Startups
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zGlue launches a configurable system-on-a-chip to help developers implement customized chipsets
The complexity and cost of packing an array of sensors and power inside a small amount of space has opened the door to a wider and wider variety of use cases for internet-connected devices beyond just smart thermostats or cameras — and also exposed a hole for getting those ideas into an actual piece of hardware.
So there are some startups that are looking to address this hole by providing developers a path to creating the customized chipsets they need to power those devices. zGlue is one of those, led by former Samsung engineering director Ming Zhang. The company’s chiplets are built around the kind of system-on-a-chip approach that you’ll see in most modern devices, where everything is in a single unit that reduces some of the complexity of moving processes around a larger piece of hardware — shrinking the space constraints and allowing all these actions to happen on a device, such as a smartphone. As more and more IoT devices come online, they may all have varying form factor demands, which means companies — like zGlue and others — are emerging to address those needs.
“From the developer point of view, think of us as a system that is not different from any thing else on the market, user-interface-wise,” Zhang said. “It is just smaller in size, faster in time to market, and flexible — customizable by individuals rather than just by Apple and Qualcomms. [We’re] democratizing chip innovation so it is no longer [a] privilege of Fortune 500 companies.”
The company’s first product is called the zOrigin, a “chip-stacking” product that aims to allow developers to embed the sensors and processes necessary for their devices. Stemming from an ARM 32-bit core processor (meaning it can handle more complex and precise calculations), the first launch costs $149 for the wearable and development board and can include pieces like a Bluetooth radio, accelerometers, and other necessary features.
zGlue’s chipsets have embedded memory, which is an increasingly common approach to try to reduce the number of trips going from the actual processing power to where the information is stored. Those trips cost power, speed, and can restrict the scope of use cases for internet-connected devices. Zhang said the chiplets are packaged closer together — literally reducing the space that information has to cross — in order to speed it up, though that of course carries consequences when it comes to heat constraints these processors can have.
“That’s the price to pay for the continuation of Moore’s law, as it has in the past 40 years,” Zhang said. “Heat dissipation in our system is not going to be any worse than a conventional system. In fact, with the silicon substrate in place, it’s easier to conduct heat compared to a conventional package or board substrate.”
As a kind of templated approach, zGlue is geared toward helping developers produce a custom setup that the can implement into devices that may require a wide set of sensors. The company says it looks to help developers go from a design to a prototype in a few weeks, and then reduce the turnaround time from a prototype to production in “weeks or months,” depending on the complexity and volume.
While this is one example of trying to get a prototype chip out into the wild, there are a few others as well. Si-Five, for example, offers developers a way to prototype custom silicon for their specific niches based on the hardware and IP the startup has. The goal there is to offer both a prototype flow and the ability to graduate into a production flow, allowing developers and companies to get products out the door that require custom silicon. Si-Five hardware is based on the RISC-V architecture, an open-source instruction set for silicon, and the company most recently raised $50.4 million.
Zhang, too, said RISC-V offers some potential, especially in its own scope. “RISC-V is a great tool to build small, fast, and low power IoT applications,” he said. “The nature of open source makes it more available to more people. We welcome and embrace RISC-V to join the family of ‘MCU’ chiplets supported by our technology.”
When it comes to inference — the machine learning processes that happen on the hardware to execute some kind of action, like image recognition, based on trained models — Zhang said the chipsets would support it, but he would not comment further. There is a blossoming ecosystem around custom silicon that looks to speed up inference on devices like cars or IoT devices, which is geared toward reducing the space and power constraints of those chips while also running those processes much more quickly. Companies like Mythic have raised significant venture funding in order to build that kind of hardware.
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Meet Alchemist Accelerator’s latest demo day cohort
An IoT-enabled lab for cannabis farmers, a system for catching drones mid-flight and the Internet of Cows are a few of the 17 startups exhibiting today at Alchemist Accelerator’s 18th demo day. The event, which will be streamed live here, focuses on big data and AI startups with an enterprise bent.
The startups are showing their stuff at Juniper’s Aspiration Dome in Sunnyvale, California at 3pm today, but you can catch the whole event online if you want to see just what computers and cows have in common. Here are the startups pitching onstage.
Tarsier – Tarsier has built AI computer vision to detect drones. The founders discovered the need while getting their MBAs at Stanford, after one had completed a PhD in aeronautics. Drones are proliferating. And getting into places they shouldn’t — prisons, R&D centers, public spaces. Securing these spaces today requires antiquated military gear that’s clunky and expensive. Tarsier is all software. And cheap, allowing them to serve markets the others can’t touch.
Lightbox – Retail 3D is sexy — think virtual try-ons, VR immersion, ARKit stores. But creating these experiences means creating 3D models of thousands of products. Today, artists slog through this process, outputting a few models per day. Lightbox wants to eliminate the humans. This duo of recent UPenn and Stanford Computer Science grads claim their approach to 3D scanning is pixel perfect without needing artists. They have booked $40,000 to date and want to digitize all of the world’s products.
Vorga – Cannabis is big business — more than $7 billion in revenue today and growing fast. The crop’s quality — and a farmer’s income — is highly sensitive to a few chemicals in it. Farmers today test the chemical composition of their crops through outsourced labs. Vorga’s bringing the lab in-house to the cannabis farmer via their IoT platform. The CEO has a PhD in chemical physics, and formerly helped the Department of Defense keep weapons of mass destruction out of the hands of terrorists. She’s now helping cannabis farmers get high… revenue.
Neulogic – Neulogic is founded by a duo of Computer Science PhDs that led key parts of Walmart.com product search. They now want to solve two major problems facing the online apparel industry: the need to provide curated inspiration to shoppers and the need to offset rising customer acquisition costs by selling more per order. Their solution combines AI with a fashion knowledge graph to generate outfits on demand.
Intensivate – Life used to be simple. Enterprises would use servers primarily for function-driven applications like billing. Today, servers are all about big data, analytics and insight. Intensivate thinks servers need a new chip upgrade to reflect that change. They are building a new CPU they claim gets 12x the performance for the same cost. Hardware plays like this are hard to pull off, but this might be the team to do it. It includes the former co-founder and CEO of CPU startup QED, which was acquired for $2.3 billion, and a PhD in parallel computation who was on the design team for the Alpha CPU from DEC.
Integry – SaaS companies put a lot of effort into building out integrations. Integry provides app creators their own integrations marketplace with pre-boarded partners so they can have apps working with theirs from the get go. The vision is to enable app creators to mimic their own Slack app directory without spending the years or the millions. Because these integrations sit inside their app, Integry claims setup rates are significantly better and churn is reduced by as much as 40 percent.
Cattle Care – AI video analytics applied to cows! Cattle Care wants to increase dairy farmers’ revenue by more than $1 million per year and make cows healthier at the same time. The product identifies cows in the barn by their unique black and white patterns. Algorithms collect parameters such as walking distance, interactions with other cows, feeding patterns and other variables to detect diseases early. Then the system sends alerts to farm employees when they need to take action, and confirms the problem has been solved afterwards.
VadR – VR/AR is grappling with a lack of engaging content. VadR thinks the cause is a broken feedback loop of analytics to the creators. This trio of IIT-Delhi engineers has built machine learning algorithms that get smarter over time and deliver actionable insights on how to modify content to increase engagement.
Tika – This duo of ex-Googlers wants to help engineering managers manage their teams better. Managers use Tika as an AI-powered assistant over Slack to facilitate personalized conversations with engineering teams. The goal is to quickly uncover and resolve employee engagement issues, and prevent talent churn.
GridRaster – GridRaster wants to bring AR/VR to mobile devices. The problem? AR/VR is compute-intensive. Latency, bandwidth and poor load balancing kill AR/VR on mobile networks. The solution? For this trio of systems engineers from Broadcom, Qualcomm and Texas Instruments, it’s about starting with enterprise use cases and building edge clouds to offload the work. They have 12 patents.
AitoeLabs – Despite the buzz around AI video analytics for security, AitoeLabs claims solutions today are plagued with hundreds of thousands of false alarms, requiring lots of human involvement. The engineering trio founding team combines a secret sauce of contextual data with their own deep models to solve this problem. They claim a 6x reduction in human monitoring needs with their tech. They’re at $240,000 ARR with $1 million of LOIs.
Ubiquios – Companies building wireless IoT devices waste more than $1.8 billion because of inadequate embedded software options making products late to market and exposing them to security and interoperability issues. The Ubiquios wireless stack wants to simplify the development of wireless IoT devices. The company claims their stack results in up to 90 percent lower cost and up to 50 percent faster time to market. Qualcomm is a partner.
4me, Inc. – 4me helps companies organize and track their IT outsourcing projects. They have 16 employees, 92 customers and generate several million in revenue annually. Storm Ventures led a $1.65 million investment into the company.
TorchFi – You know the pop-up screen you see when you log into a Wi-Fi hotspot? TorchFi thinks it’s a digital gold mine in the waiting. Their goal is to convert that into a sales channel for hotspot owners. Their first product is a digital menu that transforms the login screen into a food ordering screen for hotels and restaurants. Cisco has selected them as one of 20 apps to be distributed on their Meraki hotspots.
Cogitai – This team of 16 PhDs wants to usher in a more powerful type of AI called continual learning. The founders are the fathers of the field — and include professors in computer science from UT Austin and U Michigan. Unlike what we commonly think of as AI, Cogitai’s AI is built to acquire new skills and knowledge from experience, much like a child does. They have closed $2 million in bookings this year, and have $5 million in funding.
LoadTap – On-demand trucking apps are in vogue. LoadTap explicitly calls out that it is not one. This team, which includes an Apple software architect and founder with a family background in trucking, is an enterprise SaaS-only solution for shippers who prefer to work with their pre-vetted trucking companies in a closed loop. LoadTap automates matching between the shippers and trucking companies using AI and predictive analytics. They’re at $90,000 ARR and growing revenue 50 percent month over month.
Ondaka – Ondaka has built a VR-like 3D platform to render industrial information visually, starting with the oil and gas industry. For these industrial customers, the platform provides a better way to understand real-time IoT data, operational and job site safety issues and how reliable their systems are. The product launched two months ago, they have closed three customers already and are projecting ARR in the six figures. They have raised $350,000 in funding.
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Rackspace acquires Salesforce specialist RelationEdge
Rackspace today announced that it has acquired RelationEdge, a Salesforce implementation partner and digital agency. The companies did not disclose the financial details of the acquisition.
At first, this may sound like an odd acquisition. Rackspace is still best known for its hosting and managed cloud and infrastructure services, after all, and RelationEdge is all about helping businesses manage their Salesforce SaaS implementations. The company clearly wants to expand its portfolio, though, and add managed services for SaaS applications to its lineup. It made the first step in this direction with the acquisition of TriCore last year, another company in the enterprise application management space. Today’s acquisition builds upon this theme.
Gerard Brossard, the executive VP and general manager of Rackspace Application Services, told me that the company is still in the early days of its application management practice, but that it’s seeing good momentum as it’s gaining both new customers thanks to these offerings and as existing customers look to Rackspace for managing more than their infrastructure. “This allows us to jump into that SaaS management practice, starting with the leaders in the market,” he told me.
Why sell RelationEdge, a company that has gained some good traction and now has about 125 employees? “At the end of the day, we’ve accomplished a tremendous amount organically with very little funding,” RelationEdge founder and CEO Matt Stoyka told me. “But there is a huge opportunity in the space that we can take advantage of. But to do that, we needed more than was available to us, but we needed to find the right home for our people and our company.” He also noted that the two companies seem to have a similar culture and mission, which focuses more on the business outcomes than the technology itself.
For the time being, the RelationEdge brand will remain and Rackspace plans to run the business “with considerable independence under its current leadership.” Brossard noted that the reason for this is RelationEdge’s existing brand recognition.
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Monzo, the U.K. challenger bank, finally rolls out Apple Pay
Monzo, the U.K. challenger bank, has finally added Apple Pay to its mobile-only current account. The just over three year-old fintech says it has been one of the most requested features for its banking app, with over 2,000 mentions of Apple Pay on Monzo’s forum, whilst its customer support team have been asked about the functionality more than 13,000 times. In other words, the rollout can’t come soon enough. Noteworthy, Monzo was able to add Google Pay all the way back in October 2017.
Meanwhile, many of its passionate and vocal users will be wondering what took Monzo so long (as an aside, rival challenger Starling was able to add Apple Pay in July 2017). The upstart bank, which usually makes a virtue of its community-driven approach and transparency hasn’t been able to say (or even fully acknowledge that the feature was coming), likely because Apple imposes strict rules on the ways its partners communicate working with the tech giant. And when you sign an NDA with Apple it’s not atypical for it to stipulate that you don’t talk about said NDA.
What we do know is that — similar to Apple’s iOS App Store when submitting an app — the Apple Pay approval process for a new bank partner is not for the faint-hearted. Industry insiders tell me that Google Pay has fewer hurdles to jump in comparison.
Now that the feature is live, Monzo is talking up the security and privacy aspect of using Apple Pay, noting that when you use a credit or debit card with Apple Pay, the actual card numbers are not stored on the device, nor on Apple servers. Instead, “a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on your device… [and] each transaction is authorised with a one-time unique dynamic security code”.
Of course, most people simply like Apple Pay for its convenience, letting you use your phone to pay rather than fumbling for a debit or credit card, and when shopping online not having to repeatedly enter card details.
Cue Monzo’s Tom Blomfield waxing lyrical in a company statement about Apple’s design and UX. “Apple is famous for building beautiful products with simple, intuitive interfaces. Their design thinking has long been a source of inspiration for us. Monzo’s mission has alway been to make sure everyone can use and manage their money effortlessly, and with Apple Pay we are one step closer to achieving that,” says the challenger bank’s co-founder and CEO.
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This jolly little robot gets goosebumps
Cornell researchers have made a little robot that can express its emotions through touch, sending out little spikes when it’s scared or even getting goosebumps to express delight or excitement. The prototype, a cute smiling creature with rubber skin, is designed to test touch as an I/O system for robotic projects.
The robot mimics the skin of octopi which can turn spiky when threatened.
The researchers, Yuhan Hu, Zhengnan Zhao, Abheek Vimal and Guy Hoffman, created the robot to experiment with new methods for robot interaction. They compare the skin to “human goosebumps, cats’ neck fur raising, dogs’ back hair, the needles of a porcupine, spiking of a blowfish, or a bird’s ruffled feathers.”
“Research in human-robot interaction shows that a robot’s ability to use nonverbal behavior to communicate affects their potential to be useful to people, and can also have psychological effects. Other reasons include that having a robot use nonverbal behaviors can help make it be perceived as more familiar and less machine-like,” the researchers told IEEE Spectrum.
The skin has multiple configurations and is powered by a computer-controlled elastomer that can inflate and deflate on demand. The goosebumps pop up to match the expression on the robot’s face, allowing humans to better understand what the robot “means” when it raises its little hackles or gets bumpy. I, for one, welcome our bumpy robotic overlords.
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The SEC creates an educational ‘token’ to stop scammers
“Travel is expensive, but we are at the cusp of a revolution that will democratize travel and leisure for everyone,” reads the breathless whitepaper for HoweyCoins. “The Internet was the first part of the revolution. The other part is blockchain technology and cryptocurrencies.”
“I’m all about HoweyCoins – this thing is going to pop at the top!” writes @boxingchamp1934, an official celebrity backer of the token. The website is full of beautiful beaches, features a handsome team of international men and women and the technology is nowhere to be seen, buried under a sea of excitement. The whitepaper is complete and well-written, focusing on the upside that is to come. Riches await if you invest in HoweyCoin, the latest ICO opportunity from trusted folks.
Or do they?
They don’t. All that breathless optimism is a site created by US Securities Exchange Commission to warn investors of scams and issues associated with token sales. The site features all the trademarks of a scammy security token, including tiered pre-sale pricing and an urgent countdown clock.
The site features a number of red flags that the SEC encourages users to watch out for, including, most importantly, claims that tokens can only go up in value. They write:
Every investment carries some degree of risk, which is reflected in the rate of return you can expect to receive. High returns entail high risks, possibly including a total loss on the investments. Most fraudsters spend a lot of time trying to convince investors that extremely high returns are “guaranteed” or “can’t miss.”
The SEC also notes that “it is never a good idea to make an investment decision just because someone famous says a product or service is a good investment,” and that it is never a good idea to invest with a credit card.
They also warn against pump and dump language found on many ICO pages. “Our past two pumps have doubled value for the period immediately after the pump for returns of over 225%,” wrote the HoweyCoins “creators,” a giant no-no in the world of investing.
You can read the rest of the red flags here.
While the site is fairly comical, it is sufficiently complete and would fool the casual observer. The SEC also posted a real-looking whitepaper that makes it clear that anyone can string together a few buzzwords and write a passable investment prospectus. That this is now a service available to anyone — for a price — makes things even scarier.
The site is part of the SEC’s outreach efforts to help investors understand ICOs.
“Strong investor protection is part of what makes American markets so strong…and striking the balance, [between innovation and investor protection] is very important,” said Chief of the SEC Cyber Unit Robert Cohen at Consensus this week. During the same panel the SEC claimed its doors were always open for questions.
Ultimately there is little separating the scams from the real token sales. This is a problem. The SEC is framing this problem in their own way based on decades of dealing with pink sheet pump and dumps and bogus get-rich-quick schemes. While HoweyCoins may not be real, there are plenty of scammers out there, and at least something like this bogus website makes it easier to spot the warning signs.
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Coinbase’s first investment, Compound, earns you interest on crypto
Compound wants to let you borrow cryptocurrency, or lend it and earn an interest rate. Most cryptocurrency is shoved in a wallet or metaphorically hidden under a mattress, failing to generate interest the way traditionally banked assets do. But Compound wants to create liquid money markets for cryptocurrency by algorithmically setting interest rates, and letting you gamble by borrowing and then short-selling coins you think will sink. It plans to launch its first five for Ether, a stable coin, and a few others, by October.
Today, Compound is announcing some ridiculously powerful allies for that quest. It’s just become the first-ever investment by crypto exchange juggernaut Coinbase’s new venture fund. It’s part of an $8.2 million seed round led by top-tier VC Andreessen Horowitz, crypto hedge fund Polychain Capital and Bain Capital Ventures — the startup arm of the big investment bank.
While right now Compound deals in cryptocurrency through the Ethereum blockchain, co-founder and CEO Robert Leshner says that eventually he wants to carry tokenized versions of real-world assets like the dollar, yen, euro or Google stock. That’s because Leshner tells me “My thesis is that almost every crypto asset is bullshit and not worth anything.”
How to get Compound interest on your crypto
Here’s how Compound tells me it’s going to work. It’s an “overnight” market that permits super-short-term lending. While it’s not a bank, it is centralized, so you loan to and borrow from it directly instead of through peers, alleviating you from negotiation. If you loan, you can earn interest. If you borrow, you have to put up 100 percent of the value of your borrow in an asset Compound supports. If prices fluctuate and your borrow becomes worth more than your collateral, some of your collateral is liquidated through a repo agreement so they’re equal.
To set the interest rate, Compound acts kind of like the Fed. It analyzes supply and demand for a particular crypto asset to set a fluctuating interest rate that adjusts as market conditions change. You’ll earn that on what you lend constantly, and can pull out your assets at any time with just a 15-second lag. You’ll pay that rate when you borrow. And Compound takes a 10 percent cut of what lenders earn in interest. For crypto-haters, it offers a way to short coins you’re convinced are doomed.
“Eventually our goal is to hand-off responsibility [for setting the interest rate] to the community. In the short-term we’re forced to be responsible. Long-term we want the community to elect the Fed,” says Leshner. If it gets the interest rate wrong, an influx of lenders or borrowers will drive it back to where it’s supposed to be. Compound already has a user interface prototyped internally, and it looked slick and solid to me.
“We think it’s a game changer. Ninety percent of assets are sitting in people’s cold storage, or wallets, or exchanges. They aren’t being used or traded,” says Leshner. Compound could let people interact with crypto in a whole new way.
The Compound creation story
Compound is actually the third company Leshner and his co-founder and CTO Geoff Hayes have started together. They’ve been teamed up for 11 years since going to college at UPenn. One of their last companies, Britches, created an index of CPG inventory at local stores and eventually got acquired by Postmates. But before that Leshner got into the banking and wealth management business, becoming a certified public accountant. A true economics nerd, he’s the chair of the SF bond oversight committee, and got into crypto five years ago.
Compound co-founder and CEO Robert Leshner
Sitting on coins, Leshner wondered, “Why can’t I realize the time value of the cryptocurrency I possess?” Compound was born in mid-2017, and came out of stealth in January.
Now with $8.2 million in funding that also came from Transmedia Capital, Compound Ventures, Abstract Ventures and Danhua Capital, Compound is pushing to build out its product and partnerships, and “hire like crazy” beyond its seven current team members based in San Francisco’s Mission District. Partners will be crucial to solve the chicken-and-egg problem of getting its first lenders and borrowers. “We are planning to launch with great partners — token projects, hedge funds and dedicated users,” says Leshner. Having hedge funds like Polychain should help.
“We shunned an ICO. We said, ‘let’s raise venture capital.’ I’m a very skeptical person and I think most ICOs are illegal,” Leshner notes. The round was just about to close when Coinbase announced Coinbase Ventures. So Leshner fired off an email asking if it wanted to join. “In 12 hours they researched us, met our team, diligenced it and evaluated it more than almost any investor had to date,” Leshner recalls. Asked if there’s any conflict of interest given Coinbase’s grand ambitions, he said, “They’re probably our favorite company in the world. I hope they survive for 100 years. It’s too early to tell they overlap.”
Conquering the money markets
There are other crypto lending platforms, but none quite like Compound. Centralized exchanges like Bitfinex and Poloniex let people trade on margin and speculate more aggressively. But they’re off-chain, while Leshner says Compound is on-chain, transparent and can be built on top of. That could make it a more critical piece of the blockchain finance stack. There’s also a risk of these exchanges getting hacked and your coins getting stolen.
Meanwhile, there are plenty of peer-to-peer crypto lending protocols on the Ethereum blockchain, like ETHLend and Dharma. But interest rates, no need for slow matching, flexibility for withdrawing money and dealing with a centralized party could attract users to Compound.
Still, the biggest looming threat for Compound is regulation. But to date, the SEC and regulators have focused on ICOs and how people fundraise, not on what people are building. People aren’t filing lawsuits against actual products. “All the operations have flown beneath the radar and I think that’s going to change in the next 12 months,” Leshner predicts. How exactly they’ll treat Compound is up in the air.
One source in the crypto hedge fund space told me about forthcoming regulation: “You’re either going to get annihilated and have to disgorge profits or dissolve. Or you pay a fine and you’re among the first legal funds in the space. This is the gamble you take before asset classes get baptized.” As Leshner confirmed, “That’s the number one risk, period.”
Money markets are just one piece of the financial infrastructure puzzle that still needs to emerge around blockchain. Custodians, auditors, administrators and banks are still largely missing. When those get hammered out to make the space safer, the big money hedge funds and investment banks could join in. For Compound, getting the logistics right will require some serious legal ballet.
Yet Leshner is happy to dream big despite all of the crypto world’s volatility. He concludes, “We want to be like Black Rock with a trillion under management, and we want to have 25 employees when we do that. They probably have [tens of thousands] of employees. Our goal is to be like them with a skeleton team.”
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Coinbase CEO Brian Armstrong to talk the future of cryptocurrency at Disrupt SF
Coinbase has come a long way since its launch in 2012. The company has raised more than $225 million and paved the way for cryptocurrencies to enter the mainstream by providing a digital currency exchange. Which is why we’re absolutely thrilled to have Coinbase co-founder and CEO Brian Armstrong join us on the main stage at TechCrunch Disrupt SF in September.
Armstrong worked as a developer for IBM and consultant at Deloitte before joining Airbnb as a software engineer in 2011. At Airbnb, Armstrong focused on fraud prevention, giving him the opportunity to learn about payment systems across the 190 countries Airbnb serves.
In 2012, Armstrong co-founded Coinbase and gave a budding demographic of cryptocurrency enthusiasts the opportunity to trade in their USD for bitcoins, and later the digital currency of their choice. Coinbase currently serves over 10 million customers across 32 countries, providing custody for more than $10 billion in digital assets.
In fact, Coinbase was valued at $1.6 billion following a $100 million funding round in August 2017.
In April, the company unveiled an early-stage fund for cryptocurrency startups, and acquired Earn.com for $100 million. As part of the acquisition, the company brought on Balaji Srinivasan as its first CTO.
There were also reports that Coinbase approached the SEC to become a licensed brokerage firm and electronic trading venue, which would allow the company to expand beyond the four coins (Bitcoin, Bitcoin Cash, Ethereum, Litecoin) that trade on the platform now.
Just yesterday, Coinbase announced that it would offer a new suite of services aimed at institutional investors, who are beginning to warm up to cryptocurrencies.
There is plenty to discuss with Armstrong come September, and we’re absolutely thrilled to have him join the stellar Disrupt SF agenda. You can head over here to buy yourself tickets. See you there!
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OpenClassrooms raises another $60 million
French startup OpenClassrooms is raising $60 million from General Atlantic, with existing investors Citizen Capital, Alven and Bpifrance also participating.
OpenClassrooms is the most popular massive open online course platform in France. But the startup has evolved beyond on-demand courses to provide full-fledged degrees. You can now get a degree certified by the French state by studying full time on OpenClassrooms.
Every month, 3 million users access OpenClassrooms. Many of them just want to learn something and maybe get a certification. But more and more people are following one of the 30 bachelor and master degrees. You can study many things from web and mobile development to data management and marketing.
But OpenClassrooms isn’t just leaving you with a big pile of courses to study. The company has created a community of mentors who will regularly check with you to see how you’re doing. There are 600 mentors working for OpenClassrooms.
These paths aren’t cheap as you’ll need to pay around €300 per month ($350). But it’s still cheaper and more flexible than attending a traditional engineering school right after the baccalauréat. For instance, if you want to work on the side and live in a cheap city, you can do that as you just need a computer and an internet connection.
The company will even guarantee that you’ll find a job after that. If you can’t find a job within six months, OpenClassrooms will pay you back for the degree.
And OpenClassrooms recently unveiled the next step. As OpenClassrooms students easily find a job after getting a degree, the startup started working with companies directly.
IT service company Capgemini is always looking for new people as there’s usually a high turnover in IT service companies. That’s why Capgemini is hiring trainees with OpenClassrooms.
Students learn a new skill and then work part time for Capgemini. OpenClassrooms charges Capgemini directly, students don’t have to pay for their studies and get a job instantly. It’s a win for everyone.
When I first learned about this program, I thought OpenClassrooms had finally found a highly profitable business model. Now, the company has signed deals with Orange and Google.org.
With today’s funding round, the team is going to double in size. “Within a year, OpenClassrooms will provide a hundred digital degrees, including a third of them in English,” co-founder and CEO Pierre Dubuc told me.
Many will focus on digital skills, such as data science, computer science and cybersecurity. But there will also be non-technical degrees around HR, management, accounting, marketing and communication. OpenClassrooms could end up becoming one of the biggest universities in the world.
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Deliveroo employees are getting shares, riders are getting nothing
Food delivery startup Deliveroo is feeling generous today. The company is handing out equity to all full-time staff members. In other words, 2,000 employees are going to receive the equivalent of $13.5 million in Deliveroo shares.
“Our phenomenal growth and success has been made possible thanks to the hard work, commitment and passion of the people who make this company what it is,” co-founder and CEO Will Shu told Reuters. “And that deserves recognition which is why I want all employees to be owners in Deliveroo and to have a real stake in the company’s future as we expand and grow.”
This is a great way to prove that you care about your employees. And yet, there are a few caveats.
First, the company is currently worth over $2 billion. In total, Deliveroo is just handing out 0.675 percent of the company to its employees. I’m sure plenty of early employees already have equity.
But those who joined more recently aren’t likely to get rich over this — it represents a $6,750 equity bonus per employee on average. And shares usually vest after a certain amount of time.
Second, this is the perfect example of the gig economy. In addition to the usual benefits, full-time employees are getting rewarded once again. If you’re a self-employed rider, Deliveroo doesn’t want to thank you.
Arguably, Deliveroo still thinks that riders are disposable. They might be the ones who pick up food in restaurants and hand it to customers, but they will never be full-time employees.
Sure, Deliveroo and Uber Eats are now providing free accident insurance coverage, but it mostly covers hospital bills. Riders have been asking for better rights, and this insurance package is just a good way to ease the pressure.
Working with contractors at scale is the backbone of Uber, Deliveroo and many other on-demand startups. This way, startups don’t have to pay the minimum wage or expensive benefits. Startups can also terminate their relationships with their ‘partners’ without any consequence.
It’s a great way to pressure your contractors in working more for less money. And today’s move by Deliveroo is further proof that riders are just an afterthought.
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