Startups Weekly: SoftBank is screwing up

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about All Raise’s expansion, Uber the TV show and the unicorn from down under.

Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

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The SoftBank saga

According to a new report from The Wall Street Journal, SoftBank plans to take a more conservative approach as it begins deploying capital from Vision Fund II. Why? The Japanese mega-fund’s track record is less than stellar. Not only has it lost billions on WeWork, but several of its other portfolio companies are suffering through layoffs, mismanagement and more.

Fair.com, a startup building a flexible car ownership business that is valued at $1.2 billion — backed by some $500 million in equity from SoftBank and others, plus billions more dollars in debt funding — said this week that it will be laying off 40% of its staff. On top of this, it’s removing its CFO, Tyler Painter, the brother of the CEO and co-founder (and car business veteran) Scott Painter. He’s being replaced in the interim by Kirk Shryoc. Read more from TechCrunch’s Ingrid Lunden.

WeWork, the co-working giant we’re all too familiar with at this point, has benefited from $18.5 billion from SoftBank, according to Marcelo Claure, a SoftBank executive who’s speech to WeWork employees was leaked to Recode this week. “We have guaranteed the future of WeWork, but more importantly is we’re putting the future back into our hands. There’s no more days needed to go fundraising …The size of the commitment that SoftBank has made to this company in the past and now is $18.5 billion. To put the things in context, that is bigger than the GDP of my country where I came from. That’s a country where there’s 11 million people.” Now nearly every single WeWork investor, particularly SoftBank, is entirely under water.

There’s more where that came from. Brandless, another … star of SoftBank’s portfolio, has struggled greatly with layoffs and a CEO shake-up, according to The Information. The dog-walking startup Wag raised $300 million from SoftBank, has also endured layoffs and management changes, and has failed to protect the safety of its pets, per this great report from CNN. And Compass, a real estate unicorn, has lost its CFO, CMO and CTO in what’s been labeled “Another SoftBank-Fueled Real Estate Exodus.”

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BERLIN, GERMANY – DECEMBER 05: Clue Co-founder & CEO Ida Tin talks at TechCrunch Disrupt Berlin 2017 at Arena Berlin on December 4, 2017 in (Photo by Noam Galai/Getty Images for TechCrunch,)

Meet me in Berlin

The TechCrunch team is heading to Berlin again this year for our annual event, TechCrunch Disrupt Berlin, which brings together entrepreneurs and investors from across the globe. We announced the agenda this week, with leading founders including Away’s Jen Rubio and UiPath’s Daniel Dines on tap for great talks. Take a look at the full agenda.

I will be there to interview a bunch of venture capitalists, who will give tips on how to raise your first euros. Buy tickets to the event here.

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VC deals

• Logistics management business Shipwell raises $35M
• Very Good Security gets $35M
• Grafana Labs raises $24M from Lightspeed
• Mobile banking startup Current secures $20M
• Modern Animal raises $13.5M to make going to the vet suck less
• Pet health tech company Gallant nabs $11M
• Bespoke Financial lands $7M to fund cannabis entrepreneurs
• YC grad Taskade nabs $5M to take on Notion
• Workplace learning platform HowNow gets $3M
• Vendr, already profitable, nabs $2M to replace your enterprise sales team

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Equity

This week, Alex was remote and I was in studio to chat about a new angel fund, the WeWork saga and Lime’s losses. Listen to the latest episode here.

Equity drops every Friday at 6:00 am PT, so subscribe to us on iTunes, Overcast and all the casts.

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Startup Spotlight

Bespoke Financial wants to provide cannabis businesses with the same kind of financial services that other businesses get, but that dispensaries and growers can’t yet access.

The regulations around cannabis operations are so stringent at the local level — and so nebulous at the federal level — that national banks won’t give businesses in the cannabis industry the same basic services (like short-term loans).

That’s why one former Goldman Sachs banker has partnered with two entrepreneurs from the traditional agriculture industry to create Bespoke Financial. And it’s why the company has raised $7 million in financing led by Casa Verde Capital — the investment firm launched by legendary cannabis aficionado, Calvin Broadus (AKA Snoop Dogg). Read more by TechCrunch’s Jon Shieber here.

https://ift.tt/2BJijCV Startups Weekly: SoftBank is screwing up https://ift.tt/3430dI1

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Mark Zuckerberg makes the case for Facebook News

While Facebook CEO Mark Zuckerberg seemed cheerful and even jokey when he took the stage today in front of journalists and media executives (at one point, he referred to the event as “by far the best thing” he’d done this week), he acknowledged that there are reasons for the news industry to be skeptical.

Facebook, after all, has been one of the main forces creating a difficult economic reality for the industry over the past decade. And there are plenty of people (including our own Josh Constine) who think it would be foolish for publishers to trust the company again.

For one thing, there’s the question of how Facebook’s algorithm prioritizes different types of content, and how changes to the algorithm can be enormously damaging to publishers.

“We can do a better job of working with partners to have more transparency and also lead time about what we see in the pipeline,” Zuckerberg said, adding, “I think stability is a big theme.” So Facebook might be trying something out as an “experiment,” but “if it kind of just causes a spike, it can be hard for your business to plan for that.”

At the same time, Zuckerberg argued that Facebook’s algorithms are “one of the least understood things about what we do.” Specifically, he noted that many people accuse the company of simply optimizing the feed to keep users on the service for as long as possible.

“That’s actually not true,” he said. “For many years now, I’ve prohibited any of our feed teams … from optimizing the systems to encourage the maximum amount of time to be spent. We actually optimize the system for facilitating as many meaningful interactions as possible.”

Facebook starts testing News, its new section for journalism

For example, he said that when Facebook changed the algorithm to prioritize friends and family content over other types of content (like news), it effectively eliminated 50 million hours of viral video viewing each day. After the company reported its subsequent earnings, Facebook had the biggest drop in market capitalization in U.S. history.

Zuckerberg was onstage in New York with News Corp CEO Robert Thomson to discuss the launch of Facebook News, a new tab within the larger Facebook product that’s focused entirely on news. Thomson began the conversation with a simple question: “What took you so long?”

The Facebook CEO took this in stride, responding that the question was “one of the nicest things he could have said — that actually means he thinks we did something good.”

Zuckerberg went on to suggest that the company has had a long interest in supporting journalism (“I just think that every internet platform has a responsibility to try to fund and form partnerships to help news”), but that its efforts were initially focused on the News Feed, where the “fundamental architecture” made it hard to find much room for news stories — particularly when most users are more interested in that content from friends and family.

So Facebook News could serve as a more natural home for this news  (to be clear, the company says news content will continue to appear in the main feed as well). Zuckerberg also said that since past experiments have created such “thrash in the ecosystem,” Facebook wanted to make sure it got this right before launching it.

Why the Facebook News tab shouldn’t be trusted

In particular, he said the company needed to show that tabs within Facebook, like Facebook Marketplace and Facebook Watch, could attract a meaningful audience. Zuckerberg acknowledged that the majority of Facebook users aren’t interested in these other tabs, but when you’ve got such an enormous user base, even a small percentage can be meaningful.

“I think we can probably get to maybe 20 or 30 million people [visiting Facebook News] over a few years,” he said. “That by itself would be very meaningful.”

Facebook is also paying some of the publishers who are participating in Facebook News. Zuckerberg described this as “the first time we’re forming long-term, stable relationships and partnerships with a lot of publishers.”

Several journalists asked for more details about how Facebook decided which publishers to pay, and how much to pay them. Zuckerberg said it’s based on a number of factors, like ensuring a wide range of content in Facebook News, including from publishers who hadn’t been publishing much on the site previously. The company also had to compensate publishers who are taking some of their content out from behind their paywalls.

“This not an exact formula — maybe we’ll get to that over time — but it’s all within a band,” he said.

Lowlights from Zuckerberg’s Libra testimony in Congress

Zuckerberg was also asked about how Facebook will deal with accuracy and quality, particularly given the recent controversy over its unwillingness to fact check political ads.

He sidestepped the political ads question, arguing that it’s unrelated to the day’s topics, then said, “This is a different kind of thing.” In other words, he argued that the company has much more leeway here to determine what is and isn’t included — both by requiring any participating publishers to abide by Facebook’s publisher guidelines, and by hiring a team of journalists to curate the headlines that show up in the Top Stories section.

“People have a different expectation in a space dedicated to high-quality news than they do in a space where the goal is to make sure everyone can have a voice and can share their opinion,” he said.

As for whether Facebook News will include negative stories about Facebook, Zuckerberg seemed delighted to learn that Bloomberg (mostly) doesn’t cover Bloomberg.

“I didn’t know that was a thing a person could do,” he joked. More seriously, he said, “For better or worse, we’re a prominent part of a lot of the news cycles. I don’t think it would be reasonable to try to have a news tab that didn’t cover the stuff that Facebook is doing. In order to make this a trusted source over time, they have to be covered objectively.”

from Social – TechCrunch https://ift.tt/eA8V8J Mark Zuckerberg makes the case for Facebook News Anthony Ha https://ift.tt/2MNzRE9
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Daily Crunch: Facebook launches its News section

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Facebook starts testing News, its new section for journalism

Facebook’s news section, which was previously reported to be imminent, is here: The company is rolling out Facebook News in a limited test in the U.S. as a home screen tab and bookmark in the main Facebook app.

Should publishers trust Facebook? Well, Josh Constine argues that none of them have learned the right lessons from the last 10 years.

2. Pixelbook Go review: a Chromebook in search of meaning

The Go is clearly Google’s attempt to lead the way for manufacturers looking to explore Chromebook life outside the classroom. It has some nice hardware perks, but it’s not the revolution or revelation ChromeOS needs.

3. SpaceX wants to land Starship on the Moon before 2022, then do cargo runs for 2024 human landing

SpaceX president and COO Gwynne Shotwell shed a little more light on her company’s current thinking with regards to the mission timelines for its forthcoming Starship spacefaring vehicle.

4. After its first earnings miss in two years, Amazon shares get walloped in after-hours trading

Amazon shares fell by nearly 7% in after-hours trading on Thursday after the company reported its first earnings miss in two years.

5. Lawmakers ask US intelligence chief to investigate if TikTok is a national security threat

In a letter by Sens. Charles Schumer (D-NY) and Tom Cotton (R-AR), the lawmakers asked the acting director of national intelligence Joseph Maguire if the app maker could be compelled to turn Americans’ data over to Chinese authorities.

6. The SaaS gold rush will become the ‘Hunger Games’

Enterprise software investor Rory O’Driscoll says that while the cloud is obviously here to stay, the next five years in cloud investing will neither be the same nor as easy as the last 10. (Extra Crunch membership required.)

7. Learn how to raise your first euros at TechCrunch Disrupt Berlin

Startup funding experts — including Forward Partners managing partner Nic Brisbourne, Target Global partner Malin Holmberg and DocSend co-founder and chief executive officer Russ Heddleston — will sit down together on the Extra Crunch Stage at TechCrunch Disrupt Berlin.

from Social – TechCrunch https://ift.tt/2CoAoqu Daily Crunch: Facebook launches its News section Anthony Ha https://ift.tt/2qKTDru
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Meet Bespoke Financial, a lender for cannabis companies backed by Snoop Dogg’s Casa Verde Capital

Bespoke Financial wants to provide cannabis businesses with the same kind of financial services that other businesses get, but that dispensaries and growers can’t yet access.

The regulations around cannabis operations are so stringent at the local level — and so nebulous at the federal level — that national banks won’t give businesses in the cannabis industry the same basic services (like short-term loans).

That’s why one former Goldman Sachs banker has partnered with two entrepreneurs from the traditional agriculture industry to create Bespoke Financial. And it’s why the company has raised $7 million in financing led by Casa Verde Capital — the investment firm launched by legendary cannabis aficionado, Calvin Broadus (AKA Snoop Dogg).

In some ways, George Mancheril is the new face of the cannabis business. The former banker hails from Goldman Sachs and Guggenheim Partners and worked on the desks that dealt with alternative lending.

A transplant to Los Angeles roughly six years ago, Mancheril says he saw the migration of legally sanctioned cannabis begin for recreational use and knew that there would be opportunities for new lending businesses.

“Cannabis will become a broad, mature industry just like any other, and if that is going to happen there needs to be a debt structure that can support that,” Mancheril says.

The biggest impediment to the industry’s growth is the one that Bespoke Financial wants to tackle first — and that’s access to debt.

To build the company’s first product Mancheril looked to his co-founder’s Pablo Borquez-Schwarzbeck and Benjamin Dusastre. Borquez-Schwarzbeck and Dusastre previously launched ProducePay, a fintech platform focused on produce farmers that has already financed roughly $2 billion in perishable commodities throughout 13 countries. It’s backed by around $200 million in venture capital and debt financing.  

What Mancheril and his co-founders have done is take ProducePay’s underwriting model and apply it to the cannabis industry. The financial instrument that they’re starting with is known “in the business” as factoring.

It’s basically advancing money to businesses for a contract that’s signed in exchange for a cut of the money once a company gets paid for the goods or services they’ve rendered.

“While the US legal cannabis market is forecasted to grow over 20% annually, reaching $23B by 2022, the industry’s true growth potential is limited by long cash flow cycles throughout the supply chain and a lack of scalable and efficient capital sources,” says Bespoke Financial co-founder and chief executive, George Mancheril, in a statement. “Our approach will dramatically improve cash flow cycles across the supply chain and provide scalable working capital to fuel our clients’ growth.”

The $7 million infusion from investors including Casa Verde, Greenhouse Capital Partners and Outbound Ventures, will be used to build out the company’s business and establish its first credit lines with customers. Mancheril says it already has around $3 million worth of loans revolving through its business. Right now, the company is focused on California, but says it could expand to other regions that are embracing legalization. 

“In general in the cannabis industry overall it’s difficult to access any part of the financial system,” says Karan Wadhera, a managing director at Casa Verde. “Now that we’re moving into a place where equity financing is getting expensive a company like bespoke plays an important and valuable role in the ecosystem to help young brands and mature brands get access to working capital when they need it the most.”

https://ift.tt/2MLUZur Meet Bespoke Financial, a lender for cannabis companies backed by Snoop Dogg’s Casa Verde Capital https://ift.tt/31IdLY9

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Growth is out, profitability is in

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week Kate and Alex held the reins as a duo (check out our chat with Greylock’s Sarah Guo from last week here) to dig into an enormous raft of news. And don’t worry, it’s not all late-stage happenings. We’re discussing early-stage news every week because that’s what the listeners want!

Up top we dug into Kate’s excellent work covering the Superhuman founder’s new micro fund, or at least his attempt at raising such a fund. Our main question is how can he be a good VC and a good executive at the same time? Folks don’t tend to do both at the same time because they’re each more than full-time jobs. Having two such gigs sounds hard.

But hey, it’s not just athletes and musicians who can bring outsized interest to deals. In-demand founders can have a similar effect. We’ll be keeping a close eye on the upcoming fun. Moving on. 

Next we turned to the other end of the venture landscape, looking at Founder’s Fund’s new capital vehicles. With a combined $2.7 billion in eventual capital, FF is hoping to build a financial redoubt from which they can rain capital down on late-stage targets wherever they may be.

Is it a bit late in the cycle to cut late-stage checks to companies that might otherwise go public? That’s the gamble so far as we can see it, but perhaps with WeWork’s IPO dreams turned to nightmares, there’s demand among a group of companies for another 12 months in the private markets. And that means more money is required.

On the theme of more money, Lime is raising some more and we were treated to new financial results from The Information’s great work getting the figures. Or discussion asked the question of how far the company’s unit economics could improve. Kate said that Lime is investing a lot now in developing better hardware, so their scooters can last more than 5 minutes on the roads before breaking down. She thinks things will start looking up when its deploying only new, fancy, good scooters. Alex is bearish.

Before we could turn back to the early-stage market and wrap up, we had to cover the latest from WeWork. SoftBank did in the end come and save the day (at least for now) for the company, meaning that WeWork lives on, though layoffs are expected sooner rather than later. Who knows what the future holds…

And finally, Vendr, a company that is profitable, raised a $2 million round. This is interesting because, again, it’s profitable! And the startup willing shared some financial data with us–a rarity. Read more about the recent Y Combinator graduate here.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

https://ift.tt/eA8V8J Growth is out, profitability is in https://ift.tt/2BKuwqR

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Facebook starts testing News, its new section for journalism

Facebook’s news section, which was previously reported to be imminent, is here: The company is rolling out Facebook News in a limited test in the U.S. as a home screen tab and bookmark in the main Facebook app.

In a blog post, Facebook’s Campbell Brown (vice president of global news partnerships) and Mona Sarantakos (product manager, news) said that news articles will continue to appear in the main News Feed. However, they said that creating a specific tab focused on journalism “gives people more control over the stories they see, and the ability to explore a wider range of their news interests, directly within the Facebook app.”

Brown and Sarantakos added that the News tab was developed in consultation with publishers, and also based on feedback from a survey of more than 100,000 Facebook users in the United States earlier this year.

It sounds like Facebook News will use both human editors and algorithms to determine which stories you see — an unusual move for a company that’s been hesitant to police the content posted by users and advertisers. Specifically, there will be a section called Today’s Stories, curated by a team of journalists to highlight the biggest national news stories of the day.

At the same time, Facebook will also provide algorithmic story suggestions based on your interests and activity. You’ll be able to hide articles, topics and publishers that you don’t want to see, and to browse sections devoted to business, entertainment, health, science and technology, and sports — topics where Facebook users apparently felt underserved.

“Regarding personalization, publishers worry that machine learning has limits and they’re right,” Brown and Sarantakos wrote. “We have progress to make before we can rely on technology alone to provide a quality news destination.”

Nonetheless, they suggested that algorithms will be “driving the majority of Facebook News,” and that they’ll be working to ensure that those algorithms are also surfacing “new forms of journalism in the digital age, including individual, independent journalism.”

Also included: a section where users who have linked their news subscriptions to their Facebook accounts can browse content from those subscriptions.

Which publishers will be included? Brown and Sarantakos said they must be part of Facebook’s News Page Index, and also by abide by the company’s Publisher Guidelines, which includes prohibitions against misinformation (as flagged by third-party fact checkers) and hate speech.

Facebook did not provide a list of participating publishers, but screenshots of the News section include stories from The Wall Street Journal, Time, The Washington Post, BuzzFeed News, Bloomberg, Fox Business, Business Insider, NPR and others; spokespeople for The Post, BuzzFeed and the LA Times confirmed their participation.

So even if publishers have been burned by relying too much on the social network in the past, it sounds like they’re not going to give up on working with Facebook.

It probably helps that the company is paying some of these publishers millions of dollars a year, according to Recode. (A Facebook spokesperson told me, “To ensure we’re including a range of topic areas, we’ll start by paying a subset of publishers who can provide a steady volume of fact-based and original content.”)

BuzzFeed News Editor-in-Chief Ben Smith told me via email that BuzzFeed is “glad to participate” and that “Facebook is taking the lead in recognizing the value news provides to these platforms in a tangible way.”

And Hillary Manning, The Los Angeles Times’ vice president of communications, said (also via email), “We anticipate that we’ll reach new readers through Facebook News and, as we reach more readers, we expect to see more growth in our digital subscriber base.”

Facebook says News will be available to a limited group of users in the U.S., starting today.

Why the Facebook News tab shouldn’t be trusted

from Social – TechCrunch https://ift.tt/342cnRu Facebook starts testing News, its new section for journalism Anthony Ha https://ift.tt/365xggv
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Workplace learning platform HowNow scores $3M funding

HowNow, the workforce learning platform, has raised $3 million (£2.4m) in a “pre-series A” funding round. The round is led by Mark Pearson’s Fuel Ventures and brings the total raised by the startup to $4.5 million.

Other investors include Andy Murray OBE; Michael Whitfield and Chris Bruce (founders of Thomsons Online Benefits); Bernie Sinniah (former managing director at Citi Bank); and Alwin Magimay (a former partner at McKinsey).

Designed for organisations that want to support teams with self-directed learning and the development of “business-critical” skills, HowNow is described as an integrated learning platform that autonomously curates learning resources, “business intelligence” and market insights that live in various internal and external sources.

The idea is to bring together these different learning resources — ranging from “nuggets” of knowledge shared by existing employees to internal data to external content libraries, blogs, podcasts — and match these to different job descriptions and employee skill-sets.

This is powered by a browser extension and integrations with Slack, Salesforce, Hubspot and over 300 other apps. Machine-learning is also employed to push the right content to the right employee.

“Employers can also use HowNow to identify skills gaps within the company based on job market data, via HowNow’s real-time analytics and built-in certification,” adds the company. To achieve this, the platform claims to monitor over 20,000 job specifications to understand the in-demand skills and requirements companies are searching for.

“Based on self-review, peer-review and real-time job market data we build the user’s skill profile as they onboard the platform,” explains HowNow co-founder and CEO Nelson Sivalingam. “Once in HowNow, they see learning recommendations based on assigned learning pathways, their role, skill requirements and internal benchmarks. This content is brought together from a variety of their internal sources (G Drive, Sharepoint, CRM, etc), external sources (content libraries, blogs, podcasts, etc) and the autonomously organised knowledge shared by their peers directly on HowNow”.

Employees can then access these learning resources directly within the applications they already work with and receive contextually relevant suggestions powered by HowNow’s “AI”. “For example, they can be in Slack and search all of their learning resources directly from their using the HowNow Slack app,” says Sivalingam. “They can also convert a message from a colleague into a nugget that will get stored and autonomously organised in HowNow”.

Similarly, Sivalingam says that, via HowNow, client facing teams are able to access up-to-date product knowledge, business intelligence and market insights directly within their inbox, CRM and helpdesk, which enables them to reduce customer response times.

“Fast-growing companies like GymShark are able to capture the knowledge in the heads of their internal subject matter experts by giving them a quick and easy way to share knowledge, build a glue between scattered content, avoid repeat questions and get everyone on the same page,” he adds.

To that end, I’m told that more than 500,000 users currently use HowNow within over 125 businesses. These range from SMEs to larger organisations, across 14 different countries. A classic SaaS play, the startup generates revenue through a licence fee per user.

https://ift.tt/eA8V8J Workplace learning platform HowNow scores $3M funding https://ift.tt/369FKn5

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StepLadder, the collaborative deposit saving platform for first-time buyers, raises £1.5M

StepLadder, another London-based startup aiming to help so-called “generation rent” get onto the housing ladder, has raised £1.5 million in seed funding.

Backing the round is Spanish banking giant BBVA and fintech VC Anthemis via the London-based venture studio the pair have partnered on. Early investor Seedcamp also followed on, in addition to unnamed angel investors.

StepLadder says it will use the new capital and support provided by BBVA/Anthemis to further develop its “collaborative finance platform”. The startup is also eyeing up international expansion.

Founded in 2015 by Matthew Addison and joined by Lucy Mullins and Mihir Bhushan, StepLadder’s collaborative deposit saving platform is designed to incentive renters to save for a deposit so that they can purchase their first home.

Using a financial model known as a “Rotating Credit and Savings Association” (ROSCA), StepLadder puts its members into “Circles,” whereby each individual member contributes an identical amount on a monthly basis — ranging from £25 to £1,000. A random draw then takes place each month and the winner is provided with that month’s full pot to use towards their deposit.

“For most first-time buyers, it’s really difficult to get on the property ladder,” says Addison. “Home ownership rates amongst 25-34 years olds have collapsed… [with around] 250,000 fewer first time buyers every year, for over a decade, in the U.K. alone. Raising the deposit is the biggest hurdle. At StepLadder we’re using something called a ROSCA, a form of collaborative finance where people work together in groups to help our members raise their property deposits, on average, 45% faster”.

As an example, StepLadder might match you to a £500 a month Circle for 20 months to raise £10,000. This would see it find 19 other members to be in the same Circle. “Each month the £10,000 is randomly allocated and you could be drawn at any point in that 20 months,” explains StepLadder’s Lucy Mullins. “You have to keep making your £500 a month payment for the full 20 months, so at the end everybody has paid in £10,000 and everybody has received £10,000”.

To help protect the platform from being abused, Mullins says that while a member is still part of a Circle, the startup will only release the pot to their solicitor for use as a property deposit. “So, if somebody stops paying after they have been drawn then we wouldn’t release their payout until they had made catch-up payments”.

StepLadder also supports members along the house buying journey. The app lets members engage with a community of like-minded people and access group-buying discounts on services such as mortgages, solicitor fess and surveyors. The latter forms part of the company’s revenue stream.

“We introduce our members (at their request) to high quality service providers, such as mortgage brokers, lending banks, surveyors and insurance providers,” says Addison. “In return, these partners pay us fees or commissions. We offer discounts on these transaction services via the combined buying power of our members in their Circles”.

In addition, there is a small monthly fee (between 2-5%) to be part of a Circle, which Mullins says covers the cost of delivering the service.

This includes holding money securely in a client money account, a payment waiver if a member were to become sick or unemployed after buying a property with their StepLadder deposit, credit bureau costs, and the cost of a Circle host to support members on the journey”.

“We do not aim to profit from the monthly administration fees we charge members and would usually be able to save our members much more in discounts than they pay in fees,” says Mullins.

Meanwhile, StepLadder has plans to expand the use cases for Circles and evolve the platform to also cover general savings goals and targeted “big ticket items”.

Explains Addison: “In Brazil, ROSCAs are used by nine million consumers for everything from dishwashers to cars to homes. We have already begun to demonstrate this potential with both our First Step offering (smaller circles from £25 a month) and proposed partnered launches”.

https://ift.tt/32JRmLa StepLadder, the collaborative deposit saving platform for first-time buyers, raises £1.5M https://ift.tt/2BIqob0

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Why publishers shouldn’t trust Facebook News

Are we really doing this again? After the pivot to video. After Instant Articles. After news was deleted from the News Feed. Once more, Facebook dangles extra traffic, and journalism outlets leap through its hoop and into its cage.

Tomorrow, Facebook will unveil its News tab. About 200 publishers are already aboard including the Wall Street Journal and BuzzFeed News, and some will be paid. None seem to have learned the lesson of platform risk.

When you build on someone else’s land, don’t be surprised when you’re bulldozed. And really, given Facebook’s flawless track record of pulling the rug out from under publishers, no one should be surprised.

I could just re-run my 2015 piece on how “Facebook is turning publishers into ghost writers,” merely dumb content in its smart pipe. Or my 2018 piece on “how Facebook stole the news business” by retraining readers to abandon publishers’ sites and rely on its algorithmic feed.

Chronicling Facebook’s abuse of publishers

Let’s take a stroll back through time and check out Facebook’s past flip-flops on news that hurt everyone else:

-In 2007 before Facebook even got into news, it launches a developer platform with tons of free virality, leading to the build-up of companies like Zynga. Once that spam started drowning the News Feed, Facebook cut it and Zynga off, then largely abandoned gaming for half a decade as the company went mobile. Zynga never fully recovered.

-In 2011, Facebook launches the open graph platform with Social Reader apps that auto-share to friends what news articles you’re reading. Publishers like The Guardian and Washington Post race to build these apps and score viral traffic. But in 2012, Facebook changes the feed post design and prominence of social reader apps, they lost most of their users, those and other outlets shut down their apps, and Facebook largely abandons the platform

-In 2015, Facebook launches Instant Articles, hosting news content inside its app to make it load faster. But heavy-handed rules restricting advertising, subscription signup boxes, and recirculation modules lead publishers to get little out of Instant Articles. By late 2017, many publishers had largely abandoned the feature.

Decline of Instant Article use, via Columbia Journalism Review

-Also in 2015, Facebook started discussing “the shift to video,” citing 1 billion video views per day. As the News Feed algorithm prioritized video and daily views climbed to 8 billion within the year, newsrooms shifted headcount and resources from text to video. But a lawsuit later revealed Facebook already knew it was inflating view metrics by 150% to 900%. By the end of 2017 it had downranked viral videos, eliminated 50 million hours per day of viewing (over 2 minutes per user), and later pulled back on paying publishers for Live video as it largely abandoned publisher videos in favor of friend content.

-In 2018, Facebook announced it would decrease the presence of news in the News Feed from 5% to 4% while prioritizing friends and family content. Referral shrank sharply, with Google overtaking it as the top referrer, while some outlets were hit hard like Slate which lost 87% of traffic from Facebook. You’d understand if some publishers felt…largely abandoned.

Facebook referral traffic to slate plummeted 87% after a strategy change prioritized friends and family content over news

Are you sensing a trend?

Facebook typically defends the whiplash caused by its strategic about-faces by claiming it does what’s best for users, follows data on what they want, and tries to protect them. What it leaves out is how the rest of the stakeholders are prioritized.

Aggregated to death

I used to think of Facebook as being in a bizarre love quadrangle with its users, developers and advertisers. But increasingly it feels like the company is in an abusive love/hate relationship with users, catering to their attention while exploiting their privacy. Meanwhile, it dominates the advertisers thanks to its duopoly with Google that lets it survive metrics errors, and the developers as it alters their access and reach depending on if it needs their users or is backpedaling after a data fiasco.

Only recently after severe backlash does society seem to be getting any of Facebook’s affection. And perhaps even lower in the hierarchy would be news publishers. They’re not a huge chunk of Facebook’s content or, therefore, its revenue, they’re not part of the friends and family graph at the foundation of the social network, and given how hard the press goes on Facebook relative to Apple and Google, it’s hard to see that relationship getting much worse than it already is.

That’s not to say Facebook doesn’t philosophically care about news. It invests in its Journalism Project hand-outs, literacy and its local news feature Today In. Facebook has worked diligently in the wake of Instant Article backlash to help publishers build out paywalls. Given how centrally it’s featured, Facebook’s team surely reads plenty of it. And supporting the sector could win it some kudos between scandals.

But what’s not central to Facebook’s survival will never be central to its strategy. News is not going to pay the bills, and it probably won’t cause a major change in its hallowed growth rate. Remember that Twitter, which hinges much more on news, is 1/23rd of Facebook’s market cap.

So hopefully at this point we’ve established that Facebook is not an ally of news publishers.

At best it’s a fickle fair-weather friend. And even paying out millions of dollars, which can sound like a lot in journalism land, is a tiny fraction of the $22 billion in profit it earned in 2018.

Whatever Facebook offers publishers is conditional. It’s unlikely to pay subsidies forever if the News tab doesn’t become sustainable. For newsrooms, changing game plans or reallocating resources means putting faith in Facebook it hasn’t earned.

Twitter And Facebook Are Turning Publishers Into Ghost Writers

What should publishers do? Constantly double-down on the concept of owned audience.

They should court direct traffic to their sites where they have the flexibility to point users to subscriptions or newsletters or podcasts or original reporting that’s satisfying even if it’s not as sexy in a feed.

Meet users where they are, but pull them back to where you live. Build an app users download or get them to bookmark the publisher across their devices. Develop alternative revenue sources to traffic-focused ads, such as subscriptions, events, merchandise, data and research. Pay to retain and recruit top talent with differentiated voices.

What scoops, opinions, analysis, and media can’t be ripped off or reblogged? Make that. What will stand out when stories from every outlet are stacked atop each other? Because apparently that’s the future. Don’t become generic dumb content fed through someone else’s smart pipe.

As Ben Thompson of Stratechery has proselytized, Facebook is the aggregator to which the spoils of attention and advertisers accrue as they’re sucked out of the aggregated content suppliers. To the aggregator, the suppliers are interchangeable and disposable. Publishers are essentially ghostwriters for the Facebook News destination. Becoming dependent upon the aggregator means forfeiting control of your destiny.

Surely, experimenting to become the breakout star of the News tab could pay dividends. Publishers can take what it offers if that doesn’t require uprooting their process. But with everything subject to Facebook’s shifting attitudes, it will be like publishers trying to play bocce during an earthquake.

[Featured Image: Russell Werges]

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SoftBank says it has now invested $18.5 billion in WeWork, ‘more than the GDP’ of Bolivia, which has 11.5 million people

Yesterday, in addressing nervous WeWork employees at an all-hands, the company’s new chairman, SoftBank executive Marcelo Claure, told those gathered that their days of worrying are over, says Recode, which obtained a leaked recording of the meeting.

In comments that may stun industry observers who haven’t done the math — and upset at least some percentage of SoftBank investors — Claure is quoted as telling employees: “We have guaranteed the future of WeWork, but more importantly is we’re putting the future back into our hands. There’s no more days needed to go fundraising. There’s no more days needed to go prove to the investor community that we’re a viable company. The size of the commitment that SoftBank has made to this company in the past and now is $18.5 billion. To put the things in context, that is bigger than the GDP of my country where I came from. That’s a country where there’s 11 million people.”

Claure, a native of Bolivia who was named chairman as part of SoftBank’s rescue of the beleaguered co-working company, has been a SoftBank lieutenant for the last five years, and currently holds a variety of titles on its behalf, including COO of SoftBank Group Corp, CEO of SoftBank Group International, and CEO of SoftBank Latin America.

He has said he first met SoftBank founder Masayoshi Son after building up his own business, Brightstar — a  cellphone reseller — then selling 57 percent of it to SoftBank in 2013 in a deal that valued the company at $2.2 billion. SoftBank later acquired more of the company before deciding to explore a sale of the low-margin business last year for $1 billion.

By then, Claure was running Sprint, a SoftBank-backed property that installed Claure as CEO in 2014, where he presided over a massive share slide that had begun before he joined the company and ended only last year when T-Mobile and Sprint agreed to merge. (The deal has been green-lit by the FCC and the Department of Justice, but it’s still facing a lawsuit from several state attorneys general who are trying to block the deal, saying it could hamper competition and drive prices higher. Claure stepped away from running the company and into the role of Sprint’s executive chairman in May of last year to become COO of SoftBank. Sprint’s shares have meanwhile held mostly steady for the past year. )

In talking with WeWork employees, Claure painted a rosy picture of his own career. (“Masa told me, ‘You’re a great entrepreneur. You built a company from scratch, very successful.’ He says, ‘You’re a good operator. You fixed Sprint.'”)

To assuage fears, he also underscored repeatedly the gamble the SoftBank is taking on WeWork, telling employees, “We’ve had many, many endless nights with Masa in terms of what was the next thing to do with WeWork. I would say that 99 percent of advice that we got is to cut your losses and run away, but Masa absolutely is a believer in WeWork and the mission and disruption.

“You say why, right? The easy thing was just run away. There were no need. We didn’t have to come in and make an investment of this size. We’re basically betting SoftBank. We’re betting our reputation and we’re betting everything we have that this is going to be a success story. We want people to look at this move as not a failure, but we want this move as a genius move. We had many, many nights of debate. Everything that we look at the business, the more we dig, the more we love the business, the more community managers we interact with, the more we love the business.”

As for how WeWork saves the business, that’s not clear yet, said Claure.

“My goal in the next 30 days is to work with this management team, to work with Artie, Sebastian, and all the incredibly talented members of the team to basically set up a plan,” he said. “This plan is going to be very clear. We’re all going to know what each one of us is supposed to do. I’m going to make sure that it’s not an empty plan. I’m going to make sure there’s numbers. I’m going to make sure that we can measure. I’m going to make sure that we can hold people accountable.”

One possible hitch that Claure understandably didn’t raise yesterday — one in addition to the countless obvious challenges WeWork faces in trying to generate forward momentum, including convincing corporate customers not to look elsewhere for office space — is the Committee on Foreign Investment in the U.S, or Cfius.

As Bloomberg reported last night, SoftBank will seek national security approval from Cfius for its takeover, and the committee has stymied the Japanese conglomerate before.

It put conditions on SoftBank’s majority ownership of Sprint; it restricted its control of the investment firm Fortress Investment Group for which it paid $3.3 billion in late 2017; it also held up SoftBank when it wanted to fill two board seats after it sunk billions into Uber. Indeed, SoftBank was never able to fill those spots, noted Bloomberg. Once the ride-share company went public, it voided some of its obligations to SoftBank.

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Here’s what the Pixel 4’s radar chip looks like

{rss:content:encoded} Here’s what the Pixel 4’s radar chip looks like https://ift.tt/2PhLkOa https://ift.tt/31LpnJE October 24, 2019 at 07:59PM

I’ve been tearing my gadgets apart for as long as I can remember. Consoles, phones, printers, whatever — I’ve always needed to see what makes it all work. Sometimes they even work when I put them back together.

As soon as Google announced that the new Pixel 4 had friggin’ radar built-in for detecting hand gestures, I needed to see under the hood. While I haven’t picked up a Pixel 4 yet, our friends over at iFixit busted out the heat guns and did what they do best, tearing the Pixel 4 XL down to parts and uncovering the Project Soli radar chip along the way.

Image Source: iFixit

That board you’re looking at contains a good amount of stuff beyond the Soli chip — it’s also where you’ll find the earpiece speaker and the ambient light sensor, for example. The Soli chip seems to be that little greenish box in the upper-right area.

Alas, there’s… not a ton to learn just from looking at it. Google has spent the last few years working on this, and they’ve ended up with something that’s honestly a bit wild. With no moving parts, and without line of sight, these chips are able to do things like detect when people are near the device (and how many), whether they’re standing or sitting, how they’re moving their hands and more. As iFixit so succinctly puts it, “TL;DR: magic rectangle knows your every move.”

For anyone looking to tear apart the Pixel 4 XL themselves, be it to make repairs or just out of curiosity, make sure you know what you’re getting into. iFixit gives the device a relatively paltry 4 out of 10 on its repairability score, citing easily breakable pull tabs and particularly strong adhesives as obstacles along the way. You can find their full teardown here.

Image Source: iFixit

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Stewart Butterfield says Microsoft sees Slack as existential threat

In a wide ranging interview with Wall Street Journal global technology editor Jason Dean yesterday, Slack CEO and co-founder Stewart Butterfield had some strong words regarding Microsoft, saying his company represented an existential threat to the software giant.

The interview took place at the WSJ Tech Live event. When Butterfield was asked about a chart Microsoft released in July during the Slack quiet period, which showed Microsoft Teams had 13 million daily active users compared to 12 million for Slack, Butterfield appeared taken aback by the chart.

Chart: Microsoft

“The bigger point is that’s kind of crazy for Microsoft to do, especially during the quiet period. I had someone say it was unprecedented since the [Steve] Ballmer era. I think it’s more like unprecedented since the Gates’ 98-99 era. I think they feel like we’re an existential threat,” he told Dean.

It’s worth noting, that as Dean pointed out, you could flip that existential threat statement. Microsoft is a much bigger business with a trillion dollar market cap versus Slack’s $400 million. It also has the benefit of linking Microsoft Teams to Office 365 subscriptions, but Butterfield says the smaller company with the better idea has often won in the past.

For starters, Butterfield noted that of his biggest customers, more than two-thirds are actually using Slack and Office 365 in combination. “When we look at our top 50 biggest customers, 70% of them are not only Office 365 users, but they’re Office 365 users who use the integrations with Slack,” he said.

He went on to say that smaller companies have taken on giants before and won. As examples, he held up Microsoft itself, which in the 80s was a young upstart taking on established players like IBM. In the late 1990s, Google prevailed as the primary search engine in spite of the fact that Microsoft controlled most of the operating system and browser market at the time. Google then tried to go after Facebook with its social tools, all of which have failed over the years. “And so the lesson we take from that is, often the small startup with real traction with customers has an advantage versus the large incumbent with multiple lines of business,” he said.

When asked by Dean if Microsoft, which ran afoul with the Justice Department in the late 1990s, should be the subject of more regulatory scrutiny for its bundling practices, Butterfield admitted he wasn’t a legal expert, but joked that it was “surprisingly unsportsmanlike conduct.” He added more seriously, “We see things like offering to pay companies to use Teams and that definitely leans on a lot of existing market power. Having said that, we have been asked many times, and maybe it’s something we should have looked at, but we haven’t taken any action.”

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NASA Administrator Jim Bridenstine explains how startups can help with Artemis Moon missions

At this week’s International Astronautical Congress, where the space industry, international space agencies and researchers from around the world convene to discuss the state of space technology and business, I asked NASA Administrator Jim Bridenstine about what role he sees for startups in contributing to his agency’s ambitious Artemis program. Artemis, named after Apollo’s twin sister Artemis, one the gods of Greek myth, is NASA’s mission to return human beings to the surface of the Moon – this time to stay – and to use that as a staging ground for further exploration to Mars and beyond.

Bridenstine, fielding the question during a press Q+A about Artemis, said that the program is incredibly welcoming of contributions from startups large and small, and that it sees a number of different areas where contributions from younger space companies can have a big impact.

“When we talk about entrepreneurs, there are big entrepreneurs and there are small entrepreneurs, but know this: What we’re building it the [Lunar] Gateway is open architecture, and we want to go with commercial partners,” Bridenstine said. “So there are in fact, a number of companies here [at IAC], big companies that have said they want to go to the Moon, they want to go sustainably, they want to be part of Artemis, and the Gateway is available to them.”

Artist’s concept of NASA’s Lunar Gateway with the Orion capsule approaching to dock.

The Lunar Gateway is a station NASA intends to put in orbit around the Moon to act as a staging ground for its vehicles, a key step to ensure the process of landing things on the Moon once they reach lunar orbit is more easily accomplished. Bridenstine pointed out that in the Broad Agency Agreement (BAA) that NASA originally put out for the Artemis program, it went further still and said that it welcomed proposals from private space companies that involve going directly to the Moon, bypassing the Gateway entirely .

Actually getting to the Moon has been taken on by some of the deeper-pocketed and more well-established entrepreneurs among the so-called ‘New Space’ companies, including SpaceX. But Artemis participation goes well beyond the high-priced task of building vehicles capable of getting from Earth to lunar orbit, according to Bridenstine.

“We’re going to need cargo on the surface of the Moon,” he said, noting that the Space Launch System (SLS) and Orion crew capsule Artemis will use to take humans to the Moon in 2024 will lean on advance payloads to better ensure mission success. “[W]hen we talk about aggregating a lander at the gateway – when we talk about, maybe even putting hardware on the surface the Moon, including science hardware, like the Viper neutron spectrometer, an IR spectrometer helping us understand the regolith and the water ice, what’s there on the surface of the Moon, where it is and in what quantities […] we’re going to need those science instruments delivered to the surface of the Moon.”

Blue Origin’s Blue Moon lander.

Indeed, there are companies poised to deliver cargo via lunar landers in advance of, or in time with, NASA’s 2024 target for a human landing, including Astrobotic’s Peregrine Moon lander, which is looking to launch in 2021, and Blue Origin’s Blue Moon lander. Both these landers, and the payloads they carry, could include startup-designed equipment and systems to pave the way for sustainable human occupation of our large natural satellite. In fact, Bridenstine suggested some potential payloads that could be even more wild than advance data-gathering hardware.

“Maybe even – again it depends on budgets, and I’m not promising anything between now and 2024 – but maybe even an inflatable habitat on the surface of the moon so that when our astronauts get there they have a place to go, and they can stay for longer periods of time,” he said. “Is that in the realm of possibility? Absolutely.”

Bridenstine continued that the agency is already working with many smaller, entrepreneurial businesses, and intends to continue exploring partnerships with more. There’s a clear and growing need for lunar cargo from NAA, in increasing volumes, the Administrator pointed out.

“On top of SLS and Orion we need additional capability, there are opportunities there for all kinds of commercial companies entrepreneurs,” he said. “We also have small business investment and research that NASA is involved in, and we’re on-ramping small businesses all the time. In fact, right now we have the Commercial Lunar Payload Services [CLPS] program underway. We have nine companies that have signed up […] two of them now have task orders to deliver to the Moon in 2021 […] We’re on-ramping, not only those nine companies, but we want to on ramp additional companies, and maybe even bigger companies for larger landing opportunities because like I said, we’re going to have a lot more needs in the future for cargo on the surface of the Moon.”

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Newly launched pet health startup Gallant wants you to bank your dog’s stem cells for $990

With $11 million in funding and a mission to open up the doors of regenerative therapies to dogs across the nation, the Los Angeles-based startup Gallant is now opening its doors for the first time.

The company was founded by DogVacay founder and chief executive Aaron Hirschhorn after seeing his own pet’s struggle with debilitating illness and knowing firsthand that regenerative medicine and stem cell therapies could help.

“I struggled with debilitating chronic back pain for more than a decade, leaving me incapable of doing activities I loved, until regenerative medicine successfully cured my condition,” said Hirschhorn, in a statement. “At the same time, I watched my dog Rocky suffer from arthritis so painful that she couldn’t walk. I knew there had to be a better way to treat and heal our pets, which sparked the beginning of Gallant. We are on a mission to keep our pets happier and healthier through the power of regenerative medicine.”

Joining Hirschhorn at the company is Linda Black, an experienced serial entrepreneur at life sciences companies like Medicus Biosciences and SciStem, which both focused on developing regenerative therapies. Richard Jennings, the chief executive of cord blood banking company, California Cryobank, and Darryl Rawlings, the founder and chief executive of Trupanion, both sit on the company’s board of directors.

Hirschorn knows the pet business. He helped grow DogVacay to over $100 million in sales over his tenure at the company before its merger with Rover.

It’s that experience in business that likely helped investors including Maveron, Bold Capital Partners, Bling Capital, and Science Inc. come to the table and fetch $11 million in cash for the business.

Through the investment, Gallant was able to acquire the veterinary division of Cook-Regentec, including the animal medicine division’s intellectual property, existing stem cell banking operations and their pipeline of cell therapy products derived from reproductive tissue.

What’s the benefit of banking your dog’s stem cells for life for roughly $1,000?

According to Gallant, the veterinarians from its newly acquired business have treated hundreds of cats and dogs already with their own banked stem cells. Those treatments have helped dogs with illnesses including osteoarthritis, atopic dermatitis, torn ligaments and chronic dry eye. Each treatment has been demonstrated to be effective in early clinical trials and stem cell therapy is on the cutting edge of new scientific research.

With Gallant, pet owners opt in to having their animal’s stem cells collected during a routine spaying or neutering procedure. Hirschhorn says that roughly 1 million cats and dogs undergo those procedures every day, so there’s no shortage of potential customers.

During the procedure, vets deposit tissue from the operation in a special container that Gallant will collect and use to harvest an animal’s stem cells.

By collecting stem cells harvested during the operations, Gallant says it can get access to younger, healthier stem cells.

Banking and paying for therapies using Gallant’s technology isn’t cheap. The company charges $395 to collect the cells and another $595 to store them for a pet’s lifetime. If an owner wants to pay annually, there’s a $95 fee per year to store the genetic material. (Gallant says it’s waiving the initial collection fee for a limited time to coincide with its launch).

Treatments based on a pet’s genetic material cost $300.

“In my experience with clinical trials and evaluating dogs with debilitating arthritis, I’ve seen first hand how cell therapy can change lives,” said Dr. Black, chief scientific officer at Gallant, in a statement. “I’m committed to developing therapies that dramatically improve the quality of life for dogs.”

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Mobile banking app Current raises $20M Series B, tops half a million users

Mobile banking app Current, which began as a teen debit card controlled by parents, expanded to offer personal checking accounts earlier this year. Now the company says it has grown to host more than 500,000 accounts on its service and has closed on $20 million in Series B funding to further its growth.

The round included new investors Wellington Management Company, Galaxy Digital EOS VC Fund and CMFG Ventures — the venture capital arm of the CUNA Mutual Group, a mutual insurance company serving credit unions and their 120 million members. Returning investors included QED Investors, Expa and Elizabeth Street Ventures.

The first version of Current, which debuted in 2017, was focused on giving parents a more modern way to dole out allowances and reward their kids for chores. But over time, the product became more like a real bank account for teens, culminating with the addition of routing and account numbers late last year. This allowed working teens to direct their paycheck to Current, as they could with a traditional bank.

This year, Current launched personal checking using the same core technology powering its teen banking product. The product includes features like faster direct deposits, gas hold crediting and merchant blocking without charging overdraft fees, hidden fees or requiring minimum balances.

While the teen checking account users have an average age of 15, the average age for the new personal checking account users is 27.

Although personal checking was only launched in late January, it already accounts for about half of Current’s accounts. It also benefits from conversions from Current’s teen users who turn 18 and want to graduate to their own banking app. (Around 98% of teens on Current move to the personal checking app when they come of age, the company noted.)

This puts Current in a more competitive market, where a number of banking apps are now targeting a younger, more mobile generation that has begun to favor modern, feature-rich apps over brick-and-mortar banks. Among its rivals are apps like Step, Cleo, N26, Chime, Simple, Stash and others.

Like many in this space, Current isn’t actually a bank — its banking services are provided by Choice Financial Group and Metropolitan Commercial Bank, which allows it to offer FDIC insurance up to $250,000. Instead, many of the banking apps focus instead on the feature set and user experience they can offer.

Both of Current’s products include a Visa co-branded debit card tied to the Current account. Along with the funding, Current and Visa are also announcing an expanded joint marketing partnership, which will help Current reach new customers.

“We believe everyone should have access to affordable financial services that improve the chances for a better life,” said Stuart Sopp, Current founder and CEO. “We have made this a reality through rebuilding financial infrastructure with the Current Core. It allows us to build more products that offer new ways to interact with money. Our rapid growth to half a million accounts serves as a testament to the ways our products and cost savings are bringing better financial outcomes and we anticipate bringing those benefits to over 1,000,000 customers by mid-2020.”

The company is planning to launch more features starting next year, including a cash-back system with brands and merchants in Q1, and further down the road, it’s considering things like a credit product and maybe Bitcoin investing. But this will require further education and careful attention to do well.

“It’s expensive to be poor — it really is,” he says. “If you don’t have much money, you’re paying 30% or 35% for your credit, whereas if you’re rich you’re paying 5%. So it’s like the world is inverted for you and it holds you down,” Sopp says. “So if we were to do [credit], we are going to do it right.”

In the near-term, the focus is on offering better budgeting tools and more ways for users to save money. This, Sopp argues, is what Current’s young users need most.

To date, Current has raised $45 million in funding.

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