Wij willen met u aan tafel zitten en in een openhartig gesprek uitvinden welke uitdagingen en vragen er bij u spelen om zo, gezamelijk, tot een beste oplossing te komen. Oftewel, hoe kan de techniek u ondersteunen in plaats van dat u de techniek moet ondersteunen.

Microsoft is pulling out of an investment in an Israeli facial recognition technology developer as part of a broader policy shift to halt any minority investments in facial recognition startups, the company announced late last week.

The decision to withdraw its investment from AnyVision, an Israeli company developing facial recognition software, came as a result of an investigation into reports that AnyVision’s technology was being used by the Israeli government to surveil residents in the West Bank.

The investigation, conducted by former U.S. Attorney General Eric Holder and his team at Covington & Burling, confirmed that AnyVision’s technology was used to monitor border crossings between the West Bank and Israel, but did not “power a mass surveillance program in the West Bank.”

Microsoft’s venture capital arm, M12 Ventures, backed AnyVision as part of the company’s $ 74 million financing round which closed in June 2019. Investors who continue to back the company include DFJ Growth and OG Technology Partners, LightSpeed Venture Partners, Robert Bosch GmbH, Qualcomm Ventures, and Eldridge Industries.

Microsoft first staked out its position on how the company would approach facial recognition technologies in 2018, when President Brad Smith issued a statement calling on government to come up with clear regulations around facial recognition in the U.S.

Smith’s calls for more regulation and oversight became more strident by the end of the year, when Microsoft issued a statement on its approach to facial recognition.

Smith wrote:

We and other tech companies need to start creating safeguards to address facial recognition technology. We believe this technology can serve our customers in important and broad ways, and increasingly we’re not just encouraged, but inspired by many of the facial recognition applications our customers are deploying. But more than with many other technologies, this technology needs to be developed and used carefully. After substantial discussion and review, we have decided to adopt six principles to manage these issues at Microsoft. We are sharing these principles now, with a commitment and plans to implement them by the end of the first quarter in 2019.

The principles that Microsoft laid out included privileging: fairness, transparency, accountability, non-discrimination, notice and consent, and lawful surveillance.

Critics took the company to task for its investment in AnyVision, saying that the decision to back a company working with the Israeli government on wide-scale surveillance ran counter to the principles it had set out for itself.

Now, after determining that controlling how facial recognition technologies are deployed by its minority investments is too difficult, the company is suspending its outside investments in the technology.

“For Microsoft, the audit process reinforced the challenges of being a minority investor in a company that sells sensitive technology, since such investments do not generally allow for the level of oversight or control that Microsoft exercises over the use of its own technology,” the company wrote in a statement on its M12 Ventures website. “Microsoft’s focus has shifted to commercial relationships that afford Microsoft greater oversight and control over the use of sensitive technologies.”

 

 


TechCrunch

TechCrunch is out hunting for bright spots in the startup world as we all come to grips with the pandemic — particularly where checks are actually being written despite everything.

D2C is back to the future

First up this week, we surveyed top direct-to-consumer investors, and they seemed pretty optimistic despite the struggles of some sector leaders. Here’s Lightspeed Venture Partners Nicole Quinn, for example, on investor activity versus current opportunity:

I would argue it is too weak as investors look at the unit economics of some of the recent IPOs and think that is true for all of D2C. In reality, there are sectors such as beauty where many companies have product margins >90% or true brands such as Rothy’s where there is such a strong word-of-mouth effect and this gives them an unfair advantage with far better unit economics than the average.

Other respondents include: Ben Lerer and Caitlin Strandberg from Lerer Hippeau, Gareth Jefferies from Northzone, Matthew Hartman of Betaworks Ventures, Alexis Ohanian of Initialized Capital and Luca Bocchio of Accel.

Arman Tabatabai has the full investor survey on Extra Crunch, while Connie Loizos has a separate interview with Ohanian over on TechCrunch.

Proptech will be going (more) remote

Arman also ran a popular investor survey on real estate and proptech a few months back, so a virus update edition was warranted given the existential questions facing the future of physical space. Here’s one clarifying explanation from Andrew Ackerman of Dreamit Ventures:

Startups targeting residential landlords and property managers could be big winners. Anything that makes tenants more comfortable like residential tenant amenity platforms (e.g. Amenify) or automates maintenance requests (e.g. TravtusAptly), simplifies maintenance itself (e.g NestEgg) or eases operations like package receiving (e.g. Luxer One) are suddenly top of mind.

VC investors have a saying, “Don’t make me think,” and right now, we are thinking hard about what COVID-19 means for our portfolio, so don’t be surprised if we are a little slower than normal to write checks. That said, we are acutely aware of the fact that some of our best returns came from investments made during difficult times. Fortunately, we think quickly.

Read the full thing on Extra Crunch.

A new era for consumer tech

It’s no surprise that SaaS companies are seeing new growth from millions staying at home. But what else is going on besides work? Josh Constine pulls together the rebirth of Houseparty, the integration of Zoom into popular social networks and other trends today to elegantly explain the big picture: social tools actually being used like everyone had hoped(!).

What is social media when there’s nothing to brag about? Many of us are discovering it’s a lot more fun. We had turned social media into a sport but spent the whole time staring at the scoreboard rather than embracing the joy of play. But thankfully, there are no Like counts on Zoom . Nothing permanent remains. That’s freed us from the external validation that too often rules our decision-making. It’s stopped being about how this looks and started being about how this feels. Does it put me at peace, make me laugh, or abate the loneliness? Then do it. There’s no more FOMO because there’s nothing to miss by staying home to read, take a bath, or play board games. You do you.

Check it out on TechCrunch, then be sure to check out our ongoing coverage of where this is headed: virtual worlds(!?). Eric Peckham analyzed the sprawling topic in an eight-part series last month, then sat down for an in-house TechCrunch interview this week to explain how he sees the pandemic impacting the existing trends. 

More than two billion people play video games in the context of a year. There’s incredible market penetration in that sense. But, at least for the data I’ve seen for the U.S., the percent of the population who play games on a given day is still much lower than the percent of the population who use social media on a given day.

The more that games become virtual worlds for socializing and hanging out beyond just the mission of the gameplay, the more who will turn to virtual worlds as a social and entertainment outlet when they have five minutes free to do something on their phone. Social media fills these small moments in life. MMO games right now don’t because they are so oriented around the gameplay, which takes time and uninterrupted focus. Virtual worlds in the vein of those on Roblox where you just hang out and explore with friends compete for that time with Instagram more directly.

Some SEM prices are going down due to the pandemic

Danny Crichton put on his data scientist hat for Extra Crunch and analyzed more than 100 unicorns across tech sectors and looked how how the pricing of their keywords has changed due to the pandemic/recession.

The results aren’t surprising — there has been a collapse in prices for almost all ads (with some very interesting exceptions we will get to in a bit). But the variations across startups in their online ad performance says a lot about industries like food delivery and enterprise software, and also the long-term revenue performance of Google, Facebook and other digital advertising networks.

cloud ice cream cone imagine

Big tech should do more to help startups now

Besides offering wily developer platforms, I mean. Josh argued on TechCrunch that hosting costs and associated expenses should be spared or delayed by the dominant companies to be nice, and to avoid crushing their own ecosystems.

Google, Amazon and Microsoft are the landlords. Amidst the coronavirus economic crisis, startups need a break from paying rent. They’re in a cash crunch. Revenue has stopped flowing in, capital markets like venture debt are hesitant and startups and small-to-medium sized businesses are at risk of either having to lay off huge numbers of employees and/or shut down. Meanwhile, the tech giants are cash rich. Their success this decade means they’re able to weather the storm for a few months. Their customers cannot.

On the other hand, now is also a good time for mid-sized startups to try to take market share from incumbents who don’t act friendly enough to the rest of the startup world…..

Odds and ends

  1. Eliot Peper, author of a variety of popular sci-fi and tech fiction stories (and occasional TechCrunch contributor), has a new book out called “Uncommon Stock: Version 1.0” about a small startup that accidentally crosses paths with a drug cartel. Current subscribers to this newsletter will find that the link above takes them to a free download (that ends Sunday).
  2. I had been planning to moderate a panel at SXSW on the topic of remote work, but other events flipped that on its head. The panel, featuring Katrina Wong, VP of Marketing at Hired, Darren Murph, Head of Remote at Gitlab, and Nate McGuire, Founder of Buildstack, happened on Zoom. And now the video is available here — check out to get key tips on going remote-first from these experts.

Across the week

TechCrunch

Now might be the perfect time to rethink your fundraising approach

How child care startups in the U.S. are helping families cope with the COVID-19 crisis

Private tech companies mobilize to address shortages for medical supplies, masks and sanitizer

One neat plug-in to join a Zoom call from your browser

Extra Crunch

When is it time to stop fundraising?

Slack’s slowing growth turns around as remote work booms

A look inside one startup’s work-from-home playbook

Lime’s valuation, variable costs and diverging categories of on-demand companies

#EquityPod

From Alex:

The three of us were back today — NatashaDanny and Alex — to dig our way through a host of startup-focused topics. Sure, the world is stuffed full of COVID-19 news — and, to be clear, the topic did come up some — but Equity decided to circle back to its roots and talks startups and accelerators and how many pieces of luggage does an urban-living person really need?

The answer, as far as we can work it out, is either one piece or seven. Regardless, here’s what we got through this week:

  • Big news from 500 Startups, and our favorite companies from the accelerator’s latest demo day. Y Combinator is not the only game in town, so TechCrunch spent part of the day peekin’ at 500 and its latest batch of companies. We got into some of the startups that stuck out, tackling problems within the influencer market, trash pickup and esports.
  • Plastiq raised $ 75 million to help people and businesses use their credit card anywhere they want. And no, it wasn’t closed after the pandemic hit.
  • We also talked through Fast’s latest $ 20 million round led by Stripe. Stripe, as everyone recalls, was most recently a topic on the show thanks to a venture whoopsie in the form of a check from Sequoia to Finix.1 But all that’s behind us. Fast is building a new login and checkout service for the internet that is supposed to be both speedy and independent.
  • All the Stripe talk reminded us of one of the startups that launched so it could beat it out: Brex. The startup, which has amassed over $ 300 million in known venture capital to date, recently acquired three companies.
  • We chatted through the highlights of our D2C venture survey, focused on rising CAC costs in select channels, the importance of solid gross margins and why Casper wasn’t really a bellwether for its industry.

Listen here!


TechCrunch

We’re still very much in the collaboration phase of autonomous driving, since it’s looking still quite a ways off from being anything consumers can use on the regular. That means there’s plenty of opportunity for things like the new “Autonomous Vehicle Computing Consortium” (AVCC) announced today to form. This industry group includes Arm, Bosch, Continental, GM, Toyota, Nvidia, NXP, and Denso, collecting top automakers along with some of the leading chipmakers and tier 1 suppliers in automotive today.

The group’s goal is to work together in order to “solve some of the most significant challenges to deploy self-driving vehicles at scale,” which pretty clearly translates into putting together the collective efforts of some of those who stand to gain most from autonomy becoming a commercially viable technology, in order to speed up said commercialization. While self-driving has been an area of intense investment and focus in the past few years, it still has a ways to go before these companies can start really reaping the rewards of their investments in terms of revenue-driving businesses.

So what will they actually do to achieve this goal? Step one will be setting up a set of recommended specs, essentially, outlining what size, temperature, power consumption and safety standards AV system architectures and computers should adhere to. The idea is that by arriving at some baseline standards, the group will be better able to move from prototyping, which is expensive and low-volume in terms of output, to manufacturing and deploying AVs at the scale where they’ll truly become a viable commercial enterprise.

There’s more to this industry collaboration than just figuring out the specs range for systems, however: Participating companies will “study common technical challenges,” as well, meaning they’ll be putting their heads together to overcome the major, fundamental tech challenges that still act as hurdles to be overcome in getting self-driving vehicles on the roads.

And of course, though the initial founding group includes only those companies listed above, this new group is also open to new members.


TechCrunch

German just hit a new milestone in the space where venture capital and the burgeoning Cannabis industry meet.

Berlin startup Demecan has completed a Series A financing round of 7 million euros to expand its production facility for medical cannabis and the wholesale trade in Germany. It’s become the only German company allowed to produce medical cannabis in Germany.

This is a watershed for the country and is the first investment in this sector for btov Partners, a private investor network. The other half of the funding came from a single, named German family office, which is understood to have its roots in the consumer goods sector. Only two other companies, two of them from Canada, were awarded the contract to produce medical cannabis in Germany in May 2019.

btov Partners manages assets of €420 million and has previously invested in tech startups such as Blacklane, Data Artisans, DeepL, Facebook, Foodspring, ORCAM, Raisin, SumUp, Volocopter and XING.

The green light from Germany’s Federal Institute for Drugs and Medical Devices (BfArM), means Demecan will be able to produce at least 2,400 kilograms of dried cannabis flowers over the next four years. Demecan is also active as an importer and wholesaler of medical cannabis and can thus cover the entire value chain. Since the German government allowed cannabis to be prescribed for therapeutic purposes in 2017 demand has outstripped supply.

Jennifer Phan of btov Partners said in a statement: “Demecan operates in a very attractive market at the right time. Germany currently represents the third-largest market for medical cannabis in the world and is on a growth path. We believe that the company has a first-mover advantage in a highly regulated market environment, especially as it is the only German manufacturing and trading company in the European market”.

Dr. Constantin von der Groeben, co-founder of Demecan, added: “In recent years, we have intensively dealt with the market and reached an important milestone by winning the tender process. We are now focusing on further growth and the start of production in 2020.”


TechCrunch

President Donald Trump and the Office of the U.S. Trade Representative have issued technology companies some temporary tariff relief.

Citing an unwillingness to hit consumers with higher prices on things like computers, mobile phones, laptops, video game consoles, computer monitors, clothes and shoes before the holidays, the President and his trade reps are holding off on slapping additional tariffs on those products coming from China.

The President could also have been motivated by growing concerns that the ongoing trade war could trigger a global recession and hurt his chances for re-election in 2020.

Whatever the reason, the news sparked a stock market rally on Tuesday with investors ignoring the rising prices that 10% tariffs on imports that don’t include consumer goods would cause.

The Dow Jones Industrial Average and S&P 500 indices were both up 1.4% on the day, while the Nasdaq rose 1.9% — thanks in large part to a surge of Apple stock. The company’s stock rose $ 8.49 or over 4.2% to close at $ 208.97.

At the beginning of the month, President Trump said he would slap a 10% tariff on $ 300 billion worth of Chinese goods, which sent markets tumbling. An ensuing slight devaluation of the Chinese currency further pushed markets into a tailspin before they began to recover.

The news on Tuesday all but erased those earlier losses.

These market whipsaws between fear and trembling and irrational exuberance won’t end until the U.S. and China come to some sort of agreement in the trade war.

Earlier in the day, Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer spoke with their Chinese counterparts Vice Premier Liu He and Commerce Minister Zhong Shan about the ongoing trade battle. The two Chinese officials issued a protest against the duties that were set to take effect in September. The two trade representatives have a called scheduled for another two weeks.


TechCrunch

The Trump administration has banned U.S. federal agencies from buying equipment and obtaining services from Huawei and two other companies as part of the government’s latest crackdown on Chinese technology amid national security fears.

Jacob Wood, a spokesperson for the White House’s Office of Management and Budget, was quoted as saying that the administration will “fully comply” with the legislation passed by Congress as part of a defense spending bill passed last year.

CNBC first reported the spokesperson’s remarks.

The new rule will take effect in a week — August 13 — and will also take aim at Chinese tech giants ZTE, Hytera, and Hikvision, amid fears that the companies could spy for the Chinese government. The rule comes in a year before Congress’ mandated deadline of August 2020 for all federal contractors doing business with Huawei, ZTE, Hytera and Hikvision.

The government will grant waivers to contractors on a case-by-case basis so long as their work does not pose a national security threat.

Huawei has long claimed it does not nor can it spy for the Chinese government. Critics, including the government and many lawmakers, say the company’s technology, primarily networking equipment like 5G cell stations, could put Americans’ data at risk of Chinese surveillance or espionage. Huawei has vigorously denied the allegations, despite findings from the U.K. government that gave a damning assessment of the technology’s security.

The company first came to focus in 2012 following a House inquiry, which labeled the company a national security threat.

Spokespeople for Huawei and ZTE did not respond to requests for comment.


TechCrunch

There’s a double standard when it comes to the sexualities of men versus women, trans and gender non-conforming folks. Unbound and Dame Products, two sex tech startups, have teamed up to bring attention to the issue.

By launching a website, “Approved, Not Approved” and staging a protest outside Facebook’s NYC headquarters, the two startups hope to bring more awareness to the company’s advertising guidelines that seem to favor products that cater to cisgender men. The point of the digital campaign is to show how ads for sex toys and products geared toward men are more likely to be approved than those for women, trans or gender non-conforming people.

“For so long, advertisements have been how we continue to reinforce the status quo of what we view as societally desirable and validating,” Dame Products CEO Alexandra Fine told TechCrunch. “Since we’re in a category that’s often denied, we wanted to create an experience that illuminates the disparity.”

On Facebook, for example, it’s prohibitive to promote the sale or use of adult products or services except for ads that pertain to family planning and contraception. The policy also requires that ads for contraceptives cannot focus on sexual pleasure or sexual enhancement, and have to be targeted to people 18 years or older.

“They’re never going to view sexual pleasure as necessary — only functionality as necessary,” Fine said. “And since the functioning only matters for one sex, then we’re just encouraging shitty sex or at least one-sided sex. Healthy sex should be pleasurable sex. That’s really what I think is important.”

Facebook, however, clearly disagrees since it explicitly bans ads relating to sexual pleasure.

“We have had open lines of communication with both companies about our policies and are always taking feedback,” a Facebook spokesperson told TechCrunch. “We are working to further clarify our policies in this space in the near future.”

Unfortunately, there is no telling if and when Facebook and other platforms will change their advertising policies to enable companies like Dame Products and Unbound to reach potential customers through ads.

“I think a lot of us feel like we’ve been silenced by these platforms and they control so much,” Unbound CEO Polly Rodriguez told TechCrunch. “Facebook, Instagram, Pinterest — these are the channels startups live and die by. Not being able to advertise on them is a big deal because, in addition to the policies being biased and genders, it prevents those founders from being able to reach potential customers.”

Unbound CEO Polly Rodriguez. The startup was a finalist at TC Disrupt SF Startup Battlefield finalist in 2018.

In addition to missing out on potential customers, an inability to advertise can have a detrimental effect on a business in terms of raising venture funding.

“I think one of the most frustrating things is trying to raise a round and getting pushback around where you’ll spend the money,” Rodriguez said. “It’s just tough because it’s this vicious cycle where we could be growing at the same rate as a Him or a Roman. It’s definitely in the tens of millions of dollars in terms of foregone profits.”

In addition to the protest, Fine is suing New York City’s Metropolitan Transportation Authority alleging it’s in violation of Dame’s First Amendment rights, the due process clause of the 14th Amendment and the state’s constitutional rights regarding freedom of speech. The lawsuit came in light of the MTA preventing Dame from running its ads on the subway.

Still, despite efforts to squash it, sex tech may finally be getting its moment in the sun. Earlier this month, the sex tech industry had a big win when the organizer of the Consumer Electronics Show finally decided to allow sex tech companies to exhibit and participate in its competition. That came after the Consumer Technology Association, the organizer of CES, royally messed up with sex tech company Lora DiCarlo last year. The CTA revoked an innovation award from the company, which is developing a hands-free device that uses biomimicry and robotics to help women achieve a blended orgasm by simultaneously stimulating the G-spot and the clitoris. In May, CTA re-awarded the company and apologized.

“It’s so rare you see a victory like that and it was because of the press,” Rodriguez said. “It was because it takes. It’s unfortunate these companies don’t do the right thing because it’s the right thing to do. They do the right thing when enough people speak out about it.”


TechCrunch

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