Revolut raises $500 million at a $5.5 billion valuation

Fintech startup Revolut is raising a large Series D round of funding. TCV is leading the $500 million round, valuing the company at $5.5 billion. Over the past few years, Revolut has raised $836 million in total.

Some existing investors are also participating in today’s funding round, but Revolut isn’t sharing names. Previous investors include DST Global, Index Ventures, Balderton Capital and many others.

If you’re not familiar with Revolut, the company is building a financial service to replace traditional bank accounts. You can open an account from an app in just a few minutes. You can then receive, send and spend money from the app or using a debit card.

On top of that, Revolut has added a ton of features that it has built in-house or through partnerships. You can insure your phone, get a travel medical insurance package, buy cryptocurrencies, buy shares, donate to charities, save money and more.

Revolut currently has more than 10 million customers, mostly in Europe and the U.K. The company doesn’t share specific numbers when it comes to transaction volume and monthly active customers, but here are some percentage-based metrics:

  • The total number of users has grown by 169% in 2019.
  • Daily active customers grew by 380% in 2019.
  • Revenue grew by 354% in 2018 (yes, 2018).
  • Revenue from premium subscription plans (Revolut Premium and Revolut Metal) have grown by 154% in 2019.

With the new influx of cash, the company says that it’ll focus on improving its product for existing users as well as revenue. It’s all about making Revolut more useful and stickier going forward.

In particular, you can expect new lending services for both retail customers as well as companies using Revolut for Business. While Revolut provides a ton of services in the U.K., customers in other markets don’t have the same feature set. For instance, Revolut recently launched savings vaults in the U.K. — customers in other markets will be able to open savings sub-accounts in the future, as well.

Other than that, Revolut wants to double down on the core features. The company will improve its two subscription tiers (Premium and Metal) and improve banking operations across Europe — you can expect full bank accounts in Europe in the future.

There are currently 2,000 people working for Revolut. “We’re on a mission to build a global financial platform — a single app where our customers can manage all of their daily finances, and this investment demonstrates investor confidence in our business model. Going forward, our focus is on rolling-out banking operations in Europe, increasing the number of people who use Revolut as their daily account, and striving towards profitability,” Revolut co-founder and CEO Nik Storonsky said in the release.

Revolut is currently live in the U.K., Europe, Singapore and Australia (in beta). While the company has announced plans to expand to a handful of countries, the main focus is on launching in the U.S. and Japan in the coming months.

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VC firm Oxx says SaaS startups should avoid high-risk growth models

Oxx, a European venture capital firm co-founded by Richard Anton and Mikael Johnsson, this month announced the closing of its debut fund of $133 million to back “Europe’s most promising SaaS companies” at Series A and beyond.

Launched in 2017 and headquartered in London and Stockholm, Oxx pitches itself as one of only a few European funds focused solely on SaaS, and says it will invest broadly across software applications and infrastructure, highlighting five key themes: “data convergence & refinery,” “future of work,” “financial services infrastructure,” “user empowerment” and “sustainable business.”

However, its standout USP is that the firm says it wants to be a more patient form of capital than investors who have a rigid Silicon Valley SaaS mindset, which, it says, often places growth ahead of building long-lasting businesses.

I caught up with Oxx’s co-founders to dig deeper into their thinking, both with regards to the firm’s remit and investment thesis, and to learn more about the pair’s criticism of the prevailing venture capital model they say often pushes SaaS companies to prioritize “grow at all costs.”

TechCrunch: Oxx is described as a B2B software investor investing in SaaS companies across Europe from Series A and beyond. Can you be more specific regarding the size of check you write and the types of companies, geographies, technologies and business models you are focusing on?

Richard Anton: We will lead funding rounds anywhere in the range $5-20 million in SaaS companies. Some themes we’re especially excited about include data convergence and the refining and usage of data (think applications of machine learning, for example), the future of work, financial services infrastructure, end-user empowerment and sustainable business.

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Forensic Architecture redeploys surveillance state tech to combat state-sponsored violence

The specter of constant surveillance hangs over all of us in ways we don’t even fully understand, but it is also possible to turn the tools of the watchers against them. Forensic Architecture is exhibiting several long-term projects at the Museum of Art and Design in Miami that use the omnipresence of technology as a way to expose crimes and violence by oppressive states.

Over seven years Eyal Weizman and his team have performed dozens of investigations into instances of state-sponsored violence, from drone strikes to police brutality. Often these events are minimized at all levels by the state actors involved, denied or no-commented until the media cycle moves on. But sometimes technology provides ways to prove a crime was committed and occasionally even cause the perpetrator to admit it — hoisted by their own electronic petard.

Sometimes this is actual state-deployed kit, like body cameras or public records, but it also uses private information co-opted by state authorities to track individuals, like digital metadata from messages and location services.

For instance, when Chicago police shot and killed Harith Augustus in 2018, the department released some footage of the incident, saying that it “speaks for itself.” But Forensic Architecture’s close inspection of the body cam footage and cross reference with other materials makes it obvious that the police violated numerous rules (including in the operation of the body cams) in their interaction with him, escalating the situation and ultimately killing a man who by all indications — except the official account — was attempting to comply. It also helped additional footage see the light which was either mistakenly or deliberately left out of a FOIA release.

In another situation, a trio of Turkish migrants seeking asylum in Greece were shown, by analysis of their WhatsApp messages, images, and location and time stamps, to have entered Greece and been detained by Greek authorities before being “pushed back” by unidentified masked escorts, having been afforded no legal recourse to asylum processes or the like. This is one example of several recently that appear to be private actors working in concert with the state to deprive people of their rights.

Situated testimony for survivors

I spoke with Weizman before the opening of this exhibition in Miami, where some of the latest investigations are being shown off. (Shortly after our interview he would be denied entry to the U.S. to attend the opening, with a border agent explaining that this denial was algorithmically determined; We’ll come back to this.)

The original motive for creating Forensic Architecture, he explained, was to elicit testimony from those who had experienced state violence.

“We started using this technique when in 2013 we met a drone survivor, a German woman who had survived a drone strike in Pakistan that killed several relatives of hers,” Weizman explained. “She has wanted to deliver testimony in a trial regarding the drone strike, but like many survivors her memory was affected by the trauma she has experienced. The memory of the event was scattered, it had lacunae and repetitions, as you often have with trauma. And her condition is like many who have to speak out in human rights work: The closer you get to the core of the testimony, the description of the event itself, the more it escapes you.”

The approach they took to help this woman, and later many others, jog her own memory, was something called “situated testimony.” Essentially it amounts to exposing the person to media from the experience, allowing them to “situate” themselves in that moment. This is not without its own risks.

“Of course you must have the appropriate trauma professionals present,” Weizman said. “We only bring people who are willing to participate and perform the experience of being again at the scene as it happened. Sometimes details that would not occur to someone to be important come out.”

A digital reconstruction of a drone strike’s explosion was recreated physically for another exhibition.

But it’s surprising how effective it can be, he explained. One case exposed American involvement hitherto undisclosed.

“We were researching a Cameroon special forces detention center, torture and death in custody occurred, for Amnesty International,” he explained. “We asked detainees to describe to us simply what was outside the window. How many trees, or what else they could see.” Such testimony could help place their exact location and orientation in the building and lead to more evidence, such as cameras across the street facing that room.

“And sitting in a room based on a satellite image of the area, one told us: ‘yes, there were two trees, and one was over by the fence where the American soldiers were jogging.’ We said, ‘wait, what, can you repeat that?’ They had been interviewed many times and never mentioned American soldiers,” Weizman recalled. “When we heard there were American personnel, we found Facebook posts from service personnel who were there, and were able to force the transfer of prisoners there to another prison.”

Weizman noted that the organization only goes where help is requested, and does not pursue what might be called private injustices, as opposed to public.

“We require an invitation, to be invited into this by communities that invite state violence. We’re not a forensic agency, we’re a counter-forensic agency. We only investigate crimes by state authorities.”

Using virtual reality: “Unparalleled. It’s almost tactile.”

In the latest of these investigations, being exhibited for the first time at MOAD, the team used virtual reality for the first time in their situated testimony work. While VR has proven to be somewhat less compelling than most would like on the entertainment front, it turns out to work quite well in this context.

“We worked with an Israeli whistleblower soldier regarding testimony of violence he committed against Palestinians,” Weizman said. “It has been denied by the Israeli prime minister and others, but we have been able to find Palestinian witnesses to that case, and put them in VR so we could cross reference them. we had victim and perpetrator testifying to the same crime in the same space, and their testimonies can be overlaid on each other.”

Dean Issacharoff – the soldier accused by Israel of giving false testimony – describes the moment he illegally beat a Palestinian civilian. (Caption and image courtesy of Forensic Architecture)

One thing about VR is that the sense of space is very real; If the environment is built accurately, things like sight-lines and positional audio can be extremely true to life. If someone says they saw the event occur here, but the state says it was here, and a camera this far away saw it at this angle… these incomplete accounts can be added together to form something more factual, and assembled into a virtual environment.

“That project is the first use of VR interviews we have done —  it’s still in a very experimental stage. But it didn’t involve fatalities, so the level of trauma was a bit more controlled,” Weizman explained. “We have learned that the level and precision we can arrive at in reconstructing and incident is unparalleled. It’s almost tactile; You can walk through the space, you can see every object: guns, cars, civilians. And you can populate it until the witness is satisfied that this is what they experienced. I think this is a first, definitely in forensic terms, as far as uses of VR.”

A photogrammetry-based reconstruction of the area of Hebron where the incident took place.

In video of the situated testimony, you can see witnesses describing locations more exactly than they likely or even possibly could have without the virtual reconstruction. “I stood with the men at exactly that point,” says one, gesturing towards an object he recognized, then pointing upwards: “There were soldiers on the roof of this building, where the writing is.”

Of course it is not the digital recreation itself that forces the hand of those involved, but the incontrovertible facts it exposes. No one would ever have know that the U.S. had a presence at that detainment facility, and the country had no reason to say it did. The testimony wouldn’t even have been enough, except that it put the investigators onto a line of inquiry that produced data. And in the case of the Israeli whistleblower, the situated testimony defies official accounts that the organization he represented had lied about the incident.

Avoiding “product placement” and tech incursion

Sophie Landres, MOAD’s Curator of Public Programs and Education, was eager to add that the museum is not hosting this exhibit as a way to highlight how wonderful technology is. It’s important to put the technology and its uses in context rather than try to dazzle people with its capabilities. You may find yourself playing into someone else’s agenda that way.

“For museum audiences, this might be one of their first encounters with VR deployed in this way. The companies that manufacture these technologies know that people will have their first experiences with this tech in a cultural or entertainment contrast, and they’re looking for us to put a friendly face on these technologies that have been created to enable war and surveillance capitalism,” she told me. “But we’re not interested in having our museum be a showcase for product placement without having a serious conversation about it. It’s a place where artists embrace new technologies, but also where they can turn it towards existing power structures.”

Boots on backs mean this not an advertisement for VR headsets or 3D modeling tools.

She cited a tongue-in-cheek definition of “mixed reality” referring to both digital crossover into the real world and the deliberate obfuscation of the truth at a greater scale.

“On the one hand you have mixing the digital world and the real, and on the other you have the mixed reality of the media environment, where there’s no agreement on reality and all these misinformation campaigns. What’s important about Forensic Architecture is they’re not just presenting evidence of the facts, but also the process used to arrive at these truth claims, and that’s extremely important.”

In openly presenting the means as well as the ends, Weizman and his team avoid succumbing to what he calls the “dark epistemology” of the present post-truth era.

“The arbitrary logic of the border”

As mentioned earlier, Weizman was denied entry to the U.S. for reasons unknown, but possibly related to the network of politically active people with whom he has associated for the sake of his work. Disturbingly, his wife and children were also stopped while entering the states a day before him and separated at the airport for questioning.

In a statement issued publicly afterwards, Weizman dissected the event.

In my interview the officer informed me that my authorization to travel had been revoked because the “algorithm” had identified a security threat. He said he did not know what had triggered the algorithm but suggested that it could be something I was involved in, people I am or was in contact with, places to which I had traveled… I was asked to supply the Embassy with additional information, including fifteen years of travel history, in particular where I had gone and who had paid for it. The officer said that Homeland Security’s investigators could assess my case more promptly if I supplied the names of anyone in my network whom I believed might have triggered the algorithm. I declined to provide this information.

This much we know: we are being electronically monitored for a set of connections – the network of associations, people, places, calls, and transactions – that make up our lives. Such network analysis poses many problems, some of which are well known. Working in human rights means being in contact with vulnerable communities, activists and experts, and being entrusted with sensitive information. These networks are the lifeline of any investigative work. I am alarmed that relations among our colleagues, stakeholders, and staff are being targeted by the US government as security threats.

This incident exemplifies – albeit in a far less intense manner and at a much less drastic scale – critical aspects of the “arbitrary logic of the border” that our exhibition seeks to expose. The racialized violations of the rights of migrants at the US southern border are of course much more serious and brutal than the procedural difficulties a UK national may experience, and these migrants have very limited avenues for accountability when contesting the violence of the US border.

The works being exhibited, he said, “seek to demonstrate that we can invert the forensic gaze and turn it against the actors—police, militaries, secret services, border agencies—that usually seek to monopolize information. But in employing the counter-forensic gaze one is also exposed to higher level monitoring by the very state agencies investigated.”

Forensic Architecture’s investigations are ongoing; you can keep up with them at the organization’s website. And if you’re in Miami, drop by MOAD to see some of the work firsthand.

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Mirantis co-founder launches FreedomFi to bring private LTE networks to enterprises

Boris Renski, the co-founder of Mirantis, one of the earliest and best-funded players in the OpenStack space a few years ago (which then mostly pivoted to Kubernetes and DevOps), has left his role as CMO to focus his efforts on a new startup: FreedomFi. The new company brings together open-source hardware and software to give enterprises a new way to leverage the newly opened 3.5 GHz band for private LTE and — later — 5G IoT deployments.

“There is a very broad opportunity for any enterprise building IoT solutions, which completely changes the dynamic of the whole market,” Renski told me when I asked him why he was leaving Mirantis. “This makes the whole space very interesting and fast-evolving. I felt that my background in open source and my existing understanding of the open-source landscape and the LTE space […] is an extremely compelling opportunity to dive into headfirst.”

Renski told me that a lot of the work the company is doing is still in its early stages, but the company recently hit a milestone when it used its prototype stack to send messages across its private network over a distance of around 2.7 miles.

Mirantis itself worked on bringing Magma, a Facebook-developed open-source tool for powering some of the features needed for building access networks, into production. FreedomFi is also working with the OpenAirInterface consortium, which aims to create an ecosystem for open-source software and hardware development around wireless innovation. Most, if not all, of the technology the company will develop over time will also be open source, as well.

Renski, of course, gets to leverage his existing connections in the enterprise and telco industry with this new venture, but he also told me that he plans to leverage the Mirantis playbook as he builds out the company.

“At Mirantis, our journey was that we started with basically offering end-to-end open-source cloud buildouts to a variety of enterprises back when OpenStack was essentially the only open-source cloud project out there,” he explained. “And we spent a whole bunch of time doing that, engaging with customers, getting customer revenue, learning where the bottlenecks are — and then kind of gradually evolving into more of a leveraged business model with a subscription offering around OpenStack and then MCP and now Kubernetes, Docker, etc. But the key was to be very kind of customer-centric, go get some customer wins first, give customers a services-centric offering that gets them to the result, and then figure out where the leveraged business model opportunities are.”

Currently, enterprises that want to attempt to build their own private LTE networks — and are willing to spend millions on it — have to go to the large telecom providers. Those companies, though, aren’t necessarily interested in working on these relatively small deployments (or at least “small” by the standards of a telco).

Renski and his team started the project about two months ago and for now, it remains self-funded. But the company already has five pilots lined up, including one with a company that produces large-scale events and another with a large real estate owner, and with some of the tech falling in place, Renski seems optimistic that this is a project worth focusing on. There are still some hurdles to overcome and Renski tells me the team is learning new things every day. The hardware, for example, remains hard to source and the software stack remains in flux. “We’re probably at least six months away from having solved all of the technology and business-related problems pertaining to delivering this kind of end-to-end private LTE network,” he said.

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Venmo prototypes a debit card for teenagers

Allowance is going digital. Venmo has been spotted prototyping a new feature that would allow adult users to create a debit card connected to their account for their teenage children. That could potentially let parents set spending notifications and limits while giving kids more flexibility in urgent situations than a few dollars stuffed in a pocket.

Delving into children’s banking could establish a new reason for adults to sign up for Venmo, get them saving more in Venmo debit accounts where the company can earn interest on the cash, and drive purchase frequency that racks up interchange fees for Venmo’s owner PayPal .

But Venmo is arriving late to the teen debit card market. Startups like Greenlight and Step let parents manage teen spending on dedicated debit cards. More companies like Kard and neo banking giant Revolut have announced plans to launch their own versions. And Venmo’s prototype uses very similar terminology to that of Current, a frontrunner in the children’s banking space with over 500,000 accounts that raised a $20 million Series B late last year.

The first signs of Venmo’s debit card were spotted by reverse engineering specialist Jane Manchun Wong who’s provided slews of accurate tips to TechCrunch in the past. Hidden in Venmo’s Android app is code revealing a “delegate card” feature, designed to let users create a debit card that’s connected to their account but has limited privileges.

A screenshot generated from hidden code in Venmo’s app, via Jane Manchun Wong

A set up screen Wong was able to generate from the code shows the option to “Enter your teen’s info”, because “We’ll use this to set up the debit card”. It asks parents to enter their child’s name, birthdate, and “What does your teen call you?” That’s almost identical to the “What does [your child’s name] call you?” set up screen for Current’s teen debit card.

When TechCrunch asked about the teen debit feature and when it might launch, a Venmo spokesperson gave a cagey response that implies it’s indeed internally testing the option, writing “Venmo is constantly working to identify ways to refine and enhance the user experience. We frequently test product offerings to understand the value it could have for our users, and I don’t have anything further to share right now.”

Typically, the tech company product development flow see them come up with ideas, mock them up, prototype them in their real apps as internal-only features, test them externally with small percentages of real users, and then launch them officially if feedback and data is positive throughout. It’s unclear when Venmo might launch teen debit cards, though the product could always be scrapped. It’d need to move fast to beat Revolut and Kard to market.

Current’s teen debit card

The launch would build upon the June 2018 launch of Venmo’s branded MasterCard debit card that’s monetized through interchange fees and interest on savings. It offers payment receipts with options to split charges with friends within Venmo, free withdrawls at MoneyPass ATMs, rewards, and in-app features for reseting your PIN or disabling a stolen card. Venmo also plans to launch a credit card issued by Synchrony this year.

Venmo might look to equip its teen debit card with popular features from competitors, like automatic weekly allowance deposits, notifications of all purchases, or the ability to block spending at certain merchants. It’s unclear if it will charge a fee like the $36 per year subscription for Current.

Current offers these features for parents who set up a teen debit card

Tech startups are increasingly pushing to offer a broad range of financial services where margins are high. It’s an easy way to earn cheap money at a time when unit economics are coming under scrutiny in the wake of the WeWork implosion. Investors are pinning their hopes on efficient financial services too, pouring $34 billion into fintech startups during 2019.

Venmo’s already become a popular way for younger people to split the bill for Uber rides or dinner. Bringing social banking to a teen demographic probably should have been its plan all along.

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Homie CEO resigns after allegations of sexual harassment from job applicant

Jordi Greenham, the co-founder and CEO of Mexican long-term rentals startup Homie, has resigned after a sexual harassment investigation was carried out by the company’s ethics board.

On February 14, Homie launched an investigation into allegations of sexual harassment against Greenham, according to a corporate Facebook post. The message followed reports of sexual harassment that were posted to Facebook earlier the same day. In them, a woman, who has asked to remain anonymous to protect her privacy, claimed that CEO Greenham propositioned her in a WhatsApp message around 1:30 a.m. on February 14 to spend the night with him in exchange for 3,000 pesos (about $150 USD). 

Below is a screenshot of her Facebook post, which translates to English as:

Today, Jordi Greenham Asensio, co-founder of Homie offered me money to spend the night with him. It should be noted that we do not have a personal connection and that he contacted me on LinkedIn a few months ago to offer me a job at his company, we communicated through WhatsApp to schedule the interviews and for his team to communicate with me. I carried out the process and I did not get the position and there, that is the extension of the “relationship”.

It is not correct that someone, in this case a man, thinks that it is acceptable to make these types of solicitations. It makes me angry that I delayed in saying something about this in thinking that there are no consequences for these types of actions. Attached evidence of the conversation.

The WhatsApp exchange can be translated to English here:

Homie CEO Greenham:

Hi

I would like to see you

Recipient:

Can you explain to me the random texts at strange hours?

Homie CEO Greenham:

No, there is no rational explanation.

It was irrational. But I understand that it doesn’t interest you

How much could I pay you for one night?

3,000?

The woman tells TechCrunch that she met Greenham once through a mutual friend five years ago but had no contact with him since that initial introduction until he reached out to her on LinkedIn in September 2019. She told TechCrunch she had been interested in a role at the fast-growing startup, and communicated with Greenham over WhatsApp to arrange interviews and discuss the position. Ultimately, after interviewing for the role, she says she never heard back from the company. 

TechCrunch reached out to both Greenham and Homie on February 21. Homie responded to TechCrunch’s request for comment on the 23rd with this statement:

“On the 14th of February, the Homie Board of Directors was informed of the unacceptable behavior of the CEO and took immediate action. The Board’s Ethics Committee carried out the necessary investigation and on the 16th of February, after having discussed it internally, Jordi Greenham Asensio resigned as CEO and President of the company. The fast and unwavering action of the Board reflects our commitment for the highest standard of conduct, in all levels of the organization. The opinions and comments of Jordi Greenham no longer represent that of Homie.”

Homie’s February 14 Facebook post detailed that its code of ethics deems harassment, discrimination and gender violence to be unacceptable and that those standards apply to “all levels of the organization.”

Homie, which has raised $8.2 million, is currently active in more than 100 Mexican cities. According to Crunchbase, the company employs between 100-250 people. Homie recently raised a $7 million Series A round in December 2019 led by Equity International, a fund founded by American billionaire Sam Zell. 

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Huawei’s ill-fated foldable returns with a more robust upgrade

MWC may have been canceled on account of rising coronavirus concerns, but the party still went on for Huawei (albeit to what appears to have been a mostly empty room). A year after wowing crowds with the Mate X, the company is introducing the Mate Xs.

Rather than a proper successor, the device appears to be the result of Huawei’s decision to go back to the drawing board, following Samsung’s very public problems with its own original foldable.

The design looks nearly identical to the original version of the phone — which is a pro. Honestly, the one major downside of the device (aside from a lofty price tag) is the fact that it never fully arrived, outside of what appears to be a relatively small batch offering in China.

Like Samsung, Huawei’s update focused a lot on the hinge; with increased mechanical components, the product should be more rugged than the original. Keep in mind that, while we were able to play around with the original Mate X, that was about it. Personally, I saw one at MWC and had an opportunity to try one for a few minutes during lunch, between meetings at Huawei HQ in Shenzhen.

Now that foldables have arrived, it seems Huawei is finally ready to take the leap. Of course, one ought not forget the company’s ongoing issues here in the States that will not only make it more difficult to procure here, but also blocks access to Android apps and services. That will continue to be a major issue for the company’s products, going forward.

Price, too, will continue to be an issue, at around $2,700 when it goes up for sale in certain markets next month. That extremely inflated price gets you a 6.6-inch display, 5G, a beefy 4,500 mAh battery, the latest Kirin 990 chip, 8GB of RAM and 512GB of storage. Go big and/or go home, right?

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Max Q: How to build a Starship

Max Q is a new weekly newsletter all about space. Sign up here to receive it weekly on Sundays in your inbox.

Busy week for SpaceX – across funding, space tourism, and next-gen spacecraft. There’s also a space station resupply mission coming up that it’s getting ready for, and signs (this time literally) continue to suggest that its first human spaceflight mission is imminent.

Lots of other news, too, including our own: We announced this week that NASA Administrator Jim Bridenstine is going to be our guest on stage at TC Sessions: Space coming up in June.

Farewell to a legend

Katherine Johnson, a mathematician who defied prejudice in the ’50s and ’60s to help NASA send the first men to the moon, has died at the age of 101. She was a pioneer, a role model and an instrumental part of America’s space program, and she will be dearly missed.

SpaceX plans to build Starships at a furious clip

Starship Mk1 night
SpaceX is serious about iteration – its strategy of building (and failing – and learning from its failures) fast is in full effect for its Starship development program. Elon Musk said on Twitter this week that the plan is to build them as frequently as possible with significant improvements between each successive spacecraft, with the aim of going through two or three iterations before flying an orbital mission later this year.

SpaceX seeking $250 million in new funding

The still-private SpaceX is going back to investors for more cash, likely to help it with the expensive proposition of building a bunch of Starships in rapid succession essentially by hand. It’s said to be seeking $250 million in a round that could close as early as mid-March, according to a CNBC report.

SpaceX finds an experienced partner for Crew Dragon space tourism

One side of SpaceX’s business that isn’t necessarily as obvious as its commercial cargo launch services is the space tourism angle. This week, the company announced a partnership with Space Adventures, the same firm that has arranged paid trips to the Space Station for private citizens aboard Soyuz capsules. The first of these trips, which won’t go to to the ISS but instead will fly up to a higher orbit, take a trip around Earth and come back, is set to take off as early as next year. And if you have to ask about the price, you probably can’t afford it.

New platform headed to the ISS in March

The ISS gets a new platform next month that can support attached payloads – up to a dozen – from research partners, including academic institutions and private companies. It’ll go up aboard SpaceX’s next resupply mission for the station, which is currently targeting liftoff on March 2. Also, Adidas is sending up a machine that makes its BOOST shoe soles just to see how it works in space.

Japan is going to get and return a soil sample from a Mars moon

Japan is sending a mission to Phobos and Deimos to study the two moons of Mars, using a probe that will orbit the red planet’s natural satellites loaded with sensors. It’ll also carry a small lander, that will itself deploy an even smaller rover, which will study the surface of Phobos directly. If all goes to plan, it’ll collect a sample and bring that back to Earth for further study here.

SpaceX talent is fueling the LA startup ecosystem

It turns out that SpaceX, not Snap, may be the most important young technology company for developing the Los Angeles startup ecosystem. Jon Shieber documents how SpaceX alum have gone forth and build a number of companies in the area that have gone on to raise big cash, as well as very young startups that have had a promising beginning. ExtraCrunch subscription required.

Meanwhile, in Canada

Yes, LA has a bustling space tech ecosystem. But communications satellite startup Kepler calls Canada home, and it recently made the interesting decision to build its small satellites in-house – in its own facility in downtown Toronto. Founder and CEO Mina Mitry tells me why that’s the best choice for his company. ExtraCrunch subscription required.

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Intuit confirms that it is buying Credit Karma for $7.1B in cash and stock

The week is kicking off with a major piece of M&A in the world of financial technology startups. Today Intuit — the accounting, tax filing and financial planning software giant behind QuickBooks, TurboTax and Mint, confirmed that it plans to acquire Credit Karma — the fintech startup with more than 100 million registered users, 37 million of them active monthly users, which lets people check their credit scores, shop for credit cards and loans, file taxes and more. Intuit said it would pay $7.1 billion for Credit Karma, making this Intuit’s biggest-ever acquisition to date, and one of the biggest in the category of privately-held fintech companies.

The news confirms a report from the WSJ that surfaced over the weekend noting that Intuit was finalising a deal to buy the startup for $7 billion in a cash and share offer, in the first big acquisition to be made by CEO Sasan Goodarzi since he took the role just over year ago. Intuit also announced its quarterly earnings today in which it reported revenue growth of 13% on revenues of $1.7 billion, beating analyst estimates of $1.68 billion. However, it missed analysts’ average expectations for earnings per share: it reported non-GAAP EPS of $1, while they were forecasting $1.03.

“Our mission is to power prosperity around the world with a bold goal of doubling the household savings rate for customers on our platform,” said Goodarzi, in statement. “We wake up every day trying to help consumers make ends meet. By joining forces with Credit Karma, we can create a personalized financial assistant that will help consumers find the right financial products, put more money in their pockets and provide insights and advice, enabling them to buy the home they’ve always dreamed about, pay for education and take the vacation they’ve always wanted.”

Intuit plans to keep Credit Karma — which makes more than $1 billion in revenues annually — as a standalone operation, run by CEO Kenneth Lin, who cofounded the startup with Ryan Graciano and Nichole Mustard.

“We started Credit Karma with a goal to build a trusted destination for all consumers, to make financial progress regardless of where they are in life,” said Lin, in a statement. “We saw the opportunity to enrich people’s financial lives through transparency, simplicity and certainty.”

The acquisition is an obvious fit for Intuit, where it will serve two purposes. Intuit can tap Credit Karma’s customer base and range of services — it partners with some 100 financial service providers in its marketplace — to complement those it already offers, to help upsell those users to Intuit’s premium, paid services. And Intuit can use it to grow its wider business by tapping a set of consumers — typically younger users — that Credit Karma has possibly been more successful in capturing than Intuit has.

Including this deal, Intuit has made some 31 acquisitions to date. It has a track record of acquiring startups with big potential and running with them. One of its major business units today, Mint (for personal financial planning and management), is based on a startup of the same name that it bought in 2009 (for the relatively modest sum of $170 million).

In reality, Credit Karma and Intuit have a lot in common in terms of what they do. While Intuit provides a set of services and software to professional accountants, perhaps its biggest claim to fame is that it helped build and popularise a movement in “DIY accounting” and related software: a set of easy-to-use online tools that ordinary people can use to manage their money, file their taxes and more.

Intuit currently has a market cap of over $77 billion, and while its share price was down about 3.75% in market trading today, it has over the last year (and more) seen a gradual rise in its share price — a reflection of its overall profitability, stability and dominance in its particular area of financial services. After market close, the share price was up 2.21% in the wake of the Credit Karma news.

And this is also where Credit Karma comes in. The company started out originally in 2007 providing free credit scores, later extending that to full credit reports. Eventually, it used the data and audience it had amassed as the basis for an expansion into a wider range of related services — which, like Intuit, Credit Karma built around the premise of ordinary consumers using the internet and cloud-based services to take charge of their financial lives.

Credit Karma’s launch of a financial planning tool in 2013 drew a direct comparison to Intuit’s Mint. And since then, Credit Karma has launched other products that directly rival Intuit, for example a free tool to help people file their taxes. These not only represented direct competition, but a disruptive threat, since Credit Karma’s products skewed younger and were built on a “free” premise (offering the products at no charge and instead making money off showing users and selling relevant, related products). The fact that Credit Karma partners with so many other financial services providers also means it’s sitting on a huge data trove that it leverages to build and personalise products, representing a data science angle for Intuit here, too.

The company reported crossing $500 million in revenues in 2017 (meaning it’s more than doubled revenues in the last two years), and it used that momentum to move into international services and more. (I’d add that the diversification was significant for another reason: the Equifax breach of 2017 has cast a shadow on credit scores and credit histories; and how they are used and sometimes misused.)

Credit Karma over the weekend told us that it would not comment on rumours or speculation regarding the reports, but interestingly it had long eyed plans for an IPO, talking about the idea as early as 2015, when it was valued at just $3.5 billion.

$500 million secondary round in 2018, at a $4 billion valuation, helped put off those plans for a while. Credit Karma had raised just over $645 million to date, according to PitchBook, with investors including Silver Lake, Tiger Global, Capital G, Founders Fund, Felicis and others.

More generally, while we have seen some successes in the world of fintech IPOs — for example, both Adyen in Europe and Square in the US have definitely gone up in the last five years — the availability of large amounts of private capital from VCs and private equity have helped fintech startups, even the outsized ones like Stripe, stay private for longer, holding on for more profitability, and/or possibly another kind of liquidity event to come along.

Even within the trend for wider consolidation in the world of financial technology — where a number of smaller venture-backed startups, as well as more scaled up and mature fintech businesses, are getting snapped up by bigger fish in a bid for more economies of scale — Credit Karma’s sale to Intuit stands out as one of the bigger deals in terms of price.

CrunchBase has recorded around 150 fintech M&A deals in the years it’s tracked them, with some of the largest including the acquisition of First Data by Fiserv for $22 billion; PayPal acquiring Honey for $4 billion; Fiserv also acquiring CheckFree for $4.4 billion; and PayPal acquiring IZettle for $2.2 billion (see a pattern here)?

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Shipt shoppers are the latest gig workers to organize

Inspired by the work of Instacart shoppers over the last few years, a handful of workers at Target-owned Shipt, a grocery delivery service, are beginning to organize. With the help of two key Instacart shopper-activists, Vanessa Bain and Sarah Clarke, who goes by a pseudonym, Shipt workers are now demanding better wages and the elimination of what some describe as a culture of fear.

“We want to be the first responders,” Clarke tells TechCrunch. “Whenever gig workers find out there is a pay cut or some type of issue, they’ll feel comfortable coming to us.”

In January, Shipt started testing a new pay structure where, instead of basing it on cart size, Shipt takes into account the time it takes to complete and deliver an order. Shipt implemented these changes in Kalamazoo, Mich., San Antonio and Philadelphia. As Gizmodo reported earlier this month, there was some shopper backlash.

Prior to the changes, shoppers had received a $5 flat rate and 7.5% of the total store receipt, one shopper, who asked to remain anonymous, told TechCrunch.

“We are losing money as shoppers at a ridiculous rate,” a shopper from Kalamazoo tells TechCrunch. “A very good, close friend of mine told me in the three weeks since the new structure was implemented, she has lost the equivalent of a car payment. It is a lot of money. Our best guestimation is, we’re all losing about 30% or more. I did four orders this past weekend and I lost money on every single one.”

But Shipt says its goal is to maximize the earning potential for its shoppers and to make sure they get the most value for their time spent. That’s why Shipt is testing this new pay structure in certain markets to better account for time spent shopping and delivering orders, Shipt Director of Corporate Communications and Outreach Julie Coop told TechCrunch.

“In this structure, shoppers are guaranteed to make at least the minimum in the pay range shown at the time the order is offered to them,” Coop said. “That range is based on the estimated amount of time the order will take to complete. We’ve seen pay levels remain consistent overall, and in some markets slightly higher. As always, Shipt Shoppers receive 100% of their tips on top of order pay.”

Shipt connected me with Stacy Smith, who shops for Shipt in Kalamazoo, Mich. Smith tells TechCrunch she has no issue with the new policy, saying that she’s actually seen a slight increase in her pay. While it was more attractive and economical for her to get bigger orders in the old pay model, the size of the order now doesn’t matter.

“I’m now getting a little less pay in larger-size orders and a little bit increase in the middle or smaller orders, which is the abundance of them,” Smith says. “If we’re not getting paid a little bit more for those smaller to mid-sized orders, that makes sense to me. The big picture is we used to get upset because we had these small or mid-sized orders. But now we get paid a little more for those orders.”

At this point, it’s not clear how many of Shipt’s workers are for or against this new pay structure. Still, a number of workers reached out to Clarke and Bain once the pay structure started rolling out.

“Shipt has been pretty under the radar,” Clarke said. “No one is really paying attention to them — mostly because the workers are scared to speak out.”

Willy Solis, who shops for Shipt in the Dallas area, is one of the shoppers who reached out to Clarke.

“I’ve followed Sarah and Vanessa’s work and their efforts over on Instacart, because I’m on that platform as well,” Solis tells TechCrunch. “I’ve been seeing what they’ve been able to accomplish, so when Sarah asked in our group lounge if anyone is interested in talking, I jumped at it.”

Solis says he had been thinking about organizing for some time, but there had been no catalyst for him and other workers to do something. Now, Solis is working with Clarke and Bain through their Gig Workers Collective to figure out their strategy moving forward.

“While I am afraid of being deactivated due to speaking out, I am hopeful Shipt will hear the Shipt shopper communities voice as a collective whole, rather than censoring and ignoring dissenting concerns,” he says.

There are two main Facebook groups where Shipt shoppers interact. One is Shipt Shoppers United, which one shopper from Iowa, who asked to remain anonymous, describes as being “a little more real.” The group strictly prohibits people from Shipt’s corporate team, but it’s much smaller in size. This group has just a little over 6,000 members.

The other group is the Shipt Shopper Lounge, which is administered by members from Shipt HQ. This group has more than 100,000 members. It’s in this group where Solis says Shipt has created a “cult-like environment” where the company deletes any negative comments in Facebook groups for shoppers and only lets shoppers see “feel-good stories in an attempt to keep up shopper moral.”

Solis said his comments have been deleted from the Shipt Shopper Lounge Facebook group and his local Shipt group. This culture of fear, Solis says, leaves some shoppers feeling like they have to take every order, or else they’ll be punished in some way, like getting sent low-paying orders or getting deactivated. Or, if they speak out against the company in Facebook groups, some say they fear they’ll be deactivated.

“Shopper feedback has been incredibly important to improving the experience we create for our shopper community, members and retail partners,” Coop said. “We encourage Shipt Shoppers to share their opinions and feedback about their journey with Shipt, and we offer multiple feedback channels where shoppers are encouraged to speak freely to Shipt about their shopper experience.”

But the Iowa-based shopper, for example, referred to the vibe of the group as brainwashing.

“It’s almost like it tries to brainwash you into thinking the company can’t do anything wrong,” the shopper from Iowa says. “They won’t let you post negative things about it. If you do there’s a good chance you’ll be deactivated.”

This Iowa shopper says she saw someone question the pay model Shipt is testing, only for that comment to be deleted. Shipt, however, says it only deactivates people based on things like performance issues.

“Shipt does not make deactivation decisions based on shopper feedback that may be critical of Shipt, but is respectful and falls within our guidelines of appropriate actions,” Coop said in a statement to TechCrunch. “We do have written agreements with all shoppers that outline possible causes for deactivation including consistent performance issues resulting in a poor customer experience or unlawful behavior.”

While the culture and pay practices at Shipt are concerning to Solis, he says what really gets at him is the amount of control he says Shipt tries to exert over him.

“I wake up in the middle of the night scared that I forgot an order and will get deactivated,” he said, “That’s the type of fear they instill into you. I like being an independent contractor but I am not an independent contractor with Shipt in any sense of the word. The exercise of control and them telling me how to do my work and deliveries — it is control.”

Shipt, for example, requires shoppers to take certain training classes, such as Late Delivery refresher, which is sent to shoppers who have been late 10% of the time on their last 50 orders. If shoppers don’t get a perfect score, they risk being disabled from the platform. Here’s what the course, which Shipt has designed to take about 15 to 20 minutes, looks like.

 

Smith, on the other hand, says she feels like she can truly be independent on Shipt. Smith pointed to how she can make her own schedule determine which orders she wants to take.

“I know people look into things quite a bit and come up with theories,” Smith says. “But at the end of the day, there’s no way to say Shipt is trying to control this, that and the other. I’ve never felt controlled by them at all.”

Shipt is the latest company in the gig economy to find itself at odds with its workers. Last year marked a turning point among gig workers who deliver for Instacart and DoorDash, as well as people who drive for Uber and Lyft. Between the passage of gig worker protections bill AB 5 and workers at Spin unionizing, gone are the days where workers for these big tech companies can be silenced.

“We do have some headwinds in organizing,” Solis says. “The company is active in our groups. We have a lot of resistance from that standpoint so we need different strategies to let people know they can be anonymous and speak out and be heard.”

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