Technology

The Startup Alley from this week’s TechCrunch Disrupt San Francisco

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At TechCrunch Disrupt San Francisco we always have a huge and varied array of companies presenting.

Here’s a taster of the Startup Alley from this year, featuring companies from many of the pavilions at the event. Enjoy!

Health and BioTech Pavillion

Korea Pavillion

Germany Pavilion

Hardware Pavillion

IOT Pavilion

UK and Brussels Pavilion

AR/VR Pavillion

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The new electronic police state

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Matthew FeeneyContributor

Matthew Feeney is a policy analyst at the Cato Institute.

According to the government, your privacy protections evaporate the moment you set foot in an airport.

Although the Fourth Amendment protects us and our “effects” from “unreasonable searches and seizures,” Customs and Border Protection agents can take advantage of an exception to this constitutional protection and search our electronic devices at airports without first establishing reasonable suspicion or securing a warrant.

It’s a problem that’s only getting worse. Last week the American Civil Liberties Union and the Electronic Frontier Foundation entered into a suit on behalf of eleven travelers against the Department of Homeland Security. The plaintiffs claim that warrantless and suspicionless border electronic device searches violate the First and Fourth Amendments.

They’re absolutely right. CBP agents are gaining access to massive troves of personal information related to law-abiding Americans. This exception is an affront to everyone’s privacy and must be revoked.

For example, earlier this year Sidd Bikkannavar, an engineer at NASA’s Jet Propulsion Laboratory, was subject to a secondary airport inspection at the airport in Houston, and was asked by a customs and border patrol agent for the passcode to a phone he was carrying.

The phone belonged to NASA, and although Bikkannayar explained as much, the agent continued asking for the code. Fearing that CBP would seize the phone and that he would miss his connecting flight to Los Angeles, Bikkannavar relented and provided it.

After around 30 minutes the agent returned with the phone, telling Bikkannavar the phone had been analyzed with “algorithms” and that no “derogatory” information had been found.

this is from an IRL friend of mine. this is NOT my america. EVER. #MuslimBan Siid is a US Citizen. @CustomsBorder u say “Welcome Home” #NASApic.twitter.com/W4UtF88rJy

— Nick Adkins (@nickisnpdx) February 6, 2017

The idea that the border or airport is a region of reduced privacy expectations is not new. As Justice Rehnquist noted in the 1977 case United States v. Ramsey, the same Congress that proposed the Bill of Rights passed the United States’ first customs statute, giving officials the authority to search “any ship or vessel, in which they shall have reason to suspect any goods, wares or merchandise subject to duty shall be concealed.”

It was also in Ramsey that Rehnquist declared, “That searches made at the border, pursuant to the longstanding right of the sovereign to protect itself by stopping and examining persons and property crossing into this country, are reasonable simply by virtue of the fact that they occur at the border should, by now, require no extended demonstration.”

Yet today, unlike 1977 or 1789, more than three quarters of American adults own smartphones. These devices contain vast amounts of data related to our personal and professional lives. CBP policy does not allow agents to access information housed on remote servers, but even a search of information resident on an electronic device can uncover videos, texts, photos and reveal what apps someone has downloaded.

These apps can expose dating habits as well as religious affiliations. Thanks to current policy, any traveler could be coerced into allowing CBP to access this private information without any suspicion that they have violated immigration law.

CBP searches of electronic devices are relatively rare, but the number of such searches has been increasing over the last few years. These searches do not always target travelers from terrorist hotspots, either. Bikkannayar is an American citizen and member of the Border Protection Global Entry program, which is designed for what CBP describes as “pre-approved, low-risk travelers.”

Earlier this year then-DHS Secretary John Kelly discussed, among other things, these electronic device searches at a Senate Homeland Security and Governmental Affairs Committee hearing. While some might think that the warrantless searches of electronic devices may be a valuable counter-terrorism tactic, Kelly did not cite a single instance where an electronic device search had lead to a terrorism charge or conviction.

As the recent ACLU and Electronic Frontier Foundation suit shows, these searches have disrupted the lives and violated the privacy of a NASA engineer, a former Air Force Captain, a Harvard graduate student, a nursing student, and entrepreneurs, all citizens with no connections to terrorist activity.

It’s important that the federal government keep us safe from foreign threats, and CBP should be able to examine phones and laptops belonging to people who are the subject of a warrant. But CBP should not have the authority to go on fishing expeditions for incriminating data, harassing and intimidating citizens and permanent residents without any evidence of wrongdoing.

Featured Image: Bryce Durbin/TechCrunch

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The abyss of analytics

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I want to talk about a mistake I see client after client making. (I work at a tech consultancy. We have a lot of clients. Not all of them make this mistake! …But many do.) That mistake is to obsess over analytics data, without any strategy; to assume that all that needs to be done is to gather as much data as possible, and then this data will magically become knowledge, and knowledge will mystically become wisdom.

I understand the temptation. Suppose you’re building a new web site, or a new app. Of course you want to know as much as you can, in as much detail as possible, about how users use it. Of course you want activity trackers, heat maps, funnel analysis; of course you want every twitch and false start from every user to be logged for all eternity. Data is the new oil, the new gold. Of course you need to gather as much of it as you possibly can, to be parsed and refined and mined later on. Right?

…Well, yes. But. I put it to you that data for its own sake is meaningless; that you should know what questions you want to ask of it, what criteria you want to measure, what targets you want to aim for, before you start collecting it. There is an opportunity cost to analytics data: time put into defining and collecting it is time not put into honing and refining your product. And if you determine what questions you want to ask of the data first, instead of saying “collect it all and let Future Me sort it out” — I think you’ll generally find that this will inform your product design in an extremely helpful way.

There is a myth, of course, a myth that grows with nigh every case study at every MBA school, that somewhere within the analytics data your site or app or service collects, in some obscure row or column, you will find the secret to your ultimate success. The famous Facebook “aha moment.” Or the famous … well, actually, that Facebook example is repeated ad nauseum because it’s generally the only one people can think of. But, more generally, the myth that your analytics data will make you understand how to hockey-stick your users.

99% of the time that is not how it works. 99% of the time you get screwed by selection bias. You get no data at all from the users who never come to you, because they can’t be bothered, because they aren’t interested enough, because they never heard of you. You get almost no data from the users who immediately bounce. The data you do get, the so-called “rich” data, are from your engaged, interested users — but making marginal improvements for them won’t help you. You want to improve the experience for the users for which you have no or little data. Explain to me again how your analytics will help you there?

I’m not saying data is valueless. I’m not saying analytics are completely unimportant. But I am saying that before you obsess about them — and believe me, with far too many of the clients I’ve had, “obsess” is the right word — ask yourself what questions you will ask of your analytics data, and what value you expect to receive. Don’t assume that its value is automatic, and just needs to be mined, when all too often it is fool’s gold at best. Don’t collect data for its own sake, collect it to answer specific questions — and know what those questions are well before you launch.

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Tech Q&A: Best routers, low airfares, Facebook privacy, dangerous cellphones and more

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Cellphone dangers

Q: Every time I hold my phone up to my head, I wonder if it’s giving me cancer.

A: Like many daily activities, using cellphones has prompted some startling, albeit inconclusive, research. The bottom line is that cellphones do emit certain levels of radiation, and there are simple and effective ways to reduce your exposure to it. You want to text instead of call and use the speaker when possible. Click here to learn more about this controversial subject.

Outsmart flight-booking sites

Q: I want to buy airline tickets for the holidays. Is it true that the airline sites track where you go online?

A: Websites do have the ability to track your interests, based on cookies and your IP address. They know where you visited and what you did there. Do the online booking sites’ algorithms use this intel to change airfares? Whether they do or don’t, there are ways to browse ticketing options without anyone knowing who you are, and this technique may help your chances of landing a good price. Click here to learn what you can do to prevent price hikes and get the best deal.

More on this…

Get a faster router

Q: I need a new router. Which one should I buy?

A: If you spend a lot of time on the internet and you need a good deal of broadband, be on the lookout for multi-band routers. You might also consider a mesh network, which will expand the coverage inside your home. Pro tip: No matter which router you choose, buy it outright over renting one from an internet provider, because you are certain to save money in the end. Click here for a list of my recommended routers.

Listen to Echo’s audio archive

Q: I have an Amazon Echo. How do I hear everything it has recorded?

A: Many Echo veterans are confused about the device’s habit of recording every command they utter. Is this true? And where are these recordings stored? I’m guessing you already know that Echo does record you and store your commands. You’ll be relieved to know that they are very easy to access, listen to and even delete. Click here to find out how to listen to everything your Amazon Echo has ever heard.

End social media rants

Q: Certain family members are driving me crazy on Facebook with their political and stupid posts. How can I stop seeing the posts without unfriending them?

A: This is a rough time for social media. No matter how easygoing most of your Facebook friends are, you have probably run into an unpleasant meme or didactic post. You can absolutely filter the political rants of close friends and family without them ever knowing what you’ve censored from your wall. The only thing you will ever have to worry about is when that hostile uncle asks you, “Hey, what’d you think of that article I posted?” Click here to find out how to silence political rants on Facebook.

What questions do you have? Call my national radio show and click here to find it on your local radio station. You can listen to the Kim Komando Show on your phone, tablet or computer. From buying advice to digital life issues, click here for my free podcasts.

Copyright 2017, WestStar Multimedia Entertainment. All rights reserved.

Learn about all the latest technology on the Kim Komando Show, the nation’s largest weekend radio talk show. Kim takes calls and dispenses advice on today’s digital lifestyle, from smartphones and tablets to online privacy and data hacks. For her daily tips, free newsletters and more, visit her website at Komando.com.

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Deliveroo raises $385M in new funding, now valued at ‘over $2 Billion’

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Deliveroo, the London headquartered restaurant food delivery startup, has raised $385 million in new funding, giving it a valuation of “over $2 billion,” according to the company.

The Series F round is led by U.S. fund managers T. Rowe Price, and Fidelity — who have previously backed the likes of Facebook, AirBnB and Tesla — with existing investors DST Global, General Catalyst, Index Ventures, and Accel Partners also following on. Total funding for the European unicorn now sits at $860 million.

The new capital will be used by Deliveroo to invest in three aspects of its business:

The first is expansion of its “Editions” (previously called RooBox) programme, which sees it open delivery-only kitchens to enable partner restaurants to expand without any of the traditional upfront costs, whilst increasing food selection for customers and optimising delivery times.

Second, the company plans to continue to grow the size of its technology team who, amongst other things, work on Deliveroo’s “real-time logistics algorithm and artificial intelligence systems” to help improve the speed and number of deliveries that can be made in order to increase what are otherwise very thin margins for on-demand food delivery. Another aspect to its data science is working out where it should launch the next Editions kitchens and what type of food is in demand locally.

Third, Deliveroo says it wants to rapidly expand into new towns, cities and countries. “This will allow more people to order great food quickly to their door from their favourite local restaurants,” says the company.

Will Shu (pictured), founder and CEO of Deliveroo, said in a statement:

“I remember how excited I was carrying out our first delivery. I hoped that people would love being able to order great food from their favourite local restaurants straight to their front door. I am proud that just four years on, millions of people use Deliveroo in over 150 cities around the world. This is all thanks to the hard work of our riders, the great restaurants that we work with and our brilliant customers.

So I am extremely pleased that our new investors share this vision and have decided to make such a significant investment in our future.

With this funding we will invest further in our delivery-only kitchens Editions, in developing our technology and in taking Deliveroo to more towns and cities. This investment will take us to the next level and allow our riders to deliver ever more great food directly to people’s doors.”

Meanwhile, the company’s accounts for the year ending 31 December 2016 were recently filed, and although they are obviously already 9 months out of date, make for interesting reading. As Business Insider reports, Deliveroo grew a lot in 2016, with revenue up 611 per cent to £129 million. But losses were up too — a 300 per cent increase to £129 million. However, the figure to really watch is the food delivery company’s gross margin percentage, which sat at just 0.7 per cent.

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How to announce a funding round

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Tiffany SpencerContributor

Tiffany Spencer runs marketing and communications for Bessemer Venture Partners.

Attracting investment is a milestone for any startup – it’s a vote of confidence from a respected outside expert in your space and a signal that your company is positioned for the future, which is important to prospective partners and customers, as well as future investors.

Beyond that, new funding can also increase your visibility, attracting the attention of top talent and potential acquirers. One of the most effective ways to magnify your visibility is through a funding announcement. After helping hundreds of companies understand this process, here are my suggestions for how to get it right.

Drafting the Announcement:

Not every funding announcement is the same, but standard components include:

  • The news + the facts:
    • Who raised? How much? Who are the investors? Which investor led the round? What stage is the company?
    • Mention any investors that invested in earlier rounds. It signals an ongoing relationship and continued confidence.
    • Call out any investors who are joining the board.
  •   Background on the company:
    • What does the company do? Who is the founding team? How will the money be used (new hires, development, etc.)?
  • Validation from the investors:
    • A quote from the investor(s) is an expert endorsement. Typically, the investor speaks to the reason for investment. This may include the executive team’s capabilities, why the company is exciting, or momentum in the market.  In rounds with multiple investors, the lead investor is given priority and is often the only investor quoted.
  • Quote from the founder or CEO
  • Company boilerplate

New funding announcements benefit from a dedicated audience of interested journalists, so exploit the opportunity to tell your story. This is your chance to explain who you are, what you do and why, underscore momentum and call out recent achievements.

These days, there are so many reporters covering funding news that it’s no longer necessary to “bundle” your funding with other news. In fact, there is likely more benefit to a standalone funding announcement followed shortly by another announcement that indicates momentum.

If you find yourself stumped about how to frame your story, I always suggest reverse-engineering your ideal article. What is your perfect headline? What are the key takeaways readers should have?  What kind of images and video might help you tell that story? You might also find inspiration in how others in your sector handle their announcements. You can do this easily by searching a company’s name alongside any of the commonly used wire services (Marketwired, PRNewswire, BusinessWire).

Securing coverage:

The goal of your announcement is to generate news coverage. Your media list should include reporters with whom you have a relationship, those who follow the companies in your sector and those who cover new financings as part of their beat. Many of the top business and tech outlets make funding coverage a priority and assign reporters to that task.

These include (but aren’t limited to): The Wall Street Journal, The New York Times, Forbes, Fortune, TechCrunch, Recode, VentureBeat, Business Insider, Buzzfeed, CNN, and CNBC. Additionally, newsletters like StrictlyVC, Fortune’s TermSheet, Mattermark and Pitchbook include roundup coverage of new financings.

It’s smart to reach out individually to reporters with your news and some context about why their readers will care.  (The most successful pitching involves pulling out unique angles that will resonate with specific outlets so that journalists feel that the story is tailor-made for their audience.)

In determining an outreach strategy, you might consider reaching out broadly to offer several reporters the story or promising a single reporter an exclusive.  An “exclusive” implies that they will write a more thoughtful and comprehensive article in exchange for being the only reporter provided with information and access.

Opting for an “exclusive” typically reduces broad coverage but is helpful if your business is complex and requires thoughtful explanation, or if you desire a deeper “signature story” which explains your business in detail and might aid in sales and hiring efforts.

These days few journalists rely on newswires to source their stories so you might also forgo sending a formal press release over the wire altogether.  Releasing your news through your own channels, pitching reporters directly, and delivering the news to your network (via your website, social channels and direct emails) will do the trick.

Of course, in a world where startups come and go, a release over the wire can offer some legitimacy, as well as a historical record.  Newswires typically have relationships with multiple outlets that will automatically post and archive their content. And, releases detailing financial transactions, including funding announcements tend to perform better than more general announcements on the newswire.

Pro-Tip:  Lead Time

Regardless of which strategy you choose, the most successful funding PR efforts have one thing in common:   They give reporters ample time to write the story. This can be easily achieved by sharing news in advance under “embargo.” To do this: reach out to reporters early with minimal information and an offer to share details and access to spokespeople once they’ve agreed to a specific embargo date and time (often synched to the timing of the newswire release). Not all reporters will agree to an embargo—some outlets have firm policies against agreeing to embargos—so you should work with them to understand how to work around these rules, or decide to share the information when it goes public, knowing that they will be less likely to devote much attention to the story after the news has gone out broadly.

Amplifying the news:

You can also amplify your news through social media and other “owned” channels. Sharing links via Twitter, Facebook and LinkedIn drive awareness of the news. It’s also smart to provide the information directly to internal employees, partners, and customers in a way that underscores key messages and arms them to share the story.  Finally, writing your own blog post to be posted on your company site, LinkedIn, and Medium, allows you more opportunity to frame the news. In addition to providing more content to link to and share, media will sometimes mine blog posts for additional background, context or quotes.

Your investors’ PR team(s) may also help.  Some investors will complement your news with a blog post of their own, promote your funding via social media, aid in outreach to the media and make themselves available to do press interviews. It’s not an imposition! Your investors want your company to succeed.

Filing a Form D and Timing Your Announcement: (AKA: How to Avoid the Biggest Mistake Startups Make when Announcing Funding)

In compliance with SEC regulations, most US-based startups are required to file a Form D electronically. The Form D contains the basic details of a financing and must be filed within 15 days (real days vs. business days) of closing the round. Unfortunately, once filed, these details become public which leads to a common PR headache for startups. Savvy journalists often monitor Form D filings looking for news scoops related to new financings. For companies filing a Form D, we recommend filing late in the day on day 15 and working to get your news out prior to filing. This way the start-up can control the narrative around their financing and work strategically with reporters who might cover the news. There are alternatives to filing a Form D. Start-ups that wish to operate in “stealth” mode or have otherwise made no public announcement of their financings must speak to their legal team about alternatives.

Do we need a PR agency to do this?

Obviously, having PR professionals at your service is helpful. But for many early stage companies, committing to an agency on retainer is too much too soon. (In the early stages, when company news is likely to be sporadic, the hefty price tag for ongoing agency support may not be cost-effective.)

If so, you might consider working with a consultant or agency on a “project basis.”  It’s a reasonable request given that funding announcements are very straightforward. And, it’s helpful to publicists looking to build their business pipeline. You may also be able to tap your VC firm for help. My team sometimes pitches in when BVP’s early stage companies need help executing a funding announcement.  When those companies need heavier lifting, we guide them to external experts who can step in and own the effort as if they were internal, ensuring that the exec team is in synch and prepped for the push, and making sure that results are reported.

 

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Five billion-dollar businesses for the driverless future

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Massive opportunities in urban transportation are emerging as the industry transitions from per-vehicle to per-mile economics

Growing up, I dreamed of owning cars I would be proud to wax, polish, and cruise around my neighborhood. Today, I dread the prospect of being weighed down by a rapidly depreciating hunk of plastic and metal. Now all I want is a pleasant transportation experience.

Millennials share my sentiment toward vehicle ownership, and many of them are embracing the convenience of ride sharing.

The trillion-dollar auto industry is being turned on its head. Automotive companies are getting squeezed as car sales drop and newcomers eat their margins.

As part of this shift, the industry is transitioning from per-vehicle to per-mile economics. Historically, the automotive industry has been measured by how quickly it assembles cars, pushes them to customers, lends money against them, and collects money to maintain and upgrade them.

Tomorrow, the industry will be measured by how many miles it moves passengers, and how much margin it generates on every mile traveled.

Vehicles will travel 3.17 trillion miles in 2017 — a 7.8% increase from five years ago. The trend will continue: The rise of electric vehicles and automated driving mean we can expect a lower environmental and labor impact, as well as lower prices.

Automakers should not worry about being put out of business. Some will not survive the evolution. A  but a number of them will be key players in tomorrow’s per-mile realm. Some will become white-label, commodity producers of vehicles for Uber, Lyft, or Zoox fleets. Others, such as GM, Audi, and BMW, may choose to compete with the ride-sharing giants and operate their own fleets.

In the driverless future, traditional car companies will get less of the margin for every mile traveled by consumers. Emerging services will usurp the rest.

Which businesses are positioned to capture the majority of the dollars for the many billions of miles driven? A few possibilities:

  • Insurance: Robo-taxi technology has almost arrived. So far, there isn’t a legal framework in which an operator can offer autonomous services. Such a framework would help to set limits on the liabilities of passengers, operators, and technology vendors. When the limits of those liabilities are known, insurers can design and offer policies for each group. Startups will need to take a leadership role in helping insurance companies model the risk of computer vision, AI and other technology malfunctioning. Given the expectation of slower auto sales, incumbent insurance companies should be delighted to pursue this nascent market, which could turn into the bulk of their business someday.
  • Compliance: Limiting operators’ liabilities will require strict safety regulation compliance.  These regulations could include building and running simulations on the AI, as well as monitoring and auditing tele-operations (i.e., humans remotely overseeing the autonomous vehicles).
  • Distribution: Today, Uber and Lyft own the primary channels to ridesharing. Their vast network of drivers and colossal cash coffers have allowed them to lock down the industry and squash competitors. So far, neither of them is building their own vehicles. Traditional automakers have an opportunity to rethink the experience of passengers, as well. If they start from first principles, they will find themselves designing and building very different vehicles than what they’ve made in the past. New and emerging companies, such as Zoox (disclosure: my firm is an investor), are being built from the ground up to design and operate sophisticated transportation robots for this new era of driverless transportation.
  • In-vehicle services: Forget mobile devices; “driverless” is the new platform. Highly personalized, rich environments can be created to stimulate and engage with passengers. Voice interfaces can tune the experience in the vehicle, and serve as a concierge for not only that a single trip or a series of trips over multiple vehicles and in multiple locales. Imagine tours provided by robotic cars that “know” passenger tastes, preferences, and previous destinations.  Your driverless tour guide showing you around Bangkok “knows” your preferences from your prior tours in Rome and Sao Paulo. They can tap into your social media profile to recommend dining, shopping and entertainment experiences.
  • Autonomous technology: It is well-established that companies who build unique technology that enables autonomous driving are positioned to reap massive benefits. Non-auto-tech companies are seeing the opportunity and snapping up innovative companies. Intel paid a premium for MobileEye and positioned itself as a major Tier 2 automotive supplier. The channel that Intel acquired through this purchase will enable Intel to sell many other technologies, such as chips, sensors, and software, into the automotive supply chain.

Trillions of dollars worth of new opportunities abound in the coming era of autonomous travel. If history has taught me anything, it’s that this new paradigm will spur entirely new ways of living that we haven’t yet considered. As for myself?

As a gearhead, I’m most looking forward to getting from A to B by robot, and manually pushing performance cars to their limits on racetracks.

Featured Image: David Butow/Corbis/Getty Images

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Automakers accelerate their interest in startups

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When it comes to startup investment, carmakers are all over the road.

Over the past two years, we’ve seen a massive spike in venture funding by major auto manufacturers. Deal counts are up, more automakers are investing and more big rounds are getting done.

However, an analysis of Crunchbase funding data for the 20 largest global automakers finds wide variance in investment sizes, timing and strategic focus. Some automakers have focused on unicorns and mega-rounds, while others are active at the early stage. Still others have yet to park much capital in startups, illustrating a long-term reticence to engage actively in the venture space.

None of this is especially surprising to industry insiders. Automakers “operate at a different clock speed than the technology industry,” said Chris Stallman, a partner at Fontinalis Partners, a transport-focused venture firm with offices in Detroit and Boston. Five to seven-year vehicle product cycles make startup partnerships difficult because there is uncertainty about whether the company will still be around when a car comes to market.

That said, it’s no secret that automakers have shown more interest in startups lately. Nor is it any secret what’s driving that surge, given the massive shifts the industry faces from the rise of electric carsautonomous vehiclesride-hailing services and other emerging technologies and transportation business models.

Below, we set out to quantify combined investment by automakers in startups of all stripes, along with acquisitions, with a focus on how individual automakers compare.

Deal pace speeds up

First we look at deal count. Broadly, funding records for the past five years show a dramatic rise in startup investment beginning in 2016 and revving up further in 2017.

In the chart below, we look at the number of disclosed venture and seed rounds with participation by the major automakers. Keep in mind, these are only disclosed rounds, so the actual number of investments may be quite a bit higher, as automakers are known to do stealth deals, as well.

Deal-making isn’t concentrated in any particular sub-sector. We see sizeable rounds, for instance, for Shift, a car-selling platform; ChargePoint, a provider of electric vehicle charging stations; Turo, a provider of peer-to-peer car sharing; StoreDot, a battery developer and Momentum.ai, an autonomous-driving startup.

Car companies aren’t just doing more deals; they’re doing bigger investments. In all, automakers participated in at least eight mega-rounds ($100 million or more) this year, up from zero a few years ago. In the following chart,we look at mega-rounds over the past five years:

Ride apps have dominated so far this year, with at least four companies in the space securing mega-rounds with automaker participation: Via, Grab, Gett and Careem. Autonomous vehicles were also big, with Nauto and ArgoAI scoring mega-rounds.

Carmaker M&A

While it was a big year for startup investment by automakers, M&A has been slower. That’s not abnormal, as car companies generally don’t buy a lot of startups, although they do the occasional big deal or smaller asset purchase.

So far this year, we haven’t seen any large M&A transactions involving automakers. The most recent large-dollar purchase was GM’s purchase of self-driving technology startup Cruise Automation for $1 billion in 2016.

The latest deal, Volvo’s purchase this month of valet parking app developer Luxe, by contrast, was a smaller asset sale involving a startup that had ceased offering its service. Other recent deals, including Ford’s purchase of commuter transit provider Chariot, and PSA Group’s acquisition of online auto repair platform Autobutler, were smaller deals involving early-stage companies.

Whether they opt to partner or acquire, however, automakers are cultivating more relationships with startups, Stallman told Crunchbase News. The global recession of 2008-2009 required heavy cuts to R&D for many struggling automakers, and in the last couple of years they’ve been playing catch-up. Bringing in an outside startup can be a good way to speed up internal efforts.

How the biggest automakers stack up

Not everyone’s operating at the same speed, however. Some automakers like venture investing a lot more than others.

Looking at deal count, Germany’s BMW was the most active automaker by a wide margin, with more than 30 disclosed investments since 2012, including 10 so far this year. A majority are through its corporate fund, BMW iVentures, which invests across multiple sectors, including autonomous driving, electric vehicles, AI and automotive cloud technology.

Although most deals are Series A or B, BMW i Ventures invests across stages, and many of its early-stage rounds are quite large. This summer, the fund participated in a $38 million Series C for Shift, and a $159 million Series B for Nauto, a developer of AI-enabled camera technology for automotive fleets.

Germany’s Daimler was also quite active in 2017, with eight investments, including participation in two mega-rounds for two ride apps, New York-based Via and Dubai-based Careem.

In the chart below, we look at the number of disclosed investments since last year by major automakers:

A few automakers have so far stayed out of startup investing. Fiat Chrysler, in particular, has been reticent to invest, although a recent self-driving car partnership with Google demonstrates an interest in partnering with Silicon Valley companies. Nissan and Mazda have also shown little appetite for VC.

The road ahead

Looking ahead, it’s not far-fetched to presume that the momentum for startup investing among automakers will continue. If anything, signs point to further acceleration, with Toyota recently unveiling a $100 million AI-focused venture fund and Ford scaling up its tech-focused Ford Smart Mobility division.

Moreover, if any industry’s investment activities are going to follow Newton’s first law of thermodynamics, it ought to be transportation.

Featured Image: Li-Anne Dias

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Southeast Asia games firm Sea, formerly Garena, files for $1 billion US IPO

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Southeast Asia-based games and e-commerce firm Sea, formerly known as Garena, has officially filed for its much-anticipated U.S. IPO. The company, which is valued at over $3.75 billion, will list on the New York Stock Exchange as ‘SE’ and is looking to raise $1 billion.

Sea is best known for its Garena gaming business, which predominantly focuses on PC games but also includes mobile, but in recent years it has branched out into e-commerce with its Shopee service and payments with its AirPay business.

The Garena games portal is like Steam for PCs. It counts 40.1 million monthly users as of June 2017, with 12.9 million daily users spending an average of 2.3 hours per day on the service. Garena is Sea’s only revenue-generator since the company is still subsidizing Shopee and AirPlay is available in just three markets.

Revenue-wise, Sea has grown its revenue from $160.8 million in 2014 to $345.7 million in 2016, but losses during the period widened from $90.9 million to $225 million.

The company said this was predominantly down to Shopee, which it has been subsidizing in order to battle the likes of Alibaba-owned Lazada in Southeast Asia’s e-commerce space, which is tipped to grow from $5.5 billion in 2015 to $87.8 billion in 2025, according to a report co-authored by Google.

That Southeast Asia growth story is the anchor for this public listing, with Sea putting its faith in the region’s rapidly growing internet space — which is adding 3.8 million new users a month — to propel its business to profitability.

That’s particularly true in the case of Shopee, which is Sea’s big bet. Shopee has grown to reach 5.4 million monthly users in Q4 2016, with 2.3 million average monthly buyers and 1.9 million average monthly sellers. Sea claimed Shopee clocked $1.15 billion in GMV — total goods sold — in 2016, which it said makes it Southeast Asia’s largest e-commerce company.

It’s unclear if that is accurate. Lazada reached $1,024 billion GMV for 2015, but founding company Rocket Internet ceased reporting its financial details after the first of two $1 billion Alibaba investments in April 2016.

There’s plenty of rival between the two, and Lazada CEO Max Bittner had previously fired shots at “rival” companies for pumping their numbers.

“In comparison to our competitors, who are keen to tell everyone how big their GMV is, we don’t have the need to scream very loud about how much money we raised,” Bittner told TechCrunch earlier this year when Alibaba made its second investment.

No doubt the growth of Shopee, which was only formed two years ago, is impressive. Sea has begun to monetize it for the first time this year when it introduced advertising and seller commission fees in Taiwan. There are still six other countries to monetize, and Sea said it might consider other types of revenue generation.

This IPO is an important event for Southeast Asia more generally, where the only recent U.S. IPO was a disastrous and short listing from payment company MOL that ended in 2016.

Sea is the much-anticipated listing that investors and founders are hoping could light up a feel good factor about Southeast Asia as a tech destination and pave the path for other IPOs.

The region has seen a number of billion dollar companies rise to the point of a public exit, and Sea is leading the pile. A successful IPO could tempt other tech companies in Southeast Asia to test the public markets with a listing of their own.

The main beneficiary of the Sea listing will be Tencent, the largest shareholder with a 39.7 percent share, with Blue Dolphins Venture — an organization set up by founder Forrest Li — holding 15 percent. Li himself has 20 percent, and CTO Gang Ye has 10 percent.

Other investors include Hillhouse Capital, Temasek’s SeaTown Holdings and Mistletoe, but their share holdings were not disclosed in the filing.

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Beats Studio 3 bring premium noise canceling and battery life at a premium price

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Beats had a handful of different sounds on hand to test the Studio 3 ahead of launch. The demo was designed to showcase the range of the headphones’ new adaptive noise-canceling technology — but there’s only so much you can get from a demo in that kind of controlled environment. The closest the whole thing got to real-world unpredictability was a desktop fan pointed directly at the headphones to simulate the annoying static crunch of wind.

The tech performed well in the demo — no surprise there. If you’re going to customize a couple of scenarios to show off your product’s top feature, you’re going to make sure the thing works. Over the week though, I’ve had the opportunity to try things out in a much more chaotic real-world setting — a little thing we call TechCrunch Disrupt.

Beats shipped a set to my hotel room in San Francisco, so this week I was the guy who was sitting out front by the stage wearing a big set of navy blue over-the-ear headphones trying to get some work done. My own rudeness aside, it’s actually a pretty ideal scenario for testing out the new noise-canceling feature.

There’s a lot going on throughout the day — speakers on the stage, the audience chatter and techno music beds playing between presentations, the din of activity seeping through the noise-dampening curtains from the showroom floor. Unlike the hum of a 737 engine, it’s not the kind of consistent sound it’s easy to program against.

Again, I was impressed. Transcribing audio is a pain in the ass, and the background sound makes it next to impossible to catch everything. With the headphones on and noise canceling fired up, it’s easy to remain blissfully oblivious to your surroundings. The company’s developed an impressive bit of noise canceling that works across a broad range of scenarios — I’m currently typing this from a window seat on an Airbus A320, and the Studio 3 are doing the trick drowning out the hum.

The adaptive noise cancellation is the latest step for a company that’s working toward becoming a more serious headphone brand. And, indeed, Beats has come a ways since launching as big, flashy, bass-heavy headphones. There’s still some legacy there, of course; the branding is still outsized on the products themselves, and the company pumps a ton of money into celebrity promos — including the constant stream of star spots you’re served up during every NBA game.

But the design product color schemes have trended toward the more subtle, and the company started delivering a subtler and fuller audio experience around the time it introduced the Studio 2, in an attempt to fulfill the promise of the record producers behind the company’s launch. The line has grown up a fair bit over the past few years — if you were put off by the brand’s sound in the early days and haven’t gone back since, it’s worth a revisit at your local big box store (just bring the disinfecting wipes).

Battery life is a big win. The company lists it as 22 hours with noise canceling and 40 hours without, so you’ll be able to drown out plane noise and screaming babies for the duration of the world’s longest flight (20 hours and 20 minutes, London to Sydney). When I got home from Disrupt each day, I found that I hadn’t made a dent.

Of course, the whole Apple acquisition means access to the W2 chip, so you get the same pain-free syncing as the AirPods. That’s a noted leg up for iOS users — Android owners will have to grapple with the same old syncing process.

Bluetooth has come a long way in terms of both sound quality and connectivity, so you’ll be able to walk a decent distance away from the sound source without dropping signal. And, of course, there’s a wire in the box for when that’s the preferred way to connect. Weirdly enough, charging happens through microUSB — which feels a little antiquated for a pricey set of headphones.

Speaking of, that’s easily the biggest deterrent here: $350 is a lot to pay for a pair of headphones. As of this writing, that’s about $20 more than the QuietComfort 35, from the notoriously expensive Bose. That price gets you Beats’ most well-rounded headphones to date, but for most users, it’s probably a bridge too far.

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