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Worried about a ‘no deal’ brexit? UK startups should check this guide

UK startups concerned the country is about to leave the European Union in just a little over a month’s time with nothing agreed to ensure a smooth transition should point their eyes at this guide — put together by startup policy advocacy group, Coadec.

While a ‘no deal’ brexit is still not inevitable the chances of it happening have stepped up sharply in recent months as the clock winds down towards exit day with no withdrawal agreement in place. Such an outcome has major implications for technology businesses, given the cross-border nature of services startups tend to provide.

“With the UK potentially just over a month away from exiting the EU, no deal remains the default option,” warns Coadec. “We are clear that no deal would be disastrous for the startup community…but that doesn’t mean that it won’t happen. That’s why we have teamed up with the UK Tech Cluster Group & Tech Nation to put together this guidance for the startup community.”

Under current prime minister, Boris Johnson, the UK government has sharply dialled up the brexit rhetoric. Johnson has said — in typical flashy fashion — that he’d rather be “dead in a ditch” than ask for an extension to the October 31st deadline for agreeing a deal with the European Union.

He has also prorogued parliament — illegally — in an attempt to bypass parliamentary scrutiny, which he described in an internal memo as “a rigmarole“.

The prorogation was quashed by the Supreme Court. But since parliament resumed this week ministers have been refusing to clearly state whether the government will abide by a law it passed just before it got closed down — which requires the PM to ask the EU for an extension if he fails to secure a withdrawal deal before October 19.

Speculation is therefore rife over what political chicanery the government might seek to pull to wiggle out of complying with the law and crash the UK out regardless.

Former UK prime minister, John Major, gave a speech this week warning that such a move would be unforgivable. But there are no signs the government is rethinking its approach.

Johnson has been splashing public money on an advertising campaign that instructs the country to “Get ready for brexit” (such as the billboard pictured above). The government also claims to have substantially ramped up domestic preparations for a no deal exit.

While it’s possible this loud show of bullying bravado is a theatrical tactic to try to pressure the EU into shifting position on contested brexit issues (primarily the Irish back-stop) — so Johnson can grab a deal which could pass a vote in parliament — it’s also possible the government isn’t that interested in a deal, and just wants to deliver brexit “do or die”, as the PM has also put it.

Even if it’s theatrics it doesn’t mean the whole high stakes game of chicken might not backfire — resulting in the UK actually crashing out with nothing on Halloween. The only robust legal certainty is that without an extension to Article 50 the UK will indeed leave the EU on October 31, deal or no deal.

Given rising political turmoil in the UK combined with a hard and fast-approaching brexit deadline, startups are well advised to prepare for the worst — which means leaving the EU with no contingencies in place beyond those you’ve put in place yourself.

Coadec’s guide presents a concise overview of ten issues the policy advocacy group believes should be front of mind for startups and scaleups thinking about how to manage no deal risk.

The guide does not (and is not intended) to replace professional legal advice but it does cuts through a lot of the noise and fuzz around brexit — so it’s well worth a read, especially if you’re trying to get up to speed fast.

Top of their list is data flows — a major consideration for tech businesses that receive personal data from the EU or EEA.

“Startups will need to create contract-based legal structures to replace the free flows of data we took for granted under the European system,” Coadec writes, noting that the UK’s data protection agency is advising startups to look at model clauses, binding corporate rules, codes of conduct or certification mechanisms as alternatives for their data flows.

“These complicated legal structures have typically been the preserve of larger businesses and corporations, not startups and scaleups — so will take time to put in place,” it warns. “If you haven’t started preparations for your post-brexit data flows, they should be a priority now.”

Other issues the guide deals with include immigration & visas; taxation & VAT; and the impact of a no deal on specific pieces of EU legislation and strategy that are relevant to startups — such as the e-Commerce Directive and Digital Single Market — as well as related pieces of legislation (such as ePrivacy) that risk being caught in limbo by brexit as they’ve not yet been passed.

There’s also advice for startups that have .eu domain names, and for those who’ve received funding from the EU’s Horizon 2020 R&D fund, as well as links to relevant government resources.

The guide can be downloaded as a PDF here.

How is your startup preparing for brexit? What’s your biggest ‘no deal’ concern? How much is it costing you to manage brexit risk? Let us know by emailing tips@techcrunch.com 

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Why startups exhibit in Startup Alley at Disrupt Berlin 2019

If you’re the founder of an early-stage startup, listen up. One of the best ways you can introduce your innovative company to the international tech community is to exhibit in Startup Alley at Disrupt Berlin 2019 on 11-12 December.

There are plenty of reasons to exhibit, but here’s the first thing you need to know. You have two ways to exhibit in Startup Alley. You can simply purchase a Startup Alley Exhibitor Package OR you can apply to our TC Top Picks program and win a Startup Alley Exhibitor Package and a VIP experience (more on that in a minute).

As an exhibitor, you’ll receive three Founder passes, access to programming on all stages (including the Startup Battlefield competition, speakers, interactive workshops and Q&A Sessions), the complete attendee list via Disrupt Mobile App, CrunchMatch — TechCrunch’s free networking platform, the complete press list, entrance to networking parties and exclusive video content access once the conference ends.

Exhibiting gives you prime exposure as thousands of Disrupt Berlin attendees — including 200 media outlets — from more than 50 countries explore Startup Alley to meet and greet the latest startups, sniff out emerging trends and network for potential partners, investment possibilities, collaboration and connection.

Here’s how one co-founder, David Hall of Park & Diamond, describes his Startup Alley experience:

Exhibiting in Startup Alley is the best training ground for early-stage startup founders, and it was a game-changer for us. We received more insight into our product development process, and we engaged with media and potential investors. It’s a tremendous opportunity to grow.

Now, let’s talk about the TC Top Picks. The application deadline is 1 October at 12 p.m. (PST). You’re eligible if your startup falls into one of these tech categories: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, CRM/Enterprise and Education.

If you’re selected (TC editors will choose up to five startups in each category), you’ll exhibit for free one day and you’ll be interviewed by a TechCrunch editor live on the Showcase Stage. We’ll record that interview and promote it on our social media platforms.

Luke Heron, co-founder and CEO of TestCard, exhibited in Startup Alley as a TC Top Pick at Disrupt Berlin 2018 and hoped to cultivate relationships with investors. It seems, by the email he sent to TechCrunch editors, that his time exhibiting in Startup Alley was well spent:

We just closed $1.7m in funding in large part to you and your team,” Heron wrote. “You guys are fantastic — the lifeblood of the startup scene.

Whether you’re looking for founders or funders, collaboration and connection or publicity and promotion, you’ll find it, and a ton of opportunity, in Startup Alley.

Join us and the international startup community at Disrupt Berlin 2019 on 11-12 December. Buy a Startup Alley Exhibitor Package or apply to TC Top Picks today.

Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact TechCrunch’s sponsorship sales team by filling out this form.

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One day left to get featured at TechCrunch Disrupt Berlin’s Startup Battlefield

Founders. The clock is ticking. Applications for Startup Battlefield at Disrupt Berlin 2019 are closing in just about 24 hours.

On December 11-12, TechCrunch will feature the top early-stage startups from around the world in the most renowned onstage pitch competition in the world — Startup Battlefield. Companies are battling for $50,000 in equity-free prize money, the infamous Disrupt Cup and the attention of press and investors from around the world.

You’ll join a group of highly successful Startup Battlefield alumni, including N26, JukeDeck, Dropbox, Getaround, Mint.com and more. Altogether, the 857 companies that have launched with Startup Battlefield have raised over $8.9 billion in funding, with 113 successful exits (IPOs and acquisitions).

It’s simple. Startups from any part of the world and any industry can apply. Companies must be early-stage, pre-major publicity and have a minimally viable product to demo live on stage. TechCrunch editors review the applications and select the top 3-5% of companies that apply — more competitive than college!

After being selected, founders will go through a mini-accelerator with the Startup Battlefield team, where we will train you on your pitch, go-to-market strategy and onstage talent, and set you up for the biggest, most public launch on the largest tech stage in the world. Teams pitch for six minutes, including a live demo, followed by a six-minute Q&A with our esteemed judges — VCs, angels and heads of major companies.

If you make it to the final round, you simply pitch onstage again with the same pitch in front of a brand new set of judges. These judges debate and decide the final winner of the competition and the startup that gets to bring home $50,000 and the Disrupt Cup.

Participating in Startup Battlefield gets you a whole suite of perks. We’re talking free exhibition space in Startup Alley for both days of Disrupt, invitations to private events, backstage access, CrunchMatch — our free business-matching platform — free subscriptions to Extra Crunch and a ticket to all future TechCrunch events. That’s some major value right there.

There’s nothing to lose, and everything to gain. Stop procrastinating — apply to Startup Battlefield today. We want to see you in Berlin!

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Latin America roundup: SoftBank bets on Brazilian unicorns and Konfio raises $250M for lending plans

Sophia Wood
Contributor

Sophia Wood is a Principal at Magma Partners, a Latin America-focused seed-stage VC firm with offices in Latin America, Asia, and the U.S. Sophia is also the co-founder of LatAm List, an English language Latin American tech news source.

SoftBank did not let up the flow of capital to Brazil this month, staying busy despite the WeWork debacle. With two more $100 million-plus rounds in QuintoAndar and MadeiraMadeira, the Japanese investor has funded at least one more unicorn in the Brazilian ecosystem. Their investments in Brazil from the past two months alone far outstrip Latin America’s venture capital funding in all of 2016.

In early September, SoftBank backed QuintoAndar for a $250 million Series D round alongside Dragoneer, General Atlantic and Kaszek Ventures, which recently made headlines for raising $600 million to invest in Latin America. QuintoAndar is a real estate rental startup that simplifies the process of locating and renting an apartment in Brazil. Although the startup only has 2% of the rentals market share in Brazil, QuintoAndar’s tech solution enabled them to scale rapidly, beating out traditional incumbents in the region’s bureaucratic rental structure.

QuintoAndar’s founders ideated the business model while they were struggling to find an apartment in São Paulo after finishing their MBAs at Stanford. They have seen property rentals grow 5x on their platform since raising a $70 million Series C just nine months ago.

SoftBank stayed bullish in Brazil with a $110 million investment in home goods marketplace Madeira Madeira, which has been described as the “Wayfair of Brazil.” This drop-shipping business has grown to sell thousands of products online with a relatively capital-light model that connects buyers directly with warehouses, saving on overhead costs. The SoftBank investment dwarfs all of Madeira Madeira’s previous capital raised — $38.8 million — by almost a factor of three.

Madeira Madeira plans to use the capital to expand across Latin America, as well as improve logistics and customer service.

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David Arana, Konfio founder and CEO

Mexico’s Konfio receives $250 million credit line from Goldman Sachs, Victory Park Capital

Konfio provides unsecured loans to small and medium businesses in Mexico that are currently underserved by the traditional banking sector. Goldman Sachs contributed up to $100 million in secured credit to Konfio to allow them to make up to $250 million in loans to 25,000 companies over the next 12 months. Victory Park Capital also contributed to this debt round, bringing Konfio’s total raised to $43 million in equity and $260 million in debt.

This capital mints Konfio as one of the largest fintech startups in the region. It will also allow them to take on larger loan sizes. Konfio’s average loan size hovers around $20,000. Konfio uses credit ratings to calculate risk and disburse loans within 24 hours, and at half the rate of a traditional bank loan.

To date Konfio has served over 1 million clients in what is currently a $100 billion market in Mexico. Mexico’s access to credit is still significantly lower than the rest of Latin America, so Konfio is well-placed to grow within this market, especially with this new funding.

Klar, Mexico’s newest challenger bank, raises $57.5 million from U.S. investors

Mexican challenger bank Klar, a Chime clone, recently raised over $57.5 million in debt and equity in one of Mexico’s largest seed rounds. The $50 million credit line came from San Francisco’s Arc Labs, while Quona Capital led the $7.5 million equity round with support from Santander InnoVentures, aCrew Capital, FJ Labs and Western Technology Investment.

Klar was founded less than 10 months ago to help Mexicans access free and fair financial services through digital banking. Currently Klar offers a debit and a credit product with transparent fees; today, only 15% of Mexicans have access to credit cards, most of which have +60% interest rates and a lot of hidden fees. Klar wants to make banking accessible for everyone in Mexico through their free digital platform.

This startup will be one to watch over the coming months as it competes with Nubank and other local neobanks to bank Mexico’s unbanked.

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U.S. and Mexican investors back Flat, an Opendoor clone in Mexico

Mexican property-tech startup Flat is taking the Opendoor model to Latin America. This startup raised an unprecedented $4.6 million in their pre-seed round led by ALL VP, with support from Liquid2 Ventures, Next Billion, Picus Capital and angels.

Besides Mexican e-scooter giant, Grin, Flat’s pre-seed is the largest ever for Mexico. Flat’s founders, Victor Noguera and Bernardo Cordero, are betting on a $25 billion home sales market in Mexico that is currently stuck in the 20th century. Flat will allow homeowners and buyers to gain access to accurate information about home prices (think Zillow in the U.S.), as well as managing the slow process of notarizing the purchase after the fact. With Flat, the startup manages everything from valuation to ownership transfer, all through their platform, and within 72 hours of purchase.

Flat will use this investment to vertically integrate within the Mexican market, rather than expanding across Latin America.

News and notes: Mexican fintechs in focus, more VC funds opening in LatAm

  • Other deals in September included Mutuo Financiera’s $100 million credit facility granted by Crayhill Capital Management, a New York-based alternative asset management firm, at the beginning of the month. Mutuo Financiera is a vehicle fleet leasing company that focuses on clean energy transportation. The investment will help the startup acquire new compressed natural gas vehicles to serve increased demand in Mexico for clean transportation alternatives.
  • Brazilian growth-stage VC fund Base Partners closed a further $135 million to invest in scaling Latin American startups. The fund, founded by Fernando Spnola and Arthur Mizne and backed by over 43 limited partners, has previously invested in companies like ByteDance and Stripe, recently crowned the U.S.’ third most valuable startup. Base Partners will now compete against investment giants like Kaszek and SoftBank to participate in Latin America’s top expansion stage deals.
  • Mexico’s Credijusto, which offers asset-backed loans and equipment leases to SMEs, raised their Series B this month, topping $42 million led by Goldman Sachs and Point72 Ventures. Credijusto has processed more than $90 million in loans since they were founded in 2015 and closed a $100 million credit agreement with Goldman Sachs just months before this round.
  • Looking ahead to October, SoftBank is said to be evaluating several investments in Brazil and will likely continue deploying capital rapidly in Latin America’s largest market. We may see a few more unicorns in Brazil before the year is out. It is also likely that the Innovation Fund will make its way out of Brazil to other big markets like Colombia or Mexico, where SoftBank has invested in the past.
  • Accion Venture Lab launched a social impact fund and Ewa Capital began raising capital for a female-focused fund in September, so hopefully investment in female founders and inclusive tech will rise in coming months.
  • Mexico’s Square clone, Billpocket, also recently announced an undisclosed round from Axon Capital Partners. Billpocket has been accelerating e-payments in Mexico at a triple-digit pace since it started, carving out a name for itself in a competitive space where incumbent Clip has already received funding from SoftBank.

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At the sixth annual Pear Demo Day, weather balloons, branded credit cards and lots of top degrees

Pear, a Palo Alto-based seed-stage fund that has made its name through early bets on Guardant Health, DoorDash, Memebox and Gusto, hosted its sixth annual demo day this week in what proved to be a scorchingly hot afternoon in Woodside, Calif. — not that invitees were put off by the heat.

Hundreds of investors showed up at a sprawling public estate and surrounding gardens to see the dozen teams that Pear spent the summer working with, each of them less than nine months old, according to Pear, and many incorporated only in recent months. (Each has also only received less than $200,000 so far from Pear, and no other institutional investment.)

While some are sure to evolve into other ideas or dissolve into other endeavors, the whole of the group gave those gathered food for thought and a first look at some very solid talent.

Following are the companies that presented:

1) Windborne: Founded by three Stanford grads and another from Harvard, this startup aims to improve the accuracy of weather data where it’s currently limited, like over oceans, by using weather balloons that could allow the team to do things like tell shipping companies which route to take to minimize fuel burn. CEO Paige Brown also says their system can fly 60 times longer than existing solutions and for the same price. The more specific claim: that in a single $350 flight, a Windborne balloon can fly for more than five days and travel a quarter of the way around the world, collecting direct measurements in places no one else can.

The team apparently bonded as engineers in the Stanford Student Space Initiative and they’ve all worked at SpaceX.

Windborne

2) Guild: This one was started by two Stanford grads and helps companies make branded credit cards. Why would they bother? Because, the startup claims, branded credit cards are a lot more lucrative — increasing spending by 20%, cutting churn by roughly half and generating $50 per year of profit per customer. Co-founder Michael Spelfogel says he knows of which he speaks, having tried, unsuccessfully, to launch a branded credit card while at Lyft.

He also says the idea is to partner with sports teams first.

Guild

3) Polimorphic: Started by two computer scientists out of MIT, this startup is building a “civic media platform” meant to help politicians communicate with constituents. The platform basically invites visitors to express their views directly to their political and government leaders, while it also gives campaigns, civic groups and governments a way to engage with those individuals (though the latter has to pay to do this). It’s a meaningful market, they argue, saying that campaign spending has been growing by 50% in between major election cycles, with $9 billion spent in 2016 alone.

Of course, because this was a demo day, the founders also talked about their traction, saying they already have three letters of intent, and volunteering that they’re in early talks with three presidential campaigns.

Polimorphic

4) Gradio: Launched by graduates of Stanford, Georgia Institute of Technology, NYU and MIT, Gradio says it speeds up the process of collecting and labeling data for use with AI and machine learning. The “Gradio data engine” corrects mislabeled data, identifies and removes “low value” data and highlights the highest-value data. It’s a smart pitch, considering that acquiring and labeling data right now requires tons of human labor and often requires pricey domain expertise and that, even so, something like one if five data points is mislabeled at a typical AI company.

As for who will use the technology, the founders say they’re targeting companies in the natural language processing space first.

Gradio

5) Sympto Health: Launched by two founders from UC San Diego (one who graduated, one who dropped out to build Sympto), this startup is trying to tackle a universal problem, which is that patients very often forget clinical instructions, and when that happens, they sometimes wind up being readmitted to the hospital.

Sympto ties into a care facility’s existing systems/workflows and sends “patient engagement” messages — things like surgery checklists, pre-appointment questionnaires, etc. — to minimize missed information and unnecessary readmissions. It says its patient-as-an-engagement service has already landed the company two enterprise contracts worth $300,000, too.

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6) Smarty: This startup was founded by a single person with multiple degrees (HBS, MIT) who previously worked as a software engineer at Yammer.

What she has built: an automation tool that’s focused on business tasks like scheduling meetings, making introductions and finding flights for out of town meetings. The tool is being made available first to users of G Suite and Office 365 (which have 200 million paying users, combined); they’ll be asked to pay Smarty $20 a month for its workflow automation tool. Eventually, though, it aims to be its own client.

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7) Impct: Started by two MBAs from National Chengchi University and another from Stanford, Impct is making what it called snacks for good. It’s not that they’re more healthful than other options; instead, the idea is for companies to buy these white-label snacks for their offices, then re-invest a percentage of their sales into social responsibility programs chosen by employees. The thinking is that employees want their kombucha; why not spend on snack bars and drinks that give back?

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8) Learn to Win: Started by two Stanford MBAs who say traditional learning management systems fall short of the needs of high-performance teams, Learn to Win is a “micro learning” training program that’s right now being used by 100 sports organizations; it also has a signed contract with the Air Combat Command to train fighter pilots.

What the program ostensibly offers: content that’s presented in a visual and easy-to-use content authoring engine, the ability to deploy mobile active learning content to users, and and the ability to quickly evaluate results and iterate.

Next on the startup’s to-do list: enticing other entities with training challenges, including in the commercial airline industry, at oil and gas companies and within police and fire departments.

Screen Shot 2019 09 26 at 1.25.01 PM

9) Fanimal: Founders with degrees from Stanford, Columbia University and UC Berkeley (and who’ve worked at Boston Consulting Group, Gunderson Dettmer and Hackbright Academy) decided to come together to tackle two annoying problems associated with buying tickets for live events: high fees, and that feeling when you buy tickets for a group of people . . . then need to chase them down for reimbusement.

With Fanimal, everyone in a social group pays individually and receives their own tickets, and there are no hidden fees. Instead, Fanimal makes money by adding a “small markup” to tickets. Since launching a few weeks ago, they’ve sold more than $31,000 in tickets.

Screen Shot 2019 09 26 at 1.30.30 PM

10) Xilis: A Stanford PhD and a PhD from UNC Chapel Hill (both now Duke University professors focused on oncology and precision health) came together for this company out of their acute awareness that when someone is diagnosed with cancer, finding the right treatment frequently takes months and often comes with countless side effects. To speed along the process, their company, Xilis, uses “micro-organoids” to make thousands of 3D replicas of a patient’s tumor in about six days, which the company says can be used for testing for drug compatibility faster.

They say it works, too. At least, the co-founders, Xiling Shen and David Hsu, claim they’ve tested the technology with 12 patients, with a 100% success rate in predicting how a tumor will respond to medication.

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11) Equipped: Founded by two Stanford grads who’ve worked variously for the NBA, Tesla and Amazon, Equipped has an interesting proposal. What if instead of lugging an oversized umbrella to the beach or bringing a soccer ball to the park, you could get these things where they make sense, in on-demand equipment lockers at the beach, or outside a park, where you could rent what you need, then return it?

Nike seems to like the idea. CEO Dan Mandelman says the sports retail giant is paying them $200,000 for six lockers in LA, with the cities of Burlingame, San Ramon and Redwood City currently implementing pilot programs.

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12) Maker: Two Stanford MBAs with marketing and management consultant experience have created a marketplace for small-batch wines.

Maker finds small/independent wineries, cans their product under the Maker label, then delivers to the end customer.

Screen Shot 2019 09 26 at 1.58.41 PM

By the way, you can get a flavor for Pear’s demo day here if you’re curious.

 

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‘We are seeing volume and interest in Peloton explode,’ says company president on listing day

This morning, Peloton (NASDAQ: PTON), the tech-enabled stationary bicycle and fitness content streaming company, raised $1.2 billion in its NASDAQ initial public offering. Despite dropping more than 10% in its first day of trading — ultimately closing down 11% at $25.84 per share — the IPO was a bona fide success. Peloton, once denied (over and over again) by VC skeptics, now has hundreds of millions of dollars to take its business into a new era. One in which, the media, hardware, software, logistics and social company attempts to become a generation-defining company akin to Apple.

Founded in 2012 — six years after Soul Cycle opened its first cycling studio in New York’s Upper East Side and two years before a Soul Cycle founder, Ruth Zukerman, jumped ship to launch her own indoor cycling business, Flywheel Sports — a man by the name of John Foley made the ambitious, some might say foolish, decision to start a company that would sell these exercise bikes direct-to-consumer. That way, you could take a Soul Cycle class, in essence, in the comfort of your own home. Even better, technology would improve the experience.

As my colleague Josh Constine recently described it, these bikes come outfitted with a 22-inch Android screen, transforming an outdated exercising experience and bringing it into 2019: “It makes lazy people like me work out. That’s the genius of the Peloton bicycle. All you have to do is Velcro on the shoes and you’re trapped. You’ve eliminated choice and you will exercise,” Constine writes.

Peloton’s ability to get people exercise — a feature driven by its talented instructors (some of whom were poached from competitor Flywheel Sports) — ultimately had venture capital investors funneling $1 billion, roughly, into the business. Today, Peloton operates dozens of showrooms across the U.S., counts 1.4 million total community members — defined as any individual who has a Peloton account — and over 500,000 paying subscribers. Why? Because the company, as stated in its IPO prospectus, “sells happiness.”

“Peloton is so much more than a Bike — we believe we have the opportunity to create one of the most innovative global technology platforms of our time,” writes Foley. “It is an opportunity to create one of the most important and influential interactive media companies in the world; a media company that changes lives, inspires greatness, and unites people.”

Peloton Bike Lifestyle 04

Peloton’s flagship product, a tech-enabled stationary bike.

Peloton’s community coupled with the high margins on sales of its $2,245 bikes had the company reporting $915 million in total revenue for the year ending June 30, 2019, an increase of 110% from $435 million in fiscal 2018 and $218.6 million in 2017. Its losses, meanwhile, hit $245.7 million in 2019, up significantly from a reported net loss of $47.9 million last year.

What’s next for Peloton? The opportunities are endless, given the company’s firm seat at the intersection of hardware, software, media content and more. A third product may be in the works, expansion to international markets or new instructors. Peloton is going after a massive market ripe for disruption. What’s certain is that we’ll see a whole lot of cash flowing into fitness tech copycats in the next couple of years.

Peloton, following a number of lukewarm consumer IPOs (Uber), nearly doubled its valuation to $8.1 billion this morning after pricing its IPO at the top of its range, $29 per share. To answer some of our most burning questions, we chatted with Peloton’s president William Lynch, the former CEO of Barnes & Noble, about the float.

The following conversation has been edited for length and clarity.

William Lynch

Peloton president and former Barnes & Noble CEO William Lynch.


Kate Clark: What’s next for Peloton?
William Lynch: We now have over a billion in capital to fuel more growth, especially in the area of product innovation.

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Facebook tries hiding Like counts to fight envy

If their post has lots of Likes, you feel jealous. If your post doesn’t get enough Likes, you feel embarrassed. And when you just chase Likes, you distort your life seeking moments that score them, or censor it fearing you won’t look popular without them.

That’s why Facebook is officially starting to hide Like counts on posts, first in Australia starting tomorrow, September 27th. A post’s author can still see the count, but it’s hidden from everyone else who will only be able to see who but now how many people gave a thumbs-up or other reaction.

Facebook Hides Likes

The launch of the hidden Like counts test makes available what we reported Facebook was privately prototyping earlier this month, as spotted in its Android code by reverse engineering master Jane Manchun Wong. The test will run in parallel to Instagram’s own hidden Like count test we also scooped that first tested in Canada in April before expanding to six more countries in July.

“We are running a limited test where like, reaction, and video view counts are made private across Facebook” a Facebook spokesperson tells me. “We will gather feedback to understand whether this change will improve people’s experiences.” If the test improves people’s sense of well-being without tanking user engagement, it could expand to more countries or even roll out to everyone, but no further tests are currently scheduled.

Facebook’s goal here is to make people comfortable expressing themselves. It wants users to focus on the quality of what they share and how it connects them with people they care about, not just the number of people who hit the thumbs-up. The tests are being conducted by the News Feed team that falls under VP Fidji Simo’s jurisdiction over the main Facebook app. While the Instagram tests are starting to get data back, Facebook tells me it’s own tests are necessary since the apps are so different.

Facebook Like Counts

As you can see, the Like button itself remains visible to everyone. Comment counts will still be displayed, as will the most common types of reactions left on a post plus the faces and names of some people who Liked it. Technically viewers could go into the list of people who Liked a post and try to count, but the test stops Facebook from slapping people up front with insecurity.

Without a big number on friends’ posts that could make users feel insignificant, or a low number on their own posts announcing their poor reception, users might feel more carefree on Facebook. The removal could also reduce herd mentality, encouraging users to decide for themselves if they enjoyed a post rather than just blindly clicking to concur with everyone else.

As I wrote about 2 years ago, a collection of studies identify the harm Facebook can do. They found that while chatting with friends and comment threads on Facebook made people feel better, passively scrolling and Liking could lead to envy spiraling and declines in perception of well-being. Users would compare their seemingly boring life to the well-Liked glamorous moments shared by friends or celebrities and conclude they were lesser.

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For example, Krasanova et al discovered that 20% of the envy-inducing moments users experienced in life were on Facebook, and that “intensity of passive following is likely to reduce users’ life satisfaction in the long-run, as it triggers upward social comparison and invidious emotions.”

One concern is that Facebook Pages that have large followings and often get more Likes than individual users’ posts could miss out on extra engagement and reach without that herd mentality. Some Canadian influencers have complained about reduced reach since the hidden Likes test launched their on Instagram, but there’s been no conclusive data to prove that and Facebook will still use the number of Likes as part of its ranking algorithm.

If Facebook wants to build a social network people continue using for another 15 years, it has to put their well-being first — above brands, above engagement, and above ad dollars. It also needs better controls for notifications and warnings when you’ve been passively scrolling for too long. But if the Like hiding works and eventually becomes standard, it could help Facebook get back to the off-the-cuff sharing that made it a hit at colleges so long ago. No one wants to be in a life-long popularity contest.

Snapchat never had Likes. Come see my interview with Snapchat CEO Evan Spiegel at TechCrunch Disrupt SF (Oct 2nd-4th — tickets here) to learn more about how social networks are adapting to growing mental health concerns.

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MediaRadar’s new product helps event organizers maximize sales

MediaRadar CEO Todd Krizelman describes his company as having “a very specific objective, which is to help media salespeople sell more advertising” by providing them with crucial data. And with today’s launch of MediaRadar Events, Krizelman hopes to do something similar for event organizers.

These customer groups might actually be one and the same, as plenty of companies (including TechCrunch) see both advertising and events as part of their business. In fact, Krizelman said customer demand “basically pushed us into this business.

He also suggested that after years of seeing traditional ad dollars shifting into digital, “the money is now moving out of digital into events.”

If you’re organizing a trade show, you can use MediaRadar Events to learn about the overall size of the market, and then see who’s been purchasing sponsorships and exhibitor booths at similar events.

The product doesn’t just tell you who to reach out to, but how much these companies have paid for booths and sponsorships in the past, whether there are seasonal patterns in their conference spending and how that spending fits into their overall marketing budget — after all, Krizelman said, “In 2019, very few companies are siloed by media format as a buyer or a seller. Anyone doing that is putting their business at risk.”

He also described collecting the data needed to power MediaRadar Events as “much more complicated than we expected,” which is why it took the team two years to build the product. He said that data comes from three sources — some of it is posted publicly by event organizers, some is shared directly by the event organizers with MediaRadar and, in some cases, members of the MediaRadar team will attend the events themselves.

MediaRadar Events support a wide range of events, although Krizelman acknowledged that it doesn’t have data for every industry. For example, he suggested that a convention for coin-operated laundromat owners might be “too niche” (though he hastened to add that he meant no offense to the laundromat business).

In a statement, James Ogle — chief financial officer at Access Intelligence (which owns the LeadsCon conference and publications like AdExchanger) — said:

Hosting events and the resulting revenue that comes from them is a big part of our business. However, the event space is getting more and more crowded and also more niche. Relevancy equals value, so we want to make sure our attendees are within the right target market for our exhibitors. MediaRadar provides critical transparency into the marketplace.

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My Galaxy Fold display is damaged after a day

Samsung’s new rebooted Galaxy arrives this week with one job: it just needs to not break. I’d already spent thousands of words breaking down the ins and outs of the product the first time around. This round, on the other hand, was more about making sure everything worked.

Back in April, I was among the reviewers whose device worked perfectly well. I toted the original Fold around the Bay Area without a problem, much to the amusement of curious co-workers. Samsung collected the devices soon after, as it went back to the drawing board due to issues with other units, but mine remained fully in tact.

This time out, however, I wasn’t so lucky. I pulled the Fold from my pocket while standing in line at CVS after work the other day. I opened it up and spotted something new nestled between the lock screen’s flapping butterfly wings. There was a brightly colored, amorphous blob. You can see it there in the photo at the top of the story (as well as a zoomed-in version below). It’s not huge. It’s maybe just under a centimeter across — and it’s a bit tricky to photograph.

close fold

In the grand scheme of first-gen foldable display problems, this isn’t a huge one, judging by photos from those who’ve had issues with the first model. In that case, devices were sent back with an entire side blacked out (in many cases the result of peeling back a laminate that resembled the protective layer devices ship with). Still, it’s not a great look after about 27 hours with the device, considering that it wasn’t dropped on concrete, dunked in water or stepped on. And the placement smack dab in the center dampens the effect of a 7.3-inch screen.

If I had to guess, I’d say it was pressing the display to close the device that did it. Samsung has since collected the device and will be taking it apart (likely in Korea) to find out what went wrong. We’ll update accordingly.

We can’t say the company didn’t warn us. As I noted the other day, Samsung issued a video prior to launch, advising users to “Just use a light touch,” B/W the footnote, “Do not apply excessive pressure to it.” The Fold itself came with ample paperwork warning against:

  • Excessive pressure
  • Placing objects like keys on the screen before folding
  • Exposing the Fold to water or dust
  • Adding your own screen protector to the existing screen protector
  • Keeping the device next to easily deactivated objects like credit cards and implanted medical devices

There was nothing inside the device while folded. I didn’t get it wet or feed it after midnight, and there’s no visible damage to the laminate layer, so I can’t really say definitively what happened here. And while the screen is certainly still usable, I think I’d probably be…irked if I had just paid $2,000 for a handset and had to deal with a large, rainbow colored blob in the exact center of the screen.

Part of the white-glove service Samsung is rolling out here is a $149 screen replacement. We got a comment from Samsung on the matter, and it sounds like this particular issue might fall within normal use that wouldn’t require an additional fee. Here’s what the company has to say on the matter:

We have seen an enthusiastic response to the launch of the Galaxy Fold in several markets over the past few weeks, with thousands of consumers enjoying the unique experience it offers.

The Galaxy Fold is a first-of-its-kind device, made with new materials and technologies that allow it to open and close just like a book.

We encourage Galaxy Fold owners to read the care instructions included in the box and in the product manual available online. Products used within these guidelines are covered under warranty. If they have any questions, Galaxy Fold owners can consult with Samsung product specialists through the Galaxy Fold Premier Service any time, any day.

The “products used within these guidelines are covered under warranty” appears to be the pertinent bit here.

It’s hard to say how widespread these issues are. When the device officially goes on sale in North America on Friday, there will be significantly more of these in the wild, at which point we’ll know more definitively whether this was a very specific anomaly.

Anyone who reviews products for a living knows that these things can happen. I’ve had review headphones that sounded like electrified tin cans, only to swap them with the company for the real deal. Manufacturing defects can occur with review units and commercial products, alike. Generally, such things aren’t cause for concern (and manufacturing issues are usually covered by warranties), but in this case it’s certainly worth highlighting, given the first-gen product’s history with display issues.

We’ll certainly let you know how this shakes out and whether whatever conclusion Samsung ultimately reaches would fall under the warranty of the Fold’s fine print or whether users might want to budget an additional $149, just in case.

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App Annie acquires analytics firm Libring, bringing adtech-related insights to its platform

App Annie, a go-to source for mobile app market data and analytics, is expanding its platform with the acquisition of mobile analytics provider Libring. The deal will allow App Annie to present its mobile app market data side by side with advertising analytics data in order to paint a more complete picture of an app’s performance and revenue.

Already, App Annie customers leverage its platform to track key metrics related to their app’s growth and usage, like downloads, active users, retention numbers, demographics, rankings, reviews, competitive analysis and more. But the company said it heard from publishers and brands how it’s still difficult to analyze their user acquisition efforts, including their ad spend and related costs.

Screen Shot 2019 09 26 at 12.42.07 PMWith the addition of Libring, App Annie is integrating adtech insights into its platform.

This includes the ability to combine the ad spend and monetization insights from more than 325 data sources, including Supply Side Platforms (SSPs), Demand Side Platforms (DSPs), app stores and analytics platforms.

This data is then presented in a single dashboard so it’s easier to understand critical metrics — like the customer acquisition cost, the lifetime value, the return on ad spend and the return on investment.

It’s ideal for larger organizations that have outgrown the spreadsheet, as it’s been sort of the App Annie of revenue aggregation, so to speak.

“The most successful companies find a way to capitalize on mobile, yet they have been struggling to maximize its value to their business,” explained App Annie CEO Ted Krantz, in a statement about the acquisition. “Today, this requires custom work to stitch together multiple point solutions, spreadsheets, business intelligence teams, agencies and consultants. We are committed to solving this by applying data science and machine learning to automate these composite metrics for brands and publishers,” he said.

The deal comes at a time when mobile ad spend is continuing to grow rapidly — it’s expected to double to $375 billion globally by 2022, the company noted. It’s now a massive part of the overall app industry, at triple the amount of consumer spending on the app stores.

As a result of the deal, Libring’s 30-plus employees are joining App Annie.

In the near-term, Libring’s current customers will continue to use its product as they do today.

But App Annie tells us there’s only some overlap between the two companies’ respective customer bases. For now, App Annie will work with its customers who want to purchase the new analytics service and find out what sort of enhancements they are looking for in an analytics solution. Libring’s customers can also purchase App Annie’s analytics, if they choose.

Later, App Annie will migrate the Libring backend to the same infrastructure provider the rest of App Annie uses, and will then integrate the front-end so customers can log in and visualize the new analytics and other market data together. More information about how this will all work will be shared when those tools are closer to being available, which is still several months from now.

Going forward, App Annie says its data science team will also offer predictive and prescriptive insights based on the new data.

According to Libring’s website, its customers included SEGA, Slickdeals, Reddit, Jam City, Wooga, EA, Zynga, Next Games, Meet Me, GameInsight, Deviant Art, Webedia, Ubisoft, theChive, saambaa, badoo, textnow and others.

App Annie declined to disclose the deal terms.

Related to the changes and expansion, App Annie also today introduced a new brand that features a gem logomark. The gem is meant to be a tribute to mobile gaming and the idea of “leveling up” while also a reflection of the value of actionable data, the company says.

AppAnnie Rebrand Logo Lockups DARKBLUE 1

The acquisition comes on the heels of several notable milestones for App Annie, including the launch of a product development testing ground, App Annie Labs; plus the addition of mobile web analytics in March — the same time when App Annie passed $100 million in annual recurring revenue.

The company is soliciting feedback about its plans for Libring and will post updates about the project on App Annie Labs, it says.

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