Category: TECHNOLOGY
Post News, a Twitter alternative, gets funding from a16z
If it seems like Post News launched overnight, that’s because it kind of did. Unlike Mastodon, Hive Social, or other existing social networks being flooded with dissatisfied Twitter users, Post News emerged two weeks ago. The platform was rushed into a live beta, since its team wanted to go public in a time when the chaos of Elon Musk’s Twitter leadership was front and center in our collective headspace.
Post News has some similar basic functions to Twitter: you make posts, you like and repost other people’s posts, you follow interesting accounts. Yet in its beta stage, it still lacks basic functions like DMs, a native app and accessibility features like adding alt text to images (and, sparking concern for some users, the company said it was not prioritizing accessibility at this time).
Post News is trying to capitalize on the “virtual watercooler for journalists” side of Twitter. The platform describes itself as a place to access “premium news content without subscriptions or ads.” News publishers and independent writers are encouraged to share their articles on Post News under a paywall. The idea is that this would allow users to pay for individual articles from a variety of news sources. It’s an alternative, or a supplement, to paying for individual subscriptions to specific news sources.
“I believe the future newspaper is the feed and want to make it more civil for users, profitable for publishers and better for society,” wrote Post News founder Noam Bardin in a tweet announcing the endeavor. Bardin previously served as the CEO of Waze between 2009 and 2021.
A profile on Post News. Image Credits: TechCrunch
As of Monday, Post News has about 335,000 users on its waitlist, according to Bardin, while about 65,000 accounts have been activated. (Users are being let in slowly as to not overload the platform’s operations and moderation capabilities). The platform has already secured an undisclosed amount of funding from Andreessen Horowitz (a16z), as well as Scott Galloway, an NYU professor and tech commentator. Silicon Valley journalist Kara Swisher said she is an advisor to the company but is not an investor.
A16z is a curious choice for an investor in a Twitter alternative, given that the venture capital firm contributed $400 million to Musk’s Twitter acquisition. Sriram Krishnan, a crypto investor at a16z, has also been working closely with Musk at Twitter HQ. But Bardin said that he chose to work with a16z simply because they were the quickest investor to make a decision and fork over a check.
“This does not mean that I am a Crypto fan, that I think [a16z] should have funded some of the personalities they funded lately or that I agree with every statement of theirs,” Bardin wrote on his Post News account on Sunday. “We did discuss the Twitter investment at the highest level and I can assure you that it is not a problem — Post is separated from the people involved with Twitter and a clear line has been set.”
TechCrunch reached out to Bardin and a16z for comment.
Post News’ goals are ambitious. Not only is the platform attempting to compete with a longtime social media mainstay, but its business model relies on digital news publishers opting in to its model of charging readers per article, rather than for a subscription. Plus, the platform is rapidly growing while it is still building out key safety features, which makes things a bit precarious.
“I want to remind everyone that this is a super early beta and it is not right for everyone,” Bardin wrote on Monday. “People looking for a polished product will have to wait. It is OK to take a break and come back when things are production grade — betas are not for everyone.”
Post News, a Twitter alternative, gets funding from a16z by Amanda Silberling originally published on TechCrunch
https://techcrunch.com/2022/11/28/post-news-twitter-alternative-a16z/
Elon Musk’s next trick? Picking a fight with Apple
After decimating Twitter’s workforce, imperiling its infrastructure and emptying its ad coffers all within his first month at the company, it’s on to the next thing for Elon Musk.
The erratic billionaire picked a fight with Apple in a series of tweets on Monday, bracing for a battle — or perhaps just another volley of tweets — that would comfortably position the perpetually aggrieved Twitter owner as the David to Apple’s Goliath.
Musk is now claiming that Apple threatened to “withhold” Twitter from the App Store, implying that the iPhone maker might take action against the social app over changes under its new ownership without offering any evidence. TechCrunch has reached out to Apple for clarification, but for now we don’t know if Apple really contacted Twitter over content moderation concerns or something else entirely.
Twitter’s new owner also claims that Apple has pulled most of its advertising on the platform, which seems possible or even likely considering how many other major ad buyers have done the same since Musk’s takeover, citing concerns about brand safety and content moderation changes.
Whatever is really going on here, a few things are true. For one, Twitter needs to stay in the App Store and to do so it needs to clear Apple’s low bar for content moderation, which Truth Social and Parler — apps with far less mature algorithmic content moderation systems — have managed to do. Even with Musk’s threatened policy changes and his deep cuts to moderation teams, Twitter would likely still remain on Apple’s good side if those apps pulled it off.
It’s also true that Apple’s rules for what gets an app get kicked out of the App Store are vague and arbitrarily enforced. Apple warns against “content that is offensive, insensitive, upsetting, intended to disgust, in exceptionally poor taste, or just plain creepy,” which would seem to rule out a lot of social apps, pre-Musk Twitter included, if it really came down to it.
At the same time that Musk is portraying Apple as a censor, he’s also railing against the fees the company charges apps that operate in its ecosystem. Musk calls this a “secret 30% tax” but in reality Apple’s cut is well-documented and much discussed. Epic Games and Apple went to court over Apple’s fees in 2020, with Epic arguing that the iPhone maker wields monopoly power in the software market.
Whether intentional or not, Musk reigniting the App Store antitrust battle is timely. Epic’s ongoing fight with Apple is kicking off again in appeals court and Congress could be poised for another push to pass the Open Markets Act, a bipartisan bill that would crack open the App Store and “tear down coercive anticompetitive walls in the app economy,” according to its sponsors.
It’s also possible that Apple actually has cautioned Musk that reinstating thousands of accounts banned for stuff like hate speech and harassment might nudge the app afoul of the App Store’s actually quite lenient content moderation requirements. In that case, Musk could position himself as a high-profile champion of the anti-Apple crowd, joining Epic’s whole thing and making nice with regulators who are rightfully concerned over Musk’s Twitter plans (or lack thereof).
But even then, Twitter needs Apple in both the short- and long-term and Apple certainly doesn’t need Twitter. And fighting on yet another front would stretch Musk’s attention even more when he should probably be focused on the basics, like running his myriad other companies or, say, not bankrupting Twitter. You can be mad that Apple takes 30% of what you make on the iPhone, but 30% of zero is still zero.
At the end of the day, Musk, the world’s richest man and maker of luxury cars and spaceships, generally seems to enjoy portraying himself as a scrappy upstart fighting against larger powers that be. If Musk wants to re-create that dynamic at Twitter, Apple is arguably one of the only entities that can still make the hugely influential social media company look like the little guy. Musk might be the Twitter boss now, but he knows that turning everyone against the big boss is a good way to maintain the approval of the miscellaneous internet devotees who affirm his existing beliefs and vote in his deeply unscientific tweet polls, so maybe it’s just about that.
Whatever inspired his anti-Apple tirade, waging a war on Apple is probably a losing fight. But it’s a fresh conflict that diverts attention from Musk’s embarrassing and seemingly endless parade of catastrophes as he fumbles Twitter’s policy, personnel and product alike, possibly running one of the world’s biggest social networks into the ground in the process.
Elon Musk’s next trick? Picking a fight with Apple by Taylor Hatmaker originally published on TechCrunch
https://techcrunch.com/2022/11/28/elon-musk-twitter-vs-apple/
Move over, operators — consultants are the new nontraditional VC
Operating experience has become a buzzword over the last few years as venture capitalists pump up their resumes in a quest to set themselves apart from other sources of startup capital. Now, it seems that we are seeing the next evolution of that trend.
This year has seen a wave of startup consultant firms looking to raise venture funds of their own to take stakes in companies they are already working with or that align with their practice. In theory, this makes total sense because both consultants and venture capitalists have the same goal at the end of the day: helping companies grow.
“Most come on board because we provide the capital, ‘plus.’ What is that plus? The plus with us is storytelling.” FNDR CEO James Vincent
But why are so many consultant-led venture capital funds launching now? It’s a particularly rough time in the broader venture market, and economy in general, in addition to being one of the toughest periods for emerging managers and first-time fundraisers. It’s worth noting that all of these funds are raising outside capital as opposed to investing off their balance sheets.
For one thing, the startups they were already working with were asking them to.
Move over, operators — consultants are the new nontraditional VC by Rebecca Szkutak originally published on TechCrunch
https://techcrunch.com/2022/11/28/move-over-operators-consultants-are-the-new-nontraditional-vc/
‘Knives Out’ Sequel Delivers in Theaters for Streaming Giant Netflix
Strong showing for “Glass Onion: A Knives Out Mystery” could bolster argument for some theatrical release for streamers’ movies.
Disney’s Robert Iger Faces Troubled Animation Market
“Strange World,” the entertainment company’s latest release, becomes its second straight animated flop, after “Lightyear.”
Musk Attacks Apple and Its CEO Over Advertising, Censorship
Elon Musk claims Apple is threatening to remove Twitter from its App Store and criticized the tech giant for what he called censorship.
On affinity-focused fintechs, the future of BNPL, and more
Of all the venture capital funding invested in 2021, around one in every five dollars went to fintech. But this boom now seems behind us, as global fintech funding activity returned to pre-2021 levels.
Worse, fintech didn’t escape the recent waves of tech layoffs, with high-profile companies like Brex, Chime and Stripe making headlines for this disheartening reason over the last few weeks.
And yet, fintech startups are still getting founded and funded this year. Of the 223 companies in Y Combinator’s summer 2022 batch, 79 fell more or less into the fintech category.
Why are founders and investors still placing bets in fintech, and where? To find out more, we reached out to fintech-focused VC firm Fiat Ventures.
Fiat co-founders Alex Harris, Drew Glover, and Marcos Fernandez also run its sister arm, Fiat Growth, a growth consultancy working with fintech and insurtech clients. This enables them to comment not only on sector trends from an investor perspective, but also to share practical advice.
One of their key recommendations is for fintech startups to lean into customer acquisition channels whose cost is less variable or seasonal than others, but our exchange covered a wider range of topics, from financial inclusion to offline channels and more. Read on:
Editor’s note: This interview has been edited for length and clarity. Many of the linked companies are portfolio companies of Fiat Ventures or clients of Fiat Growth.
TC: What makes you say that “fintech acquisition funnels are too complicated”?
Alex Harris: Fintech products by nature have complicated acquisition funnels and enrollment flows. Some complications are unavoidable in a highly regulated environment, but superfluous complications can arise when rigorous testing is not applied and funnels include unnecessary bloat.
Even the smallest detail can generate friction. For example, in the know-your-customer (KYC) process, many fintechs will ask a customer for their entire Social Security Number. In most cases, for non-credit products, only the last four digits of the SSN are needed for identification purposes. While only a five-digit difference, this can have a meaningful impact on conversion rates that can save large sums of money at scale.
Data is certainly king, but there is a time and place for data collection and personalization. Too often, a well-intentioned data team will ask personalization and demographics questions directly in an enrollment process. However, these questions can most often come in a post-enrollment survey or periodically throughout the lifecycle of a customer. Even post-enrollment, these questions need to be thought out. We regularly see data collected for the sake of collecting it, without actionable insights derived from them.
On affinity-focused fintechs, the future of BNPL, and more by Anna Heim originally published on TechCrunch
https://techcrunch.com/2022/11/28/on-affinity-focused-fintechs-the-future-of-bnpl-and-more/
Amazon CloudWorks Internet Monitor lets you track connection-related performance issues
When it comes to performance issues, it’s hard to know where the problem lies. This is especially true when your monitoring dashboard shows an all-clear, yet you’re still hearing slow app complaints from your users. In these cases, there’s a good chance those problems could be related to an internet connection issue.
These kinds of issues are harder to track down because they vary so greatly and depend on a lot of factors that are mostly out of your control. Amazon wants to make it easier to track these kinds of issues on apps running on AWS infrastructure with a new service called Amazon CloudWorks Internet Monitor. It’s announcing the new service this week at AWS re:Invent.
As the name implies, it’s part of the CloudWorks monitoring tool, and it looks at internet connections around the world to find trouble spots.
“Internet Monitor uses the connectivity data that we capture from our global networking footprint to calculate a baseline of performance and availability for internet traffic,” Amazon’s Sébastien Stormacq wrote in a blog post announcing the new service.
The idea is to let you monitor problems related to internet connection problems with applications running on AWS infrastructure resources. Most major monitoring tools allow you to track various types of network traffic, but this one takes advantage of the same data AWS uses to monitor its own uptime, so presumably it’s pretty solid for those AWS-centric applications
You simply create a monitor and add some internet resources, and you can monitor from there when you’re getting performance complaints that you can’t pinpoint. Among other data, you can see a health score based on the quality of the connections on the resources you’ve added to your monitor.
The new service is available in public preview starting today across 20 regions. It’s free in public beta, but it’s worth noting that you could still be charged for log data the service is collecting as part of its monitoring process.
Amazon CloudWorks Internet Monitor lets you track connection-related performance issues by Ron Miller originally published on TechCrunch
AirTree and Greycroft return to lead Australian regtech FrankieOne’s Series A+
As a result, FrankieOne was created to streamline processes around regulation and compliance. It now provides a single API that connects third-party vendors with over 350 data sources in 48 countries.
Costello explained that most fintechs, banks and crypto companies deal with shortfalls in match rates, coverage or ability to scale because they connect to a single vendor for their identity needs. This means their tech stacks also need constant maintenance.
FrankieOne solves this problem by connecting to hundreds of data sources from multiple vendor partners, which means their clients no longer have to rely on a single vendor. Its API’s connected vendors include established financial services companies like Equifax, Experian and Socure and fast-growth startups such as Sardine AI.
“What sets FrankieOne apart is it allows its customers to switch on vendors, create dynamic workflows, add in further fraud signals and add new markets, ensuring our customers can respond quickly to changing regulations and updated business requirements, without taking on any additional work burden,” Costello said.
FrankieOne’s customers are usually mid- to large-sized organizations in highly regulated industries that need to adapt to complex policies that frequently change, he added.
As an example of how FrankieOne has been used by its clients, Costello pointed to sports betting app Pointsbet, which previously used a single provider for customer onboarding, but dealt with high numbers of prospective users who couldn’t be verified in real time. This resulted in customer drop-offs, or further manual work to verify their details. Since working with FrankieOne, Pointsbet has been able to increase customers onboarding by 14%.
When Westpac began digitizing more of their financial services, they still used separate legacy systems and, as a result, needed to increase their pass rates to reduce drop-offs. They integrated FrankieOne’s platform for their KYC (know your customer) feature on their new BaaS (banking-as-a-service). This increased pass rates significantly, so the firm added FrankieOne across its entire group.
The latest round of funding will allow FrankieOne to scale more quickly, and expand in North America, Europe and the Asia Pacific. Costello said it will also enable FrankieOne to make a significant investment into its ecosystem of vendors, data sources and fraud capabilities, enabling it to grow its customer base.
FrankieOne, a Melbourne-based startup that provides an API platform for identity verification and fraud detection, said it has added $23 million AUD (about $15.4 million USD) in a Series A+, taking its Series A’s total to $45 million AUD (about $30 million USD). FrankieOne says this is the largest amount of VC funding raised by an Australian regtech so far.
The funding included a group of returning investors, including led backers AirTree Ventures and Greycroft, and participants Reinventure (financial services company Westpac’s venture arm), Tidal Ventures and Apex Capital Partners, which are all also existing investors. New strategic investors include Binance Labs and Kraken Ventures.
Founded in 2019 by serial fintech entrepreneurs Simon Costello and Aaron Chipper, FrankieOne connects banking, fintech, crypto and gaming companies to hundreds of data sources and works with 170 financial institutions around the world. The startup says it has seen 4x revenue growth over the last 12 months and its customers now include Westpac, Shopify, Afterpay, Binance, Zipmex and Pointsbet. Its team doubled over the past year, and it opened a new office in San Francisco.
Costello told TechCrunch that FrankieOne grew out of a neobank venture he also founded with Chipper called Frankie. Costello and Chipper wanted Frankie to differentiate from the rest of the industry with the best onboarding experience, using the top identity and fraud prevention tools available, but “this process proved to be unnecessarily complicated, requiring multiple integrations and it was clear we would need to create our own risk-based onboarding,” Costello said. They realized other fintech companies also had the same problems.
FrankieOne founders Simon Costello and Aaron Chipper
As a result, FrankieOne was created to streamline processes around regulation and compliance. It now provides a single API that connects third-party vendors with over 350 data sources in 48 countries.
Costello explained that most fintechs, banks and crypto companies deal with shortfalls in match rates, coverage or ability to scale because they connect to a single vendor for their identity needs. This means their tech stacks also need constant maintenance.
FrankieOne solves this problem by connecting to hundreds of data sources from multiple vendor partners, which means their clients no longer have to rely on a single vendor. Its API’s connected vendors include established financial services companies like Equifax, Experian and Socure and fast-growth startups such as Sardine AI.
“What sets FrankieOne apart is it allows its customers to switch on vendors, create dynamic workflows, add in further fraud signals and add new markets, ensuring our customers can respond quickly to changing regulations and updated business requirements, without taking on any additional work burden,” Costello said.
FrankieOne’s customers are usually mid- to large-sized organizations in highly regulated industries that need to adapt to complex policies that frequently change, he added.
As an example of how FrankieOne has been used by its clients, Costello pointed to sports betting app Pointsbet, which previously used a single provider for customer onboarding, but dealt with high numbers of prospective users who couldn’t be verified in real time. This resulted in customer drop-offs, or further manual work to verify their details. Since working with FrankieOne, Pointsbet has been able to increase customers onboarding by 14%.
When Westpac began digitizing more of their financial services, they still used separate legacy systems and, as a result, needed to increase their pass rates to reduce drop-offs. They integrated FrankieOne’s platform for their KYC (know your customer) feature on their new BaaS (banking-as-a-service). This increased pass rates significantly, so the firm added FrankieOne across its entire group.
The latest round of funding will allow FrankieOne to scale more quickly, and expand in North America, Europe and the Asia Pacific. Costello said it will also enable FrankieOne to make a significant investment into its ecosystem of vendors, data sources and fraud capabilities, enabling it to grow its customer base.
AirTree and Greycroft return to lead Australian regtech FrankieOne’s Series A+ by Catherine Shu originally published on TechCrunch
Interim rate of return: A better approach to valuing early-stage startups
Convertible instruments, whether in the form of convertible notes, simple agreements for future equity (SAFEs) or otherwise, have long been used in the startup world to avoid a fundamental issue: the extreme difficulty associated with valuing early-stage companies. But what happens when the very mechanisms designed to address this problem become a part of it?
Valuation caps, for instance, are now employed in most early-stage convertible instruments. By imposing a ceiling on the price at which a convertible instrument converts to future stock ownership, valuation caps were intended to protect early-stage investors from extreme, unexpected growth (and, consequently, equity positions deemed excessively small by such investors).
However, valuation caps are increasingly being used as a proxy for the value of the company at the time of the investment — creating the very problem they were designed to help avoid, while adding unnecessary complexity for inexperienced founders and investors.
It isn’t surprising that founders and investors struggle to resist the lure to discuss present value when using valuation caps, despite efforts to push back against that use. This is especially true in contexts where the valuation cap “ceiling” expressly values the investment in a pre-conversion exit event (e.g., both the old pre-money valuation cap SAFEs and the newer post-money valuation cap SAFEs made available by Y Combinator).
Fortunately, there’s a better approach: the interim rate of return method.
The problem with early-stage valuations, or the crystal ball
However well intentioned, valuation caps directly reintroduced valuations to early-stage convertible instrument negotiations.
Before we get to the solution, it’s useful to provide additional context on the problem — namely, why it’s so difficult to thoughtfully and rationally negotiate the value of early-stage companies.
Some will say that such valuations are difficult because early-stage companies don’t have meaningful (if any) revenue, have limited assets or are just an idea. Yet, while these arguments identify real issues, they miss what may be the most important one: Investors at the earliest stages are investing in a possible ownership structure that will typically only fully exist in the future upon completion of the founders’ vesting schedules.
Let’s say you’re an early-stage investor writing a $500,000 check for a startup at a stated pre-money valuation of $4.5 million, where 100% of the existing equity is held by a single founder and subject to a 4-year vesting schedule that just started.
On its face, that would entitle you to a 10% ownership in the company (i.e., the post-money value would be $5 million, with your capital representing 10% of the value). But your stake and the pre-money valuation at which you effectively invested depends on how much of the founder’s vesting schedule is actually completed, as shown by the following table:
Interim rate of return: A better approach to valuing early-stage startups by Ram Iyer originally published on TechCrunch