Inkitt, a ‘reader powered’ book publisher, raises $3.9M to discover the next best-selling author

Inkitt, which bills itself as “the world’s first reader-powered book publisher,” has raised $3.9 million in pre-series A funding, in a round led by Redalpine, with Frontline Ventures, Speedinvest and a number of private investors also participating. The Berlin-based startup is part writing and reading community, and part publishing house, with one aspect feeding the other.

Let me explain.

The Inkitt online community consists of a forum to post writing work in-progress and get feedback, and to solicit support for things like editing and plot development. However, a major focus — and key to the startup’s unique publishing model — is the beta readers section.

Here Inkitt members are encouraged to post full manuscripts to be read by the app’s over a million readers. This is a way to get reader reviews and further feedback, but can also lead to a publishing deal with Inkitt itself if the reader engagement data the company collects points to a potential best-seller.

“We analyse reader behaviour, analyse their engagement,” Inkitt founder Ali Albazaz tells me. “If they start reading and stay up all night to continue reading, if they use every break during the day to continue reading your story, we look at this reader behaviour in order to see if a book is good or not good”.

In addition, since Inkitt employs Facebook log in, the startup has demographic data on its readers and this, says Albazaz, puts it in a position to be able to make decisions very objectively. “If we see that the metrics are great, we offer the author a publishing deal,” he says, which covers ebooks, print, audio books, movie rights, and merchandise rights.

To date, the company has published 24 books, of which 22 have become Amazon best sellers. “We are basically a full publishing house but without acquisition editors,” says Albazaz. “Inkitt is about author equality not about what you have done before or the network you have. Three years later we are proving that our approach works. We are able to predict best sellers with incredible accuracy”.

Meanwhile, Albazaz regards Inkitt’s most direct competitor as Chuangshi by Tencent, a large fiction site in China. “It is our main global competition, but also our main proof point for a successful data-driven fiction publisher. Tencent’s service focuses exclusively on China,” he says.

Otherwise, the Inkitt founder reckons that, with the exception of Amazon, few publishing houses work extensively with data science or use online to its full potential. Instead they still rely on gut-level decision-making by literary agents who in turn pitch a publisher where an editor ultimately decides whether or not a work is sellable.

Photo marketplace Picfair raises £1.5M, aims to ‘weaponise’ photographers

Picfair, the London-based photo marketplace founded by ex-journalist Benji Lanyado, has raised £1.5 million in new funding — capital it plans to use to market its “fair trade photography” proposition to the plethora of companies that need authentic photo content.

These include publishers, creative agencies, and, with the huge rise in so-called content marketing, SMEs and corporates. However, rather than spend a ton of money on paid-for online marketing, Lanyado says the plan is to “weaponise” the marketplace’s 25,000 or so photographers, who, he believes, are best placed to spread awareness of Picfair and are already doing so.

Specifically, he says many of Picfair’s photographers — who range from smartphone photographers to professionals, as anyone can upload their work to the platform — already share their Picfair-hosted photo listings on social media or embed a link to the marketplace on their own portfolio sites, in a bid to point buyers away from industry behemoths, such as Getty and Shutterstock, and to Picfair. That’s because Picfair lets photographers set their own prices and takes a much smaller 20 per cent cut on each photo sold.

Now the startup wants to add a further incentive in the form of affiliate revenue, thus giving photographers an additional 10 per cent on every photo they sell direct. It is also developing tools to make embedding a Picfair buy button and other promotional materials much easier.

“Picfair’s growth among photographers has been almost exclusively organic, all through word of mouth” Lanyado tells me. “We’re the only place a photographer can set their own license prices, anywhere. That’s crazy but it’s true. Instead, the huge [photo] agencies have institutionalised their control of the industry by imposing themselves as brokers, setting the fees, and then — brace yourself — taking 80 per cent of the royalties. Picfair reverses this, giving 80 percent to the photographer. We only make money if they make a lot more”.

He says that photographers talk, and that the control and fairness that Picfair offers means they tell their friends, some of whom are on the demand side of the image licensing equation. “Ceatives across publishing, the agency world, and the ever-expanding tier of corporates who license images (this is pretty much any company – website collateral, social media, content marketing; everyone’s a publisher these days),” he says.

“So during Picfair’s next phase, we want to supercharge this. We’ve started gradually rolling out out incentives for photographers who refer customers to us – splitting our 20 per cent commission with them for a year on every customer they refer. And then we want to tool them up – with online resource suites, marketing material, offline assets”.

Meanwhile, the sell to photo buyers is that Picfair images are more authentic and unique, often avoiding the stale look of traditional stock photography. Despite living through the biggest proliferation of images in history, with the average image quality of non-professional imagery improving exponentially, “the supply of images to the industry is 99 per cent professional,” Lanyado says.

Picfair’s solution is to open the doors to everyone, while its “ever-improving curation technology” does the heavy-lifting of sorting through the resulting uploaded images for quality, agnostic of whether they are taken by an award-winning professional or a complete amateur.

The startup’s new round of funding was led by the Claverley Group, owners of Express & Star regional U.K. newspaper. Picfair is also angel-backed by the likes of Alexis Ohanian, Tom Hulme, Duncan and Max Jennings (the VoucherCodes brothers), Richard Fearn, John Fingleton (former CE of the OFT and Treasury advisor), Jeremy Palmer (Quantum Black CEO), Chris Sheldrick (CEO of What3Words), Anthony Eskinazi (CEO of Just Park), Julian Worth, Force Over Mass, and D5 Capital.

Joe Sugg: 8 things to know about one of YouTube’s biggest stars
Joe Sugg
Image caption Joe Sugg has just released his third graphic novel of a trilogy

Joe Sugg may be one of YouTube’s biggest stars (and the brother of another – Zoella), but he still doesn’t see himself as a celebrity.

“You could probably ask any YouTuber in the UK if they’d class themselves as a celebrity, and I guarantee they’d all say no,” he tells BBC News.

“And I think that’s because we never knew it would get this big, we never knew it would become this scale, at all.

“If you’ve got someone who wants to be a singer and actor, they already know the pros and cons of that job, whereas we never knew we were getting into something this big, so it’s been harder for us to sort of deal with and go along with it.”

While he may be slightly embarrassed to admit it, Joe is one of countless YouTubers who have reached the big leagues of fame.

Image caption Joe’s sister Zoe (Zoella) has appeared on a celebrity edition of Bake Off

Earlier this year, he, Zoella and her boyfriend Alfie Deyes had to leave the launch of a pop-up shop in Covent Garden because the sheer number of fans that had turned up caused security concerns.

Joe’s own YouTube channel has more than eight million subscribers, who watch the 26-year-old do impressions, pranks and dares. His most popular video to date sees Zoella applying his make-up.

Today, Joe is speaking to the BBC at Forbidden Planet in London as he launches his new book Username: Uprising – the third in a trilogy of graphic novels (the first became the fastest-selling ever for a debut writer in the genre).

He talked to us about writing, vlogging, roof-thatching, and trying to perfect his Donald Trump impression.

1. Joe hasn’t written the book on his own

There was a bit of a palaver when Zoella released her debut novel Girl Online under her own name in 2014, only for it to emerge later that she had co-authored it with a ghostwriter.

Joe is avoiding any such issues by being open about the fact that he works with a team on his series of graphic novels, including a colourist and illustrator.

“I would’ve liked to have drawn it myself obviously, but time wise, because I’ve got so many projects going on, three channels to run, I knew it would be impossible, but the great thing with a graphic novel is that it’s a collaborative process,” he says.

Media playback is unsupported on your device
Media captionJoe Sugg: Graphic novel provides ‘escapism’

“We’re all in contact, they’d send me over a few pages at a time and I’d go through and be like ‘This is great, but can we change this slightly, or change the expression on this face’, and it’s been great going back and forth and getting a feel of it being a team effort.”

2. He thinks it’s sensible for YouTubers to branch out of YouTube

“I think a lot of YouTubers will go into different avenues because I think that’s the smart thing to do – you can’t just rely on the one thing,” he says.

“We don’t know what’s going to happen to social media, it could be all shut down one day – not that it will I hope, but you never know.

“So I think it’s important to try out different things. So if you’ve ever had an interest or a hobby, like me with the graphic novels, explore that, see what you can do with it.”

3. He’s got his sister to thank for getting into vlogging

“Zoe started off as a blogger, didn’t want to be on camera – and that eventually turned into vlogging. I was aware of what she was doing at the time, but I was still working five days a week as a roof thatcher,” Joe explains.

“So she was starting to get bigger on YouTube and she showed me a lot of the male YouTubers, like Alfie [Deyes], Marcus [Butler], Jim [Chapman], and I’d watch them and think ‘This is the sort of stuff I can do, and have been doing throughout my childhood’.

Image caption Zoe was named best British vlogger at BBC Radio 1’s Teen Awards in 2014

“I appeared in one of Zoe’s videos, that was my entrance to YouTube, and the majority of the comments were saying ‘Joe should start his own channel’, and that for me was like, okay yeah, if they want it, I’ll do it.”

4. He has no plans to release an autobiography

YouTubers have been cranking out books almost as quickly as videos in recent years, many of them autobiographies – but Joe doesn’t have any plans to join them just yet.

“I would love to release a memoir at a later date. I don’t think it’s right for me yet,” he says.

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Media captionJoe Sugg: An autobiography ‘not right for me yet’

“Although I’m 26 now, I just feel like I want to make the book thicker. But I can understand why a lot of YouTubers have done that – because we don’t have ordinary lives.”

He jokes: “I’ve got lots of fun stories to tell but I think I’ll wait it out, wait until I can grow facial hair, so could be quite a while off yet!”

5. He misses working as a roof thatcher

Joe’s YouTube channel – Thatcher Joe – isn’t a tribute to our former prime minister, but rather a reference to his pre-vlogging days as a roof thatcher.

“It was very much an arty job, making the ornate ridges, the patterns, I did genuinely love the job,” he says.

“It was such an important part of what I do now.

“There are a lot of YouTubers who have always thought ‘I want to be a YouTuber’, and they’ve gone into it and gotten carried away with that side of it, whereas because I’ve worked and know what it’s like to do a normal job…

“I don’t know what it is, but it kind of helps you keep it real, and know how good you’ve got it.”

6. Joe’s musical talents are no threat to Ed Sheeran

“A lot of my audience wanted me to sing, and I was like, why not give it a go – because you never know.

“But nobody heard it,” he laughs.

“Which is great; it’s been done and dusted, had a go, decided it’s not for me, moved on to the next thing.”

Image copyrightGetty Images

7. His impressions are both the most popular and most unpopular videos he does

One of Joe’s most popular series of videos is his impressions – usually of fictional characters from shows like Family Guy and Sesame Street.

“I like to think of ideas which can become a series,” he says.

“I think it’s really important to create structures and formats within my videos; things I can to return to later on.

“It’s almost like a safety net of having a string of ideas which have more longevity than just a one-off.”

But impressions are also some of the most difficult to get right, with Joe describing them as “my most criticised videos”.

“There’s always one saying ‘Oh that was a bit dodgy’. I never really get that much criticism on my videos, but on the impressions videos, you do get a lot of people that are like ‘That wasn’t as great as it could be’, because it’s something where they can compare it to something else.”

8. But there’s one impression he still hasn’t been able to perfect

“I really wanted to learn how to do Donald Trump properly, purely because of that space of time [when he was elected],” Joe says.

Image copyrightAFP

“I thought, there’s so much comedy you can get out of that, mastering people who are in the ‘now’, whoever’s got big exposure in the media at the moment, to learn them, but it takes time.

“By the time I’ve mastered them it’s like ‘Great, they’re irrelevant now’, so by the time I’ve mastered Donald Trump he won’t even be president anymore.”

Username: Uprising by Joe Sugg is out now

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Backed by Accel, GlowRoad helps Indian women build home businesses

GlowRoad’s team with founder Dr. Sonal Verma (center in green shirt)

Indian e-commerce company GlowRoad is built on a simple premise. By connecting manufacturers with resellers and using drop shipping, it keeps everyone’s overhead costs low. The Bangalore-based startup, however, doesn’t just aspire to be an online reseller network. Founded by a former physician, GlowRoad’s goal is to give housewives and stay-at-home mothers a low-risk way to start their own retail businesses from home.

GlowRoad, which secured $2 million in Series A funding from Accel Partners earlier this month, currently claims 100,000 registered users, 36,000 of whom are active resellers. Most selling takes place in WhatsApp groups or in-person and GlowRoad claims that its resellers complete about a total of 1,000 transactions every day.

While some resellers do keep physical inventory in their homes, most products are shipped directly from manufacturers to buyers. The company’s business model is designed to benefit resellers by letting them build an online store without managing stock and suppliers who have a ready-made distribution network.

“The idea is that women should be able to earn from home, without putting in any money and it should be a secure system, but if you look at it from a business person’s point of view, what it becomes is a very strong sales network,” says founder Sonal Verma, who acqui-hired the team behind LocalQueen, a reseller network, two months ago to build GlowRoad. “So if you launch something and want to launch it in all the cities in India, you can do so very rapidly and very cost-effectively through this channel.”

While working as a physician, Verma focused on community medicine before co-founding a telemedicine startup called Going from medicine to e-commerce might seem like an odd path, but Verma says she was inspired by the women she treated.

“I wanted to work in a venture that empowers women and I saw a lot of reselling happening in my neighborhoods, so that put the idea in my head,” she says.

India’s e-commerce market is expected to be worth $220 billion by 2025 and, according to a report by Zinnov, one of the main beneficiaries will be women running businesses from home.

The consulting firm says about two million women have already made $9 billion in gross sales by reselling clothing and lifestyle products online, and that the number of “housewife resellers” is expected to increase to 21 million to 23 million by 2022.

GlowRoad’s suppliers offer goods at wholesale prices and resellers decide what margin to charge on top of that. While sellers have an online storefront on GlowRoad, they usually market their products through WhatsApp and Facebook groups or in their residential communities. GlowRoad monetizes by charging its suppliers 500 rupees a month (about $7.70), while resellers pay to unlock premium features.

GlowRoad’s biggest category is fashion, with Indian ethnic wear moving the most products, says Verma. Cosmetics and jewelry are also popular.

“WhatsApp has changed a lot of things for everyone,” says Verma. “Most ladies have fairly large WhatsApp groups and are members of multiple ladies groups on WhatsApp or Facebook. When they become serious resellers, they start doing it by sending more messages, saying that I’m in this kind of business, and then they start to make their own groups for their business.”

As each reseller’s business grows, GlowRoad teaches them how to run Facebook ads and optimize search results for their GlowRoad online stores. Since most GlowRoad resellers use drop shipping, it only takes them a few minutes to fill their online stores with listings.

Relying on drop shipping, however, comes with several risks. For example, not seeing a product before it reaches customers means resellers have very little control over quality. GlowRoad mitigates this by sending members of its team to vet manufacturers before adding them to the site and then using a review system that rewards top suppliers by setting them up with the site’s newest resellers.

Verma says some of GlowRoad’s Series A funding will be used to ensure that its quality assurance system can scale up. The company also plans to hire more people to build its digital marketing team and tech platform.

“Improving supply side is what we are working on the most at the moment, but we’ll ensure they have the best quality products,” says Verma.

Jared Kushner used private email for White House business
Jared Kushner, right, is seen over the shoulder of President Donald Trump - both seated at a table during an official meetingImage copyrightGetty Images

Donald Trump’s son-in-law Jared Kushner used a private email account to carry out official White House business, his lawyer said.

Mr Kushner is a senior presidential adviser and is married to Ivanka Trump.

His lawyer confirmed the existence of the personal email account in a statement on Sunday.

During his campaign, Mr Trump repeatedly criticised rival Hillary Clinton for using a personal email account while secretary of state.

The president frequently encouraged crowds at rallies to chant “lock her up”, and vowed to imprison Mrs Clinton over concerns she may have mishandled classified information. An investigation into the matter was closed without charges.

Dozens of emails were exchanged between Mr Kushner and other White House officials on topics including media coverage and event planning, according to Politico, which first published the story.

There is no indication that Mr Kushner shared classified or privileged information through his private email account.

“Mr Kushner uses his White House email address to conduct White House business,” his lawyer, Abbe Lowell, said in a statement.

“Fewer than a hundred emails from January through August were either sent to or returned by Mr. Kushner to colleagues in the White House from his personal email account.”

“These usually forwarded news articles or political commentary and most often occurred when someone initiated the exchange by sending an email to his personal, rather than his White House, address.”

Federal regulations specify how records related to the president and other government activities should be maintained.

The use of private accounts can put official records beyond the reach of journalists, lawmakers, and others who seek publicly-available information.

Scottish Power says UK will need to boost capacity
Electricity pylon

Britain will need to boost its generation of electricity by about a quarter, Scottish Power has estimated.

The energy firm said electric cars and a shift to electric heating could send demand for power soaring.

Its chief executive also said there would have to be a major investment in the wiring necessary to handle rapid charging of car batteries.

Keith Anderson was speaking as the firm reached the milestone of 2,000 megawatts of wind power capacity.

That equates to about an eighth of the British total.

The figure includes Whitelee wind farm, on Eaglesham Moor, south of Glasgow, which has more than 200 turbines.

Believed to be Europe’s biggest wind farm, it is capable of generating enough power for all of Glasgow’s homes.

Image copyrightThinkstock
Image caption Whitelee is believed to be Europe’s biggest wind farm

In the past 18 months, the Spanish-owned company has been installing nearly a quarter of the British total, but the pipeline of work is coming to an end. Attention is turning to offshore wind.

But Mr Anderson told BBC Scotland there would have to be a renewed surge in the building of onshore wind turbines if consumer demand was to be met.

He warned that past experience with technology change had shown consumers could make the move faster than governments or companies expect.

Once the price of electric cars falls to that of petrol or diesel, which it is thought will happen between 2022 and 2025, there could be a rapid shift in buying patterns and electricity usage.

Earlier this month, First Minister Nicola Sturgeon announced a target of shifting from petrol and diesel-fuelled cars to battery power by 2032, while the UK government intends to make that shift by 2040.

‘Worst position’

Mr Anderson said: “The worst position for this country to be in and the worst position for customers is that we get huge enthusiasm, people rushing out to buy electric cars because the price has come down, and then we can’t allow people to plug them in because we haven’t invested in the infrastructure.

“So one of the things we’re looking at now is how we plan what has to happen to the distribution system.”

The estimate of a 20%-30% increase in demand for electricity comes after years of gradually declining power use, much of that due to growing energy efficiency and the closure of older, energy-intensive industries.

Image copyrightGetty Images

At the same time, old power stations – including Scottish Power’s coal-burning plants at Longannet in Fife and Cockenzie in East Lothian – have been closed down.

The added challenge of cars is the change in technology from an eight-hour overnight charge to a rapid charge of 15 to 20 minutes.

If several car owners on a residential street plug those in at the same time, the system could not cope.

Mr Anderson said: “The system that takes the wires into the house, down the street, to local businesses – how do we make sure it can cope with that level of demand? It’ll take a long time to plan and deliver.”

‘Let’s keep going’

Heating is the next frontier in the energy revolution, which has barely begun. In place of gas and oil-fired boilers in each home, electric central heating can be powered by renewable generation.

However, it is likely to require not only removal of a boiler, but the replacement of radiators and hot water heating pipes throughout a home.

Mr Anderson said: “What we’re saying to the politicians, regulators and customers is: let’s keep going – this [wind power] has been a huge success.

“We have been able to develop these projects faster and faster, and to deliver them more efficiently, at much lower cost.

“Keep going, because that will bring costs down and make us more efficient for the future.

“If you stop now, the technology development stops, the innovation stops: the new jobs, the new roles, they all stop. You stop that for two or three years, and trying to restart it becomes more difficult and more expensive.”

Most of the recent onshore wind developments have been in Scotland, focused on the south west.

The UK government has allowed much less onshore wind developing, in response to anti-turbine campaigners.

It has also left onshore wind out of the auctions which offer generators a minimum price for their energy.

These auctions have helped drive down the cost of renewable power, with offshore wind nearly halving in price.

TechCrunch’s Startup Battlefield Australia joined by leading Aussie names

As you’ve probably gathered TechCrunch is headed to Australia to find the most disruptive early-stage startups, in partnership with ELEVACAO. As we like to say these days, ‘all roads lead to Disrupt’ and our focus now is to reach out internationally to find the best startups for our Disrupt stages, from all around the world.

TechCrunch’s Startup Battlefield Australia is our first ever, and it’s particularly sweet for me to be able to leave London and come ‘down under’. It’s a little-known fact that I have dual nationality, being both born in the UK but also holding an Australian passport. But more of that in a moment.

Australia is increasingly known as a tech startup hub in the last few years, witnessing MYOB’s $833m IPO (Australia’s largest-ever tech IPO), Atlassian’s US-based IPO at $1.1 billion, a $250 million equity growth round for Australia’s Campaign Monitor and a $150 million round for New Zealand’s Xero. High-growth startups are inspiring a healthy crop of early-stage startups in the region.

TechCrunch’s Startup Battlefield Australia will also see a number of great people joining us on stage including the following:

Mike Cannon-Brooks, Co-ceo and co-founder, Atlassian

Catriona Wallace, founder at Flamingo

James Cameron, partner at Airtree Ventures

TechCrunch’s Startup Battlefield has been bringing world-class founders into the spotlight since 2007, and in the past decade almost 700 contestants have gone on to raise nearly $7 billion in funding and rack up nearly 100 exits.

Our community of Battlefield Alumni include companies like Mint, Dropbox, Yammer, TripIt, Getaround and Cloudflare. We are excited to showcase a diverse group for Australia’s first ever TC Battlefield.

The winner of TechCrunch Battlefield Australia will be the recipient of a $25,000 equity-free cash prize and an all-expense-paid trip (for two) to exhibit at TechCrunch’s flagship global competition, Disrupt Battlefield SF 2018 and compete in the Startup Battlefield, assuming the company still qualifies for that competition. The entire event will be live-streamed (and later available on demand) and carried on, YouTube, Facebook and Twitter.

To bring Battlefield to Australia, TechCrunch is partnering with the ELEVACAO Foundation, whose mission to empower women tech entrepreneurs globally aligns with TechCrunch’s Include program to encourage more diversity in tech.

As for my history with Australia, the short story is that my family moved over for my father’s job as a malaria scientist, working on programmes which were run in Newcastle and Canberra. In the process, I even ended up going to the ANU. During that time I did two main things (apart from my degree in literature). The first was get the bug for journalism by co-founding a student newspaper. The second was playing drums on the growing thrash/grunge/rock scene (hey, it was the late 80s). This led me to meet and play in the legendary (well, in my mind) ANU student band “The Pleasureheads.” With Tim leading on song-writing, and his scorching Telecaster, backed up by Adrian on bass and me on drums, we supported many headliner acts passing through Canberra.

The Pleasureheads: Adrian, Tim, and Mike

But rock bands are rarely forever, and eventually, Tim moved back to Sydney and formed another band, while I moved back to London to became a journalist. Tim’s band became You Am I, one of the most successful bands ever to come out of Australia. I’ve since had the pleasure of seeing the now-famous Tim Rogers and his band tour the UK, and I’m relishing the idea of catching some always-fantastic Aussie music while I’m there.

Report: Jared Kushner used a private email server for White House work

President Donald J. Trump’s son-in-law and official White House adviser, Jared Kushner, used a private email server — set up after the election — to conduct White House business, according to a new report in Politico.

Kushner used the private account in tandem with his official White House email account to correspond with current and former senior White House officials, outside advisers and others, about subjects ranging from media coverage to event planning.

Politico said it has verified at least two dozen emails coming from the private account.

A lawyer for Kushner, Abbe Lowell, who was recently added to Kushner’s legal team, issued the following statement in response to the Politico report. We’ve reached out to Lowell’s office for comment.

“Mr. Kushner uses his White House email address to conduct White House business. Fewer than 100 emails from January through August were either sent to or returned by Mr. Kushner to colleagues in the White House from his personal email account. These usually forwarded news articles or political commentary and most often occurred when someone initiated the exchange by sending an email to his personal rather than his White House address.”

Current and former aides who sent emails to Kushner on his private account since the President took office include former chief of staff Reince Priebus, former chief strategist Steve Bannon, top economic adviser Gary Cohn, and spokesman Josh Raffel, according to the Politico report.

The decision to use private accounts in office is at odds with the repeated criticism that Donald Trump and his surrogates heaped upon his opponent, Democratic nominee Hilary Clinton, during the Presidential campaign.

Clinton’s use of a private email server during her tenure as Secretary of State was one of the central criticisms Trump used in his run for office — and was, in fact, the subject of an FBI investigation. 

The use of private email is common among members of the Trump administration, Politico reported. And members of the President’s staff have used encrypted messaging services like Signal and Confide, which delete messages after they are read, prompting a rebuke by the then-Press Secretary Sean Spicer that messaging using those services likely violated the Presidential Records Act.

Whether the use of the private server for emails is illegal or not, the correspondence will likely be of interest to the ongoing investigations into the last election.

Featured Image: Andrew Harrer/Bloomberg via Getty Images/Getty Images

SAP is buying identity management firm Gigya for $350M

SAP, the German enterprise software giant, today announced an acquisition to strengthen its hybris e-commerce division. It has acquired Gigya, a firm that helps online properties manage customer identities and profiles. Terms of the deal have not been disclosed officially, but our sources tell us it is for $350 million.

This was the same figure that was reported yesterday when the news leaked out as a rumor in the Israeli press (Gigya is based out of Mountain View, CA, but its R&D is based in Israel, and its founders are Israeli). Analytics firm Zirra also told TechCrunch that the company was valued at around $250 million in its last valuation, back when it raised $35 million led by Intel Capital in 2014.

Gigya today manages some 1.3 billion customer identities across hundreds of sites, existing business that it will bring under SAP’s umbrella. The idea will be to integrate those features into SAP’s wider e-commerce operation to expand the kinds of services it offers to existing customers, and to help sell more e-commerce services to Gigya’s base.

“Gigya brings a wealth of skills and expertise that will significantly enhance the SAP Hybris Profile solution and allow us to take leadership of the emerging customer identity and access management market,” said Carsten Thoma, president and cofounder of SAP Hybris, in a statement. “Consumer trust is the main currency to succeed for customer-driven organizations. This is what Gigya is known and recognized for.”

Gigya originally had its start as a “social” log-in platform in which it helped online properties manage customer profiles as linked with their profiles on sites like Facebook. But a few years ago, the company started to widen out its view of the purpose of identity management and how it can be used for a wider set of customer management features for e-commerce and other sites.

“We actually think that there’s quite a bit of a transformation happening,” Patrick Salyer told TechCrunch in 2014. “We’re coming from this phase where third-party identities were about social logins, but we’re seeing that the very definition of identity is changing … to include payment, security, even leveraging hardware. In this new world, who are the players that matter? In addition to Facebook, it’s Amazon, it’s PayPal.”

That pivot was a smart move: online security is an issue that has blown up because of a number of high-profile breaches, the trend of moving more services to the cloud, and the growing sophistication of malicious hackers.

Gigya itself has not been immune to some of those issues: the company’s platform was used as a backdoor by the Syrian Electronic Army back in 2014 to hack websites (the vulnerability was subsequently repaired).

With the rush of breaches, we’ve seen a focus on better and more water-tight identity management. E-commerce companies — working as they do in transactions and consumer trust — stand to lose the most of all verticals online.

Combined with that, they are simply trying to create better and more intelligent identity management systems to make their user experiences more user-friendly.

Another significant detail in Gigya’s current offering is that its product — which it sells as “registration-as-a-service” — offers localization features, which is important in e-commerce as different regions have specific compliance requirements and regulations, both in terms of where data is housed and in areas of data protection.

“Combining the data matching and enrichment capabilities of SAP Hybris Profile with Gigya’s consent-based identity data and access management platform will allow us to identify consumers across channels and offer a robust single consumer profile,” said Salyer in a statement.

“This is a vital step for digitalizing businesses because companies need to be able to draw accurate conclusions seamlessly across all channels, including web, mobile, in-store or connected devices, and the Internet of Things, as well as collect data about consumer preferences. Together we are well positioned to drive more effective marketing, sales and service through data, while the customer stays in control of how much data is shared.”

Gigya has 300 employees, all of whom will be coming over in the deal, which is expected to close in the fourth quarter of 2017.

Featured Image: Blue Island/Shutterstock

The cambrian moment in our innovation economy
Andrew KeenContributor

Andrew Keen is the author of three books: Cult of the Amateur, Digital Vertigo and The Internet Is Not The Answer. He produces Futurecast, and is the host of Keen On.

According to Re-Imagine group chairman and serial tech entrepreneur Peter Hirshberg, we are at a decisive moment in our innovation economy.  Silicon Valley – or, at least, the “ethos of Silicon Valley” – is spreading all over America, Hirshberg insists. And Silicon Valley is reinventing what he calls “secondary” places like Youngstown, Ohio or Louisville, Kentucky to transform them into what he calls “maker cities.”

Hirshberg, who coauthored a book last year entitled Maker City with the CEO of the Maker Media Dale Dougherty and the former Sun and Apple executive Marcia Kadanoff, believes that we are what he calls a “Cambrian moment” in the evolution of cities in today’s digital economy. The shift, he says, is from the “smart city” characterized by connected devices to the “maker city” shaped by connected citizens empowered with disruptive technologies like Plethora  the so-called “factory at your fingertips”.

The city, he therefore says, has become the most potent instrument for social and economic change in America today. And so the really interesting “conversation”, Hirshberg argues, is now taking place at the local level in places like Louisville and Youngstown.

The trigger for the Maker Cities movement, Hirshberg says, came in June 2014 at President Obama’s first National Maker’s Faire – a week long event designed to celebrate local innovation all over America. At the Obama event in Washington DC, Hirshberg signed up 100 cities as founding members of the movement including Detroit and Pittsburgh.

Early this year, in association with US News & World Report, Maker Cities launched an initiative to rank Maker Cities according to their ability to generate jobs and urban regeneration. The value of Hirshberg’s Maker City movement is to avoid “the Valley versus the rest-of-America” zero-sum thinking suggesting that new innovation hubs like Detroit or Youngstown have to compete against Silicon Valley. In Hirshberg’s maker city world, everywhere can simultaneously be Silicon Valley. So we can all win.

Many thanks to the folks at the Greater Providence Chamber of Commerce for their help in the production of this interview.

Featured Image: Joi Ito/Flickr UNDER A CC BY 2.0 LICENSE