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With Goat Capital, Justin Kan and Robin Chan want to keep founding alongside the right teams
Justin Kan and Robin Chan have each been angel investing for more than a decade. They’re starting a new fund together now, though, to stay involved as cofounders of more startups.
Goat Capital is a hybrid incubator versus a pure seed investment firm, Chan explains. It will be writing checks ranging between roughly half a million and $3 million dollars, and it is only planning to raise $40 million — so the checks will be selective.
The offering is that “you’re going to be working with Justin and Robin,” he says, as a direct collaboration to help your company succeed. With $25 million closed already from themselves and several family offices, the fund has begun investing globally with particular interests in digital health, ecommerce, digital entertainment and gaming, robotics and climate change.
The goal is not just about being the Greatest Of All Time, Kan adds. In a startup, you “climb high heights and eat shit to get there. That tenacity is what we want.”
It’s a nod to their own successes and struggles as founders over the years, and what they have seen as investors and advisors to a wide range of companies around the world (Twitter, Xiaomi, Bird, Uber, Square, Ginkgo Bioworks, Scale.ai, Cruise, Razorpay, Xendit, Equipment Share, Wave, Teachable, Semantic Machines, Rippling, Built Robotics, etc.)
Kan was a cofounder of Justin.tv, which became Twitch as well as Socialcam. He later had an on-demand company called Exec and previously a calendar app called Kiko, both of which sold for small amounts. Most recently, he took a big shot at the traditional legal industry with Atrium, a law firm and legal software startup that raised big rounds of funding before shuttering earlier this year.
His prototype for Goat is Alto Pharmacy, a booming digital health unicorn today that the founders started in his living room.
“We do think founders should be treated like athletes, going for gold really hard… the Olympic metaphor,” Kan qualifies about the name. “That means grinding for years — and having to rest, too. I’m very passionate about mental health and wellness as part of the journey.” (More on that here.)
Chan, meanwhile, sold his gaming startup in China to Zynga a decade ago, then helped lead a failed attempt to buy Blackberry before founding Operator, a well-funded ecommerce company that closed a few years ago. During the pandemic, he helped create Operation Masks, a nonprofit that has been providing PPE across the US. He’s also an ongoing advisor to Sleeper, Bird, Expa and Flipboard.
The focus will be fully global now. Chan explains that even though you’re seeing more challenges to building a truly global company these days, there’s more space for local startups to win big.
“There’s the US internet, the China internet, the India internet, the EU internet — in some ways it makes those markets more valuable to win, like traditional media. Broadcast and cable are highly geographic but the franchise value becomes higher because of the regulatory moat.”
Chan, on that note, met Kan back when he was a director at [current TechCrunch owner] Verizon Wireless, when Justin.tv was trying to negotiate for free data. When I asked if they had worked out a deal during a phone interview, Kan said “you [expletive] didn’t.”
But it did lead to other co-investments later on, including Ramp, Workstream and others, and now this fund.
Today, Kan says that the focus on teams will be as flexible as the times. “When we started, the internet was America,” he says. “If you weren’t there, you weren’t a company. It’s been a complete reversal of that. Now teams are international, talent is international, more and more companies are building remote first — although you’d seen that before given the costs of the Bay. We have an entirely remote company in North Carolina, Grammarly in Europe… it’s more and more the norm. Smart founders are going anywhere to find talent.
For the two partners, this new fund will be about staying connected to that certain startup feeling that is elusive for anyone trying to build something great.
“There’s nothing more magical than being in the first step of a special company,” Chan says. “That glimpse of the future. We wouldn’t get the same feeling at the growth stage versus working with small teams or a single founder. I think we have the instinct.”
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DCM is poised to make roughly $1 billion off its $26 million bet on Bill.com
David Chao, the cofounder of the cross-border venture firm DCM, speaks English, Japanese, and Mandarin. But he also knows how to talk to founders.
It’s worth a lot. Consider that DCM could see more than $1 billion from the $26.4 million it invested across 14 years in the cloud-based business-to-business payments company Bill.com, starting with its A round. Indeed, by the time Bill.com went public last December, when its shares priced at $22 apiece, DCM’s stake — which was 16% sailing into the IPO — was worth a not-so-small fortune.
Since then, Wall Street’s lust for both digital payments and subscription-based revenue models has driven Bill.com’s shares to roughly $90 each. Little wonder that in recent weeks, DCM has sold roughly 70 percent of a stake that’s currently valued at roughly $900 million and was worth more than $1 billion a few weeks ago. (It still owns 30 percent of its position and says the shares are free and clear to trade.)
We talked with Chao earlier today about Bill.com, on whose board he sits and whose founder, René Lacerte, is someone Chao backed previously. We also talked about another very lucrative stake DCM holds right now, about DCM’s newest fund, and about how Chao navigates between the U.S. and China as relations between the two countries worsen. Our conversation has been edited lightly for length and clarity.
TC: I’m seeing you owned about 33% of Bill.com after the first round. How did that initial check come to pass? Had you invested before in Lacerte?
DC: That’s right. René started [an online payroll] company called PayCycle and we’d backed him and it sold to Intuit [in 2009] and René made good money and we made money. And when he wanted to start this next thing, he said, ‘Look, I want to do something that’s a bigger outcome. I don’t want to sell the company along the way. I just want this time to do a big public company.’
TC: Why did he sell PayCycle if that was his ambition?
DC: It was largely because when you’re a first-time CEO and entrepreneur and a large company offers you the chance to make millions and millions of dollars, you’re a bit more tempted to sell the company. And it was a good price. For where the company was, it was a decent price.
Bill.com was a little bit different. We had good offers before going public. We even had an offer right before we went public. But René said, ‘No, this time, I want to go all the way.’ And he fulfilled that promise he’d made to himself. It’s a 14-year success story.
TC: You’ve sold most of your stake in recent weeks; how does that outcome compare with other recent exits for DCM?
DC: We actually have another recent one that’s phenomenal. We invested in a company called Kuaishou in China. It’s the largest competitor to Bytedance’s TikTok in China. We’ve invested $49.3 million altogether and now that stake is worth $3.8 billion. The company is still private held, but we actually cashed out around 15% of our holdings. and with just that sale alone we’ve already [seen 10 times] that $30 million.
TC: How do you think about selling off your holdings, particularly once a company has gone public?
DC: It’s really case by case. In general, once a company goes public, we probably spend somewhere between 18 months to three years [unwinding our position]. We had two big IPOs in Japan last year. One company [has] a $1.6 billion market cap; the other is a $2.6 billion company. There are some [cases] that are 12 months and there are some [where we own some shares] for four or five years.
TC: What types of businesses are these newly public companies in Japan?
DC: They’re both B2B. One is pretty much the Bill.com of Japan. The other makes contact management software
TC: Isn’t DCM also an investor in Blued, the LGBTQ dating app that went public in the U.S. in July?
DC: Yes, our stake wasn’t very big, but we were probably the first major VC to jump in because it was controversial.
TC: I also saw that you closed a new $880 million early stage fund this summer.
DC: Yes, that’s right. It was largely driven by the fact that many of our funds have done well. We’re now on fund nine, but our fund seven is on paper today 9x, and even the fund that Bill.com is in, fund four, is now more than 3x. So is fund five. So we’re in a good spot.
TC: As a cross-border fund, what does the growing tension between the U.S and China mean for your team and how it operates?
DC: It’s not a huge impact. If we were currently investing in semiconductor companies, for example, I think it would be a pretty rough period, because [the U.S.] restricts all the money coming from any foreign sources. At least, you’d be under strong scrutiny. And if we invested in a semiconductor company in China, you might not be able to go public in the U.S.
But the kinds of deals that we do, which are largely B2B and B2C — more on the software and services side — they aren’t as impacted. I’d say 90% of our deals in China focus on the domestic market. And so it doesn’t really impact us as much.
I think some of the Western institutions putting money into the Chinese market — that might be decreasing, or at least they’re a little bit more on the sidelines, trying to figure out whether they should be continuing to invest in China. And maybe for Chinese companies, less companies will go public in the U.S., etcetera. But some of these companies can go public in Hong Kong.
TC: How you feel about the U.S. administration’s policies? Do you understand them? Are you frustrated by them?
DC: I think it requires patience, because what [is announced and] goes on the news, versus what is really implemented and how it truly affects the industry, there’s a huge gap.
[Correction: This story originally reported that DCM had sold nearly $900 worth of shares and maintains another 30%; the firm’s entire position is currently worth $900 million, with 30% of those shares still held.]
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Elon Musk says Tesla will ‘one day’ produce ‘super efficient home HVAC’ with HEPA filtering
Elon Musk has previously touted the “Bioweapon Defense Mode” boasted by Tesla’s vehicles, which are designed to provide excellent air quality inside the car even in the face of disastrous conditions without, thanks in part to high-efficiency HEPA air filtration. Now, Musk has said on Twitter that he hopes to one day provide similar air filtration along with home HVAC systems.
Tesla, while primarily an automaker, is also already in the business of home energy and power generation, thanks to its acquisition of SolarCity, its current production of solar roofing products and its business building Tesla batteries for storage of power generated from green sources at home. While it hasn’t yet seemed to make any moves to enter into any other parts of home building or infrastructure, HVAC systems actually would be a logical extension of its business, since they represent a significant part of the overall energy consumption of a home, depending on its heating and cooling sources.
We will make super efficient home hvac with hepa filters one day
— Elon Musk (@elonmusk) September 11, 2020
Boosting home HVAC efficiency would have the added benefit of making Tesla’s other home energy products more appealing to consumers, since it would presumably help make it easier to achieve true off-grid (or near off-grid) self-sufficiency.
As for the company’s HEPA filtration, despite the jokey name, Tesla actually takes Bioweapon Defense Mode very seriously. In a blog post in 2016, it detailed what went into the system’s design, along with testing data to back up its claims of a HEPA filter that’s “ten times more efficient than standard automotive filters.” While Tesla doesn’t cited wildfires in that post, it does list “California freeways during rush hour, smelly marshes, cow pastures in the Central Valley of California, and major cities in China” in terms of challenges it wanted it to be able to handle.
Many experts are predicting that the wildfires we’re currently seeing devastating large portions of the west coast of the U.S. will only get worse as environmental conditions continue to suffer the impact of climate change. Given that, and given Tesla’s larger business goals of offering a range of products that neutralize or reduce the ecological impact of its customers, more efficient and effective home HVAC products don’t seem that far outside its operational expertise.
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Carbon Health to launch 100 pop-up COVID-19 testing clinics across the US
Primary care health tech startup Carbon Health has added a new element to its “omnichannel” healthcare approach with the launch of a new pop-up clinic model that is already live in San Francisco, LA, Seattle, Brooklyn and Manhattan, with Detroit to follow soon – and that will be rolling out over the next weeks and months across a variety of major markets in the U.S., ultimately resulting in 100 new COVID-19 testing sites that will add testing capacity on the order of around an additional 100,000 patients per month across the country.
So far, Carbon Health has focused its COVID-19 efforts around its existing facilities in the Bay Area, and also around pop-up testing sites set up in and around San Francisco through collaboration with genomics startup Color, and municipal authorities. Now, Carbon Health CEO and co-founder Even Bali tells me in an interview that the company believes the time is right for it to take what it has learned and apply that on a more national scale, with a model that allows for flexible and rapid deployment. In fact, Bali says the they realized and began working towards this goal as early as March.
“We started working on COVID response as early as February, because we were seeing patients who are literally coming from Wuhan, China to our clinics,” Bali said. “We expected the pandemic to hit any time. And partially because of the failure of federal government control, we decided to do everything we can to be able to help out with certain things.”
That began with things that Carbon could do locally, more close to home in its existing footprint. But it was obvious early on to Bali and his team that there would be a need to scale efforts more broadly. To do that, Carbon was able to draw on its early experience.
“We have been doing on-site, we have been going to nursing homes, we have been working with companies to help them reopen,” he told me. “At this point, I think we’ve done more than 200,000 COVID tests by ourselves. And I think I do more than half of all the Bay Area, if you include that the San Francisco City initiative is also partly powered by Carbon Health, so we’re already trying to scale as much as possible, but at some point we were hitting some physical space limits, and had the idea back in March to scale with more pop-up, more mobile clinics that you can actually put up like faster than a physical location.”
Interior of one of Carbon Health’s COVID-19 testing pop-up clinics in Brooklyn.
To this end, Carbon Health also began using a mobile trailer that would travel from town to town in order to provide testing to communities that weren’t typically well-served. That ended up being a kind of prototype of this model, which employs construction trailers like you’d see at a new condo under development acting as a foreman’s office, but refurbished and equipped with everything needed for on-site COVID testing run by medical professionals. These, too, are a more temporary solution, as Carbon Health is working with a manufacturing company to create a more fit-for-purpose custom design that can be manufactured at scale to help them ramp deployment of these even faster.
Carbon Health is partnering with Reef Technologies, a SoftBank -backed startup that turns parking garage spots into locations for businesses, including foodservice, fulfilment, and now Carbon’s medical clinics. This has helped immensely with the complications of local permitting and real estate regulations, Bali says. That means that Carbon Health’s pop-up clinics can bypass a lot of the red tape that slows the process of opening more traditional, permanent locations.
While cost is one advantage of using this model, Bali says that actually it’s not nearly as inexpensive as you might think relative to opening a more traditional clinic – at least until their custom manufacturing and economies of scale kick in. But speed is the big advantage, and that’s what is helping Carbon Health look ahead from this particular moment, to how these might be used either post-pandemic, or during the eventual vaccine distribution phase of the COVID crisis. Bali points out that any approved vaccine will need administration to patients, which will require as much, if not more infrastructure than testing.
Exterior of one of Carbon Health’s COVID-19 testing pop-up clinics in Brooklyn.
Meanwhile, Carbon Health’s pop-up model could bridge the gap between traditional primary care and telehealth, for ongoing care needs unrelated to COVID.
“A lot of the problems that telemedicine is not a good solution for, are the things where a video check-in with a doctor is nearly enough, but you do need some diagnostic tests – maybe you might you may need some administration, or you may need like a really simple physical examination that nursing staff can do with the instructions of the doctor. So if you think about those cases, pretty much 90% of all visits can actually be done with a doctor on video, and nursing staff in person.”
COVID testing is an imminent, important need nationwide – and COVID vaccine administration will hopefully soon replace it, with just as much urgency. But even after the pandemic has passed, healthcare in general will change dramatically, and Carbon Health’s model could be a more permanent and scalable way to address the needs of distributed care everywhere.
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Equity Monday: YC Demo Day, two funding rounds and where’s Palantir’s S-1?
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 big news, chats 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, and don’t forget to check out last Friday’s episode.
What was on the docket this morning? All sorts of good stuff, though the Sumo Logic S-1 did drop just after we wrapped. Here’s today’s rundown:
- YC Demo day is this week, so make sure to stick around TechCrunch and Extra Crunch for all our coverage.
- SPACs continue, with more automotive companies looking at alt-routes to the public markets. This time it’s Luminar. And, here’s the Bill Gurley post that we promised to link to.
- E-commerce and on-demand are booming in China after we saw similar results via Uber and domestic e-commerce players.
- The Fortnite-Apple brouhaha continues with more filings and even Microsoft weighing in. At the same time TikTok v. The United States appears set to go to court. (Zuck is behind some anti-TikTok Washington sentiment, it appears.)
- The Palantir S-1 has gone missing. Where is it? Give it to us!
- Dataiku has raised $100 million for its enterprise AI platform. Forbes has more.
- Datasembly has raised $10.3 million in new capital for its IRL store data service. TechCrunch has more.
- The Anti-Antitrust Club is live and you can read it here. We’re trying to find out who is taking on the biggest names in tech on purpose. Who would be so garishly bold? The Anti-Antitrust club!
Whew, with YC and Palantir this week and a chat with Twilio’s CEO it’s going to be an active few days. Ready?
Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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Google, Nokia, Qualcomm are investors in $230M Series A2 for Finnish phone maker, HMD Global
Mobile device maker HMD Global has announced a $230M Series A2 — its first tranche of external funding since a $100M round back in 2018 when it tipped over into a unicorn valuation. Since late 2016 the startup has exclusively licensed Nokia’s brand for mobile devices, going on to ship some 240M devices to date.
Its latest cash injection is notable both for its size (HMD claims it as the third largest funding round in Europe this year); and the profile of the strategic investors ploughing in capital — namely: Google, Nokia and Qualcomm.
Though whether a tech giant (Google) whose OS dominates the world’s smartphone market (Android) becoming a strategic investor in Europe’s last significant mobile OEM (HMD) catches the attention of regional competition enforcers remains to be seen. Er, vertical integration anyone? (To wit: It’s a little over two years since Google was slapped with a $5BN penalty by EU regulators for antitrust violations related to how it operates Android — and the Commission has said it continues to monitor the market ‘remedies’.)
In a further quirk, when we spoke to HMD Global CEO, Florian Seiche, ahead of today’s announcement, he didn’t expect the names of the investors to be disclosed — but a press spokesperson had already shared them with us so he duly confirmed the trio are investors in the round. (But wouldn’t be drawn on how much equity Google is grabbing.)
HMD’s smartphones run on Google’s Android platform, which gives the tech giant a firm business reason for supporting the mobile maker in growing the availability of Google-packed hardware in key growth markets around the world.
And while HMD likens its consistent (and consistently updated) flavor of Android to the premium ‘pure’ Android experience you get from Google’s own-brand Pixel smartphones, the difference is the Finnish company offers devices across the range of price points, and targets hardware at mobile users in developing markets.
The upshot is relatively little overlap with Google’s Pixel hardware, and still plenty of business upside for Google should HMD grow the pipeline of Google services users (as it makes money by targeting ads).
Connoisseurs of mobile history may see more than a little irony in Google investing into Nokia branded smartphones (via HMD), given Android’s role in fatally disrupting Nokia’s lucrative smartphone business — knocking the Finnish giant off its perch as the world’s number one mobile maker and ushering in an era of Android-fuelled Asian mobile giants. But wait long enough in tech and what goes around oftentimes comes back around.
“We’re extremely excited,” said Seiche, when we mention Google’s pivotal role in Nokia’s historical downfall in smartphones. “How we are going to write that next chapter on smartphones is a critical strategic pillar for the company and our opportunity to team up so closely with Google around this has been a very, very great partnership from the beginning. And then this investment definitely confirms that — also for the future.”
“It’s a critical time for the industry therefore having a clear strategy — having a clear differentiation and a different point of view to offer, we believe, is a fantastic asset that we have developed for ourselves. And now is a great moment for us to double down on this,” he added.
We also asked Seiche whether HMD has any interest in taking advantage of the European Commission’s Android antitrust enforcement decision — i.e. to fork Android and remove the usual Google services, perhaps swapping them out for some European alternatives, which is at least a possibility for OEMs selling in the region — but Seiche told us: “We have looked at it but we strongly believe that consumers or enterprise customers actually love [Google] services and therefore they choose those services for themselves.” (Millions of dollars of direct investment from Google also, presumably, helps make the Google services business case stack up.)
Nokia, meanwhile, has always had a close relationship with HMD — which was established by former Nokia execs for the sole purpose of licensing its iconic mobile brand. (The backstory there is a clause in the sale terms of Nokia’s mobile device division to Microsoft expired in 2016, paving the way for Nokia’s brand to be returned to the smartphone market without the prior Windows Mobile baggage.)
Its investment into HMD now looks like a vote of confidence in how the company has been executing in the fiercely competitive mobile space to date (HMD doesn’t break out a lot of detail about device sales but Seiche told us it sold in excess of 70M mobiles last year; that’s a combined figure for smartphones and feature phones) — as well as an upbeat assessment of the scope of the growth opportunity ahead of it.
On the latter front US-led geopolitical tensions between the West and China do look poised to generate a tail-wind for HMD’s business.
Mobile chipmaker Qualcomm, for example, is facing a loss of business, as US government restrictions threaten its ability to continue selling chips to Huawei; a major Chinese device maker that’s become a key target for US president Trump. Its interest in supporting HMD’s growth, therefore, looks like a way for Qualcomm to hedge against US government disruption aimed at Chinese firms in its mobile device maker portfolio.
While with Trump’s recent threats against the TikTok app it seems safe to assume that no tech company with a Chinese owner is safe.
As a European company, HMD is able to position itself as a safe haven — and Seiche’s sales pitch talks up a focus on security detail and overall quality of experience as key differentiating factors vs the Android hoards.
“We have been very clear and very consistent right from the beginning to pick these core principles that are close to our heart and very closely linked with the Nokia brand itself — and definitely security, quality and trust are key elements,” he told TechCrunch. “This is resonating with our carrier and retail customers around the world and it is definitely also a core fundamental differentiator that those partners that are taking a longer term view clearly see that same opportunity that we see for us going forward.”
HMD does use manufacturing facilities in China, as well as in a number of other locations around the world — including Brazil, India, Indonesia and Vietnam.
But asked whether it sees any supply chain risks related to continued use of Chinese manufacturers to build ‘secure’ mobile hardware, Seiche responded by claiming: “The most important [factor] is we do control the software experience fully.” He pointed specifically to HMD’s acquisition of Valona Labs earlier this year. The Finnish security startup carries out all its software audits. “They basically control our software to make sure we can live up to that trusted standard,” Seiche added.
Landing a major tranche of new funding now — and with geopolitical tension between the West and the Far East shining a spotlight on its value as alternative, European mobile maker — HMD is eyeing expansion in growth markets such as Africa, Brail and India. (Currently, HMD said it’s active in 91 markets across eight regions, with its devices ranged in 250,000 retail outlets around the world.)
It’s also looking to bring 5G to devices at a greater range of price-points, beyond the current flagship Nokia 8.3. Seiche also said it wants to do more on the mobile services side. HMD’s first 5G device, the flagship Nokia 8.3, is due to land in the US and Europe in a matter of weeks. And Seiche suggested a timeframe of the middle of next year for launching a 5G device at a mid tier price point.
“The 5G journey again has started, in terms of market adoption, in China. But now Europe, US are the key next opportunity — not just in the premium tier but also in the mid segment. And to get to that as fast as possible is one of our goals,” he said, noting joint-working with Qualcomm on that.
“We also see great opportunity with Nokia in that 5G transition — because they are also working on a lot of private LTE deployments which is also an interesting area since… we are also very strongly present in that large enterprise segment,” he added.
On mobile services, Seiche highlighted the launch of HMD Connect: A data SIM aimed at travellers — suggesting it could expand into additional connectivity offers in future, forging more partnerships with carriers.
“We have already launched several services that are close to the hardware business — like insurance for your smartphones — but we are also now looking at connectivity as a great area for us,” he said. “The first pilot of that has been our global roaming but we believe there is a play in the future for consumers or enterprise customers to get their connectivity directly with their device. And we’re partnering also with operators to make that happen.”
“You can see us more as a complement [to carriers],” he added, arguing that business “dynamics” for carriers have also changed substantially — and customer acquisition hasn’t been a linear game for some time.
“In a similar way when we talk about Google Pixel vs us — we have a different footprint. And again if you look at carriers where they get their subscribers from today is already today a mix between their own direct channels and their partner channels. And actually why wouldn’t a smartphone player be a natural good partner of choice also for them? So I think you’ll see that as a trend, potentially, evolving in the next couple of years.”
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Tencent wants to merge China’s esports archrivals Douyu and Huya
The war between two of China’s largest esports companies may soon come to a truce at the will of their investor, Tencent.
Tencent, the world’s biggest games publisher, announced late Monday a proposal to consolidate Douyu and Huya, the competing live-streaming sites focused on video games. Rather than paying in cash, the deal will see the pair enter a stock-for-stock merger.
The proposal is non-binding, but Tencent has paved the way for it to go through. In a separate deal, the entertainment giant agreed to pay Joyy, part-owner of Huya and the company behind TikTok’s serious rival Likee, $810 million in exchange for 30 million shares. Tencent will also buy 1 million shares from Huya CEO Dong Rongjie. Upon the transaction, Tencent will hold 51% of Huya’s shares and 70.4% of its voting rights.
Tencent is also the largest shareholder of Douyu, with a 38% stake and voting power.
What this means is the esports platforms that have long fought neck and neck for audiences and live-streaming hosts may soon need to work together. That’s good news for investors who have been hemorrhaging cash.
NYSE-listed Huya has a current market cap of $5.27 billion and Nasdaq-traded Douyu is worth $4.44 billion, giving the duo a combined value of around $10 billion. The pair will together control more than 300 million monthly esports users. By March, Douyu had 158 monthly active users and Huya claimed 151.3 MAUs, though there can be overlaps.
The question is who will be in charge of the consolidated behemoth. Could Mr. Dong be relinquishing control of Huya as he gives up a considerable amount of shares? Joyy already signaled its retreat in the first quarter when it stopped folding Huya’s operating results into its own report.
Ammo for Tencent
Industry observers believe the merger can significantly expand Tencent’s reach in the gaming supply chain. The company is the publisher behind blockbusters like the mobile versions of PUBG and Call of Duty, and the addition of a live-streaming empire will allow it to capture not just gamers but also the wider esports spectatorship.
It’s worth noting that Tencent has its own in-house Penguin Esports that’s a counterpart to Douyu and Huya. It’s not hard to imagine the three players integrating resources and generating synergies under Tencent’s oversight.
New challengers have sprung up in the field. While Douyu and Huya focused on esports from the outset, more general-purpose video services like Bilibili and Kuaishou have been luring legions of esports users in recent years. But lo and behold, Tencent is also an investor in Bilibili and Kuaishou.
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This startup reworked its privacy-friendly sensors to help battle COVID-19
One little-known home and retail automation startup might seem like an unlikely candidate to help combat the ongoing pandemic. But its founder says its technology can do just that, even if it wasn’t the company’s original plan.
Butlr, a spin-out of the MIT Media Lab, uses a mix of wireless, battery-powered hardware and artificial intelligence to track people’s movements indoors without violating their privacy. The startup uses ceiling-mounted sensors to detect individuals’ body heat to track where a person walks and where they might go next. The use cases are near-endless. The sensors can turn on mood-lighting or air conditioning when it detects movement, help businesses understand how shoppers navigate their stores, determine the wait-time in the queues at the checkout and even sound the alarm if it detects a person after-hours.
By using passive infrared sensors to detect only body heat, the sensors don’t know who you are — only where you are and where you’re heading. The tracking stops as soon as you leave the sensor’s range, like when you leave a store.
The technology is in high demand. Butlr says some 200,000 retail stores use its technology, not least because it’s far cheaper than the more privacy-invading — and expensive — alternatives, like surveillance cameras and facial recognition.
But when the pandemic hit, most of those stores closed — as effectively did entire cities and nations — to counter the ongoing threat from of COVID-19. But those stores would have to open again, and so Butlr got back to work.
Butlr’s privacy-friendly body heat sensors don’t know who you are — only where you are. Now the company is retooling its technology to help combat coronavirus. (Image: Butlr)
Butlr’s co-founder Honghao Deng told TechCrunch that it began retooling its technology to help support stores opening again.
The company quickly rolled out new software features — like maximum occupancy and queue management — to help stores with sensors already installed cope with the new but ever-changing laws and guidance that businesses had to comply with.
Deng said that the sensors can make sure no more than the allowed number of people can be in a store at once, and make sure that staff are protected from customers by helping to enforce social distancing rules. Customers can also see live queue data to help them pick a less-crowded time to shop, said Deng.
All these things before a pandemic might have sounded, frankly, a little dull. Fast-forward to the middle of a pandemic and you’re probably thankful for all the help — and the technology — you can get.
Butlr tested its new features in China at the height of the pandemic’s rise in February, and later rolled out to its global customers, including in the United States. Deng said Butlr’s technology is already helping customers at furniture store Steelcase, supermarket chain 99 Ranch Market and the Louvre Museum in Abu Dhabi to help them reopen while minimizing the risk to others.
It’s a pivot that’s paid off. Last month Butlr raised $1.2 million in seed funding, just as the pandemic was reaching its peak in the United States.
Nobody knew a pandemic was coming, not least Deng. And as the pandemic spread, businesses have suffered. If it wasn’t for quick thinking, Butlr might’ve been another startup that succumbed to the pandemic.
Instead, the startup is probably going to help save lives — and without compromising anyone’s privacy.
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Higher Steaks brings home the bacon, revealing lab-grown pork belly and bacon strips
In what could be a starting gun for the commercialization of the cell-based meat business, upstart cultivated meat company Higher Steaks said it has managed to produce samples of its first products — bacon strips and pork belly made in a lab from cellular material.
With the revelation, Higher Steaks, a bootstrapped Cambridge, U.K.-based company, leapfrogs into a competitive position with a number of far larger companies that have raised far more capital.
“There’s still a lot of work until it’s commercial,” said Higher Steaks chief executive Benjamina Bollag, “but the revelation of a pork belly product that’s made from 50% cultivated cells and a bacon product which contains 70% meat grown from a cell material in a laboratory is something of a milestone for the industry.”
The remaining ingredients in Higher Steaks bacon and pork belly are a mixture of plant base, proteins, fats and starches to bind the cellular material together. To achieve this first step on its road to commercialization, Higher Steaks tapped the expertise of an undisclosed chef to formulate the meat into an approximation of the pork belly and bacon.
Higher Steaks head of research and development, Ruth Helen Faram (left) and chief executive Benjamina Bollag (right) Image Credits: Higher Steaks (opens in a new window)
At this stage, the pilot was more to show what Higher Steaks can do rather than what the company will do, said Bollag.
“In the future it will be scaffolding,” said Bollag. “It’s more showing what our meat can do and what we’re working on. In the future it will be with scaffolding.”
A number of companies, including Tantti Laboratories, Matrix Meats and Prellis Biologics, make the kind of biomaterial nano-scale scaffolding that could be used as a frame on which to grow structures equivalent to the fibrous textures of muscle.
The commercial viability of products from companies like Higher Steaks, Memphis Meats, Aleph Farms, Meatable, Integriculture, Mosa Meat and Supermeat depends on more than just companies like Tantti and Matrix, but also on the ability of Thermo Fisher, Future Fields and Merck to bring down the cost of the cell cultures that are required to grow the animal cells.
In all, some 30 cell-based meat startups have launched globally since 2014, and they’re all looking for a slice of the $1.4 trillion meat market.
Meanwhile, demand for pork continues to rise even as supplies have been decimated by an outbreak of African Swine Fever that could have killed as much as 40% of China’s population of pigs in 2019.
“Our mission is to provide meat that is healthy and sustainable without the consumer making any sacrifices on taste,” said Bollag in a statement. “The production of the first ever cultivated bacon and pork belly is proof that new techniques can help meet overwhelming demand for pork products globally.”
Given the highly capitalized competitors that Higher Steaks faces off against, the company is looking for industry partners to help commercialize its technology.
To improve its competitive position, Higher Steaks recently hired Dr. James Clark, the former chief technology officer of PredictImmune.
“I was always quite intrigued by cultured meat production, a mix of both science and food production. In 2013 I watched the first cultured meat burger from Mark Post costing £250,000, cooked on the BBC,” said Clark. “I was approached about joining Higher Steaks earlier this year and was attracted to joining primarily by the science along with the ambition and energy of the Higher Steaks founder Benjamina Bollag . I believe Higher Steaks is a company with a technology to be disruptive in the cultured meat area and at my career stage I was looking for a challenge.”
Brought in to scale the cultivated meat process at Higher Steaks, Clark has led the development of biotech and pharma products at early-stage and publicly traded companies.
“The addition of Dr. James Clark to the team gives Higher Steaks a significant advantage,” said Dr. Ruth Helen Faram, head of R&D. “Cultivated pork belly and bacon have never been demonstrated before and Higher Steaks is the first to develop a prototype containing over 70% cultivated pork muscle, without the use of bovine serum.”
Consumers shouldn’t expect to see Higher Steaks’ pork belly on store shelves or in restaurants anytime soon, Bollag cautioned. “We’re still in the thousands of pounds per kilogram.”
The company does expect to have a larger tasting event later this year.
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US beat China on App Store downloads for first time since 2014, due to coronavirus impact
The U.S. App Store’s downloads have surpassed China’s downloads for the first time since 2014. According to data from Sensor Tower’s Q2 2020 report, out today, the U.S. App Store saw 27.4% year-over-year growth in the quarter, compared to the 2.1% growth for the China App Store. During the quarter, the U.S. App Store generated 2.22 billion new installs compared with China’s 2.06 billion downloads, to regain the top position. This then translated to the U.S. beating China on App Store consumer spend, as well.
Contributing to the shift was the impact of the coronavirus pandemic on both China and the U.S.
The U.S. surpassed China on installs beginning in April and lasting all the way through June, the firm found.
China in Q2, meanwhile, was coming down from its own abnormally high number of downloads in March and April, due to COVID-19. But as its download figures began to normalize, the pandemic was wreaking havoc in the U.S., where it hit slightly later.
This led to the U.S. to see a surge in downloads, as suddenly the population was forced to work from home, attend school from home and entertain themselves at home with apps, games and streaming services.
Image Credits: Sensor Tower
Sensor Tower tells TechCrunch there was particularly significant growth in U.S. business and education apps in Q2, as a result. These categories were the largest contributors to the U.S. surpassing China’s installs.
Business app downloads grew 133.3% in Q2, followed by education (84.4%), health & fitness (57.7%), news 44.9%) and social networking (42.4%).
Image Credits: Sensor Tower
Video conferencing app Zoom, in particular, had a breakout quarter and even shattered the record for App Store installs, with nearly 94 million total downloads in a single quarter. The prior record had been set by TikTok, which had in Q1 2020 seen 67 million downloads in a single quarter. No other non-game app has ever surpassed 50 million installs in a quarter, Sensor Tower noted.
TikTok still had a strong Q2, with nearly 71 million App Store downloads in the quarter, representing 154% year-over-year growth. Its top two download markets were both the U.S. and China — the latter where it’s known as Douyin.
Image Credits: Sensor Tower
Mobile gaming was also a big hit in the U.S., as people stayed home under government lockdowns. Top mobile games by App Store downloads included titles like Save The Girl, Roblox, Go Knots 3D, Coin Master, Tangle Master 3D, Fishdom, ASMR Slicing, Call of Duty: Mobile and others.
On this front, Roblox had a stellar quarter as kids stayed at home and went online gaming, due to being disconnected from school and their playmates in real life. Roblox’s gaming app shot up the U.S. rankings from No. 11 in Q1 2020 to No. 2 in Q2, and achieved a new high of 8.6 million downloads in the quarter.
Rollic Games had two hits in the quarter, Go Knots 3D and Tangle Master 3D, each with over 5 million App Store downloads. Its Repair Master 3D title also came in at No. 20.
Both Zoom and Rollic Games were the only new top publishers to find themselves in the top 10 on the App Store in Q2, the report found.
Image Credits: Sensor Tower
Though the U.S. surpassed China in the quarter for the first time in years, the rest of the top five — Japan, Great Britain and Russia — remained the same as last quarter, though growing on a year-over-year basis.
Related to the surge of new downloads, the U.S. also surpassed China on consumer spending on the App Store for the first time since Q4 2018 — but that was only by 1.6% (around $53 million). In Q2 2020, the U.S. surpassed China by 14%, or about $717 million.
The U.S. also saw more significant quarter-over-quarter growth in spending during the COVID-19 outbreak, growing 20% between Q1 and Q2. In China, the consumer spending growth on the App Store was just 5% between Q4 2019 and Q1 2020, when it felt the full impact of the virus.
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