02 Aug 2021

Google gives the world its first official glimpse of the Pixel 6

While the company isn’t revealing everything about it just yet, this morning Google gave the world its first official peek at its next flagship phone: the Pixel 6.

Here’s what we know so far:

  • It’ll come in two forms: Pixel 6 and Pixel 6 Pro.
  • The base 6 will have a matte aluminum finish with a 6.4″ display, while the Pro has a shinier polished aluminum finish with a 6.7″.
  • If you were hoping the increasingly common “camera bump” trend was on the way out… not quite. The bump has now evolved into the “camera bar”, with Google’s Rick Osterloh noting that better sensors and lenses just won’t fit in a smaller package.
  • These will be the first phones to run Tensor, Google’s first entirely custom system-on-a-chip. Previous Pixels have run on Qualcomm’s Snapdragon platform. Google CEO Sundar Pichai says they’ve been working on the chip for 4+ years. In a blog post announcing the devices, Osterloh suggests that the focus here is making a chip tuned for on-device AI and ML.
  • They’ll ship sometime “this fall.”

Lots of details, including pricing and much of the spec sheet (CPU, RAM, etc.) are still a mystery for now — though earlier leaks seem to be spot on, so far.

02 Aug 2021

Pokémon GO influencers threaten a boycott after Niantic removes COVID safety measures

The creators of Pokémon GO, Niantic developed one of the first mainstream augmented reality games, boasting 166 million users and over a billion dollars in revenue last year. Taking inspiration from the main series Pokémon games, Pokémon GO uses in-game incentives to encourage users to explore their surroundings, team up with other users to fight legendary beasts, and travel to places they’ve never been before.

Before the pandemic, this posed an accessibility issue — when certain tasks could only be completed by walking a certain distance, for example, it alienated users with physical conditions and disabilities that prevent them from easily taking a walk around the neighborhood. Plus, for players in wheelchairs, it might be impossible to access certain PokéStops and Gyms. It’s necessary to interact with these real-world landmarks to play the game to its fullest.

When much of the world entered lockdown March 2020, Pokémon Go doubled the size of the radius that players can be within to interact with a PokéStop or Gym, widening the radius from 40 meters to 80 meters. So, you could now be further away from a landmark but still reap its rewards. This made it easier for users to play from home, or play outside while social distancing — but it also made the game much more accessible. Plus, for a game that still gets a bad rep for causing traffic accidents, the increased radius helped pedestrian players access landmarks without brazenly jay-walking across the street (to be fair, it’s on users to make smart decisions while gaming in augmented reality — but, Niantic has responsibility here too). And for businesses that happened to be located in a prime location for raid battles, which require players to gather in-person within a Gym’s radius to defeat rare monsters, this meant that Pokémon players could maintain a respectful distance from store fronts while playing the game (later in the pandemic, it became possible to join raid battles remotely — this feature will remain in the game, probably because it proved profitable).

These pandemic incentives were always framed as temporary bonuses, but players embraced the changes — in 2020, Pokémon GO had its highest-earning year yet. Now, the increased landmark radius has been removed “as a test” in the U.S. and New Zealand.

“As we return to the outside world again, these changes are aimed at restoring the focus of Pokémon GO on movement and exploration in the real world,” the company wrote in a blog post. “These changes will be introduced slowly and carefully to make it more exciting to explore the world around you.”

One new incentive gives users 10x XP for visiting a new PokéStop for the first time (or, in real-world terms, visiting a new place). But as the Delta variant spreads in the U.S., players find these changes to be frustrating and misguided. Why roll back features that made the game more accessible while also netting the company more money?

The Pokémon Go YouTuber, Reversal, who has created sponsored content for Niantic, wrote that he will quit the game if changes aren’t being made ASAP. Other players launched a petition with over 130,000 signatures to keep increased PokéStop and Gym interaction distance. Prominent Pokémon Go content creators like ZoëTwoDots and The Trainer Club have referenced a potential boycott of the game in videos they uploaded today, citing Niantic’s refusal to listen to community concerns after they announced the impending end of pandemic bonuses in June.

“I’m more than down to boycott the game with everyone if we’re vibing that,” ZoëTwoDots, who has also worked as an influencer for Niantic, told her 212,000 subscribers. “I know for myself personally, I’m just straight up not spending money in the game going forward until they address it publicly.”

As the game celebrates its five year anniversary, the conflict it now faces isn’t about players wishing for the game to be easier. Rather, this represents a failure by Niantic to listen to its user base, prioritize accessibility, and incentivize users to stay home as COVID-19 cases rise again in the U.S.

02 Aug 2021

The next generation of global payments: Afterpay + Square

Sunday was a big day in fintech: Afterpay has agreed to merge with Square. This agreement sets two of the most admired financial technology companies in recent history on a path to becoming one.

Afterpay and Square have the potential to build one of the world’s most important payments networks. Square has built a very significant merchant payment network, and, via Cash App, a thriving high-growth consumer payment service. However, these two lines of business have historically not been integrated. Together, Square and Afterpay will be able to weave all of these services together into a single integrated experience.

Afterpay and Cash App each have double-digit millions of consumers, and Square’s seller ecosystem and Afterpay’s merchant network both record double-digit billions of payment volume per year. From the offline register and the online checkout flow to sending money in just a few taps, Square and Afterpay will tell a complete story of next-generation economic empowerment.

As Afterpay’s only institutional venture investor, I wanted to share some perspective on how we got here and what this merger means for the future of consumer finance and the payments industry.

Afterpay and Square have the potential to build one of the world’s most important payments networks.

Critical innovations in fintech

Every five to 10 years, the global payments industry undergoes a critical innovation cycle that determines the winners and losers for the next several decades. The last major transition was the shift to NFC-based mobile payments, which I wrote about in 2015. The major mobile OS vendors (Apple and Google) cemented their position in the global payments stack by deftly bridging the needs of the networks (Visa, Mastercard, etc.) and consumers by way of the mobile devices in their pockets.

Afterpay sparked the latest critical innovation cycle. Conceived in a living room in Sydney by a millennial, Nick Molnar, for millennials, Afterpay had a key insight: Millennials don’t like credit.

Millennials came of age during the global mortgage crisis of 2008. As young adults, they watched their friends and family lose their homes by overextending on mortgage debt, bolstering their already lower trust for banks. They also have record levels of student debt. Therefore, it’s no surprise that millennials (and Gen Z right behind them) strongly prefer debit cards over credit cards.

But it’s one thing to recognize the paradigm shift and quite another to do something about it. Nick Molnar and Anthony Eisen did something, ultimately building one of the fastest-growing payments startups in history on their core product: Buy now, pay later … and never any interest.

Afterpay’s product is simple. If you have $100 in your cart and choose to pay with Afterpay, it will charge your bank card (typically a debit card) $25 every two weeks in four installments. No interest, no revolving debt and no fees with on-time payments. For the millennial consumer, this meant they could get the primary benefit of a credit card (the ability to pay later) with their debit card, without the need to worry about all the bad things that come with credit cards — high interest rates and revolving debt.

All upside, no downside. Who could resist? For the early merchants, virtually all of whom relied on millennials as their key growth segment, they got a fair trade: Pay a small fee above payment processing to Afterpay, get significantly higher average order values and conversions to purchase. It was a win-win proposition and, with lots of execution, a new payment network was born.

The rise of Afterpay

Image Credits: Matrix Partners

Imitation is the greatest form of flattery

Afterpay went somewhat unnoticed outside Australia in 2016 and 2017, but once it came to the U.S. in 2018 and built a business there that broke $100 million net revenues in only its second year, it got attention.

Klarna, which had struggled with product-market fit in the U.S., pivoted their business to emulate Afterpay. And Affirm, which had always been about traditional credit — generating a significant portion of their revenue from consumer interest — also noticed and introduced their own BNPL offering. Then came PayPal with “Pay in 4,” and just a few weeks ago, there has been news that Apple is expected to enter the space.

Afterpay created a global phenomenon that has now become a category embraced by mainstream players across the industry — a category that is on track to take a meaningful share of global retail payments over the next 10 years.

Afterpay stands apart. It has always been the BNPL leader by virtually every measure, and it has done it by staying true to their customers’ needs. The company is great at understanding the millennial and Gen Z consumer. It’s evident in the voice, tone and lifestyle brand you experience as an Afterpay user, and in the merchant network it continues to build strategically. It’s also evident in the simple fact that it doesn’t try to cross-sell users revolving debt products.

Most importantly, it’s evident in the usage metrics relative to competition. This is a product that people love, use and have come to rely on, all with better, fairer terms than were ever available to them than with traditional consumer credit.

Consumer loyalty and frequency drives powerful network effect, securing the lifetime value of a consumer

Image Credits: Afterpay H1 FY21 results presentation

Square + Afterpay: The perfect fit

I’ve been building payment companies for over 15 years now, initially in the early days of PayPal and more recently as a venture investor at Matrix Partners. I’ve never seen a combination that has such potential to deliver extraordinary value to consumers and merchants. Even more so than eBay + PayPal.

Beyond the clear product and network complementarity, what’s most exciting to me and my partners is the alignment of values and culture. Square and Afterpay share a vision of a future with more opportunity and fewer economic hurdles for all. As they build toward that future together, I’m confident that this combination is a winner. Square and Afterpay together will become the world’s next generation payment provider.

02 Aug 2021

Lilium in talks with Brazilian airline for $1B order

German electric aircraft startup Lilium is negotiating the terms for a 220-aircraft, $1 billion order with one of Brazil’s largest domestic airlines, the companies said Monday. Should the deal with Azul move forward, it would mark the largest order in Lilium’s history and its first foray into South American markets.

“A term sheet has been signed and we will move towards a final agreement in the coming months,” a Lilium spokesperson told TechCrunch.

The 220 aircraft would fly as part of a new, co-branded airline network that would operate in Brazil. Should the two companies come to an agreement, Azul would operate and maintain the fleet of the flagship 7-seater aircraft, and Lilium would provide custom spare parts, including replacement batteries, and an aircraft health monitoring platform.

Deliveries would commence in 2025, a year after Lilium has said it plans to begin commercial operations in Europe and the United States. These timelines are dependent upon Lilium receiving key certification approvals from each country’s requisite aerospace regulator. Azul said in a statement it would “support Lilium with the necessary regulatory approval processes in Brazil” as part of the agreement.

Even if a deal is reached, it would likely be subject to Lilium hitting certain performance standards and benchmarks, similar to the conditions of Archer Aviation’s $1 billion order with United Airlines. Still, orders of this value are seen as a positive signal to markets and investors that an electric vertical take-off and landing aircraft is more than smoke and mirrors.

Also like Archer, Lilium is planning on taking the SPAC route to going public. The company in March announced its intention to merge with Qell Acquisition Corp. and list on Nasdaq under ticker symbol “LILM.” SPACs have become a popular vehicle for public listing across the transportation sector, but they’ve become especially popular with capital-intensive eVTOL startups.

The merger may be necessary for the company’s continued operations. According to the German news website Welt, Lilium added a risk warning to its 2019 balance sheet noting that it will run out of money in December 2022 should the SPAC merger not be completed.

02 Aug 2021

Cloud infrastructure market kept growing in Q2 reaching $42B

It’s often said in baseball that a prospect has a high ceiling, reflecting the tremendous potential of a young player with plenty of room to get better. The same could be said for the cloud infrastructure market, which just keeps growing with little sign of slowing down any time soon. The market hit $42 billion in total revenue with all major vendors reporting, up $2 billion from Q1.

Synergy Research reports that the revenue grew at a speedy 39% clip, the fourth consecutive quarter that it has increased. AWS led the way per usual, but Microsoft continued growing at a rapid pace and Google also kept the momentum going.

AWS continues to defy market logic, actually increasing growth by 5% over the previous quarter at 37%, an amazing feat for a company with the market maturity of AWS. That accounted for $14.81 billion in revenue for Amazon’s cloud division, putting it close to a $60 billion run rate, good for a market leading 33% share. While that share has remained fairly steady for a number of years, the revenue continues to grow as the market pie grows ever larger.

Microsoft grew even faster at 51%, and while Microsoft cloud infrastructure data isn’t always easy to nail down, with 20% of market share according to Synergy Research, that puts it at $8.4 billion as it continues to push upward with revenue up from $7.8 billion last quarter.

Google too continued its slow and steady progress under the leadership of Thomas Kurian, leading the growth numbers with a 54% increase in cloud revenue in Q2 on revenue of $4.2 billion, good for 10% market share, the first time Google Cloud has reached double figures in Synergy’s quarterly tracking data. That’s up from $3.5 billion last quarter.

Synergy Research cloud infrastructure market share chart.

Image Credits: Synergy Research

After the Big 3, Alibaba held steady over Q1 at 6% (but will only report this week) with IBM falling a point from Q1 to 4% as Big Blue continues to struggle in pure infrastructure as it makes the transition to more of a hybrid cloud management player.

John Dinsdale, chief analyst at Synergy, says that the big three are spending big to help fuel this growth. “Amazon, Microsoft and Google in aggregate are typically investing over $25 billion in capex per quarter, much of which is going towards building and equipping their fleet of over 340 hyperscale data centers,” he said in a statement.

Meanwhile Canalys had similar numbers, but saw the overall market slightly higher at $47 billion. Their market share broke down to Amazon with 31%, Microsoft with 22% and Google with 8% of that total number.

Canalys analyst Blake Murray says that part of the reason companies are shifting workloads to the clouds is to help achieve environmental sustainability goals as the cloud vendors are working toward using more renewable energy to run their massive data centers.

“The best practices and technology utilized by these companies will filter to the rest of the industry, while customers will increasingly use cloud services to relieve some of their environmental responsibilities and meet sustainability goals,” Murray said in a statement.

Regardless of whether companies are moving to the cloud to get out of the data center business or because they hope to piggyback on the sustainability efforts of the big 3, companies are continuing a steady march to the cloud. With some estimates of worldwide cloud usage at around 25%, the potential for continued growth remains strong, especially with many markets still untapped outside the U.S.

That bodes well for the big three and for other smaller operators who can find a way to tap into slices of market share that add up to big revenue. “There remains a wealth of opportunity for smaller, more focused cloud providers, but it can be hard to look away from the eye-popping numbers coming out of the big three,” Dinsdale said.

In fact, it’s hard to see the ceiling for these companies any time in the foreseeable future.

02 Aug 2021

Tech leaders can be the secret weapon for supercharging ESG goals

Environmental, social and governance (ESG) factors should be key considerations for CTOs and technology leaders scaling next generation companies from day one. Investors are increasingly prioritizing startups that focus on ESG, with the growth of sustainable investing skyrocketing.

What’s driving this shift in mentality across every industry? It’s simple: Consumers are no longer willing to support companies that don’t prioritize sustainability. According to a survey conducted by IBM, the COVID-19 pandemic has elevated consumers’ focus on sustainability and their willingness to pay out of their own pockets for a sustainable future. In tandem, federal action on climate change is increasing, with the U.S. rejoining the Paris Climate Agreement and a recent executive order on climate commitments.

Over the past few years, we have seen an uptick in organizations setting long-term sustainability goals. However, CEOs and chief sustainability officers typically forecast these goals, and they are often long term and aspirational — leaving the near and midterm implementation of ESG programs to operations and technology teams.

Until recently, choosing cloud regions meant considering factors like cost and latency to end users. But carbon is another factor worth considering.

CTOs are a crucial part of the planning process, and in fact, can be the secret weapon to help their organization supercharge their ESG targets. Below are a few immediate steps that CTOs and technology leaders can take to achieve sustainability and make an ethical impact.

Reducing environmental impact

As more businesses digitize and more consumers use devices and cloud services, the energy needed by data centers continues to rise. In fact, data centers account for an estimated 1% of worldwide electricity usage. However, a forecast from IDC shows that the continued adoption of cloud computing could prevent the emission of more than 1 billion metric tons of carbon dioxide from 2021 through 2024.

Make compute workloads more efficient: First, it’s important to understand the links between computing, power consumption and greenhouse gas emissions from fossil fuels. Making your app and compute workloads more efficient will reduce costs and energy requirements, thus reducing the carbon footprint of those workloads. In the cloud, tools like compute instance auto scaling and sizing recommendations make sure you’re not running too many or overprovisioned cloud VMs based on demand. You can also move to serverless computing, which does much of this scaling work automatically.

Deploy compute workloads in regions with lower carbon intensity: Until recently, choosing cloud regions meant considering factors like cost and latency to end users. But carbon is another factor worth considering. While the compute capabilities of regions are similar, their carbon intensities typically vary. Some regions have access to more carbon-free energy production than others, and consequently the carbon intensity for each region is different.

So, choosing a cloud region with lower carbon intensity is often the simplest and most impactful step you can take. Alistair Scott, co-founder and CTO of cloud infrastructure startup Infracost, underscores this sentiment: “Engineers want to do the right thing and reduce waste, and I think cloud providers can help with that. The key is to provide information in workflow, so the people who are responsible for infraprovisioning can weigh the CO2 impact versus other factors such as cost and data residency before they deploy.”

Another step is to estimate your specific workload’s carbon footprint using open-source software like Cloud Carbon Footprint, a project sponsored by ThoughtWorks. Etsy has open-sourced a similar tool called Cloud Jewels that estimates energy consumption based on cloud usage information. This is helping them track progress toward their target of reducing their energy intensity by 25% by 2025.

Make social impact

Beyond reducing environmental impact, CTOs and technology leaders can have significant, direct and meaningful social impact.

Include societal benefits in the design of your products: As a CTO or technology founder, you can help ensure that societal benefits are prioritized in your product roadmaps. For example, if you’re a fintech CTO, you can add product features to expand access to credit in underserved populations. Startups like LoanWell are on a mission to increase access to capital for those typically left out of the financial system and make the loan origination process more efficient and equitable.

When thinking about product design, a product needs to be as useful and effective as it is sustainable. By thinking about sustainability and societal impact as a core element of product innovation, there is an opportunity to differentiate yourself in socially beneficial ways. For example, Lush has been a pioneer of package-free solutions, and launched Lush Lens — a virtual package app leveraging cameras on mobile phones and AI to overlay product information. The company hit 2 million scans in its efforts to tackle the beauty industry’s excessive use of (plastic) packaging.

Responsible AI practices should be ingrained in the culture to avoid social harms: Machine learning and artificial intelligence have become central to the advanced, personalized digital experiences everyone is accustomed to — from product and content recommendations to spam filtering, trend forecasting and other “smart” behaviors.

It is therefore critical to incorporate responsible AI practices, so benefits from AI and ML can be realized by your entire user base and that inadvertent harm can be avoided. Start by establishing clear principles for working with AI responsibly, and translate those principles into processes and procedures. Think about AI responsibility reviews the same way you think about code reviews, automated testing and UX design. As a technical leader or founder, you get to establish what the process is.

Impact governance

Promoting governance does not stop with the board and CEO; CTOs play an important role, too.

Create a diverse and inclusive technology team: Compared to individual decision-makers, diverse teams make better decisions 87% of the time. Additionally, Gartner research found that in a diverse workforce, performance improves by 12% and intent to stay by 20%.

It is important to reinforce and demonstrate why diversity, equity and inclusion is important within a technology team. One way you can do this is by using data to inform your DEI efforts. You can establish a voluntary internal program to collect demographics, including gender, race and ethnicity, and this data will provide a baseline for identifying diversity gaps and measuring improvements. Consider going further by baking these improvements into your employee performance process, such as objectives and key results (OKRs). Make everyone accountable from the start, not just HR.

These are just a few of the ways CTOs and technology leaders can contribute to ESG progress in their companies. The first step, however, is to recognize the many ways you as a technology leader can make an impact from day one.

02 Aug 2021

Reese Witherspoon’s Hello Sunshine sold to new media firm from former Disney execs

Hello Sunshine, Reese Witherspoon’s media company that has produced content for streaming services like Hulu, Apple and HBO, among others, has been sold to a yet-unnamed new media firm run by former Disney execs, Kevin Mayer and Tom Staggs, the company announced this morning.

The Wall St. Journal first reported on the sale.

Deal terms were not officially disclosed, but reportedly, the sale values Hello Sunshine’s business at around $900 million, The WSJ says. The news outlet had previously reported Hello Sunshine was exploring a sale after receiving interest from a number of suitors, including Apple.

Hello Sunshine was co-founded by Witherspoon and Strand Equity founder and managing partner Seth Rodsky in 2016, and is best known for producing series like HBO’s “Big Little Lies,” Hulu’s “Little Fires Everywhere,” and Apple’s “The Morning Show,” which feature Witherspoon in starring roles.

But the company has also invested in other film and media projects, ranging from Facebook Watch series to collaborations with Amazon’s Audible. It now has upcoming film and TV projects on the slate with Netflix, Amazon, ABC and Starz, and recently announced a Kids & Animation division as well as the acquisition of Sara Rea’s SKR Production to expand into unscripted content.

In addition, the company operates an online and mobile book club app, Reese’s Book Club, now with 2.1 million followers. The club’s more popular picks are often turned into the shows and movies Hello Sunshine later produces.

Per Hello Sunshine’s announcement, the company will be the first acquisition by the new media venture run by Mayer and Staggs, which is backed by private equity firm Blackstone. The firm is spending more than $500 million in cash to purchase shares of Hello Sunshine from its investors, including AT&T and Emerson Collective, The WSJ noted.

Following the deal’s closure, the senior management team will continue to run Hello Sunshine’s day-to-day operations. Witherspoon and Hello Sunshine Chief Executive Sarah Harden will join the board of new company and retain significant equity holders in the new business.

Hello Sunshine will become a cornerstone of the new media company’s strategy, which will involve being an “independent, creator-friendly home for cutting-edge, high-quality, category-defining brands and franchises,” it says.

“Today marks a tremendous moment for Hello Sunshine. I started this company to change the way all women are seen in media. Over the past few years, we have watched our mission thrive through books, TV, film and social platforms. Today, we’re taking a huge step forward by partnering with Blackstone, which will enable us to tell even more entertaining, impactful and illuminating stories about women’s lives globally. I couldn’t be more excited about what this means for our future,” said Witherspoon in a statement about the deal.

The deal arrives at a time when there’s an uptick in consolidation happening the media business, as companies adjust to the shift away from traditional TV and standard movie releases to the always-on world of streaming and cord cutting. For example, Amazon in May announced it would buy MGM Studios for $8.45 billion — a deal being investigated by the FTC for potential antitrust issues. Meanwhile, WarnerMedia and Discovery around the same time announced their plans to merge operations, in hopes of taking a bigger bite out of the streaming market. Now, Comcast and ViacomCBS are exploring ways to work together, too.

But as traditional media companies begin to stream, like NBCU did with Peacock, for instance, they also pull back content licensed to other streamers, like Netflix. That drives demand for new sources of independent programming, like what Hello Sunshine produces.

The company’s value in this market comes from its pipeline of quality projects, many of which are pre-vetted by its book club members, who serve as a built-in audience and fan base for the later film or televised release. Plus, the projects it backs are also those that tell women’s stories — a historically neglected segment of the market, and one that Hello Sunshine’s success proves there’s pend-up demand for among viewers.

Blackstone’s investment in the new company is being made through its private equity business, which previously acquired a majority stake in dating app Bumble. Blackstone has made other entertainment industry investments, as well, including music rights organization SESAC; a Hollywood studio space and Burbank office real estate portfolio; global theme park operator Merlin Entertainments; online genealogy platform Ancestry.com; online mobile ad platforms Vungle and Liftoff; and Epidemic Sound, which delivers music to internet content creators.

02 Aug 2021

Why Square is shelling out $29B to snag BNPL player Afterpay

Shares of Square are up this morning after the company announced its second-quarter earnings and that it will buy Afterpay, an Australian buy now, pay later (BNPL) player in a $29 billion deal. As TechCrunch reported this morning, Afterpay shareholders will receive 0.375 shares of Square in exchange for their existing equity.

Shares of Afterpay are sharply higher after the deal was announced thanks to its implied premium, while shares of Square are up 7% in early-morning trading.


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Over the past year, we’ve written extensively about the BNPL market, usually from the perspective of earnings from companies in the space. Afterpay has been a key data source, along with the yet-private Klarna and U.S. public BNPL outfit Affirm. Recall that each company has posted strong growth in recent periods, with the United States arising as a prime competitive market.

Most recently, consumer hardware and services giant Apple is reportedly preparing a move into the BNPL space. Our read at the time was that any such movement by Cupertino would impact mass-market BNPL players more than niche-focused companies. Apple has a fintech base and broad IRL payment acceptance, making it a potentially strong competitor for BNPL services aimed at consumers; BNPL services targeted at particular industries or niches would likely see less competition from Apple.

From that landscape, let’s explore the Square-Afterpay deal. We want to know what Afterpay brings to Square in terms of revenue, growth and reach. We also want to do some math on the price Square is willing to pay for the company — and what that might tell us about the value of BNPL and fintech revenues more broadly. Then we’ll eyeball the numbers and try to decide if Square is overpaying for Afterpay.

What Afterpay brings to Square

As with most major deals these days, Square and Afterpay released an investor presentation detailing their argument in favor of their combination. Let’s dig through it.

Square is a two-part company. It has a large consumer business via Cash App, and it has a large business division that offers payments tech and other fintech services to corporate customers. Recall that Square is also building out banking services for its business customers and that Cash App also serves some banking and investing functionality for consumers.

02 Aug 2021

The tale of two edtech IPOs

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. Last week, Natasha and Alex jumped on Twitter Spaces to discuss the tale of two edtech IPOs: Duolingo, the consumer language learning company, and Powerschool, the enterprise K-12 software platform. It was a rare moment in the sun for the recently-revitalized sector, which saw two companies list on the NASDAQ on the same dang day.

Special shout out to our producer Chris Gates for handling this impromptu live chat, tech difficulties and all, and bringing it to your ears on this lovely Monday. Don’t forget that Equity is largely on break this week!

Here’s what we got into, featuring some edtech entrepreneurs nice enough to drop on by:

  • China’s edtech crackdown and how it is impacting startups both internationally and domestically. The regulations, one of which will force for-profit tutoring companies to turn into non-profits, are also getting the cold shoulder from U.S. edtech VCs, it seems.
  •  As Lightspeed Ventures investor Mercedes Bent so aptly put it, the news is somewhat ironic: “[T]he US edtech IPO market is on fire (after being dormant for so long) and the China edtech market is crumbling (after being on fire for so long).”
  • Evidence of that can be found in the Duolingo IPO pricing arc. The company first posted a strong estimate of its worth, raised its range, priced above that raised interval, and still managed to trade higher. The company is still up more than $30 from its IPO price.
  • Powerschool was a bit different. It priced at $18 per share, the low-end of its $18 to $20 range. The company is up from its IPO price, albeit a much more modest two, or three percent in today’s early trading.

In the second half of the show, we brought on the following host of edtech founders to share their hot takes about the current state of edtech:

Before we go, Equity is on a “break” this week, as we do some soul searching and refresh before our next run of shows. Obviously we still had to shaare this episode, and um, are recording another episode this week too, but you, my dear friend, will hear from us again next Monday.

Equity drops every Monday at 7:00 a.m. PDT, Wednesday, and Friday morning at 7:00 a.m. PDT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

02 Aug 2021

Zoom reaches $85M settlement in ‘Zoombombing’ lawsuit

Zoom has agreed to pay $85 million to settle a lawsuit that accused the video conferencing giant of violating users’ privacy by sharing their data with third parties without permission and enabling “Zoombombing” incidents.

Zoombombing, a term coined by TechCrunch last year as its usage exploded because of the pandemic, describes unapproved attendees entering and disrupting Zoom calls by sharing offensive imagery, using backgrounds to spread hateful messages, or spouting slurs and profanities.

The lawsuit, filed in March 2020 in the U.S. District Court in the Northern District of California, also accused the firm of sharing personal user data with third parties, including Facebook, Google and LinkedIn.

In addition to agreeing to an $85 million settlement, which could see customers receive a refund of either 15% of their subscription of $25 if the lawsuit achieves class-action status, Zoom has said it will take additional steps to prevent intruders from gatecrashing meetings. This will include alerting users when meeting hosts or other participants use third-party apps in meetings and offering specialized training to employees on privacy and data handling.

“The privacy and security of our users are top priorities for Zoom, and we take seriously the trust our users place in us,” Zoom said in a statement. “We are proud of the advancements we have made to our platform, and look forward to continuing to innovate with privacy and security at the forefront.”

The settlement requires approval from US District Judge Lucy Koh in San Jose, California, to be finalized.