Ideaforge

Berlin-based Mobius Labs has closed a €5.2 million (~$6.1M) funding round off the back of increased demand for its computer vision training platform. The Series A investment is led by Ventech VC, along with Atlantic Labs, APEX Ventures, Space Capital, Lunar Ventures plus some additional angel investors.

The startup offers an SDK that lets the user create custom computer vision models fed with a little of their own training data — as an alternative to off-the-shelf tools which may not have the required specificity for a particular use-case.

It also flags a ‘no code’ focus, saying its tech has been designed with a non-technical user in mind.

As it’s an SDK, Mobius Labs’ platform can also be deployed on premise and/or on device — rather than the customer needing to connect to a cloud service to tap into the AI tool’s utility.

“Our custom training user interface is very simple to work with, and requires no prior technical knowledge on any level,” claims Appu Shaji, CEO and chief scientist. 

“Over the years, a trend we have observed is that often the people who get the maximum value from AI are non technical personas like a content manager in a press and creative agency, or an application manager in the space sector. Our no-code AI allows anyone to build their own applications, thus enabling these users to get close to their vision without having to wait for AI experts or developer teams to help them.”

Mobius Labs — which was founded back in 2018 — now has 30 customers using its tools for a range of use cases.

Uses include categorisation, recommendation, prediction, reducing operational expense, and/or “generally connecting users and audiences to visual content that is most relevant to their needs”. (Press and broadcasting and the stock photography sector have unsurprisingly been big focuses to date.)

But it reckons there’s wider utility for its tech and is gearing up for growth.

It caters to businesses of various sizes, from startups to SMEs, but says it mainly targets global enterprises with major content challenges — hence its historical focus on the media sector and video use cases.

Now, though, it’s also targeting geospatial and earth observation applications as it seeks to expand its customer base.

The 30-strong startup has more than doubled in size over the last 18 months. With the new funding it’s planning to double its headcount again over the next 12 months as it looks to expand its geographical footprint — focusing on Europe and the US.

Year-on-year growth has also been 2x but it believes it can dial that up by tapping into other sectors.

“We are working with industries that are rich in visual data,” says Shaji. “The geospatial sector is something that we are focussing on currently as we have a strong belief that vast amounts of visual data is being produced by them. However, these huge archives of raw pixel data are useless on their own.

“For instance, if we want to track how river fronts are expanding, we have to look at data collected by satellites, sort and tag them in order to analyse them. Currently this is being done manually. The technology we are creating comes in a lightweight SDK, and can be deployed directly into these satellites so that the raw data can be detected and then analysed by machine learning algorithms. We are currently working with satellite companies in this sector.”

On the competitive front, Shaji names Clarifai and Google Cloud Vision as the main rivals it has in its sights.  

“We realise these are the big players but at the same time believe that we have something unique to offer, which these players cannot: Unlike their solutions, our platform users can be outside the field of computer vision. By democratising the training of machine learning models beyond simply the technical crowd, we are making computer vision accessible and understandable by anyone, regardless of their job titles,” he argues.

“Another core value that differentiates us is the way we treat client data. Our solutions are delivered in the form of a Software Development Kit (SDK), which runs on-premise, completely locally on clients’ systems. No data is ever sent back to us. Our role is to empower people to build applications, and make them their own.”

Computer vision startups have been a hot acquisition target in recent years and some earlier startups offering ‘computer vision as a service’ got acquired by IT services firms to beef up their existing offerings, while tech giants like Amazon and (the aforementioned) Google offer their own computer vision services too.

But Shaji suggests the tech is now at a different stage of development — and primed for “mass adoption”. 

“We’re talking about providing solutions that empower clients to build their own applications,” he says, summing up the competitive play. “And that [do that] with complete data privacy, where our solutions run on-premise, and we don’t see our clients data. Coupled with that is the ease of use that our technology offers: It is a lightweight solution that can be deployed on many ‘edge’ devices like smartphones, laptops, and even on satellites.”  

Commenting on the funding in a statement, Stephan Wirries, partner at Ventech VC, added: “Appu and the team at Mobius Labs have developed an unparalleled offering in the computer vision space. Superhuman Vision is impressively innovative with its high degree of accuracy despite very limited required training to recognise new objects at excellent computational efficiency. We believe industries will be transformed through AI, and Mobius Labs is the European Deep Tech innovator teaching machines to see.”

Source: Tech Crunch

ProtonMail, a hosted email service with a focus on end-to-end encrypted communications, has been facing criticism after a police report showed that French authorities managed to obtain the IP address of a French activist who was using the online service. The company has communicated widely about the incident, stating that it doesn’t log IP addresses by default and it only complies with local regulation — in that case Swiss law. While ProtonMail didn’t cooperate with French authorities, French police sent a request to Swiss police via Europol to force the company to obtain the IP address of one of its users.

For the past year, a group of people have taken over a handful of commercial premises and apartments near Place Sainte Marthe in Paris. They want to fight against gentrification, real estate speculation, Airbnb and high-end restaurants. While it started as a local conflict, it quickly became a symbolic campaign. They attracted newspaper headlines when they started occupying premises rented by Le Petit Cambodge — a restaurant that was targeted by the November 13th, 2015 terrorist attacks in Paris.

Place Sainte Marthe, Paris. Image Credits: Chabe01 (opens in a new window) / Wikimedia Commons (opens in a new window) under a CC BY-SA 4.0 (opens in a new window) license.

On September 1st, the group published an article on Paris-luttes.info, an anticapitalist news website, summing up different police investigations and legal cases against some members of the group. According to their story, French police sent an Europol request to ProtonMail in order to uncover the identity of the person who created a ProtonMail account — the group was using this email address to communicate. The address has also been shared on various anarchist websites.

The next day, @MuArF on Twitter shared an abstract of a police report detailing ProtonMail’s reply. According to @MuArF, the police report is related to the ongoing investigation against the group who occupied various premises around Place Sainte-Marthe. It says that French police received a message on Europol. That message contains details about the ProtonMail account.

Here’s what the report says:

• The company PROTONMAIL informs us that the email address has been created on … The IP address linked to the account is the following: …
• The device used is a … device identified with the number …
• The data transmitted by the company is limited to that due to the privacy policy of PROTONMAIL TECHNOLOGIES.”

ProtonMail’s founder and CEO Andy Yen reacted to the police report on Twitter without mentioning the specific circumstances of that case in particular. “Proton must comply with Swiss law. As soon as a crime is committed, privacy protections can be suspended and we’re required by Swiss law to answer requests from Swiss authorities,” he wrote.

In particular, Andy Yen wants to make it clear that his company didn’t cooperate with French police nor Europol. It seems like Europol acted as the communication channel between French authorities and Swiss authorities. At some point, Swiss authorities took over the case and sent a request to ProtonMail directly. The company references these requests as “foreign requests approved by Swiss authorities” in its transparency report.

TechCrunch contacted ProtonMail founder and CEO Andy Yen with questions about the case.

One key question is exactly when the targeted account holder was notified that their data had been requested by Swiss authorities since — per ProtonMail — notification is obligatory under Swiss law.

However, Yen told us that — “for privacy and legal reasons” — he is unable to comment on specific details of the case or provide “non-public information on active investigations”, adding: “You would have to direct these inquiries to the Swiss authorities.”

At the same time, he did point us to this public page, where ProtonMail provides information for law enforcement authorities seeking data about users of its end-to-end encrypted email service, including setting out a “ProtonMail user notification policy”.

Here the company reiterates that Swiss law “requires a user to be notified if a third party makes a request for their private data and such data is to be used in a criminal proceeding” — however it also notes that “in certain circumstances” a notification “can be delayed”.

Per this policy, Proton says delays can affect notifications if: There is a temporary prohibition on notice by the Swiss legal process itself, by Swiss court order or “applicable Swiss law”; or where “based on information supplied by law enforcement, we, in our absolute discretion, believe that providing notice could create a risk of injury, death, or irreparable damage to an identifiable individual or group of individuals.”

“As a general rule though, targeted users will eventually be informed and afforded the opportunity to object to the data request, either by ProtonMail or by Swiss authorities,” the policy adds.

So, in the specific case, it looks likely that ProtonMail was either under legal order to delay notification to the account holder — given what appears to be up to eight months between the logging being instigated and disclosure of it — or it had been provided with information by the Swiss authorities which led it to conclude that delaying notice was essential to avoid a risk of “injury, death, or irreparable damage” to a person or persons (NB: it is unclear what “irreparable damage” means in this context, and whether it could be interpreted figuratively — as ‘damage’ to a person’s/group’s interests, for example, such as to a criminal investigation, not solely bodily harm — which would make the policy considerably more expansive).

In either scenario the level of transparency being afforded to individuals by Swiss law having a mandatory notification requirement when a person’s data has been requested looks severely limited if the same law authorities can, essentially, gag notifications — potentially for long periods (seemingly more than half a year in this specific case).

ProtonMail’s public disclosures also log an alarming rise in requests for data by Swiss authorities.

According to its transparency report, ProtonMail received 13 orders from Swiss authorities back in 2017 — but that had swelled to over three and a half thousand (3,572!) by 2020.

The number of foreign requests to Swiss authorities which are being approved has also risen, although not as steeply — with ProtonMail reporting receiving 13 such requests in 2017 — rising to 195 in 2020.

The company says it complies with lawful requests for user data but it also says it contests orders where it does not believe them to be lawful. And its reporting shows an increase in contested orders — with ProtonMail contesting three orders back in 2017 but in 2020 it pushed back against 750 of the data requests it received.

Per ProtonMail’s privacy policy, the information it can provide on a user account in response to a valid request under Swiss law may include account information provided by the user (such as an email address); account activity/metadata (such as sender, recipient email addresses; IP addresses incoming messages originated from; the times messages were sent and received; message subjects etc); total number of messages, storage used and last login time; and unencrypted messages sent from external providers to ProtonMail. As an end-to-end encrypted email provider, it cannot decrypt email data so is unable to provide information on the contents of email, even when served with a warrant.

However in its transparency report, the company also signals an additional layer of data collection which it may be (legally) obligated to carry out — writing that: “In addition to the items listed in our privacy policy, in extreme criminal cases, ProtonMail may also be obligated to monitor the IP addresses which are being used to access the ProtonMail accounts which are engaged in criminal activities.”

It’s that IP monitoring component which has caused such alarm among privacy advocates now — and no small criticism of Proton’s marketing claims as a ‘user privacy centric’ company.

It has faced particular criticism for marketing claims of providing “anonymous email” and for the wording of the caveat in its transparency disclosure — where it talks about IP logging only occurring in “extreme criminal cases”.

Few would agree that anti-gentrification campaigners meet that bar.

At the same time, Proton does provide users with an onion address — meaning activists concerned about tracking can access its encrypted email service using Tor which makes it harder for their IP address to be tracked. So it is providing tools for users to protect themselves against IP monitoring (as well as protect the contents of their emails from being snooped on), even though its own service can, in certain circumstances, be turned into an IP monitoring tool by Swiss law enforcement.

In the backlash around the revelation of the IP logging of the French activists, Yen said via Twitter that ProtonMail will be providing a more prominent link to its onion address on its website:

Proton does also offer a VPN service of its own — and Yen has claimed that Swiss law does not allow it to log its VPN users’ IP addresses. So it’s interesting to speculate whether the activists might have been able to evade the IP logging if they had been using both Proton’s end-to-end encrypted email and its VPN service…

“If they were using Tor or ProtonVPN, we would have been able to provide an IP, but it would be the IP of the VPN server, or the IP of the Tor exit node,” Yen told TechCrunch when we asked about this.

“We do protect against this threat model via our Onion site (protonmail.com/tor),” he added. “In general though, unless you are based 15 miles offshore in international waters, it is not possible to ignore court orders.”

“The Swiss legal system, while not perfect, does provide a number of checks and balances, and it's worth noting that even in this case, approval from three authorities in two countries was required, and that's a fairly high bar which prevents most (but not all) abuse of the system.”

In a public response on Reddit, Proton also writes that it is “deeply concerned” about the case — reiterating that it was unable to contest the order in this instance.

“The prosecution in this case seems quite aggressive,” it added. “Unfortunately, this is a pattern we have increasingly seen in recent years around the world (for example in France where terror laws are inappropriately used). We will continue to campaign against such laws and abuses.”

Zooming out, in another worrying development that could threaten the privacy of internet users in Europe, European Union lawmakers have signaled they want to work to find ways to enable lawful access to encrypted data — even as they simultaneously claim to support strong encryption.

Again, privacy campaigners are concerned.

ProtonMail and a number of other end-to-end encrypted services warned in an open letter in January that EU lawmakers risk setting the region on a dangerous path toward backdooring encryption if they continue in this direction.

Source: Tech Crunch

Hello and welcome back to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world.

This week, the gaming industry again became a target of Beijing, which imposed arguably the world’s strictest limits on underage players. On the other hand, China’s tech titans are hastily answering Beijing’s call for them to take on more social responsibilities and take a break from unfettered expansion.

Gaming curfew

China dropped a bombshell on the country’s young gamers. As of September 1, users under the age of 18 are limited to only one hour of online gaming time: on Fridays, Saturdays and Sundays between 8-9 p.m.

The stringent rule adds to already tightening gaming policies for minors, as the government blames video games for causing myopia, as well as deteriorating mental and physical health. Remember China recently announced a suite of restrictions on after-school tutoring? The joke going around is that working parents will have an even harder time keeping their kids occupied.

A few aspects of the new regulation are worth unpacking. For one, the new rule was instituted by the National Press and Publication Administration (NPPA), the regulatory body that approves gaming titles in China and that in 2019 froze the approval process for nine months, which led to plunges in gaming stocks like Tencent.

It’s curious that the directive on playtime came from the NPPA, which reviews gaming content and issues publishing licenses. Like other industries in China, video games are subject to regulations by multiple authorities: NPPA; the Cyberspace Administration of China (CAC), the country’s top internet watchdog; and the Ministry of Industry and Information Technology, which oversees the country’s industrial standards and telecommunications infrastructure.

As analysts long observe, the mighty CAC, which sits under the Central Cyberspace Affairs Commission chaired by President Xi Jinping, has run into “bureaucratic struggles” with other ministries unwilling to relinquish power. This may well be the case for regulating the lucrative gaming industry.

For Tencent and other major gaming companies, the impact of the new rule on their balance sheet may be trifling. Following the news, several listed Chinese gaming firms, including NetEase and 37 Games, hurried to announce that underage players made up less than 1% of their gaming revenues.

Tencent saw the change coming and disclosed in its Q2 earnings that “under-16-year-olds accounted for only 2.6% of its China-based grossing receipts for games and under-12-year-olds accounted for just 0.3%.”

These numbers may not reflect the reality, as minors have long found ways around gaming restrictions, such as using an adult’s ID for user registration (just as the previous generation borrowed IDs from adult friends to sneak into internet cafes). Tencent and other gaming firms have vowed to clamp down on these workarounds, forcing kids to seek even more sophisticated tricks, including using VPNs to access foreign versions of gaming titles. The cat and mouse game continues. 

Prosper together

While China curtails the power of its tech behemoths, it has also pressured them to take on more social responsibilities, which include respecting the worker’s rights in the gig economy.

Last week, the Supreme People’s Court of China declared the “996” schedule, working 9 a.m. to 9 p.m. six days a week, illegal. The declaration followed years of worker resistance against the tech industry’s burnout culture, which has manifested in actions like a GitHub project listing companies practicing “996.”

Meanwhile, hardworking and compliant employees have often been cited as a competitive advantage of China’s tech industry. It’s in part why some Silicon Valley companies, especially those run by people familiar with China, often set up branches in the country to tap its pool of tech talent.

The days when overworking is glorified and tolerated seem to be drawing to an end. Both ByteDance and its short video rival Kuaishou recently scrapped their weekend overtime policies.

Similarly, Meituan announced that it will introduce compulsory break time for its food delivery riders. The on-demand services giant has been slammed for “inhumane” algorithms that force riders into brutal hours or dangerous driving.

In groundbreaking moves, ride-hailing giant Didi and Alibaba’s e-commerce rival JD.com have set up unions for their staff, though it’s still unclear what tangible impact the organizations will have on safeguarding employee rights.

Tencent and Alibaba have also acted. On August 17, President Xi Jinping delivered a speech calling for “common prosperity,” which caught widespread attention from the country’s ultra-rich.

“As China marches towards its second centenary goal, the focus of promoting people’s well-being should be put on boosting common prosperity to strengthen the foundation for the Party’s long-term governance.”

This week, both Tencent and Alibaba pledged to invest 100 billion yuan ($15.5 billion) in support of “common prosperity.” The purposes of their funds are similar and align neatly with Beijing’s national development goals, from growing the rural economy to improving the healthcare system.

Source: Tech Crunch

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by what the weekday Exchange column digs into, but free, and made for your weekend reading. Want it in your inbox every Saturday? Sign up here.

Hey team! Alex here. I am off next week. Anna, my regular co-pilot on the weekday column, will be handling next week’s newsletter. It will be beyond good. Enjoy!

A few weeks back we took a look at some startup results, with a focus on growth. Today we’re narrowing our focus to a single company from the collection of startups that wrote in: Water Cooler Trivia.

Many startups begin life as a solution to a problem. A developer finds a flaw in their workflow, codes up a solution for it and later builds that hack into a product that scales. That sort of thing.

Collin Waldoch did something different, turning a hobby of his into a business.

Coming from a family of six kids in what he called a competitive family, Waldoch hosted bar trivia during college, and later sent around weekly trivia questions at his workplace after he completed his schooling. He kept the habit up during his early career, which included a stint at Lyft.

It was during his corporate life that Waldoch realized that companies were willing to spend heavily on team activities. Like a soccer team that he joined during one job that his employer spent a few grand on, but which struggled to find enough regular players. If companies would drop that much money on a group sport that few of its denizens wanted, he thought, perhaps there was some budget he could attack with a trivia product.

So Waldoch started Water Cooler Trivia, building it as a corporate product that he and some friends scaled to around $20,000 in ARR as a side project. The founder described its level of success at the time as pretty good beer money. Helping the project bring in revenue was a super-low churn rate, something that helped Waldoch decide to quit his day job at Lyft and take his side project full time.

Today Water Cooler Trivia has reached $300,000 worth of ARR and sports a collection of workers around the globe that help it run. Companies can select difficulty levels for their weekly trivia questions and track employee scores with longitudinal leaderboards.

Part of the idea’s success in Waldoch’s view is that it is built for the end user — employees — instead of HR. Which means that it’s actually fun. Today the company has experienced some churn, but still sports net retention rates of just under 100%. That’s great for a product that doesn’t feature enterprise-SaaS level upsells.

And the service is cheap. Probably too cheap frankly. At $100 per month for 100 seats, Water Cooler could likely boost what it charges and push its revenues higher in short order. Waldoch said that his company might start raising its rates in Q4 of this year. But even without that, Water Cooler thinks that it has a huge amount of growth open to it from its core product.

I dig it. Long live software making life a bit more fun.

Drift, Xometry, Carrot

It was a busy week with infinite IPO filings and eight billion YC startups pitching, but other things did happen that we need to talk about:

I’m curious about Drift’s sale to private equity: Boston’s Drift sold the majority of its shares to Vista Equity Partners, it announced this week. I’ve been to the Drift offices, as the company once lent us a room to record a podcast in. The folks there were nice. But with the company reporting 70% ARR growth in 2020, I am dead curious why Drift didn’t just raise more capital and keep growing. The company was able to raise lots of private money in the past, including, say, a $60 million round back in 2018. Exiting the bulk of the company early feels a little weird, similar to how the Gainsight sale to PE was a bit of a head scratcher. For Boston, the exit is good news as it may help mint new angel investors. But it still feels like an exit for which we’re missing a key detail.

Xometry: This one has been in the notes folder for too long, and since I’m off next week we’re including it here. I spoke with Xometry CEO Randy Altschuler after his company reported earnings a few weeks back. Recall that Xometry went public earlier this year. Altschuler reported generally bullish views on the process of going public during the COVID-19 era, calling his company’s Zoom roadshow efficient in a manner that allowed his company to chat to more folks while also saving on travel-related exhaustion.

Xometry, continued: But past the standard post-IPO chit chat, Altschuler had a few notes that stood out in my memory. The first being that inflation can impact technology businesses. Rising costs are impacting companies like Root, who have to deal with used car prices impacting claims costs. Inflation also crops up in Xometry’s business connecting manufacturing demand with manufacturing supply. It’s a good reminder that macro market conditions really do matter in the technology world, just not in ways that we can always easily see.

Xometry, even more: Altschuler also said that he thinks that a carbon tax at some point is inevitable. This came up in our discussion of onshoring manufacturing in the United States over time. Shipping stuff is expensive today and would prove even more costly if we added in the price of carbon emissions via a tax. That could make local manufacturing more competitive, notably. Perhaps that will prove a boon to folks in favor of more industrial production in post-industrial societies. For tech companies that deal with physical-world goods, it’s something to keep in mind.

And, finally, Carrot: Another entry from the notes archive, let’s talk about Carrot. The startup raised a $75 million round a few weeks back, so I asked the company about its growth history and a few other things. Carrot sells a product to employers so that they can offer their workers fertility benefits. Given falling human fertility rates, coverage of this sort is, in my view, likely to become more popular over time.

Other factors are at work, of course, but the last 18 months have proved accelerative for Carrot’s business. Per the company, it has seen “nearly 5x overall growth” in the last six quarters. The startup expects to reach 450 customers by the end of 2021, which will add up to around one million covered folks.

Carrot declined to share a valuation differential from its Series B to its Series C. Happily PitchBook has data on the matter, so we can report that per its dataset, Carrot’s valuation rose from around $66 million (post-money) following its $21 million Series B to around $260 million after its Series C. That’s a good markup for the company’s employees and founders.

My general bullishness around rising needs for fertility support matches the company’s ethos, which it described in an email by saying that it thinks fertility and “family-forming care could and should be the fourth pillar of employee benefits and health care more broadly, much like medical or dental or vision.” A hard yes to that one.

OK, that’s all from me for a few weeks. Stay safe, get vaccinated, and let’s be kind to one another. — Alex

Source: Tech Crunch

Seksom Suriyapa was seemingly destined to land at a venture firm. A Stanford Law graduate, he worked at two blue-chip investment banks before joining the cybersecurity company McAfee as a senior corp dev employee, later logging six years at the human resources software company SuccessFactors and, in 2018, landing at Twitter, where he headed up its 12-person corporate development team until June.

The bigger surprise is that Suriyapa — who just joined the L.A.-based venture firm Upfront Ventures — didn’t make the leap sooner. “The catalyst was finding a firm that felt like the exact right fit for me,” says Suriyapa.

We talked earlier today with Suriyapa — who lives and will remain in the Bay Area — about his new role at Upfront, where he will be leading its expanding growth-stage practice with firm founder Yves Sisteron.

He also shed light on how Twitter — which has been on a bit of buying spree — thinks about acquisitions these days. Our chat has been edited lightly for length.

TC: How did you wind up joining Upfront?

SS: [Longtime partner] Mark Suster and I were introduced through a mutual business acquaintance in the venture world, and I got to know him over a period of time and really came to find him to be a remarkable individual. He’s thoughtful about the business itself, he’s an incredible brand builder. I think you could argue that [Upfront] put L.A. on the venture map.

TC: It was also, for a long time, an early-stage firm, but now it has a ‘barbell’ strategy. Is your new job to make sure it can maintain its stake in its portfolio companies as they grow? Can you shop outside of that portfolio?

SS: The mission for me will be supporting the best of Upfront’s hundred-plus existing portfolio companies that are poised to scale, and also to invest in companies not currency on the platform, and I anticipate [the latter] will happen more and more over time.

TC: Twitter was a lot more active on the corp dev front during the years when you were there. Why?

SS: When i joined in 2018, Jack Dorsey had been CEO for about three years, and really his focus was on the core mission of driving the public conversation, and in doing that, Twitter shrunk itself out of a lot of businesses and [shrunk] people wise as well.

TC: I remember it laid people off in 2016.

SS: And one of the offshoots of that was way less in the way of newer products, so there were no new acquisitions in the three years prior to me joining, and that muscle atrophies if you don’t exercise it. So [ahead of me] Jack had transformed the management team, which had been, relatively speaking, a revolving door of executives until that point, and I was brought in with a specific mandate of reviving a corporate development practice that had been quiet for a few years. I’d known [CFO] Ned Segal when he was a banker at Goldman Sachs and [while] I was at SuccessFactors, so when I heard about the role through the grapevine, I reached out.

TC: So Twitter starts shopping, buying up the news reader service Scroll, the newsletter platform Revue. Were these decisions coming down from the top or vice versa?

SS: The best way to describe it would be that it was product-need driven. The company had a few different objectives. One was to diversify Twitter from its dependency on being an ad-driven business. Something like 80% of revenue comes from ads.

Second, there’s an incredible need to ramp up its machine learning and artificial intelligence as a company. If you’re looking for toxicity in conversation, it’s not scalable to hire tens of thousands of people to do that. You need machine learning to find it. Twitter done well is also able to show you the conversations that are most interesting to you, and to do that, it has to take signals from what you follow and spend time reading and what you interact with, and that, at its core, is ML AI.  [Relatedly] Jack has a vision that anybody who tweets in whatever their native tongue is should be able to talk with someone else in their native tongue as part of a global conversation, and to do that, you need [natural language processing] techniques galore.

TC: There’s also this focus on consumer applications.

SS: That’s the third objective. What are the tools that followers and creators can use in conversation with each other? So [Twitter] added audio [via its Clubhouse rival Spaces]. We bought Revue, which is a competitor to Substack. So there’s a lot of innovation happening around the type of content that someone should expect to see or create on Twitter.

TC: Would you describe these acquisitions as proactive or reactive?

SS: From the outside it would seem reactive, but the reality is we’d been thinking a lot about something like Spaces even before Clubhouse took off. I think what’s noticeable to me is [Spaces] is one of the first times you’ve seen a company like Twitter build up a capability and a new product area that’s going head-to-head going against a company that’s focused only on that realm, and it’s competitive from day one. Twitter beat Clubhouse in [offering an] Android version because it poured resources into it, and I’d argue that a lot of the mechanics of Twitter and the fact that creators are on Twitter puts it in an awesome spot to win this segment.

Twitter also just has a huge amount of expertise in finding toxicity and things you want to be wary of when you’re a social media play, and a company of Clubhouse’s size, at least in its initial days, will have a hard time getting there.

TC: Twitter has so many interests, including around cryptocurrencies and decentralization. 

SS: In terms of priorities at Twitter,  a lot is under wraps in terms of the technologies that we expect [will rise up over] the next five  to 10 years, but [a lot of thought is being given to] the impact of cryptocurrency and the underlying protocols around it and how Twitter participates in a trustless, permissionless [world] where there’s a decentralized internet that can protect people’s privacy and allow people not to worry where their content is stored. People think of Twitter as a consumer app but there’s amazing and considerable diversity under the hood.

TC: Do you think because of the current regulatory environment that it has a better shot at working with companies and projects that might have gotten snapped up by Facebook and Google?

In terms of the regulatory environment, the reality is that even if you take the Facebooks and Googles out of the equation, there are acquirers that are competitive that would step up and buy things, so it’s a little short-sighted to think of just those two. But even when they were active, we were winning [deals]. A lot of the companies we acquired self-selected to be at Twitter because they like what it stands for, they like the way that Jack Dorsey leads the organization, and they believe in the stands that he takes and the positions that he and his leadership espouse.

TC: You’re now representing a very different brand. How will your work at Twitter help you compete for deals on behalf of Upfront?

SS: I have this network of incredible entrepreneurs around the world because of companies across my career that I’ve helped acquire or tried to acquire or who are running businesses; I also [have relationships with] VCs at different stages who actively spot businesses around the world [and introduce them to corp dev teams]. You might also know that Twitter has a diversity and inclusion program where they intend to have 25% of leadership be diverse over the next several years, so my team was often involved in finding the best ways to find diverse targets to buy. I also led a series of LP investments into newly emerging funds, some LatinX-founded, some women-founded, some Black-founded, some that were diverse from a geographic standpoint that are scouting companies in far flung places . . .

TC: Does Twitter also make direct investments?

SS: We did direct investments but [backing fund managers] is a more leveraged approach. Most of them are seed funds and they’ll in turn invest in 30 to 60 companies each. But yes, I scouted companies in far flung places, including [India’s] ShareChat where I served on the board for two years. [Editor’s note: TechCrunch reported earlier this year that Twitter explored buying ShareChat at an earlier point; the company has since raised numerous rounds of funding and was most recently valued by its investors at nearly $3 billion.]

TC: You have a lot of relationships, but it would still seem really hard to compete for growth-stage deals when so many other outfits are now investing there, too. How do you plan to compete?

SS: I will clearly be drawing on those networks to find deals. I’ll be investing in sectors where Upfront has already invested in, but initially I’ll be double-clicking [in areas[ I have strong interest in, including around the creator economy ecosystem, because I did so much of that at Twitter, and “Web 3.0,” this permissionless [evolution that Twitter is also focused on]. But I won’t kid myself. You compete by learning what your value proposition is. At Twitter, my strategy was winning on speed, knowing people earlier, and [underscoring] Twitter’s value proposition [to close deals]. I can’t talk about my [VC] strategy without having implemented yet; I’ll have to figure out what’s most interesting to entrepreneurs that the megafunds don’t offer.

Source: Tech Crunch

Kalepa, an insurance underwriting platform based out of New York, has raised a $14 million Series A funding round led by Inspired Capital, with participation from previous investor IA Ventures. Also participating was Gokul Rajaram of Doordash, Coinbase, and formerly of Google, Jackie Reses, formerly of Square, and Henry Ward of Carta.

Founded by Paul Monasterio and Daniel Hillman, the startup was launched in 2018 aimed at commercial insurance underwriters.

Co-Founder and CEO, Paul Monasterio said: “InsureTech has seen a massive evolution over the past decade, but commercial insurance—which supports hard-working business owners and protects their most important assets—has been left behind. We leverage billions of data points and unlock crucial insights in order to bring businesses and insurers a single version of the truth.”

Kalepa says its Copilot software automatically learns what the best underwriters are doing, allowing an underwriter to take a more accurate underwriting decision as quickly as possible vs. simply aggregating a lot of data for them. It competes with the legacy MGAs (e.g., RT Specialty, AmWins) as well as new entrants such as Pathpoint in the E&S market.

Penny Pritzker, co-founder at Inspired Capital and former U.S. Secretary of Commerce said: “Commercial insurance represents a $1T industry globally and helps 30 million U.S. businesses. Kalepa has brought some of the sharpest minds in understanding risk to this segment of the insurance market.”

Veteran insurance player Mario Vitale is also joining Kalepa’s Board.

Source: Tech Crunch

Back in July, YASA (formerly Yokeless And Segmented Armature), a British electric motor startup with a revolutionary ‘axial-flux’ motor, was acquired by Mercedes-Benz. The acquisition didn’t exactly garner enormous press attention, as scant other details were announced. But YASA is likely to be an entity worth watching.

Founded in 2009 after being spun out of Oxford University, YASA will now develop ultra-high-performance electric motors for Mercedes-Benz’s AMG.EA electric-only platform. It will stay in the UK as a fully owned subsidiary, serving both Mercedes-Benz and existing customers like Ferrari. The company will retain its own brand, team, facilities, and location in Oxford.

YASA’s axial-flux electric motors generated EV industry interest because of their efficiency, high power density, small size, and low weight.

By contrast, the ‘radial’ electric motor design is more common in today’s EV market. Even Tesla relies on radial electric motors, a legacy technology more than 40 years old with very little left to give in terms of innovation.

But YASA’s axial-flux design, which has very thin segments, means they can be combined into powerful single drive units. This makes them one-third the weight of other electric motors, more efficient, and with 3x higher power densities than Tesla.

Tim Woolmer, YASA’s Founder and CTO, invented this very new approach to electric motor design. I caught up with him to find out what’s next.

TC: What’s the journey so far:

TW: We started just over 12 years ago with really one remit: let’s accelerate electric cars, let’s do anything we can to make electric cars happen faster. We’re now 10 years into a 20-year revolution, every new car that gets sold in 10 years will be electric, no question. There’s nothing more exciting for an engineer than a period of revolution because the speed of innovation is what’s important. What is so exciting for us is we get to innovate fast, and that’s where the partnership with Mercedes is really interesting.

TC: What was different about the engine you came up with?

TW: We started with a blank sheet of paper at the beginning of my PhD. And the idea was to say, what could be created for the electric car industry in 10 or 15 years from now that they would need, that we could meet. Something that was lighter, more efficient, mass-producible in volume. In the 2000s, axial flux motors were not very common, but by combining axial flux technology and making a couple of little tweaks using some new materials, I basically stumbled into this new design which we call YASA: Yokeless And Segmented Armature. It takes what is a light topology in axial flux and makes it even lighter, about half as much again. There’s a benefit because the rotors are rotating at a bigger diameter. So, essentially torque is force times diameter, so for the same force, you get more torque. So if you double your diameter, you get double the torque for the same amount of materials. So that’s the benefit of axial flux.

TC: You’ve done this with deal with Mercedes – what’s next?

TW: We are basically a fully owned subsidiary. We’re going to utilize Mercedes’ industrialization powerhouse. But the key thing is, if you watch how technologies filter down in automotive, they start in the luxury sector, like the Ferraris of this world, and then filter down into mainstream sector and then go into higher volumes after that. That’s a space where Mercedes are world-class in terms of their industrialization, so that’s the kind of the idea behind the partnership.

TC: What else can you do from here?

TW: We will have a very high, high power, low density and lightweight engine so we can explore sport performance coupled with high levels of industrialization. That puts us in a really unique position for all sorts of things.

Although coy about his future plans, Woolmer is certainly one to watch in the EV and electric motor space. Post the acquisition YASA released this video:

Source: Tech Crunch