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DroneBase nabs $7.5 million in a slight down round to double down on its work in renewable energy
DroneBase, a Los Angeles-based provider of drone pilots for industrial services companies, has raised $7.5 million during the pandemic to double down on its work with renewable energy companies.
While chief executive Dan Burton acknowledged that the company was fundraising prior to the pandemic, the industrial lockdown actually accelerated demand for the company’s services.
Even with the increased demand, the company had to make some changes. It laid off six employees and refocused its business.
“In the past three months it’s become clear that this is a moment for drones as an industry,” Burton said. “We were really pushing hard as a company, certainly on revenue growth and harvesting all the investments we made in technology and having a clear, near-term view to profitability.”
The new round, which closed in May, was a slight down round, according to people familiar with the company’s business.
“We see raising a growth round later this year,” Burton said.
New investors in the company included Valor Equity Partners and Razi Ventures, who joined Union Square Ventures, Upfront Ventures, Hearst Ventures, Pritzker Group Venture Capital and DJI.
In all, DroneBase has raised nearly $32 million in financing, according to a company statement.
The new round will enable the company to focus on its data and analytics services that it has been developing around its core drone pilot provisioning technology — and gives DroneBase more financial wherewithal to expand its European operations under DroneBase Europe, which operates out of Germany.
“DroneBase’s expansion into renewable energy reflects our belief in the growth potential of wind and solar energy industries,” said Burton in a statement. “Since many energy companies have both wind and solar assets, we are well positioned to leverage our DroneBase Insights platform to grow our global market share in renewable energy.”
The key application for DroneBase has been allowing wind power companies to monitor and manage their turbines, improving uptimes and spotting problems before they effect operations, the company said.
For solar power companies, DroneBase offers a network of pilots trained in infrared imaging to detect anomalies like defects or hot spots on solar panels, the company said.
“DroneBase has established themselves as the drone leader in the commercial market, and its new work in renewables will have a lasting impact on the future of energy by keeping infrastructure operational for generations,” says Sam Teller, partner at Valor Equity Partners, in a statement. “We believe DroneBase will continue to be a valuable partner in drone operations and data analysis across a multitude of industries globally.”
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UK’s NHS COVID-19 app lacks robust legal safeguards against data misuse, warns committee
A UK parliamentary committee that focuses on human rights issues has called for primary legislation to be put in place to ensure that legal protections wrap around the national coronavirus contact tracing app.
The app, called NHS COVID-19, is being fast tracked for public use — with a test ongoing this week in the Isle of Wight. It’s set to use Bluetooth Low Energy signals to log social interactions between users to try to automate some contacts tracing based on an algorithmic assessment of users’ infection risk.
The NHSX has said the app could be ready for launch within a matter of weeks but the committee says key choices related to the system architecture create huge risks for people’s rights that demand the safeguard of primary legislation.
“Assurances from Ministers about privacy are not enough. The Government has given assurances about protection of privacy so they should have no objection to those assurances being enshrined in law,” said committee chair, Harriet Harman MP, in a statement.
“The contact tracing app involves unprecedented data gathering. There must be robust legal protection for individuals about what that data will be used for, who will have access to it and how it will be safeguarded from hacking.
“Parliament was able quickly to agree to give the Government sweeping powers. It is perfectly possible for parliament to do the same for legislation to protect privacy.”
The NHSX, a digital arm of the country’s National Health Service, is in the process of testing the app — which it’s said could be launched nationally within a few weeks.
The government has opted for a system design that will centralize large amounts of social graph data when users experiencing COVID-19 symptoms (or who have had a formal diagnosis) choose to upload their proximity logs.
Earlier this week we reported on one of the committee hearings — when it took testimony from NHSX CEO Matthew Gould and the UK’s information commissioner, Elizabeth Denham, among other witnesses.
Warning now over a lack of parliamentary scrutiny — around what it describes as an unprecedented expansion of state surveillance — the committee report calls for primary legislation to ensure “necessary legal clarity and certainty as to how data gathered could be used, stored and disposed of”.
The committee also wants to see an independent body set up to carry out oversight monitoring and guard against ‘mission creep’ — a concern that’s also been raised by a number of UK privacy and security experts in an open letter late last month.
“A Digital Contact Tracing Human Rights Commissioner should be responsible for oversight and they should be able to deal with complaints from the Public and report to Parliament,” the committee suggests.
Prior to publishing its report, the committee wrote to health minister Matt Hancock, raising a full spectrum of concerns — receiving a letter in response.
In this letter, dated May 4, Hancock told it: “We do not consider that legislation is necessary in order to build and deliver the contact tracing app. It is consistent with the powers of, and duties imposed on, the Secretary of State at a time of national crisis in the interests of protecting public health.”
The committee’s view is Hancock’s ‘letter of assurance’ is not enough given the huge risks attached to the state tracking citizens’ social graph data.
“The current data protection framework is contained in a number of different documents and it is nearly impossible for the public to understand what it means for their data which may be collected by the digital contact tracing system. Government’s assurances around data protection and privacy standards will not carry any weight unless the Government is prepared to enshrine these assurances in legislation,” it writes in the report, calling for a bill that it says myst include include a number of “provisions and protections”.
Among the protections the committee is calling for are limits on who has access to data and for what purpose.
“Data held centrally may not be accessed or processed without specific statutory authorisation, for the purpose of combatting Covid-19 and provided adequate security protections are in place for any systems on which this data may be processed,” it urges.
It also wants legal protections against data reconstruction — by different pieces of data being combined “to reconstruct information about an individual”.
The report takes a very strong line — warning that no app should be released without “strong protections and guarantees” on “efficacy and proportionality”.
“Without clear efficacy and benefits of the app, the level of data being collected will be not be justifiable and it will therefore fall foul of data protection law and human rights protections,” says the committee.
The report also calls for regular reviews of the app — looking at efficacy; data safety; and “how privacy is being protected in the use of any such data”.
It also makes a blanket call for transparency, with the committee writing that the government and health authorities “must at all times be transparent about how the app, and data collected through it, is being used”.
A lack of transparency around the project was another of the concerns raised by the 177 academics who signed the open letter last month.
The government has committed to publishing data protection impact assessments for the app. But the ICO’s Denham still hadn’t had sight of this document as of this Monday.
Another call by the committee is for a time-limit to be attached to any data gathered by or generated via the app. “Any digital contact tracing (and data associated with it) must be permanently deleted when no longer required and in any event may not be kept beyond the duration of the public health emergency,” it writes.
We’ve reached out to the Department of Health and NHSX for comment on the human rights committee’s report.
Let’s go through Matt Hancock’s letter to @HarrietHarman @HumanRightsCtte on the NHSX app and take a closer look at some of these statements 1/ https://t.co/sQe2U8wkiy
— Michael Veale (@mikarv) May 7, 2020
There’s another element to this fast moving story: Yesterday the Financial Times reported that the NHSX has inked a new contract with an IT supplier which suggests it might be looking to change the app architecture — moving away from a centralized database to a decentralized system for contacts tracing. Although NHSX has not confirmed any such switch at this point.
Some other countries have reversed course in their choice of app architecture after running into technical challenges related to Bluetooth. The need to ensure public trust in the system was also cited by Germany for switching to a decentralized model.
The human rights committee report highlights a specific app efficacy issue of relevance to the UK, which it points out is also linked to these system architecture choices, noting that: “The Republic of Ireland has elected to use a decentralised app and if a centralised app is in use in Northern Ireland, there are risks that the two systems will not be interoperable which would be most unfortunate.”
Professor Lilian Edwards, a legal expert from Newcastle University, who has co-authored a draft bill proposing a set of safeguards for coronavirus apps (much of which was subsequently taken up by Australia for a legal instrument that wraps public health contact info during the coronavirus crisis) — and who also now sits as an independent advisor on an ethics committee that’s been set up for the NHSX app — welcomed the committee report.
Speaking in a personal capacity she told TechCrunch: “My team and I welcome this.”
But she flagged a couple of omissions in the report. “They have left out two of the recommendations from my bill — one of which, I totally expected; that there be no compulsion to carry a phone. Because they will just be assumed within our legal system but I don’t think it would have hurt to have said it. But ok.
“The second point — which is important — is the point about there not being compulsion to install the app or to display it. And there not being, therefore, discrimination against you if you don’t. Like not being allowed to go to your workplace is an obvious example. Or not being allowed to go to a football game when they reopen. And that’s the key point where the struggle is.”
The conflict, says Edwards, is on the one hand you could argue what’s the point of doing digital contact tracing at all if you can’t make sure people are able to receive notifications that they might be a contact. But — on the other — if you allow compulsion that then “leaves it open to be very discriminatory” — meaning people could abuse the requirement to target and exclude others from a workplace, for example.
“There are people who’ve got perfectly valid reasons to not want to have this on their phone,” Edwards added. “Particularly if it’s centralized rather than decentralized.”
She also noted that the first version of her draft coronavirus safeguards bill had allowed compulsion re: having the app on the phone but required it to be balanced by a proportionality analysis — meaning any such compulsion must be “proportionate to a legitimate aim”.
But after Australia opted for zero compulsion in its legal instrument she said she and her team decided to revise their bill to also strike out the provision entirely.
Edwards suggested the human rights committee may not have included this particular provision in their recommendations because parliamentary committees are only able to comment on evidence they receive during an inquiry. “So I don’t think it would have been in their remit to recommend on that,” she noted, adding: “It isn’t actually an indication that they’re not interested in these concepts; it’s just procedure I think.”
She also highlighted the issues of so-called ‘immunity passports’ — something the government has reportedly been in discussions with startups about building as part of its digital coronavirus response, but which the committee report also does not touch on.
However, without full clarity on the government’s evolving plans for its digital coronavirus response, and with, inevitably, a high degree of change and flux amid a public health emergency situation, it’s clearly difficult for committees to interrogate so many fast moving pieces.
“The select committees have actually done really, really well,” added Edwards. “But it just shows how the ground has shifted so much in a week.”
This report was updated with additional comment
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KlearNow raises $16 million to bring customs clearance industry into the digital age
Customs is the sieve of international supply chains. And yet despite its critical role, clearing customs for freight brokers can be a slow and opaque process reliant on manual data entry and prone to errors.
Silicon Valley-based KlearNow has developed a platform that aims to bring customs clearance into the digital age. Now, with $16 million new funding, KlearNow aims to expand its geographic reach and improve its product to cover increasingly complex export-import verticals and time-sensitive shipments.
The company has certification to handle any import into the U.S., no matter what the commodity is. KlearNow is close to getting certified in Canada and the U.K., and plans to expand to Netherlands, Belgium, Spain and Germany. KlearNow has about two dozen customers.
The Series A funding round was led by GreatPoint Ventures, with additional participation from Autotech Ventures, Argean Capital and Monta Vista Capital . Ashok Krishnamurthi, managing partner at GreatPoint Ventures, will join KlearNow’s board. Daniel Hoffer from Autotech Ventures is joining as a board observer.
“This is a significant opportunity to transform an archaic industry that is key to global commerce,” Krishnamurthi said in a statement.
The freight ecosystem is filled with different players from the factories and port authorities to the ship liners and the last-mile delivery companies. Each of them have their own systems.
“There’s no one system that you can transmit the data to,” KlearNow founder and CEO Sam Tyagi said in a recent interview. “So everybody dumps technology down to a PDF or a PNG or some sort of format that everybody can read. The broker gets those documents, and then they print it out — so now they become non-digital.”
If you go to any customs brokers office they look like the old doctor’s office where all those folders are there with nicely arranged, really organized but very manual process,” he added. From here, Tyagi said, a broker will read off from those printed documents and type the information into another system that is communicated to Customs and Border Patrol’s system.
“It is very manual, it’s very small, and they work in a siloed system,” Tyagi said. “There is no visibility for the customer, or the importer, and it’s very costly because of the manual intervention.”
KlearNow developed a digital customs clearance platform that aims to be agnostic. This allows importers, customs brokers and freight forwarders to integrate with local customs authorities and conduct business on a single digital platform remotely and in real time. The platform automates this process to eliminate errors and reduces the time to clear customs. KlearNow says it can slash customs clearance times from hours to minutes.
The startup is also betting that its platform will find new customers in this remote work era that was caused by the COVID-19 pandemic. Custom brokers, who might normally travel into central offices and manage physical paperwork, are now faced with completing that task from home.
“Remote work is impossible for these people,” because they often need to access large-format printers, Tyagi said.
The company said its digital platform can funnel new clients, like these newly remote workers, directly to brokers for global customs clearance.
Tyagi said the company has also added new capabilities in response to COVID-19, such as expediting their FDA module to clear much-needed medical supplies, and is temporarily offering free clearance for nonprofit organizations that are importing masks, hand sanitizers and ventilators.
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German security firm Avira has been acquired by Investcorp at a $180M valuation
Mergers and acquisitions largely grinded to a halt at the end of March, in the wake of the coronavirus pandemic spreading around the world, but today comes news of a deal out of Europe that underscores where pockets of activity are still happening. Avira, a cybersecurity company based out of Germany that provides antivirus, identity management and other tools both to consumers and as a white-label offering from a number of big tech brands, has been snapped up by Investcorp Technology Partners, the PE division of Investcorp Bank. Investcorp’s plan is to help Avira make acquisitions in a wider security consolidation play.
The financial terms of the acquisition are not being disclosed in the companies’ joint announcement, but the CEO of Avira, Travis Witteveen, and ITP’s MD, Gilbert Kamieniecky, both said it gives Avira a total valuation of $180 million. The deal will involve ITP taking a majority ownership in the company, with Avira founder Tjark Auerbach retaining a “significant” stake of the company in the deal, Kamieniecky added.
Avira is not a tech startup in the typical sense. It was founded in 1986 and has been bootstrapped (in that it seems never to have taken any outside investment as it has grown). Witteveen said that it has “tens of millions” of users today of its own-branded products — its anti-virus software has been resold by the likes of Facebook (as part of its now-dormant antivirus marketplace) — and many more via the white-label deals it makes with big names. Strategic partners today include NTT, Deutsche Telekom, IBM, Canonical and more.
He said that the company has had many strategic approaches for acquisition from the ranks of tech companies, and also from more typical investors, but these were not routes that it has wanted to follow, since it wanted to grow as its own business, and needed more of a financial injection to do that than what it could get from more standard VC deals.
“We wanted a partnership where someone could step in and support our organic growth, and the inorganic [acquisition] opportunity,” he said.
The plan will be to make more acquisitions to expand Avira’s footprint, both in terms of products and especially to grow its geographic footprint: today the company is active in Asia, Europe and to a lesser extent in the US, while Investcorp has a business that also extends deep into the Middle East.
Cybersecurity, meanwhile, may never go out of style as an investment and growth opportunity in tech. Not only have cyber threats become more sophisticated and ubiquitous and targeted at individual consumers and businesses over the last several years, but our increasing reliance on technology and internet-connected systems will increase the demand and need to keep these safe from malicious attacks.
That has become no more apparent than in recent weeks, when much of the world’s population has been confined to shelter in place. People have in turn spent unprecedented amounts of time online using their phones, computers and other devices to read news, communicate with their families and friends, entertain themselves, and do critical work that they may have in part done in the past offline.
“In the current market, you can imagine a lot are concerned about the uncertainties of the technology landscape, but this is one that continues to thrive,” said Kamieniecky. “In security, we have seen companies develop quite rapidly and quickly, and here we have an opportunity to do that.”
Avira has been somewhat of a consolidator up to now, buying companies like SocialShield (which provided online security specifically for younger and social media users), while ITP, with Investcorp having some $34 billion under management, has made many acquisitions (and divestments) over the years, with some of the tech deals including Ubisense, Zeta Interactive and Dialogic.
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Medloop secures €6M from Kamet Ventures and AXA for self-service patient app
Medloop, which allows patients to manage healthcare needs and providers, has secured €6 million from Kamet Ventures and AXA.
The cash will be used to enhance its product offering and continue expansion across Germany and the U.K. Medloop is also developing an evidence-based medical rule engine embedded on the Electronic Medical Record (EMR) of patients.
Medloop offers patients what it calls “intuitive” self-service features in an app that enables them to navigate their own healthcare, including online appointment bookings, electronic medical results and prescription refills, as well as chatting in-app with healthcare providers.
Founded in 2018 by Berlin-based entrepreneur Shishir Singhee, some medical practices in Germany use the Medloop doctor system to run their entire practice, using it to give an overview of their patient population.
Singhee, said: “Healthcare today has become increasingly impersonalized as ever-growing patient registers have made it challenging for doctors to treat patients in a bespoke way. Medloop strives to bridge this critical gap, by employing technology to empower patients and help doctors deliver proactive and holistic care.“
Stephane Guinet, CEO of Kamet Ventures, said: “It is no secret how overstretched doctors are in terms of the time and care they can offer each patient. Medloop’s offering is a novel solution to this challenge and we are very excited to be part of Medloop’s growth story given how critical its offering is to the U.K. market and beyond.”
Medloop achieved compatibility with EMIS last summer, enabling its entry into the U.K. market.
In Germany, its main competitors are the incumbents that were built in the early 1990s, such as Medatix and Medistar. In the U.K. it is up against patient management tools such as QMasters.
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Meet MarsCat, a robot cat with lots of love to give and room to grow
At CES 2020, one of the more well-represented gadget categories was definitely consumer robots – but none was more adorable than MarsCat, a new robo-pet from industrial robot startup Elephant Robotics. This robot pet is a fully autonomous companion that can respond to touch, voice and even play with toys, and it’s hard not to love the thing after spending even just a brief amount of time with it.
MarsCat’s pedigree is a bit unusual, since Elephant Robotics is focused on building what’s known as ‘cobots,’ or industrial robots that are designed to work alongside humans in settings like factories or assembly plants. Elephant, which was founded in 2016, already produces three lines of these collaborative robots and has sold them to client companies around the world, including in Korea, the U.S., Germany and more.
This new product is designed for the home, however, not the factory or the lab. MarsCat is the startup’s first consumer product, but it obviously benefits immensely from the company’s expertise and experience in their industrial robotics business. With its highly articulated legs, tail and head, it can sit up, walk play and watch your movements, all working autonomously without any additional input required.
While MarsCat provides that kind of functionality out of the box, it’s also customizable and programmable by the user. Inside, it’s powered by a Raspberry Pi, and it ships with MarsCat SDK, which is an open software development library that allows you to fully control and program all of the robots functions. This makes it an interesting gadget for STEM education and research, too.
MarsCat is currently up for crowdfunding on Kickstarter, with Elephant having already surpassed its goal of $20,000 and on track to raise at least $100,000 more than that target. Elephant Robotics CEO and co-founder Joey Song told me that it actually plans to ship its first batch of production MarsCats to users in March, too, so backers shouldn’t have to wait long to enjoy their new robotic pet.
There are other robotic pets available on the market, but Song thinks that MarsCat has a unique blend of advanced features at a price point that’s currently unmatched by existing options. The robot can respond to a range of voice commands, and will also evolve its personality over time based on how you interact with it: Talk to it a lot, and it’ll also become ‘chatty;’ play with it frequently and it’ll be a playful kitty. That, combined with the open platform, is a lot to offer for the asking backer price of just $699 to start.
Sony’s Aibo, the canine equivalent of MarsCat, retails for $2,899 in the U.S., so it’s a bargain when considered in that light. And unlike the real thing, MarsCat definitely doesn’t shed, so it’s got that going for it, too.
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Morpheus Space’s modular, scalable satellite propulsion could be a game-changer for orbital industry
Building effective propulsion systems for satellites has traditionally been a highly bespoke affair, with expensive, one-off systems tailor-made to big, expensive spacecraft hardware. But increasingly, companies, including startups, are looking at ways to provide propulsion tech that can scale with the projected boom in demand for orbital satellites, including CubeSats and small sats, as the commercialization of space and advances in sensor, communication and launch technology broaden the scope of those working in this bold new frontier.
Morpheus Space, which began life as a research project at the University of Western Germany, has accomplished a lot when it comes to propulsion in the short time since its official founding around a year and a half ago. The Dresden-based startup already has sent some of its thrusters to space, where they’re actually providing propulsion, and it’s working with a number of clients and potential clients, including NASA’s Jet Propulsion Laboratory. The startup also just wrapped up its participation in Techstars’ inaugural Starburst Space Program in LA.
“Our motivation behind starting Morpheus Space was the lack of maneuverability of, especially small satellites in space,” explained Morpheus CEO and co-founder Daniel Bock, with whom I spoke at last week’s International Astronautical Congress in Washington, D.C. “We have around 2,000 active satellites in space, and in the next few years this will increase by 10x. We have to deal with that. So the first step in how we want to solve that is with our proportion systems, to give mobility to small satellites.”
The startup has seen a ton of inbound interest, and has even had conversations with the CTO of NASA and the CEO of Aerospace Corporation based on the strength of its technology. But what’s so special about what they’re doing, versus what has already been available for satellite propulsion? Put simply, “it’s the world’s smallest and most efficient propulsion system,” according to Morpheus Space co-founder István Lőrincz.
A single Morpheus NanoFEEP thruster propulsion system
Morpheus’ thruster uses gallium as its fuel source, which allows it to be very efficient, with an operating linespace of up to three or more years — non-stop, Lőrincz told me. When you factor in the low cost of these thrusters versus other solutions, and the ability to make them incredibly small (one thruster, along with electronics, is not that much larger than your average USB charger), you get a product that’s tailor-made for the cost-sensitive emerging new space industry. Ensuring the mass of these thrusters is small pays off big dividends when it comes to thinking about launch costs, and the fact that these are “Lego-like” in their modularity means they can suit a variety of different clients’ needs.
“You can build propulsion systems for satellites that are below one kilogram, up to those the size of trucks, just by creating arrays,” Lőrincz says.
An example of a Morpheus multi-thruster array used in a 3U-sized small satellite
Size is important, but so is scalability, and that’s another strength that the Morpheus thrusters bring to the market. Lőrincz told me that their technology allows you to quickly and easily build a large batch of the thrusters, instead of having to tailor-make your propulsion system to fit the satellite, which provides big benefits in terms of manufacturing and design costs — which Morpheus can then pass on to its customers, opening up to a whole new, much more price-sensitive segment of the market the possibility of including true orbital maneuvering capabilities.
Next up for Morpheus Space, after it gets its hardware business fully up and running, is to develop and deploy software that complements its thrusters and can offer clients things like fully automated route planning and navigation, Bock told me.
“For example, you can imagine you just have to command ‘Okay I want to go from A to B,’ and everything is handled on board,” he said. So when and how you turn, all the routing. And the next step will be an automated way of handling whole constellations.”
It’s a big goal, but there’s a big potential pay-off. More and more companies are getting into the constellation game, including SpaceX and Amazon, and there’s a lot more to come on that front as companies build out new use cases for collecting and making use of data gathered from orbit. Orbital traffic management and collision avoidance is one reason big industry groups like the Space Safety Coalition are being formed, and anyone who can help supply with a solution players at all budget levels of the industry stands to benefit.
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Germany says it won’t ban Huawei or any 5G supplier up front
Germany is resisting US pressure to shut out Chinese tech giant Huawei from its 5G networks — saying it will not ban any supplier for the next-gen mobile networks on an up front basis, per Reuters.
“Essentially our approach is as follows: We are not taking a pre-emptive decision to ban any actor, or any company,” government spokesman, Steffen Seibert, told a news conference in Berlin yesterday.
The country’s Federal Network Agency is slated to be publishing detailed security guidance on the technical and governance criteria for 5G networks in the next few days.
The next-gen mobile technology delivers faster speeds and lower latency than current-gen cellular technologies, as well as supporting many more connections per cell site. So it’s being viewed as the enabling foundation for a raft of futuristic technologies — from connected and autonomous vehicles to real-time telesurgery.
But increased network capabilities that support many more critical functions means rising security risk. The complexity of 5G networks — marketed by operators as “intelligent connectivity” — also increases the surface area for attacks. So future network security is now a major geopolitical concern.
German business newspaper Handelsblatt, which says it has reviewed a draft of the incoming 5G security requirements, reports that chancellor Angela Merkel stepped in to intervene to exclude a clause which would have blocked Huawei’s market access — fearing a rift with China if the tech giant is shut out.
Earlier this year it says the federal government pledged the highest possible security standards for regulating next-gen mobile networks, saying also that systems should only be sourced from “trusted suppliers”. But those commitments have now been watered down by economic considerations at the top of the German government.
The decision not to block Huawei’s access has attracted criticism within Germany, and flies in the face of continued US pressure on allies to ban the Chinese tech giant over security and espionage risks.
The US imposed its own export controls on Huawei in May.
A key concern attached to Huawei is that back in 2017 China’s Communist Party passed a national intelligence law which gives the state swingeing powers to compel assistance from companies and individuals to gather foreign and domestic intelligence.
For network operators outside China the problem is Huawei has the lead as a global 5G supplier — meaning any ban on it as a supplier would translate into delays to network rollouts. Years of delay and billions of dollars of cost to 5G launches, according to warnings by German operators.
Another issue is that Huawei’s 5G technology has also been criticized on security grounds.
A report this spring by a UK oversight body set up to assess the company’s approach to security was damning — finding “serious and systematic defects” in its software engineering and cyber security competence.
Though a leak shortly afterwards from the UK government suggested it would allow Huawei partial access — to supply non-core elements of networks.
An official UK government decision on Huawei has been delayed, causing ongoing uncertainty for local carriers. In the meanwhile a government review of the telecoms supply chain this summer called for tougher security standards and updated regulations — with major fines for failure. So it’s possible that stringent UK regulations might sum to a de facto ban if Huawei’s approach to security isn’t seen to take major steps forward soon.
According to Handelsblatt’s report, Germany’s incoming guidance for 5G network operators will require carriers identify critical areas of network architecture and apply an increased level of security. (Although it’s worth pointing out there’s ongoing debate about how to define critical/core network areas in 5G networks.)
The Federal Office for Information Security (BSI) will be responsible for carrying out security inspections of networks.
Last week a pan-EU security threat assessment of 5G technology highlighted risks from “non-EU state or state-backed actors” — in a coded jab at Huawei.
The report also flagged increased security challenges attached to 5G vs current gen networks on account of the expanded role of software in the networks and apps running on 5G. And warned of too much dependence on individual 5G suppliers, and of operators relying overly on a single supplier.
Shortly afterwards the WSJ obtained a private risk assessment by EU governments — which appears to dial up regional concerns over Huawei, focusing on threats linked to 5G providers in countries with “no democratic and legal restrictions in place”.
Among the discussed risks in this non-public report are the insertion of concealed hardware, software or flaws into 5G networks; and the risk of uncontrolled software updates, backdoors or undocumented testing features left in the production version of networking products.
“These vulnerabilities are not ones which can be remedied by making small technical changes, but are strategic and lasting in nature,” a source familiar with the discussions told the WSJ — which implies that short term economic considerations risk translating into major strategic vulnerabilities down the line.
5G alternatives are in short supply, though.
US Senator Mark Warner recently floated the idea of creating a consortium of ‘Five Eyes’ allies — aka the U.S., Australia, Canada, New Zealand and the UK — to finance and build “a Western open-democracy type equivalent” to Huawei.
But any such move would clearly take time, even as Huawei continues selling services around the world and embedding its 5G kit into next-gen networks.
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‘We are seeing volume and interest in Peloton explode,’ says company president on listing day
This morning, Peloton (NASDAQ: PTON), the tech-enabled stationary bicycle and fitness content streaming company, raised $1.2 billion in its NASDAQ initial public offering. Despite dropping more than 10% in its first day of trading — ultimately closing down 11% at $25.84 per share — the IPO was a bona fide success. Peloton, once denied (over and over again) by VC skeptics, now has hundreds of millions of dollars to take its business into a new era. One in which, the media, hardware, software, logistics and social company attempts to become a generation-defining company akin to Apple.
Founded in 2012 — six years after Soul Cycle opened its first cycling studio in New York’s Upper East Side and two years before a Soul Cycle founder, Ruth Zukerman, jumped ship to launch her own indoor cycling business, Flywheel Sports — a man by the name of John Foley made the ambitious, some might say foolish, decision to start a company that would sell these exercise bikes direct-to-consumer. That way, you could take a Soul Cycle class, in essence, in the comfort of your own home. Even better, technology would improve the experience.
As my colleague Josh Constine recently described it, these bikes come outfitted with a 22-inch Android screen, transforming an outdated exercising experience and bringing it into 2019: “It makes lazy people like me work out. That’s the genius of the Peloton bicycle. All you have to do is Velcro on the shoes and you’re trapped. You’ve eliminated choice and you will exercise,” Constine writes.
Peloton’s ability to get people exercise — a feature driven by its talented instructors (some of whom were poached from competitor Flywheel Sports) — ultimately had venture capital investors funneling $1 billion, roughly, into the business. Today, Peloton operates dozens of showrooms across the U.S., counts 1.4 million total community members — defined as any individual who has a Peloton account — and over 500,000 paying subscribers. Why? Because the company, as stated in its IPO prospectus, “sells happiness.”
“Peloton is so much more than a Bike — we believe we have the opportunity to create one of the most innovative global technology platforms of our time,” writes Foley. “It is an opportunity to create one of the most important and influential interactive media companies in the world; a media company that changes lives, inspires greatness, and unites people.”
Peloton’s flagship product, a tech-enabled stationary bike.
Peloton’s community coupled with the high margins on sales of its $2,245 bikes had the company reporting $915 million in total revenue for the year ending June 30, 2019, an increase of 110% from $435 million in fiscal 2018 and $218.6 million in 2017. Its losses, meanwhile, hit $245.7 million in 2019, up significantly from a reported net loss of $47.9 million last year.
What’s next for Peloton? The opportunities are endless, given the company’s firm seat at the intersection of hardware, software, media content and more. A third product may be in the works, expansion to international markets or new instructors. Peloton is going after a massive market ripe for disruption. What’s certain is that we’ll see a whole lot of cash flowing into fitness tech copycats in the next couple of years.
Peloton, following a number of lukewarm consumer IPOs (Uber), nearly doubled its valuation to $8.1 billion this morning after pricing its IPO at the top of its range, $29 per share. To answer some of our most burning questions, we chatted with Peloton’s president William Lynch, the former CEO of Barnes & Noble, about the float.
The following conversation has been edited for length and clarity.
Peloton president and former Barnes & Noble CEO William Lynch.
Kate Clark: What’s next for Peloton?
William Lynch: We now have over a billion in capital to fuel more growth, especially in the area of product innovation.
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SoftBank-backed Getaround is raising $200M at a $1.5B+ valuation
Getaround, a used car marketplace and winner of TechCrunch Disrupt New York Battlefield 2011, will enter the unicorn club with a roughly $200 million equity financing.
The deal values Getaround, founded in 2009, at $1.7 billion, according to an estimate provided by PitchBook. Getaround declined to comment, citing internal policy on “funding speculation.”
“Getaround and our investors work closely together on our growth strategy, and we’ll definitely plan to share more when we’re ready,” a spokesperson said in response to TechCrunch’s inquiry Thursday morning.
The news follows the company’s $300 million acquisition of Drivy, a Paris-headquartered car-sharing startup that operates in 170 European cities.
Getaround closed a Series D funding of $300 million last year, a round led by SoftBank with participation from Toyota Motor Corporation. Existing investors in the business, which allows its some 200,000 members to rent and unlock vehicles from their mobile phones at $5 per hour, include Menlo Ventures and SOSV.
Assuming an upcoming $200 million infusion, Getaround has raised more than $600 million in equity funding to date.
Whether SoftBank has participated in Getaround’s latest financing is unknown. The business is an active investor in the carsharing market, with investments in Chinese ride-hailing business Didi Chuxing, Uber and autonomous driving company Cruise. We’ve reached out to SoftBank for comment.
In conversation with TechCrunch last year, Getaround co-founder Sam Zaid emphasized SoftBank’s capabilities as a mobility investor: “What we really liked about [SoftBank] was they take a really long view on things,” he said. “So they were very good about thinking about the future of mobility, and we have a common kind of vision of every car becoming a shared car.”
Getaround was expected to expand into international markets with its previous fundraise. Indeed, the company has moved into France, Germany, Spain, Austria, Belgium and the U.K. where it operates under the brand “Drivy by Getaround,” and in Norway under the “Nabobil” brand.
The business initially launched its car-sharing service in 2011, relying on gig workers who can list their cars on the Getaround marketplace for $500 to $1,000 a month in payments, depending on how often their cars are rented.
Since Getaround entered the market, however, a number of competitors have entered the space with similar business models. Turo and Maven, for example, have both emerged to facilitate car rental with backing from top venture capital funds.
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