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News: GM says it will seek reimbursement from LG Chem for $1B Chevy Bolt recall losses

American automaker General Motors expanded its recall of Chevrolet Bolt electric vehicles on Friday due to fire risks from battery manufacturing defects. The automaker said it would seek reimbursement from LG Chem, its battery cell manufacturing partner, for what it expects to be $1 billion worth of losses. Following the news of the recall, the

American automaker General Motors expanded its recall of Chevrolet Bolt electric vehicles on Friday due to fire risks from battery manufacturing defects. The automaker said it would seek reimbursement from LG Chem, its battery cell manufacturing partner, for what it expects to be $1 billion worth of losses.

Following the news of the recall, the third one GM has issued for this vehicle, LG Chem shares fell by 11% on Monday, and its stock price lost $6 billion in market value. GM’s shares were down 1.27% at market close.

This isn’t the first time LG Chem’s batteries have resulted in a recall from automakers. Earlier this year, Hyundai recalled 82,000 EVs due to a similar battery fire risk at an estimated cost of about $851.9 million. Hyundai’s joint battery venture was with LG Energy Solution, the specific battery unit of LG Chem, which is preparing for its initial public offering in September, but experts say the IPO could be delayed due to the recall cost.

GM’s investigation into the problems with its batteries found battery cell defects like a torn anode tab and folded separator. The recall comes a week after a fire involving a Volkswagen AG ID.3 EV with an LG Energy Solution battery. Earlier this year Volkswagen, as well as Tesla, began making moves to shift from LG Chem’s brand of pouch-type lithium-ion battery cells and towards more prismatic-type cells, like those made by CATL and Samsung SDI.

The recall leaves GM without any fully electric vehicles for sale in North America, which means it can’t compete with Tesla and other automakers as EV sales are on the rise. The loss in sales, the safety risks and the possibility of better tech on the horizon might cause GM to take its business elsewhere.

For now, there’s still work to be done together. GM said it will replace defective battery modules with new modules in the Chevy Bolt EVs and EUVs, which it says accounts for the $1 billion in losses. This is on top of the $800 million GM already is spending for the original Bolt recall last November. Battery packs are the most expensive components of the electric vehicle, on average costing about $186 per kWh, according to data from energy storage research firm Cairn ERA. GM pays about $169 per kWh, and the Bolt has a 66 kWh battery pack.

LG Chem and GM did not respond to requests for comment, so it’s not clear whether the two plan to move forward on plans announced in April to build a second U.S. battery cell factory in Tennessee. The joint venture, dubbed Ultium Cells, would aim to produce more than 70 GWh of energy.

News: Japan’s B2B ordering and supply platform CADDi raises $73 million Series B funding

With COVID-19 disrupting the entire manufacturing supply chain including semiconductor shortages, companies across multiple industries have been struggling to seek a procurement solution that can rebalance the gap between supply and demand. CADDi, a Tokyo-based B2B ordering and supply platform in the manufacturing and procurement industry, helps both procurement (demand side) and manufacturing facilities (supply

With COVID-19 disrupting the entire manufacturing supply chain including semiconductor shortages, companies across multiple industries have been struggling to seek a procurement solution that can rebalance the gap between supply and demand.

CADDi, a Tokyo-based B2B ordering and supply platform in the manufacturing and procurement industry, helps both procurement (demand side) and manufacturing facilities (supply side) by aggregating and rebalancing supply and demand via its automated calculation system for manufacturing costs and databases of fabrication facilities across Japan.

The company announced this morning a $73 million Series B round co-led by Globis Capital Partners and World Innovation Lab (WiL), with participation from existing investors DCM and Global Brain. Six new investors also have joined the round including Arena Holdings, DST Global, Minerva Growth Partners, Tybourne Capital Management, JAFCO Group and SBI Investment.

CADDi was founded by CEO Yushiro Kato and CTO Aki Kobashi in November 2017.

The post-money valuation is estimated at $450 million, according to sources close to the deal.

The new funding brings CADDi’s total raised so far to $90.5 million. In December 2018, the company closed a $9 million Series A round led by DCM and followed by Globis Capital Partners and WiL and Global Brain.

The funding proceeds will be used for accelerating digital transformation of the platform, hiring and expanding to global markets.

“We enable integrated production of complete sets of equipment consisting of custom-made parts such as sheet metal, machined parts and structural frames. Using an automatic quotation system based on a proprietary cost calculation algorithm, we select the processing company that best matches the quality, delivery date and price of the order and build an optimal supply chain,” CEO and co-founder Yushiro Kato said.

The goal of CADDi’s ordering platform is to transform the manufacturing industry from a multiple subcontractor pyramid structure to a flat, connected structure based on each manufacturers’ individual strengths, thus creating a world where those on the front lines of manufacturing can spend more time on essential and creative work, Kato said.

CADDi’s ordering platform, backed by its unique technology including automatic cost calculation system, optimal ordering and production management system, and drawing management system, offers a 10%-15% cost reduction, stable capacity and balanced order placement to its more than 600 Japanese supply partners spanning a multitude of industries.

“The demand for CADDi’s services has seen significant acceleration. Our business has been growing very fast, and our latest orders have grown more than six times compared to the previous year, leading to the company’s expanded presence into both eastern and western Japan in order to meet this increase in demand,” Kato said.

“Going forward, in addition to continuously expanding our ordering platform, we will also start to provide purchases (manufacturers) and supply partners with our technology directly to promote digital transformation of their operations, for example, the production management system and drawing management system,” Kato continued.

“As a start point, in the near future, we are thinking about selling ‘Drawing Management SaaS,’” which has been used internally for CADDi’s ordering operation, to help customers solve operational pains in handling piles of drawings. “Our ‘Drawing Management SaaS’ technology will not only help manage drawings as documents properly but also allow utilization of data of drawings in a practical way for future decision-making and action in their procurement process.”

CADDi’s next axis of growth will be other growing markets, especially in Southeast Asia, Kato pointed out. “Many of our Japanese customers have subsidiaries and branches in these countries, so it’s a natural expansion opportunity for us to strengthen our value proposition and provide more continuity and seamless service to our customers,” Kato added.

Kato also said it wants to continue investing in hiring, especially engineers, to further the development of its platform CADDi and new business. It plans to hire 1,000 employees in the next three years. CADDi had 102 employees as of March 2021.

The company aims to become a global platform with sales of USD 9.1 billion (that is 1 trillion YEN) by 2030, Kato said.

COVID-19 had a different impact on different industries in the procurement and manufacturing sector, with “the automobile and machine tool industries were negatively affected by the pandemic and experienced an up to 90% temporary drop in sales, while other industries such as the medical and semiconductor industries have experienced explosive growth in demand. The overall result of COVID-19 is that the company has captured more demand because CADDi’s system rebalances receipts across multiple industries,” according to Kato.

Masaya Kubota, partner at World Innovation Lab, told TechCrunch, “CADDi’s solution of aggregating and rebalancing supply and demand has once again proven to be indispensable to both purchasers and manufacturers, with the pandemic disrupting the entire supply chain in manufacturing. We first invested in CADDi in 2018, because we strongly believed in their mission of digitally transforming one of the most analog industries, the $1 trillion procurement market.”

Another investor principal at DCM, Kenichiro Hara, also said in an email interview with TechCrunch, “The pandemic made the manufacturing industry’s supply chain vulnerabilities quite clear early on. For example, if a country is on lockdown or a factory stalls the operations, their customers cannot procure necessary parts to produce their products. This impact amplifies, and the entire supply chain is affected. Therefore, the demand for finding new, available and accessible suppliers in a timely manner increased in importance, which is CADDi’s primary value-add.”

News: Back to the suture: The future of healthcare is in the home

In-home care is nothing new. In the 1930s, over 40% of physician-patient encounters took place in the home, but by the 1980s, that figure dropped to under 1%.

Sumi Das
Contributor

Sumi Das is a partner at CapitalG, Alphabet’s independent growth fund, where he leads healthcare tech and consumer fintech investments. Prior investments include Robinhood, Stripe, Convoy, Albert, Aye Finance, Next Insurance and Strive Health.

Nina Gerson
Contributor

Nina Gerson is a vice president at CapitalG, Alphabet’s independent growth fund, where she co-leads healthcare tech investments. Prior investments include Strive Health and Next Insurance.

The pandemic has highlighted some of the brightest spots — and greatest areas of need — in America’s healthcare system. On one hand, we’ve witnessed the vibrancy of America’s innovation engine, with notable contributions by U.S.-based scientists and companies for vaccines and treatments.

On the other hand, the pandemic has highlighted both the distribution challenges and cost inefficiencies of the healthcare system, which now accounts for nearly a fifth of our GDP — far more than any other country — yet lags many other developed nations in clinical outcomes.

Many of these challenges stem from a lack of alignment between payment and incentive models, as well as an overreliance on hospitals as centers for care delivery. A third of healthcare costs are incurred at hospitals, though at-home models can be more effective and affordable. Furthermore, most providers rely on fee for service instead of preventive care arrangements.

These factors combine to make care in this country reactive, transactional and inefficient. We can improve both outcomes and costs by moving care from the hospital back to the place it started — at home.

Right now in-home care accounts for only 3% of the healthcare market. We predict that it will grow to 10% or more within the next decade.

In-home care is nothing new. In the 1930s, over 40% of physician-patient encounters took place in the home, but by the 1980s, that figure dropped to under 1%, driven by changes in health economics and technologies that led to today’s hospital-dominant model of care.

That 50-year shift consolidated costs, centralized access to specialized diagnostics and treatments, and created centers of excellence. It also created a transition from proactive to reactive care, eliminating the longitudinal relationship between patient and provider. In today’s system, patients are often diagnosed by and receive treatment from individual doctors who do not consult one another. These highly siloed treatments often take place only after the patient needs emergency care. This creates higher costs — and worse outcomes.

That’s where in-home care can help. Right now in-home care accounts for only 3% of the healthcare market. We predict that it will grow to 10% or more within the next decade. This growth will improve the patient experience, achieve better clinical outcomes and reduce healthcare costs.

To make these improvements, in-home healthcare strategies will need to leverage next-generation technology and value-based care strategies. Fortunately, the window of opportunity for change is open right now.

Five factors driving the opportunity for change

Over the last few years, five significant innovations have created new incentives to drive dramatic changes in the way care is delivered.

  1. Technologies like remote patient monitoring (RPM) and telemedicine have matured to a point that can be deployed at scale. These technologies enable providers to remotely manage patients in a proactive, long-term relationship from the comfort of their homes and at a reduced cost.

News: Daily Crunch: Virgin Orbit rockets to $3.2B valuation in SPAC merger

Hello friends and welcome to Daily Crunch, bringing you the most important startup, tech and venture capital news in a single package.

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello and welcome to Daily Crunch for August 23, 2021. We’ve got a simply lovely bunch of news items for you below, but before we get into the mix, do note that Pfizer’s vaccine has been fully approved. Which is great news! And in other great news, the agenda is out for our October SaaS event. Which is going to kick maximum backside. See you there! — Alex

The TechCrunch Top 3

  • Would you like to go to space? Well, if you are a small satellite heading for low-Earth orbit, good news! Virgin Orbit is raising a bunch of money in a SPAC-led combination that will at once take it public and provide it with a huge grip of cash. You are familiar with Virgin Galactic, its sister company that takes humans for a joyride. Orbit uses a similar launch technique to put more hardware in space.
  • The global crypto race is on: U.S. fintech companies are working to provide domestic users with the option of buying crypto using their service. And now PayPal is taking its efforts international, with plans to allow U.K. folks to buy cryptocurrency through its service. There is going to be a rush for local providers of crypto services to expand to new shores to both avoid ceding potential global market share and stay relevant.
  • Is this why investors are falling out of love with insurtech? TechCrunch has been on the insurtech beat for a while now, trying to figure out why a bunch of formerly hot insurtech startups that went public in the last year have seen their valuations decline once they began to float. We may have figured it out.

Startups/VC

  • Do you want to turn that coupon into a donation? Givz hopes so. The startup provides an API that allows companies to offer coupons that are, in fact, donations to charity. As Mary Ann Azevedo wrote, an “example of a company using Givz can be found in Tervis, which offered customers” a $15 charity donation if they spent $50 at its store. The startup just closed $3 million.
  • Shelf.io raises huge $52M Series B: Even in 2021, a $50 million Series B stands out. But what makes Shelf interesting isn’t really its new round’s size, but the fact that it posted 4x ARR growth from July 2020 to July 2021. That’s quick. The company sells software that ingests a company’s knowledge base, offering suggestions to workers like customer support reps about what to say and when.
  • How are customers really using your API? That’s the question that Moesif wants to answer, and it just raised $12 million to keep up its efforts. We’ve noted at TechCrunch that many startups are swapping from SaaS to API-delivered software services. Which is well and good, but doesn’t always supply the most limpid way of monitoring customer usage and usage patterns. Perhaps Moesif will make it easier to bill for overages?
  • SoftBank looks to Africa: After flying into the Latin American startup market and making noise, SoftBank’s Vision Fund franchise just made a huge bet in Africa, leading a $400 million round into fintech company OPay. Our own Tage Kene-Okafor writes that “the company’s mobile money and payment arm” is its most successful effort to date.
  • From the latest YC batch, Revery: This startup — Revery.ai, formally — wants to apply computer vision and artificial intelligence to e-commerce to provide a better online dressing room experience, TechCrunch reports. We’ve heard of similar efforts in the past, but that doesn’t mean that there isn’t room in the world of online shopping for a few players.
  • Expect to hear more from YC companies as demo day looms in our calendars.

Zūm CEO Ritu Narayan explains why equity and accessibility works for mobility services

Ritu Narayan founded Zūm with her two brothers in 2016 to disrupt student transportation, a space that hasn’t seen much innovation since pupils began finding their way to and from little red schoolhouses.

Since then, Zūm has inked partnerships with school districts around the country to create more efficient routes and reduce vehicle emissions.

By 2025, Narayan says her company will have 10,000 electric school buses and plans to put the fleet into service to generate power and feed it back to the grid.

To learn more about the company’s development, its immediate plans for the future and how the pandemic impacted operations, read on.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Big Tech Inc.

  • TikTok invests in AR: Social phenom TikTok wants to follow Snap and Facebook into the AR studio game. The company just “launched a new creative toolset called TikTok Effect Studio, currently in private beta testing, which will allow its own developer community to build AR effects for TikTok’s short-form video app,” TechCrunch reports. “How do you do, fellow kids?” but in AR? Brands are going to love this.
  • Because our Big Tech section was smaller than usual today, here’s one more from the startup beat: Future tech exits have a lot to live up to.

TechCrunch Experts: Growth Marketing

Illustration montage based on education and knowledge in blue

Image Credits: SEAN GLADWELL (opens in a new window) / Getty Images

Are you all caught up on last week’s coverage of growth marketing? If not, read it here.

TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this survey along to your clients; we’d like to hear about why they loved working with you.

Community

The cover of "After Cooling On Freon, Global Warming, and the Terrible Cost of Comfort"

Image Credits: Simon and Schuster

Join Danny Crichton tomorrow Tuesday August 24, at 3 p.m. PDT/6 p.m. EDT for a Twitter Spaces interview with Eric Dean Wilson, author of, “After Cooling: On Freon, Global Warming, and the Terrible Cost of Comfort.”

TechCrunch Disrupt 2021

It’s almost that time when startup followers from around the world gather at our annual conference, Disrupt, which will be held virtually again this year. Join the community September 21-23 to expand your horizons and your network with founders and CEOs of Coinbase, Dapper Labs, GitLab, Canva and more. Attend for less than $100, or you can get a free Innovator Pass if you are one of the first 10 people to register with promo code DAILYCRUNCHFREE. But you’ll want to hurry — it’s first-come, first-served, and once they’re gone, they’re gone!

News: Samsung’s Galaxy Z Flip 3 is the foldable to beat

I took a long walk on Saturday. It’s become a routine during the pandemic, a chance to unwind after too many hours indoors, while seeing parts of the city that would otherwise be lost to subway rides in normal years. Saturday was more purpose-driven, heading to a newly opened Trader Joe’s before Henri unleashed itself

I took a long walk on Saturday. It’s become a routine during the pandemic, a chance to unwind after too many hours indoors, while seeing parts of the city that would otherwise be lost to subway rides in normal years. Saturday was more purpose-driven, heading to a newly opened Trader Joe’s before Henri unleashed itself on the Eastern Seaboard.

Taking respite from the early rain, I found a food court in Long Island City, ordered a shawarma and pulled the Galaxy Z Flip from my pocket. I unfolded the phone, popped the new Galaxy Buds in my ears and watched a baseball game on the MLB.TV app. The Flip really made sense in that moment, open in landscape mode at a 135-degree angle to keep the 6.7-inch screen upright. When the game ended (spoiler, it didn’t end well), I snapped the phone shut, stuck it in my pocket and went on my way.

It doesn’t always come with a piece of new technology, but sometimes you get lucky and have an experience where it just clicks. There were plenty of jokes about the long-ago death of the clamshell when the first Flip arrived. Those won’t be going away anytime soon, of course, but the phone also offered the first sense for many that maybe Samsung was heading in the right direction with its foldable ambitions.

Image Credits: Brian Heater

Setting aside the early flaws with the first Galaxy Fold (we’ve covered them ad nauseum elsewhere), the device is also unwieldy. While it’s true the foldable screen affords you the ability to carry around a screen that might otherwise be impossible, it’s a large device when folded, and the opportunities to unfold don’t readily present themselves. The Flip splits the difference nicely between screen size and portability. In terms of display size, it’s effectively a Galaxy Note that snaps in two and fits nicely in your pocket.

Most of the talk of Samsung mainstreaming foldables has centered on the Galaxy Z Fold — mostly from the company itself. Samsung has made a big to-do about positioning the Fold as its latest flagship — augmenting or, perhaps replacing, the Note in its lineup. The Fold 3 certainly blurs the lines with the addition of S Pen functionality, but the Flip is the much clearer bridge between Samsung’s existing flagships and the foldable future it envisions.

Mainstreaming foldables was always going to be a tricky proposition. Right out of the gate, they were hit with negative coverage over production issues and prices; $2,000 is a lot to pay for a product you essentially have to handle with kid gloves. You shouldn’t have to worry about accidentally damaging your daily driver through normal use. The Flip benefits from the mistakes of earlier fold generations, getting a more robust design and water resistance as a result.

Perhaps even more importantly, however, is pricing. The Galaxy Z Flip is Samsung’s first foldable under $1,000. Now, granted, it’s literally one penny under that threshold — a price point that puts it in line with expensive premium phones from the likes of Samsung and Apple. But in the world of foldables, that’s a really big win. The first couple of generations could — to some degree — survive on novelty alone.

Image Credits: Brian Heater

As more of these devices make their way into the world, utility supersedes novelty. But growing popularity also means scale — and, as a result, price drops. For the first time, buying a Samsung foldable is not the financial equivalent of buying two phones. That’s a much more significant threshold than the Galaxy Fold dropping $200 over its previous generation.

The company noted this week, that “in just 10 days since announcement pre-orders for the Galaxy Z Fold3 and Galaxy Z Flip3 have already surpassed total global Samsung foldables sales in all of 2021, also making it the strongest pre-order for Samsung foldables ever.” There are a lot of factors here, including a lower price, more robust design, the absence of a new Note and an aggressive push to get consumers to preorder. But it’s safe to say the line is, at the very least, trending the right way.

Expectedly, the company’s numbers don’t break down sales in terms of Fold versus Flip. Admittedly, the Fold is more fully featured, and 7.6 inches of screen is better than 6.7 inches of screen, when it comes, to, say, watching a full movie. But for most people in most instances, the Galaxy Flip is a better choice. I can say with no hesitation: The Samsung Galaxy Z Flip is the most mainstream foldable on the market.

If you’re not sold on the importance of foldables, such a statement understandably doesn’t mean much. But for a vast majority of people looking to make the leap to what is increasingly looking like a key part of the mobile future, the Flip is an obvious choice. And while it’s easy to make fun of the clamshell design as a relic of a bygone era, there’s a reason phones went that way in the first place. One assumes a big part of the reason they largely went away is that — until now — smartphones weren’t foldable.

Image Credits: Brian Heater

Samsung gets the design language right here. The Flip 3 is easily the company’s best-looking foldable to date. The dual-color shell is striking. The company sent along a cream color, which I’m not particularly fond of, but the green, lavender and even plain black or white are quite striking. It pairs well with the strip of black that houses the exterior display, which has been bumped from 1.1 to 1.9 inches. It doesn’t sound like a lot, sure, but that’s a healthy increase on a screen this size.

Of course, you’re losing the full exterior screen functionality you get on the Fold. The Flip’s display is effectively a quick-glance secondary screen for notifications. Pull it out, and it shows you the time, date and how much battery you’ve got left. Swipe right and you’ll see your notifications.

Swipe left and you get an alarm or timer, with the option of adding more widgets to the screen, including weather, media playback (effectively audio play/pause) and Samsung Health Metrics. It’s a small list, but one that will no doubt increase if more people pick up the Flip. Swipe down for some quick settings and Swipe up for Samsung Pause.

In a time when many of us are trying to make a concerted effort to minimize our phone use, I appreciate the dichotomy between the two screens. It’s a much clearer line in the sand than the one separating the Fold’s 6.2- and 7.6-inch screens. Phone closed = checking my notifications. Phone open = engagement. When the time comes to open the phone, the Flip is a much easier proposition than the phones. I haven’t quite mastered the art of the one-handed open just yet, but it’s much easier to execute on the fly than the Fold, which is effectively like opening a book. The biggest downside to the form factor in terms of speed is there’s no quick way to fire off a photo.

Image Credits: Brian Heater

Taking photos is far more deliberate, requiring one to open the phone to see the internal view finder. You can, however, snap off some selfies by double-pressing the power button, with the small front-facing screen doubling as a small viewfinder. Swiping to the left toggles between still, while swiping up and down changes the level of zoom. It’s a bit awkward and clunky, but the pair of 12-megapixel cameras (wide and ultra-wide) will get you a much better selfie than most pinhole cameras (including the Flip’s 10 megapixel lens).

Like the Fold, the rear cameras (which are also the front-facing cameras, depending on how you look at it) are largely unchanged since the Flip 2. A dual-camera system can feel almost antiquated in 2021, but for most intents and purposes, they do the trick, coupled with Samsung’s many years of camera software experience. The 22:9 aspect ratio means more than a quarter of the screen is occupied by the controls out of necessity.

The aspect ratio in general merits comment. It’s, like, really, really tall when open. It’s a nice amount of real estate to have when, say, scrolling through Gmail or Twitter. But when watching video, you’ll often encounter pillarboxing — letterboxing on the sides of the screen. The video world simply isn’t ready for 22:9, and quite frankly, it probably won’t ever be.

And then, of course, there’s the seam. It’s right there in the center of the lovely 2640 x 1080, 425 ppi screen. And barring some unforeseen breakthrough in foldable tech, I frankly don’t see it disappearing any time soon. I understand why that might be a deal breaker, though I’ve largely gotten used to it after spending time with these devices.

Like the Fold, the Flip runs on the Snapdragon 888 processor. Predictably, the lower cost comes with less in the way of RAM and storage, at 8 and 128GB on the Flip, to the Fold’s 12 and 256GB. Another $150 will upgrade the storage 256GB here. While Samsung mostly hasn’t skimped much on the internals, the 3,300 mAh battery does fall short.

Battery life is an issue with the Fold and an even bigger problem on the Flip — in fact, it’s the biggest complaint here. Moderate to heavy use is going to require getting near a charging cable before the day is over. Maybe not a huge deal in these pandemic days, but something to consider as we re-enter the world. Certainly long, unplugged plane rides are out of the question.

Image Credits: Brian Heater

Again, I can totally sympathize with that being a deal breaker. You pay $1,000 for a phone, you want a battery that’s going to get you through a day of use, worry-free. And certainly it’s something for Samsung to focus on in gen four.

As it stands, the Galaxy Z Flip 3 has the benefit of previous generations, with a stronger aluminum frame, improved screen protector and IPX8 water resistance (no dust resistance rating, for reasons outlined in the Fold review). It’s not a perfect phone, but it’s a strong sign of how far Samsung’s foldables have come in three generations, coupled with a sub-$1,000 price point.

The device is likely to be second fiddle as the company continues to push the Fold as its flagship foldable. But for most people looking to enter the world of foldable phones, the Flip is the easy choice.

News: SpaceX ships 100,000 Starlink terminals to customers, eyes future launches using Starship

Elon Musk’s Starlink project, which aims to provide global broadband connectivity via a constellation of satellites, has shipped 100,000 terminals to customers. 100k terminals shipped!https://t.co/Q1VvqVmJ2i — Elon Musk (@elonmusk) August 23, 2021 It’s a jaw-dropping pace for the capital-intensive service, which began satellite launches in November 2019 and opened its $99/month beta program for select

Elon Musk’s Starlink project, which aims to provide global broadband connectivity via a constellation of satellites, has shipped 100,000 terminals to customers.

100k terminals shipped!https://t.co/Q1VvqVmJ2i

— Elon Musk (@elonmusk) August 23, 2021

It’s a jaw-dropping pace for the capital-intensive service, which began satellite launches in November 2019 and opened its $99/month beta program for select customers around a year later. Since that period, SpaceX has launched more than 1,700 satellites to date and — in addition to the 100,000 shipped terminals — has received over half a million additional orders for the service.

In some ways, it’s no surprise that SpaceX has managed to accelerate its Starlink service so quickly, as the company launches the satellites itself on the Falcon 9 rocket. Such vertical integration is a key strategy of the space company, now the highest-valued in the world.

Many of Starlink’s beta customers live in remote or rural areas, where access to conventional broadband is limited or nonexistent. Customers pay a $499 upfront cost for the service, which covers a starter kit to get them off the ground: a user terminal (which SpaceX lovingly refers to as “Dishy McFlatface”), Wi-Fi router, power supply, cables and a mounting tripod.

But while Starlink’s rapid growth reflects an aggressive strategy, it’s just the beginning for the project, if SpaceX has anything to say about it. The company ultimately wants to launch around 30,000 Starlink satellites into orbit, and expand its user pool to millions of customers. In an application for the next generation Starlink system, submitted to the Federal Communication Commission on August 18, SpaceX proposed two separate configurations for the constellation, one of which would use its next-gen Starship heavy-lift rocket.

That constellation would top out at 29,988 satellites in total; SpaceX also proposed an alternate configuration using its Falcon 9 rocket. But the obvious advantage of Starship is its massive-size payload capacity.

“SpaceX has found ways to leverage the advanced capabilities of its new launch vehicle, Starship, that has increased capability to deliver more mass to orbit quickly and efficiently and, combined with reuse capability of the upper stage, launch more often,” the company said in the amended application.

News: Rocket Lab’s Mars mission gets green light from NASA

Rocket Lab is one step closer to going to Mars with NASA’s approval of the company’s Photon spacecraft for an upcoming science mission. If all continues according to plan the two craft will launch in 2024 and arrive on the red planet 11 months later to study its magnetosphere. The mission is known as the

Rocket Lab is one step closer to going to Mars with NASA’s approval of the company’s Photon spacecraft for an upcoming science mission. If all continues according to plan the two craft will launch in 2024 and arrive on the red planet 11 months later to study its magnetosphere.

The mission is known as the Escape and Plasma Acceleration and Dynamics Explorers, or ESCAPADE (hats off to whoever worked that one out), and was proposed for a small satellite science program back in 2019, eventually being chosen as a finalist. UC Berkeley researchers are the main force behind the science part.

These satellites have to be less than 180 kilograms (about 400 pounds) and must perform standalone science missions, part of a new program aiming at more lightweight, shorter lead missions that can be performed with strong commercial industry collaboration. A few concepts have been baking since the original announcement of the program, and ESCAPADE just passed Key Decision Point C, meaning it’s ready to go from concept to reality.

This particular mission is actually a pair of satellites, a perk that no doubt contributed to its successful selection. Rocket Lab’s whole intention with the Photon program is to provide a more or less turnkey design for various space operations, from orbital work to interplanetary science missions like this one.

Interestingly, Rocket Lab won’t actually be launching the mission aboard one of its Electron rockets — the satellites will be aboard a “NASA-provided commercial launch vehicle,” which leaves it up to them. Perhaps by that time the company will be in the running for the contract, but for now Rocket Lab is only building the spacecraft, including most of the nonscientific onboard components: navigation, orientation, propulsion, etc.

“ESCAPADE is an innovative mission that demonstrates that advanced interplanetary science is now within reach for a fraction of traditional costs, and we’re proud to make it possible with Photon. We are delighted to receive the green light from NASA to proceed to flight,” said Rocket Lab founder and CEO Peter Beck in the company’s announcement of the milestone.

Rocket Lab is already under contract to lift a CubeSat to cislunar orbit for Artemis purposes, and has locked in a deal with Varda Space Industries to build that company’s spacecraft, for launch in 2023 and 2024.

News: Elastic acquires build.security for security policy definition and enforcement

Less than a year after raising its $6 million seed funding round, Tel Aviv and Sunnyvale-based startup Build.security is being acquired by Elastic. Financial terms of the deal are not being publicly disclosed at this time. The deal is expected to close in Elastic’s Q2 FY22, ending Oct. 31, 2021. In an email to TechCrunch,

Less than a year after raising its $6 million seed funding round, Tel Aviv and Sunnyvale-based startup Build.security is being acquired by Elastic. Financial terms of the deal are not being publicly disclosed at this time. The deal is expected to close in Elastic’s Q2 FY22, ending Oct. 31, 2021.

In an email to TechCrunch, Ash Kulkarni, chief product officer at Elastic, said that once the acquisition closes, the build.security technical team will continue as a unit in the Elastic Security organization. Kulkarni added that the acquisition will also become the foundation for a growing Elastic presence in Israel, with Amit Kanfer, co-founder and CEO of build.security set to become the site lead for the region.

Build.security is focused on security policy management for applications. A core element of the company’s technology approach is the Open Policy Agent (OPA) open source project, which is part of the Cloud Native Computing Foundation (CNCF), which is also home to Kubernetes. OPA was originally started by startup Styra, which itself has raised $40 million in funding to help build out policy management and authorization technology. Part of OPA is the Rego query language which is used to structure security and authorization configuration policies.

“We see policy as a fundamental cornerstone of security,” Kulkarni said. “OPA and Rego provide an open, standards-based way to define, manage, and enforce policies everywhere.”

Kulkarni noted that security policy technology is complementary to Elastic’s efforts in security and observability. He added that Elastic sees potential for using OPA and the technology that build.security has built on top of OPA to power deployment time, and in the future, build-time security for cloud-native environments. 

YL Venture partner John Brennan who helped to lead the seed round of build.security sees the acquisition as being a good fit for both companies, as they are both creating solutions for developers that are based on open source technologies.

“This move by a market leader like Elastic validates the need for transformation in the authorization space,” Brennan said. “This partnership will accelerate build.security’s shift left vision of efficiently embedding access protection from the start, rather than trying to bolt it on after the fact or, worse, ignoring it completely.”

Elastic is known for its Elastic Stack, which provides Elasticsearch search capability, Logstash log monitoring and Kibana data visualization. In recent years the company has expanded into the security space, acquiring Endgame Security in 2019 for $234 million. On Aug. 3, Elastic announced its Limitless XDR capabilities which brings together endpoint security with security information and event management (SIEM).

With its new acquisition, Kulkarni said the goal is to go even deeper into security moving toward cloud security enforcement. He explained that after the acquisition closes and as the technology is integrated, users will be able to leverage the Elastic Stack to visualize and manage compliance policies and policy decisions at scale. An initial use-case for the build.security technology will be developing a Kubernetes security and compliance product based on OPA.

 

News: How Cisco keeps its startup acquisition engine humming

Cisco has a rich history of buying its way to global success. And it’s remained quite active, acquiring more than 30 startups over the last four years for a total of 229 over the life of the company.

Enterprise startups have several viable exit strategies: Some will go public, but most successful outcomes will be via acquisition, often by one of the highly acquisitive large competitors like Salesforce, Microsoft, Amazon, Oracle, SAP, Adobe or Cisco.

From rivals to “spin-ins,” Cisco has a particularly rich history of buying its way to global success. It has remained quite active, acquiring more than 30 startups over the last four years for a total of 229 over the life of the company. The most recent was Epsagon earlier this month, with five more in its most recent quarter (Q4 FY2021): Slido, Sedona Systems, Kenna Security, Involvio and Socio. It even announced three of them in the same week.

It begins by identifying targets; Cisco does that by being intimately involved with a list of up to 1,000 startups that could be a fit for acquisition.

What’s the secret sauce? How it is going faster than ever? For startups that encounter a company like Cisco, what do you need to know if you have talks that go places with it? We spoke to the company CFO, senior vice president of corporate development, and the general manager and executive vice president of security and collaboration to help us understand how all of the pieces fit together, why they acquire so many companies and what startups can learn from their process.

Cisco, as you would expect, has developed a rigorous methodology over the years to identify startups that could fit its vision. That involves product, of course, but also team and price, all coming together to make a successful deal. From targeting to negotiating to closing to incorporating the company into the corporate fold, a startup can expect a well-tested process.

Even with all this experience, chances are it won’t work perfectly every time. But since Cisco started doing M&A nine years into its history with the purchase of LAN switcher Crescendo Communications in 1993 — leading to its massive switching business today — the approach clearly works well enough that they keep doing it.

It starts with cash

If you want to be an acquisitive company, chances are you have a fair amount of cash on hand. That is certainly the case with Cisco, which currently has more than $24.5 billion in cash and equivalents, albeit down from $46 billion in 2017.

CFO Scott Herren says that the company’s cash position gives it the flexibility to make strategic acquisitions when it sees opportunities.

“We generate free cash flow net of our capex in round numbers in the $14 billion a year range, so it’s a fair amount of free cash flow. The dividend consumes about $6 billion a year,” Herren said. “We do share buybacks to offset our equity grant programs, but that still leaves us with a fair amount of cash that we generate year on year.”

He sees acquisitions as a way to drive top-line company growth while helping to push the company’s overall strategic goals. “As I think about where our acquisition strategy fits into the overall company strategy, it’s really finding the innovation we need and finding the companies that fit nicely and that marry to our strategy,” he said.

“And then let’s talk about the deal … and does it make sense or is there a … seller price point that we can meet and is it clearly something that I think will continue to be a core part of our strategy as a company in terms of finding innovation and driving top-line growth there,” he said.

The company says examples of acquisitions that both drove innovation and top-line growth include Duo Security in 2018, ThousandEyes in 2020 and Acacia Communications this year. Each offers some component that helps drive Cisco’s strategy — security, observability and next-generation internet infrastructure — while contributing to growth. Indeed, one of the big reasons for all these acquisitions could be about maintaining growth.

Playing the match game

Cisco is at its core still a networking equipment company, but it has been looking to expand its markets and diversify outside its core networking roots for years by moving into areas like communications and security. Consider that along the way it has spent billions on companies like WebEx, which it bought in 2007 for $3.2 billion, or AppDynamics, which it bought in 2017 for $3.7 billion just before it was going to IPO. It has also made more modest purchases (by comparison at least), such as MindMeld for $125 million and countless deals that were too small to require them to report the purchase price.

Derek Idemoto, SVP for corporate development and Cisco investments, has been with the company for 100 of those acquisitions and has been involved in helping scout companies of interest. His team begins the process of identifying possible targets and where they fall within a number of categories, such as whether it allows them to enter new markets (as WebEx did), extend their markets (as with Duo Security), or acqui-hire top technical talent and get some cool tech, as they did when they purchased BabbleLabs last year.

News: OnlyFans’ explicit content ban should spark a conversation about a creators’ bill of rights

OnlyFans’ decision to ban sexually explicit content is reigniting an important and overlooked conversation around tech companies, content guidelines and sex work.

Bremner Morris
Contributor

Bremner Morris is CMO/CRO of Rally, a crypto platform that allows creators and artists to launch their own digital currency and build sustainable, independent economies with their fan communities. Previously, he was head of global go-to-market and revenue at Patreon.

OnlyFans’ decision to ban sexually explicit content is reigniting an important and overlooked conversation around tech companies, content guidelines and sex work. However, the implications of this discussion go beyond just one platform and one marginalized group.

It’s indicative of a broken ecosystem for content creators where platforms have outsized control over the ways in which creators are allowed to share content and engage with their followers and fans. In response, creators are decentralizing, broadening their reach to multiple platforms and taking their audiences with them.

In doing so, creators also have the opportunity to define what rights they want to be built into these platforms.

History repeats itself

Creators being shut out of the individual platforms is nothing new. Many are comparing OnlyFans’ policy change to Tumblr’s move to ban adult content in 2018. This has been an ongoing issue for YouTube as well — several communities, including a group of LGBTQ YouTubers, have accused the platform of targeting them with their demonetization algorithm.

Many of these platforms, including OnlyFans, point to their payment partners’ policies as a barrier to allowing certain forms of content. One of the earliest major controversies we saw in this arena was when PayPal banned WikiLeaks in 2010.

While each of these events have drawn the ire of creators and their followers, it’s indicative of an ecosystemwide problem, not necessarily an indictment of the platforms themselves.

After all, these platforms have provided the opportunity for creators to build an audience and engage with their fans. But these platforms have also had to put policies in place to shield themselves from regulatory and reputational risk.

The core of the issue is that creators are beholden to individual platforms, always vulnerable to changing policies and forced to navigate the painful migration of their audiences and monetization from platform to platform.

That doesn’t mean that that all guidelines and policies are bad — they play a role to foster and govern a positive and safe community with thoughtful guidelines — but it should not come at the cost of harming and de-platforming the creators who fuel these platforms with content and engagement. The core of the issue is that creators are beholden to individual platforms, always vulnerable to changing policies and forced to navigate the painful migration of their audiences and monetization from platform to platform.

And, at the end of the day, it takes away from their ability to create meaningful content, engage with their communities and earn a reliable living.

As creators have lost more and more control to platforms over time, some have begun exploring alternative options that allow independent and direct monetization from their audience in a distributed way.

Decentralizing, monetizing

The direct-to-fan monetization model is already displacing the traditional ad-based, platform-dictated model that creators relied on for years. During my time at Patreon, I saw how putting control and ownership in the hands of creators builds a more sustainable, fair and vibrant creator economy. Substack has given writers a similarly powerful financial tool, and over the past few years, there has been an ever-growing number of companies that serve creators.

The challenge is that many of these companies rely on the existing systems that hamstrung the platforms of the past, and have business models that require take rates and revenue shares. In many ways, the creator economy needs new infrastructure and business models to build the next phase of creator and fan interaction.

With the right application, crypto can help rewrite the playbook of how creators monetize, engage with their fans and partner with platforms. Its peer-to-peer structure reflects the direct-to-fan relationship and allows creators to own the financial relationship with their audience instead of relying on tech giants or payment partners as middlemen. Beyond that, crypto allows creators to maintain ownership and control over their brands and intellectual property.

Additionally, many crypto projects allow participants to have a voice in the value proposition, strategic direction, operational functions and economic structures of the project via DAOs or governance tokens. In this way, creators can join projects and set the direction in a way that aligns with how they want to engage with their communities.

Creators are especially positioned to benefit from community-governed projects given their ability to motivate and engage their own communities. We are in the early phases of crypto adoption, and creators have a huge opportunity to shape the future of this paradigm shift. With social tokens, creators can mint their own cryptocurrencies that allow for a shared economy that creators and fans can grow together and use to transact directly across different platforms.

NFTs are another category that have exploded in popularity this year, but the industry is just scratching the surface of the utility that they will have. Creators and crypto projects are figuring out ways to make NFTs go beyond collectibles; NFTs provide an engaging and functional digital tool for creators to give their fans their time (through video calls or AMAs) or access to other exclusive benefits.

Creators are just beginning to discover the power that crypto provides. As the user experience of crypto-based platforms continues to become more intuitive, crypto will become ubiquitous. Before that point, creators should think about what rights they need (and can demand) from the decentralized services they use.

A creators’ bill of rights

Be it within crypto or not, creators finally have the leverage to determine their rights. While I believe that creators should be the ones leading this conversation, here are a few jumping off points:

  • Ability to move freely across platforms: Reliance on individual platforms is at the heart of many of the issues that creators face. By allowing creators to take their fans with them wherever they go, many of the problems we’ve seen even with direct-to-fan monetization can be solved.
  • Direct financial relationships between creators and fans: At the heart of the OnlyFans matter is creators’ inability to own their financial relationships with fans. Even if direct financial relationships aren’t feasible on every platform, creators should have options to own those relationships and dictate their own terms.
  • Creator-led decision-making: Historically, platforms have given creators minimal control over platformwide decisions and policies. Creators should have direct input and even be able to vote on various platformwide measures.
  • Quality over quantity: Platforms and their algorithms are structured to reward quantity and force creators down a path of burnout and hyperspeed content creation. Both creators and fans are looking for a more deep and engaging interaction and incentivizing this behavior will ensure a more vibrant and sustainable creator ecosystem.
  • Low (or zero) take rates: Big tech platforms take nearly 100% of revenue from creators. Creators (and their fans) should be earning the majority of platform revenue.
  • Equity access or revenue sharing: Big tech platforms have built empires on the labor of creators. Instead of dictating ad revenue payout to creators, decentralized platforms should allow creators to have true “skin in the game” by being able to own a piece of the pie outright or benefit from the overall growth of the ecosystem. This alignment of interests will be a major shift from the capital-labor split we see today.
  • Transparency and consultation: Creators should have full view into what they can or can’t do and a seat at the table as policies are being created and adapted. Platforms’ content moderation decisions and the algorithms behind demonetization are often opaque, broadly applied and decided without consulting the creators they will impact. They should also have visibility into the size of the overall revenue pie and their share.
  • Ability for reform and rehabilitation: We are all human, and there might be moments that a creator knowingly or unknowingly goes outside of the guidelines set by a platform. Creating a space for creators to rehabilitate their content will create a more trusting and collaborative relationship between creators and platforms.

We’ll leave it to creators to dictate their terms — they’ve been cut out of this conversation for far too long. That said, I’m confident that Rally and many other key participants in the Web 3.0 ecosystem would be open to supporting this effort to create an environment that works for creators and their fans.

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