The largest buys of tech’s Big Five: a look at M&A deals

In startup land, the mandate is to get bought, go public or die trying.

And, as far as getting bought goes, one of tech’s Big Five could be a desirable acquirer. They have a lot of weight to throw around. Alphabet (the parent company of Google), AmazonAppleFacebook and Microsoft account for a titanic amount of market value — close to $3.9 trillion at time of writing. At least, that’s according to Crunchbase News’s dashboard of notable tech stocks.

When challenged by one another, these hulking behemoths of the tech sector more often fight than flee. And when challenged by a scrappy upstart, it is likely that they will gobble up the talent, technology and business of any aspiring competitor. It’s the circle of life.

And it’s those acquisitions we’re going to look at here.

Taken together, tech’s Big Five account for a relatively small portion of the overall M&A market. The chart below shows the number of acquisitions made by members of tech’s Big Five from 2007 through 2017. (For reference, Crunchbase records thousands of acquisitions per year.)

But what the Big Five lack in quantity is made up for in size. If you’ll forgive the big-game pun, acquisitions by Big Five account for a lion’s share of big deals in dollar terms.

So, for each of the Big Five, let’s see just how big some of those deals got. We base our analysis on Crunchbase data that, whenever possible, has been cross-checked with public news sources and regulatory filings. We’ll proceed from the most valuable (in market capitalization terms) to the least.

Apple

Despite being the most valuable among the Big Five, Apple’s acquisitions are not just among the smallest of the bunch, but also the least disclosed. In other words, out of the deals listed in Crunchbase and elsewhere, most of them don’t have dollar values attached to them. This may speak to Apple’s secretiveness and its tendency to build most of its products and services in-house.

Apple’s biggest M&A deal to date was its $3 billion buyout of Beats Electronics, which is perhaps best known for its flashy wireless headphones. But it’s not the headphones that caught Apple’s eye. Rather, it was its streaming service, which Apple CEO Tim Cook told ReCode’s Peter Kafka was “the first subscription service that really got it right.”

Including the Beats deal, here are the largest M&A deals we were able to find.

Amazon

It’s hard to find a business vertical Amazon isn’t somehow involved in. Web hosting? Check. White-labeled staples like batteries and paper towels? Check. Doorbells? Check. They apparently sell books online, too.

Now, in all seriousness, Amazon’s $13.7 billion buyout of Whole Foods in June 2017 brought the online shopping giant squarely into the world of brick-and-mortar retail as well. And while the Whole Foods deal was Amazon’s biggest splurge to date, it’s certainly not alone in the company’s collection of commerce company buys. These include Amazon’s buyout of Quidsi (the parent company of Diapers.com and Soap.com, which was the first to offer the free two-day shipping for which Amazon Prime is famous), footwear and clothing retailer Zappos, and Middle Eastern e-commerce site Souq.com.

Alphabet

Of tech’s big five, Alphabet is the most acquisitive, and it makes the most corporate venture investments. It’s also the company with the most complicated corporate structure. Recall that Alphabet is the parent organization of Google, and it’s Google which has made the surpassing majority of Alphabet acquisitions.

But for all the resources Alphabet has put toward M&A, its acquisitiveness resulted in a rather mixed bag of results. Most glaring amongst its duds is its $3.2 billion buyout of Nest Labs and, relatedly, the $555 million spent on Dropcam (which would later be rebranded as part of Nest’s home security offering).

Nest reportedly failed to meet revenue expectations and seize a dominant position in the connected home market, ceding ground to incumbents like Honeywell. And there are plenty of scrappy upstarts nipping Nest’s heels in markets like home security, smart doorbells and smart locks.

This being said, then-Google’s YouTube deal is likely Alphabet’s best acquisition from an ROI perspective. Although Alphabet doesn’t break out YouTube’s revenue, some good estimates and public market comps suggest the video streaming unit could be worth a cool $100 billion.

Microsoft

Microsoft made news this week by announcing its acquisition of software version control and code hosting platform GitHub for $7.5 billion. And, at this point, it seems like Microsoft is timing announcements of its biggest deals just to dunk on Apple. Myke Hurley, a tech podcaster and the founder of Relay FM, observed on Twitter that Microsoft’s 2016 acquisition of LinkedIn and its GitHub deal were both announced on the opening day of Apple’s Worldwide Developers Conference.

Apart from cheeky timing, you will notice that Microsoft has made the largest M&A deals among tech’s Big Five.

Facebook

Of the Big Five companies in tech, Facebook’s M&A patterns seem to be the most binary. Its deals are either tiny or humongous. There isn’t much of a middle ground.

Some of Facebook’s biggest acquisitions present a case study of acquiring one’s way to nearly insurmountable market dominance. Although its acquisitions of Instagram and WhatsApp didn’t cause much of a stir at the time, today these deals are seen as a cautionary case for current and future antitrust regulators.

On a brighter note, though, Facebook’s M&A record is also a lesson in the “buy versus build” dilemma many companies face. It’s sometimes more expedient to buy a company (and, critically, its engineering team) than to build new features from scratch. For many of the smaller deals listed here, we can see that Facebook opted to buy.

The Big Five’s acquisitions in perspective

At the very top of the tech food chain, the Big Five are in a unique position, and not just as rainmakers for VCs seeking liquidity.

Alphabet, Amazon, Apple, Facebook and Microsoft are some of the most powerful companies operating today, and their acquisitions tell part of the story of how they got to prominent positions in the first place.

Although some acquisitions appear to come out of the blue, it’s important to remember that one doesn’t just buy a company for the heck of it. There’s a strategic motivation for these deals at the time they’re made. And when these deals are struck, they can telegraph the company’s future plans.

Hans Vestberg to take over as Verizon’s CEO in August

Verizon today announced CEO Lowell McAdam is stepping down from his post as August 1, 2018, seven years to the day he took the spot. He will stay on as Executive Chairman of the Board through the end of 2018 and as Non-Executive Chairman thereafter.

Hans Vestberg, Chief Technology Officer of Verizon as well as Executive Vice President and President of Global Networks (that’s a long title), will take over as the Chief Executive Officer of the telecom giant who also owns Oath and therefore TechCrunch.

McAdam has led Verizon as its CEO since August 2011 and became Chairman on January 2012. In addition to various mergers and acquisitions in the telecom industry, McAdam acquired AOL in 2015 and Yahoo in 2017 to form a digital media and advertising subsidiary.

Vestberg is relatively new at Verizon. He joined the company a year ago. He was previously the chief executive of Ericsson until he was ousted in July 2016 when he proved ineffective in turning the company around.

Vestberg spent most of his career working for Ericsson. From 1998 to the end of 2009, Vestberg has mostly been the Chief Financial Officer of various Ericsson divisions around the world. He was Ericsson’s CEO from 2010 to 2016. For many years, Ericsson was a key player when it comes to telecommunications infrastructure and equipment. But the company had to face competition from Huawei and other infrastructure companies which led to disappointing performances.

He’ll have a different task at Verizon. Verizon is currently riding high as one of the top telecom companies in the United States but is eager to find new growth opportunities while transitioning to 5G networks. The fact that the CTO is taking over as CEO proves that Verizon cares a lot about 5G. The technology is going to be key to gain a competitive advantage against other telecom companies.

In pre-market trading, Verizon shares (NYSE:VZ) are currently trading down 1.06 percent to $48.48 compared to yesterday’s closing price.

Lowell McAdam published the following message:

V Team,

I have something I’d like to share with you. I’ve been with our company and its predecessors for 35 years, and your Chairman and CEO for the past seven. Today, marks the beginning of an important series of events for Verizon. We are announcing that Hans Vestberg will succeed me as the Chief Executive Officer on August 1st. I will serve as Executive Chairman of the Board through the end of the year, and then continue as Chairman of the Board in a non-Executive capacity starting in 2019.

This is an exciting period for Verizon, and I believe there is no better time for this transition than now. It is my pleasure to hand the reins over to Hans. Hans is a recognized executive in the telecommunications and technology industries, and since joining Verizon in early 2017 he has demonstrated his ability to innovate and execute. I know that he has the right expertise, experience and business acumen to lead us forward and build on our strategy. Importantly, Hans is an inspiring leader, with high energy and a passion for delivering on the core values that truly make Verizon the world leader it is today.

When I look back at the milestones throughout my career, the one that stands out most is Verizon’s transformation into a world-class technology company. Today, Verizon is one of the world’s leading providers of communications, information and entertainment products and services to consumers, businesses and governmental agencies. Our goal has always been to improve lives through innovation. As I think about the power of 5G, I am convinced that this is a significant and pivotal time for Verizon and our entire industry – and now is the time to bring Verizon into its next chapter.

It has truly been a pleasure and a privilege to lead this great company. I am incredibly proud of what we have accomplished together. I look forward to continuing to play a part in its future as Executive Chairman of the Board, and I have tremendous confidence in where Verizon is headed with your support and Hans’s leadership.

Thank you for your dedication to Verizon. And never forget, there’s always a higher gear.

Sincerely,
Lowell

Bumble CEO Whitney Wolfe Herd is coming to Disrupt SF

Bumble founder and CEO Whitney Wolfe Herd has always done things her own way.

Whether it’s standing up for her political beliefs, building a company with fully outsourced engineers or avoiding the usual startup fundraising runaround, Wolfe Herd follows her own instincts in building a business. Which is why we’re super excited to announce that Whitney Wolfe Herd will join us at TC Disrupt SF 2018.

Wolfe Herd first came on the scene as a co-founder and VP of Marketing at Tinder, where she helped grow the dating app into one of the world’s biggest dating platforms. But after a lawsuit over sexual harassment and discrimination, which was settled out of court, Wolfe Herd left the company to build an app focused on compliments and positive affirmations.

Originally, she wanted nothing to do with the dating space. But after meeting Andrey Adreev, Badoo founder and Bumble’s majority stakeholder, she realized that giving women a voice in digital dating could be revolutionary. And so, Bumble was born in 2014.

The app has grown to 30 million users, and continues to grow in popularity based on a simple premise: women make the first move.

But Wolfe Herd’s ambitions don’t stop at dating. The 28-year-old founder has added new verticals to the app, letting users find friends and make professional connections via Bumble.

And all the while, Bumble’s cap table has never changed, with Wolfe Herd’s 20 percent stake as yet undiluted. Wolfe Herd was named one of Time 100’s most influential people this year, and has herself become a brand that represents authenticity and self-empowerment.

We can’t wait to talk to Wolfe Herd at Disrupt SF 2018. You can buy tickets to the show here.

Indonesia’s EV Hive raises $20M for its co-working business to rival WeWork

WeWork is setting its sights on Southeast Asia, but that isn’t stopping local rivals from building up there business. In Indonesia, EV Hive — a co-working brand first started by a VC firm — has pulled in $20 million for expansion as its U.S.-based rival increases its focus on Indonesia.

The company was founded in 2015, by seed-stage investment firm East Ventures and a few friends, and today it counts 21 locations across Indonesia with eight more in development right now. This Series A round was led by Softbank Ventures Korea with new investors H&CK Partners, Tigris Investment, Naver, LINE Ventures and STIC Investments taking part.

Added to those names, a range of existing backers also put into the round, including East Ventures, SMDV, Sinar Mas Land, Insignia Venture Partners, Intudo Ventures and angel investors Michael Widjaya and Chris Angkasa.

EV Hive CEO Carlson Lau told TechCrunch that the firm plans to add 20 more locations next year as it expands its focus from Jakarta and Medan to cover more of the country, which is the world’s fourth largest with a population of over 250 million people. Further down the line, it aims to reach 100 spaces by 2022 with moves into markets like Thailand and Vietnam. The company makes its mark with large spaces — typically over 7,000 square meters per location — and it sees vast untapped potential in Indonesia, where Lau said there are 10 cities with populations of two million or more.

Lau said the company is already fielding expansion requests from overseas but for now the focus is growing a presence in Indonesia. The startup is also looking to do more for its members, which number some 3,000 plus as of May.

Not unlike WeWork, it is building out a services play which includes a member-based marketplace that lets fellow members sell services to each other. Typically, Lau said, the focus is areas like accounting, branding and marketing but where there are gaps, EV Hive is stepping up to offer its own services, too. The goal there is to increase revenue and broaden the services on offer.

“A a lot of co-working spaces compete on the same plain, whether it is design or giving away freebies, but we feel we have strong execution,” Lau said. “We fill out at the fastest space and the lowest cost. The nearest competitor has four spaces and just one-tenth of our floor space.”

“We’re also in a good position with a lot of top VCs invested in us and we’ve built an ecosystem of different community partners,” he added.

Lau ruled out potential acquisition-led expansion — that’s a route WeWork took to enter Southeast Asia, and it has also done the same in China — but he did concede that the co-working market in the region is getting crowded, particularly as those who started out “thinking the business is cool” begin to realize it is tougher than it looks.

“There will be a wave of consolidation in the coming months,” the EV Hive CEO predicted.

Nvidia prices Jeston Xavier AI platform developer kit at $1,299

Today at Computex in Taipei, Nvidia CEO and founder Jensen Huang announced the availability of a drastically upgraded version of Issac. Nvidia calls the next-gen robotics system the next step in autonomous machines as it reportedly brings AI capabilities to a new set of industries.

The company has been talking about this platform some time, touting its capabilities and use cases. A Jetson Xavier SoC provides the processing with more than 9 billion transistors, it delivers over 30 TOPS (trillion operations per second). Inside the Xavier is a Volta Tensor Core GPU, an eight-core ARM64 CPU, dual NVDLA deep learning accelerators, an image processor, a vision processor and a video processor.

The platform developer kit will be available in August for $1,299 and includes the Isaac robotics software.

“AI is the most powerful technology force of our time,” said Huang in a released statement. “Its first phase will enable new levels of software automation that boost productivity in many industries. Next, AI, in combination with sensors and actuators, will be the brain of a new generation of autonomous machines. Someday, there will be billions of intelligent machines in manufacturing, home delivery, warehouse logistics and much more.”

The Isaac Robotics Software includes the Isaac SDK, a collection of APIs and tools to develop robotic algorithm software, the Isaac IMX, Nvidia-developed robotics software, and the Isaac Sim, a virtual simulation software to train autonomous machines.

The availability of the developer kit should mark a turning point of robotics development. It provides serious processing power and capabilities in a ready-made package.

Monetizing computing resources on the blockchain

A while back, a blockchain startup approached me with their pitch, a decentralized social media application in which users can earn money by simply doing what they already do on other platforms, such posting updates, photos and videos.

I would have been intrigued had they sent me the message a couple of years ago. But not so much after observing the space for more several years.

Several blockchain applications profess to enable users to monetize various resources, whether it’s their unused storage and CPU power, or the tons of data they generate every day.

Regardless of whether they will succeed to deliver on their promises or not, these projects highlight one of the problems that haunts the centralized internet. Users are seldom rewarded for the great value they bring to platforms such as Facebook, Google and Amazon .

Blockchain applications suggest that decentralized alternatives to current services will give users the chance to collect their fair share of the revenue they generate with their participation in online ecosystems. It’s an enticing proposition since it doesn’t require users to do much more than what they’re already doing: send emails, browse websites, watch ads, keep the computer on…

But what exactly do you earn from monetizing your resources on the internet, and how accessible and reliable are your earning? Here’s what you need to know.

What can you sell?

A handful of blockchain platforms enable you to rent your unused storage, idle CPU cycles, and internet bandwidth with those who are in need. The premise is simple: You list your resources along with your payment terms on the application and get paid in the proprietary crypto-token of the application when others use them. Purchases are arranged, performed and paid peer-to-peer through smart contracts, bits of code that run on blockchain without the need for a centralized application server.

Examples include Golem and iExec, two decentralized marketplaces for computing power. Users can earn the platforms’ proprietary cryptocurrencies, GNT and RLC tokens respectively, by renting their CPU cycles to developers and users who want to run applications on the network. Golem and iExec aim to replace centralized cloud providers such as Amazon and Google, in which the service provider sets the rates and rakes in all the profits.

Storj and Filecoin are two distributed storage networks where users can earn cryptotokens for sharing their free hard drive space with the network. Both platforms are designed to provide infrastructure for various applications such as web hosting and streaming services. Gladius, a decentralized content delivery network (CDN) and DDoS mitigation solution, enables users to monetize their internet bandwidth to serve content from websites and services running on the network.

These applications provide a good opportunity to turn the hours that your computer sits idly in the home or office into a side income.

Other blockchain platforms enable you to monetize your data. An example is Datum, a decentralized marketplace for user data. Datum enables users to earn DAT tokens by choosing to share it with other organizations. Other players in the domain include Streamr, a real-time data-sharing platform geared toward the Internet of Things (IoT). With Streamr, users can earn DATAcoin tokens by sharing the data their connected devices generate with other devices that need it to carry out their functions and companies that use them for analytics and research.

Data is a huge market that is currently dominated by a few big players such as Google and Facebook. These companies hoard user data in their walled-garden silos and use them to make huge profits. Blockchain platforms give users the choice and power to claim their share of that market by giving them back the ownership of their data.

Matchpool is a decentralized social network that enables users to monetize their groups and online communities. Matchpool provides the decentralized equivalent of Facebook groups and provides tools for administrators to earn GUP tokens by setting fees on membership and access to content. And there’s Brave, the blockchain-based browser developed by the former CEO of Mozilla. Brave removes ads from websites and instead gives users the choice to earn Basic Attention Tokens (BAT) by opting to view ads.

How much do you earn?

It’s difficult to measure earnings on blockchain applications because most of them either haven’t launched yet or are in their early stages. Few of the companies I reached out to could provide stable numbers or average figures.

Also, the value of the resource you share on these platforms is often subject to supply-and-demand dynamics. For instance, iExec leaves it to the users to determine the price of their computational resources and doesn’t take any cut from their earnings. If there’s a large demand for decentralized CPU power, you’ll earn more from participating in the network.

Storj, the decentralized storage network, had the most accurate information to share. The platform provides a formula to calculate the monthly earnings of “farmers,” the users who share their free storage space with the network. Storj charges $0.015 per gigabyte of data stored and $0.05 per gigabyte downloaded, 60 percent of which goes to the farmers.

Several factors affect the final earnings, including whether the farmer nodes store primary or mirror copies of data, how long they participate in the network, and how well they perform in terms of up-time, bandwidth and response times. “If someone stored 1TB of data for the entire month, and that entire TB of data was downloaded once that month, they could potentially make $39,” said Philip Hutchins, CTO at Storj Labs. But the current average monthly payment for a Storj farmer node is around $2, according to the network data the company shared.

Storj has also launched partnerships with FileZilla, Microsoft and other companies to build decentralized apps on top of its network, which could increase demand for Storj space.

On Datum, the decentralized data market, users earn between $0.50 and $5 in DAT tokens for each promotional email they opt to open, according to Roger Haenni, the company’s CEO, though he did not share the details of how earnings are calculated. Currently the network supports monetizing email inboxes, but in the future, the company plans to provide users with the option to get paid for sharing various categories of data, such as the location data their phone collects, apps, services and websites they use, data that their smart gadgets collect and others.

That last bit sounds a bit invasive on user privacy. “This [data] is currently widely tracked by cookies from various ad networks,” explains Haenni. “However, the user is not asked to explicitly opt in to share this data nor does he get paid when this data is monetized.” Datum will give the chance to claim the money that’s already being made from their data.

The Datum network currently has 80,000 users, and since the launch of the Datum App in late December, users have collected 1.5 million DAT tokens, amounting to around $75,000.

Gladius, the decentralized CDN, doles out $0.03 in GLA tokens per gigabyte of bandwidth of data streamed through a node (however, the company’s website states that this is an estimate based on favorable market conditions). An internet connection with a 30 mbps upload speed shared with the network for eight hours a day could earn its owner around $49 per month.

What are the costs and risks?

In most cases, you’ve already paid for the resources you’ll be sharing on the blockchain, whether it’s your hard drive space, your CPU or your bandwidth (unless you’re on a metered connection, in which case sharing it would be unwise). However, you’ll have to factor in electricity costs of keeping your computer on, which varied depending on the region you live in.

Social and data-sharing platforms won’t have any extra costs, but you’ll be responsible for keeping the balance between sharing your data and preserving your privacy.

One of the real risks of earning cryptotokens is the constant price fluctuations. The value of what you earn today could double overnight—or drop by half in the same manner. This means you’ll have to choose between holding your tokens or cashing out. 

And there are always the risks of scams and failed projects that will absorb users’ funds and resources only to disappear and leave them out in the cold.

“Resource-sharing projects on top of the blockchain that allow users to control and profit from their own data will be the most profitable and successful projects in the future,” says Jared Tate, blockchain expert and the founder of DigiByte. However, Tate also notes that many of the current resource sharing platforms are PR projects that will never scale. 

“The majority of projects out there won’t be around in 5 years. Most of the projects don’t even have working software, just a white paper and some fancy graphics on a website,” Tate says. Some users evaluate projects by examining the market cap alone, which Tate believes is the absolute worst way to gauge a projects long term viability. “So many market caps are artificially inflated by developer pre-mines or deceptive coin counts,” he warns.

 

How do you deal with the liquidity problem?

 Another challenge users will have to overcome is what to do with the tokens they earn from monetizing their resources. For instance, if you earn Storj tokens from renting your free hard disk space, the only thing you can do with your earnings is, well, rent storage from other users, which doesn’t make sense since you already had an excess of it to begin with. 

Some platforms have multi-faceted economies that enable users to use their earned tokens for various purposes. For instance, in Flixxo, a decentralized streaming service, users can earn FLIXX tokens by sharing their free disk space and bandwidth to host content on the network. They can then use their earned tokens to consume videos published on the platform. But that is still a limited use case and might not be the problem they want to solve with their earnings.

Digital currencies and tokens have a liquidity problem. There are very few retailers and online services that accept Bitcoin as a method of payment, and even fewer that accept other cryptocurrencies. Users often must find some online exchange which matches buyers and sellers of various digital and fiat currencies. The process is slow and complicated and involves fees at different levels. 

An alternative is Bancor, a decentralized liquidity network built on top of the Ethereum blockchain. Supported by its own token, BNT, Bancor enables users to convert between tokens supported on its network without the need to find a buyer or seller. So, for instance, if you’ve earned an amount of RLC tokens from renting your idle CPU time on iExec, you can instantly trade it on Bancor for, say, MANA, the token that will let you purchase VR experiences on Decentraland. 

Bancor already lists several dozen tokens on its network and plans to add more in the future.

“The aim of this mathematic liquidity solution is to allow the long tail of tokens to emerge, by allowing any user generated currency to be viable on day one without needing to achieve massive trade volume in order to be listed and thus become liquid,” says Galia Benartzi, the co-founder of Bancor. “Great tokens will still rise, bad ones will fail, but all will have a chance to try.”

Monetizing computing resources on the blockchain

A while back, a blockchain startup approached me with their pitch, a decentralized social media application in which users can earn money by simply doing what they already do on other platforms, such posting updates, photos and videos.

I would have been intrigued had they sent me the message a couple of years ago. But not so much after observing the space for more several years.

Several blockchain applications profess to enable users to monetize various resources, whether it’s their unused storage and CPU power, or the tons of data they generate every day.

Regardless of whether they will succeed to deliver on their promises or not, these projects highlight one of the problems that haunts the centralized internet. Users are seldom rewarded for the great value they bring to platforms such as Facebook, Google and Amazon .

Blockchain applications suggest that decentralized alternatives to current services will give users the chance to collect their fair share of the revenue they generate with their participation in online ecosystems. It’s an enticing proposition since it doesn’t require users to do much more than what they’re already doing: send emails, browse websites, watch ads, keep the computer on…

But what exactly do you earn from monetizing your resources on the internet, and how accessible and reliable are your earning? Here’s what you need to know.

What can you sell?

A handful of blockchain platforms enable you to rent your unused storage, idle CPU cycles, and internet bandwidth with those who are in need. The premise is simple: You list your resources along with your payment terms on the application and get paid in the proprietary crypto-token of the application when others use them. Purchases are arranged, performed and paid peer-to-peer through smart contracts, bits of code that run on blockchain without the need for a centralized application server.

Examples include Golem and iExec, two decentralized marketplaces for computing power. Users can earn the platforms’ proprietary cryptocurrencies, GNT and RLC tokens respectively, by renting their CPU cycles to developers and users who want to run applications on the network. Golem and iExec aim to replace centralized cloud providers such as Amazon and Google, in which the service provider sets the rates and rakes in all the profits.

Storj and Filecoin are two distributed storage networks where users can earn cryptotokens for sharing their free hard drive space with the network. Both platforms are designed to provide infrastructure for various applications such as web hosting and streaming services. Gladius, a decentralized content delivery network (CDN) and DDoS mitigation solution, enables users to monetize their internet bandwidth to serve content from websites and services running on the network.

These applications provide a good opportunity to turn the hours that your computer sits idly in the home or office into a side income.

Other blockchain platforms enable you to monetize your data. An example is Datum, a decentralized marketplace for user data. Datum enables users to earn DAT tokens by choosing to share it with other organizations. Other players in the domain include Streamr, a real-time data-sharing platform geared toward the Internet of Things (IoT). With Streamr, users can earn DATAcoin tokens by sharing the data their connected devices generate with other devices that need it to carry out their functions and companies that use them for analytics and research.

Data is a huge market that is currently dominated by a few big players such as Google and Facebook. These companies hoard user data in their walled-garden silos and use them to make huge profits. Blockchain platforms give users the choice and power to claim their share of that market by giving them back the ownership of their data.

Matchpool is a decentralized social network that enables users to monetize their groups and online communities. Matchpool provides the decentralized equivalent of Facebook groups and provides tools for administrators to earn GUP tokens by setting fees on membership and access to content. And there’s Brave, the blockchain-based browser developed by the former CEO of Mozilla. Brave removes ads from websites and instead gives users the choice to earn Basic Attention Tokens (BAT) by opting to view ads.

How much do you earn?

It’s difficult to measure earnings on blockchain applications because most of them either haven’t launched yet or are in their early stages. Few of the companies I reached out to could provide stable numbers or average figures.

Also, the value of the resource you share on these platforms is often subject to supply-and-demand dynamics. For instance, iExec leaves it to the users to determine the price of their computational resources and doesn’t take any cut from their earnings. If there’s a large demand for decentralized CPU power, you’ll earn more from participating in the network.

Storj, the decentralized storage network, had the most accurate information to share. The platform provides a formula to calculate the monthly earnings of “farmers,” the users who share their free storage space with the network. Storj charges $0.015 per gigabyte of data stored and $0.05 per gigabyte downloaded, 60 percent of which goes to the farmers.

Several factors affect the final earnings, including whether the farmer nodes store primary or mirror copies of data, how long they participate in the network, and how well they perform in terms of up-time, bandwidth and response times. “If someone stored 1TB of data for the entire month, and that entire TB of data was downloaded once that month, they could potentially make $39,” said Philip Hutchins, CTO at Storj Labs. But the current average monthly payment for a Storj farmer node is around $2, according to the network data the company shared.

Storj has also launched partnerships with FileZilla, Microsoft and other companies to build decentralized apps on top of its network, which could increase demand for Storj space.

On Datum, the decentralized data market, users earn between $0.50 and $5 in DAT tokens for each promotional email they opt to open, according to Roger Haenni, the company’s CEO, though he did not share the details of how earnings are calculated. Currently the network supports monetizing email inboxes, but in the future, the company plans to provide users with the option to get paid for sharing various categories of data, such as the location data their phone collects, apps, services and websites they use, data that their smart gadgets collect and others.

That last bit sounds a bit invasive on user privacy. “This [data] is currently widely tracked by cookies from various ad networks,” explains Haenni. “However, the user is not asked to explicitly opt in to share this data nor does he get paid when this data is monetized.” Datum will give the chance to claim the money that’s already being made from their data.

The Datum network currently has 80,000 users, and since the launch of the Datum App in late December, users have collected 1.5 million DAT tokens, amounting to around $75,000.

Gladius, the decentralized CDN, doles out $0.03 in GLA tokens per gigabyte of bandwidth of data streamed through a node (however, the company’s website states that this is an estimate based on favorable market conditions). An internet connection with a 30 mbps upload speed shared with the network for eight hours a day could earn its owner around $49 per month.

What are the costs and risks?

In most cases, you’ve already paid for the resources you’ll be sharing on the blockchain, whether it’s your hard drive space, your CPU or your bandwidth (unless you’re on a metered connection, in which case sharing it would be unwise). However, you’ll have to factor in electricity costs of keeping your computer on, which varied depending on the region you live in.

Social and data-sharing platforms won’t have any extra costs, but you’ll be responsible for keeping the balance between sharing your data and preserving your privacy.

One of the real risks of earning cryptotokens is the constant price fluctuations. The value of what you earn today could double overnight—or drop by half in the same manner. This means you’ll have to choose between holding your tokens or cashing out. 

And there are always the risks of scams and failed projects that will absorb users’ funds and resources only to disappear and leave them out in the cold.

“Resource-sharing projects on top of the blockchain that allow users to control and profit from their own data will be the most profitable and successful projects in the future,” says Jared Tate, blockchain expert and the founder of DigiByte. However, Tate also notes that many of the current resource sharing platforms are PR projects that will never scale. 

“The majority of projects out there won’t be around in 5 years. Most of the projects don’t even have working software, just a white paper and some fancy graphics on a website,” Tate says. Some users evaluate projects by examining the market cap alone, which Tate believes is the absolute worst way to gauge a projects long term viability. “So many market caps are artificially inflated by developer pre-mines or deceptive coin counts,” he warns.

 

How do you deal with the liquidity problem?

 Another challenge users will have to overcome is what to do with the tokens they earn from monetizing their resources. For instance, if you earn Storj tokens from renting your free hard disk space, the only thing you can do with your earnings is, well, rent storage from other users, which doesn’t make sense since you already had an excess of it to begin with. 

Some platforms have multi-faceted economies that enable users to use their earned tokens for various purposes. For instance, in Flixxo, a decentralized streaming service, users can earn FLIXX tokens by sharing their free disk space and bandwidth to host content on the network. They can then use their earned tokens to consume videos published on the platform. But that is still a limited use case and might not be the problem they want to solve with their earnings.

Digital currencies and tokens have a liquidity problem. There are very few retailers and online services that accept Bitcoin as a method of payment, and even fewer that accept other cryptocurrencies. Users often must find some online exchange which matches buyers and sellers of various digital and fiat currencies. The process is slow and complicated and involves fees at different levels. 

An alternative is Bancor, a decentralized liquidity network built on top of the Ethereum blockchain. Supported by its own token, BNT, Bancor enables users to convert between tokens supported on its network without the need to find a buyer or seller. So, for instance, if you’ve earned an amount of RLC tokens from renting your idle CPU time on iExec, you can instantly trade it on Bancor for, say, MANA, the token that will let you purchase VR experiences on Decentraland. 

Bancor already lists several dozen tokens on its network and plans to add more in the future.

“The aim of this mathematic liquidity solution is to allow the long tail of tokens to emerge, by allowing any user generated currency to be viable on day one without needing to achieve massive trade volume in order to be listed and thus become liquid,” says Galia Benartzi, the co-founder of Bancor. “Great tokens will still rise, bad ones will fail, but all will have a chance to try.”

PayPal and Singapore’s Temasek invest $125M in Indian payment startup Pine Labs

Fresh from agreeing its largest acquisition to date with a deal to buy European payment firm iZettle for $2.2 billion, PayPal is on the investment hunt once again after it backed India’s Pine Labs with a $125 million round.

The financing jointly comes from PayPal and Temasek, the sovereign investment fund from the Singaporean government with over $200 billion in assets. Both will take undisclosed “minority shares” in Pine Labs. Sequoia made a seed investment in 2009 and it remains the startup’s largest-single investor, the VC firm said.

The new deal takes New Delhi-based Pine Labs to $208 million raised from investors to date. It previously closed an $82 million investment from PE funds Actis and Altimeter Capital in March of this year at a reported valuation of $900 million. Recent reports speculated on the Temasek investment (but not PayPal) which would give Pine Labs a valuation of over $1 billion, thus vaulting it into the global ‘unicorn’ club. A spokesperson declined to give a confirmed valuation for the latest deal.

Like iZettle, Pine Labs offers a point-of-sale device that covers debit and credit cards, as well as new and increasingly popular digital payment methods that include mobile wallets, and services that support Indian government project UPI. Rather than other traditional POS devices that are common across India, Pine Labs’ is smart and cloud-based.

While that product gives it distribution, the company offers a suite of services for retailers and SMEs which include customer analytics, a transaction dashboard, and loan services. The company’s notable public-facing clients include retailer Croma, Nike, McDonald’s, Apple, KFC, Sony and Samsung.

Since that last investment in March, there’s been a change at the top. Pine Labs appointed board member Vicky Bindra, a former executive with Visa, MasterCard and GE Capital, as its CEO in April to go after international expansion and new services for consumers and banks. That’s also how this new capital will be spent, the company confirmed in an announcement.

In a statement, Bindra said Pine Lab’s annualized transaction volume is $15 billion through a base of around 300,000 payment points. He added that the business is “on track to originate over $1 billion USD of instant loans at point-of-sale terminals for card issuers and partner NBFCs this fiscal year.”

“We’re teaming up with Temasekand PayPal at a time when the Indian payments market is at an inflexion point. We are a leader in the offline payments space, a position that is critical in enabling the ecosystem of online payment products. The investments will help us move a step closer to our vision for building a world-class merchant-centric payments ecosystem,” Pine Labs founder Lokvir Kapoor added via a statement.

Papua New Guinea threatens to close Facebook for a month to investigate its harmful impact

Facebook is proving problematic for many governments worldwide, but few would think to shut it down entirely.

That’s exactly the approach that Papua New Guinea, the Pacific sea island nation located near Australia, is proposing to take with a new measure that could see the social network closed off for a month. During that period, the government plans to investigate the impact of fake accounts, pornography and false news and information which it said are rife on the social network in the country.

The prospect of a month-long ban was announced by Papua New Guinea’s communications minister Sam Basil who told Post Courier that the government “cannot allow the abuse of Facebook to continue in the country.”

Internet penetration in the country is thought to be less than 15 percent, which suggests at face value that Facebook isn’t particularly mainstream. However, that may not be an accurate measure of how many of the country’s eight million population use the social network since mobile is the primary access point in many parts of Asia Pacific. Still, the ban is unlikely to be welcomed by the population.

Post Courier reported that Basil even floated the idea of a dedicated social network to replace Facebook in the country.

At this point, the Facebook ban — however delicious it may sound given recent events — is not confirmed for Papua New Guinea. It remains a possibility once Basil has liaised with police, according to the media report.

Our attempts to reach Basil via phone and email to confirm the plan were not successful.

Facebook has been under fierce pressure around the way it handles data for its 1.5 billion users after it emerged that Cambridge Analytica, a consulting firm that worked on the successful Trump election campaign, hijacked data on nearly 90 million users of the social network.

The aftermath of the scandal has seen Facebook CEO Mark Zuckerberg testify on data security and processes in front of Congress and the House in the U.S., as well as the EU parliament in Europe.

Meanwhile, and of equal importance, Facebook has also been engaged in controversies in the emerging world. The UN has accused it of accelerating racial violence in Myanmar, while the service was closed for three days in Sri Lanka to stop anti-muslim violence. In the Philippines, it has been scrutinized for helping controversial President Rodrigo Duterte into power, while Vietnamese activists have expressed concern that it is helping the government crack down on people in the country.

Here is where CEOs of heavily funded startups went to school

CEOs of funded startups tend to be a well-educated bunch, at least when it comes to university degrees.

Yes, it’s true college dropouts like Mark Zuckerberg and Bill Gates can still do well. But Crunchbase data shows that most startup chief executives have an advanced degree, commonly from a well-known and prestigious university.

Earlier this month, Crunchbase News looked at U.S. universities with strong track records for graduating future CEOs of funded companies. This unearthed some findings that, while interesting, were not especially surprising. Stanford and Harvard topped the list, and graduates of top-ranked business schools were particularly well-represented.

In this next installment of our CEO series, we narrowed the data set. Specifically, we looked at CEOs of U.S. companies funded in the past three years that have raised at least $100 million in total venture financing. Our intent was to see whether educational backgrounds of unicorn and near-unicorn leaders differ markedly from the broad startup CEO population.

Sort of, but not really

Here’s the broad takeaway of our analysis: Most CEOs of well-funded startups do have degrees from prestigious universities, and there are a lot of Harvard and Stanford grads. However, chief executives of the companies in our current data set are, educationally speaking, a pretty diverse bunch with degrees from multiple continents and all regions of the U.S.

In total, our data set includes 193 private U.S. companies that raised $100 million or more and closed a VC round in the past three years. In the chart below, we look at the universities most commonly attended by their CEOs:1

The rankings aren’t hugely different from the broader population of funded U.S. startups. In that data set, we also found Harvard and Stanford vying for the top slots, followed mostly by Ivy League schools and major research universities.

For heavily funded startups, we also found a high proportion of business school degrees. All of the University of Pennsylvania alum on the list attended its Wharton School of Business. More than half of Harvard-affiliated grads attended its business school. MBAs were a popular credential among other schools on the list that offer the degree.

Where the most heavily funded startup CEOs studied

When it comes to the most heavily funded startups, the degree mix gets quirkier. That makes sense, given that we looked at just 20 companies.

In the chart below, we look at alumni affiliations for CEOs of these companies, all of which have raised hundreds of millions or billions in venture and growth financing:

One surprise finding from the U.S. startup data set was the prevalence of Canadian university grads. Three CEOs on the list are alums of the University of Waterloo . Others attended multiple well-known universities. The list also offers fresh proof that it’s not necessary to graduate from college to raise billions. WeWork CEO Adam Neumann just finished his degree last year, 15 years after he started. That didn’t stop the co-working giant from securing more than $7 billion in venture and growth financing.

  1. Several CEOs attended more than one university on the list.