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Technology
Square, the company that provides payments and other business services to merchants, is today taking another step in its gradual expansion outside of the U.S. Stand — one of Square key pieces of hardware, turning an iPad into a point of sale system — is launching in the U.K.
It will sell for £64 (+VAT) and will be sold alongside existing products that Square offers in the U.K. — Square Reader, its Point of Sale app, Instant Deposit, Virtual Terminal and Cash app. (Square Register, the companyall-in-one product for larger businesses that sells for $999, is not yet available outside the U.S.)
The move comes just over a year after Square launched in the U.K., its first market in Europe, and also on the heels of a big move from two of its biggest competitors: last week, PayPal said it would acquire iZettle, sometimes referred to as &the Square of Europe,& for $2.2 billion.
Those two developments underscore both the challenges and opportunities ahead for Square.
On the one hand, the company is tapping into a big market opportunity by creating services that cater to the often-overlooked small and medium business sector — and the Stand, which extends a tablet into a more interactive payment terminal, plays into that.
On the other hand, the consolidation underway between iZettle and PayPal points to how stronger competitors — PayPalmarket cap is nearly four times that of Square — going after the same business as Square, will put pressure on the company. (As a point of comparison, iZettletablet stands range in price from £49 to £99.)
Square may be smaller, but it has picked up a lot of loyalty for its services and innovations. Square says that today the company has two million business customers using its products globally. It doesn&t break out numbers by geography or product. But given how many merchants use more than just a phone to take payments and run other sales software (a phone being the basic building block of Squareoriginal card payment processor), it was a much-requested feature.
&Square Stand was built to provide sellers with a unique and beautiful solution that makes taking in-person payments simple, elegant and fast,& said Jesse Dorogusker, Squarehardware lead and designer of the Stand. &Sellers in the U.K. have been asking for a full countertop solution for their businesses since we first introduced Square.&
Despite its popularity and how it seemed to appear and take off amid a surge of smartphone and tablet adoption and use in the U.S., Square has taken a very deliberate route when itcome to growing outside its home country, where payment methods, regulations and languages might all be different. Today, the company has operations in theUnited States, Canada, Japan, Australia and the U.K. It also has an office in Ireland but not active payments or other business.
Asked about where Square might like to go next, the company has remained mum.
&Nothing to share on that front,& a spokesperson said. &We are just getting started here in the U.K. and iterating fast to bring new services to market. Since we entered the U.K. market in 2017 we have continued to bring our U.K. sellers important products at a steady pace.&
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Write comment (98 Comments)Apple has decided to work with Volkswagen for some of its self-driving car efforts, The New York Times reported today. The plan, according to the NYT, is to turn some of VolkswagenT6 Transporter vans into autonomous shuttles for employees.
However, this project is reportedly behind schedule and taking up much of the time of Appleautonomous driving team. According to the NYT, Applelengthy talks pertaining to partnerships with manufacturers like BMW and Mercedes-Benz have ended.
A Volkswagen T6 van
Earlier this month, Applefleet of self-driving cars registered with the California Department of Motor Vehicles grew to 55 vehicles.That means Apple has the second largest fleet of self-driving cars in California, with General Motors& Cruise coming in at number one. Applestandard autonomous vehicle tests rely on Lexus SUVs that have been equipped with sensors and autonomous hardware.
I&ve reached out to Apple and Volkswagen, and will update this story if I hear back.
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Write comment (93 Comments)A lot of people ask me how I choose to invest in startups.StageRevenue metricsSector
I&m not proactively funding at different stages. I&m proactively funding brilliant people trying to solve hard problems.
Focusing on this simple goal of identifying and enabling amazing entrepreneurs to create a better tomorrow is the crux of my investment strategy.
My startup investment &formula&
A lot of venture funds try to optimize for returns.They run complex ratio economic models to determine what their diluted value will be at the end of the life cycle of the optimal and non-optimal case of every given company.
I don&t do that. I just try to fund the best and brightest.
I love working with the smartest and brightest people in the world on some of the hardest challenges. And oftentimes I make a return as a result of that.
I weigh investments based on two vectors:
- Return
- Happiness
The primary litmus I put on any investment is on behalf of my LPs. Will the capital have a potential of 6-10x returns in five, eight, 10 years If not, itnot going to be worth our time and money.
But itnot the only factor.
If we&re happy doing the work that we&re doing on behalf of this company and relatively confident that we can return for our LPs, itan investment worth making.
It seems counterintuitive, but it actually works — our first fund is showing 8-9x returns.
I&ve had the experience where I&ve lost all my money. But more often than not, I&ve had the other experience.
A lot of companies might not have 100x return, but they have 5-6x return and they&ve solved an important problem. By measuring both the financial return of the investment and the happiness of being a part of that journey, I can holistically gauge the net outcome.
![How [and why] I invest in startups](https://techcrunch.com/wp-content/uploads/2017/02/spiral-road.png)
Image: Bryce Durbin/TechCrunch
Know what you don&t know
Itreally easy to box yourself out of really great companies by having mathematical guard rails that don&t necessarily hold up over time.
At the time of investment, it can be difficult to anticipate the future products that end up being the largest revenue drivers.
If you had the insight to know that the value they were returning to customers was great enough that eventually they would find a way to monetize it, you would have invested in Facebook.
But if you&re operating on a purely mathematical model, you might not have been able to do that.
I remember sitting down with one of my mentors around eight years ago.He listed 10 companies on a white board and said &rank for me from top to bottom which company you think is the most valuable. Now rank for me from top to bottom which company has the most revenue.&
I had a mix of ones, fives and sevens; whether I thought they were going up or down the list on both sides.
It turns out that the company with the least amount of revenue was the most valuable. And the company with the most amount of revenue was the least valuable.
![How [and why] I invest in startups](https://techcrunch.com/wp-content/uploads/2018/01/gettyimages-688899343.jpg)
Image: Lee Woodgate/Getty Images
What I look for in founders
When I make an investment in a startup company, I plan on the likelihood that I&ll end up working with that person for five to 10 years.
I don&t have a magic formula, but there are four important factors that must all check out for me to invest in a founder.
1. Domain Expertise
The best founders have some unique insight in the domain where they&re building a company that gives them some edge. I often find that itone of three factors:
- Deeper understanding of consumer behavior
- Historical insight
- Data
Thereusually some initial edge that is really clear and that gives you confidence that they have absolute domain expertise for whatever problem they&re trying to solve.
2. Grit
Founders need some capacity of perseverance through really, really tough situations.
I&ve never heard a single story of someone building a company where everything went the way they thought it was going to go.
And when things don&t go the way you think they&re going to go, will you have the capacity and the willingness and the perseverance to sort of go through it
This one is difficult to assess, and I generally go by gut instinct on meeting with the founder.
3. Purpose
Is whatever they&re building someway connected to a greater purpose in which they&re personally invested
Whatever they&re building has some resonance relative to who they are, how they are and what they believe — because belief systems don&t go away when you get into trouble or come across a difficult challenge.
4. Charisma
Therea level of charisma that many great founders have, especially if they want to be the CEO of their company.
When I meet with a founder with true charisma, I usually come away feeling like I want to quit my job and go work for them. Because if I don&t get that sense or that feeling that I want to quit everything that I&m doing to go work for them, the best person for the job that they are hiring for isn&t going to have that feeling either.
Recruiting is the hardest thing that any CEO has to do.
They have to be able to sell themselves, sell their vision, and sell their company. If they don&t have the charisma to sell it to me, I find it hard to believe that they&re going to be able to sell it to somebody else.
![How [and why] I invest in startups](https://techcrunch.com/wp-content/uploads/2018/03/gettyimages-494774883.jpg)
Image: Boris Austin / Getty Images
What makes me wary of founders
A founder can do many things to represent themselves poorly, but here are three:
1. Display questionable principles
I&m a very principle-driven person.
I have certain litmuses around gender equality, racial equality and working with good humans. I only want to work with founders and invest in companies that share my principles.
I want to be connected and associated with people who represent their brand in a way that I would represent mine.
Itso easy to get distracted by the numbers and models and projections — and don&t get me wrong, these are important.
But also, I&m looking at human beings build businesses. I want to work with good people and people who respect other people and people who have good moral fiber.
2. Lack of domain expertise
If the person doesn&t know their numbers itan immediate killer.
I often drill down into the domain the founder is working in. There are often brand new, disruptive ideas that I&ve never seen before. Iteasy to get caught up in the excitement of that, but the economics still need to make sense.
If someone doesn&t understand the economics and the motivational drivers within a given sector, it becomes rapidly clear whether or not somebody has domain expertise.
And if they don&t understand the domain and have a unique insight, they&re probably not going to be able to build something special.
3. Lack of respect for time
The biggest key people often forget when they&re busy trying to sell what they&re doing is a basic, human understanding of other people.
Smart people know the right time and the right way to connect with someone.
I&ve answered cold emails from people who are really well-formulated, thought out, respectful of my time and respectful of me.
I&ve taken elevator pitches from people.
I&ve had meetings set up with strangers.
If you know somebody hasn&t even sort of taken the time to consider your time, they&re probably not going to consider the time of other people. And I think thatgoing to negatively affect them and their company.
When a founder or company approaches me in a way thatnot considerate and respectful of my time and what I&m interested in, I have a hard time looking past that.![How [and why] I invest in startups](https://techcrunch.com/wp-content/uploads/2017/07/investor-founder-sexual-harassment-policy.jpg)
Image: Bryce Durbin/TechCrunch
My role as an investor in the growth of a startup
I believe the job of the investor goes way beyond fueling the company with cash. Itabout fueling the company with expertise, intelligence and connectivity.
On paper, growing a startup can roughly be summarized as follows:
- Early-stage validation
- Have an idea
- Crank out an MVP
- Get that MVP to customers
- Establish feedback loop
- Make sure customers appreciate the product
- Establish a customer/product development feedback loop so the customer can improve the product
- Build a company
- Hire to fill initial capacities
- Find product market fit
- Market product to reach all target consumers
- Build teams
- Raise more money
Over the last 12 years of being an investor I&ve seen companies at every one of those life cycles. Each one of those transitions is a different discipline; a different challenge in and of itself.
As a founder, I think itreally important to surround yourself with people who have seen it before, understand it, know what itlike and know how to persevere through it.
Thatwhat an investor group does.
![How [and why] I invest in startups](https://techcrunch.com/wp-content/uploads/2015/07/growth.jpg)
Image: Shutterstock
For example, going from a bootstrap company into a company that can scale is a tricky discipline.
A lot of founders make the really early mistake of hiring people just like them, instead of hiring people who bring unique diversity and expertise to their team.
And after the initial batch of hires is made, you transition from micromanaging into macromanaging; building startups within your startups, the variable divisions required to properly scale the company.
Investors who have helped companies through similar transitions can help you avoid pitfalls associated with these milestones. These are the very pitfalls that often derail early-stage companies.
Fast-forward to the growth stage and fundraising is a monster in and of itself. You have these checkpoints where you&ve got to go and raise additional funding — and the future of the company relies on executing.
And then eventually you get to the point where either you&re going public or therean acquisition. Thatincredibly tricky and not something that a lot of founders are ready for.
Every companysituation is different.
If you&re a small team — two or three people — you might look to add 10 investors. I recommend building an investment team that has variable experience across different firms and individuals.
A lot of founders only target big firms. But you really want to get the person who understands your needs, your challenge and can help guide you through it — regardless of where they come from.
It all comes back to the purpose and principles
Make no mistake: I have a rigorous process around numbers.
Estimated TAM, IRR, NPV —we run them all.
But when weighed against potential impact for humanity and capability of individuals at the helm, I put slightly more value than most investors.
Maybe in the long run, I&ll fall into an even more disciplined manner of allocating capital.
But for now, I&m just going to keep working with great people on the problems that I want to work on.
Find good people solving tough problems and the financials often sort themselves out.
This post was originally published on Atrium.
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Write comment (93 Comments)Tinder will now help you find matches with those people you may cross paths with in your day-to-day life. As promised earlier, the company today is announcing the launch of a new location-based feature that will narrow your list of potential dating prospects to those who hit up your same bar for after-work drinks, or who stop by your favorite coffee shop for their daily caffeine fix, or who work out at your same gym.
Yes, thatright — you no longer have to say &hello& in real life — you can match first, then speak.
This is what itcome to, friends. Even the &meet cute& story is now a dating app product.
The feature, known as Tinder Places, was previously spotted during beta tests.
Starting today, Tinder Places is formally being announced as a public beta test thatunderway in three cities:Sydney and Brisbane, Australia and Santiago, Chile. (It was being tested privately in these markets prior to now.) The plan is to collect user feedback from the public trials, and tweak the product before it launches to all users worldwide, the company says.
The idea of sharing your location with strangers, however,is a bit creepy— especially considering that Tinder users are not always respectful. But Tinder believes that the fact itshowing you people you might actually run into in real life will actually prompt more civility in those initial chats.
&I do think that — and this is a personal hypothesis of mine — if you match with someone who you know goes to the same place as you, I think that will set a very different tone to the conversation than someone who is more or less anonymous as an online match on a dating platform,& says Samantha Stevens, director of Location Products at Tinder, who led the productdevelopment.
She says the larger idea here is to present users with potential matches who you already have things in common with, as reflected by the places you go.
&The places that you go say a lot about who you are as an individual, what you value, your hobbies, your interests,& she continues. &So being able to match with someone on Tinder who shares those same things with you, we believe creates a more genuine match and a better conversation.&
That said, not everyone would want strangers on a dating service to know where to find them.
But Stevens explains Places has a number of safeguards built-in to make users feel more comfortable, and to limit the featureability to be used for stalking.
&As a female who designed this feature, I personally made sure that I would feel safe using it,& she says.
For starters, the feature is opt in, not opt out.
It leverages Mapbox andFoursquarePilgrim SDK to identify and categorize places you go, and it only shares those places Foursquare deems &social.& (Foursquare is able to &wake up& Tinderapp for background location, in case you&re wondering how this works). Tinder says it will not record places like your house, the office building where you work, banks, doctors& offices and other venues that are either too personal or not relevant to matching. All this appears in a separate section of the Tinder appinterface.
Plus, your place visits aren&t recorded to the app in real-time. Instead, Tinder waits until at least 30 minutes before a place shows up, or even longer. It randomizes the time before someone appears associated with a particular venue in order to limit others& abilities to deduce peopleroutines.
In addition, users who are participating in Places will get an alert when a new place is added, and can then choose to toggle that place off so itnot shown right away.
You also can tell Tinder to never show a particular place again after its first appearance. So, for example, if you never want to meet people at your gym when you&re all hot and sweaty, you can disable that place from ever appearing.
Your association with a place also deletes from the app after 28 days, not only as a privacy protection, but also because it helps keep data fresh, Stevens says. (After all, just because you went to that hip bar a year ago does not make you a person who goes to hip bars.)
Of course, a dedicated stalker could make a note of your favorite haunts and attempt to locate you in the real world, but this would require extra effort in terms of writing things down, and trying to determine your patterns. It wouldn&t be impossible to start making some connections, but it would require dedication to the task at hand.
Despite the safeguards, itunclear that the real-world benefit to users is significant enough to opt in to this additional data collection. While there are arguably use cases for matching with those you cross paths with, simply visiting the same coffee shop isn&t necessarily an indicator of a potential for a relationship. That comes down to a lot of other factors — including, most importantly, that unpredictable chemistry — something neither Tinder, nor any other dating app, can determine — and a set of shared values. At best, this &place data& is an icebreaker.
But for Tinder, location data on its users holds far more value.
The company has no plans to delete its own records of your jaunts around town. You can&t push a button to clear your data, for instance. If you want it gone, you&ll need to delete your Tinder user account entirely, we understand.
The company says users haven&t asked for this sort of functionality during tests. Rather, they&ve opted in to the feature in full force, with very few qualms about their personal data or its usage, it seems.
&In terms of opt-in rates — and we&ll see how this behaves as we go to a bigger population — but we&re at like 99 percent,& says Tinder CEO Elie Seidman, who moved over from Match GroupsOKCupidtop position to lead Tinder in January. &I don&t know that we&ll see that hold up on a broad population, but I think we could expect this is a 90-plus percent opt-in rate.&
That seems to contradict the shift in user sentiment around personal data collection in the wake of the Facebook-Cambridge Analytica scandal, which has led the worldlargest social network to rethink its practices, and potentially face regulation. The fallout has led to users becoming more cynical and wary of social apps asking them to share their data — and in the case of Tinder, where itabout — well, frankly, romance and sex — one would think users would give &opting in& a bit more thought.
Seidman doesn&t believe theremuch for users to be concerned about, though. Thatbecause Tindermain business isn&t ads — itsubscriptions to its premium service, he explains.
&We&re not using [personal data] to sell advertising,& the exec says. &If you think about the trade between our members and us — like, what do you get in exchange for the data In one place, you get photos of kids, right And obviously, a lot of ads. And in the other place, you get connected to the most important part of your life. So I think ita very different thing,& Seidman says.
Thatcertainly a starry-eyed way of viewing Tinderpotential, of course.
One could argue that &photos of kids& — meaning your family, your friends and their family, and generally, those broader connections you have through social networks — are at least equally important to your romantic relationships, if not more valuable. (Especially if you&re just using Tinder for hook-ups).
Tinder claims that itnot using the location data to target users with its in-app ads, but that doesn&t mean the option is off the table forever. Having a massive trove of location data on users could be an advantage there, as well as a way to improve its algorithm, and even potentially to help it expand into real-world events — something Stevens didn&t rule out, saying if that was something a large number of users demanded, Tinder may consider it.
Meanwhile, a better matching algorithm would be a significant competitive advantage for Tinder, which is today fending off other newcomers, too, not just the desktop web-era dating sites. It&sembroiled in back-and-forth lawsuits with top rival Bumble, for example, and even itself is adopting Bumble&women speak first& feature.Given that the industry at large has stolen the swipe to match mechanism Tinder popularized, that seems fair enough.
The new location feature won&t be as easily copied, Seidman believes.
&This is the first time, on an experience before people match, where we&ve changed — in a really fundamental way — the user interface. Of course, it feels very much like Tinder,& he says. &Therea large body of work here and the team has worked for quarters to do this. Ita product that inherently works better with scale. We&re drawing a smaller circle around the universe,& Seidman adds. &You need Tinderlevel of scale to make this work.&
Tinder officially claims &tens of millions& of users worldwide, with estimates putting that figure at more than 50 million.
The company hasn&t provided a time-table as to when location-based dating will roll out worldwide.
Photo credits: illustration: Bryce Durbin; screenshots: Tinder;couple: Philip Lee Harvey/Getty Images
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Write comment (99 Comments)Betaworks is hosting TechCrunch&sInclude Office Hoursfor the month of May. For the first time ever, Include Office Hours will be bi-coastal — held in San Francisco and New York on the same day at 2pm local time at each location. On Tuesday, May 29th, partners Peter Rojas and Matt Hartman will be meeting with startup founders in SF and NYC, respectively. Founders can apply here.
TechCrunch started theInclude program in 2014 with theaim of utilizing its networks to open opportunities for underrepresented and underserved founders in tech. One of the principal elements of this program is the Include Office Hours program. Throughout the year, TechCrunch joins with partners at various VC firms to connect with founders in private 20-minute meetings. Founders will get critical feedback and advice on various aspects of their business.
Founders from various backgrounds are encouraged to apply. Underrepresented and underserved founders include, but are not limited to, veteran, female, Latino/a, Black, LGBTQ and handicapable founders.
The May Include Office Hours will be hosted by betaworks on May 29th from 2-4pm local time in each city. Betaworks is a startup studio and venture capital fund focusing on building and investing in engineering and design driven consumer technology products. Apply here.
Meet the participating partners:
Matt Hartman, Partner
Matt studied Cognitive Science and Computer Science at the University of Pennsylvania and holds an MBA from the Kellogg School of Management at Northwestern University.
Peter Rojas, Partner
If you are partner/managing director of a firm and are interested in hosting an Include Office Hour, email This email address is being protected from spambots. You need JavaScript enabled to view it..
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Uber CEO is in Paris this week meeting with the French president to talk tech in Europe andexpanding its insurance coverage in the region, but back in the U.S. the company is moving ahead on another kind of expansion.
TechCrunch has learned and confirmed that Uber is raising another secondary round of funding of up to $600 million, on a valuation of $62 billion. The fundraising development comes at the same time that Uber is also releasing its Q1 financials — which indicate that the company pulled in $2.5 billion in net revenues, with a net loss of $601 million, and negative EBIDTA of $304 million on a pro forma basis.
Raising between $400 million and $600 million on a valuation of $62 billion (at $40 per share) would indicate that while Uber is recovering from the drop in valuation from its last round with SoftBank at the end of 2017—another round with secondary components that valued the company at $48 billion — itstill not back up (or higher than) its loftiest valuation of $69 billion.
From what we understand, investors participating in the offering, which has yet to close, include Coatue, Altimeter and TPG. Uber employees with at least 1,000 shares can also participate in the financing. According to the terms of offer, no one can sell more than $10 million worth of shares.
That general upward trend is also being reflected in Uberfinancials.
An investor presentation that was shared with TechCrunch indicated that the company$2.5 billion in net revenues was aseven percent quarter over quarter increase, and a 67 percent increase year over year. Uber$304 million losses, meanwhile, were about half the amount they were last year: in Q1 2017, Uberadjusted losses were $597 million. Gross bookings — the total taken for all of Ubertransportation services — was $11.3 billion in Q1, a 55 percent increase compared to $7.5 billion a year ago. At the end of Q1, Uber had $6.3 billion in gross cash.
GAAP numbers indicated net revenues of $2.6 billion with a GAAP profit nearly as big: $2.456 billion. &We had $3 billion of income on a GAAP basis because of the ‘gain& from the Yandex and Grab deals,& a spokesperson said. &Thatwhy we prefer to focus on EBITDA as the best number to show our underlying business in the quarter.&
&We are off to a terrific start in 2018, with our rides business beating internal plan and continuing to grow at healthy rates, while we significantly reduce our losses and maintain our leadership position around the world,& Uber CEO Dara Khosrowshahi said in a statement. &Given the size of the opportunity ahead of us and our goal of making Uber a true mobility platform, we plan to reinvest any over-performance even more aggressively this year, both in our core business as well as in big bets like Uber Eats globally.&
In other words, that could mean losses might get worse in the short-term as Uber continues to invest money in businesses like Eats and JUMP, the bike-share service it acquired for about $200 million earlier this yearto expand them into more markets. As with many tech companies, Uber appears to be focused more on growth than profitability, even as it eyes up an IPO, possibly as soon as next year.
Uber has raised over $21 billion in funding to date.
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