Monthly Archives: April 2021

News: NASA makes history by flying a helicopter on Mars for the first time

• April 19, 2021
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NASA has marked a major milestone in its extraterrestrial exploration program, with the first powered flight of an aircraft on Mars. The flight occurred very early this morning, and NASA received telemetry confirming that the ‘Ingenuity’ helicopter it sent to Mars with its Perseverance rover. This is a major achievement, in no small part because

NASA has marked a major milestone in its extraterrestrial exploration program, with the first powered flight of an aircraft on Mars. The flight occurred very early this morning, and NASA received telemetry confirming that the ‘Ingenuity’ helicopter it sent to Mars with its Perseverance rover. This is a major achievement, in no small part because the atmosphere is so thin on Mars that creating a rotor-powered craft like Ingenuity that can actually use it to produce lift is a huge challenge.

This first flight of Ingenuity was an autonomous remote flight, with crews on Earth controlling it just by sending commands through at the appropriate times to signal when it should begin and end its 40-second trip through the Martian ‘air.’ While that might seem like a really short trip, it provides immense value in terms of the data collected by the helicopter during the flight. Ingenuity actually has a much more powerful processor on board than even the Perseverance rover itself, and that’s because it intends to gather massive amounts of data about what happens during its flight test so that it can transmit that to the rover, which then leapfrogs the information back to Earth.

As mentioned, this is the first ever flight of a powered vehicle on Mars, so while there’s been lots of modelling and simulation work predicting how it would go, no one knew for sure what would happen before this live test. Ingenuity has to rotate its rotor at a super-fast 2,500 RPM, for instance, compared to around 400 to 500 RPM for a helicopter on Earth, because of how thin the atmosphere is on Mars, which produced significant technical challenges.

What’s the point of even flying a helicopter on Mars? There are a few important potential applications, but the first is that it sets up future exploration missions, making it possible for NASA to use aerial vehicles for future science on the red planet. It can explore things like caves and peaks that rovers can’t reach, for instance. Eventually, NASA is also hoping to see if there’s potential for use of aerial vehicles in future human exploration of Mars, too — martian explorers would benefit significantly from being able to use aircraft as well as ground vehicles when we eventually get there.

News: Clubhouse closes an undisclosed $4Bn valuation Series C round, as tech giants’ clones circle

• April 19, 2021
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Buzzy ‘social audio’ app Clubhouse has raised a Series C funding round, reportedly valuing the company at $4 billion. Clubhouse said the new round of financing was led by Andrew Chen of Andreessen Horowitz, with participation from DST Global, Tiger Global and Elad Gil. This round means Clubhouse has tripled the valuation it attained in

Buzzy ‘social audio’ app Clubhouse has raised a Series C funding round, reportedly valuing the company at $4 billion. Clubhouse said the new round of financing was led by Andrew Chen of Andreessen Horowitz, with participation from DST Global, Tiger Global and Elad Gil. This round means Clubhouse has tripled the valuation it attained in January when Andreessen Horowitz led its Series B funding round.

The funding comes as Twitter, Spotify, Facebook, Telegram, Discord and LinkedIn are all prepping similar features to Clubhouse’s live audio streaming rooms, which has attracted attention for hosting live chats with the likes of Elon Musk and Mark Zuckerberg. Indeed, Vox reported that Facebook will announce a series of ‘social audio’ products only today.

But, unusually for such a late stage of funding, the company has not revealed the amount raised. Industry sources say that this is probably because the Series C funding round is ‘multi-stage’ and therefore not officially closed. Alternatively, the company is ‘hyping’ itself ahead of a sale, as is often the case with ‘hot’ startups. Twitter reportedly broke off talks to acquire the startup at a $4 billion valuation, according to Bloomberg.

And despite appearances that this funding round has been timed to coincide with the launch this week of Facebook’s Clubhouse clone, one well-placed source told me “this funding round has been in the works for last 1.5 months” and that some offers have been “above 2x” the $4bn valuation. On other words, there are some investors out there who think Clubhouse is worth more than $8bn.

So far Clubhouse is demurring on all this, and declining to comment more directly to the media. The company disclosed the news about the funding during its weekly ‘town hall’ chat last Sunday night and in a blog post, the company said the fundraising will support a fresh burst of growth for the app.

“While we’ve quadrupled the size of our team this year, stabilized our infrastructure, launched Payments in beta to help creators monetize, and readied Android for launch, there is so much more to do as we work to bring Clubhouse to more people around the world. It’s no secret that our servers have struggled a bit these past few months, and that our growth has outpaced the early discovery algorithms our small team originally built,” said the post.

Noting that “it’s important to us to be building all of this with people who are invested in the community and who represent a diverse set of backgrounds and voices,” Clubhouse has, however, been struck by a wave of problems in the last few days, when Anti-Semitic audio rooms seemed to proliferate on the platform. Clubhouse has previously been criticized for its seeming inability to moderate extremism on the app.

The year-old platform, which has reported 10 million weekly active users, has thrived during the pandemic while people were locked down and therefore unable to chat easily in person.

Tech news site The Information first reported details on the Clubhouse funding on Friday.

News: Volvo to supply Chinese ride hailing giant Didi with autonomous driving cars

• April 19, 2021
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As the autonomous driving race in China heats up, Didi is rushing to expand its car fleets by picking Swedish automaker Volvo, an old partner of Uber, as its ally. Didi said on Monday it will be using the XC90 SUVs of Volvo, which has been owned by Chinese auto company Geely since 2010, for its

As the autonomous driving race in China heats up, Didi is rushing to expand its car fleets by picking Swedish automaker Volvo, an old partner of Uber, as its ally.

Didi said on Monday it will be using the XC90 SUVs of Volvo, which has been owned by Chinese auto company Geely since 2010, for its network of robotaxis in the long term. Didi created a subsidiary dedicated to autonomous driving last year and the unit has since raised about $800 million from investors including SoftBank Vision Fund and IDG Capital. The subsidiary now has over 500 employees.

Didi started out as a ride-share app in 2012 and gobbled up Uber China in 2016. It now offers a range of mobility services including taxi hailing, ride-hailing, carpooling, shared bikes and scooters, as well as financial services for drivers. The company is seeking a valution north of $100 billion in an initial public offering, Reuters reported last month.

Didi’s autonomous driving arm has been testing robotaxis for the past two years in China and the United States, but Volvo’s XC90 model will be the first to adopt Didi’s freshly minted self-driving hardware system called Gemini, which contains sensors like short, mid and long-range lidars, radars, cameras, a thermal imager; a fallback system; and remote assistance through 5G networks.

Didi said that its Gemini platform, coupled with Volvo’s backup functions including steering, braking and electric power, will eventually allow its robotaxis to remove safety drivers. If any of the primary systems fails during a ride, Volvo’s backup systems can act to bring the vehicle to a safe stop.

Didi is competing against a clutch of well-funded robotaxi startups in China, such as Pony.ai and WeRide, which are busy tesing in major Chinese cities and California while splurging on R&D expenses to reach Level 4 driving. AutoX, another Chinese robotaxi company, announced last week that it will be using Honda’s Accord and Inspire sedans for its test drives in China. The edge of Didi, some suggest, is the mountains of driving data accumulated from its ride-hailing business spanning Asia, Latin America, Africa and Russia.

Rising electric automakers like Nio and Xpeng have also joined in the race to automate vehicles, making bold claims that they, too, will be able to remove safety drivers soon. Meanwhile, traditional car manufacturers don’t want to fall behind. BAIC, a state-owned enterprise, for instance, is adding Huawei’s advanced automation system and smart cockpit to its new electric passenger cars.

News: Andela begins global expansion in 37 countries months after going remote across Africa

• April 19, 2021
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More than a year after the pandemic began, remote work shows no signs of going away. While it has its cons, it remains top of mind for potential employees around the world before joining a new company. But while most people in Africa still go to physical offices, despite the pandemic, a few companies have

More than a year after the pandemic began, remote work shows no signs of going away. While it has its cons, it remains top of mind for potential employees around the world before joining a new company.

But while most people in Africa still go to physical offices, despite the pandemic, a few companies have nevertheless embraced this concept. Andela, a New York-based startup that helps tech companies build remote engineering teams from Africa, was one of the first to publicly announce it was going remote on the continent.

Today, it is doubling down on this effort by announcing the global expansion of its engineering talent. Over the past six months, the company has seen a 750% increase in applicants outside Africa. More than 30% of Andela’s inbound engineer applications also came from outside the continent in March alone. Half this number came from Latin America while Africa saw a 500% increase in applications, as well.

When Andela launched in 2014, it built hubs in Nigeria, Kenya, Rwanda and Uganda to source, vet and train engineers to be part of remote teams for international companies. It also tested satellite models in Egypt and Ghana as substitutes to physical hubs.

The company would issue a call for applications, select a few (less than 1%), pay them a salary for the first six months and provide them with housing and food. It also helped developers improve their skills via training and mentorship. Over 100,000 engineers have taken part in the company’s learning network and community, and, as of 2019, Andela had more than 1,500 engineers on its payroll.

However, after noticing that this model wasn’t sustainable, it began to make changes.

In September 2019, it let go of 420 junior engineers across Kenya, Uganda and Nigeria. Nine months later, citing the pandemic, it laid off 135 employees while introducing salary cuts for senior staff. But despite the layoffs, the pandemic provided some form of clarity to how Andela wanted to operate — which was remote, judging by the success of the satellite models.

“In the very beginning, a developer had to be in Lagos to work with Andela. Then it became living in Nigeria. Then Kenya. Then Uganda, Rwanda,” CEO Jeremy Johnson told TechCrunch. “Before the pandemic, Andela was opening applications in country after country. The pandemic came and changed that as we opened up to the entire continent.”

Shutting down its existing physical campuses and going remote also helped the company focus on getting engineers with more experience to meet its clients’ requirements. That experiment, which the company conducted in less than a year, is also part of its mission to be a global company.

“That went so well and we thought ‘what if we accelerated it now that we’re remote and just enable applicants from anywhere?’ because it was always the plan to become a global company. That was clear, but the timing was the question. We did that and it’s been an amazing experiment,” Johnson added.

Now with its global expansion, its clients can tap into regional expertise to support international growth.

According to a statement released by the firm, it currently has engineers from 37 countries across Africa, Asia, Latin America, North America and Europe.

Johnson didn’t go into details about how many of these engineers are getting jobs from Andela, or even its total developer count. He’s more interested in helping its clients solve the diversity issues that have plagued many Western corporations.

Andela is currently working with eight companies that have hired its engineers in Latin America and Africa. In addition to the diversity play, the CEO says that means Andela engineers get to prove themselves on a global playing field in a way the company has “always wanted to see.”

Andela serves more than 200 customers, including GitHub, ViacomCBS, Pluralsight, Seismic, Cloudflare, Coursera and InVision. GitHub is one company that seems to be benefitting from Andela’s new offerings. The company’s VP of Engineering, Dana Lawson, in a statement said, “As a business in the developer tool space, a lot of us are trying to enter those areas of the world (Southeast Asia, Latin America and Africa) where the emergent developers are coming so we can better understand their needs. Having a local presence there with amazing talent is super valuable to building a global product.”

In its quest to become a global company, going up against competition is unavoidable for the seven-year-old company. But since most of these companies are horizontal marketplaces (providing a wide range of expertise), whereas Andela is vertical, Johson believes there’s enough market share to be acquired by the company.

“We are focused on building digital products, and because of that, we’re able to do more, essentially, for our customers… That’s where our focus is — [building long-term relationships] and around building great digital products.”

The company was founded by Jeremy Johnson, Christina Sass, Nadayar Enegesi, Ian Carnevale, Brice Nkengsa and Iyinoluwa Aboyeji. It has raised more than $180 million (up to Series D) from firms like Chan Zuckerberg Initiative, Generation Investment Management, Google Ventures and Spark Capital, at a valuation of about $700 million.

While announcing the layoffs last year, Andela said it was on an annual revenue run rate of $50 million. But when asked how this number has changed over the past year, Johnson said the company is “growing at a healthier pace as we’ve ever had.”

The future of remote work is global and Johnson believes Andela provides the vital link to talent wherever it is found. The company’s head of talent operations, Martin Chikilian, echoes similar sentiments.

“We’ve seen exponential growth and interest from engineers from across Africa who want to work with some of the world’s most exciting technology-focused companies,” he said. “Growing our network of talent from Africa to include more markets is a unique proposition and we continue to match talent with opportunity beyond geographical boundaries.”

News: UK’s Zilch raises $80M at a $500M+ valuation for its direct-to-consumer buy now, pay later service

• April 19, 2021
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The buy now, pay later model, popularized by companies like Klarn and Affirm has been one of the big e-commerce winners in the last year, giving consumers who might be stretched financially another option to pay for things when they buy them online. While that has prompted the UK financial authority to re-examine how it

The buy now, pay later model, popularized by companies like Klarn and Affirm has been one of the big e-commerce winners in the last year, giving consumers who might be stretched financially another option to pay for things when they buy them online. While that has prompted the UK financial authority to re-examine how it regulates the space, an enterprise taking a slightly different approach is announcing some funding as it prepares to expand to the US.

Zilch, a London startup that has built an “over the top” buy now, pay later (BNPL) business out of cutting deals directly with consumers — bypassing the need for integrating anything new into an e-commerce site’s check-out process, as many of the leading providers have done — has raised $80 million, an all-equity Series B that values the company at over $500 million.

The funding is coming from Gauss Ventures and M&F Fund, among other unnamed investors. The startup has up to now opted to raise from individuals and smaller firms, CEO and founder Philip Belamant said in an interview, although that may change in future rounds as it looks both to bring in a tier-one debt line, not just to fuel growth in its current market of the UK but to expand to more countries, including the United States.

For now, Zilch has financed usage of its service off its own balance sheet: it has more than 500,000 users, Belamant said, and is seeing sign-ups of around 4,000 a day on its app.

BNPL is a payment scheme that has been around as long as stores themselves, but its emergence online has been more a later arrival. Most schemes are run by third parties — Klarna and Affirm being two of the biggest — who ink deals with e-commerce companies and integrate in the check-out alongside other options for payment. Zilch’s key differentiation has been that it’s cut a deal with only one other company — Mastercard — and created a payment card with it so that when a person wants to pay using Zilch, they use the Mastercard number in the checkout, which then triggers the option to them to either pay in installments or pay as you would with a normal credit card.

The prospect of bypassing the retailer means that Zilch has been able to scale by making its service more applicable to more payment scenarios, a model that Belamant said was inspired by another killer disaggregator.

“If you look at when Amazon started, many commented on it being a phenomenal bookstore, but they built an infrastructure to sell everything. They could have built that covering different booksellers one by one but Amazon went direct to the consumer and said it would ship any book in a day. How profitable is not your problem,” he said. “We didn’t want to be beholden to the retailer and wanted the relationship with consumer. We go to them and say, pay over time, and use us anywhere you like. We built this technology plugging them in on one side and plugging retailers on the other. We can now build up any way to play and can use it anywhere they like without being restricted by retailers.”

Conversely, this has also helped Zilch fend off competition from bigger BNPL players, at least up to now: “Their main customers are retailers, and they have pre-existing arrangements with those retailers,” Belamant said of the Affirms and Klarnas of the world. Offering a model similar to Zilch’s, he said, “would have to circumvent those services, and that’s a massive cannibalization. Can they do that? Well, it’s naive to say they can’t. But will they? I’m not sure.”

Zilch’s approach of riding the rails of Mastercard — which is likely soon to be augmented by other providers like Visa — means that it can quickly distribute a recognized payment method, but as Belamant describes it, it’s Zilch that is still building the algorithms to make the credit evaluations for individual consumers.

Using what Belamant described to me as “soft credit checks” alongside Open Banking data — a system used in the UK and Europe that taps into using APIs to share and integrate data from one financial service with another (in this case a way to easily check a person’s credit and financial history by way of their bank details as they are applying for a new financial service) — people sign up and automatically get assessed for their suitability for a BNPL scheme.

This has helped the company, as it says, become the first BNPL provider to be regulated by the Financial Conduct Authority, the financial services regulator in the UK that has run an investigation of BNPL companies and appears to be preparing tighter regulation around how they can work, to stave off people inadvertently walking into spending money that they don’t have and may never be able to repay. Zilch was officially authorized as a consumer credit provider in 2020.

This is not to say that others in the space will not be able to also get the same certification for their models, incidentally, but it might mean more regulatory hoops, possibly slower growth, and perhaps also more consumer wariness as the situation continues to get more publicity. (The UK in particular has a pretty sordid history with other schemes to provide people with financing, specifically around the murky practices associated with payday loan schemes, and that has left a bad taste in many consumers’ mouths.)

One specific advantage also of linking up with a card company is that, in this world of “everything will soon be virtual”, it gives Zilch users access to a card, which they can in turn use to also shop using BNPL in brick-and-mortar stores. Tap and Pay-over-time, as it’s called, means users can integrate the card into a digital wallet to and use it as they would their handsets to pay with Apple or Android-based payment schemes. Zilch said it’s the first BNPL do make this leap.

News: Gett inks deal with Curb Mobility to bring yellow cabs to its enterprise-focused on-demand ride-hailing app

• April 18, 2021
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Gett, the ride-hailing startup that has been carving out a niche for itself in a crowded and competitive market for on-demand transportation by focusing on enterprise accounts and connecting people with rides in some 1,500 cities leveraging a number of third-party fleets, is adding another partner today as it continues to double down on its

Gett, the ride-hailing startup that has been carving out a niche for itself in a crowded and competitive market for on-demand transportation by focusing on enterprise accounts and connecting people with rides in some 1,500 cities leveraging a number of third-party fleets, is adding another partner today as it continues to double down on its business model in the wake of corporate travel slowly coming back online.

Gett has inked a deal to integrate Curb Mobility to integrate yellow taxis into Gett’s app, which will now cover some 65 cities across the US. The news is coming at a time when Gett is looking to expand its service to meet more demand: it notes that rides currently at around 80% of the levels they were in Q1 2020, just ahead of Covid-19 really descending on the western world.

From what we understand, the deal does not involve any investment between Gett — which has raised around $865 million to date (including most recently closing a $115 million round) and was last valued at $1.5 billion in 2019 — and Curb — which is a part of Verifone, after the payments hardware company acquired it in 2015.

(If you think it sounds odd for a payments hardware company to own a taxi fleet app, this is only part of Curb’s business and is in fact also a hardware player: in addition to Curb providing a way to hail yellow taxis — it app covers some 50,000 cabs and 100,000 drivers — the company also builds hardware for cabs and fleet operations, including metering apps, payment terminals, and those interactive screens for passengers that let them pay for rides, watch news and advertisements and more.)

To differentiate its service from the very highly capitalized Ubers and Lyfts of the world, Gett has been building out a two-pronged strategy that covers both how it scales, and the services that it provides to its users.

On the scaling front, Gett has been moving away from managing fleets of contractor drivers in the US for some years now: back in 2019, after slogging it out for years against Lyft and Uber in its primary New York metro market, Gett effectively shut down its main fleet operation in the region and instead inked a deal with Lyft. That has become a template of sorts that the company has been repeating in other cities outside of the U.S. where it doesn’t have substantial market share. (For example, Ola is another Gett partner.) In some cities where it has a larger footprint, like London and Moscow, Gett works with drivers directly.

Partner fleets made up one-third of Gett’s business in the first quarter of this year, but as Gett brings on more to its network, it expects partner fleets to cover the majority of its rides by the end of this year, the company said.

On the service front, Gett has made a big bet on building a platform that integrates with businesses at the back end to make it easier to order rides and for them to reconcile more easily with a businesses expense management and accounting software. Gett’s big pitch to would-be customers is that this software makes it less expensive and significantly more efficient to hail a cab using Gett compared to the alternatives — for starters users can compare different prices from different providers — and it gives users significantly more choice.

“Today’s partnership cements Gett’s position as a technology platform focused on corporate Ground Transportation Management (GTM), where spend is worth $79.6 billion globally,” said Dave Waiser, CEO and co-founder of Gett, in a statement. “In recent years, we have become the GTM category leader, serving over a quarter of Fortune 500 companies.”

On the part of Curb, it gives drivers using its software another link through to an app that might bring in more business at a time when riders have more choice than ever before, covering not just other on-demand car apps, but eco-friendly, exercise-ready, and traffic-busting options like e-bikes, scooters and shared rides. As the profile of the average corporate user changes and gets younger, that too will change the expectations many of them will have for what constitutes a preferred set of ground transportation options, depending on the situation.

“As cities across the U.S. prepare for the return of international travel, our partnership with Gett will create new income opportunities for local drivers and ensure Gett’s business users have access to the same safe, reliable transportation options trusted by locals,” said Amos Tamam, CEO at Curb. “By integrating with platforms like Gett, we’re aiming to make taxis more ubiquitous online by opening up new digital avenues for today’s consumers and businesses to find and book taxis.”

News: India’s Razorpay raises funds at $3 billion valuation ahead of Southeast Asia launch

• April 18, 2021
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Six-year-old Bangalore-based fintech Razorpay topped a $1 billion valuation late last year, becoming the first Y Combinator-backed Indian startup to reach the much sought after unicorn status. In less than six months since, the Indian startup has tripled its valuation and is preparing to launch in the Southeast Asian markets. Razorpay said on Monday it

Six-year-old Bangalore-based fintech Razorpay topped a $1 billion valuation late last year, becoming the first Y Combinator-backed Indian startup to reach the much sought after unicorn status. In less than six months since, the Indian startup has tripled its valuation and is preparing to launch in the Southeast Asian markets.

Razorpay said on Monday it has raised $160 million in its Series E financing round that valued the startup at $3 billion, up from “a little over” $1 billion valuation in the $100 million Series D in October last year.

The new round has been co-led by existing investors Singapore’s sovereign wealth fund — GIC — and Sequoia Capital India. Some other existing investors including Ribbit Capital also participated in the new round, which takes Razorpay’s to-date raise to $366.5 million.

Razorpay accepts, processes and disburses money online for small businesses and enterprises — essentially everything Stripe does in the U.S. and several other developed markets. But the Indian startup’s offering goes much further than that: In recent years, Razorpay has launched a neobanking platform to issue corporate credit cards (more at the bottom of the article), and it also offers businesses working capital.

With the global giant Stripe still nowhere in the Indian picture, Razorpay has grown to become the market leader. And now, the startup plans to replicate its success from the home country in Southeast Asian markets, Harshil Mathur, co-founder and chief executive of Razorpay, told TechCrunch in an interview.

“We are one of the largest payments providers in the Indian ecosystem. We want to take the learnings we have in India to the Southeast Asian market. Before the end of the financial year, we want to launch in one or two Southeast Asian markets,” said Mathur, adding that the new round gives it the valuation to more confidently explore some M&A opportunities to accelerate growth.

More than 5 million businesses in India rely on Razorpay’s technology to process payments. Some of these clients include Facebook, telecom operator Airtel, ride-hailing firm Ola, food-delivery startup Swiggy, and fintech CRED.

Mathur and Shashank Kumar — pictured above — met at IIT Roorkee college. The duo realized early on that small businesses faced immense difficulties in accepting money digitally and the existing payments processing firms weren’t designed to tackle the needs of small businesses and startups.

Solving this issue became Razorypay’s goal, and in the early days about 11 individuals shared a single apartment as the co-founders scrambled to convince bankers to work with them. The conversations were slow and remained in a deadlock for so long that the co-founders felt helpless explaining the same challenge to investors numerous times, they recalled in an interview two years ago.

The stories one hears about Razorpay today have changed dramatically. In a Clubhouse room, known for sharp criticism of products, dozens of developers and startup founders recently recalled their early interactions with Razorpay, and how the startup’s officials helped their businesses start with — or move to — the Razorpay’s system within hours after reaching it out.

Deepak Abbot, co-founder of Indiagold, recently recalled an incident where his startup had missed an alert, and that coupled with a snafu at the bank, resulted in the startup running out of funds to pay customers.

Last year, Mathur said Razorpay’s core business — processing payments — was fast-growing and the startup would focus more on building the two new offerings.

Offering an update, Mathur said Razorpay X now serves about 15,000 businesses, up from fewer than 5,000 in October last year. Razorpay Capital is now annually bandying out about $80 million to clients, up from less than $40 million a year ago. The duration of the loan Razorpay provides ranges from three to six months, and the ticket size is typically between 0.8 million to 1 million Indian rupees ($10,730 to $13,400).

Mathur said the startup will focus on further growing this business in the next three years and then look at taking the startup public. “If it was just the payments processing business, we could go public right now. But our ambitions are beyond — to become the full ecosystem for businesses. And on those new sides (neobanking and lending), we are early,” he said.

The startup’s marquee offering has grown 40-50% month-on-month in the past six months. It now plans to process over $50 billion in total payment volume by the end of 2021. The startup also plans to hire a number of people. It currently has over 600 open positions, several in Southeast Asian markets.

Monday’s announcement comes at a time when a slice of Indian startups are raising large amounts of capital at a much frequent pace and increased valuations as investors double down on promising bets in the world’s second largest internet market.

Indian startups social commerce Meesho, fintech firm CRED, e-pharmacy firm PharmEasy, millennials-focused Groww, business messaging platform Gupshup and social network ShareChat attained the unicorn status earlier this month. TechCrunch reported last week that SoftBank is in talks to invest in Zeta and Swiggy.

*Razorpay offers a number of value-added services such as automating vendor payments, real-time reconciliation and analytics, managing subscriptions, GST invoicing, designing and creating websites. The startup has also developed an app-based substitute for payments terminals (also known as POS) as well as pay-by-link for enabling offline commerce.

News: Once VMware is free from Dell, who might fancy buying it?

• April 18, 2021
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If you accept that VMware is in play, the prospective price tag means that the number of firms that could afford such a purchase are few and far between.

TechCrunch has spilled much digital ink tracking the fate of VMware since it was brought to Dell’s orbit thanks to the latter company’s epic purchase of EMC in 2016 for $58 billion. That transaction saddled the well-known Texas tech company with heavy debts. Because the deal left VMware a public company, albeit one controlled by Dell, how it might be used to pay down some of its parent company’s arrears was a constant question.

Dell made its move earlier this week, agreeing to spin out VMware in exchange for a huge one-time dividend, a five-year commercial partnership agreement, lots of stock for existing Dell shareholders and Michael Dell retaining his role as chairman of its board.

So, where does the deal leave VMware in terms of independence, and in terms of Dell influence? Dell no longer will hold formal control over VMware as part of the deal, though its shareholders will retain a large stake in the virtualization giant. And with Michael Dell staying on VMware’s board, it will retain influence.

Here’s how VMware described it to shareholders in a presentation this week. The graphic shows that under the new agreement, VMware is no longer a subsidiary of Dell and will now be an independent company.

But with VMware tipped to become independent once again, it could become something of a takeover target. When Dell controlled VMware thanks to majority ownership, a hostile takeover felt out of the question. Now, VMware is a more possible target to the right company with the right offer — provided that the Dell spinout works as planned.

Buying VMware would be an expensive effort, however. It’s worth around $67 billion today. Presuming a large premium would be needed to take this particular technology chess piece off the competitive board, it could cost $100 billion or more to snag VMware from the public markets.

So VMware will soon be more free to pursue a transaction that might be favorable to its shareholders — which will still include every Dell shareholder, because they are receiving stock in VMware as part of its spinout — without worrying about its parent company simply saying no.

News: Consumer agency warns against Peloton Tread+ use, as company pushes back

• April 17, 2021
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Almost exactly a month ago, Peloton CEO John Foley wrote an open letter about the the company’s treadmill. “I’m reaching out to you today because I recently learned about a tragic accident involving a child and the Tread+, resulting in, unthinkably, a death,” it begins. “While we are aware of only a small handful of

Almost exactly a month ago, Peloton CEO John Foley wrote an open letter about the the company’s treadmill. “I’m reaching out to you today because I recently learned about a tragic accident involving a child and the Tread+, resulting in, unthinkably, a death,” it begins. “While we are aware of only a small handful of incidents involving the Tread+ where children have been hurt, each one is devastating to all of us at Peloton, and our hearts go out to the families involved.”

Today, the U.S. Consumer Product Safety Commission issued a warning, telling users to stop using the Tread+. Citing 39 incidents, included the aforementioned death, the CPSC writes, “The Commission has found that the public health and safety requires this notice to warn the public quickly of the hazard.”

Peloton followed up with its own strongly worded statement writing, “The company is troubled by the Consumer Product Safety Commission’s (CPSC) unilateral press release about the Peloton Tread+ because it is inaccurate and misleading. There is no reason to stop using the Tread+, as long as all warnings and safety instructions are followed.”

The commission’s warning includes multiple injuries involving small children and a pet. Specifically, the note calls for users with children at how to cease using the product, a more stern warning than the initial suggestions outlined by Foley back in in March, who at the time told users to keep children and pets away from the system and store the device out of reach after using. Peloton has since added that there have been 23 incidents involving children, 15 with objects and, as the CPSC noted, one with a pet. The company added that it had not revealed the specifics previously out of privacy concern.

“If consumers must continue to use the product, CPSC urges consumers to use the product only in a locked room, to prevent access to children and pets while the treadmill is in use,” the organization notes. “Keep all objects, including exercise balls and other equipment, away from the treadmill.”

For its part, the connected fitness maker adds,

Peloton invited CPSC to make a joint announcement about the danger of not following the warnings and safety instructions provided with the Tread+, and Foley asked to meet directly with CPSC. CPSC has unfairly characterized Peloton’s efforts to collaborate and to correct inaccuracies in CPSC’s press release as an attempt to delay. This could not be farther from the truth. The company already urged Members to follow all warnings and safety instructions. Peloton is disappointed that, despite its offers of collaboration, and despite the fact that the Tread+ complies with all applicable safety standards, CPSC was unwilling to engage in any meaningful discussions with Peloton before issuing its inaccurate and misleading press release.

News: Why it’s not surprising to see nine-figure AI rounds 

• April 17, 2021
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This week Scale AI raised a $325 million Series E. The company, as TechCrunch has written, works in the data labeling space. And it has been on a fundraising tear over the last few years.

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. If you want it in your inbox every Saturday morning, sign up here. 

Ready? Let’s talk money, startups and spicy IPO rumors.

This week, Scale AI raised a $325 million Series E. The company, as TechCrunch has written, works in the data labeling space. And it has been on a fundraising tear over the last few years. In 2019 TechCrunch wrote about how the company’s then-22-year-old CEO had put together a $100 million round. Then in December of 2020, it raised $155 million at a roughly $3.5 billion valuation. Now it’s worth more than $7 billion.

Impressive, yeah? Well, as I learned earlier this week, AI startups in general are having one hell of a year. From the start of 2021 to April 12th, there were 442 AI-startup deals in the U.S. worth $11.65 billion, according to PitchBook data. And the recent Microsoft-Nuance AI deal may accelerate things even more.

Sapphire Ventures’ Jai Das weighed in on the AI venture market for The Exchange. He answered our question regarding how competitive the space was in the first quarter by saying that “investment activity in AI/ML startups has been absolutely insane” during the first quarter.

Per Das: “AI/ML startups are routinely getting 5-6 term sheets from top-tier VC firms and they are able to raise their financings at 150-250X of current ARR.”

Chew on that for a moment. We’ve seen public software multiples reach new heights in the last year, but even for aggressive startup rounds, those are some bonkers numbers. Imagine an AI-focused startup with $1 million in recurring revenue being valued at a quarter of a billion dollars. Damn.

But what about pace among AI investing? We’ve heard that the time from a round opening to its closing among many startups has been compressed and compressed again. Das helped explain the situation, saying in an email that “most firms are completing their due diligence way before the financing actually happens,” which means that there is “no need to do any due diligence during the financing.”

That actually makes some sense? If rounds are largely preemptive — something that Das underscored later on in his comments — you have to do pre-diligence. Otherwise you’ll always be investing blind or missing out on deals due to other firms moving more quickly.

This week The Exchange also dug into the broader domestic venture capital market, with a special focus on seed deals, and the super late-stage investments that dominate headlines. A comment on the earlier-stages of venture investing that just missed our piece on the matter came from Jeff Grabow, EY’s U.S. Venture Capital lead.

In his comments on pre-seed, seed and post-seed deals, something stood out to us — a prediction of sorts. Here’s Grabow:

[Q1 2021] was a strong quarter for pre-seed funding when you compare it to prior years, and we expect the overall environment to remain strong given the abundance of capital available and plethora of investable themes that tap into new markets via technological solutions. It paints a rosy picture for the post-COVID environment.

That tracks with our internal estimates. Q1 2021 was so hot for at least American venture capital activity (expect more international coverage soon) that it seems likely that the year itself will be a record in many respects. Provided that things don’t slow too much, records will be broken. And here Grabow flat-out anticipates a pretty attractive climate for venture after COVID-19 is behind us.

So, records will be broken. The question is by how much.

More notes on Coinbase’s direct listing

Not to whomp the equestrian deceased too much, but I have a few more notes for you on the Coinbase direct listing.

Public.com, the Robinhood consumer trading rival, helped The Exchange better understand just how much retail interest there was in the stock. Per its ever-present spokesperson Mo, on April 14th, Coinbase “was the most popular stock on public,” measured by number of transactions. And perhaps more notably, on the same day “social activity (measured by the number of posts) increased by 70% compared to the day prior.”

I do not know how long the consumer trading boom can last, but that’s a pretty impressive set of metrics.

Similarweb also had a few data points to share, including that visits to coinbase.com reached 86.4 million in January. Hot damn. And during that month new visitors bested returning visitors. That data helps explain how Coinbase wound up with the epic first quarter that it did. Now the question is if it can keep up its bull run or, frankly, if consumer interest in trading in crypto specifically will outlast the equities trading boom or not.

Coinbase Series D lead investor Tom Loverro, who we’ve mentioned a few times this week, including on the podcast, said that we’re still merely in the second inning of crypto. So expect these topics to keep coming up again and again. And again.

Various and sundry

Trying to actually stick to our word count target for once, here are some final notes on the IPO market from the week.

First, the AppLovin IPO did not go according to plan. After modestly pricing at $80 per share, the middle of its range, the mobile-app focused tech company saw its value fall during its first two days’ trading. It’s now worth $61 per share as of the end of Friday.

The Exchange spoke with AppLovin CFO Herald Chen on its IPO day. Chatting with the finance executive, our read from the conversation is that the company could accelerate its acquisition game more now that it is public. Having a liquid stock means that it can be even more acquisitive than before. And AppLovin claims that it can buy companies, run them through its business process, and juice their revenues per its S-1 filing.

If that bears out, the public markets may be giving the company a bit too hard of a time. It was a bit odd to see a software company struggle post-IPO in today’s climate.

Chen also told The Exchange that his firm didn’t see any pushback regarding its multi-class share structure during its roadshow. The multi-class share miasm is something I’ve written about with our own Ron Miller. The CFO did note that no single person has complete control of the company, even with several different classes of equity with disparate voting rights. That matters, frankly.

We’ll keep tabs on AppLovin as it trades. (Our earlier coverage of its numbers is here.)

Finally, autonomous trucking company TuSimple went public this week, and Similarweb filed to go public. We’re also watching the broader IPO market as UiPath either raises its price range or note. We have a guess on that score.

And just as the week was closing, Squarespace dropped its S-1. Notes here with more to come.

Good vibes and nothing other than the best from here,

Alex