Disney invests $15M in educational gaming app Kahoot at a $360M valuation

When Kahoot, the startup that operates a popular platform for user-generated educational gaming, raised $15 million in October of this year, we mentioned that Disney might take a larger stake in the company, beyond the small investment it took after Kahoot passed through the Disney Accelerator.

Now with some 60 million games on its platform, today Kahoot announced that this has come to pass: Disney has backed Kahoot to the tune of $15 million — working out to a four percent stake in the startup at a $360 million valuation, based on the current share price of 28 Norwegian kroner (shares of Kahoot are traded on the Norway OTC as an unlisted stock).

Kahoot declined to comment for this story beyond the investment announcement posted on the exchange, but for some context, this is a nice bump up in Kahoot’s valuation from October, when it was at $300 million. Other sizeable and notable investors in the company include Microsoft and Nordic investor Northzone (which has backed Spotify and other significant startups out of the region).

On the part of Disney, it’s not clear yet whether its Kahoot stake will lead to more Disney content on the platform, or if this is more of an arm’s length financial backing. The entertainment giant has made nearly 50 investments by way of its accelerator program. In some cases it increases those to more significant holdinga, as it has in the case of HQ Trivia, SpheroEpic Games, the company behind Fortnite (a very different take on gaming compared to Kahoot), Samba TV and more.

Disney has been dabbling in both gaming and education as vehicles to market its many brands, and also as salient businesses of their own — no surprise, given that one primary focus for it has been on younger consumers and their needs and interests.

In some cases, it seems it may use strategic investments to do this, for example with Disney-themed nights on HQ Trivia. Interestingly, although it doesn’t appear that Disney invests in Byju’s — which itself just raised $300 million — the educational app, which has been described as “Disneyesque”, teamed up with Disney in October to develop co-branded educational content, another sign of Disney’s interest in the field.

Kahoot has been around since 2006 but has seen a sharp rise in users in the last few years on the back of strong growth in the US — benefitting from a wider trend of educators creating content on mediums and platforms that they know students already use and love.

Kahoot’s last reported user numbers come from January, when it said it had 70 million registrations, but its CEO and co-founder Åsmund Furuseth told TechCrunch in October that it was on track to pass 100 million by this month. Kahoot didn’t release updated figures today, but my guess is that Kahoot has hit its target (maybe even passed it), and that is one reason why Disney decided to exercise its investment option.

Kahoot is not your average gaming company: some games are created in-house, but the majority of them are user-generated — “Kahoots” in the company’s parlance — created by the people setting the learning tasks or those trying to create a more entertaining way of remembering or learning something. These, in turn, become games that potentially anyone can use to learn something (hence the name).

There have been about 60 million of these games created to date, a pretty massive amount considering this is educational content at the end of the day.

Kahoot has developed its business along two avenues, with games for K-12 students and games for business users, building training and other professional development in a wrapper of gamification to engage workers more in the content. 

In practice, about half the games in Kahoot’s catalogue are available to the public and half are private, with the split roughly following the company’s business model: games made for corporate purposes tend to be kept private, while the educational ones tend to  be made publicly available. The business model also follows that split, with Kahoot’s business users accounting for the majority of its revenue, too.

We have contacted Disney for comment too and will update this post as we learn more.

 

Chorus.ai rings up $33M for its platform that analyses sales calls to close more deals

Chorus.ai, a service that listens to sales calls in real time, and then transcribes and analyses them to give helpful tips to the salesperson, has raised $33 million to double down on the current demand for more AI-based tools in the enterprise.

The Series B is being led by Georgian Partners, with participation also from Redpoint Ventures and Emergence Capital, previous investors that backed Israeli-founded, SF-based Chorus.ai in its $16 million Series A two years ago.

In the gap between then and now, the startup has seen strong growth, listening in to some 5 million calls, and performing hundreds of thousands of hours of transcriptions for around 200 customers, including Adobe, Zoom, and Outreach (among others that it will not name).

Micha Breakstone, the co-founder (who has a pretty long history in conversational AI, heading up R&D at Ginger Software and then Intel after it acquired the startup; and before that building the tech that eventually became Summly and got acquired by Yahoo, among other roles), says that while the platform gives information and updates to salespeople in real time, much of the focus today is on providing information to users post-conversation, based on both audio and video calls.

One of its big areas is “smart themes” — patterns and rules Chorus has learned through all those calls. For example, it has identified what kind of language the most successful sales people are using and in turn prompts those who are less successful to use it more. Two general tips Breakstone told me about: using more collaborative terms like we and us; and giving more backstory to clients, although there will be more specific themes and approaches based on Chorus’s specific customers and products.

“I’d say we are super attuned to our customers and what they need and want,” Breakstone said. Which makes sense given the whole premise of Chorus.

It also creates smart “playlists” for managers who will almost certainly never have the time to review hundreds of hours of calls but might want to hear instructive highlights or ‘red alert’ moments where a more senior person might need to step in to save or close a deal.

There are currently what seems like dozens of startups and larger businesses that are currently tackling the opportunity to provide “conversational intelligence” to sales teams, using advances in natural language processing, voice recognition, machine learning and big data to help turn every sales person into a Jerry Maguire (yes, I know he’s an agent, but still, he needs to close deals, and he’s a salesman). They include TalkIQ (which has now been acquired by Dialpad), People.AI, Gong, Voicera, VoiceOps, and I’m pulling from a long list.

“We were among the very first to start this, no one knew what conversational intelligence was before us,” Breakstone says. He describes most of what was out in the market at the time as “Nineties technology” and adds that “our tech is superior because we built it in the correct way from the ground up, with nothing sent to a third party.”

He says that this is one reason why the company has negative churn — it essentially wins customers and hasn’t lost any. And having the tech all in-house not only means the platform is smarter and more accurate, but that helps with compliance around regulations like GDPR, which also has been a boost to its business. It’s also scored well on metrics around reps hitting targets better with its tools (the company claims its products lead to 50 percent greater quota attainment and ‘ramp time’ up by 30 percent for new sales people who use it).

Chorus.ai has helped us become a smarter sales organization as we’ve scaled. We have visibility into our sales conversations and what is working across all of our offices”, said Greg Holmes, Head of Sales for Zoom Video Communications, in a statement. “We’ve seen a drastic reduction in new hire ramp times and higher sales productivity with even more reps hitting quota. Chorus.ai is a game changer.”

Chorus has raised $55 million to date and Breakstone said he would not disclose its valuation — despite my best attempts to use some of those sales tips to winkle the information out of him. But I understand it to be “significantly higher” than in its last round, and definitely in the hundreds of millions.

As a point of reference, after its Series A two years ago, it was only valued at around $33 million post-money according to PitchBook.

“Maintaining high-quality sales conversations as you scale a sales organization is hard for many companies, but key to delivering predictable revenue growth. Chorus.ai’s Conversation Intelligence platform solves that challenge with a market-leading solution that is easy-to-use and delivers best-in-class results.” said Simon Chong, Managing Partner at Georgian Partners, in a statement. (Chong is joining the board with this round.) “Chorus.ai works with some of the best sales teams in the world and they love the product. We are very excited to partner with Chorus.ai on their next phase of growth as they help world class sales teams reach higher quota attainment and efficiency.”

Wandelbots raises $6.8M to make programming a robot as easy as putting on a jacket

Industrial robotics is on track to be worth around $20 billion by 2020, but while it may something in common with other categories of cutting-edge tech — innovative use of artificial intelligence, pushing the boundaries of autonomous machines that are disrupting pre-existing technology — there is one key area where it differs: each robotics firm uses its own proprietary software and operating systems to run its machines, making programming the robots complicated, time-consuming and expensive.

A startup out of Germany called Wandelbots (a portmanteau of “change” and “robots” in German) has come up with an innovative way to skirt around that challenge: it has built a bridge that connects the operating systems of the 12 most popular industrial robotics makers with what a business wants them to do, and now they can be trained by a person wearing a jacket kitted with dozens of sensors.

“We are providing a universal language to teach those robots in the same way, independent of the technology stack,” said CEO Christian Piechnick said in an interview. Essentially reverse engineering the process of how a lot of software is built, Wandelbots is creating what is a Linux-like underpinning to all of it.

With some very big deals under its belt with the likes of Volkwagen, Infineon and Midea, the startup out of Dresden has now raised €6 million ($6.8 million), a Series A to take it to its next level of growth and specifically to open an office in China. The funding comes from Paua VenturesEQT Ventures and other unnamed previous investors. (It had previously raised a seed round around the time it was a finalist in our Disrupt Battlefield last year, pre-launch.)

Notably, Paua has a bit of a history of backing transformational software companies (it also invests in Stripe), and EQT, being connected to a private equity firm, is treating this as a strategic investment that might be deployed across its own assets.

Piechnick — who co-founded Wandelbots with Georg Püschel, Maria Piechnick, Sebastian Werner, Jan Falkenberg and Giang Nguyen on the back of research they did at university — said that typical programming of industrial robots to perform a task could have in the past taken three months, the employment of specialist systems integrators, and of course an extra cost on top of the machines themselves.

Someone with no technical knowledge, wearing one of Wandelbots’ jackets, can bring that process down to 10 minutes, with costs reduced by a factor of ten.

“In order to offer competitive products in the face of the rapid changes within the automotive industry, we need more cost savings and greater speed in the areas of production and automation of manufacturing processes,” said Marco Weiß, Head of New Mobility & Innovations at Volkswagen Sachsen GmbH, in a statement. “Wandelbots’ technology opens up significant opportunities for automation. Using Wandelbots offering, the installation and setup of robotic solutions can be implemented incredibly quickly by teams with limited programming skills.”

Wandelbots’ focus at the moment is on programming robotic arms rather than the mobile machines that you may have seen Amazon and others using to move goods around warehouses. For now, this means that there is not a strong crossover in terms of competition between these two branches of enterprise robotics.

However, Amazon has been expanding and working on new areas beyond warehouse movements: it has, for example, been working ways of using computer vision and robotic arms to identify and pick out the most optimal fruits and vegetables out of boxes to put into grocery orders.

Innovations like that from Amazon and others could see more pressure for innovation among robotics makers, although Piechnick notes that up to now we’ve seen very little in the way of movement, and there may never be (creating more opportunity for companies like his that build more usability).

“Attempts to build robotics operating systems have been tried over and over again, and each time it’s failed,” he said. “But robotics has completely different requirements, such as real time computing, safety issues and many other different factors. A robot in operation is much more complicated than a phone.” He also added that Wandelbots itself has a number of innovations of its own currently going through the patent process, which will widen its own functionality too in terms of what and how its software can train a robot to do. (This may see more than jackets enter the mix.)

As with companies in the area of robotic process automation — which uses AI to take over more mundane back-office features — Piechnick maintains that what he has built, and the rise of robotics overall, is not going to replace workers, but put them on to other roles, while allowing businesses to expand the scope of what they can do that a human might never have been able to execute.

“No company we work with has ever replaced a human worker with a robot,” he said, explaining that generally the upgrade is from machine to better machine. “It makes you more efficient and cost reductive, and it allows you to put your good people on more complicated tasks.”

Currently, Wandelbots is working with large-scale enterprises, although ultimately, it’s smaller businesses that are its target customer, he said.

“Previously the ROI on robots was too difficult for SMEs,” he said. “With our tech this changes.”

“Wandelbots will be one of the key companies enabling the mass-adoption of industrial robotics by revolutionizing how robots are trained and used,” said Georg Stockinger, Partner at Paua Ventures, in a statement. “Over the last few years, we’ve seen a steep decline in robotic hardware costs. Now, Wandelbots’ resolves the remaining hurdle to disruptive growth in industrial automation – the ease and speed of implementation and teaching. Both factors together will create a perfect storm, driving the next wave of industrial revolution.”

 

 

Nexthink raises $85M to monitor and improve ’employee experience’ of apps

As companies compete for talent, a startup that has built a platform to help ensure that the talent — once it’s working for you — doesn’t get bogged down by IT frustration, has raised a significant round of funding.

Lausanne, Switzerland-based Nexthink has nailed down $85 million in funding led by Index Ventures (which has a base in Geneva), with participation also from Highland Europe, Forestay Capital, Galéo Capital and TOP Funds and Olivier Pomel (co-founder and CEO of Datadog).

Nexthink’s CEO Pedro Bados said in an interview that the company will be using this round to expand its business globally and specifically in the US.

It will be doing this from a healthy base. The company already has 900 enterprise customers, covering no less than 7 million endpoints, using its platform to improve employees’ interaction and satisfaction with the IT tools that they are required to use for work. Customers include Adobe, Advocate Healthcare, BlackRock, Commerzbank, Safran, Sega HARDlight, Tiffany & Co., Vitality, Wipro and Western Union.

Network monitoring is a big and established area in the world of IT, where tech companies provide a wide array of solutions to identify and potentially fix network glitches across on-premise, cloud and hybrid environments.

What is only becoming more apparent now to organizations is that problems with the dozens of apps and other software that employees need to use can be just as much, if not more, of an issue, when it comes to getting work done — for example, because something is not working in the app, the worker is unsure how to do something, or there is a configuration issue.

That is the issue that Nexthink is tackling. The company installs a widget — it calls it a Collector — on a worker’s phone, tablet, laptop, desktop computer, or whatever device is being used. That Collector in turn monitors hundreds of metrics around how you are using your device, ranging from performance issues and policy breaches through to examining what software is being used, and what is not.

Nexthink’s algorithms both identify and even can anticipate when a problem is happening, and either provide a quick suggestion to fix it, or provide the right data to the IT team to help solve the problem.

In the “marketplace” created in an IT network, you might think of Nexthink as solving problems at two ends: for the IT team, reduces the number of calls it gets by helping solve problems and providing useful information in cases where they will really be needed. For the employees, it gives them a quick and hopefully helpful response so that they can get on with their work.

“Not only are employees happy and more productive, but costs go down on support,” Bados says.

Nexthink has actually been around for 14 years — Bados co-founded Patrick Hertzog andVincent Bieri not long after he finished his graduate research work in artificial intelligence at the polytechnic in Lausanne — and this latest round is larger than all the funding that the company had raised up to now, which had been $69 million. That in itself is a sign of how VCs and the industry are waking up to the opportunity to address the challenge of software usability and experience and how that might affect employee satisfaction and productivity.

“We’ve known the company for a while and have a lot of respect for Pedro as a CEO,” said Neil Rimer of Index Ventures in an interview. “Watching what they have been buildingn focusing on user experience and management, is an area that we find compelling.” Plus the customer caliber and loyalty helped, he said. “The retention and lack of churn are all very impressive.”

Unsurprisingly, there are a number of others also moving into the space, including Microsoft, VMware and Riverbed, as well as others like New Relic around the same neighborhood of services. For now, Bados says he sees these more as potential partners than rivals.

 

Verizon to take a charge of up to $6.7B due to Oath and redundancies

Verizon, the telecoms giant that is the parent of Oath (and therefore owns TechCrunch), has been through the re-organizational ringer in recent quarters and today it announced the full financial effect of that process. According to an SEC filing, the company will take charges of up to $6.7 billion as a result of a voluntary redundancy program (up to $2.1 billion pre-tax) and market pressures for its Oath business, which is primarily made up of the merger of AOL and Yahoo, two companies it has acquired in recent years (up to $4.6 billion pre-tax).

On the other hand, a reorganization of legal entities in with its wireless business will give it a tax benefit of $2.1 billion.

Coming clean appears to be good business it seems. The company’s share price is up by one percent in trading at the moment.

On the cost side, the company specifically said that its voluntary separation program, which will ultimately impact 10,400 employees by June 2019 (but will see the first tranche leave this month), will lead to a severance charge of between $1.8 billion and $2.1 billion ($1.3 billion to $1.6 billion after-tax) in Q4 2018.

Oath, meanwhile, “has experienced increased competitive and market pressures throughout 2018 that have resulted in lower than expected revenues and earnings. These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business.”

Oath said it plans to write down $4.6 billion ($4.5 billion after-tax) in Q4 2018. This essentially is wiping out the benefits of the merger. Verizon said that the goodwill balance of the Oath reporting unit was approximately $4.8 billion prior to the incurrence of this impairment charge.

Problems include lower than expected benefits from the integration of the Yahoo Inc. and AOL Inc. businesses, the company said, although there have been plenty of other issues, such as the fact that Yahoo suffered a mega data breach affecting 500 million users, which has tarnished the company’s image; and the fact that audiences shifting to mobile apps and non-Oath properties will have made the media / advertising play of combining these two businesses too little, too late. (On top of all this,  longtime AOL and Oath CEO Tim Armstrong, who led the charge on the Yahoo acquisition, also departed the company. The media business is now led by K. Guru Gowrappan.)

Verizon explained that under new Verizon CEO Hans Vestberg, who took over the role in August of this year, Oath finished a five-year strategic planning review of Oath’s business prospects, and this is why the write-down came to be.

“Consistent with our accounting policy, we applied a combination of a market approach and a discounted cash flow method reflecting current assumptions and inputs, including our revised projections, discount rate and expected growth rates, which resulted in the fair value of the Oath reporting unit being less than its carrying amount.”

There have been various reports questioning what place media content will have for Verizon longer-term, although for now strategic alternatives or sales do not appear to be something Verizon is discussing publicly. It’s a fair question, considering that Vestberg himself is a telecoms veteran who has doubled down on next-generation networking, and specifically 5G, as an engine for growth. It’s not clear how and if his predecessor’s strategy to focus on content and media will fit into that.

Pindrop raises $90M to bring its voice-fraud prevention to IoT devices, and Europe

When it comes to how humans communicate with each other or with machines, voice is a major interface, with growth in the latter fuelled by the rise of artificial intelligence, faster computing technology and an explosion of new devices — some of which only, or primarily, work with voice commands. But the supreme reign of voice has also opened a window of opportunity for malicious hackers — specifically, in the area of voice fraud.

Now, a security startup called Pindrop is announcing that it has raised $90 million to tackle this with a platform that it says can identify even the most sophisticated impersonations and hacking attempts, by analysing nearly 1,400 acoustic attributes to verify if a caller or a voice command is legit.

“We live in a brave new world where everything you thought you knew about security needs to be challenged,” said Vijay Balasubramaniyan, co-founder, CEO and CTO of Pindrop, who built the company (with co-founders Ahamad Mustaque and Paul Judge) originally out of his PhD thesis.

The funding is a growth round aimed specifically at two areas. First, taking US-based Pindrop into more international markets, starting with Europe — Vijay spoke to me in London — and coming soon to Asia. And second, to expand from customer service scenarios — the vast majority of its business today — into any applications that use voice interfaces, such as connected car platforms, home security devices, smart offices and smart home speakers.

To that end, this Series D includes a mix of strategic and financial investors: led by London’s Vitruvian Partners, it also includes Allegion Ventures (the corporate venture arm of the security giant), Cross Creek, systems integrator Dimension Data (“As you grow you want to be able to sell through partners,” Balasubramaniyan says), Singapore-based EDBI (to help with its push into Asia), and Goldman Sachs. Google’s CapitalG, IVP, Andreessen Horowitz, GV and Citi Ventures — all previous investors — were also in this round.

(The latter group of investors also has at least one strategic name in it: Pindrop is already working with Google, the CEO said.)

Valuation is not being disclosed, but in Pindrop’s Series C round in 2017, the company was valued at $600 million post-mioney, according to PitchBook, and the valuation now is “much higher,” Balasubramaniyan said with a laugh. The company’s raised $212 million to date.

The crux of what Pindrop has built is a platform that makes a voice “fingerprint” that identifies not just the specific tone you emit, but how you speak, where you are typically calling from and the sounds of that space, and even your regular device — something we can do now with the rise of smartphones that we typically don’t share with others — with each handset having a unique acoustic profile. Matching all these against what is determined to be your “normal” circumstances helps to start to build verification, Balasubramaniyan explained.

Founded in 2011 in Atlanta, GA, most of Pindrop’s business today has been built around helping to prevent voice fraud in customer service engagements. That business, Balasubramaniyan said, is on the path to profitability by the first quarter of 2019 and continues to grow well, with a voice fraud problem in the space that costs the industry $22 billion ($14 billion in fraud, $8 billion in time and systems wasted on security questions). (Pindrop claims it has stopped over $350 million in voice-based fraud and attacks so far  in 2018.)

Current customers include eight of the 10 largest banks and five largest insurance companies in the U.S., with more than 200 million consumer accounts protected at the moment. 

“There are 3.6 million agents in customer service jobs in the UK, with one in every 89 people in the US in this role,” he noted. “But last year, there there were 4.4 million new assistants added to the market,” referring to all the devices, apps and services that have hit us, “and that’s where we realised that it’s about expansion for us.”

In cases like connected home or office scenarios, some of the ways that these might get hacked are only starting to become apparent. Balasubramaniyan noted that it can be something as innocent as a little girl ordering an expensive doll house while playing with Alexa (Pindrop is also now starting to work with Amazon, too, as it happens), or something more nefarious like a fraudster calling your answering machine to command your smart home hub to unlock your front door. But we are unlikely to turn away from voice interfaces, and that is where a company like Pindrop (as well as competitors like Verint) come in.

“Voice-enabled interfaces are expanding how consumers interact with IoT devices in their everyday lives – as well as IoT manufacturers’ ability to offer smarter and stronger solutions,” said Allegion Ventures President Rob Martens, in a statement. “We’re excited about the future of voice technology and see Pindrop as a pioneer in the space. We look forward to working with Vijay and his team to accelerate the adoption of voice technology into new markets.”

Cyber Monday projected to hit $7.8B in online sales

Cyber Monday 2018 is projected to be the highest selling day of the holiday season this year, with $7.8 billion in online sales. And it’s no wonder: after a weekend of people juggling shopping online with shopping in stores, and hassling with each other in stores, today many go back to work. And so, we see a significant swing to online shopping.

Adobe — which tracks trillions of transactions across the US among major retailers online – predicts that today will see $7.8 billion in sales online today, up nearly 18 percent on 2017’s figure of $6.6 billion.

As of 7 AM PST / 10 AM EST on Monday, that prediction appears to be on track. Adobe says that consumers have already spent over half a billion dollars – $0.531 billion, specifically – with online retailers. (It will continue to update this figure throughout the day, and we will update as well.)

The report also suggests that Cyber Monday will be the best day to buy toys online, with savings of 19 percent on that product category. Some apparel, however, may be out-of-stock, Adobe says.

Although holiday spending used to kick off on Black Friday, e-commerce and the trend of shopping whenever you want — and not just when a store is open — has led to sales and seasonal promotions — and shopping — earlier and earlier. There has been $44.2 billion spent this month online so far, already passing Adobe’s full-month projections of $43 billion.

So far, the biggest spending day of the year has been Black Friday, where online US sales hit $6.2 billion dollars, with more than one-third of sales coming from mobile devices. Thanksgiving this year had a record $3.7 billion in sales, while one of the newer “shopping holidays,” Small Business Saturday, rung up $3.02 billion in online sales, said Adobe, up 25.5 percent.

But these are estimates, and so you are bound to get a lot of variation.

MasterCard provides a slightly more conservative figure: its SpendingPulse analytics predict that total sales “could exceed” $3 billion. It also estimated that last year’s Cyber Monday sale day brought in no more than $2.4 billion.

While Adobe says that it builds its estimates by tracking transactions at 80 of the biggest retailers online in the US, Mastercard tells us that SpendingPulse uses “national retail sales across all payments types in select markets around the world. The findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check.”

The real numbers may lie somewhere in the middle.

Additional reporting: Sarah Perez

 

LinkedIn violated data protection by using 18M email addresses of non-members to buy targeted ads on Facebook

LinkedIn, the social network for the working world with close to 600 million users, has been called out a number of times for how it is able to suggest uncanny connections to you, when it’s not even clear how or why LinkedIn would know enough to make those suggestions in the first place.

Now, a run-in with a regulator in Europe illuminates how some of LinkedIn’s practices leading up to GDPR implementation in Europe were not only uncanny, but actually violated data protection rules, in LinkedIn’s case concerning some 18 million email addresses.

The details were revealed in a report published Friday by Ireland’s Data Protection Commissioner covering activities in the first six months of this calendar year. In a list of investigations that have been reported concerning Facebook, WhatsApp and the Yahoo data breach, the DPC revealed one investigation that had not been reported before. The DPC had conducted — and concluded — an investigation of Microsoft-owned LinkedIn, originally prompted by a complaint from a user in 2017, over LinkedIn’s practices regarding people who were not members of the social network.

In short: in a bid to get more people to sign up to the service, LinkedIn admitted that it was using people’s email addresses — some 18 million in all — in a way that was not transparent. LinkedIn has since ceased the practice as a result of the investigation.

There were two parts to the supervision, as the DPC describes it:

First, the DPC found that LinkedIn in the US had obtained emails for 18 million people who were not already members of the social network, and then used these in a hashed form for targeted advertisements on the Facebook platform, “with the absence of instruction from the data controller” — that is, LinkedIn Ireland — “as is required.”

Some backstory on this: LinkedIn, Facebook and others in the lead-up to GDPR coming into effect moved data processing that had been going through Ireland to the US.

The claim was that this was to “streamline” operations but critics have said that the moves could help to shield companies a bit more from any GDPR liability over how they use process data for non-EU users.

“The complaint was ultimately amicably resolved,” the DPC said, “with LinkedIn implementing a number of immediate actions to cease the processing of user data for the purposes that gave rise to the complaint.”

Second, the DPC then decided to conduct a further audit after it became “concerned with the wider systemic issues identified” in the initial investigation. There, it found that LinkedIn was also applying its social graph-building algorithms to build networks — to suggest professional networks for users, or “undertaking pre-computation,” as the DPC describes it.

The idea here was build up suggested networks of compatible professional connections to help users overcome the hurdle of having to build networks from scratch — that being one of the hurdles in social networks for some people.

“As a result of the findings of our audit, LinkedIn Corp was instructed by LinkedIn Ireland, as data controller of EU user data, to cease pre-compute processing and to delete all personal data associated with such processing prior to 25 May 2018,” the DPC writes. May 25 was the date that GDPR came into force.

LinkedIn has provided us with the following statement in relation to the whole investigation:

“We appreciate the DPC’s 2017 investigation of a complaint about an advertising campaign and fully cooperated,” said Denis Kelleher, Head of Privacy, EMEA, for LinkedIn. “Unfortunately the strong processes and procedures we have in place were not followed and for that we are sorry. We’ve taken appropriate action, and have improved the way we work to ensure that this will not happen again. During the audit, we also identified one further area where we could improve data privacy for non-members and we have voluntarily changed our practices as a result.”

(The ‘further area’ is the pre-computation.)

There are some takeaways from the incident:

Taking LinkedIn’s words at face value, it would seem that the company is trying to show that it is acting in good faith by going one step further than simply modifying what has been identified by the DPC, changing practices voluntarily before it gets called out.

Then again, LinkedIn would not be the first company to “ask for forgiveness, not permission,” when it comes to pushing the boundaries of what is considered permissible behavior.

If you are wondering why LinkedIn did not get fined in this process — which could be one lever for pushing a company to act right from the start, rather than only change practices after getting called out — that’s because until the implementation of GDPR at the end of May, the regulator had no power to enforce fines.

What we also don’t really know here — the DPC doesn’t really address it — is where LinkedIn obtained those 18 million email addresses, and any other related data, in the first place.

Other cases reviewed in the report, such as the inquiry into Facial Recognition usage by Facebook, and how WhatsApp and Facebook share user data between each other, are still ongoing. Others, such as the investigation Yahoo security breach that affected 500 million users, are now trickling down into the companies modifying their practices.

Black Friday predicted to hit $6.4B in online sales, $643M spent so far

After a record-breaking Thanksgiving with $3.7 billion in digital sales across desktop and mobile devices, it looks like Black Friday will also pull in a bumper year for e-commerce. Adobe — which tracks trillions of transactions across a range of retail sites — says that as of 7am Pacific Time, there has already been $643 million spent online.

That’s not only a rise on yesterday’s sales at this point in the day — when Adobe had recorded $406 million — but a rise of some 28.3 percent on the same period a year ago. For the full day last year, shoppers spent $5.03 billion online, a record at the time; Adobe is currently predicting that this year there will be $6.4 billion spent on Black Friday, revising up its figures based on strong morning demand.

“Shoppers are already capitalizing on Black Friday discounts online in the early hours of the morning, gearing up for a record Black Friday we expect to match last year’s Cyber Monday,” said Taylor Schreiner, director, Adobe Digital Insights.

As with Thanksgiving and the overall trends of more smartphone shopping, we’re seeing an ongoing shift to more shopping on mobile devices — specifically smartphones. That’s partly because phones always improving with more functionality and bigger screens, but also because e-commerce technology has improved to make the mobile shopping experience faster and easier.

“Mobile shopping continues to skyrocket and see increased conversion,” Schreiner said. “Retailers understand that shopping and buying on smartphones is now the norm for consumers, and as a result are delivering better experiences and optimization on mobile devices.”

Adobe hasn’t released figures yet for conversion rates on Black Friday, but yesterday desktop was still seeing a higher rate of people who would buy after browsing: five percent on desktop versus around three percent for smartphones.

And while tablets are not nearly as popular for people to use — they account for only around eight percent of traffic and purchases — conversion rates on these are essentially on par with desktop.

At the smaller-retailer end of the scale, things are also doing well. Shopify, which provides a real-time sales visualisation for some 600,000 merchants on its platform — typically smaller retailers than the 80 biggest tracked by Adobe — notes that at the moment the average sales per minute for those merchants is currently hovering at around $650,000 per minute, a rise on earlier today.

Black Friday — once the traditional ‘start’ of the holiday sales period — has downshifted somewhat in importance as retailers have brought up their seasonal promotions earlier and earlier, tapping into a key aspect of e-commerce: shopping anytime you please, not just when a store is open.

At the same time, while Thanksgiving brings online retailers a captive audience — physical stores are mostly closed — Black Friday really sees the two going head-to-head, with the added competitive twist that people get days off after Thanksgiving and use them to take to the stores.

Adobe surveyed shoppers ahead of today, and it found that 60 percent planned to shop online — same as last year — and 43 percent planned to go to physical stores.

The competitiveness at physical stores has had a dark undercurrent, too, with pictures of crazed shoppers trampling over others to get to the best bargains an annual theme in the media.

Interestingly, Adobe notes that there has been a sharp rise in “buy online, pick up in store” transactions, with people buying twice as much on Thursday as on Wednesday to pick up starting Friday. That might go some way to alleviating some of the heated moments in shops.

Adobe says that so far this month, there has been $38 billion spent online, up 18.5 percent on a year ago.

We’ll update this post more with data as we get it.

Thanksgiving e-commerce spend to top $3.5B, mobile accounting for one-third of sales

The 2018 holiday season is predicted to be a bumper year for e-commerce, helped by economic forces like lower unemployment and underlying trends like an ever-growing proportion of shoppers opting to spend their money online, and specifically on mobile devices. Thanksgiving, a day when brick-and-mortar stores tend to be closed, is a big one for online spending, and so far it’s off to a flying start.

Adobe, which puts out real-time analytics tracking e-commerce sales, said that as of 10am  ET, $406 million had already been spent online today — growth of 23.2 percent on 2017. Adobe tracks e-commerce transactions across 80 of the top 100 US online retailers and says its analytics are based on over 1 trillion visits to retail sites and 55 million SKUs.

At this rate, Adobe said it believes that sales today will total a record $3.5 billion, versus $2.9 billion a year ago. Notably, this is revised up from figures Adobe put out earlier this month, when it projected $3.1 billion in sales today.

It’s the first day of the “big five” for holiday shopping. Figures from Internet Retailer research predict that the total amount that will be spent over the period between Thanksgiving and Cyber Monday will be $21.6 billion. While rising tides might lift all boats, the biggest will reap the most rewards: it estimates that Amazon will account for nearly one-third of all sales.

The overall picture, interestingly, is that e-commerce continues to account for between 10 and 20 percent of all retail sales, largely the same proportion that we’ve seen for years. In other words, while the overall pie is growing in size, the proportion of the piece for online commerce does not appear to be changing for the moment.

Figures from eMarketer put overall US holiday sales at retailers at over $1 trillion for this season, while e-commerce will be around $123 billion, or around 12 percent of all sales.

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We’ll be on the lookout for some mobile stats, but so far, the prediction is that they will see their highest-ever level of activity, both for browsing and for spending. So far, smartphones have accounted for 48.4 percent of all retail site visits and 28.2 percent of sales, which outpaces on browsing but not on sales — respectively, desktop accounted for 43.4 percent of site visits, but 62.3 percent of sales (cart abandonment continues to be a big factor). Tablets in both categories hover at around eight percent.

“Black Friday” — the day after Thanksgiving — was once considered the official start of the holiday shopping season, but that start has come earlier and earlier each year, with brick-and-mortar stores kicking off their sales earlier to compete more with internet-based shopping sites.

Between November 1 and yesterday, a total of $34.3 billion has been spent online, up 17.6 percent. Notably, all 21 days in November hit more than $1 billion in sales, and two days each saw $2 billion in spend. That high spend reaches a kind of zenith in the next four days, when one out of every five dollars will be spent, working out to $23.4 billion in sales (or 19 percent of all holiday season shopping).

“Pre-Thanksgiving deals appear to have enticed consumers to spend a little earlier as we saw our second $2 billion day of the holiday shopping season. That growth is continuing in the early morning hours of Thanksgiving Day and we expect strong growth in sales and mobile throughout the day,” said Taylor Schreiner, director, Adobe Digital Insights.

Adobe said that this year will see an even higher total than previous years because of how the calendar works out: there will be an extra day between Thanksgiving and Christmas, working out to $284 million spent.

In terms of products that are doing well so far, Adobe notes that top toys include L.O.L. Surprise! and Hatchimals. Top electronics meanwhile are Amazon Fire TV, Roku and Apple iPads.

Discounts will be coming in strong through Cyber Monday, but they are already starting. Average savings, Adobe noted, include 16.3 percent for computers, 4.7 percent for TVs and 12.2 percent for toys.

I am not sure how and why retailers would coalesce around these trends, but apparently today is best for sporting goods (discounted on average by 13 percent). Black Friday is best for computers (16 percent) and tablets (33 percent). The Sunday before Cyber Monday will see the best deals for apparel (22 percent), appliances (18 percent) and jewelry (5 percent) (seems to be a “female” theme there), and the biggest discounts for toys will happen Cyber Monday (19 percent), when kids are back at school and can’t peek over their parents’ shoulders as they are snapping up stuff to put under the tree. 

We’ll keep updating this post as we get more updated figures.