Category: UNCATEGORIZED

Though the effects of the coronavirus pandemic on restaurants has been crystal clear, many forget the impact this disease has had on food chain suppliers. With restaurants closed, these suppliers — who still have access to tons upon tons of food — no longer have customers.

Meanwhile, end consumers are dealing with their own stresses around securing food, deciding between venturing out to the grocery store and ordering food through increasingly unreliable grocery delivery services.

That’s where Pepper comes in.

Pepper launched late last year with an enterprise product focused on connecting restaurants with their suppliers. Most restaurants have 6+ different suppliers, and manually placed orders with each of them individually each night either by email, voicemail or text message. Oftentimes, there was no confirmation that the order was received, with employees receiving orders and hoping that everything arrived on time as it was requested.

To digitize the industry, Pepper developed an app that let restaurants input the contact information of suppliers and place orders quickly, and then let those suppliers press a single button to confirm the order was received and in progress.

In the six months since launch, things have changed dramatically for the startup, which has led cofounder and CEO Bowie Cheung to rethink the business.

Alongside facilitating orders between restaurants and suppliers, Pepper has now opened up a consumer-facing portal called Pepper Pantry, allowing everyday users to place an order directly with a food supplier.

Folks pay a flat $5 payments processing fee on the platform, and can choose from fresh meats, produce, dairy and other categories to have food delivered directly to their home.

Of course, this involved considerable adaptation on the part of Pepper and their suppliers, who are used to shipping pallets of food rather than bags or boxes. However, it has created some jobs on the supplier side as folks repackage food to amounts that are suitable for families or individuals, rather than businesses.

Cheung says the portions are still ‘bulk’ but more on par with a Sam’s Club or Costco purchase than the types of orders restaurants were placing.

Suppliers are able to choose their minimum order amount, which can range between $0 and $150. Thus far, eight suppliers have signed on to the Pepper Pantry platform, serving the greater NYC area (NYC, NJ, CT) and the greater Boston area.

Pepper declined to disclose its total funding amount, but did share that it has received investment from Greylock’s Mike Duboe and Box Group.

Domestic stocks rose today in the United States, with all major indices opening higher.

TechCrunch has slowed its daily coverage of the US stock market as volatility has receded. We try to avoid covering the stock market too much, but there are days when doing so would be derelict. The value of public companies impacts the value of private companies like startups, so we have to pay at least some attention on days when shares rise or fall sharply.

Today’s opening normally wouldn’t qualify as sufficiently violent to warrant coverage. But what the open today misses in total movement it makes up in oddness: This morning the US government reported that 6.6 million individuals filed for unemployment in the last week, adding to the roughly 10 million that did so in the preceding two weeks. Canada’s March unemployment, out this morning as well, was similarly awful.

And the layoffs have continued, with Yelp this morning announcing around 1,000 layoffs and 1,100 furloughs. Startups are cutting staff at a pace not seen in a decade, the economy is broadly expected to enter a recession and venture capitalists are slowing their investment cadence as revenue losses rise and valuations are expected to dip.

And yet, stocks are higher. Sure, the Fed announced a wave of new action this morning, but reactive band-aids to bleeding wounds don’t net out to zero in the short-term.

All this is to say that if you don’t get what you are seeing in the ticker tape this morning, you’re not alone. What the fuck is going on? I don’t know.

But, I suppose, here’s where things are at start of the day:

• Dow Jones Industrial Average: +305.81, +1.31%
• S&P 500: +30.63, +1.11%
• Nasdaq Composite: +67.94, +0.84%
• Bessemer cloud index: +13.73, +1.20%

More at the close.

The Los Angeles-based app development shop, V/One, is giving away 50,000 free mobile app builds through the rest of April as the company officially launches its platform for would-be, LA-based mobile app moguls.

Since its soft launch, December 20th of last year, the app development company has built over 100 new applications.

The company’s December launch featured an “app accelerator” and offered a guidebook for people who wanted to develop mobile applications to work with the development shop on early applications.

Under the terms of the development agreement, wannabe app creators get their application for free as long as they sign up for the monthly hosting service. “They can walk away at any time and cancel the hosting if they don’t want the app anymore. Builds of the apps will be delivered around 60 days upon signing up,” said V One founder, Jeremy Redman.

For founder Jeremy Redman, V/One was a business that solved a problem he had faced himself as an entrepreneur just starting out, but lacking the technical experience to build his own applications.

“I had an app idea but no real idea how to executive it. I’m non-technical, meaning I can’t code. I tried finding a technical co-founder but got abandoned when things got tough. Dev shops were too expensive and on the verge of predatory, and cookie cutter builders don’t address the designs I had in mind,” Redman said. “But, I wasn’t going to let someone tell me I couldn’t be a tech entrepreneur.”

The app development toolkit that V One uses was built entirely in-house to automate the build process on the back end, says Redman.

For small businesses, the plan is to charge $297 per month for app development and customization along with any future builds, hosting, and product support and maintenance. The company’s more robust place is a $997 per month package. Both offer the option to cancel anytime with the ability to own the code for the app.

“So far the only limitations are one’s creativity. Essentially speaking, if you can design it it can be made a functional app in our builder,” Redman wrote in an email. “If I had to put a constraint on it I would say we are not good at AR/VR and machine learning and some obscure features 99% of people don’t need [or] want.”

Redman thinks that roughly 98% of an app can be built using the company’s toolkit and then the final bit of coding and development (specifically for augmented or virtual reality — or other components) can be added in a final customization.

“If customers can describe their idea in one, clear sentence then it can be made in our builder and it can be made quickly,” Redman wrote. “What we don’t do is take pages and pages of details and make an app out of it. They can fill in the details later.”

V One uses a cross-platform framework, serverless technology and modern development practices to generate apps using an easy to use app builder, the company said. Users can think of it like Wix or WordPress for mobile app development.

“Never before has someone been able to build an app from just typing their idea out, let alone for this low a cost,” says Redman.

Ready or not, edtech has been shoved into the spotlight as millions of students shifted to remote learning due to pandemic-related school shutdowns.

But backing these companies are investors who have long believed that edtech was always set up for great returns and a big impact. We reached out to several to find out about which trends they’ve been willing to put their money behind. (And frankly, what we’ve been missing.)

We got into how tech can help — or hurt — underserved students struggling to find Wi-Fi or a laptop and how braintech still is ripe for innovation. Investors also shared the parts of edtech that Zoom video conferencing doesn’t address and why gamifying learning is so important.

Here’s who we talked to:

• Jenny Lee, GGV
• Tetyana Astashkina, LearnLaunch
• Jean Hammond, LearnLaunch
• Marlon Nichols, MaC Venture Capital
• Mercedes Bent, Lightspeed Venture Partners
• Jennifer Carolan, Reach Capital
• Shauntel Garvey, Reach Capital
• Jan Lynn-Matern, Emerge Education
• Lesa Mitchell, Techstars 
• Tory Patterson, Owl Capital
• Ian Chiu, Owl Capital
• Tony Wang, 500 Startups

Next week, we’ll publish the other findings we received from these investors, focusing on edtech in a post-COVID-19 world.

Responses below have been edited for length and clarity.

Jenny Lee, GGV

What trends are you most excited about in edtech from an investing perspective?

GGV Capital is focused on how technology is allowing startups to innovate and create new business models to (1) lower the reliance on physical locations and (2) to allow for teachers to teach online with multi-format (1:1, 1:n) virtual classrooms [and] (3) deliver highly interactive and personalized content via use of virtual characters, machine learning, natural language and voice recognition/processing. Edtech can be broken down into the process of (a) learning (reading, speaking, comprehension), (b) practicing, and (c) testing, and targets different age groups from 0-3 years old, 3-6 years, K-12 years and into exam prep and adult training. Over the last four to five years, we have invested in over 10 companies in the areas of language learning, test prep, holistic learnings (like logical thinking, programming etc) and K-12 homework assistant.

How much time are you spending on edtech right now? Is the market under-heated, over-heated or just right?

It’s a key investment sector for me, so I spend about 20-30% of my time with edtech startups. Over the last few years, it has been a steady sector, not over-heated, but the COVID-19 situation has thrown a bright spotlight on it as a sector benefiting from more stay-at-home children and parents anxious to keep them busy, learning and engaged. I expect the sector to heat up quite a bit as we have seen our portfolio companies attract a lot of new users, new revenue and new interested investors over the last several months as much of the world manages lock-down mode. We expect this trend to continue for our US-based and Asia-based edtech startups as well.

Paidy, a Japanese fintech startup that allows customers to make online purchases without credit cards, announced today that it has raised a $48 million Series C extension from ITOCHU.

The company says it has now raised a total of $281 million in equity and debt. Its latest investment from ITOCHU, one of the largest Japanese trading companies, was equity funding. ITOCHU previously participated in Paidy’s Series B and C rounds, and this brings the total it has invested into the startup to $91 million (the company said it did an extension round instead of moving onto a Series D so it could issue the same type of preferred shares).

Paidy’s last funding announcement was in October 2019, with investors including PayPal Ventures. The company has now raised a total of $281 million in equity and debt.

The latest funding will be used to strengthen Paidy’s balance sheet during the COVID-19 pandemic and also support the development of more “buy now pay later” services it will launch later this year.

Paidy’s payment service allows users to make purchases online, and then pay for them each month in a consolidated bill. The company uses proprietary technology to score creditworthiness, underwrite transactions and guarantee payment to merchants. Since many Japanese consumers prefer not to use credit cards for online payments, Paidy’s service can help vendors increase their conversion rates, average order values and repeat purchases.

During the pandemic, the company says usage of its service has increased since more people are buying essential items online, despite declines in spending on travel, hotels and large-ticket items (a state of emergency was declared in Japan last week in Tokyo and six other prefectures).

Shuichi Kato, the executive officer and executive president of ITOCHU’s ICT and Financial Business company, said in a statement that, “We strongly beieve that they will keep playing a critical role in our retail finance strategy as their one-of-a-kind credit examination has been creating a new type of trust, appealing to a wide range of customers. Paidy has also proved that they are capable of implementing prompt solutions in the inevitable battles against fraud, evolving their services to the next level.”

Sony said on Thursday that it is investing $400 million to secure a 4.98% stake in Chinese entertainment giant Bilibili.

10-year old Bilibili features animation, comics, games and offers users the ability to stream their videos. The service, which has amassed over 115 million users, has attracted several big investors over the years, including Chinese giant Alibaba.

The announcement pushed Bilibili’s share up by 7.6% in the pre-market trading. Sony has made the investment through its wholly-owned subsidiary Sony Corporation of America.

In a statement, Sony said the company believes China is a key strategic region in the entertainment business. The two companies have also agreed to pursue collaboration opportunities in the entertainment field in China, including animation and mobile game apps, they said.

More to follow…

France’s competition authority has ordered Google to negotiate with publishers to pay for reuse of snippets of their content — such as can be displayed in its News aggregation service or surfaced via Google Search.

The country was the first of the European Union Member States to transpose the neighbouring right for news into national law, following the passing of a pan-EU copyright reform last year.

Among various controversial measures the reform included a provision to extend copyright to cover content such as the ledes of news stories which aggregators such as Google News scrape and display. The copyright reform as a whole was voted through the EU parliament in March 2019, while France’s national law for extended press publishers rights came into force in October 2019.

A handful of individual EU Member States, including Germany and Spain, had previously passed similar laws covering the use of news snippets — without successfully managing to extract payments from Google, as lawmakers had hoped.

In Spain, for example, which made payments to publishers mandatory, Google instead chose to pull the plug on its Google News service entirely. But publishers who lobbied for a pan-EU reform hoped a wider push could turn the screw on the tech giant.

Nonetheless, Google has continued to talk tough over paying for this type of content.

In a September 2019 blog post the tech giant dug in, writing — without apparent irony — that: “We sell ads, not search results, and every ad on Google is clearly marked. That’s also why we don’t pay publishers when people click on their links in a search result.”

It has also since changed how Google News displays content in France, as Euractiv reported last year — switching to showing headlines and URLs only, editing out the text snippets it shows in most other markets.

However France’s competition authority has slapped down the tactic — taking the view that Google’s unilateral withdrawal of snippets to deny payment is likely to constitute an abuse of a dominant market position, which it writes “seriously and immediately damaged the press sector”.

The company has a dominant position in Europe’s search market — with more than 90% marketshare.

The authority cites Google’s unilateral withdrawal of “longer display article extracts, photographs, infographics and videos within its various services (Google Search, Google News and Discover), unless the publishers give it free authorization” as unfair behavior.

“In practice, the vast majority of press publishers have granted Google licenses for the use and display of their protected content, and this without possible negotiation and without receiving any remuneration from Google. In addition, as part of Google’s new display policy, the licenses which have been granted to it by publishers and press agencies offer it the possibility of taking up more content than before,” it writes in French (which we’ve translated via Google Translate).

“In these conditions, in addition to their referral to the merits, the seizors requested the order of provisional measures aimed at enjoining Google to enter in good faith into negotiations for the remuneration of the resumption of their content.”

Hence issuing an emergency order — which gives Google three months to negotiate “in good faith” with press agencies and publishers to pay for reusing bits of their content.

Abusive practices the agency says it suspects Google of at this stage of its investigation are:

• The imposition of unfair trading conditions;
• circumvention of the law;
• and discrimination (i.e. because of its unilateral policy of zero renumeration for all publishers)

The order requires Google to display news snippets during the negotiation period, in accordance with publishers wishes.

While terms agreed via the negotiation process will apply retrospectively — from the date the law came into force (i.e. last October).

Google is also required to send in monthly reports on how it’s implementing the decision.

“This injunction requires that the negotiations actually result in a proposal for remuneration from Google,” it adds.

We reached out to Google for comment on the Autorité de la Concurrence’s action. In a statement attributed to Richard Gingras, its VP News, the company told us:

Since the European Copyright law came into force in France last year, we have been engaging with publishers to increase our support and investment in news. We will comply with the FCA’s order while we review it and continue those negotiations.

A Google spokeswoman also pointed back to its blog post from last year — to highlight what she described as “the ways we already work with news publishers for context”.

In the blog post the company discusses directing traffic to news sites; providing ad tech used by many publishers; and a funding vehicle via which it says it’s investing $300M “to help news publishers around the world develop new products and business models that fit the different publishing marketplace the Internet has enabled”.

Interim measures are an antitrust tool that Europe’s competition authorities have pulled from the back of the cupboard and started dusting off lately.

Last October EU competition chief Margrethe Vestager used an interim order against chipmaker Broadcom to stop applying exclusivity clauses in agreements with six of its major customers — while an investigation into its practices continues.

The commission EVP, who also heads up the bloc’s digital strategy, has suggested she will seek to make greater use of interim orders as an enforcement tool to keep up with the fast pace of developments in the digital economy, responding to concern that regulators are not able to respond effectively to curtail market abuse in the modern Internet era.

In the case of France’s competition authority’s probe of Google’s treatment of publishers content the authority writes that the interim protective measures it’s ordered will remain in force until it adopts its decision “on the merits”.

The global internet continues to disintegrate into regional internets.

Yesterday, the FCC authorized a Google subsidiary, GU Holdings, to open a submarine fiber optic link between the U.S. and Taiwan, while continuing to block the company’s expansion of the cable to Hong Kong.

The cable, operated by Pacific Light Data Communication, has faced years of delays over its ties to the Chinese mainland. The Trump administration, through the Team Telecom review process, has placed an exacting magnifying glass on the deal structure and its operating processes, arguing that a direct link between Hong Kong and the U.S. would pose grave risks to the security of America’s internet infrastructure.

Team Telecom has been a quiet bureaucratic group within the federal government reviewing internet infrastructure and telecom business licenses as our reporter Mark Harris has described, and the working group only received formal approval for its operations earlier this week in an executive order signed by President Trump.

The original goal of the cable was to connect the U.S. to Taiwan, Hong Kong, and the Philippines, offering Google and other tech companies like Facebook the ability to move large quantities of information from their data centers domestically to the fast-growing Asia-Pacific region. That sort of bandwidth is even more acutely needed today in the context of the global pandemic of novel coronavirus and the rapid increase in work-from-home activities that are driving record internet usage.

Yet, when Dr Peng Telecom & Media Group bought a stake in the cable’s operating company in late 2017, concerns intensified among DC national security professionals that the cable could come under the sway of Beijing’s influence.

Those delays have proven costly for GU Holdings, which has argued in filings with the FCC that the project was increasingly non-viable given the extensive review process.

With today’s announcement, Google’s subsidiary has agreed to an extensive set of national security constraints on the project, including a moratorium on expansion to Hong Kong, extensive disclosure of the network’s operating processes to the U.S. federal government, and using security-cleared personnel in operating the cable.

In the government’s filing, the Team Telecom agencies, which include Justice, Homeland Security, and Defense, said that they “believe that in the current national security environment, there is a significant risk that the grant of a direct cable connection between the United States and Hong Kong would seriously jeopardize the national security and law enforcement interests of the United States.”

As part of the national security agreement, “Google will pursue diversification of interconnection points in Asia, including but not limited to Indonesia, Philippines, Thailand, and Vietnam. This diversification will include pursuing the establishment of network facilities that allow delivery of traffic on Google’s network as close as practicable to the traffic’s ultimate destination.” In other words, internet traffic will not be relayed through China or Hong Kong, which is a special administrative region of China.

The agreement will ultimately allow Google and other large tech companies to advance their interests in this important region, but it does underscore the increasing disintegration of the vision of one, global internet. Data sovereignty rules in Europe, India, China, and Russia are forcing tech companies to offer specialized cloud services tailored to each region’s privacy and censorship interests rather than offering one open and free infrastructure for global internet users.

According to GU Holdings’ filing, the U.S.-Taiwan segment of the cable is operationally ready, and will presumably start handling traffic in relatively short order.

Bug bounty and vulnerability disclosure platform Bugcrowd has raised $30 million in its Series D funding round.

The San Francisco-headquartered company said the round brings the total amount raised to $80 million since the company was founded in 2011. This latest round was led by Rally Ventures, which previously invested in the startup.

Bugcrowd acts as an intermediary between security researchers that find bugs and security flaws and the companies with products and services that need to be fixed. By mediating from the middle, the process ensures that bugs are appropriately triaged, mitigated, and rewarded, and that both sides follow the rules to protect both sides from potential abuse.

Reputable and mainstream bug bounty platforms are few and far between, but are in high demand. Bugcrowd for one has scored some major customer wins, including Mastercard, Fitbit, and other Fortune 500 companies.

As for the round itself, Bugcrowd CEO Ashish Gupta said the $30 million will help the company ramp up its expansion of its platform, particularly in Europe and Asia.

“The fight against cybercriminals is never-ending and attack surfaces are constantly expanding,” Gupta told TechCrunch. “We’re expanding our offerings, applying the intelligence from our crowd to a variety of different security use cases to help customers find and fix vulnerabilities faster, and continue to scale the platform.”

Gupta said Bugcrowd serves 65 industries in 29 countries. “We want to continue that growth trajectory,” he said.

Even though large swathes of the world have ground to a halt thanks to the coronavirus pandemic, the security world hasn’t shown any signs of slowing. In fact, vulnerability reports during March are up 20%, Gupta said. And Bugcrowd as a business is largely unfazed by the stay-at-home orders, given that its staff are remote-first. “We did temporarily close our five physical world-wide offices but have seen no disruption of services,” he said.

The funding comes at an important time for the company. In the past year, Bugcrowd expanded its relatively new penetration testing offering, a service where companies ask trusted researchers to stress-test their systems to find and shore up holes before an attacker can. That side of the business — less than two years old — grew by 400% year-over-year since its debut, said Gupta.

“Our customers see a ten-times higher number of critical vulnerabilities from our pen test solution compared to other assessments because we bring the right researcher with the right skills to deliver insightful submissions,” said Gupta.

One of the efforts that’s been proposed to contain the spread of COVID-19 is a contact trace and track program, that would allow health officials to keep better tabs on individuals who have been infected, and alert them to potential spread. Contract tracing has already seemingly proven effective in some parts of the world that have managed to curb the coronavirus spread, but privacy advocates have big reservations about any such system’s implementation in the U.S.

There are a number of proposals of how to implement a contact tracing system that preserves privacy, including a decentralization proposal for a group of European experts. In the U.S., MIT researchers have devised a new method to would provide automated contact tracing that taps into the Bluetooth signals sent out by everyone’s mobile devices, tying contacts to random numbers that aren’t linked to an individual’s identity in any way.

The system works by having each mobile device constantly be sending out random strings of numbers that the the researchers liken to “chirps” (though not actually audible). These are sent via Bluetooth, which is key for a couple of reasons, including that most people have Bluetooth enabled on their device all the time, and that it’s a short-range radio communication protocol that ensures any reception of a “chirp” came from someone you were in relatively close contact to.

If any person tests positive for COVID-19, they can then upload a full list of the chirps that their phone has broadcast over the past 14 days (which at the outside, should represent the full time they’ve been contagious). Those go into a database of chirps associated with confirmed positive cases, which others can scan against to see if their phone has received one of those chirps during that time. A positive match with one of those indicates that an individual could be at risk, since they were at least within 40 feet or so of a person who has the virus, and it’s a good indicator that they should seek a test if available, or at least self-quarantine for the recommended two-week period.

MIT’s system sidesteps entirely many of the thorniest privacy-related issues around contact tracing, which have been discussed in detail by the ACLU and other privacy protection organizations: It doesn’t use any geolocation information at all, nor does it connect any diagnosis or other information to a particular individual. It’s still not entirely left to individual discretion, which would be a risk from the perspective of ensuring compliance, because MIT envisions a health official providing a QR code along with delivering any positive diagnosis that would trigger the upload of a person’s chirp history to the database.

The system would work through an app they install on their phone, and its design was inspired by Apple’s “Find My” system for locating lost Mac and IOS hardware, as well as keeping track of the location of devices owned by loved ones. Find My also uses chirps to broadcast locations to passing Apple hardware.

“Find My inspired this system,” ays Marc Zissman, the associate head of MIT Lincoln Laboratory’s Cyber Security and Information Science Division and co-principal investigator of the project in a blog post describing the research. “If my phone is lost, it can start broadcasting a Bluetooth signal that’s just a random number; it’s like being in the middle of the ocean and waving a light. If someone walks by with Bluetooth enabled, their phone doesn’t know anything about me; it will just tell Apple, ‘Hey, I saw this light.’”

The system could be adapted to automate check-ins against the positive chirp database, and provide alerts to individuals who should get tested or self-isolate. Researchers worked closely with public health officials to ensure that this will suit their needs and goals as well as preserving privacy.

MIT’s team says that a critical next step to making this actually work broadly is to get Apple, Google and Microsoft on board with the plan. This requires close collaboration with mobile device platform operators to work effectively, they note. Extrapolating a step further, were iOS and Android to offer these as built-in features, that would go a long way towards encouraging widespread adoption.