Category: UNCATEGORIZED

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Facebook starts testing News, its new section for journalism

Facebook’s news section, which was previously reported to be imminent, is here: The company is rolling out Facebook News in a limited test in the U.S. as a home screen tab and bookmark in the main Facebook app.

Should publishers trust Facebook? Well, Josh Constine argues that none of them have learned the right lessons from the last 10 years.

2. Pixelbook Go review: a Chromebook in search of meaning

The Go is clearly Google’s attempt to lead the way for manufacturers looking to explore Chromebook life outside the classroom. It has some nice hardware perks, but it’s not the revolution or revelation ChromeOS needs.

3. SpaceX wants to land Starship on the Moon before 2022, then do cargo runs for 2024 human landing

SpaceX president and COO Gwynne Shotwell shed a little more light on her company’s current thinking with regards to the mission timelines for its forthcoming Starship spacefaring vehicle.

4. After its first earnings miss in two years, Amazon shares get walloped in after-hours trading

Amazon shares fell by nearly 7% in after-hours trading on Thursday after the company reported its first earnings miss in two years.

5. Lawmakers ask US intelligence chief to investigate if TikTok is a national security threat

In a letter by Sens. Charles Schumer (D-NY) and Tom Cotton (R-AR), the lawmakers asked the acting director of national intelligence Joseph Maguire if the app maker could be compelled to turn Americans’ data over to Chinese authorities.

6. The SaaS gold rush will become the ‘Hunger Games’

Enterprise software investor Rory O’Driscoll says that while the cloud is obviously here to stay, the next five years in cloud investing will neither be the same nor as easy as the last 10. (Extra Crunch membership required.)

7. Learn how to raise your first euros at TechCrunch Disrupt Berlin

Startup funding experts — including Forward Partners managing partner Nic Brisbourne, Target Global partner Malin Holmberg and DocSend co-founder and chief executive officer Russ Heddleston — will sit down together on the Extra Crunch Stage at TechCrunch Disrupt Berlin.

With cross-platform experiences like Fortnite and PUBG, in-game socializing environments, and subscription-based cloud gaming services from Playstation, Google, Amazon, and others, the gaming industry is entering a new era beyond mobile.

These days, the industry is at the center of social media and entertainment trends; gaming is expected to earn $152 billion in global revenue this year, up 9.6% year over year. 

Given my recent writing on Unity, the most-used game engine, and ongoing research into interactive media trends, I wanted to find out how top gaming-focused VCs are assessing the market right now. I asked ten of them to share which trends they are most excited about when it comes to finding investment opportunities:

• David Gardner, Partner at London Venture Partners
• Henric Suuronen, Partner at Play Ventures
• Samuli Syvähuoko, Partner at Sisu Game Ventures
• Jay Chi, Partner at Makers Fund
• Peter Levin, Managing Director at Griffin Gaming Partners
• Gigi Levy-Weiss, Partner at NFX
• Ethan Kurzweil, Partner at Bessemer Venture Partners
• Jonathan Lai, Partner at Andreessen Horowitz
• Blake Robbins, Partner at Ludlow Ventures
• Jon Goldman, General Partner at GC Tracker & Board Partner at Greycroft Partners

Amid the mix of predictions, there were several common threads, such as optimism about the rise of games as broader social platforms, opportunities to invest directly in new studios, and skepticism about near-term investments in augmented or virtual reality and blockchain.

Here are their responses.

David Gardner, Partner at London Venture Partners

“PC Games are back. Great place to start new IP to then migrate a success to multiple platforms. There is more innovation in business models and more open distribution on PC to facilitate audience growth without the punishment of mobile CPIs.

VR & AR remain out. We stood away from VR in the beginning and extend that to AR while the user experience for games remains a disappointment. Let’s hope those new Apple glasses do the trick!

Crypto remain a theological war zone, but honestly everything on offer has been available in the cloud world, but the real consumer benefit isn’t showing up.

We love games that are expanding audience demographics and are sensitive to less hardcore audiences.  For example, women players are estimated to account for 1 billion gamers.”

Henric Suuronen, Partner at Play Ventures

“At Play Ventures, we believe we have just entered the golden era of mobile gaming. Who would have believed 10 years ago that Nintendo and games like Fortnite and Call of Duty would all be on mobile. Mobile is not just a games platform anymore, it is THE games platform of choice for casual and core players alike. Consequently, in the next 2-3 years we will invest in 30-40 mobile games studios across the globe.”

Samuli Syvähuoko, Partner at Sisu Game Ventures

“We at Sisu Game Ventures have been investing in many sectors since 2015 including free-to-play mobile games (especially big here in Finland), VR, AR, PC, console, instant messenger, hypercasual, audio and most recently cloud-native games as well. In addition to game studios, around a third of our investments are into games related tech/infrastructure. 

We’ve so far not dipped our toes into blockchain or eSports and our appetite for doing more investments in VR and AR is nil. To me, the most interesting mega trends lie with the promise of cloud gaming when utilized to its full potential. Another term that encapsulates my excitement is games-as-a-social-hobby. Put this and the extreme accessibility of the cloud together and you’ll have a game with revolutionary potential.”

Jay Chi, Partner at Makers Fund

“We are looking closely at ‘Gaming as Media’ related content and platforms — the emergence of new interactive experience centered on ‘viewers as participants.’ Gaming as social media falls under this thesis. We are also looking for MMO and Metaverse enablers given increased demand for specialized, scalable and affordable technologies that empower lean startup teams to create and operate large-scale worlds and novel gameplays. 

We also see potential for new start-ups to emerge in hypercasual games with midcore/social meta — no one has truly cracked this genre yet.”

Google today announced one of the biggest updates to its search algorithm in recent years. By using new neural networking techniques to better understand the intentions behind queries, Google says it can now offer more relevant results for about one in ten searches in the U.S. in English (with support for other languages and locales coming later). For featured snippets, the update is already live globally.

In the world of search updates, where algorithm changes are often far more subtle, an update that affects 10 percent of searches is a pretty big deal (and will surely keep the world’s SEO experts up at night).

Google notes that this update will work best for longer, more conversational queries — and in many ways, that’s how Google would really like you to search these days because it’s easier to interpret a full sentence than a sequence of keywords.

The technology behind this new neural network is called “Bidirectional Encoder Representations from Transformers,” or BERT. Google first talked about BERT last year and open-sourced the code for its implementation and pre-trained models. Transformers are one of the more recent developments in machine learning. They work especially well for data where the sequents of elements is important, which obviously makes them a useful tool for working with natural language and, hence, search queries.

This BERT update also marks the first time Google is using its latest Tensor Processing Unit (TPU) chips to serve search results.

Ideally, this means that Google Search is now better able to understand exactly what you are looking for and provide more relevant search results and featured snippets. The update started rolling out this week, so chances are you are already seeing some of its effects in your search results.

Bespoke Financial wants to provide cannabis businesses with the same kind of financial services that other businesses get, but that dispensaries and growers can’t yet access.

The regulations around cannabis operations are so stringent at the local level — and so nebulous at the federal level — that national banks won’t give businesses in the cannabis industry the same basic services (like short-term loans).

That’s why one former Goldman Sachs banker has partnered with two entrepreneurs from the traditional agriculture industry to create Bespoke Financial. And it’s why the company has raised $7 million in financing led by Casa Verde Capital — the investment firm launched by legendary cannabis aficionado, Calvin Broadus (AKA Snoop Dogg).

In some ways, George Mancheril is the new face of the cannabis business. The former banker hails from Goldman Sachs and Guggenheim Partners and worked on the desks that dealt with alternative lending.

A transplant to Los Angeles roughly six years ago, Mancheril says he saw the migration of legally sanctioned cannabis begin for recreational use and knew that there would be opportunities for new lending businesses.

“Cannabis will become a broad, mature industry just like any other, and if that is going to happen there needs to be a debt structure that can support that,” Mancheril says.

The biggest impediment to the industry’s growth is the one that Bespoke Financial wants to tackle first — and that’s access to debt.

To build the company’s first product Mancheril looked to his co-founder’s Pablo Borquez-Schwarzbeck and Benjamin Dusastre. Borquez-Schwarzbeck and Dusastre previously launched ProducePay, a fintech platform focused on produce farmers that has already financed roughly $2 billion in perishable commodities throughout 13 countries. It’s backed by around $200 million in venture capital and debt financing.  

What Mancheril and his co-founders have done is take ProducePay’s underwriting model and apply it to the cannabis industry. The financial instrument that they’re starting with is known “in the business” as factoring.

It’s basically advancing money to businesses for a contract that’s signed in exchange for a cut of the money once a company gets paid for the goods or services they’ve rendered.

“While the US legal cannabis market is forecasted to grow over 20% annually, reaching $23B by 2022, the industry’s true growth potential is limited by long cash flow cycles throughout the supply chain and a lack of scalable and efficient capital sources,” says Bespoke Financial co-founder and chief executive, George Mancheril, in a statement. “Our approach will dramatically improve cash flow cycles across the supply chain and provide scalable working capital to fuel our clients’ growth.”

“In general in the cannabis industry overall it’s difficult to access any part of the financial system,” says Karan Wadhera, a managing director at Casa Verde. “Now that we’re moving into a place where equity financing is getting expensive a company like bespoke plays an important and valuable role in the ecosystem to help young brands and mature brands get access to working capital when they need it the most.”

It has been a tough week for China-U.S. relations. Vice President Mike Pence ratcheted up the administration’s rhetoric yesterday, calling the NBA “a wholly owned subsidiary of the authoritarian regime” in China while the league’s commissioner Adam Silver continued to try to tamp down the intensity of criticism over the league’s business, saying in an interview with the Wall Street Journal that “We have no choice but to engage and to attempt to have better understanding of other cultures and try to work through issues.”

The NBA was hardly the only challenge between the U.S. and China. This week saw the intensification of two threads of national security concerns continue to get airtime on Capitol Hill that could have massive ramifications for startups.

The first and potentially most potent thread is swirling around TikTok, the epically popular social video app that also happens to be owned and operated by China-based ByteDance. This week, senate majority leader Chuck Schumer and senator Tom Cotton of Arkansas circulated a bipartisan letter requesting an assessment of TikTok’s national security risks.

ByteDance remains the world’s highest-valued unicorn (which, perhaps in the wake of WeWork’s collapse the past two weeks, is not an epithet that any startup wants to actually hold these days). It has received major funding from the likes of Sequoia Capital China, and is currently valued at $75 billion.

Sequoia is clearly preparing for the worst around these national security reviews. Last week, the firm confirmed to The American Lawyer that Donald Vieira, a partner at top law firm Skadden, would be joining the venture firm as chief legal officer. Vieira has spent the last few years working on cases surrounding CFIUS, the Committee on Foreign Investment in the United States (WTF is CFIUS?), and earlier, was chief of staff of none other than the Department of Justice’s national security division.

That expertise will be critical as Sequoia potentially faces a tough reception for ByteDance in the national security circuit on Capitol Hill. Earlier this year, CFIUS required video game publisher Beijing Kunlun to retroactively divest itself of its purchase of gay-dating app Grindr over concerns that the app’s user data could provide Chinese intelligence and law enforcement officials with compromising material that would allow for individual blackmail.

While Grindr’s text messages may be far more compromising than the average TikTok viral video, the app’s small user base is dwarfed by TikTok, which has seen more than 100 million downloads in the U.S. alone. That potentially wide surveillance net is of acute concern for U.S. intelligence officials.

On top of that, of course, is the media’s heightened discussion the past few weeks that ByteDance could carefully calibrate the virality of videos on TikTok to hew toward Beijing’s censorship dictates. That has led to some teens posting various memes about the Hong Kong protests to see how far they can push the platform’s red lines (as teens are wont to do).

Strategically, the China angle has become very useful for Facebook, who faces a viable threat in TikTok’s popularity according to my colleague Josh Constine. Mark Zuckerberg has made China’s potential censorship within TikTok a major speaking point, which he emphasized in a major policy speech at Georgetown:

While our services, like WhatsApp, are used by protesters and activists everywhere due to strong encryption and privacy protections, on TikTok, the Chinese app growing quickly around the world, mentions of these protests are censored, even in the US.

Is that the internet we want?

Facebook’s strategic messaging starts to lead us to the other national security thread happing these days in DC. There have been wide concerns over the past few months on Capitol Hill over bids for subway, rail, bus, and other transit contracts from Chinese companies like state-owned CRRC and electric bus and battery manufacturer BYD . There have been motions to ban federal transit funding for projects that use vehicles from Chinese-subsidized sources.

A new report published this morning by Radarlock, a data-driven research organization, argues that Beijing is using access to these contracts to enhance its ‘civil-military fusion,’ by which China means learning how to manufacture and build leading global supply chains that help it in both private sector competitiveness and in military superiority. As the research leads Emily de La Bruyère and Nathan Picarsic write:

Through both data collection and technology, CRRC contributes to Beijing’s military and military-civil fusion [“MCF”] projects: Explicitly declaring, in its company documents, a role in the military-civil fusion strategy, CRRC has set up an investment fund dedicated to MCF; operates in MCF industry zones; shares technology, resources, and data with military-and MCF-affiliates; and assigns the MCF label to high-profile projects and centers.

Like Facebook though, these results are being highlighted by industry sources, with Politico Pro noting that Securing America’s Future Energy and the Alliance for American Manufacturing have been pushing a previous report on BYD around DC.

And that gets back to the challenges of future economic ties between the two superpowers, notwithstanding the latest developments in the trade war negotiation (which seem as likely to conclude as Brexit is to happen).

National security policy is increasingly being used by incumbent players as a cudgel to stifle competition. Many of those national security concerns are valid — and sometimes acutely so — but we also need to be extraordinarily clear that like any market restriction, there is ultimately a consumer cost to these initiatives as well. The Chinese may go without star-studded basketball as much as Americans will go without working subway cars, and that’s the cost of a relationship that has never been built on a foundation of trust.

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week Kate and Alex held the reins as a duo (check out our chat with Greylock’s Sarah Guo from last week here) to dig into an enormous raft of news. And don’t worry, it’s not all late-stage happenings. We’re discussing early-stage news every week because that’s what the listeners want!

Up top we dug into Kate’s excellent work covering the Superhuman founder’s new micro fund, or at least his attempt at raising such a fund. Our main question is how can he be a good VC and a good executive at the same time? Folks don’t tend to do both at the same time because they’re each more than full-time jobs. Having two such gigs sounds hard.

But hey, it’s not just athletes and musicians who can bring outsized interest to deals. In-demand founders can have a similar effect. We’ll be keeping a close eye on the upcoming fun. Moving on. 

Next we turned to the other end of the venture landscape, looking at Founder’s Fund’s new capital vehicles. With a combined $2.7 billion in eventual capital, FF is hoping to build a financial redoubt from which they can rain capital down on late-stage targets wherever they may be.

Is it a bit late in the cycle to cut late-stage checks to companies that might otherwise go public? That’s the gamble so far as we can see it, but perhaps with WeWork’s IPO dreams turned to nightmares, there’s demand among a group of companies for another 12 months in the private markets. And that means more money is required.

On the theme of more money, Lime is raising some more and we were treated to new financial results from The Information’s great work getting the figures. Or discussion asked the question of how far the company’s unit economics could improve. Kate said that Lime is investing a lot now in developing better hardware, so their scooters can last more than 5 minutes on the roads before breaking down. She thinks things will start looking up when its deploying only new, fancy, good scooters. Alex is bearish.

Before we could turn back to the early-stage market and wrap up, we had to cover the latest from WeWork. SoftBank did in the end come and save the day (at least for now) for the company, meaning that WeWork lives on, though layoffs are expected sooner rather than later. Who knows what the future holds…

And finally, Vendr, a company that is profitable, raised a $2 million round. This is interesting because, again, it’s profitable! And the startup willing shared some financial data with us–a rarity. Read more about the recent Y Combinator graduate here.

NASA’s Mars 2020 rover will have to operate on its own in a harsh environment, hundred of millions of miles from the nearest mechanic. But for now, it’s still in development at NASA’s Jet Propulsion Lab – and every milestone is an important one. Including supporting its own weight, fully assembled and resting on its own six wheels, which is what the rover managed this week.

This stand-up test is one of many the rover is undergoing, including testing its nuclear-powered engine, its ability to move its wheels, its sensor arrays and navigation systems. The six-wheeled robotic exploration platform is readying for its scheduled July 2020 launch, which will see it sent to the Red Planet to carry on and augment the mission of the Mars Curiosity rover.

NASA’s Mars 2020 Rover. Credit: NASA

Curiosity launched in 2011, and landed on Mars in August of 2012. This earlier rover was designed for a two-year mission, but it got an indefinite mission extension in 2012, and it’s still operational after switching computers earlier this year following a crash – a full seven years after its original landing.

The Mars 2020 rover has received a number of upgrades vs. Curiosity, which you’d probably expect given that the team developing the newer rover has the benefit of multiple years of experience running a robotic rover platform on the surface of Mars. Mars 2020 features upgrades like improved environmental durability, and it’ll carry a host of different scientific and research equipment to complement Curiosity’s capabilities.

NASA and its commercial astronaut program partners are laser-focused on getting crew into space, but to get to space you first have to get to the rocket, and that’s where the Airstream Astrovan II comes in. This vehicle, which is the sequel to the original Astrovan that brought America’s astronauts to the launch pad in the days of the Shuttle Program, features modern updates, and is heading straight from being on display at the International Astronautical Congress in Washington to Cape Canaveral to ready for Boeing’s first CST-100 Starliner crew launch next year.

I got a chance to take a look at the Astrovan II in person, but the Airstream staff on site had cordoned off the door to the van and when I asked if I could go in, they explained it was off limits to attendees – for good reason, since this is literally the van that will be used by NASA’s commercial crew astronauts during the first launches next year.

The original Astrovan had that signature Airstream ‘silver bullet’ look, as you can see in the photo below. The updated version looks more like your standard commercial shutter van, but what it lacks in exterior styling it makes up for in interior creature comforts.

The outside of the Astrovan II has a full-wrap which shows off Boeing’s CST-100 Starline capsule, which is the spacecraft that Boeing is developing for NASA as part of its commercial crew program, along with second supplier SpaceX, which is simultaneously readying its Crew Dragon capsule for service.

[gallery ids="1903180,1903175,1903174,1903176,1903177,1903178,1903179"]

The Astrovan II status up to eight passengers (compete with flight suits) and is a custom version of the Airstream Atlas Touring Coach that was handbill in Jackson Center, Ohio. As you can see, they opted for a minimalist, sci-fi stainless steel look on the inside, with large, comfy looking chairs that should provide a smooth ride before the considerably rockier one commercial crew will experience strapped to a massive, powerful rocket en route to the International Space Station.

Speaking at a quick series of interviews with commercial space company’s at this year’s annual International Astronautical Congress, SpaceX President and COO Gwynne Shotwell shed a little more light on her company’s current thinking with regards to the mission timelines for its forthcoming Starship spacefaring vehicle. Starship, currently in parallel development at SpaceX’s South Texas and Florida facilities, is intended to be an all-purpose successor to, and replacement for, both Falcon 9 and Falcon Heavy, with a higher payload capacity and the ability to reach the Moon and eventually Mars.

“Aspirationally, we want to get Starship to orbit within a year,” Shotwell said. “We definitely want to land it on the Moon before 2022. We want to […] stage cargo there to make sure that there are resources for the folks that ultimately land on the moon by 2024, if things go well, so that’s the aspirational timeframe.”

That’s an ambitious timeline, and as Shotwell herself repeatedly stated, these are “aspirational” timelines. In the space industry, as well as in tech, it’s not uncommon for leadership to set aggressive schedules in order to drive the teams working on projects to work at the limits of what’s actually possible. SpaceX CEO Elon Musk is also known for working to timelines that often don’t match up with reality, and Shotwell alluded to Musk’s ambitious goal setting as a virtue in another part of her on-stage interview at IAC.

SpaceX President and COO Gwynne Shotwell at IAC 2019 in Washington, D.C.

“Elon puts out these incredibly audacious goals and people say ‘You’re not going to do it, you’ll never get to orbit, you’ll never get a real rocket to orbit, […] you’ll never get Heavy to orbit, you’ll never get Dragon to the station, you’ll never get Dragon back, and you’ll never land a rocket,'” she said. “So, frankly, I love when people say we can’t do it, because it motivates my fantastic 6,500 employees to go do that thing.”

SpaceX has previously discussed its goal of starting its first orbital test flights of Starship within as little as a year. So far, the company has built and tested a so-called ‘Starhopper’ demonstration vehicle, which consisted of just the base of the vehicle and one of the Raptor engines it will use for its new Starship launch system and Super Heavy booster. After completing successful low-altitude flights with that vehicle, SpaceX moved on to assembling its Mk1 and Mk2 Starship test vehicles, which represent the full scale of the ultimate orbital spacecraft, and which are being built by teams in Boca Chica and Cape Canaveral, respectively. These will perform high-altitude testing, before SpaceX builds additional prototypes for orbital, and ultimately human test flights.

SpaceX already has already been contracted by Intuitive Machines and ispace, both companies working with NASA to delivery payloads to the Moon ahead of its 2024 Artemis program human Moon landing, but these payload missions all specify using Falcon 9 to deliver their payloads.

Facebook’s news section, which was previously reported to be imminent, is here: The company is rolling out Facebook News in a limited test.

In a blog post, Facebook’s Campbell Brown (vice president of global news partnerships) and Mona Sarantakos (product manager, news) said that news articles will continue to appear in the main News Feed. However, they said that creating a specific tab focused on journalism “gives people more control over the stories they see, and the ability to explore a wider range of their news interests, directly within the Facebook app.”

Brown and Sarantakos added that the News tab was developed in consultation with publishers, and also based on feedback from a survey of more than 100,000 Facebook users in the United States earlier this year.

It sounds like Facebook News will use both human editors and algorithms to determine which stories you see — an unusual move for a company that’s been hesitant to police the content posted by users and advertisers. Specifically, there will be a section called Today’s Stories, curated by a team of journalists to highlight the biggest national news stories of the day.

At the same time, Facebook will also provide algorithmic story suggestions based on your interests and activity. You’ll be able to hide articles, topics and publishers that you don’t want to see, and to browse sections devoted to business, entertainment, health, science and technology, and sports — topics where Facebook users apparently felt underserved.

“Regarding personalization, publishers worry that machine learning has limits and they’re right,” Brown and Sarantakos wrote. “We have progress to make before we can rely on technology alone to provide a quality news destination.”

Nonetheless, they suggested that algorithms will be “driving the majority of Facebook News,” and that they’ll be working to ensure that those algorithms are also surfacing “new forms of journalism in the digital age, including individual, independent journalism.”

Also included: a section where users who have linked their news subscriptions to their Facebook accounts can browse content from those subscriptions.

Which publishers will be included? Brown and Sarantakos said they must be part of Facebook’s News Page Index, and also by abide by the company’s Publisher Guidelines, which includes prohibitions against misinformation (as flagged by third-party fact checkers) and hate speech.

Facebook did not provide a list of participating publishers, but screenshots of the News section include stories from The Wall Street Journal, Time, The Washington Post, BuzzFeed News, Bloomberg, Fox Business, Business Insider, NPR and others; spokespeople for The Post, BuzzFeed and the LA Times confirmed their participation.

So even if publishers have been burned by relying too much on the social network in the past, it sounds like they’re not going to give up on working with Facebook.

It probably helps that the company is paying some of these publishers millions of dollars a year, according to Recode. (A Facebook spokesperson told me, “To ensure we’re including a range of topic areas, we’ll start by paying a subset of publishers who can provide a steady volume of fact-based and original content.”)

BuzzFeed News Editor-in-Chief Ben Smith told me via email that BuzzFeed is “glad to participate” and that “Facebook is taking the lead in recognizing the value news provides to these platforms in a tangible way.”

And Hillary Manning, The Los Angeles Times’ vice president of communications, said (also via email), “We anticipate that we’ll reach new readers through Facebook News and, as we reach more readers, we expect to see more growth in our digital subscriber base.”

Facebook says News will be available to a limited group of users in the U.S., starting today.