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Technology
Hey everyone. Thank you for welcoming me into your inboxes yet again.
I&m in Berlin where TechCrunch just pulled off another great Disrupt event, we&ve got a lot of great Europe-focused startup content on the site so get to scrolling if your interest is piqued.
If you&re reading this on the TechCrunch site, you can get this in your inbox here, and follow my tweets here.
The big story
Just as Pets.com symbolized the ridiculousness that came to frame the tech industry preceding the Dotcom bubble burst at the start of the century, dog-walking startup Wag might symbolize that SoftBankearthquaking investment overexposure may extend far beyond a one-time WeWork mistake.
This week, the WSJ reported that SoftBank had tossed in the towel on Wag, selling off its massive &nearly 50% stake& in the startup. The report states that SoftBank sold its stake back to the startup at a valuation far below its previous $650 million value. SoftBank is walking away from its two board seats in the process.
Wag will be laying off &a significant amount of the remainder of its workforce,& according to the report.
High-ambition startups stumble all of the time, but SoftBankmoney bag-swinging swagger has left a handful of startups with dollar signs in their eyes and the desire to grow at a pace that they never dreamed of. When LA-based Wag closed its $300 million raise from SoftBank at the beginning of 2018, plenty of people wondered why on earth a dog-walking startup needed that kind of money.
Shift forward to the end of 2019, and startups that have relied on connecting contractor labor with phone-wielding consumers haven&t proven to be as capable in shifting into profitability with Wag seeming to be yet another example.
Needless to say Pets.com and Wag really don&t hold much comparison when it comes to the broader impact. Pets.com was well-known largely because of its hilarious marketing overextension, Wagstumblings are far more impactful, especially as they relate to the reputation of its Japanese benefactor which has significantly reshaped the venture capital market in Silicon Valley and around the world.
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On to the rest of the weeknews.
Trends of the week
Here are a few big news items from big companies, with green links to all the sweet, sweet added context:
- Apple revamps parental controls on iOSApple is giving its parental control tools for iOS new functionality. The new update in iOS 13.3 lets parents set limits over who their kids can talk to and text with during certain hours of the day.
- Away CEO steps down One of the weirder sagas of the week was Away CEO Steph Koreystepping down from her role at the D2C luggage company. The step-down followed a long investigation in the Verge which basically chronicled how awful life was on Awaycustomer service team which painted a pretty ugly portrait of Koreyleadership style. It was a rough article, but after Koreyapology acknowledged that she had made some mistakes and would be trying to fix her management style, most people assumed the saga had wrapped. She stepped down this week following what was reported to be board pressure to do so, turns out they had been wanting to replace Korey and the negative press was the excuse they needed.
GAFA Gaffes
How did the top tech companies screw up this week? This clearly needs its own section, in order of badness:
- An iOS bug is locking up iPhones:[An iOS bug in AirDrop lets anyone temporarily lockup nearby iPhones]
Image: Bryce Durbin/TechCrunch
Extra Crunch
Our premium subscription business had another great week of content. Our good friend Alex Wilhelm (who hired me as an intern four years ago!) is back at TechCrunch and has fired up a new series on Extra Crunch. Herehis first post on the new hot club to join.
The $100M ARR Club
&…Firms with valuations that their revenues can&t back are in similar straits. In the post-WeWork era, some unicorns are starting to look a bit long in the tooth. I suspect that the companies in most danger are those with slim revenues (compared to their valuations), poor revenue quality (compared to software startups) or both.
That said, there is a club of private companies that arereally something, namely private ones that have managed to reach the $100 million annual recurring revenue (ARR) threshold. Itnot a large group, as startups that tend to cross the $100 million ARR mark are well on the path to going public…&
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Read more: Week in Review: Pet startups will be the death of Silicon Valley
Write comment (92 Comments)Seoul and South Korea may well be the secret startup hub that (still) no one talks about.
While often dwarfed by the scale and scope of the Chinese startup market next door, South Korea has proven over the last few years that it can — and will — enter the top-tier of startup hubs.
Case in point: Baedal Minjok (typically shortened to Baemin), one of the countryleading food delivery apps, announced an acquisition offer by Berlin-based Delivery Hero in a blockbuster $4 billion transaction late this week, representing potentially one of the largest exits yet for the Korean startup world.
The transaction faces antitrust review before closing, since Delivery Hero owns Baeminlargest competitor Yogiyo, and therefore is conditional on regulatory approval. Delivery Hero bought a majority stake in Yogiyo way back in 2014.
Whatbeen dazzling though is to have witnessed the growth of this hub over the past decade. As TechCrunchformer foreign correspondent in Seoul five years ago and a university researcher locally at KAIST eight years ago, I&ve been watching the growth of this hub locally and from afar for years now.
While the country remains dominated by its chaebol tech conglomerates — none more important than Samsung — itthe countrystartup and culture industries that are driving dynamism in this economy. And with money flooding out of the countrypension funds into the startup world (both locally and internationally), even more opportunities await entrepreneurs willing to slough off traditional big corporate career paths and take the startup route.
Baeminoriginal branding was heavy on the illustrations.
Five years ago, Baemin was just an app for chicken delivery with a cutesy and creative interface facing criticism from restaurant franchise owners over fees. Now, its motorbikes are seen all over Seoul, and the company has installed speakers in many restaurants where a catchy whistle and the companyname are announced every time there is an online delivery order.
(Last week when I was in Seoul, one restaurant seemingly received an order every 1-3 minutes with a &Baedal Minjok Order!& announcement that made eating a quite distracted experience. Amazing product marketing tactic though that I am surprised more U.S.-based food delivery startups haven&t copied yet).
The strengths of the ecosystem remain the same as they have always been. A huge workforce of smart graduates (Korea has one of the highest education rates in the world), plus a high youth unemployment and underemployment rate have driven more and more potential founders down the startup path rather than holding out for professional positions that may never materialize.
What has changed is venture capital funding. It wasn&t so long ago that Korea struggled to get any funding for its startups. Years ago, the government initiated a program to underwrite the creation of venture capital firms focused on the countryentrepreneurs, simply because there was just no capital to get a startup underway (it was not uncommon among some deals I heard of at the time for a $100k seed check to buy almost a majority of a startupequity).
Now, Korea has become a startup target for many international funds, including Goldman Sachs and Sequoia. It has also been at the center of many of the developments of blockchain in recent years, with the massive funding boom and crash that market sustained. Altogether, the increased funding has led to a number of unicorn startups — a total of seven according to the The Crunchbase Unicorn Leaderboard.
And the country is just getting started & with a bunch of new startups looking poised to driven toward huge outcomes in the coming years.
Thus, there continues to be a unique opportunity for venture investors who are willing to cross the barriers here and engage. That said, there are challenges to overcome to make the most of the countrypast and future success.
Perhaps the hardest problem is simply getting insight on what is happening locally. While China attracts large contingents of foreign correspondents who cover everything from national security to the countrystartups and economy, Koreaforeign media coverage basically entails coverage of the funny guy to the North and the occasional odd cultural note. Dedicated startup journalists do exist, but they are unfortunately few and far between and vastly under-resourced compared to the scale of the ecosystem.
Plus, similar to New York City, there are also just a number of different ecosystems that broadly don&t interact with each other. For Korea, it has startups that target the domestic market (which makes up the bulk of its existing unicorns), plus leading companies in industries as diverse as semiconductors, gaming, and music/entertainment. My experience is that these different verticals exist separately from each other not just socially, but also geographically as well, making it hard to combine talent and insights across different industries.
Yet ultimately, as valuations soar in the Valley and other prominent tech hubs, it is the next tier of startup cities that might well offer the best return profiles. For the early investors in Baemin, this was a week to celebrate, perhaps with some fried chicken delivery.
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Read more: With $4B food delivery acquisition, Korea poised to enter upper tier of startup hubs
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Volkswagen Group and Qatar have agreed to develop a public transit system of autonomous shuttles and buses by 2022 for the capital city of Doha.
The agreement signed Saturday by VW Group and the Qatar Investment Authority is an expansive project that will involve four brands under VW Group, including Volkswagen Commercial Vehicles, Scania, its shared ride service MOIA and Audi subsidiary Autonomous Intelligent Driving, or AID.
The aim is to develop the entire transport system, including the electric autonomous shuttles and buses, legal framework, city infrastructure and ride-hailing software required to deploy a commercial service there. The autonomous vehicles will be integrated into existing public transit.
&For our cities to progress we need a new wave of innovation,& QIA CEO Mansoor Al Mahmoud said in a statement. &AI-enabled, emission-free transportation technologies will help advance urban mobility, while diminishing congestion and improving energy efficiency.
The fleet will include 35 autonomous electric ID. Buzz vehicles from the Volkswagen Commercial Vehicles unit, which will shuttle up to four passengers on semi-fixed routes in a geo-fenced area of Doha. Another 10 Scania buses will be used for larger groups.
Closed testing of the shuttle vehicles and buses is expected to begin in 2020. Trials could start as early as 2021. VW and QIA said the project will go live by the end of 2022.
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Read more: Volkswagen to bring self-driving electric shuttles to Qatar by 2022
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The final installment of the sequel trilogy is getting a lot of creative promotion — even by Star Wars standards. With The Rise of Skywalker out in just under a week, J.J. Abrams (and some spotty server issues) paid a visit to Fortnite. The director showed off an exclusive clip from the upcoming film featuring the familiar trio of Rey, Finn and Poe Dameron.
That and watching a bunch of stormtroopers dance around is all well and good, but the real fun came next. Darth Galactic Empire Lord Palpatine-Sidious kicked off a final segment that found players rushing to grab the latest Fortnite weapon: a lightsaber.
As The Verge notes, there are a bunch of other in-game Star Wars challenges added to the title as part of the promo, but honestly, lightsabers. Just lightsabers. The game now sports a variety of different colors of the iconic kyber crystal-powered weapon, including a crossguard version like the kind sported by Kylo Ren in the new films.
The lead up to the film has seen a slew of different Star Wars add-ons, including skins of Stormtroopers, main characters Rey and Finn and a TIE Interceptor-style glider.
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Write comment (95 Comments)We&ve officially entered the mid-December hardware doldrums. Obviously no major hardware maker in its right mind is going to be announcing anything major in the next few weeks, for fear of preemptively cannibalizing holiday sales. Things will, however, heat up immediately after the new year with the kick off of CES. Then, a little over a month later, comes MWC.
Sandwiched somewhere in there is the launch of Samsungnext flagship. This is the device that sets the tone for the company for the whole year. Samsungsix month flagship release cycle (S series, followed by the Note) affords the company the ability to offer more frequent refreshes, but this first one is really a standard setter for both the company and the industry at large.
A February 18 launch date has been floated for the next flagship. The timing certainly makes sense. Samsung has broken away from MWC — and big tech shows in general — for its biggest announcements. Doing so puts the spotlight on its own devices and beats the MWC news glut for a few weeks. Likely available for the devices will begin the following month.
As for the name — thereno reason to believe the company would use this opportunity to break away from the S11/S11+ scheme this time out. So we&re going to stick with that until credibly informed otherwise.
The recently announced Snapdragon 865 will be powering the device in a number of markets, making the S11 among the first devices to launch with the latest flagship SoC. A recent report also suggests that the configuration will be available in even more markets, including, potentially its native South Korea. Standardized 5G seems possible across the board, though thatlikely going to mean an even more prohibitively expensive starting price. Ita big jump, especially with a still-spotty rollout in many markets.
An under-screen front-facing camera has been rumored, but the more familiar hole punch seems a lot more likely for this gen. Renders (courtesy of OnLeaks) of the device point to a design similar to the most recent Note, only with an even more trypophobia-inducing design than the most recent iPhone and Google Pixel (which is saying something). The camera bump appears downright massive, monopolizing an impressive portion of the rear.
An impossible large 108 megapixel camera has been rumored for the device, along with 8K video. Either way, imagining is no doubt going to once again be a major focus for the line. So, too, is a healthy battery increase.
EVLeaks, meanwhile, is suggesting an EVEN LARGER screen, with the S11e measuring either 6.2 or 6.4 inches, the S11 at 6.7 inches and the S11+ at a huge 6.9 inches. Plenty more leaks sure to come between now and mid-February. Stay tuned.
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New Orleans declared a state of emergency and shut down its computers after a cyber security event, the latest in a string of city and state governments to be attacked by hackers.
Suspicious activity was spotted around 5 a.m. Friday morning. By 8 a.m., there was an uptick in that activity, which included evidence of phishing attempts and ransomware, Kim LaGrue, the cityhead of IT said in a press conference. Once the city confirmed it was under attack, servers and computers were shut down.
While ransomware was detected there are no requests made to the city of New Orleans at this time, but that is very much a part of our investigation, New Orleans Mayor LaToya Cantrell said during a press conference.
Numerous local and state governments have been plagued by ransomware, a file-encrypting malware that demands money for the decryption key.Pensacola, Florida and Jackson County, Georgia are just a few examples of the near-constant stream of ransomeware attacks over the past year. Louisiana state government was attacked in November,prompting officials to deactivate government websites and other digital services and causing the governor to declare a state of emergency. It was the statesecond declaration related to a ransomware attack in less than six months.
Governments and local authorities are particularly vulnerable as they&re often underfunded and unresourced, and unable to protect their systems from some of the major threats.
New Orleans, it appears was somewhat prepared, which officials said was the result of training and its ability to operate without internet. The investigation is in its early stages, but for now it appears thatcityemployees didn&tinteractwith or providecredentials or any information to possible attackers, according to officials.
&If there is a positive about being a city that has been touched by disasters and essentially been brought down to zero in the past, is that our plans and activity from a public safety perspective reflect the fact that we can operate with internet, without city networking,& said Collin Arnold, director of Homeland Security, adding that they&ve gone back to pen and paper for now.
Police, fire and EMS are prepared to work outside of the cityinternet network. Emergency communications are not affected by the cybersecurity incident, according to city officials. However, other services such as scheduling building inspections are being handled manually.
New OrleansReal-Time Crime Center does work off the city network, howeverthe cameras throughout the cityrecord independently, so right now all of those cameras are still recording regardless of connectivity to the city&s network, Arnold added.
Federal, state and local officials are now involved in an investigation into the security incident.
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Read more: New Orleans declares state of emergency following ransomware attack
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