Richard Dal Porto

November 9, 2021

Daily Crunch: Malicious hackers gain access to 7 million Robinhood customer names, emails

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PST, subscribe here.

Hello friends! Welcome to Daily Crunch for November 9, 2021. Today we have lots of good news and some bad news. The good? Another startup is taking on the incumbent web search provider, and we’re seeing more funds in more places raise bigger investing vehicles. The bad? Well, it depends on whether or not you are a Robinhood user. — Alex

The TechCrunch Top 3

Robinhood’s data breach steals from the user and gives to the hacker: A social-engineering hack led to Robinhood’s internal tools being accessed by an external party. Per TechCrunch reporting, “more than 5 million customer email addresses and 2 million customer names taken, as well as a much smaller set of more specific customer data.” For a company that recently posted somewhat lackluster earnings, it’s not a great look.
You.com wants to take on Google: The list of startups taking on Google search is starting to get somewhat lengthy. Brave is at it. So is Neeva. DuckDuckGo has been working on the matter. And now You.com has $20 million to help with its search service, which, I found today while testing it, has a somewhat radical interface on display.
Twitter gets the blues: But it’s pretty happy about it. Why? Because Twitter’s subscriber service, Blue, is now out in more markets. This led to a wave of folks signing up and playing around with the service, at least on my timeline. So far people seem to like it. It’s cheap, and given how much time so many of us spend on Twitter, something of a no-brainer at this stage.

Startups/VC

Health tech startup Color snags $100M: After raising $167 million earlier this year, Color is back to the funding well with yet another nine-figure round. The startup’s “software and infrastructure provide tools for preventative health and infectious disease management by making healthcare programs more accessible,” TechCrunch reports. Given that the company is now valued like a public company, it will be interesting to see how quickly Color files an S-1.
Good news for Chicago: Sure, the Midwest is seeing its startup fundraising totals boom, but not all that capital is flowing from local sources. More of it might in the future with the city’s Origin Ventures securing its biggest fund yet.
TechCrunch’s Brian Heater has some really neat notes on a startup building tiny robots here. Which I bring up so that you can read it, and so that you can sign up for his upcoming robotics newsletter called Actuator.
$15M to track crypto shenanigans: Per TechCrunch, crypto risk monitoring is increasingly big business, leading to Solidus Labs raising eight figures for its work in the market. It can detect manipulation and other sorts of market distortions that folks likely care about, given just how much money is sloshing around the crypto markets these days.
Medium buys Projector: In its current permutation, Medium is a publishing platform with a focus on external contributors. I think. It’s been a few cycles since I was last hype about the company. Regardless, the former publisher — plastisher? — bought a startup called Projector, and TechCrunch has the story.
Emergence invests in Talent Hack: Focused on fitness creators, Talent Hack has raised a $17 million round for its service that provides “payment processing, website design and publishing, scheduling software, email automation and CRM” to its target niche. Given how big the creator economy is today, seeing targeted services crop up is not a surprise.
Airbase goes free, challenges rivals: In the Great Corporate Spend Wars, the free-versus-paid discussion took on a new bent this morning with Airbase announcing a zero-cost tier of its previously paid service, and that it is going to return nearly all of its interchange revenues to users. Damn. Expect rival moves from Ramp and Brex in short order.
Truveta raises $100M for its health-data platform: Working with north of a dozen healthcare providers, Truveta is now quite a lot richer than it was and is ready to start letting early adopters use its data service. The company’s tech can provide a daily snapshot of America’s health, including how different vaccines are performing in the market.
If something safe is secure, is something that is very safe Socure? Look, we’re just trying to figure out this startup’s name. Regardless, the company just raised $450 million at a $4.5 billion valuation. The richly valued private company uses AI and ML to confirm online identities. It has now raised through a Series E, which stands for Enough already; go public.
And to close us out, TechCrunch has notes concerning Sweetgreen’s early IPO price range.

15 sectors pi Ventures expects deep tech to disrupt in the next 5 years

Deep tech holds a lot of potential for changing how our world functions, but many applications are still years away from reaching the market.

Looking to the future, Anna Heim analyzed pi Ventures’ Deep Tech Shifts 2026 report, which explores 15 deep tech subsectors expected to reach an inflection point in the next five years.

“If you invest too early in an innovation, then you will have suboptimal returns,” said founding partner Manish Singhal. “If you invest too late, you may also end up getting suboptimal returns, because it is no longer a cutting-edge thing.

“If investment and the timing of innovation getting to a resonance point come together, then good things happen.”

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

Big Tech Inc.

People are surprised that a very rich person owns some crypto: That the person in question is Tim Cook does make the news a bit more well, newsy, but still not surprising. The Apple CEO did not make any news regarding his company, other than to indicate that it doesn’t appear to have near-term crypto hopes and or dreams. Still, is it possible to be surprised that any person with a wealth roughly the size of the moon or greater owns some crypto assets? No.
Everyone wants to get into games: TikTok has gaming news today, as does Netflix. Basically, games are huge business and any platform media company probably has to have a gaming strategy in time.
Microsoft takes on Chromebooks: With a new, cheap laptop running a Windows 11 variant, Microsoft wants to fight back against Google’s successful classroom push on the back of its Chromebook effort.
Airbnb boosts host safety, consumer confidence: Look, there’s a lot of news in Jordan Crook’s latest piece on Airbnb, but what matters the most is that the home-rental company is bringing better WiFi speed reporting to its platform. Rejoice!
Lyft to bring driverless taxis to Vegas in 2023: The steady drumbeat of actual commercial news from self-driving cars continues today, albeit with news from Lyft that is both market constrained and far off. Still, every bit of news indicating that self-driving cars are coming makes my heart sing.

TechCrunch Experts

Image Credits: SEAN GLADWELL / Getty Images

TechCrunch wants to know which software consultants you’ve worked with for anything from UI/UX to cloud architecture. Let us know here.

If you’re curious about how these surveys are shaping our coverage, check out this interview Anna Heim did with Jamie Shostak and Michael MacRae, co-founders of Appetiser, “Appetiser’s co-founders discuss building client relationships and getting to MVP.”

November 8, 2021

Technology is transforming global treaties

Thomas McInerney Contributor

Thomas McInerney is executive director of the Rule of Law for Development Program at Loyola University Chicago School of Law. A member of the Group on Earth Observations (GEO) Data working group and its Law and Policy subgroup, he works to develop innovative approaches to improving the effectiveness of international law and governance. Professor McInerney is the author of “Strategic Treaty Management: Practice and Implications.”

The TechCrunch Global Affairs Project examines the increasingly intertwined relationship between the tech sector and global politics.

The word “treaties” doesn’t exactly conjure images of modernity so much as a dusty history book. But as with other aspects of business and society, technology is rapidly changing how treaties are monitored and enforced — with profound implications for global governance and international law.

Treaties are legally binding international agreements between countries. Pick any major issue affecting the planet or people and there is probably a treaty regulating the matter. Climate change, biodiversity, human rights, refugees, labor, shipping, transnational crime and fisheries are among the fields governed by global treaties, which count most countries — the U.S.-included — among their members. Treaties are central to global governance, underpinning most U.N. Sustainable Development Goals, for instance.

But for treaties to work — we need to be able to quickly and accurately discern compliance and results. This has been historically challenging — violators by nature are inclined to subterfuge. And even in areas of cooperation, like scientific measurement and assessments, imprecise, infrequent and inaccurate data can prevent signatories from understanding how a problem is evolving or if their solutions are helping.

The era of big data

To meet this challenge, across dozens of treaties, research communities are marshalling new technologies to produce fertile ecosystems delivering untold levels of data and knowledge on underlying conditions and results measurement.

Technology is generating orders of magnitude increases in data quantities. Vast ecosystems of instrumentation and computing hardware are being deployed. Increasingly today scientific communities and governments combine remote sensing and Earth observation (EO) satellites, cloud computing, artificial intelligence (AI), machine learning (ML), and modeling and visualization tools. As we get better at processing and analyzing these data, we are getting closer to delivering near real-time, global and more precise knowledge than ever before.

While individual technologies have made important contributions, the real power behind these developments is their use in combination. Together these technologies enable what I call “intelligent treaty systems.”

Anti-fishing technology

Consider the Convention on Biological Diversity (CBD), which protects biodiversity of flora and fauna, promotes its sustainable use, and ensures fair and equitable access to benefits from its use. To determine species’ ranges and populations, biodiversity researchers deploy camera traps and microphones in remote locations that transmit data on animal movements via cellular connections to the cloud. With a single camera generating up to 50 TB of data per year, deep learning techniques are used to analyze the massive data and create maps of species’ habitats and numbers. Similarly, drones with video cameras survey sea turtle migration lanes in Costa Rica, with footage analyzed through deep learning algorithms trained to identify individual turtles. Meanwhile thousands of smartphone-wielding citizen scientists record and upload animal sightings to mobile web platforms such as Merlin.

Data from all of these sources are shared with the Global Biodiversity Informatics Facility in Copenhagen, an intergovernmental global biodiversity data repository. Its records have increased tenfold since 2007, now exceeding two billion records. Together this data and research informs the work of the International Panel on Biodiversity and Ecosystem Services, the dedicated scientific platform for the CBD.

Meanwhile conservationists have harnessed Automatic Identification System (AIS) transponders used for ship safety to combat illegal fishing AIS signals to provide comprehensive global data on vessel activity. Groups such as Global Fishing Watch analyze AIS satellite data captured by private firms like ORBCOMM with deep learning to pinpoint and map illegal fishing worldwide. Researchers even use AI and ML to identify vessels that illegally turn off their AIS systems to evade detection.

It’s not just the environment. Satellites are helping fulfill the promise of the Anti-Personnel Landmine Ban Convention. At the outset of the process, Earth observation data are fed into a dedicated geospatial database and mapping platform operated by ESRI, the Information Management System for Mine Action to create maps of mine-contaminated lands. Web platforms also enable individuals to upload information on mine-affected areas. Mine remediation experts on the ground upload more detailed data obtained through diverse sources including drones equipped with ground penetrating radar (GPR) and even trained rats with RFID collars to build precise maps of landmine-contaminated areas. Technicians then use machinery combining GPR and robotics to identify (often using AI and ML) and destroy individual mines.

Recent government attacks on vulnerable Rohingya communities in Myanmar show how technology is also increasingly exposing and documenting otherwise hidden violations of human rights and refugee treaties. Human rights researchers have used Earth observation data to track troop movements, evidence of expulsions, razing of villages and mass killings. Meanwhile photos and video that individuals supplied through mobile phones were channeled through secure cloud platforms such as the Eyewitness to Atrocities portal. ML and AI were used to automate EO data and video imagery analysis. Groups like Amnesty International and SITU Research aggregated the data to generate virtual reality visualizations of settings where violations occurred. EO data was cited in the Gambia v. Myanmar case before the International Court of Justice. Voluminous records of hate speech on Facebook that fueled attacks on Rohingya are being collected and analyzed using ML for the case as well.

Risks and rewards

Despite evident progress, intelligent treaty systems are still emerging and experimental. Yet indications are that the value of technology is gaining recognition and will prove transformative. Certainly, numerous challenges must be overcome to realize technology’s full potential. At a basic level, all the scientific knowledge in the world won’t matter if governments don’t act on it and live up to their treaty obligations.

One drawback is the regulatory risk around data protection and privacy, especially when it concerns human rights and already vulnerable populations. Protections must be implemented to ensure data are used discreetly and anonymously where possible. AI is a further concern. The EU draft regulation on AI seeks to outlaw the use of certain technologies such as biometric identification systems in public settings, and similar to its General Data Protection Regulation would affect activities outside of Europe. Likewise, although the public sector geospatial community has made open data a global norm, efforts must be made to integrate the expansion of private sector geospatial data into global governance efforts.

Although treaties are creatures of diplomacy and typically considered rigid in nature, the story of technology’s application shows a dynamic process of bottom-up self-organization by diverse communities across public, private, nonprofit and academic sectors. These activities are likely to make major contributions that offer hope for our ability to overcome many significant planetary challenges.

November 8, 2021

Daily Crunch: South Africa’s JUMO lands $120M round from Visa, Fidelity and Kingsway

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PST, subscribe here.

Hello and welcome to Daily Crunch for November 8, 2021! Sure, Elon Musk kicked up a Twitter dust storm by tweeting a poll regarding whether he should sell stock for reasons that are a bit less than purely charitable, but it’s Monday now, which means more serious news. Kinda. — Alex

The TechCrunch Top 3

Chinese regulation dings SoftBank returns: In our very connected world, if one country shakes up its regulatory regime, folks all over the world can get hit in the wallet. Today we learned that SoftBank’s Vision Fund 1 saw its returns fall sharply in part due to Didi’s falling valuation — a decline that is directly linked to the Chinese government’s actions against the company following its U.S. IPO. That another continent’s investors may be paying the most as a result of China’s crackdown is merely further irony. (Equity riffed on this earlier today, if you want more.)
Corporations love the metaverse: The metaverse is just VR with more social, it appears, but that isn’t stopping companies from hopping aboard the Facebook bandwagon. Today it was Niantic, which has some notes on where it sees the metaverse going. Care about that or not, Facebook’s pivot is drawing notable commentary, including from Shasta Ventures’ Jacob Mullins.
McAfee sells to investor consortium: Sure, you no longer pay for antivirus protection on your Windows PC, but that doesn’t mean that the company you may have once cut checks to is not worth anything. It’s worth $14 billion, it turns out. Yes, McAfee, around since 1987, has a new corporate home to the tune of $26 per share.

Startups/VC

Before we dive into the hurly-burly of discrete startup news items, as a followup to our dive into the Latin American fintech market last week, TechCrunch caught up with LatAm-focused QED partner Lauren Morton to dig in even more deeply. Enjoy!

Fidelity invests in Africa: South Africa’s Jumo just raised $120 million from the investing powerhouse, along with Visa and Kingsway Capital. The fintech company raised $55 million in its preceding round. What does it do? Financial services for businesses in emerging markets!
Radio-spying satellites are big business: That is the lesson from HawkEye 360 raising $145 million in new capital. The company, TechCrunch reports, “monitors radio frequency (RF) signals, like those emitted by marine radios or emergency beacons, on the premise that invisible electromagnetic spectrum is as ripe for information as the visible world.” As a 100% sucker for all things space and space-related, I view this particular news item as very cool.
Car rentals boom in India: Zoomcar, based in Bangalore, just raised $92 million in new capital to expand its car rental business not only in its home market, but also in markets afield. SternAegis Ventures led the Series E.
Here’s today’s mega-round for an e-commerce rollup play: Tired of these yet? Investors aren’t. Berlin-based Razor recently announced a $125 million round at a valuation north of $1 billion to keep buying up e-commerce brands. It’s a big play around the world that has raised roughly eleventy-seven kajillion dollars. (That these investments are also a wager on Amazon not building products for all verticals in time is notable; perhaps they are effective wagers on antitrust legislation around the world?)
Matter Labs raises $50M to make Ethereum faster: The Ethereum blockchain is a neat thing. Many apps and services have been built atop it. And it’s pretty jammed with traffic, leading to high fees. Sometimes stupidly high fees. So, Matter Labs wants to remove some of that traffic to a side chain to make the whole experience faster. Why not just use a different chain? Well, because folks dig Ethereum, and where the developers go, so goes the progress of tech.
And, to close out our startup coverage, H20.ai raised $100 million at a $1.6 billion pre-money valuation to help companies get up and running with AI tech.

Mixing the personal with the professional in startup fundraising

Image Credits: TechCrunch

The pandemic has rewritten the way investors and startup founders do business, but “chemistry is important,” notes Brian Heater.

Laela Sturdy, general partner at CapitalG, and Webflow co-founder and CEO Vlad Magdalin joined Brian on TechCrunch Live to discuss COVID-era deal-making and the changing nature of startup-investor relationships.

“As great as Zoom is, to me, that in-person experience takes you to the next level of getting to know someone,” said Sturdy.

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

Big Tech Inc.

This holiday season the App Store won’t close to developers: Tech and its constituent businesses are moving faster as time goes along. Gone are the days when VCs took August off, at least if they want to win allocation in hot deals. And now developers will get less of a winter break thanks to Apple ending a rather archaic-seeming practice of freezing its app marketplace to developer submissions during the holiday period.
YouTube still working to undercut TikTok: Yep, Google still has ByteDance envy, and to bolster engagement with its own short-form video products, it intends to have users who open the YouTube app to get defaulted to its short-form videos, provided that they have seen them before. That will do it, right? No.

TechCrunch Experts

Image Credits: SEAN GLADWELL / Getty Images

Are you all caught up on last week’s coverage of growth marketing and software development? If not, read it here.

TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this survey along to your clients; we’d like to hear about why they loved working with you.

November 7, 2021

Digital Diplomacy 4.0: Return of the Jedi?

Tom Fletcher Contributor

Tom Fletcher, CMG, is principal of Hertford College, Oxford. He is a former U.K. ambassador and 10 Downing Street foreign policy adviser to three prime ministers, and a visiting professor at NYU. He is the author of the bestselling "The Naked Diplomat: Power and Politics in the Digital Age" (2016) and the forthcoming "Ten Survival Skills for a World in Flux" (2022).

As British ambassador to Lebanon, Tom Fletcher was one of the first ambassadors to “go digital.” Ten years on, he reflects on what the first wave of “technodiplomats” got right and wrong, and where digital diplomacy goes next.

Like every industry or craft, diplomacy — a world once dominated by protocol and platitudes, maps and chaps — has already been hugely disrupted by digital technology.

Also like many professions, the most visible impact has been on the tools: better kit, better comms (internal and external), faster pace. Again like many, the real impact has been less visible and is about culture: the humility that comes from understanding how power has shifted, the agility that the new tools allow, the effectiveness that comes from being more inclusive and the transparency that comes from increased public understanding of what was once a closed world.

Ten years ago this fall, I was posted as Her Majesty’s envoy to Lebanon. At 36, I was young for the role. The Arab Spring was firing up young people across the region and I wondered if technological change could transform the way statecraft engaged with people. I began experimenting with what we started to call (after a few clunky options like “Twiplomacy”) “digital diplomacy.” A decade on, digital diplomacy has already moved through several phases — three in fact — and stands on the threshold of a fourth. Much has been achieved. But if it is to succeed in putting more streetcraft into statecraft, we must take into account what we did right and wrong.

The first phase was a brave new world. With its 21st-century statecraft program under Secretary of State Hillary Clinton, the U.S. State Department led a period of excitement and optimism about the way that diplomats could use the new tools of communication and connection. For the ambassadors of that era who genuinely adopted and adapted, these were heady times. The rules from capitals were loose: One minister told me that he didn’t care what I tried as long as it stayed out of the U.K. media. Many of us were able to proceed until apprehended. There were plenty of mistakes. And risks: The smartphone I tweeted relentlessly from was also the device that terrorists used to track my movements.

But this was a period when we could surprise people with a desire to connect, engage and show some humility. It seemed possible to imagine that social media would open up societies and promote real agency and freedom. One British ambassador drank so much of the Kool-Aid that he even suggested that the most powerful weapon in the Middle East was the smartphone. I was wrong about that, so far.

The second phase was the institutionalization of digital diplomacy. We started to create structures around the wider dialogue between the old emperors and the new. Worried by the implications for geopolitics of the pace of technological change, I left the U.K. government to try to make the case for the urgency of this effort. After my 2017 report on the United Nations, the U.N. launched an effort for Big Tech and government to talk to rather than past each other. Both the U.N.’s High Level Panel and the Global Tech Panel were genuine and effective attempts to translate between those disrupting global politics, economics and society and those nominally still in charge, an alternative to trying to summon the Zuckerbergs before parliamentary or congressional committees. In “The Naked Diplomat,” I had proposed that countries should appoint “tech ambassadors.” The Danes went for it, with success, challenging the tech companies to engage with states in a veritable dialogue.

Meanwhile, foreign ministries adjusted to social media far more quickly than to any previous technology. Having been one of only four U.K. ambassadors on Twitter in 2011, within a few years all but four were, with some like John Casson in Egypt amassing over one million followers. For a profession without many ways to assess impact, there was real willingness to experiment with social media. I spoke at over 20 conferences of ambassadors, urging colleagues to give it a try, show the human behind the handle and engage (rather than transmit). I used to tell them it was like the largest diplomatic reception they could imagine: Don’t stand at the margins, say nothing or bellow across the room. Yes, there were risks. But the biggest risks were not to be in the conversation.

As more adopted this approach, foreign ministries faced new trade-offs over agility versus confidentiality of their communication. My 2016 review of the Foreign Office recommended a pivot toward the former: Perhaps Sir Kim Darroch, the outstanding U.K. ambassador driven out by former President Trump over his leaked cables, might subsequently have disagreed. But we are now reliant on that ability to communicate at speed.

Diplomacy over the last two years would have been unimaginable without Zoom and WhatsApp. For a profession that used to do everything to minimize direct contacts between leaders, diplomats were quick to embrace videoconferencing once the tech made it a serious option. The pandemic drove summits and conferences online, saving enormous amounts of carbon with little obvious negative impact on the outcomes.

The third phase overlapped with the second: the empire struck back. Authoritarian governments found new ways to use digital technology to suppress freedom. Trump exploited Twitter to fire up xenophobia, prejudice and insurrection. More creatively he also used it — as at home — to court potential allies and to pressure diplomatic opponents. Meanwhile, Russia’s Vladimir Putin weaponized the internet against democracy and built troll factories. Twitter mobs made it harder to share the nuance of complex diplomatic positions, let alone use social media to reach compromise and common ground. Polarization was clickbait and the center did not hold. Governments realized that cyber was the new battleground and started to think in terms of defense.

Meanwhile, Big Tech grew, morphing in some cases into entities more powerful and sometimes more reactionary than governments. Mischievously I had wondered aloud in 2013 whether we should ask Google to be on the U.N. Security Council. Google might now ask why it should bother. While Big Tech grew and flexed its muscles, it quietly recruited the talent, depriving governments of human capital as well as taxes. Symbolically, and perhaps inevitably, the (excellent) first Danish tech ambassador was poached by Microsoft and Britain’s Liberal Democrat leader was poached by Facebook. As the legal arms race intensified, the EU’s titanic clashes with Big Tech over data or incitement were a long way from the idealism of the brave new world phase, when we genuinely believed that we could solve more problems together.

Where does this leave us today? I am now more of a realist about technology and diplomacy, but I remain an optimistic one. We can still crack challenges together, including the Sustainable Development Goals. But to do so, governments must be more honest about what they can’t do alone. Tech needs more patience to stick with slower moving and often clumsy states, and more honesty about where it has become part of the problem.

Meanwhile, diplomats can continue to use technology to make them more effective: My research group at New York University worked on wearable technology to help a diplomat read a room; a Diplopedia to do a better job of conserving diplomatic records; and intelligent and transparent use of sentiment mining to better understand public opinion. I stand by the hypothesis that the more oversight the public has of issues of war, the more peaceful government policy will be. Perhaps one of the most exciting areas for diplomacy will be the potential to combine it with the latest advances in collective psychology and social media to make peace between societies rather than between states, and between nations and their histories.

The next phase of digital diplomacy should also see work on the next great peace processes: with the planet, with Big Tech, between young and old, between hosts and migrant communities, and ultimately maybe with technology itself. I think digital diplomacy can help us deliver better outcomes on each of those.

Finally, this next phase of digital diplomacy will see diplomats returning to the basics of the craft. We’ll need a more focused effort to develop citizen diplomats, equipped with vital diplomatic skills like empathy and emotional intelligence: Education is therefore upstream diplomacy. As I’ve proposed elsewhere, we’ll need an old school pen and paper effort to rewrite the global rules for protection of our freedoms in an online world. We’ll need embassies to escape from the confines of buildings and return to their original mission as groups of people sent to connect. And we’ll need diplomats who can still do what Edward Murrow called the “last three feet,” that crucial human connection that will be the last diplomatic skill to be automated.

That is an exciting and urgent agenda. If diplomacy did not exist we would need to invent it. But now we need to reinvent it. And that is too important to leave to diplomats.

November 6, 2021

How one startup is shaking up the consumer trading boom

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by the daily TechCrunch+ column where it gets its name. Want it in your inbox every Saturday? Sign up here.

Happy Saturday, everyone. We have a metric mountain of things to get through today. Below you’ll find notes on a fascinating startup round in the consumer fintech market, notes from the low-code world thanks to an earnings day interview with Appian CEO Matt Calkins, and quick hits on IPOs, Kidas’ venture capital round, a public building and NFTs. Let’s go!

How one startup is shaking up the consumer trading boom

Robinhood rode a wave of consumer interest in investing and trading all the way to the public markets. Despite some recent setbacks, the company remains evidence of how much interest there is in the market not only to buy stocks but also to make more exotic options trades.

It’s the latter that we’re talking about today. Options AI, a distributed startup with ties to Chicago has raised a $4.1 million Seed round. I’ve known the company for some time as I go back with a member of its founding team but haven’t had a chance to write much about it.

Now that it raised capital from three lead investors — Akuna Capital, Miami International Holdings and Optiver Principal Strategic Investments — and others it fits into our remit.

Essentially options are complicated, and many folks approaching the trading varietal lack the tooling and sophistication to make good choices when they dive in. If you doubt me there, ask your trading friends about their options strategy. It will be an illustrative conversation.

Options AI has built a tool that allows traders better see trades before they execute them and make better choices when it comes to multileg options and the like. It’s a pretty neat tool, and as someone who has long had a loose comprehension of how options trading works and is priced, it helped me grok.

But better charting is only a bit of why Options AI has held my interest. The other reason is that it is charging for trades. The startup has a flat $5 trade cost, which means it is swimming against the free-trading push that Robinhood, Webull and others have pursued in recent years.

Today Options AI works with equity options but told The Exchange that it may add crypto and futures options in time. The company describes its current moment as poking its head out from where it has been building and testing, content that its early traction and user data indicates that it is onto something. Certainly its new investors agree.

A data point on options before we go. Why are major consumer trading platforms so interested in options trading? Because it is lucrative as all hell. For example, options trading generated $64 million for Robinhood in Q3 2021. Equity trading brought in my $50 million. It’s a big business.

And with a flat-fee and PFOF revenues, Options AI could be in a pretty attractive market position if it can get enough folks to show up. Who is the startup’s target user? I reckon someone who has gotten into trading but wants slightly more specialized tooling. And Robinhood’s numbers indicate that there could be quite a few of those users out there.

More when we squeeze Options AI for trading growth data.

Shaking up the SaaS pricing market

Mostly TechCrunch has explored the SaaS pricing debate through the lens of subscription versus on-demand or usage-based pricing schemes. This is a good window through which to view market evolution as many startups today are born as APIs for which on-demand pricing simply makes more sense. And there’s some SaaS fatigue out in the market as well.

Enter Appian, which is doing something a little different. I caught up with the company’s CEO Matt Calkins this week after his company’s earnings call, expecting to chat mostly about the low-code market, process automation and process mining. We did talk about those things — Appian operates a connected set of software that allows customers to mine their processes for things to automate, helping them design and then automate as needed — but we wound up talking about pricing.

Appian has put together something called unlimited pricing, which is a sort of SaaS with an open-ended cap on use. SaaS is often priced per seat or per application, but Calkins et al. are trying something that feels like a mix of what’s good about SaaS and on-demand. Or more simply, by charging a flat rate for a year’s service and not limiting use, the company is effectively daring customers to use lots of Appian’s service and get stuck in with its platform.

Calkins was unnaturally clear for a public company CEO that the unlimited plan may offer some customers what works out to a very good deal. Saying that he likes to “innovate” on pricing, Calkins argued that while its unlimited pricing model could lead to a customer building a bunch of stuff using Appian tech and perhaps paying less than they might through a different pricing mechanism, it was just the cost for getting them to go all-in on using its tech.

At which point Appian will have a long-term customer that it can generate high-margin top line from. Not a bad trade.

IPO Roundup

Golly gee did we want IPOs and gosh darn have they not come. A roundup:

HashiCorp filed to go public, our dig into its numbers can be found here.
AllBirds priced its DTC IPO above range, and then ran up more points when it began trading. Pricing notes here, financial coverage here.
NerdWallet priced its IPO midrange, before trading higher. It has given up some ground since, but still had a cracking debut. Financial coverage here and here. (And shoutout to former TechCruncher Felicia Shivakumar, who once took a shot on your current scribe launching a video show for TC and is a very excellent human, but also now works for NerdWallet!)
Nubank filed to go public, our first look at some of its economics can be found here.
The Bird SPAC deal completed, and it didn’t have the best first day.
And, finally, Backblaze set first pricing notes for its own IPO, which we found fascinating given the company’s old-school revenue scale.

Various, sundry

Kidas ran into my eyeline this week, the startup works with parents to help keep kids safe in online gaming environments. It just raised $2 million, adding to its modest fundraising record. The company told The Exchange that it “unlocks new information for parents they otherwise wouldn’t have and this helps them to better connect with their kids over something they love.”
I will never be stoked about anything that gives authority more purview over underlings’ digital activities, but given the spiraling number of communications methods in the gaming world, parents are going to want some oversight.
Notably the startup says that its tooling doesn’t interfere with gameplay, so it doesn’t trigger anti-cheat software, which really, really matters.
More on the company later, but it’s based in Philly, which I dug.
Building goes public: Not in our IPO section, but a startup I’ve been passively tracking called LEX Capital Markets just took a single building public. The company has a really neat model. Worth peeking at.
And, finally, extending our recent NFT coverage, Mythical just raised $150 million for its NFT-infused game. Perhaps that’s where the NFT wind is heading.

—Alex

November 5, 2021

What I learned building a fact-checking startup

Dhruv Ghulati Contributor

Dhruv Ghulati founded one of the first global startups tackling online misinformation and is one of the first machine learning scientists to research automated fact-checking. He holds degrees in economics and computer science from the London School of Economics and University College London.

In the aftermath of the 2016 U.S. election, I set out to build a product that could tackle the scourge of fake news online. My initial hypothesis was simple: build a semi-automated fact-checking algorithm that could automatically highlight any false or dubious claim and suggest the best-quality contextual facts for it. Our thesis was clear, if perhaps utopian: If technology could drive people to seek truth, facts, statistics and data to make their decisions, we could build an online discourse of reason and rationality instead of hyperbole.

After five years of hard work, Factmata has had some successes. But for this space to truly thrive, there are a great deal of barriers, from economic to technological, that still must be overcome.

Key challenges

We quickly realized that automated fact-checking represents an extremely hard research problem. The first challenge was defining just what facts we were checking. Next, it was thinking about how we could build and maintain up-to-date databases of facts that would allow us to assess the accuracy of given claims. For example, the commonly-used Wikidata knowledge base was an obvious option, but it updates too slowly to check claims about rapidly changing events.

We also discovered that being a for-profit fact-checking company was an obstacle. Most journalism and fact-checking networks are nonprofit, and social media platforms prefer working with nonprofits in order to avoid accusations of bias.

Beyond these factors, building a business that can rate what is “good” is inherently complex and nuanced. Definitions are endlessly debatable. For example, what people called “fake news” often turned out to be extreme hyperpartisanship, and what people proclaimed “misinformation” were really contrarian opinions.

Thus, we concluded that detecting what was “bad” (toxic, obscene, threatening or hateful) was a much easier route from a business standpoint. Specifically, we decided to detect “gray area” harmful text — content that a platform is not sure should be removed but needs additional context. To achieve this, we built an API that scores the harmfulness of comments, posts and news articles for their level of hyperpartisanship, controversiality, objectivity, hatefulness and 15 other signals.

We realized that there was value in tracking all the claims evolving online about relevant corporate issues. Thus, beyond our API we built a SaaS platform that tracks rumors and “narratives” evolving in any topic, whether it is about a brand’s products, a government policy or COVID-19 vaccines.

If this sounds complicated, that’s because it is. One of the biggest lessons we learned was just how little $1 million in seed funding goes in this space. Training data around validated hate speech and false claims is no ordinary labeling task — it requires subject-matter expertise and precise deliberations, neither of which comes cheaply.

In fact, building the tools we needed — including multiple browser extensions, website demos, a data labeling platform, a social news commenting platform and live real-time dashboards of our AI’s output — was akin to building several new startups all at the same time.

Complicating things further, finding product-market fit was a very hard journey. After many years of building, Factmata has shifted to brand safety and brand reputation. We sell our technology to online advertising platforms looking to clean up their ad inventory, brands looking for reputation management and optimization, and smaller scale platforms looking for content moderation. It took us a long time to reach this business model, but in the last year we have finally seen multiple customers sign up for trials and contracts every month, and we are on target for $1 million in recurring revenues by mid-2022.

What needs to be done

Our journey demonstrates the high number of barriers to building a socially impactful business in the media space. As long as virality and drawing eyeballs are the metrics for the online advertising, search engines and newsfeeds, change will be hard. And small firms can’t do it on their own; they will need both regulatory and financial support.

Regulators need to step up and start enacting strong laws. Facebook and Twitter have taken massive strides, but the online advertising systems are far behind and emerging platforms have no incentive to evolve differently. Right now, there is no incentive for companies to moderate their platforms of any speech that isn’t illegal — reputational damage or fear of user churn are not enough. Even the most ardent supporters of free speech, as I am, recognize the need to create financial incentives and bans so that platforms really take action and start spending money to reduce harmful content and promote ecosystem health.

What would an alternative look like? Bad content will always exist, but we can create a system that promotes better content.

As flawed as they may be, algorithms have a big role to play; they have the potential to automatically assess online content for its “goodness,” or quality. These “quality scores” could be the basis to create new social media platforms that aren’t ad based at all but used to promote (and pay for) content that is beneficial to society.

Given the scope of the problem, it will take immense resources to build these new scoring algorithms — even the most innovative startups will struggle without tens, if not hundreds, of millions of dollars in funding. It will require multiple companies and nonprofits, all providing different versions that can embed in people’s newsfeeds.

Government can help in several ways. First, it should define the rules around “quality”; firms trying to solve this problem shouldn’t be expected to make up their own policies.

Government should also provide funding. Government funding would allow these companies to avoid watering down their goals. It would also encourage firms to make their technologies open to public scrutiny and create transparency around flaws and biases. The technologies could even be encouraged to be released to the public for free and available use, and ultimately provided for public benefit.

Finally, we need to embrace emerging technologies. There have been positive strides by the platforms to invest seriously in the deep technology required to do content moderation effectively and sustainably. The ad industry, four years on, has also made progress adopting new brand safety algorithms such as Factmata’s, that of the Global Disinformation Index and Newsguard.

Although initially a skeptic, I am also optimistic about the potential of cryptocurrency and token economics to present a new way of funding and encouraging good quality, fact-checked media to prevail and distribute at scale. For example, “experts” in tokenized systems can be encouraged to fact-check claims and efficiently scale data labeling for AI content moderation systems without firms needing large upfront investments to pay for labeling.

I don’t know if the original vision I set out for Factmata, as the technological component of a fact-based world, will ever be realized. But I am proud that we gave it a shot and am hopeful that our experiences can help others chart a healthier direction in the ongoing battle against misinformation and disinformation.

November 5, 2021

Helion Energy will use $500M Series E to power up its fusion energy efforts

Hello and welcome to Daily Crunch for November 5, 2021! We made it, everyone, happy Friday. Don’t forget to take off in the direction of our upcoming Space event before we reach exit velocity and leave you behind! And have a relaxed weekend. We’re all a little tired. — Alex

All systems go: Buy your pass to TC Sessions: Space 2021

The TechCrunch Top 3

How Cruise intends to make robotaxis a commercial reality: Curious why we are not yet zipping around in computer-driven cars, putting the days of wondering if right turns on a red light are allowed? Me too. The answer is that to get to that point is much more work than folks may have thought. Cruise is turning to simulators and custom silicon for its own efforts. Let’s hope they have cracked it. I hate driving.
HashiCorp’s IPO details an open source powerhouse: It’s always good fun to chat with companies building open source code. Once an oddity, many startups today are working on and with code that is open for all. HashiCorp has ridden the trend all the way to an IPO filing, which we were more than excited to read.
$500M+ for commercial fusion: While we are on the subject of tricky tech challenges like self-driving cars, let’s talk about fusion for a minute. Helion Energy just raised $500 million for its efforts to pull energy from fusion reactions, with another $1.7 billion in the offing if it can hit certain milestones. The question, TechCrunch notes, is whether the company can yank more power from its fusion tech than it takes to operate. Let’s see.

Startups/VC

Before we get into specific news items, if it feels like today’s venture capitalists are putting more capital to work, more quickly, while getting smaller ownership stakes in global startups, you are right! The question is if they are growing more quickly.

Lime raises pre-IPO round: Now that Bird is a public company, it only seems fitting that its former archrival Lime is also prepping its own public offering. The green-branded scooter and e-bike company just locked in $523 million in new funding, including $418 million of convertible debt. Let’s see if Lime can scoot its way to an IPO in short order.
More money for self-driving tech: Speaking of nine-figure rounds for things that move, Momenta has just added $500 million to its own coffers. The autonomous driving tech company from China had previously raised $300 million in a round that it just extended. That’s a lot of duckets. At this point I am curious if we’ve seen north of $100 billion invested privately to tackle this particular technology challenge.
New DJI drone is good, expensive: Drone tech has taken leaps and bounds in recent years, improving across nearly all strata that we care about. Our own Matt Burns confirms as much in his review of the new DJI Mavic 3. Sadly it costs north of $2,000, so will fly far from the hands of most consumers.
Thirteen Lune raises $3M, partners with major American retailer: The beauty market is big business, and Thirteen Lune is taking its direct-to-consumer beauty platform to the masses with a partnership with Target. That deal made TechCrunch sit up and take note of the company’s funding and progress.
Today in good startup names, we present MilkRun: Regardless of if you buy milk by the gallon, or the dozens of gallons, we all eat and drink each day. MilkRun wants to feed you with its “subscription service delivering weekly grocery staples sourced from small, local farms,” TechCrunch reports. Now flush with a $6 million Series A, the startup is hoping to extend its growth that saw it bolster revenues by 15x in 2020.
And if you want the TechCrunch take on recent venture capital data regarding female founders, we have just the podcast for you.

The holiday shopping season is coming: How are growth marketers preparing?

With only three weeks left to the start of the holiday shopping season, Miranda Halpern checked in with several growth marketers to find out how they’re advising their clients to prepare for supply chain disruptions.

Cargo ships are stacked up outside ports, and empty shipping containers are in short supply, as are the truck drivers who would take them to market. This is not the time for doing business as usual.

To gather advice and insights, she interviewed:

Julio Lopez, director of client strategy, retail practice lead, Movable Ink
Chris Toy, CEO and co-founder, Marketer Hire
Kristin Dick, head of operations and growth marketer, Tuff
Dipti Parmar, founder, Dipti Parmar Consulting

The holiday shopping season is coming: How are growth marketers preparing?

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

Big Tech Inc.

Don’t be surprised that Tencent is making its own chips: Thus argues our own Rita Liao, who does a killer job on the China beat. The Chinese tech giant got a stock market boost this week when it showed off new chips under its own imprint. With news from Cruise and Tencent this week on the silicon front, perhaps we should expect every company over a certain market cap to have its own chips coming in the future.
“A flagship framework used by Google and scores of other advertisers for gathering claimed consent from web users for creepy ad targeting looks set to be found in breach of Europe’s General Data Protection Regulation (GDPR),” writes our own Natasha Lomas, our reporter on the EU privacy beat. It turns out that a method of collecting consent to comply with GDPR isn’t, well, in compliance.

TechCrunch Experts

Image Credits: SEAN GLADWELL / Getty Images

If you’re curious about how these surveys are shaping our coverage, check out this article on TechCrunch+ from Miranda Halpern, “The holiday shopping season is coming: How are growth marketers preparing?”

November 4, 2021

Daily Crunch: IBM managed IT services spinoff Kyndryl starts trading on NYSE

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello and welcome to Daily Crunch for November 4, 2021! We have loads to get to, but don’t space out on checking out the agenda for our upcoming TC Sessions: Space event. It’s going to be, ahem, out of this world. — Alex

Announcing the agenda for TechCrunch Sessions: Space 2021

The TechCrunch Top 3

Google launches third-party payment support in South Korea: Developers with apps in the South Korean Google Play marketplace will have the ability to “offer alternative payment systems alongside Google’s own,” after a law passed in the country changed the rules. If that sounds like a small win, you haven’t been paying attention. Alphabet and Apple are hell-bent on keeping as much income from their app stores as possible, regardless of whether such actions are developer- or consumer-friendly.
Latin American fintech startups are living up to their hype: If you are building a financial services company, Latin America is just about the hottest market for your wares. In the wake of record fundraising numbers, TechCrunch did a little digging into the space, learning what is driving the startup cohort forward. And, yes, Nubank’s IPO came into it.
Driverless taxis come to San Francisco: You might have expected self-driving car services to start their lives in the City by the Bay. After all, per capita it is simply lousy with tech folks. But, given the city’s complex and hilly layout, it wasn’t. But now Cruise, Alphabet’s self-driving subsidiary, is running taxis there. And if they can do so in San Francisco, perhaps they will soon make it to our own cities.

Startups/VC

Before we dive into startup news, our own Anna Heim has a great dive into the current SaaS versus on-demand pricing debate that I wholeheartedly recommend.

No, Gwoop is not Whoop for Goop: Instead, Gwoop is an esports training platform that is linking up with high school gaming leagues. This is awesome, and is more evidence that I was born several decades too early. Esports in schools? We did not that, unless you counted competitive snake-playing on our Nokia bricks. Regardless, the esports training market is doing well it appears, given that related startup Metafy also raised this year.
Judge grounds Blue Origin spacesuit over moon mission: Here’s something new for the newly self-employed Bezos to moon over, literally. His space company’s efforts to wedge into the NASA moon-mission budget just got dismissed. So much for that pie-in-the-sky attempt.
UpWest raises $70M fund to bring Israeli startups to the U.S. market: If you are a startup that is doing well in one market, you will look for another. It’s like the opening of “Pride and Prejudice,” but instead of a “single man” put in startup, plug-in well funded for “good fortune” and desire another geography to sell into in for “be in want of a wife.” That, basically, is UpWest’s value prop. It wants to help Israeli companies take on a much bigger market.
WhyLabs raises $10M for AIobs: AI models are not alive, per se, but WhyLabs wants to help companies keep tabs on their ML setup in case it loses health. The company’s new round comes after it raised $4 million in a seed round last year.
PubNub shows that data streaming is big business: Now flush with $65 million in new capital, PubNub’s bet on data streams appears to be paying off. And the company is flush with a Series E to help build out its APIs that help “power messaging and data updates for apps and other digital businesses” in new geographies.

Why more SaaS companies are shifting to usage-based pricing

Boston-based VC firm OpenView interviewed nearly 600 SaaS companies for its annual pricing survey and the results are in: Usage-based pricing has gone mainstream.

Last year, 34% of survey respondents said they were using a flexible pricing model. This year, that figure rose to 45%.

“When AI can automate tasks, the more successful the solution is, the fewer people need to be logging in,” said OpenView operating partner Kyle Poyar.

“Seats are just an outdated way of charging and don’t allow a company to communicate value or invest in features that would add more value.”

Why more SaaS companies are shifting to usage-based pricing

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

Big Tech Inc.

To kick off our Big Tech conversation today, our own Ryan Lawler covered Blend’s expansion from the mortgage market into a broader fintech suite. Take a peek.

The U.K. rattles its scepter at social media companies that earn its ire: A few things. First, the U.K. has a “recently appointed secretary of state for digital” named Nadine Dorries, it turns out. And second, it appears that she is not messing around. TechCrunch reports that she “wants to take a tougher line on social media platforms than her predecessor,” which could include “criminal sanctions for breaches of incoming [domestic] online safety legislation.”
And in other Facebook news, the Meta company is working on personalization features for its Groups product.
Nikola sets aside war chest for future settlements: Embattled EV company Nikola is expecting bad news, it appears, setting aside an eighth of a billion dollars for settling with the American Securities and Exchange Commission (SEC). That’s a lot of coin for a company that needs lots of change to get its trucks rolling.
And to close us out, IBM’s infrastructure services work has spun out into a separate company called Kyndryl — which I presume is the name of Beedrill’s lost forefather — which is doing huge revenues per our own Ron Miller. Per our reporting, Kyndryl “sees itself as a consulting arm for legacy companies to help them make the transition to more modern ways of doing business,” which seems fair enough.

TechCrunch Experts

Image Credits: SEAN GLADWELL / Getty Images

Are you a marketer that’s interested in being included in an upcoming TechCrunch+ article targeted at readers who run early-stage startups (most of which are still at the pre-revenue stage)?

If so, send your answer to the question “If you only had a $25,000 marketing budget for Q1 2022, how would you spend it?” to miranda.techcrunch@gmail.com. Responses should be between 250-500 words and may be edited for length and clarity.

November 4, 2021

Rational regulation is key to US competitiveness in the fintech race

Anja Manuel Contributor

Anja Manuel is the co-founder of Rice, Hadley, Gates & Manuel LLC (RHGM), a strategic consulting firm, and the director of the Aspen Security Forum. She previously served as an American diplomat and is a board member of Ripple, a premier blockchain payments company.

Kevin Bassney Contributor

Kevin Bassney is a director at Rice, Hadley, Gates & Manuel LLC (RHGM) and previously worked as a portfolio manager at Morgan Stanley and was an Army officer. He was a Schwarzman Scholar at Tsinghua University in Beijing.

While Tesla invested $1.5 billion in bitcoin, Gary Gensler, the chairman of the U.S. Securities and Exchange Commission, called the cryptocurrency space the “Wild West.” Meanwhile, in China, the government created its own digital currency while abruptly canceling the IPO of its most well-known fintech firm, AliPay, for regulatory reasons. It’s enough to give the casual observer whiplash. What is happening here?

With all the focus on the great technology race between the U.S. and China, little attention has been paid to an area with enormous implications: Who will lead the innovation and, therefore, control the technology behind international payments systems?

This race matters for two reasons.

First, Western countries’ leadership in international payments allows them to enforce sanctions against bad actors like Iran and North Korea. If Chinese solutions gain the dominant foothold in the developing world, this will become much harder.

Second, if the West leads in fintech, it can set reasonable world standards for this new field, such as protecting the environment, preventing illicit cross-border transactions and safeguarding consumer privacy. Reasonable and clear regulation is exactly what responsible U.S. companies — who don’t want to operate in a “Wild West” environment — have been asking for but not receiving.

In the meantime, China has taken the global lead in mobile payments, both in sophistication and scale. Ant Financial, AliPay, WeChat Pay and others comprise the world’s most advanced mobile payments market. For example, Alipay has over 1.3 billion users and more customers outside of China than all of PayPal’s user base. In aggregate, the $45 trillion in mobile transactions volume that Chinese merchants process annually is twice as large as what MasterCard, Visa and PayPal process each year combined.

In addition to these Chinese private sector innovations, the Chinese government has also developed the world’s most advanced central bank digital coin and has completed over 70 million transactions — totaling over $5 billion in revenue — since it was launched earlier this year. The digital yuan is a centralized currency supported by the full faith and credit of the Chinese government, versus traditional cryptocurrency, which is speculative. While the stated goal of the digital yuan is financial inclusion to help those Chinese without bank accounts, the currency’s centralized nature allows the Chinese government to monitor every transaction and restrict access if the Chinese citizen has a low score on the country’s social credit system.

If these Chinese leapfrog technologies gain an international following, they could make it very difficult for the West to enforce sanctions on bad actors, as former Treasury official Justin Muzinich and others have pointed out. Currently, the United States and its allies enforce international sanctions on Iran and North Korea, for example, by preventing Western companies from doing business there and halting banks from facilitating payments to these countries through the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system and correspondent banking relationships.

Responsible fintech companies in the U.S. (including those that service crypto), also fully comply with “know your customer” and anti-sanction regulations. Due to the size and scope of the American financial system, this has been an effective deterrent to illicit behavior.

With the advance of the digital yuan and Chinese payments platforms, companies wouldn’t need U.S. or other Western banks to facilitate these payments and so sanctions would become very difficult to enforce and illegal payments by terrorists and criminals easy to hide. A combination of AliPay, other advanced payments platforms and the Chinese digital yuan could begin to circumvent this system. Sigal Mandelker and others have pointed out that due to the onerous regulations Western governments have asked banks to follow to create “correspondent banking relationships,” 75% of big U.S. and European banks are reducing the number of these relationships. This erodes America’s ability to influence international banks and crack down on illegal behavior.

Beyond sanctions, Western governments have other reasons to shape the rules of the new digital financial system. Current banking practices have many safeguards in place to protect against abuse. The West can only set similar standards for these technologies if we are in the lead. For example, the West will want to prevent criminals and terrorists from transferring money anonymously through cryptocurrencies like Bitcoin and others. Western governments should also set up safeguards that protect small-time investors from getting scammed, such as what happened when the Ethereum network fueled the initial coin offering trend in 2017-2018.

Finally, environmental regulations are needed. Digital currencies based on “proof of work (PoW),” such as Bitcoin, use an enormous amount of computing power which requires electricity and thus, creates massive carbon emissions. Mining Bitcoin, for example, which still uses the PoW model, uses about as much electricity per year as the entire country of Norway. In fact, multiple reports have explained that Tesla’s purchase of $1.5 billion in bitcoin may have erased a significant portion of the carbon emissions gained from that year’s sales of electric vehicles.

These issues must be considered thoughtfully. But speed is of the essence. China understands the power in being the leading mover in key technologies and actively seeks to create world standards. For example, China has already contributed digital currency ideas to create global standards that would govern how data is transferred between financial institutions, such as for payments, credit cards and securities trading.

Unfortunately, the U.S. is falling behind since its own regulation of this space is a mess. An alphabet soup of regulatory agencies such as the CFTC, SEC and others have struggled to wrap their heads around regulating blockchain, cryptocurrencies and other fintech innovations.

The SEC has sued, or threatened to sue, two of the most responsible and innovative companies in the space — Coinbase and Ripple (on whose board one of us serves) — which along with some other responsible actors, have been asking for reasonable regulation for years. At the same time, the SEC seemingly, but not explicitly, gave the all-clear to Bitcoin and Ethereum in spite of the problems outlined earlier. Many other fintech companies in the international payments space and blockchain/cryptocurrencies are in “regulatory purgatory,” not knowing when or how the axe will fall.

Let’s be clear: The “Wild West” Gensler was referring to is not in anyone’s interest. Fintech, especially international payments enabled through blockchain, can be enormously positive. They make remittance payments much faster, cheaper, and more accurate; help the 1.7 billion in the world who are unbanked obtain greater access to finance; and have myriad other benefits. However, an alphabet soup of conflicting regulators and ill-defined arbitrary rules only benefit those who would like to supplant the American financial system. By coordinating across agencies and setting a few clear, reasonable rules, the federal government can enable the next generation of fintech entrepreneurs and keep the U.S. in the lead in this critical area.

November 3, 2021

Daily Crunch: DoorDash releases in-app toolkit to promote driver safety

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello and welcome to Daily Crunch for November 3, 2021. What a day! Despite the U.S. Federal Reserve announcing a slowdown to its bond-buying program, stocks went up again. It’s heads-you-win, tails-you’re-still-in stock market lately. Economy not good enough for tightening? Stocks go up on a comfortable central-banking environment. Economy good enough for tightening? Stocks go up on good economic news. Sure. I suppose it’s good news for startups looking to exit. — Alex

The TechCrunch Top 3

Female founders see better fundraising numbers in 2021: After a disappointing 2020, startups founded by women are having a much better run this year, data says. TechCrunch dug into the latest information, uncovering the bad, the good and the encouraging.
Everyone is going public: Alrighty, let’s talk public offerings. Paytm just raised a pre-IPO round worth $1.1 billion ahead of the Indian fintech’s inevitable public-market debut. AllBirds priced its IPO-above range and was met with a rave first day’s trading. And in Korea, Kakao had a similarly bracing first day’s trading. (And don’t forget that Backblaze and Expensify are also en route to their IPOs as well.)
Meet GitHub’s new CEO: As GitHub CEO Nat Friedman heads for the exits to the “Chairman Emeritus” role, the code-management service’s chief product officer Thomas Dohmke will take over as its new chief executive later this month. The changes at GitHub come in the wake of competitor GitLab’s epic IPO.

Startups/VC

The Gopuff model goes international: As TechCrunch notes, rapid, on-demand delivery is big business around the world today, and Breadfast wants to own the model in Egypt and across Africa. The company started life as a bread delivery firm but has since branched out. And it just raised $26 million.
U.S. bans NSO Group: Software made by NSO group has been used by authoritarian governments to snoop on journalists, dissidents and other folks that the powerful do not like. The U.S. Commerce Department just added NSO to its Entity List, shuttering trade with the firm in the States. Progress.
Australia says facial recognition startup broke its laws: Also from the security beat is news from Down Under, namely that Clearview AI “broke national privacy laws when it covertly collected citizens’ facial biometrics and incorporated them into its AI-powered identity matching service.” Canada has come to a similar conclusion.
Radar or lidar? A new funding round for Spartan Radar — coming in rapid succession after a preceding investment — indicates that the market has yet to determine which tech will lead the way for self-driving cars.
Ethyca wants to help developers write privacy-forward software: Fresh with new funds, Ethyca is making its Fides set of tooling open source so that “developers can build privacy tools and monitoring mechanisms directly into their codebases.” In the wake of the above privacy news, it feels like a pretty good day for consumers. At least directionally, I suppose.
Yet more money for e-commerce rollups: The push to consolidate e-commerce brands is a global affair. We’ve heard about lots of the activity — and resulting mega-rounds — in both North America and Europe. Now Una Brands has raised even more capital for its APAC-focused work of a similar nature.
Payhippo raises $3M for small-biz lending in Africa: A few quick notes here. First, African fintech has been on a fundraising tear lately, so we’re not surprised to see more activity from the sector. Second, Payhippo’s model is focused on SMB lending, which we dig. And, third, Payhippo is a great startup name.
To round out our startup coverage today, an essay from Victoria Pettibone, a managing partner at Astia Fund, arguing that “VCs must do a better job of supporting Black women founders.”

Female founders are making a buzzing, venture-backed comeback

We are nowhere near achieving parity or representation when it comes to startup funding, but the gender gap is narrowing, according to PitchBook data.

Funding for U.S.-based, female-founded startups nearly doubled in the last year: So far in 2021, women-led companies have closed 2,661 deals worth $40.4 billion.

“Thus far in 2021, the backsliding has more than stopped,” report Natasha Mascarenhas and Alex Wilhelm. “Indeed, it has shot the other direction.”

Female founders are making a buzzing, venture-backed comeback

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

Big Tech Inc.

Before we dive into general Big Tech news, please enjoy this dive into the biggest of technology news, namely growth in the cloud. You know, that remote data center where all your software actually runs.

Social media disinformation is more than a Facebook affair: After some damning revelations about Kenya’s president Uhuru Kenyatta, Twitter was flooded with messages of … support. Astroturfing is not a new concept, but when laid as clear as it is in this case, it’s extra gross.
Instagram hearts Twitter: After a long period of time in which Instagram accounts merely posted images of tweets, the Meta property – The Facebook protectorate? The Zuck protectorate? – is bringing back Twitter Card previews. Rejoice, all ye who still use the one-time photo sharing application.
Cash App for teens: Kids have it good these days. I had a checkbook in my youth. And after that mostly had to carry cash. Today Square is rolling out support for teens to use Cash App, provided they have parents to watch over their activity.
To round out our coverage of big technology firms, news from DoorDash: The U.S. delivery giant has built something it calls “SafeDash,” a security toolkit for its delivery denizens. It’s a partnership with ADP that may help keep DoorDashers safer than they are on their own.

TechCrunch Experts

Image Credits: SEAN GLADWELL / Getty Images

TechCrunch wants to help startups find the right expert for their needs. To do this, we’re building a shortlist of the top growth marketers. We’ve received great recommendations for growth marketers in the startup industry since we launched our survey.

We’re excited to read more responses as they come in! Fill out the survey here.