The team behind Codementor launches Arc to help companies hire talented developers around the world

Arc, a platform that wants to simplify the process of hiring developers who work remotely, is launching officially today. The new company grew out of Techstars-backed Codementor, an online education platform for software developers. Codementor will continue to operate as a standalone product under Arc.

While there are already many freelancing platforms, Weiting Liu, the founder and CEO of Arc and Codementor, said Arc is more focused on long-term contractor and full-time employee positions instead of short-term gigs. To make the recruitment process easier for tech companies, all developers on its platform are vetted by Arc in a process modeled on the hiring assessments used by tech companies in Silicon Valley. Arc’s clients have already included Spotify, Chegg, Hims, Fivestars and AppLovin.

Codementor launched in 2014 to connect developers with instructors around the world for coding education. Arc has the same mission of helping boost the careers of engineers who live outside of major tech hubs.

“I think Arc is a natural evolution. Codementor had hundreds of thousands of developers in the community already and that created a very strong and inclusive community to help developers worldwide continuously improve their skills,” says Liu. “We definitely see Codementor and its network creating a strong funnel of talented developers who want to work remotely.”

Remote hiring has benefits like increasing the talent pool for tech companies while helping employees maintain work-life balance or avoid moving to high cost-of-living areas. But despite the increase in remote hiring (for example, Stripe recently described its remote engineers as the company’s “fifth engineering hub”), there are still many hurdles to overcome.

The team of Liu’s first startup, Y Combinator alum SocialPicks, were based in different cities. In 2006, that meant everyone had to find a way to work together even though collaboration tools like Slack and Trello didn’t exist yet. But while it has become much more easier to work remotely over the past decade, hiring people who live far away still presents a lot of friction for companies. “From an employers’ perspective, there are a lot of fears and unknowns for hiring strangers online for a permanent, full-time role, but I think things are changing,” says Liu.

He adds that Arc is different from other hiring platforms like AngelList or We Work Remotely because of its vetting process, designed to identify developers who can stay with a company for a long time.

“People can still hire remote developers for short-term contracts, but we want to enable more companies to hire long-term, full-time regular employees who are not based in their ZIP code, but should be treated no differently than their Bay Area counterparts because they are as good, if not better, than Silicon Valley developers,” Liu says.

Arc pre-screens engineers and teams using what it describes as “Silicon Valley-caliber technical and behavioral assessments.” Candidates go through behavioral and technical interviews conducted by senior developers and technical recruiters who have worked for Google, Facebook and other big tech companies. In order to judge how well they will work with a team in another location, Arc also asks developers to prepare programming during the interview process to simulate the process of collaborating remotely.

As Arc grows larger, Liu says it will build tools that will help them gauge developers at scale, as well as features to companies manage remote workers.

California recently passed a significant new bill that, if signed into law, would dramatically change the gig economy by requiring companies to give independent contractors who do the work of employees minimum wage, workers’ compensation and other benefits. Liu hopes this signifies a shift in how remote workers are viewed.

“There are a lot of first-generation online platforms for ‘remote work,’ but most are freelancing work. Platforms like Fiverr and Upwork are pioneers of this space, so they are the first generation of online freelancing platforms,” Liu says. “They came into a world where people felt comfortable working together in very short-term freelancing gigs. I think the second phase means there is increasingly higher trust and better infrastructure to enable long-term, permanent full-time work to be made possible remotely, and we want to be the main facilitator of that.”

Computer scientist Richard Stallman, who defended Jeffrey Epstein, resigns from MIT CSAIL and the Free Software Foundation

Computer scientist and open software advocate Richard Stallman said he has resigned from his position as a visiting scientist at MIT’s Computer Science and Artificial Intelligence Lab (CSAIL) after describing a victim of sex trafficker Jeffrey Epstein as “entirely willing” in emails sent to a department list. Stallman has also stepped down from his roles as president and board director at the Free Software Foundation, the nonprofit he founded in 1985.

Last week, the Daily Beast reported that Stallman had also called for the legalization of child pornography and abolishment of age of consent laws on his personal blog in multiple posts published over the course of 15 years.

In his MIT CSAIL resignation, also posted to his personal blog, Stallman wrote: “To the MIT Community, I am resigning effective immediately from my position in CSAIL at MIT. I am doing this due to pressure on MIT and me over a series of misunderstandings.”

MIT has been under scrutiny for its ties to Epstein, who a New Yorker investigation found had secured $7.5 million in donations for the MIT Media Lab, far more than what was previously disclosed. As a result, its director, Joi Ito, resigned last week and MIT ordered an investigation into the Media Lab’s ties to Epstein, who was found dead in his jail cell last month while awaiting federal trial on sex trafficking charges.

As part of its preliminary findings, MIT president Rafael Reif admitted that the law firm conducting the investigation had uncovered a letter he wrote to thank Epstein for a donation in 2012, four years after Epstein had already pled guilty to procuring for prostitution a girl under 18. “I apparently signed this letter on August 16, 2012, about six weeks into my presidency,” Reif wrote. “Although I do not recall it, it does bear my signature.”

Stallman’s emails were first made public last week by mechanical engineer and MIT alum Selam Jie Gano (the entire thread was later published by Vice). In an email sent to a MIT CSAIL mailing list earlier this month, Stallman wrote that Virginia Giuffre, one of Epstein’s sex trafficking victims, who testified that she had been ordered to have sex with late MIT professor Marvin Minsky during a trip to the U.S. Virgin Islands when she was 17, had likely “presented herself to him as entirely willing.” He also wrote that “I’ve concluded from various examples of accusation inflation that it is absolutely wrong to use the term ‘sexual assault’ in an accusation.”

Gano also published an email that Stallman sent to another CSAIL list that included undergraduate students. In it, he said “I think it is morally absurd to define ‘rape’ in a way that depends on minor details such as which country it was in or whether the victim was 18 years old or 17.”

 

SmartNews’ latest news discovery feature shows users articles from across the political spectrum

Even before the 2016 election, political polarization was increasing, with Americans so entrenched in the news sources they rely on that the Pew Research Center said “liberals and conservatives inhabit different worlds.” Now SmartNews, the news aggregation app that recently hit unicorn funding status, wants to give users a way to step out of their bubbles with a feature called News From All Sides.

News From All Sides is an option located under the politics tab in SmartNews’ app. A slider at the bottom allows users to see articles about a specific news event sorted into five groups, ranging from most liberal to most conservative. Now available for new users in the United States, the feature will gradually roll out as the company fine-tunes it.

SmartNews News From All Sides feature

News From All Sides was created for readers who want to see other points of view, but might be overwhelmed by an online search, says Jeannie Yang, SmartNews’ senior vice president of product. It also aims to provide more transparency about news algorithms, which have been blamed for exacerbating political polarization.

Before developing the feature, SmartNews team conducted research and focus groups in places including Minneapolis and cities in North Carolina to understand how people across the country consume political news online.

“We found that across the board, the last [presidential] election was not just a wakeup call about what news reporting is, but users also expressed that they are much, much more aware of algorithms running underneath what they see. They might not know how it works, but they know there is something else going on,” Yang says.

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The political leanings of publications that appear in News From All Sides were categorized by Smartnews’ content team, which includes journalists who previously worked at the Wall Street Journal, Bloomberg, Fox News and other major news outlets. An AI-based algorithm decides which headlines appear in each category. As the feature goes through new iterations, Yang says SmartNews will make changes based on reader feedback. For example, future versions might look at the positions taken in specific articles and include more than five categories on the slider.

News From All Sides is an eye-opener along the lines of “Blue Feed, Red Feed,” an interactive feature (now archived) by the Wall Street Journal that demonstrated how much someone’s political leanings can influence what Facebook’s algorithms display on their News Feed.

Of course, there are many people who are content to be ensconced in their own news bubbles and may not be interested in News From All Sides, even with the upcoming presidential election. Features like it won’t fix political polarization, but for people who are curious about different points of view, even ones they strongly disagree with, News From All Sides gives them a simple way to explore more coverage.

“We definitely discussed that,” says Yang. “The feature is not initially targeted to everyone. It targets people who are more political news junkies, who are checking their phones for news multiple times a day and will actively seek out other sources, so they might go on Google News and go down a rabbit hole.”

“As more readers consider how they are going to vote, it will also help them with perspectives,” Yang adds. “It’s not something that will appeal to everyone broadly, but we hope that we will adjust a pain point for this core group and then iterate it to something more universal.”

SmartNews was founded in Japan, but the slider is currently only on its app for the U.S., since political polarization is a major issue there. Yang says the feature is one part of of SmartNews’ goal to improve discovery in all news topics.

“Our mission is to break people out of filter bubbles and personalize discovery with the idea that recommendation algorithms can expand interests, instead of narrowing your interests,” she says. “We’re thinking of how to create more transparency and also expose readers to something they might not usually see, but present it in a fun way, like a serendipitous discovery.”

Spotify acquires SoundBetter, a music production marketplace, for an undisclosed sum

Spotify today took another step in its efforts to build out services for artists to help diversify itself away from a business model predicated on paying music streaming royalties to labels: it has acquired SoundBetter, a music production marketplace for artists, producers, and musicians to connect on specific projects; and for people who are looking to distribute music tracks to those who want to license them.

SoundBetter has about 180,000 registered users and has paid out more than $19 million to musicians and producers to date, averaging around $1 million per month currently, itself taking a cut by way of a commission (of an undisclosed percentage) on each deal secured through the platform.

Financial terms of the deal are not being disclosed, meaning it’s unlikely to be a significant sum for the $24 billion streaming giant, which now has 232 million users, including 108 million Spotify Premium subscribers. New York-based SoundBetter had raised an undisclosed amount of funding from investors including 500 Startups, Foundry Group, Eric Ries and Verizon Ventures when it was still called Nautilus under AOL (disclosure: TechCrunch is part of Verizon Media). Its last funding — convertible debt from Drummond Road and others — was back in 2015.

SoundBetter is not being shut down with the acquisition: a spokesperson confirmed to TechCrunch that it will be business as usual as Spotify and the startup work on integrating SoundBetter’s services with Spotify for Artists, which currently offers musicians and others analytics on Spotify tracks and other services to help market themselves.

SoundBetter was founded back in 2012 by Shachar Gilad (CEO) and Itamar Yunger (CTO) and operates two main services. Its main business is an online marketplace for musicians to source singers, sound engineers, producers and other music and audio professionals to put the finishing touches on tracks (think Fiverr or Behance, but specifically for music). In June this year, it launched a newer marketplace called Tracks for people to license finished music, competing with the likes of Epidemic Sound (which earlier this year raised money at a $370 million valuation).

Interestingly, Spotify had tried to launch a direct music distribution platform in the past — including with an investment in DistroKid, a music distribution service that supports cross-platform uploads — but the effort never left the beta phase and was then shut down this past July. That decision possibly make more sense now, since the move might have been made to pave the way for SoundBetter.

Indeed, for Spotify, the deal is a signal that the company is going to continue investing in more behind-the-scenes services for artists and others in the music ecosystem. There are a few reasons why this needs to happen.

First, there is the financial predicament of musicians themselves. They have long lamented about how little they earn from Spotify, so having additional services available to them either to make money, or to at least operate more efficiently in their craft, can only be a boost to that relationship.

Second, there is the basics of Spotify’s streaming business for Spotify itself. The company says it has paid out  more than €13 billion ($14.3 billion) to rights holders since launch — there is money paid out with each stream — and that it’s renegotiating label deals all the time, but the company is still operating at a loss from its basic business model (albeit the loss appears to be shrinking).

Third, diversifying could help take some pressure off the streaming side of the business overall. Even putting the profitability to one side, last quarter, Spotify faced some criticism (and a drop in its share price) for missing its own targets for subscription growth

“As we build out our tools for creators, we want to give them the resources they need to thrive. SoundBetter has the same vision,” said Beckwith Kloss, VP Product, Creator at Spotify, in a statement.  “We’re excited that creators can generate income through SoundBetter, as well as benefit from its network of top professionals – from instrumentalists to songwriters to producers – as they perfect their tracks.”

Spotify has over the years amassed a growing list of assets that take the platform beyond basic music streaming, with a lot of attention of late focused on spoken word content, providing cloud-based studio services by way of SoundTrap (acquired by Spotify in 2017), and podcast platform Anchor (acquired last year).

But music continues to be the beating drum of the platform — with paid streaming continuing to grow at the expense of the physical music business. So, Spotify will continue to build up that area of its business, too (not least also because competitors like Apple are continuing to build up its own services for artists that bypass traditional labels). 

SoundBetter already has a decent, if relatively small, business, with its fair share of big names. It claims that “Kanye West’s Producer, Hoobastank’s Drummer, Jamiroquai’s Guitarist, Beyonce’s Songwriter, Joe Cocker’s Bass player, Herbie Hancock’s Engineer, Morrissey’s Guitarist, The Killers’ Mixing Engineer, and George Michael’s Mastering Engineer” are among those using its services. Getting acquired will give it a big boost in exposure: Spotify for Artists currently has 400,000 registered users, but with the platform itself a cornerstone of digital music distribution, Spotify hopes that with the right mix of services, including the kind that SoundBetter has built, that number can grow much bigger.

SoundBetter offers the most comprehensive global marketplace for music and audio production professionals for hire in the world along with a member community spanning 176 countries and 14,000 cities worldwide,” said SoundBetter Co-Founder and CEO Shachar Gilad. “We are excited to benefit from Spotify’s global scale, resources, and vision to expand our network and drive more economic opportunities for artists of all levels.”

SimShine raises $8 million for home security cameras that use edge computing

SimShine, a computer vision startup based in Shenzhen, has raised $8 million in pre-Series A funding for SimCam, its line of home security cameras that use edge computing to keep data on-device. The funding was led by Cheetah Mobile, with participation from Skychee, Skyview Fund and Oak Pacific Investment.

Earlier this year, SimShine raised $310,095 in a crowdfunding campaign on Kickstarter. It will use its pre-Series A round for product development and hiring.

SimShine’s team started off developing computer vision and edge computing software, spending five years working with enterprise clients before launching SimCam.

The company plans to release more smart home products that use edge computing with the ultimate goal of building a IoT platform to connect different devices, co-founder and chief marketing officer Joe Pham tells TechCrunch. SimCam currently integrates with Amazon Alexa and Google Assistant, with support for Apple Homekit in the works.

Pham says edge computing protects users’ privacy by keeping data, including face recognition data, on device, while also decreasing latency and false alarms, because calculations are performed continuously on the device (cameras connect to Wi-Fi so customers can watch surveillance video on their smartphones). It also means customers don’t have to sign up for the subscription plans that many cloud-based home security cameras require and reduces the price of each device since SimCam does not have to maintain cloud servers.

Huawei drops lawsuit over equipment seized by the U.S. government

Huawei has dropped a lawsuit against the Commerce Department and other agencies after the U.S. government released telecommunications equipment seized in September 2017. The suit was filed by the Chinese company’s U.S. subsidiary, Huawei Technologies USA, in June. In a statement, Huawei said it considers the return of the equipment, including servers and Ethernet switches, “as a tacit admission that the seizure itself was unlawful and arbitrary.”

The equipment was confiscated by U.S. officials in Alaska as it was on its way back to China after testing in California. Huawei said the U.S. government determined after an investigation that no export license was needed for the shipment, but did not give the company an explanation for why it had been withheld for two years.

The dropped lawsuit is separate from the one Huawei filed against the U.S. government in March, claiming that a ban on the use of its products by federal agencies and contractors violated due process and is unconstitutional.

Huawei has been on the U.S. government’s entity list since May over concerns that it poses a threat to national security and its equipment may be used for espionage, allegations the company has denied. The trade blacklist prevents it from purchasing from U.S. suppliers without getting clearance from the government first.

Along with ZTE, Huawei has been on the U.S. government’s radar since the House Intelligence Committee identified the companies as potential security threats. Scrutiny has intensified since the U.S.-China trade war began last year, however, and the U.S. government has put more legal pressure on Huawei, which the company described earlier this month as a “malign, concerted effort by the U.S. government to discredit Huawei and curb its leadership position in the industry.”

Jack Ma officially retires as Alibaba’s chairman

Jack Ma stepped down as Alibaba’s chairman today, handing the role over to the company’s current CEO Daniel Zhang. The transition was announced a year ago.

Ma will continue serving on Alibaba’s board until its annual general shareholders’ meeting next year. He also remains a lifetime partner of Alibaba Partnership, a group drawn from the senior management ranks of Alibaba Group companies and affiliates that has the right to nominate (and in some situations, appoint) up to simple majority of its board.

Ma said in last year’s announcement that he plans for his departure from Alibaba Group to be very gradual: “The one thing I can promise everyone is this: Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba.”

Ma left Alibaba’s CEO position in 2013 and was succeeded first by Jonathan Lu. In 2015 Lu was replaced by Zhang, the company’s former COO. As its CEO and now its chairman, Zhang has taken Alibaba’s reins as it copes with a slowdown in China’s e-commerce market after a decade of explosive growth. The online retail landscape also now includes new players like Pinduoduo, which have gained an advantage by focusing on smaller cities, important growth markets for Internet companies.

One interesting fact about the day Ma chose for his retirement as chairman is that it is Teachers’ Day in China. Ma is a former English teacher who is still nicknamed “Teacher Ma” and has said that he plans to devote time to education philanthropy.

American tariffs are having a bigger impact on U.S.-based Amazon vendors than their competitors in China, according to SellerMotor

The series of tariffs imposed by the United States on Chinese goods has impacted both U.S. and China-based Amazon vendors, but U.S. sellers are taking a bigger hit to their sales, according to data from cross-border e-commerce analytics company SellerMotor. The gap has widened since the round of tariffs on Chinese goods announced in the summer of 2018 by the Trump administration.

Founded in 2016, SellerMotor provides data and ad analytics about Amazon and an automation platform for sellers. For its research, the company analyzes data from 568 million SKUs, or almost all the active products and brands on Amazon’s U.S. site.

For this particular data set, SellerMotor analyzed 480,000 SKUs from Chinese sellers and 17.9 million from U.S. sellers.

In July 2018, a U.S. tariff on $34 billion in Chinese goods went into effect. That month, Chinese vendors’ sales grew 174% year-over-year, while U.S. sellers saw a 124% increase. As the tariff war between China and the U.S. intensified that summer, however, U.S. and China-based both sellers saw their growth stall, with U.S. sellers coping with a bigger impact, as shown in the graph below from SellerMotor. In September 2018, when the U.S. placed a 25% tariff on $50 billion in Chinese goods, plus a 10% tariff on $200 billion in Chinese goods, U.S. sellers saw their year-over-year sales growth slow down to 54%, compared Chinese sellers’ sales growth of 111%.

SellerMotor data

According to SellerMotor’s data, U.S.-based Amazon sellers have seen their year-over-year monthly sales decrease every month since November 2018. By March 2019, when a 25% tariff was placed on $250 billion in Chinese goods, Chinese vendors’ year-over-year sales grew by 61%, but U.S. sellers saw their sales decrease by 3%.

While many U.S.-based Amazon sellers also get their supplies from China, Chinese sellers have better control over their supply chain and closer relationships with their suppliers (in some cases, even equity partnerships), allowing them more flexibility, SellerMotor COO Sibao Chen tells TechCrunch. These deeper ties give vendors the leeway to negotiate things like smaller batches of products when necessary. As the tariff war forces smaller competitors out of the market, having more control over the supply chain lets these sellers quickly step into the gaps they leave behind. “Whoever is quick to grab these fragments will become even larger in size, because the market is there and that can help with growth momentum for the largest companies,” Chen says.

Chen adds that the way many Chinese e-commerce sellers organize their operations may also give them an edge over U.S. sellers. The company currently has about 60,000 clients in China and launched in the U.S. in June.

“I have been talking to a lot of U.S. and Chinese clients and the way that these Chinese clients are organized is that usually for each product group. So if there is an electronics company selling iPhone charging cables and also headsets, each of these product groups would probably have two to five people running the thing, like a mini-company, and they are organized, incentivized and almost completely independent within their group and given a lot of autonomy,” Chen says. “This is a very common form of organization within the Chinese retail and e-commerce industry and this is something we believe could have given them an edge in terms of the speed that they react to external impacts such as the tariffs.”

Alibaba acquires NetEase Kaola in deal worth $2 billion

Alibaba Group has acquired NetEase Kaola for $2 billion, the two companies said today, and will integrate it into Tmall, creating the largest cross-border e-commerce platform in China. The announcement follows weeks of media reports about a potential deal, which was said to have stalled in the middle of August after the companies reportedly disagreed on transaction details.

Tmall Import and Export general manager Alvin Liu has been named as Kaola’s new CEO, replacing Zhang Lei, but Kaola will continue to operate independently under its own brand.

Tmall Global and Kaola are China’s largest and second-largest cross-border e-commerce platforms, respectively, holding 31.7% and 24.5% of the market, and their union means they will create a business that will far outstrip in size rivals like JD Worldwide, VIP International and Amazon China.

Alibaba and Yunfeng, the investment firm launched by Alibaba founder Jack Ma, also agreed to invest $700 million into NetEase Cloud Music’s latest funding round. This will give Alibaba a minority stake in the streaming music service, with NetEase remaining its controlling shareholder.

In a press release, NetEase CEO William Ding said “We are pleased to have found a strategic fit for Kaola within Alibaba’s extensive ecosystem, where Kaola will continue to provide Chinese consumers with high-quality import products and services. At the same time, the completion of this strategic transaction will allow NetEase to focus on its growth strategy, investing in markets that allow us to best leverage our competitive advantages.”

Daniel Zhang, Alibaba Group’s CEO, said “Alibaba is confidence about the future of China’s import e-commerce market, which we believe remains in its infancy with great growth potential.”

Reefknot Investments launches $50 million fund to invest in logistics and supply chain startups

Reefknot Investments, a joint venture between Temasek, Singapore’s sovereign fund, and global logistics company Kuehne + Nagel, announced today the launch of a $50 million fund for logistics and supply chain startups. The firm is based in Singapore, but will look for companies around the world that are raising their Series A or B rounds.

Managing director Marc Dragon tells TechCrunch that Reefknot will serve as a strategic investor in its portfolio companies, providing them with connections to partners that include EDBI, SGInnovate, Atlantic Bridge, Vertex Ventures, PSA unBoXed, Unilever Foundry and NUS Enterprise, in addition to Temasek and Kuehne + Nagel .

Dragon, a veteran of the supply chain and logistics industry, says Reefknot plans to invest in about six to eight startups. It is especially interested in companies that are using AI or deep mind tech, digital logistics and trade finance to solve problems that range from analyzing supply chain data and making forecasts to managing the risk of financing trade transactions. Data from Gartner shows that about half of global supply chain companies will use AI, advanced analytics or the Internet of Things in their operations by 2023.

“There is a high level of expectation from vendors that because of technology, there will be new methods to do analytics and planning, and greater visibility in terms of information and product, materials and goods flowing throughout the supply chain,” says Dragon.

Reefknot will also establish a think tank that will work with industry experts and government organizations on forums, research and exploring new logistics and supply chain business models that startups can bring into fruition.