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Own a Tesla Model S or Model X? It might have a recall, and it’s serious.
Tesla today issued one of its largest recalls to date, covering roughly 135,000 Model S and Model X. The touchscreen is the concern.
According to the National Highway Traffic Safety Administration (NHTSA), the touchscreen in these vehicles can fail when a memory chips runs out of storage capacity, which can cause a host of failures, including affecting turn signals and defrosters, and the rearview camera. This failure can also affect Tesla’s self-driving Autopilot functionality.
The NHTSA explained the department’s findings to Tesla in a mid-January letter. According to NHTSA’s Office of Defects Investigation (ODI), the affected vehicle’s memory chips are to blame. The 8GB chip eventually wears out, and the only remedy is a replacement, the letter says.
According to the WSJ, Tesla disagrees that the issue is a failure, though the automaker is recalling a select amount of vehicles to investigate the issue.
“It is economically, if not technologically, infeasible to expect that such components can or should be designed to last the vehicle’s entire useful life,” Tesla said in the letter.
The vehicles covered by the recall include Model S sedans built between 2012 and 2018 and Model X vehicles made between 2016 and 2018. The affected vehicles are equipped with NVIDIA Tegra 3 computing platforms and an 8GB eMMC NAND flash memory device.
Source: https://techcrunch.com/2021/02/02/tesla-recalls-135000-vehicles-over-touchscreen-failures/
Uber today announced plans to acquire alcohol delivery service Drizly. The approximately $1.1 billion deal includes stock and cash and is expected to close in the first half of the year. The plan will build Drizly’s marketplace directly into the Uber Eats app, though the company notes that it will maintain Drizly as a standalone app offering as well, for the time being.
Certainly there’s a marketplace fit here. Uber provides the underlying ride hailing and delivery technologies, while Drizly can help the company expand Uber Eats into an even more potentially lucrative service.
“[CEO Cory Rellas] and his amazing team have built Drizly into an incredible success story, profitably growing gross bookings more than 300 percent year-over-year,” Uber CEO Dara Khosrowshahi said in a release. “By bringing Drizly into the Uber family, we can accelerate that trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead.”
The service has experienced a steady roll out in markets across the U.S. Though local liquor laws have offered something of a hurdle for expansion. Last month, it added Atlanta to the list, teaming up with a dozen or so local markets and liquor stores to expand delivery. Like Uber Eats, Drizly teams with local merchants in the markets it services. The company says its services reach more than 1,400 cities in North America at last count. No doubt pandemic-related shutdowns have also gone a ways toward expanding the appeal of alcohol delivery.
Founded in 2012, Boston-based Drizly has raised just under $120 million to date, per Crunchbase. That includes a $34.5 million Series C back in late-2018. More recently, the service was hit with a data breach. The breach, which was disclosed last July, was believed to have impacted up to 2.5 million accounts.
Uber says it expects around 90% of the payment to Drizly stockholders to be made in Uber stock, with the remainder coming via cash. The deal will be is pending standard regulatory approval.
Source: https://techcrunch.com/2021/02/02/uber-is-buying-alcohol-delivery-service-drizly-for-1-1b/
Despite all the headaches that come with it, homeownership is still the American dream for many.
Divvy Homes – a startup that is out to help more people realize that dream by buying a house and renting it back to them while they build equity – has just closed on $110 million in Series C funding. Tiger Global Management led the round, which also saw participation from a slew of other investors including GGV Capital, Moore Specialty Credit, JAWS Ventures, and existing backers such as a16z. The latest financing brings Divvy’s total debt and equity raised since its 2017 inception to over $500 million with about one-third of that raised in equity and two-thirds in debt.
The startup last raised $43 million in Series B funding from the likes of Affirm CEO Max Levchin and homebuilder Lennar (via its venture arm), among others. In fact, Divvy – which was co-founded by Adena Hefets, Nick Clark and Alex Klarfeld. – was incubated in Levchin’s startup studio HVF.
Mortgage rates dropped to historic laws in 2020, driven by the COVID-19 pandemic. Instead of making it easier to buy a home, many banks actually tightened underwriting requirements for approvals, said Divvy CEO Hefets. So while lenders were busier than ever, much of that volume was driven by people who already owned homes refinancing with the lower rates.
Like most companies, Divvy was initially unsure as to how the pandemic would impact its business. But as the year went on – and the whole world spent more time at home than ever, the company only saw increased demand.
“We actually paused home buying for March and April and just kind of stood still waiting to see what would happen to the world,” Hefets said. “And when it felt like the world became stable again, we said, ‘Okay, let’s get back out there.’ ”
Divvy Homes CEO and co-founder Adena Hefets
Ultimately, over the course of 2020, Divvy expanded operations from 8 to 16 total markets and financed five times as many homes as it had in pre-pandemic times. It also worked with its existing customers by offering flexibility and rent relief in the way of waived late fees and flexible payment scheduling, for example.
“Mortgages were harder to get yet we were seeing this mad rush of people who wanted to move out of multifamily and downtown areas,” Hefets recalls. “So while traditional financing dried up, we saw a really good tailwind for our business.”
Divvy declined to disclose the valuation at which this round was raised but Hefets said it was “very highly oversubscribed.”
Rent to own
So how does Divvy work?
Divvy claims to be different from other real estate tech companies in that it aims to digitize “the archaic, data-heavy processes buyers encounter along the way.” It works with renters who want to become homeowners by buying the home they want and renting it back to them for three years “while [they build] the savings needed to own it themselves.”
Rather than buy homes and look for renters, the company does the opposite. Customers pick out a home and Divvy purchases it on their behalf with the renter contributing an initial 1-2 percent of the home value. They move in at closing, and pay one monthly amount. Part of that money is a “market-rate” rent and about 25 percent goes toward building up their savings in the house so they can put a down payment (estimated at 10 percent value of the home) on to purchase from Divvy later. The renters can choose to cash out their equity or purchase the home before the three years are up, if they choose. They also have the option to re-up their contract if needed, to take a bit longer to save up for a larger down payment.
Divvy started buying homes in the first half of 2018 and so far, the company is seeing nearly half of those renters buying back the homes.
“Even the most experienced players in the space, maybe have low single-digit buyback rates so it’s definitely quite a bit higher than what the rest of the industry is seeing,” Hefets told TechCrunch.
When it first started out, the prices of the homes it bought averaged around $140,000 to $150,000. Now the average home prices are more like just over $200,000, she said.
While Divvy’s mission involves wanting to make homeownership more accessible, Hefets points out that it’s a lucrative business model as well.
“The number of people who fall outside of the traditional mortgage box is growing,” she added, with more people struggling to be able to purchase a home.
Investor POV
Andreessen Horowitz General Partner Alex Rampell led the first investment in Divvy. He recognizes that from the consumer perspective, it’s difficult to be able to save for a down payment “when you’re throwing away money on rent every month.”
“A huge number of people want to become homeowners but just can’t,” he said.
Rampel also appreciates that its model is not as speculative as the typical investor approach of first buying a home and then renting it out.
“So they’re not spending the first nine months after purchasing a home looking for a tenant,” he said. “They’re not speculating on an empty house and worrying what happens if they buy a home and can’t rent it out.”
For Tiger Global Partner Scott Shleifer, what Divvy has accomplished is “phenomenal.”
“Over the next ten years we believe they could help over one hundred thousand families become financially responsible homeowners,” he said in a written statement.
Looking ahead, Divvy plans to use its fresh capital in part to expand to more markets with the lofty goal of serving more than 70 million Americans in over 20 markets by year’s end beyond cities such as Atlanta, Denver, Dallas and Tampa. The 80-person company also plans to take its offering a step further by launching ancillary product offerings to take buyers throughout the home buying journey. It already helps customers through title & escrow, inspections, negotiating and repairs. But ultimately, Divvy wants to “create a complete end-to-end experience” from providing realtors to serving as a lender, according to Hefets.
“That’s our bigger vision,” she said. “We’re not there yet.”
Following a government review, the U.K.’s financial services regulator will instructed to regulate the buy now, pay later industry made popular by companies such as Klarna, and AfterPay (known as Clearpay in the U.K.).
A further consultation with the industry is underway and then, when parliamentary time allows, new laws regulating buy now, pay later will be passed.
This will see the Financial Conduct Authority (FCA) asked to bring in stricter controls for interest-free buy now, pay later agreements, including firms being asked to undertake more comprehensive affordability checks before lending, and ensuring customers are treated fairly, “particularly those who are vulnerable or struggling with repayments”. Until now, because the industry has been unregulated since it falls outside of other interest-bearing credit products, such as credit cards, consumers have been left with little formal recourse when things go wrong.
“Many consumers do not view interest-free buy-now-pay-later as a form of credit, so do not apply the same level of scrutiny, and checks undertaken by providers tend to focus on the risk for the firm rather than how affordable it is for the customer,” says the U.K. Treasury.
The review, undertaken by the FCA’s Christopher Woolar, also rightfully highlights the issue of credit checks and the lack of visibility between lenders. “Although the average transaction tends to be relatively low, shoppers can take out multiple agreements with different providers – and the Review finds it would be relatively easy to accrue around £1,000 of debt that credit reference agencies and mainstream lenders cannot see,” notes the Treasury.
The review also estimates that buy now, pay later in the U.K. is worth £2.7 billion ($3.7 billion), with 5 million people USING buy now, pay later since the pandemic-induced boom in online shopping, with many already in arrears from other forms of credit.
Up until now, interest-free buy now, pay later offered by retailers has fallen outside of U.K. regulation designed to protect consumers from credit-based financial products, something Alice Tapper, a financial campaigner in the U.K. who last June started the #regulateBuyNowPayLater campaign, previously told me is “a classic case of regulation not keeping up with tech giants”.
“The consumer credit act, written back in the 1970s was not drafted with algorithms and split-second lending decisions in mind,” she explained. “What this means in practice is zero consumer protection. Consumers are given no information about risk at the point of purchase or in ads. No mention of debt collection or responsible spending. This is particularly concerning for young and vulnerable consumers, who may have no prior experience of using credit products.”
Meanwhile, Klarna, for example, has always maintained it isn’t against further regulation per se. The devil, of course, will be in the detail, which is still being worked out. “I think good regulation that’s written in a meaningful way could make sense,” Klarna CEO and co-founder Sebastian Siemiatkowski told me late last year. “We’re not against it at any point, as long as it makes sense, as long as it’s equal for all players in the market.”
Source: https://techcrunch.com/2021/02/02/buy-now-pay-later-to-be-regulated-in-the-uk/
Holded, a platform billing itself as an ERP aimed at small businesses, has raised a €15M Series B funding round led by VC firm Elaia, together with Lakestar, Nauta Capital and Seedrocket.
Holded says it gives small business access to ERP-style planning across invoicing, accounting, sales, project management, inventory management and HR, in one dashboard. It’s attracted 80,000 customers to date. The money will be used to grow its technology and business teams. Its product is also used by accounting firms to digitalize their businesses and become value-added resellers. It will now open an office in Paris.
In a statement co-founder, Javi Fondevil said: “We knew the idea of centralizing all your business in one place was very powerful and the only reason why nobody did it before was that it’s extremely hard to design an intuitive self-serve ERP for Small Businesses.”
Pauline Roux, Partner at Elaia, said: “We strongly believe that the opportunity ahead to build solutions for small businesses is massive. In the case of ERPs, solutions tend to be very complex modular products and, as Small Businesses don’t have independent departments, they need an integrated and very intuitive solution. Most of the new ERPs are just doing the same as the incumbents but in the cloud. Holded developed the first ERP we have seen without modules, long implementation times or consultants needed, they’ve really changed the whole experience.”
The ERP startup space is hotting-up. In January Xentral, a German startup that develops enterprise resource planning software covering a variety of back-office functions for the average online small business, picked up a Series A of $20 million.
