It's October 01, 2020 at 12:15PM
Wednesday, September 30, 2020
Allbirds CEO Joey Zwillinger on the startup’s $100 million round, profitability, and SPAC mania
As people spend less time out in the world and more time daydreaming about when a vaccine will arrive, lifestyle shoes are only gaining traction.
One obvious beneficiary is Allbirds, the San Francisco-based maker of comfortable, sustainable kicks that launched in 2016 and quickly became a favorite in Silicon Valley circles before taking off elsewhere.
Though the company saw its business slow this year because of the pandemic, its products are now available to purchase in 35 countries and its 20 brick-and-mortar stores are sprinkled throughout the U.S. and Europe, with another outpost in Tokyo and several shops in China.
Investors clearly see room for more growth. Allbirds just closed on $100 million in Series E funding at roughly the same $1.6 billion valuation it was assigned after closing on $27 million in Series D funding earlier this year, and blank-check companies have been calling, says cofounder and CEO Joey Zwillinger. He talked with us earlier this week in a chat that has been edited for length and clarity.
TC: Your shoes are sold worldwide. What are your biggest markets?
JZ: The biggest market by far is the U.S., and the same day that we started here in 2016, we also launched in New Zealand, so that’s been very good to us over the last four years, too. But we’ve seen growth in Japan and Korea and China and Canada and Australia. We have a network of warehouses globally that lets us reach 2.5 billion people [who], if they were so inclined, could get their product in three days. We’re proud of the infrastructure we’ve set up.
TC: We’ve all worn shoes a lot less than we might have expected in 2020. How has that impacted your business?
JZ: We’re growing but definitely not at the same pace we would be had the pandemic not occurred. We’re predominantly digital in terms of how we reach people, but stores are important for us. And we had to switch [those] off completely and lost a portion of our sales for a long time.
TC: Did you have to lay off your retail employees?
JZ: A large portion of our retail force was unable to work, but we were luckily able to keep them fully paid for four months, plus [some received] government benefits if they got that. And now all of our 20 stores are up and running again in a way that’s totally safe and everyone feels really comfortable.
We also donated shoes to frontline workers — 10,000 pairs or around a million dollars’ worth.
TC: What does Allbirds have up its sleeve, in terms of new offerings?
JZ: We just launched our native mobile app, and through it we’re able to give our more loyal fans exclusives. It’s a really cool experience that blends technology with fashion. You can try on shoes in a virtual mirror; you’re given information [about different looks] that you wouldn’t have otherwise.
We also launched wool-based weather-proofed running shoes in April that have blown away our expectations but [were fast discovered by] people who haven’t really been running for 10 to 15 years and are running again [because of gym closures]. It’s a super high-stakes category and one that’s hard to break into because people buy on repeat. But we spent two years making it. It’s not like we launched it because of the pandemic. It’s a shoe for 5K to 10K distances — it’s not a marathon shoe or a trail shoe — and that we’ve been able to clearly articulate that speaks to its success, I think.
TC: What about clothing?
We launched underwear and socks last year in a small launch. We developed a textile that hasn’t been used before — it’s a blend of tree fiber and merino wool because our view is that nature can unlock magic. Underwear is typically synthetic — it’s made from plastics — or cotton, which isn’t a great material for a whole bunch of reasons. [Meanwhile] ours is phenomenal for temperature control; it also feels like cashmere.
TC: Patagonia really advertises its social and environmental values. Do you see Allbirds evolving in a similar way, with a growing spate of offerings?
JZ: I’m incredibly humbled by [the comparison]. Given their environmental stewardship of the retail sector, we hope we’re compared to them. But they are much more of an outdoor brand — not a competitor so to speak. And we’d love to share more of the retail world with them so we can do our environmental thing together.
TC: You just raised funding. Are you profitable and, if not, is profitability in sight?
JZ: We’ve been profitable for most of our existence. Having some discipline as we grow is good. We’re not close to the profitability that we’ll eventually have, but we’re still a small company in investment mode. After we emerge from the pandemic, we’ll enter a ramping-up phase.
TC: Everyone and their brother is raising money for a blank-check company, or SPAC, which can make it a lot faster for a private company to go public. Have you been approached, and might this option interest you?
JZ: Yes and no. Yes we’ve been approached, and no, we’re [not interested]. We want to build a great company and being public might be something that helps enable that for a whole bunch of reasons. But we want to do it at the right time, in a way that helps the business grow in the most durable and sustainable fashion. Just jumping at the opportunity of a SPAC without doing the rigorous prep the way we want to, we’re not super focused on that
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Indian startups explore forming an alliance and alternative app store to fight Google’s ‘monopoly’
Google, which reaches more internet users than any other firm in India and commands 99% of the nation’s smartphone market, has stumbled upon an odd challenge in the world’s second largest internet market: Scores of top local entrepreneurs.
Dozens of top startups and firms in India are working to form an alliance and toying with the idea of launching an app store to cut their reliance on Google, five people familiar with the matter told TechCrunch.
The list of entrepreneurs include high-profile names such as Vijay Shekhar Sharma, co-founder and chief executive of Paytm (India’s most valuable startup), Deep Kalra of travel ticketing firm MakeMyTrip, and executives from PolicyBazaar, Sharechat and many other firms.
The growing list of founders expressed deep concerns about Google’s “monopolistic” hold on India, and discussed what they alleged was unfair and inconsistent enforcement of Play Store’s guidelines in the country.
The conversations, which began in recent weeks, escalated on Tuesday after Google said that starting next year developers with an app on Google Play Store must give the company a cut of as much as 30% of several app-related payments.
Dozens of executives “from nearly every top startup and firm” in India attended a call on Tuesday to discuss the way forward, some of the people said, requesting anonymity. A 30% cut to Google is simply unfeasible, people on the call unanimously agreed.
Vishal Gondal, the founder of fitness startup GOQii, confirmed the talks to TechCrunch and said that an alternative app store would immensely help the Indian app ecosystem.
TechCrunch reached out to Paytm on Monday for comment and the startup declined the request.
In recent months, several major startups in India have also expressed disappointment over several of the existing industry bodies, which some say have failed to work on nurturing the local ecosystem.
The tension between some firms and Google became more public than ever late last month after the Android-maker reiterated Play Store’s gambling policy, sending a shockwave to scores of startups in the country that were hoping to cash in on the ongoing season of Indian Premier League cricket tournament.
Google temporarily pulled Paytm’s marquee app from the Play Store citing repeat violation of its Play Store policies. Disappointed by Google’s move, Paytm’s Sharma said in a TV interview, “This is the problem of India’s app ecosystem. So many founders have reached out to us… if we believe this country can build digital business, we must know that it is at somebody else’s hand to bless that business and not this country’s rules and regulations.”
Google has sent notices to several firms in India including Hotstar, TechCrunch reported last month. Indian newspaper Economic Times reported on Wednesday that the Mountain View giant had also sent warnings to food delivery startups Swiggy and Zomato.
Vivek Wadhwa, a Distinguished Fellow at Harvard Law School’s Labor and Worklife Program, lauded the banding of Indian entrepreneurs and likened Silicon Valley giants’ hold on India to the rising days of East India Company, which pillaged India. “Modern day tech companies pose a similar risk,” he told TechCrunch.
Some of the participating members are also hopeful that the government, which has urged the citizens in India to become self-reliant to revive the declining economy, would help their movement.
Other than its reach on Android, Google today also leads the mobile payments market in India, TechCrunch reported earlier this year.
The giant, which has backed a handful of startups in India and is a member of several Indian industry bodies, invested $4.5 billion in Mukesh Ambani’s telecom giant Jio Platforms earlier this year.
India’s richest man Ambani, who runs oil-to-retails giant Reliance Industries, is an ally of Indian Prime Minister Narendra Modi. Jio Platforms has attracted over $20 billion in investment from Google, Facebook, and 11 other high-profile investors this year.
The voluminous investment in Jio Platforms has puzzled many industry executives. “I see no business case for Facebook investing in Jio beyond saying we need regulatory help,” said Miten Sampat, a high-profile angel-investor on a podcast published Wednesday.
“This is a white-collar way of saying there is corruption involved, and if the government gets upset, I have invested somewhere with some friend of the government. All of us are losing at the benefit of one company,” he said. Sampat’s views are shared by many industry executives, though nobody has said it on record and in such clear terms.
Google said in July that it would work with Jio Platforms on low-cost Android smartphones. Jio Platforms is planning to launch as many as 200 million smartphones in the next three years, according to a pitch the telecom giant has made to several developers. Bloomberg first reported about Jio Platform’s smartphone production plans.
These smartphones, as is the case with nearly 40 million JioPhone feature phones in circulation today, will have an app store with only a few dozen apps, all vetted and approved by Jio, according to one developer who was pitched by Jio Platforms. An industry executive described Jio’s store as a walled-garden.
A possible viable option for startup founders is Indus OS, a Samsung-backed third-party store, which last month said it reaches over 100 million monthly active users. As of earlier this week, Paytm and other firms had not reached out to IndusOS, a person familiar with the matter said.
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Tuesday, September 29, 2020
E-scooter startup Neuron Mobility adds $12M to its Series A for expansion in Australia and New Zealand
Neuron Mobility, a Singapore-based e-scooter rental startup, announced today that it has added $12 million to its Series A. Led by Square Peg, an Australian venture capital firm and GSR Ventures, this increases the round’s new total to $30.5 million. The company, which operates in Australia and New Zealand in addition to Southeast Asian markets, first announced its Series A in December 2019.
Part of Neuron Mobility’s growth plans hinges on the increased adoption of electric scooters and bikes during the COVID-19 pandemic. Many people are using their cars less frequently because they are working remotely or there are movement restrictions where they live. When they do go out, electric bikes and scooters offer an alternative to public transportation and ride-hailing services for short trips.
Neuron Mobility’s chief executive Zachary Wang said the company raised a Series A+ instead of moving onto a Series B because more cities are “opening up to the possibility of micromobility, particularly rental e-scooters as they present an individual transport option that takes pressure off public transport and allows people to continue social distancing.”
“We’ve been experiencing tremendous growth in ANZ and the pandemic has made us fast track our plans,” he added.
Though Neuron Mobility currently does not operate in other Southeast Asian countries besides Singapore, Wang said it is “constantly evaluating opportunities across APAC.”
The new funding will be used to speed up Neuron Mobility’s expansion plans in Australia and New Zealand, where it claims to be the leading electric scooter rental operator. The company is currently present in nine locations, including Auckland, New Zealand, and Australian cities Adelaide, Brisbane, Darwin, Canberra and Townsville. Neuron Mobility plans to expand into five new cities over the next two months and part of that involves hiring 400 more people in Australia, New Zealand and Singapore. In addition to the Asia-Pacific, Neuron Mobility will also launch in Slough, it’s first location in the United Kingdom, by the end of this year.
Neuron Mobility’s research found that before the COVID-19 lockdowns in Australia, one in five of its users had never used an e-scooter before. But now Australian and New Zealand users have increased their average e-scooter trip distances by 23% to 2.6 kilometers, with the average duration of rides rising by 10% to more than 14 minutes. Neuron Mobility’s pricing is meant to be affordable depending on different markets. For example, in Brisbane, users pay one Australian dollar (about 68 U.S. cents) to begin a trip and then 38 Australian cents for each minute of the ride. Its e-scooters can go up to speeds of about 25 kilometers (15.5 miles) per hour.
Other “micromobility” companies, including Ofo, Reddy Go, Obike and Lime, have also offered rental services in Australia and New Zealand, but ran into trouble. Bike-sharing startups Ofo, Reddy Go and Obike withdrew from Australia in part because city councils were frustrated by bikes were being abandoned on sidewalks and in parks. Lime still operates in Australian cities, but in June, the Australian Competition and Consumer Commission found that the company failed to disclose safety issues with its Generation 2 scooters (in response, Lime said it would implement new compliance procedures and upgrade to its new Generation 3 scooter).
Wang said Neuron Mobility avoids those issues by strategically planning which cities it will launch in, instead of focusing on rapid expansion, partnering with city councils and “continually shifting and adapting to meet their needs.” Several of Neuron Mobility’s features, including geofencing to control where and how fast e-scooters can be ridden, and a “Helmet Lock” to make helmets available for all scooters, were developed after discussions with city councils. Neuron Mobility’s scooters, designed by the company specifically for renting, also use swappable batteries to decrease pollution.
After launching in Singapore, Neuron Mobility decided to focus on Australia and New Zealand because “both countries have cities that are highly suitable for micromobility in terms of infrastructure and regulations,” Wang said. City councils have also “been keen to push the boundaries of what can be done with technology to make programs better and safer and that really suits our way of thinking.”
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Facebook names VP of product growth Alex Schultz as new CMO
To fill its empty CMO position, Facebook just promoted to the C-suite a longtime Facebook executive focused on product growth.
Former VP of product growth and analytics Alex Schultz, who has been with the company since 2007, announced the move Tuesday in a Facebook post. Schultz will fill the position left open by Antonio Lucio, who joined the company from HP in 2018 and announced his departure last month. Lucio said he was leaving the company to “dedicate 100% of my time to diversity, inclusion and equity.”
In his Facebook post, Schultz said he planned to bring “experience in segmentation, targeting, and measurement” to the table to extend Facebook’s already massive reach. Schultz, who is the executive sponsor of Facebook’s LGBTQ resource group, added a personal note to the news, writing that Facebook is the first workplace where he has “truly safe to be gay and be open about it.”
Stepping into the role late in the U.S. election, an intensely consequential time for the company, Schultz acknowledged Facebook’s precarious position in the public eye. Touching on Facebook’s failures around platform enforcement, Schultz mentioned that he spent “most of my energy” over the last four years working on safety at the company. That work includes projects like Facebook’s community standards enforcement report, a new quarterly accounting of the company’s efforts to rid its platform of hate speech, harassment and other rule-breaking behavior.
“I believe deeply in the good Facebook’s products do,” Schultz said in his Facebook post. “We have all seen it through this pandemic as billions of people have connected with family and friends socially online while staying physically apart and slowing the spread of the virus. At the same time I think scrutiny of any new technology is appropriate and there are ways we can, and should, improve without losing all the good.”
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Monday, September 28, 2020
Russian surveillance tech startup NtechLab nets $13M from sovereign wealth funds
NtechLab, a startup that helps analyze footage captured by Moscow’s 100,000 surveillance cameras, just closed an investment of more than 1RUB billion ($13 million) to further global expansion.
The five-year-old company sells software that recognizes faces, silhouettes and actions on videos. It’s able to do so on a vast scale in real time, allowing clients to react promptly to situations It’s a key “differentiator” of the company, co-founder Artem Kukharenko told TechCrunch.
“There could be systems which can process, for example, 100 cameras. When there are a lot of cameras in a city, [these systems] connect 100 cameras from one part of the city, then disconnect them and connect another hundred cameras in another part of the city, so it’s not so interesting,” he suggested.
The latest round, financed by Russia’s sovereign wealth fund, the Russian Direct Investment Fund, and an undisclosed sovereign wealth fund from the Middle East, certainly carries more strategic than financial importance. The company broke even last year with revenue reaching $8 million, three times the number from the previous year, ane expects to finish 2020 at a similar growth pace.
Nonetheless, the new round will enable the startup to develop new capabilities such as automatic detection of aggressive behavior and vehicle recognition as it seeks new customers in its key markets of the Middle East, Southeast Asia and Latin America. City contracts have a major revenue driver for the firm, but it has plans to woo non-government clients, such as those in the entertainment industry, finance, trade and hospitality.
The company currently boasts clients in 30 cities across 15 countries in the Commonwealth of Independent States (CIS) bloc, Middle East, Latin America, Southeast Asia and Europe.
These customers may procure from a variety of hardware vendors featuring different graphic processing units (GPUs) to carry out computer vision tasks. As such, NtechLab needs to ensure it’s constantly in tune with different GPU suppliers. Ten years ago, Nvidia was the go-to solution, recalled Kukharenko, but rivals such as Intel and Huawei have cropped up in recent times.
The Moscow-based startup began life as a consumer software that allowed users to find someone’s online profile by uploading a photo of the person. It later pivoted to video and has since attracted government clients keen to deploy facial recognition in law enforcement. For instance, during the COVID-19 pandemic, the Russian government uses NtechLab’s system to monitor large gatherings and implement access control.
Around the world, authorities have rushed to implement similar forms of public health monitoring and tracking for virus control. While these projects are usually well-meaning, they inspire a much-needed debate around privacy, discrimination, and other consequences brought by the scramble for large-scale data solutions. NtechLab’s view is that when used properly, video surveillance generally does more good than harm.
“If you can monitor people quite [effectively], you don’t need to close all people in the city… The problem is people who don’t respect the laws. When you can monitor these people and [impose] a penalty on them, you can control the situation better,” argued Alexander Kabakov, the other co-founder of the company.
As it expands globally, NtechLab inevitably comes across customers who misuse or abuse its algorithms. While it claimed to keep all customer data private and have no control over how its software is used, the company strives to “create a process that can be in compliance with local laws,” said Kukharenko.
“We vet our partners so we can trust them, and we know that they will not use our technology for bad purposes.”
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Exotec raises $90 million for its warehouse robots
French startup Exotec has raised a $90 million Series C round led by 83North, with existing investors Iris Capital and Breega also participating. Other existing investors include 360 Capital. The company has been working on semi-automated warehouses for e-commerce clients.
The system is based on tiny robots called Skypods. They roam the floor and go up and down racks to pick up standardized bins of products.
The company also provides logistics software to coordinate all those robots through the warehouse. As you scale, you can add more robots and more racks without any downtime.
It’s not going to replace humans altogether as you still have to pick up goods from the bin and pack stuff. But human operators can stay at a workstation while robots take care of all the roaming.
You can use a workstation to pick up goods but also to replenish bins. The idea is that you never have to enter the Exotec area. It’s a robot-only zone.
In addition to productivity gains, you can also increase your storage capacity by switching to Exotec thanks to tall racks and narrow aisles.
The company now has teams in Atlanta and Tokyo — it plans to produce 4,000 robots per year by 2021. Everything is manufactured in Lille, France in a 6,000 square-meter plant. The company currently has fourteen running systems around the world. Clients include Carrefour, Leclerc, Cdiscount and Fast Retailing (Uniqlo).
Exotec has previously raised $17.7 million in 2018 and $3.8 million (€3.3 million) in 2016.
Image Credits: Exotec
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XtalPi lands massive $319M SoftBank-led round C to continue its high-tech drug discovery
XtalPi, an American-Chinese biotech firm that focuses on AI-assisted drug discovery, has raised a $319 million round C from a slate of enthusiastic investors led by SoftBank’s Vision Fund. It joins numerous others with 9-figure rounds in what is clearly a valuable and competitive space.
XtalPi works with major pharmaceutical companies like Pfizer that need to identify promising new drug-like molecules and learn as much about them as possible. It’s very much a race, so companies claiming to use AI to speed up the process have attracted major funding. Though there have been no prominent breakthroughs to speak of resulting from the space, it’s hard to imagine any major player can afford to ignore it.
This company, founded in 2014, purports to offer extremely low-level simulation and prediction of target molecules, both simulating the physics at atomic levels and doing the more traditional data science work that eliminates dead ends and points towards more fruitful avenues for investigation.
Although these advances are in the digital space, the companies still need a large staff of skilled scientists who can verify and advance the results — as well as the facilities to support them. It may help speed up the slow-paced pharmaceutical industry, but that doesn’t mean it’s cheap or easy to do so.
AI-enhanced (which is really to say using machine learning techniques) biotech firms have attracted huge funding rounds and lucrative (or potentially lucrative) partnerships as pharma’s biggest companies place their bets. (Insitro founder Daphne Koller spoke on this topic just two weeks ago at Disrupt.)
XtalPi plans to use the money as you might expect: To scale its existing operations with improved algorithms, more data, and additional computing power.
“We believe AI holds the answer to solving pharma’s productivity challenge,” said chairman and co-founder Shuhao Wen in a press release. “More specifically, XtalPi’s AI-powered platform can improve the industry’s research efficiency and success rate in order to lower costs for discovering and developing new drugs. We look forward to applying our platform to help clients bring more first-in-class and breakthrough drugs to the market and address significant unmet medical needs to benefit patients on a global scale.”
Softbank led the round, with PICC Capital and Morningside making up the larger remaining part, as well as follow-ons from existing investors Tencent, Sequoia China, China Life, and SIG.
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