Category: UNCATEGORIZED

Apple rolled out major updates to main consumer services today, including a new Apple credit card, an ad-free TV subscription service, a paywalled version of News (that includes Extra Crunch), and a gaming platform upgrade.

TechCrunch Editor-In-Chief Matthew Panzarino attended live to hear the latest, and I can tell you that he has already developed some strong opinions…. Tomorrow at 10:30 am PT, Extra Crunch members will get to hear first-hand from him about the ins and outs of the company’s latest media offerings.

Tune in to listen to the details about what happened onstage and off, as well as the opportunity to ask Matthew anything Apple.

To listen to this and all future conference calls, become a member of Extra Crunch. Learn more and try it for free. 

McDonald’s is announcing an agreement to acquire personalization company Dynamic Yield.

The announcement does not include a price, but a source with knowledge of the deal said that it’s more than $300 million.

Dynamic Yield works with brands across e-commerce, travel, finance and media to create what’s been described as an Amazon-style personalized experience.

McDonald’s said it will use this technology to create a drive-thru menu that can be tailored to things like the weather, current restaurant traffic and trending menu items. Once you’ve started ordering, the display can also recommend additional items based on what you’ve already chosen.

In fact, the fast food giant said it has been testing this out in several U.S. locations in 2018. The plan is to start rolling this out across the United States in 2019, and then to move into international markets. The company also plans to integrate this technology into other digital products, like self-serve kiosks and the McDonald’s mobile app.

“Technology is a critical element of our Velocity Growth Plan, enhancing the experience for our customers by providing greater convenience on their terms,” said McDonald’s President and CEO Steve Easterbrook in a statement. “With this acquisition, we’re expanding both our ability to increase the role technology and data will play in our future and the speed with which we’ll be able to implement our vision of creating more personalised experiences for our customers.”

At the same time, McDonald’s said Dynamic Yield will continue to operate as a standalone company serving existing and future clients, that it will continue to invest in the core personalization technology.

According to Crunchbase, Dynamic Yield has raised a total of $83.3 million from investors including Innovation Endeavors, Bessemer Venture Partners, Marker Capital, as well as strategic investors like Naver (which owns the messaging apps Line and Snow), Baidu, The New York Times and Deutsche Telekom.

Updating

Deep Science AI made its debut on stage at Disrupt NY 2017, showing in a live demo how its computer vision system could spot a gun or mask in CCTV footage, potentially alerting a store or security provider to an imminent crime. The company has now been acquired in a friendly merger with Defendry, which is looking to deploy the tech more widely.

It’s a great example of a tech-focused company looking to get into the market, and a market-focused company looking for the right tech.

The idea was that if you have a chain of 20 stores, and 3 cameras at each store, and people can only reliably keep an eye on 8-10 feeds at a time, you’re looking at a significant personnel investment just to make sure those cameras aren’t pointless. If instead you used Deep Science AI’s middle layer that highlighted shady situations like guns drawn, one person could conceivably keep an eye on hundreds of feeds. It was a good pitch, though they didn’t take the cup that year.

“The TechCrunch battlefield was a great launching off point as far as getting our name and capabilities out there,” said Deep Science AI co-founder Sean Huver in an interview (thanks for the plug, Sean). “We had some really large names in the retail space request pilots. But we quickly discovered that there wasn’t enough in the infrastructure as far as what actually happens next.”

That is to say, things like automated security dispatch, integration with private company servers and hardware, that sort of thing.

“You really need to build the monitoring around the AI technology rather than the other way around,” Huver admitted.

Meanwhile, Pat Sullivan at Defendry was working on establishing automated workflows for internet of things devices — from adjusting the A/C if the temperature exceeds certain bounds to, Sullivan realized at some point, notifying a company of serious problems like robberies and fires.

“One of the most significant alerts that could take place is someone has a gun and is doing something bad,” he said. “why can’t our workflows kick off an active response to that alert, with notifications and tasks, etc? That led me to search for a weapons and dangerous situations dataset, which led me to Sean.”

Although the company was still only in prototype phase when it was on stage, the success of its live demo with a team member setting off an alert in a live feed (gutsy to attempt this) indicated that it was actually functional — unlike, as Sullivan discovered, many other companies advertising the same thing.

“Everyone said they had the goods, but when you evaluated, they really didn’t,” he opined. “Almost all of them wanted to build it for us — for a million dollars. But when we came across Deep Science we were thrilled to see that they actually could do what they said they could do.”

Ideally, he went on to suggest, the system could be not just an indicator of crimes in progress but crimes about to begin: a person donning a mask or pulling out a gun in a parking lot could trigger exterior doors to lock, for instance. And when a human checks in, either the police could be on their way before the person reaches the entrance, or it could be a false positive and the door could be unlocked before anyone even noticed anything had happened.

Now, one part of the equation that’s mercifully not necessarily relevant here is that of bias in computer vision algorithms. We’ve seen how women and people of color — to start — are disproportionately affected by error, misidentification, and so on. I asked Huver and Sullivan if these issues were something they had to accommodate.

Luckily this tech doesn’t rely on facial analysis or anything like that, they explained.

“We’re really stepping around that issue because we’re focusing on very distinct objects,” said Huver. “There’s behavior and motion analysis, but the accuracy rates just aren’t there to perform at scale for what we need.”

“We’re not keeping a list of criminals or terrorists and trying to match their face to the list,” added Sullivan.

The two companies talked licensing but ultimately decided they’d work best as a single organization, and just a couple weeks ago finalized the paperwork. They declined to detail the financials, which is understandable given the hysteria around AI startups and valuations.

They’re working together with Avinet, a security hardware provider that will essentially be the preferred vendor for setups put together by the Defendry team for clients and has invested an undisclosed amount in the partnership. We’ll be following the progress of this Battlefield success story closely.

The Game Developers Conference was held last week in San Francisco and we wanted to get together to discuss what we saw at the show for Extra Crunch members.

VR, gaming engines, Unity, Unreal and Epic were just some of the topics we touched upon. But perhaps the biggest of all was Google’s new game-streaming service Stadia. Lucas had the opportunity to play with Stadia in a room at the Four Seasons and was a little underwhelmed at first.

I was playing it on a hotel TV hooked up to a laptop and I think I was connecting to a data center in San Jose which was about 50 miles away, which is definitely on the low end if they are rolling it out across the entire United States. But, when I started, the demo was a little like — I think they just had the system on for a couple of hours when I tried it and immediately it was awful. There were so many problems with it. And I was playing Doom 2016 and was just like clicking the trigger, and then a half second later it was firing a shot.

And I could just see over my shoulder just all of these, the Google execs and then the PR people, they were just like kind of making low chit chat like, “Oh shit.” Then one of these guys just grabs the controller from me and is like, “Yeah it kind of seems like we’re having some issues, we’re just going to restart the system.”

While Google Stadia was the big talk of the week, Eric had a chance to learn more about Unity and Unreal offerings, both of which unveiled a number of new features for developers, as well as their expansion into spaces beyond gaming.

For access to the full transcription and the call audio, and for the opportunity to participate in future conference calls, become a member of Extra Crunch. Learn more and try it for free. 

Australia-based Airwallex is the tech startup to enter the billion-dollar ‘unicorn club.’ The company announced today that it has closed a $100 million Series C round that values its business above $1 billion.

Started in Melbourne in 2015 by four Chinese founders, Airwallex provides a service that lets companies manage cross-border revenue and financing in their business much like consumer service TransferWise.

Its customers can, for example, set up overseas bank accounts if they have paying customers overseas. When they want to move that revenue back to their HQ, they simply do so through the Airwallex system which uses inter-bank exchanges to trade forex at a mid-market rate. That’s something that can save its clients as much as 90 percent on their foreign exchange rates, and it massively simplifies the challenge of doing business overseas.

This new round of funding is led by DST Global — the high profile investors that’s backed the likes of Facebook, Twitter, Spotify, Xiaomi and more — with participation from returning investors that include Sequoia China, Tencent, Hillhouse Capital, Gobi Partners, Horizons Ventures and Australia’s SquarePeg Capital. Airwallex has now raised over $200 million; its previous investment was an $80 million raise around nine months ago.

Most impressively, the company has become a unicorn within three years of its launch — that’s an impressive feat, the company has come a long way since we wrote about its $3 million seed round in late 2016. CEO Jack Zhang told TechCrunch that the company is being public with its valuation for the first time because it provides a major validation that will help it build a reputation and develop additional services in the financial services space.

“We talked to a number of global funds we found interesting but we picked DST because our biggest priority is international expansion and [the firm will] help us opening doors and going after larger opportunities,” Zhang said of the lead investor for the round.

Indeed, the Airwallex vision has grown since that seed round. Today the company, which has eight offices worldwide and over 260 staff, has expanded its focus in terms of both customers and services.

“Traditionally, we served a lot of the internet companies, but now we are saying that it doesn’t matter about size,” Zhang said. “We want to go after small companies and help all businesses to grow and expand globally.”

On the product side, he added that “the vision has evolved and now we’re building a fundamental global finance infrastructure.”

What does that mean exactly? Well, Zhang said Airwallex wants to be more than just a cross-border partner for companies. It already offers services like virtual bank accounts in 50 countries, it plugs in to partners to offer other financial services and its planned future products include credit card issuance to allow companies to manage money overseas with greater granular control.

Indeed, already Airwallex has an internal team nicknamed ‘Alpha/ that helps SMEs and other businesses to grow overseas, while Zhang said it has made undisclosed investments in companies where it sees an aligned ‘global’ vision.

“Alpha identifies early-stage companies and helps them to grow,” Zhang explained. “Whether they work with us or not we don’t care, we help connect them to investors and networks.”

The idea for the business came to Zhang, who spent time at Australia banks ANZ and NAB, after he grew frustrated of the challenges of importing overseas goods for a coffee business that he invested in with friends.

“We were importing from overseas and paying Western Union a bunch of money,” he recalls. “It was all very slow.”

Airwallex has fixed that problem for any would-be international-minded coffee shop owners/investors, but Zhang is convinced that the future of his business is to be an ecosystem for global banking and financial services. Precisely what that might mean in the future isn’t clear. But looking at companies that work closely with business customers, Airwallex is ideally placed to offer loans and financing, either directly or via partners, and really involve itself in growing its customers and their businesses.

Having started focused on Asia — and China in particular — Zhang is gunning for global growth, and that really means the U.S. and U.K and growing beyond Airwallex’s offices in London and San Francisco. The company is looking to kickstart that push through acquisitions, with Zhang admitting his team is “actively seeking interesting payment startups in the U.K and the U.S.”

Airwallex is also casting its eye on banking licenses in selected markets, which could mean it returns to raise additional capital at the end of this year or the startup of 2020.

In 1999, Mike Lincoln co-founded the first East Coast office of top Silicon Valley law firm Cooley LLP. Over the last two decades, he has built out the practice to extend well beyond the region, today covering Boston and New York too, while also heading up the firm’s business department, and serving as an adjunct professor at the University of Virginia.

Along the way, he has collected an impassioned group of founder clients, more than two dozen of whom had a lot to tell us about how he has helped them.

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On being a startup lawyer:

“[I]f you really believe you can make dreams happen and that you can help create jobs and you can help cure disease and other things that startups do, then your practice will flourish and the money will follow because people will see it in your eyes. They’ll see that you’re passionate about helping to grow a company, helping to solve real world problems, helping to create jobs…. You should not do this because you are trying to figure out a way to make millions of dollars. You do it just like entrepreneurs do it with, passion and commitment and a higher calling to try in your own small way to change the world.”

On his approach:

“Early on, I think it is being part of a firm that values the time spent going out to scout for new companies. And then once you’ve found them, I think that the key role — to use another metaphor — is to be a good Sherpa. A startup lawyer is climbing the mountain with the entrepreneur and there are lots of paths up the mountain and knowing which path to take on which day is the role that I think a good startup lawyer plays which is not really pure legal advice.”

On the DC-area tech scene:

“There is a rich talent pool here of people often coming out of government or three-letter agencies that start companies grounded in cybersecurity and national defense. So for example, we just did the Tenable IPO here in the DC market. That would be an example of a local company that I work with that was born out of that sort of DNA. And then another example of that would be a company like Netwitness which I worked with from early on which and which sold to EMC. Yet another of a strong company in this sector is Mandiant which we helped to sell to FireEye for $1.3 billion.”

Below, you’ll find founder recommendations, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey and our own research. The survey is open indefinitely so please fill it out if you haven’t already. If you’re trying to navigate the early-stage legal landmines, be sure to check out our growing set of in-depth articles, like this checklist of what you need to get done on the corporate side in your first years as a company.

 

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The Interview

Eric Eldon: I’d love to hear more about your background and how you got into startup law.

Mike Lincoln: Out of law school, I clerked for a federal appellate court judge in Chicago and then I went to Latham & Watkins in DC. I have always been drawn to entrepreneurship and startups. I started a few very small companies myself in high school and after college and so had a bit of the entrepreneurial bug. After more of a Wall Street type of practice at Latham, I saw what was going on in the Washington DC market in the 90s. Venture capital was starting to flow in to the market and companies like AOL were going public and I said to myself, “That’s what I want to do. I want to go work with startups and emerging companies and venture backed companies.” And so I set out to go do just that.

After talking to a few Silicon Valley based law firms, we ended up deciding to go with Cooley. So Joe Conroy and I launched the office 1999 in Reston, Virginia and that was really the first Silicon Valley firm to make the move East. For the next decade after that, we were heads down building a practice and a brand up and down the East coast. My co-founder Joe Conroy is now the CEO of Cooley and I am now head of the business department. Even though I live in the DC area, I spend a great deal of time in Palo Alto because that’s where we’re headquartered and I have spent a lot of time in more recent years helping to launch our offices in New York, Boston, London, Los Angeles, Brussels and other places. But despite my travel schedule and my firm duties, I still do exactly what I have always done and that is to work with interesting entrepreneurs and startups every day of the week. That’s what I love to do.

While creating self-driving car systems, it’s natural that different companies might independently arrive at similar methods or results — but the similarities in a recent “first of its kind” Nvidia proposal to work done by Mobileye two years ago were just too much for the latter company’s CEO to take politely.

Amnon Shashua, in a blog post on parent company Intel’s news feed cheekily titled “Innovation Requires Originality, openly mocks Nvidia’s “Safety Force Field,” pointing out innumerable similarities to Mobileye’s “Responsibility Sensitive Safety” paper from 2017.

He writes:

It is clear Nvidia’s leaders have continued their pattern of imitation as their so-called “first-of-its-kind” safety concept is a close replica of the RSS model we published nearly two years ago. In our opinion, SFF is simply an inferior version of RSS dressed in green and black. To the extent there is any innovation there, it appears to be primarily of the linguistic variety.

Now, it’s worth considering the idea that the approach both seem to take is, like many in the automotive and autonomous fields and others, simply inevitable. Car makers don’t go around accusing each other of using the similar setup of four wheels and two pedals. It’s partly for this reason, and partly because the safety model works better the more cars follow it, that when Mobileye published its RSS paper, it did so publicly and invited the industry to collaborate.

Many did, and as Shashua points out, including Nvidia, at least for a short time in 2018, after which Nvidia pulled out of collaboration talks. To do so and then, a year afterwards, propose a system that is, if not identical, then at least remarkably similar, and without crediting or mentioning Mobileye is suspicious to say the least.

The (highly simplified) foundation of both is calculating a set of standard actions corresponding to laws and human behavior that plan safe maneuvers based on the car’s own physical parameters and those of nearby objects and actors. But the similarities extend beyond these basics, Shashua writes (emphasis his):

RSS defines a safe longitudinal and a safe lateral distance around the vehicle. When those safe distances are compromised, we say that the vehicle is in a Dangerous Situation and must perform a Proper Response. The specific moment when the vehicle must perform the Proper Response is called the Danger Threshold.

SFF defines identical concepts with slightly modified terminology. Safe longitudinal distance is instead called “the SFF in One Dimension;” safe lateral distance is described as “the SFF in Higher Dimensions.”  Instead of Proper Response, SFF uses “Safety Procedure.” Instead of Dangerous Situation, SFF replaces it with “Unsafe Situation.” And, just to be complete, SFF also recognizes the existence of a Danger Threshold, instead calling it a “Critical Moment.”

This is followed by numerous other close parallels, and just when you think it’s done, he includes a whole separate document (PDF) showing dozens of other cases where Nvidia seems (it’s hard to tell in some cases if you’re not closely familiar with the subject matter) to have followed Mobileye and RSS’s example over and over again.

Theoretical work like this isn’t really patentable, and patenting wouldn’t be wise anyway, since widespread adoption of the basic ideas is the most desirable outcome (as both papers emphasize). But it’s common for one R&D group to push in one direction and have others refine or create counter-approaches.

You see it in computer vision, where for example Google boffins may publish their early and interesting work, which is picked up by FAIR or Uber and improved or added to in another paper 8 months later. So it really would have been fine for Nvidia to publicly say “Mobileye proposed some stuff, that’s great but here’s our superior approach.”

Instead there is no mention of RSS at all, which is strange considering their similarity, and the only citation in the SFF whitepaper is “The Safety Force Field, Nvidia, 2017,” in which, we are informed on the very first line, “the precise math is detailed.”

Just one problem: This paper doesn’t seem to exist anywhere. It certainly was never published publicly in any journal or blog post by the company. It has no DOI number and doesn’t show up in any searches or article archives. This appears to be the first time anyone has ever cited it.

It’s not required for rival companies to be civil with each other all the time, but in the research world this will almost certainly be considered poor form by Nvidia, and that can have knock-on effects when it comes to recruiting and overall credibility.

I’ve contacted Nvidia for comment (and to ask for a copy of this mysterious paper). I’ll update this post if I hear back.

Even after last week’s stream of hardware releases — a new iPad, new iMacs, and new AirPods all back-to-back — Apple had more to announce.

The company announced a bunch of new stuff at a two hour event this morning, primarily focusing on its new premium media subscriptions. Don’t have time to catch up on all of it? Here are the highlights:

AppleTV+: Apple is building an ad-free subscription video service. It announced a ton of new original content from names like Oprah, Steve Carell, JJ Abrams, Steven Spielberg, Jason Momoa, Kumail Nanjiani, and many, many more. You’ll also be able to use the app to subscribe to and view other add-on services, like HBO, Showtime, Stars, and CBS All Access. The new Apple TV app will work with iOS, macOS, and smart TVs (Samsung first, then Sony, LG, and Vizio) along with Roku’s hardware and Amazon’s Fire TV. No pricing details were revealed.

Apple News+: Apple News is getting an overhaul, including a new subscription service called Apple News+. For $10 per month, you’ll get access to 300+ magazines (current and past issues) and digital subscriptions, including People, Vogue, Wall Street Journal, Rolling Stone, and Wired. Oh, and TechCrunch’s Extra Crunch!

Apple Arcade: An ad-free, all-you-can-eat gaming service for games on iOS, macOS, and tvOS. Apple says it’ll have 100+ games at launch, with titles from the likes of Disney, Konami, and LEGO. All games will be playable offline. It launches this fall in 150 regions, but Apple didn’t say how much it’ll cost.

The Apple Credit Card: Apple is making a credit card. It’ll exist as a virtual card and as a physical titanium card. The physical card has no number printed on it — nor a CVV, expiration date, or signature. If a merchant needs that info, you’ll be able to pull it up in the Wallet app. It generates one-time use, dynamic security codes, which TC’s Zack Whittaker points out should make it a lot harder to steal. Customer service is handled via in-app text messaging. It’ll be available this summer.

Transit in US cities: Later this year, Apple Pay will work on transit systems in a few major US cities, beginning with Portland, Chicago, and New York.

On the heels of Apple announcing paid, monthly subscription services for video, games, and news, YouTube says it is also doubling down original video content. Parent company Google has denied a report in Bloomberg that YouTube has stopped accepting pitches for scripted shows. But it also confirmed another aspect of the same report: it plans a big focus on paid subscriptions by introducing an ad-supported slate that will include new and existing series in the coming weeks.

It seems that for now the plan is for this to exist alongside YouTube Premium, its $11.99 ad-free subscription service that provides access to YouTube Music and original video content and films, which is not going away. Reports about YouTube’s changing content monetization strategy, moving content out from behind the paywall, have been going around for months.

We’ve also been able to confirm that part of the shift will indeed include cancelling two existing shows, Origin and Overthinking with Kate & June, which will not be on the new slate — one of the other details reported by Bloomberg.

The move signifies that Google is rethinking how it competes in the world of streamed video as the landscape gets increasingly crowded with a selection of options from which to choose. That’s happening not on one but two levels.

Many of the biggest existing services, as well as those that are now coming online, are putting millions into commissioning original movies and series. Netflix alone is estimated to be putting some $15 billion into its own slate this year. In other words the ante is very high for snagging big names and then investing in the production of films and series with them, and with competition the prices are getting higher.

Interestingly, $15 billion is also how much in advertising revenues that YouTube generated last year, and that is the second area where YouTube is changing up how it is planning to compete. With a number of companies now vying for for a share of your entertainment budget with monthly subscription fees or one-off payments for specific items, YouTube is exploring a no-fee approach, playing to its strengths and offering its original TV content not as part of subscriptions but as an ad-supported free service.

One of the notable aspects of building original content plays for streaming services is that it means the provider sidesteps some of the more tricky, expensive and time-consuming aspects of negotiating regional deals with rightsholders. YouTube appears to be hoping to tackle this as well, from what we understand, by developing new series and formats that will appeal (and be accessible by) a global audience.

Before people ever use or buy your product, they’ll interact with your brand. What does your company stand for? How is your product different? Branding is an often overlooked, but essential component of communicating your company’s values, connecting with potential customers, and ultimately, driving conversions.  

But finding the right brand designer is hard. Depending on your budget, industry, and scope, brand designer and brand agency services can vary widely. It’s a niche community, and brand designers who thrive in chaotic, fast-paced startup environments are rare.

We’re demystifying the world of brand design by covering how companies like Intercom approach their brand identity and asking founders, like you, to nominate a talented brand designer or agency they’ve collaborated with. We’ll be publishing more branding articles, guest posts by industry experts, and brand designer profiles in the weeks to come, but we need your help. We’re relying on your recommendations to identify which brand designer and agencies to feature.

We’re especially looking for people who have experience in these three categories:

• Visual brand identity: Conveying a startup’s core values through its logo, colors, typography, graphics, and other visual elements
• UX/UI design: Designing how a company’s brand is expressed through user experience and user interface elements, such as colors, shapes, fonts, illustrations, and icons.
• Brand narrative and strategy: Developing a startup’s story and a plan for how it is internally and externally communicated

We’re also interested in understanding how much time you’ve worked with a designer or agency, whether you’d recommend them to a friend, and examples of their work

Brand design is just one of our latest initiatives to identify the best service providers for startups. As we develop a shortlist of the top brand designer and agencies in the world, we’ll be asking them about their design philosophy, brand development process, rates and fees, and more. We’ll publish their profiles (along with your recommendations) on ExtraCrunch.  

We’ll continue updating our database of brand designers on a rolling basis, but in the meantime, help us share this article and nominate a brand designer or agency you know and love.

Any thoughts or questions? Email us at ec_editors@techcrunch.com.