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Chinese cybersecurity probe validates Didi’s pre-IPO warning to investors
Shares of Chinese ride-hailing provider Didi are sharply lower this morning after news broke that its domestic regulators are investigating the newly public company. A loose translation of the probe’s official notice indicates that the cybersecurity review is “in order to prevent national data security risks, maintain national security and protect the public interest.”
Yesterday, regulators ordered Didi to stop registering new users during the investigation.
The move comes amid a larger reset of relations between China’s burgeoning technology sector and its autocratic government. Other fallouts from the campaign included the effective silencing of Jack Ma, the embarrassing cancellation of the Ant IPO and a crackdown on data collection from technology companies more broadly.
The Exchange explores startups, markets and money.
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China is not the only nation grappling with its technology sector; India has made consistent noise in recent months regarding tech firms inside its borders, for example. And there is effort inside the U.S. Congress to put some cap on Big Tech’s scale and power, though of the trio, the United States appears the least likely to take a real swipe at technology companies’ market influence.
That Didi has run afoul of China’s regulatory bodies is not a surprise; it’s a well-known tech company in the country with lots of consumer data. Similar data-rich tech shops in the country have come under increased scrutiny as well.
But to see Didi get taken to task mere days after its U.S. debut puts a bad taste in our mouths.
The way that this saga reads from the cynical perspective is that the Chinese Communist Party was willing to let the company go public in the United States, allowing it to raise billions of dollars from foreign sources. And that the ruling party was then content to leave them holding a midsized bag by announcing its cybersecurity probe.
Hanlon’s Razor is at play in this situation, naturally.
Didi has not published a new SEC filing since June 30, and, as of the time of writing, its investor relations page is devoid of any information regarding today’s news.
While going public, it’s worth noting that Didi did warn investors that it faces a host of risks relating to its status as a Chinese company, namely its government, and as a Chinese company going public in the United States. Observe the following risk factors that it shared while going public (emphasis added) that dealt with the company’s business operations:
- Our business is subject to numerous legal and regulatory risks that could have an adverse impact on our business and future prospects.
- Our business is subject to a variety of laws, regulations, rules, policies and other obligations regarding privacy, data protection and information security. Any losses, unauthorized access or releases of confidential information or personal data could subject us to significant reputational, financial, legal and operational consequences.
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California has no water and lots of liquidity
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
Danny, Natasha, and Alex were on deck this week, with Grace on the recording and edit. But, if you want to hear more about Robinhood, this is not the episode for you. If you want to learn more about the consumer fintech company’s IPO filing this is the episode you want. Basically, Robinhood filed after we had wrapped taping, so we had to do a special pod for the news.
So, this is the everything-but-Robinhood episode. And here’s what’s inside of it:
- Startup and investor tensions at Bessemer and Hinge Health. Natasha has the latest.
- Didi’s IPO, and what’s going on with Chinese IPOs more generally. Also SentinelOne’s expensive and notable debut.
- And then all things Duolingo, including TechCrunch’s overview and more in-depth look.
- From the venture capital side of things, Zipline raised $250 million, Daylight raised $5 million, Articulate raised $1.5 billion, Acceleprise rebranded to Forum Ventures, and Peanut put together a micro-fund.
- We closed with Neeva, Brave, and other alternative search tools. Alex has a piece coming on the subject, once he gets around to finishing it.
A four-episode week! With only Grace handling production! She’s amazing.
Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday morning at 7:00 a.m. PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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Extra Crunch roundup: Unpacking BuzzFeed’s SPAC, curb your meeting enthusiasm, more
Meetings should have a clear purpose, but instead, they’ve become a way to measure status and reinforce what is colloquially referred to as CYA culture.
There’s a kernel of truth in every joke, so whenever someone quips, “This meeting could have been an email!” you can bet that some small part of them meant it sincerely.
Few people know how to run meetings effectively and keep conversations on track. Making matters worse, attendees often don’t bother to prepare, which makes a boring session even less productive.
And then there’s the complication of workplace politics: How secure do you feel declining an invitation from a co-worker — or a manager?
“Every time a recurring meeting is added to a calendar, a kitten dies,” says Chuck Phillips, co-founder of MeetWell. “Very few employees decline meetings, even when it’s obvious that the meeting is going to be a doozy.”
Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.
Changing your meeting culture is difficult, but given that 26% of workers plan to look for a new job when the pandemic ends, startups need to do all they can to retain talent.
Aimed at managers, this post offers several testable strategies that will help you boost productivity and say goodbye to poorly run, lazily planned meetings.
“Declining a bad meeting should never be taboo, and you should reiterate your trust in the team and challenge them to spend their and others’ time with more intention,” Phillips says. “Help them feel empowered to decline a bad meeting.”
Thanks very much for reading Extra Crunch, and have a great weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Why Amazon should pay attention to Shein
Image Credits: Shein
In the last year, online apparel shopping app Shein grew active daily users by 130%, reports Apptopia.
Each day, thousands of new products arrive on the app’s virtual shelves. Items are rapidly designed and prototyped before Shein’s contractors put them into production in Guangzhou factories — two weeks later, those SKUs arrive in fulfillment centers around the globe.
TechCrunch reporter Rita Liao examined how the company’s agile supply chain has become hot talk among e-commerce experts, but beyond a strong logistics game and data-driven product development, Shein’s close relationships with suppliers are integral to its success.
She also tried to answer a question many are asking: Is Shein a Chinese company?
“It’s hard to pin down where Shein is from,” answered Richard Xu from Grand View Capital, a Chinese venture capital firm.
“It’s a company with operations and supply chains in China targeting the global market, with nearly no business in China.”
Inside GM’s startup incubator strategy
Image Credits: Chevrolet
GM Vice President of Innovation Pam Fletcher is in charge of the company’s startups that tackle “electrification, connectivity and even insurance — all part of the automaker’s aim to find value (and profits) beyond its traditional business of making, selling and financing vehicles,” Kirsten Korosec writes.
Fletcher joined TechCrunch at a virtual TC Sessions: Mobility 2021 event to discuss what it’s like to launch a slew of startups under the umbrella of a 113-year-old automaker.
Investor Marlon Nichols and Wonderschool’s Chris Bennett on getting to the point with a pitch deck
Image Credits: MaC Venture Capital / Wonderschool
MaC Venture Capital founding managing partner Marlon Nichols and Wonderschool CEO Chris Bennett joined Extra Crunch Live to tear down the company’s early deck.
“The first thing that jumped out at all of us was just how bare-bones the presentation is: white text on a blue background, largely made up of bullet points,” Brian Heater writes before noting the CEO admitted that “not much changed aesthetically between that first pitch and the Series A deck.”
“It aligned with what we were valuing at the time,” Bennett says. “We were really focused on getting the product-market fit and really trying to understand what our customers needed. And we’re really focused on building the team.”
Dear Sophie: What options would allow me to start something on my own?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
I’ve been working on an H-1B in the U.S. for nearly two years.
While I’m grateful to have made it through the H-1B lottery and to be working, I’m feeling unhappy and frustrated with my job.
I really want to start something of my own and work on my own terms in the United States. Are there any immigration options that would allow me to do that?
— Seeking Satisfaction
Investors’ thirst for growth could bode well for SentinelOne’s IPO
Image Credits: Nigel Sussman (opens in a new window)
Alex Wilhelm calls SentinelOne’s looming debut “fascinating.”
“Why? Because the company sports a combination of rapid growth and expanding losses that make it a good heat check for the IPO market,” he writes. “Its debut will allow us to answer whether public investors still value growth above all else.”
Alex delves into an early dataset from SentinelOne and why public market investors still appear to value growth above anything else.
Before an exit, founders must get their employment law ducks in a row
Image Credits: Jenny Dettrick (opens in a new window) / Getty Images
Guest columnist Rob Hudock, a litigator who focuses on helping companies recruit the best talent available while avoiding distracting workplace issues or lawsuits, lays out the importance of putting out any employment-related fires before an exit.
“Inattention to employment issues can have a significant impact on deals — from preventing closings and reducing the deal value to altering the deal terms or significantly limiting the pool of potential buyers,” he writes.
“Fortunately, such issues typically can be resolved well in advance with a little forethought and legal guidance.”
Practice agile, iterative change to refine products and build company culture
Image Credits: John M Lund Photography Inc (opens in a new window) / Getty Images
Building an excellent product and a standout company culture require the same process, Heap CEO Ken Fine writes in a guest column.
“At Heap, the analytics solution provider I lead, a defining principle is that good ideas should not be lost to top-down dictates and overrigid hierarchies,” he writes. “The best results come when you approach leadership like you would create a great product — you hypothesize, you test and iterate, and once you get it right, you grow it.”
Here, he lays out his method that argues in favor of iterative change, not “one-and-done decrees.”
a16z’s new $2.2B fund won’t just bet on the crypto future, it will defend it
Image Credits: Nigel Sussman (opens in a new window)
The big news on Thursday was the announcement of Andreessen Horowitz’s new cryptocurrency-focused fund. Most focused on the eye-popping $2.2 billion figure, but Alex Wilhelm dug a bit deeper into the announcement to note that a16z isn’t just pumping a ton of money into the crypto space, it’s putting on gloves to fight for it.
Alex writes that “a16z intends to run defense for crypto in the American, and perhaps global, market. Crypto-focused startups are likely unable to tackle the regulation of their market on their own because they’re more focused on product work in a particular region of the larger crypto economy. The wealthy and connected investment firm that backs them will take on the task for its chosen champions.”
5 takeaways from BuzzFeed’s SPAC deck
Image Credits: Nicholas Kamm / AFP / Getty Images
Alex Wilhelm dives headfirst into BuzzFeed’s announcement that it plans to go public via a blank check company.
He looked at its historical and anticipated revenue growth (the latter is very sunny, which is not atypical for SPAC presentations), what makes up that revenue (more “commerce” as time goes on), its long-term profitability projections, as well as fun stuff, like the Pulitzer Prize-winning BuzzFeed News.
Admit it. You’re curious.
3 issues to resolve before switching to a subscription business model
Image Credits: SaskiaAcht (opens in a new window) / Getty Images
Moving from a pay-as-you-go model to a subscription service is more than just putting a monthly or yearly price tag on a product, CloudBlue’s Jess Warrington writes in a guest column.
“Executives cannot just layer a subscription model on top of an existing business,” Warrington writes. “They need to change the entire operation process, onboard all stakeholders, recalibrate their strategy and create a subscription culture.”
Warrington says that in his role at CloudBlue, companies often approach him for “help with solving technology challenges while shifting to a subscription business model, only to realize that they have not taken crucial organizational steps necessary to ensure a successful transition.”
Here’s how to avoid that situation.
Veo CEO Candice Xie has a plan for building a sustainable scooter company, and it’s working
Image Credits: Bryce Durbin
Rebecca Bellan interviewed Veo CEO Candice Xie about the micromobility startup’s “old-fashioned way” of doing business.
“I understand people are eager to prove their unit economics, their scalability and also improve their matrix to the VC to raise another round,” Xie says. “I would say that’s OK in the consumer industry, like consumer electronics or SaaS.
“But we are in transportation. It is a different business, and transportation takes years of collaboration and building between private and public partners. … So I don’t see it happening from day one, turning over a billion-dollar company, while simultaneously having it all make sense for the cities and users.”
5 companies doing growth marketing right
Image Credits: jayk7 (opens in a new window) / Getty Images
All companies want more or less the same thing: growth. But how do you accomplish it?
Ideally, don’t start from scratch.
The race to grow faster is more pressing than ever before. … “[F]orward-thinking entrepreneurs and growth marketers simply must make time to study their competition, learn best practices and apply them to their own business growth,” Mark Spera, the head of growth marketing at Minted, writes in a guest column.
“Of course, you should still run your own experiments, but it’s just more capital-efficient to emulate than to trial-and-error from scratch. Here are five companies with growth strategies worth emulating — including the most important lessons you can begin applying to your business today.”
Musculoskeletal medical startups race to enter personalized health tech market
Image Credits: ChrisChrisW (opens in a new window) / Getty Images
With more than 50 million Americans suffering from chronic pain and musculoskeletal (MSK) medical problems, a number of startups are offering patients new products “that don’t resemble the cookie-cutter status quo,” reports Natasha Mascarenhas.
Startups hoping to enter this space have an uphill climb. Setting aside regulations that cover aspects like product packaging and marketing, they must compete with well-entrenched competition from Big Pharma as they try to partner with health insurance companies.
Natasha profiles three companies that are each taking a different approach to personalized health: Clear, Hinge Health and PeerWell.
Like the US, a two-tier venture capital market is emerging in Latin America
Image Credits: Nigel Sussman (opens in a new window)
In the second part of an Exchange series looking at the global early-stage venture capital market, Alex Wilhelm and Anna Heim unpacked the scene in Latin America, discovering it looked a lot like the situation in the United States: slow Series A rounds, fast B rounds.
“Mega-rounds are no longer an exception in Latin America; in fact, they have become a trend, with ever-larger rounds being announced over the last few months,” they write.
Despite that, the funds aren’t being equitably distributed, and the region still lags behind its peers: Brazil has the most $1 billion startups in Latin America, with 12. The U.S., meanwhile, has 369, and China has 159.
But the Latin American market remains hot, if not quite as scorching as the U.S. and China.
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Despite flat growth, ride-hailing colossus Didi’s US IPO could reach $70B
Didi filed to go public in the United States last night, providing a look into the Chinese ride-hailing company’s business. This morning, we’re extending our earlier reporting on the company to dive into its numerical performance, economic health and possible valuation.
Recall that Didi has raised tens of billions worth of private capital from venture capitalists, private equity firms, corporations and other sources. The size of the bet riding on Didi is simply massive.
Didi is approaching the American public markets at a fortuitous moment. While the late-2020 IPO fervor, which sent offerings from DoorDash and others skyrocketing after their debuts, has cooled, valuations for public companies remain high compared to historical norms. And Uber and Lyft, two American ride-hailing companies, have been posting numbers that point to at least a modest recovery in the ride-hailing industry as COVID-19 abates in many parts of the world.
As further grounding, recall that Didi has raised tens of billions worth of private capital from venture capitalists, private equity firms, corporations and other sources. The size of the bet riding on Didi is simply massive. As we explore the company’s finances, then, we’re more than vetting a single company’s performance; we’re examining what sort of returns an ocean of capital may be able to derive from its exit.
In that vein, we’ll consider GMV results, revenue growth, historical profitability, present-day profitability and what Didi may be worth on the American markets, given current comps. Sound good? Into the breach!
Inside Didi’s IPO filing
Starting at the highest level, how quickly has gross transaction volume (GTV) scaled at the company?
GTV
Didi is historically a business that operates in China but has operations today in more than a dozen countries. The impact and recovery of China’s bout with COVID-19 is therefore not the whole picture of the company’s GTV results.
COVID-19 began to affect the company starting in the first quarter of 2020. From the Didi F-1 filing:
Core Platform GTV fell by 32.8% in the first quarter of 2020 as compared to the first quarter of 2019, and then by 16.0% in the second quarter of 2020 as compared to the second quarter of 2019.
The dips were short-lived, however, with Didi quickly returning to growth in the second half of the year:
Our businesses resumed growth in the second half of 2020, which moderated the impact on a year-on-year basis. Our Core Platform GTV for the full year 2020 decreased by 4.8% as compared to the full year 2019. Both our China Mobility and International segments were impacted, but whereas the GTV for our China Mobility segment decreased by 6.6% from 2019 to 2020, the GTV for our International segment increased by 11.4% from 2019 to 2020.
Holding to just the Chinese market, we can see how rapidly Didi managed to pick itself up over the last year. Chinese GTV at Didi grew from 25.7 billion RMB to 54.6 billion RMB from the first quarter of 2020 to the first quarter of 2021; naturally, we’re comparing a more pandemic-impacted quarter at the company to a less-affected period, but the comparison is still useful for showing how the company recovered from early-2020 lows.
The number of transactions that Didi recorded in China during the first quarter of this year was also up more than 2x year over year.
On a whole-company basis, Didi’s “core platform GTV,” or the “sum of GTV for our China Mobility and International segments,” posted numbers that are less impressive in growth terms:
Image Credits: Didi F-1 filing
You can see how quickly and painfully COVID-19 blunted Didi’s global operations. But seeing the company settle back to late-2019 GTV numbers in 2021 is not super bullish.
Takeaway: While Didi managed an impressive GTV recovery in China, its aggregate numbers are flatter, and recent quarterly trends are not incredibly attractive.
Revenue growth
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Extra Crunch roundup: Security data lakes, China vs. Starlink, ExtraHop’s $900M exit
News broke this morning that Bain Capital Private Equity and Crosspoint Capital Partners are purchasing Seattle-based network security startup ExtraHop.
Part of the Network Detection and Response (NDR) market, ExtraHop’s security solutions are for companies that manage assets in the cloud and on-site, “something that could be useful as more companies find themselves in that in-between state,” report Ron Miller and Alex Wilhelm.
Just one year ago, ExtraHop was closing in on $100 million in ARR and was considering an IPO, so Ron and Alex spoke to ExtraHop CTO and co-founder Jesse Rothstein to learn more about how (and why) the deal came together.
Have a great week, and thanks for reading!
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.
Xometry is taking its excess manufacturing capacity business public
Image Credits: Prasit photo (opens in a new window)/ Getty Images
Xometry, a Maryland-based service that connects companies with manufacturers with excess production capacity around the world, filed an S-1 form with the U.S. Securities and Exchange Commission last week announcing its intent to become a public company.
As the global supply chain tightened during the pandemic in 2020, a company that helped find excess manufacturing capacity was likely in high demand.
But growth aside, it’s clear that Xometry is no modern software business, at least from a revenue-quality profile.
It’s time for security teams to embrace security data lakes
Image Credits: Malorny (opens in a new window) / Getty Images
The average corporate security organization spends $18 million annually but is largely ineffective at preventing breaches, IP theft and data loss. Why?
The fragmented approach we’re currently using in the security operations center (SOC) does not work. It’s time to replace the security information and event management (SIEM) approach with security data lakes.
The reduced reliance on the SIEM is well underway, along with many other changes. The SIEM is not going away overnight, but its role is changing rapidly, and it has a new partner in the SOC — the security data lake.
China’s drive to compete against Starlink for the future of orbital internet
Image Credits: STR/China News Service (CNS)/AFP (opens in a new window)/ Getty Images
There has been a wave of businesses over the past several years hoping to offer broadband internet delivered from thousands of satellites in low-Earth orbit (LEO), providing coverage of most of the earth’s surface.
In tandem with the accelerated deployment of SpaceX’s Starlink constellation in 2020, China has rapidly responded in terms of policy, financing and technology. While still in early development, a “Chinese answer to Starlink,” SatNet, and the associated GuoWang are likely to compete in certain markets with Starlink and others while also fulfilling a strategic purpose from a government perspective.
With considerable backing from very high-level actors, we are likely to see the rollout of a Red Star(link) over China (and the rest of the world) over the coming years.
This SPAC is betting that a British healthcare company can shake up the US market
Image Credits: Nigel Sussman (opens in a new window)
Babylon Health, a British health tech company, is pursuing a U.S. listing via a blank-check company, or SPAC.
While we wait for Robinhood’s IPO, The Exchange dove into its fundraising history, its product, its numbers and, bracing ourselves for impact, its projections.
The hidden benefits of adding a CTO to your board
Image Credits: Westend61 / Getty Images
Conventional wisdom says your board should include a few CEOs who can offer informed advice from an entrepreneur’s perspective, but adding a technical leader to the mix creates real upside, according to Abby Kearns, chief technology officer at Puppet.
Beyond their engineering experience, CTOs can help founders set realistic timelines, help identify pain points and bring what Kearns calls “pragmatic empathy” to high-pressure situations.
They can also be an effective advocate for founder teams who need help explaining why a launch is delayed or new engineering hires are badly needed.
“A CTO understands the nuts and bolts,” says Kearns.
6 career options for ex-founders seeking their next adventure
Image Credits: Marie LaFauci / Getty Images
As someone with “founder” on your resume, you face a greater challenge when trying to get a traditional salaried job.
You’ve already shown that you really want to lead a company, not just rise up the ladder, which means some employers are less likely to hire you.
So what should you do? Especially if your life partner and/or bank account are burnt out on the income volatility of startups?
Here are six options for ex-founders planning their next move.
How bottom-up sales helped Expensify blaze the path for SaaS
Image Credits: Nigel Sussman
In the fifth and final part of Expensify’s EC-1, Anna Heim explores how the company built its business, true to form, in an unexpected way.
“You’d expect an expense management company to have a large sales department and advertise through all kinds of channels to maximize customer acquisition, Anna writes. But “Expensify just doesn’t do what you think it should.
“Keeping in mind this company’s propensity to just stick to its guts, it’s not much of a surprise that it got to more than $100 million in annual recurring revenue and millions of users with a staff of 130, some contractors, and an almost non-existent sales team.”
How is that much growth possible without a sales team? Word of mouth.
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Equity Monday: Jeff’s going to space, and everyone wants a piece of Flipkart
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.
It’s WWDC week, so expect a deluge of Apple news to overtake your Twitter feed here and there over the next few days. But there’s a lot more going on, so let’s dig in:
- The Weekend: A supercharged, supercharged Model S Tesla car is not coming out. Instead, a merely supercharged version will come out. It’s still stupid fast and expensive. And Nigeria’s war with Twitter continued, with new efforts from the African nation to limit access to the social media service within its borders.
- This Morning: Flipkart is raising $3 billion at a roughly $40 billion valuation. The deal underscores not just how big the Indian tech scene is, but also how much investor interest there is in e-commerce bets more generally. And Jeff Bezos is going to space. Soon!
- Funding Rounds: Trulioo raised a $394 million Series D. The Canadian startup is now worth far more than $1 billion. And Chinese company Kanzhun is going public in the United States, which raised an eyebrow here amongst the Equity Morning Crew.
- Take The Damn Equity Survey: Take it! All the cools kids are taking it!
And that’s your start to the week. More to come from your friends here on Wednesday, and Friday. Chat soon!
Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!
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Huawei officially launches Android alternative HarmonyOS for smartphones
Think you’re living in a hyper-connected world? Huawei’s proprietary HarmonyOS wants to eliminate delays and gaps in user experience when you move from one device onto another by adding interoperability to all devices, regardless of the system that powers them.
Two years after Huawei was added to the U.S. entity list that banned the Chinese telecom giant from accessing U.S. technologies, including core chipsets and Android developer services from Google, Huawei’s alternative smartphone operating system was unveiled.
On Wednesday, Huawei officially launched its proprietary operating system HarmonyOS for mobile phones. The firm began building the operating system in 2016 and made it open-source for tablets, electric vehicles and smartwatches last September. Its flagship devices such as Mate 40 could upgrade to HarmonyOS starting Wednesday, with the operating system gradually rolling out on lower-end models in the coming quarters.
HarmonyOS is not meant to replace Android or iOS, Huawei said. Rather, its application is more far-reaching, powering not just phones and tablets but an increasing number of smart devices. To that end, Huawei has been trying to attract hardware and home appliance manufacturers to join its ecosystem.
To date, more than 500,000 developers are building applications based on HarmonyOS. It’s unclear whether Google, Facebook and other mainstream apps in the West are working on HarmonyOS versions.
Some Chinese tech firms have answered Huawei’s call. Smartphone maker Meizu hinted on its Weibo account that its smart devices might adopt HarmonyOS. Oppo, Vivo and Xiaomi, which are much larger players than Meizu, are probably more reluctant to embrace a rival’s operating system.
Huawei’s goal is to collapse all HarmonyOS-powered devices into one single control panel, which can, say, remotely pair the Bluetooth connections of headphones and a TV. A game that is played on a phone can be continued seamlessly on a tablet. A smart soymilk blender can customize a drink based on the health data gleaned from a user’s smartwatch.
Devices that aren’t already on HarmonyOS can also communicate with Huawei devices with a simple plug-in. Photos from a Windows-powered laptop can be saved directly onto a Huawei phone if the computer has the HarmonyOS plug-in installed. That raises the question of whether Android, or even iOS, could, one day, talk to HarmonyOS through a common language.
The HarmonyOS launch arrived days before Apple’s annual developer event scheduled for next week. A recent job posting from Apple mentioned a seemingly new concept, homeOS, which may have to do with Apple’s smart home strategy, as noted by MacRumors.
Huawei denied speculations that HarmonyOS is a derivative of Android and said no single line of code is identical to that of Android. A spokesperson for Huawei declined to say whether the operating system is based on Linux, the kernel that powers Android.
Several tech giants have tried to introduce their own mobile operating systems, to no avail. Alibaba built AliOS based on Linux but has long stopped updating it. Samsung flirted with its own Tizen but the operating system is limited to powering a few Internet of Things, like smart TVs.
Huawei may have a better shot at drumming up developer interest compared to its predecessors. It’s still one of China’s largest smartphone brands despite losing a chunk of its market after the U.S. government cut it off from critical chip suppliers, which could hamper its ability to make cutting-edge phones. HarmonyOS also has a chance to create an alternative for developers who are disgruntled with Android, if Huawei is able to capture their needs.
The U.S. sanctions do not block Huawei from using Android’s open-source software, which major Chinese smartphone makers use to build their third-party Android operating system. But the ban was like a death knell for Huawei’s consumer markets overseas as its phones abroad lost access to Google Play services.
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ChargerHelp co-founder, CEO Kameale C. Terry is heading to TC Sessions: Mobility 2021
Thousands of electric vehicle charging stations will be built around the country over the next decade. ChargerHelp!, founded in January 2020 by Kameale C. Terry and Evette Ellis, wants to make sure they stay up and running.
The idea for the on-demand repair app for EV charging stations came to Terry when she was working at EV Connect, where she held a number of roles including director of programs and head of customer experience. She noticed long wait times to fix non-electrical issues at charging stations due to the industry practice to use electrical contractors.
“When the stations went down we really couldn’t get anyone on site because most of the issues were communication issues, vandalism, firmware updates or swapping out a part — all things that were not electrical,” Terry said in an interview with TechCrunch earlier this year.
After Terry quit her job to start ChargerHelp!, she joined the Los Angeles Cleantech Incubator, where she developed a first-of-its-kind EV Network Technician Training Curriculum. Shortly after, Terry and Ellis were accepted into Elemental Excelerator’s startup incubator and have landed contracts with major EV charging network providers like EV Connect and SparkCharge.
The company uses a workforce-development approach to hiring, meaning that they only hire in cohorts. Workers receive full training, earn two safety licenses, are guaranteed a wage of $30 an hour and receive shares in the startup, Terry said.
We’re excited to announce that Kameale Terry will be joining us at TC Sessions: Mobility 2021, a one-day virtual event that is scheduled June 9. We’ll be covering a lot of ground with Terry, from how she developed her EV repair curriculum to what she sees in the company’s future.
Each year TechCrunch brings together founders, investors, CEOs and engineers who are working on all things transportation and mobility. If it moves people and packages from Point A to Point B, we cover it. This year’s agenda is filled with leaders in the mobility space who are shaping the future of transportation, from EV charging to autonomous vehicles to urban air taxis.
Among the growing list of speakers are Rimac Automobili founder Mate Rimac, Revel Transit CEO Frank Reig, community organizer, transportation consultant and lawyer Tamika L. Butler and Remix/Via co-founder and CEO Tiffany Chu, who will come together to discuss how (and if) urban mobility can increase equity while still remaining a viable business.
Other guests include Motional’s President and CEO Karl Iagnemma, Aurora co-founder and CEO Chris Urmson, GM‘s VP of Global Innovation Pam Fletcher, Scale AI CEO Alexandr Wang, Joby Aviation founder and CEO JoeBen Bevirt, investor and LinkedIn founder Reid Hoffman (whose special purpose acquisition company just merged with Joby), investors Clara Brenner of Urban Innovation Fund, Quin Garcia of Autotech Ventures and Rachel Holt of Construct Capital, Zoox co-founder and CTO Jesse Levinson.
We also recently announced a panel dedicated to China’s robotaxi industry, featuring three female leaders from Chinese AV startups: AutoX’s COO Jewel Li, Huan Sun, general manager of Momenta Europe with Momenta, and WeRide’s VP of Finance Jennifer Li.
Don’t wait to book your tickets to TC Sessions: Mobility as prices go up at the door. Grab your passes right now and hear from today’s biggest mobility leaders.
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Equity Monday: TechCrunch goes Yahoo while welding robots raise $56M
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.
This morning was a notable one in the life of TechCrunch the publication, as our parent company’s parent company decided to sell our parent company to a different parent company. And now we’re going to have to get new corporate IDs, again, as it appears that our new parent company’s parent company wants to rebrand our parent company. As Yahoo.
Cool.
Anyway, a bunch of other stuff happened as well:
- Flywire, a Boston-based payments company filed to go public. More on the site about this shortly.
- Earnings this week are coming from Uber and Lyft and PayPal and Square and more.
- Dell is offloading Boomi to private equity as it wants to de-lever. Again.
- Cloud market share numbers are out, but what matters is that the growth of the cloud market helps explain the growth that we’re seeing in the startup game. (Our own Ron Miller dug into some rival cloud metrics here.)
- The Chinese government’s crackdown on its tech giants continues. And it’s impacting valuations.
- And Wealthsimple raised an epic CAD$750 million round, while Ohio-based Path Robotics just raised a $56 million Series B. Super cool.
We’re back Wednesday with something special. Chat then!
Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!
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Crusoe Energy is tackling energy use for cryptocurrencies and data centers and greenhouse gas emissions
The two founders of Crusoe Energy think they may have a solution to two of the largest problems facing the planet today — the increasing energy footprint of the tech industry and the greenhouse gas emissions associated with the natural gas industry.
Crusoe, which uses excess natural gas from energy operations to power data centers and cryptocurrency mining operations, has just raised $128 million in new financing from some of the top names in the venture capital industry to build out its operations — and the timing couldn’t be better.
Methane emissions are emerging as a new area of focus for researchers and policymakers focused on reducing greenhouse gas emissions and keeping global warming within the 1.5 degree target set under the Paris Agreement. And those emissions are just what Crusoe Energy is capturing to power its data centers and bitcoin mining operations.
The reason why addressing methane emissions is so critical in the short term is because these greenhouse gases trap more heat than their carbon dioxide counterparts and also dissipate more quickly. So dramatic reductions in methane emissions can do more in the short term to alleviate the global warming pressures that human industry is putting on the environment.
And the biggest source of methane emissions is the oil and gas industry. In the U.S. alone roughly 1.4 billion cubic feet of natural gas is flared daily, said Chase Lochmiller, a co-founder of Crusoe Energy. About two-thirds of that is flared in Texas, with another 500 million cubic feet flared in North Dakota, where Crusoe has focused its operations to date.
For Lochmiller, a former quant trader at some of the top American financial services institutions, and Cully Cavness, a third generation oil and gas scion, the ability to capture natural gas and harness it for computing operations is a natural combination of the two men’s interests in financial engineering and environmental preservation.
NEW TOWN, ND – AUGUST 13: View of three oil wells and flaring of natural gas on The Fort Berthold Indian Reservation near New Town, ND on August 13, 2014. About 100 million dollars’ worth of natural gas burns off per month because a pipeline system isn’t in place yet to capture and safely transport it. The Three Affiliated Tribes on Fort Berthold represent Mandan, Hidatsa and Arikara Nations. It’s also at the epicenter of the fracking and oil boom that has brought oil royalties to a large number of Native Americans living there. (Photo by Linda Davidson / The Washington Post via Getty Images)
The two Denver natives met in prep-school and remained friends. When Lochmiller left for MIT and Cavness headed off to Middlebury they didn’t know that they’d eventually be launching a business together. But through Lochmiller’s exposure to large-scale computing and the financial services industry, and Cavness’ assumption of the family business, they came to the conclusion that there had to be a better way to address the massive waste associated with natural gas.
Conversation around Crusoe Energy began in 2018 when Lochmiller and Cavness went climbing in the Rockies to talk about Lochmiller’s trip to Mt. Everest.
When the two men started building their business, the initial focus was on finding an environmentally friendly way to deal with the energy footprint of bitcoin mining operations. It was this pitch that brought the company to the attention of investors at Polychain, the investment firm started by Olaf Carlson-Wee (and Lochmiller’s former employer), and investors like Bain Capital Ventures and new investor Valor Equity Partners.
(This was also the pitch that Lochmiller made to me to cover the company’s seed round. At the time I was skeptical of the company’s premise and was worried that the business would just be another way to prolong the use of hydrocarbons while propping up a cryptocurrency that had limited actual utility beyond a speculative hedge against governmental collapse. I was wrong on at least one of those assessments.)
“Regarding questions about sustainability, Crusoe has a clear standard of only pursuing projects that are net reducers of emissions. Generally the wells that Crusoe works with are already flaring and would continue to do so in the absence of Crusoe’s solution. The company has turned down numerous projects where they would be a buyer of low-cost gas from a traditional pipeline because they explicitly do not want to be net adders of demand and emissions,” wrote a spokesman for Valor Equity in an email. “In addition, mining is increasingly moving to renewables and Crusoe’s approach to stranded energy can enable better economics for stranded or marginalized renewables, ultimately bringing more renewables into the mix. Mining can provide an interruptible base load demand that can be cut back when grid demand increases, so overall the effect to incentivize the addition of more renewable energy sources to the grid.”
Other investors have since piled on, including: Lowercarbon Capital, DRW Ventures, Founders Fund, Coinbase Ventures, KCK Group, Upper90, Winklevoss Capital, Zigg Capital and Tesla co-founder JB Straubel.
The company now operates 40 modular data centers powered by otherwise wasted and flared natural gas throughout North Dakota, Montana, Wyoming and Colorado. Next year that number should expand to 100 units as Crusoe enters new markets such as Texas and New Mexico. Since launching in 2018, Crusoe has emerged as a scalable solution to reduce flaring through energy intensive computing, such as bitcoin mining, graphical rendering, artificial intelligence model training and even protein folding simulations for COVID-19 therapeutic research.
Crusoe boasts 99.9% combustion efficiency for its methane, and is also bringing additional benefits in the form of new networking buildout at its data center and mining sites. Eventually, this networking capacity could lead to increased connectivity for rural communities surrounding the Crusoe sites.
Currently, 80% of the company’s operations are being used for bitcoin mining, but there’s increasing demand for use in data center operations, and some universities, including Lochmiller’s alma mater of MIT, are looking at the company’s offerings for their own computing needs.
“That’s very much in an incubated phase right now,” said Lochmiller. “A private alpha where we have a few test customers… we’ll make that available for public use later this year.”
Crusoe Energy Systems should have the lowest data center operating costs in the world, according to Lochmiller and while the company will spend money to support the infrastructure buildout necessary to get the data to customers, those costs are negligible when compared to energy consumption, Lochmiller said.
The same holds true for bitcoin mining, where the company can offer an alternative to coal-powered mining operations in China and the construction of new renewable capacity that wouldn’t be used to service the grid. As cryptocurrencies look for a way to blunt criticism about the energy usage involved in their creation and distribution, Crusoe becomes an elegant solution.
Institutional and regulatory tailwinds are also propelling the company forward. Recently New Mexico passed new laws limiting flaring and venting to no more than 2% of an operator’s production by April of next year, and North Dakota is pushing for incentives to support on-site flare capture systems while Wyoming signed a law creating incentives for flare gas reduction applied to bitcoin mining. The world’s largest financial services firms are also taking a stand against flare gas with BlackRock calling for an end to routine flaring by 2025.
“Where we view our power consumption, we draw a very clear line in our project evaluation stage where we’re reducing emissions for an oil and gas projects,” Lochmiller said.
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