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How can fintech startups outlast the VC winter?

Peter Hazlehurst

of free money is over. Venture funding declined by $90 billion (53%) in the third quarter of 2022 from a year earlier and fell $40 billion (33%) compared to the second quarter, . That makes Q3 2022 the slowest quarter for VC funding since the start of the pandemic. However, in spite of all the crazy stories this year, there are real opportunities for aspiring fintech startups to become the new heroes of the multitrillion-dollar banking and embedded finance industry. In particular, I’m hearing that investors are reluctant to fund future potential unless it comes hand in hand with concrete customer traction. So if you’re building a fintech idea and you need funding today, it’s vital to get your product into the hands of customers quickly. How will you do that? By gathering feedback, using it to sharpen your focus and prioritization and ultimately rewarding your customers for helping you. Here are three tips for achieving those goals: In this operating environment, startups have a better chance of impressing investors if they can point to tangible results. What does that look like in reality? Prepare for these common questions before you head to an investor meeting with your pitch deck: The only way to find these answers is to ship something real — a working product that people can interact with and use. That means everything you’re building right now should be in service of getting an MVP out the door. I’m not saying, “Build it and they will come.” Far too many tech companies shut down shop because they were making solutions in search of problems. It is really easy to slow yourself down by thinking too far ahead in terms of what you need to create. For instance, if you’re building a consumer fintech startup, do you really need to build your own payments processor? In my experience, that would take 10 to 20 engineers, about 18 months and millions of dollars, and they’d likely end up building something that may never see the light of day. Eighteen months is a very long time in an environment where fintechs and embedded banking startups can get to market in three months, if not faster, . Moreover, speed begets opportunity: The study expects embedded finance transactions in the U.S. to surge to $7 trillion over the next four years, up from $2.6 trillion at present.

EcoFlow teases full-house battery backup coming later this year

Haje Jan Kamps

special launch event, home backup power giant launched a flurry of new products, including a “Whole-Home Backup Power Solution.” The company also launched a battery-powered fridge and a portable battery-powered air-conditioning unit, which both makes sense. There’s also a lawn mower, which makes me think that preppers will have delightfully pristine lawns, even as the apocalypse looms. Today at , hidden among all its other news, a spokesperson for the company told TechCrunch it is also planning to release full-house battery backup power solutions to go with its more portable battery backup systems, and its RV-focused solutions. The company was tight-lipped about exactly what it was releasing, or when, but it’ll be interesting to see what the battery backup powerhouse comes up with later in the year. EcoFlow’s Whole-Home Backup Power Solution is a backup power system that aims to keep a house running without noisy, gas-guzzling generators. The kit is available in three different sizes to scale based on a user’s needs. The company has built the solution around its high-end Delta Pro portable power station. “We’re excited to be showcasing our innovative Whole-Home Backup Power Solution and our new smart devices at CES 2023. In recent years we’ve been through the pandemic, which was a life-altering event, we’ve got electricity bills that are rising and extreme weather that is creating an ever more unstable energy situation,” said EcoFlow’s head of business development, Brian Essenmacher, at the company’s press event at CES. “That’s why EcoFlow is providing power that’s easier than ever and helping users to make the most of life, whether that’s by saving users time and money to devote to the things that matter most to them, or by making life more enjoyable at home, outdoors and in mobile spaces.” The Advanced Kit connects two Delta Pro units via the company’s Double Voltage Hub, resulting in an impressive 7,200W output. That should be plenty to power pretty much any device you have in the house. Take it easy on the power consumption, and the company claims you can keep an average home running for about a week. For folks who want to keep the party going for even longer can hook up (powered by a propane tank or good old-fashioned gasoline) to further reduce grid dependence. EcoFlow Wave 2. : EcoFlow It’s not exactly a powerhouse in terms of cooling or heating, but for a portable, battery-powered unit, the upgraded EcoFlow Wave 2 is a welcome breath of fresh (or hot) air. With the add-on battery, it can run for up to 8 hours on a charge, and at 14 kg (33 lb), it’s reasonably portable as well. The heating/cooling unit packs 5,100 BTUs of cooling and 6,100 BTUs of heating — on par with an entry-level window AC unit. It’s enough to cool or heat a room or a small space such as an RV — assuming the RV itself is well insulated. EcoFlow’s battery-powered fridge with built-in ice maker is a perfect companion to an RV or beach adventure. : Haje Kamps / TechCrunch The end of days just won’t be the same if you can’t enjoy it with an ice-cold margarita, so EcoFlow has you covered on that front as well. The Glacier has a high-capacity ice maker that the company says will produce 18 ice cubes four times per hour. The fridge can run for 24 hours on a single charge and has an option for direct solar charging: Plug in a solar panel, and you’re good pretty much indefinitely. The fridge has a 297Wh battery built in and features a bunch of power-saving features to stretch the cooling powers even further. EcoFlow’s battery-powered autonomous lawn mower looks more like a cool RC car than a trusty yard trimmer. : Haje Kamps / TechCrunch So far, EcoFlow’s marketing and messaging has been focused on disaster response and power cuts, with a side of “Hey, you want to live out of an RV, we’ve got power stations for that.” The lawn mower is operable via an app and features automatic leaf collection, virtual boundary navigation and all sorts of other neat fully robotic-lawn-mower features. The company says the device has advanced route planning and virtual boundary planning, obstacle climbing and avoidance, and theft protection. The device comes with 4G built in, so it can merrily roam around your property out of Wi-Fi range. The products will be available in April this year; pricing has not yet been set.

Singapore-based Alterpacks turns food waste into food containers

Catherine Shu

and take up a significant portion of the world’s landfills. Alterpacks is tackling both issues with technology that turns food waste into takeout boxes and other containers. The Singapore-based startup has raised $1 million in pre-seed funding led by Plug and Play APAC and Seed Capital, with participation from Earth Venture Capital and angel investor Alice Foo. The new funding will be used for Alterpacks’ commercialization, including production and supply, in markets like Asia, Australia and Europe. Founded in 2019 to tackle single-use plastics, Alterpacks’ main raw material is spent grains, a by-product of manufacturing foods like beer. Spent grains are usually used for animal feed or fertilizer or are disposed of. Through its manufacturing process, Alterpacks turns spent grains into food containers that can be molded into different shapes, are freezer and microwave-friendly and are home compostable. Founder and CEO Karen Cheah told TechCrunch that she became interested in developing alternatives to disposable containers when she was traveling and saw communities struggling with the amount of plastic containers and food waste thrown away. Alterpacks uses spent grains because they are easily available. Alterpacks founders Steven Tan, Karen Cheah and Herbin Chia Alterpacks “The properties of spent grains and the volume of grains available globally were two key factors,” she said. “By upcycling the grains, we are creating new economic value and putting what would have been a by-product disposed as animal feed, or headed to landfills and compost, back into the supply chain as food containers that can be used to replace plastic disposables.” Cheah explained that the process of converting spent grains into Alterpacks’ food containers is similar to paper pulp manufacturing. Alterpacks can manufacture containers at scale with automated machines that clean raw materials, mix its formulation and then press it into different shapes of containers. Alterpacks’ containers have been available commercially since December. Its go-to-market strategy is a B2B model and includes working with distribution partners that sell supplies to F&B businesses like restaurants and hotels. Alterpacks containers have been on the market since December. The startup is also in the process of developing bio-pellets as a replacement for petroleum-based resins used in manufacturing machines. They are made out of spent grains and other agricultural waste like coconut shells. In a statement about Plug and Play APAC’s investment, managing partner Jupe Tan said, “We got to know Alterpacks while sourcing for relevant startups for the Alliance to End Plastic Waste Innovation Program and they have gained significant interest from the members of the Alliance, which is naturally a signal for us to do further due diligence for investments. We are glad that we managed to tap into our partnership with SEEDS Capital to co-lead and invest in our very first sustainability startup in APAC and we hope this will be the first of many other sustainability investments with SEEDS Capital.”

Tier Mobility and Spin lay off 100 more employees

Rebecca Bellan

Around a year ago, Tier Mobility was winning the shared micromobility game. Fueled by its fundraise in October 2021, the company went on to acquire and a , giving it access to e-bikes — a reach that extended beyond Europe and into the U.S. — and the tech needed to assuage politicians’ fears over safety. Today, Tier is in the midst of another round of layoffs. As a result of previous restructurings, Tier is laying off around 80 workers, some of whom are under the Nextbike umbrella, to make up for redundancies.  in November 2021 to expand its vehicle offerings beyond e-scooters. Tier said the layoffs announced Wednesday will affect 7% of its overall staff headcount. While some teams will be more affected than others, the restructuring affects employees across the organization. The most recent staff cuts follow Tier’s decision to back in August, blaming a poor funding environment and uncertain economic conditions. The micromobility operator is also reducing the size of its Spin workforce by about 20 employees. in March 2022, a move that gave the company widespread access to the U.S. Seven months later, and exited Seattle and Canada. The company went on to let go of an additional 30 Spin employees in December when it decided to . A Tier spokesperson told TechCrunch the company tried to rematch workers from redundant roles with any open roles at Tier and Nextbike to retain as many people as possible. How did Tier go from being the largest micromobility player in the world to now announcing layoffs every few months? Sure, the macroeconomic climate has affected most tech companies, and Tier is hardly the only micromobility operator to announce staff cuts ( .) It seems that Tier, like most other tech companies facing hard decisions, was expanding for a pace of economic growth that’s simply not being realized in pre-recession 2023. Tier CEO and co-founder Lawrence Leuschner said today’s round of layoffs is part of a pivot in the company’s overall strategy, “from all-out growth mode to a ‘profitability first’ mindset.” The restructuring will include the closure of “a small number of cities where we do not see a path to profitability” due to factors like unfavorable regulatory approaches, said the company. Tier did not say which cities it would exit, but the operator’s future in Paris currently hangs in the balance as of Tier, Lime and Dott. However, the city’s strict regulations might just make it unprofitable for Tier to be in Paris at this point. Tier is also shutting down a number of side projects, like its own vehicle design program and the Tier Energy Network, the company’s plan to place charging stations in retail stores to incentivize riders to swap scooter batteries for rewards. On the other hand, the company will be winding up its monthly scooter subscription service, MyTier. “Downsizing is challenging for any business and particularly difficult for a company like Spin, which has already made fundamental changes to the business to ensure its long-term future,” said Philip Reinckens, CEO at Spin. “We are confident that the measures to increase revenue while reducing costs via further integration with our parent company will accelerate the company’s path to profitability.”

Google spares three Area 120 R&D projects, including team working on a ‘Gen Z consumer product’

Sarah Perez

Last week, we learned Google’s in-house R&D group, Area 120, had by the broader , impacting teams working on some of Google’s more experimental ideas. However, we understand now that at least three Area 120 projects have been spared from these latest cuts and will go on to “graduate” to other parts of Google later this year. These include , an automated and less costly ; a  called ; and , a consumer app quietly acquired by Google last year. Most Area 120 projects have been developed in-house, making Liist a rare exception. The startup, which had raised  according to Crunchbase, offered a you find on the internet, including through apps like TikTok and Instagram. At Google’s Area 120, the team had been tasked with building a new consumer product. While Aloud and Checks have obvious utility, easily fitting into other parts of Google’s organization, Liist is perhaps the more intriguing of the three Area 120 survivors. Ahead of Liist’s , Google had spoken about the threat to its core search and advertising businesses posed by TikTok and Instagram. At an industry event, Google SVP Prabhakar Raghavan, who runs Google’s Knowledge & Information organization, that the search giant’s own research found that young people now often didn’t start their searches for places on Google. “In our studies, something like almost 40% of young people, when they’re looking for a place for lunch, they don’t go to Google Maps or Search,” he said. “They go to TikTok or Instagram.” When live, Liist’s bookmarking app had touted a variety of use cases that included things like saving places for travel inspiration, planning nights out with friends, creating lists of date night spots, and more. Users could vote on where they wanted to go or could plan trips together, too. The app was also among the first to integrate with , which allows users to jump from videos to experiences provided by third parties — like saving a recipe to Whisk’s app after watching a video where the recipe is demonstrated, for instance. Liist’s app was shut down when the team joined Google, but co-founder David Friedl’s states the team has been working on a “Gen Z consumer product” within Area 120. No other details were provided. According to an internal email to the Area 120 team shared with TechCrunch, Liist and the other remaining Area 120 projects will now come under the purview of Area 120 Managing Partner  as they move forward. The email was penned by veteran Googler Clay Bavor, who you may recall had taken over Area 120 as well as other AR and VR projects as part of which branded this group of projects “Google Labs.” Roman will also now lead a set of “applied AI” products under Senior Director of Product Management at Google Labs, . While the Area 120 layoffs are only a small percentage of impacting 12,000 people, or 6% of its global workforce, the R&D group had spearheaded several innovations over the years that found success and exited to other parts of Google. These included the  called GameSnacks, which integrated with Google Chrome; the technical interview platform Byteboard, ; an Airtable rival called Tables, ; an AI-powered conversational ads platform , which also exited to Cloud; video platforms   and  , which exited to Google Search and Shopping, respectively; and the web-based travel app  , which exited to Commerce, among others. There were growing concerns, however, that Google no longer saw Area 120 as a key investment. Last September, the and told impacted employees they’d need to find new roles within Google. At the time, a Google spokesperson explained the group would be shifting its focus to projects that “build on Google’s deep investment in A.I.” and ” have the potential to solve important user problems.” Bavor’s new email to Area 120 employees similarly highlights how Google’s experimentation is now more intensely focused on the impacts of AI across Google products, not the other types of projects that Area 120 became known for in prior years. As Bavor writes: It’s clear that, as a company, we continue to face macroeconomic uncertainties. At the same time, there are enormous opportunities ahead of us in applying AI to reimagining so many of Google’s core products. With this as backdrop, I’ve made the difficult decision to wind down the majority of Area 120. For nearly seven years, Area 120 has been a source of bottom-up innovation across Google, and from it we’ve learned many lessons on how best to pursue zero-to-one opportunities. But with the unprecedented opportunities ahead of us, we need to shift to a model of new product development that is opinionated and focused. … I know this change is significant and unsettling. What hasn’t changed is the size of the opportunity ahead of us, especially in applied AI. Across our domains, I believe that Labs is doing some of the most important and potentially impactful work at Google. And now more than ever, the company is looking to us to execute well. I have full confidence that we will navigate this moment as a team and deliver in 2023. The email comes in addition to Google and Alphabet’s CEO Sundar Pichai’s email about the layoffs, on Google’s “The Keyword” blog. Google declined to comment.

Harman’s driver-monitoring system can measure your heart rate

Rebecca Bellan

, a Samsung subsidiary that specializes in connected car technology and other IoT solutions, revealed at a suite of automotive features geared toward enhancing the health and safety of drivers and passengers, including an advanced driver-monitoring system (DMS) that can measure a driver’s heart and breath rate. Harman initially launched its DMS, called Ready Care, in September to measure driver eye activity and state of mind to determine cognitive distraction levels and then have the car initiate a personalized response to help mitigate dangerous driving situations. Based on the driver’s stress levels, Ready Care could also provide alternate routes, perhaps away from traffic jams, that might help alleviate stress. On Wednesday, Harman added to the Ready Care product contactless measurement of human vitals such as heart rate, breathing rate and interbeat levels to further determine a driver’s state of well-being. Now, rather than just relying on an infrared global shutter camera, Harman has added to its set of sensors an in-cabin radar. Harman says this will also allow the vehicle to detect if a child is left unattended. Through Harman’s software development kit and supporting APIs, OEMs and other third-party suppliers can integrate their own vehicle features or functions as part of the in-cabin customized interventions against driver drowsiness and distraction, said Harman. The company didn’t say which OEMs it plans to partner with, but when Harman initially launched Ready Care, at the North America auto show. Harman also revealed two new products dedicated toward enhancing the audio experience inside and outside the vehicle for safer driving. Together, the Sound and Vibration Sensor (SVS) and External Microphone can help people inside the vehicle better identify emergency vehicle sirens, listen for exterior speech commands from other drivers or traffic controllers, detect glass breakage or vehicle impact and more, according to Harman. Harman said the SVS can be invisibly integrated into a vehicle’s exterior and the external microphone can handle environmental elements like wind, sun and poor weather. The company said SVS and the external microphone are future-proofed for an autonomous world and can be integrated into a vehicle’s larger sensor suite to increase awareness of sounds not just for vehicle occupants but also for self-driving systems.

Icoma shows off a suitcase-sized electric Transformer-style motorbike

Haje Jan Kamps

’s Tatamel bike goes from a suitcase-sized square to a tiny electric motorcycle in a few seconds. Charge it for three hours, and it’ll zip you 18 miles or so. The price tag is $4,000, which puts it in the range of extremely high-end electric kick scooters (such as the ) without the portability benefits. It’ll be very curious to see whether it finds an audience and if so, who that audience might be. As an avid motorcyclist, I find myself a little confused by the device. At 110 pounds, it’s fantastically heavy, and you’re not going to lug it onto a train or throw it in the trunk of a car. It has tiny little 10-inch wheels, which is better than some of the kick-scooter alternatives, but on pothole-ridden roads, you’re not going to have a good time. The company says the bike is still under development and will be launched to the public properly later this year. The Icoma team is showing off its motorbike at CES in Las Vegas. : Haje Kamps / TechCrunch The bike has a 25 mph (40 kph) top speed and is powered by a 600W motor (max output 2,000 watts), with a 12 amp-hour, 51-volt battery pack. The bike also has USB and (optional) AC output so you can use it to power other devices — charge your phone, power your laptop, or run your margarita blender in a pinch. Overall the electric bike seems a little unsure of what it’s for or who needs one. It’s neat looking, but you’re going to look pretty silly riding around on it, and it doesn’t seem particularly competitively spec’ed or priced compared to some of the alternatives out there.

Mercedes-Benz plots ‘global’ EV charging network with 10,000 chargers by 2030

Harri Weber

Today at , a great-Big Tech conference in Vegas, Mercedes-Benz announced its answer to range anxiety and the great electric-vehicle charger shortage. Following the likes of Tesla and , the German automaker shared a plan to develop a 10,000-charger network by 2030, starting with the U.S. and Canada and later expanding into China, Europe and “other key markets.” Mercedes-Benz said the North American portion of its self-branded network will eventually grow to 400 hubs, with a total of 2,500 “high-power chargers.” Charging speeds at these stations will top out at 350 kW, and each station will have up to 30 chargers, the company’s press release said. The chargers will be open to anyone, but Benz owners will get special treatment; they’ll be able to reserve stations ahead of time. In a blow to rural areas, which are prone to charging deserts, Mercedes-Benz said it is centering the new network around “key cities and urban population centers, close to major arteries, convenient retail and service destinations, including participating Mercedes-Benz dealership sites.” Mercedes-Benz isn’t building out its network alone. The company said it’ll split the cost of the North American portion (“just over 1 billion euros”) with Mn8 Energy. The Goldman Sachs-spinoff owns of solar farms and energy storage facilities across the U.S. Mercedes-Benz also named EV charger company as a partner in the venture. The automaker previously worked with ChargePoint on another charging service, Mercedes me Charge, which more or less smushed together several existing charger networks into one for Benz customers.

Goodyear, Gatik say tire tech is key to bringing AVs to winter climates

Rebecca Bellan

Cars become an extension of the body when humans drive; we can feel the lack of grip in our car’s tires when driving over icy or wet roads. Autonomous vehicles don’t exactly have the same sensory abilities, which is one of the reasons why most AV testing and deployment happens in sunny climates. , an autonomous trucking company with offices in the U.S. and Canada, thinks tire-sensing data might be the key to bringing self-driving tech to wintery roads. The company is working with Goodyear, the iconic tire company, to prove that intelligent tires can accurately estimate tire-road friction and provide real-time information back to Gatik’s automated driving system. “The tire is the only part of the vehicle that touches the ground, and this new level of data sophistication can communicate vital information to the vehicle, enhancing safety and performance,” said Chris Helsel, Goodyear’s senior vice president of global operations and chief technology officer, in a statement. “This is another step to evolve the tire to not only deliver its core, traditional job but also be a nexus of new data and information.” The companies shared at CES 2023 that they recently deployed Goodyear’s road friction detection technology, called SightLine, in Canada. The deployment involved continuously measuring tire sensor-derived information — like wear state, load, inflation pressure and temperature — against other vehicle data and real-time road weather data. All of this information was then connected to Goodyear’s cloud-based proprietary algorithms to come up with a friction estimate. Goodyear said over the course of the trial, these friction estimates successfully detected low-grip conditions, like snowy or icy conditions. The idea down the line is for the friction estimates to be sent back to Gatik’s autonomous fleet to assist with path planning and providing recommendations for safe driving speed, vehicle acceleration limits and vehicle following distance, according to Goodyear. Of course, the potential for SightLine doesn’t end with better detection of snowy roads or even with autonomous driving. Goodyear said it expects to deploy the tech on “select original equipment vehicles” in 2023. Tire technology can also provide information on the health of the tire and collect information about road conditions like potholes. In 2021, Goodyear Ventures and Porsche Ventures strategically , an Israeli startup that said its tech could measure tire grip estimation and tire health. It’s not clear if Goodyear collaborated with Tactile Mobility to develop SightLine, and the company didn’t respond in time to TechCrunch’s queries.

BMW unveils Dee prototype, ‘the next level of human-machine interaction’

Rebecca Bellan

BMW revealed a prototype for the i Vision Dee concept car during the automaker’s keynote at on Wednesday evening. The four-door sedan came out onstage in a crisp white, but later morphed into a variety of colors and patterns to show off Dee’s E Ink technology, which will allow car owners to configure the car’s exterior with 32 different colors. Dee, while a concept car, is emblematic of BMW’s next-generation platform, Neue Klasse, which the company said will launch in 2025, starting with a dynamic sedan and a sporty activity vehicle. The reveal featured a cutesy video involving Arnold Schwarzenegger reminiscing about the relationship people had with their cars in the 1980s while the voice of Dee (which stands for Digital Emotional Experience) tried to convince the actor/politician that the cars of the future are really the ultimate companions. Throughout the keynote, Dee’s voice served to personalize and humanize the car. At one point, BMW said that Dee has a “digital soul, a personality not only with a voice but with facial expressions, too.” This point was really driven home by the following quote from “The Terminator”: “The unknown future rolls toward us. I face it for the first time with a sense of hope, because if a machine, a Terminator, can learn the value of human life, maybe we can too.” So what is BMW trying to tell us here? Well, Oliver Zipse, BMW’s CEO, went so far as to call Dee “the next level of human-machine interaction, a concept that cannot be simply dismissed as science fiction because it will inspire our Neue Klasse.” Ever since the “software-defined vehicle” began to take hold, automakers have been angling for new ways to use that software to create a more personalized experience for drivers and passengers. always provides a  smorgasbord of examples. Last year it was all about coming to vehicles and , while this year it seems to be about . But BMW is taking it up a notch by positing not just an emotional connection between human and car, but also a car that has emotions of its own. Dee’s E Ink exterior means the car can change into 32 different colors and a variety of patterns. BMW One way BMW hopes to turn that vision into reality is by combining software and hardware development for a seamless digital experience, according to Zipse. This idea manifests in , featuring four levels of interaction, which BMW calls its “mixed reality slider.” Level 1 brings all the drive and navigation data a driver would need. Level 2 helps with communication by showing text messages and calls. Level 3 brings the features of Levels 1 and 2 and augments the navigation data to your windshield, including collision warnings and possible obstacles highlighted. It also visualizes social media. Level 4 goes “way beyond reality.” What does that actually mean? We’re not fully sure, but the talking Dee said that you could bring all your friends into your car virtually. “Your friends, your family, even your pets without one single animal hair on the seat, which I absolutely love, in an endless virtual world,” she (?) said. “You can meet, play, talk, love, hate. You can even go sightseeing together, right inside your car. You wouldn’t believe what fits in your car in the future. It’s like being in your own personal drive-in cinema. But the movie is your life.” Of course, this would likely be in a world where the windows could be blacked out and the car drives autonomously. The point, though, is that BMW, like other automakers, is trying to add so much impressive, seamless tech to its vehicles that people really do start seeing their cars as their ultimate companions — friend, living room, personal assistant and fashion aid all in one. Freaky, isn’t it?

All the tech (and other flashy features) stuffed into the Ram 1500 Revolution EV truck

Kirsten Korosec

Stellantis revealed during its answer to an increasingly crowded battery-electric truck market: A broad-shouldered pickup loaded with tech, a longer cabin with third-row jump seats, cup holders in the frunk and even a movie projector. The Ram 1500 Revolution BEV concept isn’t exactly what the Stellantis brand plans to put into production by 2024. (That version will be shown later this year). Still, it provides the clearest picture yet of Ram’s plans for its next-generation of trucks and how it aims to compete with other entrants in the nascent EV truck market, including the Ford F-150 Lightning and the Chevrolet Silverado EV. It starts with a body-on-frame architecture designed for full-size EVs that integrates the battery pack as well as underbody aero panels and an active diffuser to improve the vehicle’s aerodynamic properties. Two electric-drive modules are mounted on the front and rear axles to provide all-wheel drive and a rear-axle steering system allows the driver to pivot the rear wheels up to 15 degrees. Ram didn’t reveal some important EV specs like range and battery-pack size; expect those later this quarter. The brand did say that the Ram 1500 Revolution BEV Concept can add up to 100 miles of range in about 10 minutes with 800-volt DC fast charging at up to 350 kW. That, of course, suggests that the production version will have an 800-volt electric architecture that allows for speedy fast charging. The automaker did stuff a lot of features, tech and new design language into the Ram 1500 Revolution. Here’s what stood out. Kirsten Korosec There are all sorts of interesting exterior design choices in the Ram Revolution such as a new “face” that includes more modern badging and an animated LED tuning fork headlight design. Perhaps the most notable design feature is the lack of a B pillar, which allows for a grand saloon-style door opening. The design decision makes the spacious interior look even more cavernous. The cabin is actually four inches longer than Ram’s gas-powered equivalent trucks. The saloon-style doors simply hammer that idea home. Stellantis Kirsten Korosec The sideview mirrors are smaller than those found on any other Ram truck, a design choice meant to reduce drag and increase aerodynamics. The sideview mirrors, which use a digital camera to capture the truck’s surroundings, are also made using 3D-printed parts. The truck concept is also equipped with a backup camera and a rearview mirror that communicates with biometric cameras that observe the truck’s environment. The truck is outfitted with multiple built-in projectors to visually communicate information to the user. But really, we care about this because the projectors also double as a mobile movie theater. Kirsten Korosec The Ram Revolution concept is outfitted with a full glass roof with electro-chromatic panels and integrated roof rails. From inside the cab, occupants can use the overhead console to operate ambient lighting. Like so many vehicles today, the Ram Revolution has a personal assistant. A 3D Ram avatar acts as the vehicle’s face and will respond to various voice commands from users, according to Ram. One neat feature is that the personal assistant will even follow commands from the owner while they’re outside the vehicle. A user can tell the vehicle to close the windows, play music, take a picture and “follow me” with Shadow Mode. Kirsten Korosec Yeah, Shadow Mode, a feature that allows the vehicle to automatically follow a driver who is walking ahead of the vehicle. This feature, which uses sensors and camera technology to navigate around obstacles, is being marketed to folks who might be at a job site and might want the truck to follow along and carry tools. Kirsten Korosec The lower display (pictured above) can be used as a tablet, passenger display, truck bed workstation, vehicle control or video game controller, according to Ram. The two 14.2-inch displays can also be combined to provide a larger viewing area. Kirsten Korosec What do you do with a spacious interior? Add third-row jumps seats, of course. The third-row jump seats, handy for when you want to fit six-people inside the truck cab — say what? — are folded until needed for use. The jump seats are mounted to the mid-gate with a removable lower section. The interior layout is actually flexible, allowing users to remove the center console and reconfigure seating. Kirsten Korosec Speaking of flexibility. The flexible layout includes a pass-through that travels through the center console and into the frunk. I’m officially dubbing this a frunk hole. This feature allows for objects as long as 18 feet to fit into the truck. A hole located between the driver and passenger seats allows for objects to pass through into the frunk. : Kirsten Korosec It should be noted that this hole is narrow. One could imagine metal or PVC piping fitting in here or perhaps a pair of skis. Not sure if an object will fit? The concept also comes with a mobile app that helps users measure objects to determine if they can be transported with their vehicle. Users can scan the product’s barcode or use a built-in augmented reality camera measuring tool. The mobile app will show users how the object can best be positioned in their vehicle. Internal and external cabin projectors can also be used to display guides on the target storage location, according to the company. Unfortunately, I couldn’t get a peek inside the powered front trunk, or frunk. But I was told that if you look under hood, which has one-touch open-and-close functionality, there are cup holders. (It’s a tailgating thing.) Other powered features on the vehicle includes a powered charge-port door that is located on the driver’s side front quarter panel, a powered tail gate, flush-mounted door handles, powered side steps and a powered rear step.

Stellantis to mass produce Archer’s electric aircraft in expanded deal

Kirsten Korosec

Global automaker Stellantis will mass produce an electric vehicle take-off and landing aircraft for Archer Aviation as part of an expanded partnership that includes giving the startup-turned-publicly traded company access to up to $150 million in additional capital over the next two years. The agreement, announced Wednesday during CES 2023 in Las Vegas, will make Stellantis the exclusive contract manufacturer for Archer’s Midnight eVTOL aircraft. Stellantis kicked off its partnership with in 2020, offering it access to its global supply chain and other expertise. In February 2021, Stellantis expanded its relationship with the aviation startup through a collaboration agreement. That same month Archer announced plans to go public via a merger with special purpose acquisition company Atlas Crest Investment Corp, The announcement Wednesday goes far beyond a collaboration. Stellantis is not only providing capital and its manufacturing expertise to Archer; the automaker said it will also help build out Archer’s recently announced manufacturing facility in Covington, Georgia. The companies plan to start producing the Midnight aircraft at the factory in 2024. The , which has a 100-mile range, is designed for urban environments where the average trip will be around 20 miles. In December, the proposed Airworthiness Criteria for the Midnight aircraft was been published in the Federal Register by the FAA, a step toward commercializing urban air mobility. Archer has said it is working to certify Midnight with the FAA in late 2024 and will then use it as part of its , which it plans to launch in 2025. Stellantis said it also plans to increase its strategic shareholding in Archer through future purchases of stock in the open market.

The Volkswagen all-electric ID 7 sedan’s most interesting feature isn’t its light-up paint

Kirsten Korosec

The all-electric Volkswagen ID 7 sedan — the next EV in the German automaker’s lineup — was unveiled Tuesday at CES 2023 in Las Vegas. And the most exciting part of the debut wasn’t the vehicle’s multilayered explosion of yellow, orange, red and blue camouflaged electroluminescent paint that lights up on command (although it is eye-catching for the near-production version of the vehicle). Instead, it was a few features and changes from its previous ID models that showed VW is trying to up its software and human-machine interface design game with an approach that is closer to what consumers might find in Tesla models, the Porsche Taycan and the Rivian R1S and Rivian R1T. Kirsten Korosec The ID 7 sedan, previously shown as a concept vehicle in China under the name ID Aero, is one of 10 new electric models that will go into production by 2026, according to Volkswagen Passenger Cars CEO Thomas Schäfer. The EV will launch in China, Europe and North America. Like its other ID siblings, the ID 7 is based on the MEB platform, a flexible modular system — really a matrix of common parts — that VW Group brands, including Audi, Seat, Skoda and Volkswagen, use to improve the efficiency and cost-effectiveness of producing EVs. The Volkswagen ID.3, an electric hatchback that is only sold in Europe and the  and  , along with various variants of the Audi Q4 e-tron are built on the MEB platform. By 2025, the automaker expects more than 80% will be electric. The ID 7 does have a few standout changes and features worth noting, starting with a new interface on the car’s infotainment system. The central display is larger at 15 inches. But more importantly, the way users will access and interact with the functions located on the screen has changed. The climate functions are now prominently and permanently displayed on the bottom of the central infotainment screen. Along the top and upper left is where the driver can quickly access information on the vehicle and advanced driver assistance features. Volkswagen In what promises to be controversial in some automotive circles, VW has adopted a new air-conditioning system that uses digitally controlled air vents similar to what Tesla vehicles are equipped with. That means no more physical air vents that a driver or passenger can move to change the direction of air flow. Instead, users can access voice controls or the central touchscreen to change the direction of the air flow. The air-conditioning system is also designed to be more intuitive. If a driver approaches the vehicle with their key, the system should turn on and begin cooling the interior on hot days or heat it when the temperature is colder. Volkswagen is also trying to step up its natural language processing game. The company said users will be able to give specific verbals cues, like “Hello, Volkswagen, my hands are cold!” and the system will respond by starting the steering wheel heating function and directing warm air to the driver’s hands. Other additions and changes featured in the ID 7 include an augmented reality heads-up display and illuminated touch sliders on the bottom of the touchscreen. Volkswagen The exterior design does fit within the current EV portfolio at VW. The sedan has an aerodynamic front section and roof that has a coupe-like slope to the rear. The design, which can be difficult to discern amid the illuminated multicolored camouflage, is designed to both help to reduce energy consumption and increase the range, according to the company. Air intakes are located in the front end, to guide the air through them and down the sides of the vehicle to the rear, forming an air curtain, which calms the air flow at the sides of the vehicle. The end result is an estimated range (under the European ELTP cycle) of around 700 kilometers, or about 434 miles of range.

BMW reimagines the head-up display

Frederic Lardinois

At CES today, BMW unveiled its new i Vision Dee concept car, an E Ink-clad four-door sedan that can shift colors on demand. Why “Dee?” you surely ask. It stands for Digital Emotional Experience. We’ll leave it at that, but what matters here is that it’s BMW’s platform for showing off its new head-up display, which is all about giving drivers a choice of how much augmented reality they want to see as they drive. Using a five-step selection, drivers can choose if they only want to see driving-related information or if they want to add data from their communications systems, an augmented reality project or a completely virtual experience with blacked-out windows (while driving autonomously). BMW Obviously, this is a concept and I don’t think we’ll see people and play VR racing games in their car while their autonomous chauffeur handles the mundane task of driving them to their next meeting. But BMW also says that some of this technology will make it into production in its “Neue Klasse” — its next-generation platform — launching in 2025. This will include a head-up display that will use the entire width of the windshield. Continental recently showed off its , which also spans the entire windshield (though only as a small strip at the bottom of the window), while automotive technology company Harman also today announced its new head-up display hardware, which isn’t quite as futuristic, but also focuses on larger fields of view and includes integrations with driver-assistance systems and real-time 3D object detection. BMW And while BMW previously talked about using E Ink as the outer skin of its vehicles, the i Vision Dee now brings this to life with an exterior that’s covered by 240 E Ink segments that can display 32 colors. The car maker actually worked with E Ink to develop the technology that allows it to adapt these display films for curved surfaces. There’s no word yet on when this technology will come to a production model. Earlier this week, VW showed off its , so it’s probably only a matter of time before we see cars with these chameleon-like capabilities on the street. “A BMW lives by its unparalleled digital performance. BMW i Vision Dee is about perfect integration of virtual and physical experiences,” said Frank Weber, member of the Board of Management of BMW AG responsible for development. “Whoever excels at integrating the customer’s everyday digital worlds into the vehicle at all levels will succeed in mastering the future of car-building.”

Google launches HD maps for vehicles, Volvo and Polestar first to integrate

Matt Burns

Google is announcing today an HD version of its vehicle mapping solution. Unlike Google Maps, Google’s HD map is not a consuming-facing application but an additional layer of data that’s served to the vehicle’s L2+ or L3 assisted-driving systems through Google Automotive Services. The additional information sits on top of Google Maps’ data and delivers details such as precise lane makers and localization of objects (road signs) to help assisted-driving vehicles orient themselves on the road. The driver will not be able to see or access the HD map or data directly. It’s not clear at this time if the driver will even know if the vehicle is using the HD mapping, though, presumably the vehicle’s assisted-driving skills will be improved when it’s in use. According to a Google spokesperson, the HD mapping is initially focused on high-traffic roads like freeways, but the spokesperson stopped short of saying exactly which cities or freeways. They said Google is working with automakers to determine where the HD map is most helpful. Google’s HD map is now available to automakers using Google Automotive Services. Volvo and Polestar announced that the HD map will soon be available in the Volvo EX90 and the Polestar 3.

New Android Auto features give car display a user-design makeover

Rebecca Bellan

Google is rolling out new Android Auto features Thursday that make it easier for drivers to navigate, play podcasts and music, and communicate while on the go. The new user experience design update, which was first previewed in May , features a split-screen layout that displays directions, music and texts — the essentials — at the same time. Now drivers won’t have to leave map view and navigate through menus and settings to quickly pause a song or see a message. Google said the split-screen layout is compatible with all cars so it can reconfigure itself based on whether the car’s screen is portrait, widescreen or any other size. The company didn’t respond to TechCrunch’s question on whether the new Android Auto features would roll out via over-the-air software updates to all Android-enabled vehicles today. At on Thursday, Google provided further details of how the display will look to drivers. Maps is now positioned on the screen closer to the driver’s seat, and there’s a “quick launcher” that lets drivers quickly access recently used apps. The new media card includes Material You, Google’s new unified design language, to feature a driver’s favorite album art. Android Auto is also getting a Google Assistant update, which will now provide smart suggestions including missed call reminders, quick arrival time sharing and instant access to media. Google is introducing a progress bar for music or podcasts so drivers can skip ahead in a song or episode (yay for skipping ads!), which the company says was one of its most requested features. There will also be on-screen shortcuts for replying to messages and calling favorite contacts, and the newest Pixel and Samsung phones will be able to make calls using WhatsApp with Android Auto soon. In addition to user design and experience updates, Google is also making it easier to . Currently, users can share digital keys across Pixel , but soon that will expand to Samsung phones and Xiaomi users. This is already supported on BMW vehicles, but the digital car key will expand to more brands in the future, says Google. Honda, Chevrolet, Polestar, Volvo and a number of other OEMs have Google built into their cars, which means Google Assistant, Google Maps and more apps from Google Play can be found directly on the car screen without relying on a phone. At , Google hinted that other car brands like Ford and Lincoln will also be built with Google later in 2023 and shared a number of updates to this integrated service, including:

Holoride launches new device to bring VR entertainment to any vehicle

Kirsten Korosec

Holoride, the Audi-backed startup, is ready to take its in-vehicle virtual reality entertainment system into the mainstream. The company unveiled Wednesday at CES 2023 in Las Vegas a device about the size of a smart speaker that can be retrofitted into any vehicle to make it VR ready. The product marks a turning point for a company that has been reliant on partnerships with automakers for its growth. Today, Holoride’s in-car VR technology is only available in certain . This new product would greatly expand its market reach — if consumers opt to plop down $799 for the package. The retrofit pack weighs less than a half a pound and mounts via a suction cup on a vehicle’s windshield. The hardware is equipped with a lithium-ion battery that lasts for 14 hours on one charge and an included USB-C to USB-A cord that plugs into the vehicle. Up to two headsets can be connected to the Holoride retrofit simultaneously, allowing two passengers to enjoy Holoride at the same time in the car. Holoride The pack “The release of our Holoride retrofit kicks off a new chapter in Holoride’s journey. Our vision of delivering a manufacturer-agnostic entry point into the ‘Motorverse’ has finally arrived,” Holoride CEO and co-founder Nils Wollny said in a statement. “Now, any vehicle can serve as your gateway into Holoride’s adaptive virtual experiences where each new ride becomes the blueprint for your next immersive adventure.” Holoride retrofit works similar to its existing technology. The product connects to a VR headset via Bluetooth. Holoride’s software taps into a vehicle’s movement and location data. The virtual reality content syncs with a vehicle’s movements in real time to prevent motion sickness. The company also announced an update its VR catalog, which includes educational apps like Einstein Brain Trainer and titles such as Cloudbreakers: Leaving Haven,from Schell Games and the Russo Brothers-founded creative firm Superconductor. Holoride announced that subscribers will now have access to a new game, Pixel Ripped 1995: On the Road (PEGI7), from the studio ARVORE. The full lineup also includes a custom web browser and an Android mirroring feature for smartphone screens.

What Luminar’s acquisition of startup Civil Maps means for its lidar future

Kirsten Korosec

As lidar company Luminar pushed ahead to meet its goals for 2022 — milestones that included locking in new commercial contracts with unnamed automakers and shipping production-ready sensors to SAIC — it also snapped up a small HD mapping startup called . The acquisition, which was disclosed Wednesday during Luminar founder and CEO Austin Russell’s presentation at , is more than just a large publicly traded company taking advantage of a consolidating industry. Although the timing couldn’t have been better due to the current economic environment, according to Russell. For Russell, the acquisition is part of to be more than just a lidar supplier. Mapping, specifically the mapping tech that Civil Maps created, is foundational to that goal, Russell said. Why maps? Russell believes that the company’s lidar sensor coupled with its perception software and HD maps will be essential for improving safety and capability of advanced driver assistance systems and automated driving features in vehicles.   Integrating Civil Maps’ tech into Luminar’s lidar sensor, which also includes perception software, could be hugely valuable if deployed at scale, Russell contends. Luminar has announced a number of commercial wins in the past year. Its lidar sensor is going into production models made by SAIC and Volvo. It has also landed contracts with Nissan, Mercedes and Polestar. Based on its internal estimates, the company expects that by the second half of the decade (so after 2025) there will be more than 1 million Luminar-equipped vehicles out on the road. “This is something, that for the first time, we’re going to get a truly comprehensive view of everything going on, an up-to-date map from around the world with vehicles contributing towards this holistic map,” Russell said onstage. The acquisition, along with Luminar’s other 2022 purchase of , is part of Luminar’s strategy to continue to “move up the stack,” according to Russell. In other words, Luminar wants to provide all — or at least a lot — of what automakers need to sell vehicles equipped with next-generation automated driving features. And based on today’s economics, Russell expects more acquisitions in 2023. “In some cases, we’re talking about deals that are at 1/10 or the 1/20 of the price that people were hoping for in the prior year,” he said. Still, Russell cautioned that Luminar isn’t going to buy just any lidar or related tech company. “It’s all about relative value, right?” he added.  “Obviously, we have to be very smart about this in this kind of market and be very conservative about what we do. So that’s why I really have that strict adherence to the 10x rule. If we think we’re only going to get a 2x value added something, we don’t do it.”

Foxconn-built EVs will feature Nvidia’s self-driving toolkit

Rebecca Bellan

Taiwanese manufacturer Foxconn and Nvidia announced Tuesday, ahead of , a partnership to develop automated and autonomous vehicle platforms. Under the two-part partnership, Foxconn will become a primary supplier of electronic control units for automakers. Those ECUs, which are an essential component for all modern vehicles, will be built with system-on-a-chip (SoC), a supercomputing AI platform that supports autonomous driving functions. As part of the partnership, Foxconn said the vehicles it manufactures will be built with Drive Orin ECUs and Nvidia’s suite of sensors like cameras, radar, lidar and ultrasonics (called Drive Hyperion) that are needed for highly automated driving capabilities. Foxconn didn’t respond in time to clarify which future vehicles would feature Nvidia’s tech; the company has not yet built its own vehicles and is in the process of manufacturing and . The electronics manufacturer most well-known for making Apple’s iPhones recently — a pickup and a crossover hatchback. Details about the vehicles when first unveiled were scant, but Foxconn’s partnership with Nvidia signals that the cars, if built, will include autonomous driving capabilities. “The Model V pick-up ultimately might use Nvidia technology, but currently it is a concept prototype EV,” a Foxconn spokesperson told TechCrunch. More likely and more immediately, we’ll see vehicles that Foxconn is building for others feature Drive Hyperion and Nvidia’s ECUs. Nvidia said the partnership will allow it to leverage Foxconn’s manufacturing capabilities to scale Drive Orin. At the same time, Foxconn’s use of the Drive Hyperion architecture and the Drive Orin SoC will allow the new automaker to speed up its time-to-market and cut production costs. That’ll be a necessity for any company, including Foxconn, that is . While the company has plenty of experience manufacturing consumer electronics, one need to only consider the spate of struggling EV startups that have popped up in the past few years. And in 2023 and beyond, automakers aren’t just building cars — they’re building supercomputers on wheels. Best to outsource where they can. Last year at CES, said they rely on Nvidia’s self-driving toolkit for their cars’ current and future advanced driver assistance systems.

Finding Vegas VR nirvana in the backseat of a ’67 DeVille at CES 2023

Tim Stevens

Being driven around the gridlocked-streets of Las Vegas during CES can be nauseating — at the best of times. But doing so with a virtual reality headset blocking your view? Certainly, it’s a recipe for disaster. I don’t have the strongest of stomachs; I pack Dramamine wherever I go. So it was with more than a little trepidation that during  I agreed to experience morning traffic on The Strip in the back of a car while wearing a VR headset. This wasn’t just any car, though, and it wasn’t just any VR system. The car was a 1967 Cadillac DeVille, remarkable in so many ways but, in this context, notable for its abject lack of technology. (Worryingly, it also lacked seatbelts, thankfully not needed on this day.) The headset was an , paired with a , a $199 add-on that allows you to get in-car VR experiences in literally any car. Tim Stevens Holoride’s initial launch was in partnership with Audi, which started into its cars last year. Holoride CEO Nils Wollny told me, while they have more OEM partnerships coming (“we can’t announce this yet”) this retrofit kit makes for an instant, massive expansion for the product’s market reach. Wollny calls it “an easy way for people that want to go on a Holoride to equip their car that they have, so they don’t need to have the latest Audi.” All you do need is a place to mount the Holoride device, a puck-shaped thing that contains an accelerometer, a high-quality GPS and a wireless module to connect to the HTC Vive Flow. Stick it on the windshield, turn it on and you’re good to go. Data from that module drives the various app experiences provided by Holoride — experiences that all include some sort of visual cues to prevent motion sickness. Tim Stevens I sampled what the retrofit pack had to offer while sitting in the generous back seat of the Cadillac, a broad stretch of vinyl that’s probably seen some experiences of a very different sort. I started with Pixel Ripped 1995: On the Road. This is a Holoride-specific spin-off of the indie VR darling. Here, you’re playing a 2-D platformer on a virtual handheld gaming system (a “Gear Kid Color”), sitting in the virtual back seat of a virtual car while your virtual parents exchange idle banter up front. As you really drive through traffic, the game simulates a world around you: an endless, idyllic neighborhood. It looks nothing like the hulking excess of Sin City. It does match the general street layout so that when the real car stops at an intersection the virtual car does the same. The game is basic but fun — miles better than looking out at the gridlock. In Cloudbreakers: Leaving Haven, a rogue-like shooter that’s exclusive to Holoride, you pilot a giant robot through digital clouds, blasting wave after wave of geometric opponents. Around and beneath you, vertical and horizontal sweeping lines give a visual representation for streets. As the car makes a turn, the action in the game swings left or right to match. The good news is that, while playing those experiences and more, I never felt even a little nauseous. In fact, I got more car sick after 10 minutes in the back of a cab on the way to my next appointment than I did in the 30 minutes I spent in that Cadillac wearing a VR headset. The bad news is that none of the titles right now seem compelling enough to justify the $19.99 monthly or $180 per year to get access to Holoride’s service. Wollny says that they’re working with developers to add more titles to its library with an expected rate of new content every two weeks. More of these simple experiences may not be the answer. To my eye, the killer app here is media consumption. Exit the games and you can mirror your smartphone into VR, jumping into any streaming app that you like. The Holoride software again renders a virtual landscape, like a giant theater screen floating across a moving background, meaning you can enjoy your content free from both distractions and motion sickness. The next step? Wollny says they’re working to get the smartphone out of that equation: “We’re currently planning to have a native movie app or streaming app where you can also download the latest movies or TV shows and then just relax, sit back [and watch] on a virtual 180 inch screen.” The retrofit kit is a great way to bring this tech to more people and for Holoride to access far more customers. However, Wollny told me that adding OEM partnerships is still very much the focus with Holoride working to make integration as seamless as possible. With more cars packing accelerometers and high-quality GPS, adding support often just requires some software. “We lowered the barrier as much as we could for car manufacturers to integrate our solution, because for them it’s an attractive solution for their passengers,” Wollny told TechCrunch. “And, it’s an additional revenue stream for mobility data they have. They provide us with the data; we do a rev-share with them.” More recurring revenue plus happier back-seat stomachs sounds like a proper win-win.

Mercedes to use Nvidia’s digital twin tech to modernize its factories

Rebecca Bellan

Mercedes-Benz is joining the metaverse. Or at least its assembly facilities are. The automaker is one of Nvidia’s latest customers to use Enterprise, a software platform used to build and operate metaverse applications. Nvidia said Tuesday ahead of the official kickoff of that Mercedes will use Omniverse to design, plan and optimize its factories. Specifically, Mercedes is preparing to manufacture its new electric vehicle platform at its plant in Rastatt, Germany. Using Omniverse, the automaker is able to build a digital twin of the factory and simulate new production processes without disrupting existing vehicle production. Nvidia says having a virtual workflow will let Mercedes quickly react to supply chain disruptions and reconfigure the assembly line as needed. Danny Shapiro, Nvidia’s VP of automotive, told TechCrunch that Mercedes has already been working with Nvidia to test out autonomous vehicle technology in simulation. “Now what they’re talking about is using our Omniverse technology, bringing that down to the production level, and creating a digital twin of the entire factory,” said Shapiro. “So modeling all the vehicles going through the assembly, all the robots, all the factory workers, and being able to design and plan the production and the assembly plant before it is actually live. And so this is helping them streamline, moving over from an existing A class production into a new generation vehicle.” A complete factory simulation could help automakers assess potential bottlenecks, create more ergonomic working conditions or determine where a robot might fail to complete a task before the facility actually starts production. Shapiro said Mercedes plans to scale this strategy to its factories globally in the future. Mercedes likely won’t be the only automaker doing so. As we , automakers in the coming years will rely on digital twins for everything from designing vehicle interiors to making factories more efficient to crash-testing cars. Shapiro noted that automakers can use , Nvidia’s simulation platform, to collaborate on vehicle design in virtual reality. In the future, he expects automakers to use simulation to create retail experiences and offer virtual walkthroughs of cars from a customer’s home. “We think about this whole life cycle of a digital twin, from design to engineering to manufacturing to retail,” said Shapiro, nodding toward a potential announcement in the automotive retail realm in the coming months.

This is Chrysler’s vision for your future car cabin

Kirsten Korosec

One year ago at CES in Las Vegas, Stellantis showed the world what a Chrysler EV might look like — a transformation that will occur by 2028 when it becomes an . Now we’re getting a peek at the company’s vision for future car cabins. The upshot? Chrysler, the 97-year-old brand under global automaker Stellantis, wants its in-car technology to make “real life” easier. The brand is showcasing its vision at CES 2023 through Chrysler Synthesis, a two-seater demonstration of in-car tech and how drivers and passengers might use it. As part of the demonstration, the company created a typical day in this future car life that includes a virtual personal assistant that uses biometric recognition, automated driving that allows the driver to conduct video calls and entertainment and wellness experiences like meditation, games and karaoke. There’s even a feature that allows customers to create and synthesize their own music. While this may be a design exercise aimed at exciting consumers and shareholders, the core technology is a real part of Stellantis’s strategy. Stellantis has said it will invest more than into software and electrification. The end goal is to have 34 million connected cars on the road by 2030 that Stellantis can generate revenue from for years after they’re sold to consumers. To hit that lofty goal, Stellantis is developing three components that will be integrated into future products, starting with the underlying electrical and software architecture called STLA Brain. This underlying system is integrated with the cloud that connects electronic control units within the vehicle with the vehicle’s central high-performing computer via a high-speed data bus. It will allow the company to upgrade software to vehicles “over the air,” or wirelessly. On top of this “brain,” Stellantis will add its “SmartCockpit,” a platform built in partnership with Foxconn that will deliver applications to the driver such as navigation, voice assistance, e-commerce marketplace and payment services. A third automated driving platform called “AutoDrive,” developed with BMW, will complete the automaker’s software plan. All three of these platforms will be in new Stellantis vehicles by 2024. Visitors to CES 2023 get to see the “brain,” “SmartCockpit” and “autodrive” in action through the Chrysler Synthesis concept, which includes a 37.2-inch sculpted black glass infotainment screen for both front-row occupants. The two-seater cockpit, inspired by the Chrysler Airflow Concept unveiled last year that represents the , is outfitted with sustainable materials. No chrome allowed. Stellantis The suspended vegan seats are wrapped with an arctic upcycled chrome-free soft trim, the instrument panel is constructed from 100% post-industrial plastics and ocean plastics, and the flooring is “responsibly sourced” walnut. LED lighting completes the look. However, the real goods showcased in the Chrysler Synthesis is the software. The software in the Chrysler Synthesis — and theoretically, future Chrysler vehicles — includes a virtual personal assistant, the ability to learn the owner’s behaviors and preferences and frequent wireless software updates to provide new and fresh content. The assistant is designed to make everyday life easier like installing updates and synching to calendars for schedule and route planning, allowing multitasking while driving autonomously, recommending parking and charging options, assisting with e-commerce services, connecting to devices and smart homes. (It should be noted that Tesla vehicles, new Mercedes models with the MBUX infotainment system and other vehicle models have some of these “smart” features.) Chrysler also envisions a more automated driving future. The Chrysler Synthesis demonstrates so-called Level 3 automated driving that allows the driver to keep their hands off the steering wheel and eyes off the road.

Stellantis launches new business unit to turn your vehicle data into cash

Kirsten Korosec

Stellantis is launching a new business unit dedicated to turning all that vehicle data into marketable products — and revenue. The business unit called Mobilisights, which was announced Thursday at in Las Vegas, is a key piece of the global automaker’s bid to generate 20 billion euro in annual revenue from software-related services by the end of the decade. The intent is to grow the company’s data-as-a-service business by developing and licensing products, applications and services. Those Mobilisights products will be sold to private enterprises, public-sector utilities, and education and research institutions, according to . The idea is to take data generated by its millions of connected vehicles (including information generated from sensors on its cars, trucks and SUVs) and turn it into applications and services that customers might want. For instance, the data could be used to provide personalized usage-based insurance, detect road hazards and provide information on traffic. Other automakers have launched similar efforts in recent years. For instance, in 2020, General Motors started an leveraging the vast amounts of data captured through its OnStar connected car service. The new Mobilisights unit is the latest move by the company to make revenue beyond selling, repairing and financing vehicles. In December 2021, Stellantis laid out the basic framework of a plan to generate billions in annual revenue from software in its vehicles, a vast portfolio that includes 14 brands such as Alfa Romeo, Chrysler, Citroën, Fiat, Jeep, Lancia, Maserati, Peugeot and Ram. Stellantis has said it will invest more than $33.7 billion through 2025 into software and electrification. That investment will include employing 4,500 software engineers by 2024. The end goal is to have 34 million connected cars on the road by 2030 that Stellantis can generate revenue from for years after they’re sold to consumers. To reach its target, Stellantis is leaning on partnerships with BMW, Foxconn and Waymo. Today, the company has more than 12 million “monetizable” connected cars globally. Stellantis defines “monetizable” as the vehicle’s first five years of life. Mobilisights has exclusive access and rights to license vehicle and related data from all Stellantis brands to external customers, according to the automaker. Stellantis contends that controlling this volume and density of data will make it less reliant on other data suppliers. Of course, collecting all of that data and turning it into products raises privacy questions. The company says it — and its partners — will operate “within a very strict data governance and privacy policy” that includes using anonymized and aggregated data, and only sharing personal data of customers with their consent and only for the specific services of their choosing. The company added that customers are able to opt out of information being collected even if they had previously given consent. “The foundation of this whole business is trust,” said Mobilisights CEO Sanjiv Ghate. “Trust in our custodianship of data and trust that we are here to create a better world.”

Stellantis’ Free2move expands car-sharing and subscriptions in U.S.

Rebecca Bellan

Free2move, the mobility service brand under automaker Stellantis, plans to expand its car sharing, rental and in 2023, with the ultimate goal of adding 200 new mobility markets globally by 2030, the company said . Early this year, Free2move will launch all three services in Dallas and Pasadena. Currently, the company offers free-floating car-sharing and subscription services in Washington, D.C., Denver, Portland and Columbus, and car subscriptions alone in Austin, Las Angeles and San Diego. In each existing market, Free2move plans to add complementary services in 2023. Free2move has had an established presence in Europe since 2019, which was recently bolstered by its acquisition of Share Now, a free-floating car-sharing service. The company says it has more than 450,000 rental cars available throughout Europe and that its ability to grow so much in such a short timeframe proves the demand for new vehicle access options is high. Free-floating car-sharing hasn’t really taken off in the U.S. in a big way, but Brigitte Courtehoux, Stellantis EVP and CEO of Free2move, told TechCrunch that the opportunities here are even greater than in Europe. “In the U.S., we see more customers using the cars for commuting, not just quick 30 or 40 minute journeys,” said Courtehoux. Free2move said it will expand its presence to five U.S. cities by the end of 2023 and will add an additional 3,000 cars to its service, many of which will be Fiat 500e vehicles. Some of the cities the company is targeting include Denver, Portland, Columbus, Washington D.C., Los Angeles, Detroit, Dallas, Miami, Chicago and Tampa. The company is also launching its dealership program, which has been running in Europe, to the U.S. This involves Free2move leasing its tech to car dealers so they can use their own fleets for rental, car-sharing or subscription services under the Free2move umbrella. In the U.S. this year, Free2move hopes to add 38 new Free2move “mobility operators” to its network.

From cloud computing to proptech: DigitalOcean co-founders raise $29M for Welcome Homes

Mary Ann Azevedo

When Alec Hartman first decided he wanted a house after his first child was born several years ago, he was surprised by the lack of options. “I didn’t like anything I saw, and I wanted a new house and I couldn’t get one,” he recalls. “And like every crazy tech person, you have to ask questions like, ‘Why can’t I go online and get a house? Why is this so difficult?’” The questions, he said, were “just rabbit holes.” Hartman ended up building his own house and essentially serving as the general contractor. That experience, and the questions leading up to it, got Hartman to start thinking about how to solve the problem for others like him. So in May 2020, he teamed up with fellow DigitalOcean co-founders Mitch Wainer and Ben Uretsky to startup , a New York City–based company that offers people a way to design and build new homes online. The trio had left DigitalOcean, a cloud infrastructure services provider, before the company went public in 2021 and concluded that homebuilding was not that dissimilar from their previous venture. “Our main thing was educating and being that big value of simplicity for our customers, and while this is a completely different product and industry, we think there is a lot of crossover in the way we thought about owning the market position of simplicity,” Hartman told TechCrunch in an interview. Interestingly, when Welcome Homes started out, it was focused on giving people the ability to build custom homes. But the team, according to Hartman, soon realized that many potential customers actually wanted the opposite — fewer choices. “Thankfully, we were able to notice that quickly and revamped the product” to offer a variety of models, or move-in ready homes, going live in March of 2021, he said. The startup “6xed” home sales in 2022, he added. Today, Welcome Homes is available in New York, New Jersey, Connecticut, Maryland, and Pennsylvania. The company says it appeals to home buyers by offering “guaranteed pricing” and a pledge to streamline the process of building a home — from land selection to financing to construction. Excluding land, the cost of building a home through Welcome ranges from $596,000 to $1.75 million. To build on its momentum, Welcome is announcing today that it raised more than $29 million in a Series A funding round led by Era Ventures that closed in September of 2022. The company plans to use its new capital to boost its current headcount of 40, develop its “proprietary land technology,” design new home models and expand into new markets throughout the U.S. Parker89, Montage Ventures, Foundamental, Global Founders Capital, Activant Capital, Gaingels, Elefund and Arkin Holdings also participated in the financing, which brings Welcome’s total venture capital raised since inception to nearly $35 million. Welcome is just one of many startups attempting to address the housing shortage that have raised venture capital in recent years. In November, — a startup that has built an online marketplace that teams up homebuyers with builders and land developers to design and build custom homes — with $12.5 million raised in a Series A funding round led by Khosla Ventures. And in February 2022, tech-enabled homebuilder Homebound in a Khosla-led Series C. In conjunction with the funding, Clelia Warburg Peters, managing partner at , will join Welcome Homes’ board of directors. Peters previously was a venture partner at Bain Capital Ventures and president of Warburg Realty. Era is a new firm focused on investing in “ideas that leverage technology and innovation to reimagine the built environment.” Via email, Peters described Welcome’s capital-light business model as that of a “neo-builder,” which she described as a three-sided, managed marketplace that links demand (buyers), supply (builders) and the required financing (banks). She believes the startup can help alleviate the United States’ chronic undersupply of single-family housing. “Today, the total US single-family homebuilding market value stands between $250 billion and $400 billion annually, and we believe that this number could grow with Welcome Homes’ unique ‘lot-by-lot’ approach focusing on urban infill — this sits between production homebuilding, which generally focuses on master build communities and custom homebuilding, which is inaccessible to most consumers because of price and timeline,” Peters wrote. The investor went on to liken Welcome Homes to Tesla and Apple in that it has the potential to “tap into an appetite for productized, branded homes that have not been sold ‘en masse’ since the Sears Catalog over half a century ago.” “We believe these homes will resonate with a generation of millennial homebuyers who have grown accustomed to similar buying experiences from high-end brands such as Apple and Tesla,” Peters added. Meanwhile, she told TechCrunch, Welcome can leverage technology to automate and alleviate most back-office functions that builders might find burdensome while giving banks a way to offer construction financing directly to the homebuyer in a less risky manner since they will “be working with a scaled partner across multiple projects.” Finally, unlike traditional homebuilders, Welcome Homes doesn’t have land or unsold homes on its balance sheet, which Peters believes will allow it to scale more quickly. “We’re really more of a tech company than a tech-enabled homebuilder,” said Hartman, who also previously started and sold another startup, TechDay. “Welcome is figuring out things like how we can use imaging to detect walk patterns, or how to create a rules-based system around municipal variances so we know exactly what type of home would fit on a given property.”

Samsung’s new washer captures microplastics from your dirty laundry

Harri Weber

Unless you live in a natural fibers–only household, your laundry is likely exacerbating an environmental crisis with each wash. The terrible microplastics mess we’re making — thanks in great part to the rise of synthetic clothing — apparently inspired Samsung to develop some new washing machine tech, which it called a “breakthrough in the fight against microplastics” today at . Specifically, Samsung is rolling out two new washing machine features — a plastic-catching filter that works with any washer and a specialized wash cycle that halved microplastic pollution, a Samsung-funded study showed. The tech giant says it worked with Patagonia for more than a year on the features, and claimed in a that they might “have a real impact on the health of aquatic ecosystems.” Samsung’s “Less Microfiber” wash cycle Samsung Here’s the rub: When your washing machine knocks your shirts and hoodies around, the friction causes synthetic materials like polyester to shed tiny threads, or . These teeny bits flow into the ocean through wastewater systems and spread — in the air, in , in , you name it. Though we don’t know exactly how harmful microplastics are to people, a recent showed that microplastics can and trigger allergic reactions, in addition to . One company certainly won’t solve plastic pollution, but luckily other folks are working on this problem, too. and are two ways to reduce the environmental cost of washing synthetic materials, yet they’re not substitute for altogether.

African gaming startup Carry1st raises $27M from Bitkraft Ventures and a16z

Tage Kene-Okafor

South African music artiste Nasty C (far left); Carry1st co-founder and COO Lucy Hoffman (far right). Carry1st fictionalized Donald Trump and  Speaking on the investment, Jens Hilgers, the founding general partner at BITKRAFT Ventures, said: “Africa is home to the largest population of young people in the world, and this upcoming generation will grow up digitally native with videogames as their primary entertainment preference. We have full conviction in Carry1st’s impressive founding team and their vision of building out foundational infrastructure and localized content, ensuring that gaming and interactive entertainment in Africa will thrive.”

Alexa, find me an EV charging station

Rebecca Bellan

Amazon’s conversational voice assistant, Alexa, has made its way into in recent years. Now, along with ordering Alexa to “play ‘Despacito’” or “call Mom,” EV drivers in the U.S. with Alexa-enabled cars will be able to ask Alexa to find the nearest public charging spot. Charging network EVgo will be the first to partner with Amazon to offer this service later in 2023. Aside from a list of available public charging stations, Alexa will help drivers in the U.S. navigate to their chosen station and initiate charging. Drivers can even pay through a linked account simply by saying, “Alexa, pay for my charge,” according to Amazon, which announced the integration at in Las Vegas on Thursday. “The EV charging experience is a lot more fragmented than for gas customers, who can pretty much stop at any location,” said Anes Hodžić, vice president at Amazon’s Smart Vehicles group, in a statement. Hodžić noted that EV drivers often fumble through different apps and maps to find an available charger, taking into account factors like real-time availability, distance, remaining battery, charging speed, plug type and payment options. Alexa’s EV charging service connects drivers with Alexa-enabled vehicles and automotive accessories like Echo Auto to over 150,000 public stations in the U.S. powered by EVgo and other operators. When a driver asks Alexa to find a station, they’ll receive a list of nearby locations with availability by plug type, as well as the time and distance to arrival. Once the driver chooses a location, Alexa can provide navigational instructions. “At EVgo, we’re committed to making EV driving infrastructure convenient, reliable, and affordable for all types of drivers,” said Cathy Zoi, EVgo’s CEO. “Mass adoption of EVs is underway, and this collaboration between EVgo and Amazon will make charging seamless for even more EV drivers.” At present, EVgo has more than 850 fast charging stations across the country, but it’s building out more. In June, to build more than 3,250 fast chargers in the U.S. by 2025.

Dungeons & Dragons content creators are fighting to protect their livelihoods

Amanda Silberling

on the periphery for the nerdiest of nerds, Dungeons & Dragons has exploded into the mainstream. Much of this success is owed to the podcasters, Twitch streamers and writers who have embraced the fantasy framework to tell collaborative stories at the whims of their dice rolls, inspiring massive renewed interest in the game. “I think we’re in a really interesting moment in D&D,” , a Dungeons & Dragons content creator with over , told TechCrunch. “You have [ of the game] that’s about to come out, and you have also at the same time, all of these third-party writers, and people writing modules, and all of the different stuff that they’re adding into the community.” Though Dungeons & Dragons was first published in 1974, a new generation of fans has found an entry point through independent “ ” shows like Dropout’s “Dimension 20” or the McElroy brothers’ “The Adventure Zone.” In 2021, a Twitch leak revealed that the platform’s was “Critical Role,” a highly produced stream in which a crew of professional voice actors play Dungeons & Dragons live. The show made over $9.6 million that year. These hugely popular shows are only the tip of the iceberg when it comes to the Dungeons & Dragons fan community. Thanks to the longstanding Open Gaming License (OGL), which has been in effect since 2000, a slew of internet creators are making a modest living off of the game, whether they’re performing on livestreams, writing original spell books or coding online platforms for remote gameplay. Now, proposed changes to the OGL threaten an entire cohort of Dungeons & Dragons content creators. Wizards of the Coast (WoTC), the Hasbro-owned publisher of the game, plans to update the OGL for the first time in over 22 years, releasing a new licensing system that the company is calling OGL 1.1. Some creators who received copies of OGL 1.1 have leaked it across the internet, sparking an outcry of resistance from fans and content creators alike. More than 54,000 people have signed an open letter against these changes as part of a movement called , organized by editor-in-chief Mike Holik. “If this new license gains wide adoption, the tabletop landscape will fracture and lose its biggest onboarding mechanisms, shuttering the small businesses that populate your local cons and putting a stop to their creations,” the says. “Innovation in the gaming industry will evaporate; your favorite games will be trapped in the past, instead of being allowed to migrate to your phone, virtual reality, and beyond. Diversity in the industry will shrink away, as projects from marginalized creators are effectively written out of the future.” As a franchise, Dungeons & Dragons is not really one canonical story. Each time a new group plays the game, they create their own characters and plot lines that guide their improvisational roleplaying experience. Though WoTC will publish its own books of lore that players can choose to incorporate, the core of the game is pretty malleable and unspecific. To play the game, players sculpt original fantasy characters from classes like sorcerers, druids and fighters, and the rules of Dungeons & Dragons provide skills, spells and ability stats that make up the game system. But as actual play shows and fan-made companion publications become more popular, Hasbro and WoTC executives have said that they want to turn the “ ” Dungeons & Dragons property into a full-blown media franchise. “The D&D strategy is a broad four-quadrant strategy, where we have this powerful brand that has similar awareness, say like ‘Lord of the Rings’ or ‘Harry Potter,’” said Hasbro CEO Chris Cocks on a December . “And we’re going to imbue it with blockbuster entertainment.” The company is producing a Dungeons & Dragons and movie, which is slated for release in March. The problem, though, is that Dungeons & Dragons is merely a framework through which people create their own fantasy-inspired stories and games — there are no core characters or plot that unifies the interest of the whole community. The game’s playbooks feature some fan-favorite characters like Drizzt Do’Urden, a drow hero who resists his dark nature, or Count Strahd von Zarovich, an evil vampire villain. But it’s very possible for fans to dive deep into Dungeons & Dragons without ever even encountering these characters, since they are not essential to the game. It’s impossible to imagine a “Star Wars” fan who has never heard of Yoda, but you can play Dungeons & Dragons for years without ever knowing that Drizzt or Strahd exist. “There is no main character of D&D, or I think another way of saying it is, are the main character of D&D,” said Osborn, who is known online as Catieosaurus. “I think it could be fun to watch a movie about these adventures or whatever, but the appeal of D&D is that it’s about us — it’s about the stories that we tell together at a table.” Hasbro did not respond to multiple requests for comment on its plans for OGL 1.1. A creator who received a copy of the updated license told TechCrunch that the new terms give WoTC ownership of any fan-made IP — so, if a creator writes an adventure for players to incorporate into their own Dungeons & Dragons campaign, WoTC has the right to reprint the creator’s work as their own without payment. It also endangers the existence of software, which maked remote play possible. Under the new license, as proposed, any creator who makes over $50,000 will have to report their income to WoTC, and those who make over $750,000 will have to pay a 25% royalty to the company on every dollar above that threshold. Though these dollar values may seem high, this applies to gross revenue, not profit. “When you are creating content, you’re working on small margins. You’re hiring your own ecosystem of creators, designers, artists, everything,” said , a partner at Premack Rogers and Dungeons & Dragons livestreamer who has seen the OGL 1.1 document. “And a 25% royalty, even if it’s above a certain threshold, can absolutely destroy your margin, and in many cases, it can make it untenable to continue to produce.” At Mage Hand Press, one of Holik’s for a Dungeons & Dragons expansion earned $704,467 from 7,710 backers. But he sees the royalty clause as a way for WoTC to make it harder for independent publishers to compete. “A Kickstarter involves many small products, so your profit margins actually go down, because really, you’re going to offer people some dice, and some adventures, and a box set, and all of those individual things end up cutting into your profit margins pretty significantly,” Holik said. “Kickstarters don’t walk away with 80% of their money and profit. None of that is legitimate. I don’t know where they’re getting that 25% number beyond … they’re trying to squish competition completely.” Not only would OGL 1.1 make it more difficult for Holik to turn a profit, but Downs says it would also grant WoTC the ability to publish independent creators’ work as its own. “If you accept OGL 1.1, you’re granting Wizards of the Coast a perpetual, irrevocable, royalty-free sublicense,” Downs told TechCrunch. “That means they have the forever right, that you cannot revoke, to use your work without additional royalty … That section of the license is more detrimental to creators than the monetary part of the license.” For those making actual play videos or podcasts, the new OGL has less of a direct effect. Currently, the fan-content policy allows creators to use WoTC’s IP so long as it’s free. Creators are allowed to earn income through sponsorships, ad revenue and donations, but they cannot paywall any content. WoTC has remained eerily silent in light of the backlash against the leak of OGL 1.1. It’s not clear how, when, or if this change will go into effect, but the company said last year that it would make these changes in the beginning of 2023. “The OGL literally changed my life,” said Osborn. “It’s why I’m able to do what I do. It’s how I make my income. And so it’s just kind of scary.” Holik says that if OGL 1.1 goes into effect, he will have to restructure his entire business. “I’d have to cancel two Kickstarters and take my Patreon down overnight,” said Holik. Through alone, Holik’s company makes almost $2,000 per month. According to Osborn, the silver lining is that there are more games out there like Dungeons & Dragons. Though it’s inarguably the most popular TTRPG, fans have also gravitated to game systems like , , and . On websites like , an indie games marketplace, TTRPG players can find anything from a game about to a about high school football. “I don’t want to say it’s a good thing, but I think it has put the community in an incredible position. Like, if you look on Twitter, right now there’s so many conversations starting about what are other options? What are other games I can play?” Osborn said. “I think people are going to start seeing the wide variety of incredible games that have been made by small indie creators.”

Nvidia helps Hyundai, BYD, Polestar join the in-car gaming revolution

Rebecca Bellan

Nvidia’s on-demand cloud gaming service, known as , is headed to select Hyundai, BYD and Polestar electric vehicles, the company said Tuesday ahead of in Las Vegas. The announcement, while lacking details on timelines or vehicle models, is notable because it marks the first time Nvidia is expanding its GeForce Now service beyond phones, smart TVs and computers and into cars. Nvidia’s in-car games offering comes as automakers sink more resources into so-called software-defined vehicles, in hopes of finding new sources of revenue beyond building, selling and financing cars, trucks and SUVs. While Tesla was the first to pioneer in-car gaming and to its vehicles, other automakers have picked up the pace. A number of automakers, including Stellantis, announced at CES last year plans to add . In October, to bring games to its BMW 7 series EVs this year. One can see the appeal of integrating such entertainment with newer vehicles, particularly for electric vehicles. Have to wait 30 minutes to charge your car? Put your feet up and stream some “Wheel of Time.” Got hyper kids in the back seat on a long car ride? Distract them with Cyberpunk 2077 or The Witcher 3: Wild Hunt. Automakers and suppliers may also be looking toward a future when driving tasks become more automated. Danny Shapiro, Nvidia’s VP of automotive, told TechCrunch that customers could stream games into stationary vehicles that are connected to Wi-Fi or even cars in motion if there’s a high bandwidth connection. To make this happen, Nvidia leverages its large network of servers and partner networks around the world to enable game-playing in the cloud. Games are essentially being played on a server in one of Nvidia’s data centers and then streamed to someone’s device. “It’s like Netflix but interactive,” Shapiro said in a recent interview. “It’s not just buffering content and sending it down. Somebody would have a gaming controller, and those button clicks are transmitted to the server. The game is played, rendered and then streamed back to the device. So there’s a lot of technology we’ve developed to basically reduce the latency and enable somebody to play a game in the cloud with the exact same experience as they would expect on their PC or running on their local TV.” Hyundai, BYD and Polestar all rely on Nvidia’s Drive platform for infotainment and autonomous vehicle development, but GeForce Now is hardware agnostic, said Shapiro. GeForce Now features more than 1,000 titles from leading PC game sources like Steam, the Electronic Arts app, Ubisoft, Epic Games Store and GOG.com, as well as free-to-play games like Fortnite, Lost Ark and Destiny 2, according to Nvidia.

Don’t be sucked in by AI’s head-spinning hype cycles

Devin Coldewey

The last year was a roller-coaster ride in the AI world, and no doubt many people are dizzied by the number of advances and reversals, the constant hype and equally constant fearmongering. But let’s take a step back: AI is a powerful and promising new technology, but the conversation isn’t always genuine, and it’s generating more heat than light. AI is interesting to everyone, from PhDs to grade-school kids for good reason. Not every new technology makes us question the fundamental natures of human intelligence and creativity, lets us generate an infinite variety of dinosaurs battling with lasers. This broad appeal means the debate over what AI is, isn’t, might or mustn’t be has spread from trade conferences like NeurIPS to specialist publications like this one, to the front page of impulse-purchase news mags at the grocery store. The threat and/or promise of AI (in a general sense, which lack of specificity is part of the problem) has become a household topic seemingly overnight. On the one hand, must be validating for researchers and engineers who have toiled in relative obscurity for decades on what they feel is an important technology to see it so widely considered and remarked upon. But like the neuroscientist whose paper results in a headline like “Scientists have located the exact center of love,” or the physicist whose ironically named “god particle” leads to a theological debate, it surely must also be frustrating to have one’s work bounced around among the hoi polloi (i.e., unscrupulous pundits, not innocent laypersons) like a beach ball. “AI can now…” is a very dangerous way to start any sentence (though I’m sure I’ve done it myself) because it’s very difficult to say for certain what AI is really doing. It certainly can outplay any human at chess or go, and it can predict the structure of protein chains; it can answer any question confidently (if not correctly) and it can do a remarkably good imitation of any artist, living or dead. But it is difficult to tease out which of these things is important, and to whom, and which will be remembered as briefly diverting parlor tricks in 5 or 10 years, like so many innovations we have been told are going to change the world. The capabilities of AI are widely misunderstood because they have been actively misrepresented by both those who want to sell it or drive investment in it, and those who fear it or underestimate it. It’s obvious there’s a lot of potential in something like ChatGPT, but those building products with it would like nothing better than for you, potentially a customer or at least someone who will encounter it, to think that it is more powerful and less error-prone than it is. Billions are being spent to ensure that AI is at the core of all manner of services — and not necessarily to make them better, but to automate them the way so much has been automated with mixed results. Not to use the scary “they,” but they — meaning companies like Microsoft and Google that have an enormous financial interest in the success of AI in their core businesses (having invested so much in it) — are not interested in changing the world for the better, but making more money. They’re businesses, and AI is a product they are selling or hoping to sell — that no slander against them, just something to keep in mind when they make their claims. On the other hand you have people who fear, for good reason, that their role will be eliminated not due to actual obsolescence but because some credulous manager swallowed the “AI revolution” hook, line, and sinker. People are not reading ChatGPT scripts and thinking, “Oh no, this software does what I do.” They are thinking, “This software appears to do what I do to people who don’t understand either.” That’s very dangerous when your work is systemically misunderstood or undervalued, as a great deal is. But it’s a problem with management styles, not AI . Fortunately we have bold experiments like : the graves of such ill-advised efforts will serve as gruesome trail markers to those thinking of making the same mistakes in the future. But it is equally dangerous to dismiss AI as a toy, or to say it will never do such and such simply because it can’t now, or because one has seen an example of it failing. It’s the same mistake that the other side makes, but inverted: Proponents see a good example and say, “This shows it’s over for concept artists”; opponents see a bad example (or perhaps the same one!) and say, “This shows it can never replace concept artists.” Both build their houses upon shifting sands. But both click, and eyeballs are of course the fundamental currency of the online world. And so you have these dueling extreme takes that attract attention not for being thoughtful but for being reactive and extreme — which should surprise no one, since as we have all learned from the last decade, conflict drives engagement. What feels like a cycle of hype and disappointment is just fluctuating visibility in an ongoing and not very helpful argument over whether AI is fundamentally this or that. It has the feel of people in the ’50s arguing over whether we will colonize Mars or Venus first. The reality is that a lot of those concept artists, not to mention novelists, musicians, tax preparers, lawyers, and every other profession that sees AI encroachment in one way or another, are actually excited and interested. They know their work well enough to understand that even a really good imitation of what they do is fundamentally different from actually doing it. Advances in AI are happening slower than you think, not because there aren’t breakthroughs but because those breakthroughs are the result of years and years of work that isn’t as photogenic or shareable as stylized avatars. The biggest thing in the last decade was “Attention is all you need,” but we didn’t see that on the cover of Time. It’s certainly notable that as of this month or that, it’s good enough to do certain things, but don’t think about it as AI “crossing a line” so much as AI moving farther down a long, long gradient or continuum that even its most gifted practitioners can’t see more than a few months of. All of this is just to say, don’t get caught up in either the hype or the doomsayers. What AI can or can’t do is an open question, and if anyone says they know, check if they’re trying to sell you something. What people may choose to do with the AI we already have, though — that’s something we can and should talk about more. I can live with a model that can ape my writing style — I’m just aping a dozen other writers anyway. But I would prefer not to work at a company that algorithmically determines pay or who gets laid off, because I wouldn’t trust those who put that system in place. As usual, the tech isn’t the threat — it’s the people using it.

Twitter partners with DoubleVerify and IAS on brand safety initiative amid advertiser exits

Ivan Mehta

Amid declining ad revenue and , Twitter announced today that it has teamed up with adtech companies and to tell advertisers if their ad is placed around inappropriate content. The program, available first for U.S.-based advertising campaigns, allows brands to analyze the content adjacent to — primarily tweets above and below the ad — all types of ads, including promoted tweets. Now, Twitter says brands running their ad campaigns will have insights into what kind of tweets are appearing around their ads and the reason behind that. Companies can also use Twitter’s adjacency control tools to fine-tune their campaign to filter out keywords. DoubleVerify and IAS said that their tweet scanning solutions will cover Twitter’s Home timeline first and then expand to profile and search placements. In addition to addressing brand safety concerns, the new system aims to provide suitability scores to help brands figure out if their ads are shown alongside tweets that might not go well with the brand’s image. For instance, an electronic brand may not want its ad to appear alongside a tweet talking about e-waste. In a call with TechCrunch, Nayef Hijazi, VP of product marketing at DoubleVerify, said that the company is able to look at the tweets before and after the ad and classify them according to the company’s own safety and suitability settings. This provides them insight into how their ads are appearing on Twitter. The company said that Twitter will promote this partnership in its own way to let advertisers know of this service. But it is not clear how the social media platform will package this up. “Twitter is committed to promoting a safe advertising experience for people and brands, and this commitment has never been stronger,” AJ Brown, Twitter’s head of Brand Safety, said in a statement. “Validation of the context in which ads serve according to Global Alliance for Responsible Media (GARM) industry standards is incredibly important to us and our customers.” Both DoubleVerify and IAS will have access to real-time data from Twitter to measure ad performance, we understand. This follows Twitter’s recent on third-party apps, signaling that Twitter is concentrating on developer initiatives that could bring in revenue — and arguably, much-needed revenue at that. Twitter’s various monetization plans around subscriptions or payments are ideas that may only pan out in the long term, if at all. In the near term, however, Musk is facing the Twitter. The only real solution to Twitter’s financial crisis is getting advertisers to come back. Twitter first , published shortly after Elon Musk’s takeover of the social network in late . The post also detailed the launch of adjacency control tools to help brands present their ads from appearing around content with certain keywords. The announcement had arrived at a time when the Tesla and SpaceX exec had already made a number of missteps that worried advertisers enough to see many pause spending on the network. Specifically, brands were concerned about changes to moderation policies and layoffs impacting trust and safety teams, which could lead to their ads being shown alongside toxic content. Over 40 civil rights groups pressuring advertisers to pause spending, and many brands seemed to agree a reassessment was in order as Twitter worked through its transition in leadership. The social network also lost its trusted top ad exec Sarah Personette in November. Reports at that time noted that companies like had already paused spending on Twitter, and soon others followed. Data from analytics firm Pathmatics provided to TechCrunch noted that several companies, including Kraft Heinz, Nestle, Coca-Cola, and Best Buy, didn’t spend any ad money on the platform in December. Musk, however, downplayed the concerns, for the drop in social media companies’ decline in ad revenue. Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists. Extremely messed up! They’re trying to destroy free speech in America. — Elon Musk (@elonmusk) But his posturing was not representative of reality. Days later, Musk hosted a Twitter Spaces conversation to reassure advertisers that the company is . The conversation stemmed from the fact that some users were able to take advantage of the ill-thought-out Twitter Blue subscription, which offered anyone a verification mark that some used to then impersonate brands. According to Pathmatics, Twitter spending of the top 30 advertisers dropped 29% year-on-year in 2022. The data suggested the top 30 brands spent $11.3 million in the first week of September on Twitter. That spending came down to $6.5 million the last week of the year.  Pathmatics’ estimates don’t include any data about incentives offered by Twitter. Last month, Twitter tried to lure advertisers back with multiple incentives, including added impressions and matched spending, according to a report from the . The company also launched today to allow marketers to show ads when people search for specific terms. Today we are rolling out Search Keywords Ads to all advertisers as a beta test 🧵 — Twitter Business (@TwitterBusiness) Musk has tried to boost the company’s money-making ability by pushing the Twitter Blue paid plan along with . He has also proposed a costlier plan . Earlier this month, reported that Twitter’s fourth-quarter revenue fell by 35% year on year according to internal documents seen by the publication. While Twitter’s latest partnership with DoubleVerify and IAS focuses on increasing insights into brand safety, its latest moves have not always been reflective of that agenda. The company today reinstated , who had praised Hitler in the past. Twitter had to following the outrage. The social media company is facing for failing to filter antisemitic speech.

The rise of product-led sales, or why product-led growth requires a sales makeover

Anna Heim

B2B is looking a lot more than B2C these days: From Figma to Slack, individuals and teams can sign up for tools that their entire organization will end up adopting. This concept is also known as product-led growth. growth is almost tautological: As a vendor, it basically means that you’re using your product as the driver of growth for your company, chief product officer Justin Bauer told TechCrunch. But under this self-explanatory concept, there’s a major change at play. The biggest change, Bauer said, “is that the customer relationship now starts with the product versus ending with it, which is how B2B traditionally worked.” While the rise of PLG has upended the traditional top-down sales funnel, it hasn’t replaced sales. However, it does have profound implications for sales teams, but these don’t get discussed often enough.

Valiant Hearts mobile game sequel is set to launch on Netflix Games on January 31

Lauren Forristal

The mobile game by Ubisoft will launch exclusively on on January 31. The game was previously announced in , and yesterday Netflix and Ubisoft the official release date. As part of a recent partnership, this is the first of three mobile games from Netflix and Ubisoft. Also coming to Netflix Games in 2023 are Ubisoft’s The Mighty Quest for Epic Loot and an Assassin’s Creed mobile game. Valiant Hearts: Coming Home is a narrative game set during World War I. It blends puzzle games, adventure and action as players follow the story of four war heroes who are trying to survive. According to Netflix and Ubisoft, Valiant Hearts: Coming Home takes inspiration from the Harlem Hellfighters, one of the first African American infantry regiments during WWI and WWII. The upcoming game is the sequel to Valiant Hearts: The Great War, the puzzle adventure game that was released in 2014 on Android and iOS devices, Nintendo Switch, PlayStation 3 and 4, Xbox One, and other platforms. Valiant Hearts: The Great War won multiple awards, so the upcoming mobile game sequel is a smart addition to Netflix’s gaming lineup. The company has launched other popular games in order to boost its audience, such as , , , and more. Netflix’s gaming division is known to use as a way to entice gamers. For instance, Netflix recently launched its latest mobile game, , based on the hit TV series “Narcos.” The strategy game lets players take on the role of a cartel kingpin, build their own empire and destroy enemies. The company is also planning on more games this year, including Vikings: Valhalla and Teenage Mutant Ninja Turtles: Shredder’s Revenge. To access Netflix mobile games, you need a Netflix subscription. Subscribers can go to the Netflix app under the “Netflix Games” tab or download titles directly through the Google Play Store or Apple Store. There are over 50 games available on the platform.

Strata, a provider of identity orchestration to bridge disparate log-in procedures, raises $26M

Ingrid Lunden

Many believe the key to keeping networks and data secure lies in watertight identity and log-in management, but what happens when you are using a variety of apps, platforms, and a hybrid of cloud and other servers and networks that cannot be used with the same ID management tool? A startup called working in the area of identity orchestration, a platform that promises to bridge those gaps, is today announcing a round of funding, underscoring the market demand for tools like these. The company has raised $26 million in a Series B round, which it will be using to continue expanding its business. The round is being led by Telstra Ventures — which is backed by the Australian telco but . Menlo Ventures, Forgepoint Capital and Innovating Capital — all previous backers — are also in this round. Strata has now raised $42.5 million, and it’s not disclosing its valuation with this round. Somewhat confusingly, PitchBook that in June 2022, Strata was raising a Series B of $35 million at a $100 million pre-money valuation. Strata tells us this is not accurate — the round was raised and closed in the last 90 days, co-founder and CEO Eric Olden told TechCrunch. There are a number of identity orchestration providers on the market today, including the likes of Ping, Entrust, Forge Rock and others. Strata’s unique selling point, said Olden, is that its flagship product, Maverics, lets customers run logins for legacy applications alongside those of more modern tools, plus any new applications that get added over time, without needing to rewrite any code. This is something that Olden wanted to build in part out of his direct experience. He is a of the security industry, having founded two different companies that have played key parts in the evolution of identity access management. Both startups in their time were eventually acquired by RSA; and he’s also spent time at Oracle running its cloud security and identity management business. Through all of that, he could see that even when tools purported to provide identity coverage for various applications, in reality they did not because enterprises still use a hodge-podge of legacy and modern services and applications. “We really needed ID management for a new generation,” he said in an interview. “The thing that was missing was how to make it all work together.” Orchestration is not a new concept in enterprise IT. It’s used in relation to managing data in containers, automating certain services, and more. What Strata is doing is applying that concept to identity, covering access control, authentication and auditing. Typically the companies it’s working with might use between six and 10 identity management tools, with Okta for example covering some services, but not able to cover on-premise applications; and Microsoft covering others, an issue that becomes compounded with businesses acquire or merge with other businesses. “Now Strata makes all this work together,” he said. He says the effect is akin to VMware’s with its virtualization of IT environments, but most importantly, the connectors that Strata has built to work with other identity products saves customers potentially millions of dollars that they would have had to dedicate to re-writing applications or adopting new ones so that everything can be managed in a more cohesive way. The company is not disclosing revenue figures but says that they have grown more than 350% in the last year. The opportunity is ripe: Overall the identity and access market is projected to be a $37 billion market by 2030, growing at a rate of 14.12%, Strata said. “Strata is disrupting the traditional proprietary identity management model by making it possible for legacy and cloud identity systems to interoperate, all without the need to modify applications,” said Marcus Bartram, general partner at Telstra Ventures, in a statement. “We believe the company’s first-of-its-kind identity orchestration platform has the potential to eliminate decades of vendor lock-in for customers and slingshot Strata to the top of the identity market leader board.” Strata is focused right now on North America primarily, but Bartram told TechCrunch that the plan will be to help the company scale in Asia Pacific, likely in 2024. What will be interesting too is where the industry settles when it comes to interfaces for identity access. Passwords, two-factor authentication, security keys and newer technologies like fingerprints or face ID all sit alongside each other today. With identity management now inching towards being centralized, will the format in which we authenticate ourselves simplify as well?

Bosch is rolling out a security dashcam designed for ride-share drivers

Kirsten Korosec

Bosch is expanding its security footprint in the ride-hailing economy. On Tuesday evening as kicked off in Las Vegas, the global supplier introduced a new connected smart camera and accompanying 24-hour support line for drivers of ride-hailing apps. Bosch said it’s working with Gridwise, an app for ride-share and delivery drivers, to conduct user research and ensure it’s the right fit for the market. The device designed with ride-hailing drivers in mind, includes an interior and exterior camera and a lighting element on the front to let drivers and riders know the service is active. The product also comes with a wireless SOS button in the vehicle that the driver can press to activate an emergency call to a Bosch call center. The emergency call operators are available live 24 hours a day and can access a camera view from the RideCare companion device to determine if emergency services need to be contacted. “What takes the Bosch RideCare companion beyond a simple dashcam is that it is paired with a service that provides active help by trained call center specialists when required,” Christoph Hartung, president of cross-domain computing solutions for Bosch, said in a statement. All rides are monitored. But the footage, which includes encrypted data such as location and a timestamp, is only uploaded to the cloud if an event is triggered via the SOS button or a request from the driver. Data is handled according to applicable data privacy regulations, according to the company. The device is equipped with a number of tamper-resistant features and will send an alert if the field-of-view of the device is compromised or blocked. The product will be available for sale in the early part of 2023, according to a company spokesperson. It will be marketed to drivers as well as fleets. Bosch didn’t release pricing for the hardware product and accompanying support service. A company spokesperson said there will be an upfront cost for the device and a subscription model for the support service. RideCare companion builds off of the company’s previous sharing economy product “RideCare insight,” which was introduced in 2021. That product detects smoke, damage and harsh driving in shared vehicles. This newest product not only signals the company’s bet on the growth of human-driven ride-hailing services, but its also an investment in the future of ride-sharing: robotaxis. The company wouldn’t reveal which ride-share companies (including those working on robotaxi services) it is working with. A spokesperson did acknowledge Bosch has spoken with a “number of companies” in the market. The company is clearly eyeing the automated ride-share services industry as a possible market for the RideShare product. “As automated ride-share services continue to emerge, a solution like RideCare companion becomes even more relevant for passenger transparency and safety,” Hartung added. The product was honored as a CES 2023 Innovation Awards Best of Innovation honoree in the In-Vehicle Entertainment & Safety category.

AtomicJar opens public beta of Testcontainers Cloud, cloud version of open source testing tool

Ron Miller

Working with, microservices-based development environments presents a unique set of testing challenges. Richard North developed an open source solution called in 2015 to help ease this problem for developers. Today, the open source project is used by companies like Uber, Netflix, Spotify and Capital One. North and co-founder Sergei Egorov (who was a co-maintainer of Testcontainers) founded in 2021 to build a commercial company on top of the open source tooling. They have taken the original idea a step further by creating a cloud-based version to expand the tool’s capabilities and move some of the resource-intensive testing from a developer’s laptop to the cloud. Today, the company announced a $25 million Series A and that it was opening a public beta of . GA could come later this year. Egorov, who is the startup’s CEO, says that a big testing issue for developers is that they have been using a representation of the testing components, rather than the actual software, and they often lacked confidence that these tests were actually reproducing what would happen in a live environment. Testcontainers changed that by testing against real versions of the dependent software pieces. “If I’m developing my application with Postgres, Kafka and Redis, I’m testing with real Postgres, real Kafka and real Redis, similar to how it would be in production. And then I test with real databases, and not just some mocks of the same technologies that are not giving me enough confidence [that they will work the same way in production],” Egorov told TechCrunch. TestContainers Cloud moves the resource-heavy parts of the testing process to the cloud, while still allowing developers to use their familiar tool set on their laptops. “It gives developers a tool they can use. It’s not a framework. It’s not something that tells them how they should develop software. It’s a generic tool. They can add it to any stack they like and start testing, where they previously would use emulators for real dependencies,” he said. In addition, TestContainers Cloud has been built for groups instead of a lone developer working on a laptop. “The commercial version allows companies to adopt Testcontainers consistently across developer environments and CI environments. And it also brings scalability to those testing approaches because the open source version is constrained to a single machine where tests are running,” Egorov explained. Today, the company has 23 employees. Egorov is hiring, and says the employment market is stabilizing, and he is seeing higher quality talent in the pipeline. He says that the company hired a recruiter in November, who is helping put a stronger focus on diversity and inclusion in their hires. Today’s $25 million round was led by Insight Partners with participation from existing investors Boldstart Ventures, Tribe Capital, Chalfen Ventures and Snyk co-founder Guy Podjarny and Snyk CEO Peter McKay. The company previously raised a $4 million seed round in 2021.

Google to make changes to Android business terms in India after antitrust blow

Manish Singh

Google is revising its business agreements with phonemakers and other partners in India and making a series of other changes in the South Asian market to comply with the local antitrust watchdog’s directions in a major shift that could invite regulators in other regions to make similar suggestions. The Android-maker, which was by the Competition Commission of India last year and was ordered to make a series of changes in its business practices, said Wednesday that it will allow smartphone vendors in India to license individual apps for pre-installation on their Android-powered devices. Google will also give consumers the ability to change search engine and use third-party billing options for apps and games purchases on Play Store starting next month, it said. The Competition Commission of India had ordered Google to not force smartphone makers to bundle so many Google apps on their handsets by default. It had also asked the firm to give users the ability to remove Google apps, use third-party billing options on Play Store, and change their search engine, if they so desire. Google said it will the Competition Commission of India’s directions. But it’s going ahead with the changes to comply with the land of the law. The changes are limited to company’s business practices in India. The move follows Google warning that complying with the CCI’s directions would result in devices getting expensive in the world’s second largest smartphone market and lead to proliferation of unchecked apps that will . India is a major market for Google, where it has amassed over half a billion users. Over 97% of all smartphones in India are powered by Google’s Android mobile operating system, according to research firm Counterpoint. Google has poured billions in the country over the past decade and is in the process of . Following is the full-set of key changes Google is undertaking in India: OEMs will be able to license individual Google apps for pre-installation on their devices. Android users have always been able to customize their devices to suit their preferences. Indian users will now have the option to choose their default search engine via a choice screen that will soon start to appear when a user sets up a new Android smartphone or tablet in India. We’re updating the Android compatibility requirements to introduce changes for partners to build non-compatible or forked variants. User choice billing will be available to all apps and games starting next month. Through user choice billing, developers can offer users the option to choose an alternative billing system alongside Google Play’s billing system when purchasing in-app digital content. Android has always supported the installation of apps from a variety of sources, including via sideloading, which involves app downloads directly from a developer’s website. We recently made changes to the Android installation flow and auto-updating capability for sideloaded apps and app stores while ensuring users understand the potential security risks. In a setback earlier this month, India’s Supreme Court . Google had a deadline until Thursday to comply with the antitrust regulator’s order. “Implementation of these changes across the ecosystem will be a complex process and will require significant work at our end and, in many cases, significant efforts from partners, original equipment manufacturers (OEMs) and developers,” Google said on Wednesday. “Our commitment to Indian users and the country’s digital transformation stands undeterred.”

Does it ever make more sense to raise a structured round over taking a valuation cut?

Rebecca Szkutak

continued its through the end of 2022, and there aren’t any real signs things are going to pick back up for a while. That means more doom and gloom ahead for startups looking to fundraise. Many startups that tried to a regular round in 2022 — or turned to an alternative to hold them over — will find themselves in a tough cash position this year and will have to try to raise. In the process of securing the funds they need, they may have to raise a down round — which consists of raising at a lower valuation than their last — or take on a deal riddled with meant to provide downside protection to investors. A lot of startup founders won’t have a choice as to which deal they’d rather take, but some will, and there are some things to keep in mind when deciding which one might be the better fit. Multiple investors have recently taken to and to express that companies are better off taking a down round and seeing their valuation cut than adding a bunch of structure and investor preferences to a deal. Although founders only get so much choice here. While, of course, we aren’t looking to provide any legal advice here, this recent focus on down rounds did get me thinking: Is that better than a structured round every time? Also, even if investors are touting down rounds, is there any downside? I asked some lawyers to get a better idea.

Paramount+ orders a live-action ‘Dungeons & Dragons’ series

Amanda Silberling

A live-action series based on the tabletop roleplaying game Dungeons & Dragons is coming to Paramount+. The pilot of the show was written and directed by Rawson Marshall Thurber, who wrote films like “Dodgeball” and “Red Notice.” The series will be co-produced by Hasbro’s and Paramount Pictures, which are also working together on the upcoming movie “Dungeons & Dragons: Honor Among Thieves.” Hasbro acquired Dungeons & Dragons publisher Wizards of the Coast in 1999, but in the last few years, Hasbro has reorganized the subsidiary into a more at the games company. These television and movie adaptations of the game are part of the company’s long-term plan to drum up more money from the popular roleplaying game. “The brand is really undermonetized,” said Wizards of the Coast president Cynthia Williams about Dungeons & Dragons in a . But she also added that the game has never been more popular. Paramount+ says that more than 50 million fans have played or interacted with the franchise since its release almost half a century ago. “The D&D strategy is a broad four-quadrant strategy, where we have this powerful brand that has similar awareness, say like ‘Lord of the Rings’ or ‘Harry Potter,'” said Hasbro CEO Chris Cocks on the same call. “And we’re going to imbue it with blockbuster entertainment, like we have with the movie coming up.” A potential problem with this plan, though, is that Dungeons & Dragons is a framework through which people create their own fantasy-inspired stories and games — there isn’t really a core canon or plot that unifies the interest of all players of the game. You could surmise that most “Harry Potter” fans feel an emotional attachment to the story of the orphaned boy wizard and his friends, but you can’t really have a favorite character or scene in Dungeons & Dragons. For the most part, every group’s game has different fan-made characters and events. While Wizards of the Coast does publish some books with “official” lore and ideas, they’re not essential to gameplay. Since the Hasbro acquisition, there have been a few attempts to bring the popularity of “Dungeons & Dragons” to the big screen. In 2000, the film “Dungeons & Dragons” hit theaters, but it was a . This was followed by two direct-to-DVD “Dungeons & Dragons” films in 2005 and 2012, which also performed poorly. As Hasbro invests in blockbuster content like a movie and TV series, Dungeons & Dragons fans and content creators are currently the company’s changing gaming license. Since 2000, fans have been able to make a living by selling their own additions to the game under an open gaming license, but Wizards of the Coast has confirmed that it will soon. Under the new gaming license, all creators making more than $50,000 annually from licensed content will have to report their revenue to Wizards of the Coast, and those making more than $750,000 per year will pay royalties starting in 2024.

VALL-E’s quickie voice deepfakes should worry you, if you weren’t worried already

Devin Coldewey

The emergence in the last week of a particularly effective voice synthesis machine learning model called VALL-E has prompted a new wave of concern over the possibility of deepfake voices made quick and easy — quickfakes, if you will. But VALL-E is more iterative than breakthrough, and the capabilities aren’t so new as you might think. Whether that means you should be more or less worried is up to you. Voice replication has been a subject of intense research for years, and the results have been good enough to power plenty of startups, like ,  and Respeecher. The latter is even being used to create authorized voice reproductions of actors . Yes: from now on Darth Vader will be AI generated. VALL-E, by its creators at Microsoft last week, is a “neural codec language model” that uses a different approach to rendering voices than many before it. Its larger training corpus and some new methods allow it to create “high-quality personalized speech” using just three seconds of audio from a target speaker. That is to say, all you need is an extremely short clip like the following (all clips from Microsoft’s paper): To produce a synthetic voice that sounds remarkably similar: As you can hear, it maintains tone, timbre, a semblance of accent and even the “acoustic environment,” (for instance, a voice compressed into a cell phone call). I didn’t bother labeling them because you can easily tell which of the above is which. It’s quite impressive! So impressive, in fact, that this particular model seems to have pierced the hide of the research community and “gone mainstream.” As I got a drink at my local last night, the bartender emphatically described the new AI menace of voice synthesis. That’s how I know I misjudged the zeitgeist. But if you look back a bit, in as early as 2017 to produce a fake version convincing enough that it would pass in casual use. And that was far from the only project. The improvement we’ve seen in image-generating models like DALL-E 2 and Stable Diffusion, or in language ones like ChatGPT, has been a transformative, qualitative one: A year or two ago this level of detailed, convincing AI-generated content was impossible. The worry (and panic) around these models is understandable and justified. Contrariwise, the improvement offered by VALL-E is  not qualitative. Bad actors interested in proliferating fake voice content could have done so long ago, just at greater computational cost, not something that is particularly difficult to find these days. State-sponsored actors in particular would have plenty of resources at hand to do the kind of compute jobs necessary to, say, create a fake audio clip of the President saying something damaging on a hot mic. I chatted with James Betker, an engineer who worked for a while on another text-to-speech system, . Betker said that VALL-E is indeed iterative and like other popular models these days gets its strength from its size. “It’s a large model, like ChatGPT or Stable Diffusion; it has some inherent understanding of how speech is formed by humans. You can then fine-tune Tortoise and other models on specific speakers, and it makes them really, really good. Not ‘kind of sounds like’; ,” he explained. When you “fine-tune” Stable Diffusion on a particular artist’s work, you’re not retraining the whole enormous model (that takes a lot more power), but you can still vastly improve its capability of replicating that content. But just because it’s familiar doesn’t mean it should be dismissed, Betker clarified. “I’m glad it’s getting some traction because i really want people to be talking about this. I actually feel that speech is somewhat sacred, the way our culture thinks about it,” and he actually stopped working on his own model as a result of these concerns. A fake Dali created by DALL-E 2 doesn’t have the same visceral effect for people as hearing something in their own voice, that of a loved one or of someone admired. VALL-E moves us one step closer to ubiquity, and although it is not the type of model you run on your phone or home computer, that isn’t too far off, Betker speculated. A few years, perhaps, to run something like it yourself; as an example, he sent this clip he’d generated on his own PC using Tortoise-TTS of Samuel L. Jackson, based on audiobook readings of his: Good, right? And a few years ago you might have been able to accomplish something similar, albeit with greater effort. This is all just to say that while VALL-E and the three-second quickfake are definitely notable, they’re a single step on a long road researchers have been walking for over a decade. The threat has existed for years and if anyone cared to replicate your voice, they could easily have done so long ago. That doesn’t make it any less disturbing to think about, and there’s nothing wrong with being creeped out by it. I am too! But the benefits to malicious actors are dubious. Petty scams that use a passable quickfake based on a wrong number call, for instance, are already super easy because security practices at many companies are already lax. Identity theft doesn’t to rely on voice replication because there are so many easier paths to money and access. Meanwhile the benefits are potentially huge — think about people who lose the ability to speak due to an illness or accident. These things happen quickly enough that they don’t have time to record an hour of speech to train a model on (not that this capability is widely available, though it could have been years ago). But with something like VALL-E, all you’d need is a couple clips off someone’s phone of them making a toast at dinner or talking with a friend. There’s always opportunity for scams and impersonation and all that — although more people are parted with their money and identities via far more prosaic ways, like a simple phone or phishing scam. The potential for this technology is huge, but we should also listen to our collective gut, saying there’s something dangerous here. Just don’t panic — yet.

Disney+ advertisers will soon get Hulu’s ad targeting capabilities

Lauren Forristal

Disney Advertising held its annual Tech and Data Showcase today, revealing plans to roll out some of Hulu’s ad targeting capabilities to Disney+. When Disney+ its last month, advertisers couldn’t target ads to specific audiences. By giving Disney+ advertisers access to Hulu’s ad-targeting tools, they can learn a user’s age, gender, and geo-location, which will likely help advertisers make more effective ads and bring in more revenue for both the ad agencies and Disney. In an exclusive interview with Disney Advertising president Rita Ferro said Disney+ would get Hulu’s ad targeting capabilities beginning in April. By July, the full suite of tools will be available across Disney’s streaming portfolio, including ESPN+. “The past few years we have been focused on building a complete, proprietary ad server for the entire Walt Disney Company. This gives us control over how we deliver ads, how we insert ads, formats of ads we use, how we integrate with programmatic networks, which really just gives us the complete flexibility to reimagine how we want to sell in the future,” said Aaron LaBerge, CTO of Disney Media and Entertainment Distribution. “That Ad server is now powering Hulu and is at the heart of the ads on Disney+.” Unlike other streaming services, Disney built its own proprietary technology for digital ads, which means Disney has more control and can focus on delivery behavior for its ad partners. The Disney Ad Server (DAS) allows the company to use first-party data. When Netflix launched its ad-supported tier last November, it partnered with to run ads off the Xandr platform. This means Netflix must rely on a third-party vendor. The Disney Ad Server delivers nearly half a billion million ad impressions per day, noted Jeremy Helfand, executive vice president, Advertising Platforms, Disney Media, Entertainment and Distribution. Helfand also said that Disney+ will soon get features like biddable on programmatic capabilities and 18+ targeting later this year. Disney’s Audience graph, which launched about ten years ago, gives advertisers “three times higher match rates,” claimed director of Advanced Analytics and Data Solutions, Christine Chung, during today’s showcase. Chung added that Disney Select, the company’s first-party segment offering, is built on over 100,000 audience attributes taken from 235 million devices and user IDs. During today’s Tech and Data Showcase, the company added that it plans on automating 50% of its ad sales by 2024. Ferro told Digiday, “We’re at 35% right now, and that’s before the full integration of all of these [ad products and services from Hulu].” Other announcements include a premiere streaming measurement deal with TV outcomes-based company EDO (Entertainment Data Oracle), which will give Disney access to EDO’s engagement metrics. “With EDO’s predictive, behavioral engagement data that correlates to market share growth, advertising leaders like Disney can know and predict the effectiveness of Convergent TV campaigns,” said actor and filmmaker Edward Norton, who’s also the co-founder and chairman of EDO. Disney also announced the expansion of a multiyear relationship with Samba TV to measure reach and frequency across all connected devices.

Microsoft services like Outlook and Teams accessible again after outage caused by a ‘network issue’

Ivan Mehta

We are aware that multiple Xbox services experienced intermittent issues, but all services should be recovered at this time. Thank you for your patience, and happy gaming. — Xbox Support (@XboxSupport) Scores of Microsoft services including Teams, Xbox Live, Outlook and Microsoft 365 suite are inaccessible to thousands of users around the globe. Microsoft has acknowledged the outage and said it’s working on a fix. According to DownDetector, a popular tool that tracks service reliability, users began reporting accessibility issues with multiple services including Microsoft 365, Outlook, Teams, Minecraft, Azure, GitHub and Microsoft Store about an hour ago (2:30 a.m. PST). We're investigating issues impacting multiple Microsoft 365 services. More info can be found in the admin center under MO502273. — Microsoft 365 Status (@MSFT365Status) ms teams and outlook down, tapos nagsend ako chat sa viber 💀 — g | vibe • bss 02.06 (@__svtofjune) MS Teams and Outlook down? I guess some companies will opt to announce early work dismissal 🙈 or “Be right back” status is the key — WALTER CES (@waltzjces) Microsoft’s currently says that “users may be unable to access multiple Microsoft 365 services.” Apart from the services reported by users, the company said SharePoint Online, OneDrive for Business and Microsoft Graph were also facing outages. “We’ve identified a potential networking issue and are reviewing telemetry to determine the next troubleshooting steps,” the page said. Microsoft laid off as a response to “macroeconomic conditions and changing customer priorities.” “As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” Nadella wrote in an email memo sent to employees. “We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.” He added that historically the company has had to make these kinds of “hard choices” to remain relevant in the industry “that is unforgiving to anyone who doesn’t adapt to platform shifts.”

With new funding, Atomic AI envisions RNA as the next frontier in drug discovery

Devin Coldewey

The biotech industry is experiencing a rush of AI-powered tools for many aspects of the complex drug discovery process. But one that has flown under the radar, increasingly thought to be key to certain diseases but woefully understudied, is RNA. With $35 million in new funding, aims to do for RNA what AlphaFold did for proteins, and find entirely new treatments in the process. If you can still recall your high school biology, you probably remember RNA as sort of a middle man between DNA (long term information storage) and proteins (the machinery of cellular life at the molecular level). But like most things in nature, it doesn’t seem to be quite that simple, explained Atomic AI’s CEO and founder, Raphael Townshend. “There’s this central dogma that DNA goes to RNA, which goes to proteins. But it’s emerged in recent years that it does much more than just encode information,” he said in an interview with TechCrunch. “If you look at the human genome, about 2% becomes protein at some point. But 80 percent becomes RNA. And it’s doing… who knows what? It’s vastly underexplored.” Compared to DNA and proteins, little work has been done in this area. Academia has focused on other pieces of the puzzle and pharmaceuticals have, partly as a consequence of that, pursued proteins as the mechanisms for drugs. The result is a severe lack of knowledge and data on RNA structures. But what Atomic AI posits is that RNA is functional and worth pursuing as a method of treatment. The secret is in the “non-coding” regions of RNA, which are like the header and footer on a document. They do protein-like work but aren’t proteins — and they’re not the only example. You can think about RNA strands as beaded necklaces, much more string than bead. The string is “floppy” and more or less what its detractors think it is: an intermediary. But every once in a while you get a really interesting knot that seems unlikely to have formed by accident. As with proteins, if you can figure out their structure, that goes a long way towards understanding what they do and how they can be affected. “The key is to find those beads, those structured bits. It’s high information content, it’s targetable, and it’s likely functional as well,” said Townshend. “It’s seen in drug discovery as a key new frontier.” An interesting idea for a graduate thesis, perhaps (and it was for Townshend), but how can you build a business around it? First, if the field is about to become more important, building out the methods for studying has a lot of value. Then, if you do build those methods, you can be first in line to use them. Atomic AI is doing both simultaneously. A rotating 3D model of an RNA strand structure predicted by PARSE. The core of Atomic’s IP is, though this is something of a simplification, an AlphaFold for RNA. The biology is different, and the way the models work is different, but the idea is the same: a machine learning model trained on a limited set of a type of molecule that can make accurate predictions about the structure of other molecules of that type. What’s wild is that Townshend’s team made just such a model, which outperforms others by a large margin, by feeding it the characteristics of just 18 RNA molecule structures “published between 1994 and 2006.” This absolutely bare-bones model wiped the floor with others, as disclosed in a front-page article published in Science in 2021. Since then, Townshend was quick to add, the company has vastly augmented its models and methods with more raw material, much of which it has created itself in its own wet labs. They call the updated set of tools PARSE: Platform for AI-driven RNA Structure Exploration. “The Science paper represented an initial breakthrough, but we have actually generated a huge amount of… structure- data,” he explained. “Not the full structure itself, but data related to the structure, tens of millions data points; the same scale of data you’d need to train big language models. And combined with other machine learning work, we have been able to dramatically improve both the speed and accuracy from the paper.” That means Atomic AI is the only one who, publicly at least, has a system that can take a RNA molecule’s raw data in and spit out a reasonably confident estimate of its structure. That’s useful to anyone doing RNA research in or out of medicine, and with gene therapies and mRNA vaccines, the field is definitely on the rise. Another RNA structure (but rendered differently). With such a tool you could go one of two ways: license it as a “structure as a service” platform, as Townshend put it, or use it yourself. Atomic has opted for the latter, and is pursuing its own drug discovery program. This approach has a notable difference from a lot of the AI discovery processes out there. The general idea is you have a protein, say one you want to inhibit expression of in the human body, but what you don’t have is a chemical that binds reliably and exclusively to that protein, exactly where and when you want it to (and cheaply, if possible). AI drug discovery efforts tend to produce thousands, millions, even billions of candidate molecules that work, rank them, and let the wet labs start working through the list as fast as they can. If you can find one that meets those above characteristics, you can produce a novel drug or replace a more expensive one on the market. But the key thing is you’re competing to find new binders to a known protein. “We’re not just finding binders, we’re finding what’s targetable in the first place. The reason that’s interesting is because at the end of the day, these big pharmaceuticals care more about novel biology than novel molecules. You’re enabling something that wasn’t doable before by finding this new target, as opposed to augmenting the number of molecules available to target it,” said Townshend. Not only that, but some proteins have been found to be nigh undruggable for whatever reason, producing illnesses resistant to medication. RNA could allow treatment of these same illnesses by making an end run around the problem protein. For the present, Atomic AI has narrowed down the list to certain cancers that result in pathological overproduction of proteins (and hence good options for preempting the mechanism), and neurodegenerative diseases that may also benefit from upstream intervention. Of course all this work is immensely costly, necessitating as it does a large amount of both lab work and intense data science. Fortunately the company has raised a $35 million A round, led by Playground Global, with participation from 8VC, Factory HQ, Greylock, NotBoring, AME Cloud Ventures, as well as angels Nat Friedman, Doug Mohr, Neal Khosla, and Patrick Hsu. (The company previously raised a $7 million seed round.) “People have picked all the low-hanging fruit in protein land,” said Townshend. “Now there’s new biology to go after.”

Gemba, a corporate VR training platform used by Coca-Cola and Pfizer, raises $18M

Paul Sawers

, an enterprise-focused virtual reality (VR) training startup used by some of the world’s biggest companies, has raised $18 million in a Series A round of funding. Gemba designs and delivers so-called virtual “ ” spanning subject matters such as and  , working in conjunction with experts from the respective fields to deliver the courses which can run over several days. The core selling point behind Gemba’s programs is that they are designed to be as life-like as possible, which means that they are delivered live and can facilitate real-time interactions between all the participants. “A Gemba masterclass is entirely interactive — it’s 3D, immersive, and we use the same software that 90% of video games are created in ( ),” Gemba CEO Nathan Robinson told TechCrunch. “In Gemba, you can freely walk around, grab objects, participate in simulations -– you can do everything you can do in real life, plus a load more that you can’t do in real life.” All participants have a corresponding avatar, and they can join from pretty much anywhere they wish, including their office or home living room. “A typical masterclass has 25 senior executives attending from cross-sector companies, such as VPs from Pfizer, Nike, Adidas, Dell, Volvo, Roche and more,” Robinson added. “It has one masterclass leader who is a recognized subject matter expert, and two guest speakers from companies like Amazon and AstraZeneca.” Gemba in action While Gemba’s software currently only works with , which it provides as part of the package, the company said that it’s working to expand its support to all popular VR and AR devices throughout 2023. While spurred by companies such as Facebook’s parent Meta may be somewhat premature, it’s clear that VR, AR, and mixed reality have been gaining at least a little more traction outside of gaming circles in recent times — the pandemic may have played a part in this. Training in particular remains a central focus for many current VR applications, and investors have been taking note. Last month, for example, to tackle helicopter pilot shortage with VR training, while medical simulation platform to help surgeons learn through VR. And then there’s VRAI, which to bring VR simulation training to hazardous industries such as the offshore wind sector. Founded back in 2010 initially as an executive training company called The Leadership Network, London-based Gemba rebranded to its current name last April as part of an ongoing transition away from its legacy training business. While the pandemic may have bolstered Gemba’s ambitions in the VR space, it had in fact started to shift its focus some years previous, as it sought new ways to capture the knowledge from its training courses and scale it to thousands of users. Indeed, the company delivered its first VR enterprise training in 2019, with its masterclasses kicking off the following year. “From inception to completion, this process has taken more than five years,” Robinson said. “In 2017, VR was still clunky, challenging, and only really being used in niche gaming, but all the ingredients for the metaverse were there. What we saw was a once-in-a-generation opportunity to create immersive learning that feels as good as a face-to-face experience, with limitless creative possibilities, all the efficiencies of a digital platform, and huge environmental and societal benefits for a changing workforce.” Gemba in action All its research and development through the pivot to VR was essentially self-funded from the profits it made from its traditional training programs, but now it’s looking to ramp things up and build on a foundation that has seen it garner major customers including Coca-Cola, Johnson & Johnson, Pfizer, and Nike, each of which started out as Gemba customers in its traditional in-person training business before transitioning with Gemba to the VR realm. The core selling point for customers is that VR helps them eliminate travel time and costs, and also meet whatever corporate carbon-cutting commitments they may have in place. However, Gemba’s courses aren’t exactly cheap, with each masterclass costing around $7,250 per person per program, though enterprise subscriptions are available starting at around $120,000 for a 50-person team each year, going all the way up to $1.2 million for larger scale rollouts. Participants also get to keep their Meta Quest headset at the end of the program, though with the enterprise subscription plan companies buy the headsets separately and re-uses them on future programs. With $18 million in the bank, representing its first ever external funding, Gemba said that it plans to expedite its growth across the EMEA region and eventually expand into the North American market. Indeed, Gemba’s Series A round was led by New York-based Parkway Venture Capital, which has previously invested in the likes of Lyft, Intel-owned Mobileye, Coursera, and China’s Didi.

Crowdbotics raises $40M to help devs build apps from modular code

Kyle Wiggers

, a software development platform with a library of prebuilt app architectures, today announced that it raised $40 million in a Series B round led by NEA with participation from Homebrew, JSV, Harrison Metal and Cooley. The new cash will be put toward expanding Crowdbotics’ enterprise presence, CEO Anand Kulkarni told TechCrunch in an email interview, as well as growing the company’s product offerings and invest in helping increasing its current customer base. Kulkarni founded Crowdbotics in 2017 after launching LeadGenius, which used AI to crawl the web and discover sales leads. With Crowdbotics, he sought to create a catalog of reusable modules of code to simplify the process of planning and deploying software. “Because up to 80% of requirements are similar between software applications — things like single sign-on flows or payment gateways don’t vary much between products — customers can build applications using strategies and reusable modules of code that have worked in the past, and focus custom engineering efforts just on the parts of their application that are truly unique,” Kulkarni said. “Customers specify custom software products using our planning engine, which is powered by a growing repository of historical data about how applications are built. Customers can convert these specifications into code on Crowdbotics, typically in React, React Native and Django, and deploy applications into the web, Android and iOS app stores, or on-premise environments, with staging and production workflows included.” Kulkarni thinks of Crowdbotics as a sort of ERP for software creation. ERP, or enterprise resource planning, is a type of system that helps organizations automate and manage core business processes. Instead of business processes, Crowdbotics orchestrates the management of processes, helping keep app development in line and — with any luck — on time. Crowdbotics On the surface, the idea isn’t dissimilar to , which converts visual app elements into structured, readable and modular code that can be later built upon for scalability. In terms of potential rivals, there’s also , which offers an open source platform for internal development teams to build custom apps, and and , which lets developers add enterprise features like single sign-on (SSO) and directory sync to apps, “We’re displacing last-generation app-building tools like Microsoft PowerApps and Mendix,” Kulkarni said confidently. “Crowdbotics prices based on the number of features in the application irrespective of the number of users … [and] lets developers work directly in open source software development frameworks like React Native and Django, and also lets CIOs set and enforce their own standards for development and security — generating readable code.” Kulkarni says that most enterprises on Crowdbotics create a private module library on the platform, categorizing their own organization’s reusable components of code plus data. Developers can use these private module libraries to rapidly generate their own IT-approved feature libraries that can be maintained and repurposed across the org. Or they can hire project managers and developers from Crowdbotics’ gig marketplace, paying a monthly subscription for hosting, infrastructure, maintenance, monitoring and more. “By reusing standardized, well-supported architectures and quickly snapping together modules of interoperable code, customers can build stable apps quickly, or have applications built to their specifications,” Kulkarni added. “By decreasing development time and budget, and facilitating code reuse at scale, while playing nice with an organization’s own standards, there are benefits to the CTO, CIO and other IT department heads that directly impact their performance and their department’s bottom line.” There might be a bit of hyperbole there. But Crowdbotics, which has raised over $68 million in funding to date, certainly hasn’t failed to nab customers. The startup claims to have over 500, the largest being the U.S. Air Force, which is using Crowdbotics to build flight analysis and training tools. Kulkarni says that Crowdbotics’ revenue has been tripling year-over-year for the past three years and that its 90-person workforce is on track to double by year-end 2023. “Right now the changing economy is looming over most businesses, and making sure capital isn’t wasted will be a critical concern. Crowdbotics is positioned to help by allowing organizations to be more strategic and efficient with their development resources,” Kulkarni said. “Not only does it reduce overall cost and overhead, but also creates a path for code reuse, ensuring all future development carries the same cost efficiencies … We’ve seen accelerating impact from the pandemic as digital transformation initiatives moved to the forefront of every company’s strategy, and we expect business to continue to grow even in 2023’s market as companies start to look to use code reuse to reduce software development costs and turn to Crowdbotics.”

Dubai-based accounting and financial compliance startup, Wafeq, raises $3M

Annie Njanja

In 2016, the Gulf Cooperation Council (GCC) member states signed a value added tax (VAT) agreement paving the way for the introduction of the general levy on consumption across the region. The United Arabs Emirates (UAE) and Saudi Arabia became the first member states to adopt the treaty in 2018, and its implementation meant that for the first time businesses in these territories were required to file VAT returns periodically. , a UAE resident, says he immediately saw an opportunity in the accounting space as businesses sought to file returns as required by the new law. This inspired him to launch in 2019, a startup that initially offered accounting services and later, in 2021, launched a scalable accounting and e-invoicing SaaS solution focused on clients in UAE and Saudi Arabia. Wafeq is now exploring new growth opportunities in Egypt while doubling down on its existing markets as businesses comply with evolving accounting and financial requirements. The growth plans follow a $3 million seed funding it has secured in a round led by Raed Ventures and participated by Wamda Capital. “There are regulatory changes happening in Saudi Arabia and Egypt, and that is what we are trying to capitalize on at the moment … we are also doubling down on our existing markets, where we already have good traction,” Alameddine told TechCrunch. Egypt and Saudi Arabia currently require businesses to be e-invoicing compliant, which he says has led to a surge in demand for accounting software, which Wafeq is tapping through its enterprise (API) product. Wafeq is a ratified provider in Saudi Arabia, and the UAE (e-invoicing is not mandatory there yet). The startup is in the process of seeking approval from the Egyptian Tax Authority too. Alameddine said the North African country offers massive opportunities for the startup as it is home to millions of small medium businesses. Wafeq says its powering accounting and financial compliance for SMEs. Wafeq Its accounting platform, on the other hand, makes it easy for clients to generate their VAT returns, manage inventory, payrolls, bills and track expenses. It also generates actionable financial reports and insights for businesses. “We position ourselves as a full accounting software for SMEs, and we offer three different plans serving businesses looking to send compliant invoices, manage their accounts payable or those seeking a full accounting solution that includes inventory management and payroll services,” said Alameddine. Currently, over 630,000 invoices are created every month through its platform, with the total monthly invoiced amounts exceeding $117 million. They anticipate this to grow enormously in the wake of its growth plans. Commenting on the deal, Talal Alasmari, the founding partner of Raed Ventures said, “We are thrilled to back Wafeq as they solve a problem that impacts thousands of businesses in the region. The digitalization of accounting practices will truly transform how SMEs here operate, increasing operational transparency, creating efficiencies and contributing to economic growth.”

Emperia is helping brands like Bloomingdales build shopping experiences in VR

Kyle Wiggers

Does the average person want to shop for apparel in virtual reality (VR)? Speaking for myself, it sounds rather cumbersome — having to plop on a headset to browse for, say, trousers as opposed to click through a few galleries. But not everyone agrees — particularly those who hope to build a business out of VR retail. Enter , an “immersive” retail startup that — to its credit — has already created virtual stores for brands including Bloomingdales, Dior, Ralph Lauren and Lacoste. Launched in 2019, the idea came from one of the co-founders, Olga Dogadkina, who previously worked in the luxury retail sector. “It became clear to me that while e-commerce was the future of retail, 2D websites were merely a tool that enabled an online purchase through a simple grid of images and text but lacked the customer journey, storytelling and the ability to provide the customer experience and product discovery retailers’ physical stores strive to achieve,” Dogadkina told TechCrunch in an email interview. “My other co-founder, Simonas Holcmann, and I launched Emperia to bridge the gap between the transactional nature of an e-commerce purchase and the personalized shopping experience brands can cultivate in store.” platform offers tools brands can use to create virtual experiences, including stores in VR. It integrates with existing e-commerce and stock management software, tracking demographics, store activity and purchases. With Emperia, brands can put on live events with hosts that walk them through a virtual space, or customize exhibits and displays with 3D models and images of real-world inventory. “Visitors” to Emperia’s virtual spaces don’t have to wear a VR headset, crucially. The platform — which can be embedded in existing websites — supports phones, laptops and tablets and doesn’t require installing an app or software. “Using technology, Emperia aims to make virtual worlds into the future of e-commerce, expanding the reach to new and future online shoppers, increasing brand loyalty and creating a complete new shopping experience,” Dogadkina said. “Emperia works directly with retailers’ heads of e-commerce, solving user experience, data analysis and online engagement issues they’ve been struggling with from the inception of e-commerce, by providing a new solution that leverages virtual worlds’ ability to equate and exceed the in-store customer experience and appeal to new target audiences, who use their mobile devices as getaway to retail.” Emperia collects a lot of data — data that not every shopper might be comfortable sharing. Studies that many VR and “metaverse” platforms record info that could be used to identify a person, even if their data is de-identified on-device. A virtual store created with Emperia’s platform. Emperia Dogadkina asserts that Emperia only collects engagement, transaction and demographics data to give brands “visibility over how users are navigating and engaging in [their] virtual spaces.” She also notes the data — which she claims isn’t personally identifiable — is stored for “a limited time,” in compliance with GDPR rules. On the horizon for Emperia are new verticals and better personalization tools, Dogadkina says. The startup’s experimenting with machine learning as well, focusing on the tech’s ability to create visuals and 360-degree videos for product demos. “This is a nascent industry and so there is a lot of both market and user education involved in introducing people to this technology and ensuring brands can capitalize on its potential,” Dogadkina said. “As a relatively new industry, retailers find themselves needing to search out multiple solutions in order to build and design their virtual worlds. While rich in solutions, from data to security, 3D modeling and digital tokens, to a wide variety of metaverse platforms, each with its own audience and specific capabilities, the choices are all out there but integrating them all together is a daunting task. That’s one of the driving forces behind our desire to bring complementing solutions under one roof.” But will VR have staying power — and is retail in VR actually catching on? Perhaps so. According to an August 2022 from PwC, around a third of consumers had tried a VR app in the last six months, and — of those consumers — 32% bought products after checking them out in VR. A separate of over 2,000 U.S. shoppers, taken in November 2022, found that roughly 37% planned to shop using VR and augmented reality. On the other hand, a Deloitte from September found that just 5% of U.S. internet users were expected to shop in VR ahead of the 2022 holiday season. Highlighting the pressure platform developers face, AltspaceVR, one of the first social applications of VR, was sunsetted by parent company Microsoft. Dogadkina is choosing to believe the optimistic predictions — and has some reason to. Despite competition from vendors like Obsess and ByondXR, Emperia has 45 customers across sectors including fashion, beauty, luxury apparel and sports. It’s also attracted a $10 million Series A investment led by Base10 Partners, joined by Daphni, Sony Ventures, Background Capital, Stanford Capital Partners and Concept Ventures. Emperia expects to grow the size of its workforce from 40 people to 120 by the end of the year. Emperia “The pandemic definitely accelerated awareness amongst retailers of what immersive, tech-powered e-commerce experiences could do and the role they could play in their sales strategy,” Dogadkina said. “The earlier marketing hype, which was campaign-dependent, short-lived virtual space has now become a permanent, long-term e-commerce solution, which is treated as a ‘flagship virtual store.’ Retailers are much more experienced, with specific roles within those organizations specializing and overseeing the creation and maintenance of these spaces, with the understanding that the virtual store is a completely new experience, different to the physical store environment, which presents a true opportunity to expand the brand’s appeal to the shoppers of the future.”

Twitter won’t force you to the ‘For You’ timeline on web anymore

Ivan Mehta

In another flip-flop move, Twitter says that it will now remember the feed — the algorithmic “For You” or chronological “Following” — its users have chosen on the web. This change will give relief to many who had complained that the social network showed them the algorithmic timeline by default each time they visited the service. The move is the latest in a series of changes Twitter has made to its implementation of the dual timeline in recent days. It first made on iOS earlier this month. On the web, things are a little more confusing. Twitter also added that a similar update will be rolled out to the Twitter iOS and Android apps. So soon there will be no more algorithmic timeline as default on mobile apps either. Were any of you (all of you) asking for your timeline to default to where you left it last? Starting today on web, if you close Twitter on the “For you” or “Following” tabs, you will return to whichever timeline you had open last. iOS and Android coming soon! — Twitter Support (@TwitterSupport) Many power Twitter users who used third-party Twitter apps never had to deal with the algorithmic timeline. But now that Elon Musk & co. have , users have no option but to use the official Twitter app or website. This week’s move goes into the growing file of reversed decisions under Musk. The file includes and removing terms that prohibited users from .

Scrintal raises $1 million for its visual collaboration tool

Haje Jan Kamps

Founded by Ece Kural and Furkan Bayraktar,  is a visual note-taking and collaboration tool. The Sweden-based company’s product combines visual canvases with documentation to help professionals and teams go from idea to presentable work on the same screen — think Miro meets Notion meets a slew of other tools companies use to keep their knowledge in one place and their projects pointed more or less in the right direction. The company today told TechCrunch it closed a €1 million round (around $1 million in today’s exchange rate) led by Spintop Ventures, and joined by existing investor Icebreaker VC. “We’re creating a new category in work tools; a visual knowledge base. Our company was born out of the real-life struggle we experienced ourselves. When I was finishing my PhD at Stockholm University I realized I needed a more visual way of working,” says Ece Kural, co-founder and CEO of Scrintal. The company told TechCrunch it will use the funding for launching the app, along with accelerating commercialization and product development. The company says it has more than 40,000 interested folks on its waitlist.

Hear how Cambly found profits after failing to raise a Series A on TechCrunch Live

Matt Burns

! I’m thrilled to bring this event series back for its third season. We’re booked for months, and I’m delighted to host the upcoming guests. TCL’s mission is still to help founders build better venture-backed businesses. But going into 2023, there’s new urgency behind this mission. TechCrunch Live started in the heady days of 2021, and now in early 2023, the startup world is experiencing new challenges. It’s harder to fundraise, sales cycles are much longer, and investors (and their LPs) have different expectations. Our first guests are , CEO and co-founder of Cambly, and , a long-time investor at Benchmark and previously Greylock. They’re the perfect guests to kick off the third season of TCL! Cambly looks like a sure bet right now, but as you’ll hear from Sameer, it was a struggle to get to this point. After failing to raise a Series A, the company had to change its model overnight. When VC after VC said no, Cambly had to find a way to make a profit to keep the doors open. Since then, the company went on to raise a $15 million Series A and a $40 million Series B, but only because the company took the hard steps to seek profitability earlier than expected. Cambly’s Series B fundraise went wildly different from its Series A, and I hope you can join the live event to hear the lessons Sameer learned from both rounds. Sarah Tavel led Benchmark’s investment and can speak to what made Cambly a perfect fit for the firm — and you’ll hear from Sameer on why Benchmark was an ideal fit for Cambly too. Join the live event on Hopin, and ask questions in the chat. I’ll do my best to ask them when possible. Can’t make the live event, but can listen to the replay/podcast? , and I’ll be sure to ask your questions. Pitch Practice is back! Apply to present your company using this . We’ll select 3 companies to pitch during the show, including 1 wildcard company that will be selected from our Hopin audience during the episode.

Daily Crunch: Hackers pinched LastPass customers’ encrypted password vaults, parent company admits

Christine Hall

What’s up, Crunchers? Good to see you again! We’re so glad to have you with us. It’s been a really busy day on the site today, and for not recording the car crash he was in today. (He’s fine. Or at least, as fine as he was before the car crash.)  — and It’s a tough time to be a richly priced company that didn’t go public when the getting was good. Not only are there fewer later-stage players with the resources and appetite to support such companies (e.g., SoftBank and Tiger Global have pulled back dramatically), but also secondary investors have even lost interest. At least, that’s ’s read of a new report, in her excellent article .  also reported that . The outfit garnered $140 million in commitments for its fourth flagship fund and another $120 million for its first opportunity-type fund (its “Mustang Fund”). And we have five more for you: / Getty Images Successful deep tech startups and SaaS companies generally reach billion-dollar valuations in the same time frame. “The median deep tech startup took $115 million and 5.2 years to become a unicorn,” says Karthee Madasamy, managing partner at MFV Partners. New companies in this sector raised around $600 million last year, a steep decline from $800 million in 2021. But Madasamy says recent climate regulation, automation and space are just a few factors stirring investors’ interest during this downturn. “As it becomes increasingly difficult to realize big exits in the years ahead, the technologies within deep tech that are transforming entire industries offer some of the only paths to ’10x exits.'” Three more from the TC+ team: Selling or renting a home comes with all sorts of fun, including having to vacate at a moment’s notice and strangers walking around your home. If there could be a rainbow amid the rainstorm, it’s Zillow wanting to make booking a home tour for rentals easier. Enter its that can be used without having to get in contact with anyone. writes that the feature is already available for thousands of properties and will eventually include the ability to choose between a virtual, in-person or self-guided tour. Now here’s five more:

VC deal activity fell in 2022, signaling tough times ahead

Kyle Wiggers

to dog startups chasing venture backing. That’s the top-level finding of a new PitchBook report that looked at VC trends toward the end of 2022, specifically Q4, including investments made at the seed, late-stage and nearing-the-exit levels. First, the good news: “On an annual basis, angel- and seed-stage deal activity remained relatively resilient in 2022, with $21.0 billion invested across an estimated 7,261 deals,” the report said. Last year set an annual record for capital raised, in fact, with $162.6 billion closed across 769 funds — the second consecutive year to exceed $150 billion. But the year was ultimately mixed. Q4 2022 marked the fourth consecutive quarter of declining deal counts while exit activity for the entire year fell to $71.4 billion — the first time the figure dipped below $100 billion since 2016. Acquisition volume also took a nosedive, with Q4 posting only $763 million in total acquisition deal value — the lowest quarterly value in more than a decade. “Public exits of VC-backed companies have slowed to almost nonexistent levels, with just 14 public listings occurring in Q4, demonstrating how drastically institutional-investor appetite has been affected by rising interest rates and volatile macroeconomic factors,” the authors of the PitchBook report wrote. Why the instability? PitchBook blames a variety of factors, including nontraditional investors slowing their capital deployment to VC amid less attractive risk/return profiles. According to the report, relative to 2021, the upside potential for VC-backed startups fell precipitously in 2022, which turned many investors away from the space.

Carta, previously sued for gender discrimination, is now suing its former CTO

Connie Loizos

, the 11-year-old, San Francisco-based outfit whose core business is selling software to investors to track their portfolios, has sued its former CTO, Jerry Talton, who the company says was fired “for cause” almost three weeks ago, on Friday, December 23. In its , Carta is suing Talton for damages, citing “his wrongful and illegal acts as an executive of Carta” and suggesting he betrayed the company despite being given a role that came with “hundreds of thousands of dollars in salary and benefits, and substantial equity awards.” On first read, it sounds like a company throwing the kitchen sink at a would-be whistleblower whose tactics were ham-handed (and illegal, says Carta). Specifically, according to the complaint, Talton was put on administrative leave in October of last year after submitting a letter to Carta’s board of directors, flagging various “problems” with the company’s culture. Carta says Talton’s leave was meant to enable the board to “facilitate” an “independent” investigation, but that during that period, the company discovered that Talton had preserved audio recordings of workplace-video meetings with Carta’s general counsel without her knowledge. How? According to the complaint: “[D]uring a confidential mediation involving a female former Carta employee (a mediation to which Talton was not a party), on November 8, 2022, Carta’s General Counsel April Lindauer was copied on an email from Talton to that former employee and her counsel, seemingly by mistake, stating ‘I think you should read the whole thing’ and including a transcript of an audio recording between Talton and Lindauer from September 27, 2022. The email also included an indication that the audio recording was uploaded to the file-sharing platform, DropBox.” Oops. The company says it subsequently demanded that Talton return all recordings and transcripts and other Carta property to Carta and that he also provide copies of all recordings and transcripts to “company-authorized investigators.” Talton, who Carta believes “also surreptitiously recorded at least two members of Carta’s Board of Directors, as well as Carta’s Founder and CEO, and other Carta executives and employees,” said no. We reached out to both Carta and Talton earlier this evening for comment; neither had responded as of our publication time. A spokesperson separately told the San Francisco Business Times that Carta co-founder and CEO Henry Ward is serving as until the position is filled. The lawsuit appears likely to damage both parties. Toward the end of Carta’s long list of accusations against Talton, Carta says that Talton both sent and received “sexually explicit, offensive, discriminatory and harassing messages with at least nine women including during work hours and on Carta’s systems,” and that Talton sought and obtained “benefits and privileges to which he was not entitled, including without limitation, misuse of his corporate credit card for personal matters, and repeated attempts to book travel outside of company policy.” Before Carta, Talton — who has a PhD in computer science from Stanford and two degrees from the University of Illinois at Urbana-Champaign — spent a year-and-a-half as an engineering manager at Slack. He also co-founded a since-shuttered software startup that was by NEA and Andreessen Horowitz, and spent two years as a research scientist at Intel, according to LinkedIn. He joined Carta as a director of engineering in 2018 and was promoted to CTO in 2020. Carta meanwhile has previously been flagged for having a”culture” problem. In 2020, the company’s former VP of marketing Carta, accusing the outfit of gender discrimination, retaliation, wrongful termination and of violating the California Equal Pay Act. (We featured that case .) Soon after, four employees spoke on the record with The New York Times, telling the outlet that when they voiced concerns about the way the company is run, they were . The problem appears to extend to the company’s treatment of some of its customers. Several who TechCrunch interviewed over the last couple of months have expressed dissatisfaction with Carta and the service they have received from its representatives. One, a fund manager who is in the midst of transitioning off the platform currently, told this editor last week that his team had “four different account managers in the less than a two-year engagement at Carta; it certainly didn’t help with continuity and understanding of our fund and needs.” A separate fund manager who we interviewed last week complained of a “lack of communication internally,” saying that it’s “like working with four service providers.” Carta will “ask you for a document that they have on file and should know that they have on file,” she said. “I shouldn’t have to keep track; that’s why I’m paying for fund administration. They’ll tell you to check out ‘the portal’ and the portal is terrible.” It’s “miserable,” this person added. “It’s like a tech-first solution to a service industry and I think they need an awakening.” Carta has roughly 2,000 employees, judging by its LinkedIn profile, though that number is presumably lower in reality. Carta laid off 16% of its employees during the height of the pandemic; last month, according to a conversation posted to the anonymous professional network Blind, Ward told employees that another layoff was . The layoff, TechCrunch confirmed after publication of this story, impacted 10% of the staff, or 200 employees. Carta has raised $1.1 billion altogether from investors, according to Crunchbase. It announced its eighth and most recent round of funding in August 2021: a $500 million Series G that was led by Silver Lake and valued the company at In addition to Silver Lake, some of its biggest backers include Spark Capital, Social Capital, Menlo Ventures and Andreessen Horowitz.

Crime-reporting app Citizen lays off 33 employees

Amanda Silberling

Citizen laid off 33 staff members on Wednesday, the company confirmed to TechCrunch. “We are grateful to all of our departing team members for their contributions to Citizen and are committed to supporting them through this transition with a generous severance package that includes accelerated option vesting and extended exercise window, six months of COBRA payments, career services support and other benefits,” a spokesperson told TechCrunch. Citizen did not share what departments at the company were impacted; one laid off employee told TechCrunch that at least 10 engineers were let go. Launched in 2016, the app was initially over concerns about vigilantism — it was called Vigilante at the time. Now, Citizen uses public police blotters to notify users about verified incidents in their area, but users can upload their own reports of suspicious activity and livestream from crime scenes as well. According to data from SensorTower, an app analytics firm, Citizen has seen about $30.3 million in consumer spending and over 14 million downloads since its launch. The private company most recently raised a $73 million Series C funding round in early 2021, which included a $23 million convertible note. Citizen has been criticized for encouraging a culture of surveillance that lends itself to and harassment; another neighborhood social app has exhibited similar issues. But the most egregious example of these dangers came from the company’s CEO himself. In 2021, Andrew Frame offered Citizen users $30,000 to track down a suspected arsonist while livestreaming on the Citizen app. He shared a photo of the suspect on a live feed which racked up 800,000 views, but it turned out he had the wrong guy. According to from Motherboard, Frame saw this as an elaborate marketing opportunity for the app’s livestream feature. “We deeply regret our mistake and are working to improve our internal processes to prevent this from happening again,” the company  at the time. Later that year, Citizen launched a service called Protect. For $20 per month, users get 24/7 access to a “protect agent” who can connect them with first responders or police. But critics have questioned whether Citizen’s alerts more than they keep people safe — and that fear can encourage people to purchase access to their own personal security agent. According to SensorTower data, in-app purchases on Citizen increased 17% year over year after the introduction of Protect. But Citizen saw an average of $1.4 million in monthly spending on its app in 2022, which likely isn’t enough to make the company profitable. Citizen did not share a reason for conducting layoffs, but letting go of 33 employees could afford the company a bit more runway. According to its , Citizen is currently hiring for five roles.

Career Karma’s latest layoff underscores edtech’s new challenge

Natasha Mascarenhas

has laid off another 22 people across its global and domestic workforce, less than five according to sources. CEO and co-founder confirmed the workforce reduction to TechCrunch. shows that even as many edtech companies attempt to right-size their staff, there’s more work to do. Harris’ e-mail to remaining staff underscores the tension of today: Once eager enterprise customers are still making up their minds on whether or not to sign up for new tools, leading to extended sales cycles and uncertainty. “Last year, we made the decision to right-size the company so that we can orient Career Karma toward working with employers and now that we have started to sign customers it’s clear that we made the right decision,” Harris wrote in the email. “What’s unclear is how Fortune 1000 companies will be responding to the macroeconomic environment and it’s important for us to give ourselves time to work with them to figure that out.” As the market evolves, Career Karma’s service of matching employees or professionals to tech bootcamps is being put in a difficult place. Just last month, BloomTech, a coding bootcamp previously known as Lambda School, in pursuit of profitability. During Career Karma’s last cut, Harris emphasized that the layoff and its would extend the startup’s runway to three years. After laying off staff this week, Career Karma now has five years of runway. , the strategy of “extending your runway” always comes into vogue whenever investors slow down investing. Career Karma’s shift from the basic three-year rule of thumb to five years shows how that rule may become even more conservative as the downturn continues. Over email, Harris tells TechCrunch that he “always [wants] to have the option to raise … I just don’t want to be forced to raise.” With 80 staff now remaining at Career Karma, Harris confirmed that no C-suite executives were impacted by the layoff. Those impacted were offered two months of severance as well as extended benefits. The career navigation platform also, fittingly, offered career navigation support to its new alumni.

News aggregator SmartNews lays off 40% of US and China staff, with further reductions planned in Japan

Sarah Perez

, a Tokyo-headquartered news aggregation website and app valued at , today announced a 40% reduction of its U.S. and China workforce, or around 120 people, according to sources familiar with the company’s plans. The news was announced on Thursday in an all-hands meeting attended this evening by SmartNews staff. The company confirmed the layoffs to TechCrunch, saying the “current economic conditions” were to blame. Impacted roles in the U.S. and China include those in engineering, product and data science, we understand. SmartNews employees in Japan, meanwhile, will soon undergo a “voluntary departure program,” but they weren’t yet offered specifics about what that will entail. Laid-off employees will be offered standard severance packages and benefits. In the meeting, staff were told they’d get an email within 15 minutes if they were among those being let go. In total, SmartNews employs nearly 900 people, including its contract workforce, one-third of which work outside Japan. Sources also told TechCrunch that the company had opted to close its U.S. offices for two days, Thursday and Friday, without giving a reason, which worried employees ahead of the remotely streamed all-hands meeting. “This isn’t your fault and I am sorry to see you leave,” remarked SmartNews CEO Ken Suzuki, when making the announcement. After the announcement was made, the meeting quickly ended, leaving no time for Q&A, frustrating some staff. Founded in 2012 in Japan, the company arrived in the U.S. in 2014 and in early 2020 to cover thousands of U.S. cities. It has relationships with more than 3,000 global publishing partners whose content is available through its service on the web and mobile devices. In its markets, the app grew to become a top news aggregator due to how it personalizes the reader’s experience using machine learning technology to pick which articles are displayed. In the U.S., it also differentiated itself from others with a “News From All Sides” feature, which allows users to access news from across a range of political perspectives. In addition, during high-profile events like the COVID-19 pandemic or U.S. elections, SmartNews would offer in-app dashboards that offered critical information at a glance. Sensor Tower The company managed to attract investors, raising more than $400 million since its founding in 2012, despite hefty competition from built-in aggregators like Apple News and Google News, on iOS and Android. In its most recent funding round, a Series F, investors poured in $230 million into the business, valuing it as a “double unicorn” ($2 billion), the company’s press release stated. New included U.S.-based Princeville Capital and Woodline Partners, as well as JIC Venture Growth Investments, Green Co-Invest Investment and Yamauchi-No.10 Family Office in Japan. Existing backers ACA Investments and SMBC Venture Capital also participated. The SmartNews app globally reached 30 million monthly active users, with 20 million in Japan and 10 million in the United States, we understand. However, those numbers have been trending down in both markets by around 10-20%, a source said. Since January 2014, SmartNews reached nearly 81 million worldwide installs from across the App Store and Google Play, according to estimates from Sensor Tower. As of 2022, its biggest markets by downloads were Japan (58%) and the U.S. (38%), Sensor Tower said. SmartNews, unfortunately, was impacted by the same macroeconomic factors that have led to a number of tech industry layoffs in recent months, in addition to complications that arose from Apple’s implementation of , or ATT. The iOS new privacy measure introduced in 2021 hurt companies whose business models relied on advertising, , while Apple’s own ads business. The company could have gone public back in 2019, but leadership pressed for additional funding and a higher valuation. Now that opportunity could be slipping. Reached for comment, SmartNews confirmed the layoffs and offered the following statement: Unfortunately, we are not immune to the current economic conditions that have negatively affected so many businesses. In order to maintain the health of our company and to ensure future growth, we decided to conduct a reorganization that has impacted many of our incredible employees. This was a last resort decision for us, and we hope the severance packages and career transition management services offered to impacted employees will help in their search for a new role. Although our earlier report had cited staff reductions of around 40%, we’re now hearing the layoffs have since gone much deeper. Sources at the company, including current and former employees, tell us that SmartNews had somewhere north of 145 employees in the U.S., and now it has only around 60 — which means around 85 U.S. employees were laid off. Another source had a slightly different figure of 74 U.S. employees laid off. One source alleged SmartNews has been trying to keep these further cuts quiet, but the impacted staff has included full teams across media and engineering — even managers, in some cases. Employees were offered 3 months’ severance and the package included healthcare. We understand the layoffs in Japan are ongoing, as the company is trying to force voluntary layoffs there. SmartNews declined to comment on these claims saying it had nothing more to share than its original statement (above).

Sam Bankman-Fried launches Substack: ‘I didn’t steal funds, and I certainly didn’t stash billions away’

Mary Ann Azevedo

FTX founder and former CEO Sam Bankman-Fried launched his own newsletter today, in a very unusual move for someone who was recently and is facing eight counts of U.S. criminal charges. In a post titled “FTX Pre-Mortem Overview,” Bankman-Fried maintains his innocence surrounding the collapse and of FTX, a cryptocurrency exchange he founded in 2019 that went on to raise $2 billion in funding and achieve a valuation of a staggering $32 billion. He wrote: I didn’t steal funds, and I certainly didn’t stash billions away. Nearly all of my assets were and still are utilizable to backstop FTX customers. I have, for instance, offered to contribute nearly all of my personal shares in Robinhood to customers — or 100%, if the Chapter 11 team would honor my D&O legal expense indemnification. When Bankman-Fried stepped down from FTX in November, Enron turnaround veteran John J. Ray III was appointed as the new CEO. The 30-year-old former billionaire continues to insist that if he were not “forced” to declare bankruptcy that the company would have been able to repay all its customers. He wrote: “There were numerous potential funding offers — including signed LOIs post chapter 11 filing totaling over $4b.  I believe that, had FTX International been given a few weeks, it could likely have utilized its illiquid assets and equity to raise enough financing to make customers substantially whole.” On January 3, Bankman-Fried pled not guilty to all eight counts of criminal charges, which included wire fraud, conspiracy to commit money laundering and conspiracy to misuse customer funds, among others. Bankman-Fried could face up to 115 years in jail if convicted on all charges. His trial date has been set for October 2, 2023. Last month, a U.S. judge released Bankman-Fried on a $250 million bail bond after he was extradited to America from the Bahamas. The bail package allowed Bankman-Fried to remain under house arrest at his parents’ home in Palo Alto, California. In the Substack, Bankman-Fried insisted that he had not been involved in running affiliated trading company Alamada — which was been the target of speculation around whether or not FTX mishandled customer funds — for some time, and that he was not aware of its finances. He also went on to share what he described as “a record of FTX US’s balance sheet as of when I handed it off.” SBF Substack He went on to say: If FTX had been given a few weeks to raise the necessary liquidity, I believe it would have been able to make customers substantially whole. I didn’t realize at the time that Sullivan & Cromwell — via pressure to instate Mr. Ray and file Chapter 11, including for solvent companies like FTX US — would potentially quash those efforts. I still think that, if FTX International were to reboot today, there would be a real possibility of making customers substantially whole. And even without that, there are available for customers. I’ve been, regrettably, slow to respond to public misperceptions and material misstatements. It took me some time to piece together what I could — I don’t have access to much of the relevant data, much of which is for a company (Alameda) I wasn’t running at the time. This is not the first time the disgraced founder has taken to airing his thoughts publicly. In November, he said in a that FTX International was and was in talks with a “number of players.” Then in December, he from an undisclosed location in the Bahamas with reporter Andrew Ross Sorkin for a DealBook event; that his legal team “very much” did not approve of, he told Sorkin with a boyish grin.

Oneleaf is a self-hypnosis app that guides you through audio programs

Romain Dillet

Meet , a new startup that wants to make hypnosis mainstream. The startup has designed an app that helps you get started with hypnosis and follow various programs to quit smoking, reduce anxiety or lose weight. Oneleaf raised $4.6 million (€4.2 million) from Frst, Kima Ventures, Raise Ventures and several business angels. Bpifrance also contributed hundreds of thousands of dollars on top of that through equity-free financing. “How to quit smoking was a topic that really mattered to me. I discovered a whole new world, and that’s hypnosis,” founder and CEO Eliott Cohen-Skalli told me. “And the digital experience is better than the physical one. Hypnosis is a state of relaxation and focus at the same time.” According to Cohen-Skalli, the reason why it’s easier to practice self-hypnosis at home is that you’re in a peaceful and familiar environment. You’re not in someone’s office sitting next to a stranger. There is also a reason why an app might perform well in the hypnosis industry. Real-life hypnosis sessions can be quite expensive, especially in the U.S. Oneleaf has written a handful of 21-day programs that will help you with smoking, weight management or poor sleep. The company has worked with hypnosis professional Laurent Taton and social and behavioral scientists Emily Balcetis and Judith Prochaska. The startup then recorded these sessions and added some binaural beats for background music. The result is an audio-only experience that you can start whenever you want from your phone. Each session lasts 20 to 30 minutes. Like meditation or fitness apps, Oneleaf is betting on subscription revenue. Users can pay $68 to access Oneleaf’s content library. There are also in-app purchases that let you unlock a program in particular. The app has been around for a few weeks already and feedback has been good so far. The company now hopes it can generate 10,000 downloads per month as quickly as possible. When it comes to the distribution strategy, the company will generate some downloads via ads, attract web users with content that is optimized for popular keywords and sign partnerships with some influencers. At the end of 2023, Oneleaf hopes that it can also convince companies to pay for its product so that it can be part of the benefits package. A lot of companies pay for employee assistance programs and various subscription products. Adding Oneleaf to this lineup of apps and services makes sense and could create an interesting second revenue stream for the startup. But first, it’s going to be interesting to see if Oneleaf manages to build a loyal user base with its consumer product in the coming months. Oneleaf

Is ChatGPT a cybersecurity threat?

Carly Page

in November, ChatGPT has become the internet’s new favorite plaything. The AI-driven natural language processing tool rapidly amassed more than 1 million users, who have used the web-based chatbot for everything from generating and to crafting academic essays and writing computer code. Not only have ChatGPT’s human-like abilities taken the internet by storm, but it has also set a number of industries on edge: a over fears that it could be used to cheat, copywriters are already being , and reports claim Google is so alarmed by ChatGPT’s capabilities that it  to ensure the survival of the company’s search business. It appears the cybersecurity industry, a community that has long been skeptical about the potential implications of modern AI, is also taking notice amid concerns that ChatGPT could be abused by hackers with limited resources and zero technical knowledge. Just weeks after ChatGPT debuted, Israeli cybersecurity company Check Point how the web-based chatbot, when used in tandem with OpenAI’s code-writing system Codex, could create a phishing email capable of carrying a malicious payload. Check Point threat intelligence group manager Sergey Shykevich told TechCrunch that he believes use cases like this illustrate that ChatGPT has the “potential to significantly alter the cyber threat landscape,” adding that it represents “another step forward in the dangerous evolution of increasingly sophisticated and effective cyber capabilities.” TechCrunch, too, was able to generate a legitimate-looking phishing email using the chatbot. When we first asked ChatGPT to craft a phishing email, the chatbot denied the request. “​​I am not programmed to create or promote malicious or harmful content,” a prompt spat back. But rewriting the request slightly allowed us to easily bypass the software’s built-in guardrails. Many of the security experts TechCrunch spoke to believe that ChatGPT’s ability to write legitimate-sounding phishing emails — the for ransomware — will see the chatbot widely embraced by cybercriminals, particularly those who are not native English speakers. Chester Wisniewski, a principal research scientist at Sophos, said it’s easy to see ChatGPT being abused for “all sorts of social engineering attacks” where the perpetrators want to appear to write in a more convincing American English. “At a basic level, I have been able to write some great phishing lures with it, and I expect it could be utilized to have more realistic interactive conversations for business email compromise and even attacks over Facebook Messenger, WhatsApp, or other chat apps,” Wisniewski told TechCrunch. The idea that a chatbot could write convincing text and realistic interactions isn’t so far-fetched. “For example, you can instruct ChatGPT to pretend to be a GP surgery, and it will generate life-like text in seconds,” Hanah Darley, who heads threat research at Darktrace, told TechCrunch. “It’s not hard to imagine how threat actors might use this as a force multiplier.” Check Point also recently over the chatbot’s apparent ability to help cybercriminals write malicious code. The researchers say they witnessed at least three instances where hackers with no technical skills boasted how they had leveraged ChatGPT’s AI smarts for malicious purposes. One hacker on a dark web forum showcased code written by ChatGPT that allegedly stole files of interest, compressed them, and sent them across the web. Another user posted a Python script, which they claimed was the first script they had ever created. Check Point noted that while the code seemed benign, it could “easily be modified to encrypt someone’s machine completely without any user interaction.” The same forum user previously sold access to hacked company servers and stolen data, Check Point said. How difficult could it be? Dr. Suleyman Ozarslan, a security researcher and the co-founder of Picus Security, recently demonstrated to TechCrunch how ChatGPT was used to write a World Cup–themed phishing lure and write macOS-targeting ransomware code. Ozarslan asked the chatbot to write code for Swift, the programming language used for developing apps for Apple devices, which could find Microsoft Office documents on a MacBook and send them over an encrypted connection to a web server, before encrypting the Office documents on the MacBook. “I have no doubts that ChatGPT and other tools like this will democratize cybercrime,” said Ozarslan. “It’s bad enough that ransomware code is already available for people to buy ‘off-the-shelf’ on the dark web; now virtually anyone can create it themselves.” Unsurprisingly, news of ChatGPT’s ability to write malicious code furrowed brows across the industry. It’s also seen some experts move to debunk concerns that an AI chatbot could turn wannabe hackers into full-fledged cybercriminals. In a , independent security researcher The Grugq mocked Check Point’s claims that ChatGPT will “super charge cyber criminals who suck at coding.” “They have to register domains and maintain infrastructure. They need to update websites with new content and test that software which barely works continues to barely work on a slightly different platform. They need to monitor their infrastructure for health, and check what is happening in the news to make sure their campaign isn’t in an article about ‘top 5 most embarrassing phishing phails,’” said The Grugq. “Actually getting malware and using it is a small part of the shit work that goes into being a bottom feeder cyber criminal.” Some believe that ChatGPT’s ability to write malicious code comes with an upshot. “Defenders can use ChatGPT to generate code to simulate adversaries or even automate tasks to make work easier. It has already been used for a variety of impressive tasks, including personalized education, drafting newspaper articles, and writing computer code,” said Laura Kankaala, F-Secure’s threat intelligence lead. “However, it should be noted that it can be dangerous to fully trust the output of text and code generated by ChatGPT — the code it generates could have security issues or vulnerabilities. The text generated could also have outright factual errors,” added Kankaala, laying doubt to the reliability of code generated by ChatGPT. ESET’s Jake Moore said as the technology evolves, “if ChatGPT learns enough from its input, it may soon be able to analyze potential attacks on the fly and create positive suggestions to enhance security.” It’s not just the security professionals who are conflicted on what role ChatGPT will play in the future of cybersecurity. We were also curious to see what ChatGPT had to say for itself when we posed the question to the chatbot. “It’s difficult to predict exactly how ChatGPT or any other technology will be used in the future, as it depends on how it is implemented and the intentions of those who use it,” the chatbot replied. “Ultimately, the impact of ChatGPT on cybersecurity will depend on how it is used. It is important to be aware of the potential risks and to take appropriate steps to mitigate them.”

Our obsession with pets means startups aimed at vets are booming, as Digitail shows

Mike Butcher

With our mysterious, and psychological attachment to pets, combined with a boom in pet ownership since those lonely pandemic times, veterinary practices have come under increasing pressure. Pet ownership has (56 to 70% U.S. household penetration in the last 35 years). But, there are not enough vets. To meet demand, a vet currently to see more than 32 patients a day, and by 2030, the U.S. will need nearly 41,000 additional veterinarians on current trends. Just like doctors, vets spend a lot of their day on admin, while legacy systems are creaking under the weight of the new work. This antiquated sector has become a ripe arena for tech companies. was bought by Chewy in H2 2022. was bought by Pathaway/Thrive (Vet group). And was bought by Idexx in H1 2022. And that’s just to name a few. We covered , a startup that grew out of Romania that automates the admin for veterinarians, in 2021 at their seed round. The startup has now closed an $11 million Series A funding round led by Atomico. They join previous investors byFounders, Gradient and Partech. Atomico principal Andreas Helbig joins the Digitail board as part of the investment. Allison Pickens (former COO of Gainsight) is joining as an angel with her new fund . Digitail will use the funding to further scale operations across the U.S. and Canada, as well as develop the product. The SaaS solution combines a management platform, a “pet parent” app for pet owners and a Data Hub providing medical and business insights to veterinarians. It claims veterinarians are able to see 2x as many patients using the software. Digitail was founded in 2018 by Sebastian Gabor (CEO) and Ruxandra Pui (CPO), who had previously founded the development studio and IT consultancy ITGambit together. Gabor told me the company started 2022 with $150,000 in ARR and ended Q4 2022 by passing $1 million in ARR with over 700 animal hospitals worldwide using Digitail PIMS on a daily basis. He claims there are currently over 1.4 million pet profiles in Digitail in more than 10 countries. He says he was inspired to create Digitail after having to completely restart his dog’s vaccination plan following a mis-scheduled appointment. U.S. pet care is to grow from $118 billion in 2019 to $277 billion by 2030.

Frank-ly, the Kardashian method won’t work for SBF

Natasha Mascarenhas

Hello and welcome back to  , a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. This week, was joined by and to talk about the latest and greatest in tech. Before we get into what we got up to, can we just say how great it is to be back? It feels therapeutic to be back on the mic to digest the news in terms of trends and startup happenings; and we hope you feel right about the same. Without further ado, our show touched on a lot this week: We’ll end with a reminder that the TechCrunch podcast network is now a machine that produces content, daily, from the most diverse slate of hosts in the tech pod world. Proud of our fellow co-hosts, and for those of you who may be starting a resolution or habit-stacking to start 2023, consider giving our other shows a try.

Web3 could help fashion become more sustainable

Dominic-Madori Davis

industry that could use web3, that industry is fashion. Hear us out. Fashion is one of the most polluting sectors in the world, and, according to the United Nations Environmental Programme, is of the world’s carbon dioxide output, than the international flights and maritime shipping industries combined. Eighty-five percent of clothes in the United States alone , and at least 20% of results from textile dyeing. The ravenous appetite of fast fashion shoppers isn’t settling anytime soon, and fashion’s supply chain remains quite arduous on the environment. A possible step toward finding the multiple solutions needed to fix this damaging sector is, well, embracing more web3.

SBF’s anticipated not guilty plea was a ‘smart play’

Jacquelyn Melinek

guilty to several federal fraud charges was largely anticipated and something a few legal experts suggested was a tactical response. The former CEO of crypto exchange FTX, whose company collapsed in November, made the plea in Federal District Court in New York. It’s very common in the federal criminal justice system for defendants to plead not guilty at their initial appearance, Mary Beth Buchanan, a former U.S. attorney now advising blockchain companies, said to TechCrunch. The expedited timeline of and the legal actions against those involved was unexpected and unprecedented. In less than two months, Bankman-Fried faced eight federal criminal charges, while others close to him — including FTX co-founder and former CTO Gary Wang and Alameda Research CEO Caroline Ellison — and accepted plea agreements. But Bankman-Fried pleaded not guilty “because he had the absolute right to do so,” Anthony Sabino, a professor of law at The Peter J. Tobin College of Business at St. John’s University, said to TechCrunch. “And it was the smart play. Keep your options open. Do not give the government an edge. Wait it out. A deal can always be made later.” Michael Fasanello, crypto compliance officer at AnChain.AI, agreed. “The initial plea of ‘not guilty’ is really just a formality of process and recognition of the charges by the defendant.” By pleading not guilty, it gives Bankman-Fried more room to try and strike a deal with prosecutors, if that’s something he and his lawyers want, Sabino noted. Lewis Kaplan, the senior judge of the U.S. District Court for the Southern District of New York, set Bankman-Fried’s next trial date for October 2. But not everyone expects that date to be set in stone or is confident that Bankman-Fried will hold his plea until then. “This is not a case where you want to either plead ‘not guilty’ and wage all-out war or plead ‘guilty’ and throw yourself on the mercy of the court,” Fasanello said. “The middle ground is the sweet spot, here.” Bankman-Fried’s defense team will need more time to prepare, given the expected mountain of evidence to sift through, Sabino said. “Far more important, it is more likely than not the prosecutors and SBF will talk a deal. So time will be needed to negotiate a plea bargain.”

Will what happened at CES, stay at CES?

Natasha Mascarenhas

Hello and welcome back to  , a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. This is our Wednesday show, where we niche down to a single topic, think about a question and unpack the rest. This week,  chatted with and about CES, which took place last week over in the ever-exciting Las Vegas area. All of , but for the purposes of today’s show, we tried to keep it analytical, chatty and, at times, even a bit robotic. (You’ll see what I mean.) Here’s what we got into: You can follow Haje through his work on the , and Brian through his work on As always, you can catch up with us on Twitter

That Microsoft deal isn’t exclusive, video is coming and more from OpenAI CEO Sam Altman

Connie Loizos

At a StrictlyVC event last week, co-founder and CEO Sam Altman sat down for a wide-ranging interview with this editor, answering questions about some of his most , as well as about the future of OpenAI. There was much to discuss. The now eight-year-old outfit has dominated the national conversation in the two months since it released ChatGPT, a chatbot that answers questions like a person. OpenAI’s products haven’t just astonished users; the company is reportedly in talks to oversee the sale of existing shares to new investors at a valuation despite its comparatively . Altman declined to talk about OpenAI’s current business dealings, firing something of a warning shot when asked a related question during our sit-down. Yet he did reveal a bit about the company’s plans going forward. For one thing, in addition to ChatGPT and the outfit’s popular digital art generator, DALL-E, Altman confirmed that a video model is also coming, though he said that he “wouldn’t want to make a competent prediction about when,” adding that “it could be pretty soon; it’s a legitimate research project. It could take a while.” Altman confirmed that OpenAI’s evolving partnership with Microsoft — which first invested in OpenAI and earlier today to incorporate AI tools like ChatGPT into all of its products — is not an exclusive pact. Further, Altman confirmed that OpenAI can build its own software products and services, in addition to to other companies. That’s notable to industry watchers who’ve wondered whether OpenAI might one day compete directly with Google via its own search engine. (Asked about this scenario, Altman said: “Whenever someone talks about a technology being the end of some other giant company, it’s usually wrong. People forget they get to make a counter move here, and they’re pretty smart, pretty competent.”) As for when OpenAI plans to release the fourth version of the GPT, the sophisticated language model off which ChatGPT is based, Altman would only say that the hotly anticipated product will “come out at some point when we are confident that we can [release] it safely and responsibly.” He also “I think [AGI] is sort of what is expected of us” and GPT-4 is “going to disappoint” people with that presumption, he said. In the meantime, asked about Altman expects to see artificial general intelligence, he posited that it’s closer than one might imagine but also that the shift to “AGI” will not be as abrupt as some anticipate. “The closer we get [to AGI], the harder time I have answering because I think that it’s going to be much blurrier and much more of a gradual transition than people think,” he said. Naturally, before we wrapped things up, we spent time talking about safety, including whether society has enough guardrails in place for the technology that OpenAI has already released into the world. Plenty of critics believe , including worried who are increasingly access to ChatGPT owing to fears that students will use it to cheat. (Google, very notably, has reportedly been reluctant to release its own AI chatbot, LaMDA, over concerns about its “ .”) Altman said here that OpenAI does have “an internal process where we kind of try to break things and study impacts. We use external auditors. We have external . We work with other labs and have safety organizations look at stuff.” At the same time, he said, the tech is coming — from OpenAI and elsewhere — and people need to start figuring out how to live with it, he suggested. “There are societal changes that ChatGPT is going to cause or is causing. A big one going on now is about its impact on education and academic integrity, all of that.” Still, he argued, “starting these [product releases] now [makes sense], where the stakes are still relatively low, rather than just put out what the whole industry will have in a few years with no time for society to update.” In fact, educators — and perhaps parents, too — should understand there’s no putting the genie back in the bottle. While Altman said that OpenAI and other AI outfits “will experiment” with watermarking technologies and other verification techniques to help assess whether students are trying to pass off AI-generated copy as their own, he also hinted that focusing too much on this particular scenario is futile. “There may be ways we can help teachers be a bit more likely to detect output of a GPT-like system, but honestly, a determined person is going to get around them, and I don’t think it’ll be something society can or should rely on long term.” It won’t be the first time that people have successfully adjusted to major shifts, he added. Observing that calculators “changed what we test for in math classes” and Google rendered the need to memorize facts far less important, Altman said that deep learning models represent “a more extreme version” of both developments. But he argued the “benefits are more extreme as well. We hear from teachers who are understandably very nervous about the impact of this on homework. We also hear a lot from teachers who are like, ‘Wow, this is an unbelievable personal tutor for each kid.'” For the full conversation about OpenAI and Altman’s evolving views on the commodification of AI, regulations and why AI is going in “exactly the opposite direction” that many imagined it would five to seven years ago, it’s worth checking out the clip below. You’ll also hear Altman address best- and worst-case scenarios when it comes to the promise and perils of AI. The short version? “The good case is just so unbelievably good that you sound like a really crazy person to start talking about it,” he said. “And the bad case — and I think this is important to say — is, like, lights out for all of us.”

We need to destigmatize down rounds in 2023

Holden Spaht

is upon us, and with it comes uncertain, and uncomfortable, market conditions. Accompanying those conditions are equally uncomfortable decisions. For startup founders, determining which path is right for their business may require fundamentally rethinking the way they measure success. The business climate in 2023 will be unfamiliar to many who founded a company in the past decade. Until now, a seemingly endless stream of relatively cheap capital has been at the disposal of any startup deemed by the VC world to have high growth potential. Everyone wanted a piece of “the next Facebook.” With interest rates near zero, the risks were relatively low and the prospective rewards were astronomical. Burning money to chase growth became the norm; you’d just raise more money when you ran out. Debt? Who needs it! Existing investors were happy to play along, even if their share in the company was somewhat diluted — growing valuations kept everyone sated. Over the years, this pattern of rapidly rising valuations and a pie growing fast enough to compensate for any dilution — fueled by “free money” that made almost any investment justifiable — crystallized into a mythology at the core of startup culture. It was a culture that nearly everyone, from founders and investors to the media, fed into. Climbing valuations made for great headlines, which sent a signal, both to potential employees and the markets, that a company had momentum. High valuations quickly became one of the first things new investors looked to when it was time to raise additional capital, whether that was through a private round of funding or an IPO. But tough economic conditions tend to dispel complacency with hard realities, and we’ll see reality checking in when it comes to funding this year. Amid rising interest rates and a generally negative macroeconomic outlook, the tap will run slowly –– or not at all. Equity financing is no longer cheap and plentiful, and as drought strikes, a sense of anxiety will grip founders. They can no longer burn cash without seriously contemplating where they’ll get more when it’s gone. When that time comes, founders will be faced with a choice that could make or break their business. Do they turn to alternatives like convertible notes, or do they approach new investors for more equity funding? Tech stocks have been pummeled in the past year, which could mean their company’s value has taken a hit since the last time they raised capital, leaving them with the prospect of the dreaded “down round.” It’s easy to see why down rounds seem out of the question for many startup founders. For starters, they’d face the flip side of the positive media mania, which risks eroding employee morale and investor confidence. In a culture where growing valuations are worn like a badge of honor, founders may fear that taking a down round would render them Silicon Valley pariahs. The truth is, there’s no one-size-fits-all solution. The funding route you take has enormous consequences for the future of your company, and so it shouldn’t be clouded by ego or driven by media appetites.

Sequoia-backed GoMechanic cuts 70% jobs amid ‘grave errors’ in financial reporting

Manish Singh

GoMechanic has laid off 70% of its workforce as the Sequoia India-backed startup grapples with a funding crunch after the existing and prospective investors found that the founders had misstated facts. The move comes as the Gurgaon-headquartered GoMechanic, which offers auto-services such as repairing and carwashing, has been struggling to raise funds for over a year despite reaching advanced stages of deliberations with several investors. GoMechanic was in talks early last year to raise a round of funding led by Tiger Global at over $1 billion valuation, TechCrunch earlier. The talks did not materialize into a deal after some discrepancy was found during the due diligence process, a source said. GoMechanic later engaged with a number of other investors, including Malaysia’s Khazanah to raise a large round. Khazanah was positioning to lead the round whereas SoftBank was also looking to participate. This new round is no longer proceeding as serious discrepancies have been found in its books, two sources said, requesting anonymity speaking to the press. A probe into the seven-year-old startup by EY as part of the due diligence for the recent funding deliberation found scores of issues, including inflated revenue and that some garages were fictitious, two sources said. The debacle at the startup — which is fast-running out of cash in its bank and needs a new infusion soon to survive, according to a source familiar with the matter — is the latest headache for Sequoia India, the most influential venture investor in the South Asian market. Zilingo, BharatPe and Trell, three other Sequoia India-backed startups, have had governance and auditing issues in the past one year. Chiratae Ventures, another investor in GoMechanic, was looking to sell some of its shares a few months ago at a valuation of $700 million, according to another source familiar with the matter. The cap table of GoMechanic, which has raised $62 million and was last valued at $283 million (post-money). (Data: Tracxn) In a joint statement, GoMechanic investors said the startup’s founders recently informed them of the “serious inaccuracies in the company’s financial reporting.” “We are deeply distressed by the fact that the founders knowingly misstated facts, including but not limited to the inflation of revenue, which the founders have acknowledged. All of this was kept from the investors. The investors have jointly appointed a third party firm to investigate the matter in detail, and we will be working together to determine next steps for the company,” they added. In a on Wednesday, GoMechanic co-founder Amit Bhasin said the startup made “grave errors in judgement as we followed growth at all costs, particularly in regard to financial reporting, which we deeply regret.” (In an updated LinkedIn post, Bhasin edited out the word grave.) “We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions. This restructuring is going to be painful and we will unfortunately need to let go of approx. 70 percent of the workforce. In addition, a third party firm will be conducting an audit of the business. While the situation is far from anything we could have ever imagined for Go Mechanic, we are working on a plan which would be most viable under the circumstances.” The Gurgaon-headquartered startup has also told the remaining staff to work without pay for three months, Indian news outlet The Morning Context .

You’re not going to grow into your 2021 valuation

Jeremy Abelson

companies claim: “We will grow into our valuation from 2021.” That statement is in reference to their expectations of when they’ll price their IPO, or with regards to a future private round. They are implying that they will wait to go public until they can price an IPO higher than or at least at the same valuation as their last funding round. This further implies that the company is opposed to down rounds or publicizing a decrease in their valuation. Interestingly, these companies claim they can do that — as if growing into one’s 2021 valuation is easy and can happen in the near term. We always attempt to do the math every time we hear a company make this statement (again, we hear it frequently). In most cases, pricing an IPO at a company’s 2021 valuation is more than a few years away (assuming perfect execution), and in some cases, we don’t think it will ever happen. Our chart of the quarter depicts the math behind how long it will take companies to price their IPO so they can match their previous valuations: Companies need three inputs to use the chart:

Dungeons & Dragons’ publisher will put the game under a Creative Commons license

Amanda Silberling

It looks like Dungeons & Dragons just succeeded on a death-saving throw. After weeks of backlash and , Wizards of the Coast — the Hasbro-owned publisher of Dungeons & Dragons — that it will now license the tabletop role-playing game’s core mechanics under the license. This gives the community “a worldwide, royalty-free, non-sublicensable, non-exclusive, irrevocable license” to publish and sell works based on Dungeons & Dragons. “Overall, what we’re going for here is giving good-faith creators the same level of freedom (or greater, for the things in Creative Commons) to create TTRPG content that’s been so great for everyone, while giving us the tools to ensure the game continues to become ever more inclusive and welcoming,” wrote Dungeons & Dragons executive producer Kyle Brink in a . This is a massive change of heart for the gaming giant. Earlier this month, Wizards of the Coast (WoTC) sent a document with a new open gaming license (OGL) to top Dungeons & Dragons content creators, asking them to sign what they called “OGL 1.1.” Some creators leaked the document in protest, exposing its predatory terms that would suffocate the prolific fan community and collapse some creators’ businesses. The now-retracted OGL 1.1 would have required any Dungeons & Dragons creator earning over $50,000 to write reports to WoTC, and any making over $750,000 to start paying a 25% royalty. These numbers might seem high, but these figures refer to gross revenue, not income — and the industry of third-party Dungeons & Dragons content is so large that the impact would be severe. Other creators worried about a clause in the contract that would allow WoTC to publish their work, potentially without credit or payment. Over 77,000 creators and fans signed an open letter against these changes, and some went as far as canceling their subscriptions to D&D Beyond, an online platform for the game. Finally, WoTC admitted that they “ ” — for those uninitiated in TTRPG-speak, that means they screwed up really, really bad. “There’s no royalty payment, no financial reporting, no license-back, no registration, no distinction between commercial and non-commercial. Nothing will impact any content you have already published under OGL 1.0a. That will always be licensed under OGL 1.0a. Your stuff is your stuff,” Brink wrote in today’s blog post. Later in the post, he affirms again, “You own your content. You don’t give Wizards any license-back, and for any ownership disputes, you can sue for breach of contract and money damages.” The under Creative Commons — known as OGL 1.2 — is a big improvement from the last document. But some fans remain worried about terms that impact virtual tabletops and works already licensed under the original OGL, which dates back to 2000. Virtual tabletop (VTT) software helps people play games like Dungeons & Dragons when they’re not in the same room, and of course, these products exploded during the pandemic. Dungeons & Dragons does not currently have its own VTT, though. As part of the new OGL, WoTC wrote a draft of a brand-new VTT policy. According to the VTT policy, it’s okay for developers to display content from the Dungeons & Dragons sourcebooks. But WoTC is wary of content that is “more like a video game” than a TTRPG. “What isn’t permitted are features that don’t replicate your dining room table storytelling,” the document says. “If you replace your imagination with an animation of the Magic Missile streaking across the board to strike your target, or your VTT integrates our content into an NFT, that’s not the tabletop experience.” As far as content published under the original OGL goes, WoTC says that content already published will remain licensed, but moving forward, the old license will be deauthorized. Tomorrow, WoTC will update the blog post with a link for fans to provide feedback — this survey will remain open until February 3. Then, within the following two weeks, WoTC will issue another update. “The process will extend as long as it needs to. We’ll keep iterating and getting your feedback until we get it right,” Brink wrote. This is a promising first step for Dungeons & Dragons to regain its fans’ trust. But when you make a death-saving roll, you have to succeed three times before your character can get back into the fray. Hopefully WoTC leadership keeps making good dice rolls.

Labor trends in 2023: Over-employment, fatigue and hope

Natasha Mascarenhas

If there’s one thing I can rely on every new year, it is that people will debate whether resolutions are an irrelevant, capitalistic waste of time, or if there’s something beautiful about the world collectively wanting to better themselves. Longtime readers know that I’m a fan of resolutions because of the latter. There’s nothing quite like the renewed energy you get from a few days off, ready to be focused on better, bigger goals that 2022 just didn’t have room for. Am I re-energized after two weeks off? Yes. Am I worried that the news cycle will begin to spiral out of control within moments, taking us and our hot takes with it? Also, yes. Alas, that’s where we are and if you have a resolution, I’m cheering for you. My journalistic one, beyond working more on my writing craft and perhaps getting started on this book dream I’ve had forever, is to do more follow-up stories. The big themes that dominated 2022 news coverage were around layoffs, labor and venture capital incentives. But beyond singular workforce reductions, how has the reality check changed the way tech works? Are venture dollars getting more disciplined or was that just a fever tweet of the past 12 months? Doom and gloom is part of the story, always, but I think there’s also news to be found in the reinvention and reframing of tech. So far, if I do say so myself, I’m not doing half bad. This week, I published a story looking into Here’s the intro: Tech isn’t as collegial as it used to be. Rocket ships are being unveiled as sputtering messes, mission-driven startups don’t feel so mission oriented when responding to investor pressure, and widespread layoffs offer a loud reminder that jobs are breakable contracts not sacrosanct vows. Over the past few months, thousands of employees from Meta, Twitter, Stripe, Amazon, DoorDash and countless other companies that don’t have the privilege of being household names are back on the job market. A job market that includes hiring freezes, salary cuts and a general malaise that industry experts warn won’t be over this year. So where does tech’s talent go from here? The answer is complicated, and it’s too early to have definitive labor data. VCs want to fund the newest tech mafia startups before banks do, top MBA programs want laid-off workers to join so badly that they’re waiving standardized test score requirements, and the tech companies that are in a position to hire really want you to know it. Keep reading to see in 2023. As always, you can find me on , and , where I publish more of my words and work. In the rest of this newsletter, we’ll talk about CES, crypto and Katrina Lake’s return as Stitch Fix CEO. It’s that time of the year. This week brought CES, the annual consumer electronics show that features a slew of creative gadgets likely to surprise. TechCrunch is on the ground covering these products as they debut, which range from to not-so-dorky and CES is starting to take robotics more seriously, according to TC’s hardware editor Brian Heater. In his newsletter, Heater gave us early impressions of the show, which is less of a spectacle compared to its pre-pandemic days. there were more robots roaming around Vegas this past week: The pandemic has accelerated the industry in general. Automakers are getting serious about investing in and acquiring robotics startups or building these technologies in-house. See: Ford’s Agility investments, TRI’s research and Hyundai’s events post-Boston Dynamics acquisition. Big firms like Amazon have been aggressively pushing consumer robotics.   TechCrunch I’ll be honest, this subhed sounds like a mandatory groan meets not-so-subtle hangover. I know you’re not interested, or really helped by, a listicle of all the crypto stories you may have missed while you were enjoying eggnog or catching up on books. Link roundups, even though they are at the end of this newsletter, only do so much! We can’t just shrug off what happened in the final innings of 2022 and let fatigue win! So, let’s make a deal. I’m going to throw you to my brilliant colleague Jacquelyn Melinek’s newsletter, Chain Reaction, for the latest and greatest about what’s happening in the world of crypto. Her latest column certainly made me wake up: Andriy Onufriyenko / Getty Images While we often cover executive departures, it’s not every day that you see a founder return to their company as chief executive a year and a half after stepping down. Gold star if you guess who I’m talking about: she began as it struggles through the downturn. Now that , she is the bearer of bad news. As first reported by CNBC, Lake sent a companywide email to 1,700 salaried employees, indicating that 20% of them are getting cut. , it’s clear that the 2022 tech layoff spree isn’t a wave anymore, it’s a reality. Just take a look at other headlines from this week: Getty Images under a David Paul Morris/Bloomberg license. With that, I am off to Baltimore to spend some time with some of my dearest childhood friends. If you have any coffee shop recommendations, ! Otherwise, I’ll catch you next week. Always,

‘We rolled a 1’: D&D publisher addresses backlash over controversial license

Amanda Silberling

After a week of silence amid , Dungeons & Dragons publisher Wizards of the Coast (WoTC) has finally its community’s concerns about changes to the open gaming license. The open gaming license (OGL) has existed since 2000 and has made it possible for a diverse ecosystem of third-party creators to publish virtual tabletop software, expansion books and more. Many of these creators can make a living thanks to the OGL. But over the last week, a new version of the OGL leaked after WoTC sent it to some top creators. More than 66,000 Dungeons & Dragons fans signed an open letter under the name ahead of an expected announcement, and waves of users deleted their subscriptions to , WoTC’s online platform. Now, WoTC admitted that “it’s clear from the reaction that we rolled a 1.” Or, in non-Dungeons and Dragons speak, they screwed up. “We wanted to ensure that the OGL is for the content creator, the homebrewer, the aspiring designer, our players, and the community — not major corporations to use for their own commercial and promotional purpose,” the company wrote in a . But fans have critiqued this language, since WoTC — a subsidiary of Hasbro — is a “major corporation” in itself. Hasbro earned in revenue during the third quarter of 2022. TechCrunch spoke to content creators who had received the unpublished OGL update from WoTC. of this updated OGL would force any creator making more than $50,000 to report earnings to WoTC. Creators earning over $750,000 in gross revenue would have to pay a 25% royalty. The latter creators are the closest thing that third-party Dungeons & Dragons content has to “major corporations” — but gross revenue is not a reflection of profit, so to refer to these companies in that way is a misnomer. editor-in-chief Mike Holik, who organized the #OpenDnD letter, says his business would be impacted by this 25% royalty. As , most Kickstarters that raise that amount of money are not even making a 25% profit, since most of the money raised is going to fulfilling orders, printing books and paying collaborators. “A Kickstarter involves many small products, so your profit margins actually go down, because really, you’re going to offer people some dice, and some adventures, and a box set, and all of those individual things end up cutting into your profit margins pretty significantly,” Holik said. “Kickstarters don’t walk away with 80% of their money and profit. None of that is legitimate. I don’t know where they’re getting that 25% number beyond … they’re trying to squish competition completely.” The fan community also worried about whether WoTC would be allowed to publish and profit off of third-party work without credit to the original creator. , a partner at Premack Rogers and a Dungeons & Dragons livestreamer, told TechCrunch that there was a clause in the document that granted WoTC a perpetual, royalty-free sublicense to all third-party content created under the OGL. Now, WoTC appears to be walking back both the royalty clause and the perpetual license. “What [the next OGL] will not contain is any royalty structure. It also will not include the license back provision that some people were afraid was a means for us to steal work. That thought never crossed our minds,” WoTC wrote in a . “Under any new OGL, you will own the content you create. We won’t.” WoTC claims that it included this language in the leaked version of the OGL to prevent creators from being able to “incorrectly allege” that WoTC stole their work. Throughout the document, WoTC refers to the document that certain creators received as a draft — however, creators who received the document told TechCrunch that it was sent to them with the intention of getting them to sign off on it. The backlash against these terms was so severe that other tabletop roleplaying game (TTRPG) publishers took action. Paizo is the publisher of Pathfinder, a popular game covered under WoTC’s original OGL. Paizo’s owner and presidents were leaders at Wizards of the Coast at the time that the OGL was originally published in 2000, and wrote in a statement yesterday that the company was prepared to go to court over the idea that WoTC could suddenly revoke the OGL license from existing projects. Along with other publishers like Kobold Press, Chaosium and Legendary Games, Paizo announced it would release its own Open RPG Creative License (ORC). “We have no interest whatsoever in Wizards’ new OGL. Instead, we have a plan that we believe will irrevocably and unquestionably keep alive the spirit of the Open Game License,” Paizo’s says. The license has not yet been published. Dungeons & Dragons content creators are still cautious about how changes to the OGL will impact the community, even if it seems like WoTC might make some concessions. “Ultimately, the collective action of the signatures on the open letter and unsubscribing from D&D Beyond made a difference. We have seen that all they care about is profit, and we are hitting their bottom line,” said game master of Dungeons & Dragons podcast . He told TechCrunch that WoTC’s response on Friday is “just a PR statement.” “Until we see what they release in clear language, we can’t let our foot off the gas pedal,” Silver said. “The corporate playbook is wait it out until the people get bored; we can’t and we won’t.”

Pittsburgh’s AI expertise may give rise to an already growing startup market

Rebecca Szkutak

to go in and out of vogue. First, Austin was the next biggest thing, then Atlanta and, more recently, Miami. Pittsburgh has yet to have its moment, but all the signs are there that it could be next. Having local expertise in the category every VC wants to invest in right now doesn’t hurt, either. The Steel City has all the ingredients to be a hub for startups: a good university system, a cheaper cost of living — definitely when compared to places like New York and the Bay Area — and a proliferation of seed firms and startup accelerators. Plus, it has seen a homegrown success story in language learning app , which went public at a nearly valuation in 2021. Startups in the city raised more than $534 million through December 12, 2022, according to PitchBook, which, while not a lot of capital, is better than 2021, when they raised $336 million. And while the data is not consistently trending up and to the right — there was a huge outlier deal (Uber Advanced Technologies) in 2019 that spiked the yearly investment total to $1.3 billion — venture investors on the ground can feel the city’s potential. (I talked about Pittsburgh’s startup ecosystem on the podcast recently in the context of two high-profile startup failures there, and robotic vertical farming outfit . You can give it a listen .) Ven Raju, the president and CEO of Innovation Works, a local startup accelerator and seed fund, said he’s seen the market grow 10x in the last decade and 6x in the last three years. “The ecosystem is on a tremendous upward trajectory,” he added.

Senate questions Live Nation president amid Taylor Swift ticketing debacle

Amanda Silberling

“May I suggest respectfully that Ticketmaster ought to look in the mirror and say, ‘I’m the problem, it’s me,'” Senator Richard Blumenthal (D-CT) said on the Senate floor Tuesday, referencing Taylor Swift’s latest hit “ .” In a hearing on consumer protection and competition in live entertainment, senators grilled Live Nation CFO and president Joe Berchtold over concerns that the company, which bought Ticketmaster in 2010, may be a monopoly. In November, the “ ” presale for Swift’s highly anticipated Eras tour went . In an unprecedented move, Ticketmaster halted sales due to overwhelming demand, stating that the site experienced 3.5 billion system requests, or more than four times its previous peak, due to bot attacks. A month later, Mexican regulators fined Ticketmaster when thousands of fans were turned away from a , despite holding tickets purchased on Ticketmaster (regulators said the company oversold tickets, but Ticketmaster said these were fake tickets). After years of paying hidden fees and losing tickets to scalpers, fans and regulators alike have had enough. Making yet another of many Swift references, Senator Amy Klobuchar (D-MN) said that music and sports fans now understand the risks of corporate consolidation “ .” And as Federal Trade Commission chair Lina Khan at the time of the Swift ticketing fiasco, the incident “converted more Gen Z’ers into antimonopolists overnight than anything I could have done.” When the government investigated the merger of Ticketmaster and Live Nation over twelve years ago, the Justice Department reported that the combined company would of major concert venues. When questioned under oath on Tuesday, Berchtold said he believes the company actually controls around 50% to 60% of that market, due to the rise of secondary resale markets on sites like SeatGeek (whose founder and CEO, Jack Groetzinger, testified at the hearing as well). Still, Ticketmaster sells tickets for 80 of the top 100 arenas in the country, while Live Nation can sometimes operate as the promoter, owner and operator of that same venue. The arrangement is bad for fans, who might watch as their favorite artist sells out an arena show in seconds, only for thousands of bot-purchased tickets to be immediately reposted for double the price. But it also harms the musicians. Testifying before the Senate, independent musician Clyde Lawrence , “In a world where the promoter and the venue are not affiliated with each other, we can trust that the promoter will look to get the best deal from the venue; however, in this case, the promoter and the venue are part of the same corporate entity, so the line items are essentially Live Nation negotiating to pay itself.” Lawrence added that artists get no cut of ticketing fees, coat checks, parking passes or bar tabs, while Live Nation takes 20% of their revenue from merch sales. If he plays a show where tickets cost $42, including fees, Lawrence said his band would get $12. After putting half of that toward touring costs, the band receives $6 per ticket in profit, which is split up among all of its members, pretax. The Justice Department had approved this merger in 2010 with the condition of a consent decree, which was intended to prevent Live Nation and Ticketmaster from acting too much like a monopoly. But in 2019, Justice officials alleged that the company the agreement, since Live Nation had pressured venues to sign contracts with Ticketmaster. As a result, the decree — which was set to expire that year — was extended to remain in effect until 2025, including some . Now, in light of the Swift snafu, the department is investigating Live Nation again. “If the Department of Justice establishes facts that involve monopolistic and predatory abuses, there ought to be structural remedies, such as breaking up the company,” Blumenthal said at Tuesday’s hearing. “We’ll see what the Department of Justice finds.” Some senators proposed potential solutions to the problem. Passed under the Obama administration in 2016, the Better Online Ticket Sales Act (aptly named, the BOTS Act) gives the FTC license to crack down on bot-driven ticket resale firms. Senator Blumenthal and Senator Marsha Blackburn (R-TN) argued that, in the same vein, the FTC needs to pressure Live Nation to figure out its bot problem. “There ought to be people you can get some good advice from, because our critical infrastructure in this country — whether it is utilities, electric, water, power, banking services, credit card processors, payment processors, healthcare companies — you know what, they get bot attacks every single day, by the thousands and thousands, and they have figured it out but you guys haven’t,” Senator Blackburn said. The BOTS Act has only been enforced one time since 2016, when the FTC charged three ticket brokers with over in 2021. “We have a limited level of power on something that hasn’t been consistently enforced,” Berchtold testified. Senator Blumenthal retorted, “You have unlimited power to go to court.” Senator John Kennedy (R-LA) suggested that Live Nation make tickets nontransferable in order to prevent bot resales. The witnesses were quiet for a moment, and Kennedy said, sarcastically, “Don’t all jump in at once.” The proposal might make simple conveniences difficult, like buying two tickets and sending one to a friend, or selling a ticket if you get sick before a show; plus, it could encourage sales of fraudulent tickets. Groetzinger, who operates a major resale site, said he would not support such a policy; Berchtold said he would. The committee’s path forward to hold Live Nation accountable is unclear, but the Department of Justice’s investigation of Live Nation is ongoing.

TechCrunch Live is back with top founders and investors, and you get to ask the questions each week

Matt Burns

is entering its third season, and I’m thrilled to be leading the events again this year. The first event is on February 1, 2023, and will feature a timely discussion on what to do if your company can’t raise a Series A. We have speaking at the first event. Of course, TechCrunch Live is free to attend. This weekly event/episode records live each Wednesday at 12:00/3:00 PST/EST. Register on Hopin to ask questions and network with guests and other attendees. The event also streams to Live and and will also be on Spaces. TCL’s mission is still to help founders build better venture-backed businesses. But going into 2023, there’s new urgency behind this mission. TechCrunch Live started in the heady days of 2021, and now in early 2023, the startup world is experiencing radical changes. It’s harder to fundraise, sales cycles are much longer, and investors (and their LPs) have different expectations that are affecting all industries. Cambly looks like a sure bet right now, but as you’ll hear from Sameer, it was a struggle to get to this point. After failing to raise a Series A, the company had to change its model overnight. When VC after VC said no, Cambly had to find a way to make a profit to keep the doors open. Since then, the company went on to raise a $20 million Series A and a $60 million Series B, but only because the company took the hard steps to seek profitability earlier than expected. Christina Ross and her company, Cube, are on a mission to improve financial planning and analysis. Unlike competitors, Cube is not trying to replace internal spreadsheets, but rather live alongside these beloved sheets. Cube’s strategy is meeting its customers where they’re at. Hear how this novel approach was developed and how it attracted investments from major firms, including Rajeev Batra at Mayfield Fund. Christina Cacioppo co-founded Vanta to help companies stay up-to-date with ever-changing compliances. And the industry responded enthusiastically. The company quickly raised over $200 million in venture capital, becoming a unicorn with its $150 million Series B in October 2022. Hear from Cacioppo and Sequoia Capital general partner Andrew Reed on Vanta’s growth trajectory and fundraising strategy.

FluentPet’s talking button system lets you get a ‘text’ from your dog

Sarah Perez

Want to get a “text” from your dog when he’s hungry, wants to go outside or wants to play? The dream of being able to communicate with your dog is coming closer to reality with the launch of new app-connected talking button system. The new product is an update to the model first made popular by a dog named Bunny, whose 9 million+ social media followers landed the sheepadoodle on of the top 50 social media creators of 2022. On TikTok alone, Bunny has 8.2 million followers on the account. At the in Las Vegas, FluentPet was demonstrating its new communication system for pets, the FluentPet Like the first version, the new system involves programmable buttons that, when pressed, speak voice commands. The dog can press the buttons with its paw or nose, while hexagonal, multicolored tiles — which the company called “HexTiles” —  hold the buttons in place and offer visual cues for the dogs as to the button’s location. The system can be expanded by snapping together more tiles as the dog’s vocabulary grows. To use FluentPet, dog owners will record their voice speaking command words, like “water,” “outside,” “ball,” “play” and others they want to teach their pet to know and understand. Dogs already know words, of course — as any pet owner will tell you — but what makes this system interesting is that the dog can press a button to communicate what it wants. The sound itself emits from a base station with a speaker attached. FluentPet at CES Some dogs are smarter than others, and not all dogs will be able to achieve Bunny’s level of success with such a system, of course. However, the company says that over 70% of dogs using the system will get two buttons within a month — a “play” button and an “outside” button, typically. Then the dog owner may add on an “all done” button to signal that a play session has ended. On average, dogs learn up to nine words with the buttons, the company has found. Still, the findings from the sales of the original FluentPet system have been eye-opening. Since starting shipping its first-gen product in June 2020, the company has reached over 100,000 households. It surprisingly found that dogs weren’t just able to learn individual words but were also putting together word combinations to communicate — like “water” plus “bone” to indicate they wanted an ice cube. “Because we’ve got all of these people that are kind of co-creating this new product category with us, they’re able to communicate to us interesting new things — new button combinations that their dogs seem to use. So this is why we think of it as ‘translation,” explains FluentPet CEO FluentPet CEO . Trottier’s background is in cognitive science and AI, he says — noting he left the Ph.D. program at UC San Diego after doing his undergrad at the University of Toronto in order to build the company that became FluentPet. Originally called , the goal had been to build something more in the dog games space. (The other original co-founders have since left). The data (with users’ permission) is being shared with the , and soon, with John Hopkins. FluentPet FluentPet’s other co-founder, Alexis Devine, is Bunny’s owner — so it turns out, Bunny’s social media across Instagram and TikTok was actually a savvy marketing campaign for FluentPet’s systems. Work on the updated model began in 2021. This version now introduces Wi-Fi connectivity and a connected mobile app. That means when the sound buttons are pressed by the dog, their message is also sent to the app. If you’re in a different part of the house and can’t hear the sound, the app will alert you. “There’s app notifications — you can get a ‘text’ message from your dog,” said Trottier. (It’s not really being delivered over SMS, to be clear — it’s from the app.) The FluentPet Connect system is accepting preorders now. The starter pack — aka FluentPet’s “Get Started” Kit — comes with six connected buttons, three HexTiles and the battery-powered base station with a higher-quality speaker for $159. Original system owners can swap out their old buttons and base station for the new ones but continue using their own tiles. The pre-Series A company has raised funding from Republic.com and angel investors; 3 million+ was raised as CleverPet while another $750,000 came after the pivot.

Lumus shows off its tech in AR glasses that don’t look too dorky

Haje Jan Kamps

AR tech sounds pretty cool, but nobody wants to be a glasshole. Today at CES, we checked out ‘ bid to make AR glasses a little bit less cringe. The company creates technology that makes it far easier for glasses makers to create spectacles that look, well, more or less like glasses, and are compatible with prescription lenses, too. The new glasses are showing off the second generation of its “Z-Lens 2D waveguide” tech, halving the size and weight of the tech needed to make AR bloom to life. “In order for AR glasses to penetrate the consumer market in a meaningful way, they need to be impressive both functionally and aesthetically. With Z-Lens, we’re aligning form and function, eliminating barriers of entry for the industry and paving the way for widespread consumer adoption,” said Ari Grobman, Lumus CEO, in an interview with TechCrunch. “Our introduction of Maximus 2D reflective waveguide technology two years ago was just the beginning. Z-Lens, with all of its improvements unlocks the future of augmented reality that consumers are eagerly waiting for.” [gallery ids="2461421,2461419,2461418,2461422,2461417,2461420"] The lenses include a 2Kx2K resolution, surprisingly vibrant colors and a head-up display that can be seen even in broad daylight. Extra good news for this particular glasses wearer — the company’s tech can be bonded directly to Rx prescription glasses. The tech works by using so-called “reflective waveguides” that help the tiny projectors held in the eyeglass frames to project on the inside of the semi-translucent lenses. This means that the glasses can be used as regular glasses while also being usable as projection surfaces. The other advantage is that there’s minimal light leakage — so it’s virtually impossible to see from the front that the wearer is getting info beamed into their eyeholes. The company tells me it has gone on a patenting binge, claiming it already has more than 430 patents granted, with an additional 540 patents pending. That both places it among the world’s top patent holders for augmented reality optics and positions it beautifully as an acquisition target for a larger company that may be scared of getting sued, bored of paying licensing fees or both.

Trova launches a stylish hiding spot for your unmentionables

Haje Jan Kamps

We all have one; a place in our house where we hide things that need to be kept out of reach of children. At , one company believes it has a more stylish way of tackling that particular problem. is releasing its third product, Trova Home, which is essentially a biometrically locked, stylish shoe box for the things you don’t want tiny humans to get their mitts on. The device has a stylish design, comes in a couple of colors and can be unlocked using NFC or Bluetooth, and the app itself can be protected using the biometric locks built into current-generation smartphones. Calling the device a “safe” is probably a bit generous — the thin metal and relatively flimsy metal latches can probably be circumvented by throwing the box against a wall or hitting it with a hammer. If you need that level of protection, however, you’re well covered by an existing wall, floor or shelf-mounted safe solutions. This device is for a different user group. “About 60% of our customers are parents and it seems like parents really understand the use case for the product. They know that there’s nothing off-limits, and yet that privacy is really at a premium when you’ve got kids running around your house. Ultimately what we do is provide people privacy and peace of mind for items that they don’t want either accidentally — or intentionally — discovered,” said Scott Loeppert, co-owner of TROVA, in an interview with TechCrunch. “Our use cases typically are sort of divided evenly between the traditional use case of jewelry and valuables and the more illicit use cases for things that you don’t want kids to accidentally discover. Adult bedroom toys, recreational marijuana (where it’s legal), your prescription medications that might be dangerous to kids.” Trova Home, pictured in sandstone and charcoal finishes. Haje Kamps/TechCrunch Despite the founder’s insistence that the Trova is for legal substances only, it would presumably be possible to hide your illegal drugs in the Trova, should you have a couple of pills, tabs, or powders lying around from your college days. The other use case is for a tech timeout: Lock the whole family’s phones away and set a timer for when they are unlocked again. The cool thing in this use case is that there are a couple of USB-C sockets in the device, so you can charge your phones while you’re enjoying dinner or settling in for games night. “Parents kept telling us they want to use it for tech timeout. They want to lock their kid’s phones — and maybe their own phones — in there during dinner time,” said Loeppert. “And we are introducing that as a feature in the new app. You can set it for a timer so it’ll open after an hour or two or three or whatever you want.” The Trova Home can alert users if temperature or humidity moves outside a specified range, and if someone is trying to tamper with the device. Alerts can also be sent every time it is opened or if the device loses Wi-Fi, either by moving out of range or through other Wi-Fi outages. The new device is currently available in sandstone and charcoal finishes, it can be opened by up to five authorized users per device. The safe’s dimensions are 14.5 inches (37 cm) wide, 6.2 inches (19 cm) deep and 3 inches (10 cm) high. It costs $549 USD and is shipping soon.

Crypto is ringing in the New Year with new lawsuits and new chaos

Jacquelyn Melinek

Welcome back to and Happy New Year! As we kick off 2023, I’m curious to see if the crypto industry will be living the “New Year, New Me” motto Hopefully the former. Anyways, let’s get into it. The New York Attorney General on Thursday against Alex Mashinsky, the co-founder and former CEO of crypto lending platform Celsius, which filed for Chapter 11 bankruptcy in July 2022. The attorney general claims Mashinsky defrauded hundreds of thousands of investors for billions of dollars worth of cryptocurrency. This announcement follows a from Wednesday that Celsius owns users’ interest-bearing crypto accounts thanks to its fine print. Separately, FTX founder and former CEO to all eight counts of U.S. criminal charges on Tuesday. Prior to the announcement, he was expected to plead not guilty, so this wasn’t a huge shocker to most, but this decision could turn into a lengthy legal battle. Bankman-Fried could face up to 115 years in jail if convicted on all charges. His trial date has been set for October 2, 2023 … so stay tuned. In other big news, Coinbase reached a $100 million settlement after New York financial regulators found the crypto exchange to be violating anti-money laundering laws by failing to conduct adequate background checks. More details below. As mentioned above, New York financial regulators have found that the popular cryptocurrency exchange Coinbase violated anti-money-laundering laws by failing to conduct adequate background checks. Coinbase will pay a $50 million fine to the New York State Department of Financial Services and is also required to spend $50 million on improving its compliance program. The verdict gives Celsius ownership of the $4.2 billion in cryptocurrency that users deposited into its high-interest Earn program, according to a 45-page filing from the U.S. Bankruptcy Court Southern District of New York on Wednesday. Celsius had approximately 600,000 accounts in its Earn program, and the accounts held a collective value of approximately $4.2 billion as of July 10, 2022, the filing noted. About $23 million of that value consisted of stablecoins. But all of that is now property of the estate, aka Celsius, the judge ruled. Former CEO of FTX Sam Bankman-Fried’s not guilty plea to several federal fraud charges was largely anticipated and something a few legal experts suggested was a tactical response. Bankman-Fried pleaded not guilty “because he had the absolute right to do so,” Anthony Sabino, a professor of law at The Peter J. Tobin College of Business at St. John’s University, said to TechCrunch. “And it was the smart play.” Last week, Solana (SOL) fell to its lowest level since February 2021. But its price has slightly risen this week and some are crediting it to interest from Solana community members in Bonk, a new meme token that airdropped about 50% of its 56 trillion token supply to users last week. The Shiba Inu-themed cryptocurrency has risen about 43.7% in the past 24 hours, according to CoinGecko data. Some think 2023 will just be the start of a venture winter and overall economic recession, while others think we could see some stabilization as things head back to normal by midyear. But who is to say? To find out how investors are thinking about the year ahead and what they’re planning, we asked more than 35 investors to share their thoughts. Chain Reaction’s first season ended in December, but we’ll be bringing in new content for Season 2 next week, stay tuned! Subscribe to on or your favorite pod platform to keep up with the latest episodes, and please leave us a review if you like what you hear!

Today at CES: Baby wearables, texts from dogs and e-ink cars

Devin Coldewey

It’s the first official day of CES and our team has already located dozens of the coolest new gadgets, features and weird concept cars that probably will never see the light of day. Halo (not Amazon’s Halo) has a that tracks heart rate, rollover, skin temperature and movement. 10,000 steps a day may seem tough when you can’t walk, but it’s important to have goals. Aeolus Robotics made , that’s meant to help out at schools and hospitals by disinfecting, delivering food and doing basic patrolling. It can also apparently take selfies. Since we’re all eventually going to live in the metaverse, let’s scan our rooms so the transition won’t be too shocking. MeetKai turns smartphone video into . MeetKai’s room-rendering tech. MeetKai Amazon is with a bunch of low-bandwidth IoT things and partners. We’re all clearly still figuring out this whole “smart home” thing. Labrador Systems has using it as a sort of front end for the bot. It’s an “early proof of concept,” which is good because I’m not sure it’s the way to go. where the nearest public charging spot for your electric vehicle is. It’s sad this is necessary but if that’s the extent of your hardship, maybe that’s something to be happy about. Knock knock, who’s there? Blond people! Amazon Still on the Amazon tip, Ring is bringing back the Peephole Cam. Why get up from the couch? Plex is finally — two years after announcing it at CES 2020 — . “It was a lot harder than we thought,” said co-founder Scott Olechowski. Now fix the PS5 app, Scott! It’s a disaster! (Is there a problem level a level of triviality above first world? I have lots.) Ossia and its Cota wireless power were on stage at Disrupt 2023 … . But they’re still putting it out there and now have instead of batteries. That seems like a pretty good idea, though the battery ones go for like a year now. Ossia Have things you want to lock away? Put them in a that only opens with permission from your phone. Sure, you could use a regular lock of literally any kind, but that’s not very CES. I chatted with the guys from StudioBox at Disrupt and was planning on writing up the pro-remote-video-studio-in-a-box, . Read up on how they’re adjusting their business to the post-pandemic world: Smart speakers are nice until you have two or three of them, then you have no idea where your music will go when you hit play. Google . More like a way to manage the problem. Google also provided some more information on its  and an that will have more precise lane markings, objects and other stuff included. Volvo will get it first, as well as Polestar, apparently a real car company. AXS Technologies Power1’s AirPods charging case is now smaller, but it still looks like a to me. If you’re running out of battery so much you need this thing … you’re probably super successful. Congratulations. To me, AirPods charging things aren’t practical but are. FluentPet Connect has programmable buttons that don’t just speak the word, but send a message to your phone. You’re about to do about 50 walks a day, because good luck saying no to messages like HELP FRIEND PLAY. FluentPet Typhur offers a . How big is the display on sous vide cooker? Thought so. Qualcomm picked CES to announce that it will be to “select Android devices,” like those with its latest flagship chipset. Not me, then. Breakout portable power company EcoFlow now makes a . This is why we are going to have a lithium shortage, people! EcoFlow Blade. EcoFlow Sony and Honda collaborated on a definitely real car . You’ll be able to order one starting in 2025, supposedly. BMW isn’t even pretending its is real. They hired Schwarzenegger to do the intro video, and the exterior can be customized with different colors of e-ink (all ugly). It also has . 300 frames in this gif and in not one of them does the car look good. BMW I tried to dismiss this but BMW’s CEO Oliver Zipse said it “cannot be simply dismissed as science fiction because it will inspire our Neue Klasse.” Touché, Oliver. Stellantis is in the U.S., though of course it isn’t free at all. Free floating, yes. If you’re in Denver, Portland, Columbus, Washington D.C., Los Angeles, Detroit, Dallas, Miami, Chicago or Tampa, prepare yourself. In completely unrelated news, Stellantis formed a new business unit to . That’s all as of now, but our tireless reporters will churn out content for you well into the Las Vegas night.

Coinbase reaches $100M settlement over background check failures

Amanda Silberling

New York financial regulators have found that the popular cryptocurrency exchange Coinbase anti-money laundering laws by failing to conduct adequate background checks. Coinbase will pay a $50 million fine to the New York State Department of Financial Services and is also required to spend $50 million on improving its compliance program. Coinbase disclosed that this investigation was in progress in its annual 10k filing in 2021. State regulators first noticed problems at Coinbase in May 2020 during routine supervisory examinations. The Department of Financial Services found “significant deficiencies” in various compliance programs, including customer due diligence procedures, transaction monitoring systems, Office of Foreign Assets Control (OFAC) programs and anti-money laundering risk assessments. Upon closer examination into potential legal violations, regulators also found issues with Coinbase’s “retention of books and records” and reporting to the state department. “During the course of the Department’s investigation, the compliance situation inside Coinbase reached a critical stage,” the reads. The regulators found that by the end of 2021, Coinbase had a backlog of over 100,000 unreviewed transaction monitoring alerts, plus a backlog 14,000 users requiring enhanced due diligence. These backlogs were due in part to Coinbase’s dramatic growth in 2021 — the says that Coinbase signups in May 2021 were fifteen times higher than January 2020, and by November 2021, there were 25 times more monthly transactions than in January 2020. Regulators say that Coinbase did not have enough staff to keep up with growing compliance needs. Yet when Coinbase laid off (or 1,100 people) in June 2022, CEO Brian Armstrong said that the cuts were a result of after the company’s 2021 boom. According to the filing, it was instead the responsibility of over 1,000 third-party contractors to catch up with the backlog not full-time employees. Regulators found that Coinbase didn’t properly oversee or train these contractors, so “a substantial portion of the alerts reviewed by third parties was rife with errors,” the filing says. “The training Coinbase provided was not scalable for the size of the contractor force, and attendance at the training sessions was not adequately tracked,” regulators wrote. “The quality control process was not always performed by the contractor organizations to the standards that Coinbase provided, and initially, Coinbase did not have a system in place to audit the quality control that was done.” As a result of these inaccuracies, regulators wrote that Coinbase failed to report potential instances of money laundering, narcotics trafficking and CSAM-related activity to authorities. The filing also states that since 2018, Coinbase has been aware of its failures to meet state standards for money laundering and financial terrorism compliance. “Although Coinbase has worked to correct these issues, its progress has been slow: progress in certain areas did not occur until recently, and work remains outstanding to the present,” the filing states. The risks of this non-compliance haven’t been merely hypothetical, regulators wrote. The department found that one former Coinbase customer had faced criminal charges in the 1990s related to child sexual abuse material (CSAM). After engaging in “suspicious transactions potentially associated with illicit activity” for more than two years, Coinbase detected the activity, shut down the account and cooperated with law enforcement. Another customer claimed to be an employee of a corporation and managed to gain unauthorized access to that corporation’s bank — by setting up a fraudulent Coinbase account in the name of the corporation, the customer transferred $150 million to their new account. Coinbase didn’t detect this fraud until six days later when contacted by the corporation in question; the money was later recovered after an investigation by law enforcement. These charges come at a time when consumers are losing trust in popular cryptocurrency exchanges. After , FTX founder and former CEO Sam Bankman-Fried is facing criminal charges including wire fraud and conspiracy to misuse customer funds; Bankman-Fried has plead to all charges. “Coinbase has taken substantial measures to address these historical shortcomings and remains committed to being a leader and role model in the crypto space, including partnering with regulators when it comes to compliance,” said Coinbase chief legal officer Paul Grewal. “We believe our investment in compliance outpaces every other crypto exchange anywhere in the world, and that our customers can feel safe and protected while using our platforms.”

YouTuber Logan Paul’s CryptoZoo NFT project is a total mess

Amanda Silberling

Given Logan Paul’s on YouTube, it probably doesn’t come as a surprise that his CryptoZoo NFT project has allegedly turned out to be a scam. Some investors ended up losing up to half a million dollars, according to independent . The development of CryptoZoo has been stalled due to alleged nonpayment of coders. The 27-year-old Paul rose to prominence in 2013 by posting sketches on Vine; but when the short video platform shut down, he transitioned to YouTube and even fights in the WWE. In August 2021, Paul took to his to announce his NFT project. “It’s so fun. It provides a yield with a token, it can earn you money, and as a person who understands, I think, the NFT space enough to know what works, what people want and what they’re looking for, I think my game is going to make some waves,” Paul said. Between his and his , Paul has around 28 million subscribers, plus another followers on Instagram and on TikTok. In other words, he had the audience necessary to generate hype around a new collection of NFTs. Paul’s fans could buy an NFT of an egg, which hatches into an animal that is assigned one of five levels of rarity. These animals can be bred to produce more eggs that hatch hybrid animals, which also have specific rarity levels. When animals are hatched, they yield $ZOO tokens — the rarer the animal, the more it yields. Paul promised fans that they could play games with their animals, which would eventually “enter the metaverse,” according to CryptoZoo’s product . But most of the goals on the product roadmap have not been achieved. The independent reporter Coffeezilla released a three-part video series at the end of December, chronicling his research into what went wrong with CryptoZoo. As it turns out, Paul had employed multiple con men to work on the project. TechCrunch has reached out to Paul’s manager Jeff Levin for comment. Coffeezilla interviewed Cryptozoo’s developer “Z,” who is holding the code hostage for $1 million, since he claims that Paul never paid him. In a , Paul claimed that “Z” is actually Zach Kelling, a convicted felon. “I know what you’re thinking. What type of idiot would work with an unsavory individual like Zach Kelling?” Paul says in his response video. He blames this hire on Eddie Ibanez, the former lead developer of CryptoZoo. “I guess that’s what I get for trusting the team that I relied on to vet and manage Eddie’s hiring process, who has turned out to be a professional con man.” But Ibanez’s scammy past is not new information. In February 2022, Philadelphia culture blog Billy Penn — part of the regional NPR network — into the tech founder’s past. While operating a data analytics company called Zenabi in 2019, Ibanez was accused of sharing sensitive data about one of his clients, the Mormon church, with another client, the International Champions Cup. He also claimed on his website to have worked with the CIA and two NFL teams — he even said that he had a Philadelphia Eagles Super Bowl ring from their victory in 2018. But Billy Penn reported that Ibanez never even met with anyone from the Eagles until after the Super Bowl, and though Ibanez did have some meetings with the team, these conversations never turned into an actual partnership. Ibanez also claims to have studied at MIT, but the MIT News Office told Billy Penn that he was never enrolled at the university. Then, Zenabi received a total of $1.5 million in PPP loans from the federal government. Around the same time, Ibanez’s landlord sued for in back rent and property damage. According to a former Zenabi employee who spoke to Billy Penn, Zenabi is being investigated by the FBI about its PPP loans. Despite a laundry list of suspicious claims, Paul continued working with Ibanez until July 2022. This isn’t the first time that Paul has been accused of promoting crypto scams — in July 2021, he promoted the “shitcoin” called , which almost immediately lost all of its “ .” Other influencers like have faced consequences for promoting crypto to their followers without the necessary disclosures. The SEC settled with Kardashian for $1.26 million over her partnership with EthereumMax. Though she wrote “ ” at the bottom of her Instagram post, the SEC said she should have disclosed that she was paid $250,000 for the promotion. What does the future hold for CryptoZoo? Well, nothing, until Logan Paul manages to get that code back from Zach Kelling, who Coffeezilla says fled to Switzerland. But Paul ended his response video with a promotional screen, stating that CryptoZoo is coming in 2023 or 2024.

CES, NYE, SBF and FTX. Lol.

Natasha Mascarenhas

Hello and welcome back to  , a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. To start off the year, we are welcoming as a returning host who will be joining us while is out on paternity leave. We’re lucky to have her for a few months, so give her a warm welcome! With that, , and Becca returned to the mic to unpack the latest and greatest on this first week back. 2022 was a dreary, relentless storm at times, but it also surprised us with how much innovation continues to brighten up this downturn. The start of 2023 has been no different. Here’s what we got into: As always, we’ll be back to chat with you on Monday! In the meantime, you can follow us on Twitter .  

Here’s how you described the tech industry’s 2022 in a headline

Natasha Mascarenhas

As readers know, we But clearly, so do all of you. As part of our end-of-the-year coverage, the Equity podcast team asked listeners to write a headline that represents 2022 in tech. Listeners showed up, with the brutal, the real and the holy-moly-yes-that-happened-this-year-how-could-you-forget. Our recap episode of this wonky, 12-month-long roller coaster . We feature a ton of your answers in the episode, but some were so good that we feel like they deserve to be in a story of their own. So, buckle up and read on if you’re just in the mood for some tweet-sized recaps after a saga of a news cycle:

Katrina Lake is back as interim CEO of struggling Stitch Fix, 17 months after stepping down

Connie Loizos

Can Katrina Lake save Stitch Fix? The founder of the nearly 13-year-old, subscription-based online personal shopping service is going to try, returning today to her role as CEO 17 months after stepping down from the position. As first reported by , it was Lake who today informed the company’s 1,700 salaried employees in a  that 20% of them are getting cut in a drastic cost-saving measure. Stitch Fix further confirmed to CNBC that the brand’s Salt Lake City distribution center will also be closing and that employees at that center will be laid off, though it declined to disclose how many people work there. TechCrunch separately reached out to Stitch Fix for comment and was sent a stating that Lake plans to “serve in an interim capacity for six months or until her successor is appointed, unless otherwise agreed by Ms. Lake and the Board of Directors.” The bearer of bad news may have surprised some. Lake founded Stitch Fix in late 2010 and took the company public in 2017. At the time, she was the youngest woman to do so. But in August of 2021, she relinquished her day-to-day oversight of the company to become its executive chairperson, a role Lake said at the time she would use to focus on Stitch Fix’s sustainability efforts and its marketing. In her stead, Stitch Fix promoted to the role of CEO Elizabeth Spaulding, who joined the company as president in 2020 and worked previously as a partner at Bain & Company. Spaulding oversaw one layoff already in June of this year when Stitch Fix confirmed that it was , or 15% of its salaried workforce, owing to its changing fortunes. To wit, while shoppers actively used Stitch Fix while trapped in their homes during the pandemic, the business suffered as COVID-related restrictions were lifted and those same customers ventured out to spend some of those discretionary dollars. Further, says CNBC, a direct-buy option instituted during Spaulding’s brief tenure, wherein Stitch Fix invited customers to buy single items without signing up for a plan or paying a styling fee, appears not to have panned out. No word yet on Spaulding’s next moves, but Lake, who said today that Spaulding will be stepping down immediately, states in the company’s press release she is “grateful for Elizabeth’s many contributions as President and then as CEO, and am thankful for her leadership during what has been an unprecedented time for our business and the world.” In her note to the company, Lake told employees that those impacted by today’s layoff will receive at least 12 weeks of pay, and more with tenure. Stitch Fix’s stock is currently trading at roughly $4 per share. During its peak, in January 2021, shares were trading at more than $96 apiece. Lake has long been listed as Stitch Fix’s sole founder, but as by the WSJ, a footnote in one of Stitch Fix’s pre-IPO regulatory filings named a co-founder, Erin Morrison Flynn, who sued Lake and eventually settled with her. According to a lawsuit filed in the Superior Court of California in 2012 by Flynn (and surfaced in that same WSJ article), the pair started the company, originally called Rack Habit, in October 2010; by 2012, according to the lawsuit, their relationship deteriorated after Lake allegedly asked Flynn to give up some of her ownership to distribute the shares to new hires. Among the challenges that Lake — and her next successor — will face in turning Stitch Fix around are economic headwinds, as well as so-called , with customers looking to pare down the number of products and services they subscribe to.

Two CEOs is better than one with Henrique Dubugras from Brex

Rebecca Szkutak

Welcome back to Found, where we get the stories behind the startups. This week Darrell and Becca are joined by co-founder and co-CEO to chat about his corporate credit card and expense management startup. Henrique talked about what made him and his co-founder ( ) decide to launch the company and why the friends, who met online as teenagers, decided to be co-CEOs. Henrique also talks about how Brex navigated changes at the startup this year, and how he personally handled layoffs, all while Darrell and Becca do a questionable job of hiding their disdain for Brex’s legacy competitor. to hear more stories from founders each week. Connect with us:

Sequoia Capital’s Alfred Lin in his first public interview since the implosion of FTX (video)

Connie Loizos

Last night, at an hosted in San Francisco by this editor, venture capitalist Alfred Lin of Sequoia Capital sat down for a one-on-one conversation about the evolution of his storied investment firm, which has enjoyed a largely unblemished record of stunning success — a record since marred by its roughly $200 million investment in the crypto currency exchange FTX. The investment, once a source of pride for the firm, has tarnished not only Sequoia but also Lin, who led the deal on behalf of Sequoia and who was also the firm’s point of contact with CEO Sam Bankman-Fried for a year and a half. He spoke thoughtfully yesterday about how he feels today about a bet gone so wrong. Asked, for example, whether looking back, there were signs that Lin sees now that he missed earlier, he answered after a pause: “I thought [Bankman-Fried] was very smart . . . He answers questions very logically and very succinctly. Could we have spotted any tells? I don’t know. There’s what I know today and what I knew at the time. If I knew at the time, we wouldn’t have invested.” Today, he added, “I think the thing that gets me to reassess is . . . it’s not that we made the investment. It’s the year-and-a-half working relationship afterward, and I still didn’t see it. And that is difficult.” If it was particularly challenging for Lin given that just a year earlier, he Forbes’ annual Midas List, he didn’t say so. But he suggested the experience remains disturbing to him because Bankman-Fried seemed to seize on what the venture industry sees as one of its greatest strengths. Explained Lin, it’s “a trust business. And yes, we need to trust and verify, and we try to verify what we can. But we start from a position of trust, because if we don’t trust the founders that we work with, why would you ever invest in them?” Lin had a lot more to say about FTX, including whether he has sympathy today for Bankman-Fried. “I feel bad” for the disgraced founder instead of sympathetic, Lin said, suggesting that while he’s trying to reserve judgment until all the facts come out, Bankman-Fried was capable enough to have “raised money or propped up” the company “in a legit way.” Separately, Lin defended Sequoia’s decision to manage its positions in its portfolio companies well past the point that they go public. Lin also confirmed during the event that in a gesture to its limited partners, Sequoia last year reduced its management fees on two funds that it rolled out a year ago — a $950 million ecosystem fund that it uses to back other managers’ funds and a $600 million crypto fund. Lin said that rather than charge its backers on committed capital, which is standard in the industry, it is charging them management fees on the invested capital alone. On that front, he said that just 10% of the crypto fund has been deployed, adding that Sequoia remains “long-term optimistic” about crypto, despite the uncomfortably close correlation between many of the biggest crypto outfits. (Asked whether such codependencies have been a revelation since FTX’s implosion, Lin responded: “The whole economy is interrelated.”) Lastly, Lin shared his views regarding how generative AI — one of the buzziest areas of interest for the venture industry right now — is changing the opportunity for both VCs and investors. Full video of the conversation follows.

India set an ‘incredibly important precedent’ by banning TikTok, FCC Commissioner says

Manish Singh

India set an “incredibly important precedent” by , FCC commissioner Brendan Carr said as he projected a similar fate for the Chinese giant ByteDance app in the U.S. Carr warned that TikTok “operates as a sophisticated surveillance tool” and told the Indian daily Economic Times that banning the social app is a “natural next step in our efforts to secure communication network.” The senior Republican on the Federal Communications Commission said he is worried that China could use sensitive and non-public data gleaned from TikTok for “blackmail, espionage, foreign influence campaigns and surveillance.” “We need to follow India’s lead more broadly to weed out other nefarious apps as well,” he said. Carr’s remarks further illustrate a growing push among U.S. states and lawmakers that are increasingly growing cautious of TikTok, which has amassed over 100 million users in the nation. India has , including TikTok, PUBG Mobile, Battlegrounds Mobile India and UC Browser, with affiliation to China in the past two years amid skirmishes at the border of the two neighboring nations. New Delhi said it had banned the apps because they posed threats to the “national security and defence of India, which ultimately impinges upon the sovereignty and integrity of India.” TikTok had over 200 million monthly active users in India and counted the South Asian nation as its largest international market by users prior to the ban. “India’s strong leadership has been informative and helpful as we have debated banning TikTok in the US,” Carr (paywalled). “For those who argue that there is no way to ban an app, India is an example of a country that has done it and done it successfully.” The U.S. House , citing a “high risk due to a number of security issues.” The move followed nearly two dozen states at least partially blocking the app from state-managed devices over concern that China could use it to track Americans and censor content. “If you look at the history of TikTok’s malign data flows and its misleading representations, I don’t see a path forward for anything other than a blanket ban working,” he told the newspaper.

Remember how this whole working thing works?

Natasha Mascarenhas

Welcome back to  , the podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. As promised, I’m taking over Equity Monday for the beginning of this year as Alex is out on paternity leave. Big hugs to his growing family! We’re starting the year with big post-PTO energy, because there’s no other way I know how to do it. Here’s what we chatted about: More to come! You can follow me on Twitter  or on Instagram   

Doorstead closes on $21.5M to make sure you always have a tenant for your rental property

Mary Ann Azevedo

Doorstead, a property management startup that offers “guaranteed” rental payments to homeowners, has raised $21.5 million in a Series B round of funding. Ryan Waliany and Jennifer Bronzo started Doorstead in 2019, initially testing out its model for setting prices for rental properties on Craigslist. Over time, the company built out a pricing model through data science and machine learning that the pair says gives it the ability to better predict how much rent a given property can command. That’s not to say that it operates without risk. The duo acknowledge that it is indeed a risky endeavor to guarantee rent to landlords considering has to cough up the difference if it can’t get the amount it promised. However, they claim their prediction model works so well that it still comes out ahead. Doorstead makes its money strictly by charging an 8% management fee, so it is not incentivized to list properties at rents that might be higher than is realistic or fair. So, if the company is able to get a higher rent than guaranteed, it doesn’t pocket the difference. Instead, that extra cash goes to the property owner. “Other companies might take that upside but we believe then that incentives are misaligned,” CEO Waliany told TechCrunch. “What we offer is a risk-adjusted guarantee based on the market.” To request a guaranteed offer, property owners enter basic information about their property on Doorstead’s website. If the property is eligible, the company tells the owner the minimum amount they will receive each month and when they will start receiving their payments. Says COO Bronzo: “We cover the difference if we rent out the property for less [than the minimum] or if it takes longer to find a tenant. So, the owner still gets the rent, and we pay the difference out of pocket, or it cuts into our 8%.” Doorstead targets “getting above the baseline listing price 75% of the time,” according to Waliany. “ … It works out financially very well for us, and we’re helping eliminate unnecessary vacancies. Without a guarantee, sometimes property managers drag their feet,” he said. The model does seem to be working considering the startup says it saw 270% property growth in 2022 and that its revenue “outpaced” property growth with “healthy unit economics.” Doorstead says it has served “thousands” of owners over the years, generated over 30,000 guaranteed rental offers and currently has north of $1 billion worth of properties under management. The startup operates in seven markets in California, Washington and Massachusetts with plans to “double or triple” its footprint this year. Doorstead only works with individual landlords of single-family homes, condos or townhomes, not institutional landlords. Waliany formerly worked in product at Uber and Bronzo has experience in property management. The pair believes their combined backgrounds have given them a good perspective on how to run a tech-enabled, “full-service” property management business and then some. Co-founders Ryan Waliany (CEO) and Jennifer Bronzo (COO) / Doorstead “When we started, we thought that, ‘we’re just going to make a tech-enabled property management company. We’re going to build like Uber Eats for property management.’ But when we started talking to customers, we realized that we were wrong,” Waliany told TechCrunch. “We realized that there was a bigger problem that was unaddressed in the market, and that was that property owners were getting overpromised rents. Their properties could sit vacant for three or six months and in some cases, it cost them their home. So we thought, ‘what if we can give them a guarantee upfront before we find a tenant?’” led the round, which included participation from MetaProp, M13 and Madrona. Avanta is the venture arm of CSAA Insurance Group, an AAA insurer (AAA is also known as Triple A, or the American Automobile Association). Eric Wu and Tom Willerer (former CEO/CPO of Opendoor, respectively) are also backers. Doorstead has raised $37 million since inception. Presently, the San Francisco-based startup has about 150 full-time distributed employees, with about 80 in the United States. Besides a geographical expansion, Doorstead wants to focus on capital efficiency and “improving unit economics” with an eye toward profitability. “We’re shooting for growth, but profitable growth,” Waliany said. Steve Bernardez, partner at Avanta Ventures, told TechCrunch via email that he was drawn to back Doorstead in part because he believes that “the rental property management space is a large and growing market historically underserved by legacy providers.” “Despite a huge market opportunity, the rental property management space suffers from poor solutions that misalign incentives, fail to address financial risks and can be painfully inefficient for all parties involved,” he continued. “ … Using data-driven analytics trained on constantly refreshed local real estate data, Doorstead’s guarantee offers property owners confidence that they will get a minimum rental income stream at a guaranteed start date despite any volatile market conditions. Doorstead then helps the property owner prep the property for listing, secures a tenant and manages ongoing repairs and maintenance, all within an efficient user interface that today’s property owners expect.” In conjunction with the raise, Doorstead also announced it has acquired the Boston assets of another venture-backed investment property-focused startup, Knox Financial, which wound down operations at the end of last year.

Will record levels of dry powder trigger a delayed explosion of startup investment?

Raphael Mukomilow

year that was 2022, one might think that the coming months are not looking great for VCs or founders. But, “dry powder” — money raised by VCs that hasn’t yet been deployed — has risen to record levels. Venture capital investors in the United States, for instance, are sitting on a $290 billion powder keg that’s ready to ignite a new wave of tech startups. Investors are understandably cautious. But if handled wisely, the payoff could be big, especially because valuations have normalized drastically. But why has this happened and what does it mean for the tech industry? And why does the current market environment offer an unprecedented opportunity for investors? Tech stocks have been through a storm this past year. The Nasdaq composite index has seen losses of 32% since last January. For instance, Meta, Amazon, Netflix and Google have seen their shares plummet by 63%, 45%, 48% and 34% since the start of 2022, respectively. For only these four stocks, such a decline has meant a decline of $2.3 trillion in market value — that is 1.4 times the cumulative market capitalization of all 40 companies in the TecDAX, Germany’s largest stock market index. Such declines were driven by a correction in valuation metrics. In 2021, the average enterprise value for listed cloud software companies was, at times, as high as 20x NTM revenues. Since the valuation correction in early 2022, multiples have normalized and are now at around 5x to 10x NTM revenues. But last year’s downturn also affected private-market startups. The average valuation of Series C rounds fell by about a third to $336 million in Q2 2022 from $500 million in Q4 2021. The lack of funding, skyrocketing layoffs, inflation and a recession have led some pundits to label the tough climate as the “startup apocalypse.” But despite these challenging circumstances, tech trends show signs of hope. Strong growth in cloud and AI have kept key tech trends steady, largely in part due to huge shifts in the way we work. Spurred by the need to ensure they’re prepared for the future, organizations have poured money into upgrading their digital infrastructure and processes.

Toyota stumbled as Hyundai was stealing the successful Prius playbook

Tim De Chant

taking a beating in the press these days. The new Prius, arguably the company’s standard bearer, has been damned with faint praise. One called it “the best CD player in a download world.” Beyond that, the company has been called out for lobbying to set emissions standards and more generally to to electric vehicles. That’s probably because . The automaker, once viewed as a leader in low-emissions motoring, has fallen from its perch. Now, that may not matter much in the short term. The company is still profitable, netting in the third quarter. But the danger to the company lies in its long-term prospects. Investors have pressed the company on its EV plans, which are anemic enough to endanger its status as one of the world’s largest automakers. Those concerns are undoubtedly reflected in its , which today hovers just a few dollars above where it traded 16 years ago when it was riding the Prius wave. It’s possible that Toyota can pull a rabbit out of the hat and roll out a killer set of EVs. Or maybe the company is right about hydrogen, and it’ll achieve a breakthrough in fuel cell technology while simultaneously building an extensive network of green hydrogen stations. Maybe.

Indian fintech BharatPe CEO Suhail Sameer to leave top job

Manish Singh

Suhail Sameer, the chief executive of BharatPe, will leave the top role later this week as the Indian fintech startup scrambles to steer the ship after kicking out its founder last year for allegedly misusing company funds. The New Delhi–headquartered startup, Sequoia India, Tiger Global, Coatue, Dragoneer and Ribbit Capital, said Sameer will transition to a strategic advisor role on January 7 and the current chief financial officer, Nalin Negi, will take over as the interim chief executive. “We have recognized the need to dedicate time and resources to finding the leader who will continue to catapult BharatPe to new heights, and we are grateful for the commitment from Suhail and Nalin. We look forward to supporting Nalin Negi in his role as the interim-CEO, as we move ahead in our mission of empowering millions of MSMEs with a range of world-class financial products,” said Rajnish Kumar, chairman of BharatPe Board, in a statement. The move follows BharatPe founder Ashneer Grover being forced to after a rather odd public showdown with the startup’s board, which alleged that he had misused company funds. The startup also sued Grover and his wife, Madhuri Jain, for damages worth $10.7 million last month. Sameer took over as the CEO in the second half of 2021. As the relationship between the two soured, Grover alleged that Sameer had as the startup probed allegations of fraud against Grover. Half a dozen top-level executives, including a co-founder and the chief technology officer, have left the firm in the past six months. Indian newspaper Mint about Sameer’s departure earlier Tuesday. Sameer’s departure is the latest in a series of setbacks at the Indian fintech, which once gave stiff competition to incumbents with its QR-code and payments solutions to merchants. BharatPe, once valued at $2.85 billion and which has raised over $580 million to date, continues to reel from the drama surrounding its founder’s ouster and its public spats with him. Rajnish Kumar, former chairman of State Bank of India, has sought to revamp the startup’s management and leadership teams in the past two years but whether his bet will pay off remains unclear.

App Store and Play Store are flooded with dubious ChatGPT apps

Ivan Mehta

ChatGPT is the of discussion in the tech industry. OpenAI’s chatbot that answers questions in natural language has attracted interest from users and developers. Some developers are trying to take advantage of the trend by making — both on the App Store and the Play Store — that aim to make money in the name of pro versions or extra credits to get more answers from AI. It’s important to remember that ChatGPT is and OpenAI hasn’t released any official mobile app. While there are plenty of apps that take advantage of GPT-3, there is no official ChatGPT API. As noted, an app named “ ,” has managed to reach the top charts in the productivity category in multiple countries. (Update: following publication, this particular app was pulled from the App Store. But many referencing “ChatGPT” in their name or description remain.) While the app is free, it offers weekly ($7.99) and monthly ($49.99) packs to have unlimited chats with the AI bot. Some of the reviews of the app suggest that the subscription doesn’t add any value and the app appears to be fake. There is no way to tell if the app produces any tangible results because I couldn’t get past the loading screen. Notably, the developer had a similar app on the Play Store with more than 100,000 downloads ( ), but it has been removed now. Over the weekend, CEO of edtech startup Bloomtech Austen Allred tweeted that the App Store is full of apps — with no association with OpenAI — that are trying to charge money for using ChatGPT. The iOS App Store is full of folks putting ChatGPT into a paid wrapper with ambiguous language that would let you believe you’re paying for ChatGPT — Austen Allred (@Austen) Google Play Store is also filled with with thousands of downloads that don’t offer any usable functionality. Meanwhile on Google Play…fake chatGPT 1star app with >100k downloads. — nisten (@nisten) The playbook of these apps is to include ChatGPT in the app name and appear favorably in search results by bolstering their own ratings. Some folks are also developing multiple apps with similar names in hopes that one of them catches users’ attention. It’s not clear if Apple and Google are actively taking any action on these apps. Both companies didn’t comment on the story. App developers cloning websites or other popular apps is not a new trend. Previously we have seen both Apple’s and Google’s app stores being flooded with clones of , and . The question is about how swiftly and strictly these platform gatekeepers act on them, if at all.

Former FTX CEO SBF pleads not guilty to US criminal charges

Jacquelyn Melinek

FTX founder and former CEO Sam Bankman-Fried plead not guilty to all eight counts of U.S. criminal charges on Tuesday. Bankman-Fried appeared before a judge in the U.S. District Court in New York City on Tuesday with his lawyers, Mark Cohen and Christian Everdell. Criminal charges against the 30-year-old former billionaire include wire fraud, conspiracy to commit money laundering and conspiracy to misuse customer funds, among others. The former FTX CEO is also facing suits by the over similar charges. Prior to the announcement, Bankman-Fried was expected to plead not guilty. This decision could turn into a lengthy legal battle, and he could face up to 115 years in jail if convicted on all charges. His trial date has been set for October 2, 2023. In late December, FTX co-founder and former CTO Gary Wang and Alameda Research CEO Caroline Ellison to federal criminal charges in relation to the FTX collapse. The two are also facing civil penalties from the SEC and CFTC alongside the criminal charges. Wang and Ellison plan to cooperate with prosecutors and will be major witnesses given their close ties to both Bankman-Fried and FTX and its affiliated crypto hedge fund Alameda. Last month, a U.S. judge released Bankman-Fried on a $250 million bail bond after he was extradited to America from the Bahamas. The bail package allowed Bankman-Fried to remain under house arrest at his parents’ home in Palo Alto, California. Bankman-Fried’s lawyers also filed a letter to the Manhattan federal court on Tuesday seeking redactions of the names of two individuals who intend to help secure his multimillion dollar bail in attempts to protect them from public attention. The lawyers argued there’s no need for public disclosure after his parents “have in recent weeks become the target of intense media scrutiny, harassment, and threats. Among other things, Mr. Bankman-Fried’s parents have received a steady stream of threatening correspondence, including communications expressing a desire that they suffer physical harm.” SBF’s representation argued there is, accordingly, “serious cause for concern” for additional retaliation for others involved in the bond. It has been a little under two months since the once-major crypto exchange and Bankman-Fried stepped down as CEO, only to be replaced by Enron turnaround veteran John J. Ray III. On December 13, the U.S. House Financial Services Committee held its first hearing focused on FTX’s collapse. Ray sat as the only witness for the hearing as Bankman-Fried, who was originally scheduled to testify, was unable to join after being arrested in the Bahamas. During the four-hour hearing, Ray’s testimony addressed a number of aspects in the situation from the extent to which customer funds were misused, to internal operations — or lack thereof. When asked if FTX had significant risk management systems, Ray said at the time, “there were virtually no internal controls and no separateness whatsoever.” Later in the hearing, Ray disclosed that there was no board overseeing FTX, aside from Bankman-Fried. FTX, once valued at $32 billion, didn’t have an accounting or human resources department. It did, however, have a legal department and employees with compliance titles — but no department for them to call home. As it stands, Bankman-Fried’s plea is a risky move as he diverts from his former colleagues who plead guilty. In general, many crypto community members view Bankman-Fried’s attitude as cocky — given the media tour he went on before being arrested where he appeared on network shows like “Good Morning America” to platforms as niche as crypto-focused Twitter spaces.

Yet another Zomato co-founder leaves the firm

Manish Singh

Zomato said on Monday its co-founder and chief technology officer Gunjan Patidar has left the firm, the latest in a series of departures at the Indian food delivery firm whose shares have lost over 57% of its value in the past year. Patidar is the fourth co-founder to leave the firm. His departure also follows exits by Mohit Gupta, another co-founder, and two other senior executives last month. “Patidar was one of the first few employees of Zomato and built the core tech systems for the Company. Over the last ten plus years, he also nurtured a stellar tech leadership team that is capable of taking on the mantle of leading the tech function going forward. His contribution to building Zomato has been invaluable,” the Indian food delivery firm disclosed in a stock exchange filing. The exits come at a time when Zomato chief executive Deepinder Goyal, also a co-founder, is attempting to share and delegate top responsibilities with other executives. The company appointed four chief executives in August last year and rebranded its internal, broader organization as “Eternal.” Loss-making Zomato, backed by Ant Group, Temasek and Goldman Sachs, did not say why Patidar — or any of the other recently departed top executives — had left. The company, which went public mid-2021, reported a net loss of $30.4 million for the quarter that ended in September last year. “Luckily Zomato has no shortage of co-founders in its company. There’s Akriti Chopra, another executive who became co-founder last year….Earlier this year, it elevated an executive as co-founder of Blinkit (which Zomato owns) to replace one of Blinkit’s co-founders who left last year,” Indian news and analysis publication The Ken . “At this point, I’m starting to suspect there’s someone at Zomato’s corporate governance team whose full-time job is to periodically update the document that keeps track of who is their co-founder right now, in which company.”

Inflow, a platform for managing ADHD through cognitive behavioral therapy, raises $11M

Paul Sawers

, a company developing a platform to manage ADHD using cognitive behavioural therapy (CBT) techniques, has raised $11 million in a Series A round of funding. ADHD, or “attention deficit hyperactivity disorder,” is a condition impacting of the global population. vary, but typically involve inattention, hyperactivity, anxiety and impulsivity. Founded out of London in 2020 by Levi Epstein, Seb Isaacs and Dr. George Sachs, Y Combinator (YC) Inflow has developed a self-help app designed to help people manage their ADHD through daily exercises and challenges around habit development, ADHD-focused mindfulness techniques, community support and more. Inflow app in action. Inflow In terms of costs, Inflow offers an initial free seven-day trial, which runs into a monthly or annual subscription, the latter costing around $200 per year. Inflow was developed “by people with ADHD for people with ADHD,” according to the company, and its founding team includes , a clinical psychologist with more than a decade’s experience treating ADHD in children and adults. Sachs and Co. feasibility and usability study of the app back in August, and plans are currently in place for a broader randomized control trial ( ) to determine the efficacy of Inflow in terms of outcomes. “To ensure the usability and feasibility of the Inflow app, since launching, we have preliminary results through open study testing that members have experienced a decrease in ADHD symptoms and impairment by following Inflow’s approach,” Sachs said in a statement. “It’s encouraging and edifying to see how providing these techniques to those with ADHD, directly and easily through our app, is making a difference to their lives.” Inflow fits into a broader trend that has seen , and there are a number of companies out there already focused on addressing different facets of ADHD spanning diagnosis, coaching and telehealth — including ,  , , and . But Inflow co-founder Seb Isaacs is adamant that Inflow stands out from the crowd due to a more all-encompassing approach. Indeed, the company recently expanded into telehealth with the acquisition of Lina Health . “We’re building a holistic approach for people with ADHD that encompasses all aspects of their care journey, and we are the only company doing this,” he said. Inflow last January, and with another $11 million in the bank the company said that it plans to double down on product development and bolster its headcount. “Diagnosing and treating ADHD can be a long and costly process, and living with the symptoms can be extremely challenging,” Isaacs continued. “We want to help our members make significant improvements to their quality of life by giving them the tools to better understand themselves, and implement coping strategies that actually work.” Inflow’s Series A round was led by Octopus Ventures, with participation from Hoxton Ventures and Route66 Ventures.

Carta lays off 10% as CTO lawsuit looms

Natasha Mascarenhas

, an equity management platform that was last privately valued at $7.4 billion, has cut 10% of its staff, confirming earlier rumors that a workforce reduction was going to happen. Judging by LinkedIn data, could have impacted around 200 employees. Today’s layoff is around the same size as an event that CEO Henry Ward then to a decline in new customers given the coronavirus’s impact on business. Years later, Ward is striking the same tone. In an email sent to staff today, obtained by TechCrunch, the CEO said that “if our customers suffer, so do we. And right now the entire tech and venture ecosystem is suffering.” The company claims that it cut costs in travel, vendor spend, marketing spend and investments in new bets, but that it ultimately had to reduce headcount. Severance packages include 2.5 months of severance with one additional week of severance per completed year of service, and extended mental healthcare services. Those who rely on Carta for a visa will get a 30-minute consultation with immigration counsel. Those who were not impacted by the layoff have the option to voluntarily resign, with the option of a severance package. The well-funded company is dealing with more than the macroeconomic conditions that have caused thousands of tech companies to lay off employees. , Carta is suing its former CTO, Jerry Talton, who was fired “for cause” almost three weeks ago, on December 23, according to the company. In , the company references Talton’s “wrongful and illegal acts as an executive of Carta,” including discrimination and the sexual harassment of at least nine women, according to a Carta spokesperson. It doesn’t help that several users of Carta’s services, which range from cap table management to fund administration, have been less than impressed by the platform in the recent months. who was transitioning away from the platform and who claims that his team had four different account managers in a less-than-two-year contract, which “certainly didn’t help with continuity and understanding of our fund and needs.” According to Crunchbase data, Carta has raised $1.1 billion from venture capital investors, including most recently a $500 million Series G by Silver Lake. Other investors in Carta include Andreessen Horowitz and Lightspeed Venture Partners. So far, the company says it is used by more than 30,000 companies, over 5,000 investment funds, and half a million employees of its customers. Significant venture backing, as this down market reminds us time and time again, isn’t necessarily a competitive advantage. Carta, and now taking on a current challenge, has thus perhaps unsurprisingly attracted a wide swath of competition in recent years. Its closest competitor, AngelList Venture, has raised dramatically less capital, around $200 million. When TechCrunch asked AngelList Venture CEO Avlok Kohli about , he shrugged — adding that he has nothing new to add. “Ultimately, there’s going to be a small number of folks who actually have the ability to build a calculated product,” Kohli said . “When I say ability, I don’t mean technical abilities, but the institutional knowledge to build something.” The difficulty of building a company in the venture services landscape was only further proved by , a fintech company that helped investors issue special-purpose vehicles. According to Axios, Assure didn’t give investors any reasoning behind its shutdown beyond the following statement: “The industry has evolved considerably over the decade since we founded our company. Current market conditions have resulted in Assure evaluating its business model.” Let’s see if the industry’s evolution, both with more competition and graveyard companies, is a dynamic that Carta can keep up with.

Opportunistic investors are giving up on aging pre-IPO companies, shows a new report

Connie Loizos

It’s a tough time to be a richly priced company that didn’t go public when the getting was good. Not only are there fewer later-stage players with the resources and appetite to support such companies — SoftBank and Tiger Global have pulled back dramatically, for example — but even secondary investors have lost interest. That’s our reading of a by the private securities marketplace Forge, which itself in 2021 by merging with a special purpose acquisition company. Per the report, though 40% to 50% of investor interest on the platform at “various points” in 2020 was directed at companies that had been operating for more than 10 years, in recent months, interest in companies that are 10 years or older has dropped to just 8%. Forge speculates that there are two reasons behind the trend, including that 2020 and 2021 were big years for IPOs and a lot of investors were keen to jump in ahead of public market investors. It also notes that last year, some highly valued companies like Stripe and Instacart massively slashed their valuations in response to “shifting investor appetites for risk assets and dour macroeconomic conditions.” We’d go even further and guess that investors are simply finding better deals on the public markets right now. Why spend money on a potentially overvalued private company that missed its chance to go public when there is so much on sale that’s also far more liquid? Consider Forge itself; valued at $2 billion at the time it was brought to market, the outfit currently has a market cap of $340 million, which isn’t a lot more than the $238 million that VCs had poured into the company when it was still privately held. It’s not all doom and gloom for maturing, privately held companies; there seems to be a tipping point when it comes to how old is too old. According to Forge, while it has seen a major shift into younger companies on the secondary market, it says that in the fourth quarter of last year, the “sweet spot” for companies in the current market — and over time, looks like — are decacorns that are between six and 10 years old. In fact, the report mentions interest specifically in companies like ,  ,  and . Here’s the chart Forge put together to highlight what’s happening: Forge

Spain’s delivery platform Glovo fined again for breaching labor laws

Natasha Lomas

Another penalty for Spain’s homegrown on-demand delivery app and dark store operator, Glovo — which has been fined close to €57 million (~$62 million) for breaching local labor laws by falsely classifying 7,800+ of its delivery couriers in Madrid as self-employed, per local newspaper . Citing sources familiar with the Labor department’s investigation of Glovo, the newspaper reports that the penalty breaks down into a €32.9 million fine for breaking labor laws; €19 million in unpaid social security contributions for the riders it had falsely claimed as self-employed; and €5.2 million for visa violations as the inspectors found Glovo to be employing a number of foreigners without a work permit. The penalty is just the latest in a string for the 2015-founded Barcelona-based delivery platform. The newspaper puts the running tally at over €200 million. Most recently Glovo was fined — also for misclassifying delivery workers as self-employed (so called ) — in that case for a total of more than 10,000 riders operating across two cities: Its home city and Valencia. It has also previously racked up smaller fines for labor infractions in other regions, including Tarragona, Girona, Lleida and Seville. Glovo confirmed the latest sanction. However the delivery platform continues to dispute all penalties for labor law breaches — and a However, as legal challenges by workers and unions have proliferated — striking a series of blows against a model critics liken to — lawmakers in Europe have been waking up to tech-fuelled efforts to ‘platformatize’ the circumvention of labor laws intended to protect workers from exploitation and pushing back. Back , for instance, Spain’s supreme court delivered a major blow by ruling against its classification of riders as self employed. And that was followed, Spain’s coalition government has also — which could see the bosses of unruly gig economy platforms that flout the law and carry on exploiting workers via self-serving employment misclassifications facing up to six years in jail. All the sanctions Glovo has so far faced over the issue relate to the employment model it claimed to be operating prior to the Riders Law entering into force. Its response since August 2021, when the Rider reform came into force, has not been to end the practice of claiming delivery couriers are self-employed. Rather it says it’s adapted its model — claiming to be compliant despite continuing to operate with scores of ‘self-employed’ riders doing the hard graft of delivering customers’ stuff. (It also appears to use some riders who are sub-contracted and employed by third parties). This rebooting of the model has led to criticism that Spain’s Riders Law isn’t working as intended — along with calls for greater clarity to prevent platforms from using operational tweaks as a tactic to reset legal challenges back to ground zero, leaving workers in the same rights limbo. Glovo’s claims of compliance with the reformed labor rules have yet to be concretely tested. But in comments reported by El Diario Spain’s labor minister, Yolanda Díaz, is talking tough on the sector — Zooming out, EU lawmakers have also been dialling up their attention on the sector in recent years, following a by the European Commission to introduce a rebuttable presumption of employment for gig workers across the EU. However the legislative plan and it remains unclear when (or even whether) these disagreements may be resolved (also given there’s relatively limited time left for this current Commission) — a necessary step if the proposal (howsoever it might be amended) is to make it into pan-EU law. That said, with a number of Member States increasingly active on gig worker rights issues it’s clear that pressure on EU lawmakers to find a way to agree harmomized rules — and prevent further fragmentation of the single market over workers rights — is unlikely to let up.