coronavirus

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Wondering if venture capital is open for business? A new initiative has investors saying yes

A new initiative from a Los Angeles investor is taking stock of venture firms and their ability to commit capital in an effort to match firms that are still open for business and cutting checks to startups that are fundraising in the age of COVID-19.

Laurent Grill, one of the investors at Luma Launch (which is the corporate investment arm of the film studio Luma Pictures), has been working in the Los Angeles venture community building and backing startups for about a decade. Over that time, Grill has put together a fairly impressive Rolodex, and in these times of uncertainty, he’s putting that Rolodex to work.

Most startups are buckling in for a bumpy few months and making tough decisions about when, where and how to get the cash they need to keep their businesses going. While there have been a number of statements on Twitter from various investors about how they’re doing deals and are open for business, Grill is making sure the community can be coordinated so companies know where to turn and investors can find businesses to back in an age of Zoom diligence.

He issued a call on LinkedIn, Twitter and seemingly every other platform requesting that investors who are still cutting checks in the time of the coronavirus sign up (privately) to a list that Grill is managing. There’s also a list for startups that are looking for cash.

We have had an OVERWHELMING response from founders/investors coming together to work to get through this. If you are a company raising or investor investing, please go to this link to submit your information. PLEASE RT to spread the word. https://t.co/u6CRt9Ry5J

— Laurent Grill (@laurentgrill) March 18, 2020

The matchmaking service is designed to save time and energy for entrepreneurs and investors who have to worry about keeping the lights on.

So far, Grill has racked up responses from a lot of the roughly 400 investors to whom he’s sent an email for the initial list he’s putting together.

Luma Launch, as Grill is the first to admit, won’t be among the investors looking at new deals in the near term. As a corporate venture arm, the firm has to manage the portfolio of investments that are already on its balance sheet. That’s a strong list of companies, including The Wave, Community, Lensabl and others that are well-situated to make it through the crisis, but corporate venture is often constrained as their parent companies look internally and new investments aren’t on the short-term horizon.

However, the network that Grill has amassed (although he’s loath to talk about it) includes a number of top investors at some of the largest funds, and they’re all privately telling him that they’re open for business.

Even if Grill isn’t investing, he still wants Luma Launch to play the role in the community that he hoped it always would. “Luma Launch can be that support mechanism that we have been trying to be since day one,” says Grill. “If we can help support entrepreneurs both here in LA and around the country to connect with relevant investors, then we’re all going to be better in the long run.”

In times of uncertainty, it’s best to have a clear and honest understanding of what’s happening in the market, not just performative assurances, says Grill.

“I want to create an ecosystem where everyone can recognize that people are trying to be active,” he says. That’s when I made the public post… I think someone needs to step up and open this up to the general community and the tech community as a whole to help decipher the noise.”

That said, the matchmaking service that Grill hopes to build won’t be open to every company, just the companies that have already raised at least a seed round of funding. For entrepreneurs just getting their businesses off the ground, Grill advises that they focus on building their product and customer base before tapping venture investment.

For established businesses that need additional support, the door remains open. “If you have the capability of helping someone, you have the responsibility to help someone,” Grill says.

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Remote Year, which helps you work while traveling the world, lays off 50% of staff

Remote Year wants to help people travel around the world and keep their job while doing so. The Chicago startup relies on the idea that “great work can be done anywhere.” And to prove it, it brings people to 12 cities in 12 months, all while they’re working full-time jobs. Think co-working spaces in Ljubljana, code from bungalows in Thailand and workshops from rooftops in Istanbul.

Needless to say, Remote Year’s core business relies on wanderlust, disposable income and the ability to travel. 

Citing the COVID-19 pandemic, founder Greg Caplan told TechCrunch that Remote Year has laid off 50% of its staff. The layoff impacted roughly 50 roles on the sales, marketing and product side, and comes less than six months after the company raised a $5 million capital investment from LightBank, which brought its total funding to $17 million, according to Crunchbase data

“The borders sort of froze up with the virus and a lot of our folks decided not to travel and go home,” Caplan told TechCrunch. “Half of our revenue dried off in a couple of days, and there’s no end in sight when this situation may change.”

The startup says it still has runway from its last capital investment. Layoffs are expected to more largely hit the tech travel industry due to the global pandemic and people staying inside. Earlier this week, travel savings startup Service shut down operations, citing the pandemic and economic downturn. 

Remote Year charges between $2,000 and $3,000 a month for its travel programs per person. This includes travel to and between destinations, private rooms and activities. Caplan said that Remote Year staff has always been a distributed team, and by nature of industry, it was “monitoring” COVID-19 for over a month before the onslaught of cancellations and news.

“But monitoring it and talking about it was very different [from] what has unfolded in the last seven days,” Caplan said. 

To help the employees that were laid off, Caplan looked inward. Remote Year has always had a three-person team that connects people to remote jobs. That team will be helping its former colleagues through 1:1 coaching, resume interviews, interview preparation and contract negotiations. He urges other founders to do whatever they can to “humanize this” global pandemic, and reach out if needed. 

“We’ve actually heard from a couple other companies that want our help finding remote jobs for employees,” Caplan said. “We’re not sure what that means for our business, but we’re going to think about how we can help.”

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Startups rethink what it means to be high-touch during a pandemic

Glossier NYC, in normal times, is typically visited by more than 2,000 people every day, with lines of people from all over the world curling out the door. And when you enter, it’s tempting to touch, well, everything.

The walls are adorned with flowers, mirrors and giant versions of the makeup company’s flagship product: Boy Brow. Makeup is sold on communal tables, where customers are encouraged to try products. Emily Weiss, the founder of the unicorn startup, calls customer meetups as she sees them: community events.

And, of course, in the store, there are also a few sinks to wash off your makeup (and your hands).

The challenge of running a startup that has a high physical component has become one of the big themes in the world of tech in the last several weeks. Indeed, as companies like Google, Facebook and Zoom do their parts to help people stay connected during the novel coronavirus pandemic, and research for cures, another story has taken shape in a different area of the tech world: startups and larger tech companies with “high touch” models — not just based on customer relationships but literally business models with strong physical components — are facing a world of challenges at a time when people are being asked to stay indoors, and stay away from each other.

To stave off cash shortages and closures, businesses are taking a variety of approaches, and rethinking how they run their businesses, to keep going. In some countries, governments are stepping in to keep businesses from collapsing, while some startups are hoping that their investors will continue to support them as the pandemic continues to spread.

In other cases, startups are quietly coming together to compare notes on how best to tackle legal and other hurdles in an unprecedented environment. (So quietly, in fact, that they didn’t want to talk about this on the record.) When is the right time to talk to insurance companies? How do you negotiate with them and will you ever get anything out of those discussions? What recourse does a company have for forfeiting some payments that are coming due? How do you handle headcount if you lack the liquidity to survive a big dip in your business? What are the best practices for running a business in a reduced or altered form?

“This has been the most difficult five continuous days in all of my team’s careers,” Vibhu Norby, the CEO and founder of b8ta — a chain of retail stores that act as a marketplace between consumers and lots of different hardware and other companies, letting potential buyers try out products before buying — said in an interview. “We don’t have any other business other than our physical one, that’s all we do. But we have an amazing team and there are things that we’re doing that are useful, but there is no playbook for this.”

It’s not all doom and gloom. With people home-bound and spending a significantly higher amount of time online, tech companies that innately support social distancing are getting a huge boost in purchasing. Think in particular e-commerce delivery services such as online grocers, and Amazon. Some are finding that they’ve had to curtail services to be able to meet demand. Others like streaming services are seeing giant spikes in their traffic.

(Haven’t) been there, (haven’t) done that

The trajectory of impact on startups has been a wide one, starting earliest with major events. Conferences and expositions have become something of a cornerstone of how startups come together and do business in a global economy. While we clearly have tech hubs where face-to-face contact is as easy as grabbing a coffee, events become a place where you can catch people from many other corners, or even those who don’t regularly come out of the woodwork.

All of that has changed this year, with just about every major confab this year (so far) getting cancelled. CES, at the beginning of January, just made it through; RSA surprisingly went ahead last month. But many events have been taken off the table: MWC in Barcelona, SXSW in Austin, events from Google, Apple, Facebook and Amazon, E3, GDC and so many more.

People love to complain about how conferences and expositions are a noisy mess, but the fact of the matter remains that they have no rival when it comes to meeting people and doing deals at scale.

The events themselves are tech businesses in their own right, marketplaces that generate billions of dollars in revenues, and connecting hundreds of thousands people for potential B2B sales. “This is going to impact our business for sure,” one exec at a startup (who didn’t want to be named) told TechCrunch when the huge mobile confab in Barcelona was cancelled over coronavirus fears. “MWC is a major event for us…the largest source of qualified sales leads on our calendar. No other event comes close.”

If events businesses were the first wave of “high touch” tech outfits to be impacted by coronavirus, following closely behind has been the transportation and tourism industries — connected to the events business but also far exceeding it in scope.

People have chosen, been requested and sometimes been forced, to stop moving around in an attempt to mitigate the spread of the virus — creating a significant knock-on effect not just for transportation companies, but also the wider tourism industry, “The biggest nuclear winter in online travel,” as one founder put it last week. As people increasingly stay put, Airbnb this week extended its own extenuating circumstances refund policy so that people can rebook already reserved stays that were supposed to happen in the next month.

Transportation, of course, hasn’t only seen restriction for long-distance travel, or even for the carriage of just humans. Uber and Lyft have both cut back on rides, specifically shared, carpool-style services, in an attempt to “flatten the curve” to reduce the frequency of new cases brought on by too much contact, and food delivery services have introduced “contactless” delivery to minimise contact with customers, especially with those who might be infected and are quarantining at home.

“The health and wellbeing of our couriers and customers is our top priority and we think these practices will help give some peace-of-mind to our fleet, while also decreasing the interaction and contact between both parties,” a spokesman for Glovo, a European delivery startup, said last week when the measures were introduced.

But the impact extends beyond obvious sectors like transportation and tourism. Take makeup, for instance.

While Glossier does a majority of its sales online, it temporarily closed its retail locations last week to limit customer interactions. In some ways makeup is innately an industry that requires you (or someone else) to touch your face. Glossier is brainstorming ways to stay in contact with customers, such as FaceTime consultations and Slack groups.

Per Glossier, it hasn’t yet received questions from customers on how to handle the aspect of makeup application in a time when we are told to not touch our faces. It is, however, telling people to wash their hands.

There’s also Revel, which is a marketplace for women over 50 to host and attend small gatherings and stay connected. Given the age group and social aspect of the company, Revel has cancelled all in-person Revel events through at least the end of March.

“The decision to cancel in-person events has an immediate business impact for us,” the co-founders wrote in an email to TechCrunch.

Revel is working on a speaker series over Zoom, virtual walks where members can be connected via FaceTime or audio to go on walks together, and happy hours. The list goes on with book clubs and writing groups.

Similarly, London startup Jolt built a business around a concept of “pay-monthly” business classes that had a strong in-person component: not only was the idea to learn in a physical classroom, but those involved got opportunities to network with other students before and after courses, participate in breakout sessions, work in partner groups with other students and access presentations.

Now with those in-person classes on hold, Jolt has moved up the launch of “Jolt Remote,” an online version that it had previously planned to ship in 2021, which aims to preserve all the dynamics of the startup’s previous, offline efforts. “The company felt it necessary to expedite its rollout in order to keep their students safe, and to reduce the need for their education to be disrupted in the wake of COVID-19,” a spokesperson said.

Jolt‘s teachers will continue to work as they always did, she continued. But instead of their students meeting up in Jolt campuses, they’ll now be able to access the courses virtually.

While Revel’s shifts are likely to have an impact on its bottom line, they said, it was the right decision. Few startups and investors have even started to point at the new innovation that will come out of this pandemic as a bittersweet externality.

Revel, while it only operates in the Bay Area, has more than 200 members from geographies as far as South Africa. They’re planning to join the upcoming virtual gatherings.

The founders say it is helping Revel to build virtual capabilities that they will be able to use in the future when geographic distance, illness or other factors isolate members who need connection.

It’s helping an in-person company think what it means to be in-person.

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Conan O’Brien will return to TV with shows shot on iPhone and over video chat

Apple’s promise of high-quality videoshot on iPhone” is getting another real-world stress test, as late-night TV host Conan O’Brien announced on Wednesday he will return to doing full shows that will be shot using Apple’s mobile device. On Monday, March 30, new episodes of O’Brien’s show “Conan” will air on TBS, with production staff working from home, video that’s shot on iPhone and interviews filmed over video chat.

The news was first reported by Variety and confirmed by O’Brien in the form of a tweet, where he jokes the experience “will not be pretty.”

I am going back on the air Monday, March 30th. All my staff will work from home, I will shoot at home using an iPhone, and my guests will Skype. This will not be pretty, but feel free to laugh at our attempt. Stay safe.

— Conan O’Brien (@ConanOBrien) March 19, 2020

The move to shoot shows remotely is an interesting attempt at restarting daily TV production at a time when everyone’s been ordered to work from home.

Typically, late-night shows are put on with a sizable crew of writers and producers and filmed in front of a live audience. With the CDC advising people to stay at home and gather in groups of no more than 10 due to the threat of the coronavirus outbreak, TV production industry-wide is being shut down.

Until now, that also included all major late-night productions, like Stephen Colbert, Jimmy Fallon, Jimmy Kimmel and James Corden .

O’Brien’s team consists of 75 people and, like others, it went on hiatus in order to protect staff safety. But during the shut down, O’Brien continued to film short videos, which led the team to this idea of doing a full show, but in a different format.

“Conan” isn’t the only show trying to work around the shutdown. Jimmy Fallon has been filming YouTube videos that are incorporated into the evening’s rerun of the “Tonight Show.” Colbert has been filming a new monologue for “The Late Show” reruns. And Kimmel has been sharing his own “#minilogue” on social media.

However, “Conan” is promising full episodes, not just new segments.

“The quality of my work will not go down because technically that’s not possible,” O’Brien said in a statement shared by Variety.

Image credit: Kevin Mazur/Getty Images for WarnerMedia

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Israel passes emergency law to use mobile data for COVID-19 contact tracing

Israel has passed an emergency law to use mobile phone data for tracking people infected with COVID-19 including to identify and quarantine others they have come into contact with and may have infected.

The BBC reports that the emergency law was passed during an overnight sitting of the cabinet, bypassing parliamentary approval.

Israel also said it will step up testing substantially as part of its respond to the pandemic crisis.

In a statement posted to Facebook, prime minister Benjamin Netanyahu wrote: “We will dramatically increase the ability to locate and quarantine those who have been infected. Today, we started using digital technology to locate people who have been in contact with those stricken by the Corona. We will inform these people that they must go into quarantine for 14 days. These are expected to be large – even very large – numbers and we will announce this in the coming days. Going into quarantine will not be a recommendation but a requirement and we will enforce it without compromise. This is a critical step in slowing the spread of the epidemic.”

“I have instructed the Health Ministry to significantly increase the number of tests to 3,000 a day at least,” he added. “It is very likely that we will reach a higher figure, even up to 5,000 a day. To the best of my knowledge, relative to population, this is the highest number of tests in the world, even higher than South Korea. In South Korea, there are around 15,000 tests a day for a population five or six times larger than ours.”

On Monday an Israeli parliamentary subcommittee on intelligence and secret services discussed a government request to authorize Israel’s Shin Bet security service to assist in a national campaign to stop the spread of the novel coronavirus — but declined to vote on the request, arguing more time is needed to assess it.

Civil liberties campaigners have warned the move to monitor citizens’ movements sets a dangerous precedent.

Netanyahu’s announcement that he intends to bypass parliamentary oversight and implement emergency regulations that authorize the Shin Bet to locate Corona patients actualizes this danger.

— ACRI (@acri_online) March 16, 2020

According to WHO data, Israel had 200 confirmed cases of the coronavirus as of yesterday morning. Today the country’s health ministry reported cases had risen to 427.

Details of exactly how the tracking will work have not been released — but, per the BBC, the location data of people’s mobile devices will be collected from telcos by Israel’s domestic security agency and shared with health officials.

It also reports the health ministry will be involved in monitoring the location of infected people to ensure they are complying with quarantine rules — saying it can also send text messages to people who have come into contact with someone with COVID-19 to instruct them to self isolate.

In recent days Netanyahu has expressed frustration that Israel citizens have not been paying enough mind to calls to combat the spread of the virus via voluntary social distancing.

“This is not child’s play. This is not a vacation. This is a matter of life and death,” he wrote on Facebook. “There are many among you who still do not understand the magnitude of the danger. I see the crowds on the beaches, people having fun. They think this is a vacation.”

“According to the instructions that we issued yesterday, I ask you not leave your homes and stay inside as much as possible. At the moment, I say this as a recommendation. It is still not a directive but that can change,” he added.

Since the Israeli government’s intent behind the emergency mobile tracking powers is to combat the spread of COVID-19 by enabling state agencies to identify people whose movements need to be restricted to avoid them passing the virus to others, it seems likely law enforcement agencies will also be involved in enacting the measures.

That will mean citizens’ smartphones being not just a tool of mass surveillance but also a conduit for targeted containment — raising questions about the impact such intrusive measures might have on people’s willingness to carry mobile devices everywhere they go, even during a pandemic.

Yesterday the Wall Street Journal reported that the US government is considering similar location-tracking technology measures in a bid to check the spread of COVID-19 — with discussions ongoing between tech giants, startups and White House officials on measures that could be taken to monitor the disease.

Last week the UK government also held a meeting with tech companies to ask for their help in combating the coronavirus. Per Wired some tech firms offered to share data with the state to help with contact tracing — although, at the time, the government was not pursuing a strategy of mass restrictions on public movement. It has since shifted position.

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CO2-based vodka startup Air Co. fully redirects its tech to making hand sanitizer for donation

A NYC-based startup that developed technology that extracts carbon dioxide from the air and combines it with water to create vodka has redirected its entire production capacity toward producing hand sanitizer, every bottle of which will be donated through collaboration with NYC officials, and potentially to local restaurants who employ delivery personnel providing critical service as social distancing and isolation measures continue.

Air Co. launched its vodka just last year, using a process it developed (which has received awards from NASA and XPrize) that is actually net carbon-negative. It involves pulling around one pound of carbon dioxide from the air which is then combined with water and turned into pure ethanol using solar-based renewable energy. Ethanol also happens to be the key active ingredient in hand sanitizer, which is generally between 60% and 95% alcohol in its most effective iterations.

Air Co.’s CEO and co-founder Gregory Constantine told me via email that because the company was founded on the basis of fulfilling a mission of social good, the startup wanted to find some way to help with community efforts to counter the ongoing coronavirus pandemic. It naturally turned to producing hand sanitizer made up 70% ethanol, its technology’s primary output.

The company isn’t looking to cash in on the current (ill-advised) panic-buying trends, which see supplies of hand sanitizer sold out or dwindling across major retailers and Amazon . Instead, even though it’s now directing 100% of its production capacity to making hand sanitizer, it’s also donating all of the volume it produces.

While Constantine says that initially they’ve been producing smaller volumes than they’d like, and are looking at ramping production by shifting their methods, they’ve still managed to put out more than 1,000 50mL bottles, and will “continue to make 1,000 bottles per week and push supply as much as our technology allows us to.”

I asked Constantine how they’re figuring out who receives the hand sanitizer they’re donating, given the many possible parties who would appreciate this kind of charitable action.

“We’re going to be directly supplying all donations at the advice of the city,” he said. “We are also looking to work with local restaurants to have them provide food delivery drivers with our sanitizer given that bars and restaurants have had to shut their doors to patrons, leaving delivery services at the forefront of food services here in New York City.”

Given that they have shifted production away from their revenue-generating business for this effort, I also asked Constantine how long they plan to keep this up. Despite uncertainty about how long the need will exist, he said, they’re going to try to continue producing the sanitizer “for as long as [they] can.”

“We have shifted our production and are running on a very limited team to ensure that we are not furthering the spread of the virus in our efforts,” he added. “Every small piece of help from any person or business goes a long way in a time of need like this, and we plan to help however we can.”

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What we’re getting right and wrong about coronavirus and VC investing

It has only been nine days since I wrote an overview of the state of VC investing during the rise of the novel coronavirus pandemic.

And what a week it has been: The markets have triggered circuit breakers for an unprecedented third time, a global economic depression seems in the offing and the Trump administration is now proposing upwards of $1 trillion in fiscal stimulus on top of the Fed’s hundreds of billions of dollars in quantitative easing.

My God, there is so much news.

Given how much has changed in just the past few days, I wanted to revisit my original advice and go over what is still true, what has turned out to be wrong and what is trending one way or the other as events unfold.

Let’s get started.

As I have said ad nauseam this year, VCs are in a hyper-competitive market like we have never seen before. There are more VCs, VC firms and VC dollars in more geos worldwide prowling for the next startup than ever.

The coronavirus outbreak has not changed this basic thesis in the market.

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Android app reviews may slow to over a week due to COVID-19 impacts, Google warns developers

Google this week warned Android developers that Play Store app review times will be much longer than normal due to the impacts of the COVID-19 crisis. Developers should expect app reviews to take up to a week or even longer, the company informed its community by way of an alert on the Google Play Console.

This slowdown in moderation efforts isn’t something that’s just impacting Google Play.

Yesterday, YouTube announced it would more heavily rely on its automated systems during this time, which meant more videos will likely be taken down by machine learning-powered systems before they received a review from a human moderator.

In both cases, the slowdowns are related to the reduced in-office staffing levels — a result of the COVID-19 pandemic, which is impacting employee scheduling at Google and elsewhere.

Up until now, Google Play had a fairly quick app review process.

For years, the company differentiated its Play Store from Apple’s App Store by allowing developers to publish without a lengthy review. This, of course, led to issues as the store was over-filled with low-quality and sometimes even malicious apps. In 2015, Google revealed it had begun to utilize an internal team of reviewers to analyze apps for policy violations prior to publication.

Despite the change in process, apps were being approved within hours instead of days, Google said at the time.

That changed last year, however, as the company implemented a more stringent review. It then began to advise developers to plan for review times of at least three days between submission and the app going live. But the length was reduced for established, trusted developers who continued to see faster reviews, Google had noted.

Review times of a week or even longer are unprecedented, much like the COVID-19 crisis itself.

News of the increased app reviews was first reported by Android Police.

A Google spokesperson confirmed the delay to TechCrunch, saying: “Due to adjusted work schedules at this time, we are currently experiencing longer than usual review times. While the situation is currently evolving, app review times may fluctuate, and may take 7 days or longer.”

The delay is also confirmed in the Play Console’s Help documentation.

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Have hundreds of unicorns missed their exit window as Q1 IPOs grind to a halt?

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

As investors struggle to price the stock market as economic and political news continues to break, the private market is entering a rough period. It seems increasingly likely that the period of disruption due to COVID-19 will persist for months, if not quarters. That means missed Q1 and Q2 revenue growth, bookings, and the like from startups domestically and around the world.

And that’s the bullish case. For some cohorts of startups, the outlook is even worse. Think about travel startups, ride-hailing upstarts, and any grouping of private companies that pursued a high-burn, high-growth model; that final category is about to run into the twin issues of the inflexibility of cost structure and the impact of slowing sales. That alone would make fundraising more difficult; toss in a deflating stock market and possible recession, and the mixture is a downright mess.

But we owe it to ourselves to survey what is going on in an attempt to answer our own questions about IPOs, exits, unicorn tallies, and who might be in trouble. Unlike when things were less bad, there will be no laughing this morning and no jokes. Just notes on what’s going wrong and what it might mean for private companies.

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Nintendo’s online Switch services are experiencing an outage when we need them most

The era of social distancing is going to put a lot of existing systems to the test. Nintendo’s online services for the Switch have been experiencing outages in the U.S. and parts of Europe. The company noted the issues on social media, adding that it’s “looking to rectify the situation as soon as possible.”

The official Network Maintenance Information page noted that it is currently “Unable to connect to the network service.”

Surely not the most dire of situations, though many are no doubt relying on such services to help pass the time, as more and more cities enact bans on gatherings and closures of schools and restaurants to encourage social distance in order to curb COVID-19’s spread. Microsoft’s Xbox Live also experienced a multiple-hour outage over the weekend.

Nintendo is currently readying the system for the release of Animal Crossing: New Horizons. The latest entry in the series looks perfectly positioned to help eat away some hours when it’s released March 20. 

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