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Daily Crunch: Verizon buys videoconferencing company BlueJeans

Published April 16, 2020

Verizon makes a move into videoconferencing, Jeff Bezos discusses a plan to test Amazon employees for COVID-19 and Apple is reportedly working on new over-ear headphones. Here’s your Daily Crunch for April 16, 2020.

1. Verizon is buying b2b videoconferencing firm BlueJeans

TechCrunch’s parent company is buying veteran videoconferencing platform BlueJeans Network — shelling out less than $500 million on the acquisition, according to the Wall Street Journal. (A Verizon spokeswoman confirmed that the price-tag is sub-$500 million but did not provide a more exact figure.)

“Customers will benefit from a BlueJeans enterprise-grade video experience on Verizon’s high-performance global networks,” the company said in a statement. “In addition, the platform will be deeply integrated into Verizon’s 5G product roadmap, providing secure and real-time engagement solutions for high growth areas such as telemedicine, distance learning and field service work.”

2. Bezos details Amazon’s COVID-19 testing plans in shareholder letter

Jeff Bezos dropped Amazon’s annual shareholder letter today, which includes more information on the Amazon-built testing labs that were announced last week. Bezos said the company is considering “regular testing of all Amazonians, including those showing no symptoms.”

3. Apple said to be working on modular, high-end, noise-cancelling over-ear headphones

Bloomberg reports that Apple is developing its own competitors to popular over-ear noise-cancelling headphones like those made by Bose and Sony, but with similar technology to that used in the AirPod and AirPod Pro lines.

4. Unicorn layoffs keep piling up as the economy gets worse

Yesterday, news broke that a trio of well-known, heavily-backed unicorns — Carta, Zume and Opendoor — were cutting staff.

5. Punitive liquidation preferences return to VC — don’t do it

VC Pascal Levensohn says that several of his current portfolio companies have recently proposed “emergency bridge” convertible note financings of between $5 million and $15 million, each featuring a painful feature for non-participants. (Extra Crunch membership required.)

6. DoD Inspector General report finds everything was basically hunky-dory with JEDI cloud contract bid

While controversy has dogged the $10 billion, decade-long JEDI contract since its earliest days, a report by the Department of Defense’s Inspector General’s Office concluded that the contract procurement process was fair and legal.

7. Google Play adds a ‘Teacher Approved’ section to its app store

All apps found in this section are vetted by a panel of reviewers, including more than 200 teachers across the U.S., and meet Google’s existing requirements (around government regulation and advertising) for its “Designed for Families” program.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

New Google Play policies to cut down on ‘fleeceware,’ deepfakes, and unnecessary location tracking

Published April 16, 2020

Google is today announcing a series of policy changes aimed at eliminating untrustworthy apps from its Android app marketplace, the Google Play store. The changes are meant to give users more control over how their data is used, tighten subscription policies and help prevent deceptive apps and media — including those involving deepfakes — from becoming available on the Google Play Store.

Background Location

The first of these new policies is focused on the location tracking permissions requested by some apps.

Overuse of location tracking has been an area Google has struggled to rein in. In Android 10, users were able to restrict apps’ access to location while the app was in use, similar to what’s been available on iOS. With the debut of Android 11, Google decided to give users even more control with the new ability to grant a temporary “one-time” permission to sensitive data, like location.

In February, Google said it would also soon require developers to get user permission before accessing background location data, after noting that many apps were asking for unnecessary user data. The company found that a number of these apps would have been able to provide the same experience to users if they only accessed location while the app was in use — there was no advantage to running the app in the background.

Of course, there’s an advantage for developers who are collecting location data. This sort of data can be sold to third-party through trackers that supply advertisers with detailed information about the app’s users, earning the developer additional income.

The new change to Google Play policies now requires that developers get approval to access background location in their apps.

But Google is giving developers time to comply. It says no action will be taken for new apps until August 2020 or on existing apps until November 2020.

“Fleeceware”

A second policy is focused on subscription-based apps. Subscriptions have become a booming business industry-wide. They’re often a better way for apps to generate revenue as opposed to other monetization methods — like paid downloads, ads or in-app purchases.

However, many subscription apps are duping users into paying by not making it easy or obvious how to dismiss a subscription offer in order to use the free parts of an app, or not being clear about subscription terms or the length of free trials, among other things.

The new Google Play policy says developers will need to be explicit about their subscription terms, trials and offers, by telling users the following:

Whether a subscription is required to use all or parts of the app (and if not required, allow users to dismiss the offer easily).
The cost of the subscription.
The frequency of the billing cycle.
Duration of free trials and offers.
The pricing of introductory offers.
What is included with a free trial or introductory offer.
When a free trial converts to a paid subscription.
How users can cancel if they do not want to convert to a paid subscription

That means the “fine print” has to be included on the offer’s page, and developers shouldn’t use sneaky tricks like lighter font to hide the important bits, either.

For example:

This change aims to address the rampant problem with “fleeceware” across the Google Play store. Multiple studies have shown subscription apps have gotten out of control. In fact, one study from January stated that over 600 million Android users had installed “fleeceware” apps from the Play Store. To be fair, the problem is not limited to Android. The iOS App Store was recently found to have an issue, too, with more than 3.5 million users having installed “fleeceware.”

Developers have until June 16, 2020 to come into compliance with this policy, Google says.

Deepfakes

The final update has to do with the Play Store’s “Deceptive Behavior” policy.

This wasn’t detailed in Google’s official announcements about the new policies, but Google tells us it’s also rolling out updated rules around deceptive content and apps.

Before, Google’s policy was used to restrict apps that tried to deceive users — like apps claiming a functionally impossible task, those that lied in their listing about their content or features or those that mimicked the Android OS, among others.

The updated policy is meant to better ensure all apps are clear about their behavior once they’re downloaded. In particular, it’s meant to prevent any manipulated content (aka “deepfakes”) from being available on the Play Store.

Google tells us this policy change won’t impact apps that allow users to make deepfakes that are “for fun” — like those that allow users to swap their face onto GIFs, for example. These will fall under an exception to the rule, which allows deepfakes that are “obvious satire or parody.”

However, it will take aim at apps that manipulate and alter media in a way that isn’t conventionally obvious or acceptable.

For example:

Apps adding a public figure to a demonstration during a politically sensitive event.
Apps using public figures or media from a sensitive event to advertise media altering capability within an app’s store listing.
Apps that alter media clips to mimic a news broadcast.

In particular, the policy will focus on apps that promote misleading imagery that could cause harm related to politics, social issues or sensitive events. The apps must also disclose or watermark the altered media if it isn’t clear the media has been altered.

Similar bans on manipulated media have been enacted across social media platforms, including Facebook, Twitter and WeChat. Apple’s App Store Developer Guidelines don’t specifically reference “deepfakes” by name, however, though it bans apps with false or defamatory information, outside of satire and humor.

Google says the apps currently available on Google Play have 30 days to comply with this change.

In Google’s announcement, the company said it understood these were difficult times for people, which is why it’s taken steps to minimize the short-term impact of these changes. In other words, it doesn’t sound like the policy changes will soon result in any mass banning or big Play Store clean-out — rather, they’re meant to set the stage for better policing of the store in the future.

Bridgecrew announces $14M Series A to automate cloud security

Published April 16, 2020

In today’s grim economic climate, companies are looking for ways to automate wherever they can. Bridgecrew, an early-stage startup that makes automated cloud security tooling aimed at engineers, announced a $14 million Series A today.

Battery Ventures led the round with participation from NFX, the company’s $4 million seed investor. Sorensen Ventures, DNX Ventures, Tectonic Ventures, and Homeward Ventures also participated. A number of individual investors also helped out. The company has raised a total of $18 million.

Bridgecrew CEO and co-founder Idan Tendler says that it is becoming easier to provision cloud resources, but that security tends to be more challenging. “We founded Bridgecrew because we saw that there was a huge bottleneck in security engineering, in DevSecOps, and how engineers were running cloud infrastructure security,” Tendler told TechCrunch.

They found that a lot issues involved misconfigurations, and while there were security solutions out there to help, they were expensive, and they weren’t geared towards the engineers who were typically being charged with fixing the security issues, he said.

The company decided to solve that problem by coming up with a solution geared specifically for the way engineers think and operate. “We do that by codifying the problem, by codifying what the engineers are doing. We took all the tasks that they needed to do to protect around remediation of their cloud environment and we built a playbook,” he explained.

The playbooks are bits of infrastructure as code that can resolve many common problems quickly. When they encounter a new problem, they build a playbook and then that becomes part of the product. He says that 90% of the issues are fairly generic like following AWS best practices or ensuring SOC-2 compliance, but the engineers are free to tweak the code if they need to.

Tendler says he is hiring and sees his product helping companies looking to reduce costs through automation. “We are planning to grow fast. The need is huge and the COVID-19 implications mean that more and more companies will be moving to cloud and trying to reduce costs, and we help them do that by reducing the barriers and bottlenecks for cloud security.”

The company was founded 14 months ago and has 100 playbooks available. It’s keeping the crew lean for now with 16 employees, but it has plans to double that by the end of the year.

NASA and Planet expand imagery partnership to all NASA-funded Earth science research

Published April 16, 2020

NASA and Planet have deemed their pilot partnership a success, and the result is that NASA will extend its contract with Planet to provide the company’s satellite imagery of Earth to all research programs funded by the agency. NASA had signed an initial contract last April with Planet to provide Planet imagery to a team of 35 researchers working on tracking what are known as “Essential Climate Variables,” or ECVs.

The ECV trial showed that Planet’s imagery was useful in tracking and providing insight into a number of different Earth-based environmental events, including landslides in the Himalayan mountain range. During the study, one of the key ingredients in helping researchers detect early warning signs was the Planet satellite constellation’s high revisit rate, which means the frequency with which it photographs a specific area over time.

Planet’s data covers the entire Earth at least once per day, and includes even areas of the planet not typically included in Earth observation passes by other satellites and providers, like the Arctic. Its frequency, along with its coverage and degree of detail, all combine to make it a valuable resource to anyone conducting Earth science work, which means it’s very good news that it’s now available to hundreds more scientists working on dozens more projects.

Verizon is buying B2B videoconferencing firm BlueJeans

Published April 16, 2020

US carrier Verizon* has splashed out to buy veteran B2B videoconferencing platform, BlueJeans Network — shelling out less than $500 million on the acquisition, according to the Wall Street Journal which first reported the news.

A Verizon spokeswoman confirmed to TechCrunch that the price-tag is sub-$500M but did not provide a more exact figure. Videoconferencing platform Blue Jeans has raised ~$175M since being founded around a decade ago, per Crunchbase, with US investor NEA leading a Series E round back in 2015.

In a press release announcing the deal, Verizon said it has entered into a definitive agreement to acquire the enterprise-grade videoconferencing and event platform in order to expand its “immersive unified communications portfolio”.

“Customers will benefit from a BlueJeans enterprise-grade video experience on Verizon’s high-performance global networks. In addition, the platform will be deeply integrated into Verizon’s 5G product roadmap, providing secure and real-time engagement solutions for high growth areas such as telemedicine, distance learning and field service work,” it wrote.

“As the way we work continues to change, it is absolutely critical for businesses and public sector customers to have access to a comprehensive suite of offerings that are enterprise ready, secure, frictionless and that integrate with existing tools,” added Tami Erwin, CEO of Verizon Business, in a supporting statement. “Collaboration and communications have become top of the agenda for businesses of all sizes and in all sectors in recent months. We are excited to combine the power of BlueJeans’ video platform with Verizon Business’ connectivity networks, platforms and solutions to meet our customers’ needs.”

The acquisition comes at a time when videoconferencing is seeing a massive uptick in usage as white collar workers around the world log on to meetings from home during the coronavirus pandemic.

Although it’s BlueJeans’ rival, Zoom, that’s been the most high profile name linked to the viral videoconferencing boom in recent weeks. The latter recently revealed that daily meeting participants on its platform jumped from a modest 10M in December to 200M in March.

However such booming growth and consumer usage has brought increased scrutiny for Zoom — leading to a spate of warnings (and even some bans), related to security and privacy concerns. And earlier this month the company said it would freeze product dev to focus on the laundry list of issues that have surfaced as users have piled in and kicked its tires, taking a little of the shine off of surging growth.

On the sheer usage front BlueJeans is certainly small fish in comparison to Zoom — having remained b2b focused. A BlueJeans spokeswoman told us it has more than $100M ARR and over 15,000 customers at this point. (Some notable users include Facebook and Disney.)

But it’s paying users that are likely of most interest to Verizon, hence talk of telemedicine, distance learning and field service work — areas ripe for coronavirus-accelerated digitization. Carriers generally, meanwhile, haven’t been able to translate increased usage during the pandemic into a revenue growth story — as a result of a combination of fixed costs, debt and market disruption that’s been hitting their shares during the coronavirus crisis, per Reuters. Bolting on more b2b tools looks to be one way of growing network revenues.

“The combination of BlueJeans’ world class enterprise video collaboration platform and trusted brand with Verizon Business’ next generation edge computing innovation will deliver highly differentiated and compelling solutions to our joint customers,” said Quentin Gallivan, BlueJeans CEO, in a statement. “We are very excited about joining the Verizon team and we truly believe the future of business communications starts today!”

Verizon said today that said BlueJeans founders and “key management” will join the company as part of the acquisition, with BlueJeans employees set to become Verizon employees immediately following the close of the deal — which is expected in the second quarter, pending customary closing conditions.

BlueJeans co-founder Krish Ramakrishnan has a history of exits, selling a couple of his previous startups to networking giant Cisco — where he has also worked, in between spinning out his own companies.

*Disclosure: Verizon is also TechCrunch’s parent company

Anodot grabs $35M Series C to help monitor business operations

Published April 16, 2020

Anodot, a startup that helps customers monitor business operations against a set of KPIs, announced a $35 million Series C investment today.

Intel Capital led this round with a lot of help. New investors SoftBank Ventures Asia, Samsung NEXT and La Maison also participated along with existing investors Disruptive Technologies L.P., Aleph Venture Capital and Redline Capital. Today’s investment brings the total raised to $62.5 million, according to the company.

Anodot lets you take any kind of data, whatever your company finds important, and it tracks it automatically and reports on changes that would have an impact on the business, according to David Drai, CEO and co-founder.

“We take any kind of normalized data into our platform and learn all the behavior of the data against normal behavior. When I say normal behavior, it means any time-based data in what is called a time series. And we understand all the trends of that data, and we do this autonomously without any configuration, except defining what is interesting for you,” Drai explained.

That means that the platform will let you know, for example, of any drop in your business, any drop in your conversions, any spike in your costs — and so forth. What you track depends on your vertical and what’s important to your business.

He compares it to applications performance monitoring, but instead of monitoring the company’s technology systems, it’s monitoring the systems that run the business. Just as you don’t want to miss signals that your servers could be going down, neither do you want to let factors that could cost your business money go unnoticed.

This dashboard lets you monitor unusual changes in cloud costs. Image Credit: Anodot

The way it works is you connect to the systems that matter, and Anodot can review those systems, learn what constitutes a level of normal behavior, then identify when anomalies occur. It does this by mapping against your KPIs, and this can involve thousands or even tens of thousands of KPIs based on an individual company.

As Drai points out, an eCommerce company with 1000 products in 50 countries, will have 50,000 KPIs, one for each product in each country, and you can track these in Anodot.

He says that under the current economic conditions, he is taking a two-pronged approach to building his business involving both offense and defense. On defense, he will take a cautious approach to hiring, but he sees his product helping companies understand and control costs, so he will continue to sell the product as a cost-saving device at a time when that is of increasing importance to businesses everywhere.

The company was founded in 2014. It currently has 70 employees and 100 paying customers including Atlassian, T Mobile, Lyft and Pandora.

VAST Data lands $100M Series C on $1.2B valuation to turn storage on its head

Published April 16, 2020

VAST Data, a startup that has come up with a cost-effective way to deliver flash storage, announced a $100 million Series C investment today on a $1.2 billion valuation, both unusually big numbers for an enterprise startup in Series C territory.

Next47, the investment arm of Siemens, led the round with participation from existing investors 83North, Commonfund Capital, Dell Technologies Capital, Goldman Sachs, Greenfield Partners, Mellanox Capital and Norwest Venture Partners. Today’s investment brings the total raised to $180 million.

That’s a lot of cash any time, but especially in the middle of a pandemic. Investors believe that VAST is solving a difficult problem around scaled storage. It’s one where customers tend to deal with petabytes of data and storage price tags beginning at a million dollars, says company founder and CEO Renen Hallak.

As Hallak points out, traditional storage is delivered in tiers with fast, high-cost flash storage at the top of the pyramid all the way down to low-cost archival storage at the bottom. He sees this approach as flawed, especially for modern applications driven by analytics and machine learning that rely on lots of data being at the ready.

VAST built a system they believe addresses these issues around the way storage has traditionally been delivered.”We build a single system. This as fast or faster than your tier one, all-flash system today and as cost effective, or more so, than your lowest tier five hard drives. We do this at scale with the resilience of the entire [traditional storage] pyramid. We make it very, very easy to use, while breaking historical storage trade-offs to enable this next generation of applications,” Hallak told TechCrunch.

The company, which was founded in 2016 and came to market with its first solution in 2018, does this by taking advantage of some modern tools like Intel 3D XPoint technology, a kind of modern non-volatile memory along with consumer-grade QLC flash, NVMe over Fabrics protocol and containerization.

“This new architecture, coupled with a lot of algorithmic work in software and types of metadata structures that we’ve developed on top of it, allows us to break those trade-offs and allows us to make much more efficient use of media, and also allows us to move beyond scalability limits, resiliency limits and problems that other systems have in terms of usability and maintainability,” he said.

They have a large average deal size; as a result, the company can keep its cost of sales and marketing to revenue ratio low. They intend to use the money to grow quickly, which is saying something in the current economic climate.

But Hallak sees vast opportunity for the kinds of companies with large amounts of data who need this kind of solution, and even though the cost is high, he says ultimately switching to VAST should save companies money, something they are always looking to do at this kind of scale, but even more so right now.

You don’t often see a unicorn valuation at Series C, especially right now, but Hallak doesn’t shy away from it at all. “I think it’s an indication of the trust that our investors put in our growth and our success. I think it’s also an indication of our very fast growth in our first year [with a product on the market], and the unprecedented adoption is an indication of the product-market fit that we have, and also of our market efficiency,” he said.

They count The National Institute of Health, General Dynamics and Zebra as customers.

Airwallex gets $160 million Series D to launch more cross-border financial products

Published April 15, 2020

Airwallex, a Melbourne-based cross-border financial startup that achieved “unicorn” status last year, announced today that it has raised a $160 million Series D. The round included ANZi Ventures, the investment arm of ANZ Bank, and Salesforce Ventures, along with returning investors DST Global, Tencent, Sequoia Capital China, Hillhouse Capital and Horizons Ventures.

Founded in 2015, the company’s financial services include foreign currency accounts that let businesses receive money from around the world. Airwallex’s system uses inter-bank exchanges to trade foreign currencies at a mid-market rate and targets companies that do business in several different countries. The new funding will be used on potential acquisitions; expansion in American, European and Middle Eastern markets; and the launch of new products, including payment acceptance tools.

Airwallex reached a valuation of more than $1 billion last year when it closed its Series C funding, and has now raised a total of $360 million. Since that round, it has launched new operations in Tokyo, Bangalore and Dubai, and introduced products including Airwallex Borderless Cards in partnership with Visa and integration with accounting platform Xero. The company also now offers an API that enables companies to issue their own virtual cards.

In a press statement, Salesforce Ventures’ head of Australia Rob Keith said, “Being able to transact and do business with customers all over the world is a key criteria for companies who are going through a digital transformation. We’re excited to partner with Airwallex at this critical time in its growth, expanding both its footprint globally and its product capabilities.”

Other startups that have also raised funding to help small to medium-sized businesses deal with the challenges of doing trade in different currencies include Brex, another unicorn, and Hong Kong-based Neat.

Unicorn layoffs keep piling up as the economy gets worse

Published April 15, 2020

Earlier today a grip of new data presented a sharply negative picture of the American economy. And this afternoon, news broke that a trio of well-known, heavily-backed unicorns were cutting staff.

With stocks down as well, we’ve received negative signals from the private market, the public market and the economy as a whole in the same day. Let’s take a minute to set the macro stage, and then go over the latest cuts from Carta (first reported by Bloomberg), Zume (Business Insider broke that particular story) and Opendoor (via The Information).

Economic malaise

The backdrop for today’s cuts is a faltering American economy. A glance at recent news is sufficient. In the last few hours, home builder confidence recorded the “biggest drop in history,” while retail sales fell 8.7% in March, what CNBC noted was “the most ever in government data,” and CNN Business reported that American factories’ output fell 5.4% in March, “their steepest one-month slowdown since 1946.”

It’s perhaps no surprise, then, that we’ve seen unicorn layoffs all year. In January the news was Vision Fund-backed companies cutting burn to skate closer to profitability. Then, the first round of COVID-19-forced staff cuts landed at big companies; firms like Bird and TripActions slashed staff as their companies were rent by a slowdown in their core operations by the pandemic and its related economic and social changes.

Slimmer cuts at smaller companies have happened on a nearly chronic basis, something that TechCrunch has covered, as well.

As stocks recover, private investors aren’t buying the hype

Today, however, saw three cuts from three unicorns (private companies worth $1 billion or more) that have long been objects of TechCrunch’s attention. So, let’s talk about them briefly:

Opendoor, a San Francisco-based home sales-focused startup with backing from SoftBank, announced deep cuts to its staffing today. In a statement provided to TechCrunch, the company’s CEO Eric Wu said that 35% of its employee base would be eliminated to “ensure that we can continue to deliver on our mission.” The CEO also said that exiting staff would get paid for eight weeks and “reimbursement of 16 weeks of health insurance coverage.” Wu is also donating his 2020 salary to a fund to support staff. Opendoor was most recently valued at $3.8 billion in a $300 million funding round announced last March.
Carta, a San Francisco-based private company equity service platform, announced cuts worth 16% of its staff, or 161 roles, according to a memo that the company shared publicly. Previously eShares, Carta has grown from a provider of equity management for small private companies into a larger, broader service and software play supporting yet-private firms. Carta most recently raised $300 million at a $1.7 billion valuation last May.
And finally, Zume. Zume didn’t respond to a request for comment by the time of publication and did not post a public note that we could find. Still, Business Insider reports that the company is cutting 200 more staff after earlier 2020 personnel reductions. The firm will be left with around 100 employees, working on compostable boxes. Zume last raised $375 million at a valuation of just under $1.9 billion (post-money) in November 2018.

It’s getting hard to keep track of all the cuts. Heck, I helped break Modsy layoffs recently with TechCrunch’s Natasha Mascarenhas, and we were first to the BounceX cuts as well. It’s a rough, bad economy, and it’s harming growth-oriented companies that like startup unicorns.

More when we have it, probably sooner than we’d like to report.

The second wave of unicorn layoffs is brutal

Punitive liquidation preferences return to VC — don’t do it

Published April 15, 2020

Pascal Levensohn
Contributor

Pascal Levensohn is a San Francisco-based venture capitalist with over 25 years of VC experience through Levensohn Venture Partners and Dolby Family Ventures. He is a former director of the National Venture Capital Association.