The Justice Department has filed its antitrust lawsuit against Google

The Justice Department is holding an antitrust announcement later today, apparently confirming a report this morning from The Wall Street Journal that it will publish its long-awaited antitrust lawsuit against Google. Signing the suit alongside the DoJ are 11 states, all with Republican Attorneys General: Texas, Arkansas; Florida; Georgia; Indiana; Kentucky; Louisiana; Michigan; Missouri; Montana; and South Carolina.

The DoJ said it that Jeffrey A. Rosen, deputy Attorney General, will be making a formal speech at 9:45am Eastern today.

In the suit, the Justice Department is expected to argue that Google used anticompetitive practices to safeguard its monopoly position as the dominant force in search and search-advertising, which sit at the foundation of the company’s extensive advertising, data mining, video distribution, and information services conglomerate.

It would be the first significant legal challenge that Google has faced from U.S. regulators despite years of investigations into the company’s practices.

A 2012 attempt to bring the company to the courts to answer for anti-competitive practices was ultimately scuttled because regulators at the time weren’t sure they could make the case stick. Since that time Alphabet’s value has skyrocketed to reach over $1 trillion (as of today’s share price).

Alphabet, Google’s parent company, holds a commanding lead in both search and video. The company dominates the search market — with roughly 90% of the world’s internet searches conducted on its platform — and roughly three quarters of American adults turn to YouTube for video, as the Journal reported.

We have reached out to Google for a comment and will update this as we learn more.

In the lawsuit, the Department of Justice will say that Alphabet’s Google subsidiary uses a web of exclusionary business agreements to shut out competitors. The billions of dollars that the search giant collects wind up paying mobile phone companies, carriers and browsers to make the Google search engine a preset default. That blocks competitors from being able to access the kinds of queries and traffic they’d need to refine their own search engine.

It will be those relationships — alongside Google’s insistence that its search engine come pre-loaded (and un-deletable) on phones using the Android operating system and that other search engines specifically not be pre-loaded — that form part of the government’s case, according to Justice Department officials cited by the Journal.

While we are waiting for the DoJ press call to start, some are already putting their (possibly predictable) thoughts out there. This from the co-founder and CEO of DuckDuckGo:

We’re pleased the DOJ has taken this key step in holding Google accountable for the ways it has blocked competition, locked people into using its products, and achieved a market position so dominant they refuse to even talk about it out loud. https://t.co/1rPm1ch9OG

— Gabriel Weinberg (@yegg) October 20, 2020

The antitrust suit comes on the heels of a number of other regulatory actions involving Google, which is not only the dominant online search provider, but also a leader in online advertising and in mobile technology by way of Android, as well as a strong player in a web of other interconnected services like mapping, online productivity software, cloud computing and more.

MOUNTAIN VIEW, UNITED STATES – 2020/02/23: American multinational technology company Google logo seen at Google campus. (Photo by Alex Tai/SOPA Images/LightRocket via Getty Images)

A report last Friday in Politico noted that Democrat Attorneys General would not be signing the suit. That report said those AGs have instead been working on a bipartisan, state-led approach covering a wider number of issues beyond search — the idea being also that more suits gives government potentially a stronger bargaining position against the tech giant.

A third suit is being put together by the state of Texas, although that has faced its own issues.

While a number of tech leviathans are facing increasing scrutiny from Washington, with the US now just two weeks from Election Day, it’s unlikely that we are going to see many developments around this and other cases before then. And in the case of this specific Google suit, in the event that Trump doesn’t get re-elected, there will also be a larger personnel shift at the DoJ that could also change the profile and timescale of the case.

In any event, fighting these regulatory cases is always a long, drawn-out process. In Europe, Google has faced a series of fines over antitrust violations stretching back several years, including a $2.7 billion fine over Google shopping; a $5 billion fine over Android dominance; and a $1.7 billion fine over search ad brokering. While Google slowly works through appeals, there are also more cases ongoing against the company in Europe and elsewhere.

Google is not the only one catching the attention of Washington. Earlier in October, the House Judiciary Committee released a report of more than 400 pages in which it outlined how tech giants Apple, Amazon, Alphabet (Google’s parent company) and Facebook were abusing their power, covering everything from the areas in which they dominate, through to suggestions for how to fix the situation (including curtailing their acquisitions strategy).

Steps from the House’s antitrust report are too little, too late when it comes to big tech

That seemed mainly to be an exercise in laying out the state of things, which could in turn be used to inform further actions, although in itself, unlike the DoJ suit, the House report lacks teeth in terms of enforcement or remedies.

from Amazon – TechCrunch https://techcrunch.com/2020/10/20/justice-department-will-reportedly-file-its-antitrust-lawsuit-against-google-today/

Nuvemshop, a Latin American answer to Shopify, raises $30 million

After several failed startup attempts and nine years spent building Nuvemshop into Latin America’s answer to Shopify, the four co-founders of the company have managed to raise $30 million in venture capital funding as they look to expand their business.

The new funding came from previous investor Kaszek Ventures and new lead investor Qualcomm, with participation from FJ Labs, IGNIA, Elevar Equity and Kevin Efrusy, from the longtime Accel Partners investor’s personal wealth.

It’s been a long road since Santiago Sosa, Alejandro Vazquez, Martin Palombo, and Alejandro Alfonso first began working together in Buenos Aires The quartet started off on their entrepreneurial journey trying to develop a marketplace software product for Latin America, but when that didn’t take off, they turned their attention to a more basic problem — how to get small and medium-sized businesses selling online.

Now the company boasts 65,000 businesses that use its platform providing everything from billing and payment processing to logistics and shipping solutions transacting over $100 million per month in sales. Operating as Nuvemshop in Brazil and Tiendanube in the rest of the region, the company has offices in São Paulo, Buenos Aires, and Mexico City with plans to expand into Colombia and Peru in 2021.

Nuvemshop began as more of a consulting business and evolved into the suite of software tools that have managed to attract attention from investors like Qualcomm Ventures.

“Nuvemshop’s platform accelerates a company’s digital transformation and has enabled thousands of SMBs across Latin America to go digital by tapping into the company’s one-stop shop of seamlessly integrated solutions,” said Alexandre Villela, senior director of Qualcomm Technologies Inc. and managing director at Qualcomm Ventures Latin America. “We share their strong engineering focus and look forward to helping them scale their business with our investment.” 

Nuvemshop raised its first money in 2015 from Kaszek Ventures (a $5 million investment) and as the business picked up steam raised $7 million more from local investors.

It makes money by charging a subscription fee that begins at $3 per month and a transaction fee that decreases as customers buy more expensive subscription packages.

Now that the company has an established footprint in the region, it’s going to focus on three new areas of growth, according to chief executive, Santiago Sosa.

Nuvemshop chief executive, Santiago Sosa. Image credit: Nuvemshop

The company plans to launch a payment processing and logistics gateway of its own. That marketplace will give customers access to more robust shipping solutions thanks to the power of bundling lower demand into a single delivery and ordering system. Nuvemshop also pitches its customers an app store for connecting them to new developer tools.

Finally, the company intends to offer a broader array of financial services. It already offers payment processing, but will look to develop additional services around lending based on revenue.

Like Shopify, Nuvemshop provides a necessary ballast to the big e-commerce aggregation sites like MercadoLibre and Amazon. “Everything they do they try to optimize for the buyer,” Sosa said. That places incredible pricing pressure on retailers and Nuvemshop offers a direct sales alternative, with lower fees, according to Sosa.

The pent up demand that Sosa sees, is fairly astonishing.

“People are talking about e-commerce penetration going from [roughly] 10% over total retail sales to [roughly] 20%, as it has happened in other countries. We see it differently, as we envision a massive disruption around commerce in the next 15 years, and are pretty confident that [roughly] 90% of retail will be somehow tech-enabled,” said Sosa, in a statement. 

 

from Amazon – TechCrunch https://techcrunch.com/2020/10/13/nuvemshop-a-latin-american-answer-to-shopify-raises-30-million/

Kayhan Space wants to be the air traffic control service for satellites in space

Kayhan Space, the Boulder, Colo. and Atlanta-based company launched from Techstars virtual space-focused accelerator, wants nothing more than to be the air traffic control service for satellites in space.

Founded by two childhood friends, Araz Feyzi and Siamak Hesar, who grew up in Iran and immigrated to the U.S. for college, Kayhan is tackling one of the toughest problems that the space industry will confront in the coming years — how to manage the exponentially increasing traffic that will soon crowd outer space.

There are currently around 8,000 satellites in orbit around the earth, but over the next several years, Amazon will launch 3,236 satellites for its Kuiper Network, while SpaceX filed paperwork last year to launch up to 30,000 satellites. That’s… a lot of metal flying around.

And somebody needs to make sure that those satellites don’t crash into each other, because space junk has a whole other set of problems.

SpaceX files paperwork to launch up to 30,000 more Starlink global internet satellites

In some ways, Feyzi and Hesar are a perfect pair to solve the problem.

Hesar, the company’s co-founder and chief executive, has spent years studying space travel, receiving a master’s degree from the University of Southern California in aeronautics, and a doctorate in astronautical engineering from the University of Colorado, Boulder. He interned at NASA’s Jet Propulsion Laboratory, and spent three years at Colorado-based satellite situational awareness and systems control technology developers like SpaceNav and Blue Canyon Technologies.

Meanwhile Feyzi is a serial entrepreneur who co-founded a company in the Atlanta area called Syfer, which developed technologies to secure internet-enabled consumer devices. Using Hesar’s proprietary algorithms based on research from his doctoral days at UC Boulder and Feyzi’s expertise in cloud computing, the company has developed a system that can predict and alert the operators of satellite networks when there’s the potential for a collision and suggest alternative paths to avoid an accident.

It’s a problem that the two founders say can’t be solved by automation on satellites alone, thanks to the complexity and multidimensional nature of the work. “Imagine that a US commercial satellite is on a collision course with a Russian military satellite,” Feyzi said. “Who needs to maneuver? We make sure the satellite operator has all the information available to them [including] here’s what we know about the collision about to happen here and here are the recommendations and options to avoid it.”

Satellites today aren’t equipped to visualize their surroundings and autonomy won’t solve a problem that includes geopolitical complexities and dumb space debris all creating a morass that requires human intervention to navigate, the founders said.

“Today it’s too complex to resolve and because of the different nations and lack of standards and policy … today you need human input,” Hesar said.

And in the future, if satellites are equipped with sensors to make collision avoidance more autonomous, then Kayhan Space already has the algorithms that can provide that service. “If you think of the system and the sensors and the decision-making and [execution controls] actually performing that action… we are that,” Hesar said. “We have the algorithm whether it uses the ground-based sensor or the space-based sensor.”

Over the next eight years the space situational market is expected to reach $3.9 billion and there are very few companies equipped to provide the kind of traffic control systems that satellite network operators will need, the founders said.

Their argument was compelling enough to gain admission to the Techstars Allied Space Accelerator, an early stage investment and mentoring program developed by Techstars and the U.S. Air Force, the Netherlands Ministry of Defence, the Norwegian Ministry of Defence and the Norwegian Space Agency. And, as first reported in Hypeotamus, the company has now raised $600,000 in a pre-seed funding from investors including the Atlanta-based pre-seed investment firm, Overline, to grow its business.

And the company realizes that money and technology can’t solve the problem alone.

“We believe that technology alone can help but can’t solve this problem. We need the US to take the lead [on policy] globally,” said Feyzi. “Unlike airspace… which is controlled by countries. Space is space.” Hesar agreed. “There needs to be a focused effort on this problem.”

 

from Amazon – TechCrunch https://techcrunch.com/2020/10/13/kayhan-space-wants-to-be-the-air-traffic-control-service-for-satellites-in-space/

Steps from the House’s antitrust report are too little, too late when it comes to big tech

The U.S. House Judiciary Committee has finally released its omnibus report  on its investigation into the monopoly powers held by Apple, Amazon, Alphabet, and Facebook and its findings will do nothing to stem the power of big tech.

For startups, the most relevant points are the potential solutions the committee proposes for addressing big tech and they primarily boil down to giving small companies the benefit of the doubt when they claim that bigger rivals are exercising monopolistic advantages — and prevent the kinds of acquisitions in the future that allowed these companies to reach the unassailable positions they currently occupy in their chosen markets.

The Committee asserts that in their core areas of business: search, ecommerce, social networking and mobile development platforms and applications, each of the companies is, indeed, a monopoly. And the committee argues that in the future judicial and legislative bodies should define down their definition of market dominance to give smaller companies more standing in cases where they challenge the actions of these large competitors.

Here’s the relevant passage from the report:

“To address this concern, Subcommittee staff recommends that Congress consider extending the Sherman Act to prohibit abuses of dominance.Furthermore, the Subcommittee should examine the creation of a statutory presumption that a market share of 30% or more constitutes a rebuttable presumption of dominance by a seller, and a market share of 25% or more constitute a rebuttable presumption of dominance by a buyer.”

The other interesting section — and the one that will likely prove most troubling for investors and startup founders who are looking to exit their businesses relates to how regulators should handle future mergers and acquisitions from big technology companies.

Here, the Judiciary Committee suggests that the default view should be to rule against transactions involving startups by established tech companies… which… yikes.

The report says:

“Since startups can be an important source of potential and nascent competition, the antitrust laws should also look unfavorably upon incumbents purchasing innovative startups. One way that Congress could do so is by codifying a presumption against acquisitions of startups by dominant firms, particularly those that serve as direct competitors, as well as those operating in adjacent or related markets.”

For the most part, it seems that the word from regulators is that they should have done more, sooner, to limit the power of big tech, but won’t go so far as to take steps that would actually limit the power of big tech.

Instead, they’re punishing entrepreneurs and pulling up the ladder behind the companies that have already achieved market dominance. And are making it tougher for any company to actually mount a realistic challenge through an M&A strategy of its own.

These regulations seem like they’ll make it harder for Snap to make strategic deals that could put it in more direct competition with Facebook (just a random example).

Furthermore, some of the most strategic acquisitions, which create the opportunities for anti-competitive behavior aren’t obvious. Facebook’s acquisition of Onavo, for instance, likely would never have gone up for review. It’s only thanks to reporting from publications like TechCrunch, that the misuse or abuse of the company’s technology was even revealed.

So, the result of all of the hours of testimony, millions of documents, and every other bit of labor that went into the investigation the results are simply — an exhortation for regulators to #bebetter.

Regulators do, indeed, need to be better. Congress should have done a better job when it would have mattered at all.

from Amazon – TechCrunch https://techcrunch.com/2020/10/06/steps-from-the-house-judiciary-committee-are-too-little-too-late-when-it-comes-to-big-tech/

Serious injuries at Amazon fulfillment centers topped 14,000, despite the company’s safety claims

As Amazon‘s biggest shopping day of the year approaches, a new report reveals that the company’s investments in automation and safety have not stemmed surging numbers of serious injuries in the company’s warehouses and fulfillment centers.

Even as Amazon spends tens of millions on new robotics and technologies to automate its warehouses, workers are still paying the price with more than 14,000 serious injuries — requiring days off or job restrictions — reported in fulfillment centers in 2019, according to a report from Reveal.

Overall, the company saw 7.7 serious injuries per 100 employees, a number that’s 33% higher than it was four years ago and double the most recent industry standard, despite significant investments and claims that safety is improving at its facilities, the report said.

A document dump from the Center for Investigative Reporting given to Reveal, internal safety reports and weekly injury numbers from Amazon’s network of national fulfillment centers shows that Amazon has misled the public about its safety record. And that the company’s biggest shopping days — during Prime week and the long holiday season — are the most dangerous for its workers.

In a statement, Amazon called Reveal’s report “misinformed” and quibbled over the terminology, while claiming that “we continue to see improvements in injury prevention and reduction” through a variety of programs, though documents in the report suggest otherwise.

Bulletins sent out every month reveal a grim tally of injuries and safety problems, problems that the company was well aware of. Updates marked “Privileged & Confidential” and reportedly obtained by Reveal indicate that the company has failed to hit safety targets. Despite its intentions to reduce injury rates by 20% in 2018, rates rose. In 2019, when the company decided to try and lower its injury rates by a more modest 5%, the number of injuries still went up.

This isn’t the first time that Amazon has had its woeful worker safety record revealed by Reveal. Last year, the company had the covers pulled off of its alleged work with Indiana state officials to cover up a workplace safety violation that resulted in a man’s death.

Report alleges Amazon worked with Indiana to downplay warehouse worker’s death and safety concerns

And the injury rates are the highest at some of the factories that are closest to the company’s international headquarters, the Reveal report showed. Roughly an hour away from Amazon’s Seattle headquarters, in the town of Dupont, Washington, is one of Amazon’s most dangerous facilities, according to Reveal. The BFI3 warehouse saw 22 serious injuries for every 100 of the company’s workers at the warehouse.

Workers in these factories are required to hit certain production quotas that increase every year, despite investments in automation designed to reduce worker stress, according to company statements. A computer system, which tracks how many items employees scan every hour, is used to determine who needs to be flagged for not hitting targets. Those that fall too far behind are fired, according to Reveal. And the robots that were supposed to make their jobs easier, instead demanded that they increase the speed of their packing as much as fourfold.

“We vastly underestimated the effects it was going to have on our associates,” a former safety manager told Reveal. “We realized early on there was an issue. It was just – you’re already moving that way at light speed, so how do you take a step back and readjust?”

Even while the toll the robots were taking became clear to warehouse managers and supervisors, Amazon’s top executives, like Jeff Wilke, continued to tout the company’s automation investments.

We’ve created more than 300,000 jobs in our fulfillment centers even as we’ve deployed robots alongside our people. What some folks may not know is that the robots make those jobs better and safer. pic.twitter.com/nEmjEnDKCA

— Jeff Wilke (@jeffawilke) May 24, 2019

What Amazon’s own data showed, according to Reveal, was that the company knew the rate of serious injuries was higher at warehouses with robots than at the ones staffed by humans.

And despite Amazon’s claims to the contrary, risks appeared to increase for workers during Amazon’s highest volume periods. Prime Day in 2019 and the days surrounding it were the worst week for injuries at the company, with nearly 400 serious injuries recorded, according to Reveal’s reporting.

Amazon is also working to obscure how many of its workers get seriously injured enough to lose time at work, because the company is putting them on other “light duty” assignments, according to the Reveal study. Amazon representatives have previously said that the company does not employ this practice, but the evidence cited in the report suggest otherwise.

Injured workers who can’t perform warehouse jobs are given other tasks like tagging photos to train the company’s machine learning software. Others perform temp work for Amazon’s partners in the non-profit world, according to the Reveal report. Reassigning injured workers rather than putting them on leave is not necessarily bad, but it can be used, as it appears to have been by Amazon, to create the appearance of lower injury rates.

These historical conditions and the company’s unwillingness to reduce its bottom line interests in the name of worker health and safety can be seen culminating in the company’s response to the COVID-19 pandemic.

As Americans turned to the everything store for getting everything delivered as they sheltered in place, hundreds of workers at Amazon plants were sickened by the virus. And several died.

Ultimately Amazon invested $800 million in safety measures by the end of the first six months of the year — and three month’s into the steady march of the virus across the country. The movement from Amazon’s executive team only came after workers organized to protest their conditions.

Amazon’s thanks to these organizers? Firing one of the organizers and two other employees who supported the efforts.

Meanwhile, Jeff Bezos has made $60 billion from the surge in Amazon’s stock price.

Amazon fires two more employees who were openly critical of working conditions during pandemic

from Amazon – TechCrunch https://techcrunch.com/2020/09/29/serious-injuries-at-amazon-fulfillment-centers-topped-14000-despite-the-companys-safety-claims/

Here’s everything Amazon announced at its latest hardware event

From new Ring flying indoor drone cameras to an adorable new kids version of one of its most popular Amazon home products, Jeff Bezos’ Seattle retailer unveiled a slew of new hardware goodies just ahead of the holiday shopping season.

Echo updates

Image Credits: Amazon

Amazon kicked off its latest hardware showcase by unveiling a new version of the company’s Echo devices, which now include spherical speakers (with a version for kids featuring cute animal graphics). Amazon also unveiled an updated, more personalized Echo capabilities and a new tracking feature for its Show 10 that mirrors Facebook’s Portal in its ability to follow users as they move around a room.

Amazon redesigns the Echo line with spherical speakers and swiveling screens

Ring’s new things

Ring also had plenty to pitch at the Amazon hardware show. The security camera company is updating its line with the Always Home Cam, a diminutive drone that can be scheduled to fly preset paths, which users can determine themselves.

It also rolled out new hardware for the automotive market with three different devices focused on car owners. A Ring Car Alarm that will retail for $59.99; and the Car Cam and Car Connect will both be $199.99. Ring Car Alarm provides basic features that work with the Ring app, sending alerts to trigger a series of potential responses. The alarm also integrates with other Ring devices or Amazon Alexa hardware and connects using Amazon’s low-bandwidth Sidewalk wireless network protocol.

Meanwhile, the Car Cam allows users to check in on their car via video as long as users are in range of a wifi network, or opt-in to the additional LTE companion plan Ring is selling. The cam also includes an Emergency Crash Assist feature that alerts first responders, and a recording feature that turns on if a user says “Alexa, I’m being pulled over”. Finally, the car connect is an API that manufacturers, starting with Tesla, can use to provide Ring customers with mobile alerts for events detected around vehicles or watch footage recorded with onboard cameras.

Ring also added new opt-in end-to-end video encryption for those users who want it.

Ring gets into automotive security with three new car products, including one debuting first for Teslas

New ways to Fire TV

Image Credits: Amazon

The company’s TV platform got several updates. The biggest is probably the addition of the new, lower cost Fire TV Stick Lite at $29.99. For $39.99, meanwhile, you can pick up the new Fire TV Stick, which features a process that’s 50% faster. The platform is also adding Video Calling — a nice addition in the era of working from home — along with a new, improved layout.

Amazon redesigns Fire TV, introduces new Fire TV Stick and low-cost Fire TV Stick Lite

Amazon goes ga-ga for gaming

Last, but certainly not least, Amazon announced its new game-streaming platform, Luna.

The long-awaited gaming competitor to Google Stadia and Microsoft xCloud is launching an early access version at a price of $5.99 per-month, the company said. Users will be able to stream titles wirelessly without downloading games and can play across PC, Mac, and iOS (via the web).

Amazon announces Luna game-streaming platform

Initially, the company will have more than 50 titles in the Luna+ app, including at least one Sonic title and Remedy Entertainment’s control. There’s a partnership with Ubisoft in the works, but access to those games may require a separate subscription.

 

from Amazon – TechCrunch https://techcrunch.com/2020/09/24/heres-everything-amazon-announced-at-its-latest-hardware-event/

As the Western US burns, a forest carbon capture monitoring service nabs cash from Amazon & Bill Gates backed fund

Pachama, the forest carbon sequestration monitoring service that tracks how much carbon dioxide is actually captured in forestry offset projects, has raised $5 million in fresh funding from a clutch of high profile investors including Amazon, Breakthrough Energy Ventures.

The investment is one of several deals that Amazon has announced today through its Climate Pledge Fund. Breakthrough Energy Ventures, the firm backed by Bill Gates and other billionaires, led the round, which brings Pachama’s total haul to $9 million so it can scale its forest restoration and conservation emissions reduction monitoring service, the company said.

With the Western United States continuing to burn from several fires that cover acres of drought-impacted forests and deforestation continuing to be a problem around the world, Pachama’s solution couldn’t be more timely. The company’s remote verification and monitoring service using satellite imagery and artificial intelligence measures carbon captured by forests.

It also couldn’t be more personal. Pachama’s founder, Diego Saez-Gil, lost his own home in the wildfires that tore through California earlier this year.

“We will need to restore hundreds of thousands of acres of forests and carbon credits can be the funding mechanism,” Saez-Gil wrote in a direct message.

Pachama joins two other companies that are jointly financed by Breakthrough Energy Ventures and Amazon’s Climate Pledge Fund.

Other big corporate investors also backed Pachama. Groupe Arnault’s investment arm, Aglaé Ventures, and Airbnb’s alumni fund, AirAngels invested as did a number of prominent family offices and early stage funds. Sweet Capital, the fund investing the personal wealth of gaming company King.com’s management team; Serena Ventures (the investment vehicle for tennis superstar Serena Williams) and Chris Sacca’s Lowercarbon Capital fund also invested in the round along with Third Kind Ventures and Xplorer Ventures.

“There is growing demand from businesses with ESG commitments looking for ways to become carbon neutral, and afforestation is one of the most attractive carbon removal options ready today at scale,” said Carmichael Roberts, of Breakthrough Energy Ventures, in a statement. “By leveraging technology to create new levels of measurement, monitoring, and verification of carbon removal—while also onboarding new carbon removal projects seamlessly—Pachama makes it easier for any company to become carbon neutral. With its advanced enterprise tools and resources, the company has enormous potential to accelerate carbon neutrality initiatives for businesses through afforestation.”

from Amazon – TechCrunch https://techcrunch.com/2020/09/17/as-the-western-us-burns-a-forest-carbon-capture-monitoring-service-nabs-cash-from-amazon-bill-gates-backed-fund/

Walmart expands drone delivery tests to Arkansas with new Zipline partnership

Walmart now has two tests for drone delivery running in the US.

Early Monday morning the company announced a new drone delivery program with Zipline, a startup that made its name delivering medical supplies across Africa.

The partnership with Zipline comes on the heels of another newly announced drone partnership with Flytrex, which started delivering packages to Walmart customers in North Carolina last week.

Zipline’s work with Walmart in Arkansas compliments a pilot delivery program that the company began in North Carolina earlier this year. Working with Novant Health, Zipline has been delivering medical equipment and personal protective gear via drone to regions of North Carolina since May.

Zipline begins US medical delivery with drone program honed in Africa

The drone operation with Walmart will deliver health and wellness products initially, with the potential to expand to general merchandise.

A movement into the delivery of general goods would be something of a pivot for Zipline, which has touted its ability to handle medical supplies and equipment since the launch of its services across Africa in 2016.

 

Trial deliveries for the new service will begin in Northwest Arkansas and cover a 50-mile radius, according to a statement from Walmart.

Walmart’s forays into drone delivery come as its largest competitor, Amazon, also picks up activity in the drone aviation industry.

In late August, Amazon’s Prime Air drone delivery fleet received approval from the FAA to begin trialing commercial deliveries. It’s similar to the certification that logistics companies like UPS received to test their own drone delivery networks.

Rather than operate its own drone fleet, Walmart seems content to partner with existing companies working in the space — for now.

Amazon’s Prime Air drone delivery fleet gains FAA approval for trial commercial flights

from Amazon – TechCrunch https://techcrunch.com/2020/09/14/walmart-expands-drone-delivery-tests-to-arkansas-with-new-zipline-partnership/

Competing with both Perfect Day and Beyond Meat, Chile’s NotCo raises $85 million to expand to the US

NotCo, the Chilean food technology company making plant-based milk and meat replacements, has confirmed the close of a new $85 million round of funding to take the company’s products into the US market.

The announcement confirms earlier reporting from TechCrunch that the company had raised new capital, but according to people with knowledge of the investment, the valuation for the company is roughly $300 million, and not the $250 million TechCrunch previously reported.

The Not Company, a maker of plant-based meat and dairy substitutes in Chile, will soon be worth $250M

The funding came from new investors including the consumer-focused private equity firm L Catterton Partners, Twitter co-founder Biz Stone’s Future Positive investment firm, and the giant venture capital firm, General Catalyst. Previous investors including Kaszek Ventures, The Craftory, Bezos Expeditions (the personal investment firm for Amazon founder, Jeff Bezos), Endeavor Catalyst, IndieBio, Humbolt Capital and Maya Capital, all of which have followed on in this round.

NotCo makes a hamburger substitute that’s currently being marketed at Burger King and Papa John’s restaurants in Chile as part of its NotBurger and NotMeat brands and has a line of dairy products including NotIceCream, NotMayo and NotMilk.

Both markets are not small. With milk alone being a multi-billion dollar category that NotCo chief executive Matias Muchnick believes his company can dominate in both Latin America and the US. That trajectory will put it on a collision course with well-funded competitors like Perfect Day, which raised $300 million in financing earlier this year and launched a new consumer brand subsidiary, the Urgent Company, for products made with its milk substitutes.

For longtime investors in the company, like Kaszek Ventures managing partner, Nicolas Szekasy, the new financing for NotCo validates his firm’s early faith that a company from Santiago, Chile could compete in some of the world’s largest consumer markets.

“We continue to actively support the company since its early days with a strong conviction of the potential that NotCo has to be the leading global player in the food-tech space. In this uncertain time, consumers have amplified their appetite for the plant-based world,” said Szekasy in a statement. “In parallel, COVID has allowed us to see that meat production is not only environmentally harmful and inefficient, but also that its supply chain is fragile. So we are happy to witness an inflection point where plant-based products are becoming an increasing proportion of a new normal, once they can actually taste amazing like we see NotCo crafting.”

Joining the company to help with its international expansion plans are a clutch of seasoned executives from large multi-national food brands. Flavia Buchmann, a former executive at Coca-Cola overseeing the company’s Sprite brand has been tapped as the company’s new chief marketing officer. Former Danone executives Luis Silva and Catriel Giuliano are taking the reins as heads of global business development and research and development, respectively. And Jose Menendez a former banker at Jeffries and executive at Tapad, is now NotCo’s global chief operating officer.

A flood of venture capital dollars have come into the food space since NotCo first burst on the scene and many of these deals are operating at the intersection of novel biomanufacturing technologies and food science. But NotCo’s take on foodtech is more akin to Beyond Meat’s than Impossible Foods or Perfect Day.

Synthetic biology startups are giving investors an appetite

The company isn’t making biologically engineered foods, it’s taking its taxonomy of existing foods and determining which combinations of plant ingredients will most closely mimic all aspects of the animal products they’re replacing.

So a closer analogy would be companies like Just or the newly funded Climax Foods. Muchnick said that the difference is in where these companies are spending their time. Instead of focusing on a protein that can act as a one for one replacement for casein or the carbohydrate lactose, NotCo is trying to replicate the whole product — the entire sensorial panel of a particular food.

“Flavors, taste, smell, color, and the interaction between all of them and the molecular components in food,” said Muchnick. “It’s not just the concept of how limited we are to replicating products and how limited to using AI to address other challenges in the food industry.”

For Muchnick, the biggest opportunity for NotCo is dairy. While the company has plans to introduce a number of new products including a chicken replacement to compliment its line of NotBurger and NotMeat products, it’s really the dairy business where the company wants to land and expand.

It’s looking to cut a deal with a large quick service restaurant along with deals for an online channel and a direct to consumer play.

As it grows, consumers can expect to see the company’s brands recede into the background as Muchnick looks to focus on supplying products to other vendors.

“We partnered upstream and downstream,” Muchnick said. The company works with suppliers including Ingredion, ADM, and Cargill and downstream has product partners who will incorporate its milk substitute into other products.

“What we want is to be the catalyst of change with many other companies. Why don’t we become the enabler. We’re becoming the Intel inside of other products.”

At that scale, the company would be a prime candidate for public investors, and if Muchnick has his way the company will get there. “We are aiming to have a $300 million company by 2024 with 70 percent of that business in the US,” he said. 

from Amazon – TechCrunch https://techcrunch.com/2020/09/09/competing-with-both-perfect-day-and-beyond-meat-chiles-notco-raises-85-million-to-expand-to-the-us/

LA gets a big SAAS exit as Fastly nabs the Culver City-based Signal Sciences for $775M

Los Angeles was always more than a one industry town, even when it comes to technology startups, but media and entertainment (and social networking) were always the big draws in tinseltown.

Now the city’s enterprise tech scene can claim a really big winner with Signal Sciences, the security monitoring and management company that is getting bought by Fastly, a provider of content delivery networking services, for $775 million.

“Our team couldn’t be more excited about the opportunity to join Fastly to continue to drive forward security protections that empower developers. But we also believe this is a great moment to showcase the diversity of the LA technology scene,” wrote Signal Sciences chief executive, Andrew Peterson, in a direct message. “Being the largest enterprise tech outcome ever here, we’re just one of so many great deep technology companies who are paving the way for the next generation of SoCal based start ups. We’re thrilled to help lead the way for the broader tech community in Los Angeles.”

Content delivery and security go hand-in-hand and some of the biggest companies online use businesses like Fastly and its competitor, Cloudflare, to ensure that their online presence doesn’t go offline — and that browsers can quickly download and deliver websites.

Fastly said that the acquisition of Signal Sciences’ business will boost its ability to provide better security for applications and APIs — the connective fabric between different services that knit different technologies together behind the scenes.

With the acquisition, Fastly is planting a flag as a new competitor in the cybersecurity market, even as companies like Amazon, Microsoft, and Google offer a wider array of services under their Internet as a service business lines.

Application security is a higher value piece of the services stack and it takes advantage of the natural position that a company like Fastly has as a content distribution network.

“Fastly was founded to meet developers’ need for greater visibility and control. Now, as the digital transformation movement continues to accelerate, DevOps teams are struggling with inadequate and inflexible security tools,” said Joshua Bixby, Chief Executive Officer of Fastly, in a statement. “Together with Signal Sciences, we will give developers modern security tools designed for the way they work.”

Los Angeles, California, USA – March 23, 2016: Aerial view of the Hollywood sign at dusk in Los Angeles. The image has been taken from an helicopter flying over LA. Image Credit: Getty Images/franckreporter

Under the terms of the agreement Fastly is buying Signal Sciences for $200 million in cash and approximately $575 million worth of stock, subject to customary adjustments for transactions, according to a statement.

Fastly is also setting up a $50 million retention pool of restricted stock units to give out to Signal Sciences employees.

Signal Sciences employees aren’t the only winners in the deal. The company raised $63 million in venture financing from investors including CRV, Harrison Metal, Index Ventures, Oreilly Alphatech Ventures, Lead Edge Capital, and individual investors including former Facebook security officer Alex Stamos, and Etsy chief executive Chad Dickerson.

The company’s last round was a $35 million investment raised about two years ago, and one investor with knowledge of the company’s cap table called it a “pretty efficient exit” for its backers.

Signal Sciences secures $35 million investment to protect web apps

Morgan Stanley & Co. and Union Square Advisors are acting as financial advisors to Fastly, and Cooley LLP is acting as its legal advisor with regard to the transaction, according to a statement. Qatalyst Partners is acting as financial advisor to Signal Sciences, while Goodwin Procter was the company’s lawyer.

from Amazon – TechCrunch https://techcrunch.com/2020/08/27/la-gets-a-big-saas-exit-as-fastly-nabs-the-culver-city-based-signal-sciences-for-775m/

CarbonChain is using AI to determine the emissions profile of the world’s biggest polluters

It was the Australian bush fire that finally did it.

For twelve years Adam Hearne had worked at companies which represented some of the world’s largest sources of greenhouse gas emissions. First at Rio Tinto, one of the largest industrial miners, and then at Amazon, where he handled inbound delivery operations across the EU, Hearne was involved in ensuring that things flowed smoothly for companies whose operations spew millions of tons of carbon dioxide into the environment.

Amazon’s business alone was responsible for emitting 51.17 million metric tons of carbon dioxide last year — the equivalent of 13 coal burning power plants, according to a report from the company.

Then, Hearne’s home country burned.

In 2019 wildfires erupted that engulfed over 46 million acres of land, destroyed over 9,000 buildings, and killed over 400 people and untold numbers of animals — driving some species to the brink of extinction.

Hearne, along with an old friend from his business school rugby days, Roheet Shah; and computer science and machine learning experts from Imperial College of London, Yuri Oparin and Jeremiah Smith; launched CarbonChain that year. The company, now poised to graduate from the latest Y Combinator cohort, is pitching a service that can accurately account for emissions from the commodities industry — which is responsible for 50 percent of the world’s greenhouse gas emissions.

The company’s services are coming at the right time. Countries around the globe are poised to adopt much more stringent regulations around carbon dioxide and greenhouse gas emissions. The European Union is slowly working towards passage of sweeping new regulations on climate change that are mirrored in the region’s local economies. Even petrostates like Russia are poised to enact new climate regulations (at least according to Russian officials).

What’s missing in all of this are ways for companies to accurately track their emissions and technologies that can adequately monitor how well emissions offsets are working.

CarbonChain tackles this problem by going to the sectors that are responsible for the largest percentage of greenhouse gas emissions, Hearne said.

“The world needs hard accounting and hard numbers of what commodities companies are producing,” said Hearne in a July interview.

To ensure that emissions reductions and regulations are working, regulators need to go after oil and gas and commodities and minerals producers, according to Hearne. “Those sectors are uniform and carbon intensive and that’s how you quantify them,” he said.

CarbonChain has built models for every single asset in the supply chain for these industries, according to Hearne. The company has created digital twins of every piece of equipment used in heavy industry. If CarbonChain can’t get the information about the equipment from the companies that use it, they go to the engineering firms that built the equipment or facility for the company.

“In order to get a number that doesn’t get laughed out of the room we have to go down to the aluminum smelter that has a power station right next to it,” said Hearne. “Ninety percent of its footprint is its electrical usage.”

According to Hearne, CarbonChain’s system is so precise that it can tell users how much carbon emissions are embedded in a cup of coffee or a glass of wine (which is two pounds of carbon dioxide for imported wine, by the way).

CarbonChain is already selling its services to commodities producers and carbon traders who are operating in existing carbon trading schemes.

So far, the company has received roughly $500,000 from the UK government and an investment from one of its (undisclosed) commodities customers.

But CarbonChain’s technology seems to have the most rigorous methodology of any of the companies that’s purporting to do emissions monitoring. Other startups purporting to provide carbon emissions data for companies include Persefoni, which raised $3.5 million for its solution, and another Y Combinator graduate SINAI Technologies.

If the company can actually measure the embedded emissions of materials down to a single piece of rebar, it could have huge consequences for industry broadly.

The company is also slots nicely into the trend of entrepreneurs with deep industry experience building vertical solutions based on the collection of massive data sets using machine learning.

from Amazon – TechCrunch https://techcrunch.com/2020/08/21/carbonchain-is-using-ai-to-determine-the-emissions-profile-of-the-worlds-biggest-polluters/

Here are four areas the $311 billion CPPIB investment fund thinks will be impacted by COVID-19

The Canadian Pension Plan Investment Board, an asset manager controlling around $311 billion in assets for the Canada’s pensioners and retirees, has identified four key industries that are set to experience massive changes as a result of the global economic response to the COVID-19 pandemic.

The firm expects the massive changes in e-commerce, healthcare, logistics, and urban infrastructure to remain in place for an extended period of time and is urging investors to rethink their approaches to each as a result.

“It really ties into the mandate that we have in thematic investing,” said Leon Pedersen, the head of Thematic Investments at CPPIB.

There was a realization at the firm that structural changes were happening and that there was value for the fund manager in ensuring that the changes were being addressed across its broad investment portfolio. “We have a long term mandate and we have a long term investment horizon so we can afford to think long term in our investment outlook,” Pedersen said.

The Thematic Investments group within CPPIB will make mid-cap, small-cap and private investments in companies that reflect the firm’s long term theses, according to Pedersen. So not only does this survey indicate where the firm sees certain industries going, but it’s also a sign of where CPPIB might commit some investment capital.

The research, culled from international surveys with over 3,500 respondents as well as intensive conversations with the firm’s investment professionals and portfolio companies, indicates that there’s likely a new baseline in e-commerce usage that will continue to drive growth among companies that offer blended retail offerings and that offices are likely never going to return to full-time occupancy by every corporate employee.

Already CPPIB has made investments in companies like Fabric, a warehouse management and automation company.

The e-commerce wave has crested, but the tide may turn

Amid the good news for e-commerce companies is a word of warning for companies in the online grocery space. While usage surged to 31 percent of U.S. households, up from 13 percent in August, consumers gave the service poor marks and many grocers are actually losing money on online orders. The move online also favored bigger omni-channel vendors like Amazon and Walmart, the study found.

The CPPIB also found that there may be opportunities for brick and mortar vendors in the aftermath of the epidemic. As younger consumers return to shopping center they’re going to find fewer retailers available, since bankruptcies are coming in both the US and Europe. That could open the door for new brands to emerge. Meanwhile, in China, more consumers are moving offline with malls growing and customers returning to shopping centers.

Some of the biggest winners will actually be online entertainment and cashless payments — since fewer stores are accepting cash and music and video streaming represent low-risk, easier options than live events or movie theaters.

LOS ANGELES, CA – MAY 30: General views of tourists and shoppers returning to the Hollywood & Highland shopping mall for the first weekend of in-store retail business being open since COVID-19 closures began in mid-March on May 30, 2020 in Los Angeles, California. (Photo by AaronP/Bauer-Griffin/GC Images)

Healthcare goes digital and privacy matters more than ever

Consumers in the West, already reluctant to hand over personal information, have become even more sensitive to government handling of their information despite the public health benefits of tracking and tracing, according to the CPPIB. In Germany and the U.S. half of consumers said they had concerns about sharing their data with government or corporations, compared with less than 20 percent of Chinese survey respondents.

However, even as people are more reluctant to share personal information with governments or corporations, they’re becoming more willing to share personal information over technology platforms. One-third of the patients who used tele-medical services in the U.S. during the pandemic did so for the first time. And roughly twenty percent of the nation had a telemedicine consultation over the course of the year, according to CPPIB data.

Technologies that improve the experience are likely to do well, because of the people who did try telemedicine, satisfaction levels in the service went down.

DENVER, CO – MARCH 12: Healthcare workers from the Colorado Department of Public Health and Environment check in with people waiting to be tested for COVID-19 at the state’s first drive-up testing center on March 12, 2020 in Denver, Colorado. The testing center is free and available to anyone who has a note from a doctor confirming they meet the criteria to be tested for the virus. (Photo by Michael Ciaglo/Getty Images)

Cities and infrastructure will change

“From mass transit to public gatherings, few areas of urban life will be left unmarked by COVID-19,” write the CPPIB report authors.

Remote work will accelerate dramatically changing the complexion of downtown environments as the breadth of amenities on offer will spread to suburban communities where residents flock.  According to CPPIB’s data roughly half of workers in China, the UK and the US worked from home during the pandemic, up from 5 percent or less in 2019. In Canada, four-in-ten Canadian were telecommuting.

To that end, the CPPIB sees opportunities for companies enabling remote work (including security, collaboration and productivity technologies) and automating business practices. On the flip side, for those workers who remain wedded to the office by necessity or natural inclination, there’s going to need to be cleaning and sanitation services and someone’s going to have to provide some COVID-19 specific tools.

With personal space at a premium, public transit and ride hailing is expected to take a hit as well, according to the CPPIB report.

New York City, NY is shown in the above Maxar satellite image. Image Credit: Maxar

Supply chains become the ties that bind in a distributed, virtual world

As more aspects of daily life become socially distanced and digital, supply chains will assume an even more central position in the economy.

“Amid rising labor costs and heightened geopolitical risk, companies today are focused on resilience,” write the CPPIB authors.

Companies are reassessing their reliance on Chinese manufacturing since political pressure is coming from more regions on Chinese suppliers thanks to the internment of the Uighur population in Xinjiang and the crackdown on Hong Kong’s democratic and open society. According to CPPIB, India, Southeast Asia, and regional players like Mexico and Poland are best positioned to benefit from this supply chain diversification. Supply chain management software providers, and robotics and automation services stand to benefit.

“Confined to their homes for months and subjected to a rapid reordering of their perceived health risks and economic prospects, consumers are emerging from a shared trauma that will change their priorities and concerns for years to come,” the CPPIB study’s authors write.

from Amazon – TechCrunch https://techcrunch.com/2020/08/19/here-are-four-areas-the-311-billion-cppib-investment-fund-thinks-will-be-impacted-by-covid-19/

With technology to perfect product pitches in digital marketplaces Pattern raises $52 million

Pattern, a Lehi, Utah-based reseller that offers large and small brands a way to optimize their sales on marketplaces like Amazon, eBay, Walmart and Google Shopping, has raised $52 million in growth funding, the company said.

The money, from Ainge Advisory and KSV Global, will be used to expand the company’s business worldwide.

Founded in 2013, the e-commerce reseller uses analytics to lock down market specific keywords in advertising and has managed to reach a run-rate that should see it hit $500 million in annual revenue by the end of 2020, according to Pattern co-founder and chief investment officer, Melanie Alder.

Brands like Nestle, Pandora, Panasonic, Zebra and Skechers sell their goods to Pattern in an effort to juice sales on digital marketplaces.

“Pattern represents our brands in the US, across Europe, and in select markets in Asia, selling for us on global marketplaces such as Amazon, Walmart, Tmall, and JD as well as building and managing three of our direct-to-consumer sites,” said Kyle Bliffert, CEO and president of Atrium Innovations, a Nestle Health Science company, in a statement. “The global e-commerce growth we have experienced by leveraging Pattern’s expertise is extraordinary.”

Pattern places bets on where a product is likely to receive the most attention using specific keywords, according to the company’s chief executive, Dave Wright. The company buys products from its brand partners and then sells them widely across marketplaces in the US, Europe and Asia. These markets represent $2.7 trillion in total sales and Wright expects it to reach $7 trillion by 2024.

As Wright noted, a majority of searchers for sales begin on Amazon. The company just opened its eighteenth location in Germany. Pattern has grown sales for brands from $3 million to $26 million and the company makes money off of the margin on the sales of products. With the new funding, the company intends to expand into other geographies like Japan and India.

Wright says his company addresses one of the fundamental problems with advertising technology — the proliferation of tools hasn’t meant better optimization for most brands, because they’re teams aren’t equipped to specialize.

While there may be hundreds of different advertising and marketing folks working at a company, each company may have hundreds of brands that it sells and the dedicated teams to specific brands may only have one or two  people on staff.

“Data makes all the difference,” said co-founder and CEO Dave Wright. “I’ve spent the bulk of my career in data science and data management, and our ability to detect and act on ‘patterns’ on ecommerce platforms has allowed the brands we represent to be incredibly successful.”

from Amazon – TechCrunch https://techcrunch.com/2020/08/11/with-technology-to-perfect-product-pitches-in-digital-marketplaces-pattern-raises-52-million/