Category: UNCATEGORIZED

Uncapped, a London headquartered and Warsaw-based startup that wants to provide “revenue-based” finance to growing European businesses, is officially launching today and disclosing that it has raised £10 million in funding.

The capital is a mixture of equity funding and debt (money it can use for lending), and sees the fintech company backed by Rocket Internet’s Global Founders Capital, White Star Capital, and Seedcamp.

I understand a number of angel investors also participated. They include Robert Dighero (Partner at Passion Capital), Carlos Gonzalez-Cadenas (COO of GoCardless) and David Nolan and Kevin Glynn (founders of Butternut Box).

Founded by “serial entrepreneur” Asher Ismail (who was most recently CEO of Midrive), and former VC Piotr Pisarz, Uncapped has set out to use various marketing, sales and accounting data to be able to offer finance for young businesses based on their current (and projected) revenue.

Specifically, Uncapped says it will enable founders to access working capital between £10,000 and £1 million for a flat fee of 6% interest. It’s being pitched as a smart alternative for growing companies that don’t want to give away equity in return for capital to help grow.

“The first decision that entrepreneurs need to make when raising finance is whether to give away a portion of equity in their company, or take on debt,” explains Ismail. “Equity is a slow and very expensive way to fund growth, while loans add more risk. We’re creating an alternative that sits between debt and equity financing, while offering the benefits of both. We started Uncapped so that entrepreneurs wouldn’t have to give up a piece of their company or put up their house”.

Ismail says that Uncapped provides entrepreneurs with access to capital without the need for “personal guarantees, credit checks, warrants, or equity,” and promises to move a lot quicker than investors, or for that matter, more traditional forms of debt finance, can.

“We don’t require customers to share any business plans, cap tables, or pitch decks,” he adds. “All we need is to verify their business performance. We connect to the business’ existing sales and marketing platforms, like Stripe, Shopify and Facebook. Revenue-based finance also gives founders the flexibility to repay less when their sales slow or the market hits a downturn”.

The only stipulation is that businesses must be based on online payments and have at least nine months trading history. This makes Uncapped particularly suitable for companies operating e-commerce, SaaS, direct-to-consumer, gaming and app development businesses.

“For example, our first customer was online menswear brand, L’Estrange,” Uncapped Pisarz tells me. “For e-commerce businesses, December is typically the most challenging time to invest in growth, as inventory and marketing costs are at a peak but Christmas sales have not yet come through. We were able to provide the business with an advance within three days”.

Meanwhile, Ismail claims that Uncapped is the first company of its kind to launch in Europe (which is somewhat of a stretch) and that venture capital — although very different — is probably the closest alternative form of financing.

“Despite the $35 billion invested in Europe by VCs this year, many companies do not fit the venture model,” he says. “They might be a family business that doesn’t intend to sell, an entrepreneur focused on more of a niche market, or minority who may be overlooked by traditional funders. Whilst VCs will often meet 1,500 companies and back just five of them a year, we have the ability to provide 100s of businesses with growth capital for a flat fee much faster and without sacrificing equity at an early stage”.

November 2019 could mark when Nigeria (arguably) became Africa’s unofficial capital for fintech investment and digital finance startups.

The month saw $360 million invested in Nigerian focused payment ventures. That is equivalent to roughly one-third of all the startup VC raised for the entire continent in 2018, according to Partech stats.

A notable trend-within-the-trend is that more than half — or $170 million — of the funding to Nigerian fintech ventures in November came from Chinese investors. This marks a pivot in China’s engagement with Africa to tech. We’ll get to that.

Before the big Chinese backed rounds, one of Nigeria’s earliest fintech companies, Interswitch, confirmed its $1 billion valuation after Visa took a minority stake in the company. Interswitch would not disclose the amount to TechCrunch, but Sky News reporting pegged it at $200 million for 20%.

Founded in 2002 by Mitchell Elegbe, Interswitch pioneered the infrastructure to digitize Nigeria’s then predominantly paper-ledger and cash-based economy.

The company now provides much of the tech-wiring for Nigeria’s online banking system that serves Africa’s largest economy and population. Interswitch offers a number of personal and business finance products, including its Verve payment cards and Quickteller payment app.

The financial services firm has expanded its physical presence to Uganda, Gambia and Kenya . The Nigerian company also sells its products in 23 African countries and launched a partnership in August for Verve cardholders to make payments on Discover’s global network.

Visa and Interswitch touted the equity investment as a strategic collaboration between the two companies, without a lot of detail on what that will mean.

One point TechCrunch did lock down is Interswitch’s (long-awaited) and imminent IPO. A source close to the matter said the company will list on a major exchange by mid-2020.

For the near to medium-term, Interswitch could stand as Africa’s sole tech-unicorn, as e-commerce venture Jumia’s volatile share-price and declining market-cap — since an April IPO — have dropped the company’s valuation below $1 billion.

Circling back to China, November was the month that signaled Chinese actors are all in on African tech.

In two separate rounds, Chinese investors put $220 million into OPay and PalmPay — two fledgling startups with plans to scale in Nigeria and the broader continent.

PalmPay, a consumer oriented payments product, went live last month with a $40 million seed-round (one of the largest in Africa in 2019) led by Africa’s biggest mobile-phone seller — China’s Transsion.

The startup was upfront about its ambitions, stating its goals to become “Africa’s largest financial services platform,” in a company release.

To that end, PalmPay conveniently entered a strategic partnership with its lead investor. The startup’s payment app will come pre-installed on Transsion’s mobile device brands, such as Tecno, in Africa — for an estimated reach of 20 million phones.

PalmPay also launched in Ghana in November and its UK and Africa based CEO, Greg Reeve, confirmed plans to expand to additional African countries in 2020.

OPay’s $120 million Series B was announced several days after the PalmPay news and came only months after the mobile-based fintech venture raised $50 million.

Founded by Chinese owned consumer internet company Opera — and backed by 9 Chinese investors — OPay is the payment utility for a suite of Opera developed internet based commercial products in Nigeria. These include ride-hail apps ORide and OCar and food delivery service OFood.

With its latest Series A, OPay announced it would expand in Kenya, South Africa, and Ghana.

Though it wasn’t fintech, Chinese investors also backed a (reported) $30 million Series B for East African trucking logistics company Lori Systems in November.

With OPay, PalmPay, and Lori Systems, startups in Africa have raised a combined $240 million from 15 Chinese investors in a span of months.

There are a number of things to note and watch out for here, as TechCrunch reporting has illuminated (and will continue to do in follow-on coverage).

These moves mark a next chapter in China’s engagement in Africa and could raise some new issues. Hereto, the country’s interaction with Africa’s tech ecosystem has been relatively light compared to China’s deal-making on infrastructure and commodities.

There continues to be plenty of debate (and critique) of China’s role in Africa. This new digital-phase will certainly add a fresh component to all that. One thing to track will be data-privacy and national-security concerns that may emerge around Chinese actors investing heavily in African mobile consumer platforms.

We’ve seen lines (allegedly) blur on these matters between Chinese state and private-sector actors with companies such as Huawei.

As OPera and PalmPay expand, they may need to do some reassuring of African regulators as countries (such as Kenya) establish more formal consumer protection protocols for digital platforms.

One more thing to follow on OPay’s funding and planned expansion is the extent to which it puts Opera (and its entire suite of consumer internet products) in competition with multiple actors in Africa’s startup ecosystem. Opera’s Africa ventures could go head to head with Uber, Jumia, and M-Pesa — the mobile money-product that put Kenya out front on digital finance in Africa before Nigeria.

Shifting back to American engagement in African tech, Twitter and Square CEO Jack Dorsey was on the continent in November. No sooner than he’d finished his first trip, Dorsey announced plans to move to Africa in 2020, for 3 to 6 months, saying on Twitter “Africa will define the future (especially the bitcoin one!).”

We still don’t know much about what this last trip — or his future foray — mean in terms of concrete partnerships, investment, or market moves in Africa from Dorsey and his companies.

He visited Nigeria, Ghana, South Africa and Ethiopia and met with leaders at Nigeria’s CcHub (Bosun Tijani), Ethiopia’s Ice Addis (Markos Lemming), and did some meetings with fintech founders in Lagos (Paga’s Tayo Oviosu).

I know most of the organizations and people Dorsey talked to pretty well and nothing has shaken out yet in terms of partnership or investment news from his recent trip.

On what could come out of Dorsey’s 2020 move to Africa, per his tweet and news highlighted in this roundup, a good bet would be it will have something to with fintech and Square.

More Africa-related stories @TechCrunch

• Lime is launching electric scooters in Cape Town
• Pan-African e-tailer Jumia grows 3Q revenue, e-payments and losses
• Sim Shagaya’s uLesson African edtech startup raises $3.1M
• Samasource raises $14.8M for global AI data biz driven from Africa
• Chaka opens up global investing to Africa’s most populous nation
• Solar-based ISP startup Tizeti launches 4G LTE network in Nigeria
• Senegal’s NIMA Codes to launch address app in 15 African countries

African tech around the ‘net

• Kenyan e-commerce startup Copia nets $26m Series B funding
• Nigerian entrepreneur Temie Giwa-Tubosun wins Jack Ma’s African business hero award
• Kenyan public WiFi sensation BRCK launches In South Africa

Want to get professional feedback about your pitch deck, marketing assets, or immigration issues? Attending Disrupt Berlin?

We’ve brought in experts from around Europe (and Silicon Valley) to help you directly.

These events were hugely popular when we first did them at Disrupt in San Francisco the other month, so get your submissions in ASAP.

• The final deadline is Sunday, Dec. 8.
• It’s free for all attendees.
• If we use your assets, we’ll also provide you a free ticket to any TechCrunch event of your choosing next year.

The Top 3 Immigration Mistakes Startups Make
11:25 – 11:35, Wednesday, Dec. 11
Sophie Alcorn (Alcorn Immigration Law)

Sophie Alcorn has helped hundreds of startups worldwide navigate the complexities of United States immigration law. She’ll be leading a talk on top mistakes, participating in a panel on global scaling, and providing 1:1 immigration advice sessions for any attendee who is interested.

You can now sign up for a time slot with her using our CrunchMatch offering. Attendees can request appointments through CrunchMatch in the TechCrunch events app, available upon registration.

Pitch Deck Teardown
16:45 -17:25, Wednesday, Dec. 11 
Russ Heddleston (DocSend)
Karen Stafford (Intel)
Sitar Teli (Connect Ventures)

How can you make your deck bring in the funding? Two top European investors and a startup founder with a special data set about will be reviewing submitted decks live on the Extra Crunch stage.

Want to see what they think about yours? Just fill out this form.

Growth Marketing 2020
14:05 – 14:45, Thursday, Dec. 12
Asher King Abramson (Demand Curve)

Even the biggest tech companies do marketing wrong — and startups you haven’t heard of (yet) are doing it right. Demand Curve works with dozens of top companies coming out of Y Combinator, and a long list of others around the world. Asher King Abramson has seen it all, including the best practices going into the new year.

He’ll be critiquing a selection of efforts on stage, and you can have yours included if you submit your ad and landing page assets here.

 

Susan Wojcicki may be one of the most powerful women in Silicon Valley, but she also holds the unenviable role of being ultimately responsible for a lot of garbage that we, along with our parents, siblings, friends, neighbors, colleagues, children — not to mention billions of strangers — now consume on YouTube.

That garbage, along with valuable content, is inevitable on a platform that Wojcicki says sees 500 hours of video downloaded to the platform every single minute. But it doesn’t meant that YouTube can’t do more, particularly given the vast financial resources of its parent company, Alphabet, which had a stunning $117 billion in financial reserves as of this summer — more than any company on the planet.

Instead, as Wojcicki explains to reporter Leslie Stahl on tonight’s episode of “60 Minutes,” the company has broadly drawn a line at taking down videos that cause “harm,” versus videos that spread hatred and disinformation.

The distinction is laughable, alas. “So if you’re saying, “Don’t hire somebody because of their race, that’s discrimination,” according to Wojcicki, “and so that would be an example of something that would be a violation against our policies.” Meanwhile, as Stahl notes, a video stating that “white people are superior” but that doesn’t explicitly incite action on the part of viewers would be fine with Youtube. If that video says “nothing else, yes,” confirms Wojcicki.

It’s a horrifying position for the company to take and for Wojcicki to be responsible, and ultimately, Wojcicki’s best defense, in her own words, is that the site is better because she knows she can make it better. It’s exceedingly cold comfort.

If you missed the episode, you can read the transcript below.

[STAHL STUDIO:]  

 

TO GRASP THE PHENOMENAL SCALE OF YOUTUBE: CONSIDER THAT PEOPLE SPEND 1 BILLION HOURS WATCHING VIDEOS ON IT — EVERY DAY. IT IS THE MOST USED SOCIAL NETWORK IN THE U-S.  MORE QUERIES ARE TYPED INTO THE WEBSITE’S SEARCH-BAR THAN ANYWHERE ONLINE EXCEPT GOOGLE… WHICH OWNS YOUTUBE.

 

BUT THE SITE HAS COME UNDER INCREASING SCRUTINY, ACCUSED OF PROPAGATING WHITE SUPREMACY, PEDDLING CONSPIRACIES AND PROFITING FROM IT ALL. THEY RECENTLY AGREED TO PAY A RECORD $170 MILLION DOLLARS TO SETTLE ALLEGATIONS THAT THEY TARGETED CHILDREN WITH ADS. YOUTUBE IS BEING FORCED TO CONCENTRATE ON CLEANSING THE SITE.

 

WE VISITED THE COMPANY’S HEADQUARTERS IN SAN BRUNO, CALIFORNIA, TO MEET SUSAN WOJISKEY, THE 51-YR-OLD CEO, IN CHARGE OF NURTURING THE SITE’S CREATIVITY, TAMING THE HATE AND HANDLING THE CHAOS.

 

VIDEO:

 

SUSAN: We have 500 hours of video uploaded every single minute to YouTube.

STAHL: Fi– say that again.

SUSAN: So we have 500 hours of video uploaded every minute to YouTube.

STAHL: That is breathtaking.

SUSAN: It, it is, it is. We have a lot of video.

 

AND A LOT OF INFLUENCE ON OUR LIVES, AND HOW WE PASS OUR TIME.    

 

SOT: MUSIC

 

OVER A BILLION PEOPLE LISTEN TO MUSIC ON YOUTUBE EVERY MONTH: IT’S THE PLANET’S TOP MUSIC SITE. THERE’S A CHILDREN’S CHANNEL; WITH OVER 44-BILLION VIEWS.   

 

STAHL: Do you let your children watch YouTube, including the young ones?

SUSAN: So I allow my younger kids to use YouTube Kids, but I limit the amount of time that they’re on it.  I think too much of anything is not a good thing. But there’s a lot you can learn on YouTube. I think about how YouTube in many ways is this global library. You wanna see any historical speech – you could see it. You want to be able to learn a language –

STAHL: Make a soufflé?

SUSAN: – wanna laugh, you just wanna see something funny. A soufflé! Oh, yeah, cooking. Cooking’s a great example.

 

SO’S WATCHING PEOPLE BINGE EAT. (NAT) A GROWING NUMBER OF AMERICAN ADULTS ARE TURNING TO IT FOR THEIR NEWS… SPORTS… MEDICAL INFORMATION. IT’S NOW MANKIND’S LARGEST “HOW TO” COLLECTION: (NAT)HOW TO TIE A TIE… TIE THE KNOT…OR SPEAK THAI.

 

THE SITE HAS PRODUCED WHOLE NEW PASTTIMES WHERE MILLIONS WATCH STRANGERS OPEN BOXES… (NAT) WHISPER… SLEEP…  YOUTUBE’S ARTIFICIAL INTELLIGENCE ALGORITHMS KEEP RECOMMENDING NEW VIDEOS SO USERS WATCH MORE AND MORE AND MORE.

 

STAGE: HAPPY FRIDAY!

 

WOJCICKI INVITED US TO THE WEEKLY ALL-STAFF MEETING. SHE’S SURPRISINGLY DOWN-TO-EARTH FOR ONE OF THE MOST POWERFUL PEOPLE IN SILICON VALLEY, (NAT) WHERE HER TRAJECTORY STARTED IN AN UNLIKELY WAY.

 

SUSAN: I owned a garage. And I was worried about covering the mortgage. So I was willing to rent my garage to any student. But then two students appeared. One was named Sergey Brin. The other was named Larry Page. They are the founders of Google.

STAHL: Yes, they are.

SUSAN: But at the time they were just students. They looked like any other students.

 

LARRY AND SERGEY ENDED UP HIRING HER AS THEIR FIRST MARKETING MANAGER: SHE WAS GOOGLE EMPLOYEE 16.  AS THE COMPANY GREW, SO DID HER ROLE AND SO DID HER FAMILY.. SHE HAS 5 CHILDREN. GOOGLE BOUGHT YOUTUBE ON HER RECOMMENDATION, FOR OVER $1.6 BILLION, AND 8 YEARS LATER SHE BECAME CEO – WITH A MANDATE TO MAKE IT GROW AND MAKE IT PROFITABLE. AND SHE DID! IT’S ESTIMATED WORTH IS $160-BILLION.

 

(SOT POP)

 

YOUTUBE MAKES MOST OF ITS MONEY FROM ADS – (NAT) SPLITTING REVENUE WITH PEOPLE WHO CREATE ALL KINDS OF VIDEOS. (NAT) FROM DO-IT-YOURSELF LESSONS… TO HIP-HOP LESSONS. THE MORE POPULAR ONES CAN BECOME MULTI-MILLION DOLLAR ENTREPRENEURS.

 

[Ad: Joe Biden promised Ukraine a billion dollars if they fired the prosecutor investigating his son’s company…]

 

YOUTUBE ALSO MAKES MONEY FROM POLITICAL ADS, A THORNY ISSUE BECAUSE SOME OF THEM HAVE BEEN USED TO SPREAD LIES ON SOCIAL MEDIA. 

 

STAHL: Facebook is facing a lot of controversy because it refuses to take down a President Trump ad about Biden which is not true. Would you run that ad?

SUSAN: So that is an ad that, um, right now would not be a violation of our policies.

STAHL: Is it on YouTube right now?

SUSAN: It has been on YouTube.

STAHL: Can a politician lie on YouTube?

SUSAN: For every single video I think it’s really important to look at it. Politicians are always accusing their opponents of lying. That said, it’s not okay to have technically manipulated content that would be misleading. For example, there was a video uploaded of Nancy Pelosi. It was slowed down just enough that it was unclear whether or not she was in her full capacity ’cause she was speaking in a slower voice.

 

PELOSI AD: Why would I work with you if you’re investigating me…

 

SUSAN: The title of the video actually said drunk, had that in the title. And we removed that video.

STAHL: How fast did you remove it?

SUSAN: Very fast.

 

BUT NOT COMPLETELY. WE JUST DID A SEARCH AND THERE IT WAS STILL AVAILABLE. THE COMPANY KEEPS TRYING TO ERASE THE PURPORTED NAME OF THE IMPEACHMENT WHISTLE-BLOWER, BUT THAT TOO IS STILL THERE. WHICH RAISES DOUBTS ABOUT THEIR SYSTEM’S ABILITY TO CLEANSE THE SITE. 

 

IN THE 2016 ELECTION CYCLE, YOUTUBE FAILED TO DETECT RUSSIAN TROLLS, WHO POSTED OVER 1,100 VIDEOS, ALMOST ALL MEANT TO INFLUENCE AFRICAN-AMERICANS – LIKE THIS VIDEO. 

 

SOT: Please don’t vote for Hillary Clinton.  She’s not our candidate… She’s a f**king old racist bitch.

 

YOUTUBE IS AN “OPEN PLATFORM” MEANING ANYONE CAN UPLOAD A VIDEO, AND SO THE SITE HAS BEEN USED TO SPREAD DISINFORMATION, VILE CONSPIRACIES, AND HATE. THIS PAST MARCH A WHITE SUPREMACIST LIVE-STREAMED HIS KILLING OF DOZENS OF MUSLIMS IN CHRISTCHURCH, NEW ZEALAND. HE USED FACEBOOK, BUT FOR THE NEXT 24 HOURS COPIES OF THAT FOOTAGE WERE UPLOADED ON YOUTUBE TENS OF THOUSANDS OF TIMES. 

 

SUSAN: This event was unique because it was really a made-for-Internet type of crisis. Every second there was a new upload. And so our teams around the world were working on this to remove this content. We had just never seen such a huge volume.

STAHL: I can only imagine when you became CEO of YouTube that you thought, “Oh, this is gonna be so fun. It’s “people are uploading wonderful things like

SUSAN: funny cat videos.

STAHL: –funny. And look at what we’re talking about here. Are you worried that these dark things are beginning to define YouTube?

SUSAN: I think it’s incredibly important that we have a responsibility framework, and that has been my number one priority. We’re removing content that violates our policies. We removed, just in the last quarter, 9 million videos.

STAHL: You recently tightened your policy on hate speech.

SUSAN: Uh-huh.

STAHL: Why.. why’d you wait so long?

SUSAN: Well, we have had hate policies since the very beginning of YouTube.  And we–

STAHL: But pretty ineffective.

SUSAN: What we really had to do was tighten our enforcement of that to make sure we were catching everything and we use a combination of people and machines. So Google as a whole has about 10,000 people that are focused on controversial content.

STAHL: I’m told that it is very stressful to be looking at these questionable videos all the time. And that there’s actually counselors to make sure that there aren’t mental problems with the people who are doing this work.  Is that true?

SUSAN: It’s a very important area for us. We try to do everything we can to make sure that this is a good work environment. Our reviewers work 5 hours of the 8 hours reviewing videos.  They have the opportunity to take a break whenever they want.

STAHL: I also heard that these monitors, reviewers, sometimes, they’re beginning to buy the conspiracy theories.

SUSAN: I’ve definitely heard about that. And we work really hard with all of our reviewers to make sure that, you know, we’re providing the right services for them.

 

SUSAN WOJCICKI SHOWED US TWO EXAMPLES OF HOW HARD IT IS TO DETERMINE WHAT’S TOO HATEFUL OR VIOLENT TO STAY ON THE SITE.

 

SUSAN@DEMO: [SEE KICK] So this is a really hard video to watch.

STAHL: Really hard.

SUSAN: And as you can see, these are prisoners in Syria. So you could look at it and say, “Well, should this– it be removed, because it shows violence, it’s graphic,” but it’s actually uploaded by a group that is trying to expose the violence.

 

SO SHE LEFT IT UP. THEN SHE SHOWED US THIS WORLD WAR TWO VIDEO.

 

STAHL:  I mean it’s totally historical footage that you would see on the History Channel.

 

BUT SHE TOOK IT DOWN!

 

STAHL:  Why?

SUSAN: There is this word down here that you’ll see, 1418.

 

1418 IS CODE USED BY WHITE SUPREMACISTS TO IDENTIFY ONE ANOTHER  

 

SUSAN: For every area we work with experts, and we know all the hand signals, the messaging, the flags, the songs, and so there’s quite a lot of context that goes into every single video to be able to under- stand what are they really trying to say with this video.

 

THE STRUGGLE FOR WOJCICKI IS POLICING THE SITE… WHILE KEEPING YOUTUBE AN OPEN PLATFORM. 

 

SUSAN@HALLWAY You can go too far and that can become censorship. And so we have been working really hard to figure out what’s the right way to balance responsibility with freedom of speech.

 

BUT THE PRIVATE SECTOR IS NOT LEGALLY BEHOLDEN TO THE FIRST AMENDMENT. 

 

STAHL: You’re not operating under some– freedom of speech mandate. You get to pick.

SUSAN: We do. But we think there’s a lot of benefit from being able to hear from groups and underrepresented groups that otherwise we never would have heard from.

 

[Lauren Southern: But with name calling of Nazi or propagandist…]

 

BUT THAT MEANS HEARING FROM PEOPLE WITH ODIOUS MESSAGES ABOUT GAYS, 

[Crowder: Mr. Lipsy Queer from Vox.] WOMEN [Naked Ape: Sex robot] AND IMMIGRANTS:

 

Nick Fuentes: I think the easiest way for Mexicans to not get shot and killed at Walmart —

 

WOJCICKI EXPLAINED THAT VIDEOS ARE ALLOWED AS LONG AS THEY DON’T CAUSE HARM: BUT HER DEFINITION OF “HARM” CAN SEEM NARROW.

 

SUSAN: So if you’re saying, “Don’t hire somebody because of their race, that’s discrimination.  And so that would be an example of something that would be a violation against our policies.

STAHL: But if you just said, “White people are superior” by itself, that’s okay.

SUSAN: And nothing else, yes.

 

BUT THAT IS HARMFUL IN THAT IT GIVES WHITE EXTREMISTS A PLATFORM TO INDOCTRINATE. 

 

SPENCER:  We want a flourishing, healthy white race.

 

AND WHAT ABOUT MEDICAL QUACKERY ON THE SITE? LIKE TUMERIC CAN REVERSE CANCER; BLEACH CURES AUTISM; VACCINES CAUSE AUTISM. 

 

ONCE YOU WATCH ONE OF THESE, YOUTUBE’S ALGORITHMS MIGHT RECOMMEND YOU WATCH SIMILAR CONTENT. BUT NO MATTER HOW HARMFUL OR UNTRUTHFUL, YOUTUBE CAN’T BE HELD LIABLE FOR ANY CONTENT, DUE TO A LEGAL PROTECTION CALLED “SECTION 230.”

 

STAHL: The law under 230 does not hold you responsible for user-generated content. But in that you recommend things, sometimes 1,000 times, sometimes 5,000 times, shouldn’t you be held responsible for that material, because you recommend it?

SUSAN: Well, our systems wouldn’t work without recommending. And so if–

STAHL: I’m not saying don’t recommend. I’m just saying be responsible for when you recommend so many times.

SUSAN: If we were held liable for every single piece of content that we recommended, we would have to review it. That would mean there’d be a much smaller set of information that people would be finding. Much, much smaller.

 

SHE TOLD US THAT EARLIER THIS YEAR YOUTUBE STARTED RE-PROGRAMMING ITS ALGORITHMS IN THE US TO RECOMMEND QUESTIONABLE VIDEOS MUCH LESS…  AND POINT USERS WHO SEARCH FOR THAT KIND OF MATERIAL TO AUTHORATATIVE SOURCES, LIKE NEWS CLIPS. WITH THESE CHANGES WOJCICKI SAYS THEY HAVE CUT DOWN THE AMOUNT OF TIME AMERICANS WATCH CONTROVERSIAL CONTENT BY 70 PERCENT.  

 

STAHL: Would you be able to say to the public: we are confident we can police our site?

 

SUSAN: YouTube is always going to be different than something like traditional media where every single piece of content is produced and reviewed.  We have an open platform. But I know that I can make it better.  And that’s why I’m here.

If you just bought a smart TV on Black Friday or plan to buy one for Cyber Monday tomorrow, the FBI wants you to know a few things.

Smart TVs are like regular television sets but with an internet connection. With the advent and growth of Netflix, Hulu and other streaming services, most saw internet-connected televisions as a cord-cutter’s dream. But like anything that connects to the internet, it opens up smart TVs to security vulnerabilities and hackers. Not only that, many smart TVs come with a camera and a microphone. But as is the case with most other internet-connected devices, manufacturers often don’t put security as a priority.

That’s the key takeaway from the FBI’s Portland field office, which just ahead of some of the biggest shopping days of the year posted a warning on its website about the risks that smart TVs pose.

“Beyond the risk that your TV manufacturer and app developers may be listening and watching you, that television can also be a gateway for hackers to come into your home. A bad cyber actor may not be able to access your locked-down computer directly, but it is possible that your unsecured TV can give him or her an easy way in the backdoor through your router,” wrote the FBI.

The FBI warned that hackers can take control of your unsecured smart TV and in worst cases, take control of the camera and microphone to watch and listen in.

Active attacks and exploits against smart TVs are rare, but not unheard of. Because every smart TV comes with their manufacturer’s own software and are at the mercy of their often unreliable and irregular security patching schedule, some devices are more vulnerable than others. Earlier this year, hackers showed it was possible to hijack Google’s Chromecast streaming stick and broadcast random videos to thousands of victims.

In fact, some of the biggest exploits targeting smart TVs in recent years were developed by the Central Intelligence Agency, but were stolen and published online by WikiLeaks two years ago.

But as much as the FBI’s warning is responding to genuine fears, arguably one of the bigger issues that should cause as much if not greater concerns are how much tracking data is collected on smart TV owners.

The Washington Post earlier this year found that some of the most popular smart TV makers — including Samsung and LG — collect tons of information about what users are watching in order to help advertisers better target ads against their viewers and to suggest what to watch next, for example. The TV tracking problem became so problematic a few years ago that smart TV maker Vizio had to pay $2.2 million in fines after it was caught secretly collecting customer viewing data. Earlier this year, a separate class action suit related to the tracking again Vizio was allowed to go ahead.

The FBI recommends placing black tape over an unused smart TV camera, keeping your smart TV up-to-date with the latest patches and fixes, and to read the privacy policy to better understand what your smart TV is capable of.

As convenient as it might be, the most secure smart TV might be one that isn’t connected to the internet at all.

Figure Technologies, a nearly two-year-old, San Francisco-based fintech cofounded by Mike Cagney, the founder of the more established fintech company SoFi, is raising a whole lot of money — again.

By February of this year, Figure had already raised $120 million in equity funding from a gaggle of investors, including RPM Ventures, partners at DST Global, Ribbit Capital, DCM, DCG, Nimble Ventures, and Morgan Creek. In May, it announced that it had closed an up to $1 billion uncommitted asset-based financing facility on its own custom blockchain with Jefferies and WSFS Institutional Services.

Now, according to paperwork filed with the SEC earlier this month, it appears that Figure has closed or is about to close on $103 million in Series C funding.

Presumably, investors are interested partly in the company’s growing spate of products. While Figure started out providing home loans to older customers who aren’t earning income and have much of their wealth tied up in their homes — a fast-growing demographic — it has more recently begun to chase after a demographic that Cagney knows well through SoFi, younger people looking to refinance their student loans.

According to Figure’s website, it also plans to introduce a money market product soon.

Figure talked recently with American Banker about the company’s interest in competing more directly with SoFi, citing the $1.4 trillion in outstanding loan debt as the primary reason it’s swooping into the space, and with the “same mousetrap” that Figure has developed to quickly process home loans, which it then securitizes and sells.

Specifically, all of Figure’s financial services business is executed entirely on its blockchain, Provenance, which further has a native token, Hash, that’s used to both access the blockchain and to memorialize off-chain exchange of fiat currency.

Cagney co-founded Figure with his wife, June Ou, who was the company’s chief operating officer. She was previously chief technology officer at SoFi, where Cagney lost his job in 2017 as CEO after a board investigation into sexual misconduct at the company.

Others of Figure’s cofounders include Alana Ackerson and Cynthia Chen. Ackerson was previously the CEO of the Thiel Foundation. Chen was most recently a venture partner with DHVC (Danhua Capital), a venture capital firm based in Palo Alto, Ca.

A massive database storing tens of millions of SMS text messages, most of which were sent by businesses to potential customers, has been found online.

The database is run by TrueDialog, a business SMS provider for businesses and higher education providers, which lets companies, colleges, and universities send bulk text messages to their customers and students. The Austin, Texas-based company says one of the advantages to its service is that recipients can also text back, allowing them to have two-way conversations with brands or businesses.

The database stored years of sent and received text messages from its customers and processed by TrueDialog. But because the database was left unprotected on the internet without a password, none of the data was encrypted and anyone could look inside.

Security researchers Noam Rotem and Ran Locar found the exposed database earlier this month as part of their internet scanning efforts.

TechCrunch examined a portion of the data, which contained detailed logs of messages sent by customers who used TrueDialog’s system, including phone numbers and SMS message contents. The database contained information about university finance applications, marketing messages from businesses with discount codes, and job alerts, among other things.

But the data also contained sensitive text messages, such as two-factor codes and other security messages, which may have allowed anyone viewing the data to gain access to a person’s online accounts. Many of the messages we reviewed contained codes to access online medical services to obtain, and password reset and login codes for sites including Facebook and Google accounts.

The data also contained usernames and passwords of TrueDialog’s customers, which if used could have been used to access and impersonate their accounts.

Because some of the two-way message conversations contained a unique conversation code, it’s possible to read entire chains of conversations. One table alone had tens of millions of messages, many of which were message recipients trying to opt-out of receiving text messages.

TechCrunch contacted TrueDialog about the exposure, which promptly pulled the database offline. Despite reaching out several times, TrueDialog’s chief executive John Wright would not acknowledge the breach nor return several requests for comment. Wright also did not answer any of our questions — including whether the company would inform customers of the security lapse and if he plans to inform regulators, such as state attorneys general, per state data breach notification laws.

The company is just one of many SMS providers that have in recent months left systems — and sensitive text messages — on the internet for anyone to access. Not only that but it’s another example of why SMS text messages may be convenient but is not a secure way to communicate — particularly for sensitive data, like sending two-factor codes.

Read more:

• A leaky database of SMS messages exposed two-factor codes
• Mixcloud data breach exposes over 20 million user records
• StockX was hacked, exposing millions of customers’ data
• DoorDash confirms data breach affected 4.9 million users
• 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

Hey everyone. Thank you for welcoming me into you inboxes yet again.

Hope you all had a wonderful Thanksgiving. After dodging your inboxes for a couple weeks as I ventured off to China for a TechCrunch event in Shenzhen, I am rested up and ready to go.

If you’re reading this on the TechCrunch site, you can get this in your inbox here, and follow my tweets here.

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The big story

When Apple announced details on their three new subscription products (Apple TV+, Apple Arcade and Apple News+ — all of which are now live) back in March, the headlines that followed all described accurately how Apple’s business was increasingly shifting away from hardware towards services and how the future of the company may lie in these subscription businesses.

I largely accepted those headlines as fact, but one thing I have been thinking an awful lot about this week is how much I have loved Disney+ since signing up for an account and just how little I have thought about Apple TV+ despite signing up for both at their launches.

It’s admittedly not the fairest of comparisons, Disney has decades of classic content behind them while Apple is pushing out weekly updates to a few mostly meh TV shows. But no one was begging Apple to get into television. The company’s desires to diversify and own subscriptions that consumers have on their Apple devices certainly make sense for them, but their strategy of making that play without the help of any beloved series before them seems to have been a big miscalculation.

At TechCrunch, we write an awful lot about acquisitions worth hundreds of million, if not billions, of dollars. Some of the acquisitions that have intrigued me the most have been in the content space. Streaming networks are plunking down historic sums on series like Seinfeld, Friends and The Big Bang Theory. The buyers have differed throughout these deals, but they have never been Apple.

That’s because Apple isn’t bidding on history, they’re trying to nab directors and actors creating the series that will be the next hits. And while that sounds very Apple, it also sounds like a product that’s an awfully big gamble to the average consumer looking to try out a new streaming service. Why pick the service that’s starting from a standstill? Apple has ordered plenty of series and I have few doubts that at least one of the shows they plan to introduce is going to be a hit, but there isn’t much in the way of an early favorite yet and for subscribers that haven’t found “the one” yet, there’s very little reason to stick around.

Other networks with a half-dozen major series can afford a few flops because there’s a library of classics that’s filling up the dead space. Apple’s strategy is bold but is going to lead to awfully high churn among consumers that won’t be as forgiving of bad bets. This is an issue that’s sure to become less pronounced over time, but I would bet there will be quite a few consumers unsubscribing in the mean time leaving those on freebie subscriptions responsible for gauging which new shows are top notch.

Apple has also made the weird move of not housing their content inside an app so much as the Apple TV’s alternative UI inside the TV app. One one hand, this makes the lack of content less visible, but it also pushes all of the original series to the back of your mind. If you’re a Netflix user who has been subconsciously trained never to use the TV app on your Apple TV because none of their content is housed there, you’re really left forgetting about TV+ shows entirely when using the traditional app layout.

We haven’t received any super early numbers on Apple News+, Apple Arcade or Apple TV+, but none of the three appears to have made the sizable cultural splashes in their debuts that were hoped for at launch. Apple’s biggest bet of the three was undoubtedly TV+ and while their first series haven’t seemed to drop any jaws, what’s more concerning is whether the fundamentals of the service have been arranged so that unsatisfied subscribers feel any need to stick around.

Send me feedback
on Twitter @lucasmtny or email
lucas@techcrunch.com

On to the rest of the week’s news.

Trends of the week

Here are a few big news items from big companies, with green links to all the sweet, sweet added context:

• Facebook buys a game studio building Light saber Fruit Ninja
  One of the things I wrote about this week was Facebook buying the game studio behind one of virtual reality’s most popular titles, Beat Saber. No details on a price tag for the deal, but the buy brings the hop IP underneath Facebook’s corporate umbrella which seems poised to be eying more VR content acquisitions.
• Twitter plans for account memorials
  Almost any time Twitter decides to make a big product change, one gets the feeling it was either snuck through or brute-forced by the CEO or another exec. That’s because there often doesn’t seem to be a lot of consideration for caveats that users seem to collectively identify almost immediately. This week was time for another one of these situations, after Twitter announced it was planning to deactivate old unused Twitter accounts en masse, something users realized was just going to lead to deactivating deceased people’s accounts and erasing what they had ever tweeted. Twitter, to their credit, decided to pause and rethink things.

GAFA Gaffes

How did the top tech companies screw up this week? This clearly needs its own section, in order of badness:

1. Google appears to bring the hammer down on activism:
   [Google employee activist says she has been fired]

Disrupt Berlin

It’s hard to believe it’s already that time of the year again, but we just announced the agenda for Disrupt Berlin and we’ve got some all-stars making their way to the stage. I’ll be there this year, get some tickets and come say hey!

• Learn how to win customers and influence consumers
• Three of the best tackle the thorny issue of Brexit for startups
• Learn how to raise your first Euros

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Following swiftly on the heels of a Thanksgiving that broke records with $4.2 billion in online sales, Black Friday also hit a new high, although it just fell short of predictions. According to analytics from Adobe, consumers spent $7.4 billion online yesterday buying goods online via computers, tablets and smartphones. The figures were up by $1.2 billion on Black Friday 2018, but they actually fell short of Adobe’s prediction for the day, which was $7.5 billion.

Salesforce, meanwhile, said that its checks revealed $7.2 billion in sales (even further off the forecast).

Popular products included toys on the themes of Frozen 2, L.O.L Surprise, and Paw Patrol. Best selling video games included FIFA 20, Madden 20, and Nintendo Switch. And top electronics, meanwhile, included Apple Laptops, Airpods, and Samsung TVs.

A full $2.9 billion of Black Friday sales happened on smartphones. These conversions are growing faster than online shopping overall, so we are now approaching a tipping point where soon smartphones might outweigh web-based purchases through computers.

“With Christmas now rapidly approaching, consumers increasingly jumped on their phones rather than standing in line,” said Taylor Schreiner, Principal Analyst & Head of Adobe Digital Insights, in a statement. “Even when shoppers went to stores, they were now buying nearly 41% more online before going to the store to pick up. As such, mobile represents a growing opportunity for smaller businesses to extend the support they see from consumers buying locally in-store on Small Business Saturday to the rest of the holiday season. Small Business Saturday will accelerate sales for those retailers who can offer unique products or services that the retail giants can’t provide.”

Adobe Analytics tracks sales in real-time for 80 of the top 100 US retailers, covering 55 million SKUs and some 1 trillion transactions during the holiday sales period. Salesforce uses Commerce Cloud data and insights covering more than half a billion global shoppers across more than 30 countries.

One of the reasons we may be seeing slightly less fervent sales than the analysts had predicted is because the holiday sales season is starting earlier and earlier. Black Friday, the day after Thanksgiving when many people have days off, has for a long time been seen by retailers as the start of holiday shopping season. That has changed as retailers hope to catch more sales over a longer period of time.

As more people shop, they are also shopping for more expensive items. Adobe noted that Average Order Value was $168, a new record level yesterday for Black Friday, up 5.9% on a year ago.

Smartphone sales were up 21% over last year and those who were not buying were, as a start, browsing, with whopping 61% of all online traffic to retailers coming from smartphones, up 15.8% since last year.

As with yesterday, e-commerce “giants” with over $1 billion in sales annually were doing better than smaller sites: they had more smartphone sales, and 66% conversions on browsers on smartphones, Adobe said. They have overall also seen a 62% boost in sales this season, versus 27% for smaller retailers.

As with the Thanksgiving sales patterns — when bigger retailers also appeared to do better than their smaller counterparts — there are a couple of reasons for this. One is that the bigger sites have a wider selection of goods and can afford to take hits with deep discounts on some items, in order to lure users in to add other items to their shopping cars that are not as deeply discounted. Or, bigger online retailers can simply afford to give bigger markdowns.

The other is that the bigger stores often have more flexible delivery options. Adobe noted that those using click-and-collect orders, or buy online, pick up in store / curbside grew by 43 percent.

It will be interesting to see how and if patterns change for smaller retailers on Sunday, which is being dubbed “small business Sunday” to focus on buying from smaller and independent shops. Shoppers have already spent $470 million, and Adobe believes it will pass the $3 billion mark. Cyber Monday, the biggest of them all, is expected to make $9.4 billion in sales.

Ockam, a two-year-old, Bay Area-based company that’s selling tools to developers to they can establish an “architecture for trust” within their connected device applications, has raised $3.2 million in seed funding, including from Core Ventures, Okta Ventures, SGH Capital, and Future Ventures.

This serverless platform for IoT development is being led by CEO Matthew Gregory and CTO Mrinal Wadhwa, two cofounders with noteworthy backgrounds.

Before launching Ockam in the fall of 2017, Gregory was an “intrapreneur” at Microsoft, where he says he helped lead Azure’s pivot into open source software and container services. He also spent a couple of years at Salesforce as a product manager. As interestingly, he spent a few years as as system engineer working for Stars & Stripes, a syndicate of the yacht-racing competition America’s Cup where he says he tells us he led an engineering effort to build the customer systems of sensors, analytics software and wireless communications tools needed to help the racing team make better decisions.

Madhwa was meanwhile the CTO of another privately held IoT company, Fybr, that promises real-time data analytics capable of decision making at the edge (versus in the cloud).

Some of what the startup is promising is that, using its technology, IoT systems developers will be able to build more scalable connected systems — as well, crucially, as more secure ones How? Partly through crytpographic keys and partly by assigning credentials to different entities, from devices to people to assets to services (among other things).

The company is one of a growing spate of companies hoping developers will increasingly turn to them instead of building out their own software infrastructure. For example, Particle, a seven-year-old, San Francisco-based platform for Internet of Things devices that has ambitions similar to those of Ockam, recently closed on $40 million in funding in a round that brought its total funding to $81 million).

Ockam has now raised $4.9 million in seed funding altogether, having raised a smaller amount of seed funding from Future Ventures back in May.