Ceros raises $14M for its interactive content platform

Ceros allows marketers to create animated, interactive content — but don’t call it a content marketing company.

“We think content is just a dry, bland, over-leveraged, oversaturated space,” said founder and CEO Simon Berg. “The goal is not to hack the system, the goal is to make a great experience for your customers.”

That’s why he describes Ceros as a platform for creating experiences. The company is focused on powering beautiful, well-designed graphics and web pages, instead of blog posts or white papers that mostly exist to snare search traffic.

Ceros is announcing today that it’s raised $14 million in Series C funding.

Ceros previously raised $19.5 million in funding, according to Crunchbase. The new round was led by Greenspring Associates, with participation from Grotech Ventures, CNF Investments, Sigma Prime Ventures, StarVest Partners, Greycroft and Silicon Valley Bank.

“Ceros is well known for empowering marketers to think creatively, but we have also come to know Ceros as a highly capital efficient business, which is a refreshing change in the burn-rate happy world of digital,” said Greenspring’s John Avirett, General Partner in a statement. “We’re confident that this investment will catalyze Ceros’ continued growth while enabling their team to opportunistically pursue acquisitions that enhance the core product and further penetration of key markets.”

Ceros studio

For examples of the different between Ceros “experiences” and run-of-the-mill content marketing, check out Ceros/Inspire, where some of the most viewed projects include a comic book-style blockchain explainer from Ozy and a “friend versus pro” created to promote H&R Block.

“What we’ve continued to work on over the last seven years is to comply with laws of physics that are laws of internet, whilst giving as much creative freedom as possible,” Berg said. “We want to put the creative and the design piece first.”

The company says it’s now working with more than 400 customers, including well-known brands like United Airlines and Red Bull, as well as publishers including Condé Nast and Vice, plus sports teams like the Baltimore Ravens and Detroit Lions.

“Both in terms of the revenues that we’ve reached and the clients that we’ve worked with … you never really ‘arrive,’ but I feel like we’ve reached a critical milestone,” Berg said.

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JD.com shares take off despite slowing revenue growth

Shares of JD.com, the Chinese e-commerce service that rivals Alibaba, are on the rise today after the online retailer announced better than expected results for Q4 2018, bucking uncertainty around tech companies in China.

The company reported net revenue of RMB 134.8 billion ($219.6 billion) for the final quarter of last year. Despite representing the slowest growth rate year-on-year since JD went public five years ago (22.3 percent), the figure beat analyst predictions of $19.149 billion. JD.com also beat on earnings per share.

That combination saw its Nasdaq share price rise by as much as 14 percent in pre-market trading, Reuters reports. The stock is up around five percent at the time of writing, according to Yahoo Finance data.

JD.com went public on the Nasdaq in 2014

Chinese startups are weathering challenging economics in the country. Apple recently cut its quarterly revenue forecast on account of China’s slowdown, while domestic Chinese tech companies have gone further and cut costs.

Some of those include Didi laying off 15 percent of its staff and NetEase making reductions across multiple units, while JD.com itself is reportedly parting with 10 percent of its management team as part of downsizing.

JD.com’s revenue growth reached an all-time low as a public company in Q4 2018

Against that backdrop, beating expectations was enough to trigger investor interest despite the slowing growth of JD.com’s business. The final quarter of the year is typically its most lucrative in terms of revenue, thanks to the Singles’ Day shopping festival. That said, the company carded an overall quarterly net loss of RMB 4.8 billion, or $700 million, in Q4.

JD.com’s annual performance saw revenue rise 27.5 percent in 2018 to reach RMB 462.0 billion ($67.2 billion) with a loss of RMB 2.5 billion, $400 million. In 2017, the business eeked out a net income of RMB 116.8 million, which converted to $18 million at the time.

On the technology side, JD.com has invested heavily in drones, unmanned delivery and automated warehouses with a preference to play the ‘long-game’ on cutting-edge tech over making short-term investment spurts.

However, it has been plagued by scandal after CEO Richard Liu was arrested in the U.S. on suspicion of alleged sexual misconduct. Ultimately, Liu was not charged after authorities admitted that it was not possible to prove beyond a reasonable doubt the charges brought against him.

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Amazon launches new tools that allow brands to proactively fight counterfeiting

Amazon this morning announced a new initiative focused on reducing counterfeiting on its site called Project Zero – a name that references Amazon’s lofty goal of driving counterfeit sales to zero. The program will take advantage of Amazon’s technology, including machine learning capabilities, combined with brands’ own knowledge of their intellectual property in order to automatically and continuously scan Amazon’s store to identify and proactively remove violations, among other things.

Brands who want to utilize the new tools will provide Amazon with their logos, trademarks and other key data about their brand. Amazon will then scan its 5 billion product listing updates per day, looking for any suspected counterfeits, it says.

The idea here is to put more technology behind the search for counterfeits, in order to become more proactive instead of reactive. In the past, brands would need to file a counterfeit report with Amazon in order to take action. The new tools allow brands to directly remove and control listings from Amazon’s store without having to first contact Amazon.

Another service involved with the larger Project Zero program is product serialization.

This service will allow Amazon to scan to confirm the authenticity of every one of a brand’s products purchased on the site. The service offers a unique code for each manufactured unit, which are put on products during the manufacturing process. When the product is later ordered, Amazon scans this code to verify the purchase is authentic. If it’s not, Amazon can detect and stop a counterfeit item before it reaches the customer.

Counterfeiting has become a serious problem on Amazon, largely due to the size and scale of Amazon’s third-party marketplace, which it does little to regulate. Some of these items are never even touched by Amazon, but are sold and shipped by the third-party seller themselves. Others are only fulfilled by Amazon, but that doesn’t include a verification process.

However, those will bear a “Fulfilled by Amazon” label, which some consumers misunderstand to mean they’re trustworthy because Amazon is somehow involved.

According to a study by advocacy group The Counterfeit Report last year, there have been around 58,000 counterfeit products on Amazon since May 2016, Engadget reported. But the total number of fakes is much higher, because TCR only accounted for the brands it represents.

Amazon has been repeatedly called out by brands for effectively being “complicit” with the counterfeiting business, always dusting aside issues because they involved third-party sellers, not Amazon’s own store.

This has also allowed Amazon to escape many legal issues around counterfeiting in the courts, though it continues to face lawsuits. For instance, Daimler AG sued Amazon in 2016 for profiting from sales of wheels that violated its patents. That same year, a family sued Amazon when a counterfeit hoverboard burned down their house.

Apple also sued Mobile Star LLC for making counterfeit Apple chargers, which it tried to pass off as authentic on Amazon, which brought the retailer’s name to the news.

More recently, Amazon has inserted itself into the legal battles. Last year, it filed three lawsuits in partnership with fashion designer Vera Bradley and mobile accessories maker Otterbox, over counterfeits.

Counterfeiting is not only detrimental to consumers and the brands being knocked off, it impacts Amazon’s business directly – particularly in the increasingly important fashion category.

Many fashion brands won’t work with Amazon period. Birkenstock, for example, decided to stop doing business with Amazon. LVMH (Celine, Dior, Givenchy, Louis Vuitton, and others), said last year that the business of Amazon “does not fit” with its brands, and Swatch backed out of a deal to sell on Amazon in 2017 when the retailer refused to implement proactive protections against counterfeiters.

Despite all these issues, recent pressure from the U.S. government may have been what helped turn the tide here – forcing Amazon and others in the industry to take counterfeiting more seriously.

Last year, federal investigators purchased counterfeit products off the biggest and most well-known e-commerce sites, including Amazon, Walmart, eBay, Newegg, and Sears Marketplace. Of 47 products, 20 were counterfeit – including Urban Decay cosmetics, Yeti mugs, Nike Air Jordan shoes, phone chargers and more.

The e-commerce companies, naturally, expressed righteous condemnation of counterfeiting and pledged to work with policy makers on resolutions.

Amazon says its new Project Zero tools have been in testing with several brands before today’s launch, including the above-mentioned Vera Bradley; pet anxiety products manufacturer Thunderworks; mobile accessories maker Kenu; and lint remover manufacturer Chom Chom Roller. During the testing period, Amazon claims it was able to proactively stop 100 times more suspected counterfeit products, compared to what it reactively removes based on brands’ reports.

“Project Zero, with its automated protections and the self-service removal of counterfeit products, is a significant development that will help ensure our customers receive authentic Vera Bradley products from Amazon,” said Mark Dely, chief legal & administrator officer at Vera Bradley.

“Amazon’s product serialization service has been a game changer for us. We are excited to have this self-service counterfeit removal tool for the US Marketplace and consider this to be an insurance policy,” said Ken Minn, ceo, Kenu.

Project Zero is launching first as an invite-only product which brands can sign up for to join, before rolling out more broadly.

 

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Why can’t we build anything? (Part 2)

One of the major themes we are working on these days at the Extra Crunch Daily is trying to understand why America and many other Western nations can’t seem to build infrastructure anymore. The answers are complicated but critical: our infrastructure is decrepit, climate change is intensifying, and population growth will put even more strain on existing facilities.

In our first part in this series, we wrote about a book entitled Politics across the Hudson, which was written by Phil Plotch. He formerly headed the redevelopment of the World Trade Center following 9/11 and is now a professor finishing up a book on the travails of the Second Avenue subway slated for publication later this year.

We interviewed Plotch this week to get more details on what causes delays and cost overruns in infrastructure, and these are some of the most interesting highlights of our conversation:

  • Misinformation is a huge challenge at all levels of infrastructure planning. “People at the bottom don’t understand what is happening at the top, and the people at the top don’t understand what is happening at the bottom,” Plotch said. A cost increase that might be relatively cheap to handle immediately won’t be reported since it might piss off politicians whose support is critical for a project.
  • That type of purposeful misinformation is a huge problem at the Federal Transit Administration, which administers funds for mass transit across the country. Many of the funds are competitive, and “when there is competition, there is a lot more … gamesmanship,” Plotch said. Cities will overstate benefits and understate costs in the hope of winning funding from the federal government. “The FTA figured this out and Congress figured this out so they put in this whole bureaucracy to review the benefits,” he said. “They are trying to do the right thing … but it just slows down the process.”
  • Plotch uses a term called “vaportrain” (the locomotive version of vaporware) to describe many American infrastructure projects. Politicians want to demonstrate their bold and entrepreneurial risk-taking on infrastructure, but are daunted by the time and expense required. So they study things. Regarding the Tappan Zee bridge replacement, which is the focus of his book, Plotch wanted to ask “why was the state studying the same thing over and over again? … It wasn’t until I talked to three governors that I realized what was going on.” The issue was that a train over the bridge was widely popular but expensive, so it “just got studied year after year … it was easier to study something than actually cancelling it.”
  • Another challenge is scope creep, which should be familiar to any software engineer. While working at the Lower Manhattan Development Corporation, Plotch worked to draft a plan to connect a train from lower Manhattan to JFK Airport in Queens. When he reached out to a Congressman in Queens for federal sponsorship, “he came back and said he wanted 5%.” What he meant was “5% to be invested into his community in some shape.” Plotch analogized it as “they see it like a Christmas tree with a whole bunch of ornaments on it, and they want to add their ornaments to it as well.”
  • A better model for infrastructure today is to focus on minimal operable segments. The idea is that, instead of planning an entire route such as California’s SF to LA high-speed rail line, try to identify more limited routes that can be built efficiently and get to operation as quickly as possible. It’s the equivalent of an MVP in startuplandia, except that the MVP here often costs billions of dollars.
  • Wicked problems are policy challenges that are “difficult or impossible to solve because of incomplete, contradictory, and changing requirements that are often difficult to recognize” in the Wikipedia definition. In infrastructure, Plotch said that wicked problems are often just problems of realistically assessing what is possible given constraints. When it came to the Second Avenue subway, “by overpromising they tied themselves up” for years, and with no progress to show for it.

France’s new high speed rail trains will do everything but cure cancer

Video still courtesy of Alstom

Written by Arman Tabatabai

Continuing discussions on infrastructure, French national rail operator SNCF launched its new high-speed train that it will be rolling out through 2023. The new model will be faster, more spacious, consume 20% less energy, and perhaps most importantly, will cost 20% less than the SNCF’s current model. In addition to being more profitable and efficient from a ridership perspective, the new model offers up a cost-efficient solution to actually save money while reducing emissions as the climate change fight seems to grow more dire daily. The launch is the latest in France’s broader expansion of its high-speed rail network and shores up the national rail operator’s economics before the country begins allowing companies to provide competing service in 2021.

India’s overlooked SaaS startups

Image by jayk7 via Getty Images

Written by Arman Tabatabai

Earlier this week, Extra Crunch spoke with The Billionaire Raj author James Crabtree about the hurdles India has to overcome in order to reach the same magnitude of tech relevance as China or the US. The discussion called our attention back to a feature in the Times of India last month focused on the rapidly growing SaaS ecosystem in Chennai and greater India. The piece explains how the strength of India’s SaaS startups often gets overlooked in favor of the country’s more brand name consumer unicorns, despite raking in massive revenues and rapidly gaining share in the global SaaS market.

Chennai alone is home to multiple billion dollar companies including Freshworks and Zoho and has brought in more than half a billion in venture capital. One of the main takeaways of the piece was that much of the sector’s growth can be attributed to the city’s growing talent pool which in part flows out of its comprehensive university system and engineering think tanks.

Yet talent has also now become one of the largest limitations to the growth of the ecosystem, as India struggles to bring in foreign expertise to help propel it through its next phase of expansion:

“If only we could also make it attractive for global talent from anywhere in the world to work in Chennai or elsewhere [in India], a lot of challenges can be solved better,” says Chargebee’s [Krish] Subramanian.

India’s SaaS sector is an interesting candidate for examination. On a global level, the ecosystem is yet another example of how talent can make or a break a country’s entrepreneurial future, as we’ve discussed several times in regards to immigration. On a national level, India’s SaaS community seems to mimic a broader dynamic in India’s tech industry, where critical structural impediments stand in the country’s path to becoming a dominant innovation economy.

India’s founders are losing trust in VCs?

Alessandro Di Ciommo/NurPhoto via Getty Images

Written by Arman Tabatabai

Indian financial publication Mint published a detailed walkthrough of the country’s long history of rocky founder-investor relationships. The story explains how the shaky track record has led to a fundamental distrust between new Indian entrepreneurs and VCs, as founders have become increasingly skeptical, combative, and demanding of venture capitalists.

The piece frames the trend largely through Indian rideshare giant Ola’s ongoing tussle with SoftBank, following public reports about Ola’s determination to avoid additional SoftBank’s money.

Investor battles in India’s tech scene seem poised to only become more frequent. Having now seen billion dollar companies, exits, and success stories, India’s more knowledgable and experienced entrepreneurial community no longer views venture capital as a blessing and feels it has the leverage to demand better terms and more control.

And as founders and alumni from the many successful Indian companies that have had less than peachy investor relationships — such as Flipkart, Snapdeal or Ola — reinvest time, money and knowledge back into the ecosystem, the negative bias towards investors has the potential to get recycled through the entrepreneur community.

There is a clear lack of trust between India’s startup and venture communities, which ultimately threatens the sustainability and growth outlook of the country’s tech sector.

But a solution to the problem is not so cut and dry. Mega growth funds like SoftBank and Tiger Global have given limited control to their Indian portfolio companies and have forced their hands on numerous occasions. Yet Ola’s avoidance of SoftBank has led to lower valuations and more difficult and lengthier fundraising processes.

According to Mint, other potential investors have even shied away from writing checks due to the sheer fact that there’s no chance for a future SoftBank mark-up or cash injection. As more and more companies surpass the billion dollar valuation mark, the avenues for capital become more limited, which often means terms are pushed in favor of investors. Ola is taking a hard stance for control over capital but it’s unclear what impact that will have if and when it no longer has the luxury to do so. In either case, the tradeoffs that come with megafund capital is something more and more growth stage companies will have to consider if they want to follow the trend of staying private for longer.

Obsessions

  • We have a bit of a theme around emerging markets, macroeconomics, and the next set of users to join the internet.
  • More discussion of megaprojects, infrastructure, and “why can’t we build things”

Thanks

To every member of Extra Crunch: thank you. You allow us to get off the ad-laden media churn conveyor belt and spend quality time on amazing ideas, people, and companies. If I can ever be of assistance, hit reply, or send an email to danny@techcrunch.com.

This newsletter is written with the assistance of Arman Tabatabai from New York

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Amazon Prime members can choose a weekly delivery date with launch of ‘Amazon Day’

Amazon this morning launched a new delivery option for Prime members that will allow them to control when their orders arrive, Amazon Day. The option lets shoppers pick a day of the week to take delivery of their recent orders. The boxes arrive together on the selected Amazon Day in fewer boxes, the company says, which makes deliveries more predictable.

The move clearly benefits Amazon by reducing the number of deliveries drivers have to make to the same address, while positioning the option as a new Prime “perk.” However, there are benefits to grouping shipments like this. For example, if you live in an area where package theft is a concern, you could make your “Amazon Day” a day you are scheduled to work from home, for example.

It also means you’ll have fewer boxes to break down and recycle, which could be useful for regular Amazon shoppers concerned about waste.

Amazon says it tested the new shipping option with a group of Prime members and found that Amazon Day reduced packaging by “tens of thousands” of boxes over the course of several months. An Amazon rep would not confirm how many Prime members were participating in that test, however.

The new delivery option is considered part of Amazon’s larger set of sustainability initiatives focused on achieving Shipment Zero – its plans to make 50 percent of all Amazon shipments net zero carbon by 2030.

“Amazon Day adds another level of convenience to the many shipping benefits Prime members already enjoy. Prime members can now choose to get their orders delivered together in fewer boxes whenever possible on the day that works best for them,” said Maria Renz, Vice President, Delivery Experience at Amazon, in a statement.

To use the new feature, Prime members can select the “Amazon Day” option at checkout and pick the day of the week that works for them. Throughout the week, as you place more orders you’ll continue to pick “Amazon Day” as your delivery option. The items then deliver free on the day of your choosing.

Most items can be ordered for Amazon Day delivery up to two days before the chosen day arrives.

However, setting an Amazon Day option doesn’t prevent you from ordering other items for faster delivery, if needed. That means you can still set deliveries to free two-day shipping, one-day shipping, same-day shipping or two-hour delivery, where offered. In addition, your Subscribe & Save items will continue to ship on their own schedule.

Amazon currently runs several initiatives aimed at reducing its impact on the environment and energy consumption, including things like Frustration-Free Packaging and Ship in Own Container. It also has a network of solar and wind farms, solar on its fulfillment center rooftops and investments in the circular economy, though it has recently been dinged by Greenpeace for not moving quickly on commitments to shift to renewable energy.

Other retailers are making similar moves to focus on their environmental impact of e-commerce. Walmart this week announced its own plastic packaging waste reduction commitments across over 30,000 SKUs, and Etsy said it had become the first global e-commerce company to completely offset carbon emissions from shipping by purchasing offsets from its partner, 3Degrees.

These decisions aren’t entirely altruistic. Consumers – especially those in the younger demographic – are increasingly concerned about the sustainability factor and environmental impacts of e-commerce purchases, and this can influence their behavior when it comes to where to shop.

Amazon Day is rolling out today to all Prime members in the U.S.

 

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Vision Fund startups Fanatics and Coupang unite to sell US sports merch in Korea

SoftBank chairman Masayoshi Son has repeatedly described the Vision Fund as a club for the world’s most exciting startups and, while even the fund’s own LP seem to disagree with some of its investment thesis, its portfolio companies do frequently come together.

The latest Vision Fund partnership pairs two e-commerce firms in opposite corners of the world: U.S-based sports specialist Fanatics and Coupang, Korea’s largest e-commerce firm.

Fanatics got its Vision Fund spurs through a $1 billion deal led by SoftBank in 2017, while Coupang, was a more recent joiner via a $2 billion deal in November although SoftBank itself has been an investor for some time.

The two companies are teaming up to sell U.S. sportswear and merchandise to consumers in Korea via a 10-year deal that will kick off this summer. The Fanatics range covers NFL jerseys, NBA T-shirts, items from Nike and others. The agreement will see Coupang become the exclusive seller of all Fantatics products in Korea, which is the world’s fifth largest e-commerce market and project to grow further still.

Coupang claims that one in every two adults in Korea has its app on their phone. The nine-year-old company’s CEO, Bom Kim, told TechCrunch last year that the business is “approaching” $5 billion in revenue for 2018 with 70 percent annual growth.

That’s an ideal partner for Fanatics, which is going after a strategy of working with vertical e-commerce companies in a bid to expand its reach and distribution beyond its own network.

The company’s first deal was with Walmart in the U.S. last month, a move that pits it against Amazon, and now it is getting started on Asia, as Fanatics executive chairman Michael Rubin — pictured in the top image — told TechCrunch in a statement:

Marketplaces represent an important channel for e-commerce, especially internationally, and leagues and clubs want their official licensed products available to fans everywhere in the world. Our global marketplace strategy is a way to do just that by offering access to our industry-leading and exclusive inventory, but in a disciplined way that eliminates counterfeits and offers an improved brand presentation that benefits all parties. This is our second marketplace deal and we expect many more in the future.

Beyond this partnership, Fanatics global operations span a distribution center in Hong Kong, a tech team in India and a European hub in Berlin, Germany. The Vision Fund aside, its investors include Silver Lake, Alibaba, Temasek, A16z and Insight Venture Partners.

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ClassDojo, an app to help teachers and parents communicate better, raises $35M

Messaging apps have become the de facto way that many people today keep in regular contact with each other, and that trend has also found its way into the classroom. ClassDojo, a startup that has built a platform for teachers and parents to communicate small and big updates to each other, today is announcing that it has raised $35 million in funding.

The Series C — which is being jointly led by GSV (behind Spotify, Lyft, Dropbox) and SignalFire (which has backed Grammarly, Zume, Lime), and also includes General Catalyst and Uncork Capital — will be used in two ways. First, to fuel expansion of ClassDojo’s free communications app. And second, to drive its efforts to monetize its service by way of a new service called Beyond School, an optional subscription for families to complement in-school work with at-home tutorials around areas that are complementary to learning well, such as improving studying habits, mindfulness and so on.

(You could think of Beyond School as TedX meets Lynda for K-8, but co-founders Sam Chaudhary and Liam Don, respectively the CEO and CTO, said in an interview that they believe the content will be more than just that.)

ClassDojo has now raised $65 million, and while it is not talking valuation, I’ve been told by a good source that it is coming in at “$400ish” million. That is a huge leap on the $99 million the startup was valued at in 2015 (a figure quoted on PitchBook).

The boost in part is because of ClassDojo’s healthy growth. Since first starting out in 2011 as part of a Y Combinator cohort, the company has expanded to be used in more than 95 percent of all pre K to eighth grade schools in the US, with one in every six families with a child in primary school using the app daily.

The US is its biggest market, but ClassDojo is also now available in some 180 other countries, where it’s also starting to pick up some strong penetration. (In Singapore, Australia, Spain, Hong Kong, the UK, and the UAE, it’s used by some 25 percent of all primary school teachers, for example.) Impressively, all that growth has up to now been organic and word of mouth, one reason why the company has had to raise relatively little funding.

(It also only employs 40 people, another way of keeping costs massively down.)

One of the key things about ClassDojo is that the company has kept a very consistent focus when it comes to its mission: the idea has always been to try to identify the biggest communication problems that teachers might have in teaching kids, and trying to solve them.

Building an app that can bridge the sometimes large gaps between parent-teacher meetings, so that parents feel more engaged with what their children are learning, and teachers might have better feedback from those parents about what children are doing at home, was an obvious first step.

“Learning is so much about having strong relationships,” Chaudhary said. “It’s pretty cool to see the effect this can have not just with parents and teachers, but between parents and kids.”

Beyond School comes in the same vein and is a natural extension of that, and came not just out of what teachers said they wished they had more time to teach to students — but can’t because of the general emphasis in curriculums on academics — but from what parents wished they could work on with their children.

That, in essence, is the wider body of “learning” that you could loosely term emotional intelligence, and general techniques for coping and learning, beyond the academic work itself. “The learning experience in the classroom sparked a lot of ideas, and families were reaching out to us,” Dom said, “wondering if they could have a product to serve more unique needs at home.”

So far, the company does not have any numbers to share on how Beyond School has been taken up since launching at the end of 2018, except to say that it’s going well.

Longer term, it’s interesting to consider how ClassDojo fits into the wider trend of communication and messaging apps, and whether others might ever try to compete in the same space, or perhaps acquire ClassDojo as they extend into other verticals — a strategy that Microsoft, for example, has been following when it comes to acquiring other businesses as it works on tapping the $10 trillion market for education.

I asked Hemant Taneja, a partner at General Catalyst, if he ever thought the likes of Slack, for example, might ever try to compete with it. (No, is the short answer.)

“Slack is a work tool, and I can’t imagine there will be a synergy there,” he said, and nor would it possibly even work. “As a worker and parent, I think that there should be an education platform solely devoted to kids, where the stakeholders are family and teachers. I’ve always believed that from the beginning and I think that ClassDojo’s scale gives it that potential.”

 

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SoftBank’s Vision Fund invests $1.5B in Chinese second-hand car startup Chehaoduo

SoftBank’s Vision Fund is taking a bet on China’s auto market after it agreed to pour $1.5 billion into online car trading group Chehaoduo, which literally means “many cars” in Chinese.

The Beijing-based company operates two main sites — peer-to-peer online marketplace Guazi for used vehicles, and Maodou, which retails new sedans through direct sales and financial leasing. (These sub-brands are more subtly named, which translate to “sunflower seeds” and “edamame”, respectively.)

Chehaoduo said it will deploy the proceeds on technology investments as well as the development of new products and services. It also plans to ramp up its marketing efforts and continue to open brick-and-mortar stores, an omnichannel move it believes can enhance trust in consumers used to meeting dealers in person and differentiate it from peers with an exclusively online focus. Chehaoduo currently runs 600 offline stores nationwide supporting new and used car dealing along with after sales services.

The sizable funding round arrived at a time when China’s softening economy is sapping consumer confidence, but the company’s two-pronged strategy makes sure it covers a broad range of consumer demands. New passenger car sales in China — the world’s largest auto market — fell for the first time since the 1990s to 23.7 million units last year, according to a report by China’s Association of Automobile Manufacturers, the country’s top auto association.

On the other hand, used cars became a more economical choice in a consumer culture that, unlike many countries in the west, has been slow to embrace second-hand goods. But that mindset is shifting as people feel the heat of the Chinese economic downturn: Secondhand car sales were up 13 percent during the first eleven months of 2018, data from China’s Automobile Dealers Association show.

“China’s used car market is growing rapidly but online penetration remains low and auto financing is underutilized compared to developed markets. In just three years, Chehaoduo Group, through the Guazi brand, has leveraged the latest innovations in data-driven technology to establish China’s leading car trading platform,” says Eric Chen, partner at SoftBank’s Investment Advisers, in a statement. The Japanese investment group has been a prolific backer in the mobility industry through a variety of affiliated companies with Vision Fund being one. SoftBank’s massive portfolio includes the likes of Uber, Didi Chuxing and Grab .

The car dealing group counts Uxin and Renrenche as its most serious rivals. Uxin raised $225 million from a U.S. initial public offering last June while Renrenche lured Goldman Saches in a $300 million funding round last year that also saw participation from Didi and Tencent.

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LinkedIn forced to ‘pause’ mentioned in the news feature in Europe after complaints about ID mix-ups

LinkedIn has been forced to ‘pause’ a feature in Europe in which the platform emails members’ connections when they’ve been ‘mentioned in the news’.

The regulatory action follows a number of data protection complaints after LinkedIn’s algorithms incorrect matched members to news articles — triggering a review of the feature and subsequent suspension order.

The feature appears as a case study in the ‘Technology Multinationals Supervision’ section of an annual report published today by the Irish Data Protection Commission (DPC). Although the report does not explicitly name LinkedIn — but we’ve confirmed it is the named professional social network.

The data watchdog’s report cites “two complaints about a feature on a professional networking platform” after LinkedIn incorrectly associated the members with media articles that were not actually about them.

“In one of the complaints, a media article that set out details of the private life and unsuccessful career of a person of the same name as the complainant was circulated to the complainant’s connections and followers by the data controller,” the DPC writes, noting the complainant initially complained to the company itself but did not receive a satisfactory response — hence taking up the matter with the regulator.

The complainant stated that the article had been detrimental to their professional standing and had resulted in the loss of contracts for their business,” it adds.

“The second complaint involved the circulation of an article that the complainant believed could be detrimental to future career prospects, which the data controller had not vetted correctly.”

LinkedIn appears to have been matching members to news articles by simple name matching — with obvious potential for identity mix-ups between people with shared names.

“It was clear from the complaints that matching by name only was insufficient, giving rise to data protection concerns, primarily the lawfulness, fairness and accuracy of the personal data processing utilised by the ‘Mentions in the news’ feature,” the DPC writes.

“As a result of these complaints and the intervention of the DPC, the data controller undertook a review of the feature. The result of this review was to suspend the feature for EU-based members, pending improvements to safeguard its members’ data.”

We reached out to LinkedIn with questions and it pointed us to this blog post where it confirms: “We are pausing our Mentioned in the News feature for our EU members while we reevaluate its effectiveness.”

LinkedIn adds that it is reviewing the accuracy of the feature, writing:

As referenced in the Irish Data Protection Commission’s report, we received useful feedback from our members about the feature and as a result are evaluating the accuracy and functionality of Mentioned in the News for all members.

The company’s blog post also points users to a page where they can find out more about the ‘mentioned in the news’ feature and get information on how to manage their LinkedIn email notification settings.

The Irish DPC’s action is not the first privacy strike against LinkedIn in Europe.

Late last year, in its early annual report, on the pre-GDPR portion of 2018, the watchdog revealed it had investigated complaints about LinkedIn related to it targeting non-users with adverts for its service.

The DPC found the company had obtained emails for 18 million people for whom it did not have consent to process their data. In that case LinkedIn agreed to cease processing the data entirely.

That complaint also led the DPC to audit LinkedIn. It then found a further privacy problem, discovering the company had been using its social graph algorithms to try to build suggested networks of compatible professional connections for non-members.

The regulator ordered LinkedIn to cease this “pre-compute processing” of non-members’ data and delete all personal data associated with it prior to GDPR coming into force.

LinkedIn said it had “voluntarily changed our practices as a result”.

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Zūm, a ridesharing service for kids, raises $40 million

Ride-sharing isn’t just for transporting teenagers and adults anymore. Zūm, a ridesharing startup for kids, just raised a $40 million Series C round led by BMW i Ventures with participation from Spark Capital and Sequoia Capital. This brings the company’s total funding to $70 million.

Zūm is a mobile app that enables parents to schedule rides for their kids from fully-vetted drivers. It also partners with school districts to support their transportation needs. To date, the company has partnered with 150 school districts across the country and transported more than 500,000 students.

“Zūm has proven itself as a force to be reckoned with in a market that has a lot of untapped opportunity,” BMW i Ventures Managing Partner Ulrich Quay said in a statement. “Its leadership is strong not only because of their drive to help working families, but because they themselves have families and understand the need for better child transportation, today. We’re proud to be supporting Zūm and look forward to seeing its momentum as it continues driving funds back into schools.”

The plan with the funding is to support the increase of partnerships with schools throughout the nation. Additionally, Zūm plans to use the funding to further develop its one-stop platform technology for schools. This platform features route optimization, vehicle and quality tracking and real-time vehicle dashboards for schools.

“I’m honored to gain the support of our incredible investors who believe in what Zūm does, and our mission to build the world’s largest and safest transportation service for students,” Zūm founder and CEO Ritu Narayan (pictured above) said in a press release. “It is beyond exciting to have investors who have supported transportation, tech and marketplace startups across the globe, and to know they see in Zūm what I’ve seen since the beginning—ineffective, inefficient school transportation is a massive issue and we need to build a better future for our children.”

Zūm, however, is not the only startup tackling transportation for kids. HopSkipDrive, a rideshare service that picks up your kids, similarly partners with school districts for school bus alternatives. In 2017, HopSkipDrive raised a $7.4 million round to bring its total funding to $21.5 million. There’s also Kango, a more Uber-like service for kids. However, you may recall Shuddle’s shutdown of its Uber-like service for kids in 2016. Shuddle had raised $12.2 million prior to shutting down. Perhaps partnering with schools and school districts is the way to go in this kid ridehailing business.

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