Category: UNCATEGORIZED

This has been quite a week.

Instead of walking backward through the last few days of chaos and uncertainty, here are three good things that happened:

• Google employee Sara Robinson combined her interest in machine learning and baking to create AI-generated hybrid treats.
• A breakthrough could make water desalination 30%-40% more effective.
• Bianca Smith will become the first Black woman to coach a professional baseball team.

Despite many distractions in our first full week of the new year, we published a full slate of stories exploring different aspects of entrepreneurship, fundraising and investing.

We’ve already gotten feedback on this overview of subscription pricing models, and a look back at 2020 funding rounds and exits among Israel’s security startups was aimed at our new members who live and work there, along with international investors who are seeking new opportunities.

Plus, don’t miss our first investor surveys of 2021: one by Lucas Matney on social gaming, and another by Mike Butcher that gathered responses from Portugal-based investors on a wide variety of topics.

Thanks very much for reading Extra Crunch this week. I hope we can all look forward to a nice, boring weekend with no breaking news alerts.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription

The Roblox Gambit

Image Credits: Nigel Sussman (opens in a new window)

In February 2020, gaming platform Roblox was valued at $4 billion, but after announcing a $520 million Series H this week, it’s now worth $29.5 billion.

“Sure, you could argue that Roblox enjoyed an epic 2020, thanks in part to COVID-19,” writes Alex Wilhelm this morning. “That helped its valuation. But there’s a lot of space between $4 billion and $29.5 billion.”

Alex suggests that Roblox’s decision to delay its IPO and raise an enormous Series H was a grandmaster move that could influence how other unicorns will take themselves to market. “A big thanks to the gaming company for running this experiment for us.”

I asked him what inspired the headline; like most good ideas, it came to him while he was trying to get to sleep.

“I think that I had “The Queen’s Gambit“ somewhere in my head, so that formed the root of a little joke with myself. Roblox is making a strategic wager on method of going public. So, ‘gambit’ seems to fit!”

8 investors discuss social gaming’s biggest opportunities

Image Credits: Erik Von Weber (opens in a new window) / Getty Images

For our first investor survey of the year, Lucas Matney interviewed eight VCs who invest in massively multiplayer online games to discuss 2021 trends and opportunities:

• Hope Cochran, Madrona Venture Group
• Daniel Li, Madrona Venture Group
• Niko Bonatsos, General Catalyst
• Ethan Kurzweil, Bessemer Venture Partners
• Sakib Dadi, Bessemer Venture Partners
• Jacob Mullins, Shasta Ventures
• Alice Lloyd George, Rogue
• Gigi Levy-Weiss, NFX

Having moved far beyond shooters and sims, platforms like Twitch, Discord and Fortnite are “where culture is created,” said Daniel Li of Madrona.

Rep. Alexandria Ocasio-Cortez uses Twitch to explain policy positions, major musicians regularly perform in-game concerts on Fortnite and in-game purchases generated tens of billions last year.

“Gaming is a unique combination of science and art, left and right brain,” said Gigi Levy-Weiss of NFX. “It’s never just science (i.e., software and data), which is why many investors find it hard.”

How to convert customers with subscription pricing

Image Credits: C.J. Burton (opens in a new window) / Getty Images

Startups that lack insight into their sales funnel have high churn, low conversion rates and an inability to adapt or leverage changes in customer behavior.

If you’re hoping to convert and retain customers, “reinforcing your value proposition should play a big part in every level of your customer funnel,” says Joe Procopio, founder of Teaching Startup.

What is up with Tesla’s value?

Image Credits: Bloomberg (opens in a new window) / Getty Images

Alex Wilhelm followed up his regular Friday column with another story that tries to find a well-grounded rationale for Tesla’s sky-high valuation of approximately $822 billion.

Meanwhile, GM just unveiled a new logo and tagline.

As ever, I learned something new while editing: A “melt up” occurs when investors start clamoring for a particular company because of acute FOMO (the fear of missing out).

Delivering 500,000 cars in 2020 was “impressive,” says Alex, who also acknowledged the company’s ability to turn GAAP profits, but “pride cometh before the fall, as does a melt up, I think.”

Note: This story has Alex’s original headline, but I told him I would replace the featured image with a photo of someone who had very “richest man in the world” face.

How Segment redesigned its core systems to solve an existential scaling crisis

Image Credits: piranka / Getty Images

On Tuesday, enterprise reporter Ron Miller covered a major engineering project at customer data platform Segment called “Centrifuge.”

“Its purpose was to move data through Segment’s data pipes to wherever customers needed it quickly and efficiently at the lowest operating cost,” but as Ron reports, it was also meant to solve “an existential crisis for the young business,” which needed a more resilient platform.

Dear Sophie: Banging my head against the wall understanding the US immigration system

Image Credits: Sophie Alcorn

Dear Sophie:

Now that the U.S. has a new president coming in whose policies are more welcoming to immigrants, I am considering coming to the U.S. to expand my company after COVID-19. However, I’m struggling with the morass of information online that has bits and pieces of visa types and processes.

Can you please share an overview of the U.S. immigration system and how it works so I can get the big picture and understand what I’m navigating?

— Resilient in Romania

The first “Dear Sophie” column of each month is available on TechCrunch without a paywall.

Revenue-based financing: The next step for private equity and early-stage investment

Image Credits: Hiraman (opens in a new window) / Getty Images

For founders who aren’t interested in angel investment or seeking validation from a VC, revenue-based investing is growing in popularity.

To gain a deeper understanding of the U.S. RBI landscape, we published an industry report on Wednesday that studied data from 134 companies, 57 funds and 32 investment firms before breaking out “specific verticals and business models … and the typical profile of companies that access this form of capital.”

Lisbon’s startup scene rises as Portugal gears up to be a European tech tiger

Image Credits: Westend61 (opens in a new window)/ Getty Images

Mike Butcher continues his series of European investor surveys with his latest dispatch from Lisbon, where a nascent startup ecosystem may get a Brexit boost.

Here are the Portugal-based VCs he interviewed:

• Cristina Fonseca, partner, Indico Capital Partners
• Pedro Ribeiro Santos, partner, Armilar Venture Partners
• Tocha, partner, Olisipo Way
• Adão Oliveira, investment manager, Portugal Ventures
• Alexandre Barbosa, partner, Faber
• António Miguel, partner, Mustard Seed MAZE
• Jaime Parodi Bardón, partner, impACT NOW Capital
• Stephan Morais, partner, Indico Capital Partners
• Gavin Goldblatt, managing partner, Portugal Gateway

How late-stage edtech companies are thinking about tutoring marketplaces

Image Credits: John Lund (opens in a new window)/ Getty Images

How do you scale online tutoring, particularly when demand exceeds the supply of human instructors?

This month, Chegg is replacing its seven-year-old marketplace that paired students with tutors with a live chatbot.

A spokesperson said the move will “dramatically differentiate our offerings from our competitors and better service students,” but Natasha Mascarenhas identified two challenges to edtech automation.

“A chatbot won’t work for a student with special needs or someone who needs to be handheld a bit more,” she says. “Second, speed tutoring can only work for a specific set of subjects.”

Decrypted: How bad was the US Capitol breach for cybersecurity?

Image Credits: Treedeo (opens in a new window) / Getty Images

While I watched insurrectionists invade and vandalize the U.S. Capitol on live TV, I noticed that staffers evacuated so quickly, some hadn’t had time to shut down their computers.

Looters even made off with a laptop from Senator Jeff Merkley’s office, but according to security reporter Zack Whittaker, the damages to infosec wasn’t as bad as it looked.

Even so, “the breach will likely present a major task for Congress’ IT departments, which will have to figure out what’s been stolen and what security risks could still pose a threat to the Capitol’s network.”

Extra Crunch’s top 10 stories of 2020

Image Credits: Catherine Falls Commercial (opens in a new window) / Getty Images

On New Year’s Eve, I made a list of the 10 “best” Extra Crunch stories from the previous 12 months.

My methodology was personal: From hundreds of posts, these were the 10 I found most useful, which is my key metric for business journalism.

Some readers are skeptical about paywalls, but without being boastful, Extra Crunch is a premium product, just like Netflix or Disney+. I know, we’re not as entertaining as a historical drama about the reign of Queen Elizabeth II or a space western about a bounty hunter. But, speaking as someone who’s worked at several startups, Extra Crunch stories contain actionable information you can use to build a company and/or look smart in meetings — and that’s worth something.

Twitter took action against a pair of President Trump’s close associates, banning them from the platform Friday.

Trump ally Michael Flynn and former Trump campaign lawyer Sidney Powell were both suspended under Twitter’s “Coordinated Harmful Activity” policy. Ron Watkins, who previously ran 8kun (formerly 8chan) also saw his account removed.

“We’ve been clear that we will take strong enforcement action on behavior that has the potential to lead to offline harm, and given the renewed potential for violence surrounding this type of behavior in the coming days, we will permanently suspend accounts that are solely dedicated to sharing QAnon content,” a Twitter spokesperson told TechCrunch.

Each figure has promoted the QAnon conspiracy in recent months. Flynn and Powell were both also actively involved in Trump’s quest to overturn the results of the November election. As the administrator of QAnon’s central online hub, Watkins played a key role QAnon’s explosion into the mainstream over the last few years.

Developing…

Twitter took action against a pair of President Trump’s close associates, banning them from the platform Friday.

Trump ally Michael Flynn and former Trump campaign lawyer Sidney Powell were both suspended under Twitter’s “Coordinated Harmful Activity” policy. Ron Watkins, who previously ran 8kun (formerly 8chan) also saw his account removed.

“We’ve been clear that we will take strong enforcement action on behavior that has the potential to lead to offline harm, and given the renewed potential for violence surrounding this type of behavior in the coming days, we will permanently suspend accounts that are solely dedicated to sharing QAnon content,” a Twitter spokesperson told TechCrunch.

Each figure has promoted the QAnon conspiracy in recent months. Flynn and Powell were both also actively involved in Trump’s quest to overturn the results of the November election. As the administrator of QAnon’s central online hub, Watkins played a key role QAnon’s explosion into the mainstream over the last few years.

Developing…

Venrock, the 51-year-old venture firm that started as the venture arm of the Rockefeller family, has closed its ninth fund with $450 million in capital commitments, the same amount the firm raised for its last two funds, closed in 2017 and 2014, respectively. The outfit, with offices in Palo Alto, New York, and Cambridge, clearly feels comfortable with the fund size, but it says change is otherwise a constant, given that trends and tech shift so quickly that so-called pattern recognition can actually prove a liability if an investment team isn’t careful.

To learn more about the changes the team is tracking at Venrock — whose newest exits include last year’s IPOs of Cloudflare and 10x Genomics IPO, and the recent sales of Corvidia and Personal Capital — we were in touch earlier today with longtime partner Bryan Roberts, who has spent his 24-year career in venture with the firm.
Our exchange has been edited lightly for length and clarity.

TC: I talked with your colleague Camille Samuels earlier this year about aging biology. How big an area of focus is that for Venrock and why?

BR: It is one of many interesting areas of biology on a go-forward basis, along with immunology, CNS (central nervous system) and other areas [where they has been] little progress and great unmet need.

TC: Speaking of unmet need, Camille also talked about why infectious disease isn’t good business for new companies, as are cancers and orphan diseases. As she explained it, with something like the coronavirus, it’s hard to get funding before it’s an actual problem; once a treatment is developed, it has to be sold at low cost, and then you hope you won’t have repeat customers. Do you agree, and do you think this needs to change?

BR: Yes, I think things need to change, but there are several issues.

In the case of one company on which I lost a bunch of money — Achaogen, which made a successful drug for a big unmet need [but faced] screwy commercialization dynamics in the infectious disease space —  and for many historical [infectious disease] companies, the cost of a drug is borne by the hospital, not billed separately.

It has also been hard historically to get anyone to pay attention to much of anything from a preventive perspective – even more so in communicable diseases. Covid was, on the one hand, not a particularly hard biological problem to solve, but from an investing perspective, the issue was it was a problem tailor-made for an existent or large company to tackle, not a startup. Startups take 12 or more months to find their way out the front door, and the problem is largely solved by then by one of the very large competitors.

You saw this with Moderna. Its tech turned out to be specifically suited to vaccines — and then a pandemic hit.

TC: Venrock recently helped incubate a new microbiome startup called Federation Bio, which is the firm’s first bet on space. Why not move faster into this area, and how would you describe the size of the opportunity now? Is this something you want to delve into more aggressively?

BR: We did spend 12 months or so helping get Federation started, including my partner Racquel Bracken acting as the initial CEO. We weren’t compelled by the prior approaches and teams, and it is really the intersection of those two dynamics that get us involved in new projects.

In this case, a terrific academic, Michael Fischbach, had generated great data so we ran with it. We recently spent more than 12 months incubating a new gene therapy startup in the same manner – in the latter case, a couple of great academics generated exquisite cell type specificity — so we went out and found some leadership and just seeded the business.

TC: It’s one way to avoid crazy valuations. Where have valuations gone up the most?

BR: Everywhere, but especially for companies that appear — or actually have — reduced binary risk and become growth stage businesses [and that’s] across sectors.

TC: You focus on so much: biotechnology, diagnostics, genomics, healthcare IT, medical devices. What are some of biggest trends you’re watching in some of these areas, and where do you think you might be spending a little more of your time in 2021?

BR: Personally, I am compelled these days by first, value-based care in healthcare delivery — meaning it’s more efficient, there are better outcomes, there’s better customer experience — and mostly from full stack platforms versus point solutions. I’m also focused on biological insights and applications that new genomics tools — single cell; gene editing — can bring. Last, [I’m tracking what] novel therapeutic modalities can bring to really bad diseases. It feels like we’re in the first inning of cell and gene therapy.

TC: How do you think the new administration in Washington could impact your work?

BR: I think there will be lots of talk about material changes to healthcare and other stuff, but I think it will mostly be talk given the slim margin in the Senate, as well as the decreased and small margin [that Democrats have] in the House. I think it will be a positive in that a bunch of the silly stuff around the [Affordable Care Act] will fade to nothing and people can get on with trying to improve implementation and go build.

TC: What do you make of the recent collapse of Haven, the joint venture of Amazon, JPMorgan Chase and Berkshire Hathaway to reduce the healthcare costs of their own employees? Would you like to see Amazon focused more — or less — on healthcare?

BR: We’ve long been bears [about its odds] for a bunch of the reasons folks cited over the last few weeks [including lack of transparency into healthcare costs].

I would love to see Amazon use its brand, delivery logistics excellence, and ability to compete at super-tight margins in healthcare. I don’t think it extends to real regulatory, privacy or risk appetite, but the company could be an awesome pharmacy/pharmacy benefit manager – and I hope they do it.

TC: Regarding Venrock’s new fund, have there been personnel changes? Will check sizes change? 

BR: We made Racquel Bracken and Ethan Batraski partners; it’s always fun when you can promote terrific young talent from within.

As for our high-level strategy, check sizes, and stages all remain the same. We’ve raised $450 million for each of the last several funds because we like that size and our culture and personality is way more focused on performance than on asset accumulation. It also feels really hard to raise increasing amounts of capital without affecting performance excellence.

TC: Healthcare has never been hotter. How much of Venrock’s capital is focused on healthcare, and will that change with this newest fund?

BR: We’re pretty bottoms-up allocation driven; we invest based on the projects we find and fall in love with. Life sciences usually ends up being around 30% to 40% [of capital invested]. Healthcare IT, which depending who you talk to in the universe gets lumped into healthcare or tech —  I confess those software-enabled services businesses feel much more tech like than biotech — usually ends up being about a quarter of the fund and there are no anticipated changes.

TC: Has Venrock considered forming a blank-check company to take a company public, as more VCs are doing?

BR: We have not. I feel like most investors that have formed SPACs have done so more because of the compelling sponsor economics than a compelling, durable mechanism to get awesome companies public in a much more efficient manner than they otherwise might. It’ll be interesting to see how the economics change as the supply and demand of SPACs versus “great targets” changes and the SPACs get closer to the end of their hunting license period.

Reports that a laptop from House Speaker Nancy Pelosi’s office was stolen during the pro-Trump rioters’ sack of the Capitol building has some worried that the mob may have access to important, even classified information. Fortunately that’s not the case — even if this computer and others had any truly sensitive information, which is unlikely, like any corporate asset it can almost certainly be disabled remotely.

The cybersecurity threat in general from the riot is not as high as one might think, as we explained yesterday. Specific to stolen or otherwise compromised hardware, there are several facts to keep in mind.

In the first place, the offices of elected officials are in many ways already public spaces. These are historic buildings through which tours often go, in which meetings with foreign dignitaries and other politicians are held, and in which thousands of ordinary civil servants without any security clearance would normally be working shoulder-to-shoulder. The important work they do is largely legislative and administrative — largely public work, where the most sensitive information being exchanged is probably unannounced speeches and draft bills.

But recently, you may remember, most of these people were working from home. Of course during the major event of the joint session confirming the electors, there would be more people than normal. But this wasn’t an ordinary day at the office by a long shot — even before hundreds of radicalized partisans forcibly occupied the building. Chances are there wasn’t a lot of critical business being conducted on the desktops in these offices. Classified data lives in the access-controlled SCIF, not on random devices sitting in unsecured areas.

In fact, the laptop is reported by Reuters as having been part of a conference room’s dedicated hardware — this is the dusty old Inspiron that lives on the A/V table so you can put your Powerpoint on it, not Pelosi’s personal computer, let alone a hard line to top secret info.

Even if there was a question of unintended access, it should be noted that the federal government, as any large company might, has a normal IT department with a relatively modern provisioning structure. The Pelosi office laptop, like any other piece of hardware being used for official House and Senate business, is monitored by IT and should be able to be remotely disabled or wiped. The challenge for the department is figuring out which hardware does actually need to be handled that way — as was reported earlier, there was (understandably) no official plan for a violent takeover of the Capitol building.

In other words, it’s highly likely that the most that will result from the theft of government computers on the 6th will be inconvenience or at most some embarrassment should some informal communications become public. Staffers do gossip and grouse, of course, on both back and official channels.

That said, the people who invaded these office and stole that equipment — some on camera — are already being arrested and charged. Just because the theft doesn’t present a serious security threat doesn’t mean it wasn’t highly illegal in several different ways.

Any cybersecurity official will tell you that the greater threat by far is the extensive infiltration of government contractors and accounts through the SolarWinds breach. Those systems are packed with information that was never meant to be public, and will likely provide fuel for credential-related attacks for years to come.

The U.S. Department of Transportation’s National Highway Traffic Safety Administration has determined the reports of sudden unintended acceleration (SUA) involving four different Tesla models were due to user error.

The NHTSA first began investing the claims last January, shortly after Brian Sparks requested the agency recall all Model S, Model X and Model 3 vehicles made during or after 2013. In its review, the NHTSA analyzed the 232 SUA complaints Sparks provided to the agency, as well 14 other complaints, and all available crash data.

The NHTSA’s Office of Defects Investigation has now determined that all of the crashes involving SUA that Sparks cited were caused by the driver. Therefore, the NHTSA is denying Sparks’ petition to formally review 662,109 vehicles and potentially recall them.

“There is no evidence of any fault in the accelerator pedal assemblies, motor control systems, or brake systems that has contributed to any of the cited incidents,” the report states. “There is no evidence of a design factor contributing to increased likelihood of pedal misapplication. The theory provided of a potential electronic cause of SUA in the subject vehicles is based upon inaccurate assumptions about system design and log data.”

Tesla had previously denied the claims, calling the petition “completely false” and outing Sparks as a Tesla short-seller.

“We investigate every single incident where the driver alleges to us that their vehicle accelerated contrary to their input, and in every case where we had the vehicle’s data, we confirmed that the car operated as designed,” the company said last January. “In other words, the car accelerates if, and only if, the driver told it to do so, and it slows or stops when the driver applies the brake.”

The NHTSA’s investigation confirmed Tesla’s own findings. TechCrunch has reached out to Tesla and will update this story if we hear back.

The last year taught us that the connection between the stock market and the economy is imprecise at best.

Despite some useful commentary underscoring the two are at least somewhat linked, it’s clear that many Americans can lose their jobs and financial security at the same time that stocks can keep on rising like the boom times will never end.

That’s the macro picture; 2021 is teaching us its microcorollary — smaller groups of stocks can keep rising regardless of what is going on with their fundamentals.

And in the micro-micro case, that Tesla’s value is unlimited, because [fill in your reasons here].

To avoid all useless Twitter whining, yes, Tesla’s ability to turn GAAP profits — albeit at times by selling regulatory credits — is a win, and joining the S&P 500 is great. Delivering 500,000 cars in 2020, a full 75% of GM’s third-quarter deliveries, is impressive as well.

I am certainly not arguing that Tesla is worthless, or that the group of companies like those that comprise the ARK Innovation ETF, are all overpriced. Instead, it seems that today’s market is willing to value stocks not on their past performance, current performance or analyst-expected future performance but on the rosiest future that investors have imagined for their favorite companies.

You can see elements of this logic at work if you ever talk about stocks on the internet. Don’t call Tesla a car company, for example — this despite automotive revenues making up nearly 87% of the company’s Q3 top line. Tesla is a battery company, its religious fans will tell you.

That’s why it’s fine to pay 31x sales for Tesla, while GM is worth 0.5348x sales today. Amazon, for comparison, is worth 4.6x sales. Tesla shares are valued like Twilio’s own in terms of their price-sales ratio, but the difference is that the car company had gross margins of 23.5% in Q3 2020, while the software company managed twice that. And Twilio is growing more quickly.

Cruise, the autonomous vehicle technology subsidiary of GM, said Friday it has hired Delta Air Lines’ former chief operating officer Gil West as it makes the transition towards early commercialization.

West, who had retired from Delta last year, will become Cruise’s first chief operating officer. The announcement comes more than month after Cruise launched tests on public roads using autonomous vehicles without a human safety operator behind the wheel. The testing is still being conducted in a limited geographic area in San Francisco and in one of the city’s less congested neighborhoods, but it is was still viewed as a milestone for the company and a necessary step to secure a permit to launch a shared, commercial service that can charge for rides.

West comes to Cruise with more than 12 years experience running a massive global operation at that had an annual $16 billion budget. During his tenure, he helped Delta grow its earnings per share by more than 15% year-over-year and led the company’s merger integration with Northwest Airlines.

Cruise CEO Dan Ammann, who was president of GM until 2018, said West’s track record of customer experience, operating performance and safety at a large scale makes him “a perfect fit for Cruise as we begin the journey to commercialize our self-driving technology.”

Cruise had once aimed to launch a commercial service using so-called “driverless” vehicles by the end of 2019, but backed off of that timeline — a decision that came after several other autonomous vehicle companies delayed their own plans to launch ride-hailing services that use autonomous vehicles. Cruise has yet to publicly provide a new date for launching a commercial service, the first of which will be in San Francisco.

Cruise, which is also backed by Softbank Vision Fund and T. Rowe Price & Associates, has hundreds of autonomous vehicles in its fleet, however most still have a human safety operator behind the wheel. In November, Cruise started driverless testing — nomenclature meaning the human safety operator has been removed from the driver’s seat — with a fleet of five autonomous vehicles. The rest of Cruise’s fleet is being used to perform its regular testing with a human safety driver, some of which are used to deliver goods to area food banks.

The California DMV, the agency that regulates autonomous vehicle testing in the state, issued Cruise a permit in October that allows the company to test five autonomous vehicles without a driver behind the wheel on specified streets within San Francisco. Cruise has had a permit to test autonomous vehicles with safety drivers behind the wheel since 2015.

In February, Cruise received a permit from the California Public Utilities Commission allowing it to transport passengers in its autonomous vehicles in the state. The CPUC modified its regulations late last year to allow properly permitted companies the ability to charge for shared driverless rides.

Cruise has to show data that it tested driverless rides for a 30-day period before it can qualify for the CPUC permit, according to information on the CPUC website.

Days after a mob broke into the U.S. Capitol amid protests against Donald Trump’s 2020 election loss, another major social media platform has banned a popular pro-Trump forum. Reddit this morning confirmed that it has banned the r/donaldtrump subreddit.

A spokesperson for the site tells TechCrunch,

Reddit’s site-wide policies prohibit content that promotes hate, or encourages, glorifies, incites, or calls for violence against groups of people or individuals. In accordance with this, we have been proactively reaching out to moderators to remind them of our policies and to offer support or resources as needed. We have also taken action to ban the community r/donaldtrump given repeated policy violations in recent days regarding the violence at the U.S. Capitol.”

While r/donaldtrump didn’t approach the infamy of some other pro-Trump subreddits, the site was a current hub for the Stop the Steal movement. The subreddit also encouraged attendees to attend the D.C. rally that turned into deadly violence at the Capitol: A side banner on r/donaldtrump showed an image of President Trump as Uncle Sam. “POTUS wants you in D.C. on 1/06/21” it read.

TechCrunch has reached out to Reddit for more specifics about why the subreddit was removed.

Prior to the invasion of the Capitol, many Trump supporters attended Trump’s own event, a rally near the White House. While that event was stationary around a stage, Trump eventually encouraged its attendees to march toward Congress to continue expressing their outrage at the election results.

Reddit has historically hosted large pro-Trump communities known for their toxic behavior and open violent threats against public figures. Last June, Reddit banned the most prominent of those, controversial subreddit r/The_Donald amid a larger sweep of pages. A year prior, Reddit quarantined r/The_Donald, making it more difficult to discover and requiring an opt-in screen for anyone seeking to visit.

Reddit’s decision to close the hub for Trump supporters follows several other de-platformings on major services, including Facebook, Twitch, Twitter, Instagram, Snapchat and Shopify.

We last polled our network of investors on the topic of gaming infrastructure startups back in May just as it was becoming clear what pandemic opportunities were in store for gaming startups.

Accel’s Amit Kumar told us at the time that “social and interactivity layers spanning across these games” were poised to be the big winners, highlighting his firm’s investments in startups like Discord and Mayhem. In December, Discord announced it was raising at a valuation of $7 billion and this month Pokémon Go creator Niantic announced it was buying Mayhem.

Following my story this week digging into investor sentiment around evolved opportunities in social gaming, I dug into gaming tools and rising platforms and pinged a handful of VCs to hear their thoughts on that market.

The broader market moves of the past several months have defied expectations with startups in the gaming world picking up substantial steam as well. This week, Roblox announced it had raised at a $29.5 billion valuation — up from $4 billion in February of last year. Game makers across the board, including Roblox, have been acquiring gaming infrastructure startups as of late.

I talked to investors about what they wanted to see more of in the space.

“We’d love to see more innovation around gaming infrastructure, which has the potential to democratize game development and allow clever indies to compete with Riot and Epic,” Bessemer’s Ethan Kurzweil and Sakib Dadi told TechCrunch.

They highlighted numerous areas for new opportunity including specialized engines, next-gen content creation platforms, and tools to port desktop experiences to mobile. The VCs we chatted with were also intrigued by latent opportunities presented by major platforms’ adopting of cloud gaming tech. The overall trend was one promoting accessibility, a desire to provide more casual experiences for platforms that may have typically catered to “hardcore” audiences.

It was also apparent from conversations that Roblox is significantly shaping investor attitudes toward the potential growth opportunities and pitfalls in the entire gaming industry, with VCs who didn’t get in on Roblox eager to dissect its success and bet on an adjacent player or one that could follow a similar recipe for success.

Responses have been edited for length and clarity. We spoke with:

• Hope Cochran, Madrona Venture Group
• Daniel Li, Madrona Venture Group
• Ethan Kurzweil, Bessemer Venture Partners
• Sakib Dadi, Bessemer Venture Partners
• Alice Lloyd George, Rogue VC
• Gigi Levy-Weiss, NFX

Hope Cochran and Daniel Li, Madrona Venture Group

Cloud game-streaming networks are exciting but don’t seem like a sure bet quite yet, how do you feel about them?

DL: I think the real story behind cloud gaming is “play anywhere” and the cross-platform nature of it. Gaming is just different than Netflix, it’s not like you want to have an endless library of content. When I’m playing a game, I want to play Overwatch all the time and I don’t need to have access to 1,000 other games. I think the approach that the cloud companies have taken has been more around the thinking of, what do we have and what can we build for gamers with it? More so than what do gamers want and what can we give them? It’s definitely trended toward that direction with things like giving away two free games per month, but really I think the thing that will be exciting in the longer term for cloud gaming is to play your game anywhere and play with your friends anywhere.

If users embrace desktop-class cloud gaming on mobile and there’s a broader cross-platform unification, does that spell trouble for today’s mobile gaming industry?

DL: The audiences between a Candy Crush and a Warzone are probably a little different, though I like to play both. So maybe it gets into eating some people’s lunch but I don’t think it’s anything where the number one problem for a Candy Crush is people hopping over to play desktop Call of Duty.

Are there any clear infrastructure gaps where you’d like to see new startups rise up and fill the void?

DL: Honestly just tools for building games, like next-gen Roblox Studio, next-gen Unity and Unreal type stuff — I’ve seen a couple interesting companies there. I think we’ve seen a few smaller companies focused on making sure that a network is safe for children, but I feel like a lot of the infrastructure stuff is really driven by what type of new content is coming out. So as the social games became really popular, securing that and making sure that the chats were safe became really important.

HC: I would love to see something built for helping games that were created for the triple-A environment to port over better to mobile environments. Every time I work with a gaming company on that, they seem to have to rebuild the game so it’d be really interesting to see something like that really helps them adopt to the mobile form.