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When The Cure’s frontman Robert Smith said he was “sickened” by Ticketmaster fees, many of us felt vindicated. The platform then refunded some fees, but scalpers are now at it, too, and selling entire Ticketmaster accounts instead of tickets. Is there still hope for concertgoers? — Anna

Playing monopoly

If you are longing for a Ticketmaster alternative, you’re not alone. Whether you are a fan of Taylor Swift, The Cure or Bad Bunny, reasons abound to resent the self-described “world’s leading live entertainment ticketing platform.”

Is all the hate warranted? Maybe not. Or rather, the platform might just be shouldering more than its share of responsibility. “It’s easy to blame Ticketmaster and say it’s their fault,” its former CEO Fred Rosen, who ran the company from 1982 to 1998, told CBC Radio in January. “What determines pricing is demand.”

Regulators in many countries beg to disagree. Earlier this year, the U.S. Senate questioned Live Nation, which acquired Ticketmaster in 2010, over concerns that it’s a monopoly.

Ticketmaster sucks. Can blockchain be the cure? by Anna Heim originally published on TechCrunch

https://techcrunch.com/2023/03/25/ticketmaster-sucks-blockchain-cure/

In the aftermath of TikTok CEO Shou Zi Chew’s brutal five hour Congressional hearing on Thursday, TikToker and disinformation researcher Abbie Richards summed up what so many creators were thinking: “It’s actually remarkable how much less Congress knows about social media than the average person,” Richards told TechCrunch.

Across TikTok, users mocked congresspeople for misunderstanding how technology works. In one instance, Representative Richard Hudson (R-NC) asked Chew if TikTok connects to a user’s home wi-fi network. Chew responded, bewildered, “Only if the user turns on the wi-fi.”

The ignorant questions weren’t unique to the government’s interrogation of Chew. At a high-profile hearing 2018, the late Senator Orrin Hatch (R-UT) infamously asked Meta CEO Mark Zuckerberg how Facebook makes money if the app is free. Zuckerberg responded, “Senator, we run ads,” failing to stifle a smirk. During a tech hearing two years ago, Senator Richard Blumenthal (D-CT) created another notorious viral moment by asking Facebook’s global head of safety if she would “commit to ending finsta.”

As entertaining as these lapses in basic knowledge are, TikTok creators have serious concerns about the future of an app that’s given them a community, and, in some cases, a career.

TikTok creator Vitus “V” Spehar, known as Under the Desk News, has amassed 2.9 million followers by sharing global news in an approachable way. But in this week’s news cycle, they’re front-and-center (literally — they sat right behind the TikTok CEO as he testified).

“I think it’s really concerning that a government is considering removing American citizens from the global conversation on an app as robust as TikTok,” Spehar told TechCrunch. “It’s not just banning the app in the United States, it means disconnecting American citizens from Canada, the UK, Mexico, Iran, Ukraine and all of the frontline reporting you see from those countries, it just shows up on our [For You Page].”

Spehar is part of a group of TikTok creators who travelled to Washington, D.C. this week to advocate on TikTok’s behalf — and against the looming threat of a national ban. They participated in a press conference on Wednesday afternoon hosted by Representative Jamaal Bowman (D-NY), a rare dissenting voice in Congress who raised questions about what he described as the “hysteria and panic” surrounding TikTok.

“Congress made clear that they don’t understand TikTok, they don’t listen to their constituents who are in the community of TikTokers — and are using this TikTok hysteria as a way to pass legislation that gives them superpowers to ban any app they deem ‘unsafe’ in the future,” Spehar said following the hearing.

Tech ethicists and creators alike share this frustration. Dr. Casey Fiesler, a University of Colorado Boulder professor of tech ethics and policy, believes that the national security concerns about the app are overstated.

“The risk seems to be entirely speculative right now and to me, I’m not sure how it is substantially worse than all of the things that are troubling about social media right now that the government has not been focusing on,” Fiesler said. She commands an audience of over 100,000 followers on TikTok, where she explores issues like the nuances of content moderation and other topics that might come up in her graduate courses.

“I don’t think there’s any way to frame this as a general data privacy issue without going after every other tech company,” Fiesler told TechCrunch. “The only thing that makes sense is that it’s literally only about the fact that the company is based in China.”

There is still no evidence that TikTok has shared data with the Chinese government. But reports have shown that employees at TikTok’s Beijing-based parent company ByteDance have viewed American user data. An investigation last year revealed that engineers in China had open access to TikTok data on U.S. users, undermining the company’s claims to the contrary. Another report, corroborated by ByteDance, found that a small group of engineers inappropriately accessed two U.S. journalists’ TikTok data. They planned to use the location information to determine if the reporters had crossed paths with any ByteDance employees who may have leaked information to the press.

Still, TikTokers point to the distinction between sharing data with a private Chinese company and the Chinese government. For its part, TikTok has tried to appease U.S. officials with a plan called Project Texas, a $1.5 billion undertaking that will move U.S. users’ data to Oracle servers. Project Texas would also create a subsidiary of the company called the TikTok U.S. Data Security Inc., which plans to oversee any aspect of TikTok involving national security.

Spehar said that they favor solutions like Project Texas over U.S. government proposals like the RESTRICT Act, which would give the U.S. new tools for restricting and potentially banning technology exports from foreign adversaries.

“I don’t think we should be looking at things like the RESTRICT Act, or any kind of broad legislation that gives the government the power to say, ‘We’ve decided something is unsafe,’” they told TechCrunch.

Multiple congresspeople asked Chew about how TikTok moderates dangerous trends like “the blackout challenge,” in which children tried to see how long they can hold their breath. Children died from this behavior after it circulated on TikTok, but the game didn’t originate on the platform: As early as 2008, the CDC warned parents that 82 children had died from a trend called “the choking game.” One congressman even referenced “NyQuil chicken” as a dangerous TikTok trend, despite the fact that there is little evidence anyone actually ate chicken soaked in cough medicine and the trend originated years ago on 4chan.

“The moral panic over TikTok challenges is something I’ve debunked extensively, and then they just get parroted by these politicians that don’t understand what a moral panic is,” Richards told TechCrunch. “To utilize misinformation that I’ve written about so much and tried to debunk, and to see it used against TikTok was just so infuriating.”

Richards does acknowledge that TikTok’s best feature is also its worst: Anything can go viral. She believes TikTok’s “bottom-up” information environment does lend itself to misinformation, but that same dynamic also surfaces good content that would never get exposure on a different social network.

Richards is also a vocal critic of TikTok’s content moderation policies, which — like every other social network — are not always applied evenly. During Thursday’s hearing, Rep. Kat Cammack (R-FL) dramatically screened a month-old TikTok video depicting a gun alongside text threatening the leader of the House Committee that orchestrated Chew’s testimony. It’s an obvious violation of TikTok’s content guidelines, but Richards points out that it had very little engagement.

“In the context of TikTok, something having 40 likes is effective moderation,” Richards said. “That means the video isn’t reaching very many people.” She believes that a video like the one the Florida lawmaker highlighted shouldn’t be on the platform at all, but ultimately if it doesn’t reach many users then the potential for harm is limited.

Other creators expressed frustration that congresspeople failed to consider how TikTok has helped Americans, like LGBTQ+ people who found community on the app or small business owners who were able to grow beyond their wildest dreams after going viral.

Trans Latina creator Naomi Hearts, who has 1 million TikTok followers, was invited by TikTok to support the app in D.C. (TikTok compensated this group of creators, which included Spehar, by covering lodging and travel costs). She said that she met other TikTokers on the trip who used the app to gain traction for their small businesses.

She too found an audience on TikTok that she wasn’t able to build elsewhere, after struggling to grow a following on Instagram. But on TikTok, even small accounts have the potential to go viral, a phenomenon that can jumpstart a career when things work out.

“The message of the normal person… for example, me, who was just a plus sized trans woman who grew up in South Central Los Angeles and had a dream — my message was not there,” Naomi Hearts said, referring to Instagram.

Spehar also emphasized the role that TikTok plays in helping people connect well outside the bounds of their everyday surroundings.

“You can find communities that you can’t where you live,” Spehar said. “I think about kids in Northwest Arkansas and in Tennessee — TikTok is literally one of the reasons they’re not taking their lives, because they know they’re not alone.”

Although Richards mostly writes about disinformation on TikTok, she laments the positive sides of the app that could be lost if it gets banned in the U.S.

“Banning TikTok would ultimately harm marginalized communities the most, who are least represented by institutional news and organizations,” Richards said. “And if all of a sudden, that entire infrastructure disappears, they will just suddenly in be the dark.”

‘So infuriating’: TikTokers are fuming over potential ban by Amanda Silberling originally published on TechCrunch

https://techcrunch.com/2023/03/25/tiktok-ban-creators-react/

Welcome back to Chain Reaction, a podcast that interviews newsmakers in crypto to better understand the tech behind the hype and the people working to build a decentralized future.

For this week’s episode, Jacquelyn interviewed Emin Gün Sirer, the founder and CEO of Ava Labs.

Ava Labs has raised a total of about $640 million, according to Crunchbase, and is backed by firms like a16z and Polychain Capital. In recent months, Ava Labs has announced a number of partnerships with major brands and companies, like Amazon Web Services, which TechCrunch covered exclusively.

Ava Labs created the layer-1 blockchain Avalanche, a platform that lets developers build multifunctional blockchains and decentralized applications with a focus on speed and low transaction costs. The blockchain is compatible with Solidity, a language developers use to code, and allows them to build projects that can communicate across multiple networks. Hundreds of projects are a part of the Avalanche ecosystem, ranging from decentralized exchanges like 1inch to digital asset security firms like BitGo.

In terms of total value locked (TVL), Avalanche is currently the seventh-largest blockchain, with more than $1.1 billion secured across a $5.72 billion market cap, according to CoinMarketCap data.

The present and future of L1s

The company sees its underlying tech as a key driver for developer attention. “Looking around I decided we have to come up with our own architecture for scaling that no one else seems to be pushing at the moment,” Gün Sirer said.

Thus, a “marriage” of Avalanche’s consensus with its subnet architecture, which allows us to have multiple parallel chains dedicated to their own use cases, was born. “That coupling was the genesis of what I thought was a brand new approach,” Gün Sirer added.

Since then, Ava Labs has had one major focus. “The north star for us is to digitize all of the world’s assets on the Avalanche blockchain,” Gün Sirer said. “That’s what we set out to do and that’s what I’m so excited about.”

In recent years, a number of L1 blockchains have popped up across the crypto ecosystem, but Gün Sirer believes in three to five years from now the abundance of L1 blockchains will “be played out.”

“I think we already have way too many L1s and they’re essentially copying other people’s playbooks,” Gün Sirer said. “In many cases, they’re bringing something to the market that the market did not ask for.”

So what’s needed to make a good L1?

It has to be decentralized, secure and fast, Gün Sirer noted. “I think we’re in a good spot and I think people are going to converge,” he added.

We also talked about Gün Sirer’s background, why he launched the layer-1 blockchain, Avalanche, in 2020, whether the space has too many L1s and how blockchains can scale more efficiently.

And we discussed:

• How the layer-2 vision is broken
• U.S. regulatory crackdown on crypto
• Ava Labs’ growth in Asian markets
• The blockchain’s partnerships and business development
• Ava Labs’ focal point for 2023 and beyond

Articles mentioned during the episode can be found here and here.

Chain Reaction comes out every other Thursday at 12:00 p.m. PT, so be sure to subscribe to us on Apple Podcasts, Spotify or your favorite pod platform to keep up with the latest in web3 and crypto.

Avalanche wants to digitize all of the world’s assets on the blockchain by Jacquelyn Melinek originally published on TechCrunch

https://techcrunch.com/2023/03/25/avalanche-wants-to-digitize-all-of-the-worlds-assets-on-the-blockchain/

Despite the slowdown in venture capital activity, there’s still a mountain of money flowing through startups today. TechCrunch+ is launching a series of posts looking at recent, notable venture rounds, exit activity and other news that relates to the financial side of building new technology companies.

While banks are dealing with the crisis kicked off by the failure of well-known, startup-friendly Silicon Valley Bank, upstart tech companies are still more than busy raising capital. They’re also looking for exits. More former than the latter, given the frozen IPO market. But while we wait for the reawakening of a key exit point for startups, we can still keep tabs on where and how the money is flowing into their world.

Remarkable rounds of the week

Etoro reloads at $3.5B valuation

• After its SPAC deal failed to consummate, consumer trading service eToro was left without an expected new tranche of capital and a new valuation mark. However, it had previously secured a pledge for new funds if its SPAC deal fell through, capital that it has now raised.
• The round matters for its size (nine figures), industry (fintech has taken a valuation pounding in recent quarters) and underlying financial results. Despite posting some growth since 2020 in 2022, the company shrank compared to the 2021 period last year. This means that we’re seeing a massive, consumer-fintech company set a new valuation under difficult conditions. Fintech founders should take note.

Seed Club Ventures sneaks out of stealth with $25M to make DAO dreams a reality

• A lot of people assumed interest in DAOs, or decentralized autonomous organizations, had faded in the past year along with crypto bros’ fortunes. But it turns out there are still a number of people very invested in the concept of communities making their own decisions on how to spend millions of dollars.
• Seed Club Ventures, a 63-member consortium of VCs, individual investors, family offices and various entities that still believe in web3, recently came out of stealth with a $25 million fund to help DAOs do just that.
• This matters because that $25 million is going to go to really early-stage projects building much-needed tooling for DAOs. It has already backed projects like Guild, Stability AI, Lens and Metalabel. Such tooling will actually help take DAOs to a level where they can realize some, if not all, of the potential that fully decentralized systems bring.

IntegrityNext raises $109M to help companies ensure their supply chain is ESG-compliant

• There’s a lot of politics around environmental, social and governance (ESG) investing policies for good reason: Compliance with ESG norms requires companies to examine the breadth and depth of their operations to ensure things are done responsibly. That can get expensive, tedious and take a really long time.
• Munich-based IntegrityNext is doing something very special to help companies solve that problem: It helps companies audit their supply chains so they can quickly find out where and how they can optimize the supply chain and comply with ESG requirements.
• This fundraise is really good news for European companies, because they will have an easier time of adopting previously “nice-to-have” ESG policies that are soon becoming “must-have” as regulations in the EU tighten up.

Kream rushes to a $742M valuation because fashion nerds like the circular economy

• In a world of abundance, some things are rare, which is why reseller platforms for luxury goods exist. Spun out of Korean e-commerce giant Naver, Kream has only been around for two years, but the company has seen incredible success as fashion-savvy customers flooded its store, looking for high-end, rare sneakers, watches, bags, accessories and clothing.
• Kream’s $168 million fundraise is interesting because the company is going to invest a lot in its peers to build a reseller network spanning a large swath of Asia — meaning someone in Japan can buy limited edition sneakers that were only launched in Japan.
• It’s also great news for Asia’s growing reselling market, as it signals consumer interest in collectibles and other luxury items, which could drive further investment in this space.

Kredivo raises gigantic $270M Series D to make credit more accessible for underbanked Asians

• It’s no secret that the massive underbanked population in Asia’s developing economies is a big market for fintech to disrupt, and Kredivo, which aims to increase access to credit in Indonesia and Vietnam, has certainly struck gold with a user base that’s about as big as Indonesia’s credit-card-holding population.
• The company’s oversubscribed $270 million Series D is proof of the fact that there’s growth to be had in making people’s lives easier and helping them get access to banking services easily and seamlessly.

Other startup and venture capital news

The venture slowdown is slowing down even the fastest startup categories

• It’s a sad reality of the world that even diamonds at times have no takers, and that seems to be panning out right now in startup land: Even previously hot API startups are suffering in the venture slowdown.
• Per data from GGV, which tracks funding into 63 API companies, startups in this category raised about $2.15 billion in 2022, less than half of what they raised a year earlier. Deal counts have also been down. Q4 2022 saw such startups raising a paltry $134 million, which is lower than in the year’s previous three quarters. That’s got to be tough.
• We care about this because even though API startups are leading the charge with usage-based pricing models, which is arguably the future of software sales, they’re still subject to wider market pressures. Their struggle indicates that no matter how hot a sector you’re in, dollars are likely to be increasingly harder to come by.

Coinbase execs are angry at the SEC raining on their parade

• The crypto world isn’t happy with how lawmakers are treating it. Coinbase’s CEO recently pretty much said the government should just make up its mind about regulations already after the SEC sent it a Wells notice, which basically means the government is going to come after Coinbase and companies like it for “violations of the federal securities laws.”
• We sorta agree with Coinbase here: There really isn’t much precedent for what the crypto world is going through, and fitting the SEC’s nearly century-old laws to the crypto economy feels very much like a square-peg-triangle-hole situation.
• It’s clear the SEC needs to really cement its beliefs on how crypto should be traded so that the wider ecosystem can just follow the rules.

Roofstock cuts 27% of staff in second round of layoffs

• Proptech startups are having a moment, and their employees seem to be paying for it. Rising mortgage rates and the general housing slowdown haven’t been good for companies that depended on people realizing their American dream.
• But buying a house in this economy? A lot of people basically said, “yeah, right,” which basically led to Roofstock, which lets people buy and sell rental homes in dozens of U.S. markets, deciding that it needs to lay off 27% of its staff for the second time in less than two quarters.
• The company’s trying to stay afloat in a sinking housing market, which makes sense, but what doesn’t is that it was valued at $1.9 billion just a year ago. This isn’t good news for the wider proptech market right now.

4 Indian investors explain how their investment strategy has changed since 2021

• Indian startups started 2022 with a pretty good outlook since the global venture slowdown hadn’t gotten to the country yet. But arrive it did, leading to a 70% drop in funding in the second half of the year.
• While we’re sure investors in the country saw it coming, how did they recalibrate their sensors to the new climate? After polling a few investors, Jagmeet found out that for starters, they slowed way down, choosing to make safer bets and generally making sure their portfolio companies have enough runway to last for however long this downturn is going to take.
• Indian investors are also telling their startups to take a step back, solidify their business models and focus on the basics to get to the next milestone. And if needed, raise a down round, because life > death.

When the tech IPO market reopens, keep an eye on HR unicorns

• Do you hear that? That’s Alex giggling in excited expectation of all the S-1s we’re likely to get if HR unicorns continue to grow as quickly as they have.
• The startup group’s ARR growth and regular EBITDA output — and therefore, valuations — seem to be nearly immune to the slowdown as unicorns like Deel, Velocity Global, Gusto and Ripple continue to grow into new markets and categories.
• This means that come IPO season, HR tech companies are going to likely be among the first out of the gate. We’re curious about one thing though: How long can the startups in question grow without going to war with each other, perhaps in the form of price cuts?

  Rounds that matter: Fintech’s fortunes, DAO dreams, Asia’s reseller revival by Ram Iyer originally published on TechCrunch

https://techcrunch.com/2023/03/25/etoro-kredivo-kream-big-rounds/

Entrepreneur Ankur Nagpal raised a $70 million venture fund last year, called Vibe Capital, from over 200 investors. But now, as the market shifts and LPs are less interested in venture capital, the Ocho founder is shrinking the fund side by roughly 43%, canceling capital calls, and, ultimately, sending back money that had already been wired to the fund.

The contraction, Nagpal told TechCrunch, occurred because he’s busy building his own startup and the funding environment has shifted to more realistic expectations: “What looked like a $10 billion outcome is now a $1 billion dollar outcome.” As a result, he says he’s more confident on returning a higher multiple if he’s investing from a smaller fund size.

His LPs were surprised but “super happy” to get the capital back, Nagpal said. Since announcing the cut, the founder says that five different solo GPs have messaged him asking for introductions to LPS who just got capital back. “I think the reality is a lot of these people who are getting money back are actually not going to allocate it to venture anymore.” One of Nagpal’s biggest investors is Tiger Global, which has become notorious for retreating from venture fund bets. His other investors, namely venture funds, will likely use the capital to bet on new startups out of their own fund, he said.

In Nagpal’s case, the move will let him put 90% of his time into his new startup. But he says others in the solo GP world are going through a rough time. Many are shrinking fund goals, extending fundraising timelines, teaming up with investors to avoid team risk or even going toward placement agents, once taboo in the world of fundraising, to help them close investors in exchange for a fee. “Even the ones who are taking it seriously are actually now trying to build a firm, so you’re kind of becoming the thing that you were trying to replace,” he said.

It’s a shift from the fund of fund mentality that felt commonplace last year, in which investment firms cut checks to early-stage, experimental investors to de-risk and even lead first checks into a generation of new startups. At the time, Tiger announced its $1 billion fund to back other funds but has since reneged. Alexis Ohanian and Katelin Holloway’s fund, 776, dedicated $10 million of its $500 million set of funds to back emerging fund managers. (The firm did not respond to requests for comment on an update of the fund allocation.) Other efforts, like Spearhead, a platform to turn founders into angel investors built by AngelList’s Naval Ravikant and Accomplice’s Jeff Fagnan, appear to no longer be active.

The history of solo GPs

Before solo GPs were in the spotlight, they were set aside. LPs weren’t giving lone venture capitalists meaningful capital, but as entrepreneurs with massive networks sought to formalize some of their angel investing operations, the deal sweetened. Add in the fact that platforms like AngelList made it easier and cheaper to set up a fund and handle all associated admin fees, and the jokes started rolling: Anyone with opinions and a following on Tech Twitter could start a fund.

Are solo GPs screwed? by Natasha Mascarenhas originally published on TechCrunch

https://techcrunch.com/2023/03/25/venture-capital-solo-gps/

Image Credits: Prelaunch.com (opens in a new window)

Earlier this week, Haje Jan Kamps interviewed Prelaunch.com CEO Narek Vardanyan to get his perspective on how hardware startups can