German football league Bundesliga teams with AWS to improve fan experience

Germany’s top soccer (football) league, Bundesliga, announced today it is partnering with AWS to use artificial intelligence to enhance the fan experience during games.

Andreas Heyden, executive vice president for digital sports at the Deutsche Fußball Liga, the entity that runs Bundesliga, says that this could take many forms, depending on whether the fan is watching a broadcast of the game or interacting online.

“We try to use technology in a way to excite a fan more, to engage a fan more, to really take the fan experience to the next level, to show relevant stats at the relevant time through broadcasting, in apps and on the web to personalize the customer experience,” Heyden said.

This could involve delivering personalized content. “In times like this when attention spans are shrinking, when a user opens up the app the first message should be the most relevant message in that context in that time for the specific user,” he said.

It also can help provide advanced statistics to fans in real time, even going so far as to predict the probability of a goal being scored at any particular moment in a game that would have an impact on your team. Heyden thinks of it as telling a story with numbers, rather than reporting what happened after the fact.

“We want to, with the help of technology, tell stories that could not have been told without the technology. There’s no chance that a reporter could come up with a number of what the probability of a shot [scoring in a given moment]. AWS can,” he said.

Werner Vogels, CTO at Amazon, says this about using machine learning and other technologies on the AWS platform to add to the experience of watching the game, which should help attract younger fans, regardless of the sport. “All of these kind of augmented customer fan experiences are crucial in engaging a whole new generation of fans,” Vogels told TechCrunch.

He adds that this kind of experience simply wasn’t possible until recently because the technology didn’t exist. “These things were impossible five or 10 years ago, mostly because now with all the machine learning software, as well as how the [pace of technology] has accelerated at such a [rate] at AWS, we’re now able to do these things in real time for sports fans.”

Bundesliga is not just any football league. It is the second biggest in the world in terms of revenue, and boasts the highest stadium attendance of all football teams worldwide. Today’s announcement is an extension of an ongoing relationship between DFL and AWS, which started in 2015 when Heyden helped move the league’s operations to the cloud on AWS.

Heyden says that it’s not a coincidence he ended up using AWS instead of another cloud company. He has known Vogels (who also happens to be a huge soccer fan) for many years, and has been using AWS for more than a decade, even well before he joined the DFL. Today’s announcement is an extension of that long-term relationship.


Source: Tech Crunch

Most tech companies aren’t WeWork

With the recent emphasis on Uber and WeWork, much media attention has been focused on high-burn, “software-enabled” startups. However, most of the IPOs of the last few years in tech have been in higher capital efficiency software-as-a-service startups (SaaS).

In the last 30 months (2017 2H onwards), a total of 21 U.S.-based, VC-backed SaaS companies have gone public, including Zoom, Slack, Datadog and others1. I analyzed all 21 companies to understand their fundraising and revenue-generating trajectories. A deep dive into the individual companies’ trajectories can be found in this Extra Crunch article.

Here are the summary takeaways from this data set:

1. At IPO, total capital raised2 was slightly ahead of annual run-rate revenue (ARR)3 for the median company

Here is a scatterplot of the ARR and cumulative capital raised at the time each company went public. Most companies are clustered close to the diagonal line that represents ARR and capital raised matching each other. Total capital raised is often neck-and-neck or slightly higher than ARR.

For example, Zscaler raised $148 million to get to $146 million of ARR at IPO and Sprout Social raised $112 million to get to $106 million of ARR.

It is useful to introduce a metric instead of looking at gross dollars, given the high variance in revenue of the companies in the data set — Sprout Social had $106 million and Dropbox had $1,222 million in ARR, a 10x+ difference. Total capital raised as a multiple of ARR normalizes this variance. Below is a histogram of the distribution of this metric.

The distribution is concentrated around 1.00x-1.25x, with the median company raising 1.23x of ARR by the time of its IPO.

There are outliers on both ends. Domo is a profligate outlier that had raised $690 million to get to $128 million of ARR, or 5.4x of ARR — no other company comes remotely close. Zoom and Datadog are efficient outliers. Zoom raised $161 million to get to $423 million of ARR and Datadog raised $148 million to get to $333 million of ARR, both representing only 0.4x of ARR.

2. Cash burn is a more accurate measure of capital efficiency and may diverge significantly from capital raised (depending on the company)

How much capital a company raised tells only half of the story of capital efficiency, because many companies are sitting on a significant cash balance. For example, PagerDuty raised a total of $174 million but had $128 million of cash left when it went public. As another example, Slack raised a total of $1,390 million prior to going public but had $841 million of unspent cash.

Why do some SaaS companies end up seemingly over-raising capital beyond their immediate cash needs despite the dilution to existing shareholders?

One reason might be that companies are being opportunistic, raising capital far ahead of actual needs when market conditions are favorable.

Another reason may be that VCs that want to meet ownership targets are pushing for larger rounds. For example, a company valued at $400 million pre-money may only need $50 million of cash but could end up taking $100 million from a VC that wants to achieve 20% post-money ownership.

These confounding factors make cash burn — calculated by subtracting the cash balance from total capital raised4 — a more accurate measure of capital efficiency than total capital raised. Here is a distribution of total cash burn as a multiple of ARR.

Remarkably, Zoom achieved negative cash burn, meaning Zoom went public with more cash on its balance sheet than all of the capital it raised.

The median company’s cash burn at IPO was 0.77x of ARR, quite a bit less than the total capital raised of 1.23x of ARR.

3. The healthiest SaaS companies (as measured by the Rule of 40) are often the most capital-efficient

The Rule of 40 is a popular heuristic to gauge the business health of a SaaS company. It asserts that a healthy SaaS company’s revenue growth rate and profit margins should sum to 40%+. The below chart shows how the 21 companies score on the Rule of 405.

Among the 21 companies, eight companies exceed the 40% threshold: Zoom (123%), Crowdstrike (119%), Datadog (76%), Bill.com (56%), Elastic (55%), Slack (52%), Qualtrics (44%) and SendGrid (41%).

Interestingly, the same outliers in terms of capital efficiency as measured by cash burn, on both extremes, are the same outliers in the Rule of 40. Zoom and Datadog, which have the highest capital efficiency, score the highest and third highest on the Rule of 40. And inversely, Domo and MongoDB, which have the lowest capital efficiency, also score lowest on the Rule of 40.

This is not surprising, because the Rule and capital efficiency are really two sides of the same coin. If a company can sustain high growth without sacrificing profit margins too much (i.e. score high on the Rule of 40), it will over time naturally end up burning less cash compared to peers.

Conclusion

To apply all of this to your favorite SaaS business, here are some questions to consider. What is the total capital raised in multiples of ARR? What is the total cash burn in multiples of ARR? Where does it stack compared to the 21 companies above? Is it closer to Zoom or Domo? How does it score on the Rule of 40? Does it help explain the company’s capital efficiency or lack thereof?

Thanks to Elad Gil and Denton Xu for reviewing drafts of this article.

Endnotes

1Only includes U.S.-based, VC-backed SaaS companies. Includes Quatrics, even though it did not go public, as it was acquired right before its scheduled IPO.

2Includes institutional investments prior to the IPO. Does not include founders’ personal capital investment.

3Note that this is not annual recurring revenue, which is not a reporting requirement for public companies. Annual run-rate revenue is calculated by annualizing quarterly revenue (multiplying by four). The two metrics will track closely for SaaS businesses, given that SaaS revenue is predominantly recurring software subscriptions.

4This is a simplified definition as it will capture non-operational uses of cash such as share repurchase from founders.

5Revenue growth is calculated as the growth rate of the revenue during the last 12 months (LTM) over the revenue during the 12 months prior to that. Profit margins are non-GAAP operating margins, calculated as operating income plus stock-based compensation expense divided by revenue over the last 12 months (LTM).


Source: Tech Crunch

Waymo’s self-driving trucks and minivans are headed to New Mexico and Texas

Waymo said Thursday it will begin mapping and eventually testing its autonomous long-haul trucks in Texas and parts of New Mexico, the latest sign that the Alphabet company is expanding beyond its core focus of launching a robotaxi business.

Waymo said in a tweet posted early Thursday it had picked these areas because they are “interesting and promising commercial routes.” Waymo also said it would “explore how the Waymo Driver” — the company’s branded self-driving system — could be used to “create new transportation solutions.”

Waymo plans to mostly focus on interstates because Texas has a particularly high freight volume, the company said. The program will begin with mapping conducted by Waymo’s Chrysler Pacifica minivans.

The mapping and eventual testing will occur on highways around Dallas, Houston and El Paso. In New Mexico, Waymo will focus on the southern most part of the state.

Interstate 10 will be a critical stretch of highway in both states — and one that is already a testbed for TuSimple, a self-driving trucking startup that has operations in Tucson and San Diego. TuSimple tests and carries freight along the Tucson to Phoenix corridor on I-10. The company also tests on I-10 in New Mexico and Texas.

 

Waymo, which is best known for its pursuit of a robotaxi service, integrated its self-driving system into Class 8 trucks and began testing them in Arizona in August 2017. The company stopped testing its trucks on Arizona roads sometime later that year. The company brought back its truck testing to Arizona in May 2019.

Those early Arizona tests were aimed at gathering initial information about driving trucks in the region, while the new round of truck testing in Arizona marks a more advanced stage in the program’s development, Waymo said at the time.

Waymo has been testing its self-driving trucks in a handful of locations in the U.S., including Arizona, the San Francisco area and Atlanta. In 2018, the company announced plans to use its self-driving trucks to deliver freight bound for Google’s  data centers in Atlanta.

Waymo’s trucking program has had a higher profile in the past year. In June, Waymo brought on 13 robotics experts, a group that includes Anki’s  co-founder and former CEO Boris Sofman, to lead engineering in the autonomous trucking division.


Source: Tech Crunch

Layoffs reach 23andMe after hitting Mozilla and the Vision Fund portfolio

Layoffs in the technology and venture-backed worlds continued today, as 23andMe confirmed to CNBC that it laid off around 100 people, or about 14% of its formerly 700-person staff. The cuts would be notable by themselves, but given how many other reductions have recently been announced, they indicate that a rolling round of belt-tightening amongst well-funded private companies continues.

Mozilla, for example, cut 70 staffers earlier this year. As TechCrunch’s Frederic Lardinois reported earlier in January, the company’s revenue-generating products were taking longer to reach market than expected. And with less revenue coming in than expected, its human footprint had to be reduced.

23andMe and Mozilla are not alone, however. Playful Studios cut staff just this week, 2019 itself saw more than 300% more tech layoffs than in the preceding year and TechCrunch has covered a litany of layoffs at Vision Fund-backed companies over the past few months, including:

Scooter unicorns Lime and Bird have also reduced staff this year. The for-profit drive is firing on all cylinders in the wake of the failed WeWork IPO attempt. WeWork was an outlier in terms of how bad its financial results were, but the fear it introduced to the market appears pretty damn mainstream by this point. (Forsake hope, alle ye whoe require a Series H.)

The money at risk, let alone the human cost, is high. Zume has raised more than $400 million. 23andMe has raised an even sharper $786.1 million. Rappi? How about $1.4 billion. And Oyo? $3.2 billion so farEvery company that loses money eventually dies. And every company that always makes money lives forever. It seems that lots of companies want to jump over the fence, make some money and rebuild investor confidence in their shares.

It’s just too bad that the rank-and-file are taking the brunt of the correction.


Source: Tech Crunch

Cortex Labs helps data scientists deploy machine learning models in the cloud

It’s one thing to develop a working machine learning model, it’s another to put it to work in an application. Cortex Labs is an early-stage startup with some open-source tooling designed to help data scientists take that last step.

The company’s founders were students at Berkeley when they observed that one of the problems around creating machine learning models was finding a way to deploy them. While there was a lot of open-source tooling available, data scientists are not experts in infrastructure.

CEO Omer Spillinger says that infrastructure was something the four members of the founding team — himself, CTO David Eliahu, head of engineering Vishal Bollu and head of growth Caleb Kaiser — understood well.

What the four founders did was take a set of open-source tools and combine them with AWS services to provide a way to deploy models more easily. “We take open-source tools like TensorFlow, Kubernetes and Docker and we combine them with AWS services like CloudWatch, EKS (Amazon’s flavor of Kubernetes) and S3 to basically give one API for developers to deploy their models,” Spillinger explained.

He says that a data scientist starts by uploading an exported model file to S3 cloud storage. “Then we pull it, containerize it and deploy it on Kubernetes behind the scenes. We automatically scale the workload and automatically switch you to GPUs if it’s compute intensive. We stream logs and expose [the model] to the web. We help you manage security around that, stuff like that,” he said.

While he acknowledges this is not unlike Amazon SageMaker, the company’s long-term goal is to support all of the major cloud platforms. SageMaker, of course, only works on the Amazon cloud, while Cortex will eventually work on any cloud. In fact, Spillinger says the biggest feature request they’ve gotten to this point is to support Google Cloud. He says that and support for Microsoft Azure are on the road map.

The Cortex founders have been keeping their head above water while they wait for a commercial product with the help of an $888,888 seed round from Engineering Capital in 2018. If you’re wondering about that oddly specific number, it’s partly an inside joke — Spillinger’s birthday is August 8th — and partly a number arrived at to make the valuation work, he said.

For now, the company is offering the open-source tools, and building a community of developers and data scientists. Eventually, it wants to monetize by building a cloud service for companies that don’t want to manage clusters — but that is down the road, Spillinger said.


Source: Tech Crunch

As autonomy stalls, lidar companies learn to adapt

Lidar sensors are likely to be essential to autonomous vehicles, but if there are none of the latter, how can you make money with the former? Among the industry executives I spoke with, the outlook is optimistic as they unhitch their wagons from the sputtering star of self-driving cars. As it turns out, a few years of manic investment does wonders for those who have the wisdom to apply it properly.

The show floor at CES 2020 was packed with lidar companies exhibiting in larger spaces, seemingly in greater numbers than before. That seemed at odds with reports that 2019 had been a sort of correction year for the industry, so I met with executives and knowledgeable types at several companies to hear their take on the sector’s transformation over the last couple of years.

As context, 2017 was perhaps peak lidar, nearing the end of several years of nearly feverish investment in a variety of companies. It was less a gold rush than a speculative land rush: autonomous vehicles were purportedly right around the corner and each would need a lidar unit… or five. The race to invest in a winner was on, leading to an explosion of companies claiming ascendancy over their rivals.

Unfortunately, as many will recall, autonomous cars seem to be no closer today than they were then, as the true difficulty of the task dawned on those undertaking it.


Source: Tech Crunch

NBC partners with Snapchat on four daily shows for 2020 Tokyo Olympics

Snapchat and NBC Olympics are again teaming up to produce customized Olympics content for users in the U.S. — this time, for the 2020 Tokyo Olympics this summer. The companies had previously worked together during the Rio 2016 and PyeongChang 2018 Olympics. The PyeongChang Olympic Winter Games in 2018 reached over 40 million U.S. users, up 25% from the 2016 Rio Olympics.

In addition, 95% of those users were under the age of 35.

This younger demographic is getting harder to reach in the cord-cutting era, as many people forgo pay-TV subscriptions and traditional broadcast networks in favor of on-demand streaming services, like Netflix. That limits the reach of advertisers, impacting NBC’s bottom line.

The Snap partnership helps to fix that, as it offers NBC Olympics a way to sell to advertisers who want to reach younger fans who don’t watch as much — or any — TV. Snapchat today reaches 90% of all 13 to 24-year-olds in the U.S., and 75% of all 13 to 34-year-olds; 210 million people now use Snapchat daily.

NBC Olympics says it’s the exclusive seller of all the new customized content associated with the Games, working in partnership with Snap.

This year, it’s also putting out more content than before.

The company plans to release more than 70 episodes across four daily Snapchat shows leading up to and during the Games. That’s triple the number of episodes it offered in 2018.

For the first time, it’s creating two daily Highlight Shows for Snapchat, which will be updated in near real-time. The shows will include the must-see moments from the day in Tokyo.

In addition, two unscripted shows will air during the Games, each with two episodes per day. One, “Chasing Gold,” which first debuted during PyeongChang 2018, will follow the journeys of Team USA athletes. The second show is new this year, and will be a daily recap of the most memorable moments curated especially for Snapchat users. Both are being produced by The NBCUniversal Digital Lab.

The deal will also see Snap curating daily Our Stories during the Games, as it has done in previous years. The stories will include photos and videos from fans as well as content from the NBC Olympics.

“We know the audience on Snap loves the Olympic Games,” said Gary Zenkel, president, NBC Olympics, in a statement. “After two successful Olympics together, we’re excited to take the partnership to another level and produce even more content and coverage from the Tokyo Olympics tailored for Snapchatters, which also will directly benefit the many NBC Olympics advertisers who seek to engage further with this young and active demographic.”

Snapchat isn’t the only digital destination for Olympics content, however. NBC and Twitter teamed up to stream limited live event coverage, highlights and a daily Olympics show from the Tokyo Games. It was unclear at the time the deal was announced if NBC had opted for Twitter over Snapchat. Now we know that’s not the case — in fact, Snap’s deal with NBC is even bigger than before.

NBCU said earlier it expected to exceed $1.2 billion in ad sales for the 2020 Games, which are also presented on NBC, NBCSN, Olympic Channel: Home of Team USA and NBC Sports’ digital platforms.


Source: Tech Crunch

IBM snaps out of revenue doldrums, breaking a five-quarter losing streak in Q4

International Business Machines is living a case study of a large, established company vying to transform. Over the last decade, the technology elder has struggled to move into areas like cloud and AI. IBM has leaned on a combination of its own R&D abilities and deep pockets to push into modern markets, but has struggled to turn them into revenue growth.

At one point, Big Blue posted 22 sequential quarters of falling revenue, a mind-boggling testament to how hard it can be to turn around a juggernaut. More recently, IBM shrank for another five consecutive quarters, a streak it broke with yesterday’s news that it had beat analyst expectations. 

The quarter brought modest, but welcome revenue growth. Perhaps more importantly, the company’s top line expansion was co-led by the old IBM mainframe business and its newest champion, Red Hat.

IBM can be happy for the positive financial news, for now at least, but it needs to repeat the result. The challenge it faces moving forward will include finding a way to continue revenue growth while modernizing its product line and ensuring that its huge Red Hat purchase continues to perform.


Source: Tech Crunch

Unito raises $10.5M to help workplace collaboration tools speak to each other

Startup productivity tools have never been better, but that’s led to employees being more passionate than ever about the tools that they want to use themselves. PMs don’t want to use Jira, engineers don’t want to mess with Trello and keeping everyone happy can mean replicating processes again and again.

Montreal-based Unito is building software that helps these platforms communicate with each other so teams can keep their favorite tools without bringing the company to a crawl. The startup has just closed a $10.5 million Series A round led by Bessemer Venture Partners with participation from existing investors Mistral Venture Partners, Real Ventures, and Tom Williams.

Unito’s tool works by collaborating among most of the major workplace productivity software suites’ APIs and automatically translating an action in one piece of software to the others. Updates, comments and due dates can then sync across each of the apps, allowing employees to only interact with the software that’s best for their job.

For Unito, the challenge is convincing startups that are paying for more subscription tools than ever that they need another tool to make sense of what they already have. Unito CEO Marc Boscher tells TechCrunch that company leaders are already having to deal with impassioned pleas for adopting or abandoning certain tools, something that his product can alleviate.

“Every company’s got a debate about which tools to use to get their work done and track their work, and it’s never the same so someone has to lose out eventually,” Boscher says. “People are becoming really passionate about their tools whether they love them or hate them.”

Venture capitalists have been increasingly pouring money into SaaS products built for specific workflows. For employees that have long had to deal with software built for someone else’s role, the proliferation of more team-specific has been welcome, but the ease of use comes with the danger that data or updates can get siloed.

Bessemer partner Jeremy Levine led this deal, saying that the firm was attracted to Unito after seeing how the product allowed teams to choose their own tools, something that was becoming more critical amid the proliferation of vertical-specific SaaS products. Levine’s other early stage bets include Shopify, Yelp and LinkedIn.

Unito’s current integrations include tools like Jira, Asana, Trello, GitHub, Basecamp, Wrike, ZenDesk, Bitbucket, GitLab and HubSpot.


Source: Tech Crunch

Disney sells mobile game studio FoxNet Games to Scopely

Disney announced today it has sold the game studio FoxNet Games Los Angeles, the makers of “MARVEL Strike Force” and other titles, as well as Cold Iron Studios in San Jose, to the interactive entertainment and mobile game company, Scopely. The studios were acquired by Disney in 2019 as a part of its $71.3 billion deal for 21st Century Fox. Disney is not, however, divesting of Fox’s full gaming lineup. The company clarified that its separate portfolio of Fox IP licensed game titles were not a part of this deal and will continue to be a part of Disney’s licensed games business.

Aquisition terms were not disclosed.

FoxNet Games released its first title, “MARVEL Strike Force” in March 2018 and it brought in $150 million in its first year across iOS and Android. Another FoxNet title “Storyscape,” released in early 2019, offers choose-your-own-adventure tales taking place in the world of “The X-Files” or “Titanic.” More recently, the studio soft-launched “Avatar: Pandora Rising,” a massive real-time strategy and social game set in Pandora from the movie “Avatar.”

According to data from Sensor Tower “MARVEL Strike Force” has been downloaded over 26 million times to date. “Storyscape” has topped 1.7 million installs. The Avatar title isn’t broadly available, as it’s still in development. It only has 100,000 downloads at present.

FoxNet’s website also notes a game based on the movie franchise “Alien,” is coming soon. (This was acquired with FoxNet’s own deal for Cold Iron Studios back in 2018.)

“We have been hugely impressed with the incredible game the team at FoxNext Games has built with MARVEL Strike Force and can’t wait to see what more we can do together,” said Tim O’Brien, Chief Revenue Officer at Scopely, in a statement about the deal. “In addition to successfully growing our existing business, we have been bullish on further expanding our portfolio through M&A, and FoxNext Games’ player-first product approach aligns perfectly with our focus on delivering unforgettable game experiences. We are thrilled to combine forces with their world-class team and look forward to a big future together,” he added.

Scopely, which hit over a billion in lifetime revenue in summer 2019, had also acquired DIGIT Game Studios last year, home to the top-grossing MMO/strategy game “Star Trek Fleet Command” and strategy MMO “Kings of the Realm.”

Other Scopely top game titles include “Looney Tunes World of Mayhem,” “The Walking Dead: Road to Survival,” “Wheel of Fortune: Free Play,” “WWE Champions 2019,” “Yahtzee with Buddies Dice Game,” “Dice with ellen,” “Scrabble Go,” and many more.

With its latest acquisition, Scopely adds another top-grossing game to its lineup, expands its in-development pipeline, and gains the expertise of FoxNet team. When the transaction completes, FoxNet Games President Aaron Loeb will join Scopely in a newly created executive role and FoxNet Games SVP & GM Amir Rahimi will lead the FoxNext Games Los Angeles studio within Scopely as President, Games.


Source: Tech Crunch