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Hello and welcome to Daily Crunch for November 18, 2021. Today we’re talking how audio turns into the written word and how to stop watching certain video content if you can’t, ahem, turn it off. But first, don’t forget that TechCrunch Sessions: Space is coming up in just a few weeks! — Alex
The TechCrunch Top 3
- Sweetgreen’s IPO turns out pretty sweet: Whatever you thought of Sweetgreen’s financial performance, it is having a pretty great public debut. After pricing at $28 per share, above its target range, the company’s share price shot higher today to nearly double its starting value. Sure, you could argue that the company underpriced its public debut, but I doubt that the company is crying.
- Paytm’s IPO doesn’t: But while Sweetgreen is rolling in clover, Indian fintech giant Paytm had a pretty awful first day as a public company, with its shares falling around 27% in regular trading. The SoftBank- and Alibaba-backed unicorn raised $2.5 billion in its public-market debut, so it at least locked in the funds before seeing its valuation fall.
- Spotify finally rolls out live lyrics globally: If you, like myself, live on Spotify but are tired of using your web browser to look up song lyrics, good news! Now you don’t have to! Lyrics are live in the music service and they look like this:
We have a few things to dig through from startups today, but first, Grammarly. The company just raised $200 million at a $13 billion valuation. This makes the company, variously, a decacorn or dragon or Company That Should Go Public. Regardless, the old $1 billion valuation threshold that used to set startups apart has lost all meaning. The $10 billion mark, however, seems to be the new requirement to be a truly standout startup today.
Notes from the TechCrunch transport desk: Cars of the future
- Electric tuk tuks for the U.S. market: That’s the play that Biliti thinks is going to be big. Tuk tuks are three-wheeled, open-cab vehicles that are something akin to a cross between a delivery van and a moped. They are popular in a number of global markets, if not the United States. But with more folks living in cities over time, and more of us expecting goods to be delivered to our homes, perhaps the time of the tuk tuk is nigh in the U.S.
- Sun power: I don’t know how well this will work in the wild, but Sono Group just went public on the back of its solar-powered car idea. The idea is that the car can suck in enough juice from the sky to power a commute. Which means no charging cables, even if the car probably wouldn’t get you too far without other forms of electrical input. Still, the idea is very neat and we hope that all EVs in time have a solar component.
- Self-driving Apple: Remember the Apple car? Apart from the never-quite-here Apple television set, the Apple car is my favorite bit of tech from the consumer electronics giant that we have yet to set eyes on. But reporting indicates that we could see the self-driving vehicle in 2025. That’s just far enough away for us to forget about the date.
- And speaking of self-driving, Baidu’s self-driving taxis could be in 100 cities by 2030. By 2030 that number better be bigger than 100, honestly.
And now, a sampling of the rest of the day’s startup news:
- What if TikTok, but also gaming? That’s the idea behind Snax, which intends to bring together short-form video and interactive elements. This could be very cool, or not, probably depending on whether Snax is able to let the crowds contribute content or it decides to do all that work itself.
- Party Round raises its own party round: The idea behind Party Round is that raising money is a pain in the butt and that founders need better tooling. The service wants to make fundraising simpler and also allow founders to accept smaller checks. So that they can put together their own party rounds. Funding events with many smaller participants used to be mocked as a bad idea for founders. So much for that old logic. Party Round just added $7 million to its accounts using its own service.
- Get used to reading about MLOps: Today’s news that machine learning operations startup Comet closed a $50 million Series B just months after closing its Series A might seem like just another example of a startup raising lots of money, very quickly. But recall that Weights & Biases raised $135 million for its own MLOps work the other week. It’s a category that is now perhaps seen as inevitable and therefore a lucrative long-term bet. Expect to see more of these investments.
- Doorvest raises $14M to help folks buy, manage rental properties: If you want to get into real estate investing, your options set is limited today to your ability to build a small real estate company or invest in REITs. Doorvest wants to make the first option easier for folks and make itself a packet in the process.
- Workflow automation is big business: If you get on the horn with Appian CEO Matt Calkins, he isn’t hard to get started on the subject of workflows. Workflows are what RPA and other automation tools, well, automate. And it’s a big enough piece of work that Appian is seeing startup competition. Formstack just raised $425 million for a no-code approach to business workflow automation, for example.
- MDM is investor catnip: News out today that Kandji has raised $100 million at an $800 million valuation for its Apple device management business might not raise your eyebrows, but recall that Apple itself is getting in on the game and that Jamf, another competitor, already went public. Perhaps Apple’s corporate footprint is simply larger than we thought.
- This startup wants to help you stop watching porn: If you’ve spent too much time online in the last while, you have at least heard of certain movements among the digitally inclined to stop consuming pornography. Now that porn is free and easily accessible, as opposed to costly and served in physical formats, some folks are overindulging. Enter Remojo, which wants to help men quit the media variety altogether.
And, finally, accessibility:
Dear Sophie: Any advice on visa issues for new hires?
I run operations at an early-stage startup, and I’ve been tasked with hiring and other HR responsibilities. I’m feeling out of my depth with hiring and trying to figure out visa issues for prospective hires.
— Doubling Down in Daly City
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Big Tech Inc.
- Now you can literally shake your fist at Instagram: The next time that you run into a problem with Instagram, you will be able to shake your phone to generate a prompt for reporting an error. I want to dunk on this, but I actually like it. Instagram is also adding “the ability to delete single items from a carousel post with at least three images or videos,” TechCrunch reports.
- Want to look like a huge dweeb this Christmas? Some brands should have merch. Equity, our podcast, for example, should have merch. But should Hulu have merch? It thinks so. Netflix was first into the niche, we report.
- And today in corporations letting us down: California Pizza Kitchen leaked over 100,000 Social Security numbers. This brings up two points. First, why are we still so dependent on Social Security numbers as a society. And, two, that the food chain should pay a fine roughly the size of one of its restaurants built entirely out of $100 bills. This sort of breach should be punished with a hammer the size of Utah. Bad!
TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this survey along to your clients; we’d like to hear about why they loved working with you.
If you’re curious about how these surveys are shaping our coverage, check out this article on TechCrunch from Jonathan Martinez, “A lean startup’s growth marketing tech stack.”
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Galaxy Digital calls off $1.2 billion acquisition of BitGo – TechCrunch
Crypto sector’s first $1 billion deal, announced at the height of record surge in token prices, is disbanding as the market reverses much of the gains.
Galaxy Digital said Monday it has terminated the $1.2 billion proposed acquisition of crypto custodian BitGo, a high-profile deal they announced in May last year, after the San Francisco-based startup failed to provide its audited financial statements for the year 2021.
BitGo’s alleged failure to provide the financial statements by July 31 violated the terms the two firms had agreed upon last year, Galaxy Digital said in a public statement, adding that the termination of the deal won’t incur the company any fee. Shares of Galaxy Digital, which trades in Toronto, jumped on the news.
The proposed acquisition — which was proposed to include Galaxy Digital issuing 33.8 million new shares, and a $265 million cash component — was supposed to be crypto sector’s first $1 billion deal. The BitGo purchase was positioned to help Galaxy Digital broaden its offerings for institutional investors by adding services such as investment banking, prime lending and tax services. BitGo counts Galaxy Digital, Goldman Sachs, Valor Equity Partners, Craft Ventures, DRW and Redpoint Ventures among its backers.
“The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business. We are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital,” Mike Novogratz, chief executive officer and founder of Galaxy Digital, said at the time.
Novogratz (pictured above) said Monday: “Galaxy remains positioned for success and to take advantage of strategic opportunities to grow in a sustainable manner. We are committed to continuing our process to list in the U.S. and providing our clients with a prime solution that truly makes Galaxy a one-stop shop for institutions.”
The announcement follows Galaxy Digital reporting a second-quarter loss of $554.7 million, up from a loss of $183 million a year ago, earlier this month. In the company’s earnings call, Novogratz said Galaxy Digital had about $1 billion in cash on hand.
Galaxy Digital said today it is waiting for the SEC’s review and stock exchange approval for a Nasdaq listing.
Uber to sunset free loyalty program in favor of subscription membership – TechCrunch
Ride-hailing giant Uber is shutting down its free loyalty program, Uber Rewards, so it can focus on its subscription-based Uber One membership.
Uber first launched the rewards program in 2018 as a sort of frequent flyer scheme that allowed riders to earn points for every dollar spent on rides or Uber Eats deliveries. Those points could then be used to get discounts on future rides or deliveries. In November 2021, Uber began introducing Uber One, which, for $9.99 per month or $99.99 annually, allows members perks like 5% off certain rides or delivery orders and unlimited $0 delivery fees on food orders of over $15 and grocery orders of over $30.
In an email sent to customers that was picked up by The Verge, Uber said users can still earn points via the legacy rewards program until the end of August, and that they can redeem those points until October 31. Uber Rewards will officially shut down on November 1, 2022, according to an update posted by the company.
The Uber Rewards program allowed users to earn 1x point for every Uber Pool dollar spent, 2x for every UberX dollar spent and 3x for every $1 spent on Premium. The number of points accumulated would put members into different castes of loyalty, from Blue to Gold to Platinum to Diamond, the latter of which comes with benefits like access to highly rated drivers, free delivery on three Uber Eats orders, access to better customer service and free upgrades.
While phone support will continue for Diamond users, now the only way to get additional perks with Uber will be to shell out for a subscription. Existing Rewards members will get a free one-month subscription to Uber One, but then will be charged for access. If you’re someone who orders Uber Eats more than twice a month, you can easily break even with the Uber One subscription, but plenty of users might not see the money saving benefits in the switch.
Uber did not respond immediately for clarity as to why it is shutting down the Rewards program in favor of the Uber One membership. Perhaps the company did not see the returns and user loyalty that it would have expected from the program and thinks a subscription offering will provide better returns.
As companies fight to retain talent, employee benefits startups might escape cost cuts – TechCrunch
How will employee benefits startups fare when their corporate customers start slashing costs as the market goes downhill? We’re going to find out if current trends continue.
There was a spike in the number of startups offering employee benefits services through a B2B2C model last year, as nearly every company focused on employee benefits amid the Great Resignation in an effort to retain and attract talent. These startups sell everything from paid care leave coordination and fertility services to discounted gym memberships to consumers through their employers.
But the freewheeling spending of 2021 is now over, and some of these startups could find their offered services on the chopping block if market conditions continue to worsen.
If there is indeed a recession on the horizon, many of these startups would be right to fear for their future growth, but Brian Kropp, chief of HR research at Gartner, doesn’t think this downturn will mirror the last. Kropp told TechCrunch that even if the market enters a recession, it won’t be similar to what we saw in 2008 because of the ongoing labor shortage.
You’re not that special (I swear, there’s a startup angle here) – TechCrunch
Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.
For longtime Startups Weekly readers, you’ll remember that edtech used to be my primary beat. Like, day one beat. Most of my coverage was focused on edtech’s rise in the early innings of the pandemic, the unicorn mad rush and even some IPOs. Duolingo continues to be the company that I know the most about, mostly because I wrote thousands of words about its savvy owl and wild founding story.
While I’m more focused on fintech these days, I was curious if edtech is still a big deal or if the sector — like most during the downturn — is facing a reset. This week, I interviewed seven leading venture capitalists who have a focus on education technology to better understand how the sector is faring during the downturn.
The big takeaway? Edtech is facing a reality check in the form of discipline. Investors explained that the whole startup ecosystem is slower this year; edtech is no different. If anything, as USV’s Rebecca Kaden put it, “The boom in the category in the last couple years means most of our education-focused portfolio is funded quite well [ … ] rounds would be opportunistic rather than out of need, and most are focused on building their businesses for the next couple years.”
As Kaden describes, it’s time to focus and edtech, luckily, has the capital to do it. It makes me think a bit about advice that my friend often gives our friend group: We’re not that special, and that’s a good thing. He means in the kindest way, and the lesson there is that feelings of change, stress or anxiety are not as deep as we may think when we first feel them. What we’re experiencing is shared by other people in their mid-20s, or, well, other sectors in startup land right now. All that matters is if you’ve invested in yourself long enough before the spotlight turns on that when the lights go down, you’re still there. Just quieter and maybe focused a bit more on backstage.
Anyway, for the full survey, read my TechCrunch+ piece: “7 investors discuss why edtech startups must go back to basics to survive.” You can also check out my accompanying analysis, “Edtech isn’t special anymore, and that’s a good thing.”
In the rest of this newsletter, we’ll get into one Haus’ closed doors, SoftBank execution fund and a pitch deck teardown you don’t want to miss. As always, you can support me by forwarding this newsletter to a friend or following me on Twitter
Bring the Haus down
I wrote about Haus, a buzzy VC-backed aperitif company going up for sale in light of a collapsed Series A. CEO and co-founder Helena Price Hambrecht spoke to TechCrunch about what went down between the company and its potential lead investor, the reasoning they got behind the fallen deal and what’s next.
Here’s what’s important: I’ve never seen an entrepreneur so transparent about the challenges, and unfortunate outcomes, that happen within startups. Here’s an excerpt from my interview with her.
“It’s always dangerous to be low on cash. We got there, and it’s unfortunate, but I know there are many companies in this position right now,” Hambrecht says. “I have been sharing my work online for over 20 years now. It’s definitely something in my DNA. If me sharing this process is helpful for another founder in a tough spot and considering their options, then it makes all of this a little more worth it.”
As for what’s next for the entrepreneur, a Silicon Valley branding veteran, there’s no immediate plans to jump into a new startup.
“My goal, right now, is to be as helpful as I can to make this ABC process have the best outcome possible. After that, I’m going to take some time to process the last four years; it’s been so extraordinary, as well as brutal and traumatic; I’m going to rest and process that.”
So, when is the SoftBank Execution Fund III dropping?
This week on Equity, your favorite trio dug into the numbers and nuance behind the headlines. It meant SoftBank, Coinbase and deals from ByteDance, Haus and Axios.
Here’s why it’s important: Part of the conversation hovered around SoftBank’s losses on losses, which was really the highlight of the show. Do we see a redemption arc forming for one of the biggest, buzziest investors of the past few years? And what does Tiger Global think? So many questions, and it’s always fun to get Mary Ann and Alex’s take.
Pitch Deck Teardown: Five Flute’s $1.2M pre-seed deck
TC’s Haje Jan Kamps is back with another pitch deck teardown, this time looking at the deck that helped Five Flute raise a $1.2 million pre-seed round.
Here’s why it’s important: If you haven’t been following along with this series, you’re — and I mean this in the kindest way — missing out. Haje goes slide by slide, and in this case, taught me a lot about why more can be more in terms of length of deck and why a “chockablock of words” is a top mistake founders make. Read the story here and pitch Haje for the series if you so dare.
If you missed last week’s newsletter
Read it here: “Venture investors to founders: Turn down for what?” We also have a companion podcast out, which you can listen to here: “Founders, whales and the sea change in the entrepreneurial energy.”
Seen on TechCrunch
Seen on TechCrunch+
Same time, same place, next week? Talk soon,
Twilio gets hacked, teens ditch Facebook, and SpaceX takes South Korea to the moon – TechCrunch
Is Facebook for old people? If you’ve got a teenager around the house, you’ve probably heard them say as much. The most read story this week is on a Pew study that suggests this generation of teens has largely abandoned the platform in favor of Instagram/YouTube/TikTok/etc.; whereas in 2014 around 71% of teens used Facebook, the study says in 2022 that number has dropped down to 32%.
Mark Cuban sued over crypto platform promotion: “A group of Voyager Digital customers filed a class-action suit in Florida federal court against Cuban, as well as the basketball team he owns, the Dallas Mavericks,” writes Anita, “alleging their promotion of the crypto platform resulted in more than 3.5 million investors losing $5 billion collectively.”
A troubling layoff trend: While tech layoffs might, maybe, hopefully be showing signs of slowing, Natasha M points out a troubling trend: some companies are announcing layoffs only to announce another round of layoffs just weeks or months later.
SpaceX launches South Korea’s first moon mission: South Korea has launched its first-ever lunar mission — a lunar orbiter “launched atop a SpaceX Falcon 9 rocket” ahead of plans to land on the surface some time in 2030.
Twilio gets hacked: While it’s unclear exactly what data was taken, Twilio says the data of at least 125 customers was accessed after some of its employees were tricked “into handing over their corporate login credentials” by an intense SMS phishing attack.
Amazon’s bizarre new show: Think “America’s Funniest Home Videos,” but made up of user-submitted footage from Ring security cameras. By now most people probably realize their every step is recorded on a security camera or three — but doesn’t embracing it as Entertainment™ like this feel kind of…icky?
Haus hits hard times: Haus, a company that ships specialized low-alcohol drinks direct to consumers, is looking for a buyer after a major investor backed out of its Series A. The challenge? Investor diligence for an alcohol company can take months, and Haus just doesn’t “have the cash to support continued operations at this time.”
How clean is the air you breathe every day? Aclima co-founder Davida Herzl wants everyone to be able to answer that question, and sat down with Jordan and Darrell on this week’s Found podcast to explain her mission. Meanwhile on Chain Reaction, Jacquelyn and Anita explain the U.S. gov’s crackdown of the cryptocurrency mixer Tornado Cash, and the Equity crew spent Wednesday’s show discussing whether the turbulent market conditions of late will mean we see fewer early-stage endeavors in the months ahead.
What lies behind the paywall? A lot of really good stuff! Here’s what TechCrunch+ subscribers were reading most this week…
Building an MVP when you can’t code: Got a great idea but can’t code? You can still get the ball rolling. Magnus Grimeland, founder of the early-stage VC firm Antler, lays out some of the key principles to keep in mind.
Are SaaS valuations staging a recovery?: “…the good news for software startup founders,” writes Alex, “is that the period when the deck was being increasingly stacked against them may now be behind us.”
VCs and AI-powered investment tools: Do VCs want AI-powered tools to help them figure out where to put their money? Kyle Wiggers takes a look at the concept, and why not all VCs are on board with it.
Digital pensions platform Penfold raises $8.5M Series A led by Bridford Group – TechCrunch
Penfold, a digital pensions platform, has closed a £7m ($8.49m) Series A funding round led by Bridford Group, an investment group.
Also participating in the round was Jeremy Coller, Chief Investment Officer and Chairman of Coller Capital. Penfold also raised additional funding via a crowdfund amongst its customer base. The cash will be used to expand Penfold’s workplace pension division.
Chris Eastwood, Co-Founder at Penfold, commented (in a statement): “It’s been a big year for Penfold – from launching our workplace pension offering, to reaching £100m AUA.”
Bridford Group, lead investor, commented: “The pensions industry represents a huge market – with £8trn in savings in the UK alone. Despite this, many people remain uninterested and unengaged in their pensions. With so many people not saving enough, there’s a real opportunity for a new provider to step in.”
After the FBI raid at Mar-a-Lago, online threats quickly turn into real-world violence – TechCrunch
Threats of violence reached a fever pitch — reminiscent of the days leading up to the Capitol attack — following the news that the FBI raided Trump’s Florida beach club to retrieve classified documents the former president may have unlawfully taken there.
After Trump himself confirmed Monday’s raid at Mar-a-Lago, pro-Trump pundits and politicians rallied around declarations of “war,” and Trump’s ever-fervent supporters called for everything from dismantling the federal law enforcement agency to committing acts of violence against its agents. The situation escalated from there in record time, with online rhetoric boiling over quickly into real-world violence.
By Thursday, an armed man identified as Ricky Shiffer attempted to force his way into an FBI office in Cincinnati, Ohio, brandishing a rifle before fleeing. Law enforcement pursued Shiffer and he was fatally shot during the ensuing standoff with police.
Analysts with the Institute for Strategic Dialogue (ISD), a nonprofit that researches extremism and disinformation, found evidence that Shiffer was driven to commit violence by “conspiratorial beliefs related to former President Trump and the 2020 election…interest in killing federal law enforcement, and the recent search warrant executed at Mar-a-Lago earlier this week.” He was also reportedly present at the January 6 attack — another echo between this week’s escalating online threats and the tensions that culminated in political violence at the Capitol that day.
Shiffer appears to have been active on both Twitter and Truth Social, the platform from Trump’s media company that hosts the former president and his supporters. As Thursday’s attack unfolded, Shiffer appeared to post to Truth Social about how his plan to infiltrate the FBI office by breaking through a ballistic glass barrier with a nail gun had gone awry. “Well, I thought I had a way through bullet proof glass, and I didn’t,” the account posted Thursday morning. “If you don’t hear from me, it is true I tried attacking the F.B.I., and it’ll mean either I was taken off the internet, the F.B.I. got me, or they sent the regular cops…”
In posts on Truth Social, the account implored others to “be ready to kill the enemy” and “kill the FBI on sight” in light of Monday’s raid at Mar-a-Lago. It also urged followers to heed a “call to arms” to arm themselves and prepare for combat. “If you know of any protests or attacks, please post here,” the account declared earlier this week.
By Friday, that account was removed from the platform and a search of Shiffer’s name mostly surfaced content denouncing his actions. “Why did you censor #rickyshiffer‘s profile? So much for #truth and #transparency,” one Truth Social user posted on Friday. Still, online conspiracies around the week’s events remain in wide circulation on Truth Social and elsewhere, blaming antifa for the attack on the Ohio FBI office, accusing the agency of planting documents at Mar-a-Lago and sowing unfounded fears that well-armed IRS agents will descend on Americans in light of Friday’s House passage of the Inflation Reduction Act.
“‘Violence against law enforcement is not the answer no matter what anybody is upset about or who they’re upset with,’ FBI director Christopher Wray said in light of emerging threats of violence this week. Trump appointed Wray to the role in 2017 after infamously ousting former FBI director James Comey.”
Friday is also the five-year anniversary of the Unite the Right rally, which saw white nationalists clad in Nazi imagery marching openly through the streets of Charlottesville, Virginia. The ensuing events left 32-year-old protester Heather Heyer dead and sent political shockwaves through a nation that had largely grown complacent about the simmering threat of white supremacist violence.
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