posted about 8 hours ago on techcrunch
Storm Ventures, a venture firm that focuses on early stage B2B enterprise startups, announced this week that it has promoted Pascale Diaine and Frederik Groce to partners at the firm. The two new partners have worked their way up over the last several years. Groce joined Storm in 2016 and has invested in enterprise SaaS startups like Workato, Splashtop, NextRequest and Camino. Diaine joined a year later and has invested in firms like Sendoso, German Bionic, InEvent and Talkdesk. Groce, who is also a founder at BLCK VC and helped organize the Black Venture Institute to create a network of Black investors, says that these promotions show that venture needs to be more diverse, and Storm recognizes this.  “If you think about the way our team works, that’s the way I think venture teams will need to work to be able to be successful in the next 40 years. And so the hope is that over time everyone does this and we’re just early to it,” Groce told me. Unfortunately, right now that’s not the case, not even close. According to research by Crunchbase, just 12% of venture capitalists are women and two-thirds of firms don’t have any female investors. Meanwhile, only about 4% of ventures investors are Black. Those numbers have an impact on the number of Black and female founders because as Groce points out the lack of founders in underrepresented groups is in part a networking problem. “In a business that’s predicated on networks if you don’t have diversity in the network, or the teams that are driving those networks, you just can’t make sure you’re seeing great talent across all ecosystems,” he said. Storm Ventures brings on two new partners at enterprise-focused firm Diaine, who is French and started her career by founding Orange Fab, the corporate accelerator of the European Telco Orange, has brought her international business background to Storm where they helped her tune that experience to an investor focus and supported her as she learned the nuances of the investment side of the business. “I don’t come from the VC world. I come from the innovative corporate world. So they had to train me and spend time getting me up to date. And they did spend so much time making sure I understood everything to make sure I got to this level,” she said. Both partners bring their own unique views looking beyond Silicon Valley for investment opportunities. Diaine’s investment include a German, Brazilian and Portuguese company, while Groce’s investments include companies in Chicago, Atlanta and Seattle. The two partners have also developed an algorithm to help find investments based on a number of online signals, something that has become more important during the pandemic when they couldn’t network in person. “Frederik and I have been working on [an algorithm to find] what are the signals that you can identify online that will tell you this company’s doing well, this company growing.You have to have a nice set of startup search tracking [signals], but what do you track if you can’t just get the revenue in real time, which is impossible. So we’ve developed an algorithm that helps us identify some of these signals and create alerts on which startups we should pay attention to,” Diaine explained. She says this data-driven approach should be helpful and augment their in-person efforts even after the pandemic is over and increase their overall efficiency in finding and tracking companies in their portfolios. BLCK VC launches educational initiative to bring more Black entrepreneurs into investing ecosystem  

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posted about 9 hours ago on techcrunch
Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy. The app industry is as hot as ever, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. A new forecast this week expects consumer spend to grow to $270 billion by 2025. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices. App spending to reach $270B by 2025, new forecast predicts Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year. This week, we’re looking into what’s next for the future of one of the top social apps (Twitter), as well as Spotify’s latest announcements around its future plans for podcasts and subscriptions, along with other top stories, including the Clubhouse security problem. Top Stories Twitter wakes up Image Credits: Twitter Twitter over the years has been slow to roll out new features that dramatically impact its platform — even going so far at one time to build an entirely separate app just to test a new way to link together conversation threads. Its slow momentum and failure to build features users actually want, like an edit button, has left Twitter feeling a lot like the same experience it was in its earlier years — a public SMS of sorts (albeit one with more utilities for tweet discovery and management). A first look at Twitter’s new prototype app, twttr This has also contributed slow user growth, which opened up Twitter last year to pressure from activist investors to oust CEO Jack Dorsey, who was then planning to move to Africa, while also still running Square. (He decided not to go because of the pandemic… and, well, to keep his job, we’d guess.) Following this more intensive scrutiny of Twitter’s operations, the company in recent months has begun to speed things up on the product front. Twitter Spaces is solid. Needs better discovery, but I’m certain that is coming. I can promise you we would not have built something this good, this quickly 7 years ago. Love seeing the velocity. Congrats @kayvz and team. — Christian Oestlien (@christianism) February 26, 2021 Last year, it rolled out to its global audience a stories-like feature called Fleets, offering a place for more ephemeral content to live on its platform. It began development on a Clubhouse rival, Twitter Spaces, which is surging ahead with updates and new features. And it’s working on a community-led misinformation debunking effort, Birdwatch. Twitter’s Birdwatch fights misinformation with community notes Twitter also began to make a series of acquisitions to build out its product teams, with additions like social app Squad, stories template maker Chroma Labs and podcasting app Breaker. And more recently, it bought newsletter platform Revue, which is already integrated on the Twitter website. And it’s not done. This week, Twitter announced even more new products were in the works. One, a new product called “Super Follow,” represents Twitter’s first-ever paid feature. The idea with the Super Follow is to turn Twitter into a platform where creators can monetize their fan base — with a “Super Follow” subscription, fans can access member-only perks. These can include whatever the creator wants — newsletters, videos, deals, community access and even paywalled content like tweets, fleets and audio chats in Twitter Spaces. Twitter’s ‘Super Follow’ creator subscription takes shots at Substack and Patreon Along with this, Twitter introduced “Communities,” which, in addition to allowing social networking around interests, give Super Follow-using creators a place to organize their own private networks. And it’s finally working on tools to auto-block and mute the trolls, too. Twitter announces Communities, like Facebook Groups but on Twitter (they’ve started working on it in the web app since at least few weeks ago) https://t.co/5YBmEfgsUn pic.twitter.com/JlkrZNjLBo — Jane Manchun Wong (@wongmjane) February 25, 2021 To put it mildly, this strategy represents one of the more radical shake-ups to Twitter’s platform to date. It not only challenges other networks — like Facebook, Discord, Patreon, Substack and Clubhouse — it positions Twitter’s slew of new features not just as fun add-ons, but rather as general-purpose tools that allow anyone to build and grow their own communities whichever way they want. The one big miss on this front is that Twitter no longer has its own social video app to throw in the mix, too. Sadly, the company shut down both Vine and now, Periscope. Though Twitter itself supports video, Vine’s closure led to a hole in the market that’s since been filled by TikTok. And unfortunately, sharing TikTok links on Twitter is poor experience — they just display as previews that take you to a new TikTok tab when clicked. To get TikTok videos to play in-line, you have to download them first — something not all creators permit. Nevertheless, Twitter is expecting the changes to help it to double its revenues by 2023, and grow its daily user base to 315 million, up from the 192 million it has today. Twitter plans to double revenue by 2023, reach 315M daily users Spotify looks to new subscriptions for revenue growth Image Credits: Spotify/Anchor Twitter isn’t the only one looking to new subscriptions to make more money. Spotify this week also announced a good handful of updates, including a high-end Premium add-on for higher-quality music streams, called Spotify HiFi. The company also confirmed its plans to test paid podcast subscriptions. The big bet here is that some podcasts are so compelling and have such a loyal fanbase that listeners will pay for their content, or maybe just their extras. These, of course, will no longer really be “podcasts” at this point — they’re paid audio programs. The feature will be introduced to Spotify’s creation app Anchor this spring. Spotify to test paid podcast subscriptions this spring via new Anchor feature But overeager adoption of paywalls by podcasters (who can’t make a living from their ad sales) could push more users to new social audio platforms, like Clubhouse and Twitter Spaces, where content is free and conversations are more participatory. Anchor’s solution for audience engagement is to roll out Q&As and polls. But why bother clicking, when you can hit up a Clubhouse room and talk? Clubhouse’s exclusivity leads to discovery of security problems The demand for Clubhouse access is becoming so high that people are figuring out ways to reverse-engineer the experience, TechCrunch reported this week. A developer found a way to broadcast Clubhouse audio feeds in real time to users who couldn’t get in because they didn’t have an invite or an iPhone. Though Clubhouse blocked the effort later in the week, the fact that a developer was able to gain access to Clubhouse audio feeds in the first place was an indication that the app isn’t as locked down as one might think. A race to reverse-engineer Clubhouse raises security concerns In addition, other researchers have figured out ways to “ghost listen” to rooms without displaying user profiles — essentially, eavesdropping. And users in China appear to be able to listen to a room conversation facilitated by Clubhouse’s service provider Agora by using a VPN — even though they can’t technically “join” a room due to the app itself being banned. Clubhouse’s appeal has a lot to do with how its social audio spaces aren’t recorded, so people can be themselves. There’s an expectation that you are only speaking to a group who’s listening and there’s no way to go back for a transcript or recording later. In other words, it’s not a podcast — it’s live. It’s social. And it’s semi-private. These security breaches prove that’s not entirely true. Weekly News Platforms: Apple Apple added guidance for app developers to help them complete App Store privacy labels. Specifically, it added information about data types, like email and messages, and gameplay content. Not coincidentally, I’m sure, Google added a privacy label to Gmail this week, too. Apple’s “Sign in with Apple” button is now a part of the U.S. DoJ antitrust investigation against the company, reports The Information. Apple requires the option on all apps that offer sign-in buttons from other companies, like Facebook and Google, which has upset some developers. Investigators are looking to better understand how use of the button makes it more difficult for Apple device users to switch to other platforms. Apple Entrepreneur Camp applications opened up for female founders and developers. The camp will run online July 20-29, 2021, offering attendees code-level guidance, mentorship, plus access to Apple engineers. Apple tweaked the subscription “buy sheet” in iOS 14.5 beta. The new screen aims to make the price of an app’s subscription more clear to end users. Apple hid an Easter egg in its Apple Store app to celebrate its 10-year anniversary. Surprise! Hidden inside the Apple Store app is a new Easter egg that celebrates the app’s 10th anniversary. Search for “10 years” and watch the balloons appears. Tap each one to pop it. pic.twitter.com/YsGdKP8r5L — Michael Steeber (@MichaelSteeber) August 5, 2020 Platforms: Google Google this week announced the next set of features coming to Android in its spring 2021 release. Flagship items include a password checkup tool and a way to schedule your texts (!!!). The latter means you can compose a message at any time, then pick the time you want it to send. iMessage, your turn! Other improvements included updates to the screen reader TalkBack, Maps (which gets a dark mode default option), Assistant and Android Auto. Android’s latest update will let you schedule texts, secure your passwords and more Google launches an Android Sleep API for use in health and wellness apps. The new API will use the phone’s light and motion sensors in combination with an onboard API model to generate information like a “sleep confidence” determination and daily sleep segments. Food & Drink Food delivery app DoorDash stock falls after its first earnings. The company reported $970 million in revenue versus $938 million expected and a loss per share of $2.67. But shares dropped as much as 13% on DoorDash’s forecast, which said some of the earlier tailwinds it saw under stay-at-home orders in the U.S. will turn around as the country gets the vaccine under control. Food delivery apps got a boost during the Lunar New Year holiday week in China, thanks to COVID-19 travel restrictions that kept people at home and prompted more remote gift deliveries, in particular food orders from services like Meituan and Alibaba’s Ele.me. Augmented Reality An iPhone app called Museum Alive, reviewed by The Verge, includes narration from Sir David Attenborough as an extension of his Natural History Museum Alive film. The app includes interactive AR exhibits with extinct animals in their own habitats. Fintech Mobile investing app Robinhood reports seeing 6 million new customers on Robinhood Crypto just this year. By comparison, the number peaked at 401,000 customers in a single month in 2020, with a monthly average of 200,000 customers trading on Robinhood Crypto for the first time. Google emailed users of the old Google Pay app and website that they’ll lose transactional capabilities on April 5 and will need to switch to the updated Google Pay app instead. Social Image Credits: Snap At Snap’s investor day, the company projected 50% annual revenue growth for the next several years. The company spoke of the app’s main features — Camera, Map, Chat, Stories and Spotlight — each which it believes to be multibillion-dollar revenues streams in the long-term. It also talked about its investments in AR, Snap Ads, Shows, Stories and its TikTok rival, Spotlight. Investors responded favorably to the news, with shares up 11% on Tuesday, pushing the company’s valuation over $100 billion. Instagram adds its TikTok rival, Reels, to its slimmed-down Instagram Lite app aimed at emerging markets. Some are already dubbing it “bloatware.” TikTok partners with Portland Timbers and Thorns FC in its first U.S. soccer deal. The multi-year deal will have the clubs distributing video content in collaboration with TikTok, and will see the clubs featuring the TikTok logo on their jerseys. TikTok owner ByteDance agrees to $92 million privacy settlement with U.S. TikTok users after a year of litigation. The claims in the lawsuits said TikTok was using a broad array of biometric data and content from user devices for ad targeting and profit. TikTok said it disagrees with the assertions but wanted to put an end to the lengthy litigation. TikTok’s latest transparency report for H2 2020 said the app removed over 300,000 election misinformation videos, and another 400,000 from the For You page. The percentage of deletions were in line with the prior report, despite the busy election season it covered. The Washington Post reports conservative backer Rebekah Mercer, whose family also funds Breitbart, now controls two of the three board seats at right-wing Twitter alternative, Parler. The app’s founding CEO John Matze was pushed out last month, and Mercer has since exerted more control over the company’s direction. Twitter banned 100 accounts linked to Russian troll farms. The accounts were caught up in part of a larger enforcement action Twitter took against 373 accounts with connections to Armenia, Iran and Russia. The Russian accounts were being used to amplify talking points in favor of the Russian government. Facebook tests new tools to combat child exploitation. One tool will pop up a message for people who use search terms linked to child exploitation that reminds them of the consequences and points them to resources to get help from offender diversion organizations. Another will alert users to the legal ramifications of sharing viral, meme child exploitative content. The company also updated its child safety policies and updated its reporting menu across FB and IG to include a section for a report that “involves a child.” Top social apps including TikTok, Instagram and Pinterest added new features to support those with eating disorders as part of National Eating Disorders Awareness Week (February 22-28). Among the changes, TikTok and Instagram added features to encourage body inclusivity; TikTok now redirects some eating disorder searches to point to support resources; Instagram added links to local helplines in Australia, Canada and the U.K.; Pinterest donated credits to encourage people to tune into NED Awareness events; and more. Photos Flickr rolled out a widget for both iOS and Android devices. The widget lets you enjoy a rotating selection of photos from Explore on your home screen — great for someone looking for variety, instead of a static home screen. Messaging / Communications Telegram adds an auto-delete option for all messages, which lets users automatically delete messages after either 24 hours or seven days. The feature was previously available only for its encrypted Secret Chats. It also added expiring invite links and an option to create broadcast-only groups. WhatsApp details what will happen when users don’t agree to the privacy changes by the May 15, 2021 deadline. It said for a short time (a few weeks), the users will be able to receive calls and notifications, but won’t be able to read or send messages, to give them more time to agree. WhatsApp details what will happen to users who don’t agree to privacy changes More Google Hangouts users are being migrated over to the Google Chat “preview” experience. The company had said it would split Hangouts into two services, Chat and Meet. The transition began last year, but personal account holders had only been told “early 2021” for their migration date. Early reports (see below) say the new experience is lacking when it comes to video call integration and lack of SMS support. My Google Chat is now showing this Hangouts "Preview" message. It looks like all my individual contacts work and are accessible via the search bar. The only missing feature now is group chat. pic.twitter.com/Vf8mLahrbE — Ron Amadeo (@RonAmadeo) February 24, 2021 Streaming & Entertainment Image Credits: YouTube YouTube announced it will roll out parental control features for families with tweens and teens that will allow them to graduate more safely from the YouTube Kids app to “real YouTube.” Parents will be able grant kids more access through their “supervised” Google Account, then choose from one of of three levels of YouTube access ranging from a selection that’s more tween-friendly to another that’s more appropriate for older teens. By using the account, parents are also agreeing to allow YouTube to collect personal data from the kids — something it couldn’t do in YouTube Kids. YouTube to launch parental control features for families with tweens and teens Disney’s adult-friendly Star channel launched outside the U.S. to Disney+ subscribers in Europe, Australia, New Zealand and Canada. The additional channel combines content from Disney Television Studios, FX, 20th Century Studios and 20th Television, and bumps Disney+ price up by a small amount (a few pounds in the U.K., e.g.). Parental controls were also added to block kids from accessing the more adult fare. South Korean media reported the country’s current prime minister, Chung Sye-kyun, has joined Clubhouse, making him the most senior political leader to join the growing app. Gaming Image Credits: GameSnacks Google’s mobile-friendly online games, GameSnacks, developed by its Area 120 in-house incubator, are being integrated into Chrome on iOS and Android Pay in select emerging markets. The HTML5-powered games are a way that Google is routing around app stores, and instead delivering gaming content to users without the associated app store fees. It’s also a more lightweight model for gaming, which helps in some markets where storage space and bandwidth are concerns. The company is experimenting with bringing the games to Google Assistant next. Chinese mobile games released on the U.S. App Store and Google Play Store raked in $5.8 billion during Q24 2020, up 34.3% from a year ago, and accounting for over a quarter of the world’s mobile gaming revenues, per Sensor Tower data. Top titles include big names like Call of Duty (a collaboration between Tencent and Activision) and Tencent’s PlayerUnknown’s Battlegrounds. as well as those from smaller studios such as Mihoyo’s Genshin Impact and Magic Tavern’s Project Makeover. Chinese mobile games are gaining ground in the US In the ongoing Epic Games versus Apple legal showdown in the U.S., Epic is now trying to locate former iOS software chief Scott Forstall to testify, after Apple said Forstall didn’t respond to its request to appear. Meanwhile, a U.K. court blocked Epic Games from challenging Apple’s Fortnite ban. The court said Epic’s lawsuit against Apple would be better to pursue in the U.S., but allowed the suit against Google to continue. Epic Games is sending players V-Bucks to settle its Fornite loot box class action lawsuit. The settlement is supposed to be for U.S. players only, but Epic is offering the V-Bucks to global players. Amazon’s Luna cloud gaming service, which lets users stream games across platforms including Windows, Mac, Android, web browsers on iPhone and iPad and desktop, has now arrived on Amazon’s Fire TV devices in an expansion of its early access program. App Annie announces new features to help customers discover gaming launches, as well as measure and visualize performance of games. The features include RPD (revenue per download), Align Apps by Launch, Cumulative Downloads and Cumulative Revenue, and a Soft Launches Report. A floating gaming toolbar has been found in the code of the Android 12 Developer Preview. Full details are not available but one button is a picture of a game controller while the other is suspected to be some sort of option to record your current gaming session. Social casino game Coin Master from Moon Active tops $2 billion in lifetime player spending, reports Sensor Tower. The title booked $1.2 billion in 2020 alone, up 122.4% year-over-year, boosted by pandemic boredom and in-game spending. Zynga is creating its own first-party walled garden for ad tech, due to Apple’s push for app tracking transparency. More companies could do the same, argues Mobile Dev Memo. Health & Fitness The New York Department of Financial Services said in an investigative report that Facebook has now taken steps to prevent it from collecting unauthorized data about people’s medical conditions, The WSJ reported. The company had been collecting the data through its SDK installed in numerous apps, then matches the sensitive, personal data to users’ Facebook accounts for ad targeting. One app involved, period tracker Flo, separately settled with the FTC in January over its involvement. Media Australia’s ABC News app hit the top of the App Store following the upheaval related to Facebook’s ban of Australian news sources on its platform. The app become No. 1 in News and No. 2 Overall, ahead of Facebook and its other apps, including Messenger and Instagram. Funding and M&A YouTuber David Dobrik’s retro photo app raised $20 million in a Series A round led by Spark Capital. The app’s gimmick is that it allows you to snap photos in an old-fashioned camera interface where photos don’t “develop” until the next morning. The TestFlight, capped at 10,000 users, was full within a weekend of launching. Celebrity video platform memmo raised $10 million Series A, in a round led by Left Lane Capital. The concept is similar to U.S.-based Cameo, but Stockholm-based memmo’s strategy is both global and localized. Snack, a TikTok-like dating app, raised $3.5 million in a round led by Kindred Ventures and Coelius Capital. The startup was founded by early (Match Group-owned) Plenty of Fish exec Kimberly Kaplan, and targets Gen Z by way of a video feed with likes and comments that lead to DMs. Snack, where TikTok meets dating, gets $3.5 million in funding AI-powered transcription service Otter, available on web and mobile, raised $50 million ($40 million in new funds) Series B. The service got a boost from the pandemic and its Zoom integration. Spain’s Wallapop raised $191 million at an $840 million valuation for its classifieds marketplace. The funding was led by Korelya Capital, a French VC fund backed by Korea’s Naver. The app was previously going to merge with U.S.-based LetGo, but later shelved those plans. (LetGo instead was bought by OfferUp.) Austrian app marketer App Radar acquired Spanish rival TheTool. At the time of the deal, TheTool provided data insights for some 400 app marketing clients. The assets-only deal will allow App Radar to expand its presence across Europe. Indian edtech startup Doubtnut raised $31 million for its website and app that help students learn math and science. The app lets students take a photo of the problem, then uses ML and image recognition to deliver the answer in the form of short videos. James Murdoch’s Lupa Systems leads $31 million investment in India’s Doubtnut Design platform Canva, which works on both web and mobile, acquired Kaleido, the maker of a drag-and-drop background removal service, remove.bg, for photos and videos. It also bought Smartmockups in the Czech Republic, which lets anyone create mockups for t-shirts, mugs and other items. Podcast host and ad network Acast bought RadioPublic, a maker of tools for podcasters, including a website maker, marketing tools, and the RadioPublic podcast app. The latter will remain live and the team will stay in the U.S. Copenhagen-based Podimo, a subscription service for podcasts, raised €11.2 million in funding. The app offers access to over 600 exclusive shows, and shares its revenue from subscriptions with its creators. Podimo, the podcast and short-form audio subscription service, picks up €11.2M in new funding Beijing-based tutoring app Yuanfudao is said to be raising funding at a $20 billion+ valuation. The funding would follow a prior $2.2 billion round that valued the business at $15.5 billion. Roblox shares to begin trading March 10. The cross-platform gaming service, which is popular on mobile, has opted for a direct listing instead of an IPO. Downloads Quill Image Credits: Quill A new Slack competitor, Quill, launched out of stealth this week, TechCrunch reported, with its apps for the web, Mac, Windows, Linux and Android and iOS on mobile. Like Slack, Quill lets co-workers communicate through channels, video and voice. But it also addresses some of the issues Slack overlooks. One, “structured channels,” lets admins enforce threads, for example. It also automatically moves up active conversations, limits notifications, has improved pinning, supports moving threads between channels and places video and chat side-by-side, to name a few. You can even interact with Quill via SMS and email. Quill, the messaging app backed by Index, quietly comes out of stealth to take on Slack ANDY’s apps Image Credits: ANDY Andy Allen, former head of Product at WeTransfer, teamed up with Mark Dawson, the lead graphics engineer from Allen’s former prior company Fifty Three, to create a new set of “default” apps with ANDY. That is, the company’s new apps aim to update your basic set — like weather, calculator and timer. “Most of the default apps haven’t changed over the last 10 years. Yet we’re still using them. I see that as a sign that we’ll still need basic apps like weather, calculator and timer in another 10 years,” notes Allen. Image Credits: ANDY What makes ANDY apps different is that they’re built inside a game engine to unlock new experiences that makes them feel more like games themselves. They’re also skinnable, with three skins available at launch and more to come every few months. The apps require a subscription to work — either $14.99/yr for all apps and basic skins or $69.99/yr for all apps plus basic and limited-edition skins, as well as limited-edition collector cards. The company plans to expand its app collection over time. YouWidget Image Credits: YouWidget Spotted this week by the folks at iMore, the new YouWidget delivers a YouTube iOS widget that puts a live video feed on your home screen along with other stats. For YouTubers and fans alike, the app could be useful in helping to track a specific channel’s releases and their other subscriptions. But even if you don’t need live videos, the app offers a widget with statistics for any channel — including subscriber counts, views and video counts.

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posted about 11 hours ago on techcrunch
Cooper Turley Contributor Share on Twitter Cooper is the crypto strategy lead at Audius. He manages social tokens like RAC and FWB and curates NFTs alongside prominent musicians and motion designers. He is an active contributor to web3 publications like The Defiant and Bankless and oversees a DeFi newsletter (This Week in DeFi). He is most active on Twitter. NFTs (non-fungible tokens) — or scarce digital content represented as tokens — are driving a new wave of crypto adoption. Thanks to the Ethereum blockchain, artists, gaming companies and content creators alike are utilizing token standards, which ascribe provenance to uniquely distinguishable assets. NFTs first made headlines in 2017 when Dapper Labs’ game CryptoKitties accounted for 95% of Ethereum network usage at its peak. While someone paying $170,000 for a digital cat seemed like an anomaly, what’s happening today blows that headline out of the water. Platforms like Nifty Gateway, SuperRare, Foundation and Zora are quickly emerging as the leading players for creatives to monetize work in a digital world. The estimated total value of crypto art has now passed $100 million according to cryptoart.io/data — just one vertical of a growing ecosystem of NFTs. Image Credits: https://cryptoart.io/data Collectible mania Just as we’ve seen an alternative asset class form around physical collectibles like Pokémon cards, NFTs are starting to showcase what this universe of rare hallmark brands looks like online. NBA Top Shot has seen close to $10 million in 24h volume according to CryptoSlam, with more than $100 million of “moments” being sold in less than one year of being live. The parent company behind NBA Top Shot, Dapper Labs, is said to be raising a $250 million round at a $2 billion valuation, as reported by The Block. Niche collectibles like CryptoPunks — or 10,000 unique collectible characters with scarce traits and qualities — now have a base floor of roughly $18,000 a piece. Just recently, Punk 4156 sold for 650 ETH, equivalent to roughly $1.3 million at today’s prices. Punk 4156 bought for 650 ETH ($1,245,633.99 USD) by 0xf476cd from 0x9e199d. https://t.co/kot9CYmE1h #cryptopunks #ethereum pic.twitter.com/KDTKRvtScj — CryptoPunks Bot (@cryptopunksbot) February 18, 2021 Crypto art paradigms Graphic designs and 3D designers are finding new platforms to showcase their work, with marketplaces like Nifty Gateway facilitating Supreme style drops for exclusive digital art. Mad Dog Jones recently set a record for $3.9 million worth of art sold in one sale, topping the previous record held by beeple for his $3.5 million “Everydays 2020 Collection” drop. No wonder top art galleries like Christies are asking to team up. With Bitcoin and Etherium reaching all-time high prices and investors looking for new places to allocate capital, the crypto art movement has given power back to the creatives. Vibrant collector communities like FlamingoDAO are forming around these drops, while protocols like Zora are quickly starting to support NFTs of all different verticals. Musicians like Mike Shinoda of Linkin Park and Fort Minor has released NFTs as a part of their strategy for his new single “Happy Endings” featuring popstar Iann Dior. EDM DJ and producer 3LAU is tokenizing his debut album “Ultraviolet” and Grammy-award winning musician RAC broke the SuperRare record for the highest NFT primary sale with his piece “Elephant Dreams.” I even sold a blog post for 2 ETH (or roughly $4,000) using a crypto media publication called Mirror! Why should I care? NFTs have exposed a creative side of crypto that is not only fun to play, but digestible and accessible to new users. As bigger names host their first NFT drops, they bring a new wave of attention to their millions of followers noticing crypto for the first time. This leaves people in a unique position to curate and discover this growing wave of scarce digital content. Showtime is aggregating NFTs to offer an Instagram-like experience, and the forthcoming music-specific NFT marketplace Catalog is creating a digital record store. As Nifty Gateway drops continue to sell out in seconds thanks to credit card payments and free transactions, new collectors are finding ways to collect their favorite artists and brands — a trend that is likely to take better form over the coming years. Areas of improvement While the sales figures showcase a clear demand for NFTs, it’s not without hiccups. More on NFT Why the next CryptoKitties mania won’t be about collectables What next? Oh yes, turning a luxury car into a non-fungible token Luxury watch maker Breitling issues digital certificates on the Ethereum blockchain Pinterest employee #1 launches blockchain art market MakersPlace The vast majority of NFT platforms today require users to be familiar with Ethereum wallets like MetaMask. This means collectors need to purchase ETH from an exchange like Coinbase and send it to a non-custodial address that consists of a long string of numbers and letters to get started. Once they’re there, they need to pay upwards of $100 worth of fees to make a transaction and place a bid. The same goes for artists creating NFTs, causing community funds like MintFund to pop up and cover the operational costs of launching their first NFT. Luckily, platforms like Audius are addressing these pain points head on. With 2 million monthly active users — the most of any Ethereum application today — Audius replaced MetaMask with an email and password login wallet called Hedgehog. By removing key management and transaction costs, users are able to access the wonderful world of crypto without significant start-up costs. NFT bubble? What’s happening in the NFT ecosystem today is nothing short of a paradigm shift for a maturing sector of cryptocurrencies. As avid collectors frame their digital art using companies like Infinite Objects, there’s no denying the vast majority of buyers are here to speculate. This increased demand signals interest, but is highly reminiscent of the 2017 ICO boom that caused the market to crash many years ago. However, out of that multi-year bear market came a strong wave of foundational companies and products like Uniswap and Compound that are here to stay. It’s this writer’s bet that the same will happen with NFTs. Until then, remember that digital content does have value, and crypto collectors are flocking to lay their namesake on the biggest collections of tomorrow. People have spent over $1M buying virtual cats on the Ethereum blockchain

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posted about 17 hours ago on techcrunch
While Denmark and Copenhagen don’t often come up as a destination for European startups, it has a thriving local tech scene that’s home to some of the better startup conferences. After all, who doesn’t want to visit Copenhagen? A highly educated population, great universities, excellent healthcare and great transport links to Europe make the city as good a place as any to start up a company. Amongst our investors, we found the trends they were most interested in included sustainable supply chain logistics, esports and gaming, enterprise SaaS, climate tech, deep tech hardware, agritech and edtech. And many said they are interested in the future of work and the transition to different ways of working. Companies they are excited by included: Afresh Technologies, Seaborg Technologies (nuclear reactors), Labster (virtual science labs), Normative.io (social and environmental impact measurement) and DEMI (connecting with chefs). In general, investors said they are focused on their home ground but are also spreading their wings to the “New Nordics” (Nordic and Baltic) region. Some are also investing in large European and North American hub cities. The “green shoots” of recovery they see are appearing in anything digital that comes with a community, as well as among startups that are able to leverage the pandemic to generate new business models that are faster than incumbents. Use discount code EXTRAKNASE to save 25% off a 1-year Extra Crunch membership. This offer is only available to readers in Europe and expires on April 30, 2021. We surveyed: Sara Rywe, associate, byFounders Mads Hørlyck, associate, Maersk Growth Henrik Møller Kristensen, associate, Bumble Ventures Benjamin Ratz, partner, Nordic Makers Mark Emil Hermansen, associate, Astanor Eric Lagier, managing partner, byFounders Sara Rywe, associate, byFounders What trends are you most excited about investing in, generally? Software and tech (I’m personally extra excited about the “future of work,” fintech, and “future of food”). What’s your latest, most exciting investment? Digitail (a veterinary software provider solving the gap between the ever-growing expectations of millennial pet parents and the experience offered by veterinarians with their current tools). Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now? I would like to see more founders with global ambitions in the “uniquely transformative” software category (the same way Airbnb transformed the hotel industry and Uber transformed the taxi industry). Many startups we see today are building a feature instead of a full solution and their vision is about making industries incrementally better. So, here’s a callout to all of you Nordic or Baltic visionary founders out there: Write me! What are you looking for in your next investment, in general? We always look for competent, visionary and passionate founders building products that people love. As an industry-agnostic VC, we keep our eyes open for a range of different opportunities. Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about? Some of the current trends that I see include: Fintech: salary advances, factoring, sustainability reporting and measurements. Food tech: alternative protein, pet food, food waste. Future of work: virtual offices, collaboration, productivity tools. If you decide to enter any of the above-mentioned industries, I therefore encourage you to really be thoughtful in how you differentiate yourself and/or how your team is better suited to execute on the mission. How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less? Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders? Denmark is very well positioned to succeed in sustainability and energy (many good talents coming from e.g., Vestas and DTU), consumer goods (there’s a large history in the country around building brands such as Lego, Carlsberg, etc.), and biotech (Novo Nordisk among others playing a big part). Moreover, software scaleups such as Peakon, Pleo, and Templafy are really leading the way for a new generation of tech startups to thrive in Denmark. When looking at Danish founder particularly, I’m very excited to see companies such as Qvin revolutionizing healthcare for women by using period blood as an opportunity for a noninvasive blood test. How should investors in other cities think about the overall investment climate and opportunities in your city? They should be very excited! Just look at what we’ve seen in 2021 so far: Exits: Peakon $700 million exit and Humio $400 million exit. Large rounds: Public.com raising $220 million, Vivino raising $115 million and Labster raising $60 million led by Andreessen Horowitz Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work? Somewhat. We already see a lot of innovation outside of Copenhagen in cities such as Aarhus and Odense. Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times? One industry that has been hit hard by COVID-19 is of course travel and hospitality. The flipside of this is that we see a lot of innovation due to that. Examples from our own portfolio include: AeroGuest — a platform that allows for a “touch-free” travel experience (skipping lines and reception desks, direct online room booking, etc.). BobW — a new type of sustainable travel accommodation bringing the best of both worlds: “home meets hotel.” How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now? COVID-19 has not impacted our investment strategy massively and we have the same focus as before (investing in software and tech). With that said, we are happy to see some industries getting an uplift in these difficult times, such as sustainability and impact. The biggest worries of our portfolio company founders have been around volatility and uncertainty. Since the first lockdown our advice has been simple: You can’t control the outcome. We’ve therefore worked together to ensure that they have some proper scenario planning in place and that we think creatively of how to mitigate eventual negative effects on their business. Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic? Tame — one of our portfolio companies — expanded their event platform to also include virtual events, which made it really take off in COVID times. Corti — another portfolio company of ours — could in less than four weeks build a product for helping fight COVID-19 with artificial intelligence. Both of these companies are good examples of how “adapting their products” due to the pandemic led to great results. What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two. The sudden rise of awareness around impact and ESG among VCs! Several great conversations have been held on how to improve our ways of working. Who are key startup people you see creating success locally, whether investors, founders or even other types of startup ecosystems roles like lawyers, designers, growth experts, etc. We’re trying to highlight the movers and shakers who outsiders might not know. Some of the extraordinary founders that I look up to from Denmark include: Jakob Jønck (Simple Feast), Andreas Cleve and Lars Maaløe (Corti), Sara Naseri and Søren Therkelsen (Qvin), Niels Martin Brochner, Jarek Owczarek and Viktor Heide (Contractbook), Jacob Hansen, Esben Friis-Jensen, Jakob Storm and Christian Hansen (Cobalt) among others. There’s also a range of great investors in Denmark including Helle Uth, Christel Piron, Alexander Viterbo-Horten and Anders Kjær amongst others at PreSeed Ventures and Daniel Nyvang Mariussen with his team at Bumble Ventures. Also, the Danish tech ecosystem would not be what it is without all the work that Vækstfonden does. Mads Hørlyck, associate, Maersk Growth What trends are you most excited about investing in, generally? Supply chain/logistics including sustainable supply chains. What’s your latest, most exciting investment? Afresh Technologies. Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now? In general there are still plenty of opportunities across various parts of the supply chain. We have no particular specific preferences as such at the moment. What are you looking for in your next investment, in general? Digital solution to drive efficiencies across one or more subparts of the supply chain, both upstream and downstream focus. Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about? Freight forwarding has been maturing in Europe and North America with several large startups in both regions. However, the market is still large but it requires a strong new model as it’s also low margins. How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less? Less/little focus on Denmark. Main priority in large European/North American hubs. Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders? Startups with the medical and supporting functions tech are doing well. We are excited about Onomondo in the Danish scene — also a portfolio company of ours. How should investors in other cities think about the overall investment climate and opportunities in your city? As an upcoming opportunity. Several tech hubs have been created and there is a general good environment including state-backed loans/pre-seed investments and fairly many angels to get going. Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work? We don’t expect any significant changes to the founder-environment in Denmark (too little country). Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times? We see an increased focus on our investment area: Supply chain/logistics as people throughout the pandemic have been much more exposed to and dependent on flexible and reliable supply chains. All the way from supply resilience, supply chain visibility, fulfillment and to last-mile delivery. Consumers have the power to drive changes in supply chains. How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now? Sales conversion rates decreasing/pipelines drying out. Advice is, like everyone else, to minimize cost and extend runway by getting as close to profitability as model allows. Based on this funding needs can be discussed. Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic? Yes, we have seen some startups being able to leverage the pandemic over incumbents due to their more flexible and digital structure. What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two. We have yet to see a default wave both globally within our investment area but also in general in Denmark. Henrik Møller Kristensen, associate, Bumble Ventures What trends are you most excited about investing in, generally? Some of the trends we’re excited about are (1) the growing market of digital media and entertainment, in particular esports and gaming, (2) enterprise SaaS, e.g., related to the future of work, (3) climate change solutions, e.g., deep tech hardware and software, and (4) e-commerce businesses, in particular digital native vertical brands and direct-to-consumer cases. Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now? Products and services to satisfy the needs of the aging population. The number of elderly people will be growing significantly over the next decades, establishing a growing market for products and services to satisfy the needs from this demographic change and reduce the pressure on societies. What are you looking for in your next investment, in general? We highly value team and traction. We are looking for exceptional founders with strong competencies in engineering, product and commercial, preferably with years of experience from the industry they are entering with a new solution. We prefer some indication of product-market fit. We like methodical revenue growth driven by paying customers, rich cohort grids and controllable funnels that proves a robust core business. We don’t like products that are still 2-3 years away from monetization. This means that we will miss the next Facebook, but we are okay with that. Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about? Traditional social media and apps that require millions of users before being able to turn on the business model. SaaS marketing tools also seem crowded. How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less? Next week we will announce our first investment outside Denmark. This is our first step toward being present not only in Denmark, but in the Nordics. Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders? Well-positioned industries in Denmark are medtech, fintech, gaming and clean tech. We’re excited about GamerzClass, Pie Systems, LeadFamly, Omnigame, Organic Basics, Cap desk, Roccamore, Too Good To Go, Pleo, Tradeshift, SYBO, Unity and more. Exceptional founders are Victor Folmann from GamerzClass, Sunny Long from Pie Systems, Frederikke Antonie Schmidt from Roccamore and Christian Gabriel from Capdesk. How should investors in other cities think about the overall investment climate and opportunities in your city? Historically, there has been a need for more capital and talent to keep successful growth-stage startups in Denmark and not have to move to foreign countries to attract talent and capital. However, the investment climate is getting better. Greater access to capital and talent go hand in hand, and what is really changing the investment climate for the better is founders of successful Danish startups turning back to Denmark and reinvesting in the startup community. Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work? I think we’ll see more attraction to remote work in the future. However, I believe it is important for startups to be close to other great like-minded startups, founders, advisors and investors, not only virtually but in real life. Establishing a great network and personal relationships are very important factors to succeed and remote is not suited very well for that in my opinion. Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times? The travel and hospitality industry look weaker and we’ll see a shift toward lower demand due to remote work and sustainability issues. On the other side, gaming, e-commerce and digital products and services are growing as you will have more people online behind the screens. How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now? We are still happy to invest despite COVID-19. Gaming has, for example, been positively affected by COVID-19, however, many startups are also struggling due to COVID-19. The best a startup can do is to manage the runway, have close dialogue with their investors, cut costs and try to pivot to the changes. Look for opportunities, not boundaries. Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic? Not yet. Only a few of our portfolio companies are negatively affected by COVID-19. What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two. Investors are willing to make new investments and help out struggling portfolio companies. Founders are keeping their heads high and making the best out of the new circumstances. In some cases it actually stimulates new innovations. Benjamin Ratz, partner, Nordic Makers What trends are you most excited about investing in, generally? Energy and the transition to a fossil fuel society, data as governance and the changing role of education. What’s your latest, most exciting investment? Seaborg — building modular, small and safe nuclear reactors. Labster — virtual science labs that help students all over the world immerse in science and STEM. Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now? Improving the public sector. What are you looking for in your next investment, in general? Views on how and if the world has permanently changed in behavior due to the pandemic. Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about? Micromobility, teledocs. How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less? 100%. What are companies you are excited about (your portfolio or not), which founders? Willa. Corti. How should investors in other cities think about the overall investment climate and opportunities in your city? A lot of founders leaving success stories of the region. Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come? No but we expect the cities to produce more. Mark Emil Hermansen, associate, Astanor What trends are you most excited about investing in, generally? Food and agrotech. What’s your latest, most exciting investment? DEMI. Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now? I’d love to see more food tech companies that “get food” — the human element of it that is. Too many startups focus only on the technology, less on the fact that it should be deeply human centered. This is so prevalent that I instinctively stay away from startups dubbing themselves as “food tech” — food is not tech and tech is not food and therein lies the challenge and the prize. Here’s a read that kind of sums it up. What are you looking for in your next investment, in general? Anything that reminds me of these first lines from “On The Road”: “They danced down the streets like dingledodies, and I shambled after as I’ve been doing all my life after people who interest me, because the only people for me are the mad ones, the ones who are mad to live, mad to talk, mad to be saved, desirous of everything at the same time, the ones that never yawn or say a commonplace thing, but burn, burn, burn …”. Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about? DNVB. How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less? 25% local (DK is still immature from a startup standout — yet the opportunity is that the VC footprint is small and relatively unsophisticated). Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders? Companies: Online communities such as DEMI. Founder: Erez Galonska of Infarm. How should investors in other cities think about the overall investment climate and opportunities in your city? Tons of opportunity if you have access to the right deal flow/pedigree. Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times? Communities that transcend digital (like Tonsser and DEMI). How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now? Worries: Uncertainty and recruitment strategy. Advice: Survive and prepare. Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic? Anything physical that has retail footprint. Anything digital that has a community footprint. What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two. That everyone’s pumped for what’s about to come (post-COVID) and the realization (or hope?) that nothing will be as before. Who are key startup people you see creating success locally? Kasper Ottesen, Highbridge (legal). Kasper Hulthin (entrepreneur and investor). Christian Tang-Jespersen (investor). Eric Lagier, managing partner, byFounders What trends are you most excited about investing in, generally? Future of work, productivity improvement platforms. What’s your latest, most exciting investment? Normative. Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now? Future of recruiting. What are you looking for in your next investment, in general? Passionate founders, solving big problems to build a better tomorrow. How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less? We are focused on the New Nordics (Nordic and Baltic) region having shown the biggest growth potential in Europe. Which industries in your city and region seem well positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders? Climate tech, health tech, fintech. Normative, Corti, Lucinity. How should investors in other cities think about the overall investment climate and opportunities in your city? Copenhagen is booming and there is now a strong foundation of experienced founders building really transformative companies. Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work? No — but I expect to see much more diverse teams with a priority on remote first. Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times? An acceleration of online, remote, e-commerce and general faster pace of transactions. How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now? COvid-19 is a giant accelerator of future trends. Those founders that have adapted best will be the winners of tomorrow. Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic? Absolutely. What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two. How founders persevere in these times of massive change. Who are key startup people you see creating success locally? Jakob Jønck, founder, SimpleFeast; Kristian Rönn, founder, Normative; Andreas Cleve and Lars Maaløe, founders, Corti.

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posted about 23 hours ago on techcrunch
Non-fungible tokens have been around for two years, but these NFTs, one-of-one digital items on the Ethereum and other blockchains, are suddenly becoming a more popular way to collect visual art primarily, whether it’s an animated cat or an NBA clip or virtual furniture. “Suddenly” is hardly an overstatement. According to the outlet Cointelegraph, during the second half of last year, $9 million worth of NFT goods sold to buyers; during one 24-hour window earlier this week, $60 million worth of digital goods were sold. What’s going on? A thorough New York Times piece on the trend earlier this week likely fueled new interest, along with a separate piece in Esquire about the artist Beeple, a Wisconsin dad whose digital drawings, which he has created every single day for the last 13 years, began selling like hotcakes in December. If you need further evidence of a tipping point (and it is ample right now), consider that the work of Beeple, whose real name is Mike Winkelmann, was just made available through Christie’s. It’s the venerable auction house’s first sale of exclusively digital work. To better understand the market and why it’s blowing up in real time, we talked this week with David Pakman, a former internet entrepreneur who joined the venture firm Venrock a dozen years ago and began tracking Bitcoin soon after, even mining the cryptocurrency at his Bay Area home beginning in 2015. (“People would come over and see racks of computers, and it was like, ‘It’s sort of hard to explain.'”) Perhaps it’s no surprise that he also became convinced early on of the promise of NFTs, persuading Venrock to lead the $15 million Series A round for a young startup, Dapper Labs, when its primary offering was CryptoKitties, limited-edition digital cats that can be bought and bred with cryptocurrency. While the concept baffled some at the time, Pakman has long seen the day when Dapper’s offerings will be far more extensive, and indeed, a recent Dapper deal with the NBA to sell collectible highlight clips has already attracted so much interest that Dapper is reportedly right now raising $250 million in new funding at a post-money valuation of $2 billion. While Pakman declined to confirm or correct that figure, he did answer our other questions in a chat that’s been edited here for length and clarity. TC: David, dumb things down for us. Why is the world so gung-ho about NFTs right now? DP: One of the biggest problems with crypto — the reason it scares so many people — is it uses all these really esoteric terms to explain very basic concepts, so let’s just keep it really simple. About 40% of humans collect things — baseball cards, shoes, artwork, wine. And there’s a whole bunch of psychological reasons why. Some people have a need to complete a set. Some people do it for investment reasons. Some people want an heirloom to pass down. But we could only collect things in the real world because digital collectibles were too easy to copy. Then the blockchain came around and [it allowed us to] make digital collectibles immutable, with a record of who owns what that you can’t really copy. You can screenshot it, but you don’t really own the digital collectible, and you won’t be able to do anything with that screenshot. You won’t be able to to sell it or trade it. The proof is in the blockchain. So I was a believer that crypto-based collectibles could be really big and actually could be the thing that takes crypto mainstream and gets the normals into participating in crypto — and that’s exactly what’s happening now. TC: You mentioned a lot of reasons that people collect items, but one you didn’t mention is status. Assuming that’s one’s motivation, how do you show off what you’ve amassed online?  DP: You’re right that one of the other reasons why we collect is to show it off status, but I would actually argue it’s much easier to show off our collections in the digital world. If I’m a car collector, the only way you’re going to see my cars is to come over to the garage. Only a certain number of people can do that. But online, we can display our digital collections. NBA Top Shop, for example, makes it very easy for you to show off your moments. Everyone has a page and there’s an app that’s coming and you can just show it off to anyone in your app, and you can post it to your social networks. And it’s actually really easy to show off how big or exciting your collection is. TC: It was back in October that Dapper rolled out these video moments, which you buy almost like a Pokemon set in that you’re buying a pack and know you’ll get something “good” but don’t know what. But while almost half it sales have come in through the last week. Why? DP: There’s only about maybe 30,000 or 40,000 people playing right now. It’s growing 50% or 100% a day. But the growth has been completely organic. The game is actually still in beta, so we haven’t been doing any marketing other than posting some stuff on Twitter. There hasn’t been attempt to market this and get a lot of players [talking about it] because we’re still working the bugs out, and there are a lot of bugs still to be worked out. But a couple NBA players have seen this and gotten excited about their own moments [on social media]. And there’s maybe a little bit of machismo going on where, ‘Hey, I want my moment to trade for a higher price.’ But I also think it’s the normals who are playing this. All you need to play is a credit card, and something like 65% of the people playing have never owned or traded in crypto before. So I think the thesis that crypto collectibles could be the thing that brings mainstream users into crypto is playing out before our eyes. TC: How does Dapper get paid? DP: We get 5% of secondary sales and 100% minus the cost of the transaction on primary sales. Of course, we have a relationship with the NBA, which collects some of that, too. But that’s the basic economics of how the system works. TC: Does the NBA have a minimum that it has to be paid every year, and then above and beyond that it receives a cut of the action? DP: I don’t think the company has gone public with the exact economic terms of their relationships with the NBA and the Players Association. But obviously the NBA is the IP owner, and the teams and the players have economic participation in this, which is good, because they’re the ones that are creating the intellectual property here. But a lot of the appreciation of these moments — if you get one in a pack and you sell it for a higher price — 95% of that appreciation goes to the owner. So it’s very similar to baseball cards, but now IP owners can participate through the life of the product in the downstream economic activity of their intellectual property, which I think is super appealing whether you’re the NBA or someone like Disney, who’s been in the IP licensing business for decades. And it’s not just major IP where this NFT space is happening. It’s individual creators, musicians, digital artists who could create a piece of digital art, make only five copies of it, and auction it off. They too can collect a little bit each time their works sell in the future. TC: Regarding NBA Top Shot specifically, prices range massively in terms of what people are paying for the same limited-edition clip. Why? DP: There are two reasons. One is that like scarce items, lower numbers are worth more than higher numbers, so if there’s a very particular LeBron moment, and they made 500 [copies] of them, and I own number one, and you own number 399, the marketplace is ascribing a higher value to the lower numbers, which is very typical of limited-edition collector pieces. It’s sort of a funny concept. But it is a very human concept. The other thing is that over time there has been more and more demand to get into this game, so people are willing to pay higher and higher prices. That’s why there’s been a lot of price appreciation for these moments over time. TC: You mentioned that some of the esoteric language around crypto scares people, but so does the fact that 20% of the world’s bitcoin is permanently inaccessible to its owners, including because of forgotten passwords. Is that a risk with these digital items, which you are essentially storing in a digital locker or wallet? DP: It’s a complex topic,  but I will say that Dapper has tried to build this in a way where that won’t happen, where there’s effectively some type of password recovery process for people who are storing their moments in Dapper’s wallet. You will be able to take your moments away from Dapper’s account and put it into other accounts, where you may be on your own in terms of password recovery. TC: Why is it a complex topic? DP: There are people who believe that even though centralized account storage is convenient for users, it’s somehow can be distrustful — that the company could de-platform you or turn your account off. And in the crypto world, there’s almost a religious ferocity about making sure that no one can de-platform you, that the things that you buy — your cryptocurrencies or your NFTs. Long term, Dapper supports that. You’ll be able to take your moments anywhere you want. But today, our customers don’t have to worry about that I-lost-my-password-and-I’ll-never-get-my-moments-again problem.

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Facebook unveils another experimental app, Atlassian acquires a data visualization startup and Newsela becomes a unicorn. This is your Daily Crunch for February 26, 2021. The big story: Facebook launches rap app The new BARS app was created by NPE Team (Facebook’s internal R&D group), allowing rappers to select from professionally created beats, and then create and share their own raps and videos. It includes autotune and will even suggest rhymes as you’re writing the lyrics. This marks NPE Team’s second musical effort — the first was the music video app Collab. (It could also be seen as another attempt by Facebook to launch a TikTok competitor.) BARS is available in the iOS App Store in the U.S., with Facebook gradually admitting users off a waitlist. The tech giants Atlassian is acquiring Chartio to bring data visualization to the platform — Atlassian sees Chartio as a way to really take advantage of the data locked inside its products. Yelp puts trust and safety in the spotlight — Yelp released its very first trust and safety report this week, with the goal of explaining the work that it does to crack down on fraudulent and otherwise inaccurate or unhelpful content. Startups, funding and venture capital Newsela, the replacement for textbooks, raises $100M and becomes a unicorn —  If Newsela is doing its job right, its third-party content can replace textbooks within a classroom altogether, while helping teachers provide fresh, personalized material. Tim Hortons marks two years in China with Tencent investment — The Canadian coffee and doughnut giant has raised a new round of funding for its Chinese venture. Sources: Lightspeed is close to hiring a new London-based partner to put down further roots in Europe — According to multiple sources, Paul Murphy is being hired away from Northzone. Advice and analysis from Extra Crunch In freemium marketing, product analytics are the difference between conversion and confusion — Considering that most freemium providers see fewer than 5% of free users move to paid plans, even a slight improvement in conversion can translate to significant revenue gains. As BNPL startups raise, a look at Klarna, Affirm and Afterpay earnings — With buy-now-pay-later options, consumers turn a one-time purchase into a limited string of regular payments. (Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.) Everything else Jamaica’s JamCOVID pulled offline after third security lapse exposed travelers’ data — JamCOVID was set up last year to help the government process travelers arriving on the island. AT&T is turning DirecTV into a standalone company — AT&T says it will own 70% of the new company, while private equity firm TPG will own 30%. How to ace the 1-hour, and ever-elusive, pitch presentation at TC Early Stage — Norwest’s Lisa Wu has a message for founders: Think like a VC during your pitch presentation. The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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Astra, the Alameda-based space launch startup that recently announced its intent to go public via a SPAC merger, has secured a contract to deliver six cube satellites to space on behalf of NASA. Astra stands to be paid $7.95 million by the agency for fulfilment of the contract. This will be a key test of Astra’s responsive rocket capabilities, with a planned three-launch mission profile spanning up to four months, currently targeting sometime between January 8 and July 31 of 2022. The satellites are for NASA’s Time-Resolved Observations of Precipitation Structure and Storm Intensity with a Constellation of SmallSats (TROPICS) mission, which is a science mission that will collect data about hurricanes and their formation, including temperature, pressure and humidity readings. Like the extremely long, tortured-for-an-acronym name of the mission suggests, the data will be collected using a small constellation of satellites, each roughly the size of a shoebox.\ Rocket startup Astra is going public via SPAC Astra completed its second of three planned launches designed to ultimately achieve orbit late last year, and exceeded its own expectations by reaching space and nearly achieving orbit. The company said that based on the data it collected from that mission, the final remaining barriers to actually making orbit are all fixable via changes to its software. Based on that, Astra CEO and founder Chris Kemp said that it believes it’s now ready to begin flying commercial payloads. Kemp was formerly CTO of NASA, and has co-founded a number of technology companies over the years as well. This latest NASA mission isn’t its first contracted launch – far from it, in fact, since the company has said it currently has more than 50 total missions on its slate from both private and government customers, with a total value of over $150 million in revenue.

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Wall Street investors can be fickle beasts. Take Salesforce as an example. The CRM giant announced a $5.82 billion quarter when it reported earnings yesterday. Revenue was up 20% year over year. The company also reported $21.25 billion in total revenue for the just closed FY2021, up 24% YoY. If that wasn’t enough, it raised its FY2022 guidance (its upcoming fiscal year) to over $25 billion. What’s not to like? You want higher quarterly revenue, Salesforce gave you higher revenue. You want high growth and solid projected revenue — check and check. In fact, it’s hard to find anything to complain about in the report. The company is performing and growing at a rate that is remarkable for an organization of its size and maturity — and it is expected to continue to perform and grow. How did Wall Street react to this stellar report? It punished the stock with the price down over 6%, a pretty dismal day considering the company brought home such a promising report card. Image Credits: Google So what is going on here? It could be that investors simply don’t believe the growth is sustainable or that the company overpaid when it bought Slack at the end of last year for over $27 billion. It could be it’s just people overreacting to a cooling market this week. But if investors are looking for a high growth company, Salesforce is delivering that While Slack was expensive, it reported revenue over $250 million yesterday, pushing it over the $1 billion run rate with more than 100 customers paying over $1 million in ARR. Those numbers will eventually get added to Salesforce’s bottom line. Canaccord Genuity analyst David Hynes Jr wrote that he was baffled by investor’s reaction to this report. Like me, he saw a lot of positives. Yet Wall Street decided to focus on the negative, and see “the glass half empty” as he put it in his note to investors. “The stock is clearly in the show-me camp, which means it’s likely to take another couple of quarters for investors to buy into the idea that fundamentals are actually quite solid here, and that Slack was opportunistic (and yes, pricey), but not an attempt to mask suddenly deteriorating growth,” Hynes wrote. During the call with analysts yesterday, Brad Zelnick from Credit Suisse asked how well the company could accelerate out of the pandemic-induced economic malaise, and Gavin Patterson, Salesforce’s president and chief revenue officers says the company is ready whenever the world moves past the pandemic. “And let me reassure you, we are building the capability in terms of the sales force. You’d be delighted to hear that we’re investing significantly in terms of our direct sales force to take advantage of that demand. And I’m very confident we’ll be able to meet it. So I think you’re hearing today a message from us all that the business is strong, the pipeline is strong and we’ve got confidence going into the year,”Patterson said. While Salesforce execs were clearly pumped up yesterday with good reason, there’s still doubt out in investor land that manifested itself in the stock starting down and staying down all day. It will be as Hynes suggested up to Salesforce to keep proving them wrong. As long as they keep producing quarters like the one they had this week, they should be just fine, regardless of what the naysayers on Wall Street may be thinking today. Salesforce buys Slack in a $27.7B megadeal

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When I needed a new sofa several months ago, I was pleased to find a buy now, pay later (BNPL) option during the checkout process. I had prepared myself to make a major financial outlay, but the service fees were well worth the convenience of deferring the entire payment. Coincidentally, I was siting on said sofa this morning and considering that transaction when Alex Wilhelm submitted a column that compared recent earnings for three BNPL providers: Afterpay, Affirm and Klarna. I asked him why he decided to dig into the sector with such gusto. Full Extra Crunch articles are only available to members. Use discount code ECFriday to save 20% off a one- or two-year subscription. “What struck me about the concept was that we had just seen earnings from Affirm,” he said. “So we had three BNPL players with known earnings, and I had just covered a startup funding round in the space.” “Toss in some obvious audience interest, and it was an easy choice to write the piece. Now the question is whether I did a good job and people find value in it.” Thanks very much for reading Extra Crunch this week! Have a great weekend. Walter Thompson Senior Editor, TechCrunch @yourprotagonist As BNPL startups raise, a look at Klarna, Affirm and Afterpay earnings As BNPL startups raise, a look at Klarna, Affirm and Afterpay earnings Pilot CEO Waseem Daher tears down his company’s $60M Series C pitch deck Image Credits: Colin Hawkins (opens in a new window) / Getty Images I avoid running Extra Crunch stories that focus on best practices; you can find those anywhere. Instead, we look for “here’s what worked for me” articles that give readers actionable insights. That’s a much better use of your time and ours. With that ethos in mind, Lucas Matney interviewed Pilot CEO Waseem Daher to deconstruct the pitch deck that helped his company land a $60M Series C round. “If the Series A was about, ‘Do you have the right ingredients to make this work?’ then the Series B is about, ‘Is this actually working?'” Daher tells TechCrunch. “And then the Series C is more, ‘Well, show me that the core business is really working and that you have unlocked real drivers to allow the business to continue growing.'” Pilot CEO Waseem Daher tears down his company’s $60M Series C pitch deck Can solid state batteries power up for the next generation of EVs? Image Credits: Bryce Durbin A global survey of automobile owners found three hurdles to overcome before consumers will widely embrace electric vehicles: 30-minute charging time 300-mile range $36,000 maximum cost “Theoretically, solid state batteries (SSB) could deliver all three,” but for now, lithium-ion batteries are the go-to for most EVs (along with laptops and phones). In our latest market map, we’ve plotted the new and established players in the SSB sector and listed many of the investors who are backing them. Although SSBs are years away from mass production, “we are on the cusp of some pretty incredible discoveries using major improvements in computational science and machine learning algorithms to accelerate that process,” says SSB startup founder Amy Prieto. Can solid state batteries power up for the next generation of EVs?   Dear Sophie: Which immigration options are the fastest? Image Credits: Bryce Durbin/TechCrunch Dear Sophie: Help! Our startup needs to hire 50 engineers in artificial intelligence and related fields ASAP. Which visa and green card options are the quickest to get for top immigrant engineers? And will Biden’s new immigration bill help us? — Mesmerized in Menlo Park Dear Sophie: Which immigration options are the fastest?   Why F5 spent $2.2B on 3 companies to focus on cloud native applications Image Credits: Jasmin Merdan / Getty Images Founded in 1996, F5 has repositioned itself in the networking market several times in its history. In the last two years, however, it spent $2.2 billion to acquire Shape Security, Volterra and NGINX. “As large organizations age, they often need to pivot to stay relevant, and I wanted to explore one of these transformational shifts,” said enterprise reporter Ron Miller. “I spoke to the CEO of F5 to find out the strategy behind his company’s pivot and how he leveraged three acquisitions to push his organization in a new direction.” Why F5 spent $2.2B on 3 companies to focus on cloud native applications   DigitalOcean’s IPO filing shows a two-class cloud market Image Credits: Who_I_am (opens in a new window) / Getty Images Cloud hosting company DigitalOcean filed to go public this week, so Ron Miller and Alex Wilhelm unpacked its financials. “AWS and Microsoft Azure will not be losing too much sleep worrying about DigitalOcean, but it is not trying to compete head-on with them across the full spectrum of cloud infrastructure services,” said John Dinsdale, chief analyst and research director at Synergy Research. DigitalOcean’s IPO filing shows a two-class cloud market   Oscar Health’s initial IPO price is so high, it makes me want to swear Image Credits: Nigel Sussman (opens in a new window) I asked Alex Wilhelm to dial back the profanity he used to describe Oscar Health’s proposed valuation, but perhaps I was too conservative. In March 2018, the insurtech unicorn was valued at around $3.2 billion. Today, with the company aiming to debut at $32 to $34 per share, its fully diluted valuation is closer to $7.7 billion. “The clear takeaway from the first Oscar Health IPO pricing interval is that public investors have lost their minds,” says Alex. His advice for companies considering an IPO? “Go public now.” Oscar Health’s initial IPO price is so high, it makes me want to swear   If Coinbase is worth $100 billion, what’s a fair valuation for Stripe? Image Credits: Nigel Sussman (opens in a new window) Last week, Alex wrote about how cryptocurrency trading platform Coinbase was being valued at $77 billion in the private markets. As of Monday, “it’s now $100 billion, per Axios’ reporting.” He reviewed Coinbase’s performance from 2019 through the end of Q3 2020 “to decide whether Coinbase at $100 billion makes no sense, a little sense or perfect sense.” If Coinbase is worth $100 billion, what’s a fair valuation for Stripe?   Winning enterprise sales teams know how to persuade the Chief Objection Officer Image Credits: Alla Aramyan (opens in a new window) / Getty Images A skilled software sales team devotes a lot of resources to pinpointing potential customers. Poring through LinkedIn and reviewing past speaker lists at industry conferences are good places to find decision-makers, for example. Despite this detective work, GGV Capital investor Oren Yunger says sales teams still need to identify the deal-blockers who can spike a deal with a single email. “I call this person the Chief Objection Officer.” Winning enterprise sales teams know how to persuade the Chief Objection Officer   3 strategies for elevating brand authority in 2021 Image Credits: Klaus Vedfelt / Getty Images Every startup wants to raise its profile, but for many early-stage companies, marketing budgets are too small to make a meaningful difference. “Providing real value through content is an excellent way to build authority in the short and long term,” says Amanda Milligan, marketing director at growth agency Fractl. 3 strategies for elevating brand authority in 2021   RIBS: The messaging framework for every company and product Image Credits: luchezar (opens in a new window) / Getty Images The most effective marketing uses good storytelling, not persuasion. According to Caryn Marooney, general partner at Coatue Management, every compelling story is relevant, inevitable, believable and simple. “Behind most successful companies is a story that checks every one of those boxes,” says Marooney, but “this is a central challenge for every startup.” RIBS: The messaging framework for every company and product   Ironclad’s Jason Boehmig: The objective of pricing is to become less wrong over time On a recent episode of Extra Crunch Live, Ironclad founder and CEO Jason Boehmig and Accel partner Steve Loughlin discussed the pitch that brought them together almost four years ago. Since that $8 million Series A, Loughlin joined Ironclad’s board. “Both agree that the work they put in up front had paid off” when it comes to how well they work together, says Jordan Crook. “We’ve always been up front about the fact that we consider the board a part of the company,” said Boehmig. Ironclad’s Jason Boehmig: The objective of pricing is to become less wrong over time TC Early Stage: The premiere how-to event for startup entrepreneurs and investors From April 1-2, some of the most successful founders and VCs will explain how they build their businesses, raise money and manage their portfolios. At TC Early Stage, we’ll cover topics like recruiting, sales, legal, PR, marketing and brand building. Each session includes ample time for audience questions and discussion. Use discount code ECNEWSLETTER to take 20% off the cost of your TC Early Stage ticket!

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If Southern California-based Road Runner Media succeeds, you’ll start seeing a lot more ads while you’re driving. That’s because the startup is placing digital screens on the back of technicians’ vans, delivery vehicles, buses and other commercial vehicles. Those screens can show both ads and serve as a brake light — according to founder and chairman Randall Lanham, the brake light functionality is required if you’re putting a sign on the back of a vehicle. “The way we look at it, we are a digital brake light,” Lanham said. Yes, the brake light is showing ads, but “the driver touching the brakes interrupts the ad.” (The sign can also indicate turns, reversing and emergency flashers. You can see a mock-up ad in the image above, and real footage in the video below.) To pursue this idea, Lanham (who described himself as a “recovering attorney”) enlisted Chris Riley as CEO — Riley’s experience includes several years as CEO of PepsiCo Australia and New Zealand. And the company announced this week that it has secured $62.5 million in debt financing from Baseline Growth Capital. The idea of putting ads on moving vehicles isn’t new. There are, of course, ads on the tops of taxis, and startups like Firefly are also putting digital signage on top of Ubers and Lyfts. But Riley said Road Runner’s ruggedized, high-resolution LCD screens are very different, due to their size, quality and placement. Rideshare and taxi ad startup Firefly acquires Strong Outdoor’s out-of-home ad business “[Taxi-top ads] don’t have the color, the brilliance, the clarity,” he said. “We can run a true video ad on the screen.” Riley also said the ads can be targeted based on GPS and time of day, and that the company eventually plans to add sensors to collect data on who’s actually seeing the ads. As for concerns that these big, bright screens might distract drivers, Lanham argued they’re actually attracting driver’s eyes to exactly where they should be, and creating a brake light that’s much harder to ignore. “Your eyes are affixed on the horizon, which is what the [Department of Transportation] wants — as opposed to on the floor or the radio or directly off to the left or right,” he said. “That’s where your safest driving occurs, when your eyes are up above the dashboard.” In fact, Lanham said he’s “very passionate” about the company’s mission, which in his view will make roads safer, and is creating a platform that could also be used to spread public service messages. “We have the ability to retrofit any vehicle and make it safer on the highways,” he added. “I really, truly believe that we will save lives, if we already haven’t.” The company says it already has 150 screens live in Atlanta, Boulder, Chicago, Dallas and Los Angeles, with plans to launch screens in Philadelphia and Washington, D.C. in March. Outdoor Advertising Is The New Black  

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Yelp released its very first trust and safety report this week, with the goal of explaining the work that it does to crack down on fraudulent and otherwise inaccurate or unhelpful content. With focus on local business reviews and information, you might think Yelp would be relatively free of the types of misinformation that other social media platforms struggle with. But of course, Yelp reviews are high stakes in their own way, since they can have a big impact on a business’ bottom line. Like other online platforms, Yelp relies on a mix of software and human curation. On the software side, one of the main tasks is sorting reviews into recommended and not recommended. Group Product Manager for Trust and Safety Sudheer Someshwara told me that a review might not be recommended because it appears to be written by someone with a conflict of interest, or it might be solicited by the business, or it might come from a user who hasn’t posted many reviews before and “we just don’t know enough information about the user to recommend those reviews to our community.” “We take fairness and integrity very seriously,” Someshwara said. “No employee at Yelp has the ability to override decisions the software has made. That even includes the engineers.” He added, “We treat every business the same, whether they’re advertising with us or not.” Image Credits: Yelp So the company says that last year, users posted more than 18.1 million reviews, of which 4.6 million (about 25%) were not recommended by the software. Someshwara noted that even when a review is not recommended, it’s not removed entirely — users just have to seek it out in a separate section. Removals do happen, but that’s one of the places where the user operations team comes in. As Vice President of Legal, Trust & Safety Aaron Schur explained, “We do make it easy for businesses as well as consumers to flag reviews. Every piece of content that’s flagged in that way does get reviewed by a live human to decide whether it should should be removed violating our guidelines.” Yelp says that last year, about 710,000 reviews (4%) were removed entirely for violating the company’s policies. Of those, more than 5,200 were removed for violating the platform’s COVID-19 guidelines (among other things, they prohibit reviewers from claiming they contracted COVID from a business, or from complaining about mask requirements or that a business had to close due to safety regulations). Another 13,300 were removed between May 25 and the end of the year for threats, lewdness, hate speech or other harmful content. “Any current event that takes place will find its way onto Yelp,” acknowledged Vice President of User Operations Noorie Malik. “People turn to Yelp and other social media platforms to have a voice.” But expressing political beliefs can conflict with what Malik said is Yelp’s “guiding principle,” namely “genuine, first-hand experience.” So Yelp has built software to detect unusual activity on a page and will also add a Consumer Alert when it believes there are “egregious attempts to manipulate ratings and reviews.” For example, it says there was a 206% increase in media-fueled incidents year-over-year. It’s not that you can’t express political opinions in your reviews, but the review has to come from first-hand experience, rather than being prompted by reading a negative article or an angry tweet about the business. Sometimes, she added, that means the team is “removing content with a point of view that we agree with.” One example that illustrates this distinction: Yelp will take down reviews that seem driven by media coverage suggesting that a business owner or employee behaved in a racist manner, but at the same time, it also labeled two businesses in December 2020 with a “Business Accused of Racism” alert reflecting “resounding evidence of egregious, racist actions from a business owner or employee.” Beyond looking at individual reviews and spikes in activity, Someshwara said Yelp will also perform “sting operations” to find groups that are posting fraudulent reviews. In fact, his team apparently shut down 1,200 user accounts associated with review rings and reported nearly 200 groups to other platforms. And it just rolled out an updated algorithm designed to better detect and un-recommend reviews coming from those groups. Yelp will show user feedback about businesses’ health and safety practices

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David Teten Contributor Share on Twitter David Teten is founder of Versatile VC and writes periodically at teten.com and @dteten. More posts by this contributor 15 steps to fundraising a new VC or private equity fund 12 ‘flexible VCs’ who operate where equity meets revenue share Katherine Boe Heuck Contributor Katherine Boe Heuck is a MBA candidate at MIT Sloan (class of 2022), a past intern at Versatile VC and a current intern at Metaprop NYC. What can we learn from the best 40 venture capital investments of all time? Well, we learn to invest exclusively in men, preferably white or Asian. We reviewed CB Insights’ global list of “40 of the Best VC Bets of all Time.” All of the 40 companies’ 92 founders were male. Of the 43 U.S.-based founders, 35 were white American; four were white immigrant/first generation, from France, Ukraine, Russia and Iran; and four were Indian immigrant/first generation. Of the 19 Western Europe/Israel-based founders, all were white. Of the 30 Asia-based founders, all were natives of the country in which they built their businesses: 23 Chinese, three Japanese, two Korean and two Indian. Image Credits: Versatile Venture Capital (opens in a new window) Of course, this dataset is incomplete. There are numerous examples of founders from underrepresented backgrounds who have generated extremely impressive returns. For example, Calendly’s Tope Awotona is Nigerian American; Sendgrid’s Isaac Saldana is Latinx; and Bumble’s Whitney Wolfe Herd is the second-youngest woman to take a company public. That said, the pattern in the dataset is striking. So, why invest in anyone who’s not a white or Asian male?  The conventional answer is that diversity pays. Research from BCG, Harvard Business Review, First Round Capital, the Kauffman Foundation and Illuminate Ventures shows that investors in diverse teams get better returns: Paul Graham, cofounder of Y Combinator (2015): “Many suspect that venture capital firms are biased against female founders. This would be easy to detect: among their portfolio companies, do startups with female founders outperform those without? A couple months ago, one VC firm (almost certainly unintentionally) published a study showing bias of this type. First Round Capital found that among its portfolio companies, startups with female founders outperformed those without by 63%.” Kauffman Fellows Report (2020): “Diverse Founding Teams generate higher median realized multiples (RMs) on Acquisitions and IPOs. Diverse Founding Teams returned 3.3x, while White Founding Teams returned 2.5x. The results are even more pronounced when looking at the perceived ethnicity of the executive team. Diverse Executive Teams returned 3.3x, while White Executive Teams only returned 2.0x. As mentioned above, we report realized multiples (RMs) only for successful startups that were acquired or went through the IPO process.” BCG (June 2018): “Startups founded and cofounded by women actually performed better over time, generating 10% more in cumulative revenue over a five-year period: $730,000 compared with $662,000.” BCG (January 2018): “Companies that reported above-average diversity on their management teams also reported innovation revenue that was 19 percentage points higher than that of companies with below-average leadership diversity — 45% of total revenue versus just 26%.” Peterson Institute for International Economics (2016): “The correlation between women at the C-suite level and firm profitability is demonstrated repeatedly, and the magnitude of the estimated effects is not small. For example, a profitable firm at which 30 percent of leaders are women could expect to add more than 1 percentage point to its net margin compared with an otherwise similar firm with no female leaders. By way of comparison, the typical profitable firm in our sample had a net profit margin of 6.4 percent, so a 1 percentage point increase represents a 15 percent boost to profitability.” How do we reconcile these two sets of data? Research going back a decade shows that diverse teams, companies and founders pay, so why are all of the VC home runs from white men, or Asian men in Asia, plus a few Asian men in the U.S.? First Round did not include their investment in Uber in their analysis we reference above on the grounds that it was an outlier. Of course, one could rebut that by saying traditional VC is all about investing in outliers. Seth Levine analyzed data from Correlation Ventures (21,000 financings from 2004-2013) and writes that “a full 65% of financings fail to return 1x capital. And perhaps more interestingly, only 4% produce a return of 10x or more, and only 10% produce a return of 5x or more.” In Levine’s extrapolated model, he found that in a “hypothetical $100M fund with 20 investments, the total number of financings producing a return above 5x was 0.8 – producing almost $100M of proceeds. My theoretical fund actually didn’t find their purple unicorn, they found 4/5ths of that company. If they had missed it, they would have failed to return capital after fees.” Benedict Evans observes that the best investors don’t seem to be better at avoiding startups that fail. “For funds with an overall return of 3-5x, which is what VC funds aim for, the overall return was 4.6x but the return of the deals that did better than 10x was actually 26.7x. For >5x funds, it was 64.3x. The best VC funds don’t just have more failures and more big wins —  they have bigger big wins.” The first problem with the outlier model of investing in VC is that it results in, on average, poor returns and is a risker proposition compared to alternative models. The Kauffman Foundation analyzed their own investments in venture capital (100 funds) over a 20-year period and found “only 20 of the hundred venture funds generated returns that beat a public-market equivalent by more than 3% annually,” while 62 “failed to exceed returns available from the public markets, after fees and carry were paid.” The outlier model of investing in VC also typically results in a bias toward investing in homogeneous teams. We suggest that the extremely homogeneous profiles of the big wealth creators above reflect the fact that these are people who took the biggest risks: financial, reputational and career risk. The people who can afford to take the biggest risks are also the people with the most privilege; they’re not as concerned about providing for food, shelter and healthcare as economically stressed people are. According to the Kauffman Foundation, a study of “549 company founders of successful businesses in high-growth industries, including aerospace, defense, computing, electronics and healthcare” showed that “more than 90 percent of the entrepreneurs came from middle-class or upper-lower-class backgrounds and were well-educated: 95.1 percent of those surveyed had earned bachelor’s degrees, and 47 percent had more advanced degrees.” But when you analyze the next tier down of VC success, the companies that don’t make Top 40 lists but land on Top 500 lists, you see a lot more diversity. In VC, 100x investment opportunities only come along once every few years. If you bet your VC fund on opportunities like that, you’re relying on luck. Hope is not a strategy. There are many 3x-20x return opportunities, and if you’re incredibly lucky (or Chris Sacca), you might get one 100x in your career. We prefer to invest based on statistics, not luck. That’s why Versatile VC provides companies with the option of an “alternative-VC” model, using a non-traditional term sheet designed to better align incentives between investors and founders. We also proactively seek to invest in diverse teams. Given the choice of running a fund with one 100x investment, or a fund with two 10x investments, we’ll take the latter. The former implies that we came perilously close to missing our one home run, and therefore we’re not doing such a great job investing. “While we all want to have invested in those exciting home-runs/unicorns, most investors are seeking the data points to construct reliable portfolios,” Shelly Porges, co-founder and managing partner of Beyond the Billion, observed. “That’s not about aiming for the bleachers but leveraging experience to reliably deliver on the singles and doubles it takes to get to home base. A number of the institutional investors we’ve spoken to have gone so far as to say that they can no longer meet their targets without alternatives, including venture investments. “ Lastly, the data above reflects companies that typically took a decade to build. As the culture changes, we anticipate that the 2030 “Top 40” wealth creators list will include many more people with diverse backgrounds. Just in 2018, 15 unicorns were born with at least one woman founder; in 2019, 21 startups founded or co-founded by a woman became unicorns. Why? “All else being equal, a larger pool of female-founded companies to select from for VC investing should increase the odds of a higher number of female-founded VC home runs,” said Michael Chow, research director for the National Venture Capital Association and Venture Forward. According to PitchBook, investments in women-led companies grew approximately 54 percent from 2015 to 2019, from 459 to 709. In the first three quarters of 2020, there have been 468 fundings of women-led companies; this figure beats 2015, 2016 and nearly 2017 total annual fundings. ProjectDiane highlights that from 2018 to 2020, the number of Black women who have raised $1 million in venture funding nearly tripled, and the number of Latinx women doubled. Their average two-year fail rate is also 13 percentage points lower than the overall average. “Millennials value a diverse workforce,” Chow added, according to Gallup and Deloitte Millennial surveys. “In the battle for talent, diverse founders may have the edge in attracting the best and brightest, and talent is what is required for going from zero to one.” The rise in popularity of alternative VC models, which are disproportionately attractive to women and underrepresented founders. We are in the very early days of this wave; according to research by Bootstrapp, 32 U.S. firms have launched an inaugural Revenue-Based Finance fund. Clearbanc notes on their site they have “invested in thousands of companies using data science to identify high-growth funding opportunities. This data-driven approach takes the bias out of decision making. Clearbanc has funded 8x more female founders than traditional VCs and has invested in 43 states in the U.S. in 2019.” More VCs are working proactively to market to underrepresented founders. “Implicit biases are robust and pervasive; it takes a proactive and intentional approach to shift the current status quo of funding,” Dreamers & Doers Founder Gesche Haas said. Holly Jacobus, an investment partner at Joyance Partners and Social Starts, noted that “we’re proud to boast a portfolio featuring ~30% female founders in core roles —  well above the industry average —  without specific targeting of any sort. However, there is still work to be done. That’s why we lean heavily on our software and CEOs to find the best tech and teams in the best segments, and we are always actively working on improving the process with new systems that remove bias from the dealflow and diligence process.” Thanks to Janet Bannister, managing partner, Real Ventures, and Erika Cramer, co-managing member, How Women Invest, for thoughtful comments. David Teten is a past Advisor to Real Ventures.

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Facebook’s internal R&D group, NPE Team, is today launching its next experimental app, called BARS. The app makes it possible for rappers to create and share their raps using professionally created beats, and is the NPE Team’s second launch in the music space following its recent public debut of music video app Collab. While Collab focuses on making music with others online, BARS is instead aimed at would-be rappers looking to create and share their own videos. In the app, users will select from any of the hundreds of professionally created beats, then write their own lyrics and record a video. BARS can also automatically suggest rhymes as you’re writing out lyrics, and offers different audio and visual filters to accompany videos as well as an autotune feature. There’s also a “Challenge mode” available, where you can freestyle with auto-suggested word cues, which has more of a game-like element to it. The experience is designed to be accommodating to people who just want to have fun with rap, similar to something like Smule’s AutoRap, perhaps, which also offers beats for users’ own recordings. Image Credits: Facebook The videos themselves can be up to 60 seconds in length and can then be saved to your Camera Roll or shared out on other social media platforms. Like NPE’s Collab, the pandemic played a role in BARS’ creation. The pandemic shut down access to live music and places where rappers could experiment, explains NPE Team member DJ Iyler, who also ghostwrites hip-hop songs under the alias “D-Lucks.” “I know access to high-priced recording studios and production equipment can be limited for aspiring rappers. On top of that, the global pandemic shut down live performances where we often create and share our work,” he says. BARS was built with a team of aspiring rappers, and today launched into a closed beta. Image Credits: Facebook Despite the focus on music, and rap in particular, the new app in a way can be seen as yet another attempt by Facebook to develop a TikTok competitor — at least in this content category. TikTok has already become a launchpad for up-and-coming musicians, including rappers; it has helped rappers test their verses, is favored by many beatmakers and is even influencing what sort of music is being made. Diss tracks have also become a hugely popular format on TikTok, mainly as a way for influencers to stir up drama and chase views. In other words, there’s already a large social community around rap on TikTok, and Facebook wants to shift some of that attention back its way. The app also resembles TikTok in terms of its user interface. It’s a two-tabbed vertical video interface — in its case, it has  “Featured” and “New” feeds instead of TikTok’s “Following” and “For You.” And BARS places the engagement buttons on the lower-right corner of the screen with the creator name on the lower-left, just like TikTok. Facebook publicly launches its collaborative music video app, Collab However, in place of hearts for favoriting videos, your taps on a video give it “Fire” — a fire emoji keeps track. You can tap “Fire” as many times as you want, too. But because there’s (annoyingly) no tap-to-pause feature, you may accidentally “fire” a video when you were looking for a way to stop its playback. To advance in BARS, you swipe vertically, but the interface is lacking an obvious “Follow” button to track your favorite creators. It’s hidden under the top-right three-dot menu. The app is seeded with content from NPE Team members, which includes other aspiring rappers, former music producers and publishers. Currently, the BARS beta is live on the iOS App Store in the U.S., and is opening its waitlist. Facebook says it will open access to BARS invites in batches, starting in the U.S. Updates and news about invites, meanwhile, will be announced on Instagram. Facebook’s recent launches from its experimental apps division include Collab and collage maker E.gg, among others. Not all apps stick around. If they fail to gain traction, Facebook shuts them down — as it did last year with the Pinterest-like video app Hobbi.

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Jeremy Levy Contributor Share on Twitter Jeremy Levy is CEO and co-founder of Indicative, a product analytics platform for product managers, marketers and data analysts. A serial entrepreneur, Jeremy co-founded Xtify, acquired by IBM in 2013, and MeetMoi, a location-based dating service sold to Match.com in 2014. More posts by this contributor Enterprises Don’t Have Big Data, They Just Have Bad Data The freemium marketing approach has become commonplace among B2C and B2B software providers alike. Considering that most see fewer than 5% of free users move to paid plans, even a slight improvement in conversion can translate to significant revenue gains. The (multi) million-dollar question is, how do they do it? The answer lies in product analytics, which offer teams the ability to ask and answer any number of questions about the customer journey on an ad-hoc basis. Combined with a commitment to testing, measurement and iteration, this puts data in the driver’s seat and helps teams make better decisions about what’s in the free tier and what’s behind the paywall. Successful enterprises make this evaluation an ongoing exercise. Often, the truth of product analytics is that actionable insights come from just a fraction of the data and it can take time to understand what’s happening. Sweat the small stuff A freemium business model is simply a set of interconnected funnels. From leads all the way through to engagement, conversion and retention, understanding each step and making even small optimizations at any stage will have down-funnel implications. Start by using product analytics to understand the nuances of what’s working and what isn’t, and then double down on the former. For example, identify specific personas that perform well and perform poorly. While your overall conversion average may be 5%, there can be segments converting at 10% or 1%. Understanding the difference can shine a light on where to focus. That’s where the right analytics can lead to significant results. But if you don’t understand what, why and how to improve, you’re left with guesswork. And that’s not a modern way of operating. There’s a misconception that volume of data equals value of data. Let’s say you want to jump-start your funnel by buying pay-per-click traffic. You see a high volume of activity, with numbers going up at the beginning of your funnel and a sales team busy with calls. However, you come to learn the increased traffic, which looked so promising at the outset, results in very few users converting to paid plans. Now, this is a story as old as PPC, but in the small percentage that do convert, there’s a lot to learn about where to focus your efforts — which product features keep users hooked and which ones go unused. Often, the truth of product analytics is that actionable insights come from just a fraction of the data and it can take time to understand what’s happening. Getting users on board the free plan is just the first step in conversion. The testing and iteration continue from there. The dropped and the languished Within the free tier, users may languish — satisfied with whatever features they can access. If your funnel is full of languishing users, you’ve at least solved the adoption problem, so why are they stuck? Without a testing and tracking approach, you’ll struggle to understand your users and how they respond, by segment, to changes.

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Lightspeed Venture Partners, the well-known Silicon Valley venture capital firm that has backed the likes of DoubleClick and Snapchat, is in the midst of hiring a second London-based investment partner as it looks to put down further ties to Europe, TechCrunch has learned. According to multiple sources, Paul Murphy, whose investments include Tier, Hopin, Klang and Bunch, is being hired away from Northzone, the European VC firm that’s probably best known for being an early backer of Spotify. The signing is still in progress but could be announced in the next few weeks. Murphy has been at the Northzone for three years and was promoted to general partner in late 2019 when the firm raised a new $500 million fund in late 2019. I’ve reached out to Murphy and Lightspeed for comment and will update this article if or when I hear back. VCs are chasing Hopin upwards of $5-6B valuation Prior to VC, Murphy co-founded Dots, the mobile games company in New York. He also built and invested in various companies at startup studio Betaworks. (Notably, Murphy helped launch Giphy in the U.S., which Lightspeed ended up backing and later sold to Facebook for $400 million). Before that, he held several roles at Microsoft in the U.S., U.K. and India. He also holds a BS in Computer Engineering from Virginia Tech and an MBA from The IE Business School in Spain, according to the Northzone website. Meanwhile, the fact that Lightspeed is formally putting more people on the ground in Europe should come as no surprise to close watchers of the ecosystem here. TechCrunch first heard rumors that the Menlo Park-based VC was recruiting a partner in London as far back as August in 2019. That saw Rytis Vitkauskas join the U.S. as its first partner in London the following September, according to LinkedIn. Should Murphy’s recruitment be confirmed it would signal a significant expansion of a Lightspeed London “office,” and confirmation that the VC is doubling down in the region. Those rumors in late last 2019 coincided with news spreading that another Silicon Valley VC heavyweight, Sequoia, was also doing the same — along with talk of other U.S. VC firms — as European tech companies continue to create more value than ever before. Sequoia’s own plans were finally announced in November, including that it had poached Luciana Lixandru away from rival Accel Partners. 7 things we just learned about Sequoia’s European expansion plans

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Lisa Wu, a partner at Norwest with investments like Calm, Plaid, Opendoor and Grove Collaborative, has a message for founders: Think like a VC during your pitch presentation. After all, accepting capital isn’t simply adding more money to your balance sheet. It is about picking a venture partner who will be there with you through the highs and lows. Some even liken it to a marriage that you can’t divorce from. No pressure, of course. Don’t worry, we won’t leave you hanging: Wu is joining us at TechCrunch Early Stage, our annual event with content specifically tailored to first-time founders and investors, to talk about exactly this. Before Norwest, Wu worked in Amazon’s corporate development team, Bessemer Venture Partners and founded BANZAI, which brought food focused on quality and nutrition to schools. With experience on both sides of the investing table, Wu is going to talk about how founders can make the most out of each minute within a one-hour pitch presentation. She’ll discuss ways that founders can read the virtual room, how to take advice and how to talk big-picture ideas to convey market size and competition. Wu joins a fantastic cast of top experts, discussing topics such as fundraising, operations and marketing. Her workshop is part of the two days of events that explore seed and Series A fundraising, recruiting and more for early-stage startups at TC Early Stage – Operations and Fundraising on April 1 & 2. Grab your ticket now before prices increase tonight! ( function() { var func = function() { var iframe = document.getElementById('wpcom-iframe-dde292b93a5f3017145419dd51bb9fce') if ( iframe ) { iframe.onload = function() { iframe.contentWindow.postMessage( { 'msg_type': 'poll_size', 'frame_id': 'wpcom-iframe-dde292b93a5f3017145419dd51bb9fce' }, "https:\/\/tcprotectedembed.com" ); } } // Autosize iframe var funcSizeResponse = function( e ) { var origin = document.createElement( 'a' ); origin.href = e.origin; // Verify message origin if ( 'tcprotectedembed.com' !== origin.host ) return; // Verify message is in a format we expect if ( 'object' !== typeof e.data || undefined === e.data.msg_type ) return; switch ( e.data.msg_type ) { case 'poll_size:response': var iframe = document.getElementById( e.data._request.frame_id ); if ( iframe && '' === iframe.width ) iframe.width = '100%'; if ( iframe && '' === iframe.height ) iframe.height = parseInt( e.data.height ); return; default: return; } } if ( 'function' === typeof window.addEventListener ) { window.addEventListener( 'message', funcSizeResponse, false ); } else if ( 'function' === typeof window.attachEvent ) { window.attachEvent( 'onmessage', funcSizeResponse ); } } if (document.readyState === 'complete') { func.apply(); /* compat for infinite scroll */ } else if ( document.addEventListener ) { document.addEventListener( 'DOMContentLoaded', func, false ); } else if ( document.attachEvent ) { document.attachEvent( 'onreadystatechange', func ); } } )();  

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We’re less than a week away from TC Sessions: Justice 2021, a deep, day-long exploration of diversity, inclusion and equity in tech. On Wednesday, March 3, leading experts, founders, social justice warriors will discuss topics ranging from systemic bias, essential workers’ rights and formerly incarcerated people to accountability in social media and funding for underrepresented communities. And that’s just for starters. Pause for a cause: Tickets to this event are just $5 — we want as many diverse voices at the table as possible. Secure your seat at this event today and join this essential conversation. In addition to panel discussions and workshops (you’ll find the agenda here), don’t miss the smaller breakout sessions where you’ll have more opportunity to ask questions and share specific challenges with our speakers, editors and each other. The smaller breakouts at every TC Sessions — regardless of their focus — lend themselves to deeper conversations as noted by Karin Maake, senior director of communications at FlashParking, who attended TC Sessions: Mobility. “I enjoyed the big marquee speakers, but it was the individual presentations where you really started to get into the meat of the conversation.” There’s no shortage of fascinating presentations but be sure to leave room in your day to dig a little deeper into these breakout sessions waiting for you at TC Sessions: Justice 2021. Black Female Unicorns in the Making: With all of the economic and racial disparities that have become so pronounced, this timely session will unpack the skills, tools and networks required along every stage of this journey. We will also share insights on what role policy, philanthropy and civic organizations might play in helping to address the systemic challenges, roadblocks and obstacles that have historically served as barriers. Brought to you by Black Female Founders. Latinx Founders Leading with Inclusion: Hear from Latinx Founders who are leading with inclusion through diverse teams and/or supporting a diverse mission. Inclusion is a part of their DNA. Featuring William Falcon (Grid.ai), Fanny Grande and Nelson Grande (Avenida), Martha Hernandez (madeBOS), Jesse Martinez (Latinx Startup Alliance) and Federico Von Son (SOMOS). Brought to you by Latinx Founders Alliance. The Impact of Out LGBTQ+ Entrepreneurs: StartOut and Socos Lab are excited to speak at TechCrunch Justice, and cover the Inclusion Impact Indexes. Its first iteration; the StartOut Pride Economic Impact Index quantifies the economic value of under-utilized LGBTQ+ entrepreneurs. The project looks at entrepreneurs’ economic impact in terms of job creation, patents, financings and exits in the U.S. Our agenda will be a brief introduction, a demo of the index and its current findings, and a Q&A discussion with the publishers of the index. Featuring Sarah Burgaud and Jessica Chin Foo (StartOut), and Dr. Vivienne Ming (Socos Labs). Brought to you by Startout. TC Include Founders Pitch Feedback Sessuib: Join us for a pitch feedback session open to all startups exhibiting at TC Sessions: Justice 2021 moderated by TechCrunch staff. Add your voice to the essential conversations taking place on March 3. Reserve your seat today and learn how to build a more diverse and just tech industry at TC Sessions: Justice 2021. ( function() { var func = function() { var iframe = document.getElementById('wpcom-iframe-97fcb02edc714d7c4ba26638f20b3954') if ( iframe ) { iframe.onload = function() { iframe.contentWindow.postMessage( { 'msg_type': 'poll_size', 'frame_id': 'wpcom-iframe-97fcb02edc714d7c4ba26638f20b3954' }, "https:\/\/tcprotectedembed.com" ); } } // Autosize iframe var funcSizeResponse = function( e ) { var origin = document.createElement( 'a' ); origin.href = e.origin; // Verify message origin if ( 'tcprotectedembed.com' !== origin.host ) return; // Verify message is in a format we expect if ( 'object' !== typeof e.data || undefined === e.data.msg_type ) return; switch ( e.data.msg_type ) { case 'poll_size:response': var iframe = document.getElementById( e.data._request.frame_id ); if ( iframe && '' === iframe.width ) iframe.width = '100%'; if ( iframe && '' === iframe.height ) iframe.height = parseInt( e.data.height ); return; default: return; } } if ( 'function' === typeof window.addEventListener ) { window.addEventListener( 'message', funcSizeResponse, false ); } else if ( 'function' === typeof window.attachEvent ) { window.attachEvent( 'onmessage', funcSizeResponse ); } } if (document.readyState === 'complete') { func.apply(); /* compat for infinite scroll */ } else if ( document.addEventListener ) { document.addEventListener( 'DOMContentLoaded', func, false ); } else if ( document.attachEvent ) { document.attachEvent( 'onreadystatechange', func ); } } )();

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Aurora, the autonomous vehicle company that recently closed its acquisition of Uber’s self-driving subsidiary, has snapped up another startup.  This time, Aurora is buying OURS Technology, the second lidar startup it has acquired in less than two years. Aurora acquired Blackmore, a Montana-based lidar startup in May 2019.  Aurora declined to disclose the acquisition price or other financial terms of the deal. OURS Technology, which was founded in 2017 by a team of University of California-Berkeley researchers and Phds, employs 12 people. The entire team is heading to Aurora, according to the company. “We are always on the lookout for how we can make progress as quickly as possible and OURS’s expertise in developing lidar chips adds to the expertise we already have and accelerates our work,” an Aurora spokesperson said. Lidar, or light detection and ranging radar, is considered by most companies developing autonomous driving systems a critical and necessary sensor to safely deploy self-driving vehicles at scale. A future where millions of self-driving vehicles coursing through cities is still years — even decades some argue — away. But that hasn’t prevented dozens of lidar companies from launching, each one aiming to cash in on that eventual demand.  The vast majority of the 70-odd companies that exist in the industry today are developing and trying to sell time-of-flight lidar sensors, which send out pulses of light outside the visible spectrum and then measures how long it takes for each of those pulses to return. As they come back, the direction of, and distance to, whatever those pulses hit are recorded as a point and eventually forms a 3D map. Some lidar companies, including Blackmore and OURS Technology, are pursuing Frequency Modulated Continuous Wave (FMCW) lidar, which emits a low-power and continuous wave, or stream, of light. FMCW lidar developers tout two primary benefits of this technology. It can measure distance with a higher dynamic range and instant velocity, meaning it can gauge the speed of the objects coming to or moving away from them. It also doesn’t struggle with interference from sun or other other sensors. But FMCW is also complex. FMCW starts as a range finder on a chip. To make it a 3D lidar, many FMCW developers use big mirrors and other components to provide the field of view, which pushes up the size of the sensors. OURS Technology claims to be a lidar-on-a-chip company, which suggests that this four-year-old company has developed a way to combine everything into a solid-state scanning mechanism. This would allow the sensor to shrink in size, solving one of FMCW’s primary issues. Aurora unveiled last summer its so-called FirstLight Lidar, a sensor based on Blackmore’s technology that was developed for its fleet of self-driving vehicles, namely long-haul trucks. Aurora is clearly interested in OURS’ speed of development, noting in its announcement that the startup been able to produce four generations of lidar in just three years and developed a solid-state scanning mechanism compatible with its technology. The company plans to use the startup’s expertise and development know-how to make its sensor scaleable. In short: Aurora hopes to use OURS’ team and their blueprint for key elements such as the solid-state scanning mechanism and development process to accelerate development. “Now, as we look to expand our fleet and commercialize our driverless trucks, FirstLight lidar must be increasingly scalable — it needs to be smaller and less expensive, but just as powerful,” the company said.  

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By now you probably know that we’re hosting two TC Early Stage events this year — one on April 1-2 and another on July 8-9 — each with its own set of topics, speakers and content — both designed to help nascent startup founders build a better, more successful business. What you may not know is that you have only a few hours left to take advantage of early-bird pricing on a single event or dual-event pass. Beat the deadline — 11:59 p.m. (PST) tonight — score the lowest possible price and save $100. TC Early Stage functions like a minibootcamp for entrepreneurs. You’ll hear from top experts, founders and investors from across the startup ecosystem. They’ll share valuable tips, advice and hard-won lessons they learned in the trenches. We’re talking issues that every startup founder needs to master or understand well enough to delegate wisely. Our slate of experts will present workshops on subjects like operations, fundraising, pitch deck pointers, term sheet tips, product-market fit, brand building, growth marketing, recruiting, taming your tech stack and a lot more. Here are just two examples to whet your entrepreneurial appetite. Marlon Nichols, founding managing partner of MaC Venture Capital, will discuss how to get noticed by investors, how to grow your business and how to survive in the crowded, competitive space of tech startups. He’ll offer insights on how to network, craft a great pitch and target the best investors for your success. You’re just beginning to build your startup — what could go wrong? Plenty according to Fuel Capital’s Leah Solivan. Currently an early-stage investor, Solivan founded TaskRabbit, a startup she led to a successful exit in 2017 (acquired by IKEA). She’ll share ways to avoid making big mistakes early in your founding journey. We reserved day two of TC Early Stage for something truly exciting — the TC Early Stage Pitch Off. We sent out a call for competitors and the response was overwhelming. Narrowing the field wasn’t easy, but we chose 10 early-stage startup founders. They’ll each get five minutes to deliver their best pitch to a panel of prominent VC judges — followed by a five-minute Q&A. Those judges will pick three founders to move to the finals for a second pitch-and-Q&A to a new set of judges. The winner receives a feature article on TechCrunch.com, a free, one-year subscription to ExtraCrunch and a free Founder Pass to TechCrunch Disrupt 2021. TC Early Stage 2021 takes place on April 1-2. Learn the best ways to build a better, more successful business from the folks who paved the way. Buy your pass before the deadline hits tonight at 11:59 p.m. (PST) and save up to $100. ( function() { var func = function() { var iframe = document.getElementById('wpcom-iframe-dde292b93a5f3017145419dd51bb9fce') if ( iframe ) { iframe.onload = function() { iframe.contentWindow.postMessage( { 'msg_type': 'poll_size', 'frame_id': 'wpcom-iframe-dde292b93a5f3017145419dd51bb9fce' }, "https:\/\/tcprotectedembed.com" ); } } // Autosize iframe var funcSizeResponse = function( e ) { var origin = document.createElement( 'a' ); origin.href = e.origin; // Verify message origin if ( 'tcprotectedembed.com' !== origin.host ) return; // Verify message is in a format we expect if ( 'object' !== typeof e.data || undefined === e.data.msg_type ) return; switch ( e.data.msg_type ) { case 'poll_size:response': var iframe = document.getElementById( e.data._request.frame_id ); if ( iframe && '' === iframe.width ) iframe.width = '100%'; if ( iframe && '' === iframe.height ) iframe.height = parseInt( e.data.height ); return; default: return; } } if ( 'function' === typeof window.addEventListener ) { window.addEventListener( 'message', funcSizeResponse, false ); } else if ( 'function' === typeof window.attachEvent ) { window.attachEvent( 'onmessage', funcSizeResponse ); } } if (document.readyState === 'complete') { func.apply(); /* compat for infinite scroll */ } else if ( document.addEventListener ) { document.addEventListener( 'DOMContentLoaded', func, false ); } else if ( document.attachEvent ) { document.attachEvent( 'onreadystatechange', func ); } } )();

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This month, African e-commerce giant Jumia released its second full-year financials for Q4 and its fiscal year 2020. The results were mixed — active customers and gross profit increased, while orders and gross merchandise volume (GMV) fell. A particular feature that has troubled the company since its inception in 2012 was also present, namely persistent adjusted EBITDA and operating losses. However, those metrics fell year over year, and the company, in a statement, said that it had demonstrated “meaningful progress on our path to profitability.” The unevenness of Jumia’s business is also reflected in how its share price performed in the past year. In March 2020, the company hit rock bottom and traded at an all-time low of $2.15 after facing fraud allegations. But it hit an all-time high of $69.89 almost a year later this February.  With the release of its financials, two things were top of TechCrunch’s mind: What made Jumia’s value swell by more than 3,000 percent in the last year, and will the e-commerce player’s unending losses end anytime soon? I spoke with Jumia co-CEO Jeremy Hodara to get his insights on these two questions and on issues that have faced the company in the past. Talking profitability with Jumia This interview has edited for length and clarity. TechCrunch: This time last year, Jumia was trading between $2 and $4. Now it’s within $40 to $50. What do you think has been the driving factor behind this? Jeremy Hodara: What I think is really important about the stock rise is two things. First, in general, the world realized that there was a big paradigm shift in e-commerce and that e-commerce was the way to go for the future. This is something you can look at for every e-commerce company in the past 12 to 18 months. The second thing that happened is that we at Jumia have been very clear about the opportunities e-commerce represents in Africa. E-commerce is a real problem of access to consumption and has a strong value proposition to those who necessarily don’t fancy brick-and-mortar stores in Africa. What we never really have proven is that you can build a profitable e-commerce business. However, I think that will change soon because what we’ve done quarter after quarter is to be disciplined to bring clarity that we’re going after a profitable business model and profitable growth. And as people understood and saw what we were doing, it also gave them more confidence about how exciting this opportunity is. In my opinion, what happened in the last 12 months was the combination of people understanding how important e-commerce is worldwide. Secondly, Jumia brought proof points that it was building a sustainable and profitable business model. Would you say Andrew Left’s reversal in October and his decision to take long positions at Jumia also affected the share price? Not really. Like I said earlier, I think it had to do with the story of e-commerce change for the future. That didn’t start in October; it started months before. Also, we being disciplined quarter after quarter to build what’s right started months before, so I can’t really comment if his decision affected our share price or if an investor’s negative or positive comments would change market sentiment towards our stock. Jumia narrows losses, as its payment service grows in financial results You’ve talked about how Jumia is trying to build a profitable business. But how’s it going to do that if the company reports losses quarter after quarter and year after year? I think we’re on the right path, considering that our EBITDA losses reduced by 47 percent last quarter, and we’ll be trying to do so every quarter. We want to go about it by improving the efficiency of the business and opening new avenues for growth. The most exciting thing about e-commerce is that first, you build large assets for your own use, but it becomes relevant for other stakeholders over time. For us, we have an application and website with very engaged visitors, and we’re exploring having third-party advertisers who place ads on the platform. Our logistics service is also another way. We’re building tools and technology to equip our logistics partners and help them become more productive. This drives our costs per delivery down and is the type of benefit that comes with scaling. So I think there’s a path to profitability by opening the assets we’ve built for ourselves to benefit our ecosystem. Jumia’s expenses dropped last year, but revenue also dropped despite a little increase in customer base. Aren’t those worrying signs? On the revenue side, here’s how we should look at it. When you’re a marketplace, your revenue is the commission that you make from a transaction. So if you’re a seller on Jumia and sell something that costs $100 and your commission is 10 percent, your revenue inside the P&L of Jumia will be $10. If I buy a product from you at $90 and sell it to my consumer for $100, I’ll record $100 as the revenue. That’s the insurance from the financial pinpoint between what you call the third-party and the first-party model. At the first-party model, you record as the revenue the value of the product. At the marketplace, you only record the commission. Jumia has, give or take, 10 percent of its business as the first-party model and 90 percent as the marketplace model. But that percentage changed over time, and when it did, you can see how the revenue went down. So we don’t base our profitability on revenue. What is the right KPI for us is the gross profit as it shows the monetization of Jumia. It has been growing quarter after quarter, this time by 12% percent. Our active consumers growing 12 percent from 6.1 million in Q4 2019 to 6.8 million in Q4 2020 shows a disciplined growth towards profitability. If there’s indeed a path to profitability, why did Jumia investors — Rocket Internet and MTN — exit the company? And does that put pressure on the company? Oh, not at all. The fact that Jumia was able to gain support from the companies was a blessing, and they’ve come a long way with us. But like any investor after six to nine years, I think it was time for them to decide to leave the company, and I’ll say the company was lucky to have had them along our side from the beginning. Well, I can’t say for them, but for myself, I don’t think one can say that their leaving after so many years is a sign of distrust in our ability to become profitable. One of the positives of your financials was JumiaPay. Does it tie into Jumia’s journey to being profitable? JumiaPay is an amazing opportunity for us. Once you have a great commerce platform, you have a fantastic opportunity to build a great payments solution for your consumers. We can see that consumers are adopting it very fast, and I think this is because the platform also gives them access to other digital services where they top up their phone, pay bills and get loans. Also, it is a great payment method for consumers who want to prepay for services. And when you prepay for products, you make logistics more efficient and have more sales. Revisiting Jumia’s JForce scandal and Citron’s short-sell claims Sales remind me of the fraud issues in 2019 when some J-Force team members engaged in improper sales practices. What is Jumia doing to avoid situations like that? It’s a lesson we’ve learnt, and we have put in the right compliance, the right internal control team to resolve such situations. I’ll say one of the reasons why we’re becoming one of the most professional organizations in Africa is because we now have these systems in place. As an African company, how is Jumia addressing concerns around diversity, especially at top positions? I think what’s really African with Jumia is who we are serving, our African sellers, our African consumers and our African team. In Nigeria, Juliet Anammah, who was the CEO of Jumia Nigeria, is now the chairperson of Jumia Group. I don’t know what constitutes an African or a non-African company, but what I can tell you is that our team is African, our consumers are African, and we’re selling on the continent every day. I think that’s what should make sense to our ecosystem.

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Jamaica’s JamCOVID app and website were taken offline late on Thursday following a third security lapse, which exposed quarantine orders on more than half a million travelers to the island. JamCOVID was set up last year to help the government process travelers arriving on the island. Quarantine orders are issued by the Jamaican Ministry of Health and instruct travelers to stay in their accommodation for two weeks to prevent the spread of COVID-19. These orders contain the traveler’s name and the address of where they are ordered to stay. But a security researcher told TechCrunch that the quarantine orders were publicly accessible from the JamCOVID website but were not protected with a password. Although the files were accessible from anyone’s web browser, the researcher asked not to be named for fear of legal repercussions from the Jamaican government. More than 500,000 quarantine orders were exposed, some dating back to March 2020. TechCrunch shared these details with the Jamaica Gleaner, which was first to report on the security lapse after the news outlet verified the data spillage with local cybersecurity experts. Amber Group, which was contracted to build and maintain the JamCOVID coronavirus dashboard and immigration service, pulled the service offline a short time after TechCrunch and the Jamaica Gleaner contacted the company on Thursday evening. JamCOVID’s website was replaced with a holding page that said the site was “under maintenance.” At the time of publication, the site had returned. Amber Group’s chief executive Dushyant Savadia did not return a request for comment. Matthew Samuda, a minister in Jamaica’s Ministry of National Security, also did not respond to a request for comment or our questions — including if the Jamaican government plans to continue its contract or relationship with Amber Group. This is the third security lapse involving JamCOVID in the past two weeks. Last week, Amber Group secured an exposed cloud storage server hosted on Amazon Web Services that was left open and public, despite containing more than 70,000 negative COVID-19 lab results and over 425,000 immigration documents authorizing travel to the island. Savadia said in response that there were “no further vulnerabilities” with the app. Days later, the company fixed a second security lapse after leaving a file containing private keys and passwords for the service on the JamCOVID server. The Jamaican government has repeatedly defended Amber Group, which says it provided the JamCOVID technology to the government “for free.” Amber Group’s Savadia has previously been quoted as saying that the company built the service in “three days.” In a statement on Thursday, Jamaica’s prime minister Andrew Holness said JamCOVID “continues to be a critical element” of the country’s immigration process and that the government was “accelerating” to migrate the JamCOVID database — though specifics were not given. An earlier version of this report misspelled the Jamaican Gleaner newspaper. We regret the error. Jamaica’s Amber Group fixes second JamCOVID security lapse

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The Atlassian platform is chock full of data about how a company operates and communicates. Atlassian launched a machine learning layer, which relies on data on the platform with the addition of Atlassian Smarts last fall. Today the company announced it was acquiring Chartio to add a new data analysis and visualization component to the Atlassian family of products. The companies did not share a purchase price. The company plans to incorporate Chartio technology across the platform, starting with Jira. Before being acquired, Chartio has generated its share of data, reporting that 280,000 users have created 10.5 million charts for 540,000 dashboards pulled from over 100,000 data sources. Atlassian sees Chartio as way to bring that data visualization component to the platform and really take advantage of the data locked inside its products. “Atlassian products are home to a treasure trove of data, and our goal is to unleash the power of this data so our customers can go beyond out-of-the-box reports and truly customize analytics to meet the needs of their organization,” Zoe Ghani, head of product experience at platform at Atlassian wrote in a blog post announcing the deal. Atlassian’s two-year cloud journey Chartio co-founder and CEO Dave Fowler wrote in a blog post on his company website that the two companies started discussing a deal late last year, which culminated in today’s announcement. As is often the case in these deals, he is arguing that his company will be better off as part of large organization like Atlassian with its vast resources than it would have been by remaining stand-alone. “While we’ve been proudly independent for years, the opportunity to team up our technology with Atlassian’s platform and massive reach was incredibly compelling. Their product-led go to market, customer focus and educational marketing have always been aspirational for us,” Fowler wrote. As for Chartio customers unfortunately, according to a notice on the company website, the product is going to be going away next year, but customers will have plenty of time to export the data to another tool. The notice includes a link to instructions on how to do this. Chartio was founded in 2010, and participated in the Y Combinator Summer 2010 cohort. It raised a modest $8.03 million along the way, according to Pitchbook data. Atlassian Smarts adds machine learning layer across the company’s platform of services

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As the e-commerce market grows, startups are racing to help online retailers sell larger items to consumers with so-called “buy-now-pay-later” options. Via BNPL, consumers turn a one-time purchase into a limited string of regular payments. Terms vary, but the space is very active. TechCrunch covered Scalapay’s January $48 million round, what the Italian BNPL described as a seed round. Also this year, we’ve seen France’s Alma raise a $59.4 million Series B for its BNPL efforts. And I recently covered Wisetack’s aggregate $19 million fundraise as it looks to make more noise about its service that focuses on real-world transactions like home improvement. But unlike some burgeoning startup niches where we lack visible results from leading players to use as a lens for vetting the market, we do have a number for the BNPL space. This morning, to better understand what’s going on with the younger companies hoping to help you finance your next mistaken purchase, let’s check out earnings results from Klarna, Afterpay and Affirm. The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday. Klarna, based in Sweden, is said to be considering a direct listing. Its 2020 results are here. Afterpay, based in Australia, went public a few years ago. Its H1 fiscal 2021 results are here. And then there’s Affirm, the recently public U.S.-based BNPL company that had a recent direct listing. Its fiscal Q2 2021 (calendar Q4) results are here. Let’s see how the three are doing, yank learnings for the mix and then check our gut about what their results might mean for BNPL startups the world ’round. BNPL results The BNPL cohort of startups is showing signs of pursuing verticalization to find veins of market demand that remain untapped by the largest players in their market. So, while Affirm wants to check you out everywhere online, providing you with repayment options wherever you travel digitally, Wisetack wants to integrate with a particular set of merchants. The latter model could provide startups pursuing similar, narrower market targets the ability to better understand their economics and perhaps generate more total margin on their loans. That’s a long way to say that even with the information at our disposal, we’re thinking directionally. But doing so is both good fun and illustrative, so let’s get into it. First, Klarna. Klarna This morning we’ll look at Klarna’s Q3 2020 report and its Q4 report from the same year. The gist is that Klarna had a super-solid 2020. In its Q3 update, Klarna wrote that it saw 43 percent growth in gross merchandise volume during the first nine months of the year. In its Q4 report, it noted a full-year number of 46 percent GMV growth. From that, we can intuit that Klarna had a great fourth quarter. Turning to the U.S. market, Klarna first reported “10 million total consumers by [the Q3] period end, and 11 million by the end of October.” And for the full year, it wrote that it had seen “15 million consumers choosing to shop with Klarna by January 2021” in the United States. Again, those look pretty great.

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3D-printed rocket company Relativity Space has just revealed what comes after Terran 1, the small launch vehicle it hopes to begin flying later this year. It’s next rocket will be Terran R, a much larger orbital rocket with around 20x the cargo capacity of Terran 1, that will also be distinguished from its smaller, disposable sibling by being fully reusable – across both first and second-stages, unlike SpaceX’s Falcon 9. I spoke to Relativity Space CEO and founder Tim Ellis about Terran R, and how long it’s been in the works for the space startup. Ellis said that in fact, the vision every since Relativity’s time at Y Combinator has included larger lift rockets – and much more. “When I founded Relativity five years ago, it always was inspired by seeing SpaceX launching and landing rockets, docking with the International Space Station, and this idea that going to Mars was critically important for humanity’s future, and really expanding the possibilities for human experience, on Earth and beyond,” Ellis told me. “But that all of the animations faded to black right when people walked out [of spaceship landing on Mars], and I believed that 3D printing had to be this inevitable technology that was going to build humanity’s industrial base on Mars, and that we needed to really inspire dozens, or even hundreds of companies to work on making this future happen.” Relativity Space’s focus on 3D printing and cloud-based software helps it weather the COVID-19 storm The long-term goal for Relativity Space, Ellis said, has always been to become an “end-product 3D printing company,” with its original Terran 1 light payload rocket simply representing the first of those products it’s bringing to market. “3D printing is our new tech stack for aerospace, and really is rewriting something that we don’t feel has fundamentally changed over the last 60 years,” he said. “It’s really bringing automation that replaces the factory fixed tooling, supply chains, hundreds of thousands of parts, manual labor and slow iteration speed, with something that I believe is needed for the future on Earth, too.” Terran R, which will have a payload capacity of over 20,000 kg (more than 44,000 lbs) to low-Earth orbit, is simply “the next logical step” for Relativity in that long-term vision of producing a wide range of products, including aerospace equipment for use right here on Earth. Ellis says that a larger launch vehicle makes sense given current strong customer demand for Terran 1, which has a max payload capacity of 1,250 kg (around 2,755 lbs) to low-Earth orbit, combined with the average size of satellites being launched today. Despite the boon in so-called ‘small’ satellites, many of the constellations being build today have individual satellites that weigh in excess of 500 kilograms (1,100 lbs), Ellis points out, which means that Terran R will be able to delivery many more at once for these growing on-orbit spacecraft networks. A test fire of the new engine that Terran R will use for higher thrust capabilities. “It’s really the same rocket architecture, it’s the same propellant, same factory, it’s the same printers, the same avionics and the same team that developed Terran 1,” Ellis said about the forthcoming rocket. That means that it’s actually relatively easy for the company to spin up its new production line, despite Terran R actually being quite functionally different than the current, smaller rocket – particularly when it comes to its full reusability. As mentioned, Terran R will have both a reusable first and second stage. SpaceX’s Falcon 9’s first stage (a liquid fuel rocket booster) is reusable, and detaches from the second stage before quickly re-orienting itself and re-entering Earth’s atmosphere for a propulsive landing just after entering space. The Falcon 9 second stage is expendable, which is the space term for essentially just junk that’s discarded and eventually de-orbits and burns up on re-entry. SpaceX had planned to try to make the Falcon 9 second stage reusable, but it would’ve required too much additional mass via heat shielding for it to make sense with the economics it was targeting. Ellis was light on details about Terran R’s specifics, but he did hint that some unique use of fairly unusual materials made possible though 3D printing, along with some sparing use of generative design, will be at work in helping the Relativity rocket’s second stage reusable in a sustainable way. “Because it’s still entirely 3D-printed, we’re actually going to use more exotic materials, and design geometries that wouldn’t be possible at all, traditionally, to manufacture,” Ellis said. “It’s just too complicated looking; it would be way too difficult to manufacture traditionally in the ways that that Terran R is designed. And that will actually make it a much more reusable rocket, and really helped build the best reusable rocket possible.” Relativity Space raises $500 million as it sets sights on the industrialization of Mars Terran R will also use a new upper stage engine that Relativity Space is designing, which is also unique compared to the existing engines used on Terran 1. It’s 3D printed as well, but uses a copper thrust chamber that will allow it to have higher overall power and thrust capabilities, according to Ellis. When I spoke to Ellis on Thursday evening, Relativity had just completed its first full success duration test of the new engine, a key step towards full production. Ellis said that the company will share more about Terran R over the course of this year, but did note that the existing large 3D printers in its production facilities are already sized correctly to start building the new rocket – “the only change is software,” he said. He also added that some of the test sites Relativity has contracted to use at NASA’s Stennis Space Center are able to support testing of a rocket at Terran R’s scale, too, so it sounds like he’s planning for rapid progress on this new launch vehicle.

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Newness, a startup co-founded by former Twitch employees, has raised $3.5 million in a Sequoia-led seed round for its live-streaming platform aimed at beauty creators and their fan communities. Though today’s creators are not without options when it comes to livestreaming — Twitch, YouTube, TikTok, Instagram and Facebook are all popular choices — Newness is focused on building differentiated tools and features that work well for the beauty streamer market in particular. This includes offering options for both public and private streams, engagement mechanisms that reward positive contributions, moderation features, and the ability for fans to earn access to free beauty products by community participation. In the new round, Jess Lee invested on behalf of Sequoia Capital. Other investors in Newness include Cowboy Ventures (Aileen Lee), Upside Partnership (Kent Goldman), Dream Machine (former TechCrunch editor Alexia Bonatsos), Index Ventures (Nina Achadjian), Twitch co-founder Kevin Lin, former Twitch execs Jonathan Shipman and John Sutton, Eventbrite founders Kevin and Julia Hartz, Incredible Health co-founder and CEO Iman Abuzeid, and other angel investors from Twitch. The idea for Newness comes from CEO Jenny Qian, an early Twitch employee who held a number of roles at the game-streaming site over the years, most recently as the Senior Director of Business Strategy for Twitch’s video platform. She’s joined by CTO Youri Park, who also previously worked at Twitch, as well as Blizzard and Facebook Gaming. Though always an avid gamer herself, Qian says she began getting into skincare after she turned 30. She then soon realized the potential in the live-streaming beauty space. “I was so used to the format from Twitch. And, in some ways, I feel like I was spoiled with live-streaming,” she explains. Being able to hang out with streamers, ask questions, and learn from them was something that made the live format so compelling, she believes. Image Credits: Newness “It made me scratch my head and think: why didn’t something like this exist for the beauty community? It’s a community that is just as passionate, if not more so…and it’s a content category that is so incredibly popular. How come there isn’t a live medium available?,” she wondered. But at the same time, Qian admits she didn’t feel comfortable going live on Twitch. “It’s one thing to be made fun of for my gameplay. But I think it’s another if I take my makeup off, and people are making fun of me for how I look. It just cuts to a whole new level,” she says. With Newness, the goal is to create a sort of anti-Twitch, in a way. It aspires to be a wholesome, positive community for beauty creators and fans, where moderation is a key focus and fans get rewarded for quality participation, not trolling. When creators go live, Newness will pair them with an in-house moderator to help them feel more comfortable and to keep the content flowing. Once they’re a more established streamer, Newness will work with the creator to locate and elevate a moderator from their own fan community to help out with future streams. Meanwhile, fans are awarded virtual items called crystals for positive participation and good behavior — for example, for watching your favorite stream and engaging in chat. In Newness, every chat message also has a little heart next to it. And the more hearts you earn over time for higher-quality comments, the more crystals you also earn. Image Credits: Newness These crystals can be redeemed for full-size beauty products, which Newness will source through brand deals. Because moderators spend more time on the platform, they’ll also earn more crystals — and that means more opportunities for products. The positive reward system has so far proven successful during beta tests, as around 66% of Newness viewers, on average, end up chatting during live streams, Qian says. Another differentiating feature for Newness is the ability for creators to host both public and private streams. The latter is not meant to be some sort of OnlyFans equivalent, but is instead focused on allowing creators to host more professional and exclusive live events. With private streams, creators can sell both general admission and even pricier VIP tickets that could come with some sort of reward — like a goodie bag of beauty supplies. In addition to events, Newness supports an in-app tipping mechanism called “gifting” on everyday streams. Eventually, the startup plans to take a share of the revenue these transactions generate, but it hasn’t yet rolled that out as it’s still beta testing. At present, the Newness community its small. And it still chooses which creators are allowed to live stream. “We handpick the creators that we let on to our platform and keep it invite-only because we want to make sure that our earliest creators are helping to set the tone and building the culture of the community,” she says. The startup wants to ensure there are enough community members to sustain itself, while also not allowing the community to become toxic as it scales. “We really care about cultivating an incredibly wholesome community. So for us, safety, moderation — all that is really important to us,” Qian notes. The creators produce a range of content, including more expert advice and product reviews to more casual “get ready with me” videos and vlogs. Newness, of course, will face steep competition from larger, existing platforms for streamers, like YouTube and Instagram, as well as from newcomers more focused on beauty videos, like Supergreat. The startup has been in beta testing since last year, and is only available on the web for the time being. With the seed funding, Newness expects to build out its iOS consumer app in 2021, to complement its dedicated streaming app for creators. (Creators can also opt to stream from their DSLRs, if they prefer.) It also aims to hire engineering talent and build out its 14-person team that’s now spread out across San Francisco, New York (thanks to some ex-Glossier hires), and L.A.            

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