Monthly Archives: April 2021

News: Coinbase sets direct listing reference price at $250/share, valuing the company at as much as $65B

• April 13, 2021
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Coinbase, the American cryptocurrency trading giant, has set a reference price for its direct listing at $250 per share. According to the company’s most recent SEC filing, it has a fully diluted share count of 261.3 million, giving the company a valuation of $65.3 billion. Using a simple share count of 196,760,122 provided in its

Coinbase, the American cryptocurrency trading giant, has set a reference price for its direct listing at $250 per share. According to the company’s most recent SEC filing, it has a fully diluted share count of 261.3 million, giving the company a valuation of $65.3 billion. Using a simple share count of 196,760,122 provided in its most recent S-1/A filing, Coinbase would be worth a slimmer $49.2 billion.

Regardless of which share count is used to calculate the company’s valuation, its new worth is miles above its final private price set in 2018 when the company was worth $8 billion.

Immediate chatter following the company’s direct listing reference price was that the price could be low. While Coinbase will not suffer usual venture capital censure if its shares quickly appreciate as it is not selling stock in its flotation, it would still be slightly humorous if its set reference price was merely a reference to an overly conservative estimate of its worth.

Its private backers are in for a bonanza either way. Around four years ago in 2017 Coinbase was worth just $1.6 billion, according to Crunchbase data. For investors in that round, let alone its earlier fundraises, the valuation implied by a $250 per-share price represents a multiple of around 40x from the price that they paid.

The Coinbase direct listing was turbocharged recently when the company provided a first-look at its Q1 2021 performance. As TechCrunch reported at the time, the company’s recent growth was impressive, with revenue scaling from $585.1 million in Q4 2020, to $1.8 billion in the first three months of this year. The new numbers set an already-hot company’s public debut on fire.

Place your bets now concerning where Coinbase might open, and how high its value may rise. It’s going to be quite the show.

News: Republican antitrust bill would block all big tech acquisitions

• April 13, 2021
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There are about to be a lot of antitrust bills taking aim at big tech, and here’s one more. Senator Josh Hawley (R-MO) rolled out a new bill this week that would take some severe measures to rein in big tech’s power, blocking mergers and acquisitions outright. The “Trust-Busting for the Twenty-First Century Act” would

There are about to be a lot of antitrust bills taking aim at big tech, and here’s one more. Senator Josh Hawley (R-MO) rolled out a new bill this week that would take some severe measures to rein in big tech’s power, blocking mergers and acquisitions outright.

The “Trust-Busting for the Twenty-First Century Act” would ban any acquisitions by companies with a market cap of more than $100 billion, including vertical mergers. The bill also proposes changes that would dramatically heighten the financial pain for companies caught engaging in anti-competitive behavior, forcing any company that loses an antirust suit to forfeit profits made through those business practices.

At its core, Hawley’s legislation would snip some of the red tape around antitrust enforcement by amending the Sherman Act, which made monopolies illegal, and the Clayton Act, which expanded the scope of illegal anti-competitive behavior. The idea is to make it easier for the FTC and other regulators to deem a company’s behavior anti-competitive — a key criticism of the outdated antitrust rules that haven’t kept pace with the realities of the tech industry.

The bill isn’t likely to get too far in a Democratic Senate, but it’s not insignificant. Sen. Amy Klobuchar (D-MN), who chairs the Senate’s antitrust subcommittee, proposed legislation earlier this year that would also create barriers for dominant companies with a habit of scooping up their competitors. Klobuchar’s own ideas for curtailing big tech’s power similarly focus on reforming the antitrust laws that have shaped U.S. business for more than a century.

Click to access The%20Trust-Busting%20for%20the%20Twenty-First%20Century%20Act.pdf

The Republican bill may have some overlap with Democratic proposals, but it still hits some familiar notes from the Trump era of hyper-partisan big tech criticism. Hawley slams “woke mega-corporations” in Silicon Valley for exercising too much power over the information and products that Americans consume. While Democrats naturally don’t share that critique, Hawley’s bill makes it clear that antitrust reform targeting big tech is one policy era where both political parties could align on the ends, even if they don’t see eye to eye on the why.

Hawley’s bill is the latest, but it won’t be the last. Rep. David Cicilline (D-RI), who spearheads tech antitrust efforts in the House, previously announce his own plans to introduce a flurry of antitrust reform bills rather than one sweeping piece of legislation. Those bills, which will be more narrowly targeted to make them difficult for tech lobbyists to defeat, are due out in May.

News: Risk startup LogicGate confirms data breach

• April 13, 2021
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Risk and compliance startup LogicGate has confirmed a data breach. But unless you’re a customer, you probably didn’t hear about it. An email sent by LogicGate to customers earlier this month said on February 23 an unauthorized third-party obtained credentials to its Amazon Web Services-hosted cloud storage servers storing customer backup files for its flagship

Risk and compliance startup LogicGate has confirmed a data breach. But unless you’re a customer, you probably didn’t hear about it.

An email sent by LogicGate to customers earlier this month said on February 23 an unauthorized third-party obtained credentials to its Amazon Web Services-hosted cloud storage servers storing customer backup files for its flagship platform Risk Cloud, which helps companies to identify and manage their risk and compliance with data protection and security standards. LogicGate says its Risk Cloud can also help find security vulnerabilities before they are exploited by malicious hackers.

The credentials “appear to have been used by an unauthorized third party to decrypt particular files stored in AWS S3 buckets in the LogicGate Risk Cloud backup environment,” the email read.

“Only data uploaded to your Risk Cloud environment on or prior to February 23, 2021, would have been included in that backup file. Further, to the extent you have stored attachments in the Risk Cloud, we did not identify decrypt events associated with such attachments,” it added.

LogicGate did not say how the AWS credentials were compromised. An email update sent by LogicGate last Friday said the company anticipates finding the root cause of the incident by this week.

But LogicGate has not made any public statement about the breach. It’s also not clear if the company contacted all of its customers or only those whose data was accessed. LogicGate counts Capco, SoFi, and Blue Cross Blue Shield of Kansas City as customers.

We sent a list of questions, including how many customers were affected and if the company has alerted U.S. state authorities as required by state data breach notification laws. When reached, LogicGate chief executive Matt Kunkel confirmed the breach but declined to comment citing an ongoing investigation. “We believe it’s best to communicate developments directly to our customers,” he said.

Kunkel would not say, when asked, if the attacker also exfiltrated the decrypted customer data from its servers.

Data breach notification laws vary by state, but companies that fail to report security incidents can face heavy fines. Under Europe’s GDPR rules, companies can face fines of up to 4% of their annual turnover for violations.

In December, LogicGate secured $8.75 million in fresh funding, totaling more than $40 million since it launched in 2015.

Are you a LogicGate customer? Send tips securely over Signal and WhatsApp to +1 646-755-8849. You can also send files or documents using our SecureDrop. Learn more. 

News: 5 product lessons to learn before you write a line of code

• April 13, 2021
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To uncover some basic truths about building products, we spoke to three entrepreneurs who have each built more than one company.

Before a startup can achieve product-market fit, founders must first listen to their customers, build what they require and fashion a business plan that makes the whole enterprise worthwhile. The numbers will tell the true story, but when it happens, you’ll feel it in your bones because sales will be good, customers will happy and revenue will growing.

Reaching that tipping point can be a slog, especially for first-time founders. To uncover some basic truths about building products, we spoke to three entrepreneurs who have each built more than one company:

• Pouyan Salehi, CEO and co-founder, Scratchpad
• Rami Essaid, CEO and founder,  Finmark
• Melonee Wise, CEO and co-founder, Fetch Robotics

Find out what your customers want — and build it

First-time founders often try to build the product they think the market wants. That’s what Scratchpad co-founder Salehi did when he founded his previous startup PersistIQ. Before launching his latest venture, he took a different approach: Instead of plowing ahead with a product and adjusting after he got in front of customers, he decided to step back and figure out what his customers needed first.

“Tactically what we did differently at Scratchpad is we tried to be much more deliberate up front. And what that looked like was [ … ] to not start with building, even though the product is such an important part, but really step back and understand what we are doing here in the first place,” he said.

News: CMU teaches its snake robot to swim

• April 13, 2021
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The snake robot has been something of an institution in the Carnegie Mellon robotics labs. Every time I visit the school, the biomimetic robot has seemingly learned a new trick. This week, the school announced it has added swimming to the list. Testing actually began last month in one of CMU’s pools, with the snake

The snake robot has been something of an institution in the Carnegie Mellon robotics labs. Every time I visit the school, the biomimetic robot has seemingly learned a new trick. This week, the school announced it has added swimming to the list.

Testing actually began last month in one of CMU’s pools, with the snake robot outfitted with new housing designed for underwater navigation. Work on the project began last July. “I’m surprised that we made this robot work as fast as we did,” professor Howie Choset said in a release tied to the announcement. “The secret is the modularity and the people working on this technology at CMU.”

The Hardened Underwater Modular Robot Snake (HUMRS) was developed with a grant from the Advanced Robotics for Manufacturing (ARM) Institute.

In its terrestrial version, the snake robot is notable for its ability to squeeze into tight spaces like pipes, which might otherwise be inaccessible for other more standard robotic form factors. Underwater, it serves a similar function. The project finds the team eyeing Defense Department usage — specifically the ability to inspect submarines, ships and other watercraft to detect damage.

Other nonmilitary applications include inspections for rigs and tanks, along with underwater pipes.

News: Facebook tests video speed dating events with ‘Sparked’

• April 13, 2021
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Facebook confirmed it’s testing a video speed-dating app called Sparked, after the app’s website was spotted by The Verge. Unlike dating app giants such as Tinder, Sparked users don’t swipe on people they like or direct message others. Instead, they cycle through a series of short video dates during an event to make connections with

Facebook confirmed it’s testing a video speed-dating app called Sparked, after the app’s website was spotted by The Verge. Unlike dating app giants such as Tinder, Sparked users don’t swipe on people they like or direct message others. Instead, they cycle through a series of short video dates during an event to make connections with others. The product itself is being developed by Facebook’s internal R&D group, the NPE Team, but had not been officially announced.

“Sparked is an early experiment by New Product Experimentation,” a spokesperson for Facebook’s NPE Team confirmed to TechCrunch. “We’re exploring how video-first speed dating can help people find love online.”

They also characterized the app as undergoing a “small, external beta test” designed to generate insights about how video dating could work, in order to improve people’s experiences with Facebook products. The app is not currently live on app stores, only the web.

Sparked is, however, preparing to test the experience at a Chicago Date Night event on Wednesday, The Verge’s report noted.

Image Credits: Facebook

During the sign-up process, Sparked tells users to “be kind,” “keep this a safe space,” and “show up.” A walkthrough of how the app also works explains that participants will meet face to face during a series of 4-minute video dates, which they can then follow up with a 10-minute date if all goes well. They can additionally choose to exchange contact info, like phone numbers, emails, or Instagram handles.

Facebook, of course, already offers a dating app product, Facebook Dating.

That experience, which takes place inside Facebook itself, first launched in 2018 outside the U.S., and then arrived in the U.S. the following year. In the early days of the pandemic, Facebook announced it would roll out a sort of virtual dating experience that leveraged Messenger for video chats — a move came at a time when many other dating apps in the market also turned to video to serve users under lockdowns. These video experiences could potentially compete with Sparked, unless the new product’s goal is to become another option inside Facebook Dating itself.

Image Credits: Facebook

Despite the potential reach, Facebook’s success in the dating market is not guaranteed, some analysts have warned. People don’t think of Facebook as a place to go meet partners, and the dating product today is still separated from the main Facebook app for privacy purposes. That means it can’t fully leverage Facebook’s network effects to gain traction, as users in this case may not want their friends and family to know about their dating plans.

Facebook’s competition in dating is fierce, too. Even the pandemic didn’t slow down the dating app giants, like Match Group or newly IPO’d Bumble. Tinder’s direct revenues increased 18% year-over-year to $1.4 billion in 2020, Match Group reported, for instance. Direct revenues from the company’s non-Tinder brands collectively increased 16%. And Bumble topped its revenue estimates in its first quarter as a public company, pulling in $165.6 million in the fourth quarter.

Image Credits: Facebook

Facebook, on the other hand, has remained fairly quiet about its dating efforts. Though the company cited over 1.5 billion matches in the 20 countries it’s live, a “match” doesn’t indicate a successful pairing — in fact, that sort of result may not be measured. But it’s early days for the product, which only rolled out to European markets this past fall.

The NPE Team’s experiment in speed dating could ultimately help to inform Facebook of what sort of new experiences a dating app user may want to use, and how.

The company didn’t say if or when Sparked would roll out more broadly.

News: What’s fueling hydrogen tech?

• April 13, 2021
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Hydrogen is capturing the attention of governments and private sector players, fueled by new tech, global green energy legislation, and post-pandemic “green recovery” schemes.

Hydrogen — the magical gas that Jules Verne predicted in 1874 would one day be used as fuel — has long struggled to get the attention it deserves. Discovered 400 years ago, its trajectory has seen it mostly mired in obscurity, punctuated by a few explosive moments, but never really fulfilling its potential.

Now in 2021, the world may be ready for hydrogen.

This gas is capturing the attention of governments and private sector players, fueled by new tech, global green energy legislation, post-pandemic “green recovery” schemes and the growing consensus that action must be taken to combat climate change.

Joan Ogden, professor emeritus at UC Davis, started researching hydrogen in 1985 — at the time considered “pretty fringy, crazy stuff”. She’s seen industries and governments inquisitively poke at hydrogen over the years, then move on. This new, more intense focus feels different, she said.

The funding activity in France is one illustration of what is happening throughout Europe and beyond. “Back in 2018, the hydrogen strategy in France was €100 million — a joke,” Sabrine Skiker, the EU policy manager for land transport at Hydrogen Europe, said in an interview with TechCrunch. “I mean, a joke compared to what we have now. Now we have a strategy that foresees €7.2 billion.”

The European Clean Hydrogen Alliance forecasts public and private sectors will invest €430 billion in hydrogen in the continent by 2030 in a massive push to meet emissions targets. Globally, the hydrogen generation industry is expected to grow to $201 billion by 2025 from $130 billion in 2020 at a CAGR of 9.2%, according to research from Markets and Markets published this year. This growth is expected to lead to advancements across multiple sectors including transportation, petroleum refining, steel manufacturing and fertilizer production. There are 228 large-scale hydrogen projects in various stages of development today — mostly in Europe, Asia and Australia.

Hydrogen breakdown

When the word “hydrogen” is uttered today, the average non-insider’s mind likely gravitates toward transportation — cars, buses, maybe trains or 18-wheelers, all powered by the gas.

But hydrogen is and does a lot of things, and a better understanding of its other roles — and challenges within those roles — is necessary to its success in transportation.

Hydrogen is already being heavily used in petroleum refineries and by manufacturers of steel, chemicals, ammonia fertilizers and biofuels. It’s also blended into natural gas for delivery through pipelines.

Hydrogen is not an energy source, but an energy carrier — one with exceptional long-duration energy storage capabilities, which makes it a complement to weather-dependent energies like solar and wind. Storage is critical to the growth of renewable energy, and greater use of hydrogen in renewable energy storage can drive the cost of both down.

However, 95% of hydrogen produced is derived from fossil fuels — mostly through a process called steam methane reforming (SMR). Little of it is produced via electrolysis, which uses electricity to split hydrogen and oxygen. Even less is created from renewable energy. Thus, not all hydrogen is created equal. Grey hydrogen is made from fossil fuels with emissions, and blue hydrogen is made from non-renewable sources whose carbon emissions are captured and sequestered or transformed. Green hydrogen is made from renewable energy. 

Where the action is

The global fuel cell vehicle market is hit or miss. There are about 10,000 FCVs in the U.S., with most of them in California — and sales are stalling. Only 937 FCVs were sold in the entire country in 2020, less than half the number sold in 2019. California has 44 hydrogen refueling stations and about as many in the works, but a lack of refueling infrastructure outside of the state isn’t helping American adoption.

News: Startup Alley at TechCrunch Disrupt 2021 is filling up fast. Apply today.

• April 13, 2021
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Startup Alley — the very name conjures up images of early-stage startups demonstrating game-changing products, platforms and services to thousands of Disrupt attendees and industry influencers. It’s where you’ll find envelope pushing and boundary breaking going down. If you’re busy shoving envelopes and busting down boundaries, don’t miss your chance to exhibit in Startup Alley

Startup Alley — the very name conjures up images of early-stage startups demonstrating game-changing products, platforms and services to thousands of Disrupt attendees and industry influencers. It’s where you’ll find envelope pushing and boundary breaking going down.

If you’re busy shoving envelopes and busting down boundaries, don’t miss your chance to exhibit in Startup Alley at TechCrunch Disrupt 2021 in September. But here’s the thing. We’re limiting the number of exhibitors this year, and Startup Alley spots are filling up fast.

Apply for Startup Alley now to secure your place. Budget-friendly tip: Grab your Startup Alley Pass for just $199 — but that deal expires on May 13 at 11:59 p.m. (PDT).

Startup Alley will still have plenty of amazing companies. But we want to showcase the very best and give those exhibiting companies the focused exposure they so richly deserve.

What can you expect when you exhibit in Startup Alley this year? For starters, high visibility. Every exhibiting startup gets two minutes to pitch to a global audience during featured breakout feedback sessions. Disrupt attendees include all kinds of influencers — investors, tech icons, the media — and potential customers.

You’ll receive two lists that define opportunity — press and investors. Pitch your story to members of the press and increase your brand exposure. Schedule meetings with investors to explore funding options or to get feedback on your startup.

“Disrupt is a great avenue to network with potential investors. It carries a lot of street cred and talking about our CEO’s experience pitching in Startup Alley helps us make those connections and start important conversations.” — Jessica McLean, Director of Marketing and Communications, Infinite-Compute.

You’ll also have a shot to be featured in one of the many Startup Alley Crawls. Every tech category will have its own 1-hour crawl. The TechCrunch team will interview a select number of exhibiting founders within each category live from the Disrupt stage.

You just might be one of only two exhibiting startups chosen as a Startup Battlefield Wild Card select. The TechCrunch editorial team makes that call, and the anointed ones will participate in the legendary Startup Battlefield pitch competition for a chance to win the $100,000 prize. Win or lose, Startup Battlefield is a solid launchpad.

And here’s a big reason not only to exhibit, but to get your Startup Alley pass ASAP. TechCrunch will choose 50 exhibiting startups to participate in Startup Alley+. That cohort will see benefits kick in at TC Early Stage in July — before Disrupt even begins. We’re talking founder masterclasses, pitch-offs at Extra Crunch Live and very warm introductions to top, relevant investors.

TechCrunch Disrupt 2021 takes place on September 21-23. Push those envelopes, break those boundaries and don’t miss your chance to exhibit in Startup Alley. Don’t forget: tickets are limited this year and the early bird price ends on May 13 at 11:59 p.m. (PDT).

Is your company interested in sponsoring or exhibiting at Disrupt 2021? Contact our sponsorship sales team by filling out this form.

News: 5 questions about Grab’s epic SPAC investor deck

• April 13, 2021
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Grab is going public via a SPAC, so let’s talk through key points from the investor deck — we’ll discuss growth, segment profitability, aggregate costs and COVID-19.

As expected, Southeast Asian super-app Grab is going public via a SPAC, or blank check company.

The combination, which TechCrunch discussed over the weekend, will value Grab on an equity basis at $39.6 billion and will provide around $4.5 billion in cash, $4.0 billion of which will come in the form of a private investment in public equity, or PIPE. Altimeter Capital is putting up $750 million in the PIPE — fitting, as Grab is merging with one of Alitmeter’s SPACs.

Grab, which provides ride-hailing, payments and food delivery, will trade under the ticker symbol “GRAB” on Nasdaq when the deal closes. The announcement comes a day after Uber told its investors it was seeing recovery in certain transactions, including ride-hailing and delivery.

Uber also told the investing public that it’s still on track to reach adjusted EBITDA profitability in Q4 2021. The American ride-hailing giant did a surprising amount of work clearing brush for the Grab deal. Extra Crunch examined Uber’s ramp towards profitability yesterday.

This morning, let’s talk through several key points from Grab’s SPAC investor deck. We’ll discuss growth, segment profitability, aggregate costs and COVID-19, among other factors. You can read along in the presentation here.

How harshly did COVID-19 impact the business?

The impact on Grab’s operations from COVID-19 resembles what happened to Uber in that the company’s deliveries business had a stellar 2020, while its ride-hailing business did not.

From a high level, Grab’s gross merchandise volume (GMV) was essentially flat from 2019 to 2020, rising from $12.2 billion to $12.5 billion. However, the company did manage to greatly boost its adjusted net revenue over the same period, which rose from $1.0 billion to $1.6 billion.

News: Clubhouse rolls out payments to over 60K creators following initial test

• April 13, 2021
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Clubhouse is rapidly expanding access to payments, its first revenue-generating feature for creators, since its launch into testing earlier this month. At the beginning of April, Clubhouse said it would give a “small test group” of creators the ability to accept payments from their fans and supporters through the social audio app. These donations go

Clubhouse is rapidly expanding access to payments, its first revenue-generating feature for creators, since its launch into testing earlier this month. At the beginning of April, Clubhouse said it would give a “small test group” of creators the ability to accept payments from their fans and supporters through the social audio app. These donations go 100% to the creators, Clubhouse noted at the time. Though tests began with just 1,000 users, Clubhouse this weekend rolled out payments to another 60,000-plus users in the U.S., the company said during its Town Hall weekly event. And it expects to have payments roll out to everyone over the next few weeks.

That’s a fast pace of development for an app that’s now being challenged on all sides from companies including Twitter, Facebook, Spotify, Reddit, Discord and even LinkedIn. By making payments more quickly available, Clubhouse could potentially better retain its top creators who could otherwise be influenced to jump ship for a rival app with a broader reach.

During Clubhouse’s Town Hall event, co-founder Paul Davison noted that another 66,000 creators gained the ability receive payments this weekend, following the launch of the original test. To send a payment, users can visit a creator’s profile, then tap on the button at the bottom that says “Send Money.” This will launch a screen that suggests amounts like $5, $10, or $20, or you can fill in your own amount. The feature is being powered by Stripe and currently requires a debit or credit card to work.

Image Credits: Clubhouse screenshot

Davison again noted that creators will receive the full amount users send, while the fees paid on transactions will go to its partner Stripe to cover the payment processing fees. He added, too, that users should not send Clubhouse team members like himself payments, even though their profiles include the feature. Though he didn’t say why — only noting that all such donations would be given to charity — the reason has to do with how in-app purchases work on the App Store.

Apple a couple of years ago carved out an exception to its rules around commissions on in-app purchases in those cases where the business wasn’t profiting in any way from the donations or tips being sent to creators using the app. That’s why Clubhouse has stressed that it doesn’t take a cut of creator revenue at this time and why it’s emphasizing that it doesn’t keep any donations sent its way, either.

The company also cleared up some rumors around who would first gain access to payments, noting that users didn’t have a start a “club” on Clubhouse in order to be considered. Instead, Davison said the app was prioritizing those users who had been recently active and who didn’t have any violations. But otherwise, the initial testers have been a largely random sampling.

In-app payments are only one of the avenues Clubhouse plans to explore to generate revenue both for creators, and longer-term, for itself. The company is also considering features like subscriptions for creators and clubs, ticketed events, and brand deals.

Clubhouse also offered an update on its plans for Creator First program. The company last month announced the program, which will help creators get their first shows off the ground with Clubhouse’s help. Selected creators will receive equipment, promotional and marketing support, help with booking guests, and even income.

To date, Clubhouse has fielded over 5,000 submissions from interested users. To narrow down the field, the company said it will host a “pilot season” of sorts beginning April 23, where 60 yet-to-be-announced creators will debut shows at a pace of one episode over a three-week period. The Creator First program participants will then be selected based on feedback from a panel of judges and the Clubhouse community. Those initial 60 finalists will be announced April 23, the company said.