Samsara banks $100M at a $3.6B valuation for its internet-connected sensors

Sensor data platform Samsara confirmed this morning that it had closed a new round of funding from existing investors Andreessen Horowitz and General Catalyst that values the startup at $3.6 billion.

The news was first reported by Cheddar, which spotted a filing with the state of Delaware on December 21 disclosing Samsara’s intent to raise a $100 million round at more than double the valuation it garnered upon its $50 million Series D this March.

“Our growth comes from bringing transformational new technologies to solve the problems of operational businesses, a massive segment of the economy that has long been underserved by the technology industry,” wrote Kiren Sekar, Samsara’s vice president of marketing and products, in the funding announcement. “Today, the advent of inexpensive sensors, high-bandwidth wireless connectivity, smartphones, and cloud computing enable these businesses to fully reap the benefits of 21st century technology.”

Founded in 2015, Samsara supports the transportation, logistics, construction, food production, energy and manufacturing industries with its internet-connected sensor systems, which helps businesses collect data and derive insights to improve the efficiency of physical operations.

The company’s co-founders are Sanjit Biswas and John Bicket, who previously launched Meraki, an enterprise Wi-Fi startup acquired by Cisco in an all-cash $1.2 billion deal in 2012.

Samsara’s latest financing brings the company’s total raised to $230 million. According to PitchBook, Andreessen Howoritz and General Catalyst are the only two private investors in the company, with Marc Andreessen and Hemant Taneja of General Catalyst representing the venture capital firms as lead investors on several Samsara deals.

San Francisco-based Samsara says revenue grew 250 percent in 2018 as its customer base swelled to 5,000. As for how it will deploy the new capital, the company plans to hire 1,000 employees, double down on AI and computer vision technology and open its first East Coast office in Atlanta.

The startup has yet to spend a dime of its last financing round, evidence it, like many other venture-funded startups, is probably pulling in capital before a market downturn strikes the industry and makes it increasingly difficult to raise hefty sums at impressive valuations.

“While the company already had a healthy balance sheet – we hadn’t dipped into our previous round of funding – the new capital enables us to accelerate long-term product investments and expand into new markets while continuing to maintain a strong balance sheet over the long term,” wrote Sekar.

Amid plummeting stocks and political uncertainty, VCs urge their portfolios to prepare for winter

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Private equity buyouts have become viable exit options — even for early-stage startups

Ajay Chopra Contributor

Ajay Chopra co-founded Pinnacle Systems in his living room and grew it to a multi-billion dollar public company before becoming a venture capitalist with Trinity Ventures.

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About 13 years ago I faced an excruciating decision: whether to sell my company, Pinnacle Systems, to a private equity firm or to another large public company. I felt that both suitors would treat my employees well (and I negotiated hard to make sure that was the case), and both offered a good asking price well above our value on NASDAQ.

After raising what at the time felt like my first child, born in my living room and nurtured into a publicly traded entity, I was ready for it to take its next step and for me to take mine. I ultimately opted for the strategic sale, but I left the process intrigued by what was already an evolving dynamic between private equity firms and tech exits.

In years past, stigma often accompanied private equity sales. I know I felt that way, even under strong deal terms. Plus, private equity exits were only available to companies generating substantial annual revenues and often profits, making this exit option inaccessible for many startups. Today, private equity buyout firms can provide a solid (and on occasion excellent) exit route — as well as an increasingly common one, accounting for 18.5 percent of VC-backed exits in 2017.

Private equity firms are investing in a broad array of technology companies, including highly valued unicorns, but also early- to mid-stage profitable and unprofitable companies that a few years ago would have been unable to secure interest from these buyout firms.

In addition, the lines between venture capital and private equity are increasingly blurring, with more private equity investments in tech, and several-late stage VC firms creating large, billion-dollar plus late-stage growth funds. Further blurring the lines, some of the late-stage VC firms are taking controlling interests in startups, a strategy typically associated with private equity. Recently, one of our portfolio companies received an investment from a late-stage VC firm that acquired a majority stake by providing liquidity to some existing shareholders and investing in the company, utilizing a strategy typically associated with PE buyout firms.

The rise of private equity buyouts within the tech sector presents a viable exit option for founders, given the reality that most startups won’t ultimately IPO. (According to PitchBook, only 3 percent of venture-backed companies in the last decade eventually went public.)

If an IPO is not a realistic long-term option, the remaining primary exit option has typically been a sale to another company (a strategic buyer, in venture parlance). However, in the past few years, private equity firms have become aggressive buyers of private companies, sometimes bidding as high as or higher than strategic buyers. With one of my portfolio companies, a private equity buyer placed the second highest bid ahead of all but one strategic buyer and helped raise the final price from the strategic buyer just by being in the bidding process.

Founders who find themselves in negotiations with strategic buyers should also reach out to PE firms to optimize the outcome. Silver Lake, Francisco Partners, Thoma Bravo and Vista are a few technology-focused PE firms, and PitchBook’s annual liquidity report lists other firms. Vista has been especially active, acquiring many technology companies, including Infoblox, Lithium and Marketo. Not all PE firms are the same, just like not all VCs and strategic buyers are the same.

Years ago, when private equity buyouts were typically only large deals, new management teams were almost always brought in to tweak the edges of already successful companies. Today, each private equity firm has its own strategy — some only buy large profitable companies, others focus on mid-size acquisitions and some only buy early-stage (typically unprofitable) companies, which brings us to the next point.

Even early-stage startups can explore a PE exit, especially if things are not going well

While most readers are familiar with private equity buyers at later stages, what’s new is the emergence of PE activity at early stages. These firms acquire majority stakes in startups that have only raised early-stage investments but are having trouble scaling or raising the next round.

After a buyout, these private equity firms typically provide value by adding the missing elements, such as marketing or sales know-how, in order to kick-start the business and achieve scale. Their goal is to increase the value of the underlying asset by augmenting founder teams with the buyout firm’s own operational experts, sometimes combining newly acquired assets with already existing assets to create a stronger whole, or doubling-down on promising products (while shedding less promising offerings) to unlock potential.

Typically, these PE firms then sell the company to another company (usually a strategic buyer) for greater value. In some cases, these early-stage PE firms sell to another PE buyout firm further up market. In some of these acquisitions, founders can maintain minority ownership in the company (though not a controlling stake), which they can carry through to their “next exit.”

Unlike PE buyouts at later stages, PE buyouts at the earlier stages are not usually high-value exits; they are mostly an avenue to provide the founders some return for their hard work, rather than the disappointing returns they can expect from an acqui-hire or, even worse, a shutdown. If negotiated correctly, a private equity deal can give founders an opportunity to play another hand to the next exit.

Few founders create companies in order to flip them. Strong entrepreneurs create companies to transform their missions into reality and positively impact the world. Steve Jobs said, “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” An acquisition — particularly to private equity — may not have been the original goal, but it may fuel the continued pursuit of the founder’s mission. Or, perhaps it will enable the pursuit of a new and worthy mission.

https://tcrn.ch/2GGEQWg Private equity buyouts have become viable exit options — even for early-stage startups https://tcrn.ch/2LCv72a

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911 emergency services go down across the US after CenturyLink outage

{rss:content:encoded} 911 emergency services go down across the US after CenturyLink outage https://tcrn.ch/2LFlQ9k http://bit.ly/2So594R December 28, 2018 at 05:19PM

911 emergency services in several states across the U.S. remain down after a massive outage at a CenturyLink datacenter.

The outage began after 12pm ET on Thursday, according to CenturyLink’s status page, and continues to cause disruption across 911 call centers. Some states have seen their services restored. CenturyLink has not said what caused the outage beyond an issue with a “network element,” but said in its latest update — around 11am ET on Friday — that the company said that it was “seeing good progress, but our service restoration work is not complete.”

In a tweet, CenturyLink added that it was “working tirelessly” until it gets its affected systems back up and running.

CenturyLink, one of the largest telecommunications providers in the U.S., provides internet and phone backbone services to major cell carriers, including AT&T and Verizon. Datacenter or fiber issues can have a knock-on effect to other companies, cutting out service and causing cell site blackouts.

In this case, the outage affected only cellular calls to 911, and not landline calls.

Some residents of affected areas were sent emergency warnings to their cell phones, warning of the outage.

Who is #CRESA and what does this mean? How is 911 down. I don’t need to call but this is alarming pic.twitter.com/MB7f6iZTnn

— its_lady_kc (@its_lady_kc) December 28, 2018

Among the areas affected include Seattle, Washington and Salt Lake City, Utah. Several other states, including Idaho, Oregon, Arizona and Missouri, are also affected, local news has reported.

Many other police departments tweeted out alternative numbers for 911 in the event of an emergency.

Police in Boston, Massachusetts tweeted that their service was restored this morning.

UPDATE: Technical issues with the 911 system, and the resulting wireless capability outages, have been resolved. Massachusetts callers may resume using 911 from their cell phones for public safety emergencies. https://t.co/6AAeRdVxeN

— Mass State Police (@MassStatePolice) December 28, 2018

Ajit Pai, chairman of the Federal Communications Commission, which regulates and monitors 911 services, said the commission is investigating the outage.

“When an emergency strikes, it’s critical that Americans are able to use 911 to reach those who can help,” said Pai in a statement. “The CenturyLink service outage is therefore completely unacceptable, and its breadth and duration are particularly troubling.”

“I’ve directed the Public Safety and Homeland Security Bureau to immediately launch an investigation into the cause and impact of this outage. This inquiry will include an examination of the effect that CenturyLink’s outage appears to have had on other providers’ 911 services,” he said.

TechCrunch will have more when it comes in.

Senate wants emergency alerts to go out through Netflix, Spotify, etc.

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Indonesia unblocks Tumblr following its ban on adult content

Indonesia, the world’s fourth largest country by population, has unblocked Tumblr nine months after it blocked the social networking site over pornographic content.

Tumblr — which, disclaimer, is owned by Oath Verizon Media Group just like TechCrunch — announced earlier this month that it would remove all “adult content” from its platform. That decision, which angered many in the adult entertainment industry who valued the platform as an increasingly rare outlet that supported erotica, was a response to Apple removing Tumblr’s app from the iOS Store after child pornography was found within the service.

The impact of this new policy has made its way to Indonesia, where KrAsia reports that the service was unblocked earlier this week. The service had been blocked in March after falling foul of the country’s anti-pornography laws.

“Tumblr sent an official statement regarding the commitment to clean the platform from pornographic content,” Ferdinandus Setu, acting head of the Ministry of Communication and Informatics Bureau, is reported to have said in a press statement.

Messaging apps WhatsApp and Line are among the other services that have been forced to comply with the government’s ban on “unsuitable” content in order to keep their services open in the country. Telegram, meanwhile, removed suspected terrorist content last year after its service was partially blocked.

While perhaps not widely acknowledged in the West, Indonesia is a huge market, with a population of more than 260 million people. The world’s largest Muslim country, it is the largest economy in Southeast Asia and its growth is tipped to help triple the region’s digital economy to $240 billion by 2025.

In other words, Indonesia is a huge market for internet companies.

The country’s anti-porn laws have been used to block as many as 800,000 websites as of 2017 — so potentially over a million by now — but they have also been used to take aim at gay dating apps, some of which have been removed from the Google Play Store. As Vice notes, “while homosexuality is not illegal in Indonesia, it’s no secret that the country has become a hostile place for the LGBTQ community.”

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Venture capital, global expansion, blockchain and drones characterize African tech in 2018

Jake Bright Contributor

Jake Bright is a writer and author in New York City. He is co-author of The Next Africa.

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2018 saw Africa’s tech sector become more dynamic and international. VC firms on the continent multiplied. There were numerous investment rounds. And startups pursued acquisitions and global expansion. Here’s a snapshot of the news that shaped African tech over the last year.  

Surge in VC funds

A notable 2018 trend was Africa’s VC landscape becoming more African, with an increasing number of investment funds headquartered on the continent and run by locals, according to Crunchbase data released in this TechCrunch exclusive.

Drawing on its database and primary source research, Crunchbase identified 51 viable Africa-focused VC funds globally with at least 7-10 investments in African startups from seed to series stage.

Of the 51 funds, 22 (or 43 percent) were headquartered in Africa and managed by Africans. Of those 22, nine (or 41 percent) were formed since 2016 and nine were Nigerian.

Four of the nine Nigeria-based funds were formed within the last year: Microtraction, Neon Ventures, Beta.Ventures and CcHub’s Growth Capital fund.

The Crunchbase study also tracked more Africans in top positions at outside funds and the rise of homegrown corporate venture arms.

One of those entities with a corporate venture arm, Naspers, announced a $100 million fund named Naspers Foundry to invest in South African tech startups. This was part of a $300 million (4.6 billion Rand) commitment by the South African media and investment company to support South Africa’s tech sector overall, as reported here at TechCrunch.

Another DFI came on the scene when France announced a $76 million African startup fund administered by the French Development Agency, AFD. TechCrunch got the skinny on how it will work here.

Investment and expansion

If African VC investment headlines were scarce a decade ago, in 2018 we became overwhelmed with them. This was largely a result of several recently closed Africa funds — TLcom’s $40 million, Partech’s $70 million, TPG’s 2 billion — beginning to deploy that capital.

In March, Nigerian consumer data analytics firm Terragon raised $5 million from TLcom. Kenyan business enterprise software company Africa’s Talking raised $8.6 million in a round led by IFC.

Investment startup Piggybank.ng closed $1.1 million in seed funding and announced a new product — Smart Target, for traditional savings groups. Trucking Logistics company Kobo360 raised two rounds, for a total of $7.2 million. Kenya-based agtech supply chain startup Twiga Foods raised $10 million. B2B retail supply chain Sokowatch closed a $2 million seed round led by 4DX ventures.

White-label lending startup Mines.io secured a $13 million Series A round. South African SME payment venture Yoco raised $16 million. Paga Payments added $10 million in fresh funding.

And then there were the three huge raises of the year. Kenyan digital payment company Cellulant hauled in $37.5 million in a Series C round led by TPG Growth. South African lending startup Jumo raised $52 million led by Goldman Sachs. And just this month, The Carlyle Group invested $40 million in Africa-focused online travel site Wakanow.com.  

Acquisitions and expansion

In 2018, African tech demonstrated it can travel, as several digital companies expanded on the continent and abroad. In May, MallforAfrica and DHL launched MarketPlaceAfrica.com, a global e-commerce site for select African artisans to sell wares to buyers in any of DHL’s 220 delivery countries.

Paga announced plans to expand in Africa and internationally, with an eye on Ethiopia, Mexico and the Philippines, CEO Tayo Oviosu told TechCrunch. Kobo360 is moving into in new markets — Ghana, Togo and Cote D’Ivoire.

On the back of its $52 million round, Jumo said it would expand in Asia and started by opening an office in Singapore.

On the acquisition front, Terragon bought Asian mobile marketing company Bizense in a cash and stock deal. The company is exploring greater growth opportunities in Latin America and Southeast Asia, CEO Elo Umeh told TechCrunch.

TPG Growth acquired a majority stake (of an undisclosed value) in Africa entertainment content company TRACE. After previous investments, Naspers acquired  96 percent of Southern African e-commerce venture Takealot.

And in December, California-based Emergent Technology Holdings acquired Ghanaian fintech payment company InterpayAfrica.

Partnerships

Collaboration between local tech firms and big global names continued in 2018. Liquid Telecom and Microsoft continued their partnership to offer connectivity cloud services such as Microsoft’s Azure, Dynamics 365 and Office 365 to select startups and hubs. This is part of Liquid Telecom’s strategy to go long on Africa’s startups as its future clients and the continent’s next big companies.

Facebook teamed up with Nigerian tech hub CcHub to launch its NG_Hub high-tech incubator.

Blockchain

As crypto fever gripped many leading economies in 2018, Africa was shaping its own blockchain narrative — one more grounded in utility than speculation. 500 Startups-backed SureRemit launched a crypto token product aimed at disrupting Africa’s multi-billion-dollar remittance market and raised $7 million in an ICO. South African payments venture Wala and solar energy startup Sun Exchange also had ICOs.

For blockchain as a platform, agtech startups Twiga Foods and Hello Tractor partnered with IBM Research to use the digital ledger tech to advance small-scale farmers and agriculture on the continent.

Ride-hail boda bodas

Ride-hail tech expanded into the continent’s frequently used motorcycle taxi market. Uber entered the three-wheeled tuk tuk moto taxi market in Tanzania in March and Uber and Taxify launched motorcycle passenger services in East Africa, including Kenya and Uganda.

Fails

Last year saw Y Combinator-backed VOD startup Afrostream shutter. In February 2018, Nigerian e-commerce startup Konga — backed by VC — was sold in a distressed acquisition. There were high expectations for Konga and its much-liked founder Sim Shagaya. I made the case that Konga’s acquisition was one of Africa’s first big startup fails that flew under the radar.

Drones

TechCrunch did a deep dive into Africa’s drone scene, talking to several experts and looking at emerging use cases across delivery services, agtech and surveying. On the regulatory side, several countries — Rwanda, Tanzania, South Africa, Zambia and Malawi — are doing some interesting things around regulation and creating drone-testing corridors for global players.

TechCrunch and Africa

In 2018 TechCrunch did more with Africa than any previous year. In addition to more content, there was a market engagement trip to Ghana and Nigeria, with meet-and-greets at Impact Hub, MEST Accra and Lagos, and CcHub.

TechCrunch also had its first Africa panel on Disrupt SF’s main stage, an Africa session at Disrupt Berlin and held the second Startup Battlefield Africa in December in Nigeria.

Fifteen startups competed in Lagos in front of a Pan-African and global crowd. South African virtual banking startup Bettr was runner-up. Ultra-affordable ultrasound startup M-Scan from Uganda was the winner.

More Africa-related stories @TechCrunch

• Netflix rival Iflix offloads its Africa business to focus on Asia
• SimbaPay launches Kenya to China payment service over WeChat

African tech around the ‘net  

• Africa Tech Ventures closes $7.5M from AfDB for seed-stage investments
• Six African startups selected for GSMA Ecosystem Accelerator Innovation Fund

https://tcrn.ch/2EPkfMY Venture capital, global expansion, blockchain and drones characterize African tech in 2018 https://tcrn.ch/2GJfEyz

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Why your startup shouldn’t rush to $1 million in revenue

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People lost their damn minds when Instagram accidentally went horizontal

Earlier today, when Instagram suddenly transformed into a landscape oriented Tinder-esque nightmare, the app’s dedicated users extremely lost their minds and immediately took to Twitter to be vocal about it.

As we reported, the company admitted that the abrupt shift from Instagram’s well-established vertical scrolling was a mistake. The mea culpa came quickly enough, but Instagram’s accidental update was already solidified as one of the last meme-able moments of 2018.

That was supposed to be a very small test that went broad by accident. Should be fixed now. If you're still seeing it simply restart the app. Happy holidays!

— Adam Mosseri (@mosseri) December 27, 2018

Why learn about the thing itself and why it happened when you could watch the meta-story play out in frantic, quippy tweets, all vying for relevance as we slide toward 2019’s horrific gaping maw? If you missed it the first time around, here you go.

us: pls chronological timelines
insta: what? insta stories?
us: nonono chronological timelines
insta: did you mean IGTV
us: NO CHRONOLOGICAL TIMELINES
insta: ohhhh you want to scroll horizontally #instagramupdate

— 𝓪, 𝓶, 𝓪, 𝓻, 𝓲, 𝓼 (@triviastigma) December 27, 2018

Instagram literally went “felt cute but might delete later” #instagramupdate

— Basma (@basmahxmde) December 27, 2018

@ instagram during those 0.2 seconds of the horizontal feed pic.twitter.com/ZyfKIHsOGI

— alex (@alexojovel) December 27, 2018

*New Instagram updates*

everyone: pic.twitter.com/OiinUERwEa

— Complex (@Complex) December 27, 2018

These Instagram updates are weird. I think Instagram wants us to leave. Like when a guy goes “you’re just to good for me.” We should listen.

— Quinta. (@quintabrunson) December 27, 2018

A handful of memes even managed to incorporate another late-2018 meme, Sandra Bullock in Bird Box — a Netflix original that is not a birds-on-demand service, we are told.

Everyone: we hate the new Instagram update

Instagram: pic.twitter.com/5crPlrNlOl

— Jeyson Paez (@jeysonpaez) December 27, 2018

You know how in apocalypse movies where a part of the population starts freaking out because they’re infected by something unfamiliar and start rampaging? I felt like I was in one when I woke up to people losing their minds over the Instagram update. I’ve already locked my doors.

— Eugene Lee Yang (@EugeneLeeYang) December 27, 2018

Unupdate might not be a word, but it is absolutely a state of mind.

*Everyone when they saw the new update* #instagramupdate pic.twitter.com/MvYtYejnXw

— Skyleigh Tweedy (@SkyleighTweedy) December 27, 2018

instagram when they saw the update wasn’t a hit:
when they quickly remove it:#instagramupdate pic.twitter.com/UHqrOxphRb

— 𝔏𝔲𝔫𝔞 (@localsatanicboy) December 27, 2018

For better or worse, the Met got involved with what we can only assume is a Very Important Artifact for the cause.

When you hear #Instagram might update its format so you hold on tighter to your vertical scroll…

: Marble hand holding a scroll, Roman, 1st or 2nd century A.D. https://t.co/k0TgNTaeiS pic.twitter.com/cuxwORgWnT

— The Met (@metmuseum) December 27, 2018

When Instagram releases an update and within 15 minutes everybody hates it #InstagramUpdate pic.twitter.com/2l0wBZwU78

— Meg Warpus (@MegWarpus) December 27, 2018

Due to a bug, some users saw a change to the way their feed appears today. We quickly fixed the issue and feed is back to normal. We apologize for any confusion.

— Instagram (@instagram) December 27, 2018

But can we ever really go back? Can we unsee a fate so great, one still looming on some distant social influencer shore? Probably yeah, but that doesn’t mean we won’t all lose it if it happens again.

from Social – TechCrunch http://bit.ly/2AiBC5z People lost their damn minds when Instagram accidentally went horizontal Taylor Hatmaker https://tcrn.ch/2VciIGm
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TrueFacet, which sells pre-owned, authenticated watches and jewelry, is raising a $10 million round of funding

The secondary luxury goods market has been growing wildly in recent years, with more shoppers opting to both sell their lightly used luxury goods like clothing and jewelry for cold, hard cash, as well as buying the pre-owned, authenticated luxury goods of others.

One of the biggest beneficiaries of the trend is The RealReal, a nearly eight-year-old shopping destination for the growing population of people who might not be willing or able to purchase a new Hermes Birkin bag but are willing to buy one in like-new condition for considerably less. The idea — which seems to be working — is to create a virtuous cycle, wherein the bag’s original purchaser receives the bulk of that re-sale price, then uses the money to buy another new handbag (or a used one) that can be resold at a later point in time.

Another beneficiary of the trend: TrueFacet, a five-year-old, New York-based marketplace that claims to have more than 40,000 watches and 55,000 pieces of pre-owned authenticated watches and jewelry for sale at its site, and that has more recently begun offering pre-owned timepieces directly through brands like Fendi Timepieces, Raymond Weil and Roberto Coin that now partner with TrueFacet to carry their pre-owned timepieces with a manufacture warranty.

Apparently, shoppers are buying what they’re collectively selling. The company, which had previously raised $14.7 million in funding from investors, looks to be closing in on another $10 million round, judging by freshly filed SEC paperwork that shows it has so far raised $7 million in funding and is targeting $9.8 million altogether.

TrueFacet’s backers include Founders Co-op,  Freestyle Capital and Maveron, led by partner Jason Stoffer, who also happens to sit on the board of Dolls Kill, an edgy clothing marketplace that we wrote about on Monday.

TrueFacet has some tough competition in the space, including Crown & Caliber, a six-year-old, Atlanta, Ga.-based company that has never announced outside funding, and 15-year-old, Germany-based Chrono24, which has raised €21 million over the years. Both sell timepieces alone, however.

It also competes directly with The RealReal, which has raised nearly $300 million from investors and sells clothing and high-end home decor, as well as jewelry and watches. (The company doesn’t break out publicly which of these categories outpace the others in terms of sales.)

Interestingly, like The RealReal, which now operates permanent offline stores in both New York and L.A., TrueFacet is also crossing the chasm into the offline world, though it’s taking baby steps toward that end.

Specifically, earlier this month, it announced a partnership with Stephen Silver Fine Jewelry, which sells timepieces to many monied Bay Area VCs and other Silicon Valley bigs at stores in Redwood City and Menlo Park, Calif. For the time being at least, the jeweler will also sell pieces from TrueFacet’s collection.

https://ift.tt/eA8V8J TrueFacet, which sells pre-owned, authenticated watches and jewelry, is raising a $10 million round of funding https://tcrn.ch/2ENtCwF

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Grove Collaborative, a subscription startup selling ‘household essentials,’ has been quietly raising a lot of moolah

Grove Collaborative, a four-year-old, San Francisco-based startup that sells household, personal care, baby, children’s and pet products, has been busy raising money in 2018, shows two new SEC filings that lists representatives from the company’s earlier investors, including Mayfield, Norwest Venture Partners and MHS Capital, as well as apparent new investor General Atlantic, represented by partner Catherine Beaudoin.

One of the filings shows that Grove Collaborative, which had already raised roughly $62 million as of the start of 2018, subsequently raised $27.4 million more this year. A separate, second filing shows another $76.4 million has been secured in what looks to be a newer round that’s targeting $125 million. It’s a lot of money for such a young company, which suggests it has found traction with a growing customer base.

We’ve reached out to Grove Collaborative and are waiting to learn more.

As we reported back in January, co-founder Stuart Landesberg started the company after working with retail brands during two years as an associate with TPG Capital, which focuses on growth equity and middle-market private equity transactions. With shelf space limited for brands in brick-and-mortar stores, he saw an opportunity for a startup that prompts consumers to buy the kinds of items they buy over and over again just as they are running out of them: think dish soap, pet food, deodorant, vitamins and sunscreen.

Amazon, of course, similarly prompts its customers to buy such items, but Grove Collaborative is marketing to a slightly narrower demographic, that of people who want only all-natural products. In fact, along with the brands that it make it easier for its customers to find — think Method and Mrs. Meyers — the company began selling its own all-natural products this year. Among the many dozens of offerings it now retails under the Grove Collaborative label: a coconut body lotion, a foaming hand soap, coffee filters, soy candles and lip balm.

The move puts the startup in more direct competition with other e-commerce companies, like the consumer goods company Honest Company, which similarly sells natural products for the home and personal care, though many of its products are now sold on shelves in big retail stores like Target.

Grove Collaborative also looks to be competing more directly now with well-funded Brandless, which raised $240 million from SoftBank’s Vision Fund in summer at a valuation of slightly more than $500 million. Brandless also sells its own all-natural household and personal care products, though, unlike Grove Collaborative, it also focuses on food and, unlike Grove, it offers a subscription service, yet does not revolve around one. Grove is exclusively selling an auto-shipment service.

Grove had previously raised two separate rounds of funding in quick succession: a $15 million Series B round it closed in March of 2017, following by a $35 million Series C round it announced in January of this year.

Given that Landesberg was formerly an investor himself, he may well have realized — as have many founders — that raising money next year may be far harder in 2019 than it has been this year. As the CEO of Zymergen, whose giant funding round we recently featured, told Bloomberg last week: “We wanted to have some fat on our bones for sure . . . The time to raise money is when people are giving it to you.”

https://ift.tt/eA8V8J Grove Collaborative, a subscription startup selling ‘household essentials,’ has been quietly raising a lot of moolah https://tcrn.ch/2QPNYwx

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Cap table management tool Carta valued at $800M with new funding

Startups supporting startups are blazing a new trail with support from venture capitalists.

Co-working spaces like The Wing and The Riveter raked in funding rounds this year, as did Brex, the provider of a corporate card built specifically for startups. Now Carta, which helps companies manage their cap tables, valuations, portfolio investments and equity plans, has announced an $80 million Series D at a valuation of $800 million. The company, formerly known as eShares, raised the capital from lead investors Meritech and Tribe Capital, with support from existing investors.

The round brings Carta’s total funding to $147.8 million. Its existing investors include Spark Capital, Menlo Ventures, Union Square Ventures and Social Capital, though the latter didn’t participate in the Series D funding. Tribe Capital, however, is a new venture capital firm launched by Arjun Sethi, who previously led Social Capital’s investment in Carta, Jonathan Hsu and Ted Maidenberg, a trio of former Social Capital partners who exited the VC firm amid its transition from a traditional VC fund to a technology holding company. Tribe is said to be in the process of raising its own $200 million debut fund.

Founded in 2012 by Henry Ward (pictured), the Palo Alto-based company plans to use the latest investment to develop their transfer agent and equity administration products and services to better support startups transitioning into public companies. It also will launch additional products for investors to collect data from their portfolio companies and to manage their back office.

“We’ve come this far by changing how ownership management works for private companies—popularizing electronic securities and cap table software, combined with audit-ready 409As,” Ward wrote in an announcement. “But our ambitions go far beyond supporting privately-held, venture-backed companies.”

Carta, which counts Robinhood, Slack, Wealthfront, Squarespace, Coinbase and more as customers, currently manages $500 billion in equity. This year, Carta expanded its headcount from 310 employees to 450 employees, launched board management and portfolio insights products and completed a study in partnership with #Angels that highlighted the major equity gap female startup employees are victim to.

The study, released in September, revealed that women own just 9 percent of founder and employee startup equity, despite making up 35 percent of startup equity-holding employees. On top of that, women account for 13 percent of startup founders, but just 6 percent of founder equity — or $0.39 on the dollar.

The Gap Table: Women own just 9% of startup equity

https://ift.tt/eA8V8J Cap table management tool Carta valued at $800M with new funding https://tcrn.ch/2ENSFja

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Instagram accidentally rolled out tap-to-advance feed, removes it

Instagram confirms that a bug this morning mistakenly rolled out a massive change to its feed that replaced the traditional scrolling with horizontal tap-to-advance like with Stories. In October, TechCrunch reported Instagram was testing tap-to-advance for browsing through Explore posts. But many users woke up to a shock this morning when their familiar vertical swipe stopped advancing the main feed. Many users immediately complained that the gesture felt awkward and annoying.

“Due to a bug, some users saw a change to the way their feed appears today. We quickly fixed the issue and feed is back to normal. We apologize for any confusion” an Instagram spokesperson tells TechCrunch. The company confirms it’s still testing the navigation style in Explore.

Instagram was attempting to test the feature with a small percentage of users, but the bug caused a much broader rollout to a few orders of magnitude more people than planned, according to head of Instagram Adam Mosseri. Users can restart their Instagram and the change should disappear.

Sorry about that, this was supposed to be a very small test but we went broader than we anticipated.

— Adam Mosseri (@mosseri) December 27, 2018

Tap-to-advance makes it easier to move between posts with them staying fully in view, compared to scrolling where it can take some adjustment to make sure the top or bottom of a post isn’t cut off. But scrolling revealed the author of a post first, then the content, then the caption, which is a sensible and intuitive way to browse. Tap-to-advance could send users’ eyes flitting around the screen in an exhausting manner. But most importantly, people have spent eight years growing accustomed to scrolling the Instagram feed. Suddenly breaking that behavior pattern was sure to piss people off.

It’s possible that Instagram could still bring tap-to-advance to the main feed in the future. But given how angry the responses were, it might now think twice unless the data shows the change makes people spend a lot more time in the app.

Here’s a look at how tap-to-advance in the feed worked, and the alert users got about how it works.

from Social – TechCrunch http://bit.ly/2AiBC5z Instagram accidentally rolled out tap-to-advance feed, removes it Josh Constine https://tcrn.ch/2GDJ0hA
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Instagram accidentally rolled out tap-to-advance feed, removes it

{rss:content:encoded} Instagram accidentally rolled out tap-to-advance feed, removes it https://tcrn.ch/2GDJ0hA http://bit.ly/2AiBC5z December 27, 2018 at 05:07PM

Instagram confirms that a bug this morning mistakenly rolled out a massive change to its feed that replaced the traditional scrolling with horizontal tap-to-advance like with Stories. In October, TechCrunch reported Instagram was testing tap-to-advance for browsing through Explore posts. But many users woke up to a shock this morning when their familiar vertical swipe stopped advancing the main feed. Many users immediately complained that the gesture felt awkward and annoying.

“Due to a bug, some users saw a change to the way their feed appears today. We quickly fixed the issue and feed is back to normal. We apologize for any confusion” an Instagram spokesperson tells TechCrunch. The company confirms it’s still testing the navigation style in Explore.

Instagram was attempting to test the feature with a small percentage of users, but the bug caused a much broader rollout to a few orders of magnitude more people than planned, according to head of Instagram Adam Mosseri. Users can restart their Instagram and the change should disappear.

Sorry about that, this was supposed to be a very small test but we went broader than we anticipated.

— Adam Mosseri (@mosseri) December 27, 2018

Tap-to-advance makes it easier to move between posts with them staying fully in view, compared to scrolling where it can take some adjustment to make sure the top or bottom of a post isn’t cut off. But scrolling revealed the author of a post first, then the content, then the caption, which is a sensible and intuitive way to browse. Tap-to-advance could send users’ eyes flitting around the screen in an exhausting manner. But most importantly, people have spent eight years growing accustomed to scrolling the Instagram feed. Suddenly breaking that behavior pattern was sure to piss people off.

It’s possible that Instagram could still bring tap-to-advance to the main feed in the future. But given how angry the responses were, it might now think twice unless the data shows the change makes people spend a lot more time in the app.

Here’s a look at how tap-to-advance in the feed worked, and the alert users got about how it works.

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Gfycat’s ‘GIFs’ can now keep the sound on

Gfycat, a home for GIF-making tools and an online community, is rolling out a new way to create GIFs — it will now let you keep the sound on. With “Gfycat Sound,” as the feature is called, GIF makers will have the option to retain the audio from the video file they’re using to create their “GIF” — something Gfycat believes will be especially popular among gamers.

The company had already experimented with other types of non-traditional GIFs, like longer GIFs, AR GIFs, HD GIFs and 360 GIFs, for example, in order to evolve the concept of the GIF beyond the classic, grainy loop.

Of course, the resulting GIFs aren’t “.gifs” at this point — they’re short-form videos.

The same holds true for “Gfycat Sound.” But end users don’t necessarily care about the GIFs’ technical underpinnings — they just want to create and share short clips pulled from longer pieces of content.

The company says it decided to roll out support for sound after polling its community for their top feature requests earlier this year. “GIFs with sound” came back as the top demand from users.

To take advantage of the added support, GIF creators will be able to toggle a switch in Gfycat’s upload tool to keep the sound on or remove it before creating their GIF. As before, GIFs can be created using a video file you upload, or through a link you paste from a site like YouTube, Facebook, Twitch or elsewhere. And if users upload a .gif file or a video that doesn’t have sound, the software will detect that on its end.

The GIF editing software lets you select the start and stop times for the GIF and add captions before sharing, as well.

Once the GIF is uploaded to Gfycat’s site, users will be able to view the audio GIFs while browsing by clicking the icon on the top-right of the GIF to turn the sound on. (The site will default to sound off, thankfully – you won’t all of a sudden be bombarded with noise.)

These new “audio GIFs” work on all mobile and desktop browsers at launch, and will come to Gfycat’s iOS and Android apps in 2019, as well as to its API documentation for developers.

“We see our creators using gaming first and foremost for Gfycat Sound, as e-sports has become a global phenomenon,” explains Gfycat CEO Richard Rabbat. “Now, a gamer can share their achievement with the sound of the ‘shot’ that won her or him the game and achieve more virality for their content,” he says. “We also see our sports content benefiting from Gfycat Sound because you can now share the emotions of the audience,” Rabbat added.

via Gfycat

While an actual GIF file cannot have sound, Gfycat is not the first GIF toolmaker that has expanded to include short-form video alongside its traditional collection of .gifs — Imgur did the same back in May. The reasoning in that case was similar — sometimes you need to hear the clip to really enjoy the content. Plus, advertisers love video, too.

Despite their silly nature, GIFs are a big business these days. Google acquired top GIF platform Tenor earlier this year. At the time, the company was seeing more than 12 billion searches per month.

Gfycat in April said it had 180 million monthly active users, and 500 million page views.

from Social – TechCrunch https://tcrn.ch/2ESCCRZ Gfycat’s ‘GIFs’ can now keep the sound on Sarah Perez https://tcrn.ch/2SuKJXS
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The best tech books of 2018

This year has been good for tech titles. Books like Bad Blood and Brotopia brought us some in-depth reporting on crashes and burns while Stephen Hawking brought us his last thoughts. Here are some of our favorite tech titles for 2018.

https://ift.tt/eA8V8J The best tech books of 2018 https://tcrn.ch/2EOWxRX

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Google & Facebook fed ad dollars to child porn discovery apps

{rss:content:encoded} Google & Facebook fed ad dollars to child porn discovery apps https://tcrn.ch/2T8FvB2 https://tcrn.ch/2Sn3M6F December 27, 2018 at 03:46PM

Google has scrambled to remove third-party apps that led users to child porn sharing groups on WhatsApp in the wake of TechCrunch’s report about the problem last week. We contacted Google with the name of one these apps and evidence that it and others offered links to WhatsApp groups for sharing child exploitation imagery. Following publication of our article, Google removed that app and at least five like it from the Google Play store. Several of these apps had over 100,000 downloads, and they’re still functional on devices that already downloaded them.

A screenshot from today of active child exploitation groups on WhatsApp. Phone numbers and photos redacted

WhatsApp failed to adequately police its platform, confirming to TechCrunch that it’s only moderated by its own 300 employees and not Facebook’s 20,000 dedicated security and moderation staffers. It’s clear that scalable and efficient artificial intelligence systems are not up to the task of protecting the 1.5 billion user WhatsApp community, and companies like Facebook must invest more in unscalable human investigators.

But now, new research provided exclusively to TechCrunch by anti-harassment algorithm startup AntiToxin shows that these removed apps that hosted links to child porn sharing rings on WhatsApp were supported with ads run by Google and Facebook’s ad networks. AntiToxin found 6 of these apps ran Google AdMob, 1 ran Google Firebase, 2 ran Facebook Audience Network, and 1 ran StartApp. These ad networks earned a cut of brands’ marketing spend while allowing the apps to monetize and sustain their operations by hosting ads for Amazon, Microsoft, Motorola, Sprint, Sprite, Western Union, Dyson, DJI, Gett, Yandex Music, Q Link Wireless, Tik Tok, and more.

The situation reveals that tech giants aren’t just failing to spot offensive content in their own apps, but also in third-party apps that host their ads and that earn them money. While these apps like “Group Links For Whats” by Lisa Studio let people discover benign links to WhatsApp groups for sharing legal content and discussing topics like business or sports, TechCrunch found they also hosted links with titles such as “child porn only no adv” and “child porn xvideos” that led to WhatsApp groups with names like “Children ” or “videos cp” — a known abbreviation for ‘child pornography’.

WhatsApp has an encrypted child porn problem

In a video provided by AntiToxin seen below, the app “Group Links For Whats by Lisa Studio” that ran Google AdMob is shown displaying an interstitial ad for Q Link Wireless before providing WhatsApp group search results for “child”. A group described as “Child nude FBI POLICE” is surfaced, and when the invite link is clicked, it opens within WhatsApp to a group called “Children ”.  (No illegal imagery is shown in this video or article. TechCrunch has omitted the end of the video that showed a URL for an illegal group and the phone numbers of its members.)

Another video shows the app “Group Link For whatsapp by Video Status Zone” that ran Google AdMob and Facebook Audience Network displaying a link to a WhatsApp group described as “only cp video”. When tapped, the app first surfaces an interstitial ad for Amazon Photos before revealing a button for opening the group within WhatsApp. These videos show how alarmingly easy it was for people to find illegal content sharing groups on WhatsApp, even without WhatsApp’s help.

Zero Tolerance Doesn’t Mean Zero Illegal Content

In response, a Google spokesperson tells me that these group discovery apps violated its content policies and it’s continuing to look for more like them to ban. When they’re identified and removed from Google Play, it also suspends their access to its ad networks. However, it refused to disclose how much money these apps earned and whether it would refund the advertisers. The company provided this statement:

“Google has a zero tolerance approach to child sexual abuse material and we’ve invested in technology, teams and partnerships with groups like the National Center for Missing and Exploited Children, to tackle this issue for more than two decades. If we identify an app promoting this kind of material that our systems haven’t already blocked, we report it to the relevant authorities and remove it from our platform. These policies apply to apps listed in the Play store as well as apps that use Google’s advertising services.”

App	Developer	Ad Network	Estimated Installs	Last Day Ranked
Unlimited Whats Groups Without Limit Group links	Jack Rehan	Google AdMob	200,000	12/18/2018
Unlimited Group Links for Whatsapp	NirmalaAppzTech	Google AdMob	127,000	12/18/2018
Group Invite For Whatsapp	Villainsbrain	Google Firebase	126,000	12/18/2018
Public Group for WhatsApp	Bit-Build	Google AdMob, Facebook Audience Network	86,000	12/18/2018
Group links for Whats – Find Friends for Whats	Lisa Studio	Google AdMob	54,000	12/19/2018
Unlimited Group Links for Whatsapp 2019	Natalie Pack	Google AdMob	3,000	12/20/2018
Group Link For whatsapp	Video Status Zone	Google AdMob, Facebook Audience Network	97,000	11/13/2018
Group Links For Whatsapp – Free Joining	Developers.pk	StartAppSDK	29,000	12/5/2018

Facebook meanwhile blamed Google Play, saying the apps’ eligibility for its Facebook Audience Network ads was tied to their availability on Google Play and that the apps were removed from FAN when booted from the Android app store. The company was more forthcoming, telling TechCrunch it will refund advertisers whose promotions appeared on these abhorrent apps. It’s also pulling Audience Network from all apps that let users discover WhatsApp Groups.

A Facebook spokesperson tells TechCrunch that “Audience Network monetization eligibility is closely tied to app store (in this case Google) review. We removed [Public Group for WhatsApp by Bit-Build] when Google did – it is not currently monetizing on Audience Network. Our policies are on our website and out of abundance of caution we’re ensuring Audience Network does not support any group invite link apps. This app earned very little revenue (less than $500), which we are refunding to all impacted advertisers.”

Facebook also provided this statement about WhatsApp’s stance on illegal imagery sharing groups and third-party apps for finding them:

“WhatsApp does not provide a search function for people or groups – nor does WhatsApp encourage publication of invite links to private groups. WhatsApp regularly engages with Google and Apple to enforce their terms of service on apps that attempt to encourage abuse on WhatsApp. Following the reports earlier this week, WhatsApp asked Google to remove all known group link sharing apps. When apps are removed from Google Play store, they are also removed from Audience Network.”

An app with links for discovering illegal WhatsApp Groups runs an ad for Amazon Photos

Israeli NGOs Netivei Reshet and Screen Savers worked with AntiToxin to provide a report published by TechCrunch about the wide extent of child exploitation imagery they found on WhatsApp. Facebook and WhatsApp are still waiting on the groups to work with Israeli police to provide their full research so WhatsApp can delete illegal groups they discovered and terminate user accounts that joined them.

AntiToxin develops technologies for protecting online networks harassment, bullying, shaming, predatory behavior and sexually explicit activity. It was co-founded by Zohar Levkovitz who sold Amobee to SingTel for $400M, and Ron Porat who was the CEO of ad-blocker Shine. [Disclosure: The company also employs Roi Carthy, who contributed to TechCrunch from 2007 to 2012.] “Online toxicity is at unprecedented levels, at unprecedented scale, with unprecedented risks for children, which is why completely new thinking has to be applied to technology solutions that help parents keep their children safe” Levkovitz tells me. The company is pushing Apple to remove WhatsApp from the App Store until the problems are fixed, citing how Apple temporarily suspended Tumblr due to child pornography.

Ad Networks Must Be Monitored

Encryption has proven an impediment to WhatsApp preventing the spread of child exploitation imagery. WhatsApp can’t see what is shared inside of group chats. Instead it has to rely on the few pieces of public and unencrypted data such as group names and profile photos plus their members’ profile photos, looking for suspicious names or illegal images. The company matches those images to a PhotoDNA database of known child exploitation photos to administer bans, and has human moderators investigate if seemingly illegal images aren’t already on file. It then reports its findings to law enforcement and the National Center For Missing And Exploited Children. Strong encryption is important for protecting privacy and political dissent, but also thwarts some detection of illegal content and thereby necessitates more manual moderation.

With just 300 total employees and only a subset working on security or content moderation, WhatsApp seems understaffed to manage such a large user base. It’s tried to depend on AI to safeguard its community. However, that technology can’t yet perform the nuanced investigations necessary to combat exploitation. WhatsApp runs semi-independently of Facebook, but could hire more moderators to investigate group discovery apps that lead to child pornography if Facebook allocated more resources to its acquisition.

WhatsApp group discovery apps featured Adult sections that contained links to child exploitation imagery groups

Google and Facebook, with their vast headcounts and profit margins, are neglecting to properly police who hosts their ad networks. The companies have sought to earn extra revenue by powering ads on other apps, yet failed to assume the necessary responsibility to ensure those apps aren’t facilitating crimes. Stricter examinations of in-app content should be administered before an app is accepted to app stores or ad networks, and periodically once they’re running. And when automated systems can’t be deployed, as can be the case with policing third-party apps, human staffers should be assigned despite the cost.

It’s becoming increasingly clear that social networks and ad networks that profit off of other people’s content can’t be low-maintenance cash cows. Companies should invest ample money and labor into safeguarding any property they run or monetize even if it makes the opportunities less lucrative. The strip-mining of the internet without regard for consequences must end.

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