Category: UNCATEGORIZED

Global fitness giant Under Armour announced this morning that it will be selling MyFitnessPal to investment firm Francisco Partners for $345 million, five and a half years after acquiring it for $475 million. The company also announced that it will be winding down the Endomondo platform which it also acquired at the same time for $85 million.

In a press release announcing the news, Under Armour said the reason for this decision was to simplify and focus its brand, keeping it aimed at its “target consumer – the Focused Performer” in the interest of building “a singular, cohesive UA ecosystem.” The fact that Under Armour is selling MyFitnessPal at a discount (not even including five years of inflation and stated MyFitnessPal user growth) indicates there’s more to this than just maintaining focus.

It’s definitely true that both MyFitnessPal (which claimed 80 million users in 2015 at time of acquisition, and has over 200 million users according to today’s press release) and Endomondo were aimed at more casual and entry-level fitness users, who might be working out for the first time, or looking to improve their daily health, but aren’t likely training for endurance sport competitions. Under Armour’s overall brand image is more associated with professional athletics, and with an enthusiast/semi-pro clientele (or those aspiring to that designation).

What’s more likely going on here is that Under Armour sees diminishing value in this segment over the long term, and there a number of possible reasons about why that might be. One is that Apple has been more aggressive about targeting entry-level fitness users, through both its expanded Apple Watch hardware and Apple Health software offerings, and through its forthcoming Apple Fitness+ service, which launches later this year.

While you’d expect the self-guided fitness segment to be a significant growth opportunity in light of the ongoing pandemic and restrictions on shared workout spots including gyms, Apple’s aggressive moves provide a fairly comprehensive default that users essentially get for free, or for a very low cost subscription, with the hardware they’re buying anyways. And the growth of Peloton, through both its dedicated home workout gear and its subscription platform, is also likely sucking up a lot of oxygen in the beginner to casual/habitual fitness user category.

Under Armour did note that it’s going to continue to own and operate the MapMyFitness platform, which includes MapMyRun and MapMyRide. It acquired that company in 2013, and the Under Armour line of connected footwear integrates with those apps for connected tracking of workouts.

AOL founder Steve Case was there, just outside of Washington, D.C., when in 1996 the Communications Decency Act was passed as part of a major overhaul of U.S. telecommunications laws that President Bill Clinton signed into law. Soon after, in its first test, a provision of that act which states that, “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider,” would save AOL’s bacon, too.

That wasn’t coincidental. In a wide-ranging call earlier today with Case — who has become an influential investor over the last 15 years through his Washington, D.C.-based firm Revolution and its early-stage, growth-stage, and seed-stage funds — he talked about his involvement in Section 230’s creation, and why the thinks it’s time to change it.

We’ll have more from our interview with Case tomorrow. In the meantime, here he talks about the related legal protections for online platforms that took center stage yesterday or, at least, were supposed to during the Senate’s latest Big Tech hearing.

“In that early birthing stage of the internet, [we were all] figuring out what the rules of the road were, and the 230 provision was something I was involved in. I do think the first lawsuit related to it was related to AOL. But 25 years later, it’s fair to take a fresh look at it — [it’s] appropriate to take a fresh look at it. I’ve not recently spent enough time digging in to really have a strong point of view in terms of exactly what to change, but I think it’s fair to say that what made sense in those early days when very few people were online maybe doesn’t make as much sense now when when the entire world is online and the impact these platforms have is so significant.

“At the same time, I think you have to be super careful. I think that’s what what the CEOs testifying [yesterday] were trying to emphasize. [It was] ‘We get that there’s a desire to relook at it. We also get that because of the election season, it’s become a highly politicized issue. Let’s engage in this discussion, and perhaps there are some things that need to be modified to reflect the current reality . . .let’s don’t do it just in the heat of a political moment.’

“When we started AOL 35 years ago, only 3% of people are connected. They were only online about an hour a week, and it was still illegal, actually, for consumers or businesses to be on the internet [so] I spent a lot of time on commercializing the internet, opening up consumers and businesses, figuring out what the right rules of the road were in terms of things like taxes on e-commerce. And generally, we were able to convince regulators and government leaders that a light touch for the internet made sense, because it was a new idea, and it wasn’t clear exactly how it was going to develop.

“But now, it’s not a new idea. And now it has a profound impact on people’s lives and our communities and countries. And so I’m not surprised that there’s more more focus on it, [though] it’s a little too bad that there’s so much attention right this moment because in an election season, things tend to get a little bit hot on both sides.

“Putting that aside, I think there are legitimate issues that the policymakers need to be looking at and are starting to look at, not just in Washington, DC, but more broadly in Brussels. And I think having more of a dialogue between the innovators and the policymakers is actually going to be critical in this internet third wave, because the sectors up for grabs are most important aspects of our lives — things like health care and education and food and agriculture. And that’s really going to require not just innovation from a technology standpoint, but thoughtfulness from a a policy standpoint.

“I understand entrepreneurs who get frustrated by regulations kind of slowing down the pace of information. I get that. Obviously, some of the businesses that we back have suffered from that. But at the same time, you can’t not expect the government — which is elected by the people — to serve the people, including protecting the people.”

Amazon expects to incur $4 billion in COVID-related costs next quarter, an estimate that provides a bellwether for other businesses, large and small, trying to stay operational and control expenses amid the pandemic.

The upshot: Amazon is planning for COVID to remain an unwelcome companion through the end of the year with costs higher than the previous quarter.

The company said Thursday in its third-quarter earnings call that it logged $7.5 billion in COVID-related costs since the disease took root earlier this year. Amazon previously said its COVID costs were about $600 million in the first quarter and more than $4 billion in the second. The company’s COVID costs in the third quarter were about $2.5 billion, CFO Brian Olsavsky told an analyst during an earnings call. While Amazon was able to lower its costs in the third quarter due to efficiencies that number is on rise for next quarter.

Olsavsky said the majority of the increase in costs is due to the expansion of its operations. Amazon has hired 100,000 new workers in October.

COVID-19 along with other uncertainties related to the economy, holiday sales and even weather patterns weighed on its guidance for operating income in the fourth quarter. Amazon provided a wide-ranging guidance of between $1 billion and $4.5 billion in operating income in the fourth quarter compared with $3.9 billion in the same period last year.  This guidance assumes about $4 billion of costs related to COVID-19.

But what is most telling is that even after providing a lengthy list of possible uncertainties in the fourth quarter, Olsavsky noted that COVID still trumps them all.

“So there’s a whole host of issues that generally come to bear in Q4,” Olsavsky said. “I think the fact that COVID is dwarfing all of those is causing us a lot of uncertainty on our top line range.”

Olsavsky said costs were related to productivity losses caused by changing how it operates as well as expenses related to personal protective equipment and other upfront costs.

“The largest portion of these costs relate to continuing productivity headwinds in our facilities, including process revisions to allow for social distancing and incremental costs to ramp up new facilities, and the large influx of new employees hired to support strong customer demand also includes investments in PPE for employees and enhanced cleaning of our facilities,” Olsavsky said during Thursday’s earnings call.

Amazon said Thursday it also continues to ramp up its in-house COVID-19 testing program with capacity reaching 50,000 tests a day across 650 sites by November.

WhatsApp, the popular instant messaging app owned by Facebook, is now delivering roughly 100 billion messages a day, company’s chief executive Mark Zuckerberg said at the quarterly earnings call Thursday.

For some perspective, users exchanged 100 billion messages on WhatsApp on last New Year’s Eve. That is the day when WhatsApp tops its engagement figures, and as many of you may remember, also the time when the service customarily suffered glitches in the past years. (No outage on last New Year’s Eve!)

At this point, WhatsApp is just competing with itself. Facebook Messenger was being used to exchange 8 billion messages a day as of May 2018. Apple chief executive Tim Cook said in May that iMessage and FaceTime were seeing record usage, but did not share specific figures. The last time Apple did share the figure, it was far behind WhatsApp’s then usage (podcast). WeChat, which has over a billion users too, is also behind in daily volume of messages.

In early 2014, WhatsApp was being used to exchange about 50 billion texts a day, its then chief executive Jan Koum revealed at an event.

At the time, WhatsApp had fewer than 500 million users. WhatsApp now has more than 2 billion users and at least in India, its largest market by users, its popularity surpasses those of every other smartphone app including the big blue app.

“This year we’ve all relied on messaging more than ever to keep up with our loved ones and get business done,” tweeted Will Cathcart, head of WhatsApp.

No word today on when WhatsApp plans to resume its payments service in Brazil, and when it plans to launch its payments service in India, where it began testing the service in 2018.

“We are proud that WhatsApp is able to deliver roughly 100B messages every day and we’re excited about the road ahead,” said Cathcart.

What does a hologram-obsessed entrepreneur do for a second act after setting up a virtual Ronald Reagan in the Reagan Memorial Library, or beaming Jimmy Kimmel all the way from Hollywood to the Country Music Awards in Nashville?

If that entrepreneur is David Nussbaum, the founder of PORTL Hologram, the next logical step is to build a machine that can bring the joy of hologram-based communication to the masses.

That’s the goal thanks to a new $3 million round that Nussbaum’s company raised from famed venture investor Tim Draper, former Electronic Arts executive Doug Barry, and longtime awards-show producer Joe Lewis.

Barry is not only backing the company, he’s also coming on board as its first chief operating officer.

Much of this interest can be traced back to the hologram performance given posthumously by Tupac Shakur back at Coachella about eight years ago.

Nussbaum turned the excitement generated by that event into a business. He bought the patents that powered Tupac’s beyond-the-grave performance, and used the technology to beam Julian Assange out of the Ecuadoran embassy he had been holed up in during his years in London and making dead stars live (and tour) again.

Those visual feats were basically just an updated version of the Pepper’s Ghost technique that stage illusionists and moviemakers have been using since it was invented by John Pepper in the 19th century.

The PORTL is a significant upgrade, according to Nussbaum.

The projector can transmit images any time of the day or night, and using PORTL’s capture studio-in-a-box means that anyone with $60,000 to spend and a white background can beam themselves into any portal anywhere in the world.

The company has sold a hundred devices and already delivered several dozen to shopping malls, airports and movie theater lobbies. “We’ve manufactured and delivered several dozen,” Nussbaum said.

Part of the selling point, beyond just the gimmick of the hologram’s next-level verisimilitude, is its interactivity. Through the studio rig and PORTL hardware, users can hear what people standing around the PORTL are saying and then respond.

For its next trick, PORTL is looking to build a miniaturized version of its system that would be about the size of a desktop computer and could be used to both record and distribute the holograms to anyone with a PORTL device.

“The minis will have all of the features to capture your content and rotoscope you out of our background and have the studio effects that is important in displaying your realistic volumetric like effect and they will beam you to any other device,” Nussbaum said.

To build out the business, the PORTL minis will have more than just communications capabilities, but recorded entertainment as well, Nussbaum said.

“The minis will be bundled with content like peloton and mirror bundled with very specific types of content. We are in conversations with a number of extremely well known content creators where we would bundle a portal but will also have dedicated and exclusive content… [and] bundle that for $39 to $49 per month.”

It’s a vision that Nussbaum admits is far more expansive than his intentions — and the person he has to thank for the more ambitious vision of the business is none other than Draper.

“When I started this I thought it was going to be a novelty company,” he said. “When the pandemic hit he knew we needed to do much more than that.”

Tesla has made good on founder and CEO Elon Musk’s promise to boost the price of its “Full Self-Driving” (FSD) software upgrade option, increasing it to $10,000 following the start of the staged rollout of a beta version of the software update last week. This boosts the price of the package $2,000 from its price before today, and it has steadily increased since last May.

The FSD option has been available as an optional add-on to complement Tesla’s Autopilot driver assistance technology, even though the features themselves haven’t been available to Tesla owners before the launch of the beta this month. Even still, it’s only in limited beta, but this is the closest Musk and Tesla have come to actually launching something under the FSD moniker – after having teased a fully autonomous mode in production Teslas for years now.

Despite its name, FSD isn’t what most in the industry would define as full, Level 4 or Level 5 autonomy per the standards defined by SAE International and accepted by most working on self-driving. Musk has designed it as vehicles having the ability “to be autonomous but requiring supervision and intervention at times,” whereas Levels 4 and 5 (often considered ‘true self-driving’) under SAE standards require no driver intervention.

Still, the technology does appear impressive in some ways according to early user feedback – though testing any kind of self-driving software unsupervised via the general public does seem an incredibly risky move. Musk has said that we should see a wide rollout of the FSD tech beyond the beta before year’s end, so he definitely seems confident in its performance.

The price increase might be another sign of his and the company’s confidence. Musk has always maintained that users were getting a discount by handing money over early to Tesla in order to help it develop technology that would come later, so in many ways it makes sense that the price increase comes now. This also obviously helps Tesla boost margins, though it’s already riding high on earning that beat both revenue and profit expectations from analysts.

Polestar, the electric vehicle brand that was spun out of Volvo Car Group, has issued another recall for its newest electric vehicle.

The company is voluntarily recalling nearly 4,600 vehicles over what has been described as a faulty inverters, Reuters reported. Polestar said in a statement that all affected customers will be notified, beginning November 2.

“The recall involves the replacement of faulty inverters on most delivered customer vehicles,” Polestar said in its statement, adding that the inverters transform the stored energy in the battery into the power required by the electric motors. 

Polestar, which in 2017 was recast as an electric performance brand aimed at producing exciting and fun-to-drive electric vehicles, started production this spring of its all-electric Polestar 2 vehicle at a plant in China. The production start was a milestone for the company that is jointly owned by Volvo Car Group and Zhejiang Geely Holding of China.

However, the company has faced some early headwinds. Polestar made its last recall on Oct. 2 after several cars had abruptly stopped while driving. “This happened in very, very rare cases,” Polestar CEO Thomas Ingenlath said during an interview at TC Sessions: Mobility 2020, which was held in October. Ingenlath said at the time that none of the reported cases happened in the United States, nor were any of the affected vehicles involved in an accident. That issue was fixed with a software update.

Corsair Gaming today announced that it has acquired EpocCam, the software developer behind the iOS software of the same name. It’s easy to see why the gaming company would be interested in such an acquisition in 2020. The COVID-19 pandemic has lead to a worldwide spike in remote working — and, as a result, more people are teleconferencing than ever.

The EpocCam app is designed specifically to turn iPads and iPhones into a webcam for both macOS and Windows PCs. The software works across a number of popular teleconferencing applications, including Zoom, Skype, Google Meet and Microsoft Teams — which is more than I can say for the beta webcam software I’m currently running.

The deal brings the EpocCam brand under Corsair’s Elgato umbrella. Corsair purchased the company’s gaming brand back in mid-2018. That deal, in turn, found the rest of Elgato rebranding its Eve System — a company expressly focused on smart home and home automation.

While most laptops and desktops are fairly lacking in the built-in webcam department, iPhones have taken great strides. So it makes sense for users to take advantage of that imaging power. Of course, with the company now owned by a gaming brand, it’s clear that video game live-streaming is going to be a big part of the value play here.

The app has already been relaunched under the Elgato brand, including deeper integration with its existing products. The company promises that further updates are “already in development.”

Google releases its latest earnings report, Spotify is getting ready to raise prices and Excel gets friendlier to custom data types. This is your Daily Crunch for October 29, 2020.

The big story: Google had a good quarter

Google’s parent company Alphabet released its third-quarter earnings report this afternoon, coming in well ahead of Wall Street expectations thanks in large part to YouTube, which saw revenue rise to $5.0 billion (compared to $3.8 billion during Q3 2019).

Google Cloud also grew revenue from $2.4 billion last year to $3.44 billion in the most recent quarter. Overall, Alphabet reported revenue of $46.2 billion and earnings per share of $16.40, compared to analyst predictions of $42.88 billion in revenue and EPS of $11.21.

The company’s shares quickly rose 8.5% in after-hours trading.

The tech giants

Spotify CEO says company will ‘further expand price increases’ — Although the company didn’t detail its plans, CEO Daniel Ek said the hikes will take place in markets that are more mature for Spotify.

Microsoft now lets you bring your own data types to Excel — That means you can have a “customer” data type, for example, bringing in rich customer data from a third-party service into Excel.

Why Apple’s Q4 earnings look different this year — With Apple’s latest iPhone launch running a few weeks behind this year, it missed the window to be included on Q4.

Startups, funding and venture capital

Donut launches Watercooler, an easy way to socialize online with co-workers — The startup also announced that it has raised $12 million in total funding, led by Accel.

One-click housing startup Atmos raises another $4M from Khosla, real estate strategics and TikTok star Josh Richards — According to CEO Nick Donahue, users have started designing the “first dozen homes” on the platform.

Commissary Club wants to help formerly incarcerated people find community —  While 70 Million Jobs focuses on helping people with criminal records find jobs, its new network Commissary Club is designed to be a place for folks to find community.

Advice and analysis from Extra Crunch

VCs poured capital into European startups in Q3, but early-stage dealmaking appeared to suffer — The VC trends of later and larger continue to change the landscape of private capital.

In the ‘buy now, pay later’ wars, PayPal is primed for dominance — Button’s Stephen Milbank writes that the greatest limitation to buy-now-pay-later adoption is its availability.

Twitter’s API access changes are chasing away third-party developers — On August 12, Twitter launched a complete rebuild of its 2012 API.

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

Everything else

Europe to limit how big tech can push its own services and use third-party data — Commission EVP Margrethe Vestager confirmed that a legislative proposal due in a few weeks will aim to ban what she called “unfair self-preferencing.”

Comcast says Peacock has nearly 22M sign-ups — But it’s not clear how many of them are paid versus free.

Tech optimism…in this economy? — The latest episode of Equity looks at big startup opportunities for the coming decade.

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.

PUBG Mobile, the sleeper hit mobile game, will terminate all service and access for users in India on October 30, two months after New Delhi banned the game in the world’s second largest internet market over cybersecurity concerns.

India banned PUBG Mobile Nordic Map: Livik and PUBG Mobile Lite, along with over 100 apps with links to China on September 2. The ban came after India banned TikTok and dozens of other popular Chinese apps in late June.

These apps were “prejudicial to sovereignty and integrity of India, defence of India, security of state and public order,” the country’s IT Ministry said on both the instances.

But unlike other affected apps that became unavailable within days — if not hours — PUBG Mobile apps remained accessible in the country for users who already had them installed on their phones, tablets, and PCs. In fact, according to one popular mobile insight firm, PUBG Mobile had retained more than 90% of its monthly active users in the country, a mobile-first market where 99% of smartphones run Android, in the weeks following New Delhi’s order.

(Following the ban, Google and Apple pulled PUBG Mobile apps from their app stores in India. But soon enough, guides on how to workaround the ban and obtain and install the apps became popular on several forums.)

PUBG Mobile had about 50 monthly active users in India, tens of millions of users ahead of Call of Duty: Mobile and Fortnite and any other mobile game in the country.

“PUBG Mobile kickstarted an entire ecosystem — from esports organisations to teams and even a cottage industry of streamers that made the most of its spectator sport-friendly gameplay,” said Rishi Alwani, a long-time analyst of Indian gaming market and publisher of news outlet The Mako Reactor.

“Granted Tencent did a lot of the heavy lifting in building it out, but the game’s quality itself was heads and shoulders above what most Indians were used to on smartphones. And that’s a reason many kept coming back, some eventually monetising as well,” he added.

South Korea-headquartered PUBG Mobile attempted to assuage New Delhi’s concern by cutting ties with Tencent, the game’s publishing and distribution partner in India.

On Thursday, PUBG Mobile said, “protecting user data has always been a top priority and we have always complied with applicable data protection laws and regulations in India. All users’ gameplay information is processed in a transparent manner as disclosed in our privacy policy.”

“We deeply regret this outcome, and sincerely thank you for your support and love for PUBG Mobile in India,” it added.