Daily Archives: July 26, 2021

News: I get it, Elizabeth Holmes

• July 26, 2021
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The next time someone jokes at a cocktail party about Elizabeth Holmes’ baritone voice, remind them how dumb is it that we give more money to people with deep voices.

Elizabeth Holmes’ raspy, deep voice helped her raise more than $700 million for her now-defunct company, Theranos. When I step into any boardroom for a pitch, I can hear her croaking her favorite line: “I hope that less people will have to say goodbye too soon to people that they love.”

Sitting across from a venture partner, I wonder if they might feel more compelled by my words if I cut my hair short (really short), or grew a beard, or removed my pregnant belly. Would they take out their checkbook if I were more aggressive in what I promised? Would they be more interested in getting to know my business and me better if I passionately slammed the table?

Actually, very likely.

Holmes adopted a ridiculously low voice to get her startup off the ground in a world full of men. She promised impossible pinprick tests to detect hundreds of diseases and collected influential investors like Henry Kissinger, George Shultz, James Mattis and Betsy DeVos. She wore a Steve Jobs uniform — including the Issey Miyake turtleneck — and built a team of 800 brilliant people. Did she go overboard with her lies? Yes. But she’s not the only one. The Silicon Valley and venture landscape only exacerbated whatever beliefs she already had in her company and inclinations to promise the moon.

Last week at a virtual hearing, she pushed to keep a huge database of information protected from the government. Before that, she claimed to have made $100 million in revenue in 2014, when it was really $100,000. These things, among others, are hands-down inexcusable. But I still believe that she thought she was doing the right thing taking the universal advice of Silicon Valley: “Fake it till you make it.”

She once said, borrowing from previous thought leaders: “This is what happens when you work to change things, and first they think you’re crazy, then they fight you and then all of a sudden you change the world.” I wonder if she just thinks she’s now on part two.

Raising money to start a company is about two things: having connections and making an appearance. Connections are difficult to make when you’re a woman: “Only about 12% of decision-makers at VC firms are women, and most firms still don’t have a single female partner.”

And even if you have connections, building relationships can be a bit weird: My cofounders end up being text buddies with our investors, while I hear news of things in passing. We hit a peak of 2.8% of funding going to women-led startups in 2019, but in 2020, that dropped again to 2.3%, possibly because investors reverted to their standard habits of keeping their cards close during uncertain times. Furthermore, investors generally have expectations that are aligned with male tendencies. For example, identical slides and scripts that are read by men and women are judged very differently, with men overwhelmingly rated higher. Holmes’ deep voice, although off-putting, probably made her more convincing.

It’s not easy to replicate the fundraising success that Holmes had, though. If other women tried to emulate this, they’d likely be penalized: In general, forward men are viewed positively as assertive, while forward women are viewed as emotionally unstable. This is confusing because, inversely, if women retreat to stereotypically feminine behaviors, they are viewed as weak. Hillary Clinton got stuck in this during her presidential race — criticized for being aggressive and cold when stereotypically masculine traits and pegged as weak when showing stereotypically feminine traits.

To make matters worse, it turns out that in pitches, women are asked more preventative questions about potential loss and risk, while men are asked more promotional questions about upside and gains. Women can work around this by answering any preventative question in the positive. Holmes knew this deep down and played into it. That was the only way for her to win.

I am absolutely no “holmie,” but I do understand firsthand her need to role-play. I’ve been overlooked; hell, I’ve even been told to change my product line (bras) because venture capitalists won’t get it. And they didn’t. I gave in.

I don’t want to defend her, and I can’t. It’s so easy to drop a line at a party or a board meeting about how obnoxious she was in her venture, but what irks me is that we focus on her specifically as the problem, completely bypassing the environment that created her. I remember soaking up John Carreyrou’s tantalizing book thinking, “Wow, I’ll never do that,” as I started my company. But as I have seen the pressures and the biases, I can see how the system shaped Holmes.

Why don’t we judge the biased system we created as much as we judge the person it destroyed? She sticks out like a sore thumb because, well, how many Elizabeth Holmeses are there out there? These problems are so ingrained in the system itself, though, that as David Foster Wallace alluded to in the water speech, we can’t see them and we probably aren’t ready to repair them.

The next time someone jokes at a cocktail party about Holmes’ baritone voice, just remind them how dumb is it that we give more money to people with deep voices.

Former TechCrunch COO Ned Desmond is now Senior Operating Partner at SOSV, which has invested in unspun.

News: Lucid Motors kicks off market debut with EV factory expansion plans

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The former Lucid Motors will expand its factory in Casa Grande, Arizona, by 2.7 million square feet and aims to ultimately produce 400,000 vehicles a year.

Lucid Group (formerly Lucid Motors) will be expanding its factory in Casa Grande, Arizona, by 2.7 million square feet, CEO Pete Rawlinson said Monday just hours after the company officially went public with a $4.5 billion injection of capital.

The company also said it has 11,000 paid reservations for its flagship luxury electric sedan, the Lucid Air.

Part of the expansion will be used to accommodate the manufacturing of Project Gravity, the mysterious title given to the automaker’s forthcoming luxury electric SUV, a Lucid spokesman told TechCrunch. Not much is known about Gravity at this point, other than that it’s scheduled to be available from 2023 and that it will use the same battery platform as the Air. Patent drawings submitted to the European Union Intellectual Property Office, first noticed by a member of the Lucid Forum, reveal little more than the renderings on Lucid’s website.

The company is also planning on bringing more of the component production in-house, including major pieces such as the body panel stampings, the spokesman added. These parts were being handled by an external supplier.

The Casa Grande City Council approved the plans to expand the nearly 1 million-square-foot space in March. The first phase of the factory, which cost around $700 million to construct, went up in a record 12 months after breaking ground. Lucid has said that it wants to expand production capacity from around 30,000 vehicles per year to up to 400,000.

Lucid has had a long, sometimes tenuous road to the public market. The company first set its sights on bringing an electric sedan to production as early as 2018, but it quickly hit funding challenges that pushed this timeline further and further back. Lucid received major funding in 2018 with a $1 billion investment from Saudi Arabia’s sovereign wealth fund, which continued to be its largest shareholder throughout Lucid’s merger with special purpose acquisition company Churchill Capital IV Corp.

That merger hit a bit of a hiccup last week when the company failed to garner a sufficient number of votes on a key proposal — likely due to the rise of retail traders and malfunctioning spam filters, executives said in an investor call.

Lucid, which will now operate under the name Lucid Group, is listed under the ticker symbol LCID.

News: Troubled EV company Lordstown Motors gets $400M lifeline in stock-sale agreement

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This new agreement could allow Lordstown to continue by providing the much-needed capital required to produce its first electric vehicle.

Five weeks after Lordstown Motors issued a warning that it might not have enough funds to bring its electric pickup truck to market, a hedge fund managed by investment firm Yorkville Advisors has agreed to buy $400 million worth of shares over a three-year period, according to a regulatory filing posted Monday.

The tumult within Lordstown Motors, which has resulted in the resignation of its CEO and CTO, has put the company at risk of failing. This new agreement could allow Lordstown to continue by providing the much-needed capital required to produce its first electric vehicle. If approved by shareholders, hedge fund YA II PN will be able to purchase 35.1 million shares, or about 19.9% of outstanding shares.

The capital provides a lifeline to Lordstown, which has struggled in recent months. The hedge fund, which is able to buy the shares at $7.48 a share, could also benefit financially if the stock price rises.

Lordstown Motors is an offshoot of former CEO Steve Burns’ other company, Workhorse Group, a battery-electric transportation technology company that is also publicly traded. Workhorse holds a 10% stake in Lordstown Motors.

The Ohio automaker was founded in 2019, and within a year reached a deal to merge with special purpose acquisition company DiamondPeak Holdings Corp., with a market value of $1.6 billion. The company had planned to begin production of its Endurance pickup truck starting in the second half of 2021 at the former GM Assembly Plant in Lordstown, Ohio.

Those plans faltered and a series of missteps and allegations of fraud compounded the company’s problems.

In March 2021, Hindenburg Research, the short-seller firm whose report on Nikola Motor led to a Securities and Exchange Commission investigation and the resignation of its founder, said it had taken a short position on Lordstown Motors. Hindenburg said at the time that its short position was based on a company that has “no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities.”

Hindenburg disputed that the company booked 100,000 pre-orders for its electric pickup truck, a stat shared by Lordstown Motors in January. The short seller said that “extensive research reveals that the company’s orders appear largely fictitious and used as a prop to raise capital and confer legitimacy.”

Two months later, Lordstown reported in its first-quarter earnings that production volumes of the Endurance would likely be half — from around 2,200 vehicles to just 1,000 — due to a lack of funding.

Lordstown execs dug themselves into a deeper hole by attempting to calm investors a day after its CEO and CTO resigned with statements that they had binding orders from customers that would fund limited production of its electric pickup truck through May 2022. The company retracted those statements within days.

The Department of Justice and the SEC are separately investigating the company.

News: Court orders US Capitol rioter to unlock his laptop ‘with his face’

• July 26, 2021
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The FBI argued that compelling Guy Reffitt to unlock his computer by sitting in front of it ‘would not run afoul of the defendant’s Fifth Amendment right against self-incrimination.’

A federal judge in Washington, D.C., has ordered a man accused of participating in the U.S. Capitol riot on January 6 to unlock his laptop “with his face” after prosecutors argued that the laptop likely contains video footage that would incriminate him in the attempted insurrection.

Guy Reffitt was arrested in late January, three weeks after he participated in the riot, and has been in jail since. He has pleaded not guilty to five federal charges, including bringing a firearm to the Capitol grounds and a charge of obstructing justice. His Windows laptop was one of several devices seized by the FBI, which investigators said was protected with a password but could be unlocked using Reffitt’s face.

Prosecutors said forensic evidence suggested that the laptop contained gigabytes of footage from Reffitt’s helmet-worn camera that he allegedly used to record some of the riot. Prosecutors asked the court if it could compel Reffitt to sit in front of the computer to unlock it.

Reffitt’s lawyer told the court that his client could “not remember” the password, but the court sided with the government and granted the motion to compel his biometrics. Reffitt’s lawyer told CNN, which first reported the court order, that the laptop is now unlocked.

The government took advantage of a loophole in the Fifth Amendment, which grants anyone in the U.S. the right to remain silent, including the right to not turn over information that could implicate them in a crime, such as a password. But some courts have ruled that those protections don’t extend to a person’s physical attributes that can be used in place of a password, such as a face scan or fingerprint.

In Reffitt’s indictment, the FBI said as much, arguing that compelling Reffitt to unlock his computer by sitting in front of it “would not run afoul of the defendant’s Fifth Amendment right against self-incrimination.”

Courts across the U.S. are still divided on the reading of the Fifth Amendment and whether it applies to the compelled use of a person’s biometrics. The U.S. Supreme Court isn’t likely to address the issue any time soon, rejecting two petitions in as many years to rule on the matter, leaving it largely up to the states to decide.

News: A magnetic helmet shrunk a deadly tumor in world-first test

• July 26, 2021
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We’ve seen helmets and AI that can spot brain tumors, but a new hard hat can actually treat them, too. Researchers used a helmet that generates a magnetic field to shrink a deadly tumor by a third.

We’ve seen helmets and AI that can spot brain tumors, but a new hard hat can actually treat them, too. As part of the latest neurological breakthrough, researchers used a helmet that generates a magnetic field to shrink a deadly tumor by a third. The 53-year-old patient who underwent the treatment ultimately passed away due to an unrelated injury. But, an autopsy of his brain showed that the procedure had removed 31 percent of the tumor mass in a short time. The test marked the first noninvasive therapy for a deadly form of brain cancer known as glioblastoma.

The helmet features three rotating magnets connected to a microprocessor-based electronic controller operated by a rechargeable battery. As part of the therapy, the patient wore the device for five weeks at a clinic and then at home with the help of his wife. The resulting magnetic field therapy created by the helmet was administered for two hours initially and then ramped up to a maximum of six hours per day. During the period, the patient’s tumor mass and volume shrunk by nearly a third, with shrinkage appearing to correlate with the treatment dose.

The inventors of the device — which received FDA approval for compassionate use treatment — claim it could one day help treat brain cancer without radiation or chemotherapy. “Our results…open a new world of non-invasive and nontoxic therapy…with many exciting possibilities for the future,” said David S. Baskin, corresponding author and director of the Kenneth R. Peak Center for Brain and Pituitary Tumor Treatment in the Department of Neurosurgery at Houston Methodist Neurological Institute. Details of the procedure have been published in the peer-reviewed journal Frontiers in Oncology.

Editor’s note: This post originally appeared on Engadget.

News: As China shakes up regulations, tech companies suffer

• July 26, 2021
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Things in China seem to be changing for the worse, in terms of both future access to foreign capital for Chinese companies and doing business in the country overall.

The Exchange spent a little time on Friday ruminating on the impact of then-rumored regulation in China targeting its edtech sector. News that the Chinese government intended to crack down further on the education technology market hit shares of public, China-based edtech companies. It was a mess.

Then over the weekend, the rumors became reality, and the impact is still being felt today in the global markets.

But there’s more. China is also bringing new regulatory pressure on food-delivery companies and Tencent Music. More precisely, we’ve seen successive market-dynamic-changing moves from the Chinese government in the last few days, coming as 2021 had already proved to be a turbulent environment for China-based technology companies.

The Exchange explores startups, markets and money.

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

Today we have to do a little bit of work to understand precisely what is going on with the various regulatory changes. Why? Because the Chinese venture capital market is a key player in the global venture scene. And Chinese startups have gone public on both Chinese, Hong Kong and U.S. exchanges; there’s a lot of capital tied up in companies impacted today — and possibly tomorrow.

For startups, the regulatory changes aren’t a death blow; indeed, many Chinese tech startups won’t be affected by what we’ve seen thus far. And upstart tech companies in sectors less likely to be targeted by central authorities may become more attractive to investors than they were before the regulatory onslaught kicked off. But on the whole, it feels like the risk profile of doing business in China has risen. That could curb the pace at which capital is invested, cut valuations and lower interest in the Chinese startup market from private-market investors able to invest globally.

Let’s parse what’s changed, examine market reactions and then consider what could be next. We want to better understand today’s Chinese startup market and what its new form could mean for existing players and future performance.

Changes

The edtech clampdown did not start last week. China’s edtech sector started to rack up penalties and fines in June, which led to what the Asia Times called “warning bells” in the sector. From there, things went from penalties to punishing regulatory changes.

News: Solarisbank raises $224M at a $1.65B valuation to acquire Contis and expand its API-based embedded banking tech in Europe

• July 26, 2021
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Embedded finance — the process by which some of the more complicated, but also commoditized, aspects of financial services are built and wrapped in an API for anyone else to implement in their own products for end users — has become a huge cornerstone of how fintech is built today. Now, one of the earlier

Embedded finance — the process by which some of the more complicated, but also commoditized, aspects of financial services are built and wrapped in an API for anyone else to implement in their own products for end users — has become a huge cornerstone of how fintech is built today. Now, one of the earlier and bigger movers in the space is announcing a major round of growth funding to build out its own.

Solarisbank, a Berlin startup that provides a range of financial services by way of some 180 APIs that others use to build end user-facing products — they include basic banking and card services; lending; payments; and know your customer services — has raised €190 million ($224 million) in a Series D that values the company at €1.4 billion ($1.65 billion), and announced the acquisition of one of its competitors in the space, Contis.

Decisive Capital Management, a Swiss firm that has also backed insurtech startup Wefox, led the round with Pathway Capital Management, CNP (Groupe Frère) and Ilavska Vuillermoz Capital; and previous backers yabeo Capital, BBVA, Vulcan Capital and HV Capital, also participating.

The round is coming about a year after its last round of $67.5 million, but as a sign of the times, what is perhaps more notable is that the company’s valuation has nearly quintupled since then (it was $360 million in June 2020).

This latest round is going to be used for expansion. CEO Roland Folz said in an interview that the Contis acquisition — which underscores a wider consolidation trend in fintech — will help it better cover all of Europe, and start to make its first early moves into Asia. (No plans right now to add the U.S. to that list, he added.)

He added that the combined entity will be making revenues in the “triple-digit euros” — that is, hundreds of millions; it posted net revenues of €35 million in 2020 — and will be in a position to go public next year, if it chooses to.

In the meantime, it’s hoping to double down on the huge shift we’re seeing in the world of financial services, where consumers and businesses are opting for newer and more modern banking experiences as they migrate away from slower, less flexible and sometimes more expensive incumbents.

“Europe is an ideal space for us to work in,” said Folz. “We believe that in Europe there are roughly 800 million bank accounts and some 400 million of those will change ‘ownership’, where traditional banks will be swapped out with non-traditional banks… If we look at the 5-10 year perspective, we want to make sure a  significant proportion of those accounts will be on our platform.”

SolarisBank counts companies like Trade Republic, American Express, BP, Samsung and Vivid among its customers, powering basic banking, know-your-customer checks, lending, digital wallet and other services related to finance for companies that can in turn focus their energies on building more user-friendly customer experiences or other services altogether. It’s been growing at a rate of 40%-60% annually, Folz added, and it has some 50 “partners” (as it calls its customers) in all, covering some 2 million customer accounts.

Contis, meanwhile, is a substantial business in its own right, with some 200 customers covering more than 2 million users and €9.9 billion in transactions annually.

Solarisbank was founded five years ago, in 2016, out of the Berlin-based startup incubator and investor finleap, with Ramin Niroumand, a founder of finleap, essentially the “founder” of Solarisbank too. (Currently and more more formally, he is also chairman of its advisory board.)

Embedded finance is all the rage at the moment, and a number of startups today are providing fintech-as-a-service, or banking-as-a-service tools to third parties. Other notable names in the same segment of the market include Railsbank (which also announced funding earlier this month),  Rapyd, which also raised a big round at a $2.5 billion valuation earlier this year; Unit, another banking-as-a-service startup picking up funding and growing; FintechOS, which really does what its name says (and is also currently raising $$); and the startup 10x, which ironically is targeting incumbents.

Solarisbank believes its particular approach to this gap in the market gives it more flexibility and mileage: unlike its rivals, the bulked-up Solarisbank will have both banking licenses for Europe, and e-money licenses (in Lithuania and UK), with its tech stack living on AWS, giving it an opportunity to build more services, to scale, and to keep better margins in the process — a critical detail in what is essentially an economy of scale play.

It also believes that its own diversity in its customer base — covering not just obvious fintech companies like neobanks, but a variety of others, like Samsung, that are building financial services (in its case, a digital wallet) — gives it more staying power, to cater to whatever segment of that base is growing most at any given time. As Niroumand points out, around 70% of its revenues some from some 30% of its customers. “It’s quite a diverse clientele we are serving,” he said.

The company is currently active in Germany, France, Italy and Spain but says it can cover the whole EEA with passporting.

“With the combined entity, we are looking at numbers that no one else is even close to remotely,” added Folz.

The market opportunity, combined with Solarisbank’s approach and its current customer base, are what attracted investors.

“We are experiencing a paradigm shift in banking, where customers expect financial services to adapt to their specific needs,” says Thomas Schlytter-Henrichen, a partner at Decisive Capital Management, in a statement. “Technology is the key to enable this transformation and Solarisbank’s powerful Banking-as-a-Service platform positions it perfectly for this new banking era. We are both inspired by the team and thrilled to work together on its mission.”

News: The Station: Rivian adds to its EV war chest, Sec. Buttigieg is coming to Disrupt and Argo preps to launch with Lyft

• July 26, 2021
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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 Sunday in your inbox. Hello frens and readers. Welcome to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point

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

Hello frens and readers. Welcome to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B.

Hey so maybe y’all missed it, but we shared some exciting news this week.

Transportation Secretary Pete Buttigieg will join us for a fireside chat at Disrupt 2021, where we plan to dig into some of the thorniest questions around transportation and how to ensure that moving from Point A to Point B is a universal right, not a privilege. The upshot: If it involves technology that moves people and packages, we aim to talk about it.

What do you want us to address?

Also, this is my way of telling y’all to buy a ticket to Disrupt. There are a lot of great speakers, including writer, director, actor and Houseplant co-founder Seth Rogen, Twitter CISO Rinki Sethi, Calendly founder and CEO Tope Awotona, Mirror co-founder and CEO Brynn Putnam, Evil Geniuses CEO Nicole LaPointe Jameson and Andreessen Horowitz General Partner Katie Haun, Duolingo CEO and co-founder Luis von Ahn and Coinbase CEO Brian Armstrong — to name a few.

As always, you can 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’

Do you live in a city with shared e-scooters and e-bikes that you never really ride even though you think it’s a cool concept? Maybe you think paying $10 to go three miles is ridiculous, or you don’t want to touch the sticky handlebars that someone may have previously coughed on. You’ve considered buying your own, but it ain’t cheap and you’re not ready for that kind of commitment … But wait! From the depths of this stream of consciousness a new business model emerges: micromobility subscriptions.

The premise is that customers pay a somewhat affordable fee for a monthly rental of a higher quality e-scooter or e-bike. It’s delivered to their door and assembled for them. If it breaks down, someone will ship them a new one. And customers can cancel anytime. It’s truly made for the 21st century city dweller, adding nicely to their collection of meal kit, vitamins, video streaming, music streaming, book reading, meditation app, digital trainer and outfit subscriptions.

Enough about the customer. Investors and companies are seeing the value in either building a business around the micromobility subscriptions model or adding it as another line to an existing business. They say it’s easy to scale, provides a good return on investment and costs less per mile to operate. And for those who actually care about sustainability, it allows the operator to control the vehicle’s end of life in a way that sales don’t.

The reason I’m harping on about this model is because I wrote about it for ExtraCrunch this week. It’s behind a paywall, but here are some highlights from the piece:

Shawn Carolan, managing director at Menlo Ventures, which invested in e-scooter subscription/sales company Unagi, is bullish on the micromobility subscription model. He says most people would rather pay a low monthly fee rather than a higher upfront fee.

“The best customers are repeat customers, commuters or local neighborhood trips,” Carolan said. “Repeatedly paying per ride is both expensive and cognitively taxing. People want low friction in transportation. Getting from here to there shouldn’t require a lot of thought.”

Menlo Ventures bet that customers would also take better care of high-quality scooter they get to “own” for a time, which translates to a longer lifetime for hardware — something the dockless shared model consistently struggles with. Having an additional route to micromobility will broaden the market, positioning it as a SaaS business, which achieves a higher multiple.

So what’s next for the subscription model? Startups looking to go this route need to work on providing the best possible service in order to retain customers.

“The job to be done is reliability,” Oliver Bruce, angel investor and co-host of the Micromobility Podcast with Horace Dediu, told TechCrunch. “Maintenance and repairs is still a nascent sector, but for people who want to have a reliable option for travel and don’t know or care about how to maintain their brakes or gears, it’s a really good option. Proper servicing will open up micromobility to a far wider group, especially when paired to safe infrastructure and favorable transport policies.”

Ireland gets on the e-scooter bandwagon

In other news, this week Ireland launched its first e-scooter trial across five campuses of Dublin City University. Berlin-based Tier will work with Irish and DCU-based Luna to equi

p e-scooters with computer vision tech that will be able to detect pavement lines and pedestrians. This is similar to what Drover is doing with Spin, which has just launched its visually updated scooters in Santa Monica.

The Insight SFI Research Centre for Data Analytics and Smart DCU, a district of Smart Dublin, will also collaborate on the pilot research. E-scooters are still illegal to ride on Irish roads, but there is proposed legislation in the works to change that.

Superpedestrian’s scooters are not backing vision

E-scooter company Superpedestrian acquired Navmatic, a startup that helps micromobility operators locate vehicles and correct their movements in real time. With access to Navmatic’s super fusion tech, Superpedestrian has created an advanced safety system called Pedestrian Defense that can detect unsafe riding behaviors and stop them in real time.

Navmatic’s technology basically allows the scooter to detect the rider’s micro-movements and through those plus other data picked up from sensors can determine things like if the scooter is going down the wrong way on a one way street or riding on the pavement.

Bike stuff

The Rad Power RadRover 6 Plus was launched this week, the latest model of the company’s flagship bike.

It’s the e-bike for people who come to the world of biking from a car-centric background somewhat reluctantly, but get hooked to the smooth, sturdy ride, user-friendly design and really affordable price. This totally rad bike is only $1,999, and it’s built to last.

I talked to the bike manufacturer’s chief product officer, Redwood Stephens, and he explained how Rad Power’s business model is all about reducing friction for the customer, from the way you order your vehicle to the packaging it arrives in to the big obvious ON button. And this method appears to be going quite well for the company. In February it raised $150 million in funding, probably the most any e-bike company in America has ever raised.

— Rebecca Bellan

Deal of the week

Rivian scored another $2.5 billion in a private funding round of returning investors. The round was led by Amazon’s Climate Pledge Fund, D1 Capital Partners, Ford Motor and funds and accounts advised by T. Rowe Price Associates Inc. Third Point, Fidelity Management and Research Company, Dragoneer Investment Group and Coatue also participated in the round, according to Rivian.

Rivian has raised an eye-popping $10.5 billion to date. The company didn’t share a post-money valuation, but earlier this year when it had announced a $2.65 billion raise TechCrunch learned that its  valuation was $27.6 billion.

As the money comes in, the pressure is increasing for the company to deliver its consumer and commercial products. Rivian recently delayed deliveries of its R1T truck and R1S SUV from this summer to September due to delays in production caused by “cascading impacts of the pandemic,” particularly the ongoing global shortage of semiconductor chips. The company also confirmed it plans to open a second U.S. factory.

My other “deal of the week” involves a deal that almost wasn’t. I’m speaking of Lucid Motors of course, which had to extend the deadline to approve its merger with special purpose acquisition company Churchill Capital IV because not enough retail investors showed up to cast their vote. (They were able to approve the merger on Friday).

The hiccup occurred on Thursday, when shareholders voted to approve all but one of the proposals as part of the merger — proposal two, which would revise the company’s charter so that Lucid could receive key financing. That proposal requires a higher number of votes than the others — and it must be approved for the merger to take place — so a lack of votes ended up halting the entire process. The lack of shareholders was blamed on retail investors’ unfamiliarity with the SPAC process and, unbelievably, spam filters gone awry.

The issue is unusual but could become more common as more companies eschew the traditional IPO path to public markets and instead merge with SPACs.

Other deals that got my attention this week …

ChargePoint acquired European charging software company has·to·be for €250 million ($295 million) in cash and stock, the electric vehicle charging network’s first acquisition since it became a publicly traded company. Through the deal, ChargePoint gains more than just 125 employees and the company’s operating software, which manages more than 40,000 networked ports in Europe. The acquisition will give ChargePoint a boost in its pursuit to gain market share beyond North America, as well as VW Group as a strategic partner.

Magna International, the Canadian auto parts maker, is going to acquire its rival Veoneer, which had spun off from safety equipment supplier Autoliv in 2018, for about $3.8 billion in cash, Automotive News reported. (This  also qualifies for my “deal of the week.”) The acquisition is going to give Magna a major boost, particularly in the area of driver assistance technologies business.

Magna will buy out Veoneer’s outstanding shares for $31.25 each, and the acquisition represents an enterprise value of $3.3 billion including debt, the companies said in a joint statement. Magna also said it will capture about $100 million in annual cost savings by 2024.

Miles, a universal rewards platform and app that allows anyone with a smartphone to earn miles for all of their travel, raised $12.5 million in Series A funding round led by Scrum Ventures, with participation from TransLink Capital and Japan Airlines (JAL Innovation Fund), TechNexus Venture Collaborative, Aioi Nissay Dowa Insurance (MS&AD), Synapse Partners and several other prominent individual investors. The raise brings Miles’ total funding to $20 million, with other notable investors including JetBlue Technology Ventures, Liil Ventures, Porsche Ventures, Panasonic, SAIC, Sony Innovation Fund, Urban Us (VC), and Gabe Klein (Co-founder CityFi).

Rodo, an e-commerce startup focused on buying and selling vehicles, raised $18 million in a Series B financing round led by Holman Enterprises and Evolution VC Partners. The round also included existing investor IAC along with Kevin Hart’s HartBeat Ventures as well as auto industry veterans RML Automotive vice chairman Mack McLarty, McLarty Diversified Holdings Chairman and CEO Franklin McLarty and Ken Schnitzer, the former chairman of Park Place Automotive Group. Rodo, which has raised a total of $45 million to date, plans to use the funds to scale its dealership network nationwide and invest in marketing and customer acquisition.

Sonatus, the California-grown automotive software company, raised $35 million in a Series A round that attracted high-profile technology and automotive industry companies including Hyundai Motor Group’s Kia Corporation, SAIC Capital and LG Electronics. Silicon Valley VC Translink Capital led the round, with other investors including Marvell Technology, UMC Capital and Wanxiang Group Company.

Tesla said it will secure nickel from the commodity production giant BHP. The companies didn’t disclose the amount of mineral that will be supplied, just that it will come from BHP’s Nickel West division mines in Western Australia. The two companies also agreed to work together to increase battery supply chain sustainability and to identify ways to decrease carbon emissions from their respective operations using energy storage paired with renewable energy.

Uber Freight, the logistics business spun out of Uber in 2018, acquired TransPlace for $2.25 billion from private equity group TPG Capital. It’s one of those upstream meets downstream type of deals. The union will fold one of the largest managed transportation and logistics networks into Uber Freight’s platform, which connects truck drivers with shippers that need cargo delivered. Uber Freight’s brokerage will continue to operate independently from Transplace’s services, the company said.

This deal marks a ramping up of Uber Freight’s business as it aims to carve out market share in its existing markets and an expansion in Mexico. Uber Freight also sees the acquisition as a means to accelerate the company’s path to profitability and help the segment to break even on an Adjusted EBITDA basis by the end of 2022.

Policy corner

Welcome back to Policy Corner!

EV rebates and tax credits are a well-known incentive mechanism to encourage Americans to make the switch to electric, but people looking for micromobility incentives have historically been out of luck. A new bill introduced in the Senate is looking to change that. The Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act would give consumers a refundable 30% tax credit on the purchase of an electric bicycle, up to $1,500.

Qualifying bikes must be under $8,000 dollars and reach a max speed of no more than 28 miles per hour. So that means a huge swath of the market would be eligible for the credit. A sister bill was introduced to the House earlier this year. If it passes in both parts of Congress, it would then head to President Biden’s desk.

There’s an interesting interview with Rep. Earl Blumenauer, one of the legislators who introduced the bill in the House. (Just a note, it was conducted by The Scenic Route, a vertical of e-bike seller Rad Power Bikes.) The Congressman talks about how e-bike incentives could fit into the larger goals of the massive infrastructure bill currently being mulled by lawmakers.

“I was talking to the Secretary of Transportation yesterday about the opportunities we have with this big infrastructure package and this is one of those elements that ties in with what we’re doing with the tax system,” Blumenauer said. “It reduces traffic congestion, there’s less pollution to contend with, and it eases the problem of parking.”

I live in Austin, where the hills have dissuaded me from cycling around — yet, the majority of my car trips are less than four miles. I’ve often thought that an electric bike would be a good way to use my car less. I’m sure many other Americans feel similarly.

— Aria Alamalhodaei

Notable news and other tidbits

As per ushe, there is a lot to get to this week. When will the news cycle slow down?

Autonomous vehicles

Argo AI and its backer and customer Ford had the big AV story of the week. The two companies announced plans to launch at least 1,000 self-driving vehicles on Lyft’s ride-hailing network in a number of cities over the next five years, starting with Miami and Austin. I get deep into the details in the story, but the tl;dr includes Lyft taking a 2.5% stake in Argo, which now has a valuation of $12.4 billion.

The first Ford self-driving vehicles, which are equipped with Argo’s autonomous vehicle technology, will become available on Lyft’s app in Miami later this year. Austin will follow next year, with the remaining U.S. cities being added to the Lyft app in 2023 and beyond. Argo currently tests in Detroit, Palo Alto, Pittsburgh and Washington, D.C.

Jody Kelman, who heads up Lyft’s Autonomous, the company’s self-driving deployment business unit, answers the why we should care question: “It’s the biggest deployment certainly that we’re doing and that I think anyone else is doing. One thousand cars across six markets is a big leap forward in terms of scaled commercialization.”

Mobileye expanded its autonomous vehicle testing program to New York City as part of its strategy to develop and deploy the technology. If you’re not watching Mobileye, you should be — even those who don’t agree with the company’s approach.

New York City joins a number of other cities, including Detroit, Paris, Shanghai and Tokyo, where Mobileye has either launched testing or plans to this year. Mobileye launched its first test fleet in Jerusalem in 2018 and added one in Munich in 2020.

Waymo is expanding into AV hub Pittsburgh. The company will start by hiring around a dozen engineers, a source familiar with the move told TechCrunch, and they’ll co-locate in Google’s existing offices in the Bakery Square district. As of Thursday, only around three open positions for the Pittsburgh area were listed on Waymo’s website, but the company will be adding more roles soon.

Notably, some of the new team will come from Pittsburgh-based RobotWits, a tech startup focused on autonomous vehicle decision-making. Waymo acquired RobotWits’ IP rights and some members of its engineering and technical team as well as the company’s founder and CEO Maxim Likhachev are joining Waymo.

Electric vehicles

Arrival, the commercial electric vehicle company, has been chosen to build electric buses for the City of Anaheim, California. The Federal Transportation Administration awarded Anaheim a $2 million grant in 2019. The city’s transportation network announced the plan to partner with Arrival to achieve its goal of running California’s first all-electric bus fleet by 2025.

Battery joint ventures have become the hot must-have deal for automakers that have set ambitious targets to deliver millions of electric vehicles in the next few years. TechCrunch’s Rebecca Bellan digs into what is driving this trend and provides a roundup of the latest deals.

GM said it will add a full-size electric pickup truck to its GMC lineup, the latest in a string of EV product announcements by the automaker in the past year as it pushes to deliver more than 1 million electric vehicles globally by 2025. GM didn’t provide much more, but we can expect it to follow the GMC Hummer EV pickup that is coming  late this year.

Tesla CEO Elon Musk said the automaker will allow other electric vehicles to access its global network of chargers later this year. Musk has been chattering about this idea for years now; what made me take it a skosh more seriously is that he attached a timeline to this. My prediction is that Tesla owners will push back.

Speaking of Musk, the technoking said the automaker will ‘most likely’ resume accepting bitcoin as a form of payment once the mining rate for the cryptocurrency reaches 50% renewables. He made the comments at a virtual panel discussion hosted by the Crypto Council for Innovation. You might recall that Tesla started accepting bitcoin as a form of payment in February, the same time that the company purchased a historic $1.5 billion in bitcoin — before reneging on its decision just three months later, citing environmental concerns.

Mercedes-Benz laid out a €40 billion ($47 billion) plan to become an electric-only automaker by the end of the decade. To be clear, Mercedes did give itself some wiggle room in that ambitious goal, noting that it will be “ready to go all electric by the end of the decade, where markets allow.” This could mean that some combustion engine Mercedes, which are already equipped with 48-volt mild hybrid systems, will be produced and sold beyond the decade.

This target is driving Mercedes to become more vertically integrated, secure its supply chain and retraining its workforce. For instance, the automaker noted that it has acquired U.K.-based electric motor company YASA, and has determined it will need battery capacity of more than 200 gigawatt hours. To hit meet those needs, Mercedes plans to set up eight battery factories with existing partners and one new partner to produce cells.

In-car tech and ADAS

GM is rolling out three major upgrades including automatic lanes changes and towing support to its hands-free driver assistance system Super Cruise and making it available in six vehicles, including the 2022 all-new GMC Hummer EV pickup truck.

Speaking of Super Cruise, GM isn’t OK with Ford naming its own ADAS BlueCruise. GM and its self-driving vehicle subsidiary Cruise, filed a lawsuit against Ford claiming that the BlueCruise name is too similar to its Super Cruise trademark and Cruise’s trademark, The Hill reported.

Ride-hailing, car-sharing and other stuff

Getaround was fined nearly $1 million by the Washington, D.C. Office of the attorney general for operating without a license and other violations, part of a settlement of what the peer-to-peer car rental startup calls “politically motivated allegations.”

People makin’ moves

Aurora has hired Yanbing Li as its new senior VP of engineering, according to a posting on LinkedIn. Yanbing comes from Google, where she lead the enterprise services platform organization in Google Cloud.

Joby Aviation announced its board of directors and it contains some high-profile transportation folks, including Zoox CEO Aicha Evans, Dr. James Kuffner, CEO of Toyota’s Woven Planet Holdings,·Reid Hoffman, LinkedIn Co-Founder and Co-Lead Director of Reinvent Technology Partners, Google general counsel Halimah DeLaine Prado and Dipender Saluja the managing director of Capricorn Investment Group.

Of course, the board also includes Joby founder and CEO JoeBen Bevirt, Founder and executive chairman Paul Sciarra.

Velodyne Lidar lost its CEO, the latest in a series of issues and internal drama that have cropped up since the sensor company struck a deal to merge with special purpose acquisition company Graf Industrial Corp. CEO Anand Gopalan, who was previously CTO, announced he is leaving the lidar company at the end of July.

A team of top executives that includes COO Jim Barnhart, CFO Drew Hamer, Chief People Officer Kathy McBeath and Chief Commercial Officer Sinclair Vass will run the company as a search for a new chief executive is conducted. The company didn’t disclose why Gopalan was leaving.

Xos, the electric truck company that is set to go public via SPAC merger later this summer, announced nominees for the board that will represent the combined company. Beyond Xos co-founders Dakota Semler and Giordano Sordoni, the list includes: Burt Jordan, the former VP of global purchasing operation and supply chain sustainability at Ford, S. Sara Mathew, the former chair and CEO at Dun & Bradstreet Corporation, George Mattson, who co-dounded NextGen Acquisition Corporation, and Ed Rapp, the former group president for resource industries and former CFO at Caterpillar Inc.

News: Early bird savings on passes to TechCrunch Disrupt 2021 end this week

• July 26, 2021
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Tick tock, early-stage startup fans: If you plan to attend TechCrunch Disrupt 2021 (September 21-23), time is running out to score a pass to the world’s leading conference dedicated to tech startups — for less than $100. The early bird sale ends this week, so buy your pass here before the deal expires on July

Tick tock, early-stage startup fans: If you plan to attend TechCrunch Disrupt 2021 (September 21-23), time is running out to score a pass to the world’s leading conference dedicated to tech startups — for less than $100. The early bird sale ends this week, so buy your pass here before the deal expires on July 30 at 11:59 pm (PT).

And if you’re part of the tech startup ecosystem — or aspire to be — why the heck wouldn’t you dive headlong into three days dedicated to the art and science required to build and scale successful startups? Just listen to what three past attendees said about their Disrupt experience.

Disrupt is a great sweet spot, and highly valuable, for anyone in the idea stage all the way through to having raised some angel money. Soak up the pitch deck teardowns and the VC presentations. They’re telling you what they’re looking for, what motivates them, what pushes them to contact you for a meeting. And that’s exactly what every startup raising capital needs to know. — Michael McCarthy, CEO, Repositax.

“TechCrunch has created a great venue that brings together all the different people within the startup ecosystem. It’s a place where new startups can present, attendees can learn from top industry experts and who knows? One day they might be the person speaking on the Disrupt stage. It’s a great event overall.” — JC Bodson, founder and CEO of Arbitrage Technologies

“The connections I made at Disrupt offer long-term benefits. Investors willing to put forth capital, engineers offering tech expertise and manufacturers to help me streamline. Fostering these relationships will help me grow my company and my bottom line.” — Felicia Jackson, inventor and founder of CPRWrap.

Disrupt is the place to be to learn, connect, collaborate and keep tabs on rapidly changing trends. Here’s just one example of the timely topics and world-class experts we have on tap. Don’t forget to check out the agenda.

Saving the World: COVID-19 changed everything. It not only threatened our individual health and wellbeing, but it also shook industries and economies across the globe. The same could be said about the COVID-19 vaccines. Hear from BioNTech Cofounder and CEO, Ugur Sahin on the process of rapidly developing the world’s most sought-after vaccine, alongside Pfizer, and the long-term potential of mRNA-based therapies. Sahin will be joined by Ursheet Parikh of Mayfield Fund to discuss what’s next for startups in this rapidly evolving industry.

Pro Tip: We’ll add new speakers, events and discounts in the run up to Disrupt — sign up for updates so you don’t miss out.

TechCrunch Disrupt 2021 takes place September 21-23, but the time to snag serious savings ends this week. Buy your early bird pass here before the deal expires on July 30 at 11:59 pm (PT).

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

News: Queenly’s marketplace for formalwear gets millions in round led by A16z

• July 26, 2021
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Queenly, a resale marketplace for formalwear, announced on Friday that it has grown its seed round to $6.3 million in a financing round led by Andreessen Horowitz’s Connie Chan. The financing event brings Queenly’s total venture raised to date at $7.1 million. Queenly sees itself as a “StockX” for formalwear, but has its own hold

Queenly, a resale marketplace for formalwear, announced on Friday that it has grown its seed round to $6.3 million in a financing round led by Andreessen Horowitz’s Connie Chan. The financing event brings Queenly’s total venture raised to date at $7.1 million.

Queenly sees itself as a “StockX” for formalwear, but has its own hold on the resale market for luxury goods. The startup gets consumers to list their used dresses – whether it be from weddings, proms, or pageants – on the platform to sell at a discounted price to others. Sellers then make about 80% of the listed price when a dress is sold, while buyers get a unique dress that wouldn’t have been worn gain anyways.

In a statement, A16z’s Chan said that she experienced “firsthand how unique but underserved the formalwear market is by technology.” The investor noted how fit is less important because people often rely on alterations, but uniqueness matters. She also credited the experience that the Queenly co-founders Trisha Bantigue and Kathy Zhou both have at pageants, which has made its way into the end-product.

Sure enough, the co-founders have put much of their energy into an algorithm designed to help buyers find the best dress for them, with search capabilities that are meant to be more inclusive of size and skin color than competitors like retail stores and Poshmark.

“These are just some things that we know because we’re women, and we know how to build this product for women,” Zhou said in a previous interview. “As opposed to if this was a male founder, they would not know that that would even be something that women would search for.”

The resale marketplace comes with its own challenges, the biggest of which can often be quality assurance. For dresses priced at $300 or less, Queenly gets proof photos of condition and then allows sellers ship directly to buyers. Dresses above $300 are routed through the company’s own operation, where a qualiy assurance team more closely checks for the condition of the dress.

Queenly graduated from Y Combinator in Winter 2021, in the thick of the coronavirus pandemic. Despite the lack of in-person events, the co-founders said that they had half a million in sales, thanks to Zoom weddings, Twitch pageants and socially-distant graduations. Queenly also got small fancy dress businesses, looking for a digital solution to get ubuyers, to list their inventory on the site.

The growth helped the startup raise while still in the accelerator, landing $800,000 from investors including Mike Smith, former COO of Stitch Fix, Thuan Pham, former CTO of Uber, and Kelly Thompson, former COO of Samsclub.com and Walmart.com. The company then closed the first bit of its seed round at $2.3 million, bringing on Dragon Capital along with other investors.

Now, three months later, Queenly has extended that seed round by a few million. The company declined to disclose its new valuation or sales volume, but did say that number of dresses on Queenly’s platform have grown from 50,000 in February to 60,000 now, in July. Queenly also landed a partnership, per Forbes, with the Miss USA organization, which will help grow its footprint through contestants uploading their dresses to the platform. Of course, dresses aren’t synonymous with sales – but with millions more, the startup could be equipped to turn that reach into real dollars.