Category: UNCATEGORIZED

Instacart is facing a lawsuit from Washington, D.C. Attorney General Karl A. Racine that alleges the company charged customers millions of dollars in “deceptive service fees” and failed to pay hundreds of thousands of dollars worth of sales tax. The suit seeks restitution for customers who paid those service fees, as well as back taxes and on interest on taxes owed to D.C.

The suit specifically alleges Instacart misled customers regarding the 10% service fee to think it was a tip for the delivery person from September 2016 to April 2018.

“Instacart tricked District consumers into believing they were tipping grocery delivery workers when, in fact, the company was charging them extra fees and pocketing the money,” Racine said in a statement. “Instacart used these deceptive fees to cover its operating costs while simultaneously failing to pay D.C. sales taxes. We filed suit to force Instacart to honor its legal obligations, pay D.C. the taxes it owes, and return millions of dollars to District consumers the company deceived.”

This is not the first time Instacart has faced legal issues over its service fees. In 2017, Instacart settled a $4.6 million suit regarding claims that the company misclassified its personal shoppers as independent contractors, and also failed to reimburse them for work expenses. As part of the settlement, Instacart was required to change the way it described a service fee, which many people mistakenly thought meant tip. Even when Instacart clarified the language, the suit alleges Instacart still buried the option to tip.

“In this respect, Instacart’s checkout design compounded
consumers’ tendency to confuse the service fee with a shopper tip,” the suit alleges.

This lawsuit comes as Instacart is facing uncertainty in California over the way it classifies some of its shoppers and delivery people. Despite a new law going into effect in January that clearly lays out what type of workers should and should not be classified as independent contractors, Instacart has yet to classify its workers as employees. Instead, Instacart, along with Uber, Lyft and DoorDash, are backing a ballot measure, Prop 22, that seeks to keep their workers classified as independent contractors.

TechCrunch has reached out to Instacart and will update this story if we hear back.

Berbix, an ID verification startup that was founded by former members of the Airbnb Trust and Safety team, today announced that it has raised a $9 million Series A round led by Mayfield. Existing investors, including Initialized Capital, Y Combinator and Fika Ventures, also participated in this round.

Founded in 2018, Berbix helps companies verify the identity of its users, with an emphasis on the cannabis industry, but it’s clearly not limited to this use case. Integrating the service to help online services scan and validate IDs only takes a few lines of code. In that respect, it’s not that different from payment services like Stripe, for example. Pricing starts at $99 per month with 100 included ID checks. Developers can choose a standard ID check (for $0.99 per check after the basic allotment runs out), as well as additional selfie and optional liveness checks, which ask users to show an emotion or move their head to ensure somebody isn’t simply trying to trick the system with a photo.

While ID verification may not be the first thing you think about in the context of the COVID-19 pandemic, the company is actually seeing increasing demand for its solution now that in-person ID verification has become much harder. Berbix CEO and co-founder Steve Kirkham notes that the company now processes the same number of verifications in a day that it used to do monthly only a year ago.

“The inability to conduct traditional identity checks in person has forced organizations to move online for innumerable use cases,” he says in today’s announcement. “One example is the Family Independence Initiative, a nonprofit that trusts and invests in families’ own efforts to escape poverty. Our software has enabled them to eliminate fraudulent applications and focus on the families who have been economically affected by COVID.”

Berbix co-founder Eric Levine tells me the company plans to use the new funding to expand its team, especially the product and sales department. He also noted that the team is investing heavily in localization, as well as the technical foundation of the service. In addition, it’s obviously also investing in new technologies to detect new types of fraud. Scammers never sleep, after all.

Berbix, an ID verification startup that was founded by former members of the Airbnb Trust and Safety team, today announced that it has raised a $9 million Series A round led by Mayfield. Existing investors, including Initialized Capital, Y Combinator and Fika Ventures, also participated in this round.

Founded in 2018, Berbix helps companies verify the identity of its users, with an emphasis on the cannabis industry, but it’s clearly not limited to this use case. Integrating the service to help online services scan and validate IDs only takes a few lines of code. In that respect, it’s not that different from payment services like Stripe, for example. Pricing starts at $99 per month with 100 included ID checks. Developers can choose a standard ID check (for $0.99 per check after the basic allotment runs out), as well as additional selfie and optional liveness checks, which ask users to show an emotion or move their head to ensure somebody isn’t simply trying to trick the system with a photo.

While ID verification may not be the first thing you think about in the context of the COVID-19 pandemic, the company is actually seeing increasing demand for its solution now that in-person ID verification has become much harder. Berbix CEO and co-founder Steve Kirkham notes that the company now processes the same number of verifications in a day that it used to do monthly only a year ago.

“The inability to conduct traditional identity checks in person has forced organizations to move online for innumerable use cases,” he says in today’s announcement. “One example is the Family Independence Initiative, a nonprofit that trusts and invests in families’ own efforts to escape poverty. Our software has enabled them to eliminate fraudulent applications and focus on the families who have been economically affected by COVID.”

Berbix co-founder Eric Levine tells me the company plans to use the new funding to expand its team, especially the product and sales department. He also noted that the team is investing heavily in localization, as well as the technical foundation of the service. In addition, it’s obviously also investing in new technologies to detect new types of fraud. Scammers never sleep, after all.

Discord has published its latest transparency report for the first six-months of this year.

The big takeaway is that the number of overall reports has almost doubled, largely because of the massive spike in user growth during the pandemic to over 100 million monthly active users. The messaging and chat platform, popular with gamers and streamers, is now said to be worth around $3.5 billion.

According to the report, Discord said it received 235,000 reports between January and June 2020, compared to 128,000 reports during the last reporting period between June and December 2019.

Discord said it took action in 65% of cases related to spam — resulting in the removal of four million accounts — and just 13% in cases of harassment. Discord said it’s often clearer when someone is spamming, but the subjective nature of harassment makes it the “least actionable” category of reports.

The percent of user reports actioned between January and June 2020. (Image: Discord)

That said, Discord said it warns more users about harassment than any other reporting category. Discord issues warnings to educate users about some potentially harmful behavior, rather than outright banning users. For the most part, the warnings appear to work. Discord said it bans just 3% of users who were first given a warning about harassment.

Discord also said it banned 162,621 accounts for posting exploitative content, like posting non-consensual photos of others, was the largest category of bans apart from spam. Most of this content was removed proactively by Discord, the company said.

Civil rights groups criticized the company’s earlier reports for not disclosing more about proactive removals.

Discord said it also removed over 5,000 servers each for posting exploitative content, and hacks and cheats. The company said it removed 700 servers as part of a network sharing non-consensual images. “Nonconsensual pornography has no place on our platform, and we’ll continue to take swift action against these communities and their members,” the company said.

Unlike other tech companies, Discord does not reveal the number of law enforcement requests it receives.

Meet Fondeadora, a fintech startup based in Mexico City that wants to build a full-stack neobank. The company just raised a $14 million Series A round led by Gradient Ventures, Google’s AI-focused venture fund. Founded in 2018, the company already manages 150,000 accounts and is adding $20 million in deposits every month.

Mexico represents a massive opportunity for a challenger bank as many people still rely on cash for most of their transactions. Given that all countries are progressively switching to card and digital payments, it seems like the right time to launch Fondeadora .

Y Combinator, Scott Belsky, Sound Ventures, Fintech Collective and Ignia are also participating in the funding round.

“We launched the first crowdfunding platform in Mexico about 10 years ago,” co-founder and co-CEO Norman Müller told me. “About 50% of card transactions failed in the system.”

That platform was also called Fondeadora. After a deal with Kickstarter, Müller and Fondeadora co-founder René Serrano went back to the drawing board and thought about the problems they had while operating the crowdfunding platform. It became Fondeadora as we know it today, a challenger bank that wants to improve the banking experience in Mexico.

The team traveled across Mexico to find a bank charter that they could use. “We acquired the charter, it was owned by a group of tomato farmers in Mexico. 20 years ago, the government gave about 10 charters to create financial inclusion,” Müller told me.

The company launched its banking service after that. You can open an account without visiting a branch. You then receive a Mastercard debit card. You can choose to receive notifications after each purchase, lock and unlock your card, send instant transfers to other users and more. There are no monthly subscription fee and no foreign transaction fee.

Up next, Fondeadora wants to democratize savings accounts. “Cash has a great UX and UI. You can touch it, you can store it in your drawer. But as a medium to generate income, it’s terrible,” Müller told me.

In the coming months, you’ll earn interests on your deposits in your Fondeadora account. “We’re investing in government bonds, it’s a very secure type of instruments. In Mexico, you can get 5 or 6% interest rate,” Müller said. The startup could allocate a small portion of deposits to medium-risk investments as well.

Fresh off a $40 million Series A round, edge AI specialist Kneron today announced the launch of its newest custom chip, the Kneron KL 720 SoC.

With funding from the likes of Alibaba, Sequoia, Horizons Ventures, Qualcomm and SparkLabs Taipei (as well as a few undisclosed backers), it’s worth taking the company’s efforts seriously, and Kneron has no qualms about comparing its chips to those of Intel and Google, for example. It argues that its KL 720 is twice as energy efficient as Intel’s latest Movidius chips and four times more efficient than Google’s Coral Edge TPU at running the MobileNetV2 image recognition benchmark.

Compared to its previous generation of chips, this updated version can process 4K still images and videos at a 1080P resolution. It also features a number of new audio recognition breakthroughs for the company, which Kneron says will allow devices that use its chips to bypass the standard wake words on other chips and have immediate conversations with the device.

Image Credits: Kneron

Overall, Kneron promises 1.5 TOPS in performance from its SoC, which uses an Arm Cortex M4 as its main control unit. The average power consumption for the full package is around 1.2W.

“KL720 combines power with unmatched energy-efficiency and Kneron’s industry-leading AI algorithms to enable a new era for smart devices,” said Kneron founder and CEO Albert Liu. “Its low cost enables even more devices to take advantage of the benefits of edge AI, protecting user privacy, to an extent competitors can’t match. Combined with our existing KL520, we are proud to offer the most comprehensive suite of AI chips and software for devices on the market.”

With KNEO, the company also offers an interesting networking solution for devices that are powered by its chips. With this, developers can create their own private networks and connect multiple sensors without having to route data to the cloud. That network uses blockchain technology to secure the data and in a bit of a twist, Kneron hopes to create a marketplace that will allow consumers to exchange or sell their data to buyers.

For now, though, the company seems to be more focused on the core hardware. That’s also an area where we’ve seen the competition heat up, with other well-funded startups like Hailo also recently launching their latest chips.

Chinese electric vehicle startup XPeng Inc. raised $1.5 billion through an initial public offering in the U.S. as investor interest in EVs and clean energy outstripped concerns over escalating tensions between the U.S. and China.

The automaker, which is backed by Chinese e-commerce giant Alibaba and Xiaomi Corp, said in a filing that it sold 99.7 million shares for $15 each, debut, raising about $1.5 billion. The automaker had originally planned to sell 85 million shares with a price guidance of between $11 and $13.

Shares of Xpeng began trading Thursday on the New York Stock Exchange under the ticker symbol XPEV.

XPeng, which is headquartered in Guangzhou, China, had raised a total of $1.7 billion from investors prior to its Wall Street debut. In July, the company said it had raised around $500 million in a Series C+ round to further develop electric vehicle models aimed at China’s tech-savvy middle-class consumers.

Moving to the public market gives XPeng access to a far bigger pool of capital, which it will need to compete against an increasingly crowded EV marketplace in China. XPeng faces competition from Li Auto, Nio, WM Motor and notably, Tesla, which began producing Model 3 sedans at its new Shanghai factory in December 2019.

SHANGHAI, CHINA – 2019/08/25: Customers experiencing a new car at the Chinese automobile manufacturer XPeng or Xiaopeng Motors store in Shanghai. (Photo by Alex Tai/SOPA Images/LightRocket via Getty Images)

Xpeng has two electric vehicles on the market, the G3 SUV and the P7 sedan. Production of the G3 began in November 2018. As of July 31, XPeng said it had delivered 18,741 G3 SUVs to customers.

Deliveries of the P7 began in May 2020. The company has delivered 1,966 P7 sedans — a direct competitor to the Tesla Model 3 — as of July 31. XPeng is also planning a third electric vehicle, which will be another sedan, that will come to market in 2021.

Google is revamping its two-year old “Snapshot” feature in Google Assistant for iOS and Android. The company in 2018 had first introduced Google Assistant Snapshot as a way for mobile users to stay on top of their day, by showing timely information like appointments, reminders, commute times, stocks, packages in transit, and more. Today, the company is rolling out a series of updates to make the feature more useful and personalized. This includes the addition of tasks, push notifications for birthdays, and even suggestions of other things Google thinks you’ll want to try, like podcasts, restaurants, recipes and more.

This latter feature is powered by user data — specifically, your recent search history, including searches you’ve done within Google Assistant and on your other smart devices.

With the update, Google Assistant will be able to recommend recipes you may want to cook, podcasts to stream, or nearby restaurants offering delivery. These recommendations can also change during the day. For example, you may see suggested dinner recipes in the evening.

Snapshot will also now display a summary of your important tasks right at the top of the screen. This may include reminders for things like birthdays or holidays, too. It will even send push notifications about upcoming birthdays, which will then direct you to a card where Snapshot suggests various actions you can take next — like calling, texting, or singing a personalized birthday song. The birthday notifications are live for English-speaking markets to start, Google says.

The Google Assistant app sends notifications for things like flight and event updates, upcoming bills and due date reminders, as well.

The Google Snapshot feature itself will also change what it shows you based on the time of day and your interactions with Google Assistant.

In the morning, for instance, the feature may show you your commute time, the day’s weather, top headlines and your to-do’s. Later in the day, the information will adjust based on your routine and what you’ve searched using the Google Assistant app or a smart device.

In addition, Google will now let you say “Hey Google, show me my day” to view your Snapshot. Before, the feature was activated by tapping the icon in the bottom left corner of the Google Assistant app. This voice-powered feature is live today for those who have “English” set as their default language, but Google plans to expand the voice support to more languages over the next few months.

The update is rolling out to the Google Assistant app on iOS and Android.

There’s been a flurry of TikTok news today, and the flood doesn’t seem to be letting up.

First was the announcement that Kevin Mayer, who joined the company just a bit more than three months ago, has stepped down overnight.

Now, we are receiving a bunch of deal-related news as well. Walmart has confirmed to multiple news outlets that it has expressed interest in teaming up with Microsoft in a bid for the fast-growing social app. Meanwhile, entertainment news site The Wrap reported that Oracle has placed a bid for the company, targeting a price around $20 billion.

This is a fast-developing story, and we will have more updates to come as we receive them.

TikTok has been heavily in the news since the Trump Administration threatened to ban TikTok from the U.S. market unless it sold its U.S. operations to an American company. On August 6, President Trump signed an executive order that gave TikTok’s Beijing-based parent company ByteDance 45 days to make a deal to divest the U.S. operations of its popular video-sharing app. The deadline was later extended until mid-November.

The order arrived at a time of heightened tensions between the U.S. and China, which are battling across a number of fronts outside of tech. Relations have deteriorated over issues like China’s move to assert more authority over Hong Kong with its new national security law, the detention of one million or more ethnic Uighur Muslims in China’s Xinjiang region, trade tariffs, Beijing’s military buildup in the disputed South China Sea, and the COVID-19 pandemic.

Tech companies were pulled into this conflict between the two superpowers. Ahead of the proposed TikTok ban, the U.S. government also had tightened its restrictions on China’s Huawei Technologies in recent weeks.

After Trump’s signing of the executive order, TikTok immediately fought back, most recently in the form of a lawsuit against the U.S. government that challenged the legality of the TikTok ban. In the interim, several U.S. tech companies’ names emerged as having had discussions with TikTok about a deal, including Microsoft, Twitter, Google, Oracle, and even Walmart. Oracle on Thursday morning was said to be nearing a deal with the White House that would comprise $10 billion of cash, $10 billion in Oracle stock, and 50% of annual TikTok profit to flow back to ByteDance.

The actual risk presented by the TikTok app has remained in dispute. Trump’s executive order declared the social app, and other apps owned by Chinese companies that have entered the U.S., a threat to “the national security, foreign policy, and economy of the United States.” The concern is that the app could collect data on U.S. citizens, including location, browsing and search histories. Critics believe TikTok could serve as a conduit for the Chinese Communist Party’s propaganda and censorship arm, as well.

The TikTok app itself has become hugely popular in the U.S in recent years. Facebook CEO Mark Zuckerberg even declared TikTok’s existence one of the reasons why Facebook shouldn’t be considered a monopoly, in his testimony before the U.S. House Judiciary Committee in July.

According to data from app store intelligence firm Sensor Tower, TikTok has been download nearly 194 million times in the U.S., which is 8.2% of TikTok’s total downloads, including its Chinese version, Douyin. The U.S. also accounted for nearly $111 million, or 13% of TikTok’s total ~$840 million in revenue.

Mobile data and analytics firm App Annie said TikTok had 52 million weekly active users in the U.S. during the week of August 9-15, 2020, and this number continues to climb. Its weekly active user count in July (July 15-25) was up 75% from just the beginning of 2020, in fact. It also became the top grossing app on the iOS App Store globally in the second quarter, due to increased consumer usage of mobile apps during the pandemic. It consistently ranks in the top five for downloads across both the U.S. iOS App Store and Google Play.

Time spent in the app has grown as well, from 5 hours, 4 minutes per month as of August 2018 to 16 hours, 20 minutes per month as of December 2019.

Despite all that success though, TikTok’s next steps remain hazy. It needs to fight its lawsuit, net approval from U.S. regulatory agencies, and also continue to build trust with users in the throes of an acrimonious election season. We’ll have more developments as this story unfolds.

The fintech industry has had a wild couple of years. Consumer fintech startups, such as Robinhood, Revolut and Coinbase, have been massively successful and managed to attract millions of customers. At the same time, enterprise companies have created the infrastructure that will make finance truly digital, from payments to API-driven integrations and risk assessment.

That’s why we’re excited to announce that we’ll have a panel dedicated to embedded finance and fintech at Disrupt 2020. The virtual conference will take place on September 14-18.

To talk about this topic, we invited Ruth Foxe Blader, a partner at Anthemis, a venture investment group focused on all things fintech. She has invested in many fintech and insurtech startups, such as +Simple.fr, Axle and Fluidly.

Before her role at Anthemis, Ruth Foxe Blader was in charge of insurtech venture investments for Allianz. She’s also worked with several Fortune 500 companies to lead their digital transformation.

Hope Cochran is joining us for this panel as well. She was the CFO of King, the game studio behind Candy Crush. And it’s been a wild ride as she led the company through an IPO and then oversaw King’s acquisition to Activision for $5.9 billion.

This isn’t her only achievement as a corporate director. She was the CFO of Clearwire through its sale to Sprint in 2013. Hope Cochran is now a managing director at Madrona Venture Group.

Finally, we invited John Locke, a partner at Accel working on the firm’s growth fund. Among many other investments, he’s worked on deals involving Braintree/Venmo, GoFundMe, Monzo, WorldRemit and Xero.

As you can see, he has been closely following fintech startups before we even called them fintech startups.

Will tech companies all become fintech companies at some point with embedded financial products? Will new tech giants thrive by powering those embedded financial products? If you want to hear the answers to those questions, join us for Disrupt 2020. The conference is scheduled to run from September 14 through September 19.

Buy the Disrupt Digital Pro Pass or if you’re an early stage founder a Digital Startup Alley Exhibitor Package today and get access to all the interviews on our main stage, workshops over on the Extra Crunch Stage where you can get actionable tips as well as CrunchMatch, our free, AI-powered networking platform. As soon as you register for Disrupt, you will have access to CrunchMatch and can start connecting with people now. Use the tool to schedule one-on-one video calls with potential customers and investors or to recruit and interview prospective employees.