Category: UNCATEGORIZED

We’ve got a packed house for the TC Hackathon that kicks off at Disrupt Berlin 2019 in just six days. We may have limited the number of participants to 500 people, but there’s no limit on the skills, creativity and dogged determination of these coders. Hold up now, there’s still time to save money and buy a pass to Disrupt Berlin. Prices increase 10 December.

We can’t wait to see what this group of worthy competitors will design and build in just 24 hours. They’ve been waiting patiently, and it’s almost time to pull back the curtain and reveal our sponsors, the specific challenges and prizes.

If you’re not familiar with how the Hackathon works, here’s the Cliff Notes version. On day one, participants form teams and choose a sponsored challenge. They have 24 hours to build a working product, and we keep them fed, hydrated and pumped up on caffeine.

Judges review all completed projects and select just 10 teams to move on to the finals on day two. Finalists have two minutes to power pitch their work to the judges — on the Extra Crunch Stage in front of a live audience. A not-to-be-missed event!

Each sponsor announces its winners and awards a variety of cash and prizes. Then TechCrunch chooses one team as the creators of the best over-all hack and awards them $5,000!

Cue the drum roll please — here are the additional prizes waiting for you at the Disrupt Berlin TC Hackathon. Start reviewing your options and planning your design strategy now — and get ready to impress.

TomTom

Location technology can add so much to the services we use every day. Whether it is to locate people, track assets and vehicles, visualize location information or display routes, maps are an essential component to any web or mobile application. With TomTom’s Maps API, developers can easily integrate highly detailed and customizable maps in their application with only a few lines of code.

Your challenge, should you accept it, is to use the TomTom Maps APIs (and combine it with other services) to build an innovative on-demand service. Build the next Uber for delivering food, parcels or groceries — or for getting someone to come and fix your bike.

Prize one: Up to four Nintendo Switches for the winning team.

Prize two: Diversity Heroes Award. We’re giving a prize to the team that leverages its diversity to complete the hackathon challenge, and they’ll receive up to five Lego sets of heroes that leveraged diversity to succeed at a complex challenge.

And we will have another prize or two up our sleeve so stay tuned! The TechCrunch Hackathon takes place at Disrupt Berlin 2019 on 11-12 December. Good luck to all the plucky participants. As for the rest of you, come join us for the thrilling competition and see what determined hackers can build in 24 hours!

Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact our sponsorship sales team by filling out this form.

Walmart’s Flipkart has backed Shadowfax in a new $60 million financing round as the retail giant works to strengthen its logistics network in the nation.

Flipkart, which alone contributed $30 million, led the Series D financing round for the three-year-old Bangalore-based startup, Shadowfax co-founder and chief executive Abhishek Bansal told TechCrunch in an interview.

Existing investors NGP Capital, Qualcomm Ventures, Mirae Asset, and Eight Roads Ventures also participated in the round, which brings the startup’s total raise to date to $100 million. The new round valued Shadowfax at about $250 million, two people familiar with the matter told TechCrunch. The startup declined to comment on the valuation.

Shadowfax operates a business-to-business logistics network in over 300 cities in India. The startup works with neighbourhood stores to use their real estate to store inventory, and a large network of freelancers who do the delivery. “Anyone with a bicycle or a bike can join our platform and deliver items for us,” said Shadowfax’s Bansal. The startup has also setup its own warehouses and fulfilment hubs.

This logistics network can handle goods in a range of categories including hot food, grocery and e-commerce. Flipkart and food delivery startup Swiggy are among its “hundreds” of clients, he said.

“It’s a very reliable logistics network. And each grocery store is only serving to users in a kilometre radius, so the delivery could be incredibly quick. These grocery stores, whose staff also often participate in delivery, only have to work with us for a few hours in a day, so it’s a quick way for them to make extra money,” he said.

More to follow…

Huawei said today it is suing the Federal Communications Commission, asking to overturn a ban on carriers from using money from the Universal Service Fund (USF) to buy equipment from Huawei and ZTE.

The $8.5 billion USF supports the purchase of equipment to build communications infrastructure, especially in rural communities. Huawei is asking the United States Court of Appeals for the Fifth Circuit to overrule the FCC’s order, passed on Nov. 22.

Small carriers buy equipment from Huawei and ZTE because it is dependable and cheap. According to a Reuters report, some carriers are considering Nokia and Ericsson for replacements, but their equipment is priced less competitively.

During a press conference in Shenzhen today, Glen Nager, Huawei’s lead counsel for the lawsuit, claimed the ban goes beyond the FCC’s authority and violates the constitution. “The order fails to give Huawei constitutionally required due process before stigmatizing it as a national security threat, such as an opportunity to confront supposed evidence and witnesses, and a fair and neutral hearing process,” he said.

Huawei chief legal officer Song Liuping claims that FCC chairman and Ajit Pai and other commissioners did not present evidence to back its claim that Huawei is a security threat.

“This is a common trend in Washington these days. ‘Huawei is a Chinese company.’ That’s his only excuse,” Song said. He also claimed that the FCC ignored 21 rounds of “detailed comments” submitted by Huawei to explain how the order would harm businesses in rural areas, adding “This decision, just like the Entity List decision in May, is based on politics, not security.”

In March, Huawei also cited the Constitution in another lawsuit filed against the U.S. government arguing that a ban on the use of its products by federal agencies and contractors violate due process.

Huawei and ZTE were first identified as potential national security threats in 2012 by a U.S Congressional panel, but federal actions against Huawei and ZTE have intensified over the past year as the trade war between the U.S. and China escalates.

Earlier this year, it was placed on the U.S. Entity List and the Department of Justice announced it was pursuing several criminal charges against Huawei, including conspiracy to steal trade secrets. Huawei’s chief financial officer, Meng Wanzhou also faces fraud charges in New York. In response, Huawei has dramatically increased the amount it spends on lobbying in the U.S.

In China, Huawei’s announcement today about its FCC lawsuit was overshadowed by controversy about a former employee, Li Hongyuan who was arrested and detained for eight months after demanding severance pay. Li was arrested on extortion charges and released because of insufficient evidence and his treatment has triggered controversy and anger over the treatment of workers by Huawei and other tech companies.

When AWS announced Outposts, a private cloud hardware stack they install in your data center, last year, there were a lot of unanswered questions. This week at AWS re:Invent in Las Vegas, the company announced general availability as the vision for this approach began to come clearer.

AWS CEO Andy Jassy, speaking at a press conference earlier today said that there are certain workloads like running a factory that need compute resources to be close because of low latency requirements. That’s where Outposts could play well, and where similar existing solutions in his opinion fell short because there wasn’t a smooth connection between the on-prem hardware and the cloud.

“We tried to rethink this with a different approach,” he said. “We thought about it more as trying to distribute AWS on premises. With Outposts, you have racks of AWS servers that have compute, storage, database and analytics and machine learning on them. You get to decide what composition you want and we deliver that to you,” he said.

The hardware is equipped with a slew of services including Amazon Elastic Compute Cloud (EC2), Amazon Elastic Block Store (EBS), Amazon Virtual Private Cloud, Amazon ECS, Amazon Elastic Kubernetes Service, and Amazon EMR. Conspicuously missing is S3 storage, but Amazon promises that will be coming in 2020 with other services on deck as well.

Make no mistake, the world’s premiere cloud infrastructure vendor will be installing a rack of hardware inside your data center. AWS has formed a team inside the company to handle installation, monitoring and management of the equipment.

The easy way to think about this would be that it’s a way for companies, who might be afraid to go all-in on the cloud to start experimenting with a cloud-like environment, which you can manage from an AWS console or VMware (beginning next year). Yet an Amazon spokesperson indicated that many companies like Morningstar and Phillips Healthcare, both of which are already AWS public cloud customers, are choosing Outposts because itgives these customers is ultra low latency, almost like a hyper local availability zone.

These customers need to keep compute resources as close as possible to run a particular set of jobs. While a Local availability zone like the one announced for Los Angeles yesterday could also suffice for this, Outposts could help when there isn’t Local option.

Customers can sign up for Outposts in a similar fashion to any EC2 instance, but instead of spinning it up in the cloud, an order goes to the Outposts team, and it gets racked, stacked and installed on prem.

From then on, Amazon still handles the management just as it does with a public cloud instance. For now installation and going management is being handled by an internal Amazon team, but over time they plan to work with systems integrators to help handle some of that workload.

It didn’t take much for the founders of Cora, Brazil’s newest startup to tackle some aspect of the broken financial services industry in the country, to raise their first $10 million.

Igor Senra and Leo Mendes had worked together before — founding their first online payments company, MOIP, in 2005. That company sold to WireCard in 2016 and after three years the founders were able to strike out again.

They built their initial business servicing the small and medium sized businesses that make up roughly two-thirds of the Brazilian economy and represent some trillion dollars worth of transactions. But at WireCard, they increasingly were told to approach larger customers that didn’t have the same kind of demand for their services, according to Mendes.

So they built Cora — a technology enabled lender to the small and medium-sized businesses that they knew sowell.

The round was led by Kaszek Ventures, one of Latin America’s largest and most successful investment funds, with participation from Ribbit Capital — one of the most influential early-stage fintech investment firms globally.

“We created Cora to pursue our life purpose, which is to solve the financial problems faced by small and medium businesses. These businesses produce 67% of the Brazilian GDP but are totally underserved by the traditional banks”, said Senra, the company’s chief executive, in a statement.

The company is currently operating in closed beta and plans to launch its first product, a free SME-only mobile account in the first half of 2020, according to the statement. Cora will later release a portfolio of payments, credit related products, and financial management tools that are currently being developed.

“So far, large financial institutions have mainly built products that focus either on individuals or on large corporate clients and have totally ignored small and medium sized enterprises, who are the most relevant creators of value in our economies,” said Mendes in a statement. “We want to offer a high-quality, customer-centric suite of financial products that address the specific underserved needs of our clients’ businesses.”

Qualcomm’s holding its big annual get-together this week in Hawaii, portioning off Snapdragon news, piece by piece. Yesterday’s event was the big unveiling of the Snapdragon 865 and 765, the chips that will power most of next year’s premium and mid-tier handsets, respectively.

Today, the components came into sharper focus. Expect more from both tomorrow, as well, as the company continues to milk them for the multi-day event, but we’re starting to get a pretty solid picture of what these chips will be able to do.

Let’s start top-down with the 865. Expect the premium chip to start showing up in announcements around CES and MWC, if past years’ road maps are any indication. As anticipated, 5G is one of the key focuses. After all, 2020 is generally believed to be when 5G-driven purchases will start helping to right long-flagging smartphone sales.

No integrated 5G has been announced for the chip. Instead, it will work in tandem with Qualcomm’s 5G modem, the X55. Keep in mind, there are still going to be plenty of non-5G alternative flagships released in the next calendar year. For starters, the devices are bound to be prohibitively expensive. Also, in many markets, 5G coverage will be spotty, at best. Unfortunately, however, it seems that manufacturers will have to buy them as a pair.

Notably, there’s support for a wide range of 5G frequencies. That’s necessary, because carrier approach to 5G has been pretty piecemeal. It varies a good deal from carrier to carrier — and in the case of some, like T-Mobile, a good deal within the carrier.

AI’s the other big marquee bit. Again, no surprise. It’s been an increasingly important aspect of smartphone evolution for several years now. That’s powered by a fifth-gen AI chip that doubles the performance of its predecessor.

There’s also on-board support for wake word listening for use with the likes of Alexa and Assistant, at low power. Imaging improvements include support for 200 megapixel photos and 8K, along with much-improved speeds. On the display/gaming front, there’s now support for 144Hz refresh rates.

The arrival of the 765, meanwhile, highlights Qualcomm’s ambitions to speed up 5G adoption across a wider range of devices. The new chip, which features an option with integrated 5G, could certainly help on that front, keeping cost and power usage down.

Expect devices to start arriving in early 2020.

Founders, entrepreneurs, and tech executives in the know realize they may be able to avoid paying tax on all or part of the gain from the sale of stock in their companies — assuming they qualify.

If you’re a founder who’s interested in exploring this opportunity, put careful consideration put into the formation, operation and selling of your company.

Qualified Small Business Stock (QSBS) presents a significant tax savings opportunity for people who create and invest in small businesses. It allows you to potentially exclude up to $10 million, or 10 times your tax basis, whichever is greater, from taxation. For example, if you invested $2 million in QSBS in 2012, and sell that stock after five years for $20 million (10x basis) you could pay zero federal capital gains tax on that gain. 

What is QSBS, and why is it important?

These tax savings can be so significant, that it’s one of a handful of high-priority items we’ll first discuss, when working with a founder or tech executive client. Surprisingly, most people in general either:

1. Know a few basics about QSBS;
2. Know they may have it, but don’t explore ways to leverage or protect it;
3. Don’t know about it at all.

Founders who are scaling their companies usually have a lot on their minds, and tax savings and personal finance usually falls to the bottom of the list. For example, I recently met with someone who will walk away from their upcoming liquidity event with between $30-40 million. He qualifies for QSBS, but until our conversation, he hadn’t even considered leveraging it. 

Instead of paying long-term capital gains taxes, how does 0% sound? That’s right — you may be able to exclude up to 100% of your federal capital gains taxes from selling the stake in your company. If your company is a venture-backed tech startup (or was at one point), there’s a good chance you could qualify.

In this guide I speak specifically to QSBS on a federal tax level, however it’s important to note that many states such as New York follow the federal treatment of QSBS, while states such as California and Pennsylvania completely disallow the exclusion. There is a third group of states, including Massachusetts and New Jersey, that have their own modifications to the exclusion. Like everything else I speak about here, this should be reviewed with your legal and tax advisors.

My team and I recently spoke with a founder whose company was being acquired. She wanted to do some financial planning to understand how her personal balance sheet would look post-acquisition, which is a savvy move. 

We worked with her corporate counsel and accountant to obtain a QSBS representation from the company and modeled out the founder’s effective tax rate. She owned equity in the form of company shares, which met the criteria for qualifying as Section 1202 stock (QSBS). When she acquired the shares in 2012, her cost basis was basically zero. 

A few months after satisfying the five-year holding period, a public company acquired her business. Her company shares, first acquired for basically zero, were now worth $15 million. When she was able to sell her shares, the first $10 million of her capital gains were completely excluded from federal taxation — the remainder of her gain was taxed at long-term capital gains.

This founder saved millions of dollars in capital gains taxes after her liquidity event, and she’s not the exception! Most founders who run a venture-backed C Corporation tech company can qualify for QSBS if they acquire their stock early on. There are some exceptions. 

Do I have QSBS?

A frequently asked question as we start to discuss QSBS with our clients is: how do I know if I qualify? In general, you need to meet the following requirements:

1. Your company is a Domestic C Corporation.
2. Stock is acquired directly from the company.
3. Stock has been held for over 5 years.
4. Stock was issued after August 10th, 1993, and ideally, after September 27th, 2010 for a full 100% exclusion.
5. Aggregate gross assets of the company must have been $50 million or less when the stock was acquired.
6. The business must be active, with 80% of its assets being used to run the business. It cannot be an investment entity. 
7. The business cannot be an excluded business type such as, but not limited to: finance, professional services, mining/natural resources, hotel/restaurants, farming or any other business where the business reputation is a skill of one or more of the employees.

When in doubt, follow this flowchart to see if you qualify:

URBAN-X,  the accelerator program focused on companies developing technologies to increase the sustainability, resiliency, and efficiency of cities, has selected seven companies for its latest cohort.

Operating as a partnership between BMW’s Mini brand and the early-stage investment fund Urban.us since 2017, the accelerator has backed 51 companies which have raised over $100 million in the three years since its initial launch.

“Mini aims to inspire entrepreneurship, design and collaboration with innovative minds, and this ambition comes to life through URBAN-X,” said Esther Bahne, Mini Head of Brand Strategy & Innovation.

Co-investors who have come in to invest behind the accelerator include: Fred Wilson, Brad Burnham, Edgar Bronfman Jr., BMW i Ventures, Draper Associates, Fontinalis Partners, Ekistic Ventures, Wireframe Ventures, Fifth Wall Ventures, Samsung NEXT, Story Ventures, Kairos, UL Ventures, Mark Cuban, Point 72 Ventures and Robert Bosch Venture Capital.

Some of the largest investments to date have been in companies like Blueprint Power, which raised $4 million for its technology which provides energy efficiency and demand response tools connecting real estate portfolios to the power grid; Roadbotics, a roadway monitoring to optimize maintenance spending for cities, utilities and construction firms, which raised $11.4 million; and Versatile Natures, which provides safety and budget management tools for construction sites.

The latest companies to be accepted into the accelerator are:

• ChargeLab: an electric vehicle charging management service for businesses, utilities, individuals,  and governments

• CoInspect: a service that automates the entire food safety & quality management workflow for restaurants and food processing facilities.

• Eva: a provider of charging stations for healthcare and emergency responders operating cargo drones and associated vertical take off vehicles.

• Firmus: a machine learning-based software toolkit to expedite the construction design review process.

• Hades: the developer of software to evaluate sewer and flood prevention infrastructure.

• Metalmark: a new materials developer for highly efficient catalytic decomposition of air pollutants.

• UsurpPower: the creator of a marketplace for sustainable finance for renewable power generation.

“URBAN-X, Urban Us and MINI are deeply committed to advancing the low carbon, resilient, high density future of our cities through technology, investment and mentorship,” said Shaun Abrahamson, URBAN-X Investment Committee and Managing Partner at Urban.Us, in a statement. “Startups are critical to playing an outsized role in reimagining the core sectors of our cities — like transportation, real estate and energy — and we’re thrilled to invest in this new class of creative and entrepreneurial minds.”

A contractor working for cell giant Sprint stored on an unprotected cloud server hundreds of thousands of cell phone bills of AT&T, Verizon and T-Mobile subscribers.

The storage bucket had more than 261,300 documents, the vast majority of which were phone bills belonging to cell subscribers dating as far back as 2015. But the bucket, hosted on Amazon Web Services (AWS), was not protected with a password, allowing anyone to access the data inside.

It’s not known how long the bucket was exposed.

The bills — which contained names, addresses and phone numbers, and many included call histories — were collected as part of an offer to allow cell subscribers to switch to Sprint, according to Sprint-branded documents found on the server. The documents explained how the cell giant would pay for the subscriber’s early termination fee to break their current cell service contract, a common sales tactic used by cell providers.

In some cases we found other sensitive documents, such as a bank statement, and a screenshot of a web page that had subscribers’ online usernames, passwords and account PINs — which in combination could allow access to a customer’s account.

U.K.-based penetration testing company Fidus Information Security found the exposed data, but it wasn’t immediately clear who owned the bucket. Fidus disclosed the security lapse to Amazon, which informed the customer of the exposure — without naming them. The bucket was subsequently shut down.

A Verizon and AT&T phone bill from two customers. (Image: supplied)

A T-Mobile bill found on the exposed servers. A handful of Sprint bills were also found. (Image: supplied)

After a brief review of the cache, we found one document that said, simply, “TEST.” When we ran the file through a metadata checker, it revealed the name of the person who created the document — an account executive at Deardorff Communications, the marketing agency tasked with the Sprint promotion.

When reached, Jeff Deardorff, president of Deardorff Communications, confirmed his company owned the bucket and that access was restricted earlier on Wednesday.

“I have launched an internal investigation to determine the root cause of this issue, and we are also reviewing our policies and procedures to make sure something like this doesn’t happen again,” he told TechCrunch in an email.

Given the exposed information involved customers of the big four cell giants, we contacted each company. AT&T did not comment, and T-Mobile did not respond to a request for comment. Verizon spokesperson Richard Young said the company was “currently reviewing” the matter and would have details “as soon as it’s available.” (TechCrunch is owned by Verizon.)

When reached, a spokesperson for Sprint would not disclose the nature of its relationship with Deardorff nor would they comment on the record at the time of writing.

It’s not known why the data was exposed in the first place. It’s not uncommon for AWS storage buckets to be misconfigured by being set to “public” and not “private.”

“The uptrend we’re seeing in sensitive data being publicly accessible is concerning, despite Amazon releasing tools to help combat this,” said Harriet Lester, director of research and development at Fidus. “This scenario was slightly different to usual as it was tricky to identify the owner of the bucket, but thankfully the security team at AWS were able to pass the report on to the owner within hours and public access was shut down soon after.”

We asked Deardorff if his company plans to inform those whose information was exposed by the security lapse. We did not immediately receive a response.

Read more:

• Tuft & Needle exposed thousands of customer shipping labels
• StockX was hacked, exposing millions of customers’ data
• DoorDash confirms data breach affected 4.9 million customers, workers and merchants
• Equifax breach was ‘entirely preventable’ had it used basic security measures, says House report
• Stop saying, ‘We take your privacy and security seriously’
• Capital One breach also hit other major companies, say researchers
• Macy’s said hackers stole customer credit cards — again