After Roe’s reversal, founders of women’s health startups prepare for battle

Advocates and organizers had been preparing for Roe v. Wade to be overturned since the U.S. Supreme Court draft decision leaked in early May. But Nadya Okamoto, co-founder of period care company August, still felt heartbroken when the decision became official in late June.

“One of the things that always made me passionate about policy and legislative action was that it always felt so permanent,” she told TechCrunch. “For Roe to be rolled back went against many of the beliefs I had about change and social progress.”

Activists like Okamoto are now on the front lines of once again protesting for an individual’s right to an abortion. As a startup founder, Okamoto said she’s ready to use her platform and position to help educate and influence others — and she’s not alone.

Many women founders running reproductive health companies are taking battle stances as the U.S. slips into a reality worse than what existed pre-Roe. Come November, 26 states face a near-total abortion ban.

The decision to reverse Roe also paves the way for the erosion of other rights, such as those that gave the right to interracial and gay marriage.

For this reason, TechCrunch conducted another vibe check, this time with the women founders taking themselves and their companies to the front lines of the fight for abortion. Okamoto and some of the others admit they never thought they would see themselves here; at the same time, it feels as if they’ve been preparing their whole life to take up this fight.

“It’s a privilege to have a platform,” Okamoto said. “That privilege should be reconciled by using said platform to do something important.”

Amazon’s drone delivery is coming to Texas

Drone delivery deployment happens in fits and starts. There are, after all, a number of hurdles – both regulatory and residential — a company has to clear. That’s why all parties tend to be slow and deliberate. While such slowed innovation isn’t always a sign of struggle, firms have certainly dealt with those, as well — including Amazon, which initially stumbled out the gate.

Almost exactly a month after announcing its plans to bring deliveries to the Central Californian town of Lockwood, the company is unveiling another expansion. Later this year, Amazon will be adding Texas A&M University’s home base of College Station to the list. The company lists partnerships with the school and city as a key reason for the choice.

“Amazon’s new facility presents a tremendous opportunity for College Station to be at the forefront of the development of drone delivery technology,” said Mayor Karl Mooney says in an official release. “We look forward to partnering with Amazon and Texas A&M and are confident that Amazon will be a productive, conscientious, and accountable participant in our community.”

There’s not much in the way of additional details here, but the past several months have found Texas becoming something of a hot bed for these very early stage drone deliveries. In March, Israeli startup Flytex announced that it’s piloting deliveries in Granbury, a town of 10,000 located in the greater Dallas/Forth Worth metroplex. The following month, Alphabet-owned Wing expanded its operations into the nearby towns Frisco and Little Elm.

While Amazon appears to lack Wing’s head start, the company has one very import thing the others don’t: a massive built-in retail operation.

A ransomware attack on a debt collection firm could be one of 2022’s biggest health data breaches

A ransomware attack on a little-known debt collection firm that serves hundreds of hospitals and medical facilities across the U.S. could be one of the biggest data breaches of personal and health information this year.

The Colorado-based Professional Finance Company, known as PFC, which contracts with “thousands” of organizations to process customer and patient unpaid bills and outstanding balances, disclosed on July 1 that it had been hit by ransomware months earlier in February.

PFC said in its data breach notice that more than 650 healthcare providers are affected by its ransomware attack, adding that the attackers took patient names, addresses, their outstanding balance and information relating to their account. PFC said that in “some cases” dates of birth, Social Security numbers and health insurance and medical treatment information were also taken by the attackers.

In a separate filing with the U.S. Department of Health and Human Services, PFC confirmed that over 1.91 million patients are affected by the cyberattack.

At least two healthcare organizations listed as affected by PFC have issued their own data breach notifications. Bayhealth Medical Center in Delaware said 17,481 patients were affected by the PFC breach, while Coleman County Medical Center in Texas disclosed the breach to 1,159 patients.

The attack on PFC is second only in size to a March 2022 data breach at Shields Health Care Group, a medical imaging company with facilities across New England, affecting an estimated two million patients.

PFC chief executive Michael Shoop did not respond to our email asking for information about its ransomware attack. Instead, the company’s general counsel Nick Prola reiterated its boilerplate statement in an email but declined to answer our specific questions, including why it took the company four months to notify affected healthcare providers and whether the stolen data was encrypted.

It’s not the first time a debt collection firm has been targeted by cybercriminals and resulted in a massive theft of personal information. At least 20 million patients had data stolen when AMCA, a medical debt collector contracted with laboratory testing giants LabCorp and Quest Diagnostics, was hit by a data breach. AMCA subsequently filed for bankruptcy following the breach.


You can contact this reporter on Signal and WhatsApp at +1 646-755-8849 or zack.whittaker@techcrunch.com by email.

Roe reversal weighs heavily on emerging tech cities in red states

On June 24, Khadijah Robinson planned to offer a woman a job.

As founder of the Atlanta-based tech startup Nile, she spent three years scaling the platform, which connects consumers to Black online businesses. That Friday, she was thrilled to finally find someone willing to relocate from California to Georgia to help grow the company.

By early afternoon, the offer was on hold. The U.S. Supreme Court had overturned Roe v. Wade just a few hours before and that worried Robinson. Although Atlanta is a blue tech city — meaning its politics skew liberal — it sits within the overall more conservative red state of Georgia, whose governor is already making plans to implement abortion restrictions in the state. Robinson spent the rest of the day reassessing her new reality.

“As a founder and CEO, I now have to think long and hard about asking women to relocate to a state that will likely legislate against them very soon,” she tweeted. “I’m so tired.”

“It’s going to be hard to ask women to come to a place where they might very well be risking their lives.” Nile founder Khadijah Robinson

TechCrunch conducted a vibe check with founders like Robinson who are based in blue emerging tech cities situated within red states. Historically, technology hubs leaned liberal and were nested in reliably blue states like California or New York. That started to change these past five years, which saw places like Austin, Miami and Atlanta become hot spots for tech talent — a trend that only accelerated as remote work swept the nation.

The recent increase in conservative legislation and political division could again affect the landscape, deterring skilled workers from migrating to these hubs and causing an exodus of talent from red states. In particular, the reluctance of women to relocate to blue cities within red states could contribute to a reversal in overall diversity within certain sectors.

Notch will sell you insurance in case your Instagram gets hacked

Getting hacked sucks. It’s even worse if you’re a digital creator whose social media accounts literally pay your bills. When creators get hacked, it can mean that they aren’t able to post sponsored content, earn payments from badges or operate their Instagram shops — it’s debilitating, like if a chef broke their arm and had to cook with one hand.

The Israel-based startup Notch is trying to see if insuring creators against Instagram hacks could offer a solution. Starting at $8 a month, creators can sign up for Notch’s Instagram account insurance, which means that if they get hacked and lose access to their account, the startup will pay them a stipend and help them regain control of their page.

TechCrunch reviewed a sample insurance policy, which quoted a $459 annual fee (or about $38 a month) for insurance that pays out $244 for each day that a creator can’t get into their account after a hack. These daily reimbursements kick in after a 48 hour waiting period and max out at $22,000 (or 90 days) of payments per year.

Notch uses a number of metrics to determine the nature of a creator’s policy.

“We look at the follower count, engagement, where the audience is from, the vertical where the influencer works, how many posts per month that person usually uploads, how many of them are sponsored posts…” CEO Rafael Broshi explains. With that information, Notch can estimate how much sponsored content a creator posts a month, and how much money someone of their caliber would make off of each post. Then, the company can calculate a monthly fee for coverage.

This isn’t an exact science, though — not all influencers are created equal, and the same level of followers or engagement may translate differently across various audiences. Plus, there’s no standardized base pay for a brand deal so it’s possible Notch might over- or underestimate a creator’s income.

A key feature of the policy is that it only covers hacks. Some creators, especially those from marginalized communities, face targeted harassment on Instagram, which sometimes means that bad actors will mass-report their account for no reason, causing them to get banned or suspended. In these cases, whether a ban is deserved or not, Notch will not cover a creator’s loss of income. 

“We’ll probably issue an add-on to the policy in the near future, which covers suspensions as well,” Broshi said. “We don’t currently cover those things, mainly because it’s very, very difficult to really build a product that provides value […] That’s why we went towards the hacking part, where we believe we will be able to help.”

Notch is not affiliated with Instagram, but Broshi says that this is normal for insurance companies.

“Car insurance companies don’t usually have any connection to the car manufacturer,” he told TechCrunch. Currently, the product is available in Arizona, Florida, Illinois, Tennessee and Texas — each state has different regulations regarding insurance products, so approval in any individual state will be a different process.

To be eligible for these payouts, creators need to turn on mutli-factor authentication (MFA). But many types of MFA exist, and the policy doesn’t offer more specifics. Some cybersecurity experts advise against using SMS texts as a second layer of security, since a SIM swapping hack (someone impersonating you to your phone carrier to take over your SIM card) could render you powerless against fraudulent log-in attempts.

Insurance policies aside, it’s always a good time to take extra steps to protect your online security and digital privacy, especially if you’re someone whose income is directly tied to your internet presence. Notch doesn’t want you to get hacked because then they’d have to pay you, but you also don’t want to get hacked because… it would suck. Speaking of which, don’t even try to engineer a fake hack to get your daily payout — Notch’s contract prohibits it.

So far, Notch has raised $7 million in an extended seed round led by Lightspeed Ventures. Longtime creators like Nas Daily and Casey Neistat are investors as well, which is an important vote of confidence for the company, since none of its founders have experience working in the creator economy. Of the three founders, Broshi is a former investor, CPO Elool Jacoby was a senior product manager at SimilarWeb and CTO Yuval Peled was a software engineer.

Notch only just launched this month, so we haven’t yet witnessed how they may be able to help a creator through a hack. But before launch, Notch helped some creators with account retrieval, which is why there are testimonials on the company’s website.

As with any startup, you don’t want to be the guinea pig — but, for big enough creators, a monthly payment could be worth the peace of mind it brings.

Behind the scenes of Waymo’s worst automated truck crash

The most serious crash to date involving a self-driving truck might have resulted in only moderate injuries, but it exposed how unprepared local government and law enforcement are to deal with the new technology.

On May 5, a Class 8 Waymo Via truck operating in autonomous mode with a human safety operator behind the wheel was hauling a trailer northbound on Interstate 45 toward Dallas, Texas. At 3:11 p.m., just outside Ennis, the modified Peterbilt was traveling in the far right lane when a passing truck and trailer combo entered its lane.

The driver of the Waymo Via truck told police that the other semi truck continued to maneuver into the lane, forcing Waymo’s truck and trailer off the roadway. She was later taken to a hospital for injuries that Waymo described in its report to the National Highway Traffic Safety Administration as “moderate.” The other truck drove off without stopping.

While Waymo’s autonomous semi truck was not at fault in the hit and run, the incident highlights gaps in reporting mechanisms, and raises questions about how ready the public and law enforcement are to cope with heavy, fast-moving vehicles that have no human driver.

The stakes for the autonomous trucking industry, which is still in its infancy, couldn’t be any higher. One crash, even if the company is not at fault, could tarnish the public’s image of the technology. 

Waymo’s trucking origins

Waymo started testing its driverless technology with semi trucks in 2017, beginning in California and Arizona. At the time, it was in the middle of an epic legal battle with Uber over technology allegedly taken from Waymo by engineer Anthony Levandowski, and subsequently purchased by Uber as part of self-driving truck startup Otto.

Waymo’s self-driving trucks, which are part of a delivery and logistics division the company calls Waymo Via, rely on similar technologies to its robotaxis: a suite of sensors, including cameras, radars and lidars, and powerful on-board computers. All have qualified truck drivers — known as autonomous specialists — in the driver’s seat.  

In 2018, Waymo began hauling freight in Georgia, and it branded its delivery business Waymo Via in 2020. It then expanded into New Mexico and Texas, and inked deals with logistics companies like J.B. Hunt, UPS and C.H. Robinson. Earlier this month, it committed to a long-term strategic partnership with Uber and announced a pilot delivery program with home goods e-tailer Wayfair.

That pilot is due to start in July on the same stretch of I-45 highway where the May crash occurred. 

Inside the crash

Using reports from local police and the Department of Transportation, and data supplied by Waymo to NHTSA, TechCrunch has attempted to reconstruct the worst self-driving truck crash on U.S. roads to date.

According to Waymo, the Peterbilt 579 truck was not carrying freight for any customers or partners; it was conducting “standard” testing with a weighted load.

Behind the wheel was a 40-year-old autonomous specialist with a decade of truck driving experience; there was also a software operator on board. Like many workers in Waymo vehicles, both were actually employed by Transdev, a multinational transit and mobility company.

Although the ultimate aim of automated trucks is to eliminate, or at least greatly reduce, staffing costs, self-driving truck startups today operate with a safety driver and an engineer or technician on board.

Waymo reported that its truck was driving in autonomous mode at 62 miles per hour, slightly below the speed limit, when the other truck entered its lane and forced it off the road. 

waymo-truck-crash

A Waymo Via self-driving truck was hit by another semi truck in May 2022. Image Credits: Ennis Police Department

Waymo told TechCrunch that the safety operator did not take control of the truck from its autonomous system. 

“The technology was not a factor, as this collision was caused by a human driver of another vehicle when they crossed the lane line and collided with the cab of Waymo’s vehicle and continued driving,” spokesperson Katherine Barna wrote in an email.

Ennis PD photos, obtained under public records laws, show the Waymo truck and trailer by the side of the highway. They appear to have been prevented from sliding onto a parallel suburban road by a crash barrier. An Ennis police officer noted the truck itself sustained only minor damage: one picture shows damage to the truck’s lidar laser-ranging sensor.

waymo-truck-crash-lidar

Photo of Waymo Via’s lidar sensor, which was damaged in a crash in Texas. Image Credits: Ennis Police Department

The driver, however, was taken to a nearby hospital with unspecified, moderate injuries. The attending officer classified the incident as a hit and run. Waymo told TechCrunch that it understands the driver is doing well, following their injury. The driver did not respond to a request from TechCrunch for comment.

Because the system was active during at least some of the 30 seconds preceding the collision, Waymo was required to report it to NHTSA, to comply with the agency’s Standing General Order on Crash Reporting for automated vehicles.

Gaps in the system

There are no checkboxes on a Texas Department of Transportation crash report to record whether the vehicles involved are operating with full or partial automation, and that information was not recorded in the narrative section of the Waymo crash report.

Ennis PD Detective Paul Asby, who later investigated the incident, told TechCrunch that he did not know the truck was operating autonomously at the time of the collision.

At the hospital, the Waymo driver told police the hit-and-run vehicle belonged to Helwig Trucking, a local carrier with about 15 trucks. (Waymo also confirmed that the truck’s cameras captured enough details to identify the other vehicle.) Helwig did not respond to a request for comment.

The driver left her phone number with the police and was released from the hospital, and the Waymo truck was towed away. Detective Asby was assigned to the case, and quickly established that the crash was the fault of the Helwig driver. He contacted the company to get its side of the story, and its insurance details. But when it came to Waymo, Asby met a wall of silence.

“I was going to speak to the driver because she was taken to the hospital but I’ve tried to contact her cell phone and it says it’s not a valid number,” he said. “The same thing for the passenger who was in there with her.”

Subsequent calls to Waymo itself went unanswered. “They never did return my calls. I inactivated the case, but the insurance information is in there if they want it,” he says. “Maybe they’re so rich they don’t care.” 

Waymo told TechCrunch that it is not aware of any attempt by Ennis PD to contact it for information, and that it did not have any need to contact the department itself. 

How it’s going

The Ennis crash is not the only one to have involved a Waymo semi truck. In February, a similar Waymo Peterbilt 579 traveling southbound on Interstate 10 near Sacaton, Arizona, was struck by a box truck traveling in the adjacent lane, and which had just also hit a motor coach. The Waymo vehicle was traveling 50 mph in a 75 mph limit zone. TechCrunch was not immediately able to source a police report detailing the crash; there were no reported injuries.

If Waymo had not been required to report the crashes to NHTSA, there is a chance they might never have come to light. The official crash reports gathered by Texas, which has welcomed multiple self-driving truck operations to its highways, appear insufficient to fully record incidents involving driverless vehicles. Local law enforcement has historically been similarly ill-equipped to deal with driving systems instead of driving humans. 

Waymo is trying to close those gaps, says Barna. “Waymo has built the Waymo Driver to interact with First Responders; and has worked closely with public safety officials to ensure the safe introduction of our technology in every market that we operate in,” she told TechCrunch.  “We have a team with decades of law enforcement experience that has provided training to hundreds of officers and firefighters in California, Arizona and Texas detailing best practices for safe interactions with Waymo vehicles.”

“We’ve got a mountain of work to do integrating these things into society,” said Steve Viscelli, a sociologist at the University of Pennsylvania who studies trucking, and acts as an advisor to Aurora’s self-driving truck effort. “We need to talk a lot more about what they mean for supply chains, for workers and for the highway. There are a lot of people who are going to do stupid and aggressive stuff around them because they don’t like self-driving vehicles.”

Waymo has told the U.S. Department of Transportation that it has 47 trucks, which have driven more than 1.6 million miles. It would not disclose to TechCrunch how many of those miles were driven under some level of automated control.

Automated trucking companies have “got the basic driving stuff down,” says Viscelli. “It’s what happens with the family on vacation and the tire’s off, or when there’s construction that changes the shape of the road, or debris on the highway. It’s when you have confidence in those issues that’s going to determine when they’re on the road. But I would not be surprised to see trucks without drivers on lanes next year.”

Austin-based True Wealth Ventures raises second fund to back women-led startups

Sara Brand and Kerry Rupp of Austin, Texas-based True Wealth Ventures defy many trends in the venture capital world. The investors, who raised $19.1 million for their first fund in 2018, have just closed on $35 million in new capital for their firm’s second fund.

In an ecosystem where women make up just 2.4% of partners at venture firms and considering that the vast majority of first-time funds never actually make it to closing, Brand and Rupp are used to beating the odds. Their investment approach is just as unique in the VC world as their backgrounds: they invest exclusively in seed-stage startups led by women, which they define as having at least one woman with “signifcant decision-making power” on the founding or executive team of the company.

Their strategy is a rarity in light of the fact that less than 2% of venture capital funding went to all-female founding teams last year, marking a five-year low. True Wealth’s portfolio from Fund I contains companies including cognitive health startup BrainCheck and kelp and seaweed producer Atlantic Sea Farms. 

“We were the largest fund ever raised with an explicit gender diversity strategy for our Fund I,” Rupp said. “We were really early to the market, and when we had that kind of organic press back in the day about the fact that we are writing checks to women entrepreneurs, and how rare that was, we just had a firehose of incoming deal flow that lasted for years, frankly.”

In addition to its focus on women-led companies, True Wealth Ventures also only invests in companies they believe are making a positive impact in either health or sustainability, Brand and Rupp told TechCrunch. The firm has a zero loss ratio from Fund I, the pair added, meaning all of the companies it has invested in are still operational — no small feat for a group of early-stage startups that have had to weather a global pandemic.

For their second fund, Brand and Rupp will largely continue with the same strategy from Fund I, sticking to making about 15 investments in total after making 12 out of the first fund, they said.

One key difference with this new fund, they continued, is their plan to write larger checks this time around — up to $1 million per investment compared to the ~$500,000 average investments True Wealth’s first fund made. 

“Now, we want to be able to write up to a million dollars [per] first check, because we do usually lead the deals, take a board seat, and take a big role. We have a lot of conviction around our investments and have a relatively concentrated portfolio,” Brand said.

Fund II has already invested in three companies since its first close in May last year: trucking and aerospace company Aeromutable, mobility device manufacturer De Oro Devices and health and nutrition platform Flourish, according to Rupp and Brand. Of those companies’ six total co-founders, all of whom are women, two are Black, two are LatinX and one is Native American, they added. 

True Wealth also plans to bring on its first full-time employee outside of Rupp and Brand themselves, an associate who will start next month, according to the partners. Its team already leverages its network of venture fellows and interns to help with sourcing and diligence, they added.

While they originally set out exclusively focused on backing women founders, the duo has found a “secondary mission” in educating women limited partners, who make decisions largely on behalf of family offices and foundations, on how to invest in venture capital. Over 80% of the LPs in both funds are women, Brand explained.

“We actually did a poll of our LPs and found out that of those women, the vast majority had never invested in a venture capital fund before, and the vast majority of those women had never been invited to invest in a venture fund before,” Brand said. “We realized, in retrospect, that seems obvious with the lack of women in VC funds making investment decisions, and the lack of women entrepreneurs getting VC dollars. This is just a very male-dominated ecosystem.”

The firm hosts educational events in group settings to educate LPs about venture capital’s risk profile, capital costs and structure, as well as to introduce those investors to their portfolio founders.

“We think that diversity of the LP base feeds into our priorities and what our investors care about, and the solutions we want to see in the world and therefore what we invest in … When women come into increased wealth, they reinvest that into their family and community’s health, education and welfare at twice the rate of men,” Rupp explained.

The Boring Company wants to dig a tunnel under Tesla Gigafactory Texas

Elon Musk’s The Boring Company has filed an application with the city of Austin to build a tunnel under Tesla’s Gigafactory Texas in Austin. The application, which Electrek first reported on, does not state what Tesla intends to do with the tunnel.

The application was filed on June 21, 2022, and although it doesn’t specifically mention Giga Texas, the address on the filing is listed as 12733 Tesla Road, which is located at the north end of the complex.

The project, called the “Colorado River Connector Tunnel,” involves a “private access tunnel along with associated improvements,” so perhaps Musk wants a secret road to enter his giant factory. Or maybe he’s looking for a way to travel between companies with stealth.

After raising a $675 million funding round, The Boring Company (TBC) recently moved its headquarters to Pflugerville, just northeast of Austin, and the company has reportedly been in talks about certain projects in Texas. This is, however, the first time TBC has filed a building permit application.

The filing contains little information, but it does suggest that the tunnel length will be about two miles and located in an area that’s outside Austin’s city limits but where the city can still regulate activities.

In May, TBC got approval from the city of Kyle, which is south of Austin, to begin feasibility studies on an underground pedestrian tunnel there that would link a retail development with a housing development.

Earlier this month, TBC received approval to expand its tunnels underneath Las Vegas into a 34-mile network. This builds off the company’s “loop” in Vegas, which is a system of tunnels in which Teslas move people between stations to avoid surface traffic — like a subway but bougier.

Tesla sued by former workers for allegedly violating federal law during ‘mass layoffs’

Two former Tesla employees filed a lawsuit against the EV maker Sunday alleging that the company did not provide the 60 days of advance notice required by federal law during a recent round of layoffs.

It’s the latest in a recent spate of suits brought by former employees against Tesla, but the first filed since CEO Elon Musk’s June 2 warning that a coming economic downturn would force the company to lay off 10% of its salaried workforce.

The company has since revised its target to just over 3%, according to Musk in a Bloomberg News interview at the Qatar Economic Forum last week.

The suit seeks class action status for Tesla employees laid off in the U.S. in May or June without the 60-day advance notice required by the Worker Adjustment and Retraining Notification Act, as well as pay and benefits for the 60-day notification period.

Musk said in internal emails early this month that he had a “super bad feeling” about the economy. Tesla remains the global market leader in EVs, but Volkswagen is poised overtake the Austin, Texas-based manufacturer in 2024, according to a Bloomberg Intelligence report released last week.

John Lynch and Daxton Hartsfield, the pair of workers who filed the lawsuit in the U.S. District Court for the Western District of Texas, were let go mid-June, along with more than 500 other employees, from Tesla’s Gigafactory 2 in Sparks, Nevada, according to the complaint.

The complaint also said that Tesla’s failure to provide advance written notice has had a “devastating economic impact” on the terminated workers. According to the suit, the company offered some employees one week of severance.

“Instead, Tesla has simply notified the employees that their terminations would be effective immediately,” the filing said. “Tesla has also failed to provide a statement of the basis for reducing the notification period to zero days advance notice.”

The automaker and its subsidiaries employed just under 100,000 workers in 2021, according to its annual filing. That includes headcount at its factories and facilities in Austin and Sparks, Nevada, as well as in Buffalo, New York, Fremont, California, Berlin and Shanghai.

The company did not return immediate request for comment Tuesday.

Down bad

Welcome back to Chain Reaction.

Last week, we talked about layoffs and the Winklevoss rock gods. This week, we’re looking at a new layer of crypto doom and gloom.

Get this newsletter in your inbox every Thursday by subscribing on TechCrunch’s newsletter page.


crash redux

We’ve talked crypto crashes a couple times already in the short life of this newsletter but the sell off this week has spooked crypto insiders in a very different way. Things are happening so quickly right now that even seasoned crypto investors seem to be feeling uneasy about this one.

While crypto winters have come before, they’ve never aligned with warning signs of a broader prolonged recession. Things have already plunged so quickly at the signal of a recession that insiders fear a lengthy bear market could hit crypto far more brutally than expected — tearing tokens to lows far below the highs of the 2017 bull run.

This means rough things for tokens, but also more brutal realities for the entire ecosystem.

This week, we saw the interconnectedness of major institutions as crypto lending protocol Celsius stuttered and brought down Ethereum prices with it as investors feared a price collapse brought on by reportedly over-leveraged players like 3 Arrows Capital. Despite the decentralization ethos of crypto, the potential for cascading failures seems every bit as possible for the crypto world as it does for traditional finance markets.

If things do fail harder and faster than before, the question is how quickly young startups and crypto communities can adjust to shifting fortunes. Few companies have to deal with the stressed of both crypto and public markets like Coinbase which laid off more than 1,100 people this week, but plenty of startups raised mega-rounds in 2021 to theoretically future-proof their companies. For DAOs and protocols with treasuries sitting in ETH, many have seen their budgets for community efforts and stretch projects decimated, threatening their survival.

Without the promise of riches or with reduced interest in blockchain-based exclusivity, where will consumer demand go? Will governance communities grow more self-motivated and more concerned about short-term goals when their groups have gone from being filled with millionaires to seeing their profits disappear into thin air? How much worse will things get?


the latest pod

Somebody call 911. Crypto lending protocol Celsius isn’t fire burning, but it did freeze all customer withdrawals this past weekend, citing concerns about its own liquidity amid “extreme market conditions.” Since then, the firm, which claimed to have 1.7 million users before the pause, has seen its own token plummet (and then recover, and plummet again), and sent the already-struggling crypto markets into a tailspin. We talked through what went wrong on the Celsius network and how it’s surprisingly intertwined with the rest of crypto.

Regulators are seizing this moment in the downturn, while web3 is already looking pretty shady and investors are pissed about losing money, to crack down on certain firms in the space. From BlockFi to Binance.US, some of the biggest names in crypto are facing lawsuits and/or fines for their practices. 

The tech billionaire bros are still alright, though, for better or for worse. Block’s Jack Dorsey announced this week that he’s ready to cancel web3 and move on to his vision of the internet, which he’s calling “web5.” Elon Musk weighed in with a particularly creative proposal too, which we discussed in this week’s episode. 

Our guest, Aaron Levie, built a successful SaaS business in Box, and now he’s on a mission to beef – respectfully – with web3 stans all over Twitter. Levie explained to us how he manages to walk the fine line of being a crypto critic without landing in the bulls’ bad books. 

Subscribe to Chain Reaction on Apple, Spotify or your alternative podcast platform of choice to keep up with us every week.


follow the money

Where startup money is moving in the crypto world:

  1. Indonesian fintech platform Flip raised a $55 million Series B extension led by Tencent with participation from Block (formerly known as Square) and existing backer Insight Partners.
  2. NFT infrastructure startup NFTPort raised a $26 million Series A round led by Atomico.
  3. ScienceMagic.Studios, a digital asset-focused brand studio, bagged $10.3 million in pre-seed investment from investors including Liberty City Ventures, Digital Currency Group and Coinbase Ventures.
  4. A co-founder of Words With Friends raised $46 million in a Series A round led by Paradigm for their web3 gaming startup, The WildCard Alliance.
  5. Molecule, a platform where DAOs can back medical research projects, secured $13 million in seed funding led by Northpond Ventures.
  6. Metaverse play-and-earn company Atmos Labs brought in $11 million in a seed round led by Sfermion.
  7. Creator-focused web3 sitebuilder Tellie nabbed $10 million in Series A funding from investors including Malibu Point Capital, Galaxy Digital and Dapper Labs.
  8. Crypto payment platform Nume raised $2 million in a pre-seed round led by Sequoia India.
  9. Dutch fintech Bits of Stock, which offers crypto rewards, raised €4.2 million in its seed round from Keen Venture Partners, Yellow Accelerator and others.
  10. Decentralized trading infrastructure startup Orderly Network raised $20 million in Series A funding from investors including ​​Three Arrows Capital, Pantera Capital and Dragonfly Capital.

the week in web3

Crypto markets were down pretty bad last week (though admittedly, it’s only been downhill since then). But temperatures were up in Austin, Texas, as 20,000 people in the crypto community came together to discuss how to navigate their industry looking like it might go up in flames. Anita had the chance to attend the conference, so she’s back with some thoughts from the field: 

I have a lot of friends and acquaintances who aren’t nearly as deep in crypto as I am, and one question I’ve heard over and over again these past few weeks is whether this downturn in the digital asset markets is the death knell for web3. In other worlds, now that the music has stopped, is the party actually over?

I shared my two cents/two Satoshis on the matter on Los Angeles public radio this week (check it out), but I want to use this space to highlight some thoughts I have after hearing from folks in the industry at Consensus. In short, I don’t think this is the end of crypto by any means, but it’s certainly going to be a tough time for the space. 

On a panel about how to invest in web3 in a turbulent market, Arca’s Chief Investment Officer Jeff Dorman made an interesting point about what makes web3 so different from most other sectors, at least as they’re defined by the financial markets. 

“I don’t even think digital assets [are] an asset class. I think it’s a technology that is now wrapping all asset classes,” Dorman said. In tradfi, investors can specialize based on products (e.g. debt, equity, derivatives) or sectors (e.g., industrials, retail, real estate). But in web3, those categories haven’t been clearly defined, because blockchain technology has been used in so many different ways, from file storage, to selling digital art, to tracking peer-to-peer money transfers.  

That’s part of why I think we can’t group “crypto” or “web3” or “blockchain technology” in the same bucket – even those three terms all have slightly different meanings. Perhaps that’s also why the vibe at Consensus felt puzzlingly positive despite the market turmoil. Each project is so different, and each builder has conviction in why their own use case for the blockchain makes sense and isn’t like all those other projects that are losing value or seem like scams. At a time of so much uncertainty, the most important thing reporters and analysts can do is look at this industry with nuance, and evaluate each project case-by-case. It’s going to be a wild ride, but I believe at least some parts of web3 are here to stay, and I see it as my job not only to shed light on what applications of this technology are working and not working but also to try and make sense of why.


TC+ analysis

Here’s some of this week’s crypto analysis you can read on our subscription service TC+ (written by TC’s Jacquelyn Melinek): 

As Celsius accelerates the crypto sell-off, who pays the price?
This week, the global crypto market capitalization fell below $1 trillion for the first time since January 2021 after one of the largest centralized crypto lenders, Celsius, landed in hot water after it paused all withdrawals, swaps and transfers for users. The driver behind its freeze isn’t completely clear, yet, but it resulted in another bank-run scenario similar to what we saw last month with the UST and LUNA situation – and it’s causing another drop in the crypto market. 

Hedge funds plan to buy more crypto amid a down market and potential regulatory clarity
What seemed like a rare sector is now gaining popularity as the number of specialized crypto hedge funds has grown to over 300 globally, according to PwC’s Global Crypto Hedge Fund report. These funds are on “the search for alpha” to beat the benchmarks and are willing to try something new and different, John Garvey, global financial services leader principal at PwC, said to TechCrunch. Even though markets are highly volatile, two-thirds of all hedge funds surveyed that are currently investing in the space plan to deploy more capital into the market by the end of 2022, it said.

As DAOs continue to blossom, here’s how to keep yours from wilting
This past year has been one big growth spurt for DAOs (decentralized autonomous organizations) but not everyone in the space is convinced that they’re being formed properly or in a way that ensures success. But what happens when the hype fades? People stop voting, treasuries can wither and abandoned, dead communities turn into “DAO graveyards.” To prevent that from happening, some say there needs to be a restructuring of the way DAOs are formed.


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Lucas and Anita