& meet dozens of singles today!
User blogs
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
This week we — Natasha and Danny and Alex and Grace — had more than a little to noodle over, but not so much that we blocked out a second episode. We try to stick to our current format, but, may do more shows in the future. Have a thought about that? equitypod@techcrunch.com is your friend and we are listening.
Now! We took a broad approach this week, so there is a little of something for everything down below. Enjoy!
- Hims is going to SPAC itself onto the public markets, which should prove interesting for other D2C startups eyeing the same move.
- The final quarter of 2020 and the full year brought an ocean of capital to bear on U.S. startups, something that we delighted in chewing on. Fintech is also hot as all heck.
- Plaid is building a fintech accelerator, which we thought was cool.
- An edtech startup based in Nigeria raised a $7.5 million Series A on the back of a really neat distribution model. The march of live, tech-powered tutoring lives on!
- TripActions raised a pallet of new capital despite having had a somewhat rough 2020 due to the pandemic. It’s a fascinating wager, and one that we will track as it earns out.
- There was lots of news in the movement space, including Microsoft helping put $2 billion into self-driving startup Cruise, electric vehicle startup Rivian raising $2.65 billion from Amazon and others, and Bolt Mobility expanding to new markets.
- Danny’s GPS story.
- Wattpad exits for $600 million, leading to Alex detailing his love of science fiction.
- a16z is doubling-down on its in-house media project, and Forbes is building out a paid newsletter service that we think is very neat.
Like we said, it’s a lot, but all of it worth getting into before the weekend. Hugs from the team, we are back early Monday.
Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
A new report suggests there’s a pricey Apple VR headset in the works, Facebook’s Oversight Board will examine one of the social network’s most consequential decisions and we review the Samsung Galaxy S21 Ultra. This is your Daily Crunch for January 21, 2021.
The big story: Apple might be working on a VR headset
Apple is developing a standalone virtual reality headset that could debut in 2022, according to Bloomberg.
The headset is supposed to include a processor more powerful than the M1 chip currently included in the MacBook Air and 13-inch MacBook Pro. And it would cost more than most competing products (so possibly in the $1,000 range or more).
It sounds, in other words, like this is meant to be a specialist product, perhaps paving the way for a more mass-market device later.
The tech giants
Facebook’s Oversight Board will review the decision to suspend Trump — Facebook VP Nick Clegg called the circumstances around Trump’s suspension an “unprecedented set of events which called for unprecedented action.”
Samsung Galaxy S21 Ultra review: Camera refinements are nice, but the price drop’s the thing — The updates are mostly iterative for an already solid handset, but we won’t say “no” to a $200 price drop.
YouTube launches hashtag landing pages to all users — The company has been quietly working on a new feature that allows users to discover content using hashtags.
Startups, funding and venture capital
TripActions raises $155M at $5B valuation as corporate travel recovers from pandemic lows — The company became something of a poster-child for the impact of COVID-19 on certain startup categories.
Omnipresent raises $15.8M Series A for its platform to employ remote-workers globally — Omnipresent says it ensures the process of remote-hiring costs a fraction of what it normally would.
Soci raises $80M for its localized marketing platform — National and global companies like Ace Hardware, Anytime Fitness, The Hertz Corporation and Nekter Juice Bar use Soci to coordinate marketing across individual stores.
Advice and analysis from Extra Crunch
Eight VCs agree: Behavioral support and remote visits make digital health a strong bet for 2021 — In 2020, more of us saw our doctor on video than ever before.
Hot IPOs hang onto gains as investors keep betting on tech — Lemonade is a great example.
Decrypted: With more SolarWinds fallout, Biden picks his cybersecurity team — In this week’s Decrypted, we look at the ongoing fallout from the SolarWinds breach and who the incoming president wants to lead the path to recovery.
(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
Everything else
The biggest step the Biden administration took on climate yesterday wasn’t rejoining the Paris Agreement — Instead, it was a move to get to the basics of monitoring and accounting, of metrics and dashboards.
How Bitcoin is helping middle-class users survive the pandemic — People like Saeed, an Iranian immigrant to France, see cryptocurrency as a necessity.
MIT aims to speed up robot movements to match robot thoughts using custom chips — The method results in custom computer chips that can offer hardware acceleration as a means to faster response times.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
Source: https://techcrunch.com/2021/01/21/daily-crunch-apple-might-be-working-on-a-vr-headset/
A couple of months ago at CNBC’s Transform conference, IBM CEO Arvind Krishna painted a picture of a company in the midst of a transformation. He said that he wanted to take advantage of IBM’s $34 billion 2018 Red Hat acquisition to help customers manage a growing hybrid cloud world, while using artificial intelligence to drive efficiency.
It seems like a sound enough approach. But instead of the new strategy acting as a big growth engine, IBM’s earnings today showed that its cloud and cognitive software revenues were down 4.5% to $6.8 billion. Meanwhile cognitive applications — where you find AI incomes — were flat.
If Krishna was looking for a silver lining, perhaps he could take solace in the fact that Red Hat itself performed well, with revenue up 18% compared to the year-ago period, according to the company. But overall the company’s revenue declined for the fourth straight quarter, leaving the executive in much the same position as his predecessor Ginni Rometty, who led IBM during 22 straight quarters of revenue losses.
Krishna laid out his strategy in November, telling CNBC, “The Red Hat acquisition gave us the technology base on which to build a hybrid cloud technology platform based on open-source, and based on giving choice to our clients as they embark on this journey.” So far the approach is simply not generating the growth Krishna expected.
The company is also in the midst of spinning out its legacy managed infrastructure services division, which, as Krishna said in the same November interview, should allow Big Blue to concentrate more on its new strategy. “With the success of that acquisition now giving us the fuel, we can then take the next step, and the larger step, of taking the managed infrastructure services out. So the rest of the company can be absolutely focused on hybrid cloud and artificial intelligence,” he said.
While it’s certainly too soon to say his transformation strategy has failed, the results aren’t there yet, and IBM’s falling top line has to be as frustrating to Krishna as it was to Rometty. If you guide the company toward more modern technologies and away from the legacy ones, at some point you should start seeing results, but so far that has not been the case for either leader.
Krishna continued to build on this vision at the end of last year by buying some additional pieces like cloud applications performance monitoring company Instana and hybrid cloud consulting firm Nordcloud. He did so to build a broader portfolio of hybrid cloud services to make IBM more of a one-stop shop for these services.
As retired NFL football coach Bill Parcells used to say, referring to his poorly performing teams, “you are what your record says you are.” Right now IBM’s record continues to trend in the wrong direction. While it’s making some gains with Red Hat leading the way, it’s simply not enough to offset the losses, and something needs to change.
A federal judge has denied an attempt by conservative social network Parler to force Amazon to host it on AWS. As expected by most who read Parler’s ramshackle legal arguments, the court found nothing in the lawsuit that could justify intervention, only “faint and factually inaccurate speculation.”
In the order, filed in the Western Washington U.S. District Court, Judge Barbara Rothstein explained how little Parler actually brought to the table to support its allegations that Amazon and Twitter were engaged in antitrust collusion and that AWS had broken its contract.
On the question of antitrust, Parler fell far short of demonstrating anything at all, let alone collusion in breach of the Sherman Act.
The evidence it has submitted in support of the claim is both dwindlingly slight, and disputed by AWS. Importantly, Parler has submitted no evidence that AWS and Twitter acted together intentionally — or even at all — in restraint of trade.
… Indeed, Parler has failed to do more than raise the specter of preferential treatment of Twitter by AWS.
Amazon had explained in its filing that not only does AWS not even host Twitter yet, though there are plans to do so, but that there are strict rules in place to prevent discussing one client with another. This was more than enough to dispute Parler’s flimsy claim, Rothstein noted.
On breach of contract, Parler had in the course of its argument essentially admitted to breach of contract on its end, but said that Amazon had broken its side of the bargain by not giving it 30 days to fix the problem as stipulated in the customer service agreement (CSA) at Section 7.2(b)(i). Turns out that doesn’t even matter:
Parler fails to acknowledge, let alone dispute, that Section 7.2(b)(ii) — the provision immediately following — authorizes AWS to terminate the Agreement “immediately upon notice” and without providing any opportunity to cure …
So the 30-day agreement was never in play if Amazon didn’t want it to be; one imagines that the clause is for less immediately concerning causes for action. Contract breach argument denied.
Parler’s allegation that Amazon was “motivated by political animus” likewise holds no water, according to the judge.
Parler has failed to allege basic facts that would support several elements of this claim. Most fatally, as discussed above, it has failed to raise more than the scantest speculation that AWS’s actions were taken for an improper purpose or by improper means … To the contrary, the evidence at this point suggests that AWS’s termination of the CSA was in response to Parler’s material breach.
The company also made the argument that it would suffer “irreparable harm” if AWS services were not restored, and in fact Rothstein had no reason to doubt Parler’s claims that it may face “extinction” as a result of these circumstances. Except that “Parler’s claims to irreparable harm are substantially diminished by its admission ‘that much of that harm would be compensable by damages.'”
In other words, money would fix it — which means it isn’t exactly irreparable.
On other legalities and technicalities, Rothstein finds that Parler makes no case or that Amazon’s case is much stronger — for instance, that being forced to host violent and hateful content would damage AWS’s reputation, perhaps even irreparably.
As is important to note in cases like this, the judge is not ruling on the merits of the whole case, only on the arguments and evidence presented in the request for an injunction to restore services while the case proceeds.
“To be clear, the Court is not dismissing Parler’s substantive underlying claims at this time” — which is to say that it is not dismissing the substance of the claims, nor asserting that they have substance. But Parler “has fallen far short” of demonstrating what it needs to in order to justify a legal intervention of that type.
The case will proceed to its next date, if indeed Parler has not faced the “extinction” it warned of by then.
Rothstein Order on Parler i… by TechCrunch
Source: https://techcrunch.com/2021/01/21/judge-denies-parlers-bid-to-make-amazon-restore-service/
Late last year, Solugen, a startup using synthetic biology to take hydrocarbons out of the chemicals industry, decided against pursuing a new round of funding that would have valued the company at over $1 billion, TechCrunch has learned.
Instead, the Houston-based bio-manufacturing company raised an internal round of roughly $30 million from existing investors and continued working on its latest project — a new bio-based manufacturing process for a high-value specialty chemical that can act as an anti-corrosive agent.
That work represents a potentially lucrative new product line for the company and charts a course for a host of other businesses that are refashioning the basic building blocks of life in an attempt to supplant chemistry with biology for manufacturing and production.
If Solugen can get its high value chemical into commercial production, the company can follow the path that sustainable tech companies like Tesla have mastered — moving from a pricy specialty product into the mass market. And rather than over-promise and underdeliver. Solugen wanted to get the product line right first before raising big bucks, according to people familiar with the company’s thinking.
As the world looks to move away from oil and its byproducts to reduce greenhouse gas emissions and slow down or reverse global climate change, the chemicals industry is in the crosshairs as a huge target for disruption. Vehicle electrification solves only one part of the oil problem. The extractive industry doesn’t just produce fuel, but also the chemicals that make up most of the products that defined consumer goods in the twentieth century.
Chemicals are everywhere and they’re a huge business.
Companies like Zymergen raised hundreds of millions of dollars last year to develop industrial applications for synthetic biology, and they’re not alone. Startups including Geltor, Impossible Foods, Ginkgo Bioworks, Lygos, Novomer, and Perfect Day have all raised significant amounts of capital to reduce the environmental footprint of food, chemicals, ingredients, and plastics through synthetic biology.
Some of these companies are seeing early success in food replacements and ingredients, but the promise of biologically based chemicals have been elusive — until now.
Solugen’s new product will produce glucaric acid, a tough-to-make chemical that can be used in water treatment facilities and as an anti-corrosive agent — and the company can make it with a zero carbon (or potentially carbon negative) manufacturing process, according to Solugen co-founder and chief technology officer, Sean Hunt.
The glucaric acid from Solugen is cheaper to produce and more environmentally friendly than existing phsophonates that are used for water treatment — and the company has the benefit of competing against chemicals manufacturers in China.
Given the continuing tensions between the two countries, the U.S. is looking to make more high value products — including chemicals — domestically, and Solugen’s technology is a good way forward to have home grown supplies of critical materials.
Solugen still intends to raise more capital, the company just wanted to wait until its latest production plant for the acid came online, according to Hunt.
It’s also the fruit of years of planning. The two co-founders, Hunt and Gaurab Chakrabarti first realized they could potentially use the technology they’d developed to make specialty chemicals back n 2017, according to Hunt. But first the company had to make the hydrogen peroxide as a precursor chemical, Hunt said.
“It’s advantageous for us to focus on this,” said Hunt. “As we scale, we can enter more commodity type markets down the road.”
It’s all part of the significant strides the entire industry is making, said Hunt. “Synthetic biology has really made significant strides,” he said. “We have our commercial plant coming online this summer [and it proves] synthetic biology has gotten to the point where we can compete on price and performance.”
So the capital infusion will come as the company gets closer to the completion of these commercial scale facilities.
“It’s not like we were sitting on a term sheet and we said no,” Hunt said. “We want to make sure that we are hitting the milestones and the goals at a commensurate pace which is this year. I’m extremely bullish and optimistic of 2021.”
Solugen’s co-founder sees the path that his company is on as one that other startups working in the synthetic biology space will pursue to bring profitable products to market at the higher end before competing with more sustainable versions of commodity chemicals.
“How do you start a company that has this level of capital intensity?” Hunt asked. “You can start in the fine chemicals space where everything sells for tens to hundreds of dollars per pound. For us, glucaric acid is that specialty chemical and then we will do commodity.”
