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5 strategies for biotech startups to outlast a market downturn

noreply@blogger.com (Ukpe Thompson) — Thu, 16 Mar 2023 11:27:00 +0000

Dr. James Coates Contributor

Dr. James Coates is the Health and Human Performance principal at Decisive Point, a venture capital and advisory firm that invests in and supports startups with emerging defense technologies.

Founders in the biotech industry are no strangers to challenges. Success is impossible to come by without substantial investment, time, and technical expertise. Although life science startups managed to come out relatively unscathed last year, the enduring economic climate is turning fundraising into a never-ending marathon. Inflationary market dynamics and ongoing fiscal tightening continue to pose significant risks to capital commitments. A successful raise in 2021 feels like ancient history.

As a venture capitalist specializing in early-stage life science companies, I work with startups that have the potential to revolutionize the world against biothreats, pandemics and more. Every day I see new biotechnology that inspires my team and our investors to put capital to work. Many of these startups were well-capitalized last year but are now facing difficulties as they look to raise.

To ensure survival, it’s essential to explore alternative funding methods rather than relying solely on classic fundraising. This is especially true for biotech startups, where investment needs are higher and success timelines can be much longer.

If you’re an entrepreneur in the biotech industry, it could be time to make practical pivots to ensure your company can thrive. Here are five strategies that could help your biotech startup navigate a cooling fundraising environment:

To ensure survival, it’s essential to explore alternative funding methods rather than relying solely on classic fundraising.

1. Set lower fundraising goals

During an economic downturn, trying to raise a large sum might not be feasible, and the time and resources you invest in fundraising could be better used on key business initiatives. By raising less, you can prioritize your survival, conserve your most valuable resource (time), and keep your focus on meeting near-term inflection points. With a smaller pool of investors, you can also maintain a stronger influence over your company’s strategy.

2. Target experienced investors

When raising, it’s crucial to focus on building relationships with investors who share your vision and can offer more than just capital. Investors who have experience in your industry can provide valuable guidance and connections that can help you navigate challenges and take advantage of opportunities — this type of investor is valuable in a downturn since they can advise you on technology-specific strategies.

5 strategies for biotech startups to outlast a market downturn by Jenna Routenberg originally published on TechCrunch

SVB collapse forces African startups to rethink their banking options

noreply@blogger.com (Ukpe Thompson) — Thu, 16 Mar 2023 08:27:00 +0000

The collapse of Silicon Valley Bank (SVB) last week sent ripples in startup ecosystems around the world, and it is emerging that millions of dollars held by African startups and venture capital funds at the bank were at stake, until the U.S. Federal Reserve acted to save the day.

In the wake of the bank’s collapse, founders in Africa have been forced to review their banking options to cushion their startups from such eventualities. Nala, a U.K.-based and Africa-focused mobile money transfer startup that managed to pull its funds out of SVB before it collapsed, told TechCrunch it’s exploring partnerships with new large corporate banks, while the Pan-African fund Future Africa, which suffered “minimal exposure” also hinted that it was keen on opening an account with a global banking institution.

“We’ve gotten inbound outreach by several banks…but you know banks always like to know a lot of information about companies, their revenue, the amount of cash the company would hold with them, and so on to bring them on board,” said Nala CEO, Benjamin Fernandez.

The impact of the collapse has been far-reaching that even unaffected entities are exploring more safeguards. Jumba, a Kenyan construction tech startup, is looking to diversify its deposit holdings, with co-founder Kagure Wamunyu telling TechCrunch the startup is opening an additional account with a “bigger bank” in the U.S. This comes as more startups increasingly prefer holding their funds in multiple bank accounts in big financial institutions, which are generally perceived to be safer.

African startups impacted by SVB collapse

It is not yet clear how many African startups and VCs were affected by SVB’s collapse. A widely circulated report from the due diligence company Castle Hall showed that several funding vehicles for African startups, including 4DX Ventures, banked with SVB before it went bust; it’s unclear if they were affected.

Meanwhile African fintech unicorn Chipper Cash was also among several startups that could not access a portion of their funds. TechCrunch also learned of a Dutch wealth manager offering Egyptian startups investment banking and corporate services, including opening an SVB account; according to this report, about 50 tech firms were affected.

Chipper had insignificant exposure to SVB ~$1m. Most of our funds are in various other banks in US & around the world. SVB was a great supporter & partner of Chipper and entire Silicon Valley ecosystem. Sad to see them go down. My full statement here – https://t.co/gI8oKqmUS3

— Ham Serunjogi (@HSerunjogi) March 12, 2023

A significant amount of venture capital that African startups raise comes from US-based investors, who mandate that these startups domicile the funds in U.S. bank accounts. They have until now recommended SVB because of its history with tech businesses and the incentives and benefits the bank provides to startups that are hard to find in other financial institutions.

Fernandez said the bank provided cash management features alongside better interests on deposits and cheaper wire transfer fees than its counterparts – services that would be costlier for an African startup to access in bigger institutions.

The lender also provided loans, which many startups are unable to get in conventional banking institutions owing to their high-risk profile.

Just last year, SVB was a strategic partner of the International Finance Corporation (IFC) and US-based fund manager Partners for Growth (PFG), entities that provide debt capital to early- to mid-stage companies in emerging markets.

Such incentives for high-risk businesses are among the reasons startups domiciled in other parts of the world held accounts at SVB, according to Deepak Dave, an analyst at Toronto-based Riverside Advisory.

“We don’t have (in Africa) a financial system that is remotely mature enough to deal with startup financing. The reason that SVB can do loans in the U.S. is that the range of assets that has value in those countries is very different from ours, assets like half-created IP can even have a valuation to it. That is simply out of the question over here. First of all, almost certainly, the IP won’t even be licensed to the startup; it will have been licensed to an offshore vehicle controlled by the VC investors,” said Dave.

“Not only do we not have banks that are mature enough to do it, but we also don’t have a regulator who will understand what this type of lending is. They won’t have as deep a financial relationship with institutions here. But they can have a transactional relationship in institutions based here,” said Dave.

However, according to founders who spoke to TechCrunch, including those who even got accepted into accelerators like Techstars and Y Combinator, setting up an SVB bank account for their startups wasn’t a walk in the park. They cited reasons ranging from not meeting specific criteria such as SSN and proof of address in the U.S. to citizenship status and lack of SVB operations in Africa. As such, they turned to platforms such as Brex and Mercury, which recently expanded its FDIC insurance to $3 million, to carry out banking transactions.

“If you want US-based banking, which does instill credibility (still) with investors, those are your options,” said Stephen Deng, co-founder and managing partner at Africa-focused early-stage VC firm DFS Lab. “I think what changes is that founders must know how they manage counterparty risk. Sweep networks, and treasury management, are all top of mind.”

For an African startup, banking with such platforms is dicey as they can be unpredictable. Last year, Mercury restricted accounts linked to African tech startups, including those backed by Y Combinator. An event like this comes down to regulatory grey zones where banking-as-a-service platforms are beholden to KYC/KYB requirements of their partner banks and transactions from emerging markets are viewed as “high-risk.”

Founders say this event – which frequently occurred last year – and the SVB fiasco have reinforced the need to build homegrown solutions (Float is an example.) But that itself comes with its challenges, said Deng. “The further you move away from the service provider, the harder it becomes to have nuance around risk related to ‘Africa.’ The deposit base resulting from African tech is likely not large enough for those bank providers to make modifications to their KYC/KYB controls.”

Mercury restricted a number of accounts linked to African startups and didn’t exactly say why

SVB collapse forces African startups to rethink their banking options by Annie Njanja originally published on TechCrunch

Bing said to remove waitlist for its GPT-4 powered chat

noreply@blogger.com (Ukpe Thompson) — Thu, 16 Mar 2023 07:27:00 +0000

Microsoft’s Bing is enjoying the spotlight for the first time in a decade after it released a GPT-powered interface last month. But the tech giant has so far been cautious about the pace at which it is making the new Bing offering — powered by OpenAI’s GPT-4 tech — available to users. But it appears, Bing is bringing those walls down.

Microsoft, a major investor in OpenAI, appears to have lifted the waitlist from the new Bing, ostensibly allowing anyone to gain instant access to the new experience. Windows Central, which first spotted this change, said users don’t have to wait to try out the new Bing anymore. TechCrunch tested this with a few email IDs (both new and old) and got access instantly. However, not all email IDs we tested got access instantly.

Image Credits: Screenshot by TechCrunch

While the new Bing’s landing page still shows the typical “Join the Waitlist” button, you can sign in and get access instantly. We have asked Microsoft for a comment and will update the story if we hear back.

Microsoft is holding an event called “reinvent productivity with AI” later Thursday at 11 am ET. While today’s agenda is limited to introducing AI-powered tools for Microsoft 356 (Office) and Dynamic 365 — the company’s Salesforce competitor — it won’t be surprising if there is an announcement related to Bing as well.

The Seattle-based company is racing to integrate the AI-powered chatbot into many of its services. Last month, Microsoft introduced the GPT-4 powered bot to Windows 11’s taskbar. Earlier this week, Edge browser’s stable version got the Bing AI chatbot feature.

The OpenAI’s tech is proving to be a hit for Bing, which recently reported reaching 100 million daily active users. This is expected given the hype around AI-powered chatbots and how it has attracted tens of millions of users who wish to give it a whirl. After people were able to “jailbreak” the chatbot into saying problematic things, Microsoft started testing various restrictions on the conversations. Earlier this week it raised the limit to 15 turns in a conversation and 150 messages per day.

Bing said to remove waitlist for its GPT-4 powered chat by Ivan Mehta originally published on TechCrunch

IT-as-a-Service startup Deeploi raises €3M

noreply@blogger.com (Ukpe Thompson) — Thu, 16 Mar 2023 05:27:00 +0000

Deeploi, a Germany-based startup that is building an IT-as-a-Service platform, today announced that it has raised a €3 million seed funding round led by Berlin’s Cherry Ventures, with participation from a group of angels that includes the founders of Taktile, Moss, Vay and sennder.

The company was founded by Julian Luebke and Philipp Hoffmann. Luebke got his start at Rocket Internet and then later joined real estate startup McMakler as its first employee, focusing on operations. Hoffmann, meanwhile, founded an IT company ten years ago, which started out as a traditional IT service provider and then moved toward becoming a managed service provider with a focus on Apple’s platforms. For that, Hoffmann also created the company’s own mobile device management system (MDM).

“I thought it might be a very cool thing to connect everything — to have everything in one platform and automate everything,” Hoffmann explained. “Then I met Julian and I realized that this could work very, very well. I had the idea. I had the expertise — and we have Julian for scaling the business.”

The founders describe Deeploi as an all-in-one IT platform that combines standard IT functions and the company’s premium support with IT agents to answer support calls. The team will cover everything from onboarding, support, endpoint management, network management and offboarding. For its security offering, Deeploi will partner with a cybersecurity company.

“The main difference to a lot of the existing business models is that we offer the companies IT as a service,” explained Luebke. “The companies don’t have to build up an IT department by themselves. We can take these functions over completely — or we can boost existing setups if they actually have already set up an IT department. They can use our platform and they can also use our premium support, for example, and we can take over easy, repetitive, redundant tasks for them.”

Because Deeploi can pull in data from existing systems (say HR) and then integrate this into its platform, it can also help businesses automate a lot of functions. When a new employee gets onboarded in an HR system, for example, the company can then automatically send out a new Macbook to them and set up access to certain SaaS tools.

Luebke noted that modern, cloud-native companies with modern tech stacks are Deeploi’s ideal customers, including brand agencies, marketing firms and D2C companies. For the time being, the company plans to focus on the Western European market, where it is now starting to test its service with a select number of users. The plan is to launch the platform to a wider audience in June.

“Once we have established market dominance in Western Europe and have really built out our product then we don’t really see any limiting factors of going to the US,” said Luebke.

IT-as-a-Service startup Deeploi raises €3M by Frederic Lardinois originally published on TechCrunch

The FTC finalizes Epic’s $245 million settlement over sketchy Fortnite purchases

noreply@blogger.com (Ukpe Thompson) — Thu, 16 Mar 2023 05:27:00 +0000

The Federal Trade Commission slammed Epic Games with $245 million in fines this week, ordering the Fortnite developer to compensate consumers who made unwitting purchases in its digital store. The settlement, first announced back in December, is now finalized.

“Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button,” the FTC wrote in the announcement. The complaint also criticized Epic for allowing underage players to make frictionless, unauthorized purchases without sign off from their parents.

The $245 million settlement — a huge number but one that doesn’t top the regulator’s $5 billion fine against Facebook in 2019 — will go toward refunding customers. The FTC order will also require Epic to discontinue its use of “digital design tricks” like dark pattern design, obtain affirmative consent for digital purchases and it will block the company from locking the accounts of customers who dispute charges for digital goods and services.

The latest settlement, now finalized, follows another massive $275 million in fines that the agency proposed in December over the company’s handling of accounts for Fortnite players under the age of 13. The FTC alleged that Epic ran afoul of the Children’s Online Privacy Protection Act (COPPA) by collecting full names and contact information from children without parental consent. That settlement also cited Epic’s decision to launch Fortnite without parental controls and special protections for the young users who comprise a large swath of its player base.

“The Justice Department takes very seriously its mission to protect consumers’ data privacy rights,” Associate Attorney General Vanita Gupta previously said of the dual settlements. “This proposed order sends a message to all online providers that collecting children’s personal information without parental consent will not be tolerated.”

In early December, just prior to the FTC announcement, Epic announced that it would introduce a new account type designed to protect younger players. That feature, called “cabined accounts,” was added into Fortnite, Rocket League and Fall Guys — three popular online multiplayer titles from the game maker.

“All players globally will be asked to provide their date of birth at log in,” Epic wrote in a blog post at the time. “If someone indicates they are under 13 or their country’s age of digital consent, whichever is higher, their account will be a Cabined Account and they will be asked to provide a parent or guardian’s email address to begin the parental consent process.” Until they obtain parental consent, chat, digital purchases and some other features are disabled for cabined accounts.

Protections relying on users self-reporting their own age are an imperfect solution at best. But gaming and social media companies alike have yet to craft systems that concerns over kids’ safety (and the ensuing regulatory risks) while still allowing young users access to the online virtual spaces where they will inevitably wind up spending time.

Epic games like Fortnite are already well established among young users, but the company is apparently doubling down on the youngest subset of those players. Last year, Epic announced a partnership with LEGO to build “an immersive, creatively inspiring and engaging digital experience for kids of all ages to enjoy together” — a metaverse collaboration that could give rival Roblox a run for its money.

The FTC finalizes Epic’s $245 million settlement over sketchy Fortnite purchases by Taylor Hatmaker originally published on TechCrunch

Dear Sophie: How can I return to the United States as a founder?

noreply@blogger.com (Ukpe Thompson) — Thu, 16 Mar 2023 03:27:00 +0000

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

TechCrunch+ members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.

Dear Sophie,

I lived and worked in the United States on an L-1B for a year, and then changed to an H-1B for 2.5 years before I moved back to India (where I’m a citizen) and founded a startup.

Now I want to return to the U.S. to raise funds for my startup. What are my options for returning to the U.S. as a founder?

— Fast-Moving Founder

Dear Fast-Moving,

Congratulations on launching your own venture and making the move to jump back to the States to expand your startup and secure investors! I recommend working with an immigration attorney to determine the best options based on your long-term goals, as well as a corporate attorney to discuss the best structure for your startup’s U.S. entity to make it attractive to investors. Most U.S. investors prefer to invest in a parent company based in the U.S. that’s a Delaware C corporation.

Depending on which non-immigrant visa you pursue, you may be able to avoid having to go through an in-person consular interview through the end of this year since you went through the interview process for your L-1B intracompany transferee specialized knowledge worker visa. The U.S. Department of State extended the visa interview waiver program until the end of this year. Consular officers have the discretion to waive the visa interview requirement for certain work visas like the O-1A and H-1B if the beneficiary was previously issued a visa and has never been refused one. Unfortunately, the interview cannot be waived for the L-1 visa.

You have a few visa options to return to the U.S. as a founder, so let’s dive in!

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

B-1 visa

If you want to set up your startup’s U.S. entity, find office space, or meet with prospective investors, you can do that on a B-1 visitor visa for business. The B-1 will enable you to enter the U.S. and stay for up to six months. However, you cannot do any work while on a B-1. Your immigration attorney can tell you what activities are allowed.

When you arrive in the U.S., be prepared that the U.S. Customs and Border Protection officer at the airport may ask you what business activities you intend to do during your stay.

While you’re in the U.S. on a B-1 you can change your status to one of the visas below without leaving the U.S.

Dear Sophie: How can I return to the United States as a founder? by Walter Thompson originally published on TechCrunch

Krafton backs Indian influencer marketing platform One Impression in $10M funding

noreply@blogger.com (Ukpe Thompson) — Wed, 15 Mar 2023 05:27:00 +0000

One Impression, an Indian influencer marketing platform that does business in markets including Indonesia, Dubai, Europe and the U.S., has raised $10 million in a funding round led by the South Korean gaming company Krafton.

The Gurugram-based startup is building an Amazon-like platform to help brands quickly find relevant influencers for their marketing campaigns. It touts having more than 7 million content creators on the platform that brands ranging from FMCG to e-commerce can access. These creators include the micro-ones developing content from villages and tier-2 and tier-3 towns, as well as large celebrities and even Bollywood actors that generate more than 100,000 content pieces for more than 500 brands in over 10 languages. The platform is also not limited to influencers from a particular genre and has creators in comedy, beauty, fashion and DIY, among other fields.

“We ensure the right pricing for every influencer, and as a platform, we ensure that as a brand, you get the best match and the best price for every creator that you work with,” said Apaksh Gupta, co-founder and CEO, One Impression, in an interview with TechCrunch.

Founded in 2018 by Gupta and his brother Jivesh Gupta, One Impression works directly with content creators, agencies and agents to offer brands a range of influencers to fit their requirements. This is unlike a traditional influencer marketing agency or a creator discovery tool, where you typically find just a single source to pick. Also, the startup offers full-stack solutions ranging from discovery, pricing and payments to compliance, government contracts, delivery and performance tracking.

“We’re bridging the gap between brands and creators. We’re trying to make the partnerships between brands and creators the most seamless, fastest, repeatable and scalable,” the executive said.

One Impression co-founders Jivesh Gupta (left) and Apaksh Gupta (right) Image Credits: One Impression

In addition to helping brands reach the right influencer, One Impression is building tools for creators to help them monetize their content and unlock opportunities to collaborate with other creators and make finance easier using automation. The startup is also working on tools to let creators easily access studios across India and even get PR opportunities, said Gupta.

Currently, One Impression has enabled its platform for Instagram and YouTube. It also plans to unlock it for LinkedIn and Moj in India and TikTok for global markets over time.

“As different platforms continue to become important for any market, we’ll continue to integrate those new platforms into our platform,” Gupta said.

One Impression takes a fee from brands for connecting them with influencers and charges commissions to content creators that grow once the creators become more relevant for large-scale campaigns. This makes it a two-sided marketplace for both brands and creators. It is also working on launching premium tools to offer brands a subscription-based model for regular earnings.

The Krafton-led, all-equity Series A funding round also saw participation from Peer Capital. It valued the startup at $70 million post-money.

On whether the investment coming from Krafton was strategic, Gupta told TechCrunch that the gaming giant has come as a financial investor.

“The creator ecosystem is at the cusp of a revolution. It holds massive untapped potential, and we believe that One Impression is rightly positioned to be a global leader of the influencer industry. One Impression has an ambitious vision for the space, and we are delighted to support them in their journey,” said Sean Hyunil Sohn, CEO of Krafton India, in a prepared statement.

Since 2021, Krafton has invested over $100 million in various Indian startups to become more than a gaming company. However, the company has faced the banning of its widely popular gaming title Battlegrounds Mobile India (BGMI) in the country — just months after it struggled to bring its original PUBG Mobile title back that also got banned by the Indian government in 2020 over national security concerns.

“At Krafton, we are committed to the Indian market and see tremendous potential here. We have invested around $100 million in various Indian startups since 2021. And our investment in One Impression is a step towards augmenting this ecosystem and creating opportunities of growth,” Sohn said.

One Impression, which claims to have created a profitable business without marketing, plans to utilize the fresh funds to build a marketing team and scale its sales team to expand its presence in global markets, starting with Southeast Asia and the UAE. It also looks to make acquisitions in Dubai to boost its market presence. The planned expansion is projected to help the startup grow its average revenue rate to $40 million.

In 2022, One Impression raised $1 million from angels, including Peeyush Bansal of Lenskart, Anupam Mittal of People Group and celebrities such as Olympian Neeraj Chopra and comedian Zakir Khan, among others.

Krafton backs Indian influencer marketing platform One Impression in $10M funding by Jagmeet Singh originally published on TechCrunch

TuSimple co-founder blames exit on CEO pay and autonomy downgrade

noreply@blogger.com (Ukpe Thompson) — Wed, 15 Mar 2023 03:27:00 +0000

TuSimple co-founder Xiaodi Hou has refuted allegations from senior leadership that he was trying to poach staff for his new company. In a LinkedIn post, Hou said that he resigned from TuSimple’s board last week due to disagreements about CEO Cheng Lu’s compensation package, as well as the company’s shift from Level 4 autonomy to Level 2 autonomy.

“I believe that the so-called investigation was retaliation instigated by TuSimple’s Chairman and CEO in response to my disagreements over several decisions,” wrote Hou in a LinkedIn post.

Yesterday, TechCrunch reported that Hou resigned amid an internal investigation that sought to verify whether he had approached TuSimple employees about joining his new venture. TuSimple fired Hou last year from his CEO, president and CTO posts after the board learned that TuSimple had transferred confidential information to Hydron. The hydrogen-powered trucking startup is led by TuSimple co-founder and majority stakeholder Mo Chen and is backed by Chinese investors.

Hou told TechCrunch that he has not begun another venture, implying that it is illogical to accuse him of poaching staff.

“I am regularly approached by current TuSimple employees who are disappointed with the current leadership and direction of the company,” wrote Hou in a statement. “They come to me because we were a family, and we still are. Over the past few months, many employees reached out to me for my advice about their careers and the changes at the company. Many asked about my own plans. In every engagement, I stayed true to my responsibilities and duties as a director.”

Hou went on to accuse TuSimple’s management of cornering, harassing and threatening certain employees in the course of their investigations.

Hou said his resignation was fueled in part by his rejection of current CEO Cheng Lu’s “lucrative” compensation package, which was awarded to the executive within days of layoffs that wiped 25% of the company’s workforce.

According to a filing, Lu gets an annual base salary of $450,000, a target annual bonus of around $400,000 and a monthly housing allowance of $9,000. If Lu is fired without cause, or if there’s a change in control of the company (like if the company is sold), Lu gets $15 million.

Lu’s compensation and severance package was agreed upon on December 14, 2022, according to filings. Lu, Hou and Chen were the only remaining board members at the time after they had previously fired everyone else. A source familiar with the matter asserted that Lu and Chen changed the company’s governance in a way that would allow them to circumvent Hou’s vote against Lu’s compensation package. The company’s new board members, Wendy Hayes and Michael Mosier, joined the board the next day. We’ve reached out to TuSimple for comment on the source’s claim.

TuSimple co-founder resigns, accused of poaching staff for new venture

Hou also said he was openly critical of TuSimple’s “decision to shift the focus from level 4 autonomous driving to level 2 assisted driving.”

Level 4 autonomy means the system can drive itself without requiring a human to takeover within a set of specific circumstances — like a geofenced area. Level 2, or advanced driver assistance systems (ADAS), can perform some automated tasks like lane assist, cruise control or emergency braking, but they require the human driver to maintain most of the control over the vehicle.

TuSimple has not publicly announced any intention to shift from Level 4 to Level 2, but doing so would completely change the company’s business model.

In December, TuSimple’s deal with Navistar to jointly develop and produce purpose-built autonomous semi trucks by 2024 fell through, leaving TuSimple without a clear direction for commercialization.

Lu denied to TechCrunch that TuSimple is planning to shift its focus away from L4. He said the company will soon announce its progress on its autonomous domain controller, which has the ability to support L2 solutions. Lu also pointed to TuSimple’s May 2022 analyst day presentation which outlined the company’s goal to produce L2+ ADAS in partnership with Nvidia. He reiterated that TuSimple is still very much focusing on L4.

TuSimple co-founder blames exit on CEO pay and autonomy downgrade by Rebecca Bellan originally published on TechCrunch

Mental health startup Intellect partners with Asia’s largest private healthcare group

noreply@blogger.com (Ukpe Thompson) — Wed, 15 Mar 2023 02:27:00 +0000

Intellect, the Singapore-based mental health platform that now serves over three million users in 20 countries, is getting ready for a new phase of growth after striking a strategic partnership with IHH Healthcare, Asia’s largest private healthcare group. IHH Healthcare will work with Intellect to develop and customize digital mental health programs for its patients, corporate clients and staff.

IHH Healthcare also made an investment into the startup, without disclosing the amount. IHH Healthcare is Intellect’s first strategic investor. Its other backers include Tiger Global, Y Combinator and Insignia Ventures.

Founded in 2019, Intellect’s markets now include Malaysia, Singapore, India and Hong Kong. Its platform offers telehealth coaching, services like therapy or psychiatry and mental health screening that can be done online or in-person at an Intellect clinic. It also has self-guided cognitive behavioral therapy-based programs. Intellect has a consumer app, but focuses primarily on enterprise customers who offer its platform to their employees as a wellness benefit.

IHH Healthcare’s Ashok Pandit with Intellect founder Theodoric Chew

Intellect CEO and founder Theodoric Chew told TechCrunch that the startup has been in touch with IHH Healthcare for a while because of its leadership position in its markets, and started exploring partnership opportunities over the last year. One goal is to offer a larger continuum of care from preventative to specialized care across the regions that the companies serve. Chew said IHH Healthcare and Intellect will focus on APAC first, but other regions, too.

So far, IHH Healthcare’s work with Intellect have included a pilot initiative with maternity patients at Gleneagles Hospital Singapore, and plans to offer the platform to corporate clients of IHH Singapore’s iXchange and IHH’s employees.

In a statement, IHH Healthcare group chief strategy and business development officer Ashok Pandit said, “Mental health issues affect one in every four persons. We are pleased to invest in Intellect, a market leader in this rapidly growing category, to boost their growth and enhance access to millions more people who require support, care or treatment.”

Backed by Tiger Global, Intellect is creating culturally competent mental health care for Asia

Mental health startup Intellect partners with Asia’s largest private healthcare group by Catherine Shu originally published on TechCrunch

LexxPluss expands into US with its warehouse robots

noreply@blogger.com (Ukpe Thompson) — Wed, 15 Mar 2023 01:27:00 +0000

When Masaya Aso worked on autonomous driving technology at Bosch in Japan and Germany, he realized that “many tasks were still manual as over 85% of warehouses have almost no automation at all.”

To help address the problem, Aso co-founded LexxPluss, a now two-year-old, Japan-based startup that designs and develop autonomous mobile robots to transport loads and optimize workflows within warehouses and logistic sites.

Aso, who is CEO of the outfit, co-founded it with robotics and autonomous vehicle veterans from Bosch, Amazon, Honda and more, and now the Japanese outfit is preparing to enter the U.S. with a fresh injection of about $10.7 million (1.45 billion JPY) of Series A funding that values the company at approximately $38.8 million (5.26 billion yen).

Drone Fund led the latest financing along with SOSV’s HAX, Incubate Fund, SBI investment and DBJ Capital.

LexxPlus initially targeted the logistics and automotive manufacturing spaces because those spaces are actively deploying robots beyond their production lines. Its main customers are in Japan in the logistics and automotive sectors; some of the current automotive components makers have facilities in the U.S., Aso said. It wants to use its existing clients’ relationships to enter the U.S. market, the largest autonomous mobile robots market, which was already $762 million in 2021 and is expected to grow to $3.2 billion by 2028, accounting for about 40% of the global market size.

In addition to the U.S. expansion, said Aso, the Series A money will help the company’s product development, increasing its payload to 500kg (a high-demand feature from e-commerce players), and adding a 3D visualization of a “digital twin” of operations for remote control and monitoring.

In terms of its competition, OTTO Motors, OMRON and Locus Robotics have also built autonomous mobile robots. Aso said LexxPluss’ differentiation centers on larger payloads (up to 500kg) and more open mechanical design intellectual property (IP) and application programming interfaces (APIs) that make maintenance and integration easier for customers. He adds that some of the company’s rivals tend to have closed IP, which is a pain point for their customers.

“Since we disclose lots of technical information, our partners can take a look into every detail of our technology,” Aso explained. “So they can understand how it works and how it can be deployed and used in their warehouse or factories. They can even [handle] maintenance by themselves. Our approach is to maximize product transparency and make collaboration much easier.”

The startup launched its sale strategy last year and now has seven clients and 32 partners, which are part of an open industrial robotic program that it launched last June. “The program is to accelerate collaboration with industrial robotics companies by disclosing most of our technical information, such as 3D CAD design, Electrical Design, embedded software, manufacturing process documents, deployment tools, maintenance documents, APIs, and so on,” Aso told TechCrunch.

The startup currently generates sales via a monthly subscription model or half upfront and half monthly subscription fee, Aso noted.

Naturally, the company’s investors think the company has a good shot at nabbing a meaningful slice of a big market. Recent research forecasts that the autonomous mobile robots market is projected to reach $8.70 billion by 2028, up from $1.97 billion in 2021.

“LexxPluss has a significant advantage over other warehouse automation companies as they leverage a large technical team in Japan, renowned for both industrial robotics (37% of the global market) and the automotive sector (35% of the U.S. automotive industry),” said Duncan Turner, general partner at SOSV and managing director of HAX.

“Their technical strength, combined with insight from decades of industry experience, will help them crack the U.S. market where seamless integration is key.”

Starship Technologies raises another $42M to fuel the growth of its fleet of self-driving delivery robots

Locus raises another $117M for its warehouse robots

LexxPluss expands into US with its warehouse robots by Kate Park originally published on TechCrunch

India’s HealthPlix raises $22M to accelerate growth and enhance healthcare delivery

noreply@blogger.com (Ukpe Thompson) — Wed, 15 Mar 2023 01:27:00 +0000

HealthPlix, an Indian startup offering its in-house platform for doctors to help record patient data digitally, has raised $22 million in fresh investment to broaden its reach in the country and allow more doctors to utilize its software to offer improved care to their patients.

In India, roughly 300,000 doctors practice medicine regularly. However, this figure appears minuscule compared to the country’s rapidly expanding population. This has resulted in doctors not finding enough time to adequately assess each patient. HealthPlix wants to solve this problem through its platform, which is available in a freemium model.

The Bengaluru-based startup lets doctors create a 360-degree medical profile of their patients that can be helpful during consultations and for treating chronic diseases. The platform also offers a collective intelligence to doctors that helps them understand characteristics such as what diseases are cropping up in what areas and what treatment regimens are being used by different patients and doctors.

“We help doctors diagnose diseases earlier than otherwise they would by being their true assistant,” said Sandeep Gudibanda, co-founder and chief executive of HealthPlix, in an interview with TechCrunch.

Founded in 2017, the startup has already empowered more than 10,000 doctors who treat 2.5% of the country’s entire population using the proprietary software. It aims to serve over 25,000 doctors by 2024 and reach 50,000 by 2025 to treat nearly 15% of the Indian population. Of the total number of doctors on board, 70% are outside metro cities, HealthPlix said.

Gudibanda said HealthPlix handles a volume of 110,000 patients per day and has facilitated over 70 million consultations to date. The platform reaches about 334 towns in 28 states across the country.

Although the market of electronic medical record (EMR) platforms in India has a number of players that all claim to help doctors treat their patients efficiently, HealthPlix believes that its doctor-first approach gives it an edge over the competition.

“Every time you make a decision, whether it’s a small feature, a revenue opportunity, whether you build a tech stack or any decision you’re making, are you putting doctors first?” asked Chaitanya Raju, executive director at HealthPlix.

The startup targets doctors who own clinics and look for new-age solutions to enhance efficiency. This helps them get a wider reach as the country’s healthcare primarily is undertaken in small clinics and nursing homes instead of at large-scale hospitals, where Indian patients typically visit when their symptoms and illness have gotten worse.

Alongside giving a digital solution for keeping patient history and consultations, HealthPlix uses AI to make it easier for doctors to write prescriptions and search for appropriate medicines and diagnoses. The AI deployment also speeds up identifying patients based on their medical data and helps define critical elements that may be relevant for the patient or help the doctor during the treatment.

HealthPlix lets doctors write a long prescription of, say, 100 characters with just eight clicks instead of writing those characters manually, said Raju. Additionally, the platform offers translation of prescriptions to let patients easily understand what their doctors have prescribed them.

Approximately 60% of the prescriptions processed by HealthPlix are originally written in English by doctors. However, once printed, the prescriptions are automatically translated into the patient’s local language, Gudibanda said.

All the data available on the software is fully encrypted, and the startup’s modeling is only on anonymized data, Raju said.

The Series C round, led by Avataar Venture Partners and SIG Venture Capital, is divided into $20 million raise against equity and $2 million in debt. It also saw participation from existing investors including Lightspeed Venture Partners, JSW Ventures, Kalaari Capital and Chiratae Ventures.

“We have seen many business models that have failed to scale in the health-tech ecosystem, and we believe that Sandeep has built a great team to deliver on HealthPlix promise,” said Mohan Kumar, investment advisor to Avataar Venture Partners, in a prepared statement.

HealthPlix looks to utilize 80% of its fresh funding to grow the doctor base and invest more in sales, product and engineering teams. Currently, the startup has a headcount of 392 people. It will also invest in clinical decision support to help doctors treat the patients better. Moreover, it plans to explore a couple of models to explore how it can disrupt the insurance and the payer side, Gudibanda said.

“We invested in HealthPlix to help further the team’s vision of being the active catalyst for technology adoption in healthcare by allowing doctors to be more productive, thereby driving better outcomes for patients,” said Bhavani Rana, investment advisor, SIG Venture Capital.

Gudibanda said the startup’s revenues grew 3.5x over the last year and are expected to rise 2.5x to 3x next year. So far, HealthPlix has raised about $36 million. The valuation after the latest funding was not disclosed.

India’s HealthPlix raises $22M to accelerate growth and enhance healthcare delivery by Jagmeet Singh originally published on TechCrunch

Europe’s Bolt expands to Nepal with ride-hailing service

noreply@blogger.com (Ukpe Thompson) — Wed, 15 Mar 2023 00:27:00 +0000

European startup Bolt is expanding to Nepal and launching its ride-hailing service in the country. The company’s previous market expansion was its launch in Thailand in 2020.

On Wednesday, Bolt announced the pilot of its on-demand ride-hailing service in Nepal’s capital, Kathmandu. The startup has kicked off the service with more than 400 local drivers.

Nepal, which has a per-capita national disposable income of $1,683, already has two foreign companies operating in the country’s ride-hailing market — Mountain View-headquartered InDrive and Bangladesh’s Pathao. However, Bolt announced that it won’t charge any commissions to its partners to attract existing ride-hailing drivers to its platform for at least the next six months. It also said that drivers would get 15% lower service fees than other competitors on the market.

Similar to the experience available to customers in Europe and Africa, Bolt will let riders in Nepal get safety features such as a dedicated SOS button and a “Share my ride” feature for real-time trip sharing. The Bolt app will also allow both riders and drivers to access in-app calls and messaging without disclosing their phone numbers.

Nepal’s ride-hailing market is limited to the country’s largest urban economy, the capital city, where there is strong demand from locals and tourists. Domestic startups, including Tootle and Sahara, are also catering to the market, alongside InDrive and Pathao. Nevertheless, Bolt does see a market opportunity as it is going forward with the launch of its service in the country.

“It’s far from our smallest market, far from our biggest market,” said Jevgeni Kabanov, president of Bolt, in an interview with TechCrunch. “We’re looking for basically the markets where we believe we can offer a better service.”

He added that the startup wanted to be the most affordable option for everyone living in Kathmandu.

Market experts and investors in the ride-hailing space in Asia believe getting money from Nepal is challenging. Kabanov said that Bolt used to localize its business to the actual specifics of the country and is prepared to do the necessary work — whether to comply with local regulations or work with local payment methods and taxation.

Bolt has not made any significant investments in Nepal at the moment, and is coordinating operations from its Estonian headquarters. Nonetheless, the startup may expand its business in the country after seeing some initial growth in adoption among drivers and riders. It also has grocery and food delivery as two other verticals that could eventually launch in Nepal as well.

“As we grow the ride-hailing vertical, we generally, in the medium to long term, are very likely to also launch the food delivery and grocery delivery,” Kabanov said.

Bolt’s launch in Nepal is opportunistic as the startup can count on an existing supply of drivers to start its ride-hailing business. It can also use this launch to better understand neighboring countries from the ground. However, the startup does not have plans to expand to larger markets, including India, anytime soon.

“We are definitely keeping an eye on all the major markets, doing research and trying to understand what’s the competitive situation, what’s the opportunity to improve on the service offering,” Kabanov said while asked about the plans to launch in India.

Founded in August 2013, Bolt (formerly called mTakso and Taxify) has around 100 million customers in 45 countries and 500 cities across Europe and Africa. The startup raised more than €1 billion from investors, including Sequoia, World Bank’s IFC and European Investment Bank. It is currently valued at €7.6 billion.

Europe’s Bolt expands to Nepal with ride-hailing service by Jagmeet Singh originally published on TechCrunch

TuSimple co-founder resigns, accused of poaching staff for new venture

noreply@blogger.com (Ukpe Thompson) — Tue, 14 Mar 2023 04:27:00 +0000

TuSimple’s co-founder, Xiaodi Hou, resigned from the company’s board of directors last week amid an internal investigation which sought to verify claims that Hou approached TuSimple employees about leaving the company to join his new venture, per an SEC filing.

Sources familiar with the matter told TechCrunch a “whistleblower” informed upper management about Hou’s solicitations of employees over the past few months to join a company he was starting. Hou had allegedly been pressuring certain employees to stop working so hard, either because they would soon join his new venture or because he wanted to see the autonomous trucking company fail without him, the sources say.

TuSimple began an internal investigation, during which it confirmed at least two employees — top talent in “high tech” teams — had been approached by Hou, but the co-founder resigned from the board before TuSimple could conclude the investigation.

TuSimple has not decided whether to move forward with the investigation, but if it does, it will be to determine if any other employees had been compromised, according to a source familiar with the matter.

Hou did not respond to TechCrunch’s requests for comment, but the co-founder could certainly be accused of having an axe to grind. In November, TuSimple’s board fired Hou from his CEO, president and CTO posts following the board’s discovery that TuSimple had transferred confidential information to Hydron, a hydrogen-powered trucking startup led by TuSimple co-founder and controlling shareholder Mo Chen and backed by Chinese investors.

At the time, Hou said he was removed “without cause,” and called the board’s processes and conclusions “questionable at best.”

“As the facts come to light, I am confident that my decisions as CEO and Chairman, and our vision for TuSimple, will be vindicated,” Hou said in a LinkedIn post in November.

TuSimple’s board had conducted its own investigation in response to a probe from the Committee on Foreign Investment in the U.S. (CFIUS). CFIUS reviews foreign investments for national security concerns and can impose safeguards and recommend that the president block certain investments. The Biden administration is actively working to prevent U.S. technology from advancing China’s military power, including the use of autonomous vehicles.

That investigation is still ongoing, and it has prompted potential criminal charges. Last month, representatives who are part of the CFIUS review panel urged the Justice Department to consider economic-espionage charges against Hou and Chen, as well as current CEO Cheng Lu.

Lu previously served as TuSimple’s CEO from September 2020 to March 2022 before he was ousted. He returned to the helm in November. At the same time, four independent directors were removed from the board, and Chen was appointed executive chairman of the board.

While TuSimple likely hopes Hou’s resignation will help the company close the chapter on national security investigations, TuSimple has other concerns on its plate. Earlier this month, the company received a non-compliance warning from the Nasdaq for failing to file its fourth quarter and full year 2022 financial results in time. TuSimple is still bringing on a new auditor after KPMG resigned due to the company’s risk factor, sources say. The company hopes to report earnings by May, which is the deadline the Nasdaq provided to regain compliance.

TuSimple co-founder resigns, accused of poaching staff for new venture by Rebecca Bellan originally published on TechCrunch

Fortnite’s maximalism still works in its new cyberpunk season

noreply@blogger.com (Ukpe Thompson) — Tue, 14 Mar 2023 02:27:00 +0000

After a handful of eclectic recent chapters, Fortnite’s latest is taking a theme and running with it. Chapter Four, Season Two of Fortnite went live over the weekend, revamping the game’s central island (which got a full makeover last season) while going full futuristic.

The result is a cyberpunk fever dream, with Fortnite’s bucolic rolling hills punctuated by 20-story tall glowing skateboard rails, neon katakana and towering holographic samurai, because cyberpunk aesthetics in this particular genre of fantasy future still necessitate a melange of Japanese imagery, apparently.

With the exception of a few less fun dud seasons here and there, Fortnite generally brings a lot to the table for casual players, who can either play for free or buy its seasonal battle pass for $9.50. The new season is no different, with a new area featuring hot springs and cherry blossoms (Japan again!), a handful of new inscrutably-named weapons and some unique perks known as “reality augments” to make gameplay more interesting. So far, it’s as fun as it is chaotic, which of course is Fortnite’s raison d’être (that and selling a bunch of irresistible virtual stuff).

The new season continues the recent theme of expanding mobility across the island, with street bikes replacing last season’s dirt bikes and a wild new version of aerial parkour that makes for dynamic battles high up in Mega City, the new Tokyo-ish futuristic hot drop combat hub. Epic’s ongoing upgrades to the battle royale mode’s means of getting around make the game feel more dynamic (i.e. less running from the storm on foot) and serve as a showcase for whatever Unreal Engine is capable of at the moment, from more fluid in-game movement to increasingly destructible environments and the like.

That Epic has managed to keep the game feeling fresh for this long without any kind of thematic identity beyond Fortnite’s polished cartoon look and zany vibes is pretty remarkable. Other long-running live service games (think Final Fantasy XIV, Destiny 2, World of Warcraft and even relative newcomers like Genshin Impact and Apex Legends) generally hew more closely to a genre or theme, whether it’s sci-fi, high fantasy or post-apocalypse lite.

Epic changes up the live service battle royale’s feel from chapter to chapter and often even within the shorter three-month seasons in between each of the game’s major shakeups. But unlike more traditional games, Fortnite doesn’t need to maintain any ongoing theme, particularly coherent story or visual identity from season to season. One of Epic’s cleverest turns is that the game’s unifying feature can be summed up as “more is more.”

One season might center medieval knights or shirtless body building catmen while the next is about shimmery goo you can scoot around in. That model also lends itself well to Epic’s relentless and surely lucrative smorgasbord of tie-ins with major pop culture touchstones, from the Mandalorian and the Marvel Cinematic Universe to Indiana Jones and a whole cast of anime favorites. For an idea of the breadth of these crossovers, at the time of writing the Fortnite store was selling an avatar of Horizon Zero Dawn’s Aloy and a very solid likeness of Michael B. Jordan from the Creed films that steered well clear of the uncanny valley.

The time for talking is over

Get the Adonis Creed Outfit before it rotates out of the Shop. pic.twitter.com/Mgx4U5MUIV

— Fortnite (@FortniteGame) March 11, 2023

Other games have taken a bite out of the live service shooter pie in recent years (Valorant and Apex Legends, to name a few), but Fortnite’s formula still works six years after its battle royale mode debuted. There’s way more stuff in the game these days — ads for virtual concerts, avatar packs, TV characters, wild boar — but Epic seems to be successfully leveraging that maximalism to keep the game relevant. A few seasons ago, how could you not tune in on Twitch or drop in from the battle bus to see Dragon Ball Z’s Goku leap onto a cel-shaded cloud and blast Darth Vader into atoms?

Kratos on his way to the #fortnite island so he can eliminate Darth Vader with a Pistol, 1V1 Goku with a trash can, eliminate Ariana Grande with Dekus smash and beat the shit out of Mancake. pic.twitter.com/F1PSkna1kB

— BetterFNnews (@BetterFNnews) December 27, 2022

Fortnite’s recent focus on quests and in-game errands is another bit of the puzzle. There’s a lot of stuff to do each season beyond just shooting other players. You can grab a few friends, hop into the game and roll around the map in a giant hamster ball, knocking off whatever unhinged tasks wind up on the game’s weekly to-do lists. By doing that stuff and unlocking the skins and other virtual miscellany on the seasonal battle pass in the process, you wind up having a good time, even if your crew can’t aim to save your life.

It’s a good game loop and one that’s fun to dip in and out of as a casual player every few months so things don’t get too stale (or too tense — no stakes Fortnite tends to be the most fun, from my experience). Hardcore players can bicker over gun balancing and SBMM formulas, but the game’s real appeal is just bouncing around the map and seeing what happens. It’s usually something funny or dumb, most often both.

These days, it’s hard to get a read on just how many people are playing Fortnite, particularly in light of its app store absence, but the game remains popular enough to stay in Twitch’s most-watched rotation along with a handful of other online multiplayer hits similarly powered by regular infusions of fresh content. The player base may ebb and flow, but Epic likely banks on the fact that the right character can pull plenty of intermittent players back into a seasonal subscription. And Fortnite’s creative mode is a whole other world unto itself, with about half of Fortnite playtime already spent in player-made maps, even though Epic’s creator monetization options aren’t exactly inspiring at the moment. We’ll definitely be hearing more about Fortnite Creative as approachable game design systems continue to unfurl in the coming years.

Fortnite still has a place in the esports world, of course, but at its heart the game is a playground for unexpected pop culture crossovers and viral moments. A battle royale inexplicably full of Disney IP really should feel like a cynical cash grab, but mostly it winds up being a good time. And if we’re still talking about the metaverse (are we still talking about the metaverse?), Epic has laid some serious groundwork here with a technically impressive virtual amusement park — complete with gift shops, of course — which years after launch still doubles as one of the most fun shooters around.

Fortnite’s maximalism still works in its new cyberpunk season by Taylor Hatmaker originally published on TechCrunch

Microsoft lays off an ethical AI team as it doubles down on OpenAI

noreply@blogger.com (Ukpe Thompson) — Tue, 14 Mar 2023 02:27:00 +0000

Microsoft laid off an entire team dedicated to guiding AI innovation that leads to ethical, responsible and sustainable outcomes. The cutting of the ethics and society team, as reported by Platformer, is part of a recent spate of layoffs that affected 10,000 employees across the company.

The elimination of the team comes as Microsoft invests billions more dollars into its partnership with OpenAI, the startup behind art- and text-generating AI systems like ChatGPT and DALL-E 2, and revamps its Bing search engine and Edge web browser to be powered by a new, next-generation large language model that is “more powerful than ChatGPT and customized specifically for search.”

The move calls into question Microsoft’s commitment to ensuring its product design and AI principles are closely intertwined at a time when the company is making its controversial AI tools available to the mainstream.

Microsoft still maintains its Office of Responsible AI (ORA), which sets rules for responsible AI through governance and public policy work. But employees told Platformer that the ethics and society team was responsible for ensuring Microsoft’s responsible AI principles are actually reflected in the design of products that ship. The team had been recently working to identify risks posed by Microsoft’s integration of OpenAI’s technology across its suite of products.

The ethics and society team wasn’t very large — only about seven people remained after a reorganization in October. Sources who spoke with Platformer said pressure from the chief technology officer Kevin Scott and CEO Satya Nadella was mounting to get the most recent OpenAI models, as well as next iterations, into customers hands as quickly as possible.

Last year, the reorganization saw most of the ethics and society team transferred to other teams. On March 6, John Montgomery, corporate vice president of AI, told the remaining members that they’d be eliminated after all. Members of the team told Platformer they believed they were let go because Microsoft had become more focused on getting its AI products shipped before the competition, and was less concerned with long-term, socially responsible thinking.

Teams like Microsoft’s ethics and society department often pull the reins on big tech organizations by pointing out potential societal consequences or legal ramifications. Microsoft perhaps didn’t want to hear “No,” anymore as it became hell bent on taking market share away from Google’s search engine. The company said every 1% of market share it could pry from Google would result in $2 billion in annual revenue.

Microsoft couldn’t be reached for comment.

Microsoft lays off an ethical AI team as it doubles down on OpenAI by Rebecca Bellan originally published on TechCrunch

California court upholds Prop 22 in win for Uber, Lyft, DoorDash

noreply@blogger.com (Ukpe Thompson) — Tue, 14 Mar 2023 01:27:00 +0000

A California appeals court on Monday reversed a lower-court ruling that found Proposition 22, the ballot measure passed in November 2020 that classified Uber and Lyft drivers as independent contractors rather than employees, to be illegal.

The decision by three appeals court judges, first reported by The Wall Street Journal, is a win for app-based companies that rely on gig workers to ferry passengers and deliver meals, but do not pay for costs that an employer would, like unemployment insurance, sick leave and other business expenses.

In August 2021, Frank Roesch, a superior court judge, ruled that Prop 22 was unconstitutional and therefore “unenforceable.” Roesch said Prop 22 limited the state legislature’s authority and its ability to pass future legislation. The companies appealed that decision, which led to today’s ruling in the California First District Court of Appeal.

The reversal of that decision not only preserves the independent contractor model in California, but could push the efforts of companies like Uber, DoorDash and Lyft in other states. All three companies saw shares jump in after-hours trading following the court decision.

Still, the battle over Prop 22 isn’t yet over. The Services Employees International Union (SEIU), which filed a lawsuit challenging Prop 22 in early 2021, is expected to appeal the decision to the California Supreme Court. The higher court would have several months to decide whether to hear the case, but in the meantime, Prop 22 will remain in effect.

Prop 22 made it to California’s 2020 ballot after the state sued Uber and Lyft that year, saying they were in violation of AB-5, the state’s new law that sought to reclassify drivers as employees. After several legal squabbles, the companies — including DoorDash and Instacart — asked state voters to exempt them from the law. They spent a collective $200 million advertising the ballot measure and convincing drivers that Prop 22 would provide them with more flexibility as well as some benefits. California voters passed the proposition roughly 59% to 41%.

California court upholds Prop 22 in win for Uber, Lyft, DoorDash by Rebecca Bellan originally published on TechCrunch

Finding your startup’s valuation: An angel investor explains how

noreply@blogger.com (Ukpe Thompson) — Tue, 14 Mar 2023 00:27:00 +0000

Marjorie Radlo-Zandi Contributor

Marjorie Radlo-Zandi is an entrepreneur, board member, mentor to startups and angel investor who shows early-stage businesses how to build and successfully scale their businesses.

Understand the market

When you look for investments, ensure your valuation is realistic for the type of innovation and market segment, and is aligned with the state of the economy.

While assessing prospective investments, I ensure it’s a product or service that I care deeply about and educate myself about the company’s market. I want to see a fair valuation of the business and a well-defined market worth at least $100 million. I also assess whether the product or service has a significant advantage versus the competition.

To determine your valuation, you need to understand your market.

If your company has a minimum market threshold of $100 million in a large total addressable market (TAM), clearly explain how your company’s innovation solves a huge problem in a space that has no solutions or is substantially better than existing products and whether it can scale rapidly.

Determine your company’s valuation

When I’m considering an investment, “What’s your valuation?” is one of the first questions I ask.

Valuation has two primary concepts: pre-money and post-money.

Pre-money valuation is the value of the company prior to an investment, and post-money valuation denotes what it’s worth after investment.

Finding your startup’s valuation: An angel investor explains how by Ram Iyer originally published on TechCrunch

Starlink and T-Mobile’s sat-to-cell service will start testing this year

noreply@blogger.com (Ukpe Thompson) — Mon, 13 Mar 2023 23:27:00 +0000

SpaceX and T-Mobile will begin testing a new service to bring satellite connectivity to cell phones this year, a SpaceX executive said. The news, first reported by CNBC, suggests that we may be close to a future where cellular “dead zones” are a thing of the past.

SpaceX and T-Mobile announced the partnership last August, saying that they plan to provide “near complete coverage in most places in the U.S. — even in many of the most remote locations previously unreachable by traditional cell signals.” The idea is to create a new network, one that leverages Starlink satellites’ and T-Mobile’s mid-band 5G spectrum.

Sat-to-cell is considered to be the next frontier for space-based connectivity services, with multiple companies racing to be the first to provide data to cell phones. Project Kuiper — a competitor satellite broadband project from Amazon, which has yet to launch any satellites — announced a similar partnership with Verizon in 2021. Consumer electronics giant Apple has also strayed into this space: The company has invested nearly half a billion dollars in satellite network and ground stations from entities like Globalstar to deliver emergency SOS to iPhone users.

Other startups are also competing in this space. Lynk, a company working on two-way SMS capabilities from space, recently received FCC approval to deploy and operate a satellite constellation in low Earth orbit. Satellite-to-smartphone company AST SpaceMobile wants to deploy massive satellites that could provide cellular broadband around the world. The company launched its first test satellite last year.

Starlink and T-Mobile’s sat-to-cell service will start testing this year by Aria Alamalhodaei originally published on TechCrunch

As the SVB auction continues, the sale of its UK arm bounces between potential suitors

noreply@blogger.com (Ukpe Thompson) — Sun, 12 Mar 2023 23:27:00 +0000

In the US today, The Federal Deposit Insurance Corp. continued the auction process for the beleaguered Silicon Valley Bank, with final bids due by Sunday afternoon, according to Bloomberg.

Any agreed sale may not be known until late Sunday, if at all. It’s still possible that no deal will be reached and the bank will become insolvent. SVB had more than $175 billion in deposits and $209 billion in total assets. The FDIC is reportedly attempting to make at least a portion of clients’ uninsured deposits available from Monday.

US Treasury Secretary Janet Yellen said on Sunday that the government would not bail out Silicon Valley Bank with public money, but added it was concerned about depositors – the vast majority being tech companies – reeling from what is the worst bank failure since the 2008 financial crisis. As TechCrunch reported earlier the Silicon Valley Bank crisis also has implications for firms thousands of miles away. For example, over 60 YC-backed Indian startups have more than $250,000 stuck in accounts with SVB.

And that’s just the tip of the overseas iceberg.

Across the Atlantic, after a frantic weekend involving regulators and the UK government, Silicon Valley Bank UK Limited (SVB-UK) — which is a legally separate company to SVB in the US — is expected to enter an insolvency procedure this evening (Sunday 12 March 2023) as we reported yesterday. The move was confirmed today by London law firm Osborne Clarke.

This means customers of SVB-UK will be unable to withdraw, or deposit into the bank, creating huge liquidity issues for many depositors and/or borrowers, leaving many tech startups unable to execute crucial actions such as paying staff.

UK tech entrepreneurs and VCs spent the weekend lobbying the UK Government to intervene and provide either support for affected depositors and/or borrowers or shepherd a sale of the bank.

On Sunday morning the UK government was drawing up plans for some kind of emergency cash lifeline for tech firms.

Chancellor Jeremy Hunt told Sky News: “We will bring forward, very soon, plans to make sure people are able to meet their cashflow requirements and pay their staff but obviously what we want to do is to find a longer-term solution that minimises, or even avoids completely, losses to some of our most promising companies.”

In a statement, the chancellor warned the sector was at “serious risk” and a “high priority” for the government, announcing that it was “treating this issue as a high priority” and “working at pace on a solution to avoid or minimise damage to some of our most promising companies in the UK.”

Sources told Techcrunch that this could come in the form of a “bounce back loan approach” where tech clients of SVB-UK could borrow from a major UK bank, with the State acting as a guarantor.

However, as of Sunday night UK time, no obvious solutions had presented themselves, despite much speculation over a possible buyer of SVB-UK.

A joint letter signed by over 200 tech executives over the weekend said many companies were facing becoming “technically insolvent” after SVB UK collapse.

Responding to developments following the collapse of Silicon Valley Bank, the British Private Equity & Venture Capital Association (BVCA) Director General Michael Moore said: “We’ve been working overnight with our members to collect data and demonstrate the implications of Silicon Valley Bank’s collapse. We welcome the Chancellor’s update that the government will announce support for businesses impacted. This is an urgent matter. Help is needed by tomorrow. The immediate implications for the tech and wider private capital ecosystem are far reaching. This is about many highly skilled jobs.”

Dom Hallas, Executive Director of Coadec, the UK policy group representing tech startups, put out the statement: “There are a large number of startups and investors in the ecosystem who have significant exposure to SVB UK and will be very concerned. We have been engaging with the UK Government including Treasury and No10 about the potential impact.”

UK companies will only be able to recover £85,000 under the Financial Services Compensation Scheme, or £170,000 for joint accounts. Since SVB UK had over 3,500 customers, with many accounts running into the millions, the situation looks bleak. SVB UK reportedly had nearly £7bn in deposits when the BoE deemed it insolvent on Friday.

In other developments, Sky News and the Evening Standard reported on Sunday that Barclays and Lloyds Banking Group had been approached by the Government over an emergency takeover deal.

In addition, a new clearing bank, The Bank of London, was also named as a potential suitor by the BBC.

Sky News also reported that Oaknorth Bank, a British ‘neobank’ – or digital lender – previously valued at nearly $3bn could make an offer to buy SVB-UK, according to its sources, but a formal offer would be subject to due diligence potentially lasting for “several days.”

Oaknorth, which has declined to comment, was co-founded by Rishi Khosla, who has donated hundreds of thousands of pounds to the Conservative party, the UK’s governing party.

The FT reported the field of SVB-UK buyers could also potentially include Abu Dhabi’s state holding company ADQ, and listed conglomerate IHC.

Bloomberg noted that Sheikh Tahnoon (chairman at Royal Group) oversees the wealth fund ADQ, as well as First Abu Dhabi Bank PJSC, and the emirate’s $790 billion wealth fund Abu Dhabi Investment Authority.

And Sunday wore on, HSBC Holdings and JP Morgan were also said to be among those potentially looking to acquire SVB-UK.

As the SVB auction continues, the sale of its UK arm bounces between potential suitors by Mike Butcher originally published on TechCrunch

FDIC auction for SVB assets said to be underway

noreply@blogger.com (Ukpe Thompson) — Sun, 12 Mar 2023 18:27:00 +0000

An auction for the remaining assets of the failed Silicon Valley Bank is reportedly underway, with final bids due this afternoon and a result potentially arriving late Sunday, according to Bloomberg.

Bloomberg says that the U.S. Federal Deposit Insurance Corp. (FDIC), which stepped in and shut down SVB on Friday as it was experiencing an unprecedented run on funds by its clients, is hoping to conclude the auction before markets open on Monday morning.

A fast sale could help the FDIC make at least some of the uninsured deposits of SVB customers available to them by Monday. Already, the U.S. agency has said it’ll make the insured amounts available in full in time for next week to kick off.

When contacted, a spokesperson for the FDIC said that they are not providing comment on these reports.

As a potential resolution looms in the background, others in the startup ecosystem are jumping up to find liquidity options for entrepreneurs trying to make payroll next week. Most recently, Brex CEO Henrique Dubugras said he is working to raise over a billion dollars in a weekend to help fund an emergency bridge credit line.

OK, what is going on with SVB?

FDIC auction for SVB assets said to be underway by Darrell Etherington originally published on TechCrunch

Online education platform Kajabi helps creators earn money for sharing their expertise

noreply@blogger.com (Ukpe Thompson) — Sun, 12 Mar 2023 16:27:00 +0000

Kajabi, the video education and web hosting platform for content creators to sell, manage and market online courses, announced today that its 60,000 creators earned a combined $5 billion in lifetime gross merchandising value (GMV).

The company claims that its GMV has increased by 528% since 2019 and more than doubled since the end of 2021. The $5 billion figure is a significant jump from March 2020, when Kajabi had over $1 billion in creator revenue, former chief marketing officer Orlando Baeza previously told TechCrunch.

Founded in 2010 by Kenny Rueter and Travis Rosser, Kajabi gives “How to,” Do-it-Yourself (DIY) and other knowledgeable content creators the ability to monetize their online courses and other digital products like virtual meetups, coaching programs, membership websites and podcasts.

Kajabi is now valued at over $2 billion, according to the company.

The GMV milestone comes on the heels of Kajabi launching its AI Creator Hub product, which gives users access to six AI-powered tools that help generate content such as course outlines, landing pages, sales emails, course lessons, social media content and sales video script. The tools, which are free for everyone to use, rely on GPT-3, OpenAI’s language model.

Another AI-powered feature, Creator Studio, launched in beta recently and transcribes a video, reads through the script and identifies key sentences to create a summary of the video.

“What [AI] does for people who want to build businesses is give them a nudge in the right direction to actually get going,” Ahad Khan, CEO of Kajabi, told TechCrunch. “[The tools] actually help you get going which is, a lot of the time, the thing that slows people down.”

Kajabi found that it takes an average of over 80 hours to create an online course. By entering a prompt into the new AI Creator Hub, the company hopes content creators will be able to brainstorm ideas easier and minimize time typing email campaigns and other content.

In addition to helping users “sell their knowledge,” so to speak, Kajabi’s toolkit includes a website builder, email marketing software, sales funnel software, a payment gateway, as well as analytical tools to help creators determine the best sales strategy. Essentially, Kajabi aims to be an all-in-one platform for users by consolidating the necessary tools to run a video education business.

“That [software] toolset, historically, has been really fragmented,” Khan added. “You use X for your website, use Y for your [products] and use Z for your checkout. What Kajabi does is consolidate all that stuff into one easy-to-use platform…it’s a lot simpler to have it under one roof, and also a lot cheaper to have it under one roof.”

In 2022, Kajabi launched a built-in live video feature with a recording capability, so creators can virtually meet face-to-face with their clients and have the recorded sessions automatically emailed to them. The company also acquired the community platform Vibely last year to roll out Kajabi Communities, where creators can chat with their followers (or students) in real-time as well as have live calls, challenges, leaderboards and more.

The company plans to venture into the mobile world and eventually launch creator-branded apps, Khan told us.

The most enticing part about Kajabi is that users keep 100% of their earnings. That being said, Kajabi charges a pretty penny for its subscription plan, which has three pricing tiers: Basic ($149/month), Growth ($199/month), and Pro ($399/month). There’s also a 14-day free trial.

For comparison, the online course platform Thinkific also has a 0% transaction fee yet offers plans that range from $49, $99 and $199 per month. However, Kajabi claims to have more in-house marketing tools than Thinkific, such as the ability to build out sales funnels, create blogs and use email marketing that includes built-in features like autoresponder, Customer Relationship Management (CRM), templates for email campaigns and more. Kajabi also offers a mobile app whereas Thinkific has yet to launch one.

While some creators continue to rely on ads or brand deals to make money, other creators are turning to additional sources of income like online education, a market that was valued at $30 billion in 2021. According to Custom Market Insights’ recent market research study, the online education market size and share value are expected to reach about $200 billion by 2030.

Notable content creators that have signed up for Kajabi include YouTubers Matt Steffanina, a dance choreographer, and Cassey Ho (Blogilates), a fitness instructor that specializes in Pilates workout videos. Steffanina and Ho have approximately 30 million and 10 million followers, respectively, across social platforms.

“[Kajabi] allowed us a place to put content where the rules will never change… ideally, you want to have an element of social platforms that’s also providing an income because, at the end of the day, you never know when the algorithm or the rules are going to change. And that’s something that I’ve learned over the years, as there were times when I was making most of my income from YouTube…and now, it’s Kajabi,” Steffanina shared in a statement.

Lesser-known creators have also found success with Kajabi. For instance, Wendy Conklin joined in 2019 with a DIY chair upholstery course. At the start, she had 114 students and earned $34,000 in one week, Conklin told TechCrunch. “I got close to $100,000 in the first year of opening and closing that first course,” she added.

Since then, Conklin has launched various other courses and founded her business, Chair Whimsy. Currently, she teaches more than 7,000 students and has made a total of over $1.5 million on Kajabi.

Kenny Keller, a certified helicopter flight instructor, launched his company in Kajabi in 2012. Helicopter Online Ground School (HOGS) provides training videos to people that want to become helicopter pilots. Keller has earned over $2 million in revenue with Kajabi and has more than 5,000 customers. HOGS has 37,000 YouTube subscribers.

The average Kajabi creator makes about $40,000 in annual income, according to the company, with one in three full-time content creators earning over six figures a year. Kajabi claims that most users who have reached $100,000 in revenue have a minimum of 400 customers on average.

The Spectrum Equity-backed video education platform Kajabi has already hit $60 million in ARR

Online education platform Kajabi helps creators earn money for sharing their expertise by Lauren Forristal originally published on TechCrunch

Is generative AI really ready for the enterprise?

noreply@blogger.com (Ukpe Thompson) — Sun, 12 Mar 2023 16:27:00 +0000

OpenAI released ChatGPT just a few short months ago, and it’s fair to say that it took the world by storm: It has over 100 million active users already. No wonder, when it can generate human-like, grammatically correct responses. Related technologies can also produce artwork and code by entering a description of what you want, and the tech produces it.

You can even interact with the AI after your initial question, so if you don’t like the output you got or need clarification, you can ask additional questions or make adjustments to your picture or code, so it more closely matches your vision. All of this happens instantly without the help of a subject expert, an artist or a coder.

But none of this comes without issues, which include the sourcing of the data used to train the underlying AI model, the currency of that training data, a lack of permissions to use the source data, bias in the model and, perhaps most importantly, the accuracy of the responses, which are sometimes laughably wrong.

None of this has stopped enterprise software companies from taking the generative AI plunge. These companies see massive commercial potential and a lot of enthusiasm from users and they clearly don’t want to get left behind.

Salesforce, Forethought and Thoughtspot all recently announced betas of their own flavors of generative AI. Salesforce is adding generative AI across the platform. Forethought is aiming at chatbots and Thoughtspot wants to use AI for data querying. Each company took the base technology and added some algorithmic boosters to tune the tech for their platform’s unique requirements.

Microsoft also announced that its OpenAI service aimed at enterprise users on Azure is generally available as a managed service.

Throughout this year you can expect to see many more companies joining in, but the limitations are real, which makes us wonder: Is the technology — as early and raw as it is, no matter how cool it looks on its face — really enterprise ready?

Is generative AI really ready for the enterprise? by Ron Miller originally published on TechCrunch

Web of lies: Web3 isn’t the security fix-all you think it is

noreply@blogger.com (Ukpe Thompson) — Sun, 12 Mar 2023 15:27:00 +0000

Advocates of web3 will tell you that the decentralized web brings greater resilience and security compared to Web 2.0 thanks to its underlying blockchain-based technology.

Web 2.0, which first debuted in the early 2000s with a focus on user-generated content, rich user interfaces and cooperative services, also brought with it a new wave of security threats, including malware, phishing, social engineering, spoofing, cross-site scripting, SQL injection and data breaches, to name just a few.

Web3, a term encompassing several technologies such as cryptocurrencies, NFTs and DAOs, certainly gives the impression that it will make such threats a thing of the past: Not only does web3 give people more control over their data, but it relies on distributed technologies, such as blockchain, to smooth out the many flaws of its predecessor.

In reality, however, web3 is no more secure than Web 2.0, and it’s already creating a new playground for opportunistic cybercriminals. That’s because although it represents a shift in what the internet can do and will be used for, it doesn’t change how the internet fundamentally works.

New and unimproved

While it promises to be fully decentralized, web3’s user-facing components mainly operate on Web 2.0 technology, such as APIs and endpoints, despite being built on blockchain technology. This means that users of web3 services and decentralized apps, or “dApps,” continue to rely on legacy technologies for making transactions and ultimately means that web3 is vulnerable to all of the classic security issues that plagued its predecessor, from DNS hijacking to cross-site scripting. Web3 companies also have to communicate with their users, mostly through Web 2.0 technologies such as email or online messaging that are also prone to legacy security issues.

Web of lies: Web3 isn’t the security fix-all you think it is by Carly Page originally published on TechCrunch

Synthesis Institute collapse is a major setback for US psychedelic therapy

noreply@blogger.com (Ukpe Thompson) — Sun, 12 Mar 2023 14:27:00 +0000

The Amsterdam-based psychedelic retreat and practitioner training provider Synthesis Institute has filed for bankruptcy in the Netherlands, Willamette Week reported this week, leaving almost 300 students enrolled in its psilocybin facilitator training course in Oregon with an uncertain future.

Founded in the Netherlands in 2018 by Myles Katz and Martijn Schirp, Synthesis Institute sought to bridge the gap between clinical and more wellness-oriented psychedelic therapies, which are used to help tackle depression and anxiety and has shown promise to help treat other mental health ailments. Its flagship center just outside of Amsterdam offered three- or five-day retreats at roughly $1,000 per day. The company started expanding to the North American market in 2021, and Synthesis planned to establish a psilocybin service center and facilitator training program. It secured $7.25 million in Series A funding in September 2021, with an unusual company structure in the form of a Steward-Ownership organization.

However, the expansion project did not come together as expected. In June 2021, a company owned by Katz bought Buckhorn Springs, a 124-acre property in Jackson County, Oregon, for $3.6 million. The intention was to use Buckhorn Springs as a psilocybin service center, but it fell foul of Jackson County’s zoning regulations. As Buckhorn Springs sits in a resource zone, not a commercial zone, the county’s Land Development Ordinance deemed that it couldn’t be used as a psilocybin service center. This came after a 2022 vote in Jackson County that could have prevented companies from establishing psilocybin centers in the jurisdiction.

While the retreat might have met with bureaucratic roadblocks, Synthesis’ psychedelic practitioner training program was one of the first approved by the state of Oregon. The first students to embark on the Psychedelic Practitioner Core Training program did so in November 2022. The course was due to take 13 months and had an upfront cost of just under $10,000.

Companies fail every day, for myriad reasons. Whether it’s a centuries-old and well-respected department store, a tech startup or a psilocybin facilitator training and retreat organization, bad management, bad trading conditions, bad decisions or just bad luck can take a business under. But in the case of Synthesis, the ramifications of its collapse could have a destabilizing impact on the nascent commercial psychedelics community as a whole.

Synthesis Institute collapse is a major setback for US psychedelic therapy by Haje Jan Kamps originally published on TechCrunch

A 10-step playbook for founders with Silicon Valley Bank accounts

noreply@blogger.com (Ukpe Thompson) — Sun, 12 Mar 2023 01:27:00 +0000

Brett Adcock Contributor

Brett Adcock is the founder of Figure, an AI robotics company building a general-purpose humanoid robot. Previously, he founded Archer Aviation, an urban air mobility company that went public at $2.7B and Vettery, a machine learning-based talent marketplace that was acquired for $110M.

Yesterday, the U.S. experienced its second-largest bank failure in history. In the technology world, Silicon Valley Bank (SVB) was one of the largest banks supporting small businesses, but today, tens of thousands of depositors are unable to access capital.

This is not the first time I’ve witnessed a funding crunch. I’ve been building technology businesses for more than 20 years: 15 years in software/internet and five in advanced hardware. Previously, I founded Archer Aviation, which went public in 2021 for $2.7 billion. Prior to that, I founded Vettery, which was acquired for $110M.

While I hope for the best, it’s important for founders and CEOs to plan for the worst. This will be the weekend that differentiates a good entrepreneur from a bad one.

In 2020, when COVID-19 hit, I was raising my Series A for Archer and the venture funding environment completely ground to a halt. Within 48 hours, every single meeting I had was canceled.

While I hope for the best for companies banking with SVB, it’s important for founders and CEOs to plan for the worst. This will be the weekend that differentiates a good entrepreneur from a bad one.

Here is a 10-step playbook for founders and CEOs that can increase your company’s odds of success:

1. Get to the office

This weekend, you are in the war room. Spend the time building a thoughtful plan based on the many scenarios that could play out. It’s best to prepare for the worst, stay calm, and execute with precision.

The goal of this session is to thoughtfully document a plan that will extend the cash runway, establish talking points for employee communication, and identify any levers you can pull immediately to conserve cash.

2. Build an internal three-person tiger team

This team should consist of the CEO, financial leadership, and folks who lead overall product and people operations. Small teams make it easier to communicate and move quickly but a mentor who has experience navigating business cycles like this one could also be helpful.

The goal of this team is to extend remaining cash on hand for at least 30 days with the hope that uninsured depositors will see high recovery rates quickly. The longer your runway, the higher your odds of success.

3. Start communicating with investors now

In case you need more capital than the Federal Deposit Insurance Corporation (FDIC) insures, get in touch with current investors and be transparent about your SVB exposure. Be direct: ask if they are in a position to wire cash to cover your capital needs, even if it means with no terms in place.

I would also start building a list of every non-current investor in my network and be prepared to make contact with them on Monday morning. Work to track all of this so you can stay organized in case deposit settlements take several weeks.

You will find that good investors will step in to help because they understand that this situation will not last forever. Your ask is to get them to lend new money or buy deposit claims outright. If things go south, you don’t want to be one of 40,000 companies calling investors on Monday.

A 10-step playbook for founders with Silicon Valley Bank accounts by Walter Thompson originally published on TechCrunch