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News: Embedded finance won’t make every firm into a fintech company

• August 12, 2021
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Starbucks offers an integrated wallet and payments within its app, and Lyft offers its drivers a debit card. But that doesn’t make them fintech companies.

A short decade after software started eating the world, along came headlines about every company becoming a fintech thanks to innovation and growth in embedded finance business models.

This narrative oversimplifies the evolution that’s happening in the financial services sector. Storing and moving money and extending credit in a regulated environment is difficult. And differentiating your offering from incumbent financial institutions requires much more than superficial tweaks.

What really makes a fintech company extends far beyond user interface enhancements and delivering financial services to end customers. It’s what’s “under the hood” — the full-stack approach that allows fintech companies to truly innovate for their customers.

Embedded finance helps companies and brands outside of the core financial sector distribute financial services. This requires varying levels of effort from the company and looks like anything from Starbucks offering an integrated wallet and payments within its app to Lyft offering a debit card to their drivers. But that doesn’t make Starbucks or Lyft fintech companies.

The fallacy behind the hype

The “every company will be a fintech” stance investors are bullish on conflates multiple approaches to inlaying financial offerings, coupling the resurgence of white-labeled financial services (which have been around for decades) with the rising banking, payments and lending-as-a-service players. The latter approach allows companies to customize their financial product experience while outsourcing many core financial services tasks. The former is simply distribution through embedded delivery.

There are four core tenets to fully operate as a financial services provider: a customer-facing product, transactional infrastructure, risk management and compliance, and customer servicing. In the case of lending, there is a fifth tenet: Companies also need to be able to manage capital. Embedded financial services help companies sidestep the majority of what it really means to be a fintech.

White-labeling versus “becoming a fintech”

While embedded finance is hot today, white-labeled financial services have been around for decades. Branded credit cards, for example, are a common paradigm for white-labeling. They quickly became a lasting way to incentivize consumer loyalty but don’t signal real effort or know-how in financial services. United and Alaska don’t run credit checks, configure billing or handle disputes for cardholding customers, nor do they assume any risk by embossing their logo on a card. The partnerships are major money makers for airlines while the risk stays on the financial institutions’ side (Chase, Bank of America and Visa). This risk can even account for significant loss on the financial side: According to American Express, 21% of its outstanding credit card loans belonged to people with a Delta credit card a few years ago.

This white-labeling approach is becoming common for other services, coming to life in forms like banking offerings from cell carriers, and it’s by design: Financial services are complex and highly regulated, so brands prefer to defer most of the work to the experts. So while United, Delta or T-Mobile offer financial services under their brand, they are definitely not becoming fintech companies.

In contrast, some corporations are seeing the opportunity to build financial services from the ground up. Walmart’s move to snag Goldman Sachs talent to lead its foray into finance (with Ribbit at the helm) shows promise for a true fintech spinout.

The investment in expertise in compliance and risk management furthers the company’s potential to build detailed and relevant infrastructure from the get-go — a significant step beyond the retailer’s many existing white-labeled financial partnerships.

The limitations of platforms as a service

Tools and turnkey solutions that help non-finance companies build financial applications more recently came into the mix: VCs are enthusiastic about new players building embedded payments, lending and, more recently, banking platform services (also known as BaaS) through APIs and backend tools.

As opposed to financial infrastructure services provided directly by sponsor banks or processors providing payments or ledger services, these platforms abstract the underlying infrastructure, wrap them with friendly-to-use APIs, and bundle core financial elements like risk management, compliance and servicing. While these platforms do offer some self-efficacy for companies to provide financial services, their major limitation is that they’re general purpose by design.

Fintechs found an opportunity to serve customers overlooked and underserved by traditional finance through specialization. Traditional financial institutions long applied the generalist model, carrying hundreds of SKUs and serving all segments. This strategy inevitably led banks to invest more in services for their most profitable customers, optimizing for their needs. Less profitable segments were left with stale and one-size-fits-all offerings.

Fintechs’ success with these underserved segments is derived from a relentless pursuit and laser focus on addressing core customers’ unique needs, building products and services designed for them. In order to deliver on this promise, fintechs must innovate across all layers of the stack — from the product experience and feature set to the infrastructure and risk management, all the way down to servicing.

UI is not nearly enough to differentiate, and addressing customers’ needs while minding overall unit economics is critical. One fintech’s choices on these matters may be completely different from another if they address different segments — it all boils down to tradeoffs. For example, deciding on which data sources to use and balancing between onboarding and transactional risk look different if optimizing for freelancers rather than larger small businesses.

In contrast, third-party platform providers must be generic enough to power a broad range of companies and to enable multiple use cases. While the companies partnering with these services can build and customize at the product feature level, they are heavily reliant on their platform partner for infrastructure and core financial services, thus limited to that partner’s configurations and capabilities.

As such, embedded platform services work well to power straightforward commoditized tasks like credit card processing, but limit companies’ ability to differentiate on more complex offerings, like banking, which require end-to-end optimization.

More generally and from a customer’s perspective, embedded fintech partnerships are most effective when providing confined financial services within specific user flows to enhance the overall user experience.

For example, a company can offer credit at the point of sale through a third-party provider to enable a purchase. However, when considering general purpose and standalone financial services, the benefits of embedded fintech are much weaker.

Building a product of choice

The biggest proponents of embedded finance argue that large companies and brands can be successful with finance add-ons on their platforms because of their brand recognition and install base.

But that overlooks the reality of choice in the market: Just because a customer does one facet of their business with a company doesn’t necessarily mean they want that company as their provider for everything, especially if the service is inferior to what they can get elsewhere.

While the fintech market booms and legacy brands continue to buy into the opportunity, verticalized, full-stack fintechs will trump their generic offerings time and time again. Some aspects of embedded finance and white-labeling will continue to crop up or prevail, like payment processing and buy now, pay later services. But customers will continue to choose the banks/neobanks, lenders and tools built for them and their own unique needs, bucking the “every company is a fintech” fallacy.

News: Sequoia leads $13M investment in Aalto, an online marketplace that lets homeowners sell directly to buyers

• August 12, 2021
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If you’ve ever sold a house, you know what a pain it is to go through the process of listing, showing and negotiating the sale of your home. It’s so much of a pain that many people put it off as long as possible because they don’t want to deal with it. The result is

If you’ve ever sold a house, you know what a pain it is to go through the process of listing, showing and negotiating the sale of your home.

It’s so much of a pain that many people put it off as long as possible because they don’t want to deal with it. The result is fewer homes on the market, which exacerbates existing housing shortages in already tight markets such as the San Francisco Bay Area.

In an attempt to help address the problem, one startup called Aalto has built out a new kind of homeowner marketplace. It’s a private one that doesn’t rely on the MLS, and gives sellers more control of how and when their homes are listed, shown and sold. Today Aalto is emerging from stealth and announcing that it has raised $13 million in a Series A funding round led by Sequoia Capital. 

Background Capital, Defy Partners, Maple VC and Greg Waldorf — the first investor at Trulia — also participated in the financing, which brings Aalto’s total raised to $17.3 million since its 2018 inception.

Aalto’s online marketplace, which launched in April of this year, directly connects homeowners to buyers. The company claims that a potential seller can list their home on its platform in five minutes, rather than a typical process that is closer to five weeks. Since launching in the Bay Area, Aalto has built up a network of more than 30,000 buyers and more than two dozen homes have been sold via the marketplace. Currently, about 85 homes are listed for sale on its platform, with an average of one new home being added per day. 

Ironically, Aalto founder and CEO Nick Narodny is the son and brother of real estate agents. He concedes that the startup’s platform could be seen as a threat to the industry, but notes the trade-off is that more homes end up on the market, which helps minimize the region’s affordability crisis, and sellers see higher returns.

Currently, 5-10% of total available inventory listed in competitive markets like Dublin, Fremont, Mill Valley and Milpitas are listed on the Aalto platform. And, Narodny said, the company is on its way to bring more homes to market, sooner.

“Buying or selling a home is one of the biggest events people will ever experience, but it’s also a tedious, outdated process,” he said. 

Aalto aims to double the number of homes on the market in the Bay Area by streamlining the way homeowners can list, without the third-parties or contracts required elsewhere. This dramatically lowers the bar to sell, according to Narodny, bringing homes to market an average of four and a half months earlier than traditional real estate processes.

The platform offers a preview listing feature that allows sellers to list with no commitment. They can also build a waitlist of qualified buyers for their home while they consider a sale. 

“We pull the tax record and info to make it super easy and ask the seller to fill out a Q&A,” Narodny said. After filling out that info, sellers can then see interested buyers and those that are prequalified or that can make all cash offers.

The process is also less intrusive, Narodny said, by giving the seller more of a say in who sees their home and when. For example, sellers can also line up virtual or in-person showings on their own schedule. And they can sell the homes on their timelines — whether it be in a few weeks, or few months.

For example, a San Francisco-based hand surgeon recently listed his home on the Aalto platform with the desire of moving at the end of October. More than two dozen people were interested and he allowed a few people to tour the home. He was able to sell the house based on a timeline that was more beneficial for him.

“People can sell totally on their terms and are much more connected in the process,” Narodny said. Busy professionals such as the surgeon with director and above titles and growing families so far are among the most common sellers on the platform.

Also, there is an economic benefit. By removing a middleman, or agent, from the process, sellers can make an average of $44,000 more on their home sale, according to Narodny. The startup charges a 1% fee, compared to the 2-2.5% commission that an agent charges. But if a seller requires help “with the hard stuff,” Aalto has “expert, licensed” people available.

Sellers can also craft descriptions of their homes in a way that comes across as more personal than if an agent does it, according to Narodny.

“We have them tell their own story of their home,” he said.

It also gives them more privacy. For example, an MLS will show when a home was listed and any price reductions. A home listed on Aalto won’t include any of that information. Also similar to Airbnb, the seller’s exact address is not shared, just a radius. 

The benefit for buyers — besides having more options — is the ability to set up instant alerts, join waitlists and schedule showings in one easy-to-use platform. They can also “anonymously prequalify and share that with a seller,” Narodny said.

Bryan Schreier, partner at Sequoia Capital, believes that real estate is “one of the last giant industries with a 1900s experience.”

“It’s a painful process where the seller has limited visibility and the buyer is holding their breath after every bid,” he said. “Aalto is the first company to reinvent how homes are bought and sold by putting the consumer first. It goes far beyond a listing site and reinvents every aspect of the experience to be customer oriented rather than realtor oriented.”

Looking ahead, the company plans to expand beyond the Bay Area to other major metropolitan real estate markets in California and across the country. It also plans to use its new capital to continue improving its technology.

Meanwhile, Narodny insists that while the platform may be seen as a threat by some agents, it’s not a malicious thing.

“My family and I are very close. It’s something that I talk about with them quite a bit,” he told TechCrunch. “I believe Aalto truly is additive. We still work with them every day and will continue to…It’s not like agents are totally being replaced.”

News: Foxconn plans to build EV factories in the US and Thailand in 2022

• August 12, 2021
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Foxconn is getting more serious about its electric vehicle ambitions. The company told investors during an earnings call that it plans to build EV factories in the US and Thailand in 2022.

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

News: Seth Rogen is coming to TechCrunch Disrupt to talk about the weed business

• August 12, 2021
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TechCrunch is thrilled to announce Seth Rogen is coming to TechCrunch Disrupt this September. The movie-star-turned-pot-businessman is speaking on his latest venture: Houseplant, his privately funded entrée into the cannabis business. Houseplant made a big splash when it launched in 2021, and it continues to get a lot of attention in the noisy world of

TechCrunch is thrilled to announce Seth Rogen is coming to TechCrunch Disrupt this September. The movie-star-turned-pot-businessman is speaking on his latest venture: Houseplant, his privately funded entrée into the cannabis business.

Houseplant made a big splash when it launched in 2021, and it continues to get a lot of attention in the noisy world of cannabis. But, of course, having Seth Rogen involved helps keep the company relevant.

You know Seth. Seth Rogen is one of the biggest stars in the entertainment world and isn’t shy about his use of cannabis — the plant is nearly a co-star in each of his movies. And now he’s selling different strains and lifestyle house goods, too.

Houseplant quickly gained a large following. As a result, we have a lot of questions. First, we want to know about Houseplant’s trajectory and its involvement with the cannabis giant, Canopy Growth. And then there’s Houseplant’s use of social media, which is instrumental in the company’s success. How can other cannabis companies learn from Houseplant’s strategies? And then there’s the celebrity angle, too. How can a brand net a high-profile spokesperson or investor, and at what cost?

Houseplant isn’t just a variety project for co-founders Seth Rogen and Evan Goldberg. This company can become a significant player in the cannabis world, and we’re thrilled to have Seth on our stage, answering questions and giving advice.

Passes are now available for the virtual show and there’s a handful of pass options with discounts for founders, students and non-profits. Get your ticket soon though, prices more than double on September 20. We hope to see you online.

News: New York City’s enterprise tech startups could be heading for a super-heated exit wave

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All told there were 22 venture rounds for New York City enterprise startups worth $100 million or more in H1 2021. How did they raise so much?

We lied when we said that The Exchange was done covering 2021 venture capital performance. Yesterday, we dug into preliminary Q3 data for the Chinese startup market. This morning, we’re looking back at just what startups in New York City managed in the first half of the year.

Some startups, at least. We paged through a report from New York City-based Work-Bench, a venture capital group focused on enterprise technology. The firm ran the numbers on Q1 and Q2 venture performance in their target market. What emerged from the data is a startup market busy accelerating its ability to raise capital, mint unicorns and, increasingly, generate outsized exits.

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Gone are the days when the New York startup ecosystem, perennially in Silicon Valley’s shadow, was more hype than substance. (In recent news, Work-Bench recently raised a new $100 million fund.)

There’s a lot to chat through, so we got Work-Bench partner Jonathan Lehr — one half of a founding pair that includes Jessica Lin — to answer our questions. Let’s explore just how large the New York City venture capital market has grown, where the funds are flowing in enterprise-startup terms, and discuss the pace at which the city is minting new unicorns — can it find enough exits for so many $1 billion startups?

That final question is one that we have about essentially every startup hub in the world. Perhaps New York City will provide a blueprint for how to think about an ever-larger unicorn stable that seems to have a wider entrance than exit.

A venture bonanza

At a state level, New York had a huge start to 2021. As with many startup ecosystems, there was far more venture capital activity in the state during the first half of 2021 than in the same period of 2020.

CB Insights data paints a clear picture: In the first half of 2020, New York-based startups raised $7.6 billion across 667 rounds. In the first half of 2021, however, those numbers swelled to $22.4 billion from 847 deals.

Enterprise venture funding saw similar gains. Per the Work-Bench report, enterprise startups in New York City raised $6.7 billion in the first and second quarters of this year, up 146% from the first half of 2020, when $2.7 billion was raised. Even more notable, Work-Bench reports that venture funding of enterprise startups in its city was up 12x in H1 2021 compared to a full-year 2014 tally.

In a nutshell, the figures detail the rise of New York’s key startup market in the last decade.

News: Peer into the eyes of Cyberdog

• August 12, 2021
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When someone mentioned to me that Xiaomi was launching its own “robot dog,” my mind immediately went to Sony’s Aibo. And honestly, it would have been difficult to be more wrong. Now that the news has been out for a few days, the company’s heard all of your bad Black Mirror jokes, don’t worry. And,

When someone mentioned to me that Xiaomi was launching its own “robot dog,” my mind immediately went to Sony’s Aibo. And honestly, it would have been difficult to be more wrong. Now that the news has been out for a few days, the company’s heard all of your bad Black Mirror jokes, don’t worry.

And, honestly, the Chinese hardware maker didn’t do itself any favors with the design here. Boston Dynamics has done a lot to imbue its quadrupedal robots with personality, through design language and viral videos of Spot and company busting a move to the Dirty Dancing soundtrack.

With Cyberdog, however, Xiaomi’s design team clearly just leaned in and went full-on Robocop (and the Bladerunner pastiche doesn’t help) . I receive a deluge of Metalhead gifs every time I post something about Boston Dynamics — seriously, I’m using Cyberdog as the lead image on this post, just so you can see what I mean. Go check the replies on Twitter. I’ll wait.

Xiaomi is, of course, far from the first company to release a Spot-like quadrupedal robot. There are a number of companies competing in that space, including ANYmal and Ghost Robotics. For its part, Xiaomi is looking to put a developer spin on the category. Per the Mi blog:

CyberDog is Xiaomi’s first foray into quadruped robotics for the open source community and developers worldwide. Robotics enthusiasts interested in CyberDog can compete or co-create with other like-minded Xiaomi Fans, together propelling the development and potential of quadruped robots.

The robot is powered by Nvidia’s Jetson Xavier NX platform, coupled with 11-built in sensors, including cameras, touch, GPS and more. The company will be release 1,000 of the robots, price at roughly $1,540 — a fraction of the cost of the advanced Spot system. The robot is also a fraction of the size of Boston Dynamics’ quadruped. And while there are superficial similarities the project really couldn’t be more different.

Xiaomi’s entry into robotics is more about building hardware for Nvidia’s platform. It’s a (relatively) inexpensive way for people to get a hang of programming and, perhaps, protoyping robotics. The likely limited functionality — and availability — are pretty clear indications that that the company’s not trying to put a Cyberdog in every home just yet.

A sizable acquisition this week, John Deere announced plans to buy Bear Flag Robotics for $250 million. We’ve been following Bear Flag since it was a member of the YC cohort. The deal seems like a good outcome for both parties. Bear Flag gets a lot of resources from an agricultural giant like John Deere and Deere gets to step another foot into the world of cutting-edge tech with an autonomous tractor startup.

Says co-founder and CEO Igino Cafiero:

One of the biggest challenges farmers face today is the availability of skilled labor to execute time-sensitive operations that impact farming outcomes. Autonomy offers a safe and productive alternative to address that challenge head on. Bear Flag’s mission to increase global food production and reduce the cost of growing food through machine automation is aligned with Deere’s and we’re excited to join the Deere team to bring autonomy to more farms.

Another startup we’ve been following since its early days, Kiwibot is seeing expansion to a significant number of campuses. In spite of campus shutdowns last year, the Berkeley-based company is actually seeing something of a boom due to the pandemic. COO Diego Varela Prada tells TechCrunch:

We have a procedure to disinfect the bots between orders. If you’re a student and you don’t want to mix into large crowds, I think it’s much safer to order food through Kiwibot and have it delivered to the library or your dorm.

We’ve written about Lidar company Aeva a few times over the years, including last November, when it announced plans to go public via SPAC. This week, the company announced a deal with Nikon that takes it beyond its existing automotive applications. The company says there are a slew of potential applications, though the chip is still about four years away from production. Fields include, “consumer electronics, consumer health, industrial robotics, and security.”

A whole bunch of robots are making their way to Florida late next year, courtesy of Amazon. The company announced this week that it has chosen Tallahassee (birthplace of T-Pain and objectively the best Mountain Goats album) as the home of its next fulfillment center. The company plans to add to its massive arm of warehouse robots for the 630,000-square-foot space, along with 1,000 human jobs.

FedEx, meanwhile, has implemented Berkshire Grey robotics at a shipping facility in Queens (the best borough). The systems will identity, pick, sort, collected and containerize primarily small packages like polybags, tubes and padded mailers. The systems are set to roll out to additional locations, including Las Vegas and Columbus, Ohio. Says B.G.,

This technology has been developed and installed as a direct response to the exponential growth of e-commerce, which has accelerated the demand for reliable automated solutions throughout all stages of the supply chain. FedEx Ground believes that continued innovation and automation will improve safety, efficiency, and productivity for its team members as they continue to keep the e-commerce supply chain moving.

Here’s a new company in the food space worth keeping an eye on. Formerly known as Ono Food Co. (then a food truck company), SF-based Hyphen has come out of stealth with the announcement of its Makeline automated meal platform. The company says the system is able to create up to 350 meals an hour, with the aid of a single staff member.

“[W]e really see ourselves like Shopify,” CEO Stephen Klein said in a release, “but instead of enabling merchants to compete with the likes of Amazon, we’re enabling restaurants to compete with the likes of DoorDash as well as other services and ghost kitchens that have decided to compete with their own customers by offering their own food brands.”

The platform is set to start rolling out this winter with plans for 300 locations in New York City, San Francisco, Los Angeles, Seattle and Phoenix.

News: Affordable student passes available for TC Sessions: SaaS 2021

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If you’re a current student or a recent grad with a burning passion for data, software and artificial intelligence, we want you to join us on October 27 for TC Sessions: SaaS 2021. The software-as-a-service sector keeps growing rapidly — both in size and sophistication, and it’s going to require a deep bench of thinkers,

If you’re a current student or a recent grad with a burning passion for data, software and artificial intelligence, we want you to join us on October 27 for TC Sessions: SaaS 2021. The software-as-a-service sector keeps growing rapidly — both in size and sophistication, and it’s going to require a deep bench of thinkers, makers and technologists to create and wrangle a data-driven future.

We want to foster the next generation, and we’ve set aside discounted, budget-friendly passes especially for students. Register for your $35 student pass and get ready to meet, network with and learn from the global SaaS community’s most influential founders, makers and investors.

Your student pass provides full access to all the day’s events — main stage presentations, panel discussions, breakout sessions and networking with CrunchMatch. Video-on-demand takes care of any schedule conflicts — you don’t have to miss a single presentation.

A quick word about networking at TC Sessions: SaaS. Whether you’re hunting for internships, employment, mentorship, a co-founder or investors, you won’t find a better place or opportunity to meet the people who can help you launch your dreams.

Deal Sweetener: Your pass includes a free, one-month subscription to Extra Crunch, our members-only program featuring exclusive daily articles for founders and startup teams.

While we’re not quite ready to reveal the full agenda, we can share some of the speakers we have lined up. And (not-so-humble-brag) what a group it is so far.

We’re talking folks like investors Casey Aylward (Costanoa Ventures) and Sarah Guo (Greylock), Databricks’ Ali Ghodsi, Javier Soltero, Google’s head of Workspace, UiPath’s Daniel Dines, Puppet’s Abby Kearns and Monte Carlo co-founder, CEO and data junkie extraordinaire, Barr Moses.

Who would you love to hear from at TC Sessions: SaaS? The TechCrunch editorial team is accepting recommendations for speakers. Submit your recommendations here no later than 11:59 pm (PT) on September 29.

Register here for updates and keep your fingers on the pulse of this event as we announce new speakers, events and ticket discounts.

TC Sessions: SaaS 2021 takes place on October 27. Jump on this student discount, join the global SaaS community and take advantage of every opportunity.

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

News: Arrival is on-track to begin production of its electric bus and van next year

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Executives from London-based commercial EV company Arrival told investors Thursday the company was on track to meet planned product launch dates, but much will depend on whether or not the company can fulfill orders and turn letters of intent into sales – especially a crucial van order with UPS, which could bring in upwards of

Executives from London-based commercial EV company Arrival told investors Thursday the company was on track to meet planned product launch dates, but much will depend on whether or not the company can fulfill orders and turn letters of intent into sales – especially a crucial van order with UPS, which could bring in upwards of $1 billion in revenue.

The company’s non-binding orders and letters of intent total 59,000 vehicles – a number that includes an agreement with UPS to purchase up to 10,000 vehicles across the U.S. and Europe, and an option in the agreement for an additional 10,000 vehicles. If the logistics giant opts to purchase all 20,000 vehicles, the deal could be worth over $1 billion, the company told investors last year.

The 59,000 figure also includes two sales that have come in since the close of last quarter: an agreement with car leasing company Leaseplan for 3,000 vehicles, which is expected to be completed in the third quarter, and a five-bus order from Anaheim, California’s public transportation network.

The ccompany’s earnings report contains an important asterisk toward the end: “All references to orders and LOIs are non-binding and subject to cancellation or modification at any time.” And there are a number of steps the company must complete before we start to see its vans and buses on the road, including public road trials, completed prototype builds and production certification.

Despite the to-do list, Arrival executives said the Arrival Bus will commence trial productions in the UK at the end of this year, with a planned start of production at the company’s South Carolina microfactory by the second quarter of 2022. The first Arrival Vans will be built in the UK by the third quarter of next year.

Arrival President Avinash Rugoobur also said the company has decided to open a product development R&D center in India, where it has seen an increase in “potential” orders.

“I think the Indian market is extremely important,” Arrival CEO Denis Sverdlov added. “It’s a very market unique in terms of size. Pricing for the product and the certification for the product is very much different than what we’re used to seeing in Europe or the United States. For us it’s an extremely important step because this enables us to create vehicles which can be successful in countries like in Asia and India and so on, so for us it’s a big, big step.”

A different manufacturing approach

Arrival, whose investors include Hyundai Motor Company and Kia Motors Corporation, wants to take what it pitches as a new approach to auto manufacturing. Instead of building a large, centralized factory, it aims to build commercial EVs in scalable, more capex-light regional microfactories – and it wants to open 31 by 2024. Arrival’s factories use autonomous mobile robots, or AMRs, which the company develops in-house. The robots were designed to operate autonomously and run on a single AMR software.

The company already has plans for two microfactories in the U.S.: one in West Charlotte, North Carolina, and a factory in Rock Hill, South Carolina. The company also has a microfactory in Bicester, UK, which the company said has already produced over 500 composite panels.

Construction on the North Carolina site is due to be complete in October this year, with production commencing in the fourth quarter of next year. The EVs built at that location will eventually end up in UPS’s North American fleet.

Like other new EV makers, the company still has no revenue yet to speak of and its earnings report reflects the expenses associated with bringing a new vehicle to market. Arrival reported an EBITDA loss of €29 million ($34 million). Its adjusted EBITDA loss was €35 million ($41 million) which widened from the first quarter’s loss of €27 million ($31 million).

Capex came to €65 million ($76 million), primarily due to the costs of staff working on product development and other costs related to factory equipment. The company anticipates spending between €175 million to €225 million ($205 million to $264 million) on capex in the remainder of the year, versus €106 million ($124 million) for the first half of the year. The increase is due to expenses from the Bicester, UK microfactory being brought forward into this year, as well as planned openings of other factories in South Carolina and one-off tooling costs.

The company is completing the quarter with €445 million ($522 million) in cash.

Since the first quarter, Arrival has announced a number of partnerships, including with Microsoft for an open software platform, Hitatchi and STMicroelectronics. It also counts LG Chem as its battery cell supplier.

The company, founded in 2015, joined a suite of other transportation startups when it merged with a blank-check firm in March. That transaction, with CIIG Merger Corp., had an implied enterprise value of $5.4 billion and injected the company with around $660 million in cash. The company’s also growing fast: it now has over 2,200 full-time employees, versus 1,300 in December 2020.

Its shares soared to $37.18 apiece in December. Today, the share price opened at $12.80. The company trades on the NASDAQ under the ticker symbol “ARVL.”

News: WhatsApp and other social media platforms restricted in Zambia amidst ongoing elections

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Several users from Zambia have taken to Twitter informing the general public that WhatsApp has been restricted in the country amidst ongoing general elections holding today. The president and parliamentary elections culminate in a face-off between current President Edgar Lungu and opposition Hakainde Hichilema. Internet monitoring organization Netblocks further corroborated these reports adding that multiple

Several users from Zambia have taken to Twitter informing the general public that WhatsApp has been restricted in the country amidst ongoing general elections holding today.

The president and parliamentary elections culminate in a face-off between current President Edgar Lungu and opposition Hakainde Hichilema.

Internet monitoring organization Netblocks further corroborated these reports adding that multiple internet providers in Zambia had restricted access to the American social messaging platform. Some of these networks include Zambian government-owned Zamtel, Airtel Zambia, Liquid Telecom, and MTN.

Just this week, reports circulated that the Zambian government had threatened to shut down the internet if Zambians “failed to use the cyberspace during this year’s election correctly.” The reports say the government intended to go through with its plans from Thursday, the polling day, till Sunday, when vote counts are expected to have ended.

However, the Zambian government, via its Information and Broadcasting Services Permanent Secretary, Amos Malupenga, came out to deny the reports, calling them ‘malicious.’ Nevertheless, he mentioned that the government would not tolerate abuse of the internet and if any mischief occurred, there would be no hesitation to take appropriate measures.

“The government, therefore, expects citizens to use the internet responsibly. But if some people choose to abuse the internet to mislead and misinform, the government will not hesitate to invoke relevant legal provisions to forestall any breakdown of law and order as the country passes through the election period,” Malupenga said.

Zambia isn’t the first African country to witness this during an election as social media restrictions and internet shutdowns are now a recurring theme for most African states.

Countries like Cameroon, Congo, Uganda, Tanzania, Guinea, Togo, Benin, Mali, Mauritania have faced social media restrictions and internet shutdowns during elections. A handful of others like Chad, Nigeria, and Ethiopia, on the other hand, have experienced similar restrictions for unrelating events.

Most governments argue that they carry out social media restrictions and internet shutdowns to maintain security during elections; however, it’s glaring to see the process as a means to curb the spread of vital information among voters and the media within and outside the country.

Today’s event shows that despite denying reports about an imminent internet shutdown, the Zambian government is heading in that direction by first cutting off WhatsApp. While writing on the WhatsApp restriction, Netblocks also reported that the Zambian government has proceeded to restrict other social media platforms, including Facebook, Instagram, Messenger, and Twitter.

Still, internet users in Zambia are now using VPN services to bypass the restrictions on WhatsApp and these other social media platforms. Yet, it remains to be seen if the government will enforce a full internet shutdown.

News: Pyka shows off its new electric passenger plane, the P3

• August 12, 2021
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Pyka appeared out of nowhere in 2019 with an unusual take on electric aircraft: a pilotless crop duster. The success of this first plane led the company to begin developing its next one, the P3: a 9-passenger craft with a totally unique propeller setup aimed at making regional flights cheaper and simpler. It could be

Pyka appeared out of nowhere in 2019 with an unusual take on electric aircraft: a pilotless crop duster. The success of this first plane led the company to begin developing its next one, the P3: a 9-passenger craft with a totally unique propeller setup aimed at making regional flights cheaper and simpler. It could be flying as soon as next year.

The company also has a new president in Dan Grossman, formerly of Zipcar, Ford, and Maven. The transportation sector DNA he brings could help Pyka create the networks and partnerships it needs to get off the ground in local air travel.

The P3 is intended to fly up to 200 nautical miles (about 230 of our lubber miles) at 155 knots, in other words doing the kind of hour-ish hops people opt for instead of a long drive. Currently these routes are served by larger, more expensive aircraft that often fly half-full, making the economics a bit squirrelly. But by Pyka’s estimate its smaller, much less expensive to operate aircraft will allow for more full flights per day between regional hubs.

“It’s mostly places where driving 150 miles is unfeasible,” said founder and CEO Michael Norcia. “The amount of money people spend driving these regional routes, it’s a staggering amount — billions of dollars, and they’re not happy about it.”

Existing small craft flights are prohibitively expensive, but Norcia thinks the P3 will be able to match bulk airfare rates while offering many more flights per day and more destinations.

The aircraft itself looks quite conventional, until you look closely… are those propellers on the fronts and backs of the wings?

“It hasn’t been done before,” said Norcia. And it bears a brief explanation why.

Small planes like this need to change the pitch of their propellers from one configuration during takeoff and climbing to another during cruising, since a different angle is needed for each task. That means the whole engine has to tilt, which isn’t simple.

“In a normal aircraft, it makes sense to have this quite complex mechanism on your propeller in order to operate optimally over the whole range,” said Norcia. “Electric propulsion provides some opportunities to just massively simplify the aircraft. So all four of the propellers are fixed-pitch: the ones in front are pitched for takeoff and climb out, and the rear ones are for cruising.”

With a heavy, complex, expensive traditional engine, it would be silly to double the number just so you don’t have to tilt them during takeoff. But with light, simple, inexpensive electric engines, it makes perfect sense to do so, even if it looks unusual.

The front propellers are only active during take-off and climbing, and then the rear ones take over completely for cruise, and each folds away when not in use. It mechanically simplifies things — no heavy duty hinges and hydraulics — and in fact putting the prop back there seems to improve efficiency by about 10 percent, said Norcia. “It’s pretty cool,” he added. (And they’ve applied for a patent.)

The general size and shape of the P3 are familiar, however, and that’s not an accident.

“We’re starting clean sheet,” Norcia said, as the unconventional prop setup attests, “but the approach to this aircraft was talking to customers and regulators and finding out what they want. The answer was resoundingly a nine passenger plane.”

This is partly because of regulatory requirements: planes with certain burdens and passenger counts fall under a simpler, more permissive regulatory regime, as do airlines that fly with less than 19 seats. Therefore the simplest path forwards seems to be a 9-passenger plane that makes big progress on efficiency and affordability while not reinventing the wheel.

Further expediting its transition from twinkle in the eye to actual flying machine is starting the P3 out as an unmanned cargo vehicle, essentially a drone for medium-size payloads. There’s a limited market for this (unmanned small aircraft can’t fly ordinary overland cargo routes) but it’s a way to put the P3 in the air legally and get the ball rolling with regulators before aiming for the more important passenger plane certification.

The goal is to have P3 in the air by the end of 2022, which is an extremely aggressive timeline for a brand new aircraft. But Pyka has already shipped two aircraft, the prototype Egret crop dusting craft and the production Pelican version.

“We started the company because we think electric aviation will fundamentally change the way we move for the better,” said Norcia. “It’s unprecedented times for electric aircraft, but most are taking pre-orders for aircraft that may get certified some time in the next decade. We just shipped two Pelicans in the last three months.”

Grossman said that was a major factor in his choice to join the company and help it scale: “They’re shipping right now, and planning on shipping one plane a month next year. They’ve been incredibly efficient with the money they’ve made.”

Of course, launching a new aircraft is an expensive endeavor, and Norcia said that they are in the middle of raising a big round to fund production scaling and to fly a full-sized P3. If all goes well the passenger version could be in the air as soon as 2025.