Jeff Bezos’ Blue Origin auctions off seat on first human spaceflight for $28M

Blue Origin has its winning bidder for its first ever human spaceflight, and the winner will pay $28 million for the privilege of flying aboard the company’s debut private astronaut mission. The winning bid came in today during a live auction, which saw 7,600 registered bidders, from 159 countries compete for the spot.

This was the culmination of Blue Origin’s three part bidding process for the ticket, which included a blind auction first, followed by an open, asynchronous auction with the highest bid posted to the company’s website whenever it changed. This last live auction greatly ramped up the value of the winning bid, which was at just under $5 million prior to the event.

This first seat up for sale went for a lot more than what an actual, commercial spot is likely to cost on Blue Origin’s New Shepard capsule, which flies to suborbital space and only spends a few minutes there before returning to Earth. Estimates put the cost of a typical launch at someone under $1 million, likely closer to $500,000 or so. But this is the first, which is obviously a special distinction, and it’s also a trip that will allow the winning bidder to pretty much literally rub elbows with Blue Origin founder Jeff Bezos, who is going to be on the flight as well, along with his brother Mark, and a fourth passenger that Blue Origin says it will be announcing sometime in the coming “weeks,” ahead of the July 20 target flight date.

As for who won the auction, we’ll also have to wait to find that out, since the winner’s identity is also going to be “released in the weeks following” the end of today’s live bidding. And in case you thought that $28 million might represent a big revenue windfall for Blue Origin, which has spent years developing its human spaceflight capability, think again: The company is donating it to its Club for the Future non-profit foundation, which is focused on encouraging kids to pursue careers in STEM in a long-term bid to help Bezos’ larger goals of making humanity a spacefaring civilization.

You can re-watch the entire live bidding portion of the auction via the stream below.

How many opinions does it take to hit the $100M ARR Club?

In a world of talking points and corporate jargon, opinions are refreshing — and Expensify CEO and founder David Barrett is full of them. One of his earliest lessons in life, for example, was that basically everyone is wrong about basically everything. If instilling that at a young age doesn’t force you to become an entrepreneur, I don’t know what does.

Barrett’s ethos has, as reporter Anna Heim puts, led to Expensify having “its own take on almost everything” from hiring without job titles and resumes, to going distributed before it was cool, to having an almost non-existent sales team.

And before you roll your eyes at the unconventional, here’s a factoid for you: Today, the 130-person expense management business has reached more than 10 million users and hit $100 million in annual revenue.

Heim has spent months working on the Expensify EC-1 to connect dots and give us a full picture into an anything-but-conventional company as it heads toward an IPO. The final installment published this week so you can read the whole series in one straight shot:

In the rest of this newsletter, I’ll walk you through a refresh of some new investment vehicles and two fintech mega-rounds to know. I also want to give a shout out to our mobility team, with transportation editor Kirsten Korosec and reporters Aria Alamalhodaei and Rebecca Bellan, who led efforts to put on a fantastic event at TC Sessions: Mobility this week.

Ok, into the news!

More money, more representation?

Image Credits: Black_Kira / Getty Images

As I discussed last month, venture capital is going through yet another unbundling process. But, for every savvy fintech syndicate out there, I don’t see the same level of explicitness when it comes to the tools that help the communityless, undernetworked and underestimated access opportunities.

Here’s what to know: Two new efforts this week give me hope. Ten venture capitalists teamed up to launch Screendoor, which Forbes reports is a $50 million fund-of-funds to back emerging fund managers from diverse backgrounds. The partners, which include Charles Hudson, Kirsten Green, Aileen Lee and Hunter Walk, will not take any fee or carry in the fund.

Speaking of cross-fund collaboration, Utah-based startup incubator Altitude Lab had similar news to share. The incubator, which spun out of Recursion and the University of Utah, has launched a 13-investor coalition to back underrepresented health tech founders. This week, it announced a $50 million commitment in funding and mentorship.

And if you want to have more fun(ds):

The Fintech twins

Handle of door to bank vault safe

Image Credits: Janet Kimber (opens in a new window) / Getty Images

Three is a trend, but two means twins, and that matters too! Riddles aside, we saw two fintech giants raise massive tranches of capital within days of each other.

Here’s what to know: Klarna raised $639 million at a $45.6 billion valuation, and Nubank raised $750 million at a $30 billion valuation. Both fintech companies are based outside of the United States, but Klarna attests some of its rapid growth to a growing consumer base in the United States. More than 18 million American consumers are now using Klarna, which is up from 10 million at the end of last year’s third quarter. Meanwhile, Nubank is staying focused on its primary market of Brazil, with some expansion in Colombia and Mexico.

 Demystifying mega-rounds:

The huge TAM of fake breaded chicken bits

Another week, another spicy Equity episode for you. And this week, we mean it literally: Simulate, the company behind those sometimes spicy fake chicken nuggets, raised a ton of money.

Here’s what to know: Beyond fake meat, topics in this week’s episode include worker empowerment, culture in startups, eldercare and a $900 million exit.

Around TC

Across the week

Seen on TechCrunch

read more about Apple's WWDC 2021 on TechCrunch

Seen on Extra Crunch

Talk next week,

N

Inside Marqeta’s fintech mega-IPO

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday? Sign up here.

Ready? Let’s talk money, startups and spicy IPO rumors.

A small programming note: The Exchange column and newsletter are off next week (6/14-6/19), returning to regular service 6/21 after I get some sleep and come up with some new ideas! — Alex

The Exchange dug into the mostly bullish IPO market earlier this week, noting that Monday.com and Marqeta put up some pretty big points over the last few days. The unicorn market is looking reasonably healthy, in other words, which itself bodes well for Q3 liquidity.

But today, instead of taking a broader view, I want to niche down to just the Marqeta offering. For fintech companies, the company’s successful pricing and strong share-price performance is a welcome result. But how does the company itself feel about its debut?

To get a handle on just that, The Exchange chatted with the company’s founder and CEO Jason Gardner after his company priced its IPO and started to trade. To annoy my dear friend and TechCrunch superior Henry Pickavet, we’ll proceed in bullet points so that we can cover lots of ground and stay within word count:

  • Gardner said that he spent 34 hours doing Q&A during the Marqeta roadshow. And that he loved it. This detail has little to do with the company’s IPO but does provide a little perspective on the CEO himself. That’s a lot of hours of answering the same 13 questions. I would have gone insane.
  • Marqeta priced above-range, raising more money than it might have anticipated. Per Gardner, the company will pursue inorganic growth (acquisitions) especially in markets outside the United States as they make sense, with the caveat that he has a high bar for technology quality; Gardner said that he won’t buy companies with lesser tech, as you’d just have to rebuild them after buying them. Shade.
  • Marqeta started talking internally about its IPO 18 months before it occurred, which made the transition to being a public company easier. I suppose Gardner’s point here that going public is a cultural lift as well as an accounting job. Which makes SPACs appear slightly cavalier, if I can take the point one step further.
  • What’s changed for Gardner as his company has matured and now gone public? His perspective has pushed farther out, from months to years; I presume that this will continue as Marqeta expands even more.

Shares of Marqeta are up another 6% as I write to you Friday afternoon.

What’s up with Embroker?

As The Exchange reported Friday morning, the global insurtech market is more than hot both in the United States and Europe. Evidence of the fact is not hard to find, but one good indication of the insurtech market’s present climate is Embroker’s $100 million round from earlier in the week.

Embroker is a San Francisco-based insurtech company that sells business insurance. Its products include cyber coverage, business-owner coverage, professional liability and the like. It’s perhaps related to Next Insurance, another insurtech provider with a business focus that recently raised a huge round.

The Exchange crew, fascinated as we are by insurtech as a larger category, wanted to get some questions in front of the Embroker crew. Here’s a Q&A that was conducted via email. Bolding via TechCrunch. Questions have been gently edited for clarity:

From a high level, are the loss ratios that the business insurance products that Embroker offers better/worse/comparable to those that we are familiar with in, say, consumer auto insurance?

Yes, our loss ratios are substantially better than other insurance products like consumer auto or homeowners insurance. And our loss ratios thus far compare favorably to other established small business commercial carriers.

When the company was negotiating valuation for the new round, did recent insurtech IPOs come into the pricing discussion?

The recent insurtech IPOs have provided valuation benchmarks in the public market, which is great for the space overall. But we didn’t use them as direct comps because our loss ratio, retention, and sales and marketing efficiency are all substantially better than other insurtechs currently in the public markets.

We found it interesting that Embroker offers “cyber risk insurance.” Given growth in market concerns regarding ransomware, is that product in higher demand than before? And is it as economically lucrative as other insurance lines at the company?

Given the recent number of high profile cyber claims we expect cyber to be a rapidly growing line of insurance both in terms of demand and in terms of pricing. While claims activity will likely continue to rise, our models for cyber have been effective at pricing the risk appropriately and we expect that the investments we’re making in our platform will allow us to continue to do so.

For startups specifically, we also currently bundle tech E&O and cyber insurance as many founders were under covered by stand alone E&O or cyber policies when it came to these emerging threats.

Finally, we’re curious what the company’s marketing spend has looked like over time — are you finding similarly efficient S&M avenues as you did when Embroker was smaller?

While we’ve been growing our marketing spend materially each year, it has actually been decreasing as a percentage of revenue consistently as we get to larger market share within the verticals we target, as that drives significant organic growth for us. For example, we currently insure a large enough percentage of all active U.S. venture-backed companies that so many companies just know to come to us for insurance when they raise funding.

Sure, that’s a lot of words. But inside of the bloc are key nuggets. That Embroker considers its economics better than what we can see in most public comps is notable; the fact implies that there is a wider economic spread amongst insurtech companies than we have been led to believe by the few IPOs we’ve seen.

And that Embroker has operating leverage, at least regarding its S&M spend. That could indicate that the insurtech marketplace is not so crowded as to make intelligent business operations impossible. Surely that terrible turn of events can be solved with a few hundred million more from Tiger and its rivals.

Closing today, on the OKR software beat — more here — Koan reported 82% customer growth this week. For a scrappy player in a crowded market, that’s a great result. A startup to watch, I reckon.

Chat with you in around ten days. — Alex

 

 

Apple’s iPadOS 15 breaks the app barrier

The announcement of new iPad software at this year’s WWDC conference had an abnormally large expectation hung on it. The iPad lineup, especially the larger iPad Pro, has kept up an impressively frantic pace of hardware innovation over the past few years. In that same time frame, the software of the iPad, especially its ability to allow users to use multiple apps at once and in its onramps for professional software makers, has come under scrutiny for an apparently slower pace. 

This year’s announcements about iOS 15 and iPadOS 15 seemed designed to counter that narrative with the introduction of a broad number of quality of life improvements to multitasking as well as a suite of system-wide features that nearly all come complete with their own developer-facing APIs to build on. I had the chance to speak to Bob Borchers, Apple’s VP of Worldwide Product Marketing, and Sebastien (Seb) Marineau-Mes, VP, Intelligent System Experience at Apple about the release of iPadOS 15 to discuss a variety of these improvements. 

Marineau-Mes works on the team of Apple software SVP Craig Federighi and was pivotal in the development of this new version.

iPad has a bunch of new core features including SharePlay, Live Text, Focuses, Universal Control, on-device Siri processing and a new edition of Swift Playgrounds designed to be a prototyping tool. Among the most hotly anticipated for iPad Pro users, however, are improvements to Apple’s multitasking system. 

If you’ve been following along, you’ll know that the gesture-focused multitasking interface of iPadOS has had its share of critics, including me. Though it can be useful in the right circumstances, the un-discoverable gesture system and confusing hierarchy of the different kinds of combinations of apps made it a sort of floppy affair to utilize correctly for an apt user much less a beginner. 

Since the iPad stands alone as pretty much the only successful tablet device on the market, Apple has a unique position in the industry to determine what kinds of paradigms are established as standard. It’s a very unique opportunity to say, hey, this is what working on a device like this feels like; looks like; should be.

So I ask Borchers and Marineau-Mes to talk a little bit about multitasking. Specifically Apple’s philosophy in the design of multitasking on iPadOS 15 and the update from the old version, which required a lot of acrobatics of the finger and a strong sense of spatial awareness of objects hovering out off the edges of the screen. 

“I think you’ve got it,” Borchers says when I mention the spatial gymnastics, “but the way that we think about this is that the step forward and multitasking makes it easier discover, easier to use even more powerful. And, while pros I think were the ones who were using multitasking in the past, we really want to take it more broadly because we think there’s applicability to many, many folks. And that’s why the, the discovery and the ease of use I think were critical.”

“You had a great point there when you talked about the spatial model and one of our goals was to actually make the spatial model more explicit in the experience,” says Marineau-Mes, “where, for example, if you’ve got a split view, and you’re replacing one of the windows, we kind of open the curtain and tuck the other app to the side, you can see it — it’s not a hidden hidden mental model, it’s one that’s very explicit.

Another great example of it is when you go into the app, switcher to reconfigure your windows, you’re actually doing drag and drop as you rearrange your new split views, or you dismiss apps and so on. So it’s not a hidden model, it’s one where we really try to reinforce a spatial model with an explicit one for the user through all of the animations and all of the kinds of affordances.”

Apple’s goal this time around, he says, was to add affordances for the user to understand that multitasking was even an option — like the small series of dots at the top of every app and window that now allows you to explicitly choose an available configuration, rather than the app-and-dock-juggling method of the past. He goes on to say that consistency was a key metric for them on this version of the OS. The appearance of Slide Over apps in the same switcher view as all other apps, for instance. Or the way that you can choose configurations of apps via the button, by drag and drop in the switcher and get the same results.

In the dashboard, Marineau-Mes says, “you get an at a glance view of all of the apps that you’re running and a full model of how you’re navigating that through the iPad’s interface.”

This ‘at a glance’ map of the system should be very welcome by advanced users. Even as a very aggressive Pro user myself, Slide Over apps became more of a nuisance than anything because I couldn’t keep track of how many were open and when to use them. The ability to combine them on the switcher itself is one of those things that Apple has wanted to get into the OS for years but is just now making its way onto iPads. Persistence of organization, really, was the critical problem to tackle.

“I think we believe strongly in building a mental model where people know where things are [on iPad],” says Marineau-Mes. “And I think you’re right when it comes persistence I think it also applies to, for example, home screen. People have a very strong mental model of where things are in the home screen as well as all of the apps that they’ve configured. And so we try to maintain a well maintained that mental model, and also allow people to reorganize again in the switcher.”

He goes on to explain the new ‘shelf’ feature that displays every instance or window that an app has open within itself. They implemented this as a per-app feature rather than a system-wide feature, he says, because the association of that shelf with a particular app fit the overall mental model that they’re trying to build. The value of this shelf may jump into higher relief when more professional apps that may have a dozen documents or windows open at once and active during a project ship later this year.

Another nod to advanced users in iPadOS 15 is the rich keyboard shortcut set offered across the system. The interface can be navigated by arrow keys now, many advanced commands are there and you can even move around on an iPad using a game controller. 

“One of the key goals this year was to make basically everything in the system navigable from the keyboard,” says Marineau-Mes, “so that if you don’t want to, you don’t have to take your hands off the keyboard. All of the new multitasking affordances and features, you can do through the keyboard shortcuts. You’ve got the new keyboard shortcut menu bar where you can see all the shortcuts that are available. It’s great for discoverability. You can search them and we even, you know, and this is a subtle point, but we even made a very conscious effort to rationalize the shortcuts across Mac and iPadOS. So that if you’re using universal control, for example, you’re going to go from one environment to the other seamlessly. You want to ensure that consistency as you go across.”

The gestures, however, are staying as a nod to consistency for existing users that may be used to those. 

To me, one of the more interesting and potentially powerful developments is the introduction of the Center Window and its accompanying API. A handful of Apple apps like Mail, Notes and Messages now allow items to pop out into an overlapping window.

“It was a very deliberate decision on our part,” says Marineau-Mes about adding this new element. “This really brings a new level of productivity where you can have, you know, this floating window. You can have content behind it. You can seamlessly cut and paste. And that’s something that’s just not possible with the traditional [iPadOS] model. And we also really strive to make it consistent with the rest of multitasking where that center window can also become one of the windows in your split view, or full size, and then go back to to being a center window. We think it’s a cool addition to the model and we look really look forward to 3rd parties embracing it.”

Early reception of the loop Apple gave at iPadOS 15 has an element of reservation about it still given that many of the most powerful creative apps are made by third parties that must adopt these technologies in order for them to be truly useful. But Apple, Borchers says, is working hard to make sure that pro apps adopt as many of these new paradigms and technologies as possible, so that come fall, the iPad will feel like a more hospitable host for the kinds of advanced work pros want to do there.

One of the nods to this multi-modal universe that the iPad exists in is Universal Control. This new feature uses Bluetooth beaconing, peer-to-peer WiFi and the iPad’s touchpad support to allow you to place your devices close to one another and — in a clever use of reading user intent — slide your mouse to the edge of a screen and onto your Mac or iPad seamlessly. 

CUPERTINO, CALIFORNIA – June 7, 2021: Apple’s senior vice president of Software Engineering Craig Federighi showcases the ease of Universal Control, as seen in this still image from the keynote video of AppleÕs Worldwide Developers Conference at Apple Park. (Photo Credit: Apple Inc.)Ê

“I think what we have seen and observed from our users, both pro and and otherwise, is that we have lots of people who have Macs and they have iPads, and they have other iPhones and and we believe in making these things work together in ways that are that are powerful,” says Borchers. “And it just felt like a natural place to be able to go and extend our Continuity model so that you could make use of this incredible platform that is iPadOS while working with your Mac, right next to it. And I think the big challenge was, how do you do that in kind of a magical, simple way. And that’s what Seb and his team and been able to accomplish.

“It really builds on the foundation we made with Continuity and Sidecar,” adds Marineau-Mes. “We really thought a lot about how do you make the experience — the set up experience — as seamless as possible. How do you discover that you’ve got devices side by side.?

The other thing we thought about was what are the workflows that people want to have and what capabilities that will be essential for that. That’s where thinks like the ability to seamlessly drag content across the platforms or cut and paste was we felt to be really, really important. Because I think that’s really what brings to the magic to the experience.”

Borchers adds that it makes all the continuity features that much more discoverable. Continuity’s shared clipboard, for instance, is an always on but invisible presence. Expanding that to visual and mouse-driven models made some natural sense.

“It’s just like, oh, of course, I can drag that all the way across all the way across here,” he says.

“Bob, you say, of course,” Marineau-Mes laughs. “And yet for those of us working in platforms for a long time, the ‘of course’, is technically very, very challenging. Totally non obvious.”

Another area where iPadOS 15 is showing some promising expansionary behavior is in system-wide activities that allow you to break out of the box of in-app thinking. These include embedded recommendations that seed themselves into various apps, Shareplay, which makes an appearance wherever video calls are found and Live Text, which turns all of your photos into indexed archives searchable with a keyboard. 

Another is Quick Note, a system extension that lets you swipe from the bottom corner of your screen wherever you are in the system.

“There are, I think a few interesting things that we did with with Quick Note,” says Marineau-Mes. “One is this idea of linking. So, that if I’m working in Safari or Yelp or another app, I can quickly insert a link to whatever content I’m viewing. I don’t know about you, but it’s something that I certainly do a lot when I do research. 

“The old way was, like, cut and paste and maybe take a screenshot, create a note and jot down some notes. And now we’ve made that very, very seamless and fluid across the whole system. It even works the other way where, if I’m now in Safari and I have a note that refers to that page in Safari, you’ll see it revealed as a thumbnail at the bottom of the screen’s right hand side. So, we’ve really tried to bring the notes experience to be something that just permeates the system and is easily accessible from, from everywhere.” 

Many of the system-wide capabilities that Apple is introducing in iPadOS 15 and iOS 15 have an API that developers can tap into. That is not always the case with Apple’s newest toys, which in years past have often been left to linger in the private section of its list of frameworks rather than be offered to developers as a way to enhance their apps. Borchers says that this is an intentional move that offers a ‘broader foundation of intelligence’ across the entire system. 

This broader intelligence includes Siri moving a ton of commands to its local scope. This involved having to move a big chunk of Apple’s speech recognition to an on-device configuration in the new OS as well. The results, says Borchers, are a vastly improved day-to-day Siri experience, with many common commands executing immediately upon request — something that was a bit of a dice roll in days of Siri past. The removal of the reputational hit that Siri was taking from commands that went up to the cloud never to return could be the beginning of a turnaround for the public perception of Siri’s usefulness.

The on-device weaving of the intelligence provided by the Apple Neural Engine (ANE) also includes the indexing of text across photos in the entire system, past, present and in-the-moment.

“We could have done live text only in camera and photos, but we wanted it to apply to anywhere we’ve got images, whether it be in in Safari or quick look or wherever,” says Marineau-Mes. “One of my favorite demos of live text is actually when you’ve got that long complicated field for a password for a Wi-Fi network. You can just actually bring it up within the keyboard and take a picture of it, get the text in it and copy and paste it into into the field. It’s one of those things that’s just kind of magical.”

On the developer service front of iPadOS 15, I ask specifically about Swift Playgrounds, which add the ability to write, compile and ship apps on the App Store for the first time completely on iPad. It’s not the native Xcode some developers were hoping for, but, Borchers says, Playgrounds has moved beyond just ‘teaching people how to code’ and into a real part of many developer pipelines.

“ think one of the big insights here was that we also saw a number of kind of pro developers using it as a prototyping platform, and a way to be able to be on the bus, or in the park, or wherever if you wanted to get in and give something a try, this was super accessible and easy way to get there and could be a nice adjunct to hey, I want to learn to code.”

“If you’re a developer,” adds Marineau-Mes, “it’s actually more productive to be able to run that app on the device that you’re working on because you really get great fidelity. And with the open project format, you can go back and forth between Xcode and Playgrounds. So, as Bob said, we can really envision people using this for a lot of rapid prototyping on the go without having to bring along the rest of their development environment so we think it’s a really, really powerful addition to our development development tools this year.”

I can’t be the only developer wondering just how much of my apps I could shoehorn into Swift Playgrounds now that it can build apps, just so I can tweak them on the go ? Especially since it supports UIKit development, not just SwiftUI, and Swift packages pic.twitter.com/vpsEMlVigs

— Steve Troughton-Smith (@stroughtonsmith) June 12, 2021

Way back in 2018 I profiled a new team at Apple that was building out a testing apparatus that would help them to make sure they were addressing real-world use cases for flows of process that included machines like the (at the time un-revealed) new Mac Pro, iMacs, MacBooks and iPads. One of the demos that stood out at the time was a deep integration with music apps like Logic that would allow the input models of iPad to complement the core app. Tapping out a rhythm on a pad, brightening or adjusting sound more intuitively with the touch interface. More of Apple’s work these days seems to be aimed at allowing users to move seamlessly back and forth between its various computing platforms, taking advantage of the strengths of each (raw power, portability, touch, etc) to complement a workflow. A lot of iPadOS 15 appears to be geared this way.

Whether it will be enough to turn the corner on the perception of iPad as a work device that is being held back by software, I’ll reserve judgement until it ships later this year. But, in the near term, I am cautiously optimistic that this set of enhancements that break out of the ‘app box’, the clearer affordances for multitasking both in and out of single apps and the dedication to API support are pointing towards an expansionist mentality on the iPad software team. A good sign in general.

7 new security features Apple quietly announced at WWDC

Apple went big on security and privacy during its Worldwide Developer Conference (WWDC) keynote this week, showcasing features from on-device Siri audio processing to a new privacy dashboard for iOS that makes it easier than ever to see which apps are collecting your data and when.

While typically vocal about security during the Memoji-filled, two-hour-long(!) keynote, the company also quietly introduced several new security and privacy-focused features during its WWDC developer sessions. We’ve rounded up some of the most interesting — and important.

Passwordless login with iCloud Keychain

Apple is the latest tech company taking steps to ditch the password. During its “Move beyond passwords” developer session, it previewed Passkeys in iCloud Keychain, a method of passwordless authentication powered by WebAuthn, and Face ID and Touch ID.

The feature, which will ultimately be available in both iOS 15 and macOS Monterey, means you no longer have to set a password when creating an account or a website or app. Instead, you’ll simply pick a username, and then use Face ID or Touch ID to confirm it’s you. The passkey is then stored in your keychain and then synced across your Apple devices using iCloud — so you don’t have to remember it, nor do you have to carry around a hardware authenticator key.

“Because it’s just a single tap to sign in, it’s simultaneously easier, faster and more secure than almost all common forms of authentication today,” said Garrett Davidson, an Apple authentication experience engineer. 

While it’s unlikely to be available on your iPhone or Mac any time soon — Apple says the feature is still in its ‘early stages’ and it’s currently disabled by default — the move is another sign of the growing momentum behind eliminating passwords, which are prone to being forgotten, reused across multiple services, and — ultimately — phishing attacks. Microsoft previously announced plans to make Windows 10 password-free, and Google recently confirmed that it’s working towards “creating a future where one day you won’t need a password at all”.

Microphone indicator in macOS

macOS has a new indicator to tell you when the microphone is on. (Image: Apple)

Since the introduction of iOS 14, iPhone users have been able to keep an eye on which apps are accessing their microphone via a green or orange dot in the status bar. Now it’s coming to the desktop too.

In macOS Monterey, users will be able to see which apps are accessing their Mac’s microphone in Control Center, MacRumors reports, which will complement the existing hardware-based green light that appears next to a Mac’s webcam when the camera is in use.

Secure paste

iOS 15, which will include a bunch of privacy-bolstering tools from Mail Privacy Protection to App Privacy Reports, is also getting a feature called Secure Paste that will help to shield your clipboard data from other apps.

This feature will enable users to paste content from one app to another, without the second app being able to access the information on the clipboard until you paste it. This is a significant improvement over iOS 14, which would notify when an app took data from the clipboard but did nothing to prevent it from happening.

With secure paste, developers can let users paste from a different app without having access to what was copied until the user takes action to paste it into their app,” Apple explains. “When developers use secure paste, users will be able to paste without being alerted via the [clipboard] transparency notification, helping give them peace of mind.”

While this feature sounds somewhat insignificant, it’s being introduced following a major privacy issue that came to light last year. In March 2020, security researchers revealed that dozens of popular iOS apps — including TikTok — were “snooping” on users’ clipboard without their consent, potentially accessing highly sensitive data.

Advanced Fraud Protection for Apple Card

Payments fraud is more prevalent than ever as a result of the pandemic, and Apple is looking to do something about it. As first reported by 9to5Mac, the company has previewed Advanced Fraud Protection, a feature that will let Apple Card users generate new card numbers in the Wallet app.

While details remain thin — the feature isn’t live in the first iOS 15 developer beta — Apple’s explanation suggests that Advanced Fraud Protection will make it possible to generate new security codes — the three-digit number you enter at checkout – when making online purchases. 

“With Advanced Fraud Protection, Apple Card users can have a security code that changes regularly to make online Card Number transactions even more secure,” the brief explainer reads. We’ve asked Apple for some more information. 

‘Unlock with Apple Watch’ for Siri requests

As a result of the widespread mask-wearing necessitated by the pandemic, Apple introduced an ‘Unlock with Apple Watch’ in iOS 14.5 that enabled users to unlock their iPhone and authenticate Apple Pay payments using an Apple Watch instead of Face ID.

The scope of this feature is expanding with iOS 15, as the company has confirmed that users will soon be able to use this alternative authentication method for Siri requests, such as adjusting phone settings or reading messages. Currently, users have to enter a PIN, password or use Face ID to do so.

“Use the secure connection to your Apple Watch for Siri requests or to unlock your iPhone when an obstruction, like a mask, prevents Face ID from recognizing your Face,” Apple explains. Your watch must be passcode protected, unlocked, and on your wrist close by.”

Standalone security patches

To ensure iPhone users who don’t want to upgrade to iOS 15 straight away are up to date with security updates, Apple is going to start decoupling patches from feature updates. When iOS 15 lands later this year, users will be given the option to update to the latest version of iOS or to stick with iOS 14 and simply install the latest security fixes. 

“iOS now offers a choice between two software update versions in the Settings app,” Apple explains (via MacRumors). “You can update to the latest version of iOS 15 as soon as it’s released for the latest features and most complete set of security updates. Or continue on ?iOS 14? and still get important security updates until you’re ready to upgrade to the next major version.”

This feature sees Apple following in the footsteps of Google, which has long rolled out monthly security patches to Android users.

‘Erase all contents and settings’ for Mac

Wiping a Mac has been a laborious task that has required you to erase your device completely then reinstall macOS. Thankfully, that’s going to change. Apple is bringing the “erase all contents and settings” option that’s been on iPhones and iPads for years to macOS Monterey.

The option will let you factory reset your MacBook with just a click. “System Preferences now offers an option to erase all user data and user-installed apps from the system, while maintaining the operating system currently installed,” Apple says. “Because storage is always encrypted on Mac systems with Apple Silicon or the T2 chip, the system is instantly and securely ‘erased’ by destroying the encryption keys.”

This Week in Apps: WWDC 21 highlights, Instagram Creator Week recap, Android 12 beta 2 arrives

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.

This week, our series will take a dive into the key announcements impacting app developers from WWDC 21.

This Week in Apps will soon be a newsletter! Sign up here: techcrunch.com/newsletters

WWDC 21 Wrap-Up

Image Credits: Apple

Apple’s WWDC went virtual again this year, but it didn’t slow down the pace of announcements. This week, Apple introduced a slate of new developer tools and frameworks, changes to iOS that will impact how consumers use their devices and new rules for publishing on its App Store, among other things. We don’t have the bandwidth to dig into every dev update — and truly, there are better places to learn about, say, the new concurrency capabilities of Swift 5.5 or what’s new with SwiftUI.

But after a few days of processing everything new, here’s what’s jumping out as the bigger takeaways and updates.

Xcode Cloud

Apple’s development IDE, Xcode 13, now includes Xcode Cloud, a built-in continuous integration and delivery service hosted on Apple’s cloud infrastructure. Apple says the service, birthed out of its 2018 Buddybuild acquisition, will help to speed up the pace of development by combining cloud-based tools for building apps along with tools to run automated tests in parallel, deliver apps to testers via TestFlight and view tester feedback through the web-based App Store Connect dashboard. Beyond the immediate improvements to the development process (which developers are incredibly excited about based on #WWDC21 tweets) Xcode Cloud represents a big step by Apple further into the cloud services space, where Amazon (AWS), Google and Microsoft have dominated. While Xcode Cloud may not replace solutions designed for larger teams with more diverse needs, it’s poised to make app development easier — and deliver a new revenue stream to Apple. If only Apple had announced the pricing! 

Jenkins has left the chat. #XcodeCloud

— Alphonso Sensley II (@AlphonsoSensley) June 7, 2021

Swift Playgrounds 4

Image Credits: Apple

Swift Playgrounds got a notable update in iPadOS 15, as it will now allow developers to build iPhone and iPad apps right on their iPad and submit them to the App Store. In Swift Playgrounds 4, coming later this year, Apple says developers will be able to create the visual design of an app using SwiftUI, see the live preview of their app’s code while building and can run their apps full-screen to test them out. App projects can also be opened and edited with either Swift Playgrounds or Xcode.

While it’s not the Xcode on iPad system some developers have been requesting, it will make app building more accessible because of iPad’s lower price point compared with Mac. It could also encourage more people to try app development, as Swift Playgrounds helps student coders learn the basics then move up to more challenging lessons over time. Now, they can actually build real apps and hit the publish button, too.

I had to save for a couple of months – 8-10 months before buying my first Mac.
Swift playgrounds on iPad is a very welcome move!

— Pinal Naik (@swift_geek) June 7, 2021

App Store

Antitrust pressure swirling around Apple has contributed to a growing sentiment among some developers that Apple doesn’t do enough to help them grow their businesses — and therefore, is undeserving of a 15%-30% cut of the revenues the developers themselves worked to gain. The new App Store updates may start to chip away at that perception.

Soon, developers will be able to create up to 35 custom product pages targeted toward different users, each with their unique URL for sharing and analytics for measuring performance. The pages can include different preview videos, screenshots and text.

Image Credits: Apple

Apple will also allow developers to split traffic between three treatments of the app’s default page to measure which ones convert best, then choose the percentage of the App Store audience that will see one of the three treatments.

Meanwhile, the App Store will begin to show to customers in-app events taking place inside developers’ apps — like game competitions, fitness challenges, film premieres and more — effectively driving traffic to apps and re-engaging users. Combined, Apple is making the case that its App Store can drive discovery beyond just offering an app listing page.

Beyond the App Store product itself, Apple overhauled its App Store policies to address the growing problem of scam apps. The changes give Apple permission to crack down on scammers by removing offenders from its Developer Program. The new guidelines also allow developers to report spam directly to Apple, instead of, you know, relying on tweets and press.

Apple has historically downplayed the scam problem. It noted how the App Store stopped over $1.5 billion in fraudulent transactions in 2020, for example. Even if it’s a small percentage of the App Store, scam apps with fake ratings not only can cheat users out of millions of dollars, they reduce consumer trust in the App Store and Apple itself, which has longer-term consequences for the ecosystem health. What’s unclear, however, is why Apple is seemingly trying to solve the App Review issues using forms — to report fraud (and now, to appeal rulings, too) when it’s becoming apparent that Apple needs a more systematic way of keeping tabs on the app ecosystem beyond the initial review process.

Notifications overhaul

The App Store discovery updates mentioned above also matter more because developers may need to reduce their reliance on notifications to send users back into their apps. Indeed, iOS 15 users will be able to choose which apps they don’t need to hear from right away — these will be rounded up into a new Notification Summary that arrives on a schedule they configure, where Siri intelligence helps determine which apps get a top spot. If an app was already struggling to re-engage users through push notifications, getting relegated to the end of a summary is not going to help matters.

And users can “Send to Summary” right from the Lock Screen notification itself in addition to the existing options to “Deliver Quietly” or be turned off. That  means any ill-timed push could be an app developer’s last.

Image Credits: Apple

Meanwhile, the clever new “Focus” modes let iOS users configure different quiet modes for work, play, sleeping and more, each with their own set of rules and even their own home screens. But making this work across the app ecosystem will require developer adoption of four “interruption levels,” ranging from passive to critical. A new episode of a fav show should be a “passive” notification, for example. “Active” is the default setting — which doesn’t get to break into Focus. “Time sensitive” notifications should be reserved for alerting to more urgent matters, like a delivery that’s arrived on your doorstep or an account security update. These may be able to break through Focus, if allowed.

Image Credits: Apple

“Critical” notifications would be reserved for emergencies, like severe weather alerts or local safety updates. While there is a chance developers may abuse the new system to get their alert through, they risk users silencing their notifications entirely or deleting the app. Focus mode users will be power users and more technically savvy, so they’ll understand that an errant notification here was a choice and not a mistake on the developer’s part.

Image Credits: Apple

Augmented Reality

Apple has been steadily pushing out more tools for building augmented reality apps, but this WWDC it just introduced a huge update that will make it easier for developers getting started with AR. With the launch of RealityKit 2, Apple’s new Object Capture API will allow developers to create 3D models in minutes using only an iPhone or iPad (or a DSLR or drone if they choose).

Explains Apple this will address one of the most difficult parts of making great AR apps, which was the process of creating 3D models. Before, this could take hours and cost thousands of dollars — now, developers with just an iPhone and Mac can participate. The impacts of this update will be seen in the months and years ahead, as developers adopt the new tools for things like AR shopping, games and other AR experiences — including ones we may not have seen yet, but are enabled by more accessible AR technology tools and frameworks.

SharePlay

This update is unexpected and interesting, despite missing what would have been an ideal launch window: mid-pandemic back in 2020. With SharePlay, developers can bring their apps into what Apple is calling “Group Activities” — or shared experiences that take place right inside FaceTime.

If you were co-watching Hulu with friends during the pandemic, you get the idea. But Apple isn’t tacking on some co-viewing system here. Instead, it’s introducing new APIs that let users listen to music, stream video or screen share with friends, in a way that feels organic to FaceTime. There was a hint of serving the locked-down COVID-19 pandemic crowd with this update, as Apple talks about making people feel as if they’re “in the same room” — a nod to those many months where that was not possible. And that may have inspired the changes, to be sure. Similarly, FaceTime’s support for Android and scheduled calls — a clear case of Zoom envy — feels like a case of playing catch-up on Apple’s part.

Image Credits: Apple

The immediate demand for these sorts of experiences may be dulled by a population that’s starting to recover from the pandemic — people are now going out and seeing others in person again thanks to vaccines. But the ability to use apps while FaceTime’ing has a lifespan that extends beyond the COVID era, particularly among iPhone’s youngest users. The demographic growing up with smartphones at ever-younger ages don’t place phone calls — they text and FaceTime. Some argue Gen Z even prefers the latter.

Image Credits: Apple

With its immediate support for Apple services like Apple Music and Apple TV+, SharePlay will hit the ground running — but it will only fully realize its vision with developer adoption. But such a system seems possibly only because of Apple’s tight control over its platform. It also gives a default iOS app a big advantage over third-parties.

More

There were, of course, hundreds of updates announced this week, like Spatial audio, Focus modes, AirPods updates, iPadOS improvements (widgets! multi-tasking), Health updates, iCloud+ with Private Relay, watchOS improvements, Spotlight’s upgrade, macOS 12 Monterey (with Continuity with Universal Control), HomePod updates, StoreKit 2, Screen Time APIs, ShazamKit, App Clips improvements, Photos improvements and others.

Many, however, were iterative updates — like a better version Apple Maps, for example, or Siri support for third-party devices. Others are Apple’s attempt to catch up with competitors, like the Google Lens-like “Live Text” update for taking action on things snapped in your photos. The more significant changes, however, aren’t yet here — like the plan to add Driver’s Licenses to Wallet and the plan to shift to passwordless authentication systems. These will change how we use devices for years to come.

Weekly News

Platforms: Google

? Not to be outdone by WWDC (ha), Google this week launched Android 12, beta 2. This release brings more of the new features and design changes to users that weren’t yet available in the first beta which debuted at Google I/O. This includes the new privacy dashboard; the addition of the mic and camera indicators that show when an app is using those features; an indication when an app is reading from the clipboard; and a new panel that makes it easier to switch between internet providers or Wi-Fi networks.

Google also this week released its next Pixel feature drop which brought new camera and photo features, privacy features, Google Assistant improvements and more. Highlights included a way to create stargazing videos, a car crash detection feature and a way to answer or reject calls hands-free.

E-commerce

Pinterest wants to get more users clicking “buy.” The company this week added a new Shopping List feature which automatically organizes your saved Product Pins for easier access.

Augmented Reality

Google discontinued its AR-based app Measure, which had allowed users to measure things in the real world using the phone’s camera. The app had seen some stability and accuracy issues in the past.

Fintech

Facebook’s Messenger app added Venmo-like QR codes for person-to-person payments inside its app in the U.S. Users can scan the codes to send or request a payment, even if they’re not Facebook friends with the other party. Payments are sent over Facebook Pay, which is backed by a users’ credit card, debit card or a PayPal account.

Downloads of fintech apps are up 132% globally YoY according to an AppsFlyer marketing report.

Twitter and Square CEO Jack Dorsey said Square is thinking about adding a bitcoin hardware wallet to its product lineup. The exec detailed some of the thinking behind the plan in a Twitter thread.

Square is considering making a hardware wallet for #bitcoin. If we do it, we would build it entirely in the open, from software to hardware design, and in collaboration with the community. We want to kick off this thinking the right way: by sharing some of our guiding principles.

— jack (@jack) June 4, 2021

? Social: Creator Week recap

Instagram head Adam Mosseri said Facebook will help creators get around Apple’s 30% cut. While any transactions that take place in iOS will follow Apple’s rules, Mosseri said Facebook will look for other ways to help creators make a living where they don’t have to give up a portion of their revenue — like by connecting brands and creators offline or affiliate deals.

Related to this, Instagram announced during its Creator Week event it will start testing a native affiliate tool that will allow creators to recommend products and then earn commissions on those sales. Creators can also now link their merch shops to personal profiles instead of just business profiles, and by year-end, will be able to partner on merch and drops with companies like Bravado/UMG, Fanjoy, Represent and Spring.

Image Credits: Instagram

Instagram also rolled out a new “badge” for live videos which lets viewers tip creators, similar to Facebook’s Stars. Facebook also said paid online events, fan subscriptions, badges and its upcoming news products will remain free through 2023. And it rolled out new features and challenges to help creators earn additional payouts for hitting certain milestones.

Finally, Instagram in a blog post explained how its algorithm works. The post details how the app decides what to show users first, why some posts get more views than others, how Explore works and other topics.

Messaging

Giphy’s Clips (GIFs with sound) are now available in the Giphy iMessage app, instead of only on the web and in its iOS app. That means you can send the…uh, videos (??)…right from your keyboard.

Dating

Image Credits: Tinder

Match-owned dating app Tinder added a way for users to block contacts. The feature requires users grant the app permission to access the phone’s contacts database, which is a bit privacy-invasive. But then users can go through their contacts and check those they want to block on Tinder. The benefit is this would allow people to block exes and abusers. But on the downside, it permits cheating as users can block partners and those who might see them and report back.

Streaming & Entertainment

YouTube will allow creators to repurpose audio from existing YouTube videos as its “Shorts” product — basically, its TikTok competitor — rolls out to more global markets.

Gaming

Google’s cross-platform cloud gaming service Google Stadia is coming to Chromecast with Google TV and Android TV starting on June 23.

Roblox is generating estimated revenue of $3.01 million daily on iPhone, according to data from Finbold. Clash of Clans, Candy Crush Saga, Pokémon GO and others follow. Good thing if they have to pay up over that music usage lawsuit.

Image Credits: Finbold

Utilities

Apple-owned weather app Dark Sky, whose technology just powered a big iOS 15 revamp of Apple’s stock weather app, is not shutting down just yet. The company announced its iOS app, web app and API will remain online through the end of 2022, instead of 2021 as planned.

Productivity

Microsoft’s Outlook email app for iOS now lets you use your voice to write emails and schedule meetings. The feature leverages Cortana, and follows the launch of a Play My Emails feature inside Outlook Mobile.

Government & Policy

President Biden revoked and replaced Trump’s actions which had targeted Chinese apps, like TikTok and WeChat. The president signed a new executive order that requires the Commerce Dept. to review apps with ties to “foreign adversaries” that may pose national security risks. Trump had previously tried to ban the apps outright, but his order was blocked by federal courts.

Google has agreed to show more mobile search apps for users to choose from on new Android phones following feedback from the European Commission. The company had been showing a choice screen where app providers bid against each other for the slot, and pay only if users download apps. DuckDuckGo and others complained the solution has not been working.

Security & Privacy

Security flaws were found in Samsung’s stock mobile apps impacting some Galaxy devices. One could have allowed for data theft through the Secure Folder app. Samsung Knox security software could have been used to install malicious apps. And a bug in Samsung Dex could have scraped data from notifications. There are no indications users were impacted and the flaws were fixed.

An App Store analysis published by The Washington Post claims nearly 2% of the top grossing apps on one day were scam apps, which cost people $48 million. They included several VPN apps that told users their iPhones were infected with viruses, a QR code reader that tricked customers into a subscription for functionality that comes with an iPhone, and apps that pretend to be from big-name brands, like Amazon and Samsung.

Multiple apps were removed from the Chinese app store for violating data collection rules, Reuters reported. The apps hailed from Sogou, iFlytek and others, and included virtual keyboards.

Funding and M&A

? Mexican payments app Clip raised $250 million from SoftBank’s Latin American Fund and Viking Global Investors, valuing the business at $2 billion. The app offers a Square-like credit card reader device and others, and has begun to offer cash advances to clients.

? Shopify acqui-hires the team from the augmented reality home design app Primer. The app, which will be shut down, had allowed users to visualize what tile, wallpaper or paint will look like on surfaces inside their home.

? Singapore-based corporate services “super app” Osome raised $16 million in Series A funding. The app offers online accounting and other business services for SMBs. Investors include Target Global, AltaIR Capital, Phystech Ventures, S16VC and VC Peng T. Ong.

?  Chinese grocery delivery app Dingdong Maicai, backed by Sequoia and Tiger Global, has filed for a U.S. IPO. To date, the company has raised $1 billion.

? San Francisco-based MaintainX raised $39 million in Series B funding led by Bessemer Venture Partners for its mobile-first platform for industrial and frontline workers to help track maintenance, safety and operations.

? Berlin’s Ada Health raised $90 million in Series B funding in a round led by Leaps by Bayer, the impact investment arm of Bayer AG. The app lets users monitor their symptoms and track their health and clinical data.

? Photo app Dispo confirmed its previously leaked Series A funding, which earlier reports had pegged as being around $20 million. The app had been rebranded from David’s Disposable and dropped its association with YouTuber David Dobrik, following sexual assault allegations regarding a member of the Vlog Squad. Spark Capital severed ties with Dispo as a result. Seven Seven Six and Unshackled Ventures remained listed as investors, per Dispo’s press release, but the company didn’t confirm the size of the round.

? Brazilian fintech Nubank raised a $750 million extension to its Series G (which was $400 million last year) led by Berkshire Hathaway. The company offers a digital bank account accessible from an app, debit card, payments, loans, insurance and more. The funding brings the company to a $1.15 billion valuation.

? Seattle-based tutoring app Kadama raised $1.7 million in seed funding led by Grishin Robotics. The app, which offering an online tutoring marketplace aimed at Gen Z, rode the remote learning wave to No. 2 in the Education category on the App Store.

?  Mark Cuban-based banking app Dave, which helps Americans build financial stability, is planning to go public via a SPAC launched by Chicago-based Victory Park Capital called VPC Impact Acquisition Holdings III. It also includes a $210 million private investment from Tiger Global Management.

?  Mobile game publisher Voodoo acquired Tel Aviv-based marketing automation platform Bidshake for an undisclosed sum. Launched in January 2020, Bidshake combines data aggregation and analytics with campaign and creative management. It will continue to operate independently.

Downloads

Turntable — tt.fm

Image Credits: tt.fm on iPhone/Brian Heater

Newly launched music social network tt.fm is a Turntable.fm rival that lets you virtually hang out with friends while listening to music. To be clear, the app is not the same as Turntable.fm, which shut down in 2013 but then returned during the pandemic as people looked to connect online. While that Turntable was rebirthed by its founder Billy Chasen, Turntable – tt.fm hails from early Turntable.fm employee, now tt.fm CEO Joseph Perla. But as live events are coming back, the question now may be not which Turntable app to choose, but whether the Turnable.fm experience has missed the correct launch window…again.

SketchAR

SketchAR

SketchAR

The art app SketchAR previously offered artists tools to draw with AR, turn photos into AR, create AR masks for Snapchat, play games and more. With its latest update, artists can now turn their work into NFTs directly inside the app and sell it. The app, now used by nearly 500,000 users, will select a “Creator of the Week” to NFT on OpenSea. Others can create and auction their art as NFTs on-demand.

Tweets

Today is Launch Day ?

Introducing OldOS — iOS 4 beautifully rebuilt in SwiftUI.

* ? Designed to be as close to pixel-perfect as possible.
*? Fully functional, perhaps even usable as a second OS.
* ? Fully open source for all to learn, modify, and build on. pic.twitter.com/K0JOE2fEKM

— Zane (@zzanehip) June 9, 2021

Tell me you are building AR glasses, without telling me that you are building AR glasses, I’ll go first: pic.twitter.com/4KO2diQyHm

— Miguel de Icaza (@migueldeicaza) June 9, 2021

I have successfully used iOS 15 to focus on what I do the most. pic.twitter.com/UNr47w53yP

— Benjamin Mayo (@bzamayo) June 8, 2021

And all the ASO-related WWDC updates in one post!https://t.co/BCNmNYHHjP pic.twitter.com/9bRzmsNcdk

— ilia kukharev (@ilyakuh) June 9, 2021

Apple: we created new ways to report App Store scams and issues for developers.

1. Doesn't tackle end users who get scammed every day and never refunded.

2. They are basically using developers as a free workforce to do their job and report issues instead of hiring more people.

— Damien Petrilli (@DamienPetrilli) June 9, 2021

Apple's Object Capture on a Pineapple. One of my fav things to test Photogrammetry against. This was processed using the RAW detail setting.

More info in thread ? pic.twitter.com/2mICzbV8yY

— Mikko Haapoja (@MikkoH) June 8, 2021

Apple invents… Zoom! pic.twitter.com/nNbR6gUaTt

— Joanna Stern (@JoannaStern) June 7, 2021

The rapid hard-tech emergence

Garrett Winther
Contributor

Garrett Winther is a partner and program director at HAX, SOSV’s venture program for hard tech. An engineer by training, venture builder by trade, he is bringing hard-tech ventures to life at SOSV, IDEO and MIT.

When I joined the team at SOSV’s HAX, a venture program designed to help early-stage hardware founders, my friends in tech shook their heads. Hadn’t I learned yet that hardware is too hard? What they didn’t see was a hardware scene evolving rapidly in contrast to its glacial reputation. The old hard-knocks hardware playbook has given way to a new, vastly more exciting one; emerging to meet civilization-level opportunities, like climate, that software can resolve alone.  

Today when I work with with founders in the HAX program, it is normal to build incredible (but feasible) plans to “reduce the world’s energy consumption by 10%” from Seppure, “eliminate all waste in the apparel supply chain” at Unspun or “make global battery recycling 5x more profitable” with Green Li-ion

Ambitions like those reflect emerging mega-trends in the global economy centered around demands to decarbonize, modernize infrastructure, secure supply chains and fully digitize traditional industries.

The tools and technology to move forward — from machine learning to sensors to nano materials — are more powerful and affordable than ever, which allows for higher ambition and far faster time to market. Visionaries like Bill Gates and Elon Musk have taken note, institutional giants like Blackrock are piling pressure on climate negligence and we witnessed the rise of HAX’s like-minded communities The Engine, New Lab and Greentown Labs. 

The scope of this new world is so broad, in fact, that we no longer define HAX’s thesis around “hardware”; we call it Hard Tech, both because it’s hard, as in difficult, as well as moving far beyond the initial scope of early 2010s personal hardware devices and around-the-home IoT. 

What’s emerging all around us is a new generation of hard-tech founders, investors and technology with a few early signals for the hard-tech tidal wave coming. 

If “software eats the world,” hard tech gives it teeth

The last three decades have been defined by “software eating the world,” and it’s been feasting on the lowest hanging fruit. But our screen-based, server-based digital world is increasingly limited to marginal gains in niche markets. As our friends at Ubiquity Ventures say, it’s time for “Software Beyond the Screen”.  

Affordable robotics, AI-driven sensor fusion, uninterrupted connectivity and super materials are merging into the technology stack to unlock massive new tranches of value for customers. Many HAX companies are operating 80%+ gross margin businesses that not long ago industry experts said only SaaS companies could achieve. Even more, the hardware + software combination can tackle more significant problems across industries than software alone ever could.

Learn from Tesla: Take big shots at big industries

When industry experts look to explain the unexpected rise of Tesla in the past 10 years to become a mass production automaker, they point to Tesla’s “software-led” approach. The truth is Tesla’s ascent centered on intense hardware innovation in batteries, motors, manufacturing and distribution models.  

This same equation is playing out in dominant, multitrillion-dollar industries such as energy, construction and agriculture. Investors on the hunt for opportunities in these categories will need to be bold, but will find disproportionate returns if they include hard tech. To move the world forward, we will need to take big shots like Commonwealth’s Fusion Energy nuclear fusion reactors, Boston Metal’s emissions free steel or Deepspin’s  low-cost MRIs. Just as with Tesla and transportation, software may kick off opportunities, but industrial revolutions come from innovation in the physical world.

New doors open for B2B sales

Addressing these massive opportunities requires partners and customers at industrial scale. Startups can’t afford to go it alone. The traditional advice for startups is to avoid corporate partners because they are scary, slow moving beasts that can’t work at startup pace. The reality is that large corporations have noticeably increased their appetite for emerging hard-tech startups and many have set up pipelines to engage with higher risk, more complex technology. In the last few years the number of corporations doing venture deals has more than doubled and many more are priming for the industry-wide upheavals already in motion. 

This enables startups to get inside corporate, B2B markets more quickly, which accounts for many B2B hard-tech startups scaling to millions in revenue at a pace once formerly limited to their software-only peers. It also accounts for the surge in VC capital to those same firms as well as the shift in HAX’s own make-up. Since our start in 2012, the HAX B2B portfolio has grown from 10% to 70% of our total investments, and that includes a majority of fastest growing early-stage companies. 

Tooling hard-tech companies is easier and cheaper

The technologies and strategies for spinning up early-stage, hard-tech startups have advanced by orders of magnitude in less than a decade. The price of 3D printers had dropped from $20,000 to $200. Printed circuit boards ship around the world in just days (even amongst wild supply chains shortages). Hundreds of thousands of suppliers exist online ready to make and ship components overnight. It’s reasonable for an early-stage founder on a slim budget to build an impressive and revenue-generating prototype. As a result, hard-tech founders can zero in on their core technology development and take for granted many things formerly considered really “hard.” Similar to the rise of APIs, AWS and “no-code” that unleashed new applications for software, similar revolutions are the backbone of the new hard tech world. 

PhDs are the future icons

Because hard-tech commercialization is no longer a Quixotic quest, more PhDs and post-docs are signing up to start companies. It’s routine for a HAX startup to have a PhD founder, or one that spent years working on a doctoral thesis (more than 40% SOSV Climate 100 companies have at least one PhD founder). They are responding to more entrepreneurial nudges directly from universities, but also are inspired by the call for big, civilization-level technology challenges, like climate. 

It’s not an easy road for investors because, almost by definition, the work that comes off a university lab bench is going to be very advanced, somewhat speculative and lacking a proven market. In other words, hard-tech startups are usually in very deep waters, and expert leadership and insight are at a premium. As a result, many VCs are picking up scientists and engineers for their investment teams lest they risk missing out on the next generation of great founders and industry-shifting startups. We are at the start of a golden era of opportunity for our best minds in science and technology. 

These highlights from HAX’s emerging Hard Tech rise are not a prediction of years to come, but a reflection of what the HAX team sees happening in our portfolio every day. We are stunned by the quality of ideas, ambition of the founders and the speed of execution against projects that not many years ago were written off as impossible. Sure, it’s still hard, but more entrepreneurs and investors are moving into hard tech as it becomes an inevitable force for the coming decades. 

Disclosure: Former TechCrunch COO Ned Desmond is now senior operating partner at SOSV.

UBS investment makes Byju’s the most valuable startup in India

Edtech giant Byju’s has become the most valuable startup in India after raising about $350 million in a new tranche of investment from UBS Group and Zoom founder Eric Yuan, Blackstone and others that valued the Bangalore-based firm at $16.5 billion (post-money).

In a new filing, Byju’s revealed that scores of investors including Abu Dhabi government fund ADQ and Phoenix Rising had together invested about $350 million in the startup. The new valuation helps Byju’s surpass Paytm, which was last valued at $16 billion, for the crown position in the Indian startup ecosystem. (Paytm is currently working on exploring the public markets and eyeing to raise as much as $3 billion and eyeing a valuation of up to $30 billion.)

The new tranche of investment is part of a larger round that Byju’s kickstarted earlier this year and is looking to secure over $1.5 billion. Some of its recent investors also include B Capital Group and hedge fund XN. The startup was valued at $11 billion late last year, and $5.75 billion in July 2019.

The startup plans to use the fresh capital, in part, to acquire more startups. Byju’s, which acquired Indian physical coaching institute Aakash for nearly $1 billion earlier this year, is conducting due diligence to buy and online learning startup Toppr and has also engaged with U.S.-based Epic, TechCrunch reported earlier this year.

Byju’s prepares students pursuing undergraduate and graduate-level courses, and in recent years it has also expanded its catalog to serve all school-going students. Tutors on the Byju’s app tackle complex subjects using real-life objects such as pizza and cake.

The pandemic, which prompted New Delhi to enforce a months-long nationwide lockdown and close schools, accelerated its growth, and those of several other online learning startups including Unacademy and Vedantu.

As of early this year, Byju’s said it had amassed over 80 million users, 5.5 million of whom are paying subscribers. Byju’s, which is profitable, generated revenue of over $100 million in the U.S. last year, Deborah Quazzo, managing partner of GSV Ventures (which has backed the Indian startup), said at a session in March held by Indian venture fund Blume Ventures.

The startup executives said at a UBS event earlier this year that Byju’s current revenue run rate is $800 million, a figure they expect will reach $1 billion in the next 12-15 months. It has also accelerated its international expansion plans in recent months.

SOSV, the global venture firm, just closed a $100 million fund to back its maturing startups

Sean O’Sullivan, the founder of the global venture outfit SOSV, has slowly but steadily built up a sizable operation over the years.

SOSV started off as a family office, investing the capital of O’Sullivan after he cofounded two companies, including MapInfo, an outfit that went public in 1994 before Pitney Bowes acquired it years later, in 2007. The seed-stage investing outfit has since raised three more funds, including a $277 million early-stage fund that it closed in 2019 and is actively investing from right now.

Now, to complement those funds, the organization has raised $100 million for what it’s calling a “select fund” that’s meant to help SOSV maintain its pro rata stake in some of its breakaway portfolio companies.

Because of other tools in the market, SOSV wasn’t completely hamstrung until now. Instead, SOSV has, on occasion, assembled a special purpose vehicle to re-invest in certain of the startups it has backed. But O’Sullivan says these were relatively small SPVs — think $2 million in size or less. The new fund, he says, is expected to write checks of between $2 million and $5 million and even up to $10 million — or 10% of the fund, per SOSV’s agreement with its investors.

Certainly, the new fund also gives startups even more reason to work with SOSV, which tends to write its seed checks to first-time founders, who O’Sullivan observes are often overlooked — wrongly —  by investors in favor of repeat founders.

He points to Apple, Microsoft, Facebook, Google and Alibaba, noting that landscape would look rather different without them. He says experienced the phenomenon himself when he cofounded a company (NetCentric) after MapInfo. “People were just lining up to invest,” he says. “It was so easy to raise the funds without anything other than a business plan, and these days, you don’t even need one of those.”

That doesn’t mean SOSV will get as big a bite as it might like in every deal. Though SOSV has enjoyed success by betting on new entrepreneurs — it was among the first investors in FormLabs, for example, a company now valued at $2 billion; it also backed JUMP, the bike-share startup that Uber acquired in 2018 — a $100 million fund is small by current standards. SOSV could well find itself competing against players that have billions of dollars to deploy and which are writing bigger checks to younger companies at a velocity never before seen in the world of venture capital.

It’s not an absurd concern, agrees O’Sullivan. He says he saw some sharp elbows just this week, in fact. Part of a $100 million-plus round was coming together, and a firm that O’Sullivan declined to mention didn’t want to make room for the startup’s Series B or A investors because it wanted to meet a certain equity threshold.

O’Sullivan suggests the earlier investors acquiesced. (“They’re giving us a multi-billion valuation” and are also “trying to buy secondaries from existing investors,” he explains, while adding that SOSV would generally prefer to hold its shares through an IPO.)

Still, he suggests there’s no need to worry about SOSV. While it’s willing to go with the flow, O’Sullivan says that in “most cases, there’s enough to go around for the previous investors.”

It’s simply “good protocol for the late-stage investors [to make room] if they want to continue to have us introducing deals to them.”

Put another way, SOSV doesn’t need to manage a megafund; it has leverage all the same.

The air taxi market prepares to take flight

Twelve years ago, Joby Aviation consisted of a team of seven engineers working out of founder JoeBen Bevirt’s ranch in the Santa Cruz mountains. Today, the startup has swelled to 800 people and a $6.6 billion valuation, ranking itself as the highest-valued electric vertical take-off and landing (eVTOL) company in the industry.

As in any disruptive industry, the forecast may be cloudier than the rosy picture painted by passionate founders and investors.

It’s not the only air taxi company to reach unicorn status. The field is now dotted with new or soon-to-be publicly traded companies courtesy of mergers and special purpose acquisition companies. Partnerships with major automakers and airlines are on the rise, and CEOs have promised commercialization as early as 2024.

As in any disruptive industry, the forecast may be cloudier than the rosy picture painted by passionate founders and investors. A quick peek at comments and posts on LinkedIn reveals squabbles among industry insiders and analysts about when this emerging technology will truly take off and which companies will come out ahead.

Other disagreements have higher stakes. Wisk Aero filed a lawsuit against Archer Aviation alleging trade secret misappropriation. Meanwhile, valuations for companies that have no revenue yet to speak of — and may not for the foreseeable future — are skyrocketing.

Electric air mobility is gaining elevation. But there’s going to be some turbulence ahead.

Big goals and bigger expenses

Taking an eVTOL from design through to manufacturing and certification will likely cost about $1 billion, Mark Moore, then-head of Uber Elevate, estimated in April 2020 during a conference held by the Air Force’s Agility Prime program.

That means in some sense, the companies that will come out on top will likely be the ones that have managed to raise enough money to pay for all the expenses associated with engineering, certification, manufacturing and infrastructure.

“The startups that have successfully raised or that will be able to raise significant amounts of capital to get them through the certification process … that’s the number one thing that’s going to separate the strong from the weak,” Asad Hussain, a senior analyst in mobility technology at PitchBook, told TechCrunch. “There’s over 100 startups in the space. Not all of them are going to be able to do that.”

Just consider some of the expenses accrued by the biggest eVTOLs last year: Joby Aviation spent a whopping $108 million on research and development, a $30 million increase from 2019. Archer spent $21 million in R&D in 2020, according to regulatory filings. Meanwhile, Joby’s net loss last year was $114.2 million and Archer’s was $24.8 million, though, of course, neither company has brought a product to market yet. Operating expenses will likely only continue to grow into the future as companies enter into manufacturing and deployment phases.

What that means for the future of the industry is likely two things: more SPAC deals and more acquisitions.

Mobility companies, including those working on electrified transport, are often pre-revenue and have capitally intensive business models — a combination that can make it difficult to find buyers in a traditional IPO. SPACs have become increasingly popular as a shorter, less expensive path to becoming a public company. SPACs have also historically received less scrutiny than IPOs. Should the U.S. Securities Exchange Commission start to take a closer look at SPAC mergers in the future, it may impair the ability of other air taxi companies to go public this way, Hussain said.

That means market consolidation is nearly guaranteed, as smaller companies may find it more advantageous to sell than continue to raise more capital. It’s already begun: At the end of April, eVTOL developer Astro Aerospace announced the acquisition of Horizon Aircraft.

Horizon cited “greater access to capital” as one of the many benefits of the transaction, and other companies will likely find the buy or sell route to be the most beneficial on the road to commercialization. And just last week, British eVTOL Vertical Aerospace, which has an order for 150 aircraft from Virgin Atlantic, said it would go public via a merger with Broadstone Acquisition Corp. at an equity value of around $2.2 billion.

Michael Brown, the new chair of the powerful lobbying group NVCA, shares his agenda

Michael Brown, a longtime general partner with Battery Ventures, was just elected to the role of chairman of the National Venture Capital Association three years after joining its board of directors. Earlier this week, we caught up with Brown to ask about his new, year-long role with the 48-year-old trade group — and what issues he sees as top of mind right now for the many American VCs he is now representing.

TC: VCs are always concerned about tax treatments, but these are obviously even more top of mind, given Joe Biden’s proposal last month to raise the top rate on long-term capital gains to 39.6% from 20%. What do you think of that proposal?

MB: So you’re gonna hit me right in the face with a two-by-four on taxes in the first question, I love it.

This is the NVCA’s position, this is my personal position and if you ask most venture capitalists, this position is pretty widely held: what Biden is trying to do with the Build Back Better Plan . . . we are fully supportive of that and we are actively working with both the administration and policymakers in Congress to get done a lot of what he wants to get done. A lot of what he’s talking about — whether it’s the physical infrastructure, like bridges, roads, planes; or the digital infrastructure, meaning internet broadband access more broadly and cybersecurity; or climate infrastructure, [around] how we transition the economy and the country to a greener carbon-neutral or even carbon-negative world — venture capital is required to fund the entrepreneurs to do all of those things . . . It’s really almost hand in glove. He wants this to happen, we want it to happen, and we can help facilitate that [because] it’s not going to come from corporate America, we know that.

TC: To your point, the money does have to come from somewhere. Is there a number at which you would feel more comfortable?

MB: I don’t want to speak on behalf of the NVCA around what is our target rate. I will say that people in Congress and other talking heads talk about the revenue-maximizing rate in and around 25% to 28% . . . and I think that’s kind of where people feel it is reasonable to go to. What we do believe is that long-term investment should be rewarded and not disincentivized through tax structure.

What happened under the Trump administration, where they extended the time frame to three years [from one year] before you could receive long-term capital gains treatment, we were fine with that because we’re investing for longer than three years and I think having some time component to decide what is long term and what is not worked very well.

TC: Another topic that comes up time and again is the IPO market. It sure seems healthy right now. Will you have any suggestions for the current administration relating to taking companies public?

MB: We are obviously very supportive of the capital markets. That being said, if you look at the number of public companies today versus the number of public companies 20 years ago — and this is not just true of technology companies —  it’s roughly half the number. We think that’s a function of a few things. One is just how the capital markets function today — the ability to get research, etcetera, caused by [specific] legislation; regulatory issues; and just the burdens that a public company have versus a private company. You’ve also got other [rules] that have been passed over the last few years that impact the accessibility of the capital markets for private companies, and that’s why you’re seeing companies raise more money and stay private longer, which is not to the benefit of everyone.

TC: What reform here would you press for most immediately?

MB: Going back a ways now, in 2012, there was a piece of legislation called the Jobs Act that helped open up the public markets by addressing some of the risks and costs associated with going public and the regulatory burden. That needs to be updated. That’s something in particular that if we can modify it and make it current, it will help create that on ramp for smaller companies to access the public markets sooner and earlier.

TC: What do you think of SPACs, these special purpose acquisition companies that are being raised to take companies public, including, oftentimes by those companies’ own earlier investors?

MB: It’s good to have more alternatives and more ways for companies to access capital markets. That being said, those vehicles need to be appropriately regulated, and SPACs is one area where regulation has not kept up with kind of the realities on the ground. I think Chairman Gensler and even before him in the previous administration, [the agency] also felt like there needs to be better controls on the stock market.

One of the benefits of a SPAC is the ability to offer forward guidance. You can’t have that in an IPO or even a direct listing and I would not be surprised if the SEC comes out with either revised guidance and or a complete restriction on the ability to provide forward guidance. There’s probably something that should be done there, but we’ll see.

As for conflicts of interest related to the economics centered on investors buying companies within their own portfolio, I don’t know if there’ll be regulatory remedies for the conflicts. The SEC has the ability to review any of these [deals] if they want, but in the meantime, we’re seeing the market actually changing the economic terms. You’re seeing reduced promotes by the SPAC sponsors. You’re seeing reduced warrant coverage or even the elimination of warrant coverage. You have some SPACs that look like venture funds, where there’s really no promote but instead a success fee if the SPAC completes the merger and does well. You’re also seeing the vesting of the sponsor interest over a period of time, so they’re locked in over a longer-term horizon. The market is figuring out a lot on its own.

TC: The NVCA has long been pro-immigration. What are some of your proposals on this front? What would you like to see change or instituted?

MB: We took a very aggressive stance in the previous administration around the International Entrepreneur Rule and even [successfully] sued the Trump administration to have them enforce or at least roll out the rule, which enables the entrepreneur to come to the U.S. as long as they have a minimum number of dollars in financing to build their business here.

Look, we’re in a competitive market. If you look at venture capital 15 or 20 years ago, 85% of the dollars that were invested went to companies in the United States, and a lot of those went to companies founded by immigrant entrepreneurs. Today, that number stands at just over 50% [including because] founders who are coming here and getting educated and going back home and founding a company.

We want founders to start their companies here and grow their companies here to create jobs and spread the wealth. The International Entrepreneur Rule was a stopgap to ultimately what is called the Startup Visa, an official visa status that would enable entrepreneurs to come in and give them certainty that they can stay in the United States and start a company and build it. This is something that’s been in the works for a long time, and we’re hoping that Congresswoman Zoe Lofgren out of the 19th District of California will reintroduce this visa bill soon, so that we can put this as part of the Build Back Better Plan, because we need immigrant entrepreneurs to come here and start companies and employ the broader U.S. population.

If you think about the technologies that we used to get through COVID it was Zoom, it was Moderna, it was even Pfizer, dating back 100 years. All three were founded by immigrant entrepreneurs who came to the United States to start their business.

TC: Is this a role you volunteered to do? Is there a game of hot potato that happens amid the NVCA’s board of directors every year?

MB: [Laughs.] It is not just a hot potato that got passed. [NVCA president and CEO] Bobby Franklin and the outgoing chair discuss who they think would be good based on participation in board meetings and how engaged someone is with the things the NVCA is doing in Washington and who can be a good advocate for the industry and for the entrepreneurial ecosystem.

I think it’s a pretty cool time to have this job; intellectually, this is going to be super interesting, and it’s super important to the industry [because] these are big policy initiatives and we’re a very important part of the solution here, and that needs to be well-known and well-understood by the administration and Congress. That’s our mission.

Daily Crunch: Toptal sues rival Andela for allegedly making ‘a perfect clone’ of its freelancer marketplace

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello and welcome to Daily Crunch for June 11, 2021. As a small note I am off next week, so my dear friend and TechCrunch lifer Henry Pickavet will be taking over. He’s more fun and a better writer than I am, so consider him a temporary upgrade. See you in a week or so! — Alex

p.s. Cheap tickets to TC Early Stage 2021: Marketing & Fundraising are nearly gone. Flagging in case you needed a ticket and also like saving money. 

The TechCrunch Top 3

  • Technology companies are trying to figure out post-pandemic work: Minor tech CEOs look to major tech companies for signals about what to do. Google, for example, is a famous cultural bellwether for other tech firms. But when it comes to post-pandemic work every tech company — big and small — is scrambling to come up with a plan that will keep control-oriented managers happy and staff from quitting en masse. TechCrunch has the rundown you need on what the majors are deciding.
  • Didi’s going public! If you thought that the Uber and Lyft IPOs were fun, oh boy is this good news for you. TechCrunch has notes on the venture capital winners’ list and more on the company’s economics for your reading pleasure.
  • The tech labor market is brutal: So brutal, in fact, two companies that help their customers find remote, freelance technology talent are now in a legal fight. Toptal is taking Andela to court over “the theft of trade secrets in pursuit of a perfect clone of its business,’” TechCrunch reports.

Startups and VC

  • Vertical SaaS is still hot: How do we know? Fresha just raised $100 million. The company provides software for hair and nail salons, yoga instructors, and other health, beauty, and wellness SMBs. Vertical SaaS companies can often have both attractive software incomes and strong payments revenues.
  • More money for neobanks: My general philosophy that there is infinite money available for neobanking startups around the world is holding up as TechCrunch broke news that “Bangalore-based neobank Open is in advanced stages of talks to raise about $100 million” from possibly Temasek and General Atlantic. The neobank could be worth $600 million after the deal, TechCrunch reported.
  • The edtech boom is not over: Sure, COVID-19 is receding in some countries, and economic activity is rebounding globally, but that’s not stopping edtech companies that got a pandemic bump from raising more cash. This week it’s Indian edtech company Classplus, which could raise $30 million from Tiger Global we reported, at a valuation of up to $250 million. That’s real money.
  • Neither is global interest in funding more insurtech startups: That’s what TechCrunch learned chatting up a bunch of EU-based VCs, who said that the European insurtech market is super busy, if perhaps not quite as frenetic as the market for insurance technology startups in America.

Insurtech is hot on both sides of the Atlantic

This morning, The Exchange dug into the EU insurtech market, interviewing European VCs and collating the biggest recent rounds to get a temperature of the waters across the pond:

  • Alex Timm, CEO, Root
  • Dan Preston, CEO, Metromile
  • Luca Bocchio, partner, Accel
  • Florian Graillot, investor, Astorya.vc
  • Stephen Brittain, director and founder, Insurtech Gateway

Several European-based insurtech startups entered unicorn territory this year, such as Bought By Many, which offers pet insurance, London-based Zego and Alan, a French startup that raised a $220 million round.

According to Brittain, EU startups in this sector are “still at the very early stages of innovation,” having only shown “a fraction of what’s possible” in a market that is “as large as banking.”

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Big Tech Inc.

  • Everyone sucks at cybersecurity: This week’s its Volkswagen, via a third-party vendor. The vendor in question exposed 3.3 million customers’ data. At some point the fines for this sort of error have to rise to the level of pain that will force corporations to stop fucking up. Enough is enough.
  • Apple hires from Canoo for car can-do: This week Apple confirmed that it hired “former co-founder and CEO [Ulrich Kranz] of electric vehicle company Canoo. Though the company declined to say what he’s working on. It’s 1,000% a new cube-shaped, six-screen iBloc, right? Without wheels?
  • Sticking to the Apple beat, the company announced its “Design Award” winners. TechCrunch has the run-down you need here.

TechCrunch Experts: Growth Marketing

Illustration montage based on education and knowledge in blue

Image Credits: SEAN GLADWELL (opens in a new window) / Getty Images

TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this survey along to your clients; we’d like to hear about why they loved working with you.

The results from this survey will help influence our editorial coverage of growth marketing. Today, we have a guest column from Fuel Capital CMO Jamie Viggiano: 5 questions startups should consider before making their first marketing hire.

The rise of robotaxis in China

AutoX, Momenta and WeRide took the stage at TC Sessions: Mobility 2021 to discuss the state of robotaxi startups in China and their relationships with local governments in the country.

They also talked about overseas expansion — a common trajectory for China’s top autonomous vehicle startups — and shed light on the challenges and opportunities for foreign AV companies eyeing the massive Chinese market.


Enterprising governments

Worldwide, regulations play a great role in the development of autonomous vehicles. In China, policymaking for autonomous driving is driven from the bottom up rather than a top-down effort by the central government, observed executives from the three Chinese robotaxi startups.

Huan Sun, Europe general manager at Momenta, which is backed by the government of Suzhou, a city near Shanghai, said her company had a “very good experience” working with the municipal governments across multiple cities.

In China, each local government is incentivized to really act like entrepreneurs like us. They are very progressive in developing the local economy… What we feel is that autonomous driving technology can greatly improve and upgrade the [local governments’] economic structure. (Time stamp: 02:56)

Shenzhen, a special economic zone with considerable lawmaking autonomy, is just as progressive in propelling autonomous driving forward, said Jewel Li, chief operation officer at AutoX, which is based in the southern city.

Facebook buys game studio BigBox VR

Facebook has bought several virtual reality game studios over the past couple of years, and they added one more to their portfolio Friday with the acquisition of Seattle-based BigBox VR.

The studio’s major title, “Population: One,” was one of the big post-launch releases for Facebook’s Oculus Quest 2 headset and is a pretty direct Fortnite clone, copying a number of key gameplay techniques while adapting them for the movements unique to virtual reality and bringing in their own lore and art style.

As has been the case for most of these studio acquisitions, terms weren’t disclosed. BigBox raised $6.5 million according to Crunchbase, with funding from Shasta Ventures, Outpost Capital, Pioneer Square Labs and GSR Ventures.

“POP: ONE stormed onto the VR scene just nine months ago and has consistently ranked as one the top-performing titles on the Oculus platform, bringing together up to 24 people at a time to connect, play, and compete in a virtual world,” Facebook’s Mike Verdu wrote in a blog post.

It’s not unusual for a gaming hardware platform owner to build up their own web of studios building platform exclusives, but in the VR world things are a little different, given that Facebook has few real competitors.

While many of the developers inside Oculus Studios continue to build titles for Valve’s Steam store, which are accessible with third-party headsets, most non-Facebook VR platforms seem to be a shrinking piece of the overall VR pie, having been priced out of the market by Facebook’s aggressive pursuit of a mass market audience. Facebook’s Oculus Quest 2 retails for $299 and the company has said that it outsold all of its previous devices combined in its first few months.

In April, Facebook acquired Downpour Interactive, maker of the VR shooter “Onward.”

Extra Crunch roundup: EU insurtech, 30 years of ‘Crossing the Chasm,’ embedded finance’s endgame

This morning, Anna Heim and Alex Wilhelm dug into the EU insurtech market, interviewing European VCs and collating the biggest recent rounds to take the temperature of the waters across the pond:

  • Alex Timm, CEO, Root
  • Dan Preston, CEO, MetroMile
  • Luca Bocchio, partner, Accel
  • Florian Graillot, investor, Astorya.vc
  • Stephen Brittain, director and founder, Insurtech Gateway

Several European-based insurtech startups entered unicorn territory this year, such as Bought By Many, which offers pet insurance; London-based Zego; and Alan, a French startup that raised a $220 million round.

According to Brittain, EU startups in this sector are “still at the very early stages of innovation,” having only shown “a fraction of what’s possible” in a market that is “as large as banking.” Interestingly, he predicted that AI will play a larger role in the future as companies deploy it for fraud detection, improved customer experiences and processing claims more quickly.

“We are fully expecting the next generation of AI-driven business to unlock real-time risk analysis, pricing and claims resolution in the next few years,” he said.

Thanks very much for reading Extra Crunch; I hope you have a safe, relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

What do these 4 IPOs tell us about the state of the market?

Earlier this week, The Exchange assessed the looming Monday.com IPO before reading the tea leaves about that flotation and three others to sum up the overall state of the market.

So what do the Marqeta, Monday.com, Zeta Global and 1stDibs debuts tell us? We may have been too conservative.

Toast’s Aman Narang and BVP’s Kent Bennett on how customer obsession is everything

Image Credits: Bessemer Venture Partners / Toast

On a recent episode of Extra Crunch Live, we spoke to Toast founder Aman Narang and Kent Bennett of Bessemer Venture Partners about how they came together for a deal, what makes the difference for both founders and investors when fundraising, and the biggest lessons they’ve learned so far.

The episode also featured the Extra Crunch Live Pitch-Off, where audience members pitched their products to Bennett and Narang and received live feedback.

Extra Crunch Live is open to everyone each Wednesday at 3 p.m. EDT/noon PDT, but only Extra Crunch members are able to stream these sessions afterward and watch previous shows on-demand in our episode library.

AI startup investment is on pace for a record year

Alex Wilhelm and Anna Heim solicited feedback from investors to get a temperature on the market for AI startup investments.

“The startup investing market is crowded, expensive and rapid-fire today as venture capitalists work to preempt one another, hoping to deploy funds into hot companies before their competitors,” they write. “The AI startup market may be even hotter than the average technology niche.”

But that’s not surprising. The Exchange was on it.

“In the wake of the Microsoft-Nuance deal, The Exchange reported that it would be reasonable to anticipate an even more active and competitive market for AI-powered startups,” Alex and Anna note. “Our thesis was that after Redmond dropped nearly $20 billion for the AI company, investors would have a fresh incentive to invest in upstarts with an AI focus or strong AI component; exits, especially large transactions, have a way of spurring investor interest in related companies.”

Their expectation is coming true: Investors reported a fierce market for AI startups.

Dear Sophie: What is a diversity green card and how do I apply for one?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I started a tech company about two years ago, and ever since I’ve dreamed of expanding my company in the United States.

I would love to have a green card. Someone mentioned that I should apply for a diversity green card. Would you please provide me with more details about it and how to apply?

— Technical in Tanzania

How to start a company in 4 days

Turtle (real) with a rocket on the back, a match (real flame) is about to ignite it. No turtles were harmed in the making of this stock image.

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

Pulley founder and three-time YC alum Yin Wu offers a tactical guide to getting a startup running in four days. Yes, just four days.

“The logistics of setting up a startup should be simple, because over the long run, complicated equity setups and cap tables cost more money in legal fees and administration time,” Wu notes.

Read on for guidance on how to get your business going in less than a week.

Health clouds are set to play a key role in healthcare innovation

Health clouds are important for innovation in healthcare

Image Credits: Natali_Mis / Getty Images

Innovaccer founder and CEO Abhinav Shashank and CTO Mike Sutten write in a guest column that the U.S. healthcare industry is in the middle of a massive transformation.

This shift, they write, “is being stimulated by federal mandates, technological innovation, and the need to improve clinical outcomes and communication between providers, patients and payers.”

Improving healthcare now means we need to process tremendous amounts of healthcare data. How do we do it? The cloud, which “plays a pivotal role in meeting the current needs of healthcare organizations.”

What SOSV’s Climate Tech 100 tells founders about investors in the space

Climate tech presents a trillion-dollar opportunity

Image Credits: MrJub / Getty Images

SOSV’s Benjamin Joffe and Meghan Hind round up a “who’s who” from the venture capital firm’s SOSV Climate Tech 100, a list of the best startups addressing climate change that SOSV has supported from the very beginning.

“What can founders learn from the list about climate tech investors? In other words, who invested in the Climate Tech 100?” they ask.

The fintech endgame: New supercompanies combine the best of software and financials

Image Credits: Donald Iain Smith (opens in a new window) / Getty Images

Now that we can transact from anywhere, a new, hybrid class of software companies with embedded financial services are scooping up consumers — and investors are following the action.

Using data from a Battery Ventures report about “the intersection of software and financial services,” this post examines why these companies can be so hard to value and offers a framework for better understanding their business models and investor appeal.

After 30 years, ‘Crossing the Chasm’ is due for a refresh

Hoover Dam area, Mike O'Callaghan, Pat Tillman bridge.

Image Credits: Grant Faint (opens in a new window) / Getty Images

Geoffrey Moore’s “Chasm,” a framework for marketing technology products that has been one of the canonical foundational concepts to product-market fit for three decades, needs a bit of an upgrade, Flybridge Capital’s Jeff Bussgang writes.

“I have been reflecting on why it is that we venture capitalists and founders keep making the same mistake over and over again — a mistake that has become even more glaring in recent years,” he writes.

Bussgang goes on to consider the Chasm — and propose tweaks for thinking about market size in the modern era.