VMware acquires ML acceleration startup Bitfusion

VMware today announced that it has acquired Bitfusion, a former participant in our Startup Battlefield competition. Bitfusion was one of the earliest companies to help businesses accelerate their complex computing workloads on GPUs, FPGAs and ASICs. In its earliest iteration, over four years ago, the company’s focus was less on AI and machine learning and more on other areas of high-performance computing, but unsurprisingly, that shifted as the interested in AI and ML increased in recent years.

VMware will use Bitfusion’s technology, which is vendor- and hardware-agnostic, to bring similar capabilities to its customers. Specifically, it plans to integrate Bitfusion into its vSphere platform.

“Once closed, the acquisition of Bitfusion will bolster VMware’s strategy of supporting AI- and ML-based workloads by virtualizing hardware accelerators,” writes Krish Prasad, Senior Vice President and General Manager of VMware’s Cloud Platform Business Unit. “Multi-vendor hardware accelerators and the ecosystem around them are key components for delivering modern applications. These accelerators can be used regardless of location in the environment – on-premises and/or in the cloud.”

Prasad also notes that to get the most out of hardware accelerators like GPUs, most enterprises deploy them on bare metal. VMware, however, argues that this leads to poor utilization and poor efficiencies (as it would, of course, given that it is in the business of virtualization). “This provides a perfect opportunity to virtualize them—providing increased sharing of resources and lowering costs,” writes Prasad.

The two companies did not disclose the price of the acquisition. Bitfusion had raised $5 million in 2017 and a smaller, strategic investment from Samsung Ventures in 2018.

UK DeepTech VC IQ Capital launches new $125M growth fund, closes third VC fund at $175M

IQ Capital, a UK-based deep tech fund which has invested in startups such as Paragraf, Senseye and Funderbeam, has launched a new $125 million ‘Growth Opportunities Fund’ and closed its third venture fund, IQ Capital Fund III, at $175 million. This brings the total new capital to be invested to over $300 million. National Grid Partners have joined British Patient Capital and a number of other global institutions, as an investor in IQ Capital Fund III.

The move is part of a wider shift in VC investing across Europe towards so-called deep tech (AI, BioTech, Blockchain etc).For instance, Adara Ventures, a spanish VC firm recently closed its third fund with commitments in excess of €65 million to back European early-stage deep tech startups.

IQ says the $125 million fund will provide later-stage capital to the best-performing companies in their existing portfolio. The first to benefit from this is Privitar, a startup in data privacy engineering which IQ Capital funded from seed stage, as part of its $40 million Series B funding round announced last month.

Alongside the launch of the new fund, IQ Capital has reached the final closing for its third venture fund at $175 million, which focuses on investing into companies at Seed and Series A stage. In the last year, IQ Capital has invested in 12 companies, including Causalens, Concirrus, and Iotic. Previous Fund II startups include Thought Machine, Fluidic Analytics, Paragraf, and Speechmatics.

Max Bautin, Co-Founder and Partner at IQ Capital, said a statement: “The partners, Ed Stacey, Kerry Baldwin, and I, have been investing in deep-tech for over 20 years, and during this time we’ve seen investment in the sector grow from tens of millions p.a. to $1.75 billion deployed across Europe in 2018 alone. Half of this capital was invested into UK start-ups, reinforcing the UK as a leader in Europe, with well-established technology ecosystems formed in Cambridge, Bristol, Oxford, and London.

“IQ Capital has grown its funds under management over 10x in the last five years, following exits to Google, Apple, and Facebook, and a double-dragon to Oracle. The investment team has tripled in size over the same period with recent joiners Rick Hao, Daniel Carew and Marek Chalupnik. IQ Capital is now firmly established as the leading deep tech investor in the UK.”

Lisa Lambert, Founder and President of National Grid Partners said: “IQ Capital… is positioned as the go-to deep-tech fund in the EU, and the team has a proven ability to connect with founders through all stages, from seed to exit.”

Image recognition, mini apps, QR codes: how China uses tech to sort its waste

China’s war on garbage is as digitally savvy as the country itself. Think QR codes attached to trash bags that allow a municipal government to trace exactly where its trash comes from.

On July 1, the world’s most populated city Shanghai began a compulsory garbage sorting program. Under the new regulations (in Chinese), households and companies must classify their wastes into four categories and dump them in designated places at certain times. Noncompliance can lead to fines. Companies and properties that don’t comply risk having their credit rating lowered.

The strict regime became the talk of the city housing over 24 million residents, who criticized the program’s inflexibility and confusing waste categorization. Gratefully, China’s tech startups are here to help.

For instance, China’s biggest internet companies responded with new search features that help people identify what wastes are “wet” (compostable), “dry”, “toxic”, or “recyclable”. Not even the most environmentally conscious person can get all the answers right. Like, which bin does the newspaper you just used to pick up dog poop belong to? Simply pull up a mini app on WeChat, Baidu or Alipay and enter the keyword. The tech firms will give you the answer and why.

wechat garbage sorting

A WeChat mini program that lets users learn the category of cash

Alipay, Alibaba’s electronics payment affiliate, claims its garbage sorting mini app added one million users under just three days. The lite app, which is available without download inside the e-wallet with one billion users, has so far indexed more than 4,000 types of rubbish. Its database is still growing, and soon it will save people from typing by using image recognition to classify trash when they snap a photo of it. Alibaba’s answer to Alexa Tmall Genie can already answer (in Chinese) the question “what kind of trash is a wet wipe?” and more.

If people are too busy or lazy to hit the collection schedule, well, startups are offering valet trash service at the doorstep. A third-party developer helped Alipay build a recycling mini app (“垃圾分类回收平台”) and is now collecting garbage from 8,000 apartment complexes across 11 cities. To date, two million people have sold recyclable material through its platform.

Ele.me, Alibaba’s food delivery arm, added trash pickup to its list of valet services its fleets offer on top of “apologize to the girlfriend” and dog walking.

Besides helping households out, companies are also building software to make property managers’ life easier. Some residential complexes in Shanghai began using QR codes to trace the origin of garbage, state-owned media outlet Xinhua reported. Each household is asked to attach a unique QR code to their trash bags, which will be scanned for sources and classification when they arrive at the waste management station.

shanghai garbage

Workers at a waste management station in Shanghai scan codes on trash bags to check their source. / Screenshot from Xinhua feature

This way, regulators in the region know exactly which family has produced the trash — although the city’s current garbage regulations do not require real-name tracking — and those who correctly categorized receive a small reward of 0.1 yuan, or 1.45 cents, per day, according to another report (in Chinese) from Xinhua.

Twelve South’s HiRise Wireless is a super versatile wireless smartphone charger

Wireless charging has been a wonderful addition to mainstream flagship smartphones including the iPhone, Samsung’s Galaxy lineup and Google’s Pixel phones. But there hasn’t been a really great option for bringing the benefits of wireless charging with you on the road, while keeping your desktop setup tidy until now, with TwelveSouth’s recently released HiRise Wireless.

The HiRise Wireless builds on the good reputation of the existing HiRise line from TwelveSouth, which includes the Duet, a great combo charger for both iPhone and Apple Watch. The Wireless version, as implied by the name, includes wireless charging of up to 10W, which means you get the fastest cable-free charging rate available for devices that support Qi charging, including the iPhone X, XR and XS, as well as the Pixel 3 and Samsung Galaxy S10.

The HiRise is unique in that it provides a charging puck that can both mount in the frame (which has a nice weighted base to stay rock solid on your desk) and pop out to either provide a lie-flat wireless charger (which will work with the new wireless AirPods charging case, for instance) or pack away in a bag.

The upright angle the wireless charger provides when mounted in the frame is perfect for registering Face ID unlocks when used with an iPhone X or later, and positioned on your desk. That’s a great way to give yourself access to phone notifications without distracting too much from your desktop work. And the puck itself is a lot smaller than most wireless chargers, which isn’t idea for typical at-home charging, but which is terrific for stowing it in a gadget pouch.

The puck also has a rubberized ring bordering the charging pad to prevent your device from slipping around, and it works with a detachable USB-C to USB-A cable that comes in the box which adds to the portability, and means you can easily use it with whatever USB-C charging cables you already have on-hand for your Mac or other devices.

If you’re in the market for a wireless charger and travel a decent amount, it’s hard to beat the value of the HiRise Wireless. It’s $79.99, which is more than you’ll pay for a lot of quality wireless chargers, but Twelve South’s unique design is worth the premium in this case for people looking for its unique flexibility.

Google rolls out dining and translation filters to Lens

Google Lens users on iOS and ARCore-compatible Android phones are getting some added utility when it comes to ordering at restaurants or translating foreign languages on-the-go.

The functionality was announced earlier this month at Google I/O. Users can access Lens in the Google Assistant, Google Photos and main Google search apps. It’s also baked directly into the camera app on Pixel phones.

With the new “dining” features, users can point their phone at the menu and the Lens app will highlight the most popular dishes on the menu or surface food information and photos from the restaurant’s Google Maps profile. The company also detailed that you would be able to snap a picture of the bill and split the bill directly.

On the foreign language translation front, the Google Translate app has long enabled language translation of signs that matches the style and typeface of what’s being parsed, but now a more lightweight version of this functionality is cooked directly into Lens.

Google has generally liked to take their sweet time when it comes to rolling out any I/O announcements related to Lens, so the promptness of this launch just a few weeks after the conference is a bit surprising.

Trifecta! SpaceX launches first mission on Falcon Heavy and lands all three boosters

SpaceX’s Falcon Heavy launch vehicle undertook its first commercial mission today, taking a communications satellite to orbit and proving the viability of its heavy-lift rocket platform. And as a piece de resistance, all three rocket cores autonomously landed themselves back on Earth and will soon be ready to fly again.

The mission is still underway, but the most dangerous moments are over with, and the system passed with flying colors. It’ll be some time before the second stage 2 burn and separation from the payload, at which point the mission will be considered a success.

The launch is a powerful endorsement of Falcon Heavy, which provides far more payload capacity, at far lower cost, than any competitor. New launch vehicles are being tested by SpaceX’s numerous competitors, but Falcon Heavy has the advantage of already existing and working as designed.

All planned launch events went as planned, though high winds delayed takeoff yesterday. After takeoff at about 6:35 local time in Cape Canaveral, the two first stages detached and made a picture-perfect landing at LZ-1 and LZ-2; the center core landed on the the drone ship Of Course I Still Love You. The latter was a bit of a nailbiter, as the video cut out just as the center core booster’s retro began to light the pad. But good signal a handful of seconds later revealed the final third of the trifecta.

It must be said that the crowd was going absolutely wild basically from T-0 to T+10 minutes, when the center core landed. Landing all three has never been done, and drone ship landings have led to some of SpaceX’s most public (not to say embarrassing) failures.

Currently the LV is in a cruise state before a second burn takes it to the desired orbit, after which Arabsat-6A will continue under its own power. It is also possible that SpaceX will catch the fairings, though that isn’t as sure a thing for several reasons.

We’ll keep this post updated with the latest.

The government is about to permanently bar the IRS from creating a free electronic filing system

Thanks to pressure from tax preparation industry, Congress is getting ready to ban the Internal Revenue Service from ever building a free electronic tax filing system.

As ProPublica reports, the effort is a bipartisan one. The House Ways and Means Committee, led by Massachusetts Democrat, Richard Neal, passed the Taxpayer First Act.

The bill would make changes to the IRS and is sponsored by Georgia Democratic Congressman John Lewis and Mike Kelly, a Republican from Pennsylvania.

One of its stipulations would make it illegal for the IRS to create its own online system for tax filing. That’s right, members of Congress are prohibiting a branch of the federal government from providing a much-needed service that would make the lives of all of their constituents much easier.

And why is Congress taking the step? Because companies like Intuit, the company behind TurboTax, and H&R Block have been lobbying lawmakers for years to take the step.

In other countries, the agencies in charge of taxes have their own programs which make filing taxes more efficient — and free — for citizens. But that would eat into the profits for the tax prep industry, which was estimated to pull in $11 billion in 2018.

“This could be a disaster. It could be the final nail in the coffin of the idea of the IRS ever being able to create its own program,” Mandi Matlock, a tax attorney who does work for the National Consumer Law Center, told ProPublica.

There are a number of ways that the IRS could make tax preparation easier for taxpayers dealing with the only certainty in life other than death.

The IRS could develop a free online system. It could also submit pre-prepared tax returns for people to approve and then file based on the salary data the agency already has.

Roughly 70% of American taxpayers are already able to file for free online, but only 3% do, according to data from the taxpayer advocacy organization, The Taxpayer Advocate Service.

Americans who make less than $66,000 can access the Free File Inc. software online through the IRS.gov website and all taxpayers can download electronic versions of IRS paper forms through the service.

Back in 2002, the IRS entered into an agreement with a consortium fo tax software companies, which was known as Free File, Inc.  As part of that deal, the companies agreed to open up access to filing software for about taxpayers who make less than $66,000 and the IRS agreed not to compete with the companies by developing its own software.

That deal has been renewed for over a decade and the new bill before Congress would make it permanent. One reason why folks Congress could be pushing this through is all of the money that H&R Block and Intuit spent to lobby Senators and Representatives. ProPublica estimates that the tax prep industry has spent $6.6 million to advocate for the IRS filing deal. The Ways and Means chair, Neal, received $16,000 in contributions from the two companies in the last two election cycles, according to the ProPublica report.

Startups Weekly: US companies raised $30B in Q1 2019

Let’s start this week’s newsletter with some data. Nationally, startups pulled in $30.8 billion in the first quarter of 2019, up 22 percent year-on-year, according to Crunchbase’s latest deal round-up.

A closer look at the numbers shows a big drop in angel funding and a slight decrease in mega-rounds, or financings larger than $100 million. The number of mega-rounds fell to 57 deals in Q1 and deal value was down too. With that said, mega-rounds still accounted for $16.4 billion, making Q1 2019 the second-best quarter on record for mega-rounds.

The bottom line is these monstrous deals represented a big chunk (29 percent) of all the dollars invested in U.S. startups in Q1. As investors move downstream and startups opt to stay private longer and longer, we’ll continue to see a greater pick up in mega rounds.

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OK, on to other news…

IPO corner

Once trading after the pink confetti was swept up off the floor, analysts and investors had a different story to tell about one of the first unicorns to make its public debut. Lyft began the week struggling to hit its IPO price, closing several days under that $72, despite opening with a 20 percent pop at $86. What’s going on? People are shorting the Lyft stock, looking to profit off the company’s sinking value. Things are looking up though; on Friday as I typed this newsletter, Lyft was trading at about $74 per share.

In other IPO, or shall I say, direct listing news, Slack has reportedly chosen the NYSE for its upcoming exit. A quick reminder why Slack has opted to go public via direct listing: The company doesn’t need any IPO cash thanks to the hundreds of millions of dollars on its balance sheet, but its longtime employees and investors need the liquidity. A direct listing allows it to go public without listing any new shares, with no lockup period and no intermediary bankers. The process saves it some money and expedites the process. OK, that wasn’t as brief as I intended, moving on…

Saying goodbye to venture capital

In a story that sent the entirety of Silicon Valley into a frenzy, Forbes reported that Andreessen Horowitz was denouncing its status as a venture capital firm and would register all its employees as financial advisors. For those inclined, Crunchbase News’ Alex Wilhelm and I unpacked what this means in the latest episode of Equity; for those less inclined, here’s the TLDR: For a16z to have the freedom to make riskier bets, like buying public company stock or heaps of cryptocurrency, the title of financial advisor gives them that ability.

Femtech’s billion-dollar year

Femtech, defined as any software, diagnostics, products and services that leverage technology to improve women’s health, has attracted some $250 million in VC funding so far this year, according to PitchBook. That puts the sector on pace to secure nearly $1 billion in investment by year-end, greatly surpassing last year’s record of $650 million. For more historical context, startups in the space brought in only $62 million in 2012, $225 million in 2014 and $231 million in 2016.

The 20-Min Term Sheet

Alternative financier Clearbanc says it will invest $1 billion in 2,000 e-commerce startups in 2019. Here’s the catch: Until the companies have paid back 106 percent of Clearbanc’s investment, Clearbanc takes a percentage of their revenues every month. Clearbanc’s goal is to help companies preserve equity, favoring a revenue share model rather than the traditional VC model, which eats equity in startups in exchange for capital. I spoke to Clearbanc co-founder Michele Romanow to learn more about Clearbanc’s attempt to disrupt venture capital.

Startup capital

Extra Crunch

TechCrunch’s Megan Rose Dickey authored the be-all-end-all story on the shared-electric-scooter business. Here’s a quick passage: “The startup ecosystem had become accustomed to the ethos of begging for forgiveness, rather than asking for permission. But that’s not the case with electric scooters. These companies have found their entire businesses to be contingent on the continued approval from individual cities all over the world. That inherently creates a number of potential conflicts.” Extra Crunch subscribers can read the full story here. 

Plus, we dropped the Niantic EC-1, in which Greg Kumparak dives deep into the history of the maker Pokemon Go, contributor Sherwood Morrison looked at remote workers and nomads, who represent the next tech hub.

Unicorns are investors, too

TechCrunch has confirmed that Airbnb has invested between $150 million to $200 million in Indian hotel startup Oyo. Airbnb confirmed the existence of the deal but not the exact amount. The home-sharing giant is continuing to widen its focus beyond “unconventional” hotels as it prepares to begin selling pubic market investors on its long-term vision. Remember, this deal comes right after its big acquisition of HotelTonight.

M&A

WeWork acquired Managed by Q this week, a VC-backed startup that helps office managers and other decision-makers handle supply stocking, cleaning, IT support and other non-work related tasks in the office by simply using the Managed by Q dashboard. The company was most recently valued at $250 million, having raised a total of $128.25 million from investors such as GV,  RRE and Kapor Capital.

#Equitypod

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I chat about the future of a16z, Jumia’s IPO, the Midas list and more of this week’s headlines.

Xiaomi teases another look at its foldable phone

Xiaomi is back with another teaser of the foldable concept device it first showed off in January.

This time around, in a video posted to its Weibo account, the Chinese company showed off the device working in tablet mode and, after folding, regular phone mode to illustrate how seamlessly it can be tucked up and put away… in this case atop of a cup of noodles.

Video: hat tip The Verge

Xiaomi has said it is developing a device — the previous video included a call-out for ideas and feedback — so the project isn’t likely as advanced as soon-to-launch products from Samsung, Huawei or lesser known Chinese brand Royole.

Unlike those three, Xiaomi’s offers two foldable edges instead of just one. That would appear to present a much tougher challenge in terms of design and logistics, but this new teaser (and there’s no doubt Xiaomi chose it carefully) seems to show impressive results. The phone folds nicely in terms of hardware and software, but you’d imagine those edges will make it thicker than others.

It’s all ifs and buts for now, though, since Xiaomi isn’t giving up details of what this product might become… or even whether it will become one at all. But Xiaomi being Xiaomi, you’d imagine that when it does drop, it won’t just be the two folds that set it apart from the rest. The Chinese firm is massively price-sensitive, so you can expect that it’ll price any foldable phone it releases much lower than the $2,000 or so that Samsung and Huawei are asking for their gen-one efforts.

Fictiv raises $33M to be the ‘AWS of hardware manufacturing’

Hardware, as the saying goes, is hard, but today a startup has raised some money for a manufacturing service that it believes can make the prospect of starting and running hardware businesses a little easier. Fictiv, which positions itself as a kind of AWS for manufacturing — providing a platform both to design components and help get them produced — has raised $33 million, money that it will use to continue expanding its production ecosystem, the range of components that it can make, and to grow its customer base.

The company is not disclosing its valuation, but, according to PitchBook, the company was valued at around $65 million post-money in its last fundraise, which could put the company at around $100 million with this latest injection. This Series C was led by G2VP, with new strategic investor Mitsui & Co. and previous backers  Accel, Bill Gates, Intel Capital, Sinovation and Tandon Group, also participating. Fictiv has raised $58 million to date.

Injection may be the operative word here — or at least one of them. Fictiv today works across manufacturing plants in China and the Bay Area, covering a range of processes, including injection molding, CNC machining, 3D printing and urethane casting, covering a variety of materials. Customers use the company’s cloud-based software to design and order parts which are routed by Fictiv to the plants best suited to make them. Current customers include the likes of Sphero and Facebook, which use Fictiv’s services for prototyping,

The problem that Fictiv is solving has been a persistent one in the world of hardware: making prototypes can cost a lot and be very inefficient, and that’s before you move into full-scale manufacturing, which can be challenging even with economies of scale. It’s also a very crowded field, with a number of different companies all vying to help fill the role of manufacturing enabler (and it is a field also littered with failures). But over the years, we’ve seen a lot of advances in manufacturing tech, with the tradeoff that some of the work that it takes on freeing up staff to work on other challenges.

“Fictiv is developing the software infrastructure required to connect the manufacturing workforce and trillions of dollars of capital equipment,” said CEO Dave Evans, who co-founded the company with Nate Evans, in a statement. “In doing so, both product developers and manufacturers will benefit from the efficiencies gained by eliminating unnecessary, repetitive tasks and unlocking employees to focus on creative problem solving.”

“We are excited to be part of the digital transformation of the status quo in manufacturing,” said ​Daniel Oros​, Partner at G2VP, in a statement. “Fictiv’s innovative tools and services address the critical gap in contract manufacturing that will lead to a massive shift in how consumer and industrial products are manufactured.”