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Microsoft’s new Flight Simulator is a beautiful work in progress
For the last two weeks, I’ve been flying around the world in a preview of Microsoft’s new Flight Simulator. Without a doubt, it’s the most beautiful flight simulator yet, and it’ll make you want to fly low and slow over your favorite cities because — if you pick the right one — every street and house will be there in more detail than you’ve ever seen in a game. Weather effects, day and night cycles, plane models — it all looks amazing. You can’t start it up and not fawn over the graphics.
But the new Flight Simulator is also still very much a work in progress, too, even just a few weeks before the scheduled launch date on August 18. It’s officially still in beta, so there’s still time to fix at least some of the issues I list below. Because Microsoft and Asobo Studios, which was responsible for the development of the simulator, are using Microsoft’s AI tech in Azure to automatically generate much of the scenery based on Microsoft’s Bing Maps data, you’ll find a lot of weirdness in the world. There are taxiway lights in the middle of runways, giant hangars and crew buses at small private fields, cars randomly driving across airports, giant trees growing everywhere (while palms often look like giant sticks), bridges that are either under water or big blocks of black over a river — and there are a lot of sunken boats, too.
When the system works well, it’s absolutely amazing. Cities like Barcelona, Berlin, San Francisco, Seattle, New York and others that are rendered using Microsoft’s photogrammetry method look great — including and maybe especially at night.
Image Credits: Microsoft
The rendering engine on my i7-9700K with an Nvidia 2070 Super graphics card never let the frame rate drop under 30 frames per second (which is perfectly fine for a flight simulator) and usually hovered well over 40, all with the graphics setting pushed up to the maximum and with a 2K resolution.
When things don’t work, though, the effect is stark because it’s so obvious. Some cities, like Las Vegas, look like they suffered some kind of catastrophe, as if the city was abandoned and nature took over (which in the case of the Vegas Strip doesn’t sound like such a bad thing, to be honest).
Image Credits: TechCrunch
Thankfully, all of this is something that Microsoft and Asobo can fix. They’ll just need to adjust their algorithms, and because a lot of the data is streamed, the updates should be virtually automatic. The fact that they haven’t done so yet is a bit of a surprise.
Image Credits: TechCrunch
Chances are you’ll want to fly over your house the day you get Flight Simulator. If you live in the right city (and the right part of that city), you’ll likely be lucky and actually see your house with its individual texture. But for some cities, including London, for example, the game only shows standard textures, and while Microsoft does a good job at matching the outlines of buildings in cities where it doesn’t do photogrammetry, it’s odd that London or Amsterdam aren’t on that list (though London apparently features a couple of wind turbines in the city center now), while Münster, Germany is.
Once you reach altitude, all of those problems obviously go away (or at least you won’t see them). But given the graphics, you’ll want to spend a lot of time at 2,000 feet or below.
Image Credits: TechCrunch
What really struck me in playing the game in its current state is how those graphical inconsistencies set the standard for the rest of the experience. The team says its focus is 100% on making the simulator as realistic as possible, but then the virtual air traffic control often doesn’t use standard phraseology, for example, or fails to hand you off to the right departure control when you leave a major airport. The airplane models look great and feel pretty close to real (at least the ones I’ve flown myself), but some currently show the wrong airspeed. Some planes use modern glass cockpits with the Garmin 1000 and G3X, but those still feel severely limited.
But let me be clear here. Despite all of this, even in its beta state, Flight Simulator is a technical marvel and it will only get better over time.
Image Credits: TechCrunch
Let’s walk through the user experience a bit. The install on PC (the Xbox version will come at some point in the future) is a process that downloads a good 90GB so that you can play offline as well. The install process asks you if you are okay with streaming data, too, and that can quickly add up. After reinstalling the game and doing a few flights for screenshots, the game had downloaded about 10GB already — it adds up quickly and is something you should be aware of if you’re on a metered connection.
Once past the long install, you’ll be greeted by a menu screen that lets you start a new flight, go for one of the landing challenges or other activities the team has set up (they are really proud of their Courchevel scenery) and go through the games’ flight training program.
Image Credits: Microsoft
That training section walks you through eight activities that will help you get the basics of flying a Cessna 152. Most take fewer than 10 minutes and you’ll get a bit of a de-brief after, but I’m not sure it’s enough to keep a novice from getting frustrated quickly (while more advanced players will just skip this section altogether anyway).
I mostly spent my time flying the small general aviation planes in the sim, but if you prefer a Boeing 747 or Airbus 320neo, you get that option, too, as well as some turboprops and business jets. I’ll spend some more time with those before the official launch. All of the planes are beautifully detailed inside and out and except for a few bugs, everything works as expected.
To actually start playing, you’ll head for the world map and choose where you want to start your flight. What’s nice here is that you can pick any spot on your map, not just airports. That makes it easy to start flying over a city, for example. As you zoom into the map, you can see airports and landmarks (where the landmarks are either real sights like Germany’s Neuschwanstein Castle or cities that have photogrammetry data). If a town doesn’t have photogrammetry data, it will not appear on the map.
As of now, the flight planning features are pretty basic. For visual flights, you can go direct or VOR to VOR, and that’s it. For IFR flights, you choose low or high-altitude airways. You can’t really adjust any of these, just accept what the simulator gives you. That’s not really how flight planning works (at the very least you would want to take the local weather into account), so it would be nice if you could customize your route a bit more. Microsoft partnered with NavBlue for airspace data, though the built-in maps don’t do much with this data and don’t even show you the vertical boundaries of the airspace you are in.
Image Credits: TechCrunch
It’s always hard to compare the plane models and how they react to the real thing. Best I can tell, at least the single-engine Cessnas that I’m familiar with mostly handle in the same way I would expect them to in reality. Rudder controls feel a bit overly sensitive by default, but that’s relatively easy to adjust. I only played with a HOTAS-style joystick and rudder setup. I wouldn’t recommend playing with a mouse and keyboard, but your mileage may vary.
Live traffic works well, but none of the general aviation traffic around my local airports seems to show up, even though Microsoft partner FlightAware shows it.
As for the real/AI traffic in general, the sim does a pretty good job managing that. In the beta, you won’t really see the liveries of any real airlines yet — at least for the most part — I spotted the occasional United plane in the latest builds. Given some of Microsoft’s own videos, more are coming soon. Except for the built-in models you can fly in the sim, Flight Simulator is still missing a library of other airplane models for AI traffic, though again, I would assume that’s in the works, too.
Image Credits: TechCrunch
We’re three weeks out from launch. I would expect the team to be able to fix many of these issues and we’ll revisit all of them for our final review. My frustration with the current state of the game is that it’s so often so close to perfect that when it falls short of that, it’s especially jarring because it yanks you out of the experience.
Don’t get me wrong, though, flying in FS2020 is already a great experience. Even when there’s no photogrammetry, cities and villages look great once you get over 3,000 feet or so. The weather and cloud simulation — in real time — beats any add-on for today’s flight simulators. Airports still need work, but having cars drive around and flaggers walking around planes that are pushing back help make the world feel more alive. Wind affects the waves on lakes and oceans (and windsocks on airports). This is truly a next-generation flight simulator.
Image Credits: Microsoft
Microsoft and Asobo have to walk a fine line between making Flight Simulator the sim that hardcore fans want and an accessible game that brings in new players. I’ve played every version of Flight Simulator since the 90s, so getting started took exactly zero time. My sense is that new players simply looking for a good time may feel a bit lost at first, despite Microsoft adding landing challenges and other more gamified elements to the sim. In a press briefing, the Asobo team regularly stressed that it aimed for realism over anything else — and I’m perfectly okay with that. We’ll have to see if that translates to being a fun experience for casual players, too.
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K Fund’s Jaime Novoa discusses early-stage firm’s focus on Spanish startups
Earlier this month, Spanish early-stage venture capital firm K Fund officially launched its second fund, which sits at €70 million, up from €50 million the first time around.
Targeting Spanish startups with an international outlook, the seed-stage firm plans to invest from €200,000 to €2 million, writing first checks in 25-30 companies. Meanwhile, a portion of the fund will also be set aside for follow-on funding for the most promising of its portfolio.
Described as business model- and sector-agnostic, K Fund currently has a mix of B2B and B2C companies in its portfolio across a wide variety of sectors, such as travel, fintech, insurtech and others. They include online travel agency Exoticca, HR software Factorial, insurtech startup Bdeo and Hubtype, a conversational messaging tech provider.
I caught up with K Fund’s Jaime Novoa to delve deeper into the firm’s investment remit, how the Spanish startup and tech ecosystem has developed over the last few years and to learn more about “K Founders,” the VC’s new pre-seed funding program.
TechCrunch: K Fund’s first fund was announced in late 2016 to back startups in Spain with an international outlook at seed and Series A. At €70 million, this second fund is €20 million larger but I gather the remit remains broadly the same. Can you be more specific with regards to cheque size, geography, sector and the types of startups you look for?
Jaime Novoa: We’re both agnostic in terms of business models and industries. Since our focus is, for the most part, Spain, we do not believe that the Spanish market is big enough to build a vertically focused fund, either in terms of business model or sector.
With our first fund we invested in 28 companies, with a slightly larger number of B2B SaaS companies than B2C ones, and across a wide variety of sectors. We do have a bit of exposure to travel and fintech/insurtech, but that’s because we’ve found several interesting companies in those spaces, not because we proactively said, “let’s invest in fintech/travel.”
In terms of check sizes, the core of the fund will be to make the same type of investments as in our first fund: first cheques from €200k to €2m and then sufficient capital for follow-on rounds. We’ll probably do a similar number of deals compared to the previous fund, but we want to have additional capital for follow-on purposes.
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Factorial raises $16M to take on the HR world with a platform for SMBs
A startup that’s hoping to be a contender in the very large and fragmented market of human resources software has captured the eye of a big investor out of the US and become its first investment in Spain.
Barcelona-based Factorial, which is building an all-in-one HR automation platform aimed at small and medium businesses that manages payroll, employee onboarding, time off and other human resource functions, has raised €15 ($16 million) in a Series A round of funding led by CRV, with participation also from existing investors Creandum, Point Nine and K Fund.
The money comes on the heels of Factorial — which has customers in 40 countries — seeing eightfold growth in revenues in 2019, with more than 60,000 customers now using its tools.
Jordi Romero, the CEO who co-founded the company with Pau Ramon (CTO) and Bernat Farrero (head of corporate), said in an interview that the investment will be used both to expand to new markets and add more customers, as well as to double down on tech development to bring on more features. These will include RPA integrations to further automate services, and to move into more back-office product areas such as handling expenses,
Factorial has now raised $18 million and is not disclosing its valuation, he added.
The funding is notable on a couple of levels that speak not just to the wider investing climate but also to the specific area of human resources.
In addition to being CRV’s first deal in Spain, the investment is being made at a time when the whole VC model is under a lot of pressure because of the global coronavirus pandemic — not least in Spain, which has a decent, fledgling technology scene but has been one of the hardest-hit countries in the world when it comes to COVID-19.
“It made the closing of the funding very, very stressful,” Romero said from Barcelona last week (via video conference). “We had a gentleman’s agreement [so to speak] before the virus broke out, but the money was still to be wired. Seeing the world collapse around you, with some accounts closing, and with the bigger business world in a very fragile state, was very nerve wracking.”
Ironically, it’s that fragile state that proved to be a saviour of sorts for Factorial.
“We target HR leaders and they are currently very distracted with furloughs and layoffs right now, so we turned around and focused on how we could provide the best value to them,” Romero said.
The company made its product free to use until lockdowns are eased up, and Factorial has found a new interest from businesses that had never used cloud-based services before but needed to get something quickly up and running to use while working from home. He noted that among new companies signing up to Factorial, most either previously kept all their records in local files or at best a “Dropbox folder, but nothing else.”
The company also put in place more materials and other tools specifically to address the most pressing needs those HR people might have right now, such as guidance on how to implement furloughs and layoffs, best practices for communication policies and more. “We had to get creative,” Romero said.
At $16 million, this is at the larger end of Series A rounds as of January 2020, and while it’s definitely not as big as some of the outsized deals we’ve seen out of the US, it happens to be the biggest funding round so far this year in Spain.
Its rise feels unlikely for another reason, too: it comes at a time when we already have dozens (maybe even hundreds) of human resources software businesses, with many an established name — they include PeopleHR, Workday, Infor, ADP, Zenefits, Gusto, IBM, Oracle, SAP, Rippling, and many others — in a market that analysts project will be worth $38.17 billion by 2027 growing at a CAGR of over 11%.
But as is often the case in tech, status quo breeds disruption, and that’s the case here. Factorial’s approach has been to build HR tools specifically for people who are not HR professionals per se: companies that are small enough not to have specialists, or if they do, they share a lot of the tasks and work with other managers who are not in HR first and foremost.
It’s a formula that Romero said could potentially see the company taking on bigger customers, but for now, investors like it for having built a platform approach for the huge but often under-served SME market.
“Factorial was built for the users, designed for the modern web and workplace,” said Reid Christian, General Partner at CRV, in a statement. “Historically the HR software market has been one of the most lucrative categories for enterprise tech companies, and today, the HR stack looks much different. As we enter the third generation of cloud HR products, with countless point solutions, there’s a strong need for an underlying platform to integrate work across these.”
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Sony announces its first 5G flagship, the triple lens Xperia 1 II
Sony has announced its first 5G smartphone: The Xperia 1 II. (For the curious or confused, it is pronounced ‘Xperia One, Mark Two.’)
“No one understands the entertainment experience better than Sony,” said president of mobile communications, Mitsuya Kishida, claiming the company is “uniquely positioned” in the era of 5G cellular technology to offer its target users an “enriched” experience thanks to Sony’s extensive content portfolio.
“Whether you are a broadcast professional who requires dynamic speed or an everyday user who desires enhanced entertainment, Xperia with 5G takes your mobile experience to the next level,” he said.
As ever with Sony — a major b2b supplier of image sensors to other smartphone makers (rather than a major seller of its own phones) — it’s made the camera a huge focus for the new Android 10 flagship, which has a 6.5in 21:9 “CinemaWide” 4K HDR OLED (3840×1644) display and is powered by a Qualcomm 865 Snapdragon chip (with 8GB of RAM on board).
Round the back the Xperia 1 II packs three lenses which offer a selection of focal lengths (16mm, 24mm and 70mm) for capturing different types of photos — from super wide angle to portraits.
All three rear lenses have a 12MP sensor, while round the front there’s an 8MP lens. Sony is also using Zeiss optics for the first time in a smartphone, expanding a long-running collaboration to a new device type.
Talking up the camera, Kishida touted ultra-fast, low light autofocus, noting that it supports 20fps autofocus and auto-tracking burst (which he called a world first in a smartphone) for capturing crisp action shots.
“Our new continuous auto focus keeps tracking of moving subjects. What’s special about this is with 20fps it calculates the object 3x per frame — that’s 60x per second — capturing the very moment,” he said.
“With the power and speed of 5G you will be able to share those moments more quickly and more easily across the network,” he added.
Another photo-friendly feature is real-time eye auto focus. Sony demoed this by showing it working on a video of a cat playing with a toy. So, tl;dr: Sony has trained its model on data-sets of pets too, not just humans.
A ‘Photo Pro’ interface on the handset, meanwhile, has been designed to be familiar to users of Sony’s mirrorless Alpha cameras — letting photographers tune shots via access to tweakable parameters they’re used to using on Sony’s high end digital cameras.
Sony is paying the same mind to video makers, with a video editing interface on the device that offers features such as touch autofocus and custom white balance — which Kishida said will help “visual storytellers” control the camera more easily.
There’s also a noise reduction feature to improve audio capture.
Best of all, the Xperia 1II has a 3.5mm headphone jack — enabling audiophiles to enjoy the simple pleasure of plugging in their favorite pair of high-end wired headphones and tuning out everything else.
Kishida flagged the use of an AI technology, called DSEE Ultimate, which he said upscales the sound signal to “near high resolution audio” — including when streaming. “This the best on the go acoustic experience available,” he claimed.
On the games front he touted a collaboration that will let users of the device play a mobile optimized version of Call of Duty using PlayStation 4’s DualShock 4 wireless controller.
The handset, meanwhile, packs a 4,000mAh battery as well as fast wireless charging.
Per Kishida the Xperia 1 II will start shipping from Spring onwards, though it’s not yet clear which markets Sony will be bringing the device to. (Last year the company’s mobile division was reported to have defocused most of the global market in a bid to focus on profitability.)
The Xperia 1 II may have a fairly niche target buyer, as Sony is a relative bit player in consumer smartphone sales vs giants like Samsung and Huawei, but is intended to act as a showcase for what the company’s camera technologies can offer other mobile makers.
Sony’s mobile chief was making the announcements at a virtual press conference screened via YouTube after the company became one of the first big companies to pull out of attending the Mobile World Congress tradeshow.
MWC’s organizer, the GSMA, subsequently cancelled the annual mobile industry event, which had been due to take place in Barcelona this week, after scores of exhibitors said they would not attend due to public health concerns attached to the novel coronavirus.
MWC typically attracts more than 100,000 visitors across four days. So the sight of Sony’s press conference being streamed to an empty room — entirely devoid of cameras, claps or woos but still with built in pauses for the media to take photos of the new hardware — was more than a little surreal.
Kishida had another 5G handsets to tease: the Xperia Pro, a flagship handset aimed at video professionals. It features 5G mm wavelength technology for improved capability to stream high-resolution video, as well as a handy micro HDMI port for easy plugging in of other high end camera kit.
Sony touted tests it’s done with U.S. carrier Verizon (TechCrunch’s parent company) to use the forthcoming 5G handset for live streaming of live sports events.
“Sony’s expertise and long history in providing profession digital imaging solutions is very unique,” added Kishida. “Only Sony has such deep and well established relationships, and we are bringing decades of experience to an end-to-end solution — from professional content creation to mobile communications technology in 5G.”
There was a mid-range smartphone announcement, too, also shipping from Spring onwards: The Xperia 10 II packs a 6″ display and also features a triple lens camera as well as water resistance.
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A list of MWC coronavirus cancellations so far: Facebook, AT&T, Sprint, Intel now also staying away
Yet more big names are being added to the list of companies that are staying away from the world’s biggest mobile tradeshow, Mobile World Congress (MWC), with Facebook and Intel among the latest to cancel their attendance. Due to take place in Barcelona just under two weeks’ time, on February 24-27, the event has been hampered by the ongoing situation with the novel coronavirus outbreak.
“Out of an abundance of caution, Facebook employees won’t be attending this year’s Mobile World Congress due to the evolving public health risks related to coronavirus,” said a spokesperson for Facebook, in a message worded not unlike a number of others that have been put out by others choosing not to attend. “We will continue to collaborate with the GSMA and our partners and thank them for their efforts.”
Spanish publication El Pais is also reporting that the GSMA, the body that organizes the event, is due to meet on Friday and consider its next steps, which could include suspending the event. It also notes that major carriers Vodafone and Deutsche Telekom are also considering options, although nothing has been confirmed yet. Orange has told us it still intends to participate.
We have reached out to the GSMA and it has declined to comment on the El Pais report. “We don’t comment on internal meetings,” the spokesperson said. (The GSMA would be meeting regularly regardless in the lead-up to the event.)
The annual international telco industry event typically attracts more than 100,000 delegates from around 200 countries across the conference’s four days — with every major telco and tech giant exhibiting (with the exception of Apple which prefers its own events).
But with international concern now focused on the novel coronavirus outbreak — which was declared a global emergency by the World Health Organization late last month and as of today has infected over 40,000 people with more than 1,000 deaths — a growing number of companies have announced they are pulling out of attending.
Others, such as Telenor, TCL and ZTE, have cancelled press events or said they will scale back their presence though are still planning to attend. Today Chinese phone maker Xiaomi also confirmed it will attend — tweeting a statement detailing the precautions it’s taking.
Having carriers pulling out of the event is a huge deal, since they are the key “buyers” at the trade show and at the heart of the organization, the GSMA, that is behind it. And while big tech companies like Facebook are a newer, but now very regular, presence the event — which underscores how MWC has changed over the years, and how the mobile industry is trying to evolve with the times, where “tech” and “telco” are no longer distinct entities — they are nonetheless leaving a large hole in the makeup of the show by not being there.
The GSMA has announced a series of restrictions intended to reduce the risk of the coronavirus infections at the conference, including a ban on travellers coming from the province in China where the virus was first identified. It has also said it will implement temperature screening of attendees; require conference-goers self-certify they have not come into contact with an infected person; and is suggesting delegates adopt a ‘no hand shake’ policy in a bid to limit contact.
There is a lot riding on MWC going ahead. The El Pais report notes that MWC generates some 14,000 temporary jobs and generates €492 million (nearly $540 million) for the city. Per the GSMA site, more than 2,400 companies are exhibiting at MWC this year. Yesterday, a spokesperson told TechCrunch that MWC had 2,800 companies signed up to exhibit, but it’s not sharing how many are still going to be there.
See below for a list of companies that have cancelled their attendance at the conference — we’ll update with any additions as we get them.
Organizations that have cancelled their attendance at MWC 2020
ARCEP, France’s FCC (confirmed via email)
AT&T (confirmed via email)
F5 Networks (confirmed via email)
Facebook (confirmed via email)
Gigaset (confirmed via email)
KMW Communications (confirmed via email)
Radwin (confirmed via email)
Rakuten (confirmed via email)
Sprint (confirmed via email)
Viber (confirmed via email)
This article was updated with a correction to remove ‘Rakuten’ from the list of cancellations after an earlier spokesperson provided us with incorrect information. And in a further update, the CEO of Viber, owned by Rakuten, also said the messaging app would be attending after all:
“As of today Viber will have a presence at MWC, including me,” said Djamel Agaoua. “Like all companies, we are evaluating the risk to our employees and if our position changes we will keep you updated. Sorry about the confusion.”
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Sony to pull out of MWC over coronavirus outbreak
Japanese electronics firm Sony is the latest phone maker to announce it’s withdrawing from the Mobile World Congress (MWC) tradeshow, citing concerns about the coronavirus outbreak.
“As we place the utmost importance on the safety and wellbeing of our customers, partners, media and employees, we have taken the difficult decision to withdraw from exhibiting and participating at MWC 2020 in Barcelona, Spain,” Sony wrote in a press release.
MWC is due to take place in Barcelona between February 24-27.
Sony said it will now run a press conference planned for the event via its official Xperia YouTube channel at the scheduled time of 8:30 AM (CET) on February 24.
“Sony would like to thank everyone for their understanding and ongoing support during these challenging times,” it added.
In recent days, a number of companies have announced they’re pulling out or scaling back their presence at the conference as a result of concerns about the spread of the virus, including Amazon, Ericsson, LG, NVIDIA and ZTE.
The World Health Organization dubbed the emergence and spread of the novel coronavirus a global emergency late last month.
At the time of writing, the majority of infections and deaths from the virus remain in China, where the virus was first identified in the town of Wuhan in the Hubei province.
Several Chinese tech companies, including ZTE and Xiaomi, have said they will make changes to their participation in MWC related to coronavirus concerns, such as placing limits on staff travelling from China or requiring they self isolate in the period before attending.
Yesterday the organizers of MWC, the GSMA, also announced stringent rules to try to safeguard attendees, including a ban on travellers from Hubei and a requirement that all travellers who have been in China must be able to prove they have been outside the country 14 days prior to the event.
Attendees will also be required to self-certify they have not been in contact with anyone affected, the GSMA said. Temperature screening will also be implemented at the event.
Last year the annual mobile tech conference drew almost 110,000 attendees from 198 countries.
“While further planning is underway, we will continue to monitor the situation and will adapt our plans according to developments and advice we receive. We are contending with a constantly evolving situation, that will require fast adaptability,” the GSMA also said.
Attendance at MWC has regularly broken 100,000 in recent years, but 2020’s conference seems likely to mark a break with business as usual as companies face pressure to rethink their travel priorities.
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Target Global is firming up its bet on Barcelona’s entrepreneurs
VC firm Target Global has just announced it’s expanding its European network by adding a local office in Barcelona, Spain — building on its existing presence in Berlin and London, plus Tel Aviv and Moscow.
The firm has €700 million under management and a broad investment range that covers SaaS, marketplaces, fintech and insurtech, as well as a big focus on mobility.
TechCrunch sat down with general partner Shmuel Chafets and investor director Lina Chong, who will be heading the firm’s push into Spain, to talk about its decision to set up shop in Barcelona — discussing how they see the local and national ecosystem, as well as picking their brains on wider investments trends and regulation in Europe.
Want to know what it takes to get a meeting with Target Global and factors they weigh when they’re deciding whether to cut a check or not? Read on…
The interview has been lightly edited for clarity.
TechCrunch: Why choose Barcelona and why now? Why not Spain’s capital, Madrid — or even a city like Paris?
Shmuel Chafets: First of all have you been outside!?
I started coming to Barcelona four or five years ago just to see things and we had some angel investments here and it feels to me today — or when Lina and I started getting more serious about Barcelona it seemed to us that Barcelona has the attributes of Berlin eight or nine years ago. When I at least started coming to Berlin and Lina moved to Berlin, it has the same attributes. It looks like it’s just about to happen
I think it has a few factors. The first one is that it’s a great place to live and you can’t ignore that. In Europe, if you’re a team and you’re an international team there are very few places that you can live in. So London is the original ex-pat city of Europe and it still is amazing but very, very expensive. Berlin is the second one. And I think a lot of Berlin’s early success was fuelled by people who were not necessary German and definitely not Berliners coming and starting a company there.
It’s a good place to live, it’s also a cheap place to live, and it’s a cheap place to do business. Salaries here are quite low but the quality of living is quite high and that makes it very good for startups. Particularly when you need young people, developers, creative people to move. It’s an easy place to convince people to move to.
It doesn’t have a dominant industry. And that is very similar to Berlin — Berlin is not where Germany economically is, and that means that the smartest people around want to go in for startups. That’s the best employment option. There is no banking industry sucking people in with high salaries. And also driving costs up. It is in its culture a very creative city, a very open, very creative city and that I think is also very important.
And lastly, there are these early success stories that fuel the idea of entrepreneurship and also fuel financial entrepreneurship. So one of the interesting things about entrepreneurship is that people who start need to know where it ends or where it’s going to. And the early success stories — first of all they make the smartest kid graduating — who has a McKinsey job offer and a Goldman Sachs job offer and a startup idea — he needs to know that the startup idea has a future. That there’s a future in being an entrepreneur and he needs to look up to people around him. It’s not enough to know that Mark Zuckerberg dropped out — that’s fine but that’s very far and very large.
Image via Getty Images / Pol Albarrán
But to look at Carlos [Pierre, founder and CEO] from Badi and say okay there’s a guy, he’s a few years older than me, he started a company, he’s doing very well — this is the path that I want to take.
Also, there are more and more mentors. People who’ve done it before. And they can help you figure things out. You have to be able to call someone up and say hey let’s have breakfast and explain how they do it.
And there’s more money — for seed. Because you look at a lot of people starting funds, and we were just talking on the way about the Ticketbis guys. They’re starting a fund. And that’s a great example of one of these early success stories and now they’re putting it back into the ecosystem and helping it grow.
Rocket Internet did a lot of that in Germany. They had early exits and then they went and plowed it all back into the ecosystem in their own particular way. People like [serial entrepreneur] Lukasz Gadowski — who we work with a lot. He built Spreadshirts… [then later] he founded Delivery Hero. So through Team Europe. So people who were early, early entrepreneurs — and then in the second wave helped build an ecosystem. So I think there are more and more people like that that we see here.
That usually fuels the ecosystem. Also as companies here start to scale and as more of these European startups start to build hubs here there’s more experience. You can find people who’ve been through a couple of rounds.
And the last thing which is not about Barcelona it’s about Spain in general. There’s a decent local domestic market and there is a natural second market in South America. And actually in the US too — because Spanish is the second most commonly spoken language in America so when you start a company here you have that second market built-in. Which is very important — you can scale it.
Latin America is a fascinating market right now, a fascinating time. So in a way, it’s a way for us to make a side bet on Latin America in a way without going out of Europe and insetting far. My first boss told me never to do business in a place where there’s no direct flight from where I live and I adhere to that. If things go belly up you don’t want to be stuck in transfer in some airport sitting there waiting for a transfer.
TechCrunch: So in a way being in a second city — this isn’t Madrid, Spain’s capital — is a more interesting proposition for startups because there’s less competition for talent?
Chong: It’s a bit of an underdog here. There are not these big dominant industries. It’s not cosmopolitan like how Madrid is perceived. There’s a lot of creativity, a lot of people who are more entrepreneurial in spirit.
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Pan-European VC fund Target Global is opening an office in Barcelona
Hola Barcelona. Target Global, a pan-European VC firm with €700 million under management and a broad investment canvas spanning SaaS, marketplaces, fintech, insurtech and mobility, is opening an office in the Catalan capital.
Investor director, Lina Chong, will lead the expansion into Spain, having relocated to Barcelona from the fund’s Berlin headquarters. They’re setting up in a co-working space on Avenue Diagonal in the center of the city.
Target Global backs early and growth stages startups, as well as doing some seed investing. The firms tells us it’s expecting to do between one and three deals per year out of the Barcelona office, envisaging the same mix of investments in terms of early and growth stage.
“We’ve been seeing decent deals in both stages. Definitely. Across Spain,” says Chong. “There is just more — by numbers — way more early stage seed than A. I think that’s just the maturity of the ecosystem here.”
Dialling up a local presence across Europe means Target Global can pitch founders on being able to connect talent and expertise across key regional startup hubs, while also plugging into a wider international network. (It also has offices in London, Tel Aviv and Moscow.)
From a VC perspective opening local offices is of course about deal flow. Being on the ground to take more meetings widens the pipe, increasing the chance of an early shot at the next high growth business.
That’s important because Europe’s startups have many more options for early stage funding than in years past, and founders are getting smarter about choosing their investors. Boots on the ground means more time for all important relationship building.
Target Global describes itself as something of a startup — it was founded in 2012 — which means it’s competing for deals with VCs that have more established brands and networks. Becoming a familiar face in the room looks like a solid strategy to growth hack its own network.
“We are a global or a pan-European fund but for an entrepreneur here we want them to feel that we’re local; we understand the ecosystem; that we have deep rooted connections; that we’re committed; that we show up,” general partner Shmuel Chafets tells TechCrunch.
“It’s all a function of time and effort. Just being here and having breakfast with people, lunch with people and helping out even the people we don’t invest. You get more connected and then you start to see more deal flow.”
This is the second local office it’s opened in Europe this year, after adding a London base in April — making it a flattering pick for Barcelona. Plenty of other European hubs are being passed over in the city’s favor this time, be it Madrid, Lisbon, Paris or Stockholm.
Chafets says the firm looked at five or six other cities but settled on Barcelona for now, though he won’t rule out opening more offices in future. “Never say never,” he quips.
Having been a regular visitor to Barcelona for a number of years he talks enthusiastically about the creative energy motivating entrepreneurs — saying the city’s ecosystem reminds him of how Berlin felt a few years ago. “It looks like it’s just about to happen,” he reckons.
“From what I’ve seen Barcelona is sort of strong in creative. It’s a very creative city. It’s always pretty strong in mobile, historically. It had more mobile successes… SaaS, particular smb SaaS, is pretty good here. I think it would be harder to find enterprise sales companies and companies building these very deep tech stuff right now. But definitely in the marketplace, smb SaaS space, mobile space you see great stuff here.
“That ties into the creativity, because it’s a product driven environment — not a tech driven environment. I think Berlin is a very operationally driven environment, Tel Aviv is a very tech driven environment, this is a very product driven environment — which actually complements well our other hubs.”
“There’s some pent-up energy here,” agrees Chong, who says they’ve already come across a “surprising” amount of deal flow. “Again it’s very similar to Berlin where there’s a lot of willingness and there’s a lot of dreaming but there’s not a lot going on. So I think the younger people here they’re creating that.”
Target Global has been testing the water prior to formalizing its commitment to Barcelona, and has four local portfolio companies which it’s ploughed around €20M into over the past 12 months.
Its biggest regional investment to date is in business trip booking SaaS, TravelPerk. It’s also backed flatmate matching platform Badi; online doctor booking platform, Doc Planner (which relocated from Warsaw, Poland after merging with local startup Doctoralia); and medical chat app MediQuo.
From a wider perspective, Barcelona’s tech ecosystem has been gathering momentum for years, helped by the annual presence of the world’s biggest mobile tradeshow (MWC) — as well as more specific pull factors for startups such as a relatively low cost of living and an attractive Mediterranean location.
“It’s a great place to live and you can’t ignore that,” says Chafets. “In Europe if you’re a team and you’re an international team there are very few places you can live.”
This combination means Barcelona is now home to a growing number of high growth startups, including Target Global’s portfolio firm TravelPerk — as well as the likes of on-demand delivery platform Glovo; and RedPoints, which sells a SaaS to brands for detecting and acting against the sale of fake goods online, to name two other notable examples.
Other local startups grabbing attention and investment in recent years include 21Buttons, Holded, Housfy, Typeform and Verse. While hyper local mobile marketplace startup Wallapop — which was on a growth tear in an earlier wave of ecoystem growth — remains the go-to classified app on every local’s phone (though it merged with a US rival back in 2015).
The city even has its own youthful scooter startup (Reby) which has refused to be put off by some tough regulations controlling rentals — and has recently been applying AI to try to make like a good citizen by automatically detect poor parking.
Mobility is a major area of focus for Target Global — which last year announced a dedicated fund (with an initial raise of $100M) for startups working to disrupt transportation. Although, when it comes to stand-up e-scooters the firm is already invested in Berlin-based Circ so will presumably be looking to spend elsewhere on that front.
“Barcelona is the perfect city for scooters,” says Chafets. “Scooters can really change the way the city works. It’s also small and has relatively good public transportation from outwards in — but they need to be regulated. You need to really make sure that [they aren’t a misused nuisance].”
He notes that European regulators have been relatively quick to spot the risks of shared mobility, and close off the antisocial expansionist playbook that played out in some US cities during the first wave of scooter startups — when people trolled Bird by hanging scooters in trees (or, well, worse) — but he sees that as good news for building a sustainable future for alternative mobility.
“It’s a great challenge and it will be a huge money maker — that’s where we want to be right, multiple trillion dollar businesses!”
Away from disruptive developments on the ground in Barcelona and the other local tech hubs that Target Global is intending to explore from its new base in Catalonia, it also views Spain as a low risk gateway to opportunities on the other side of the Atlantic.
“There’s a decent local domestic market and there is a natural second market in South America,” says Chafets. “Actually in the US too — because Spanish is the second most commonly spoken language in America so when you start a company here you have that second market built in. Which is very important — you can scale it.”
“Latin America is a fascinating market right now, it’s a fascinating time,” he adds. “So in a way it’s a way for us to make a side bet on Latin America without going out of Europe and investing far.”
We’ll share a full interview with Chafets and Chong on Extra Crunch.
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LA-based gaming company, Scopely, expands in Spain and Ireland
The Los Angeles-based gaming company Scopely is expanding its geographical footprint in Spain and Ireland.
The company is building out its Barcelona offices, tripling its office space and planning to significantly expand its 100-person-strong team in the city. Meanwhile, Scopely is also planning to invest heavily in expanding its strategy-focused game studio, DIGIT, in Dublin.
Scopely didn’t say how many jobs it would be adding in either location.
The company has now hit lifetime revenue of more than $1 billion across its franchises and recently launched “Star Trek Fleet Command” and “Looney Tunes World of Mayhem.” Scopely also has licenses to develop games for World Wrestling Entertainment and The Walking Dead franchise.
“We are thrilled to expand our European footprint to accommodate our exponential growth,” said Javier Ferreira, co-CEO of Scopely, in a statement. “I am excited to further lean in to the Barcelona market, which has top-quality talent. The same is true in Dublin with top tech talent flocking to the area, and both offices have amassed impressive highly-specialized expertise. Our Dublin and Barcelona teams play a critical role in the Scopely journey, and we are actively hiring across both markets.”
The company also plans to double its footprint in its hometown of Los Angeles in 2020.
The company has raised more than $250 million in financing to date, from investors including Greenspring Associates, Greycroft Partners, Revolution Growth, Evolution Media Partners, Highland Capital Partners, Horizons Ventures, Sands Capital Ventures, The Chernin Group, Take-Two Interactive, Kobe Bryant, Arnold Schwarzenegger, Peter Guber, Jimmy Iovine and Brendan Iribe.
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Sources: Bird is in talks to acquire scooter startup Scoot
If you are among those who thought that the scooter market sounded a little overhyped and overcrowded, we’ve gotten wind of a deal that could point to some impending consolidation. The on-demand scooter business Bird has agreed to acquire Scoot, a smaller two-wheeled mobility startup, sources tell TechCrunch.
The stage of the negotiations is not clear although from what our sources tell us, it sounds like the deal is not closed. Contacted for a response, both Scoot and Bird said they declined to comment on speculation.
If accurate, it would be far from a merger of equals. Scoot was last valued at around $71 million, having raised about $47 million in equity funding to date from Scout Ventures, Vision Ridge Partners, angel investor Joanne Wilson and more.
Bird is significantly larger. Led by chief executive officer Travis VanderZanden, earlier this year the company was working on a round of financing reportedly worth $300 million at a $2.3 billion valuation. We’ve been able to confirm that this round has now closed, although we don’t yet know the final amount or who the investors are. (Backers of Bird include Sequoia, Index, Charles River Ventures, Tusk Ventures, Upfront Ventures and dozens more.) Scoot would be Bird’s first full acquisition.
Scooting toward consolidation
It’s still very early days in the scooter market in terms of consumer adoption, but that hasn’t stopped people from launching a lot of startups and raising funding to capitalise on what many believe will be a big opportunity longer term.
That promise is made bigger by the regulatory structure of the scooter market. Similar to their approach to bikes, many cities restrict the number of licenses they give out to companies to run on-street, hourly scooter services. Winning a license can give a company a near-monopoly on building a business in that city.
It also means that a combination between two companies whose geographic footprints do not overlap becomes a much cheaper and faster way of instantly creating a bigger business.
Notably, Scoot has a license to operate a pick-up/drop-off street service in the key market of San Francisco — where it competes with Skip, the only other licensed operator in the city. (Note: Bird last month did start up business again in SF, but only for the less popular offer of monthly rentals.)
What’s more, the two startups do not have any overlap in the rest of their footprints. Scoot is active in Barcelona, Spain and Santiago, Chile. Bird, on the other hand, has launched in about 100 cities spanning the U.S. and Europe, but its list does not include any of the cities where Scoot has rolled out its service.
Bird announced its new, two-seated electric vehicle earlier this week
On the vehicle front, the story is a little different. The two are providing, more or less, the same kinds of vehicles. Scoot has built out a network focused primarily on electric push scooters, seated scooters and electric bikes. Bird, meanwhile, has mostly built its service around electric push scooters, but just yesterday the company debuted its first seated vehicle to expand into a new product class.
Bird acquiring Scoot will help the two achieve better economies of scale in terms of vehicle purchasing power and device R&D.
It also helps them compete against the big boys. The market for scooters and other two-wheeled vehicles (collectively termed “micro-mobility”) is still a relatively new one, but Lyft and Uber have also waded in early to establish market share, as part of their own strategies to position themselves as the go-to platforms for any and all transportation needs.
Bird buying Scoot is one likely M&A move, but it’s not the only one.
Sources have told TechCrunch that an Uber acquisition of Skip (the other provider in SF) could also be in the works. Skip, much like Scoot, is another small player in the e-scooter market. To date, it has secured $31 million in venture capital funding from Initialized Capital, Accel and others.
Uber is already an active acquirer in the area of mico-mobility. If you remember, it acquired JUMP Bikes for $200 million in April 2018.
Uber’s acquisition of JUMP wasn’t surprising. In January 2018, the ride-hailing giant partnered with JUMP to launch Uber Bike, which lets Uber riders book JUMP bikes via the Uber app.
Other acquisitions in the nascent micro-mobility space include Lyft’s purchase of Motivate, a deal announced roughly one year ago. Motivate, the oldest and largest electric bike-share company in North America, did not disclose terms of the deal, though reports indicated it was asking for at least $250 million.
Bird — founded in 2017 — has yet to announce any acquisitions, although a spokesperson for the company said there have been quiet acqui-hires before now.
It was itself the subject of acquisition rumors for several months in 2018, too. Prior to Uber filing to go public in what was one of the most highly anticipated initial public offerings of the decade, many expected it to shell out cash for either Bird or Lime. From what we know, Uber was in discussions to acquire Bird, but ultimately it wasn’t able to meet Bird’s steep asking price.
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