Contabilizei raises $20 million to ease Brazilians’ tax pain

Online tax filing and accounting service, Contabilizei, has raised $20 million in a new round of financing led by Point72 Ventures, the early stage investment arm associated with hedge fund guru Steven Cohen’s Point72 Asset Management.

Smart money in both the venture and private equity space has been long Brazil for a bit, and the new investment provides even more firepower to the thesis that Brazil’s startup ecosystem is on the move.

“For the Brazilian ecosystem, the investment represents the trust and the opportunity that we have here in the Brazilian market. For quite some time it was difficult to attract this kind of investment from abroad,” says Contabilizei chief executive Vitor Torres. Even though we had a recession there are technology companies that are growing,” Torres says, saying that the company has already staved off acquisition offers and will eventually eye a potential public offering in U.S. or domestic markets.

Though it was only founded five years ago, the company already has 200 employees and more than 10,000 customers throughout Brazil.

Contabilizei has already audited more than 2 billion reals in customer revenue and saved its users over 500 million reals in taxes. For new companies, Contabilizei will also offer free business registration and formation filings. So far, the company has helped 5,000 new businesses get their paperwork done around the country.

“In Brazil, one of the greatest frictions for a small company is meeting its tax reporting requirements,” said Pete Casella, Head of Fintech & Financial Services Investments at Point72 Ventures. “By building an automated tax accounting service that can deliver services at a fraction of the cost of a traditional accountant, we believe that Contabilizei has established the high trust relationships that will enable it to serve customers in many new ways over the coming years.”

New investors also contributed to the round including the International Financial Corp., an investment arm of the The World Bank, and Quona Capital, Quadrant, and the Fintech Collective. They joined existing company backers Kaszek Ventures, e.Bricks, Endeavor Catalyst, and Curitiba Angels.

“Our goal is to simplify the entrepreneur’s routine so they can focus on their own business and not on bureaucracy. We are only at the beginning, and in three years we want to grow 15 times more,” said Vitor Torres, chief executiver and founder of Contabilizei, in a statement. “We were pioneers in the debureaucratization of accounting in the country and we managed to do it with a quality that surpasses 98% of our customers’ satisfaction.”

Why Silicon Valley needs more visas

When I hear protesters shout, “Immigrants are welcome here!” at the San Francisco immigration office near my startup’s headquarters, I think about how simple a phrase that is for a topic that is so nuanced, especially for me as an immigrant entrepreneur.

Growing up in Brazil, I am less familiar with the nuances of the American debate on immigration legislation, but I know that immigrants here add a lot of jobs and stimulate the local economy. As an immigrant entrepreneur, I’ve tried to check all of those boxes, and really prove my value to this country.

My tech startup Brex has achieved a lot in a short period of time, a feat which is underscored by receiving a $1 billion dollar valuation in just one year. But we didn’t achieve that high level of growth in spite of being founded by immigrants, but because of it. The key to our growth and to working towards building a global brand is our international talent pool, without it, we could never have gotten to where we are today.

So beyond Brex, what do the most successful Silicon Valley startups have in common? They’re also run by immigrants. In fact, not only are 57% of the Bay Area’s STEM tech workers immigrants, they also make up 25% of business founders in the US. You can trace the immigrant entrepreneurial streak in Silicon Valley from the founders of SUN Microsystems and Google to the Valley’s most notorious Twitter User, Tesla’s Elon Musk.

Immigrants not only built the first microchips in Silicon Valley, but they built these companies into the tech titans that they are known as today. After all, more than 50% of billion dollar startups are founded by immigrants, and many of those startups were founded by immigrants on H-1B visas.

Photo courtesy of Flickr/jvoves

While it might sound counterintuitive, immigrants create more jobs and make our economy stronger. Research from the National Foundation of American Policy (NFAP) has shown that immigrant-founded billion-dollar companies doubled their number of employees over the past two years. According to the research, “WeWork went from 1,200 to 6,000 employees between 2016 and 2018, Houzz increased from 800 to 1,800 employees the last two years, while Cloudflare went from 225 to 715 employees.”

We’ve seen the same growth at Brex. In just one year we hired 70 employees and invested over $6 million dollars in creating local jobs. Our startup is not alone, as Inc. recently reported, “50 immigrant-founded unicorn startups have a combined value of $248 billion, according to the report [by NFAP], and have created an average of 1,200 jobs each.”

One of the fundamental drivers of our success is our international workforce. Many of our key-hires are from all over Latin America, spanning from Uruguay to Mexico. In fact, 42% of our workforce is made up of immigrants and another 6% are made up of children of immigrants. Plenty of research shows that diverse teams are more productive and work together better, but that’s only part of the reason why you should bet on an international workforce. When you’re working with the best and brightest from every country, it inspires you to bring forth your most creative ideas, collaborate, and push yourself beyond your comfort zone. It motivates you to be your best.

With all of the positive contributions immigrants bring to this country, you’d think we’d have less restrictive immigration policies. However, that’s not the case. One of the biggest challenges that I face is hiring experienced, qualified engineers and designers to continue innovating in a fast-paced, competitive market.

This is a universal challenge in the tech industry. For the past 10 years, software engineers have been the #1 most difficult job to fill in the United States. Business owners are willing to pay 10-20 percent above the market rate for top talent and engineers. Yet, we’re still projected to have a shortage of two million engineering jobs in the US by 2022. How can you lead the charge of innovation if you don’t have the talent to do it?

What makes matters worse is that there are so few opportunities and types of visas for qualified immigrants. This is limiting job growth, knowledge-sharing, and technological breakthroughs in this country. And we risk losing top talent to other nations if we don’t loosen our restrictive visa laws.

H1-B visa applications fell this year, and at the same time, these visas have become harder to obtain and it has become more expensive to acquire international talent. This isn’t the time to abandon the international talent pool, but to invest in highly specialized workers that can give your startup a competitive advantage.

Already, there’s been a dramatic spike in engineering talent moving to Canada, with a 40% uptick in 2017. Toronto, Berlin, and Singapore are fastly becoming burgeoning tech hubs, and many fear (rightfully) that they will soon outpace the US in growth, talent, and developing the latest technologies.

This year, U.S. based tech companies generated $351 billion of revenue in 2018. The U.S. can’t afford to miss out on this huge revenue source. And, according to Harvard Business School Professor William R. Kerr and the author of The Gift of Global Talent: How Migration Shapes Business, Economy & Society, “Today’s knowledge economy dictates that your ability to attract, develop, and integrate smart minds governs how prosperous you will be.”

Immigrants have made Silicon Valley the powerhouse that it is today, and severely limiting highly-skilled immigration benefits no-one. Immigrants have helped the U.S. build one of the best tech hubs in the world— now is the time for startups to invest in international talent so that our technology, economy, and local communities can continue to thrive.

President Bolsonaro should boost Brazil’s entrepreneurial ecosystem

In late October following a significant victory for Jair Bolsonaro in Brazil’s presidential elections, the stock market for Latin America’s largest country shot up. Financial markets reacted favorably to the news because Bolsonaro, a free-market proponent, promises to deliver broad economic reforms, fight corruption and work to reshape Brazil through a pro-business agenda. While some have dubbed him as a far-right “Trump of the Tropics” against a backdrop of many Brazilians feeling that government has failed them, the business outlook is extremely positive.

When President-elect Bolsonaro appointed Santander executive Roberto Campos as new head of Brazil’s central bank in mid-November, Brazil’s stock market cheered again with Sao Paulo’s Bovespa stocks surging as much as 2.65 percent on the day news was announced. According to Reuters, “analysts said Bolsonaro, a former army captain and lawmaker who has admitted to having scant knowledge of economics, was assembling an experienced economic team to implement his plans to slash government spending, simplify Brazil’s complex tax system and sell off state-run companies.”

Admittedly, there are some challenges as well. Most notably, pension-system reform tops the list of priorities to get on the right track quickly. A costly pension system is increasing the country’s debt and contributed to Brazil losing its investment-grade credit rating in 2015. According to the new administration, Brazil’s domestic product could grow by 3.5 percent during 2019 if Congress approves pension reform soon. The other issue that’s cropped up to tarnish the glow of Bolsonaro coming into power are suspect payments made to his son that are being examined by COAF, the financial crimes unit.

While the jury is still out on Bolsonaro’s impact on Brazilian society at large after being portrayed as the Brazilian Trump by the opposition party, he’s come across as less authoritarian during his first days in office. Since the election, his tone is calmer and he’s repeatedly said that he plans to govern for all Brazilians, not just those who voted for him. In his first speech as president, he invited his wife to speak first which has never happened before.

Still, according to The New York Times, “some Brazilians remain deeply divided on the new president, a former army captain who has hailed the country’s military dictators and made disparaging remarks about women and minority groups.”

Others have expressed concern about his environment impact with the “an assault on environmental and Amazon protections” through an executive order within hours of taking office earlier this week. However, some major press outlets have been more upbeat: “With his mix of market-friendly economic policies and social conservativism at home, Mr. Bolsonaro plans to align Brazil more closely with developed nations and particularly the U.S.,” according to the Wall Street Journal this week.

Based on his publicly stated plans, here’s why President Bolsonaro will be good for business and how his administration will help build an even stronger entrepreneurial ecosystem in Brazil:

Bolsonaro’s Ministerial Reform

President Temer leaves office with 29 government ministries. President Bolsonaro plans to reduce the number of ministries to 22, which will reduce spending and make the government smaller and run more efficiently. We expect to see more modern technology implemented to eliminate bureaucratic red tape and government inefficiencies.

Importantly, this will open up more partnerships and contracting of tech startups’ solutions. Government contacts for new technology will be used across nearly all the ministries including mobility, transportation, health, finance, management and legal administration – which will have a positive financial impact especially for the rich and booming SaaS market players in Brazil.

Government Company Privatization

Of Brazil’s 418 government-controlled companies, there are 138 of them on the federal level that could be privatized. In comparison to Brazil’s 418, Chile has 25 government-controlled companies, the U.S. has 12, Australia and Japan each have eight, and Switzerland has four. Together, Brazil-owned companies employ more than 800,000 people today, including about 500,000 federal employees. Some of the largest ones include petroleum company Petrobras, electric utilities company EletrobrasBanco do Brasil, Latin America’s largest bank in terms of its assets, and Caixa Economica Federal, the largest 100 percent government-owned financial institution in Latin America.

The process of privatizing companies is known to be cumbersome and inefficient, and the transformation from political appointments to professional management will surge the need for better management tools, especially for enterprise SaaS solutions.

STEAM Education to Boost Brazil’s Tech Talent

Based on Bolsonaro’s original plan to move the oversight of university and post-graduate education from the Education Ministry to the Science and Technology Ministry, it’s clear the new presidential administration is favoring more STEAM courses that are focused on Science, Technology, Engineering, the Arts and Mathematics.

Previous administrations threw further support behind humanities-focused education programs. Similar STEAM-focused higher education systems from countries such as Singapore and South Korea have helped to generate a bigger pipeline of qualified engineers and technical talent badly needed by Brazilian startups and larger companies doing business in the country. The additional tech talent boost in the country will help Brazil better compete on the global stage.

The Chicago Boys’ “Super” Ministry

The merger of the Ministry of Economy with the Treasury, Planning and Industry and Foreign Trade and Services ministries will create a super ministry to be run by Dr. Paulo Guedes and his team of Chicago Boys. Trained at the Department of Economics in the University of Chicago under Milton Friedman and Arnold Harberger, the Chicago Boys are a group of prominent Chilean economists who are credited with transforming Chile into Latin America’s best performing economies and one of the world’s most business-friendly jurisdictions. Joaquim Levi, the recently appointed chief of BNDES (Brazilian Development Bank), is also a Chicago Boy and a strong believer in venture capital and startups.

Previously, Guedes was a general partner in Bozano Investimentos, a pioneering private equity firm, before accepting the invitation to take the helm of the world’s eighth-largest economy in Brazil. To have a team of economists who deeply understand the importance of rapid-growth companies is good news for Brazil’s entrepreneurial ecosystem. This group of 30,000 startup companies are responsible for 50 percent of the job openings in Brazil and they’re growing far faster than the country’s GDP.

Bolsonaro’s Pro-Business Cabinet Appointments

President Bolsonaro has appointed a majority of technical experts to be part of his new cabinet. Eight of them have strong technology backgrounds, and this deeper knowledge of the tech sector will better inform decisions and open the way to more funding for innovation.

One of those appointments, Sergio Moro, is the federal judge for the anti-corruption initiative knows as “Operation Car Wash.” With Moro’s nomination to Chief of the Justice Department and his anticipated fight against corruption could generate economic growth and help reduce unemployment in the country. Bolsonaro’s cabinet is also expected to simplify the crazy and overwhelming tax system. More than 40 different taxes could be whittled down to a dozen, making it easier for entrepreneurs to launch new companies.

In general terms, Brazil and Latin America have long suffered from deep inefficiencies. With Bolsonaro’s administration, there’s new promise that there will be an increase in long-term infrastructure investments, reforms to reduce corruption and bureaucratic red tape, and enthusiasm and support for startup investments in entrepreneurs who will lead the country’s fastest-growing companies and make significant technology advancements to “lift all boats.”

Apple losses trigger a plunge in US markets

Bad news from Apple and signs of slowing international and domestic growth sent stocks tumbling in Thursday trading on all of the major markets.

Investors erased some $75 billion in value from Apple alone… an amount known technically as a shit ton of money. But stocks were down broadly based on Apple’s news, with the Nasdaq falling 3 percent, or roughly 202.44 points, and the Dow Jones Industrial Average plummeting 660.02 points, or roughly 2.8 percent.

Apple halted trading of its stock yesterday afternoon to provide lower guidance for upcoming earnings.

Apple’s news from late yesterday that it would miss its earnings estimates by several billion dollars thanks to a collapse of sales in China was the trigger for a broad sell-off that erased gains from the last trading sessions before the New Year (which saw the biggest one-day gain in stocks in recent history).

Apple’s China woes could be attributed to any number of factors, D.A. Davidson senior analyst Tom Forte said. The weakening Chinese economy, patriotic fervor from Chinese consumers or the increasingly solid options available from domestic manufacturers could all be factors.

Sales were suffering in more regions than China, Forte noted. India, Russia, Brazil and Turkey also had slowing sales of new iPhone models, he said.

Investors have more than just weakness from Apple to be concerned about. Chinese manufacturing flipped from growth to contraction in December and analysts in the region expect that the pain will continue through at least the first half of the year.

“We expect a much worse slowdown in the first half, followed by a more serious and aggressive government easing/stimulus centred on deregulating the property market in big cities, and then we might see stabilisation and even a small rebound later this year,” Ting Lu, chief China economist at Nomura in Hong Kong, wrote in a report quoted by the Financial Times.

U.S. manufacturing isn’t doing much better, according to an industrial gauge published by The Institute for Supply Management. The institute’s index dropped to its lowest point in two years.

“There’s just so much uncertainty going on everywhere that businesses are just pausing,” Timothy Fiore, chairman of ISM’s manufacturing survey committee, told Bloomberg. “No matter where you look, you’ve got chaos everywhere. Businesses can’t operate in an environment of chaos. It’s a warning shot that we need to resolve some of these issues.”

The index remains above the threshold of a serious contraction in American industry, but the 5.2-point drop from the previous month in the manufacturing survey is the largest since the financial crisis, and was only exceeded one other time — following the September 11, 2001 terror attacks on the U.S.

Facebook is not equipped to stop the spread of authoritarianism

After the driver of a speeding bus ran over and killed two college students in Dhaka in July, student protesters took to the streets. They forced the ordinarily disorganized local traffic to drive in strict lanes and stopped vehicles to inspect license and registration papers. They even halted the vehicle of the Chief of Bangladesh Police Bureau of Investigation and found that his license was expired. And they posted videos and information about the protests on Facebook.

The fatal road accident that led to these protests was hardly an isolated incident. Dhaka, Bangladesh’s capital, which was ranked the second least livable city in the world in the Economist Intelligence Unit’s 2018 global liveability index, scored 26.8 out of 100 in the infrastructure category included in the rating. But the regional government chose to stifle the highway safety protests anyway. It went so far as raids of residential areas adjacent to universities to check social media activity, leading to the arrest of 20 students. Although there were many images of Bangladesh Chhatra League, or BCL men, committing acts of violence on students, none of them were arrested. (The BCL is the student wing of the ruling Awami League, one of the major political parties of Bangladesh.)

Students were forced to log into their Facebook profiles and were arrested or beaten for their posts, photographs, and videos. In one instance, BCL men called three students into the dorm’s guestroom, quizzed them over Facebook posts, beat them, and then handed them over to police. They were reportedly tortured in custody.

A pregnant school teacher was arrested and jailed for just over two weeks for “spreading rumors” due to sharing a Facebook post about student protests. A photographer and social justice activist spent more than 100 days in jail for describing police violence during these protests; he told reporters he was beaten in custody. And a university professor was jailed for 37 days for his Facebook posts.

A Dhaka resident who spoke on the condition of anonymity out of fear for their safety said that the crackdown on social media posts essentially silenced student protesters, many of which removed photos, videos, and status updates about the protests from their profiles entirely. While the person thought that students were continuing to be arrested, they said, “nobody is talking about it anymore — at least in my network — because everyone kind of ‘got the memo’ if you know what I mean.”

This isn’t the first time Bangladeshi citizens have been arrested for Facebook posts. As just one example, in April 2017, a rubber plantation worker in southern Bangladesh was arrested and detained for three months for liking and sharing a Facebook post that criticized the prime minister’s visit to India, according to Human Rights Watch.

Bangladesh is far from alone. Government harassment to silence dissent on social media has occurred across the region and in other regions as well — and it often comes hand-in-hand with governments filing takedown requests with Facebook and requesting data on users.

Facebook has removed posts critical of the prime minister in Cambodia and reportedly “agreed to coordinate in the monitoring and removal of content” in Vietnam. Facebook was criticized for not stopping the repression of Rohingya Muslims in Myanmar, where military personnel created fake accounts to spread propaganda which human rights groups say fueled violence and forced displacement. Facebook has since undertaken a human rights impact assessment in Myanmar, and it has also taken down coordinated inauthentic accounts in the country.

UNITED STATES – APRIL 10: Facebook CEO Mark Zuckerberg testifies during the Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee joint hearing on “Facebook, Social Media Privacy, and the Use and Abuse of Data”on Tuesday, April 10, 2018. (Photo By Bill Clark/CQ Roll Call)

Protesters scrubbing Facebook data for fears of repercussions isn’t uncommon. Over and over again, authoritarian-leaning regimes have utilized low-tech strategies to quell dissent. And aside from providing resources related to online privacy and security, Facebook still has little in place to protect its most vulnerable users from these pernicious efforts. As various countries pass laws calling for a local presence and increased regulation, it is possible that the social media conglomerate doesn’t always even want to.

“In many situations, the platforms are under pressure,” said Raman Jit Singh Chima, policy director at Access Now. “Tech companies are being directly sent takedown orders, user data requests. The danger of that is that companies will potentially be overcomplying or responding far too quickly to government demands when they are able to push back on those requests,” he said.

Elections are often a critical moment for oppressive behavior from governments — Uganda, Chad, and Vietnam have specifically targeted citizens — and candidates — during election time. Facebook announced just last Thursday that it had taken down nine Facebook pages and six Facebook accounts for engaging in coordinated inauthentic behavior in Bangladesh. These pages, which Facebook believes were linked to people associated with the Bangladesh government, were “designed to look like independent news outlets and posted pro-government and anti-opposition content.” The sites masqueraded as news outlets, including fake BBC Bengali, BDSNews24, and Bangla Tribune and news pages with photoshopped blue checkmarks, according to the Atlantic Council’s Digital Forensic Research Lab.

Still, the imminent election in Bangladesh doesn’t bode well for anyone who might wish to express dissent. In October, a digital security bill that regulates some types of controversial speech was passed in the country, signaling to companies that as the regulatory environment tightens, they too could become targets.

More restrictive regulation is part of a greater trend around the world, said Naman M. Aggarwal, Asia policy associate at Access Now. Some countries, like Brazil and India, have passed “fake news” laws. (A similar law was proposed in Malaysia, but it was blocked in the Senate.) These types of laws are frequently followed by content takedowns. (In Bangladesh, the government warned broadcasters not to air footage that could create panic or disorder, essentially halting news programming on the protests.)

Other governments in the Middle East and North Africa — such as Egypt, Algeria, United Arab Emirates, Saudi Arabia, and Bahrain — clamp down on free expression on social media under the threat of fines or prison time. And countries like Vietnam have passed laws requiring social media companies to localize their storage and have a presence in the country — typically an indication of greater content regulation and pressure on the companies from local governments. In India, WhatsApp and other financial tech services were told to open offices in the country.

And crackdowns on posts about protests on social media come hand-in-hand with government requests for data. Facebook’s biannual transparency report provides detail on the percentage of government requests the company complies within each country, but most people don’t know until long after the fact. Between January and June, the company received 134 emergency requests and 18 legal processes from Bangladeshi authorities for 205 users or accounts. Facebook turned over at least some data in 61 percent of emergency requests and 28 percent of legal processes.

Facebook said in a statement that it “believes people deserve to have a voice, and that everyone has the right to express themselves in a safe environment,” and that it handles requests for user data “extremely carefully.'”

The company pointed to its Facebook for Journalists resources and said it is “saddened by governments using broad and vague regulation or other practices to silence, criminalize or imprison journalists, activists, and others who speak out against them,” but the company said it also helps journalists, activists, and other people around the world to “tell their stories in more innovative ways, reach global audiences, and connect directly with people.”

But there are policies that Facebook could enact that would help people in these vulnerable positions, like allowing users to post anonymously.

“Facebook’s real names policy doesn’t exactly protect anonymity, and has created issues for people in countries like Vietnam,” said Aggarwal. “If platforms provide leeway, or enough space for anonymous posting, and anonymous interactions, that is really helpful to people on ground.”

BERLIN, GERMANY – SEPTEMBER 12: A visitor uses a mobile phone in front of the Facebook logo at the #CDUdigital conference on September 12, 2015 in Berlin, Germany. (Photo by Adam Berry/Getty Images)

A German court found the policy illegal under its decade-old privacy law in February. Facebook said it plans to appeal the decision.

“I’m not sure if Facebook even has an effective strategy or understanding of strategy in the long term,’ said Sean O’Brien, lead researcher at Yale Privacy Lab. “In some cases, Facebook is taking a very proactive role… but in other cases, it won’t.” In any case, these decisions require a nuanced understanding of the population, culture, and political spectrum in various regions — something it’s not clear Facebook has.

Facebook isn’t responsible for government decisions to clamp down on free expression. But the question remains: How can companies stop assisting authoritarian governments, inadvertently or otherwise?

“If Facebook knows about this kind of repression, they should probably have… some sort of mechanism to at the very least heavily try to convince people not to post things publicly that they think they could get in trouble for,” said O’Brien. “It would have a chilling effect on speech, of course, which is a whole other issue, but at least it would allow people to make that decision for themselves.”

This could be an opt-in feature, but O’Brien acknowledges that it could create legal liabilities for Facebook, leading the social media giant to create lists of “dangerous speech” or profiles on “dissidents,” and could theoretically shut them down or report them to the police. Still, Facebook could consider rolling a “speech alert” feature to an entire city or country if that area becomes volatile politically and dangerous for speech, he said.

O’Brien says that social media companies could consider responding to situations where a person is being detained illegally and potentially coerced into giving their passwords in a way that could protect them, perhaps by triggering a temporary account reset or freeze to prevent anyone from accessing the account without proper legal process. Some actions that might trigger the reset or freeze could be news about an individual’s arrest — if Facebook is alerted to it, contact from the authorities, or contact from friends and loved ones, as evaluated by humans. There could even be a “panic button” type trigger, like Guardian Project’s PanicKit, but for Facebook — allowing users to wipe or freeze their own accounts or posts tagged preemptively with a codeword only the owner knows.

“One of the issues with computer interfaces is that when people log into a site, they get a false sense of privacy even when the things they’re posting in that site are widely available to the public,” said O’Brien. Case in point: this year, women anonymously shared their experiences of abusive coworkers in a shared Google Doc — the so-called “Shitty Media Men” list, likely without realizing that a lawsuit could unmask them. That’s exactly what is happening.

Instead, activists and journalists often need to tap into resources and gain assistance from groups like Access Now, which runs a digital security helpline, and the Committee to Protect Journalists. These organizations can provide personal advice tailored to their specific country and situation. They can access Facebook over the Tor anonymity network. Then can use VPNs, and end-to-end encrypted messaging tools, and non-phone-based two-factor authentication methods. But many may not realize what the threat is until it’s too late.

The violent crackdown on free speech in Bangladesh accompanied government-imposed Internet restrictions, including the throttling of Internet access around the country. Users at home with a broadband connection did not feel the effects of this, but “it was the students on the streets who couldn’t go live or publish any photos of what was going on,” the Dhaka resident said.

Elections will take place in Bangladesh on December 30.

In the few months leading up to the election, Access Now says it’s noticed an increase in Bangladeshi residents expressing concern that their data has been compromised and seeking assistance from the Digital Security hotline.

Other rights groups have also found an uptick in malicious activity.

Meenakshi Ganguly, South Asia director at Human Rights Watch, said in an email that the organization is “extremely concerned about the ongoing crackdown on the political opposition and on freedom of expression, which has created a climate of fear ahead of national elections.”

Ganguly cited politically motivated cases against thousands of opposition supporters, many of which have been arrested, as well as candidates that have been attacked.

Human Rights Watch issued a statement about the situation, warning that the Rapid Action Battalion, a “paramilitary force implicated in serious human rights violations including extrajudicial killings and enforced disappearances,” and has been “tasked with monitoring social media for ‘anti-state propaganda, rumors, fake news, and provocations.'” This is in addition to a nine-member monitoring cell and around 100 police teams dedicated to quashing so-called “rumors” on social media, amid the looming threat of news website shutdowns.

“The security forces continue to arrest people for any criticism of the government, including on social media,” Ganguly said. “We hope that the international community will urge the Awami League government to create conditions that will uphold the rights of all Bangladeshis to participate in a free and fair vote.”

China’s BYD further drives into Chile with 100 electric buses

Over the past few years, Chinese automaker giant BYD has been on a partnership spree with cities across China to electrify their public transportation systems, and now it’s extending its footprint across the globe. On Thursday, BYD announced that it has shipped 100 electric buses to Santiago, the capital city of Chile.

The step marks the Chinese firm’s further inroads into the Latin American country where a green car revolution is underway to battle smog. BYD’s first batch of vehicles arrived in Santiago last November and the Warren Buffett-backed carmaker remains as the only electric public bus provider in the country.

Chile is on the map of China’s grand Belt and Road Initiative aiming to turbocharge the world’s less developed regions with infrastructure development and investments. “With the help of ‘One Belt One Road,’ BYD has successfully entered Chile, Colombia, Ecuador, Brazil, Uraguay and other Latin American countries. As the region accelerates its electric revolution, BYD may be able to win more opportunities,” said BYD in a statement.

byd chile 1

President of Chile Mr. Sebastián Piñera rides the BYD electric bus. / Credit: BYD

The 100 buses embarked on a 45-day sea voyage from BYD’s factory in eastern China to land on the roads of Santiago. They sport the Chilean national colors of red and white on the exterior and provide USB charging ports inside to serve a generation who live on their electronic devices.

The fleet arrived through a partnership between BYD and Enel, a European utility juggernaut that claims to make up 40 percent of Chile’s energy sales in 2017. Enel has purchased the fleet from BYD and leased them to local transportation operator Metbus while the Chilean government set the rules and standards for the buses, a BYD spokesperson told TechCrunch.

Local passengers graded BYD’s electric vehicles at 6.3 out of 7, well above the 4.6 average of the Santiago public transportation system, according to a survey jointly produced by Chile’s Ministry of Energy as well as Ministry of Transport and Telecommunications. Respondents cited qualities such as low noise level, air conditioning and USB charging that the buses deliver.

Santiago currently has 7,000 public buses running on the road, among which 400 get replaced every year. A lot of the new ones will be diesel-free as the Chilean government said it aims to increase the total number of electric vehicles by tenfold in 2022.

Edtech unicorn Udacity lays off 125 people in global strategy shift

Learning platform Udacity is to axe a big chunk of its workforce — which looks to be between a fifth and a quarter — as part of a global reorganization effort, according to VentureBeat.

It reports the company is cutting 125 staff from now through early 2019.

We’ve also heard from a source that around 100 Udacity staff have been laid off, with affected employees mostly in content, video and services.

We’ve reached out to the company for comment.

According to VentureBeat’s report the firm will close its office in São Paulo, Brazil, with the loss of 70 employees. The remaining cuts will come from departments in the US related to creating courses, it adds.

Two months ago we broke the news the company had quietly let go of 5% of its global workforce.

VentureBeat says now the layoffs will leave Udacity with 330 employees.

The edtech firm was one of the early providers of MOOCs, before low pass rates seemingly triggered a reprogramming of its business model, with Udacity refocusing on the tech space — offering so-called ‘nanodegrees’ in topics like AI and blockchain.

After that shift co-founder Sebastian Thrun stepped away as CEO, handing over to Vishal Makhijani. However the latest cuts come hard on the heels of a reversal of that, with VentureBeat noting Thrun took over day-to-day operations and the exec chairman role last month, following the departure of Makhijani.

Since then the board of directors and Thrun have voted to downsize portions of the company, it adds.

In another notable reversal this year, Udacity suspended a money back guarantee for people who completed a Plus tier nanocourse and couldn’t find a job, pressing pause just a few months after it announced the guarantee.

Thrun told VentureBeat the guarantee remains on pause — with no decision yet taken whether to cancel it outright.

TechCrunch’s Kirsten Korosec contributed to this report

Lies, damn lies, and HQ2

There are few things certain in our world except for the uplifting tendencies of technology. I’ve spent the past few years trying to prove this to myself, at least, by interviewing hundreds of thinkers on the topic. I’ve come to a singular conclusion: when tech moves into a city, be it an iOS dev shop or a robotic facility for making widgets, things change primarily for the better. Given the recent rush to gain 25,000 or so jobs from Amazon’s HQ2 and the subsequent grumbling by cities passed over, it is difficult to refute this, but I’d like explore it.

Many cities have gained from tech, both historically and recently. Pittsburgh, for example, had a plan to become a tech city back in the early 1990s after seeing the value coming out of Carnegie Mellon and the other universities in town. Anecdotally, Pittsburgh remained a fairly depressed steel town until at least 2000. I recall walking on CMU’s campus one weekend, long after my graduation in 1997, and marveling at how the small school had blossomed thanks to an influx of tech money. Next to halls named after dead and gone thinkers and makers was the Gates building, built with the largesse of the biggest tech maker in recent history. Then Uber moved in and all hell broke loose. In 19997 the Lawrenceville neighborhood was a rundown riverfront redoubt full of brown fields and finely-made hovels. Then Uber landed there. Now it’s become the hub for multiple research and tech companies and the neighborhood has blossomed, even rating it’s own corporation and team of boosters who invite you to dine in a spot once associated with dive bars and non-ironic pierogi. A few weeks ago I enjoyed Nashville hot chicken and Manhattans in what was once a funeral home for steel workers.

In short, having tech brings about what Richard Florida called the “creative class.” This group of makers, be they chefs, artists, coders, or engineers, all come to a place and almost inevitably improve it. In some cases this creative class is disparate, spreading throughout a city like a symbiotic fungus. In other places they are centered in a single neighborhood, working their magic from the core out. I’ve seen this in many places but none more clearly than in Toledo, Ohio or Flint, Michigan where a small core of artists are working mightily to turn a city in ruin into a place to live.

And I understand that all is not rosy in the world urban growth. Uber drivers in creative-classed cities are usually people displaced from their cheap rents by rich hipsters. As a friend noted, when you gentrify a place where to those who cannot afford artisanal kombucha, let alone the rent, go? They are either thrust into the suburbs – an irony that should give cities like Grosse-Point-ringed Detroit pause – or they vanish from view even though they exist in plain sight. Nowhere is this clearer then in the refuse-strewn streets of San Francisco.

Yet cities with deep, systemic problems still debase themselves to get tech jobs. They offer tax abatements, $1 land leases, and produce cloying videos to prove that they, alone, are the hardest working of the bunch. The first and most galling effort appeared when Foxconn, a massive manufacturing company, promised to land like an alien invasion force in rural Wisconsin. The idea there was simple: Foxconn wanted tax cuts in exchange for “creating” “jobs” – scare quotes in both cases necessary. As it had in Brazil before, Foxconn promised more than it could ever deliver. From a previous report:

Foxconn has created only a small fraction of the 100,000 jobs that the government projected, and most of the work is in low-skill assembly. There is little sign that it has catalyzed Brazil’s technology sector or created much of a local supply chain.

Manufacturing jobs are not tech jobs. In the end these true manufacturing jobs will end up going to countries with historically cheap labor pools and Foxconn will use its tax breaks to build a facilities in the US to help it abate future cross-border taxes. The jobs that it will create will be done by robots and only the smartest in these rural counties will get jobs… watching robot arms lift flatscreens off of an assembly line for years. Gone are the days of ubiquitous middle class manufacturing jobs and they will never come back. The sooner the heartland accepts this the better.

So cities turn to true tech. Cities know that tech helps and they bow to its captains of industry. But why won’t tech help cities?

Tech companies reduce inefficiencies. Self-driving car companies are aimed at reducing the number of inefficient truckers on the road. Drone companies are aimed at reducing the number of inefficient postal carriers on the sidewalk. And always-on audio assistants and smart devices are there to reduce our dependence on nearly every facet of a local ecosystem including the local weatherperson, the chef with an empty restaurant but hundreds of Seamless orders, and the local cinema. They know that when they land in a place they take over, much like Wal-Mart did in its early heyday. The benefits of this takeover are myriad but the erosion of culture they bring is catastrophic. Yet mayors still don silly hats and dance a merry jig to get them to move to their blighted areas. After all, it’s far easier than actually doing something.

The answer for cities, then, is to build from within. Pittsburgh didn’t get Uber because it prayed for that rude beast to stalk its shores. It got Uber because it built one of the best robotics programs in the country. Denver and Boulder aren’t tech hubs because they gave anyone a massive abatement. They became tech hubs because they became places that techies wanted to congregate and they built networks of technologists who left their cubicles on a weekly basis and met for lunch. That’s right: in many cases, all it takes for a tech scene to thrive is for the CTOs of all the major organizations to meet over curry. The network effects created by this are manifold. In fact, some of the biggest complaints I heard in many cities was that the CTOs of corporations who called those cities home – Chase Bank, GrubHub, etc. – rarely stepped out of their carefully manicured cubicle farms. An ecosystem cannot thrive if its most successful hide. Just ask Detroit.

Cities must subsidize creative districts, not creative destruction. Cities must woo technologists with a network of rich angels, not bribery. Cities must prepare for a future that doesn’t yet exist and hope that some behemoth will find a home there. Otherwise they’re sunk.

This sort of forward thinking is done in dribs and drabs across the country. Every city has its accelerators full of potential failure. These companies quickly discover that without seed capital, St. Louis or Chicago might as well be the Death Valley. Detroit has worked hard to create a startup culture and it seems to be working but in many cases these startups are folded, Borg-like into Quicken Loans and cannot stand on their own. The south is stuck in energy production and invests little in things that would draw technologists to the beautiful cities along the coast.

Maybe this is because startups make no money. Maybe this is because innovation is expensive. And maybe the lack of long-term strategy exists because mayoral staffs turn over so quickly in these convoluted times. These are valid excuses but woe betide the city that clings to them.

New York and Virginia got HQ2 because their cultures are mercenary at worst and transient at best. They already knew the hard bargain of technology versus culture and were willing to make the deal. The tens of thousands of folks who will walk through Amazon’s doors on the first day will change Long Island City for the better and no other city will claim those benefits (and detriments.) Tech is a business. It doesn’t care where it lands as long as there are enough college-educated behinds to sit on blue inflatable desk balls and enough mouths to drink free nitro coffee. It bypasses places that are seemingly entrenched in political infighting and failed innovation and it will continue to do so until cities do for themselves what Amazon will never do: future-proof their place in the world and create a place for generations to grow and change.

 

Photo by Michael Browning on Unsplash

Monashees raises $150 million for its eighth Brazilian fund

As technology investment and exits continue to rise across Brazil, early stage venture capital firm monashees today announced that it has closed on $150 million for its eighth investment fund.

Commitments came from Temasek, the sovereign wealth fund affiliated with the Singaporean government, China’s financial technology company, CreditEase; Instagram co-founder Mike Krieger, the University of Minnesota endowment; and fund-of-funds investor Horsley Bridge Partners.

S-Cubed Capital, the family office of former Sequoia Capital partner, Mark Stevens, and fifteen high net worth Brazilian families and investment groups also invested in the firm’s latest fund.

As one of the largest venture capital firms in Latin America with over $430 million in capital under management, monashees has been involved in some of the most successful investments to come from the region. Altogether, monashees portfolio companies have gone on to raise roughly $2 billion from global investors after raising money from the Sao Paulo-based venture capital firm.

“We are excited to further advance our partnership with the monashees team,” said Du Chai, Managing Director at Horsley Bridge Partners . “Over the course of our partnership, we have continued to be impressed by monashees’ strong team, platform and their ability to attract the region’s leading entrepreneurs.”

In the past year, investment in Latin American startup companies has exploded.  The ride-hailing service 99 was acquired for $1 billion and Rappi, a delivery service, managed to raise $200 million at a $1 billion valuation. Another delivery service, Loggi, caught the attention of SoftBank, which invested $100 million into the Brazilian company.

Public markets are also rewarding Latin American startups with continued investment and high valuations. Stone Pagamentos, a provider of payment hardware technology, raised $1.1 billion in its public offering on the Nasdaq with an initial market capitalization of $6.6 billion.

“monashees brings a truly unique set of skills to the table, with a disciplined investment strategy, as well as the unmatched local expertise and knowledge that leads the team to identify and invest in the region’s best founders,” said Stuart Mason, Chief Investment Officer at the University of Minnesota . “The recent billion-dollar acquisition of 99 by DiDi is not only a milestone for the local ecosystem, but validation of this sentiment and suggests that there’s no liquidity hurdle for great companies in Latin America. We are excited to partner with monashees as it continues to find and nurture the best opportunities going forward.”

 

Airobotics raises another $30 million for its automated drone technologies

Airobotics, the developer of automated drones that can fly without a pilot, has raised $30 million in a new round of financing.

The new funding will be used to boost the company’s manufacturing efforts to meet new demand and help with the development of the company’s global headquarters in Arizona as it looks to capitalize on interest from mining companies in North and South America.

“Streamlining manufacturing to achieve growth and scale is what this funding is to be used for,” according to the company’s chief executive officer and co-founder Ran Krauss.

As the company looks to increase manufacturing, it will likely confine its efforts to the U.S., given the constraints that the Airobotics has on its potential vendors and supply chain thanks to its involvement in the defense industry.

Krauss would not comment on whether the company is doing any work with the U.S. Department of Homeland Security or the much-maligned Immigrations and Customs Enforcement and U.S. Customs and Border Patrol, but ICE has expressed interest in acquiring drone technologies and the company has been pushing hard into the homeland security market (indeed it was a centerpiece of the company’s last $32.5 million round in 2017).

“We are deepening our work in the mining industry in Australia and in the U.S. [and] the next step is to be active in smart cities,” said Krauss.

The company’s mining operations span the globe with deployments through the mining giant BHP in Arizona, South 32 in Australia, Vale in Brazil and additional work in Chile.

“We are looking very seriously into the United States because of our scale. Mining is a significant market in the U.S. and also… flights in cities which is something we’re looking to in two years,” said Krauss.

Airobotics is also making money from contracts doing security and facilities management for companies like Intel, where it is already deployed in one of the company’s large semiconductor fabrication facilities.

The company was the first company in the world to be granted authorization to fly fully automated drones without a pilot, as licensed by the Civil Aviation Authority of Israel (CAAI).

“We have a strong business pipeline and to keep up with demand for our technology, we are continuing to expand operations across the countries in which we operate, specifically our new headquarters in the U.S,” said Krauss in a statement. “Additionally, the new funding will drive our continuous work with Aviation Authorities to obtain BVLOS (Beyond Visual Line of Sight) Certificate of Waiver in every geography we operate in, including in the U.S.”

The new financing was led by Pavilion Capital, a Sino-U.S. investment firm based in New York. Previous investors including Blue Run Ventures China, Charles River Ventures and OurCrowd, as well as additional private investors, also participated in the funding.