Equity transcribed: Slack’s IPO, the VCs behind Facebook Libra, founder salaries and trouble in scooter-land

Welcome back to this week’s transcribed edition of Equity.

This week, TechCrunch’s Danny Crichton filled in for co-host Alex Wilhelm – who was out in preparation for his wedding this weekend – joining Kate to cover the big news of the week.

Kate and Danny dive straight into Slack’s IPO and the implications of its direct listing strategy, before shifting gears to discuss the launch of Facebook’s new ‘Libra’ cryptocurrency and the VCs backing the initiative.

The duo then took a look at Lime’s latest fundraising efforts and the potential headwinds facing scooter companies with an appetite for capital. Lastly, Kate and Danny talk about underappreciated tensions for founders, including getting pushed out of their own companies and handling their own salaries.

Crichton: Talking about founders and compensation, our correspondent, Ron Miller, talked to a bunch of VCs to ask how are founders paying themselves today? Obviously, the cost of living in the Bay Area, in New York and other startup hubs has increased dramatically. So VCs have had to become acutely aware of their founders’ financial means.

One of the things that really came out of this survey though, from my perspective, was just how high the numbers are. We surveyed small number. We put it out in the interviews. It came out to post-Series A people are starting to get paid around 200K. But the numbers, even a couple of years ago, I seem to recall was like $120 was the magic number around the Series A, $90K if you had a serious seed fund and like $60 to $80 if you are just getting started.

But the numbers that we saw out of this were significantly higher. I think that shows a lot about how the cost of living has just continued to creep up in San Francisco and in New York.

Clark: Yeah. I think the point is made in the story. If you live in San Francisco and you’re paying a mortgage and you have kids, of course, you need to make six figures really to get by, which is just an unfortunate reality. I can’t say I was surprised by how those salaries looked. Seeing $125K for a founder, if anything, I thought was maybe a little low.

But it reminded me of, nearly a year ago at this point, when I wrote something on how much VCs are paid. I had written it based off data that was provided to me from a consulting firm. People were just up in arms at what I had written because, and I understand looking back, I think it grouped VCs together as VCs who work at really big funds who are getting the 2% carry out of a multi-billion dollar fund and who are paid a lot more.

And there are of course VCs who run seed funds or any kind of fund. There are many different sizes of VC funds. Some VCs actually don’t have a salary at all and are up against the same challenges, if not even more difficult challenges, of a startup founder.

Want more Extra Crunch? Need to read this entire transcript? Then become a member. You can learn more and try it for free. 

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Kate Clark: Hello, and welcome back to Equity, TechCrunch’s venture capital-focused podcast. My co-host, Alex, is getting married this weekend so he’s not with us today, unfortunately. But we’ve got TechCrunch editor, Danny Crichton on the line. Danny, how are you?

https://ift.tt/eA8V8J Equity transcribed: Slack’s IPO, the VCs behind Facebook Libra, founder salaries and trouble in scooter-land https://tcrn.ch/2xaFl3m

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Startups Weekly: The scooter cash desert

Hello and welcome back to Startups Weekly, a newsletter published every Saturday that dives into the week’s noteworthy venture capital deals, funds and trends. Before I dive into this week’s topic, let’s catch up a bit. Last week, I noted my key takeaways from Recode + Vox’s Code Conference. Before that, I explored the bull versus bear arguments in regards to Peloton’s upcoming IPO.

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. Now, for some quick thoughts on what I’ll call the scooter funding desert. For months, electric scooter businesses were securing large rounds at even larger valuations. So much so that the venture capital funding extravaganza in e-scooters defined Silicon Valley in 2018.

But it’s 2019, and times have changed. In an effort to keep myself from falling into a scooter rabbit hole, I’ll just say this: raising capital is no longer a piece of cake for scooter companies. E-scooter companies have matured some and investors are more aware of the steep costs of building and scaling these hardware-heavy businesses.

Scoot, which recently sold to Bird, was unable to raise additional capital making an exit to Bird its only viable option, sources tell TechCrunch. Bird paid less than $25 million for Scoot, a significant decrease from Scoot’s most recent private valuation of $71 million.

A recent report from The Information suggests both Lime and Bird, the leaders in the U.S., may run out of cash if they don’t raise again soon. “Lime has raised a total of more than $1 billion in the last two years, and over the past eight months it has shuffled its executive team and put a deeper focus on how to squeeze more money out of each scooter ride. The company ran through its cash quickly last year, including a $23 million loss in one month, before raising $310 million mostly from existing investors in February,” The Information’s Cory Weinberg wrote.

Bird, for its part, is running on less than $100 million and is expected to raise again this summer.

Bird may be in a better position to secure fresh funds. The company enters VC deal talks hot off the heels of its acquisition of Scoot, which gives it access to San Francisco, a coveted market in the scooter universe. Lime, for its part, is said to be struggling. The company enters deal talks amid a number of personnel shake-ups. Multiple policy leaders at the business, including chief programs officer Scott Kubly, recently stepped down, as did Lime co-founder and CEO Toby Sun. 

I’d wager that both Bird and Lime will announce mega rounds in the next few months, but at much smaller valuation step-ups than we’ve seen in the past, perhaps even at a flat valuation. It’s worth noting, however, that e-scooters are still exploding around the world. India’s Bounce, for example, closed on $72 million this week to scale its scooter rental business.

On to other news…

Slack’s big listing: It happened. Slack became a public company this week after completing a direct listing. The workplace communication software juggernaut debuted on the New York Stock Exchange up 48% Thursday, at $38.50 per share, after reports emerged Wednesday night that the business had agreed to a reference price of $26 per share. Slack, founded in 2009 as Tiny Speck, closed up 48.5% Thursday at $38.62 per share. The stock had climbed as high as $42 in intraday trading. Slack’s market cap now sits well above $20 billion, or nearly three times its most recent private valuation of $7 billion.

My inbox is full to the brim with unsolicited commentary on Slack's direct listing. I'll share some of the highlights.

— Kate Clark (@KateClarkTweets) June 19, 2019

Facebook’s new cryptocurrency: Explained

I know, I know, Facebook isn’t a startup, but Facebook’s attempts to create a new global financial system are worth learning about. TechCrunch’s Josh Constine wrote 4,000 words to help you understand the ins and outs of the new cryptocurrency, called Libra, which will let you buy things or send money to people with nearly zero fees.

The future of diversity and inclusion in tech

Here’s my must-read of the week. TechCrunch’s Megan Rose Dickey wrote what is perhaps the most comprehensive story on the state of D&I in tech today. She interviewed many leaders in the space, including Arlan Hamilton, Ellen Pao, Freada Kapor Klein and more, to provide a realistic rundown of the progress we’ve made in making the tech industry more inclusive — and what’s left to accomplish.

Is seed investing still a local business?

According to CB Insights, the number of seed-stage funding deals in the U.S. declined for the fourth straight year in 2018, continuing a trend that has seen the number of deals steadily drop, while the average size of deals increased. It’s safe to say this is the new normal. Yet, there continues to be a huge surplus of available capital and there are more funds out there than ever before. Here are three things entrepreneurs must remember when investors come calling from abroad.

Startup Capital

Meero raises $230M for its on-demand photo business
Postman raises $50M to grow its API development platform
Navigator, the new project from the creators of Mailbox, launches with $12M
Nigerian motorcycle transit startup MAX.ng raises $7M
Humanising Autonomy pulls in $5M to help self-driving cars keep an eye on pedestrians
Armoire gets $4M to become the everyday Rent the Runway
Probably Genetic lands VC backing to launch D2C genetic testing business

Juul’s conundrum

San Francisco is getting closer to banning the sale of e-cigarettes in the city in a bid to prevent minors from accessing them. The city’s Board of Supervisors voted unanimously this week to approve two proposals: legislation that would ban the sale or delivery of e-cigarettes in San Francisco and a separate proposal that would prohibit the sale, manufacturing and distribution of tobacco products, including e-cigarettes, on property owned or managed by the city. It seems designed to take aim at Juul, since the company’s headquarters are in city-owned buildings at San Francisco’s Pier 70. Juul has already started lobbying to stop the ban.

Extra Crunch

If you’ve been unsure whether to sign up for TechCrunch’s awesome new subscription service, now is the time. Through next Friday, it’s only $2 a month for two months. Seems like a no-brainer. Sign up here. Here are some of my personal favorite EC pieces of the week:

• Startup founders need to decide how much salary is enough by Ron Miller
• You won the H-1B lottery: Don’t lose your ticket when changing jobs by Xiao Wang and Anjana Prasad
• How to negotiate term sheets with strategic investors by Alex Gold
• A chat with Niantic CEO John Hanke about the launch of Harry Potter: Wizards Unite by Greg Kumparak

The VCs behind Libra, Facebook’s new cryptocurrency

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, TechCrunch editor Danny Crichton and I discuss Facebook’s cryptocurrency, the scooter funding desert and more. You can subscribe to Equity here or wherever else you listen to podcasts.

https://tcrn.ch/2BYQuGw Startups Weekly: The scooter cash desert https://tcrn.ch/2L2s8lk

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Slack and Zoom are flying high; they’re also being chased already by upstarts

Two of the highest-flying now-public enterprise companies of the year — Slack and Zoom — are different in many ways, besides the fact that one is focused on workplace messaging while the other is centered around video conferencing.

Slack began life as a very different startup; Zoom founder Eric Yuan knew from the outset that he wanted to take on his former employer, WebEx. Slack raised a lot of money from many sources before hitting the public market — roughly $1.4 billion over 10 rounds; Zoom raised $160 million across five rounds, including a $100 million Series D round funded entirely by Sequoia. The two also approached their public offerings differently. Slack chose a direct listing that didn’t raise new money for the company; Zoom chose a traditional IPO, raising half a billion dollars in funding for its coffers just ahead of its first day of trading.

Still, the two companies also have much in common. Both took on incumbents (WebEx and email, respectively). Both are rooted in workplace collaboration and, as such, have some of the same competitors, including Microsoft Teams.

As Zoom investor Gordon Ritter of Emergence Capital Partners also notes, both are “powered by viral end-user adoption, which is not the case for every SaaS company.” (Slack largely grows within a company, starting with one team; Zoom grows internally and externally, given the nature of video conferencing across companies.)

Perhaps more meaningfully, both may see fewer days at the top of the heap than some of their predecessors. The reason, as says longtime VC Greg Gretsch, who co-founded Jackson Square Ventures in 2011, “The intensity of new competition is on a completely different level today from what it was 15 or 20 years ago.”

Put simply, the “cycle time of incumbents having their day in the sun is getting shorter and shorter,” adds RItter, who co-founded Emergence in 2002 and has backed Box, Yammer and Veeva Systems, where he remains board chair.

It’s happening broadly to Fortune 500 companies, whose average lifespan is now less than 20 years, compared with 60 years in the 1950s. Now, even fast-growing companies like Zoom and Slack, which “have amazing futures,” says Ritter, will likely have startups nipping at their heels very soon.

Craig Hanson, a general partner and co-founder of NextWorld Capital in San Francisco, explains it this way: “In the current environment, with all the entrepreneurs and capital looking for the next great idea, each startup success story immediately blooms an entire field of new startups chasing after them.”

It’s almost possible to time it says Hanson. “Once a startup raises a big growth round or has an impressive exit, in two to three quarters, you’ll see rounds of funding for similar new companies. This happens in both consumer and enterprise tech. VCs may regret missing out on the first company that just raised big and hope that there’s room for another one, or some great IPO or acquisition may spark a newfound passion for a space they overlooked before or that they thought was too hard until someone proved them wrong.”

Consider the many failed video conferencing startups to precede Zoom, including TeamSlide, LiveMeeting and Vyew among them. Eric Yuan’s startup was anything but a sure thing, But once a space has been validated by the kind of success it’s enjoying, it makes it easier for founders to raise money. This might partly explain why, in April, a nearly five-year-old, Boston-based startup named Owl Labs raised $15 million in Series B funding for its video conference camera with 360-degree capabilities. Another web conferencing startup, Highfive, based in Redwood City, Calif., raised $32 million last year, including from Lightspeed Venture Partners, General Catalyst and Andreessen Horowitz.

“It’s easier to explain what they want to do [if they can say] ‘We’re like Twilio for ____,'” says Hanson, who says that as recently as 2016, “you’d have maybe two to three startups going after a space and chasing the incumbents. Now there will be 10 startups, and the incumbents were themselves startups just a handful of years earlier.”

The trend isn’t limited to recently public companies, adds Gretsch, noting that “success for many companies and sectors is declared long before the first IPO, and with that perceived success comes a wave of me-too competitors.” It goes “hand in hand with the explosion of seed rounds over the last 10 years, which itself has been largely driven by how little it really costs for a company to get a finished product into customers hands,” he says.

“Now when a new upstart company starts to get traction, there are almost immediately a handful — or more –of startup competitors. Think of the massive proliferation of on-demand startups that emerged in the wake of Uber’s early traction — many of them direct competitors to Uber’s core service.”

Gretsch isn’t so sure the trend is a new one, he says. Nevertheless, because the sheer number of startups that receive funding to put out new products is “off the charts,” it’s changing the game for consumer and enterprise companies alike.

“Any company that’s enjoying success has to remain paranoid and not ever settle for resting on their laurels,” says Gretsch. Now, it just happens to be “more true than it was 23 years ago, when [famed Intel CEO] Andy Grove used it for the title of his book.”

That book: “Only the Paranoid Survive.”

https://ift.tt/eA8V8J Slack and Zoom are flying high; they’re also being chased already by upstarts https://tcrn.ch/2x5lfra

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Ray Dalio is coming to Disrupt SF

When it comes to the gods of finance, few people reach the stratosphere of Ray Dalio. The founder of Bridgewater, the investment firm that has grown to manage $150 billion in assets, Dalio is one of the most successful financial entrepreneurs of his generation, and indeed, of all time.

While Dalio and Bridgewater are known for their pathbreaking analysis of the world economic machine that have reaped them billions in returns, they aren’t just known for their financial results. Rather, Bridgewater is also widely known for its unique culture shaped over decades of trial and error.

Dalio has made sharing that culture his mission in life, publishing Principles, a book and companion mobile app, to train the next generation of founders, executives and business leaders about how to build a culture that seeks truth and excellence in all of its activities.

Dalio will be joining us for a fireside chat on the Extra Crunch stage this October at TechCrunch Disrupt SF, where he will discuss how to build a culture at a startup.

For startup founders, building the culture of their companies is one of the most important yet enigmatic activities they will undertake as leaders. Culture isn’t just a list of values pasted in the corner of a WeWork cubicle; rather, it is the accumulated actions and interactions that founders, employees and investors undertake every single day.

But what exactly should those actions be? How can a founder guide their companies to embody the right values? Dalio has strong views on what a culture should look like at a company. His Principles are based on constantly seeking access to the best information, assessing that information objectively, and always striving to improve decision-making processes through thoughtful disagreement and learning.

On the Extra Crunch stage, Dalio will talk about how to instill the right behaviors into the core DNA of a company’s founders — even before they have hired employee number one. He will also discuss how to maintain and augment his Principles as a company scales, particularly in those high-growth phases where culture either intensifies or withers away amidst the deluge of new hires.

Dalio made his mark building out one of the most successful investment firms of all time. Now he will share his secrets to the founders building the next generation of unicorns.

Dalio joins a variety of amazing speakers who will be on our stage come October, with many still to be announced! Disrupt SF runs October 2 – October 4 at the Moscone Center right in SF. Tickets to the show are available here, but move quickly because the Early Bird pricing ends today!

https://ift.tt/eA8V8J Ray Dalio is coming to Disrupt SF https://tcrn.ch/2Rt4oaY

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Daily Crunch: Google’s not making any more tablets

{rss:content:encoded} Daily Crunch: Google’s not making any more tablets https://tcrn.ch/2ZAzoJ6 https://tcrn.ch/31HSYFm June 21, 2019 at 07:42PM

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. Google says it’s not making any more tablets

“For Google’s first-party hardware efforts, we’ll be focusing on Chrome OS laptops and will continue to support Pixel Slate,” the company said in statement.

Google SVP Rick Osterloh took to Twitter to emphasize that while Google’s hardware team will be “solely focused on building laptops moving forward,” the company will still be working with partners on Android and Chrome OS tablets.

2. Slack’s value rockets as stock closes up 48.5% in public debut

At the close of trading yesterday, Slack’s market cap sat well above $20 billion, or nearly 3 times its most recent private valuation of $7 billion.

3. One of NASA’s robotic astronaut helpers just flew on its own in space for the first time

The robot — called “Bumble” and one of a series of Astrobee robots that NASA developed to work along with astronauts on the ISS — is the first ever to fly on its own in space.

4. Samsung exec says the Galaxy Fold is ‘ready to hit the market’

Just last week, Huawei noted that it was holding off on its own Mate X release. But Samsung, at least, may finally be ready to unleash its foldable on the world, two months after the planned release.

5. Meet your new chief of staff: An AI chatbot

Mailbox’s founders are back with their second act: An AI-enabled assistant called Navigator meant to help teams work and communicate more efficiently.

6. Terry Gou resigns as Foxconn’s chairman to run for president of Taiwan

Gou, who founded Foxconn 45 years ago and is also its biggest shareholder, will remain on the company’s board.

7. A chat with Niantic CEO John Hanke on the launch of Harry Potter: Wizards Unite

Built in collaboration with WB Games, Wizards Unite is a reimagining of Pokémon GO’s real-world, location-based gaming concept through the lens of JK Rowling’s Harry Potter universe. (Extra Crunch membership required.)

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Apply to Startup Battlefield for a shot at TC fame and fortune

What would a $100,000 cash infusion do for your early-stage startup? Don’t just imagine it. Apply to compete in Startup Battlefield at Disrupt San Francisco 2019 on October 2-4.

Our premier pitch competition has launched hundreds of startups on an exponential success trajectory, attracts massive media and investor attention and, yeah, it offers a fat $100K prize — equity free. But listen up founders, the application deadline expires on June 25th at 11:59 p.m. (PT). Don’t miss your shot at TC fame and fortune. Fill out an application to Startup Battlefield today.

You literally have nothing to lose. Any early-stage startup — from any country, in any vertical — is eligible, and it doesn’t cost anything to apply or to compete. TechCrunch doesn’t charge any fees or take any equity, either. We’re nice that way.

You’ll have plenty of time to prepare and plenty of sage advice from expert TechCrunch editors. Yup, all competing teams receive extensive, free pitch coaching. You’ll be rarin’ to go when you step on the Disrupt Main stage to deliver your six-minute pitch and live demo to a panel of top VC and tech judges.

We expect more than 10,000 attendees at our flagship Disrupt SF event, and the wildly popular Startup Battlefield always draws a huge audience. We’re talking thousands of spectators, including hundreds of media outlets, investors and tech influencers. These are the very people who could potentially take your company — whether you win the Battle or not — to the next level and beyond. Not to mention the international live stream to get the entire world’s attention.

Want more perks? We’ve got ’em. Battlefield startups get up to four free conference passes, access to TC’s investor-startup matching program and can exhibit for free in Startup Alley for all three days of Disrupt. Plus, you receive backstage access, invitations to VIP events and free passes to all future TechCrunch events.

Then there’s the Startup Battlefield alumni community — 857 companies strong and counting. Your startup will join an awesome group that includes Fitbit, Vurb, Dropbox, Get Around, Cloudflare, Mint and more. Alumni companies have collectively raised $8.9 billion and produced 110 successful IPOs or acquisitions.

Startup Battlefield takes place at Disrupt San Francisco 2019 on October 2-4, and your shot at $100,000 ends when the application deadline expires on June 25th at 11:59 p.m. (PT). Don’t miss all the opportunity. Apply right here, and we’ll see you in San Francisco!

https://ift.tt/eA8V8J Apply to Startup Battlefield for a shot at TC fame and fortune https://tcrn.ch/2RsMQMh

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‘This is Your Life in Silicon Valley’: Nomiku Founder CEO Lisa Fetterman on why Silicon Valley doesn’t care about female founders

Welcome to this week’s transcribed edition of This is Your Life in Silicon Valley. We’re running an experiment for Extra Crunch members that puts This is Your Life in Silicon Valley in words – so you can read from wherever you are.

This is your Life in Silicon Valley was originally started by Sunil Rajaraman and Jascha Kaykas-Wolff in 2018. Rajaraman is a serial entrepreneur and writer (Co-Founded Scripted.com, and is currently an EIR at Foundation Capital), Kaykas-Wolff is the current CMO at Mozilla and ran marketing at BitTorrent. Rajaraman and Kaykas-Wolff started the podcast after a series of blog posts that Sunil wrote for The Bold Italic went viral.

The goal of the podcast is to cover issues at the intersection of technology and culture – sharing a different perspective of life in the Bay Area. Their guests include entrepreneurs like Sam Lessin, journalists like Kara Swisher and Mike Isaac, politicians like Mayor Libby Schaaf and local business owners like David White of Flour + Water.

This week’s edition of This is Your Life in Silicon Valley features Lisa Fetterman – the Founder/CEO of Nomiku (a Y Combinator alum). Lisa talks extensively about why Silicon Valley does not care about female founders, and proposes a solution to the problem.

If you are interested in diving deep into the diversity problem in technology, this episode is for you.

For access to the full transcription, become a member of Extra Crunch. Learn more and try it for free. 

Rajaraman: Welcome to season three of This is Your Life in Silicon Valley. A podcast about the Bay Area, technology and culture. I’m your host Sunil Rajaraman and I’m joined by my co-host Jascha Kaykas-Wolff.

Kaykas-Wolff: So, now I got a straw poll for you. Are you ready?

Rajaraman: I’m ready.

https://ift.tt/eA8V8J ‘This is Your Life in Silicon Valley’: Nomiku Founder CEO Lisa Fetterman on why Silicon Valley doesn’t care about female founders https://tcrn.ch/2ZGVcTv

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Nowports raises $5.3 million to become Latin America’s digital shipping answer to Flexport

Nowports, a developer of software and services to track freight shipments from ports to destinations across Latin America, has aims to become the regional answer to Flexport’s billion dollar digital shipping business.

Almost 54 million containers are imported and exported from Latin America each year, and nearly half of them are either delayed or lost due to mismanagement.

Nowports is pitching shippers on its digital management software to keep track of each container, and has signed on a number of leading venture capital firms to fulfill its mission.

The Monterrey, Mexico-based company raised $5.3 million in its seed round of financing. The round was led by Base 10 and Monashees with participation from Y Combinator, and additional investors like Broadhaven, Soma Capital, Partech, Tekton, and Paul Buchheit.

“In Nowports we saw a very strong combination: well prepared and ambitious team using technology to help thousands of customers to improve their importing and exporting processes. By adding efficiency, reliability, and transparency to change a multi-billion dollar industry, Nowports has been able to attract many clients that saw significant improvements in their daily routines by using the solution” said Caio Bolognesi, General Partner from Monashees, in a statement.

The company said it would use the money to expand into new markets, grow its team, and integrate with more companies involved in the (very fragmented) Latin American logistics industry. It’s a market that needs a range of better logistics technologies.

Investors are pouring money into Latin America’s logistics and shipping businesses

“Even though over 90% of the world’s trade is carried by sea, the most cost-effective way to move goods en masse, there has yet to be a solution that’s able to connect suppliers, customs brokers, carriers and transportation companies to provide an efficient and reliable service,” said Maximiliano Casal, founder and chief executive of Nowports, in a statement. “This is why we launched Nowports, combining our 10 years of industry expertise to fill this void and are currently working with over 40 customers in the region and growing.”

The company now has offices in Chile, Uruguay, and is planning to expand to Brazil, Colombia, and Peru.

“With platforms, algorithms with AI and integrations, our platform allows companies to take control of their shipments and plan & predict the best timing to move the freight based on the needs of their own company,” said Alfonso De Los Rios, founder, and CTO of Nowports.

As the company looks to expand, it has a strategic roadmap it can follow in  the growth of Flexport, the Silicon Valley startup that has become a billion-dollar business by applying technology to the outdated shipping industry.

The two co-founders of Nowports met at a program at Stanford University, with De los Rios hailing from a family with deep ties to the shipping industry. He and Casal linked up and the two began plotting a way to make the deeply inefficient industry more modern and transparent. To familiarize himself with the market for which he’d be developing a technology, Casal worked in a freight forwarder in Kansas City that had been operating for more than 30 years.

In all, freight providers are getting paid nearly $40 billion per year to move freight into Latin America.

“Alfonso and Max are the ideal founders we look to invest in as they are industry experts and passionate about evolving the industry using technology and automation,” said Adeyemi Ajao, General Partner from Base10. “We are proud to be investors in Nowports alongside our friends at Monashees and look forward to watching the company’s continued growth.”

https://ift.tt/eA8V8J Nowports raises $5.3 million to become Latin America’s digital shipping answer to Flexport https://tcrn.ch/2Y4Ll9t

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Prices increase tonight on passes to Disrupt SF 2019

This is it, the final day the super-early-bird is hanging out at TechCrunch dispensing serious savings on passes to Disrupt San Francisco 2019. Once the clock ticks onto 11:59 p.m. (PT) tonight, the bird flies off to parts unknown. The known part? Ticket prices go up.

Disrupt events provide outstanding ROI at any price. But seriously folks, why pay more? Prices start at $145 and, depending on the pass you buy, you can save up to $1,800. Buy your pass today — before the deadline hits.

One more thing about money. We, like most startuppers, are seriously budget-conscious, so we’ve created a payment plan option that lets you spread your payments over time. Simply select that option during checkout.

On to the main event. San Francisco — the home of the startup culture and spirit, and TC’s flagship Disrupt conference. More than 10,000 attendees — founders, investors, engineers, makers designers, students and 400 media outlets — will settle in for three jam-packed wild and woolly days of startup goodness.

The TechCrunch Hackathon is back in full force, with 800 participants raring to build something new out of nothing in 24 hours. They’ll compete to create working solutions to real-world challenges put forth by an array of sponsors. Each challenge offers its own cash and prizes, and TechCrunch will also award one team a $10,000 cash prize for the best overall hack.

Don’t miss the Startup Battlefield, with its hefty $100,000 cash prize. If you think your early-stage startup has what it takes to step onto the Main Stage and compete against some of the best, get moving now and apply. The deadline expires on June 25th at 11:59 p.m. (PT). Apply right now!

There’s more than one way to step into the Disrupt spotlight. Apply to be in our TC Top Picks program. Up to five early-stage startups will be selected to represent each of these categories: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, SaaS and Social Impact & Education.

If selected, you’ll receive a free Startup Alley Exhibitor Package and an interview with a TechCrunch editor on the Showcase Stage.

There’s so much more to Disrupt — a heady lineup of speakers, Q&A Sessions, workshops, demos, world-class networking and CrunchMatch to help make connecting easier than ever. What are you waiting for?

The clock is ticking on super-early-bird savings to Disrupt San Francisco 2019 on October 2-4. The deadline expires tonight at precisely 11:59 p.m. (PT). Be kind to your bottom line and buy your pass to Disrupt right now.

Is your company interested in sponsoring or exhibiting at Disrupt San Francisco 2019? Contact our sponsorship sales team by filling out this form.

https://ift.tt/eA8V8J Prices increase tonight on passes to Disrupt SF 2019 https://tcrn.ch/2L90CCv

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LTE flaws let hackers ‘easily’ spoof presidential alerts

{rss:content:encoded} LTE flaws let hackers ‘easily’ spoof presidential alerts https://tcrn.ch/2Iwsfnv http://bit.ly/2ZBgSjN June 21, 2019 at 06:46PM

Security vulnerabilities in LTE can allow hackers to “easily” spoof presidential alerts sent to mobile phones in the event of a national emergency.

Using off-the-shelf equipment and open-source software, a working exploit made it possible to send a simulated alert to every phone in a 50,000-seat football stadium with little effort, with the potential of causing “cascades of panic,” said researchers at the University of Colorado Boulder in a paper out this week.

Their attack worked in nine out of ten tests, they said.

Last year the Federal Emergency Management Agency sent out the first “presidential alert” test using the Wireless Emergency Alert (WEA) system. It was part of an effort to test the new state-of-the-art system to allow any president to send out a message to the bulk of the U.S. population in the event of a disaster or civil emergency.

But the system — which also sends out weather warnings and AMBER alerts — isn’t perfect. Last year amid tensions between the U.S. and North Korea, an erroneous alert warned residents of Hawaii of an inbound ballistic missile threat. The message mistakenly said the alert was “not a drill.”

Although no system is completely secure, much of the issues over the years have been as a result of human error. But the researchers said the LTE network used to transmit the broadcast message is the biggest weak spot.

Because the system uses LTE to send the message and not a traditional text message, each cell tower blasts out an alert on a specific channel to all devices in range. A false alert can be sent to every device in range if that channel is identified.

Making matters worse, there’s no way for devices to verify the authenticity of received alerts.

The researchers said fixing the vulnerabilities would “require a large collaborative effort between carriers, government stakeholders, and cell phone manufacturers.” They added that adding digital signatures to each broadcast alert is not a “magic solution” but would make it far more difficult to send spoofed messages.

A similar vulnerability in LTE was discovered last year, allowing researchers to not only send emergency alerts but also eavesdrop on a victim’s text messages and track their location.

FEMA just sent a ‘Presidential Alert’ to millions of U.S. phones

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Ethiopia’s bid to become an African startup hub hinges on connectivity

Ethiopia is flexing its ambitions to become Africa’s next startup hub.

The country of 105 million with the continent’s seventh largest economy is revamping government policies, firing up angel networks, and rallying digital entrepreneurs.

Ethiopia currently lags the continent’s tech standouts—like Nigeria, Kenya and South Africa—that have become focal points for startup formation, VC, and exits.

To join those ranks, the East African nation will need to improve its internet environment, largely controlled by one government owned telecom. Last week Ethiopia’s government shut down the internet for the entire nation.

Startups, hubs, accelerators

Ethiopia has the workings of a budding tech scene. Much of it was on display recently at the county’s first Startup Ethiopia event held in Addis Ababa.

On the startup front, ride-hail ventures Ride and ZayRide have begun to gain traction (Uber has not yet entered Ethiopia). Their cars are visible buzzing throughout the capital and ZayRide will expand in Liberia in August, CEO Habtamu Tadesse confirmed to TechCrunch.

While in Addis, I downloaded and used Ride—founded by female entrepreneur Samrawit Fikru—which quickly flashed connections to nearby drivers on my phone and allowed for cash payment.

This month’s Startup Ethiopia also showcased high-potential early-stage ventures, such as payment company YenaPay and online food startup Deamat. YenaPay has worked to build a digital payments imprint in Ethiopia’s largely cash based economy. The startup has onboarded over 500 merchants, including ZayRide, according to co-founder Nur Mensur.

Deamat blends e-commerce and agtech. “We connect small-holder farmers with consumers. People can use their phone, pay with their phone, get any kind of agricultural products they want and we deliver,” co-founder Kisanet Haile told me after pitching to judges that included Nigerian angel investor Tomi Davies and Cellulant CEO Ken Njoroge.

Ethiopia has several organizing points for startup, VC, and developer activity. Tech talent and startup marketplace Gebeya is located in Addis Ababa (with offices globally) and offers programs and services for ventures and tech professionals to gain developer skills and scale their digital businesses.

BlueMoon is an Ethiopian agtech incubator and seed fund. Its founder Eleni Gabre-Madhin has extensive experience working abroad and played a central convening role in the debut Startup Ethiopia event.

In terms of developer and co-working type spaces, Ethiopia has iCog Labs—an AI and robotics research company—and IceAddis, one of the country’s first tech hubs. Founded in 2011, IceAddis’s mission is to develop Ethiopia’s IT ecosystem, co-founder and CEO Markos Lemma told me during a tour. The hub runs programs such as Ice180, a six-month startup accelerator bootcamp that has graduated 40 ventures. IceAddis also offers a 24 hour co-working space for techies and startups who want to burn the midnight oil with internet access.

Angels and mentors

Startup Ethiopia featured two angel and support networks for Ethiopia’s startups. Tomi Davies and Ethiopian diaspora returnee Shem Asefaw announced the first Addis Ababa Angel Network, supported by African Business Angels Network, which is expected to accept startups this year.

Startup Ethiopia also showcased Ethiopians in Tech, an entrepreneur support group with Silicon Valley roots. SV based Bernard Laurendeau, a director at data analytics firm Zenysis and EiT founding member, made the trek from San Francisco to meet with local startups. So did Stackshare founder Yonas Beshawred.

Talk of leveraging Ethiopia’s diaspora, which is particularly strong and successful in the United States, for tech was mentioned several times at Startup Ethiopia, including on my panel.

Connectivity

The biggest hurdle for Ethiopia’s startup community (that I could identify) is the situation with local internet.

Mobile and IP connectivity in the country is managed by state-owned Ethio Telecom, though the government — led by newly elected Prime Minister Abiy Ahmed and President Sahle-Work Zewde — has committed to privatize it.

At Startup Ethiopia, I moderated and sat on panels with Ethiopian government representatives to discuss the country’s net situation. This was to the backdrop of the tech event’s WiFi not functioning properly over two days—something that was readily pointed out during Q&A by Ethiopian techies and Liquid Telecom CTO Ben Roberts, who flew in from Nairobi.

Several officials, such as State Minister of Innovation and Technology Jemal Beker, named specific commitments to improve the country’s internet quality, access and choice within the next year, with  Ethiopia’s Ministry of Innovation and Technology — Getahun Mekuria — seated in the front row.

Shortly after officials made these public pledges, the government shut down the country’s internet to coincide with national exams.

Days after pledging to expand internet, Ethiopia’s government shuts it off

The government didn’t issue an official reason for the shutdown — and an official in charge of ICT policy did not respond to a TechCrunch inquiry — but press reports and a source speaking on background said the stoppage was done to prevent students from cheating.

Valid reason or not, I received several messages from local techies and startup heads (when the internet was intermittently switched back on) complaining about how the shutdown had totally crippled their businesses.

It appears the situation with internet in Ethiopia may be a bit of steps back before steps forward. After shutting things down, the government announced policy steps last week to break up the national telecom and IP monopoly and issue individual telco licences by the end of 2019.

Prospects

On the upside of Ethiopia’s bid to become a tech and startup hub, the country has a strong demographic and economic thesis—in its large population and economy—to support the scale up of problem-solving, digital businesses. Ethiopia’s large and entrepreneurial diaspora populations, with strong ties to Silicon Valley, could also become a bridge to capital and capacity for its early-stage ventures.

And another edge Ethiopia could have over other African tech hubs is its advances in developing a manufacturing industry (and higher-paid workforce) that’s now pulling some assembly from China. That includes a mobile assembly plant in Addis Ababa for Tenssion’s Tecno, Africa’s leading mobile phone brand.

Ethiopia’s startup scene will be stuck in the mud, however, without changes to the internet landscape. As we discussed on the Startup Ethiopia stage, the tech and startups of tomorrow—in Africa and globally—won’t just be driven by IoT, or the Internet of Things.

Tech ventures and their end-users are shifting toward an IoEA future: the internet-of-everything-all-the-time. And it’s impossible for Ethiopia’s startups to move in that direction in a market with one state controlled mobile provider and IP that has the power to arbitrarily nix connectivity.

So on the policy side, the single most effective thing the government of Ethiopia can do to provide an enabling environment for startups is open up its internet market to improve penetration, choice, cost, and reliability.

Do that and it’s likely the other tech pieces assembling around the country—ventures, angels, hubs, and entrepreneurs—will sort the rest out.

 

https://tcrn.ch/2x8DCeS Ethiopia’s bid to become an African startup hub hinges on connectivity https://tcrn.ch/2ZD2lE6

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YouTube confirms a test where the comments are hidden by default

{rss:content:encoded} YouTube confirms a test where the comments are hidden by default https://tcrn.ch/2IwgXQj https://tcrn.ch/31QrvRA June 21, 2019 at 06:01PM

YouTube’s comments section has a bad reputation. It’s even been called “the worst on the internet,” and a reflection of YouTube’s overall toxic culture where creators are rewarded for outrageous behavior — whether that’s tormenting and exploiting their children, filming footage of a suicide victim, promoting dangerous “miracle cures” or sharing conspiracies, to name a few high-profile examples. Now, the company is considering a design change that hides the comments by default.

The website XDA Developers first spotted the test on Android devices in India.

Today, YouTube’s comments don’t have a prominent position on its mobile app. On both iOS and Android devices, the YouTube video itself appears at the top of the screen, followed by engagement buttons for sharing, liking, disliking, downloading and saving the video. Below that are recommendations from YouTube’s algorithm in a section titled “Up Next.” If you actually want to visit the comments, you have to scroll all the way to the bottom of the page.

In the test, the comments have been removed from this bottom section of the page entirely.

Instead, they’ve been relocated to a new section that users can only view after clicking a button.

The new Comments button is found between the Thumbs Down and Share buttons, right below the video.

It’s unclear if this change will reduce or increase user engagement with comments, or if engagement will remain flat — something that YouTube likely wants to find out, too.

On the one hand, comments are hidden unless the user manually taps on the button to reveal them — users won’t happen upon them by scrolling down. On the other hand, putting the comments button behind a click at top of the page instead of forcing users to scroll could make them easier to access.

As XDA Developers reports, when you’ve loaded up this new Comments section, you can pull to refresh the page to see the newly-added comments appear. To exit, you tap the “X” button at the top of the window to close the section.

While it reported the test was underway in Android devices in India, we’ve confirmed it’s also appearing on iOS and is not limited to a particular region. That means it’s something YouTube wants to test on a broader scale, rather than a feature it’s considering for a localized version of its app for Indian users.

The change comes at a time when YouTube’s comments section has been discovered to be more than just the home to bullying, abuse, arguments, and other unhelpful content, but also a tool that was exploited by pedophiles. A ring of pedophiles had communicated through the comments to share videos and timestamps with one another.

YouTube reacted then by disabling comments on videos with kids. More recently, it’s been considering moving kids content to a separate app. (Unfortunately, it will never consider the appropriateness of having built a platform where young children can be put on public display for the whole world to see.)

A YouTube spokesperson confirmed the Comments test, in a statement, but downplayed its importance by referring to it as one of many small experiments the company is running.

“We’re always experimenting with ways to help people more easily find, watch, share and interact with the videos that matter most to them,” the spokesperson told TechCrunch. “We are testing a few different options on how to display comments on the watch page. This is one of many small experiments we run all the time on YouTube, and we’ll consider rolling features out more broadly based on feedback on these experiments.”

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Early-bird pricing ends tonight for TC Sessions: Mobility 2019

The robotaxi’s blowin’ its horn and zooming autonomously down the home stretch. At 11:59 p.m. (PT) on June 21 — that’s tonight, people — we hit the brakes on early-bird pricing for TC Sessions: Mobility 2019. Don’t miss your chance to join us in San Jose, Calif. on July 10 and save a smooth $100. Get your ticket now.

Innovations across multiple technologies — AI, robotics, electric batteries, digital platforms and manufacturing — are transforming mobility and transportation. Join the leading experts, technologists, founders and investors as they discuss the promise, hype and challenges within this nascent revolution.

More than 1,000 attendees are expected for a program-packed day of speakers, panel discussions, workshops and demos. How packed? Here’s the day’s agenda, plus a sample of just some of the presentations we have lined up:

• Delivering the Future: We’ll talk to Dave Ferguson, co-founder of Nuro, about the self-driving car company’s focused approach to groceries, food and retail goods.
• Intel’s $15 Billion Bet: Intel bought Mobileye two years ago. As co-founder and CEO Amnon Shashua moves toward launching an autonomous vehicle platform in 2021, we’ll speak with him about his overall vision, Mobileye’s future business pursuits and an update on the AV program.
• Scooter Wars: Scooters have taken over cities, and there’s no end in sight. Three leaders on the front lines of this battleground — Scoot’s Katie DeWitt, Tony Ho of Segway-Ninebot and JUMP’s Nick Foley — will discuss what’s next for scooters, shared-model sustainability, unit economics and more.

This TC Session is a stellar networking opportunity, and you’ll have extra help cutting through the noise to make the right connections. We’re talking CrunchMatch, TechCrunch’s free business match-making platform. Easily search for like-minded attendees, send and schedule meetings and make the most of your limited time. Learn how CrunchMatch works here.

Don’t miss your chance to connect with the leading minds and makers of your community at TC Sessions: Mobility 2019 on July 10, in San Jose, Calif. And don’t miss your chance to save $100. Buy your early-bird ticket now before the clock runs out tonight at 11:59 p.m. (PT).

Is your company interested in sponsoring or exhibiting at TC Sessions: Mobility? Contact our sponsorship sales team by filling out this form.

https://ift.tt/eA8V8J Early-bird pricing ends tonight for TC Sessions: Mobility 2019 https://tcrn.ch/2WWaXUA

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Space startup Wyvern wants to make data about Earth’s health much more accessible

The private space industry is seeing a revolution driven by cube satellites, which are affordable, lightweight satellites that are much easier than traditional satellites to design, build and launch. It’s paving the way for new businesses like Wyvern, an Alberta-based startup that provides a very specific service that wouldn’t even have been possible to offer a decade ago: Relatively low-cost access to hyperspectral imaging taken from low-Earth orbit, which is a method for capturing image data of Earth across many more bands than we’re able to see with our eyes or traditional optics.

Wyvern’s founding team, including CEO Chris Robson, CTO Kristen Cote, CFO Callie Lissinna and VP of Engineering/COO Kurtis Broda, had experience building satellites through their schooling, including working on building the first ever satellite in space designed and built in Alberta, Ex-Alta 1. They’ve also developed their own proprietary optical technology to develop the kind of imagery that will best serve the needs of the clients they’re pursuing. Their first target market, for instance, are farmers, who will be able to log into the commercial version of their product and get up-to-date hyperspectral imaging data of their fields, which can help them optimize yield, detect changes in soil makeup that will tell them if they have too little nitrogen, or even help them spot invasive plants and insects.

“We’re doing all sorts of things that directly affect the bottom line farmers,” explained Robson in an interview. “If you can detect them, and you can quantify them, and the farmers can make decisions on how to act and ultimately how to increase the bottom line. A lot of those things you can’t do with multi-spectral [imaging] right now, for example, you can speciate with multi-spectral, so you can’t detect invasive species.”

Multi-spectral imaging, in contrast to hyperspectral imaging, measures light on average in between 3 to 15 bands, while hyperspectral can manage as many as hundreds of adjoining or neighboring bands, which is why it can do more specialist things like identifying the species of animals on the ground in an observed area from a satellite’s perspective.

Hyperspectral imaging is already a proven technology in use around the world for exactly these purposes, but the main way it’s captured is via drone airplanes, which Robson says is much more costly and less efficient than using CubeSats in orbit.

“Drone airplanes are really expensive, and with us, we’re able to provide it for 10 times less than a lot of these drones [currently in use,” he said.

Wyvern’s business model will focus on owning and operating the satellites, and providing access to the data it caters to customers in a way that’s easy for anyone to access and use.

“Our key differentiator is the fact that we allow access to actual actionable information,” Robson said. “Which means that if you want to order imagery, you do it through a web browser, instead of calling somebody up and waiting one to three days to get a price on it, and to find out whether they could even do what you’re asking.”

Robson says that it’s only even become possible and affordable to do this because of advances in optics (“Our optical system allows us to basically put what should be a big satellite into the form factor of a small one without breaking the laws of physics,” Robson told me), small satellites, data storage and monitoring stations, and privatized launches making space accessible through hitching a ride on a launch alongside other clients.

Wyvern will also occupy its own, underserved niche providing this highly specialized info, first to agricultural clients, and then expanding to five other verticals including forestry, water quality monitoring, environmental monitoring and defense. This isn’t something other more generalist satellite imaging providers like Planet Labs will likely be interested in pursuing, Robson said, because it’s an entirely different kind of business with entirely different equipment, clientele and needs. Eventually, Wyvern hopes to be able to open up access to the data it’s gathering even more broadly.

“You have the right to access [information regarding] the health of the Earth regardless of who you are, what government you’re under, what country you’re a part of or where you are in the world,” he said. “You have the right to see how other humans are treating the Earth, and to see how you’re treating the Earth and how your country is behaving. But you also have the right to take care of the Earth, because we’re super predators. We’re the most intelligent species. We are we have we have the responsibility of being stewards of the Earth. And part of that, though, is being able to add almost omniscient of what’s going on in the Earth in the same way that we understand what’s going on in our bodies. That’s that’s what we want for people.”

Right now, Wyvern is very early on the trajectory of making this happen – they’re working on their first round of funding, and have been speaking to potential customers and getting their initial product validation work finalized. But with actual experience building and launching satellites, and a demonstrated appetite for what they want to build, it seems like they’re off to a promising start.

https://ift.tt/eA8V8J Space startup Wyvern wants to make data about Earth’s health much more accessible https://tcrn.ch/2xaUUYE

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Northzone’s Paul Murphy goes deep on the next era of gaming

As the gaming market continues to boom, billions of dollars are being invested in new games and new streaming platforms vying to own a piece of the action. Most of the value is accruing to the large incumbents in a space, however, and the entrance of Google and other big tech companies makes it difficult to identify where there are compelling opportunities for entrepreneurs to build new empires.

TechCrunch media analyst Eric Peckham recently sat down with Paul Murphy, Partner at European venture firm Northzone, to discuss Paul’s view of the market and where he is focusing his dollars. Below is the transcript of the conversation (edited for length and clarity):

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Eric Peckham: You co-founded the hit mobile game Dots before moving to London and joining Northzone last year. Are you still bullish on investment opportunities in mobile gaming or do you think the market has changed?

Paul Murphy: I’m bullish on mobile gaming–the market is bigger than it has ever been. There’s a whole generation of people that have been trained to play games on mobile phones. So those are things that are very positive.

The challenge is you don’t really have a rising tide moment anymore. The winners have won. And so it’s very, very difficult for someone to enter with new content and build a business that’s as big as Supercell or King, regardless of how good their content is. So while the prize for winning in mobile gaming content big, the likelihood is smaller.

Where I’m spending most of my time is not on content, it’s on components within mobile gaming. We’re looking at infrastructure: different platforms that enable mobile gaming, like Bunch which we invested in.

Their product allows you to do live video and audio on top of mobile games. So we don’t have to take any content risk. We’re betting that this great product will fit into a large inventory ecosystem.

Peckham: New mobile game studios that are launching all seem to fall under the sphere of influence of these bigger companies. They get a strategic investment from Supercell or another company. To your point, it’s tough for a small startup to compete entirely on its own.

Murphy: It’s possible in mobile gaming still but it’s really, really hard now. At the same time, what you’ve seen is the odds of winning are lower. It is hard to reach the same scale when it costs you $5.00 to acquire a user today, whereas when Candy Crush launched, it was $0.05 per user. So it’s almost impossible to achieve King-like scale today.

Therefore, you’re looking at similar content risk with reduced upside, which makes that equation less attractive for venture capital. But it might be perfectly fine for an established company because they don’t need to do the marketing, they have the audience already.

The big gaming companies all struggle with the challenge of how to create the next hit IP. They have this machine that can bring any great game to market efficiently, with a large audience they can cross promote from and capital they can invest to build a big brand quickly. For them, the biggest challenge is getting the best content.

So it’s natural to me that the pendulum has swung towards strategic investors in mobile gaming content. Epic has a fund that they set up with Improbable, Supercell is making direct investments, Tencent has been making investments for years. Even from a content perspective, you’re probably going to see Apple, Google, and Amazon making more content investments in mobile gaming.

Image via Getty Images / aurielaki

Peckham: Does this same market dynamic apply to PC games and console games? Do you see a certain area within gaming where there’s still opportunity for independent startups to create the game itself and find success at a venture scale?

Murphy: The reason we made our investment in Klang Games, which is building an MMO called Seed that people will primarily play through PC, is that while there is content risk–you’re never going to get rid of the possibility that the IP doesn’t fly–if it works, it will be massive…an Earth-shattering level of success. If their vision comes to life, it will be very, very big.

So that one has all the risks that you’d have in any other game studio but the upside is exponentially larger, so the bet makes sense to us. And it so happens that it’s going to be on PC first, where there’s certainly a lot of competition but it’s not as saturated and the monetization methods are healthier than in mobile gaming. In PC, you don’t have to do free-to-play tactics that interfere with the gameplay.

https://tcrn.ch/2L4RSgR Northzone’s Paul Murphy goes deep on the next era of gaming https://tcrn.ch/2IuJBRy

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eBay and Facebook told to tackle trade in fake reviews

Facebook and eBay have been warned by the UK’s Competition and Markets Authority (CMA) to do more to tackle the sale of fake reviews on their platforms.

Fake reviews are illegal under UK consumer protection law.

The CMA said today it has found “trouble evidence” of a “thriving marketplace for fake and misleading online reviews”. Though it also writes that it does not believe the platforms themselves are intentionally allowing such content to appear on their sites.

The regulator says it crawled content on eBay and Facebook between November 2018 and June 2019 — finding more than 100 eBay listings offering fake reviews for sale during that time.

Over the same period it also identified 26 Facebook groups where people offered to write fake reviews or where businesses recruited people to write fake and misleading reviews on popular shopping and review sites.

The CMA cites estimates that more than three-quarters of UK Internet users consider online reviews before making a purchase decision — with “billions” of pounds’ worth of people’s spending being influenced by such content. So the incentives driving a market to trade reviews for money is clear.

Commenting in a statement, the CMA’s CEO, Andrea Coscelli, said: “We want Facebook and eBay to conduct an urgent review of their sites to prevent fake and misleading online reviews from being bought and sold.”

“Lots of us rely on reviews when shopping online to decide what to buy. It is important that people are able to trust that reviews are genuine, rather than something someone has been paid to write,” he added. “Fake reviews mean that people might make the wrong choice and end up with a product or service that’s not right for them. They’re also unfair to businesses who do the right thing.”

The regulator says that after it wrote to eBay and Facebook to inform them of its findings they have both “indicated that they will cooperate”.

Facebook also told the CMA that “most” of the 26 groups it identified have now been removed.

The regulator says expects the sites to put measures in place to ensure all the identified content is removed — and stop it from reappearing.

At the time of writing a search of ebay.co.uk for “reviews” returned sellers offering 5 star media reviews, 5 star Google reviews and 5 star Trustpilot reviews as the top three results — one of which was also a sponsored post:

Additional eBay listings included one offering “1/2/3/4/5 Star Freeindex Customer Service Review for business”, priced at £10 and sold by a UK based seller who has been an eBay member since Feb 2011; one 5 star review “on Google” which the seller touts with the line “Boost your business and get new Customers” — at a cost of £2.69; one “100% positive FAST” review for £1; and five 5 Star Reviews on Google priced at £15 — offered by a seller apparently based in Portugal who has been an eBay member since March 2014.

A search of UK Facebook groups returned multiple examples of closed groups where sellers appear to be soliciting reviews, either in exchange for goods and/or payment…

 

Reached for a response to the CMA’s call for measures to be put in place to tackle the illegal trade in fake reviews, Facebook sent us the following statement — attributed to a spokesperson:

Fraudulent activity is not allowed on Facebook, including the trading of fake reviews. We have removed 24 of the 26 groups and pages that the CMA reported to us yesterday and had already removed a number of them prior to the CMA flagging them to us. We know there is more to do which is why we’ve tripled the size of our safety and security team to 30,000 and continue to invest in technology to help proactively prevent abuse of our platform.

An eBay spokesperson also told us:

We have zero tolerance for fake or misleading reviews. We have informed the CMA that all of the sellers they identified have been suspended. The listings have been removed. Listings such as these are strictly against our policy on illegal activity and we will act where our rules are broken. We welcome the report from the CMA and will work closely with them in reviewing its findings.

from Social – TechCrunch https://tcrn.ch/2KsggJP eBay and Facebook told to tackle trade in fake reviews Natasha Lomas https://tcrn.ch/2IvknCw
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