Monthly Archives: April 2021

News: Uber hit with default ‘robo-firing’ ruling after another EU labor rights GDPR challenge

Labor activists challenging Uber over what they allege are ‘robo-firings’ of drivers in Europe have trumpeted winning a default judgement in the Netherlands — where the Court of Amsterdam ordered the ride-hailing giant to reinstate six drivers who the litigants claim were unfairly terminated “by algorithmic means.” The court also ordered Uber to pay the

Labor activists challenging Uber over what they allege are ‘robo-firings’ of drivers in Europe have trumpeted winning a default judgement in the Netherlands — where the Court of Amsterdam ordered the ride-hailing giant to reinstate six drivers who the litigants claim were unfairly terminated “by algorithmic means.”

The court also ordered Uber to pay the fired drivers compensation.

The challenge references Article 22 of the European Union’s General Data Protection Regulation (GDPR) — which provides protection for individuals against purely automated decisions with a legal or significant impact.

The activists say this is the first time a court has ordered the overturning of an automated decision to dismiss workers from employment.

However the judgement, which was issued on February 24, was issued by default — and Uber says it was not aware of the case until last week, claiming that was why it did not contest it (nor, indeed, comply with the order).

It had until March 29 to do so, per the litigants, who are being supported by the App Drivers & Couriers Union (ADCU) and Worker Info Exchange (WIE).

Uber argues the default judgement was not correctly served and says it is now making an application to set the default ruling aside and have its case heard “on the basis that the correct procedure was not followed.”

It envisages the hearing taking place within four weeks of its Dutch entity, Uber BV, being made aware of the judgement — which it says occurred on April 8.

“Uber only became aware of this default judgement last week, due to representatives for the ADCU not following proper legal procedure,” an Uber spokesperson told TechCrunch.

A spokesperson for WIE denied that correct procedure was not followed but welcomed the opportunity for Uber to respond to questions over how its driver ID systems operate in court, adding: “They [Uber] are out of time. But we’d be happy to see them in court. They will need to show meaningful human intervention and provide transparency.”

Uber pointed to a separate judgement by the Amsterdam Court last month — which rejected another ADCU- and WIE-backed challenge to Uber’s anti-fraud systems, with the court accepting its explanation that algorithmic tools are mere aids to human “anti-fraud” teams who it said take all decisions on terminations.

“With no knowledge of the case, the Court handed down a default judgement in our absence, which was automatic and not considered. Only weeks later, the very same Court found comprehensively in Uber’s favour on similar issues in a separate case. We will now contest this judgement,” Uber’s spokesperson added.

However WIE said this default judgement “robo-firing” challenge specifically targets Uber’s Hybrid Real-Time ID System — a system that incorporates facial recognition checks and which labor activists recently found misidentifying drivers in a number of instances.

It also pointed to a separate development this week in the U.K. where it said the City of London Magistrates Court ordered the city’s transport regulator, TfL, to reinstate the licence of one of the drivers revoked after Uber routinely notified it of a dismissal (also triggered by Uber’s real time ID system, per WIE).

Reached for comment on that, a TfL spokesperson said: “The safety of the travelling public is our top priority and where we are notified of cases of driver identity fraud, we take immediate licensing action so that passenger safety is not compromised. We always require the evidence behind an operator’s decision to dismiss a driver and review it along with any other relevant information as part of any decision to revoke a licence. All drivers have the right to appeal a decision to remove a licence through the Magistrates’ Court.”

The regulator has been applying pressure to Uber since 2017 when it took the (shocking to Uber) decision to revoke the company’s licence to operate — citing safety and corporate governance concerns.

Since then Uber has been able to continue to operate in the U.K. capital but the company remains under pressure to comply with a laundry list of requirements set by TfL as it tries to regain a full operator licence.

Commenting on the default Dutch judgement on the Uber driver terminations in a statement, James Farrar, director of WIE, accused gig platforms of “hiding management control in algorithms.”

“For the Uber drivers robbed of their jobs and livelihoods this has been a dystopian nightmare come true,” he said. “They were publicly accused of ‘fraudulent activity’ on the back of poorly governed use of bad technology. This case is a wake-up call for lawmakers about the abuse of surveillance technology now proliferating in the gig economy. In the aftermath of the recent U.K. Supreme Court ruling on worker rights gig economy platforms are hiding management control in algorithms. This is misclassification 2.0.”

In another supporting statement, Yaseen Aslam, president of the ADCU, added: “I am deeply concerned about the complicit role Transport for London has played in this catastrophe. They have encouraged Uber to introduce surveillance technology as a price for keeping their operator’s license and the result has been devastating for a TfL licensed workforce that is 94% BAME. The Mayor of London must step in and guarantee the rights and freedoms of Uber drivers licensed under his administration.”  

When pressed on the driver termination challenge being specifically targeted at its Hybrid Real-Time ID system, Uber declined to comment in greater detail — claiming the case is “now a live court case again”.

But its spokesman suggested it will seek to apply the same defence against the earlier “robo-firing” charge — when it argued its anti-fraud systems do not equate to automated decision making under EU law because “meaningful human involvement [is] involved in decisions of this nature”.

 

News: How Pilot charted a course of not raising too much money

A few weeks ago, we wrote about fintech Pilot raising a $100 million Series C that doubled the company’s valuation to $1.2 billion. Bezos Expeditions — Amazon founder Jeff Bezos’ personal investment fund — and Whale Rock Capital joined the round, adding $40 million to a $60 million raise led by Sequoia about one month

A few weeks ago, we wrote about fintech Pilot raising a $100 million Series C that doubled the company’s valuation to $1.2 billion.

Bezos Expeditions — Amazon founder Jeff Bezos’ personal investment fund — and Whale Rock Capital joined the round, adding $40 million to a $60 million raise led by Sequoia about one month prior.

That raise came after a $40 million Series B in April 2019 co-led by Stripe and Index Ventures that valued the company at $355 million.

Both raises were notable and warranted coverage. But sometimes it’s fun to take a peek at the stories behind the raises and dig deeper into the numbers.

So here we go.

First off, San Francisco-based Pilot — which has a mission of affordably providing back-office services such as bookkeeping to startups and SMBs — apparently had term sheets that offered “2x the $40M” raised in its Series B. But it chose not to raise so much capital. 

I also heard that the same investor that ended up leading a now defunct competitor’s $60 million raise first asked to invest $60 million in Pilot as a follow-on to that Series B prior to making the other investment. While I don’t know for sure, I can only presume that what is being referred to is ScaleFactor’s $60 million Series C raise in August 2019 that was led by Coatue Management. (ScaleFactor crashed and burned last year.)

According to CFO Paul Jun: “There were many periods when Pilot turned away new customers and growth capital instead of absolutely maximizing short-term growth…Pilot prioritized building the foundational investments needed for scalability, reliability and high velocity. When it was presented with the opportunity for additional funding towards further growth in 2019, it declined to do so.”

Co-founder and CEO Waseem Daher elaborates, pointing out that the first company that Pilot’s founding team ran, Ksplice, was bootstrapped before getting acquired by Oracle in 2011. (It’s also worth noting that the founding team are all MIT computer scientists.)

“Ultimately, the reason to raise money is you believe that you can deploy the capital, to grow the company or to basically cause the company to grow at the rate you’d like to grow. And it doesn’t make sense to raise money if you don’t need it, or don’t have a good plan for what to do with it,” Daher told TechCrunch. “Too much capital can be bad because it sort of leads you to bad habits…When you have the money, you spend the money.”

So despite what he describes as “a great deal of institutional interest” in 2019, Pilot opted to raise just $40 million, instead of $80 million to $100 million, because it was the amount of capital the company had confidence that it could deploy successfully.

Also, Jun shared some numbers beyond the recent raise amount and valuation.

  • The company has tripled revenue every year since inception, except for 2020 when it doubled revenue.
  • Pilot claims to have had a cash burn of $800,000 per month in 2020 against a starting balance of $40 million.
  • The startup touts a 60% GAAP gross margin. Daher notes: “We feel really good about having long-term unit economics that will work for this business without resorting to offshoring or outsourcing in a way that could compromise quality and compromise relationships.”

Bottom line is companies don’t have to accept all the capital that’s offered to them. And maybe in some cases, they shouldn’t.

News: Amira Learning raises $11M to put its AI-powered literacy tutor in post-COVID classrooms

School closures due to the pandemic have interrupted the learning processes of millions of kids, and without individual attention from teachers, reading skills in particular are taking a hit. Amira Learning aims to address this with an app that reads along with students, intelligently correcting errors in real time. Promising pilots and research mean the

School closures due to the pandemic have interrupted the learning processes of millions of kids, and without individual attention from teachers, reading skills in particular are taking a hit. Amira Learning aims to address this with an app that reads along with students, intelligently correcting errors in real time. Promising pilots and research mean the company is poised to go big as education changes, and it has raised $11M to scale up with a new app and growing customer base.

In classrooms, a common exercise is to have students read aloud from a storybook or worksheet. The teacher listens carefully, stopping and correcting students on difficult words. This “guided reading” process is fundamental for both instruction and assessment: it not only helps the kids learn, but the teacher can break the class up into groups with similar reading levels so she can offer tailored lessons.

“Guided reading is needs-based, differentiated instruction and in COVID we couldn’t do it,” said Andrea Burkiett, Director of Elementary Curriculum and Instruction at the Savannah-Chatham County Public School System. Breakout sessions are technically possible, “but when you’re talking about a kindergarten student who doesn’t even know how to use a mouse or touchpad, COVID basically made small groups nonexistent.”

Amira replicates the guided reading process by analyzing the child’s speech as they read through a story and identifying things like mispronunciations, skipped words, and other common stumbles. It’s based on research going back 20 years that has tested whether learners using such an automated system actually see any gains (and they did, though generally in a lab setting).

In fact I was speaking to Burkiett out of skepticism — “AI” products are thick on the ground and while it does little harm if one recommends you a recipe you don’t like, it’s a serious matter if a kid’s education is impacted. I wanted to be sure this wasn’t a random app hawking old research to lend itself credibility, and after talking with Burkiett and CEO Mark Angel I feel it’s quite the opposite, and could actually be a valuable tool for educators. But it needed to convince educators first.

Not a replacement but a force multiplier

“You have to start by truly identifying the reason for wanting to employ a tech tool,” said Burkiett. “There are a lot of tech tools out there that are exciting, fun for kids, etc, but we could use all of them and not impact growth or learning at all because we didn’t stop and say, this tool helps me with this need.”

Amira was decided on as one that addresses the particular need in the K-5 range of steadily improving reading level through constant practice and feedback.

“When COVID hit, every tech tool came out of the woodwork and was made free and available,” Burkiett recalled. “With Amira you’re looking at a 1:1 tutor at their specific level. She’s not a replacement for a teacher — though it has been that way in COVID — but beyond COVID she could become a force multiplier,” said Burkiett.

You can see the old version of Amira in action below, though it’s been updated since:

Testing Amira with her own district’s students, Burkiett replicated the results that have been obtained in more controlled settings: as much as twice or three times as much progress in reading level based on standard assessment tools, some of which are built into the teacher-side Amira app.

Naturally it isn’t possible to simply attribute all this improvement to Amira — there are other variables in play. But it appears to help and doesn’t hinder, and the effect correlates with frequency of use. The exact mechanism isn’t as important as the fact that kids learn faster when they use the app versus when they don’t, and furthermore this allows teachers to better allocate resources and time. A kid who can’t use it as often because their family shares a single computer is at a disadvantage that has nothing to do with their aptitude — but this problem can be detected and accounted for by the teacher, unlike a simple “read at home” assignment.

“Outside COVID we would always have students struggling with reading, and we would have parents with the money and knowledge to support their student,” Burkiett explained. “But now we can take this tool and offer it to students regardless of mom and dad’s time, mom and dad’s ability to pay. We can now give that tutor session to every single student.”

“Radically sub-optimal conditions”

This is familiar territory for CEO Mark Angel, though the AI aspect, he admits, is new.

“A lot of the Amira team came from Renaissance Learning. bringing fairly conventional edtech software into elementary school classrooms at scale. The actual tech we used was very simple compared to Amira — the big challenge was trying to figure out how to make applications work with the teacher workflow, or make them friendly and resilient when 6 year olds are your users,” he told me.

“Not to make it trite, but what we’ve learned is really just listen to teachers — they’re the super-users,” Angel continued. “And to design for radically sub-optimal conditions, like background noise, kids playing with the microphone, the myriad things that happen in real life circumstances.”

Once they were confident in the ability of the app to reliably decode words, the system was given three fundamental tasks that fall under the broader umbrella of machine learning.

The first is telling the difference between a sentence being read correctly and incorrectly. This can be difficult due to the many normal differences between speakers. Singling out errors that matter, versus simply deviation from an imaginary norm (in speech recognition that is often American English as spoken by white people) lets readers go at their own pace and in their own voice, with only actual issues like saying a silent k noted by the app.

(On that note, considering the prevalence of English language learners with accents, I asked about the company’s performance and approach there. Angel said they and their research partners went to great lengths to make sure they had a representative dataset, and that the model only flags pronunciations that indicate a word was not read or understood correctly.)

The second is knowing what action to take to correct an error. In the case of a silent k, it matters whether this is a first grader who is still learning spelling or a fourth grader who is proficient. And is this the first time they’ve made that mistake, or the tenth? Do they need an explanation of why the word is this way, or several examples of similar words? “It’s about helping a student at a moment in time,” Angel said, both in the moment of reading that word, and in the context of their current state as a learner.

Screenshot of a reading assessment in the app Amira.

Third is a data-based triage system that warns students and parents if a kid may potentially have a language learning disorder like dyslexia. The patterns are there in how they read — and while a system like Amira can’t actually diagnose, it can flag kids who may be high risk to receive a more thorough screening. (A note on privacy: Angel assured me that all information is totally private and by default is considered to belong to the district. “You’d have to be insane to take advantage of it. We’d be out of business in a nanosecond.”)

The $10M in funding comes at what could be a hockey-stick moment for Amira’s adoption. (The round was led by Authentic Ventures II, LP, with participation from Vertical Ventures, Owl Ventures, and Rethink Education.)

“COVID was a gigantic spotlight on the problem that Amira was created to solve,” Angel said. “We’ve always struggled in this country to help our children become fluent readers. The data is quite scary — more than two thirds of our 4th graders aren’t proficient readers, and those two thirds aren’t equally distributed by income or race. It’s a decades long struggle.”

Having basically given the product away for a year, the company is now looking at how to convert those users into customers. It seems like, just like the rest of society, “going back to normal” doesn’t necessarily mean going back to 2019 entirely. The lessons of the pandemic era are sticking.

“They don’t have the intention to just go back to the old ways,” Angel explained. “They’re searching for a new synthesis — how to incorporate tech, but do it in a classroom with kids elbow to elbow and interacting with teachers. So we’re focused on making Amira the norm in a post-COVID classroom.”

Part of that is making sure the app works with language learners at more levels and grades, so the team is working to expand its capabilities upwards to include middle school students as well as elementary. Another is building out the management side so that success at the classroom and district levels can be more easily understood.

Cartoon illustration of an adventurous looking woman in front of a jungle and zeppelin.

Amira’s appearance got an update in the new app as well.

The company is also launching a new app aimed at parents rather than teachers. “A year ago 100 percent of our usage was in the classroom, then 3 weeks later 100 percent of our usage was at home. We had to learn a lot about how to adapt. Out of that learning we’re shipping Amira and the Story Craft that helps parents work with their children.”

Hundreds of districts are on board provisionally, but decisions are still being kicked down the road as they deal with outbreaks, frustrated parents, and every other chaotic aspect of getting back to “normal.”

Perhaps a bit of celebrity juice may help tip the balance in their favor. A new partnership with Houston Texans linebacker Brennan Scarlett has the NFL player advising the board and covering the cost of 100 students at a Portland, OR school through his education charity, the Big Yard Foundation — and more to come. It may be a drop in the bucket in the scheme of things, with a year of schooling disrupted, but teachers know that every drop counts.

News: Bird, Lime and VeoRide selected for NYC e-scooter pilot

Lime, Bird and VeoRide have scored coveted permits to New York City’s first e-scooter pilot. The New York City Department of Transportation, which originally released a request for proposals in October for the pilot that was meant to start in early March, made its selections public Wednesday. The three companies are expected to begin operations in

Lime, Bird and VeoRide have scored coveted permits to New York City’s first e-scooter pilot.

The New York City Department of Transportation, which originally released a request for proposals in October for the pilot that was meant to start in early March, made its selections public Wednesday. The three companies are expected to begin operations in the Bronx by early summer with 1,000 electric scooters each.

“After a competitive selection process, Bird, Lime and Veo unveil e-scooter models and pricing plans that will allow most rides for under $5,” said NYC DOT in a statement. “New bicycle lanes planned for pilot zone over the next two years will also enhance e-scooter mobility and safety.” 

Micromobility operators have been competing fiercely to win a dwindling number of city concessions. If you can make it in New York, you can make it anywhere, says Frank Sinatra, and winning the Big Apple plays a massive role in determining which operators will survive as the rideshare industry consolidates under a few powerful players. 

Bird is already in over 100 cities around the United States, Europe and the Middle East, while Lime is ubiquitous with around 130 cities in the U.S., Europe, the Middle East and Australia under its belt. This win calcifies the clout the two already have in the industry. Chicago-based VeoRide is arguably the underdog of the trio with service around 20 U.S. cities, so getting the chance to operate in New York could be a game-changer for the already profitable company. This is especially true in a city that’s simultaneously still wary of coronavirus and eager to get out and catch up with friends and family this summer. 

“This e-scooter pilot program couldn’t come at a better time, as New York focuses on providing low-cost transportation options that allow residents to travel socially-distanced in the open air,” Lime CEO Wayne Ting said in a statement. “In welcoming a new mode of transportation to its streets, New York demonstrates its dedication to shepherding a sustainable recovery from COVID-19 — one that isn’t hampered by the crippling traffic congestion that depresses growth.”

Superpedestrian and Spin are among the companies that weren’t selected for participation in the program. Superpedestrian CEO Assaf Biderman said in a statement that the company was proud of the proposal it presented. “We know this is just a beginning, and there are more communities in every corner of the city that are calling out for new, safe and sustainable transportation options–something we can deliver,” he said.

Despite general fanfare, there may be a limit to how far operations can spread beyond the Bronx in the future. The first phase of the pilot covers neighborhoods in the East Bronx spanning from Eastchester to Van Nest; the second phase extends south to Soundview and east to Edgewater with another 4,000 to 6,000 scooters. The DOT said it chose these geographic boundaries to reach transit deserts that are unserved by existing bike share programs.

That last bit is important to note. Lyft-owned Citi Bike has a monopoly over shared micromobilty in NYC, with bike docks all over Manhattan and in parts of Brooklyn, Queens and the South Bronx. While 2018 legislation that allowed for the introduction of dockless e-scooters in NYC aims to “prioritize” hoods with no access to Citi Bike, the pilot zones were designed specifically to avoid overlap with Bronx neighborhoods targeted by the docked bike share’s expansion plans. 

What to expect from the e-scooter pilot in the Bronx

Aside from operating in alignment with NYC’s Vision Zero and equity goals, the DOT chose companies that would play ball with the city’s strong enforcement mechanisms, and that very much includes managing sidewalk clutter with dedicated parking corrals and fleet management software, a DOT spokesperson told TechCrunch. 

Lime intends to combine its corral and lock-to parking strategies for the first time in NYC to ensure its Gen 3 and Gen 4 scooters don’t become a bother to the community. It’ll also rely on its backend fleet management software and a “tidy crew” that will patrol the pilot area to rebalance scooters. 

“At high traffic locations like transit stations, riders must park in physical parking corrals enforced using Lime’s industry-leading geofence technology,” Phil Jones, Lime’s senior government relations director told TechCrunch. Lime uses a combination of onboard and cloud computing to determine the locations of geofences, so it’ll be interesting to see how this tech holds up in such a dense city, where even Google Maps often has trouble placing individuals. “Using our LimeLocks, riders must lock their e-scooters at bike racks or other places where traditional bike parking is permitted.”

Veo also plans to implement lock-to parking to keep scooters from falling over or blocking sidewalks.  

The pilot will cover an 18-square-mile area that’s home to 570,000 residents, 80% of whom are black or Latino. The median household income in the Bronx is $40,088 with a poverty rate of 26.2%, according to the U.S. Census Bureau, so equity was top of mind for the city when evaluating operators. 

Bird already has an Access program that offers unlimited rides to low-income residents who are on government assistance for $5 a month, and even allows riders to pay with cash and unlock vehicles via SMS. Veo has an access program, but unclear what terms

Lime’s Access Program is similar, in that it offers 50% off rides to those on public assistance, but with NYC the program will see a rebrand as Lime Aid and expand to cover frontline healthcare workers, teachers, and people in the performing arts, non-profit and hospitality sectors — those who have been most affected by the pandemic. Lime also has agreements with employment offices like BronxWorks and the Center for Employment Opportunities to source employees for the pilot locally.

About 11% of Bronx residents under the age of 65 have a disability, so the DOT also evaluated operators based on accessibility. Victor Calise, commissioner of the mayor’s office for people with disabilities, was one of the people on the grading panel, so Lime made a point of focusing on accessibility for the disabled community. 

Lime recently launched a program in San Francisco that allows people with disabilities to order an accessible scooter delivered to their house with 24 hours advance notice, and the company intends to try out the same service in New York. In preparation for the Bronx pilot, Lime designed and built seven different vehicle types to meet various physical abilities, including a three-wheeled, sit-down vehicle for someone who has challenges balancing; a two-wheeled sit-down for someone who can’t stand for long periods of time; a tandem scooter of sorts so someone who has trouble seeing or is blind can have a partner with full vision with them; and a tricycle with a shopping basket. These vehicles are available on demand and will be delivered directly to users upon request. 

“We didn’t want to just think what might a disabled person want, but to actually go to the New York disabled community and learn from them,” said Jones, noting that Lime worked with New York’s Center for Independence of the Disabled, as well as other advocacy groups, prior to submitting its bid. “There’s a vocal and vibrant community here, and we are not just addressing their concerns around parking on the street, but how they can actually use our devices so we can provide a meaningful service to them.”

Veo will offer its stand-up Astro e-scooter and its futuristic-looking Cosmo seated e-scooter because seated rides are more accessible for many, especially those taking longer trips. The company has also stated that it’s committed to ADA compliance and will make electric-powered attachments that allow private non-motorized wheelchairs to operate as motorized devices available upon request.  

In terms of reducing traffic congestion and air pollution, Veo also touts its waterproof, durable, swappable batteries, which don’t require a gas-guzzling van to replace batteries but which can be done via cargo bike or even the Cosmo. Lime also has swappable batteries, but according to a November blog post, Bird has still not implemented this technology in full. 

To enhance safety, Bird recently launched Beginner Mode as a new feature built for the Bird Two alongside autonomous emergency braking and skid detection. This gives new riders a gentle acceleration option so they can gradually work their way up to full speed.  

News: Check out the tech leaders joining us on Extra Crunch Live in May

Extra Crunch Live, our weekly event series that connects founders with tech leaders, is really picking up speed. Recently, we had a conversation with Accel’s Dan Levine and Scale’s Alexandr Wang about how sometimes, unconventional VC deals are the best deals. We’ve also taken a walk through early decks from companies like Poshmark, Steady and

Extra Crunch Live, our weekly event series that connects founders with tech leaders, is really picking up speed. Recently, we had a conversation with Accel’s Dan Levine and Scale’s Alexandr Wang about how sometimes, unconventional VC deals are the best deals.

We’ve also taken a walk through early decks from companies like Poshmark, Steady and Justworks.

But we’re only getting started. We have an amazing lineup of speakers hanging out with us in May.

As a reminder, Extra Crunch Live goes down every Wednesday at 3pm ET/noon PT and is open to anyone who wants to join. We talk to investor/founder duos about how their deals came together, including the challenges, and usually take a look at their original decks. We also look at pitch decks submitted by audience members and our guests give their live feedback. If that sounds like something you’d be into, you can submit your deck using this form.

One other note: On-demand access to this content is reserved for Extra Crunch members (who also get unfettered access to loads of premium content like market maps, investor surveys, EC-1s and more). If you’ve been on the fence about joining Extra Crunch, just do it.

So without any further ado, let me tell you a little bit about our May lineup.

Extra Crunch Live: FirstMark Capital and Orchard

May 5 – 3pm ET/noon PT

Court Cunningham launched Orchard (formerly Perch) in 2017 and turned it into one of the brightest stars in the universe of prop tech. The company has raised more than $350 million to rethink the way people buy and sell homes (simultaneously). Rick Heitzmann, managing partner at FirstMark Capital, led the company’s Series A, adding to a long list of ultimately successful early-stage companies that Heitzman has bet on. Hear this duo talk about the growth of prop tech, how they came together on that Series A deal and what’s next in the world of startup venture.

Register here.

 


Extra Crunch Live: Toyota AI Ventures and May Mobility

May 12 – 3pm ET/noon PT

The mobility industry has evolved rapidly in the last decade. On Extra Crunch Live, we’re lucky to be joined by Toyota AI Ventures’ Jim Adler and May Mobility’s Nina Grooms Lee and Edwin Olson. We’ll talk about how Toyota AI Ventures led May’s seed round, and how May went on to raise more than $80 million. Adler, Lee and Olson will also give their live feedback on decks submitted by the audience.

Register here.


Extra Crunch Live: Sequoia and Vise

May 19 – 3pm ET/noon PT

Shaun Maguire, partner at Sequoia, has been on both sides of the table, as an entrepreneur and investor. His portfolio includes Stripe, Opendoor, IonQ, SpinLaunch, Lambda School, Dandelion Energy, Clutter and Vise. Samir Vasavada co-founded Vise in 2016 to bring AI to financial advisors and has raised more than $60 million. Hear these two discuss how the fintech landscape is evolving, how to successfully raise funding in fintech and how they overcome challenges together.

Register here.


Extra Crunch Live: Bessemer and Toast

May 26 – 3pm ET/noon PT

Kent Bennett has invested in companies like Blue Apron, Bevi and Toast, among others. It wouldn’t be an overstatement to say he’s an expert in retail and hospitality tech. Aman Narang founded Toast in 2011 and the restaurant POS service has raised more than $900 million. Hear these two discuss how they came together for Toast’s Series B deal and how they work together today.

Register here.

News: Dear Sophie: How can I get an H-1B without the lottery?

For the past few years, our company has put very promising candidates into the annual H-1B lottery. None of them have been selected. Are there any other ways we can obtain H-1Bs for our team members?

Sophie Alcorn
Contributor

Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.


Dear Sophie:

For the past few years, our company has put very promising candidates into the annual H-1B lottery. None of them have been selected — and none of them meet the requirements for other work visas like an O-1A.

We lost out again in this year’s H-1B lottery. Are there any other ways we can obtain H-1Bs for our team members?

— Soldiering On in Sunnyvale

Dear Soldiering:

Thank you for your timely question — you are not alone! Many employers face the same frustration given that the number of H-1B visas the government issues each year is capped at 85,000, while typically more than twice that number are sought by employers annually.

At my Silicon Valley immigration law firm, we’ve been delighted for the opportunity to collaborate with the nonprofit Open Avenues Foundation to support private companies with a Plan B: a cap-exempt, concurrent H-1B for their employees, without needing to go through the H-1B lottery.

It’s a timely, predictable solution that supports teams whether the beneficiary is currently outside or inside the United States.

A composite image of immigration law attorney Sophie Alcorn in front of a background with a TechCrunch logo.

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

I recently interviewed Danielle Goldman, co-founder and executive director of Open Avenues, on my podcast. Through the Global Talent Fellowship program, the foundation offers a unique solution for employers like you to have a Plan B for H-1Bs: It’s possible to obtain an H-1B visa for an existing or prospective employee without going through the H-1B lottery process — or the randomness and timing restrictions that come with it. Goldman refers to the program as “innovation within legislation.”

So how does that work? Well, first off, you should know that four categories of employers are exempt from the annual H-1B lottery, meaning they can apply for an H-1B visa at any time of year and their pool of H-1B visas is not capped. The four categories of employers that are eligible for cap-exempt H-1Bs include:

News: Toyota taps Apex.AI for its autonomous vehicle operating system

Automakers shifting to all-electric and tech-laden vehicles have discovered that software — and more aptly software that is free of bugs and can be updated wirelessly — has become a consistent speed bump on the road to attracting customers. It is an issue that plagued Volkswagen’s launch of its all-electric VW ID.3, the 2022 Volvo

Automakers shifting to all-electric and tech-laden vehicles have discovered that software — and more aptly software that is free of bugs and can be updated wirelessly — has become a consistent speed bump on the road to attracting customers. It is an issue that plagued Volkswagen’s launch of its all-electric VW ID.3, the 2022 Volvo XC40 Recharge and the Ford Mustang Mach-E. 

Apex.AI, a startup founded by Bosch veterans and automated systems engineers Jan Becker and Dejan Pangercic, has spent four years rewriting the robot operating system that will give automakers the tools to integrate software within the vehicle and make sure all the applications run reliably. Now, freshly armed with a safety certification that validates its software development kit (SDK) is sophisticated enough to be used in production vehicles, Apex.AI has landed Toyota and Japanese tech startup Tier IV as partners.

Toyota’s Woven Planet Group is integrating the Apex.OS SDK into its own vehicle development platform, called Arene. The Apex SDK will handle the safety-critical applications and aims to speed up autonomous software development and ultimately bring it to production vehicles. In a separate deal announced Wednesday, Tier IV, a startup in Japan known as the original creator of open-source software for autonomous driving, called Autoware, said it will use Apex.AI’s software stack for safety-critical autonomous systems.

“A trend that has become obvious in the past year, is in order to beat Tesla, car companies are aiming for what they call a software-defined vehicle,” Becker said in a recent interview. Automakers are moving away from distributing 100 electric control units (computers) throughout a vehicle and instead are having just a few high-performance computers with all the functions being implemented by the software, Becker explained.

That shift might mean hundreds or even thousands of software developers might be working on one vehicle. “And that really only works if they are all using the same interface, and not in silos,” Becker said. “And this is exactly what this SDK now enables. So it’s the first time, with Apex.OS that there’s this common abstraction layer or SDK, which can address practically all functions in a vehicle.”

Apex’s toolkit has attracted the attention of private and strategic investors. In 2018, the company raised a Series A round of $15.5 million. Since then, the company has taken strategic investment from Airbus, JLR’s InMotion Ventures, Toyota and Volvo Group. Becker wouldn’t disclose the amounts of those investments, but noted the company is now raising for a Series B.

The roots of Apex.OS are the open-source Robot Operating System known as ROS that is commonly used for R&D projects and the development of autonomous vehicles. Apex’s aim was to rewrite the code to handle functional safety and real-time processing. The SDK was recently certified by TÜV NORD for functional safety. This means the technology is verified for use in production vehicles.

It was a longstanding belief that open-source code was not certifiable, according to Becker. The company spent a year working on the certification.

“If a software crash happens on your laptop it’s inconvenient, but if software crashes in any safety-critical function of a vehicle it can be catastrophic,” Becker said. “This is why we set out to write reliable software that protects against system crashes or operation failures. The certification proves we accomplished our goal as our software targets failure rates so low that they cannot be expressed statistically.”

News: Gay dating site Manhunt hacked, thousands of accounts stolen

Manhunt, a gay dating app that claims to have 6 million male members, has confirmed it was hit by a data breach in February after a hacker gained access to the company’s accounts database. In a notice filed with the Washington attorney general’s office, Manhunt said the hacker “gained access to a database that stored

Manhunt, a gay dating app that claims to have 6 million male members, has confirmed it was hit by a data breach in February after a hacker gained access to the company’s accounts database.

In a notice filed with the Washington attorney general’s office, Manhunt said the hacker “gained access to a database that stored account credentials for Manhunt users,” and “downloaded the usernames, email addresses and passwords for a subset of our users in early February 2021.

The notice did not say how the passwords were scrambled, if at all, to prevent them from being read by humans. Passwords scrambled using weak algorithms can sometimes be decoded into plain text, allowing malicious hackers to break into their accounts.

Following the breach, Manhunt force-reset account passwords began alerting users in mid-March. Manhunt did not say what percentage of its users had their data stolen or how the data breach happened, but said that more than 7,700 Washington state residents were affected.

The company’s attorneys did not reply to an email requesting comment.

But questions remain about how Manhunt handled the breach. In March, the company tweeted that, “At this time, all Manhunt users are required to update their password to ensure it meets the updated password requirements.” The tweet did not say that user accounts had been stolen.

Manhunt was launched in 2001 by Online-Buddies Inc., which also offered gay dating app Jack’d before it was sold to Perry Street in 2019 for an undisclosed sum. Just months before the sale, Jack’d had a security lapse that exposed users’ private photos and location data.

Dating sites store some of the most sensitive information on their users, and are frequently a target of malicious hackers. In 2015, Ashley Madison, a dating site that encouraged users to have an affair, was hacked, exposing names, and postal and email addresses. Several people died by suicide after the stolen data was posted online. A year later, dating site AdultFriendFinder was hacked, exposing more than 400 million user accounts.

In 2018, same-sex dating app Grindr made headlines for sharing users’ HIV status with data analytics firms.

In other cases, poor security — in some cases none at all — led to data spills involving some of the most sensitive data. In 2019, Rela, a popular dating app for gay and queer women in China, left a server unsecured with no password, allowing anyone to access sensitive data — including sexual orientation and geolocation — on more than 5 million app users. Months later, Jewish dating app JCrush exposed around 200,000 user records.

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News: Amazon’s latest Echo Buds are a shameless Apple knock-off

This is Amazon’s latest hardware product: The redesigned Alexa earbuds. TechCrunch covered the announcement here, where the specs and capabilities are listed. I’m sure they work fine, too, but the case design is a blatant rip-off of Apple’s AirPod Pros. This is just lazy. Amazon has a long history of selling and promoting lookalikes, copycats,

This is Amazon’s latest hardware product: The redesigned Alexa earbuds. TechCrunch covered the announcement here, where the specs and capabilities are listed. I’m sure they work fine, too, but the case design is a blatant rip-off of Apple’s AirPod Pros.

This is just lazy.

Amazon has a long history of selling and promoting lookalikes, copycats, and clones of other products. Likewise, the retailer sued third-party sellers for doing the same thing. Amazon also has been accused of investing in companies and later producing clones of the products. In 2020 CEO Jeff Bezos testified on this subject in front of a congressional hearing where he couldn’t guarantee the company would end this process. Often the products Amazon copies come from small startups without the resources to fight a giant like Amazon.

Last month California-based Peak Design took to YouTube to protest Amazon’s unabashed copy of one of Peak’s top products. As Peak points out, Amazon’s take is a cheap knockoff made from lower quality materials and without Peak Design’s ethical manufacturing. The video quickly went viral, amassing over 4.5 million hits and highlighting Amazon’s shady practices.

For the latest Echo Buds, Amazon copied a market leader instead of a small startup. To recap, Amazon, a company worth over a trillion dollars, just released a product that looks essentially identical to a top-selling product from Apple, a company worth 2 trillion dollars.

The Echo Buds are much less expensive than Apple’s $250 AirPod Pros, too. The standard Echo Buds costs $100, and the version with wireless charging runs $120. It’s important to note the wireless buds themselves do not look like AirPods. Amazon only copied the ubiquitous AirPod Pro case.

The consumer is the loser here. With more resources than many countries, Amazon can produce world-class products, yet it decided to copy a rival’s market-leading product. In the end, it’s easier (and cheaper) to follow trends than become a trendsetter.


Peak Design takes on Amazon

News: I can’t believe it’s not meat! Mycelium meat replacement company aims for summer launch of first products

Meati, a company turning mycelium (the structural fibers of fungi) into healthier meat replacements for consumers, is prepping for a big summer rollout. Co-founder Tyler Huggins expects to have the first samples of its whole-cut steak and chicken products in select restaurants around the country — along with their first commercial product, a jerky strip.

Meati, a company turning mycelium (the structural fibers of fungi) into healthier meat replacements for consumers, is prepping for a big summer rollout.

Co-founder Tyler Huggins expects to have the first samples of its whole-cut steak and chicken products in select restaurants around the country — along with their first commercial product, a jerky strip.

For Huggins, the product launch is another step on a long road toward broad commercial adoption of functional fungi foods as a better-for-you alternative to traditional meats.

“Use this as a conversation starter. About 2 ounces of this gives you 50% of your protein; 50% of your fiber; and half of your daily zinc. There really is nothing that can compare to this product in terms of nutritionals,” Huggins said. 

And moving from meat to mushrooms is a better option for the planet.

Meati expects to turn on its pilot plant this summer and is joining a movement among mushroom fans that includes milk replacements, from Perfect Day, more meat replacements from Atlast, and leather substitutes from Ecovative and MycoWorks.

“We’re definitely all in this together,” said Huggins of the other mob of mycelium-based tech companies bringing products to market.

However, not all mycelium is created equally, Huggins said. Meati has what Huggins said was a unique way of growing its funguses (not a real word) that “keep it in its most happy state.” That means peak nutritional content and peak growth efficiency, according to the company.

For Huggins, whose parents own a bison ranch and who grew up in cattle country, the goal is not to replace a t-bone or a ribeye, but the cuts of meat and chicken that find their ways into a burrito supreme or other quick serve meat cuts.

Rendering of Meati mushroom meats in a Banh Mi. Image Credit: Meati

“Head to head with that kind of cut, we win,” Huggins said. “I’d rather pick a fight there now and buy ourselves some time. I don’t think we’re going to go super high-end to start.”

That said, the company’s cap table of investors already includes some pretty heady culinary company. Acre Venture Partners (which counts Sam Kass — President Barack Obama’s Senior Policy Advisor for Nutrition Policy, Executive Director for First Lady Michelle Obama’s Let’s Move! campaign, and an Assistant Chef in the White House — among its partnership) is an investor. So is Chicago’s fine dining temple, Alinea.

But Huggins wants Meati to be an everyday type of meat replacement product. “I want to make sure that people think this is an every day protein,” Huggins said.

Meati thinks its future meat replacements will be cost competitive with conventional beef and chicken, but to whet consumers’ appetites, the company is starting with jerky.

“Meati’s delicious jerky,” said Huggins. “It provides this blank canvas. We’ll start with these beef jerky like flavors. But I want to come out of the gate and say that we’re mycelium jerky.”

The company currently has 30 people on staff led by Huggins and fo-founder Justin Whiteley. The two men initially started working on Meati as a battery replacement. Based on their research (Huggins with mycelium and Whiteley with advanced batteries) the two men received a grant for a mycelium-based electrode for lithium ion batteries.

“We were trying to tweak the chemical composition of the mycelium to make a better battery. What we found was that we were making something nutritious and edible,” said Huggins.

Also… the battery companies didn’t want it.

Now, backed by $28 million from Acre, Prelude Ventures, Congruent Ventures and Tao Capital, Meati is ready to go to market. The company also has access to debt capital to build out its vast network of mycelium growing facilities. It’s just raised a $18 million debt round from Trinity and Silicon Valley Bank.

“Two years ago … most companies in this space … there wasn’t this ability to take on debt to put steel in the ground,” said Huggins. “It’s an exciting time to be in food tech given that you can raise VC funding and there’s this ready available market for debt financing. You’ll start seeing faster and more rapid development because of it.”

Meati co-founders Tyler Huggins and Justin Whiteley. Image Credit: Meati

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