Read more: The 32 funniest memes offering much-needed lockdown giggles
Write comment (90 Comments)Another week in quarantine.
As the world adjusts to working from home under mandatory stay-at-home orders, hackers are keeping busy. Microsoft said this week that coronavirus-related attacks are on the rise but still make up just a fraction of the overall malicious activity. Cybersecurity companies seem to be faring mostly well — in part thanks to the uptick of attacks, but also the challenges of securing the workforce as hundreds of millions work from home.
But as coronavirus dominates the headlines, the wheels of government keep turning. Lawmakers are trying to push through a controversial bill that critics say would undermine encryption, which keeps everything from your phone to your online banking accounts safe. One startup is bracing for a showdown. Signal, the end-to-end encrypted messaging app, sounded the alarm when it warned this week that it may exit the U.S. market if Congress passes the controversial EARN IT Act.
In a blog post this week, Signal engineer Joshua Lund wrote it would ¬ be possible for a small nonprofit like Signal to continue to operate within the United States.&
Will encryption become the latest causality of this tumultuous year?
A growing number of companies and governments, from SpaceX and Google to Taiwan and Germany, have banned Zoom. Not even the U.S. Senate is taking any chances with the video-calling software, which has faced a steady stream of headlines critiquing its security practices and privacy policies. But Zoompopularity, undoubtedly sparked by the mass working from home to stem the spread of the coronavirus pandemic, seems to be weathering the storm.
Read more: Decrypted: Zoom's security results, Crowdstrike's brand-new CTO, Bugcrowd raises $30M
Write comment (90 Comments)[Editornote: Want to get this free weekly recap of TechCrunch news that startups can useby email?Subscribe here.]
While consumer tech has matured as a startup category in recent years, many investors continue to be bullish on specific trends like online gaming, voice, and the unbundling of platforms in favor of focused social networks. Thatthe key takeaway from a survey that Josh Constine and Arman Tabatabai did this week with 16 of the most active investors in key social product categories over on Extra Crunch. Herean excerpt of the responses, from Olivia Moore and Justine Moore of CRV:
&Unbundling of YouTube.& You can build a big company by targeting a vertical within YouTube with a product that has better features and more opportunities for creator monetization. Twitch is a great example of this! We&re also watching early-stage companies like Supergreat (in beauty) and Tingles (ASMR).
Voice as a social medium. Voice continues to pick up steam as a broadcast medium via podcasting, but we haven&t seen a lot in social or P2P voice yet. We think a successful platform will leverage the fact that voice content can be created and consumed while doing other things. We&re big fans of companies like TTYL and Drivetime that are making strides here!
Flexible digital identities. Gen Zers are online constantly but have different preferences across platforms/friend groups about how they want to &show up& digitally. The rise of &Finsta& accounts is one good example of this. Companies like Facemoji already help users create social content using a curated digital avatar — we&re excited to see what else founders build here!
Synchronous, shared mobile experiences. We&re bullish on apps that connect users in real time to have a shared social experience. Most apps now are &single-player,& which creates scroll fatigue. HQ Trivia was an early example more on the entertainment side, while companies like Squad help users browse the internet and watch TikTok together.
Other respondees include:Connie Chan (Andreessen Horowitz). Alexis Ohanian (Initialized Capital), Niko Bonatsos (General Catalyst),Josh Coyne (Kleiner Perkins), Wayne Hu (Signal Fire), Alexia Bonatsos (Dream Machine), Josh Elman (angel investor), Aydin Senkut (Felicis Ventures), James Currier (NFX), Pippa Lamb (Sweet Capital), Christian Dorffer (Sweet Capital), Jim Scheinman (Maven Ventures), Eva Casanova (Day One Ventures) and Dan Ciporin (Canaan).
EC subscribers please note: a second part of this survey will be running this coming week, focused specifically on social investing in the COVID-19 era.
Speaking of financing, who is actually writing checks right at this moment in time?
&I&ve seen a lot of VCs talking about being open for business,& Eniac Ventures founding partner Hadley Harris proclaimed on a fundraising-trend panel this week, &and I&ve been pretty outspoken on Twitter that I think thatlargely bullshit and sends the wrong message to entrepreneurs.&Instead, as Connie Loizos covered for us on TechCrunch, he said he didn&t have time to talk to more founders because he was so busy helping existing portfolio companies.
Not every investor agrees with that viewpoint — VC Twitter features many an anecdote about fresh companies getting funding.
Letjust hope that both things are true, because it is already rough out there.
Two debates have been raging around government support for startups. First, the big, messy new Paycheck Protection Program — designed to cover expenses for small businesses — does seem to be somewhat available to startups, based on revisions published by the Small Business Administration late last week. But things get complicated quick depending on your fundraising and cap table, as Jon Shieber covered last weekend for TechCrunch. Venture firms typically have controlling interests in a portfolio of companies that total more than 500 people, so if such a firm also has a controlling interest in your startup, you may not be eligible. Even if the VC stake is under 50%, preferred terms that came with the fundraising may your application afoul of the rules.
To help founders work through their own situations faster, startup lawyer William Carleton wrote a quick guide for Extra Crunch. Herewhere he says you need to start:
Do you have a minority investor which controls protective covenants in your charter, or which controls a board seat afforded certain veto rights on board decisions? If the answer to either fork of that question is &yes,& you almost certainly have confirmed that you will need to amend your charter and/or other governing documents before proceeding with a PPP application.
The other aspect, of course, is whether startups should be applying for this in the first place. Congress broadly intended the money to go towards small to medium sized businesses, most of whom would never be considered for venture. Shieberarticle is full of comments on that topic, if you feel like weighing in….
If you&re like me, and you&ve started companies in the Bay Area and struggled to find office space you could afford, enjoy this bit of schadenfraude as you plot your remote-first future. Because the commercial real estate industry is facing an existential crisis after many, many years of rent-seeking upon the Silicon Valley tech economy (and everyone else).
Connie explored this exploding topic with a range of startups, investors and CRE agents in a big feature for TechCrunch this week. One analyst &expects the market to come down by ‘at least 10% and probably 20% to 30%& from where commercial space in San Francisco has priced in several years, which is $88 per square foot, according to CBRE. Driving the expected drop is the 2 million square feet that will come onto the market in the city as soon as itpossible — space that companies want to get off their books.&
Itquite possible to imagine even bigger declines, given the broader hits that most any possible tenant is also taking to their budgets. Who knows, maybe this whole process will even help make the Bay Area and other wealthy metros a little more affordable again.
After lots of money and lots of struggle over the past decade, edtech is suddenly hot again thanks to the pandemic. Natasha Mascaranhas has been covering the trend recently, and dug in this week with a big investor survey on the category for Extra Crunch.
&One investor pivoted from spending a third of their time looking at edtech companies to devoting almost all their time to the sector,& she tells me. &Another, who has been bullish for years on edtech, says its business as usual for them, but that competition may arise. An ed-tech focused fund thinks the sector has been underfunded for a while, so the moment of reckoning has begun.&
Respondents include:
Across the week:
TechCrunch
Economists haven&t thrown out the models yet (but they will)
Five CEOs on their evolution in the femtech space
Equity Monday: Hunting for green shoots amid the startup data
Extra Crunch
How SaaS startups should plan for a turbulent Q2
Fintechuneven new reality has helped some startups, harmed others
Fast-changing regulations give virtual care startups a chance to seize the moment
Twilio CEO Jeff Lawson on shifting a 3,000-person company to fully remote
Amid unicorn layoffs, Boston startups reflect on the future
#EquityPod
From Alex:
We started with a look atClearbancand itsrunway extensionnot-a-loanprogram, which may help startups survive that are running low on cash. Natasha covered it for TechCrunch. Most of us know about Clearbancrevenue-based financing model; this is a twist. But itgood to see companies work to adapt their products to help other startups survive.
Next we chatted about a few rounds that Danny covered, namelySila$7.7 million investmentto help build technology that could take on the venerable and vulnerable ACH, andCadence$4 million raiseto help with securitization. Even better, per Danny, they are both blockchain-using companies. And they are useful! Blockchain, while you were looking elsewhere, has done some cool stuff at last.
Sticking to our fintech theme — the show wound up being super fintech-heavy, which was an accident — weturned to SoFihuge $1.2 billion deal to buy Galileo, a Utah-based payments company that helps power a big piece of UK-based fintech. SoFi is going into the B2B fintech world after first attacking the B2C realm; we reckon that if it can pull the move off, other financial technology companies might follow suit.
Tidying up all the fintech stories isthis round up from Natasha and Alex, working to figure out who in fintech is doing poorly, whohiding for now, and who is crushing it in the new economic reality.
Next we touched on layoffs generally,layoffs at Toast,AngelList, andnotLinkedIn— for now. Per their plans to not have plans to have layoffs. You figure that out.
And then at the end, we capped withgood news from Thriveand Index. Wedidn&t get to Shippo, sadly. Next time!
Listen to the full thing here!
Read more: Startups Weekly: Where social startups will certainly obtain funding in the future
Write comment (94 Comments)Read more: China's next plan to dominate international technology standards
Write comment (95 Comments)As workers moved from office to home and students moved to being educated online, demand for new PCs surged in Q1, but Canalys found that shipments actually dropped 8% in spite of this, due to COVID-19 related supply chain problems.
The 8% drop was the worst since 2016 when shipments dropped 12%, according to the firm. Companies were looking to get new machines into the hands of employees who normally worked on desktop machines in the office, while parents were buying machines for children suddenly going to school online.
Rushabh Doshi, research director at Canalys says that products were flying off the shelves in Q1, but the PC makers couldn&t keep up with demand as supplies were limited due to a number of factors.
&…PC makers started 2020 with a constrained supply of Intel processors, caused by a botched transition to 10nm nodes. This was exacerbated when factories in China were unable to reopen after the Lunar New Year holidays.
&The slowdown in supply met with accelerated demand, as businesses were suddenly forced to equip a newly remote workforce, placing urgent orders for tens of thousands of PCs. Children, too, needed their own PCs, as schools closed and lessons went online,& Doshi explained in a statement.
Lenovo and HP owned the lionshare of the PC market in Q1 with 23.9% and 21.8% share respectively. Dell was in third with 19.6%. Apple was well behind in fourth place with just 6% of worldwide market share.
Only Dell projected positive growth with a modest 1.1% annual rate. All others were projected to be negative with Apple projecting the sharpest drop at -21%.
The good news is that from a revenue perspective, at least for the short term, these companies could command higher prices due to high demand and low supply, but overall the year looks bleak for PC makers, as Canalys predicts the rest of the year will see a further drop in sales as companies cut back on purchases, and consumers also likely limit purchases with so much economic uncertainty and demand satisfied for the short term.
Read more: Canalys finds PC demand surged in Q1, but shipments lagged due to supply issues
Write comment (96 Comments)Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.
The app industry is as hot as ever, with arecord 204 billion downloads in 2019and $120 billion in consumer spending in 2019, according to App Annie&State of Mobile& annual report. People are now spending 3 hours and 40 minutes per day using apps, rivaling TV. Apps aren&t just a way to pass idle hours — they&re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.
In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.
This week we&re continuing to look at how the coronavirus outbreak is impacting the world of mobile applications, including Apple and Googleplans to team up on a contact tracing platform and other COVID-19 apps worldwide. We&re also looking at how WhatsApp is fighting fake news, and how home quarantines are impacting online grocery and dating applications. In non-COVID-19 news, we look at Quibi debut, Facebooknew app for couples and a possible iOS version of Android&Slices,& among other things.
Apple and Google announced on Friday a plan to join forces to create a decentralized tracing tool to help people determine if they&ve been exposed to someone with COVID-19. The first phase of the project is an API that public health agencies can integrate into their own apps. This will be followed by a system-level contact tracing system that works across iOS and Android and is opt-in. The system will involve transmitting an anonymous ID over Bluetooth. The servers will relay your last 14 days of rotating IDs to other devices that look for a match based on time spent and distance between two devices. If a match is found, you&re notified so you can get tested and self-quarantine.
The APIs will be available in May, while the Bluetooth-based system will be released in the months ahead.