Category: UNCATEGORIZED

Facebook’s self-regulatory ‘Oversight Board’ (FOB) has delivered its first batch of decisions on contested content moderation decisions almost two months after picking its first cases.

A long time in the making, the FOB is part of Facebook’s crisis PR push to distance its business from the impact of controversial content moderation decisions — by creating a review body to handle a tiny fraction of the complaints its content takedowns attract. It started accepting submissions for review in October 2020 — and has faced criticism for being slow to get off the ground.

Announcing the first decisions today, the FOB reveals it has chosen to uphold just one of the content moderation decisions made earlier by Facebook, overturning four of the tech giant’s decisions.

Decisions on the cases were made by five-member panels that contained at least one member from the region in question and a mix of genders, per the FOB. A majority of the full Board then had to review each panel’s findings to approve the decision before it could be issued.

The sole case where the Board has upheld Facebook’s decision to remove content is case 2020-003-FB-UA — where Facebook had removed a post under its Community Standard on Hate Speech which had used the Russian word “тазики” (“taziks”) to describe Azerbaijanis, who the user claimed have no history compared to Armenians.

In the four other cases the Board has overturned Facebook takedowns, rejecting earlier assessments made by the tech giant in relation to policies on hate speech, adult nudity, dangerous individuals/organizations, and violence and incitement. (You can read the outline of these cases on its website.)

Each decision relates to a specific piece of content but the board has also issued nine policy recommendations.

These include suggestions that Facebook [emphasis ours]:

• Create a new Community Standard on health misinformation, consolidating and clarifying the existing rules in one place. This should define key terms such as “misinformation.”
• Adopt less intrusive means of enforcing its health misinformation policies where the content does not reach Facebook’s threshold of imminent physical harm.
• Increase transparency around how it moderates health misinformation, including publishing a transparency report on how the Community Standards have been enforced during the COVID-19 pandemic. This recommendation draws upon the public comments the Board received.
• Ensure that users are always notified of the reasons for any enforcement of the Community Standards against them, including the specific rule Facebook is enforcing. (The Board made two identical policy recommendations on this front related to the cases it considered, also noting in relation to the second hate speech case that “Facebook’s lack of transparency left its decision open to the mistaken belief that the company removed the content because the user expressed a view it disagreed with”.)
• Explain and provide examples of the application of key terms from the Dangerous Individuals and Organizations policy, including the meanings of “praise,” “support” and “representation.” The Community Standard should also better advise users on how to make their intent clear when discussing dangerous individuals or organizations.
• Provide a public list of the organizations and individuals designated as ‘dangerous’ under the Dangerous Individuals and Organizations Community Standard or, at the very least, a list of examples.
• Inform users when automated enforcement is used to moderate their content, ensure that users can appeal automated decisions to a human being in certain cases, and improve automated detection of images with text-overlay so that posts raising awareness of breast cancer symptoms are not wrongly flagged for review. Facebook should also improve its transparency reporting on its use of automated enforcement.
• Revise Instagram’s Community Guidelines to specify that female nipples can be shown to raise breast cancer awareness and clarify that where there are inconsistencies between Instagram’s Community Guidelines and Facebook’s Community Standards, the latter take precedence.

Where it has overturned Facebook takedowns the board says it expects Facebook to restore the specific pieces of removed content within seven days.

In addition, the Board writes that Facebook will also “examine whether identical content with parallel context associated with the Board’s decisions should remain on its platform”. And says Facebook has 30 days to publicly respond to its policy recommendations.

So it will certainly be interesting to see how the tech giant responds to the laundry list of proposed policy tweaks — perhaps especially the recommendations for increased transparency (including the suggestion it inform users when content has been removed solely by its AIs) — and whether Facebook is happy to align entirely with the policy guidance issued by the self-regulatory vehicle (or not).

Facebook created the board’s structure and charter and appointed its members — but has encouraged the notion it’s ‘independent’ from Facebook, even though it also funds FOB (indirectly, via a foundation it set up to administer the body).

And while the Board claims its review decisions are binding on Facebook there is no such requirement for Facebook to follow its policy recommendations.

It’s also notable that the FOB’s review efforts are entirely focused on takedowns — rather than on things Facebook chooses to host on its platform.

Given all that it’s impossible to quantify how much influence Facebook exerts on the Facebook Oversight Board’s decisions. And even if Facebook swallows all the aforementioned policy recommendations — or more likely puts out a PR line welcoming the FOB’s ‘thoughtful’ contributions to a ‘complex area’ and says it will ‘take them into account as it moves forward’ — it’s doing so from a place where it has retained maximum control of content review by defining, shaping and funding the ‘oversight’ involved.

tl;dr: An actual supreme court this is not.

In the coming weeks, the FOB will likely be most closely watched over a case it accepted recently — related to the Facebook’s indefinite suspension on former US president Donald Trump, after he incited a violent assault on the US capital earlier this month.

The board notes that it will be opening public comment on that case “shortly”.

“Recent events in the United States and around the world have highlighted the enormous impact that content decisions taken by internet services have on human rights and free expression,” it writes, going on to add that: “The challenges and limitations of the existing approaches to moderating content draw attention to the value of independent oversight of the most consequential decisions by companies such as Facebook.”

But of course this ‘Oversight Board’ is unable to be entirely independent of its founder, Facebook.

Workday started the work day with some big news today. It’s acquiring employee feedback platform Peakon for $700 million in cash.

One thing we have learned during the pandemic is that organizations need to find new ways to build stronger connections with their employees, and that’s precisely what Peakon provides. “Bringing Peakon into the Workday family will be very compelling to our customers — especially following an extraordinary past year that has magnified the importance of having a constant pulse on employee sentiment in order to keep people engaged and productive,” Workday co-founder and co-CEO Aneel Bhusri, said in a statement.

Without the ability to have face-to-face meetings with employees, managers have struggled throughout 2020 to understand how COVID, working from home and all the trials and tribulations of the last year have affected the workforce.

But this ability to check the pulse of employees goes beyond this crisis period. Managers of large organizations know that the bigger and more spread out your firm becomes, the more challenging it is to understand what’s happening across the company. The company uses weekly surveys to ask specific questions about the organization. For them it’s all about getting good data, and so far customers have used the platform to ask over 153 million questions since inception six years ago.

Peakon CEO and co-founder Phil Chambers sees Workday as a logical partner. “Workday excels at helping enable customers to leverage their data. Together, we’ll be able to help drive greater productivity, talent development and employee retention for our customers — and unify how employees interact with their organizations,” he said in a Workday blog post announcing the deal.

Peakon was founded in Copenhagen in 2014 and has raised $68 million along the way, according to Crunchbase data. Its most recent round was a $35 million Series B in March 2019. The deal is expected to close by the end of this quarter subject to typical regulatory review.

A new type of neural network that’s capable of adapting its underlying behavior after the initial training phase could be the key to big improvements in situations where conditions can change quickly – like autonomous driving, controlling robots, or diagnosing medical conditions. These so-called ‘liquid’ neural networks were devised by MIT Computer Science and Artificial Intelligence Lab’s Ramin Hasani and his team at CSAIL, and they have the potential to greatly expand the flexibility of AI technology after the training phase, when they’re engaged in the actual practical inference work done in the field.

Typically, after the training phase, during which neural network algorithms are provided with a large volume of relevant target data to hone their inference capabilities, and rewarded for correct responses in order to optimize performance, they’re essentially fixed. But Hasani’s team developed a means by which his ‘liquid’ neural net can adapt the parameters for ‘success’ over time in response to new information, which means that if a neural net tasked with perception on a self-driving car goes from clear skies into heavy snow, for instance, it’s better able to deal with the shift in circumstances and maintain a high level of performance.

The main difference in the method introduced by Hasani and his collaborators is that it focuses on time-series adaptability, meaning that rather than being built on training data that is essentially made up of a number of snapshots, or static moments fixed in time, the liquid networks inherently considers time series data – or sequences of images rather than isolated slices.

Because of the way the system is designed, it’s actually also more open to observation and study by researchers, when compared to traditional neural networks. This kind of AI is typically referred to as a ‘black box,’ because while those developing the algorithms know the inputs and the the criteria for determining and encouraging successful behavior, they can’t typically determine what exactly is going on within the neural networks that leads to success. This ‘liquid’ model offers more transparency there, and it’s less costly when it comes to computing because it relies on fewer, but more sophisticated computing nodes.

Meanwhile, performance results indicate that it’s better than other alternatives for accuracy in predicting the future values of known data sets. Th next step for Hasani and his team are to determine how best to make the system even better, and ready it for use in actual practical applications.

Indian startup Shopalyst has officially launched a new platform that it calls the Discovery Commerce Cloud, which it says can help retailers take full advantage of digital advertising.

Co-founder and CEO Girish Ramachandra told me that Shopalyst was created to allow for “one seamless journey for the shopper” across advertising and e-commerce — something he said current systems are not currently designed to support.

The startup’s first product was a “universal buy button,” and Ramanchandra said that has “naturally progressed” into a broader set of tools for cross-platform advertising, which Shopalyst has been beta testing for the past year.

The Discovery Commerce Cloud consists of five modules, which Ramanchandra said work best together but can also be purchased separately. That includes:

• a market intelligence product with information about what consumers are searching for and what’s popular on media and e-commerce platforms
• an audience intelligence product to target ads based on audience interest, behavior and purchase intent
• a Universal Ads Manager to deliver ads across Google Ads, DV360, Facebook, Instagram, Amazon Ads, Twitter and TikTok
• a landing page builder that can support instant checkout on a brand’s own direct-to-consumer site, comparison shopping across e-commerce marketplaces, instant delivery or a physical store locator
• real-time metrics that measure the full customer funnel

Ramachandra also noted that the ads created in the Universal Ads Builder optimized to each platform, with dynamically generated creative based on audience data. And by using the landing page builder, brands are also able to gather new data about the audience’s “shopping actions.”

“In the past, [brands] didn’t have shopping actions, because retailers don’t share that data back with them,” he said. “That is all changed. Now they’re able to acquire first-party data [from Shoplalyst], which will help them use the right advertising in future campaigns.”

Shopalyst customers include Unilever, Nestle, Diageo, Nivea, L’Oreal and Estee Lauder. And while the startup was initially focused on its home market of India, the platform is now available across 30 countries.

Shopalyst also says that in beta testing, campaigns run through the Discovery Commerce Cloud have seen up to a 3X improvement in targeting relevance, a 5X increase in audience attention and an 8X increase in ad-activated shopping trips.

The venture potential of a startup that caters to individual students — instead of a slow-moving, small-pocketed institution — has a bullish aura that attracts investors.

Add in a pandemic that forced many to embrace remote learning overnight, and it makes sense that we have seen companies like Outschool and ClassDojo turn first profits while startups like Quizlet and ApplyBoard reached $1 billion valuations.

Last year brought a flurry of record-breaking venture capital to the sector. PitchBook data shows that edtech startups around the world raised $10.76 billion last year, compared to $4.7 billion in 2019. While reporting delays could change this total, VC dollars have more than doubled since the pandemic began. In the United States, edtech startups raised $1.78 billion in venture capital across 265 deals during 2020, compared to $1.32 billion the prior year.

In today’s survey, a dozen top edtech investors shared their thoughts on how growth of lifelong learning is reshaping the industry. Given the sudden extinction of snow days and yeast shortages brought on by student bakers in the early days of the pandemic, it’s easy to see how remote education extends beyond traditional school hours. As learners become more multi-layered and nuanced, so have the edtech companies that back them. 

This was a recurring theme in today’s survey, signaling a shift in how investors approach hybrid learning. The evolution of post-pandemic education will be complex, if not aggressively competitive among the growing cohort of well-capitalized edtech companies. While we asked investors about their post-pandemic tastebuds back in July, much has changed since. Higher education didn’t combust like some expected today, and today, many predict that K-12 students will return to pre-COVID formats after vaccinations are widespread. 

It puts startups in a difficult spot: if 2020 was about enabling video-based teaching, what might emerge from 2021? Integration between different edtech apps? New student collaboration tools? Are employer-led up-skilling and a renewed interest in self-improvement enlarging edtech’s TAM?

Here are the investors we spoke to, along with their areas of interest and expertise:

• Deborah Quazzo, managing partner, GSV Ventures (an education fund backing ClassDojo, Degreed, Clever)
• Ashley Bittner, founding partner of Firework Ventures (a future of work fund with portfolio companies LearnIn and TransfrVR)
• Jomayra Herrera, principal, Cowboy Ventures (a generalist fund with portfolio companies Hone and Guild Education)
• John Danner, managing partner, Dunce Capital (an edtech and future of work fund with portfolio companies Lambda School and Outschool)
• Mercedes Bent and Bradley Twohig, partners, Lightspeed Venture Partners (a multi-stage generalist fund with investments including Forage, Clever, and Outschool)
• Ian Chiu, managing director, Owl Ventures (a large edtech-focused fund backing highly-valued companies including Byju’s, Newsela, and Masterclass) 
• Jan Lynn-Matern, founder and partner, Emerge Education (a leading edtech seed fund in Europe with portfolio companies like Aula, Unibuddy, and BibliU) 
• Benoit Wirz, partner, Brighteye Ventures (an active edtech-focused venture capital fund in Europe that backs YouSchool, Lightneer, and Aula)
• Charles Birnbaum, partner, Bessemer Venture Partners (a generalist fund with portfolio companies including Guild Education and Brightwheel)
• Daniel Pianko, co-founder and managing director, University Ventures (a higher ed and future of work fund that is backing Imbellus and Admithub)
• Rebecca Kaden, managing partner, Union Square Ventures (a generalist fund with portfolio companies including TopHat, Quizlet, Duolingo)
• Andreata Muforo, partner, TLCom Capital (a generalist fund backing uLesson)

Deborah Quazzo, managing partner, GSV Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

For k12, use of digital products and platforms will now be very “normal” – companies like Lexia and Dreambox and Nearpod. Maybe this drives home usage of some products traditionally used only in schools like Lexia. Students of all ages are now very facile with zoom, this can pave the way for more zoom based synchronous learning offerings including extracurricular learning like music, dance etc. schools are now fully wired – maybe we will see schools implement home based learning programs – it’s where students spend half their time.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

Edtech cos need to stay away from the me too solutions. We have seen 20 creator led learning platforms across “preK to Gray” learning in addition to incumbents like Teachable and very few have an ability to build a moat in my view. Unless someone has a very fresh take, I think that ship has sailed. Hopefully as white spaces fill with competitors, new white spaces will emerge. Emerging tech – AI/NLP/ML/VR – will continue to push the envelope. We are still not driving enough people to competency whether in prek12, higher ed or workforce so the opportunity remains vast.

How has edtech’s boom impacted your dealmaking? Has the new interest from generalist investors made valuations too bubbly, or is the market growth helping everyone?

We met on zoom with over 800 founding teams in covid all over the world. We invested in 14 new companies and are just finishing rounds in 2 more. Valuation pressures are across tech sectors. Id argue that education still lags average tech. the question for edtech is whether there is potential for a $100B company in the sector – will TAMs support it.

Ashley Bittner, founding partner, Firework Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

As it relates to our thesis, I believe that the role of employers is changing. Pre-COVID, it was estimated that as much as 1/3 of the US workforce would need to change jobs by 2030. Employers cite skills gaps as a top 3 business concern to stay competitive. Our thesis is that employers will take on more responsibility for reskilling their current workforce, and that training will become job-embeded (rather than only trying to hire to address the challenge.) Degreed was the first wave of this… Learn In is an example of the next step in this evolution. As employers look to provide more skills training (rather than compliance training), we believe that more will come from external sources (CEOs say they are unprepared to meet the reskilling challenge with existing internal resources) and that much of this training will be provided online and during work hours (to address the time barrier that is an equity issue.) I also see an opportunity for modalities like VR to become more popular as we shift to more digital and remote solutions (e.g TRANSFR.) Stats from McKinsey research.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures? In US pre-K and K-12, high customer fragmentation (16,000 school districts, 100K+ schools…pre-K even more fragmented with little public investment), long sales cycles, budget, pedagogy, and regulation. TAM. Relatively low consumer spend on education relative to other markets. Opportunities – increasing access to broadband, increase in device penetration. In FOW, increased recognition that reskilling and upskilling is a business imperative, company culture matters for competitiveness, increased focus on DEI.

Jomayra Herrera, principal, Cowboy Ventures

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?
I think activities that are fundamentally better in person will go back to [being] in person (e.g., sports, music and other enrichment activities). I think that new technology educators may have adopted during the pandemic that they have found to be helpful to their instruction will remain but all the “nice to haves” will likely fall to the wayside. We have a thesis at Cowboy that supplemental education (e.g., Juni Learning, Reconstruction or Outschool) will likely stay online, because parents will not have to worry about driving their kids to learning centers and these companies have the opportunity to make the learning fun.
What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?
For companies focused on K-12 students, it’s still really challenging to sell into schools and school districts because of the long sales cycle. This will likely become even harder, as local and state budgets tighten. In regard to what is fading, I think that tools that don’t solve a real need for educators, students and/or parents or don’t have demonstrated efficacy when it comes to student outcomes will start to fade. Consumers, especially after the pandemic, seem to be more aware of what technology has to offer and have lower tolerance for tools not having a demonstrable impact.For companies that are targeting adult learners, the biggest hurdle continues to be customer acquisition and building a brand that learners can actually trust. As the space starts to mature, consumers are getting more aware of the questions they should be asking (e.g., graduation and placement outcomes) and are less [fooled] by clever marketing.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?
I hope that in this pandemic we’ve realized how critical our educators are to our children’s success and we pay them more :) Incentivizing our best talent to get into and stay in teaching is a critical lever we can pull to improve education.
For K-12, I expect that there will be more comfort with technology in the classroom and that tech can be partnered with in-person instruction in a way that supercharges the educator with the data needed to personalize their instruction.
For higher ed, I expect that there will be an acceleration in online learning for adults as they continue to look to reskill or upskill. There will be more opportunities to do self-paced online learning that is effective and affordable.

John Danner, managing partner, Dunce Capital

What will edtech look like when students finally go back to school in person? Now that remote has become familiar, what are other concepts that you could see becoming popular?

In K-12, education will probably continue to look much like it did, because the majority of parents are clear that child care is the principal value for their kids being at school. That said, a minority of parents are certainly rethinking education after witnessing what their children were actually learning every day for a year. My opinion is that we will continue to see a disaggregation of this care function from academics. Here’s a piece I wrote about that, which has accelerated significantly this year.

What are the biggest hurdles ahead for early-stage edtech startups looking to scale? What opportunities are fading as the space matures?

For vocational schools with a “free until you get a job” model like Lambda or SV Academy, it’s all about job placement. Lambda has had a lot of success with their new fellowship model, which has allowed them to scale significantly. For a lot of early childhood and K-12 companies working online, it’s about new parent behaviors and whether you can develop a habit like Outschool has done. For senior learning like what GetSetUp does, finding the reimbursement models through healthcare is probably the key.

What do you expect education to look like in five-plus years from now, when the pandemic is more of a memory?

I think we are in a transition to more and more academics happening in the cloud. Right now, that’s all about live experiences and human in the loop. In five years, I think we will begin seeing a significant impact of AI replacing many human functions.

Buy now, pay later services — which let consumers finance the purchase of goods online by paying back the total in installments over time — have been growing in ubiquity this past year. Today, Scalapay, one of the companies that’s building a platform to enable buy now, pay later (BNPL) and related features, has raised a round to boost its position in the race for customers against competitors like Klarna, Afterpay and Affirm.

The Milan, Italy-based startup has picked up $48 million in funding, money that it will use to continue building the tech in its platform, scaling its service in Europe, and to begin working on efforts to break into the U.S.

The round was led by Fasanara Capital and also included Baleen Capital and Italian family office Ithaca Investments. This is the startup’s first significant funding since launching in 2019.

Scalapay’s service is based around a basic model involving a quick sign-up, and then an agreement to repay the full amount in three equal installments, debited from your bank account or a credit card.

Like others such as Affirm, Scalapay does not charge consumers interest or other fees: its business model is based around taking a commission from the merchants on each transaction, the argument being that offering an easy and quick BNPL service will increase conversions and shopping cart size.

The startup currently has around 1,000 merchants in Europe using its service in France, Italy and Germany, including well-known, mulitnational European retailers like Decathlon, Calzedonia, Bata, Aosom and Bricobravo. It claims to be the biggest provider of BNPL services in its home country.

It also inked a recent partnership with banking “marketplace” Raisin Bank, and through that, Scalapay will soon be able to offer its merchant customers the ability to offer BNPL services in any European country.

The plan will be to add on more originating countries, said CEO and co-founder Simone Mancini, as well as related payment features in areas like customer acquisition, conversion, retention and the back office tasks associated with taking and fulfilling and order.

For a start, on its own site, Scalapay lists merchants that offer its BNPL service, and the startup has found that these links are on average generating 1 million referrals each month. Mancini said the company is working on a way of building a product around this concept as part of its expansion.

There was a time when it was not that common to find installment-based payment options on sites, with BNPL a carryover from the world of brick and mortar where people might have in the past paid for items using layaway or other in-store finance options, in particular for more expensive items like televisions.

But the traction of older online services like privately-held Klarna (valued now at over $10 billion), as well as Affirm in the U.S. and Afterpay in Australia (both of which are publicly traded), have paved the way for more recent entrants like Scalapay (which was founded in 2019) and other newer players like Alma.

All of them have in part been lifted by the conditions that we are living under at the moment.

E-commerce usage has seen a huge surge of activity due to people staying away from physical stores (when those stores are even open) to help with social distancing. But at the same time, many consumers are in less financial stable situations as a result of the pandemic, so options to help them stretch out payments and remain more flexible with their money have grown in appeal.

This has also meant that the average price of the kinds of items that people are buying on installments is also changing. Mancini said the average sum people are paying on Scalapay currently is around €100. That underscores the value that people are not willing to pay up front, so from a microeconomics perspective it will be interesting to see how that figure rises or falls in the future.

The fact that the sums are not particularly high right now, meanwhile, might be one reason why Scalapay has seen some strong numbers in terms of defaults and approvals. Mancini said that “first purchase approval rates” are about 93% right now, higher or lower depending on the category. And its default rate is below 1.5%.

These are not bad, but also not markedly different from its competitors.

Going forward, the big challenges for a company like Scalapay, therefore, will not just the usual ones of building solid algorithms to ensure that they are not financing people who are likely to default on payments, making sure its system stays fraud-free, and so on. They will also include finding a way to distinguish itself from the rest of the pack of companies providing the same kinds of basic services.

Perhaps a small detail, but it’s notable to me that Scalapay’s site doesn’t look unlike Klarna’s. Both even lean heavily on pink as a color theme.

It’s also worth mentioning that Mancini moved to Italy from Australia (where his co-founder Johnny Mitrevski still lives and runs R&D) to start Scalapay because Australia, he said, was going to be too hard to break into because of the dominance of Afterpay.

“Australia is one of the most competitive markets, versus Italy being one of the most underdeveloped markets,” he said. “It was an easy pick, with heaps of opportunity here for BNPL.” The company’s focus on building more beyond basic BNPL should also help with building a profile and diversifying the business.

“I was impressed with the fast growth of the company and the underlying model,” said Francesco Filia, CEO of Fasanara Capital, in a statement. “They have shown resilience during a difficult period and I’m excited by where the company is headed.”

“Scalapay’s platform delights customers while driving dramatic results for merchants,” added Fang Li, Managing Partner of Baleen Capital, in a statement. “As a long-time investor in the BNPL industry, I have been beyond impressed by Scalapay’s team, execution, and product vision. I believe the company is on the way to building a valued and leading partner for European retailers.”

Buy now, pay later services — which let consumers finance the purchase of goods online by paying back the total in installments over time — have been growing in ubiquity this past year. Today, Scalapay, one of the companies that’s building a platform to enable buy now, pay later (BNPL) and related features, has raised a round to boost its position in the race for customers against competitors like Klarna, Afterpay and Affirm.

The Milan, Italy-based startup has picked up $48 million in funding, money that it will use to continue building the tech in its platform, scaling its service in Europe, and to begin working on efforts to break into the U.S.

The round was led by Fasanara Capital and also included Baleen Capital and Italian family office Ithaca Investments. This is the startup’s first significant funding since launching in 2019.

Scalapay’s service is based around a basic model involving a quick sign-up, and then an agreement to repay the full amount in three equal installments, debited from your bank account or a credit card.

Like others such as Affirm, Scalapay does not charge consumers interest or other fees: its business model is based around taking a commission from the merchants on each transaction, the argument being that offering an easy and quick BNPL service will increase conversions and shopping cart size.

The startup currently has around 1,000 merchants in Europe using its service in France, Italy and Germany, including well-known, mulitnational European retailers like Decathlon, Calzedonia, Bata, Aosom and Bricobravo. It claims to be the biggest provider of BNPL services in its home country.

It also inked a recent partnership with banking “marketplace” Raisin Bank, and through that, Scalapay will soon be able to offer its merchant customers the ability to offer BNPL services in any European country.

The plan will be to add on more originating countries, said CEO and co-founder Simone Mancini, as well as related payment features in areas like customer acquisition, conversion, retention and the back office tasks associated with taking and fulfilling and order.

For a start, on its own site, Scalapay lists merchants that offer its BNPL service, and the startup has found that these links are on average generating 1 million referrals each month. Mancini said the company is working on a way of building a product around this concept as part of its expansion.

There was a time when it was not that common to find installment-based payment options on sites, with BNPL a carryover from the world of brick and mortar where people might have in the past paid for items using layaway or other in-store finance options, in particular for more expensive items like televisions.

But the traction of older online services like privately-held Klarna (valued now at over $10 billion), as well as Affirm in the U.S. and Afterpay in Australia (both of which are publicly traded), have paved the way for more recent entrants like Scalapay (which was founded in 2019) and other newer players like Alma.

All of them have in part been lifted by the conditions that we are living under at the moment.

E-commerce usage has seen a huge surge of activity due to people staying away from physical stores (when those stores are even open) to help with social distancing. But at the same time, many consumers are in less financial stable situations as a result of the pandemic, so options to help them stretch out payments and remain more flexible with their money have grown in appeal.

This has also meant that the average price of the kinds of items that people are buying on installments is also changing. Mancini said the average sum people are paying on Scalapay currently is around €100. That underscores the value that people are not willing to pay up front, so from a microeconomics perspective it will be interesting to see how that figure rises or falls in the future.

The fact that the sums are not particularly high right now, meanwhile, might be one reason why Scalapay has seen some strong numbers in terms of defaults and approvals. Mancini said that “first purchase approval rates” are about 93% right now, higher or lower depending on the category. And its default rate is below 1.5%.

These are not bad, but also not markedly different from its competitors.

Going forward, the big challenges for a company like Scalapay, therefore, will not just the usual ones of building solid algorithms to ensure that they are not financing people who are likely to default on payments, making sure its system stays fraud-free, and so on. They will also include finding a way to distinguish itself from the rest of the pack of companies providing the same kinds of basic services.

Perhaps a small detail, but it’s notable to me that Scalapay’s site doesn’t look unlike Klarna’s. Both even lean heavily on pink as a color theme.

It’s also worth mentioning that Mancini moved to Italy from Australia (where his co-founder Johnny Mitrevski still lives and runs R&D) to start Scalapay because Australia, he said, was going to be too hard to break into because of the dominance of Afterpay.

“Australia is one of the most competitive markets, versus Italy being one of the most underdeveloped markets,” he said. “It was an easy pick, with heaps of opportunity here for BNPL.” The company’s focus on building more beyond basic BNPL should also help with building a profile and diversifying the business.

“I was impressed with the fast growth of the company and the underlying model,” said Francesco Filia, CEO of Fasanara Capital, in a statement. “They have shown resilience during a difficult period and I’m excited by where the company is headed.”

“Scalapay’s platform delights customers while driving dramatic results for merchants,” added Fang Li, Managing Partner of Baleen Capital, in a statement. “As a long-time investor in the BNPL industry, I have been beyond impressed by Scalapay’s team, execution, and product vision. I believe the company is on the way to building a valued and leading partner for European retailers.”

Update: Robinhood has made public note of the changes, stating that “in light of recent volatility” it is “restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK.” The company added that it has “raised margin requirements for certain securities.”

Robinhood, the popular consumer trading application, has restricted its users from making some popular investments and wagers, public reports indicate. Social media is awash with notes from individual Robinhood users indicating that some popular securities are now untradable, and the company reportedly sent out a note yesterday saying that it is “implementing certain restrictions for for GME [GameStop] and AMC [the theater chain] options trading.”

TechCrunch has multiple emails in to the company asking for clarification regarding what trades, and securities are banned in aggregate, and the reasoning behind the move, but we’ve yet to hear back at time of publication. User commentary thus far concerning Robinhood’s choice has been swift, and negative, however.

Robinhood’s decision comes after zero-cost trading platforms found themselves at the center of one of the public market’s more bizarre sagas, in which a horde of retail investors bid shares of heavily-shorted securities higher in an attempt to break the trades of professional investors; precisely who is making the bets, and what portion of the new wagers are from individual investors and not larger pools of capital following the trade is not clear.

Yesterday, after noting that some traditional online brokers had restricted some user access to certain securities, citing their volatility, TechCrunch asked Robinhood and a number of its peers if they were taking similar precautions.

One of the group added some protection, but most cited their focus on long-term shareholding over day trading; a fair position but one at odds with the fact that most free-trading apps generate revenue from consumer trade volume. And options and other more exotic trades generate more revenue for neo-brokers than trades executed in well-known stocks.

Robinhood’s latest move, then, will ding its revenues as it is no longer allowing for trading in some very popular securities and other market-based wagers.

This is not the first time that neo-brokers have come up against tension between their business model and user access to exotic investments. After a Robinhood user committed suicide after trading options and not understanding one of their trades, a tragedy, Robinhood worked to make options trading harder to get into. That was definitely the right call, but likely not great for its revenue in the short-term, we imagine, given how lucrative those trades have historically proven for the company.

Options volume is setting records. Trading volume is at historical highs. And at the time of writing, shares of GameStop are set to rally at the open yet again today. Let’s see what happens.

Last night, Qualtrics priced its IPO at $30 per share, selling 50.4 million shares in the process.

Notably, the company’s IPO price was harder to chase down than usual, with a formal press release in scarce supply. SEC filings indicate that the company “anticipate[s]” a price of $30 per share, and reports from media and IPO-watching entities cite the $30 figure as well.

TechCrunch has an email into the Qualtrics team asking to confirm the reports, which are sufficiently widespread and confident that we’re similarly comfortable with its final price.

At $30 per share, Qualtrics priced its IPO at $1 per share above its raised IPO range of $27 to $29 a share. TechCrunch anticipated that the company’s first IPO price interval was low; and this publication noted that we would not “fall over in shock if Qualtrics priced a dollar or two above [its] raised range.”

Quelle surprise.

At $30 per share, and with 511,138,997 shares outstanding after its debut per its most recent S-1/A, inclusive of its underwriters’ option, Qualtrics would be worth $15.3 billion. That’s just under double the $8 billion that the company was worth when it sold to SAP a few years ago. Of course, let’s wait until we get a formal, final share count before we lock in the company’s pre-trading value.

For SAP, then, the deal is a win. But it’s not alone in enjoying quick returns on Qualtrics. Silver Lake agreed to buy “15,018,484 shares at $21.64 per share” and “225 million of shares at the initial public offering price” back in December. So that means that the company has a paper gain of more than $125 million on the shares it bought for just under $22 apiece.

Not a bad trade. If Qualtrics’ gains in early trading, Silver Lake will do even better.

TechCrunch is talking to the company later today, and will have more notes on its performance and valuation when it begins to trade.

UCLA researchers have been awarded a $3.65 million grant to collect, contextualize, and digitally preserve a huge archive of materials relating to policing and mass incarceration. It should help historians and anthropologists, but more fundamentally it will thoroughly document a period that many would rather forget.

The “Archiving the Age of Mass incarceration” effort is being led by Kelly Lytle Hernandez, director of the university’s Bunche Center for African American Studies and creator of Million Dollar Hoods, another project documenting the human cost of incarceration in Los Angeles. The grant is provided by the Andrew W. Mellon Foundation.

“We may be at a turning point in American history — may be building something new,” Lytle Hernandez told me, citing a tumultuous but potentially transformative 2020. “If that’s the case we want to make sure we are preserving the record of what happened. What we want to do is retain the records, the memory, the experiences of people affected by mass incarceration, and where possible the records of the state, which would otherwise be destroyed.”

The core of this collection will be a cache of documents released to Lytle Hernandez by the LAPD as part of this 2019 settlement (shortly after she won a MacArthur fellowship) regarding public disclosures and communication. She described it as around 177 boxes of paper records from the 1980s to the early 2000s detailing the “war on drugs,” policing immigrants, and many other topics, with more to be provided later under an agreement with the department.

The idea would be to “counterbalance” these official documents, as she put it, with documentation and testimony from the other side of the equation.

“People who are disproportionately incarcerated or arrested — we often lose our records because we get evicted; because where we stored our records, we can’t make the payments and they’re seized; they’re seized when we’re arrested, etc.,” she explained. “If we need to undo generations of harm, we need to know, where did that harm happen? Who did it happen to? I see this archival project as part of that dismantlement effort.”

Over the next few years Lytle Hernandez will lead the effort to assemble the archive, which will involve such traditional work as scanning and indexing paper documents, but also visiting communities and collecting “carceral ephemera” such as receipts for bail bonds (which may be the only surviving record of a person’s brush with the justice system) and personal stories and media.

Getting records from police and state agencies is a difficult and sometimes legally or politically fraught process. It’s important to get as much information as possible, from as many sources as possible, as quickly as possible, she said. Other major turning points in the history of racial justice have been inadequately documented, for reasons both negligent and deliberate.

“What if the nation had sent out squads of oral historians and students to capture and preserve the record? Imagine what we could know about enslavement and its toll on all of us, what it meant to the making of this country, if we had talked to the people who had experienced it — what kind of archive that would have left us, to grapple with and to help us move away from its legacies,” said Lytle Hernandez. “But we’ve been able to forget the power and legacy of slavery because we didn’t do a good enough job. Same with native removal, internment, immigration.”

Now there is an opportunity — around the country, she was careful to point out, not just in LA — to do just that with the era of mass incarceration. Not only that but they can bring modern techniques to bear in ways that weren’t possible during, say, the Civil Rights movement.

Her experience with Million Dollar Hood has shown her that there is serious interest in turning the tables among communities that have historically been disenfranchised or targeted by racist and classist policies propped up by bogus data.

“When we have a meeting we have black and brown students crammed into the room and out into the hall to learn data analysis and data science,” she said. “Part of the project is opening up that door. When you bring the people into the room who are the most impacted, they see that data differently — they see different stories.”

The archive will be completely public, though the exact scope of what documents will be included and how they will be sorted, described, and so on is still being worked out. Regardless of the exact details, the archive should prove invaluable to students, researchers, and a curious public over the coming decades as the changes Lytle Hernandez hopes for begin to get underway.