The Exchange: Unicorn IPOs, tech earnings and my favorite VC round from the week

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Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter for your weekend enjoyment. It’s broadly based on the daily column that appears on Extra Crunch, but free. And it’s made just for you.

You can sign up for the newsletter here. With that out of the way, let’s talk money, upstart companies and the latest spicy IPO rumors.

Affirm dreams of an 11-figure SPAC

If you are tired of reading about special purpose acquisition companies, or SPACs, we hear you. We’re sick of them as well. But they keep cropping up, this time in the form of a possible IPO alternative for Affirm, a fintech unicorn that has raised more than $1 billion to provide consumers with point-of-sale installment loans. (Rates from 0% to 30%, terms of up to 36 months.)

Affirm is effectively a lending company that plugs into e-commerce firms. Researching this entry I had an idea in the back of my head that Affirm had a super-neat credit system to rate users. But reading through its own FAQ and what NerdWallet has to say on the company, its methods seem somewhat pedestrian.

Regardless, distribution is key for the company, and Affirm recently linked up with Shopify. That should provide it another dose of growth. The very sort of thing that IPO investors want. The WSJ reported that Affirm could go public this year, perhaps via a SPAC, at a valuation of $5 to $10 billion.

I did my best to map out what those valuations implied, generally finding that Affirm needs to have hella loan volume to make the sort of money that a $10 billion figure implies. Of course, I was trying to make numerical sense. The stock market in 2020 is a bit more relaxed than that.

All this SPAC talk is still mostly bullshit, mind. We are seeing public debuts this year. And every single one of them that has been of note has been a traditional IPO, at least as far as I can recall. The running history of direct listings and SPAC debuts that matter is pretty slim.

Of course, Coinbase and Asana and DoorDash and Airbnb, among others, are in need of liquidity and could yet pull the trigger on a more exotic debut. Hell, Qualtrics could do something wild in its impending IPO but we doubt it will.

Market Notes

The biggest market news this week had little to do with startups. Instead, it came from the anti-startups, namely the largest American tech companies, which smashed their earnings reports. Alphabet actually shrank year-over-year, but it still beat expectations. Facebook and Amazon and Apple were juggernauts in the quarter.

• Given the positive notes we’ve heard from startups and startup investors about how Q2 sales performance was better than expected, and is in some cases besting plans set at the start of the year, the SuperMegaTech results are not a shock.
• Many tech-powered companies of all maturities seem to be catching a boost.

The startups that aren’t are DOA. As Freestyle Capital’s Jenny Lefcourt told TechCrunch the other week, every investor wants into the next round of startups that have caught a COVID tailwind. And precisely zero investors want into the proximate funding event for startups that haven’t.

Moving along, don’t re-invest your retirement funds just yet, but bitcoin is back over $10,000 and is currently trading for $11,300 as I write to you. Given that the price of bitcoin is a workable barometer for consumer interest, trading volume and, perhaps, development work in the crypto space, the recent market movement is good news for crypto-fans.

Turning our heads to breaking news this Friday, news was brewing that the Trump administration was looking to force ByteDance, a Chine-based mega-startup, to sell the U.S. operations of TikTok, the super-popular social app. 

• How? When? We don’t know, but the political and economic situation between the United States and China is getting worse, not better. How you feel about that will depend on your politics.

There were 25 equity-only rounds of $50 million or more in the last week, 22 if you strip out private equity-led rounds and post-IPO investments. That’s a little over $2.6 billion in late-stage capital collected by Crunchbase in a single week. No matter what you might hear from startups stuck on the wrong side of the COVID-19 divide, money is still flowing and quickly.

• Ro’s $200 million deal valuing the firm at $1.5 billion was just the fourth largest deal of the week, by our count. Traveloka, Thrive Earlier Detection and Ascendant Digital, which is a SPAC and thus earns our ire instead of praise, were next in the list.

Stack Overflow’s $85 million round was the tenth largest deal of the week. Damn.

Other rounds you may have missed: $33 million for San Mateo-based Helix, Argo AI is now worth $7.5 billion after its most recent fundraising, $11 million for Brazil-focused wealth manager Magnetis, $16 million for construction-tech company Buildots and $20 million for Instrumental, my favorite round of the week,

Investment into AI-focused startups suffered in Q2, but descended from all-time highs so the numbers were still pretty ok.

On the VC topic, TechCrunch’s own Danny Crichton (he’s on the podcast with me every week) has updated the TechCrunch list with another 116 VCs that are willing to write first checks. The project has been oceans of work, so please do check it out if you have the time, or are looking to fundraise.

Various and Sundry

And, to wrap up, as always, here’s a collection of data, news and other miscellania that is worth your time from this super insane week:

• DocSend data underscores that Q2 VC was not a flop. (Q2 VC coverage from The Exchange this week can be found here.)
• This is a hell of a look from the Facebook board. 
• Startup crowdfunding site Republic looks back on “4 years, 200 companies, $150 million, and 700,000 members.” 
• The Exchange is still digging into no-code, and low-code startups.
• PwC data on tech deal volume shows a slow Q2, while “July is off to a strong start.” 
• Chorus.ai raised $45 million for its sales-tech service, claiming to have tripled its revenue in 2019. Does anyone have a more recent result for the company?
• Continuing our research-and-data-dump, this set of notes from Dave Kellogg on “Are We Due for a SaaSacre?” is worth your time.
• I teamed up with TechCrunch’s Lucas Matney to ask investors about investing in remote-work startups today.

Moving toward the close, Redpoint VP Jamin Ball is writing a series on cloud/SaaS that I’m reading here and there. Take a peek.

And, speaking of VCs out there doing my job, Floodgate partner Iris Choi (an Equity regular) does frequent live streams that she calls Market Musings that I try to snag when I can. It’s always interesting to hear how people with more money than I do think about the market as they are ever-so-slightly more invested in its outcomes. 

Excuse the pun, give yourself a hug for making it through the week, make sure to hit up the latest Equity episode and let’s all go for a run. — Alex

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Startups Weekly: Qualtrics IPO to be even more exciting this time around

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

German software giant SAP bought experience management platform Qualtrics for $8 billion days before the unicorn’s IPO, back in November of 2018. But last weekend it decided to spin out the experience management provider to finally go public on its own. The analysts Ron Miller talked to speculated about strategic issues on the SAP side, and concluded this was more of an internal reset combined with the financial gain from a promising offering.

Qualtrics, meanwhile, already put the Utah startup scene on the map for people around the world. Having grown strongly post-acquisition, it is now set up to be the largest IPO in state history. Here’s Alex Wilhelm with more analysis in Extra Crunch:

According to metrics from the Bessemer Cloud Index, cloud companies with growth rates of 35.5% and gross margins of 71.3% are worth around 17.3x in enterprise value compared to their annualized revenue.

Given how close Qualtrics is to that averaged set of metrics (slightly slower growth, slightly better gross margins), the 17.3x number is probably not far from what the company can achieve when it does go public. Doing the sums, $800 million times 17.3 is $13.8 billion, far more than what SAP paid for Qualtrics. (For you wonks out there, it’s doubtful that Qualtrics has much debt, though it will have lots of cash post-IPO; expect the company’s enterprise value to be a little under its future market cap.)

So, the markets are valuing cloud companies so highly today that even after SAP had to pay a huge premium to buy Qualtrics ahead of its public offering, the company is still sharply more valuable today after just two years of growth.

Back to the era of nation-states

The tech industry is getting broken down and reformed by national governments in ways that many of its leaders do not seem to have planned for as part of scaling to the world, whether you consider TikTok’s ever-shrinking global footprint or leading tech CEOs getting called out by Congress. When you skim through the numerous headlines on these topics this week, you’ll see a very clear message in the subtext: Every startup has to think more carefully about its place in the world these days, as a matter of survival.

Big tech crushes Q2 earnings expectations

Lawmakers argue that big tech stands to benefit from the pandemic and must be regulated

Secret documents from US antitrust probe reveal big tech’s plot to control or crush the competition

Apple’s App Store commission structure called into question in antitrust hearing

Zuckerberg unconvincingly feigns ignorance of data-sucking VPN scandal

In antitrust hearing, Zuckerberg admits Facebook has copied its competition

Before buying Instagram, Zuckerberg warned employees of ‘battle’ to ‘dislodge’ competitor

Apple CEO Tim Cook questioned over App Store’s removal of rival screen time apps in antitrust hearing

Google’s Sundar Pichai grilled over ‘destroying anonymity on the internet’

Bezos ‘can’t guarantee’ no anti-competitive activity as Congress catches him flat-footed

Amazon’s hardware business doesn’t escape Congressional scrutiny

Time for TikTok:

India bans 47 apps cloning restricted Chinese services

After India and US, Japan looks to ban TikTok and other Chinese apps

Report: Microsoft in talks to buy TikTok’s US business from China’s ByteDance

The leading arguments for a Microsoft-TikTok tie-up ;)

And last but not least ominously, for large platforms…

Australia now has a template for forcing Facebook and Google to pay for news

The team at remote-first enterprise startup Seeq put together this montage of some of its remote offices.

Remote work still getting big investment

This loosely defined subsector of SaaS went from being a somewhat mainstream idea within the startup world last year to being fully mainstream with the wider world due to the pandemic this year. But publicly traded companies have been some of the biggest beneficiaries (see previous item), and the action around earlier-stage startups has been less clear. Lucas Matney and Alex caught up with six investors who have been focused on various parts of the space to get the latest for Extra Crunch. Here’s a pithy description of fundraising trends that companies are experiencing, from Elliott Robinson, a growth-stage investor at Bessemer:

How competitive are remote-work tooling venture rounds now?

Incredibly competitive. I think one dynamic I’ve seen play out is that the basket of remote-work companies that are really high-performing right now are setting lofty price expectations well ahead of the raise. Many of these companies didn’t plan on raising in Q2/Q3, but with COVID tailwinds, they are choosing to raise at some often sight-unseen-level valuation multiples.

Are prices out of control?

I think it depends on your definition of out of control. The reality is that many of these companies are raising money off cycle from their natural fundraising date for two reasons: One, they are seeing once in a lifetime digital transformation and adoption of remote-work tooling solutions. And, two, so many investors have raised sizable funds during the last nine months that they are leaning into investing in these companies — one of the few segments that will likely continue to see tailwinds as COVID cases continue to rise again in the U.S. Other traditional software value props may face significant headwinds in a uncertain COVID world. Thus, growth equity investors are paying high multiples to get a shot at the category-defining RW app companies.

Haptics in a pandemic-stricken world

Haptics are a great sort of gee-whiz technology, but the practical future of touch-based communication is all over the place — VR devices are suddenly more interesting, touchpads less so. Devon Powers and David Parisi are academics and authors who focus on the space, and they wrote a big guest post for TechCrunch this week that sketched out some of the ups and downs of the decades-old concept. Here’s a key excerpt:

Getting haptics right remains challenging despite more than 30 years’ worth of dedicated research in the field. There is no evidence that COVID is accelerating the development of projects already in the pipeline. The fantasy of virtual touch remains seductive, but striking the golden mean between fidelity, ergonomics and cost will continue to be a challenge that can only be met through a protracted process of marketplace trial-and-error. And while haptics retains immense potential, it isn’t a magic bullet for mending the psychological effects of physical distancing.

Curiously, one promising exception is in the replacement of touchscreens using a combination of hand-tracking and midair haptic holograms, which function as button replacements. This product from Bristol-based company Ultraleap uses an array of speakers to project tangible soundwaves into the air, which provide resistance when pressed on, effectively replicating the feeling of clicking a button.

Ultraleap recently announced that it would partner with the cinema advertising company CEN to equip lobby advertising displays found in movie theaters around the U.S. with touchless haptics aimed at allowing interaction with the screen without the risks of touching one. These displays, according to Ultraleap, “will limit the spread of germs and provide safe and natural interaction with content.”

A recent study carried out by the company found that more than 80% of respondents expressed concerns over touchscreen hygiene, prompting Ultraleap to speculate that we are reaching “the end of the [public] touchscreen era.” Rather than initiate a technological change, the pandemic has provided an opportunity to push ahead on the deployment of existing technology. Touchscreens are no longer sites of naturalistic, creative interaction, but are now spaces of contagion to be avoided. Ultraleap’s version of the future would have us touching air instead of contaminated glass.

Finding the best investors for you: The TC List and Europe surveys

Speaking of investors, TechCrunch has been busy with a few other projects to you find the right ones faster.

First, Danny Crichton has pushed a third update to The TechCrunch List, due to the ongoing flood of recommendations. In his words: “Now using more than 2,600 founder recommendations — more than double our original dataset — we have underscored a number of the existing investors on our list as well as added 116 new investors who have been endorsed by founders as investors willing to cut against the grain and write those critical first checks and lead venture rounds.”

Check it out and filter by location, category and stage to narrow down your pitch list. If you are a founder and haven’t submitted your recommendation yet, please fill out our very brief survey. If you have questions, we put together a Frequently Asked Questions page that describes the qualifications and logistics, some of the logic behind the List and how to get in touch with us.

Second, our editor-at-large Mike Butcher is embarking on a virtual investor survey of European countries, to help Extra Crunch provide a clearer view about what’s happening in the Continent’s startup hubs in the middle of the world going crazy:

TechCrunch is embarking on a major new project to survey the venture capital investors of Europe. Over the next few weeks, we will be “zeroing-in” on Europe’s major cities, from A-Z, Amsterdam to Zurich — and many points in-between. It’s part of a broader series of surveys we’re doing to help founders find the right investors. For example, here is the recent survey of London.

Our survey will capture how each European startup hub is faring, and what changes are being wrought amongst investors by the coronavirus pandemic. We’d like to know how your city’s startup scene is evolving, how the tech sector is being impacted by COVID-19 and, generally, how your thinking will evolve from here. Our survey will only be about investors, and only the contributions of VC investors will be included. The shortlist of questions will require only brief responses, but the more you want to add, the better.

The deadline for entries is the end of next week, August 7th and you can fill it out here.

He also wanted me to let you know that he’ll resume his in-person trips as soon as allowed. (I actually made that up, but he has said as much.)

Around TechCrunch

Submit your pitch deck to Disrupt 2020’s Pitch Deck Teardown

Announcing the Disrupt 2020 agenda

Talking virtual events and Disrupt with Hopin founder Johnny Boufarhat

The TechCrunch Exchange: What’s an IPO to a SPAC?— In case you haven’t checked out Alex’s new weekly email newsletter yet.

Across the week

TechCrunch

Connected audio was a bad choice

Stanford students are short-circuiting VC firms by investing in their peers

Bitcoin bulls are running, as prices spike above $11K

Recruiting for diversity in VC

Build products that improve the lives of inmates

Extra Crunch

Six things venture capitalists are looking for in your pitch

VCs and startups consider HaaS model for consumer devices

Teespring’s comeback story

Cannabis VC Karan Wadhera on why the industry, which took a hit last year, is now quietly blazing

Jesus, SaaS and digital tithing

#EquityPod

From Alex:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

We had the full team this week: Myself, Danny and Natasha on the mics, with Chris running skipper as always.

Sadly this week we had to kick off with a correction as I am 1) dumb, and, 2) see point one. But after we got past SPAC nuances (shout-out to David Ethridge), we had a full show of good stuff, including:

• Y Combinator Demo Day is going virtual, as before, and its coming iteration will also be live. The Equity crew all agree that this is the right thing to do, and probably more fun, to boot. And now the founders can sweat a live event, too! What fun.
• Speaking of live events going digital, Disrupt is coming up. And it is going to be great. Read more here.
• A group of Stanford business school students are putting together an investment vehicle to invest money into themselves, which is a good idea and something that is highly risible. Luckily, Danny and Natasha had good things to say about the effort.
• Ro raised $200 million, and any jokes that were inappropriate are Danny’s fault. The company’s reported $1.5 billion valuation makes the news that its competitor Hims could go public via a SPAC all the more exciting.
• I covered a neat round: $20 million for Instrumental, a super neat startup that has me hyped.
• Facebook is still hunting up ways to get a better look into growing startups — this time via investments in venture capital funds.
• And, finally, there were some hearings this week, you might have heard. We’re working on something neat that you are going to love on just that topic, so stay tuned.

And that’s Equity for this week. We are back Monday morning early, so make sure you are keeping tabs on our socials. Hugs, talk soon!

Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

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TikTok says it’s “not planning on going anywhere” in response to pending U.S. ban

TikTok’s U.S. General Manager Vanessa Pappas has posted a video message to the platform that appears to be a response to reports from Friday that President Trump is working on an effective “ban” of the app in the U.S., a plan he shared with reporters from the White House pool on board Air Force One. Whether or not he’s even able to do this remains an open question, but in the meantime TikTok seems keen to reassure U.S. users it doesn’t intend to change its operational plans in response to this vague, but potentially existential threat.

TikTok just posted this: “We’re not planning on going anywhere” https://t.co/I7wRw3QAPv pic.twitter.com/G9cf9yhabW

— Andrew Peng (@TheAPJournalist) August 1, 2020

The message from Pappas was pushed out to all U.S.-based users on TikTok as a notification, and appears on their discover page, making it clear they want this seen by the entire community. It starts by thanking users on the platform, and highlights some of its U.S.-based contributions, namely the jobs it has created to date, and committed to creating in future, and the fund it has set up to support creators in the U.S. and globally.

Pappas ends by asserting that TikTok is “here for the long run,” and calling for community support to “stand for TikTok.”

Trump’s assertion that he plans to sign an order as early as Saturday to bar U.S. access to the app followed reports that Microsoft is in talks with the company’s China-based owner ByteDance to potentially acquire its U.S. business. Trump appeared to discount any support for that possibility in his comments to the White House press pool, but a new report from Saturday morning said that Microsoft is indeed in talks to acquire a stake in TikTok and take over stewardship of its U.S. user’s data, as part of a potential deal to stave off any ban.

Again, it’s not clear what executive powers would actually allow Trump to put in place a U.S.-wide ban of the application, but it looks like ByteDance is working with parties in the U.S. on a deal that assumes he’d be able to do so unless the Chinese company divests entirely its U.S.-based TikTok operations to an American owner.

from Social – TechCrunch https://ift.tt/eA8V8J TikTok says it’s “not planning on going anywhere” in response to pending U.S. ban Darrell Etherington https://ift.tt/3hSlACM
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What brands need to do if they want to break up with Facebook

Sean Clayton Contributor

A 15-year digital media veteran, Sean Clayton connects brands with the data-driven intelligence solutions they need to drive growth.

With more than 90 major advertisers and counting announcing plans to dump Facebook, a significant question lingers: Where will brands go next for their digital marketing needs?

The case for the breakup is clear: Brands want to distance themselves from third-party business practices that do not align with their values. Specifically, they are disenchanted by what even some members of Congress are calling Facebook’s “lackadaisical” approach to enforcing community standards, allowing an epidemic of paid political misinformation and hate speech to persist on the user-driven platform.

However, with Google, Facebook and Amazon representing just under 70% of global digital ad revenue, a clean break from the tech giants is easier said than done. Advertisers, like anyone facing a breakup, must look within. After all, they don’t want to make the same mistakes and they cannot just throw newly freed up advertising dollars at a new social network ad platform, where similar conflicts could easily follow.

With introspection, advertisers will see that this is more than just a war on disinformation and hate speech. A data war is brewing, pressuring businesses to diversify data sources. As brands compete to understand the needs and preferences of today’s consumers, consumers are concurrently responding with more guarded protection of their online data.

To win this war, brands must reclaim data autonomy and infuse their digital media strategy with more diversified data. But they cannot do it alone and they cannot do it within the current system.

Time to brandish holistic data

Whether Facebook adjusts its community standards to appease dismayed advertisers has yet to be seen. But in the interim, as advertisers walk out the door, it’s worth noting that Facebook’s reliance on online data may soon be obsolete anyway.

One of the key differentiators for Facebook’s ad platform has been its ability to help level the playing field for smaller brands by cost-effectively captivating the right audiences. But the platform primarily draws insights from audiences’ behaviors online. The next wave of data-based marketing must employ tools that blend first-party data and qualified third-party data to offer a holistic view of customer behaviors, both online and offline.

Offline data sets, which include location intelligence, interactions, purchase history, contact information and demographics are lynchpins in the next digital media wave because they allow brands to develop a more human view of consumer data and create meaningful marketing moments. For example, location intelligence, an extremely potent tool that is currently helping brands pivot during COVID-19 disruptions and is even protecting public health, can drive personalized, alluring marketing campaigns with massive ROI opportunities.

The leading integrated data providers are managing extremely rich datasets, which increase in value daily as consistent tracking yields higher quality data. Such powerful and enriched data stacks offers brands visitor insights based on a specific location after an ad is interacted with on any device — requiring no guesswork for the marketing team. Brands are able to pinpoint exactly which messages resonate with which segments of their audience at which time. This precision ultimately helps them craft the right message for the target consumer — and deliver it at the exact right moment.

Marching orders for combat

Brands want to cut Facebook loose but where do they go next? How do they achieve data autonomy and make omnichannel strides in digital marketing? If the boycott movement is to succeed, revolutionary changes to the digital marketplace are needed.

A newly imagined system must be organized outside the proprietary grasp of any one single tech conglomerate. Otherwise, advertisers will lack ownership of the data they need to reach new audiences. Or they’ll once again get mixed up with similar paid political disinformation and hate speech across user-generated platforms, sending them straight back into the arms of Facebook.

Rather than rely on a single centralized social media platform, transparent media partners and publishers must come together on a shared central system that takes an omnichannel approach to building lookalike (LAL) audiences. A LAL puts advertisers in front of new audiences by finding users that, while they may be unfamiliar with their brand, are very similar to the buyer personas of their current customers. The LAL for each advertiser would be constantly tested and refined to keep pace with the rapidly changing marketplace.

Facebook currently operates on a LAL model but it is almost exclusively generated by online data from their users. The next step is expanding on this model and infusing offline and third-party data with a company’s first-party data, putting them in front of a LAL across a range of media partners and platforms. This will help build a core conversion audience, while constantly scaling new LALs for each brand.

Such a system would require collaboration, enlisting many players in a co-op style undertaking. For example, to get it off the ground, it would be helpful if about 20 of the large brands boycotting Facebook invest some of their newly freed advertising dollars to establish the data and publisher sharing co-op network.

Once the advertiser framework is set, the co-op would need to identify media outlet partners such as news websites, blogs, apps, podcasts and social media outlets. The co-op would negotiate a performance-based publisher relationship for every player, effectively increasing content monetization for publishers’ content channels.

Reinventing the digital media landscape

This would be a transformational movement, galvanizing brands with data autonomy and increasing customer engagement across an entire network of media platforms — not just one platform. Each advertiser’s first-party data, which they’ve already given to Facebook, would be analyzed to isolate data overlaps within the co-op. This would essentially lay the foundation for building a core conversation audience, helping each advertiser tap new LALs.

Brands advertising with the co-op would gain access to more enriched, robust insights on consumers than Facebook could ever offer, leading to a higher return on investment for the $336 billion spend on digital advertising annually.

Most importantly, it would help brands future-proof their digital marketing efforts and grant them greater freedom in choosing where their advertising dollars are being spent.

That is how the war is won.

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Disrupt 2020 early-bird savings extended until next week

Even the hard-charging world of early-stage startups has its share of procrastinators, lollygaggers, slow-pokes, wafflers and last-minute decision makers. If that’s your demographic, today is your lucky day.

You now have an extra week (courtesy of Saint Expeditus, the patron saint of procrastinators), to score early-bird savings to Disrupt 2020, which takes place September 14-18. Buy your pass before the new and final deadline — August 7 at 11:59 p.m. (PT) — and save up to $300. Who says prayers (or secular entreaties) go unanswered?

Your pass opens the door to five days of Disrupt — the biggest, longest TechCrunch conference ever. Drawing thousands of attendees and hundreds of innovative early-stage startups from around the world, you won’t find a better time, place or opportunity to accelerate the speed of your business.

Here are four world-class reasons to attend Disrupt 2020.

World-class speakers. Hear and engage with leading voices in tech, business and investment across the Disrupt stages. Folks like Sequoia Capital’s Roelof Botha, Ureeka’s Melissa Bradley and Slack’s Tamar Yehoshua — to name just a few. Here’s what you can see onstage so far.

World-class startups. Explore hundreds of innovative startups exhibiting in Digital Startup Alley — including the TC Top Picks. This elite cadre made it through our stringent screening process to earn the coveted designation, and you’ll be hard-pressed to find a more varied and interesting set of startups.

World-class networking. CrunchMatch, our AI-powered networking platform, simplifies connecting with founders, potential customers, R&D teams, engineers or investors. Schedule 1:1 video meetings and hold recruitment or extended pitch sessions. CrunchMatch launches weeks before Disrupt to give you more time to scout, vet and schedule.

World-class pitching. Don’t miss Startup Battlefield, the always-epic pitch competition that’s launched more than 900 startups, including big-time names like TripIt, Mint, Dropbox and many others. This year’s crop of startups promises to throw down hard for bragging rights and the $100,000 cash prize.

Need another reason to go? Take a page out of SIMBA Chain founder Joel Neidig’s playbook:

Our primary goal was to make people aware of the SIMBA Chain platform capabilities. Attending Disrupt is great way to get your name out there and build your customer base.

It’s time for all you last-minute lollygaggers to get moving and take advantage of this second, final chance to save up to $300. Buy your pass before August 7 at 11:59 p.m. (PT).

Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.

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Twitter survey reveals the subscription options it’s eyeing, including an ‘Undo Send’ button

Earlier this month, Twitter told investors it’s considering a subscription model as a means of generating additional revenue to support its business. Now we know what sort of value-add features Twitter may be eyeing. In a new survey, the company asks users to evaluate paid features like “undo send” (an alternative to an edit button), as well as other ideas like custom colors, the ability to publish longer and more high-def videos, support for profile badges, auto responses, additional “social listening” analytics, and the ability to run brand surveys about ads.

The survey asks users to select the options they felt were most or least important to them. 

Details of the survey were first published to none other than Twitter itself by Twitter user @WFBrother. The findings were then amplified by eagle-eyed social media consultant, Matt Navarra, who had also seen the survey.

Here’s a list of features Twitter may be considering for its paid / subscription service

Which would you be willing to pay for? pic.twitter.com/w8vYumrpx3

— Matt Navarra (@MattNavarra) July 31, 2020

 

A Twitter spokesperson confirmed the questions had come from a survey the company was running to evaluate options for a membership model, as the survey describes.

The company declined to offer any further comment, but noted its Q2 shareholder letter had detailed its plans in this area:

“We are also in the early stages of exploring additional potential revenue product opportunities to compliment our advertising business,” the letter had said. “These may include subscriptions and other approaches, and although our exploration is very early and we do not expect any revenue attributable to these opportunities in 2020, you may see tests or hear us talk more about them as our work progresses,” it noted.

Specifically, the survey asked users about the following options:

• Undo Send: A 30 seconds window for you to recall/withdraw a Tweet before anyone can see it. This has been something Twitter has suggested in the past could be a viable alternative to an “Edit” button — something users have demanded for years. Instead of allowing unlimited edits to tweets, and the significant engineering investment that would entail — users could instead quickly fix a typo they spotted shortly after posting.
• Custom Colors: In addition to “Night Mode,” you could change the fonts and theme color of Twitter on your phone and computer. Background color, links, mentions, hashtags, and icons would appear in whatever color you choose.
• Video Publishing: You could publish videos up to 5x longer than current default, which a much higher maximum resolution (8192×8192)
• Badges: You get a badge(s) on your profile that links to businesses you own or work for (Example: A journalist can have a badge showing the magazines they write for.)
• Auto responses: Able to write and set a menu of auto responses to use in replies. This would likely be more useful to brands who wanted to redirect customer inquiries to official channels.
• Social listening: You can see conversation around your account on Twitter, including total volume, the people and businesses who are talking most often, and what they are saying. This, again, would largely appeal to brands.
• Brand Surveys: You could be able to survey people about the ads you run to better understand if you ad was memorable and if people are likely to buy the products or services featured. Twitter today already runs similar ads, so this feature would be relatively easy for it to implement.

The survey does not represent features Twitter will definitely roll out as part of any future membership model, of course. It’s only the first step to gathering consumer feedback about what people believe is worth paying for.

Not on the survey? A real “edit” button, of course. That one just may never happen!

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Daily Crunch: Florida teen arrested in Twitter hack

Three arrests are made following this month’s celebrity Twitter hack, Microsoft may be working to acquire TikTok’s U.S. business and Facebook launches licensed music videos. Here’s your Daily Crunch for July 31, 2020.

The big story: Florida teen arrested in Twitter hack

In a hack earlier this month, high-profile Twitter accounts like Apple, Elon Musk, Barack Obama and Joe Biden were compromised and posted messages promoting a cryptocurrency scheme. Now an investigation by the FBI and Department of Justice has resulted in three arrests: Mason Sheppard of the United Kingdom, Nima Fazeli of Orlando and a 17-year-old Tampa resident.

The Tampa teen was described by the state attorney’s office as the hack’s “mastermind” and is facing 30 felony charges. He allegedly made more than $100,000 in a single day thanks to the hack.

“These crimes were perpetrated using the names of famous people and celebrities, but they’re not the primary victims here,” said Hillsborough State Attorney Andrew Warren in a statement.

The tech giants

Report: Microsoft in talks to buy TikTok’s US business from China’s ByteDance — President Trump has plans to order China’s ByteDance, the owner of hit social video app TikTok, to divest from the company, according to Bloomberg.

Secret documents from US antitrust probe reveal big tech’s plot to control or crush the competition — We’ve collected the nearly 500 pages of evidence made public during the House Judiciary’s marathon hearing, with added context, in a searchable version.

Facebook will launch officially licensed music videos in the US starting this weekend — The U.S. launch is enabled by Facebook’s expanded partnerships with top labels, including Sony Music, Universal Music Group, Warner Music Group, Merlin, BMG, Kobalt and other independents.

Startups, funding and venture capital

Genomics startup Helix receives $33 million in NIH funding to scale COVID-19 testing — The funding will be used to support Helix’s efforts to scale its COVID-19 testing efforts, with the aim of achieving a rate of 100,000 tests per day by this fall.

Self-driving startup Argo AI hits $7.5 billion valuation — The valuation was confirmed Thursday, nearly two months after VW Group finalized its $2.6 billion investment in Argo AI.

The iron rule of founder compensation is dead — The latest episode of Equity discusses Y Combinator Demo Day going both virtual and live.

Advice and analysis from Extra Crunch

Working to understand Affirm’s reported IPO pricing hopes — News broke last night that Affirm, a well-known fintech unicorn, could approach the public markets at a valuation of $5 to $10 billion.

Opportunities (and challenges) in church tech — Investor Will Robbins argues that this might be the perfect time for church tech companies to thrive.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Ford Bronco reservations surpass 150,000 — The reception to Bronco 2021 — Ford’s flagship series of 4×4 vehicles that was revealed earlier this month — surpassed the company’s most optimistic initial projections, Ford’s CEO said in an earnings call.

What does accountability look like in 2020? — Rae Witte discusses what happens after a company gets called out.

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 3pm Pacific, you can subscribe here.

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The leading arguments for a Microsoft-TikTok tie-up

Here they are, ranked by how much weight we put behind them:

 

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Florida teen accused of being ‘mastermind’ behind celebrity Twitter hack

Hillsborough State Attorney Andrew Warren announced today that he has filed 30 felony charges against a 17-year-old resident of Tampa, Florida, who was described by Warren’s office as “the mastermind of the recent hack of Twitter.”

The hack in question occurred earlier this month and involved high-profile Twitter users like Apple, Elon Musk, Joe Biden and Barack Obama, whose accounts all posted messages promoting a Bitcoin wallet and claiming, “All Bitcoin sent to the address below will be sent back doubled!”

The teen (we’re not identifying them because they’re a minor) allegedly made more than $100,000 through this cryptocurrency scam.

The state attorney’s office said that the teen was arrested earlier today after an investigation by the Federal Bureau of Investigation and the U.S. Department of Justice, and that they will be tried as an adult. They face charges including one count of organized fraud (over $50,000) and 17 counts of communications fraud (over $300).

“These crimes were perpetrated using the names of famous people and celebrities, but they’re not the primary victims here,” Warren said in a statement. “This ‘Bit-Con’ was designed to steal money from regular Americans from all over the country, including here in Florida. This massive fraud was orchestrated right here in our backyard, and we will not stand for that.”

As we reported at the time, the hack used Twitter’s own internal administrative tool to gain access to high-profile accounts. In a tweet, the company said, “We appreciate the swift actions of law enforcement in this investigation and will continue to cooperate as the case progresses. For our part, we are focused on being transparent and providing updates regularly.”

Earlier today, Twitter updated its blog post outlining what it knows about the attack:

The social engineering that occurred on July 15, 2020, targeted a small number of employees through a phone spear phishing attack. A successful attack required the attackers to obtain access to both our internal network as well as specific employee credentials that granted them access to our internal support tools. Not all of the employees that were initially targeted had permissions to use account management tools, but the attackers used their credentials to access our internal systems and gain information about our processes. This knowledge then enabled them to target additional employees who did have access to our account support tools. Using the credentials of employees with access to these tools, the attackers targeted 130 Twitter accounts, ultimately Tweeting from 45, accessing the DM inbox of 36, and downloading the Twitter Data of 7.

To prevent a similar attack from succeeding in the future, Twitter said it will be “accelerating several of our pre-existing security workstreams and improvements to our tools” and also improving the methods it uses to detect and stop inappropriate access to its internal systems.

A hacker used Twitter’s own ‘admin’ tool to spread cryptocurrency scam

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The leading arguments for a Microsoft-TikTok tie-up

Here they are, ranked by how much weight we put behind them:

 

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Delightree raises $3M to help franchise business owners simplify their operations

Owning one brick-and-mortar business seems complicated enough. But running multiple locations? For many owners, that’s a constant juggling act of phone calls, check lists, and driving back and forth from store to store. In the middle of a pandemic, it gets all the more complex.

Delightree, a company out of the previous Alchemist Accelerator class, has raised $3M to build a tool hyper focused on helping owners of franchise businesses (think hotels, gyms, restaurant chains, etc) take their operations and workflows digital.

A big part of the idea with Delightree is to move much of what currently happens through pen-and-paper checklists over to smartphones, allowing franchise owners to know what’s going at their locations from afar. They digitize workflows like the daily store opening/closing procedures or maintenance routines, with employees checking boxes on their devices rather than a paper todo list. If something gets missed along the way, Delightree can automatically ping the owner to let them know before it becomes an issue.

They’ll also help to automate and track things like onboarding new employees and staying prepared for inspections, while giving owners a centralized place to make team wide announcements or contact employees.

Delightree evolved out of a previous company built by its co-founders, Madhulika Mukherjee and Tushar Mishra. They’d been working on Survaider, a tool that monitored customer feedback across social media, review sites, etc, and turned that feedback into actionable to-do lists.

“When we were piloting it, our customers started saying: can we create our own tasks? Or can I tell something to my employees through this?” Mishra told me. “It was just such an obvious problem, so we started building Delightree.”

Delightree co-founders Tushar Mishra and Madhulika Mukherjee

The team has also been working on a feature they call Delightcomply, which helps stores stay up to date on the latest CDC guidelines for businesses operating through the pandemic, and to automatically share compliance details with potential customers. A business could use Delightcomply to publicly outline the steps it’s taking to keep employees/customer safe, for example, with the listing automatically updated to show the status of each task.

Delightree is currently working directly with each new customer to help them through the initial setup — specifically, to help franchisees take the standard operating procedures they receive directly from the brand owners and turn them into Delightree workflows. They’re still working out their exact pricing model, but say that they charge on a per-location-per-month basis with pricing varying depending on the size/complexity of the business. They’ve set up waitlist for anyone interested.

This $3 million seed round was funded by Accel Partners, Emergent Ventures, Brainstorm Ventures, Axilor Ventures, and Alchemist. As part of the deal, Emergent partner Anupam Rastogi has joined Delightree’s board of directors.

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Big tech goes to Congress remotely

This week, the CEOs of Facebook, Apple, Alphabet and Amazon were called before the House’s Antitrust Subcommittee to defend the vast empires they’ve built. Jeff Bezos, Tim Cook, Sundar Pichai and Mark Zuckerberg faced questions about how their business practices propelled them into the market-dominant giants they are today. They lead four of the top six most valuable public companies in existence and are widely regarded as reshaping the consumer world, both within the tech industry and beyond. Watch TechCrunch reporters Taylor Hatmaker, Devin Coldewey and Alex Wilhelm discuss what happened during the hearing and what this might mean for the future of big tech.

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Cisco acquires Modcam to make Meraki smart camera portfolio even smarter

As the Internet of Things proliferates, security cameras are getting smarter. Today, these devices have machine learning capability that helps the camera automatically identify what it’s looking at — for instance, an animal or a human intruder? Today, Cisco announced that it has acquired Swedish startup Modcam and is making it part of its Meraki smart camera portfolio with the goal of incorporating Modcam computer vision technology into its portfolio.

The companies did not reveal the purchase price, but Cisco tells us that the acquisition has closed.

In a blog post announcing the deal, Cisco Meraki’s Chris Stori says Modcam is going to up Meraki’s machine learning game, while giving it some key engineering talent, as well.

“In acquiring Modcam, Cisco is investing in a team of highly talented engineers who bring a wealth of expertise in machine learning, computer vision and cloud-managed cameras. Modcam has developed a solution that enables cameras to become even smarter,” he wrote.

What he means is that today, while Meraki has smart cameras that include motion detection and machine learning capabilities, this is limited to single camera operation. What Modcam brings is the added ability to gather information and apply machine learning across multiple cameras, greatly enhancing the camera’s capabilities.

“With Modcam’s technology, this micro-level information can be stitched together, enabling multiple cameras to provide a macro-level view of the real world,” Stori wrote. In practice, as an example, that could provide a more complete view of space availability for facilities management teams, an especially important scenario as businesses try to find safer ways to open during the pandemic. The other scenario Modcam was selling was giving a more complete picture of what was happening on the factory floor.

All of Modcams employees, which Cisco described only as “a small team,” have joined Cisco, and the Modcam technology will be folded into the Meraki product line, and will no longer be offered as a standalone product, a Cisco spokesperson told TechCrunch.

Modcam was founded in 2013 and has raised $7.6 million, according to Crunchbase data. Cisco acquired Meraki back in 2012 for $1.2 billion.

Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

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Mammoth Biosciences’s CRISPR-based COVID-19 test receives NIH funding through RADx program

CRISPR tech startup Mammoth Biosciences is among the companies that revealed backing from the National Institutes of Health (NIH) Rapid Acceleration of Diagnostics (RADx) program on Friday. Mammoth received a contract to scale up its CRISPR-based SARS-CoV-2 diagnostic test in order to help address the testing shortages across the U.S.

Mammoth’s CRISPR-based approach could potentially offer a significant solution to current testing bottlenecks, because it’s a very different kind of test when compared to existing methods based on PCR technology. The startup has also enlisted the help of pharma giant GSK to develop and produce a new COVID-19 testing solution, which will be a handheld, disposable test that can offer results in as little as 20 minutes, on site.

While that test is still in development, the RADx funding received through this funding will be used to scale manufacturing of the company’s DETECTR platform for distribution and use in commercial laboratory settings. This will still offer a “multi-fold increase in testing capacity,” the company says, even though it’s a lab-based solution instead of a point-of-care test like the one it’s seeking to create with GSK.

Already, UCSF has received an Emergency Use Authorization (EUA) from the FDA to use the DETECTR reagent set to test for the presence of SARS-CoV-2, and the startup hopes to be able to extend similar testing capacity to other labs across the U.S.

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Facebook will launch officially licensed music videos in the US starting this weekend

Facebook today confirmed it will begin rolling out official music videos across its platform in the U.S., as TechCrunch first reported, as well as introduce a new Music destination within Facebook Watch. The changes, which will go into effect starting this weekend, will allow Facebook users to discover, watch and share music videos from a wide range of artists, including, for example, Anitta, Blake Shelton, Bob Marley, Diplo, Elton John, Jonas Brothers, Josh Groban, Keith Urban, Maren Morris, Marvin Gaye, Miley Cyrus, Nicki Minaj, and others.

Though Facebook had already been working with partners in India and Thailand on a similar music experience before today, the U.S. launch is enabled by Facebook’s expanded partnerships with top labels, including Sony Music, Universal Music Group, Warner Music Group, Merlin, BMG, Kobalt and other independents.

Facebook tells TechCrunch its deals include the full catalog across all major partners and a host of independents.

TechCrunch earlier this month reported Facebook’s plans for music videos would arrive August 1st. We also noted that supported artists were being informed they would soon need to toggle on a new permission that would allow Facebook to automatically add their music videos to their Page, where they could be discovered by fans on the Page’s Videos tab. Once enabled, the artists will be able to edit or remove their video posts at any time.

However, if this setting was not enabled, Facebook will instead automatically generate a separate official music Page on the artist’s behalf, titled “[Artist Name] Official Music,” to enable discovery. That Page would be created and controlled by Facebook and accessible through Facebook Watch, though artists can later choose to opt-in to include their official videos on their own Page.

Image Credits: screenshot via TechCrunch

Image Credits: TechCrunch

With the launch, Facebook users will be able to follow their favorite artists, then receive the latest music video releases from those artists in their News Feed, as they go live. The “follow” option will be available not only on the artist’s Facebook Page, as before, but also directly from the music videos themselves.

By clicking through on the shared posts, fans will be directed to the artist’s Facebook Page, where they can browse the Videos tab to watch more officially licensed music.

The music video posts, like any on Facebook, can be shared, reacted to and commented on. They can also be shared across News Feed, where friends can discover the posts, as well as shared to Groups and in Messenger.

Image Credits: Facebook

The dedicated Music section on Facebook Watch, meanwhile, will allow users to explore music by genre, artist name or mood, or across themed playlists like “Hip Hop MVPs,” “Trailblazers of Pop,” “Epic Dance Videos” or more timely playlists like “Popular This Week” and “New This Week.”

The videos will also be monetized by advertising, like elsewhere on Facebook Watch. However, unlike some video ads, they won’t interrupt the music in the middle of playing. Instead, Facebook tells TechCrunch the ads will either appear pre-roll, during the video as an image ad below the video player or post-roll. These plans may change in the weeks ahead as it iterates on the experience, Facebook notes.

Image Credits: Facebook

The company will apply its personalization technology to the music video experience, too, we understand. As users watch, engage and share, the Music destination in Facebook Watch will become more attuned to your personal likes and interests.

More social experiences are planned for the future, including user-generated playlists.

“Official music videos on Facebook are about more than just watching a video. They’re about social experiences, from discovering new artists with friends to connecting more deeply with artists and people you love,” said Facebook VP of Entertainment, Vijaye Raji. “There’s something in our music video catalog for everyone, and we’re excited for people to discover and rediscover their favorites,” he added.

Facebook says this weekend’s launch of the new Music experience is just the start, and it plans to roll out more music across the platform over time.

Image Credits: Facebook

Facebook’s launch of music videos is seen as a significant challenge to YouTube, which accounted for 46% of the world’s music streaming outside of China as of 2017, according to a report from IFPI. YouTube, around that time, also claimed more than 1 billion music fans came to its site to connect with music from over 2 billion artists.

More recently, YouTube reported it had paid out more than $3 billion to the music industry in 2019. The music labels, however, have shown interest in an alternative to YouTube, which they feel doesn’t pay enough. The financial terms of Facebook’s deal with the labels were not disclosed.

Though Facebook had deals with music labels before now, those were more limited. Artists from major labels, for example, weren’t able to share full music videos due to licensing rights — they could only post a short preview. The change to include full videos could significantly impact how much time users spend on Facebook in the months ahead.

The launch follows a month-long Facebook advertiser boycott over issues around hate speech on the platform, which some brands have chosen to continue with, reports say. But the music video launch was not timed to encourage an advertiser return. According to documents previously reviewed by TechCrunch, the date of August 1, 2020 had been the planned launch date for some time.

The videos are now one of several ways artists can connect with fans on Facebook, as the company had already rolled out tools that allowed artists to promote new releases with custom AR effects and Music Stickers, host live-streamed Q&As on Facebook Live and raise money for important causes through the donate button in Live and Stories.

“Artist/Fan connection on Facebook is deeper and more authentic because of tools like Stories, Live and custom AR effects. Official music videos are re-born in that setting — they become part of the way people express identity and mood and bring a new dimension to the artist storytelling that happens on our apps every day,” said Tamara Hrivnak, VP of Music Business Development and Partnerships at Facebook.

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