Facebook to acquire Giphy in a deal reportedly worth $400 million

Facebook will acquire Giphy, the web-based animated gif search engine and platform provider, Facebook confirmed today, in a deal worth around $400 million, according to a report by Axios. Facebook said it isn’t disclosing terms of the deal. Giphy has grown to be a central source for shareable, high-engagement content, and its animated response gifs are available across Facebook’s platforms, as well as through other social apps and services on the web.

Most notably, Giphy provides built-in search and sticker functions for Facebook’s Instagram, and it will continue to operate in that capacity, becoming a part of the Instagram team. Giphy will also be available to Facebook’s other apps through existing and additional integrations. People will still be able to upload their own GIFs, and Facebook intends to continue to operate Giphy under its own branding and offer integration to outside developers.

Facebook says it will invest in additional tech development for Giphy, as well as build out new relationships for it on both the content side and the endpoint developer side. The company says that fully 50% of traffic that Giphy receives already comes from Facebook’s apps, including Instagram, Messenger, the FB app itself and WhatsApp .

Giphy was founded in 2013, and was originally simply a search engine for gifs. The website’s first major product expansion was an extension that allowed sharing via Facebook, introduced later in its founding year, and it quickly added Twitter as a second integration. According to the most recent data from Crunchbase, Giphy had raised $150.9 million across five rounds, backed by funders including DFJ Growth, Lightspeed, Betaworks, GV, Lerer Hippeau and more.

John Borthwick & Matt Hartman of betaworks discuss coronavirus adaptation strategies

Yesterday, I had the pleasure of hopping on Zoom with betaworks’ John Borthwick and Matt Hartman to discuss the tech world’s adaptation to this new locked-down world, the future of new media and answer questions from the audience.

We discussed whether new media companies can raise capital right now, and touched on emerging trends around audio, voice, AR, live events, travel-related companies and many other topics.

It was a delight, and I’m excited to do more of these in the future.

For those of you who missed the Zoom, here’s a rundown of what we discussed (audio embed below).

Join betaworks’ John Borthwick and Matt Hartman on a live WFH conference call tomorrow at 3pm EDT

The world is changing fast. With the spread of coronavirus keeping folks in their homes, there’s no time like the present to connect with people online.

Tomorrow at 3pm EDT, betaworks’ John Borthwick and Matt Hartman will be joining us for a live conference call via Zoom (here’s the dial-in link) for everyone on TechCrunch. Folks will be able to join and get characteristically insightful answers from these two tech scene veterans.

John Borthwick is cofounder and CEO of betaworks, the startup studio that has fostered companies like Digg, Dots, Giphy, Chartbeat, TweetDeck, Gimlet Media, Bitly, and Quibb. Borthwick is one of New York’s most prestigious investors and, on a personal note, a delightful conversationalist.

Matt Hartman is betaworks’ first partner, leading the company’s external investment arm. He’s invested in companies like Giphy, Anchor, Gimlet Media, Twitter, Venmo, Kickstarter, and Tumblr.

Both Borthwick and Hartman are experts in the field of new media, among other things, and will have some interesting insights into the changing landscape of media, both broadly and within the scope of coronavirus.

We’ll be talking to them about how they’re advising their portfolio companies during this tumultuous time, which of the coronavirus-caused evolutions are here to stay and which are temporary, and what tech they’re most interested in right now.

Folks who have questions should come prepared. I’m going to try to prioritize audience questions over my own, so jot ’em down now!

Join us tomorrow (Thursday, March 26) at 3pm EDT/noon PDT using this Zoom link. If you can’t make it to the call, we’ll publish the transcript on Extra Crunch shortly after the call. See you there!

Here are the six startups in Betaworks’ new Audiocamp

Back in September, Betaworks put out a call for startups to participate in its latest “camp,” this one focused on audio.

Danika Laszuk, the head of Betaworks Camp, told me at the time that the startup studio was looking for companies that are trying to build “audio-first” experiences for smart speakers and wireless headphones, or pursuing other audio-related opportunities like synthetic audio or social audio.

Now Betaworks is unveiling the six startups that it has selected to participate in the program, covering everything from game assistants to AI music production. Each startup receives a pre-seed investment from Betaworks, and will be working out of the firm’s New York City offices for the next three months.

Here are the companies:

    • Storm is working on a live audio platform that it says will allow your friends to ask you anything.
    • Midgame is building voice-enabled gaming assistants, starting with a bot that answers questions to improve your gameplay in Stardew Valley.
    • Scout FM is developing hands-free listening experiences such as podcast radio stations and voice assistants for Amazon Alexa, Apple CarPlay and Android Auto.
    • Never Before Heard Sounds is an AI-powered music production company, working to create new sounds and new musical datasets.
    • SyncFloor is a marketplace of commercial music that can be used in movies, TV shows, ads, video games and elsewhere.
    • The Next Big Idea Club offers a subscription for curated nonfiction books — you can buy the books themselves, but also read, watch or listen to condensed summaries.

Here are the six startups in Betaworks’ new Audiocamp

Back in September, Betaworks put out a call for startups to participate in its latest “camp,” this one focused on audio.

Danika Laszuk, the head of Betaworks Camp, told me at the time that the startup studio was looking for companies that are trying to build “audio-first” experiences for smart speakers and wireless headphones, or pursuing other audio-related opportunities like synthetic audio or social audio.

Now Betaworks is unveiling the six startups that it has selected to participate in the program, covering everything from game assistants to AI music production. Each startup receives a pre-seed investment from Betaworks, and will be working out of the firm’s New York City offices for the next three months.

Here are the companies:

    • Storm is working on a live audio platform that it says will allow your friends to ask you anything.
    • Midgame is building voice-enabled gaming assistants, starting with a bot that answers questions to improve your gameplay in Stardew Valley.
    • Scout FM is developing hands-free listening experiences such as podcast radio stations and voice assistants for Amazon Alexa, Apple CarPlay and Android Auto.
    • Never Before Heard Sounds is an AI-powered music production company, working to create new sounds and new musical datasets.
    • SyncFloor is a marketplace of commercial music that can be used in movies, TV shows, ads, video games and elsewhere.
    • The Next Big Idea Club offers a subscription for curated nonfiction books — you can buy the books themselves, but also read, watch or listen to condensed summaries.

Where VCs are looking for voice startup investments

Led by Amazon’s Alexa, smart speakers’ install base is expected to reach 200 million units worldwide by 2020. A quarter of Americans over the age of 12 own a smart speaker, and the majority of those users have more than one device in their home. Moreover, Apple could sell 50 million of its Airpods this year (generating $8 billion in sales) as Bluetooth earpieces explode in popularity.

For the market penetration of this hardware, the app ecosystem remains limited in terms of mainstream adoption. Podcast production and consumption has exploded, but they don’t take advantage of smart speakers and headphones as interactive devices. Even though there were 57,000 Alexa skills available at the end of last year, most people are using smart speakers mainly to check the weather, check the news, ask simple questions and play music.

If voice is a new operating system, where are the opportunities to build giant companies on top of it?

To get a better sense of how the smart money views this market, I asked five VCs who have spent the most time in this space to share which types of startups have captured their attention:

  • Matt Hartman, Partner at Betaworks Ventures
  • Nicole Quinn, Partner at Lightspeed Venture Partners
  • Paul Bernard, Director of the Alexa Fund at Amazon
  • Ann Miura-Ko, Partner at Floodgate
  • Jordan Cooper, Partner at Pace Capital

Here are their responses:

Matt Hartman, Partner at Betaworks Ventures

The most recent wave of audio was about constant connectivity and streaming, and we invested in Anchor, Gimlet, and other audio-first businesses that would thrive in the podcast renaissance. For the next wave of audio, we’re focused [on] three broad categories: personalization, new behaviors/new interfaces, and monetization. Personalization means both utilizing location, Apple Watch, and other data to create magical audio experiences and customized audio content, but also advances in generative content like Resemble.ai and Descript that can create custom audio. 

In terms of new behaviors/new interfaces, people are leaving their Airpods in longer, which means there may be an opportunity for “Airpod-first” product design. Finally, as audio becomes an industry, monetization will be improved and also re-thought: subscription products such as Shine and Headspace are interesting in the context that if they don’t really work as ad-supported podcasts, and they are packaged in such a way that people are willing to pay a monthly or annual subscription.

Nicole Quinn, Partner at Lightspeed Venture Partners

We are in between platforms and it’s not clear what the next platform will be. VR and AR are options, but I believe voice will be the next major platform with mass adoption. The biggest hurdle right now is discoverability which in turn leads to engagement and retention issues. This was the same for mobile before the App Store allowed us to discover new apps. We need the same for voice.

We will then see voice move from a music and list creation tool to one which quickly becomes part of popular culture around shopping, games, travel, meditation, etc. Leading audio apps such as Calm, the meditation and sleep app, are already set up to take advantage of the move to voice.

Paul Bernard, Director of the Alexa Fund at Amazon

Alexa got its start in the home, but we knew early on that bringing this experience to customers outside the home would become important. Our investments in companies like North (smart glasses), Vesper (power-efficient microphones) and Syntiant (power-efficient AI chip) were inspired by this vision, and reflect the idea that ambient computing is becoming part of daily life.

These companies are also helping create the surface area for interactive entertainment and information services, such as Drivetime’s trivia games (we are an investor there too), and social ones like TTYL, which enables friends wearing earbuds to maintain “audio-presence” with each other throughout their day while they multi-task. We also expect to see innovation in how voice can help seniors aging in place — our recent investment in Labrador Systems, which builds assistive robots, is a good example of this trend.

Betaworks’ next startup camp is focused on audio

Startup studio Betaworks is putting out a call for audio-focused startups.

Specifically, it’s announcing Audiocamp, the latest in its “camp” programs, where it backs a handful of early-stage startups, all working in a specific area. (The last one was focused on synthetic media.)

“When we make these calls for a camp around a theme, what we’re trying to do is see everything that’s out there in a short period of time,” said Danika Laszuk, the head of Betaworks Camp. “We use that to help us understand what are the more innovative things, and where are 57 companies trying to build essentially the same thing?”

The startups, meanwhile, get a “pre-seed” investment from Betaworks, as well as three months to work out of the firm’s office in New York City, where they can learn from and collaborate with each other.

Why focus on audio now? Laszuk said the firm has been interested in this area for a long time — it was an early investor in podcasting startups Gimlet and Anchor, which Spotify acquired earlier this year. The current interest in audio isn’t just driven by the podcast boom, but also the opportunities around smart speakers and what Lazsuk said will be “the next wave of innovation,” building “audio-first” services for people who are wearing AirPods and other wireless headphones all the time.

She acknowledged that this “always-in” behavior isn’t necessarily a good thing, since it can lead people to become increasingly oblivious to the world around them, but she said that’s been an ongoing worry since the first iPod (and maybe even before that).

“I’m not sure we will single-handedly break people of that addiction, but there’s so much more awareness around that, and maybe I could have this more thoughtful, context-aware, mobile-appropriate experience,” she said.

And that’s just one of the categories that Betaworks said it’s looking at for Audiocamp. The others are: Social audio experiences, synthetic/generative audio and music, audio utilities, natural language tools for audio, content discovery and monetization, augmented reality for audio and voice-first applications for smart speakers.

As a podcaster myself, I was particularly interested in Laszuk’s thoughts on discovery and monetization. On the discovery side, she predicted we’ll see AI-powered tools that “help us all find the gems in the long tail.”

As for monetization, she noted that some companies have already had success with subscriptions and listener-supported models. So while she isn’t sure what comes next, she’s “really interested in things that are not ad-based — or if they are ad-based, they’re more innovative and thoughtful than just new ad networks.”

The first application deadline is October 15. Interested startups can read more in Laszuk’s blog post and apply here.

Streem buys Selerio in effort to boost its AR teleconferencing tech

Streem, an AR startup that is meshing teleconferencing software with computer vision tech, has acquired a small UK startup called Selerio that’s also building out augmented reality technologies.

The startups were both members of betaworks’ VisionCamp accelerator program last year where they met and collaborated while tackling separate computer vision problems in the AR space.

Streem’s play is that they can create a kind of souped-up Skype call that enables home service providers to get more visual data in the course of chatting with home-owners. This can be something simple like character recognition that enables users to point their phone rather than reciting a 30-character serial number, the company can also take measurements or save localized notes.

The Portland startup has disclosed more than $10 million in funding, though they have also just closed a new bout of funding though they’re not sharing the amount yet.

Selerio’s focus is all about gaining a contextual understanding of a space. The startup was spun out of research from Cambridge University. The company has not disclosed its amount of seed funding, but betaworks, Greycroft Partners and GGV Capital are among its backers. All three of Selerio’s employees have joined Streem as part of the acquisition.

Media VC theses, SEO keywords, cosmology, and brand design

Where top VCs are investing in Media, Entertainment & Gaming

Our media columnist Eric Peckham (who is hard at work on the Unity EC-1, which we will start to publish here shortly) pinged his network of media investors to figure out what the media VC world is up to in mid-2019:

Here are the media investment theses of: Cyan Banister (Founders Fund), Alex Taussig (Lightspeed), Matt Hartman (betaworks), Stephanie Zhan (Sequoia), Jordan Fudge (Sinai), Christian Dorffer (Sweet Capital), Charles Hudson (Precursor), MG Siegler (GV), and Eric Hippeau (Lerer Hippeau).

Lots of interesting ideas in Eric’s piece, but one that I thought was particularly interesting was from Matt Hartman at Betaworks:

In 2019, I’m paying attention to Synthetic Media and the continued fluidity between what’s real and artificially generated inside of social media. Synthetic celebrities will be complemented by synthesized voice as these content types go mainstream. The technology tools to create these characters will improve and we’ll also see technology built to detect malicious use of these new tools.

Where top VCs are investing in media, entertainment & gaming

Most of the strategy discussions and news coverage in the media and entertainment industry is concerned with the unfolding corporate mega-mergers and the political implications of social media platforms.

These are important conversations, but they’re largely a story of twentieth-century media (and broader society) finally responding to the dominance Web 2.0 companies have achieved.

To entrepreneurs and VCs, the more pressing focus is on what the next generation of companies to transform entertainment will look like. Like other sectors, the underlying force is advances in artificial intelligence and computing power.

In this context, that results in a merging of gaming and linear storytelling into new interactive media. To highlight the opportunities here, I asked nine top VCs to share where they are putting their money.

Here are the media investment theses of: Cyan Banister (Founders Fund), Alex Taussig (Lightspeed), Matt Hartman (betaworks), Stephanie Zhan (Sequoia), Jordan Fudge (Sinai), Christian Dorffer (Sweet Capital), Charles Hudson (Precursor), MG Siegler (GV), and Eric Hippeau (Lerer Hippeau).

Cyan Banister, Partner at Founders Fund

In 2018 I was obsessed with the idea of how you can bring AI and entertainment together. Having made early investments in Brud, A.I. Foundation, Artie and Fable, it became clear that the missing piece behind most AR experiences was a lack of memory.