Tag Archives: Blog

News: Solid Power expands production capacity to deliver test batteries to BMW, Ford in 2022

• September 7, 2021
• by:   
• in:  Blog 
• note:  no comments 

Solid Power, a battery developer backed by Ford and BMW, is expanding its Colorado-based factory footprint as it prepares pilot production of its solid state batteries early next year. The new production facility will be dedicated to manufacturing one of the company’s flagship products, a sulfide-based solid electrolyte material, by up to 25 times its

Solid Power, a battery developer backed by Ford and BMW, is expanding its Colorado-based factory footprint as it prepares pilot production of its solid state batteries early next year.

The new production facility will be dedicated to manufacturing one of the company’s flagship products, a sulfide-based solid electrolyte material, by up to 25 times its current output. The new facility will also make room for the first pilot production line of its commercial-grade, 100 ampere battery cells. Those pouch cells are expected to go to Ford and BMW for automotive testing in early 2022, with the aim of getting them into driver-ready vehicles by the latter half of the decade.

Solid state batteries have long been considered the next breakthrough in battery technology. They lack a liquid electrolyte, the material that moves ions between the cathode and anode in traditional lithium-ion batteries, as TechCrunch writer Mark Harris has explained. The gains from such technology, SSB developers say, include increased energy density, reduced costs and a superior battery life expectancy.

Developers also say they’re safer – an important consideration in light of incidents like GM’s three-times recall of Chevrolet Bolt vehicles due to fire risk. It’s the liquid electrolyte that serves as “the spark that leads to thermal runaway,” Solid Power CEO Doug Campbell told TechCrunch. “We believe very strongly that these issues that both Hyundai and GM are now facing would be addressed with a solid-state battery.”

While the startup will be building out a new battery cell pilot production line, Solid Power’s ultimate plan is to eventually only produce the electrolyte material and license out the cell to OEMs and battery manufacturers.

“Long term, we’re a materials company,” Campbell said. “We want to be the industry leader in solid electrolyte materials.” To that end, this current expansion to cell production will likely be the company’s last, he said. The forthcoming pilot production line will produce enough to supply multiple OEMs with cells for automotive qualification testing, with the intent of larger production scales being undertaken by automakers and battery cell producers.

The decision to license the battery cells to partners, rather than produce them all in-house, is an asset-light model born from commonsense, he added.

“Let’s face it, what’s the probability that little Solid Power is going to grow up and displace the likes of Panasonic, LG, CATL?” While some companies are attempting it, like Sweden’s Northvolt, Campbell added that the material business margins are higher and don’t include direct competitors that are all but behemoths. “It’s capital-light, but it’s also realistic.”

The startup said in June it would go public via a $1.2 billion reverse merger with blank-check firm Decarbonization Plus Acquisition Corp. III. The transaction, which is anticipated to generate around $600 million in cash, should give the company enough funds through 2026 or 2027, Campbell said.

The company will need plenty of capital to take it through the rest of the decade, especially as it aims to produce enough electrolyte material to support 10 gigawatt-hour annual cell capacity by 2207. For that, it’ll need “orders of magnitude” more electrolyte production capacity than was even announced today (which is itself an order of magnitude increase), Campbell said.

Solid Power doesn’t even plan on stopping at electrolyte production. Campbell hinted that the company is also at work developing a low-cost cathode material – one that contains no nickel or cobalt, two of the costliest raw battery materials.

“[The industry] is going to be dominated by the cost of materials and the cost of materials is going to be dominated by the cost of that nickel- and cobalt-containing cathode material,” he said. “This particular chemistry that we’ll be disclosing later this year is extremely low cost, we’re talking 1/20th, 1/30th the cost of today’s [nickel manganese cobalt cathodes].”

News: Locals share why Vilnius, Lithuania is becoming an international startup hub

• September 7, 2021
• by:   
• in:  Blog 
• note:  no comments 

There are plenty of reasons why Vilnius, Lithuania’s capital city, has an increasingly visible startup sector.

There are plenty of reasons why Vilnius, Lithuania’s capital city, has an increasingly visible startup sector. The country’s startup-friendly regulatory environment, a beautiful medieval town center, over 20 business hubs and accelerators and strong rankings in intellectual property production are most obvious at a high level. But what are the locals excited about on the ground?

Our survey respondents said the city was strong across a broad range of tech industries, particularly those with practical applications: cybersecurity, energy and sustainability, fintech, health care and medtech, edtech and silver tech among others.

Respondents said the effect of the pandemic on working practices would mean that many expats would be moving back to the city, which is affordable, and more foreign companies are relocating there due to favorable government policies, although “rental prices are going through the roof.”

In addition, the oppressive regime in nearby Belarus has provided an influx of significant tech companies, such as Wargaming, as well as the associated talent.

In five years, respondents said the city and country will continue to generate and attract great tech startups, but also tech talent and entrepreneurs. However, one said: “The ecosystem still lacks local funding for the late Series A and beyond rounds.”

We surveyed:

• Gerda Sakalauskaitė, managing director, The Lithuanian Private Equity and Venture Capital Association

• Lukas Inokaitis, business development, NFQ Technologies

• Andrius Milinavicius, founder, Baltic Sandbox

• Gytenis Galkis, partner, 70V

• Gabriele Poteliunaite, associate, Change Ventures

• Rokas Tamošiūnas, partner, Open Circle Capital

• Donatas Keras, founding partner, Practica Capital

• Tomas Martunas, founding partner, Iron Wolf Capital

• Alex Gibb, partner, Katalista Ventures

• Jone Vaituleviciute, partner, Startup Wise Guys

• Lukas Kaminskis, CEO, Turing College

---

Gerda Sakalauskaitė, managing director, The Lithuanian Private Equity and Venture Capital Association

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
The Vilnius startup ecosystem is mainly dominated by startups developing business management systems (B2B, SaaS) and financial technologies. Vilnius is becoming a solid hot spot of fintech companies in Europe having more than 200 fintech companies established here. Other growing industries would be deep tech, life sciences, mobility, and the game industry.

Which are the most interesting startups in your city?
Vinted (first Lithuanian unicorn, secondhand fashion online marketplace which raised €128 million in an equity funding round, valuing the company at over €1 billion in 2019).
Other notable startups: NordVPN, CGTrader, TransferGo, Trafi, Kilo Health, CityBee, Brolis Semiconductors, PIXEVIA, Oxipit.
Rising stars that also should be looked at: PVcase, Droplet Genomics, ZITICITY.

What are the tech investors like? What is the investment scene like in your city? What’s their focus?
I think local tech investors are taking more risks and becoming global scene players. Investors had their 10 years of market experience and now they are ready to invest into ideas and businesses that would change the global scene or even tackle issues as complex as they come — environmental, biotechnology or deep tech industries. Moreover, the local investor community is quite dynamic. We seek to have our investor landscape as diverse as possible, so we are working toward gender equality in VC and other important diversity causes to accomplish that.

With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
I think COVID-19 created more opportunities for Vilnius than risks in this regard. The coronavirus crisis, in general, hasn’t affected the Vilnius startup ecosystem in the same way as the rest of Europe. In addition, Vilnius has made headlines worldwide with its creative solutions to tackle the pandemic challenges. For instance, Vilnius became one large open air cafe. This shows Vilnius being a quirky, hip and interesting city to live in, so we are expecting more expats to lay their eyes on Vilnius. Especially expats from our Eastern neighbors who are negatively affected by an ongoing political crisis (Belarus).

Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Founders:
Justas Janauskas, Milda Mitkutė, Mantas Mikuckas (Vinted)
Henrikas Urbonas, Simona Andrijauskaitė (Interactio)
Dalia Lašaite (CGTrader)
Tomas Okmanas, Eimantas Sabaliauskas (Tesonet)
Tadas Burgaila (Kilo Health)
Daumantas Dvilinskas (TransferGo; Forbes 30 under 30)
Martynas Gudonavičius (Trafi)
VC investors:
Rokas Peciulaitis (Contrarian Ventures)
Donatas Keras (Practica Capital), Arvydas Bložė (Practica Capital)
Jone Vaituleviciute, Dmitrij Susunov (Startup Wise Guys)
Kasparas Jurgelionis (Iron Wolf Capital)
Gytenis Galkis (70Ventures)
Viktorija Vaitkevičienė (Coinvest)
Legal experts:
Rūta Armone (Ellex)
Akvilė Bosaite (COBALT Legal)
Eva Suduiko (COBALT Legal)
Mantas Petkevičius (Sorainen)
Laimonas Skibarka (Sorainen)
Linas Sabaliauskas (TRINITI JUREX)
Andrius Ivanauskas (GLIMSTEDT)

Where do you see your city’s tech scene in five years?
Vilnius will definitely gain momentum as the tech startup city of the region. The number of startup people they employ will grow exponentially. We will have one or two extra unicorns born here. And of course quite more foreign talent coming to Vilnius to work in startups!

Lukas Inokaitis, business development, NFQ Technologies

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
Mobility, fintech, energy, cybersecurity, healthcare. Weak in AI, data science.

Which are the most interesting startups in your city?
Vinted, Tesonet, Kilo Health, Pored Banda, Hostinger.

What are the tech investors like? What is the investment scene like in your city? What’s their focus?

Local and with small funds, mostly subsidized by government and EU. Need large private ones and more angel investors.

With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
The city [has been] growing for a decade each year. No reason to slow down as more international talent is moving to Vilnius from other EU and Asian countries.

Where do you see your city’s tech scene in five years?
One-two unicorns every year and leading EU in fintech, mobility and energy.

Andrius Milinavicius, founder, Baltic Sandbox

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
Sustainability, silver tech, women in tech.

Which are the most interesting startups in your city?
Tesonet (NordVPN), Vinted, Traffi, Kilo Health.

What are the tech investors like? What is the investment scene like in your city? What’s their focus?

Deep tech, SaaS, sustainability.

With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
Everyone stays. Vilnius is a very green and vibrant ecosystem, with multiple co-working [locations] and easy access to forests, parks and nearby lakes.

Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?

Many of them, starting from Contrarian Ventures — Rokas Peciulaitis, Practica Capital — Arvydas Bloze, continuing to Tesonet co-founder — Tomas Okmanas, Eimantas Sabaliauskas, followed with Kilo Health — Tadas Burgaila and more.

Where do you see your city’s tech scene in five years?
4x at least. Very rapid growth

---

Help TechCrunch find the best growth marketers for startups.

Provide a recommendation in this quick survey and we’ll share the results with everybody.

---

Gytenis Galkis, partner, 70V

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
1. Lithuania is now fourth in the global fintech ranking after the U,S,, the U,K, and Singapore.
2. Lithuania’s life sciences sector is gaining prominence.
3. Life sciences companies in Lithuania are among the most profitable in the country, with 90% of their output exported worldwide, yet the market remains unsaturated. Lithuania is 16th in the Global Innovation in Biotechnology ranking according to Scientific American WORLDVIEW international biotechnology ranking 2019.

According to McKinsey study on B2B startups, Lithuania’s B2B startups generate more value per funding than the U.S. and other European counterparts, resulting in the highest capital efficiency in the region!

Which are the most interesting startups in your city?
Larger ones would be: Vinted, Tesonet, Kilo Health, Bored Panda, Brolis Semiconductors, Cujo. Interactio recently has raised a $31 million Series A round — the largest ever Series A for a company headquartered in the Baltics. Upcoming stars: Whatagraph, Ondato, ZITICITY, Eneba, Robolabs, CAST AI, Foros, Billo, Biomatter Designs, #walk15, Boommio.

What are the tech investors like? What is the investment scene like in your city? What’s their focus?

The tech investment ecosystem has been evolving very rapidly during the past five years. The early-stage companies are able to get funding from the Lithuanian Business Angel Network (LitBAN), which unites over 150 active private investors. Coinvest Capital invests along angel investors and provides them lucrative leverage. This is how the Lithuanian government supports the angel ecosystem. Then there are two active accelerators — 70V (Revenue Accelerator) and Startup Wise Guys providing funding in the pre-seed/seed stages. Other local funds — Practica Capital, Iron Wolf Capital, Verslo Angelu Fondas and Open Circle Capital provide seed and Series A funding. The ecosystem still lacks local funding for the late series A and beyond rounds. Most of it is covered by foreign funds. The local ecosystem is too small to have a specific focus. However, I’d say that a lot of focus goes to B2B/enterprise software.

With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
Since 2012 Vilnius’ population has been steadily growing 0.3% every year. I believe that during COVID and events related to Belarus have even further boosted the growth of Vilnius, especially in terms of the tech ecosystem. There had been major moves from Minsk to Vilnius. For example, Wargaming has moved a significant amount of their employees with families to Vilnius and even bought 76 luxury flats in downtown Vilnius. Other Belarusian companies are following. Furthermore, Vilnius is one of the greenest capitals in Europe with a unique medieval old town, which makes it one of the coziest places to live. It is estimated that Lithuania still lacks over 10,000 tech talents, which could be a great opportunity for savvy explorers to join the rapidly growing tech scene!

Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Vilnius is a small town and it is well connected, there are a lot of people that made this ecosystem flourish. Just to name a few: Jean-Baptiste Daguenè, Donatas Keras, Mantas Mikuckas, Tomas Okmanas, Rita Sakus, Vladas Lašas, Viktorija Vaitkevičienė, Tomas Martunas, Dmitrij Sosunov, Evaldas Remeikis, Evaldas Petraitis, and many more that I should mention.

Where do you see your city’s tech scene in five years?
I strongly believe that Vilnius will further expand on its unique angle of tech entrepreneurship. I strongly estimate further growth in fintech, life sciences and B2B ecosystem. In my vision, I believe exports driven by Lithuanian startups will at least double within the next five years while bringing a few new unicorns.

Gabriele Poteliunaite, associate, Change Ventures

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
Well, probably most people will give the same answer, but Vilnius is huge on fintech. However, I would also go on to highlight other prospering sectors, such as edtech, AI-driven companies, medtech, energy tech — you name it … There are numerous sectors that we are quite strong in. As a generalist investor, we are mostly excited about driven and passionate founders. This brings me to another point that I would say the weakest link of the ecosystem is lack of entrepreneurial training and lack of educational initiatives inspiring youngsters (and not only) to go on to found their own companies and take risks. Risk aversiveness is the key weakness here. We are still lacking huge success stories, but this is slowly changing (Vinted, Tesonet).

Which are the most interesting startups in your city?
Interactio, Vinted, Memby and so many others — could go on listing them for days.

What are the tech investors like? What is the investment scene like in your city? What’s their focus?

As it is a very tight-knit community, local tech investors are very collaborative and helpful with each other and entrepreneurs. However, I would say the main areas local investors still need to improve on is internationalizing and diversifying their investment teams (it’s 2021 already) and discouraging founders to be aggressive in their expansion to foreign markets and thinking globally very early on. Most investors are generalists, focusing on all three Baltic countries and doing mostly seed investments in software (some hardware) B2B companies.

With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
STAY and MOVE IN — no question there! I think COVID-19 pandemic has been a great stimulus for most expats — including myself, to move back to Vilnius and join forces in building this flourishing ecosystem. As far as I can tell, most people will stay, (rental prices are going through the roof) and more foreign companies are relocating here due to very favorable policies.

Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Ugh, so many great people to highlight … which is obviously a sign that Vilnius has simply an overwhelming number of absolute stars! (Not a biased opinion obviously.)

Where do you see your city’s tech scene in five years?
I would venture to say something as daring as Vilnius becoming the global leader in generating and attracting not only world-class tech startups, but also tech talent and outstanding entrepreneurs. I might be getting a tad too excited, but I see so much authenticity in this region — and if we manage to cherish it, we may go really far!

Rokas Tamošiūnas, partner, Open Circle Capital

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
Strong: Marketplaces, fintech, life sciences, tech diversity (prop, fin, gov, mobility, AI). Weak: Internationalization, sales, marketing.

Which are the most interesting startups in your city?
Vinted, Tesonet, Traffi, Omnisend, Billo, Whatagraph.

What are the tech investors like? What is the investment scene like in your city? What’s their focus?

We have some generalists (Practica Capital), deep tech (Open Circle Capital and Iron Wolf Capital), green/energy (Contrarian Ventures) and accelerators (70ventures and Startup Wise Guys).
Investors are still early pre-seed/seed but are gradually maturing up. ICT (especially AI) still dominates, but other areas, such as photonics (lasers), new space and others.

With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
Gradually everyone moved to full remove in the tech community. Now people are back in offices (and mostly enjoying it), but I think most companies will do a mixed model from now on. Remote working did a lot of good in recognizing virtual teams and especially teams that have members based in different countries.

Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Top are startup founders like J. Janauskas from Vinted, T. Okman from Tesonet, R. Lauris from Omnisend.

Where do you see your city’s tech scene in five years?
We are going on a patch of diversity — dozens of microecosystems of different tech. I think we will have a very colorful scene in a few years.

Donatas Keras, founding partner, Practica Capital

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
As our young tech ecosystem matures, we can see an increasing number of startups from different industry sectors that are founded and headquartered in Vilnius are becoming global leaders in their categories. If we look more closely at specific industries, I would highlight:
Marketplaces (Vinted, CGTrader, Ovoko); cybersecurity (NordVPN); fintech (TransferGo, Ondato, Revolut EU headquarters); gaming (Nordcurrent, Game Insight, Wargaming); mobility (Trafi, ZITICITY); biotechnology (Biomatter Designs, Droplet Genomics); space (NanoAvionics); health tech (Kilo Health, Oxipit).
The strengths of our tech ecosystem are the fast growth of startups, global first mindset, seek for innovation and the resilience of the founders. And these are some of the things that excite me as an investor. Of course, with such fast growth, we can already see increasing competition for local talent. That can be considered as a weakness, which should be addressed right now at the state level.

Which are the most interesting startups in your city?
The most notable startups are – Vinted (The first Lithuanian unicorn), NordVPN, CGTrader, Interactio, TransferGo, Trafi, Kilo Health, CarVertical, Omnisend and many more. But I would also like to mention some of the rising stars that we should not overlook: Ondato, Ovoko, Biomatter Designs, Droplet Genomics, ZITICITY.

What are the tech investors like? What is the investment scene like in your city? What’s their focus?

The investment scene shows the same signs of maturing as the whole ecosystem. And that is noticeable at all investment stages. It seems that now we are starting to “pick the fruits” of 10 years of hard work — companies becoming much more fundable, and investors tend to take risks and are more ready to do so. Business angels are becoming more active than ever, with 100+ deals made per year. And if a few years back the majority were experienced entrepreneurs of the so-called “old economy,” now an increasing number of tech entrepreneurs are picking up and investing in new startups at the very early stage. Business accelerators and pre-seed funds also playing an important role in the development of the ecosystem. They are mostly backed by the government and became very active in the last 3-4 years. Most notable: 70ventures, Startup Wise Guys, Baltic Sandbox.
Venture capital has around 10+ years of history in Vilnius and Lithuania. First, it was stimulated by EIF and the state money, now it’s picking up strongly and plays a crucial role in startups development at an early stage.
Most notable VCs:
Practica Capital is one of the most experienced and most active VCs in Vilnius and the whole region. With 10+ years of history, it grew together with the ecosystem, startups and the founders right from the start. The most notable deals are — Interactio, TransferGo, CGTrader, Trafi, Eneba, PVcase. The team has a high level of know-how and proven record in fintech, mobility, SaaS, marketplaces.
Open Circle Capital and Iron Wolf Capital are first-time funds, both active and doing a good job.
Contrarian Ventures is a small but active “green” tech-focused VC making a noticeable mark in the development of the ecosystem too.
Regional and international colleagues are also present at the events and co-investing quite actively with local investors (Karma Ventures, Trind VC, Change Ventures, Tera VC, ZGI and global powerhouses such as Intel, Accel, Creandum, Insight Venture Partners, Inreach).
Most of the VCs are generalists and looking into a broad spectrum of startups active in different sectors, with a few exceptions. Of course, some of the investors have a better-proven record in some categories than others.

With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
Lithuania is a small country, and Vilnius being the capital city, is still the center of attraction of everything in the country, and talent is not an exception. With further development and growth of the tech ecosystem, even more talent will be drawn to Vilnius. It is a great city to live in, work and build global tech companies.

Where do you see your city’s tech scene in five years?
We will have more than five unicorns born/raised here, and Vilnius will become one of the European “hot spots” for tech investing. The tech ecosystem will grow at least three times. Vilnius will become a center of attraction for talent from all the region, CIS and other parts of Europe.

Tomas Martunas, founding partner, Iron Wolf Capital

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
Lithuania, and especially Vilnius, has established a very strong position in fintech being the No. 4 in Global Fintech Ranking. Vilnius has created a favorable environment for fintech startups to be established and developed, and managed to attract one of the largest fintech players, Revolut. Vilnius is also especially advanced in the laser industry. While lasers constitute only a small part of Lithuania’s export, their quality is making the country famous around the world. It is very exciting as the demand for lasers is forecasted to only increase. We believe that Lithuania’s laser industry has a very positive outlook and thus, we invested in laser manufacturer Litilit. Vilnius also boasts many strong SaaS startups with, for example, Interactio, which recently raised $30 million after seeing 12x growth between 2019 and 2020. I believe there is still a lot of untapped potential in deep tech and edtech in the Vilnius ecosystem and it is starting to uncover. With the Wargaming office opening, also together with the Unity branch, Game Insights office and independent game studios, the gaming cluster has good fundamentals to blossom.

Which are the most interesting startups in your city?
Vinted, Tesonet, Turing College, Omnisend, Millo Appliances, NanoAvionics, Pixevia, Monimoto, Redtrack.io, Interactio, Litilit, Foros.

What are the tech investors like? What is the investment scene like in your city? What’s their focus?

First, there are significant sums of EU funding available for early-stage startups, especially for the ones having a strong technical foundation and innovative solutions. Overall, the Vilnius ecosystem has grown significantly over the past five years with many more VCs being established, a strong business angels network (LitBAN), accelerators launched and more focus dedicated to early stage and bolder investment ideas.
Many investors remain focused on the Baltics and CEE and still have some way to go to establish more global mindsets that are more prevalent in Nordics and Western Europe. But the Vilnius ecosystem is still growing and more foreign investors entering shows the attractiveness of the ecosystem in this way also providing founders with more opportunities.

With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
Vilnius is a very attractive destination. It boasts affordable housing (which many European capitals cannot offer), and when COVID-19 is reshaping our lives to remote work becoming a standard, many people will move out of expensive cities to more affordable ones, such as Vilnius. Also, it is an innovative city that has advanced a lot to easily compare with other European capitals (and overtake some of them) in terms of standard of living and career opportunities.

Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Mantas Mikuckas, Tomas Okmanas, Eimantas Sabaliauskas, Toma Sabaliauskiene, Rytis Lauris, Vladas Lašas, Rita Sakus, Tadas Burgaila, Inga Langaitė, Roberta Rudokiene and of course Iron Wolf Capital founders 😉

Where do you see your city’s tech scene in five years?
I believe that Vilnius will continue on growing and advancing to become one of the key European startup hubs. With favorable business conditions and a good standard of living it is expected to attract more talents who will contribute to fostering the ecosystem. However, Lithuania is already experiencing a brain drain and should take some special efforts to bring talents back and retain them.

Alex Gibb, partner, Katalista Ventures

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
We’ve seen an explosion of companies offshoring from Scandinavia over the past 10+ years in LT, which has led to the growth of competence centers and specialist R&D facilities for intangible services. I’m excited by the tech sector’s growth, which is primarily software, development and engineering.  We’re too small to really have specific sectors but lasers have a trusted pedigree in LT.

Which are the most interesting startups in your city?
Cogastro is servicing insect farms with CRM systems — that’s pretty original and niche! Bored Panda was No. 1 on the App Store last year and continues to boom, Tinggly (disclosure — I’m a co-founder) is growing again rapidly after COVID, serving the U.S. market primarily. Vinted is of course head and shoulders above the others — both in valuation terms, but also the positive impact on recycling and reusing.

What are the tech investors like? What is the investment scene like in your city? What’s their focus?

We have a growing angel network with LitBAN that is boosted by the government’s co-invest fund — which recently facilitated a 34x return for early investors in Interactio. There is a good range of early-stage VCs in town, the gap comes in the 2 million+ space where startups need to go abroad for deeper pockets. The focus tends to be B2B but as we’re a small geography there are very few investors with a tight sector focus.

With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
Move in! Vilnius is a compact and cool city [with a] high quality of life here and [it’s] easy to get out to the lakes and forests to relax. I still think we’re figuring out the hybrid nature of work from here onward, so people will mix and match to what suits their lifestyles. The positive shift is more power to employees and employers taking into account what employees need for positive mental health.

Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Greta Monstavice, CEO at Katalista Ventures — she’s top of the tree on all things sustainability related and passionate about empowering startups. JB Daguené at 70V is powering B2B startups with explosive growth tools. Sarune Smalakyte, head of Rockit, is nurturing fintech companies at their co-working space and blasting out many great (free) events for the community.

Where do you see your city’s tech scene in five years?
I’m excited about the city’s prospects. We have a lot ahead of us with many new startups coming through. The key challenge will be to get the next generation of tech talent trained properly and ready for the demands of an already squeezed workforce.

Jone Vaituleviciute, partner, Startup Wise Guys

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
Vilnius is of course known on a global scale for its fintech ecosystem — though the majority of fintech “perks” come on a governmental/country level, Vilnius boasts a high number of banking, insurance and other financial services professionals, as well as fintech-focused startup hubs and a number of events. I am particularly excited to see a number of big foreign names (e.g., Revolut, SumUp and many other) moving their operations here; this way building up the ecosystem and level of fintech professionals. Gaming, edtech are also a few other up-and-coming areas, which signals that B2C is becoming more usual than not. On the improvement side, we still have not figured out how to include deep tech/R&D startups into the ecosystem and funding mechanisms. This is a challenge many cities have, but we hope Vilnius will move to the right direction, thanks to collaborations among universities and venture capital funds.

Which are the most interesting startups in your city?
Well-known names: Vinted, Trafi, TransferGo and several not backed by venture capital — Bored Panda, Kilo Health.
Up-and-coming: ZITICITY (mobility), kevin. (fintech), Ondato (fintech), Turing College (edtech).

What are the tech investors like? What is the investment scene like in your city? What’s their focus?

Vilnius is a good representation of all Baltic venture capital ecosystems. We have several pre-seed/seed stage venture capital funds that are coming in with experience and good understanding of various verticals. However, for a long time we lacked a proper early-stage funding ecosystem. This is changing right now with accelerators supporting idea-stage startups and a number of business angels appearing from successful startups who are ready to invest decent tickets resembling more Western Europe rather than Baltic funding trends.
With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
I believe the pandemic has been rather favorable for small ecosystems like Vilnius. Mainly because remote investing/pitching/selling became an absolute norm and founders do not have to fly hundreds of miles for an event or a meeting to close a deal. Thus, I see many entrepreneurs sticking to Vilnius due to its great life quality and well-knitted ecosystem.

Where do you see your city’s tech scene in five years?
We should be talking pre-seed/seed on the same level as West Europe or even the U.S. We are catching up with the standard, but with the maturity of the venture capital ecosystem, Vilnius should be a perfect city to kick-start your startup and take it to Series A with the same funding available. We should see more areas like fintech emerging with strong value proposition for foreign companies as well as initiatives for local ones to stay. Talent will be expensive, but this is how it should be. Second- and third-time founders will be creating more and more startups that will attract a number of foreign funds too.

Lukas Kaminskis, CEO, Turing College

What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
Vilnius is well known for its fintech and blockchain ecosystems — companies such as Revolut have banking licenses registered here in Vilnius. We have several strong players in medtech and cybersecurity — Kilo Health and Nord Security — which are growing super fast. Nevertheless, we’re lacking behind with education. Explicitly speaking, most IT programs in Lithuanian universities aren’t focused on preparing students for international competition. This is why a lot of companies are establishing their internal academies to upskill students from universities.

Which are the most interesting startups in your city?
Omnisend, Nord Security, Attention Insight, Turing College.

What are the tech investors like? What is the investment scene like in your city? What’s their focus?

Lithuania has quite a good pre-seed/seed investment scene with investors like Iron Wolf Capital, Startup Wise Guys, Practica Capital, etc. Moreover, there is a VC fund — Co-invest Fund, which invests the sum equivalent to the multiplier of any accredited angel investor’s investment sum by 3x-5x. Investors in Lithuania are mostly industry agnostic.

With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out, or will others move in?
Tendencies in Lithuania are quite similar to the ones we see in the global scene. Companies plan to adapt hybrid type of work post-COVID, while maintaining remote type of work as primary while the pandemic is happening.

Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Giedrius Kolesnikovas is the guy to know from the legal industry — he is the partner of Motieka & Audzevicius legal firm. From the investor’s perspective, there are several of them — Jone Vaituleviciute, Rytis Vitkauskas, Kasparas Jurgelionis and Arvydas Bložė. These guys can open doors to most of European/U.S. capitals.

Where do you see your city’s tech scene in five years?
I see that Vilnius will become a tech talent center of Northern Europe. Edtech startups and private training initiatives are emerging in our market to solve educational problems that we face because of the poor performance of public education policies in the last 20 years. As well, I see that the current government is making a huge effort to attract international tech companies to establish their branches here in Lithuania. Great examples are Wargaming, Moody’s, which established huge centers here in Lithuania.

News: Microsoft launches a personalized news service, Microsoft Start

• September 7, 2021
• by:   
• in:  Blog 
• note:  no comments 

Microsoft today is introducing its own personalized news reading experience called Microsoft Start, available as both a website and mobile app, in addition to being integrated with other Microsoft products, including Windows 10 and 11 and its Microsoft Edge web browser. The feed will combine content from news publishers, but in a way that’s tailored

Microsoft today is introducing its own personalized news reading experience called Microsoft Start, available as both a website and mobile app, in addition to being integrated with other Microsoft products, including Windows 10 and 11 and its Microsoft Edge web browser. The feed will combine content from news publishers, but in a way that’s tailored to users’ individual interests, the company says — a customization system that could help Microsoft to better compete with the news reading experiences offered by rivals like Apple or Google, as well as popular third-party apps like Flipboard or SmartNews.

Microsoft says the product builds on the company’s legacy with online and mobile consumer services like MSN and Microsoft News. However, it won’t replace MSN. That service will remain available, despite the launch of this new, in-house competitor.

To use Microsoft Start, consumers can visit the standalone website MicrosoftStart.com, which works on both Google Chrome and Microsoft Edge (but not Safari), or they can download the Microsoft Start mobile app for iOS or Android.

The service will also power the News and Interests experience on the Windows 10 taskbar and the Widgets experience on Windows 11. In Microsoft Edge, it will be available from the New Tab page, too.

At first glance, the Microsoft Start website it very much like any other online portal offering a collection of news from a variety of publishers, alongside widgets for things like weather, stocks, sports scores and traffic. When you click to read an article, you’re taken to a syndicated version hosted on Microsoft’s domain, which includes the Microsoft Start top navigation bar at the top and emoji reaction buttons below the headline.

Users can also react to stories with emojis while browsing the home page itself.

This emoji set is similar to the one being offered today by Facebook, except that Microsoft has replaced Facebook’s controversial laughing face emoji with a thinking face. (It’s worth noting that the Facebook laughing face has been increasingly criticized for being used to openly ridicule posts and mock people  — even on stories depicting tragic events, like Covid deaths, for instance.)

Microsoft has made another change with its emoji, as well: after you react to a story with an emoji, you only see your emoji instead of the top three and total reaction count. 

But while online web portals tend to be static aggregators of news content, Microsoft Start’s feed will adjust to users’ interests in several different ways.

Users can click a “Personalize” button to be taken to a page where they can manually add and remove interests from across a number of high-level categories like news, entertainment, sports, technology, money, finance, travel, health, shopping, and more. Or they can search for categories and interests that could be more specific or more niche. (Instead of “parenting,” for instance, “parenting teenagers.”)  This recalls the recent update Flipboard made to its own main page, the For You feed, which lets users make similar choices.

As users then begin to browse their Microsoft Start feed, they can also click a button to thumbs up or thumbs down an article to better adjust the feed to their preferences. Over time, the more the user engages with the content, the better refined the feed becomes, says Microsoft. This customization will leverage A.I. and machine learning, as well as human moderation, the company notes.

The feed, like other online portals, is supported by advertising. As you scroll down, you’ll notice every few rows will feature one ad unit, where the URL is flagged with a green “Ad” badge. Initially, these mostly appear to be product ads, making them distinct from the news content. Since Microsoft isn’t shutting down MSN and is integrating this news service into a number of other products, it’s expanding the available advertising real estate it can offer with this launch.

According to the iOS app’s privacy label, the data being used to track users across websites and apps owned by other companies includes the User ID. By comparison, Google News does not include a tracking section. Both Microsoft Start and Google News collect a host of “data linked to you,” like location, identifiers, search history, usage data, contact info, and more. The website itself, however, only links to Microsoft’s general privacy policy.

The website, app, and integrations are rolling out starting today. (If you aren’t able to find the new app yet — it replaces Microsoft News —  you can try scanning the QR code from your mobile device. We currently found the app had rolled out on iOS but the link pointed us to Microsoft News on Android. Your mileage may vary.)

 

News: Wright tests its 2-megawatt electric engines for passenger planes

• September 7, 2021
• by:   
• in:  Blog 
• note:  no comments 

Just like the automotive industry, aerospace has its sights set on going electric — but flying with battery-powered engines is a tougher proposition than rolling. Wright is among the startups looking to change the math and make electrified flight possible at scales beyond small aircraft — and its 2-megawatt engine could power the first generation

Just like the automotive industry, aerospace has its sights set on going electric — but flying with battery-powered engines is a tougher proposition than rolling. Wright is among the startups looking to change the math and make electrified flight possible at scales beyond small aircraft — and its 2-megawatt engine could power the first generation of large-scale electric passenger planes.

Electric cars have proven to be a huge success, but they have an advantage over planes in that they don’t need to produce enough lift to keep their own mass in the air. Electric planes have been held back by this fundamental conundrum, that the weight of the batteries needed to fly any distance with passengers aboard means the plane is too heavy to fly in the first place.

In order to escape this conundrum, the main thing to improve is efficiency: how much thrust can be produced per watt of power. Since reducing the mass of batteries is a long, slow process, it’s better to innovate in other ways: materials, airframe, and of course the engine, which in traditional jets is a huge, immensely heavy and complex internal combustion one.

Electric engines are generally lighter, simpler, and more reliable than fuel-powered ones, but in order to achieve flight you need to reach a certain level of efficiency. After all, if a jet burned a thousand gallons of fuel per second, the plane couldn’t hold the amount needed to take off. So it falls to companies like Wright and H3x to build electric engines that can produce more thrust from the same amount of stored energy.

While H3x is focused on small aircraft that will probably be taking flight sooner, Wright founder and CEO Jeff Engler explained that if you want to take on aerospace’s carbon footprint, you really have to start looking at commercial passenger jets — and Wright is planning to make one. Fortunately, despite the company’s name, they don’t need to build it entirely from scratch.

“We’re not reinventing the concept of the wing, or the fuselage, or anything like that. What changes is what propels the aircraft forward,” said Engler. He likened it to electric vehicles in that much of the car doesn’t change when you go electric, mainly the parts that have operated the same way in principle for a century. All the same, integrating a new propulsion system into a plane isn’t trivial.

Wright’s engine is a 2 megawatt motor that produces the equivalent of 2,700 horsepower, at an efficiency of around 10 kilowatts per kilogram. “It’s the most powerful motor designed for the electric aerospace industry by a factor of 2, and it’s substantially lighter than anything out there,” said Engler.

The lightness comes from a ground-up redesign using a permanent magnet approach with “an aggressive thermal strategy,” he explained. A higher voltage than is normally employed for aerospace purposes and an insulation system to match enable an engine that hits the power and efficiency levels required to put a large plane in flight.

Wright is making sure its engines can be used by retrofitted aircraft, but it’s also working on a plane of its own with established airframe makers. This first craft would be a hybrid electric, combining the lightweight, efficient propulsion stack with the range of a liquid fuel engine. Relying on hydrogen complicates things but it makes for a much faster transition to electric flight and a huge reduction in emissions and fuel use.

Several of Wright’s motors would be attached to each wing of the proposed aircraft, providing at least two benefits. First, redundancy. Planes with two huge engines are designed to be capable of flying even if one fails. If you have six or eight engines, one failing isn’t nearly so catastrophic, and as a consequence the plane doesn’t need to carry twice as much engine as you need. Second is the stability and noise reduction that comes from having multiple engines that can be adjusted individually or in concert to reduce vibration and counteract turbulence.

Right now the motor is in lab testing at sea level, and once it passes those tests (some time next year is the plan) it will be run in an altitude simulation chamber and then up at 40,000 feet for real. This is a long term project, but an entire industry doesn’t change overnight.

Engler was emphatic about the enthusiasm and support the company has received from the likes of NASA and the military, both of which have provided considerable cash, material and expertise. When I brought up the idea that the company’s engine might end up in a new bombing drone, he said he was sensitive to that possibility, but that what he’s seen (and is aiming for) is much more in line with the defense department’s endless cargo and personnel flights. The military is a huge polluter, it turns out, and they want to change that — and cut down on how much money they spend on fuel every year as well.

“Think of how things changed when we went from propellers to jets,” said Engler. “It redefined how an airplane operates. This new propulsion tech allows for reshaping the entire industry.”

News: The next Theranos should be shortable

• September 7, 2021
• by:   
• in:  Blog 
• note:  no comments 

Matthew Wansley Contributor Matthew Wansley is Assistant Professor of Law at Cardozo School of Law in New York A jury will soon decide whether former Theranos CEO Elizabeth Holmes is guilty of a federal crime. But the deeper public policy questions that Theranos raised remain unanswered. How did a startup built on a technology that

A jury will soon decide whether former Theranos CEO Elizabeth Holmes is guilty of a federal crime. But the deeper public policy questions that Theranos raised remain unanswered. How did a startup built on a technology that never worked grow to a valuation of $9 billion? How was the company able to conceal its fraud for so long? And what, if anything, can be done to prevent the next Theranos before it grows large enough to cause real harm—and burns capital that could have been invested in genuine innovations? I explore these questions in a forthcoming paper in the Indiana Law Journal titled Taming Unicorns.

While Theranos was publicly exposed in October 2015 by Wall Street Journal investigative reporter John Carreyrou, insiders knew that it was committing fraud many years earlier. For example, in 2006, Holmes gave a demo of an early prototype blood test to Novartis executives and faked the results when the device malfunctioned. When Theranos’ CFO confronted Holmes about the incident, she fired him. In 2008—roughly seven years before Carreyrou’s exposé—Theranos board members learned that Holmes had misled them about the company’s finances and the state of its technology.

Over time, a remarkable number of people, both inside and outside the company, began to suspect that Theranos was a fraud. An employee at Walgreens tasked with vetting Theranos for a potential partnership wrote in a report that the company was overselling its technology. Physicians in Arizona grew skeptical of the results their patients were receiving, and a pathologist in Missouri wrote a blog post questioning Theranos’ claims about how accurate its devices were. Stanford Professor John Ioannidis published an article in JAMA raising more doubts.

Meanwhile, rumors had spread in the VC community. Bill Maris of Google Ventures (since rebranded as GV) claimed that his fund passed on investing in Theranos in 2013. According to Maris, the firm had sent an employee to take a Theranos blood test at Walgreens. The employee was asked to give more than the single drop of blood that Theranos claimed its devices needed. After he refused a conventional venous blood draw, he was told to come back to give more blood.

So why did none of these doubts slow Theranos’ fundraising? Part of the answer is that it was a private company, and it’s nearly impossible to bet against private companies.

Until the last decade, most startups that grew to become valuable businesses chose to become public companies. Late-stage startups with reported valuations over $1 billion used to be so rare that VC Aileen Lee dubbed them “unicorns” in a 2013 article in TechCrunch. Back then, there were only 39 startups claiming billion-dollar valuations. By 2021, despite the surge in companies going public through SPACs, the number of unicorns had passed 800.

The rise of unicorns has been accompanied by corporate misconduct scandals. Of course, public companies commit misconduct too. Research hasn’t yet established whether unicorns are systematically more prone to commit misconduct than comparable public companies. However, we do know that the opportunity to profit from information about a company by trading its securities creates incentives to uncover misconduct. Since the securities of private companies aren’t widely traded, it’s easier for private company executives to conceal misconduct.

Consider the electric truck company Nikola, formerly a unicorn. In 2020, Nikola went public through a SPAC. Once it was public, short seller Nathan Anderson decided to investigate and ultimately issued a report alleging a pattern of corporate misconduct. He showed that a video Nikola had produced with its prototype truck traveling at high speed was staged—Nikola had towed the truck to the top of a hill and filmed it rolling downhill in neutral. After Anderson released his report, the SEC and federal prosecutors launched investigations into whether the Nikola misled investors. Its stock price lost more than half of its value. In 2021, Nikola’s CEO Trevor Milton was charged by the SEC and indicted by a federal grand jury. Nikola wouldn’t have been exposed so soon if it had stayed private.

Securities regulation restricts both the sale and resale of private company stock in the name of investor protection. Startups usually attach a contractual right of first refusal to their shares, which effectively requires employees to get the company’s permission to sell. Many late-stage startups practice “selective liquidity”: allowing key employees to cash out in private placements, while preventing a robust market from emerging. Consequently, those who have information about private company misconduct have little incentive to publicize it—even though the Supreme Court has held that an investor who trades on information shared for the purpose of exposing fraud can’t be convicted of insider trading.

VCs might seem well-positioned to police unicorn misconduct. But their asymmetric risk preferences undermine their incentive to expose wrongdoing. VCs invest their funds in a portfolio of startups and expect that most bets will generate modest or negative returns, and only a small number will grow exponentially. The outsize growth of the few successful startups will offset the losses of the balance of the portfolio. For VCs, the difference between a startup that implodes in scandal and the many startups that fail to develop a product or find a market is insignificant.

Venture investing is an auction with a winner’s curse problem. Startups pitch to many VC firms in each fundraising round, but they only need to accept funding from one bidder. In public capital markets, if most investors decide that a company is fraudulent or excessively risky, its stock price will decline. In VC markets however, if most investors decide that a startup is fraudulent, the startup can still raise funds from a credulous contrarian. VCs who pass won’t share their negative assessment with the public because they want to maintain a founder-friendly reputation. Maris only told the press that GV had passed on Theranos after Carreyrou’s article.

Congress and the SEC could strengthen deterrence of unicorn misconduct by creating a market for trading private company securities, in three steps.

First, the regulations constraining the secondary trading of private company securities should be liberalized. The SEC should eliminate Rule 144’s holding period for resales as to accredited investors—the individual and institutional investors that the SEC deems sophisticated and most able to bear risk. Congress should eliminate section 12(g)’s requirement that effectively forces companies to go public if they acquire 2,000 record shareholders who are accredited investors—a rule that leads private companies to limit trading.

Second, the SEC should attach a regulatory most favored nation (MFN) clause to all securities sold through the safe harbors commonly used for private placements. An MFN clause would require that, if a company allows any of its securities to be resold, it must allow all its securities to be resold, as long as the resale is otherwise legal. A regulatory MFN clause would ban the practice of selective liquidity and nudge companies to allow their shares to be traded.

Third, the SEC should require that all private companies that let their securities be widely traded make limited public disclosures about their operations and finances. A limited disclosure mandate would protect investors by ensuring they had basic information about the companies in which they could invest, without saddling unicorns with the costly disclosure obligations placed on public companies.

The net effect of these reforms would be to create a robust market for trading unicorn stock among accredited investors. Most large, private companies would likely decide to allow their shares to be traded. Short sellers, analysts, and financial journalists would be attracted to the markets. Their investigations would strengthen deterrence of unicorn misconduct. The limited disclosure mandate, combined with the requirement that investors be accredited, would protect investors.

When large, private companies commit misconduct, the natural response is to increase the penalty for the underlying misconduct, not to interfere with the tradability of the company’s securities. But the problem isn’t lax penalties. Holmes is facing 20 years in prison—a punishment more brutal than anyone deserves. The problem is that penalties only work when wrongdoers expect to be caught. Trading creates incentives to expose misconduct faster.

News: Speech recognition works for kids, and it’s about time

• September 7, 2021
• by:   
• in:  Blog 
• note:  no comments 

Speech recognition holds tremendous promise for something desperately needed in the era of COVID-19: technology that can significantly improve reading outcomes and tackle the global literacy crisis in a real and profound way.

Speech recognition technology is finally working for kids.

That wasn’t the case back in 1999, when my colleagues at Scholastic Education and I launched a reading intervention program called READ 180. We’d hoped to incorporate voice-enabled capabilities: Children would read to a computer program, which would provide real-time feedback on their fluency and literacy. Teachers, in turn, would receive information about their students’ progress.

Unfortunately, our idea was 20 years ahead of the technology, and we moved ahead with READ 180 without speech-recognition capabilities. Even at the height of the dot-com bubble, speech recognition for classrooms was still largely the stuff of science fiction.

Artificial intelligence and machine learning hadn’t enabled us to map the terabytes of data required to block out ambient noise in busy classrooms. Nor had it evolved to grasp the complexity of children’s voices, which have different pitches and speech patterns than those of adults, much less recognize a variety of dialects and accents, and — last but not least — manage children’s less-than-predictable behaviors when engaging with technology.

At Scholastic, we didn’t want to tell kids they were mastering something when they weren’t, and we understood the profound implications of telling a young student they got something wrong when they were actually right.

Fast forward to today. Speech recognition has advanced to the point where it can recognize and process children’s speech and account for differences in accents or dialects. Companies like Dublin-based SoapBox Labs have developed speech-recognition technology that is modeled on the diversity of children’s voices you’d find in a busy playground or classroom. Thanks to the high accuracy and performance of this technology, elementary school educators can now rely on it to help them gauge students’ progress with more regularity and offer more personalized approaches to their instruction.

Such advances could not have come at a more crucial moment.

Even before the pandemic, more than 80% of children from economically disadvantaged families failed to reach reading proficiency by fourth grade. After a year of separation from skilled educators, fumbling with technology designed for adults and vast gaps in digital equity, students had learned just 87% of the reading that they would have in a typical year, according to a report from McKinsey & Co. They lost an average of three months of learning during spring school closures.

Not surprisingly, reading losses were especially acute in schools that serve mostly students of color, where reading scores were just 77% of the historical average.

As students return to classrooms, speech recognition can revolutionize education — not to mention remote learning and entertainment in the home — by transforming the way children interact with technology. Voice-enabled literacy, as well as math and language programs, can further professionalize the field by taking the administrative work out of measuring a child’s learning rate and acquisition of foundational skills.

For example, speech recognition can generate regular and valuable insights into a student’s reading progress, pick up on patterns or isolate areas where improvement is needed. Teachers can review the progress and assessment data generated by voice-enabled tools, adapt the learning paths for each child’s needs, screen for challenges such as dyslexia and schedule timely interventions when necessary.

Voice-enabled reading tools allow every child to spend time reading aloud and receiving feedback during the school day, something that simply isn’t practical for one teacher to offer. To put the challenge in perspective: 15 minutes of individual time per child in a class of 25 would eat up more than six hours of a teacher’s day, every day. That sort of individualized observation and assessment was a persistent challenge for teachers before COVID-19. It becomes even more challenging with the emergence of remote learning and as students return to school with unprecedented educational and emotional issues.

Speech recognition technology also has the potential to increase equity in the classroom. Human reading assessment is, after all, highly subjective, and recent studies have shown variances of up to 18% caused by assessor bias. The child-centered high-accuracy speech recognition available today overcomes inevitable human bias by ensuring that every child’s voice is understood regardless of accent or dialect.

In a few years, this technology will be part of every classroom instruction, accelerating the reading — and math and language — skills of young students. Educators will find it enables them to be more strategic in their instruction. And it holds tremendous promise for something desperately needed in the era of COVID-19: technology that can significantly improve reading outcomes and tackle the global literacy crisis in a real and profound way.

News: Equity Monday: Women’s employment drops, as Delta’s drama continues

• September 7, 2021
• by:   
• in:  Blog 
• note:  no comments 

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This is Equity Monday, our weekly kickoff to catch up on weekend news and prep for the days ahead. We’re here on Tuesday this week since us folks in the United States had off for labor day. You

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

This is Equity Monday, our weekly kickoff to catch up on weekend news and prep for the days ahead. We’re here on Tuesday this week since us folks in the United States had off for labor day. You can follow the show on Twitter here, and while you’re at it, throw me a follow too.

• Jobs report: Over the weekend, the US government posted the Jobs Report. It wasn’t ideal, with a sharp drop in percentage of women rejoining the workforce. I give you the startup angle, and talk about a somewhat poetic unicorn.
• Instacart, meet Instagram: WSJ reports that new Instacart CEO Fidji Simo is expanding the grocery delivery store’s consumer-product advertising business, with a goal of hitting $1 billion in revenue next year. I riff on why this makes sense and what challenges the business make come up against.
• Behemoths, beware: The largest Series A within Africa just closed, and it’s not even close. Wave is taking on telecom-led mobile money, now with four-big name backers. It’s not the only startup trying to take on a behemoth. I also gave a shout out to Glass, which wants to take on Instagram as a new go-to destination for photographers to share their content.

And that’s a wrap. I have a fun edtech piece coming out on Extra Crunch this week, so keep your eyes out for it.

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

News: Performance marketing agency MuteSix bets on content and data to boost DTC e-commerce

• September 7, 2021
• by:   
• in:  Blog 
• note:  no comments 

We interviewed MuteSix CRO Greg Gillman to discuss how the LA-based performance marketing agency bets on content and data to work with its direct-to-consumer e-commerce clients.

Warby Parker filing to IPO last week was one more sign that direct-to-consumer (DTC) is an extremely powerful e-commerce trend. But LA-based performance marketing agency MuteSix didn’t wait that long to build its business around scaling DTC brands.

Created in 2014 and acquired by Dentsu in 2019, MuteSix was recommended to TechCrunch by Rhoda Ullmann, VP Consumer at Sense, a Boston-based startup building a home energy monitor. “They demonstrate best-in-class expertise with Facebook and Google paid ad platforms. They also have a very smart and efficient approach to creative development that was critical to helping us scale,” she wrote. (If you have growth marketing agencies or freelancers to recommend, please fill out our survey!)

Besides Sense, MuteSix’s former and current clients include companies such as Adidas, Petco, Ring and Theragun, to whom it provides a full range of marketing services, including top-notch direct response videos. But regardless of whether you can afford this, we think you’ll learn interesting lessons from our conversation with their CRO, Greg Gillman. The key takeaway? In today’s highly competitive ad environment, both content and data are kings.

Editor’s note: The interview below has been edited for length and clarity.

What can you tell us about MuteSix as an agency?

Greg Gillman: We’ve been around for about nine years. We started out as a Facebook ad agency — as opposed to a lot of agencies that start out by saying they do everything, we decided to focus on what we were really good at. At the time, it was doing Facebook media buying for e-commerce companies. Primarily here in LA, which is kind of the hub of these companies, but also all over. And then bit by bit, we grew the organization.

At this point, we’re a little over 400 people, and we manage upward of $500 million in spend on Facebook and Google, including Instagram and YouTube. What we’ve grown into is a one-stop shop for DTC e-commerce companies: We manage all the channels that a DTC brand needs. And we’re a performance agency; everything we do is based on results. People come to us to drive revenue into their e-commerce businesses.

Why do you think that performance marketing is the right fit for DTC?

DTC entrepreneurs are more focused on immediate impact, because if they’re not selling product, there’s no large brand propping them up. So I think that doing DTC marketing requires you to be more performance focused. For agencies that work with large brands, usually it’s more about impression buying versus performance buying. They can say: I did a reach campaign today to hit 10 million eyeballs, and whatever happens happens, because at the end of the day, you just told us to do 10 million impressions. It’s different than working with a group like us that’s trying to optimize every small piece of the funnel, and being accountable for the entire funnel to drive as much sales or revenue.

What type of clients do you work with?

The majority of the companies we work with are digitally native DTC companies. We’ve mostly stayed in that lane, because we’re really good at it. That being said, we work with companies of all sizes — startups, companies that are already established, and very large companies that need to rework both their creative and their media buying strategy.

I oversee sales, marketing and partnerships, and my role is really trying to figure out which brands make most sense to partner with MuteSix. We’re looking for high-growth brands that we can scale, and we’ve learned through the years that what works well are demonstrable products that have cool user value props.

We’ve worked with lots of startups at different points in the funnel, starting from the ground up and working with them through various rounds of funding, all the way through acquisitions, including two by unicorns. But these days, ground up is tougher. I like them to have some proof of concept — putting through $10,000-$15,000 per month on Facebook or $5,000-10,000 on Google usually shows me that there’s some life to it. But I don’t want to limit us if it’s a cool idea. I talk to a lot of people who come back once they’ve proven it out a little bit.

---

Have you worked with a talented individual or agency who helped you find and keep more users?

Respond to our survey and help other startups find top growth marketers they can work with!

---

What kind of clients are definitely not a good fit?

It won’t be a fit if there’s no real unique value prop for the product. If it’s just another run-of-the-mill company, a consultant can charge them a lower amount of money and set up Facebook ads, but what we are looking for are high-growth businesses.

The compensation for our campaign managers is actually tied to the performance of the campaigns, so if I bring a bunch of campaigns that we can’t scale, we’re gonna have a lot of unhappy media buyers who ask: “Greg, why would we take on this brand?” It’s a business model that has helped us attract top talent, but we need to make sure that we’re bringing brands that we think we can scale.

And it’s easier than ever to start a company, but it’s tougher now to scale it and take it past the $2 million-$3 million run rate. So I always revert back to asking founders: What are five reasons why people want to buy your product? What are the five reasons that they don’t? If the entrepreneur has trouble answering this, it’s not going to work. If they can’t tell somebody why their business is good, then we’re not going to be good at selling it.

How is MuteSix different from other agencies?

I’d say the main difference is that we have a 70-person in-house video creative team; and what we’re really good at doing is shooting and coming up with performance content. Not just content that looks and feels great, but video that is reverse-engineered to sell product.

Another key component is that we have a whole data science team that is also integrated with our media buying team, and that helps companies navigate things like attribution and signal loss due to the iOS 14 update. Right now, that means focusing on looking at the whole picture rather than by channel and working on mix-modeling attribution.

What are some of the things your data team focuses on?

One of the biggest things that brands struggle with is figuring out attribution, and how you continue to spend money even though you may have lost some signal into the platform. If Facebook skews too heavily, and Google is on last click, then sometimes it looks like things are never working. To help companies make informed business decisions, we are building statistical models that show information at higher-than-the-platform level.

We are also building better segments of customer profiles that help the clients understand who their core audience is, but also helps us build predictive audiences for finding new people.

Another big thing we’re trying to solve is incrementality. We work with large brands that have a strong organic following on social media; and their question is: “Hey, Greg, why should I spend more money if I would have acquired those users anyway?” So we’ve done incrementality testing with brands that spend a lot in other channels than Facebook and Google. We helped them build out different ways to look at the data so that we continue to spend in those channels and they actually know the incremental lift that they’re getting.

There’s one other piece that I think is super important and usually overlooked: first-party data. We work with brands to try and acquire as much of that first-party data as possible, segment it and use it, because that’s what they’d be left with if Facebook shut off tomorrow.

How do you prepare and adapt for changes in the marketing ecosystem?

Because we work with so many brands, we have a lot of senior leadership on each channel level. We routinely meet across departments and share insights. The data science team also builds pretty robust reporting. We try to stay ahead of our brands and to be forward-thinking about anything that is ultimately going to impact the agency. We’re constantly trying to hack our way through things like the types of content that work and things that we know will help us scale.

That’s how we have always approached it. Every major shift in our business was done to answer the needs of the brands that we were working with. For instance, there’s a data side to our business because it’s more important than ever to use that. Facebook used to be a platform where you could throw anything at the wall, and you would get a 4x or 5x return. No one’s asking about data when you’re literally printing money out of Facebook, right? It only happens when the margins get tight. But then Facebook became a more crowded platform, and the same happened with Google: more advertisers, higher CPM and a more competitive environment. We needed to be smarter about what we were doing, so we built out our data team.

Now there’s two levers that we can pull: the data side and the creative side of the business. Again, we are a performance marketing agency, focusing on all the levers. Because platforms like Facebook are only going to be more competitive, they’re only going to get more expensive, and we are only going to lose more traffic. So the more agile agencies have to think much farther outside of what we are doing on these platforms; because we’re going to make up the incremental revenue on things like SMS, influencer marketing and organic content, to continue to drive money into the top of the funnel.

Why is your content arm so important as a lever?

We have an integrated solution where our media buyers are paired directly with our video editors and producers to allow us to be agile and quick; because as everyone knows, content is king. What we try to do is optimize around things like what we call the thumbs-up rate on Facebook — three-second video views. If I held someone for that long in their newsfeed, I can potentially get them into our flow. We do the same on YouTube, and we do things like this on programmatic, because the name of the game is to get people into the funnel and work them through it. And we’re using both our data science team and our creative team to build out and optimize on the front end around these quick metrics to get things moving.

In my opinion, there’s no close second to an SMB agency that has a content arm like we do. Leveraging our content team to build performance content is one of the biggest levers that we have. Three and a half years ago, Facebook was telling us: “If you don’t build video content, and if you don’t prioritize video in the newsfeed, it’s not going to work.” At the time, we leaned in very hard — and the pain of growing a creative team of 70 people is real, especially in LA. But it’s allowed us to scale our agency.

News: Hulu is raising the price on its on-demand plans by $1 starting Oct. 8

• September 7, 2021
• by:   
• in:  Blog 
• note:  no comments 

Following last year’s price hike on its Live TV service, Hulu is now preparing to raise prices again. Starting on October 8, 2021, Hulu will raise the price for both its on-demand plans, Hulu and Hulu with No Ads. However, unlike the earlier price hike which had clocked in at $10 more per month for

Following last year’s price hike on its Live TV service, Hulu is now preparing to raise prices again. Starting on October 8, 2021, Hulu will raise the price for both its on-demand plans, Hulu and Hulu with No Ads. However, unlike the earlier price hike which had clocked in at $10 more per month for each of its two Live TV plans, the new price increase will be just $1.00.

That means the ad-supported version of Hulu will increase from $5.99 to $6.99 per month, while Hulu with No Ads will increase from $11.99 to $12.99 per month. This will apply to both existing and new subscribers. Hulu says none of the October increases will impact its Live TV service or any plan where Hulu is bundled with Disney+. (Disney took full control of Hulu after buying Comcast’s stake in 2019).

Today, Hulu is offered with Disney+ and ESPN+ for $13.99 per month. This subtle shift in pricing for Hulu’s standalone service may make that bundle look attractive to those not in the market for Hulu’s live TV.

Hulu’s on-demand service accounts for the majority of its subscriber base today. In Disney’s fiscal third quarter earnings, announced last month, Hulu’s subscription video on-demand business had grown 22% year-over-year to reach 39.1 million subscribers, while its Live TV service (which also include the on-demand offerings), had grown just 9% to reach 3.7 million subscribers. Combined, Hulu had 42.8 million total subscribers, up 21% compared to the same period from the prior year.

This is slower growth, however, than Disney+ — that service saw more than 100% year-over-year growth, jumping from 57.7 million subscribers as of Disney’s Q3 2020 to 116 million in Disney’s Q3 2021.

Including Disney’s EPSN+, the company’s direct-to-consumer business had a total of nearly 174 million subscribers by the end of the quarter, the company said.

However, although Hulu trails Disney+ in subscriber count, it’s ahead on average monthly revenue per user (ARPU).

In Q3, ARPU declined from $4.62 to $4.16 due to a higher mix of Disney+ Hotstar subscribers compared with the prior-year quarter, Disney said. Hulu’s on-demand service, meanwhile, saw ARPU climb from $11.39 to $13.15 year-over-year and its Live TV service (+SVOD) grew from $68.11 to $84.09.

Hulu’s on-demand business includes a combination of licensed content and original programming, like newer arrivals “Nine Perfect Strangers,” “Only Murders in the Building,” and “Vacation Friends.” The company also just added thousands of Hotstar Specials and Bollywood hits, as of September 1.

 

News: Apple’s next event is September 14

• September 7, 2021
• by:   
• in:  Blog 
• note:  no comments 

Invites just went for Apple’s next big event, scheduled for 10AM PT/1PM ET on September 14. The invite doesn’t offer a lot in the way of what’s to come — it’s a neon logo set against a lovely sierras backdrop and an apparent The Mamas & the Papas reference in the form of “California Streaming.”

Invites just went for Apple’s next big event, scheduled for 10AM PT/1PM ET on September 14. The invite doesn’t offer a lot in the way of what’s to come — it’s a neon logo set against a lovely sierras backdrop and an apparent The Mamas & the Papas reference in the form of “California Streaming.” Beats CaliforniPhoneication, I suppose. As the name implies, the event will — once again — be all virtual, no doubt owing to various variants.

The company’s reportedly got a lot of hardware waiting in the wings ahead of the holidays, but the timing in certainly right on this one for the iPhone 13. Last year marked a rare delay for the company, owing to larger issues with the supply chain that hamstrung most of the industry.

Per usual, there’s been a lot of speculation around the upcoming handset’s release. Last year’s long-awaited arrival of 5G marked a big windfall for the company, as the overall industry was flagging. It was a massive few quarters for the iPhone, as those holding off on upcoming finally pulled the trigger.

So, what surprises does Apple have up its sleeve for the next version of the handset? Recent leaks point to a feature called Emergency Message via Satellite, which offers short satellite calls for phones temporarily unable to access their cellular networks. Honestly, though, the information around this is currently murky, at best.

Other expected updates include a 120Hz display – many expected the update to arrive on iPhone 12, but all versions of the handset still sported a 60Hz refresh rate. It’s expected to pack the new A15 chip, improved sensors and a larger battery. And for good measure, a new MagSafe charger also just made its way through the FCC.

The Apple Watch 7 and AirPods 3 are also set for release sooner, than later. Though Apple certainly hasn’t been above splitting things up a bit in the virtual event era.

As ever, we’ll be there (virtually) to bring it to you, live.