Monthly Archives: September 2021

News: Ford hires new chief digital information officer as it seeks to expand into software and services

Ford Motor has hired Mike Amend as its chief digital and information officer as the automaker seeks to expand into software, subscriptions and in-vehicle connectivity. Amend, who was president of Lowe’s Online for three years, will focus on Ford’s “use of data, software and technology” — all areas central to Ford’s new Ford+ strategy, the

Ford Motor has hired Mike Amend as its chief digital and information officer as the automaker seeks to expand into software, subscriptions and in-vehicle connectivity. Amend, who was president of Lowe’s Online for three years, will focus on Ford’s “use of data, software and technology” — all areas central to Ford’s new Ford+ strategy, the OEM said.

The hire is just the latest sign that Ford is serious about beefing up its digital offerings for customers, as the company seeks to pivot toward high-tech segments. The company calls this plan “Ford+,” which it unveiled earlier this year. Central to this plan is electric vehicles, which Ford wants to comprise around half of its global sales by 2030, as well as expanding into new sources of revenue via subscriptions and digital services.

To that end, Amend will oversee a number of teams, including Ford’s technology and software platform function and its global data insight and analytics section.

Amend isn’t Ford’s only recent hire of note. The automaker also recently poached Doug Field — the tech executive who was leading Apple’s special projects team, and who also led the development of the Model 3 at Tesla — as chief advanced technology and embedded systems officer. The two will work closely, along with chief of product Hau Thai-Tang, Ford said.

Amend’s career includes growing the online businesses of major retailers, including Lowe’s, The Home Depot and JCPenney. Ford’s interim chief information officer, Sakis Kitsopanidis, will continue to serve as director of integrated enterprise resource planning.

News: 3 keys to pricing early-stage SaaS products

The pricing journey is long and, despite what some founders might think, jumping head-first into customer acquisition isn’t the first stop. Step one is making sure you have a fully fledged product.

Yousuf Khan
Contributor

Yousuf Khan is a partner at Ridge Ventures. Prior to joining Ridge, he was the first CIO of Automation Anywhere, CIO and vice president of Customer Success at cloud-based AI platform Moveworks, as well as CIO of Pure Storage, Qualys and Hult International Business School.

I’ve met hundreds of founders over the years, and most, particularly early-stage founders, share one common go-to-market gripe: Pricing.

For enterprise software, traditional pricing methods like per-seat models are often easier to figure out for products that are hyper-specific, especially those used by people in essentially the same way, such as Zoom or Slack. However, it’s a different ball game for startups that offer services or products that are more complex.

Most startups struggle with a per-seat model because their products, unlike Zoom and Slack, are used in a litany of ways. Salesforce, for example, employs regular seat licenses and admin licenses — customers can opt for lower pricing for solutions that have low-usage parts — while other products are priced based on negotiation as part of annual renewals.

You may have a strong champion in a CIO you’re selling to or a very friendly person handling procurement, but it won’t matter if the pricing can’t be easily explained and understood. Complicated or unclear pricing adds more friction.

Early pricing discussions should center around the buyer’s perspective and the value the product creates for them. It’s important for founders to think about the output and the outcome, and a number they can reasonably defend to customers moving forward. Of course, self-evaluation is hard, especially when you’re asking someone else to pay you for something you’ve created.

This process will take time, so here are three tips to smoothen the ride.

Pricing is a journey

Pricing is not a fixed exercise. The enterprise software business involves a lot of intangible aspects, and a software product’s perceived value, quality, and user experience can be highly variable.

The pricing journey is long and, despite what some founders might think, jumping head-first into customer acquisition isn’t the first stop. Instead, step one is making sure you have a fully fledged product.

If you’re a late-seed or Series A company, you’re focused on landing those first 10-20 customers and racking up some wins to showcase in your investor and board deck. But when you grow your organization to the point where the CEO isn’t the only person selling, you’ll want to have your go-to-market position figured out.

Many startups fall into the trap of thinking: “We need to figure out what pricing looks like, so let’s ask 50 hypothetical customers how much they would pay for a solution like ours.” I don’t agree with this approach, because the product hasn’t been finalized yet. You haven’t figured out product-market fit or product messaging and you want to spend a lot of time and energy on pricing? Sure, revenue is important, but you should focus on finding the path to accruing revenue versus finding a strict pricing model.

News: Join Team TechCrunch at these speed networking sessions at Disrupt

Grab a red Sharpie, circle September 20 on your calendar (ooh, how old school), and get ready to jump start your TechCrunch Disrupt 2021 networking experience. Sure, Disrupt’s “official” run is September 21-23, but why wait to meet other movers and shakers in your specific tech category? We’re hosting a series of speed networking sessions

Grab a red Sharpie, circle September 20 on your calendar (ooh, how old school), and get ready to jump start your TechCrunch Disrupt 2021 networking experience. Sure, Disrupt’s “official” run is September 21-23, but why wait to meet other movers and shakers in your specific tech category?

We’re hosting a series of speed networking sessions to get your Disrupt kicked off on Monday, September 20. These events will take place in CrunchMatch, our AI-powered platform that helps you find and connect with attendees on your must-meet list.

Pro Tip 1: If you purchased a pass, you received an email with instructions on how to access CrunchMatch. Yeah, you did.

Pro Tip 2: You still have time to buy your Disrupt 2021 pass for less than $100. Look through the Disrupt agenda and see all the programming, events and opportunity waiting for you.

We love free swag, and we’re pretty sure you do, too. So, we’ll randomly select one participant from each networking session to receive a TC swag bag. W00t!

Here are the meet and greets happening at Disrupt – Choose your category and kickstart your connections.

  • Peer-to-Peer: Investors Connect with your community of startup investors to share connections, insights and expertise.
  • Peer-to-Peer: Early-Stage Founders Meet the founders also launching at Disrupt to share insights and grow your support network.
  • The Full Stack: Meet the data analysts, engineers, hackers, data scientists, and software developers that power your tech.
  • BIPOC & Women of Disrupt (and their allies) We invite all women and BIPOC (and all allies) attending Disrupt to join us for this roundup to inspire one another and grow your network.
  • B2B 2 Connect: Are you working on products that make it easier for businesses to thrive? Meet and share ideas and others with the SaaS and Enterprise community.
  • DNA/Tech:  Meet the scientists who are using technology and engineering to produce advancements in health and biology.
  • Planet/Impact: Passionate about making an impact on our planet? Join this networking session focused on sustainability, greentech and cleantech projects.  
  • Money Matters: Network with the power brokers changing the face of financial services, banking and crypto.
  • Autonobot: Discover the builders automating our lives with robotics and hardware alongside the scientists creating the artificial intelligence that powers it all.
  • The Station: Share insights with people pushing the boundaries of mobility including drone technology, autonomous vehicles, and transportation.

TechCrunch Disrupt 2021 takes place on September 21-23, and these meet and greet sessions can help you hit the networking ground running. Make the most out of your TC Disrupt experience!

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

News: How Colossal sold investors on a quest to resurrect a woolly mammoth

There are a growing number of companies interested in CRISPR’s potential to upend medicine. It’s probably safe to say there’s only one company interested in using the gene-editing system to create a living, breathing woolly mammoth. Or, at least, something pretty close to it.  That’s the primary mission of a new company called Colossal. Co-founded

There are a growing number of companies interested in CRISPR’s potential to upend medicine. It’s probably safe to say there’s only one company interested in using the gene-editing system to create a living, breathing woolly mammoth. Or, at least, something pretty close to it. 

That’s the primary mission of a new company called Colossal. Co-founded by maverick geneticist George Church, and entrepreneur Ben Lamm, the current CEO of Hypergiant, the company aims to bring one of those creatures back to life using CRISPR to edit the genomes of existing Asian elephants. In that sense the creature would be very similar to a woolly mammoth, but would be more like an elephant-mammoth hybrid. 

It’s a project that Church’s lab has been invested in for years. But now, Church and Lamm have managed to sell investors on the idea that bringing back a mammoth is more than a science-fiction project. 

Today Colossal announced its launch and a $15 million seed round led by Thomas Tull, former CEO of Legendary Entertainment (the company responsible for the likes of Dune, Jurassic World, the Dark Knight). The round includes investments from Breyer Capital, Draper Associates, Animal Capital, At One Ventures, Jazz Ventures, Jeff Wilke, Bold Capital, Global Space Ventures, Climate Capital, Winklevoss Capital, Liquid2 Ventures, Capital Factory, Tony Robbins and First Light Capital.

“These two are a powerhouse team who have the ability to completely shift our understanding of modern genetics while developing innovative technologies that not only help bring back lost species, but advance the entire industry,” Robbins tells TechCrunch. “I am proud to be an investor in their journey.”

Lamm comes to Colossal as the founder of Hypergiant, a Texas-based A.I company. He has also built and sold three other companies: Conversable (acquired by LivePerson), Chaotic Moon Studios (acquired by Accenture) and Team Chaos (acquired by Zynga). 

And big, provocative, projects are part of what Church is already famous for. 

Church created the first direct genomic sequencing method in the 1980s, and went on to help initiate the Human genome project. Now, he leads synthetic biological efforts at the Wyss Institute, where he has focused on synthesizing entire genes and genomes. 

 While CRISPR gene editing has only just entered human trials, and typically aims to edit a single disease-causing gene, Church’s projects often think far bigger – often along the lines of speeding along evolution. In 2015, Church and colleagues edited 62 genes in pig embryos (a record at the time), in an effort to create organs for human transplants. 

The company spun out of that endeavor, eGenesis, is behind on Church’s initial timeline (he predicted pig organs would be viable transplants by 2019), but the company is performing preclinical experiments on monkeys.

Resurrecting a woolly mammoth has long been in Church’s crosshairs. In 2017, his lab at Harvard University reported that they had managed to add 45 genes to the genome of an Asian elephant in an attempt to recreate the mammoth. Through a sponsored research agreement, this company will fully support the mammoth work at Church’s lab.

The company’s pitch for bringing back the Mammoth, per the press release, is to combat the effects of climate change through ecosystem restoration. Lamm expands on that point: 

“Our goal is not to just bring back the Mammoth, that’s a feat in itself,” he says. “It’s for the successful re-wilding of mammoths. If you take that toolkit, you have all the tools are your disposal to prevent extinction or to bring back critically endangered species.”

About 1 million plant and animal species are threatened with extinction. Colossal’s mammoth project, should it succeed, would suggest they have developed the capacity to both repopulate recently dead creatures, and even perform what Lamm calls “genetic rescue” to stop them from disappearing in the first place. 

Genetic rescue is the process of increasing genetic diversity in an endangered population – this could be achieved through gene-editing, or in some cases, cloning new individuals to create a wider gene pool (provided the clone and the existing animals have different enough genes). There is already some evidence that this is possible. In February 2021, a black footed ferret named Elizabeth Ann became the first cloned endangered species native to North America. She was cloned from the DNA housed in frozen tissue samples collected in 1988. 

Mammoth in the middle of mountains. This is a 3d render illustration

Bringing back extinct species might help combat a consequence of climate change, but it doesn’t solve the root problem. As long as the human- based drivers of climate change remain in-tact, there’s not much hope for a newly reborn creature that was killed by climate change the first time; in fact, fluctuating climates were one reason megafauna died off in the first place.

And, there could be serious ecosystem ramifications from re-wilding long-dead species, like spreading novel disease, displacing existing species, and altering the actual landscape (elephants are ecosystem engineers, after all). 

If tackling biodiversity is part of Colossal’s core pitch, why go directly for the mammoth when there are species that might be saved right now? Lamm notes that the company may also try to edit the genomes of Asian elephants to make them more resilient, however, the mammoth project remains the company’s “north star.”

The argument, from Lamm’s perspective, is that the mammoth project is a moonshot. Even if the company shoots for the moon and lands among the stars, they will have to develop proprietary technology for de-extinction that might then be licensed or sold to potential buyers. 

“It’s very similar to the Apollo program – which was a literal moonshot. A bunch of technologies were created along the way. Things like GPS, the fundamentals of the internet, and semiconductors. All those were highly monetizable,” he says.  

In short, the mammoth project is more like an incubator for developing a host of intellectual property. That might include projects like artificial wombs or other applications of CRISPR, Lamm notes. These products will still face massive scientific hurdles – existing artificial womb projects aren’t even near entering human trials – but those hurdles might be slightly more achievable than living, breathing beings. 

Not that Colossal doesn’t have plenty of interim plans while that research is being done. The company is also out to create an especially memorable brand along the way.  Lamm says you could think of the brand as “Harvard meets MTV” says Lamm. 

Though there’s no company that Lamm says is a direct comparison to Colossal, he mentioned several large space brands and agencies like Blue Origin, SpaceX, and notably NASA in our conversation — “I think that NASA is the best brand the United States ever made,” he notes. 

“If you look at SpaceX and Blue Origin and Virgin, my 91 year-old grandmother knew these guys went to space. ULA and other people have been launching rockets and putting satellites up there for decades – nobody cared. These companies did a great job of bringing the public in,” he says. 

It’s all a bit reminiscent of Elon Musk’s plan for sending humans to Mars, although Starship (the vehicle that’s supposed to get us there) hasn’t moved beyond prototype test flights. 

The big ideas, says Lamm, draw in the public. The intellectual property developed along the way can pacify investors in the meantime. The perspective is inescapably sci-fi, but perhaps it’s supposed to be that way. 

And that’s not to say that the company isn’t absolutely dead-set on bringing a mammoth to life. This capital, says Lamm, should be sufficient to help develop a viable mammoth embryo. They’re aiming to have the first set of calves born in the next four to six years. 

News: GM invests in radar software startup Oculii as demand for automated driving features rise

Oculii, a software startup that aims to improve the spatial resolution of radar sensors by up to 100-fold, has scored a new investment from General Motors. The new funding, which the two companies say is in the millions, comes just months after Oculii closed a $55 million Series B. Oculii and GM have already been

Oculii, a software startup that aims to improve the spatial resolution of radar sensors by up to 100-fold, has scored a new investment from General Motors. The new funding, which the two companies say is in the millions, comes just months after Oculii closed a $55 million Series B.

Oculii and GM have already been working together “for some time now,” CEO Steven Hong told TechCrunch in a recent interview. While he declined to specify exactly how GM plans to use Oculii’s software, it could be used to bolster the capabilities of the automaker’s hands-free advanced driver assistance system known as Super Cruise. Hong added that the company is also working with a few other OEMs, including one on the cap table.

“When a company like GM says, this is great technology and this is something that we potentially want to use down the line, it makes the entire supply chain take notice and effectively work more closely with you to adopt the solution, the technology, into what they’re selling to the OEMs,” he said.

The startup has no intention of building hardware. Instead, Oculii wants to license software to radar companies. The startup claims it can take low-cost, commercially available radar sensors – sensors that weren’t designed for autonomous driving, but rather for limited scenarios like emergency breaking or parking assist – and use its AI software to enable more autonomous maneuvering, Hong said.

“We really believe that the way to deliver something that’s scalable is through software, because software fundamentally improves with data,” he said. “Software fundamentally improves with better hardware in each generation that’s released. Software fundamentally over time gets cheaper and cheaper and cheaper, much faster than hardware, for example.”

The news is certainly bullish for radar, a sensor that is generally used for assistive capabilities because of its imaging limitations. But if Oculii can actually improve the performance of radar, which tend to be much cheaper than lidar, it could mean massive cost savings for automakers.

Tesla, the largest electric vehicle maker by sales volume in the world, recently nixed radar sensors from its advanced driver assistance system, in favor of a “pure vision” approach that uses cameras and a supercomputer-powered neural network. Hong said that the radar Tesla eliminated was very low resolution, and “wasn’t really adding anything to their existing pipeline.”

But he doesn’t think the company would always necessarily count out radar, should the technology improve. “Fundamentally, each of these sensors improves [the] safety case and gets you closer and closer to 99.99999% reliability. At the end of the day, that’s the most important thing, is getting as many nines of reliability as you can.”

News: The past, present and future of IoT in physical security

It is impossible to compare where the IP camera industry stands today to where it stood 25 years ago without being impressed.

Martin Gren
Contributor

Co-founder of Axis Communications, Martin Gren is an entrepreneur and inventor of the first network camera.

When Axis Communications released the first internet protocol (IP) camera after the 1996 Olympic games in Atlanta, there was some initial confusion. Connected cameras weren’t something the market had been clamoring for, and many experts questioned whether they were even necessary.

Today, of course, traditional analog cameras have been almost completely phased out as organizations have recognized the tremendous advantage that IoT devices can offer, but that technology felt like a tremendous risk during those early days.

To say that things have changed since then would be a dramatic understatement. The growth of the Internet of Things (IoT) represents one of the ways physical security has evolved. Connected devices have become the norm, opening up exciting new possibilities that go far beyond recorded video. Further developments, such as the improvement and widespread acceptance of the IP camera, have helped power additional breakthroughs including improved analytics, increased processing power, and the growth of open-architecture technology. On the 25th anniversary of the initial launch of the IP camera, it is worth reflecting on how far the industry has come — and where it is likely to go from here.

Tech improvements herald the rise of IP cameras

Comparing today’s IP cameras to those available in 1996 is almost laughable. While they were certainly groundbreaking at the time, those early cameras could record just one frame every 17 seconds — quite a change from what cameras can do today.

But despite this drawback, those on the cutting edge of physical security understood what a monumental breakthrough the IP camera could represent. After all, creating a network of cameras would enable more effective remote monitoring, which — if the technology could scale — would enable them to deploy much larger systems, tying together disparate groups of cameras. Early applications might include watching oil fields, airport landing strips or remote cell phone towers. Better still, the technology had the potential to usher in an entirely new world of analytics capabilities.

Of course, better chipsets were needed to make that endless potential a reality. Groundbreaking or not, the limited frame rate of the early cameras was never going to be effective enough to drive widespread adoption of traditional surveillance applications. Solving this problem required a significant investment of resources, but before long these improved chipsets brought IP cameras from one frame every 17 seconds to 30 frames per second. Poor frame rate could no longer be listed as a justification for shunning IP cameras in favor of their analog cousins, and developers could begin to explore the devices’ analytics potential.

Perhaps the most important technological leap was the introduction of embedded Linux, which made IP cameras more practical from a developer point of view. During the 1990s, most devices used proprietary operating systems, which made them difficult to develop for.

Even within the companies themselves, proprietary systems meant that developers had to be trained on a specific technology, costing companies both time and money. There were a few attempts at standardization within the industry, such as the Wind River operating system, but these ultimately failed. They were too small, with limited resources behind them — and besides, a better solution already existed: Linux.

Linux offered a wide range of benefits, not the least of which was the ability to collaborate with other developers in the open source community. This was a road that ran two ways. Because most IP cameras lacked the hard disk necessary to run Linux, hardware known as JFFS was developed that would allow a device to use a Flash memory chip as a hard disk. That technology was contributed to the open source community, and while it is currently on its third iteration, it remains in widespread use today.

Compression technology represented a similar challenge, with the more prominent data compression models in the late ’90s and early 2000s poorly suited for video. At the time, video storage involved individual frames being stored one-by-one — a data storage nightmare. Fortunately, the H.264 compression format, which was designed with video in mind, became much more commonplace in 2009.

By the end of that year, more than 90% of IP cameras and most video management systems used the H.264 compression format. It is important to note that improvements in compression capabilities have also enabled manufacturers to improve their video resolution as well. Before the new compression format, video resolution had not changed since the ’60s with NTSC/PAL. Today, most cameras are capable of recording in high definition (HD).

1996: First IP camera is released.
2001: Edge-based analytics with video motion detection arrive.
2006: First downloadable, edge-based analytics become available.
2009: Full HD becomes the standard video resolution; H.264 compression goes mainstream.
2015: Smart compression revolutionizes video storage.

The growth of analytics

Analytics is not exactly a “new” technology — customers requested various analytics capabilities even in the early days of the IP camera — but it is one that has seen dramatic improvement. Although it might seem quaint by today’s high standards, video motion detection was one of the earliest analytics loaded onto IP cameras.

Customers needed a way to detect movement within certain parameters to avoid having a tree swaying in the wind, or a squirrel running by, trigger a false alarm. Further refinement of this type of detection and recognition technology has helped automate many aspects of physical security, triggering alerts when potentially suspicious activity is detected and ensuring that it is brought to human attention. By taking human fallibility out of the equation, analytics has turned video surveillance from a reactive tool to a proactive one.

Reliable motion detection remains one of the most widely used analytics, and while false alarms can never be entirely eliminated, modern improvements have made it a reliable way to detect potential intruders. Object detection is also growing in popularity and is increasingly capable of classifying cars, people, animals and other objects.

License plate recognition is popular in many countries (though less so in the United States), not just for identifying vehicles involved in criminal activity, but for uses as simple as parking recognition. Details like car model, shirt color or license plate number are easy for the human eye to miss or fail to notice — but thanks to modern analytics, that data is cataloged and stored for easy reference. The advent of technology like deep learning, which features better pattern recognition and object classification through improved labeling and categorization, will drive further advancements in this area of analytics.

The rise of analytics also helps highlight why the security industry has embraced open-architecture technology. Simply put, it is impossible for a single manufacturer to keep up with every application that its customers might need. By using open-architecture technology, they can empower those customers to seek out the solutions that are right for them, without the need to specifically tailor the device for certain use cases. Hospitals might look to add audio analytics to detect signs of patient distress; retail stores might focus on people counting or theft detection; law enforcement might focus on gunshot detection — with all of these applications housed within the same device model.

It is also important to note that the COVID-19 pandemic drove interesting new uses for both physical security devices and analytics — though some applications, such as using thermal cameras for fever measurement, proved difficult to implement with a high degree of accuracy. Within the healthcare industry, camera usage increased significantly — something that is unlikely to change. Hospitals have seen the benefit of cameras within patient rooms, with video and intercom technology enabling healthcare professionals to monitor and communicate with patients while maintaining a secure environment.

Even simple analytics like cross-line detection can generate an alert if a patient who is a fall risk attempts to leave a designated area, potentially reducing accidents and overall liability. The fact that analytics like this bear only a passing mention today highlights how far physical security has come since the early days of the IP camera.

Looking to the future of security

That said, an examination of today’s trends can provide a glimpse into what the future might hold for the security industry. For instance, video resolution will certainly continue to improve.

Ten years ago, the standard resolution for video surveillance was 720p (1 megapixel), and 10 years before that it was the analog NTSC/PAL resolution of 572×488, or 0.3 megapixels. Today, the standard resolution is 1080p (2 megapixels), and a healthy application of Moore’s law indicates that 10 years from now it will be 4K (8 megapixels).

As ever, the amount of storage that higher-resolution video generates is the limiting factor, and the development of smart storage technologies such as Zipstream has helped tremendously in recent years. We will likely see further improvements in smart storage and video compression that will help make higher-resolution video possible.

Cybersecurity will also be a growing concern for both manufacturers and end users.

Recently, one of Sweden’s largest retailers was shut down for a week because of a hack, and others will meet the same fate if they continue to use poorly secured devices. Any piece of software can contain a bug, but only developers and manufacturers committed to identifying and fixing these potential vulnerabilities can be considered reliable partners. Governments across the globe will likely pass new regulations mandating cybersecurity improvements, with California’s recent IoT protection law serving as an early indicator of what the industry can expect.

Finally, ethical behavior will continue to become more important. A growing number of companies have begun foregrounding their ethics policies, issuing guidelines for how they expect technology like facial recognition to be used — not abused.

While new regulations are coming, it’s important to remember that regulation always lags behind, and companies that wish to have a positive reputation will need to adhere to their own ethical guidelines. More and more consumers now list ethical considerations among their major concerns—especially in the wake of the COVID-19 pandemic—and today’s businesses will need to strongly consider how to broadcast and enforce responsible product use.

Change is always around the corner

Physical security has come a long way since the IP camera was introduced, but it is important to remember that these changes, while significant, took place over more than two decades. Changes take time — often more time than you might think. Still, it is impossible to compare where the industry stands today to where it stood 25 years ago without being impressed. The technology has evolved, end users’ needs have shifted, and even the major players in the industry have come and gone according to their ability to keep up with the times.

Change is inevitable, but careful observation of today’s trends and how they fit into today’s evolving security needs can help today’s developers and device manufacturers understand how to position themselves for the future. The pandemic highlighted the fact that today’s security devices can provide added value in ways that no one would have predicted just a few short years ago, further underscoring the importance of open communication, reliable customer support and ethical behavior.

As we move into the future, organizations that continue to prioritize these core values will be among the most successful.

News: Epic Games appeals last week’s ruling in antitrust battle with Apple

Fortnite maker Epic Games is appealing last week’s ruling in its court battle with Apple, where a federal judge said Apple would no longer be allowed to block developers from adding links to alternative payment mechanisms, but stopped short of dubbing Apple a monopolist. The latter would have allowed Epic Games to argue for alternative

Fortnite maker Epic Games is appealing last week’s ruling in its court battle with Apple, where a federal judge said Apple would no longer be allowed to block developers from adding links to alternative payment mechanisms, but stopped short of dubbing Apple a monopolist. The latter would have allowed Epic Games to argue for alternative means of serving its iOS user base, including perhaps, through third-party app stores or even sideloading capabilities built into Apple’s mobile operating system, similar to those on Google’s Android OS.

Apple immediately declared the court battle a victory, as the judge had agreed with its position that the company was “not in violation of antitrust law” and had also deemed Apple’s success in the app and gaming ecosystem as “not illegal.” Epic Games founder and CEO Tim Sweeney, meanwhile, said the ruling was not a win for either developers or consumers. On Twitter, he hinted that the company may appeal the decision when he said, “We will fight on.”

In a court filing published on Sunday (see below), Epic Games officially stated its attention to appeal U.S. District Judge Yvonne Gonzalez Rogers’ final judgment and “all orders leading to or producing that judgment.”

As part of the judge’s decision, Epic Games had been ordered to pay Apple the 30% of the $12 million it earned when it introduced its alternative payment system in Fortnite on iOS, which was then in breach of its legal contract with Apple.

The appellate court will revisit how Judge Gonzalez Rogers defined the market where Epic Games had argued Apple was acting as a monopolist. Contrary to both parties’ wishes, Gonzalez Rogers defined it as the market for “digital mobile gaming transactions” specifically. Though an appeal may or may not see the court shifting its opinion in Epic Games’ favor, a new ruling could potentially help to clarify the vague language used in the injunction to describe how Apple must now accommodate developers who want to point their customers to other payment mechanisms.

So far, the expectation floating around the developer community is that Apple will simply extend the “reader app” category exception to all non-reader apps (apps that provide access to purchased content). Apple recently settled with a Japanese regulator by agreeing to allow reader apps to point users to their own website where users could sign up and manage their accounts, which could include customers paying for subscriptions — like Netflix or Spotify subscriptions, for instance. Apple said this change would be global.

In briefings with reporters, Apple said the details of the injunction issued with the Epic Games ruling, however, would still need to be worked out. Given the recency of the decision, the company has not yet communicated with developers on how this change will impact them directly nor has it updated its App Store guidelines with new language.

Reached for comment, Epic Games said it does not have any further statements on its decision to appeal at this time.

News: BitSight raises $250M from Moody’s and acquires cyber risk startup VisibleRisk

BitSight, a startup that assesses the likelihood that an organization will be breached, has received a $250 million investment from credit rating giant Moody’s, and acquired Israeli cyber risk assessment startup VisibleRisk for an undisclosed sum. Boston-based BitSight says the investment from Moody’s, which has long warned that cyber risk can impact credit ratings, will

BitSight, a startup that assesses the likelihood that an organization will be breached, has received a $250 million investment from credit rating giant Moody’s, and acquired Israeli cyber risk assessment startup VisibleRisk for an undisclosed sum.

Boston-based BitSight says the investment from Moody’s, which has long warned that cyber risk can impact credit ratings, will enable it to create a cybersecurity risk platform, while the credit ratings giant said it plans to make use of BitSight’s cyber risk data and research across its integrated risk assessment product offerings.

The investment values BitSight at $2.4 billion and makes Moody’s the largest shareholder in the company.

“Creating transparency and enabling trust is at the core of Moody’s mission,” Moody’s president and CEO Rob Fauber said in a statement. “BitSight is the leader in the cybersecurity ratings space, and together we will help market participants across disciplines better understand, measure, and manage their cyber risks and translate that to the risk of cyber loss.”

Meanwhile, BitSight’s purchase of VisibleRisk, a cyber risk ratings joint venture created by Moody’s and Team8, brings in-depth cyber risk assessment capabilities to BitSight’s platform, enabling the startup to better analyze and calculate an organization’s financial exposure to cyber risk. VisibleRisk, which has raised $25 million to date, says its so-called “cyber ratings” are based on cyber risk quantification, which allows companies to benchmark their cyber risk against those of their peers, and to better understand and manage the impact of cyber threats to their businesses.

Following the acquisition, BitSight will also create a risk solutions division focused on delivering a suite of critical solutions and analytics serving stakeholders including chief risk officers, C-suite executives, and boards of directors. This division will be led by VisibleRisk co-founder and CEO Derek Vadala, who previously headed up Moody’s cyber risk group.

Steve Harvey, president and CEO of BitSight, said the company’s partnership with Moody’s and its acquisition of VisibleRisk will expand its reach to “help customers manage cyber risk in an increasingly digital world.”

BitSight was founded in 2011 and has raised a total of $155 million in outside funding, most recently closing a $60 million Series D round led by Warburg Pincus. The startup has just shy of 500 employees and more than 2,300 global customers, including government agencies, insurers and asset managers. 

News: What to make of Freshworks’ first IPO price range

It appears that Freshworks is pretty reasonably priced in its current range.

Two major private tech companies announced IPO price ranges this morning, with Toast targeting a market value of nearly $18 billion at the top end of its range and Freshworks looking to price its equity between $28 and $32 per share. TechCrunch calculates that the company would be worth around $8.9 billion at $32 per share, not employing a fully diluted share count.

Inclusive of shares represented by fully vested options and the like, Freshworks’ valuation could reach $9.6 billion, Renaissance Capital reports.

Unlike Toast, with a revenue mix including four distinct products, Freshworks is a more straightforward software company. That means we can do much more interesting work to understand its valuation. So, this morning, let’s unpack how Freshworks is considering valuing itself in its IPO at its present range, look at some market comps, and come to a conclusion regarding whether or not we expect the unicorn to raise its valuation before it floats.

Lies, damned lies and revenue multiples

As a refresher, in the first half of 2021 (Q1 and Q2), Freshworks posted revenues of $168.9 million. That annualizes to $337.9 million, thanks to numerical rounding.

At a valuation of $9.6 billion — recall that simple IPO valuations for the company and lower share-price points from its IPO range generate lower valuations and therefore more conservative multiples than what we’ll be discussing here — Freshworks would be worth 28.4x its current revenue run rate, set during H1 2021.

News: SpotOn raises $300M at a $3.15B valuation and acquires Appetize

Last year at this time, SpotOn was on the brink of announcing a $60 million Series C funding round at a $625 million valuation. Fast forward to almost exactly one year later, and a lot has changed for the payments and software startup. Today, SpotOn said it has closed on $300 million in Series E

Last year at this time, SpotOn was on the brink of announcing a $60 million Series C funding round at a $625 million valuation.

Fast forward to almost exactly one year later, and a lot has changed for the payments and software startup.

Today, SpotOn said it has closed on $300 million in Series E financing that values the company at $3.15 billion — more than 5x of its valuation at the time of its Series C round, and significantly higher than its $1.875 billion valuation in May (yes, just three and a half months ago) when it raised $125 million in a Series D funding event.

Andreessen Horowitz (a16z) led both the Series D and E rounds for the company, which says it has seen 100% growth year over year and a tripling in revenue over the past 18 months. Existing investors DST Global, 01 Advisors, Dragoneer Investment Group, Franklin Templeton and Mubadala Investment Company too doubled down on their investments in SpotOn, joining new backers Wellington Management and Coatue Management. Advisors Douglas Merritt, CEO of Splunk, and Mike Scarpelli, CFO of Snowflake, also made individual investments as angels. With the new capital, SpotOn has raised $628 million since its inception.

The latest investment is being used to finance the acquisition of another company in the space — Appetize, a digital and mobile commerce payments platform for enterprises such as sports and entertainment venues, theme parks and zoos. SpotOn is paying $415 million in cash and stock for the Los Angeles-based company.

Since its 2017 inception, SpotOn has been focused on providing software and payments technology to SMBs with an emphasis on restaurants and retail businesses. The acquisition of Appetize extends SpotOn’s reach to the enterprise space in a major way. Appetize will go to market as SpotOn and will work to grow its client base, which already includes an impressive list of companies and organizations including Live Nation, LSU, Dodger Stadium and Urban Air. 

In fact, Appetize currently covers 65% of all major league sports stadiums, specializing in contactless payments, mobile ordering and menu management. So for example, when you’re ordering food at a game or concert, Appetize’s technology makes it easier to pay in a variety of contactless ways through point of sale (POS) devices, self-service kiosks, handheld devices, online ordering, mobile web and API integrations.

Image Credits: SpotOn

SpotOn is taking on the likes of Square in the payments space. But the company says its offering extends beyond traditional payment processing and point-of-sale software. Its platform aims to give SMBs the ability to run their businesses “from building a brand to taking payments and everything in between.” SpotOn’s goal is to be a “one-stop shop” by incorporating tools that include things such as custom website development, scheduling software, marketing, appointment scheduling, review management, analytics and digital loyalty.

The combined company will have 1,600 employees — 1,300 from SpotOn and 300 from Appetize. SpotOn will now have over 500 employees on its product and technology team, according to co-founder and co-CEO Zach Hyman. It will also have clients in the tens of thousands, a number that SpotOn says is growing by “thousands more every month.”

The acquisition is not the first for SpotOn, which also acquired SeatNinja last year and Emagine in 2018.

But in Appetize it saw a company that was complementary both in its go-to-market and tech stacks, and a “natural fit.”

“SMEs are going to benefit from the scalable tech that can grow with them, including things like kiosks and offline modes, and for the enterprise clients of Appetize, they’re going to be able to leverage products like sophisticated loyalty programs and extended marketing capabilities,” Hyman told TechCrunch. 

SpotOn was not necessarily planning to raise another round so soon, Hyman added, but the opportunity came up to acquire Appetize.

“We spent a lot of time together, and it was too compelling to pass up,” he told TechCrunch.

For its part, Appetize — which has raised over $77 million over its lifetime, according to Crunchbase — too saw the combination as a logical one.

“It was important to us to retain a stake in the business. We were not looking to cash out,” said Appetize CEO Max Roper. “We are deeply invested in growing the business together. It’s a big win for our team and our clients over the long term. This is a rocketship that we are excited to be on.” 

No doubt that the COVID-19 pandemic only emphasized the need for more digital offerings from small businesses to enterprises alike.

“There has been a high demand for our services and now as businesses are faced with a Covid resurgence, no one is closing down,” Hyman said. “So they see a responsibility to install the necessary technology to properly run their business.”

One of the moves SpotOn has made, for example, is launching a vaccination alert system in its reservation management software platform to make it easier for consumers to confirm they are vaccinated for cities and states that have those requirements.

Clearly, a16z General Partner David George too was bullish on the idea of a combined company.

He told TechCrunch that the two companies fit together “extremely nicely.”

“It felt like a no-brainer for us to want to lead the round, and continue to support them,” George said.

Since first investing in SpotOn in May, the startup’s growth has “exceeded” a16z’s expectations, he added.

“When companies are growing as fast as it is organically, they don’t need to rely on acquisitions to fuel growth,” he said. “But the strategic rationale here is so strong, that the acquisition will only turbocharge what is already high growth.”

While the Series E capital is primarily funding the acquisition, SpotOn continues to double down on its product and technology.

“This is our time to shine and invest in the future with forward thinking technology,” Hyman told TechCrunch. “We’re thinking about things like how are consumers going to be ordering their beer at a Dodgers game in three years? Are they going to be standing in line for 25 minutes or are they going to be interacting and buying merchandise in other unique ways? Those are the things we’re looking to solve for.”

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