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Editor’s Note

Apologies for not getting this roundup newsletter out on Saturday — I was on vacation this weekend. So this newsletter covers the back half of last week and the first half of this week, and some of the articles are summarized more aggressively to keep this email at least somewhat reasonable in length.

How founder and CTO Dries Buytaert sold Acquia for $1B

Earlier this week, Acquia (the company behind content management system Drupal) announced that it had been acquired by Vista Equity for $1 billion. It’s a big exit for co-founder Dries Buytaert, who built out the original version of Drupal almost twenty years ago as an open-source approach to CMSes.

Our enterprise reporter Ron Miller talked with Buytaert about why he sold, what it feels like to exit a startup after building it for so long, and what’s next for Acquia and Drupal.

“We were born out of open source. All of our customers use open source. We give back to open source. It’s part of our DNA. It’s what we do. And so making sure that any new investor understood that and was aligned with was critically important, and Vista is very excited about the open source community around Drupal and Mautic (two open source projects Acquia is the steward of), and has even agreed to invest more in them,” he said.

It was more than aligned values around open source though. He says that Acquia is competing with some big companies like Adobe and it needs more capital, especially for larger M&A projects, and Vista provides that financial backbone that they have been lacking. While they have been able to make a couple of smaller acquisitions, being part of Vista should open the door for far more substantial ones.

How Automattic wants to build the operating system of the web

Speaking of content management systems, Automattic, which owns WordPress.com and recently bought the remnants of Tumblr from TechCrunch parent company Verizon Media, has a major vision for the future of content (and of course, how it fits into that world).

“Make their metrics your metrics” is one of Flexport CEO Ryan Petersen’s mantras. Sometimes that means building free software for your clients. It can be frustrating aligning your fates with a fellow business if they operate on email, phone, and fax like much of the freight forwarding industry that gets pallets of good across the world from factories to retailer’s floors. So today the new Flexport Platform launches allowing brand clients, their factories, and their Flexport logistics reps to all team up to get stuff where it belongs on time.

The software could further stoke Flexport‘s growth by locking in customers to work with the shipping startup that was valued at $3.2 billion after raising $1 billion from SoftBank in February to bring it to $1.3 billion in funding. Flexport’s revenue was up 95% to $441 million in 2018, Forbes’s Alex Konrad reported. Yet there’s plenty of green field to conquer given even Flexport’s largest competitor Kuehne & Nagel only holds 2.5% market share while the whole freight forwarding industry grows 4% per year.

The Flexport Platform lets 10,000 clients like Bombas socks invite their suppliers to collaborate on managing shipments together. An integrated calendar makes shipping timelines clear. A map gives clients a god-view of their freight criss-crossing the globe. Pre-filled forms speed up compliance. Tagging lets users group shipments and filter or search their dashboards, and flag something for extra care — like a pallet of goods critical for a marketing launch event. Collaborators can also sync up via a Facebook Wall style feature, or direct message the team with threaded conversations much like Slack.

Flexport CEO Ryan Petersen

“There’s infinite demand for a job well done” Petersen says about his industry. “The hard part has always been doing a good job.” Taking the confusion out communication scattered across email chains means clients get shipping documentation filled out 50% faster with 4X more accurate data. Flexport is on the tip of the tongue as software eats the world, with antiquated sectors suddenly leveling up.

Petersen saw the inefficiency first-hand growing up running his own import/export and customs business. He part of a wave of entrepreneurs attacking unsexy businesses that the typical Silicon Valley enterprise exec might never stumble across. But three years after we profiled his scrappy company when it had raised just $26 million in funding and had 700 clients, Petersen tells me “We’re trying to retire the word startup.”

It turns out top global brands like Sonos and Klean Kanteen don’t like the second half of “move fast and break things” when those things are boats and planes full of their products. “They want a company that will help them grow, not the fly-by-night startup” Petersen explains. But with competitors trying to chase it and incumbents trying to adopt similar technologies, Flexport must maintain its agility to be subsumed by the pack.

As his company has grown to 1700 employees, he’s dedicated a ton of his time to keeping its culture in check — especially after a certain other logistics giant startup had some uber-painful troubles with workplace toxicity. “You either have too much bureaucracy or not enough process and no one knows what to do. The English language lacks a positive word for bureaucracy — just the right amount of process so people can move quickly”.

That’s what Flexport wanted to give clients with the new platform. From a dedicated tasks queue to a notifications pane, it’s built to take the guess work out of what to do next while being as approachable as consumer software for new users. That also why it’s free. It’s not supposed to be some chore you’re forced to complete, product lead Frank Te Pas tells me. “As you move your first shipment you get onboarded onto this system” says Te Pas. “It’s our way of helping.”

That’s meant a ton of personal growth too. Petersen is still enthusiastic, curious, and charmingly rough around the edges, but he carries it all with more dignity and gravity than a few years back. “The only way I get to stay in this role is if I learn faster than anybody else. Being the CEO of a 1700-person company is not something I knew how to do four to five years ago, or even last year” he tells me. “I’ve changed and become more self aware. It’s been really important to take care of myself — sleeping a lot, I quit drinking alcohol, I lost 30 pounds. I feel great.”

With plenty of cash in the bank, industry talent taking it seriously, and new businesses like Flexport Capital freight financing and its cargo insurance offered in partnership with Marsh, the company might not be a startup for long. It looks like a hot candidate for a coming season of IPOs. And while this company has its own plane (the leading entry for the naming contest is ‘Weird Flex But OK’), it’s actually part of its shipping fleet.

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. CEO ouster, looming layoffs and devaluation turn WeWork into cautionary tale

Adam Neumann succumbed to pressure yesterday to step down as CEO, taking the role of non-executive chairman at the company he co-founded nine years ago.

Layoffs are likely to follow — in fact, sources tell TechCrunch that the scope of these layoffs will be massive, with newer business units scaled back so the company can focus on its core business. (Extra Crunch membership required.)

2. Facebook promises not to stop politicians’ lies & hate

Facebook says it won’t fact check politicians’ speech or block their content if it’s newsworthy — even if that content violates the site’s hate-speech rules or other policies.

3. Nintendo’s ‘Mario Kart Tour’ is out now for iPhone, iPad and Android

Like Nintendo’s other mobile releases, Mario Kart Tour is free to play, with in-app purchases (in-game currency called “rubies”) that you use for upgrades and unlocks.

4. Media metrics giant Comscore pays SEC $5 million in fraud settlement

The company’s share price has been in free-fall since some of its actions came to light earlier this year. It was trading above $20 back in April; the company’s stock now sits just above $2 per share.

5. Devin Wenig steps down as eBay CEO

Earlier this year, investors Elliott Management suggested key structural changes to help reinvigorate a floundering company. Layoffs and restructuring followed the letter.

6. Apple says a bug may grant ‘full access’ to third-party keyboards by mistake

“Full access” allows keyboard makers to capture keystroke data or anything you type — like emails, messages or passwords. This bug may allow third-party keyboards to gain full access permissions without user approval.

7. Fidel raises $18M to let developers build on top of payment data from Visa, Mastercard and Amex

Working in partnership with Mastercard, Visa and American Express, Fidel has developed a suite of APIs that make it easy to link a user’s payment card to an app. This means that developers are able to build card-linked applications “in a matter of minutes.”

Travis VanderZanden is perhaps one of the best known electric scooter startup founders in the business. Although his business, Bird, competes with the likes of Uber and Lyft these days, VanderZanden has been all-in on micromobility since 2017, when Bird deployed its first batch of scooters on the streets of Santa Monica.

Since then, the scooter industry has taken off with many new entrants to the space, and Bird hitting a ~$2 billion valuation. The rise of electric scooters is often compared to the rise of ride-hailing, but there are some key differences at play. For one, cities are in charge of regulation — not the states. And since these are much smaller vehicles, cities can easily pick them up and throw them in the back of a truck if they become a nuisance. Meanwhile, as part of city regulation, data-sharing is not optional — it’s a requirement in order for companies to receive permission to deploy scooters on city streets.

Bird has also made waves with its alternative business models. In addition to running a shared electric scooter business, Bird now sells scooters direct-to-consumers, operates a monthly rental program and enables entrepreneurs to run their own shared scooter businesses through Bird Platform. Most recently, Bird unveiled a two-seater electric vehicle to become more than just a kick scooter company.

This has all happened under the leadership of VanderZanden. Before VanderZanden started Bird, he spent time at both Uber and Lyft. At Uber, VanderZanden was VP of growth and was COO at Lyft, which had acquired his on-demand car wash business, Cherry, in 2013.

At TechCrunch Disrupt SF, I’ll be chatting with VanderZanden about the rise of micromobility, the challenges that come with running a business in the space and what lies ahead for Bird.

If you still need a ticket, be sure to snag one here.

Vox Media announced yesterday that it’s acquiring New York Media, making it the new owner New York Magazine, as well as digital offshoots like The Cut and Vulture.

The companies said Vox Media’s chairman and CEO Jim Bankoff will continue to lead the combined organization, while New York Media CEO Pam Wasserstein will become president and join the Vox board of directors.

Along with the titular website, Vox also owns SB Nation, Recode, The Verge and other online properties. It’s also launched shows on Netflix and PBS, and has a multi-year deal with Hulu. This, however, marks its first move into traditional magazine publishing.

New York Magazine, meanwhile, started out as a supplement to the New York Herald Tribune before becoming a standalone magazine in 1968. It was acquired by Wasserstein’s father Bruce in 2004.

“I have long admired what Pam and the New York Media team have built, especially their ability to shape conversations with some of the most relevant and ambitious work in digital, print, and events,” Bankoff said in a statement. “This combination puts Vox Media in an unparalleled position to lead the media industry forward by focusing on the highest-quality offerings, most robust business models, and strongest company culture.”

The New York Times reports that this was an all-stock transaction of undisclosed value. Bankoff and Wasserstein told The Times that even after the acquisition, they expect Vox Media to remain profitable.

The deal is expected to close later in the fall.

There is no more important savings asset for most American families than owning a home, but the dream of ownership has turned into a nightmare. Homeownership, which peaked in 2004 at around 70%, hit its nadir after the global financial crisis, reaching 63% in 2016 according to data from the St. Louis Federal Reserve bank.

While the reasons behind the decline are numerous and complicated, one point of friction is the extreme homogeneity of mortgage products available to consumers, which mostly revolves around the government-backed 30-year-fixed mortgage.

Divvy has ambitious hopes to offer consumers an alternative that is more tailored to middle-class Americans who might not have sterling credit, perfectly reliable incomes, or single jobs that are often key aspects of traditional mortgage underwriting.

The company’s product offers a path for homebuyers to transition from renting to ownership over three years. Each month, a part of the rental payment made to Divvy (generally around 25%) is added to a future down payment to buy the home outright. After three years and assuming all payments are made, Divvy’s customers are able to migrate to other mortgage products such as the 30-year-fixed.

Divvy’s model has already attracted the attention of Andreessen Horowitz, where partner Alex Rampell led the $10 million series A round into the company.

Now, the company announced today that it has raised a $43 million series B round of venture capital from Singapore’s sovereign wealth fund GIC, which has about 10% of its more than $100 billion in assets in real estate, along with Lennar, the $13 billion revenue home construction company. Divvy is a spinout of HVF, the startup studio founded by Max Levchin.

Besides equity capital, the company has raised more than $100 million in debt since its founding, bringing its total funding to nearly $200 million all in.

Adena Hefets, who along with Brian Ma co-founded the company and is its CEO, explained that the company is focused on middle-class Americans who have been locked out of the traditional mortgage system. “Our customers have, on average, about $4,000 saved up in the bank, about $60-80,000 in income, and generally have about a 635 FICO score,” she explained. “It’s usually a couple settling down, they have kids, … they’re going through a life event like that.” Divvy is still live in its original three launch markets of Cleveland, Memphis, and Atlanta.

Divvy Homes CEO Adena Hefets. Photo via Divvy Homes.

In the past few years, a bunch of startups have emerged to target the mortgage space. As Extra Crunch guest writer Daniel Wu described it earlier this year in his massive analysis of 200 housing-related startups, companies like Point, Loftium, Kabbage, Provito, Homevest, CoBuy, Zerodown, Flyhomes, and more are all targeting expanding the funnel to homeownership.

Hefets says that she welcomes the competition but believes that Divvy has a unique focus that sets it apart. “For us, the mission is really important to be serving those who I think most benefit from access to ownership and who most struggle with it.”

That’s partly why Hefets wanted to work with GIC and Lennar as her Series B leads. “I like to just talk to folks and surround myself with folks who are experts,” she said. GIC and Lennar “I would probably argue have more traditional real estate knowledge than most folks on the Divvy team, right? We bring the technology, but surrounding ourselves with the right real estate experts is super important.”

Ultimately, Divvy hopes to empower 100,000 new homeowners and expand to new markets outside of its original trio of launch cities. “So the way I see the future of Divvy is we’re not just going to be a place where you go to get just purely a rental, but in fact, we’re going to be a complete bridge into homeownership,” Hefets said. She noted that Divvy wants to go beyond just financing to figuring out other friction points to homeownership like preparing taxes, handling maintenance and other services.

Juul Labs chief executive Kevin Brown is stepping down from the leadership role in the company making way for a longtime tobacco executive from the company’s largest shareholder, Atria, to take the reins.

The move comes as Juul faces extreme scrutiny from U.S. regulators over the company’s marketing tactics and a possible ban on some of its best-selling products. As part of the announcement today, Juul has agreed to suspend all of its marketing, advertising, and lobbying efforts in the U.S., which were a target for criticism.

The man taking over from Burns is K.C. Crosthwaite, who previously served as the chief growth officer at Altria Group and oversaw the company’s expansion into electronic cigarettes with the launch of its IQOS brand. Crosthwaite also served on the Juul board of directors as an observer.

“I have long believed in a future where adult smokers overwhelmingly choose alternative products like JUUL . That has been this company’s mission since it was founded, and it has taken great strides in that direction,” said Crosthwaite in a statement. “Unfortunately, today that future is at risk due to unacceptable levels of youth usage and eroding public confidence in our industry. Against that backdrop, we must strive to work with regulators, policymakers and other stakeholders, and earn the trust of the societies in which we operate.”

With Burns at the helm, Juul grew from a few hundred employees to over thousands of staff members working in 20 countries around the world. The executive also advocated for raising the legal age of smoking to 21, halted the sale of non-tobacco and non-menthol-flavored Juul pods to brick and . mortar retailers, enhanced online age verification, and discontinued Facebook and Instagram accounts (in the U.S.).

The steps may not be enough to alleviate the concerns of regulators and lawmakers over Juul’s sway over underage e-cigarette users. The company commands roughly 70% of the e-cigarette market for tobacco products and remains the de-facto brand for all vaping (in the same way that Google is the brand for online search).

Juul’s role as a smoking alternative may also be challenged by startups (like Hava Health) that are developing vaporizer technologies for smoking cessation.

“Working at JUUL Labs has been an honor and I still believe the company’s mission of eliminating combustible cigarettes is vitally important. I am very proud of my team’s efforts to lead the industry toward much needed category-wide action to tackle underage usage of these products, which are intended for adult smokers only,” said Brown in a statement. “Since joining JUUL Labs, I have worked non-stop, helping turn a small firm into a worldwide business, so a few weeks ago I decided that now was the right time for me to step down. I am grateful to be able to confidently hand the reins to someone with K.C.’s skill set, which is well-suited to the next phase of the company’s journey.”

A few months ago, Microsoft announced that PowerPoint would soon get an AI-powered presentation coach that could help you prepare for that important next presentation by giving you immediate feedback. Today, the company is launching this new tool, starting with the web version of PowerPoint.

Public speaking is a skill that takes lots of practice, but few people ever rehearse their presentations. Some don’t because they maybe think they are already great (but aren’t) and others because even the rehearsal makes them nervous. There’s no doubt, though, that practicing a presentation helps.

The new PowerPoint Presentation Coach aims to take the hassle out of practicing. In its current version, the tool looks at three things: pace, slide reading and word choice. Pace is pretty self-explanatory and looks at how fast or slow somebody is speaking. The ‘slide reading’ feature detects when you are simply reading the words from your slides word for word. Nobody wants to sit through that kind of presentation. The ‘word choice’ tool doesn’t just detect how often you say ‘um,’ ‘ah,’ ‘actually,’ or ‘basically,’ but it also gives you feedback when you are using culturally insensitive phrases like ‘you guys’ or ‘best man for the job.’

In addition to the new presentation coach, Office 365 is also getting a few other new features today. These include better inking support in PowerPoint, including the ability to replay what you drew on a slide so that you can essentially create animations that way (this is now available on Windows and Mac, with more inking support for Office on the web coming soon). Microsoft is also updating the  Microsoft Whiteboard with new templates and teachers with an Office 365 subscription can now make use of 10 new lesson plans that include 23 custom 3D models to bring those lessons to life.

Nearly everything about Netdata, makers of open source monitoring tool, defies standard thinking about startups. Consider that the founder is a polished, experienced 50-year old executive, who started his company several years ago when he became frustrated by what he was seeing in the monitoring tools space. Like any good founder, he decided to build his own, and today the company announced a $17 million Series A led by Bain Capital.

Marathon Ventures also participated in the round. The company received a $3.7 million seed round earlier this year, which was led by Marathon.

Costa Tsaousis, the company’s founder and CEO, was working as an executive for a company in Greece in 2014 when he decided he had had enough of the monitoring tools he was seeing. “At that time, I decided to do something about it myself — actually, I was pissed off by the industry. So I started writing a tool at night and on weekends to simplify monitoring significantly, and also provide a lot more insights,” Tsaousis told TechCrunch.

Mind you, he was a 45 year old executive, who hadn’t done much coding in years, but he was determined as any startup founder tends to be, and he took two years to create his monitoring tool As he tells it, he released it to open source in 2016 and it just took off. “In 2016, I released this project to the public, and it went viral, I wrote a single Reddit post, and immediately started building a huge community. It grew up about 10,000 GitHub stars in a matter of a week,” he said. Even today, he says that it gets a half million downloads every single day, and hundreds of people are contributing to the open source version of the product, relieving him of the burden of supporting the product himself.

Panos Papadopoulos, who led the investment at Marathon, says Tsaousis is not your typical early stage startup founder. “He is not following many norms. He is 50 years old, and he was a C level executive. His presentation and the depth of his thinking, and even his core materials are unlike anything else have seen in an early stage startup,” he said.

What he created was an open source monitoring tool, one that he says simplifies monitoring significantly, and also provide a lot more insights, offering hundreds of metrics as soon as you install it. He says it is also much faster, providing those insights every second, and it’s distributed, meaning Netdata doesn’t actually collect the data, just provides insights on it wherever it lives.

Live dashboard on the Netdata website.

Today, the company has 24 employees and Tsaousis has set up shop in San Francisco. In addition, to the open source version of the product, there is a SaaS version, which also has what he calls a “massively free plan.” He says the open source monitoring agent is “a gift to the world.” The SaaS tool is about democratizing monitoring, and finally, the pay version is even different from most monitoring tools, charging by the seat instead of by the amount of infrastructure you are monitoring.

Tsaousis wants no less than to lead the monitoring space eventually, and believes that the free tiers will lead the way. “I think Netdata can change the way people perceive and understand monitoring, but in order to do this, I think that offering free services in a massive way is essential, Otherwise, it will not work. So My aim is to lead monitoring. This may sound arrogant, and Netdata is not there yet, but I think it can be,” he said.

Acquia announced yesterday that Vista Equity Partners was going to buy a majority stake in the company worth a $1 billion. That would seem to be reason enough to sell the company. That’s a good amount a dough, but as co-founder and CTO Dries Buytaert told Extra Crunch, he’s also happy to be taking care of his early investors and his long-time, loyal employees who stuck by him all these years.

Vista is actually buying out early investors as part of the deal, while providing some liquidity for employee equity holders. “I feel proud that we are able to reward our employees, especially those that have been so loyal to the company and worked so hard for so many years. It makes me feel good that we can do that for our employees,” he said.

Image via TechCrunch