Category: UNCATEGORIZED

VSCO, the popular photo editing app and Instagram rival, is the latest company to undergo layoffs attributed to the COVID-19 crisis, which has put a strain on venture-backed startups. According to a report from NPR, which was then confirmed by VSCO co-founder and CEO Joel Flory on LinkedIn, the company is laying off around 30% of staff, or 45 of its employees.

Though Flory didn’t reference the COVID-19 outbreak by name, his post described the rapid change to the economy which necessitated the layoffs.

“2020 was staged to be a year where we would continue to forward invest into our business,” Flory wrote. “Overnight our environment changed. We realized that we would need to shift towards running a self-sustaining business.”

In other words, VSCO is anticipating a future where venture capital is less readily available and is making the shift towards running a business that’s no longer reliant on outside capital or funding in order to operate. By laying off a portion of staff, VSCO believes it will be able to sustain its business for many years.

To date, VSCO has raised $90 million in outside funding, and sees its app used by more than 20 million active users per week. However, a smaller portion of those users are customers who pay for a VSCO Membership that offers an expanded array of features, tools, presets, and other content. VSCO confirmed to TechCrunch in February 2020 that it had around 2+ million paid subscribers.

Late last year, VSCO had said it was on pace to surpass 4 million paid subscribers by 2020 and was approaching $80 million in annual revenue.

Pitchbook data valued the business at $550 million, NPR also reported — a number that’s made the rounds before, as well.

In 2020, VSCO has rolled out several features designed to better support video editing. It gave creators the ability to publish their video edits to the VSCO feed and last month, for example, and aunched a more powerful and feature-rich video editing tool called Montage. The latter was meant to grow VSCO’s paid subscriber base, as it requires users to pay in order to save and publish their finished videos.

VSCO’s profile has also been raised beyond its core user base in recent months, after it became associated with a Gen Z meme that circulated on sites like TikTok.

Though perhaps not the marketing the company would have desired, the VSCO girl meme became a way to mock a certain type of girl — one who sports a messy bun, baggy shirts, and scrunchies and carries around eco-conscious items like Hydroflasks or metal straws. VSCO’s app for making your photos look good became associated with this persona as it’s often used to filter and edit images in order to give them an aesthetic that teenaged girls (VSCO girls) supposedly desired.

As for the layoffs, VSCO says its former employees will receive a minimum of seven weeks of severance pay, and a minimum of two months of COBRA health coverage. In terms of equity, VSCO is pro-rating stock option vesting and extending equity exercise periods post-term, it also notes.

Flory’s LinkedIn post additionally offered a way for those interested in hiring the laid-off VSCO employees to reach the company. He said the jobs@vsco.co email address could be used to make inquires about hiring its talent. The company will also be working to provide other job placement resources and support, it says.

“I am deeply saddened to let some incredible people go and am so grateful for everything they’ve done for VSCO and our community,” Flory wrote. “Our mission and vision remain unchanged. Our ability to provide a place for creative expression, inspiration and connection is even more important than ever right now,” he added.

Airbnb takes on new debt as it adapts to a world without tourism, Apple announces a new entry-level iPhone and Google lowers Nest camera quality.

Here’s your Daily Crunch for April 15, 2020.

1. Airbnb ups its debt by $1B amid the coronavirus travel crunch

Airbnb has secured commitments of $1 billion for a syndicated term loan from institutional investors. The emergency cash injection comes as the coronavirus travel freeze continues to hammer vacation rentals, with holidaymakers locked down at home and global travel banned or heavily discouraged for public health reasons.

Earlier this month, Airbnb announced an additional $1 billion raise in debt and equity. At the time it said the funds would support its ongoing work to invest over the long term, while this new loan looks more clearly targeted at dealing with immediate negative impacts caused by COVID-19.

2. Apple introduces new $399 iPhone SE with Touch ID and 4.7″ screen

With a $399 starting price point, the new SE is aimed squarely at new iPhone users or first time smartphone buyers, but it could appeal to those who just want the smallest iPhone model currently available.

3. Google is lowering Nest camera quality ‘to conserve internet resources’

If you’re looking at footage from your Nest Cam and the quality seems a bit lower than normal: it’s not your eyes. The quality adjustment is rolling out over the next few days, and Google says anyone affected will get a notification in the Nest app.

4. Onfido, the AI-based ID verification platform, raises $100M led by TPG

Onfido uses AI to “read” a person’s identity documents, then uses facial recognition and other datapoints to verify that a person is who she or he says they are online. Customers for its tech include major banks, government bodies and businesses doing recruitment — any organization running parts of its processes virtually.

5. As stocks recover, private investors aren’t buying the hype

Yesterday, we discussed the state of affairs for private companies with Jason Pressman of Shasta Ventures. From his perspective — and that of other investors who we’ve spoken to recently — it’s hard to understand the level of optimism that public markets are signaling. (Extra Crunch membership required.)

6. NBCUniversal’s Peacock launches on Comcast

Today’s launch lines up with the schedule that the company announced in January, which pointed to a broader release on July 15. NBCUniversal says that’s still happening, though the timing will no longer coincide with the Tokyo Summer Olympics.

7. Attentive raises another $40M for mobile messaging, will invest in helping customers respond to COVID-19

The messaging startup raised a $40 million Series B last summer, followed by a $70 million Series C at the beginning of this year. Today it’s announcing that it’s extended the Series C by another $40 million, bringing the total round size to $110 million.

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 9am Pacific, you can subscribe here.

While controversy has dogged the $10 billion, decade-long JEDI contract since its earliest days, a report by the DoD’s Inspector General’s Office concluded today that, while there were some funky bits and potential conflicts, overall the contract procurement process was fair and legal and  the president did not unduly influence the process in spite of public comments.

There were a number of issues along the way about whether the single contractor award was fair or reasonable, about whether there were was White House influence on the decision, and whether the president wanted to prevent Amazon founder Jeff Bezos, who also owns the Washington Post, from getting the contract.

There were questions about whether certain personnel, who had been or were about to be Amazon employees, had undue influence on the contents of the RFP or if former Secretary of Defense showed favor to Amazon, which ultimately did not even win the contract, and that one of Mattis’ under secretaries, in fact, owned stock in Microsoft .

It’s worth noting that the report states clearly that it is not looking at the merits of this contract award or whether the correct company won on technical acumen. It was looking at all of these controversial parts came up throughout the process. As the report stated:

“In this report, we do not draw a conclusion regarding whether the DoD appropriately awarded the JEDI Cloud contract to Microsoft rather than Amazon Web Services. We did not assess the merits of the contractors’ proposals or DoD’s technical or price evaluations; rather we reviewed the source selection process and determined that it was in compliance with applicable statutes, policies, and the evaluation process described in the Request for Proposals.”

Although the report indicates that the White House would not cooperate with the investigation into potential bias, the investigators claim they had enough discussions with parties involved with the decision to conclude that there was no undue influence on the White House’s part:

“However, we believe the evidence we received showed that the DoD personnel who evaluated
the contract proposals and awarded Microsoft the JEDI Cloud contract were not pressured regarding their decision on the award of the contract by any DoD leaders more senior to them, who may have communicated with the White House,” the report stated.

The report chose to blame the media instead, at least for partly giving the impression that the White House had influenced the process, stating:

“Yet, these media reports, and the reports of President Trump’s statements about Amazon, ongoing bid protests and “lobbying” by JEDI Cloud competitors, as well as inaccurate media reports about the JEDI Cloud procurement process, may have created the appearance or perception that the contract award process was not fair or unbiased.”

It’s worth noting that we reported that AWS president Andy Jassy made it clear in a press conference at AWS re:Invent in December that the company believed the president’s words had influenced the process.

“I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal.”

As for other points of controversy, such as those previously referenced biases, all were found lacking by the Inspector General. While the earliest complaints from Oracle and others were that Deap Ubhi and Victor Gavin, two individuals involved in drafting the RFP, failed to disclose they were offered jobs by Amazon during that time.

The report concluded that while Ubhi violated ethics rules, his involvement wasn’t substantial enough to influence the RFP (which again, Amazon didn’t win). “However, we concluded that Mr. Ubhi’s brief early involvement in the JEDI Cloud Initiative was not substantial and did not provide any advantage to his prospective employer, Amazon…,” the report stated.

The report found Gavin did not violate any ethics rules in spite of taking a job with Amazon because he had disqualified himself from the process, nor did the report find that former Secretary Mattis had any ethical violations in its investigation.

One final note: Stacy Cummings, Principal Deputy Assistant Secretary of Defense for Acquisition and Deputy Assistant Secretary of Defense for Acquisition Enablers, who worked for Mattis, owned some stock in Microsoft and did not disclose this. While the report found that was a violation of ethics guidelines, it ultimately concluded this did not unduly influence the award to Microsoft.

While the report is a substantial, 313 pages, it basically concludes that as far as the purview of the Inspector General is concerned, the process was basically conducted in a fair way. The court case, however involving Amazon’s protest of the award to Microsoft continues. And the project remains on hold until that is concluded.

Note: Microsoft and Amazon did not respond to requests from TechCrunch for comments before we published this article. If that changes, we will update accordingly.

Report on the Joint Enterprise Defense Infrastructure (Jedi) Cloud Procurement Dodig-2020-079 by TechCrunch on Scribd

The global supply chain is currently being squeezed from all angles amid a global pandemic. At least one product, however, will arrive ahead of schedule. Originally planned for a May arrival, the iPad Pro’s new trackpad-sporting Magic Keyboard is up for preorder now and set to start shipping next week.

You can read all of the details about the accessory here, along with Matthew’s hands-on time with the product via the iPad Pro review. The gist is basically that Apple’s further blurring the lines between the iPad and MacBook with additional hardware and software productivity updates.

The peripheral harnesses the cursor and mouse support delivered via  iPadOS 13.4. The “floating” swiveled design allows for a 130-degree range of via angles, while the backlit keys use the company’s much improved scissor switch design. There’s also an additional USB-C port for charging, but not data.

Along with the new Pro, it also works with the 2018 version. It’s not cheap, however, priced at $200 for the 11-inch and $349 for the 12-inch. Apple is also working with accessory makers to offer lower-priced trackpad-sporting cases.

Disrupt San Francisco 2020, the OG of startup tech conferences, takes place at Moscone West on Sept. 14 – 16. It’s an event you don’t want to miss, and we’re here to tell early-stage founders one of the best ways to get the most out of the Disrupt experience. Apply to compete in Startup Battlefield for a shot the coveted Disrupt Cup and the even more coveted $100,000 prize.

Let’s pause here for an improtant messaage. We know COVID-19 has created many challenges, but Disrupt SF is still on schedule (keep tabs on our updates here). Like startup founders everywhere, we quickly learn where, when and how to pivot. Case in point, check out our new Disrupt Digital Pass option.

This epic pitch competition is the stuff of Silicon Valley legend. Cloudflare, Mint.com, Dropbox, Vurb, Get Around — these are just some of the many companies that competed in Startup Battlefield. Here’s how it all works.

First things first. Applying, training and competing is 100 percent free. TechCrunch charges no fees and does not take any equity. Who can apply to compete in Startup Battlefield? Excellent question. You can apply — regardless of location or industry — if your startup clears these low bars.

• Your startup must be early stage
• You have an MVP with a tech component — software, hardware or platform
• You’ve received little to no major media coverage

TechCrunch editors closely vet every application and will choose roughly 20 of the most innovative startups. If you make the cut, your team will receive several weeks of intense training with our Startup Battlefield team. You’ll fine-tune your pitch, business model and live demo. No need to stress — you’ll be thoroughly prepped to impress.

On the big day, you’ll step onto the Disrupt Main Stage in front of thousands of influential attendees, investors and global media. Plus, we live-stream the event to the world on TechCrunch.com. You’ll be hard pressed to find a more enthusiastic audience or a better launch pad for your startup.

Teams have just six minutes to pitch and demo to a panel of expert judges (highly regarded VCs and technologists). Judges follow up each pitch with a probing Q&A. Only four to six startups will make it to the finals for another round of pitch, demo and grill in front of a new set of judges.

From that elite set of finalists, one startup will emerge to win the Disrupt Cup, the $100,000 equity-free prize and massive media exposure and investor attention. Buckle up, because it can be a life-changing experience.

But keep this in mind — all Startup Battlefield competitors reap the benefits of standing in that bright media and investor spotlight. They also become part of the Startup Battlefield Alumni Community. These elite companies have collectively raised $9 billion and produced more than 115 successful exits (IPOs or acquisitions). Imagine the networking possibilities.

Disrupt San Francisco 2020 takes place on Sept. 14 – 16. Don’t miss your shot to launch your startup in a big, big way. Apply to compete in Startup Battlefield today. Come and show the world what you’ve got!

Is your company interested in sponsoring or exhibiting at Disrupt San Francisco 2020? Contact our sponsorship sales team by filling out this form.

Instagram is partnering with the Los Angeles-based restaurant ordering platform ChowNow to make pictures and stories from local restaurants shoppable by adding “Order Food” buttons and stickers to their images and videos.

The buttons and stickers will link directly to ChowNow to complete order flow, the companies said. Followers can also re-share stickers on their own Instagram Stories to drive awareness.

Local restaurants have been hit especially hard by the forced economic shutdown and social distancing measures imposed by state and local governments to contain the spread of the COVID-19 epidemic.

“During this unprecedented pandemic, ChowNow has mobilized all its resources to help local restaurants survive and ultimately thrive, launching new products and services in record time,” said Chris Webb, ChowNow’s CEO and co-founder in a statement. “This Instagram feature is yet another valuable tool we’re offering our restaurant partners — at no cost to the restaurants — to help them drive more revenue and boost order volume without suffering the outrageous commissions and fees imposed by other delivery apps.”

Food pics and videos are among the most widely shared posts on Instagram and the new feature will allow users to immediately order the dishes they see.

It’s a great marketing tool for restaurants, says Webb, and an easy way for them to inform their customers that they are open for business — even if they may not have open tables.

“We’ve had to quickly pivot to delivery and takeout only, and this has been a huge challenge for independent restaurants across the country. With ChowNow seamlessly linking to our Instagram accounts — and not charging any commissions on orders — we’re able to promote all the new things we’re offering while ensuring that more dollars go directly back to our restaurants and beloved staff,” said Jeremy Fox, Chef/Owner of Birdie G’s and Tallula’s in Los Angeles. 

The partnership with Instagram developed over the last two or three weeks, says Webb.

“One of the most critical things for a restaurant is to engage their customer base and let them know that they’re able to order food… and the number one channel restaurants are using to do that is Instagram,” says Webb. “It’s much easier to go on Instagram and post a photo of food and prompt people to go to the website.”

Anyone looking to order food from local restaurants they follow just has to click on a button or a sticker in a story. That will take a user to the ChowNow ordering system and customers can pay using ChowNow’s integration with Stripe.

ChowNow’s system doesn’t take a commission, but the company charges between $99 and $149 per month for its ordering and payment toolkit. ChowNow takes care of the payments and delivery through partnerships with companies like DoorDash and local delivery services like Jolt Delivery in Los Angeles.

I recently got an email from a company that once sold me a pair of jeans. They wanted to talk about COVID-19. I’ve gotten a lot of these emails over the last few weeks, as more and more companies are blasting their contacts, expressing concern, making commitments and vowing that we will get through this together.

I used to run communications teams, so I get it; no one knows what to do these days, and all of us are looking for ways to help. But as comforting as it is to know my insurance company, food delivery service and apparel retailers are looking out for me, I find myself hoping that there’s more to the plan — that they are helping the people who actually need it (not me).

As an investor and advisor to founders, I’ve spent the last couple of weeks as part strategist, part therapist. This crisis is unlike anything that has come before in our lifetimes, but there are things we can learn from other crises and from each other to navigate the uncertainty ahead. This is not a post about layoffs or expense planning, although there are important things to say about both. Instead, this is a collection of ideas that have come out of brainstorming sessions I’ve had with startup founders over the last few weeks focused on how to think about sales and marketing in the time of COVID-19.

No one has a playbook for this. But we can experiment. We can stop a bunch of activity that was normal just weeks ago. We can learn from each other. We can plan for both short-term disruptions and long-term realities. And we can give each other some actionable steps to take at a time when everyone is trying to figure out the best way forward.

To that end, here are a few things I’ve brainstormed with founders, divided into three categories:

1) Things to reconsider or stop doing;

2) Strategies you may want to start using;

3) Places where you can double down.

Apple has dropped a new iPhone SE on the market today. It’s a 4.7” iPhone with a physical home button, Touch ID, a single rear-facing camera and the A13 Bionic chip on board. With a $399 starting price point, the new SE is aimed squarely at new iPhone users or first time smartphone buyers but could appeal to those who want the smallest iPhone model currently available above other considerations.

It comes in black, silver and Product(RED) editions and features a single rear-facing camera and a single front-facing camera. This is Apple’s new entry-level iPhone.

The overall package is pretty appealing here. It’s got the same A13 chip as in the iPhone 11 and iPhone 11 Pro and Apple tells me that the processor performance in the SE is comparable and not toned down for the more affordable unit.

The display is Apple’s Retina HD unit, which is an LCD panel. It is not a Liquid Retina display like the iPhone 11 and iPhone XR. I’m still waiting on specs to see what we’re looking at from a contrast ration perspective here, but it does have True Tone.

Probably the biggest defining feature of the iPhone SE besides its size is its inclusion of a physical home button with Touch ID instead of the Face ID system we’ve come to expect on new iPhones. It’s not clear now whether that’s due to size constraints preventing the inclusion of the needed front-facing True Depth Camera array — but pricing is probably just as likely to figure in this calculation.

Touch ID is reliable and even preferred by some users, though the physical home buttons have long been one of the biggest hardware failure points of iPhones with the feature. In our new mask-using world, though, some ground swell of Touch ID enthusiasm has been gaining. It’s hard to make Face ID systems properly recognize you behind a cloth wrap covering half of your face. This has been an issue for a while in Asia, where mask wearing has long been a matter of courtesy during allergy season or when a person is ill.

Camera and Comparisons

A couple of main items make Apple’s claim that the iPhone SE is ‘the best single-camera system’ supportable. You may recall that the iPhone XR also supported portrait mode and had the same resolution of rear camera. But with the iPhone SE, you have the A13 bionic, a new ISP and the Neural Engine that have improved things significantly in the machine learning department — allowing for segmentation masks and semantic rendering, two big improvements that make the portrait mode far more effective in recent iPhone models.

Apple only supported 3 lighting effects on the XR — the ones where you didn’t have to strip away the background. Those require more beef in the rendering and separation pipeline so the iPhone SE can do those now. The iPhone SE also has the improved Smart HDR that came to the iPhone 11 — once again tied to the chip.

You also get a bunch of other benefits of that new image pipeline including expanded dynamic range while shooting video at 4k 30fps, 4k 60 cinematic stabilization and the improved smart HDR while shooting still images. Also brought all 6 lighting effects to the front facing camera in this model.

It’s very like you’re getting iPhone 11 Pro image pipeline attached to a single-camera system — but, and it’s a big but — you don’t get Night Mode. Night Mode is one of the most compelling iPhone camera features in a very long time, so buying the new SE is really a price and size over camera equation.

Lineup Placement

This lineup puts the current iPhones Apple produces at roughly 7 as far as I can tell. Apple will cease selling the iPhone 8 with this release, and will sell the iPhone 8 Plus in certain regions until channel inventory is exhausted. The iPhone XR, XS and XS Max, iPhone 11 and iPhone 11 Pro and this new model. The iPhone SE’s pricing is incredibly attractive at $399 with 64GB of storage with only a $50 bump to $449 for 128GB.

If you’re comparing the iPhone XR to the iPhone SE, your only real consideration for the older model would be that you must have the larger screen size. But that seems like a hard sell at $200 more.

Overall, Apple seems to be working hard to mortar over the gaps in its iPhone pricing umbrella, making entry into its ecosystem more attractive. Once in, iPhone users tend to stick for the most part, both because of service-based lock-ins and high customer satisfaction.

Just a few weeks ago, Seattle-based small business SnapBar — which provides custom photo booth rentals and selfie stations for events nationwide — was thriving, getting ready for a full slate of spring and summer events. But amid business closures and shelter-in-place orders brought on by COVID-19, owner and father-of-three Sam Eitzen and his team of 18 had to get creative — quickly — to keep the company going. After Sam and his leadership team slashed their own salaries by 50% and held a nearly all-night brainstorm session, they pivoted SnapBar’s entire business strategy to ship and sell gift boxes packed with items crafted by local small businesses.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed on March 27 to help business owners like Sam via $350 billion in federal loans and grants. But major structural flaws and implementation issues are preventing these loans from getting to business owners quickly — if at all — and providing the level of help they need.

Small businesses and their employees have already run out of time. Data from my company Gusto, which provides payroll, benefits, compliance and HR software to 100,000 small businesses, shows that layoffs increased by more than 1,000% from February 2020 to March 2020. There was also a 9% gap in overall wages paid to small business employees in March.

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we need to talk about what we’re hearing from the private markets and the public markets, and how different their messages seem to be.

The public markets through yesterday were on the bounce, rising sharply from recent lows, driven by negative news concerning COVID-19 and its ensuing economic damage. As TechCrunch noted yesterday, major American indices had seen their value sharply recover from lows recorded earlier in the year. This was odd, as the news from COVID-19 is far from good — America is still the country with the highest rate of new, confirmed infections and related deaths by some margin — and the economic damage stemming from the nation’s belated efforts to stem the pandemic at home piles up.

You can easily read optimism in the stock market: that the COVID-19 infection footprint at home isn’t as bad as some models indicated, that social distancing is working, and that the economy will quickly rebound from this bother. Ask around the private markets, however, and you’ll hear a very different narrative.

Yesterday while kicking over the business-focused modern software market (enterprise SaaS, if you prefer) with Shasta Ventures‘ Jason Pressman, we discussed the state of affairs for private companies that he’s seeing from his perch inside the startup machine. Taking his notes into account, along with those of other investors that we’ve spoken to recently, it’s hard to understand the level of optimism that public markets are signaling.

Not that Pressman is a pessimist, it would be difficult to be a net-gloomy venture capitalist on the whole, given the risk profile of the investments they make. But some VCs who have invested through prior downturns are comfortable being candid about what they are seeing from private companies, those inside their portfolios and out.

This morning let’s explore the public-private optimism gap for the second time. The last time we undertook this particular theme, public investors were being pessimists and private investors appeared unseasonably bullish. It’s unlikely that there is room for both views to be correct.

Smiles, frowns