Public cloud security startup Laminar emerges from stealth with $37M

The cloud may be the direction that much of enterprise IT is moving today, but it still remains a major source of security issues, with some 98% of all enterprises in a recent survey reporting that they have contended with a cloud-related security breach in the last 18 months.

Today, a startup called Laminar is coming out of stealth with $37 million in funding with a solution to address how that issue plays out in public cloud architecture, specifically with ‘agent-less’ technology it claims can monitor for data leakages, and fix them, faster than other approaches to cloud security on the market.

The funding is being disclosed for the first time now to coincide with the company’s launch, but it actually comes in two tranches: a $32 million Series A led by Insight Partners with SentinelOne, TLV Partners and Meron Capital participating, and a $5 million seed round.

SentinelOne, a specialist in endpoint security, is the obvious strategic investor in that list, but Insight has been a strategic partner of sorts for Tel Aviv-based Laminar, too. That’s because the startup has been leaning on Insight Ignite, a division of the VC that pairs portfolio companies with potential customers to grow their business. Laminar says that its tech has been tested by “hundreds” of CISOs through the program, with a portion of those progressing into becoming actual customers when the service commercially launches in 2022.

It’s always notable when a company that has yet to publicly roll out a product, much less sign up a customer, manages to raise a substantial round of funding. The reason is often that the founders in themselves are impressive enough to merit the bet, and that is the case with Laminar, too.

Co-founders Amit Shaked (CEO) and Oran Avraham (CTO) are both veterans of Unit 8200, the famous Israeli military intelligence service that has been the breeding ground for so many other entrepreneurs in the country. Friends from childhood, Avrhaham led a team that was a four-time winner of Google’s Capture the Flag online security competition, and when he was just 17, he identified the first iPhone 3G baseband vulnerability. Shaked worked for some time at Magic Leap. At the time of writing, they are still both under 30.

There are a number of tech companies that have identified the shortcomings of cloud services when it comes to cybersecurity, making for a variety of approaches to solving that problem.

In the realm of public cloud services, others providing solutions include the likes of Netskope (which earlier this year was valued at $7.5 billion, speaking to the business opportunity here); Microsoft (which most recently beefed up its cloud-based cybersecurity profile with the acquisition of CloudKnox earlier this year); vArmour (which is approaching an IPO); and many, many more.

Laminar’s belief is that it has built technology that is faster and easier to use, and is more geared to the realities of how cloud services are designed: apps and services are built and run across multiple public clouds (in Laminar’s case it’s main activity today is centered around Azure, Google Cloud and AWS, Avraham told me).

Laminar’s approach, Shaked said, is different for another reason, too: it is built around the idea of being proactive rather than reactive. “It’s more about preventing data from leaking rather than assuming something happened or already went wrong,” he said. Typically large enterprises are operating on hybrid cloud systems, using three or four providers across multiple geographics, “and that makes it more complex.”

Its technology is “agentless” and asynchronous to put less strain on network operations and data flow, which the company says contrasts with much of how existing cloud security is built using either agents on end points or proxies that filter (and slow down) traffic.

The system, as Shaked described it, starts by building a picture of a company’s managed and unmanaged data landscape (that is, both data used actively in services, and data produced through those services but then simply placed in “shadow” datastores). This is then used as a basis for a mass-scale monitoring operation around how the network is behaving: systems are set up for “sanctioned” data movements, and so when data changes or moves for any other reason, it gets flagged, stopped, and fixed.

Emmet Keeffe, an operating partner at Insight who founded Insight Ignite, said the VC was interested in what Laminar had built was because it fit well with how it saw the market evolving and a gap that was emerging.

Previously, he said, enterprises were just paying lip service to the concept of digital transformation. “It was just the theatre of digital in 2018,” he said. “Most of what was happening was not real digital change. That all changed in March 2020” — when Covid-19 hit — “when we saw a massive unlocking of digital. Then, the first thing that needed to be rethought was cybersecurity.” In essence, “fully unlocking the cloud,” as Keeffe described it, has essentially led to unlocking too much data, too. “We came to Laminar because this really needed to be solved, market-timing wise.”

It’s very notable that SentinelOne, a specialist in endpoint security, is investing here, too: it makes one wonder if the company might potentially be exploring how it might augment the work it already provides with a cloud-native approach as well, and how it might use Laminar as a partner (or more?) down the line to do so.

“Data and APIs are mission critical in the functioning of today’s digital society,” said Tomer Weingarten, CEO, SentinelOne, in a statement. “Securing data wherever it resides is the foundation of our Singularity XDR platform — we see Laminar’s approach as complementary in helping our customers secure data in a cloud-first world.”

Canada’s Telus says partner Huawei is ‘reliable’: reports

The US-China tension over Huawei is leaving telecommunications companies around the world at a crossroad, but one spoke out last week. Telus, one of Canada’s largest phone companies showed support for its Chinese partner despite a global backlash against Huawei over cybersecurity threats.

“Clearly, Huawei remains a viable and reliable participant in the Canadian telecommunications space, bolstered by globally leading innovation, comprehensive security measures, and new software upgrades,” said an internal memo signed by a Telus executive that The Globe and Mail obtained.

The Vancouver-based firm is among a handful of Canadian companies that could potentially leverage the Shenzhen-based company to build out 5G systems, the technology that speeds up not just mobile connection but more crucially powers emerging fields like low-latency autonomous driving and 8K video streaming. TechCrunch has contacted Telus for comments and will update the article when more information becomes available.

The United States has long worried that China’s telecom equipment makers could be beholden to Beijing and thus pose espionage risks. As fears heighten, President Donald Trump is reportedly mulling a boycott of Huawei and ZTE this year, according to Reuters. The Wall Street Journal reported last week that US federal prosecutors may bring criminal charges against Huawei for stealing trade secrets.

Australia and New Zealand have both blocked local providers from using Huawei components. The United Kingdom has not officially banned Huawei but its authorities have come under pressure to take sides soon.

Canada, which is part of the Five Eyes intelligence-sharing network alongside Australia, New Zealand, the UK and the US, is still conducting a security review ahead of its 5G rollout but has been urged by neighboring US to steer clear of Huawei in building the next-gen tech.

China has hit back at spy claims against its tech crown jewel over the past months. Last week, its ambassador to Canada Lu Shaye warned that blocking the world’s largest telecom equipment maker may yield repercussions.

“I always have concerns that Canada may make the same decision as the US, Australia and New Zealand did. And I believe such decisions are not fair because their accusations are groundless,” Lu said at a press conference. “As for the consequences of banning Huawei from 5G network, I am not sure yet what kind of consequences will be, but I surely believe there will be consequences.”

Last week also saw Huawei chief executive officer Ren Zhengfei appear in a rare interview with international media. At the roundtable, he denied security charges against the firm he founded in 1987 and cautioned the exclusion of Chinese firms may delay plans in the US to deliver ultra-high-speed networks to rural populations — including to the rich.

“If Huawei is not involved in this, these districts may have to pay very high prices in order to enjoy that level of experience,” argued Ren. “Those countries may voluntarily approach Huawei and ask Huawei to sell them 5G products rather than banning Huawei from selling 5G systems.”

The Huawei controversy comes as the US and China are locked in a trade war that’s sending reverberations across countries that rely on the US for security protection and China for investment and increasingly skilled — not just cheap — labor.

Canada got caught between the feuding giants after it arrested Huawei’s chief financial officer Meng Wanzhou, who’s also Ren’s daughter, at the request of US authorities. The White House is now facing a deadline at the end of January to extradite Meng. Meanwhile, Canadian Prime Minister Justin Trudeau and Trump are urging Beijing to release two Canadian citizens who Beijing detained following Meng’s arrest.

Europe updates its predatory pricing investigation against Qualcomm over UMTS baseband chips

On the heels of Google getting served a $5 billion fine by the EU over monopolistic practices related to its Android operating system, the European Commission today resurfaced another ongoing case in the world of large U.S. tech companies. The EC said that it has added to its investigation into Qualcomm and its predatory pricing of UMTS baseband chips. Specifically, today the Commission has sent more details relating to elements of the “price cost” test that it had applied to measure just how much below cost Qualcomm was selling UMTS baseband chips to edge out competitors.

If the case is decided against Qualcomm, the company could face an additional fine of up to 10 percent of its worldwide revenues. In 2009, these were $10.4 billion, while in 2017, global turnover was over $22 billion.

The original, 2015 case was based on a complaint filed by Icera — once a big player in baseband chips — and dates back to practices between 2009 and 2011 and alleged that Qualcomm used its market position to negotiate artificially low prices for UMTS chips — used in 3G phones — in order to oust out Icera. Others that made similar chips include Nvidia.

Qualcomm has wasted little time in responding to the notice posted by the EC.

“This investigation, now in its ninth year, alleges harm in 2009-2011, to a competitor who chose years later to exit the market for reasons unrelated to Qualcomm,” said Don Rosenberg, general counsel and executive vice president of Qualcomm in a statement. “While the investigation has been narrowed, we are disappointed to see it continues and will immediately begin preparing our response to this supplementary statement of objections. We belief that once the Commission has reviewed our response it will find that Qualcomm’s practices are pro-competitive and fully consistent with European competition rules.”

Qualcomm is already in the middle of appealing a $1.23 billion fine in the EU over LTE chip dominance in the iPhone, related to deals that were made with Apple at the expense of another big rival of Qualcomm’s, Intel. (Never mind that Apple and Qualcomm are also in the middle of a patent dispute.)

This older case, as Qualcomm points out, has been narrowed since it was first announced almost exactly three years ago. And while we don’t know what the exact details of the supplementary objections are and whether they have expanded them again (we have contacted the EC to try to find out), the Commission also notes in its short statement — printed in full below — that sending an update to its calculations doesn’t necessarily imply the outcome of this case.

Statement below.

The European Commission has sent a Supplementary Statement of Objections to Qualcomm Inc. This is a procedural step in the Commission’s ongoing investigation under EU antitrust rules looking into whether Qualcomm engaged in ‘predatory pricing’. The Commission sent a Statement of Objections to Qualcomm in December 2015 detailing its concerns. In particular, the Commission’s preliminary view is that between 2009 and 2011 Qualcomm sold certain UMTS baseband chipsets at prices below cost, with the intention of eliminating Icera, its main competitor in the leading edge segment of the market at that time. UMTS chipsets are key components of mobile devices. They enable both voice and data transmission in third generation (3G) cellular communication. The Supplementary Statement of Objections sent today focuses on certain elements of the “price-cost” test applied by the Commission to assess the extent to which UMTS baseband chipsets were sold by Qualcomm at prices below cost. The sending of a Supplementary Statement of Objections does not prejudge the outcome of the investigation. More information is available on the Commission’s competition website, in the public case register under the case number AT.39711.

HTC is gone

Gather around, campers, and hear a tale as old as time.

Remember the HTC Dream? The Evo 4G? The Google Nexus One? What about the Touch Diamond? All amazing devices. The HTC of 2018 is not the HTC that made these industry-leading devices. That company is gone.

It seems HTC is getting ready to lay off nearly a quarter of its workforce by cutting 1,500 jobs in its manufacturing unit in Taiwan. After the cuts, HTC’s employee count will be less than 5,000 people worldwide. Five years ago, in 2013, HTC employed 19,000 people.

HTC started as a white label device maker giving carriers an option to sell devices branded with their name. The company also had a line of HTC-branded connected PDAs that competed in the nascent smartphone market. BlackBerry, or Research in Motion as it was called until 2013, ruled this phone segment, but starting around 2007 HTC began making inroads thanks to innovated touch devices that ran Windows Mobile 6.0.

In 2008 HTC introduced the Touch line with the Touch Diamond, Touch Pro, Touch 3G and Touch HD. These were stunning devices for the time. They were fast, loaded with big, user swappable batteries and microSD card slots. The Touch Pro even had a front-facing camera for video calls.

HTC overplayed a custom skin onto of Windows Mobile making it a bit more palatable for the general user. At that time, Windows Mobile was competing with BlackBerry’s operating system and Nokia’s Symbian. None were fantastic, but Windows Mobile was by far the most daunting for new users. HTC did the best thing it could do and developed a smart skin that gave the phone a lot of features that would still be considered modern.

In 2009 HTC released the first Android device with Google. Called the HTC Dream or G1, the device was far from perfect. But the same could be said about the iPhone. This first Android phone set the stage for future wins from HTC, too. The company quickly followed up with the Hero, Droid Incredible, Evo 4G and, in 2010, the amazing Google Nexus One.

After the G1, HTC started skinning Android in the same fashion as it did Windows Mobile. It cannot be overstated how important this was for the adoption of Android. HTC’s user interface made Android usable and attractive. HTC helped make Android a serious competitor to Apple’s iOS.

In 2010 and 2011, Google turned to Samsung to make the second and third flagship Nexus phones. It was around this time Samsung started cranking out Android phones, and HTC couldn’t keep up. That’s not to say HTC didn’t make a go for it. The company kept releasing top-tier phones: the One X in 2012, the One Max in 2013, and the One (M8) in 2014. But it didn’t matter. Samsung had taken up the Android standard and was charging forward, leaving HTC, Sony, and LG to pick from the scraps.

At the end of 2010, HTC was the leading smartphone vendor in the United States. In 2014 it trailed Apple, Samsung, and LG with around a 6% market share in the US. In 2017 HTC captured 2.3% of smartphone subscribers and now in 2018, some reports peg HTC with less than a half percent of the smartphone market.

Google purchased a large chunk of HTC’s smartphone design talent in 2017 for $1.1 billion. The deal transferred more than 2,000 employees under Google’s tutelage. They will likely be charged with working on Google’s line of Pixel devices. It’s a smart move. This HTC team was responsible for releasing amazing devices that no one bought. But that’s not entirely their fault. Outside forces are to blame. HTC never stopped making top-tier devices.

The HTC of today is primarily focused on the Vive product line. And that’s a smart play. The HTC Vive is one of the best virtual reality platforms available. But HTC has been here before. Hopefully, it learned something from its mistakes in smartphones.

How to understand the financial levers in your business

How can an electric scooter ride-sharing company like Bird possibly make money?

If you live in a select number of cities in the U.S., it’s hard not to see electric scooters appearing on sidewalks all over the place. Electric scooter ride-sharing services are also remarkably cheap: $1 to start a ride and another $0.15 per minute after that. But electric scooters aren’t cheap, and the logistics of a shared network are off-the-charts complicated.

As someone working in venture capital for hardware startups, the above question is obviously rather prescient.

How does a company like this possibly make money?

Here’s a closer look at the basic unit economics of Bird, the electric scooter ride-sharing company based in Santa Monica, Calif. There’ll be a super simple model and test scenarios that show how critical it is to understand and manipulate the key levers of any startup  —  in fact, it can determine whether a business sinks or swims.

Building a Scooter

Two young people in love, gazing adoringly at a pair of electric kick-scooters. Because that’s totally a normal thing to be doing. 

It looks like Bird is using the Mi Electric Scooter as the base of their platform. The Mi’s recommended retail price is $499, but it’s probably fair to assume that Bird gets a bulk discount and can buy the scooters at around $300 apiece.

On top of the base cost of the scooters, Bird needs modules to turn the scooters into sharing economy units. That doesn’t have to cost a lot of money. A Particle 3G asset tracker in a box, plus some custom code to deal with the scooter’s power management, is all that’s needed, so let’s call that $80 per unit. That takes the total cost per finished scooter to $380; plus, we’ll toss in $20 for final assembly.

My back-of-the-envelope calculation puts Bird’s road-ready scooter at $400 per unit.

Deploying a scooter

Scooter startup Scoot operates electric scooters that are more like motorcycles than electrified Razer kick-scooters. 

One of the biggest problems electric scooter companies must solve is distributed charging. Scoot solved this problem by building a massive network of charging stations, distributed around San Francisco — a big infrastructure push, but necessary, given the robust profile of the scooters. Unlike Scoot’s wheels, which need to be returned to a charging station for charging, Bird scooters can be easily picked up and taken inside a user’s apartment or office, creating an instant and nearly infinite distributed charging network called “available wall sockets.”

This completely changes the charging game in Bird’s favor, so much so that Bird offers people $5 per charged scooter. This creates an elegant user experience and is a sign that it’s a key lever in their financial model.

A tale of two financial models

A lot of assumptions go into building a financial model. This one came together over a few beers on the weekend and is an example of the kind of “quick and dirty” math all founders should do as they pressure test ideas. You can follow along in this spreadsheet, and if you want to experiment with the numbers, you can duplicate the sheet and plug in your own numbers.

For both models, we’ll assume the following:

We’ll be playing with the average lifetime of a scooter, the average number of rides customers take per day, and some metrics around charging, to see how that effects gross margin.

Model 1: Uh-oh, this looks like trouble.

For the first model, let’s look at these dynamics:

  • Average lifetime rides per scooter — 300
  • Average rides per scooter per day — 5
  • Average ride length — 20 minutes
  • Percent of consumer charges: 50%

If those assumptions are right, it takes 220 rides (or 44 days) to reach break-even on the scooter itself.

After 400 rides (when a scooter is written off), the company has generated $147 of profit, at a relatively meagre 10.3% profit margin.

Suffice to say: That doesn’t look like a particularly sustainable business.

Model 2: A more optimistic outlook

However, you don’t have to change the assumptions much for it to be a much more attractive business.

What if Bird was able to extend the life of a given scooter, decrease the average ride length but increase the average rides per day, and push more of the charging burden to consumers?

Let’s look at these dynamics:

  • Average lifetime rides per scooter — 500
  • Average rides per scooter per day — 7
  • Average ride length — 20 minutes
  • Percent of customer charges — 75%
A very different story. Note here that Bird did not reduce the hard costs of charging a scooter (it’s still $5 for a consumer to charge and $20 for Bird to charge), but they did find a way to encourage customers to charge for them, reducing the overall charging cost.

Changing these four variables means that it only takes 165 rides (24 days) to break even, and the lifetime profit of a scooter is $813 — or a gross margin of 41%.

Financial models 1 and 2 side by side, for ease of comparing. 

So, do these unit economics make sense?

Investors certainly seem to think so. In February, Bird raised a $15m Series A, and only a month later, the company raised a $100m Series B. A company like Bird would be struggling to raise money on a 10.3% profit margin (as in Model 1), but if the numbers under the hood are closer to Model 2, it’s easy to understand how Bird starts to look like a rather attractive business.

Isolate variables to find your levers

In the case of Bird, you might be surprised to learn that three levers dramatically affect the finance model: average ride length, cost of charging, and usable life per scooter. Isolate variables and play with the numbers to figure out which ones are key levers.

Taking Model 2 above as a starting point, let’s explore by manipulating one set of variables at the time:

Ride length

Ride length has some impact on gross margin, but not as much as you’d think.

Usable life / Longevity

The durability of the scooters has quite a bit of impact, especially if the scooters fail early.

Cost of charging

The cost to charge a scooter has a huge impact on margins, so perhaps that’s a good place to focus.

Pulling the levers: SuperScooters

Once you know your levers, it’s fun to pull them a bit. If we were to optimize Bird to be as profitable as possible, it might be tempting to try to influence people to ride longer. But how? People’s commutes are probably relatively fixed, and you’re unlikely to be able to get them to change their commuting route. As we saw in an earlier example, though, the cost of charging has a huge impact on the overall business. What if we could find a better way to solve that?

Model 3 — SuperScooters

Say there was a different scooter available on the market— a SuperScooter —  with a swappable battery pack that clocks in at a hefty $1,000 MSRP.

The scooter has a higher up-front cost, but it’s more robust. Instead of a 500-ride lifespan, it has a 1,000-ride lifespan. The replaceable battery pack enables the Bird Service Crew to quickly replace scooter batteries out of charging racks in the back of the vans they’re already driving around town to redistribute scooters.

Let’s say that reduces Bird’s “recharging” cost to $3 per scooter per day, even cheaper than the consumer charge in Models 1 and 2, totally eliminating the need for consumers to charge the scooters at all.

In addition, let’s say Bird invents their own asset tracker that they can build for $30 per unit, rather than $80 off the shelf, and their manufacturer agrees to install it at the factory, taking the $20 in-house final assembly cost to zero.

By implementing the changes above, you end up with $2,467 profit per scooter, break-even at 34 days, and a gross margin of 62%. In other words: If such a scooter were available, it’d be a no-brainer: You’d want to replace the entire fleet as quickly as you could.

Comparing all three models shows that optimizing for longer scooter usable life and cheaper charging costs (Model 3) would have an extraordinary impact on the gross margin per scooter deployed. 

Build your model. Know your levers.

Obviously, I have grossly simplified the financial model here — if you were to model out the entire business of Bird, you would need to look at customer acquisition costs, customer lifetime value, churn, R&D costs of the elusive SuperScooter, and so on and so forth. Models get complicated quickly, but they also allow you to explore the impacts of changes you might make before you make them, which is invaluable.

Whatever your business, build a business model that includes all of your assumptions — and build the model so you can pressure-test variables and find your levers. Once you’ve identified them, build MVPs to test those assumptions in more detail. It’s really important to experiment early and get some good data on what works (and what doesn’t), before you start ramping up and pouring lots of money into marketing and execution. Some changes can have exponential effects — for better or for worse.

AT&T names Atlanta, Dallas and Waco first of 12 US cities to get 5G wireless

 AT&T wireless announced on Tuesday the first cities to get its 5G network. The carrier plans on installing 5G in twelve cities by the end of 2018 and on top of the list is Atlanta, Georgia, and Dallas and Waco, Texas. The remaining cities will be announced at a later date. Several carriers have been trialing 5G networks for sometime. AT&T says this rollout will be based on the 3GPP… Read More