Month: February 2021

TechCrunch is embarking on a major project to survey the venture capital investors of Europe, and their cities.

Our <a href=”https://forms.gle/k4Ji2Ch7zdrn7o2p6”>survey of VCs in Belfast and Northern Ireland will capture how things are faring, and what changes are being wrought amongst investors by the coronavirus pandemic.

We’d like to know how Northern Ireland’s startup scene is evolving, how the tech sector is being impacted by COVID-19, and, generally, how your thinking will evolve from here.

Our survey will only be about investors, and only the contributions of VC investors will be included. More than one partner is welcome to fill out the survey. (Please note, if you have filled the survey out already, there is no need to do it again).

The shortlist of questions will require only brief responses, but the more you can add, the better.

You can fill out the survey here.

Obviously, investors who contribute will be featured in the final surveys, with links to their companies and profiles.

What kinds of things do we want to know? Questions include: Which trends are you most excited by? What startup do you wish someone would create? Where are the overlooked opportunities? What are you looking for in your next investment, in general? How is your local ecosystem going? And how has COVID-19 impacted your investment strategy?

This survey is part of a broader series of surveys we’re doing to help founders find the right investors.

https://techcrunch.com/extra-crunch/investor-surveys/

For example, here is the recent survey of London.

You are not in Northern Ireland, but would like to take part? That’s fine! Any European VC investor can STILL fill out the survey, as we probably will be putting a call out to you next anyway! And we will use the data for future surveys on vertical topics.

The survey is covering almost every city and country on in the Union for the Mediterranean, so just look for your country and city on the survey and please participate (if you’re a venture capital investor).

Thank you for participating. If you have questions you can email mike@techcrunch.com

(Please note: Filling out the survey is not a guarantee of inclusion in the final published piece).

Source: Tech Crunch

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here. 

Ready? Let’s talk money, startups and spicy IPO rumors.

It’s been a bizarre few weeks, with Robinhood raising a torrent of new funds to keep its zero-cost trading model afloat during turbulent market conditions, other neo-trading houses changing up their business model and more. But amidst all the moves in startup-land, something has been itching in the back of my head: Why are several rich people pumping crappy assets?

It’s fine for a retail investor to share trading ideas amongst themselves; it has happened, will happen, and will always happen. But we’ve seen folks like Elon Musk and Chamath Palihapitiya use their broad market imprint to encourage regular folks — directly and indirectly — to buy into some pretty silly trades that could lose the retail crowd lots of money that they may not be able to afford.

Think of Elon coming back to Twitter to pump Doge, a joke of a cryptocurrency that is highly volatile and mostly useless. Or Chamath putting money into GameStop publicly, a move that he is better equipped than most to get into and out of. Which he did. And made money. Most folks that played the GameStop casino have not been as lucky, and many have lost more than they can afford.

Caveat emptor and all that, but I do not love folks with savvy and capital leading regular people into risky trades or into assets that are not backed by long-term fundamentals, but instead a small shot at near-term returns. Yoof.

Finally, keeping up the theme of general annoyance, Senator Hawley is back in the news this week with an attention-focused announcement of an idea to block big tech companies from buying smaller companies. As you would expect from the insurrection-friendly Senator, it’s not an incredibly serious proposal, and it’s written so vaguely as to be nearly humorous.

But as I wrote here on my personal blog about all of this, what does matter out of the generally irksome pol is that there is bipartisan interest in limiting the ability of big tech companies to buy smaller companies. For startups, that is not good news; M&A exits are critical liquidity events for startups, and big companies have the most money.

It’s no sauté of my onions if startup valuations fall, but I think there’s been plenty of attention noting that some Democrats and some Republicans in the U.S want to undercut top-down tech M&A, and not nearly enough notice concerning what the effort might do to startup valuations and funding. And if those metrics dip, there could be fewer upstarts in the market actually working to take on the giants.

Food for thought.

Market Notes

The Exchange caught up once again with Unity CFO Kim Jabal. We did so not merely to make jokes with her about games that we like or don’t like, but to keep tabs on how Jabal thinks as the financial head of a company that was private when she joined, and public now. A few observations:

• GAAP v. Non-GAAP: I asked about Unity’s recent Q4 net income, measured using generally accepted accounting principles, or GAAP. It was impacted by some share-based comp numbers. Jabal was clear that her team and investors are more focused on non-GAAP numbers. Why? They strip out non-cash charges like share-based comp and provide a different perspective into corporate performance. This is standard startup practice, but her comment shows how if your company is growing quickly post-IPO, you can stick to adjusted metrics and have no issue. If growth slows, I bet that changes.
• COVID: Will the COVID bump to gaming stick? Per Jabal, when her company has seen a bump in engagement historically, results don’t tend to fall back to prior plateaus. I wonder if this will be the case for all COVID-boosted parts of the startup and big-tech landscape. If so, it’s very good news.
• Know your metrics: Jabal said that her key metrics are non-GAAP operating margin and free cash flow — apart from growth, I’d add. That’s super clear and easy to grok. Startup CEOs, please have a similar distillation ready when we chat about your latest round.

And speaking of startups, let’s talk about a company that I’ve had my eye on that recently raised more capital: Deepgram. I covered the company’s Series A, a $12 million round in March 2020. Now it has raised $25 million more, led by Tiger, so this is a fun case of big money investing early-stage, I think. Regardless, Deepgram was a bet on a particular model for speech recognition, and, then, its market. its new investment implies that both wagers came out the right way up.

And I was chatting with the CEO of Databricks recently (more here on its latest megaround), who mentioned the huge gains made in AI, and more specifically around generative adversarial networks (GANs) NLP, and more. Our read is that we should expect to see more Deepgram-ish rounds in the future as AI and similar methods of approaching data make their way into workflows.

And fintech player Payoneer is going public. Via a SPAC. You can read the investor presentation here. Payoneer is not a pre-revenue firm going out via a blank check; it did an expected $346 million in 2020 rev. I’m bringing it to you for two reasons. One, read the deck, and then ask yourself why all SPAC decks are so ugly. I don’t get it. And then ask yourself why isn’t it pursuing a traditional IPO? Numbers are on pages 32 and 40. I can’t figure it out. Let me know if you have a take. Best response gets Elon’s dogecoin.

Various and Sundry

Wrapping up this week, TechCrunch has a new newsletter coming out on apps that is going to rule. Sarah Perez is writing it. You can sign up here, it’s free!

And if you need a new tune, you could do worse than this one. Have a great weekend!

Alex

Source: Tech Crunch

You’ve landed on Human Capital, a weekly newsletter detailing the latest in diversity, equity, inclusion and labor. Sign up here to receive the newsletter every Friday at 1 p.m. PT.

The events of this week perfectly encapsulate the variety of worker and workplace-related struggles happening in the tech industry. Google settled some discrimination allegations with the Department of Labor, Amazon agreed to settle a complaint with the FTC over stolen tips from Flex workers and the Alphabet Workers Union filed a complaint with the National Labor Relations Board. It was quite the week so let’s get to it.

Grocery delivery startup Dumpling faces backlash

Dumpling workers said this week they have been misled by the Instacart alternative’s business model, Vice reported. Additionally, workers told Vice the company shut down their Facebook post where they were protesting pay changes.

From Vice:

But Dumpling is now in hot water with many of the gig workers on its platform, which it calls “business owners.” These business owners say the company has misled them about how much autonomy and control they’d have on the platform, and has shut down their Facebook group after workers on the platform spoke out against a series of changes the company made to its pay model in the latter half of 2020. When Dumpling closed the Facebook group, it said the group “ha[d]n’t lived up to its positive intent.” 

Alpha Global walks back its announcement

Remember when Alpha Global announced an alliance of Alphabet workers around the world, including those affiliated with the recently-formed Alphabet Workers Union in the U.S.? Well, it turns out that wasn’t entirely true. Alpha Global has since issued a revised statement clarifying it did not have buy-in from AWU.

In our announcement of the Alpha Global alliance, UNI mistakenly included CODE-CWA and the Alphabet Workers Union (AWU) as members of the Alpha Global Alliance and a quote from AWU Executive Chair Parul Koul, without receiving proper authorization from CWA, the Alphabet Workers Union’s elected Executive Council, or Ms. Koul. We take full responsibility and have addressed this situation to prevent it from happening again.

But by the time Alpha Global made the announcement, the damage had already been done, according to The Verge. Some AWU members expressed their concerns with the way things went down, and some are now pushing to disassociate from the Communications Workers of America. 

It’s a whole thing that you can read more about here.

Alphabet Workers Union files complaint with NLRB

In a filing with the National Labor Union, AWU alleged Google vendor Adecco violated the law by trying to silence employees. The complaint alleges employees were punished for discussing their pay. The complaint was filed against both Adecco and Google

Google CEO meets with HBCUs

In light of recent departures of Black leaders at Google, CEO Sundar Pichai met with five HBCUs last Friday. The meeting itself was relatively uneventful — they reportedly didn’t even talk about the allegations from Dr. Timnit Gebru and April Curley — but HBCUs and Google provided the following joint-statement to CNN:

“We are all encouraged about the future partnership. The meeting paved the way for a more substantive partnership in a number of areas, from increased hiring to capacity building efforts that will increase the pipeline of tech talent from HBCUs.”

Speaking of Dr. Gebru, Google’s lead of the ethical AI team, Margaret Mitchell, posted an email she sent to Google pertaining to Gebru’s exit.

Google settles discrimination allegations with DOL

Google agreed to pay $2.59 million to more than 5,500 current employees and former job applicants as part of a settlement with the U.S. Department of Labor over allegations of systemic discrimination as it relates to compensation and hiring. 

Google also agreed to reserve $250,000 a year for the next five years to address any potential pay equity adjustments that may come up. That brings Google’s total financial commitment to $3.8 million — a drop in the bucket for the company, whose parent company Alphabet has a market cap of $1.28 trillion.

The settlement comes after the DOL’s Office of Federal Contract Compliance Programs found pay disparities affecting female software engineers at Google’s offices in Mountain View, as well as in offices in Seattle and Kirkland, Washington. The OFCCP also found differences in hiring rates that “disadvantaged female and Asian applicants” for engineers roles at Google’s locations in San Francisco, Sunnyvale and Kirkland.

Two Google workers quit to show solidarity

Vinesh Kannan, a software engineer, quit Google in light of Dr. Timnit Gebru and April Curley’s negative experiences at the company. 

In a tweet, Kannan said what they experienced “crossed a personal red line I wrote down when I started the job. I know I gained a lot from Google, but I also gained a lot from both of their work, and they were wronged.”

David Baker, who was a director focused on user safety, left Google last month, saying Gebru’s departure “extinguished my desire to continue as a Googler,” according to Reuters.

Amazon agreed to pay $61.7 million to settle FTC complaint over stolen tips from Flex workers

Amazon will pay $61.7 million to compensate the drivers who loss out on the tips they were owed. 

From TC’s Sarah Perez:

According to the complaint against Amazon and its subsidiary Amazon Logistics, the company had advertised that it paid 100% of tips to drivers. But in reality, Amazon used the customer tips to cover the difference after it lowered the hourly rate — a change it didn’t inform drivers about, the complaint says.

The FTC also alleged that Amazon didn’t stop this behavior until it became aware of the FTC investigation in 2019.

Amazon union vote on the horizon

Despite Amazon’s motion to postpone the Bessemer, Alabama union election, the National Labor Relations Board on Friday denied the company’s request. The election will go as planned via mail-in ballots beginning on Monday, February 8. 

Context: Amazon has been vocally anti-union, with a website dedicated to convincing workers not to unionize, as well as fliers posted inside the workplace — even in bathroom stalls, according to The Washington Post.

Workers protest future Amazon fulfillment center

Over in Oxnard, Calif., workers protested at the site of a future Amazon fulfillment center, disrupting the construction efforts, Vice reported. The strike aimed to challenge the fact that Amazon contractor, Building Zone Industries, hired non-union workers from out of the state for the job. There were reportedly more than 100 people who participated in the strike and refused to cross the picket line to work on the project.

CA Supreme Court rejects lawsuit challenging Prop 22

The California Supreme Court shot down the lawsuit filed by a group of rideshare drivers in California and the Service Employees International Union that alleged Proposition 22 violates the state’s constitution.

“We are disappointed in the Supreme Court’s decision not to hear our case, but make no mistake: we are not deterred in our fight to win a livable wage and basic rights,” Hector Castellanos, a plaintiff in the case, said in a statement. “We will consider every option available to protect California workers from attempts by companies like Uber and Lyft to subvert our democracy and attack our rights in order to improve their bottom lines.”

The suit argued Prop 22 makes it harder for the state’s legislature to create and enforce a workers’ compensation system for gig workers. It also argues Prop 22 violates the rule that limits ballot measures to a single issue, as well as unconstitutionally defines what would count as an amendment to the measure. As it stands today, Prop 22 requires a seven-eighths legislative supermajority in order to amend the measure.

Don’t miss TC Sessions: Justice

I’m spearheading an upcoming virtual event, TC Sessions: Justice, that’s going to dive into all of these topics. You’ll be able to hear from speakers like AWU Executive Chair Parul Koul, former Amazon warehouse worker Christian Smalls, Uber Chief Diversity Officer Bo Young Lee, Backstage Capital founder and Managing Partner Arlan Hamilton and others.

Tickets are just $5 and you can snag yours here.

Source: Tech Crunch

For the latest episode of the Original Content podcast, we looked back at “Soul,” which was released on Disney+ at the end of last year.

The new Pixar film tells the story of Joe Gardner, a high school music teacher and jazz musician voiced by Jamie Foxx. Joe seems to be on the verge of his big break when he accidentally falls down an open manhole, sending him to a distinctly Pixar-ish twist on the afterlife, and eventually on a metaphysical quest to return to his body before an important concert..

Anthony has been wanting to talk about “Soul” for a while — it was easily his favorite movie of 2020, but he watched it right after we recorded our discussion of the best streaming content of 2020.

And if you’re worried that this is nothing more than 40 minutes of praise, well … you’re not entirely wrong. Both of us liked it a lot, appreciating both its vibrant (and in retrospect, melancholy) portrayal of New York City life before pandemic lockdowns and social distancing, as well as its inventive portrayal of the worlds our souls go to before we’re born and after we die. (It was so inventive that Jordan had to wonder whether any unusual substances may have been involved in its genesis.)

Still, we did acknowledge some of the criticism of “Soul,” particularly certain viewers’ disappointment that even though it’s the first Pixar film with a Black protagonist, Joe actually spends a large portion of the film as a disembodied blue spirit — entertaining from a story perspective, but not quite an unambiguous victory for representation.

You can listen to our review in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also follow us on Twitter or send us feedback directly. (Or suggest shows and movies for us to review!)

If you’d like to skip ahead, here’s how the episode breaks down:
0:00 Intro
0:20 “Soul” review
18:35 “Soul” spoiler discussion

Source: Tech Crunch

The SPAC mania continues unabated, with new SPACs being filed with the SEC on an almost hourly basis at times.

SoftBank, the Japanese telecom conglomerate which has also been running the gigantic Vision Fund and its successor, doesn’t want to be left out. Yesterday, it filed back-to-back SPAC registration statements for two new blank-check companies.

SVF Investment Corp 2 is $200 million and SVF Investment Corp 3 is a $350 million vehicle. Both SPACs have a standard roughly 15% over-allotment option, which means that their final sizes will likely end up at $230 million and $400 million respectively assuming that the underwriters take their option (number three has a slightly smaller over-allotment if you’re checking my math).

One interesting component of both SPACs is that they have what is known as a forward purchasing agreement connected to SoftBank’s Vision Fund 2. That agreement allows the second Vision Fund to purchase shares into these SPACs when they begin their business combinations with their target startups, essentially giving it the right to buy into the mergers. The Vision Fund has a $100 million agreement with SVF 2, and a $150 million agreement with SVF 3.

As with all SPACs, a registration statement is merely a filing of an intention to raise money, although these days, the vast majority of filings are later consummated.

As the numbering indicates, SoftBank had an earlier SPAC that it filed in December and officially closed on January 7 of this year. That vehicle targeted a total fundraise of $604 million including the underwriters’ over-allotment option. It also included a $250 million forward purchase agreement with the second Vision Fund similar to these latest two vehicles.

What are these SPACs looking for? Well, according to the filings, “We intend to identify, acquire and manage a business in a technology-enabled sector where our management team have differentiated experience and insights. Relevant sectors may include, but are not limited to, mobile communications technology, artificial intelligence, robotics, cloud technologies, software broadly, computational biology and other data-driven business models, semiconductors and other hardware, transportation technologies, consumer internet and financial technology.”

That seems to cover a lot, but just in case, the filings note that “However, we may consummate a transaction with a business in a different or related industry.” So basically anything.

There is no timeline yet for when the SPACs could potentially close, but typical timing is 4-8 weeks given market averages.

Source: Tech Crunch

Police in Minneapolis obtained a search warrant ordering Google to turn over sets of account data on vandals accused of sparking violence in the wake of the police killing of George Floyd last year, TechCrunch has learned.

The death of Floyd, a Black man killed by a white police officer in May 2020, prompted thousands to peacefully protest across the city. But violence soon erupted, which police say began with a masked man seen in a viral video using an umbrella to smash windows of an auto-parts store in south Minneapolis. The AutoZone store was the first among dozens of buildings across the city set on fire in the days following.

The search warrant compelled Google to provide police with the account data on anyone who was “within the geographical region” of the AutoZone store when the violence began on May 27, two days after Floyd’s death.

These so-called geofence warrants — or reverse-location warrants — are frequently directed at Google in large part because the search and advertising giant collects and stores vast databases of geolocation data on billions of account holders who have “location history” turned on. Geofence warrants allow police to cast a digital dragnet over a crime scene and ask tech companies for records on anyone who entered a geographic area at a particular time. But critics say these warrants are unconstitutional as they also gather the account information on innocent passers-by.

TechCrunch learned of the search warrant from Minneapolis resident Said Abdullahi, who received an email from Google stating that his account information was subject to the warrant, and would be given to the police.

But Abdullahi said he had no part in the violence and was only in the area to video the protests when the violence began at the AutoZone store.

The warrant said police sought “anonymized” account data from Google on any phone or device that was close to the AutoZone store and the parking lot between 5:20pm and 5:40pm (CST) on May 27, where dozens of the people in the area had gathered.

When reached, Minneapolis police spokesperson John Elder, citing an ongoing investigation, would not answer specific questions about the warrant, including for what reason the warrant was issued.

According to a police affidavit, police said the protests had been relatively peaceful until the afternoon of May 27, when a masked umbrella-wielding man began smashing the windows of the AutoZone store, located across the street from a Minneapolis police precinct where hundreds of protesters had gathered. Several videos show protesters confronting the masked man.

Police said they spent significant resources on trying to identify the so-called “Umbrella Man,” who they say was the catalyst for widespread violence across the city.

“This was the first fire that set off a string of fires and looting throughout the precinct and the rest of the city,” the affidavit read. At least two people were killed in the unrest. (Erika Christensen, a Minneapolis police investigator who filed the affidavit, was not made available for an interview.)

Police accuse the Umbrella Man of creating an “atmosphere of hostility and tension” whose sole aim was to “incite violence.” (TechCrunch is not linking to the affidavit as the police would not say if the suspect had been charged with a crime.) The affidavit also links the suspect to a white supremacist group called the Aryan Cowboys, and to an incident weeks later where a Muslim woman was harassed.

Multiple videos of the protests around the time listed on the warrant appear to line up with the window-smashing incident. Other videos of the scene at the time of the warrant show hundreds of other people in the vicinity. Police were positioned on rooftops and used tear gas and rubber bullets to control the crowds.

Law enforcement across the U.S. are increasingly relying on geofence warrants to solve crimes where a suspect is not known. Police have defended the use of these warrants because they can help identify potential suspects who entered a certain geographic region where a crime was committed. The warrants typically ask for “anonymized information,” but allow police to go back and narrow their requests on potential suspects of interest.

When allowed by law, Google notifies account holders of when law enforcement demands access to the user’s data. According to a court filing in 2019, Google said the number of geofence warrants it received went up by 1,500% between 2017 and 2018, and more than 500% between 2018 and 2019, but has yet to provide a specific number of warrants

Google reportedly received over 180 geofence warrants in a single week in 2019. When asked about more recent figures, a Google spokesperson declined to comment on the record.

Civil liberties groups have criticized the use of dragnet search warrants. The American Civil Liberties Union said that geofence warrants “circumvent constitutional checks on police surveillance.” One district court in Virginia said geofence warrants violated the constitution because the majority of individuals whose data is collected will have “nothing whatsoever” to do with the crimes under investigation.

Reports in the past year have implicated people whose only connection to a crime is simply being nearby.

NBC News reported the case of one Gainesville, Fla. resident, who was told by Google that his account information would be given to police investigating a burglary. But the resident was able to prove that he had no connection to the burglary, thanks to an app on his phone that tracked his activity.

In 2019, Google gave federal agents investigating several arson attacks in Milwaukee, Wis. close to 1,500 user records in response to geofence warrant, thought to be one of the largest grabs of account data to date.

But lawmakers are beginning to push back. New York state lawmakers introduced a bill last year that would, if passed, ban geofence warrants across the state, citing the risk of police targeting protesters. Rep. Kelly Armstrong (R-ND) grilled Google chief executive Sundar Pichai at a House Judiciary subcommittee hearing last year. “People would be terrified to know that law enforcement could grab general warrants and get everyone’s information everywhere,” said Armstrong.

Abdullahi told TechCrunch that he had several videos documenting the protests on the day and that he has retained a lawyer to try to prevent Google from giving his account information to Minneapolis police.

“Police assumed everybody in that area that day is guilty,” he said. “If one person did something criminal, [the police] should not go after the whole block of people,” he said.

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Source: Tech Crunch

After “pausing” political giving to any politician who voted to overturn the 2020 election, Microsoft has clarified changes to its lobbying policy, doubling down on its original intention and changing gears with an eye towards funding impactful organizations.

Microsoft, along with most other major companies in the tech sector and plenty others, announced a halt to political donations in the chaotic wake of the capitol riots and subsequent partisan clashes over the legitimacy of the election.

At the time, Microsoft said that it often pauses donations during the transition to a new Congress, but in this case it would only resume them “until after it assesses the implications of last week’s events” and “consult[s] with employees.”

Assessing and consulting can take a long time, especially in matters of allocating cash in politics, but Microsoft seems to have accomplished their goal in relatively short order. In a series of sessions over the last two weeks involving over 300 employees who contribute to the PAC, the company arrived at a new strategy that reflects their priorities.

In a word, they’re blacklisting any Senator, Representative, government official, or organization that voted for or supported the attempt to overturn the election. Fortunately there doesn’t seem to be a lot of grey area here, which simplifies the process somewhat. This restriction will remain in place until the 2022 election — which, frighteningly, happens next year.

In fact, as an alternative to donating to individual candidates and politicians in the first place, the PAC will establish a new fund to “support organizations that promote public transparency, campaign finance reform, and voting rights.”

More details on this are forthcoming, but it’s a significant change from direct support of candidates to independent organizations. One hardly knows what a candidate’s fund goes to (Superbowl ads this time of year), but giving half a million bucks to a group challenging voter suppression and gerrymandering in a hotly contested district can make a big difference. (Work like this on a large scale helped tip Georgia from red to blue, for instance, and it didn’t happen overnight, or for free.)

There’s even a hint of a larger change in the offing, as Microsoft’s communications head Frank X. Shaw suggests in the blog post that “we believe there is an opportunity to learn and work together” with like-minded companies and PACs. If that isn’t a sly invitation to create a coalition of the like-minded I don’t know what is.

The company also will be changing the name of the PAC to the Microsoft Corporation Voluntary PAC to better communicate that it’s funded by voluntary contributions from employees and stakeholders and isn’t just a big corporate lobbying slush fund.

As we saw around the time of the original “pause,” and indeed with many other actions in the tech industry over the last year, it’s likely that one large company (in this case Microsoft) getting specific with its political moves will trigger more who just didn’t want to be the first to go. It’s difficult to predict exactly what the long-term ramifications of these changes will be (as they are still quite general and tentative) but it seems safe to say that the political funding landscape of the next election period will look quite a bit different from the last one.

Source: Tech Crunch