A security bug in health app Docket exposed COVID-19 vaccine records

A security bug in the health app Docket exposed the private information of residents vaccinated against COVID-19 in New Jersey and Utah, where the app received endorsements from state officials.

Docket lets residents download and carry a digital copy of their immunizations by pulling their vaccination records from their state’s health authority. The digital copy has the same information as the COVID-19 paper card, but is digitally signed by the state to prevent forgeries. Docket is one of several so-called vaccine passports in the U.S., allowing residents to show their vaccination records — or a scannable QR code — for getting into events, restaurants, or crossing into countries where vaccines are required.

But for a time, the app allowed anyone access to the QR codes of other vaccinated users — and all the personal and vaccine information encoded within. That included names, dates of birth, and information about a person’s COVID-19 vaccination status, such as which type of vaccine they received and when.

TechCrunch discovered the bug on Tuesday and immediately contacted the company. Docket chief executive Michael Perretta said the bug was fixed at the server level a few hours later.

The bug was found in how the Docket app requests the user’s QR code from its servers. The user’s QR code is generated on the server in the form of a SMART Health Card, a widely accepted standard for validating a person’s vaccination status across the world. That QR code is tied to a user ID, which isn’t visible from the app, but can be viewed by looking at its network traffic using off-the-shelf software like Burp Suite or Charles Proxy.

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But Docket’s servers weren’t checking to make sure the person requesting a QR code was allowed to request it. That meant it was possible for any app user to change their user ID and request someone else’s QR code. Worse, Docket user IDs are sequential, and so new QR codes could be enumerated simply by changing the user ID by a single digit.

It’s not known if anyone else discovered the bug. Perretta said the company is “currently in the process of reviewing logs to determine if there was any malicious activity on the platform.” Perretta also said that the company was working to inform state governments about the lapse, but did not say if the company planned to notify its users of the security lapse.

Nancy Kearney, a spokesperson for New Jersey’s Department of Health, said in a statement: “The New Jersey Department of Health was notified by our vendor, Docket, of a code vulnerability related to the recent release of a QR code associated with the app. Docket assured the Department that they identified and fixed the vulnerability within the code. No other functionality of the app was affected. The privacy and security of Docket users remains paramount. At this time, Docket is investigating for any indication of potential records that could have been compromised. The Department continues to work with Docket to ensure their ongoing vigilance on this matter.”

A spokesperson for Minnesota’s Department of Health also not reply. (Docket is available for Minnesota residents, but the state has not yet deployed QR codes.)

Tom Hudachko, a spokesperson for Utah’s Department of Health, said: “The Utah Department of Health is committed to ensuring the privacy of Utah residents and expects its contractors and partners to maintain the same commitment. Docket notified us [Tuesday] of a bug within its system that could potentially allow users to receive the personal information of other users. Docket has assured us they have identified what caused the bug and have resolved this issue.”

“We are working with Docket, and our own data security teams to identify any users that may have had their information inappropriately shared and provide appropriate notification to those individuals,” said Hudachko.

But questions remain about how the bug slipped through to begin with. It’s not known exactly how many vaccinated people’s records were at risk. Last week, Docket said it reached one million users. New Jersey and Utah have a combined 8.5 million residents who have received at least one dose of the COVID-19 vaccine at the time of writing.

Perretta would not say, when asked, what kind of security testing was done on Docket before its launch.

Utah’s Hudachko said that Docket went through a “thorough security review” by the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC), two offices housed within the U.S. Department of Health and Human Services (HHS). An ONC spokesperson deferred comment to CMS and HHS, neither of which responded to our requests for comment.

The Centers for Disease Control and Prevention (CDC), which approved the app, also did not respond to questions asking if the agency had conducted a security review.

Docket isn’t the only vaccine passport app maker that’s faced security issues. The bug found in the Docket app is a nearly identical issue found in an app called Aura, which exposed thousands of QR codes containing the vaccination status of staff and students. And earlier this year, the Calgary-based proof-of-vaccination app Portpass exposed the personal information of hundreds of thousands of people after leaving its website unsecured, while one hacker was able to create an entirely fake vaccine passport using Quebec’s official proof-of-vaccination app.

Employees are designing the workplace of the future

Why do we go to the office?

This is not a rhetorical question. Do we go to be around other people and work collaboratively? Do we go because it’s a dedicated location that allows us to focus on our work in a unique way? Do we go because we believe it’s necessary to be “seen”? Do we go because we’re just supposed to, because it’s what we’ve always done?

At SAP, it’s important not only that we find answers to these questions, but that our employees play a role in answering them — and in building the hybrid workplace of the future.

Just this summer, we rolled out a brand-new, hybrid work pilot program at our offices in Palo Alto. For months, we’ve been testing different floor plans and setups, a variety of work schedules, the most productive uses of space and the ideal structure and composition of meetings. We’ve also been providing manager and leadership training, enablement and more that’s suited for this new world.

So, what have we learned? And how can you apply some of the lessons to your business?

Getting to work: What our employees had to say

Early employee feedback — from before and during the early stages of the pilot program — showed that demand existed for a high-utilization, high-energy workspace. We just had to find a way to build it so that people could use it not just when they needed to, but when they wanted to. So, what factors would make people want to come into the office?

Our research found four main factors:

Peer-to-peer learningOur employees are passionate about building out their network, and many cited peer-to-peer learning as an opportunity to quickly advance their careers and learn how SAP builds and innovates on its products.

While the majority of our onboarding, training and learning opportunities are still held virtually, we are now exploring hybrid options to give employees the opportunity to meet with each other in-person if they prefer.

CollaborationIf COVID permits, many people crave in-person interaction, according to our research. Video calls may be functional, but nothing matches the ability to sit across the table and brainstorm, learn and grow together.

Collaboration has been a major driving force for the employees participating in the hybrid work pilot program. We see a wide variety of our employees whiteboarding and sharing screens to solve complex problems together. The key is ensuring that they’re in a space equipped with high-quality video and audio equipment so that team members who are physically present and remote can be equally engaged.

Community buildingAll-hands meetings, Q&A sessions and other team-building events just hit differently when you’re all in the same physical space. Many employees we surveyed mentioned semiregular get-togethers as clear benefits of being in the office.

We’ve only just started experimenting with hosting employee events in our physical offices again, and they look much different than they did before — smaller, outdoors and with COVID precautions in place. Before our first event, we asked ourselves: Will employees want to come? The answer was, overwhelmingly, yes.

We opened a sign-up for an employee meeting and within minutes, registration was full, with double the amount on a waiting list. The energy the day of the meeting was palpable, and the feedback from employees was very positive — they were thrilled to be together again.

IntentionMany people told us that they simply miss their office routine. For some, having the ability to get dressed in the morning, drive to work and sit at a desk with team members offers an unmatched productivity and focus boost.

Not all employees come to the office for teamwork and community. Some simply prefer to separate their personal and professional spaces and are looking for individual quiet areas where they find themselves most productive. Open collaboration spaces are essential in the office, but so too are quiet zones and phone booths.

One way we’ve tried to put these attributes into action is via scrum neighborhoods in our physical offices. The environments are designed with 15 to 20 available desks, set in beautiful and creatively liberating office spaces built to empower collaboration and teamwork. We’ve even built a mobile app to help achieve high utilization of the space. Teams can use the app to coordinate when they come to the office together, and book spaces and phone rooms.

Simultaneously, we’ve worked with our leaders to better enable them to manage in our new reality, avoiding bias and molding the traditional manager-employee relationship into a more human and empathetic one.

Early lessons from the pilot program

This is only the beginning. Though the pilot program itself is well underway, we will not stop studying and testing the best ways to promote and optimize hybrid work for our employees going into the future.

We found that 80% of our employees want a mix of home and office work in the future. We also discovered that 80% intend to live in relatively close proximity to an office.

Still, many are uncomfortable returning at this particular moment. For those who have come into the office during the pilot program, though, many have specifically cited the peace and tranquility of an office working environment, the productivity of in-person meetings and amenities (like free coffee, snacks and lunch) as notable benefits. In addition, our leaders and managers feel better prepared to lead and manage in this environment, based on the communities of practice we have fostered with them.

With “normal” likely never to fully return, we must remain committed to continuous experimentation and introspection to determine what works and what doesn’t. Because the hybrid work model can’t just be successful in theory; it has to be successful in practice.

For instance, we’ve realized that many employees grew accustomed to being able to dramatically shift their working hours in the last year — whether working early in the morning or late at night to accommodate home and family life — and that eliminating a commute and an office has been a great adjustment for some on our team. Conversely, there are some previously in-person initiatives that still need to be rethought in order to improve overall execution and reach — and to make the employee experience more inclusive, regardless of location.

The questions we must ask ourselves are clear. Now, we just have to find our way to the answers.

What’s next? Using the “why” to find the “how”

At the same time, 2020 managed to hit pause and fast-forward on our work realities, a contradiction many of us are still learning to manage and operate within. We hope the lessons of our hybrid work pilot program can help inform the future of the office and productivity in this context, along with enabling our employees and leaders to navigate these changes. Moving into 2022, our pilot program findings will help inform our global flex work policies, giving regions around the world a baseline to determine what works best for them.

There is no better time to think through the answers than right now. So join us. Turn your “why” into a “how” and empower your employees to build the workplace of the future.

Apple will require unvaccinated employees to test for COVID-19 daily

Apple has yet to issue a mandate similar to Google’s that would require all employees to be vaccinated, but it’s tightening its COVID-19 protocols nonetheless. According to Bloomberg, the tech giant will start requiring all unvaccinated corporate employees to be tested for COVID-19 every time they have to work in the office instead of working from home. Back in September, Bloomberg reported that Apple asked employees to share their vaccination status voluntarily. Those who refuse to share their vaccine status will also have to undergo daily testing, while vaccinated office workers will only have to do rapid testing once a week.

The company’s retail store employees, however, won’t be subjected to daily tests despite having consumer-facing jobs. Unvaccinated staff members are required to be tested twice a week. Like Apple’s office workers, vaccinated staff will only have to undergo weekly rapid testing. It’s unclear if the tech giant will ever issue a COVID-19 vaccine mandate, but the Biden administration previously gave all federal contractors a December 8th deadline to require all their employees to be inoculated against the virus. As Bloomberg notes, Apple sells products to the US government.

For now, Apple has reportedly given employees an October 24th deadline to report and show proof of their vaccination status, so it could implement the new rules starting on November 1st. Unvaccinated employees will have to pick-up at-home rapid tests from Apple offices and stores, do the test themselves and then report their results through an internal app.

Editor’s note: This article originally appeared on Engadget.

SkyCell raises a $35 million series C round and enters COVID-19 vaccine distribution market

SkyCell, a Swiss company developing smart containers for transporting medicines and vaccines, is announcing a significant round of funding. On top of a $62 million round that closed last year, the company has now raised a $35 million Series C to improve shipping of temperature-sensitive drugs – including COVID-19 vaccines. 

The round, which is a combination of equity and debt financing, lists investors from the Middle East, including DisruptAD and (the VC arm of ADQ, an Abu Dhabi-based sovereign wealth fund), and SHUAA (a major UAE asset management and investment banking firm). The investment also includes, per the company, “China-based” and Zurich-based family offices,” and investment from Mobiliar, a major private Swiss insurance company. 

This round brings the company’s total funding to $133 million.

Essentially, SkyCell has developed a shipping container that maintains temperature, controls vibration, and is outfitted with sensors that continuously report the status of the cargo. The idea is to minimize temperature excursions – harmful fluctuations that can spoil drug products – and other damage that happens during shipping. 

An oft-cited number in the vaccine logistics community comes from a 2005 World Health Organization report suggesting that as many as 50 percent of vaccines are wasted – partially thanks to temperature, logistics, and shipping issues. The biopharma industry uses more optimistic numbers. SkyCell co-founder and CEO Richard Ettl says the industry typically factors in about a 4% failure rate for established markets and 12% failure rate for emerging markets when it ships drugs around the world.  

So far, SkyCell’s temperature excursion rate is less than .1%, according to an outside audit of the technology

When TechCrunch last covered SkyCell back in April 2020, the company had been working with eight major pharmaceutical companies and was in trials with seven more. The company now “works with the majority of the top 20 pharmaceutical companies,” per a PR representative – though the company wouldn’t provide further details. 

Before COVID-19, the company was delivering about 250 million vials of pharmaceutical products per year across all customers. Since then, the technology has moved forward in one big way: It’s been redesigned to be able to transport mRNA-based COVID-19 vaccines, as well as the raw materials needed to make them. 

The newly designed containers use dry ice – a necessity to achieve the temperatures about -80 to -60 degrees Celsius preferred (but no longer always required) to transport vaccines like Pfizer’s.

When it comes to ultra-cold vaccine shipping, dry ice is basically unavoidable. (UPS Healthcare makes its own dry ice and has been upping production to meet COVID-19 vaccine demand ). SkyCell’s tech, says Ettl, uses far less of it than competitors. It uses 100 kilograms of dry ice for about 120 hours of use, though it can store vaccines longer, if more dry ice is added upon arrival.

“The competition would need 200 kilos or more of dry ice,” he says. “So that was a major feat of engineering.” 

Ettl says the company is now transporting either raw materials or vaccines for three top COVID-19 vaccine makers (he did not disclose which ones – though by the ultra cold temperature requirements, you might be able to guess. 

“For two [of the three] we almost exclusively transport the raw material that comes out of the factory,” he says.  

Another major step forward is the company’s expansion from flying into trucking services. 

Though many vaccines first arrive in countries via plane, it’s often trucks that bring vaccines to central medical warehouses. Ideally these trucks are refrigerated, but those aren’t always available, which means that cold boxes and large-scale hauler trucks get used instead, according to a 2021 McKinsey report

The expansion into trucking greatly increases the reach of SkyCell’s vaccine distribution network. The company has been involved in European distribution of vaccines for one major vaccine player, Ettl says. 

“Before we were not doing trucking,” says Ettl. “Our container is used on trucks to transport these -80 Celsius and very cold temperature [products] around. So this was definitely a big change.” 

Ettl says that COVID-19 vaccine shipping will likely continue to play a role in the company’s future. But it’s not the core of their business. Many pharmaceutical products from cancer drugs to other vaccines require cold chain handling. 

The International Air Transport Association’s Center of Excellence for Independent Validators in Pharmaceutical Logistics suggests world sales of cold-chain drugs and biologics will surpass $440 billion by 2024 – and that doesn’t include COVID-19 vaccine spending. 

Within that industry, there also appear to be three macro-trends, the report continues. There are an increasing number of container reuse services, and development of more recyclable shipping containers, and finally the use of electronics to track shipments in real time. 

For its part SkyCell overlaps with all of these trends. The fact that SkyCell’s container is reusable is a “major driver” that has helped the company obtain pharmaceutical partnerships, Ettl says. The company has also installed sensors within the boxes, and collects a constellation of data points on every shipment. 

Ettl believes that SkyCell is poised to respond to industry-level changes and increasing demand for cold-chain products. So far, the numbers seem to be in the company’s favor. 

“We have never lost the product in the company’s history,” he says. 

YouTube will now ban content with vaccine misinformation

YouTube expanded its medical misinformation policies today to include new guidelines that ban vaccine misinformation. The Google-owned video platform had previously banned over 1 million videos spreading dangerous COVID-19 misinformation. Now, YouTube says it will also remove content that spreads misinformation about vaccine safety, the efficacy of vaccines and ingredients in vaccines. The platform previously banned misinformation specific to coronavirus vaccines, but now, its policies are being updated to also block misinformation about routine immunizations, like those for measles and Hepatitis B, as well as general false statements about vaccines that are confirmed safe by local health authorities and the World Health Organization (WHO).

This change in policy comes as COVID-19 vaccination rates slow — in the U.S., about 55% of people are fully vaccinated, but these percentages are larger in countries like Canada and the United Kingdom, which have vaccinated 71% and 67% of people against COVID-19, respectively. But President Biden has pointed to social media platforms as a place where vaccine misinformation spreads. The White House has even enlisted the help of rising superstars like Olivia Rodrigo to encourage Americans to get vaccinated.

With these new guidelines, YouTube is following the footsteps of Facebook, which expanded the criteria it uses to take down false vaccine information in February. Twitter also bans the spread of misleading COVID-19 information and labels tweets that might be misleading by using a combination of AI and human efforts. Twitter even suspended Georgia Representative Marjorie Taylor Greene after she falsely claimed that vaccines and masks do not reduce the spread of COVID-19.

Some examples of content that violates YouTube’s new guidelines include videos that claim vaccines cause chronic side-effects like cancer or diabetes; videos that claim vaccines contain devices that can track those who are inoculated; or videos asserting that vaccines are part of a depopulation agenda. If a user posts content that violates these guidelines, YouTube will remove the content and let the uploader know why their video was removed. If it’s a user’s first time violating community guidelines, YouTube says that they will likely get a warning with no penalty. If not, the user’s channel will receive a strike; if a channel gets three strikes in 90 days, the channel is terminated. YouTube will also take down several channels associated with high-profile anti-vaccine figures like Joseph Mercola and Robert F. Kennedy Jr.

“There are important exceptions to our new guidelines,” YouTube wrote in a blog post. “Given the importance of public discussion and debate to the scientific process, we will continue to allow content about vaccine policies, new vaccine trials, and historical vaccine successes or failures on YouTube.”

The platform will also allow users to discuss their personal experiences with vaccines, so long as the content doesn’t violate other guidelines — but if a channel shows a pattern of promoting vaccine hesitancy, YouTube may remove the content. These guidelines will be enforced starting today, but YouTube wrote that, as with any new policy, it will take time to “fully ramp up enforcement.”

Apple Wallet is getting verifiable COVID-19 vaccination cards

There’s a real chance you’ll need proof of a COVID-19 vaccination to enter certain venues, and Apple is hoping it can save you the hassle of digging up an email or carrying a physical card in your pocket. The company is bringing verifiable COVID-19 vaccination cards to Wallet as part of a future iPhone software update. The feature will take advantage of the international SMART Health Cards standard (already in use in several states) to produce proof of vaccination, sign it with a private key and create a public key to verify your info.

The just-released iOS 15 already lets you store verifiable vaccination and test results in the Health app using the same standard. You’ll receive your records through QR codes, downloadable files or healthcare providers who use Health Records on iPhone.

Apple is promising strict privacy for all your data. The company won’t have access to your imported or shared records, and all info must be encrypted and securely stored when transferred elsewhere. The tech giant also can’t see your vaccination card or how you’ve used it. You can share information with “approved” third-party apps, but only on a one-time basis.

Apple didn’t say when it might release the card update. This won’t thrill you if you’re anxious about the very concept of sharing your vaccination status with a concert venue or restaurant. However, it should at least streamline the process — important when you’re already running late for a show.

Editor’s note: This article originally appeared on Engadget.

YouTube has removed 1 million videos for dangerous COVID-19 misinformation

YouTube has removed 1 million videos for dangerous COVID-19 misinformation since February 2020, according to YouTube’s Chief Product Officer Neal Mahon.

Mahon shared the statistic in a blog post outlining how the company approaches misinformation on its platform. “Misinformation has moved from the marginal to the mainstream,” he wrote. “No longer contained to the sealed-off worlds of Holocaust deniers or 9-11 truthers, it now stretches into every facet of society, sometimes tearing through communities with blistering speed.”

At the same time, the Youtube executive argued that “bad content” accounts for only a small percentage of YouTube content overall. “Bad content represents only a tiny percentage of the billions of videos on YouTube (about .16-.18% of total views turn out to be content that violates our policies),” Mahon wrote. He added that YouTube removes almost 10 million videos each quarter, “the majority of which don’t even reach 10 views.”

Facebook recently made a similar argument about content on its platform. The social network published a report last week that claimed that the most popular posts are memes and other non-political content. And, faced with criticism over its handling of COVID-19 and vaccine misinformation, the company has argued that vaccine misinformation isn’t representative of the kind of content most users see.

Both Facebook and YouTube have come under particular scrutiny for their policies around health misinformation during the pandemic. Both platforms have well over a billion users, which means that even a small fraction of content can have a far-reaching impact. And both platforms have so far declined to disclose details about how vaccine and health misinformation spreads or how many users are encountering it. Mahon also said that removing misinformation is only one aspect of the company’s approach. YouTube is also working on “ratcheting up information from trusted sources and reducing the spread of videos with harmful misinformation.”

Editor’s note: This post originally appeared on Engadget.

Europe’s quick-commerce startups are overhyped: Lessons from China

More than 10 companies currently compete across Europe with an instant grocery delivery business model. Half of them were established in 2020, the year of the pandemic. These companies have raised more than $2 billion to date.

Existing and well-funded online food-delivery service players like Delivery Hero are also joining the race by launching dedicated grocery offerings. However, if lessons from the world’s largest online grocery market, China ($400 billion), matter, then it’s clear that instant delivery is not the magic bullet to crack the dominance of Europe’s incumbent supermarket chains in the overall $2 trillion-plus flat market.

Instead, China’s quick-commerce equivalents (like Dingdong Maicai, Miss Fresh and Meituan Maicai) compete alongside a wealth of other online grocery models (such as Pinduoduo, JD’s Super and Alibaba’s Taoxianda), which have helped bring total market penetration to 20% and beyond.

Quick commerce suffers from narrower profit margins compared to competing models and is addressing lower consumer demand in China than anyone in the West is expecting it to achieve in Europe and the U.S. If the performance of online grocery platforms in China (a market five to seven years ahead of Europe in terms of online retail) is anything to go by, a range of B2C business models would be more likely to displace the traditional grocery retailers.

Third-time luck for quick commerce?

The idea of ordering groceries online and having them delivered to consumers in less than an hour is nothing new. Back in the heyday of the dot-com bubble, a company attempted to do just that: Kozmo.com. Founded in 1998, it raised more than $250 million (around $400 million in today’s dollars) from investors, promising to deliver food, among other items, to consumers within an hour, while charging no delivery fees.

In 1999, it had revenues of $3.5 million and a loss of $1.8 million. However, in 2001, the business was shut down by its board after the company could not make the business model work at scale.

Some 15 years later, another company had a go. Gopuff was established in Philadelphia in 2013 and originally targeted students. What started out as a hookah delivery service soon expanded into a much broader convenience store offering and delivered to customers in approximately 30 minutes.

Gopuff was most recently valued at $15 billion after raising a total of $3.4 billion — 75% of which occurred in the past 12 months. Last year, Gopuff grew revenues from around $100 million to $340 million.

Kozmo.com went out of business after just three years. Meanwhile, Gopuff was turned down by several VCs in its early days, and it wasn’t until the pandemic that it saw a rapid acceleration in fundraising. Little did teams at either company know that they would later become the inspiration for a whole generation of founders in Europe.

Europe’s $2B instant-grocery gamble

Has anything fundamentally changed in the 20 years since Kozmo.com? Indeed, we’ve seen little technological progress that would hugely affect the operations of an instant commerce business. However, there have been much larger shifts in consumer habits.

Firstly, the number of global internet users has skyrocketed (from below 500 million to beyond 4 billion), and mobile internet has taken over. Secondly, demand for online grocery delivery has grown significantly due to the COVID-19 pandemic, as consumers have preferred to make retail purchases from home for safety reasons. Thirdly, consumers are now accustomed to paying fees for delivery services, typically around $2 per order, which Kozmo notoriously did not do.

While many online grocery business models exist, the instant grocery, quick-commerce approach has been the favorite of European entrepreneurs and VCs over the past 18 months. The model itself, also referred to as q-commerce, is not that hard to understand.

Companies maintain a small product offering of around 1,000–2,000 SKUs that consumers would otherwise find in convenience or drug stores. These products are purchased directly from brands or through distributors and are stored in self-operated microwarehouses close to customers’ locations.

Marketing tactics are aggressive, often employing vouchers for first-time users of up to $12 (50% of an average shopping basket), and many startups offer their products at supermarket price or even at a discount of 10%–15%. Delivery usually happens by bicycle, e-bike or scooter, within 10-30 minutes of an order being placed, for a fee of around $2 with no minimum order value.

Companies like Getir from Istanbul (total funding: $1 billion, last valuation: $7.5 billion) and Gorillas from Berlin (total funding: $335 million, last valuation: $1 billion) are leading the way. When Gorillas announced its $290 million Series B in March 2021, it became the fastest European startup to achieve unicorn status (nine months after launch). The company is already rumored to be seeking Series C financing at a $2.5 billion valuation.

There are more than 10 companies across Europe with more or less the same business model. Those include the 2020-established Flink (Germany-based, $300 million raised), Zapp (U.K.-based, $100 million raised), Dija (U.K.-based, $20 million raised and just acquired by Gopuff), Jiffy (U.K.-based, $7 million raised) and Cajoo (France-based, $6 million raised).

There is also JOKR, which was started by the founder of Foodpanda. JOKR was only established in Q1 2021, but right after incorporation raised one of the largest ever initial seed rounds (rumored to be $100 million) and subsequently a $170 million Series A in July to bring the model to Europe, Latin America and the U.S.

Likewise, companies coming from food delivery have pushed further into this space and received additional funding in recent months, notably Delivery Hero through Dmart and Glovo through SuperGlovo, following role models in the U.S., such as DoorDash.

Does instant grocery stand a chance of becoming profitable?

As these companies approach later-stage financing sometime in the future, questions will be asked about the path to profitability in an industry of notoriously thin margins. Indeed, this is an uncomfortable truth that hasn’t changed since the early days of Kozmo.com.

The available figures show that old patterns are repeating. Gopuff recently reported an EBITDA of negative $150 million on $340 million in revenue (EBITDA margin: -45%). Furthermore, an analysis by the German business monthly Manager Magazine concluded that Gorillas was operating at negative unit economics of -6%. Additional costs, such as overhead and technology, might push this number up significantly further.

It’s time for the VC community to stop overlooking the childcare industry

Square. Uber. Zillow. Airbnb. Besides being some of the biggest technology companies, what else do these titans have in common? They all operate in entrenched, highly fragmented, geographically localized and regulated industries. That means they required a lot of upfront venture capital investment to disrupt their respective markets. And the investment has paid off — these are now some of the most valuable companies in the world.

Venture capital alone hasn’t funded some of the largest companies. One of today’s most successful tech entrepreneurs was funded by massive infusions of investment from the federal government — Elon Musk received $4.9 billion in public subsidies for his companies, including SpaceX and Tesla. Moreover, government investment, via tax credits for electric vehicle purchases, made it more affordable for consumers to buy the green transportation they needed.

But one massive industry has not yet benefited from the large amounts of money that both venture capital and government can provide: Childcare. Families in the United States spend $136 billion on infant and child care every year, and the market is only growing. If you include school-age care and education for all children under 18, that number grows to $212 billion. In investor terms, the TAM (total addressable market) is huge.

To put things in perspective, one new company has raised more funding in 2021 than the entire childcare industry.

So where is the investment? Biden’s current compromise on an infrastructure plan does not include many provisions for childcare. Venture investment in this space is nascent and insufficient. In 2020, only $171 million was invested in care and early childhood education. The funding situation has improved in 2021, with $516 million invested in childcare, but it’s still just a tiny fraction of the $288 billion of venture capital invested so far this year.

To put that in perspective, a single new company has raised more funding in 2021 than the entire childcare industry.

Funding emerging childcare technology may require a lot of upfront capital. For starters, the industry is regulated and safety is and should remain a priority. Caring for and educating young children takes training, skill and love — it cannot be done by a computer.

But there are so many facets of the industry that are ripe for innovation. Parents sometimes take weeks to find a childcare provider that meets their needs. In some markets, there is not nearly enough supply (three children for every licensed slot) to meet the demand. Assessing quality, pricing and availability is challenging, and payments and business operations tools for the nation’s 300,000+ daycares are still often pen, paper and Excel spreadsheet affairs.

This industry just needs patient investors with long-term perspectives.

This is a great time to diversify investment portfolios and support relatively recession-proof companies meaningfully expanding access to childcare. COVID has finally started to bring this largely offline industry online. Parents are now willing to go digital for childcare decisions and providers are adopting new online technologies at a record pace. These tailwinds provide the perfect conditions for startups.

Solving this problem is a huge business opportunity that affects so much else. When the millions of parents with young children can’t find care, they can’t work. We saw this over and over again since the start of the pandemic. The average American family can spend up to 25% of their income on early childhood care, while the average care worker makes approximately $12 an hour.

Unlocking innovation here at scale will require public and private investment. Government shapes and enables markets, from the explosion of technology that followed from Kennedy’s investment in the space race to more recent fundamental investments in wind, solar and electric vehicles. NASA catalyzed dozens of new technologies in the 1960s because it had both a generous budget and the flexibility to work with the best private-sector contractors available to solve specific problems.

The revitalization of the childcare sector would benefit from an ambitious and galvanizing “moonshot” goal, like providing universal, free childcare for all Americans.

By collaborating with flexibility and creativity across the public and private sectors, we can achieve a basic shared goal that other democracies have already fulfilled — the accessible provision of high-quality childcare for all members of society.