Monthly Archives: December 2020

News: Joe White MBE appointed new UK Consul-General in SF, with new Technology Envoy role

Joe White MBE — a General Partner of Entrepreneur First, a Greylock backed early-stage deep tech fund — is leaving after being appointed as Her Majesty’s Consul-General, San Francisco, and Technology Envoy to the United States in a new, combined and powerful, role for the UK government. One of the key figures from the last

Joe White MBE — a General Partner of Entrepreneur First, a Greylock backed early-stage deep tech fund — is leaving after being appointed as Her Majesty’s Consul-General, San Francisco, and Technology Envoy to the United States in a new, combined and powerful, role for the UK government.

One of the key figures from the last two decades of the tech industry in the UK, most recently White has been co-chair of GBx, a curated network of British entrepreneurs; a non-executive director for the UK’s Behavioural Insights Team where he advised on social impact technology products; and a former co-founder of Moonfruit, a website and ecommerce platform hosting 7 million sites, which was acquired by Yell.com in 2012. He received an MBE from HM Queen in 2017 for Services to Technology Businesses.

White brings to the Foreign, Commonwealth and Development Office (FCDO) huge experience as an entrepreneur and VC. The appointment is also a first for the UK. White’s role as HM Consul-General has been combined with that of the new role of Technology Envoy to the United States. TechCrunch understands that this will involve high-level activity not just in San Francisco but also in Washington DC, as tech goes up the political agenda under the new Biden Presidency.

White’s combined role will lead the Consulate, manage relationships in the northwest of the US, support the UK Ambassador to the US on areas of shared UK-US interest including technology and entrepreneurship, and support Her Majesty’s Trade Commissioner in “promoting and enhancing the UK as partner of choice in trade, investment and research and development.”

In a statement, White said: “It is an honour to represent the UK at this critical time, and a pleasure to support our world-renowned tech sector which continues to go from strength to strength. I am looking forward to working closely with UK government tech teams in the US and in the UK, to further our growing and important relationship with the US tech community.”

Foreign Secretary Dominic Raab added: “The UK and the US are the largest investors in each other’s economies and this important appointment further underlines our commitment to the tech sector. I am delighted Joe will take on this enhanced role as we look to build back better and support an innovative post-pandemic global economy.”

White will take up his appointment later this year. He will report to Dame Karen Pierce DCMG, Her Majesty’s Ambassador to the United States of America.

TechCrunch Comment:

Joe White just hit a quadruple. He is the right man, in the right place, with the right experience, at the right time.

He’s a former entrepreneur, investor and has worked on both sides of ‘the pond’, so knows the UK and European tech scene as well as Silicon Valley. He has deep connections in all those ecosystems. And it can’t hurt that his wife, Wendy Tan White MBE, is Vice-President at X, (formerly Google X), Alphabet’s moonshot company, and co-founded Moonfruit with him. Furthermore, White is no stranger to the worlds of politics and diplomacy. His father, Michael White, was The Guardian newspaper’s political editor for many years.

Under Prime Minister David Cameron, the UK government was a keen exponent of the tech industry. Brexit cooled its ire in recent years, but the current chancellor, Rishi Sunak, has proved his interest by creating the UK’s Future Fund, hailed as a big success during the COVID period.

The UK and US not only have a shared history, but they also have shared industries. The UK has been the traditional launching pad for US startups into Europe. Likewise, Silicon Valley is now awash with British-born entrepreneurs and investors. But with tensions around the actions of US Big Tech in the UK (the ‘Online Harms’ legislation is aimed at social platforms), controversies over tax and global security issues all on the agenda, it’s right that the Consul General role in SF is bolstered by this new Tech Envoy moniker.

Silicon Valley is also about to get a fellow tech entrepreneur into one of the highest roles the UK government can bestow overseas. There could hardly be a better person for the job.

News: Daily Crunch: Google fires co-lead of its Ethical AI team

Google fires a leading researcher, Stripe launches a new banking service and WarnerMedia shakes up the theatrical business model. This is your Daily Crunch for December 3, 2020. The big story: Google fires co-lead of its Ethical AI team Timnit Gebru, a leading researcher in the field of ethics and artificial intelligence, tweeted last night

Google fires a leading researcher, Stripe launches a new banking service and WarnerMedia shakes up the theatrical business model. This is your Daily Crunch for December 3, 2020.

The big story: Google fires co-lead of its Ethical AI team

Timnit Gebru, a leading researcher in the field of ethics and artificial intelligence, tweeted last night that Google fired her in response to a message she sent to an internal email list.

Casey Newton obtained the email in question, in which Gebru expressed frustration with her treatment at Google and disappointment at its diversity and inclusion efforts: “We just had a Black research all hands with such an emotional show of exasperation. Do you know what happened since? Silencing in the most fundamental way possible.”

Google declined to comment, except to point to an email from Jeff Dean, the head of Google Research, in which he said Gebru had threatened to resign unless certain conditions were met. (“I hadn’t resigned — I had asked for simple conditions first and said I would respond when I’m back from vacation,” Gebru said.)

The tech giants

YouTube introduces new feature to address toxic comments — The feature appears when users are about to post something offensive in a video’s comments section and warns them to “Keep comments respectful.”

Developers can now enroll in Apple’s ‘Small Business Program’ for reduced App Store fees — Just a few weeks back, we learned that Apple would be launching a program to reduce its fees from 30% to 15% for developers earning less than $1 million per year from the App Store.

Android’s winter update adds new features to Gboard, Maps, Books, Nearby Share and more — One of the more fun bits in the winter update will be a dramatic expansion of the Emoji Kitchen.

Startups, funding and venture capital

Stripe announces embedded business banking service Stripe Treasury — The company is partnering with banks to offer a banking-as-a-service API.

Everlywell raises $175M to expand virtual care options and scale its at-home health testing — Earlier this year, Everlywell launched an at-home COVID-19 test collection kit, the first test of its kind to receive an emergency authorization from the FDA.

VSCO acquires mobile app Trash to expand into AI-powered video editing — The deal will see Trash’s technology integrated into the VSCO app.

Advice and analysis from Extra Crunch

VCs who want better outcomes should use data to reduce founder team risk — Using an objective, data-backed process to evaluate teams will help VCs make better investment decisions.

This is a good time to start a proptech company — At least, it’s a good time according to Colton Pace of Fika Ventures.

Boost ROI with intent data and personalized multichannel marketing campaigns — More mass email blasts are not going to get you the connections with prospects you crave.

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

Everything else

All of Warner Bros.’ theatrical movies will get simultaneous releases on HBO Max next year — This includes movies like “Godzilla vs. Kong,” “Mortal Kombat,” “In the Heights,” “Space Jam: A New Legacy” “The Suicide Squad,” “Dune,” the “Sopranos” prequel “The Many Saints of Newark” and “The Matrix 4.”

NASA selects four companies for moon material collection as it seeks to set precedent on private sector outer space mining — The four companies all have rides booked on future commercial lunar lander missions.

Bill Gates just released a plan for US leadership on climate change, including $35B in funding — Gates wrote that we “need to revolutionize the world’s physical economy.”

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.

News: Gift Guide: Games on every platform to get you through the long, COVID winter

It’s a great time to be a gamer — I mean, what else is there to do? And with the prospect of a long winter and lonely holiday season ahead of us, here’s a list of games on all the major platforms that you can really sink your teeth — and a few dozen hours — into.

Welcome to TechCrunch’s 2020 Holiday Gift Guide! Need help with gift ideas? We’re here to help! We’ll be rolling out gift guides from now through the end of December. You can find our other guides right here.

It’s a great time to be a gamer — I mean, what else is there to do? And with the prospect of a long winter and lonely holiday season ahead of us, here’s a list of games on all the major platforms that you can really sink your teeth — and a few dozen hours — into.

Buying for a gamer and have no idea what’s worthwhile? Once you’ve figured out which gaming system is their platform of choice, any of these should be guaranteed wins.

This article contains links to affiliate partners where available. When you buy through these links, TechCrunch may earn an affiliate commission.

All major platforms:

Assassin’s Creed: Valhalla

Screenshot of Assassin's creed valhalla showing a viking on a british landscape

Image Credits: Ubisoft

I genuinely enjoyed AC: Odyssey’s gorgeous landscapes and main characters, but the game systems felt disconnected and arbitrary. That’s much less the case with AC: Valhalla, which tells a similarly sprawling tale of vikings in England but works a little harder to put it together into a cohesive whole. It’s still very much “Ubisoft Game, but with Vikings” but that’s not necessarily a bad thing.

Price: $50 from Amazon

Minecraft Dungeons

I thought this game was a bit limited when it first came out, but since then it has gotten several new areas and cross-platform multiplayer. Between that and its simplified systems and PG-level violence, Minecraft: Dungeons is a great option for families that want to fight monsters together.

Price: $20-30 (depending on platform) from Mojang

Call of Duty: Black Ops Cold War

Reviewers agree: the new CODBLOPS is definitely more CODBLOPS. The latest in the gritty military series is the one everyone will be playing for the next year, so it’s definitely a must-have for quite a few people.

Price: $50-60 (depending on platform) from Amazon

Cyberpunk 2077

Image Credits: CD Projekt Red

Cyberpunk 2077, the futuristic RPG from the creators of the Witcher, isn’t out yet, but it’s one of the most anticipated titles in recent years and your special someone might like the idea that they’re getting it day one. Of course if it’s anything like The Witcher 3, they’re probably going to want to wait a few months for the bugs to get ironed out. But hey, it’s an option.

Price: $50 from Amazon

PS4 and PS5

Spider-Man: Miles Morales

Image Credits: Sony

This semi-sequel to the much-lauded 2018 Spider-Man is smaller in scale but plays even better. Plus it has a wonderfully inclusive cast and tone and feels authentic where the original, for all its strengths, had a pretty flat take on New York. Bonus: If you buy the PS5 version of Miles Morales, you get the remastered 2018 game for free. I’d argue you’re simply not going to find a better bang for your buck right now with any other new game.

Price: $50 on Amazon

Demon’s Souls

Image Credits: Sony

The only “true” next-generation game out there right now is a remake of a PlayStation 3 game, and in many ways it feels like it. But in other ways, it’s the most amazing game on the market right now. If your loved one has enjoyed Dark Souls, Bloodborne, Sekiro, and other incredibly hard games, this is the one to get.

Price: $70 on Amazon

Ghost of Tsushima

Between Nioh 2, Sekiro, and Ghost of Tsushima, there’s a real bumper crop of samurai and ninja action to be had. But Ghost is the broadest and most beautiful of them all — if not necessarily the deepest.

What it lacks in challenge… first of all, is more than made up by the difficulty of those other two games I mentioned, give me a break. But Ghost’s draw is in the unity and beauty of its game world and systems. For example, instead of a quest marker or arrow pointing towards your objective, the wind is just always blowing in that direction. Amazing, right? The single player campaign is remarkably well acted, and a free update has brought a surprisingly extensive multiplayer co-op mode as well. This is truly a game you can lose yourself in. Just don’t start trying to collect everything or you’ll never leave the first area.

Price: $40 on Amazon

13 Sentinels: Aegis Rim

Image Credits: Vanillaware

This totally unique game came out of left field and obsessed me for two solid weeks. A combination of adventure game, visual novel, and tactical action game, 13 Sentinels puts you in charge of a bunch of high school kids piloting giant robots to save the world from alien invaders. (In case you can’t tell, it’s a Japanese production.)

Sound familiar? That’s the idea — and then it starts pulling rugs out from under you and doesn’t stop until the last few minutes. The labyrinthine story, which progresses simultaneously through 13 interwoven narratives, is the very best kind of sci-fi mind-boggler and a pleasure to unravel from start to finish. The combat is also compelling and satisfying, if not particularly deep or challenging. There’s simply nothing else like this out there.

Price: Currently $30 from GameStop

Xbox One and Series X

Halo: The Master Chief Collection

Image of Master Chief from halo

Image Credits: Microsoft

If your loved one is a Halo fan, they’re likely very sad since Halo: Infinite, once a launch title for the new console, won’t be coming out until next year. But it can’t hurt to have the original games all updated and beautified to play through as an appetizer. Plus there’s the famous Halo multiplayer to get everyone through the winter.

Price: $30 from Amazon

Yakuza: Like a Dragon

Image Credits: Sega

The latest in the long-running and beloved Yakuza series of character-driven adventures of Japanese gangsters set in a fictional Tokyo neighborhood, this one changes up the style with a turn-based combat system and new protagonist — but some are calling it the best yet.

Price: $35 from Amazon

Gears Tactics

Image Credits: Microsoft

No one really expected that the Gears of War series would lend itself to a tactics game in the style of XCOM — let alone that it would leapfrog others in the genre and become one of the best you can get, period. Naturally it isn’t quite the urgent, visceral experience that Gears normally is, but this is a surprisingly deep and engrossing game.

Price: $38 from Amazon

Ori and the Will of the Wisps

The sequel to the lauded “metroidvania” Ori and the Blind Forest is technically on several platforms, but the Series X seems to be the absolute best one on which to play it. With beautifully updated art and a silky-smooth framerate, this will look better on that new 4K HDR TV than many “real” next-generation games. But don’t let the beautiful yet cute art style make you think this is will be a cakewalk. Like the first in the series, you’ll need some serious dexterity to complete this platformer.

Price: $30 from Moon Studios

Risky move: Preorder Halo: Infinite

No one is quite sure whether the first Halo of the next generation is going to be as good as everyone hopes, and a delay to early next year didn’t allay anyone’s fears. That said, many a gamer will cherish the idea of playing the latest in this venerable series day one, so pre-ordering a copy is a possibility if none of the other games really ring their bell.

Price: $60 from Amazon

Switch

Mario Kart Live: Home Circuit

Technically this is also a “toy,” because it’s real-life RC carts zooming around your home on an augmented-reality racetrack. We thought it was tons of fun, and it’s a great way to take video games off the TV and into real life… kind of. Just be aware that every player needs their own cart and their own Switch.

Price: $99 from Best Buy

Hyrule Warriors: Age of Calamity

Don’t go into this game expecting a full-on new Zelda title, and you’ll do just fine. This is definitely an action game, and a big, rather mindless one at that. But it’s hard to resist the concept of playing as Link, Zelda, or any of the champions from Breath of the Wild and dispatching enemies by the hundreds.

Price: $50 on Amazon

Super Mario 3D All-Stars

Image Credits: Ninendo

Okay, I gave Nintendo some guff over the perfunctory nature of this collection of amazing games. I’ve wanted to replay Mario 64 for years and was waiting for Nintendo to touch it up just a bit — but it, and Super Mario Sunshine, and Super Mario Galaxy, are virtually unchanged in this retro package. Really, you couldn’t make it widescreen? But for most, the chance to play these games again (or for the first time) on the Switch is worth the price of admission, period.

Price: $60 from Amazon

PC

Spelunky 2 and/or Hades

The “roguelite” genre, with its randomly generated levels and complex interlocking systems, has grown in popularity and sophistication for years — and here we have two fine examples that take the genre in different directions.

Spelunky 2 is the most traditional, in a way. Sequel to one of the best games out there, this one adds more variety, more weirdness, and more challenge to the unforgiving platforming of the original. Like before, every death (and there will be a lot) is avoidable and while some runs may last only seconds, it’s hard to be deterred when you know that if you just paid a little more attention, or saved your bombs, or went over that other way… just one more game. (Pro tip: Buy a couple copies for friends and indulge in jolly cooperation.)

Hades combines the procedurally generated levels with an incredibly beautiful art style and an ingenious story and progression system. Escaping from the ever-shifting landscape of Hades, you’re going to die over and over, but as a young god that’s more inconvenience than obstacle. Meanwhile every death and every inch of progress moves you closer to the mystery of your birth in a clever modern take on Greek mythology. It’s honestly hard to imagine how Hades could be improved in almost any way.

Price: $20 for Spelunky 2 on Steam | $25 for Hades on Steam

Crusader Kings III

Image Credits: Paradox

This long-awaited strategy title puts you in the throne room of a European medieval dynasty, where you can do… pretty much anything to get ahead. Assassinations, proxy wars, brutal taxes, religious cannibalism, strategic marriages… it’s all on the table. This is a story-telling engine that’s remarkably robust and, once you get past the initial learning curve, very fun. It’s also very, very nerdy, and proud of it.

Price: $50 on Steam

Other options

Game & Watch: Super Mario Bros

Nintendo's Super Mario Bros handheld system

Image Credits: Devin Coldewey / TechCrunch

This little gadget has the original Super Mario Bros, its sequel (not the weird one — what we knew as “The Lost Levels”), and a remade LCD game all built in. It’s a charming device and the games play well, plus you can turn it off and resume progress later, making it that much easier to get through the whole game.

Price: $50 (but finding one in stock can be challenging.)

Backbone One for iPhone

Image Credits: Backbone

Got a friend who prefers to game on their phone? The Backbone is built for them. This snap-on controller brings buttons and analog triggers (and good ones, at that!) into the iOS gaming world, along with a surprisingly solid companion app that can do things like record your gameplay and help you edit and post your highlight reels. It only works with select iOS titles, but the library is growing. TechCrunch Editor-In-Chief Matthew Panzarino reviewed it in October and gave it his stamp of approval with very little reservation.

Price: $99 from Backbone

 

News: What about $30 billion under 30

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines. We’re back with not an Equity Shot or Dive of Monday, this is just the regular show! So, we got back to our roots by looking at a huge number of early stage rounds. And

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

We’re back with not an Equity Shot or Dive of Monday, this is just the regular show! So, we got back to our roots by looking at a huge number of early stage rounds. And a few other things that we were just too excited about to not mention.

So from Chris and Danny and Natasha and I, here’s the rundown:

That was a lot, but how could we leave any of it out? We’re back Monday with more!

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

News: Henry picks up cash to be a Lambda School for Latin America

Latin America’s startup scene has attracted troves of venture investment, lifting highly-valued companies such as Rappi and NuBank into behemoth businesses. Now that the spotlight has arrived, those same startups need more talent than ever before to meet demand. That’s where one seed-stage Buenos Aires startup wants to help. Henry has created an online computer

Latin America’s startup scene has attracted troves of venture investment, lifting highly-valued companies such as Rappi and NuBank into behemoth businesses. Now that the spotlight has arrived, those same startups need more talent than ever before to meet demand.

That’s where one seed-stage Buenos Aires startup wants to help. Henry has created an online computer science school that trains software developers from low-income backgrounds to understand technical skills and get employed. The company was founded by brother-sister duo Luz and Martin Borchardt, as well as Manuel Barna Ferrés, Antonio Tralice and Leonardo Maglia.

The Henry team.

The company claims that there’s an estimated 1 million software engineering job openings in Latin America, but fewer than 100,000 professionals that have training suitable for those roles.

“Higher education is only for 13% of the population in Latin America,” says Martin Borchardt, CEO and co-founder of Henry . “It’s very exclusive, very expensive, and has very low impact skills. So we’re giving these people an opportunity.”

With 90% of graduates coming from no formal higher education background, Henry seeks to help bring more back-end junior developers and full-stack developers into startups. Henry offers a five-month course that goes from Monday to Friday, 9 a.m. to 6 p.m., which focuses on software developer skills. Beyond technical training, Henry gives participants job coaching, resume workshops and up-skilling opportunities post-graduation.

To make the school more affordable, Henry looks to take on the same strategy used by Lambda School, a YC-graduate that has raised over $122 million in known funding: income-share agreements. The set-up would allow for boot camp participants to join the program at zero upfront costs, and then only pay once they get hired at a job.

Lambda School’s ISA terms ask students to pay 17% of their monthly salary for 24 months once they earn $4,167 monthly. The students pay a maximum of $30,000. Henry takes a much smaller slice of the pie, partly because salaries are lower in Latin American than in the United States. Henry asks students to pay 15% of their monthly salary for 24 months once students earn $500 a month.

If a Henry student doesn’t get employed in a job that allows them to make $500 a month within five years after the program completes, they are off the hook for paying back the boot camp.

Henry is also focused on helping more women get into the field of software development. Internally, Henry’s remote team is 20% women, 64% men. The current students reflect the same breakdown.

One issue with coding boot camps is that while it might help a student go from unemployed to employed, the lack of credential and degree might limit career mobility past that first job. For that reason, Henry has created a database of alumni resources, including up-skilling and reskilling opportunities in the latest skill, which will be free of charge for graduates.

Henry needs to execute on job placement to be successful in its field. Currently, more than 80% of students in Henry’s first cohort have found jobs, but it’s too soon in the startups’ trajectory to get a stronger metric on that front. About four Henry graduates have been employed by the startup.

The need for more talent in emerging countries has not gone unnoticed. Microverse, also funded by Y Combinator, is similarly using income-sharing agreements to bring education to the masses in developing countries, including spaces in Latin America. Henry thinks the competitor is approaching the dynamic too broadly.

“They’re focusing on all emerging markets and don’t teach to Spanish speakers,” Borchardt said. Henry, alternatively, focuses on Spanish speakers, over 60% of its market in Latin America.

What if Lambda School, the source of Henry’s inspiration, was to break into Latin America? The founder added that the richly funded company has tried, and failed, to expand into international geographies, including China and Europe, due to fragmentation.

Currently, Henry has graduated 200 students and is working with 600 students across Colombia, Chile, Uruguay and Argentina. It plans to expand into Mexico and to bring on Portuguese instruction.

Now, VCs are giving Henry some cash to do so. After going through Y Combinator’s Summer batch, Henry announced today that it has raised $1.5 million in seed funding in a round led by Accion Venture Lab, Emles Venture Partners and Noveus VC. There were also a number of edtech angel investors from Latin American that participated in the round.

“I love the human interaction within instructors and our staff and students,” Borchardt said. “That is something very powerful of Henry compared to a MOOC. The biggest challenge is how do you scale maintaining those assets that bring you that?”

News: Fantasy startup Esports One raises $4M more

Esports One, a startup bringing the fantasy approach to esports, is announcing that it has raised an additional $4 million in funding. When I first wrote about Esports One in April, co-founder and COO Sharon Winter described it as the first “all-in-one fantasy platform” in the esports world, allowing you to research players, create fantasy

Esports One, a startup bringing the fantasy approach to esports, is announcing that it has raised an additional $4 million in funding.

When I first wrote about Esports One in April, co-founder and COO Sharon Winter described it as the first “all-in-one fantasy platform” in the esports world, allowing you to research players, create fantasy teams and watch games, with an initial focus on the North American and European divisions of League of Legends.

According to the Esports One team, creating this platform required building out a set of data and analytics products, as well as using computer vision technology that can track game activity (and update player stats) without relying on a publisher’s API.

The startup says its user base has been growing by more than 25% month-over-month. It may also have benefited from the pause in professional sports earlier this year, while CEO and co-founder Matt Gunnin told me recently that he also sees fantasy as a way to make video games accessible to a broader audience — he recalled one Esports One user who introduce his sister to League of Legends using the fantasy platform.

“I use the example of growing up and sitting there with my dad, watching a baseball game, he’s telling me everything that’s happening,” Gunnin said. “Now it’s the opposite — parents are sitting and watching their kids.”

Many parents, he suggested, are “never going to pick up a mouse and keyboard and play League of Legends,” but they might play the fantasy version: “That’s an entry point … if we can make it easily accessible to individuals both that are hardcore gamers playing video games and watching League of Legends their entire life, as well as someone who has no idea what’s going on.”

The new funding was led led by XSeed Capital, Eniac Ventures, and Chestnut Street Ventures, bringing Esports One to a total of $7.3 million raised. The company also recently signed a partnership deal with lifestyle company ESL Gaming.

Gunin said the money will allow the company to grow its Bytes virtual currency, which players use to enter contests and buy customizations — starting next year, players will be able to spend real money to purchase Bytes. In addition, it’s working on native iOS and Android apps (Esports One is currently accessible via desktop and mobile web).

Gunnin and his team also plan to develop fantasy competitions for Rainbow Six: Siege, Rocket League, Valorant and Fortnite.

“As a fairly new player in the esports world, we’ve seen immense determination and grit from Matt, Sharon, and the whole Esports One team to grow into a household name, ” said XSeed’s Damon Cronkey in a statement. “I’m excited to be partnering with a company that will deliver new perspectives and features to an evolving industry. We’re eager to see how Esports One grows in 2021.”

News: This is a good time to start a proptech company

I believe building a successful proptech company is less about anticipating economic upswings and markets and more about timing and taking advantage of the right technological trends.

Colton Pace
Contributor

Colton Pace is an investor at Fika Ventures. He previously held roles investing at Vulcan Capital and Madrona Venture Labs.
More posts by this contributor

Like many things in life, building great businesses is all about timing. We’ve seen multibillion dollar failures from the dot-com era such as Pets.com and Webvan be reincarnated a decade later as Chewy and Instacart — this time as runaway successes.

The same could be said about real estate technology companies, but startups in this category have not gotten the same opportunity and attention as their peers in other sectors.

For decades, proptech has received the short end of the stick. Real estate is the world’s largest asset class worth $277 trillion, three times the total value of all publicly traded companies. Still, fintech companies have received seven times more VC funding than real estate companies.

These lower levels of investment were previously attributed to the slow rate of technology adoption and digitalization within the real estate industry, but this is no longer the case. Companies in real estate are adopting innovation faster than ever. Now, 81% of real estate organizations plan to use new digital technologies in traditional business processes and spending on tech and software is growing at over 11% per year. Technological adoption has even accelerated throughout the pandemic as enterprises were forced to quickly adapt.

Historically, the strength or weakness of the broader economy and the real estate industry have been tightly coupled and correlated. While some may point to COVID-19’s negative impact on certain parts of real estate as evidence that proptech can only thrive in boom times, I believe building a successful proptech company is less about anticipating economic upswings and markets and more about timing and taking advantage of the right technological trends. In short, this is as good of a time as any to start a proptech company if you know where to look.

History is littered with examples of companies that have done just this. Let’s take a look at three:

Procore

  • Founded: 2002.
  • Early traction: Used by celebrity housing projects in California.
  • Inflection point: 2012 (people start using iPads and smartphones on job sites).
  • Today: $5 billion valuation as of May 2020.

Procore was founded in 2002 in the aftermath of the dot-com bust, well before widespread WiFi and five years before the iPhone. The company saw the capability for software and technology to transform the construction industry long before practitioners did. Its team faithfully and stubbornly kept at it through the financial crisis, but only had $5 million in revenue by 2012. Here’s where the timing kicks in: At this time, iPads and smartphones had become more common on worksites, enabling widespread adoption.

Realizing this change in-market and adapting to it, Procore strategically priced its product as a subscription, rather than based on headcount, as was typical in the industry. In this way, early customers like Wieland and Mortenson got their subcontractors and temp employees to use the product, which then created a flywheel effect that spread Procore to other projects and clients. Fast forward to today, Procore now has more than $290 million in ARR and is valued over $5 billion.

Procore’s persistence and agility ultimately enabled it to capitalize on the right technological trends and shifts, despite what initially seemed like a poorly timed decision to start a software company in a recession. Procore is now on a venture exit path as it continues to acquire new-age proptech companies like Avata Technologies, Honest Buildings and BIMAnywhere.

Zillow

  • Founded: 2006.
  • Early traction: Launched with 1 million website visits.
  • Inflection point: 2009 (financial crisis mindset).
  • Today: Public — $27 billion market capitalization.

Zillow was founded by the co-founders of Hotwire and Expedia. While that might not seem relevant, the vision to bring transparency to consumers is the connecting line, the mission being to provide access to siloed data and knowledge to previously convoluted industries. Before Zillow, homeowners did not know how much their house was worth. With Zillow’s Zestimate, consumers can put a price tag on every roof across North America.

News: Developers can now enroll in Apple’s “Small Business Program” for reduced App Store fees

Just a few weeks back, we learned that Apple would be launching an “App Store Small Business Program” that would reduce its fees from 30% to 15% for developers earning less than $1M per year from the App Store. That program is starting to roll out now, with Apple opening up the enrollment process just

Just a few weeks back, we learned that Apple would be launching an “App Store Small Business Program” that would reduce its fees from 30% to 15% for developers earning less than $1M per year from the App Store.

That program is starting to roll out now, with Apple opening up the enrollment process just this morning.

Apple outlines the program here, with a few things standing out:

  • It’s open to both new developers and existing developers who made less than $1M this year across all of their apps combined.
  • Once a developer surpasses $1M for the year, the rate goes back up to the standard rate.
  • Once the program kicks in after December 31st, participating developers won’t be able to transfer apps to/from other accounts — presumably so that people don’t go “Oh, this app is making too much money. Quick, switch it to another account!”. “If you initiate an app transfer after December 31, 2020, or accept a transfer of an app that was initiated after December 31, 2020,” Apple writes, “you will no longer be eligible to participate in program.”
  • If you oversee multiple developer accounts, Apple wants you to identify them.

Apple says that if you enroll by December 18th, reduced fees should be active by January 1st of 2021. Existing developers can still enroll after that cutoff, but things get a bit more complicated, with reduced fees generally kicking in midway through the next fiscal calendar month.

 

News: Stripe announces embedded business banking service Stripe Treasury

Fintech startup Stripe has announced an ambitious new product today called Stripe Treasury. The company is partnering with banks to offer a banking-as-a-service API. In other words, Stripe clients will be able to provide bank accounts to their customers — the service is invite-only for now. This is part of a bigger trend called embedded

Fintech startup Stripe has announced an ambitious new product today called Stripe Treasury. The company is partnering with banks to offer a banking-as-a-service API. In other words, Stripe clients will be able to provide bank accounts to their customers — the service is invite-only for now.

This is part of a bigger trend called embedded finance. Essentially, instead of separating banking services from other services that you use, embedded finance products provide financial services as close as possible to the end customer in the services that they already use.

Other companies have been working on embedded business banking products, such as Wise. Stripe could take advantage of its existing user base to convince them to use Stripe Treasury for new banking products.

For example, Shopify will use Stripe Treasury for Shopify Balance. If a Shopify merchant wants to hold money, pay bills and spend money from their Shopify account, they can open a bank account in Shopify Balance directly. This way, they can skip the traditional bank account. Behind the scenes, Stripe Treasury powers that feature.

And yet, Stripe doesn’t want to become a bank. As usual, the company is focused on infrastructure and payments. It partners with banks, such as Evolve Bank and Goldman Sachs in the U.S. Eventually, Stripe also plans to launch Stripe Treasury in other countries thanks to partnerships with Citibank and Barclays.

Stripe turns everything into API calls. An API is a programming interface that lets you interact with third-party services using simple instructions. For instance, a developer can take advantage of Stripe Treasury to open bank accounts directly from their service by triggering Stripe’s API.

Similarly, you can move money or pay bills using API calls. Combined with Stripe Issuing, you can also issue a virtual or physical card and connect it to a bank account. Slowly, Stripe is building products that cover a bigger chunk of the payment chain.

News: Two key UK military non-profits join forces to boost veteran training in cyber and tech

Advancements in the tech and the cyber threat landscape are creating vast job opportunities. The global cyber security market is projected to reach £210 billion by 2026. But in the UK, out of 952,000 working aged (16-64) UK military veterans and 15,000 service leavers a year, only 4% of them are working in tech and

Advancements in the tech and the cyber threat landscape are creating vast job opportunities. The global cyber security market is projected to reach £210 billion by 2026. But in the UK, out of 952,000 working aged (16-64) UK military veterans and 15,000 service leavers a year, only 4% of them are working in tech and cyber. This is 20% lower than the non-veteran population. The cost to the UK economy of underemployed or unemployed veterans has been estimated at £1.5 billion over 5 years. This means all this talent – talent which has literally been trained to adapt to fast-moving situations like the one the world finds itself in now – is going to waste, just when the era of massive digitization of business and society is upon us.

So it’s significant that the UK’s RFEA, the Forces Employment charity, is launching a new partnership with TechVets, the non-profit set up to build a bridge for veterans into cyber security and the technology sector.

With the RFEA’s support, TechVets will create extensive new free upskilling and job opportunities for ‘tech-curious’ service leavers and veterans, through its offering of networking, mentoring, signposting and training services, via its new TechVets Academy.

The initiative is timely. It’s estimated that over 173,000 UK military veterans are at risk due to the economic impact of COVID and the ending of the government’s furlough scheme in March 2021.

Since its launch in 2018, TechVets has grown to a community of over 6,000 members and several ‘chapters’ around the UK.

TechVets uses a blend of open-source resources, partner training, and community support, to empower those new to cyber/tech to choose the pathway that is best for them. And it’s all free to veterans and service leavers.

TechVets Programme Director, James Murphy (pictured), is an Army Veteran of 19 years. He joined the 1st Battalion Royal Anglian Regiment in 2000, before transferring to the Intelligence Corps in 2013 after sustaining life-long injuries in Helmand Province, Afghanistan.

In a statement, he said: “Anyone who has held a role in the Forces comes armed with an understanding of the sensitivities of working in security. Ex-Services also possess an innate ability to learn new skills and are natural problem solvers, who can work quickly and fit into a team with ease. Ex-military personnel are also the kind of people who thrive in pressurized, or time-sensitive, situations. These soft skills are incredible assets in the security and technology industries, which can be used to fill the current skills shortage in this area.”

RFEA’s Chief Executive Officer, Alistair Halliday, added: “The TechVets Programme is a fantastic new addition to RFEA’s services that will, no doubt, encourage talented veterans to consider tech and security-based roles that may have otherwise overlooked. It will also help veterans to upskill digitally to help them get into wider roles too.”

TechVets member Gareth Paterson, joined the Army in 1994. He started out as a Tank crewman and then transferred to the Royal Electrical and Mechanical Engineers as an instructor in 2001. He left in 2018, having completed operational tours of Northern Ireland, Former Yugoslavia and Afghanistan. He says his life has been changed by TechVets: “I left the Army as I was at the end of my 24-year career… I did not have a clue what career to move into, then I was introduced to offensive cybersecurity and penetration testing. I joined TechVets and it gave me my first insight into the tools and techniques of penetration testing. After that, I was hooked! The support of everyone at TechVets, and its community, has helped me to gain confidence and push harder. I was able to gain qualifications in penetration testing which improved my job prospects in the sector. By November 2018 I started working as a cybersecurity consultant.”

WordPress Image Lightbox Plugin