Startups Weekly: How will we build the city of the future?

Editor’s note: Get this weekly recap of TechCrunch news that any startup can use by email every Saturday morning (7am PT), just subscribe here.

Commercial real estate, the traditional heart of most cities, may have lost its reason to exist in the last few months. The world is about to find out what the situation is as more locations start to reopen.

First up in our ongoing coverage of the topic, Connie Loizos caught up with a couple proptech investors this week for TechCrunch, who saw existing trends accelerating — with many medically focused additions.

Brendan Wallace of Fifth Wall is looking for more aggressive pickup of smart tech in general, along the lines of what you already see in some other countries. “He notes sensors that can determine how many people are in a room or pass through a turnstile. He points to facial recognition tech that can help keep points of physical contact to a minimum. He imagines that more companies might embrace robots to patrol buildings and, possibly, to clean them, too.”

Darren Bechtel of Brick and Mortar saw tech remaking the construction site, with growing practices like using large-scale pre-fabricated components: “If you’re limited by how many people can work in the field, and you have to put in controls for people not working on top of each other, the question becomes: how can you do the work in a more controlled environment, with a next-gen HVAC system [to purify the air] and markings on the floor?…. People are now saying, ‘How much can we prepare off-site?’”

Buildings are also going to be focused on health features, Connie wrote. “[B]oth Wallace and Bechtel mentioned advanced air purifiers and air handling units used to recondition and circulate air as part of a heating, ventilating and air-conditioning plan. Both say it will likely become a growing area of interest for building owners and developers.”

What about beyond the buildings? A few writers here put together some thoughts in a post for Extra Crunch. Here’s Danny Crichton’s view from Brooklyn:

Few of us can live in the dreary confines of a suburban enclave our entire workweek. And so I expect to see a revitalization of the classic Main Street clusters that once dotted towns across America as people appreciate the close proximity of amenities that they need throughout their day and remote work makes it possible to skip the commute to the central business district.

It’s not going to be a simple transition, of course. The built environment alone will probably take decades to fully transition. But the spirit of Jane Jacobs lives on and will move beyond the downtown core neighborhoods she observed to spread to medium and perhaps even small towns across the country and throughout the world.

If you want more on the topic, check out our recent investor survey with six other top proptech investors from late March (for subscribers).

Just want to settle down at home and get to work? Check out Darrell Etherington’s TechCrunch guide to setting up a pro-grade videoconference studio.

The $100M ARR club continues to grow, despite everything

When Alex Wilhelm rejoined TechCrunch late last year, he kicked things off with a list of companies that he called “the $100M ARR club” to signify unicorns that were also generating a lot of revenue. It was a clever way of organizing which of the hundreds of highly valued companies heading towards IPOs were most set up for success, and our readers agreed.

But, with entire market categories whipsawed by the pandemic, it has been hard to find companies willing to share numbers lately. He still found a few, as he wrote up for Extra Crunch this week: ActiveCampaign, Recorded Future and ON24. Here’s a vignette from the CEO of ActiveCampaign:

While we had the CEO’s attention, TechCrunch wanted to know if ActiveCampaign was taking incoming fire from COVID-19 and its related economic and labor disruptions. As some other SMB-focused software companies have told us, the answer is no. Here’s [Jason] VandeBoom:

We anticipate continued growth in 2020 and are already seeing further acceleration to support this. The past four months have been the best in company history and we’ve seen monthly trials double in that timeframe and new customer acquisition numbers at 4500, 5500, 6000 and 7000 respectively from January to April.

He did hedge those results a little, adding that while his firm has “seen some acceleration from COVID-19 and the digital transformation that it is inspiring,” the CEO is more convinced that “the need for customer experience is what is fueling the majority of this growth.”

This week in China trade news….

The already basic trade agreement between the Trump administration and the Chinese government from last year looks ready to blow up; the administration banned selling more tech to Huawei; TSMC plans to open a factory in Arizona following urging from the US government; Foxconn profits crashed… Danny Crichton has a clear takeaway on TechCrunch for startups about the latest headlines:

[T]he world of semiconductors, of internet infrastructure, of the tech ties that have bound the U.S. and China together for decades — they are frayed and are almost gone. It’s a new era in supply chains and trade, and an open world for new approaches to these huge existing industries.

If your company is not already planning for a more chaotic, multi-polar world than what most of us can remember living through, it may already be too late.

(Photo by CHRISTOPHE ARCHAMBAULT/AFP via Getty Images)

Investor survey: hospitals to increase tech focus after pandemic

Sarah Buhr talked to top investors in the healthcare B2B and infrastructure businesses for one of our investor surveys this week on Extra Crunch. They generally seemed to agree that the pandemic was going to push the system wholesale towards better technology. Here’s Bilal Zuberi of Lux Capital:

While a lot of our healthcare infrastructure will take a little bit of time recovering from the stress COVID placed on it, we anticipate this to provide a push to the system to adopt new technologies that enable distributed health, build resiliency in our delivery networks and deploy data-enabled healthcare. Hospital balance sheets might struggle in the short term to buy new technologies, but payers as well as large businesses might participate in infrastructure development and deployment in a bigger way. We anticipate selling to hospitals to be difficult in the short term, as they try to recover from the revenue shortfall they experienced during COVID-19, but will generally emerge more interested in adopting new technologies, digital and remote health solutions and automation in various functions. Needless to say, a wide-scale digital transformation of our healthcare industry is underway, and there is no looking back.

Don’t miss our other survey this week, on how the mobility investors are viewing the pandemic.

Protecting your equity as a startup employee

Wouter Witvoet of fintech startup SecFi wrote a guest post for TechCrunch going over some key points for anyone working at a startup right now (or recently). As an occasional startup founder and/or employee myself, I’d like to recommend this one for special consideration: “Negotiate for equity during a pay cut or furlough.”

Startups typically offer equity as a means of deferred compensation and as a way to incentivize employees to own a piece of the company they are building. The compensation is deferred as most startups are cash-strapped and cannot afford to pay you what a larger company may be able to.

If your company is now asking you to take a pay cut, or even take no pay during this time, you should consider asking for additional equity to make up for the lost compensation. While not all companies may be amenable to offering more equity, there is no cash outlay from the company’s standpoint, so it’s an efficient way for your company to compensate you for your sacrifice while preserving their cash.

In addition, offering more equity shows a commitment from management to their employees during this difficult time. It may be the win-win scenario for your company and yourself in the long-run so it’s worth having the conversation with management to discuss if this is available for you.

At first it seems weird when you consider typical venture dynamics. The founders have probably already lost leverage against the company’s investors. These investors have probably already lost leverage against their LPs. So nobody is naturally included to give up even more. And the employees were already last in line on the cap table and first to go, so why should founders do anything different?

Tactically, the best employees will be attracted go work at bigger more stable companies as the pandemic recession stretches on — and you might not have the cash to afford the effort to rehire. Strategically, now is the time to build the esprit de corp that will carry your company forward into better times… a few extra basis points for the team now could help deliver a priceless return.  

Across the week

TechCrunch

COVID-19 shows we need Universal Basic Internet now

AngelList wants to improve comparing VC fund performance with new metrics and calculator

Seven viral futures

Where to shop online that isn’t Amazon, Target or Walmart

Extra Crunch

4 edtech CEOs peer into the industry’s future

Sequoia’s Roelof Botha is more optimistic about startups today than he was a year ago

These best practices maximize the value of your online events

Fintech startups amass war chests for the economic downturn

Around TechCrunch

Give the gift of Extra Crunch membership to anyone

Extra Crunch Live: Join Alexia and Niko Bonatsos for a Q&A May 19th at 2 pm EDT/11 am PDT

Extra Crunch Live: Join Revolution’s Steve Case and Clara Sieg on May 21 at 3pm ET/12pm PT

#EquityPod

From Alex:

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

Are you a regular Equity listener? Take our survey here! We talk about it on the show.

From home once again this week, Danny, Natasha, Alex and Chris got together to pull the show together. But unlike last week’s episode (catch up here if you are behind), this week’s show features a game that actually worked. It’s at the end, as you’ll see.

But before that piece of the puzzle, there was a bunch of news to go over. We had to leave SaaS valuations, the Liftoff List, Brex and FalconX on the floor, but there was still so much good stuff to cover:

• Slice raised $43 million from KKR, making us all rather hungry — and curious. Where does Slice fit into the food-delivery market, and does its restaurant-friendly model give it enough room to grow revenue so that its new valuation makes sense?
• The Uber Eats-Grubhub deal was an unavoidable topic this week, given that it has the chance to remake the food delivery landscape. What room would be left in the market for Postmates? And would it pass regulatory scrutiny? We’re curious.
• Sticking to the on-demand theme, Instacart has grown bonkers-quick in the last few months, even making some money in the process. We’re impressed.
• It’s not the only thing out there growing like hell — Shopify is also putting up insane numbers, as reflected in its share price. TechCrunch took a look back through its history the other day.
• The secondary markets saw some consolidation this week, which brought back some fond memories.
• Quizlet raised $30 million at a $1 billion valuation, causing some consternation among the hosts. And Vise raised a more modest $14.5 million in a round that Danny covered.

Then we played our game. Please hold us to account. And if you have listened to the show for a while, take our survey! It’s right after this next sentence.

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

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The real threat of fake voices in a time of crisis

Jinyan Zang Contributor

Jinyan Zang is a researcher at Data Privacy Lab and a Ph.D. candidate in Government at Harvard University.

Latanya Sweeney Contributor

Latanya Sweeney is a professor of government and technology in residence at Harvard University's Department of Government, editor-in-chief of Technology Science and the founding director of the Technology Science Initiative and the Data Privacy Lab at the Institute for Quantitative Social Science at Harvard.

Max Weiss Contributor

Max Weiss is a senior at Harvard University and the student who implemented the Deepfake Text experiment.

As federal agencies take increasingly stringent actions to try to limit the spread of the novel coronavirus pandemic within the U.S., how can individual Americans and U.S. companies affected by these rules weigh in with their opinions and experiences? Because many of the new rules, such as travel restrictions and increased surveillance, require expansions of federal power beyond normal circumstances, our laws require the federal government to post these rules publicly and allow the public to contribute their comments to the proposed rules online. But are federal public comment websites — a vital institution for American democracy — secure in this time of crisis? Or are they vulnerable to bot attack?

In December 2019, we published a new study to see firsthand just how vulnerable the public comment process is to an automated attack. Using publicly available artificial intelligence (AI) methods, we successfully generated 1,001 comments of deepfake text, computer-generated text that closely mimics human speech, and submitted them to the Centers for Medicare & Medicaid Services’ (CMS) website for a proposed federal rule that would institute mandatory work reporting requirements for citizens on Medicaid in Idaho.

The comments we produced using deepfake text constituted over 55% of the 1,810 total comments submitted during the federal public comment period. In a follow-up study, we asked people to identify whether comments were from a bot or a human. Respondents were only correct half of the time — the same probability as random guessing.

Image Credits: Zang/Weiss/Sweeney

The example above is deepfake text generated by the bot that all survey respondents thought was from a human.

We ultimately informed CMS of our deepfake comments and withdrew them from the public record. But a malicious attacker would likely not do the same.

Previous large-scale fake comment attacks on federal websites have occurred, such as the 2017 attack on the FCC website regarding the proposed rule to end net neutrality regulations.

During the net neutrality comment period, firms hired by industry group Broadband for America used bots to create comments expressing support for the repeal of net neutrality. They then submitted millions of comments, sometimes even using the stolen identities of deceased voters and the names of fictional characters, to distort the appearance of public opinion.

A retroactive text analysis of the comments found that 96-97% of the more than 22 million comments on the FCC’s proposal to repeal net neutrality were likely coordinated bot campaigns. These campaigns used relatively unsophisticated and conspicuous search-and-replace methods — easily detectable even on this mass scale. But even after investigations revealed the comments were fraudulent and made using simple search-and-replace-like computer techniques, the FCC still accepted them as part of the public comment process.

Even these relatively unsophisticated campaigns were able to affect a federal policy outcome. However, our demonstration of the threat from bots submitting deepfake text shows that future attacks can be far more sophisticated and much harder to detect.

The laws and politics of public comments

Let’s be clear: The ability to communicate our needs and have them considered is the cornerstone of the democratic model. As enshrined in the Constitution and defended fiercely by civil liberties organizations, each American is guaranteed a role in participating in government through voting, through self-expression and through dissent.

Image Credits: Zang/Weiss/Sweeney

When it comes to new rules from federal agencies that can have sweeping impacts across America, public comment periods are the legally required method to allow members of the public, advocacy groups and corporations that would be most affected by proposed rules to express their concerns to the agency and require the agency to consider these comments before they decide on the final version of the rule. This requirement for public comments has been in place since the passage of the Administrative Procedure Act of 1946. In 2002, the e-Government Act required the federal government to create an online tool to receive public comments. Over the years, there have been multiple court rulings requiring the federal agency to demonstrate that they actually examined the submitted comments and publish any analysis of relevant materials and justification of decisions made in light of public comments [see Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U. S. 402, 416 (1971); Home Box Office, supra, 567 F.2d at 36 (1977), Thompson v. Clark, 741 F. 2d 401, 408 (CADC 1984)].

In fact, we only had a public comment website from CMS to test for vulnerability to deepfake text submissions in our study, because in June 2019, the U.S. Supreme Court ruled in a 7-1 decision that CMS could not skip the public comment requirements of the Administrative Procedure Act in reviewing proposals from state governments to add work reporting requirements to Medicaid eligibility rules within their state.

The impact of public comments on the final rule by a federal agency can be substantial based on political science research. For example, in 2018, Harvard University researchers found that banks that commented on Dodd-Frank-related rules by the Federal Reserve obtained $7 billion in excess returns compared to non-participants. When they examined the submitted comments to the “Volcker Rule” and the debit card interchange rule, they found significant influence from submitted comments by different banks during the “sausage-making process” from the initial proposed rule to the final rule.

Beyond commenting directly using their official corporate names, we’ve also seen how an industry group, Broadband for America, in 2017 would submit millions of fake comments in support of the FCC’s rule to end net neutrality in order to create the false perception of broad political support for the FCC’s rule amongst the American public.

Technology solutions to deepfake text on public comments

While our study highlights the threat of deepfake text to disrupt public comment websites, this doesn’t mean we should end this long-standing institution of American democracy, but rather we need to identify how technology can be used for innovative solutions that accepts public comments from real humans while rejecting deepfake text from bots.

There are two stages in the public comment process — (1) comment submission and (2) comment acceptance — where technology can be used as potential solutions.

In the first stage of comment submission, technology can be used to prevent bots from submitting deepfake comments in the first place; thus raising the cost for an attacker to need to recruit large numbers of humans instead. One technological solution that many are already familiar with are the CAPTCHA boxes that we see at the bottom of internet forms that ask us to identify a word — either visually or audibly — before being able to click submit. CAPTCHAs provide an extra step that makes the submission process increasingly difficult for a bot. While these tools can be improved for accessibility for disabled individuals, they would be a step in the right direction.

However, CAPTCHAs would not prevent an attacker willing to pay for low-cost labor abroad to solve any CAPTCHA tests in order to submit deepfake comments. One way to get around that may be to require strict identification to be provided along with every submission, but that would remove the possibility for anonymous comments that are currently accepted by agencies such as CMS and the Food and Drug Administration (FDA). Anonymous comments serve as a method of privacy protection for individuals who may be significantly affected by a proposed rule on a sensitive topic such as healthcare without needing to disclose their identity. Thus, the technological challenge would be to build a system that can separate the user authentication step from the comment submission step so only authenticated individuals can submit a comment anonymously.

Finally, in the second stage of comment acceptance, better technology can be used to distinguish between deepfake text and human submissions. While our study found that our sample of over 100 people surveyed were not able to identify the deepfake text examples, more sophisticated spam detection algorithms in the future may be more successful. As machine learning methods advance over time, we may see an arms race between deepfake text generation and deepfake text identification algorithms.

The challenge today

While future technologies may offer more comprehensive solutions, the threat of deepfake text to our American democracy is real and present today. Thus, we recommend that all federal public comment websites adopt state-of-the-art CAPTCHAs as an interim measure of security, a position that is also supported by the 2019 U.S. Senate Subcommittee on Investigations’ Report on Abuses of the Federal Notice-and-Comment Rulemaking Process.

In order to develop more robust future technological solutions, we will need to build a collaborative effort between the government, researchers and our innovators in the private sector. That’s why we at Harvard University have joined the Public Interest Technology University Network along with 20 other education institutions, New America, the Ford Foundation and the Hewlett Foundation. Collectively, we are dedicated to helping inspire a new generation of civic-minded technologists and policy leaders. Through curriculum, research and experiential learning programs, we hope to build the field of public interest technology and a future where technology is made and regulated with the public in mind from the beginning.

While COVID-19 has disrupted many parts of American society, it hasn’t stopped federal agencies under the Trump administration from continuing to propose new deregulatory rules that can have long-lasting legacies that will be felt long after the current pandemic has ended. For example, on March 18, 2020, the Environmental Protection Agency (EPA) proposed new rules about limiting which research studies can be used to support EPA regulations, which have received over 610,000 comments as of April 6, 2020. On April 2, 2020, the Department of Education proposed new rules for permanently relaxing regulations for online education and distance learning. On February 19, 2020, the FCC re-opened public comments on its net neutrality rules, which in 2017 saw 22 million comments submitted by bots, after a federal court ruled that the FCC ignored how ending net neutrality would affect public safety and cellphone access programs for low-income Americans.

Federal public comment websites offer the only way for the American public and organizations to express their concerns to the federal agency before the final rules are determined. We must adopt better technological defenses to ensure that deepfake text doesn’t further threaten American democracy during a time of crisis.

from Social – TechCrunch https://ift.tt/3dSjX6m The real threat of fake voices in a time of crisis Walter Thompson https://ift.tt/2zGGhks
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This Week in Apps: Houseparty battles Messenger, Telegram drops crypto plans, Instagram Lite is gone

{rss:content:encoded} This Week in Apps: Houseparty battles Messenger, Telegram drops crypto plans, Instagram Lite is gone https://ift.tt/2ybymLG https://ift.tt/2TcLvLM May 16, 2020 at 05:06PM

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending 3 hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week we’re continuing to look at how the coronavirus outbreak is impacting the world of mobile applications, including the latest news about COVID-19 apps, Facebook and Houseparty’s battle to dominate the online hangout, the game that everyone’s playing during quarantine, and more. We also look at the new allegations against TikTok, the demise of a popular “Lite” app, new apps offering parental controls, Telegram killing its crypto plans and many other stories, including a hefty load of funding and M&A.

Headlines

Contact tracing and COVID-19 apps in the news 

• Global: WHO readies its coronavirus app for symptom-checking and possibly contact tracing. A WHO official told Reuters on Friday the new app will ask people about their symptoms and offer guidance on whether they may have COVID-19. Information on testing will be personalized to the user’s country. The organization is considering adding a Bluetooth-based, contact-tracing feature, too. A version of the app will launch globally, but individual countries will be able to use the underlying technology and add features to release their own versions. Engineers from Google and Microsoft have volunteered their time over the past few weeks to develop the app, which is available open-source on GitHub.
• U.S.: Apple’s COVID-19 app, developed in partnership with the CDC, FEMA and the White House, received its first major update since its March debut. The new version includes recommendations for healthcare workers to align with CDC guidelines, best practices for quarantining if you’ve been exposed to COVID-19 and new information for pregnancy and newborns.
• India: New Delhi’s contact-tracing app, Aarogya Setu, has reached 100 million users out of India’s total 450 million smartphone owners in 41 days after its release, despite privacy concerns. The app helps users self-assess if they caught COVID-19 by answering a series of questions and will alert them if they came into contact with someone who’s infected. The app has come under fire for how it stores user location data and logs the details for those reporting symptoms. The app is required to use Indian railways, which has boosted adoption.
• Iceland: Iceland has one of the most-downloaded contact-tracing apps, with 38% of its population using it. But despite this, the country said it has not been a “game-changer” in terms of tracking the virus and only worked well when coupled with manual contact tracing — meaning phone calls that asked who someone had been in contact with. In addition, the low download rate indicates it may be difficult to get people to use these apps when they launch in larger markets.

Consumer advocacy groups say TikTok is still violating COPPA

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This Week in Apps: Houseparty battles Messenger, Telegram drops crypto plans, Instagram Lite is gone

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending 3 hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week we’re continuing to look at how the coronavirus outbreak is impacting the world of mobile applications, including the latest news about COVID-19 apps, Facebook and Houseparty’s battle to dominate the online hangout, the game that everyone’s playing during quarantine, and more. We also look at the new allegations against TikTok, the demise of a popular “Lite” app, new apps offering parental controls, Telegram killing its crypto plans and many other stories, including a hefty load of funding and M&A.

Headlines

Contact tracing and COVID-19 apps in the news 

• Global: WHO readies its coronavirus app for symptom-checking and possibly contact tracing. A WHO official told Reuters on Friday the new app will ask people about their symptoms and offer guidance on whether they may have COVID-19. Information on testing will be personalized to the user’s country. The organization is considering adding a Bluetooth-based, contact-tracing feature, too. A version of the app will launch globally, but individual countries will be able to use the underlying technology and add features to release their own versions. Engineers from Google and Microsoft have volunteered their time over the past few weeks to develop the app, which is available open-source on GitHub.
• U.S.: Apple’s COVID-19 app, developed in partnership with the CDC, FEMA and the White House, received its first major update since its March debut. The new version includes recommendations for healthcare workers to align with CDC guidelines, best practices for quarantining if you’ve been exposed to COVID-19 and new information for pregnancy and newborns.
• India: New Delhi’s contact-tracing app, Aarogya Setu, has reached 100 million users out of India’s total 450 million smartphone owners in 41 days after its release, despite privacy concerns. The app helps users self-assess if they caught COVID-19 by answering a series of questions and will alert them if they came into contact with someone who’s infected. The app has come under fire for how it stores user location data and logs the details for those reporting symptoms. The app is required to use Indian railways, which has boosted adoption.
• Iceland: Iceland has one of the most-downloaded contact-tracing apps, with 38% of its population using it. But despite this, the country said it has not been a “game-changer” in terms of tracking the virus and only worked well when coupled with manual contact tracing — meaning phone calls that asked who someone had been in contact with. In addition, the low download rate indicates it may be difficult to get people to use these apps when they launch in larger markets.

Consumer advocacy groups say TikTok is still violating COPPA

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(Formerly Augean) Burro is giving a helping hand to field workers

Rather than focusing on robots that will replace human workers outright, the company has created a semi-autonomous robotic cart that saves pickers a long trip.

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Facebook to acquire Giphy in a deal reportedly worth $400 million

Facebook will acquire Giphy, the web-based animated gif search engine and platform provider, Facebook confirmed today, in a deal worth around $400 million, according to a report by Axios. Facebook said it isn’t disclosing terms of the deal. Giphy has grown to be a central source for shareable, high-engagement content, and its animated response gifs are available across Facebook’s platforms, as well as through other social apps and services on the web.

Most notably, Giphy provides built-in search and sticker functions for Facebook’s Instagram, and it will continue to operate in that capacity, becoming a part of the Instagram team. Giphy will also be available to Facebook’s other apps through existing and additional integrations. People will still be able to upload their own GIFs, and Facebook intends to continue to operate Giphy under its own branding and offer integration to outside developers.

Facebook says it will invest in additional tech development for Giphy, as well as build out new relationships for it on both the content side and the endpoint developer side. The company says that fully 50% of traffic that Giphy receives already comes from Facebook’s apps, including Instagram, Messenger, the FB app itself and WhatsApp.

Giphy was founded in 2013, and was originally simply a search engine for gifs. The website’s first major product expansion was an extension that allowed sharing via Facebook, introduced later in its founding year, and it quickly added Twitter as a second integration. According to the most recent data from Crunchbase, Giphy had raised $150.9 million across five rounds, backed by funders including DFJ Growth, Lightspeed, Betaworks, GV, Lerer Hippeau and more.

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Daily Crunch: Facebook is acquiring Giphy

Facebook acquires a popular GIF search engine, video game sales see major growth and Sorrentino reports promising results for a COVID-19 treatment.

Here’s your Daily Crunch for May 15, 2020.

1. Facebook to acquire Giphy in a deal reportedly worth $400 million

Facebook will acquire Giphy, the web-based animated GIF search engine and platform provider. The company confirmed the deal but isn’t disclosing the terms; Axios reports that it’s worth around $400 million.

Giphy has grown to be a central source for shareable, high-engagement content, and its animated response GIFs are available across Facebook’s platforms, as well as through other social apps and services. Most notably, Giphy provides built-in search and sticker functions for Facebook’s Instagram, and it will continue to operate in that capacity.

2. US video game sales have record quarter, as consumers stay at home

New numbers from NPD confirm what we’ve known for a while: The first quarter of 2020 was a very good one for gaming companies. The new report notes that sales hit a record $10.86 billion in the U.S. between January and March of this year, marking a 9% increase over a year prior.

3. Sorrento finds a coronavirus antibody that blocks viral infection 100% in preclinical lab experiments

Therapeutics company Sorrento has made what it says could be a breakthrough in potential treatment of SARS-CoV-2, the virus that leads to COVID-19. The company released details of its preclinical research on Friday, announcing that it has found an antibody that provides “100% inhibition of SARS-CoV-2 virus infection of healthy cells after four days incubation.”

4. Indian food delivery startup Zomato cuts 13% of workforce

The 11-year-old firm did not disclose the exact number of people it was letting go, but the number is above 500. A Zomato spokesperson told TechCrunch that the startup employs about 4,000 people and the layoff impacts its workforce globally.

5. Big VCs stacked billions in Q1 while smaller firms saw their haul shrink

New data out today details how U.S.-based VCs fared in Q1 2020, giving us a window into how flush the financial class of startup land was as it headed into the COVID-19 era. The short answer is that big funds raised lots of cash, while smaller funds appear to have put in a somewhat lackluster quarter. (Extra Crunch membership required.)

6. Why did Apple buy NextVR?

At face value, this acquisition seems a little strange for Apple — the company has been pushing full-throttle on mobile AR, largely eschewing public activity or interest in the VR world. But virtual reality might feel like a safer investment at the moment.

7. WeWork and SoftBank unveil the first 14 startups in their Emerge accelerator for underrepresented founders

It’s an equity-free, eight-week program that includes workshops, access to mentors from SoftBank and the WeWork community and sessions with SoftBank executives. It all culminates in a showcase event for investors and SoftBank partners.

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.

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Some investors turn to cutting fully remote checks while sheltering in place

By March 16, founder Janine Yancey was tired of playing the waiting game. After watching the stock market take yet another unprecedented nosedive due to coronavirus, she called up a potential investor.

“If this isn’t going to happen, let’s call it now,” Yancey said, referring to the close of her Series A round, the first capital her culture tech company, Emtrain, would have accepted in 14 years. “At that point, I put my nose to the grindstone; I didn’t have a lot of bandwidth in engaging in conversation that wasn’t going anywhere.”

She had the conversation on Monday, and the deal closed on Friday. “I remember thinking, ‘this is the only deal that is happening this month,’ ” she recalled.

As lockdowns extend to prevent the spread of the coronavirus, investors and startups are searching for new ways to connect with each other. At this moment, deals are happening between screens instead of over drinks at The Battery or coffee at The Creamery. A number of investors have already cut fully remote checks, saying it impacts everything from the due diligence process, to appetite, to who gets to access capital in the first place.

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Hypnosis for health? Investors have placed a $1.1 million bet on Mindset Health that it can work

Chris and Alex Naoumidis came to hypnotherapy through dresses.

As The New York Times reported last year, the two brothers initially started their careers as startup entrepreneurs with a peer-to-peer dress-sharing app for women. The Australian natives were overcome with doubt about their ability to succeed in startupland; when apps didn’t work, their father suggested they try hypnotherapy.

Those sessions led the brothers to launch Mindset Health and raise $1.1 million in funding from investors including Fifty Years, YC, Gelt VC, Giant Leap VC and angel investors across the U.S. and Australia.

It’s a lot of backers for a small round that closed in November of 2019, but it’s indicative of the kind of bets that investors are willing to take in the mental health space these days.

A whole slew of apps have come to market to treat the mental disorders that seemingly accompany living in the modern world. There are companies that facilitate matching with therapists, companies that provide mental wellness tools in the form of cognitive behavioral therapies, billion-dollar companies that offer mindfulness and meditation and companies that offer hypnotherapy.

The hypnotherapy sessions that Alex and his brother took gave them an idea. “Could we do this similar to meditation and bring this to market in a way that would be helpful?” Alex Naoumidis told me.

Meditation is a multi-million-dollar business, with apps like Calm and Headspace raking in millions of dollars in venture financing and giving them billions of dollars in perceived valuation.

Alex Naoumidis stresses that the app isn’t therapy — the company can’t pitch it that way under current regulations. “It’s more of a self-management tool,” he said. “Helping people with anxiety or [irritable bowel syndrome] to manage those symptoms at home to complement the work they’re doing.”

The goal, according to Alex Naoumidis, is to have a number of apps under the Mindset umbrella that deal with specific conditions. While it began as a more general mental wellness app, the company now has Nerva, its IBS-focused product, alongside its general mental wellness Mindset toolkit.

Nerva’s not a cheap subscription. There’s an upfront payment of $99 and then an $88 three-month subscription. The Mindset subscription service costs $11 (priced to sell in the COVID-19 era) down from $64 when the Times’ writer, Nellie Bowles first tried the product.

Here’s how she described it:

As a first step, the app suggested that I text a friend or tweet to the public the quote “He who conquers himself is the mightiest warrior.” For the next 19 minutes, a soft male voice told me that my mind can slow down. It can convert concerns to decisions. The process can even become second nature. And if it does, I can be a person of action. A person of action.

I did another module, Increase Productivity, which is voiced by a peppy younger man — a start-up bro right in my ear asking me to repeat after him: “I give myself permission to know what I want to be and what I want to do and do it efficiently.”

These mental health apps, or any app, supplement or business that’s promoting wellness need to have some clinical studies to back up their claims, and Mindset is working with doctors on the products. The initial Mindset app was designed in concert with Dr. Michael Japko, while the IBS app was designed with Dr. Simone Peters.

Both receive revenue share with the company for their work developing the course of therapies.

The company’s co-founder says that they’re unscientifically seeing successes come from the service. People self-report their symptoms at the start and at the end of the program. For people who complete the program, 90% have reduced symptoms (I’m not sure what percentage of signups complete the program).

“Our idea is we want to help researchers who develop these amazing programs deliver them digitally,” said Alex Naoumidis. “We worked with world-leading researchers to make it more accessible.”

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Building and investing in the ‘human needs economy’

Heather Hartnett Contributor

Heather Hartnett is general partner and CEO of Human Ventures, an early-stage venture fund and startup studio in New York City.

The entrepreneurial and investor focus of the last decade has largely been centered on increased convenience and consumerism, and has encouraged companies to prioritize scaling, with little care for how it affects stakeholders, employees, consumers and even the environment. We have been talking about a shift for some time, but now more than ever, it has become obvious that companies have to take humanity into account as they build and scale in this new paradigm.

The last 10 years of startup growth have been about building and investing in these “nice to haves.” We believe the next 10 years will be focused on building and investing in “need to haves,” and the greatest business opportunities will be found in what we at Human Ventures call The Human Needs Economy — products and services that have material impact on basic needs and livelihoods and address a core draw on a consumer’s time, money or energy. For 2020, we are focusing on solving problems within three categories that we believe will have a huge impact on the Human Needs Economy: health and wellness, the future of work and community.

As the first category of the Human Needs Economy, we outline the opportunity within health and wellness and specific areas in which we are excited to build and invest.

Health and wellness

Looking back at a decade focused on scaling nice to haves, it shouldn’t come as a surprise that we are living with unaddressed health and wellness issues. And the statistics are staggering. In 2019, an estimated 47.6 million adults (19% of the country) had a mental illness, but only 43% received any kind of mental health care. When it comes to sexual and reproductive health, whole populations of minorities and underrepresented groups receive subpar care and face stigma around health issues. And we’re on track for a shortage of 120,000 doctors in the U.S. by 2030, a signal that these issues are set to get worse. (The United States’ response to the COVID-19 pandemic has highlighted how dangerous this is in a crisis.)

These challenges and others represent what we call the wellness deficit — the sum of the human needs that have gone unmet in the areas of health and wellness. And even though it may seem that every block has a new boutique fitness studio popping up or everyone you know has the latest wearable to measure their sleep, we believe we are just at the starting line when it comes to making up ground and building great businesses that tackle these issues.

Below are 10 areas that are poised to make up this wellness deficit:

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Big VCs stacked billions in Q1 while smaller firms saw their haul shrink

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

After spending perhaps more time than we should have recently trying to figure out what’s going on with the public markets, let’s return to the private markets this morning, focusing in on venture capital itself. New data out today details how U.S.-based VCs fared in Q1 2020, giving us a window into how flush the financial class of startup land was heading into the COVID-19 era.

The short answer is that big funds raised lots of cash, while smaller funds appear to have put in a somewhat lackluster quarter.

That big funds performed well in Q1 shouldn’t surprise. We’ve seen NEA stack $3.6 billion in March and Founders Fund raised $3 billion for its own investing work earlier in the quarter, to pick two examples TechCrunch covered.

The impact of these mega-raises, according to a report from Prequin and First Republic Bank, was to push up the total amount of capital raised by American venture capital firms in the quarter, while the decline in the number of funds that raised $50 million or less led to a slim number of total funds raised. It’s hard to call a surge in dry powder bearish, but the fall-off on smaller funds could limit seed capital in the future.

Notably, there have been warning signs since at least 2019 that seed volume was slowing; recent data from the U.S. underscores the trend. So what we’re seeing this morning in data-form is a summation of what we’ve previously reported in a more piecemeal fashion.

Let’s pick over the data to see what we can learn about how much spare capital the venture classes are sitting on today.

The rich get richer

The whole report is worth reading if you have time. Aside from the data concerning how much money VCs are raising themselves, it includes several interesting bits of information. For example, there were just 960 venture deals closed in the U.S. in Q1 — a pace that would make 2020 the slowest year since 2009 if it held steady.

Per the listed data, 83 U.S.-based venture capitalists closed (“held a final close”) a fund in Q1 2020. This was off about 24% from the Q1 2019 result of 109. However, while the number of funds raised was lackluster, they made up for it in dollar-scale. According to Preqin and First Republic Bank, the “funds that closed raised $27 [billion], a substantial total representing over half of the capital raised in 2019 ($50 [billion]).”

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Alternative assets are becoming mainstream

Anthony Zhang Contributor

Anthony is co-founder and CEO of Vinovest, a platform for investing in fine wine. He has previously founded and sold two companies (EnvoyNow & Know Your VC), and is also a Thiel Fellow.

The way we invest is changing. Technology makes investing easy and more accessible than ever. Meanwhile, Millennials and Gen Z are gravitating away from public equity investments.

These changes have led to the rise of alternative assets. People are increasingly looking for new and innovative ways to approach investing. But are alternative assets truly the new frontier of modern investing?

What is an alternative asset?

As the name suggests, alternative assets are an alternative to traditional assets, like stock, bonds and cash. The term usually describes unconventional investments. That can include anything from a Honus Wagner baseball card to bottles of fine wine. However, it can also apply to more familiar investments, like real estate and private mortgages.

Simply put: alternative assets are the things that probably wouldn’t come up when you meet with your financial advisor. They are not easily categorizable, which makes them more difficult to manage. Often, people invest in alternative assets because of a passion for the asset rather than the immediate ROI.

What makes alternative assets an attractive investment?

Investors will go wherever there is money to be made. That includes alternative assets. In addition to higher potential returns, alternative assets have distinct characteristics from traditional assets. Here are a couple of factors to consider when looking at alternative assets:

Portfolio Diversification

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Building and investing in the ‘human needs economy’

Heather Hartnett Contributor

Heather Hartnett is general partner and CEO of Human Ventures, an early-stage venture fund and startup studio in New York City.

The entrepreneurial and investor focus of the last decade has largely been centered on increased convenience and consumerism, and has encouraged companies to prioritize scaling, with little care for how it affects stakeholders, employees, consumers and even the environment. We have been talking about a shift for some time, but now more than ever, it has become obvious that companies have to take humanity into account as they build and scale in this new paradigm.

The last 10 years of startup growth have been about building and investing in these “nice to haves.” We believe the next 10 years will be focused on building and investing in “need to haves,” and the greatest business opportunities will be found in what we at Human Ventures call The Human Needs Economy — products and services that have material impact on basic needs and livelihoods and address a core draw on a consumer’s time, money or energy. For 2020, we are focusing on solving problems within three categories that we believe will have a huge impact on the Human Needs Economy: health and wellness, the future of work and community.

As the first category of the Human Needs Economy, we outline the opportunity within health and wellness and specific areas in which we are excited to build and invest.

Health and wellness

Looking back at a decade focused on scaling nice to haves, it shouldn’t come as a surprise that we are living with unaddressed health and wellness issues. And the statistics are staggering. In 2019, an estimated 47.6 million adults (19% of the country) had a mental illness, but only 43% received any kind of mental health care. When it comes to sexual and reproductive health, whole populations of minorities and underrepresented groups receive subpar care and face stigma around health issues. And we’re on track for a shortage of 120,000 doctors in the U.S. by 2030, a signal that these issues are set to get worse. (The United States’ response to the COVID-19 pandemic has highlighted how dangerous this is in a crisis.)

These challenges and others represent what we call the wellness deficit — the sum of the human needs that have gone unmet in the areas of health and wellness. And even though it may seem that every block has a new boutique fitness studio popping up or everyone you know has the latest wearable to measure their sleep, we believe we are just at the starting line when it comes to making up ground and building great businesses that tackle these issues.

Below are 10 areas that are poised to make up this wellness deficit:

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What’s up with tiny checks at giant valuations?

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

Are you a regular Equity listener? Take our survey here! We talk about it on the show, and it’s embedded below in case you don’t want to click a link.

From home once again this week, Danny, Natasha, Alex, and Chris got together to pull the show together. But unlike last week’s episode (catch up here if you are behind), this week’s show features a game that actually worked. It’s at the end, as you’ll see.

But before that piece of the puzzle, there was a bunch of news to go over. We had to leave SaaS valuations, the Liftoff List, Brex, and FalconX on the floor, but there was still so much good stuff to cover:

• Slice raised $43 million from KKR, making us all rather hungry — and curious. Where does Slice fit into the food-delivery market, and does its restaurant-friendly model give it enough room to grow revenue so that its new valuation makes sense?
• The Uber Eats-Grubhub deal was an unavoidable topic this week, given that it has the chance to remake the food delivery landscape. What room would be left in the market for Postmates? And would it pass regulatory scrutiny? We’re curious.
• Sticking to the on-demand theme, Instacart has grown bonkers-quick in the last few months, even making some money in the process. We’re impressed.
• It’s not the only thing out there growing like hell — Shopify is also putting up insane numbers, as reflected in its share price. TechCrunch took a look back through its history the other day.
• The secondary markets saw some consolidation this week, which brought back some fond memories.
• Quizlet raised $30 million at a $4 billion valuation, causing some consternation amongst the hosts. And Vise raised a more modest $14.5 million in a round that Danny covered.

Then we played our game. Please hold us to account. And if you have listened to the show for a while, take our survey! It’s right after this next sentence.

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

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Singapore-based Intellect wants to lower barriers to mental health support in Asia

Taking care of your emotional wellbeing is as important as physical health, but in Asia, the topic is often stigmatized. Intellect, a Singapore-based startup, wants to make the idea of mental health more approachable with an app that offers self-guided exercises based on cognitive behavorial therapy techniques.

The company develops consumer and enterprise versions of the app (for employers to offer as a benefit) and now has users in countries including Singapore, Indonesia, India and China.

Since its beta launch earlier this year, co-founder and CEO Theodoric Chew says Intellect has signed up about 10,000 users, as well as 10 companies ranging in size from startups to large corporations. The startup plans to launch Mandarin and Bahasa Indonesian versions, and is currently working with researchers to develop localized versions of its exercises, which include guided journaling, behavioral exercises and “rescue sessions” with short audio clips about topics like stress, low self-esteem, emotional burnout and sleep issues.

The company has raised a pre-seed round that included SEEDS Capital, the investment arm of Enterprise Singapore, a government agency that supports entrepreneurship.

In the United States and Europe, there is a growing roster of self-help apps that teach users coping strategies for common mental health issues, including Headspace, MoodKit, Moodnotes, Sanvello and Happify, to name a few examples. But the space is still nascent in Asia.

Before launching Intellect, Chew was head of affiliate growth and content marketing at Voyagin, a travel booking marketplace that was acquired by Rakuten in 2015. He became interested in the mental health space because of his own experiences.

“I’ve been to therapy quite a bit for anxiety and in Asia, there is still a lot of social stigma and there aren’t a lot of tools. A lot of work is being done in the U.S. and Europe, but in Asia, it’s still developing,” Chew told TechCrunch.

He added that “most people shy away when you mention mental health. We see a lot of that in Asia, but if we frame it in other ways, like how to work on personal problems, like low self-esteem or confidence, we see a huge shift in people opening up.”

Intellect was developed with feedback from mental healthcare professionals, but Chew emphasizes it is not a replacement for professional therapy. Instead, it is meant to give people an accessible way to take care of their mental health, especially in cultures where there is still a lot of stigma around the topic. The app’s exercises address low mood and anxiety, but also common workplace and interpersonal issues, like developing assertiveness and handling criticism.

The enterprise version of the app can be customized with exercises tailored to people in different industries. It is meant for startups and other SMEs that don’t have the kind of employee assistance programs (EAP) that bigger companies can offer, which often include mental health resources, like support hotlines and referrals to mental healthcare providers.

The consumer app usually charges a flat monthly fee that gives unlimited access to all its features, but Intellect is making it free during the COVID-19 pandemic.

Eventually, the startup hopes to develop a network of mental health professionals that users can connect to within the app.

“The way we approach this is that therapy is not solely for clinically depressed people, but for everyone,” said Chew. “In three to five years, we want to make therapy commonplace to address every day problems. We want to tackle more clinical issues as well, but we believe most people can benefit from framing it as a way to tackle every day issues using CBT-based methods.”

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Forerunner Ventures’ Kirsten Green demystifies the COVID-19 consumer

“In general, the consumer has proven to be more resilient than I would have thought,” said Kirsten Green, founder of Forerunner Ventures, which has investments in breakout D2C stars like Glossier, Hims and Bonobos.

She joined us for an Extra Crunch Live conversation to help us better understand buying habits in the COVID-19 era. With tens of millions out of work and uncertainty all around, people are spending less, but Green showed up with a healthy dose of optimism — while acknowledging that her worst-case scenario planning was wrong.

Her top-line advice for companies

Take a cautious approach, be prepared to make hard decisions, but be thoughtful about that. Don’t just make a knee jerk-reaction, which is “this is the apocalypse, we all need 36 months of runway, fire half your staff and go to the bunker.” I think the biggest opportunity for companies right now in many ways is to create value by demonstrating their flexibility.

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Forget sourdough, these sisters are launching a starter to create authentic Asian food

For immigrants in the United States, representation can feel complex, celebrated and oftentimes a mix of the two. And that’s exactly why sister duo Vanessa and Kim Pham launched Omsom, a seed-stage food startup that sells packaged “starters” to recreate authentic Asian dishes at home. The starter contains sauce, spices and aromatics, and the co-founders say consumers can make a dish in 30 minutes or less.

“As we were seeing Asian Americans claim their voices in media and in culture more broadly, we then would juxtapose it with walking down this ethnic aisle in the grocery store and see the way Asian flavors were being represented,” Vanessa told me.

The existence of the ethnic aisle itself has drawn criticism for “othering” cultures that have long been within the United States. It was enough to make Vanessa, who worked at Bain & Company, and Kim, who has spent time in venture at Frontline Ventures and Dorm Room Fund NYC, join forces to create Omsom.

“The ethnic aisle feels super outdated,” Vanessa said. “Flavors have been diluted, branding and design have been stereotypical in nature. How can you boil a cuisine down into one sad jar of sauce?”

The aisle, also named the international aisle, currently contains bottles of never-to-expire thai pastes. Walk a little farther and you’ll find microwavable containers of high-fat butter chicken. And there in the corner is a bottle that boils down one of the world’s most diverse cuisines simply: “curry sauce.”

While progress is pitiful in grocery store representation, the founders are optimistic that they can change that. Omsom, from the flavors to the meaning behind its name (it means rowdy in Vietnamese) to the cap table it has at the moment, is another story waiting to be told about immigrant culture. This is theirs.

Omsom launched today with an undisclosed amount of pre-seed money. The early-stage startup’s ownership group is 50% women of color, including Reshma Saujani, the founder of Girls Who Code, and Brita Rosenheim, a partner at Better Food Ventures. It also raised investment from Peter Livingston, the founder and partner at Unpopular Ventures, a fund dedicated to entrepreneurs who are aiming at unconventional niches.

Livingston said that he invested in Omsom despite not actually being a “food tech investor at all” because it covers an unconventional category.

“Venture capital as an industry is so homogeneous, is clustered in a handful of geographies, prefers to invest close to home, and tends to invest within a small number of the same themes,” Livingston said. “Historically, ethnic food essentials hasn’t really been a ‘VC category,’ which to me, smells like opportunity.”

Saujani said her investment is “betting on the team and a product designed for a vastly underserved market, and the current circumstances make consumer appetite for pantry staples even larger,” referring to COVID-19 forcing more people to cook from home since restaurants are closed.

Your mother’s dish

Recreating authentic dishes with “mom’s ingredients” is not an easy goal, so the Pham sisters focused heavily on sourcing and chef collaboration and spent over a year in research and development of the recipes.

The sisters teamed up with three chefs — Jimmy Ly of Madame Vo, Nicole Ponseca of Jeepney and Chat and Ohm Suansilphong of Fish Cheeks — to create the first line of products. The chefs will get a tiered royalty on sales depending on volume.

“We made sure our ingredients, 90% of them, are unique to Asian food products and sourced directly from Asia,” said Vanessa. “We bent over backwards to get just the right kind of chili.”

But beyond authenticity, the Pham sisters also had another misconception to overcome: the oily and processed reputation of Americanized international dishes, like your favorite Chinese orange chicken takeout or a creamy bowl of butter chicken.

These flagship dishes that are so often associated with those cultures are often multitudes unhealthier than what an immigrant family within, say, the Indian culture, might serve on a day to day basis. Omsom flips that by offering dishes that have no preservatives, no high-fructose corn syrup, and are shelf stable for up to a year. It’s “acceptable for users trying to be generally health conscious, in line with something you would find at Whole Foods.”

Now, the Pham sisters just need to see if they can deliver on the promise of providing uncompromising dishes amid a pandemic. They think it will be a welcomed change for people stuck at home and looking to experiment with cooking.

“We grew up south of Boston in a predominantly white suburb and there was a bit of shame associated with our food,” said Kim Pham. “But as I went through the process of stepping into myself as a woman of color, I started to use food as the first stop in engaging with my identity.”

“I moved away from home, I don’t speak Vietnamese as I used to, but I turned to food,” she continued. “Even if it was a bowl of pho.”

Kim and Vanessa Pham (from L to R)

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