Bitcoin is testing $19,000 as DeFi hits another milestone in total crypto locked.
Read more Central bank digital currencies can have broad implications for the global balance of power, experts say.
Read more While we haven’t achieved the elusive $20,000 spot price all-time high yet, these other metrics show where bitcoin has grown far beyond previous peaks.
Read more 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.)
Everything else
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.
DoorDash, Affirm, Roblox, Airbnb, C3.ai and Wish all filed to go public in recent days, which means some venture capitalists are having the best week of their lives.
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.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
What is Roblox worth?
Image Credits: Nigel Sussman (opens in a new window)
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
HANGZHOU, CHINA – JULY 31: An employee uses face recognition system on a self-service check-out machine to pay for her meals in a canteen at the headquarters of Alibaba Group on July 31, 2018 in Hangzhou, Zhejiang Province of China. The self-service check-out machine can calculate the price of meals quickly to save employees’ queuing time. (Photo by Visual China Group via Getty Images)
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
Image Credits: Nigel Sussman (opens in a new window)
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
Image Credits: XiXinXing (opens in a new window) / Getty Images
“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
Image Credits: Nigel Sussman (opens in a new window)
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
Andrew Anagnost, president and CEO, Autodesk.
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
Image Credits: Nigel Sussman (opens in a new window)
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?
Image Credits: jayk7 / Getty Images
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?
Image Credits: Zoom
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?
Image Credits: Bryce Durbin
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
3D rendering of TNT dynamite sticks in carton box on blue background. Explosive supplies. Dangerous cargo. Plotting terrorist attack. Image Credits: Gearstd / Getty Images.
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!
Image via Getty Images / Alexander Spatari
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 bookclub@techcrunch.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?
Image Credits: Sophie Alcorn
Dear Sophie:
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
FoodBoss aims to be something like Kayak for online food ordering — the place where you can search across different service and apps to find the lowest prices and fastest delivery times.
One limitation, however, is the fact that the service was limited to third-party services like Uber Eats and Postmates, with no way to order from the restaurant itself — until recently, with the launch of a new feature called Restaurant Direct.
FoodBoss co-founder and CEO Michael DiBenedetto said that restaurants are placing an increasing emphasis on accepting delivery and pickup orders directly, both to save on the fees they pay to third-party services, and also to have a direct relationship with their customers.
“The main problem is they spent all this money to build out the [ordering] infrastructure, but they don’t necessarily know that they have to spend marketing dollars to drive consumers to their site or app,” DiBenedetto said. “That’s where we’re really helping.”
Image Credits: FoodBoss
Restaurant Direct may present some additional technical hurdles, because it will require FoodBoss to integrate with a variety of ordering systems. DiBenedetto said the company will be connecting through APIs in some cases and can also work directly with restaurant IT departments.
He emphasized that FoodBoss will remain agnostic about how you order — the goal is just to show you all the options, and to highlight the ordering method that best matches your priorities.
“At FoodBoss, we’re focused on making sure we’re helping third parties and [restaurants] have a lower overall marketing cost,” DiBenedetto continued. “Everybody wants to be profitable on delivery.”
The first restaurant available through Restaurant Direct is Lou Malnati’s in Chicago, with plans to add Sbarro in multiple markets next year. In a statement, Lou Malnati’s president, Heather Stege, said, “The challenge for restaurants is being able to serve customers through the users preferred channels, while still providing them with exceptional food. FoodBoss helps simplify that by offering multiple options, including our own, to attract customers.”
The last time we wrote about JoyRun, it was raising $10 million. Today, the Bay Area startup has some very different news to share, as it becomes part of Walmart as Walmart has purchased select assets in a bid to enhance its supply chain. The mega-retailer announced today that it has acquired “select assets – including the talent, technology platform and IP” from the company, in a bid to incorporate its peer-to-peer food and drink delivery service into its own last-mile logistics.
Walmart EVP Srini Venkatesan notes that the app has amassed a network of 540 third-party merchant partners and north of 30,000 people who have delivered goods with the service since its launch half-a-decade ago. JoyRun’s service is a bit of twist on more standard delivery apps like Seamless and Uber Eats.
As we described it back in 2017, “The company’s app lets people find out who, nearby, is already heading out to a restaurant that they like, then tack on an order of their own.” It will be interesting to see how Walmart integrates this technology into its existing chain, though from the sound it, Walmart would essentially be relying on non-professionals to delivery goods like groceries.
The system would likely operate in a manner like Amazon Flex — a kind of Uber/Lyft gig economy-style approach to delivery.
“This acquisition allows us to further augment our team and ongoing efforts to explore even more ways to deliver for customers in the future,” Venkatesan adds. “For instance, Runners could complement our SPARK program and 3rd Party delivery providers. Our goal is to deliver as quickly and efficiently as possible.”
Walmart expects the deal to close “in the coming weeks,” which will incorporate JoyRun into its Supply Chain Technology team. Terms of the deal were not disclosed.
Kea is a new startup giving restaurants an opportunity to upgrade one of the more old-fashioned ways that they take orders — over the phone.
Today, Kea is announcing that it has raised a $10 million Series A led by Marbruck, with participation from Streamlined Ventures, Xfund, Heartland Ventures, DEEPCORE, Barrel Ventures and AVG Funds, as well as angel investors Raj Kapoor (chief strategy officer at Lyft), Craig Flom (who was on the founding team at Panera Bread), Wingstop franchisee Tony Lam and Five Guys franchisee Jonathan Kelly.
Founder and CEO Adam Ahmad said that with restaurants perpetually understaffed, they usually don’t have someone who can devote their attention to answering the phone. (Many of you, after all, are probably pretty familiar with the experience of calling a restaurant and being immediately placed on hold.)
At the same time, he suggested it remains an important ordering channel — especially during the pandemic, as takeout and delivery has become the biggest source of revenue for many restaurants. The New Yorker’s Helen Rosner put it succinctly when she suggested that anyone who wants to support restaurants should “pick up the damn phone.”
Similarly, Ahmad said that for restaurants, paying substantial third-party ordering fees on all of their orders is “not a sustainable long-term strategy.” So Kea is offering technology that should help restaurants handle more orders over the phone, creating what Ahmad called a “virtual cashier” who can do the initial intake with customers, process most routine orders and bring in a human employee when needed.
The idea of an automated voice assistant may bring back unpleasant memories of trying to call your bank or another Byzantine customer service department. But Ahmad said that while most existing phone systems are “not smart,” Kea’s AI is very different, because it’s just focused on restaurant ordering.
“We’re doing a very closed domain,” he said. “In the pizza world, there are only a couple thousand permutations. We’re not innovating for the whole dictionary — it’s a constrained model, it’s a menu.”
In fact, the Kea team gave me a number to dial where I could try out the system for myself. It was a pretty straightforward and easy process, where I provided my address and then the details of my pizza order. And again, you can transfer to a human employee at any time. (In fact, I was accidentally transferred during my demo, leading me to quickly hang up in embarrassment.)
Kea is already live in more than 250 restaurants, including Papa John’s, Donatos and Primanti Brothers, and it says it’s saving them an average of 10 hours of labor per week, with a 23% increase in average order size. With the new funding, Ahmad’s goal is to bring Kea to 1,000 restaurants across 37 states in 2021.
An AI that completes quests in a text-based adventure game by talking to the characters has learned not only how to do things, but how to get others to do things. The system is a step toward machines that can use language as a way to achieve their goals.
Pointless prose: Language models like GPT-3 are brilliant at mimicking human-written sentences, churning out stories, fake blogs, and Reddit posts. But there is little point to this prolific output beyond the production of the text itself. When people use language, it is wielded like a tool: our words convince, command, and manipulate; they make people laugh and make people cry.
Mixing things up: To build an AI that used words for a reason, researchers from the Georgia Institute of Technology in Atlanta and Facebook AI Research combined techniques from natural-language processing and reinforcement learning, where machine-learning models learn how to behave to achieve given objectives. Both these fields have seen enormous progress in the last few years, but there has been little cross-pollination between the two.
Word games: To test their approach, the researchers trained their system in a text-based multiplayer game called LIGHT, developed by Facebook last year to study communication between human and AI players. The game is set in a fantasy-themed world filled with thousands of crowdsourced objects, characters, and locations that are described and interacted with via on-screen text. Players (human or computer) act by typing commands such as “hug wizard,” “hit dragon,” or “remove hat.” They can also talk to the chatbot-controlled characters.
Dragon quest: To give their AI reasons for doing things, the researchers added around 7,500 crowdsourced quests, not included in the original version of LIGHT. Finally, they also created a knowledge graph (a database of subject-verb-object relationships) that gave the AI common-sense information about the game’s world and the connections between its characters, such as the principle that a merchant will only trust a guard if they are friends. The game now had actions (such as “Go to the mountains” and “Eat the knight”) to perform in order to complete quests (such as “Build the largest treasure hoard ever attained by a dragon”).
Sweet talker: Pulling all of this together, they trained the AI to complete quests just by using language. To perform actions, it could either type the command for that action or achieve the same end by talking to other characters. For example, if the AI needed a sword, it could choose to steal one or convince another character to hand one over.
For now, the system is a toy. And its manner can be blunt: at one point, needing a bucket, it simply says: “Give me that bucket or I’ll feed you to my cat!” But mixing up NLP with reinforcement learning is an exciting step that could lead not only to better chatbots that can argue and persuade, but ones that have a much richer understanding of how our language-filled world works.
Pfizer will apply for emergency permission to distribute its covid-19 vaccine in the US and is ready to start shipping the shots within “hours” of getting a government green light, the firm said today. It is the first such application from any of the makers of covid-19 vaccines that are currently in development.
If it is approved, the first people to get the shot are likely to be doctors, nurses, and other front-line workers, and that could happen before Christmas, according to the drug giant. Pfizer is also sharing information with regulators in Canada, the European Union, and Japan.
In a statement, Pfizer’s CEO, Albert Bourla, said the vaccine’s development took “248 long days and nights,” involving 43,661 volunteers at 150 locations in the US, Turkey, and South Africa. Pfizer claims its vaccine has proved to be 95% effective in its final trials.
Pfizer and its partner, German firm BioNtech, believe they can produce about 50 million doses by January, and as many as 1.3 billion doses by the end of 2021. Each recipient needs two doses, spaced weeks apart. “The companies will be ready to distribute the vaccine within hours after authorization,” Pfizer said.
While Pfizer’s vaccine may be the first to win authorization in the US, vaccine organizations say shots from several other companies will still be needed. That’s because no one company, or technology, can meet global demand for vaccination.
Other vaccines include one being developed by Moderna Pharmaceuticals, based in Massachusetts; another from AstraZeneca and Oxford University that’s in late-stage testing; and vaccines already authorized in China and in Russia.
The development of a vaccine for a new disease in less than a year has shattered all records, yet it won’t come soon enough to intercept the current winter wave of covid-19 cases in the US and Europe, where infections have reached an all-time high. The US alone is recording more than 170,000 coronavirus cases per day. If undetected infections are accounted for, that could mean half a million Americans are catching the coronavirus every 24 hours.
Because vaccines supplies will be limited at first, most people will have to wait until the middle of 2021, or beyond, to get vaccinated with the Pfizer shot or one from another company. That means for now, avoiding the virus still means avoiding other people. This week, the US Centers for Disease Control began discouraging Americans from traveling for the Thanksgiving holiday next Thursday.
Pfizer’s request to market its vaccines now means it is up to the Food and Drug Administration whether to issue a type of fast-track approval called an “emergency-use authorization.” A committee of advisors will meet in December to assess Pfizer’s data documenting how well the shots worked.
Some experts still question whether a vaccine should be rushed out, saying a formal, somewhat longer approval process would create more confidence in the product among the general public.
Since March, the FDA has used it emergency authorization power to allow the sale of four medical treatments for covid-19 (hydroxychloroquine, donor blood plasma, the antiviral remdesivir, and an antibody), each time on the basis of limited evidence. In every case, it remains disputed whether any of those drugs actually prevent patients from dying.
The Pfizer vaccine employs a novel technology in which part of the virus’s genome is packaged inside fatty nanoparticles. A person’s own cells then use that information to manufacture a single viral protein, called a “spike,” which trains the immune system to recognize the pathogen.
Pfizer said that it is able to manufacture and distribute its vaccine from several locations in the US and Europe and will use special ultra-cold shipping boxes tracked by GPS devices, since its product needs to be kept at a temperature of -70 °C.