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Europe’s top court slaps down ‘zero rating’ again
Europe’s top court has dealt another blow to “zero rating” — ruling for a second time that the controversial carrier practice goes against the European Union’s rules on open internet access.
“Zero rating” refers to commercial offers that can be made by mobile network operators to entice customers by excluding the data consumption of certain (often popular) apps from a user’s tariff.
The practice is controversial because it goes against the “level playing field” principle of the open internet (aka “net neutrality”).
EU legislators passed the bloc’s first set of open internet/net neutrality rules back in 2015 — with the law coming into application in 2016 — but critics warned at the time over vague provisions in the regulation which they suggested could be used by carriers to undermine the core fairness principle of treating all internet traffic the same.
Some regional telcos have continued to put out zero rating offers — which has led to a number of challenges to test the robustness of the law. But the viability of zero rating within the EU must now be in doubt, given the double slap-down by the CJEU.
In its first major decision last year — relating to a challenge against Telenor in Hungary — the court found that commercial use of zero rating was liable to limit the exercise of end users’ rights within the meaning of the regulation.
Its ruling today — which relates to a challenge against zero rating by Vodafone and Telekom Deutschland in Germany (this time with a roaming component) — comes to what looks like an even clearer conclusion, with the court giving the practice very short shrift indeed.
“By today’s judgments, the Court of Justice notes that a ‘zero tariff’ option, such as those at issue in the main proceedings, draws a distinction within internet traffic, on the basis of commercial considerations, by not counting towards the basic package traffic to partner applications. Such a commercial practice is contrary to the general obligation of equal treatment of traffic, without discrimination or interference, as required by the regulation on open internet access,” it writes in a (notably brief) press release summarizing the judgement.
“Since those limitations on bandwidth, tethering or on use when roaming apply only on account of the activation of the ‘zero tariff’ option, which is contrary to the regulation on open internet access, they are also incompatible with EU law,” it added.
We’ve reached out to Vodafone and Telekom Deutschland for comment on the ruling.
In a statement welcoming the CJEU’s decision, the European consumer protection association BEUC’s senior digital policy officer, Maryant Fernández Pérez, subbed the ruling “very positive news for consumers and those who want the internet to stay open to all”.
“When companies like Vodafone use these ‘zero tariff’ rates, they essentially lock-in consumers and limit what the Internet can offer to them. Zero-rating is detrimental to consumer choice, competition, innovation, media diversity and freedom of information,” she added.
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Peak raises $75M for a platform that helps non-tech companies build AI applications
As artificial intelligence continues to weave its way into more enterprise applications, a startup that has built a platform to help businesses, especially non-tech organizations, build more customized AI decision-making tools for themselves has picked up some significant growth funding. Peak AI, a startup out of Manchester, England, that has built a “decision intelligence” platform, has raised $75 million, money that it will be using to continue building out its platform, expand into new markets and hire some 200 new people in the coming quarters.
The Series C is bringing a very big name investor on board. It is being led by SoftBank Vision Fund 2, with previous backers Oxx, MMC Ventures, Praetura Ventures and Arete also participating. That group participated in Peak’s Series B of $21 million, which only closed in February of this year. The company has now raised $119 million; it is not disclosing its valuation.
(This latest funding round was rumored last week, although it was not confirmed at the time and the total amount was not accurate.)
Richard Potter, Peak’s CEO, said the rapid follow-on in funding was based on inbound interest, in part because of how the company has been doing.
Peak’s so-called Decision Intelligence platform is used by retailers, brands, manufacturers and others to help monitor stock levels and build personalized customer experiences, as well as other processes that can stand to have some degree of automation to work more efficiently, but also require sophistication to be able to measure different factors against each other to provide more intelligent insights. Its current customer list includes the likes of Nike, Pepsico, KFC, Molson Coors, Marshalls, Asos and Speedy, and in the last 12 months revenues have more than doubled.
The opportunity that Peak is addressing goes a little like this: AI has become a cornerstone of many of the most advanced IT applications and business processes of our time, but if you are an organization — and specifically one not built around technology — your access to AI and how you might use it will come by way of applications built by others, not necessarily tailored to you, and the costs of building more tailored solutions can often be prohibitively high. Peak claims that those using its tools have seen revenues on average rise 5%, return on ad spend double, supply chain costs reduce by 5% and inventory holdings (a big cost for companies) reduce by 12%.
Peak’s platform, I should point out, is not exactly a “no-code” approach to solving that problem — not yet at least: It’s aimed at data scientists and engineers at those organizations so that they can easily identify different processes in their operations where they might benefit from AI tools, and to build those out with relatively little heavy lifting.
There have also been different market factors that have played a role. COVID-19, for example, and the boost that we have seen both in increasing “digital transformation” in businesses and making e-commerce processes more efficient to cater to rising consumer demand and more strained supply chains have all led to businesses being more open and keen to invest in more tools to improve their automation intelligently.
This, combined with Peak AI’s growing revenues, is part of what interested SoftBank. The investor has been long on AI for a while; but it also has been building out a section of its investment portfolio to provide strategic services to the kinds of businesses in which it invests.
Those include e-commerce and other consumer-facing businesses, which make up one of the main segments of Peak’s customer base.
Notably, one of its recent investments specifically in that space was made earlier this year, also in Manchester, when it took a $730 million stake (with potentially $1.6 billion more down the line) in The Hut Group, which builds software for and runs D2C businesses.
“In Peak we have a partner with a shared vision that the future enterprise will run on a centralized AI software platform capable of optimizing entire value chains,” Max Ohrstrand, senior investor for SoftBank Investment Advisers, said in a statement. “To realize this a new breed of platform is needed and we’re hugely impressed with what Richard and the excellent team have built at Peak. We’re delighted to be supporting them on their way to becoming the category-defining, global leader in Decision Intelligence.”
It’s not clear that SoftBank’s two Manchester interests will be working together, but it’s an interesting synergy if they do, and most of all highlights one of the firm’s areas of interest.
Longer term, it will be interesting to see how and if Peak evolves to extend its platform to a wider set of users at the organizations that are already its customers.
Potter said he believes that “those with technical predispositions” will be the most likely users of its products in the near and medium term. You might assume that would cut out, for example, marketing managers, although the general trend in a lot of software tools has precisely been to build versions of the same tools used by data scientists for these less technical people to engage in the process of building what it is that they want to use.
“I do think it’s important to democratize the ability to stream data pipelines, and to be able to optimize those to work in applications,” Potter added.
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How Reliance Jio Platforms became India’s biggest telecom network
It’s raised $5.7 billion from Facebook. It’s taken $1.5 billion from KKR, another $1.5 billion from Vista Equity Partners, $1.5 billion from Saudi Arabia’s Public Investment Fund, $1.35 billion from Silver Lake, $1.2 billion from Mubadala, $870 million from General Atlantic, $750 million from Abu Dhabi Investment Authority, $600 million from TPG, and $250 million from L Catterton.
And it’s done all that in just nine weeks.
India’s Reliance Jio Platforms is the world’s most ambitious tech company. Founder Mukesh Ambani has made it his dream to provide every Indian with access to affordable and comprehensive telecommunications services, and Jio has so far proven successful, attracting nearly 400 million subscribers in just a few years.
The unparalleled growth of Reliance Jio Platforms, a subsidiary of India’s most-valued firm (Reliance Industries), has shocked rivals and spooked foreign tech companies such as Google and Amazon, both of which are now reportedly eyeing a slice of one of the world’s largest telecom markets.
What can we learn from Reliance Jio Platforms’s growth? What does the future hold for Jio and for India’s tech startup ecosystem in general?
Through a series of reports, Extra Crunch is going to investigate those questions. We previously profiled Mukesh Ambani himself, and in today’s installment, we are going to look at how Reliance Jio went from a telco upstart to the dominant tech company in four years.
The birth of a new empire
Months after India’s richest man, Mukesh Ambani, launched his telecom network Reliance Jio, Sunil Mittal of Airtel — his chief rival — was struggling in public to contain his frustration.
That Ambani would try to win over subscribers by offering them free voice calling wasn’t a surprise, Mittal said at the World Economic Forum in January 2017. But making voice calls and the bulk of 4G mobile data completely free for seven months clearly “meant that they have not gotten the attention they wanted,” he said, hopeful the local regulator would soon intervene.
This wasn’t the first time Ambani and Mittal were competing directly against each other: in 2002, Ambani had launched a telecommunications company and sought to win the market by distributing free handsets.
In India, carrier lock-in is not popular as people prefer pay-as-you-go voice and data plans. But luckily for Mittal in their first go around, Ambani’s journey was cut short due to a family feud with his brother — read more about that here.
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SoftBank’s Q1 2020 earnings presentation mixes comedy and drama
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re digging into SoftBank’s latest earnings slides. Not only do they contain a wealth of updates and other useful information, but some of them are gosh-darn-freaking hilarious. We all deserve a bit of levity after the last few months.
The visual elements we quote below come from SoftBank’s reporting of its own results from its fiscal year ending March 31, 2020. Much of the deck is made up of financial reporting tables and other bits of stuff you don’t want to read. We’ve cut all that out and left the fun parts.
Before we dive in, please note that we are largely giggling at some slide design choices and only somewhat at the results themselves. We are certainly not making fun of people who’ve been impacted by layoffs and other such things that these slides’ results encompass.
But we are going to have some fun with how SoftBank describes how it views the world, because how can we not? Let’s begin.
Data, slides
TechCrunch has a number of folks parsing SoftBank’s deck this morning, looking to do serious work. That’s not our goal. Sure, this post will tell you things like the fact that there are 88 companies in the Vision Fund portfolio, and that when it comes to unrealized gains and losses, the portfolio has seen $13.4 billion in gains and $14.2 billion in losses. $4.9 billion of gains have been realized, mind you, while just $200 million of losses have had the same honor.
And this post will tell you that the “net blended [internal rate of return] for SoftBank Vision Fund investors is -1%.”
Hell, you probably also want to know that Uber was detailed as Vision Fund’s worst-performing public company, generating a $1.46 billion loss for the group. In contrast, Guardant Health is good for a $1.67 billion gain, while 2019 IPO Slack has been good for $605 million in profits. Those were the two best companies in the Vision Fund’s public portfolio.
But what you really want is the good stuff. So, shared by slide number, here you go:
Slide 11:
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SirionLabs raises $44M to scale its contract management software
SirionLabs, a startup that provides contract management software to enterprises, has raised $44 million in a new financing round as it looks to expand and handle surge in demand from clients.
Tiger Global and Avatar Growth Capital led the Seattle-headquartered startup’s Series C round. The eight-year-old startup, which was founded in India, has raised $66 million to date. The new round values the startup at about $250 million. Indian VC fund Avatar has long invested in SaaS startups in India, an area that Tiger Global has also made serious bets on in recent quarters.
Enterprises broadly handle two kinds of contracts, one when they are buying things from a supplier for which they use a procurement contract, and the other when they are selling things to customers, when a sales contract comes into play.
A significant number of companies today handle these contracts manually with different teams within an organization often dealing with the same entity, which leads to discrepancies in their promises. Teams work in silos and often don’t know the terms others in the organization have already agreed upon.
That’s where SirionLabs comes into the picture. “We use artificial intelligence and natural language processing to connect the dots between contracts and what happens after the contract has been signed,” explained Ajay Agrawal, cofounder, chairman and chief executive of the startup, in an interview with TechCrunch.
“For us, it’s not just creating a contract, but also realizing the promises that have been made in those contracts,” he said. SirionLabs also audits the invoice of suppliers, which has enabled its customers to save a significant amount of money.
SirionLabs today hosts contracts in over 40 languages for more than 200 of the world’s largest companies including Credit Suisse, Vodafone, EY, Unilever, Abbvie, BP, and Fujitsu.
Agrawal said the startup has seen a 4X growth in the number of customers it has signed up in the last 18 months. Part of the new capital would go into handling their demand. He said the coronavirus crises has resulted in many companies becoming more cautious about what they promise in their contracts.
The startup, which just opened a technology center in Seattle, also plans to open an AI laboratory in the Washington state to fuel technology innovation and grow sales.
It has also hired several industry veterans including the appointment of Amol Joshi as chief revenue officer, Anu Engineer as chief technology officer, Mahesh Unnikrishnan as chief product officer, and Vijay Khera, who will serve as chief customer officer.
Vishal Bakshi, founder and managing partner at Avatar Growth Capital, said he expects SirionLabs, which competes with Apttus and Icertis among other firms, to “capture massive network effects as the platform continues to scale.”
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Streaming service Hooq shuts down, ends partnerships with Disney’s Hotstar, Grab and others
Hooq, a five-year-old on-demand video streaming service that aimed to become “Netflix for Southeast Asia,” has shut down weeks after filing for liquidation and terminated its partnerships with Disney’s Hotstar, ride-hailing giant Grab, and Indonesia’s VideoMax.
Hooq Digital, a joint venture among Singapore telecom group Singtel (majority owner), Sony Pictures, and Warner Bros Entertainment, discontinued the service on Thursday. It had amassed over 80 million subscribers in nearly half of the dozen markets in Asia.
“For the past 5 years, we gave you unbelievable thrills, heartrending drama, roaring laughs, awesome action, and more. Our goal was to bring you the best entertainment from here to Hollywood. Our hearts are full of gratitude for all of you who shared the journey with us,” it says on its website.
Hooq publicly disclosed that it had raised about $95 million, but the sum was likely higher. News outlet The Ken analyzed the regulatory filings last month to report that Hooq had raised $127.2 million, and its losses in the financial year 2019 had ballooned to $220, suggesting that it had received more capital.
The streaming service said last month that it could not receive new funds from new or existing investors.
Homepage of Hooq
The service counted India, where it entered into a partnership with Disney’s Hotstar in 2018 and telecom operators Airtel and Vodafone, as its biggest market. The company also maintained a partnership with ride-hailing giant Grab to supply content in its cab, and VideoMAX in Indonesia.
Hooq brought dozens of D.C. universe titles including “Arrow,” “The Flash,” “Wonder Woman” and other popular TV series such as “The Big Bang Theory” to its partners. In India, users began noticing last week that those titles were disappearing from Hotstar.
A spokesperson of Hooq told TechCrunch today that its tie-ups with all its partners including Hotstar have closed. A Hotstar spokesperson did not respond to a request for comment.
Mobile operator Singtel first unveiled Hooq’s liquidation in an exchange filing last month. The Ken reported that the filing left hundreds of employees at Hooq stunned who thought the firm was doing fine financially. Nearly every employee at Hooq has been let go, with select few offered a job at Singtel, according to The Ken.
In an interview with Slator earlier this year, Yvan Hennecart, Head of Localization at HOOQ, said that the company was working to expand its catalog with local content and add 100 original titles in 2020.
“Our focus is mostly on localization of entertainment content; whether it is subtitling or dubbing, we are constantly looking to bring more content to our viewers faster. My role also expands to localization of our platform and any type of collateral information that helps create a unique experience for our users,” he told the outlet.
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Microsoft launches Edge Zones for Azure
Microsoft today announced the launch of Azure Edge Zones, which will allow Azure users to bring their applications to the company’s edge locations. The focus here is on enabling real-time low-latency 5G applications. The company is also launching a version of Edge Zones with carriers (starting with AT&T) in preview, which connects these zones directly to 5G networks in the carrier’s data center. And to round it all out, Azure is also getting Private Edge Zones for those who are deploying private 5G/LTE networks in combination with Azure Stack Edge.
In addition to partnering with carriers like AT&T, as well as Rogers, SK Telecom, Telstra and Vodafone, Microsoft is also launching new standalone Azure Edge Zones in more than 10 cities over the next year, starting with LA, Miami and New York later this summer.
“For the last few decades, carriers and operators have pioneered how we connect with each other, laying the foundation for telephony and cellular,” the company notes in today’s announcement. “With cloud and 5G, there are new possibilities by combining cloud services, like compute and AI with high bandwidth and ultra-low latency. Microsoft is partnering with them bring 5G to life in immersive applications built by organization and developers.”
This may all sound a bit familiar, and that’s because only a few weeks ago, Google launched Anthos for Telecom and its Global Mobile Edge Cloud, which at first glance offers a similar promise of bringing applications close to that cloud’s edge locations for 5G and telco usage. Microsoft argues that its offering is more comprehensive in terms of its partner ecosystem and geographic availability. But it’s clear that 5G is a trend all of the large cloud providers are trying to tap into. Microsoft’s own acquisition of 5G cloud specialist Affirmed Networks is yet another example of how it is looking to position itself in this market.
As far as the details of the various Edge Zone versions go, the focus of Edge Zones is mostly on IoT and AI workloads, while Microsoft notes that Edge Zones with Carriers is more about low-latency online gaming, remote meetings and events, as well as smart infrastructure. Private Edge Zones, which combine private carrier networks with Azure Stack Edge, is something only a small number of large enterprise companies would likely to look into, given the cost and complexity of rolling out a system like this.
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Microsoft acquires 5G specialist Affirmed Networks
Microsoft today announced that it has acquired Affirmed Networks, a company that specializes in fully virtualized, cloud-native networking solutions for telecom operators.
With its focus on 5G and edge computing, Affirmed looks like the ideal acquisition target for a large cloud provider looking to get deeper into the telco business. According to Crunchbase, Affirmed raised a total of $155 million before this acquisition, and the company’s more than 100 enterprise customers include the likes of AT&T, Orange, Vodafone, Telus, Turkcell and STC.
“As we’ve seen with other technology transformations, we believe that software can play an important role in helping advance 5G and deliver new network solutions that offer step-change advancements in speed, cost and security,” writes Yousef Khalidi, Microsoft’s corporate vice president for Azure Networking. “There is a significant opportunity for both incumbents and new players across the industry to innovate, collaborate and create new markets, serving the networking and edge computing needs of our mutual customers.”
With its customer base, Affirmed gives Microsoft another entry point into the telecom industry. Previously, the telcos would often build their own data centers and stuff it with costly proprietary hardware (and the software to manage it). But thanks to today’s virtualization technologies, the large cloud platforms are now able to offer the same capabilities and reliability without any of the cost. And unsurprisingly, a new technology like 5G, with its promise of new and expanded markets, makes for a good moment to push forward with these new technologies.
Google recently made some moves in this direction with its Anthos for Telecom and Global Mobile Edge Cloud, too. Chances are we will see all of the large cloud providers continue to go after this market in the coming months.
In a somewhat odd move, only yesterday Affirmed announced a new CEO and president, Anand Krishnamurthy. It’s not often that we see these kinds of executive moves hours before a company announces its acquisition.
The announcement doesn’t feature a single hint at today’s news and includes all of the usual cliches we’ve come to expect from a press release that announces a new CEO. “We are thankful to Hassan for his vision and commitment in guiding the company through this extraordinary journey and positioning us for tremendous success in the future,” Krishnamurthy wrote at the time. “It is my honor to lead Affirmed as we continue to drive this incredible transformation in our industry.”
We asked Affirmed for some more background about this and will update this post if we hear more. Update: an Affirmed spokesperson told us that this was “part of a succession plan that had been determined previously. So it was not related [to] any specific event.”
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Kenya turns to M-Pesa mobile-money to stem the spread of COVID-19
Kenya’s largest teleco, Safaricom, will implement a fee-waiver on East Africa’s leading mobile-money product, M-Pesa, to reduce the physical exchange of currency in response to the COVID-19 outbreak.
The company announced that all person-to-person (P2P) transactions under 1,000 Kenyan Schillings (≈ $10) would be free starting Tuesday for the next 90 days.
The move came after Safaricom met with the country’s Central Bank and per a directive from Kenya’s President Uhuru Kenyatta “to explore ways of deepening mobile-money usage to reduce risk of spreading the virus through physical handling of cash,” according to a release provided to TechCrunch from Safaricom.
To encourage the use of digital payments over cash, the East African telecom will also allow SMEs to increase their daily M-Pesa transaction limits from 70,000 Kenyan Schillings to 150,000 (≈ $700 to $1,500).
The measures represent the ability of the Kenyan government to use digital finance as a lever to influence social distancing and P2P transactions in an infectious health crisis.
M-Pesa has 20.5 million customers across a network of 176,000 agents and generates around one-fourth ($531 million) of Safaricom’s ≈ $2.2 billion annual revenues (2018). The company has held nearly 75% of the mobile-money market share in Kenya for nearly a decade and the country has the highest mobile-money usage rates in Africa.
In some respects, having all that output on one platform represents systemic risks to Kenya’s economy. But in the case of a global health pandemic spread by human contact, the dominance of mobile money in the country provides a policy tool to encourage digital versus physical contact on a wide scale through financial transactions.
Kenya has only three cases of COVID-19 (aka the coronavirus), according to Worldometer, but the country is taking cautionary measures. President Uhuru cancelled two foreign meetings due to the virus, the University of Nairobi shut down classes and a number of companies in the country are encouraging workers to telecommute, according to local sources and press reporting.
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MoEngage lands $25M for its mobile-first customer engagement platform
MoEngage, a San Francisco and Bangalore-based startup that helps firms better understand their customers and improve their engagement, has raised $25 million in a new financing round as it looks to grow its network in North America and Europe.
The Series C was led by Eight Roads Ventures . F-Prime Capital, Matrix Partners India and Ventureast also participated in the round. The six-year-old startup, which is an Alchemist alum, has raised about $40 million to date.
MoEngage offers a product that allows clients to gain deeper insights into the way their customers or users are engaging with their apps and websites. “We can, for instance, tell at what time a customer is using the app,” said Raviteja Dodda, founder and chief executive of MoEngage, in an interview with TechCrunch.
These insights, all displayed on one dashboard, could be very useful for firms to retain their existing customers or find optimized ways to attempt to sell more to them.
“Based on your understanding about the customer, you can send them personalized notifications. Say you’re using a ride-hailing app. The firm would now know how often you use their app and at what time you tend to avail their service. Based on these learnings, they can offer you deals or reminders that could help them improve their conversion rate,” he said.
MoEngage today works with a number of major firms in North America, Europe and Asia. Some of its clients include Deutsche Telekom, CIMB Bank, Travelodge, Samsung, McAfee, Vodafone, retail chain Future Retail, ride-hailing service Ola, budget-hotel operator OYO, grocery delivery startup Bigbasket and music streaming service Gaana.
In total, Dodda said his startup has amassed “hundreds of clients” in over 35 countries and is serving more than 400 million active users for them each month.
“MoEngage, with its differentiated offering, scalable platform and a customer-first approach, will play an important role in enabling us to deliver contextual and relevant communications to our customers and drive higher customer lifetime value,” said Arun Srinivas, chief operating officer at Indian ride-hailing startup Ola, in a statement.
MoEngage, which competes with a handful of startups including India-based Clevertap, will infuse the fresh capital to find more customers in North America and Europe, and scale its product operations, said Dodda.
“What differentiates MoEngage from other engagement platforms is the combination of their ever-evolving AI-enabled customer journey capabilities, industry-best channel reachability and top-notch customer support. We are thrilled to partner with Raviteja and his team as they look to expand globally,” said Shweta Bhatia, Partner at Eight Roads Ventures.
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