Monthly Archives: April 2021

News: Where StockX fits in the business of sneakers

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E-commerce startups and tech companies have sprouted up to target this connected cultural consumer, and StockX has had to run quickly to maintain its product and marketplace lead.

Before StockX, sneaker buyers had eBay, campouts at sneaker stores and internet forums as avenues to connect with other enthusiasts and find the most desired shoes. Five years later, the data-based secondary marketplace’s impact is pervasive across tech, secondary marketplaces, the business of sneakers, entrepreneurship, hype culture or even just retail stores as a whole.

The company’s timing was keen, riding the wave of Instagram’s rise while bringing a marketplace mechanism to the surging popularity of this category. Yet, StockX is not alone in targeting this increasingly lucrative sector. E-commerce startups and tech companies have sprouted up to target this connected cultural consumer, and StockX has had to run quickly to maintain its product and marketplace lead. Meanwhile, external changes can have large effects on the prices of sneakers and Gen Z is increasingly determining the future of this market. It’s a fast-moving business, and how StockX leads and competes is critical to understanding its future.

Sneaker culture filtered by Instagram

While sneaker culture had long been vibrant, Instagram and social media allowed worldwide access to subcultures like sneakers and streetwear and ushered them into the mainstream. Sneaker conversations and communities that were once hosted in online forums like NikeTalk, Reddit and Kicks On Fire’s Twitter feed began to spill over onto Instagram around 2013 as the platform grew.

“A scroll through Instagram in the morning — depending on what the algorithm gives you and who you’re following — without reading a single word can give you a peek into what’s happening, and in this case, it’s what’s happening within the global sneaker community, which Instagram not only brought together, [but] in a sense, created,” sneaker journalist Russ Bengtson mused.

He goes on to say how it amplified the community around sneaker stores as well. “Before Instagram, maybe you only heard someone with a job there or of someone who actually had a pair of the shoes, but now, without ever going into the city where the shop is based, you can see what that shop has on its shelves, you can see the outside of the shop, you can actually talk to the people who run it or the people who design things for it. You can be a more integrated part of that community without leaving your house.”

Instagram brought sneaker culture to the masses, and so timing was on StockX’s side for its 2015 launch, specifically with their focus on hype footwear just as it catapulted into the mainstream. The company offered the easiest entry point for outsiders to purchase with its bid/ask format, its one-click buying and selling as well as its authentication procedures. With each purchase, outsiders who knew little about the sneaker market became that much closer to belonging to a culture that had previously set such high barriers to entry.

StockX is to hype trends as Instagram is to popularity. The “best” product doesn’t necessarily reflect the highest price point. Instead, it’s representative of the most demand by the masses, and the platform offers data on how the hype translates into dollars.

“Instagram, and other platforms, have been key to the demand side of the equation being able to highlight items that represent brand heat and influence in the industry. We are a perfect reflection as a platform of what’s happening in current culture,” StockX CEO Scott Cutler says.

Where StockX fits in the business of sneakers

That combination of popularity and hype trends has created a massive economy. In 2014, co-founder and former CEO of StockX Josh Luber said eBay’s sneaker business totaled $338 million, which was 31% higher than 2013. By spring of 2015, the secondary sneaker market was reportedly estimated to be worth $1 billion. In total, the U.S. athletic footwear industry was worth $17.2 billion and $17.5 billion in 2015 and 2016, respectively, and by 2017, it grew to $19.6 billion. There’s no doubt the sneaker community was spending the money in a market with a lot of risk, rapid growth and very few safeguards or price regulations.

With so much money at stake, it’s not surprising that a bevy of companies have targeted the category. Perhaps no marketplace has had the longevity of eBay, which has always been a marketplace for everyone and everything, with sneakers making up only a fraction of its transactions. Education is key and barriers to entry for the platform are high though: Sellers need to build a positive reputation, and in order to shop for sneakers, buyers need to be sufficiently up to speed on what to look for in terms of fakes, scams and pricing.

News: The consequences of scaling up sneaker culture

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While StockX’s idea of access does circumvent gatekeeping and the backdoor deals of the past to an extent, it has come at the cost of having access taken from vibrant regions, brick-and-mortar stores and small businesses to those with more capital.

StockX’s mission is “to provide access to the world’s most coveted items in the smartest way possible.” It says it right on the website, and it’s incontestable that the infinite data StockX makes transparent to anyone for free allows for smart participation in the business of sneakers.

But, smartest participation by whom?

We often see “access” leveraged as marketing jargon, or the concept of democratization applied to opening up once exclusive spaces, which have often excluded marginalized communities. It’s become trendy to advertise the concepts of representation and inclusivity without actually doing the work internally: Adidas’ campaign imagery featuring a diverse set of models was released at the same time the company was under fire for overt racism and discriminatory hiring practices.

“Smartest” could be exchanged for “simplest” or at least used in tandem for a more accurate description. There’s no need to be educated on the shoes’ functionality, what replicas may look like, or even the story behind them or their history of releases and rereleases. StockX’s data offers education on the market. Access is granted to any person to easily make a financially smart purchase as long as they have an internet connection and the funds.

While StockX’s idea of access does circumvent gatekeeping and the backdoor deals of the past to an extent, it has come at the cost of having access taken from vibrant regions, brick-and-mortar stores and small businesses to those with more capital. In short, the access afforded to the most coveted items is a premium pass rather than democratization.

Users’ love/hate relationship with StockX

Andrew Zachary decided to sell off his sneaker collection around 2011 while he was in college. At the time, eBay was the best option, and he had to do quite a bit of legwork to price his pairs without any centralized data on the secondary sneaker market.

“I would have to go research the shoe on eBay to see how much people wanted for it and see what the shoe sold for by going through all of the closed auctions, and that’s how I generated the price. StockX definitely makes it a lot easier.”

The now 27-year-old, Chicago-based reseller still primarily operates on eBay because of the years he put into building his seller reputation on the platform. “If I’m looking to sell something on eBay, I go over to StockX, check the market price and list mine within that range.”

Although he never buys on StockX — he doesn’t want to pay retail nor depend on the company’s authentication services — Zachary recognizes the value the platform offers him. “Before [StockX], sneaker reselling was really like the Wild West. People would charge whatever they want and there was no reference point.” Looking back, he says, “If I was negotiating with someone and looking to buy a pair of shoes that they wanted $450 for, back in the day I couldn’t go to StockX and say, ‘Well, they have it for $350.’”

On the other hand, he has used StockX to sell on occasion. When he wants to offload a pair of shoes quickly, StockX’s model of users listing their bids (buyers) and their asks (sellers) enables speed. The buyers are essentially there waiting to be chosen. “It’s one click and right out the door.”

Despite recognizing the obvious opportunities the growth of the business of sneakers has afforded him, Zachary, like many other enthusiasts who have been into sneakers well before StockX, expressed the negative implications of its dominance in the market. “Because StockX made it so easy to resell shoes, anyone can do it. You don’t have to have any interest in sneakers. You can look up that shoe on StockX, see its resale value [and] go after that shoe on release day. You could have no idea what it really is or anything about it,” he laments.

The option to buy or sell in one click plus the combination of authentication, real-time pricing, data transparency as well as transaction anonymity affords a low-risk, easy entry point into the secondary sneaker market that did not exist pre-StockX. Yet, popularizing the sneaker space and enabling little to no effort for access also dilutes the culture of sneakers.

Sneaker culture, gentrified

In 2019, Business Insider profiled a 15-year-old who financed his sneaker-selling business with the money he made doing yard work. He’s since quit playing sports to focus on school and building his business. He raked in six figures last year.

In the story, he said, “Everyone wants shoes, and there’s always someone who will spend an absurd amount, so it’s just about getting those pairs and building the right connections and understanding the market.” He plans on netting enough savings to eventually transfer his network and financial skills to real estate.

Such seemingly feel-good tales of young entrepreneurship — the new paper route, if you will — are rife and have also fueled scandal in the industry. Nineteen-year-old Joe Hebert built a $200,000-monthly-revenue sneaker-reselling business, even hitting sales of $600,000 in May of 2020, as described in a profile by Bloomberg Businessweek. All of the math in the Bloomberg story was impressive until it was revealed Hebert was leveraging access to discounted shoes via his mother Ann Hebert, who had a 25-year tenure with Nike and was most recently vice president and general manager of Nike North America. Industry critics also questioned whether her senior position offered her son easier access to limited-edition products, and her Nike affiliation went largely without consequence until the story was published. She stepped down from her position in the resulting furor.

News: Ribbit Capital leads $26.7M round for Brazilian fintech Cora

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Cora, a São Paulo-based technology-enabled lender to small-and-medium-sized businesses, has raised $26.7 million in a Series A round led by Silicon Valley VC firm Ribbit Capital. Kaszek Ventures, QED Investors and Greenoaks Capital also participated in the financing, which brings the startup’s total raised to $36.7 million since its 2019 inception. Kaszek led Cora’s $10

Cora, a São Paulo-based technology-enabled lender to small-and-medium-sized businesses, has raised $26.7 million in a Series A round led by Silicon Valley VC firm Ribbit Capital.

Kaszek Ventures, QED Investors and Greenoaks Capital also participated in the financing, which brings the startup’s total raised to $36.7 million since its 2019 inception. Kaszek led Cora’s $10 million seed round (believed at that time to be one of the largest seed investments in LatAm) in December 2019 with Ribbit then following.

Last year, Cora got its license approved from the Central Bank of Brazil, making it a 403 bank. The fintech then launched its product in October 2020 and has since grown to have about 60,000 customers and 110 employees.

Cora offers a variety of solutions, ranging from a digital checking account, Visa debit card and management tools such as an invoice manager and cashflow dashboard. With the checking account, customers have the ability to sending and receive money as well as pay bills digitally.

This isn’t the first venture for Cora co-founders Igor Senra and Leo Mendes. The paid had worked together before — founding their first online payments company, MOIP, in 2005. That company sold to Germany’s WireCard in 2016 (with a 3 million customer base) and after three years the founders were able to strike out again.

With Cora, the pair’s long-term goals is to “provide everything that a SMB will need in a bank.”

Looking ahead, the pair has the ambitious goal of being “the fastest growing neobank focused on SMBs in the world.” It plans to use the new capital to add new features and improve existing ones; on operations and launching a portfolio of credit products.

In particular, Cora wants to go even deeper in certain segments such as B2B professional services such as law and accounting firms; real estate brokerage and education.

Ribbit Capital Partner Nikolay Kostov believes that Cora has embarked on “an ambitious mission” to change how small businesses in Brazil are able to access and experience banking.

“While the consumer banking experience has undergone a massive transformation thanks to new digital experiences over the last decade, this is, sadly, still not the case on the small business side,” he said.

For example, Kostov points out, opening a traditional small business bank account in Brazil takes weeks, “reels of paper, and often comes with low limits, poor service, and antiquated digital interfaces.”

Meanwhile, the number of new small businesses in the country continues to grow.

“The combination of these factors makes Brazil an especially attractive market for Cora to launch in and disrupt,” Kostov told TechCrunch. “The Cora founding team is uniquely qualified and deeply attuned to the challenges of small businesses in the country, having spent their entire careers building digital products to serve their needs.”

Since Ribbit’s start in 2012, he added, LatAm has been a core focus geography for the firm “given the magnitude of challenges, and opportunities, in the region to reinvent financial services and serve customers better.”

Ribbit has invested in 15 companies in the region and continues to look for more to back.

“We fully expect that several fintech companies born in the region will become global champions that serve to inspire other entrepreneurs across the globe,” Kostov said.

News: The Station: Argo AI plots its fundraising course and Waymo changes leadership

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The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every weekend in your inbox. Hi there, new and returning readers. This is The Station, a weekly newsletter dedicated to all the ways people and packages move (today and in the future) from

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every weekend in your inbox.

Hi there, new and returning readers. This is The Station, a weekly newsletter dedicated to all the ways people and packages move (today and in the future) from Point A to Point B.

There is a lot to get to, so let’s dive right in.

My email inbox is always open. Email me at kirsten.korosec@techcrunch.com to share thoughts, criticisms, offer up opinions or tips. You can also send a direct message to me at Twitter — @kirstenkorosec.

Micromobbin’

Rebecca Bellan is back with some micromobbin’ insights. Let’s dig in and take a look at this roundup of news.

It was a buzzy week for ebikes news, another indication that there is still demand — or at least the perception of demand — for this form of mobility.

Take Gocycle as just one example. The UK-based company released its fourth generation of folding electric bikes, which are claimed to be lighter and more powerful. The new line is made of three models — the G4 ($3,999), G4i ($4,999) and G4i+ ($5,999) — and they all have 20-inch wheels, a sealed chain drive with a 3-speed rear hub transmission, hydraulic disc brakes, a polymer reach shock and a 500-watt front motor. This is all to say, this bike can rip.

Ebike sharing also continues to be a busy market with startups making plans and governments making orders.

Smoove, a French mobility startup. is partnering with Zoov, another mobility startup that focuses on IoT and self-diagnosis features, to try to become leaders in the European e-bike sharing market. Smoove is already well-placed in major cities like Paris, Vancouver, Lima and Moscow, and now will be joining forces with Zoov’s high quality tech and compact docking stations.

China-based EZGO announced an order of e-bikes to the Ukraine worth 1 million RMB, or about $150,000. Ukraine is also purchasing EZGO’s “Dilang” brand of e-modes, as well as some electric tricycles. The company hopes to begin distribution within the next couple of weeks.

Meanwhile, in the land of policy …

A council committee has delayed votes to make changes to e-scooter and e-bike sharing schemes in Denver.

The deal they’re working out involves allowing the two micromobility companies to get free access to operating on the city’s streets. Usually, these companies would pay the city for the right to operate, but if the Denver City Council approves their licenses, Lyft and Lime will just be making profits. The upside is that it (hopefully) gets more people out of cars and into more sustainable modes of transport. This deal also doesn’t require Denverites to contribute to funding, unlike the deal Denver had with B-cycle, the city’s original bike share nonprofit.

 — Rebecca Bellan 

Deal of the week

Lilium became the latest electric vertical take-off and landing aircraft startup to seek capital by going public via a reverse merger with a “blank check” company. In this deal, Lilium announced a merger with special purpose acquisition company Qell Acquisition Corp, in a deal valuing the combined business at $3.3 billion.

(Side note: Qell Acquisition Corp. is a SPAC led by Barry Engle, a former president of General Motors North America.) Once the merger is complete, Lilium will trade on the Nasdaq exchange under the ticker symbol LILM.

The German-based startup designs and builds eVTOLs and has aspirations to launch commercial air taxi operations in 2024. Lilium plans to launch an air taxi network in Florida with up to 14 vertiport development sites, which the company says will be built and operated by its infrastructure partners.

Other deals that got my attention …

Cazoo, the UK-based used car sales platform, announced it too will merge with a special purpose acquisition company in a deal that values it at an eye-popping $7 billion. Bloomberg reported.

Chargerhelp!, an on-demand EV charger repair startup, has raised $2.75 million from investors Trucks VC, Kapor Capital, JFF, Energy Impact Partners and The Fund. This round values the startup, which was founded in January 2020, at $11 million post-money. The startup is interesting to me because as far as my research has shown there isn’t a lot of competition; and there should be. They also have a progressive (dare I suggest sustainable approach) to hiring.

Glovo, a startup out of Spain with 10 million users that delivers restaurant takeout, groceries and other items in partnership with brick-and-mortar businesses, raised $528 million in a Series F round. The round is significant not just because of its size, but because of its proximity to Deliveroo’s raising more than $2 billion ahead of its debut on the London Stock Exchange this week.

To offset the thin (or even negative) margins that are typically associated with a lot of delivery startups, Glovo aims to become the market leader in the 20 markets in Europe where it is live today, in part by expanding its “q-commerce” service — the delivery of items to urban consumers in 30 minutes or less, TechCrunch’s Ingrid Lunden reported. It will be using the money to double down on that strategy, including hiring up to 200 more engineers to work in its headquarters in Barcelona, as well as hubs in Madrid and Warsaw, Poland to build out the technology to underpin it.

LGN, a UK-based startup focused on edge AI, raised $2 million in a round that included investors Trucks VC, Luminous Ventures, and Jaguar Land Rover.

The company, which was founded in 2018 by former Apple and BMW executive Daniel Warner, Oxbridge research fellow Dr Luke Robinson and Professor Vladimir Čeperić of MIT and the University of Zagreb, plans to use the funds to develop its product and hire more employees. Specifically, the company said it is working on low-latency inference technology that can process optical data on-chip orders faster than current technology allows, VentureBeat reported.

Wavesense, the Massachusetts-based startup that makes ground-penetrating radar (GPR) technology for self-driving cars, raised $15 million in a round led by Rhapsody Venture Partners and Impossible Ventures.

Takeaways from Biden’s plans

What will it take to get Americans to choose an electric vehicle for their next car and to get American supply chains up to the task of manufacturing them in-house? According to President Joe Biden’s ambitious infrastructure plan unveiled Wednesday, the answer is $174 billion.

The funds are just one part of the $2 trillion plan, which seeks to overhaul the lifelines that keep the country running, such as our transportation networks, electric grid and even broadband. In some ways, the plan is bipartisan genius: it combines Democrats’ concern over climate change with Republicans’ concern over Chinese dominance in manufacturing, and appeals to both parties in its promise to revitalize domestic jobs. But the plan still needs approval from Congress before it can move forward.

To spur Americans to buy electric, Biden has taken a two-pronged approach: make them cheaper (through tax credits and rebates) and make EV chargers more readily available (by building a staggeringly large network of 500,000 chargers by 2030). His administration hasn’t released details on the size of the incentives, so it’s unclear whether they will be larger than the $7,500 tax credit already available for EVs. It’s also unclear whether Tesla and GM will qualify, as the current credit isn’t available for manufacturers that have already sold more than 200,000 EVs.

For now, Biden’s administration is withholding a lot of details — how will his plan help automakers “spur domestic supply chains from raw materials to parts” and “retool factories to compete globally”? — so we’ll keep an eye out for these details in the future.

— Aria Alamalhodaei

Argo AI plots its fundraising course

I dared to take some time off, which is all well and good until news breaks in the world of autonomous vehicles. A report from The Information said that Argo AI CEO and co-founder Bryan Salesky told employees in an all-hands meeting that the autonomous vehicle startup was planning for a public listing later this year.

I connected with some sources – vacation be damned — and have more context to share with you. Salesky did indeed mention the prospect of an IPO during the company’s regular weekly all-hands meeting. There is a bit more to the story though. The comments were made as the CEO discussed upcoming important milestones in 2021 that will lead to an IPO or a significant raise of some kind. The upshot: apparently all fundraising options are on the table, including a merger with a special acquisition company or SPAC.

Argo, as one source told me, is intent on scaling. Raising capital is a key part of that plan. The company also plans to expand testing beyond the six cities it currently is in — including into Europe. (Remember, Volkswagen is a backer and a customer. )

All of that takes money. Argo has raised $2 billion to date. That’s no small sum and yet far below the war chests of Cruise and Waymo.

The fundraising effort has not started in earnest. There is no roadshow, according to folks familiar. The broad plan is to secure investors, which could turn into the PIPE (private investment in public equity) for a SPAC or a “fairly substantial private round,” according to one insider.

Waymo’s changing of the guard

Waymo CEO John Krafcik announced on Friday that he is stepping down from the leadership position he held for five years. The CEO position will now be held by two people: Tekedra Mawakana, who was COO and Dmitri Dolgov, who was part of the original Google self-driving project and was most recently CTO.

The idea is that the co-CEOs will take their respective expertise — business and engineering — and combine them to help Waymo scale up commercially. Co-CEO models are risky, so it will be interesting to see if the pair can work together, and importantly, get their employees to buy into the idea. Dolgov and Mawakana apparently brought the co-CEO idea to the board, one source told me. (Remember Waymo is an Alphabet company, and so its leaders ultimately answer to their parent.)

In a post on LinkedIn, Krafcik described his time at the company and hinted at a few of his plans, which for now seems to be focused on settling in Austin, Texas and regrouping with family and friends. He’s also now listed as an advisor to Waymo, a contractual position that doesn’t have a specific end date.

As you might suspect, I received lots of texts and email messages from sources within the industry wanting to weigh in or provide inside information (or speculate) why Krafcik left.

Here’s what I can tell you. Krafcik could be a polarizing figure within Waymo, particularly in the early days of his employment when it was still a “project” and had not yet become an independent company under Alphabet. That transition led to the departure of some of the Google self-driving project’s key engineers and leaders, including Chris Urmson, Bryan Salesky and Dave Ferguson, who went on to found AV startups Aurora, Argo AI and Nuro.

Krafcik’s tenure was also marked by extreme growth — in terms of number of employees — as well as an aggressive push to lock up OEM and supplier partners, the launch of a ride-hailing service in the suburbs of Phoenix, expanded testing and its first external investment round of $2.25 billion. That round was extended by another $750 million, bringing the total size of the financing to $3 billion.

Dolgov and Mawakana have some decisions to make on how they want to proceed and where to place their bets. My educated forecast? Waymo Via, the company’s autonomous delivery unit, will become a bigger priority along with a more visible push into complex urban environments like San Francisco.

Notable reads and other tidbits

Here are a few other items worth mentioning.

It’s electric

Amazon Web Services is expanding its offerings and anticipating the inevitable spike in EVs by partnering with Swiss automation company ABB. The two are working on a single-view electric fleet management platform that can work with any charging infrastructure or EV.

“Not only do fleet managers have to contend with the speed of development in charging technology, but they also need real-time vehicle and charging status information, access to charging infrastructures and information for hands-on maintenance,” Frank Muehlon, president of ABB’s e-mobility division, told TechCrunch. “This new real-time EV fleet management solution will set new standards in the world of electric mobility for global fleet operators and help them realize improved operations.”

Autonomous vehicles

Cartken, the robotics startup founded by ex-Google employees, has partnered with REEF Technology to bring self-driving delivery robots to the streets of downtown Miami. REEF,  a startup that operates parking lots and tech-focused neighborhood hubs, to develop and deploy the robots. They are now delivering dinner orders from REEF’s network of delivery-only kitchens to people located within a 3/4-mile radius of its delivery hubs.’

Geodis, the global logistics company, has tapped startup Phantom Auto to help it deploy forklifts that can be controlled remotely by human operators located hundreds, and even thousands, of miles away. The aim is to use the technology to reduce operator fatigue — and the injuries that can occur as a result — as well as reduce the number of people physically inside warehouses, according to the Geodis.

Motional, which is partnering with Lyft for ride-hailing services, revealed this week that it would be integrating its tech with the Hyundai IONIQ5. Customers in certain markets will be able to book this vehicle starting in 2023.

Optimus Ride, an autonomous electric mobility company, announced a partnership with sports car manufacturer Polaris to commercialize a new breed of Polaris GEM low-speed vehicles. The vehicles will serve as microtransit for certain academic or corporate campuses, mixed-use developments and other geofenced, localized environments. Side note: 2023 seems to be a big year for upcoming electric, autonomous vehicles.

Delivery

Zipline, the drone delivery service startup, announced a partnership with Toyota Tsusho
Corporation that will focus on bringing medical and pharmaceutical supplies to healthcare facilities in Japan. Toyota Tsusho is already an investor in Zipline and so this is a deepening of that relationship.

The partnership also marks Zipline’s entrance into Japan. The company already delivers medical supplies in Ghana and Rwanda, and also operates in the United States.

News: Spotify opens a second personalized playlist to sponsors, after ‘Discover Weekly’ in 2019

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Spotify is opening up its personalized playlist, “On Repeat,” to advertising sponsorship. This playlist, launched in 2019 and featuring users’ favorite songs, is only the second personalized playlist on the music streaming service that’s being made available for sponsorship. Spotify’s flagship playlist, “Discover Weekly,” became the first in 2019. The sponsorship is made possible through

Spotify is opening up its personalized playlist, “On Repeat,” to advertising sponsorship. This playlist, launched in 2019 and featuring users’ favorite songs, is only the second personalized playlist on the music streaming service that’s being made available for sponsorship. Spotify’s flagship playlist, “Discover Weekly,” became the first in 2019.

The sponsorship is made possible through the company’s Sponsored Playlist ad product, which gives brands the ability to market to Spotify’s free users with audio, video and display ad messages across breaks, allowing the advertiser to own the experience “end-to-end,” the company says.

It also gives brands an opportunity to reach Spotify’s most engaged users.

When Spotify opened up “Discover Weekly” to sponsorship, for example, it noted that users who listened to this playlist streamed more than double those who didn’t. Similarly, “On Repeat” caters to Spotify’s more frequent users because of its focus on tracks users have played most often.

Since the launch of “On Repeat” in September 2019, Spotify says the playlist has reached 12 billion streams globally. Fans have also spent over 750 million hours listening to the playlist, where artists like Bad Bunny, The Weeknd, and Ariana Grande have topped the list for “most repeated” listens.

Though Spotify today offers its numerous owned and operated playlists for sponsorship, its personalized playlists have largely been off-limits — except for “Discover Weekly.” These are highly-valued properties, as Spotify directs users to stream collections powered by its algorithms, which Spotify organizes in its ever-expanding “Made for You” hub in its app. Here, users can jump in between “Discover Weekly,” and other collections organized by genre, artist, decade, and more — like new releases, favorites, suggestions, and more.

With the launch of sponsorship for “On Repeat,” brands across 30 global markets, including North America, Europe, Latin America and Asia-Pacific will be able to own another of Spotify’s largest personalized properties for a time.

The first U.S. advertiser to take advantage of the sponsorship is TurboTax, which cited the personalization elements and user engagement with the playlist among the reasons why the ad product made sense for them.

“Like music, taxes are not one size fits all. Every tax situation is unique and every individual’s needs are different,” said Cathleen Ryan, VP of Marketing for TurboTax, in a statement about the launch. “We’re using Spotify’s deep connection to its engaged listeners to get in front of consumers and show them that with TurboTax you can get the expertise you need on your terms. With Spotify, we’re able to get both reach and unique targeting that ensures the right audiences know about the tools, guidance and expertise that TurboTax offers,” she added.

News: Blockchain and taking the politics out of tech

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Brian Brooks grew up on credit. And for him, that’s a good thing. Brooks is from a small town in Colorado that took a big hit when the steel factory — the main driver of its economy — shut down. A couple of years later, when Brooks was 14, his father passed away, and it

Brian Brooks grew up on credit. And for him, that’s a good thing.

Brooks is from a small town in Colorado that took a big hit when the steel factory — the main driver of its economy — shut down. A couple of years later, when Brooks was 14, his father passed away, and it became very clear to Brooks that if he wanted “any kind of life,” he’d have to hustle. He got a job and in order to go to college and then law school, he took out six figures worth of student loans at an 8% interest rate.

But instead of being bitter, Brooks is grateful that he even had that opportunity.

“Credit is what allows you to get something that you couldn’t otherwise afford to pay cash for,” he says.

Years later, Brooks would go on to serve as chief legal officer of Coinbase, a multi-billion-dollar Silicon Valley startup that has become one of the world’s largest digital currency platforms. To Brooks, blockchain and cryptocurrency hold great potential to further financial inclusion, a cause he holds close to his heart.

Then in May 2020, Brooks moved from the private sector to the public sector, when he took on the role of Acting Comptroller of the Currency of the OCC. Brooks’ tenure at the OCC was short, but eventful. He helped enact some controversial legislation around bank charters, cryptocurrency and lending. In January, he left that post with plans to return to the private sector.

In March, Brooks announced he’d be joining Spring Labs as the company’s first independent director. Brooks had come full circle with the data-sharing startup, considering he was among the group that first conceived the idea of Spring Labs five years ago.

His goal there is to bring to bear a combination of an innovation mindset coupled with a knowledge of the traditional banking system that fintechs are trying to disrupt. Having actually been responsible for running the banking system, Brooks believes he has “a good sense of what’s broken.”

“I think that there are a lot of tech companies that have really great ideas but they’re not very expert in what it is that they’re trying to fix,” he says. “And, for me, having spent so much time inside of banks and inside of the credit infrastructure, it’s pretty clear to me what it is that needs to be better. And it really is secure, anonymous data sharing.”

TechCrunch sat down with Brooks to hear more about his return to the private sector, his thoughts on why blockchain is the answer to financial inclusion and why he thinks politics need to be taken out of tech.

This interview has been edited for clarity and brevity.

TC: What does Spring Labs do exactly? 

Brooks: The purpose of Spring Labs is to use blockchain to create a much richer network effect of data that allows the credit bureaus and others to predict the creditworthiness of people who are not in the traditional credit bureau system. And that’s one of the amazing promises of blockchain, considering that all blockchain is an open source network of nodes. 

So the more data sources you can connect up to that network, the richer the environment is to allow you to assess people’s credit worthiness. The vision is that once Spring Labs is successful and has scaled this, we will no longer have to exclude 45 billion people from the credit system because we’ll have data…that allows us to predict that this person is a good credit risk and should get a credit card, regardless of whether they have a mortgage or a credit card. The core mission of the company is to bring credit to more people.

TC: When you say richer data, you mean things like paying rent on time?

Brooks: Yes, stuff like that, but also for example information about recurring bank credits and debits. Also subscription payments, recurring payments of any kind, and also asset and income information — all of which is relevant to whether you’re a good credit risk.

TC: Yes, I’ve written about a couple of other startups that have similar missions.

Brooks: Yes, but the reason I’ve spent so much time on crypto and blockchain personally over the last four or five years, is the idea that a decentralized network is always going to gather more data than a company that has focused for example on signing up all of the landlords in America to do a data sharing service where you can track rent. I mean rent is a good element, but there are hundreds of elements that can be relevant.

Do you own a car, for example? Whether it’s on credit or not is a relevant element to whether you’re likely to pay. Or whether home prices in your neighborhood are rising or falling, that’s another thing that’s relevant. So the point is to be agnostic about the kind of data but to generate a data environment that is rich enough that any given person can be assessed, even if they don’t have this or that element. There are still data elements that would predict future credit performance and it’s refining that and assembling all of that on the network that is kind of the Spring Labs secret sauce.

TC: What do you believe were some of your biggest accomplishments during your time at the OCC?

Brooks: When I was running the OCC, we enacted two regulations, one of which was called a “Valid When Made” rule and the other was called the True Lender Rule. And the purpose of those rules was to provide clarity. 

Another thing I did during my time there was to grant the first charter to a crypto company called Anchorage. We also provided guidance about what banks can permissibly do with cryptocurrencies. Which I believe had a lot to do with driving the adoption of crypto over the last 12 months.

One of the biggest problems and challenges in the world of crypto is how do you make sure that people who are transacting in crypto are not sending money to terrorists or not using crypto to engage in money laundering. And it’s a problem because the whole promise of crypto is to allow people to transact peer to peer without the need for a bank limit, right? So normally if you’re writing a check, it goes to the banking system and the bank looks to see who the payee is and figure out if they’re on some list or if you’re using cash there are these currency transaction reports you have to fill out. That’s not the case with crypto. So one of the things that Spring Labs has built — coming back to this idea of blockchain validation — is a solution that allows people, including the government, to say “I don’t know who the person is that Mary Ann is sending bitcoin to.” 

But the Spring Labs solution tells us that person isn’t a bad guy. We may not know that that person is Brian Brooks because Spring Labs anonymizes the data. But we have brought a lot of identifying information on the blockchain and can tell you that it’s safe, or it’s not safe without violating the basic principles of anonymity that normally exist on blockchain. It’s one of the reasons why having anonymized data sharing is one of the most important breakthroughs in fintech itself.

TC: How is it able to tell whether it’s safe or not?

Brooks: Blockchain identity verification is making probabilistic judgments based on a large amount of data. So, it may not know for sure that you’re not Vladimir Putin. But what it does know is that you’re a person who bought a latte at a Starbucks in Palo Alto yesterday of that you’re a person who has a Netflix subscription you’ve been paying on for 23 months And so when we make these probabilistic judgments, we can reduce to a statistical low rate the likelihood that you’re engaged in some kind of malfeasance. It turns out that’s actually much more likely to be accurate than if we’re pinging a government list to see if you’re on it, because government lists have typos and misspellings and at times, the last name is the first and the first name is the last. So there are all kinds of errors in that. 

TC: A founder I spoke to recently said that this younger generation has a distrust of the banking system and that’s why they’re so open to all these new digital offerings and neobanks. What are your thoughts on this perceived distrust of the banking system right now by the younger generation?

Brooks: I think there are plenty of people in the older generation who have also had trust issues with banking. Anybody who went through the financial crisis probably has a feeling about that. I would say that the banking system as a system is strong and deserves people’s trust. And what I mean by that is you have the agency I used to lead and other agencies who you know have thousands of seasoned professionals who are examining these banks for safety and soundness and compliance, every day. Where they find mistakes and malfeasance, they address it in real time. So I have a lot of confidence in that. 

The problem is though, there are things about just the nature of finance — the idea that somebody is charging you a significant interest rate to borrow money for a period of time because you had a ding on your credit, say five years ago. Those are things that are inherent in the credit management and business of banking, and that’s the thing that makes a lot of people — especially young kids — feel excluded. 

So imagine, for example, if you’re a young kid who just graduated college last year in the pandemic. And you can’t find a job and you don’t have the traditional indicators of creditworthiness, so it’s hard for you to buy a car or get a credit card. Now you feel like the whole banking system exists to exclude you in some way. So that sort of sucks, except it turns out that there are peer-to-peer lending platforms, decentralized finance platforms and other things that will allow you to access credit. So that’s a reason I think why young people are looking to these fintechs — because the fintechs exist to fill the gaps that are left behind by traditional banking.

The banks are trustworthy, but the banks are trying to serve sort of like the middle 60% of society. But if you’re young, lower income, or a minority or an immigrant or whatever…there’s a big gap in the banking sector which we’re always trying to improve. So at some level the banking sector is about serving the middle part of the country, and fintechs are harnessing market incentives to build products for those people that have been excluded. 

That’s why I don’t understand why fintech has become so politicized. There seems to be a war on fintech and I don’t understand where it’s coming from. And it seems to be kind of like a bipartisan war. If you go back and look at the letter that Maxine Waters, the House Financial Services Committee chairman, sent to the Biden transition team back in December — among the things she wanted them to do was to roll back every single thing we did on fintech. I just asked myself, “Why?” I understand there were some things we did that were somewhat political but why is it political to say that we think Stripe should be eligible for a bank charter? What is political about that? Stripe is a company that is engaged in major financial intermediation, which is what the bank charter is all about. Why is that political? And that that extends to bank charters and the true lender rule that I talked about earlier. 

TC: Can you elaborate on how you think fintech has become politicized?

Brooks: It seems to be that people, especially Democrats, don’t like fintech. You’d argue that that’s why there’s a particular candidate for my old job, that apparently was kiboshed because he said positive things about fintech. The whole point of fintech is to serve people that aren’t well served by the banking system, right? 

For example, if Americans really think that we should ban fossil fuels, then we should ban fossil fuels. Politicians should enact that and bear the consequences if that isn’t what people want. We don’t want bank CEOs making those decisions for us as a society, in terms of who they choose to lend money to, or not. We need to take the politics out of tech. 

All of us do a lot of different things, and we have no idea on a given day, whether what we’re doing is popular with our neighbors or popular with our bank president or not. I don’t want the fact that I sometimes feel Republican to be a reason why my local bank president can deny me a mortgage.

TC: I read that you had a personal experience growing up that maybe led you to this desire to help increase financial inclusion in the country. Is that something you’re comfortable talking about?

Brooks: It’s no big secret that I grew up on credit. I grew up in a small town and I guess the way I usually put it there were sort of these two seminal tragedies in my life. I don’t want to say that my town died but when I was growing up…but I was a young kid in this lovely prosperous factory town in Colorado that was pretty and had high employment with good union jobs for steel workers. It was great. And then when I was like 11 or 12 or whatever age, the factory closed, and suddenly we went from being a lovely prosperous little town to having enormously high double digit unemployment. It was a disaster and really really sad. 

And then a couple years after that, my dad died, and so the town died and then my dad died. What I had to do pretty quickly, if I was going to have anything like a life, is I had to get a job on my 16th birthday. I also had to borrow a lot of money to go to college and law school. And as I tell everybody, I didn’t borrow it at a federally subsidized rate. Those days you couldn’t deduct your student loans on your income tax, so I had to pay 8% interest on my six figures of student loans. And thank God that was available. 

So I’m not one of these people who thinks it’s a bad thing for people to have credit. I mean, all of the studies show that more credit equals less poverty. And yet whenever I say that on Twitter or whatever, the politically minded will say “No, more credit equals more debt.” It’s like, I don’t know what that means because credit and debt are the same thing, but what I mean by it is that credit is what allows you to get something that you couldn’t otherwise afford to pay cash for — whether that’s an education or start a business, or buy a house, right?

As a guy  who benefited from all of that, I don’t take a moralistic or elitist stance that other people should be able to take a risk on themselves. I took a risk on myself at 8% interest, and it’s what allowed me to have the life that I have and I don’t think it’s up to me to tell other people that they shouldn’t be allowed to do that. So I’m a big credit evangelist. I really believe that more credit is better for society than less. And I think fintechs are likely to deliver that to people that are not well served by the banking system. I am a believer in the idea that decentralized networks take some of the discrimination out.

News: Equity Monday: Edtech consolidation, and Amazon continues to make you like it less

• April 5, 2021
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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.

This morning we took a global look at the news, trying to take in the latest from around our little planet:

• American stocks are set to rise as much of the world had the day off from trading; Indian stocks fell on the back of poor COVID-19 news.
• The biggest tech news was this bit of bad news from Facebook, if you are a fan of privacy. And the FT has data on the Chinese tech liquidity market that isn’t great news.
• Amazon is in trouble after it illegally retaliated against workers. And there’s more reporting on how low the company was willing to stoop to try and block union activity. Corporations, they’re always letting us down.
• And edtech giant Byju’s buying an IRL tutoring service for a billion dollars.
• On the funding front, Meesho is now worth $2.1 billion thanks to SoftBank Vision Fund 2, while Cresta now has $50 million more in its own coffers.
• And we wrapped with a peek at the Alkami Technology IPO, which was good fun thanks to where the company was founded.

It’s going to be a blast of a week. Talk to you Wednesday!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!

News: ConductorOne raises $5M in seed round led by Accel to automate your access requests

• April 5, 2021
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Over the course of their careers, Alex Bovee and Paul Querna realized that while the use of SaaS apps and cloud infrastructure was exploding, the process to give employees permission to use them was not keeping up. The pair led Zero Trust strategies and products at Okta, and could see the problem firsthand. For the

Over the course of their careers, Alex Bovee and Paul Querna realized that while the use of SaaS apps and cloud infrastructure was exploding, the process to give employees permission to use them was not keeping up.

The pair led Zero Trust strategies and products at Okta, and could see the problem firsthand. For the unacquainted, Zero Trust is a security concept based on the premise that organizations should not automatically trust anything inside or outside its perimeters and, instead must verify anything and everything trying to connect to its systems before granting access.

Bovee and Querna realized that while more organizations were adopting Zero Trust strategies, they were not enacting privilege controls. This was resulting in delayed employee access to apps, or to the over-permissioning employees from day one.

Last summer, Bovee left Okta to be the first virtual entrepreneur-in-residence at VC firm Accel. There, he and Accel partner Ping Li got to talking and realized they both had an interest in addressing the challenge of granting permissions to users of cloud apps quicker and more securely.

Recalls Li: “It was actually kind of fortuitous. We were looking at this problem and I was like ‘Who can we talk to about the space? And we realized we had an expert in Alex.”

At that point, Bovee told Li he was actually thinking of starting a company to solve the problem. And so he did. Months later, Querna left Okta to join him in getting the startup off the ground. And today, ConductorOne announced that it raised $5 million in seed funding in a round led by Accel, with participation from Fuel Capital, Fathom Capital and Active Capital. 

ConductorOne plans to use its new capital to build what the company describes as “the first-ever identity orchestration and automation platform.” Its goal is to give IT and identity admins the ability to automate and delegate employee access to cloud apps and infrastructure, while preserving least privilege permissions. 

“The crux of the problem is that you’ve got these identities — you’ve got employees and contractors on one side and then on the other side you’ve got all this SaaS infrastructure and they all have sort of infinite permutations of roles and permissions and what people can do within the context of those infrastructure environments,” Bovee said.

Companies of all sizes often have hundreds of apps and infrastructure providers they’re managing. It’s not unusual for an IT helpdesk queue to be more than 20% access requests, with people needing urgent access to resources like Salesforce, AWS, or GitHub, according to Bovee. Yet each request is manually reviewed to make sure people get the right level of permissions. 

“But that access is never revoked, even if it’s unused,” Bovee said. “Without a central layer to orchestrate and automate authorization, it’s impossible to handle all the permissions, entitlements, and on- and off-boarding, not to mention auditing and analytics.”

ConductorOne aims to build “the world’s best access request experience,” with automation at its core.

“Automation that solves privilege management and governance is the next major pillar of cloud identity,” Accel’s Li said.

Bovee and Querna have deep expertise in the space. Prior to Okta, Bovee led enterprise mobile security product development at Lookout. Querna was the co-founder and CTO of ScaleFT, which was acquired by Okta in 2018. He also led technology and strategy teams at Rackspace and Cloudkick, and is a vocal and active open source software advocate.   

While the company’s headquarters are in Portland, Oregon, ConductorOne is a remote-first company with 10 employees.

“We’re deep in building the product right now, and just doing a lot of customer development to understand the problems deeply,” Bovee said. “Then we’ll focus on getting early customers.”

News: India’s Swiggy nears $5 billion valuation in new $800 million fundraise

• April 5, 2021
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Swiggy has raised about $800 million in a new financing round, the Indian food delivery startup told employees on Monday, as it looks to expand its business in the country quarters after the startup cut its workforce to navigate the pandemic. In an email to employees, first reported by Times of India journalist Digbijay Mishra,

Swiggy has raised about $800 million in a new financing round, the Indian food delivery startup told employees on Monday, as it looks to expand its business in the country quarters after the startup cut its workforce to navigate the pandemic.

In an email to employees, first reported by Times of India journalist Digbijay Mishra, Swiggy co-founder and chief executive Sriharsha Majety said the startup had raised about $800 million from new investors including Falcon Edge Capital, Goldman Sachs, Think Capital, Amansa Capital, and Carmignac, and existing investors Prosus Ventures and Accel.

“This fundraise gives us a lot more firepower than the planned investments for our current business lines. Given our unfettered ambition though, we will continue to seed/experiment new offerings for the future that may be ready for investment later. We will just need to now relentlessly invent and execute over the next few years to build an enduring iconic company out of India,” wrote Majety in the email obtained by TechCrunch.

Majety didn’t disclose the new valuation of Swiggy, but said the new financing round was “heavily subscribed given the very positive investor sentiments towards Swiggy.” According to a person familiar with the matter, the new round valued Swiggy at over $4.9 billion. The startup has now raised about $2.2 billion to date.

Swiggy had raised $157 million last year at about $3.7 billion valuation. That investment is not part of the new round, a person familiar with the matter told TechCrunch.

He said the long-term goal for the startup, which competes with heavily-backed Zomato and new entrant Amazon, is to serve 500 million users in the next 10-15 years, pointing to Chinese food giant Meituan, which had 500 million transacting users last year and is valued at over $100 billion.

“We’re coming out of a very hard phase during the last year given Covid and have weathered the storm, but everything we do from here on needs to maximise the chances of our succeeding in the long-term,” wrote Majety.

Swiggy last year eliminated some jobs — so did Zomato — and scaled down its cloud kitchen efforts as it attempted to stay afloat during the pandemic, which had prompted New Delhi to enforce months-long lockdown.

Monday’s reveal comes amid Zomato raising $910 million in recent months as the Gurgaon-headquartered firm prepares for an IPO this year. The last tranche of investment valued Zomato at $5.4 billion. During its fundraise, Zomato said it was raising money partially to fight off “any mischief or price wars from our competition in various areas of our business.”

A third player, Amazon, has also entered the food delivery market in India last year, though its operations are still limited to parts of Bangalore.

At stake is India’s food delivery market, which analysts at Bernstein expect to balloon to be worth $12 billion by 2022, they wrote in a report to clients earlier this year. Zomato currently leads the market with about 50% market share, Bernstein analysts wrote.

“We find the food-tech industry in India to be well positioned to sustained growth with improving unit economics. Take-rates are one of the highest in India at 20-25% and consumer traction is increasing. Market is largely a duopoly between Zomato and Swiggy with 80%+ share,” wrote analysts at Bank of America in a recent report, reviewed by TechCrunch.

News: Chinese startups rush to bring alternative protein to people’s plates

• April 5, 2021
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In many ways, China is the ideal testbed for alternative protein. The country has a long history of imitation meat rooted in Buddhist vegetarianism and a growing, health-conscious middle class.

On a recent morning in downtown Shenzhen, Lingyu queued up to order her go-to McMuffin. As she waited in line with other commuters, the 50-year-old accountant noticed the new vegetarian options on the menu and decided to try the imitation spam and scrambled egg burger.

“I’ve never had fake meat,” she said of the burger — one of five new breakfast items that McDonald’s introduced last week in three major Chinese cities featuring luncheon meat substitutes produced by Green Monday.

Lingyu, who works in her family business in Shenzhen, is exactly the type of Chinese customer that imitation meat companies want to attract beyond the young, trendy, eco-conscious urbanites. Her yuan means potentially more to meat replacement companies because it advances their business and climate agendas both. Eating less meat is one of the simplest ways to reduce an individual’s carbon footprint and help fight climate change.

McDonald’s hopes that its pea- and soy-based, zero-cholesterol, luncheon meat substitutes will carve out a piece of China’s massive dining market. Long-time rival KFC, and local competitor Dicos introduced their own plant-based products last year. Partnering with fast food chains is a smart move for companies that want to promote alternative protein to the masses, because these products are often pricey and are usually aimed at wealthy urbanites.

2020 could well have been the dawn of alternative protein in China. More than 10 startups raised capital to make plant-based protein for a country with increasing meat demand. Of these, Starfield, Hey Maet, Vesta and Haofood have been around for about a year; ZhenMeat was founded three years ago; and the aforementioned Green Monday is a nine-year-old Hong Kong firm pushing into mainland China. The competition intensified further last year when American incumbents Beyond Meat and Eat Just entered China.

Although some investors worry the sudden boom of meat substitute startups could turn into a bubble, others believe the market is far from saturated.

“Think about how much meat China consumes a year,” said an investor in a Chinese soy protein startup who requested anonymity. “Even if alternative protein replaces 0.01% of the consumption, it could be a market worth tens of billions of dollars.”

In many ways, China is the ideal testbed for alternative protein. The country has a long history of imitation meat rooted in Buddhist vegetarianism and an expanding middle class that is increasingly health-conscious and willing to experiment. The country also has a grip on the global supply chain for plant-based protein, which could give domestic startups an edge over foreign rivals.

“I believe, in five years, China will see a raft of domestic plant-based protein companies that could be on par with industry leaders from Europe and North America,” said Xie Zihan, who founded Vesta to develop soy-based meat suitable for Chinese cuisine.

Meat varieties

Lily Chen, a manager at the Chinese arm of alternative protein investor Lever VC, outlines three categories of meat analog companies in China: Western giants such as Beyond Meat and Eat Just; local players; and conglomerates such as Unilever and Nestlé that are developing vegan meat product lines as a defense strategy. Lever VC invested in Beyond Meat, Impossible Foods and Memphis Meats.

“They all have their product differentiation, but the industry is still very early stage,” said Chen.