Month: June 2020

A startup called Portobel is working to help food producers shift their businesses so they can support direct-to-consumer deliveries.

Portobel is backed by Heroic Ventures and led by Ranjith Kumaran, founder or co-founder of file-sharing company Hightail (acquired by OpenText) and loyalty startup PunchTab (acquired by Walmart Labs).

Kumaran told me that he and his co-founders Ted Everson and Itai Maron started out with the goal of improving the delivery process by using low-cost, internet-connected devices to track each order. As they began testing this out — primarily with dairy companies and other producers of perishable goods — customers started to ask them, “Hey, you can monitor these things, can you actually deliver these things, too?”

So last year, the company started making deliveries of its own, which involved managing its own warehouses and hiring its own drivers. Kumaran said the resulting process is “a machine that turns wholesale pallets into direct-to-consumer deliveries.”

He also emphasized that the company is taking safety precautions during the pandemic, ensuring that all of its warehouse workers and drivers have masks and other protective equipment, and that the drivers use hand sanitizer between deliveries.

Portobel currently operates in the San Francisco Bay Area and Los Angeles/Orange County. Kumaran said the COVID-19 pandemic has only accelerated the demand for the startup’s services, with the number of households it serves tripling since April.

That might sound a little surprising, since supermarkets were basically the one store that customers are still visiting regularly. Plus, there are a range of grocery delivery options.

However, Kumaran suggested that the D2C model is better for both producers and consumers. Producers get recurring orders for larger packages of food. And for consumers, “If you buy straight from the wholesale producer … everything’s in stock.”

As for delivery, he said that when you buy your groceries online, things are being packed and dispatched at your local store.”

“All those things about selection and availability, put those aside — the modern grocery store is not set up for efficient e-commerce delivery,” he added. “They need to block the aisles to pick up product, there’s no dedicated place to dispatch deliveries. That’s kind of why, if you’ve tried [grocery delivery], there are unpredictable delivery windows. It’s a challenge for these guys to scale online.”

Portobel’s customers include San Francisco-based grocery company Moo Cow Market. In a statement, Moo Cow founder Alexandra Mysoor said, “The pandemic has propelled retail as we knew it into a new wave, blending and merging all past and current forms of commerce. That’s where companies like Moo Cow Market enter and can scale and grow thanks to services like Portobel.”

Source: Tech Crunch

VMware is acquiring network security firm Lastline, TechCrunch has learned.

Since its launch in 2012, Lastline raised about $52.2 million, according to Crunchbase. Investors include Thomvest Ventures, which led the company’s $28.5 million Series C round in 2017, Redpoint and e.ventures, which led the company’s 2013 funding round, as well as Barracuda Networks, NTT Finance and Dell Technologies Capital.

A source tells us that VMware will let go some 40 percent of Lastline’s employees — about 50 staffers — as part of the acquisition. We asked a Lastline spokesperson for comment prior to publication but did not hear back. A spokesperson for VMware also did not respond to a request for comment.

After we published, Lastline confirmed the acquisition in a blog post.

“By joining forces with VMware, we will be able to offer additional capabilities to our customers and bring to market comprehensive security solutions for the data center, branch office and remote and mobile users,” said Lastline’s chief executive John DiLullo.

Terms of the deal were not disclosed. The deal, subject to regulatory approvals is expected to close by the end of July.

Lastline provides threat detection services mostly focus on the network level, but they range from malware analysis to intrusion detection and network traffic analysis. The company prides itself on being a cloud native platform and as such, it promises to secure cloud deployments and on-premises networks, as well as multi-cloud and hybrid environments.

Recently, support for cloud-native hybrid- and multi-cloud deployments has very much been a focus for VMware, which makes Lastline a pretty obvious fit for its overall strategy. This also marks VMware’s third security acquisition this year, after it picked up network analytics firm Nyansa in January and cloud-native security platform Octarine in May. VMware also acquired security firm Carbon Black in August 2019. The trend here is pretty obvious and VMware is obviously trying to position itself as the provider of choice for enterprises that are looking for cloud-native

The company was founded by Christopher Kruegel, Engin Kirda, Giovanni Vigna, a team of computer science professors from the University of California, Santa Barbara and Northeastern University.

News of the acquisition comes a week after VMware announced solid Q1 earnings of $386 million, or $0.92 a share. Revenues came in at $2.73 billion, up about 12% on the same period a year ago. VMware CEO Pat Gelsinger attributed the quarter to the shift to work-from-home sparked by the coronavirus pandemic.

VMware shares were down slightly at Thursday’s market close.

Updated to include Lastline’s blog post on the acquisition.

Source: Tech Crunch

A new study on kids’ app usage and habits indicates a major threat to YouTube’s dominance, as kids now split their time between Google’s online video platform and other apps, like TikTok, Netflix, and mobile games like Roblox. Kids ages 4 to 15 now spend an average of 85 minutes per day watching YouTube videos, compared with 80 minutes per day spent on TikTok. The latter app also drove growth in kids’ social app use by 100% in 2019 and 200% in 2020, the report found.

The data in the annual report by digital safety app maker Qustodio was provided by 60,000 families with children ages 4 to 14 in the U.S., U.K., and Spain, so it’s data isn’t representative of global trends. The research encompasses children’s online habits from February 2019 to April 2020, takes into account the COVID-19 crisis, and specifically focused on four main categories of mobile applications: online video, social media, video games, and education.

YouTube, not surprisingly, remains one of the most-used apps among children, the study found.

Kids are now watching twice as many videos per day as they did just four years ago. This is despite the fact that YouTube’s flagship app is meant for ages 13 and up — an age-gate that was never truly enforced, leading to the FTC’s historic $170 million fine for the online video platform in 2019 for its noncompliance with U.S. children’s privacy regulations.

The app today is used by 69% of U.S. kids, 74% of kids in the U.K., and 88% of kids in Spain. Its app for younger children, YouTube Kids, meanwhile, is only used by 7% of kids in the U.S., 10% of kids in the U.K., and wasn’t even on the radar in Spain.

The next largest app for online video is Netflix, watched by 33% of U.S. kids, 29% of U.K. kids, and 28% of kids in Spain.

In early 2020, kids in the U.S. were spending 86 minutes on YouTube per day, down from 88 minutes in 2019. In the U.K., kids are watching 75 minutes per day, down from 77 minutes in 2019. And in Spain, kids watch 63 minutes per day, down from 66 minutes in 2019.

During the COVID-19 lockdowns, the time spent increased quite a bit, as you could imagine. In the U.S., for example, kids in mid-April spent 99 minutes per day on YouTube.

In part, the decline in total YouTube minutes could be due to the growing number of daily minutes kids spend on TikTok. The Beijing-owned short-form video app could gain further traction if more YouTube creators leave Google’s video platform as a result of the increasing regulations and the related losses in monetization. More creators would broaden TikTok’s appeal, as it expands its content lineup.

Last year, TikTok became one of the top five most-downloaded apps globally that wasn’t owned by Facebook, and it has continued to grow among all age demographics.

From May 2019 through February 2020, the average minutes per day kids spent on TikTok increased by 116% in the U.S. to reach 82 minutes, went up by 97% in the U.K. to reach 69 minutes, and increased 150% in Spain to reach 60 minutes.

In February 2020, 16.5% of U.S. kids used TikTok, just behind the 20.4% on Instagram, and ahead of the 16% on Snapchat. In the U.K. and Spain, 17.7% and 37.7% of kids used TikTok, respectively.

Time spent on TikTok increased during COVID-19 lockdowns, as well, leaving the app now only minutes away from being equal to time spent on YouTube. In the U.S., for example, kids’ average usage of TikTok hit 95 minutes per day during COVID-19 lockdowns compared with just 2 minutes more — 97 minutes — spent on YouTube

In terms of online gaming, Roblox dominates in the U.S. and U.K., where 54% and 51% of kids play, respectively. In Spain, only 17% do. Instead, kids in Spain currently prefer Brawl Stars.

Similarly, Minecraft is used by 31% of kids in the U.S., 23% in the U.K., and only 15% in Spain.

Roblox isn’t just a minor diversion. It’s also eating into kids’ screen time.

In February 2020, this one game accounted for 81 minutes per day, on average, in the U.S., 76 minutes per day in the U.K., and 64 minutes per day in Spain. On average, kids play Roblox about 20 minutes longer than any other video game app. (Take that, Fortnite!)

During COVID-19 lockdowns, the kids who played Roblox increased their time spent in the game, up 31%, 17%, and 45% respectively in the U.S., the U.K., and Spain. But lockdowns didn’t increase the percentage of kids who used gaming apps, as it turned out.

Education apps, as a whole, did not see much growth from 2019 to early 2020 until the COVID-19 lockdowns. But then, Google Classroom won in two of the three markets studied, with 65% of kids now using this app in Spain, 50% in the U.S., but only 31% in the U.K. (Show My Homework is more popular in the U.K., growing to 42% usage during COVID-19.)

All these increases in kids’ app usage may never return to pre-COVID-19 levels, the report suggested, even if usage declines a bit as government lockdowns lift. That mirrors the findings that Nielsen released today on connected TV usage, which has also not yet fallen to earlier, pre-COVID levels even as government restrictions lift.

“We now live in a world with an estimated 25 billion connected devices worldwide. Many of those in the hands of children,” Qustodio’s report noted. “Today, on average, a child in the U.S. watches nearly 100 minutes of YouTube per day, a child in the U.K. spends nearly 70 minutes on TikTok per day, a child in Spain plays Roblox over 90 minutes a day,” it said. “The world is not going to return to the way things were, because screen-time rates were already increasing. COVID-19 just accelerated the process,” the firm concluded.

Source: Tech Crunch

The world feels as fragile as ever, and those with any options at all are looking to get away this summer.

For many, planes and hotel rooms won’t be an option they consider owing to continued concerns about the coronavirus (not to mention the expense, which 40 million fewer Americans can likely afford). That leaves perhaps renting a local Airbnb this summer or, for a growing number of people, looking for the first time to rent an RV or camper van, including as a way to visit far-flung family members who might otherwise be unreachable.

Last week, we talked with Jeff Cavins, a serial operator and the cofounder and CEO of a company that’s poised to benefit from the latter trend: Outdoorsy, a peer-to-peer RV rental company that was founded in 2015, bootstrapped by its founders for a couple of years, and has more recently attracted $88 million in venture funding, $13 million of it an extension to a $50 million Series B round that it quietly closed early this year.

We wanted to know what trends the company — which collects fees from both the vehicle owners and the renters on its platform — is seeing, including how its customers are changing and where they’re looking to park themselves this summer. Below are some excerpts from our chat, edited lightly for length.

TC: How has your model changed because of the coronavirus?

JC: We had typically seen an average rental on our platform would run about six days. That’s now over nine days. With COVID, as  with many other companies, we saw a lot of de-bookings in the platform, but then they all roared back and then some. We’ve seen a 2,645% increase in bookings from the low point of COVID, which was late March, to right now.

TC: What percentage of those booking trips are first-time customers?

JC: In the month of May, 88% of our bookings were by first-time renters, which is a record for us. And more than half of them have come back and already booked their second trip. So some booked in May; they went away for the Memorial Day weekend [and] came right back. And they booked another one for, in this case, like the Fourth of July or [trips in] June. As you know, a lot of people are at home with their kids, so everybody in America has this big, long extended summer break. And with the kids, they’re finding this is the safer option for travel.

TC: Are their expectations different? Are they looking for certain things that maybe more seasoned RV campers wouldn’t think to ask?

JC: The big trend that we’re seeing in the RV industry, and this is not unique to America, is the new consumers don’t want those big land barges. What they want are camper vans, because the average user on our platform is under the age of 40, which was a big surprise to this industry because it’s always leaned a little bit towards the Boomer or the retiree demographic. And they like camping off the grid. They like to operate with vehicles that feel comfortable to them, that have a smaller footprint, that are easier on the environment. And so things that have become popular are solar power, potable water that can be transportable, hookups for mountain bikes, sporting gear . . . They also to be able to head to unique locations where they can build those Instagram mobile moment. So we’re starting to see that trend, and it has become a global phenomenon.

TC: When we last talked, in January of last year, Outdoorsy had around 35,000 vehicles available to rent on the platform. How many are on the platform now?

JC: We have 48,000 peer-to-peer listings; when we add our international users and we have a lot of these mega fleets that are connected to our site via an API like Indies Campers or Jucy, that puts our our supply at 68,000 units.

TC: And how are you making sure that these vehicles are free of germs and don’t transmit diseases?

JC: Cleanliness is a big factor for any form of accommodation. In our case, we’ve been producing for our listing community CDC guidelines on cleaning standards. We’ve asked our owners to place additional time between rentals so they can let the vehicles take time to manually disinfect. One of the our investors at our company is a molecular biologist [whose] doctoral thesis at Harvard won the Nobel Prize for chemistry and he’s been helping us communicate with our owner community on things like these new ultraviolet radiation lamps that are common. You’ll see them installed in ambulances . . . if you let them set for a while, they will help completely decontaminate the environment.

We’re also encouraging renters to bring cleaning supplies with them if they you know A lot of people will feel much more safe if they’re able to control their environment. And we’ve started a contactless key exchange, [meaning] the owner will deliver the vehicle to a campsite, put up the awning, the camping chairs, and so on. And then the renter will come later.

TC: You mentioned changing user behaviors. Out of curiosity, are you you seeing renters who aren’t heading to Yosemite or Yellowstone but instead to an RV down the street so they can, say, work apart from young children?

JC: One of the things that we’ve seen is, I may live in San Diego, for example, and grandma lives in Kansas City, and there’s no way for the kids to go see her. So camper van and RV travel has become that way for families to see those loved ones they haven’t been able to see during quarantine and maintain family connectivity.

TC: You mentioned de-bookings earlier this year. Did you have to lay off staff?

JC: We had about 160 employees prior to COVID. And we did do some right sizing. Most of the impact in our organization was in our international markets — we had a  team in Italy, Germany, France, UK, Australia, New Zealand [that were cut].  In terms of our domestic employees, rather than cuts, we sat down with the team and said, ‘If everybody is willing to take a salary adjustment, we will reward you with more equity in the business. This could be a period of time where we save those jobs around us.’

I work with no income; I don’t have a salary.  And there are a few other executives who elected to do [forgo theirs]. So it was a way to align our employees with our investors by compensating them more in equity.

TC: As business picks up again, are you thinking about another round of funding?

JC: There is no plan to [raise more right now]. We were profitable in the month of May. We’ll be profitable again in the month of June. Unless there’s a second wave of COVID and lockdowns, our booking activity is now foretelling a profitable July, August and September, so we’ll possibly produce a year-on-year fiscal profitable year.

The ones we typically get inbound activity from are the late-stage growth investors. We’ll all sit down with the board and we’ll talk about it and decide: do we want to do something with that or just want to just keep, you know, chopping wood as fast as we can on our own?

Source: Tech Crunch

If you want to capture investor attention, you need a killer pitch. And that’s under normal circumstances. You’ve probably noticed that circumstances are anything but normal. With a global pandemic and the ensuing economic crisis, you’ll need to up your pitching game and get ready to bring the heat. We can help.

Register today for the second installment of our Pitchers and Pitches series. This interactive elevator pitch feedback session will take place on June 10 at 4pm ET / 1pm PT. Pour yourself a refreshing glass of something tasty and get ready to take your pitching game to the next level.

Note: The Pitchers and Pitches webinar series is free and open to all, but only companies that have purchased a Disrupt Digital Startup Alley Package get to pitch. If your startup wants to be in the running to pitch, you can purchase a ticket here.

We’ll choose five exhibiting startups at random to give their best 60-second pitch to the panel of judges. Who will hear those pitches and offer their sage advice? Excellent question.

Three people will evaluate each pitch and provide incisive feedback. Amish Jani, Managing Director at First Mark Capital is our featured VC judge for this session. Amish will join Darrell Etherington and Jordan Crook, two of our TechCrunch editors with years of experience coaching participants in the epic Startup Battlefield pitch competition.

Whether you watch or whether you pitch, you’ll come away with actionable tips, strategies and fresh ideas to improve the way you present your startup to the world.

Oh, and one more thing — there’s a prize package. Who doesn’t love prizes? The winning startup gets a consulting session with cela, an organization that connects early-stage startups to accelerators and incubators that can help them scale their business.

Early-stage startup founders rise to face challenges on the daily. And now you need to rise further and faster than ever before. Take advantage of every tool and every opportunity to adapt and move forward. The next Pitchers and Pitches session kicks off at 4pm ET / 1pm PT on June 10th. Don’t miss out — register today.

Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.

Source: Tech Crunch

Mobile banking startup Varo Money has raised an additional $241 million in Series D funding, the company announced today. The investment was co-led by new investor Gallatin Point Capital and existing investor The Rise Fund, co-founded by TPG. Also participating in the round were Bono (yes, that one), along with entrepreneur, impact investor, and movie producer Jeff Skoll; plus HarbourVest Partners, and Progressive Insurance.

To date, Varo has raised $419.4 million in funding.

Launched in July 2017, Varo is now one of several digital banking apps that are taking on traditional banks. Its rivals include startups like Chime, Current, Space, Cleo, N26, Empower Finance, Level, Step, Moven, and many more.

Similar to others in this space, Varo promises an easily accessible bank account with no monthly fees or minimum balance, plus high-interest savings, and a modern mobile app experience. Though it doesn’t have any brick-and-mortar branches, customers can access their money through a network of over 55,000 fee-free Allpoint ATMs worldwide.

During the COVID-19 crisis, Varo served its customer base by providing early access to stimulus and unemployment relief funds, as it already does with users’ direct deposit paychecks. It also increased its deposit and ATM limits, and partnered with job platforms Steady and Wonolo to help connect its customers to new work opportunities.

Like most of its competitors, Varo itself is not a bank — its accounts to date have been provided by The Bancorp Bank, member FDIC.

That may soon change, the company says.

In September 2018, Varo received preliminary approval from the Office of the Comptroller of the Currency (OCC). In February 2020, Varo announced it was the first banking startup to win approval for FDIC insurance. Last month, the company said it was moving to the final stage of its bank charter journey.

“Varo was founded first and foremost to make a powerful impact on systemic financial inequality in communities across this country,” said Colin Walsh, Founder and CEO of Varo, in a statement. “As the first fully digital bank, Varo will bring our mission of financial inclusion to life and create more financially resilient – and thus healthier and stronger – communities. This new investment will enable us to complete the chartering process and leverage our modern banking technology to build on our track record of innovation and inclusion,” he added.

Pending completion of the conditions required by the OCC, the FDIC, and the Federal Reserve, Varo will receive approval to become a national bank.

The company expects this process to compete by summer 2020, at which point it will expand its lineup of services to include credit cards, loans, and additional savings products.

Those expansions will help to further differentiate its mobile banking app from a number of competitors, as a large group today remain largely focused on offering checking and savings accounts, not a fuller range of financial products.

Varo is not the only fintech startup that’s moving towards becoming a real bank. In March, Square said it had also received approval from the FDIC to conduct deposit insurance. It aims to launch Square Financial Services, offering small business loans, in 2021.

These moves by fintech startups come at a time when the younger generation is ditching legacy banking in favor of tech. Millennials in particular don’t trust big banks, preferring instead the fee-free challenger banks offering modern mobile features they’ve come to expect from all their other apps.

“In the midst of all the economic challenges people are facing right now, the digital economy can still be a force for good. Varo’s focus on financial inclusion and the support they offer people to help manage their finances and reduce financial stress really matters at a time when so many American families are struggling in a volatile economy. And that’s why RISE chose to partner with the team at Varo,” said Maya Chorengel, co-managing partner of The Rise Fund.

In addition to its expansion into new products, Varo will hire across operations, marketing, risk, engineering, and communications following the round’s close. It has recently added headcount to its customer care teams.

Varo today counts nearly 2 million banking and savings accounts and is growing rapidly. Since the beginning of 2020, account growth is up 60%, spend is up roughly 1.5x over the same period, and deposits are up by roughly 3.5x.

 

Source: Tech Crunch

Monzo, the U.K. challenger bank, continues to be faced with tough decisions linked to the coronavirus crisis and resulting economic downturn.

Following the shuttering of its Las Vegas-based customer support office and almost 300 staff being furloughed in U.K., the company has announced internally that up to 120 U.K. staff are being made redundant. Reuters first reported the news just moments ago — which I have now confirmed based on my own sources.

According to an internal memo written by new CEO TS Anil, following an all-hands earlier this afternoon led by Anil and Monzo co-founder and president Tom Blomfield, the bank is to make up to 120 roles redundant, despite previously stating that furloughs and pay cuts already carried out would mean further layoffs could be avoided. That no longer appears to be the case, with Anil explaining that the current economic situation isn’t expected to revert back to normal quickly.

I understand a full consultation period for those employees potentially affected will now take place, as is stipulated under U.K. employment law. In addition, Anil told staff that in order to recognise their contribution, the bank will be waiving the one year “cliff” from their vesting schedule so that they won’t lose out on any shares due to them.

The announced layoffs add to a turbulent time for Monzo in recent months, as it, along with many other fintech companies, has attempted to insulate itself from the coronavirus crisis and resulting economic downturn.

In April, I reported that Monzo was shuttering its customer support office in Las Vegas, seeing 165 customer support staff in the U.S. lose their jobs. And just a few weeks earlier, we reported that the bank was furloughing up to 295 staff under the U.K.’s Coronavirus Job Retention Scheme. In addition, the senior management team and the board has volunteered to take a 25% cut in salary, and co-founder and CEO Tom Blomfield has decided not to take a salary for the next 12 months.

Like other banks and fintechs, the coronavirus crisis has resulted in Monzo seeing customer card spend reduce at home and (of course) abroad, meaning it is generating significantly less revenue from interchange fees. The bank has also postponed the launch of premium paid-for consumer accounts, one of only a handful of known planned revenue streams, alongside lending, of course.

And just last week, it was reported that Monzo is closing in on £70-80 million in top up funding, to help extend its coronavirus crisis runaway. However, as new and some existing investors play hardball, the company has reportedly had to accept a 40% reduction in its previously £2 billion valuation as part of its last funding round last June, with a new valuation of £1.25 billion.

Source: Tech Crunch