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Many in the tech industry saw the threat of the novel coronavirus early and reacted correctly. Fewer have seemed prepared for its aftereffects, like the outflow of talented employees from very pricey office real estate in expensive and troubled cities like San Francisco.
And few indeed have seemed prepared for the Black Lives Matter protests that have followed the death of George Floyd. This was maybe the easiest to see coming, though, given how visible the structural racism is in cities up and down the main corridors of Silicon Valley.
Today, the combination of politics, the pandemic and the protests feels almost like a market crash for the industry (except many revenues keep going up and to the right). Most every company is now fundamentally reconsidering where it will be located and who it will be hiring — no matter how well it is doing otherwise.
Some, like Google and Thumbtack, have been caught in the awkward position of scaling back diversity efforts as part of pandemic cuts right before making statements in support of the protesters, as Megan Rose Dickey covered on TechCrunch this week. But it is also the pandemic helping to create the focus, as Arlan Hamilton of Backstage Capital tells her:
It is like the world and the country has a front-row seat to what Black people have to witness, take in, and feel all the time. And it was before they were seeing some of it, but they were seeing it kind of protected by us. We were kind of shielding them from some of it… It’s like a VR headset that the country is forced to be in because of COVID. It’s just in their face.
This also putting new scrutiny on how tech is used in policing today. It is renewing questions around who gets to be a VC and who gets funding right when the industry is under new pressure to deliver. It is highlighting solutions that companies can make internally, like this list from BLCK VC on Extra Crunch.
As with police reforms currently in the national debate, some of the most promising solutions are local. Property tax reform, pro-housing activism and sustainable funding for homelessness services are direct ways for the tech industry to address the long history of discrimination where the modern tech industry began, Catherine Bracy of TechEquity writes for TechCrunch. These changes are also what many think would make the Bay Area a more livable place for everyone, including any startup and any tech employee at any tech company (see: How Burrowing Owls Lead To Vomiting Anarchists).
Something to think about as we move on to our next topic — the ongoing wave of tech departures from SF.
Where will VCs follow founders to now?
In this week’s staff survey, we revisit the remote-first dislocation of the tech industry’s core hubs. Danny Crichton observes some of the places that VCs have been leaving town for, and thinks it means bigger changes are underway:
“Are VCs leaving San Francisco? Based on everything I have heard: yes. They are leaving for Napa, leaving for Tahoe, and otherwise heading out to wherever gorgeous outdoor beauty exists in California. That bodes ill for San Francisco’s (and really, South Park’s) future as the oasis of VC.
But the centripetal forces are strong. VCs will congregate again somewhere else, because they continue to have that same need for market intelligence that they have always had. The new, new place might not be San Francisco, but I would be shocked just given the human migration pattern underway that it isn’t in some outlying part of the Bay Area.
And then he says this:
As for VCs — if the new central node is a bar in Napa and that’s the new “place to be” — that could be relatively more permanent. Yet ultimately, VCs follow the founders even if it takes time for them to recognize the new balance of power. It took years for most VCs to recognize that founders didn’t want to work in South Bay, but now nearly every venture firm of note has an office in San Francisco. Where the founders go, the VCs will follow. If that continues to be SF, its future as a startup hub will continue after a brief hiatus.
It’s true that another outlying farming community in the region once became a startup hub, but that one had a major research university next door, and at the time a lot of cheap housing if you were allowed access to it. But Napa cannot be the next Palo Alto because it is fully formed today as a glorified retirement community, Danny.
I’m already on the record for saying that college towns in general are going to become more prominent in the tech world, between ongoing funding for innovative tech work and ongoing desirability for anyone moving from the big cities. But I’m going to add a side bet that cities will come back into fashion with the sorts of startup founders that VCs would like to back. As Exhibit A, I’d like to present Jack Dorsey, who started a courier dispatch in Oakland in 2000, and studied fashion and massage therapy during the aftermath of the dot-com bubble. His success with Twitter a few years later in San Francisco inspired many founders to move as well.
Creative people like him are drawn to the big, creative environments that cities can offer, regardless of what the business establishment thinks. If the public and private sectors can learn from the many mistakes of recent decades (see last item) who knows, maybe we’ll see a more equal and resilient sort of boom emerge in tech’s current core.
Insurance provider Lemonade files for IPO with that refreshing common-stock flavor
There are probably some amazing puns to be made here but it has been a long week, and the numbers speak for themselves. Lemonade sells insurance to renters and homeowners online, and managed to reach a private valuation of $3.5 billion before filing to go public on Monday — with the common stockholders still comprising the majority of the cap table.
Danny crunched the numbers from the S-1 on Extra Crunch to generate the table, included, that illustrates this rather unusual breakdown. Usually, as you almost certainly know already, the investors own well over half by the time of a good liquidity event. “So what was the magic with Lemonade?” he ponders. “One piece of the puzzle is that company founder Daniel Schreiber was a multi-time operator, having previously built Powermat Technologies as the company’s president. The other piece is that Lemonade is built in the insurance market, which can be carefully modeled financially and gives investors a rare repeatable business model to evaluate.”
Adapting enterprise product roadmaps to the pandemic
Our investor surveys for Extra Crunch this week covered the space industry’s startup opportunities, and looked at how enterprise investors are assessing the impact of the pandemic. Here’s Theresia Gouw of Acrew Capital, explaining how two of their portfolio companies have refocused in recent months:
A common theme we found when joining our founders for these strategy sessions was that many pulled forward and prioritized mid- to long-term projects where the product features might better fit the needs of their customers during these times. One such example in our portfolio is Petabyte’s (whose product is called Rhapsody) accelerated development of its software capabilities that enable veterinarians to provide telehealth services. Rhapsody has also incorporated key features that enable a contactless experience when telehealth isn’t sufficient. These include functionality that enables customers to check-in (virtual waiting room), sign documents, and make payments from the comfort and safety of their car when bringing their pet (the patient!) to the vet for an in-person check-up.
Another such example would be PredictHQ, which provides demand intelligence to enterprises in travel, hospitality, logistics, CPG, and retail, all sectors who saw significant change (either positive or negative) in the demand for their products and services. PredictHQ has the most robust global dataset on real-world events. Pandemics and all the ensuing restrictions and, then, loosening of restrictions fall within the category of real-world events. The company, which also has multiple global offices, was able to incorporate the dynamic COVID government responses on a hyperlocal basis, by geography, and equip its customers (e.g., Domino’s, Qantas, and First Data) with up to date insights that would help with demand planning and forecasting as well as understanding staffing needs.
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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
After a pretty busy week on the show we’re here with our regular Friday episode, which means lots of venture rounds and new venture capital funds to dig into. Thankfully we had our full contingent on hand: Danny “Well, you see” Crichton, Natasha “Talk to me post-pandemic” Mascarenhas, Alex “Very shouty” Wilhelm and, behind the scenes, Chris “The Dad” Gates.
Make sure to check out our IPO-focused Equity Shot from earlier this week if you haven’t yet, and let’s get into today’s topics:
- Instacart raises $225 million. This round, not unexpected, values the on-demand grocery delivery startup at $13.7 billion — a huge sum, and one that should make it harder for the well-known company to sell itself to anyone but the public markets. Regardless, COVID-19 gave this company a huge updraft, and it capitalized on it.
- Pando raises $8.5 million. We often cover rounds on Equity that are a little obvious. SaaS, that sort of thing. Pando is not that. Instead, it’s a company that wants to let small groups of individual pool their upside and allow for more equal outcomes in an economy that rewards outsized success.
- Ethena raises $2 million. Anti-harassment software is about as much fun as the dentist today, but perhaps that doesn’t have to be the case. Natasha talked us through the company, and its pricing. I’m pretty bullish on Ethena, frankly. Homebrew, Village Global and GSV took part in the financing event.
- Vendr raises $4 million. Vendr wants to help companies cut their SaaS bills, through its own SaaS-esque product. I tried to explain this, but may have butchered it a bit. It’s cool, I promise.
- Facebook is getting into the CVC game. This should not be a surprise, but we were also not sure who was going to want Facebook money.
- And, finally, Collab Capital is raising a $50 million fund to invest in Black founders. Per our reporting, the company is on track to close on $10 million in August. How fast the fund can close its full target is something we’re going to keep an eye on, considering it might get a lot harder a lot sooner.
And that is that; thanks for lending us your ears.
The metaverse is real: Zuck’s ‘incredible’ photorealistic tech wows crypto twitter
Often roasted for his metaverse tech demos, Zuckerberg appears to have blown away internet users with his latest avatar tech.
Often roasted for his metaverse tech demos, Zuckerberg appears to have blown away internet users with his latest avatar tech.
While critics have been busy writing eulogies for Meta’s metaverse dream over the last few years, Mark Zuckerberg’s latest demonstration of its photorealistic avatars shows it could be pretty far from dead after all.
Appearing on a Sept. 28 episode of the Lex Fridman podcast, Zuckerberg and the popular computer scientist engaged in a one-hour face-to-face conversation. Only, it wasn’t actually in person at all.
Instead, the entirety of Fridman and Zuckerberg’s conversation used photorealistic realistic avatars in the metaverse, facilitated through Meta’s Quest 3 headsets and noise-canceling headphones.
Here's my conversation with Mark Zuckerberg, his 3rd time on the podcast, but this time we talked in the Metaverse as photorealistic avatars. This was one of the most incredible experiences of my life. It really felt like we were talking in-person, but we were miles apart It's… pic.twitter.com/Nu8a3iYWm0— Lex Fridman (@lexfridman) September 28, 2023
However, in this case, users on social media, including those from Crypto Twitter, seemed to be genuinely impressed by the sophistication of the technology.
The Metaverse has upgraded pic.twitter.com/QT1LAkjQGB— Dexerto (@Dexerto) September 28, 2023
“Ok the metaverse is officially real,” wrote pseudonymous account Gaut, a rare moment of seemingly genuine praise from a user typically known for his satirical and sarcastic takes on current events.
“9 minutes into Lex / Mark metaverse podcast I forgot I was watching avatars,” wrote coder Jelle Prins.
Fridman alsoshared his impressions of the experience in real-time, noting how “close” Zuckerberg felt to him during the interview. Moments later, he explained how difficult it was to recognize that Zuckerberg’s avatar wasn’t his physical body.
“I’m already forgetting that you’re not real.”
The technology on display is the newest version of Codec Avatars. First revealed in 2019, Codec Avatars is one of Meta’s longest-running research projects which aims to create fully photorealistic real-time avatars that work by way of headsets with face tracking sensors.
However, users may need to wait a few years before donning their own realistic avatars, said Zuckerberg, explaining that the tech used requires expensive machine learning software and full head scans by specialized equipment featuring more than 100 different cameras.
This would be, at the very least, three years away from being available to everyday consumers, he said.
Still, Zuckerberg noted that the company wants to reduce the barriers as much as possible, explaining that in the future, these scans may be achievable with a regular smartphone.
The most-recent demonstration comes just one day after Meta unveiled its answer to ChatGPT, revealing its newest AI assistant Meta AI, which is integrated across a range of unique chatbots, apps and even smart glasses.crypto crypto
New Tables Show Intermediate-Term Overview is Negative
We have introduced two new tables in the DecisionPoint ALERT to give an overview of trend and BIAS for the major market indexes, sectors, and industry…
We have introduced two new tables in the DecisionPoint ALERT to give an overview of trend and BIAS for the major market indexes, sectors, and industry groups that we track. The first is our Market Scoreboard, which shows the current Intermediate-Term and Long-Term Trend Model (ITTM and LTTM) signal status. To review:
- The IT Trend Model generates a BUY Signal when the 20-day EMA crosses up through the 50-day EMA (Silver Cross).
- The IT Trend Model generates a NEUTRAL Signal when the 20-day EMA crosses down through the 50-day EMA (Dark Cross) above the 200-day EMA. This is a soft SELL Signal, going to cash or a hedge. It avoids being short in a bull market.
- The IT Trend Model generates a SELL Signal when the 20-day EMA crosses down through the 50-day EMA (Dark Cross) below the 200-day EMA.
- The LT Trend Model generates a BUY Signal when the 50-day EMA crosses up through the 200-day EMA (Golden Cross).
- The LT Trend Model generates a SELL Signal when the 50-day EMA crosses down through the 200-day EMA (Death Cross).
The current table shows that there is considerable stress in the intermediate-term; however, the long-term is still comfortably green for market and sector indexes. But we need to remember that the market indexes are cap-weighted, which means that they can be held aloft by large-cap stocks. The 11 sectors shown are composed solely of S&P 500 components, meaning that they will reflect the strength of that index. Industry groups, however, are not doing as well because they are less protected by the large-cap umbrella.
Next, let's look at how we determine the BIAS of a given index. First, the Silver Cross Index shows the percentage of stocks in an index that have a Silver Cross (20-day EMA above the 50-day EMA), and the Golden Cross Index shows the percentage of stocks in the index that have a Golden Cross (50-day EMA above the 200-day EMA). Next, we determine BIAS based upon the relationship of the Silver Cross Index to its 10-day EMA and the relationship of the Golden Cross Index to its 20-day EMA. When they are above, the BIAS is bullish. When they are below, the BIAS is bearish. See the chart below.
The following table shows the current intermediate-term and long-term BIAS of the market, sector, and industry group indexes we follow. Note that the picture is extremely bearish, but it is a very oversold condition, which will shift toward the positive in the event of a strong rally.
Conclusion: These new tables, available daily in the DecisionPoint ALERT, provide a quick overview of market trend and BIAS. They are intended to help focus attention on areas that may be of interest. They do not give action commands, but provide information flags to prompt assessment of the relevant charts.
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Tesla rival Polestar reveals lineup of its new electric vehicles
The Sweden-based electric vehicle maker completes key testing before launching production of its new SUV.
Tesla's Model Y crossover, the best-selling vehicle globally, is the standard that electric vehicle makers strive to compete with. The Austin, Texas, automaker sold about 267,200 Model Y vehicles in the first three months of the year and continued leading the pack well into the second quarter.
It's no wonder that the Model Y is leading all vehicles in sales as it retails for about $39,390 after tax credits and estimated gas savings. Ford (F) - Get Free Report hopes to compete with the Model Y about a year from now when it rolls out the new Ford Explorer SUV that is expected to start at $49,150.
Plenty of competition in electric SUV space
Mercedes-Benz (MBG) however, has a Tesla rival model with its EQB all-electric compact sports utility vehicle with an estimated 245 mile range on a charge with 70.5 kWh battery capacity, 0-60 mph acceleration in 8 seconds and the lowest price of its EVs at a $52,750 manufacturers suggested retail price.
Tesla's Model X SUV has a starting price of about $88,490, while the Model X full-size SUV starts at $98,490 with a range of 348 miles. BMW's (BMWYY) - Get Free Report xDrive50 SUV has a starting price of about $87,000, a range up to 311 miles and accelerates 0-60 miles per hour in 4.4 seconds.
Polestar (PSNY) - Get Free Report plans to have a lineup of five EVs by 2026. The latest model that will begin production in the first quarter of 2024 is the Polestar 3 electric SUV, which is completing its development. The vehicle just finished two weeks of testing in extreme hot weather of up to 122 degrees in the desert of the United Arab Emirates to fine tune its climate system. The testing was completed in urban cities and the deserts around Dubai and Abu Dhabi.
“The Polestar 3 development and testing program is progressing well, and I expect production to start in Q1 2024. Polestar 3 is at the start of its journey and customers can now visit our retail locations around the world to see its great proportions and sit in its exclusive and innovative interior,” Polestar CEO Thomas Ingenlath said in a statement.
Polestar plans 4 new electric vehicles
Polestar 3, which will compete with Tesla's Model X, Model Y, BMW's iX xDrive50 and Mercedes-Benz, has a starting manufacturer's suggested retail price of $83,000, a range up to 300 miles and a charging time of 30 minutes. The company has further plans for the Polestar 4, an SUV coupé that will launch in phases in late 2023 and 2024, as well as a Polestar 5 electric four-door GT and a Polestar 6 electric roadster that the company says "are coming soon."
The Swedish automaker's lone all-electric model on the market today is the Polestar 2 fastback, which has a manufacturer's suggested retail price of $49,900, a range up to 320 miles and a charging time of 28 minutes. The vehicle accelerates from 0-60 miles per hour in 4.1 seconds. Polestar 2 was unveiled in 2019 and delivered in Europe in July 2020 and the U.S. in December 2020.
Polestar 1, the company's first vehicle, was a plug-in hybrid that went into production in 2019 and was discontinued in late 2021, according to the Polestar website.
The Gothenburg, Sweden, company was established in 1996 and was sold to Geely affiliate Volvo in 2015.
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