Check out this week’s Bad Crypto podcast.
Regulators and service providers are collaborating as never before to address systemic vulnerabilities of the crypto industry.
How to use the opportunities that the Swiss regulatory system provides for crypto projects wisely to speed up the launch of your product.
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 going has not always been easy but the tech IPOs keep coming. Airbnb itself is almost here, in what is likely to be the ultimate stock market listing of this dramatic year. After the pandemic triggered mass layoffs for the short-term rental marketplace, it has managed to make up all of the lost ground to pre-pandemic projections, TechCrunch and others have reported. Now, news is leaking out that it could seek to raise up to $3 billion at a $30 billion valuation.
The US presidential election in a month, Trump’s positive COVID-19 diagnosis, and various other world events have yet to stop the tech IPO momentum.
This past Wednesday, Palantir and Asana both opted to put a limited number of shares up for sale directly instead of working with a bank to pre-sell portions to favored clients, following in the direct-listings footsteps of Spotify and Slack.
Palantir, which is continuing to get political scrutiny around its government data businesses, and Asana both finished the first few days of trading without any pop to speak of for initial public investors (although other things have been impacting markets in the same time frame). However, both companies have already turned billions of paper funding rounds into liquid money that can start going back to the employees and investors, as intended. And now, each can sail the high seas of public markets with a smaller, friendlier group of stockholders than many, many other public companies have.
We’ve been covering Palantir in great detail recently, but Asana’s entrance provides a broader lesson for the many aspiring SaaS startups out there.
Dustin Moskovitz, who has retained a huge amount of control as a cofounder/investor, told Danny Crichton for Extra Crunch that more than 40% of the task-focused work management provider’s revenue is now coming from outside of North America, with ongoing growth, high customer loyalty and big integrations with other SaaS providers. The results bode well for other SaaS companies considering direct listings, as Alex Wilhelm analyzes for EC:
Asana grew 63% in the six months ending July 31, 2020, compared to the same period of 2019, though that growth rate decelerated to around 57% when only looking at the most recent quarter and its historical analog. Good growth then, if slowing. And Asana’s gross margins were good and improving, coming in at 86% in the six months ending July 31, 2019, and 87% in the same period of 2020. But the company’s net losses were rising in gross and relative terms at the same time. In the six months ending July 31, 2020, Asana lost $76.9 million, up from $30.5 million in the same period of 2019. And, the company’s 77% net loss as a percent of revenue in the two quarters ending in July of 2020 was up from a 50% loss during the same period of the preceding year. Asana also consumed more cash this year than last year, with its operating cash burn rising from $13.1 million during the six months ending July 31, 2019 to $40.3 million in the same period of 2020.
And yet, from a reference price of $21, valuing the company at around $4 billion on a fully diluted basis, shares of Asana have risen to $25.14 at the open of trading this morning (though Asana lost several points today thanks to general market carnage). Current market trackers value the company at $3.86 billion.
Now, on to Airbnb! (And also, Datto!)
Pandemic upsides arrive for cannabis, mental health and language learning
As the world tries to make sense of fresh Q3 data, we took a closer look at a few fresh startup trends. First, the cannabis market seems to be as strong as you’d expect. Matt Burns caught up with a range of weed-tech founders, investors and analysts, who shared almost entirely good news for the emerging sector. Here’s a highlight from Andy Lytwynec, VP, Global Vape Business at Canopy Growth, the cannabis holding company for a range of brands, including the vaporizer preferred by your self-medicated correspondent:
Lytwynec points to Storz & Bickle as a barometer of sorts in judging the impact of COVID-19. The German-based vaporizer company saw an uptick in sales, as reported in Canopy Growth’s latest quarterly report. The company reported a 71% increase during the first quarter ending on June 30. The financial report pointed to Storz & Bickel’s increased sales and distribution expansion as a primary reason for the increase.
Just try getting a replacement for that mouthpiece you tragically broke at the start of quarantine. And don’t fall for that fake stuff on Amazon or you’ll be huffing plastic. Anyway…
Alex also checked in on mental health funding, which were already coming into their own before the pandemic. The first half of the year was the sector’s biggest yet, with a focus on remote therapy, virtual coaching and anxiety alleviation, although Q2 was down slightly from Q1. More, from Extra Crunch:
Investors are putting dollars to work in 2020 to further the growth mental health startups managed in 2018 and 2019. Per the CB Insights dataset, in Q1 and Q2 2020, these startups saw 106 rounds worth $1.08 billion. In the year-ago period, the figures were 87 rounds worth $750 million. (Unlike some subcategories of wellness startups that CB Insights detailed, mental health upstarts have enough regular VC volume to make year-over-year comparisons reasonable.)
In a different sector of tech-powered mind improvement, Duolingo is now on track to hit $180 million bookings, chief executive Luis von Ahn tells Natasha Mascarenhas for EC. While the language-learning company has seen usage surge from 30 million to 42 million monthly active users this year, it only makes money from 3% of them (those who want to pay to avoid seeing ads, get download access, and other features).
The future of transportation
From Kirsten Korosec, our resident mobility expert and host of our next event:
If you’re interested in tech, transportation and startups — of course you are — you should make our next event a priority. And it’s coming up in just a few days. TechCrunch is hosting TC Sessions: Mobility 2020 on October 6 & 7, a virtual event that will bring together the best and brightest minds working on automated vehicle technology, shared micromobility and electrification. We’ll be talking to former Tesla co-founder and CTO JB Straubel about his new venture Redwood Materials, the CEOs of EV newcomers Polestar and Lucid Motors, Formula E driver Lucas di Grassi about a new kind of racing event (hint, scooters!), early stage-investors from Trucks VC, Hemi Ventures and Maniv as well as Uber’s director of policy for cities Shin-Pei Tsay, to name a few. Plus there will be a dedicated networking time, a pitch night on October 5 and a virtual expo. There are a variety of ticket prices to meet your budget, including one for students. But I’m also here bearing gifts: Startups Weekly readers can get 50% off the full price at this link. If you’d just like to check out the startups expo portion, Startups Weekly readers can get in free with this link.
Top Indian app developers join global platform rebellion
Manish Singh, our lead reporter covering Indian startups, has been breaking news on the growing dissent against app platform policies. It’s getting epic:
More than 150 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 includes 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, RazorPay and ShareChat. The growing list of founders expressed deep concerns about Google’s “monopolistic” hold on India, home to one of the world’s largest startup ecosystems, and discussed what they alleged was unfair and inconsistent enforcement of Play Store’s guidelines in the country.
Their effort comes days after a small group of firms — including Epic Games, Spotify, Basecamp, Match Group and ProtonMail — forged their own coalition to pressure Apple and Google to make changes to their marketplace rules.
“Where else do these dollars go?”
Danny interviewed SF-based Index Ventures partners Nina Achadjian and Sarah Cannon about the latest trends in startup fundraising. Here’s a key part about the macro trends, that also explains why all those tech IPOs continue to happen (and do well):
TechCrunch: Given the amount of capital flowing into venture these days, have you noticed any LPs starting to pull back from the market?
Cannon: They’re not pulling back. In fact, it’s like, “Could you potentially take more allocation? And what do you think of these other seed managers?”
I think the way that I’ve got my mind around this is, where else would these dollars go? What are the alternatives for the dollars that are rushing into tech? I don’t know the latest numbers, but it was something like 40% of stock market returns are actually concentrated in Apple [and FAANG]. And then we’re seeing IPOs perform the same.
We’re in a global pandemic that could easily cause [another] recession. A lot of industries like airlines and travel have more exposure. Tech is just relatively more attractive. So if the interest rates are low, which they are, and [economists] have said that they’re going to be low for the coming decades, then you’re going to have lots of capital chasing returns.
Across the week
TechCrunch
Allbirds CEO Joey Zwillinger on the startup’s $100 million round, profitability and SPAC mania
How Twilio built its own conference platform
Working for social justice isn’t a ‘distraction’ for mission-focused companies
Apple removes two RSS feed readers from China App Store
Calling VCs in Rome and Milan: Be featured in The Great TechCrunch Survey of European VC
Extra Crunch
News apps in the US and China use algorithms to drive engagement, discovery
Which neobanks will rise or fall?
9 VCs in Madrid and Barcelona discuss the COVID-19 era and look to the future
Spain’s startup ecosystem: 9 investors on remote work, green shoots and 2020 trends
Healthcare entrepreneurs should prepare for an upcoming VC/PE bubble
#EquityPod
Hello and welcome back to Equity, TechCrunch’s VC-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.
This week, Alex is on a much-deserved vacation (but not from Twitter, it seems) so Danny Crichton and I chatted through the news and happenings of the week. Somehow we winded our way through the latest tech controversies, gave Chris Wallace a shout out and ended with some funding rounds. I’ll be out next week so don’t miss me too much, but expect the entire Equity team to be back full-speed in mid-October. Thanks, as always, to our producer Chris Gates for his patience and diligence.
Now, onto a sneak peek of what we got into:
- Moderation continues to be the root of all problems. We got into the anti-semitic comments that were spewed on Clubhouse, and what that means for the future of the audio-only platform. As Danny so eloquently put it: if Clubhouse is having moderation problems even with an exclusive invite-only user base, the problem will grow.
- We also talked about Coinbase CEO Brian Armstrong’s blog post, which triggered a debate between us on whether tech companies can even choose to not be political. For the record, Black Lives Matter is not a political statement. It’s a human statement. Read this op-ed for more.
- I wrote a piece about how a new program wants to be the Y Combinator for emerging fund managers. The whole “YC for X” model usually makes me roll my eyes, but listen to hear why I’m actually optimistic and bullish on programs like these taking off within tech.
- Silver Lake added a $2 billion “long-term” hedge fund backed by Abu Dhabi to its tech finance toolkit. The strategy is a signal to privately backed startups, and potentially a slap in the face to SoftBank.
- For a quick edtech note, I caught up with Duolingo’s CEO this week in one of his rare press interviews. Luis von Ahn explained the app’s surge in bookings, and there’s one key metric we pull out to noodle over.
- Danny explained Gusto’s latest product launch with, wait for it, Gusto. In all seriousness, he brings up interesting points about the future of fintech feeling more full-suite, and free.
- Funding round chatter continued when we unpacked Lee Fixel’s latest investment in India’s Inshorts.
- Finally, we ended with LiquidDeath, which is not the name of a drinking game, but instead the name of a startup that has successfully attracted millions in venture capital for mountain water.
And with that, we will be back next week. Vote like your life depends on it, because it does.
Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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.
In this series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.
Top Stories
Google changes its app store rules, too
Just a couple of weeks ago, Apple revised its App Store rules to permit game streaming apps and clarify rules around in-app purchases, among other things. Now, Google has updated its rules, as well.
Under threat of regulation, Google announced this week it’s updating its Google Play billing policies to better clarify which types of transactions will be subject to Google’s commissions on in-app purchases. While the more detailed language doesn’t actually change the earlier policy’s intention, it will impact a percentage of developers who don’t currently use Google Play’s billing system when selling digital goods in their app.
In addition, the company announced it will make changes in Android 12 that will make it easier for users to install and use third-party app stores as an alternative to Google Play.
The company says that its current billing policies only apply to less than 3% of apps on Google Play. Of those apps, 97% already use Google Play’s billing library. That means there’s only a small percentage of apps that will need to come into compliance under the clarified terms.
The rules seem to want to bring into compliance larger services skirting in-app purchase rules, like Netflix and Spotify. But it’s not clear yet how permissive Google will be about allowing apps to communicate alternative ways to pay. Currently, Google says developers can tell users about how to sign up and use alternative payments outside of the Google Play app. But we don’t know if Google will allow such a link to be prominently placed on an app’s home screen, how it will allow such a link to be worded or whether an app can cater only to existing subscribers, and other key factors.
EU rule could force Apple and Google to share customer data, ban pre-installed apps
Major tech companies, including Apple and Google, may be required to share customer data with rivals, if a proposed EU rule, the Digital Services Act, comes to pass. The rule takes aim at anticompetitive business practices among tech’s top players, like Apple, Google, Amazon and Facebook. One measure, detailed by The Financial Times, says platforms can’t use the data they collect for their own commercial activities unless that’s shared with businesses pursuing the same activities.
The draft also currently recommends that big tech companies could be prohibited from favoring their own services on their websites and platforms, meaning they couldn’t pre-install their own apps on laptops or phones, or forced businesses to pre-install their apps to gain access to their platform. In practice, that could mean Android phones that ship without Google apps, like Gmail or Drive, or iPhones without stock apps beyond those that offer core functionality, like the Camera.
In addition, another clause would ban the tech companies from blocking rivals that offer their products to customers outside the gatekeeper’s own platform, Reuters reports. This could impact the current app store rules around payments and in-app purchases.
Anticipating regulatory pushback, Apple has made small concessions with iOS 14. Already, Apple had allowed users to delete some, but not all, of its stock apps. In iOS 14, Apple now lets users select their preferred web browser and email app, too. And both it and Google (see above) recently modified their app store guidelines to offer more clarity with regard to their right to collect platform fees in specific circumstances.
Apple and Google will, of course, object to any attempts at regulation. Google, in a submission to the Act, argued that a platform may only have market power in some sectors, but could be a new entrant or marginal player in others.
Weekly News Round-up
Platforms
- Apple releases new app marketing tools. Apple introduced new tools that allow developers to generate short links or embeddable codes that link to their App Store product page. These can also display your app icon, a QR code or an App Store badge.
- Second public beta of iOS 14.2 and iPadOS 14.2 arrive. The releases bring new emoji (see below), plus changes to the Now Playing screen in the Control Center and the Home app.
- Apple’s iOS 14.2 will bring new emoji. A new set of emoji are being tested in the beta version of iOS 14.2. The update will include the transgender flag, a smiling face with tear, pinched fingers, two people hugging, some insects and animals, a disguised face and more.
- Google takes aim at beauty filters. Pixel phones will update to ensure face retouching features are off by default while labels and icons use “value-free” descriptions. The company said the decision to tweak the interface was based on expert recommendations over filters’ impact on people’s self-confidence and mental health.
- Android Partner Vulnerability Initiative launches. The program will focus on managing security issues specific to Android OEMs, drive remediation and provide transparency to users about issues Google discovered that affect device models shipped by Android partners.
- Apple bans more RSS readers in China App Store. Apple is still scouring its App Store for any services that don’t comply with Chinese censorship laws. This week, RSS reader apps — Reeder, Fiery Feeds and others — said their apps had been removed from the China App Store over content deemed “illegal.” Fiery Feeds only had around 1,000 MAUs, but Feedly’s latest app had 100K downloads.
Services
- Google Play Pass launches in 24 new European countries. The deal brings Google’s subscription-based apps and games store to 34 total markets, including the U.S.
- Twilio launches an app for frontline workers, a new IoT platform and a free video service, Video Web RTC Go. The latter allows you to add 1:1 video chat to mobile and web apps, like those aimed at distance learning or remote client consultations. It also launched Twilio Frontline, a React Native-based app for frontline workers who need to communicate with customers.
Trends
- Designer earns six figures in six days for iOS 14 icon set. In a blog post, indie designer @traf details his experience building custom icons for the iOS home screen redesign trend. After a tweet showing off his home screen gained interest, he quickly created a website to sell his icon packs. Then YouTuber MKBHD linked to him and soon, he was making big sales. The day after the video, sales jumped from $6K to $40K, and as of the time of writing the post this week, the set had earned him $116,147.
- Global app revenue up 32% year-over-year in Q3. Sensor Tower reports worldwide consumer spend grew to $29.3B and installs reached 36.5B across the App Store and Google Play in the third quarter. TikTok aws the highest-earning non-game app globally and the most downloaded.
Other News
- Indian startups explore alternative app store to fight Google’s monopoly. More than 150 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, TechCrunch reported this week. Participants include Paytm co-founder and CEO Vijay Shekhar Sharma, Deep Kalra of travel ticketing firm MakeMyTrip, and executives from PolicyBazaar, RazorPay and ShareChat.
- App Store fees legal battle to be tried by a judge, not jury. Apple and Epic Games agreed this week that their court battle should be decided in a bench trial by a judge, not a jury. Apple had previously been pushing for a jury trial, but withdrew its request. The judge suggested a jury trial is preferred, as it would have allowed real people to have a voice on what’s shaping up to be a major anti-trust case. She also had harsh words for many of Epic’s tactics and arguments presented so far, noting that walled gardens already exist elsewhere and Fortnite players have many other places to play besides iOS.
- Astropad comes to Windows. A company sherlocked by Apple brought its Astropad system to Windows. The company’s dongle turns an iPad into a second display, now for a Windows PC, a market Apple’s Sidecar doesn’t address.
- TikTok’s U.K. numbers revealed. A leaked marketing presentation revealed that 1 in 4 U.K. users now launch TikTok every months, with 17 million users spending over an hour per day on the app. That means the app has achieved a following almost half as big as Facebook in the market in just three years.
- TikTok launches a U.S. elections guide. The company promised not to save users’ political affiliations for use in ad targeting or recommendations.
- Google Maps rolls out improved AR directions. Google Maps updated Live View, its AR walking directions feature that launched last year. The feature, which uses the camera and GPS to help you navigate, can now be invoked from the transit tab, identify landmarks in major cities, and use Live View in combination with Google Maps’ location sharing feature.
- Microsoft’s Bing search app will appear as a download prompt on new Android phones in Germany, the U.K. and France after it won slots in a Google auction for rivals.
Funding and M&A, Etc.
- Jamf acquires Mondada. MDM solution provider Jamf bought Melbourne-based Mondada, the maker of patch management solutions, Kinobi and Kinobi Pro. The deal will allow Jamf to expand Jamf’s application lifecycle capabilities, it said.
- Bloomscape raises $15 million, acquires plant care app Vera. Online garden shop Bloomscape raised a $15 million Series B from General Catalyst and others for its e-commerce business that ships live plants to customers’ homes. It also bought Vera, a plant care and tips app, for an undisclosed sum.
- Homer raises $50 million. Early learning app maker raised $50 million from Lego, Sesame Workshop and Gymboree for its apps that focus on early literacy and soon, more.
- Humane raises $30 million Series A to build the next iPhone…or something. Humane’s ex-Apple founders, Imran Chaudhri and Bethany Bongiorno, haven’t revealed what they’re working on, but are promising to build something that’s as groundbreaking as the iPhone. Chaudhri had worked on the original UI design of iPhone and iPad and Bongiorno helped launch iPad. They believe technology is a net negative for society as it’s been built today, and their idea is to come up with a new computing vision entirely.
- Macrometa raises $7 million. An edge computing service for app developers, Macrometa raised a $7 million seed round led by DNX Ventures for its Global Data Network that allows developers to send app requests to regions closest to them.
- Beijing-based Sina Corp. agrees to go private in $2.6 billion deal. The company is the latest to delist following growing scrutiny from U.S. regulators.
Downloads
HoloVista
Mixed reality storytelling developer Aconite launched its new, story-driven puzzle game HoloVista on iOS, where players explore environments with the iPhone’s 360-degree camera in a mysterious mansion full of secrets. The game combines elements of hidden object search, puzzles and social media as you play as Carmen, a junior architect and new hire at an exclusive firm. The game also touches on themes like society’s focus on social media, for example, and our relationship with technology ($4.99 on the App Store).