Monthly Archives: March 2021

News: H3X rethinks the electric motor to power the next phase of mobility

It’s plain to see that electric vehicles are the future, but there’s more to making that change happen than swapping out a gas motor for a battery-powered one — especially in aircraft. H3X is a startup that aims to accelerate that future with a reimagined, completely integrated electric motor that it claims outperforms everything on

It’s plain to see that electric vehicles are the future, but there’s more to making that change happen than swapping out a gas motor for a battery-powered one — especially in aircraft. H3X is a startup that aims to accelerate that future with a reimagined, completely integrated electric motor that it claims outperforms everything on the market.

The small founding team — CEO Jason Sylvestre, CTO Max Liben, and COO Eric Maciolek — met in college while participating in an electric vehicle building and racing program. After stints in the tech and automobile industry (including at Tesla), the crew came back together when they saw that the Department of Energy was offering a bounty for improved high power density electric motors.

“The problem was uniquely suited to our abilities, and passions too — we’re excited about this stuff. We care about decarbonization of the different transit sectors, and aviation is going to become a growing part of the global carbon footprint over the next few decades as electric improves ground vehicles,” said Liben. “We just kinda decided to take a leap of faith, and applied to Y Combinator.”

Electric flight isn’t so much a wild idea as one that’s in its early, awkward stages. Lightweight craft like drones can do a great deal with the batteries and motors that are available, and converted small aircraft like seaplanes are able to make short flights, but that’s about the limit with the way things are today.

The problem is primarily a simple lack of power: the energy required to propel an aircraft fast enough to generate lift grows exponentially as the size and mass of the plane increase. A handful of kilowatt-hours will serve for a drone, and a few EV-scale batteries will work for a light aircraft… but beyond that the energy required to take flight requires batteries the bulk and weight of which make flight impractical.

The H3x lab with someone working on a motor the size of a toaster.Of course, it doesn’t have to be like that. And there are two general avenues for improvement: better batteries or better motors. So either you can fit more energy in the same mass or use what energy you have more efficiently. Both are being pursued by many companies, but H3X claims to have made a huge leap forward in power density that could unlock new industries overnight. While even an improvement of 10 or 20 percent in power per kilogram (e.g. a 50-pound motor putting out 120 horsepower rather than 100) would be notable, H3X says its motor is performing at around 300 percent of the competition’s output.

How? It’s all about integration, Liben explained. While the pieces are similar in some ways to motors and power assemblies out there now, the team basically started from scratch with the idea of maximizing efficiency and minimizing size.

Electric motors generally have three main sections: the motor itself, a power delivery system, and a gearbox, each of which may have its own housing and be sold and mounted separately from one another. One reason why these aren’t all one big machine is temperature: the parts and coolant systems of the gearbox, for instance, might not be able to operate at the temperatures generated by the motor or the power system, or vice versa. Put them together and one may cause the other to seize up or otherwise fail. The different sections just have different requirements, which seems natural.

Animated image of an electric motor rendered to be see-through.

Image Credits: H3X

H3X challenges this paradigm with a novel integrated design, but Liben was careful to clarify what that means.

“We’re not just taking the inverter box and slapping it on top and calling it integrated,” he said. “All the components are all intimately connected to the same housing and motor. We’re making a truly integrated design that’s one of the first of its kind at this power level.”

And by “one of the first” he doesn’t mean that Airbus has one in some powertrains, but rather that there have been research projects along these lines — nothing intended for production.

The idea that no one else has gone this far in putting everything in the same box at scales that could be used commercially may sound suspicious to some. One would think that the existing players in aerospace would have been barking up this tree for years, but Liben said large companies are too slow to innovate and too invested in other methods, while smaller ones tend to avoid risk by improving incrementally on successful existing designs and competing among themselves. “No one is targeting the level of performance we’re looking at right now,” he said.

But it isn’t like H3X stumbled over a single advance that magically tripled the performance of electric motors.

“We’re not relying on one big tech or something — there’s no magic bullet,” Liben said. “There are a few improvements that have very significant gains, like 50 percent better than the state of the art, and lots of areas that add 10-20 percent. It’s good from the technical risk side.”

He went into considerable detail on a lot of those improvements, but the less technical-minded among our readers, if they’ve even read this far, might close the tab if I tried to recount the whole conversation. To be brief, it amounts to combining advances in materials, manufacturing, and electric components so that they act synergistically, each enabling the other to be used to best effect.

For instance, recently improved power switching hardware can be run at hotter temperatures and handle higher loads — this raises performance but also allows for shared cooling infrastructure. The shared infrastructure can itself be improved by using new pure-copper 3D printing techniques, which allow more cooling to fit inside the housing. Using 3D printing means custom internal geometries so that the motor, gearbox, and power delivery can all be mounted in optimal positions to one another instead of bolted on where existing methods allow.

The result is an all-in-one motor, the HPDM-250, that’s smaller than a lot of the competition, yet produces far more power. The best production motors out there are around 3-4 kilowatts per kilogram of continuous power. H3X’s prototype produces 13 — coincidentally, just above the theoretical power density that would enable mid-range passenger aircraft.

CG render of 3D printed copper coils.

Image Credits: H3X

There is the risk that stacking cutting edge techniques like this makes the cost rise faster than the performance. Liben said that while it’s definitely more expensive in some ways, the smaller size and integrated design also lead to new savings in cost, time, or material.

“People think, ‘3D printing copper, that’s expensive!’ But when you compare it to the super high performance windings you’d need otherwise, and the different ways that you manufacture them, that can require a lot of manual steps and people involved… it can be a lot simpler printing something,” he explained. “It can be counterintuitive, but at least from my BOM [bill of materials] cost, when you’re selling something three times smaller than the other guy, even if it’s high performance materials, it’s actually not as expensive as you’d think. Based on the customers we’ve talked to so far, we think we’re in a good spot.”

Servicing a fully integrated motor is also fundamentally more complex than doing so for an off the shelf one, but Liben noted that they were careful to think about maintenance from the start — and also that, while it may be a little harder to service their motor than an ordinary electric one, it’s much, much simpler than servicing even the most reliable and well-known gas-powered motors.

Despite the huge gains H3X claims, the target market of passenger aircraft is hardly one that they, or anyone, can just jump into. Heavily regulated industries like air travel require years of work and technology proving to change a fastener style, let alone the method of propulsion.

So H3X is focusing on the numerous smaller, less regulated industries that could use vastly improved electric propulsion. Cargo drones, electric boats, and air taxis might still be rare sights on this planet, but a big bump to motor power and efficiency might be what helps tip them from niche (or vaporware) to mainstream. Certainly all three of those applications could benefit hugely from improved range or payload capacity.

Graduating to passenger flights isn’t a distant dream, exactly, suggested Liben: “We’re already on our way — this isn’t 20-years-out type stuff. In the last few years the timelines have shrunk drastically. You could have a full battery electric vehicle soon, but it isn’t going to cut it for longer flights.”

There’s still a role for motors like H3X’s in hybrid aircraft that use jet fuel, batteries, and perhaps even hydrogen fuel cells interchangeably. Like the switch to electric cars, it doesn’t happen all at once and it doesn’t need to for the purposes of their business. “That’s the great thing about motors,” Liben said. “They’re so ubiquitous.”

H3X declined to disclose any funding or partners, although it’s hard to believe that the team could have gotten as far as it has without some kind of significant capital and facilities — this sort of project outgrows the garage workbench pretty fast. But with Y Combinator’s demo day happening tomorrow, it seems likely that they’ll be receiving a lot of calls over the next few weeks, after which it may be reasonable to expect a seed round to come together.

If H3X’s prototypes perform as well in the wild as they do on the bench, they may very well enable a host of new electric transportation applications. We’ll be watching closely to see how the startup’s play affects the future of electric mobility.

News: BMW and PG&E team up to prepare the electric grid for millions of EVs

BMW Group and California utility Pacific Gas & Electric are rolling out the next phase of a pilot that aims to test — and learn — how electric vehicles could support the integration of renewable energy on the electric grid. The ChargeForward program, now entering its third phase, is open to PG&E customers who drive

BMW Group and California utility Pacific Gas & Electric are rolling out the next phase of a pilot that aims to test — and learn — how electric vehicles could support the integration of renewable energy on the electric grid.

The ChargeForward program, now entering its third phase, is open to PG&E customers who drive a BMW electric or plug-in hybrid electric vehicle. Around 3,000 drivers can sign up to voluntarily to allow their vehicle to be “smart charged” when electricity demand is low and renewable energy availability is high. Drivers will earn incentives for participating in the program, including $150 at sign-up and an additional $250 per year.

The program is one of the longest-running partnerships between an electric utility and an automaker. The first two phases had only 100 and 400 participants respectively, so this latest phase presents a marked expansion for the collaboration. It’s a sensible alliance for two industries that are preparing for the gradual decline in sales of internal combustion engines. For electric utilities, this means planning for a drastic increase in customer demand on a grid that is increasingly powered by renewable resources like solar and wind.   

bmw chargeforward electric

Image Credits: BMW

“Let’s assume someone plugs in at home on a Saturday morning at 9am and sets their departure time for 4 pm that day,” Adam Langton, BMW’s Energy Services manager who oversees the ChargeForward program, explained. “The ChargeForward software system communicates with the vehicle and determines that the vehicle is more than half full, needing 2 hours of charging to fill up the battery. The system then evaluates the person’s home electricity rate, renewable energy availability and congestion on the grid in their neighborhood. On this day, there is no congestion on the grid and solar energy will be very high in the afternoon. The ChargeForward system directs the vehicle to start charging at 1 pm and complete charging by 3 pm. This allows the driver to get a full battery prior to their departure time.” 

Electricity demand tends to follow a “duck curve” shape, peaking in the early evening as people return home from work – right as solar energy resources go off line. And people tend to charge their EVs overnight. To meet this demand, fossil fuel-emitting resources like natural gas ramp up.

The result? More greenhouse gas emissions. A study published by MIT researchers in Environmental Science and Technology found that in California overnight EV charging produces around 74% more GHGs than midday charging. (Variations in the grid mix matter here – in wind-heavy regions in the Midwest or Texas, overnight EV charging may make the most sense as lots of wind tends to be generated overnight.)  

The ChargePoint program aims to take advantage of the ample renewable resources available during the day and reduce GHG emissions in the process. Participating customers will enter their charging preferences and departure times on a BMW ChargeForward mobile app. BMW will also receive real-time information about the grid, such as the availability of renewable energy relative to the customer’s location, and it will use this data to calculate an optimal charging window and send it automatically to the vehicle. Customers will be able to opt-out of the charging shift at any point through the app.

While California is known for pursuing ambitious clean energy goals – including codifying into law a landmark target of achieving 100% renewable and zero-carbon electricity by 2045 – the state has also set a goal of getting 5 million EVs on the road by 2030. And that’s no surprise, considering that transportation is the single largest source of GHG emissions in the state. 

BMW and PG&E will also collaborate in a lab setting to explore vehicle-to-grid technologies that enable EVs to discharge electricity to the power grid. Such bi-directional functionality could allow EVs to be used as big backup generators in the case of emergencies or as distributed nano power plants to help balance the grid throughout the day.

The third phase of the ChargeForward program begins in mid-April and runs through March 2023. 

News: Clubhouse says its Android launch will take ‘a couple of months’

Social audio app Clubhouse has now promised a time frame of sorts for the launch of its anticipated Android version, following its recent hire of an Android software developer last month. In its weekly Townhall event on Sunday, Clubhouse co-founder Paul Davison remarked that the company was working “really hard” to come to Android, but

Social audio app Clubhouse has now promised a time frame of sorts for the launch of its anticipated Android version, following its recent hire of an Android software developer last month. In its weekly Townhall event on Sunday, Clubhouse co-founder Paul Davison remarked that the company was working “really hard” to come to Android, but said it’s going to take a “couple of months” to make that happen. That seems to indicate a time frame that’s closer to late spring or summer 2021.

Clubhouse had previously said in a late January blog post that it would begin work on its Android version “soon,” but had not yet promised any sort of time frame as to when it would be able to bring that version to the public. Instead, most of its statements about Android have been vague mentions of the importance of supporting the Android user base and making its app more accessible to a wider audience.

In the meantime, Clubhouse’s biggest rival, Twitter Spaces, has been taking advantage of Clubhouse’s delay to address the sizable Android user base by rapidly rolling out support to more people across platforms. This month, for example, Twitter Spaces opened up to Android users, allowing anyone on Android to join and talk inside its live audio rooms. Shortly thereafter, Twitter said that it plans to publicly launch Twitter Spaces to the general public in April. That would be well ahead of Clubhouse, unless the latter rapidly speeds up development and drops its invite-only status in the weeks ahead.

During Sunday’s Clubhouse Townhall, co-founder Davison explained the company’s approach to scaling to a larger market — like one where Android users participate — as an effort that requires a slower pace, when it comes to opening up access to more users. He noted that when Clubhouse grows, the discovery experience inside the app can be negatively impacted as a result. Users today are seeing more foreign language groups in their feeds, for instance, and are having a harder time finding friends and some of the best content, he said.

To address these challenges, Clubhouse plans to make several changes, including tweaks to the app’s Activity feed, tools to give users more control over their push notifications, and the launch of more personalization features — like showing users a personalized list of suggested rooms that appear on screen when you first open the app. These sorts of improvements are necessary to make Clubhouse succeed even as it scales its app to a larger user base, the company believes.

That said, Davison also spoke of dropping Clubhouse’s invite-only status as something it hopes to do “in the coming months.” He noted that he wants the app to open up to everyone, because there are “so many incredible creators not yet on Clubhouse, who have an audience elsewhere.”

“It’s going to be really important that we just open up to everyone,” Davison said. “Android’s going to be really important. Localization is obviously going to be very important.” Plus, making Clubhouse more accessible was important, too, he said.

The lack of an Android version of Clubhouse has already caused some complications for the company.

A number of Android app developers have taken advantage of the hole left in the market to hawk their “Clubhouse guides,” which intentionally aim to confuse Android users looking for Clubhouse by using the same app icon. (Google apparently doesn’t bother to weed out low-value and/or infringing content like this from the Play Store.)

“clubhouse” on android pic.twitter.com/uFtilOislC

— Sarah Perez (@sarahintampa) March 2, 2021

More recently, cybercriminals have gotten in on the action, too. They’ve created fake versions of Clubhouse that even pointed to a well-executed copy of the Clubhouse website in order to trick users into downloading their malicious app. One of these apps has been found to be spreading BlackRock malware, which steals users’ login credentials for over 450 services, including Facebook, Twitter and Amazon.

Davison addressed this issue during the Townhall, warning users that if they see anyone trying to impersonate Clubhouse on Android, not to use that app because “it could be harmful.”

“It is certainly not the real Clubhouse. Same thing with PC. There’s no PC app for Clubhouse,” he said, adding that a desktop version of Clubhouse is not a high priority for the company.

The company made a number of other announcements, as well, the most notable being its plans for more creator tools. These will be focused on helping creators grow their own audiences for their shows, and even monetize their events, if they choose, through things like direct payments, subscriptions, brand sponsorships, and even “paid events.” Clubhouse will also offer tools for managing memberships and tracking metrics around listeners and retention, but overall, details were light on what specific tools would be available or when they would roll out.

Clubhouse hasn’t responded to a request for further comment on the statements made during its Townhall event.

News: Social shopping-focused Chums announces $3.5M raise ahead of YC Demo Day

With Y Combinator Demo Day kicking off tomorrow morning, startups in the current batch are hurrying to make a little news before they show off their recent growth to investors. The list includes Runway, Mono, Pangea and Flux. Add Chums to the mix. Chums is a social shopping service that helps friends suggest products to

With Y Combinator Demo Day kicking off tomorrow morning, startups in the current batch are hurrying to make a little news before they show off their recent growth to investors. The list includes Runway, Mono, Pangea and Flux.

Add Chums to the mix. Chums is a social shopping service that helps friends suggest products to their pals. And the startup has put together a total of $3.5 million across two pre-seed investments.

TechCrunch spoke with Noah Elion, one of Chums’ founders, about the round. He said that his company closed $1 million in December, later looking to raise another $1.5 million. Interest ran high for shares in the startup, so Chums wound up raising $1 million more than its latter target, for a combined total of $3.5 million.

The company declined to share the cap at which the funds, raised via a SAFE, were secured.

The $1.5 million target was based on the amount of capital that his company would need for the next 18 months, Elion said. The final sum came from Ludlow, Shrug, Contrary Capital and Fuel Capital, among other firms and individuals.

How did a company in the midst of Y Combinator manage to raise an old-school Series A round of capital despite launching its product just a few weeks ago? The background of its founding team helps some. Co-founder Dick Fickling was an early engineer at Honey, for example, another shopping-focused startup that had a material exit.

The startup’s service is a mobile app that allows users to follow product-types that they may want to purchase, and suggest goods to one another that might fit their friends’ needs. It made its way to market three weeks ago, or as Elion explained, right before his company went out fundraising. TechCrunch asked about early traction, to which Elion said that it was too soon to say much, though his team has seen “encouraging” levels of engagement thus far.

The startup is four people today, which its website describes as a group of friends. This is mostly true. Elion and Fickling teamed up after the former built a predecessor to Chums — called Chums Referral — becoming friends in the process. Fickling was previously colleagues and friends with the folks who comprise the rest of the team, namely Lauren Williams (director of engineering) and Lena Gasilina (product).

The team is looking for a designer and a front-end developer, but after that is done hiring. It intends to stay at six people until its next round. Why? It wants to reach product-market fit with a half-dozen staff. If it does, it should be able to raise more money at a comfortable valuation. There’s some sense in the idea, though it was slightly odd to hear a startup plan measured growth to preserve capital in 2021.

Chums makes money on commissions from recommended products, splitting the revenue with users. Elion declined to share the network, or networks, his company is working with to secure commercial ties with retailers, but did note that in time Chums will go direct to secure better deals.

With a closed round, most of its team in place and an app in the market, it’s now up to Chums to prove Elion’s view Google is overly gamed and Amazon is best when you know what you are looking for. In the co-founder’s view, people liked malls for their “diversity of content” and as a space for “spontaneous shopping.” Perhaps Chums can fit that niche, and, in the process, generate some serious coin.

News: Early investors in Dispo to donate any profits from the photo-sharing app

After Spark Capital announced it would ‘sever all ties’ with Dispo following allegations around co-creator and famous YouTuber David Dobrik, two of the app’s earliest investors have similarly backed away from the company. Seven Seven Six and Unshackled followed suit this morning, releasing subsequent statements that they plan to donate any profits from investments to

After Spark Capital announced it would ‘sever all ties’ with Dispo following allegations around co-creator and famous YouTuber David Dobrik, two of the app’s earliest investors have similarly backed away from the company. Seven Seven Six and Unshackled followed suit this morning, releasing subsequent statements that they plan to donate any profits from investments to organizations working with survivors of sexual assault.

Seven Seven Six, an early-stage venture capital firm founded by Reddit’s Alexis Ohanian, released a statement on Monday morning saying that the allegations against Dobrik are “extremely troubling” and are “directly at odds” with the firm’s core values.

“We have made the decision to donate any profits from our investment in Dispo to an organization working with survivors of sexual assault. We have believed in Dispo’s mission since the beginning and will continue to support the hardworking team bringing it to life,” according to the firm’s statement. Ohanian has retweeted the statement from his personal account but has offered no separate statement.

The firm’s language suggests that it will still support Dispo, unlike Spark, which has left its board position at the company.

Unshackled Ventures similarly tells TechCrunch that the firm will donate any profits from the investment in Dispo to organizations focused on survivors of sexual assault. The firm pointed to Maitri, an organization that supports women survivors, as one place it plans to donate to.

“We are a female majority team that does not take this lightly. We are in full support of their decision to part ways with David,” per the statement. The firm did not say whether or not it would continue supporting Dispo as a company beyond Dobrik.

It is unclear how Spark Capital, which similarly is in the process of making sure it doesn’t profit from Dispo, will be handling its financial stake as well. Spark was unable to be reached for clarification.

The company was last valued at $200 million with Spark Capital-led $20 million Series A financing just weeks ago. Dispo released a statement last night stating that Dobrik has stepped down from the board of Dispo and leave the company. It is unclear if Dobrik still has a financial stake in the company through ownership and if he plans to divest.

 

News: Side raises $150M at $1B valuation to help real estate agents go it alone

Side, a real estate technology company that works to turn agents and independent brokerages into boutique brands and businesses, announced Monday that it has raised $150 million in Series D funding. Coatue Management led the round, which brings San Francisco-based Side’s valuation to $1 billion and total funding raised to over $200 million since its

Side, a real estate technology company that works to turn agents and independent brokerages into boutique brands and businesses, announced Monday that it has raised $150 million in Series D funding.

Coatue Management led the round, which brings San Francisco-based Side’s valuation to $1 billion and total funding raised to over $200 million since its 2017 inception. Existing backers Matrix Partners, Trinity Ventures and Sapphire Ventures also participated in the new financing.

The round is notable in that the amount raised is significantly higher than the $35 million Side raised in a Series C round in November 2019. Valuation too increased nearly 7x compared to the $150 million valuation at the time of its Series C. Sapphire Ventures led that investment and managing director Paul Levine, who was previously president and COO of Trulia (through its IPO and multibillion-dollar acquisition by Zillow), joined the company’s board of directors at that time.

The startup pulled in between $30 million and $50 million in revenue in 2020, and expects to double revenue this year. In 2019, Side represented over $5 billion in annual home sales across all of its partners. Today, the company’s community of agent partners represents over $15 billion in annual production volume.

Side was founded by Guy Gal, Edward Wu and Hilary Saunders on the premise that most real estate agents are “underserved and underappreciated” by traditional brokerage models.

CEO Gal said existing brokerages are designed to support “average” agents and as such, the top-producing agents end up having to do “all of the heavy lifting.”

Side’s white label model works with agents and teams by exclusively marketing their boutique brand, while also providing the required technology and support needed on the back end. The goal is to help partner agents “predictably grow” their businesses and improve their productivity.

“The way to think about Side is the way you think about what Shopify does for e-commerce…When partnering with Side, top-producing agents, teams and independent brokerages, for the first time in history, gain full ownership of their own brand and business without having to operate a brokerage,” Gal said. “When you spend years solving the problems of this very specific community of agents, you are able to use software to drive enormous efficiency for them in a way that has never been done before.”

Existing brokerages, he argues, actively discourage agents from becoming top producers and teams, because agents who serve fewer clients can be forced into paying much higher commission fees on every transaction, which means the incentives between brokerages and top agents and teams are misaligned.

“Top producers want to grow and differentiate, and brokerages want them to do less business at higher fees and be one more of the same under the same brand,” Gal said. “Side, rather than discouraging and competing with top producing agents and teams, enables them to grow and scale their own business and brand.”

Today, Side supports more than 1,500 partner agents across California, Texas and Florida.

The startup plans to spend its new capital on “significant hiring” and toward an expansion outside of California, Texas and Florida — the three markets in which it currently operates. It also plans to boost its 300-plus headcount by another 200 employees. 

News: ironSource is going public via a SPAC and its numbers are pretty good

Let’s rewind back through TechCrunch’s ironSource coverage during its life as a private company and then examine its financial results.

Israel’s ironSource, an app-monetization startup, is going public via a SPAC.

But before you tune out to avoid reading about yet another blank-check company taking a private company public, you’ll want to pay attention to this one.

For starters, this is the second SPAC-led debut from an Israeli company in recent weeks worth more than $10 billion. And secondly, ironSource is actually a pretty darn interesting company from a financial perspective.


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The company follows eToro in announcing its combination with a public entity designed to help startups get over the private-public divide. And valued at just over $11 billion by the deal, it will best eToro’s valuation by several hundred million. Combined, both companies will bring more than $20 billion in liquidity to their founders, backers, ecosystems, employees and SPAC teams associated with their impending debuts.

This morning, let’s rewind through TechCrunch’s ironSource coverage during its life as a private company and then examine its financial results. At the end, we’ll ask ourselves whether its new valuation makes any damn sense.

It’s Monday, and that means it’s time to strap in and get to work. Let’s get to it!

ironSource’s past, performance and future

TechCrunch has covered ironSource for years, including a piece on its 2014-era $85 million investment. At the time, we noted that the company “support[s] about 5 million installs per day and [has] more than 50,000 applications using [its] SDK.”

In 2019, ironSource raised more than $400 million at a valuation of more than $1 billion, though details were fuzzy at the time. TechCrunch wrote about the company last month when it announced its second acquisition of the year; ironSource bought Soomla —  app monetization tracking — and Luna Labs — video ad tooling — toward the end of its path to a public debut.

PitchBook data indicates that the company was worth an estimated $1.56 billion when it closed its 2019-era round. That ironSource intends to go public with a valuation of $11.1 billion means that it is shooting for a commanding increase in value in just a few short years.

Is the company worth the new number? Let’s find out, starting with a look at its revenue growth over time:

First, observe the company’s historical performance in 2020 compared to 2019; posting 83% revenue growth from a nine-figure base is impressive. ironSource only expects to grow a hair over 37% in 2021, however, though it doesn’t anticipate further revenue growth deceleration in percentage terms the following year.

The chart on the right is useful as well. Note how the company’s 2019 saw strong growth from its Q1 to its Q4. But also note its flat summer, in which sequential growth came to a near-halt. Comparing that lackluster middle period with the rapid growth ironSource posted in every quarter of 2020 is stark. Sure, the pandemic boosted screen time for all of us, but my gosh, did ironSource have a great year on the back of the pandemic.

News: US privacy, consumer, competition and civil rights groups urge ban on ‘surveillance advertising’

Ahead of another big tech vs Congress ‘grab your popcorn’ grilling session, scheduled for March 25 — when US lawmakers will once again question the CEOs of Facebook, Google and Twitter on the unlovely topic of misinformation — a coalition of organizations across the privacy, antitrust, consumer protection and civil rights spaces has called for

Ahead of another big tech vs Congress ‘grab your popcorn’ grilling session, scheduled for March 25 — when US lawmakers will once again question the CEOs of Facebook, Google and Twitter on the unlovely topic of misinformation — a coalition of organizations across the privacy, antitrust, consumer protection and civil rights spaces has called for a ban on “surveillance advertising”, further amplifying the argument that “big tech’s toxic business model is undermining democracy”.

The close to 40-strong coalition behind this latest call to ban ‘creepy ads’ which rely on the mass tracking and profiling of web users in order to target them with behavioral ads includes the American Economic Liberties Project, the Campaign for a Commercial Free Childhood, the Center for Digital Democracy, the Center for Humane Technology, Epic.org, Fair Vote, Media Matters for America, the Tech Transparency Project and The Real Facebook Oversight Board, to name a few.

As leaders across a broad range of issues and industries, we are united in our concern for the safety of our communities and the health of democracy,” they write in the open letter. “Social media giants are eroding our consensus reality and threatening public safety in service of a toxic, extractive business model. That’s why we’re joining forces in an effort to ban surveillance advertising.”

The coalition is keen to point out that less toxic non-tracking alternatives (like contextual ads) exist, while arguing that greater transparency and oversight of adtech infrastructure could help clean up a range of linked problems, from junk content and rising conspiracism to ad fraud and denuded digital innovation.

“There is no silver bullet to remedy this crisis – and the members of this coalition will continue to pursue a range of different policy approaches, from comprehensive privacy legislation to reforming our antitrust laws and liability standards,” they write. “But here’s one thing we all agree on: It’s time to ban surveillance advertising.”

“Big Tech platforms amplify hate, illegal activities, and conspiracism — and feed users increasingly extreme content — because that’s what generates the most engagement and profit,” they warn.

“Their own algorithmic tools have boosted everything from white supremacist groups and Holocaust denialism to COVID-19 hoaxes, counterfeit opioids and fake cancer cures. Echo chambers, radicalization, and viral lies are features of these platforms, not bugs — central to the business model.”

The coalition also warns over surveillance advertising’s impact on the traditional news business, noting that shrinking revenues for professional journalism is raining more harm down upon the (genuine) information ecosystem democracies need to thrive.

The potshots are well rehearsed at this point although it’s an oversimplification to blame the demise of traditional news on tech giants so much as ‘giant tech’: aka the industrial disruption wrought by the Internet making so much information freely available. But dominance of the programmatic adtech pipeline by a couple of platform giants clearly doesn’t help. (Australia’s recent legislative answer to this problem is still too new to assess for impacts but there’s a risk its news media bargaining code will merely benefit big media and big tech while doing nothing about the harms of either industry profiting off of outrage.)

“Facebook and Google’s monopoly power and data harvesting practices have given them an unfair advantage, allowing them to dominate the digital advertising market, siphoning up revenue that once kept local newspapers afloat. So while Big Tech CEOs get richer, journalists get laid off,” the coalition warns, adding: “Big Tech will continue to stoke discrimination, division, and delusion — even if it fuels targeted violence or lays the groundwork for an insurrection — so long as it’s in their financial interest.”

Among a laundry list of harms the coalition is linking to the dominant ad-based online business models of tech giants Facebook and Google is the funding of what they describe as “insidious misinformation sites that promote medical hoaxes, conspiracy theories, extremist content, and foreign propaganda”.

“Banning surveillance advertising would restore transparency and accountability to digital ad placements, and substantially defund junk sites that serve as critical infrastructure in the disinformation pipeline,” they argue, adding: “These sites produce an endless drumbeat of made-to-go-viral conspiracy theories that are then boosted by bad-faith social media influencers and the platforms’ engagement-hungry algorithms — a toxic feedback loop fueled and financed by surveillance advertising.”

Other harms they point to are the risks posed to public health by platforms’ amplification of junk/bogus content such as COVID-19 conspiracy theories and vaccine misinformation; the risk of discrimination through unfairly selective and/or biased ad targeting, such as job ads that illegally exclude women or ethnic minorities; and the perverse economic incentives for ad platforms to amplify extremist/outrageous content in order to boost user engagement with content and ads, thereby fuelling societal division and driving partisanship as a byproduct of the fact platforms benefit financially from more content being spread.

The coalition also argues that the surveillance advertising system is “rigging the game against small businesses” because it embeds platform monopolies — which is a neat counterpoint to tech giants’ defensive claim that creepy ads somehow level the playing field for SMEs vs larger brands.

“While Facebook and Google portray themselves as lifelines for small businesses, the truth is they’re simply charging monopoly rents for access to the digital economy,” they write, arguing that the duopoly’s “surveillance-driven stranglehold over the ad market leaves the little guys with no leverage or choice” — opening them up to exploitation by big tech.

The current market structure — with Facebook and Google controlling close to 60% of the US ad market — is thus stifling innovation and competition, they further assert.

“Instead of being a boon for online publishers, surveillance advertising disproportionately benefits Big Tech platforms,” they go on, noting that Facebook made $84.2BN in 2020 ad revenue and Google made $134.8BN off advertising “while the surveillance ad industry ran rife with allegations of fraud”.

The campaign being kicked off is by no means the first call for a ban on behavioral advertising but given how many signatories are backing this one it’s a sign of the scale of the momentum building against a data-harvesting business model that has shaped the modern era and allowed a couple of startups to metamorphosize into society- and democracy-denting giants.

That looks important as US lawmakers are now paying close attention to big tech impacts — and have a number of big tech antitrust cases actively on the table. Although it was European privacy regulators that were among the first to sound the alarm over microtargeting’s abusive impacts and risks for democratic societies.

Back in 2018, in the wake of the Facebook data misuse and voter targeting scandal involving Cambridge Analytica, the UK’s ICO called for an ethical pause on the use of online ad tools for political campaigning — penning a report entitled Democracy Disrupted? Personal information and political influence.

It’s no small irony that the self-same regulator has so far declined to take any action against the adtech industry’s unlawful use of people’s data — despite warning in 2019 that behavioral advertising is out of control.

The ICO’s ongoing inaction seems likely to have fed into the UK government’s decision that a dedicated unit is required to oversee big tech.

In recent years the UK has singled out the online ad space for antitrust concern — saying it will establish a pro-competition regulator to tackle big tech’s dominance, following a market study of the digital advertising sector carried out in 2019 by its Competition and Markets Authority which reported substantial concerns over the power of the adtech duopoly.

Last month, meanwhile, the European Union’s lead data protection supervisor urged not a pause but a ban on targeted advertising based on tracking internet users’ digital activity — calling on regional lawmakers’ to incorporate the lever into a major reform of digital services rules which is intended to boost operators’ accountability, among other goals.

The European Commission’s proposal had avoided going so far. But negotiations over the Digital Services Act and Digital Markets Act are ongoing.

Last year the European Parliament also backed a tougher stance on creepy ads. Again, though, the Commission’s framework for tackling online political ads does not suggest anything so radical — with EU lawmakers pushing for greater transparency instead.

It remains to be seen what US lawmakers will do but with US civil society organizations joining forces to amplify an anti-ad-targeting message there’s rising pressure to clean up the toxic adtech in its own backyard.

Commenting in a statement on the coalition’s website, Zephyr Teachout, an associate professor of law at Fordham Law School, said: “Facebook and Google possess enormous monopoly power, combined with the surveillance regimes of authoritarian states and the addiction business model of cigarettes. Congress has broad authority to regulate their business models and should use it to ban them from engaging in surveillance advertising.”

“Surveillance advertising has robbed newspapers, magazines, and independent writers of their livelihoods and commoditized their work — and all we got in return were a couple of abusive monopolists,” added David Heinemeier Hansson, creator of Ruby on Rails, in another supporting statement. “That’s not a good bargain for society. By banning this practice, we will return the unique value of writing, audio, and video to the people who make it rather than those who aggregate it.”

With US policymakers paying increasingly close attention to adtech, it’s interesting to see Google is accelerating its efforts to replace support for individual-level tracking with what it’s branded as a ‘privacy-safe’ alternative (FLoC).

Yet the tech it’s proposed via its Privacy Sandbox will still enable groups (cohorts) of web users to be targeted by advertisers, with ongoing risks for discrimination, the targeting of vulnerable groups of people and societal-scale manipulation — so lawmakers will need to pay close attention to the detail of the ‘Privacy Sandbox’ rather than Google’s branding.

“This is, in a word, bad for privacy,” warned the EFF, writing about the proposal back in 2019. “A flock name would essentially be a behavioral credit score: a tattoo on your digital forehead that gives a succinct summary of who you are, what you like, where you go, what you buy, and with whom you associate.”

“FLoC is the opposite of privacy-preserving technology,” it added. “Today, trackers follow you around the web, skulking in the digital shadows in order to guess at what kind of person you might be. In Google’s future, they will sit back, relax, and let your browser do the work for them.”

News: 5 Reasons you should attend TC Early Stage 2021 in April

We’re just days away from kicking off TC Early Stage 2021: Operations & Fundraising on April 1-2. Join us for two program-packed days dedicated to founders in the earliest stages of startup life (pre-seed through Series A). The event agenda features interactive presentations that cover a range of essential topics like fundraising, operations, growth, product-market

We’re just days away from kicking off TC Early Stage 2021: Operations & Fundraising on April 1-2. Join us for two program-packed days dedicated to founders in the earliest stages of startup life (pre-seed through Series A). The event agenda features interactive presentations that cover a range of essential topics like fundraising, operations, growth, product-market fit, product management and more.

No pass? No problem. Click here and buy your pass today.

Everyone’s busy. We get it. But this virtual conference (VOD means you won’t miss a session) gives you schedule flexibility to take a condensed dive with experts wearing their been-there-done-that-kicked-butt t-shirts. No need to reinvent the wheel. Learn from the best.

Here — for your edification — are just five of the many reasons you should attend TC Early Stage on April 1-2.

1. Bootcamp your way to success

Building a successful startup involves a learning curve like no other. Mastering the many the core skills required to build strong and build smart takes dedication and perseverance.

Early Stage 2021 is an intensive, one-stop entrepreneurial shop where you learn from seasoned experts, founders and investors. You’ll learn from subject-matter experts, across the startup ecosystem, ready to help you avoid costly missteps.

Attendees say: “Early Stage 2020 provided a rich, bootcamp experience with premier founders, VCs and startup community experts. If you’re beginning to build a startup, it’s an efficient way to advance your knowledge across key startup topics.” — Katia Paramonova, founder and CEO of Centrly.

2. Build community and expand your network

Ever feel like you’re going it alone? At Early Stage 2021, you’ll tap into a global community of folks just like you — startup founders in the early, and often confusing, innings. Connect and join forces, share pain points, discover opportunities and celebrate successes. The virtual platform’s chat feature rocks for ad hoc meetups and CrunchMatch, our AI-powered networking platform, helps you find and schedule meetings with the people who can move your dream closer to reality.

Attendees say: “TechCrunch does this thing — and they did it amazingly well in a virtual event — of connecting total strangers to create a genuinely supportive community. — Jessica McLean, Director of Marketing and Communications, Infinite-Compute.

3. Special Breakout Sessions

Don’t miss our partner series of interactive breakouts and get answers to your burning questions. You’ll receive expert advice on topics ranging from the benefits of adopting OKRs and protecting your company’s intellectual property to achieving operational excellence from day one, everything you ever needed to know about mergers and acquisitions and accelerating the dev process through fast feedback.

4. Do you science?

Does using biology as technology to tackle the daunting challenges of human and planetary health give you a huge case of business goosebumps? Don’t miss Scientist Entrepreneurs — Scaling Breakout Engineering Biology Companies. This special presentation, brought to you by Mayfield, looks at scaling startups and touches on three areas that influence trajectory: fundraising, hiring and product design.

5. The TC Early Stage Pitch-Off

Day two features a thrilling pitch off. Tune in to watch as 10 global early-stage companies — chosen by the TechCrunch Editorial team — pitch to our panel of top VCs. All 10 competitors receive invaluable exposure, and the ultimate victor wins a feature story on TechCrunch.com, an annual Extra Crunch subscription and admission to TC Disrupt this September. Pro tip: Take notes — watching a pitch off is a great way to improve your own presentation skills.

So much to learn and so many reasons to go. Buy your pass and join your community at TC Early Stage 2021: Operations & Fundraising on April 1-2.

Is your company interested in sponsoring or exhibiting at Early Stage 2021 – Operations & Fundraising? Contact our sponsorship sales team by filling out this form.

News: TryNow raises $12M to bring try-before-you-buy, Amazon Wardrobe as a service to online retailers

Amazon’s Prime Wardrobe has been a key way for the e-commerce giant to expand its reach selling clothing and other apparel: giving shoppers an easy way to try on several items, return what they don’t want, and pay for what they keep has helped it cross the virtual chasm by bringing the online experience a

Amazon’s Prime Wardrobe has been a key way for the e-commerce giant to expand its reach selling clothing and other apparel: giving shoppers an easy way to try on several items, return what they don’t want, and pay for what they keep has helped it cross the virtual chasm by bringing the online experience a little closer to what it’s like to shop for fashion in physical stores. Now, a startup that’s built “Prime Wardrobe as a service” to help smaller competitors offer its shoppers the same experience is announcing some funding to expand its business.

TryNow — which provides technology to online retailers that use Shopify Plus to let their customers receive and try out apparel, return what they don’t want and pay only for what they keep — has raised $12 million, funding that it will be using to continue expanding its business.

The startup, based out of San Francisco, already works with around 50 up-and-coming online retailers doing between $10 million and $100 million in revenues, with Universal Standard, Roolee, Western Rise, and Solid & Striped among its customers. Founder and CEO Benjamin Davis said in an interview that it has seen business grow six-fold in the last year as more shopping has shifted online from brick-and-mortar due to the pandemic. TryNow claims that using its service can help brands grow average order value by 63%, conversion rates by 22% and return on ad spend by 76%.

Fashion has been a primary focus for “try before you buy” services online, but the the model is not limited to it.

“Apparel is a core category for us,” said Davis, but he also said he believes that the model can be applied to improve the unit economics of selling online to other categories, like cookware. “Prime Wardrobe has solidified the power of that model for fashion, but we believe it’s much larger. We think that any purchase that is discretionary should be tried before it is bought.”

The funding, a Series A, is coming from a very notable list of backers that speaks to the opportunity in this space. Investors in the round include Shine Capital, Craft Ventures, SciFi VC (the venture firm co-founded by Max Levchin, founder and CEO of buy-now-pay-later firm Affirm), Third Kind, and Plaid co-founders Zachary Perret and William Hockey.

As-a-service, at your service

TryNow sits as part of a bigger wave of commerce and finance services that have emerged over the years to provide technology to entrepreneurs where the commerce technology they are using is not the core of the business they are building.

The thinking goes: building payments or related features is complex and not something that a company not focused on payments would build itself (much like most businesses would not build their own accounting software, or the computers that they use). And as the biggest competitors — eg, Amazon — continue to grow and build their own technology in-house to keep their competitive edge, a demand for more tech-enabled tools only grows and becomes more sophisticated with the competitive threat. These in turn get delivered as a service, since smaller competitors will lack the funds and human capital to build these themselves.

Davis said that TryNow chose to work solely with Shopify (and specifically Shopify Plus, the version of the service with more features, designed for retailers with more than $1 million in revenues) and its platform for letting retailers build and operate e-commerce storefronts, because of how it has become such an integral player in that ecosystem.

He said that there has been demand from retailers using other platforms such as Big Commerce and Adobe’s Magento — as well as the platforms themselves. And it will look to expand to these over time, but for now, “we think Shopify is the most powerful, and growing the fastest, with the biggest opportunity at checkout,” said Davis. “It’s a multibillion opportunity.”

TryNow has whittled down its core functionality in the e-commerce space to a very specific role.

It doesn’t handle checkout — that’s Shopify; nor transactions — that’s payment companies, or indeed by-now-pay-later companies (like TryNow, another kind of tech helping people defray the payment part of procurement); nor returns — it integrates with Happy Returns, Loop Returns and Returnly; nor email-based communications and marketing with customers — that’s Klaviyo.

What TryNow provides are analytics to manage the risk around any deal, and technology to integrate and manage the payments and returns experience, so that procuring doesn’t trigger a payment, returning triggers a payment for what is kept, and I suppose not returning triggers a different kind of payment (plus flagging the customer for future try-now-pay-later attempts).

Within the wider space of e-commerce, apparel has had a particularly tricky ride among those trying to bring the experience into the online world.

It’s no surprise when you think about it: shopping for apparel is an inherently physical activity, involving trying things on, browsing around big stores with wide selections, and only paying for what you actually take away with you.

That has given rise to a lot of different startups, leaning on new innovations in computer vision and other areas of artificial intelligence, better cameras on phones, new manufacturing techniques and more to try to sew up the gap between what you do online and how you would shop in the brick-and-mortar world.

(And these startups are seeing their own opportunities and demand in the market: just last week, Snap Inc acquired Fit Analytics, one of the tech companies building better tools to improve how online shoppers can estimate what size they might need to buy of an item: the social media company’s interest is to use the technology to expand how it works with its advertisers and to build out a bigger shopping experience on Snapchat and beyond.)

Before try-now-pay-later, the basic idea of selling fashion online has been to assume it’s okay to skip all the physical aspects of buying apparel before paying.

“Give me a credit card, and I’ll charge you for what you are getting, and if you don’t like it, you can get a refund? We would never operate a brick-and-mortar store that way, charging people before going into fitting rooms,” said Davis. “It’s unnatural and restricts growth.” And high-ticket items can be even harder to sell in that environment, he added.

While companies like Le Tote, Stitch Fix, and Wantable have built out fashion businesses on the premise of try first, and then pay only for what you keep, there are fewer companies out there that have distilled this idea into a standalone, B2B service. (And indeed, the try-before-you-buy service can be a tricky one to manage as a viable business, with Le Tote, now in Chapter 11, and now-defund Lumoid pointing to some of the challenges.)

“Ben and the TryNow team are taking what they’ve learned from Affirm and Stitch Fix and launching the ultimate checkout option: try now, buy later. This translates into more order volume and more profit. We all want to try before we buy: it’s only a matter of time before TryNow’s checkout solution becomes the standard,” said Brian Murray, managing director at Craft Ventures, in a statement.

Still, there are others that compete more directly. BlackCart out of Canada, which raised funding earlier this year, also provides try-now-pay-later as a service for apparel and other goods, and it integrates with other storefront platforms beyond Shopify. (It seems to take a different approach to offsetting the risk for retailers, essentially making up-front payments for goods itself and then reconciling directly with the retails around returns.) And it seems like a no brainer that Amazon might try to offer Wardrobe as a service to more retailers, as it does with so many of its other features.

Along with the funding, TryNow is also announcing a couple of new executive appointments that speak to where it sees itself competing and sitting longer term. Jessica Baier, formerly of Stitch Fix, is now VP of growth strategy; and Jonathan Kayne, a former head of product partnerships for Affirm, is now TryNow’s VP of platform.

The investors in this round are a pretty interesting set of backers that also point to possible directions for the company.

Shine is a relatively new firm co-founded by Mo Koyfman and Josh Mohrer to focus on early stage investments, with Koyfman previously backing a lot of interesting e-commerce companies at Spark; Craft is another early stage firm co-founded by David Sacks and Bill Lee; SciFi VC is Max and Nellie Levchin’s venture fund (and Max has a long and impressive track record in e-commerce, most recently as the founder and CEO of another startup in the flexible payment space, buy-now-pay-later business Affirm).

Third Kind, meanwhile, has been a prolific backer of e-commerce tech as part of its bigger investment thesis. And while Plaid’s founders are investing here as financial backers, it’s notable that they are both providing financial features as a service to third party businesses: diversification for Plaid might one day come in the form of providing tools for specific verticals, which would likely take them into the realm of more flexible payment and procurement options.

“At Shine, we are attracted to businesses with simple yet powerful insights that can ultimately lead to massively scalable new platforms,” said Koyfman in a statement. “TryNow’s understanding that a lack of tactility restricts e-commerce growth has opened the opportunity to create and scale the Try Now Buy Later category. It is rare to find such a strong team attacking such a simple but big idea. We are delighted to partner with Benjamin and the entire TryNow team as they scale their elegant platform and help e-commerce brands close the conversion gap with brick and mortar retail.”

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