Latest and Hotest Technology Updates

Welcome to the Daily Crunch for May 28, the last edition before a long weekend here in the United States. But impending holiday or not, there's plenty to catch up on, not the least of which today is Elon Watch in our top-three rundown. Let's get into it! — Alex

The TechCrunch Top 3

• All about Elon: The only thing more certain than more venture rounds and SPAC news in the tech game these days is the inevitably of Elon Musk making news. This week was no exception, with the Tesla boss in the media today for turning on in-car cameras when their driver assistance is switched on and his Boring company's Las Vegas tunnel challenges.
• The EU examines TikTok: The tech-and-government theme we've tracked all week continued today with the European Union launching "what it described as 'a formal dialogue' with the video sharing platform over its commercial practices and policy." The social media giant's kid-focused policies appear to be in the EU's crosshairs.
• Healthcare can be lucrative startup ground: That's what we learned reading Doximity's IPO filing this morning. The venture-backed health tech company grew like a weed during the COVID-19 pandemic and is capitalizing on its gains by going public while markets are hot.

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Startups and VC

Let's wrap this week with startups that are challenging the status quo, shall we?

Penfold just raised $8.5 million to keep pensions alive: In your part of the world the pension may be dead, but Penfold wants to keep the retirement plan alive in the U.K. With a mobile app. Sure, your company has probably given up on the idea that it should materially provide for workers' post-work existence, but Penfold is betting that its freelancer-friendly pension system will find purchase in its market.

Kitt put together a $5 million round to build out your next office: Parts of the world are slowly circling back to the idea of going to the office. Kitt wants to take advantage of the trend by "a 'fully customizable' workspace solution to tenants via its landlord partners," TechCrunch reports. Everyone seems to agree that post-COVID office life will look different. Here's a startup trying to help design that future.

Anthropic pulls together $124 million to make AI more steerable: Some of the folks behind GPT-3 have a pile of new money for their AI-focused startup. But unlike most AI-centered startups, the company appears to be working on model tuning over building something to, say, do one particularly focused task.

"Today [in AI] the general rule is: The more powerful the system, the harder it is to explain its actions," Devin reports, adding that that's "not exactly a good trend." Perhaps Anthropic can build the AI tuning dials we've long needed. It certainly now has the money to pursue its vision.

Dismantling the myths around raising your first check

The growing complexity of fundraising has the opportunity to make tech either inclusive or exclusive. For new founders looking to raise money, let's dismantle the myths about raising your first check and instead focus on how investors and other successful founders describe the nuance needed to secure money.

Natasha Mascarenhas spoke to Elizabeth Yin, founding partner of Hustle Fund, and Leslie Feinzaig, founder of Female Founders Collective, to get their candid thoughts about the challenges first-time founders face when fundraising.

According to Yin, all startups should be able to reach one of two goals: by the fifth year, achieve $100 million ARR or a $1 billion valuation.

"This is hard to do," she said. "And most businesses will never get there — not for a lack of trying — but there's a lot of luck whether your idea has that much demand that quickly.”

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

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Big Tech Inc.

Closing this week with a mote of Big Tech news, once again centered around the rising tension between technology companies and the Indian government. Our own Manish Singh reports that "Google, Facebook, Telegram, LinkedIn and Tiger Global-backed Indian startups ShareChat and Koo have either fully or partially complied with the South Asian nation's new IT rules, according to two people familiar with the matter and a government note obtained by TechCrunch."

Singh goes on to note that "Twitter has yet to comply with the rules." We saw earlier this week how Twitter is pushing back against the Indian government after it tried to use force to intimidate the American social network into going against its own policies in defense of its party's political goals.

American social networks born in an environment where they had plenty of room to experiment and maneuver have a history of running afoul of foreign governments with either rising autocratic tendencies or a fondness for full-blown control. This is no exception. The question is whether Twitter will wind up a cautionary tale in its argument with the Indian government, or a guiding light.

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Hello and welcome to Daily Crunch for Thursday, May 27. From the home desk, TechCrunch has a few notes to share. First, we're hosting a virtual meetup in Pittsburgh as part of our national tour spotlighting neat startup markets. And if you are a super early-stage founder, you can still apply to take part in the upcoming Battlefield competition at Disrupt. Do it. It's going to be a blast. See you at both! — Alex

The TechCrunch Top 3

• Lots of people are working on NFTs: Whether you're a crypto fan or not, you've heard of non-fungible tokens, or NFTs. If you have already digested the NBA TopShot hype wave, buckle in, because a lot of folks are still building in the NFT world. That includes Anima, which is bringing AR to NFTs and just raised new capital from Coinbase, and Infinite Objects, which just raised $6 million to help folks bring their NFTs IRL.
• Europe probes American clouds: Here at Daily Crunch, we've noted a number of government-and-tech stories in recent weeks, none of them positive. Today's news is another note in that particular theme, with Natasha reporting that "Europe's lead data protection regulator has opened two investigations into EU institutions' use of cloud services from U.S. cloud giants."
• A window into the economics of fintech: Also out today was news that Acorns, an American consumer fintech company that helps regular folks save and invest their money, is going public via a blank-check company. We dug into its results, learning that such fintech startups can build great businesses. It's just expensive to do so.

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Startups and VC

We have our usual mix of funding rounds below, but first a note on diversity in the venture capital world. Collab Capital this week announced a $50 million fund to invest in Black founders, which TechCrunch covered here. And today we wrote about a $250 million growth fund that will reserve half its profits to donate to historically Black colleges and universities. More of this, please.

Now, the day's hottest funding rounds:

Breinify raises $11M to bring data science to marketing: A good theme in tech recently has been bringing capabilities previously reserved for the technically trained to teams of nontechnical folks. No-code does this at times, for example. Breinify is doing something related, namely "working to apply data science to personalization, and do it in a way that makes it accessible to nontechnical marketing employees to build more meaningful customer experiences," according to TechCrunch. For marketing teams currently stuck waiting for the engineering team to get back to them, this will prove more than welcome.

RevenueCat raises $40M to help developers leverage in-app subscriptions: RevenueCat now has a huge new check at a $300 million valuation, but more than that, it's changed its cost structure, offering different tiers of service that are priced not on a per-head basis, but on how much revenue a company is tracking at any given point in time (on-demand pricing is hot). RevenueCat, you can math out, costs 0.8% to 1.2% cut of tracked revenue, depending on what sort of functionality a company needs. For anyone building in-app subscriptions and looking for help, RevenueCat wants to be cheap to start and lucrative as its customers scale.

And then there were robots: Our own Brian Heater compiled a super great look at the world of robotics startups and their recent fundraising. TerraClear recently raised $25 million for its rock-picking-up tractor-robot. Bowery Farms recently raised $300 million as we noted here at Daily Crunch, but we failed to mention how "robots, sensors and AI are a big part of [its] vertical farming approach." Very cool.

Heater has more notes in the posts, but the key takeaway is that not every robot comes from the weird place between Uncanny Valley and Boston Dynamics.

SaaS needs to take a page out of the crypto playbook

It seems like a great time to launch a SaaS startup, but the landscape is crowded with well-designed applications that promise “blazingly fast and delightfully simple” experiences.

Most of these will fail, but not because of a marketing campaign or server downtime. In most cases, SaaS startups fall victim to what seed-stage investor John Chen of Fika Ventures calls “the myth of frictionless onboarding.”

Despite the hype, enterprise companies are always asking us to learn how to use new tools. “Just like with a new fitness program, participants feel good after completing the workout, but it takes a lot of activation energy to start and hard work to get there,” says Chen.

Instead of putting the onus on customers to roll up their sleeves, SaaS startups should learn from cryptocurrency culture and find ways to “incentivize users to do the necessary work to have the right experience.”

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

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Big Tech Inc.

Today we're mostly talking about Twitter, but before we do, is Ford about to win a chunk of the electric vehicle market? Two years ago I would have scoffed at the notion, but between what feel like strong pre-orders for its electric pickup and a huge bet on internal battery R&D, it's now a question worth asking.

On the Twitter front, there are two things to know. First, that Twitter is not taking incoming fire from the current Indian government sitting down. And, second, that Twitter's product work has been pretty fast-paced lately, which is more than welcome.

Regarding India, TechCrunch's Manish Singh reports that "Twitter called the recent visit by police to its Indian offices a form of intimidation and said it was concerned by some of the requirements in New Delhi's new IT rules." Good.

Here at Daily Crunch, we called the matter attempted intimidation, so it's nice to see the company also stating the obvious. And fighting back. The Indian government's push to censor Twitter smacks of a CCP-style crackdown on speech that the ruling regime deems too true to be read. Down with that sort of thinking.

On the product front, Twitter is rolling out its Clubhouse-competing Spaces product to desktop machines. Normally I'd skip such an incremental Twitter feature, but in this case it fits into the recent rapid-fire product cadence from the social network, which was famously slow for years and years. Then something changed, allowing the company to ship all sorts of products and services. The company's even moving toward some sort of email newsletter-subscription-audio-tipping product amalgamation that could prove to be very, very interesting to creators.

Who expected to be excited by Twitter's dev team this year? It's a nice surprise.

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Hello and welcome to Daily Crunch for Wednesday, May 26. Yes, we're going to get to the huge Amazon-MGM deal, but we have to chat about a startup first. Have you heard of Poparazzi? If you have kids you might have — it's the latest social phenom. And it just ran its way up to the top of the App Store. (Too bad it's not Puparazzi!)

Yes, I feel old as well. Take a look if you want to know what the kids are up to. Now, the rest of the news. — Alex

The TechCrunch Top 3

• Amazon snaps up MGM: The biggest news out today is the giant Amazon-MGM deal worth more than $8 billion. Its studio purchase helps cement Amazon in the mix of tech companies with huge investments in the online video space. Observers believe the e-commerce giant plans to use MGM to bolster its Prime service, making consumers less likely to churn thanks to the inclusion of more services. Which rings hollow to us: Who is going to give up Prime, but be swayed by movies? The connection to shipping speed feels tenuous.
• The global fintech boom: This morning, Clara announced a new round, mere months after it raised its preceding round of capital. The Mexican startup works in the corporate spend market, a startup niche that recently saw a $2.5 billion exit in the United States, and more capital for both Ramp and Brex. Our read here is that many nascent fintech formulas that work in the U.S. are going to have wide remit globally.
• IPOs are back: The recent Flywire IPO pricing (strong) and first-day trading (even stronger) are indicative that the temporarily slowed public-offering market is back. So, Robinhood, let's go?

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Startups and VC

Here are five of the tastiest venture capital rounds that TechCrunch covered, showing off an array of niches and round sizes:

• UK's Paysend raises $125M for mobile B2B payments: You are excused for wondering if every fintech round these days involves both companies and payments. I feel the same way. But what matters in the case of Paysend is that its model to provide SMB online payment services is happening from a post-Brexit U.K. Not even a tectonic decoupling can stop U.K. fintech, it seems.
• Yalo raises $50M for conversational commerce: Here's a tech startup round that typifies the year. Did it raise less than a year ago? Yes. Did the company have funding find it, as opposed to the other way around? Yes. And did COVID accelerate its business? Yes. Yalo is a wager that the way we buy online is changing, a technology story if we've ever heard of one. And it's one that venture capitalists are lining up to bet on.
• Skiff raises $3.7M for encrypted Google Docs: That's the pitch, per our own Zack Whittaker. Essentially, Skiff mimics the familiar features of Google Docs, but with end-to-end encryption. As a fan of privacy, I dig the project.
• Treet raises $2.8M to help brands resell their own stuff: The online resale market is huge. ThreadUp is public now, as is Poshmark. But Treet is betting that there is still room in the market for more tech, namely its plan to get brands involved in their own resale market. It isn't the richest startup around, but given the sheer number of brands out there, it has a pretty huge TAM to grow into.

Finally, African fintech OPay is in the process of raising a huge new round. The investment could help push the continent's 2021 venture capital totals to new heights, based on data TechCrunch reported earlier in the week.

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(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

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Big Tech Inc.

We're not going to touch on the Amazon-MGM deal more here in the Big Tech section, leaving us room for all sorts of other news:

• Facebook is looking into allowing users of both the Big Blue App and Instagram to hide social like counts. Which is great for your mental health, we suspect, if awful for those of us with overdeveloped competitive urges.
• Visa is rebounding from its pre-nuptial breakup with fintech unicorn Plaid by building a vetted list of fintech startups that its friends and other customers may want to leverage. In a sense, it's a way for startups to get a stamp of approval from Visa, and possibly more clients in the process. What's in it for Visa? More digital payments. That's good for a company that does lots of payments work, we reckon.
• GM and Lockheed are working on the next American lunar vehicle. It is very, very American to have the progenitors of the consumer Hummer and various weapons of death build our next extraplanetary go-kart. And it's good that we may go back to the moon? It's more than time.

To round out the Big Tech section today, OpenAI is out in the market with a $100 million fund to invest in startups. And Microsoft is partnering with the company and putting funds into the capital pool. It feels like ages ago that Microsoft told me that it wasn't getting into the VC game because the returns would not prove material to its asset base. That wasn't the point and the company seems to have figured that out.

TechCrunch reports that OpenAI's Sam Altman of Y Combinator fame said that the fund "plan[s] to make big early bets on a relatively small number of companies, probably not more than 10." Something to watch out for.

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