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Just over a year ago in our coverage of the 2019 venture capital market,  we noted that “United States-demarcated angel and seed deals dipped in 2019.” Our reporting concerning the Q1 2020 venture capital market had a similar tone, noting that “domestic seed rounds, in slow decline since peaks in 2017, have sharply fallen since Q3 2019.”

The same theme continued in the second quarter. Widening our lens to global seed data, own we wrote that “global seed and angel deals […] were down from 4,256 rounds in Q2 2019 worth $3.7 billion to 1,791 rounds worth just $2.3 billion in Q2 2020.”

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Of course, the second quarter of 2020 was the middle of the storm when it came to the temporary decline in venture capital confidence. So, what about Q3? One source noted, as we wrote at the time, that the “percentage of U.S. VC deals that were for rounds of $5 million or less was the lowest since at least 2010.” Another data source showed a slight rebound in domestic seed rounds, but it was a rare positive data point.

Then came Q4 2020 data and a full-year look at the market. We wrote that in “the U.S., seed deal count was high in 2020, around 5,227,” per that day’s data source.

Weird, right?

The Exchange leans on PitchBook, CB Insights, the NVCA, Silicon Valley Bank and Crunchbase along with other more focused data sources for its raw inputs. I’m not citing individual sources in the above (you can find them at the links) to avoid appearing to be cross with any particular entity; that’s not my goal.

Instead, I’m curious how we can have so many different seed data signals in the same year. This is a question I’ve had for some time, as whenever I’d report that seed deal volume in any particular part of the world was looking light — Europe, for example — investors would tell me, in polite tones or with sheer incredulity, that the seed data in question did not match their lived realities.

Investors were seeing a hot seed market, while data often showed a flat-to-down seed market. So, what’s going on?

SAFEs could be to blame

Thanks to angel investor and Twitter bon vivant Trace Cohen, I think we have a good idea of what’s to blame for discrepant data and reality when it comes to seed and earlier dealmaking. Per Cohen, could SAFEs be to blame?

SAFEs, or Simple Agreements for Future Equity, are a method of raising capital that is quick and cheap. Y Combinator invented them back in 2013, and they’ve become rather popular amongst seed deals over time.

Source: https://techcrunch.com/2021/02/09/are-safes-obscuring-todays-seed-volume/

During a small gathering of journalists in China, Ren Zhengfei made his first public remarks since Joe Biden was inaugurated at the 46th President of the United States. The Huawei CEO struck a hopeful tone for those gathered around the table, in comments reported by CNBC among others.

“I would welcome such phone calls and the message is around joint development and shared success,” the executive said, noting a readiness to speak with the new administration in translated remarks. “The U.S. wants to have economic growth and China wants to have economic growth as well.”

Huawei’s future in the U.S. has been a major question mark hanging over the new administration. Under Trump, a number of high profile Chinese companies were added to the Commerce Department’s so-called “entity list” to various effects. Huawei has been among the hardest hit by the moves.

In addition to blocking sales in the world’s third-largest smartphone market, the company has been unable to work with key U.S. companies, including Google. That, in turn, has blocked access to key technologies, including the Android ecosystem and left Huawei scrambling. The company’s support among consumers has increased within China, but the move has been a big blow to the smartphone maker’s bottom line.

The incoming Biden administration has mostly been quiet on the matter. Though, facing mounting criticism from Republican lawmaker, Commerce Secretary nominee Gina Raimondo has since added that, “I currently have no reason to believe that entities on those lists should not be there. If confirmed, I look forward to a briefing on these entities and others of concern.”

While there haven’t been many positive signs for Huawei thus far, the company’s Chief understandably would prefer to make nice with the new administration.

“If Huawei’s production capacity can be expanded, that would mean more opportunities for U.S. companies to supply too,” Ren said in the translated comments. “I believe that’s going to be mutually beneficially. I believe that (the) new administration would bear in mind such business interests as they are about to decide their new policy.”

Source: https://techcrunch.com/2021/02/09/huaweis-ceo-wants-to-talk-to-joe-biden/

Shopify announced this morning it’s partnered with Facebook to expand its payment option, Shop Pay, to all Shopify merchants selling across both Facebook and Instagram. This is the first time Shop Pay will be made available outside of Shopify’s own platform, and represents a significant expansion for the e-commerce platform’s payments technology.

The company tells TechCrunch Shop Pay will first become available to all Shopify merchants using checkout on Instagram in the U.S., and will then be rolled out to Facebook in the weeks that follow.

Prior to this launch, Facebook’s platform has been one of Shopify’s most popular sales and marketing channels for merchants, Shopify says. At the beginning of the pandemic last year (March through April 2020), marketing on Facebook and Instagram via Shopify’s channel integration saw 36% growth in monthly active users, and that trend continues to rise.

Today, Shop Pay’s payment option is used by a number of top direct-to-consumer and newer brands, including Allbirds, Kith, Beyond Yoga, Kylie Cosmetics, Jonathan Adler, Loeffler Randall, Blueland and others. Over 40 million buyers now regularly use Shop Pay at these merchants and others on Shopify’s platform to complete their purchases.

Image Credits: Shopify

Through the course of 2020, Shop Pay helped buyers complete 137 million orders. And by the end of the year, Shop Pay had facilitated nearly $20 billion in cumulative GMV since its launch in 2017. Through its carbon offsetting feature, this also represented 75,000 tons of carbon emissions.

In addition to the carbon offsets, Shopify claims Shop Pay on its own platform is 70% faster with a conversion rate that’s 1.72x higher than a typical checkout. It also includes order tracking and management, which, to date, have tracked over 430 million orders across over 450 million miles.

Once available on Instagram, consumers will be able to find tagged products from Shopify merchants in the app, then add them to their in-app cart. At checkout, they can then select Shop Pay as their preferred payment option from among credit card, debit card, and PayPal. The consumer will receive a confirmation code to their phone, then enter the code to complete the order without leaving Instagram. A similar experience will be available on Facebook.

These orders can also be tracked via Shopify’s Shop app, the same as those processed on Shopify itself.

Image Credits: Shopify

“People are embracing social platforms not only for connection, but for commerce,” said Carl Rivera, General Manager of Shop, in a statement. “Making Shop Pay available outside of Shopify for the first time means even more shoppers can use the fastest and best checkout on the Internet. And there’s more to come; we’ll continue to work with Facebook to bring a number of Shopify services and products to these platforms to make social selling so much better.”

This is not the first third-party payment option integrated into Facebook’s shopping platforms, as PayPal is also accepted. But it is a notable addition, given how heavily Facebook has pushed its own “shops” platform, which encourages merchants to sell and transact within its own apps — an even more critical source of revenue now that Apple’s privacy changes will impact Facebook’s ads business to the tune of billions of dollars. But likely, working with a third-party like Shopify is allowing the company to spin up a new revenue stream.

Shopify, however, declined to discuss its financial arrangement with Facebook.

Shopify isn’t limiting itself to Facebook in an effort to expand its e-commerce business. Last fall, it also partnered with TikTok on social commerce, allowing merchants to publish their marketing ads directly to the video platform.

Source: https://techcrunch.com/2021/02/09/shopify-expands-its-payment-option-shop-pay-to-its-merchants-on-facebook-and-instagram/

This morning Monte Carlo, a startup focused on helping other companies better monitor their data inflows, announced that it has closed a $25 million Series B.

The round, which was co-led by GGV and Redpoint, comes mere months after its September Series A that was worth $15 million. Accel led the company’s Series A and Seed deals, participating in its Series B as well.

The round caught our attention not only for the speed at which it was raised following Monte Carlo’s preceding investment, but also because your humble servant had no idea what data observability, the startup’s niche, really was.

So we got Monte Carlo co-founder and CEO Barr Moses on a call to explain both her company’s space, and how it managed to attract so much more capital so quickly.

Data inflows

Big data was the jam a while back, but it turned out to be merely one piece in the broader data puzzle. We can see evidence of that in recent revenue growth at Databricks, which reached $425 million ARR in 2020 by building an analytics and AI service that sits on top of companies’ data.

Monte Carlo is another bet on the data space, sitting a bit earlier in the data lifecycle. Think of it this way: Snowflake can hold all your data, and Databricks can help you analyze it. But what’s checking to make sure that data flowing into your repositories is, you know, not bullshit?

Figuring out if data inflows are healthy and not bunk is what Monte Carlo does.

According to Moses, companies now have myriad data sources. That’s great in theory as more data is usually a good thing. But if one or two of those sources goes haywire, figuring that out before you collect, store, and analyze the bad information is pretty important.

So Monte Carlo sits upstream from the other data companies that are hot these days, keeping tabs on inbound data sources across a number of parameters to make sure that what’s actually arriving in your data lake is legit.

The startup does that, Moses said, by checking data freshness (how recent, or tardy the data in question is), volume (is there too little, too much?), schema (the data’s structure itself, to see if things have changed that could matter, or break downstream services), distribution (if data points suddenly jump from say, the single digits to the millions), and lineage, which can help find breakpoints in data inflows.

Hearing that Monte Carlo learns from a company’s particular data pipes to figure out what could be non-standard data inflow made me curious how long it takes to get the startup’s software set up and running; not long, per Barr, an hour to fire it up in many cases, and a week to learn.

A growing sector

Monte Carlo’s product is neat enough to warrant our attention by itself. But, fitting neatly inside the growth of the broader data space, and especially data tooling that isn’t directly concerning storage, makes it all the more worth considering.

And now with $25 million more, Monte Carlo can expand its current staff of 25, and keep attacking its mid-market and enterprise customer target. Let’s see how quickly it can scale, and how soon we can start squeezing the startup for growth numbers.

Source: https://techcrunch.com/2021/02/09/monte-carlo-raises-25m-for-its-data-observability-service/

Polish video game maker CD Projekt, which makes Cyberpunk 2077 and The Witcher, has confirmed it was hit by a ransomware attack.

In a statement posted to its Twitter account, the company said it will “not give in nor negotiate” with the hackers, saying it has backups in place. “We have already secured our IT infrastructure and begun restoring data,” the company said.

According to the ransom note, the hackers said they would release the company’s stolen source code and other internal files if it did not pay the ransom, since the company would “most likely recover from backups.”

But the company said for now that no personal data was taken. “We are still investigating the incident, however at this time we can confirm that — to our best knowledge — the compromised systems did not contain any personal data of our players or users of our services.”

It’s an increasingly hostile tactic used by ransomware actors: Hackers target high-value businesses and companies with file-encrypting malware and hold the files for a ransom. But since many companies have backups, some ransomware groups threaten to publish the stolen files unless the ransom is paid.

CD Projekt Red did not immediately respond to TechCrunch’s questions, including what kind of ransomware was used to attack its systems.

It’s thought to be the second time in recent years that the company has been hit by ransomware. The game maker confirmed in 2017 that a hack resulted in the compromising of early work related to the Cyberpunk 2077. Weeks following the game’s launch Sony and Microsoft offered gamers refunds, citing bugs and poor performance on older consoles.

Source: https://techcrunch.com/2021/02/09/cd-projekt-red-hit-by-ransomware-attack-refuses-to-pay-ransom/