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A court decision in favor of startup UpCodes may help shape open access to the law – TechCrunch

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For the past three years, UpCodes and its founders have been entangled in a copyright lawsuit filed by the International Code Council (ICC). Though both focus on the building industry (specifically, the codes architects and builders need to follow), the lawsuit deals with an issue that has wider ramifications: is it possible to copyright the law, or text that carries the weight of the law?

Founded in 2016 and backed by investors including Y Combinator, UpCodes offers two main products, a database of state building codes that is available on a freemium basis, and UpCodes AI, which scans 3D building models for potential code violations. UpCodes’ building code database is at the center of the lawsuit, because it contains material the ICC claims copyright on. UpCodes says its software simplifies the complex and often expensive process of code compliance, one of the most important parts of the building process. But the ICC, the nonprofit organization that develops the model code used or adopted for building regulations by all 50 states, claims UpCodes impacts its ability to make revenue and continue authoring new code.

In May, UpCodes won a major decision in the case when United States District Judge Victor Marrero ruled that its posting of building codes was covered by public domain and fair use (a copy of Marrero’s ruling is embedded below).

The lawsuit will proceed because both parties’ motions for dismissal were not granted, but Scott Reynolds, who founded UpCodes with his brother Garrett, called the ruling “a huge advance for us in terms of what we’re doing and making sure UpCodes continues in the future.”

Nine days after Judge Marrero’s ruling on May 27, however, the ICC filed another lawsuit against UpCodes and the Reynolds brothers. This time, the ICC is suing UpCodes for false advertising and unfair competition, claiming that the startup’s copies of building codes are “incomplete and riddled with errors.” UpCodes maintains that the second lawsuit is an attempt to find another way to shut down its business.

The ruling’s wider implications

Marrero’s decision in the first lawsuit is noteworthy because it is one of the first to cite the Supreme Court’s ruling earlier this year in Georgia v. Public.Resource.org, which stemmed from another case involving copyright and the law.

In 2015, the State of Georgia’s Code Revision Committee sued Public.Resource.org, a non-profit that shares public domain materials, to stop it from publishing the Official Code of Georgia Annotated (OCGA), a compilation of all laws in the state. The Code Revision Committee argued that annotations made to the OCGA placed it under state copyright, but the Supreme Court ultimately ruled in April that Georgia does not have copyright over the annotated legal code.

The Supreme Court ruling was watched closely by building professionals and open access advocates. As Architect’s Newspaper wrote in an article published last month, “the Georgia precedent helps clarify the border between private property and the public domain, with implications for architects using or considering such products as well as advocates of nonmonetized availability of code information.”

In an email to TechCrunch, lawyer Joseph Gratz, who represents UpCodes and the Reynolds brothers, said the UpCodes lawsuit’s relevancy extends beyond the building industry because “obviously, it deals with a key question about how we govern ourselves as a society. The ruling confirms that the law belongs to the people, and nobody owns it. You can’t make a business model out of owning the legal rules that citizens have to follow; you have to find some other way to support your business which ICC has done, by getting revenue from program services.”

He added, “It’s a model of how open government data can drive new innovations and successful startups. Law isn’t the only kind of information created by the government that can be leveraged in new ways. Property data, statistics and other kinds of government data can also support new businesses. And in all those cases, big old incumbents like ICC will try to find ways to slow down their new competitors.”

UpCodes was founded by Scott, an architect, and Garrett, a software engineer who previously worked at PlanGrid. The brothers wanted to create a more efficient way to reference building codes, which are so complex that many architecture and building firms hire code consultants to help them navigate regulations. Headquartered in San Francisco, the company currently has about 400,000 monthly active users, mostly industry professionals like architects and engineers, but also home owners and rental tenants.

ICC’s first lawsuit against UpCodes claims the startup violated its copyright on forty International Codes (I-Codes), the set of model building codes that have been adopted by all 50 states. The ICC argues that this impedes their ability to generate revenue from selling copies of its model codes, therefore making it harder for the organization to develop new building codes.

But UpCodes’ stance, supported by Marrero’s ruling, is that the I-Codes are either in the public domain or protected by fair use because they have been adopted into law by federal, state and local governments. (After the ICC filed its copyright infringement lawsuit in August 2017, UpCodes’ site was redesigned to include only enacted state and local building codes, instead of the ICC’s model codes).

Does the government edicts doctrine apply?

Despite being opponents in two ongoing lawsuits now, both UpCodes and the ICC view the Supreme Court’s ruling in Georgia v. Public.Resource.org positively.

“What was really interesting for our case is that no matter if they were in the majority or dissenting, Supreme Court justices on both sides had really incredible quotes that said if it is in the law, of course it’s in the public domain,” said Scott Reynolds.

ICC’s general counsel Melike Oncu, however, said that the ruling “confirmed that [the ICC] is the owner of the model codes it publishes” because of what it said about the governments edicts doctrine. As defined by the U.S. Copyright Office, the doctrine states “edicts of government, such as judicial opinions, administrative rulings, legislative enactments, public ordinances, and similar official legal documents are not copyrightable for reasons of public policy. This applies to such works whether they are Federal, State, or local as well as to those of foreign governments.”

Oncu told TechCrunch in an email that the Supreme Court “confirmed that the government edicts doctrine is ‘a straightforward rule based on the identity of the author… assessed by asking ‘whether the author of the work is a judge or legislator’ acting in ‘the course of his judicial or legislative duties and not ‘whether given material carries ‘the force of law.’”

In other words, Oncu said “this means that the government edicts doctrine does not apply to the Code Council’s I-Codes and that they retain copyright protection regardless of whether or not they are later adopted into law.”

In his decision, Marrero wrote that “because ICC is a private party that lacks the authority to make or interpret the law, the Government Edicts doctrine is clearly not dispositive of this case.” But he also noted that ICC encourages adoption of its model codes into law, so that “even if adoption into law is not the sole reason ICC produces the I-Codes, it is clearly one of the most significant reasons, if not the most significant reason, that the ICC does so,” and that “a private party cannot exercise its copyrights to restrict the public’s access to the law.”

The ICC disagrees with Marrero’s ruling, Oncu told TechCrunch. The organization “believes that his decision was wrong because it held that codes that have the force of law are not copyrightable even if they are authored by a private party. As such, the decision is directly contradicted by the Supreme Court decision’s in Georgia.”

But Gratz said that “building codes are the law, and the Supreme Court ruled that ‘no one can own the law.’ That’s exactly what Judge Marrero ruled.”

Gratz added that “even if the government edicts doctrine doesn’t apply, UpCodes wins for two other separate reasons: because there’s only one way to express the law accurately, so UpCodes had to express it the same way ICC wrote it; and because UpCodes was using the material solely for the purpose of informing the public about what the law is, which the court has found to be fair use.”

In his decision, Marrero cited two other previous rulings involving two of the three groups that merged to form the ICC in 1994: the Building Officials and Code Administration (BOCA) and the Southern Building Code Congress International (SBCCI).

In 1980, BOCA sued private publisher Code Technology for publishing and selling its own edition of building code that was adopted by Massachusetts. The First Circuit court ruled in Code Technology’s favor. Then in 2002, the SBCCI sued Peter Veeck for posting a model building code adopted by local governments on his website, which gave free information about North Texas. SBCCI initially won the case in district court, but lost the appeal when the Fifth Circuit ruled in Veeck’s favor.

“Though the Government Edicts doctrine does not address government adoption of model building codes, two circuit courts have considered the issue,” Marrero wrote. “Their holdings are broadly consistent with each other and reaffirm the principle that no one can own the law. Moreever, both cases concern the model codes of ICC’s predecessors, SBCCI and BOCA, on which at least some of the I-Codes are based. These cases strongly suggest that Defendants do not infringe ICC’s copyrights insofar as they accurately post the I-Codes as adopted.”

The second lawsuit

After Marerro’s ruling, the Reynolds brother said they thought ICC might want to reach a settlement to avoid the chance of setting another precedent in Circuit Court. Instead, the ICC filed its second lawsuit on June 5, claiming that UpCodes and the Reynolds brothers “falsely have claimed and still claim that the copies of the codes they offer are, e.g. accurate, completed and up-to-date.”

In the suit, ICC cites a section in Marrero’s ruling where the judge explained why he was denying UpCodes’ motion for dismissal. “ICC has still raised genuine factual disputes that at least some of the codes posted on Current UpCodes [referring to the version of the site after the initial lawsuit was filed] have ‘indiscriminately mingled’ enacted text with unadopted model text.”

UpCodes corrected the errors when notified by the ICC. The Reynolds brothers said that the second lawsuit pointed out less than two dozen errors on UpCodes’ site, but they have now documented more than 400 sections on ICC’s site that either have an error or out-of-date code that they will use in their response.

Gratz said, “ICC appears to have filed the second lawsuit as a back-up plan to misuse unfair competition law to shut down a superior competitor, since ICC’s first attempt to shut down UpCodes failed. Instead of competing in the marketplace, ICC is wasting time with litigation over marketing copy.”

Both ICC and UpCodes told TechCrunch that they collaborate closely with jurisdictions to make sure codes are up-to-date.

Oncu said that ICC “works hand-in-hand with jurisdictions to publish custom codes. The Code Council receives approval from government officials from each jurisdiction that the code it posts is accurate before publishing a new or revised code.”

She added that a pre-motion letter by Gratz “misleadingly identified as ‘errors’ instances where the Code Council correctly published the custom code with the approval of the jurisdiction and then the identified provision was later amended.”

The Reynolds brothers said UpCodes uses a combination of tech and collaborating with building departments to find mistakes in the codes posted to their database. The startup’s algorithms identify potential errors in the code and the company has worked with building departments in California, Utah, North Dakota and New York City to modify and update codes in their database. For example, UpCodes worked with the California Building Standards Commission to identify missing or duplicated sections and printing errors.

“We have over a million sections of code. When someone points out an error, we can fix it immediately,” said Garrett. “It sounds obvious, but having a system and a team that can fix an error within hours and deploy that to the site, across one system, is a lot better than it was historically, when you got an update and had to print it out and staple it into a book.”

“Putting these codes together is an incredibly complicated process and we’re happy to help by leveraging our tech,” he added. “On the other hand, ICC would rather be a gatekeeper to the law rather than explore innovations in the industry. Codes only get more complex over time. We need new technology and innovations to keep up with the growing demands of these regulations.”

ICC vs UpCodes DecisionandOrder by TechCrunch on Scribd



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Smart mug maker Ember raises $23.5M, as it looks toward medical storage – TechCrunch

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Back in February, Ember’s new consumer CEO (ex-Dyson) Jim Rowan outlined for TechCrunch the company’s plans to expand beyond the temperature-controlled smart mugs that bear its name. At the time, the executive cited the cold chain – specifically medicine transport – as a potentially important category for the startup, going forward.

Seems Ember is now ready to start making good on that promise, courtesy of a new $23.5 million Series E that pushes its total funding to around $70 million. Tellingly, the round was led by Foxconn subsidiary GOLDTek, along with Singapore-based EDBI. The latter comes as Ember announces plans to open an R&D center in the Southeast Asian country, in a bid to expand its international presence.

That comes with a further expanded headcount for the firm, which says it already increased its team by 76% this year.

“Since launching Ember five years ago, our company’s mission has always been to use our expertise in precision temperature control to solve real-world problems for our customers,” founder and group CEO Clay Alexander said in a release. “To date, Ember has over 129 granted patents surrounding temperature control, data, and connectivity. This additional capital will be instrumental in bringing to life technology across our vast patent portfolio in the coming years, particularly in the healthcare and infant feeding space.”

On the cold chain front, the company alluded to the forthcoming arrival of its “first self-refrigerated, cloud-based shipping box.” Targeted at the pharmaceutical industry, the technology is looking to target a global supply chain currently subjected to unprecedented strain.



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India’s Simpl raises $40 million for its buy now, pay later service – TechCrunch

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Bangalore-based fintech startup Simpl has raised $40 million as it looks to expand its online buy now, pay later service’s offerings in the world’s second-largest market.

Valar Ventures and IA Ventures led the six-year-old startup’s Series B round. LFH Ventures and some existing investors also participated in the round, said the startup, which has raised $83 million to date.

Simpl partners with popular online brands and offers their customers the ability to make purchases without paying for them at that very moment.

Over the years, additionally, it has also developed a range of offerings including a one-time checkout feature; Bill Box, which allows customers to automate their recurring expense payouts, and splitting a bill in three parts, to build a “full-stack solution,” said Nitya Sharma, co-founder and chief executive of Simpl, in an interview with TechCrunch.

Some of Simpl’s partners include telecom network Jio Platforms, food delivery service Zomato, pharmacy 1MG, grocer BigBasket and ticketing platform MakeMyTrip.

Buy now, pay later services have existed in India for several years but have started to gain fast traction only in recent quarters as e-commerce and digital payments increase their reach in the country.

One of the factors that is making these services popular among consumers is the trust deficit that exists between them and the services with which they are engaging, said Sharma, pointing to continued popularity of cash as the payment method for e-commerce firms.

Fun fact: Uber introduced the ability to let users pay driver partners with cash for the first time in its existence months after launching in India.

With a service like Simpl, customers know that they don’t have to pay right away and have the ability to dispute transactions and quickly request a refund, he said. The startup uses its own underwriting technology to determine the customers to whom it can offer its services, he said. For brands, too, an easier checkout process means the conversion increases significantly, he added.

“We built a full-stack checkout platform that gives merchants ultimate control of the user experience and helps them build trust with consumers at checkout. Simpl is like a Khata or a Tab for online commerce. This intuitive user experience, built on the bedrock of trust, will enable a larger e-commerce market and will lead to greater adoption of mobile payments in India and the rest of the world,” he said.

The startup said it has grown its monthly active merchants and active user base by 10 times in the past 18 months. Over 7,000 brands now use Simpl, the startup said. It now plans to work on further improving the consumer and merchants experience on its platform and also expand to new areas including bringing Simpl to offline neighborhood stores and building a loyalty program, said Sharma.

“India’s e-commerce market is at an inflection point and we believe Simpl’s solution is a key enabler in accelerating adoption of digital payments in e-commerce” said James Fitzgerald, partner at Valar Ventures, in a statement. “It significantly improves consumer experience, which is why it is quickly becoming a preferred partner for merchants. The team has shown great execution and we are excited to join their mission of democratizing e-commerce for all merchants big and small.”

Pay later fintech players today finance loans worth $500 million each year, analysts at Bernstein wrote in a recent note to clients. They expect the figure to balloon to $26 billion by 2025.



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Brazilian workspace-on-demand marketplace BeerOrCoffee snags $10M – TechCrunch

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BeerOrCoffee, a São Paulo-based flexible office marketplace, has raised $10 million in a Series A round led by Kaszek.

Valor Capital Group also participated in the round, which brings BeerOrCoffee’s total raised to about $13 million since its 2017 inception. Kees Koolen, the founder of Booking.com, led the startup’s seed round in 2018.

BeerOrCoffee describes itself as a B2B marketplace of workspaces on demand that aims to provide hybrid work solutions for companies. It offers over 1,100 shared workspaces in 160 Brazilian cities on its marketplace, including WeWork, Selina and Impact Hub

The company’s flagship offering, OfficePass, works as a corporate benefit. It is an office subscription that gives employees access to a distributed network of office spaces, where the employer only pays for the actual use of the space through a payment as a service (PaaS) model. People can choose the closest space and book to use shared spaces, meeting rooms or private offices, according to Roberta Vasconcellos, CEO and co-founder of BeerOrCoffee. 

For example, customer iFood offers the OfficePass benefit to its more than 4,500 employees and uses a total of 240 different spaces across 67 cities throughout Brazil. Among the startup’s other clients are Itaú, Banco Inter, Creditas, QuintoAndar, Stellantis, Sodexo, MRV, Mapfre and Movile. 

“On one hand we improve people’s work/life balance and productivity and on the other, we optimize companies’ costs and time with an as a service model and centralize all their workspace management in a single dashboard,” she told TechCrunch.

The pandemic, naturally, fueled the company’s growth as the world saw an increasingly distributed workforce. 

“We had a great leap in demand for our service,”  Vasconcellos said. “We’re helping companies make the best use of workspaces and giving their employees the flexibility to work however they want.”

That demand continues. In the third quarter of 2021, BeerOrCoffee said it saw the number of bookings made on its marketplace grow 243% compared to the previous quarter. It declined to reveal hard revenue figures, though.

Image Credits: BeerOrCoffee

In addition to OfficePass, the startup also offers private “hubs,” or office spaces, with flexible terms. The benefit to companies, it says, is that they don’t need to invest in infrastructure such as furniture, internet and cleaning. 

BeerOrCoffee practices what it preaches. Its team (currently made up of 82 people) has operated in over five countries since day one, noted Vasconcellos. While it is currently focused on Brazil only, it eventually plans to expand across Latin America.

Hernan Kazah, managing partner and co-founder of Kaszek, says his firm has “always been very impressed by the high-quality network of offices BeerOrCoffee was building and the great feedback they were getting” from some of its portfolio companies.

The pandemic convinced the firm that the trend towards a more flexible working model was here to stay so Kaszek reached out to Vasconcellos with interest in investing.

It’s important to point out that BeerOrCoffee does not operate as a direct opponent with similar offerings such as coworking networks, noted Kazah.

“The co-working networks are partners and BeerOrCoffee is an asset light company,” he said. “As a marketplace, it does not own or directly operate its supply, but rather offer the product and technology necessary for its clients to find and manage their workspace and real estate solutions. This also allows them to bring new demand to the workspaces, providing a better and the cheapest channel of customer acquisition for them and allowing them to add value in their offering by being plugged into BeerOrCoffee’s network.”



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GajiGesa, a fintech for unbanked Indonesian workers, lands $6.6M pre-Series A – TechCrunch

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GajiGesa’s earned wage access feature user flow

GajiGesa, a fintech company focused on services for Indonesian workers, announced today that it has raised $6.6 million USD in pre-Series A funding. The round was led by MassMutual Ventures, with participation from January Capital, European earned wage access company Wagestream (EWA is GajiGesa’s flagship feature), Bunda Group, Smile Group, Oliver Jung, Northstar Group partners including Patrick Walujo, Nipun Mehra (the CEO of Ula) and Noah Pepper (Stripe’s head of APAC). Returning investors included defy.vc, Quest Ventures, GK Plug and Play and Next Billion Ventures.

For a more in-depth look at GajiGesa, take a look at TechCrunch’s profile of the company from February, when it raised its $2.5 million seed round.

Agrawal and Malinowska said in a press release that GajiGesa’s team has doubled in size over the past six months to over 50, and the startup plans to use its latest funding on product development, expansion across Indonesia and entering new markets in Southeast Asia.

The startup is aimed at unbanked workers and focuses on earned wage access, which lets people withdraw their wages immediately instead of waiting for monthly paychecks, because the founders—husband-and-wife team Vidit Agrawal and Martyna Malinowska—said that gives workers much more liquidity and protects them from predatory lenders.

GajiGesa now works with more than 120 companies in a wide range of sectors, including factories, plantations, manufacturing, retail, restaurants, hospitals and tech companies. Based on a survey of its clients, GajiGesa claims that over 80% of their employees have stopped using informal lenders because of its EWA feature and 40% are using other financial services through the platform like bill payments and data recharge.

The company offers an employer app called GajiTim, which it claims is Southeast Asia’s “first and largest integrated employee management solution.” By that, it means that employers can manage a wide array of workforce administrative tasks, including part-time and full-time employees and gig workers. The company says GajiTim currently has more than 200,000 users.

In a statement about the investment, MassMutual Ventures managing director Anvesh Ramineni said, “[GajiGesa’s] integrated platform combines customer-centric product design and world class technology infrastructure to ensure they are uniquely positioned to empower an chronically underserved market and help expand financial resilience for millions across Southeast Asia.



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Facebook whistleblower Frances Haugen will talk Section 230 reform with Congress this week – TechCrunch

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Facebook whistleblower Frances Haugen will go before Congress again this week, this time offering her unique perspective on the company’s moderation and policy failures as they relate to Section 230 of the Communications Decency Act, the key legal shield that protects online platforms from liability for the user-created content they host.

The House Energy and Commerce Subcommittee on Communications and Technology will hold the hearing, titled “Holding Big Tech Accountable: Targeted Reforms to Tech’s Legal Immunity,” this Wednesday, December 1 at 10:30 AM ET. Color of Change President Rashad Robinson and Common Sense Media CEO James Steyer will also testify on Wednesday.

The hearing is the latest Section 230-focused discussion from the House committee. In March, the chief executives of Facebook, Google and Twitter went before lawmakers to defend the measures they’ve taken to fight misinformation and disinformation — two major areas of concern that have inspired Democratic lawmakers to reexamine tech’s longstanding liability shield.

In an October Senate hearing, Haugen advocated for changes to Section 230 that would hold platforms accountable for the content that they promote algorithmically. While Haugen isn’t an expert on legislative solutions to some of social media’s current ills, given her time with Facebook’s since-dismantled civic integrity team, she’s uniquely positioned to give lawmakers insight into some of the most dangerous societal outcomes of algorithmically amplified content.

“User-generated content is something companies have less control over. But they have 100% control over their algorithms,” Haugen said. “Facebook should not get a free pass on choices it makes to prioritize growth, virality and reactiveness over public safety.”

Facebook’s former News Feed lead and current Head of Instagram Adam Mosseri is also set to testify before the Senate for the first time next week, addressing revelations in leaked documents that the company knows its business takes a toll on the mental health of some of its youngest, most vulnerable users.

In its announcement, the House Energy and Commerce committee cited four tech reform bills that Congress is currently mulling: the Justice Against Malicious Algorithms Act of 2021, the SAFE TECH Act, the Civil Rights Modernization Act of 2021 and the Protecting Americans from Dangerous Algorithms Act. The first bill, proposed by the committee holding Wednesday’s hearing, would lift Section 230’s liability protections in cases when a platform “knowingly or recklessly” recommends harmful content using algorithms.



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Co-working and EdTech company Talent Garden acquires Hyper Island to scale online courses globally – TechCrunch

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Talent Garden is a sort of ‘European-WeWork-meets-General-Assembly’ in that its business model is a combination of co-working spaces (in places like Italy, Austria, Romania, among others) plus online/offline digital courses. It’s also a post Series B company (its last round was $73.5 million), having raised from investors such as 500 Startups and Social Capital. It’s now upping its game further with the acquisition of a majority (54%) stake in Hyper Island a place some Europeans regard as the continent’s ‘Digital Harvard University’.

Hyper Island emerged in the 90s as a school of excellence in the emerging world of UX and games design and has gone on to produce an enormous range of talent, which is routinely hoovered-up by the biggest tech players.

The combination of the two will no doubt expand both’ ability to scale their online courses (and offline, where applicable).

For instance, Talent Garden offers a myriad of business training courses for the digital world, processing around 20,000 students a year. Likewise, Hyper Island has traditionally been best known for its online education, but with Talent Garden, that inline component will no-doubt be expanded. Talent Garden also has 20 campuses across Europe.

Talent Garden Co-founder Rasa Strumskyte told me: “Over 60% of our courses are online and the rest on campus and we will work to expand existing courses to more markets and create new ones, especially online.”

It’s estimated that some 97 million new digital jobs will emerge in the next few years, with the global digital education market estimated to grow from $8.4 billion in 2020 to $33.2 billion by 2025, making it one of the fastest-growing sectors of the post-pandemic era.

Hyper Island has a global presence operating in Europe, Asia-Pacific, North and South America through physical establishments in the UK, Singapore, USA and Brazil.

The combined entity says it will have expected revenues of €50 million in 2022, 20,000 professionals trained a year, 5,000 students placed on the job market “with a 98% placement rate and more than 4,500 start-ups and digital innovators as teachers and community members.”

Davide Dattoli, Talent Garden’s Co-Founder and Executive President said: “Through joining forces with Hyper Island, our project is making a new leap forward. In such an important but fragmented market, we are readier as ever before to act as aggregators and game-changers. We will expand our training offering for the benefit of many current and future workers who are living through this time of digital transition.”

Irene Boni, new CEO of Talent Garden said: “Talent Garden has an opportunity to grow considerably in the in the digital education market in Europe, also by training individuals as well as large companies that want to take advantage of the benefits of digitization — which is certainly a technological issue, but most of all a question of human capital.”

Before joining Talent Garden, Boni had been working for the past ten years in the unicorn Yoox Net a Porter (today part of Richemont luxury group) as CoGeneral Manager. Before that she worked at McKinsey.

Fredrik Mansson, Chairman of Hyper Island said: “Through the alliance with Talent Garden we will jointly get a substantial increase in the resources to accelerate both companies growth and impact in the world.”



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Second-hand car auction platform Motorway hits Unicorn status after $190M raise with Index, ICONIQ – TechCrunch

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It was only in June that Motorway – a U.K. platform on which professional car dealers can bid in an auction for privately owned cars for sale – raised $67.7 million in a Series B round. It’s now raised a $190m Series C funding round led by Index Ventures and ICONIQ Growth, a leading Silicon Valley technology growth investment firm. Existing investors Latitude, Unbound, and BMW i Ventures also participated in the round. The startup is now claiming a valuation of over $1bn.

Part of the reason is the impact of the COVID pandemic on supply chains. Second-hand cars have boomed in price because new cars are being made in smaller numbers due to the lack of supply of computer chips and other essential equipment from China.

On Motorway consumers can sell their car via a smartphone app that also uses computer vision to assess the state of the car. The cars are then bid on by professional car dealers in a daily online auction, with the car collected for free by the winning dealer within 24 hours. Given it’s also a “contactless” process, dealers and car owners increasingly seeking to buy and sell cars online.

Motorway says it now has a network of 4,000 professional car dealers using the platform and claims it has booked a 300% uplift in third-quarter sales to $411 million compared with $105 million last year. Some 100,000 used cars have been sold on Motorway since launch, with over 8,000 cars currently being sold a month, with over $2bn projected completed sales over the next year.

Motorway is also announcing the appointment of James Wilson, former Director of Marketplace Fulfillment for Amazon UK, as Chief Operating Officer.

Tom Leathes, CEO of Motorway, said: “8,000 car sales a month is still less than one percent of UK used car sales – so there’s a massive opportunity ahead.”

Danny Rimer, Partner at Index Ventures, said: “Since joining the board, following our initial investment in June, I have experienced first-hand just how fast Motorway is growing and how agile the team is in scaling the business to support this incredible growth.”

Yoonkee Sull, Partner at ICONIQ Growth said: “The used car market’s move online is only accelerating and we believe Motorway is delivering the best consumer experience and the most differentiated supply to dealers in the UK.”

This latest investment brings Motorway’s all-time raise to $273m since it was founded by Leathes, Harry Jones and Alex Buttle in 2017.

In a call with me Leathes added: “There’s no connection with BMW particularly, but they are automotive specialists so they bring quite a lot of knowledge to the white broader market and trends that are happening. They were also part of the B along with Latitude and Unbound.”

“What motorway does differently to a lot of competitors is that we are we’re not a retailer. We don’t own inventory. We’re a marketplace. And so that that allows us to scale much more quickly,” he said.



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