone.”

Similarly, Ahmad said that for restaurants, paying substantial third-party ordering fees on all of their orders is “not a sustainable long-term strategy.” So Kea is offering technology that should help restaurants handle more orders over the phone, creating what Ahmad called a “virtual cashier” who can do the initial intake with customers, process most routine orders and bring in a human employee when needed.

The idea of an automated voice assistant may bring back unpleasant memories of trying to call your bank or another Byzantine customer service department. But Ahmad said that while most existing phone systems are “not smart,” Kea’s AI is very different, because it’s just focused on restaurant ordering.

“We’re doing a very closed domain,” he said. “In the pizza world, there are only a couple thousand permutations. We’re not innovating for the whole dictionary — it’s a constrained model, it’s a menu.”

In fact, the Kea team gave me a number to dial where I could try the system out for myself. It was a pretty straightforward and easy process, where I provided my address and then the details of my pizza order. And again, you can transfer to a human employee at any time. (In fact, I was accidentally transferred during my demo, leading me to quickly hang up in embarrassment.)

Kea is already live in more than 250 restaurants including Papa John’s, Donatos and Primanti Brothers, and it says it’s saving them an average of 10 hours of labor per week, with a 23% increase in average order size. With the new funding, Ahmad’s goal is to bring Kea to 1,000 restaurants across 37 states in 2021.

Luminar, the buzzy sensor startup that is on the verge of becoming a publicly traded company, locked in a supplier deal to furnish Intel subsidiary Mobileye with lidar for its fleet of autonomous vehicles.

The deal, announced Friday, will see a rising star paired with a company that has long dominated the automotive industry. While the supplier agreement is nowhere near the scale of Mobileye’s core computer vision business, it is an important collaboration that extends beyond a few pilot programs. Luminar has had a development agreement with Mobileye for nearly two years now. This new agreement signals the next critical step for both companies.

Mobileye’s camera-based sensors are used by most automakers to support advanced driver assistance systems. Today, more than 54 million vehicles have Mobileye technology. But the company, which was acquired by Intel for $15.3 billion in 2017, has branched out in recent years, moving beyond its advanced driver assistance technology and towards the development of a self-driving vehicle system. Two years ago, Mobileye announced plans to launch a kit that includes visual perception, sensor fusion, its REM mapping system and software algorithms.

Mobileye has since ratcheted up its self-driving ambitions and taken what some in the industry see as an unlikely turn to become a robotaxi operator, not just a supplier.

Luminar and Mobileye’s agreement while small at the moment is still a production contract. Luminar’s lidar will be part of Mobileye’s first-generation fleet of driverless vehicles, which are being piloted in Dubai, Tel Aviv, Paris, China and Daegu City, South Korea. Mobileye’s ultimate aim is to expand its robotaxi operations and sell its self-driving stack (or AV series solution) to other companies. Mobileye CEO Ammon Shashua has said the company is targeting commercial robotaxi services to be launched in 2022.

“So you basically have a production deal here to be able to equip their vehicles towards the 2022 launch of their service and power that in parallel to their camera solution to create that safety and redundancy,” Luminar founder and CEO Austin Russell said in a recent interview.

While the first use of this ‘AV series solution’ is for Mobileye’s own internal fleet, Russell is interested in the opportunities that will follow.

“They’ve taken a very different strategy and are very different company than any other kind private AV development company,” Russell said. “These guys have, tens of millions of products deployed on series production vehicles; they know what it takes to put something into series production. So to able to ride that wave and get on the ground floor to be in production vehicles as well was of particular interest for us.”

Luminar has landed other production-level deals. Volvo announced in May that it will start producing vehicles in 2022 that are equipped with lidar and a perception stack Luminar that the automaker will use to deploy an automated driving system for highways. For now, the lidar will be part of a hardware package that consumers can add as an option to a Volvo’s second-generation Scalable Product Architecture vehicles, starting with the XC90. Volvo will combine Luminar’s  lidar with cameras, radar, software and back-up systems for functions such as steering, braking and battery power to enable its highway pilot feature.

Daimler’s trucks division said in October it had invested in Luminar as part of a broader partnership to produce autonomous trucks capable of navigating highways without a human driver behind the wheel.