Monthly Archives: February 2021

News: Duality scores $14M DARPA contract for hardware-accelerated homomorphic encryption

• February 3, 2021
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Training AIs is essential to today’s tech sector, but handling the amount of data needed to do so is intrinsically dangerous. DARPA hopes to change that by tapping the encryption experts at Duality to create a hardware-accelerated method of using large quantities of data without decrypting it — a $14.5 million contract. Duality specializes in

Training AIs is essential to today’s tech sector, but handling the amount of data needed to do so is intrinsically dangerous. DARPA hopes to change that by tapping the encryption experts at Duality to create a hardware-accelerated method of using large quantities of data without decrypting it — a $14.5 million contract.

Duality specializes in what’s called fully homomorphic encryption. Without descending into the technical details, the main issue with everyday encryption methods — though it’s also sort of the point of them — is that they render the encrypted data totally unreadable, essentially noise unless you have the key to reverse the process. Doing that is computationally expensive with large datasets, and of course once the data is in the clear, it’s vulnerable to hackers, abuse, and other dangers.

There are methods, however, of encrypting data such that it can be analyzed and manipulated without decrypting it, and one of those is fully homomorphic encryption. Unfortunately FHE is even more computationally intense than ordinary encryption, ruling it out for applications where gigabytes or terabytes of data are called for. There are other methods of accomplishing the same ends but no one would cry if FHE suddenly became ten times easier.

DARPA is as interested as anyone else in this field, though it has considerably deeper pockets than your garden variety encryption wonk. This contract is part of a broader effort called DPRIVE, or Data Protection in Virtual Environments, and the stated goal is to develop a special purpose chip — an ASIC pre-assigned the code name TREBUCHET — to accelerate FHE by, hopefully, an order of magnitude or more.

The Duality team will bring in experts from USC, NYU, CMU, SpiralGen, Drexel University, and TwoSix Labs. The company has been in the game for a long time and has actually worked with DARPA before, so this is not new territory for them.

“Duality team members have been supporting DARPA-funded innovation and application of FHE for over a decade. Some members of our team developed the first ever prototype HE hardware accelerators under the DARPA PROCEED program starting in 2010 and are lead developers for the PALISADE open source FHE library, first developed for the DARPA SAFEWARE program in 2015,” said Duality Labs director and principal investigator for the contract, David Bruce Cousins, in a press release.

As you can see, they’re not short on acronyms either.

It’s not totally clear what the timeline is on this, but considering the state of the technologies involved I wouldn’t expect results before at least two or three years from now.

News: Apple urged to root out rating scams as developer highlights ugly cost of enforcement failure

• February 3, 2021
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Apple is facing calls to beef up enforcement against fake reviews and rating scams after a developer took to social media to shine a light on unfair practices he’s forced to compete with as a result of fraudulent activity on the App Store not being rooted out by the tech giant. Kosta Eleftheriou, one of

Apple is facing calls to beef up enforcement against fake reviews and rating scams after a developer took to social media to shine a light on unfair practices he’s forced to compete with as a result of fraudulent activity on the App Store not being rooted out by the tech giant.

Kosta Eleftheriou, one of the founders of the Fleksy keyboard app (who was acquihired by Pinterest in 2016), has — since March 2018 — been applying his expertise in autocorrect algorithms to make typing on the Apple Watch’s tiny screen not only possible but “simple, enjoyable and highly effective”, as Forbes’ reviewer put it.

His app, FlickType, has also been described by app reviewers as “astonishingly accurate”, a “fundamentally better keyboard” and “way faster” than the letter-by-letter scribble method Apple supports natively.

User reviews also include a large amount of glowing five-star ratings. The overall rating from users currently is 3.5 because a number of lower scores have pulled down the average. But if you take the time to dig in the developer can be seen responding consistently and constructively to issues being raised by users who leave lower scores.

Sometimes complaints are related to Watch platform issues outside his control (as Apple limits how third party text input can be accessed). Missing features are another common issue — and in many responses Eleftheriou responds by saying he’s added the setting the person was after (such as the ability to disable Auto-Correction) or highlighting a “brand new look & feel to make typing even easier”. Other times he thanks users for raising bugs that he says have now been fixed.

Anyone reading how specifically each complaint is addressed would be confident the developer of FlickType is working hard to make sure the app meets customers expectations. Even though the overall rating means other Watch keyboard apps are ‘rated’ higher overall.

The problem for Eleftheriou is all his genuine hard work is being undercut by copycat app makers who are able to leverage weak App Store enforcement to profit unfairly and at his expense.

The scam goes like this: A bunch of Watch keyboard apps are published that purport to have the same slick features as FlickType but instead lock users into paying eye-wateringly high subscription fees for what is, at best, a pale imitation.

You might expect quality to float to the top of the App Store but the trick is sustained by the clones being accompanied by scores of fake reviews/ratings which crowd out any genuine crowdsourced assessment of what’s being sold.

Fake reviews outnumber the real deal. It’s only if you take the time to read through the comments that alarm bells might start ringing…

“Wish I read the reviews before buying. I can’t even get it to work on my watch,” runs a one-star review of WatchKey, one of the rival apps Eleftheriou has complained about — which nonetheless has a higher overall rating than his app owing to also having a very large proportion of five-star reviews.

“We are so sorry for any inconvenienced caused. Please kindly email us to describe more about your scenario so that we can support you as soon as possible,” is WatchKey’s generic response to the one-star review.

“Terrible,” writes another one-star reviewer. “I bought this app to use T9 on my watch. I haven’t been able to get T9 to work on my watch, I’ve also reached out to the customer service email that’s listed on the app. But I haven’t gotten a response, I would advise to find a different app.”

WatchKey’s response to another abysmal verdict on its software? More platitudes: “Thank you for your feedback. Unfortunately, we haven’t received your email yet. Please kindly email us once more via support@vulcanlabs.co to describe more your scenario so we can support you as soon as possible.”

The pattern repeats across negative reviews. Even one of the ‘five’ star reviews warns: “You need to pay if you want to use the T9. They make you write a review to ‘unlock’ and then they ask for a payment.”

One component of the manipulation involves posting generic platitudes to do the bare minimum required by Apple to manage (genuine) negative reviews. The other is flooding listings with fake five star reviews to ensure the app’s overall rating remains high. Step 3: Profit.

Eleftheriou’s Twitter thread highlights some of what he says are “hundreds” of fake five star reviews which are being used to drive Watch owners toward downloading the malicious clones — using wording that refers to non-existent features or references things you’d be doing on other types of devices (suggesting the text may have been cut and pasted from genuine reviews elsewhere).

A quick Google search for ‘buy ios reviews’ returns a staggering 643M results — including ads for companies touting “app reviews, installs and ratings [as] the best way to improve the rank of your apps at Appstore and Google Play” and selling “high quality iOS app reviews with ratings for $2.5… from 100% Real Users”.

Clearly selling fake reviews is a booming business — which in turn speaks to the woeful lack of effective enforcement.

In an extra fake kicker, Eleftheriou found that one of the scammy competitors had even ripped off his own app promo video — which was demoing the features offered by FlickType — and used it in ads targeting app consumers on Facebook and Instagram.

Facebook does have policies against third-party infringement (under section 4 of its prohibited content policy) — but you might as well whistle for pro-active enforcement from the adtech giant. It only acts when it gets a complaint of infringement so preventing abuse of his marketing materials would require Eleftheriou to spend even more of his time hunting for and reporting the malicious ads ripping off his stuff. (“I did report and Facebook did eventually take it down. But… I knew this was not going to be any sort of lasting relief,” he confirms.)

Of course the really big kicker here is that Apple’s rules for developers clearly stipulate that submitting fraudulent reviews is a violation of the developer program licence agreement.

Its App Store review guidelines also warn that developers who attempt to cheat the system (such as by manipulating ratings) may only have their apps removed from the App Store — and could be expelled from Apple’s developer program entirely.

So — to put it politely — it’s not a good look for Apple that an indie developer with proven expertise and reputation is having to spend so much resource fighting App Store scams because its own enforcement has failed to stamp them out. To the point where he feels the only path forward is to resort to a public call out on social media to highlight systematic enforcement failures.

Eleftheriou tells TechCrunch he decided to raise the complaint on social media after what he describes as “simply depressing results” from engaging with Apple’s official ‘app dispute’ channel.

“They put you in contact with the other developer in question, and oversee the thread while they hope you will resolve the issue with the other party directly,” he explains. “The scammers I complained about in that dispute weren’t even the bigger scammers I mention in my Twitter thread. Yet, the complaint I had with them barely got addressed, and there was no response from Apple whatsoever on the issue of the fake ratings and reviews. Simply a ‘if we don’t hear back from you very soon we consider the matter resolved’. We even reached out to Apple privately after that but got no response.”

“What was most impressive to me, was that in the presence of the Apple legal team, the scammers did not feel threatened one bit — almost as if they know Apple is unlikely to do anything,” he adds. “In my view, Apple simply does not devote enough resources on this area.”

Since raising the issue on Twitter, Eleftheriou has reported a partial win — in that some of the apps he had complained about have been taken down from the App Store. (At the time of writing Apple has not made any public statement confirming any action.)

However the developer accounts do not appear to have been banned at this time. “It’s astounding that even pulling a scam like that, doesn’t get your developer account revoked!” Eleftheriou told us. “I mean if that didn’t do it, what would??”

We reached out to Apple about this issue and it provided some background information related to its developer policies — which forbid attempts to cheat the system (such as by trying to trick the review process, steal user data, copy another developer’s work, or manipulate ratings or App Store discovery), among other relevant provisions.

We also asked Apple if it’s considering any policy changes in light of the issues raised by Eleftheriou — and will update this post with any response.

“The main issue in my view is not the cloning here. I didn’t even care that they were using my name, or made their screenshots similar to mine etc. If only there was a system to better prevent fake ratings and reviews, none if this would matter,” Eleftheriou also told us. “People would be able to collectively protect themselves through their 1-star ‘votes’ but when that system is allowed to get rigged, everything else goes out the window.

“The promise of ratings and reviews you can trust does not exist any more which erodes consumer trust at an ever accelerating pace,” he adds. “I did a Google search to see what those ‘companies’ look like, if you want to buy ratings and reviews. These are proper, full blown companies, with support systems, and claims that their ratings won’t get deleted by Apple, unlike their competitors. It was shocking to see that this is an industry that is thriving.”

The issue of fake reviews certainly goes far beyond Apple’s App Store. And is a very insidious one.

Fake reviews are pretty much a universal experience across the Internet — whether you’re trying to buy stuff on Amazon, looking at places to visit on Tripadvisor or trying to find a local dentist with the help of reviews on Google Maps (in short; don’t) — given how many platforms now incorporate user reviews.

But the issue does look especially toxic for Apple.

A core part of the USP for its App Store is the claim that Apple’s review process sums to a higher quality, more trustworthy experience than alternative marketplaces that aren’t so carefully overseen.

So a failure to do more to enforce against review scams and rating manipulations risks taking a lot more shine off Apple’s brand than Cupertino should be comfortable with.

Simply put: Consumers expect a higher standard from Apple. That’s why they’re willing to pay a premium for its products. Under-resourcing App Store review and enforcement thus looks like a false economy — not least because it risks driving quality developers like Eleftheriou away.

If a developer with so much pedigree can’t reliably sell his wares on the App Store what does that say about Apple’s ‘premium’ marketplace?

The issue is also likely to be increasingly on the radar of consumer watchdogs and regulators in the coming years. The European Union, for example, is planning to bake binding transparency and reporting requirements into incoming platform regulations — as it seeks to promote fairness and accountability in digital businesses.

While an EU Omnibus Directive that came into force at the start of last year — with a two year deadline for Member States to transpose it — aims to beef up consumer rights through enhanced enforcement and transparency requirements — including directly addressing the issue of fake reviews by placing an obligation on traders to take ‘reasonable and proportionate’ steps to ensure reviews are genuine, among other measures.

In the EU platforms will soon start being required to ‘justify’ their enforcement failures vis-a-vis fake reviews. And if they can’t, well, the regime includes tough ‘GDPR-level’ fines for breaches of consumer protection law. So the costs won’t only be reputational, as currently.

The UK’s Competition and Markets Authority, meanwhile, has also been cracking down on the trade in fake reviews — specifically targeting Facebook, Instagram and eBay in recent years. Further attention to the issue from UK oversight bodies, which are now operating independently of the EU, also seems likely.

News: Lightspeed and Max Levchin bet on Balance to bring B2B payments into the digital world

• February 3, 2021
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Consumer payments is by no means a solved problem (I’ll trigger one hundred blockchain people if I say otherwise), but it sure as heck a pretty improved one. Checkout is a breeze with modern tools ranging from Stripe and PayPal to Fast and Rapyd to Apple and Google Pay. If you happen to need financing,

Consumer payments is by no means a solved problem (I’ll trigger one hundred blockchain people if I say otherwise), but it sure as heck a pretty improved one. Checkout is a breeze with modern tools ranging from Stripe and PayPal to Fast and Rapyd to Apple and Google Pay. If you happen to need financing, on-the-spot lending platforms like Affirm, which recently debuted on NASDAQ and is currently valued at $26 billion, will extend that financing nearly instantaneously.

Then you head over to B2B payments … and you recoil in horror as you migrate away from a utopian future of promise to the ruins of an antiquated past. A mash-mash of payment methods from paper checks to wire transfers get sent against invoices, none of which are automatically synchronized across financial information systems. Financing is complicated and offered by a bank through — gasp — an actual phone call. Shudder, because there probably involves a fax machine somewhere in that loop.

Balance is looking to modernize all of it, as fast as possible.

Balance offers efficient B2B payments that allows merchants to offer a variety of payment methods including ACH and bank wires as well as a variety of payment terms including payment on delivery, net payment terms, and payment by milestone. Behind the scenes, Balance underwrites the terms of those transactions requiring financing by evaluating the risk of the customer, the merchant, and the specific payment terms selected. Balance is built on top of Stripe and offers all of Stripe’s credit card payment options, but then extends far beyond them.

Balance’s checkout flow includes options to pick financing terms and means of payment. Photo via Balance.

Take, for instance, your typical SaaS offering. Typically, employees will buy individual seat licenses to the software with their corporate cards (managed maybe with Brex), a payment facilitated through Stripe or PayPal. As a company spends more and more on that particular software, one of the two parties will reach out and negotiate a comprehensive enterprise rate for single payment. It is here that Balance becomes key. That full payment could be done on Balance, with net 30 payment terms using a bank wire all automatically synced against an invoice offered by the service to the customer.

B2B payments is a massive market measured in the tens of trillions globally, which is perhaps one reason why Balance has an all-star fintech investing syndicate behind its seed round. It raised $5.5 million from Tal Morgenstern of Lightspeed, Stripe and Max Levchin through his SciFi VC. Lightspeed previously backed Levchin’s Affirm. Balance was part of the summer 2020 batch of Y Combinator, although declined to appear at demo day and remained in stealth as its seed round had already been locked in. UpWest, which invests in Israeli companies heading to the U.S. market, also invested.

Balance was founded by Bar Geron and Yoni Shuster in late 2019 to early 2020 and came through their experience working at PayPal together. “PayPal is a key part of the story,” Geron said, describing how the duo learned about the consumer payments world. Shuster stayed on at PayPal, while Geron headed to Behalf, a company that also works on B2B financing and cash flow management. Geron said that Behalf was a “pain point solution” to the challenge of offering net payment terms, but that the company didn’t attempt to digitize the mostly analog model of payments. Geron saw an opportunity and linked up with Shuster to take a more expansive approach to the problem.

Balance founders Bar Geron and Yoni Shuster. Photo via Balance.

Our dream is to “make B2B payments as easy as card payments,” Geron said. “What we wanted to do is to make it as easy as Stripe … take a snippet of code and just put it on your site.” With that in place, Balance’s other features like invoice syncing and financing become instant features.

Through Y Combinator, the team learned that other tech companies constantly confronted these problems, and that they would serve as useful first customers. The critical customers though in Geron’s mind are B2B marketplaces where there are few solutions to synchronize the complexities of marketplace transactions. Geron says that “we have several customers in that space.” Another key customer segment are service providers who work on milestone-based payments, such as 20% upfront and 80% on delivery. “We automated [all that] and put it online,” he said.

Balance makes money on what is known as a “factoring fee” where it pays the merchant ahead of the payment from the customer. Geron noted its 2%, although the actual rate varies based on the risk involved.

The two founders are based in Israel, although like most startups these days, they have a distributed workforce.

News: Beam raises $9.5 million to build a web browser that collects ideas

• February 3, 2021
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Beam has raised a $9.5 million Series A round. The company is working on a new web browser that completely rethinks the way you start a web session and browse the web. The startup is founded by Dom Leca and Sébastien Métrot. Dom Leca previously worked on Sparrow, an email app with an opinionated design.

Beam has raised a $9.5 million Series A round. The company is working on a new web browser that completely rethinks the way you start a web session and browse the web. The startup is founded by Dom Leca and Sébastien Métrot. Dom Leca previously worked on Sparrow, an email app with an opinionated design.

Pace Capital is leading today’s funding round. Several business angels are also participating, such as Christan Reber, Harry Stebbings and Albert Wenger. Existing investors Spark, Amaranthine, C4V and Alven are also investing once again.

Beam is also announcing that it is acquiring RadBlock, an ad blocker for Safari.

If you’re not familiar with Beam, I encourage you to read my previous article on the company — I describe how the product is going to work and the reasoning behind it.

In short, Beam is a web browser focused on knowledge. Many people spend a ton of time mindlessly browsing the web. When you close the last tab, you realize that you didn’t learn much and you don’t have any note.

You can bookmark stuff, but chances are you either don’t use bookmarks or you never check them. And if you want to find something again, you often end up entering a Google query and starting from scratch.

With Beam, every time you search for something, it creates a new session. Each session is represented by a note card. When you’re done browsing, the note card summarizes your findings. Your search query is the title of the card, the most important sites appear near the top of the note. Irrelevant content is listed at the end of the note.

You can then add text, remove links, reorganize stuff and create a full-fledged note. Basically, you end up creating comprehensive notes without even realizing it.

Beam is an ambitious project and the company will have to iterate on that initial idea. But it sounds like a great way to start using the web as a kid. You get to learn more about your passions based on what you do on the web.

Right now, there are seven people working for Beam. The company is going to hire machine learning and natural language processing experts as well as more developers.

News: Miami won’t be the next Silicon Valley because we don’t need another one

• February 3, 2021
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Miami is reflective of the future of global startup hubs. It won’t be the next Silicon Valley, because we don’t need another one.

The rush of founders and investors from the West Coast to states like Texas and Florida are the precursor for something bigger, a movement decades in the making.

The future of startups is a decentralized, global ecosystem. Where wealth and knowledge isn’t concentrated, but shared and open. Where there aren’t capitals, but networks.

Miami has had a head start.

Let’s set the scene. Miami already ranks among the world’s most prominent (nontraditional) startup hubs, and 2020 saw more big names in tech migrate to Florida. Miami Mayor Francis Suarez has been spurring on the influx with an extremely popular Twitter campaign.

These are signs of what globally minded business savvies already know is true. The world is ready for Miami as the pioneer of future tech hubs. Because the city isn’t just a launching pad for U.S. startups with interests in Latin America. It’s a strategic landing pad for global startups who want a presence in the Western Hemisphere.

Across the globe, international opportunities for founders are growing: There is greater connectivity and greater potential for emerging market entrepreneurs to produce life-changing products.

Where will those entrepreneurs want to have a presence? At the heart of global investor and entrepreneur networks, in true melting pots, and at crossroads between mature and emerging markets.

That’s why Miami is in focus right now, but it’s only the first of many cities that will soon be a part of this global trend.

Here’s why Miami is spearheading this new global grid of startup ecosystems.

1. Global tech is no longer concentrated — it’s fragmented across the world

Two-thirds of the world’s top startup ecosystems are outside of North America. Not only that, but 70% of professionals believe that technology power is dispersing away from Silicon Valley. The Bloomberg Innovation Index bumped the United States down from top spot in 2013, to No. 9 in 2020. Tech knowledge and power is growing in Europe and Asia, flourishing in cities like Shanghai and Berlin.

Similarly, microbusinesses will increase (we’re already seeing a surge in new businesses being created around the world), and less of them will have zip codes.

So, when big businesses or VC firms leave/explore outside Silicon Valley, or the United States entirely, they’re not building more of the same, they’re showing us that Silicon Valley is no longer the only M.O. The emerging M.O. is borderless and connected: an inclusive network. It gives investors greater access to more distant business opportunities. It allows entrepreneurs to choose the most convenient place to build a company — and save huge amounts of overhead — while also sharing more expertise.

2. You can build global companies from emerging hubs

Startups in emerging markets have always received a mere fraction of the funding available to U.S. startups. Which means that when money dries up across the board, they are under even more pressure to come up with the most innovative solutions just to survive.

Empowering these local entrepreneurs is the fact that today’s problems need local solutions — from health to logistics, these verticals all require inherent knowledge of domestic infrastructure and services.

The potential here is huge. Emerging markets house the greatest world populations — China, India, Brazil, Mexico, Nigeria… — and language and connectivity barriers are slowly melting away, with mobile internet use surging.

Investors are already perking up to the enormous value of emerging markets, from Asia to Latin America, especially as the strength of the U.S. dollar drops. Just in Q4 2020, VC investment in Latin America saw a 93% growth over Q4 2019, according to Pitchbook.

What does this mean for emerging tech hubs? First, there will be more of them, more distributed and with more funding. Second, we’re going to see a stronger flow of emerging market startups serving customers in the United States to offer services with proven traction, rather than vice versa.

The disruptive products these companies develop and test on millions of users back home find fertile markets not only in the United States, but in other emerging markets with similar needs. Many such companies will want to use the United States as a strategic operating base while keeping the engineering teams in their HQs.

That’s because our founders, accelerators, investors and support organizations have historic experience in internationalization, as well as connections across the globe. So where will these foreign companies land — will they be interested in Denver or Austin, or rather a well-connected city that has made a name for itself as an international hub?

Miami is a landing pad where foreign startups can access both the United States and emerging markets with comparable trends. The city has made strides to position itself at the intersection between mature and emerging markets, creating an ecosystem that is inclusive (half of the population is foreign-born), prioritizes collaboration over individualism and encourages the arrival of newcomers. As such, it will be a (working) model for diverse startup cities.

3. The money will follow

Amid talks of a Silicon Valley “exodus,” some have been quick to point out that the hub has always held strong because of a key feature: access to capital.

But investors will follow the best opportunities. Which means that tech investment will only become more global. Put simply, the concentration of wealth in Silicon Valley is incompatible with the growing demand for tech across the globe. Silicon Valley isn’t going to die, but the pie is getting bigger. And more of that capital is already going to emerging tech hubs.

The symptoms include U.S. VC giants branching into emerging regions — like Sequoia opening its first European office, and SoftBank funneling billions into Latin America.

This means U.S. investors will favor regions where they can easily connect with global opportunities, like Miami. Last year, VC investment in the Miami region rose to over $2.2 billion, despite the pandemic (compared to $1.4 billion in all of Spain). But not only that — there is a lot of funding coming from investors in emerging markets.

In Latin America, local funders play a huge role in supporting promising companies. In 2019, almost 40% of the record-breaking $4.6 billion VC dollars invested in Latin America involved a co-investment with at least one Latin American investor. And from what we’re seeing, regional investors are increasingly funding U.S.-based organizations.

They — and others like them — will want to find ecosystems where they can connect with local and foreign founders with whom they can foster partnerships across markets.

Places like Miami need to house these kinds of networks. South Florida already has globally minded accelerators and startup programs like 500 Startups, Plug & Play and TheVentureCity; and VC firms with international networks, such as Ocean Azul, Endeavor Catalyst, Starlight Ventures, Level VC and now SoftBank.

4. Miami is better positioned for the future needs of startups

I’m going to end by underscoring the case for Miami as the U.S. pioneer of international connector startup hubs.

Startups build more with less every five years, and going international from day one, allows them to test their products in more markets straight away. This is feasible given worldwide level of connectivity, and helps to be in an environment that is constantly looking outward, beyond our borders.

It also helps to be in a time zone that is shared by much of South America and is only five hours behind London (San Francisco is only in the same time zone as the rest of the United States and Vancouver).

People who uproot their entire lives to seek success elsewhere want to be welcomed. They appreciate that the mayor of the city is happy to meet them for a “cafecito,” and that other founders are genuinely enthusiastic at their arrival. They don’t want to land in an expensive city where making it big tends to require connections, money and background.

Miami is reflective of the future of global startup hubs. It won’t be the next Silicon Valley, because we don’t need another one. As the entrepreneurial world flourishes in every corner of the globe, emerging market companies will be conquering markets across the United States and Europe, and fortress cities will make way for international networks.

News: Vivino raises $155 million for wine recommendation and marketplace app

• February 3, 2021
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If you’re at all interested in wine, chances are you’ve turned to Vivino at least a few times for recommendations. The app and the company behind it have been helping people enjoy better wine since 2010, and now the startup has raised $155 million with its Series D round – a sum over twice as

If you’re at all interested in wine, chances are you’ve turned to Vivino at least a few times for recommendations. The app and the company behind it have been helping people enjoy better wine since 2010, and now the startup has raised $155 million with its Series D round – a sum over twice as large as all of its previous funding to date. Spurred by rapid growth that has seen its user base grow from 29 million in 2018, to 50 million currently, Vivino wants to use the large cash injection to significantly boost its core tech and personalized recommendation engine, while also expanding its presence in key growth markets globally.

Vivino is an interesting company for many reasons, but chief among them might be just how similar its vision today is to the one it started out with. Founder and CEO Heini Zachariassen told me in an interview that the app has been remarkably immune to the pivot – something as natural as breathing in the fast-flowing startup world.

“I can look at my slide, from when I pitched this 10 years ago,” he told me. “It says, ‘Hey, you scan a bottle of wine, then you can buy it.’ That just makes a lot of sense to anybody, so it really hasn’t changed much.”

“It’s been very, very difficult to build much – much harder to build than building that slide,” he joked. But it’s always been the same – we always knew that was going to be the model.”

That core value proposition is what leads to a lot of Vivino’s initial downloads and subsequent usage. The scenario is likely familiar: You’re sitting in a restaurant and browsing the wine menu, or staring at a crowded shelf in a wine store. For myself, I think I likely searched for something like ‘wine recommendation app’ and found Vivino via the App Store, installed it and was snapping photos of labels or menus within minutes. The recommendations provided somewhere to start, and since then the app has grown more personalized as I’ve provided input about my tastes.

Image Credits: Vivino

Vivino’s marketplace component means you can often buy the wines you find and enjoy directly from the app, via partnerships the company fosters and maintains with merchants large and small around the world. Zachariassen explained that they strive to maintain high standards when it comes to these partners, since the experience a user has with them is largely a reflection on Vivino itself because the app provides the means for the purchase.

Building more relationships with more merchants in more geographies is one part of their expansion goal for addressing their primary growth markets, but the company is also going to put a lot more capital behind improving and extending its recommendation engine. A lot of the building blocks are in place to make big improvements there, not least of which is the wine database that Vivino spent a decade building essentially from zero.

“Stage one of the hurdles we faced, even before we got commercial, was really building the data,” Zachariassen told me. “There is no aggregated data anywhere. So we’ve basically built this data totally from scratch. So it means taking a picture of bottle of wine, then having people just entering info every single day to fill it. We have 1.5 billion pictures of wine labels right now, so building that mass of data in a good and structured way really is 10 years of work.”

He adds that wine is a particularly long-tail marketplace, with highly individual tastes and very little indication in the company’s history that that’s likely to change in any significant way. Vivino’s marketplace approach, which is highly local on both the supply and the demand side, is particularly well-suited to addressing the sector’s needs, and Zachariassen believes Vivino has only really begun to scratch the surface on that thus far. I asked him why now was the right time to take on this sizeable round, given they’ve been very modest with prior funding amounts.

Vivino wine app in San Francisco. Photo Copyright Nader Khouri 2018.

“I think we we’ve reached sort of a critical mass,” he said. “We saw last year massive growth, and actually reaching […] like a quarter of a billion dollars in sales, and we’ve really seen that the unit economics are healthy for us. At the same time, unlike other marketplaces – you know, the order of things when you have a marketplace might be if you’re like Uber, is that you go into market, you spend money, do marketing, a lot of money to build up the demand, and then you build the supply on top. We’re a little bit different in the way that demand is already there, because we have 50 million users around the world. So we just follow our demand.”

“But the hardest thing about that is that we’re now a 200 person company that sells wine in 17 countries,” he continued. “Which means we’re relatively thin in all these markets. So so one of the big things here, is actually to go much deeper in each market and say, okay, we now know it works here, let’s put more resources in every single market.”

Zachariassen also added that the company spends very little on marketing to date, so it’s going to begin spending more on that to extend its organic growth. Finally, it wants to really build out product engineering, since he says that while users love the existing app, they really “want to do so much more with it.”

Vivino has worked to modernize a product category that has long relied on local expertise and individual storehouses of highly-specific information, with an approach that provides all the benefits of a connected and global marketplace, while retaining regional and particular appeal at the granola level of the individual user. Now, the company is read to tap the rest of the massive submerged demand it has identified, and this fresh fundings would help it do just that.

The $155 million series D round was led by Sweden’s Kinnevik, and also includes participation by Sprints Capital, GP BullHound, and existing investor Creandum which led its Series A. This brings the company’s total funding to $221 million to date.

News: Good Eggs raises $100M and plans to launch in Southern California

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Grocery delivery startup Good Eggs is announcing that it has raised $100 million in new funding, and that it’s planning to launch in Southern California in either the summer or fall of this year. Parts of this story might sound familiar to readers familiar with Good Eggs — when the startup raised its most recent,

Grocery delivery startup Good Eggs is announcing that it has raised $100 million in new funding, and that it’s planning to launch in Southern California in either the summer or fall of this year.

Parts of this story might sound familiar to readers familiar with Good Eggs — when the startup raised its most recent, $50 million funding round in 2018, CEO Bentley Hall also mentioned plans for geographic expansion.

It seems, however, that the company has found plenty of opportunity for growth while remaining focused on the San Francisco Bay Area. Good Eggs says that in the past year, revenue has grown to the nine figures (more than $100 million), hired more than 400 employees and nearly doubled its customer base.

Hall also noted that the company opened a new, larger warehouse in Oakland just a few days before shelter-in-place orders took effect last March. So the team was busy enough trying to operate a new warehouse, meet increased demand for grocery delivery and keep workers safe in the process.

Image Credits: Good Eggs

And while the grocery delivery market has become increasingly competitive, Hall argued that Good Eggs stands out thanks to the quality and breadth of its products — 70% of its products are locally sourced, and it often delivers them within 48 hours of harvesting.

“There’s lots of people offering groceries, meal kits, prepared meals, alcohol — we do all of that, with a certain sourcing criteria,” Hall said. As a result, Good Eggs has become the “primary source” for many of its consumers, representing 65% to 85% of their home food purchases.

It’s also worth noting that this represents a bit of a turnaround for the company, after the it shut down operations in Los Angeles, New York City and New Orleans in 2015, with Hall coming on as CEO shortly afterwards. And it sounds like he isn’t in a rush to launch in a bunch of new markets.

“I think of [Southern California] not as one big region, but as several small sub-regions,” Hall said. “There’s the LA region, northern San Diego, Orange County — those areas collectively are the size of two or three Bay Areas. That’s a meaningful increase in our addressable market.”

Good Eggs CEO Bentley Hall

The new funding was led by Glade Brook Capital Partners, with participation from GV, Tao Invest, Finistere Ventures and Rich’s, as well as previous investors Benchmark Partners, Index Ventures, S2G, DNS Capital and Obvious Ventures. Glade Brook’s J.P. Van Arsdale is joining the company’s board of directors.

“The grocery market is undergoing fundamental change and the shift to e-commerce and higher quality products and services is accelerating,” Van Arsdale said in a statement. “Good Eggs is experiencing rapid growth with strong unit economics and is well-positioned to become a category-defining leader. We are excited to partner with their team to help drive future growth and expansion.”

In addition to geographic expansion, Hall said the money will allow Good Eggs to continue adding new products and to find ways to improve the e-commerce experience.

In addition to the funding, Good Eggs is also announcing that it has hired Vineet Mehra as its chief growth and customer experience officer. Mehra was previously chief marketing officer and chief customer officer at Walgreens Boots Alliance, and before that as executive vice president and global chief marketing and revenue officer at Ancestry.

News: WorkStep, a startup that helps large employers find and retain frontline workers, raises $10.5M Series A

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Finding, and retaining, frontline workers has likely never been as critical as it is in these pandemic days. Enter WorkStep, a four-year-old startup that was founded with the mission of helping large supply chain employers do just that. The fully distributed company announced this morning that it has closed on a $10.5 million Series A

Finding, and retaining, frontline workers has likely never been as critical as it is in these pandemic days.

Enter WorkStep, a four-year-old startup that was founded with the mission of helping large supply chain employers do just that. The fully distributed company announced this morning that it has closed on a $10.5 million Series A round, building on top of a previously unannounced $6.7 million seed funding that included equity and a convertible note.

FirstMark Capital led the Series A financing, which included participation from returning backer and strategic partner Prologist Ventures.

Dan Johnston, co-founder and CEO of WorkStep, said the Employee Lifecycle Management (ELM) software platform was designed to not only help large supply chain employers source new frontline employers, but to also onboard, train, and keep them happier with the goal of them staying on board longer. Johnston experienced some of the challenges firsthand  when he managed a warehouse in Portland, Oregon, more than a decade ago.

The COVID-19 pandemic has only highlighted the importance of the work frontline employees do – from serving food to delivering packages. But with the increasing dependence on supply chain labor came record turnover, points out Johnston – leaving many companies understaffed and remaining workers stretched thin.

WorkStep claims to provide human resources, recruiting and operations leaders “full transparency” across the employee lifecycle to help companies minimize that churn. The company had previously built out its cloud-based Hire offering and then last fall, launched its Retain product. 

 “The pandemic has forced companies of all sizes to prioritize the health, safety and satisfaction of frontline teams,” he said. 

Its customers include hundreds of industrial, logistics, transportation and warehousing employers across North America –– including regional 3PLs (third-party logistics companies) and distribution centers, as well as 16 of the Fortune 500. Customers include grocery chain Kroger, Alpine Food Distributing and TransPak, among others.

WorkStep says it has “reached” 500,000 supply chain workers over the years.

WorkStep claims that its Retain offering reduced turnover by up to 29 percent for a Fortune 100 food & beverage company with whom it conducted a case study. This saves companies money in replacement and retraining expenses, which can add up. 

As a result of launching Retain last fall, according to Johnston, WorkStep saw its business more than double in the second half of 2020. This led the company to end the year as “bottom line profitable,” meaning that its revenue exceeded expenses in the last two months of the year.

And while WorkStep did not necessarily need to take on new capital, the company saw an opportunity to double down so it could continue to scale, Johnston said.

“This was an opportunistic round,” he told TechCrunch. “The turnover in this segment has become a core focus.”

WorkStep plans to use its new funding to more than double the size of its existing team of 14 employees across engineering, product, sales and customer success departments this year and triple it by the end of fiscal year 2022.  

FirstMark Capital’s Adam Nelson was in the room with the company during its first whiteboard sessions and believes WorkStep is addressing a “massive” opportunity.

“We think the real differentiator between WorkStep and the existing solutions in the space is that WorkStep doesn’t see temporary staffing/gig liquidity as a solution,” Nelson told TechCrunch. “They see it as a symptom of a multi-hundred billion dollar deadweight loss that’s created when employers aren’t able to find, train and retain the right people.”

WorkStep, he added, is addressing the full employee lifecycle and leveraging the data  “to give a voice to frontline workers while also making employers smarter and more proactive.”

News: India sends warning to Twitter over lifting block on accounts and noncompliance of order

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India has issued a notice to Twitter, warning the American social firm to comply with New Delhi’s order to block accounts and content related to a protest by farmers and not “assume the role of a court and justify non-compliance.” Failure to comply may prompt penal action against Twitter, the notice warns. The warning comes

India has issued a notice to Twitter, warning the American social firm to comply with New Delhi’s order to block accounts and content related to a protest by farmers and not “assume the role of a court and justify non-compliance.” Failure to comply may prompt penal action against Twitter, the notice warns.

The warning comes days after Twitter blocked dozens of high-profile accounts in India to comply with New Delhi’s request, but later lifted the restriction.

Twitter “cannot assume the role of a court and justify non-compliance. Twitter being an intermediary is obliged to obey the directions as per satisfaction of authorities as to which inflammatory content will arouse passion and impact public order. Twitter cannot sit as an appellate authority over the satisfaction of the authorities about its potential impact on derailing public order,” the notice, a copy of which was seen by TechCrunch, said.

India’s IT ministry expressed concerns over what it deemed derogatory and factually incorrect tweets and hashtags that have been circulating in India this week that it said were designed to spread hate. “It is thus clear that, the offending tweets/ hashtag remained in public domain and must have been tweeted and re-tweeted several times at the risk and cost of public order and at the risk of incitement to the commission of offences,” the letter said.

Twitter did not immediately respond to request for comment.

For more than three months, tens of thousands of farmers (if not more) in India and elsewhere have been protesting against three laws passed by Prime Minister Narendra Modi’s government that they say allow greater private sector competition.

Raman Chima, a senior international counsel and Asia Pacific Policy director at Access Now, a non-profit internet advocacy organization, said in a series of tweets that instead of threatening social media platforms, India’s IT ministry “needs to explain why blocking entire handles & seeking the banning of hashtags does not violate the Indian Constitution.” He said the ministry has neither been transparent nor respected the rights.

“You can choose to disagree, correct, ridicule, or engage with such fears, outcry. Seeking to ban & precensor such discussions is a travesty of India’s Constitution + international human rights law. This is not what 21st Century India should permit, nor what our founders envisaged. The Ministry of Electronics and IT should release its actual orders and all documentation behind the Govt’s decisions to – (1) issue these orders and (2) press the matter with Twitter and other social media platforms. Don’t hide; explain & justify how this is not unconstitutional.”

This is a developing story. Check back for more information…

News: Embedded finance startup Banxware raises €4M seed

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Embedded finance — the idea of offering financial products where customers are already congregating via white label solutions and APIs – isn’t an entirely new concept. In fact, in one form or another, such as point of sale credit, the concept has existed for years and long before Silicon Valley venture capital firm and media

Embedded finance — the idea of offering financial products where customers are already congregating via white label solutions and APIs – isn’t an entirely new concept. In fact, in one form or another, such as point of sale credit, the concept has existed for years and long before Silicon Valley venture capital firm and media company (ha!) Andreessen Horowitz made it a thing. However, fuelled by cloud technology and a plethora of new fintech and Banking-as-a-Service startups, there is no doubt the embedded finance trend is accelerating.

The latest company to declare its hand is Berlin-based Banxware, which offers embedded finance in the form of loans for SMEs, in partnership with marketplaces, payments providers, and others. It launched in December and today is disclosing that it has raised €4 million in seed funding.

Leading the round is Force over Mass, and VR Ventures. They are joined by HTGF, and private investors in banking, payment and e-commerce.

Banxware says it will use the investment to develop and grow its embedded white label financial services offering, and expand its team. In addition to lending, the startup will also soon offer card-based products and other financial services.

Banxware’s tech and infrastructure enables any company to offer loans and other banking services to SME customers. The idea is to act as the link between banks (lenders), digital platforms, and merchants. Banks get access to hard to reach SME customers. Platforms, such as online marketplaces, can up-sell financial products beyond their core offering. And merchants benefit from speedy access to working capital.

“SMEs have a hard time to access capital when needed, especially when they are less than three years old or do not have the most pristine credit history,” explains co-founder and CEO Jens Röhrborn. “On top of this, loan applications, i.e. loan decisions and loan payout, still take several weeks in most cases.

“More and more sellers and merchants are using digital platforms through which they sell their products or process their digital payments. By using the recent historic data on these merchants provided by the platforms, we can lend against their future revenues”.

This has seen Banxware build an instant lending tool that includes AML and KYC compliance, and a scoring engine that analyzes historic platform data and data from third party providers, such as account information providers and external scoring services. The promise is an instant loan decision and loan payout, “all in less than 15 minutes”.

“On the lending side, we work with both balance sheet lenders and lending vehicles with whom we pre-agree on lending terms and loan decision criteria and on whose behalf we execute the loan decision,” says Röhrborn. “Merchants repay their loan in such a way that platforms subtract a certain percentage of the future merchant payouts”.

Röhrborn says the company’s instant lending tool is “only the beginning” and that Banxware will develop additional embedded financial services and expand internationally.

Meanwhile, the German fintech currently generates revenue by charging a one time fee for each loan that is processed through its platform and via a one off customization fee.