Dating app S’More bets on celebrity content with S’More TV

Dating startup S’More has launched a new feature called S’More TV, which CEO Adam Cohen-Aslatei said could give users new ways to talk to each other. It also bringing the startup closer to his goal of becoming not just a dating app, but “a lifestyle brand.”

The videos on S’More TV may be familiar to people who follow the company on Instagram, where Cohen-Aslatei has hosted dating-related interviews with celebrities like WWE stars Chelsea Green and Leah Van Dale, models Nichole Holmes and Sarah Miller and Mary Fitzgerald of “Selling Sunset.” Now, however, these videos are getting a home in the S’More app itself.

Cohen-Aslatei said this wasn’t the initial plan when he started filming videos for S’More Live, but eventually he and his team decided to do more with their “nearly 50 hours of exclusive celebrity content,” seeing them as “the first organic way to have content not related to a dating profile” in the app. He suggested that this isn’t just giving users another reason to open the app, but also a crucial conversation starter.

After all, anyone who’s had to start a conversation in a dating app will probably remember moments when you’ve struggled to come up with something better than “Hey” or “How’s it going?” — and S’More presents unique challenges on that front, since the app blurs all user photos until you’ve had some real interaction. So Cohen-Aslatei said these videos can spur a more natural conversation, allowing users to “really talk about topics that they care about.”

S'More TV

Image Credits: S’More

The S’More app now includes prompts directing users to watch S’More TV, where anyone can watch and comment on the videos. If you post a particularly scintillating comment, that may help to attract potential matches, and it will give them an easy starting point for the conversation.

In fact, Cohen-Aslatei claimed that since releasing S’More TV in beta testing, the app has seen Day One retention (the number of users who open the app one day after installation) increase by 15% to the “mid-60s,” while time in the app has doubled.

He also said S’More Live is quickly approaching its 100th episode, but you won’t see all of those episodes on the app right away. Instead, the company will be adding 15 new videos to the S’More app each month.

In addition, S’More has launched a new feature called cover photos. This is basically the one exception to the blurred photos rule (although it sounds like even this photo is subtly warped), allowing users to showcase a single image of their friends, their life or their personality even before they start a conversation.


Source: Tech Crunch

Save $100 on TC Early Stage 2021: Marketing and Fundraising before this Friday

Save $100 and learn how to build a stronger startup — that’s what we’re talking about! The crème de la crème of the startup ecosystem will gather on July 8-9 to share their expertise and impart their hard-won wisdom at TC Early Stage 2021: Marketing and Fundraising.

Here’s where the saving money bit comes in. Early-bird pricing is still in play, for just a few more days. Save $100 — but only if you purchase your pass before Friday, April 30 at 11:59 p.m. (PT).

We’re building a veritable hit parade of investors, founders and top subject-matter experts to deliver highly interactive and engaging sessions focused on essential entrepreneurial skills. Learn best practices, avoid pitfalls and walk away with a realistic view of what to expect on the road to building a startup.

Chloe Leaaetoa, the founder of Socicraft, attended Early Stage 2020 and shared this takeaway with us.

You learn from industry leaders and seasoned founders — people who’ve already been there and done that. They were genuine and honest about industry expectations. Plus, they shared first-hand accounts, which made them more relatable.

We’ve already announced that Mike Duboe, Sarah Kunst and Rahul Vohra will join us at TC Early Stage 2021: Marketing and Fundraising, and we’ll be announcing more speakers every week. Keep checking back!

You’re a smart bunch so you’ve no doubt noticed that Early Stage 2021 (the July edition) will include a lot of information on every startup founder’s favorite topic: fundraising. Take a look at just some of the many top-flight financial experts who will be in the house and on the stage. We can’t wait to share the specific topics they’ll discuss. Again, stay tuned!

  • Arvind Purushotham: Managing Director & Global Head Venture Investing, Citi Ventures
  • Rebecca Reeve Henderson: Founder & CEO, Rsquared Communication
  • Benjamin Sun: Co-founder & General Partner, Primary Venture Partners
  • Adina Tecklu: Principal, Khosla Ventures

And don’t forget about the TC Early-Stage Pitch-off that takes place on day two. We’ll start accepting applications soon, and that’s when Team TechCrunch gets busy and chooses 10 early-stage startup founders to throw down in front of a panel of VC judges. Prizes, glory, exposure and fun! Be sure to check out Nalagenetics — winner of the April Early Stage 2021 pitch-off.

TC Early Stage 2021: Marketing and Fundraising takes place July 8-9. Ready to learn everything you can to build a successful startup empire? Ready to save $100 in the process? Then buy your pass before the early-bird deadline shuts off the savings on April 30, at 11:59 p.m. (PT).

Is your company interested in sponsoring or exhibiting at Early Stage 2021 – Marketing & Fundraising? Contact our sponsorship sales team by filling out this form.

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Source: Tech Crunch

How Brex more than doubled its valuation in a year

Brex, a fintech company that provides corporate cards and spend-management software to businesses, announced earlier today that it closed a $425 million Series D round of capital at a valuation of around $7.4 billion. The new capital came less than a year after Brex raised $150 million at a $2.9 billion pre-money valuation.

So, how did the company manage to so rapidly boost its valuation and raise its largest round to date? TechCrunch spoke with Brex CEO Henrique Dubugras after his company’s news broke. We dug into the how and why of its new investment and riffed on what going remote-first has done for the company, as well as its ability to attract culture-aligned and more diverse talent.

More customers, more product

Undergirding the company’s financial news today was its announcement of Brex Premium, a software suite that the unicorn intends to charge for. As TechCrunch has written ad nauseam, there has been an interesting rift between corporate spend-management companies regarding whether they charge for the software that they layer around their proffered business plastic. Brex has now crossed this particular Rubicon and joined those that do, at least in some cases.

Brex Premium will run customers $49 per month, which Dubugras described in a call as less expensive than the systems it may replace. For companies looking for integrated bill pay, expense management and the like, it could be a good fit. And the service could bolster Brex’s aggregate revenue run rate with high-margin, recurring software fees that public market investors have long coveted.

On the topic of investors, let’s circle back to Brex’s round. Here’s what we need to know: How quickly has Brex grown in recent months, why did the company choose Tiger as its lead investor (from over $1 billion in demand for the round), and what’s ahead for the company itself?

In order:

Growth

Per Dubugras, from March 2020 to March 2021, Brex grew its revenues and TPV, or total payment volume, by more than 100%. As Brex reached $1 billion in TPV during its first seven months of its existence, again according to its CEO, the company’s aggregate TPV add during that 12-month period was in excess of that figure. Multiples higher, by our reckoning.

That growth explains how Brex was able to double its valuation. It grew quickly. How it did so is worth exploring.


Source: Tech Crunch

Hear about building AVs under Amazon from Zoox CTO Jesse Levinson at TC Sessions: Mobility 2021

Last year, autonomous driving startup Zoox was acquired by Amazon in a deal worth $1.3 billion. Since then, Zoox has continued to pursue its existing strategy of developing and deploying autonomous passenger vehicles, revealing the design of its long-anticipated robotaxi late in December. From concept to reveal, Zoox spent six years developing its built-for-purpose passenger AV, and the plan is to launch them initially with commercial deployments in Las Vegas and San Francisco following testing. At TC Sessions: Mobility this year on June 9, we’ll have the chance to speak to Zoox co-founder and CTO Jesse Levinson about the company’s progress toward those goals, and what it’s like for Zoox nearly a year on as an Amazon company.

[Did you know? Early-bird ticket sales end next week! Save $100 before prices go up]

In an interview with TechCrunch from last year, Levinson told us that life under Amazon at the AV company has been essentially business as usual since the acquisition — with greatly expanded access to resources, of course, and potentially with even more autonomy than before, he said, since they’re not beholden to a host of outside investors as they pursue their goals.

Of course, the natural assumption when considering Amazon and its interest in autonomous vehicles is package delivery — which is why it’s so interesting that Zoox is, and has always, prioritized movement of people, not parcels, in its AV development roadmap. Zoox’s debut vehicle has been designed entirely with passenger transportation in mind, though the company’s CEO Aicha Evans has acknowledged in the past that it could definitely work on package delivery in partnership with its new corporate owner in the future.

We’ll hear from Levinson if there are any updates to Zoox’s plan or focus, and what Amazon’s ambitions are for autonomous vehicles in the long term. We’ll also talk about the AV industry overall, and the major shifts its undergone in the years that Zoox has been operating, and what that means for growing and attracting talent. Levinson knows the industry and the state of the art in AV technology better than most, so be sure to grab tickets to TC Sessions: Mobility 2021 ASAP and check out our chat on June 9.

Book your early-bird pass today and save $100 before prices increase next week and join today’s leading mobility-startup event.

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Source: Tech Crunch

Gardening startups like Neverland want to make every day Earth Day for the home gardener

Vera Kutsenko and Hayley Leibson have incredible tech pedigrees, but their latest venture involves as much digging in dirt as it does digging through lines of code.

The two women have founded Neverland, a startup for the home gardener that aims to be a marketplace connecting mom and pop gardening shops with the explosion of amateur horticulturalists that have sprung up since the pandemic began and everyone needed someone (or something) to talk to.

Gardening businesses were among the big winners during the pandemic, with sales at home and lawn care and gardening businesses shooting up 9% in 2020, according to data from the 200 year-old flower retailer, Breck’s.

It’s that surge in business, and the co-founders’ passion for home plants, that led to the launch of Neverland, they said.

Using customer data, Neverland prompts users on how to optimize their gardens and horticulture activities based on their geographies and what plants customers would want to grow. The company also looks to connect would-be green-thumbed growers with companies in their regions.

“The educational piece we’re pulling from is the USDA agricultural APIs,” said Kutsenko. “We take and translate the super science-y terms into language that [customers] would understand. We’re pulling this from existing government resources and aggregating it and making it accessible to folks.”

For the founders, Neverland is a change of pace. Kutsenko studied computer science at Cornell, worked at Facebook on the Internet.org initiative and led teams working on the mobile app at Uber. Meanwhile, Leibson founded LunchClub and served as that company’s chief operating officer.

Kutsenko and Leibson first connected through a women’s tech networking group in San Francisco and bonded over a shared love of plants. Leibson has roughly 24 plants in her apartment while Kutsenko had a plant nursery that she tended to herself.

“We really view the opportunity for Neverland to be the sustainability focused marketplace,” said Leibson. “The power of what we’re doing is we’re able to create a really consistent support network for the consumer.”

It’s a huge market. Kutsenko said that globally plant and gardening spending is roughly $52 billion and $28 billion of that market is indoor and outdoor gardening.

It was both the CVs of the founders and the overall size of the market that convinced investors to throw their financial weight behind the company — and it’s an impressive roster of consumer-focused and sustainability minded investors including: Obvious Ventures, Maveron, Kimbal Musk, and Y Combinator, which had Neverland in its most recent cohort. In all, Neverland managed to bring in $3 million for its marketplace and gardening community. 

And since everything starts with community, the company has managed to amass a healthy following on Instagram even before its scheduled launch this summer. Already 140,000 people follow Neverland’s posts. And the company has signed on 50 sellers in the Bay Area and beyond.


Source: Tech Crunch

Interview: Apple executives on the 2021 iPad Pro, stunting with the M1 and creating headroom

When the third minute of Apple’s first product event of 2021 ticked over and they had already made 3 announcements we knew it was going to be a packed one. In a tight single hour this week, Apple launched a ton of new product including AirTags, new Apple Card family sharing, a new Apple TV, a new set of colorful iMacs, and a purple iPhone 12 shade.

Of the new devices announced, though, Apple’s new 12.9” iPad Pro is the most interesting from a market positioning perspective. 

This week I got a chance to speak to Apple Senior Vice President of Worldwide Marketing Greg Joswiak and Senior Vice President of Hardware Engineering John Ternus about this latest version of the iPad Pro and its place in the working universe of computing professionals. 

In many ways, this new iPad Pro is the equivalent of a sprinter being lengths ahead going into the last lap and just turning on the afterburners to put a undebatable distance between themselves and the rest of the pack. Last year’s model is still one of the best computers you can buy, with a densely packed offering of powerful computing tools, battery performance and portability. And this year gets upgrades in the M1 processor, RAM, storage speed, Thunderbolt connection, 5G radio, new ultra wide front camera and its Liquid Retina XDR display. 

This is a major bump even while the 2020 iPad Pro still dominates the field. And at the center of that is the display.

Apple has essentially ported its enormously good $5,000 Pro Display XDR down to a 12.9” touch version, with some slight improvements. But the specs are flat out incredible. 1,000 nit brightness peaking at 1,600 nits in HDR with 2,500 full array local dimming zones — compared to the Pro Display XDR’s 576 in a much larger scale.

Given that this year’s first product launch from Apple was virtual, the media again got no immediate hands on with the new devices introduced, including iPad Pro. This means that I have not yet seen the XDR display in action. Unfortunately, these specs are so good that estimating them without having seen the screen yet is akin to trying to visualize “a trillion” in your head. It’s intellectually possible but not really practical. 

It’s brighter than any Mac or iOS device on the market and could be a big game shifting device for professionals working in HDR video and photography. But even still, this is a major investment to ship a micro-LED display in the millions or tens of millions of units with more density and brightness than any other display on the market. 

I ask both of them why there’s a need to do this doubling down on what is already one of the best portable displays ever made — if not one of the best displays period. 

“We’ve always tried to have the best display,” says Ternus. “We’re going from the best display on any device like this and making it even better, because that’s what we do and that’s why we, we love coming to work every day is to take that next big step.

“[With the] Pro Display XDR if you remember one thing we talked about was being able to have this display and this capability in more places in the work stream. Because traditionally there was just this one super expensive reference monitor at the end of the line. This is like the next extreme of that now you don’t even have to be in the studio anymore you can take it with you on the go and you can have that capability so from a, from a creative pro standpoint we think this is going to be huge.”

In my use of the Pro Display and my conversations with professionals about it one of the the common themes that I’ve heard is the reduction in overall workload due to the multiple points in the flow where color and image can be managed accurately to spec now. The general system in place puts a reference monitor very late in the production stage which can often lead to expensive and time consuming re-rendering or new color passes. Adding the Liquid Retina XDR display into the mix at an extremely low price point means that a lot more plot points on the production line suddenly get a lot closer to the right curve. 

One of the stronger answers on the ‘why the aggressive spec bump’ question comes later in our discussion but is worth mentioning in this context. The point, Joswiak says, is to offer headroom. Headroom for users and headroom for developers. 

“One of the things that iPad Pro has done as John [Ternus] has talked about is push the envelope. And by pushing the envelope that has created this space for developers to come in and fill it. When we created the very first iPad Pro, there was no Photoshop,” Joswiak notes. “There was no creative apps that could immediately use it. But now there’s so many you can’t count. Because we created that capability, we created that performance — and, by the way sold a fairly massive number of them — which is a pretty good combination for developers to then come in and say, I can take advantage of that. There’s enough customers here and there’s enough performance. I know how to use that. And that’s the same thing we do with each generation. We create more headroom to performance that developers will figure out how to use.

“The customer is in a great spot because they know they’re buying something that’s got some headroom and developers love it.”

The iPad Pro is now powered by the M1 chip — a move away from the A-series naming. And that processor part is identical (given similar memory configurations) to the one found in the iMac announced this week and MacBooks launched earlier this year.

“It’s the same part, it’s M1,” says Ternus. “iPad Pro has always had the best Apple silicon we make.”

“How crazy is it that you can take a chip that’s in a desktop, and drop it into an iPad,” says Joswiak. “I mean it’s just incredible to have that kind of performance at such amazing power efficiency. And then have all the technologies that come with it. To have the neural engine and ISP and Thunderbolt and all these amazing things that come with it, it’s just miles beyond what anybody else is doing.”

As the M1 was rolling out and I began running my testing, the power per watt aspects really became the story. That really is the big differentiator for M1. For decades, laptop users have been accustomed to saving any heavy or intense workloads for the times when their machines were plugged in due to power consumption. M1 is in the process of resetting those expectations for desktop class processors. In fact, Apple is offering not only the most powerful CPUs but also the most power-efficient CPUs on the market. And it’s doing it in a $700 Mac Mini, a $1,700 iMac and a $1,100 iPad Pro at the same time. It’s a pretty ridiculous display of stunting, but it’s also the product of more than a decade of work building its own architecture and silicon.

“Your battery life is defined by the capacity of your battery and the efficiency of your system right? So we’re always pushing really really hard on the system efficiency and obviously with M1, the team’s done a tremendous job with that. But the display as well. We designed a new mini LED for this display, focusing on efficiency and on package size, obviously, to really to be able to make sure that it could fit into the iPad experience with the iPad experience’s good battery life. 

“We weren’t going to compromise on that,” says Ternus.

One of the marquee features of the new iPad Pro is its 12MP ultra-wide camera with Center Stage. An auto-centering and cropping video feature designed to make FaceTime calling more human-centric, literally. It finds humans in the frame and centers their faces, keeping them in the frame even if they move, standing and stretching or leaning to the side. It also includes additional people in the frame automatically if they enter the range of the new ultra-wide 12MP front-facing camera. And yes, it also works with other apps like Zoom and Webex and there will be an API for it.

I’ve gotten to see it in action a bit more and I can say with surety that this will become an industry standard implementation of this kind of subject focusing. The crop mechanic is handled with taste, taking on the characteristics of a smooth zoom pulled by a steady hand rather than an abrupt cut to a smaller, closer framing. It really is like watching a TV show directed by an invisible machine learning engine. 

“This is one of the examples of some of our favorite stuff to do because of the way it marries the hardware and software right,” Ternus says. “So, sure it’s the camera but it’s also the SOC and and the algorithms associated with detecting the person and panning and zooming. There’s the kind of the taste aspect, right? Which is; how do we make something that feels good it doesn’t move too fast and doesn’t move too slow. That’s a lot of talented, creative people coming together and trying to find the thing that makes it Apple like.”

It also goes a long way to masking the awkward horizontal camera placement when using the iPad Pro with Magic Keyboard. This has been a big drawback for using the iPad Pro as a portable video conferencing tool, something we’ve all been doing a lot of lately. I ask Ternus whether Center Stage was designed to mitigate this placement.

“Well, you can use iPad in any orientation right? So you’re going to have different experiences based on how you’re using it. But what’s amazing about this is that we can keep correcting the frame. What’s been really cool is that we’ve all been sitting around in these meetings all day long on video conferencing and it’s just nice to get up. This experience of just being able to stand up and kind of stretch and move around the room without walking away from the camera has been just absolutely game changing, it’s really cool.”

It’s worth noting that several other video sharing devices like the Portal and some video software like Teams already offer cropping-type follow features, but the user experience is everything when you’re shipping software like this to millions of people at once. It will be interesting to see how Center Stage stacks up agains the competition when we see it live. 

With the ongoing chatter about how the iPad Pro and Mac are converging from a feature-set perspective, I ask how they would you characterize an iPad Pro vs. a MacBook buyer? Joswiak is quick to respond to this one. 

“This is my favorite question because you know, you have one camp of people who believe that the iPad and the Mac are at war with one another right it’s one or the other to the death. And then you have others who are like, no, they’re bringing them together — they’re forcing them into one single platform and there’s a grand conspiracy here,” he says.

“They are at opposite ends of a thought spectrum and the reality is that neither is correct. We pride ourselves in the fact that we work really, really, really hard to have the best products in the respective categories. The Mac is the best personal computer, it just is. Customer satisfaction would indicate that is the case, by a longshot.”

Joswiak points out that the whole PC category is growing, which he says is nice to see. But he points out that Macs are way outgrowing PCs and doing ‘quite well’. He also notes that the iPad business is still outgrowing the tablets category (while still refusing to label the iPad a tablet). 

“And it’s also the case that it’s not an ‘either or’. The majority of our Mac customers have an iPad. That’s an awesome thing. They don’t have it because they’re replacing their Mac, it’s because they use the right tool at the right time.

What’s very cool about what [Ternus] and his team have done with iPad Pro is that they’ve created something where that’s still the case for creative professionals too — the hardest to please audience. They’ve given them a tool where they can be equally at home using the Mac for their professional making money with it kind of work, and now they can pick up an iPad Pro — and they have been for multiple generations now and do things that, again, are part of how they make money, part of their creative workflow flow,” says Joswiak. “And that test is exciting. it isn’t one or the other, both of them have a role for these people.”

Since converting over to an iPad Pro as my only portable computer, I’ve been thinking a lot about the multimodal aspects of professional work. And, clearly, Apple has as well given its launch of a Pro Workflows team back in 2018. Workflows have changed massively over the last decade, and obviously the iPhone and an iPad, with their popularization of the direct manipulation paradigm, have had everything to do with that. In the current world we’re in, we’re way past ‘what is this new thing’, and we’re even way past ‘oh cool, this feels normal’ and we’re well into ‘this feels vital, it feels necessary.’ 

“Contrary to some people’s beliefs, we’re never thinking about what we should not do on an iPad because we don’t want to encroach on Mac or vice versa,” says Ternus. “Our focus is, what is the best way? What is the best iPad we can make what are the best Macs we can make. Some people are going to work across both of them, some people will kind of lean towards one because it better suits their needs and that’s, that’s all good.”

If you follow along, you’ll know that Apple studiously refuses to enter into the iPad vs. Mac debate — and in fact likes to place the iPad in a special place in the market that exists unchallenged. Joswiak often says that he doesn’t even like to say the word tablet.

“There’s iPads and tablets, and tablets aren’t very good. iPads are great,” Joswiak says. “We’re always pushing the boundaries with iPad Pro, and that’s what you want leaders to do. Leaders are the ones that push the boundaries leaders are the ones that take this further than has ever been taken before and the XDR display is a great example of that. Who else would you expect to do that other than us. And then once you see it, and once you use it, you won’t wonder, you’ll be glad we did.”

Image Credits: Apple


Source: Tech Crunch

Gillmor Gang: FreeCoin

The current rave about newsletters and so-called or social audio is just the latest version of the story of podcasting. Take the idea that podcasting is experiencing a new wave of popularity and scaffolding. Are you sure? Apple is bent on turning the space into a subscription model, and we’re all going to twist again like we did last summer. Somehow I doubt it. The basic attraction for me is not paying for podcasts. Subscription startups may be an important step forward, but the heart of the matter is talent formation.

Back when they first started, the real charge was the ability to own the whole stack: writer, producer, editor, star, and marketer. Making money for this may have been a future goal, but right now the real power was in figuring out what might work without the intrusion of what people other than yourself thought about the product. Only if something made itself apparent was it necessary to address the needs and wants of the audience.

Luckily, that ruled out about ninety percent of the resulting wave of stuff. There were Ted talks, or what became Ted talks, well thought out verbal slide decks in an 8 minute payload that grabbed, shook, and exacted payment in credibility and validation of the expertise of the artist. Always lurking was the question of what day job the author was moonlighting from. Many self help business books emerged from this.

Then there were the professionals, the public radio folks who knew how to do this in their sleep but were looking for a role not dependent on grant writing or public liberal funding. Reporters who knew how to squeeze out a story, producers who mined their rolodex to fashion a conversation, screenwriters looking for momentum to bank a shot off studio executives to get a pilot or series starter commitment. Eventually this added up to enough successful podcasts to attract sponsorship support from audiobooks and publishing services. Scripted shows became farm clubs for independent talent aiming for the Big Show. This endured for 20 years.

Meanwhile, the Beatles transformed the music business from a vaudeville-like zero-sum game to a Renaissance of control over writing, performing, promoting, and touring. Aspiration was the fuel of the business model, obviating the need for incremental success in favor of explosive momentum and dominance of the media. Hair, boots, sex, striking fear in the hearts of parents and then politicians everywhere. Sgt. Pepper and Kubrick created a version of the future that made everything else pale by comparison. That it all crashed and burned was just one of the risks of what became the startup culture in Silicon Valley and Route 128.

In today’s world of NFTs and Decacorns, free still has a reason for believing. The old guard of the blogging world have reinvented themselves as Lone Rangers in the creator economy. Slap a badge on that podcast and hitch a ride on the promise of endless subscription growth, minus 10% per newsletter sub or 30% for the first year in the AppStore. It’s not the long tail, so what is it? To be sure, the world will endorse the talented solitary surfers, armed with MG Sieglerian talent for the suite spot of the tech zeitgeist, the revolutionary zeal of the breakthrough synthesists of the political, lyrical, and comic survivalists.

How will the media compensate for the loss of their gatekeeper status? For starters, the more the stampede accelerates, the bundlers will storm the economics with constructs that look very much like the magazines and social destinations they replace. As crypto enters the bloodstream, streaming will generate a new measure of success and equity for the artists. Free will still be the driver of the form, but transitional models like tip jars will migrate to social capital to be banked by investors betting on the future success of the talent.

Even this early, some things have to change. The no recording conceit is an artifact of the launch stage, soon to be jettisoned when the effort reaches escape velocity. Clubhouse gains much of its critical mass from who rather than how many are swarming; interesting combinations of speakers and listeners weigh more tellingly than the raw numbers of name guests and moderators. Live is important, but committing to the voice of the artist is a calculation of time, window of opportunity, relevance to the emotion and tenor of the times. And the competitive landscape for that attention spans so many of the medias being replaced or transformed by the application of free.

None of this means the newsletter and conversation startups won’t succeed. Subscribing gives us something to consume to justify the tithe, and most people who drop streaming subs replace them with another service. As these services proliferate, competition drives innovation and expansion into events and paradigm shifts like Netflix and SPACs. Witness TechCrunch, built on just the dynamics Substack and Revue-Twitter now make accessible to a new wave of Arringtons.

from the Gillmor Gang Newsletter

__________________

The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary and Steve Gillmor. Recorded live Friday, April 16, 2021.

Produced and directed by Tina Chase Gillmor @tinagillmor

@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang

Subscribe to the new Gillmor Gang Newsletter and join the backchannel here on Telegram.

The Gillmor Gang on Facebook … and here’s our sister show G3 on Facebook.


Source: Tech Crunch

Building a creator-focused OS

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. 

A week ago TechCrunch covered Pico’s $6.5 million funding round and described it as “a New York startup that helps online creators and media companies make money and manage their customer data.” The Exchange has also covered Pico before, most recently during a mid-2020 dive into the world of indie pubs and subscription media.

While our own Anthony Ha did an inimitable job covering the Pico round, I got on a Zoom call with the company, as well, as their new capital came with a relaunch of sorts that I wanted to better understand.

The Pico team walked me through what’s changed at their business by describing the historical progress of creative digital tooling. They said earlier eras in the space focused on content hosting and distribution. In the startup’s view, a new generation of creative-focused tooling will bring the market to an era in which content management systems, or CMSs — say, Substack or WordPress — will not own the center of tooling. Instead, monetization will.

That’s Pico’s bet, and so it’s building what it considers to be an operating system for the creator market. My gut read is that a creative digital world that centers around monetization sounds like one that is more lucrative than what preceding eras brought us.

Pico’s view is that regardless of where someone first builds their audience, they eventually go multi-SKU — or multi-platform, perhaps — so keeping a single, centralized register of customer data may prove critical.

The startup’s revamped service is a bit of a monetization tool, as before, along with a creator-focused CRM that sits atop your CMS or other digital output on any particular platform. So far customer growth at the company looks good, growing by about 5x in the last year. Let’s see how far Pico can ride its vision, and if it can help build out a middle class in the creator economy.

The grocery revolution will be IRL

Somewhat lost in our circles amid the hype regarding Instacart’s epic COVID period is the fact that most folks still go to stores to buy their fruit and veg, as our friends in the UK might say.

Grocers did not forget the fact. But their historically thin margins and rising competition for customer ownership in the Instacart era hasn’t left them too secure. How can they pursue a more digitally enabled strategy without outsourcing their customer relationship to a third party?

Swiftly might be part of the answer. The startup is building technology that may help grocery chains of all sizes go digital, take advantage of modern mobile technology, and generate more incomes via ads, while offering consumers more shopping options. Neat, yeah?

The startup has raised a little over $15 million to date, per Crunchbase data, but came back into our minds thanks to the launch of a deal with the Dollar Tree company, a consumer retailer that has around one zillion stores in America.

I’ve been aware of Swiftly for ages, having met its co-founder Henry Kim back when he was building Sneakpeeq, which later became Symphony Commerce. The latter company was eventually bought by Quantum Retail. But during my chats with Kim over the years in and around San Francisco, he consistently brought up the grocery market, a space he’d had experience in before building Symphony Commerce.

After hearing Kim hype up the possibilities for grocery and digital for a half decade or so, to see the company that came out of his hopes and planning land a major partner is fun.

Swiftly provides two main products, a retail system and a media service. The retail side of its business provides checkout services, loyalty programs, personalized offers and the like for mobile shoppers. And the media side allows IRL grocers to snag a bit of the consumer packaged goods (CPG) ad spend that they often miss out on, while looping in analytics to provide better attribution to the impact of ads sold.

I expect that Swiftly will raise more capital in the next few quarters now that it has a big, public deal out. More when we have it.

UiPath, SPACs, and a neat venture capital round

Over the past two weeks The Exchange has written quite a lot about the UiPath IPO. Probably too much. But to catch you up just in case, the company’s first IPO pricing range looked like a warning for late-stage investors as the resulting valuations were a bit lower than anticipated. Next the company raised that range, ameliorating if not eliminating our earlier concern. Then the company priced above its raised range, though still at a discount to its final private round. Then it gained ground after starting to trade, and its CFO was like, we did good.

To dig even more into the company’s private-public valuation saga, The Exchange asked B2B investor Dharmesh Thakker, a general partner at Battery Ventures, about his take on the company’s final private round in the context of it landing a bit higher than where the company eventually priced its IPO. Here’s what he had to say:

[T]here was smart money involved in that round. These are people who understand that material value creation happens 3-5 years post IPO, as we have seen with Twilio, Atlassian, MongoDB, Okta, and Crowdstrike who have increased value 5-10x post IPO.

Right now, UIPath has only 1% penetration at $608M revenue in a $60B automation market, and the urgency around intelligent process automation for repetitive tasks is only increasing post-COVID. Companies need help managing their costs with automation. So, as the company penetrates its target market and grows over time, UIPath will drive ongoing value, which pre-IPO and IPO stage investors realize. They will be patient.”

He’s bullish, in other words. A more acerbic take on the UiPath IPO came in from PitchBook analyst Brendan Burke. Here’s what he had to say about the company and its market:

RPA has scaled rapidly due to the demand for automation yet remains a limited solution that may lack durable value. Due to its reliance on custom scripts, we view RPA as a bridge technology to cloud-native AI automation that faces competitive risk from AI-native challengers. The future of enterprise automation is for front-line users to deploy cloud-native machine learning models that can adapt to dynamic data streams and make accurate decisions. UiPath’s implementations are not cloud-native and require third party integrations with around 75 AI model vendors for intelligent decision-making. Additionally, the company lists the ability to recruit AI engineers as a risk factor for the business. UiPath’s ability to expand across the AI value chain will be critical for its long-term prospects.

I include that remark as it can be, at times, hard to get actual negative commentary out of the broader analyst world, as people are so terrified of being rude.

Scooting along, there’s a new SPAC deal out this week that I wanted to flag for you: SmartRent is merging with Fifth Wall Acquisition Corp. I. SmartRent raised more than $100 million while private, according to Crunchbase data, from RET Ventures, Spark Capital and Bain Capital Ventures, among others.

So this particular SPAC deal, which puts a $2.2 billion equity valuation on SmartRent, is a material venture-backed exit. You can check its investor deck here. We care about the company as it appears to work in a similar space to Latch, which is also going out via a SPAC. Dueling OS companies for rental units? This should be fun. (More on Latch’s SPAC deal here.)

Finally for our main work today, HYPR raised $35 million this week. Among all the venture capital rounds that I wish I could have written about this week but didn’t get to, HYPR is up there because it promises a password-free future. And having just raised a Series C, it may have a shot at pulling it off. Please god, let it happen.

Various and sundry

I got to cover a few rounds raised by recent Y Combinator graduates this week, including Queenly and Albedo’s recent funding events. Check ‘em out.

Oh, and Afterpay’s recent earnings show that the buy-now-pay-later market is still growing like all hell,

Alex


Source: Tech Crunch

What the MasterClass effect means for edtech

MasterClass, which sells a subscription to celebrity-taught classes, sits on the cusp of entertainment and education. It offers virtual, yet aspirational learning: an online tennis class with Serena Williams, a cooking session with Gordon Ramsay. While there’s the off chance that an instructor might actually talk to you — it has happened before — the platform mostly just offers paywalled documentary-style content.

The vision has received attention. MasterClass is raising funding that would value it at $2.5 billion, as scooped by Axios and confirmed independently by a source to TechCrunch. But while MasterClass has found a sweet spot, can the success be replicated?

Investors certainly think so. Outlier, founded by MasterClass’ co-founder, closed a $30 million Series C this week, for affordable, digital college courses. The similarities between Outlier and its founder’s alma mater aren’t subtle: It’s literally trying to apply MasterClass’ high-quality videography to college classes. This comes a week after I wrote about a “MasterClass for Chess lovers” platform launched by former Chess World Champion Garry Kasparov.

Two back-to-back MasterClass copycats raising millions in venture capital makes me think about if the model can truly be verticalized and focused down into specific niches. After 2020 and the rise of Zoom University, we know edtech needs to be more engaging, but we don’t know the exact way to get there. Is it by creating micro-learning communities around shared loves? Is it about gamification? Aspirational learning has different incentives than for-credit learning. In order to be successful, Outlier needs to prove to universities it can use MasterClass magic for true outcomes that rival in-person lectures. It’s a harder, and more ambtious promise.

My riff aside, I turned to two edtech founders to understand how they see the MasterClass effect panning out, and to cross-check my gut reaction.

Taylor Nieman, the founder of language learning startup Toucan:

Although I do love how these models try to lean into this theme of “invisible learning” like we leverage with Toucan, it faces the same issues as so many other consumer products that try to steal time out of people’s very busy days. Constantly competing for time leads to terrible engagement metrics and very high churn. That leads me to question what true learning outcomes could occur from little to no usage of the product itself.

Amanda DoAmaral, the founder of Fiveable, a learning platform for high school students:

Masterclass is important for showing us why educational content should be treated more like entertainment. All of our bars for content quality is much higher now than it ever was before and I’m excited to see how that affects learning across the board.

For students, it’s about creating environments that support them holistically and giving them space to collaborate openly. It feels so obvious that these spaces should exist for young people, but we’ve lost sight of what students actually need. At my school, we built policies that assumed the worst in students. I want to flip that. Assume the best, be proactive to keep them safe, and create ways to react when we need to.

Anyways, that’s just some nuance to chew on during this fine day. In the rest of this newsletter, we will focus a lot on tactical advice for founders, from the money they raise to the peacock dance they might want to do one day. Make sure to follow me on Twitter @nmasc_ so we can talk during the week, too!

The peacock dance

You know when male peacocks fan their feathers to court a lover? That, but for startups trying to get acquired. As one of our many rabbit holes on Equity this week, we talk about Discord walking away from a Microsoft deal, and if that deal ever existed in the first place or if it was just a way to drum up investor excitement in the audio gaming platform.

Here’s what to know: Discord is reportedly pursuing an IPO after walking away from talks with multiple companies that were looking to acquire the audio gaming giant.

Discord aside, the consolidation environment continues to be hot for some sectors.

Four business people used ropes to tighten their money bags, economic austerity, reduced income, economic crisis

Image Credits: VectorInspiration / Getty Images

Even venture capital knows that the future isn’t simply venture capital

Clearbanc, a Toronto-based fintech startup that gives non-dilutive financing to businesses, has rebranded alongside a $100 million financing that valued it at $2 billion. Now rebranded as Clearco, the startup wants to be more than just a capital provider, but a services provider, too.

Here’s what to know: The startup has been on a tear of product development for the past year, launching services such as valuation calculators or runway tools. It’s a step away from what Clearbanc originally flexed: the 20-minute term sheet and rapid-fire investment. I talk about some of the levers at play in my piece:

Many of Clearco’s newest products are still in their infancy, but the potential success of the startup could nearly be tied to the general growth of startups looking for alternatives to venture capital when financing their startups. Similar to how AngelList’s growth is neatly tied to the growth of emerging fund managers, Clearco’s growth is cleanly related to the growth of founders who see financing as beyond a seed check from Y Combinator.

abstract human brain made out of dollar bills isolated on white background

Abstract human brain made out of dollar bills isolated on white background. Image Credits: Iaremenko / Getty Images

Don’t market your opportunity away

Keeping on the theme of tactical advice for founders, let’s move onto talking about marketing. Tim Parkin, president of Parkin Consulting, explained how startup founders can use marketing as a tool to stand out in the noisy environment. Differentiation has never been harder, but also more imperative.

Here’s what to know: Parkin outlines four ways that martech will shift in 2021, strapped with anecdotes and a nod to the importance of investing in influencers.

Red ball on curved light blue paper, blue background. Image Credits: PM Images / Getty Images

Around TechCrunch

Your humble yet favorite startup podcast, Equity, got nominated for a Webby! Me and the team need your help to win, so please vote for us here. Your support means a ton.

This newsletter will always be free, but if you do want to support me, feel free to use code STARTUPSWEEKLY for 25% off a subscription to Extra Crunch.

Across the site

Seen on TechCrunch

The rise of the next Coinbase, thanks to Coinbase

Attack of the robotic SPACs

Tiger Global backs Indian crypto startup at over $500M valuation

This is your brain on Zoom

Early Coinbase backer Garry Tan is keeping the ‘vast majority’ of his shares because of this deal

Seen on Extra Crunch

Dear Sophie: How can I get my startup off the ground and visit the US?

How to pivot your startup, save cash and maintain trust with investors and customers

How startups can ensure CCPA and GDPR compliance in 2021

As UiPath closes above its final private valuation, CFO Ashim Gupta discusses his company’s path to market

European VC soars in Q1

zoom glitch

Image Credits: TechCrunch

Thanks for reading along today and everyday. Sending love to my readers in India and everyone around the world that is facing yet another deadly surge of this horrible disease. I’m rooting for you.

N


Source: Tech Crunch

The SEC should do more to make startup equity compensation transparent

Imagine that you get a job offer at your dream company. You start to negotiate the contract and everything sounds great except for one detail — your future employer refuses to say in what currency your salary would be paid. It could be U.S. dollars, euros, or perhaps Japanese yen, and you are expected to take a leap of faith and hope for fair pay. It sounds absurd, but this is exactly how the startup equity compensation market currently operates.

The typical scenario is that employers offer a number of stock options or restricted stock units (RSUs) as part of an offer letter, but do not mention the company’s total number of shares. Without this piece of information, employees cannot know whether their grants represent a 0.1% ownership stake, 0.01%, or any other percentage. Employees can ask for this information, but the employer is not required to provide it, and many startups simply don’t.

But that’s not the end of it. Due to lack of proper disclosure requirements, employees are completely oblivious to the most salient form of startup valuation information — data describing the firm’s capitalization table and aggregate liquidation preferences (which determine, in case the company is sold, how much money will be paid to investors before employees receive any payout). By not accounting for the debt-like properties of venture capital financing, employees tend to overestimate the value of their equity grants. This is especially relevant to employees of unicorn companies because the type of terms that are common in late-stage financing have a dramatic and often misleading impact on the value of the company’s common stock.

What have regulators done to fix this? Not much. Under the current regulation, the vast majority of startups are exempted from providing any information to their employees other than a copy of the options plan itself. A small percentage of startups that issue their employees more than $10 million worth of securities over a year period are required to provide additional disclosures including updated financial statements (two years of consolidated balance sheets, income statements, cash flows, and changes in stockholders’ equity). These disclosures are likely to contain sensitive information about the startup but are only remotely related to the question of valuation that employees want answered. The company’s most recent fair market valuation and the description of the employee’s anticipated payout across various exit scenarios would convey far more useful information.

The problem with the current regulation is not merely that it provides employees with either too much or too little information—it is both and more. As the lyrics of Johnny Mathis and Deniece Williams’ song go, it is “too much, too little, too late.” The regulation mandates the disclosure of too much irrelevant and potentially harmful information, too little material information, and the disclosure is delivered in a timeframe that does not permit efficient decision-making by employees (only after the employee has joined the company).

This situation is unhealthy not only for employees themselves but also for the high-tech labor market as a whole. Talent is a scarce resource that companies of all sizes depend on. Lack of information impedes competition and slows down the flow of employees to better, more promising, opportunities. In the long run, employees’ informational disadvantage can erode the value of equity incentives and make it all the more difficult for startups to compete for talent.

In an article I published in the Columbia Business Law Review, titled, “Making Disclosure Work for Startup Employees,” I argue that these problems have a relatively easy fix. Startups that issues over 10% of any class of shares to at least 100 employees should be required to disclose employees’ individual payout according an exit waterfall analysis.

Waterfall analysis describes the breakdown of cash flow distribution arrangements. In the case of startup finance, this analysis assumes that the company’s equity is sold and the proceeds are allocated in a “waterfall” down the different equity classes of shares, according to their respective liquidation preferences, until the common stockholders finally receive the residual claim, if any exists. While the information the model contains can be extremely complicated, the output is not. A waterfall model can render a graph where for each possible “exit valuation” plotted on the x-axis, the employee’s individualized “payout” is indicated on the y-axis. With the help of a cap table management platform, it is as simple as pressing a few mouse clicks.

This visual representation will allow employees to understand how much they stand to gain across a range of exit values even if they don’t understand the math and legal jargon that operate in the background. Armed with this information, employees would not need the traditional forms of disclosures now mandated by Rule 701, and startups could be relieved of the risk that the information contained in their financial statements would fall into the wrong hands. Critically, I also argue that employees should receive this information as part of the offer letter – before they choose whether to accept a job opportunity that includes an equity compensation component. 

Earlier this year, the SEC released proposed revisions to Rule 701. The proposal includes many developments – among them the introduction of an alternative to the disclosure of financial statements. For startups that hit the threshold of issuing employees over $10 million worth of securities, the proposal allows choosing between disclosing financial statements and providing an independent valuation report of the securities’ fair market value. According to the proposal, the latter should be determined by an independent appraisal consistent with the rules and regulations under Internal Revenue Code Section 409A.

This is a step in the right direction — fair market valuation is far more useful to employees than the firm’s financial statements. However, the disclosure of a 409A valuation in and of itself is just not enough. It is a well-known secret in Silicon Valley that 409A valuations are highly inaccurate. Because the appraisal firm wishes to maintain a long-lasting business relationship with the company, and given that the valuation is based on information provided by the management team and is subject to board approval, the startup maintains nearly full control over the result. Therefore, the company’s 409A valuation has informational value only when it includes the waterfall analysis that was used to generate the outcome. Moreover, the SEC’s proposal still allows the vast majority of startups (as long as they avoid the $10 million threshold) to offer equity grants without providing any meaningful disclosures.  

For over 30 years, the SEC has almost completely deregulated startup equity compensation in order to accommodate the ever growing need of startups to rely on equity in the war for talent. However, the SEC has and still is paying little attention to the other side of the employment equation—employees’ need for information regarding the value of their equity compensation. The time is ripe to revisit the protection of employees in their investor capacity under the securities regulatory regime.


Source: Tech Crunch