Category: UNCATEGORIZED

Back in June Uber went on a hiring spree in New York, hiring at least 100 fintech-oriented tech workers to ostensibly look at creating products to increase loyalty and engagement among users and drivers, including things like banking. Cue a flurry of speculation. It now looks like Uber is taking baby-steps towards building such a raft of products out, potentially by offering loans directly to drivers, according to a report from Recode/Vox.

The story is based on the emergence of an in-app survey which was sent to some drivers talking about a “new financial product” aimed at drivers “in a time of need.” The survey then went on to question drivers’ use of financing loans of $1,000 or less in the last three years. It asked “what amount are you most likely to request?” It then gave them options top pick from “Less than $100,” “Between $100 and $250,” “Between $250 and $500” and “More than $500.”

At this time there’s no indication of timing on a small loans product offering to drivers, and Uber has not publicly commented on the emergence of the survey’s existence.

However, Uber already has form in this space. It has offered cash advance programs to drivers in California and Michigan, although the company was criticised for what some called “pay-day loans”. It’s also offered leases on new cars to drivers in the past and currently offers a co-branded credit card with Visa and an Uber Cash digital wallet for riders.

Uber would not be alone in rolling out small cash loans to its workers, given given that large companies such as Walmart and others already offer lucrative payroll advances and loans to employees.

But the fact that it now has a very large FinTech team suggests this won’t the end of us hearing about Uber’s tentative moves into this space.

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I noted Peloton’s secret weapons. Before that, I wrote about a new e-commerce startup, Pietra.

The big story

In one fell swoop, Stripe may disrupt the entire financial services ecosystem.

The $22 billion payments behemoth announced Stripe Capital this week, a provider of quick and easy to obtain loans for internet businesses. The company is expected to launch a card as well, according to TechCrunch’s Ingrid Lunden. What does that mean for recent upstarts like Clearbanc, a business that provides revenue-share agreements to help startups forgo selling equity to VCs, or Brex, which has created a credit card tailored for startups? Stiff competition ahead.

Led by brothers Patrick and John Collison, Stripe is known for developing payment processing software to facilitate online purchases. Doubling down on financial services, the company seeks to become the go-to capital provider to its millions of customers. In a vacuum, it’s no threat to Brex, which has quickly become a fintech darling (with a multibillion-dollar valuation to prove it) — but coupled with Stripe’s massive network, resources and the soon-to-be-announced card, it’s worth concern.

I reached out to both Brex and Clearbanc. Here’s what they had to say.

Clearbanc: “Stripe is one of our close partners because we’re both deeply committed to empowering founders. There’s a huge demand amongst founders for flexible funding that allow them to grow while retaining equity in their company, so it’s encouraging to see the growth of alternative funding options. We’re seeing this first hand — we’re investing an average of $100,000 of growth capital per brand, with other companies taking up to $10 million. New funding alternatives not only open more doors for more businesses, but data-driven platforms can also help to reduce bias and promote entrepreneurship outside of VC capitals like Silicon Valley and New York.”

Brex CEO Henrique Dubugras: “We have created a new financial stack for tech companies, and this has resulted in a very innovative product experience with lots of adoption, so it makes sense that Stripe would also pursue this fast-growing opportunity.”

We’ll share more details on the card as soon as possible.

WeWork slashes expectations

The Wall Street Journal reported this week that the company formerly known as WeWork is considering slashing its valuation as it looks to woo public market investors. The co-working biz may hit the public markets at a valuation of somewhere in the $20 billion range for its initial public offering, a figure that’s far less than the $47 billion valuation it received when it raised its last round of private funding. Yikes…

TechCrunch Disrupt

We are just weeks away from our flagship conference, TechCrunch Disrupt San Francisco. We have dozens of amazing speakers lined up. In addition to taking in the great line-up of speakers, ticket holders can roam around Startup Alley to catch the more than 1,000 companies showcasing their products and technologies. And, of course, you’ll get the opportunity to watch the Startup Battlefield competition live. Past competitors include Dropbox, Cloudflare and Mint… You never know which future unicorn will compete next.

You can take a look at the full agenda here. Here’s a look at the panels I personally will be onstage moderating.

• Brex CEO Henrique Dubugras and Clearbanc president Michele Romanow will discuss the evolving fintech ecosystem and both startups’ ultra-fast growth.
• Slack co-founder Cal Henderson and Slack investor, Spark Capital’s Megan Quinn, will discuss the past, present and future of the now ubiquitous workplace messaging tool.
• Postmates CEO Bastian Lehmann will sit down for a one-on-one conversation on what’s next for the food delivery business.

Deals, deals, deals

• Car-sharing business Getaround is raising $200M at a unicorn valuation
• BigID announces $50M Series C
• India’s Milkbasket in talks to raise $50M
• Bellwether coffee nabs $40M in new funding
• Cooks Venture picks up $12M to rethink agriculture from the ground up
• Spirable refuels with $7.4M to serve more personalized video ads in the US
• Newly renamed Superside raises $3.5M for its outsourced design platform
• Upflow grabs $2.7M to streamline payment processes 

Listen

This week, we recorded Equity on location at TechCrunch Sessions: Enterprise in San Francisco. Our special guest was Emergence Capital founder Jason Green, who joined us to talk about the firm’s specialty: enterprise investments! Danny Crichton, the esteemed leader of TechCrunch’s Extra Crunch, was on hand to co-lead the episode with me. Listen here. And remember, Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Spotify, Pocket Casts, Downcast and all the casts.

PrimaryBid, a UK-regulated platform connecting publicly listed companies with everyday investors for discounted share issuances has previously raised $3M. It’s now upped those stakes with an $8.6M funding round, led by UK VCs Pentech and Outward VC with participation from new and existing investors. Craig Anderson, a partner at Pentech, will join the PrimaryBidBoard of Directors with Outward VC having a Board Observer seat.

This investment is representative of the trend towards unpacking complex financial investment products for the average person, especially in the UK.

The FCA-regulated platform recently made a long-term commercial agreement with Euronext, the leading pan-European exchange in the Eurozone. The partnership gives the company access to nine new geographies, with the first new site launching in France later this year.

Commenting, Anand Sambasivan, co-founder and CEO of PrimaryBid, said: “Everyday investors are a vital part of the stock market and yet unable to buy discounted share deals – a longstanding imbalance in the public markets. This is true whether it is a government selling down its holding in a large company or a quoted company is raising growth capital. Our platform addresses this challenge, giving small investors the same access as traditionally afforded to large institutional investors.”

Investors can tap into PrimaryBid’s centralizing infrastructure that allows access to everyday investors as part of a share issuance, including block sales. The inclusion of retail investors can improve pricing and liquidity outcomes for their clients. The company’s solution allows private investors to participate, at the same time and the same price, delivering open access regardless of the size of their investment. The service is free of charge for investors, from £100 upwards.

PrimaryBid doesn’t have competitors because Retail investors have not previously had access to discounted equity offerings run by investment banks. This is because the retail investment market is too fragmented, and these deals are highly time-sensitive. As a result, only clients of Investment Banks (i.e. institutional investors) could previously access these attractive deals.

So now, listed companies that want to raise more capital on the stock exchange by issuing new shares can now connect with retail investors and offer these retail investors these shares at the same discounted rates as those offered to institutional investors. “In the past, these retail investors just couldn’t access these attractive deals for these new shares,” explains Sambasivan.

Craig Anderson of Pentech said: “We believe equity capital markets infrastructure is dominated by an institutional focus and is not geared for retail investors, which unfairly restricts consumer access to the primary equity markets. PrimaryBid addresses this problem by using technology to democratize the equity capital markets to provide a new asset class to retail investors.”

Kevin Chong of Outward VC said: “By bringing publicly listed companies directly to ordinary investors, PrimaryBid addresses increasing frustrations felt by equity issuers and potentially expands global equity markets to the benefit of all players – investors, issuers and investment bank advisers.”

Pentech previously invested in Nutmeg (which recently closed a £45m funding round led by Goldman Sachs) . Outward VC has previously backed Monese, Curve and Bud.

Roku TV today represents more than 1 in 3 smart TVs sold in the U.S. Now, the company is bringing its TV licensing program to European markets. At the consumer tech show IFA in Berlin, Roku announced it will now allow manufacturers to license its TV reference designs and use its Roku OS to build smart TVs for sale in Europe. It also said Hisense would be its first European Roku TV partner.

Today, the connected TV market is no longer limited to just the dongles, sticks, and streaming media players that plug into the HDMI ports of consumers’ TV sets.

Top companies like Roku, Google and Amazon are also making their operating systems and reference designs available to TV makers themselves, in a battle to gain consumer market share. Apple has been rumored to be working on its own television set powered by tvOS, as well.

Roku, to date, done well on this front in its home market, after first introducing the Roku TV platform at the Consumer Electronics Show in 2014. Hisense was then one of its first partners on the effort. Fast-forward to 2019, and there are now over 100 models available from over 10 brands in North America, and the company estimates that Roku TV is now the No. 1 selling smart TV OS in the U.S.

Roku isn’t alone in targeting Europe with its TV platform. Amazon this week announced more than 20 new Fire TV devices, 15 of which were TVs licensing its Fire OS. Many of these were also aimed at European consumers through partnerships with local brands and retailers.

The new Hisense Roku TV models will support 4K Ultra HD resolutions and HDR, and will come in sizes ranging up to 65 inches, Roku says. The models will launch in the U.K. in the fourth quarter.

“While consumers love Roku TV’s simplicity and advance features, TV manufacturers benefit from the low manufacturing cost, a variety of technology options, and support from Roku,” said Roku CEO and Founder Anthony Wood, in a statement. “The ability to quickly bring to market a leading smart TV experience that is regularly updated by Roku and is packed with entertainment gives TV manufacturers an edge in the competitive TV business. We are pleased to bring the Roku TV licensing program to Europe and look forward to the first Hisense Roku TVs in market this year,” he said.

India’s attempt to become the first nation to soft land a robotic spacecraft at the moon’s South Pole, an unexplored region, has ended in failure, the space agency said Saturday.

Less than two miles above the lunar surface, the Vikram lander (named after Vikram Sarabhai, the father of India’s space program) lost communications with the mission control.

A live broadcast from ISRO, India’s equivalent of NASA, showed scientists grow tense as the control station struggled to get a signal from the lander.

India’s Prime Minister Narendra Modi, who was watching the landing attempt, offered words of encouragement to the scientists and children, who had accompanied him at the ISRO campus.

“Be courageous. Our faith in ISRO has not lost. I can proudly say that the effort was worth it and so was the journey. We are full of confidence that when it comes to our space program, the best is yet to come,” he said.

Space is hard. The lunar surface is filled with debris of spacecrafts that have attempted and failed to land in one piece. Because there is little to no atmosphere on the moon, parachutes can’t be used, leaving landers to rely completely on thrusters to modulate the speed.

Chandrayaan-2, a roughly $140 million mission, is, in part, intended to study moon craters that are believed to contain water deposits, something Chandrayaan-1 found in 2008.

A successful touchdown would have made India the fourth country to successfully complete a soft landing on the lunar surface. So far, only the former Soviet Union, the U.S., and China have accomplished it.

Photo by Pallava Bagla/Corbis via Getty Images

The 142-foot tall spacecraft that blasted off Satish Dhawan Space Centre, Sriharikota in Andhra Pradesh on July 15, carried an orbiter, a lunar lander, and a six-wheeled rover. The lander and rover were expected to operate for just a couple of weeks, but the orbiter, which detached from the lander earlier this week, will continue to operate for at least one year.

ISRO has come a long way and specialized in low-cost space launches since the early 1960s, when components of rockets were transported by bicycles and assembled by hand in the country.

In 2013, ISRO also launched an orbiter to Mars in its maiden $74 million interplanetary mission — a fraction of the $671 million NASA spent for a Mars mission in the same year. In 2017, ISRO also deployed a record 104 satellites into space in just 18 minutes.

Earlier this year, ISRO said it intends to have its own space station in the future and conduct separate missions to study the Sun and Venus. It will begin working on its space station following its first manned mission to space, called Gaganyaan (which means “space vehicle” in Sanskrit), in 2022 — just in time to commemorate 75 years of the country’s independence from Britain. The government has sanctioned Rs 10,000 crores ($1.5 billion) for the Gaganyaan mission.

Vape lung is spreading and the CDC is warning people not to use vaping products while they are investigating the cause. In a media briefing, the public health agency said that some 450 people are now thought to be affected, and as many as five have died.

The CDC’s incident manager for this issue, Dana Meaney Delman, summed up the situation as follows:

CDC, states, and other partners are actively investigating, but so far, no definitive cause has been established. No specific e-cigarette device or substance has been linked to all cases, and e-cigarette include a variety of chemical and additives; consumers may not know what these products contain.

Based on the clinical and laboratory evidence to date, we believe that a chemical exposure is likely associated with these illnesses. However, and I really want to stress this, more information is needed to determine which specific products or substances are involved

Reports earlier this week suggested that Vitamin E acetate, a byproduct of the vitamin complex formed during the vaporization process, may be to blame. Delman downplayed this, saying that although they are working with the labs that made that connection, nothing has been established as yet.

One trend worth noting, however, is that very few of the cases involve only nicotine products; Most of the afflicted users reported using THC exclusively or as well as nicotine. This could be the result of many factors, however, so take it with a grain of salt.

The first death was reported in late August in Indiana, but other suspected cases have turned fatal in Illinois, Minnesota, California, and Oregon — as reported by the Washington Post, though the CDC said three are confirmed and one is under investigation. The number of reported cases has skyrocketed, though this is likely a consequence of better information coming from state health authorities and hospitals, rather than a sudden epidemic.

In the meantime the only advice they have is to avoid e-cigarette and vape device usage, especially modified devices or homebrew material. The fact is no one really knows what chemicals are formed in the conditions created by these devices and some of them could be toxic.

While the investigation is ongoing, CDC has advised that individuals consider not using e-cigarettes because as of now, this is the primary means of preventing this type of severe lung disease. And of course e-cigarette use is never safe for youth, young adults, or pregnant women.

People who do use e-cigarette products should monitor themselves for symptoms (e.g., cough, shortness of breath, chest pain, nausea, vomiting, or others) and promptly seek medical attention for any health concerns. Regardless of the ongoing investigation, people who use e-cigarette products should not buy these products off the street and should not modify e-cigarette products or add any substances that are not intended by the manufacturer.

The CDC is working with numerous state authorities and the FDA to identify the cause of this malady, and will soon publish a report in the New England Journal of Medicine detailing the first 53 cases identified. This should help doctors and other health workers tell if they are dealing with a case of vape lung or something else.

Daniel Fox from WakeMed Hospitals in North Carolina characterized the condition as they had encountered it, with a preliminary diagnosis of “lipoid pneumonia”:

What we wanted to report and what we have seen has been a cluster of five cases that will be reported later today. Each of these cases featured a pulmonary illness in a relatively young person. Ranging in age from 18-35 from what we saw here in North Carolina. The symptoms that these patients were experiencing were being short of breath, having some GI or gastrointestinal symptoms of nausea and vomiting and fevers.

One of the things that was found in common with all of these cases is that all patients were using vaped substances in e-cigarettes. They all had abnormal chest x-rays and developed a need for a lot of oxygen.

All of our patients underwent evaluation, and after the clinical evaluation we found a certain type of pneumonia that was noninfectious. It’s called lipoid pneumonia. Basically, can be, it can occur when either oils or lipid-containing substances enter the lungs.

That is consistent with the Vitamin E acetate hypothesis, as that substance is oily and could enter the lungs mixed with the vapor and then stay there. But none of the doctors or experts on the call made that connection officially.

Some patients are being misdiagnosed as having bronchitis or a viral infection. If you are or anyone you know is getting sick and uses vaping products a lot, it’s worth mentioning this if you get checked out.

Delman concluded her briefing with an assurance that everything that can be done is being done:

Please know that CDC, FDA, state, and clinical partners are working hard to understand why people are getting sick. We will continue to share what we know and what we don’t know to help health departments, clinicians, and the public respond to this outbreak.

If you are concerned about your health or the health of a loved one who is using an e-cigarette product, contact your health care provider, or your local poison control center at 1-800-222-1222.

Streaming music subscriptions continue to drive the U.S. music industry’s growth and revenues, according to a new report from the Recording Industry Association of America (RIAA) released this week. The organization said total music revenue grew 18% to $5.4 billion in the first half of 2019, with streaming music accounting for 80% of industry revenues. The report also noted the number of paid subscriptions topped 60 million in the U.S. for the first time.

Streaming revenues grew 26% to $4.3 billion in the first half of the year.

This broad figure includes paid versions of Spotify, Apple Music, Amazon Music, and others, as well as digital radio service revenues like those from Pandora, Sirius XM, and other internet radio, plus ad-supported streaming like YouTube, Vevo, and the ad-supported version of Spotify.

Meanwhile, paid subscription streaming is continuing to grow, too, said the RIAA. Year-over-year, paid subscriptions grew 31% to reach $3.3 billion and remain the biggest growth driver for industry revenues.

In the first half of 2019, paid subscriptions made up 62% of all U.S. industry revenues and 77% of U.S. streaming music revenues.

The number of paid subscriptions to full on-demand streaming services grew 30% to 61.1 million in the first half of the year, at an average pace of over 1 million new subscriptions per month.

This doesn’t include the “Limited Tier” subscriptions like Pandora Plus or that Echo-only subscription to Amazon Music, for example, where various factors limit access to a full catalog across devices or restrict some on-demand features. This category saw $482 million in revenues, up 39% from the year prior.

“Thanks to that breakneck growth, plus continued modest drops in digital downloads and new physical sales, streaming now generates 80% of music business revenues and has fundamentally reshaped how fans find, share, and listen to the songs and artists they love,” wrote RIAA Chairman & CEO Mitch Glazier, about the new figures.

Ad-supported on-demand services grew 25% year-over-year to $427 million, while digital radio service grew 5% to $552 million in the first half of 2019.

However, the gains made by streaming were somewhat offset by declines in digital downloads, as Glazier noted.

Revenues in this category fell 18% to $462 million in the first half of the year, with digital track sales down 16% year-over-year and digital album revenues down 23%. Overall, digital download only accounted for 8.6% of total industry revenues.

Physical product revenues grew 5% to $485 million in the first half of 2019, but the RIAA attributed this to a reduction in returns.

It’s a big day for India’s highly audacious Chandrayaan-2 mission. The nation will attempt to land its lunar orbit on the moon’s surface later today as it inches closer to become the fourth in the world to complete a successful lunar landing.
ISRO, India’s equivalent of NASA, will be live streaming the landing on its website, and YouTube channel.

Additionally, if you are tuning in from India, dozens of channels including Doordarshan (DD1), Disney India, National Geographic, Star Plus and Star Bharat, DD News, will live telecast the India’s mission to the moon. The landing is scheduled for between 1pm and 2pm Pacific Time (4pm to 5pm Eastern Time; 8pm to 9pm GMT).

ISRO launched its 142 feet tall spacecraft from the the Satish Dhawan Space Centre, Sriharikota in Andhra Pradesh on July 15. The spacecraft consists of an orbiter, a lander named Vikram (named after Vikram Sarabhai, the father of India’s space program), and a six-wheeled rover named Pragyaan (Sanskrit for “wisdom”). Earlier this week, the lander that carried the rover detached from the orbiter.

The mission’s budget is just $141 million, significantly lower than those of other countries, and less than half of the recently released blockbuster “Avengers: Endgame .”

Commenting on the landing, India’s Prime Minister Narendra Modi, who will be watching the nation’s attempt at the moon landing from ISRO’s office, said earlier today that, “India, and the rest of the world will yet again see the exemplary prowess of our space scientists.”

Chandrayaan-2 aims to land on a plain surface that covers the ground between two of the Moon’s craters, Simpelius N and Manzinus C — that is about 375 miles from the South Pole. It’s an understudied region that no one has seen closely yet.

NASA astronaut Jerry Linenger, said in a televised program today, “I just want everyone to know that the whole world is following this and it is not just Indians. This is the first time any country is going to the South Pole of the Moon! India is leading this and as a representative of the US, we are nervous and we are hoping for success. This increases the knowledge base of the Moon.”

Porsche AG is increasing its stake in Croatian electric vehicle components and hypercar company Rimac Automobili. The increased stake is the latest effort by Porsche to invest more into electric mobility, particularly in battery technology.

It was just 14 months ago that Porsche took a 10% stake in Rimac. Now, the German automaker is pushing that to 15.5%, according to an announcement Friday.

Porsche intends to intensify its collaboration in the field of battery technology, Lutz Meschke, deputy chairman of Porsche’s executive board. Porsche, which just introduced its all-electric Taycan sports car, has said it will invest more than $6 billion into electric mobility through 2025. The automaker spent more than $1 billion developing the Taycan, a cost that included expanding its factory.

For the unfamiliar, Rimac was founded by Mate Rimac in 2009 and is perhaps best known for its electric hypercars such as the two-seater C Two that it debuted in 2018 at the Geneva International Motor Show.

The vehicle produces an extraordinary 1,914 horsepower, has a top speed of 256 miles per hour and can accelerate from 0 to 60 mph in 1.85 seconds. That’s faster than Tesla’s next-generation Roadster prototype that CEO Elon Musk unveiled in November 2017. The Rimac’s battery is no slouch either and gets 404 miles to a single charge under the more generous NEDC estimates. Still, that blows away other EVs on the market. 

But Rimac, which is based in Zagreb and employs around 550 people, does more than produce hypercars. The company focuses on battery technology within the high-voltage segment, engineers and manufactures electric powertrains and develops digital interfaces between humans and machines. The company also develops and produces electric bikes. This strand of the business was established in 2013 in the form of the sister company Greyp Bikes.

“Gaining Porsche as a stakeholder was one of the most important milestones in our history. The fact that Porsche is now increasing its stake is the best form of confirmation for our collaboration and represents the foundation for an even closer relationship,” Mate Rimac, the company’s founder said in a statement. “We are only at the start of our partnership – yet we have already met our high expectations. We have many collaborative ideas that we aim to bring to life in the future. The fundamental focus is creating a win-win situation for both partners and offering our end customers added value by developing exciting, electrified models.”

Porsche isn’t the only automaker interested in Rimac. The company has already worked with Renault, Jaguar, and Aston Martin. And in May 2019, Hyundai Motor Company and Kia Motors jointly invested €80 million, or around $90 million, into Rimac. Under that deal, the three parties agreed  to collaborate on the development of high-performance electric vehicles.

Pagerduty‘s CEO Jennifer Tejada and Box co-founder and CEO Aaron Levie both guided their companies to successful IPOs, with Box going public in 2015 and Pagerduty listing its stocks only a few months ago. Both of them will join us on the first day of TechCrunch Disrupt SF on October 2 to talk about their experiences in getting their companies to this point and managing the changes that come with being a public company.

It took both companies about ten years to get to their IPOs. Levie co-founded the content management and file sharing service Box in 2005 and Pagerduty first launched as a basic notification tool for on-call developers in 2009, with Tejada joining as CEO in 2016. Box has already experienced its share of ups and down in the stock market and Pagerduty’s IPO in April launched its stock right into one of the more volatile markets in recent years.

At Disrupt, though, we’ll focus on what these two CEOs did to get their companies ready to go public and the process of listing a company — and what, in hindsight, they would’ve done differently.

Box’s road, especially, was rather long and winding. It took the company nine months from filing its S-1 to actually IPOing — in part because the reaction to the numbers it disclosed in its S-1 was pretty negative at the time.

Pagerduty, on the other hand, had a more straightforward path, in part thanks to its strong financial position before it filed.

Disrupt SF runs October 2 to October 4 at the Moscone Center in the heart of San Francisco. Tickets are available here.