Tag Archives: Blog

News: Satellite operator Planet to go public in $2.8B SPAC merger

Planet, which operates a network of around 200 satellites that provides Earth imaging, as well as analytics of the data derived from that observation, is going public in a merger with special purpose acquisition company (SPAC) dMY Technology Group IV. The deal has a post-transaction equity value of $2.8 billion, and will provide Planet with

Planet, which operates a network of around 200 satellites that provides Earth imaging, as well as analytics of the data derived from that observation, is going public in a merger with special purpose acquisition company (SPAC) dMY Technology Group IV. The deal has a post-transaction equity value of $2.8 billion, and will provide Planet with $545 million in cash balance at close, including $345 million from dMY IV’s contribution, and a $200 million PIPE provided by BlackRock-managed funds, Koch Strategic Platforms, Marc Benioff’s TIME Ventures and Google.

After a bit of a lull, Planet is now the second significant private space company this week to take the SPAC route to public markets. Both are in the business of Earth observation, though Satellogic, which announced its own SPAC merger on Tuesday, operates on a much smaller scale at the moment. Planet, founded in 2010, has raised around $374 million to date, and operates the largest Earth imaging satellite constellation in operation.

The company’s mission has been to transform the way Earth imaging data is collected and provided to commercial interests here on Earth. Planet’s network can provide a complete scan of all of the Earth’s landmass on a daily basis, and it offers that to customers “via a Bloomer-like terminal for Earth data,” as Planet founder and CEO Wiill Marshall puts it. Access is provided on a subscription basis, and Planet says it generated over $100 million in revenue during its most recent fiscal year, which ended in January.

Planet intends to use the funds resulting from the merger in part to pay down its existing debt, and also to fund its existing operations and “support new and existing growth initiatives.” The aim to to complete the merger sometime later this year, at which point the combined entity will trade under the ticker “PL” on the NYSE.

News: AnyVision, the controversial facial recognition startup, has raised $235M led by SoftBank and Eldridge

Facial recognition has been one of the more conflicted applications of artificial intelligence in the wider world: using computer vision to detect faces and subsequent identities of people has raised numerous questions about privacy, data protection, and the ethics underpinning the purposes of the work, and even the systems themselves. But on the other hand,

Facial recognition has been one of the more conflicted applications of artificial intelligence in the wider world: using computer vision to detect faces and subsequent identities of people has raised numerous questions about privacy, data protection, and the ethics underpinning the purposes of the work, and even the systems themselves. But on the other hand, it’s being adopted widely in a wide variety of use cases. Now one of the more controversial, but also successful, startups in the field has closed a big round of funding.

AnyVision — an Israeli startup that has built AI-based techniques to identify people by their faces, but also related tech such as temperature checks to detect higher temperatures in a crowd — has raised $235 million in funding, the company has confirmed.

This Series C, one of the bigger rounds for an AI startup, is being co-led by SoftBank’s Vision Fund 2 and Eldridge Industries, with previous investors also participating. (They are not named but the list includes Robert Bosch GmbH, Qualcomm Ventures and Lightspeed.) The company is not disclosing its valuation but we are asking. However, it has to be a sizable hike for the company, which had previously raised around $116 million, according to PitchBook, and has racked up a big list of customers since its last round in 2020.

Worth noting, too, that AnyVision’s CEO Avi Golan is a former operating partner at SoftBank’s investment arm.

AnyVision said the funding will be used to continue developing its SDKs, specifically to work in edge computing devices — smart cameras, body cameras, and chips that will be used in other devices — to increase the performance and speed of its systems.

Its systems, meanwhile, are used in video surveillance, watchlist alerts, and scenarios where an organization is looking to monitor crowds and control them, for example to keep track of numbers, to analyse dwell times in retail environments, or to flag illegal or dangerous behavior.

“AnyVision’s innovations in Recognition AI helped transform passive cameras into proactive security systems and empowered organizations take a more holistic view to advanced security threats,” Golan said in a statement in the investment announcement. “The Access Point AI platform is designed to protect people, places, and privacy while simultaneously reducing costs, power, bandwidth, and operational complexity.”

You may recognize the name AnyVision because of how much it has been in the press.

The startup was the subject of a report in 2019 that alleged that its technology was being quietly used by the Israeli government to run surveillance on Palestinians in the West Bank.

The company denied it, but the story quickly turned into a huge stain on its reputation, while also adding more scrutiny overall to the field of facial recognition.

That led to Microsoft, which had invested in AnyVision via its M12 venture arm, to run a full audit of the investment and its position on facial recognition investments overall. Ultimately, Microsoft divested its stake and pledged not to invest in further technology like it.

Since then, AnyVision has been working hard to spin itself as the “ethical” player in this space, acknowledging that there is a lot of work and shortcomings in the bigger market of facial recognition. But controversy has continued to court the company.

A report from Reuters in April of this year highlighted just how many companies were using AnyVision’s technology today, ranging from hospitals like Cedars Sinai in Los Angeles to major retailers like Macy’s and energy giant BP. AnyVision’s connections to power go beyond simply having big customers: it also turns out that the White House Press Secretary, Jen Psaki, once served as a communications consultant to the startup.

Then, a report published just yesterday in The Markup, combed through various public records for AnyVision, including a user guidebook from 2019, which also painted a pretty damning picture of just how much information the company can collect, and what it has been working on. (One pilot, and subsequent report resulting from it, involved tracking children in a school district in Texas: AnyVision collected 5,000 student photos and ran more than 164,000 detections in just seven days.)

There are other cases where you might imagine, however, that AnyVision’s technology might be deemed helpful or useful, maybe even welcomed. Its ability to detect temperatures, for example, and identify who may have been in contact with high-temperature people, could go a long way towards controlling less obvious cases of Covid-19, for example, helping contain the virus at mass events, providing a safeguard to enable those events to go ahead.

And to be completely clear, AnyVision is not the only company building and deploying this technology, nor the only one coming under scrutiny. Another, the U.S. company Clearview AI, is used by thousands of governments and law enforcement agencies, but earlier this year it was deemed “illegal” by Canadian privacy authorities.

Indeed, it seems that the story is not complete, either in terms of how these technologies will develop, how they will be used, and how the public comes to view them. For now, the traction AnyVision has had, even despite the controversy and ethical questions, seems to have swayed SoftBank.

“The visual recognition market is nascent but has large potential in the Western world,” said Anthony Doeh, a partner for SoftBank Investment Advisers, in a statement. “We have witnessed the transformative power of AI, biometrics and edge computing in other categories, and believe AnyVision is uniquely placed to redefine physical environment analytics across numerous industries.”

News: Localyze raises $12M for a SaaS that supports cross-border hiring and relocation

Y-Combinator-backed Localyze has nabbed $12 million in Series A funding led by Blossom Capital for a SaaS that supports staff relocations and hiring across borders. Previous investor Frontline Ventures also participated,with a number of angel investors joining the round — including Andrew Robb (ex-Farfetch); Des Traynor, co-founder and CSO at Intercom; Hanno Renner, co-founder and

Y-Combinator-backed Localyze has nabbed $12 million in Series A funding led by Blossom Capital for a SaaS that supports staff relocations and hiring across borders.

Previous investor Frontline Ventures also participated,with a number of angel investors joining the round — including Andrew Robb (ex-Farfetch); Des Traynor, co-founder and CSO at Intercom; Hanno Renner, co-founder and CEO at Personio; David Clarke, former CTO at Workday; and Michael Wax, CEO of Forto.

In the first quarter of 2021, the Hamburg, Germany-based startup — which was founded in 2018 by a trio of women: CEO Hanna Asmussen, COO Lisa Dahlke, and CTO Franzi Löw — saw a record 300% revenue bump.

Localyze’s current roster of customers include the likes of Free Now, Trade Republic, Babbel, Thoughtworks, Tier Mobility, DeepL, Forto and Personio.

The startup suggests the pandemic-triggered rise in remote working is helping to drive demand for relocations as employees reassess where they want to be physically based. Its SaaS aims to streamline immigration-related admin tasks like visa applications; work and residence permits and registration; as well as providing help with housing and banking in the destination country.

“It was very interesting, we did of course see a negative impact from COVID-19 in 2020 but the main reason why we never worried about our business model is that we knew the businesses have never been the only driver of relocations,” Asmussen tells TechCrunch.

“We did a survey among the internationals we relocated and 98% stated that they wanted to relocate, and weren’t forced by the company. I of course believe that some people will choose not to relocate but at the same time, the increased flexibility [of remote working] opens many more doors for other people to relocate — and also for different time frames.”

To date, Localyze says it’s helped more than 2,000 people from over 100 countries relocate internationally. But it reckons that’s just the start.

“Relocation is becoming a benefit at some companies, and the overall number of people moving across borders during their working life is increasing drastically,” argues Asmussen.

Before COVID-19 hit and reconfigured so much of how we live, almost two million people relocated for work within Europe each year. But Localyze cites a PwC study on mobility in the global skilled workforce that suggests employee relocation is set to increase by 50% as we emerge from the pandemic.

“While the percentage of the global skilled workforce that is mobile — meaning that they work or worked abroad — is currently still very low, around 20% I think, it is expected to grow to up to 80% in the next decade,” she suggests. 

Localyze’s SaaS is designed to simplify and support staff relocations or cross-border hiring, offering digital tools to automate admin and case tracking, helping companies and employees navigate what can be complex, bureaucratic and even stressful immigration requirements.

“We developed a software that automates large parts of the relevant processes around global mobility,” explains Asmussen. “The core of our technology is a pipeline system that maps out all possibilities of how the employee can enter a country and matches the pipeline with the characteristics of that employee (e.g. nationality, family status or education). This guarantees that the employee gets all the relevant information throughout his/her process and that our case managers can focus on more individual questions.

“One big advantage of this pipeline system is that we built a no-code solution to manage it. Together with our CMS to edit the content of the steps, we are able to quickly expand the usability of our software to new countries and use cases.

“On the HR side our software helps to manage and track the process of all employees with the ease of mind that we notify them about changes or required actions. The HR manager can simply add a case, or transfer information over through our integration with their HRIS and we take it from there.”

Asmussen says the core of the platform is the automation of the paperwork with the startup supplementing that by providing a level of (human) support — in the form of case workers, who can field users’ questions and/or troubleshoot issues.

Case types its platform handles — such as obtaining a new visa, getting an extension etc — get broken down into a series of individual tasks that need to be carried out (and checked off), with the individual set of ‘dos’ determined by the characteristics of the person (origin, family, salary, etc.).

So essentially it’s built a decision tree with 30-50 variations per country, based on the specificity of each set of rules.

“The employee is seeing this as a personalized set of to do’s in her/his dashboard and can then go through them,” notes Asmussen, adding: “The case managers are there for questions and to give additional guidance when problems occur.

“Thanks to the automation engine, we can operate at 80% gross margin today.”

Localyze also offers a “pre-check” feature that give companies the opportunity to get information on a case that’s being considered — such as showing information on applicable conditions like the salary limits associated with a role when it comes to the visa of a new hire and the timeline that may be involved — to  make it easier for them to understand the complexity of a case. (Which may in turn help them make an informed decision on a start date for a particular hire.)

The startup says it’s been seeing growth rates hitting, on average, more than 30% month-on-month, as employer demand for its services accelerates.

The Series A funding will be used to capitalize on growing demand by expanding into new regions — with Localyze saying it will start by focusing on “major hubs” for international talent, in Ireland, Spain, Portugal, the Netherlands and the UK, so it can target more high-growth companies with offices across Europe.

Currently it has over 120 customers — and it’s expecting that to double by the end of the year.

It also predicts existing accounts will expand in value — with Asmussen saying it’s closing larger ACVs (annual contract value), and seeing existing accounts “grow strongly” over time. (It offers tiered pricing for the SaaS, based on usage.)

Europe remains the primary focus for its business currently — with all cases it supports entailing helping customers relocate staff to the region (“from all over the world”) and within Europe itself. 

“The predominant destinations are Germany, Ireland, Spain and the UK,” says Asmussen. “With the funding, we want to accelerate our expansion in the UK, Ireland, Netherlands, Portugal & Spain, besides our core market Germany. We’ve been operating in these markets for a while and now look at strengthening our go to market across Europe.”

She says Localyze’s 25-strong team will at least double by the end of the year, with the startup planning to hire across all teams — with a particular focus on expanding engineering and product to keep pace with the scaling business; and beefing up sales and customer support capacity to support its continued growth.  

On the competitor front, Asmussen names Estonia-headquartered Jobbatical as its closest rival for relocation support with the same digital focus.

She also points to Topia as providing some competing services — but says it has more of a focus on software for HR professionals and integrating partners vs Localyze providing both a HR and an employee portal plus the ‘glue’ of its “automation engine”.

Localyze also argues it differentiates vs “more traditional” relocation agencies (e.g. Cartus and Graebel), per Asmussen, because it offers “end-to-end support” in a fully digital form — giving users “full visibility and transparency at all times”, as she tells it, and helping to streamline and simplify processes in “what has previously been a complex and confusing space”.

Increased flexibility of work and and mobility of the global workforce looks set to be one firm (and typically welcome) legacy of the pandemic — one which Localyze already had a handle on supporting, putting it in a strong position to scale its SaaS as demand steps up in the coming years.

Rising levels of employee mobility may, in turn, make subscribing to a software service that assists relocations and cross-border hiring more of a ‘must have’ than a ‘nice to have’ for more types of businesses — especially as competition for talent heats up given the rising opportunities of remote work.

“In 2021, companies will need to define how they are going to operate post-COVID-19, and many companies keep locations as part of their people strategy. Yet they try to offer more flexibility in terms of location choices, which in many cases results in the creation of different talent hubs and a mix of remote with in-person hubs/offices. This means increased operations across borders and more employee mobility, both long and short-term, because people will make use of these options,” Asmussen predicts. 

Commenting on the Series A in a statement, Blossom Capital’s Ophelia Brown added: “Access to the very best talent is a huge consideration for businesses of all sizes, but for high-growth enterprises, it’s absolutely crucial that nothing gets in the way of being able to tap into the skills and abilities of staff anywhere in Europe. Localyze removes all of these barriers. Instead of being bogged down by the costly and lengthy relocation processes, enterprises can concentrate on the job at hand and their employees can feel confident and secure that their relocation – often one of the biggest decisions they’ll have to make in their career – is dealt with efficiently and without a hitch.”

News: YouTube’s recommender AI still a horrorshow, finds major crowdsourced study

For years YouTube’s video-recommending algorithm has stood accused of fuelling a grab-bag of societal ills by feeding users an AI-amplified diet of hate speech, political extremism and/or conspiracy junk/disinformation for the profiteering motive of trying to keep billions of eyeballs stuck to its ad inventory. And while YouTube’s tech giant parent Google has, sporadically, responded

For years YouTube’s video-recommending algorithm has stood accused of fuelling a grab-bag of societal ills by feeding users an AI-amplified diet of hate speech, political extremism and/or conspiracy junk/disinformation for the profiteering motive of trying to keep billions of eyeballs stuck to its ad inventory.

And while YouTube’s tech giant parent Google has, sporadically, responded to negative publicity flaring up around the algorithm’s antisocial recommendations — announcing a few policy tweaks or limiting/purging the odd hateful account — it’s not clear how far the platform’s penchant for promoting horribly unhealthy clickbait has actually been rebooted.

The suspicion remains nowhere near far enough.

New research published today by Mozilla backs that notion up, suggesting YouTube’s AI continues to puff up piles of ‘bottom-feeding’/low grade/divisive/disinforming content — stuff that tries to grab eyeballs by triggering people’s sense of outrage, sewing division/polarization or spreading baseless/harmful disinformation — which in turn implies that YouTube’s problem with recommending terrible stuff is indeed systemic; a side-effect of the platform’s rapacious appetite to harvest views to serve ads.

That YouTube’s AI is still — per Mozilla’s study — behaving so badly also suggests Google has been pretty successful at fuzzing criticism with superficial claims of reform.

The mainstay of its deflective success here is likely the primary protection mechanism of keeping the recommender engine’s algorithmic workings (and associated data) hidden from public view and external oversight — via the convenient shield of ‘commercial secrecy’.

But regulation that could help crack open proprietary AI blackboxes is now on the cards — at least in Europe.

To fix YouTube’s algorithm, Mozilla is calling for “common sense transparency laws, better oversight, and consumer pressure” — suggesting a combination of laws that mandate transparency into AI systems; protect independent researchers so they can interrogate algorithmic impacts; and empower platform users with robust controls (such as the ability to opt out of “personalized” recommendations) are what’s needed to rein in the worst excesses of the YouTube AI.

Regrets, YouTube users have had a few…

To gather data on specific recommendations being made made to YouTube users — information that Google does not routinely make available to external researchers — Mozilla took a crowdsourced approach, via a browser extension (called RegretsReporter) that lets users self-report YouTube videos they “regret” watching.

The tool can generate a report which includes details of the videos the user had been recommended, as well as earlier video views, to help build up a picture of how YouTube’s recommender system was functioning. (Or, well, ‘dysfunctioning’ as the case may be.)

The crowdsourced volunteers whose data fed Mozilla’s research reported a wide variety of ‘regrets’, including videos spreading COVID-19 fear-mongering, political misinformation and “wildly inappropriate” children’s cartoons, per the report — with the most frequently reported content categories being misinformation, violent/graphic content, hate speech and spam/scams.

A substantial majority (71%) of the regret reports came from videos that had been recommended by YouTube’s algorithm itself, underscoring the AI’s starring role in pushing junk into people’s eyeballs.

The research also found that recommended videos were 40% more likely to be reported by the volunteers than videos they’d searched for themselves.

Mozilla even found “several” instances when the recommender algorithmic put content in front of users that violated YouTube’s own community guidelines and/or was unrelated to the previous video watched. So a clear fail.

A very notable finding was that regrettable content appears to be a greater problem for YouTube users in non-English speaking countries: Mozilla found YouTube regrets were 60% higher in countries without English as a primary language — with Brazil, Germany and France generating what the report said were “particularly high” levels of regretful YouTubing. (And none of the three can be classed as minor international markets.)

Pandemic-related regrets were also especially prevalent in non-English speaking countries, per the report — a worrying detail to read in the middle of an ongoing global health crisis.

The crowdsourced study — which Mozilla bills as the largest-ever into YouTube’s recommender algorithm — drew on data from more than 37,000 YouTube users who installed the extension, although it was a subset of 1,162 volunteers — from 91 countries — who submitted reports that flagged 3,362 regrettable videos which the report draws on directly.

These reports were generated between July 2020 and May 2021.

What exactly does Mozilla mean by a YouTube “regret”? It says this is a crowdsourced concept based on users self-reporting bad experiences on YouTube, so it’s a subjective measure. But Mozilla argues that taking this “people-powered” approach centres the lived experiences of Internet users and is therefore helpful in foregrounding the experiences of marginalised and/or vulnerable people and communities (vs, for example, applying only a narrower, legal definition of ‘harm’).

“We wanted to interrogate and explore further [people’s experiences of falling down the YouTube ‘rabbit hole’] and frankly confirm some of these stories — but then also just understand further what are some of the trends that emerged in that,” explained Brandi Geurkink, Mozilla’s senior manager of advocacy and the lead researcher for the project, discussing the aims of the research.

“My main feeling in doing this work was being — I guess — shocked that some of what we had expected to be the case was confirmed… It’s still a limited study in terms of the number of people involved and the methodology that we used but — even with that — it was quite simple; the data just showed that some of what we thought was confirmed.

“Things like the algorithm recommending content essentially accidentally, that it later is like ‘oops, this actually violates our policies; we shouldn’t have actively suggested that to people’… And things like the non-English-speaking user base having worse experiences — these are things you hear discussed a lot anecdotally and activists have raised these issues. But I was just like — oh wow, it’s actually coming out really clearly in our data.”

Mozilla says the crowdsourced research uncovered “numerous examples” of reported content that would likely or actually breach YouTube’s community guidelines — such as hate speech or debunked political and scientific misinformation.

But it also says the reports flagged a lot of what YouTube “may” consider ‘borderline content’. Aka, stuff that’s harder to categorize — junk/low quality videos that perhaps toe the acceptability line and may therefore be trickier for the platform’s algorithmic moderation systems to respond to (and thus content that may also survive the risk of a take down for longer).

However a related issue the report flags is that YouTube doesn’t provide a definition for borderline content — despite discussing the category in its own guidelines — hence, says Mozilla, that makes the researchers’ assumption that much of what the volunteers were reporting as ‘regretful’ would likely fall into YouTube’s own ‘borderline content’ category impossible to verify.

The challenge of independently studying the societal effects of Google’s tech and processes is a running theme underlying the research. But Mozilla’s report also accuses the tech giant of meeting YouTube criticism with “inertia and opacity”.

It’s not alone there either. Critics have long accused YouTube’s ad giant parent of profiting off-of engagement generated by hateful outrage and harmful disinformation — allowing “AI-generated bubbles of hate” surface ever more baleful (and thus stickily engaging) stuff, exposing unsuspecting YouTube users to increasingly unpleasant and extremist views, even as Google gets to shield its low grade content business under a user-generated content umbrella.

Indeed, ‘falling down the YouTube rabbit hole’ has become a well-trodden metaphor for discussing the process of unsuspecting Internet users being dragging into the darkest and nastiest corners of the web. This user reprogramming taking place in broad daylight via AI-generated suggestions that yell at people to follow the conspiracy breadcrumb trail right from inside a mainstream web platform.

Back as 2017 — when concern was riding high about online terrorism and the proliferation of ISIS content on social media — politicians in Europe were accusing YouTube’s algorithm of exactly this: Automating radicalization.

However it’s remained difficult to get hard data to back up anecdotal reports of individual YouTube users being ‘radicalized’ after viewing hours of extremist content or conspiracy theory junk on Google’s platform.

Ex-YouTube insider — Guillaume Chaslot — is one notable critic who’s sought to pull back the curtain shielding the proprietary tech from deeper scrutiny, via his algotransparency project.

Mozilla’s crowdsourced research adds to those efforts by sketching a broad — and broadly problematic — picture of the YouTube AI by collating reports of bad experiences from users themselves.

Of course externally sampling platform-level data that only Google holds in full (at its true depth and dimension) can’t be the whole picture — and self-reporting, in particular, may introduce its own set of biases into Mozilla’s data-set. But the problem of effectively studying big tech’s blackboxes is a key point accompanying the research, as Mozilla advocates for proper oversight of platform power.

In a series of recommendations the report calls for “robust transparency, scrutiny, and giving people control of recommendation algorithms” — arguing that without proper oversight of the platform, YouTube will continue to be harmful by mindlessly exposing people to damaging and braindead content.

The problematic lack of transparency around so much of how YouTube functions can be picked up from other details in the report. For example, Mozilla found that around 9% of recommended regrets (or almost 200 videos) had since been taken down — for a variety of not always clear reasons (sometimes, presumably, after the content was reported and judged by YouTube to have violated its guidelines).

Collectively, just this subset of videos had had a total of 160M views prior to being removed for whatever reason.

In other findings, the research found that regretful views tend to perform well on the platform.

A particular stark metric is that reported regrets acquired a full 70% more views per day than other videos watched by the volunteers on the platform — lending weight to the argument that YouTube’s engagement-optimising algorithms disproportionately select for triggering/misinforming content more often than quality (thoughtful/informing) stuff simply because it brings in the clicks.

While that might be great for Google’s ad business, it’s clearly a net negative for democratic societies which value truthful information over nonsense; genuine public debate over artificial/amplified binaries; and constructive civic cohesion over divisive tribalism.

But without legally-enforced transparency requirements on ad platforms — and, most likely, regulatory oversight and enforcement that features audit powers — these tech giants are going to continue to be incentivized to turn a blind eye and cash in at society’s expense.

Mozilla’s report also underlines instances where YouTube’s algorithms are clearly driven by a logic that’s unrelated to the content itself — with a finding that in 43.6% of the cases where the researchers had data about the videos a participant had watched before a reported regret the recommendation was completely unrelated to the previous video.

The report gives examples of some of these logic-defying AI content pivots/leaps/pitfalls — such as a person watching videos about the U.S. military and then being recommended a misogynistic video entitled ‘Man humiliates feminist in viral video.’

In another instance, a person watched a video about software rights and was then recommended a video about gun rights. So two rights make yet another wrong YouTube recommendation right there.

In a third example, a person watched an Art Garfunkel music video and was then recommended a political video entitled ‘Trump Debate Moderator EXPOSED as having Deep Democrat Ties, Media Bias Reaches BREAKING Point.’

To which the only sane response is, umm what???

YouTube’s output in such instances seems — at best — some sort of ‘AI brain fart’.

A generous interpretation might be that the algorithm got stupidly confused. Albeit, in a number of the examples cited in the report, the confusion is leading YouTube users toward content with a right-leaning political bias. Which seems, well, curious.

Asked what she views as the most concerning findings, Mozilla’s Geurkink told TechCrunch: “One is how clearly misinformation emerged as a dominant problem on the platform. I think that’s something, based on our work talking to Mozilla supporters and people from all around the world, that is a really obvious thing that people are concerned about online. So to see that that is what is emerging as the biggest problem with the YouTube algorithm is really concerning to me.”

She also highlighted the problem of the recommendations being worse for non-English-speaking users as another major concern, suggesting that global inequalities in users’ experiences of platform impacts “doesn’t get enough attention” — even when such issues do get discussed.

Responding to Mozilla’s report in a statement, a Google spokesperson sent us this statement:

“The goal of our recommendation system is to connect viewers with content they love and on any given day, more than 200 million videos are recommended on the homepage alone. Over 80 billion pieces of information is used to help inform our systems, including survey responses from viewers on what they want to watch. We constantly work to improve the experience on YouTube and over the past year alone, we’ve launched over 30 different changes to reduce recommendations of harmful content. Thanks to this change, consumption of borderline content that comes from our recommendations is now significantly below 1%.”

Google also claimed it welcomes research into YouTube — and suggested it’s exploring options to bring in external researchers to study the platform, without offering anything concrete on that front.

At the same time, its response queried how Mozilla’s study defines ‘regrettable’ content — and went on to claim that its own user surveys generally show users are satisfied with the content that YouTube recommends.

In further non-quotable remarks, Google noted that earlier this year it started disclosing a ‘violative view rate‘ (VVR) metric for YouTube — disclosing for the first time the percentage of views on YouTube that comes from content that violates its policies.

The most recent VVR stands at 0.16-0.18% — which Google says means that out of every 10,000 views on YouTube, 16-18 come from violative content. It said that figure is down by more than 70% when compared to the same quarter of 2017 — crediting its investments in machine learning as largely being responsible for the drop.

However, as Geurkink noted, the VVR is of limited use without Google releasing more data to contextualize and quantify how far its AI was involved in accelerating views of content its own rules state shouldn’t be viewed on its platform. Without that key data the suspicion must be that the VVR is a nice bit of misdirection.

“What would be going further than [VVR] — and what would be really, really helpful — is understanding what’s the role that the recommendation algorithm plays in this?” Geurkink told us on that, adding: “That’s what is a complete blackbox still. In the absence of greater transparency [Google’s] claims of progress have to be taken with a grain of salt.”

Google also flagged a 2019 change it made to how YouTube’s recommender algorithm handles ‘borderline content’ — aka, content that doesn’t violate policies but falls into a problematic grey area — saying that that tweak had also resulted in a 70% drop in watchtime for this type of content.

Although the company confirmed this borderline category is a moveable feast — saying it factors in changing trends as well as context and also works with experts to determine what’s get classed as borderline — which makes the aforementioned percentage drop pretty meaningless since there’s no fixed baseline to measure against.

It’s notable that Google’s response to Mozilla’s report makes no mention of the poor experience reported by survey participants in non-English-speaking markets. And Geurkink suggested that, in general, many of the claimed mitigating measures YouTube applies are geographically limited — i.e. to English-speaking markets like the US and UK. (Or at least arrive in those markets first, before a slower rollout to other places.) 

A January 2019 tweak to reduce amplification of conspiracy theory content in the US was only expanded to the UK market months later — in August — for example.

“YouTube, for the past few years, have only been reporting on their progress of recommendations of harmful or borderline content in the US and in English-speaking markets,” she also said. “And there are very few people questioning that — what about the rest of the world? To me that is something that really deserves more attention and more scrutiny.”

We asked Google to confirm whether it had since applied the 2019 conspiracy theory related changes globally — and a spokeswoman told us that it had. But the much higher rate of reports made to Mozilla of — a yes broader measure of — ‘regrettable’ content being made in non-English-speaking markets remains notable.

And while there could be others factors at play, which might explain some of the disproportionately higher reporting, the finding may also suggest that, where YouTube’s negative impacts are concerned, Google directs greatest resource at markets and languages where its reputational risk and the capacity of its machine learning tech to automate content categorization are strongest.

Yet any such unequal response to AI risk obviously means leaving some users at greater risk of harm than others — adding another harmful dimension and layer of unfairness to what is already a multi-faceted, many-headed-hydra of a problem.

It’s yet another reason why leaving it up to powerful platforms to rate their own AIs, mark their own homework and counter genuine concerns with self-serving PR is for the birds.

(In additional filler background remarks it sent us, Google described itself as the first company in the industry to incorporate “authoritativeness” into its search and discovery algorithms — without explaining when exactly it claims to have done that or how it imagined it would be able to deliver on its stated mission of ‘organizing the world’s information and making it universally accessible and useful’ without considering the relative value of information sources… So color us baffled at that claim. Most likely it’s a clumsy attempt to throw disinformation shade at rivals.)

Returning to the regulation point, an EU proposal — the Digital Services Act — is set to introduce some transparency requirements on large digital platforms, as part of a wider package of accountability measures. And asked about this Geurkink described the DSA as “a promising avenue for greater transparency”.

But she suggested the legislation needs to go further to tackle recommender systems like the YouTube AI.

“I think that transparency around recommender systems specifically and also people having control over the input of their own data and then the output of recommendations is really important — and is a place where the DSA is currently a bit sparse, so I think that’s where we really need to dig in,” she told us.

One idea she voiced support for is having a “data access framework” baked into the law — to enable vetted researchers to get more of the information they need to study powerful AI technologies — i.e. rather than the law trying to come up with “a laundry list of all of the different pieces of transparency and information that should be applicable”, as she put it.

The EU also now has a draft AI regulation on the table. The legislative plan takes a risk-based approach to regulating certain applications of artificial intelligence. However it’s not clear whether YouTube’s recommender system would fall under one of the more closely regulated categories — or, as seems more likely (at least with the initial Commission proposal), fall entirely outside the scope of the planned law.

“An earlier draft of the proposal talked about systems that manipulate human behavior which is essentially what recommender systems are. And one could also argue that’s the goal of advertising at large, in some sense. So it was sort of difficult to understand exactly where recommender systems would fall into that,” noted Geurkink.

“There might be a nice harmony between some of the robust data access provisions in the DSA and the new AI regulation,” she added. “I think transparency is what it comes down to, so anything that can provide that kind of greater transparency is a good thing.

“YouTube could also just provide a lot of this… We’ve been working on this for years now and we haven’t seen them take any meaningful action on this front but it’s also, I think, something that we want to keep in mind — legislation can obviously take years. So even if a few of our recommendations were taken up [by Google] that would be a really big step in the right direction.”

News: Real estate platform Casafari raises $15M to allow PE to buy single-family homes at scale

Just a Spotify used VC and PE backing to acquire the assets of the music industry so that we must now all rent our music via subscription, rather than own it for life, so a PropTech startup plans to follow a similar strategy for single-family homes. Casafari, a real estate data platform in Europe based

Just a Spotify used VC and PE backing to acquire the assets of the music industry so that we must now all rent our music via subscription, rather than own it for life, so a PropTech startup plans to follow a similar strategy for single-family homes.

Casafari, a real estate data platform in Europe based out of Lisbon, Portugal, has raised a $15 million Series A funding round led by Prudence Holdings in New York. But, crucially, it has also secured a $120 million “mandate” from Geneva-based private equity investors Stoneweg, among other PE players, in order to buy-to-let residential and commercial real estate. The startup already has operations in Portugal, Spain, France, and Italy.

Other investors include Armilar Venture Partners (the Portuguese VC behind unicorns Outsystems and Feedzai), HJM Holdings, 1Sharpe (founders of Roofstock), and FJ Labs (Fabrice Grinda, founder of OLX Group), as well as existing investor Lakestar.

Founded by Mila Suharev, Nils Henning, and Mitya Moskalchuk in 2018, Casafari is taking advantage of Europe’s often chaotic real estate data to achieve its goals, due to the lack of a unified Multiple Listings Service (“MLS”).

Casafari plans to aggregate, verify and distribute this data via its platform, hunting down single-family homes as an asset class for institutional investors.

According to Nils Henning, CEO, “CASAFARI has built a unique ecosystem, which connects brokers, developers, asset managers, and investors and enables sourcing, valuation, underwriting and deal collaboration on single units in all asset classes. We are very excited to represent important institutional clients like Stoneweg and others, in deploying their capital into fragmented acquisitions at scale, bringing more liquidity to the market and generating more transactions to the broker clients of our platform.”

Private investors are already using the platform. Since launching in 2018, Casafari has been used by Sotheby’s International Realty, Coldwell Banker, RE/MAX franchises, Savills, Fine & Country, Engel & Voelkers, Keller Williams, and important institutional investors and developers like Stoneweg, Kronos, Vanguard, and Vic Properties.

Mila Suharev, Casafari’s Co-CEO and CPO said: ”There are currently around 70 billion euros in dry powder in Europe that could be allocated in acquiring residential property in a buy to let strategy, and basically there’s no offer available. The property will be collected in portfolios, consisting of single units that pension funds, private equity real estate funds, want to build in Europe as they do in the US.”

What Casafari’s is doing is largely following the playbook of what Roofstock in the US did: an online marketplace for investing in leased single-family rental homes. Roofstock has raised $132.3 million to date.

News: Dispatch from Bangalore

A startup founder, who hasn’t had much sleep all week, woke up on a recent Sunday to a phone call from his co-founder. A senior engineer was feeling burnt out and was contemplating leaving. For the founder, who had several calls scheduled with many high-profile Silicon Valley investors later in the day, talking this developer

A startup founder, who hasn’t had much sleep all week, woke up on a recent Sunday to a phone call from his co-founder. A senior engineer was feeling burnt out and was contemplating leaving. For the founder, who had several calls scheduled with many high-profile Silicon Valley investors later in the day, talking this developer out of leaving the job quickly became the top agenda item for the rest of the weekend.

There’s a joke among many startup founders in Bangalore that hiring two to three engineers is currently more time-consuming and cumbersome than securing a fresh round of funding. Heavily-backed startups are paying big premiums to attract and retain talent, making it very challenging for their younger siblings to scale. And relying on recruiters is costly and still takes over a month to close a hire.

A good engineer with two to three years of experience with any recognizable startup expects $70,000 annually as salary, up from about $40,000 a year ago. A puzzled startup founder recently quizzed another peer in the industry how much a good QA engineer costs, and then answered the question himself: about $35,000, up from about $20,000.

Most difficult to poach are those who work at unicorn fintechs CRED and RazorPay, many startup founders said. Engineers from either of the firms expect as much as $150,000 a year, if not more — often four to five times the amount founders at early stage startups draw themselves.

The intense competition for talent has been prompted by newly turned unicorns increasing the pool on their captables for employee stock options, a concept that was nearly elusive just three years ago. Scores of U.S. and European startups are also aggressively hiring in India as remote working begins to take off.

India has produced a record 16 unicorns this year as Tiger Global, Falcon Edge, and SoftBank cut large size checks to the nation’s promising startups at a pace never witnessed before in the South Asian nation.

Indian startups have raised a record $10.46 billion in the first half of 2021, up from $4 billion during the same period last year, and $5.4 billion in the first half of 2019, data insight platform Tracxn told me. (In all of 2020, Indian startups had raised $11.6 billion.)

The average size of a seed round in India was $1.1 million in the first half of 2021, up from $800,000 during the same period last year and $740,000 in 2019, per Tracxn. An average Series A check size this year has been $7.67 million, up from $4.30 million last year, and $5.92 million last year.

Even early-stage startups are at the centre of attraction as virtually everyone is attempting to get in on a deal. Some second-time founders now have the confidence and networking to bypass Sequoia Capital India’s Surge accelerator program and Y Combinator and still gain access to some of the perks they offer.

Some aren’t engaging with funds at all for their seed financing rounds. Scores of startup founders from the past decade have accrued enough capital and reputation to write dozens of checks a year to early promising startups.

The abundance of dry powder in the market and the increased competition from some of the most reputable names in the industry have also changed the power dynamics between founders and investors. It’s becoming common for founders to negotiate from a place of strength to hold on the rights and preferential treatments from investors.

On a call recently, two founders discussed what many would consider a first-world dilemma: Dozens of investors had agreed to invest in them, but they no longer had so much stake to offer. So they strategize what stake to give whom and how to politely get others to reduce the size of their committed check size.

At this point,

Founders are fighting for talent & market share.

Investors are fighting for allocation share.

Bahut fight hai !

— Ashish Dave (@ashishdave) July 7, 2021

But some investors are worried that the music may stop soon.

Investors at several high-profile firms told me that many startups are taking checks from Tiger Global / Falcon / SoftBank too early in their journeys.

They argue that many of these young startups have raised funds at such a high valuation that if they are not able to hit the metrics they have told their existing lead investors, very few in the industry would be in a position to engage with them at a later stage.

“And even the likes of Tiger will not back you then,” one investor said, pointing to examples such as Bangalore-based Upstox, which raised from Tiger Global in the past, but later Tiger invested in its chief rival Groww. “Tiger is backing the race, not the horse,” another investor said.

A down cycle is a scenario many investors are preparing for. But it appears the music, so to speak, has only gotten louder in recent weeks.

Bangalore-based edtech Brightchamps is in advanced stages of talks to raise at over $500 million valuation, while Ola Electric has held talks to raise at over $3 billion valuation, according to multiple people familiar with the matter. Fidelity and Goldman Sachs have held talks to invest in a pre-IPO round of Paytm, one person said.

ShareChat is about to raise $150 million to $200 million from Temasek and others at a pre-money valuation of $2.8 billion. Prosus Ventures is in advanced stages of talks to lead an investment round in Upstox.

Sequoia is in talks to invest in Gitcoin and back Dive again, while Infra.Market, which was valued at $200 million in December last year and $1 billion earlier this year, is in talks to raise at over $2 billion valuation. Many other startups that turned unicorns this year are also in the market to finalize new rounds. BharatPe, Open, and Yap are in advanced stages of talks to finalize new rounds, TechCrunch has reported in recent weeks.

There are at least seven more $50 million+ rounds, and more than a dozen $20 million+ rounds that are expected to close within weeks. (I wish I could share the names but दोस्ती बनी रहे)

Elsewhere in Bangalore, there’s another sense of urgency.

Several founders in India are starting crypto startups for customers across the world, but high-profile investors in India have largely stayed away from this category, in part, because of India’s confusing stand about virtual currencies. Their absence has resulted in many of these startups secure funds from international funds and angels.

But this may change soon. Several venture funds including Sequoia Capital India, Lightspeed, Accel, WEH, and Kalaari are currently building their thesis for investments in crypto startups, people familiar with the matter told me.

News: Renegade Partners rolls out its much-anticipated debut fund with $100 million

Renegade Partners — a Bay Area-based venture firm cofounded by veteran VCs Renata Quintini and Roseanne Wincek — is taking the wraps off a $100 million debut venture fund that’s been capturing the imagination of the business press since almost its conception in late 2019. The effort is interesting for a number of reasons, not

Renegade Partners — a Bay Area-based venture firm cofounded by veteran VCs Renata Quintini and Roseanne Wincek — is taking the wraps off a $100 million debut venture fund that’s been capturing the imagination of the business press since almost its conception in late 2019.

The effort is interesting for a number of reasons, not least because of the backgrounds of both Quintini and Wincek, both of whom left powerhouse venture firms to join forces. Quintini, a trained attorney, was an investment manager with Stanford University’s endowment before being recruited into Felicis Ventures, after which she was poached by Lux Capital. Across those firms, she worked closely with a number of high-flying startups, including the autonomous driving company  Cruise, the satellite startup Planet, and the clothing company Bonobos.

Wincek was meanwhile once set on nabbing a PhD at UC Berkeley, instead leaving the school with a master’s degree in biophysics to head to Stanford for her MBA. From there, it was on to Canaan as a principal, and from there, she headed to IVP, where she rose through the senior ranks to partner, investing across enterprise and consumer companies that include Glossier, Compass, MasterClass, and TransferWise.

It’s not a new trend, successful VCs who happen to be women leaving established firms to create their own outfits. Think Mary Meeker of Bond, Dayna Grayson of Construct Capital, and Beth Seidenberg of Westlake Village BioPartners, just to name a few. But unlike some of its predecessors, Renegade is isn’t limiting itself to playing a certain role in the venture universe. It isn’t bound to any sector. It isn’t marketing itself as an early-stage venture firm. What it is looking for is a fairly specific mix of traction, team, and market — a combination that it is finding in companies that are anywhere from their Series A to Series C stage.

An in-house head data scientist from the insurance giant John Hancock is helping considerably, say the cofounders. So is a chief people officer with a powerful resume of her own (Uber, Zoom, Milo); principal Chloe Breider, a former IVP investor who worked closely with Wincek; and, as Renegade’s “decision scientist,” the former professional poker player and best-selling author Annie Duke.

We talked with Quintini and Wincek earlier today to learn more about what they have assembled — and how Renegade makes its mark in an industry that has never been more competitive. Excerpts from that chat, below, have been edited lightly for length.

TC: People would probably shiv someone to get a job at either firm where you worked. What drove you to leave, and who reached out to whom when it came time to partner?

RW: We first met when I was a Canaan and Renata was at Felicis, and back then, there weren’t many women in venture, so [women VCs were like] “Oh, there’s a new one, ‘Come meet everybody.’” Over the years, we looked at a lot of stuff together, and especially after I moved to IVP,  I was always bugging Renata about what was in her portfolio.

A few years ago, we were at one of those big, boozy dinners, with a bunch of people of our age at a bunch of firms. We were all having the conversation like, ‘Oh, if I had my own firm, I would do this, and I would do that,’ and Renata and I were finishing each other’s sentences. And I remember going up to her and saying, “We should have this conversation for real but maybe with less wine.” And that was Memorial Day of 2019.

TC: Institutional investors sometimes worry about how well an emerging manager team will get along when they’re coming from different places. How did you address this?

RQ: We were good friends, I thought Roseanne was a phenomenal investor, but frankly, we didn’t know if we would be good cofounders and that’s the biggest risk, right? We did ask: how do we de-risk this? And we actually hired a coach for what we jokingly refer to as marriage counseling. But we did a lot of work around how we handle stress and what success looks like and what our values are. We also spent a lot of time in hotel rooms, and I can tell you that Roseanne is more of a morning person than I am.

TC: You were raising this in the middle of the pandemic. How did that impact fundraising?

RQ: We had our first close on Friday, March 13, the weekend before COVID [started shutting everything down]. The Grand Princess Cruise was coming into the Bay, and we’re on the phone with the LPs, and we didn’t know if people were to going to come through. I think if we didn’t have our track records to draw from, [the fund] wouldn’t have happened. We were very lucky that we were backed by institutional LPs — an Ivy League school, endowments, foundations, family offices. But we did not factor in COVID.

TC: I see language about the “supercritical stage” on Renegade’s site. What does that mean?

RW: That phrase is purposely vague, because we don’t think the stage definitions mean that much anymore. I started my career as a chemist way back when, and supercritical fluid is the state of matter that is neither liquid nor gas but both at the same time, and we feel like companies can be the same. There’s a product to market, there is some data, there’s early customer love and generally a sizable team, but they’re not the big growth companies yet, right? They’re not ready to raise a big growth round and pour fuel on the fire, and that’s how we think about [our ideal targets].

Our sweet spot is [a startup with] early revenue — from a quarter million dollars a year up to a million dollars a month — [that have] from 20 to 100 employees [and which are] raising rounds that are between $10 million and $50 million. Our first deal was actually a Series C deal, but we have Series A and Series B companies in the portfolio, too, that all sit in that sandbox.

RQ: There’s so much capital today that capital is cheap. But execution is expensive, so our focus is on preparing startups to execute as big, giant companies. It’s: How do I think about the organization as it scales? How do I think about the exact team that I need? How do I think about my option pool? About my founder role design? How do you manage your capital and leverage your board? Things are working so well for some founders that the wheels are falling off the bus; meanwhile, many are thinking about these same questions [that they never had time to sort out].

TC: If you aren’t sector or stage focused, how do you whittle down what you’re looking to fund?

RQ: One good thing about [the types of startups we’re backing] is that they were funded by somebody else before, so it’s a known universe, if you’re thinking about it from a data science perspective.

Beyond that, it’s applying the heuristics that Roseanne, myself, Chloe, Susan [Alban, Renage’s chief people officer], have had from a decade plus of investing and working at outlier companies. It’s not just a number. It’s the quality of revenue. It’s a combination of other breadcrumbs that the companies put out there in terms of who have they hired and what are customers thinking of their product, and is this company building a system of record, and what is the velocity of adoption. Technology alone can’t do [the work].

TC: There’s so much money sloshing around right now. In terms of the advice you’re giving your portfolio companies, what do you tell them about how to react when someone knocks on the door and offers more funding right after they’ve closed a round?

RQ: There are so many dimensions here.  First, you should look at it from your company’s needs. You got to deploy this capital, and you got to provide a return on this capital, and nothing is free, so the more money you raise, the higher the valuation you receive, it catches up to you in the next round because you got to clear that watermark.

[We also tell them to ask themselves] do you have investments to make? Do you have team to hire? Some founders we’ve talked with have said, ‘I’m not going to raise any more because I cannot go faster or deploy more than my model is already supporting.  I’m actually going to execute more and then take more [capital] down the road when I’m going to get more credit for the stuff that I built, and the ROI is going to be better.’

The other piece, too, is when you’re in a very competitive environment, you have to look at what’s happening around you. Sometimes if your competitors are raising and pushing the market forward, it may be a reason to think [about raising more than you’d planned] because maybe they can out-hire you or they can outspend you in certain areas and can generate more traction. So you can’t look at things in absolute terms. At the same time, there is no free money and a lot of founders unwittingly create more problems for themselves [by not thinking through what that next check means].

TC: People see a women-led venture team and wonder how focused you will be on women-led startups.

RQ: I think we’re great investors who happen to be female. Our primary focus is on diversity of experience and thoughts. Gender is  just one of the lenses, and diversity is one of the core values of organization because we believe that provides better returns.

RW: One thing that’s been really fun and validating and inspiring about all this is the people who do come out of the woodwork who are so excited [about Renegade], because representation matters. At the end of the day, this is how this changes. We chip away at this and soon, you won’t ask this question anymore because it won’t be topical. That’s the goal.

TC: Do you feel that the diversity matters for LPs? Do you think that diversity is going to be codified in the way that LPs are looking at investing in funds?

RQ: Some lead with it. Others say, ‘Let me look at past returns. They look at lagging indicators.’ Today, founders are picking investors who reflect their values, who they’re proud to be associated with — people who have their same energy people and will go to bat for them and with them. These are the returns of the future, regardless of whatever Cambridge tells you today about investments that were made in the past. Leading LPs know this.

News: Juni, a ‘vertical’ neobank for e-commerce and online marketing companies, raises $21.5M

E-commerce in Europe is expected to grow 30% this year to $465 billion, and that’s giving rise to a new ecosystem of services built to cater to e-commerce merchants. In the latest development, Juni, a neobank that is built specifically for companies selling online, has closed a Series A of $21.5 million, only 12 weeks

E-commerce in Europe is expected to grow 30% this year to $465 billion, and that’s giving rise to a new ecosystem of services built to cater to e-commerce merchants. In the latest development, Juni, a neobank that is built specifically for companies selling online, has closed a Series A of $21.5 million, only 12 weeks after officially opening for business.

The Series A is being co-led by partners from DST Global and Felix Capital with previous backer Cherry Ventures and other early investors also participating. Gothenburg, Sweden-based Juni had previously raised a seed round fo €2 million ($2.4 million) back in November when it was still only in waiting-list mode.

Part of the reason that the latest funding has materialized so quickly is because Juni has had very strong take-up its three short months of life: Samir El-Sabini, Juni’s co-founder and CEO, told TechCrunch that startup has signed up 300 businesses from a waitlist of 3,000, representing customer growth of around 500% month-on-month. Customers, he said, were primarily those selling their own inventory; dropshippers selling on behalf of retailers; and performance marketers who have moved into selling goods.

The other reason is that Juni is doing so well on both the investor and customer fronts is because of what it has identified and understood, and is building to fix.

El-Sabini and his two co-founders Anders Oresdal (CTO) and Jonathan Sanders (COO) all come from a background of working in e-commerce and fintech (in fact, one previously was at expenses startup Pleo, which this week announced a major round of funding; and two others worked at another expense management startup) and so they know all too well the shortcomings of a lot of banking services when it comes to serving businesses carry out their business online.

As El-Sabini described it, while traditional banks have long courted SMBs as customers, they have never truly understood the dynamics, challenges and particularities of running an e-commerce business, and that has made them less responsive to the financial profiles and needs of these companies.

“What we do is that we provide insights and knowledge of the e-commerce industry,” he said. “And we can have a low risk profile because we understand all the cost centers. We understand what Taboola is, we know Shopify.” El-Sabini noted that typically e-commerce companies have money spread out across different services such as ad networks, payment gateways and their banks.

“So we give them a unified view of all those dashboards. Then we derive insights based on all that activity to give you ‘the right number’,” by which he means a real idea of what the company’s cashflow, incomings and outgoings are across all of these services so that you know how much you have to invest or use in other areas, and specifically on advertising to bring in more customers.

“It’s all about return on ad spend and liquidity,” said El-Sabini.

Cashflow comes into play also with the payment cards that Juni provides as part of its service, he added.

“You need a card with high spending limits,” primarily to account for how you spend money over the month and then pay it back in in a delayed way (due to the time taken for revenues to clear payment gateways, etc). Without the high limits, your card might get rejected when you use it to pay for marketing and ad campaigns.

“Ad campaigns will not do well if you get a card decline,” he said, since Google and others typically demote you in its algorithms when that happens. “My previous company used to switch cards every quarter because we had so many declines.” That, of course, is a pain to sort out and definitely not what you want to be spending your time doing if you’re trying to grow your e-commerce business.

And, when there is a problem, El-Sabini notes that its customer service people speak the same language as the customers, so will be able to address and cope with their issues better.

To sum up all of the above, Juni simply built the kind of bank that the founders wished they had at their previous companies, and that has resonated with others, resulting in what El-Sabini called “tremendous, fund and hopeful growth.” Case in point: the press release I was sent for the story last week noted that Juni had 250 customers across Europe, but by the time we talked the number had grown to over 300.

There is something else interesting about what Juni is doing, which points to a bigger trend in fintech that is probably worth watching, too.

Neobanks have made significant inroads into the world of finance, providing consumers with a better and more modern user experience, more personalization and often better rates than their larger, incumbent counterparts, and we have seen some major developments on that front: huge valuations, big customer growth, and now, slowly, the first of them going public.

Now we are seeing a very strong second wave of neobanks emerging, which are less widely targeted and aiming at more specific, vertical opportunities. These could be something like targeting the agricultural community, or freelancers, or SMBs, or specifically companies working in e-commerce as Juni has.

On that note, there really are a lot of fintech startups targeting smaller businesses with banking services now. They include Finom, Wise, Hatch, Novo, and many others. There is even some competition specifically within e-commerce neobanks, with companies like Viva Wallet, Incard (which appears yet to launch), Yan, and likely more also attempting to cater to the same people that Juni is.

For now it is standing out partly because of how quickly it’s getting adopted, and how they have set out to own this space. That will see Juni also moving into a wider range of products to fill out more of the needs of running an e-commerce business, be it more kinds of credit products to keep cash flowing, one reason why storied investors like DST are interested.

“In just three months, Juni has already proven that it has the potential to become the next big technology solution for merchants worldwide. The product resonates strongly with their customers by solving a clear pain point and putting time back in the hands of digital entrepreneurs,” said Joseph Pizzolato and Susan Lin, investors at Felix Capital, in a joint statement. “As investors, we look for signs of ‘customer love’ and ‘digital queues’ in all our investments, and a waitlist of over 3,000 SMEs for Juni’s product is as good as we’ve seen! We immediately connected with the team and we firmly believe in their vision. Their attention to detail and understanding of their customer’s needs puts them in an ideal position to win this market.”

“Samir, Anders, Jonathan, and the team continue to amaze us,” added Sophia Bendz, a partner at Cherry Ventures. “Since Juni’s beta launch, they’ve experienced an extremely impressive month-on-month transaction volume in such a short period. They have also built a world class team across compliance, finance, tech, and marketing functions as well as fostered a deep commitment to building community and trustworthiness. They are well on their way to becoming the go-to financial companion for e-commerce entrepreneurs globally. This is only the beginning and we couldn’t be more excited to continue to back this team.”

News: Extra Crunch roundup: Video pitch decks, Didi’s regulatory struggles, Nothing CEO interview

The numbers don’t lie. According to DocSend, the average pitch deck is reviewed for just three minutes. And if you think a senior VC is studying the presentation your team crafted for months as if it were a Fabergé egg — well, you might be disappointed. Even if you are lucky enough to land a

The numbers don’t lie.

According to DocSend, the average pitch deck is reviewed for just three minutes. And if you think a senior VC is studying the presentation your team crafted for months as if it were a Fabergé egg — well, you might be disappointed.

Even if you are lucky enough to land a meeting, it’s more likely that a junior person went through your pitch and ran it up the chain.

“The biggest lie in venture capital is: ‘Yes, I read through your deck,’” says Evan Fisher, founder of Unicorn Capital and Minimal Capital.

“Because those words are immediately followed by, ‘ … but why don’t you run us through it from the beginning?’”


Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.


According to Fisher, the pro forma pitch deck is a thing of the past. Instead, the founders he’s worked with who made video pitches netted two to five times as many investor meetings as people who sent traditional pitch decks.

They also received up to five times more in terms of investor commitments from the first 20 meetings.

“Even if the only benefit was that other investment committee members heard the story direct from the founder, that alone would make your video pitch worth it,” says Fisher.

Thanks very much for reading Extra Crunch this week!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

 

Nothing founder Carl Pei on Ear (1) and building a hardware startup from scratch

Carl Pei OnePlusDSC04551

Image Credits: TechCrunch

In an exclusive interview with Hardware Editor Brian Heater, Nothing Founder Carl Pei discussed the product and design principles underpinning Ear (1), a set of US$99/€99/£99 wireless earbuds that will hit the market later this month.

“We’re starting with smart devices,” said Pei. “Ear (1) is our is our first device. I think it has good potential to gain some traction.”

Despite Apple’s market share and the number of players already competing in the space, “we’ve just focused on being ourselves,” said Nothing’s founder, who also shared initial marketing plans and discussed the inherent tensions involved with manufacturing consumer hardware.

“Everything is a trade-off. Like if you pursue this design, that has a ton of implications. Battery life has ton of implications on size and on cost. The materials you use have implications on cost. Everything has an implication on timeline. It’s like 4D chess in terms of trade-offs.”

 

Will Didi’s regulatory problems make it harder for Chinese startups to go public in the US?

Last week, just days after its U.S. IPO, cybersecurity regulators in China banned ride-hailing company Didi from onboarding new members.

Over the weekend, authorities called for Didi to be removed from several app stores due to “serious violations of laws and regulations in collecting and using personal information.”

The move suggests that China’s government “is willing to sacrifice business results for control,” writes Alex Wilhelm in this morning’s edition of The Exchange.

“For China-based companies hoping to list in the United States, the market likely just got much, much colder.”

 

79% more leads without more traffic: Here’s how we did it

Image Credits: Peter Dazeley (opens in a new window)/ Getty Images

Jasper Kuria, the managing partner of CRO consultancy The Conversion Wizards, walks through an A/B test showing how research-driven CRO (conversion rate optimization) techniques led to a 79% increase in conversion rates for China Expat Health, a lead-generation company.

“Using research-based CRO principles to optimize a landing page for PPC (pay per click) traffic produced a 79% conversion lift, dramatically reducing the cost per lead for the company,” Kuria writes.

“They could then afford to bid more per click, which increased their overall monthly leads. CRO can have this kind of transformative effect on your business.”

News: Daily Crunch: Nothing sets July 27 rollout for noise-canceling Ear (1) earbuds

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 July 6, 2021. We’re back after a holiday here in the United States. Not that that stopped global technology news, mind, so there’s a lot to get into. Before we do, one more reminder about TechCrunch Early Stage later this week — your humble servant is running a session with venture capitalist Sarah Kunst about fundraising. It’s going to rock. — Alex

The TechCrunch Top 3

Today’s Top 3 are all about conflict. Between tech companies, between tech companies and governments, and between tech companies and their shareholders. Enjoy:

  • Governments versus tech: The scrap between China’s government and Chinese ride-hailing company Didi escalated over the break, from the company having to stop accepting new users to losing its spot in app stores. The company’s stock is down sharply today. Our read? China’s government crackdown on tech is not over, and Chinese companies going public in America just hit a pace better described as glacial. Related: Twitter versus India is still rolling along, and it’s not going well.
  • A cloudy mess: Remember that huge deal to award a cloud contract from the U.S. military to one major tech company? Microsoft won; Amazon pitched a fit. And now neither company will get the $10 billion deal. Womp.
  • Box versus investors: Rounding out our conflict coverage, the latest from Box. Former cloud storage darling and present-day public enterprise productivity shop Box is locked in a lengthy argument with activist investor Starboard. Today, Box went the corporate equivalent of supernova by releasing a TikTok video of its communications with the investing group, essentially calling them out for hypocrisy. Not that that charge means much to amoral capital pools searching for above-market returns, but, hey, it made for some good headlines.

Startups/VC

Today’s startup news includes a number of funding rounds, a neat new venture capital fund and some SPAC news from space (and Earth):

  • Super.mx raises $7.2 million: The Mexico City-based insurtech startup has put together a Series A for its “managing general agent” approach to offering coverage. The startup claims to be able to “handle the entire user experience just like a direct-to-consumer carrier, but with the breadth of product choice offered by an aggregator.”
  • Single.Earth raises $7.9M for crypto-carbon tokens: Here’s an idea that I don’t fully understand: linking carbon credits to tokens that represent the real world. That’s the gist of Single.Earth, which wants to shake up how companies compensate for their carbon footprint. It uses MERIT tokens, and, per its website, is creating a “digital twin” of the natural world.
  • Wagmo raises $12.5M for better pet insurance: Insurtech is a hot market because insurance is a huge market. So large that even its subdivisions are attracting startup competition. Wagmo — not Waymo, mind — wants to bring more pet services into its product to cover your pet more holistically.

Next, a new fund:

  • iFly.vc raises second fund worth $46M: I don’t bring you many new venture capital fundraises because they seem a bit meta for our startup focus, but here’s one regardless. Why include it? The venture capital group — which has a neat history, as the post details — relocated from San Francisco to Austin during the pandemic. That’s notable.

And from the SPAC beat:

  • Space SPAC: Sattelogic is going public via a SPAC. Its deck is light on past results and heavy on future incomes.
  • Earth SPAC: Nextdoor is going public via a SPAC. Its deck is far more rooted in terrestrial things, like trailing revenue.

Finally, TechCrunch covered upcoming headphones from Nothing, a hardware upstart that we don’t know much about. But it thinks its $99 headphone offering can compete with Apple’s AirPods Pro line. Which cost 2.5x as much. If a startup can manage that, we’ll be super impressed. And Nothing will be worth several somethings.

Nothing founder Carl Pei on Ear (1) and building a hardware startup from scratch

In an exclusive interview with TechCrunch Hardware Editor Brian Heater, Nothing Founder Carl Pei discussed the product and design principles underpinning Ear (1), a set of US$99/€99/£99 wireless earbuds that will hit the market later this month.

“We’re starting with smart devices,” said Pei. “Ear (1) is our first device. I think it has good potential to gain some traction.”

Despite Apple’s market share and the number of players already competing in the space, “we’ve just focused on being ourselves,” said Nothing’s founder, who also shared initial marketing plans and discussed the inherent tensions involved with manufacturing consumer hardware.

“Everything is a trade-off. Like if you pursue this design, that has a ton of implications. Battery life has ton of implications on size and on cost. The materials you use have implications on cost. Everything has an implication on timeline. It’s like 4D chess in terms of trade-offs.”

Read the full interview on Extra Crunch.

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

Big Tech Inc.

We got through most of the Big Tech news in our Top Three today, but there’s still a bit more for your enjoyment:

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.

As usual, if you have a recommendation of a growth marketer we should know about, fill out the survey here.

WordPress Image Lightbox Plugin