Facebook has acquired Servicefriend, which builds ‘hybrid’ chatbots, for Calibra customer service

As Facebook prepares to launch its new cryptocurrency Libra in 2020, it’s putting the pieces in place to help it run. In one of the latest developments, it has acquired Servicefriend, a startup that built bots — chat clients for messaging apps based on artificial intelligence — to help customer service teams, TechCrunch has confirmed.

The news was first reported in Israel, where Servicefriend is based, after one of its investors, Roberto Singler, alerted local publication The Marker about the deal. We reached out to Ido Arad, one of the co-founders of the company, who referred our questions to a team at Facebook. Facebook then confirmed the acquisition with an Apple-like non-specific statement:

“We acquire smaller tech companies from time to time. We don’t always discuss our plans,” a Facebook spokesperson said.

Several people, including Arad, his co-founder Shahar Ben Ami, and at least one other indicate that they now work at Facebook within the Calibra digital wallet group on their LinkedIn profiles. Their jobs at the social network started this month, meaning this acquisition closed in recent weeks. (Several others indicate that they are still at Servicefriend, meaning they too may have likely made the move as well.)

Although Facebook isn’t specifying what they will be working on, the most obvious area will be in building a bot — or more likely, a network of bots — for the customer service layer for the Calibra digital wallet that Facebook is developing.

Facebook’s plan is to build a range of financial services for people to use Calibra to pay out and receive Libra — for example, to send money to contacts, pay bills, top up their phones, buy things and more.

It remains to be seen just how much people will trust Facebook as a provider of all these. So that is where having “human” and accessible customer service experience will be essential.

“We are here for you,” Calibra notes on its welcome page, where it promises 24-7 support in WhatsApp and Messenger for its users.

Screenshot 2019 09 21 at 23.25.18

Servicefriend has worked on Facebook’s platform in the past: specifically it built “hybrid” bots for Messenger for companies to use to complement teams of humans, to better scale their services on messaging platforms. In one Messenger bot that Servicefriend built for Globe Telecom in the Philippines, it noted that the hybrid bot was able to bring the “agent hours” down to under 20 hours for each 1,000 customer interactions.

Bots have been a relatively problematic area for Facebook. The company launched a personal assistant called M in 2015, and then bots that let users talk to businesses in 2016 on Messenger, with quite some fanfare, although the reality was that nothing really worked as well as promised, and in some cases worked significantly worse than whatever services they aimed to replace.

While AI-based assistants such as Alexa have become synonymous with how a computer can carry on a conversation and provide information to humans, the consensus around bots these days is that the most workable way forward is to build services that complement, rather than completely replace, teams.

For Facebook, getting its customer service on Calibra right can help it build and expand its credibility (note: another area where Servicefriend has build services is in using customer service as a marketing channel). Getting it wrong could mean issues not just with customers, but with partners and possibly regulators.

via Click on the link for the full article

Meet Facebook’s latest fake

Facebook CEO Mark Zuckerberg, a 35-year-old billionaire who keeps refusing to sit in front of international parliamentarians to answer questions about his ad business’ impact on democracy and human rights around the world, has a new piece of accountability theatre to sell you: An “Oversight Board“.

Not of Facebook’s business itself. Though you’d be forgiven for thinking that’s what Facebook’s blog post is trumpeting, with the grand claim that it’s “Establishing Structure and Governance for an Independent Oversight Board”.

Referred to during the seeding stage last year, when Zuckerberg gave select face-time to podcast and TV hosts he felt comfortable would spread his conceptual gospel with a straight face, as a sort of ‘Supreme Court of Facebook’, this supplementary content decision-making body has since been outfitted in the company’s customary (for difficult topics) bloodless ‘Facebookese’ (see also “inauthentic behavior”; its choice euphemism for fake activity on its platform)

The Oversight Board is intended to sit atop the daily grind of Facebook content moderation, which takes place behind closed doors and signed NDAs, where outsourced armies of contractors are paid to eyeball the running sewer of hate, abuse and violence so actual users don’t have to, as a more visible mechanism for resolving and thus (Facebook hopes) quelling speech-related disputes.

Facebook’s one-size-fits-all content moderation policy doesn’t and can’t. There’s no such thing as a 2.2BN+ “community” — as the company prefers to refer to its globe-spanning user-base. So quite how the massive diversity of Facebook users can be meaningfully represented by the views of a last resort case review body with as few as 11 members has not yet been made clear.

“When it is fully staffed, the board is likely to be forty members. The board will increase or decrease in size as appropriate,” Facebook writes vaguely this week.

Even if it were proposing one board member per market of operation (and it’s not) that would require a single individual to meaningfully represent the diverse views of an entire country. Which would be ludicrous, as well as risking the usual political divides from styming good faith effort.

It seems most likely Facebook will seek to ensure the initial make-up of the board reflects its corporate ideology — as a US company committed to upholding freedom of expression. (It’s clearly no accident the first three words in the Oversight Board’s charter are: “Freedom of expression”.)

Anything less US-focused might risk the charter’s other clearly stated introductory position — that “free expression is paramount”.

But where will that leave international markets which have suffered the worst kinds of individual and societal harms as a consequence of Facebook’s failure to moderate hate speech, dangerous disinformation and political violence, to name a few of the myriad content scandals that dog the company wherever it goes.

Facebook needs international markets for its business to turn a profit. But you sure wouldn’t know it from its distribution of resources. Not for nothing has the company been accused of digital colonialism.

The level of harm flowing from Facebook decisions to take down or leave up certain pieces of content can be excruciatingly high. Such as in Myanmar where its platform became a conduit for hate speech-fuelled ethnic violence towards the Rohingya people and other ethnic minorities.

It’s reputational-denting failures like Myanmar — which last year led the UN to dub Facebook’s platform “a beast” — that are motivating this latest self-regulation effort. Having made its customary claim that it will do a better job of decision-making in future, Facebook is now making a show of enlisting outsiders for help.

The wider problem is Facebook has scaled so big its business is faced with a steady pipeline of tricky, controversial and at times life-threatening content moderation decisions. Decisions it claims it’s not comfortable making as a private company. Though Facebook hasn’t expressed discomfort at monetizing all this stuff. (Even though its platform has literally been used to target ads at nazis.)

Facebook’s size is humanity’s problem but of course Facebook isn’t putting it like that. Instead — coming sometime in 2020 — the company will augment its moderation processes with a lottery-level chance of a final appeal via a case referral to the Oversight Board.

The level of additional oversight here will of course be exceptionally select. This is a last resort, cherry-picked appeal layer that will only touch a fantastically tiny proportion of the content choices Facebook moderators make every second of every day — and from which real world impacts ripple out and rain down. 

“We expect the board will only hear a small number of cases at first, but over time we hope it will expand its scope and potentially include more companies across the industry as well,” Zuckerberg writes this week, managing output expectations still many months ahead of the slated kick off — before shifting focus onto the ‘future hopes’ he’s always much more comfortable talking about. 

Case selection will be guided by Facebook’s business interests, meaning the push, even here, is still for scale of impact. Facebook says cases will be selected from a pool of complaints and referrals that “have the greatest potential to guide future decisions and policies”.

The company is also giving itself the power to leapfrog general submissions by sending expedited cases directly to the board to ask for a speedy opinion. So its content questions will be prioritized. 

Incredibly, Facebook is also trying to sell this self-styled “oversight” layer as independent from Facebook.

The Oversight Board’s overtly bureaucracy branding is pepped up in Facebook headline spin as “an Independent Oversight Board”. Although the adjective is curiously absent from other headings in Facebook’s already sprawling literature about the OB. Including the newly released charter which specifies the board’s authority, scope and procedures, and was published this week.

The nine-page document was accompanied by a letter from Zuckerberg in which he opines on “Facebook’s commitment to the Oversight Board”, as his header puts it — also dropping the word ‘independent’ in favor of slipping into a comfortable familiar case. Funny that.

The body text of Zuckerberg’s letter goes on to make several references to the board as “independent”; an “independent organization”; exercising “its independent judgement”. But here that’s essentially just Mark’s opinion.

The elephant in the room — which, if we continue the metaphor, is in the process of being dressed by Facebook in a fancy costume that attempts to make it look like, well, a board room table — is the supreme leader’s ongoing failure to submit himself and his decisions to any meaningful oversight.

Supreme leader is an accurate descriptor for Zuckerberg as Facebook CEO, given the share structure and voting rights he has afforded himself mean no one other than Zuckerberg can sack Zuckerberg. (Asked last year, during a podcast interview with recode’s Kara Swisher if he was going to fire himself, in light of myriad speech scandals on his platform, Zuckerberg laughed and then declined.)

It’s a corporate governance dictatorship that has allowed Facebook’s boy king to wield vast power around the world without any internal checks. Power without moral responsibility if you will.

Throughout Zuckerberg’s (now) 15-year apology tour turn as Facebook CEO neither the claims he’ll do things differently next time nor the cool expansionist ambition have wavered. He’s still at it of course; with a plan for a global digital currency (Libra), while bullishly colonizing literal hook-ups (Facebook Dating). Anything to keep the data and ad dollars flowing.

Recently Facebook also paid a $5BN FTC fine to avoid its senior executives having to face questions about their data governance and policy enforcement fuck-ups — leaving Zuckerberg & co free to get back to lucrative privacy-screwing business as usual. (To put the fine in context, Facebook’s 2018 full year revenue clocked in at $55.8BN.)

All of which is to say that an ‘independent’ Facebook-devised “Oversight Board” is just a high gloss sticking plaster to cover the lack of actual regulation — internal and external — of Zuckerberg’s empire.

It is also an attempt by Facebook to paper over its continued evasion of democratic accountability. To distract from the fact its ad platform is playing fast and loose with people’s rights and lives; reshaping democracies and communities while Facebook’s founder refuses to answer parliamentarians’ questions or account for scandal-hit business decisions. Privacy is never dead for Mark Zuckerberg.

Evasion is actually a little tame a term. How Facebook operates is far more actively hostile than that. Its platform is reshaping us without accountability or oversight, even as it ploughs profits into spinning and shape-shifting its business in a bid to prevent our democratically elected representatives from being able to reshape it.

Zuckerberg appropriating the language of civic oversight and jurisprudence for this “project”, as his letter calls the Oversight Board — committing to abide by the terms of a content decision-making review vehicle entirely of his own devising, whose Facebook-written charter stipulates it will “review and decide on content in accordance with Facebook’s content policies and values” — is hardly news. Even though Facebook is spinning at the very highest level to try to make it so.

What would constitute a newsworthy shock is Facebook’s CEO agreeing to take questions from the democratically elected representatives of the billions of users of his products who live outside the US.

Zuckerberg agreeing to meet with parliamentarians around the world so they can put to him questions and concerns on a rolling and regular basis would be a truly incredible news flash.

Instead it’s fiction. That’s not how the empire functions.

The Facebook CEO has instead ducked as much democratic scrutiny as a billionaire in charge of a historically unprecedented disinformation machine possibly can — submitting himself to an awkward question-dodging turn in Congress last year; and one fixed-format meeting of the EU parliament’s conference of presidents, initially set to take place behind closed doors (until MEPs protested), where he was heckled for failing to answer questions.

He has also, most recently, pressed US president Donald Trump’s flesh. We can only speculate on how that meeting of minds went. Power meet irresponsibility — or was it vice versa?

 

International parliamentarians trying on behalf of the vast majority of the world’s Facebook users to scrutinize Zuckerberg and hold his advertising business to democratic account have, meanwhile, been roundly snubbed.

Just this month Zuckerberg declined a third invitation to speak in front of the International Grand Committee on Disinformation which will convene in Dublin this November.

At a second meeting in Canada earlier this year Zuckerberg and COO Sheryl Sandberg both refused to appear — leading the Canadian parliament’s ethics committee to vote to subpoena the pair.

While, last year, the UK parliament got so frustrated with Facebook’s evasive behavior during a timely enquiry into online disinformation, which saw its questions fobbed off by a parade of Zuckerberg stand-ins armed with spin and misdirection, that a sort of intergovernmental alchemy occurred — and the International Grand Committee on Disinformation was formed in an eye-blink, bringing multiple parliaments together to apply democratic pressure to Facebook. 

The UK Digital, Culture, Media and Sport committee’s frustration at Facebook’s evasive behavior also led it to deploy arcane parliamentary powers to seize a cache of internal Facebook documents from a US lawsuit in a creative attempt to get at the world-view locked inside Zuckerberg’s blue box.

The unvarnished glimpse of Facebook’s business that these papers afforded certainly isn’t pretty… 

US legal discovery appears to be the only reliable external force capable of extracting data from inside the bellow of the nation-sized beast. That’s a problem for democracies. 

So Facebook instructing an ‘oversight board’ of its own making to do anything other than smooth publicity bumps in the road, and pave the way for more Facebook business as usual, is like asking a Koch brothers funded ‘stink tank’ to be independent of fossil fuel interests. The OB is just Facebook’s latest crisis PR tool. More fool anyone who signs up to ink their name to its democratically void rubberstamp.

Dig into the detail of the charter and cracks in the claimed “independence” soon appear.

Aside from the obvious overriding existential points that the board only exists because Facebook exists, making it a dependent function of Facebook whose purpose is to enable its spawning parental system to continue operating; and that it’s funded and charged with chartered purpose by the very same blue-veined god it’s simultaneously supposed to be overseeing (quite the conflict of interest), the charter states that Facebook itself will choose the initial board members. Who will then choose the rest of the first cohort of members.

“To support the initial formation of the board, Facebook will select a group of cochairs. The co-chairs and Facebook will then jointly select candidates for the remainder of the board seats,” it writes in pale grey Facebookese with a tone set to ‘smooth reassurance’ — when the substance of what’s being said should really make you go ‘wtf, how is that even slightly independent?!’

Because the inaugural (Facebook-approved) member cohort will be responsible for the formative case selections — which means they’ll be laying down the foundational ‘case law’ that the board is also bound, per Facebook’s charter, to follow thereafter.

“For each decision, any prior board decisions will have precedential value and should be viewed as highly persuasive when the facts, applicable policies, or other factors are substantially similar,” runs an instructive section on the “basis of decision-making”.

The problem here hardly needs spelling out. This isn’t Facebook changing, this is more of the same ‘Facebook first’ ethos which has always driven its content moderation decisions — just now with a highly polished ‘overseen’ sheen.

This isn’t accountability either. It’s Facebook trying to protect its business from actual regulation by creating a blame-shifting firewall to shield its transparency-phobic execs from democratic (and moral) scrutiny. And indeed to shield Zuckerberg & his inner circle from future content scandals that might threaten to rock the throne, a la Cambridge Analytica.

(Judging by other events this week that mission may not be going so well… )

Given the lengths this company is going to to eschew democratic scrutiny — ducking and diving even as it weaves its own faux oversight structure to manage negative PR on its behalf (yep, more fakes!) — you really have to wonder what Facebook is trying to hide.

A moral vacuum the size of a black hole? Or perhaps it’s just trying to buy time to complete its corporate takeover of the democratic world order…

Because of course the Oversight Board can’t set actual Facebook policy. Don’t be ridiculous! It can merely issue policy recommendations — which Facebook can just choose to ignore.

So even if we imagine the OB running years in the future, when it might theoretically be possible its membership has drifted out of Facebook’s comfortable set-up “support” zone, the charter has baked in another firewall that lets Zuckerberg ignore any policy pressure he doesn’t like. Just, y’know, on the off-chance the board gets too independently minded. Truly, there’s nothing to see here.

Entities structured by corporate interests to role-play ‘neutral’ advice or ensure ‘transparent’ oversight — or indeed to promulgate self-interested propaganda dressed in the garb of intellectual expertise — are almost always a stacked trick.

This is why it’s preferable to live in a democracy. And be governed by democratically accountable institutions that are bound by legally enforcement standards of transparency. Though Facebook hopes you’ll be persuaded to vote for manipulation by corporate interest instead.

So while Facebook’s claim that the Oversight Board will operate “transparently” sure sound good it’s also entirely meaningless. These are not legal standards of transparency. Facebook is a business, not a democracy. There are no legal binds here. It’s self regulation. Ergo, a pantomime.

You can see why Facebook avoided actually calling the OB its ‘Supreme Court’; that would have been trolling a little too close to the bone.

Without legal standards of transparency (or indeed democratic accountability) being applied, there are endless opportunities for Facebook’s self interest to infiltrate the claimed separation between oversight board, oversight trust and the rest of its business; to shape and influence case selections, decisions and policy recommendations; and to seed and steer narrative-shaping discussion around hot button speech issues which could help move the angry chatter along — all under the carefully spun cover of ‘independent external oversight’.

No one should be fooled into thinking a Facebook-shaped and funded entity can meaningful hold Facebook to account on anything. Nor, in this case, when it’s been devised to absorb the flak on irreconcilable speech conflicts so Facebook doesn’t have to.

It’s highly doubtful that even a truly independent board cohort slotted into this Zuckerberg PR vehicle could meaningfully influence Facebook’s policy in a more humanitarian direction. Not while its business model is based on mass-scale attention harvesting and privacy-hostile people profiling. The board’s policy recommendations would have to demand a new business model. (To which we already know Facebook’s response: ‘LOL! No.’)

The Oversight Board is just the latest blame-shifting publicity exercise from a company with a user-base as big as a country that gifts it massive resource to throw at its ‘PR problem’ (as Facebook sees it); i.e. how to seem like a good corporate citizen whilst doing everything possible to evade democratic scrutiny and outrun the leash of government regulation. tl;dr: You can’t fix anything if you don’t believe there’s an underlying problem in the first place.

For an example of how the views of a few hand-picked independent experts can be channeled to further a particular corporate agenda look no further than the panel of outsiders Google assembled in Europe in 2014 in response to the European Court of Justice ‘right to be forgotten’ ruling — an unappealable legal decision that ran counter to its business interests.

Google used what it billed as an “advisory committee” of outsiders mostly as a publicity vehicle, holding a large number of public ‘hearings’ where it got to frame a debate and lobby loudly against the law. In such a context Google’s nakedly self-interested critique of EU privacy rights was lent a learned, regionally seasoned dressing of nuanced academic concern, thanks to the outsiders doing time on its platform.

Google also claimed the panel would steer its decision-making process on how to implement the ruling. And in their final report the committee ended up aligning with Google’s preference to only carry out search de-indexing at the European (rather than .com global) domain level. Their full report did contain some dissent. But Google’s preferred policy position won out. (And, yes, there were good people on that Google-devised panel.)

Facebook’s Oversight Board is another such self-interested tech giant stunt. One where Facebook gets to choose whether or not to outsource a few tricky content decisions while making a big show of seeming outward-looking, even as it works to shift and defuse public and political attention from its ongoing lack of democratic accountability.

What’s perhaps most egregious about this latest Facebook charade is it seems intended to shift attention off of the thousands of people Facebook pays to labor daily at the raw coal face of its content business. An outsourced army of voiceless workers who are tasked with moderating at high speed the very worst stuff that’s uploaded to Facebook — exposing themselves to psychological stress, emotional trauma and worse, per multiple media reports.

Why isn’t Facebook announcing a committee to provide that existing expert workforce with a public voice on where its content lines should lie, as well as the power to issue policy recommendations?

It’s impossible to imagine Facebook actively supporting Oversight Board members being selected from among the pool of content moderation contractors it already pays to stop humanity shutting its business down in sheer horror at what’s bubbling up the pipe.

On member qualifications, the Oversight Board charter states: “Members must have demonstrated experience at deliberating thoughtfully and as an open-minded contributor on a team; be skilled at making and explaining decisions based on a set of policies or standards; and have familiarity with matters relating to digital content and governance, including free expression, civic discourse, safety, privacy and technology.”

There’s surely not a Facebook moderator in the whole wide world who couldn’t already lay claim to that skill-set. So perhaps it’s no wonder the company’s ‘Oversight Board’ isn’t taking applications.

via Click on the link for the full article

Here are the 22 companies from Alchemist Accelerator’s Demo Day XXII

Alchemist Accelerator, a startup incubator which focuses on enterprise companies, held a demo day yesterday for its 22nd batch.

Each company got 5 minutes to tell a theater full of investors who they are, what they’re building, and why they might be the best to build it. We saw companies working on everything from industrial robotic vacuums, to platforms for healthcare facilities, to AI-driven money lending platforms.

Couldn’t be in the room, but want to know which companies debuted? Here’s my notes on all twenty two teams, in the order in which the presented:

1) Cresance: Uses AI to cut cloud operating costs, using their algorithms to detect wastage. Companies are spending $200B on the cloud in 2019; Cresance estimates that this will go up to $500B in 3-5 years.

bridgefy

2) Bridgefy: Building mobile apps that continue to work when the user’s own internet connection is unavailable. Their framework allows apps to fall back to a Bluetooth mesh network made up of other nearby users. Founder Jorge Rios says they’ve signed over 12,700 license agreements in four months, with Bridgefy’s own messaging app seeing 140,000 downloads in four weeks (largely driven by a surge in users during the Hong Kong protests.) Was introduced to the stage by Twitter co-founder and Bridgefy investor Biz Stone.

3) Synapbox: Helps brands determine how their image/video content will perform, and tells them what they can do to improve performance. Founder Cristina De la Peña says the company is projecting an ARR of over $1 million, with the company making $60k in August and $85k in September.

4) Teleon Health: A software platform for senior care facilities. Their first product is a HIPAA-compliant staff communication platform that allows staffers to easily reach each other, access and discuss patient data, and send scheduling updates.

5) Particle: AI insights for commodity markets (like cobalt, or platinum), constantly scanning “over one million highly relevant data points each day” for things like weather disasters, local conflicts, etc. $1M in revenue in 2019, and predicts that they’ll triple that in 2020.

pristem

6) Pristēm: Steam cleaning in a portable box. Meant to be a dry cleaning alternative for offices, hotels, apartments, etc. Hardware license + monthly subscription. The company’s co-founder says they have letters of intent from Marriot, Hyatt, and other hotel chains. Company name is pronounced like “Pristine” mashed up with the word “steam”.

7) EveraLabs: An at-home, mail-in kit which the company says allows for stem cell collection from urine. The idea would be to collect stem cells when you’re young for use in case of health issues later.

8) testRigor: Produces autonomous “human-level” testing for software in development. Currently seeing a $200k ARR, forecasting $300k in the next 30 days. Co-founder Artem Golubev says testRigor is already talking with 26 companies, including GrubHub, stockX, and Genentech.

9) Spectrum CannaLabs: Faster, accurate, and dedicated testing for legal cannabis products. In many states, all legal cannabis products must be tested for things like residual pesticides, funguses, heavy metals, and foreign materials prior to distribution— but Spectrum says the labs are overrun.

10) Gritwell: A platform meant to connect practitioners like dietitians, nutritionists, and naturopaths to patients with chronic health conditions. The company is initially focusing on patients with Lupus, later expanding to other autoimmune diseases.

11) Green Light Labs: A marketing platform meant to convince users to switch to electric vehicles. Their MyGreenCar and MyFleetBuy apps analyze your trips while you drive, calculating how much different cars might cost you (or your company) to run. Currently has $1.3M in contracted revenue.

12) Friendly Robots: Autonomous vacuums for the cleaning industry — think Roomba, but bigger, built for large/complicated commercial spaces, and with dramatically improved autonomy. CEO Xiao Xiao previously worked at Apple, designing and building things like the odometry/motion sensing algorithms for the Apple Watch.

13) Bludot: A cloud-based platform for helping city governments oversee and analyze the growth of its local businesses, tying into data like licensing/permitting and providing a place for the city to communicate with the owners. They’ve currently completed a pilot program with one mid-size city.

14) Coolso: A muscle-sensing, wrist-worn device for controlling devices with gestures. Initially focused on industrial use cases. Co-founder Jack Wu says their solution is cheaper to build but more stable than alternative approaches like Thalmic Labs’ Myo or Leap Motion.

15) Crelytics: A software platform for lenders with AI-driven risk assessment and fraud detection, and a customizable decision engine. Currently seeing $100k+ in ARR.

16) LEAD: A platform meant to help companies “develop an amazing workplace culture” by matching employees based on interests and professional backgrounds and getting them together every 1-4 weeks for coffee, lunch, or virtual check-ins. Ties into existing software like Slack and Google Suite.

celly

17) Celly.ai: AI-powered microscopy diagnosis. Strap an iPhone to a microscope’s lens with their optical adapter, and Celly’s neural networks can help analyze blood smears, starting with blood cell counts.

18) Blushup: Marketplace and appointment booking solution for beauty retailers (like L’oreal/Lancome). Company founder Monique Salvador says only 37% of beauty retailers currently use online booking solutions.

19) Modality.ai: Analyzes video of a user (recorded while they interact with an on-screen avatar) for facial movements and speech patterns to evaluate changes in neurological diseases. Intended to make clinical drug trials for these conditions more efficient thanks to standardized/objective data.

20) Chowmill: Faster, easier meal ordering for enterprises for things like group meetings and events. Enter info like dietary preferences, favorite cuisines, and budget, and Chowmill automates much of the remaining process away. Founded Mubeen Arbab says the company is currently seeing gross margins of roughly 40%. In January they saw 25k in revenue; by August, that was up to $118k.

21) Yaydoo: Procurement automation for companies, making things like negotiation and recurring orders more efficient. Projecting a $1.2M ARR

22) SmartBins: Smart dispensers for bulk products at the grocery store. Works with existing bulk bins. The customer uses the bulk bin as normal, and SmartBin’s system automatically calculates how much product was pulled from the bin and has a label/tag printed for them at a nearby kiosk. Company co-founder David Conway say they’ve already got a sale agreement with the company that makes 100% of the bulk bin fixtures on the market. Brands and retailers get a dashboard with item-by-item purchasing analytics.

via Click on the link for the full article

Zoox CEO Aicha Evans to talk self-driving cars at Disrupt SF 2019

Aicha Evans, CEO of self-driving startup Zoox, is joining us at TechCrunch Disrupt San Francisco in just two short weeks.

Evans came on board to Zoox earlier this year following the unexpected firing of co-founder and former CEO Tim Kentley-Klay in August. At the time of the announcement, Zoox co-founder and CTO Jesse Levinson told TechCrunch he and the board of directors believed “that to take the company through the next stage and to scale the company, we thought finding someone with executive and operational experience would be helpful to the company.”

That’s where Evans came in. Before joining Zoox, Evans served as Intel’s chief strategy officer. Evans spent 12 years at Intel, where she was responsible for leading the company’s transition from a PC-centric business to a data-centric one. She also served as a general manager in the communication and devices group. Her first day at Zoox was February 26.

In California, Zoox has a permit to participate in the state’s Autonomous Vehicle Passenger Service pilot, which means Zoox can transport passengers with a safety driver behind the wheel, but not charge those passengers.

Zoox’s plan is to publicly deploy autonomous vehicles by 2020 in the form of its own ride-hailing service. The cars themselves will be all-electric and fully autonomous.

Evans joins other notable speakers including Will Smith and Ang Lee, Lockheed Martin CEO Marillyn Hewson, Snap’s Evan Spiegel, and Marc Benioff. You can check out the agenda here.

Hear more about Zoox’s plan from the CEO herself at Disrupt SF. You can snag your tickets here.


via Click on the link for the full article

Startups Weekly: Upfront Ventures bets on a bus service

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy news pertaining to startups and venture capital. Before I jump into today’s topic, let’s catch up a bit. Last week, I profiled an e-commerce startup Part & Parcel. Before that, I wrote about Stripe’s grand plans.

Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

Startup Spotlight: Landline

Some startups build space ships that will one day send us all to Mars, others put their time and energy into improving 350 year old infrastructure.

Landline, the operator of a bus network in the Midwest, is one of the latest companies to raise venture capital. The business has closed a $3.85 million round led by Los Angeles firm Upfront Ventures, with participation from Mucker Capital and Matchstick Ventures. The company is actually based out of LA, too, but has completed its initial launch in Minnesota, where there’s greater demand for short-term bus travel.

Landline isn’t just a few buses with startup branding. Founder and chief executive officer David Sunde tells TechCrunch a ride on Landline is booked through its partner airline Sun Country Airlines. A traveler pays Sun Country one fixed price to get them from the bus pick-up point to their final destination. The goal is to help those who live far distances from airports save money and to make the experience of busing more enjoyable.

“It’s all meant to be at the level of reliability that you would expect from an air carrier,” Sunde tells TechCrunch. “We don’t want people who get on the bus to be surprised or upset — we want it to be a seamless experience … The perception of bus travel in the U.S. is negative. A big part of our mission is to get people comfortable on buses again as a viable alternative to air travel in certain markets.”

For those of you wondering, have these people ever heard of Greyhound? Landline says they wont compete with Greyhound because of the more than 100-year-old transportation business’s focus on long-haul trips. Landline will specifically focus on connecting those in rural communities to airports, particularly regions where there aren’t already bus routes that conveniently access the airport. Can’t say I’m particularly bullish on this one but the startup is very early and transportation is a massive market ripe for disruption.

“Our vision is completely integrated multi-modal travel,” Sunde added.

GettyImages 470533010

IPO Update

WeWork has delayed its IPO following questions surrounding its corporate governance and the ultimate value of the company. The co-working business says it expects to go public by the end of the year. Airbnb, for its part, filed a press release this week confirming its plans to go public in 2020. We don’t know much about the company’s plans, but we wouldn’t be too surprised to see the home-sharing decacorn pursue a direct listing.

Postmates, the popular food delivery service, raised another $225 million at a valuation of $2.4 billion in a round led by the private equity firm GPI Capital this week. The financing brings Postmates’ total funding to nearly $1 billion. The company filed privately with the SEC for an IPO earlier this year. Sources familiar with the company’s exit plans say the business intends to publicly unveil its IPO prospectus this month.

To discuss the company’s journey to the public markets and the challenges ahead in the increasingly crowded food delivery space, Postmates co-founder and chief executive officer Bastian Lehmann will join us onstage at TechCrunch Disrupt on Friday October 4th. Don’t miss it.

VC Deals

GettyImages 849201940

Learn from top VCs at TechCrunch Disrupt

A whole lot of VCs will be joining us at TechCrunch Disrupt.

We’ll have a16z general partners Chris Dixon, Angela Strange and Andrew Chen for insight into the firm’s latest activity. Seed investor Charles Hudson of Precursor Ventures and Redpoint Ventures general partner Annie Kadavy will show up to give founders tips on how to raise VC. Y Combinator’s Michael Seibel and Ali Rowghani will join us with advice on how to get accepted to their respected accelerator.

Plus, GV’s David Krane, Sequoia general partner Jess Lee, Floodgate’s Ann Miura-Ko, Aspect Ventures’ Theresia Gouw, Bessemer Venture Partners’  Tess Hatch, Forerunner Ventures’ Eurie Kim, Mithril Capital’s Ajay Royan and SOSV’s Arvind Gupta will be on deck to comment on the respective fields.

Disrupt SF runs October 2-4 at the Moscone Center in the heart of San Francisco. Passes are available here.

#EquityPod

This week, the lovely Alex Wilhelm and I welcomed Kleiner Perkins’ Mamoon Hamid, known for his investments in Slack, Figma, Cameo and more, to riff on upcoming IPOs and debate the scalability of D2C brands. Listen to the episode here or watch us on YouTube.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercastSpotify, and all the casts.

via Click on the link for the full article

Want to crush competitors? Forget SoftBank, Blackstone suggests; it can write $500 million checks, too

Back in January, Blackstone — the investment firm whose assets under management surpassed a jaw-dropping half a trillion dollars earlier this year — quietly began piecing together a new, growth equity platform called Blackstone Growth, or BXG. Step one was hiring away Jon Korngold from General Atlantic, where he’d spent the previous 18 years, including as a managing director and a member of its management committee.

Step two has been for Korngold, who is responsible for running the new program, to build a team, which he has been doing throughout the year, bringing in “people who speak the language of Blackstone,” he says, including from TCV, Andreessen Horowitz, Carlyle, Vista Private Equity, NEA, and SoftBank .

Apparently, the group is now ready for business. It has already closed on two deals from existing pools of capital with Blackstone, including acquiring outright the mobile ad company Vungle. According to Korngold, two more term sheets “are being signed imminently.”

We talked with him last week for more information about what the group is shopping for, what size checks it is willing to write, and which firms it views as its biggest rivals for deals (and more). Our chat has been edited for length and clarity.

TC: You’ve been hiring throughout the year people who have large-scale growth equity backgrounds. Are many of them women?

JK: Blackstone is one of the most diverse organizations [in terms of] gender or ethnicity. In general, it’s a huge priority for the firm and within our group of 20 people, 40 percent are female, a number we hope to get to 50 percent. Hiring is still in process, but it’s a really healthy culture.

TC: How many people does Blackstone employ altogether?

JK: There are 2,600 altogether across 24 offices.

TC: Is your group investing a discreet pool of capital?

JK: At some point, we’ll have a dedicated pool of capital, but as a firm, we’ve been investing in growth equity for some time [so have relied on other funds within Blackstone to date].

TC: There’s no shortage of growth equity in the world right now. What is Blackstone building that’s so different?

JK: The sheer scale of the operation is different. We have nearly 100 operating professionals — employees of Blackstone — who were hired because they are functional experts — from pricing experts to process engineering experts to human capital and procurement and digital marketing experts — and who can advise our companies.

Also, Blackstone can holistically assist a company through [our] growth equity and real estate and procurement and debt [groups] and other related infrastructure support, enabling companies to fight way above their weight class.  We have 6,000 people across our portfolio, and that provides an interesting opportunity for our companies to cross pollinate [and to cross-sell to] one another.

Unlike most growth equity firms, we also have a significant number of data scientists who do three things: identify proprietary signals across asset classes to help instruct where we should be hunting; help our companies monetize their data; and help us in our diligence. They’ll access raw data feeds and almost see the matrix, if you will.

TC: How many data scientists are we talking about?

JK: A couple dozen [across Blackstone].

TC: Blackstone must be competing against fast-growing tech companies for data scientists. How do you convince them that work for an investing giant is the better gig?

JK: If you’re an intellectually curious individual, there are so many signals [coming through Blackstone] that it’s almost a proxy for the world. It’s like manna from heaven. It’s not like they’re doing a single-threaded approach. The nature of the challenges across our companies is so vast and so varying that whether you’re looking at a fast-growing retailer or a cell phone tower in another country,  the nature of the tasks is always changing.

TC: SoftBank seems to have shaken things up a bit when it came on to the scene, given the size checks it is writing. Your boss, Steven Schwarzman, who recently talked with us about this bigger new push into growth equity, made sure to note that there are few organizations that can write $500 million checks.

JK: [Laughs.] Everyone in Silicon Valley wants to talk about SoftBank. We celebrate a lot of what SoftBank has done. They’ve validated the thesis that there’s an opportunity for growth equity on a scale that hasn’t traditionally been available.

It’s similar to the way we’re set up. SoftBank was never meant to compete with the venture community; they’re competing with the capital markets, and as private companies look to stay private longer market, SoftBank wants to support their development.

TC: And . . .

JK: I think the reality is that a lot of businesses have unproven business models and unit economics, and they’re garnering massive amounts of capital from different constituents. It’s less about who is staying private longer but are they sustainable over the long run, whether public or private. I think a lot of companies right now now that have unproven business models have been flooded by cash at too small a scale where they aren’t ready to handle it, and it masks weaknesses.

TC: Where is that most acute, in your view?

JK: I see that at the smaller growth equity phase — the $25 million to $150 million [per firm per check] range — where most growth equity resides because you have every VC firm there now. Many of the growth funds that have moved downstream. You also have crossover funds like DST and Coatue and Tiger, along with corporate venture capital. That huge flood of capital has created these massive valuations and it has  compressed the due diligence involved.

If you look at Lyft and Uber — and Snap was in this category — the market is starting to speak. Public market shareholders are willing to give you the benefit of the doubt for a while but not indefinitely. You can’t feed the machine for growth’s sake.

TC: So what type of deals are you searching out?

JK: We won’t step into a situation where unit economics aren’t proven from day one. You won’t see us in a company that’s selling $1 for 80 cents and hoping someday that works. We’re Inherently more binary in profile. We’re capital-preservation minded while looking for asymmetric upside, and that’s where we have a disproportionate advantage. You’ll see us do deals where we can put our thumb on the scale, because of our real estate holdings or buyout assets or because [search across our] portfolio for help with procurement costs or insurance or R&D or a company’s go-to-market strategy.

TC: What have you done that proves all these bells and whistles make a difference? 

JK: We have a couple of signed deals, including [the mobile ad company] Vungle [for a reported $750 million-ish], though we’re more often looking for growth-equity minority ownership positions. [Think] companies that are looking for a partner and not an owner. We’ll do growth buyouts but the vast majority will be significant minority positions.

We have a couple of other deals that will be signed imminently that we can’t discuss just yet.

TC: Are you hoping to take these companies public? Flip them to another private equity firm? Relatedly, do you have any thoughts about the public market and whether more companies should be going out?

JK: We’ll only look to an IPO if there’s a reason for it. Oftentimes, companies shouldn’t be public; sometimes, they should be, including if they need an acquisition currency or [to better establish their] branding. But the idea of, let’s rush to the door [is not our style].

TC: Who are your most direct competitors? Not Vista Private Equity, since it seems to prefer buying companies whole.

JK: Vista is going exclusively for control buyouts, massive turnarounds. It descends upon a company and says, ‘This is the playbook you will follow.’ It also uses a lot of leverage, where the vast majority or our [deals] are un-levered. We don’t use much debt. Vista and Silver Lake are much more competitors with each other.

TC: KKR then? Carlyle? 

KR: They’re also multi-asset managers, but as it relates to growth equity, we’ve really found ourselves in slightly more rarefied air. Blackstone has demonstrated that it can use its scale to create an operational advantage, and virtually no other company — or few — can contemplate checks like we can.

TC: What do you want for these checks, other than a minority position? How involved are you and what size stake, exactly, are you aiming to buy?

JK: We want to have a relevant voice, so we want to be in the boardroom, but there is no target range. It can be 10 or 20 or 30 percent. It can be 80 percent. Ideally you want to be the main outside pool of capital along with management team.

via Click on the link for the full article

Chef CEO says he’ll continue to work with ICE in spite of protests

Yesterday, software development tool maker Chef found itself in the middle of a firestorm after a Tweet called them out for doing business with DHS/ICE. Eventually it led to an influential open source developer removing a couple of key pieces of software from the project, bringing down some parts of Chef’s commercial business.

Chef intends to fulfill its contract with ICE, in spite of calls to cancel it. In a blog post published this morning, Chef CEO Barry Crist defended the decision. “I do not believe that it is appropriate, practical, or within our mission to examine specific government projects with the purpose of selecting which U.S. agencies we should or should not do business.”

He stood by the company’s decision this afternoon in an interview with TechCrunch, while acknowledging that it was a difficult and emotional decision for everyone involved. “For some portion of the community, and some portion of our company, this is a super, super-charged lightning rod, and this has been very difficult. It’s something that we spent a lot of time on, and I want to represent that there are portions of [our company] that do not agree with this, but I as a leader of the company, along with the executive team, made a decision that we would honor the contracts and those relationships that were formed and work with them over time,” he said.

He added, “I think our challenge as as leadership right now is how do we collectively navigate through through times like this, and through emotionally-charged issues like the ICE contract.”

The deal with ICE, which is a $95,000 a year contract for software development tools, dates back to the Obama administration when the then DHS CIO wanted to move the department towards more modern agile/DevOps development workflows, according Christ.

He said for people who might think it’s a purely economic decision, the money represents a fraction of the company’s more than $50 million annual revenue (according to Crunchbase data), but he says it’s about a long-term business arrangement with the government that transcends individual administration policies. “It’s not about the $100,000, it’s about decisions we’ve made to engage the government. And I appreciate that not everyone in our world feels the same way or would make that same decision, but that’s the decision that that we made as a leadership team,”Crist said.

Shortly after word of Chef’s ICE contract appeared on Twitter, according to a report in The Register, former Chef employee Seth Vargo removed a couple of key pieces of open source software from the repository, telling The Register that “software engineers have to operate by some kind of moral compass.” This move brought down part of Chef’s commercial software and it took them 24 hours to get those services fully restored, according to Chef CTO Corey Scobie.

Crist says he wants to be clear that his decision does not mean he supports current ICE policies. “I certainly don’t want to be viewed as I’m taking a strong stand in support of ICE. What we’re taking a strong stand on is our consistency with working with our customers, and again, our work with DHS  started in the previous administration on things that we feel very good about,” he said.

via Click on the link for the full article

Get advice on the latest growth tactics from Demand Curve at Disrupt SF

We’re going to try something new at Disrupt this year, based on the great response we’ve been getting to our startup how-to coverage. We’re going to put service provider experts on our Q&A stage, where you can talk to them directly in-person about key topics like growth, fundraising and recruiting.

To help kick off this experiment, we’ve asked growth marketing expert Asher King Abramson to lead a session where he’ll tear down your landing pages and Facebook/Instagram ads in front of a live audience. He’ll deconstruct how effective they are at (1) conveying what you do (2) and doing so enticingly — so that people click.

If you’re attending Disrupt and want to participate, you can submit your assets to ec_editors@techcrunch.com for him to consider.

Get your Disrupt tickets here (you’ll also get a very large discount on an Extra Crunch subscription).

If you’re not familiar, Abramson is the cofounder of Bell Curve, a growth marketing agency widely used by Y Combinator companies and others around Silicon Valley and the world, the cofounder of Demand Curve (YC s19), and a frequent industry speaker on growth (you can see some of his webinars here). We recently named Bell Curve to Verified Experts, our growing list of service providers who startups love to work with, based on founder recommendations. You may also be familiar with his cofounder, Julian Shapiro, a columnist here at TechCrunch who has covered topics for us including trends in paid channel ad prices, how well different sectors monetize and now a regular column featuring tips from across top growth marketers.

This focus on growth is part of our larger orientation towards building great companies via coverage in our new Extra Crunch subscription product.


via Click on the link for the full article

Matchstick Ventures raises $30M to back startups in the northern U.S. and the Rockies

Matchstick Ventures, a seed-stage firm that says it invests in “rapidly growing, yet underserved startup ecosystems,” announced this week that it has raised $30 million for its second fund.

That’s a lot more money than the firm’s $5 million seed round. This time, Matchsetick says it will write initial checks of around $500,000, and in some cases make follow-on investments of $1 million or $2 million.

The firm’s partners, Ryan Broshar and Natty Zola, are based in Minneapolis-St Paul and Boulder, and they said that the underserved ecosystems that they’re focused on include “the North, the Rockies, and companies across the Techstars ecosystem.” This is the first fund Matchstick has raised since Zola (the co-founder of Everlater, acquired by our parent company AOL) joined as a partner last year.

And even though Broshar and Zola only recently closed and announced the fund, they’ve already used it to make a number of investments, backing Onward (San Francisco), Soona (Denver), Upsie (Minneapolis), Pana (Denver) and Ordermark (Los Angeles).

The investors in the fund include Foundry Group, which discussed the relationship between the two firms in a blog post:

We’ve co-invested and served on boards with them and [Foundry Group Managing Director] Seth Levine has been an official advisor to Matchstick since inception. As we’ve gotten to know Natty and Ryan, we’ve also seen the ecosystems in which they operate — the North and the Rockies — begin to really thrive and gain momentum … We believe great companies can be built anywhere and are excited about Matchstick’s opportunity to leverage Natty and Ryan’s positions within their respective communities to partner with incredible founders and build their firm.

via Click on the link for the full article

Take cover, it’s a drone with a nail gun!

The FAA has warned against equipping your drone with weapons such as flamethrowers and handguns. But can a nail gun really be considered a weapon — that is, outside of Quake? Let’s hope not, because roboticists at the University of Michigan have made a roofing drone that uses that tool to autonomously nail shingles into place.

In a video shot in UM’s special drone testing habitat, the craft flies up, approaches its bit of roof, and gingerly applies the nail gun before backing off and doing it a couple more times.

It’s very much just a tech demonstration right now, with lots of room to improve. For one thing the drone doesn’t use onboard cameras, but rather a system of static cameras and markers nearby that can tell exactly where the drone is and where it needs to go.

This is simpler to start with, but eventually such a drone should be able to use its own vision system to find the point where to touch down. Compared with a lot of the computer vision tasks being accomplished out there, finding the corner of a roof tile is pretty tame.

Currently the drone is also free flying and uses an electric nail gun; This limits its flight time to about 10 minutes and a few dozen nails. It would be better for it to use a tether carrying power and air cables, so it could stay aloft indefinitely and use a more powerful pneumatic nail gun.

Drones are already used for lots of industrial applications, from inspecting buildings to planting trees, and this experiment shows one more area where they could be put to work. Roofing can be both dull and dangerous, and rote work like attaching shingles may as well be done by a drone overseen by an expert as by that expert’s own hands.

The drone is the subject of a paper (“Nailed it: Autonomous roofing with a nailgun-equipped octocopter”) by UM’s Matthew Romano and others, submitted for the International Conference on Robotics and Automation later this year.

via Click on the link for the full article