Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest big news, chats about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here — and don’t forget to check out last Friday’s episode.

What a weekend behind us, and what a week ahead. Disrupt kicks off today, so the TechCrunch crew is busy as heck getting all the final touches put on. Snag a ticket here and we will see you soon.

On the podcast this morning:

• Stocks are set to open sharply higher as we hit record, a good and welcome comeback for investors in both private and public tech companies.
• The NVIDIA-ARM deal is finally a go, so we can put the entire saga to rest at last.
• All things TikTok: Microsoft losing the deal, Oracle possibly winning the deal, the Chinese government saying no to the whole affair, and the Chinese government only saying no to part of the deal? What is clear is that the deal is under pressure to happen and not to happen. We’ll know more soon.
• Descartes Underwriting raised $18.5 million for its insurtech solution, while Xometry raised $75 million in a Series E for offshore manufacturing in factories with spare capacity.
• GoJek and Grab may merge.
• And, finally, the CBP is a huge mess and an embarrassment.

Ok, that’s all we have time for today. See you at Disrupt in a few hours!

Elon Musk has previously touted the ‘Bioweapon Defense Mode’ boasted by Tesla’s vehicles, which are designed to provide excellent air quality inside the car even in the face of disastrous conditions without, thanks in part to high-efficiency HEPA air filtration. Now, Musk has said on Twitter that he hopes to one day provide similar air filtration along with home HVAC systems.

Tesla, while primarily an automaker, is also already in the business of home energy and power generation, thanks to its acquisition of SolarCity, its current production of solar roofing products, and its business building Tesla batteries for storage of power generated from green sources at home. While it hasn’t yet seemed to make any moves to enter into any other parts of home building or infrastructure, HVAC systems actually would be a logical extension of its business, since they represent a significant part of the overall energy consumption of a home, depending on its heating and cooling sources.

Boosting home HVAC efficiency would have the added benefit of making Tesla’s other home energy products more appealing to consumers, since it would presumably help make it easier to achieve true off-grid (or near off-grid) self-sufficiency.

As for the company’s HEPA filtration, despite the jokey name, Tesla actually takes ‘Bioweapon Defense Mode’ very seriously. In a blog post in 2016, it detailed what went into the system’s design, along with testing data to back up its claims of a HEPA filter that’s “ten times more efficient than standard automotive filters.” While Tesla doesn’t cited wildfires in that post, it does list “California freeways during rush hour, smelly marshes, cow pastures in the Central Valley of California, and major cities in China” in terms of challenges it wanted it to to be able to handle.

Many experts are predicting that the wildfires we’re currently seeing devastating large portions of the west coast of the U.S. will only get worse as environmental conditions continue to suffer the impact of climate change. Given that, and given Tesla’s larger business goals of offering a range of products that neutralize or reduce the ecological impact of its customers, more efficient and effective home HVAC products don’t seem that far outside its operational expertise.

The United States government will not extend the September 20 deadline for Beijing-based ByteDance to sell TikTok, President Donald Trump said on Thursday. This adds urgency to negotiations because TikTok may be banned in the United States if it can’t reach an agreement with a buyer.

“We’ll see what happens. It’ll either be closed up or they’ll sell it,” Trump said before boarding Air Force One at Joint Base Andrews. Some analysts had predicted that the deadline would be extended because of the sale’s complexity.

Trump issued an executive order last month claiming there is “credible evidence” that ByteDance “might take action that threatens to impair the national security of the United States.” ByteDance was already in negotiations with Microsoft for a sale. Several other large American tech companies have since reportedly entered into talks with popular video-sharing app–but potential new roadblocks to a deal have also emerged.

Despite TikTok’s larger user base and value as one of the most popular social media apps among Gen Z, there are currently several issues that may lower its attractiveness for buyers.

For example, the software code used in ByteDance’s apps, including TikTok, are developed by engineers and developers at its Beijing headquarters. This makes separating TikTok from ByteDance more complicated on a technical level. Another factor is an update China made two weeks ago to export control laws that cover artificial intelligence technologies. TikTok’s AI-based algorithms, which shows new content to users depending on their interests and browsing history, are valuable and a huge part of its success. After the export control policy update was issued by China’s Ministry of Commerce, ByteDance said it will “strictly follow” the new rules, but that might prevent ByteDance from including TikTok’s personalized recommendation and AI-based technology in a sale, making it a less attractive acquisition.

In addition to Microsoft, contenders for TikTok reportedly include other American tech heavyweights like Twitter, Google and Oracle. Walmart has even put itself forward as a buyer, in a potential partnership with Microsoft.

TikTok’s security is also under a magnifying glass in several other countries. For example, it was among a roster of Chinese apps banned in India  over “national security and defence” concerns,” and is currently being investigated by French data security watchdog CNIL.

TikTok has fought back against those claims. Last month, it sued the Trump administration, stating in an announcement on August 24 that it “we strongly disagree with the Administration’s position that TikTok is a national security threat.”

In its complaint, TikTok said it has taken “extraordinary measures to protect the privacy and security of TikTok’s user data” by storing data in the U.S. and Singapore, and creating barriers between TikTok’s U.S. user data and the data of other ByteDance products like Douyin.

Since launching in 2017, TikTok, ByteDance’s international version of Douyin, has become firmly entrenched in internet culture, especially among Gen Z. In the U.S. alone, TikTok says it has over 100 million users in the U.S. and employs about 1,500 people.

Even though several apps, including Instagram, are trying to position themselves as TikTok alternatives with similar short-form video sharing features, no frontrunner has emerged so far. In fact, a new report by analytics firm Sensor Tower said that in August, TikTok was the most downloaded non-gaming app worldwide, with more than 63.3 million installs. TikTok users are so committed to the app that at least one VPN provider, ExpressVPN, saw a spike in traffic after the U.S. government proposed a potential ban in July.

Some cybersecurity experts say that TikTok’s data collection practices are similar to other social media apps that depend on advertising revenue. But a major concern revolves around its ownership by a Chinese company that may be forced to capitulate to demands for data by the Chinese government. A Chinese cybersecurity law requires Chinese tech companies, like ByteDance, to comply with government’s requests for user data. ByteDance has said it would resist attempts by the Chinese government access TikTok’s user data

Security concerns about TikTok also increased after a Wall Street Journal analysis published in August found that TikTok went around an Android operating system feature designed to limit how much data, including unique identifiers called MAC addresses, that apps can collect from users. According to the WSJ, TikTok stopped collecting unique identifiers in November, but its investigation raised questions about TikTok’s commitment to protecting user privacy. In a statement to the WSJ, TikTok said “like our peers, we constantly update our app to keep up with evolving security challenges.”

It’s not just Republicans who are taking a stance against TikTok. In July, Joe Biden’s presidential campaign reportedly asked its staff to remove TikTok from their work and personal devices.

The U.S government’s scrutiny of TikTok began escalating last year when Sens. Charles Schumer (D-NY) and Tom Cotton (R-AR) asked Joseph Maguire, then the acting director of national intelligence, to assess if TikTok can be forced to turn over American users’ data to Chinese authorities.

Primary care health tech startup Carbon Health has added a new element to its “omnichannel” healthcare approach with the launch of a new pop-up clinic model that is already live in San Francisco, LA, Seattle, Brooklyn and Manhattan, with Detroit to follow soon – and that will be rolling out over the next weeks and months across a variety of major markets in the U.S., ultimately resulting in 100 new COVID-19 testing sites that will add testing capacity on the order of around an additional 100,000 patients per month across the country.

So far, Carbon Health has focused its COVID-19 efforts around its existing facilities in the Bay Area, and also around pop-up testing sites set up in and around San Francisco through collaboration with genomics startup Color, and municipal authorities. Now, Carbon Health CEO and co-founder Even Bali tells me in an interview that the company believes the time is right for it to take what it has learned and apply that on a more national scale, with a model that allows for flexible and rapid deployment. In fact, Bali says the they realized and began working towards this goal as early as March.

“We started working on COVID response as early as February, because we were seeing patients who are literally coming from Wuhan, China to our clinics,” Bali said. “We expected the pandemic to hit any time. And partially because of the failure of federal government control, we decided to do everything we can to be able to help out with certain things.”

That began with things that Carbon could do locally, more close to home in its existing footprint. But it was obvious early on to Bali and his team that there would be a need to scale efforts more broadly. To do that, Carbon was able to draw on its early experience.

“We have been doing on-site, we have been going to nursing homes, we have been working with companies to help them reopen,” he told me. “At this point, I think we’ve done more than 200,000 COVID tests by ourselves. And I think I do more than half of all the Bay Area, if you include that the San Francisco City initiative is also partly powered by Carbon Health, so we’re already trying to scale as much as possible, but at some point we were hitting some physical space limits, and had the idea back in March to scale with more pop-up, more mobile clinics that you can actually put up like faster than a physical location.”

Interior of one of Carbon Health’s COVID-19 testing pop-up clinics in Brooklyn.

To this end, Carbon Health also began using a mobile trailer that would travel from town to town in order to provide testing to communities that weren’t typically well-served. That ended up being a kind of prototype of this model, which employs construction trailers like you’d see at a new condo under development acting as a foreman’s office, but refurbished and equipped with everything needed for on-site COVID testing run by medical professionals. These, too, are a more temporary solution, as Carbon Health is working with a manufacturing company to create a more fit-for-purpose custom design that can be manufactured at scale to help them ramp deployment of these even faster.

Carbon Health is partnering with Reef Technologies, a SoftBank -backed startup that turns parking garage spots into locations for businesses, including foodservice, fulfilment, and now Carbon’s medical clinics. This has helped immensely with the complications of local permitting and real estate regulations, Bali says. That means that Carbon Health’s pop-up clinics can bypass a lot of the red tape that slows the process of opening more traditional, permanent locations.

While cost is one advantage of using this model, Bali says that actually it’s not nearly as inexpensive as you might think relative to opening a more traditional clinic – at least until their custom manufacturing and economies of scale kick in. But speed is the big advantage, and that’s what is helping Carbon Health look ahead from this particular moment, to how these might be used either post-pandemic, or during the eventual vaccine distribution phase of the COVID crisis. Bali points out that any approved vaccine will need administration to patients, which will require as much, if not more infrastructure than testing.

Exterior of one of Carbon Health’s COVID-19 testing pop-up clinics in Brooklyn.

Meanwhile, Carbon Health’s pop-up model could bridge the gap between traditional primary care and telehealth, for ongoing care needs unrelated to COVID.

“A lot of the problems that telemedicine is not a good solution for, are the things where a video check-in with a doctor is nearly enough, but you do need some diagnostic tests – maybe you might you may need some administration, or you may need like a really simple physical examination that nursing staff can do with the instructions of the doctor. So if you think about those cases, pretty much 90% of all visits can actually be done with a doctor on video, and nursing staff in person.”

COVID testing is an imminent, important need nationwide – and COVID vaccine administration will hopefully soon replace it, with just as much urgency. But even after the pandemic has passed, healthcare in general will change dramatically, and Carbon Health’s model could be a more permanent and scalable way to address the needs of distributed care everywhere.

Cosmose, a platform that tracks foot traffic in brick-and-mortar stores to help companies predict customer behavior, announced today it has raised a $15 million Series A. The round was by Tiga Investments, with participation from returning investors OTB Ventures and TDJ Pitango, who co-led Cosmose’s seed round last year. The company said its valuation is now more than $100 million.

The Series A will be used for product development and geographic expansion, starting with Southeast Asian markets this year, followed by the Middle East and India. Chief executive officer Miron Mironiuk, who founded Cosmose in 2014, said its goal is to break even and generate profit by 2021.

Cosmose has offices in Shanghai, Hong Kong, New York and Warsaw, where is software engineering team is based. Most of the stores its tech is currently use in are in China and Japan, and its clients include companies like Walmart, Marriott, Samsung, and LVMH.

As companies try to recover from the impact of COVID-19, Mironiuk said Cosmose’s platform has helped clients make decisions about when to reopen stores and what kind of inventory to stock, and how to increase revenue. For example, ‘some shops wanted to connect with customers who used to shop in their physical locations and encourage them to buy online,” he said. “Hotels in Japan were focused on promoting their in-house restaurants to local residents to make up for the lost revenue.” The company is also working with Boston Consulting Group on a report called “COVID-19 offline retail recovery traffic in China” for publication next week.

Mironiuk said that a PwC audit of the platform’s accuracy completed in December 2019 confirmed its ability to track customers within 1.6 meters of their location in a store, and that its data ecosystem now comprises of more than one billion smartphones and 360,000 stores. Cosmose’s plan is to grow that to two billion smartphones and 10 million stores by 2022.

The company offers three main products: Cosmose Analytics, which tracks customers’ movements inside brick-and-mortar stores; Cosmose AI, a data analytics and prediction platform to help retailers create marketing campaigns and increase sales; and Cosmose Media, for targeting online ads.

Cosmose does not require hardware installation, which means no regular maintenance is required after Cosmose maps a store, and helps it differentiate from rivals.

There are other companies that also analyze foot traffic in brick-and-mortar stores, including RetailNext and ShopperTrak, but being tracked might alarm customers who are concerned about their privacy. Mironiuk said all of the smartphone data Cosmose AI gathers is anonymized, so the company doesn’t know who shoppers are. The platform uses alphanumeric IDs called OMNIcookies, does not collect personal data like phone MAC addresses, mobile numbers, or email addresses, and follows data privacy laws in each of the countries it operates in. It also allows shoppers to opt-out of tracking.

In a press statement about the investment, Raymond Zage, the CEO and founder of Tiga Investments, said “I was attracted by the strong results Cosmose is already achieving for some of the world’s recognizable brands, while simultaneously ensuring user privacy is protected. Cosmose team is saving stores while enhancing consumer experience.”

The private launch industry isn’t showing any signs of slowing down, and a new $172 million Series B round of funding for China commercial launch startup iSpace indicates it could be heating up internationally. The new funding was led by Beijing Financial Street Capital Operation Center, CICC Alpha, Taizhonghe Capital and includes participation from existing shareholders.

The funding will primarily go towards development of iSpace’s planned ‘Hyperbola’ space launch vehicle. The first of these sent satellites into space last July, making iSpace the first private Chinese launch company to mark that achievement. A larger rocket, called Hyperbola-2, is currently in development, and iSpace intends for the first-stage booster of that vehicle to be fully reusable, with vertical landing capabilities similar to those of SpaceX’s Falcon 9.

iSpace is developing reusable rocket engine technology to match, which is another use of the new injection of funding – as well as technical talent hiring to support all of the above. The goal is to perform a first test flight just to the Kalman line that defines the edge of space sometime early next year, using the first-stage booster of the Hyperbola-2 and including a powered landing. After that, it hopes to fly its first fully orbital mission before the end of next year.

Founded in 2016, iSpace previously raised $104.5 million, bringing its total funding to date to $276.5 million.

The U.S. market has no real frontrunner poised to claim TikTok’s throne if the app is banned in the country. According to Trump’s executive order, TikTok’s owner ByteDance has to divest of TikTok’s U.S. operations or the app will be banned from the U.S. market on November 12. A number of companies have considered the TikTok deal, including front-runner Microsoft, Twitter, Google, and even Oracle, for some reason. But if a deal doesn’t get done, it’s unclear what app — if any — will be able to take TikTok’s place.

Instagram, of course, is clearly vying for TikTok users with the launch of its latest short-form video feature called “Reels.” But the addition has so far seen mixed reviews. Though it’s still early days for Reels, The New York Times rushed to call it a “dud” on arrival. Engadget, meanwhile, said the feature was actually a “worthy rival,” but it gets lost in Instagram’s bloat. Instagram also is not a direct TikTok clone. It’s become an all-purpose social network for photo-sharing, viewing Stories, online shopping, live video content, long-form video (IGTV), private messaging, and more.

It’s unclear if TikTok users will truly consider Instagram an alternative in the event that TikTok disappears.

There are a number of other apps that are more direct competitors to TikTok, as they also employ a similar vertical video feed format, focus on short-form video, and offer a combination of editing tools and music that made TikTok so popular. The lineup today includes Likee, Byte, Triller, Dubsmash, and Zynn, among other smaller players. But among these apps, each with their own strengths and weaknesses, there’s no clear leader.

According to data provided by app store intelligence firm App Annie, Singapore-based Likee had the largest number of weekly active users in the U.S. for the week ending August 8. (For context, Trump’s executive order was signed on August 6.)

Likee is very much a TikTok clone, unfortunately with ripped content aplenty, no less. App Annie reports it had 1.9 million weekly active users across iPhone and Android combined in the U.S. during the week of August 2-8, 2020. Likee has also steadily grown its weekly active users numbers and hit a high of No. 71 in overall downloads on iPhone back on May 27.

(Photo by Nasir Kachroo/NurPhoto via Getty Images)

The next two largest apps were Byte and Triller with 1.1 million weekly active users apiece, during the same time period of Aug. 2-8. Both also briefly flirted with the top of the App Store charts as news of a potential ban made the headlines. This allowed Byte to reach No. 1 in overall downloads on iPhone on July 8. Triller then followed, briefly reaching No. 1 in overall downloads on iPhone on August 1.

Dubsmash trailed, App Annie said, with 800,000 weekly active users during Aug. 2-8. It got as high as No. 10 in overall downloads on iPhone on July 9.

Meanwhile, despite reports of being filled with stolen content, TikTok clone Zynn had a decent showing. The app had 600,000 weekly active users during the week ending Aug. 8. It hit No. 1 in overall downloads on iPhone on May 27, after seeing a bust of downloads and active users in late May.

However, Zynn doesn’t present a solution to the TikTok problem as it, too, is operated by a Chinese tech giant. The app was created by Owlii, owned by a billion-dollar Chinese company Kuaishou, which is the second-most popular video platform in China after Douyin (ByteDance’s name for China’s version of TikTok).

There are a number of lesser-known TikTok alternatives as well, including Lomotif, Funimate, Kwai, Firework, and others. And there are video apps that focus on some aspect of TikTok, such as the live-streaming apps like Live.Me, Twitch, and Caffeine, as well as social video chat apps like Squad, Houseparty, Murge, and others. But none of these could be considered a TikTok competitor.

Snapchat is another big name vying for TikTok’s users, but it doesn’t yet have TikTok-like features launched publicly.

TechCrunch reported in July the app was testing TikTok-style navigation. Earlier this month, Snap announced it would soon test a feature that lets users set their Snaps to music, similar to TikTok, and had music licensing deals lineup up to that effect. Given the overlap with TikTok’s Gen Z user base, Snapchat could do well here but it seems in no rush to get this feature out, unlike Instagram. The company said it would begin the test the feature later this fall.

What could happen, instead, if TikTok were to entirely disappear, would be a fracturing of its user base across a range of competitive apps.

Already, there are signs of this happening. On news of the possible TikTok ban, a community of TikTok users who call themselves “alt TikTok” — a group that includes those known for their absurdist humor as well as gay TikTok, BuzzFeed reported — stormed Byte. The brief app store chart ranking bumps seen by other apps like Triller and Dubsmash also indicate the TikTok community was hedging its bets by setting up shop on competitive apps just in case.

Of course, losing TikTok for good is a worst-case scenario. The hope for many fans of the short-form app is that the company sells the U.S. operations in order remain in this market.

iQiyi and Tencent’s WeTV, two of China’s most popular streaming services, may be banned in Taiwan next month as the government prepares to close regulatory loopholes that enabled them to operate through local partnerships.

In an announcement posted this week, Taiwan’s Ministry of Economic Affairs said Taiwanese companies and individuals will be prohibited from providing services for OTT firms based in mainland China. The proposed regulation will be open to public comment for two weeks before it takes effect on Sept. 3.

Though Taiwan, which has a population of about 24 million people, is self-governed, the Chinese government claims it as a territory. The proposed regulations means Taiwan is joining other countries, including India and the United States, in taking a harsher stance against Chinese tech companies.

iQiyi and Tencent’s WeTV set up operations in Taiwan through “illegal” partnerships, the Ministry of Economic Affairs said in its announcement, working through their Hong Kong subsidiaries to strike agreements with Taiwanese companies.

In April, the NCC declared that mainland Chinese OTT firms are not allowed to operate in Taiwan under the Act Governing Relations between People of the Taiwan Area and the Mainland Area. Cabinet spokesperson Kolas Yotaka said at the time that Chinese firms and their Taiwanese partners were operating at “the edges of the law.”

But NCC spokesperson Wong Po-Tsung said the proposed regulation isn’t targeted solely at Chinese OTT operators. According to the Taipei Times, he stated “the act was necessary because the cable television service operators have asked that the commission apply across-the-board standards to regulate all audiovisual service platforms, which should include OTT services. It was not stipulated just to address the problems caused by iQiyi and other Chinese OTT operators.”

Wong added that Taiwan is a democratic country and its government would not block people from watching content from iQiyi and other Chinese streaming services. For example, they can still access them by using cross-border payment services to pay for subscriptions in China.

Once the act is passed, Taiwanese companies that break it will face fines of NTD $50,000 to NTD $5 million [about USD $1,700 to USD $170,000].

TechCrunch has contacted iQiyi and Tencent for comment.

The Canadian Pension Plan Investment Board, an asset manager controlling around $311 billion in assets for the Canada’s pensioners and retirees, has identified four key industries that are set to experience massive changes as a result of the global economic response to the COVID-19 pandemic.

The firm expects the massive changes in e-commerce, healthcare, logistics, and urban infrastructure to remain in place for an extended period of time and is urging investors to rethink their approaches to each as a result.

“It really ties into the mandate that we have in thematic investing,” said Leon Pedersen, the head of Thematic Investments at CPPIB.

There was a realization at the firm that structural changes were happening and that there was value for the fund manager in ensuring that the changes were being addressed across its broad investment portfolio. “We have a long term mandate and we have a long term investment horizon so we can afford to think long term in our investment outlook,” Pedersen said.

The Thematic Investments group within CPPIB will make mid-cap, small-cap and private investments in companies that reflect the firm’s long term theses, according to Pedersen. So not only does this survey indicate where the firm sees certain industries going, but it’s also a sign of where CPPIB might commit some investment capital.

The research, culled from international surveys with over 3,500 respondents as well as intensive conversations with the firm’s investment professionals and portfolio companies, indicates that there’s likely a new baseline in e-commerce usage that will continue to drive growth among companies that offer blended retail offerings and that offices are likely never going to return to full-time occupancy by every corporate employee.

Already CPPIB has made investments in companies like Fabric, a warehouse management and automation company.

The e-commerce wave has crested, but the tide may turn

Amid the good news for e-commerce companies is a word of warning for companies in the online grocery space. While usage surged to 31 percent of U.S. households, up from 13 percent in August, consumers gave the service poor marks and many grocers are actually losing money on online orders. The move online also favored bigger omni-channel vendors like Amazon and Walmart, the study found.

The CPPIB also found that there may be opportunities for brick and mortar vendors in the aftermath of the epidemic. As younger consumers return to shopping center they’re going to find fewer retailers available, since bankruptcies are coming in both the US and Europe. That could open the door for new brands to emerge. Meanwhile, in China, more consumers are moving offline with malls growing and customers returning to shopping centers.

Some of the biggest winners will actually be online entertainment and cashless payments — since fewer stores are accepting cash and music and video streaming represent low-risk, easier options than live events or movie theaters.

LOS ANGELES, CA – MAY 30: General views of tourists and shoppers returning to the Hollywood & Highland shopping mall for the first weekend of in-store retail business being open since COVID-19 closures began in mid-March on May 30, 2020 in Los Angeles, California. (Photo by AaronP/Bauer-Griffin/GC Images)

Healthcare goes digital and privacy matters more than ever

Consumers in the West, already reluctant to hand over personal information, have become even more sensitive to government handling of their information despite the public health benefits of tracking and tracing, according to the CPPIB. In Germany and the U.S. half of consumers said they had concerns about sharing their data with government or corporations, compared with less than 20 percent of Chinese survey respondents.

However, even as people are more reluctant to share personal information with governments or corporations, they’re becoming more willing to share personal information over technology platforms. One-third of the patients who used tele-medical services in the U.S. during the pandemic did so for the first time. And roughly twenty percent of the nation had a telemedicine consultation over the course of the year, according to CPPIB data.

Technologies that improve the experience are likely to do well, because of the people who did try telemedicine, satisfaction levels in the service went down.

DENVER, CO – MARCH 12: Healthcare workers from the Colorado Department of Public Health and Environment check in with people waiting to be tested for COVID-19 at the state’s first drive-up testing center on March 12, 2020 in Denver, Colorado. The testing center is free and available to anyone who has a note from a doctor confirming they meet the criteria to be tested for the virus. (Photo by Michael Ciaglo/Getty Images)

Cities and infrastructure will change

“From mass transit to public gatherings, few areas of urban life will be left unmarked by COVID-19,” write the CPPIB report authors.

Remote work will accelerate dramatically changing the complexion of downtown environments as the breadth of amenities on offer will spread to suburban communities where residents flock.  According to CPPIB’s data roughly half of workers in China, the UK and the US worked from home during the pandemic, up from 5 percent or less in 2019. In Canada, four-in-ten Canadian were telecommuting.

To that end, the CPPIB sees opportunities for companies enabling remote work (including security, collaboration and productivity technologies) and automating business practices. On the flip side, for those workers who remain wedded to the office by necessity or natural inclination, there’s going to need to be cleaning and sanitation services and someone’s going to have to provide some COVID-19 specific tools.

With personal space at a premium, public transit and ride hailing is expected to take a hit as well, according to the CPPIB report.

New York City, NY is shown in the above Maxar satellite image. Image Credit: Maxar

Supply chains become the ties that bind in a distributed, virtual world

As more aspects of daily life become socially distanced and digital, supply chains will assume an even more central position in the economy.

“Amid rising labor costs and heightened geopolitical risk, companies today are focused on resilience,” write the CPPIB authors.

Companies are reassessing their reliance on Chinese manufacturing since political pressure is coming from more regions on Chinese suppliers thanks to the internment of the Uighur population in Xinjiang and the crackdown on Hong Kong’s democratic and open society. According to CPPIB, India, Southeast Asia, and regional players like Mexico and Poland are best positioned to benefit from this supply chain diversification. Supply chain management software providers, and robotics and automation services stand to benefit.

“Confined to their homes for months and subjected to a rapid reordering of their perceived health risks and economic prospects, consumers are emerging from a shared trauma that will change their priorities and concerns for years to come,” the CPPIB study’s authors write.

TikTok is right in the jaws of a thorny situation with the U.S. Government regarding its ownership, but it’s sending a clear message today that it is not sitting on its heels with big deals. Yesterday, it announced a deal with UnitedMasters to allow artists on TikTok to distribute their songs directly to streaming services and other partners directly.

UnitedMasters is the un-record-label label — in fact a direct distribution company founded by former president of Interscope Records, Steve Stoute. The firm allows musicians (especially budding ones) to pay a competitive distribution rate to get access to Spotify, YouTube, SoundCloud, Apple Music and other services. It also gets them access to analytics, retargeting, CRM tools and individual deals that UM makes with brands like ESPN and the NBA.

Normally, the path between an artist being able to go viral on TikTok and be included in the next NBA 2k or before an official game on the air would be a long one involving a lot of knives out for pieces of the pie. UnitedMasters shortcuts all of this.

The simple scenario is this:

• An aspiring artist or songwriter puts out a song or riff on TikTok (likely one of many).
• This one has something and it catches on the algorithm and generates numbers.
• The creator opts in to participating in UnitedMasters’ program.
• They give up a cut close to 10% but get direct distribution into the major streaming buckets and potential A-grade partners.
• They can also market things like tickets, merch and more directly to fans using UM’s customer tools.

Which is why a tie up with TikTok makes a hell of a lot of sense. One of the biggest issues with viral social platforms has been the way that they reward creators. Twitter’s Vine, of course, squandered their opportunity there. Even YouTube has had major problems providing consistent revenue to many of its top creators, with a long trend towards big hitters monetizing off platform in order to earn consistent, durable money.

TikTok has already announced a creators fund with a significant purse, but it needs to go beyond that. We’ve seen over and over how young creators on the platform create viral waves of attention for TikTok and millions of re-enactments and remixes. Often, though, those creators are offered little recourse to monetize or benefit from their creations. Dance creators and musical talents, often young Black women, are literally crafting culture in real-time on TikTok and the pathways for them to benefit materially are very rare. Sure, it’s great when an originator gets called out by a Times reporter willing to do the work to trace the source, but what about the thousands of others being minted as a real voice on the platform every month?

It’s beyond time for the creators of The Culture to benefit from that culture. That’s why I find this UnitedMasters deal so interesting. Offering a direct pipeline to audiences without the attendant vulture-ism of the recording industry apparatus is really well aligned with a platform like TikTok, which encourages and enables ‘viral sounds’ with collaborative performances. Traditional deal structures are not well suited to capturing viral hype, which can rise and fall within weeks without additional fuel.

In terms of overall platforms, TikTok clearly has the highest concentration of incredible and un-tapped musical talent on the market. It’s just wild how many creators I see on there that are just flat out as good if not better than what you hear on the radio. Opera, rap, soul, folk, comedy, songwriting, it runs the gamut.

TikTok CEO Kevin Mayer came to the company after a long stint at Disney ending with a very successful Disney+ launch. Almost immediately, he was dropped into a political firestorm between China and the U.S. government. Parent company ByteDance must sell within 90 days, says Trump, or get shut down. Microsoft might buy them. Other tech companies are circling. This deal is a pretty crisp forward-looking signal that TikTok sees a way through this and is not waiting to innovate on one of the trickier components of this era of user generated businesses.

And on top of that, it charts a course for how user generated platforms should look to service creators and keep them in their universe. All UGC plays garner significant value from the creative energies of their users, but few have found a way to make that relationship reciprocal in a way that feels sustainable.

This UnitedMasters deal feels different, and the start of a larger trend that could pay big dividends to platforms and, finally, creators.

Until late last year social video app TikTok was using an extra layer of encryption to conceal a tactic for tracking Android users via the MAC address of their device which skirted Google’s policies and did not allow users to opt out, The Wall Street Journal reports. Users were also not informed of this form of tracking, per its report.

Its analysis found that this concealed tracking ended in November as US scrutiny of the company dialled up, after at least 15 months during which TikTok had been gathering the fixed identifier without users’ knowledge.

A MAC address is a unique and fixed identifier assigned to an Internet connected device — which means it can be repurposed for tracking the individual user for profiling and ad targeting purposes, including by being able to re-link a user who has cleared their advertising ID back to the same device and therefore to all the prior profiling they wanted to jettison.

TikTok appears to have exploited a known bug on Android to gather users’ MAC addresses which Google has still failed to plug, per the WSJ.

A spokeswoman for TikTok did not deny the substance of its report, nor engage with specific questions we sent — including regarding the purpose of this opt-out-less tracking. Instead she sent the below statement, attributed to a spokesperson, in which company reiterates what has become a go-to claim that it has never given US user data to the Chinese government:

Under the leadership of our Chief Information Security Officer (CISO) Roland Cloutier, who has decades of experience in law enforcement and the financial services industry, we are committed to protecting the privacy and safety of the TikTok community. We constantly update our app to keep up with evolving security challenges, and the current version of TikTok does not collect MAC addresses. We have never given any US user data to the Chinese government nor would we do so if asked.

“We always encourage our users to download the most current version of TikTok,” the statement added.

With all eyes on TikTok, as the latest target of the Trump administration’s war on Chinese tech firms, scrutiny of the social video app’s handling of user data has inevitably dialled up.

And while no popular social app platform has its hands clean when it comes to user tracking and profiling for ad targeting, TikTok being owned by China’s ByteDance means its flavor of surveillance capitalism has earned it unwelcome attention from the US president — who has threatened to ban the app unless it sells its US business to a US company within a matter of weeks.

Trump’s fixation on China tech, generally, is centered on the claim that the tech firms pose threats to national security in the West via access to Western networks and/or user data.

The US government is able to point to China’s Internet security law which requires firms to provide the Chinese Communist Party with access to user data — hence TikTok’s emphatic denial of passing data. But the existence of the law makes such claims difficult to stick.

TikTok’s problems with user data don’t stop there, either. Yesterday it emerged that France’s data protection watchdog has been investigating TikTok since May, following a user complaint.

The CNIL’s concerns about how the app handled a user request to delete a video have since broadened to encompass issues related to how transparently it communicates with users, as well as to transfers of user data outside the EU — which, in recent weeks, have become even more legally complex in the region.

Compliance with EU rules on data access rights for users and the processing of minors’ information are other areas of stated concern for the regulator.

Under EU law any fixed identifier (e.g. a MAC address) is treated as personal data — meaning it falls under the bloc’s GDPR data protection framework, which places strict conditions on how such data can be processed, including requiring companies to have a legal basis to collect it in the first place.

If TikTok was concealing its tracking of MAC addresses from users it’s difficult to imagine what legal basis it could claim — consent would certainly not be possible. The penalties for violating GDPR can be substantial (France’s CNIL slapped Google with a $57M fine last year under the same framework, for example).

The WSJ’s report notes that the FTC has said MAC addresses are considered personally identifiable information under the Children’s Online Privacy Protection Act — implying the app could also face a regulatory probe on that front, to add to its pile of US problems.

Presented with the WSJ’s findings, Senator Josh Hawley (R., Mo.) told the newspaper that Google should remove TikTok’s app from its store. “If Google is telling users they won’t be tracked without their consent and knowingly allows apps like TikTok to break its rules by collecting persistent identifiers, potentially in violation of our children’s privacy laws, they’ve got some explaining to do,” he said.

We’ve reached out to Google for comment.

Mobile device maker HMD Global has announced a $230M Series A2 — its first tranche of external funding since a $100M round back in 2018 when it tipped over into a unicorn valuation. Since late 2016 the startup has exclusively licensed Nokia’s brand for mobile devices, going on to ship some 240M devices to date.

Its latest cash injection is notable both for its size (HMD claims it as the third largest funding round in Europe this year); and the profile of the strategic investors ploughing in capital — namely: Google, Nokia and Qualcomm.

Though whether a tech giant (Google) whose OS dominates the world’s smartphone market (Android) becoming a strategic investor in Europe’s last significant mobile OEM (HMD) catches the attention of regional competition enforcers remains to be seen. Er, vertical integration anyone? (To wit: It’s a little over two years since Google was slapped with a $5BN penalty by EU regulators for antitrust violations related to how it operates Android — and the Commission has said it continues to monitor the market ‘remedies’.)

In a further quirk, when we spoke to HMD Global CEO, Florian Seiche, ahead of today’s announcement, he didn’t expect the names of the investors to be disclosed — but we’d already been sent press release material listing them so he duly confirmed the trio are investors in the round. (But wouldn’t be drawn on how much equity Google is grabbing.)

HMD’s smartphones run on Google’s Android platform, which gives the tech giant a firm business reason for supporting the mobile maker in growing the availability of Google-packed hardware in key growth markets around the world.

And while HMD likens its consistent (and consistently updated) flavor of Android to the premium ‘pure’ Android experience you get from Google’s own-brand Pixel smartphones, the difference is the Finnish company offers devices across the range of price points, and targets hardware at mobile users in developing markets.

The upshot is relatively little overlap with Google’s Pixel hardware, and still plenty of business upside for Google should HMD grow the pipeline of Google services users (as it makes money by targeting ads).

Connoisseurs of mobile history may see more than a little irony in Google investing into Nokia branded smartphones (via HMD), given Android’s role in fatally disrupting Nokia’s lucrative smartphone business — knocking the Finnish giant off its perch as the world’s number one mobile maker and ushering in an era of Android-fuelled Asian mobile giants. But wait long enough in tech and what goes around oftentimes comes back around.

“We’re extremely excited,” said Seiche, when we mention Google’s pivotal role in Nokia’s historical downfall in smartphones. “How we are going to write that next chapter on smartphones is a critical strategic pillar for the company and our opportunity to team up so closely with Google around this has been a very, very great partnership from the beginning. And then this investment definitely confirms that — also for the future.”

“It’s a critical time for the industry therefore having a clear strategy — having a clear differentiation and a different point of view to offer, we believe, is a fantastic asset that we have developed for ourselves. And now is a great moment for us to double down on this,” he added.

We also asked Seiche whether HMD has any interest in taking advantage of the European Commission’s Android antitrust enforcement decision — i.e. to fork Android and remove the usual Google services, perhaps swapping them out for some European alternatives, which is at least a possibility for OEMs selling in the region — but Seiche told us: “We have looked at it but we strongly believe that consumers or enterprise customers actually love [Google] services and therefore they choose those services for themselves.” (Millions of dollars of direct investment from Google also, presumably, helps make the Google services business case stack up.)

Nokia, meanwhile, has always had a close relationship with HMD — which was established by former Nokia execs for the sole purpose of licensing its iconic mobile brand. (The backstory there is a clause in the sale terms of Nokia’s mobile device division to Microsoft expired in 2016, paving the way for Nokia’s brand to be returned to the smartphone market without the prior Windows Mobile baggage.)

Its investment into HMD now looks like a vote of confidence in how the company has been executing in the fiercely competitive mobile space to date (HMD doesn’t break out a lot of detail about device sales but Seiche told us it sold in excess of 70M mobiles last year; that’s a combined figure for smartphones and feature phones) — as well as an upbeat assessment of the scope of the growth opportunity ahead of it.

On the latter front US-led geopolitical tensions between the West and China do look poised to generate a tail-wind for HMD’s business.

Mobile chipmaker Qualcomm, for example, is facing a loss of business, as US government restrictions threaten its ability to continue selling chips to Huawei; a major Chinese device maker that’s become a key target for US president Trump. Its interest in supporting HMD’s growth, therefore, looks like a way for Qualcomm to hedge against US government disruption aimed at Chinese firms in its mobile device maker portfolio.

While with Trump’s recent threats against the TikTok app it seems safe to assume that no tech company with a Chinese owner is safe.

As a European company, HMD is able to position itself as a safe haven — and Seiche’s sales pitch talks up a focus on security detail and overall quality of experience as key differentiating factors vs the Android hoards.

“We have been very clear and very consistent right from the beginning to pick these core principles that are close to our heart and very closely linked with the Nokia brand itself — and definitely security, quality and trust are key elements,” he told TechCrunch. “This is resonating with our carrier and retail customers around the world and it is definitely also a core fundamental differentiator that those partners that are taking a longer term view clearly see that same opportunity that we see for us going forward.”

HMD does use manufacturing facilities in China, as well as in a number of other locations around the world — including Brazil, India, Indonesia and Vietnam.

But asked whether it sees any supply chain risks related to continued use of Chinese manufacturers to build ‘secure’ mobile hardware, Seiche responded by claiming: “The most important [factor] is we do control the software experience fully.” He pointed specifically to HMD’s acquisition of Valona Labs earlier this year. The Finnish security startup carries out all its software audits. “They basically control our software to make sure we can live up to that trusted standard,” Seiche added. 

Landing a major tranche of new funding now — and with geopolitical tension between the West and the Far East shining a spotlight on its value as alternative, European mobile maker — HMD is eyeing expansion in growth markets such as Africa, Brail and India. (Currently, HMD said it’s active in 91 markets across eight regions, with its devices ranged in 250,000 retail outlets around the world.)

It’s also looking to bring 5G to devices at a greater range of price-points, beyond the current flagship Nokia 8.3. Seiche also said it wants to do more on the mobile services side. HMD’s first 5G device, the flagship Nokia 8.3, is due to land in the US and Europe in a matter of weeks. And Seiche suggested a timeframe of the middle of next year for launching a 5G device at a mid tier price point.

“The 5G journey again has started, in terms of market adoption, in China. But now Europe, US are the key next opportunity — not just in the premium tier but also in the mid segment. And to get to that as fast as possible is one of our goals,” he said, noting joint-working with Qualcomm on that.

“We also see great opportunity with Nokia in that 5G transition — because they are also working on a lot of private LTE deployments which is also an interesting area since… we are also very strongly present in that large enterprise segment,” he added.

On mobile services, Seiche highlighted the launch of HMD Connect: A data SIM aimed at travellers — suggesting it could expand into additional connectivity offers in future, forging more partnerships with carriers. 

“We have already launched several services that are close to the hardware business — like insurance for your smartphones — but we are also now looking at connectivity as a great area for us,” he said. “The first pilot of that has been our global roaming but we believe there is a play in the future for consumers or enterprise customers to get their connectivity directly with their device. And we’re partnering also with operators to make that happen.”

“You can see us more as a complement [to carriers],” he added, arguing that business “dynamics” for carriers have also changed substantially — and customer acquisition hasn’t been a linear game for some time.

“In a similar way when we talk about Google Pixel vs us — we have a different footprint. And again if you look at carriers where they get their subscribers from today is already today a mix between their own direct channels and their partner channels. And actually why wouldn’t a smartphone player be a natural good partner of choice also for them? So I think you’ll see that as a trend, potentially, evolving in the next couple of years.”