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While much of the recent wave of relentless hype around NFTs — or non-fungible tokens — has been most visibly manifested in high-dollar art auctions or digital trading cards sales, there’s also been a relentless string of chatter among bullish investors who see a future that ties the tokens to the future of social media and creator monetization.

Much of the most spirited conversations have centered on a pre-launch project called BitClout, a social crypto-exchange where users can buy and sell tokens based on people’s reputations. The app, which launches out of private beta tomorrow morning, has already courted plenty of controversy inside the crypto community, but it’s also amassed quite a war chest as investors pump tens of millions into its proprietary currency.

Early backers of the platform’s BitClout currency include a who’s who of Silicon Valley investors including Sequoia Capital and Andreessen Horowitz, the startup’s founder tells TechCrunch. Other investors include Chamath Palihapitiya’s Social Capital, Coinbase Ventures, Winklevoss Capital and Reddit co-founder Alexis Ohanian. A report in Decrypt notes that a single wallet connected to BitClout has received more than $165 million worth of Bitcoin deposits suggesting that huge sums have already poured into the network ahead of its public launch.

BitClout falls into an exploding category of crypto companies that are focusing on tokenized versions of social currency. Others working on building out these individual tokens include Roll and Rally, which aim to allow creators to directly monetize their internet presence and allow their fans to bet on them. Users who believe in a budding artist can invest in their social currency and could earn returns as the creator became more famous and their coins accrued more value.

“If you look at people’s existing relationships with social media companies, it’s this very adversarial thing where all the content they produce is not really theirs but it belongs to the corporation that doesn’t share the monetization with them,” BitClout’s founder, who refers to themselves pseudonymously as “diamondhands,” tells TechCrunch. (There’s been some speculation on their identity as a former founder in the cryptocurrency space, but in a call with TechCrunch, they would not confirm their identity.)

The BitClout platform revolves around the BitClout currency. At the moment users can deposit Bitcoin into the platform which is instantly converted to BitClout tokens and can then be spent on individual creators inside the network. When a creator gets more popular as more users buy their coin, it gets more expensive to buy denominations of their coin. Creators can also opt in to receive a certain percentage of transactions deposited into their own BitClout wallets so that they continue to benefit from their own success.

The company’s biggest point of controversy hinges on what has been opt-in and what has been opt-out for the early group of accounts on the platform. Most other social currency offerings are strictly opt-in. Users come to the platform in search of a way to create tokens that allow them to monetize a fanbase and build a social fabric across multiple platforms. The thought being that if the platforms own the audience then you are at their mercy.

BitClout has taken an aggressive growth strategy here, turning that model on its head. The startup has pre-populated the BitClout network with 15,000 accounts after scraping information from popular public Twitter profiles. This means that BitClout users can buy shares of Kim Kardashian’s social coin or Elon Musk’s without those individuals ever having signed up for a profile or agreeing to it. This hasn’t been well-received by all of those who unwittingly had accounts set up on their behalf including many crypto-savvy users who got scooped up in the initial wave of seeding.

The startup’s founder says that this effort was largely an effort to prevent handle squatting and user impersonation but he believes that as the platform opens, a sizable pre-purchase of creator coins reserved for the owners of these accounts will entice those users to verify their handles to claim the funds.

Perhaps BitClout’s most eyebrow raising quirk is that the platform is launching with a way to invest into the platform and convert bitcoin into BitClout, but at launch there’s no way to cash out funds. The project’s founder says that it’s only a matter of time before this is resolved, and points to Coinbase and the Winkelvoss twin’s status as coin holders as a sign of future exchange support to come, but the company has no specifics to share at launch.

While the founders and investors behind the project see a bright future for social currencies on the blockchain, many in the decentralized community have been less impressed with BitClout’s early efforts to achieve viral adoption among creators in a permission-less manner.

“BitClout will make a great case study on how badly crypto projects can mess up incentive engineering when they try to monetize social networks.” Jay Graber, a decentralized platform researcher involved in Twitter’s bluesky effort, said in a tweet. “Trust and reputation are key, and if you create a sketchy platform and mess with people’s reputations without their consent it is not going to go well.”

If BitClout comes out of the gate and manages to convert enough of its pre-seeded early adopter list that there is value in joining its closed ecosystem version of a social token then it may have strong early momentum in an explosive new space that many creators are finding valuable. The concepts explored by others in the social currency space are sound, but this particular execution of it is a high-risk one. The network launches tomorrow morning so we’ll see soon enough.

Starting May 1, apps in China can no longer force users into providing excessive personal data, according to a document jointly released by a group of the country’s top regulators, the Cyberspace Administration, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation.

It’s a common practice in China where apps ask users to provide sensitive personal information and those who decline to share are often denied access. While some of the requests are justifiable, such as one’s location information to use a navigation map, many others are unnecessary, such as one’s biometrics to make mobile payments.

In December, Chinese authorities lay out the acceptable range of data that different apps are entitled to collect, as TechCrunch reported. 

All forms of apps are subject to the requirements, including the increasingly popular “mini programs,” which are lite apps accessed through an all-encompassing native app such as WeChat and Alipay without the need for an app store install, said the new document.

For now, the document appears to be a guideline at best as it does not specify how the rules should be enforced and how offenders will be punished. While it marks China’s incremental progress on data protection, regulators will have to keep updating the rules as people’s daily lives are becoming more linked to digital devices at a rapid rate.

In recent months, China has been clamping down on the technological darlings that it used to pride itself on. It introduced a sweeping antitrust law to rein in its “platform economy” and slammed anti-competition fines on Alibaba and Tencent, following Ant Group’s IPO fiasco.

Nearly five years after the launch of Pokémon Go, Niantic announced Monday that they are partnering with Nintendo to co-develop a new title based on the company’s Pikmin franchise.

Niantic says the app is being developed in their Tokyo office and will launch later this year.

“The app will include gameplay activities to encourage walking and make walking more delightful,” a press release from Niantic reads. The company notably specifies that the title will make use of their augmented reality platform to integrate the real world into the app’s experiences.

Pokémon Go has fallen out of headlines but has continued to deliver massive sums to the San Francisco gaming company, eclipsing $1 billion in revenue in 2020. In recent years, Nintendo has sought to build out their presence on mobile gaming platforms with a number of titles playing on some of their biggest franchises, but none of them have reached Pokémon Go’s level of success.

Niantic has raised nearly $500 million in capital, most recently raising at a $4 billion valuation.

Healthcare tech startup Ro has raised $500 million to help fuel continued growth of its hybrid telehealth/in-home primary care platform, which also includes a growing pharmacy business as the company pursues a strategy of vertical integration to optimize delivery and reduce costs for clients. The company’s latest raise is a Series D round, and means it has now raised over $876 million since its 2017 founding.

That may seem like a lot of money, but as Ro co-founder and CEO Zachariah Reitano told me in an interview, it’s actually “peanuts” when it comes to the healthcare industry – which is part of why they founded the company in the first place.

“Sometimes people talk about how great it is to be in the healthcare arena, in tech circles,” Reitano said. “They say, ‘Oh, healthcare is a $4 trillion market – it’s so massive.’  But that’s the worst thing in the entire world; it’s awful how large it is. And I think what we have the opportunity to cut it in half with technology.”

That’s what Reitano says will be the primary focus of this round of funding: Fueling its efforts around vertical integration of healthcare services and technology, to further the eventual end goal of reducing costs to patients through the efficiencies realized in that process.

“To me, what I’m really excited about is being able to continue to invest in that infrastructure and add even more,” Reitano told me. “We’ll continue to invest in telemedicine, we’ll continue to invest in our logistics and pharmacy, and continue to invest in in-home care, as well as the connection between the three, and then we’ll also invest in additional diagnostics, remote patient monitoring – so collecting and distributing devices to patients to go from reactive to proactive care.”

Ro’s model focuses on primary care delivered direct to consumer, without involving any payer or employer-funded and guided care programs. The idea is to reduce costs through vertical integration and other efficiency engineering efforts in order to get them to the point where they’re effectively on par with your out-of-pocket expense with co-pays anyway. Reitano explained that the insurance system as it exists in the U.S. now only effectively masks individual costs, making it less clear that much of what a person pays out in healthcare costs comes out of their pocket anyway, whether it’s through taxation, or employers allocating more of the funds they have available for compensation to healthcare, vs. take-home pay.

Image Credits: Ro

That’s what’s behind Ro’s recent push into operating its own pharmacies, and growing that footprint to include more all the time. Reitano told me that the company will have 10 pharmacies by the end o this year, and 15 by the end of next, all placed strategically around the country to ensure that it can provide next-day shipping to patients at ground shipping rates pretty much anywhere in the U.S.

Doing that kind of vertical optimization has enabled Ro to offer 500 common drugs at $5 per month, including treatments for heart disease, anxiety, depression and diabetes — with a plan to ramp it to 1,000 drugs available at that price by year’s end. That’s roughly equal to the co-pay required for many insurers for the same treatments.

Meanwhile, Reitano says Ro has seen big changes in the healthcare system generally that favor its model and accelerate its hybrid care plans owing to the COVID-19 pandemic.

“I would say that there are two most profound impacts of the pandemic on the healthcare system,” he said. “One is that it simultaneously shed light on all of the inequities for the entire country to see, right at the same time where we all cared about it. So those things were sort of known for the people impacted day to day — the geographic inequity, the financial inequity, the racial inequity. If someone felt that that inequity, then they would talk about it, but it wasn’t something everyone cared about at the same time. So this massive spotlight was shed on the healthcare system. And the second was that everyone’s healthcare journey now starts online, even if it is going to end in person, it will still start online.”

Ro’s model all along has espoused this time of healthcare delivery, with remote care and telehealth appointments handling most day-to-day needs, and follow-up in person care delivered to the home when required. That obviously generate a lot of efficiencies, while ensuring that older patients and those with mobility issues also don’t need to leave the house and make a regular trip into their physician’s office for what amounts to a 15-minute visit that could’ve been handled over video.

Ro co-founders Rob Schutz, Zachariah Reitano and Saman Rahmanian (left to right)

According to most industry observers, Reitano is likely right that healthcare probably won’t go back to the old, inefficient model of favoring primarily in-person care after the pandemic ends. One of the positive outcomes of the COVID-19 situation has been proving that telehealth is more than capable of handling a lot of the primary care needs of a lot of people, particularly when supplemented with remote monitoring and ongoing proactive health measures, too.

While Ro doesn’t work with insurance currently, Reitano points out that he’s not against the concept entirely – he just says that health insurance as it exists now doesn’t actual work as intended, since it’s meant to pool risk against an, expensive, uncertain and rare outcome. Eventually, he believes there’s a place for insurance in the overall healthcare mix, but first the industry needs to face a reckoning wherein its incentive structure is realigned to its actual core customer – patients themselves.

Dispo is in the midst of a sexual assault controversy, Zoom introduces an SDK and Android owners will have to continue waiting for Clubhouse access. This is your Daily Crunch for March 22, 2021.

The big story: Investors back away from Dispo

After a recent story in Business Insider brought allegations to light that a member of David Dobrik’s vlog squad had sexually assaulted an extra during a shoot, Spark Capital announced that it would “sever all ties” with Dobrik’s photo-sharing startup Dispo, as did fellow investors Unshackled Ventures and Seven Seven Six.

“We have stepped down from our position on the board and we are in the process of making arrangements to ensure we do not profit from our recent investment in Dispo,” said Spark, which led a $20 million Series A in Dispo less than a month ago. That means any potential profits will be donated to organizations supporting survivors of sexual assault.

Dobrik, meanwhile, has stepped down from the Dispo board and left the company.

The tech giants

Zoom introduces new SDK to help developers tap into video services — The company envisions application developers embedding video in social, gaming or retail applications.

Next Billion Users head Caesar Sengupta is leaving Google — Sengupta, who also led the company’s payments business, is leaving the firm after nearly 15 years.

Tim Cook and Tim Sweeney among potential witnesses for Apple/Epic trial — A proposed witness list filed by Apple for its upcoming trial against game-maker Epic reads like a who’s who of executives from the two companies.

Startups, funding and venture capital

Side raises $150M at $1B valuation to help real estate agents go it alone — Side works to turn agents and independent brokerages into boutique brands and businesses.

Indonesian savings and investment app Pluang gets $20M in pre-Series B funding — The company offers proprietary savings and investment products that allow users to make contributions starting from 50 cents USD.

Clubhouse says its Android launch will take ‘a couple of months’ — Clubhouse co-founder Paul Davison said the company is working “really hard” to come to Android, but said it’s going to take a “couple of months” to make that happen.

Advice and analysis from Extra Crunch

NFTs could bridge video games and the fashion industry — Real-life fashion brands use NFTs for marketing in virtual worlds like Minecraft, as well as in several Atari and Microsoft video games.

ironSource is going public via a SPAC and its numbers are pretty good — Before you tune out to avoid reading about yet another blank-check company taking a private company public, you’ll want to pay attention to this one.

Where is the e-commerce app ecosystem headed in 2021? — Superapps are likely to emerge, according to PipeCandy’s Ashwin Ramasamy.

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

Everything else

US privacy, consumer, competition and civil rights groups urge ban on ‘surveillance advertising’ — Nearly 40 organizations expressed their concern in an open letter.

Five reasons you should attend TC Early Stage 2021 in April — We’re just days away from kicking off TC Early Stage 2021: Operations & Fundraising on April 1-2.

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