All hail the Unicorn Kingdom?

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Cool or cringe?

“Welcome to the Unicorn Kingdom” is the slogan of a new U.S. campaign aimed at promoting the U.K. as “a place with all the right ingredients for tech success.”

When British prime minister Rishi Sunak referred to the new tagline at an event recently, some called it cringe. However, others beg to disagree.

To get biased national pride out of the equation, I reached out to Hoxton Ventures partner Hussein Kanji for two reasons: He’s London-based and a self-described “proud American.”

All hail the Unicorn Kingdom? by Anna Heim originally published on TechCrunch

Virgin Orbit says issue with rocket’s second stage led to mission failure

Virgin Orbit, the unconventional rocket company founded by billionaire Sir Richard Branson, said its mission failure earlier this week was due to an anomaly with the rocket’s second stage.

Although the LauncherOne rocket managed to reach space and achieve stage separation, the anomaly prematurely terminated the first burn of the upper stage’s engines, at an altitude of around 180 kilometers, Virgin said in a statement. Due to this engine anomaly, both the rocket components and payload fell back to Earth and were destroyed upon atmospheric reentry.

The mission payload consisted of nine small satellites, including two CubeSats for the United Kingdom’s Ministry of Defense, a first test satellite from Welsh in-space manufacturing startup Space Forge and what would’ve been Oman’s first earth observation satellite.

Virgin Orbit engineers and board members have already begun an analysis of mission telemetry data to identify the cause of the anomaly. The company added that a formal investigation into the source of the failure will be led by Jim Sponnick, former VP for the Atlas and Delta launch system programs at United Launch Alliance, and Virgin Orbit’s chief engineer, Chad Foerster.

The company said the investigation will be complete, and corrective measures implemented, before LaucherOne’s next flight from California’s Mojave Air and Space Port. But how long that will take, and when we’ll next see Virgin’s Boeing 747 and rocket system take to the air again, is far from clear. Virgin said it was in talks with the U.K. government to conduct another launch from the country’s new Space Port in Cornwall for “as soon as later this year.”

That degree of uncertainty is never good for a public company, but it’s likely especially straining for Virgin Orbit, which is facing dwindling cash reserves and a pressing need to ramp up launch cadence to boost revenues. As of September 30, the company had $71 million in cash on hand; by the end of the year, Virgin got an injection of $25 million from Richard Branson’s Virgin Group and $20 million from Virgin Investments Ltd. But these funds will do little but delay the inevitable if Virgin doesn’t return to launch soon.

Virgin Orbit says issue with rocket’s second stage led to mission failure by Aria Alamalhodaei originally published on TechCrunch

Atoa helps UK merchants cut down on card processing fees

Visa and Mastercard payments are convenient for customers, but can cost merchants high processing fees. Atoa Payments wants to provide a cheaper alternative that is still easy for customers to use. The London-based fintech announced today that it has raised $2.2 million in pre-seed funding.

The round was led by Leo Capital and Passion Capital, with participation from angel investors like GoCardless and Nested co-founder Matt Robinson, Moon Capital Ventures and MarketFinance co-founder Anil Stocker.

Atoa co-founder Sid Narayanan told TechCrunch that he and co-founder Cian O’Dowd developed the idea for Atoa after selling their previous startup, expense management platform KlearCard, to Singapore fintech Validus in 2021.

Their barber, who initially accepted card payments, started asking for cash payments or bank transfers because he wanted to reduce his card processing fees, which were around 1.6%. Narayanan and O’Dowd were used to card alternative payments after living in Singapore, and saw an opportunity to use the U.K.’s open banking payments stack to build a Visa and Mastercard alternative, Narayanan told TechCrunch.

Mastercard and Visa payment rails can cost small merchants and their customers net margins of 51%, with card machine fees of about 1.75%, Narayanan said. Atoa, on the other hand, charges a fixed percentage fee billable to merchant each months that is up to 70% lower than debit cards. It also does not have hardware rentals, service fees or PCI attestation of compliance charges.

To use Atoa, merchants download an app that connects to their bank accounts. Customers don’t need to download Atoa’s app to use the service. Instead, they can use Atoa as long as they have a U.K. mobile banking app. According to Narayanan, the majority of adults, or about 80% in the U.K., already have a mobile banking app on their phone, removing the main source of friction. Merchants send a link for payment by SMS, PayBay or offer a QR code to scan.

To incentivize more customers to use Atoa, the startup also plans to add rewards and loyalty benefits, like digital scratch cards that can let them get cash rewards into their existing U.K. bank accounts.

Once customers pay with Atoa, merchants to receive payment instantly through Instant Bank Pay. They also get funds in their bank account right away, instead of waiting for up to 1 to 2 business days.

Atoa says since it went live in June, it’s gotten more than 100% month-on-month total payment volume (TPV) growth and merchant customers. Its most direct competitors include card machine providers like SumUp, Zettle, Square and Barclaycard, Narayanan said. Atoa differentiates by offering lower fees and enabling merchants to receive funds more quickly than the three days typically required by card machine providers. It also charges lower fees than players that are intermediated by Visa and Mastercard.

In a statement about its investment, Passion Capital partner Robert Dighero said, “Atoa has come to the UK market at the right time to leverage open banking and bring to small and medium sized merchants a truly viable alternative to payment cards and card machines that can be deployed in-store within minutes. We’re delighted to work with the Atoa team after their first fintech success and look forward to partnering with them as they achieve even greater heights with Atoa.”

Atoa helps UK merchants cut down on card processing fees by Catherine Shu originally published on TechCrunch

Startup founders go to war with UK government over its moves to appoint bank into key ecosystem role

Nothing less than a war has broken out between an influential swathe of the UK tech startup community and the British government, after the latter has allegedly sought to hand the curation and promotion of British startups – both inside the UK and abroad – over to a single UK bank.

As we covered previously, Tech Nation – a ‘QUANGO’ which has for many years been charged with the task of being the UK’s government-backed ‘startup champion’ – had been bidding for a continuing £12 million contract, starting from March 2023. But this was put out to tender by the Department for Culture, Media and Sport and, sources allege, the contract was poised to be granted to banking giant Barclays Bank for the sole operation of the role. The move was branded “insane” and “mad” by some key U.K. industry players TechCrunch spoke to.

Now, an open letter, signed by over 60 startup founders and other key players, has been published by the Coalition for a Digital Economy (Coadec), an independent non-profit that campaigns for policies to support digital startups in the UK.

The letter calls on the Government to commit to retaining Tech Nation in its role, a role which it has filled in various guises since September 2011.

Should the move go through, claims the 60+ group, Barclays would be in charge of a number of critical services for startups, such as visa sponsorship and applications for staff hired from abroad, as well as the external promotion of the UK’s startup ecosystem globally. Coadec argues this could put it into a conflict of interest on a number of fronts.

Signatories to the letter are highly influential in the UK tech scene. They include Brent Hoberman (Co-Founder and Chairman of Founders Forum), Taavet Hinrikus (Co-Founder and Chairman of Wise), Tessa Clarke (Co-Founder and CEO of OLIO), Aron Gelbard (Co-Founder and CEO of Bloom & Wild), Alex Depledge (Founder and CEO of Resi), and Ali Parsa (Co-Founder and CEO of Babylon Health). 

Because of the alleged moves to hand the contract over to Barclays, the group contends that this might put at risk current services to startups overall (including the visa system and promotional work); would hand a key aspect of government support over to a bank which has bot had the long history of Tech Nation in the ecosystem; and argues that any new arrangements should “add support to the startup ecosystem, not subtract from it”.


In a statement, Dom Hallas, Coadec Executive Director, said the government’s move would mean it would be “pulling away” from the tech startup ecosystem rather than retaining a close interest. This would also be in marked contrast to the ruling Conservative party’s oft-repeated phrase that it is ‘pro-business’.

“Amid economic turbulence, startup founders need help more than ever. This means Government backing the ecosystem more – not pulling away. We want to ensure that if changes to support do occur, the things startups value most, including the special visa system for tech, are protected,” said Hallas in a statement.

TechCrunch has reached out to the DCMS for comment and will update this story with their response.

• Declaration of interest: Coadec was founded in 2010 by Jeff Lynn, Executive Chairman and Co-Founder of online investment platform Seedrs, and myself (Mike Butcher, Editor-at-Large of TechCrunch, though I no longer have any formal or informal involvement).

Startup founders go to war with UK government over its moves to appoint bank into key ecosystem role by Mike Butcher originally published on TechCrunch

For immigrant founders in the UK, office hours with VCs are rocket fuel

All three of us are immigrants to the U.K. We were each greeted with the classic “catch-22” of trying to open a bank account and finding a place to live: To get a bank account, you need an address, but to rent a flat, you need a bank account.

This is just one of the (very minor) points of friction immigrants face when moving to a new country. Entrepreneurs who set up a business in a new country encounter more challenges. Lyubov’s own experiences as a Ukrainian immigrant in the U.K. gave her both great empathy for the trials immigrant founders face, and the belief that immigrants often make and build world-leading businesses.

Beyond personal experiences, academic research seems to point to an almost inverse relationship between the contributions immigrant founders make and early acceptance by the ecosystem.

Designing an international founders open office hours pilot

With personal experience as her motivation, Lyubov piloted a program that would offer a softer landing for immigrant entrepreneurs in the U.K. The pilot was an “International Founders Open Office Hours” program that would help immigrant founders boost their social networks and local know-how by meeting with VCs in the U.K.

Instead of the usual pitch format, the meetings were informal conversations that aimed to help founders build up this essential — and for immigrants, missing — social capital. The program was inspired by Playfair Capital and its Female Founders Office Hours.

The initial start was rocky, as it coincided with the Russian invasion of Ukraine. Lyubov and her Blue Lake partner, David Gilgur, were helping families and friends in Ukraine by day and drafting the program plan by night. Early on, there was the challenge of bringing VCs and partners on board. Blue Lake had been active for a few years but was still a new name in the investment ecosystem. Asking for investors’ time meant that we had to prove we could launch something impactful that key players would want to be a part of.

For immigrant founders in the UK, office hours with VCs are rocket fuel by Ram Iyer originally published on TechCrunch

UK to change Online Safety Bill limits on ‘legal but harmful’ content for adults

Changes are incoming to draft online safety legislation in the UK which continues to attract controversy over the impact on free speech. The draft Online Safety Bill has already been years in the making but new prime minister Liz Truss signalled earlier this month that she wants “tweaks” to ensure it does not harm freedom of expression.

Speaking on BBC Radio 4’s Today program this morning, Michelle Donelan (pictured above), the new secretary of state appointed by Truss to head up the Department for Digital, Culture, Media and Sport (DCMS), hinted that these incoming changes will focus on restrictions in the area of legal but harmful speech.

Asked about the new category of ‘legal but harmful speech’ that the bill creates — and whether she would be keeping it or not — Donelan confirmed “that’s the bit we will be changing”.

She declined to provide exact details of the incoming policy tweaks — saying the changes would be set out in parliament in due course. However she did specify that the changes will focus on unpicking restrictions for adults, not children. “That element is in relation to adults,” she emphasized. “The bits in relation to children and online safety will not be changing — and that is the overarching objective of the bill and why we put it in our manifesto.”

This raises questions about how platforms that do not age verify their users would be able to prevent children from being exposed to unrestricted legal but harmful content they may show to adults — without either A) applying the restriction anyway (i.e. in case children stumble upon such content) so generally purging ‘legal but harmful content’ with resultant harms for speech; or B) age verifying all users, and thereby putting the British social web behind a universal age-gate; or C) using some form of targeted age assurance technology on users they suspect are minors, assuming they’re willing to take the legal risks if they fail to identify all minors and end up showing some prohibited content to kids.

Pressed on how the bill will protect children if legal but harmful content is allowed, Donelan declined to go into details — so we’ll have to wait and see whether the government will be recommending platforms opt for A), B) or C) — saying only: “We will be ensuring that children are protected.”

“The main part of the bill is about making it a priority for social media providers and websites that generate user content and making sure that if they do act in the wrong way that we can stick massive fines on them which would be very punitive and prevent them from doing so again and really be a deterrent in the first place,” she added.

The new DCMS secretary of state was also pressed on the question of criminal liability for senior execs. The draft bill includes such powers for senior execs at companies that fail to cooperate with regulatory requests for information. However online safety campaigners have been pushing to extend personal liability powers — calling for prosecutions to be able to lead to fines for such individuals or even prison.

Donelan confirmed that such extended criminal liability powers are not currently in the bill. And while she did not categorically rule out the possibility that the government could look at expanding provisions in this area, she suggested its priorities (and ideology) are focused elsewhere.

“I’ve only been in the role two weeks, I will be looking at the bill in round — but my clear objective is to get this bill back to the house quickly, to edit the bit that we’ve been very upfront that we’re editing and to make sure that we get it into law because of course we want it in law as soon as possible to protect children when they’re accessing content online,” she said.

“I’m a champion of free speech — absolutely,” she added at another point during the interview, responding on why the government is unpicking restrictions in the area of legal but harmful content for adults. “We do need to make sure we’ve got the balance right in this piece of legislation. And we’re a government that will make bold and decisive decisions but if there’s things that need to be revisited we certainly won’t shy away from that.”

Molly Russell inquest

In related news today, an inquest opens into the suicide of five years ago of 14-year-old Molly Russell. The school girl had viewed pro-suicide and self-half content on Instagram — and her death galvanized campaigners for online safety legislation. The inquest is expected to focus on big tech platforms, interrogating their role in the tragedy. The BBC reports that senior executives from Meta and Pinterest are due to give evidence to the inquiry after being ordered to appear by the coroner.

Donelan described Russell’s story as “heart-breaking” — and said the inquest taking evidence from tech firms is an “important” moment.

“I think it’s important that this inquest is going ahead. That social media key players will be going to the inquest, submitting information and evidence — so that we can properly access exactly what they did and the role that they played,” the DCMS secretary of state said, adding: “We’ve got to make sure as a government that we prevent horrendous incidents like this happening again.”

Donelan sidestepped a question on whether or not she agrees with criticism from child safety campaigners that social media companies have taken a business decision not to invest in child safety measures. But added: “We need to be holding them to account on these matters, we need to be making sure that they are prioritizing the welfare and well-being of children and young people when they access content online so that we prevent instances like this.

“And that’s why we’re bringing forward the Online Safety Bill — it’s gone through most stages in the house. We’ve got to get it back to the House and get it into law.”

UK to change Online Safety Bill limits on ‘legal but harmful’ content for adults by Natasha Lomas originally published on TechCrunch

UK to change Online Safety Bill limits on ‘legal but harmful’ content for adults

Changes are incoming to draft online safety legislation in the UK which continues to attract controversy over the impact on free speech. The draft Online Safety Bill has already been years in the making but new prime minister Liz Truss signalled earlier this month that she wants “tweaks” to ensure it does not harm freedom of expression.

Speaking on BBC Radio 4’s Today program this morning, Michelle Donelan (pictured above), the new secretary of state appointed by Truss to head up the Department for Digital, Culture, Media and Sport (DCMS), hinted that these incoming changes will focus on restrictions in the area of legal but harmful speech.

Asked about the new category of ‘legal but harmful speech’ that the bill creates — and whether she would be keeping it or not — Donelan confirmed “that’s the bit we will be changing”.

She declined to provide exact details of the incoming policy tweaks — saying the changes would be set out in parliament in due course. However she did specify that the changes will focus on unpicking restrictions for adults, not children. “That element is in relation to adults,” she emphasized. “The bits in relation to children and online safety will not be changing — and that is the overarching objective of the bill and why we put it in our manifesto.”

This raises questions about how platforms that do not age verify their users would be able to prevent children from being exposed to unrestricted legal but harmful content they may show to adults — without either A) applying the restriction anyway (i.e. in case children stumble upon such content) so generally purging ‘legal but harmful content’ with resultant harms for speech; or B) age verifying all users, and thereby putting the British social web behind a universal age-gate; or C) using some form of targeted age assurance technology on users they suspect are minors, assuming they’re willing to take the legal risks if they fail to identify all minors and end up showing some prohibited content to kids.

Pressed on how the bill will protect children if legal but harmful content is allowed, Donelan declined to go into details — so we’ll have to wait and see whether the government will be recommending platforms opt for A), B) or C) — saying only: “We will be ensuring that children are protected.”

“The main part of the bill is about making it a priority for social media providers and websites that generate user content and making sure that if they do act in the wrong way that we can stick massive fines on them which would be very punitive and prevent them from doing so again and really be a deterrent in the first place,” she added.

The new DCMS secretary of state was also pressed on the question of criminal liability for senior execs. The draft bill includes such powers for senior execs at companies that fail to cooperate with regulatory requests for information. However online safety campaigners have been pushing to extend personal liability powers — calling for prosecutions to be able to lead to fines for such individuals or even prison.

Donelan confirmed that such extended criminal liability powers are not currently in the bill. And while she did not categorically rule out the possibility that the government could look at expanding provisions in this area, she suggested its priorities (and ideology) are focused elsewhere.

“I’ve only been in the role two weeks, I will be looking at the bill in round — but my clear objective is to get this bill back to the house quickly, to edit the bit that we’ve been very upfront that we’re editing and to make sure that we get it into law because of course we want it in law as soon as possible to protect children when they’re accessing content online,” she said.

“I’m a champion of free speech — absolutely,” she added at another point during the interview, responding on why the government is unpicking restrictions in the area of legal but harmful content for adults. “We do need to make sure we’ve got the balance right in this piece of legislation. And we’re a government that will make bold and decisive decisions but if there’s things that need to be revisited we certainly won’t shy away from that.”

Molly Russell inquest

In related news today, an inquest opens into the suicide of five years ago of 14-year-old Molly Russell. The school girl had viewed pro-suicide and self-half content on Instagram — and her death galvanized campaigners for online safety legislation. The inquest is expected to focus on big tech platforms, interrogating their role in the tragedy. The BBC reports that senior executives from Meta and Pinterest are due to give evidence to the inquiry after being ordered to appear by the coroner.

Donelan described Russell’s story as “heart-breaking” — and said the inquest taking evidence from tech firms is an “important” moment.

“I think it’s important that this inquest is going ahead. That social media key players will be going to the inquest, submitting information and evidence — so that we can properly access exactly what they did and the role that they played,” the DCMS secretary of state said, adding: “We’ve got to make sure as a government that we prevent horrendous incidents like this happening again.”

Donelan sidestepped a question on whether or not she agrees with criticism from child safety campaigners that social media companies have taken a business decision not to invest in child safety measures. But added: “We need to be holding them to account on these matters, we need to be making sure that they are prioritizing the welfare and well-being of children and young people when they access content online so that we prevent instances like this.

“And that’s why we’re bringing forward the Online Safety Bill — it’s gone through most stages in the house. We’ve got to get it back to the House and get it into law.”

UK to change Online Safety Bill limits on ‘legal but harmful’ content for adults by Natasha Lomas originally published on TechCrunch

LockerGoGa ransomware victims can now recover their files for free

Victims of the LockerGoga ransomware can now recover their stolen files for free, thanks to a new decryptor released by Romanian cybersecurity firm Bitdefender and the NoMoreRansom Initiative.

The LockerGoga ransomware family, known for its attacks against industrial organizations, first emerged in 2019.The file-encrypting malware was infamously used in an attack against Norsk Hydro in March 2019, forcing the Norwegian aluminum manufacturer to stop production for almost a week at a cost of more than $50 million. It was also used in attacks against Altran Technologies, a French engineering consultancy, and U.S.-based chemical companies Hexion and Momentive.

According to the Zurich Public Prosecutor’s Office, which also participated in the development of the decryptor along with Europol, the operators of LockerGoga were involved in ransomware attacks against more than 1,800 individuals and institutions in 71 countries, causing more than $100 million in damage.

The group behind the LockerGoga ransomware has been inactive since October 2021, when U.S. and European law enforcement agencies arrested 12 alleged members. Following the arrests, police spent months examining the data collected during the raid and discovered the group’s encryption keys to unlock data from LockerGoga ransomware attacks, the Zurich Public Prosecutor’s Office said.

“Decryption of data is normally possible when we either identify a vulnerability in the ransomware code or when individual decryption keys become available,” Bogdan Botezatu, director of threat research and reporting at Bitdefender, told TechCrunch. “This decryptor relies on the keys seized in the 2021 arrests, which have been shared with us privately as per our collaboration with the involved law enforcement authorities.”

Swiss prosecutors said the perpetrators were also behind the MegaCortex ransomware, targeting enterprise organizations in the U.S. and Europe since 2019, and said a decryptor for MegaCortex victims will be released in the coming months.

The LockerGoga decryptor is available to download for free from Bitdefender, as well as NoMoreRansom, which is home to 136 free tools for 165 ransomware variants, including Babuk, DarkSide, Gandcrab, and REvil.

The NoMoreRansom initiative has so far helped over 1.5 million people successfully decrypt their devices without having to pay a ransom demand.

LockerGoGa ransomware victims can now recover their files for free by Carly Page originally published on TechCrunch

Grocery delivery startups with low margins might drop IPO dreams for M&A reality

Getting a bunch of bananas and avocados from your favorite 15-minute grocery delivery company at 3 a.m. might be the greatest thing since sliced bread, but some of these companies are finding themselves in somewhat of a cost-related pickle in such a low-margin business.

While covering the recent news of Misfits Market acquiring Imperfect Foods, Misfits Market founder and CEO Abhi Ramesh noted it was difficult to reach profitability in the industry as sales leveled off in the past two years. Some companies have made layoffs or left markets due to “burning a tremendous amount of cash and not raising capital.”

With online grocery shopping in the U.S. poised to be a $187.7 billion industry by 2024, up from $95.8 billion in 2020, we found ourselves exploring whether other consolidation possibilities are in the pipeline, as well as the future of IPOs for startups in this space.

Experts say grocery startups are keeping a watchful eye on what happens with Instacart’s looming IPO as an indicator of additional public listings to come. But M&As could be part of the path to the public markets: Ramesh, for instance, said his company aimed to go public. The Imperfect Foods deal was a strategy for reaching profitability as one strong company.

Consolidation station

Instacart itself has been in acquisition mode lately. The delivery giant has acquired four companies in the past 12 months, including two in the past two weeks: Rosie, an e-commerce platform for local and independent retailers and wholesalers, and Eversight, an AI-powered pricing and promotions platform for consumer packaged goods brands and retailers.

Grocery delivery startups with low margins might drop IPO dreams for M&A reality by Christine Hall originally published on TechCrunch

Game on for UK’s deeper antitrust probe of Microsoft-Activision

The UK’s competition watchdog has confirmed it will move to an in-depth investigation of the Microsoft-Activision $68.7BN gaming mega-deal, a couple of weeks after it signalled concerns about the proposed acquisition.

Earlier this month, the Competition and Markets Authority (CMA) said it was worried Microsoft could harm rivals in the gaming industry by restricting access to popular Activision titles.

It also expressed concerns about the impact on development of the more nascent cloud-gaming market.

“The CMA has referred the anticipated acquisition by Microsoft Corporation of Activision Blizzard, Inc. for an in-depth investigation, on the basis that, on the information currently available to it, it is or may be the case that this Merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom,” the regulator wrote in an update on the case today.

It also confirmed the (four) individuals appointed to the inquiry group. The so-called phase 2 CMA investigation will involve this independent panel examining concerns raised by the preliminary probe — a detailed assessment that could take months or even over half a year.

Other regulators reviewing the Microsoft-Activision acquisition include the U.S.’ FTC.

Despite close regulatory attention to the proposed mega-deal, Activision suggested earlier this month that it still expects the acquisition to close in mid 2023. While Microsoft expressed willingness to work with regulators to allay their concerns.

Game on for UK’s deeper antitrust probe of Microsoft-Activision by Natasha Lomas originally published on TechCrunch