Alchemist Accelerator, the enterprise-focused startup incubator, is hosting a Demo Day today for its 31st batch of companies. For many of these companies, it’s the first time they’ve shown their efforts to the world.
The accelerator itself, meanwhile, has some news: new leadership. Rachel Chalmers, formerly the head of AlchemistX (a division of Alchemist that helps governments and companies like Siemens and NEC build incubators of their own), will become the new President and Managing Director of the main Alchemist accelerator. Ian Bergman, previously Global Managing Director for Microsoft’s “Microsoft for Startups” program before joining Alchemist in early 2021, will now head up AlchemistX. While former Alchemist managing director Ravi Belani says he’ll still be formally involved with Alchemist, he’ll be focusing on training founders, helping them fundraise, and “initiatives to deepen and broaden our platform.”
On the new role, Rachel Chalmers tells me “Ravi and I have worked together for years and have a strongly overlapping shared value set around the importance of connecting entrepreneurs with corporate domain experts to create innovation and opportunities. Alchemist is above all a network and a community, and I’m committed to serving that community.”
Alchemist will stream today’s demo day live on YouTube — you can find that right here beginning at 10:30 am pacific.
Meanwhile, you can find an alphabetical list of the new companies presenting today below, each with a few words about what they’re doing as I understand it:
Advisar.AI: Builds models meant to help teams detect trends/patterns in their data with “self-supervised, predictive machine learning”
agtools: A platform for “farmers, buyers, and everyone on the supply chain” to help better understand market behavior and make more money while minimizing waste.
AIsport: tools for online/virtual sports coaches, with computer vision meant to help count reps and monitor form.
Flyhound: Builds tools to help rescue groups better utilize drones to find missing persons, respond to natural disasters, etc.
FreeFuse: Turns training videos into an interactive table-of-contents-style “tree”, allowing viewers to more easily find just the content they need/want.
Haze Automotive: More accessible carbon fiber for automobiles, it sounds like. Their landing page is pretty locked down, but the founder’s LinkedIn says they “are taking race-car technology [that] is normally exclusive to hyper-cars (due to the high price) and democratizing it to mass market vehicles.”
Insightarc: Automated insights to help you quickly figure out where/why you’re losing customers in the purchase flow.
Krinu: Connects chat platforms (like Whatsapp/Signal) into your company’s CRM (like Salesforce or Hubspot) to make customer chats easier to keep track of and follow up on.
Lendha: Banking tools and short-term loans for small businesses in emerging markets, beginning with Nigeria
Loyee: Building a Slack bot that analyzes your company’s CRM data and messages when it spots unusual trends or insights.
Marvel Carbon: Carbon recapture. The company’s LinkedIn says its working to “capture and return CO2 back underground”, while their website details using micro-algae to do the capturing.
PieData: Not much is available on this company, but they’re pitched as a “No-Code platform that helps you to find, launch & train ML models”
Masthead Data: A no-code solution for monitoring your team’s Google BigQuery data, identifying anomalies, and determining when/why things went off the rails.
mechlabs: A “fast-paced, hands-on crash course” that teaches students to build robots with laser cutters, PCB printers, and more
Peace of Mind: A “mental resilience” program meant to help employees identify and manage stress/emotional strain to reduce risk of burnout.
renovai: an “AI-based stylist” for e-commerce brands that can help identify, say, a table that might look good with that couch you’re buying and then place both in a mock-up image of a room.
Seccuri: A “smart matching” platform for helping companies expand their cybersecurity team
Torus: Helps banks and payment providers better analyze and optimize the network fees they pay when a card is used.
Unibaio: Working on “nano-vehicles based on natural compounds” to reduce how much pesticide must be used to be effective.
weRice: An augmented-reality based tool that helps manufacturing/construction workers identify issues while automatically saving any learnings for the next person dealing with it.
The Demo Day will also include a handful of presentations from Alchemist alum companies now looking to raise a Series A, including Billo, MATERIALL, Mobiz, Outwork, and Yieldigo.
Adobe’s intention to acquire Figma for $20 billion, announced earlier mid-September, sent shockwaves through the design industry, and not all of them positive. On a business level, it’s a no-brainer that Adobe has snapped up a rival whose design collaboration tools have picked up significantly more traction than Adobe’s home-grown XD platform. On a community level, however, designers and others were upset: they had adopted Figma precisely because it was not Adobe.
Now, a Spanish startup called Penpot — which is taking a new approach to design collaboration through an open source platform that brings designers and developers into the mix simultaneously — says that it’s been seeing a huge amount of adoption since the Figma deal. Today, it’s announcing some funding to capitalize on that, a reminder of how disruption is always around the corner.
The company, based out of Madrid, has picked up $8 million in a round led by Decibel out of the U.S., with participation also from Athos and, significantly, several individuals notable for their roles in creative and developer ecosystems.
They include Figma’s former COO (and current VSCO president) Eric Wittman, Cisco’s VP of developer relations strategy Grace Francisco, and Google’s “Fonts leader” Dave Crossland. Athos is a repeat backer: it also invested in an earlier $2.6 million round in Kaleidos, PenPot’s parent company that has largely been operating as a bootstrapped operation since 2011 and produces another open-source tool, the project management platform Taiga, which today is used by more than a million people.
Even before the Adobe-Figma news hit, Penpot had been making a name for itself. Launched a year ago, the startup has seen tens of thousands of downloads and 15,000 “stars” on GitHub. The 10,000 companies among its active users include Google, Microsoft, Red Hat, Tencent, Bytedance and Mozilla.
Before September 15, Penpot’s CEO and co-founder Pablo Ruiz-Múzquiz said that sign-ups were growing at around 40% per month: after Adobe’s news, that figure ballooned to 5,600%, and has stayed consistent since then. On-premise deployments have also grown 400%.
Ruiz-Múzquiz said that he and his team identified the gap in the market that they wanted to fill years ago: Figma and other collaboration platforms for designers (others include Sketch and inVision) do precisely what they say on their labels: they help creatives and product people build and iterate on their work, as well as how they work together.
That’s all well and good, but the problem, as Ruiz-Múzquiz sees it, is that design in the digital age has fundamentally evolved beyond what you can see. Developers work with technical people to carry out the work that underpins any design, especially any kind of ambitious design. And yet in many cases the coding and technical work are seen as separate processes: design is worked on and completed before the technical work begins, which leads to a lot of inefficiency and much more back-and-forth, not to mention miscommunication. Ruiz-Múzquiz refers to this as “the handoff mindset.”
“It’s like building two cathedrals with a tiny funnel between them,” he said. “People have tried to apply fixes to that state rather than being innovative and finding a new approach.”
Penpot’s choice of using open source-based technology to tackle this was intentional. While there isn’t a lot of precedent for open source in the design community, there definitely is in the developer community, and so creating a platform that can be manipulated and tailored to the needs of a specific group of users and usages spoke to those stakeholders. (It’s based around scalable vector graphics, where design and open source developer tools meet, and it means “no loss in translation when you do export,” Ruiz-Múzquiz said.)
“Because we are open source, it means you can hack in, self host, and tweak, and expand,” he said. “Developers care about that.”
Interestingly, Kaleidos and Ruiz-Múzquiz never thought they would ever build open source tools for designers. “We started as a backend developer company, and the reality was that developers and designers didn’t respect each other,” he admitted of the sentiment at the time.
The emergence of Penpot in that sense underscores some of how that thinking has collectively evolved in the wider community of technologists.
Typically, he said in a digital team you might have one designer to eight developers, creating an imbalance of power. “But developers over time began to understand that designers are so much more important in the process,” he said. “This is about embracing the process as a relationship of equals.”
While there may not be many competitors to Penpot in terms of open source-based (let alone proprietary) projects merging the workloads of designers and developers, it doesn’t seem like a stretch to think that this could be something a large, popular company like Figma (founded only in 2012) might eventually tackle.
But Ruiz-Múzquiz believes that is not the direction that Figma appears to be headed, especially under Adobe and its focus on tools for creators, not developers and other technical people.
“It was already enough of a point to make to create an effective collaboration platform for designers, as Figma did,” he said.
It’s worth noting that today, Penpot is free to use and that the startup has yet to build in any significant revenue model while it continues to pick up more adoption. Ruiz-Múzquiz doesn’t seem concerned about this for now, and indeed there have been a number of examples (Kaleidos’s own Taiga included) of how to build commercial towers while staying secured to your open source foundations.
Given the current state of the economy and how that has played out into a far trickier state of affairs for fundraising, though, it’s a notable mark of the startup’s potential, and of the confidence that open source can successfully expand into more categories, like design, that Penpot found enthusiastic investors despite its lack of revenue.
“Open source is no longer an either/or but a yes/and. You can have delightful UX and full control over your software. You can have a robust platform with completely open standards that make it easier to collaborate with other stakeholders,” said Decibel partner Sudip Chakrabarti. “Penpot has been committed to that vision from the very beginning and is showing the industry how it’s done. We’re thrilled to support them and help them put their foot on the gas to accelerate this movement.”
NASA has completed a key step of its “Double Asteroid Redirection Test” (DART), smashing a satellite roughly the size of a vending machine into a small moon that’s about half-a-mile in diameter. The moon, Dimorphos, is orbiting an even larger asteroid, Didymos, and while neither is in any danger of colliding with Earth, they’re good test cases to see whether us puny humans smashing them with technology can cause them to change course.
DART is basically a demonstration of what would be a ‘Hail Mary’ pass in the case of any asteroid actually threatening Earth — namely, can we use a human-made spacecraft to redirect any planet-killers enough that they end up safely whizzing by our home planet instead of causing a repeat of the extinction even that wiped out the dinosaurs.
NASA launched DART last November, using a SpaceX Falcon 9 to send the satellite on its collision course with Dimorphos. The DART spacecraft smashed into the asteroid moon at a speed of roughly 6.5 km per second on Monday evening at 7:14 p.m. ET, with confirmation of impact coming in a series of images from its onboard camera.
Next, NASA will be gathering data on whether or not DART actually had its intended effect. That process will take a few weeks, and include observations from Earth-based telescopes trained on Dimorphos and Didymos, as well as space-based observation from the James Webb and Hubble space telescopes. If it turns out this didn’t work as intended, I guess it’s back to the drawing board — my vote is for a fully operational Death Star.
Tatsumeeko, a role-playing game on Ethereum and Solana created by the team behind Discord chatbot Tatsu.GG, announced today it has struck a partnership with Immutable X (IMX). The partnership’s goal is to enhance Tatsumeeko’s gameplay experience by focusing on trackable ownership and transfer of in-game assets.
Immutable X is a layer-2 Ethereum scaling solution that powers Web3 games. It will facilitate Tatsumeeko’s virtual land sale, called Aethereal Parcels, on October 20. The game’s CEO and creative director David Lim, said the partnership will result in a more secure and streamlined player trading experience with options to hide or display Tatsumeeko’s crypto layers and use credit cards for digital asset purchases.
It will also help differentiate Tatsumeeko from other GameFi projects by focusing on experience instead of enabling play-to-earn mechanisms. Lim said that MMORPG players often purchase in-game assets on “real money trading” websites, where they are vulnerable to scams. In turn, this negatively impacts user experience.
“With IMX as our technical partner for on-chain infrastructure and support, we can make this process transparent and secure by bringing it in-house to provide our players with true digital asset ownership,” Lim added. “This enables trustless transactions and transfers of valuable digital items amongst players for low fees while at the same time contributing back to the game’s ecosystem.”
Tatsumeeko’s role-playing game takes place in a world called Ielia, where players can fight against monsters, build communities and meet other gamers. It is also meant to be an introduction to crypto and NFTs, with NFT projects that integrate directly into Tatsumeeko through its Discord. Last November, the game launched Meekolony Pass, a series of 10,000 genesis NFTs on Solana that give holders benefits, rewards and airdrops for their items in Tatsumeeko.
In a statement, Immutable X co-founder Robbie said “Tatsumeeko is focused on engaging with gamers and active community members where they already are. Tatsumeeko is using blockchain technology creatively to streamline their gameplay and players experience. I’m looking forward to partnering with Tatsumeeko as Immutable X brings the next billion players to Web3.”
Tatsu.gg, the Tatsumeeko team’sfirst project, now has over 62 million users and 1.4 million unique communities in Discord. Tatsumeeko announced in July that it has raised $7.5 million co-led by DeFiance Capital, Delphi Ventures and BITKRAFT Ventures.
Meetings are essential to helping teams, especially remote or hybrid ones, stay in touch. But too many meetings can become unproductive, as shared information and action items get buried underneath all the other stuff workers have to do. Productivity platform Loopin wants to help by integrating with work apps and gathering information from across multiple meetings, making it easy to find and share. The Washington State-based startup announced it is launching out of stealth mode today after eight months, during which it worked with 450 companies in the United States.
The startup, backed by Venture Highway and angel investors, was founded in April 2021 by college friends Anurag Varma, Parth Pareek and Mehul Dudi. Before Loopin, Varma was a product lead at Venture Highway at Upgrad, Pareek was a product lead at Samsung and Dudi worked as an engineering manager at Freshworks.
The startup came about because the three realized their meeting hours had increased at the start of the pandemic, but felt the meetings became less productive. They had trouble keeping on top of what decisions and updates had been made in different meetings and action items that needed to be done.
During a call, the founders went down a “rabbit home of discussing unproductive meetings and how our work is scattered in the number of apps we use at work,” said Varma. “This ultimately led us to think what if we had a super-app that could pull information from all the apps and provide us the context we needed at the right time—the stuff to discuss in meetings, pending tasks that need action, or follow-ups with other team members. This would massively ease the cognitive overload and free up our bandwidth on low leverage tasks.”
Loopin founders Parth Pareek, Anurag Varma and Mehul Dudi
Varma added that on average, an organization uses more than 250 apps, with each teams using about 40 to 60, leading to information fragmentation. For example, the lifecycle of a meeting typically starts with a calendar invite that may have an agenda from another app. During meetings, team members use various note-taking apps to write down takeaways and next steps, then share those over email and Slack and create tasks in a project management apps. This means that before the next meeting, each person has to refer to multiple apps to prepare and check the status of different tasks.
“In short, the knowledge you created is disconnected from the meeting,” Varma said. “Which leads to loss of context and unproductive, duplicative discussions.”
To fix these issues, Loopin integrates with Slack, Zoom, GMeet, Gmail, Notion, Asana, Trello, Jira and other work apps. Its features include a meeting management component that records and shares meeting outcomes with attendees.
Notes are organized by meetings and previous discussions are resurfaced in future meetings, making sure important tasks don’t get lost. Meanwhile, Loopin’s tasks feature helps each person track their action items by adding tasks to their calendar. If workers are wondering how they spend their time, they can look at Loopin’s calendar analytics. This means all participants are up-to-date before the next meeting, saving the whole team time.
As examples of what Loopin can do, Varma gave a few case studies. For example, a design agency uses Loopin to to track customer calls and share next steps internally at the end of each meeting. The platform tags tasks to meetings, so designers have easy access to their context without having to each for it.
A mentor for a startup accelerator uses Loopin to document coaching sessions, which are mostly ad hoc, so Loopin helps by linking back to previous calls and surfacing past conversations and action items. Meanwhile, the marketing team of an e-commerce company uses Loopin to do asynchronous updates, which meant they could eliminate their status update meetings.
Varma said Loopin’s target customer are founders, senior executives and managers in cross-functional roles who spend a lot of time in meetings, plus knowledge workers in general. The startup is currently pre-revenue. Its early beta users will be free for the next six months, then Loopin will operate on a freemium model starting in the second quarter of 2023. Loopin’s team is currently working on APIs so its users can build their own integrations.
Services that help folks make, share and profit from creative works — Maven to Bounty to Substack to Patreon to Canva — have proliferated and grown in recent years.
The rise of creator-focused startups was not an accident; instead, a secular trend of more accessible software for more diverse areas of creative work was met with a COVID-induced economic reshuffling and a gain in the amount of time the average person spent consuming in the ensuing quarters. Advertising spending rose as well. The confluent factors led to a boom in creator-focused startup activity that got busy in 2020 and continued into 2021.
However, recent data indicates that startups in the creator-focused market are raising fewer venture capital rounds, limiting total investment in the technology category.
What’s going on?
The waning pandemic is perhaps contributing to the slowdown in funding for creator-themed startups; after all, with folks back in the world, products and services that focus on IRL things are perhaps more in vogue than what we might create or consume at home. But there’s more at play.
Tech Nation is trailing in second place in the race to remain the UK’s government-backed ‘startup champion’ after the latter put the £12 million contract out to tender, according to TechCrunch’s sources. First in line at this point in time – in a decision which is due in December – is banking giant Barclays. Tech Nation’s existing government funding runs until March 2023.
But the prospect of a profitable, global bank taking over the contract has been branded “insane” and “mad” by some key UK industry players.
On the weekend, The Sunday Times reported that government officials have been concerned that Tech Nation was “breaching state aid rules because it had failed to become self-sufficient” which led officials to put the contract out to tender earlier this year.
However, although the Times reported that Tech Nation had lost the contract, TechCrunch understands that the final decision has yet to be made. Plus, it’s understood that Tech Nation is intending to carry on ‘as is’, even without the government subsidy, supported by fundraising from sponsors, subscriptions and partners.
Barclays had applied for the contract through its network of Eagle Labs incubators, some of which have physical locations, but most do not.
It’s thought this, if patchy, nationwide-presence is helping to woo the government in its so-called “levelling-up” agenda as it seeks to boost more start-ups outside London.
If successful, Barclays would also be able to administer the Home Office’s digital visa scheme, though it’s unlikely to have a monopoly on this.
Again, it’s been erroneously reported that Tech Nation would lose this capability. The £12m funding and the operation of the Visa scheme are in fact separate issues, and the final government decision will have no baring on Tech Nation’s role, designated by the Home Office, to endorse the Global Talent Visa.
Tech Nation has long been embedded in the UK tech startup scene. Tech City UK, its predecessor, was launched in 2011 by former prime minister David Cameron and concentrated largely on the London ecosystem until 2018 when it merged with Tech North (based in Manchester). It’s since gone on to run a myriad of programmes connecting tech startups and scale-up with each other and with investors in the UK and abroad.
The non-profit is chaired by Lord (Jo) Johnson (Boris Johnson’s brother) and chaired by former Sage boss Stephen Kelly.
Gerard Grech, chief executive of Tech Nation, said the body’s work represented a “£15 return on every £1 invested by the government.”
In a statement he told me: “We’ve supported over 4,000 tech companies from around the U.K. More than 30% of the UK’s 122 tech unicorns (eg Monzo, DarkTrace) have graduated from a Tech Nation programme (49 in total to date). Some 44% of the UK’s decacorns graduate from a TN non-dilutive accelerator growth programme (failure rate is less than 5% thus far).”
“Hundreds of tech firms have signed up to the Tech Zero pledge, co-founded with companies like Mozo and Olio, which commits tech companies to Net Zero. Our Libra growth programme shines a light on founders and leaders from under-represented sections of society as does the latest Diversity & Inclusion toolkit we recently launched for tech founders to help them develop a more diverse workforce,” he said.
“Today, Tech Nation’s work represents a £15 return on every £1 invested by the UK Government. This is one of the best ROIs for the taxpayer in the most strategic growth area of the economy,” he added.
Tech Nation’s recently published annual report said it could remain a going concern if government funding was withdrawn.
The industry has reacted, broadly speaking, with dismay that a massive global bank would be handed sole responsibility for supporting the UK’s tech startup ecosystem.
One source told City A.M. that the move was “like letting an arsonist teach kids about fire safety” given that the bank would have to support programmes for startups in the fintech space, putting it into a conflict of interest.
Another said the government has “effectively handed Barclays funds to acquire new customers” and was a “potential competitor or customer of the startups it’s meant to be supporting.”
Speaking to me on a condition of anonymity one investor called the government’s decision to put Tech Nation’s funding in doubt was “insane.”
“It’s mad. We need to shout this into oblivion. We can’t hand the support to the tech ecosystem to an incumbent bank! Everyone needs to know how mad this is,” he said.
Another VC told me the decision to put Barclays in the front-running for the contact was “like President Bush declaring ‘Mission Accomplished’ after the Gulf War, when the war was far from over. I don’t know what the government was thinking. I suspect this new government cares more about banking and financial services than tech.”
Brent Hoberman, founder of LastMinute.com and now head of FirstMinute Capital commented on LinkedIn: “[I] Have been a fan of Tech Nation and the hard work and impact they have had and the creativity to expand their role. It’s a tough job and the scrutiny that rightly comes with government money makes it especially hard to experiment. Barclays will need to find leverage to have more impact and scale.”
Ian Merricks, Managing Partner at White Horse Capital and Chair at The Accelerator Network, and a rival bidder for the Tech Nation contract said it was “hard to be more incensed at this use of public business growth support funding. I imagine the ‘winners’ have a larger lobbying function than we do, as a private sector consortium.”
Tanya Suarez, Founder & CEO | IoT Tribe, commented: “Surely this provides an unfair advantage and could be used to influence the founders choice of banker at several stages of growth. I wouldn’t be happy if I were any other UK high street bank or other financial institution that has been supporting founders over the years. Let’s not forget Barclays had a net operating income of £22 billion in 2021 and profits of £7 billion. If they really wanted to do this, they should carved out a minute amount of that to cover the £5-6M a year that they will receive… I don’t believe they need grant money to do it.”
Nichola Bates, Head of Global Accelerators and Innovation Programs at Boeing, said: “I don’t see how this makes sense for Barclays, or the eco-system. At £12m it probably costs Barclays more to bid for it. But surely this is work they would (and should) be doing anyway – without the need for Govt money?”
Grech said the decision was in the hands of the DCMS.
A DCMS spokesperson said: “No final decisions have been made. The successful grant recipient will be announced in due course.”
In the final days of the third quarter, it’s becoming clear that some areas of startup investment are losing luster. Declines are hardly surprising amid a more conservative venture capital market, a falling stock market, and global macroeconomic and geopolitical uncertainty. Still, even with large caveats, the pace of change in certain startup sectors appears material.
One category of startup investment that proved rock solid quarter after quarter in recent years was business and productivity software, a cohort of companies that PitchBook groups under a single descriptor, allowing us to track it rather carefully. Data indicates that after a long period of strong venture interest, business/productivity software companies are seeing their allowance sharply docked.
Given the declines, we’re curious today whether the reductions to investment in this particular startup grouping will prove to be more severe than what the larger venture capital market posts in Q3.
The Exchange explores startups, markets and money.
As always with venture capital data, we’re pulling present-day information from a living dataset, by which we mean that we are looking at preliminary data points; more information will flow into databases like PitchBook and competitors like CB Insights and Crunchbase as Q4 kicks off and final deals from the preceding period are collated.
Funding sources for tech startups in Ukraine have gone off a cliff this year, with investors (and their LPs) wary of taking on the risk of backing potentially promising ideas and people who have stayed in the country amid the sustained, persistent and increasingly ugly onslaught from Russia. But just as there are glimmers that the tides might be changing in the wider war, an interesting story has developed on the funding front, too.
Horizon Capital, an investment firm based out of Kyiv, is in the process of raising a $250 million fund that it plans to use to back tech startups in the country and neighboring Moldova. Horizon is today announcing its first close of $125 million for the fund, its fourth, with the World Bank’s International Finance Corporation (IFC) pitching in $30 million as an anchor investor. The IFC and Horizon have been working together for nearly 15 years, but this is the IFC’s first investment into Ukraine since Russia’s invasion in February.
Tellingly, others in the fund so far are not private VCs but foundations and state-backed investors who are pursuing this as an impact investing opportunity, aimed at reconstruction and soft diplomacy. They include the European Bank for Reconstruction and Development; Deutsche Investitions- und Entwicklungsgesellschaft, the Swiss Investment Fund for Emerging Markets; the Dutch Entrepreneurial Development Bank; the Western NIS Enterprise Fund; and the Zero Gap Fund, which is a partnership of the Rockefeller Foundation and the John D. and Catherine T. MacArthur Foundation.
The fund is coming at an opportune time to shore up confidence in tech, an industry that had a strong grounding and appeared to be picking up a lot of momentum in Ukraine in the lead-up to the war.
The tech sector’s population saw a very immediate shake-down in the wake of Russia’s invasion of the country, A number of western tech companies that had operations in the country mobilized quickly to evacuate their teams to safer areas in the western part of Ukraine; or to remove them altogether to other countries. Those that stayed behind did so for a reason and that wasn’t to keep working at their old jobs: it was to get involved in the defense and resistance efforts. (Some of those efforts had a very tech focus, as we have previously chronicled.)
Ironically, that played out in a delayed way in terms of business output.
In May, the National Bank of Ukraine (NBU) glowingly reported that the country’s IT industry — which had for years been working across a range of roles, covering homegrown tech companies and outsourced or satellite groups supporting companies from other markets — posted $2 billion in revenue in the first quarter of 2022, versus $1.44 billion the year before. Then in June, the New York Times reported on “Ukraine’s Thriving Tech Sector”, describing how the hundreds of thousands of engineers that were still in the country needed only internet and a laptop to continue to work, despite snap evacuations and other productivity disruptions.
But signals for what is coming around the corner have not been strong, with a June survey of Ukrainian businesses by the NBU finding a generally gloomy outlook: a decline in productivity, pressures on workforces, layoffs, inflation, expected declines in investment and more.
The startup ecosystem in Ukraine is, arguably, in an even more precarious state when considering all of the above. By its nature, a startup needs a degree of stability and support to get off the ground. Those that are bootstrapped need customers to survive; those that are building without a view of immediate revenue, as is so often the case in tech, need outside funding. And neither of those revenue sources have been particular strong in Ukraine of late.
Not all private investors have run away: New York-based ff Venture Capital wants to raise a $50 million fund specifically to back Ukrainian founders ($30 million has been raised as of the middle of this month).
Its aim is to try to regain some of the momentum that Ukraine possessed before Russia invaded. ffVC notes that in 2020 accounted for 57%, of total VC activity in the CEE region, which totaled $1 billion. Just one year later, in 2021, ffVC noted that CEE investment rose to $3.6 billion, and Ukraine accounted for $832 million of that, with BlackRock, ICONIQ, Lightspeed, Tiger Global, Insight, and Andreessen Horowitz among those backing Ukrainian founders (admittedly some outside of the country itself). “Since the beginning of the invasion this has significantly dropped off,” it admitted, adding: “Where others see risk, we see opportunity.”
And that scenario is also, essentially, a calling card for organizations like the IFC to come into the picture.
It’s notable that William Sonneborn, the global director and chair of the IFC’s investment committee, spent years previously at KKR, where he would have particular experience of the opportunity of investing in what appears to have promise precisely at what looks like the most inopportune and unpromising moment.
“This investment is a testament to a new generation of visionary entrepreneurs in Ukraine leading high-potential businesses that will help Ukraine’s economy enhance its resilience,” said Makhtar Diop, IFC’s MD in a statement. “Together with partners, we aim to inject much-needed capital into Ukraine’s IT sector, bolstering innovation, creating jobs, and encouraging investors to return to the market despite the ongoing war.”
“We thank IFC and all first close investors for taking this bold step alongside our team of dedicated professionals, ensuring that innovative entrepreneurs from Ukraine and Moldova have access to capital to fuel growth, to contribute to the renewal and revitalization of their countries, to create well-paying jobs, pay taxes, be socially responsible, and provide a strong signal to others that the time to invest is now,” said Lenna Koszarny, Horizon Capital’s founding partner and CEO, in a statement. “We are confident that this historic fund will be a resounding success, delivering both returns and impact.”
Today we’re talking about risk in the gambling sense of the word. You see, there’s a way for unicorns to avoid painful dilution when they next raise capital, and it appears that a good number of the world’s billion-dollar startups are taking the wager. But new data indicates that the bet some of the most well-financed startups in the world are taking could be more wishful thinking than intelligent gambit.
Here’s the gist: Unicorns, many of which raised capital during the 2021 boom at valuations that no longer square with market norms, are holding off raising capital until conditions improve. The bet they are taking is that they can survive off their last cash haul long enough to make it through a valuation trough and raise on the other side, when prices improve.
To understand what’s going on, let’s talk unicorn funding events, the state of valuations and how much longer things might be Somewhat Shit when it comes to revenue multiples. This is going to be a bop.
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GTA 6 footage leaks: Roughly 90 clips of the next Grand Theft Auto game leaked out this week, with the uploader claiming to have hacked Rockstar Games’ internal Slack. Rockstar confirmed the “network intrusion,” adding that they are “extremely disappointed” to see things leaked this way but that development will “continue as planned.”
Wipro fires 300 employees for moonlighting: India’s IT giant Wipro “has fired 300 employees in recent months who were found to be moonlighting for competitors,” writes Manish, with Wipro chairman Rishad Premji calling moonlighting an “act of integrity violation.”
Revolut hacked: Banking/financial services startup Revolut confirmed this week that hackers were able to breach details for a “small percentage” of its customers. The company declined to get specific about exactly how many customers that works out to, but a breach disclosure filed with authorities in the company’s home country of Lithuania suggests it’s around 50,000.
Brelyon’s wild monitor: Want something more immersive than a standard monitor but don’t want a VR headset strapped to your face? Brelyon is trying to reimagine the display, and they’ve raised $15 million from a pretty impressive roster of investors to get it done.
Kia and Hyundai sued over design flaw: Earlier this year, a TikTok went viral that publicized a not-very-complicated way to steal certain models of Kia and Hyundai vehicles. Now a class action lawsuit has been filed against the automakers, with the complaint claiming the cars were “deliberately” built without “engine immobilizers,” which Rebecca describes as an “inexpensive and very common device” meant to prevent this issue.
Google’s new Chromecast: Two years ago, Google launched a 4K version of the Chromecast — the first Chromecast to come with a dedicated remote, rather than requiring a smartphone for everything. They’re now bringing the same design plus a remote to the more affordable HD (1080p) model. The HD model will cost $30, while the 4K version will cost $50.
Facebook users sue Meta over iOS tracking: “The complaint,” writes Taylor, “alleges that Meta evaded Apple’s new restrictions by monitoring users through Facebook’s in-app browser, which opens links within the app.”
audio roundup
You like podcasts? We’ve got podcasts! Good ones. Great ones. Award-winning ones, even! This week:
The Equity team asked, “What does breaking into venture capital look like today, and how is it changing?”
My friends on Found talked to the co-founders of Change about how/why they built a crypto-centric API for charitable giving.
The Chain Reaction crew talked about — what else? — the recent massive changes to the way Ethereum works, and the perhaps-surprising impact “the merge” had on the market.
techcrunch+
Most stuff on TechCrunch is free. So what’s behind the TechCrunch+ paywall? Here’s what TC+ members were reading most:
Why did ETH tumble after “the merge”?: Was the market just correcting after a stretch of hype? Did they “alienate a core demographic?” Jacquelyn does a deep dive on the possibilities.
YC’s Seibel clarifies “misconceptions” about the accelerator: What do people get wrong about Y Combinator? YC’s Michael Seibel stopped by the Equity podcast to chat, and Natasha and Alex pulled some key excerpts out of the transcript for your perusal.
Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.
Global app spending reached $65 billion in the first half of 2022, up only slightly from the $64.4 billion during the same period in 2021, as hypergrowth fueled by the pandemic has slowed down. But overall, the app economy is continuing to grow, having produced a record number of downloads and consumer spending across both the iOS and Google Play stores combined in 2021, according to the latest year-end reports. Global spending across iOS and Google Play last year was $133 billion, and consumers downloaded 143.6 billion apps.
This Week in Apps offers a way to keep up with this fast-moving industry in one place with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and much more.
Today’s dominant social networks are losing their grip on the youngest generation of internet users. Last month, we looked at how one of the world’s largest social networks, Facebook, had begun to fade in relevance — and was losing its position in the App Store’s Top Charts, as a result — while young people turned to apps like BeReal and TikTok instead. But there still seems to be this sentiment among a number of app makers that trying to compete in social is a lost cause. That’s not necessarily true anymore. Just as Instagram grew under Facebook’s shadow, there’s room for other apps to grow outside TikTok — an app that is today seen as more of an entertainment platform than a place to connect with close friends (though TikTok is pushing to change that).
BeReal’s rise is proof that alternative networks that prioritize real-world friendships can still find traction. In fact, younger people are hungry for a place to be themselves and keep up with their friends outside of feeds filled with creator content and targeted ads.
But BeReal’s long-term success is not a given at this point, even though the app currently has established itself as a leader in the App Store’s Top Five, and is often the No. 1 app, at times, in global markets. That’s a good start, but BeReal has yet to figure out key parts of its business, like monetization, and is struggling to communicate both with its own users and the wider public.
For instance, when the app went down this week, the company vaguely tweeted a statement — “yup, we’re on it” — that largely left its user base in the dark about what was going on. By comparison, when Instagram experienced a briefer, partial outage the following day, it spelled out that it understood the situation by noting that some people were “having trouble accessing Instagram,” and that it was working to fix things as quickly as possible and to stay tuned. It also added the #instagramdown hashtag to increase the visibility of its post.
The company is behaving poorly for an app in its position. There are times to be cute and cheeky with social media posts — but those times are not amid outages and other serious platform issues. BeReal’s misstep with users will be forgiven for now. But as the company scales, the team’s inability to communicate with its own users and the media could become a larger problem.
To date, BeReal has only offered off-the-record briefings with select press. It doesn’t have an in-house comms team. It doesn’t pitch or post to a blog to keep its users updated. It doesn’t even publish useful release notes on the App Store.
App Store release notes — so helpful! Image Credits: BeReal
And BeReal couldn’t respond to a series of simple questions about its outage — like what caused it or how widespread it was. This begs the question as to how the company will handle a more serious crisis — like a hack, data breach or another incident involving bad actors on its platform. It can get away with this for now — but not forever. Gaining the top spot on the App Store as Gen Z’s favorite social app also comes with responsibilities, and so far, BeReal has been dropping the ball on that front.
BeReal’s missteps, however, could open the door to more social app newcomers who offer a service that’s built on more than a gimmick.
For what it’s worth, TikTok has realized this market still has tons of unclaimed territory. Last weekend, it rolled out its shameless BeReal clone, TikTok Now, as a standalone app in global markets outside the U.S. The new app already found some traction, moving into the Top 100 social apps on iPhone in five markets, and the Top 500 in 38 within roughly a day’s time. A couple of days later, it ranked in the Top 10 social apps in 39 countries and the Top 100 in 24. And it presents almost nothing new to users beyond a TikTok-produced version of the BeReal format with added support for video. (And maybe less horrible-looking selfies?)
If a complete knock-off like TikTok Now can climb the charts, imagine what a truly unique app could do. (Or even a newcomer that simply revives older social networking concepts for this modern era. Time to bring back Path?) There are few times when it would make sense to build a social app. But as the old guard is inching toward retirement, that time is surely now.
YouTube takes on TikTok with creator ad share for Shorts
Image Credits: YouTube
YouTube has stopped messing around. It’s taking on the TikTok threat in a way that not only benefits its competitive position in the short-form video market, but one that allows it to expand its ad load across a new surface. This week, the company announced Shorts creators will now qualify for its revamped YouTube Partner Program, which allows them to earn ad revenue from YouTube.
The existing Partner Program for long-form video requires YouTubers to have 1,000 subscribers and 4,000 watch hours. This won’t change. But starting in early 2023, creators will be able to apply to the program if they meet a new Shorts-specific threshold of 1,000 subscribers and 10 million Shorts views over 90 days. As members of the Partner Program, these creators will earn 45% of ad revenue from their videos. (Ads will run in-between Shorts and the money is pooled. Creators keep 45% of the revenue from the amount allocated to them, not to licensing. Some creators don’t think that’s a great deal, however.)
The changes are designed to onboard creators gaining traction or going viral on Shorts, whether it’s with original content or clipping from other people’s videos (which is totally okay with YouTube).
To further sweeten the pot, YouTube also introduced Creator Music — an online service where creators can choose music for their videos by examining the costs associated with licensing specific tunes or they can browse songs they can use without paying upfront. The latter opts them into a rev share with music rights holders.
Spotify gets into audiobooks
Image Credits: Spotify
Spotify believes audiobooks could be its next big revenue driver, so on Tuesday, the company launched its debut audiobook catalog in the U.S. with somewhere north of 300,000 titles to start. Initially, the selections in the app will be recommended by Spotify editors. But over time, the company says it plans to expand audiobooks to other markets, grow its selection and begin to use algorithmic recommendations to suggest books to users, as it does now with its other audio formats.
The company had earlier pointed to research indicating the audiobook industry is expected to grow from $3.3 billion as of 2020 to $15 billion by 2027. It forecast its audiobook sales could reach a gross margin of above 40%.
The books are found in a new Audiobooks hub in the app and are purchased à la carte at variable pricing — a move Spotify believes will allow lesser-known authors to find an audience. And notably, they’re not being sold via in-app purchases.
Instead, the app offers previews of the book’s content for free, but users will be directed to Spotify’s website to complete their purchases. Afterward, the purchased audiobook will be unlocked in the app and saved to the user’s library.
It’s worth noting Spotify’s ability to avoid in-app purchases on iOS follows a policy change Apple announced back in March which focused on “reader” apps — meaning those designed to provide access to digital content like music, books, videos or magazines. Apple said these apps could now use external links, if approved. Google, meanwhile, began piloting third-party billing earlier this year, with Spotify as its first customer.
Spotify didn’t clarify its agreements with the app stores, but says its model is “compliant.”
Image Credits: Spotify
Meta is sued for tracking users with a workaround to ATT
A new class action lawsuit claims Meta circumvented Apple’s App Tracking Transparency (ATT) privacy protections to track its users, even after those users denied the company permission to do so via the ATT prompt. The plaintiffs allege Meta had followed its users’ online activity by injecting JavaScript into the websites they visited when using Facebook’s in-app web browser. This was effectively a way to work around the protections ATT supposedly puts into place, the suit alleges. Meta has denied the claims, calling the lawsuit “without merit.”
Users rightly believe that when they opt out of tracking on iOS, they simply won’t be tracked. But that’s not necessarily true. Companies had been looking for workarounds to ATT since it was announced, Meta included.
This isn’t the first time an app has been suspected of using the browser to track users without their consent. This summer, TikTok was also accused of injecting code to track users’ keystrokes when users visited third-party websites from within the TikTok app. The company denied those claims as well, saying the app’s code was used for debugging, troubleshooting and performance monitoring, and for protecting users against spam and other threats.
The case will likely be highly technical but will be an interesting one to follow as the extent of ATT’s ability to protect consumers is decided.
Weekly News
Platforms: Apple
Image Credits: Matthew Panzarino / TechCrunch
Apple released the first major update to its iOS 16 operating system with fixes that address issues with the camera shaking in some third-party apps on iPhone 14 Pro and Pro Max as well as the paste permissions bug which popped up a request to read the clipboard data too often, along with other issues. The company had earlier promised the fixes would be out next week, making Thursday’s launch ahead of schedule. Beta testers had noted the permissions bug and camera shaking issues had been resolved, suggesting Apple was nearing a public release.
Apple said it would raise app prices and in-app purchases on the App Store in countries using the euro and in some Asian markets, starting October 5.
Eagle-eyed iPhone owners noticed that Apple’s documentation said the use of the iOS 16 haptic keyboard feedback could impact your battery life.
A report by The Information takes a look at how Apple’s App Store rules are impacting NFT startups. The marketplace apps take a percentage of sales but Apple would charge them a 30% cut, leading them to largely use their apps as NFT showcases without support for transactions.
Platforms: Google/Android
Microsoft said it would expand Windows 11’s support for 20,000+ Android apps and games via the Amazon Appstore to 31 more countries within a few weeks.
E-commerce & Food Delivery
Spain fined the food delivery app Glovo €79 million ($78 million) for denying 10,600+ gig-workers a labor contract following the implementation of the country’s “riders law” in August 2021, which required food delivery platform riders to be made employees on formal labor contracts.
Chinese e-commerce giant Pinduoduo’s overseas shopping app known as Temu managed to claim the top spot among Android shopping apps in the U.S. in mid-September before dipping to No. 15 this week.
Fintech
Robinhood’s fintech app added Circle’s USDC as its first stablecoin, as Binance and WazirX exchanges plan to delist USDC in favor of other USD stablecoins.
India’s central bank is working to expand UPI to several countries in Asia and the Middle East and elsewhere and is setting up an international subsidiary. In addition, a lighter version of the payments system, UPI Lite, is now live with eight banks, including HDFC, SBI and Kotak.
Cash advance apps grew 69% year-over-year, more than other fintech sectors, Apptopia reported. Meanwhile, new installs of top consumer fintech apps were down 14% year-over-year in Q3, but were are up 19.4% over Q3 in 2020. The economy has driven some categories’ downloads higher, including budgeting and tracking apps, buy now/pay later apps and even traditional banking apps, while demand for mobile banks and teen banks declined.
Image Credits: Apptopia
Social
Image Credits: BeReal
Gen Z’s new fav app BeReal experienced a multi-hour outage on Wednesday, tweeting vague things like “yup, we’re on it” and “all good now,” and refusing to answer further questions.
Facebook launched a Reels APIwhich allows sharing to Reels from third-party apps.
Facebook added new Pages features designed to help creators get discovered and connect with their followers, including a way to make content exclusively available for top fans and subscribers, a way for creators to endorse other creators they like, a “rising creator” label and new post and story templates, among other things.
TikTok expanded its political content policy guidelines to limit the ability of politicians and political groups to engage in fundraising on its platform, with a ban on the use of tipping, gifting and other monetization features for soliciting campaign donations.
TikTok also launched a new feature for #BookTok fans in partnership with Penguin Random House that allows users to share and link to their favorite books within their videos. When clicked, the link directs viewers to a page with details about the book, including a brief summary and a collection of other videos that are linked to the same book.
TikTok also rolled out its comment “dislike” button to users worldwide. The button, similar to Reddit’s downvote, allows users to signal which comments they think are irrelevant or inappropriate.
Instagram is no longer breaking up Stories under 60 seconds into separate clips, it says. The change is rolling out worldwide.
Bloomberg takes a look at the 70+ lawsuits against Meta, Snap, TikTok and Google where parents are holding the software makers responsible for their products with liability claims, which include blaming the algorithms for kids’ mental health issues.
A Delaware judge ruled Elon Musk will be allowed to amend his counterclaims to argue that Twitter’s $7.8 million severance payment to whistleblower Peiter Zatko can be used to try to justify why Musk should be allowed to exit the acquisition deal.
According to findings from a new Pew Research report that examined Americans’ use of social media for news consumption, 33% of TikTok users now say they regularly get their news on the social video app, up from just 22% in 2020. Meanwhile, nearly every other social media site saw declines across that same metric — including, in particular, Facebook, where now only 44% of its users report regularly getting their news there, down from 54% just two years ago.
Image Credits: Pew Research
Photos
Microsoft’s updated Photos app for Windows 11 begins rolling out to Windows Insiders. The new app introduces a new photo managing experience, with a new gallery, backup to OneDrive support, a “Memories” feature and more.
Halide’s camera app for power users was updated with support for iPhone 14 Pro camera technologies, including 48MP ProRaw images, manual focus depth capture, the ability to switch between 48MP to 12MP capture quickly and other features. Obscura 3 also updated with support for the 48MP camera on iPhone 14.
Obscura 3 version 2022.12 is available now (okay, last night but I was busy entertaining ).
It introduces support for the iPhone 14 Pro’s 48 megapixel camera, and its unique 2× mode.
A new bill in India aims to regulate over-the-top communication apps, like WhatsApp, Telegram and Signal, allowing the government to intercept encrypted messages in some circumstances, including in a public emergency or in the interest of public safety.
WhatsApp’s Indian payments business lead Manesh Mahatme stepped down after 18 months and will be rejoining Amazon.
Meta must pay the walkie-talkie app maker Voxer a royalty and $174.5+ million for violating two of its patents with Facebook Live and Instagram Live, a Texas jury ruled.
WhatsApp announced an expanded partnership with Salesforce to allow businesses to manage their WhatsApp conversations with their customers from the Salesforce platform.
Telegram announced a number of new features, including emoji statuses, dozens more emoji reactions available through a new panel, an expanded selection of custom emoji for Premium users, improved login flow and other updates.
Instagram confirmed it’s developing a feature that would protect users from unsolicited nude photos in their DMs. The feature will be opt-in when launched to the public, according to findings in the app’s code.
A request to our community: Signal is blocked in Iran. You can help people in Iran reconnect to Signal by hosting a proxy server. If you’re willing and able, please follow the instructions here: https://t.co/hznCI9EwCa 1/2 #IRanASignalProxy
Spotify launched a new space-themed digital destination on Roblox called Planet Hip-Hop, which will soon feature up-and-coming female rapper Doechii. The company had already launched its first music experience in Roblox, K-Park — a K-pop themed world — in May 2022.
Sony Music pulled its catalog from Resso, TikTok’s sister app and music subscription service. The move follows reports that TikTok is developing a TikTok Music app that could bring a service like Resso to more markets, including the U.S.
Triller settled its lawsuit with Timbaland and Swizz Beatz. The latter two parties said they had not been paid when Triller acquired their Verzuz last year. Deal terms weren’t disclosed.
Gaming
Netflix added a new title to its gaming lineup based on its popular show “Nailed It!” The new game, Nailed It! Baking Bash, will launch on October 4, just before Season 7 of the bake-off competition series returns on October 5. The game is one of only a handful so far directly tied to Netflix’s TV shows, alongside its games for “Stranger Things” and the Exploding Kittens game, which will soon be a series. But the company intends to launch a number of games related to its shows, including those for “The Queen’s Gambit,” “Shadow and Bone,” “La Casa De Papel” and “Too Hot To Handle.”
Logitech launched its $350 G Cloud Gaming Handheld powered by Android, which offers a 7″ display, a Snapdragon 720G and Xbox and GeForce Now cloud gaming support. The handheld arrives on October 17.
The U.S. Dept. of Justice will be allowed to join the arguments in the Apple-Epic Games lawsuit, the court ruled. The Justice Department said it needs time to explain how the lower courts misinterpreted antitrust law. It’s also reportedly in the early stages of preparing to file an antitrust lawsuit of its own against Apple.
Health & Fitness
With the Apple Watch Ultra launch, the App Store gained two more Apple first-party apps: Siren and Depth. The former is designed for emergencies when you’re hurt or lost and need someone to find you. It causes the watch to emit an 86-decibel sound pattern that can be heard up to 600 feet away. Depth is for underwater diving up to 130 feet (40 meters). Both are exclusive to the Ultra.
Utilities
Image Credits: Amazon
Amazon announced it’s bringing a new accessibility option to its new line of Fire tablets with the addition of “Tap to Alexa” functionality — a way to interact with the company’s Alexa voice assistant without actually speaking.
Government & Policy
Former employees from the App Association (ACT), which claims to fight for developers’ rights, told Bloomberg that the advocacy organization receives the vast majority of its funding from Apple, which also plays a dominant role in shaping the group’s policy positions.
Security & Privacy
Swiss VPN app maker Proton VPN is pulling out of India over the country’s new rules requiring customer data collection. Others in the space have already left, including Surfshark and Nord.
Unsealed court documents in a Facebook privacy lawsuit indicate that a number of apps from Zynga, Yahoo and others had extensive access to users’ friends’ data, similar to what happened with Cambridge Analytica.
London-based fintech app Revolut confirmed a cyberattack had exposed the personal details of 50,150 of its customers, per a breach disclosure in Lithuania.
Funding and M&A
Fintech Portabl raised $2.5 million in seed funding led by Harlem Capital Partners for its identity management and protection solutions for financial services, banking and consumer apps.
Alternative social network Parler restructured to operate under a new parent company known as Parlement Technologies and announced $16 million in funding to aid with infrastructure. Details of its backers weren’t disclosed, but previously the app had been backed by Republican donor Rebekah Mercer.
Seattle-based retail software maker Swiftly raised $100 million in Series C funding at a $1B+ valuation for its grocery store retail software and branded apps.
London-based fintech app Monese, which provides digital banking and remittance services to customers in Europe, raised $35 million from global banking giant HSBC.
Malaysia-based Respond.io raised $7 million in Series A funding led by Headline for its dashboard that helps businesses juggle multiple messaging apps to reach their customers.
OYE, a Spanish/English wellness app backed by Colombian Reggaeton artist J Balvin, raised a $4.1 million pre-seed round led by MasterClass and Outlier.org co-founder Aaron Rasmussen.
Tweets
Samsung shamelessly copied Apple #iOS16 Lock Screen in ONEUI 5 Beta 3, they didn't even try to make it look or work differently pic.twitter.com/Mdng8xGbDA
Version 5.8.1 is now available with fixes to the bugs my idiot Maker introduced in last week’s update! Here’s the full changelog: https://t.co/ZdWhT4dje4
Fintech Portabl 
