Security flaws found in popular EV chargers

U.K. cybersecurity company Pen Test Partners has identified several vulnerabilities in the APIs of six home electric vehicle charging brands and a large public EV charging network. While the charger manufacturers resolved most of the issues, the findings are the latest example of the poorly regulated world of Internet of Things devices, which are poised to become all but ubiquitous in our homes and vehicles.

Vulnerabilities were identified in the API of six different EV charging brands — Project EV, Wallbox, EVBox, EO Charging’s EO Hub and EO mini pro 2, Rolec and Hypervolt — and public charging network Chargepoint. Security researcher Vangelis Stykas identified several security flaws among the various brands that could have allowed a malicious hacker to hijack user accounts, impede charging and even turn one of the chargers into a “backdoor” into the owner’s home network.

The consequences of a hack to a public charging station network could include theft of electricity at the expense of driver accounts and turning chargers on or off.

A Raspberry Pi in a Wallbox charger. Image Credits: Pen Test Partners (opens in a new window

Some EV chargers used a Raspberry Pi compute module, a low-cost computer that’s often used by hobbyists and programmers.

“The Pi is a great hobbyist and educational computing platform, but in our opinion it’s not suitable for commercial applications as it doesn’t have what’s known as a ‘secure bootloader,’” Pen Test Partners founder Ken Munro told TechCrunch. “This means anyone with physical access to the outside of your home (hence to your charger) could open it up and steal your Wi-Fi credentials. Yes, the risk is low, but I don’t think charger vendors should be exposing us to additional risk.”

The hacks are “really fairly simple,” Munro said. “I can teach you to do this in five minutes,” he added.

The company’s report, published this past weekend, touched on vulnerabilities associated with emerging protocols like the Open Charge Point Interface, maintained and managed by the EVRoaming Foundation. The protocol was designed to make charging seamless between different charging networks and operators.

Munro likened it to roaming on a cell phone, allowing drivers to use networks outside of their usual charging network. OCPI isn’t widely used at the moment, so these vulnerabilities could be designed out of the protocol. But if left unaddressed, it could mean “that a vulnerability in one platform potentially creates a vulnerability in another,” Stykas explained.

Hacks to charging stations have become a particularly nefarious threat as a greater share of transportation becomes electrified and more power flows through the electric grid. Electric grids are not designed for large swings in power consumption — but that’s exactly what could happen, should there be a large hack that turned on or off a sufficient number of DC fast chargers.

“It doesn’t take that much to trip the power grid to overload,” Munro said. “We’ve inadvertently made a cyberweapon that others could use against us.”

The “Wild West” of cybersecurity

While the effects on the electric grid are unique to EV chargers, cybersecurity issues aren’t. The routine hacks reveal more endemic issues in IoT devices, where being first to market often takes precedence over sound security — and where regulators are barely able to catch up to the pace of innovation.

“There’s really not a lot of enforcement,” Justin Brookman, the director of consumer privacy and technology policy for Consumer Reports, told TechCrunch in a recent interview. Data security enforcement in the United States falls within the purview of the Federal Trade Commission. But while there is a general-purpose consumer protection statute on the books, “it may well be illegal to build a system that has poor security, it’s just whether you’re going to get enforced against or not,” said Brookman.

A separate federal bill, the Internet of Things Cybersecurity Improvement Act, passed last September but only broadly applies to the federal government.

There’s only slightly more movement on the state level. In 2018, California passed a bill banning default passwords in new consumer electronics starting in 2020 — useful progress to be sure, but which largely puts the burden of data security in the hands of consumers. California, as well as states like Colorado and Virginia, also have passed laws requiring reasonable security measures for IoT devices.

Such laws are a good start. But (for better or worse) the FTC isn’t like the U.S. Food and Drug Administration, which audits consumer products before they hit the market. As of now, there’s no security check on technology devices prior to them reaching consumers. Over in the United Kingdom, “it’s the Wild West over here as well, right now,” Munro said.

Some startups have emerged that are trying to tackle this issue. One is Thistle Technologies, which is trying to help IoT device manufacturers integrate mechanisms into their software to receive security updates. But it’s unlikely this problem will be fully solved on the back of private industry alone.

Because EV chargers could pose a unique threat to the electric grid, there’s a possibility that EV chargers could fall under the scope of a critical infrastructure bill. Last week, President Joe Biden released a memorandum calling for greater cybersecurity for systems related to critical infrastructure. “The degradation, destruction or malfunction of systems that control this infrastructure could cause significant harm to the national and economic security of the United States,” Biden said. Whether this will trickle down to consumer products is another question.


Source: Tech Crunch

Fleet your last Fleet — the Twitter feature vanishes today

You don’t know what you’ve got ’til it’s gone.

After a fittingly fleeting time in the wild, Twitter is banishing its ephemeral stories feature known as Fleets, which debuted in November 2020.

Twitter began testing Fleets back in March of last year. The company thought that it might be able to lure people who were hesitant about collecting their stray thoughts into the platform’s semi-permanent format with a “lower-pressure” kind of a tweet. Many major social platforms have some form of disappearing content, so it made sense that Twitter would give things a try too — but after eight months live, Twitter is killing the feature.

Like Instagram Stories, Fleets lived on top of the timeline, highlighted in their own dedicated space. As fleets phase out, Spaces, Twitter’s Clubhouse-like audio rooms, will occupy the same slot in the app.

The company hoped that Fleets would bring new users under its wing, but the only people who really adopted the new feature were apparently already Twitter diehards. Twitter said it would go back to the drawing board to figure out how to get more people participating on Twitter and Fleets were an unfortunate casualty of that realization. Some members of the product team that built Fleets shared their thoughts on Twitter in the feature’s waning hours.

“If we’re not evolving our approach and winding down features every once in a while – we’re not taking big enough chances,” Twitter Consumer Product VP Ilya Brown said in a blog post.

We can only hope that Twitter’s future products continue the gay sex naming scheme that the company accidentally introduced when it named Fleets “fleets.” (Congrats, gay former intern!)

To the company’s chagrin, the feature’s swift demise apparently inspired more enthusiasm for the product than Fleets had enjoyed previously. Twitter’s tweet announcing the death of Fleets also somehow turned into an iconic enough moment that the company made it into a collectible hoodie that reads “We’re sorry or you’re welcome,” ensuring that Fleets will live on in our hearts until we inevitably forget they ever existed — perhaps the most fitting tribute of all.


Source: Tech Crunch

A Silicon Valley VC firm with $1.8B in assets was hit by ransomware

Advanced Technology Ventures, a Silicon Valley venture capital firm with more than $1.8 billion in assets under its management, was hit by a ransomware attack in July that saw cybercriminals steal personal information on the company’s private investors, or limited partners (LPs).

In a letter to the Maine attorney general’s office, ATV said it became aware of the attack on July 9 after its servers storing financial information had been encrypted by ransomware. By July 26, the ATV learned that data had been stolen from the servers before the files were encrypted, a common “double extortion” tactic used by ransomware groups, which then threaten to publish the files online if the ransom to decrypt the files is not paid.

The letter said ATV believes the names, email addresses, phone numbers and Social Security numbers of the individual investors in ATV’s funds were stolen in the attack. Some 300 individuals were affected by the incident, including one person in Maine, according to a listing on the Maine attorney general’s data breach notification portal.

Venture capital firms often do not disclose all of their LPs — the investors who have thrown millions into an investment vehicle — to the public. A number of pre-approved names may be included in an announcement, but overall, a company’s private investors try to stay that way: private. The reasons vary, but it comes down to secrecy and a degree of competitive advantage: The firm may not want competitors to know who is backing them, and an investor may not want others to know where their money is going. This particular attack likely stole key information on a hush-hush part of how venture money works.

ATV said it notified the FBI about the attack. A spokesperson for the FBI did not immediately comment when reached by TechCrunch. ATV’s managing director Mike Carusi did not respond to questions sent by TechCrunch on Monday.

The venture capital firm, based in Menlo Park, California with offices in Boston, was founded in 1979 and invests largely in technology, communications, software and services, and healthcare technology. The company was an early investor in many of the startups from the last decade, like software library Fandango, Host Analytics (now Planfun) and Apptegic (now Evergage). Its more recent investments include Tripwire, which was later sold to cybersecurity company Belden for $710 million; Cedexis, a network traffic monitoring startup acquired by Cisco in 2018; and Actifo, which was sold to Google in 2020.


Natasha Mascarenhas contributed reporting. Send tips securely over Signal and WhatsApp to +1 646-755-8849. You can also send TechCrunch files or documents using our SecureDrop.


Source: Tech Crunch

Planted raises another $21M to expand its growing plant-based meat empire (and add schnitzel)

Swiss alternative protein company Planted has raised its second round of the year, a CHF 19M (about $21M at present) “pre-B” fundraise that will help it continue its growth and debut new products. A U.S. launch is in the cards eventually but for now Planted’s exclusively European customers will be able to give its new veggie schnitzel a shot.

Planted appeared in 2019 as a spinoff from Swiss research university ETH Zurich, where the founders developed the original technique of extruding plant proteins and water into fibrous structures similar to real meat’s. Since then the company has diversified its protein sources, adding oat and sunflower to the mix, and developed pulled pork and kebab alternative products as well.

Over time the process has improved as well. “We added fermentation/biotech technologies to enhance taste and texture,” wrote CEO and co-founder Christoph Jenny in an email to TechCrunch. “Meaning 1) we can create structures without form limitation and 2) can add a broader taste profile.”

The latest advance is schnitzel, which is of course a breaded and fried piece of pounded-thin meat style popular around the world, but especially in the company’s core markets of Germany, Austria, and Switzerland. Jenny noted that Planted’s schnitzel is produced as one piece, not pressed together from smaller bits. “The taste and texture benefit from fermentation approach, that makes the flavor profile mouth watering and the texture super juicy,” he said, though of course we will have to test it to be sure. Expect schnitzel to debut in Q3.

It’s the first of several planned “whole” or “prime” cuts, larger pieces that can be prepared like any other piece of meat — the team says their products require no special preparation or additives and can be dropped in as 1:1 replacements in most recipes. Right now the big cuts are leaving the lab and entering consumer testing for taste tuning and eventually scaling.

The funding round came from “Vorwerk Ventures, Gullspång Re:food, Movendo Capital, Good Seed Ventures, Joyance, ACE & Company (SFG strategy) and Be8 Ventures,” and was described as a follow-on to March’s CHF 17M series A. No doubt the exploding demand for alternative proteins and growing competition in the space has spurred Planted’s investors to opt for more aggressive growth and development strategies.

The company plans to enter several new markets over Q3 and Q4, but the U.S. is still a question mark due to COVID-19 restrictions on travel. Jenny said they are preparing so that they can make that move whenever it becomes possible, but for now Planted is focused on the European market.

(Update: This article originally misstated the new round as also being CHF 17M – entirely my mistake. This has been corrected.)


Source: Tech Crunch

MGA Thermal raises $8M AUD led by Main Sequence for its modular energy storage blocks

A photo of MGA Thermal co-founders Erich Kisi and Alex Post

MGA Thermal co-founders Erich Kisi and Alex Post. Image Credits: MGA Thermal

MGA Thermal wants to help utility companies transition from fossil fuels to renewable energy sources with shoebox-sized thermal energy storage blocks. The company says a stack of 1,000 blocks is about the size of a small car and can store enough energy to power 27 homes for 24 hours. This gives utility providers the ability to store large amounts of energy and have it ready to dispatch even when weather conditions aren’t ideal for generating solar or wind power. The modular blocks also make it easier to convert infrastructure, like coal-fired power plants, into grid-scale energy storage.

MGA Thermal announced today it has raised $8 million AUD (about $5.9 million USD), bring its total funding so far to $9 million AUD. The round was led by Main Sequence, a venture firm founded by Australia’s national science agency that recently launched a new $250 million AUD fund. Alberts Impact Capital, New Zealand’s Climate Venture Capital Fund, The Melt and returning investor CP Ventures participated, along with angel investors like Chris Sang, Emlyn Scott and Glenn Butcher.

Based in Newcastle, Australia, MGA Thermal was founded in April 2019 by Erich Kisi and Alexander Post after nearly a decade spent researching and developing miscibility gap alloys technology at the University of Newcastle. When asked to explain MGA tech in layperson’s terms, Kisi used a delicious analogy.

MGA Thermal’s blocks “essentially comprise metal particles that melt when heated embedded in an inert matrix material. Think of a block as being like a choc-chip muffin heated in a microwave. The muffin consists of a cake component, which holds everything in shape when heated, and the choc chips, which melt,” he told TechCrunch.

“The energy that goes into melting the choc chips is stored and can burn your mouth when you bite into the muffin,” he added. “Melting energy is more intense than merely heating something up and that melting energy is concentrated near the melting temperature so energy can be released in a consistent way.”

MGA Thermal's modular energy storage blocks

MGA Thermal’s modular energy storage blocks. Image Credits: MGA Thermal

Energy stored in MGA Thermal’s blocks can be used to heat water to power steam turbines and generators. In this scenario, blocks are designed with internal tubing for pumping and boiling water, or interact with a heat exchanger. Kisi said MGA Thermal’s blocks enable aging thermal power plans to continue running on renewable energy that would usually be switched off in situations like overheating caused by too much sun or high winds.

Other thermal energy solutions include heating low-cost solid materials in blocks or granules to high temperatures in an insulated container. But many of these materials aren’t good at moving thermal energy around and have temperature limitations, Kisi said. This means thermal energy decreases in temperature as it is discharged, making it less effective.

Another method for storing thermal energy involves molten salts that are heated by a renewable energy source and stored in a hot tank. The hot salt is then pumped through a heat exchanger to make steam, while colder (but still molten) salt is returned to a “cold” tank.

“These systems are widely used in concentrating solar thermal energy but have found little use elsewhere,” Kisi said. “That’s mostly because there is a large infrastructure cost for piping pumps and heaters, and a large amount of power is wasted keeping the salt from freezing.”

MGA Thermal is establishing a manufacturing plant in New South Wales to scale to commercial levels production of its blocks, and plans to double its team over the next 12 months so it can make hundreds of thousands of blocks each month. It is also currently working with partners like Swiss company E2S Power ASG and U.S.-based Peregrine Turbine Technologies to deploy its tech in Australia, Europe and North America. For example, E2S Power AG will use MGA Thermal’s tech to repurpose retired and active coal-fired thermal plants in Europe.

While MGA Thermal’s tech has many industrial use cases, like converting power stations, building off-grid storage and supplying power to remote communities and commercial spaces, it can also help consumers consume less fossil fuel. For example, MGA blocks can be used by households to store excess energy generated from rooftop solar panels or small wind turbines. Then that energy can be used to heat homes.

“Around the world an estimated three billion people heat their homes by burning fuel,” said Kisi. “That’s a lot of CO2, especially in very cold climates.”

In a statement, Main Sequence partner Martin Duursma said, “A core focus of our new fund is uncovering the scientific discoveries, and helping to turn them into real, tangible technologies so we can reverse our climate impact. Erich Kisi and Alexander Post’s impressive deep research backgrounds, their expert team and innovative technology are paving the way for grid-scale energy storage and boosting the capability of a renewable energy future globally.”


Source: Tech Crunch

Amazon will pay you $10 in credit for your palm print biometrics

How much is your palm print worth? If you ask Amazon, it’s about $10 in promotional credit if you enroll your palm prints in its checkout-free stores and link it to your Amazon account.

Last year, Amazon introduced its new biometric palm print scanners, Amazon One, so customers can pay for goods in some stores by waving their palm prints over one of these scanners. By February, the company expanded its palm scanners to other Amazon grocery, book and 4-star stores across Seattle.

Amazon has since expanded its biometric scanning technology to its stores across the U.S., including New York, New Jersey, Maryland and Texas.

The retail and cloud giant says its palm scanning hardware “captures the minute characteristics of your palm — both surface-area details like lines and ridges as well as subcutaneous features such as vein patterns — to create your palm signature,” which is then stored in the cloud and used to confirm your identity when you’re in one of its stores.

Amazon’s latest promotion: $10 promotional credit in exchange for your palm print. (Image: Amazon)

What’s Amazon doing with this data exactly? Your palm print on its own might not do much — though Amazon says it uses an unspecified “subset” of anonymous palm data to improve the technology. But by linking it to your Amazon account, Amazon can use the data it collects, like shopping history, to target ads, offers and recommendations to you over time.

Amazon also says it stores palm data indefinitely, unless you choose to delete the data once there are no outstanding transactions left, or if you don’t use the feature for two years.

While the idea of contactlessly scanning your palm print to pay for goods during a pandemic might seem like a novel idea, it’s one to be met with caution and skepticism given Amazon’s past efforts in developing biometric technology. Amazon’s controversial facial recognition technology, which it historically sold to police and law enforcement, was the subject of lawsuits that allege the company violated state laws that bar the use of personal biometric data without permission.

“The dystopian future of science fiction is now. It’s horrifying that Amazon is asking people to sell their bodies, but it’s even worse that people are doing it for such a low price,” said Albert Fox Cahn, the executive director of the New York-based Surveillance Technology Oversight Project, in an email to TechCrunch.

“Biometric data is one of the only ways that companies and governments can track us permanently. You can change your name, you can change your Social Security number, but you can’t change your palm print. The more we normalize these tactics, the harder they will be to escape. If we don’t [draw a] line in the sand here, I am very fearful what our future will look like,” said Cahn.

When reached, an Amazon spokesperson declined to comment.

 


Source: Tech Crunch

Can your startup support a research-based workflow?

The President’s Council of Advisors on Science and Technology predicts that U.S. companies will spend upward of $100 billion on AI R&D per year by 2025. Much of this spending today is done by six tech companies — Microsoft, Google, Amazon, IBM, Facebook and Apple, according to a recent study from CSET at Georgetown University. But what if you’re a startup whose product relies on AI at its core?

Can early-stage companies support a research-based workflow? At a startup or scaleup, the focus is often more on concrete product development than research. For obvious reasons, companies want to make things that matter to their customers, investors and stakeholders. Ideally, there’s a way to do both.

Before investing in staffing an AI research lab, consider this advice to determine whether you’re ready to get started.

Compile the right research team

Assuming it’s your organization’s priority to do innovative AI research, the first step is to hire one or two researchers. At Unbabel, we did this early by hiring Ph.D.s and getting started quickly with research for a product that hadn’t been developed yet. Some researchers will build from scratch and others will take your data and try to find a pre-existing model that fits your needs.

While Google’s X division may have the capital to focus on moonshots, most startups can only invest in innovation that provides them a competitive advantage or improves their product.

From there, you’ll need to hire research engineers or machine learning operations professionals. Research is only a small part of using AI in production. Research engineers will then release your research into production, monitor your model’s results and refine the model if it stops predicting well (or otherwise is not operating as planned). Often they’ll use automation to simplify monitoring and deployment procedures as opposed to doing everything manually.

None of this falls within the scope of a research scientist — they’re most used to working with the data sets and models in training. That said, researchers and engineers will need to work together in a continuous feedback loop to refine and retrain models based on actual performance in inference.

Choose the problems you want to solve

The CSET research cited above shows that 85% of AI labs in North America and Europe do some form of basic AI research, and less than 15% focus on development. The rest of the world is different: A majority of labs in other countries, such as India and Israel, focus on development.


Source: Tech Crunch

Google is building its own chip for the Pixel 6

Google just dumped a whole bunch of news about its upcoming Pixel 6 smartphone. Maybe the company was looking to get out in front of August 11’s big Samsung event — or perhaps it’s just hoping to keep people interested in the months leading up to a big fall announcement (and beat additional leaks to the punch).

In either case, we got the first look at the upcoming Android smartphone, including a fairly massive redesign of the camera system on the rear. The company has traded its square configuration for a big, black bar that appears to indicate an even larger push into upgraded hardware after a couple of generations spent insisting that software/AI are the grounds on which it has chosen to fight.

More interesting, however, is the arrival of Tensor, a new custom SoC (system on a chip) that will debut on the Pixel 6 and Pixel 6 Pro. It’s an important step from the company, as it looks to differentiate itself in a crowded smartphone field — something the company has admittedly struggled with in the past.

That means moving away from Qualcomm chips on these higher-end systems, following in Apple’s path of creating custom silicon. That said, the chips will be based on the same ARM architecture that Qualcomm uses to create its otherwise ubiquitous Snapdragon chips, and Google will still rely on the San Diego company to supply components for its budget-minded A Series.

Image Credits: Google

The Tensor name is a clear homage to Google’s TensorFlow ML, which has driven a number of its projects. And unsurprisingly, the company sites AI/ML as foundational to the chip’s place in the forthcoming phones. The Pixel team has long pushed software-based solutions, such as computational photography, as a differentiator.

“The team that designed our silicon wanted to make Pixel even more capable. For example, with Tensor we thought about every piece of the chip and customized it to run Google’s computational photography models,” Google writes. “For users, this means entirely new features, plus improvements to existing ones.”

Beyond the upgraded camera system, Tensor will be central to improving things such as speech recognition and language learning. Details are understandably still thin (the full reveal is happening in the fall, mind), but today’s announcement seems geared toward laying out what the future looks like for a revamped Pixel team — and certainly these sorts of focuses play into precisely what Google ought to be doing in the smartphone space: focusing on its smarts in AI and software.

In May of last year, key members of the Pixel team left Google, pointing to what looked to be a transition for the team. Hardware head Rick Osterloh was reported to have had harsh words at the time.

“AI is the future of our innovation work, but the problem is we’ve run into computing limitations that prevented us from fully pursuing our mission,” Osterloh wrote in today’s post. “So we set about building a technology platform built for mobile that enabled us to bring our most innovative AI and machine learning (ML) to our Pixel users.”


Source: Tech Crunch

Unicorns are ready for a haircut

The digitization of your haircut may not have been on your 2020 bucket list, but 2021 has an even more surprising line item: Tech-powered barbershops are now a business proposition valued at nearly a billion dollars.

Squire is a back-end barbershop management tool for independent businesses. I first covered it in the early months of the COVID-19 pandemic. The startup raised millions of dollars days before its key clientele — barber shops — were shut down across the country. The company eventually went from defense to offense in its growth strategy, finding itself as a key partner for any barbershop that needed to start offering contactless payments, digital appointment booking and a more seamless customer experience built for a generation used to doing everything online.

This week, Squire tripled its valuation thanks to a Tiger-Global-led round. The company is now worth $750 million, after being valued at around $75 million when we first spoke to them.

When I spoke to co-founder Dave Salvant, who launched the company with Songe LaRon in 2016, he explained how the company is now in a spot to expand into other barbershop-specific value propositions — either through acquisitions or partnerships. This week, for example, Squire announced that it launched a payment processing arm with Bond, a venture-backed fintech infrastructure company. The company also partnered with Gusto to bring on HR services for its clientele. Salvant noted how the progress of tech, especially financial services, lets them offer up a strong product without needing to build everything in-house.

While these are partnerships for now, I wouldn’t be surprised if we see Squire begin to scoop up companies that can unlock value from its existing datasets of how barbershops function and what kind of capital comes in and out of those doors.

Behind the numbers:

It’s a company to watch that fits into the narrative of pandemic rocked, then proven startups looking to expand with fresh capitalization. Less common, though, is that Squire is now en route to becoming a historical and unfortunately still rare Black-led unicorn. More data points, the better.

In the rest of this newsletter, we’ll discuss Robinhood’s public debut and why a CEO thinks everyone needs to be them for a day. You can find me on Twitter @nmasc_.

Robinhood sells Robinhood

illustration of robinhood feather logo spraypainted on a brick wall

Image Credits: TechCrunch

The long-awaited Robinhood IPO is no longer long-awaited. After pricing at the lower end of its range, the consumer investing and trading app’s shares went down sharply, teetering between 8% to 10%.

Here’s what to know: IPO expert and fellow Equity co-host Alex Wilhelm gave us two reasons as to why Robinhood’s stock went down. After all, we’re used to pops in the consumer-facing tech company world.

Robinhood made a big chunk of its IPO available to its own users. Or, in practice, Robinhood curtailed early retail demand by offering its investors and traders shares at the same price and level of access that big investors were given. It’s a neat idea. But by doing so, Robinhood may have lowered unserved retail interest in its shares, perhaps reshaping its early supply/demand curve.

Or maybe the company’s warnings that its trading volumes could decline in Q2 2021 scared off some bulls.

You get to be a CEO, you get to be a CEO!

Burst balloons and party streamers on wooden floor

Image Credits: Richard Drury (opens in a new window) / Getty Images

Now that free beer is no longer a company perk, the next best one may have emerged: Let anyone in your company become CEO for a day. Vincit CEO Ville Houttu implemented this program at his company in 2018 and said that the initiative has paid off “tenfold.”

Here’s how it works, per the company:

The program gives our employee the reins for 24 hours with an unlimited budget. The only requirement? The CEO must make one lasting decision that will help improve the working experience of Vincit employees. Whatever the CEO of the Day decides, the company sticks with. They can purchase something for the company, change a policy, update a tool we use … Really, anything that they come up with can be done.

You can see the resulting policies in our story, but in my humble opinion, the end result is definitely better than free beer.

Around TC

  • The TechCrunch Disrupt Agenda just went live. It’s a must-read line up and a must-attend event. Some standouts:
    • Pot, Pottery and Beyond with Seth Rogen (Houseplant), Haneen Davies (Houseplant) and Michael Mohr (Houseplant)
    • Breaking the Bank with Brian Armstrong (Coinbase)
    • Speaking SPAC with Chamath Palihapitiya (Social Capital)
    • Dogmatic Design with Melanie Perkins (Canva)
  • Shout out to Amanda Silberling, a recent addition to the TechCrunch team who has been absolutely crushing her consumer tech beat. Follow her on Twitter if you don’t already!

Across the week

Seen on TechCrunch

For more public market news, subscribe to The Exchange by Alex Wilhelm and Anna Heim.  

Seen on Extra Crunch

Talk soon,

N


Source: Tech Crunch

The pandemic effect is slowing

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

Our work this week kicked off in China, dug into African startup activity, dealt with China once again, took a very deep dive into the Latin American startup ecosystem and wrapped with a second look at the Robinhood IPO. In other words, not much was really going on at all!

You may have been surprised to see Amazon’s stock fall off a cliff Friday. After all, the company posted huge revenue gains to just over $113 billion during the quarter. And AWS, its public cloud business, seemed to tick along nicely.

But investors had expected more growth and had priced the Seattle-based e-commerce player accordingly. When Amazon missed revenue expectations and projected Q3 2021 growth of “between 10% and 16% compared with third quarter 2020,” investors let go of its stock.

But as some in the financial press are noting, it’s not just Amazon that’s taking stick from investors. Etsy and eBay also fell this week. It appears that investors are anticipating that a period of turbocharged growth in e-commerce thanks to the COVID-19 pandemic is slowing at least, and may in fact be over. That means valuations are going to get reset at a host of companies, startups included.

Not that every company slowing down after the pandemic’s early phases is suffering, Duolingo managed a strong opening week as a public company despite slowing growth. But delta variant or not, the investing classes are changing their market framing. We’d be smart to keep that in mind.

It’s the products, stupid

Something that is stuck in my teeth this week is how much Robinhood has changed the game regarding consumer investing. Sure, this week was mostly about the company’s IPO and its somewhat relaxed early trading performance. But, buried in its final S-1/A filings is new evidence of Robinhood’s cultural impact.

At the top of the U.S. consumer investing unicorn’s filings is a pair of statistics. They look like this:

Image Credits: Robinhood

Dang, you are thinking, that’s a lot of funded accounts and monthly active users. But then again, those are March 31, 2021, numbers. They are out of date. In the same filing, Robinhood indicated that its June 30 quarter saw its funded accounts tally grow to 22.5 million. That’s 25% growth in a single quarter!

Naturally, there were a few things going on in the second quarter of this year that won’t happen again, but it’s still a bonkers result.

Early Robinhood investor Jan Hammer of Index sent over a comment in the wake of his investment’s public offering, arguing that the company is part of work being done by tech companies to shake up financial services. Companies like Robinhood, he wrote, are “not just a fresh coat of paint for the same old financial products.”

I think that is correct. And the point is pretty damning of incumbent players still in the market with dated websites and medium-grade mobile experiences. Can you imagine getting a Gen Zer to swap out Robinhood or eToro or M1 Finance for, I don’t know, John Hancock? The toothpaste, as they say, is not going back into the tube.

How might Fidelity and Vanguard convince Robinhood users to move to their services? Will they be able to, or has an entire generation of investors skipped the traditional finance players entirely? Robinhood bulls must think so, and I can’t really find it in me to fight the perspective.

I do not know how Robinhood will perform in the coming quarters, but it does feel — given the MAU numbers from Robinhood, AUM figures from M1 and so forth — that fintech startups stole several marches on your trusty 401(k) provider. A market that I am sure the fintechs will soon dig more deeply into.

More about Africa

Circling back to Africa, how about some July data? Our exploration of the continent’s strong H1 2021 performance stopped in June, so let’s add some data. Per Africa-watching publication The Big Deal, African startups raised $308 million across 71 deals in the quarter. That’s a run rate of around $3.7 billion. Or in simpler terms, African startups are still on pace for their best year ever when it comes to raising venture capital.

Hugs, and get vaccinated.

Your friend,

Alex


Source: Tech Crunch