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Expanse, which lets its customers know when their digital assets aren’t safe, has raised $70 million in new funding
Expanse, a six-year-old, San Francisco-based company that helps its clients understand and monitor what it calls their “global internet attack surface,” has received a $70 million vote of confidence from its earlier backers, as well as some notable individual investors.
Previous investor TPG Growth led the Series C round, with participation from other earlier investors that include NEA, IVP and Founders Fund. But the company also drew checks directly from Founders Fund co-founder Peter Thiel, Michael Dell, former IBM CEO Sam Palmisano, media entrepreneur Arianna Huffington and Turner Enterprise CEO Taylor Glover.
What do they find so interesting about Expanse, which was formerly known as Qadium? Its traction, for starters. It turns out that when you start indexing global internet protocol addresses before everyone else — meaning the numerical labels assigned to each device connected to a computer network — it’s hard for competitors to catch up.
Indeed, numerous big organizations, including CVS and PayPal, are among others that now use the company’s software-as-a-service to help manage their far-flung digital assets connected to the public internet. According to co-founder and CEO Tim Junio, Expanse has been tripling its sales year over year — and quadrupling the terms of its contracts. Toward that end, he says it now has more than 10 customers that have signed up for $1 million-plus contracts. “VCs like to look at how long it takes to go from $1 million to $10 million in [annual recurring revenue]. It took us 22 months, about as fast as [the now-public cloud-storage company] Box.”
Much of that revenue is also coming from U.S. federal agencies, including the U.S. Army, the U.S. Navy and the U.S. Air Force, as well as the State Department, the Defense Department and the Department of Energy. Collectively, they account for more than $100 million in contracts with Expanse, it says.
Asked if Thiel has played a role in making introductions — Thiel famously advised Donald Trump leading up to his election as president, and Thiel’s former chief of staff, Michael Kratsios, is now the country’s chief technology officer — Junio says that all of Expanse’s investors have helped in making customer introductions and pours water on any suggestion that Thiel has done special favors for the company.
Meanwhile, though the company is known for its work in helping customers identify security risks they don’t know about on their networks — like an IoT device that hasn’t been patched — it’s now going after adjacent problems that are bigger-spend problems, including looking at its customers’ critical suppliers to be sure that they aren’t introducing vulnerabilities, including across their commercial cloud providers and co-hosting facilities.
Eventually, it’s easy to see a day when Expanse sells some of the aggregated data it’s seeing, perhaps on a sector by sector basis, though Junio says that Expanse “isn’t going in that direction” currently. For now, he says, the biggest trend that’s driving the business today is the digital transformation of every type of company, which is resulting in plenty of insecurity. As more businesses move to the cloud, there is always the danger that employees — their own or those acquired through mergers — won’t always know or follow policies, and that they’ll move sensitive data where they should not.
That it’s a trend with no end in sight goes a long way in explaining the momentum of Expanse. Already, the company has 150 employees across offices in San Francisco, Washington, DC, New York and Atlanta. With its newest round — a sum that brings Expanse’s total funding to $135 million altogether — the plan is partly to move into new international markets beyond where it already operates. Those markets include the U.K., Canada, Australia and Japan.
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Labelbox raises $10 million for its services to support machine learning applications
Labelbox, a provider of services to create, manage and maintain data sets for machine learning applications, has raised $10 million in a new round of funding.
The financing came from Gradient Ventures, Google’s AI-focused venture fund, with participation from previous investors Kleiner Perkins, First Round Capital and Sumon Sadhu, an angel investor.
Labelbox manages the process of outsourcing data labeling for organizations and provides toolkits for companies or organizations to manage the data they’re receiving and ensuring the quality of that data, according to chief executive Manu Sharma.
For the Labelbox founders — Sharma; Dan Rasmuson, the company’s chief technology officer; and Brian Rieger, the chief operating officer — the tools they developed are simply an extension of the services they’d needed at their previous employers — companies like DroneDeploy, Planet Labs and Boeing.
Financing from the round will be used to double the size of its team from 11 employees to 22, and build out its sales and marketing teams.
Labelbox counts around 50 customers for its service and charges them based on the volume of data that companies upload and the breadth of services they use, Sharma said. Some named customers include FLIR Systems, Lytx, Airbus, Genius Sports and KeepTruckin.
As we’d reported when Labelbox launched from stealth last year, anyone can use the company’s toolkit for free. Companies are charged once they hit a certain usage threshold. Lytx, for instance, uses Labelbox for its DriveCam, a system installed on half a million trucks with cameras that use AI to detect unsafe driver behavior so they can be coached to improve. And the media and publishing giant Conde Nast is using Labelbox to match runway fashion to related items in their archive of content.
“Labelbox substantially reduces model development times and empowers data science teams to build great machine learning applications,” said Sharma in a statement. “With the new funding, Labelbox will continue to double down on bringing data labeling infrastructure to the machine learning teams with powerful automation, collaboration, and enterprise-grade features.”
Gradient Ventures was interested enough in the technology to invest, and sees promise in the company’s ability to support the development of machine learning tools globally.
“Labelbox is well-positioned to fuel the industrialization of machine learning across many sectors, such as manufacturing, transportation and healthcare. In doing so, they will unlock the potential of AI for companies across the globe,” said Anna Patterson, founder and managing partner at Gradient Ventures.
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Can the law be copyrighted?
UpCodes wants to fix one of the building industry’s biggest headaches by streamlining code compliance. But the Y Combinator-backed startup now faces a copyright lawsuit filed against it by the International Code Council, the nonprofit organization that develops the code used or adopted in building regulations by all 50 states.
The case may have ramifications beyond the building industry, including for compliance technology in other sectors and even individuals who want to reproduce the law. At its core are several important questions: Is it possible to copyright the law or text that carries the weight of law? Because laws and codes are often written by private individuals or groups instead of legislators, what rights do they continue to have over their work? Several relevant cases, including ones involving building codes, have been decided by different circuits in the United States Court of Appeals, which means the UpCodes lawsuit may potentially be heard by the Supreme Court.
Brothers Scott and Garrett Reynolds founded UpCodes in 2016. While working as an architect, Scott says he realized how laborious code compliance is for builders, who are required by law to follow codes that determine things like the height of handrails from the ground, minimum width of openings for bedroom windows, placement of light switches or how many electrical outlets to have in a hallway.
These details are important to ensure buildings are safe and accessible and an oversight may subject builders and property owners to legal penalties, fines and costly rebuilding. Firms that can afford to do so hire code consultants, but on an industry-wide level, the process of code compliance has been cited as a key reason for reduced productivity in the construction industry and rising home prices.
Scott decided to leave architecture to develop tools that would simplify the process, and was joined by his brother Garrett, then a software engineer at construction management software company PlanGrid. The two completed Y Combinator’s accelerator program in 2017 and so far have announced $785,000 in funding from angel investors, Y Combinator and Foundation Capital.
Brothers Scott and Garrett Reynolds, who founded UpCodes to streamline building code compliance
UpCodes’ first product, an online database, gives free access to codes, code updates and local amendments from 32 states, as well as New York City. For building professionals and others who want more advanced search tools and collaboration features, UpCodes sells individual and team subscriptions. In 2018, UpCodes released its second product, called UpCodes AI. Described as a “spellcheck for buildings,” the plug-in scans 3D models created with building information modeling (BIM) data and highlights potential errors in real time.
Just as technology has dramatically streamlined the compliance process in other highly regulated sectors, including finance and healthcare, Scott and Garrett Reynolds say tools like UpCodes’ can increase productivity in the building industry. The startup currently has more than 200,000 monthly active users, and has served over 10 million page views and 2 million users since launch.
It argues that its use of building codes is covered by fair use. The ICC, on the other hand, claims that products like UpCodes’ database harm its ability to make revenue and continue developing code. The ICC wants UpCodes to take down the building code on which it claims copyright, and has also sued for damages.
Making building codes more accessible
Served on UpCodes in September 2017 by the ICC and the American Society of Construction Engineers (ASCE), the lawsuit also names each of the brothers as a defendant. (UpCodes settled out of court with the ASCE).
‘We have a very long tradition that in a society governed by the rule of law, people have the right to access the law by which they are governed.’ Corynne McSherry, legal director of the Electronic Frontier Foundation
The brothers say they were shocked because they believed they were covered by the fair use doctrine. In the US, fair use is determined using four factors: the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion taken and the effect of the use on the potential market for or value of the copyrighted work. In one of the circuit court cases that involved building code, Veeck v Southern Building Code Congress International (2002), the judges ruled that when model codes are enacted into law, they enter the public domain.
“The people who are impacted are obviously architects, engineers, industry professionals, but also any homeowners or people living in a house or apartment are affected, too,” says Scott Reynolds. “If you want to do a renovation or move a wall or add an extension to your house, it is the exact same law that governs those as well. It’s a pretty dangerous precedent to set, copyrighting law in a democracy.”
The brothers see their database as an easy-to-use resource for anyone who wants to research building code. For example, they say they heard from an older couple who used UpCodes’ free access to confirm they had the right to demand a broken elevator in their building be fixed within a certain timeframe.
Formed in 1994 by the merger of three regional model code groups, the International Code Council is a nonprofit with 64,000 members headquartered in Washington DC. Its model codes and standards are developed by committees made up of volunteers from its membership and ICC staff. The ICC lobbies for the code to be enacted into law, and earns revenue by selling code books and running accreditation programs.
Some places, including Michigan, direct people who want to research building codes to buy the books from the ICC’s site. The ICC’s website has code posted for free viewing, but copy and paste, highlighting, printing and other functions are disabled unless users pay a subscription fee. Scott and Garrett Reynolds say this makes it more difficult to research code compliance, especially for non-professionals. UpCodes uploads building codes from various sources, including government websites, the ICC’s site and ICC code books ordered online, scanned and put into its database. The ICC argues that this violates its copyright and hurts the organization’s ability to raise revenue through code book sales.
“What is really at the crux of this lawsuit is that we develop the highest quality codes that are adopted and used by governments at essentially no cost to the taxpayers and UpCodes is misappropriating ICC codes to generate their for-profit business,” says Mel Oncu, ICC’s general counsel.
When adopting code, many jurisdictions look at what others are doing, which has helped increase the use of ICC’s code. But codes still vary between cities and states, with the Economist reporting in 2017 that American counties and municipalities use a combined total of 93,000 different building codes, and are updated frequently, adding another layer of complexity to the compliance process.
Corynne McSherry, legal director of digital liberties advocacy group the Electronic Frontier Foundation, says at stake in the case is the principle of access to the law.
“Many of us don’t think about this area of law, but it’s one of the most influential to our daily lives. We think of law in terms of what we see onscreen, but not too many of us normally have to engage with a crucial constitutional problem like those portrayed in movies. Hopefully most of us don’t have to encounter criminal law that much. But building codes actually shape our daily lives in incredibly concrete ways,” McSherry says.
Because the codes are legally binding, “that makes a pretty significant difference under copyright law and under fundamental constitutional law. We have a very long tradition that in a society governed by the rule of law, people have the right to access the law by which they are governed,” she adds.
An issue that’s come up before
Questions surrounding copyright and access to the law have been litigated several times in the United States courts of appeals. Two cases in particular may help UpCodes’ argument: Building Officials and Code Administration (BOCA) v Code Technology (1980) and Veeck v Southern Building Code Congress International (SBCCI) (2002). Two more recent cases involving Public.Resource.org, a nonprofit group that publishes public domain materials to its website, may also bolster UpCodes’ position: Code Revision Commission v Public.Resource.org (2017) and American Society for Testing and Materials et al. v Public.Resource.org (2018).
BOCA (one of the three groups that merged into ICC in 1994) developed a model building code that was adopted by Massachusetts, with some minor modifications, which BOCA then published as the Commonwealth of Massachusetts State Building Code. When private publisher Code Technology began publishing and selling its own edition of the code, BOCA sued. The case made it to the First Circuit, which ruled in Code Technology’s favor, stating that it was “far from persuaded that BOCA’s virtual authorship of the Massachusetts building code entitles it to enforce a copyright monopoly over when, where and how the [code] is reproduced and made publicly available.”
Then more than two decades later, another case resulted in a similar ruling. The Southern Building Code Congress International, another one of the three regional groups that formed the ICC, published a model building code adopted by local governments, including the towns of Anna and Savoy in Texas. Peter Veeck, who ran a website with free information about North Texas, bought copies of the code from the SBCCI, then scanned and uploaded them.
When the SBCCI demanded he stop, Veeck responded in a court filing that posting the code did not violate the Copyright Act and was covered by fair use. The SBCCI counterclaimed for copyright infringement. While the district court ruled in the SBCCI’s favor, the appeal made it to the Fifth Circuit, where Judge Edith Jones wrote in her opinion for the nine-judge majority that “as law, the model codes enter the public domain and are not subject to the copyright holder’s exclusive prerogatives.” The SBCCI’s attempt to appeal to the Supreme Court was denied.
The Economist reports there are 93,000 building codes in use between American jurisdictions and municipalities
Building codes and copyright were also at the center of the two cases involving Public.Resource.org. A lawsuit filed by the state of Georgia’s Code Revision Commission in 2015 sought to stop it from publishing the Official Code of Georgia Annotated (OCGA) after founder Carl Malamud purchased a hard copy of the OCGA, scanned it and sent copies on USB sticks to Georgia legislators. The Code Revision Commission argued that the annotations they wrote placed it under state copyright, but the Eleventh Circuit ruled in Public.Resource.org’s favor last year.
In another recent case, six industry groups, including the American Society for Testing and Materials, sued Public.Resource.org for scanning and publishing building, fire and safety codes they considered their copyrighted property. After the District Court for the District of Columbia ruled against Public.Resource.org, the case went on appeal to the DC Circuit. In July 2018, a three-judge panel reversed the decision, and sent the case back to the district court for further consideration, stating that “in many cases, it may be fair use for PRO to reproduce part or all of a technical standard in order to inform the public about the law.”
One difference between the Public.Resource.org cases and UpCodes’ is that Public.Resource.org is a non-commercial group, a fact that strengthens their fair use argument. UpCodes, on the other hand, is a commercial company, which will become part of the fair use analysis if their case makes it to trial. But that is not a decider, says McSherry, who represented Public.Resource.org in both cases, and the judges are likely to consider the Public.Resource.org cases, as well as the Veeck and other building code cases.
Because the Veeck case never made it to the Supreme Court, that means it hasn’t heard a case on the copyright availability of legal codes, or codes with the force of law, in a very long time, says Joe Gratz, a lawyer who has litigated several high-profile internet copyright and trademark disputes and is representing UpCodes and the Reynolds brothers. This opens the possibility of the ICC lawsuit making it to the Supreme Court.
“So now you have at least three of the circuits — DC, Fifth and Eleventh — all totally lined up, effectively saying that Veeck was right,” Gratz adds.
The ICC’s argument
But the ICC’s position is that the Veeck case is “bad law,” says Oncu, adding that the decision was made two decades ago, before developments in technology allowed the organization to host free access to codes on its own website.
The ICC’s lawyers note that the organization also works with third-party distributors that license the code. “UpCodes could have come to ICC at any point and asked to lawfully reproduce the codes that we own. The idea that they can’t accomplish their mission without violating our copyright doesn’t make much sense to me,” says Oncu.
(In response, Garrett Reynolds says “It’s absurd to license the law. ICC thinks they’re the gatekeepers and anyone wanting to share the law needs to pay their toll. ICC doesn’t get to decide who’s allowed to create new innovations to help people follow the law.” UpCodes did not ask ICC to license the code.)
There are two copyright cases, decided in circuit court, that support ICC’s position, says lawyer Kevin Fee, a Morgan Lewis partner who is representing the organization: CCC Information Services v. Maclean Hunter Market Reports (1994) and Practice Management Information v. American Medical Association (1998).
’The idea that they can’t accomplish their mission without violating our copyright doesn’t make much sense to me.’ Mel Oncu, International Code Council’s general counsel
In 1994, the Second Circuit sided with Maclean, publisher of used car valuation reference Red Book, which alleged CCC, a data and service provider for the automotive industry, violated its copyright by uploading information from the guide to its online network. In its decision, the court said “We are not prepared to hold that a state’s reference to a copyrighted work as a legal standard for valuation results in loss of the copyright.”
In the second case, Practice Management Information, a medical coding products company, sued the American Medical Association over the use of Current Procedural Terminology (CPT), a medical code set that is required by Medicare and HIPAA and appears in the Federal Register. Practice Management claimed that this meant AMA’s copyright was invalid, but the Ninth Circuit disagreed, writing in its 1997 decision that “the AMA’s right under the Copyright Act to limit or forgo publication of the CPT poses no realistic threat to public access.”
The ICC claims that its training and education certification business isn’t enough to fund code development.
“Copyright protection of our codes is essential to our ability to continue to update our codes,” says Oncu. She adds that the ICC believes if the lawsuit is ruled in UpCodes’ favor, it may potentially set a precedent that will make it difficult for it to have a revenue stream and continue creating high-quality codes.
Scott and Garrett Reynolds, however, say that the ICC appears to have healthy revenue. In its 2016 annual report, the ICC said its consolidated revenue in 2015 was $66 million, an increase of $4.3 million compared to 2014, and that it “consistently records over $1 million in sales per month” through its online store. Then from 2015 to 2016, ICC’s revenue increased by $12 million, according to a report presented by chief executive officer Dominic Sims at an annual meeting. (The ICC did not disclose an amount for consolidated revenue in its 2017 annual report, and hasn’t released its 2018 annual report yet.)
The UpCodes founders also note that Sims, the ICC’s CEO, was paid $709,000 in 2016, according to a tax filing, much more than the $104,000 median annual salary for nonprofit CEOs. (Oncu says that ICC’s salaries are comparable to other standards organizations.)
Potential implications for innovation
One of UpCodes’ angel investors, Cyrus Lohrasbpour, decided to back the company when he saw them present during Y Combinator’s Demo Day. Lohrasbpour says he was impressed by the accessibility of the website and its team collaboration tools.
“I immediately understood the value proposition of the company,” he says. “It was hard for me to understand why building codes didn’t have something like this already.” Lohrasbpour was one of two investors deposed by the ICC as part of the lawsuit, but despite being questioned for five hours by lawyers, he says the experience made him more determined to support UpCodes. “If you invest in a company that will disrupt an incumbent, there is always a chance that something like this occurs.”
Scott and Garrett Reynolds say that lawsuits like the one they are facing may potentially deter other developers from working on tools to automate building and safety processes, such as calculating fire resistance in walls. The UpCodes suit, and the other cases that came before it, aren’t just relevant to builders. Technology has been able to streamline the process of regulatory and legal compliance in several industries, but innovation may slow if would-be founders are unclear about how copyright law applies to them.
The Electronic Frontier Foundation takes on clients like Public.Resource.org pro bono because “lawsuits can be a way of shutting down innovation in its infancy,” says McSherry. “It can be intimidating to people trying to experiment in this space.”
ICC’s stance is that it is already making its code more accessible by putting it online.
“Code compliance has never been easier. If you wanted to access the codes before the internet, you had to buy a hard copy of the codes or go to the library to figure it out. Now ICC has made its codes available online for free. All you need is a phone in your hand or internet access to know what the codes say,” says Fee.
But UpCodes’ argument is that part of the value of their product is its ease of use, including the ability to cut, paste and highlight text, which ICC’s online codes lack unless you pay a subscription fee. At the same time, the government website of many municipalities direct residents to the ICC’s website to read or purchase code, including Michigan and California.
“I think citizens being able to freely access and discuss laws is critical to democracy and to hold the government accountable,” says Garrett Reynolds. “If one private entity controls access to the law and they get to decide who can access it when and how, it might be appropriate in a dictatorship, but not in a democracy. The people are the owners of the law.”
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Uber, Lyft and the challenge of transportation startup profits
How much does transportation cost you?
In most cities, bus or subway fare might set you back $3 or so. A tank of gas, maybe $30 or $40 depending on your car. An hour of street parking? Sometimes it’s free, sometimes it’s a few bucks. And you can usually snag an economy seat on a round-trip U.S. domestic flight for less than $300.
These numbers probably ring true for most people. There’s just one problem: Everything you know about the cost of transportation is wrong.
Despite a massive infusion of venture capital into the transportation sector over the past few years, mobility startups are starting to learn what every transportation business has known for generations: transportation profits are elusive, and the system is mainly held together by subsidies. Will this be the first generation of transportation businesses to escape history?
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New privacy assistant Jumbo fixes your Facebook & Twitter settings
Jumbo could be a nightmare for the tech giants, but a savior for the victims of their shady privacy practices.
Jumbo saves you hours as well as embarrassment by automatically adjusting 30 Facebook privacy settings to give you more protection, and by deleting your old tweets after saving them to your phone. It can even erase your Google Search and Amazon Alexa history, with clean-up features for Instagram and Tinder in the works.
The startup emerges from stealth today to launch its Jumbo privacy assistant app on iPhone (Android coming soon). What could take a ton of time and research to do manually can be properly handled by Jumbo with a few taps.
The question is whether tech’s biggest companies will allow Jumbo to operate, or squash its access. Facebook, Twitter and the rest really should have built features like Jumbo’s themselves or made them easier to use, since they could boost people’s confidence and perception that might increase usage of their apps. But since their business models often rely on gathering and exploiting as much of your data as possible, and squeezing engagement from more widely visible content, the giants are incentivized to find excuses to block Jumbo.
“Privacy is something that people want, but at the same time it just takes too much time for you and me to act on it,” explains Jumbo founder Pierre Valade, who formerly built beloved high-design calendar app Sunrise that he sold to Microsoft in 2015. “So you’re left with two options: you can leave Facebook, or do nothing.”
Jumbo makes it easy enough for even the lazy to protect themselves. “I’ve used Jumbo to clean my full Twitter, and my personal feeling is: I feel lighter. On Facebook, Jumbo changed my privacy settings, and I feel safer.” Inspired by the Cambridge Analytica scandal, he believes the platforms have lost the right to steward so much of our data.
Valade’s Sunrise pedigree and plan to follow Dropbox’s bottom-up freemium strategy by launching premium subscription and enterprise features has already attracted investors to Jumbo. It’s raised a $3.5 million seed round led by Thrive Capital’s Josh Miller and Nextview Ventures’ Rob Go, who “both believe that privacy is a fundamental human right,” Valade notes. Miller sold his link-sharing app Branch to Facebook in 2014, so his investment shows those with inside knowledge see a need for Jumbo. Valade’s six-person team in New York will use the money to develop new features and try to start a privacy moment.
How Jumbo works
First let’s look at Jumbo’s Facebook settings fixes. The app asks that you punch in your username and password through a mini-browser open to Facebook instead of using the traditional Facebook Connect feature. That immediately might get Jumbo blocked, and we’ve asked Facebook if it will be allowed. Then Jumbo can adjust your privacy settings to Weak, Medium, or Strong controls, though it never makes any privacy settings looser if you’ve already tightened them.
Valade details that since there are no APIs for changing Facebook settings, Jumbo will “act as ‘you’ on Facebook’s website and tap on the buttons, as a script, to make the changes you asked Jumbo to do for you.” He says he hopes Facebook makes an API for this, though it’s more likely to see his script as against policies.
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For example, Jumbo can change who can look you up using your phone number to Strong – Friends only, Medium – Friends of friends, or Weak – Jumbo doesn’t change the setting. Sometimes it takes a stronger stance. For the ability to show you ads based on contact info that advertisers have uploaded, both the Strong and Medium settings hide all ads of this type, while Weak keeps the setting as is.
The full list of what Jumbo can adjust includes Who can see your future posts?, Who can see the people?, Pages and lists you follow, Who can see your friends list?, Who can see your sexual preference?, Do you want Facebook to be able to recognize you in photos and videos?, Who can post on your timeline?, and Review tags people add to your posts the tags appear on Facebook? The full list can be found here.
For Twitter, you can choose if you want to remove all tweets ever, or that are older than a day, week, month (recommended), or three months. Jumbo never sees the data, as everything is processed locally on your phone. Before deleting the tweets, it archives them to a Memories tab of its app. Unfortunately, there’s currently no way to export the tweets from there, but Jumbo is building Dropbox and iCloud connectivity soon, which will work retroactively to download your tweets. Twitter’s API limits mean it can only erase 3,200 tweets of yours every few days, so prolific tweeters may require several rounds.
Its other integrations are more straightforward. On Google, it deletes your search history. For Alexa, it deletes the voice recordings stored by Amazon. Next it wants to build a way to clean out your old Instagram photos and videos, and your old Tinder matches and chat threads.
Across the board, Jumbo is designed to never see any of your data. “There isn’t a server-side component that we own that processes your data in the cloud,” Valade says. Instead, everything is processed locally on your phone. That means, in theory, you don’t have to trust Jumbo with your data, just to properly alter what’s out there. The startup plans to open source some of its stack to prove it isn’t spying on you.
While there are other apps that can clean your tweets, nothing else is designed to be a full-fledged privacy assistant. Perhaps it’s a bit of idealism to think these tech giants will permit Jumbo to run as intended. Valade says he hopes if there’s enough user support, the privacy backlash would be too big if the tech giants blocked Jumbo. “If the social network blocks us, we will disable the integration in Jumbo until we can find a solution to make them work again.”
But even if it does get nixed by the platforms, Jumbo will have started a crucial conversation about how privacy should be handled offline. We’ve left control over privacy defaults to companies that earn money when we’re less protected. Now it’s time for that control to shift to the hands of the user.
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Dote raises $12M and introduces live-streamed Shopping Parties
Mobile shopping startup Dote is announcing $12 million in new funding, as well as a new feature called Shopping Party.
Founder and CEO Lauren Farleigh said her initial goal was to create “a truly native mobile experience” that made it “easy to check out across a lot of different stores.”
Over time, recommendations from social media influencers have become a big part of the app. With Shopping Party, they’re taking center stage — the feature allows them to share live video while browsing different products on Dote and chatting with fans.
Farleigh said the idea came from a trip she took with Dote influencers to Fiji last fall. She described watching them shop and talk together at the airport, and in what she said was an “ah-ha moment,” she realized that there’s an experience that was “lost when we stopped going to the mall with our friends.”
She added that influencers embraced the idea, with some telling her, “We love going live on Instagram [but] it’s challenging because there’s no shared experience for us to have that meaningful interaction over. It usually turns into the same Q&A over and over again.”
Dote CEO Lauren Farleigh
Shopping Party offers one solution to that issue, because you’re actually browsing and talking about specific products in the Dote app. Apparently this was a real technical challenge — Shopping Party is leveraging Apple’s ReplayKit 2 framework to deliver two live streams (one from the phone camera, one from the Dote app) while also incorporating live chats.
Farleigh, who previously worked as a product manager at mobile gaming company Pocket Gems, also compared this to game streaming on Twitch, except for shopping.
To kick things off, Dote plans to host two Shopping Parties every hour from 6am to 10am Pacific time for the next two weeks. (The company says the average Shopping Party lasts about 15 minutes.) There also will be Shopping Parties sponsored by specific brands.
As for the funding, it was led by Goodwater Capital, with participation from Lightspeed Venture Partners and Harrison Metal. Dote has now raised a total of $23 million.
“[Dote’s] customer-centric shopping platform uniquely blends innovative technologies such as live-streaming with relevant and fun social features, setting the standard for how all major brands and retailers will connect with Gen Z,” said Goodwater Managing Partner Eric Kim in a statement. “We’re thrilled to partner with them to accelerate this transformation.”
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PubNub nabs $23M as its IaaS network hits 1.3T messages sent each month
There’s been a huge increase in the last decade of applications and services that rely on real-time notifications and other alerts as a core part of how they operate, and today one of the companies that powers those notifications is announcing a growth round. PubNub — an infrastructure-as-a-service provider that provides a real-time network to send and manage messaging traffic between companies, between companies and apps and between internet-of-things devices — has raised $23 million in a Series D round of funding to ramp up its business internationally, with an emphasis on emerging markets.
The round adds another strategic investor to PubNub’s cap table: Hewlett Packard Enterprise is coming on as an investor, joining in this round previous backers Sapphire Ventures (backed by SAP), Relay Ventures, Scale Venture Partners, Cisco Investments, Bosch and Ericsson.
Todd Greene, the CEO of PubNub (who co-founded it with Stephen Blum), said the startup is not disclosing its valuation with this round except to say that “we are happy with it, and it’s a solid increase on where we were the last time.” That, according to PitchBook, was just under $155 million back in 2016 in a small extension to its Series C round. The company has raised around $70 million to date.
PubNub’s growth — along with that of competing companies and technologies, which includes the likes of Pusher, RabbitMQ, Google’s Firebase and others — has come alongside the emergence of a number of use cases built on the premise of real-time notifications. These include a multitude of apps; for example, for on-demand commerce (e.g. ride hailing and online food ordering), medical services, entertainment services, IoT systems and more.
That’s pushed PubNub to a new milestone of enabling some 1.3 trillion messages per month for customers that include the likes of Peloton, Atlassian, athenahealth, JustEat, Swiggy, Yelp, the Sacramento Kings and Gett, who choose from some 70 SDKs to tailor what kinds of notifications and actions are triggered around their specific services.
Greene said that while some of the bigger services in the world have largely built their own messaging platforms to manage their notifications — Uber, for example, has taken this route — that process can result in “death by 1,000 paper cuts,” in Greene’s words. Others will opt for a PubNub-style alternative from the start.
“About 50 percent of our customers started by building themselves and then got to scale, and then decided to turn to PubNub,” Greene said.
It’s analogous to the same kind of decision businesses make regarding public cloud infrastructure: whether it makes sense to build and operate their own servers, or turn to a third-party provider — a decision that PubNub itself ironically is also in the process of contemplating.
Today the company runs its own business as an overlay on the public cloud, using a mixture of AWS and others, Greene said — the company has partnerships with Microsoft Azure, AWS, and IBM Watson — but “every year we evaluate the benefits of going into different kinds of data centres and interesting opportunities there. We are evaluating a cost and performance calculation,” he added.
And while he didn’t add it, that could potentially become an exit opportunity for PubNub down the line, too, aligning with a cloud provider that wanted to offer messaging infrastructure-as-a-service as an additional feature to customers.
The strategic relationship with its partners, in fact, is one of the engines for this latest investment. “Edge computing and realtime technologies will be at the heart of the next wave of technology innovation,” commented Vishal Lall, COO of Aruba, a Hewlett Packard Enterprise company, said in a statement. “PubNub’s global Data Stream Network has demonstrated extensive accomplishments powering both enterprise and consumer solutions. HPE is thrilled to be investing in PubNub’s fast-growing success, and to accelerate the commercial and industrial applications of PubNub’s real time platform.”
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Human rights activist Amira Yahyaoui is battling the US college financial aid system
Tunisian human rights activist Amira Yahyaoui couldn’t go to college.
Not because she couldn’t afford it; where she comes from, college is virtually free. She lost the opportunity to pursue higher education, to finish high school, even, when she was exiled from Tunisia at age 17, under the repressive regime of the country’s former President, Zine El Abidine Ben Ali.
As part of the Tunisian human rights diaspora, she was inspired to build Al Bawsala, a globally renowned NGO that fights for government accountability, transparency and access to information. Now, Yahyaoui has traveled thousands of miles to San Francisco to fight another battle near and dear to her heart: civic education, or in Silicon Valley terms, edtech.
“I always knew that I wouldn’t allow myself to do anything else before solving the problem in my country and today, Tunisia is the only Arab democracy in the world,” Yahyaoui told TechCrunch.
With that in mind, her focus has shifted to Mos, a tech-enabled platform for students to apply for financial aid. With backing from Uber co-founder Garrett Camp, his startup studio Expa, Kleiner Perkins chairman John Doerr, Base Ventures, Sweet Capital and others, Mos has closed a $4 million seed round and plans to take its recently-launched product to the next level.
The startup seeks to decrease American student debt, which totaled nearly $1.6 trillion in 2018, and digitize the antiquated government systems that deter students from applying for financial aid. For a one-time fee of $149 and about 20 minutes of their time, Mos helps students of all backgrounds maximize their aid awards.
“Our mission is to bridge the gap between citizens and government in a way that works with technology today,” Yahyaoui said.
Yahyaoui is applying what she’s learned building a government-fighting NGO to the startup world, and with the support of top-tier investors, she’s well on her way to proving an “uneducated” immigrant woman of color can write a Silicon Valley success story for the masses.
A face of the Arab Spring
Mos founder and chief executive officer Amira Yahyaoui.
After being forced out of her home country, Yahyaoui fled to France, where she lived as an illegal immigrant and continued to fight against Tunisia’s authoritarian leadership through her blog and an anti-censorship campaign she started online.
When social media sparked anti-government protests across the Middle East, Yahyaoui, still unable to reenter Tunisia, became a face of what was later called the Arab Spring. Her digital prowess, activist reputation and persistent efforts to highlight the Tunisian administration’s human rights abuses quickly made her a face of the movement.
On January 14, 2011, when the protests succeeded in making Tunisia a pioneer of Arab democracy and ended Ben Ali’s reign, Yahyaoi got her passport back and went home, immediately.
Back in Tunisia with newfound freedom, she had an agenda: To hold the governing agency charged with writing a new Tunisian constitution accountable.
Yahyaoui built Al Bawsala, translated as The Compass, an NGO focused on transparency and government accountability. Al Bawsala became one of the largest NGOs in the Middle East, a bona fide success that attracted numerous awards and cemented Yahyaoui’s status as a fearless advocate for human rights, a freedom fighter and one of the most influential Arab women in the world.
“I had to work probably 10 times harder to get to be the self-educated me I am today,” she said. “I saw way too many people getting their education refused and therefore their future ruined.”
Her global standing earned her a seat on the board of the United Nation’s High Commissioner For Refugees Advisory Group on Gender, Forced Displacement, and Protection, as well as the title of Young Global Leader at the World Economic Forum and co-chair of the Davos Conference in 2016, a title she shard with Microsoft’s Satya Nadella and GM’s Mary Barra .
Three years later, with a resume enviable to any dignitary, Yahyaoui is leveraging her unique experience to lure in venture capitalists and use their cash for good.
Repairing a broken financial aid system
The Mos dashboard.
Mos is like if Turbo Tax married Typeform and had a baby, Yahyaoui explained. Not dissimilar to Common App, Mos lets students apply to more than 500 federal and state-based aid programs in minutes using a survey that matches them to every grant and scholarship program they qualify for, while simultaneously completing the FAFSA and state aid applications. To ensure every family is getting the most financial support possible, a Mos financial aid advisor reviews each case and negotiates with colleges for higher awards.
“Today, the biggest problem is people think they are not eligible for financial aid just because of how the thing is designed,” Yahyaoui said. “You’re supposed to just go ahead and fill a form that has 200 questions and then send it like a bottle in the sea and wait for months.”
Mos will complete a full-scale launch this summer and eventually tackle other nation’s college financial aid systems thanks to the new infusion of capital and the high-profile relationships Yahyaoui has forged in just one year living in the Bay Area.
Ultimately, it was Yahyaoui’s activism that granted her a ticket into the opaque world of Silicon Valley VC. As it turns out, angel investor Khaled Helioui, a fellow Tunisian immigrant in tech, was familiar with Yahyaoui’s work and when he heard she had relocated to the Bay Area to launch a technology startup, he wanted to know exactly what she was building. Today, he’s a Mos investor and board member and it was his introductions that helped Yahyaoui quickly and skillfully close her seed round.
An early angel investor in Uber, Helioui connected Yahyaoui with his friend Garrett Camp, the very wealthy co-founder and chairman of the ride-hailing giant, who was sold on Mos’s mission right off the bat.
“I think because Garrett is an immigrant, he knows what it is to suffer with bureaucracy,” Yahyaoui said. “He was a huge believer. He actually made it so easy for me because he said, okay, here’s an office, just stay and work.”
She was then introduced to John Doerr, the chairman of the esteemed VC firm Kleiner Perkins, known for his successful bets on companies like Google and Amazon. With Camp and Doerr on board, Mos didn’t struggle to raise additional capital; in fact, Yahyaoui was in an unusual position of being able to reject investors whose values and vision for Mos clearly didn’t align with hers.
Tearing down barriers
Yahyaoui, center, with the Mos team in San Francisco.
Yahyaoui isn’t in the startup business to get rich off students trying to navigate their way through the absorbently expensive process of applying to and attending college. She’s part of a growing class of founders out to prove that you can pair profits with good morals and lead venture-backed values-based businesses.
“I know if I created the same thing as an NGO, I could have already raised $100 million, but I like the accountability of business,” she said. “We can create businesses that are good for people.”
Yahyaoui’s story, from being exiled from her home country at a young age to fighting an authoritarian regime is not one that’s ever been told before in Silicon Valley.
In addition to being a trailblazing human rights advocate, she’s a woman, an immigrant, “uneducated” by Silicon Valley standards and a first-time tech founder that was able to walk into a meeting with John Doerr and walk out with a term sheet.
If she’s successful in building a global edtech business, she’ll be emblematic of the meritocratic culture The Valley has falsely claimed to uphold. Even if she’s not successful, she’ll have torn down barriers for other underrepresented founders and written a success story fitting for this new era of accountability in tech.
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Democratic senators question Juul about its Altria deal
Eleven democratic senators, led by Sen. Dick Durbin (D-IL), have penned a letter to Juul Labs, asking a series of questions around the product’s marketing, its effectiveness as a tool to help people quit smoking combustible cigarettes, sales figures and, perhaps most importantly, more information on the deal that gave Altria a minority stake in Juul Labs.
“The corporate marriage between two companies that have been the most prolific at marketing highly addictive nicotine products to children is alarming from a public health standpoint and demonstrates, yet again, that JUUL is more interested in padding its profit margins than protecting our nation’s children,” writes Sen. Durbin in the letter.
Questions in the letter include records around advertising and marketing spend for Juul products, as well as any changes that might have been made to Juul’s Youth Prevention Plan following the deal with Altria.
In late 2018, Juul announced it had sold a 35 percent minority stake of the company to Altria Group, makers of Marlboro cigarettes, for $12.8 billion. The company said that a partnership with Altria would help Juul market and distribute to currently addicted adult cigarette smokers.
In the letter, the senators cite the American Heart Association, which called the Altria/Juul deal “a match made in tobacco heaven.” Juul was already in hot water over its product’s popularity among young people, so it’s only expected that a partnership with traditional Big Tobacco would further fuel concerns among critics.
More from the letter:
JUUL’s decision to team up with Altria, the parent company of Philip Morris USA, is also bad news for children considering that Altria has a long and sordid history of spending billions to entice children to smoke through targeted campaigns that intentionally lied about the science and health effects from cigarettes. And their efforts have clearly paid off. According to the CDC, Altria’s Marlboro cigarette continues to be the most popular cigarette brand among children in the United States, with 48.8 percent of high school smokers preferring Marlboro cigarettes. Further, the proportion of high school smokers who smoked Marlboro cigarettes increased dramatically between 2012 and 2016, by a whopping 27 percent. While JUUL has promised to address youth vaping through its modest voluntary efforts, by accepting $12.8 billion from Altria—a tobacco giant with such a disturbing record of deceptive marketing to hook children onto cigarettes—JUUL has lost what little remaining credibility the company had when it claimed to care about the public health.
A Juul Labs spokesperson had this to say in response to the letter:
We welcome the opportunity to share information regarding JUUL Labs’ commitment to curbing underage use of our products while fulfilling our mission to eliminate combustible cigarettes, the number one cause of preventable death in our country. We agree that companies such as ours must step up with meaningful measures to limit access and appeal of vapor products to young people. That’s exactly what we’ve done, and we will do more to combat teen use to save the harm-reduction opportunity for the 34 million adult smokers in the United States. Don’t take our word for it — look at our actions. As part of our action plan deployed in November 2018 to keep JUUL products out of the hands of youth, we stopped the sale of certain flavored JUULpods to traditional retail stores, strengthened our retail compliance and secret shopper program, enhanced our online age-verification, exited our Facebook and Instagram accounts and are continuously working to remove inappropriate third-party social media content. We support the FDA’s draft guidance restricting the sale of certain flavored products, including JUULpods, at retail outlets and online, and will continue to work with FDA, Congress, state Attorneys General, local municipalities, and community organizations as a transparent and responsible partner in combating underage use.
U.S. Senators Patty Murray (D-WA), Ron Wyden (D-OR), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), Jack Reed (D-RI), Elizabeth Warren (D-MA), Tom Udall (D-NM), Ed Markey (D-MA), Jeff Merkley (D-OR) and Chris Van Hollen (D-MD) joined Sen. Durbin in sending the letter. It comes just a month after the FDA proposed further regulations to the sale of flavored e-cig products.
Juul has until April 25 to provide answers and information in response to the letter.
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An Equity deep dive on Patreon
The popular TechCrunch podcast Equity this week launched a new series called Equity Dive, wherein a host interviews the writer of the latest edition of the Extra Crunch EC-1.
If you’ve ever wanted to know everything there is to know about Patreon, the platform that connects creators with fans and their wallets, then this is the show for you. TechCrunch Silicon Valley editor Connie Loizos speaks with Eric Peckham who spent hours upon hours meeting with the Patreon team to learn its origin story and the ins and outs of its business practices to get the company to where it is today.
As Eric says:
The way to think about how Patreon has evolved is I see it in kind of three stages, which was this initial crowd funding platform, and then evolving beyond that to try and be a destination platform for consumers where there would be great content that you just go to Patreon to find and you go to discover creators, kind of a marketplace model. They moved away from that. That was somewhat of a gradual shift and essentially the decision was it’s not good to be stuck in this game of trying to be yet another destination platform for consumers competing with YouTube and Instagram and every single media site out there. Really the opportunity and mission underlies our work is about helping creators and enabling all these independent creators to sustain themselves and to build thriving businesses.
They shifted, they now describe themselves as a SaaS company actually, which is very different from framing yourself as kind of a consumer destination. The long and short of it is they see this opportunity, which is a growing market of independent creators around the world who are building fan bases, and for that particular type of SMB they want to provide essentially the full suite of tools and services that they need to run their businesses.
For access to the full transcription, become a member of Extra Crunch. Learn more and try it for free.
Connie Loizos: Hi, I’m Connie Loizos and I’d like to welcome you to our first Equity Dive. Once a month we’re going to be dedicating an entire episode to a deep dive into the life of one company. This month I’m joined by Eric Peckham, who has reported extensively on the crowd funding membership platform Patreon. Hi Eric.
Eric Peckham: Hey Connie, excited to be here for the first Equity Dive.
Connie Loizos: Same, so Eric you and I ran into each other first in Berlin but we don’t know each other very well. I’d love to hear more about you. You’re based in LA, and from what I understand you are a media industry analyst. Is that correct?
Eric Peckham: Yes, so I cover through both my own newsletter Monetizing Media, the happenings of the global media and entertainment industry. It’s kind of a very business minded lens on media and entertainment.
Connie Loizos: Well I read your extensive coverage on Patreon and it was really impressive, and I wondered considering how much you wrote, is this sort of a long interest of yours this company or how did you decide to settle on this for your first deep dive for TechCrunch?
Eric Peckham: Yes, it was an exciting process digging into this. We made a short list of exciting companies, a lot of unicorn companies or late stage startups we thought were about to become unicorns, and Patreon jumped out for a number of reasons. One is as someone who runs his own newsletter I have had subscribers to that newsletter suggest creating a Patreon. I’ve looked into it before, so I had a little bit of a creator perspective of just wanting to better understand Patreon and other options in the market. I think from a bigger picture, more of a Silicon Valley perspective, Patreon’s a really fascinating company. They’ve raised over $100 million from top PC firms like Index, CRV, they’re the dominant player in this space they’re targeting, but it’s kind of them versus just the big social media platforms. There isn’t the startup that’s comparable in size to it and it’s really trying to own this whole territory of independent content creators, surveying them with different business tools or services.
Connie Loizos: It is really interesting to think the David and Goliath story involves a $100 million venture backed startup versus, as you say, I know these big players Facebook, YouTube. Let’s start at the beginning, so you decided on Patreon for reasons that I can certainly understand now. How did you set about pitching them on this idea? Because obviously you were going to need a lot of access to them, a lot of their time.
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