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Crusoe Energy is tackling energy use for cryptocurrencies and data centers and greenhouse gas emissions

The two founders of Crusoe Energy think they may have a solution to two of the largest problems facing the planet today — the increasing energy footprint of the tech industry and the greenhouse gas emissions associated with the natural gas industry.

Crusoe, which uses excess natural gas from energy operations to power data centers and cryptocurrency mining operations, has just raised $128 million in new financing from some of the top names in the venture capital industry to build out its operations — and the timing couldn’t be better.

Methane emissions are emerging as a new area of focus for researchers and policymakers focused on reducing greenhouse gas emissions and keeping global warming within the 1.5 degree target set under the Paris Agreement. And those emissions are just what Crusoe Energy is capturing to power its data centers and bitcoin mining operations.

The reason why addressing methane emissions is so critical in the short term is because these greenhouse gases trap more heat than their carbon dioxide counterparts and also dissipate more quickly. So dramatic reductions in methane emissions can do more in the short term to alleviate the global warming pressures that human industry is putting on the environment.

And the biggest source of methane emissions is the oil and gas industry. In the U.S. alone roughly 1.4 billion cubic feet of natural gas is flared daily, said Chase Lochmiller, a co-founder of Crusoe Energy. About two-thirds of that is flared in Texas, with another 500 million cubic feet flared in North Dakota, where Crusoe has focused its operations to date.

For Lochmiller, a former quant trader at some of the top American financial services institutions, and Cully Cavness, a third generation oil and gas scion, the ability to capture natural gas and harness it for computing operations is a natural combination of the two men’s interests in financial engineering and environmental preservation.

NEW TOWN, ND – AUGUST 13: View of three oil wells and flaring of natural gas on The Fort Berthold Indian Reservation near New Town, ND on August 13, 2014. About 100 million dollars’ worth of natural gas burns off per month because a pipeline system isn’t in place yet to capture and safely transport it. The Three Affiliated Tribes on Fort Berthold represent Mandan, Hidatsa and Arikara Nations. It’s also at the epicenter of the fracking and oil boom that has brought oil royalties to a large number of Native Americans living there. (Photo by Linda Davidson / The Washington Post via Getty Images)

The two Denver natives met in prep-school and remained friends. When Lochmiller left for MIT and Cavness headed off to Middlebury they didn’t know that they’d eventually be launching a business together. But through Lochmiller’s exposure to large-scale computing and the financial services industry, and Cavness’ assumption of the family business, they came to the conclusion that there had to be a better way to address the massive waste associated with natural gas.

Conversation around Crusoe Energy began in 2018 when Lochmiller and Cavness went climbing in the Rockies to talk about Lochmiller’s trip to Mt. Everest.

When the two men started building their business, the initial focus was on finding an environmentally friendly way to deal with the energy footprint of bitcoin mining operations. It was this pitch that brought the company to the attention of investors at Polychain, the investment firm started by Olaf Carlson-Wee (and Lochmiller’s former employer), and investors like Bain Capital Ventures and new investor Valor Equity Partners.

(This was also the pitch that Lochmiller made to me to cover the company’s seed round. At the time I was skeptical of the company’s premise and was worried that the business would just be another way to prolong the use of hydrocarbons while propping up a cryptocurrency that had limited actual utility beyond a speculative hedge against governmental collapse. I was wrong on at least one of those assessments.)

“Regarding questions about sustainability, Crusoe has a clear standard of only pursuing projects that are net reducers of emissions. Generally the wells that Crusoe works with are already flaring and would continue to do so in the absence of Crusoe’s solution. The company has turned down numerous projects where they would be a buyer of low-cost gas from a traditional pipeline because they explicitly do not want to be net adders of demand and emissions,” wrote a spokesman for Valor Equity in an email. “In addition, mining is increasingly moving to renewables and Crusoe’s approach to stranded energy can enable better economics for stranded or marginalized renewables, ultimately bringing more renewables into the mix. Mining can provide an interruptible base load demand that can be cut back when grid demand increases, so overall the effect to incentivize the addition of more renewable energy sources to the grid.”

Other investors have since piled on, including: Lowercarbon Capital, DRW Ventures, Founders Fund, Coinbase Ventures, KCK Group, Upper90, Winklevoss Capital, Zigg Capital and Tesla co-founder JB Straubel.

The company now operates 40 modular data centers powered by otherwise wasted and flared natural gas throughout North Dakota, Montana, Wyoming and Colorado. Next year that number should expand to 100 units as Crusoe enters new markets such as Texas and New Mexico. Since launching in 2018, Crusoe has emerged as a scalable solution to reduce flaring through energy intensive computing, such as bitcoin mining, graphical rendering, artificial intelligence model training and even protein folding simulations for COVID-19 therapeutic research.

Crusoe boasts 99.9% combustion efficiency for its methane, and is also bringing additional benefits in the form of new networking buildout at its data center and mining sites. Eventually, this networking capacity could lead to increased connectivity for rural communities surrounding the Crusoe sites.

Currently, 80% of the company’s operations are being used for bitcoin mining, but there’s increasing demand for use in data center operations, and some universities, including Lochmiller’s alma mater of MIT, are looking at the company’s offerings for their own computing needs.

“That’s very much in an incubated phase right now,” said Lochmiller. “A private alpha where we have a few test customers… we’ll make that available for public use later this year.”

Crusoe Energy Systems should have the lowest data center operating costs in the world, according to Lochmiller and while the company will spend money to support the infrastructure buildout necessary to get the data to customers, those costs are negligible when compared to energy consumption, Lochmiller said.

The same holds true for bitcoin mining, where the company can offer an alternative to coal-powered mining operations in China and the construction of new renewable capacity that wouldn’t be used to service the grid. As cryptocurrencies look for a way to blunt criticism about the energy usage involved in their creation and distribution, Crusoe becomes an elegant solution.

Institutional and regulatory tailwinds are also propelling the company forward. Recently New Mexico passed new laws limiting flaring and venting to no more than 2% of an operator’s production by April of next year, and North Dakota is pushing for incentives to support on-site flare capture systems while Wyoming signed a law creating incentives for flare gas reduction applied to bitcoin mining. The world’s largest financial services firms are also taking a stand against flare gas with BlackRock calling for an end to routine flaring by 2025.

“Where we view our power consumption, we draw a very clear line in our project evaluation stage where we’re reducing emissions for an oil and gas projects,” Lochmiller said. 

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MIT startup Pickle raises $5.75M for its package-picking robot

There’s no doubt this past year has been a major watershed moment for the robotics industry. Warehouse and logistics have been a particular target for an automation push, as companies have worked to keep the lights on amidst stay at home orders and other labor shortages.

MIT spinoff Pickle is one of the latest startups to enter the fray. The company launched with limited funding and a small team, though it’s recently changed one of these, telling TechCrunch this week that it has raised $5.57 million in funding during this hot investment streak. The seed round was led by Hyperplane and featured Third Kind Venture Capital, Box Group and Version One Ventures, among others.

The company’s making some pretty big claims around the efficacy of its first robot named, get this, “Dill” (the company clearly can’t avoid a clever name). It says the robot is capable of 1,600 picks per hour from the back of a trailer, a figure it claims is “double the speed of any competitors.”

CEO Andrew Meyer says collaboration is a key to the company’s play. “We designed people into the system from the get-go and focused on a specific problem: package handling in the loading dock. We got out of the lab and put robots to work in real warehouses. We resisted the fool’s errand of trying to create a system that could work entirely unsupervised or solve every robotics problem out there.”

Orders for the first product targeted at trailer unloading will open in June, with an expected ship date of early 2022.

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How Pilot charted a course of not raising too much money

A few weeks ago, we wrote about fintech Pilot raising a $100 million Series C that doubled the company’s valuation to $1.2 billion.

Bezos Expeditions — Amazon founder Jeff Bezos’ personal investment fund — and Whale Rock Capital joined the round, adding $40 million to a $60 million raise led by Sequoia about one month prior.

That raise came after a $40 million Series B in April 2019 co-led by Stripe and Index Ventures that valued the company at $355 million.

Both raises were notable and warranted coverage. But sometimes it’s fun to take a peek at the stories behind the raises and dig deeper into the numbers.

So here we go.

First off, San Francisco-based Pilot — which has a mission of affordably providing back-office services such as bookkeeping to startups and SMBs — apparently had term sheets that offered “2x the $40M” raised in its Series B. But it chose not to raise so much capital. 

I also heard that the same investor that ended up leading a now defunct competitor’s $60 million raise first asked to invest $60 million in Pilot as a follow-on to that Series B prior to making the other investment. While I don’t know for sure, I can only presume that what is being referred to is ScaleFactor’s $60 million Series C raise in August 2019 that was led by Coatue Management. (ScaleFactor crashed and burned last year.)

According to CFO Paul Jun: “There were many periods when Pilot turned away new customers and growth capital instead of absolutely maximizing short-term growth…Pilot prioritized building the foundational investments needed for scalability, reliability and high velocity. When it was presented with the opportunity for additional funding towards further growth in 2019, it declined to do so.”

Co-founder and CEO Waseem Daher elaborates, pointing out that the first company that Pilot’s founding team ran, Ksplice, was bootstrapped before getting acquired by Oracle in 2011. (It’s also worth noting that the founding team are all MIT computer scientists.)

“Ultimately, the reason to raise money is you believe that you can deploy the capital, to grow the company or to basically cause the company to grow at the rate you’d like to grow. And it doesn’t make sense to raise money if you don’t need it, or don’t have a good plan for what to do with it,” Daher told TechCrunch. “Too much capital can be bad because it sort of leads you to bad habits…When you have the money, you spend the money.”

So despite what he describes as “a great deal of institutional interest” in 2019, Pilot opted to raise just $40 million, instead of $80 million to $100 million, because it was the amount of capital the company had confidence that it could deploy successfully.

Also, Jun shared some numbers beyond the recent raise amount and valuation.

  • The company has tripled revenue every year since inception, except for 2020 when it doubled revenue.
  • Pilot claims to have had a cash burn of $800,000 per month in 2020 against a starting balance of $40 million.
  • The startup touts a 60% GAAP gross margin. Daher notes: “We feel really good about having long-term unit economics that will work for this business without resorting to offshoring or outsourcing in a way that could compromise quality and compromise relationships.”

Bottom line is companies don’t have to accept all the capital that’s offered to them. And maybe in some cases, they shouldn’t.

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Immunai raises $60M as it expands from improving immune therapies to discovering new ones, too

Just three years after its founding, biotech startup Immunai has raised $60 million in Series A funding, bringing its total raised to over $80 million. Despite its youth, Immunai has already established the largest database in the world for single cell immunity characteristics, and it has already used its machine learning-powered immunity analysts platform to enhance the performance of existing immunotherapies. Aided by this new funding, it’s now ready to expand into the development of entirely new therapies based on the strength and breadth of its data and ML.

Immunai’s approach to developing new insights around the human immune system uses a “multiomic” approach — essentially layering analysis of different types of biological data, including a cell’s genome, microbiome, epigenome (a genome’s chemical instruction set) and more. The startup’s unique edge is in combining the largest and richest data set of its type available, formed in partnership with world-leading immunological research organizations, with its own machine learning technology to deliver analytics at unprecedented scale.

“I hope it doesn’t sound corny, but we don’t have the luxury to move more slowly,” explained Immunai co-founder and CEO Noam Solomon in an interview. “Because I think that we are in kind of a perfect storm, where a lot of advances in machine learning and compute computations have led us to the point where we can actually leverage those methods to mine important insights. You have a limit or ceiling to how fast you can go by the number of people that you have — so I think with the vision that we have, and thanks to our very large network between MIT and Cambridge to Stanford in the Bay Area, and Tel Aviv, we just moved very quickly to harness people to say, let’s solve this problem together.”

Solomon and his co-founder and CTO Luis Voloch both have extensive computer science and machine learning backgrounds, and they initially connected and identified a need for the application of this kind of technology in immunology. Scientific co-founder and SVP of Strategic Research Danny Wells then helped them refine their approach to focus on improving efficacy of immunotherapies designed to treat cancerous tumors.

Immunai has already demonstrated that its platform can help identify optimal targets for existing therapies, including in a partnership with the Baylor College of Medicine where it assisted with a cell therapy product for use in treating neuroblastoma (a type of cancer that develops from immune cells, often in the adrenal glands). The company is now also moving into new territory with therapies, using its machine learning platform and industry-leading cell database to new therapy discovery — not only identifying and validating targets for existing therapies, but helping to create entirely new ones.

“We’re moving from just observing cells, but actually to going and perturbing them, and seeing what the outcome is,” explained Voloch. This, from the computational side, later allows us to move from correlative assessments to actually causal assessments, which makes our models a lot more powerful. Both on the computational side and on the lab side, this are really bleeding edge technologies that I think we will be the first to really put together at any kind of real scale.”

“The next step is to say, ‘Okay, now that we understand the human immune profile, can we develop new drugs?’,” said Solomon. “You can think about it like we’ve been building a Google Maps for the immune system for a few years — so we are mapping different roads and paths in the immune system. But at some point, we figured out that there are certain roads or bridges that haven’t been built yet. And we will be able to support building new roads and new bridges, and hopefully leading from current states of disease or cities of disease, to building cities of health.”

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Senti Bio raises $105 million for its new programmable biology platform and cancer therapies

Senti Biosciences, a company developing cancer therapies using a new programmable biology platform, said it has raised $105 million in a new round of financing led by the venture arm of life sciences giant Bayer.

The company’s technology uses new computational biological techniques to manufacture cell and gene therapies that can more precisely target specific cells in the body.

Senti Bio’s chief executive, Tim Lu, compares his company’s new tech to the difference between basic programming and object-oriented programming. “Instead of creating a program that just says ‘Hello world’, you can introduce ‘if’ statements and object-oriented programming,” said Lu.

By building genetic material that can target multiple receptors, Senti Bio’s therapies can be more precise in the way they identify genetic material in the body and deliver the kinds of therapies directly to the pathogens. “Instead of the cell expressing a single receptor… now we have two receptors,” he said.

The company is initially applying its gene circuit technology platform to develop therapies that use what are called chimeric antigen receptor natural killer (CAR-NK) cells that can target cancer cells in the body and eliminate them. Many existing cell and gene therapies use chimeric antigen receptor T-cells, which are white blood cells in the body that are critical to immune response and destroy cellular pathogens in the body.

However, T-cell-based therapies can be toxic to patients, stimulating immune responses that can be almost as dangerous as the pathogens themselves. Using CAR-NK cells produces similar results with fewer side effects.

That’s independent of the gene circuit, said Lu. “The gene circuit gets you specificity… Right now when you use a CAR-T cell or a CAR-NK cell… you find a target and hope that it doesn’t affect normal cells. We can build logic in our gene circuits in the cell that means a CAR-NK cell can identify two targets rather than one.”

That increased targeting means lower risks of healthy cells being destroyed alongside mutations or pathogens that are in the body.

For Lu and his co-founders — fellow MIT professor Jim Collins, Boston University professor Wilson Wong and longtime synthetic biology operator Phillip Lee — Senti Bio is the culmination of decades of work in the field.

“I compare it to the early days of semiconductor work,” Lu said of the journey to develop this gene circuit technology. “There were bits and pieces of technology being developed in research labs, but to realize the scale at which you need, this has to be done at the industrial level.”

So licensing work from MIT, Boston University and Stanford, Lu and his co-founders set out to take this work out of the labs to start a company.

When the company was started it was a bag of tools and the know-how on how to use them,” Lu said. But it wasn’t a fully developed platform. 

That’s what the company now has and with the new capital from Leaps by Bayer and its other investors, Senti is ready to start commercializing.

The first products will be therapies for acute myeloid leukemia, hepatocellular carcinoma and other, undisclosed, solid tumor targets, the company said in a statement.

“Leaps by Bayer’s mission is to invest in breakthrough technologies that may transform the lives of millions of patients for the better,” said Juergen Eckhardt, MD, head of Leaps by Bayer. “We believe that synthetic biology will become an important pillar in next-generation cell and gene therapy, and that Senti Bio’s leadership in designing and optimizing biological circuits fits precisely with our ambition to prevent and cure cancer and to regenerate lost tissue function.”

Lu and his co-founders also see their work as a platform for developing other cell therapies for other diseases and applications — and intend to partner with other pharmaceutical companies to bring those products to market.  

“Over the past two years, our team has designed, built and tested thousands of sophisticated gene circuits to drive a robust product pipeline, focused initially on allogeneic CAR-NK cell therapies for difficult-to-treat liquid and solid tumor indications,” Lu said in a statement. “I look forward to continued platform and pipeline advancements, including starting IND-enabling studies in 2021.”

The new financing round brings Senti’s total capital raised to just under $160 million and Lu said the new money will be used to ramp up manufacturing and accelerate its work partnering with other pharmaceutical companies.

The current time frame is to get its investigational new drug permits filed by late 2022 and early 2023 and have initial clinical trials begun in 2023.

Developing gene circuits is a new and expanding field with a number of players, including Cell Design Labs, which was acquired by Gilead in 2017 for up to $567 million. Other companies working on similar therapies include CRISPR Therapeutics, Intellius and Editas, Lu said.

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Aerospace’s Steve Isakowitz to speak at TC Sessions: Space 2020

A mere two weeks remain until we kick off TC Sessions: Space (December 16 & 17), our first conference focused on the technology designed to push galactic boundaries and the people making it happen. Building successful space programs, whether private, public or hybrid combination, requires a well-trained workforce — today and for generations to come. That’s why we can’t wait for Building the Workforce of the Future, a breakout panel discussion featuring Steve Isakowitz.

Isakowitz is the president and CEO of The Aerospace Corporation, a national nonprofit corporation that operates a federally funded research and development center. It addresses complex problems across the space enterprise focused on agility, innovation and objective technical leadership.

In his 30+ year career, Isakowitz has held prominent roles across the government, private, space and technology sectors, including at NASA, U.S. Department of Energy and the White House Office of Management and Budget. Prior to joining Aerospace, he was president of Virgin Galactic, where his responsibilities included the development of privately funded launch systems, advanced technologies and other new space applications.

Building the Workforce of the Future focuses on what’s required to advance the United States’ leading role in space, namely developing a workforce that’s up to the challenge. Panelists also include Dava Newman, MIT’s Apollo Program Professor of Astronautics, and Yannis C. Yortsos, Dean, USC Viterbi School of Engineering and former Zohrab Kaprielian Chair in Engineering, University of Southern California.

More sessions from TC Sessions: Space

The COVID-19 pandemic has created opportunities to imagine new models for how and where to train the next generation of scientists and engineers. This session will explore how universities and industry can work together to integrate professional experience into the curriculum and how universities and industry can work together to build robust talent pipelines that create digitally fluent, agile workers for the future.

The panelists will weigh in on strategies to build diverse workforces — with different perspectives and experiences that drive innovation — as well as new approaches that promote continuous learning for workers throughout their careers.

The space industry requires a deep bench and a long pipeline of engineers and scientists. Tune in to Building the Workforce of the Future for the latest thinking on this vital topic. It’s one session you don’t want to miss.

Late registration tickets are still available, as are discounts for groupsstudentsactive military/government employees and for early-stage space startup founders who want to give their startup extra visibility.

Is your company interested in sponsoring TC Sessions: Space 2020? Click here to talk with us about available opportunities.

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Deep tech VC fund The Engine raises $230M for its second fund from MIT and new backer Harvard

Deep tech. Hard tech. Or, as The Engine dubs it, Tough Tech.

Venture investing today is essentially identical to what happens on Wall Street, focused on data rooms, spreadsheets, SaaS churn models and cohort analysis. Yet, the history of venture capital firms is heavily interwoven with universities and their research. Some of the most famous VC funds like Kleiner Perkins got their start funding compelling research projects out of laboratories and financing their commercialization toward scale.

Technical risk is something many VCs like to avoid, but The Engine has built an entire brand and thesis around it. Centered around Kendall Square and the broader MIT ecosystem, The Engine debuted a couple of years ago with a focus on “tough tech” problems that are perhaps a touch too early for other VCs. That’s led to investments in companies like Boston Metal, which builds environmentally-friendly steel alloys, WoHo, which is rethinking modular building construction that we profiled last week, and Commonwealth Fusion Systems, which is developing fusion power.

Indeed, the firm’s portfolio page has to be one of the most interesting in the industry today.

The good news is that the firm’s ambitious funding strategy looks set to continue. It announced this morning that it has raised $230 million toward the firm’s second fund, which on top of the firm’s first fund brings it to a total of $435 million under management. In a press statement, the firm said that it has funded 27 portfolio companies out of its first fund. While MIT continues to be the anchor LP, Harvard joined for Fund 2, creating a cross-Cambridge, MA venture platform.

Katie Rae remains CEO and managing partner of the fund, and her team has expanded over the past few years as the firm has scaled up.

The Engine’s Reed Sturtevant, Katie Rae, and Ann DeWitt prepare for the Tough Tech Summit today. Photo via The Engine.

One interesting point that we haven’t noted previously is that MIT is building The Engine a 200,000 square foot building near its campus that will offer massive space for startups and portfolio companies to start and grow over time. That building is expected to open in 2022, hopefully when this whole pandemic situation allows for in-office collaboration again.

Boston has become something of a hub for deeper technical projects. Local startup Desktop Metal, which builds 3D printers that can print metal, is going through a SPAC process that values the company at roughly $2.5 billion. With this latest news from The Engine, it seems clear that Boston’s tough tech ecosystem will continue to have a pipeline of interesting and compelling companies.

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WeWork and SoftBank unveil the first 14 startups in their Emerge accelerator for underrepresented founders

SoftBank Investment Advisers and WeWork Labs say they’ve officially kicked off the first session of Emerge, an accelerator program designed for underrepresented founders.

In their press release, the companies describe Emerge as “launched by SoftBank with support from WeWork Labs” (that’s the co-working company’s global accelerator program), with a goal of bringing more equality to tech and venture capital.

It’s an equity-free, eight-week program that includes workshops, access to mentors from SoftBank and the WeWork community and sessions with SoftBank executives. It all culminates in a showcase event for investors and SoftBank partners.

The Emerge website describes the program as based in San Mateo, Calif. — but given COVID-19, the sessions and programming are all virtual.

“Supporting underrepresented founders is a top priority for us, ensuring we see more diverse startups across the tech ecosystem,” said Catherine Lenson, managing partner and chief human resources officer at SoftBank Investment Advisers, in a statement. “There is a lack of diversity in the sector as a whole, and we need to do more to address it. That is why we’re excited to launch this program and to see the positive impact that these inspiring founders will have.”

This is also a reminder that while the larger corporate entities are currently embroiled in a legal and financial dispute, WeWork and its largest investor remain closely intertwined.

Here are the 14 startups in the initial program:

  • Aquagenuity, which allows users to take any smart device and track water quality and monitor their environment in real time
  • Bridge to College, which helps students choose colleges wisely by matching and providing data
  • Caldo uses flexible automation and mobile designs to power satellite eateries for restaurants
  • GameJolt, a platform for gamers to follow more than 100,000 games while they’re still in development
  • Koniku, which is diagnosing disease using breath
  • Mogul, which helps employers find diverse talent
  • Moment AI, which uses AI to understand the driver and improve safety
  • Node, which builds houses through a proprietary assembly kit
  • OjaExpress, a marketplace connecting immigrants and foodies to local ethnic mom-and-pop grocery stores
  • Proven, which offers personalized skin care products powered by The Skin Genome Project, winner of MIT’s 2018 Artificial Intelligence Award
  • Rebellyous Foods, a production stack for plant-based meat
  • ScriptHealth, which provides easy access to prescription medications
  • Shyft, which builds IoT hardware and integrated software to connect and intelligently manage distributed energy resources
  • SPS, a cross-border payments provider operating across all major U.S. states and Canada

 

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What is contact tracing?

One of the best tools we have to slow the spread of the coronavirus is, as you have no doubt heard by now, contact tracing. But what exactly is contact tracing, who does it and how, and do you need to worry about it?

In short, contact tracing helps prevent the spread of a virus by proactively finding people at higher risk than others due to potential exposure, notifying them if possible, and quarantining them if necessary. It’s a proven technique, and smartphones could help make it even more effective — but only if privacy and other concerns can be overcome.

Contact tracing, from memory to RAM

Contact tracing has been done in some form or another as long as the medical establishment has understood the nature of contagious diseases. When a person is diagnosed with an infectious disease, they are asked whom they have been in contact with over the previous weeks, both in order to determine who may have been infected by them and perhaps where they themselves were infected.

Until very recently, however, the process has relied heavily on the recall of people who are in a highly stressful situation and, until prompted, were probably not paying special attention to their movements and interactions.

This results in a list of contacts that is far from complete, though still very helpful. If those people can be contacted and their contacts likewise traced, a network of potential infections can be built up without a single swab or blood drop, and lives can be saved or important resources better allocated.

You might think that has all changed now what with modern technology and all, but in fact contact tracing being done at hospitals right now is almost all still of the memory-based kind — the same we might have used a hundred years ago.

It certainly seems as if the enormous digital surveillance apparatus that has been assembled around us over the last decade should be able to accomplish this kind of contact tracing easily, but in fact it’s surprisingly useless for anything but tracking what you are likely to click on or buy.

While it would be nice to be able to piece together a contagious person’s week from a hundred cameras spread throughout the city and background location data collected by social media, the potential for abuse of such a system should make us thankful it is not so easy as that. In other, less dire circumstances the ability to track the exact movements and interactions of a person from their digital record would be considered creepy at best, and perhaps even criminal.

But it’s one thing when an unscrupulous data aggregator uses your movements and interests to target you with ads without your knowledge or consent — and quite another when people choose to use the forbidden capabilities of everyday technology in an informed and limited way to turn the tide of a global pandemic. And that’s what modern digital contact tracing is intended to do.

Bluetooth beacons

All modern mobile phones use wireless radios to exchange data with cell towers, Wi-Fi routers, and each other. On their own, these transmissions aren’t a very good way to tell where someone is or who they’re near — a Wi-Fi signal can travel 100 to 200 feet reliably, and a cell signal can go miles. Bluetooth, on the other hand, has a short range by design, less than 30 feet for good reception and with a swiftly attenuating signal that makes it unlikely to catch a stray contact from much further out than that.

We all know Bluetooth as the way our wireless earbuds receive music from our phones, and that’s a big part of its job. But Bluetooth, by design, is constantly reaching out and touching other Bluetooth-enabled devices — it’s how your car knows you’ve gotten into it, or how your phone detects a smart home device nearby.

Bluetooth chips also make brief contact without your knowledge with other phones and devices you pass nearby, and if they aren’t recognized, they delete each other from their respective memories as soon as possible. But what if they didn’t?

The type of contact tracing being tested and deployed around the world now uses Bluetooth signals very similar to the ones your phone already transmits and receives constantly. The difference is it just doesn’t automatically forget the other devices it comes into contact with.

Assuming the system is working correctly, what would happen when a person presents at the hospital with COVID-19 is basically just a digitally enhanced version of manual contact tracing. Instead of querying the person’s fallible memory, they query the phone’s much more reliable one, which has dutifully recorded all the other phones it has recently been close enough to connect to. (Anonymously, as we’ll see.)

Those devices — and it’s important to note that it’s devices, not people — would be alerted within seconds that they had recently been in contact with someone who has now been diagnosed with COVID-19. The notification they receive will contain information on what the affected person can do next: Download an app or call a number for screening, for instance, or find a nearby location for testing.

The ease, quickness, and comprehensiveness of this contact tracing method make it an excellent opportunity to help stem the spread of the virus. So why aren’t we all using it already?

Successes and potential worries

In fact digital contact tracing using the above method (or something very like it) has already been implemented with millions of users, apparently to good effect, in east Asia, which of course was hit by the virus earlier than the U.S. and Europe.

In Singapore the TraceTogether app was promoted by the government as the official means for contact tracing. South Korea saw the voluntary adoption of a handful of apps that tracked people known to be diagnosed. Taiwan was able to compare data from its highly centralized healthcare system to a contact tracing system it began work on during the SARS outbreak years ago. And mainland China has implemented a variety of tracking procedures through mega-popular services like WeChat and Alipay.

While it would be premature to make conclusions on the efficacy of these programs while they’re still underway, it seems at least anecdotally to have improved the response and potentially limited the spread of the virus.

But east Asia is a very different place from the U.S.; we can’t just take Taiwan’s playbook and apply it here (or in Europe, or Africa, etc.), for myriad reasons. There are also valid questions of privacy, security, and other matters that need to be answered before people, who for good reason are skeptical of the intentions of both the government and the private sector, will submit to this kind of tracking.

Right now there are a handful of efforts being made in the U.S., the largest profile by far being the collaboration between arch-rivals Apple and Google, which have proposed a cross-platform contact tracing method that can be added to phones at the operating system.

The system they have suggested uses Bluetooth as described above, but importantly does not tie it to a person’s identity in any way. A phone would have a temporary ID number of its own, and as it made contact with other devices, it exchanges numbers. These lists of ID numbers are collected and stored locally, not synced with the cloud or anything. And the numbers also change frequently so no single one can be connected to your device or location.

If and only if a person is determined to be infected with the virus, a hospital (not the person) is authorized to activate the contact tracing app, which will send a notification to all the ID numbers stored in the person’s phone. The notification will say that they were recently near a person now diagnosed with COVID-19 — again, these are only ID numbers generated by a phone and are not connected with any personal information. As discussed earlier, the people notified can then take whatever action seems warranted.

MIT has developed a system that works in a very similar way, and which some states are reportedly beginning to promote among their residents.

Naturally even this straightforward, decentralized, and seemingly secure system has its flaws; this article at the Markup gives a good overview, and I’ve summarized them below:

  • It’s opt-in. This is a plus and a minus, of course, but means that many people may choose not to take part, limiting how comprehensive the list of recent contacts really is.
  • It’s vulnerable to malicious interference. Bluetooth isn’t particularly secure, which means there are several ways this method could be taken advantage of, should there be any attacker depraved enough to do so. Bluetooth signals could be harvested and imitated, for instance, or a phone driven through the city to “expose” it to thousands of others.
  • It could lead to false positives or negatives. In order to maintain privacy, the notifications sent to others would contain a minimum of information, leading them to wonder when and how they might have been exposed. There will be no details like “you stood next to this person in line 4 days ago for about 5 minutes” or “you jogged past this person on Broadway.” This lack of detail may lead to people panicking and running to the ER for no reason, or ignoring the alert altogether.
  • It’s pretty anonymous, but nothing is truly anonymous. Although the systems seem to work with a bare minimum of data, that data could still be used for nefarious purposes if someone got their hands on it. De-anonymizing large sets of data is practically an entire domain of study in data science now and it’s possible that these records, however anonymous they appear, could be cross-referenced with other data to out infected persons or otherwise invade one’s privacy.
  • It’s not clear what happens to the data. Will this data be given to health authorities later? Will it be sold to advertisers? Will researcher be able to access it, and how will they be vetted? Questions like these could very well be answered satisfactorily, but right now it’s a bit of a mystery.

Contact tracing is an important part of the effort to curb the spread of the coronavirus, and whatever method or platform is decided on in your area — it may be different state to state or even between cities — it is important that as many people as possible take part in order to make it as effective as possible.

There are risks, yes, but the risks are relatively minor and the benefits would appear to outweigh them by orders of magnitude. When the time comes to opt in, it is out of consideration for the community at large that one should make the decision to do so.

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Labster’s latest partnership, and what it tells us about the future of remote learning

Labster, a virtual science lab edtech company, today announced that it is partnering with California’s community college network to bring its software to 2.1 million students.

California Community Colleges claims to be the largest system of higher education in the country. The Labster partnership will provide 115 schools with 130 virtual laboratory simulations in biology, chemistry, physics and general sciences.

As COVID-19 has forced schools to shutter, edtech companies have largely responded by offering their software for free or through extended free trials. What’s new and notable about Labster’s partnership today is that it shows the first few signs of how that momentum can lead to a business deal.

Based in Copenhagen, Labster sells virtual STEM labs to institutions. The startup has raised $34.7 million in known venture capital to date, according to Crunchbase data. Labster customers include California State University, Harvard, Gwinnett Technical College, MIT, Trinity College and Stanford.

Lab equipment is expensive, and budget constraints mean that schools struggle to afford the latest technology. So Labster’s value proposition is that it is a cheaper alternative (plus, if students spill a testing vial in a virtual lab, there’s less clean up).

That pitch has slightly changed since COVID-19 forced schools across the world to shut down to limit the spread of the pandemic. Now, it’s pitching itself as the only currently viable alternative to science labs.

For many edtech companies, the surge of remote learning has been a large experiment. Often, edtech companies are giving away their product and technology for free to help as schools scramble to move operations completely digital.

For example, last week self-serve learning platforms Codecademy, Duolingo, Quizlet, Skillshare and Brainly launched a Learn From Home Club for students and teachers. Before that, Wize made its exam content and homework services available for free. And Zoom offered its video-conferencing software for free to K through 12 schools, which had mixed results.

Labster itself gave $5 million in free Labster credits to schools across the country. The list continues.  

Labster’s new deal shows edtech companies can secure new customers right now — without breaking the bank.

Labster CEO and co-founder Michael Bodekaer declined to give specifics on what the deal is worth. He did share that Labster works with schools one by one to understand how much they can, or want to, invest in teacher training and webinar support. He also confirmed that Labster does profit from the deal.

“We want to make sure that we set ourselves up for supporting our partners but still also make sure that Labster as a financial institution can pay our salaries,” Bodekaer said. “But again, heavy discounts that help us cover our costs.”

The long game for Labster, like many edtech companies, is that schools like the platform so much that these short-term stints have a better chance to lead to long-term relationships.

“We’ll be keeping these discounts as long as we possibly can sustain as a company,” he said. “It looks like initially the discount was until August and now we’re extending it until the end of the year. If that continues, we may extend it even further.”

Pricing aside, the real struggle toward implementation for Labster, and honestly any other edtech company focused on remote learning, is the digital divide. Some students do not have access to a computer for video conferencing or even internet connection for assignments.

The COVID-19 pandemic has highlighted how many households across America lack access to the technology needed for remote learning. In California, Google donated free Chromebooks and 100,000 mobile hotspots to students in need.

Bodekaer said that Labster is currently working on providing its software on mobile, and has worked with Google to make sure its product works on low-end computers like Chromebooks.

“We really want to be hardware agnostic and support any system or any platform that the students already have,” he said. “So that hardware does not become a barrier.”

While today’s partnership brings 2.1 million students access to Labster’s technology, it does not directly account for the percentage of that same group that might not have access to a computer in the first place. The true test, and perhaps success, of edtech will rely on a true hybrid of hardware and software, not one or the other.

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