Month: February 2019

Software is eating the world, and today a startup that’s taking this maxim to the world of telecoms has raised a big round of funding as it comes out of stealth. DriveNets, a company out of Israel that builds cloud-based networking services that provide a cheaper and simpler alternative to the functions of traditional routers in carrier networks, has raised $110 million led by Bessemer Venture Parters and Pitango Growth, with participation also from other investors that are not being named.

The company is not disclosing its valuation but we understand from a source close to the company that it’s “several hundred million”, which could be anything between $300 million and $500 million; my educated guess for this round is around $400 million.

Notably, this is the first funding that DriveNets has raised. That’s in part because it is already generating some revenue. Ido Susan, the co-founder and CEO, said that it’s already working with seven tier-one carriers, although he would not name them for now.

The lack of outside funding is also due to the fact that Susan and his co-founder, Hillel Kobrinsky, are repeat entrepreneurs with successful exits who had been self-funding the company to some extent. Susan had co-founded Intucell, a “self-optimising network” startup that sold to Cisco for $475 million in 2013; while Kobrinsky founded web conferencing startup Interwise, acquired by AT&T for $121 million.

As Susan explains it, DriveNets is not trying to convince carriers — be they mobile, fixed or cable — to rip out all of their legacy equipment to update to cloud solutions. These networks are all growing fast enough that DriveNets has a business opportunity to step in for what they are building today because we as consumers and businesses are monsters when it it comes to gobbling network connectivity.

“Carriers buy equipment every year,” he said in an interview. “They add 60 percent more capacity in the US on average, 50 percent in Europe and 40 percent in Asia.”

But that growth is coming with increasing commoditization, putting a lot of pressure on margins. “Traffic is growing like crazy but revenues are flat,” he added. “This is a problem that traditional OEMs cannot solve.”

Traditional OEMs include vendors like Cisco, Juniper, Huawei and Arista but generally deploying network using hardware-based routers, Susan said, is complicated and expensive. “You can have over 10 OEMs you need to work with a support,” he said. “It’s a mess.”

DriveNets’ alternative is to bring that down to two vendors — its operating system and a maker of a much cheaper, simple piece of network equipment that sits in the carriers’ own data center (which is why Susan also says his cloud-based deployment is very secure) — creating what Susan says is a 40 percent cost savings.

What the company has done is not unusual in the wider world of tech. We have seen a number of cases where a product that traditionally required a big and bulky piece of physical equipment — say, a television for watching a TV show — now can be consumed as a stream, on a tiny screen that you keep in your pocket. This isn’t as often the case in the world of telecoms.

“Carriers have dreamt for years of breaking out the software functionality from the hardware of routers,” and Aaron Mankovski, managing general partner at Pitango Growth (who is joining as a board member with this round). “The compute power is so powerful in the cloud that you can run it in a much more agile way and use simple hardware to do that.” He believes that big incumbent vendors simply don’t yet the motivation — yet — to do that because their legacy products are still cash cows… for now.

There have been some notable exceptions, such as softswitches used in IP networks. And indeed, the shift to IP-based networking is what has driven the change for DriveNets.

The core of DriveNets’ service is something called DNOS (DriveNets Operating System), which covers a range of functions that would have traditionally been connected to network equipment (and usually different pieces of network equipment):

“By bringing networking to the cloud, DriveNets presents one of the most compelling infrastructure opportunities of the last 20 years,” said Adam Fisher, partner at Bessemer Venture Partners, in a statement. “Their disruptive architecture will be the final nail in the coffin of traditional telecom infrastructure, and we’re thrilled with the opportunity to back Ido once again.”

Source: Tech Crunch

Uber Freight, which helps truck drivers connect with shipping companies, has made two high-profile hires this month as it continues to scale up its app and plans for a global expansion.

The company has hired Andrew Smith, one of Box’s early employees, to head up global sales at Uber Freight, and Bar Ifrach, formerly of Airbnb, to lead its marketplace team, TechCrunch has learned.

Smith had a 10-year run at Box, where he was most recently vice president of field and commercial sales for North America. Ifrach has moved up the ranks at Airbnb during his 5-year tenure, starting as a data scientist and eventually becoming director of data science for Airbnb Homes. Ifrach oversaw the data science development of Airbnb marketplace features such as matching, instant book, pricing, and monetization.

The pair started at Uber Freight this month, TechCrunch has learned. Both report directly to Lior Ron, who returned last summer. Ron was one of the co-founders of autonomous trucking company Otto, which Uber acquired in 2016. He left the company following Waymo’s trade secrets lawsuit against Uber.

As head of marketplace, Ifrach is going to build out and improve the app’s pricing infrastructure as well as how it matches drivers and loads, Uber Freight confirmed. Meanwhile, Smith will be focused on building out the company’s sales team and shaping its go-to-market strategy.

Uber Freight, which spun out of Uber to become its own business unit in 2018, has offices in San Francisco and Chicago. The company has been scaling up its business since launching in May 2017, growing from limited regional operations in Texas to the rest of the continental United States.

Uber Freight has bigger expansion plans for 2019. The company plans to more than double its staff this year and is eyeing international markets. The company doesn’t disclose employee numbers. However, insiders target the number at “hundreds.” Uber Freight already has a dedicated team looking into international markets, the company confirmed.

Uber Freight has been building out features in its app as it expands to other markets and tries to lure more users. For example, the company recently added a facility ratings feature that allows drivers to rate facilities on a scale of 1 to 5. There’s also an option to leave a written review. The facilities rating aims to help drivers decide whether to book a load.

These amenities – stuff like parking, bathrooms, and load wait time, are more critical than outsiders might realize. A survey of 150 trucking companies in 2018 found that 80 percent of carrier respondents refused to take loads from facilities for reasons that included inflexible appointment hours and lengthy detention times. The U.S. Department of Transportation estimates detention times cost truckers a total of $1.1 to $1.3 billion in earnings each year.

Source: Tech Crunch

Amazon’s plans to invest in New York area engineering training programs and other local educational initiatives are not being canceled, despite Amazon’s announcement today that it will no longer open one of its HQ2 locations in New York City. The retailer decided to end its plans for the New York headquarters after significant backlash from local politicians and citizens alike who, as Amazon put it, “have made it clear that they oppose our presence.”

The deal Amazon had brokered with New York politicians had included up to $1.5 billion in grants and tax breaks in the state, in exchange for bringing 25,000 new jobs to the NYC area.

But Amazon jobs weren’t all the company was investing in – the company had also recently said it would fund educational programs and training at New York area high schools and colleges.

Specifically, Amazon said it would fund computer science classes in more than 130 New York City area high schools, including both introductory and Advanced Placement (AP) classes. The classes would be offered across all five NYC boroughs, including more than 30 schools in Queens – the planned location for the new headquarters.

These classes were to be funded by Amazon’s Future Engineer program, which works to bring computer science courses to over 100,000 underprivileged kids in 2,000 low-income high schools in the U.S.

In addition, Amazon said it was teaming up with area colleges and universities, including LaGuardia Community College (LAGCC), the City University of New York (CUNY) and the State University of New York (SUNY) to create a cloud computing certificate program for students across New York.

This program was supported by Amazon’s AWS Educate program.

The Educate program is currently used by more than 1,500 institutions to train students in cloud computing by offering them hands-on experience in AWS technology. The students can then apply for jobs at Amazon and elsewhere, upon completion.

Amazon has not officially commented on how the HQ2 news will impact these programs in New York, but sources familiar with the situation told TechCrunch that both educational programs are continuing – regardless of what’s happened with HQ2.

Though obviously meant to help build a pipeline for the NYC HQ2, the programs’ larger goals are about creating new engineering talent who know how to work with Amazon’s cloud computing platform, AWS.

Though these students will now not have a direct exit to a New York-area HQ2, Amazon still has over 5,000 employees in Brooklyn, Manhattan, and Staten Island, the company said today in its HQ2 announcement – and it plans to grow those teams in the years ahead.

That means it can’t hurt to continue to build the talent pipeline in New York. After all, Amazon could still woo program grads to other East Coast locations, including Northern Virginia and Nashville, as well as to its other 17 offices and hubs across the U.S. and Canada.

Source: Tech Crunch

Wattpad’s ambitions to grow beyond a storytelling community for young adults took another leap forward today with the announcement of a new partnership that will help expand its reach in Asia. The company has teamed up with Huayi Brothers in Korea, who will now be Wattpad’s exclusive entertainment partner in the region. The two companies will co-produce content sourced from Wattpad’s community, as it’s adapted for film, TV and other digital media projects in the country.

Development deals like this are not new to Wattpad at this point.

In the U.S., the storytelling app made headlines for bringing the teen hit “The Kissing Booth” to Netflix, which shot up to become the No. 4 movie on IMDb for a time.

Wattpad also recently announced a 2nd season for “Light as a Feather,” which it produces with AwesomenessTV and Grammnet for Hulu.

It additionally works with eOne, Sony, SYFY, Universal Cable Productions (a division of NBCUniversal), and Germany’s Bavaria Fiction.

Outside the U.S., Wattpad has 26 films in development with iflix in Indonesia.

And WattPad’s feature film “After,” based on Anna Todd’s novel, will arrive in theaters on April 12.

Key to these deals is Wattpad’s ability to source the best content from the 565 million some stories on its platform. Do to so, it uses something it calls its “Story DNA Machine Learning technology,” which helps to deconstruct stories by analyzing things like sentence structure, word use, grammar and more in order to help identify the next big hits using more than just readership numbers alone.

The stories it identifies as promising are then sent over to content specialists (aka human editors) for further review.

This same combination of tech and human curation has been used in the past to help source its writing award winners and is now being used to find the next stories to be turned into novels for its new U.S. publishing arm, Wattpad Books.

In addition to its hit-finding technology, studios working with Wattpad also have a way to reach younger users who today are often out of touch with traditional media, as much of youth culture has shifted online.

These days, teens and young adults are more likely to know YouTube stars than Hollywood actors. They’re consuming content online in communities like Reddit, TikTok, Instagram, YouTube, Twitter, and elsewhere. And when it comes to reading, they’re doing more of that online, too – whether that’s through chat fiction apps like Hooked or by reading Wattpad’s longer stories.

Wattpad says it now has 70 million uses worldwide, who now spend 22 billion combined minutes per month engaged with its website and app.

With the Korean deal, Wattpad is further growing its international footprint after several other moves focused on its international expansions.

For example, today’s news follows Wattpad’s raise of $51 million in funding from Tencent; its appointment of its first Head of Asia for Wattpad Studios, Dexter Ong, last year; and its hiring of its first GM of India, Devashish Sharma, who is working with local partners to turn its stories into movies, TV, digital and print in the region.

Huayi Brothers Korea hasn’t announced any specific projects from the Wattpad deal at this point, but those will follow.

“Wattpad’s model is the future of entertainment, using technology to find great storytellers and bring them to an international audience,” said, Jay Ji, CEO, Huayi Brothers Korea, in a statement. “In an era of entertainment abundance, working with Wattpad means access to the most important things in the industry: a data-backed approach to development, and powerful, proven stories that audiences have already fall in love with,” he said.

Source: Tech Crunch

When we interact with computers today we move the mouse, we scroll the trackpad, we tap the screen, but there is so much that the machines don’t pick up on, what about where we’re looking, the subtle gestures we make and what we’re thinking?

Asteroid is looking to get developers comfortable with the idea that future interfaces are going to take in much more biosensory data. The team has built a node-based human-machine interface engine for macOS and iOS that allows developers to build interactions that can be imported into Swift applications.

“What’s interesting about emerging human-machine interface tech is the hope that the user may be able to “upload” as much as they can “download” today,”Asteroid founder Saku Panditharatne wrote in a Medium post.

To bring attention to their development environment, they’ve launched a crowdfunding campaign that gives a decent snapshot of the depth of experiences that can be enabled by today’s commercially available biosensors. Asteroid definitely doesn’t want to be a hardware startup, but their campaign is largely serving as a way to just expose developers to what tools could be in their interaction design arsenal.

There are dev kits and then there are dev kits, and this is a dev kit. Developers jumping on board for the total package get a bunch of open hardware, i.e. a bunch of gear and cases to build out hacked together interface solutions. The $450 kit brings capabilities like eye-tracking, brain-computer interface electrodes, and some gear to piece together a motion controller. Backers can also just buy the $200 eye-tracking kit alone. It’s all very utility-minded and clearly not designed to make Asteroid those big hardware bucks.

“The long-term goal is to support as much AR hardware as we can, we just made our own kit because I don’t think there is that much good stuff out there outside of labs,” Panditharatne told TechCrunch.

The crazy hardware seems to be a bit of a labor of love for the time being, while a couple AR/VR devices have eye-tracking baked-in, it’s still a generation away from most consumer VR devices and you’re certainly not going to find too much hardware with brain-computer interface systems built-in. The startup says their engine will do plenty with just a smartphone camera and a microphone, but the broader sell with the dev kit is that you’re not building for a specific piece of hardware, you’re experimenting on the bet that interfaces are going to grow more closely intertwined with how we process the world as humans.

Panditharatne founded the company after stints at Oculus and Andreessen Horowitz where she spent a lot of time focusing on the future of AR and VR. Panditharatne tells us that Asteroid has raised over $2 million in funding already but that they’re not detailing the sources of that cash quite yet.

The company is looking to raise $20k from their Indiegogo but the platform is the clear sell here, exposing people to their human-machine interaction engine. Asteroid is taking sign-ups to join the waiting list for the product on their site.

Source: Tech Crunch

It’s no coincidence that Elon Musk wants to both tunnel down into and soar above the Earth. If you ask the team at HyperSciences, the best way to get to space is to flip drilling technology upside down and point it at the sky. In the process, that would mean ditching the large, expensive fuel stages that propel what we generally think of as a rocket — massive cylindrical thing, tiny payload at the tip — into space.

This month, the company hit a major milestone on its quest to get to suborbital space, capping off Phase I of a research grant with NASA with a pair of successful proof-of-concept launches demonstrating the company’s one-two punch of ram acceleration and chemical combustion.

HyperSciences put its vision to the test at Spaceport America, conducting a series of low altitude tests at the desolate launch site an hour outside of Truth or Consequences, New Mexico. The company launched “a number of projectiles,” ranging from 1.5 ft long to over 9 ft long. HyperSciences sent up some off-the-shelf electronics in the process, in a partnership with an aerospace research group at the University of Texas.

“We targeted hitting 600 to 1000 G’s (multiples of Earth’s gravity) on the payloads and accomplished that,” HyperSciences Senior Adviser Raymond Kaminski said. “The payloads felt similar levels to what commercial off-the-shelf electronics (like a cell phone) would feel when getting dropped on the floor.” Kaminski returned to aerospace with HyperSciences after a turn in the startup world following an earlier career with NASA, where he worked as an engineer for the International Space Station.

While the 1.5 ft. system launch was enough to meet its goals for NASA’s purposes, the company was testing the waters with an admittedly more impressive 9 ft. 18” projectile. “We’re going to launch a nine foot section — you can’t deny this anymore,” Kaminski said.

Oddly enough, the whole thing started after HyperSciences founder and CEO Mark Russell drilled a bunch of really, really deep holes. Russell formerly led crew capsule development at Jeff Bezos space gambit Blue Origin before leaving to get involved in his family’s mining business. At Blue Origin, he was employee number ten. Russell’s experience with mining and drilling led him to the idea that by elongating the chemical-filled tubes that he’d use to drill in the past, the system he used to break up rock could go to space.

“You have a tube and you have a projectile. It’s got a sharp nose and you’ve pre filled your tube with natural gas and air,” Russell explained. “It rides on the shock wave like a surfer rides on the ocean”

The team believes that launching something into space can be faster, cheaper and far more efficient, but it requires a total reimagining of the process. If SpaceX’s reusable first stages were a sea change for spaceflight, the technology behind HyperSciences would be a revelation, but that’s assuming the vision — and the hypersonic tech that propels it — could be scaled up and adapted to the tricky, high-stakes business of sending things to space.

A hypersonic propulsion system can launch a projectile at at least five times the speed of sound, causing it to reach speeds of Mach 5 or higher — more than a mile a second. Most of of the buzz in hypersonic tech right now is around defense technology — missiles that travel fast enough to evade even sophisticated missile defense systems or strike targets so quickly they can’t be intercepted — but aerospace and geothermal energy are two other big areas of interest.

Last December, the Washington Post reported that moving from rocket-boosted weapons to hypersonic weapons is the “first, second, and third” priority for defense right now. The Pentagon’s 2019 budget currently has $2 billion earmarked for its hypersonics program and that funding grew by almost a third year-over-year.  “You never want to put out a tech when the government is asking for it,” Kaminski said. “At that point it’s too late and you’re playing catch up.”

In spite of the opportunity, HyperSciences isn’t keen to get into the world of weaponry. “We are a platform hypersonics company, we are not weapons designers,” the team told TechCrunch. “We do not plan on being a weapon provider. HyperSciences is focused on making the world a better place.”

To that end, HyperSciences is maneuvering to the fore of non-weaponry hypersonics applications. The company sponsors the University of Washington lab that’s pioneered applications for ram accelerator technology it uses and has sole right to the tech invented there. 

On the geothermal energy note, with $1 million from Shell, HyperSciences was able to develop what it calls a “common engine” — a hypersonic platform that call drill deep to reach geothermal energy stores or point upward to launch things toward the stars. “HyperSciences is about getting really good on earth first,” Russell said, pointing to one advantage of the cross-compatible system that lets the company apply lessons it learns from drilling to its plans for flight.

“Our HyperDrone technology can be used to test new air-breathing hypersonic engines for NASA or aircraft companies that want to build the next gen super- and hypersonic aircraft to go point-to-point around the world in an hour or two,” the team explained. “Right now, you need a rocket on a big aircraft, just to get experiments up to speed. We can do that at the end of our tube right from the ground.”

Though there have been rumors of acquisition interest, for now HyperSciences is pursuing an offbeat crowdfunding model that’s certainly out of the ordinary in a literally nuts and bolts aerospace business. The company is currently running a SeedInvest campaign that allows small, unaccredited investors put as little as a thousand dollars toward the team’s vision. At the time of writing, the campaign was sitting at around five million dollars raised from nearly 2,000 relatively small-time investors. 

“SpaceX’s seed rounds were run by big VCs,” Russell said. “Where do you get access? These are big industries the public never usually gets to invest in.”

Russell prefers to keep HyperSciences flexible in its pursuits and believes that relying on venture capital would force the company to narrow the scope of its mission.  The team is quick to note that in spite of its relationship with Shell, the oil and energy giant doesn’t own any equity in the company. By hopping between industry-specific contracts with a boost from crowdfunding, HyperSciences hopes to continue pursuing its platform’s applications in parallel.

“The next overall architecture for spaceflight will be using hypersonics,” Russell said. “We obviously started this with the idea that you could gamechange spaceflight. By removing the first and potentially the second stage of a rocket [and] putting all of that energy in the ground… you could gamechange spaceflight, no doubt.”

Source: Tech Crunch