Gartner: Q3 smartphone sales down 5.7% to 366M, stemming Covid-19 declines earlier this year
As we head into the all-important holiday sales period, new numbers from Gartner point to some recovery for the smartphone market as vendors roll out a raft of new 5G handsets. Q3 smartphone figures published today showed that smartphone unit sales declined 5.7% globally over the same period last year to 366 million units. Yes, it’s a drop, but it is still a clear improvement on the first half of this year, when sales slumped by 20% in each quarter, due largely to the effects of Covid-19 on spending and consumer confidence overall.
In terms of brands, Samsung continued to lead the pack in terms of overall units, with 80.8 million units, and a 22% market share. In fact, the Korean handset maker and China’s Xiaomi were the only two in the top five to see growth in their sales in the quarter, respectively at 2.2% and 34.9%. Xiaomi’s numbers were strong enough to see it overtake Apple for the quarter to become the number-three slot in terms of overall sales rankings. Huawei just about held on to number two. See the full chart further down in this story with more detail.
Also worth noting: overall mobile sales — a figure that includes both smartphones and feature phones — were down 8.7% 401 million units. That underscores not just how few feature phones are selling at the moment (smartphones can often even be cheaper to buy, depending on the brands involved or the carrier bundles), but also that those less sophisticated devices are seeing even more sales pressure than more advanced models.
Smartphone slump: it’s not just Covid-19
It’s worth remembering that even before the global health pandemic, smartphone sales were facing slowing growth. The reasons: after a period of huge enthusiasm from consumers to pick up devices, many countries reached market penetration. And then, the latest features were too incremental to spur people to sell up and pay a premium on newer models.
In that context, the big hope from the industry has been 5G, which has been marketed by both carriers and handset makers as having more data efficiency and speed than older technologies. Yet when you look at the wider roadmap for 5G, rollout has remained patchy, and consumers by and large are still not fully convinced they need it.
Notably, in this past quarter, there is still some evidence that emerging/developing markets continue to have an impact on growth — in contrast to new features being drivers in penetrated markets.
“Early signs of recovery can be seen in a few markets, including parts of mature Asia/Pacific and Latin America. Near normal conditions in China improved smartphone production to fill in the supply gap in the third quarter which benefited sales to some extent,” said Anshul Gupta, senior research director at Gartner, in a statement. “For the first time this year, smartphone sales to end users in three of the top five markets i.e., India, Indonesia and Brazil increased, growing 9.3%, 8.5% and 3.3%, respectively.”
The more positive Q3 figures coincide with a period this summer that saw new Covid-19 cases slowing down in many places and the relaxation of many restrictions, so now all eyes are on this coming holiday period, at a time when Covid-19 cases have picked up with a vengeance, and with no rollout (yet) of large-scale vaccination or therapeutic programs. That is having an inevitable drag on the economy.
“Consumers are limiting their discretionary spend even as some lockdown conditions have started to improve,” said Gupta of the Q3 numbers. “Global smartphone sales experienced moderate growth from the second quarter of 2020 to the third quarter. This was due to pent-up demand from previous quarters.”
Digging into the numbers, Samsung has held on to its top spot, although its growth was significantly less strong in the quarter. “Fortunately” for Samsung, it’s still a long way ahead. That is in part because number-two Huawei, with 51.8 million units sold, was down by more than 21% since last year, in the wake of a public relations crisis after sanctions in the US and UK, due to accusations that its equipment is used by China for spying. That also led the company last week to confirm the long-rumored plan to sell off its Honor smartphone division. (That deal will involve selling the division, reportedly valued at around $15 billion, to a consortium of companies.)
It will be interesting to see how Apple’s small decline of 0.6% to 40.6 million units to Xiaomi’s 44.4 million, will shift in the next quarter, on the back of the company launching a new raft of iPhone 12 devices.
“Apple sold 40.5 million units in the third quarter of 2020, a decline of 0.6% as compared to 2019,” said Annette Zimmermann, research vice president at Gartner, in a statement. “The slight decrease was mainly due to Apple’s delayed shipment start of its new 2020 iPhone generation, which in previous years would always start mid/end September. This year, the launch event and shipment start began 4 weeks later than usual.”
Oppo, which is still not available through carriers or retail partners in the US, rounded out the top five sellers with just under 30 million phones sold. The fact that it and Xiaomi do so well despite not really having a phone presence in the US is an interesting testament to what kind of role the US plays in the global smartphone market: huge in terms of perception, but perhaps less so when the chips are down.
“Others” — that category that can take in the long tail of players who make phones, continues to be a huge force, accounting for more sales than any one of the top five. That underscores the fragmentation in the Android-based smartphone industry, but all the same, its collective numbers were in decline, a sign that consumers are indeed slowly continuing to consolidate around a smaller group of trusted brands.
3Q20 Market Share (%) 3Q19
3Q19 Market Share (%) 3Q20-3Q19 Growth (%) Samsung 80,816.0 22.0 79,056.7 20.3 2.2 Huawei 51,830.9 14.1 65,822.0 16.9 -21.3 Xiaomi 44,405.4 12.1 32,927.9 8.5 34.9 Apple 40,598.4 11.1 40,833.0 10.5 -0.6 OPPO 29,890.4 8.2 30,581.4 7.9 -2.3 Others 119,117.4 32.5 139,586.7 35.9 -14.7 Total 366,658.6 100.0 388,807.7 100.0 -5.7
Source: Gartner (November 2020)
Author: Ingrid Lunden
Posted: 23 November 2020, 10:48 am
The promise and challenge of Roblox’s future in China
In a much-anticipated move, California-based gaming firm Roblox filed to go public last week. One aspect driving the future growth of the children- and community-focused gaming platform is its China entry, which it fleshes out in detail for the first time in its IPO prospectus.
Like all gaming companies entering China, Roblox must work with a local publishing and operations partner. And like Riot Games, Supercell, Epic Games, Activision Blizzard, Ubisoft, Nintendo and many more, Roblox chose Tencent, the world’s largest gaming firm by revenue, according to Newzoo.
The partnership, which began in 2019, revolves around a joint venture in which Roblox holds a 51% controlling stake and a Tencent affiliate called Songhua owns a 49% interest. The prospectus notes that Tencent currently intends to publish and operate a localized version of the Roblox Platform (罗布乐思). Internationally, the platform allows people to create games and play those programmed by others.
User-generated content is in part what makes Roblox popular amongst young gamers, but that social aspect almost certainly makes its China entry trickier. It’s widely understood that the Chinese government is asserting more control over what gets published on the internet, and in recent times its scrutiny over gaming content has heightened. Industry veteran Wenfeng Yang went as far as speculating that games with user-generated content will “never made [their] path to China,” citing the example of Animal Crossing.
Roblox says it believes it’s “uniquely positioned” to grow its penetration in China but its “performance will be dependent on” Tencent’s ability to clear regulatory hurdles. It’s unclear what measures Roblox will take to prevent its user-generated content from running afoul of the Chinese authorities, whose appetite for what is permitted can be volatile. Tencent itself has been in the crosshairs of regulators over allegedly “addictive” and “harmful” gaming content. It also remains to be seen how Roblox ensures its user experience won’t be compromised by whatever censorship system that gets implemented.
“Roblox China may only introduce the platform to China developers, asking them to join and make content for the global market, not necessarily bringing the platform to China under such heavy regulations,” Yang, who is the U.S. general manager for Chinese games maker Yoozoo, told Techcrunch.
At the most basic level, Roblox claims it works to ensure user safety through measures designed “to enforce real-world laws,” including text-filtering, content moderation, automated systems to identify behaviors in violation of platform policies, and a review team. The company expresses in its filing optimism about getting China’s regulatory greenlight:
“While Tencent is still working to obtain the required regulatory license to publish and operate Luobulesi [Roblox’s local name] in China, we believe the regulatory requirements specific to China will be met. In the meantime, Luobu is working towards creating a robust developer community in China.”
The company is rightfully optimistic. China is the world’s largest gaming market, while Tencent has a proven history of converting its social network users into gamers and publishing foreign games. Roblox’s marketing focus on encouraging “creativity” might also sit well with Beijing’s call for tech companies to “do good,” an order Tencent has answered. Roblox’s Chinese website suggests it’s touting part of its business as a learning and STEM tool and shows it’s seeking collaborations with local schools and educators.
Nonetheless, the involvement of Tencent is the elephant in the room in times of uncertain U.S.-China relations. The Committee on Foreign Investment in the U.S. or CFIUS, which is chaired by the Treasury Department, was inquiring about data practices by Tencent-backed gaming studios in the U.S. including Epic and Riot, Bloomberg reported in September.
Roblox isn’t exempt. It notes in the prospectus that CFIUS has “made inquiries to us with respect to Tencent’s equity investment in us and involvement in the China JV.” It further warns that it “cannot predict what effect any further inquiry by the Committee on Foreign Investment in the U.S. into our relationship with Tencent or changes in China-U.S. relations overall may have on our ability to effectively support the China JV or on the operations or success of the China JV.”
The other obstacle faced by all foreign companies entering China is local clones. Reworld, backed by prominent Chinese venture firms such as Northern Light Venture Capital and Joy Capital, is one. The game is unabashed about its origin. In a Reddit post responding to the accusation of it being “a ripoff of Roblox,” Reworld pays its tribute to Roblox and admits its product is “built on the shoulders of Roblox,” while claiming “it did not take any code from Roblox Studio.”
The Beijing-based startup behind Reworld has so far raised more than $50 million and had about 100 developers working on Reworld’s editing tool and 50 other operational staff, its co-founder said in a June interview. In comparison, Roblox had 38 employees in China by September, 38 of whom were in product and engineering functions. It’s actively hiring in China.
Roblox cannot comment for the story as it’s in the IPO quiet period.
Added expert comment on November 23, 2020.
Author: Rita Liao
Posted: 23 November 2020, 5:49 am
Original Content podcast: ‘The Crown’ introduces its Princess Diana
“The Crown,” Netflix’s lavish historical drama about the reign of Queen Elizabeth II, has returned for a fourth season that focuses on Elizabeth’s relationship with Prime Minister Margaret Thatcher, and on Prince Charles’ troubled marriage to Diana, Princess of Wales.
Anthony and (especially) Jordan remain fans of the show, and they found season four to be particularly compelling. Yes, the monarchy is a little ridiculous and “The Crown” does have a tendency to simplify real-world events, but its retelling of the Charles-Diana relationship is heartbreaking, and it also takes the time to show some of the damage wrought by Thatcher’s policies.
Darrell, on the other hand, remains a skeptic, with little patience for all the attention paid to the royal family. He was particularly exasperated by the show’s deviation from historical reality, and by performances (particularly Gillian Anderson as Thatcher) that felt more like cheesy, “Saturday Night Live”-style imitations.
In addition to reviewing the show, we also discuss this week’s announcement that “Wonder Woman 1984” will be premiering in both theaters and on HBO Max on December 25.
You can listen to our review 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 follow us on Twitter or send us feedback directly. (Or suggest shows and movies for us to review!)
If you’d like to skip ahead, here’s how the episode breaks down:
0:30 “Wonder Woman 1984” discussion
10:45 “The Crown” Season 4 review (mild spoilers)
Author: Anthony Ha
Posted: 22 November 2020, 7:50 pm
Byju’s-owned Indian startup WhiteHat Jr sues critics
Karan Bajaj, an Indian entrepreneur who teaches meditation and in his recent book invites others to live a life away from the noise, is going after the most vocal critics of his startup.
Bajaj, founder of coding platform WhiteHat Jr, has filed a defamation case against Pradeep Poonia, an engineer who has publicly criticized the firm for its marketing tactics, the quality of the courses on the platform, and aggressive takedowns of such feedback. On Monday, WhiteHat Jr, filed a similar case against Aniruddha Malpani, an investor who has shared unflattering feedback about the startup.
Most of the customers of WhiteHat Jr, which is aimed at kids, live in America, and demand for its one-to-one classes has surged nearly 90% this year, according to the startup.
In the lawsuit against Poonia — in which Bajaj (pictured left above) is seeking $2.7 million in damages — Poonia has been accused of infringing trademarks and copyright of properties owned by WhiteHat Jr, defaming and spreading misleading information about the startup and its founder, and accessing the company’s private communications app.
The lawsuit also accuses Poonia of publicly sharing phone numbers of WhiteHat Jr employees and making strong accusations such as likening the startup’s marketing tactics to “child sexual abuse.”
The lawyers further claim that Poonia recorded sessions of some classes conducted by WhiteHat Jr, asked questions that were not relevant to the course with the “humiliate and harass” the teachers and then posted them online.
“As some of the one-on-one communications between the Plaintiffs’ teachers and the Defendant have demonstrated, the former have felt extremely threatened and harassed by the Defendant which is even more pertinent given that the Plaintiffs’ entire workforce of 11,000 teachers is female,” the suit says.
“The Defendant’s activities have critically affected the Plaintiffs’ business and resulted in loss of its goodwill and reputation, and the confidence of its customers in its business. It is submitted that as a consequence of the Defendant’s tweets, Plaintiffs have suffered a steep dip in the conversion rate from trial classes to actual registrations which has severely affected revenue its revenue.”
But the lawsuit, riddled with spelling and grammatical errors, appears to be also indicative of just how little criticism WhiteHat Jr, owned by India’s second most valuable startup Byju’s, is willing to accept.
According to internal posts of a Slack channel of WhiteHat Jr shared by Poonia, the startup has aggressively used copyright protection to take down numerous unflattering feedback about the startup in recent months.
The suit also raises concern with Poonia accusing WhiteHat Jr of “murdering” an imaginary kid that featured in one of its earlier ads.
A 12-year-old child named “Wolf Gupta” appeared in earlier ads of WhiteHat Jr, which claimed that the kid had landed a lucrative job at Google. The kid does not exist, the lawyers of Bajaj say in the suit. Ironically that was also the argument Poonia, who spent a long time trying to unearth more information about this supposed poster child of WhiteHat Jr, was making in his tweets.
In its second lawsuit, the startup alleges that Malpani has been critical of WhiteHat Jr because he is an investor in rival platforms Bibox Labs, Multibhashi and ConceptOwl. (They don’t appear to be rivals.) The startup is seeking damages of about $1.9 million from Malpani.
Scores of education startups in India have reported skyrocketing growth in recent months as schools remain shut across the country amid the coronavirus pandemic. Byju’s is the most valuable edtech startup in the world with a roster of marquee backers including Mary Meeker‘s Bond.
Even as most Indians tend not to pay for online services — just ask Facebook, which has amassed over 400 million users in India and makes little in the country — the education category is an outlier. Indian families continue to spend heavily on their children’s education in hopes of paving the way for a better future.
Rage against the machine: behind Byju’s swift silencing of dissent (The Ken)
India’s WhiteHat Jr is startup hell (The Morning Context)
WhiteHat Jr and the curious case of disappearing dissent (Forbes India)
Advertising body asks WhiteHat Jr to pull down ads (Forbes India)
The story was updated at 2.30pm IST on Monday to add details about the second lawsuit.
Author: Manish Singh
Posted: 22 November 2020, 5:01 pm
Week in Review: Venture-backed loneliness
Hello everyone and welcome back to Week in Review! Natasha here, subbing in for Lucas while he’s out. This week, we’ll talk about loneliness raising money and how Zoom fatigue is fueling innovation.
For everyone celebrating, happy holidays! Keep on the lookout next week for more festive content, including the launch of our annual TechCrunch Gift Guides.
If you’re reading this on TechCrunch, you can sign up to get this in your inbox.
The big story
Over the last month, I spent time working out of virtual HQs. Dozens of founders are using spatial technology and gamification to create online worlds. Consumers are invited to congregate and create some of the spontaneity of in-person events, such as the work day or weddings. Founders are testing if the metaverse can be brought into the mainstream. After tossing a few succulents around myself, I was impressed (especially as a non-gamer) over how intuitive the platform felt. It feels special to bump into someone in 2020.
You can read more of my story here, which includes a demo video and pictures to give you a feel for the space. For today, though, I want to talk about what I think the rise of virtual HQs is not-so-subtly telling us.
Founders are trying to disrupt loneliness in this chapter of the coronavirus pandemic. There’s a shift in what the technology at its core is trying to fix, and it’s a little dynamic called Zoom fatigue.
For example, in March, we saw startups race to try to bring remote work to the masses. Now, in November, we’re seeing startups race to fix the broken, fatigued world of remote work.
The issue here, I think, is that founders are trying to innovate a solution to a lack of spontaneity and togetherness in our lives. Spontaneity, by definition, cannot be forced. And the community will always feel different in person. These inherent clashes make us, or at least me, question what technology’s constraints are. That said, virtual event platform Hopin and its $2 billion valuation shuts me right up.
Still, as we see startups chase to fix the next big pain point that everyone can agree on, it will be important to track what’s a venture-backable problem, and what’s a more existential one.
The round up
A White House in transition
It’s been a busy week for a shifting White House and big tech. President Trump fired U.S. cybersecurity official Chris Krebs for debunking false election claims. Meanwhile, two platforms that have fed fires of misinformation, Facebook and Twitter, had yet another testimony in front of Congress. Big tech will likely continue to face backlash when the Biden Administration takes lead, especially when it comes to antitrust regulation. However, it’s not all bad news for tech: President-elect Joe Biden’s infrastructure plan and tech-friendly transition team could help out startups. More here.
The race for a COVID-19 vaccine
This week, Pfizer and BioNTech sought emergency approval from the U.S. Food and Drug Administration for its COVID-19 vaccine, which is 95% effective. The news follows Moderna’s report that its vaccine is 94.5% effective. While proposed approval could get vaccines in the hands of high-risk populations, wide-spread vaccines likely won’t be available until 2021. Keep reading here.
Apple’s latest Intel
As my colleague Brian Heater puts it, “every refresh can’t be a revolution” in hardware product updates. That said, Apple’s latest trio of Macs has impressed. We have reviews on the Mac mini, Macbook Air, and MacBook Pro. Notably, the line is powered by Mac’s in-house microchips, pushing an effort that has been in the works since 2008. It’s a win for Apple, and loss for Intel, which had until now been powering Macs. Still, Intel seems to be taking its break-up with Apple alright, since announcing its own white-label laptop.
TC: Sessions Space is approaching fast
NASA and SpaceX successfully launched four astronauts — and a special guest — into space for their first operational Dragon Crew Mission. History has been made – which makes our upcoming event even more exciting and timely. This year, TechCrunch is hosting its first-ever dedicated space event on December 16 and 17. The TC: Sessions Space agenda is packed, and includes fireside chats with the head of the US Space Force, NASA executives and more. Get your tickets now.
- Amazon’s drone delivery team faced layoffs amid an organization-wide restructuring. Meanwhile, Amazon launched Amazon Pharmacy, a delivery service for prescription medications.
- TechCrunch parent company Verizon Media has sold HuffPost to BuzzFeed in a stock deal.
- Google unwraps its AI-powered doodle generator.
- Higher education continues to struggle, and even edtech doesn’t know if it can save the institutions from shuttering.
Thanks for reading,
Author: Natasha Mascarenhas
Posted: 22 November 2020, 2:16 pm
A bug meant Twitter Fleets could still be seen after they disappeared
Twitter is the latest social media site to allow users to experiment with posting disappearing content. Fleets, as Twitter calls them, allows its mobile users post short stories, like photos or videos with overlaying text, that are set to vanish after 24 hours.
But a bug meant that fleets weren’t deleting properly and could still be accessed long after 24 hours had expired. Details of the bug were posted in a series of tweets on Saturday, less than a week after the feature launched.
The bug effectively allowed anyone to access and download a user’s fleets without triggering a notification that the user’s fleet had been read and by whom. The implication is that this bug could be abused to archive a user’s fleets after they expire.
Using an app that’s designed to interact with Twitter’s back-end systems via its developer API. What returned was a list of fleets from the server. Each fleet had its own direct URL, which when opened in a browser would load the fleet as an image or a video. But even after the 24 hours elapsed, the server would still return links to fleets that had already disappeared from view in the Twitter app. (Twitter later disputed this.)
When reached, a Twitter spokesperson said a fix was on the way. “We’re aware of a bug accessible through a technical workaround where some Fleets media URLs may be accessible after 24 hours. We are working on a fix that should be rolled out shortly.”
Twitter acknowledged that the fix means that fleets should now expire properly, it said it won’t delete the fleet from its servers for up to 30 days — and that it may hold onto fleets for longer if they violate its rules. We checked that we could still load fleets from their direct URLs even after they expire.
Author: Zack Whittaker
Posted: 22 November 2020, 2:44 am
Human Capital: Uber’s Black employee base shrinks
Welcome back to Human Capital, where I break down the latest in diversity, equity and inclusion, and labor in tech.
TL;DR: This week, Apple announced its third head of diversity and inclusion in four years, Uber’s Black employee base shrunk despite the company committing to anti-racism and Reddit brought on its second Black board member this year.
Meanwhile, Facebook’s content moderators spoke out against the company for forcing some of them to work in the office during a pandemic and a new report from Silicon Valley Rising showed 63% of blue-collar tech workers are Black or Latinx.
Sign up here to get this as a newsletter in your inbox every Fridays at 1 p.m. PT. However, I’m taking next week off so you won’t be hearing from me until December 4.
Facebook content moderators demand better protections and benefits
A group of more than 200 Facebook content moderators, as well as some full-time employees, demanded the tech company “stop needlessly risking moderators’ lives,” they wrote in an open letter to Facebook and the company’s contractors that manage content moderators, Accenture and Covalen. The demands came after The Intercept reported how some Facebook content moderators — who deal with things like sexual abuse and graphic violence — were required to come back into the office during the pandemic. Shortly after they returned to the office, a Facebook content moderator reportedly tested positive for COVID-19.
Facebook later defended its decision to bring some content moderators into the office, saying it’s “not able to route some of the most sensitive and graphic content to outsourced reviewers at home,” its VP of Integrity Guy Rosen said on a press call. “This is really sensitive content. This is not something you want people reviewing from home with their family around.”
Turo commits $1 million to addressing wealth inequality
Car-sharing marketplace Turo teamed up with Kiva to offer interest-free loans to Black people and folks from traditionally underserved communities to buy cars and then share them on Turo. The $1 million commitment aims to address the issue of wealth inequality in the United States.
Called the Turo Seed Initiative, those who are eligible can raise up to $15,000 via crowdfunding and Turo’s matching program. In order to raise money on Kiva, folks must use the funding for business purposes, which includes car sharing on Turo. Through Kiva, they can raise up to $7,500 and Turo will then match up to $7,500. From there, they can buy a car and list it on Turo.
Tech’s cafeteria workers, security officers, etc. are predominantly Black or Latinx
A Silicon Valley Rising report recently showed about 63% of blue-collar tech workers are Black or Latinx. These are the workers who cook and serve food in tech company cafeterias, drive tech shuttles or work as security officers or custodians.
Also this week, a group of cafeteria workers who formerly worked inside Verizon Media’s offices protested outside its CEO’s home in San Francisco. These workers were laid off by Verizon Media contractor Compass in September. Meanwhile, LinkedIn stopped paying more than 260 food service workers at the end of June and Tesla laid off 280 janitors and bus drivers in April.
Transitioning from Trump to Biden: Now is not the time for complacency
On this week’s episode of TC Mixtape, we spoke with Y-Vonne Hutchinson of Ready Set about DEI and what a new administration means for the work she and so many others are doing. Here’s an excerpt from our conversation:
While I’m optimistic and so thrilled at the prospect that we’re not going to see harm like we did under the Trump administration, I also remember the Obama administration. This isn’t like these structures that got spun up — this didn’t happen out of the blue.
I hope that we have learned some really valuable lessons when it comes to the impact that not just like lack of diversity inclusion, because that feels so milk toast to say, but like these exclusionary and harmful organizations, platforms, powerful people in our industry, like I hope we’ve learned from our mistakes there. But I think that there’s always going to be a temptation to say, ‘well, we got Trump out and the work is done’ [or] feel a little bit complacent. I worry about that complacency. Because, you know, the dirty, nasty undercurrents, all of that stuff that got us to where we are today — all of that’s still there, all that festering toxicity.
We still have work to do, and I’m not saying that everybody’s a bad actor and you know, get rid of it. But I think that we really need to be critical and think about what accountability looks like for our industry and make sure that we’re not falling into the same bad habits that we did that got us here in the first place. So I’m kind of waiting to see how that plays out.
Apple announces a new head of D&I
Apple recently announced Barbara Whye, former head of D&I at Intel, will be joining them as its VP of inclusion and diversity in early 2021. The announcement came after its former head of D&I, Christie Smith, left the company in June “to spend time with her family,” an Apple spokesperson said at the time. Smith had been in the role since late 2017, after Denise Young Smith, the company’s first-ever VP of diversity and inclusion, left after only being in the role for six months.
Uber’s D&I efforts fall short this year
Uber recently released its latest diversity report, showing a decline in the overall representation of Black employees in the U.S. despite an increased focus on racial justice this year in the wake of the police killing of George Floyd. In 2019, Uber was 9.3% Black while this year, only 7.5% of its employees are Black.
Uber attributes the decline in Black employees to its layoffs earlier this year, where about 40% of its employees in community operations were laid off, Uber Chief Diversity Officer Bo Young Lee told TechCrunch.
“As a company that has so publicly stated its stance on anti-racism, that’s not acceptable,” she said.
That unintentional decline in the Black population at Uber “led to a lot of soul searching,” she said. “Dara was certainly upset by it. Every leader was. It reinforced how easy it is to lose some ground after all the work you’ve done.”
Reddit adds another Black director to the board
Reddit has appointed Paula Price, who has served on the board of six public companies, including Accenture and Deutsche Bank, to its board of directors. Price’s appointment makes her one of two Black directors on the company’s board.
“Paula’s vast experience as a world-class financial leader and strategic advisor will be a tremendous asset to us in the years ahead,” Reddit CEO Steve Huffman said in a statement. “Best of all, she embodies the two qualities most important to us for this Board seat: expertise leading companies through periods of transformative growth and real passion for Reddit’s mission.”
Before Reddit co-founder Alexis Ohanian stepped down from the board and urged the company to appoint a Black director to take his place, Reddit had zero Black board members. Reddit took Ohanian’s advice and appointed Y Combinator Michael Seibel to the board.
LAPD bans commercial facial recognition
Following an inquiry from Buzzfeed regarding officers’ use of Clearview, the LAPD has banned the use of commercial facial recognition programs. That’s not to say LAPD won’t continue using facial recognition that compares images to suspect booking records but it will no longer use facial recognition tools that rely on social media and other websites.
Author: Megan Rose Dickey
Posted: 21 November 2020, 9:00 pm
How the pandemic drove the IPO wave we see today
I had a neat look into the world of mental health startup fundraising planned for this week, but after being slow-motion carpet-bombed by S-1s, that is now shoved off to Monday and we have to pause and talk about COVID-19.
The pandemic has been the most animating force for startups and venture capital in 2020, discounting the slow movement of global business into the digital realm. But COVID did more than that, as we all know. It crashed some companies as assuredly as it gave others a boost. For every Peloton there is probably a Toast, in other words.
Such is the case with this week’s crop of unicorn IPO candidates, though they are unsurprisingly weighted far more toward the COVID-accelerated cohort of startups instead of the group of startups that the pandemic cut off at the knees.
More simply, COVID-19 gave most of our recent IPOs a polite shove in the back, helping them jog a bit faster toward the public-offering finish line. Let’s talk about it.
Roblox, the gaming company that targets kids, has been a beneficiary during the COVID-19 pandemic, as folks stayed home and, it appears, gave their kids money to buy in-game currency so that their parents could have some peace. Great business, even if Roblox warned that growth could slow sharply next year, when compared to its epic 2020 gains.
But Roblox is hardly the only company taking advantage of COVID-19’s impacts on the market to get public while their numbers are stellar. We saw DoorDash file last week, crowing from atop a mountain of revenue growth that came in part from you and I trying to stay home since March. As it turns out you order more delivery when you can’t leave your house.
Affirm got a COVID-19 boost as well, with not only e-commerce spend growing — Affirm provides point-of-sale loans to consumers during online shopping — but also because Peloton took off, and lots of folks chose to finance their new exercise bike with the payment service. Call it a double-boost.
The IPO is well-timed. Wish falls into the same bucket, though it did hit some supply-chain and delivery issues due to the pandemic, so you could argue it either way.
Regardless, as we have seen from global numbers, COVID-19 is very much not done wreaking havoc on our health, happiness, and ability to go about normal life. So the trends that this week’s S-1s have shown us still have some room to run.
Which is irksome for Airbnb, a unicorn that was supposed to have debuted already via a direct listing, but instead had to hit pause, borrow money, lay off staff, and now jog to the startup finish line with less revenue in this Q3 than the last. In time, Airbnb will get back to full-speed, but among our new IPO candidates it’s the only company net-harmed by COVID-19. That makes it special.
There are other trends to keep tabs on, regarding the pandemic. Not every software company that you might expect to be thriving at the moment actually is; Workday shares are off 8% today as I write to you, because the company said that COVID-19 is harming its ability to land new customers. Here’s its CFO Robynne Sisco from its earnings call
Keep in mind, however, that while we have seen some recent stability in the underlying environment, headwinds due to COVID remains particularly to net new bookings. And given our subscription model, these headwinds that have impacted us all year will be more fully evident in next year’s subscription revenue weighing on our growth in the near-term.
Yeesh. So don’t look at recent IPOs and think that all things are good for all companies, or even all software companies. (To be clear, the pandemic is a human crisis, but my job is to talk about its business impacts so here we are. Hugs, and please stay as safe as you can.)
There was so much news this week that we have to be annoyingly summary.
I caught up with Brex CEO Henrique Dubugras the other day, giving The Exchange a chance to parse what happened to the company during the early COVID days when the company decided to cut staff. The short answer from the CEO is that the company went from growing 10% to 15% each month, to seeing negative growth — not a sin, Airbnb saw negative gross bookings for a few months earlier this year — and as the company had hired for a big year, it had to make cuts. Dubugras talked about how hard of a choice that was to make.
Brex’s business rebounded faster than the company expected, however, driven in part by strong new business formation — some data here — and companies rapidly moving into the digital realm and moving to finance systems like Brex’s.
Looking forward, Dubugras wants to expand the pool of companies that Brex can underwrite, which makes sense as that would open up its market size quite a lot. And the company is as remote as companies are now, with its CEO opening up during our chat about the pros and cons of the move. Happily for the business fintech unicorn, Dubugras said that some of the negatives of companies working more remotely haven’t been as tough as expected.
Next up: Growth metric. Verbit, a startup that uses AI to transcribe and caption videos, raised a $60 million Series C this week led by Sapphire Ventures. I couldn’t get to the round, but the company did note in its release that it has seen 400% year-over-year revenue growth, and that its “revenue run-rate [has] grown five-fold since 2019.” Nice.
Jai Das led the round for Verbit, and, in a quirk of good timing, I’m hosting an Extra Crunch Live with him in a few weeks. (Extra Crunch sub required for that, head here if you need one. The discount code ‘EQUITY’ should still be working if it helps.)
Telos, a Virginia-based cybersecurity and identity company went public this week. It fell under our radar because there is more news than we have hands to type it up. Such is the rapid-fire news cycle of late 2020. But, to catch us both up, Telos priced midrange but with an upsized offering, valuing it around $1 billion, according to MarketWatch.
After going public, Telos shares have performed well. Cybersecurity is having one hell of a year.
Turning back to our favorite topic in the world, SaaS, ProfitWell’s Patrick Campbell dropped a grip of data on the impact of COVID-19 on the B2B SaaS market. Mostly it’s positive. There was a hit early on, but then growth seems to have accelerated. Just keep in mind the Workday example from earlier; not everyone is in software growth paradise as 2020 comes to a close.
And, finally, after Affirm released its S-1 filing, competing service Klarna decided it was a good time to drop some performance data of its own. First of all, Klarna — thanks. We like data. Second of all, just go public. Klarna said that it grew from 10 million customers in the United States to 11 million in three weeks, and that the second statistic was up 106% compared to its year-ago tally.
Affirm, you are now required by honor to update your S-1 with even more data as an arch-nerd clapback. Sorry, I don’t make the rules.
Various and Sundry
- Robinhood is no longer going to have no CEO two CEOs, it will now have one CEO. Good, The TechCrunch Exchange approves of all things IPO-prep.
- And speaking of Robinhood, this week The Exchange tried to figure out how much it grew in Q3. The answer? Not as much as it grew in Q2.
- Lime is profitable now? Mostly. What a turnaround.
- Bird wants to take flight via a SPAC. We have our doubts.
- Thank you, Google Chrome team.
- SaaS VCs are still super bullish on software growth, as Bessemer’s Byron Deeter made clear this week.
- This is what I look like when I am asleep.
Alright, that’s enough of all that. Chat to you soon, and I hope that you are safe and well and good.
Author: Alex Wilhelm
Posted: 21 November 2020, 9:00 pm
Affirm, Airbnb, C3.ai, Roblox, Wish file for tech IPO finale of 2020
Editor’s note: Get this free weekly recap of TechCrunch news that any startup can use by email every Saturday morning (7 a.m. PT). Subscribe here.
The wait was long but this week the time was right: Airbnb finally filed its S-1 and so did Affirm, C3.ai, Roblox, and Wish. We are likely to see these five price on public markets before the end of an already superlative year for tech IPOs. The ongoing pandemic and political turmoil were not scary enough, apparently.
This coming decade, you have to think that we’ll see a more even spread of tech companies going public. Many of the companies above have been bottled up for years behind privately funded growth strategies. Today, however, the industry has a better grasp of SPACs and direct listings, and various funding routes. Companies have more options from their founding for how they might grow and exit one day. Public investors in 2020 also seem to have a deeper appreciation for the current revenue numbers and future growth opportunities for tech companies. Why, I can still remember all the geniuses who bragged about shorting the Facebook IPO not so long ago.
Will we see a more even spread of where IPOs come from? While all of this week’s filers are headquartered in San Francisco or environs, that now feels almost like a coincidental reference to the years when these companies were founded. More states have been minting their own unicorns, with Ohio-based Root Insurance recently going public and Utah-based Qualtrics heading (back) that way. Tech startups are now global, meanwhile, and plenty of countries are working to keep their unicorns closer to home than New York.
On to the headlines from TechCrunch and Extra Crunch:
What does a Biden administration mean for tech?
What does Joe Biden intend as president around technology policy? On the one hand, tech companies might not be returning to the White House too fast. “All told, we’re seeing some familiar names in the mix, but 2020 isn’t 2008,” Taylor Hatmaker explains about potential presidential appointments from the industry. “Tech companies that emerged as golden children over the last 10 years are radioactive now. Regulation looms on the horizon in every direction. Whatever policy priorities emerge out of the Biden administration, Obama’s technocratic gilded age is over and we’re in for something new.”
However, tech industries and companies focused on shared goals might find support. In a review of Biden’s climate-change policies, Jon Shieber looks at major green infrastructure plans that could be on the way.
Any policies that a Biden administration enacts would have to focus on economic opportunity broadly, and much of the proposed plan from the campaign fulfills that need. One of its key propositions was that it would be “creating good, union, middle-class jobs in communities left behind, righting wrongs in communities that bear the brunt of pollution, and lifting up the best ideas from across our great nation — rural, urban and tribal,” according to the transition website. An early emphasis on grid and utility infrastructure could create significant opportunities for job creation across America — and be a boost for technology companies. “Our electric power infrastructure is old, aging and not secure,” said Abe Yokell, co-founder of the energy and climate-focused venture capital firm Congruent Ventures. “From an infrastructure standpoint, transmission distribution really should be upgraded and has been underinvested over the years. And it is in direct alignment with providing renewable energy deployment across the U.S. and the electrification of everything.”
The future of construction tech
A skilled labor shortage is piling on top of the construction industry’s traditional challenges this year. The result is that tech adoption is getting a big push into the real world, Allison Xu of Bain Capital Ventures writes in a guest column for Extra Crunch this week. She maps out six main construction categories where tech startups are emerging, including project conception, design and engineering, pre-construction, construction execution, post construction and construction management. Here’s an excerpt from the article about that last item:
- How it works today: Construction management and operations teams manage the end-to-end project, with functions such as document management, data and insights, accounting, financing, HR/payroll, etc.
- Key challenges: The complexity of the job site translates to highly complex and burdensome paperwork associated with each project. Managing the process requires communication and alignment across many stakeholders.
- How technology can address challenges: The nuances of the multistakeholder construction process merit value in a verticalized approach to managing the project. Construction management tools like Procore, Hyphen Solutions and IngeniousIO have created ways for contractors to coordinate and track the end-to-end process more seamlessly. Other players like Levelset have taken a construction-specific approach to functions like invoice management and payments.
Virtual HQs after the pandemic?
Pandemic-era work solutions like online team meeting spaces are heading towards a less certain, vaccine-based reality. Have we all gone remote-first enough that they will have a real market, still? Natasha Mascarenhas checks in with some of the top companies to see how it’s looking, here’s more:
With the goal of making remote work more spontaneous, there are dozens of new startups working to create virtual HQs for distributed teams. The three that have risen to the top include Branch, built by Gen Z gamers; Gather, created by engineers building a gamified Zoom; and Huddle, which is still in stealth.
The platforms are all racing to prove that the world is ready to be a part of virtual workspaces. By drawing on multiplayer gaming culture, the startups are using spatial technology, animations and productivity tools to create a metaverse dedicated to work.
The biggest challenge ahead? The startups need to convince venture capitalists and users alike that they’re more than Sims for Enterprise or an always-on Zoom call. The potential success could signal how the future of work will blend gaming and socialization for distributed teams.
Across the week
This week wound up being incredibly busy. What else, with a week that included both the Airbnb and Affirm IPO filings, a host of mega-rounds for new unicorns, some fascinating smaller funding events and some new funds?
- Affirm has filed to go public! The fintech unicorn is big, growing and losing less money over time. We were pretty impressed in our first look. Then, with a bit more time, we dug deeper and found a weakness or two. Still, Affirm is heading public and not in poor shape.
- Airbnb filed, and we jumped into an Equity Shot as fast as we could on Tuesday to get our minds around the news. Since then, Danny dug through the venture capital winners circle — a surprisingly small subset of firms! — and we also got into some questions that I had about the company’s finances.
- Robinhood is said to have an IPO in the books, so we talked a bit about what we know concerning its Q3 growth.
- And then there was edtech, as always. This week we talked about Tencent backing Udemy, Duolingo raising again and Transfr picking up a Series A that we thought was super interesting.
- Danny wanted to talk about the Trust & Will Series A. We tried to not make that many jokes.
- ZenBusiness raised $55 million as well, in an outsized Series B.
- Financial Venture Studio put together a new fund to cut small checks into seed-stage fintech startups. We think that’s great. Especially given what we know about what is going on in the fintech venture world.
- And Natasha walked us through her latest deep-dive, a look into the world of virtual headquarters. This led to the worst joke of the show.
What a week! Three episodes, some new records, and a very tired us after all the action. More on Monday!
Author: Eric Eldon
Posted: 21 November 2020, 7:00 pm
Hulu UX teardown: 5 user experience fails and how to fix them
Hulu is the first major streaming platform to offer a social watching experience. And with most major league sports now being allowed to resume behind closed doors, Hulu’s combined proposition with ESPN will likely help entertain the service’s 30+ million users over the winter months.
But users have a surplus in choice of streaming services right now, so how will Hulu stay competitive?
With the help of UX expert Peter Ramsey from Built for Mars, we’re going to give Hulu an Extra Crunch UX teardown, demonstrating five ways it could improve its overall user experience. These include easy product comparisons, consistent widths, proportionate progress bars and other suggestions.
Comparing features inside packages
If your product/service has different tiers/versions, ensure that the differences between these options are obvious and easy to compare.
The fail: Hulu has four different packages, but the listed features are inconsistent between options, making it incredibly difficult to compare. Instead of using bullet points, they’ve buried the benefits within paragraphs.
The fix: Break the paragraphs down into bullet points. Then, make sure that the bullet points are worded consistently between options.
Steve O’Hear: I’m really surprised this one got past the marketing department. Not a lot to say except that I would argue that when UX, including layout and copywriting decisions, become decoupled from business goals and customer wants, a company is in trouble. Would you agree that’s what has happened here?
Peter Ramsey: Honestly, this happens all the time. I think it’s just a symptom of the designers building things that look nice, not things that work nicely. I probably raise this issue on about one-third of the private audits I do — it’s that common.
Keep a consistent width
Try to maintain a consistent page width throughout a single journey — unless there’s a major benefit to changing the width.
The fail: During the Hulu sign-up process, the page width doubles at a totally unnecessary point. This is disorienting for the user, with no obvious rationale.
The fix: Hulu has a pretty consistent first-half of their journey and then it drops the ball. I’d redesign these “extra-wide” pages to be the default width.
Author: Steve O'Hear
Posted: 21 November 2020, 4:08 pm
This Week in Apps: Apple slashes commissions, Twitter launches Fleets, warnings about Parler
Welcome back to This Week in Apps, the TechCrunch series that recaps the latest OS news, the applications they support and the money that flows through it all.
The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.
Apple reduces App Store commissions to 15% for ‘vast majority’ of developers
The changes apply to developers with less than $1 million in revenue.
Apple this week announced a major shakeup to its App Store commission rate. The company, as of January 1, 2021, will only charge App Store developers 15% on paid apps and in-app purchases if their business has not exceeded $1 million in proceeds during 2020 for all their apps combined. Qualification for the new App Store Small Business Program, as it’s called, will be re-assessed revenues on an annual basis going forward.
The changes arrive at a time when Apple has been under increased regulatory scrutiny over how its App Store operates, which includes antitrust investigations in the U.S. and E.U. It has also waged war with developers throughout the year over in-app purchases, leading the company to revise its already complex rules even further, and spell out how and when it gets to charge its so-called “Apple tax.” And it’s in the middle of a nasty legal battle with Fortnite maker Epic Games, which doesn’t want to be forced to use Apple payments or even, necessarily, the App Store.
The commission changes may help silence some disgruntled voices from the wider app development community, while giving Apple a way to show regulators that it’s enabling fair competition.
However, several of Apple’s largest and harshest critics reacted negatively to the news.
The advocacy group, the Coalition for App Fairness, which includes Epic, Basecamp, Deezer, Match Group, Spotify and many others, said: “developers want a level playing field from Apple, not a symbolic gesture.” They argued that Apple still owns the customer relationship, the threshold of $1M is arbitrary, and they said the majority of developers who “generate livable revenue,” won’t benefit.
Apple, though, had claimed the change would benefit the “vast majority” of the App Store development community. Today its App Store hosts 1.8 million apps that reach more than 1.5 billion Apple devices.
Individual developers we spoke to, including those who would qualify for the program, weren’t complaining. And many were fairly surprised by Apple’s move.
“I think it’s fair to say that this change wouldn’t have happened without either the impending antitrust investigations, or the Epic lawsuit. But something can be both a very clever piece of political manoeuvring, and still genuinely welcome and beneficial to the vast majority of developers out there,” said indie developer James Thomson, maker of the PCalc app and others.
“We fall significantly under the million dollar threshold, so we’re looking at roughly a 20% increase in our income under the new system. We’re in a much better position than most businesses under the pandemic, in that our sales are purely digital and people always need calculators (or dice), but we’ve certainly seen a decrease in sales over the last eight months. I can see the current situation taking a good while to resolve, so that extra revenue is appreciated,” he added. “These changes will particularly help the small developers who have traditionally been the heart of the developer community, and I as happy about this, as I am surprised,” Thomson said.
Others also said they were generally happy with the changes. But some expressed reservations about the details of how the program works.
“Overall, I’m very pleased with this new program,” said developer David Smith, maker of Widgetsmith, Watchsmith, Sleep++ and a range of other iOS apps. “It will help countless small developers who can really benefit from that extra margin. I’m excited for all the indie developers who will now be able to focus full time on their apps just that little bit sooner.”
But Smith noted that it was odd that the program isn’t applied in a way that’s similar to a graduated tax rate, where, he explained, “your first $1M is at 15% and the rest at the higher rate.”
“The proposed system creates an awkward differentiation between developers, and one of the things I’ve always appreciated most about the App Store was that it treats developers equally,” Smith continued. “It also creates a strange disincentive for growth for mid-sized businesses who are approaching the threshold.”
We turned to third-party analytics firms to try to better understand the market.
According to App Annie data, around 98% of all iOS developers in 2019 (meaning, unique publisher accounts) fell under the $1 million annual consumer spend threshold. This supports Apple’s claims that the “vast majority” of developers would benefit. This group of developers accounts for 567,000 unique apps, or 93% of all apps generating revenue through in-app purchases.
Combined, their revenues represented just under 8% of the overall App Store revenue share — in other words, it’s money Apple could stand to lose.
App Annie also found that the group of mid-range developers who are “nearing” that $1 million threshold is really small. The data indicates roughly 0.5% of developers are making between $800,000 and $1 million. And just over 1% are in the $500,000-$800,000 range.
Most developers have much smaller revenue streams, with 87.7% making less than $100,000 in 2019.
Some expressed concern that Apple’s system would unfairly penalize developers who made just $1 over the $1 million threshold, and then trap them at the higher rate (30%).
But others suspected that the percentage of developers who were growing “slowly” at over $800,000 in ARR was actually pretty small.
From the data we’ve collected, it seems that subscription-based apps tend to keep growing fairly quickly once they pass that $1 million threshold. According to data from subscription platform RevenueCat, the apps on its platform grow, on average, at 1.5x year-over-year. So once an app crossed the $1 million threshold, the most likely scenario is that it would make $1.5 million the next year. Plus, the apps that are “nearing” the threshold tend to be growing even faster than the average rate, we understand. And they rarely backslide.
“Apple has made a lot of changes to the App Store over the years, and this is one of the first I’ve seen where there’s really not much to complain about,” said RevenueCat CEO Jacob Eiting. “It’s impactful to the App Store economy broadly and meaningful to individual indie developers. Sure it may have been for PR and they might not have a lot of downside in doing this, but it’s genuinely a great thing for so many developers,” he said.
We’ll have more data on this subject in the weeks ahead.
Parler’s funders revealed…it’s the Mercers; parents warned about the app
The “Free speech” app Parler rising in the charts after Facebook and Twitter increased fact-checks, turns out to be funded by prominent conservative donor and Trump supporter Rebekah Mercer, The WSJ revealed.
Rebekah is the daughter of Robert Mercer, the hedge fund manager and principal investor in Cambridge Analytica — the data analytics firm behind the largest data leak in Facebook history, where 87 million users had their data harvested for the purposes of political advertising. The Mercers have also backed Breitbart News, the Heritage Foundation think tank, the Federalist Society, a super PAC that initially backed Ted Cruz’s bid for the Republican presidential nomination (before switching to Trump) and Citizens United (which distributed a 2007 anti-Clinton movie and succeeded in a Supreme Court ruling that reversed campaign finance restrictions), among other things.
This week, the nonprofit ParentsTogether issued a warning to parents about Parler, saying that the app’s weak moderation policies and extremist user base put kids at risk of exploitation, abuse and recruitment for racist violence. The organization described Parler as hosting dangerous content, including hate speech, incitements of violence and widespread disinformation.
In addition, the group was concerned that while Apple’s App Store rates the app at 17+, Google Play has it listed as suitable for kids ages 13+.
“All parents of children under age 18 to immediately check their kids’ phones and tablets to ensure that their children have not installed Parler,” the group warned parents, in a statement. “If your child has installed Parler, we strongly recommend that you delete their account and the app.”
Twitter launches Fleets
Twitter this week launched its own version of Stories — aka “Fleets” — to its global user base. The product, which allows users to post ephemeral content that disappears in 24 hours, had already rolled out to select markets, including Brazil, India, Italy, South Korea and, most recently, Japan. The rollout almost immediately ran into some snags, with Fleets suffering performance and stability issues. Twitter said it would pause things while it worked this out. On Thursday, the company announced the feature was globally available.
Reactions to Fleets has been mixed. Some users hate the feature, which is designed to encourage more users to post to Twitter, when they’ve otherwise been too shy to participate — largely because of Twitter’s “cancel culture” vibe where mistakes, bad takes and unpopular opinions are harshly criticized, even when they’re more minor offenses. It’s not clear how a Stories feature resolves this, however, as Fleets are still being published to Twitter’s public social network.
Twitter also said it will begin testing a Clubhouse rival where users will join audio chat rooms.
These changes follow the activities by activist investor Elliott Management Group, which took a sizable stake in Twitter earlier this year, along with Silver Lake. The firms did so with a plan to push the company for more innovation and new executive leadership. The companies later struck a deal to spare Twitter CEO Jack Dorsey’s ousting, gain board seats, and put someone on the board with expertise in technology and artificial intelligence. Dorsey disagreed with the characterization that their involvement had any impact on product development.
- Apple’s IDFA is targeted by EU privacy complaints. Apple had already told advertisers they’ll soon have to allow users the option to opt-out of ad tracking, but the new complaints are more about the fact that IDFA was ever created and stored in the first place, and that Apple’s planned changes don’t go far enough as they restrict its use for third parties, but not Apple itself.
- Apple’s Developer Transition Kits (DTKs) help developers get their apps ready for Apple’s silicon. But it turns out they won’t be able to install iOS or iPadOS apps like M1 Macs can.
- Google reminds Android developers they only have until January 18, 2021 to get approval to continue using background location data if they want to stay on Google Play.
- Apple releases a new version of iOS 14.2 for iPhone 12. The update appears to fix the iPhone 12 mini lock screen issue that caused some users’ lock screens to not respond to touches. The update also fixes issues with MMS messages, Made for iPhone hearing devices and more.
- Google also reminds Android developers that, starting Augut 2021, Google Play will require all apps to use the Android App Bundle publishing format and make other changes.
- Apple now allows developers to market and distribute their subscriptions with offer codes. These one-time, alphanumeric codes can be redeemed either on the App Store or within the app itself, allowing developers to acquire and retain customers or win back lapsed subscribers with special deals. Here are some tips on putting them to work.
- Apple’s iOS 14.3, beta 2 indicates that Apple will do away with the intermediate step of opening the Shortcuts app when app shortcuts are launched. This was one of the major pet peeves from the iOS 14 home screen customization trend, where users designed iOS themes using custom icons and widgets.
- Due to Apple’s App Store rules, Google Stadia and Nvidia’s GeForce Now cloud gaming services will both come to iOS as web apps.
Security & Privacy
- Dating app Bumble’s vulnerabilities puts Facebook Likes, locations and pictures of 95 million online daters at risk. Bumble took six months to fix the flaws and says no user data had been compromised.
- TikTok expands parental controls to include search, commenting and account privacy. The company launched Family Pairing in April, allowing parents to link their account to their teen’s in order to manage screen time, direct messaging and whether or not the teen’s account would be in “Restricted” mode — a special mode which limits TikTok’s feed to a safer set of more moderated content. This week, it also gave parents the ability to control whether the teen’s Liked Videos are visible to others, control who can comment on the teen’s videos and decide whether the teen is allowed to use TikTok search.
- Messaging app Go SMS Pro exposed millions of users’ private photos and files. The app, popular on Android, didn’t respond to security researchers about the problem. Typically, companies are given a 90-day deadline before vulnerabilities are made public.
Apps in the News
- Epic Games added video chat to Fortnite, via a Houseparty integration. The company bought the video chat app last year. Players use their phone or tablet as the webcam while they play on PCs, PS4 or PS5.
- Epic Games sues Apple in Australia too. The Fortnite maker is currently in a legal battle in the U.S. over Apple’s requirement to use Apple Pay and pay commissions on in-app purchases. In an interview this week, Epic Games founder Tim Sweeney likened the fight with Apple to a fight for civil rights. (That’s a bit much, we’d say.)
- Snap acquired Voisey, a U.K.-based app that lets users create music tracks and videos by overlaying their own vocals. The app had raise $1.88 million to date, but deal terms weren’t immediately available.
- Google Maps is updated with more COVID info and adds its Assistant driving mode. The COVID layer in Google Maps on Android and iOS can now show the number of all-time detected cases in an area, links to COVID resources from local governments and how busy transit lines are. The driving mode can read texts and lets you control your music from Maps.
- Facebook’s Messenger Kids redesigned to look more like Messenger. The updated app puts chats in a more traditional vertical list, with message and media previews, and bold text and blue dots to indicate their unread status. It also added a new tabbed navigation, which better highlights the separation between apps and games.
- YouTube launches 15-second audio ads aimed at users who listen to music or podcasts while the app plays in the background.
- Apple’s Shazam passes 200 million monthly active users.
- Instagram expands its Guides features and upgrades Search. Guides now allow creators to share tips, resources and other long-form content in a dedicated tab on their profiles. Now, everyone can make guides for Products, Places and Posts. Users can also now search by keywords, instead of just by names, usernames, hashtags and locations.
- Instagram also updates its Threads mobile messaging app. The app now adds a tab for easier navigation between stories and statuses. All users should also now have the tabbed inbox where they can see everyone’s stories, not just close friends, and have the option to publish to stories, not just close friends’ stories.
- Facebook sued an operator of Instagram clone websites. The operator had scraped Instagram data of some 100,000 accounts using its own 30,000 fake accounts that pretended to be humans to avoid detection.
- SoundCloud adds profile verification with official blue checks.
- App Growth Awards announce their finalists.
- Google launches iOS 14 widgets for Gmail, Drive and Fit. Says Calendar and Chrome widgets will come soon.
- State and federal investigators are preparing to bring antitrust charges against Facebook over its acquisition of Instagram and WhatsApp, The Washington Post reports.
- Twitter and Facebook sat for another congressional tech hearing that again largely served to give lawmakers a chance to just talk about whatever they wanted, instead of the topic at hand: social media’s role during the election. The CEOs were asked about their apps’ addictiveness, their algorithms, their approaches to misinformation and more.
- Google pulls the plug on its Expeditions VR app, and instead migrates the VR tours to its Arts & Culture app. *Checks watch*… is the VR future here yet?
- U.S. mobile strategy game spending surges 22% to $2.8 billion in the first 10 months of 2020, Sensor Tower reports. The top game by player spending during this time was Clash of Clans, which generated close to $262 million in the U.S.
- Top home screen widget apps have reached 1 in 7 U.S. iPhones, another Sensor Tower report claims. The five most popular apps — Widgetsmith, Color Widgets, Photo Widget: Simple, WidgetBox and Photo Widget — have collectively seen 13 million iPhone installs since the launch of iOS 14. Globally, they’ve reached 45 million installs to date.
Funding and M&A (and IPOs)
- Language learning app Duolingo confirms its raise of $35 million on a $2.4 billion valuation. The news was reported last week, but the numbers are now official. The app was valued at $1.65 billion earlier this year.
- Baidu to acquire Joyy’s Chinese live-streaming service YY for $3.6 billion. The search giant has been struggling to fight newcomers, like ByteDance, and video giant Kuaishou. Last year, Joyy’s YY took a $1.45 billion majority stake in Bigo, which operates streaming app Bigo Live and TikTok rival Likee.
- OpenPhone raises $14 million to replace outdated corporate phone systems with an app. Yammer founder David Sacks’ Craft Ventures led the round.
- Flipkart acquires AR startup Scapic to build an immersive shopping experience. Deal terms were undisclosed.
- Athlete social platform Strava raises $110 million in Series F financing from TCV and Sequoia Capital, with by Dragoneer Investment Group and existing investors including Madrone Capital Partners, Jackson Square Ventures and Go4it Capital.
- Yubo raises $47.5 million for its social app offering live-streaming rooms, now used by 40 million users. Existing investors Idinvest Partners, Iris Capital, Alven and Sweet Capital returned, and new investor Gaia Capital Partners joined.
- English learning app AllRight raises $5 million from Genesis Investments. The Ukraine startup combines real teachers with AI-powered tutors.
- ContextLogic, the maker of the mobile e-commerce app Wish, filed to go public. Wish saw revenues slow in 2019, but has grown more quickly in 2020. In the first nine months of 2019, Wish generated $1.33 billion in revenue compared with $1.75 billion during the same period in 2020, or up 32%.
- Roblox files for its IPO, noting it has lost $206 million on $589 million in revenue, has 31.1 million daily active users who now spend up to 22.2 billion hours in app, a figure up 122% year-over-year.
Amazon this week launched GameOn for Android, an app that lets users record 30-second to five-minute long gameplay clips — including through a “Recall” feature that saves the clip after it happens. Clips are then shared the GameOn social network or elsewhere on social media. The app supports more than 1,000 games at launch, including PUBG Mobile, Crossy Road, Final Fantasy Brave Exvius and Angry Birds 2. A selfie camera lets gamers add their own commentary to the clips. Winners of weekly challenges get special profile badges. The launch follows Amazon’s release of its cloud gaming platform Luna.
Google Pay launched a major redesign of its app on Android and iOS this week with a ton of new features, including a mobile bank account. The company partnered with 11 banks, including Citi and Stanford Federal Credit Union, to launch Plex, a mobile banking service where accounts are held at partner banks but Google Pay operates as the front end. Plex users will have no monthly fees, overdraft charges or minimum balances and can pay both businesses and friends from their account. They can also explore offers and rewards to save money while shopping and get spending insights, including from their connected bank accounts outside the app. Another new feature makes it easier to split bills with friends, like restaurant checks, rent or utilities.
Moment’s RTRO app
RTRO, launched earlier this year, offers a way to record and share vintage-looking photos and video. This week, the app was updated with “Instant Film,” which lets you emulate instant film photos powered by the app’s “analog effects engine.” The resulting photos will give you the feel of a instant camera pic.
Author: Sarah Perez
Posted: 21 November 2020, 4:08 pm
Watch SpaceX launch a satellite that will monitor the world’s oceans
SpaceX is set to launch a Falcon 9 from Vandenberg Air Force Base in California on Saturday morning, with a target liftoff time of 9:17 AM PST (12:17 PM EST). This is the Sentinel-6 Michael Freilich Mission, which carries a satellite of the same name developed by the European Space Agency, NASA, and both U.S. and European meteorological monitoring bodies.
The Sentinel-6 is named for former NASA Earth Science Division Director Michael Freilich, who occupied the position between 2006 and 2019 and passed away in August. It’s one of two Sentinel-6-series satellites that will be launched for the program, with the Sentinel-6B set to join the Sentinel-6 Michael Freilich sometime in 2025.
SpaceX will be looking to recover the Falcon 9 first stage booster with a powered landing back on Earth at Landing Zone 4 at Vandenberg. This is the first SpaceX launch from Vandenberg since June of last year, though it has flown plenty of missions from both Cape Canaveral Air Force Station and Kennedy Space Center in Florida.
The webcast above will go live approximately 15 minutes prior to the liftoff time, so at around 9:02 AM PST (12:02 PM EST). Should this mission have to be canceled today, there’s a backup opportunity set for Sunday at 9:04 AM PST (12:04 PM PST).
Author: Darrell Etherington
Posted: 21 November 2020, 12:36 pm
All IPOs should be paid for in Robux
This is an all-time first for the show, it’s an Equity Leftovers. Which means that we’re not focusing on a single topic like we would in an Equity Shot. This is just, well, more Equity.
- Our piece looking at which venture capital firms are expected to make the most bank from the recent IPO deluge.
- Roblox’s IPO filing, and our take on its impending debut.
- All things Wish IPO, including what’s up with its revenue costs, and the broader ecommerce market.
- DoorDash’s epic financials, and how COVID helped propel the food delivery giant into the business hall of fame.
- The exit of one of Robinhood’s co-CEOs from the role.
- The HuffPo-Buzzfeed tie-up. And what is up with media companies in general.
And with this, our fourth episode in six days, we shall pause until Monday. Hugs from the Equity crew.
Author: Alex Wilhelm
Posted: 21 November 2020, 12:00 pm
Daily Crunch: Roblox is going public
Roblox opens its books, Snap makes an acquisition and Pfizer and BioNTech seek regulatory approval for their vaccine. This your Daily Crunch for November 20, 2020.
The big story: Roblox is going public
The child-friendly gaming company filed confidentially to go public in October, but it only published its S-1 document with financial information late yesterday.
How do the numbers look? Well, Roblox is certainly growing quickly — total revenue increased 56% in 2019, and then another 68% in the first three quarters of 2020, when it saw $588.7 million in revenue. At the same time, losses are growing as well, nearly quadrupling to $203.2 million during those same three quarters.
The company also acknowledged that its success depends on its ability to “provide a safe online environment” for children. Otherwise, “business will suffer dramatically.”
The tech giants
Snap acquired Voisey, an app to create music tracks overlaying your own vocals — Voisey users can apply audio filters to their voices, and they can browse and view other people’s Voisey tracks.
Despite commitment to anti-racism, Uber’s Black employee base has decreased — Uber’s latest diversity report shows a decline in the overall representation of Black employees in the U.S.
Google, Facebook and Twitter threaten to leave Pakistan over censorship law — This comes after Pakistan’s government granted blanket powers to local regulators to censor digital content.
Startups, funding and venture capital
Loadsmart raises $90M to further consolidate its one-stop freight and logistics platform — Loadsmart offers booking for freight transportation across land, rail and through ports, all from a single online portal.
ORIX invests $60M in Israeli crowdfunding platform OurCrowd — OurCrowd also says that the two groups will collaborate to create financial products and investment opportunities for the Japanese and global market.
Kea raises $10M to build AI that helps restaurants answer the phone — CEO Adam Ahmad says the startup has created a “virtual cashier” who can do the initial intake with customers, process most routine orders and bring in a human employee when needed.
Advice and analysis from Extra Crunch
If you didn’t make $1B this week, you are not doing VC right — Don’t yell at me, Danny Crichton said it!
Why is GoCardless COO Carlos Gonzalez-Cadenas pivoting to become a full-time VC — “I think this is the best moment in entrepreneurship in Europe.”
What is Roblox worth? — A deeper dive into Roblox’s numbers.
(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)
Pfizer and BioNTech to submit request for emergency use approval of their COVID-19 vaccine today — These emergency approvals still require supporting information and safety data, but they are fast-tracked relative to the full, formal and more permanent approval process.
Mixtape podcast: Building a structural DEI response to a systemic issue with Y-Vonne Hutchinson — Hutchinson is the CEO of ReadySet, a consulting firm that works with companies to create more inclusive and equitable work environments.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
Author: Anthony Ha
Posted: 20 November 2020, 11:10 pm
Extra Crunch roundup: A fistful of IPOs, Affirm’s Peloton problem, Zoom Apps and more
Tech companies that go public capture our imagination because they are literal happy endings. An Initial Public Offering is the promised land for startup pilgrims who may wander the desert for years seeking product-market fit. After all, the “I” in “ISO” stands for “incentive.”
A flurry of new S-1s in a single week forced me to rearrange our editorial calendar, but I didn’t mind; our 360-degree coverage let some of the air out of various hype balloons and uncovered several unique angles.
For example: I was familiar with Affirm, the service that lets consumers finance purchases, but I had no idea Peloton accounted for 30% of its total revenue in the last quarter.
“What happens if Peloton puts on the brakes?” I asked Alex Wilhelm as I edited his breakdown of Affirm’s S-1. We decided to use that as the subhead for his analysis.
The stories that follow are an overview of Extra Crunch from the last five days. Full articles are only available to members, but you can use discount code ECFriday to save 20% off a one or two-year subscription. Details here.
Thank you very much for reading Extra Crunch this week; I hope you have a relaxing weekend.
Senior Editor, TechCrunch
What is Roblox worth?
Gaming company Roblox filed to go public yesterday afternoon, so Alex Wilhelm brought out a scalpel and dissected its S-1. Using his patented mathmagic, he analyzed Roblox’s fundraising history and reported revenue to estimate where its valuation might land.
Noting that “the public markets appear to be even more risk-on than the private world in 2020,” Alex pegged the number at “just a hair under $10 billion.”
What China’s fintech can teach the world
For all the hype about new forms of payment, the way I transact hasn’t been radically transformed in recent years — even in tech-centric San Francisco.
Sure, I use NFC card readers to tap and pay and tipped a street musician using Venmo last weekend. But my landlord still demands paper checks and there’s a tattered “CASH ONLY” taped to the register at my closest coffee shop.
In China, it’s a different story: Alibaba’s employee cafeteria uses facial recognition and AI to determine which foods a worker has selected and who to charge. Many consumers there use the same app to pay for utility bills, movie tickets and hamburgers.
“Today, nobody except Chinese people outside of China uses Alipay or WeChat Pay to pay for anything,” says finance researcher Martin Chorzempa. “So that’s a big unexplored side that I think is going to come into a lot of geopolitical risks.”
Inside Affirm’s IPO filing: A look at its economics, profits and revenue concentration
Consumer lending service Affirm filed to go public on Wednesday evening, so Alex used Thursday’s column to unpack the company’s financials.
After reviewing Affirm’s profitability, revenue and the impact of COVID-19 on its bottom line, he asked (and answered) three questions:
- What does Affirm’s loss rate on consumer loans look like?
- Are its gross margins improving?
- What does the unicorn have to say about contribution profit from its loans business?
If you didn’t make $1B this week, you are not doing VC right
“The only thing more rare than a unicorn is an exited unicorn,” observes Managing Editor Danny Crichton, who looked back at Exitpalooza 2020 to answer “a simple question — who made the money?”
Covering each exit from the perspective of founders and investors, Danny makes it clear who’ll take home the largest slice of each pie. TL;DR? “Some really colossal winners among founders, and several venture firms walking home with billions of dollars in capital.
5 questions from Airbnb’s IPO filing
The S-1 Airbnb released at the start of the week provided insight into the home-rental platform’s core financials, but it also raised several questions about the company’s health and long-term viability, according to Alex Wilhelm:
- How far did Airbnb’s bookings fall during Q1 and Q2?
- How far have Airbnb’s bookings come back since?
- Did local, long-term stays save Airbnb?
- Has Airbnb ever really made money?
- Is the company wealthy despite the pandemic?
Autodesk CEO Andrew Anagnost explains the strategy behind acquiring Spacemaker
Earlier this week, Autodesk announced its purchase of Spacemaker, a Norwegian firm that develops AI-supported software for urban development.
TechCrunch reporter Steve O’Hear interviewed Autodesk CEO Andrew Anagnost to learn more about the acquisition and asked why Autodesk paid $240 million for Spacemaker’s 115-person team and IP — especially when there were other startups closer to its Bay Area HQ.
“They’ve built a real, practical, usable application that helps a segment of our population use machine learning to really create better outcomes in a critical area, which is urban redevelopment and development,” said Anagnost.
“So it’s totally aligned with what we’re trying to do.”
Unpacking the C3.ai IPO filing
On Monday, Alex dove into the IPO filing for enterprise artificial intelligence company C3.ai.
After poring over its ownership structure, service offerings and its last two years of revenue, he asks and answers the question: “is the business itself any damn good?”
Is the internet advertising economy about to implode?
In his new book, “Subprime Attention Crisis,” writer/researcher Tim Hwang attempts to answer a question I’ve wondered about for years: does advertising actually work?
Managing Editor Danny Crichton interviewed Hwang to learn more about his thesis that there are parallels between today’s ad industry and the subprime mortgage crisis that helped spur the Great Recession.
So, are online ads effective?
“I think the companies are very reticent to give up the data that would allow you to find a really definitive answer to that question,” says Hwang.
Will Zoom Apps be the next hot startup platform?
Even after much of the population has been vaccinated against COVID-19, we will still be using Zoom’s video-conferencing platform in great numbers.
That’s because Zoom isn’t just an app: it’s also a platform play for startups that add functionality using APIs, an SDK or chatbots that behave like smart assistants.
Enterprise reporter Ron Miller spoke to entrepreneurs and investors who are leveraging Zoom’s platform to build new applications with an eye on the future.
“By offering a platform to build applications that take advantage of the meeting software, it’s possible it could be a valuable new ecosystem for startups,” says Ron.
Will edtech empower or erase the need for higher education?
Without an on-campus experience, many students (and their parents) are wondering how much value there is in attending classes via a laptop in a dormitory.
Even worse: Declining enrollment is leading many institutions to eliminate majors and find other ways to cut costs, like furloughing staff and cutting athletic programs.
Edtech solutions could fill the gap, but there’s no real consensus in higher education over which tools work best. Many colleges and universities are using a number of “third-party solutions to keep operations afloat,” reports Natasha Mascarenhas.
“It’s a stress test that could lead to a reckoning among edtech startups.”
3 growth tactics that helped us surpass Noom and Weight Watchers
I look for guest-written Extra Crunch stories that will help other entrepreneurs be more successful, which is why I routinely turn down submissions that seem overly promotional.
However, Henrik Torstensson (CEO and co-founder of Lifesum) submitted a post about the techniques he’s used to scale his nutrition app over the last three years. “It’s a strategy any startup can use, regardless of size or budget,” he writes.
According to Sensor Tower, Lifesum is growing almost twice as fast as Noon and Weight Watchers, so putting his company at the center of the story made sense.
Send in reviews of your favorite books for TechCrunch!
Every year, we ask TechCrunch reporters, VCs and our Extra Crunch readers to recommend their favorite books.
Have you read a book this year that you want to recommend? Send an email with the title and a brief explanation of why you enjoyed it to email@example.com.
We’ll compile the suggestions and publish the list as we get closer to the holidays. These books don’t have to be published this calendar year — any book you read this year qualifies.
Please share your submissions by November 30.
Dear Sophie: Can an H-1B co-founder own a Delaware C Corp?
My VC partner and I are working with 50/50 co-founders on their startup — let’s call it “NewCo.” We’re exploring pre-seed terms.
One founder is on a green card and already works there. The other founder is from India and is working on an H-1B at a large tech company.
Can the H-1B co-founder lead this company? What’s the timing to get everything squared away? If we make the investment we want them to hit the ground running.
— Diligent in Daly City
Author: Walter Thompson
Posted: 20 November 2020, 10:08 pm