The good news for long-term software growth

While the venture market continues to digest a new reality, the TechCrunch+ crew has been paying very close attention to software earnings. Why are we tracking earning results for Q4 2022 in March 2023? Because lots of software companies have fiscal calendars that end on January 31 of each year. That means they report their results a bit later than other companies, leading to some lag when it comes to sorting out how many of the most important public comps for startups are performing.


Hello, friends, Alex here. Anna is out this weekend, but we expect her return in short order. A big thank-you to her for letting me write the Exchange newsletter for you today. It’s great to be back!


As always, we’re looking at public-market data for tea leaves that we can relate back to the comparatively opaque private-market companies that we cover here at TechCrunch.

Salesforce, beleaguered by external criticism concerning its cost structure and investor pressure regarding its growth rate, bested expectations in its trailing results and projected greater profitability. Okta was another standout reporter from the week, beating expectations and putting up guidance that investors liked.

The good news for long-term software growth by Alex Wilhelm originally published on TechCrunch

https://techcrunch.com/2023/03/04/the-good-news-for-long-term-software-growth/

Daily Crunch: Japanese marketing tech firm Geniee acquires Zelto for $70M

Tapping the ocean for energy led to disasters like the Deepwater Horizon oil spill, which released nearly 5 million barrels of crude oil into the Gulf of Mexico in 2010. Today, wind power and wave action are just two technologies leading investors to take a closer look at ocean conservation technology, reports Tim De Chant. To learn more about the opportunities they’re chasing and to discover how climate change is shaping their investment thesis, he surveyed:

  • Daniela V. Fernandez, founder and CEO of Sustainable Ocean Alliance, managing partner at Seabird Ventures
  • Tim Agnew, general partner, Bold Ocean Ventures
  • Peter Bryant, program director (oceans), Builders Initiative
  • Kate Danaher, managing director (oceans and seafood), S2G Ventures
  • Francis O’Sullivan, managing director (oceans and seafood), S2G Ventures
  • Stephan Feilhauer, managing director (clean energy), S2G Ventures
  • Sanjeev Krishnan, senior managing director and chief investment officer, S2G Ventures
  • Rita Sousa, partner, Faber Ventures
  • Christian Lim, managing director, SWEN Blue Ocean Partners
  • Reece Pacheco, partner, Propeller

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PST, subscribe here.

Hello, you crunchy Crunchers! If you’ve been slacking and not bought yourself a Disrupt ticket yet, that’s cool, we still love you. But here’s a hot tipThis is your last chance for super-early-bird tickets, so maybe get on that sooner rather than later!  — Christine and Haje

The TechCrunch Top 3

  • All roads lead to acquisitionManish writes that after Japan’s Geniee acquired AdPushup-operator Zelto for $70 million. He called the deal “a remarkable turnaround” for Zelto, a company that has stared down a few near-death experiences, including cash flow and product market fit problems, during its 10-year-old life.
  • Sweet (South) Carolina, bup, bup, bup: VW-backed Scout Motors has plans to build a $2 billion factory in South Carolina to produce its all-electric vehicles. Tim Stevens has more.
  • FinedManish also writes about India’s central bank, which fined Amazon’s payments unit over $370,000, claiming the company was noncompliant with certain know-your-customer guidelines.

Startups and VC

While most established automotive players call the shots from sprawling, corporate palaces, Scout bases much of its operations — at least for now — out of a WeWork near Washington, D.C., Tim Stevens reports. Scout Motors’ base of operations will eventually “anchor” near the $2 billion factory in South Carolina that was announced Friday, and the company plans to bring rugged, retro cred to the EV era.

And we have five more for you:

To fix the climate, these 10 investors are betting the house on the ocean

Image Credits: Liang Wendong/VCG (opens in a new window) / Getty Images

Tapping the ocean for energy led to disasters like the Deepwater Horizon oil spill, which released nearly 5 million barrels of crude oil into the Gulf of Mexico in 2010. Today, wind power and wave action are just two technologies leading investors to take a closer look at ocean conservation technology, reports Tim De Chant. To learn more about the opportunities they’re chasing and to discover how climate change is shaping their investment thesis, he surveyed:

  • Daniela V. Fernandez, founder and CEO of Sustainable Ocean Alliance, managing partner at Seabird Ventures
  • Tim Agnew, general partner, Bold Ocean Ventures
  • Peter Bryant, program director (oceans), Builders Initiative
  • Kate Danaher, managing director (oceans and seafood), S2G Ventures
  • Francis O’Sullivan, managing director (oceans and seafood), S2G Ventures
  • Stephan Feilhauer, managing director (clean energy), S2G Ventures
  • Sanjeev Krishnan, senior managing director and chief investment officer, S2G Ventures
  • Rita Sousa, partner, Faber Ventures
  • Christian Lim, managing director, SWEN Blue Ocean Partners
  • Reece Pacheco, partner, Propeller

Three more from the TC+ team:

TechCrunch+ is our membership program that helps founders and startup teams get ahead of the pack. You can sign up here. Use code “DC” for a 15% discount on an annual subscription!

Big Tech Inc.

It was only a matter of time before another company would try to mimic what Instacart has going for it. Today that is Uber. Rebecca writes that Uber is coming for Instacart with some updates to its one-year-old Shop and Pay feature that lets delivery workers opt in to receiving trips to do grocery or other retail shopping for customers before dropping off orders at the customer’s door. “Basically, it’s Uber’s attempt to follow the Instacart model, which is working well for the incumbent grocery delivery company,” she reports.

Autonomous trucking company Embark Trucks, which went public in 2021, is now laying off about 230 workers as it explores liquidating its self-driving truck assets, Kirsten reports.

And now here’s six more for your Friday:

Daily Crunch: Japanese marketing tech firm Geniee acquires Zelto for $70M by Christine Hall originally published on TechCrunch

https://techcrunch.com/2023/03/03/daily-crunch-japanese-marketing-tech-firm-geniee-acquires-zelto-for-70m/

Vigilante hackers fix Black Ops III, and other TC news

Welcome back to the TechCrunch Podcast, where I’m standing in for Darrell while he’s honeymooning with his lady love. This week, I sat down with Amanda Silberling and Mary Ann Azevedo to talk through some of their interesting stories.

You can listen below or subscribe in iTunes or Spotify to get new episodes delivered weekly on Fridays!

News articles from the episode: 

… and the longer interviews: 

One more thing… 

Love podcasts? Don’t miss our mini feature series Inside Startup Battlefield, where we go behind the scenes to learn more about what it’s like to participate in the most famous startup pitch competition ever: TechCrunch Disrupt Battlefield!

Vigilante hackers fix Black Ops III, and other TC news by Haje Jan Kamps originally published on TechCrunch

https://techcrunch.com/2023/03/03/vigilante-hackers-fix-black-ops-iii-and-other-tc-news/

Honda’s aging hydrogen fuel cells get new life in data center

Honda bailed on the Clarity — its only hydrogen-powered car in the U.S. — but the automaker hasn’t quit on fuel cells.

That’s the message Honda sent with a peculiar announcement today: It’s putting some old Clarity fuel cells back to work, combining them into a backup power system for its data center just south of Los Angeles.

This is just a “proof of concept,” Honda told TechCrunch, but it aims to commercialize the tech and sees potential applications beyond helping data centers keep the lights on.

The used fuel cell systems in Honda’s backup-power demonstration once powered leased Clarities (via an electrochemical reaction that combines hydrogen and oxygen to generate electricity). Honda retired these used fuel cells for transport, but they apparently still work well enough to drive its server farm in case of a power failure. Previously, Honda relied on diesel for backup power at the facility. (Honda said it uses this particular data center to “securely maintain and access its proprietary data,” because “automotive design is data intensive.”)

It’s nice to hear that Honda found a use for its old fuel cells, but crucially, this demonstration isn’t as environmentally friendly as it could be. The company told TechCrunch that it isn’t exclusively using green hydrogen in the pilot, which means at least some of it was generated via fossil fuels.

This is the trouble with using hydrogen to generate electricity: Fuel cells do so while spitting out only water and heat as exhaust, but they’re still indirectly pollutive if that hydrogen comes from dirty sources (as most hydrogen fuel does). Correcting this demands a whole lot more green hydrogen production, on top of whatever infrastructure is needed to deliver the hydrogen. This is why some automakers don’t believe in the future of hydrogen-powered cars; they argue it’s simply too much work to go that route.

But! Honda still believes in hydrogen-powered cars. In fact, this demonstration is also kind of an ad for Honda’s next-generation fuel cells, which the company developed with General Motors.

As Honda tells it, the next-gen fuel cell systems will power its upcoming hydrogen-powered vehicle, which is “based on the Honda CR-V” and is due in 2024.

Honda also plans to use these new fuel cell systems for backup power as it scales the tech. That means this effort won’t be as circular, if at all, when it’s commercialized. Yet, on the upside, Honda said it intends to exclusively use green hydrogen when it commercializes the backup-power units.

Beyond data centers, Honda added that it’s considering other applications, including “peak shaving.” This means Honda thinks industrial customers could use its generators at peak times, when electricity is priciest and grids are strained.

Honda said it aims to develop its proof of concept into a “new business model.” Yet, the pilot is also a convenient way for the company to talk up its new fuel cells. As battery-electric cars permeate the U.S. market, Honda has an interest in keeping hydrogen in headlines.

Honda’s aging hydrogen fuel cells get new life in data center by Harri Weber originally published on TechCrunch

https://techcrunch.com/2023/03/03/hondas-aging-hydrogen-fuel-cells-get-new-life-in-data-center/

Inside the metaverse hype train at MWC 2023

TechCrunch took a very similar VR trip at MWC a full

Metaverse hype was hanging like a multicolored fog over the Mobile World Congress (MWC) connectivity trade show in Barcelona this week.

Conference organizer, the GSMA’s, program pitched attendees into a smorgasbord of metaverse-themed discussions — most of which seemed designed to generate maximum FOMO, as a parade of tech evangelists took to the stage in Spain, armed with a new generation of acronyms and luridly colored slide-decks, urging the audience not to sweat the detail of whatever this metaverse thing is (or isn’t). And just focus on monetizing it before someone else does.

Europe’s carriers are fully onboard the technicolor hype machine. At MWC they sought to train the show’s global spotlight onto the role of network infrastructure — arguing their pipes-cum-platforms will be essential connective tissue for all this sexy virtual world building, connecting “everything, everywhere”, as one overly-ambitious show floor slogan put it — and using that logic as a springboard to press EU lawmakers for a radical rethink of how connectivity is funded in the here and now.

The CEOs of Orange, Telefonica and Deutsche Telekom were among those taking to MWC’s keynote stage to sound off about the hard economic realities of running such critical infrastructure. The returns vs investment situation is becoming unsustainable, they warned. Especially if policymakers want them to deliver a truly immersive future and make this metaverse thing happen. Subsidize our network upgrades or the connectivity party is over, was the thinly veiled message to EU lawmakers.

The paradigm shift carriers are looking for is a new business reality under which they get to charge tech giants for piping data to popular apps in addition to billing consumers for their Internet access. They aren’t calling this double dipping — or even a Big Tech tax. Their lobbying brands the ask a “fair share” for building connectivity’s 3D future.

Telcos’ frustration at the relatively greater success of app makers, when it comes to monetizing highly scalable software running atop their fixed infrastructure, is nothing new of course. Nor is it the first time European carriers have used the MWC stage to try to lobby the EU for more ‘support’. But metaverse hype creates a fresh opportunity to bring out their begging bowl, dressed up in a new brand of distracting dazzle.

It’s too soon to say what will flow from an exploratory EU consultation on future network funding which was launched on the eve of MWC. But the current Commission does appear to have drunk some of the carriers’ Kool Aid. And the EU’s internal market commissioner, Thierry Breton, dropped into the conference in person — taking a turn on the stage himself, where he hyped a vision of “Web 4.0” as “seamless interconnectivity” powering “virtual twins” and “the copy of everything” — before making some encouraging noises about the case for rethinking operator business models — so this is, for sure, an area to watch…

But what is the metaverse anyway? Something immersive, which blends the physical and virtual, was about as close to a plausible-sounding definition TechCrunch heard across three days of connectivity industry chatter this week. However there was no shortage of takes on what it is (or isn’t) — and we also heard claims to the contrary; for example that immersion isn’t a necessary component at all. Consensus there was none.

Predictions of how many trillions the metaverse opportunity could be worth by 2030 also ranged wildly — from $1.7tr (PwC) to $5tr (McKinsey) to $8tr (Morgan Stanley), according to one over-enthusiastic speaker’s slides. However he caveated these guestimates by conceding they’re pegged to a flavor of metaverse that includes NFTs and Web 3… So not actually an immersive 3D future at all then?

With such shape-shifting definitions on show, splashy claims of “tremendous opportunity” felt more than a little unreal. And as TechCrunch hiked across vast exhibition halls, notably less populated than in pre-pandemic years, the metaverse concept seemed to be both everywhere and nowhere; both a major theme of the conference organizers’ programmed discussions and yet elusive at the show itself — at best, a fuzzily drawn theoretical future. One which, outside the pages of science-fiction, still seems largely out of focus — hovering somewhere out there, over the horizon. Maybe.

Enter the metaverse?

Hold that thought! A Day 3 MWC keynote session — emblazed with a call-to-action title: ‘Enter the metaverse’ — was teed-up by a moderator in full hype mode. She kicked off by asking the audience if they’d already been in the metaverse. And a solid smattering of hands shot up immediately. Yet her hot take on this (frankly confusing) display was to express disappointment that she couldn’t see lots more affirmatives. Which was discombobulating to say the least. As if we’d somehow wandered into an alternative reality.

The next speaker, from a Web 3.0/NFT startup called Dimple — a self-styled “interactive metaverse platform” with the goal of bringing “Web 3.0 metaverse and digital goods/NFT projects to the mainstream”, one QR-code bearing physical-to-digital teddy bear at a time (don’t ask) — went on to hype the size of the market opportunity by suggesting that looking at AI generated virtual influencers on YouTube or Instagram was somehow a metaverse experience… So, er, confusion seems to be the tech’s strongest certainty at this point.

“We have a definition of the metaverse that it’s ‘the merge’ of the digital with the physical,” said Nokia’s Leslie Shannon, head of trend and innovation scouting for the telecoms kit maker, taking a stab at defining terms on another of the many metaverse panels peppering the MWC23 agenda. “That’s fundamentally it. There’s a lot more you can put in there — I would add real-time,” she expanded before plugging her book (on, you guessed it, the metaverse).

Shannon went on to argue that the metaverse — or metaverses, plural — is not about immersion; rather she suggested the crux is “real-time presence”.

“It’s linking you in your physical reality with information or a person or a place that is physically somewhere else and bringing that to you in your physical reality but not taking you away from that physical reality,” she offered, before coming to a self-induced hard stop (presumably to avoid things getting too confusing again) — but not before sounding a sceptical note over Web 3.0 evangelists trying to shoehorn their stuff into the metaverse. (“There’s some metaverse iterations out there that are kind of [fad or fraud],” she warned. “Not all metaverses are equal.”)

Also speaking on this (McKinsey-sponsored) panel — which, per its moderator, posed the “provocative” question of whether the metaverse is ‘the future, fad or fraud’ — was VR headset maker HTC’s Alvin Wang Graylin, the hardware firm’s China president and global VP of corporate devices.

He offered a plainer take on what metaverse is — dubbing it “just the 3D version of the Internet”; something he suggested researchers and technologists have been incrementally inching toward the past 30 or 40 years. So just an evolution of the connectivity we already have then?

But what does a “3D internet” actually mean for human communication? And wasn’t Second Life basically doing that around two decades ago?

His remarks during the panel didn’t illuminate why more immersive connectivity is going to be especially interesting or transformative. He just argued that Second Life had been too early but now, decades on, with better tech (and content) coming down the pipe, the same sort of 3D world experience would somehow become more compelling.

“Now you have AI happening all around us where you see, you know, amazing kinds of content created, amazing kinds of interactions,” he offered. “Having hand-tracking, eye-tracking, full body tracking. Without AI, that’s not possible, right. So all of these things are maturing at the same time — so that now you can actually have a satisfactory experience [inside virtual worlds]. That’s something that wasn’t possible 20 years ago.”

Nokia’s Shannon had a more direct go at trying to identify a problem for the metaverse to fix — by suggesting putting screens on people’s faces could save us from having to stare at other types of screens, as we’re doing now, here on the plain old 2D Internet.

“If we want to interface with a computer we have to stare at a screen. And [have] our gaze dead-ending in a screen. That’s the problem you’re talking about right there. And so the metaphor is by taking the screen away, and especially the head mounted devices, that reconnects our gaze with the physical world and the people in it,” she suggested. “I think the metaverse is actually going to solve the kind of unspoken screen problem that we have right now.”

But if we’re talking about adding yet more technology into the already cluttered personal mobile and smart device computing mix — stuff that explicitly needs to sit on the face to work (in the case of AR/VR googles) — a more realistic scenario is surely that we’ll end up with even more distraction and abstraction of the human gaze, not less. However no one on this evangelical panel wanted to talk about information overload and the metaverse.

A different set of speakers, programmed deep in the afternoon of Day 3, had been given a 45 minute slot on the keynote stage to pay lip-service to an emerging spectrum of metaverse-linked concerns — from privacy and information overload; to disinformation/manipulation and new forms of tech addiction; to questions of equity and inclusion atop an already yawning digital divide; to the increasing challenge around explainability and transparency of AI-driven technologies; to the crippling environmental costs attached to energy requirements associated with all this immersive world-building, to name a few of the immediately obvious ones.

This panel was entitled ‘Ethical approaches for immersive realities’ — a name that studiously avoids the M word (presumably as the GSMA didn’t want to derail its own hype train) — and the four speakers (plus talkative moderator) barely had time to make introductory remarks before their allotted stage time was up.

“Sometimes I think we’re discussing problems that we don’t have without solving the problems that we have,” said Ricardo Baeza-Yates, a professor at the Institute for Experiential Artificial Intelligence of Northeastern University, who sounded world-weary and exceedingly pessimistic about the accelerating direction of tech industry travel. He went on to warn that people must have the right not to participate in these highly immersive commercial spaces being designed to suck them in.

“Today, it’s very hard to have the right to the unconnected — to talk to a person, to do something, to be able to complain without using Twitter, or to be able to ask something without using WhatsApp,” he pointed out. “You see that every day. So if you don’t have the right to be outside whatever some person wants to invent that’s a problem because it’s not a consensus between all the people to do that. So I think that sometimes we’re being forced by technology. And ethics is always [lagging] behind.”

“I think we are moving too much to perception,” he also warned. “We don’t understand reality… How many people will become addicted and then we’ll have another kind of problem — of mental health. Because there’s already people addicted to these things. There’s many people who are really addicted to gaming — and this [immersive metaverse] is one step forward.”

“The best case scenario is a metaverse that is respectful to the analogue,” suggested another of the panellists, Carissa Veliz, an associate professor at Hertford College University of Oxford, also speaking up for the richness of living in the real world. “There’s so much richness in the physicality of life, in how we feel when we see someone in person, when you embrace someone, when you go to a coffee shop and meet with friends.

“Virtual reality can be very rich, and it has a place and it can enrich our lives. But it can never substitute for the physicality of life. So if we neglect the physicality of life — in virtue of the digital — we’re gonna regret it. And by the time we regret, it’s too late. Because the coffee shop has closed, and it cannot be recovered. So the way ahead, is to cherish the analogue as well as a digital.”

“There’s so much a stake,” she added. “Our way of life is at stake. Democracy is at stake. So yes, we have to convince corporations that there is a competitive advantage in being ethical — in having privacy.”

There were not that many people physically sitting in the hall to listen to this panel (albeit, some of the MWC23 keynotes were streamed) — and the audience seemed a bit disengaged from the discussion. But, frankly, it was hard to hear what the speakers were saying (Baeza-Yates had been given a particularly crackly microphone) — let alone start to unpack all the nuanced issues they were raising in the quantum of time allowed.

Conference-goers could also be forgiven for being distracted by thoughts of how to achieve their next coffee ‘pitstop’ — far from any friendly local coffee shops. Tracking down places to get fed and watered at MWC is a very tedious business — involving long walks and queues and paying airport-style prices for airport-quality fare (after which you typically have to hunker down on a corner of bare carpet to eat your expensive plastic salad bowl as all the chairs and tables are already taken). In such hostile physical surroundings, the prospect of being able to teleport into a 3D world and attend a virtual version of the conference almost felt like a disruptive use-case for the metaverse. But, well, that’s probably not the massive selling point the tech industry is dreaming of.

In any case, not attending MWC in person would have meant missing out on experiencing some of the things this year’s exhibitors were touting as metaverse experiences.

Case in point: If you walked a little way over from the hall where HTC’s Wang Graylin had suggested there’s no true metaverse tech to be tapped into yet — and you were willing to queue up for maybe an hour (or just blag your way to the front by claiming to be an influencer), you could take a trip in a VR urban mobility ride parked at SK Telecom’s stand — which was explicitly branded an “AI metaverse” experience.

SK Telecoms urban mobility vehicle AI metaverse experience at MWC 2023

Image Credits: Natasha Lomas/TechCrunch

TechCrunch took a very similar VR trip at MWC a full seven years agothe main difference being the earlier VR ride installation was a ground-tethered hot air balloon. (VR + hot air? Yes, really.)

Back then, there was no talk of metaverse; it was all virtual reality hype. (And, well, we know what happened next.) But both these VR rides delivered a very similar experience of scary mock proximity, with the craft seemingly (not actually) soaring alarmingly close to virtual objects that left you clutching on to the physicals for dear life and hankering to be back on terra firma.

Both rides also left a stomach churning sensation that lingered like a bad lunch. So if this is really a taste of the metaverse it’s going to be a tough sell.

But if HTC’s Wang Graylin is on the money, neither of these experiences is really metaverse (yet).

And, well, we tend to agree. Both rides felt more retro than next-gen — harking back to arcade (or fairground) simulator rides from the 1980s. (The ones that paired high octane on-screen motion with jerking locomotion as the faux car you were strapped into jigged atop a cluster of pumping pistons for a thrilling (or sickening) few minutes.)

The updated urban mobility joyride SK Telecom was showing off was immersive enough, sure. We even had to close our eyes a bunch of times to avoid feeling quite so unwell during the visually erratic flight. But, basically, it served up the same rollercoaster-style stomach lurches and drops as the VR hot-air balloon, all the way back in March 2016. Nor was there an obvious improvement in the quality of the content all these several years later. The vista of the high rise harbor city we ‘flew’ around this time looked more myopic than crisply rendered — even mediated through the more modern VR goggles strapped to our faces in 2023. (Screens in 80s’ simulator rides weren’t exactly high def, either of course, but those rides could still give you full-throttle motion sickness.)

At bottom, it’s the same (old) trick. The human brain doesn’t need a lot of stimuli to feel physically unsteady — just sit on a stationary train as another passes slowly by and you can feel like the carriage you’re sitting in is rolling backwards. Certain visual illusions can create a feeling of self-motion (vection), as a result of a large part of your field of vision moving, which may also trigger vestibular illusions (dizziness, vertigo etc) that can leave you with biomechanical illusions (aka, sea legs) once you’re done.

And getting shakily out of SK Telecoms’ mock flying taxi at the end of our brief virtual trip that didn’t really lifted off the show floor we could check off a bit of all three… Tbh, though, it feels like the far bigger trick for the metaverse to pull off would be to deliver a stable, comfortable virtual world experience — one that doesn’t leave the user feeling dog-sick and hankering to get back to the real world.

Bottom line: The idea of spending long stretches of ‘effortless immersion’ in virtual 3D worlds — without nausea, eye strain, headaches or vague and/or unpleasant sensations of discombobulation — still sounds like pure science-fiction to this reporter, more than half a decade after our last unpleasant ride on this hype train.

Far better devices and radically retooled networks — not to mention an infinite supply of amazing content — are going to be needed to get to a more comfortable and/or capable place, metaverse evangelists suggest. None of which are on the horizon as far as we can see. (Unless you’re betting on Apple’s long rumored but much delayed mixed reality headset being a category game-changer — if/when it does eventually land.)

Plus, if you believe Europe’s carriers, the network side of things won’t be ready for lift off unless/until we’re prepared to let telcos generate revenue off of others’ digital content and creativity — with goodness knows what kind of implications for the stuff we get to experience online.

Let’s get phygital, phygital…

All these hard realities haven’t stopped the industry’s metaverse hype train leaving the station, of course. And all four speakers on the ‘future, a fad or a fraud’ panel — which also included reps from telecoms kit maker ZTE; and Tonomus/Neom, a Saudi Arabia-based smart cities builder — duly voted metaverse is “the future” — violently agreeing that some form of ‘phygital’ experience (to use an even less lovely neologism we also saw being bandied about during the week) — is 100% inevitable. Just like the arrival of that oncoming train in the Matrix.

Will humanity leap out of the way of the metaverse hype in the nick of time — or be struck full in the face? We’ll just have to wait and see.

Oddly enough, given the metaverse-heavy programming, Meta — the tech giant formerly known as Facebook before it pivoted to rebrand as “Meta: a metaverse company” — had a very low-key presence at the show. Earlier last month, Kevin Salvadori, its VP of networks, had been listed as a speaker on the ‘future, fad or fraud’ panel. But perhaps he reconsidered when he saw the title — because, on the day, his name went unmentioned and a Meta spokeswoman that we spotted on the show floor was unable to explain why.

A few weeks earlier, the social networking giant had told us it wouldn’t have any spokespeople available to talk about its vision for the metaverse at MWC. (Global affairs VP Nick Clegg was presumably too busy to pop to Barcelona after his recent trip pressing royal flesh in Dubai — a place that’s apparently intent on becoming a top 10 metaverse economy by 2030, whatever that means). So it appeared that the original metaverse cheerleader wouldn’t be showing off its tech in Barcelona.

However we spotted a tiny Meta-branded demo stand tucked away alongside the ministerial program area on an upper walkway above the show floor.

A spokeswomen manning the stand told us the installation had been set up so it could demo its mixed reality product (Quest) to policymakers without them needing to make a detour to see it. Which didn’t exactly sound like a massive vote of confidence in the pull-power of the technology. But she also said Meta had a larger, private demo area at the show — viewable by invite only. (Apparently not intended for press either.) So it’s funny to consider how much of the ‘way-paving’ for future virtual world-building is going on behind closed doors, out of our ear-shot.

Meta's demo stand for Horizon Quest at MWC 2023

Image Credits: Natasha Lomas/TechCrunch

How long will it be before some kind of metaverse exists for anyone to hop into? To our eye that’s a bit like asking how long is a piece of string. But HTC’s Wang Graylin stuck out his neck this week and suggested the full Neal Stephenson Snow Crash vision (I mean, assuming humanity actually wants that!) could be as soon as five years away! Or, well, possibly ten.  

“A lot of people think that the metaverse is already here. I just want to re-emphasise we’re just starting to get into that process,” he said. “For the metaverse as it’s intended, as it’s described in something like Snow Crash, we’re probably five to 10 years away… A lot of people say ‘Oh, we’re building the metaverse or we’re building a metaverse’. None of those are really true. If they’re telling you that they probably don’t know what they’re talking about.”

He went on to predict that “most people will migrate to an XR device to do a full immersive experience in this 3D Internet” over this several year/up to a decade-long period — laying out a rose-tinted scenario under which the former smartphone-focused VR headset maker is set for a massive upswing of fortune in the coming years, from VR niche ‘zero’ to mainstream metaverse ‘hero’. Which sure sounds convenient for his employer.

What exactly he was basing this bullish forecast on (besides wishful thinking) wasn’t clear. But he did volunteer the idea that China could be the first country to create a critical mass of momentum which drives the development needed to turn a fictional concept into a real-world reality.

“There’ll be places like China that will try to create a national managed metaverse across multiple enterprises that are running within that region,” he predicted. “Whichever [government] creates a large enough critical mass will be able to teach us a lot in terms of having a multi-100 million or billion user type of environment — will teach us what is the proper way to manage a 3D Internet? And the types of experiences, the type of services that are going to be needed. And the types of equipment that will be preferred, etc. The topic and use-cases that will be most suitable.

“So I think China is actually in a very good position to be one of — or if not the first country — to create a billion person metaverse experience. And I think could actually be very helpful for creating learning about the task to the rest of the world.”

Unfortunately, the panel ran out of time to delve into what a billion person metaverse entirely controlled by the Chinese Community Party might look and feel like for citizens living under the regime’s tight societal controls. (Or indeed for Uyghur Muslims — whose very physical existence China stands accused of trying to wipe out.)

The speakers also didn’t have time to weigh in on what the rest of the world might ‘learn’ from watching the development of a massive state-surveilled metaverse in China — but hopefully the main takeaway from that would be what not to use metaverse technologies for.

Earlier in the session, Nokia’s Shannon had offered her own fuzzy prediction on when something truly worthy of the metaverse label might exist. But she mainly encouraged delegates not to sweat such details — and just lean into making it happen — suggesting that, like the Internet, it’s a case of build it and they will come. All you need to do is believe! (Or “imagine possible”, to borrow another of the show floor slogans we cringed over.)

“Where we are in terms of the metaverse is kind of the 1993 time of the internet,” she said. “We’re at a point where we can see that there’s something here. We’re not really sure what it is — so we really have to, and this sounds kind of silly, we really have to believe. And we really have to build the infrastructure. Because once the infrastructure is in place, the entire end — all the way from the headsets, through the networks, to the data centres to the cloud — when all of that’s in place, that’s when the creatives can come in and show us what this thing is really for.

The GSMA’s annual conference is always big on buzzy talk of ‘accelerating the future’ into humanity’s eyeballs — whatever flavor happens to be in fashion at the time (4G, 5G, ‘intelligent connectivity’, AI etc etc); and usually without really stopping to ask if the claimed next innovation is what most of us want or need (or just another way to try to package and sell more stuff). But the scale of change required to shift the mixed (and at times messy) reality of how humans currently communicate with each other digitally — into some kind of ‘whole body’ real-time networking experience, without that being either horribly gimmicky, violently unpleasant or just a cripplingly expensive form of social gaming — looks truly staggering.

Clearly, a Snow Crash-style scenario isn’t going to arrive overnight — if, indeed, that ever happens. (And it pays to remember that, in the book, the real world has been trashed by corporate interests — giving humans an incentive to plug into a virtual alternative in order to escape a grindingly awful meatspace existence. So the fictional metaverse should really stand as a warning against allowing the hyper-commercialization and transactional capture of public spaces. Except no one in tech seems to have gotten the message.)

But if human communication is really going to be routed down a path of increasingly immersive, pervasive, real-time 3D virtual connectivity, it sets up plenty of hardware and network kit makers to cash in on (at least) building out the infrastructure — giving them a strong commercial case to set the hype train in motion.

Their use-case is simply making bank for decades to come by being paid to install all the high-density networks and devices a world of metaverse(s) demands. So there’s no great mystery underpinning the muscular evangelism on show at MWC. And the sight of all this hype rumbling down the conference tracks offered a strange semblance of post-pandemic normality — recharging the usual tech industry hype cycles. (Setting up for a routine plunge back into the trough of disillusionment a few years hence, we’d wager.) 

It did kind of miss the boat this year, though. So while, in the world outside MWC, a real breakthrough buzz was crackling around generative AI tools like ChatGPT and Stable Diffusion, the conference agenda had obviously been programmed months before this penny dropped — with panels on everything from the industrial metaverse, to metaverse enterprise solutions, to how metaverse/AI/VR will change education and plenty more — vs little we could find that directly addressed the disruption being generated by generative AI right here and now. 

(Yet another metaverse panel TechCrunch didn’t have time to swing by, given the linear inconvenience of moving across a meatspace confab as vast as the MWC’s eight sprawling halls, considered whether mobile network operators should have a chief metaverse officer? We can only suggest they wait a few years before nailing down that hire.)

Generative AI did creep into the metaverse chatter, though. (And we fully expect to see the field filed under the overarching metaverse umbrella soon enough.)

HTC’s Wang Graylin suggested generative art will solve the 3D internet’s content problem by making it exponentially quicker to create immersive environments for users to hover around in vs doing all that world-building manually. “The biggest thing holding back the metaverse is not network. It’s not hardware. It’s [not] any specific technology, it’s just the lack of quality content,” he suggested. “Once there’s good content, good use case, even [if] the hardware is not perfect, even if the network is not perfect, people will use it.

“I remember when we were using Atari devices. This little white box and those little [paddles], and we were excited about it, right. That was not high fidelity. That was not immersive. But people got into it. And this is, you know, 40 years ago. So, you know, fidelity is not the reason holding back the metaverse.”

Nokia’s Shannon also enthused about the potential for a mash-up between the metaverse and generative AI-powered coding tools — suggesting users will be telling their future smart specs to code them custom macros on the fly — such as by recording and labelling video clips of people they’ve met in certain contexts to create a library of stuff they could refer back to later (she didn’t dwell on the ethics or privacy implications of such a feature, mind).

“[The] democratisation of coding may be the most powerful thing that this combination of the metaverse and generative AI brings,” she gushed. “And we’re not gonna recognise this, we can’t even imagine where this is going, frankly.”

Enter the metaverse keynote session at MWC 2023

Image Credits: Natasha Lomas/TechCrunch

However the laundry list of developments needed before a virtual space akin to a Snow Crash-style metaverse could even begin to feasibly lift off the page — and achieve a digital approximation of 3D life — looks long indeed. Generative AI alone isn’t going to move the metaverse needle.

Another speaker who got plenty of solo time on the keynote stage, Nicole Lazzaro, president and founder of XEODesign — a “player experience design consulting company” (while she’s a self-professed “metaverse architect”, as her LinkedIn puts it) — gave a flavor of the neverending to-do list before an entrance to a boda fide metaverse could even exist to let anyone inside.

“We need to cooperate with standards and interoperability,” she began, with the deceptively simple-sounding big picture stuff. “We need generative AI and user created content to fill these worlds — if we want to deal on a planetary scale. And we needed economies to reward and incentivize longer session interactions. So technologies such as crypto mobile payments, edge computing. We need innovation partners to build compelling use cases.

“We need world segmentation and semantic segmentation, world meshing, location anchors. All of these technologies — but put them, not just so that they exist in the world as tech, but actually create experiences for people. And we of course need standards. And this is kind of my favourite one, as a designer-developer: This is the MPEG 4 standard that’s in process right now. And just imagine what could we do with these other layers? A layer for volumetric video, a layer for holographic media… So the video that you play on your devices now are going to have other additional layers, smart contracts. And, in the future, game mechanics, player sentiment. A lot of very interesting things. And a lot of these different layers too… delivery of six [degrees of freedom] media, audio six stuff, haptics that are 3D. All of these things are coming.”

Lazzaro’s take on what the metaverse is actually for — i.e. what are the transformative use-case/s all this complex development is wending its way toward — was a lot less tangible a list.

For starters, the use-cases she sketched sounded more like Disney clichés than radically new ways of being human. Plus, after she’d finished setting out her pre-prepared metaverse wish-list she suggested all this stuff is actually already possible, using existing technologies — so not novel experiences uniquely deliverable via total immersion in the tactile, full-body stimulating simulations of the truly immersive future then?

Or, well, unless her suggestion was that all this next-gen tech will deliver something so hyper-realistic, as a life experience, that people will actually be able to live in these metaverse alternative realities… (Which is of course literally the plot of the Matrix; another sci-fi dystopia where the eponymous, hyper-realistic simulation is just a manipulative nightmare that’s been designed to deprive humans of real stimuli and genuine social connection in order that they can be enslaved for the equivalent of profit by, er, AI… )

“What do you dream about doing in metaverse?” she asked the suits in the auditorium, before laying out her own blue-sky thinking in verbal post-it-note form. “I want to explore Aladdin’s cave — new forms entertainment. I want to gather gems with my bare hands. Like we see here — this is done on Magic Leap. I basically filled this room with CGI trees, hung the treasure, and you can grab it — you can solve puzzles with your body — gather treasure and solve puzzles — so that you can capture the land.

“And where do I want to study? For me, it’s the Library of Alexandria. I want to learn from books to come to life. Here’s where I’d like to learn about the Alhambra, for example. And then after studying, I want to have tea-time with my friends — you know in the library inside the teacup. And I want this to be a venue that can change its AR location, or AR declarations if you will, as easy as printing a new menu.

“I want to then go and participate with my friends — and we’ll solve a diamond heist that takes place across the city — past a series of local landmarks with a secret past. And involve all my friends and play. And then lastly, I want to design a business — with virtual escape room templates and create theme parks that I can rent and sell to my friends. I’d love to put my business online.”

Playing, puzzling, socializing, gambling? It’s almost like tabletop board games should be classified as a proto-metaverse technology.

Away from the glare of the stage spotlight, TechCrunch was reassured to find a little more reality among startups we talked to. Including a couple we found filed under ‘metaverse’ in the exhibitor listing of the official MWC app. Such as South Korea’s Avatory, a realistic avatar builder whose marketing materials talk about making technology to let users “express one’s true-self in the metaverse”. In person, a company rep admitted they’re not actually waiting around for something called the metaverse to happen — but are building technology for existing use-cases like social media.

He even suggested the customizable avatars could be used to embody generative AI chatbots — to sub for human teachers in remote learning use-cases, given actual human teachers may not always be available. (But didn’t try to claim that would amount to a metaverse moment.)

Another startup we talked to, a hardware business out of Israel called Wearables Devices, was demoing a touchless input technology it’s targeting at the face-computing future — with a goal of “setting the input standard for the metaverse”, as it puts it. But even this had been designed to offer something in the here and now — either as a tool to let people interact with content in current-gen AR; or to act as a touchless remote-control for different connected devices (without having to go and physically fiddle with each one).

The conductive wristband the startup was showing off sensed the wearer’s hand movements and finger gestures via the electrical signals they generated — which it then converted into physical inputs, enabling the equivalent of ‘metaverse-ready’ mid-air swipes and clicks. The skin-conductive tech was mounted inside an Apple Watch band, with a companion Watch app for switching between connected devices for the touchless inputting.

A spokesman told us that although it’s putting the product out there for earlier adopters they’re anticipating Apple creating a bigger wave of adoption for AR — the primary use-case for its Mudra Band — when it finally launches its long fabled mixed reality glasses.

He also didn’t deny that, by being early with a novel interface device for mixed reality, it may be hoping to turn heads in Cupertino — positioning itself as a possible acquisition target, given Apple has been known to pick up smaller technology companies, from time to time, as it builds out its own platforms.

Either way, betting on Apple generating momentum for AR in the not-too-distant future seems a far more solid strategy than tethering your fortunes to a fictional concept.

Wearable Devices MWC demo

Image Credits: Natasha Lomas/TechCrunch

Inside the metaverse hype train at MWC 2023 by Natasha Lomas originally published on TechCrunch

https://techcrunch.com/2023/03/03/inside-the-metaverse-hype-train-at-mwc-2023/

How Scout Motors plans to bring rugged, retro cred to the EV era

1971 SCOUT 800B COMANCHE WHS 8732

“We’re operating out of everywhere,” Scott Keogh said with a laugh in his first interview as CEO of Scout Motors, the American EV upstart spun out of VW Group.

While most established automotive players call the shots from sprawling, corporate palaces, Scout bases much of its operations — at least for now — out of a WeWork near Washington, D.C.

Scout Motors’ base of operations will eventually “anchor” near the $2 billion factory in South Carolina that was announced Friday, but Keogh believes remote work will be key to Scout Motors’ success. The company already has critical employees working remotely around the United States and overseas.

“I believe firmly that era is over,” Keogh said of the classic days of centralized organizations. “I don’t think it exists anymore in the spirit of Americans, in the spirit of the company.”

Origins

Capturing the spirit of Americans is a big part of what Keogh hopes and plans to do with Scout Motors, an all-electric brand launched with a $100 million investment from Volkswagen that plans to start shipping its first vehicle, an off-road focused SUV priced around $40,000, by the end of 2026. Scout was the former consumer automotive brand of International Harvester, which ended production in 1980 in the wake of labor disputes and the 1979 energy crisis.

A 1971 Scout 800B Comanche. Image Credits: Scout Motors

The original International Harvester Scout was a go-anywhere, do-anything utility vehicle, following in the footsteps of the original Jeep but with a more practical, enclosed body five years before the Ford Bronco bolted onto the scene. “In our minds, Scout sort of planted the seed, and if you look at almost every SUV, they’ve basically stolen that name and done some modification of it,” said Keogh, who then fired off familiar nameplates like Trailblazer, Pathfinder, Explorer and Discovery.

Those models may be derivative, but they have one significant advantage over Scout: They’ve all been in production at some point within the past 40 years. Scout, meanwhile, is in the difficult position of trying to honor the past while making up for nearly a half a century of lost time. If that weren’t enough, Scout has to distance itself from Volkswagen, too.

Keogh used the phrase “clean slate” four times during our interview, in reference to everything from software to dealership presence. With its Volkswagen ties, Scout Motors seemingly has a distinct advantage over other EV startups in that it could theoretically piggyback into the hundreds of U.S. VW dealers. However, Keogh says, there are advantages to following the trail blazed by Tesla in defining a way for manufacturers to sell cars directly to consumers.

“We have not decided, but we’re taking a long, hard look at it,” Keogh said about online direct sales. Historically, he said, manufacturers dominated the scene, but lately the dealerships have been calling the shots, often at the expense of everyone else. “It’s always been an industry that played more towards legislation, industrialization, networkization, as opposed to what’s the best consumer experience,” he said. “This is the differentiator: Awesome retail experience focused on the customer, focused on technology.”

Launch target

Scout Motors will launch its first two EVs in quick succession starting in late 2026, Keogh confirmed.

First will be a small, off-road focused SUV that Keogh calls an RUV: a “rugged utility vehicle.” The second is a larger truck, which will “lean a little bit more on-road” in terms of its driving characteristics. Details like range and power aren’t yet set, but pricing for the RUV is meant to start in the $40,000 range, while the truck will be “a bit north of there.”

Neither, though, will be lacking in off-road capability, a brand new focus for the Volkswagen Group.

Both vehicles will be built on a bespoke, body-on-frame platform of the sort historically used by the most capable off-road machines. Manufacturing will take place in the United States, at the company’s newly announced factory in Columbia, South Carolina.

Image Credits: Scout Motors

A battery partner has not been announced, but Keogh was adamant about structuring suppliers to take full advantage of the EV incentives offered by the Inflation Reduction Act, which has domestic production requirements.

Scout’s new EV platform will share some components with other Volkswagen Group cars, items like HVAC components, motors and inverters. But that’s where the similarities end. Scout Motors is aiming to offer driving character and capability unlike anything else under VW Group, a behemoth company that includes a long string of EV platforms. VW Group created the MEB that lies beneath the Volkswagen ID.4, its successor MEB+, the J1 Performance platform under both the Porsche Taycan and Audi E-Tron GT, and the upcoming PPE platform for the upcoming Porsche Macan EV.

In addition to a bespoke platform, Scout’s cars will also take radically different approaches to software integration and the overall user experience. Some core aspects of the software will be provided by Cariad, the software arm of Volkswagen. Keogh said the base software architecture is in place. The user experience will be radically different, he added.

Keogh points to physical touchpoints as a main differentiator. VW’s ID.4 has been panned by many for its over-reliance on touch surfaces, for example.

“We really want to keep a lot of the mechanical nature,” Keogh said. “I think if you look at the American buyers, yes, they appreciate software, but they don’t want software to be all-dominating. I think you’ll see a lot more, let’s say old-school physicality, but in a good way.”

So no touchscreen-controlled vents à la the Tesla Model Y, then? “I can pretty much confirm yes,” Keogh told me.

Unveils ahead

Scout’s two models are set for unveiling in early 2024. The company has already had a limited screening at focus groups in California and Texas, where the prototype vehicles were stacked up against traditional offerings like Broncos and newer entries from Rivian. Keogh expected the concepts to do well among more EV-aware and friendly viewers in California, but even the feedback in Texas was strong. “We got some of the best results that we’ve ever had in clinics, period,” he said.

Scout Motors EV teaser 2023

A teaser image of two Scout Motors vehicles, an all-electric truck and an SUV. Image Credits: Scout Motors

And what about the Scout loyalists, who’re still repping the brand at annual events like Harvester Homecoming? “In fairness, it runs the gamut,” Keogh said of the feedback they received, with some finding the style a bit too progressive. But, Keogh says, they need to move the brand forward. “We would now be on the Scout 8,” he said, if International Harvester had never stopped making the cars after the Scout II. “Certainly you would not want the Scout VIII to be like the Scout II.”

For Keogh, the key to attracting customers is in the name. “It’s a simple line that we’ve been using, but I think it works, this concept that the world does need more Scouts. Scouts can manifest themselves in things like hiking, climbing Everest, let’s say the more extreme side of scouts, or they can be dramatically less extreme as well, to tailgating to someone who knows the latest ideas.”

While Keogh is adamant that the new Scout will honor the past, it won’t be a brand hung up on legacy like some of its gas-burning competition: “I don’t want to make Scout a fossilized retro brand that says: ‘Dear America, it’s 1977. Again.’”

How Scout Motors plans to bring rugged, retro cred to the EV era by Tim Stevens originally published on TechCrunch

https://techcrunch.com/2023/03/03/how-scout-motors-plans-to-bring-rugged-retro-cred-to-the-ev-era/

You can’t beat student pricing for TC Early Stage

The Northeast, and New England in particular, is known for its plethora of top colleges and universities. These hallowed halls contain multitudes of future entrepreneurs and, if you’re one of them, you can’t afford to rest on your laurels.

Get yourself to TechCrunch Early Stage, a summit for early and aspiring founders taking place in Boston on April 20, and accelerate your startup trajectory.

The Price Is Right: Students and recent grads can experience everything Early Stage offers for just $99 (you save $350). Grab your ticket today! Go with another student, and the two of you pay less than the price of one founder pass.

Opportunities for students at TechCrunch Early Stage

TC Early Stage is the perfect place for students to supercharge their startup dreams. Learn the best way to build from seasoned founders, top VCs and subject-matter experts in all phases of the startup life cycle — from ideation and product market fit to funding, pitching, growth and more.

Prepare for a day packed with expert-led workshops and small-group roundtable discussions with time for Q&A, so you dig deeper into a specific topic. Here are just a few examples of what’s on tap. Read the full descriptions and find more sessions in the event agenda.

  • How to Turn Research into a Business with Pae Wu, general partner at SOSV and CTO of IndieBio, SOSV.
  • Be a Great Mentor, Find a Great Mentor with Lisa Frusztajer, investor in residence at The Capital Network.
  • So You Think You Can Pitch? Heather Widman, partner at Building Ventures; Ginny Miller, investor at 1Sharpe Ventures; Neesha A. Tambe, Startup Battlefield editor at TechCrunch.

Whether you’re looking to meet other ambitious students, score an internship or post-graduation employment, find a mentor or a co-founder, or impress investors, you won’t find a better networking environment. Bottom line: TC Early Stage has the experts, resources and opportunities to advance your entrepreneurial agenda.

TechCrunch Early Stage takes place on April 20, 2023, in Boston. Buy your $99 student ticket and save $350! Then get ready to learn new skills, accelerate your learning curve and move your startup dream forward.

Is your company interested in sponsoring or exhibiting at TC Early Stage 2023? Contact our sponsorship sales team by filling out this form.

You can’t beat student pricing for TC Early Stage by Lauren Simonds originally published on TechCrunch

https://techcrunch.com/2023/03/03/99-dollar-student-pass-techcrunch-early-stage-2023/

VW-backed Scout Motors to build $2B factory in South Carolina

Scout Motors EV teaser 2023

Scout Motors, the VW Group spinoff taking aim at the U.S. market with rugged all-electric vehicles, is deepening its investment with plans to build a $2 billion factory capable of producing 200,000 EVs a year in South Carolina.

There are a growing number of reasons for Scout Motors to keep the brand as red, white and blue as possible. And it’s not just to market itself to U.S. consumers. There are actual incentives on the line thanks to the Inflation Reduction Act and likely some kind of incentives package from South Carolina’s state government. The state government has not disclosed details on what incentives may be provided to Scout. However, South Carolina Gov. Henry McMaster has made it a priority to make the state an EV epicenter through an executive order signed in October 2022 that prioritizes building EV infrastructure, preparing the state workforce for advanced manufacturing jobs and organizing EV planning under a centralized state working group.

Scout Motors will build its factory in Blythewood about 20 miles north of Columbia, which will ultimately employ 4,000 people, on 1,600 acres right in the middle of the developing “battery belt.” The plant itself will occupy 1,100 acres of that property.

Groundbreaking is expected to occur in mid-2023, according to the company.

A teaser image of two Scout Motors vehicles, an all-electric truck and an SUV. Image Credits: Scout Motors

Scout revives a classic nameplate with funding and technology from VW Group. This factory, however, represents its independence from its parent company. From here, the EV brand will have to stand on its own four tires up against the Jeep Wrangler, Ford Bronco and Rivian R1S.

Scout Motors isn’t going the contract manufacturing route despite rumors that the brand was going to partner with a company like Magna Steyr or Foxconn. Scout CEO Scott Keogh told TechCrunch that after due diligence the company decided to bring manufacturing in-house.

“Look, being a startup, we did our jobs,” Keogh told TechCrunch in a recent interview, adding that the company evaluated every option, from taking a green-field approach and building a new factory to partnering with others and even taking over an existing factory.

“At the end of the day, where we landed is ‘manufacturing is a core expertise’,” he said. “We know how to do it quite well.”

Manufacturing in the United States was always a priority, Keogh said, but the 2022 Inflation Reduction Act provided that extra incentive (literally) to commit to the idea of building a factory.

“We think it’s important to manufacture in America, certainly without a doubt, the Inflation Reduction Act, combined with what the states are doing, make it a smart time to buy versus rent,” Keogh said.

Scout will receive support from the South Carolina government. The incentives package was not disclosed Friday. Keogh said the decision to locate in the state came down to many factors, including an existing infrastructure for the automotive industry and what Keogh called an “extremely strong port.”

The port of Charleston, which is about two hours from Columbia, is the eighth-largest in the United States and fastest growing, a strong incentive for an American brand with global roots and aspirations.

Keogh also praised the “beautiful bandwidth” of local talent at all levels thanks to local universities. “That’s going to allow us to build a future oriented company that’s loaded with engineering talent,” he said.

Notably, Scout will have a valuable neighbor and promising player in the EV space: Redwood Materials. The Nevada-based battery materials and recycling startup recently announced its own $3.5 billion plan to create a battery recycling facility in Berkeley County, South Carolina.

“I think what they are doing is brilliant and exactly right,” Keogh said when asked about this happy coincidence.

Though he declined to confirm any potential partnership between the two brands, battery recycling is very much on his mind, saying that in time he hopes for upwards of 50% of Scout’s battery supply to come from recycled materials. “Yes, we will be doing that. Do we have a deal structured right now? Absolutely not. But fully that is the plan,” he said.

For now, Scout Motors is focused on building its American-made, American-focused products by the end of 2026. An all-electric SUV will come first and a truck will follow a few months later. These vehicles will share VW components like motors and inverters but not whole platforms, meaning they’ll have to blaze their own trail to market.

VW-backed Scout Motors to build $2B factory in South Carolina by Tim Stevens originally published on TechCrunch

https://techcrunch.com/2023/03/03/vw-backed-scout-motors-to-build-2b-factory-in-south-carolina/

BlocPower hits its stride, landing $25M Series B to expand its residential energy retrofit platform

For all the focus on carbon pollution produced by shipping and aviation, some of the most challenging to abate will probably be residential buildings. In the U.S., housing units stand an average of 130 years before they’re torn down, according to a recent study.

Homes and apartment buildings built 100 years ago, or even 30 years ago, are woefully underprepared for the energy transition. More often than not, their major mechanical systems rely on fossil fuels, their electrical systems are undersized, and their walls and windows are leaky and poorly insulated.

All that can make for housing that’s less comfortable and less efficient than it needs to be.

Nearly a decade ago, Donnel Baird realized that in many cases, paying for retrofits like this can be cost-prohibitive, requiring a lump sum payment upfront. Even though the benefits might accrue over the years, it was a hurdle many owners couldn’t or didn’t want to cross.

So he founded BlocPower, which has been chipping away at the problem for nearly a decade, developing a roster of projects to prove its retrofit-as-a-service business model that’s focused on low-income communities. This week, it announced that it had raised nearly $25 million in equity and $130 million in debt financing.

The Series B round was led by VoLo Earth Ventures and joined by Microsoft Climate Innovation Fund, Credit Suisse, Builders Vision, New York State Ventures, Unreasonable Collective, Kimbal and Christiana Musk, Gaingels, Van Jones, Kapor Capital, My Climate Journey, Tale Venture Partners and NBA star Russell Westbrook. Debt financing was led by Goldman Sachs.

BlocPower hits its stride, landing $25M Series B to expand its residential energy retrofit platform by Tim De Chant originally published on TechCrunch

https://techcrunch.com/2023/03/03/blocpower-hits-its-stride-landing-25m-series-b-to-expand-its-residential-energy-retrofit-platform/

Smartphone makers searched for a way forward at MWC 2023

Read more about MWC 2023 on TechCrunch

The slowdown was inevitable, of course. Nothing stays hot forever — especially in this industry. By tech standards, smartphones have had a good run, but the last few years have seen device makers searching for the magic bullet to help the sales slide reverse course. The arrival of 5G was a nice reprieve, but next-generation telecom standards don’t arrive every year.

It’s too early to say with certainly whether the move toward device repairability in the midst of new and proposed legislation will have a meaningful impact, but it was a highlight at this year’s show, which HMD turned into a central thesis. Regardless of how many people take advantage of the ability to repair their devices at home (or have a third party repair them), it’s another potential pain point for industry growth.

Nokia booth at MWC 2023. Image Credits: Brian Heater

Foldables have seemingly performed many expectations (specifically for Samsung), but not nearly enough to really move the needle. Phone makers have a refresh problem. For a long time, phone purchases were inexorably tied to carrier plans, putting the devices on a two- or three-year cycle. Of course, the kinds of financing deals that let you spend less up front have a way of making you pay in the end.

There does seem to be a looming sense of carriers and manufacturers attempting to return to something similar with a new name.

“I think there’s going to be more of a movement toward models where devices themselves are sold more as a service,” Google’s Sameer Samat told me this week. “I think there’s a lot of innovative work going on in the carrier side to figure out how you buy a device for less up front, you use it and return it after a period of time and you get another device as part of your overall subscription.”

OnePlus

Image Credits: Brian Heater

In a world where we don’t own our movies, music or software, the concept of “hardware as a service” is rapidly emerging as its own path forward. Like the move from physical albums to Spotify, it has trade-offs.

Some consumers will no doubt jump at the opportunity to upgrade hardware without a thought, but is not owning your phone the same as not owning a CD or record? Will these ultimately end up costing us a lot more in the end? And in a time when most manufacturers are touting percentages of recycled materials, how much more waste will this model create?

There’s also a sense phone makers effectively painted themselves into a corner. The yearly one-upmanship ultimately benefited consumers with much better devices. I’ve said this a bunch, but these days it’s hard to find a bad phone for more than $500 — there are also an increasing number of good ones for less than that. These days, a “budget” device often involves settling for last year’s best chipset.

Better phones last longer, both in terms of durability and futureproofing feature set. Having a three- or four-year-old phone these days doesn’t mean the same thing it meant three or four years ago. That’s also due, in part, to the fact that innovation has slowed. It’s become a battle for inches. When was the last time you saw a truly revolutionary upgrade from last year’s model? Do moderately better screens, cameras or even batteries compel that many people toward impulse purchases?

“The smartphone market grew initially because there was a really innovative product that was useful to customers,” Nothing’s Carl Pei told me in an interview this week. “Now it’s starting to shrink, because my phone is good enough. Why should I upgrade?”

A colorful 'Metaverse' logo is shown atop a booth at the MWC 2023 trade show in Barcelona

Image Credits: Natasha Lomas/TechCrunch

Taking the broader view, none of this is bad, per se. It means better products for consumers, as well as a slowing of the massive waste generated by millions of people buying a new device every other year. We all tacitly understand why corporations and shareholders hope such cycles will sustain forever, but many of us are glad they don’t. Companies need one of two things to happen: either reversing the slide or shifting focus to other revenue streams.

“There will always be sales of new phones,” says Samat. “But I think you’re now reaching the point where this is, for many people, it is their primary computing device. So, there are different and more interesting ways of looking at the market. I think in terms of what are you able to do with these devices? What does engagement look like? What are the services that you’re utilizing? And how is it integrated with other parts of your life?”

The writing has been on the wall for a while. The slowdown pre-dates the pandemic by some time, but the last three years have certainly accelerated the trend. Shutdowns, unemployment, inflation, supply chain constraints — you know the deal. Forward thinking companies invested heavily in content plays. That’s certainly paid off for Apple and some of the competition, as well. There were moments where wearables and smart home devices seemed like they might help stem the bleeding, but while both have done well for manufacturers, there isn’t the same sense of ubiquity.

6G isn’t anything beyond a number of different companies vying for adoption of their specific solution, so we’re looking at years before the first devices start arriving. At a conference that loves nothing more than hyping a new technology, 5G’s potential replacement only warranted a single panel.

Mike, who sat in on the panel, notes:

The first thing to note is that it’s not arriving anytime soon. The projections are that the likes of you and I will only get 6G into our hot little hands from around 2030 onwards, so it would be best to quell your ire for now.

Anyone else feel like it’s 50/50 between 6G and Mad Max scenario for 2030? Okay, maybe it’s just me. Even so, that feels impossibly far away and doesn’t do much for any of these companies in the near term.

Oppo’s Find N2 Flip at MWC 2023. Image Credits: Brian Heater

Maybe foldables have a lot more juice left in them? If MWC was any indication, manufacturers certainly believe so. It seemed like every company had one this year. Well, everyone except Nothing.

“I personally think foldables are supply chain-driven innovation and not consumer insights,” Pei said. “Somebody invents OLED, and they can make a lot of money, because it’s a great technology. Then after a few years, a lot more companies make that, so they need to lower their prices. So they need to figure out what else they can sell at a higher margin. They develop flexible OLEDs, which they can sell at a higher price.”

Image Credits: Brian Heater

It’s hard not to be cynical about this stuff sometimes. Ditto for concept devices, though as I noted in my “ode to weird tech” post, as someone who follows this stuff for a living, I’m a fan of weirdness for weirdness sake, be it the rollable Motorola Rizr screen or the OnePlus glowing cooling fluid. Certainly following the automotive industry’s lead of creating concept devices is a trend that is likely to only become more pervasive.

OnePlus COO Kinder Liu told me this week that gauging consumer interest is one of the “multiple reasons” his company is engaging with the concept. He added, “Also, we want to encourage continuous innovation inside our company.”

Pretty much everyone I engaged with this week echoed the sentiment that smartphones are in a rut. For the first time, however, it’s not a foregone conclusion that there’s a way of getting out.

Smartphone makers searched for a way forward at MWC 2023 by Brian Heater originally published on TechCrunch

https://techcrunch.com/2023/03/03/smartphone-makers-searched-for-a-way-forward-at-mwc-2023/