Tag: software

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Software snafus abound, Nuro makes more cuts and VinFast takes the SPAC road

Welcome back to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B.

Automakers have been struggling with software development for years now. But the stakes are higher than ever because all of these companies keep touting the coming of the “software-defined” car, in part, to compete with Tesla. It reminds me of the days when automakers (and others) called future cars “an iPhone on wheels.”

Making declarations around software is not the same as actually pulling it off. And automakers are figuring this out.

Software problems have led to an executive shakeup over at VW Group’s software arm Cariad, prompted Chinese regulators to recall 1.1 million Tesla vehicles, and caused Polestar and Volvo Cars to delay production of their respective EVs. Fisker has also reportedly struggled with software integration problems in its Ocean SUV. And that’s just this week.

Software is also leading automakers to beef up their internal teams, instead of going to suppliers. General Motors, for instance, hired Apple executive Mike Abbott to head up its software division.

The upshot: Software-defined vehicles are still a work in progress.

Oh and hey, I’m back with another Disrupt 2023 promo. But this time I’m here looking for early-stage startups! Apply to join the Startup Battlefield 200 cohort at TechCrunch Disrupt 2023. All finalists get expert training, VC networking, a booth at Disrupt, and the chance to compete for $100,000 in equity-free funds. Applications close May 15. Apply today.

TechCrunch Disrupt 2023

Want to reach out with a tip, comment or complaint? Email me at kirsten.korosec@techcrunch.com. You also can send a direct message to @kirstenkorosec

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Micromobbin’

the station scooter1a

France will spend 2 billion euros ($2.17 billion) through 2027 to improve cycle infrastructure and help people buy e-bikes. Bien joué!

Grant Sinclair’s enclosed electric trike is “designed to be safe like riding inside a large crash helmet.”

India’s Hop Electric delivered its first over-the-air update to its OXO electric motorcycle. The company used user-generated data to inform the changes it made, like improved acceleration and range-prediction.

Lime has asked a federal California court not to throw out a suit accusing Hertz of using trade secrets to build a new version of its mobile app within weeks of one of Lime’s top engineers leaving for the car rental company.

With the rise of e-bikes comes the rise of waste from e-bikes at the end of their lives. PeopleForBikes and Call2Recycle want to stop battery waste before it starts. The two launched their “Hungry for Batteries” e-bike recycling campaign to help simplify the process of recycling e-bike batteries.

Segway-Ninebot has unveiled its 2023 lineup of smart vehicles, including the Ninebot KickScooter F2 Series, the Ninebot KickScooter Max G2, the Segway eScooter E300SE and more. Segway says the F2 and Max G2 come with auto-class traction control systems, giving the rider max control on slippery conditions. Segway also partnered with Apple to integrate Find My technology into the F2 and Max G so users can find their scooters if stolen.

Swft released its 2023 lineup of e-bikes, including two mountain bikes, an all-terrain e-bike and a BMW-style e-bike.

VanMoof has refreshed its entry-level lineup with colorful new e-bikes. The X4 and S4, out this month, have the same frame and vibes of VanMoof’s previous X3 and S3, but less of the high-tech complexities.

Yamaha introduced the Booster e-bike with a top speed of 15 miles per hour and the Booster speed pedelec with a top speed of 28 miles per hour.

— Rebecca Bellan

Deal of the week

money the station

As I mentioned last week, mobility SPACs are having a helluva time — and not in the fun party kind of way. EV SPACs like Arrival, Canoo, Faraday Future, Lordstown, Lucid and Nikola have seen their values annihilated in the past year. And yet, another company is voluntarily jumping into the SPAC fray.

You might recall that VinFast, the Vietnamese EV maker and arm of conglomerate Vingroup, filed in December 2022 for an initial public offering in the United States. The company is now taking a different path to the public market. On Friday, VinFast announced it would go public through a merger with SPAC (or blank-check) company Black Spade Acquisition Co.

Under the deal, VinFast will have an equity value of about $23 billion. Considering that VinFast’s VF8 EV has been widely criticized for just about everything from ride quality to literally failing to operate, this run for the public markets might not be the best idea. I guess we’ll see!

Other deals that got my attention this week …

CelLink, a California-based automotive wiring components startup, has received conditional commitment for a $362 million loan from the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing loan program. The funds will be used to help finance the construction of a factory in Texas.

Faraday Future plans to raise $100 million in debt, critical funds that will allow the company to start initial deliveries of its flagship FF 91 Futurist vehicle. And the struggling EV SPAC is going to need it. The company’s earnings report shows it had $33 million in cash and restricted cash at the end of the first quarter.

Getaround plans to acquire the assets of HyreCar, another car-sharing marketplace, for $9.45 million.

ProLogium Technology, a Taiwanese solid-state battery maker backed by Mercedes-Benz, is considering raising fresh funding at a valuation of about $2 billion, Bloomberg reported, citing unnamed sources.

Qualcomm plans to acquire Autotalks, a fabless chipmaker out of Israel that builds semiconductor and system-on-a-chip technology to aid in automotive safety; sources told TechCrunch that Qualcomm is paying between $350 million and $400 million for the startup.

UVeye, the automated vehicle inspection technology startup based in New Jersey and Tel Aviv, raised $100 million in a Series D funding round led by Hanaco VC. Existing investors GM Ventures, CarMax, W.R. Berkley Corporation, F.I.T. Ventures LP and Israeli institutional investors also participated in the round, which has pushed its valuation to about $800 million.

Wingcopter, a delivery drone startup based in Germany, picked up €40 million (close to $44 million) in financing from the European Investment Bank.

Notable reads and other tidbits

ADAS

Porsche has partnered with Mobileye to bring hands-free automated assistance and navigation functions to future sports cars.

Autonomous vehicles

Nuro is laying off 30%, or about 340 employees, across the company as part of a restructuring meant to extend its capital runway. The company is also pausing plans to ramp up commercial operations this year and delay volume production of its Nuro bot — the third-generation, or R3, delivery robot designed to be the flagship of its commercial strategy.

Ouster was named the exclusive long-range lidar supplier through 2026 to Motional for its Ioniq 5 robotaxis.

Earnings

Woof! There were a lot of earnings this week and many of the results were on the gloomy side of things. I can’t cover them all, but here are a few highlights.

Bird cuts costs in the first quarter, but the rest of its results, including ridership and revenue, were not so hot.

Gogoro reported first-quarter revenue of $79.3 million, down 16% year-over-year, while its net loss grew to $40.6 million — up from its net loss of $21.7 million in the same quarter last year. The company said that while revenue from its battery-swapping service was up YoY, sales of hardware and vehicle sales decreased compared to the same quarter last year.

Lucid’s first-quarter results show a company with widening losses and revenue that failed to meet Wall Street expectations. Lucid’s Q1 revenue was $149.4 million, up year-over-year, but lower than the $257.7 million it reported in the fourth quarter of 2022. Importantly, the company said it plans to produce more than 10,000 vehicles in 2023, which is on the lower end of its previous guidance.

Luminar beat its own guidance for Q1 and brought in $14.5 million in revenue, up 112% from the same period last year. That gain is on top of a net loss of $146.8 million, which was wider than expected. Luminar still has cash and cash equivalents of around $90 million. The lidar company said it’s on track to meet or beat its goal of adding at least $1 billion to its forward-looking order book in 2023 and expects its revenue to grow 100% in 2023.

Rivian was one of the few bright spots  — although the company is still burning through cash. The company beat Wall Street expectations with $661 million in revenue in the first quarter, a nearly seven-fold increase from the same period last year when it was plagued by supply constraints and production woes that curbed deliveries. It also managed to narrow losses to $1.35 billion, or $1.45 per share, in the first quarter, down from the $1.59 billion, $1.77 per share, in losses in Q1 2022. Oh, and how could I forget — Rivian is sitting on $12 billion in cash.

TuSimple did not file a Q1 report, and that’s the problem. The company hasn’t filed an earnings report since the end of the third quarter in 2022. As a result, TuSimple received a delisting notice from the Nasdaq for failing to file its quarterly report on time. TuSimple shares may stop trading as early as May 15.

Electric vehicles, charging and batteries

Fisker lowered its production target for the year to 32,000 EVs. The EV company also said it has partnered with Ample to bring the first Fisker Ocean SUV to market with swappable battery technology by Q1 2024. The companies intend to share revenue generated from the battery-swapping system.

Subaru is stepping up its EV plans. The company plans to add four EVs to its portfolio with an aim to produce 400,000 units by 2028.

Tesla officially broke ground on a Texas lithium refinery, making it the only U.S. automaker to refine its own lithium.

Volvo will call its upcoming small all-electric SUV the EX30.

In-car tech

Google unveiled a bunch of new auto-related features — like YouTube and conferencing coming to cars — at the company’s 2023 Google I/O developers conference. Auto tidbit of the event: By the end of the year, 200 million vehicles will be equipped with Android Auto.

Tesla is facing another lawsuit. This time, a group of Tesla Model S and Model X owners filed a proposed class-action lawsuit in the U.S. District Court in San Francisco alleging that automatic software updates decreased driving range or caused battery failures.

Miscellaneous

HopSkipDrive brought on a new executive team with backgrounds from Walmart, The Honest Company and Bird.

Vianova is working with French public transport operator RATP to analyze curb activities and sidewalk usage to prevent bus lane congestion and transform curb usage in Paris.

Zipline, the drone delivery startup, is expanding its U.S. customer base across healthcare, restaurant and retail verticals.

Vroom vroom! TechCrunch Disrupt 2023, taking place in San Francisco on September 19–21, is where you’ll get the inside scoop on the future of mobility. Come and hear from today’s leading mobility entrepreneurs on what it takes to build and innovate for a more sustainable future. Save up to $800 when you buy your pass now through May 15, and save 15% on top of that with promo code STATION. Learn more.

Software snafus abound, Nuro makes more cuts and VinFast takes the SPAC road by Kirsten Korosec originally published on TechCrunch

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Microsoft makes strategic investment into Builder.ai, integrates its services into Teams

Builder.ai tapped into a new wave of businesses wanting their own native apps with a turnkey approach, accelerated by the rapid digitization of life during the pandemic. That led to led to a $100 million Series C funding round last year led by Insight Partners, taking the company’s total funding to $195 million.

It’s now landed a strategic collaboration with Microsoft, which includes an undisclosed equity investment in the startup. TechCrunch’s source’s indicate the investment was “significant”, though we couldn’t get anything more than that.

The collaboration will mean the two companies collaborating on AI solutions. Builder’s “Natasha” AI will be available to users of Teams, and made available when they are looking to build apps and software. Microsoft’s Q2 results showed Teams has hit more than 280 million monthly active users.

Builder.ai’s CEO Sachin Dev Duggal said in a statement: “From my first meeting with Microsoft to the moment we agreed to collaborate more strategically, one thing has been really clear-Microsoft’s commitment to helping everyone unlock their true potential.”

There will also be integrations across Azure OpenAI Service and other Azure Cognitive Services with Builder.ai’s software assembly line and adoption of the Microsoft Cloud and AI, alongside partnerships across the Microsoft Developer Platforms.

“We see Builder.ai creating an entirely new category that empowers everyone to be a developer and our new, deeper collaboration fuelled by Azure AI will bring the combined power of both companies to businesses around the world,” added Jon Tinter, Corporate Vice President, Business Development, Microsoft.

Microsoft makes strategic investment into Builder.ai, integrates its services into Teams by Mike Butcher originally published on TechCrunch

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Inside Hyundai’s plan to turn software into a profit machine

The car industry is in the midst of its biggest transformation since the first Model T rolled off the assembly line. And no, it’s not just about shifting to electric vehicles.

It’s about software, which goes hand-in-hand with the EV transition. Automakers are betting that apps designed to work natively with infotainment systems, over-the-air updates, in-car movies and gaming, and on-demand features will be major drivers of revenue in the future.

Hyundai is one of the automakers that wants to get there first. And not by charging subscription fees for features that drivers are accustomed to getting upfront, like heated seats. Instead, Hyundai wants to develop and launch new products and services that owners value, such as downloadable features for dog owners or sports fans.

The South Korean automaker has set a lofty target for software-driven features to make up 30% of future profits, one of the company’s top mobility executives in the U.S. told TechCrunch earlier this month at the New York International Auto Show.

Up until now, Hyundai has been most visibly trying to get ahead of competitors with hardware-driven features; hardware-driven features such as electric vehicles with more than 300 miles of range and the ability to charge household devices.

hyundai kona new york auto show

The interior of a Hyundai Kona N EV at 2023 New York International Auto Show. Image Credits: Stephanie Keith/Bloomberg / Getty Images.

Now, Hyundai’s shifting its resources and attention to software design as well as personalization and customization of the interior of the vehicle, Olabisi Boyle, who is vice president of product planning and mobility strategy for Hyundai Motor North America, said in a recent interview.

“That’s where some of the future profits are going to be, maybe up to 30% comes from that,” she said.

Boyle clarified that’s meant to be an additional 30% on top of what Hyundai reports now, not in place of another revenue stream. Many industry watchers speculate the coming crop of EVs could last longer on the roads than conventional cars and may drive less revenue from parts sales.

Last year, Hyundai Motor Group posted revenues of $107 billion (142.5 trillion KRW) and a record $6 billion (7.9 trillion KRW) in annual net profit.

The tricky part will be pinpointing which features customers actually want or value. A young adult driver will likely have different needs and preferences than a grandparent using the same family vehicle. If automakers want this to work, they may have to throw a lot of different ideas at the wall and see what sticks.

But getting buyers to wrap their heads around this at all could be tougher than Hyundai expects. Car owners are still more or less used to the same ownership experiences they’ve had for many decades. And with household budgets already stretched thin by inflation or the growing number of subscriptions to services like streaming services, prospective car buyers have repeatedly bristled at the idea of paying monthly for functions they once got up front.

A recent survey of intended new-car buyers by the marketing and research firm AutoPacific revealed fairly low interest in features like remote vehicle control, streaming video, internet browsing and in-car gaming if those options hypothetically cost $15 per month.

Interest in such features tends to be higher among EV and plug-in hybrid shoppers who need something to do while charging, and higher among younger consumers more used to subscription features.

Downloads, not heated seat subscriptions

Boyle, a 20-year auto industry veteran whose career included a run in connected commerce tech at Visa, seemed cognizant of this tension.

The goal for Hyundai’s subscription features, she said, is “not for stuff that you already used to have, like for heated seats, but for actual features that would make you more productive in the interior space of your car.”

That’s a not-so-veiled reference to BMW’s much-maligned Functions on Demand plan, which in several markets offered drivers access to certain features like heated seats for a monthly fee. News of that rollout sparked considerable online backlash last year. BMW responded by saying some U.S. models offer a subscription dash cam function and remote start, but that such offerings exist for now on a “small scale” here compared to other global markets. It’s likely BMW will find more ways to trial such features on future cars.

But lately, “heated seat subscription” has become a kind of shorthand for everything car owners could hate about the forthcoming software-driven cars.

Boyle said for this to work in Hyundai’s favor, the features have to become almost essential, not unlike the backup cameras that are now ubiquitous (and mandated) in new cars.

“These functions that we’re seeing, they’re new, and they’re not perfect in their consumer experience, but those are all going to improve,” Boyle said. “And then that’s just going to be a baseline for when there’s a use case for this or that.”

She added that the focus will be on “things you can download in the EV that you wouldn’t have expected.”

“If you keep a dog in the car, maybe it regulates the climate or rolls down the window or something,” she said. “Do you want to pay for that feature?”

Other examples Boyle suggested included downloadable engine sounds for EVs — automakers like Dodge are already working on ways to simulate the noises lost with internal combustion — or even sports team-themed displays inside. (The latter was mentioned repeatedly to TechCrunch by Hyundai Motor Group executives and product planners at the auto show, including with subsidiary Kia.)

“You need to have the tech stack available for these use cases,” Boyle said. “Let’s say you love the Boston Red Sox, or whatever the case may be. Not everybody wants that, but you can download it for your particular EV.”

Hyundai aims to be one of the first large automakers to make the transition to producing vehicles with the capability of wireless software updates and downloadable features that extend far beyond the infotainment system. It has said all of its cars will be capable of over-the-air software updates by 2025 and many updated models are rolling out with this ability right now, and that will include bug fixes, battery management and eventually a more advanced automated driving assistance system.

Future-proofing

Almost every automaker will be racing toward “hyper-personalization” in the software era. In addition to seeing who can offer the most EV range, fastest charging times and best driving experience, the next few years will be a race to see who can offer the most features people want with the best software user experience.

Automakers are already going down this road. Arguably the highest-profile current example of this is Tesla’s so-called Full Self-Driving Beta, which can run up to $199 per month, or a total of $15,000. That gives owners a suite of advanced automated driving features that can be used to navigate city streets, though, despite its name, Tesla’s cars are not fully self-driving.

Hyundai too has been dipping its toes into this world with its Bluelink and now Bluelink+ subscription connectivity systems. Those services offer features like remote start, emergency roadside assistance and vehicle diagnostic checks for a monthly fee, not unlike General Motors’ long-running OnStar service. The new Bluelink+ service offers many of these features, but complimentary through the entire duration of ownership, with no trial period or subscription fees for new car owners. (Used car owners will have to pay for it after a trial ends.)

The auto industry’s next wave of subscription features could go much deeper. The Volkswagen Group, for example, is launching an in-car app store that will bring native experiences for Spotify, TikTok, Zoom and more. In-car movies and gaming are also expected to be major revenue drivers as EVs wait to juice up at charging stations. And as they (theoretically) become more automated in the future, passengers will need something to play and work on while being driven around.

Experts say that’s a long way off, if it ever happens at all. Car companies are still dedicated to automated driving. However, many, most notably Ford, are putting greater resources toward active driver assistance features like hands-off, eyes-off driving on highways. That includes Hyundai, too, which is working to commercialize autonomy with ventures like a robotaxi service in Las Vegas.

Boyle’s job is essentially future-proofing Hyundai. That also includes its big EV push and its investments in robotics, urban air mobility and hydrogen power.

“Fifteen years ago people would’ve said there’s no infrastructure for electric vehicles; why are you bothering with that stuff?” Boyle said. “But these are things you have to invest in early.”

Inside Hyundai’s plan to turn software into a profit machine by Patrick George originally published on TechCrunch

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Otterize raises $11.5M to help developers securely connect software services

Tomer Greenwald, Uri Sarid and Ori Shoshan, software developers by trade, found themselves building and configuring software authentication and authorization mechanisms repeatedly — each time with a different tech stack. Frustrated with the process, they sought to create a platform that enables developers to focus on writing code rather than on constantly configuring server permissions.

So Greenwald, Shoshan and Sarid, the former CTO of MuleSoft, founded Otterize, which aims to allow developers to securely connect different software services to each other and infrastructure by automatically configuring existing security controls. Otterize today raised $11.5 million in a seed funding round led by Index Ventures with participation from Dig Ventures and Vine Ventures, Jibe Ventures, Crew Capital and Operator Partners.

“Most software these days is composed of multiple services that call each other,” Greenwald told TechCrunch via email. “With Otterize, developers can make those calls securely by simply declaring, alongside their code, the calls their code intends to make.”

As Greenwald went on to explain to me, Otterize uses declarations to set access controls to allow intended calls — and block any unintended ones. If one service is compromised, it can’t be used to compromise other services it wasn’t intended to call. As an added benefit, Otterize provides a real-time map — Greenwald calls it an “access graph” — of all the services in the software app’s backend and how they’re calling each other, which certificates they’re using, how they’re protected and what remains to be secured.

Developers can embed Otterize’s open source solution in their development pipeline or opt for Otterize’s newly launched fully managed solution, Otterize Cloud.Otterize

Image Credits: Otterize”The way most access control mechanisms work, someone has to keep track of what services should be allowed to access another service, data source or API. That’s tedious, error-prone and requires being an expert at every technology used for authentication and authorization,” Greenwald said. “With Otterize, no knowledge is required from developers of how these technologies work, and maintenance happens automatically based on the one source of knowledge likely to always be correct and up to date: the developers of the code making those calls declare their need when they build it.”

Otterize currently isn’t generating revenue — it has only offered a free service until recently — and wasn’t willing to talk about its customer base. Asked about the broader slowdown in tech and headwinds like the Silicon Valley Bank collapse, Greenwald expressed confidence that Otterize’s focus on “responsible growth” and “prioritizing product-market fit” position the company well.

Time will tell. But one factor in Otterize’s favor is the heightened spending on cybersecurity, particularly in the enterprise. According to a 2021 survey from JumpCloud and ESG Research, 97% of security executives planned to expand or continue existing spend on identity and access management tools.

Beyond access management, 65% of organizations plan to increase spending on cybersecurity this year, an ESG Research poll found. Gartner predicts that global spending on security and risk management will grow by more than 11% in 2023, up to $188 billion from just $158 billion in 2021.

“By taking a measured approach to growth, we’re able to ensure that we’re providing value to our customers and building a sustainable business behind that value for the long-term,” Greenwald said. “Otterize is pioneering a new approach for access controls, automating the provision and maintenance of necessary access without human coordination, in so doing also securing the entire ecosystem of services based on least-privilege principles.”

Otterize raises $11.5M to help developers securely connect software services by Kyle Wiggers originally published on TechCrunch

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VCs still think work software is a wise investment

Work software is seeing significant investments from VCs, reflecting the continued trend toward digital transformation and remote work.

In its Road to Next report released Tuesday, Deloitte found that even though overall investment in work software companies is down from the lofty heights it reached in 2021, the segment still accounted for 15% of total expansion-stage deal value in 2022 (per PitchBook). Venture-growth work software deals remained steady, barely dipping from $35.4 million in 2021 to $35 million in 2022.

“As market trends remain relatively dynamic, qualitative data shows the appetite for innovation among workforces is strong,” the Deloitte co-authors wrote.

The drivers of the resilience are “numerous,” according to the co-authors, but they highlight a few of the major ones in the report.

First, VCs haven’t given up on the idea, right or wrong, that work software can enhance productivity to increase overall return on investment — an attractive prospect during a period of economic malaise.

Second, poor macroeconomics — plus destabilizing recent events like the Silicon Valley Bank collapse — have encouraged VCs to turn toward more sustainable “growth trajectories,” which tend to be found among longer-lasting, ironclad business-to-business contracts for software tool suites.

There’s truth to that second point.

In an IDC poll earlier this year, 62% of corporate tech managers in the U.S. said that tech spending at their companies would be the same or increase compared with 2022. That’s despite the fact that 82% of them said that they expected a recession this year.

Gartner presented similar findings in a January forecast. The firm projected that worldwide enterprise spending on software would grow 9.3%, reaching nearly $1 trillion by the end of the year.

Tellingly, 2022 saw the most completed work software startup-related rounds in the $5 million to $10 million range in history, according to PitchBook (cited by Deloitte). And the median exit size via acquisition for work software companies in 2022 was $100 million.

“Work software providers are revamping their product and service offerings and reorganizing along novel lines that may turn out to be the workplace, workforce, organizational structure and operating models better suited for the future, thus enhancing overall productivity and well-being,” the Deloitte co-authors wrote.

But while the overall work software market remains strong, not every category is performing equally well.

VCs still think work software is a wise investment by Kyle Wiggers originally published on TechCrunch

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MentorcliQ raises over $80 million to grow its employee mentoring software and services

For years, Phil George was the executive sponsor of a mentoring program at McMaster-Carr, an industrial hardware supplier, where he spent weeks trying to match program participants with only scant information about them to go on. Employees often requested resources while mentors asked for training, and mentees wanted more guidance on goals. And as the program progressed, there weren’t reliable methods in place to measure success.

“The program was highly inefficient, which made it impossible to scale to the rest of the company in order to leverage the benefits of mentoring across the organization,” George told TechCrunch in an email interview.

Informed by the experience at McMaster-Carr and mentorship conversations with other companies, George left his role in 2012 to team up with his brother, Andy George, and former colleague Miles Ulrich to found an employee mentoring software and white glove service startup. It came to be known as MentorcliQ, and — within a few years, with the pandemic as an accelerant — it grew its customer base to hundreds of companies.

MentorcliQ today closed an “over-$80 million” growth investment from PSG with participation from Rev1 Ventures and Plymouth Growth, bringing its total raised to more than $100 million. George says that the funding will be put toward product development and ramping up MentorcliQ’s customer acquisition efforts.

“MentorcliQ is a mentoring software platform that helps companies solve exceedingly common and expensive employee engagement, development and retention challenges,” George said. “Recent headlines tell a bleak story: quiet quitting, sweeping layoffs and falling short on DEI promises. All of this leads to employee disengagement for those left behind … MentorcliQ helps companies navigate these challenges by giving employees a way to develop their careers, hone their skills and build a community at work through mentoring.”

MentorcliQ

Image Credits: MentorcliQ

MentorcliQ occupies the increasingly crowded space of upskilling vendors, which VCs have patronized with great enthusiasm in light of the so-called Great Resignation. (From February 2021 to last February, investors have poured more than $2.1 billion into an assortment of companies in the skilling space, according to CrunchBase.) For example, GrowthSpace recently raised $25 million for its platform that leverages algorithms to match individual employees and groups of employees with experts for development sprints.

What sets MentorcliQ apart, George claims, is that it guides customers through the entire mentoring process. This includes designing and executing mentoring strategies, building and running mentoring programs, engaging mentoring participants and measuring the impact.

On the software side, MentorcliQ allows companies to run multiple mentoring programs from a single interface and control which users participate in the programs, as well as create participant profiles for each program. Companies can decide how mentor and mentee matches will be made in individual programs and see metrics like participation numbers, participant engagement and mentoring activity.

George drew attention to MentorcliQ’s matching algorithm, which he believes to be best-in-class. While most mentoring tools offer “bulk matching” options, which match all participants in a program at the same time, George explained, MentorcliQ’s algorithm attempts to optimize mentoring matches for an entire population of participants.

“MentorcliQ’s matching engine calculates match scores for every relationship combination while also factoring in matching rules, suggested matches, the timing of mentoring programs, employee turnover and new hires and other program-configurable variables,” George said. “The algorithm then looks at the landscape to find an optimal set of matches.”

While the tech industry’s outlook seems bleak, George — when asked about MentorcliQ’s growth strategy — said he believes companies will continue to invest in mentoring particularly as they search for cost-effective ways to leveraging existing talent.

He might be right. According to a recent study by Gartner and Capital Analytics, retention rates for mentees are 72% higher compared to 49% for employees who don’t participate in a mentorship program. Eighty-nine percent of mentees feel their colleagues value their work, moreover, versus 75% of employees without mentors, the same survey found.

“While companies often experience layoffs during times like these where there are economic headwinds, mentoring remains even more important to engage, develop and retain the employees who remain,” George said. “In tough times, it’s a feel-good ask of employees which leads to an incredibly high return on investment. Building culture while delivering return on investment is a winning combination during more challenging economic times.”

Signaling its expansion intentions, MentorcliQ recently hired a new chief revenue officer and plans to increase the size of its roughly 120-person team over the next 12 months.

MentorcliQ raises over $80 million to grow its employee mentoring software and services by Kyle Wiggers originally published on TechCrunch

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VW’s software unit Cariad launches app store to bring Spotify, Tiktok and hundreds more to vehicles

Dozens of apps including Spotify, Amazon Music, Tiktok and gaming hubs Vector Unit and FRVR are headed to VW Group brands, beginning with Audi thanks to a new app store launched by its software subsidiary Cariad.

The so-called “group application store,” which was announced Wednesday at Mobile World Congress in Barcelona, will debut in select Audi vehicles this summer. The group application store will be equipped on 2023 model year Audi A4, A5, Q5, A6, A, A8, Q8 e-tron and the e-tron GT vehicles, according to the company.

The intent is for the group application store to stretch across VW Group’s lineup, including the rest of Audi’s portfolio and then onto Porsche and Volkswagen.

The group application store is integrated with Harman’s so-called “ignite store,” a framework for infotainment systems that makes it easier for third-party app developers to adapt content and services for automotive, while allowing VW Group to maintain control of third-party content. Control over the flow of data, particularly what third-party apps can access, has been a central issue for automakers. It’s particularly critical for a company like VW Group, which sells vehicles in China, Europe and the United States — all of which have varying regulations around data.

More than two dozen apps will initially launch on the “group app store,” covering audio, gaming, navigation, EV charging, news, weather and social media. Some of those include audio apps iHeart Radio, Tidal and TuneIn, charging apps Chargehub and Plugshare, the internet browser Vivaldi and point-of-interest apps Mappo, Road.Travel and Yelp. Not all of the apps in the group store will make it to every VW Group brand. Audi and Bentley brands may select different apps than Volkswagen, for instance.

Hundreds more are in the pipeline, according to Cariad CEO Dirk Hilgenberg, who contends that the app store is just the beginning for the automotive software subsidiary and its parent company. Hilgenberg also emphasized that this store will not just house third-party apps; native apps built by Cariad for VW Group brands that provide predictive maintenance information, plug and charge payments, online traffic light information and navigation services will also be included.

“The group application store is just one puzzle piece in the entire input infotainment stack, but it’s a very important one,” Hilgenberg told TechCrunch in a recent interview.

This puzzle piece is an important milestone for the three-year-old subsidiary, which has hired more than 6,600 software developers since its founding in 2020.

It also provides a peek at the company’s upcoming “One.Infotainment” system that is being developed for the next generation of luxury and performance vehicles, including the Porsche Macan EV, a highly anticipated vehicle that has been delayed until 2024 because of problems surrounding production of the software platform by Cariad.

Software has historically been a trouble-spot for VW Group. Cariad was formed in 2020 in a bid to reverse that course and develop software-defined vehicles that not only compete with the likes of Tesla but also delivers in-car entertainment and services that generate revenue. VW Group said in 2021 that Cariad could generate as much as €1.2 trillion ($1.4 trillion) in revenue by 2030, via subscriptions and other sales.

Software 1.1 version is found in Volkswagen vehicles today. The software 1.2. platform is being developed for Audi and Porsche cars, while the 2.0 version will be an operating system designed for all VW Group brands.

VW’s software unit Cariad launches app store to bring Spotify, Tiktok and hundreds more to vehicles by Kirsten Korosec originally published on TechCrunch

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Bitwise Industries lands $80M to expand its sprawling software dev business

In 2013, Irma Olguin Jr. — a third-generation Mexican American and the first in her family to go to college — was working on making coding instruction available to disadvantaged members of her community. During her work, she met Jake Soberal, an intellectual property lawyer, who shared Olguin’s desire to leverage the tech industry to effect change at the local level.

Olguin and Soberal started by co-founding Geekwise Academy, a coding and tech skills bootcamp that teaches HTML and JavaScript. Then — to boost the hiring pipeline for Geekwise graduates, and under a newly formed parent company called Bitwise Industries — they launched Shift3 Technologies, a software development house that creates managed services for Salesforce, DocuSign and various other software-as-a-service apps.

As Fast Company notes, Bitwise made headlines in 2019 when it raised $27 million — one of the largest Series A rounds ever secured by a company with a female Latinx founder. Historically, female founders have received just 12% of venture capital investment for their businesses.

Olguin and Soberal’s latest venture through Bitwise is commercial real estate — the two develop and turn previously blighted buildings into coworking spaces, restaurants, theaters and more. Evidently impressed with the three-pronged business model, investors — including Kapor Center, Motley Fool, the Growth Equity business within Goldman Sachs Asset Management and Citibank — poured $80 million into Bitwise this week, bringing the company’s total capita raised to over $200 million.

The new cash will be used to support Bitwise’s expansion into Chicago and the growth of the startup’s other locations, Olguin told TechCrunch in an email interview. She and Soberal plan to eventually bring Bitwise’s businesses into 40 cities nationwide.

“Bitwise Industries’ approach has delivered business value in the form of digital transformation nationwide resulting in unprecedented company growth despite global economic instability,” Olguin said. “This latest raise, led by a group of distinguished investors, acknowledges the role technology plays in driving economic impact in previously underserved communities, and validates our model making it possible for us to roll out our proven approach into other parts of the country.”

It’s tough to capture Bitwise’s business in a sentence — it’s sprawling — but the bulk of the company’s revenue comes from partnering with organizations to build digital solutions. Olguin claims that Bitwise has over 500 customers across 15 states, with dozens of agencies and municipalities, for which it’s providing software implementation services.

For example, Bitwise helps Salesforce and DocuSign customers design, build and deploy apps that streamline the business’s process. The firm also delivers custom app and website design services, plus access to a pool of contract-basis software developers.

Bitwise

Bitwise’s Bakersfield, California building. Image Credits: Bitwise

Bitwise — whose revenue Forbes estimated at $40 million in 2020 — claims to have helped create 15,000 jobs in just one of the cities where it operates. One of its larger initiatives was the “Digital New Deal,” a program in collaboration with California state and local governments to provide students in Bitwise’s apprenticeships the opportunity to work with government agencies on tech-related projects. Olguin says that, to date, Bitwise has renovated over a million square feet of real estate in underserved downtown areas and supported the skilling of over 10,000 people.

“We operate outside major tech hubs to reach people who have been overlooked,” Olguin said. “Bitwise Industries is working to change entrenched bias and make people in positions of power see that sharing privilege actually strengthens companies.”

It’s a noble mission for a commercial venture. To his credit, Olguin doesn’t play down Bitwise’s for-profit status — or its profitability. To the contrary, he spotlights the startup’s many recent strategic acquisitions, which include Salesforce implementation firm Esor Consulting Group, Denver-based software developer Techtonic, DocuSign partner Stria and technical institute the Array School.

“Our funding is driving participation in the digital economy from groups of people who were previously left out of these types of opportunities,” Olguin said. “No one is doing what we are doing at the scale we are doing it across the country.”

Hillel Moerman, a partner at Goldman Sachs, added in an emailed statement: “Goldman Sachs believes that Bitwise has shown a strong track record in training and upskilling talent to successfully find placement in the highly competitive technology labor market. Filling the talent gaps is not only pertinent for the sector, but also key to creating economic opportunity for those in underserved communities and we are excited to support Bitwise in its continued growth.”

Bitwise currently has 10 locations with more than 500 employees, a number that’s triple what it was three years ago. Olguin says that she expects to see similar growth by the year’s end.

Bitwise Industries lands $80M to expand its sprawling software dev business by Kyle Wiggers originally published on TechCrunch

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Mercedes partners with Google to bring Maps and YouTube into its vehicles

Mercedes-Benz and Google have struck a long-term partnership designed to give the German automaker control over its IP and marketplace while offering drivers navigation, maps and YouTube provided by the tech giant.

It’s an unusual deal that attempts to strike a Goldilocks-type balance between offering the Google services consumers want without ceding control over the entire operating system in the car.

“This is a licensing agreement that is a “win-win” for both parties,” Mercedes-Benz CEO Ola Källenius said during a press briefing Wednesday during an event at its research and development center in Sunnyvale, California. “We’re the full architects of the stack.”

Calling it a licensing agreement is accurate, but perhaps downplays the relationship. The partnership will bring the Google Maps platform, Cloud and YouTube into future Mercedes-Benz vehicles equipped with the automaker’s nest-generation operating system called MB.OS. Merecdes will have access to Google’s geospatial offering, including detailed information about places, real-time and predictive traffic information and automatic rerouting. Mercedes-Benz will use Google Maps data to enable assisted driving features such as automatic speed adjustments before intersections, roundabouts or curves.

But as Google and Alphabet CEO Sundar Pichai noted the partnership will extend beyond this.  

“In addition to enabling Mercedes-Benz to design a customized navigation interface, we’ll provide our AI and data capabilities to accelerate their sustainability efforts, advance autonomous driving, and create an enhanced customer experience,” Pichai said in a statement.

Mercedes-Benz has been working on its own MB.OS operating system for several years now. That operating system will launch in the next-generation of Mercedes vehicles (internally called MMA), which are expected to go into production towards the end of 2024.

Mercedes said it has built the Linux-based system on its own, and designed it in a way that can support third-party apps and services like those provided by Google. For instance, Mercedes said it plans to build its own branded navigation using new in-car geospatial data and navigation capabilities from Google Maps Platform.

However, customers won’t have to wait years to experience the first fruits of the partnership. Mercedes said Wednesday that starting today, the automaker will give customers access to initial new features like Place Details, provided by Google. The new feature will be provided via an over-the-air software update.

The precursor to MB.OS will also show up later this year in the new Mercedes E Class. In that system, customers will be able to access apps like Tiktok and Zoom from the car’s infotainment system.

The end game is high stakes. Mercedes wants its MB.OS to be so compelling, drivers no longer opt to use middleware products like Apple CarPlay and Android Auto, which mirrors their smartphones to the car’s infotainment system.

“I mean, that’s that’s the ultimate goal of MB.OS ultimately, it will create a customer experience so there’s no need to plug in your phone.” CTO Markus Schäfer said Wednesday at the event. 

Mercedes partners with Google to bring Maps and YouTube into its vehicles by Kirsten Korosec originally published on TechCrunch

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Code-generating platform Magic challenges GitHub’s Copilot with $23M in VC backing

Magic, a startup developing a code-generating platform similar to GitHub’s Copilot, today announced that it raised $23 million in a Series A funding round led by Alphabet’s CapitalG with participation from Elad Gil, Nat Friedman and Amplify Partners. So what’s its story?

Magic’s CEO and co-founder, Eric Steinberger, says that he was inspired by the potential of AI at a young age. In high school, he and his friends wired up the school’s computers for machine learning algorithm training, an experience that planted the seeds for Steinberger’s computer science degree and his job at Meta as an AI researcher.

“I spent years exploring potential paths to artificial general intelligence, and then large language models (LLMs) were invented,” Steinberger told TechCrunch in an email interview. “I realized that combining LLMs trained on code with my research on neural memory and reinforcement learning might allow us to build an AI software engineer that feels like a true colleague, not just a tool. This would be extraordinarily useful for companies and developers.”

Steinberger teamed up with Sebastian De Ro to found Magic, an AI-driven tool designed to help software engineers write, review, debug and plan code changes. The tool, not yet generally available, can “communicate” in natural language and collaborate with users on code changes, Steinberger claims — operating like a pair programmer that’s able to understand and continuously learn more about the context of both coding projects and developers.

“Magic aims to drastically reduce the time and financial cost of developing software,” Steinberger said. “Giving teams access to an AI colleague who can understand legacy code and help new developers navigate it will enable companies to scale the impact of their current employees and train new employees with less personal coaching. In turn, employees will grow their skills faster and will be able to move among high-impact projects with increased agility.”

Steinberger isn’t revealing much about Magic’s technical underpinnings yet — making it tough, frankly, to compare the tool with the competition. The elephant in the room is the aforementioned Copilot, which was trained on public code to suggest additional lines of code in response to a description of what a developer wants to accomplish — or even explain what a portion of code does.

Steinberger promises that Magic will be able to do the same — and more — thanks to a “new neural network architecture that can read 100x more lines of code than Transformers.” (The Transformer, pioneered by Google researchers, is perhaps the most popular architecture at present for natural language tasks, demonstrating an aptitude not only for generating code but also for summarizing documents, translating between languages and even analyzing biological sequences.) But absent a demo, we have only his word to go on.

“Early releases will need human supervision, but our ultimate aim is for AI to complete large tasks reliably for you, end-to-end, without babysitting,” Steinberger added.

Perhaps the bigger, more existential problem for Magic is that Copilot already has a large following — and substantial corporate backing. It’s been used by over 1.2 million people, and GitHub is aggressively positioning it as an enterprise-scale tool, recently launching a corporate-focused plan called Copilot for Business.

Copilot’s traction might’ve contributed to the demise of Kite, a startup that was developing an AI-powered coding assistant not unlike Magic’s. Despite securing millions in VC backing, Kite struggled to pay the bills, running into headwinds that made finding a product-market fit impossible. Training AI is notoriously expensive; Kite founder Adam Smith estimated that it could cost over $100 million to build a “production-quality” tool capable of synthesizing code reliably.

“Within AI more broadly, training state-of-the-art models remains expensive,” Steinberger admitted. “This raises the bar for new entrants like us.”

Legal issues might stand in the way of Magic’s success, too — although some have yet to be resolved in the courts. Like most AI-powered code-generating systems, Magic was trained on publicly available code, some of which is copyrighted. The company argues that fair use — the doctrine in U.S. law that permits the use of copyrighted material without first having to obtain permission from the rights holder — protects it in the event that Copilot was knowingly or unknowingly developed against copyrighted code. But not everyone agrees. Microsoft, GitHub and OpenAI are being sued in a class action lawsuit that accuses them of violating copyright law by allowing Copilot to regurgitate sections of licensed code without providing credit.

Some legal experts have also argued that AI-powered coding systems could put companies at risk if they were to unwittingly incorporate copyrighted suggestions from the tool into their production software.

To these questions, Steinberger answered that Magic is taking steps to prevent copyrighted code from showing up in the tool’s suggestions and citing the source of suggested code where possible. (GitHub has taken similar steps with Copilot, filtering its output in some cases and experimenting with code and project citation.) Steinberger says that customers’ data will not be swept up for Magic’s proprietary AI training — excepting “personalized systems” used by individual customers.

“We will launch with a feature that flags any potential license issues with generated code to help the user make an educated decision on what to do with it,” he said, clarifying the earlier point.

Steinberger argues that, in any case, tools like Magic — and rivals such as Tabnine, Mutable and Mintlify plus open source projects like BigCode — are a net good for both developers and their employers. He pointed to statistics showing that skilled software engineers — who are increasingly hard to come by — cost around $150,000 per year (and up) and that teams spend upward of 25% of their time integrating and maintaining their development toolchains.

Not all programmers are likely to agree, particularly those affected by the tech industry’s recent mass layoffs. But as Steinberger notes, there’s a “tremendous” level of excitement about — and investment in — generative AI. It’s clear that it’s here to stay, in other words, for better or for worse.

“The software industry has a never-ending hunger for more talent. Every organization and product would benefit from more and better software shipped faster and cheaper,” Steinberger said. “Even with all the dev tooling we have available today, output is limited by human thinking, typing, and communication speed. Giving teams access to an AI colleague who can understand legacy code and help new developers navigate will enable companies to scale the impact of their current employees and train new employees with less personal coaching. In turn, employees will grow their skills faster and will be able to move among high-impact projects with increased agility.”

Magic, which is pre-revenue with a distributed workforce of six people, plans to launch its product in the near future — Steinberger wouldn’t say exactly when. The short-term goal (i.e., within the next year) is to grow the team to 25 people with a focus on the engineering, product and go-to-market sides.

To date, Magic has raised $28 million.

Code-generating platform Magic challenges GitHub’s Copilot with $23M in VC backing by Kyle Wiggers originally published on TechCrunch