Category: UNCATEGORIZED

Gaming has always been one of the world’s most massive niches, but as game-streaming and eSports have drifted to the forefront of mainstream culture, it’s clear that there’s plenty of room left for the industry to expand. One harbinger of this shift has been the widespread adoption of eSports leagues in high schools and colleges across the country, a movement that has pushed online gameplay as just another athletic program schools should be offering.

One of the central catalysts of this change has been Delane Parnell, whose company PlayVS has pushed school districts in the United States to embrace eSports, all while courting venture capitalists to shower the startup with tens of millions in funding.

We’re amped to announce that Parnell is joining us at TechCrunch Disrupt in September to discuss the future of eSports competition and gaming’s continued mainstream drift.

Parnell started PlayVS in 2018, hoping to bring high schools into the fold of eSports competitions. Through an exclusive partnership with the NFHS (the NCAA of high schools), PlayVS enables schools across America to build teams and compete against neighboring schools on its platform.

Last year, the company picked up a $50 million Series C, bringing their total funding to a whopping $96 million. With the COVID-19 pandemic threatening the future of in-person sporting events at school districts, eSports leagues are likely to be less impacted, an outcome which could gather even more momentum for the company’s platform.

On the heels of Hippo’s funding round and our exploration of how the private markets appear to be more conservative than public investors at the moment, we’re asking a new question: are a bunch of insurtech startups undervalued?

Hippo — an insurtech startup focused on home insurance — put together a $150 million round at a $1.5 billion post-money valuation after growing its gross written premium to $270 million “in the past 12 months.” At that valuation, and at pre-adjustment premium scale, Hippo is super-cheap compared to Lemonade, another venture-backed insurtech startup that just went public.

The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or receive it for free in your inbox. Sign up for The Exchange newsletter, which drops Saturdays starting July 25.

There’s no need to relitigate Hippo’s valuation and how the private markets have valued the firm. But our work yesterday does give us the chance to do some fun math on other players in the neo-insurance space, namely, Root and MetroMile. Using data accrued from financial filings and valuation data from Pitchbook and Crunchbase, we can grok how much the two firms are worth using Hippo’s and Lemonade’s current premium multiples.

If you aren’t familiar, the cohort of startups we’re looking at have raised well over $1 billion as a group; VCs really believe in them. How they are priced then, and how they exit, will help determine the results of many a venture fund.

So, are other players in the startup insurance market cheap at their last private price when compared to Lemonade and Hippo? Did their venture backers overpay? Let’s find out.

Cheap? Expensive?

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

Up top the crew this week was the regular contingent: Danny Crichton, Natasha Mascarenhas, and myself. As a tiny programming note, we’re going back to posting some videos on YouTube in a few weeks, so make sure to peep the TechCrunch channel if that’s your jam.

And we did a special episode on the SPAC boom, if you are into financial arcana. For more on SPAC’s –> here

The Equity crew tried something new this week, namely centering our main conversation around a theme that we’re keeping tabs on: The resilience of tech during the current pandemic-led recession.

Starting with the recent economic news, it’s surprising that tech’s layoffs have slowed to a crawl. And, as we’ve recently seen, there’s still plenty of money flowing into startups, even if there are some dips present on a year-over-year basis. Why are things still pretty good for startups, and pretty good for major tech companies? We have a few ideas, like the acceleration of the digital transformation (more here, and here), and software eating the world. The latter concept, of course, is related to the former.

After that it was time to go through some neat funding rounds from the week, including:

• Dumpling raising $6.5 million to help individual shoppers build their own Instacart;
• Kibbo’s shot at making the #vanlife happen for more folks, something that we think is a good fit for the pandemic and the mobile professional.
• Sora’s $5.3 million raise for no-code HR connective tissue, something that I was rather bullish on but drew some chat about no-code itself, and if the trend is more hype than substance.

All that and I have a newsletter launching this weekend that if you read, you will automatically be 100% cooler. It’s called the TechCrunch Exchange, and you can snag it for free here.

NASA’s latest mission won’t actually reach space – but it will come very close, with a massive observation craft made up of a football stadium-sized high-altitude balloon, along with a special stratospheric telescope instrument that can observe wavelengths of light blocked by Earth’s atmosphere, cast from newly-formed stars.

The mission is called the ‘Astrophysics Stratospheric Telescope for High Spectral Resolution Observations at Submillimeter-wavelengths,’ but shortened to ASTHROS since that’s a mouthful. It is currently set to take off from Antartica in December 2023, and the main payload is an 8.4-foot telescope that will point itself at four primary targets, including two regions in the Milky Way where scientists have observed star formation activity.

That telescope, the largest ever to be flown in this way, will be held aloft by a balloon that will measure roughly 400 feet wide, when fully inflated, with scientists on the ground able to precisely direct the orientation of the business end of the observation instrument. It’s mission will include between two or three full loops around the South Pole, during a period spanning between three and four weeks as it drifts along high-altitude stratospheric winds. After that, the telescope will separate from the balloon and return to Earth slowed by a parachute so that it can potentially be recovered and reflow again in future to perform similar experiments.

While floating a balloon up to the edge of Earth’s atmosphere might sound like more of a relaxed affair than launching a satellite using an explosion-propelled rocket, NASA’s Jet Propulsion Lab engineer Jose Siles said in an agency release that balloon science missions are actually higher-risk than space missions, in part because many elements of them are novel. At the same time, however, they have the potential to provide significant rewards at a reduced cost relative to satellite launches on rockets.

The end goal is for ASTRHOS to create “the first detailed 3D maps of the density, speed and motion of gas” in these regions around newborn stars, in order to help better understand how they can impeded the development of other stars, or encourage the birth of some. This will be helpful in refining existing simulations of the formation and evolution of galaxies, the agency says.

Apple’s contract manufacturing partner Foxconn has started to assemble the current generation of iPhone units — the iPhone 11 lineup — in its plant near southern city of Chennai, a source familiar with the matter told TechCrunch.

A small batch of locally manufactured iPhone 11 units has already shipped to retail stores, but the production yield is currently limited, the person said, requesting anonymity as matters are private. Apple, in general, has ambitions to scale up its local production efforts in India, the person said.

The local production of current iPhone 11 models illustrates Apple’s further commitment to India, the world’s second largest smartphone market, as it explores ways to cut its reliance on China, which produces the vast majority of iPhone models today.

Apple’s contract manufacturing partner Taiwan-based Wistron first began assembling older iPhone models in 2017. But until now, Apple has not been able to have an assembly partner produce the current generation iPhone model in India.

Wistron, which has locally assembled older iPhone SE, iPhone 6s, and iPhone 7 models in the past in its Bangalore plant, currently assembles iPhone XR units in India. Apple discontinued the local production of iPhone SE and iPhone 6s last year, the person said.

Piyush Goyal, India’s Minister of Commerce and Industry, tweeted on Friday that Apple had begun assembling iPhone 11 models in India. Apple did not comment on this story.

Assembling handsets in India enables smartphone vendors — including Apple — to avoid roughly 20% import duty that the Indian government levies on imported electronics products.

Xiaomi, Vivo, Samsung, Oppo, OnePlus, and a range of other smartphone companies, have inked deals with contract manufacturers across India in recent years to produce much of their locally sold smartphones units in the country itself.

Xiaomi, which has been the top smartphone vendor in India since late 2018, said earlier this month that nearly every smartphone it sells in India is produced in the country.

Apple has been exploring ways to ramp up its production in India for years, but the company has struggled to find contract manufacturers that adhered to its safety and quality standards, people familiar with the matter have told TechCrunch.

News outlet The Information reported in March that some of Apple’s other contract manufacturers have attempted to enter — or expand in — India, but have run into regulatory and local laws issues. Pegatron, another assembly partner of Apple, plans to set up a local subsidiary in India and begin operations in the country, according to Bloomberg.

Foxconn, which counts India as one of its biggest markets, plans to invest $1 billion in its operations in the country, Reuters reported earlier this month. New Delhi announced a $6.6 billion plan to attract top smartphone manufacturers in June this year.

Apple plans to launch its online store in India in a few months and open its first brick-and-mortar retail store next year, chief executive Tim Cook announced earlier this year. The online store’s launch in India remains on track despite the pandemic, a person familiar with the matter said.

The Not Company, Latin America’s leading contender in the plant-based meat and dairy substitute market, is about to close on an $85 million round of funding that would value it at $250 million, according to sources familiar with the company’s plans.

The latest round of funding comes on the heels of a series of successes for the Santiago-based business. In the two years since NotCo launched on the global stage, the company has expanded beyond its mayonnaise product into milk, ice cream, and hamburgers. Other products, including a chicken meat substitute are also on the product roadmap, according to people familiar with the company.

NotCo is already selling several products in Chile, Argentina and Latin America’s largest market — Brazil — and has signed a blockbuster deal with Burger King to be the chain’s supplier of plant-based burgers. It’s in this Burger King deal that NotCo’s approach to protein formulation is paying dividends, sources said. The company is responsible for selling 48 sandwiches per store per day in the locations where it’s supplying its products, according to one person familiar with the data. That figure outperforms Impossible Foods per-store sales, the person said.

NotCo is also now selling its burgers in grocery stores in Argentina and Chile. And while the company is not break even yet, sources said that by December 2021 it could be — or potentially even cash flow positive.

NotCo co-founders Karim Pichara, Matias Muchnick, and Pablo Zamora. Image Credit: The Not Company

With the growth both in sales and its diversification into new products, it’s little wonder that investors have taken note.

Sources said that the consumer brand focused private equity firm L Catterton Partners and the Biz Stone-backed Future Positive were likely investors in the new financing round for the company. Previous investors in NotCo include Bezos Expeditions, the personal investment firm of Amazon founder Jeff Bezos, the London-based CPG investment firm, The Craftory, IndieBio and SOS Ventures.

Alternatives to animal products are a huge (and still growing) category for venture investors. Earlier this month Perfect Day closed on a second tranche of $160 million for that company’s latest round of financing, bringing that company’s total capital raised to $361.5 million, according to Crunchbase. Perfect Day then turned around and launched a consumer food business called the Urgent Company.

These recent rounds confirm our reporting in Extra Crunch about where investors are focusing their time as they try to create a more sustainable future for the food industry. Read more about the path they’re charting.

Meanwhile large food chains continue to experiment with plant-based menu items and push even further afield into cell-based meat using cultures from animals. KFC recently announced that it would be expanding its experiment with Beyond Meat’s chicken substitute in the U.S. — and would also be experimenting with cultured meat in Moscow.

Behind all of this activity is an acknowledgement that consumer tastes are changing, interest in plant-based diets are growing, and animal agriculture is having profound effects on the world’s climate.

As the website ClimateNexus notes, animal agriculture is the second-largest contributor to human-made greenhouse gas emissions after fossil fuels. It’s also a leading cause of deforestation, water and air pollution, and biodiversity loss.

There are 70 billion animals raised annually for human consumption, which occupy one-third of the planet’s land arable and habitable land surface, and consume 16% of the world’s freshwater supply. Reducing meat consumption in the world’s diet could have huge implications for reducing greenhouse gas emissions. If Americans were to replace beef with plant-based substitutes, some studies suggest it would reduce emissions by 1,911 pounds of carbon dioxide.

One little-known home and retail automation startup might seem like an unlikely candidate to help combat the ongoing pandemic. But its founder says its technology can do just that, even if it wasn’t the company’s original plan.

Butlr, a spin-out of the MIT Media Lab, uses a mix of wireless, battery-powered hardware and artificial intelligence to track people’s movements indoors without violating their privacy. The startup uses ceiling-mounted sensors to detect individuals’ body heat to track where a person walks and where they might go next. The use-cases are near-endless. The sensors can turn on mood-lighting or air conditioning when it detects movement, help businesses understand how shoppers navigate their stores, determine the wait-time in the queues at the checkout, and even sound the alarm if it detects a person after-hours.

By using passive infrared sensors to detect only body heat, the sensors don’t know who you are — only where you are and where you’re heading. The tracking stops as soon as you leave the sensor’s range, like when you leave a store.

The technology is in high demand. Butlr says some 200,000 retail stores use its technology, not least because it’s far cheaper than the more privacy-invading — and expensive — alternatives, like surveillance cameras and facial recognition.

But when the pandemic hit, most of those stores closed — as effectively did entire cities and nations — to counter the ongoing threat from of COVID-19. But those stores would have to open again, and so Butlr got back to work.

Butlr’s privacy-friendly body heat sensors don’t know who you are — only where you are. Now the company is retooling its technology to help combat coronavirus. (Image: Butlr)

Butlr’s co-founder Honghao Deng told TechCrunch that it began retooling its technology to help support stores opening again.

The company quickly rolled out new software features — like maximum occupancy and queue management — to help stores with sensors already installed cope with the new but ever-changing laws and guidance that businesses had to comply with.

Deng said that the sensors can make sure no more than the allowed number of people can be in a store at once, and make sure that staff are protected from customers by helping to enforce social distancing rules. Customers can also see live queue data to help them pick a less-crowded time to shop, said Deng.

All these things before a pandemic might have sounded, frankly, a little dull. Fast forward to the middle of a pandemic and you’re probably thankful for all the help — and the technology — you can get.

Butlr tested its new features in China at the height of the pandemic’s rise in February, and later rolled out to its global customers, including in the United States. Deng said Butlr’s technology is already helping customers at furniture store Steelcase, supermarket chain 99 Ranch Market, and the Louvre Museum in Abu Dhabi to help them reopen while minimizing the risk to others.

It’s a pivot that’s paid off. Last month Butlr raised $1.2 million in seed funding, just as the pandemic was reaching its peak in the United States.

Nobody knew a pandemic was coming, not least Deng. And as the pandemic spread, businesses have suffered. If it wasn’t for quick thinking, Butlr might’ve been another startup that succumbed to the pandemic.

Instead, the startup is probably going to help save lives — and without compromising anyone’s privacy.

The state of New York voted this week to pause any implementation of facial recognition technology in schools for two years. The moratorium, approved by the New York Assembly and Senate Wednesday, comes after an upstate school district adopted the technology earlier this year, prompting a lawsuit in June from the New York Civil Liberties Union on behalf of parents. If New York Governor Andrew Cuomo signs the legislation into law, the moratorium would freeze the use of any facial recognition school systems in the state until July 1, 2022.

Earlier this week, a school district in Topeka, Kansas announced that it would employ facial recognition technology at a temperature check kiosk for staff as part of its plan to reopen schools. Unfortunately, such a system would not be capable of preventing asymptomatic spread of the virus—one of COVID-19’s most challenging features.

With the pandemic still ravaging the U.S., the issue of school reopening has become deeply politicized. In a briefing earlier this month, White House press secretary Kayleigh McEnany argued that “science should not stand in the way” of reopenings.

“Facial recognition companies will use any angle they can to market their product to schools—but this one is just absolutely ridiculous,” Fight for the Future Campaign Director Caitlin Seeley George said of the technology’s proposed school implementation in Kansas. “Facial recognition will not stop the spread of COVID-19, and schools shouldn’t buy into this hokum.”

New York’s moratorium was viewed as a major victory by digital privacy advocates, who call into question not only the surveillance technology’s potential concerns for civil liberties but also the tech’s ability to accomplish its stated goals at all. The efficacy of such technology has come under fire repeatedly in studies demonstrating high false positive rates and racial biases coded into the systems themselves.

“We’ve said for years that facial recognition and other biometric surveillance technologies have no place in schools, and this is a monumental leap forward to protect students from this kind of invasive surveillance,” NYCLU Education Policy Center Deputy Director Stefanie Coyle said.

“Schools should be an environment where children can learn and grow, and the presence of a flawed and racially-biased system constantly monitoring students makes that impossible.”

HBO Max, the AT&T-owned streaming service that combines HBO with WarnerMedia content, has grown to 4.1 million subscribers, since its launch on May 27. Combined, HBO and HBO Max reached a total of 36.3 million U.S. subscribers by the end of the second quarter, according to statements made by AT&T CEO John Stankey on today’s earnings call. That figure has grown 5% from the 34.6 million subscribers the properties together had at the end of last year.

The 4.1 million figure breaks down as around 3 million retail subscribers and over 1 million were wholesale subscribers who came to the new service via one of AT&T wireless plans, where the service is bundled.

Though it’s still early days for HBO Max, these numbers indicate that the vast majority of traditional HBO customers have not yet tried HBO Max, even though it’s free for them to use. Currently, HBO customers can authenticate with HBO Max using their cable or satellite TV provider account information. HBO Now subscribers, meanwhile, are automatically upgraded to Max across Hulu, mobile apps, select ISPs, and the HBO Now site.

The HBO strategy, from a consumer perspective, has been confusing. HBO is known as premium channel with mostly adult content. This chanel had been distributed across mobile devices as HBO GO for traditional pay TV customers and HBO Now for over-the-top users. With the launch of HBO Max, the goal has been to transform HBO into a broader offering for the whole family, similar to Netflix. To do so, HBO, WarnerMedia and other licensed content was combined under one roof.

AT&T said today that HBO Max customers spent, on average, 70% more time viewing the service on a weekly basis, compared with HBO Now. It also stressed the popularity of its original content, noting that all 6 of its new originals found themselves ranked among the top 25 viewed series on the platform. By August, HBO Max will have 21 new original series on the platform.

But WarnerMedia still wants to distribute “standard” HBO to its larger, existing customer base, and has a number of deals in place to do so across a variety of streaming TV services, like Hulu, and platforms, like Apple TV, in addition to numerous pay TV providers. In addition, HBO is sold as an add-on premium subscription across some platforms, like Amazon and Roku.

That makes it difficult for consumers to understand which version of HBO they can get and where it will work.

That significant challenge is made worse by the fact that WarnerMedia has not yet been able to ink deals for HBO Max with the two top streaming media platform providers in the U.S.: Amazon and Roku, which control 70% of the market. That means consumers who have heard of the new service won’t be able to find the app on these devices.

Stankey addressed this problem today when speaking to investors.

“We’ve tried repeatedly to make HBO Max available to all customers using Amazon Fire devices, including those customers that have purchased HBO via Amazon,” he said. “Unfortunately, Amazon has taken an approach of treating HBO Max and its customers differently than how they’ve chosen to treat other services, and their customers.”

The comments, which notably skip over any mention of Roku, come only days before Amazon CEO Jeff Bezos is set to testify before the House Judiciary Antitrust Subcommittee, along with CEOs from Apple, Google and Facebook, as part of the Committee’s ongoing investigation of potential anti-competitive practices in the digital marketplace.

One area of concern for the Committee is the power and control the tech companies have over their digital marketplaces, where they set terms, ban apps and services from distribution, and take commissions from businesses that compete with their own.

AT&T’s issue with Amazon, in this case, has to do with how it wants to distribute HBO Max across the media platforms. With its shift in strategy, AT&T aims to offer consumers a standalone app, similar to Netflix — as it does now on Apple TV and Android TV. But Amazon and Roku want to also sell subscriptions to HBO Max like they currently do for HBO through the Amazon Prime Video Channels platform and Roku’s Premium Subscription platform on The Roku Channel.

With Roku’s investment in The Roku Channel it’s been distancing itself from being the neutral platform it once was, as it’s now motivated to make deals that benefit its own goals around The Roku Channel’s subscription marketplace, the same as other non-neutral players, like Amazon. This is not a problem unique to HBO Max, either. NBCU’s new streaming service Peacock also failed to offer Roku and Fire TV support at launch, for similar reasons. Unfortunately, the consumer is the one who ultimately loses here as tech giants grapple over not only the dollars, but who will own the customer relationship in the long run.

Without distribution, AT&T’s WarnerMedia could be challenged to meet its goals for HBO Max.

The company, however, claims it’s still on track for 50-55 million HBO Max subscribers in the U.S by 2025. As part of this strategy, WarnerMedia also plans to launch HBO Max internationally and offer a lower-cost, as-supported version of the service sometime next year.

Quantum computing is at an interesting point. It’s at the cusp of being mature enough to solve real problems. But like in the early days of personal computers, there are lots of different companies trying different approaches to solving the fundamental physics problems that underly the technology, all while another set of startups is looking ahead and thinking about how to integrate these machines with classical computers — and how to write software for them. At Disrupt 2020 on September 14-18, we will have a panel with D-Wave CEO Alan Baratz, Quantum Machines co-founder and CEO Itamar Sivan and IonQ president and CEO Peter Chapman. The leaders of these three companies are all approaching quantum computing from different angles, yet all with the same goal of making this novel technology mainstream.

D-Wave may just be the best-known quantum computing company thanks to an early start and smart marketing in its early days. Alan Baratz took over as CEO earlier this year after a few years as chief product officer and executive VP of R&D at the company. Under Baratz, D-Wave has continued to build out its technology — and especially its D-Wave quantum cloud service. Leap 2, the latest version of its efforts, launched earlier this year. D-Wave’s technology is also very different from that of many other efforts thanks to its focus on quantum annealing. That drew a lot of skepticism in its early days but it’s now a proven technology and the company is now advancing both its hardware and software platform.

Like Baratz, IonQ’s Peter Chapman isn’t a founder either. Instead, he was the engineering director for Amazon Prime before joining IonQ in 2019. Under his leadership, the company raised a $55 million funding round in late 2019, which the company extended by another $7 million last month. He is also continuing IonQ’s bet on its trapped ion technology, which makes it relatively easy to create qubits and which, the company argues, allows it to focus its efforts on controlling them. This approach also has the advantage that IonQ’s machines are able to run at room temperature, while many of its competitors have to cool their machines to as close to zero Kelvin as possible, which is an engineering challenge in itself, especially as these companies aim to miniaturized their quantum processors.

Quantum Machines plays in a slightly different part of the ecosystem from D-Wave and IonQ. The company, which recently raised $17.5 million in a Series A round, is building a quantum orchestration platform that combines novel custom hardware for controlling quantum processors — because once quantum machines reach a bit more maturity, a standard PC won’t be fast enough to control them — with a matching software platform and its own QUA language for programming quantum algorithms. Quantum Machines is Itamar Sivan’s first startup, which he launched with his co-founders after getting his Ph.D. in condensed matter and material physics at the Weizman Institute of Science.

Come to Disrupt 2020 and hear from these companies and others on September 14-18. Get a front-row seat with your Digital Pro Pass for just $245 or with a Digital Startup Alley Exhibitor Package for $445. Prices are increasing next week, so grab yours today to save up to $300.