Category: UNCATEGORIZED

Jumbotail, an online wholesale marketplace for grocery and food items, said on Friday it has raised an additional $14.2 million as the Bangalore-based startup chases the opportunity to digitize neighborhood stores in the world’s second largest internet market.

The five-year-old startup said the new tranche of its Series B financing round was led by VII Ventures, with participation from Nutresa, Veronorte, Jumbofund, Klinkert Investment Trust, Peter Crosby Trust, Nexus Venture Partners, and Discovery Ventures.

The startup told TechCrunch that the new tranche concludes its Series B round, which it kickstarted in 2019 with $12.7 million in funding. It ended up raising about $44 million in the Series B round (including Friday’s tranche), and to date has amassed about $54 million in equity investment, the startup told the publication.

Jumbotail said it serves over 30,000 neighborhood stores (popularly known in India as kiranas) in the country. In addition to its business-to-business marketplace, the startup also provides working capital to neighborhood stores through partnerships with financial institutions.

The startup, which has built its own supply chain network to enable last-mile delivery, also supplies these stores with point-of-sale devices so that they can easily get access to a much wider selection of catalog and have the new inventory shipped to them within two days. It also integrates these stores with hyperlocal delivery startups such as Dunzo and Swiggy to help mom and pop shops further expand their customer base.

Ashish Jhina, co-founder of Jumbotail, said he believes the startup has reached an inflection point in its growth and is now ready for its next chapter, which includes hiring top talent and expanding to more regions in the country, especially in several cities in South India.

“We are seeing tremendous interest from investors across the globe who are drawn to our highly scalable and operationally profitable business model, built on the industry’s best technology and customer NPS,” said Jhina, who previously served in Indian army and then worked at e-commerce firms eBay and Flipkart.

At a recent virtual conference, Jhina said that the coronavirus pandemic, which prompted New Delhi to order a nationwide lockdown and put restrictions on e-commerce firms, has illustrated just how crucial neighborhood stores are in people’s lives. And for all the ills that the virus has wrought to the world, it did help accelerate the adoption of technology among these stores.

A number of food brands whose products neighborhood stores sell today are not standardized, which poses a question about their quality. To fill this gap, Jumbotail runs its own private label portfolio and Jhina said the startup will deploy part of the fresh fund to broaden this catalog. Having private label also allows Jumbotail to ensure that its retail partners can get the supply of items throughout the year — and of course, it also helps the startup, which has been operationally profitable for nearly three quarters, improve its margin.

There are more than 30 million neighborhood stores in India that dot across the thousands of cities and towns in the country. These small businesses have been around for decades and survived — and even thrived — despite e-commerce giants pouring billions of dollars in India to change how people shop. In recent years, scores of startups — and giants — in India have begun to explore ways to work with these neighborhood stores.

One of them is India’s largest retail chain Reliance Retail, which serves more than 3.5 million customers each week through its nearly 10,000 physical stores in more than 6,500 cities and towns in the country. In late 2019, it entered the e-commerce space with JioMart through a joint venture with sister subsidiary telecom giant Jio Platforms. By mid last year, JioMart had expanded to over 200 Indian cities and towns — though currently its reach within those cities and customer service leave a lot to be desired.

Reliance Retail also maintains a partnership with Facebook for WhatsApp integration. Facebook, which invested $5.7 billion in Jio Platforms last year, has said that it will explore various ways to work with Reliance to digitize the nation’s mom and pop stores, as well as other small- and medium-sized businesses.

For JioMart, Reliance Retail is working with neighborhood shops, giving them a digital point-of-sale machine to make it easier for them to accept money electronically. It is also allowing these shops to buy their inventory from Reliance Retail, and then use their physical presence as delivery points. At present, the platform is largely focused on grocery delivery. In a recent report to clients, Goldman Sachs analysts estimated that Reliance could become the largest player in online grocery within three years.

General Motors has changed its logo, refreshed its website and kicked off a new “Everybody In” marketing campaign as part of a broader effort to illustrate the company’s transformation to a modern, fast-moving and inclusive organization that is serious about accelerating the adoption of electric vehicles.

The changes were unveiled Friday as part of GM’s presence at the virtual 2021 CES tech trade show that officially begins January 11. The restyled website will go live January 11.

This is the fifth time GM has changed its logo in its 115-year history and probably the most progressive thing that we’ve done since 1964, GM chief marketing officer Deborah Wahl said in a press call with reporters Friday. The all-cap GM logo has changed to a lowercase ‘gm’ with a softer blue gradient evoking clean skies of a zero emissions future and an underline below the ‘m,’ a nod to GM’s underlying Ultium battery architecture. The negative space around the ‘m’ even looks like an electrical plug, said Wahl.

“It’s optimistic, it brings energy and vibrancy and reflects our view of the future,” she said. “It does build on our strong heritage, with a key element of recognizable consistency and trust. But overall, it really wants to humanize our company and this brand identity project was actually led in-house by team of our designers who took it on knowing that it represents all 164,000 of our employees.”

Surfer Bethany Hamilton in a new ad campaign by GM that launched in January 2021.

The effort is meant to be more than just a logo change and a slew of new ads that feature everyday folks alongside cameos from author Malcolm Gladwell, surfer Bethany Hamilton, gamer Erin A. Simon and Peloton cycling instructor Cody Rigsby. It’s meant to show a company that has truly evolved from a slow-moving legacy automaker to one that can be nimble, tech-centric and appealing to the next-generation of car owners.

GM wants to inspire; and these changes are meant to kick off its makeover.

Of course, there is real money and resources behind this evolution. GM said in November it will spend $27 billion over the next five years on the development of electric vehicles and automated technology, a 35% increase that exceeds the automaker’s investment in gas and diesel and is an effort to bring products to market faster.

More than half of GM’s capital spending and product development team will be devoted to electric and electric-autonomous vehicle programs, the company said at the time.

The U.S. automaker is also accelerating its go-to-market timeline and adding more EVs to its portfolio plans. GM plans to bring 30 new electric vehicles to a global market through 2025. The company had previously committed to 20 EVs by 2023. More than two-thirds of those launches will be available in North America and every one of GM’s brands, including Cadillac, GMC, Chevrolet and Buick, will be represented, according to the automaker.

Tesla has started taking orders for a cheaper standard range version of the Model Y in an apparent reversal by CEO Elon Musk who earlier this year seemed to put plans to release the vehicle on hold. 

Electrek was the first to report that Tesla had updated its website to include the Model Y standard range, which will start at $41,990. That’s nearly $9,000 cheaper than the long range version that is currently sold by Tesla. The model Y standard range is a rear-wheel drive while the long range and even more expensive performance versions comes in all-wheel drive.

The cheaper price comes with a lower estimated EPA range of 244 miles compared to the 326 miles in the long range version. 

Tesla said nearly two years ago that it planned to begin producing the standard range version of the Model Y in spring 2021. But in July, Musk tweeted that the variant had been removed from the website because the lower range “would be unacceptably low (< 250 mile EPA).”

Tesla is now offering a 7-seat option for the Model Y as well, according to updates on its website.

Taiwan is known for being a tech powerhouse, the headquarter of companies like Foxconn, Pegatron, TSMC, Acer and Asus. But while Taiwan’s tech industry is defined by well-established players, it is also home to a growing startup scene. Ahead of the official start of CES, the Taiwan Excellence awards were announced by non-profit trade promotion group Taiwan External Trade Development Council (known as TAITRA) and ShowStoppers, giving a preview of what its startups offer. Awards went to seven startups, while eleven other companies also presented. They cover a wide range of sectors, ranging from fitness and health to industrial monitoring.

More startups will showcase their tech next week at CES’ Taiwan Pavilion, organized by Taiwan Tech Arena.

The seven Taiwan Excellence Award winners are:

Advantech’s WISE-2410 vibration sensor

Advantech‘s LoRaWAN solutions are designed to control applications across wide distances and have been used for diverse array of scenarios, including monitoring floods, critical care patients in hospitals and transportation infrastructure. Two of its latest devices include the WISE-6610, a gateway for connecting up to 500 sensors and sending their data to cloud platforms using 3G/LTE or wired Ethernet connections. The other one is the WISE-2410, a vibration sensor for monitoring motor-powered mechanical equipment and identifying potential issues so manufacturers can schedule maintenance before machines malfunction, resulting in expensive downtime.

Cyberlink is the developer of the machine learning-based FaceMe Facial Recognition Engine, which is used in AIoT applications, including security, smart retail and surveillance. As the COVID-19 pandemic continues, CyberLink’s new product FaceMe Health can identify faces even without masks on, and send alerts if someone isn’t wearing a mask or has a high temperature. It is meant to assist in pandemic control measures at places like hospitals, airports, retail stores and factories.

Dyaco‘s workout equipment line, called SOLE Fitness, includes its new SOLE CC81 Cardio Climber, which combines features from steppers and climbers into one machine. The SOLE CC81 is designed to be ergonomic, so users can get high-intensity cardio workouts while reducing wear on their joints.

Green Jacket Sports is showcasing its Golface smart system, which helps golf courses monitor and collect data on their operations in real-time, while allowing golfers to track their performance. The smart system’s other features include includes aerial videos and real-time scoring functions.

Maktar is the maker of a smartphone backup device called Qubii. Shaped like a small cube, Qubii automatically backs up phones while they are charging and doesn’t need internet or WiFi connections. Instead, users insert a microSD card into Qubii and connect it to their smartphones with their usual power adapters or chargers. Every time the smartphone is charged, Qubii backs up their photos, videos and contacts. The device also has a patented SD card lock feature to protect data.

MiTAC Digital Technology’s Mio dashcam range produces clear videos even in dark spaces like parking lots. The latest Mio dashcam, called the MiVue 798, uses Sony’s lowlight STARVISTM sensor and an all-glass lens, and produces wide-angle videos with quality of up to 2.8K. The MiVue 798 also has embedded WiFi connectivity for video backups and online sharing through the MiVue Pro App. Other features include GPS tracking, a patented smart alert system with fixed-distance warnings and speed limit alerts, and a driver assistance system that warns of lane departures, driver fatigue and forward collisions.

Winmate will present its M133WK Ultra Rugged Tablet PC, created for vehicle diagnostics. Powered by 8th-gen Intel Core i5-8265U Whiskey Lake processor, for high performance with low power consumption, the M133WK features a 1920 X 1080 PCAP touchscreen that is viewable even in heavy sunlight.

Here are the other 11 startups that TAITRA and ShowStoppers are presenting:

ATrack‘s AK11 Fleet Hub is a 4G LTE device for the real-time management of fleets across different verticals.

ELECLEAN 360 uses what it describes as the “world’s first nano-catalysis electrochemical technology” to turn water into hydrogen peroxide and hydroxyl radicals, for cleaning and disinfection.

In Win Development is introducing the SR Pro CPU Cooler, which uses patented twin-turbine pumps running in parallel to optimize water flow and ensure thermal performance. It comes with high-airflow AJF120 fans to cool PCs more quickly.

Innolux makes full range of LCD panels for televisions, monitors, notebooks, industrial, medical, mobile and other applications.

Planet Technology is building a secure network called PLANET Powerful Enterprise VPN Cybersecurity and Firewall Solutions for the “post-COVID-19 era.”

Rice Air makes LUFT Cube, a small filterless nanotech personal air purifier.

Systems & Technology Corp. (Systech)‘s fleet management platform uses intelligent telematics so organizations can track where vehicles are and more efficiently manage their fleets.

Tokuyu Biotech creates smart massage chairs and health care-related products that are connected to apps and sensor technologies.

Winnoz is the maker of Haiim, a portable vacuum-assisted device for collecting blood samples from fingertips.

WiseChip develops transparent OLEDs with touch functions for use in home appliance control panels, automotive, transportation applications (like passenger information display systems) and wearable devices.

Yztek‘s E+ Autoff is an IoT device created to stop people from forgetting to turn off their stoves. In addition to auto turn-off, it also has cooking time adjustment and energy saving features.

Bitcoin fans across the country are rallying against a common enemy, the Treasury’s Financial Crimes Enforcement Network (FinCEN).

US Treasury Secretary Steven Mnuchin, one of President Donald Trump’s closest associates, has been working overtime since Thanksgiving to push several crypto regulations through before the Biden administration takes over on January 20, 2021.

FinCEN statements list the usual reasons for financial regulations, an effort to curtail terror financing, sanctions evasion and black market activity related to drugs and weapons, without any mention of new evidence justifying the unusual urgency.

These include a FinCEN proposal that would require exchanges to store records involving transactions over $3,000 sent to any personal wallets, plus report users to FinCEN for cumulative transactions worth more than $10,000 in a single day. For comparison, banks are required to flag cash withdrawals over $10,000, not transactions within the banking system itself, and banks are not required to keep tabs on where the customer spends the cash taken out of the system.

Plus, a complementary FinCEN statement proposed requiring Americans to report crypto holdings worth more than $10,000 at any foreign service provider. Although the details of this second initiative are still vague, it’s clear the Treasury wants to make special note of the know-your-customer information for anyone dealing with thousands of dollars worth of bitcoin.

The Electronic Frontier Foundation called this a “push for more financial surveillance” without any need for warrants or suspicion. (Bitcoin users already need to report their holdings in their taxes, just like any other asset.) As such, over 65,615 crypto advocates submitted critical statements to FinCEN, including companies like Fidelity and Square. Square’s statement said the company “would be required to collect unreliable data about people [recipients] who have not opted into our service or signed up as our customers.”

The Washington D.C. nonprofit Coin Center issued a statement saying this proposal would also limit American access to decentralized services, where users may not know their counterparty or network operators. Peter Van Valkenburgh, Coin Center’s research director, told TechCrunch the proposal is highly unusual because it only allowed for 15 days of comments, instead of the standard 60-day period, for a rule that would impose more data collection requirements on crypto companies than other financial institutions.

“It requires the exchange to collect, retain and report extra information that they don’t have to for a cash transaction, like the name and physical address of a counterparty,” he said. “It’s on a timeline to complete this process, as far as we know right now, before the new administration. That means the rule would be final. The new administration could issue a new rule, and overturn that past rule, but that’s a much more difficult process.”

Incoming Senator Cynthia Lummis, sworn in the first week of January, tweeted it was “ridiculous” for the Treasury to have this unusually short comment period. Likewise, nine members of Congress issued a letter warning this hasty rulemaking over the winter holidays undermined the legitimacy of the process.

These proposals aren’t just sudden, they’re also so vague that they appear poorly researched. Both Square Crypto developer Matt Corallo and MIT Media Lab director Neha Narula issued public statements saying the FinCEN proposals confused basic technical concepts about how bitcoin addresses work. This would make such regulations difficult to implement, burdening American companies with prohibitively high compliance precautions.

“Political motivations are always hard to discern, but public rumors have consistently indicated this is a personal push by Mnuchin, not further up or down,” Corallo said. “We’ll learn a lot about what the next few years look like based on what [incoming Secretary Janet] Yellen says and what new leadership at FinCEN looks like. There are a lot of things Yellen could decide, but it would be hard for her to do a worse job of building useful and practical regulations than Mnuchin’s last-minute attempts here.”

Van Valkenburgh said his nonprofit, and other crypto industry organizations like it, are prepared to challenge the ruling in court if the Trump administration fails to follow the legislative process. Namely, the Treasury is required to read and consider all of the public comments submitted by January 7, 2021, the arbitrary date set by the rulemakers themselves.

“They technically then have the power to issue the final rule, saying they considered all the comments,” he said. “But if it’s obvious that they didn’t consider all the comments, which I feel like it would be if the final rule came out any time before the new administration comes in, it would be very easy to argue in court that the requirement to read and consider all the comments has not been met.”

As it stands, Van Valkenburgh said it appears the outgoing administration intends to “saddle” the incoming administration with “chaos.”

So it turns out that Roblox is worth $29.5 billion.

That’s the lesson the market learned this week when the gaming platform company announced that it had raised $520 million in an epic Series H.

For a company valued at just $4 billion last February when it raised $150 million in a round led by Andreessen Horowitz, that new valuation could be considered a victory. But is it?

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

For all the griping amongst private-market capitalists that public-market capitalists are ripping off their investments as they look to cross the private-public divide through an IPO, it’s hard to square a company’s valuation going from $4 billion to nearly $30 billion in just 11 months.

Sure, you could argue that Roblox enjoyed an epic 2020, thanks in part to COVID-19. That helped its valuation. But there’s a lot of space between $4 billion and $29.5 billion, and recall that its February Series B valued Roblox at around 7.3x its Q4 2019 revenue run rate.

The same company at its new $29.5 billion valuation is now priced at just over 30x its Q3 2020 run rate (the most recent quarter for which we have data today).

Perhaps Roblox was right to hold off on its IPO, raise a huge block of cash at a new valuation and pursue a direct listing. But it’s hard to fret heavily about private-market complaints concerning startup value when the IPO facilitators are hardly the only folks making trips to the bank with a wheelbarrow.

All that is preamble. This morning, let’s talk about Roblox’s flotation strategy. Why is the company raising private market money and then floating instead of raising public market money on its path to trading as a public company? And does its strategy solve the major flaws that the IPO process appears to have? Let’s get into it.

The ol’ raise-and-float

One way to go public is to file an S-1, prepare a presentation, go on a roadshow, drive interest in your shares and work with bankers to price the shares you want to sell at a dollar amount all parties can agree to. The next morning, your shares begin to trade, and you count the money you raised.

That is a traditional IPO, admittedly simplified.

There are issues in there, namely that the price discovery mechanism has proved to be uncertain, especially when it comes to the public offerings of companies considered attractive investments by the active retail trading market. Why? The hotter the company, the fewer shares that are available for trade at the start of its life as a public firm — the very opposite of that which is happening on the demand side.

Lots of demand, few shares, and up goes the price. And then up go the complaints that Wall Street is a bunch of thieves. Hearing this from other capital players is always whimsical to some degree, but let’s stick to our theme.

The coronavirus pandemic challenged the status quo and completely changed normal life as we knew it. However, with these challenges have come new opportunities to adapt and participate differently in the world. One of the first trends was that cash is no longer accepted.

The transition to cashless transactions, which at first seemed minor, made my customer experience seamless. Going wallet-free made me wonder why I ever carried cash at all!

Cashless life has been widely adopted in Asian countries for quite some time, but it wasn’t universally adopted across the United States until the coronavirus pandemic. The convenience of cashless transactions just makes sense, but my hope is that this convenience doesn’t come at the cost of other aspects of commerce.

Inaccessibility, fees and thoughtless spending are some of the potential problems that come to mind with cashless spending. For a truly cashless society, here are five key points for consideration:

1. Payment processors currently have the upper hand, forcing fees onto customers

For the sake of a cashless transaction, we have given up our last direct authentic connection with our favorite baristas, small businesses and independent brands. When I take out my credit card or phone to pay, I am not thinking about the fees that both myself and the merchant are paying to facilitate what was once a fee-less transaction. Losing this direct connection with my merchant has given payment processors the upper hand, allowing them to demand an unjustifiable fee of up to 3%.

With virtual payments, my cash is essentially in my phone and the barista is directly in front of me, but the transaction does not work like cash. The merchant will need to pay the fee on my transaction. If the cash revenue for that coffee shop used to be 20% of their revenue pre-COVID, they will now need to pay the fees on 20% of their revenue. Sadly, the merchant response over time is to raise prices. Historically, the adoption of a cashless exchange results in fees being passed through to the customer.

Through price increases across the board, the customer is always bailing the merchant out for the cost of the electronic, seamless, safer-than-ever money exchange. Furthermore, the customers are even “forced” to tip digitally from predefined settings, removing all meaning of tips as an emotional social contract. This new normal means that customers will end up paying $4 in a digital transaction for a coffee that used to cost $3 in cash.

2. Platforms must adapt new models to forgo transaction fees

Given that software and intelligent platforms have always lowered the cost of services when they are used at scale, why has this reduction of cost not yet applied to digital financial transactions? Customers need to demand that cashless transactions operate in the same way as cash transactions.

Even if we continue with a fee model, why would regular, loyal and verified customers always pay (directly or indirectly) the hefty cost of the exchange on top of the cost of credit? There should be a differentiation between these different types of transactions, regular or new, and appropriate fees that make sense.

3. Product experiences must promote conscious spending

Paying with digital or credit cards almost feels like paying with someone else’s money, which can be a dangerous feeling when considering that the user does not see this money spent instantly. Say your regular coffee costs $3. Paying for that coffee with cash is a very different experience than paying with a card or a digital wallet.

When you have a finite amount of cash in your pocket, the physical act (and sometimes mental pain) of spending makes the money feel different and more valuable than the invisible money that you spend via your credit or debit card. In many ways, the silent pain we endure while paying in cash has been subconsciously raising our awareness about our spending.

4. Accessibility and use must extend to all

The idea of a cashless society has thus far not been very inclusive to the unbanked and underbanked population. To support a new model, this underserviced sector needs to be able to utilize this software. A user needs to be able to walk into a grocery store and give the cashier $100 for them to upload the money to their virtual wallet.

Alternatively, a friend needs to be able to send $100 to their virtual wallet. For a cashless society to work, virtual payments need to work with ease and certainty that they will be accepted at any and all locations, just like cash.

5. The path to an open wallet

Have you ever ordered a $15 meal on a food delivery app, only for the total to end up over $25? Beyond the delivery fee, tips and taxes, delivery apps are pricing in extra fees to offset the fees charged by credit card and payment companies. In an effort to avoid these extra fees, apps like Lyft and Uber have begun deploying their own digital wallets supported by ACH transfers.

Sadly, consumers are unlikely to see the benefit until these wallets reach wide adoption, which is clearly not happening because no one wants yet another app-specific wallet.

The way forward

To truly empower the consumer, both Google and Apple should keep developing their digital wallets with an open API payment system to allow all apps to securely interact with it for free. This will transform the Google and Apple wallet and will better service the unbanked and underbanked populations instead of just being a gateway for credit cards.

This would further support the unbanked or underbanked population as they too would be able to utilize an open wallet that can be refilled with cash in person. I should be able to use the cash I have in my virtual wallet with any app, website or physical merchant without paying a fee. I should also be able refill the wallet from my bank account or directly deposit some of my paycheck into my phone wallet. Merchants would also benefit from wallet-to-pay by paying no fees to Google and Apple.

Instead, the mobile wallet creator could introduce a new business model focused on discovery and connecting users and merchants, charging merchants for the connections that they facilitate.

In a not-so-distant future, when I get my new Apple or Google phone, it will have a wallet that can be used without fees for payment across all apps, in physical retail locations, and for peer-to-peer money transfers. The credit cards, or rather lines of credit, on my digital wallet will use an Affirm-like loan service that allows me to buy anything from a pack of gum to a luxury watch or even a car, just using my phone’s wallet.

Goldman Sachs and Mastercard should not be the only players in the credit space. Innovation is necessary in the digital wallet space to pioneer the movement to change the outdated fee models for the simple act of money exchange.

Quibi is dead, but its shows will live on.

The Wall Street Journal reported last week that Roku was in talks to acquire the short-form video service’s content, and this morning, Roku announced that it has indeed reached a deal for the exclusive distribution rights to all of Quibi’s programs.

Roku said it will make this content available for free with ads on The Roku Channel. That doesn’t just include the shows that were previously available on Quibi, but also “more than a dozen” programs making “their exclusive debut on The Roku Channel” — in other words, they were created for the service but unreleased due to the shutdown.

“Today’s announcement marks a rare opportunity to acquire compelling original content that features some of the biggest names in original programming,” said Roku’s vice president of programming Rob Holmes in a statement. “We’re excited to make this content available to our users in The Roku Channel through an ad-supported model. We are also thrilled to welcome the incredible studios and talented individuals who brought these stories to life and showcase them to our tens of millions of users.”

While Roku is best known for its streaming TV devices and software, advertising is a growing part of its business. And it says The Roku Channel (which offers both free content and subscription channels) reached 61.8 million U.S. viewers in the fourth quarter of last year.

Quibi, meanwhile, announced its shutdown in October, about six months after its splashy launch. The service was focused on creating video episodes that lasted 10 minutes or less and were designed for viewing on-the-go — a poor fit for a period of pandemic and lockdowns.

In their farewell note, executives Jeffrey Katzenberg and Meg Whitman suggested that the service failed due to a combination of bad timing and the fact that “the idea itself wasn’t strong enough to justify a standalone streaming service.”

“The most creative and imaginative minds in Hollywood created groundbreaking content for Quibi that exceeded our expectations,” Katzenberg said in today’s announcement. “We are thrilled that these stories, from the surreal to the sublime, have found a new home on The Roku Channel.”

It’s also worth noting that the service was initially focused entirely on mobile viewing, with no way to watch the shows on smart TVs. That eventually changed, starting with the addition AirPlay support. Now, with the Roku acquisition, it seems that shows designed to be watched on your smartphone will instead be viewed primarily on your TV.

Zack Parisa and Max Nova, the co-founders of the carbon offset company SilivaTerra, have spent the last decade working on a way to democratize access to revenue generating carbon offsets.

As forestry credits become a big, booming business on the back of multi-billion dollar commitments from some of the world’s biggest companies to decarbonize their businesses, the kinds of technologies that the two founders have dedicated ten years of their lives to building are only going to become more valuable.

That’s why their company, already a profitable business, has raised $4.4 million in outside funding led by Union Square Ventures and Version One Ventures, along with Salesforce founder and the driving force between the 1 trillion trees initiative, Marc Benioff .

“Key to addressing the climate crisis is changing the balance in the so-called carbon cycle. At present, every year we are adding roughly 5 gigatons of carbon to the atmosphere*. Since atmospheric carbon acts as a greenhouse gas this increases the energy that’s retained rather than radiated back into space which causes the earth to heat up,” writes Union Square Ventures managing partner Albert Wenger in a blog post. “There will be many ways such drawdown occurs and we will write about different approaches in the coming weeks (such as direct air capture and growing kelp in the oceans). One way that we understand well today and can act upon immediately are forests. The world’s forests today absorb a bit more than one gigatons of CO2 per year out of the atmosphere and turn it into biomass. We need to stop cutting and burning down existing forests (including preventing large scale forest fires) and we have to start planting more new trees. If we do that, the total potential for forests is around 4 to 5 gigatons per year (with some estimates as high as 9 gigatons).”

For the two founders, the new funding is the latest step in a long journey that began in the woods of Northern Alabama, where Parisa grew up.

After attending Mississippi State for forestry, Parisa went to graduate school at Yale, where he met Louisville, Kentucky native Max Nova, a computer science student who joined with Parisa to set up the company that would become SiliviaTerra.

SilviaTerra co-founders Max Nova and Zack Parisa. Image Credit: SilivaTerra

The two men developed a way to combine satellite imagery with field measurements to determine the size and species of trees in every acre of forest.

While the first step was to create a map of every forest in the U.S. the ultimate goal for both men was to find a way to put a carbon market on equal footing with the timber industry. Instead of cutting trees for cash, potentially landowners could find out how much it would be worth to maintain their forestland. As the company notes, forest management had previously been driven by the economics of timber harvesting, with over $10 billion spent in the US each year.

The founders at SilviaTerra thought that the carbon market could be equally as large, but it’s hard for moset landowners to access. Carbon offset projects can cost as much as $200,000 to put together, which is more than the value of the smaller offset projects for landowners like Parisa’s own family and the 40 acres they own in the Alabama forests.

There had to be a better way for smaller landowners to benefit from carbon markets too, Parisa and Nova thought.

To create this carbon economy, there needed to be a single source of record for every tree in the U.S. and while SiliviaTerra had the technology to make that map, they lacked the compute power, machine learning capabilities and resources to build the map.

That’s where Microsoft’s AI for Earth program came in.

Working with AI for Earth, TierraSilva created their first product, Basemap, to process terabytes ofsatellite imagery to determine the sizes and species of trees on every acre of America’s forestland. The company also worked with the US Forestry Service to access their data, which was used in creating this holistic view of the forest assets in the U.S.

With the data from Basemap in hand, the company has created what it calls the Natural Capital Exchange. This program uses SilviaTerra’s unparalleled access to information about local forests, and the knowledge of how those forests are currently used to supply projects that actually represent land that would have been forested were it not for the offset money coming in.

Currently, many forestry projects are being passed off to offset buyers as legitimate offsets on land that would never have been forested in the first place — rendering the project meaningless and useless in any real way as an offset for carbon dioxide emissions. 

“It’s a bloodbath out there,” said Nova of the scale of the problem with fraudulent offsets in the industry. “We’re not repackaging existing forest carbon projects and try to connect the demand side with projects that already exist. Use technology to unlock a new supply of forest carbon offset.”

The first Natural Capital Exchange project was actually launched and funded by Microsoft back in 2019. In it, 20 Western Pennsylvania land owners originated forest carbon credits through the program, showing that the offsets could work for landowners with 40 acres, or, as the company said, 40,000.

Landowners involved in SilivaTerra’s pilot carbon offset program paid for by Microsoft. Image Credit: SilviaTerra

“We’re just trying to get inside every landowners annual economic planning cycle,” said Nova. “There’s a whole field of timber economics… and we’re helping answer the question of given the price of timber, given the price of carbon does it make sense to reduce your planned timber harvests?”

Ultimately, the two founders believe that they’ve found a way to pay for the total land value through the creation of data around the potential carbon offset value of these forests.

It’s more than just carbon markets, as well. The tools that SilviaTerra have created can be used for wildfire mitigation as well. “We’re at the right place at the right time with the right data and the right tools,” said Nova. “It’s about connecting that data to the decision and the economics of all this.”

The launch of the SilviaTerra exchange gives large buyers a vetted source to offset carbon. In some ways its an enterprise corollary to the work being done by startups like Wren, another Union Square Ventures investment, that focuses on offsetting the carbon footprint of everyday consumers. It’s also a competitor to companies like Pachama, which are trying to provide similar forest offsets at scale, or 3Degrees Inc. or South Pole.

Under a Biden administration there’s even more of an opportunity for these offset companies, the founders said, given discussions underway to establish a Carbon Bank. Established through the existing Commodity Credit Corp. run by the Department of Agriculture, the Carbon Bank would pay farmers and landowners across the U.S. for forestry and agricultural carbon offset projects.

“Everybody knows that there’s more value in these systems than just the product that we harvest off of it,” said Parisa. “Until we put those benefits in the same footing as the things we cut off and send to market…. As the value of these things goes up… absolutely it is going to influence these decisions and it is a cash crop… It’s a money pump from coastal America into middle America to create these things that they need.” 

Google’s plan to end support for third party cookies in the Chrome browser and its Chromium engine is under investigation by the UK’s Competition and Markets Authority (CMA).

The antitrust regulator said today that it’s launched a probe under Chapter II of the UK’s Competition Act 1998 into “suspected breaches of competition law by Google”.

The move follows a complaint lodged in November by a coalition of digital marketing companies which urged the CMA to block Google’s implementation of the self-styled ‘Privacy Sandbox’.

The CMA also received complaints from newspapers and technology companies alleging the tech giant is abusing a dominance position, it added.

A Google spokesperson sent this statement in response to a request for comment on the CMA investigation:

Creating a more private web, while also enabling the publishers and advertisers who support the free and open internet, requires the industry to make major changes to the way digital advertising works. The Privacy Sandbox has been an open initiative since the beginning and we welcome the CMA’s involvement as we work to develop new proposals to underpin a healthy, ad-supported web without third-party cookies.

Google had previously said it would implement the Sandbox in 2021 — accelerating an earlier timeline for the phasing out of third party cookies and sending ripples of fear (and loathing) through an adtech industry that bet the farm on mass surveillance of Internet users.

No changes have been made so far, according to Google.

It also said today that any changes will not be made before 2022 — as it continues a process of public collaboration (now coupled with close regulatory engagement, via the CMA) on how to replace tracking cookies.

With the looming demise of third party cookies, digital marketers are concerned about their ability to target ads at web users as browsers decommission support for key tracking technologies.

But it’s worth noting that Google’s Chrome is actually the laggard in proposing to pull the plug on tracking cookies; WebKit, which underpins Safari, announced a tracking prevention policy back in 2019 — taking inspiration from Mozilla’s earlier anti-tracking stance. (The latter made third party cookie blocking in Firefox the default in September of the same year.)

These anti-tracking plays by browser-makers are, on one level, a response to consumer distaste over creepy ads and concern for their online privacy.

And in the European Union at least, many core elements of adtech infrastructure are subject to complaints and remain under regulatory scrutiny. (Albeit, the UK’s data protection regulator, the ICO, is currently being sued for failing to act on complaints about the lawfulness of real-time bidding which date back to September 2018.)

But the contention by the marketing, publishing and adtech businesses which are crying foul over the end of cookies is that tech giants — Google in this case — are using privacy as a convenient excuse to increase their market power (and control over user data) at smaller entities’ expense.

“The investigation will assess whether the proposals could cause advertising spend to become even more concentrated on Google’s ecosystem at the expense of its competitors,” the CMA writes in a press release announcing its investigation. “It follows complaints of anticompetitive behaviour and requests for the CMA to ensure that Google develops its proposals in a way that does not distort competition.”

The announcement also makes clear that the regulator is alive to the genuine issue of privacy concern — with the CMA writing that it’s been “considering how best to address legitimate privacy concerns without distorting competition”. This has included holding discussions with the Information Commissioner’s Office (ICO), and talking to Google to “better understand its proposals”, it says.

“The current investigation will provide a framework for the continuation of this work, and, potentially, a legal basis for any solution that emerges,” the CMA adds.

Exactly what will replace tracking cookies is still very much up in the air.

Google has made a number of proposals, via the W3C standards forum, including one called ‘Dovekey’ which suggests using a key value server and which Google says builds on the feedback and proposal from adtech firm Criteo’s Sparrow proposal.

It’s also shared the algorithms for its Federated Learning of Cohorts (FLoC) proposal — referring to a suggestion to use a specific machine learning technique to allow behavioral ad targeting to continue (but without needing to collect individuals’ data).

The wider adtech industry, meanwhile, has also been coming up with various ideas and offers for replacing tracking cookies. Such as the UnifiedOpen ID 2.0 proposal (that’s being built by The Trade Desk) and proposes a centralized system for tracking Internet users based on personal data such as an email address or phone number; or the Unified ID service launched by TechCrunch’s parent Verizon Media (leveraging its access to first party data), to name just two.

So whatever replaces tracking cookies looks unlikely to be simple or singular. Not least given the formal regulatory dimension that’s now been added to Google’s mix.

With its Sandbox project underway but no replacement for tracking cookies yet selected the CMA’s intervention certainly looks very strategic — giving the UK regulator a (potentially major) role in influencing the future shape of adtech.

Although it could also lead to regulatory divergence for adtech in the UK vs the European Union, where the Commission’s antitrust regulators have also been eyeing Google’s adtech practices but have not yet launched a formal investigation — depending on the outcome of any probe/intervention there.

Back in the UK, a recent CMA market study of the digital advertising sector led it to report substantial concerns over the power of the Google-Facebook adtech duopoly — and it sought views on breaking up the tech giants — although in its final report it deferred any competitive intervention in favor of waiting for the government to legislate.

Since then UK ministers have unveiled a plan to establish a pro-competition regulatory regime that will include a new statutory code of conduct, overseen by a Digital Market Unit (to be set up this year), with the aim of putting some hard limits on big (ad)tech — including potentially requiring them to offer users an opt out from behavioral advertising (something Facebook, for example, currently does not).