Category: Tech news

Researchers have clear policy suggestions on how to see fewer gun deaths. They’d have many more, if they weren’t starved for funding and data.

A select group of iPhone users are getting early access to Apple’s digital credit card. Everyone else will get it later in August.

Catch up on the most important news from today in two minutes or less.

The Beresheet lunar lander carried thousands of books, DNA samples, and a few thousand water bears to the moon. But did any of it survive the crash?

A new survey of 900 active devs provides some surprising clarity into the technology’s constraints.

“Years and Years” is an unusual show. It’s a co-production of HBO and the BBC, and in the course of six hourlong episodes, it covers a span of more than 10 years in our near future.

During that time, we see the rise of a terrifying Trump-style politician in the United Kingdom named Vivian Rook (played by Emma Thompson), along with lots more political, economic and technological upheaval. All of this is seen through the eyes of Manchester’s Lyons family — grandmother Muriel and adult siblings Rory, Edith, Daniel and Rosie, plus their spouses and children.

No one in the family is a major power player; they simply watch everything change with a growing sense of dread. That, in large part, is what makes the show effective — it feels true to the experience of trying to get on with your life while the world shifts around you.

On the latest episode of the Original Content podcast, we spend the entire hour reviewing the show. We had some reservations about the finale — which seemed to abandon the strengths of the previous episodes — but even so, we were impressed by the series, and by the way it brought so many of our fears to life.

You can listen in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also send us feedback directly. (Or suggest shows and movies for us to review!)

And if you want to skip ahead, here’s how the episode breaks down:

0:00 Intro
0:23 “Years and Years” review
30:07 “Years and Years” spoiler discussion

What founders need to know about pro rata rights

Pro rata used to be reasonably simple. Venture investors who bought preferred shares in startups had the right to lock in a certain percentage of equity provided they continued funding the company in the future rounds of financing. But as VCs have raised ever larger funds and cap tables have become ever more congested, who gets pro rata — and who keeps it — has become a massive distraction for many founders during their fundraises.

Andy Sparks, the founder of Holloway Guides (which, as my co-editor Eric Eldon wrote this week, raised $4.6 million from the New York Times and others), writes in with an analysis of pro rata rights from the latest Holloway Guide on Raising Venture Capital. We are really digging this new model of covering the issues affecting startups, and wish Sparks and his team well in their endeavor.

Pro rata is Latin for “in proportion.” Most people are familiar with the concept of prorating from dealing with landlords: if you’re entering into a lease halfway through the month, your rent may be prorated, where you pay an amount of the rent that is in proportion to your time actually occupying the property.

Almost all investors try to negotiate for pro rata rights, because if a company is doing well they want to own as much of it as possible. After all, why not double down on a winner than use that same money to invest in a newer, unproven company? In the 2018–2019 fundraising climate, though, it’s safe to say we’re at “peak pro rata.” Everybody wants pro rata, even those who don’t entirely understand how it works or affects companies.

Which immigration headlines should you care about?

Every day in the United States, immigration issues dominate the headlines. That can be very taxing for startups, which are often founded by immigrant entrepreneurs and often have sizable immigrant employee bases as well. So which stories should you pay attention to and which stories can you ignore and live in blissful ignorance?

Tesla is resurrecting a popular benefit that CEO Elon Musk once called “unsustainable” as it attempts to boost sales of its more expensive electric vehicles.

Tesla announced Saturday that all new Model S sedans and Model X SUVs will come with free unlimited access to its network of electric vehicle chargers known as superchargers.

The move comes on the heels of a second quarter of wider-than-expected losses of $408 million despite record deliveries of its electric vehicles.

The automaker reported in July it delivered a record 95,200 of its electric vehicles in the second quarter, a dramatic reversal from a disappointing first period. The company generated $6.3 billion in revenue in the second quarter from those sales, the bulk of which came from its lower margin and less expensive Model 3 vehicles.

Meanwhile, sales of the Model S and Model X have slowed. Of its 95,200 deliveries, just 17,650 were Model S and X vehicles. Tesla doesn’t separate delivery or production figures for the S and X.

In its early days, free unlimited supercharging was part of the package of buying a Tesla vehicle.

Tesla began phasing out free unlimited access to its supercharger network when it announced that customers who buy cars after January 1, 2017 will have 400 kilowatt-hours, or about 1,000 miles, of free charging every year. Once owners surpassed that amount, they would be charged a small fee.

Tesla then narrowed the free unlimited access to superchargers through a referral program and only to buyers of performance versions of the Model S, Model X and Model 3. The free unlimited supercharger referral program is now set to end September 18.

Musk has brought back the perk several times since to drive sales.

It’s unclear how long this latest offer will last. The company has been tinkering with its pricing structure, vehicle configurations and rewards programs, with changes occurring monthly.

The fashion industry has historically relied on exploitative, unsustainable and unethical labor practices in order to sell clothes — but if recent trends are any indication, it won’t for much longer. Over the last several years, the industry has entered a remarkable period of upheaval, with major and small fashion brands alike ditching traditional methods of production in favor of eco-friendly and cruelty-free alternatives. It’s a welcome, long-overdue development, and it’s showing no signs of slowing down.

Tradition fashion is unethical in almost too many ways to count. There is, of course, the monstrous toll on animal life. Every year, over one billion animals are slaughtered for their fur or pelts, usually after living their lives in horrific factory farms.

Cows, including newborn and even unborn calves, are skinned alive in order to make leather, while animals killed for their fur are executed through anal electrocution, neck-snapping, drowning and other ghastly ways in order to avoid damaging their pelts. Even wool, traditionally perceived as a more humanely-produced animal product, involves horrors on par with those at a slaughterhouse.

But animals aren’t the only ones who suffer under the traditional fashion industry. In Cambodian garment factories, which export around $5.7 billion in clothes every year, workers earning 50 cents an hour are forced to sit for 11 hours a day straight without using the restroom, according to Human Rights Watch.

Mass faintings in oppressively hot factories are common, and workers are routinely fired for getting sick or pregnant. In Bangladesh — the world’s second-largest importer of apparel behind China — a poorly-maintained garment factory collapsed in 2013, killing 1,132 people and injuring around 2,000 others. When Cambodian garment workers protested in 2014 for better working conditions, police shot and killed three of them.

Lastly, traditional fashion is killing the planet. Every year, the textile industry alone spits out 1.2 billion tons of greenhouse gases — more than all marine shipping vessels and international flights combined — and consumes 98 million tons of oil. Textile dyeing is the second-largest polluter of clean water, and on the whole, the apparel industry accounts for 10 percent of all greenhouse emissions worldwide. Worst of all, the clothes produced by this massive resource consumption produces clothes are rapidly discarded: In 2015, 73 percent of the total material used to make clothes ended up incinerated or landfilled, according to a study by the Ellen MacArthur foundation.

Thankfully, as big and small clothing manufacturers alike are realizing, there are plenty of ways to sell fashionable clothing and accessories that don’t destroy the environment, endanger workers, or cause suffering to animals.

Vegan clothes are becoming increasingly popular, and there’s no shortage of them to choose from. Some brands, like Keep Company and Unicorn Goods, offer an expansive generalized catalogue of vegan shirts, jackets, accessories and more. Other brands are more specialized: Unreal Fur has a beautiful line of vegan faux-fur, Ahisa, Beyond Skin and SUSI Studio all sell stylish vegan shoes, and Le Buns specializes in vegan swimwear. There are upscale vegan clothing retailers, such as Brave Gentleman, as well as more casual budget options, like The Third Estate.

Strict veganism isn’t the only way to manufacture clothing ethically. Hipsters For Sisters’ products are made entirely with recycled, upcycled, or deadstocked materials, earning the approval of PETA. Reformation utilizes a carbon-neutral production process to make its clothes (and offers customers a $100 store credit if they switch to wind energy), while Stella McCartney’s entire product line is vegetarian.

British fashion designer Stella McCartney poses prior her presentation during the men and women’s spring/summer 2019 collection fashion show in Milan, on June 18, 2018. (Photo by MIGUEL MEDINA / AFP) (Photo credit should read MIGUEL MEDINA/AFP/Getty Images)

Many vegan clothing companies, such as In The Soulshine and Della, have found ways to sell cruelty-free clothing while also providing humane working conditions to their factories’ workers. Amanda Hearst’s Maison de Mode features a combination of Fair Trade, recycled, cruelty-free, and organic products — as well as a comprehensive labeling system to inform customers which is which.

There are plenty of small, niche companies offering ethical clothing options, but make no mistake: The transition to sustainable and ethical fashion is an industry-wide phenomenon. Well-established brands like Dr. Marten’s, Old Navy, H&M and Zara all now sell vegan clothes. Gap, Gucci, and Hugo Boss have banned fur from their stores, and three of the largest fashion conglomerates — H&M Group, Arcadia Group and Inditex — recently pledged to stop selling mohair products by 2020.

Companies are rapidly investing in new ethical alternatives to traditional clothing as well: Save The Duck’s PLUMTECH jackets feature a cruelty-free alternative to down feathers, while companies like Modern Meadow are developing new biofabricated leather made from collagen protein and other essential building blocks found in animal skin that don’t require the slaughter of any animals.

There are, of course, some holdouts. Canada Goose still traps and kills coyotes to make its fur jackets, and uses a device that’s been banned in dozens of countries for its cruelty in order to do so. As a result, its store openings regularly draw protesters.

But by and large, the trend is in the opposite direction. From up-and-coming brands to the biggest names in fashion, the industry is moving away from the destructive practices of years past and toward cleaner, ethical ways of making clothes.

It shouldn’t be a surprise. After all, being successful in fashion has always required changing with the times — and in 2019, basing an industry on labor abuse, destruction of the environment and animal torture to make their products is no longer a sustainable business model.

Cryptocurrency fans who were hoping to use Apple’s forthcoming credit card to splash on coin are out of luck. You also won’t be able to use the Apple Card to buy lottery tickets, casino gambling chips in any form, physical or virtual, or foreign currency or travelers checks.

Reuters spotted the detail in a customer agreement posted to Apple Card’s card issuer partner Goldman Sachs’ website which lists restrictions on transactions it describes as “cash advance and cash equivalents”.

The agreement defines these as meaning “any cash advance and other cash-like transaction, including purchases of cash equivalents such as travelers checks, foreign currency, or cryptocurrency; money orders; peer to peer transfers, wire transfers or similar cash-like transactions; lottery tickets, casino gaming chips (whether physical or digital), or race track wagers or similar betting transactions”.

Given the wild swings in crypto valuations the Apple+Goldman credit tie-up saying a firm ‘no’ to cardholders splashing on such shaky stuff is hardly surprising.

Apple announced it was getting into the credit card game back in March, saying the card would offer a 2% cash back incentive for using Apple Pay to make purchases. (The physical version of the Apple Card is slightly less generous vs the digital card.) While if you’re buying stuff direct from Apple there’s 3% cash-back.

There are also no late fees and no penalty rates. Interest rates for Apple Card are in the range of 13-24%, based on the user’s creditworthiness.

As with Apple Pay, there’s a privacy promise too — with a pledge that Apple Card transaction data won’t be sold for advertising or marketing, not by Apple, Goldman or any other partners. Though data may be shared with regulators for financial reporting purposes and so on.

The Apple Card is due to be released in the US next month.

It wasn’t “system updates” as it claimed. StockX was mopping up after a data breach, TechCrunch can confirm.

The fashion and sneaker trading platform pushed out a password reset email to its users on Thursday citing “system updates,” but left users confused and scrambling for answers. StockX told users that the email was legitimate and not a phishing email as some had suspected, but did not say what caused the alleged system update or why there was no prior warning.

A spokesperson eventually told TechCrunch that the company was “alerted to suspicious activity” on its site but declined to comment further.

But that wasn’t the whole truth.

An unnamed data breached seller contacted TechCrunch claiming more than 6.8 million records were stolen from the site in May by a hacker. The seller declined to say how they obtained the data.

In a dark web listing, the seller put the data for sale for $300. One person at the time of writing already bought the data.

The seller provided TechCrunch a sample of 1,000 records. We contacted customers and provided them information only they would know from their stolen records, such as their real name and username combination and shoe size. Every person who responded confirmed their data as accurate.

The stolen data contained names, email addresses, scrambled password (believed to be hashed with the MD5 algorithm and salted), and other profile information — such as shoe size and trading currency. The data also included the user’s device type, such as Android or iPhone, and the software version. Several other internal flags were found in each record, such as whether or not the user was banned or if European users had accepted the company’s GDPR message.

Under those GDPR rules, a company can be fined up to four percent of its global annual revenue for violations.

When reached prior to publication, neither spokesperson Katy Cockrel nor StockX founder Josh Luber responded to a request for comment. A voicemail left on the spokesperson’s cell was not returned. A non-attributable statement published late on Saturday confirmed our reporting, but the company did not answer our specific questions, including why it failed to inform customers when it first learned of the data breach and why it misled customers prior to our reporting.

Neither Luber nor chief executive Scott Cutler have commented on the breach.

Jake Williams, founder of Rendition Infosec, said the company “robbed their users of the chance to evaluate their exposure” by not informing customers of the breach when it happened.

StockX was last month valued at over $1 billion after a $110 million fundraise.

Updated with comment from StockX.

The Entertainment Software Association issued an apology of sorts after making available the contact information for more than 2,000 journalists and analysts who attended this year’s E3.

“ESA was made aware of a website vulnerability that led to the contact list of registered journalists attending E3 being made public,” the organization said via statement. “Once notified, we immediately took steps to protect that data and shut down the site, which is no longer available. We regret this this occurrence and have put measures in place to ensure it will not occur again.”

It’s not clear whether the organization attempted to reach out to those impacted by the breach.

In a kind of bungle that utterly boggles the mind in 2019, the ESA had made available on its site a full spreadsheet of contact information for thousands of attendees, including email addresses, phone numbers and physical addresses. While many or most of the addresses appear to be businesses, journalists often work remotely, and the availability of a home address online can present a real safety concern.

After all, many gaming journalists are routinely targets of harassments and threats of physical violence for the simple act of writing about video games on the internet. That’s the reality of the world we currently live in. And while the information leaked could have been worse, there’s a real potential human consequence here.

That, in turn, presents a pretty compelling case that the ESA is going to have a pretty big headache on its hands under GDPR. Per the rules,

In the case of a personal data breach, the controller shall without undue delay and, where feasible, not later than 72 hours after having become aware of it, notify the personal data breach to the supervisory authority competent in accordance with Article 55, unless the personal data breach is unlikely to result in a risk to the rights and freedoms of natural persons. Where the notification to the supervisory authority is not made within 72 hours, it shall be accompanied by reasons for the delay.

There is, indeed, a pretty strong argument to made that said breach could “result in a risk to the rights and freedoms of natural persons.” Failure to notify individuals in the allotted time period could, in turn, result in some hefty fines.

It’s hard to say how long the ESA knew about the information, though YouTuber Sophia Narwitz, who first brought this information to light publicly, may have also been the first to alert the organization. The ESA appears to have been reasonably responsive in pulling the spreadsheet down, but the internet is always faster, and that information is still floating around online and fairy easily found.

VentureBeat notes rightfully that spreadsheets like these are incredibly valuable to convention organizations, representing contact information some of the top journalists in any given industry. Many will no doubt think twice before sharing this kind of information again, of course.

Notably (and, yes, ironically), the Black Hat security conference experienced a similar breach this time last year. It chalked the issue up to a “legacy system.”

Natasha Lomas contributed to this report

Update: An email has since been sent to those impacted, noting,

We provide ESA members and exhibitors a media list on a password-protected exhibitor site so they can invite you to E3 press events, connect with you for interviews, and let you know what they are showcasing. For more than 20 years there has never been an issue. When we found out, we took down the E3 exhibitor portal and ensured the media list was no longer available on the E3 website.

Again, we apologize for the inconvenience and have already taken steps to ensure this will not happen again.

So that’s that part taken care of, at least.

Amazon has tweaked the settings for its Alexa voice AI to allow users to opt out of their voice recordings being manually reviewed by the company’s human workers.

The policy shift took effect Friday, according to Bloomberg, which reports that Alexa users will now find an option in the settings menu of the Alexa smartphone app to disable human review of their clips.

The Alexa T&C did not previously inform users of the possibility that audio recordings captured by the service might be manually reviewed by actual humans. (Amazon still doesn’t appear to provide this disclosure on its main website either.)

But the Alexa app now includes a disclaimer in the settings menu that flags the fact human ears may in fact be listening, per the report.

This disclosure appears only to surface if users go digging into the settings menu.

Bloomberg says users must tap ‘Settings’ > ‘Alexa Privacy’ > ‘Manage How Your Data Improves Alexa’ before they see the following text: “With this setting on, your voice recordings may be used to develop new features and manually reviewed to help improve our services. Only an extremely small fraction of voice recordings are manually reviewed.”

The policy tweak comes as regulators are dialling up attention on the privacy risks posed by voice AI technologies.

This week it emerged that Google was ordered by a German data protection watchdog to halt manual reviews of audio snippets generated by its voice AI, after thousands of recordings were leaked to the Belgian media last month which was able to identify some of the people in the clips.

Google has suspended reviews across the whole of Europe while it liaises with EU privacy regulators.

In a statement on its website the Hamburg privacy watchdog raised concerns about other operators of voice AIs, urging EU regulators to make checks on providers such as Amazon and Apple — and “implement appropriate measures”.

Coincidentally (or not) Apple also suspended human reviews of Siri snippets this week — globally, in its case — following privacy concerns raised by a recent UK media report. The Guardian newspaper quoted a whistleblower claiming contractors regularly hearing confidential personal data captured by Siri.

While Google and Apple have entirely suspended human reviews of audio snippets (at least temporarily), Amazon has not gone so far.

Nor does it automatically opt users out. The policy change just lets users disable reviews — which requires consumers to both understand the risk and act to safeguard their privacy.

Amazon’s disclosure of the existence of human reviews is also currently buried deep in the settings, rather than being actively conveyed to users.

It’s not clear whether any of this will wash with regulators in Europe. 

Bloomberg reports that Amazon declined to comment on whether it had been contacted by regulators about the Alexa recordings review program, saying only: “We take customer privacy seriously and continuously review our practices and procedures We’ll also be updating information we provide to customers to make our practices more clear.”

We reached out to Amazon with questions but at the time of writing a spokesperson was not available.

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about SoftBank’s second Vision Fund. Before that, I noted some challenges plaguing mental health tech startups.

Remember, you can send me tips, suggestions and feedback to [email protected] or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

What’s new?

This week DoorDash announced an agreement to acquire Caviar, an on-demand delivery business, from Square. DoorDash says it will pay $410 million for the company in a combination of cash and stock. If you’re thinking that seems like a lot of money, you are very much correct.

It’s so much money that all of us over here at TechCrunch were scratching our heads trying to understand why DoorDash would shell out that kind of cash. After all, Square paid only $90 million in stock for Caviar when it acquired the company back in 2014. However, DoorDash is VC cash-rich. The business, still privately-owned, has raised an astronomical sum of venture capital. This year alone it’s raised $1 billion, including a Series G funding of $600 million that valued it at $12.6 billion.

When a company raises that many huge rounds so close together, you can only assume it’s burning through a lot of cash. When it comes time for DoorDash to begin pitching Wall Street for an IPO — we’re thinking late next year — established subsidiaries like Caviar will at least help bolster its IPO-ready narrative.

With monster companies like DoorDash, Grubhub and UberEats owning the food delivery space, we will no doubt see more big M&A deals and more startups die. (Remeber the insane fall of Munchery, anyone?) But will any of these efforts ever become profitable? Or will DoorDash burn through cash until there’s just no more cash left to burn?

#Equitypod

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Equity co-host Alex Wilhelm and I attempt to make sense of DoorDash’s acquisition of Caviar. Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast and Spotify.

Big Deals

• Babylon Health raises $550M at $2B+ valuation
• Compass gets $370M on $6.4B valuation
• Monday.com raises $150M at a $1.9B valuation
• UrbanClap, India’s largest home services startup, raises $75M
• Investors bet another $50M on Clearbanc’s revenue share model

Little Deals

• Hello Heart raises $12M for at-home heart monitoring
• NakedPoppy secures $4M for curated beauty marketplace
• Computer vision startup Trueface raises $3.7M
• Prodly announces $3.5M to automate low-code cloud deployments 
• YC-backed MyPetrolPump nabs $1.6M

M&A

• Vacasa to acquire Wyndham Vacation Rentals for $162M
• D2C lingerie brand Lively acquired for $85M
• Deliveroo acquires software studio Cultivate
• Plus: Read TechCrunch’s Lucas Matney’s exclusive deep dive with NEA general partner Scott Sandell on Salesforce’s major acquisition of Tableau. (Extra Crunch membership required.)

Venture Fundraising

• Lux Capital closes on a whopping $1B
• Healthcare and fintech fund Oak HC/FT nabs $800M for third fund
• Hedge fund-turned-VC Coatue Management launches $700M fund
• Joy Capital closes on $700M for early-stage investments in China
• Nyca Partners raises $210M fintech fund

Extra Crunch

Here’s your weekly reminder that for a low price — a complete bargain really — you can learn more about the startups and venture capital ecosystem with a subscription to Extra Crunch. We offer exclusive deep dives, Q&As, newsletters, resources and recommendations, and fundamental startup how-to guides to our subscribers. Here are some of the best EC posts of the week:

• A guide to virtual beings and how they impact our world by Eric Peckham
• The dreaded 10x, or, how to handle exception employees by Jon Evans

Elon Musk wants to drill holes in China. The Tesla founder has tweeted to reveal that his tunnelling and transportation startup, The Boring Company, will be launch in China later this month.

Musk is due to speak at an AI conference, called the World Artificial Intelligence Conference, taking place in Shanghai on August 29-31. Replying to a tweet about the event he announced: “Will also be launching The Boring Company China on this trip.”

Another Twitter user chipped into the conversation to ask whether the company would also do underwater tunnels — to which Musk replied simply “yes“.

A securities filing last month revealed that the The Boring Company had raised its first outside investment via the sale of $120M in stock. So the company has some extra cash sloshing around to plough into new ventures.

It also recently landed its first commercial contract: $48.7M to build and operate an underground “people mover” in Las Vegas, focused on the Las Vegas Convention Center.

This underground ‘people mover’ is not, as you might imagine, a tried and tested metro train system. The plan apparently involves building two tunnels: One for vehicles (Musk does also sell electrics cars) and a second tunnel for pedestrians who will be carried in (modified) Tesla cars. The latter fully autonomous, under the plan.

Current generation Teslas are not capable of driving themselves, merely offering driving assistance features to humans. But autonomous driving inside a tunnel is about as much of a controlled environment you could hope for — without, y’know, sticking cars together on rails and making a driverless train (like the one that’s been serving London’s Docklands area since 1987).

The Las Vegas contract specifies three months of safety testing before Musk’s modified Teslas will be allowed to whisk people through the tunnel.

Another design that The Boring Company has proposed — for an ambitious Loop system from Washington, D.C. to Baltimore — is still on the drawing board, having attracted major safety concerns by failing to meet several key national safety standards, including lacking sufficient emergency exits and not taking note of the latest engineering practices.

So perhaps, in looking to expand The Boring Company by taking his spade to the Far East, Musk is hoping for a more accommodating set of building standards to drive an electric truck through.