Category: Tech news

Most founders fall into an extremely common trap: Just because you produced outstanding results for the last round of investors doesn’t mean new investors will believe you. This new cohort hasn’t seen that performance firsthand, and they have no reason to trust you yet.

As a founder approaching your next round, it’s common to wonder, “How do I get this new group of investors to trust that I will perform?”

In our experience, founders who fundraise successfully are great at building relationships, and they usually deliver what we call “the pre-pitch.” This is the “we actually aren’t looking for money; we just want to be friends for now” pitch that gets you on an investor’s radar so that when it’s time to raise your next round, they’ll be far more likely to answer the phone because they actually know who you are.

But the concept of the pre-pitch goes deeper than just having potential investors be aware of your existence. Building relationships with potential future investors requires you to think less like a founder and more like a marketer — much of the relationship heavy lifting comes long before it’s time to ask for a capital commitment.

There’s a host of advantages to the pre-pitch approach:

• Good practice: You’re not asking for money. Instead, you’re offering a sneak peek. Since your relationship-builder pre-pitch doesn’t have millions on the line, you’ll invariably be less anxious, which leads to better relationships. Remember: If it’s not a good fit, who cares?
• Candid feedback: When you’re not asking for money, you’re more likely to receive honest feedback that you might not get in a high-stakes environment.
• Set the baseline: You should go over where you’re currently at, why it’s actually not time to raise capital quite yet (the inverse of “Why Now”), and what you still have to accomplish until the time is right.
• Performance-based trust: Put your performance where your mouth is by showing your potential investor where you are today and what you expect to do in the short term. Later on, you can prove to them that you achieved what you said you would.

7 ways to build relationships with VCs

Now you’re probably wondering, “What the heck do I say to build a good relationship with that next-round investor?” Here are a few notes on how to approach the pre-pitch:

Seek the relationship, not the money

Acknowledge you’re early, but mention that you think it could potentially be a good fit later on. State it up front that you’re seeking a relationship and want to find out if you could eventually be a good fit for one another. Don’t sneak in an ask; let the relationship blossom organically.

Here’s an example: “We’re actually not raising yet, and we’re probably too early for you. But I think this is something you might be very interested in, and thought it made sense to reach out, open up a relationship and see if there might be a fit.”

Don’t waste time

Since 2017, Microsoft has offered its Office suite to Chromebook users via the Google Play store, but that is set to come to an end in a few short weeks.

As of September 18, Microsoft is discontinuing support for Office (which includes Word, Excel, PowerPoint, OneNote and Outlook) on Chromebook. Microsoft is not, however, abandoning the popular mobile device altogether. Instead of an app that is downloaded, Microsoft is encouraging users to go to the web instead.

“In an effort to provide the most optimized experience for Chromebook customers, Microsoft apps (Office and Outlook) will be transitioned to web experiences (Office.com and Outlook.com) on September 18, 2021,” Microsoft wrote in a statement emailed to TechCrunch. 

Microsoft’s statement also noted that “this transition brings Chromebook customers access to additional and premium features.” 

The Microsoft web experience will serve to transition its base of Chromebook users to the Microsoft 365 service, which provides more Office templates and generally more functionality than what the app-based approach provides. The web approach is also more optimized for larger screens than the app.

In terms of how Microsoft wants Chromebook users to get access to Office and Outlook, the plan is for customers to, “…sign in with their personal Microsoft Account or account associated with their Microsoft 365 subscription,” according to the statement. Microsoft has also provided online documentation to show users how to run Office on a Chromebook.

Chromebooks run on Google’s Chrome OS, which is a Linux-based operating system. Chromebooks also enable Android apps to run, as Android is also Linux based, with apps downloaded from Google Play. It’s important to note that while support for Chromebooks is going away, Microsoft is not abandoning other Android-based mobile devices, such as tablets and smartphones.

For those Chromebook users that have already downloaded the Microsoft Office apps, the apps will continue to function after September 18, though they will not receive any support or future updates.

With more than 270,000 stickers, Stipop’s library of colorful, character-driven expressions has a little something for everyone.

The company offers keyboard and social app stickers through ad-supported mobile apps on iOS and Android, but it’s recently focused more on providing stickers to developers, creators and other online businesses.

“We were able to gather so many artists because we actually began as our own app that provided stickers,” Stipop co-founder Tony Park told TechCrunch. The team took what they learned from running their own consumer-facing app — namely that collecting and licensing hundreds of thousands of stickers from artists around the world is hard work — and adapted their business to help solve that problem for others.

Stipop was the first Korean company to go through Yellow, Snapchat’s exclusive accelerator. The company is also part of Y Combinator’s Summer 2021 cohort.

Stipop’s sticker library is accessible through an SDK and an API, letting developers slot the searchable sticker library into their existing software. The company already has more than 200 companies that tap into its huge sticker trove, which offers a “single-day solution” for a process that would otherwise necessitate a lot more legwork. Stipop launched a website recently that helps developers integrate its SDK and API through quick installs.

“They can just add a single line of code inside their product and will have a fully customized sticker feature [so] users will be able to spice up their chats,” Park said.

Park points out that stickers encourage engagement — and for social software, engagement means growth. Stickers are a playful way to send characters back and forth in chat, but they also pop up in a number of other less obvious spots, from dating apps to e-commerce and ridesharing apps. Stipop even drives the sticker search in work collaboration software Microsoft Teams.

The company has already partnered with Google, which uses Stipop’s sticker library in Gboard, Android Messages and Tenor, a GIF keyboard platform that Google bought in 2018. That partnership drove 600 million sticker views within the first month. A new partnership between Stipop and Coca-Cola on the near horizon will add Coke-branded stickers to its sticker library and the company is opening its doors to more brands that understand the unique appeal of stickers in messaging apps.

Park says that people tend to compare stickers and gifs, two ways of wordlessly expressing emotion and social nuance, but stickers are a world unto themselves. Stickers exist in their own creative universe, with star artists, regional themes and original casts of characters that take on a life of their own among fans. “Sticker creators have their own profession,” Park said.

Visual artists can also find a lot of traction releasing stickers, even without sophisticated illustrations. And since they’re all about meaning rather than refinement, non-designers and less skilled artists can craft hit stickers too.

“Stickers are great for them because it [is] so easy to go viral,” Park said. The company has partnered with 8,000 sticker creators across 25 languages, helping those artists monetize their creations and generate income based on how many times a sticker is shared.

Stickers command their own visual language around the world, and Park has observed interesting cultural differences in how people use them to communicate. In the West, stickers are often used in place of text, but in Asia, where they’re used much more frequently, people usually send stickers to enhance rather than replace the meaning of text.

In East Asia, users tend to prefer simple black and white stickers, but in India and Saudi Arabia, bright, golden stickers top the trends. In South America, popular stickers take on a more pixelated, unique quality that resonates culturally there.

“With stickers, you fall in love with [the] characters you send… that becomes you,” Park said.

The average employee will prefer to work from home nearly half the time after the pandemic is over. Employees are also demanding flexible schedules and remote work, and as a result, executives are planning to reduce office space by 30%. The data surrounding the global shift to remote work is piling up and our post-pandemic professional landscape is starting to take shape.

Are you ready to lead a digital workforce?

The seismic shift in how we work requires a reassessment of how we manage, even for — or especially for — seasoned leaders. How do you wrangle a highly educated, decentralized workforce and rally them around a singular mission? How do you become a better people manager amid a workplace sea change?

As a seasoned CMO who has managed global workforces, I’ve finally hit my stride as a remote-only manager, all while navigating a global pandemic and riding my company’s unprecedented growth. What’s the secret sauce to managing today’s remote workforce? Strengthen your team by creating authentic workplace transparency, using numbers as a universal language and providing meaning behind your team’s work.

The biggest secret behind my management practices? It’s possible to produce more success with less stress. Consider these three ways I’ve strengthened my team and, in turn, become a more nimble manager.

Focus your team on meaningful work

A Harvard Business Review study found that knowledge workers are more fulfilled when they understand what organizations are trying to achieve and how their work lifts up their workplaces as a whole. In other words, meaning motivates your digital workforce.

On the surface, communicating your organization’s overarching mission, its reason for being, seems like a simple enough task. But I challenge you to ask each one of your team members to define your organization’s mission. If you have 10 employees, I bet you get nine or 10 different answers.

Instead of expecting employees to find your organization’s mission and vision on PowerPoint decks or on the website’s “about us” page, use the proven objectives and key results (OKRs) methodology.

The next piece of the puzzle helps you raise the visibility around why your employees are doing what they’re doing every day and creates a culture of motivation through meaning. Collaborate with your employees to create individual OKRs that identify goals and metrics for achievement. These OKRs should detail exactly how each employee contributes to the organization’s success and become the impetus behind everything an employee does.

I tell my workforce to review their OKRs every morning to help them focus on what’s important. It is like daily meditation for your business. So I didn’t worry when my director of marketing recently moved and had a baby. Because we had worked together to set thoughtful OKRs, my team member’s objectives and results were well defined. She knew where to focus her limited time. No distractions from the cacophony of requests. No anxiety over letting down her team. Just peace of mind that she was focusing on the right tasks.

The design space has undergone major changes in the last decade. What once was dominated by a single player in Adobe has now become a burgeoning software landscape, with a handful of major players answering the needs of designers across every industry.

One such player is Canva, the startup valued at over $15 billion. The company started out with a consumer-facing product, making design accessible to non-designers. But on the back of launching an enterprise-centric suite of tools, the growth of Sydney-based Canva has been staggering.

So it should come as no surprise that we’re absolutely thrilled to have Canva co-founder and CEO Melanie Perkins join us at Disrupt (Sept 21-23) for a fireside chat.

Since launching the company in 2013, Perkins has led its growth to now see more than 55 million users each month, ranging from individual creators to SMBs to Fortune 500 companies.

We’ll talk to Perkins about how she shifted the company from individual creators to a B2B platform, what it’s like to run an industry-specific startup in the midst of a fundamental evolution — see: Design may be the next entrepreneurial gold rush — and how she’s handled this period of monumental growth for the company.

Perkins joins a stellar lineup of speakers at Disrupt, including Secretary Pete Buttigieg, Calendly’s Tope Awotona, Slack CEO Stewart Butterfield, Houseplant’s Seth Rogen and investor Chamath Palihapitiya, among many others. Check out a full list of speakers here. Disrupt is less than a month away and you can still get your pass to access it all for less than $100! Register today.

As the global market for startup investing presses to new heights in terms of dollars invested this year, and deal volume ticks up in several regions, corporations are diving into the action.

Data from CB Insights and Stryber indicate that corporate investors are taking part in deals worth more than ever, even if corporate venture capital (CVC) deal activity is not up uniformly around the world.

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In a sense, it’s not surprising that CVCs are seeing the deals that they participate in rising in size — the global venture capital market has trended toward larger deals and more dollars for some time now. But questions lie inside the eye-popping figures: How are corporate investors adapting to a more rapid-fire and expensive venture capital market? We also wanted to know if CVCs are shaking up their deal sourcing, and whether the classic corporate venture tension between strategic investing and deploying capital for financial return is seeing a focus mix shift.

To help us understand the data we have at our fingertips, The Exchange reached out to M12’s Matt Goldstein, Sony Innovation Fund’s Gen Tsuchikawa and WIND Ventures’ Brian Walsh. (TechCrunch last covered CVC outfit WIND Ventures here.)

Let’s talk data and then dig into the nuance behind the numbers.

A boom in deal value

Precisely measuring CVC activity is interestingly difficult. When we discuss the value of venture capital deals, for example, what counts and what doesn’t is a matter of taste. For example, how to treat the SoftBank Vision Fund. Do deals that it leads that include venture capital participation count toward larger VC activity for a given period of time? What about investments led by crossover funds?

No matter what you choose, aggregate venture capital data will always include dollars invested by non-venture entities. So you do the best you can. CVC has the same problem, amplified. Because CVCs are often participatory to deals, instead of leading them, especially in the later stages of startup investing today, tallying concrete corporate venture investment is difficult. So we proceed in the same manner as we do with aggregate venture data counting, including deals that a particular investor type participated in.

Perfect, no. But it’s consistent, which is what we likely care about more. All that’s to say that when we observe the following deal and dollar data, CB Insights notes plainly that for its purposes, “‘CVC-backed funding’ and ‘CVC-backed deals’ refer to corporate venture capital participation in these funding rounds.”

Fair enough. Per CB Insights’ H1 2021 CVC report, CVCs participated in $78.7 billion in funding activity in the first half of 2021, a record for a half-year period. That dollar figure was derived from some 2,099 deals around the world. Precisely how strong those figures are is not clear from their absolute scale.

Elon Musk’s Tesla is looking beyond electric vehicles, solar panels and energy storage and wants to now supply electricity directly to customers, according to an application filed with Texas electricity regulators earlier this month. Energy Choice Matters first reported on the application.

The application, filed with the Public Utilities Commission of Texas on August 16, is a request to become what’s called a “retail electric provider” (REP) under its subsidiary Tesla Energy Ventures. On the deregulated, idiosyncratic Texas power market, REPs generally purchase wholesale electricity from power generators and sell it to customers. More than 100 REPs currently compete on the open market.

The company also filed separate applications for several utility-scale batteries in the Lone Star state: a 250-megawatt battery situated near its Gigafactory outside Austin, and a 100 MW separate project outside Houston. These projects are unrelated to the company’s efforts to become an electric provider, but taken as a whole, they reveal an ambitious roadmap for Tesla’s energy businesses.

Imagine: Tesla could not only sell electricity to customers, but it could also broker customers selling their excess energy — generated from Tesla Powerwall or Solar panel products, of course — back to the grid. It’s certainly one way to fulfill Musk’s vision of turning every home into a distributed power plant.

The latest request to the PUC comes just six months after an unprecedented winter storm shut down large parts of Texas’ power grid for days, leaving millions without power during a string of sub-freezing days. A handful of REPs shut down after the storm, which jammed wholesale electricity prices up to $9,000 per megawatt-hour (the seasonal average is around $50).

Musk, who moved many operations to Texas from California, including SpaceX’s sprawling facility in Boca Chica, criticized the state’s grid operator on Twitter at the time:

.@ERCOT_ISO is not earning that R

— Elon Musk (@elonmusk) February 17, 2021

He said the company was not “earning that R” – referring to the R in the acronym, which stands for Electric Reliability Council of Texas.

Tesla Energy Ventures told PUC regulators that it would use Tesla’s existing energy division to help drive sales, including leveraging the company’s mobile app and website. “Specifically, [Tesla Energy Ventures] will target its existing customers that own Tesla products and market the retail offer to customers through the mobile application and Tesla website,” the application says. “In addition to the Tesla mobile application and Tesla website, the applicant’s existing ‘Tesla Energy Customer Support’ organization will be trained to provide support and guidance to customers in customer acquisition efforts.”

Ana Stewart is listed as president of Tesla Energy Ventures. She’s been with Tesla since 2017 as the director of regulatory credit trading. Prior, she worked at Tesla-acquired SolarCity.

The application is listed under docket number 52431.

On Tuesday, Peloton announced the upcoming release of its entry-level Tread device. The news came ahead of a disappointing earnings report and after recalls of both of its treadmill products. Today, the connected fitness company noted in a filing with the SEC that it has been subpoenaed by both the U.S. Department of Justice and Department of Homeland Security.

Both subpoenas are part of investigations around the way the company reported injuries from its treadmills. It’s seemingly another sign that, in spite of the return of one of its two Tread products to market, the larger implications are far from over for the company.

Peloton writes in the filing:

Injuries sustained by Members or their friends and family members, or others who use or purchase our Connected Fitness Products, could subject us to regulatory proceedings and litigation by governance agencies and private litigants brought against us, that regardless of their merits, could harm our reputation, divert management’s attention from our operations and result in substantial legal fees and other costs. For example, we are presently subject to a CPSC investigation and other litigation related to injuries sustained by Members and others who use or purchase the Tread+, and we have reporting obligations to safety regulators in all jurisdictions where we sell Connected Fitness Products, where reporting may trigger further regulatory investigations.

The company declined to comment further on the investigations.

Peloton was, notably, at odds with the U.S. Consumer Product Safety Commission (CPSC)’s initial warning to stop using its treadmill products after an accident with the Tread+ resulted in a child’s death. At the time, Peloton said it was “troubled” by the reporting and insisted that “there is no reason to stop using the Tread+, as long as all warnings and safety instructions are followed.” In May, CEO John Foley apologized for the pushback and agreed to work with the CPSC on a recall.

The Commission cited more than 70 incidents in all, noting, “a six-year-old child recently died after being pulled under the rear of the treadmill. In addition, Peloton has received 72 reports of adult users, children, pets and/or objects being pulled under the rear of the treadmill, including 29 reports of injuries to children such as second- and third-degree abrasions, broken bones, and lacerations.”

The cheaper Tread model, meanwhile, was at the center of separate issue wherein the product’s touchscreen could detach and cause injury during use. The new version of the device features a reinforced screen. The recalls impacted around 125,000 Tread+ systems and more than 5,500 Treads, which were in early release.

Rivian, the electric vehicle startup backed by a host of institutional and strategic investors, including Ford and Amazon, has confidentially filed paperwork with the U.S. Securities and Exchange Commission to go public.

The size and price range for the proposed offering have yet to be determined. The initial public offering is expected to take place after the SEC completes its review process, subject to market and other conditions, the brief statement said.

The confidential filing comes less than two months since Rivian announced it had closed a $2.5 billion private funding round led by Amazon’s Climate Pledge Fund, D1 Capital Partners, Ford Motor and funds and accounts advised by T. Rowe Price Associates Inc. Third Point, Fidelity Management and Research Company, Dragoneer Investment Group and Coatue also participated in that round.

The company did not share a post-money valuation at the time of the July 2021 announcement.

The electric automaker, which now employs 7,000 people, is preparing to deliver its R1T pickup truck in September. The road to produce the R1T and an accompanying SUV requires capital, which Rivian has had little trouble raising.

Rivian has raised roughly $10.5 billion to date. In January, the company brought in $2.65 billion from existing investors T. Rowe Price Associates Inc., Fidelity Management and Research Company, Amazon’s Climate Pledge Fund, Coatue and D1 Capital Partners. New investors also participated in that round, which pushed Rivian’s valuation to $27.6 billion, a source familiar with the investment round told TechCrunch at the time.

Developing….

With so much startup activity in the software-as-a-service (SaaS) space it can be a challenge for businesses to figure out which of these SaaS (SaaSes?) are actually useful and worth continuing to shell out for. Well, Cologne-based startup Sastrify is here to help — offering what it describes as a “highly automated” platform (covering some 20,000+ SaaS solutions) to help other businesses with procurement and management of third-party services.

It may not sound the sexist startup business to be in, but despite only launching earlier this year, Sastrify is already cash-flow positive — and can tout “a high six-digit recurring revenue” just a few months post-launch. Not bad for a startup that was only founded last summer.

Today it’s announcing closing a $7 million seed round from HV Capital and the founders of FlixMobility, Personio and SumUp. That follows a $1.3 million pre-seed raised back in late 2020, ahead of its launch.

Sastrify tells us it has around 50 customers at this stage — including “unicorn startups like Gorillas”. It says its approach works best for growing companies with 100+ employees, and is perhaps especially suited to European tech scale-ups.

On the competitive front the startup points to U.S.-based Vendr and Tropic, which may further explain the regional focus (although it’s not only selling in Europe).

Sastrify’s sales pitch to SMEs includes that current customers have seen an average 6.5x return on their investment — in addition to what it bills as “thousands of working hours” saved from “wasted” activities related to SaaS procurement.

Cost savings are another carrot — which the startup is claiming its customers are “typically” saving around 20-30% of their SaaS cost.

So how does it actually make it easier for businesses to navigate the pros & cons of the smorgasbord of SaaS(es) now out there?

“Our main mantra is: ‘Effective procurement asks the right questions at the right time’,” says co-founder Sven Lackinger, who previously co-founded a SaaS startup himself of course (evopark), exiting that company back in 2018.

“To ensure that we’ve defined and implemented a five-step process into our platform, covering the whole life-cycle of SaaS applications within enterprises. Our clients can search for the suitable SaaS solutions while we guide them through the right evaluation process per use case and tool (e.g. what are similar companies using?).

“We then take over the whole buying process, aka automatically reaching out to different vendors, AI-/OCR-based comparing and benchmarking for offers. Once the tool is implemented, we make sure to track usage frequently (via regular, automated surveys to tool owners) and re-evaluate over time so there is no ongoing waste of licenses.”

“We have a more automated platform [than Vendr and Tropic] and can also resell licenses to our customers directly (e.g. for Google, Microsoft and others) to ensure best prices and fast delivery,” he also tells us. “This allows us to offer a faster and cheaper solution which is more suited to the European market (where the average SaaS expense per company is still smaller than in the US).” 

If you’re outsourcing all this other stuff to SaaS providers, why not get a specialist service to stay on top of how you do that too, is the basic idea.

TechCrunch Disrupt 2021 takes place September 21-23, and we’re here to call out just some of the awesome content we have scheduled over three very busy days. The Disrupt agenda so far features more than 80 interviews, panel discussions, events and breakout sessions that span the startup tech spectrum… with more to come!

You gotta pay to play: Buy your pass to Disrupt 2021 here and open a door to opportunity.

Let’s talk about the special breakout sessions, which are hosted by our partners. These smaller sessions deliver real value and, according to attendee feedback, that holds true across all TechCrunch events.

I enjoyed the big marquee speakers from companies like Uber, but it was the individual breakout presentations where you really started to get into the meat of the conversation and see how these mobile partnerships come to life. — Karin Maake, senior director of communications at FlashParking

There was always something interesting going on in one of the breakout sessions, and I was impressed by the quality of the people participating. Partners in well-known VC firms spoke, they were accessible, and they shared smart, insightful nuggets. You will not find this level of people accessible and in one place anywhere else. — Michael McCarthy, CEO of Repositax

Now’s the time to start planning your Disrupt 2021 schedule, and you don’t want to miss out on these informative presentations.

The Missing Block to Bring Crypto to the Masses

With the emergence of concepts such as NFT and GameFi, socialization prosperities are bringing new energy to the crypto world. Known as the People’s Exchange, KuCoin is committed to exploring disruptive technologies and genius ideas to bring crypto closer to the masses. In this session, you will hear from KuCoin CEO Johnny Lyu on what is the outlook of the evolving crypto market and how to achieve better trading experience for cryptocurrency investors. Brought to you by KuCoin.

Humanizing AI: How Brands Are Revolutionizing Customer Experience in an increasingly Digital World

Empathy deficit is the largest imminent threat to a businesses’ growth, but there’s hope. Humanized AI is allowing brands to create empathetic customer experiences by offering uniquely personal interactions with digital people. But what is empathy, really? And how can it help brands and storytellers better connect with their audiences in a cookie-less world? Soul Machines’ co-founder and CBO Greg Cross explains how embracing AI could be just the competitive advantage your brand needs. Brought to you by Soul Machines.

Revolutionizing the Global Metaverse Economy

Together Labs is leveraging the power of blockchain technology to create the new metaverse economy where users can buy, sell, invest and shape its future. Earlier this year, Together Labs launched VCOIN, the first global, digital currency that can be used in and out of the metaverse. VCOIN makes it possible for users to play to earn real value and then convert that value to cash. Soon, Together Labs will introduce additional blockchain offerings to accelerate the transition to a complete blockchain economy, setting the economic model for other metaverses to follow. Brought to you by VCOIN.

Securing Your journey to IPO from the start

Without the right governance tools in place at a company’s inception, a business becomes susceptible to risks as it scales. Adopting governance practices early in a business’s growth process sets them up for long-term growth and a successful IPO. Hear leadership perspectives for securing your business growth in a time of rapid change. Brought to you by Diligent Corporation.

You’ve Raised Your Seed Round — Now What? Preparing for Your Series A

The first hurdle has been cleared: initial funding is in the bank. You’re hiring more talent, seeing the beginnings of a finished product with clear evidence of traction and experiencing the coveted growth that previously felt just out of reach. Before you know it, the decision to raise for what is arguably the most competitive round is staring you in the face. In this panel, join Samsung Next’s David Lee alongside founders Kadie Okwudili (Agapé), Andy Hoang (Aviron), and Jim Bugwadia (Nirmata) as they discuss the learnings and nuances of bridging seed to Series A. Brought to you by Samsung Next.

Korea Pavilion Pitch Session – Hosted by KOTRA

We present the 13 pioneering Korean companies that will enrich our lives with their innovative edge. The companies specialize in various technologies, including Green Tech, AR/VR, 3D Display, AI & Big Data and Cybersecurity. Don’t miss your chance to catch a glimpse of ingenuity from the technology powerhouse. Brought to you by KOTRA.

Eliminating Styrofoam Protective Packaging

Over 380 million tons of plastic are produced every year and 50% of that is for single-use purposes such as product packaging. Until now, companies have been hard-pressed to find a replacement for Styrofoam for protecting fragile items like electronics and appliances. John Felts of Cruz Foam will discuss the development of bio-benign, compostable alternative materials. Tom Chi of At One Ventures will talk about the importance of investing in environmental and climate entrepreneurs. Moderator Scott Cassel of PSI will lead the discussion on how the packaging value chain can create a truly circular economy. Brought to you by Cruz Foam.

Powering What’s Next: Insights from the Enterprise Software Market

Spurred by digital transformation and the recent shift to remote work, the enterprise software industry has gone from strength-to-strength and competition for deals and valuations are at all-time highs. While investor appetite for enterprise software may be strong, it doesn’t mean that all tech businesses make worthy investments. In this panel, hear from Michael Fosnaugh and Monti Saroya, co-heads of Vista’s Flagship investment strategy, and a selection of Vista CEOs on the hallmarks of best-in-class software companies and trends driving the industry. Brought to you by Vista Equity Partners.

TechCrunch Disrupt 2021 takes place September 21-23. Don’t have your pass yet? Buy one here and check out the breakout sessions for trends, advice and opportunities to help grow your business.

Is your company interested in sponsoring or exhibiting at Disrupt 2021? Contact our sponsorship sales team by filling out this form.

In recent years, the private sector has been spurning proprietary software in favor of open source software and development approaches. For good reason: The open source avenue saves money and development time by using freely available components instead of writing new code, enables new applications to be deployed quickly and eliminates vendor lock-in.

The federal government has been slower to embrace open source, however. Efforts to change are complicated by the fact that many agencies employ large legacy IT infrastructure and systems to serve millions of people and are responsible for a plethora of sensitive data. Washington spends tens of billions every year on IT, but with each agency essentially acting as its own enterprise, decision-making is far more decentralized than it would be at, say, a large bank.

While the government has made a number of moves in a more open direction in recent years, the story of open source in federal IT has often seemed more about potential than reality.

But there are several indications that this is changing and that the government is reaching its own open source adoption tipping point. The costs of producing modern applications to serve increasingly digital-savvy citizens keep rising, and agencies are budget constrained to find ways to improve service while saving taxpayer dollars.

Sheer economics dictate an increased role for open source, as do a variety of other benefits. Because its source code is publicly available, open source software encourages continuous review by others outside the initial development team to promote increased software reliability and security, and code can be easily shared for reuse by other agencies.

Here are five signs I see that the U.S. government is increasingly rallying around open source.

More dedicated resources for open source innovation

Two initiatives have gone a long way toward helping agencies advance their open source journeys.

18F, a team within the General Services Administration that acts as consultancy to help other agencies build digital services, is an ardent open source backer. Its work has included developing a new application for accessing Federal Election Commission data, as well as software that has allowed the GSA to improve its contractor hiring process.

18F — short for GSA headquarters’ address of 1800 F St. — reflects the same grassroots ethos that helped spur open source’s emergence and momentum in the private sector. “The code we create belongs to the public as a part of the public domain,” the group says on its website.

Five years ago this August, the Obama administration introduced a new Federal Source Code Policy that called on every agency to adopt an open source approach, create a source code inventory, and publish at least 20% of written code as open source. The administration also launched Code.gov, giving agencies a place to locate open source solutions that other departments are already using.

The results have been mixed, however. Most agencies are now consistent with the federal policy’s goal, though many still have work to do in implementation, according to Code.gov’s tracker. And a report by a Code.gov staffer found that some agencies were embracing open source more than others.

Still, Code.gov says the growth of open source in the federal government has gone farther than initially estimated.

A push from the new administration

The American Rescue Plan, a $1.9 trillion pandemic relief bill that President Biden signed in early March 2021, contained $9 billion for the GSA’s Technology Modernization Fund, which finances new federal technology projects. In January, the White House said upgrading federal IT infrastructure and addressing recent breaches such as the SolarWinds hack was “an urgent national security issue that cannot wait.”

It’s fair to assume open source software will form the foundation of many of these efforts, because White House technology director David Recordon is a long-time open source advocate and once led Facebook’s open source projects.

A changing skills environment

Federal IT employees who spent much of their careers working on legacy systems are starting to retire, and their successors are younger people who came of age in an open source world and are comfortable with it.

About 81% of private sector hiring managers surveyed by the Linux Foundation said hiring open source talent is a priority and that they’re more likely than ever to seek out professionals with certifications. You can be sure the public sector is increasingly mirroring this trend as it recognizes a need for talent to support open source’s growing foothold.

Stronger capabilities from vendors

By partnering with the right commercial open source vendor, agencies can drive down infrastructure costs and more efficiently manage their applications. For example, vendors have made great strides in addressing security requirements laid out by policies such as the Federal Security Security Modernization Act (FISMA), Federal Information Processing Standards (FIPS) and the Federal Risk and Authorization Management Program (FedRamp), making it easy to deal with compliance.

In addition, some vendors offer powerful infrastructure automation tools and generous support packages, so federal agencies don’t have to go it alone as they accelerate their open source strategies. Linux distributions like Ubuntu provide a consistent developer experience from laptop/workstation to the cloud, and at the edge, for public clouds, containers, and physical and virtual infrastructure.

This makes application development a well-supported activity that includes 24/7 phone and web support, which provides access to world-class enterprise support teams through web portals, knowledge bases or via phone.

The pandemic effect

Whether it’s accommodating more employees working from home or meeting higher citizen demand for online services, COVID-19 has forced large swaths of the federal government to up their digital game. Open source allows legacy applications to be moved to the cloud, new applications to be developed more quickly, and IT infrastructures to adapt to rapidly changing demands.

As these signs show, the federal government continues to move rapidly from talk to action in adopting open source.

Who wins? Everyone!

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

Natasha and Alex and Grace and Chris were joined by none other than TechCrunch’s own Mary Ann Azevedo, in her first-ever appearance on the show. She’s pretty much the best person and we’re stoked to have her on the pod.

And it was good that Mary Ann was on the show this week as she wrote about half the dang site. Which meant that we got to include all sorts of her work in the rundown. Here’s the agenda:

• Funding rounds from: Ramp, which raised $300 million at a $3.9 billion valuation; NoRedInk, which put together an impressive $50 million Series B; and Playbook, which is building a sort of Dropbox for designers. Each company gave us something different to noodle on, be it the diverging strategies at Ramp and Brex, how NoRedInk is different from Grammarly, and why Dropbox is not the Dropbox for designers.
• Then we spun the globe to narrow our focus to Latin America, a booming startup scene that Mary Ann recently profiled for Extra Crunch. In a nutshell, venture capital is helping drive an enormous wave of startup activity in the region — or perhaps a wave of startup activity is driving a boom in venture investment? — leading to huge companies, and perhaps some tech-powered inclusion of more folks into the modern banking and digital economy. (For more, here are notes on the Brazilian market’s rising exit tally! And Flink raised, which was worth chewing on as well.)

• We quickly pivoted to the hot-button issue of the moment for every startup (and business): hiring. Natasha noted how startups used to focus on runway, and now they are looking to fill empty seats amid the great resignation. 
• Finally, we nattered about huge venture results from Boston, big numbers from Austin and what increasingly feels like an everything bubble. Chicago is doing well, too. Pick a city, it’s putting up big numbers.

Twitter users in Canada and parts of the U.S. appear to be having trouble accessing the social media platform on Friday morning. Reports from third-party web monitoring service Downdetector indicate the issue is impacting users across Canada and mainly the eastern parts of the U.S. near the Canadian border, though users from more states continue to report outages as well.

The outage began at around 8:30 AM ET according to most reports, lasting for upwards of an hour for some users. As of just before 10 AM ET, it appears that service is restored for most, if not all based on information from users.

In a tweet from its support account, Twitter acknowledged some users may have experienced problems loading the service and stated that the issue has been fixed.

Marathon Education was created after its founders realized after-school education in Vietnam hadn’t evolved much since they were kids. Some of the most popular tuition centers in big cities teach hundreds of students at once. “They’re packed like sardines and that really has not changed in the past one or two decades when I went to these sorts of classes in Vietnam,” said co-founder Pham Duc.

Pham launched Marathon six weeks ago with his brother-in-law Tran Viet Tung to make after-school learning more accessible in Vietnam. Today the startup is announcing it has raised $1.5 million in pre-seed funding led by Forge Ventures (a new fund launched by Alto Partners), with participation from investors including Venturra Discovery and iSeed SEA.

Marathon is currently focused on math and science courses for grades six to 12 of the National Curriculum developed by Vietnam’s Ministry of Education and Training (MOET), and will eventually cover all MOET subjects.

Before founding Marathon, Pham was an investor at TPG Global, while Tran is a serial entrepreneur whose previous startups include travel platforms Triip.me and Christina’s. Both grew up in Hanoi and spent much of their childhoods going to after-school learning centers.

About 50% to 70% of K-12 students attend after-school classes, but the industry is very fragmented, says Pham. Many learning centers are run by former public school teachers, and are clustered in major cities.

“If you speak to students, I think the biggest issue we’re seeing is accessibility,” said Pham. “If you’re a student in Hanoi and Ho Chi Minh City, there’s no guarantee that you’ll get into classes run by top tutors.” Meanwhile, students in other areas often travel to Tier 1 cities before major tests, like university entrance exams, staying in a hostel for about a month while attending prep courses.

For teachers, running a center means handling administrative tasks like marketing, admissions and parent communications, which cuts into the time they spend designing their courses. When the current COVID-19 lockdowns started a few months ago, they had to switch quickly to online teaching platforms.

When teachers join Marathon, the company takes over administrative tasks. Its online model also means they can reach more students, including in other cities. Pham says teachers who switch from offline centers to Marathon can potentially increase their earnings two to three times.

Before joining Marathon, teachers go through a screening process, including how many of they previous students passed exams or improved their grades. Marathon pairs them with teaching assistants who work directly with groups of about 20 to 25 students during online lectures, answering questions through instant messenger, and then manage breakout rooms to go through the lessons in detail.

Marathon launched first in Ho Chi Minh City and its expansion strategy will take cultural differences between the north and south of Vietnam into account. For example, it will find tutors with regional accents, and adjust its marketing strategies.

“We are going to focus on the teachers and curriculum separately, because the two regions are quite different. Parents in the south are more experimental and more willing to try out new services. Parents in the north very much rely on their network and word-of-mouth, so they are more cautious about trying out what we’re doing,” Tran said. “So when we serve the north and south, we serve distinctive sets of customers.”

Marathon plans to continue its online-only model after lockdowns end and kids go back to in-person classes for regular school. “After one year in intermittent lockdowns, we’ve noticed there’s been a marked shift in parents’ behavior. They are much more receptive to online learning. Right now, even though there’s a lockdown, attendance rates are 99%,” said Pham. “In the future, I think online is the way to go and it’s much more scalable, so we want to focus our strategy around that.”