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The Trump administration moves forwards with plans to ban TikTok and WeChat (although TikTok gets a partial extension), Unity goes public and we announce the winner of this year’s Startup Battlefield. This is your Daily Crunch for September 18, 2020.
The big story: US TikTok ban is imminent
The U.S. Commerce Department has released details about how it will be implementing the Trump administration’s domestic ban of TikTok and WeChat. Both apps will no longer be available (and will not be able to distribute updates) in U.S. app stores starting this Sunday, September 20.
At the same time, TikTok will be able to continue operations in the country until November 12, leaving the door open for a deal with Oracle or another partner.
TikTok, WeChat and their users aren’t the only ones unhappy about this decision. Instagram CEO Adam Mosseri said a TikTok ban would be “bad for US tech companies which have benefited greatly from the ability to operate across borders,” while the ACLU said the order “violates the First Amendment rights of people in the United States.”
The tech giants
Salesforce announces 12,000 new jobs in the next year just weeks after laying off 1,000 — Salesforce CEO and co-founder Marc Benioff announced in a tweet that the company would be hiring 4,000 new employees in the next six months, and 12,000 in the next year.
It’s game on as Unity begins trading — Unity Software, which sells a game development toolkit primarily for mobile phone app developers, raised $1.3 billion in its initial public offering.
Apple will launch its online store in India on September 23 — Apple currently relies on third-party online and offline retailers to sell its products in India.
Startups, funding and venture capital
And the winner of Startup Battlefield at Disrupt 2020 is … Canix — After five days of fierce pitching in a wholly new virtual Startup Battlefield arena, we have a winner.
Amid layoffs and allegations of fraud, the FBI has arrested NS8’s CEO following its $100+ million summer financing — Adam Rogas, the co-founder and former executive at the Las Vegas-based fraud prevention company NS8 was arrested by the Federal Bureau of Investigation.
Outschool, newly profitable, raises a $45 million Series B for virtual small group classes — Outschool’s services, which range from engineering lessons through Lego challenges to Spanish teaching by Taylor Swift songs, are now high in demand.
Advice and analysis from Extra Crunch
Are high churn rates depressing earnings for app developers? — RevenueCat’s Jacob Eiting writes that for all the hype around Apple’s 85/15 split for subscription revenue, very few developers are going to see a meaningful increase.
The stages of traditional fundraising — What you think when you hear “seed funding” and “A rounds” might be different from what investors think.
3 VCs discuss the state of SaaS investing in 2020 — Commentary from Canaan’s Maha Ibrahim, Andreessen Horowitz’s David Ulevitch and Bessemer’s Mary D’Onofrio.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
How the NSA is disrupting foreign hackers targeting COVID-19 vaccine research — “The threat landscape has changed,” the NSA’s director of cybersecurity Anne Neuberger said at Disrupt 2020.
NASA to test precision automated landing system designed for the moon and Mars on upcoming Blue Origin mission — The “Safe and Precise Landing – Integrated Capabilities Evolution” (SPLICE) system is made up of a number of lasers, an optical camera and a computer.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
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Triller had been poised to benefit from a potential TikTok ban in the U.S. Though that may not happen now, given the apparent Oracle deal, the chaos around TikTok has increased the attention given to alternative apps such as Triller. As TikTok users sought a new home — or at least hedged their bets in the event of a full ban — Triller’s app shot up the app store charts. It even became the No. 1 across 80 different countries at some point, Triller CEO Mike Lu says.
At Techcrunch Disrupt 2020, Lu today spoke of Triller’s growing potential and what makes its app unique. He also touched on Triller’s involvement in several high-profile additions, including influencers and public figures like TikTok star Charli D’Amelio and family, and even Trump himself.
Lu also noted another top TikToker, Addison Rae, will make her way to Triller this week, as well.
Though Triller has often positioned itself as a different sort of app than TikTok, the company has steadily worked to onboard the same set of influencers that made TikTok so popular. TikTok star Josh Richards recently joined Triller as both an investor and chief strategy officer, despite being only 18, for example. Other TikTok stars Noah Beck and Griffin Johnson also joined Triller earlier this summer.
And just this week, Triller snagged TikTok’s queen herself, Charli D’Amelio, whose current TikTok account has 87 million followers.
Though Triller often benefits from influencers setting up their own accounts, Lu confirmed Triller reached out to D’Amelio to establish the relationship and to learn how the company could help her create a different type of presence on the Triller app.
Deal terms were not disclosed, but Lu said that, “up until a month ago, we had never paid anyone to make a video.”
follow my triller teehee
— charli d’amelio (@charlidamelio) September 15, 2020
TikTok stars aren’t the only notable new additions. Last month, Donald Trump launched his own official Triller account, as well, to promote his political campaign.
Lu said he welcomes all the new users, including Trump.
“We’re an open platform and what we really strive for is creativity. So, we welcome anyone — regardless of whether you’re on the left side or the right side of the fence — to express yourself on the Triller platform,” he said. “Seeing some of the world leaders and also some of the biggest influencers in the world join the platform is very exciting for Triller.”
Lu also explained how Triller differentiates itself from the broader social media app lineup, noting that much of the focus of older social networks had been on allowing users to post status updates, not creative content.
Triller’s identity, Lu added, “has always been around music, around content, and around creative discovery.”
“I think that we will always shine more than your traditional status updates — which I think that the world of Facebook, Instagram and Twitter has done really well,” he said. But today’s users “really don’t post creative content to those old platforms anymore,” he continued. “They’re actually posting them on platforms like ourselves, where they’re looking for an expressive and creative outlet.”
Lu claimed Triller also benefited from older social networks’ attempt to enter the short-form video space.
When Instagram launched its TikTok competitor, Reels, Triller saw a 20% spike in usage, Lu said.
“We realized that a lot of users who were waiting for Reels…they saw what it was. And they decided they’re sticking to Triller,” he said.
On the topic of business matters, Lu declined to speak about recent reports of its supposed billion-dollar valuation, but did confirm Triller is in the process of raising new funding. He also declined to speak about the status of Triller’s reported $20 billion bid with Centricus for TikTok assets, but said the company believed it would have been a good home for TikTok creator content from an infrastructure perspective.
Not surprisingly, given Triller’s potential growth in the midst of TikTok concerns, Lu also supported the idea that TikTok could be a security threat to U.S. users.
“Given the sensitivity of the data [and] the amount of data that they collect, it does pose a national risk,” Lu said of TikTok. “This is a Chinese-owned company. The data is sitting, probably, not here in the States…” he added, seemingly refuting TikTok’s claims that its U.S. data was on U.S. servers.
“We take that stuff very seriously. We are a U.S.- based company,” he said, noting how Triller was compliant with U.S. regulations, like COPPA. “Something we actually take very strong pride in is making sure that we uphold [Triller] to the right standards that we’re used to, and as well as the privacy of our users and our citizens,” Lu said.
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TikTok may or may not be making a deal for its U.S. operations, which the U.S. government says it will shut down over national security concerns come September 20th if its Chinese ownership is not resolved. But something that the U.S. narrative has not really addressed is that the company is still growing like a weed in other markets. Today, TikTok announced that it had hit the 100 million month active user milestone in Europe, where it has officially launched in the U.K., France, Germany, Italy, Russia and Spain.
“We’ve been humbled to see how Europe has embraced TikTok during the time we’ve been here,” said Rich Waterworth, the company’s head of Europe, in a blog post today. He also added that the Creator Fund for Europe, launched earlier this month with TikTok committing to pay out €250 million over the next three years to professional “creators” trying to make money producing video content for the app, has seen more than 40% of all eligible creators enrolling.
Notably, TikTok is putting this news out less than one month after it said it had reached 100 million users in the U.S.
The news comes at an interesting time for the company in other ways too.
It points to a kind of scale in the region that stands to become even more important for TikTok’s owner ByteDance, and specifically as a counter-balance to its future prospects in its biggest two markets. ByteDance is not only facing some tough times ahead in the U.S., but it’s also weathering some significant storms in its second-largest market, India, where the app has been banned and seems currently to have no prospective buyers or champions to get it out of that predicament.
Currently in the U.S., the company seems to have three options: the U.S. might be shut down altogether; or TikTok sells the business to another company in whole or part and relinquishes making money or using U.S. creators and audience to fuel its viral video machine; or ByteDance somehow manages to take the Trump administration to court and win to keep things operating as is or with some modifications.
All three are very painful in their own ways, making the growth and potential in Europe even more notable.
TikTok has been trying to take a “business as usual” approach to things despite all of this. In recent weeks, it has launched a number of new features both for consumers and for marketers in the U.S. and elsewhere.
They have included an expansion of its marketing tools, to expand the variety and size of advertisers who use the platform to promote their brands, and new features like Stitch, which gives a way for users to sample content from other videos and then “quoting” and sharing among users on the platform, as well as adding in new ways to post more and creating more viral videos.
The numbers also underscore an early thought experiment: What would TikTok life be like without input from the U.S. market?
So far, it’s fair to say that the U.S. TikTok explosion has been a major part of the global TikTok explosion. It has produced not just the biggest audience, but the app’s biggest stars. And if you take Facebook or any other social app as a benchmark, the U.S. would stand to become TikTok’s biggest market for advertisers and revenues over time, too.
Still, it’s very notable that the 100 million milestone in Europe was put out today of all days. In the last 24 hours, we’ve seen conflicting reports about a possible buyer — Oracle — finally nearing a deal; as well as a separate report that the Chinese government is ready to shut down the whole process.
Putting out the European numbers so close timing-wise — less than three weeks apart — to posting about 100 million users in the U.S. could be ByteDance’s way of saying that it might just have the last dance after all.
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The controversial push to force Chinese tech unicorn ByteDance to divest part or all of its smash-hit TikTok social media service to a U.S.-based company could be in doubt after a report today indicated that China’s government may oppose the transaction. According to reporting by Reuters, the Chinese government may prefer TikTok to simply shutter its U.S. operations instead of allowing it to be sold to an American company.
The potential divestment of TikTok is not a regular business transaction. Instead, the deal is being demanded by the U.S. government, as President Donald Trump directs foreign and economic policymaking via executive fiat. Leaning on his own fabled business acumen, the American premier has also demanded that his government receive a portion of any final sale price. It is not clear if that concept is legal.
As the U.S. and China spar around the globe for both economic and political supremacy, the deal is a flashpoint between the countries with a muddle of companies stuck in the middle. ByteDance is in the mix, along with Microsoft, Walmart and other companies to a lesser degree, like Oracle. The Trump administration has set a mid-September timeline for a deal being struck, though as the month burns away it is not clear if that timeline could be met.
The United States is not alone in taking steps to curb Chinese influence inside its borders, as the TikTok sale comes after India banned the app, along with dozens of other China-based applications.
The deal is also under pressure from a changing regulatory environment in China, with the country’s autocratic leadership changing its export rules to possibly include elements of TikTok that could limit a transaction, and perhaps scuttle its sale.
For ByteDance, the situation is a nightmare. For lead-suitor Microsoft, the transaction is a shotgun marriage that it might not be entirely enthused about. For the Trump administration, it’s an attempt at a power play. And for China’s increasingly authoritarian government, the deal could feel like submission. So, if the deal does manage to come together it will be more surprise than eventuality.
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India continues to crack down on Chinese apps, Microsoft launches a deepfake detector and Google offers a personalized news podcast. This is your Daily Crunch for September 2, 2020.
The big story: India bans PUBG and other Chinese apps
The Indian government continues its purge of apps created by or linked to Chinese companies. It already banned 59 Chinese apps back in June, including TikTok.
India’s IT Ministry justified the decision as “a targeted move to ensure safety, security, and sovereignty of Indian cyberspace.” The apps banned today include search engine Baidu, business collaboration suite WeChat Work, cloud storage service Tencent Weiyun and the game Rise of Kingdoms. But PUBG is the most popular, with more than 40 million monthly active users.
The tech giants
Microsoft launches a deepfake detector tool ahead of US election — The Video Authenticator tool will provide a confidence score that a given piece of media has been artificially manipulated.
Google’s personalized audio news feature, Your News Update, comes to Google Podcasts — That means you’ll be able to get a personalized podcast of the latest headlines.
Twitch launches Watch Parties to all creators worldwide — Twitch is doubling down on becoming more than just a place for live-streamed gaming videos.
Startups, funding and venture capital
Indonesian insurtech startup PasarPolis gets $54 million Series B from investors including LeapFrog and SBI — The startup’s goal is to reach people who have never purchased insurance before with products like inexpensive “micro-policies” that cover broken device screens.
XRobotics is keeping the dream of pizza robots alive — XRobotics’ offering resembles an industrial 3D printer, in terms of size and form factor.
India’s online learning platform Unacademy raises $150 million at $1.45 billion valuation — India has a new startup unicorn.
Advice and analysis from Extra Crunch
The IPO parade continues as Wish files, Bumble targets an eventual debut — Alex Wilhelm looks at the latest IPO news, including Bumble planning to go public at a $6 to $8 billion valuation.
3 ways COVID-19 has affected the property investment market — COVID-19 has stirred up the long-settled dust on real estate investing.
Deep Science: Dog detectors, Mars mappers and AI-scrambling sweaters — Devin Coldewey kicks off a new feature in which he gets you all caught up on the most recent research papers and scientific discoveries.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
‘The Mandalorian’ launches its second season on Oct. 30 — The show finished shooting its second season right before the pandemic shut down production everywhere.
GM, Ford wrap up ventilator production and shift back to auto business — Both automakers said they’d completed their contracts with the Department of Health and Human Services.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
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For years, India has served as the largest open battleground for Silicon Valley and Chinese firms searching for their next billion users.
With more than 400 million WhatsApp users, India is already the largest market for the Facebook-owned service. The social juggernaut’s big blue app also reaches more than 300 million users in the country.
Google is estimated to reach just as many users in India, with YouTube closely rivaling WhatsApp for the most popular smartphone app in the country.
Several major giants from China, like Alibaba and Tencent (which a decade ago shut doors for most foreign firms), also count India as their largest overseas market. At its peak, Alibaba’s UC Web gave Google’s Chrome a run for its money. And then there is TikTok, which also identified India as its biggest market outside of China.
Though the aggressive arrival of foreign firms in India helped accelerate the growth of the local ecosystem, their capital and expertise also created a level of competition that made it too challenging for most Indian firms to claim a slice of their home market.
New Delhi’s ban on 59 Chinese apps on June 30 on the basis of cybersecurity concerns has changed a lot of this.
Indian apps that rarely made an appearance in the top 20 have now flooded the charts. But are these skyrocketing download figures translating to sustaining users?
An industry executive leaked the download, monthly active users, weekly active users and daily active users figures from one of the top mobile insight firms. In this Extra Crunch report, we take a look at the changes New Delhi’s ban has enacted on the world’s second largest smartphone market.
Scores of startups in India, including news aggregator DailyHunt, on-demand video streamer MX Player and advertising giant InMobi Group, have launched their short-video format apps in recent months.
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Turmoil continues at TikTok, Salesforce lays off 1,000 people and Warby Parker is now valued at $3 billion. This is your Daily Crunch for August 27, 2020.
The big story: TikTok’s CEO resigns
Kevin Mayer, the former Disney executive who joined TikTok as CEO just over 100 days ago, announced yesterday that he’s resigning. While Mayer was likely brought on to reassure U.S. legislators about the app’s Chinese owners, it seems he wasn’t expecting this level of conflict, with President Donald Trump signing an executive order that would ban TikTok in the U.S. unless it’s sold to another company.
“We appreciate that the political dynamics of the last few months have significantly changed what the scope of Kevin’s role would be going forward, and fully respect his decision,” a TikTok spokesperson said in a statement. “We thank him for his time at the company and wish him well.”
As for which company might acquire TikTok, Walmart has confirmed that it’s interested in teaming up with Microsoft to acquire the popular video app.
The tech giants
Salesforce confirms it’s laying off around 1,000 people in spite of monster quarter — Salesforce says it’s “reallocating resources to position the company for continued growth.”
Google Assistant app now uses your searches to make personalized recommendations — Those recommendations could include podcasts, restaurants, recipes and more.
Facebook isn’t happy about Apple’s upcoming ad tracking restrictions — The company says Audience Network revenue could decline by more than 50%.
Startups, funding and venture capital
Warby Parker, valued at $3 billion, raises $245 million in funding — The eyewear startup has launched a telehealth service for New York customers, allowing them to extend an existing glasses or contacts prescription.
Instacart faces lawsuit from DC attorney general over ‘deceptive’ service fees — The suit alleges that Instacart misled customers into thinking the 10% service fee was a tip for the delivery person.
Narrative raises $8.5 million as it launches a new data marketplace — The goal is to make buying data as easy as buying something on Amazon.
Advice and analysis from Extra Crunch
Alexa von Tobel: Eliminating risk is the key to building a startup during an economic downturn — Von Tobel says that one of the most important exercises in forming LearnVest was writing out a business plan.
To reach scale, Juni Learning is building a full-stack edtech experience — The startup’s path to $10 million in annual recurring revenue is inspired by Peloton, not Kumon.
What can growth marketers learn from lean product development? — Andrea Fryrear argues that marketers should begin creating minimum viable campaigns.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
A faster, easier, cheaper way of going public — The latest episode of Equity discusses direct listings and SPACs.
Here’s how you can get a second shot at Startup Battlefield — Your second chance comes in the form of two Wild Card entries for the upcoming Battlefield at Disrupt.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.
This is the fourth episode of the week, pushing our production calendar to the test. Happily, we’ve managed to hold it together amidst the news deluge that the last few days have brought. It was a good week for our scheduling change, with the main episode of the show coming to you on Thursday afternoon versus Friday morning.
Change is good.
But unchanging this time around was our hosting lineup, with Natasha Mascarenhas and Danny Crichton and myself yammering with Chris Gates on the mix. Here’s what we got into:
And with that, we’re all going to bed. We’re tired. No more news, thanks!
Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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There’s been a flurry of TikTok news today, and the flood doesn’t seem to be letting up.
First was the announcement that Kevin Mayer, who joined the company just a bit more than three months ago, has stepped down overnight.
Now, we are receiving a bunch of deal-related news as well. Walmart has confirmed to multiple news outlets that it has expressed interest in teaming up with Microsoft in a bid for the fast-growing social app. Meanwhile, entertainment news site The Wrap reported that Oracle has placed a bid for the company, targeting a price around $20 billion.
This is a fast-developing story, and we will have more updates to come as we receive them.
TikTok has been heavily in the news since the Trump administration threatened to ban TikTok from the U.S. market unless it sold its U.S. operations to an American company. On August 6, President Trump signed an executive order that gave TikTok’s Beijing-based parent company ByteDance 45 days to make a deal to divest the U.S. operations of its popular video-sharing app. The deadline was later extended until mid-November.
The order arrived at a time of heightened tensions between the U.S. and China, which are battling across a number of fronts outside of tech. Relations have deteriorated over issues like China’s move to assert more authority over Hong Kong with its new national security law, the detention of one million or more ethnic Uighur Muslims in China’s Xinjiang region, trade tariffs, Beijing’s military buildup in the disputed South China Sea and the COVID-19 pandemic.
Tech companies were pulled into this conflict between the two superpowers. Ahead of the proposed TikTok ban, the U.S. government also had tightened its restrictions on China’s Huawei Technologies in recent weeks.
After Trump’s signing of the executive order, TikTok immediately fought back, most recently in the form of a lawsuit against the U.S. government that challenged the legality of the TikTok ban. In the interim, several U.S. tech companies’ names emerged as having had discussions with TikTok about a deal, including Microsoft, Twitter, Google, Oracle and even Walmart. Oracle on Thursday morning was said to be nearing a deal with the White House that would comprise $10 billion of cash, $10 billion in Oracle stock and 50% of annual TikTok profit to flow back to ByteDance.
The actual risk presented by the TikTok app has remained in dispute. Trump’s executive order declared the social app, and other apps owned by Chinese companies that have entered the U.S., a threat to “the national security, foreign policy, and economy of the United States.” The concern is that the app could collect data on U.S. citizens, including location, browsing and search histories. Critics believe TikTok could serve as a conduit for the Chinese Communist Party’s propaganda and censorship arm, as well.
The TikTok app itself has become hugely popular in the U.S in recent years. Facebook CEO Mark Zuckerberg even declared TikTok’s existence one of the reasons why Facebook shouldn’t be considered a monopoly, in his testimony before the U.S. House Judiciary Committee in July.
According to data from app store intelligence firm Sensor Tower, TikTok has been download nearly 194 million times in the U.S., which is 8.2% of TikTok’s total downloads, including its Chinese version, Douyin. The U.S. also accounted for nearly $111 million, or 13%, of TikTok’s total ~$840 million in revenue.
Mobile data and analytics firm App Annie said TikTok had 52 million weekly active users in the U.S. during the week of August 9-15, 2020, and this number continues to climb. Its weekly active user count in July (July 15-25) was up 75% from just the beginning of 2020, in fact. It also became the top grossing app on the iOS App Store globally in the second quarter, due to increased consumer usage of mobile apps during the pandemic. It consistently ranks in the top five for downloads across both the U.S. iOS App Store and Google Play.
Time spent in the app has grown as well, from 5 hours, 4 minutes per month as of August 2018 to 16 hours, 20 minutes per month as of December 2019.
Despite all that success though, TikTok’s next steps remain hazy. It needs to fight its lawsuit, net approval from U.S. regulatory agencies and also continue to build trust with users in the throes of an acrimonious election season. We’ll have more developments as this story unfolds.
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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
This is Equity Monday, our weekly kickoff that tracks the latest big news, chats about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here, and myself here, and don’t forget to check out last Friday’s episode.
What was on the docket this morning? All sorts of good stuff, though the Sumo Logic S-1 did drop just after we wrapped. Here’s today’s rundown:
Whew, with YC and Palantir this week and a chat with Twilio’s CEO it’s going to be an active few days. Ready?
Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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