Category: Tech news

India proposed on Monday banning flash sales on e-commerce platforms and preventing their affiliate entities from being listed as sellers as the South Asian market looks to further tighten rules that could hurt the future prospects of Amazon and Walmart’s Flipkart in the world’s second-largest market.

The proposal (PDF), unveiled by India’s Ministry of Consumer Affairs on Monday evening, comes at a time when brick-and-mortar retailers in India have ramped up their complaints to raise concerns about what they allege as unfair practices employed by Amazon and Flipkart as they expand their operations in the country.

In its proposal, India’s Ministry of Consumer Affairs said that e-commerce firms should not be allowed to hold flash sales in India. These flash sales, akin to Black Friday and Cyber Monday sales in the U.S., are very popular during festive season in the country. During flash sales e-commerce firms have traditionally observed the biggest spikes in customer orders as brands offer heavy discounts on their products.

“Certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back to back’ or ‘flash’ sales wherein one seller selling on platform does not carry any inventory or order fulfilment capability but merely places a ‘flash or back to back’ order with another seller controlled by platform. This prevents a level playing field and ultimately limits customer choice and increases prices,” the ministry said in a statement.

As it has done with its recent IT rules, India is also proposing that e-commerce firms appoint a chief compliance officer, a nodal contact person for 24×7 coordination with law enforcement agencies, and officers to ensure compliance to their orders as well as a resident grievance officer for redressing of the grievances of the consumers on the e-commerce platform.

“This would ensure effective compliance with the provisions of the Act and Rules and also strengthen the grievance redressal mechanism on e-commerce entities,” the ministry said, adding that the new proposal also asks every e-commerce entity to provide government agencies with information within 72 hours “for the purposes of verification of identity, or for the prevention, detection, investigation, or prosecution, of offences under any law for the time being in force, or for cyber security incidents.”

The new proposal may also prohibit Amazon, Flipkart and other e-commerce players from running their in-house / private labels. The new proposal asks e-commerce firms to ensure that none of their related and associated parties are listed on their platforms as sellers for selling to customers directly. “Ensure that nothing is done by related parties or associated enterprises which the e-commerce entity cannot do itself,” the proposal said.

India does not allow e-commerce firms to hold inventory or sell items directly to consumers. To bypass this, firms have operated through a maze of joint ventures with local companies that operate as inventory-holding firms.

Amazon, which has invested over $6.5 billion in its India business, said it was reviewing the proposed policies while Flipkart, whose majority stake Walmart bought for $16 billion in 2018, had no immediate comment.

In a court hearing on Monday, a Flipkart lawyer said the company sees nothing wrong in offering to cut charges for sellers on its platform if they lower product prices.

The ministry said it is making the proposal, for which it plans to seek industry feedback over the next 15 days, after receiving “several complaints against widespread cheating and unfair trade practices being observed in e-commerce ecosystem.”

Additionally, the new proposal asks e-commerce firms to introduce a mechanism to identify goods on their platforms based on their country of origin and suggest alternatives to “ensure fair opportunity to domestic goods.”

The announcement comes at a time when Flipkart is in talks to raise as much as $3 billion and explore the public markets. Both Amazon and Flipkart are also the subject of an ongoing antitrust probe in India.

This is the second major amendment the Indian government has proposed in recent years. In 2018, too, New Delhi had proposed tougher rules for e-commerce firms that, when enforced in early 2019, left Amazon and Flipkart scrambling to delist hundreds of thousands of items from their stores and made their investments in affiliated firms way more indirect.

Today’s proposal comes months after Reuters, citing company documents, reported that Amazon had given preferential treatment to a small group of sellers in India, publicly misrepresented its ties with those sellers and used them to circumvent foreign investment rules in the country.

At the time, the Confederation of All India Traders, an influential India trader group that represents tens of millions of brick-and-mortar retailers, had called on New Delhi to ban Amazon in the country. Around the same time, India’s commerce ministry had said it was reviewing the matter.

Following this morning’s announcement that Hyundai has closed its acquisition of Boston Dynamics, another automotive company has posted some robotics news. The Toyota Research Institute announcement is decidedly less earthshaking than that big deal — if anything, it’s more of a progress check on what the division has been working on.

Of course, incremental updates tend to be the name of the game when it comes to robotics of all sorts. This does, however, shed some interesting light on the work TRI has been doing in the home. Today the company announced some key advances to robotics it has designed to perform domestic tasks.

“TRI roboticists were able to train robots to understand and operate in complicated situations that confuse most other robots, including recognizing and responding to transparent and reflective surfaces in a variety of circumstances,” the Institute writes in a blog post.

Image Credits: Toyota Research Institute

With settings like kitchens, the robots come in contact with a variety of transparent and reflective surfaces — a hurdle for traditional vision systems. Specifically in the kitchen, things like a transparent glass or reflective appliance can create an issue.

“To overcome this, TRI roboticists developed a novel training method to perceive the 3D geometry of the scene while also detecting objects and surfaces,” TRI Robotics VP Max Bajracharya said in a post describing the research. “This combination enables researchers to use large amounts of synthetic data to train the system.” Using synthetic data also alleviates the need for time-consuming, expensive or impractical data collection and labeling.

With an aging population in its native Japan, Toyota has made eldercare a key focus in its ongoing robotics research. So it makes a lot of sense that sort of robotics tasks form a core of much of its research in the category, as well as those elements that bleed into the work it’s doing on Woven City. And certainly the company gets credit for putting in some work here, before the orchestrated appearances we’ve seen of robotics offerings from companies like Samsung.

Image Credits: Toyota Research Institute

“It’s not only about keeping people in their homes longer and living independently,” Bajracharya  recently told me in an interview. “That’s one aspect of it — but in Japan, in 20-30 years, the number of people who are over 65 will roughly be the same as the number of people who are under 65. That’s going to have a really interesting socioeconomic impact, in terms of the workforce. It’s probably going to be much older and we at Toyota are looking at how these people can keep doing their jobs, so they can get the fulfillment from doing their jobs or staying at home longer. We don’t want to just replace the people. We really think about how we stay human-centered and amplify people.”

The powerful device launched more than a year ago for double the price. This deal makes it one of the cheapest Android phones around.

Uber has reached a deal to become the sole owner of Latin American delivery startup Cornershop, just one year after acquiring a majority stake in the company. The ride-hailing giant said in a regulatory filing Monday that it will purchase the remaining 47% interest in Cornershop in exchange for 29 million shares. The transaction is expected to close in July.

Uber announced in 2019 plans to take a majority ownership in Cornershop. That transaction wasn’t completed until the third quarter of 2020 other than in Mexico, which closed in January 2021. This latest agreement, which was reached June 18 and reported Monday, will make Cornershop a wholly owned subsidiary of Uber. The deal is a logical next-step in the Uber-Cornershop relationship, a source familiar with the matter told TechCrunch.

The deal suggests Uber’s bullishness in delivery hasn’t waned. With Cornershop as wholly owned subsidiary, Uber can beef up its grocery delivery options, a service made popular during the pandemic. The company started offering grocery delivery in select cities across Latin America, Canada and the U.S. last summer after it acquired Postmates in a deal valued at $2.65 billion. Uber CEO Dara Khosrowshahi said in a statement that the company’s grocery and new verticals business has exceeded a $3 billion annual bookings run rate for this year.

“That’s why we’re excited to deepen our commitment to the team at Cornershop and to support their vision as they scale globally,” he added. “Together, we will double down on the strategy of bringing same-day grocery delivery to the Uber platform worldwide.”

Cornershop, which is headquartered in Chile, was founded in 2015 by Oskar Hjertonsson, Daniel Undurraga and Juan Pablo Cuevas. The company expanded its operations to eight countries up and down the Americas, including Chile, Mexico, Brazil, Colombia, Costa Rica, Peru, the U.S. and Canada. The company raised $31.7 million over four rounds of funding from investors that include Accel and Jackson Square Ventures.

Uber wasn’t the only grocery service with its eyes on Cornershop; the startup was supposed to be acquired by Walmart in a $225 million deal, but it ultimately fell through after Mexican antitrust regulators blocked the deal from moving forward. It is unclear whether this deal will be subject to the same risks.

Uber faces stiff competition from grocery retailers themselves, many of whom offer delivery through partnering with startups like DoorDash or Favor Fleet.

TechCrunch has reached out to Cornershop for comment. We will update the story if they respond.

The story has been updated to include Uber’s comments.

Soldier-entrepreneurs are unfortunately still a rare breed in Silicon Valley, despite the region’s origins in Cold War defense spending. While the courage and perseverance required to fight in an overseas battlefield (or the office bureaucracy on base) would seem a perfect fit for the travails of the founder, the reality is that the journey from solider to CEO is a long and arduous transition.

A couple of organizations have popped up over the years to make the leap easier. For instance, Patriot Boot Camp, which I profiled back in 2018, works in the earliest days of the startup journey to help veteran founders learn the key skills of building a company and fundraising. Yet, there still remains a lack of networking and funding that particularly targeted this group of entrepreneurs.

That’s the opportunity that Emily McMahan and Sherman Williams, the two managing partners of Academy Investor Network, saw when looking at their peers at the five U.S. service academies. The firm is targeting a final first fund of $50 million, and today announced the close of its anchor investor, insurance and financial services provider USAA, which will invest $2.5 million. Prior to USAA, the fund’s first investor was Scout Ventures, which focuses on frontier tech and where McMahan is a venture partner.

McMahan graduated from West Point in 2001 right as the War on Terror began. I “went really straight into the action post 9/11,” she said. From there, she pivoted into a startup targeting the federal market, before founding Capitol Post, which taught entrepreneurial skills to veterans and their spouses and also had a co-working space in northern Virginia before folding into Bunker Labs in 2019.

“My career has always been focused around community, working with entrepreneurs, and really kind of harnessing the energy of the veteran entrepreneur community,” she said. She is based in DC, and also sits on the board of Patriot Boot Camp.

The Pentagon, headquarters of the Department of Defense. Image Credits: Jeremy Christensen/Getty Images

Meanwhile, Williams hails from the Naval Academy, graduating in 2003 before going on four deployments in the midst of the war in Iraq, which started just weeks before his graduation. He ultimately ended up at Chicago’s Booth School, where he studied finance and pivoted his career into investment banking focused on M&A. “I knew I needed to learn a lot,” he said. I “started investing and advising startups while as a banker, and then made made the flip to work with Emily to start AIN Ventures.” He’s based in New York City.

The firm’s first foray into venture was building an investment syndicate composed of alums of the five service academies, which was launched in June 2020. “We’ve got astronauts, we’ve got Navy SEALs,” McMahan said. “We really think that we’re very well positioned as a group, because we’ve all lived it on active duty, and now we continue to see it and continue to serve.” The syndicate has invested in a handful of deals since launching, including into Polco, an online community engagement platform for local governments, and online identity service ID.Me.

“This is also where a lot of our service academy grads are excited to have a seat at that table and help these companies scale, connect, hire, all of those things,” McMahan said. “So we’re really excited to be on par with some of these other institutions — the Harvards, the Stanfords — who also have these types of syndicates.“

Williams said the goal with the syndicate was to work out the investment processes for the firm before turning toward a more traditional VC fund model. They kicked off fundraising in January.

The new fund has a two-track thesis of investing in veterans across industries while also selecting startups building “dual-use” technologies that are useful to the private sector and governments. “Civic technology, disaster tech — think FEMA — defense tech, obviously the military, intelligence agencies, and space tech. Things in and around climate that will affect constituents and governments,” Williams said as examples where he sees the firm investing. “We want the company, when it achieves maturity, to achieve the majority of the revenue outside the government.”

The firm centers its investing around the stage right after product-market fit, although since the veterans pipeline can be a real gauntlet, Williams said the firm will selectively invest at the pre-seed stage there.

The firm is also seeking to diversify the ranks of both venture capitalists and founders. McMahan said, “I’m a female, Sherman’s an African American, you know, even in the military, we’re sort of a unique team, and so we think we are also able to reach out to a much broader audience of underrepresented minorities, women, and groups, and we feel like we’re pretty attractive in terms of that as a team.“

USAA’s anchor investment is perhaps not surprising given the financial services company’s focus on active service members and veterans. It has made other investments and sponsorships around veteran entrepreneurship, including into Patriot Boot Camp. The company has also invested directly in startups such as PrecisionHawk and Coinbase.

Can you build almost an entire PC with just Amazon Prime Day deals? Yes. Yes, you can.

The Exchange is back after its brief hiatus. Anna and I have some really neat stuff planned, so stick with us every morning this week. — Alex

Building a consumer-facing fintech company is expensive. And if you want to build one in a sector crowded by both incumbent companies and richly funded startups, it can be super expensive.

That was the lesson we learned in late 2020 by examining operating results from a number of neobanks.

Neobanks are essentially software layers atop banking infrastructure, offering consumers digital-first, mobile-friendly and often lower-fee banking services. The push to rethink consumer banking is a global effort, with neobanks cropping up in essentially every market you can think of. Private investors have shown up in droves to fund competing neobanks because they have the potential to secure users — customers — that generate revenues for long periods of time.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

Investors have proven more than willing to fund huge investments in growth and product at many neobanks, leading to steeply negative operating results at the unicorns. In short, while American consumer fintech Chime has disclosed positive EBITDA — an adjusted profitability metric — many neobanks that we’ve seen numbers from have demonstrated a stark inability to paint a path to profitability.

That could be changing.

Recent results from Revolut that TechCrunch covered earlier this morning show that the company had a deeply unprofitable 2020. But if we dig into its quarterly results, there’s good news to be found. Neobanks could be maturing into their cost structure at last.

So today we’ll parse the key Revolut financial results and look at what we can dig up from Starling and Monzo. Perhaps the somewhat good financial news from Revolut is not merely to be found at just one neobank?

Revolut’s 2020

Our own Romain Dillet has a broad look at Revolut’s business here, if you would like a wider lens. We only care about its raw financial results at the moment.

Here are the big numbers:

• 57% revenue growth from £166 million in 2019 to £261 million in 2020.
• Gross profit growth of £123 million in 2020, up 215% from 2019.
• Gross margin of 49% in 2020, what Revolut described as nearly a doubling.
• 2020 operating loss of £122 million from £98 million in 2019.
• Total loss of £168 million in 2020, up from £107 million in 2019.

The gist of these figures is that the company’s revenue growth was solid, but improving gross margins allowed its gross profit to spike in 2020.

Luxury sports car manufacturer Porsche AG is going into the battery business. The automaker said Monday it plans to open a new factory that will produce high-performance cells through a joint venture with lithium-ion battery developer Customcells.

Porsche invested in “the high double-digit millions” in the new joint venture, dubbed Cellforce Group GmbH, executive board member Michael Steiner told reporters in a media briefing ahead of the announcement. The factory also benefited from a €60 million ($71.4 million) investment from the German government and the state of Baden-Württemberg, where it will be located. Chemical company BASF SE was selected to supply the cathode materials.

The batteries will use silicon as the anode material, which Porsche says will significantly boost the energy density and their capacity to withstand high temperatures — both important variables for racing cars, which must be recharged quickly, but challenging in battery production (batteries don’t tend to like getting very hot).

For that reason, the factory will be small-scale, at least compared to other automakers such as the 35 gigawatt-hour “gigafactory” capacity at the Tesla and Panasonic joint facility in Sparks, Nevada or even its parent company VW’s plan to bring 240 GwH of production to Europe by 2030. Porsche and Customcells’ aim is an annual capacity of 100 megawatt-hours, or around enough batteries for 1,000 vehicles, starting in 2024. The initial workforce is expected to grow from around 13 people to up to 80 by 2025.

The automaker has no plans to scale the technology for use in Porsche’s more mainstream lineup of vehicles, Steiner said, though he noted that there may be a chance for higher volume in the future if the company sees a potential to bring down production costs. “In this market, we are looking for special purpose cells for high-end cars and motorsports, and this is not available in the market today,” he said.

It may be a challenge to scale this technology to passenger vehicles. The silicon anode-based cell chemistry has not shown the capacity to function in very cold conditions or to remain stable over many charging cycles, Porsche said in a statement. But it wouldn’t be the first time that a Porsche vehicle benefited from technology developed for the race track: its leading electric model Taycan borrowed many of its technical features from the Porsche 919 Hybrid racing car.

Although the first vehicles to use these batteries will be Porsche-made, Steiner said the technology will be made available to other brands in the Volkswagen Group, like Lamborghini or Bugatti.

“The battery cell is the combustion chamber of the future,” Porsche CEO Oliver Blume said in a statement Monday. “This joint venture allows us to position ourselves at the forefront of global competition in developing the most powerful battery cell and make it the link between the unmistakable Porsche driving experience and sustainability. This is how we shape the future of the sports car.”

A study found that a system used to identify cases of sepsis missed most instances and frequently issued false alarms.

The Biden administration this spring announced an executive order designed to strengthen government cybersecurity defenses in the wake of several major recent hacks, including the SolarWinds, Microsoft Exchange Server and Pulse Secure incidents, which impacted numerous federal agencies and private companies. The order’s importance was underscored by the DarkSide ransomware attack on Colonial Pipeline just a few weeks later.

One key element of the cyber executive order is a “software bill of materials” (SBOM) that vendors would be required to provide as part of the federal procurement process. The SBOM would detail the exact software components utilized in a given product, including any open-source components, making it much easier and faster for federal agencies to determine whether they are subject to a vulnerability uncovered in one of these components.

The SBOM is an important step in shoring up federal cybersecurity, but it’s not enough. Understanding the software components included in various products will help agency security teams react more quickly when vulnerabilities come to light, but in other scenarios, like SolarWinds-style supply-chain attacks that surreptitiously insert software components, its impact is limited.

That’s why the Biden administration should extend the cyber executive order to include not only an SBOM, but also “behavior transparency.”

Transparency requirements are not a new concept in technology. Certificate transparency (CT) is a public ledger of all certificates issued by any public certificate authority (CA) that provides a framework for monitoring and auditing CA activity, while Apple’s recently announced App Tracking Transparency allows users to see what activity apps are tracking and opt out. Behavior transparency is a proposed application of this concept to known software behaviors.

The purpose of a behavior transparency framework is to enumerate the expected actions of interest that a given piece of software will take on a device or on the network. This helps security analysts distinguish between expected noise and indications of compromise. This, in turn, can give security teams an advantage in identifying the exploitation of unknown vulnerabilities in any proprietary or open-source software.

The good news is that the enumeration of common software behaviors is already a standard industry practice for external network activity. Most major software vendors, including Meraki, McAfee, Tenable, LogMeIn/GoToMeeting, and my own company, ExtraHop, already publish lists of common product behaviors. Even SolarWinds has documentation describing its network behaviors.

But the Biden administration can help effect critical changes that improve upon this industry practice and improve the overall security posture for public and private organizations alike.

Establish standards for behavior transparency

First, the cyber executive order should form a working group in partnership with representative software and security software vendors, as well as organizations such as MITRE, to create standards for the types of network activity that must be included for full behavior transparency.

At a minimum, this should include things like external network destinations, internal network connection behavior with other software components, and, where applicable, a list of associated network ports and the purposes for which those ports are used. The behavior transparency framework should also include other network behavior, especially (but not limited to) anything that looks like scanning or reconnaissance behavior.

Make behavioral data available to common security tools

Second, the cyber executive order should mandate that known software behaviors be published in a machine-readable format such as JSON or CSV that could be ingested into common security products like security information and event management (SIEM), firewalls, endpoint protection platforms, network detection and response, and change management tools.

This is a crucial distinction from the current model, in which most behaviors are listed on a webpage or in a PDF that isn’t machine-readable. With this change, common security tools could use that machine-readable behavioral data to help build baselines for activity within an organization to more quickly and accurately detect deviations that indicate compromise. Meraki is already doing this by providing its list in CSV format.

Centralize access to behavioral information

Third, the cyber executive order should establish a clearinghouse for behavior transparency data, administered by the Cybersecurity and Infrastructure Security Agency or another appropriate federal agency. The status quo is to hunt around on a vendor’s website, consult their in-product documentation or open a support case to find out about network behavior. If the information provided is incorrect, that’s also a support case.

The current decentralized approach is deeply problematic. Unfettered network access for enterprise software products introduces substantial security risk — Zero Trust frameworks have been established to prevent precisely this — but typical practitioners do not have the time or expertise to individually track down the expected behaviors of each piece of enterprise software they have in the environment. Without centralized access to behavior transparency data, even the best Zero Trust implementations will have major gaps surrounding enterprise software.

A clearinghouse would provide a centralized repository for behavior transparency data, organized by company, product and product version. A forum like GitHub is an ideal mechanism for such a clearinghouse, providing a widely used, centralized repository for this information.

Streamline feedback between users and vendors

Fourth, the clearinghouse should include a mechanism by which product users can easily provide feedback to software vendors. Feedback can be in the form of issues or even pull requests, though the companies should be involved in approving changes. This way, deficiencies in the behaviors can be pointed out in a public forum. Most deficiencies will be for reasons like a product update that wasn’t reflected in the behavior transparency data, though as time goes on, companies will ideally make it a practice to make sure these are kept up to date. But there will also be true positives found.

Protecting the software supply chain with behavior transparency

The SolarWinds software supply chain attack, first disclosed in December 2020, illustrates and underscores the importance of behavior transparency. Prior to December 11, when FireEye first identified the vulnerability in the SolarWinds Orion software, at least two other cybersecurity companies, Palo Alto and Fidelis, identified that their SolarWinds installations communicating with the attacker-controlled “stage 1” avsvmcloud[.]com domain. Palo Alto observed and blocked additional malicious behavior, but at the time neither company determined that the communication with avsvmcloud[.]com itself was suspect. That’s due in large part to the notorious amount of “noise” involved in looking at network data.

But if more organizations had ready access to SolarWinds’ behavior transparency data, as well as a forum in which to compare deviations from the baseline, things might have played out differently.

SolarWinds Orion doesn’t reach out to a lot of external destinations, so when the first stage of the supply chain attack started hitting subdomains off of “appsync-api.eu-west-1.avsvmcloud[.]com,” an analyst on a threat hunt running a SIEM query, or a machine-learning-based EDR or NDR product armed with that information, might have more quickly determined that something was amiss.

Likewise, a low-friction public feedback mechanism could have tipped off SolarWinds and the industry that what seemed like noise in isolation (“appsync-api, seems legit?”) was actually something far more nefarious.

The cyber executive order, alongside the sanctions on Russia, are strong early indications that the Biden administration intends to take a far more proactive approach to cybersecurity. Critical to the success of these efforts will be the partnership the administration forges with private-sector technology providers. Establishing standards at the federal level for disclosures about software products will benefit cybersecurity in the private sector, as well as improve the overall security of the software supply chain.

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