Category: TECHNOLOGY
Pro-rata is easier to get than ever today, but investors are thinking twice
Whenever pro-rata rights are involved, you can always smell some drama. When a company raises a financing round, new and old investors often battle it out for the largest stake they can get. While this process can be competitive enough to be considered cutthroat, during the last decade’s bull market, it’s become more or less predictable — new investors generally get their preferred share, while existing backers fight for what they can.
If you’re new to all this, here’s a short explainer: In investing, pro rata is a legal right that allows investors to maintain their ownership stake in a company when it raises capital after they’ve invested. This is critical for early-stage investors and smaller funds, as they can avoid dilution and keep meaningful stakes in their portfolio companies. Traditionally, it hasn’t always been easy for existing investors to exercise this right, as new investors often have the upper hand in fundraises and they can be hungry for a bigger piece of the pie. (If you want to learn more, here’s a more in-depth explanation.)
However, this year is starting to look very different.
“These seed funds went from being told, ‘No, too bad, you aren’t getting your pro-rata’ to, ‘You better cough up some money.’” Loren Straub, GP at Bowery Capital
Venture funding has slowed, with many investors spooked by the current public market volatility or taking a breather after 2021’s funding frenzy. Some startups may still see the same excitement from new lead investors when they look to fundraise, but most won’t.
This means the less lucky startups will likely rely on their existing backers to exercise more or all of their pro-rata allocation. But will their investors even want to do that? It will depend on who they are.
For firms like pre-seed and seed-focused Hustle Fund, which is still deploying capital as usual despite the market’s woes, it’s a welcome change. Eric Bahn, a co-founder and general partner at the firm, said Hustle Fund is glad to be able to increase its share in its predicted winners, which it wasn’t frequently able to do prior to this year.
In search of engagement, Twitter brings algorithmic timelines to Communities
Twitter Communities — the private, interest-based networking feature launched last year — will now gain their own algorithmic-based timelines, similar to Twitter’s Home timeline where the most relevant and engaging conversations will be surfaced. The company announced on Wednesday it would begin testing this option within Communities across iOS, Android and the web, initially with a select group of users.
In this test, the algorithmic-based timeline will be called the “For You” feed, while the chronological timeline will be dubbed “Latest.” Users will be able to switch back and forth between the two options, Twitter notes, and whichever option you set for a given Community will become the default every time you return to that group.
The company said the option will help users keep up with the top conversations in Communities where there is a lot of activity. It then pointed to Communities like a Harry Styles fan group a cooking community and the Xbox Community, as examples.
However, in our experience across over 20 Communities, the issue is not one of struggling to keep up with all the conversations taking place– rather, it’s the lack of conversation that’s the issue.
But these new timeline options could help address that, too, as any tweets with engagement could be bumped up to the top of the feed. This could help make a quieter Community seem more active.
The idea behind Twitter Communities was to carve out a space within Twitter’s larger, public social network where people could connect with others who share the same interests. But in reality, there’s a lot of overlap between Communities and another Twitter feature, Topics, which helps people discover the conversation around a given subject by personalizing their feed with tweets, events, and even ads related to the Topics they follow. In other words, if you’re just looking to tune into the conversation about Apple or startups, for example, you may as well just follow that Topic.
Although Communities could allow for users to more directly connect with people who regularly post about a particular topic, Twitter decided to implement the feature in an odd, semi-public format. Your tweets in Communities are public, but only other community members can reply. This design choice could be limiting participation, as users may not feel comfortable fanning out about their niche interests in public. And since the Community tweets are associated with your main Twitter identity, you still feel as exposed as when you’re posting to the global, public feed.
If you’re in the test group, you’ll be able to choose how you want to view your Community timelines from a new setting in the upper right-hand corner on each Community page, Twitter says, just like on the main Twitter Home timeline.
The change follows other updates to Communities, including giving mods and admins the ability to pin their Community Tweets (web), the addition of communities search (on web and iOS), …read more
Meta is adding a dedicated ‘Calls’ tab to Messenger
Meta is rolling out a new Calls tab for Messenger, the company announced this week. The company says the new tab will make it easier to connect with friends and family through the app in one tap. The new Calls tab is now available globally on iOS and will roll out to Android users in the next few weeks.
The new Calls tab will appear alongside the “Chats,” “Stories” and “People” tabs on the bottom navigation bar in the app. Clicking on the new tab will open up your list of contacts. Prior to this change, users had to open up a thread with a friend to call them. The new tab makes this process easier by allowing users to dial their friends directly. Adding a Calls tab could also be a way for Meta to introduce the option to people who aren’t familiar with Messenger’s calling functions.
Meta says audio and video calling on Messenger has grown at a rapid rate with over 40% more daily callers now compared to early 2020. The company also says that there are more than 300 million audio and video calls globally on Messenger everyday.
The new Calls tab was built by Meta’s Remote Presence org, which is the product and platform team responsible for the set of video and audio calling experiences that power Meta Technologies. Meta says the new Calls tab is one of many features designed to create a space for people to deepen their relationships with others.
Meta has been working to enhance Messenger over the past few months and launched a number of new features. In March, the company added new features and shortcuts, including a new Slack-like “@everyone” functionality that will notify all participants in a chat about a new message. Meta also rolled out a “/silent” functionality. When you type in “/silent” before sending a message in a group chat, the members of the group will not receive a notification of your message at all.
In February, Messenger expanded its “Split Payments” feature to all iOS and Android users in the United States. The company began testing the feature late last year as a way for users to share the cost of bills and expenses through the app. Meta sees the new feature as a “free and fast” way to handle finances through Messenger. Split Payments was introduced alongside the news that Messenger was launching new voice message recording controls so users can pause, preview, delete or continue recording a voice message before sending it. The company also increased the duration of voice messages from one minute to 30 minutes.
Evil Corp hackers evolve ransomware tactics to dodge US sanctions
The Russia-based cybercriminal group known as Evil Corp has shifted to a ransomware-as-a-service model in an effort to skirt U.S. sanctions, according to research from cybersecurity firm Mandiant.
The U.S. Treasury’s Office of Foreign Assets Control, or OFAC, sanctioned Evil Corp in December 2019, citing the group’s extensive development of Dridex malware, which the gang used to steal more than $100 million from hundreds of banks and financial institutions.
Since, Mandiant researchers have observed a number of ransomware intrusions attributed to a threat actor which it tracked as an as-of-yet uncategorized threat group dubbed UNC2165, which the threat intelligence firm says shares “numerous overlaps” with Evil Corp and likely represents another evolution in Evil Corp affiliated actors’ operations.
UNC2165 is a group that Mandiant has tracked since 2019, which almost-exclusively obtains access to networks through an infection chain which Mandiant calls “FakeUpdates,” in which victims are tricked into opening under the guise of a browser update. This was a tactic also used as an infection vector for Dridex infections and was later used by Evil Corp attackers to deploy BitPaymer and WastedLocker, two ransomware variants developed by the sanctioned hacking group.
UNC2165 has also deployed the Hades ransomware, which has code and functional similarities to other ransomware believed to be associated with Evil Corp-affiliated threat actors. Similarly, Mandiant researchers also found overlaps in infrastructure, adding that UNC2165-attributed command and control servers have also been publicly reported by other security vendors in association with suspected Evil Corp activity.
Mandiant says it has also observed the threat actor using LockBit, a prominent ransomware-as-a-service operation, enabling the threat actor to blend in with other affiliates. While this isn’t the first time we’ve seen Evil Corp shift its tactics to avoid sanctions, Mandiant notes that moving toward a ransomware-as-a-service model effectively conceals the other criminal parties who may have selected the target and carried out the intrusion, allowing the hackers to take advantage of the model to carry out their operations in anonymity.
“Based on the overlaps between UNC2165 and Evil Corp, we assess with high confidence that these actors have shifted away from using exclusive ransomware variants to LockBit in their operations, likely to hinder attribution efforts in order to evade sanctions,” said the report. “The adoption of existing ransomware is a natural evolution for UNC2165 to attempt to obscure their affiliation with Evil Corp. Its adoption could also temporarily afford the actors more time to develop completely new ransomware from scratch, limiting the ability of security researchers to easily tie it to previous Evil Corp operations.”
News of another evolution of Evil Corp comes just days after the defunct REvil ransomware gang — which has in the past been linked to activity attributed to Evil Corp — claimed responsibility for a distributed denial-of-service campaign against a customer of cloud networking provider Akamai. However, researchers said it is highly possible the attack is not a resurgence of the infamous cybercriminal group but rather a copycat operation.
South Korean content providers raise service fees in the wake of Google’s in-app payment policy
South Korean app developers and content providers are upping their paid subscription and service fees on Google’s Play marketplace due to the heavy 15-30% commissions now required following Google’s policy changes that force apps to use its own first-party billings and payments system. While South Korean law permits app developers to use a third-party payment option, this only reduces Google’s commission by 4% — and that’s not enough, developers believe. The developers are also frustrated that they can’t add links that point to their own website inside their app which would allow their users to buy directly, bypassing Google’s billing entirely.
Many South Korean non-game platforms like over-the-top (OTT), music streaming, web cartoons and digital books apps, mainly adopted web payments through an in-app link to an outside website. They preferred this system because the weblink payment option does not require commission fees from app developers and Google’s in-app payment was not mandatory for non-game apps until the end of May this year, sources familiar with the situation said. But from June 1st, those platforms must use Google’s in-app payment or the third party payment option.
According to the U.S. tech giant’s blog, “all developers selling digital goods and services in their apps are required to use Google Play’s billing system,” and clarified that apps using external payment links will be removed from Google Play Store, starting in June 2022, in order to comply with Google’s payment policy.
This follows Google’s earlier decision to support third-party payments in South Korea. Google said in November last year it would support alternative billing systems in South Korea following the country’s in-app payment law – the first of its kind in the world – by allowing Android app developers to use alternative payment options alongside Google’s own after South Korea passed a bill that prohibits the app market operators like Google and Apple from forcing apps to use the tech giants’ own in-app payment systems in September.
According to the statement South Korean webtoon platforms – Naver Webtoon and Kakao Entertainment—said recently that they will increase their fee rate when users download their apps and services. But the two webtoon companies will not raise their fee for transactions made through the web because Google’s billing policy only affects in-app payments.
More content providers, including over-to-top platforms, digital books, and music streaming apps, are poised to increase their service fees in South Korea.
Over-the-top (OTT) platforms like Korean telco company SK Telecom’s Wavve, CJ ENM’s TVing, and KT’s Seezn<span …read more
Last call to Volunteer at TC Sessions: Climate and go to TC Disrupt 2022 for free
TC Sessions: Climate & The Extreme Tech Challenge 2022 Global Finals — our first event dedicated to climate tech — takes place on June 14 in Berkeley, California, and we’re looking for a few more incredible volunteers to support our events team.
Sign up to volunteer for work exchange and, not only will you get a behind-the-scenes look at how to produce events, you’ll also earn a free Innovator pass to experience TechCrunch Disrupt 2022, our three-day flagship conference in San Francisco this October.
If you’re interested in event planning, tech startups, climate change — or all of the above — apply to volunteer. It’s a great way to see what it takes to produce a world-renowned startup event.
We expect around 1,000 people at this event, and volunteers will handle a variety of tasks. At any given time, you might help with registration, wrangle speakers, direct attendees, scan tickets or help with general event set up.
Plus, when you complete your volunteer shift, you can attend the interviews, presentations and breakout sessions. Did you know that Bill Gates is one of the speakers? Check out the agenda to see the incredible lineup. Swing by the expo floor where you’ll find these early-stage startups exhibiting the latest climate tech.
Volunteer spots are limited. If you want to gain valuable event experience, take in all the climate-startup goodness and earn a free pass to TechCrunch Disrupt 2022, apply to volunteer before June 7, 2022 to be considered!
Ford to invest $3.7B in U.S. factories, add 6,200 union jobs in push to build more EVs
Ford said Thursday it will invest $3.7 billion and add more than 6,200 new union manufacturing jobs in Michigan, Ohio and Missouri as part of the automaker’s plan to sell 2 million EVs a year globally by the end of 2026.
The new investment will be used to hire union workers at factories in Michigan, Ohio and Kansas, provide healthcare to new hourly employees as well improve working conditions at these facilities. Notably, Ford said it made the hiring investment a year ahead of 2023 contract negotiations with the United Auto Workers union.
The news nudged Ford shares up about 1.85% in morning trading.
Much of the investment will go towards factories building Ford’s EVs, including the F-150 Lightning pickup truck and a new EV commercial vehicle slated to begin production in mid-decade. However, Ford said it is also investing in factories where its gas-powered vehicles are assembled and plans to use some of the funds to produce a new Ranger pickup and Mustang coupe.
As part of the hiring plan, Ford will convert nearly 3,000 temporary employees to permanent full-time status. The automaker said it will also invest $1 billion over five years to improve working conditions at its U.S. factories such as adding better lighting in parking lots, EV charging and providing access to healthier food.
The hefty investment comes a few months since Ford announced a restructuring plan that will split the company into two units. Ford Blue will be focused on existing and future internal gas combustion vehicles like the Mustang, F-150 and Bronco and the Ford Model e unit will oversee the company’s electric vehicle development and production as well as connected car services.
The largest bulk of the investment announced Thursday, about $2 billion worth, will be spread amongst three assembly plants in Michigan. The Rouge Electric Vehicle Center in Dearborn will get funds to increase production of F-150 Lightning electric truck to 150,000 per year. Money will also be invested to produce an all-new Ranger pickup at the Michigan Assembly Plant in Wayne and an all-new Mustang coupe at the Flat Rock Assembly Plant.
Another $1.5 billion will go towards hiring 1,800 union workers at Ford’s Ohio Assembly Plant to build an all-new EV commercial vehicle starting mid-decade, along with an additional 90 jobs and $100 million investment between Lima Engine and Sharonville Transmission plants, the company said.
The remaining $95 million will be used to fill 1,100 union jobs for a third shift at its Kansas City Assembly Plant in Missouri to increase production of the Transit and the all-new E-Transit electric van.
Amazon is launching an invite-based ordering option, starting with the PS5 and Xbox Series X
Amazon is launching a new invite-based ordering experience for high-demand, low-supply products. The company told TechCrunch that the purpose of the new option is to help prevent inventory shortages and price gouging caused by robot traffic for high-demand items with limited quantities. Amazon says its goal is to ensure that genuine customers are able to purchase these sorts of products. The new program is launching in the United States today, starting with PlayStation 5 and Xbox Series X game consoles sold and fulfilled by Amazon.
“We work hard every day to provide customers with low prices, vast selection, and fast delivery,” said Llew Mason, the vice president of consumer engagement at Amazon, in a statement to TechCrunch. “This includes developing a shopping experience where customers can purchase the items they’re interested in without having to worry about bad actors buying and reselling them at a much higher price.”
The new ordering option will allow customers to request an invitation to buy high-demand items from the product detail page, at no additional cost. Any customer with an Amazon account can request an invitation to purchase the item, which means that you don’t need a Prime account to send in a request.
An image provided by Amazon shows that items that are part of the program will have a notice indicating that they’re “available by invitation.” The product page will also note that it’s a “high-demand item with limited quantities” and that Amazon “won’t be able to grant all requests.”
In order to ensure that genuine customers receive invitations to purchase, Amazon will remove bot-like submissions and send invitations to remaining customers. The company will verify genuine customers by looking at a number of factors, including the account’s prior purchase history and when the account was created. If the customer’s invitation to purchase is granted, they will receive an email with instructions on how to purchase the item.
The email will detail how long you have to complete the purchase. It will also include a link to the item so you can place the order. Once you’re taken to the product page, you can add the item to your cart or select “Buy now.” The product page will also show you how many hours and minutes you have before your invitation expires. Amazon will grant more invitations to purchase as it receives more units of that item in stock.
Amazon says that although bad actors make up a small percentage of activity on its marketplace, it’s committed to preventing them from negatively impacting the shopping experience for users. The new ordering experience should give Amazon customers a better chance at getting their hands on high-demand products with limited quantities because it aims to eliminate bad actors who buy products and then resell them at higher prices, which has been happening with gaming consoles over the past years.
At launch, the new ordering option will be available for the PlayStation 5 and Xbox Series X in the United States. Amazon plans to expand the program to …read more
https://techcrunch.com/2022/06/02/amazon-invite-only-ordering-option-ps5-xbox-series-x/
Chainguard raises $50M to guard supply chains
Chainguard, a startup that focuses on securing software supply chains, announced today that it has raised a $50 million Series A funding round led by Sequoia Capital. Amplify, the Chainsmokers’ Mantis VC, LiveOak Venture Partners, Banana Capital, K5/JPMC and CISOs from Google and Square, among others, also participated in this round.
In addition to the new funding, the company, which is only 8 months old at this point, also launched its first set of container base images today, which Chainguard promises to have zero known vulnerabilities and which will be continuously updated. These images will be fully signed and will feature a software bill of materials (SBOM).
“Security engineers are used to reasoning with roots of trust by using two-factor authentication and identification systems and establishing trust with hardware by using encryption keys. But we don’t have that for source code and software artifacts today,” said Dan Lorenc, co-founder and CEO at Chainguard. “Our vision is to connect these roots of trust throughout the development lifecycle and across the software supply chain and give developers and CISOs alike confidence in the code they’re running in production and the integrity of their systems.”
In addition to these new base images, Chainguard already offered its Enforce service for containerized workloads. Built on top of the sigstore, the open source tools for cryptographically signing code, verifying those signatures and making all of this data auditable, as well as other open source tools like Knative and other cloud-native services, Enforce allows businesses to enforce their supply chain policies based on the SLSA framework and NIST’s Secure Software Development Framework. With this they can, for example, enforce which code can run where and ensure that developers and security teams know what’s being used to build software inside a company.
Since few developers want to add more tools to their repertoire (you can only shift so far left, after all), the team aimed to make installing its service as easy as running a single command and also offers support for automation systems like CloudFormation and Terraform.
The fact that Chainguard puts an emphasis on protecting cloud-native technologies is no surprise. Among its co-founders are Ville Aikas, Kim Lewandowski, Matt Moore (CTO) and Scott Nichol, who were all previously at Google and heavily involved in the open source community.
I met with Aikas, who was part of the early Kubernetes team at Google and the tech lead for Knative Eventing, at the KubeCon/CloudNativeCon event in Spain last month. He noted that Enforce is very much the first piece of the puzzle for Chainguard.
“Enforce comes with the mindset that we understand that the chain is long and we are going to start tackling it, not with the mindset of ‘oh yeah, cool, here’s the ‘secure-my-shit flag.’ We don’t build snake oil. The idea is that we build a solid technology platform that we can then use and come in and add features and start plugging holes in different chains. Enforce is …read more
https://techcrunch.com/2022/06/02/chainguard-raises-50m-to-guard-supply-chains/
Why it isn’t easy to throw cloud spending on the cutting block
There’s been an onslaught of negative economic news of late, with gloom and doom aplenty out there. However the economy plays out in the coming months, people perceive that there is turbulence ahead and are behaving accordingly.
One thing businesses may try to do is rein in cloud infrastructure spending to reduce the substantial bills they have from AWS, Azure, Google Cloud, and others. But simply wanting to cut costs and actually being able to do it are two entirely different matters.
What you can’t do is limit your ability to operate your business in the name of trying to cut expenses.
It is clear that cloud bills are becoming a big part of the operating budget of many companies. The cloud has allowed company bookkeepers to shift computer spending from capital expenditures to operating expenditures — theoretically paying only for what you use — but in reality, there can be a lot of waste, and you don’t want to pay for resources you aren’t using regardless of the economy.
A shift toward profitability over growth
While public cloud infrastructure is consumed by most (if not all) industries to varying degrees, it is in the technology sector that we expect to find the greatest cloud spend as a percentage of operating costs; tech companies built atop public clouds from birth see their infrastructure spending expand with time, making them lucrative customers of AWS, Azure and others — and potentially those with the most incentive to hunt for savings.
But there is more than just relative spend to consider. According to data from a recent software valuations report from venture shop Battery, investors have shifted their operating preferences.
The data that the venture group collated and shared with TechCrunch dealt with companies at varying points of balance between growth and profit. There is a natural tension between the two, with startups often absorbing heavy losses in the name of growth. The Battery dataset, however, makes clear that there has been a shift in market perception recently. Before 2022, tech companies that lost more money but grew more quickly were awarded richer valuation multiples than the peers who were more profitable but growing more slowly. In 2022, the situation inverted.
Tech companies are now rewarded for indexing more heavily toward profitability than growth, though, naturally, companies that sport both quick growth and strong profitability remain the most valuable. As investors put more weight on profitability, reducing spending in non-human expense categories becomes critical. Layoffs are far harder to execute than cuts to public cloud spending in terms of internal message, external branding and morale, for example.
Major cloud players will not relish their tech customers looking to reduce their public cloud line item, but for the technology companies in question, following investor wishes is a way to preserve corporate value. In a falling stock market, that’s a critical task.
The incentives have changed, making cloud spend reductions more attractive than ever. But how much can tech companies really hope to cut?
https://techcrunch.com/2022/06/02/why-it-isnt-easy-to-throw-cloud-spending-on-the-cutting-block/