This ride-hailing PR pitch shows platforms and digital campaign ‘dark arts’ want democracy to be pay to play

A UK PR firm pitching to run an account for Ola has proposed running a campaign to politicize ride-hailing as a tactic to shift regulations in its favor.

The approach suggests that, despite the appearance of ride-hailing platforms taking a more conciliatory position with regulators that are now wise to earlier startup tactics in this space, there remains a calculus involving realpolitik, propaganda and high-level lobbying between companies that want to enter or expand in markets, and those who hold the golden tickets to do so.

In 2017 Estonia-based ride-hailing startup Taxify tried to launch in London ahead of regulatory approval, for example, but city authorities clamped down straight away. It was only able to return to the UK capital 21 months later (now known as Bolt).

In Western markets ride-hailing companies are facing old and new regulatory roadblocks that are driving up costs and creating barriers to growth. In some instances unfavorable rule changes have even led companies to pull out of cities or regions all together. Even as there are ongoing questions around the employment classification of the drivers these platforms depend on to deliver a service.

The PR pitch, made by a Tufton Street-based PR firm called Public First, suggests Ola tackle legislative friction in UK regions with a policy influence campaign targeted at local voters.

The SoftBank-backed Indian ride-hailing startup launched in the U.K. in August, 2018 and currently offers services in a handful of regional locations including South Wales, Merseyside and the West Midlands. Most recently it gained a licence to operate in London, and last month launched services in Coventry and Warwick — saying then that passengers in the UK had clocked up more than one million trips since its launch.

Manchester is also on its target list — and features as a focus in the strategy proposal — though an Ola spokesman told us it has no launch date for the city yet. The company met with Manchester’s mayor, Andy Burnham, during a trade mission to India last month.

The Public First proposal suggests a range of strategies for Ola to get local authorities and local politicians on-side, and thus avoid problems in potential and future operations, including the use of engagement campaigns and digital targeting to mobilize select coalitions around politicized, self-serving talking points — such as claims that public transport is less safe and convenient; or that air quality improves if fewer people drive into the city — in order to generate pressure on regulators to change licensing rules.

Another suggestion is to position the company less as a business, and more as an organization representing tens of thousands of time-poor people.

Public First advocates generally for the use of data- and technology-driven campaign methods, such as microtargeted digital advertising, as more effective than direct lobbying of local government officials — suggesting using digital tools to generate a perception that an issue is politicized will encourage elected representatives to do the heavy lifting of pressuring regulators because they’ll be concerned about losing votes.

The firm describes digital campaign elements as “crucial” to this strategy.

“Through a small, targeted online digital advertising campaign in both cities, local councillors’ email inboxes would begin to fill with requests from a number of different people (students, businesses, and other members of [a commuter advocacy group it proposes setting up to act as a lobby vehicle]) for the local authority to change its approach on local taxi licensing — in effect, to make it easier for Ola to launch,” it offers as a proposed strategy for building momentum behind Ola in Manchester and Liverpool.

Public First confirmed it made the pitch to Ola but told us: “This was merely a routine, speculative proposal of the sort we generate all the time as we meet people.”

“Ola Cabs has no relationship whatsoever with Public First,” it added.

A spokesperson for Ola also confirmed that it does not have a business relationship with Public First. “Ola has never had a relationship with Public First, does not currently have one and nor will it in the future,” the spokesman told us.

“Ola’s approach in the UK has been defined by working closely and collaborating with local authorities and we are committed to being fully licensed in every area we operate,” he added, suggesting the strategy it’s applying is the opposite of what’s being proposed.

We understand that prior to Public First pitching their ideas to a person working in Ola’s comms division, Ola’s director of legal, compliance and regulation, Andrew Winterton, met with the firm over coffee — in an introductory capacity. But that no such tactics were discussed.

It appears that, following first contact, Public First took the initiative to draw up the strategy suggesting politicizing ride-hailing in key target regions which it emailed to Winterton but only presented to a more junior Ola employee in a follow-up meeting the legal director did not attend.

Ola has built a major ride-hailing business in its home market of India — by way of $3.8BN in funding and aggressive competition. Since 2018 it has been taking international steps to fuel additional growth. In the U.K. its approach to date has been fairly low key, going to cities and regional centers outside of high-profile London first, as well as aiming to serve areas with big Indian populations to help recruit riders and drivers.

It’s a strategy that’s likely been informed by being able to view the track record of existing ride-hailing players — and avoid Uber-style regulatory blunders.

The tech giant was dealt a major shock by London’s transport regulator in 2017, when TfL denied it a licence renewal — citing concerns over Uber’s approach to passenger safety and corporate governance, including querying its explanation for using proprietary software that could be used to evade regulatory oversight.

The Uber story looks to be the high water mark for blitzscaling startup tactics that relied on ignoring or brute forcing regulators in the ride-hailing category. Laws and local authorities have largely caught up. The name of the game now is finding ways to get regulators on side.

Propaganda as a service

The fact that strategic proposals such as Public First’s to Ola are considered routine enough to put into a speculative pitch is interesting, given how the lack of transparency around the use of online tools for spreading propaganda is an issue that’s now troubling elected representatives in parliaments all over the world. Tools such as those offered by Facebook’s ad platform.

In Facebook’s case the company provides only limited visibility into who is running political and issue-based ads on its platform. The targeting criteria being used to reach individuals is also not comprehensively disclosed.

Some of the company’s own employees recently went public with concerns that its advanced targeting and behavioral-tracking tools make it “hard for people in the electorate to participate in the public scrutiny that we’re saying comes along with political speech”, as they put it.

At the same time, platforms providing a conduit for corporate interests to cheaply and easily manufacture ‘politicized’ speech looks to be another under-scrutinized risk for democratic societies.

Among the services Public First lists on its website are “policy development”, “qualitative and quantitative opinion research”, “issues-based campaigns”, “coalition-building” and “war gaming”. (Here, for example, is a piece of work the firm carried out for Google — where its analysis-for-hire results in a puffy claim that the tech giant’s digital services are worth at least $70BN in annual “economic value” for the UK.)

Public First’s choice of office location, in Tufton Street, London, is also notable as the area is home to an interlinked hub of right-leaning think tanks, such as the free market Center for Policy Studies and pro-Brexit Initiative for Free Trade. These are lobby vehicles dressed up as policy wonks which put out narratives intended to influence public opinion and legislation in a particular direction without it being clear who their financial backers are.

Some of the publicity strategies involved in this kind of work appear to share similarities with tactics used by Big Tobacco to lobby against anti-smoking legislation, or fossil fuel interests’ funding of disinformation and astroturfing operations to create a perception of doubt around consensus climate science.

“A lot of what used to get sold in this space essentially was access [to policymakers],” says one former public relations professional, speaking on background. “What you’re seeing an increasingly amount of now is the ‘technification’ of that process. Everyone’s using those kinds of tools — clearly in terms of trying to understand public sentiment better and that kind of thing… But essentially what they’re saying is we can set up a set of politicized issues so that they can benefit you. And that’s an interesting change. It’s not just straight defence and attack; promote your brand vs another. It’s ‘okay, we’re going to change the politics around an issue… in order to benefit your outcome’. And that’s fairly sophisticated and interesting.”

Mat Hope, editor of investigative journalism outlet DeSmog — which reports on climate-related misinformation campaigns — has done a lot of work focused on Tufton Street specifically, looking at the impact the network’s ‘policy-costumed’ corporate talking points have had on UK democracy.

“There is a set of organisations based out of offices in and around 55 Tufton Street in Westminster, just around the corner from the Houses of Parliament, which in recent years have had an outsized impact on British democracy. Many of the groups were at the forefront of the Leave campaign, and are now pushing for a hard or no-deal Brexit,” he told us, noting that Public First not only has offices nearby but that its founders and employees “have strong ties to other organisations based there”.

“The groups regularly lobby politicians in the interests of specific companies or big industry through the guise of grassroots or for-the-people campaigns,” he added. “One way they do this is through targeting adverts or social media posts, using groups with benign sounding names. This makes it hard to trace the campaign back to any particular company, and gives the issue an impression of grassroots support that is, on the whole, artificial.”

Platform power without responsibility

Ad platforms such as Facebook which profit by profiling people offer cheap yet powerful tools for corporate interests to identify and target highly specific sub-sets of voters. This is possible thanks to the vast amounts of personal data they collect — an activity that’s finally coming under significant regulatory scrutiny — and custom ad tools such as lookalike audiences, all of which enables behavioral microtargeting at the individual user/voter level.

Lookalike audiences is a powerful ad product that allows Facebook advertisers to upload customer data yet also leverage the company’s pervasive people-profiling to access new audiences that they do not hold data on but who have similar characteristics to their target. These so-called lookalike audiences can be tightly geotargeted, as well as zeroed in on granular interests and demographics. It’s not hard to see how such tools can be applied to selectively hit up only the voters most likely to align with a business’ interests.

The upshot is that an online advertiser is able to pay little to tap into the population-scale reach and vast data wealth of platform giants — turning firehose power against individual voters who they deem — via focus group work or other voter data analysis — to be aligned with a corporate agenda. The platform becomes a propaganda machine for manufacturing the appearance of broad public engagement and grassroots advocacy for a self-interested policy change.

The target voter, meanwhile, is most likely none the wiser about why they’re seeing politicized messaging. It’s that lack of transparency that makes the activity inherently anti-democratic.

The UK’s Digital, Culture, Media and Sport committee raised Facebook’s lookalike audiences as a risk to democracy during a recent enquiry into online disinformation and digital campaigning. It went on to recommend an outright ban on political microtargeting to lookalike audiences online. Though the UK government has so far failed to act on that or its fuller suite of recommendations. (Nor has Facebook responded to increasingly loud calls from politicians and civic society to ban political and issue ads altogether.)

Even a code of conduct published by the International Public Relations Association (IPRA) emphasizes transparency — with member organizations committing to “be open and transparent in declaring their name, organisation and the interest they represent”. (Albeit, the IPRA’s member list is not itself public.)

While online targeting of social media users remains a major problem for democracies, on account of the lack of transparency and individual consent to targeting (or, indeed, to data-based profiling), in recent years we’ve also seen more direct efforts by companies to use their own technology tools to generate voter pressure.

Examples such as ride-hailing giant Uber which, under its founding CEO, Travis Kalanick, became well known for a ‘push button’ approach to mobilizing its user base by sending calls to action to lobby against unfavorable regulatory changes.

Airbnb has also sought to use its platform-reach to beat against local authority rule changes that threaten its ‘home sharing’ business model.

However it’s the opaque tech-fuelled targeting enabled by ad platforms like Facebook that’s far more problematic for democracies as it allows vested interests to generate self-interested pressure remotely — including from abroad — while remaining entirely shielded from view.

Fixing this will require regulatory muscle to enforce existing laws around personal data collection (at least where such laws exist) — and doing so in a way that prevents microtargeting from being the cheap advertising default. Democracies should not allow their citizens to be mirrored in the data because it sets them up to be hollowed out; their individuals aggregated, classified and repackaged as all-you-can-eat attention units for whoever is paying.

And likely also legislation to set firm boundaries around the use of political and campaigning/issue ads online. Turning platform power against the individual is inherently asymmetrical. It’s never going to be a fair fight. So fair ground rules for digital political campaigning — and a proper oversight regime to enforce them — are absolutely essential.

Another democratic tonic is transparency. Which means raising awareness about tech-fuelled tactics that are designed to generate and exploit data-based asymmetries in order to hack and manipulate public opinion. Such skewed stuff only really works when the target is oblivious to what’s afoot. In that respect, every little disclosure of these ‘dark arts’ and the platforms that enable them provides a much-needed counter boost for critical thinking and democracy.

Backed by Serena Williams and Usain Bolt, Let’s Do This raises $15M from EQT

Back in September, endurance events marketplace Let’s Do This (a YC alumni) raised a $5m seed round from a number of US investors, including Olypmic star Usain Bolt and tennis star Serena Williams. As much as I’d like to get excited, this is slightly par for the course for a lot of sports-oriented startups which catch the eye of a celebrity. Not that they are without merit, of course.

Suffice it to say, their sports stars, plus a strong push to get funding from Silicon Valley has landed the startup with a $15m Series A round led by European/US VC EQT, with participation of the previous investors including Trulia founder Pete Flint, YCombinator, alongside, yes, you guessed it, Usain Bolt and Serena Williams .

The platform lists 30,000 races of all distances and disciplines and claims to be the largest marketplace for endurance events in the world, offering key information about the races and exclusive booking perks for members such as free cancellation protection. It recently agreed a partnership with Hearst to power all race listings across Runner’s World, Men’s Health and Women’s Health in the US and the UK.

The startup is set to expand its team of sport enthusiasts across its San Francisco and London offices. The company was founded by University of Cambridge graduates Alex Rose and Sam Browne – both passionate runners and cyclists who had experienced the arduous process of discovering and entering events firsthand.

The Let’s Do This algorithm uses data points from fitness tracking, race history, social connections and more, to personalize race recommendations. Part of the marketing story is that people are 12.5 times more likely to develop a fitness habit after 12 months from signing up to a race than from joining a gym.

Serena Williams, the 22 time Grand Slam Champion, commented: “I’ve seen first-hand the incredible impact these events can have on making people fitter, healthier and happier. I love that Let’s Do This is not only making events like these more accessible but also helping to support athletes of all different fitness levels. Women are especially less likely to participate in marathons and obstacle races, so it’s really important there’s a platform encouraging people to step out of their comfort zones and make a positive difference in their lives.”

Usain Bolt said in a statement: “Throughout my career I’ve been lucky enough to inspire people to follow their dreams, get off the couch and get exercising… It’s a really natural fit with what I care about and what I believe in, so I am very happy to be supporting their mission to inspire more people to have epic experiences.”

Founder Sam Browne says the quick fundraising has come about in part because “The market’s big, affluent and we’re already the dominant marketplace in it.”

Eigen nabs $37M to help banks and others parse huge documents using natural language and ‘small data’

One of the bigger trends in enterprise software has been the emergence of startups building tools to make the benefits of artificial intelligence technology more accessible to non-tech companies. Today, one that has built a platform to apply power of machine learning and natural language processing to massive documents of unstructured data has closed a round of funding as it finds strong demand for its approach.

Eigen Technologies, a London-based startup whose machine learning engine helps banks and other businesses that need to extract information and insights from large and complex documents like contracts, is today announcing that it has raised $37 million in funding, a Series B that values the company at around $150 million – $180 million.

The round was led by Lakestar and Dawn Capital, with Temasek and Goldman Sachs Growth Equity (which co-led its Series A) also participating. Eigen has now raised $55 million in total.

Eigen today is working primarily in the financial sector — its offices are smack in the middle of The City, London’s financial center — but the plan is to use the funding to continue expanding the scope of the platform to cover other verticals such as insurance and healthcare, two other big areas that deal in large, wordy documentation that is often inconsistent in how its presented, full of essential fine print, and is typically a strain on an organisation’s resources to be handled correctly, and is often a disaster if it is not.

The focus up to now on banks and other financial businesses has had a lot of traction. It says its customer base now includes 25% of the world’s G-SIB institutions (that is, the world’s biggest banks), along with others who work closely with them like Allen & Overy and Deloitte. Since June 2018 (when it closed its Series A round), Eigen has seen recurring revenues grow sixfold with headcount — mostly data scientists and engineers — double. While Eigen doesn’t disclose specific financials, you can the growth direction that contributed to the company’s valuation.

The basic idea behind Eigen is that it focuses what co-founder and CEO Lewis Liu describes as “small data”. The company has devised a way to “teach” an AI to read a specific kind of document — say, a loan contract — by looking at a couple of examples and training on these. The whole process is relatively easy to do for a non-technical person: you figure out what you want to look for and analyse, find the examples using basic search in two or three documents, and create the template which can then be used across hundreds or thousands of the same kind of documents (in this case, a loan contract).

Eigen’s work is notable for two reasons. First, typically machine learning and training and AI requires hundreds, thousands, tens of thousands of examples to “teach” a system before it can make decisions that you hope will mimic those of a human. Eigen requires a couple of examples (hence the “small data” approach).

Second, an industry like finance has many pieces of sensitive data (either because its personal data, or because it’s proprietary to a company and its business), and so there is an ongoing issue of working with AI companies that want to “anonymise” and ingest that data. Companies simply don’t want to do that. Eigen’s system essentially only works on what a company provides, and that stays with the company.

Eigen was founded in 2014 by Dr. Lewis Z. Liu (CEO) and Jonathan Feuer (a managing partner at CVC Capital technologies who is the company’s chairman), but its earliest origins go back 15 years earlier, when Liu — a first-generation immigrant who grew up in the US — was working as a “data entry monkey” (his words) at a tire manufacturing plant in New Jersey, where he lived, ahead of starting university at Harvard.

A natural computing whizz who found himself building his own games when his parents refused to buy him a games console, he figured out that the many pages of printouts that he was reading and re-entering into a different computing system could be sped up with a computer program linking up the two. “I put myself out of a job,” he joked.

His educational life epitomises the kind of lateral thinking that often produces the most interesting ideas. Liu went on to Harvard to study not computer science, but physics and art. Doing a double major required working on a thesis that merged the two disciplines together, and Liu built “electrodynamic equations that composed graphical structures on the fly” — basically generating art using algorithms — which he then turned into a “Turing test” to see if people could detect pixelated actual work with that of his program. Distil this, and Liu was still thinking about patterns in analog material that could be re-created using math.

Then came years at McKinsey in London (how he arrived on these shores) during the financial crisis where the results of people either intentionally or mistakenly overlooking crucial text-based data produced stark and catastrophic results. “I would say the problem that we eventually started to solve for at Eigen became for tangible,” Liu said.

Then came a physics PhD at Oxford where Liu worked on X-ray lasers that could be used to bring down the complexity and cost of making microchips, cancer treatments and other applications.

While Eigen doesn’t actually use lasers, some of the mathematical equations that Liu came up with for these have also become a part of Eigen’s approach.

“The whole idea [for my PhD] was, ‘how do we make this cheeper and more scalable?'” he said. “We built a new class of X-ray laser apparatus, and we realised the same equations could be used in pattern matching algorithms, specifically around sequential patterns. And out of that, and my existing corporate relationships, that’s how Eigen started.”

Five years on, Eigen has added a lot more into the platform beyond what came from Liu’s original ideas. There are more data scientists and engineers building the engine around the basic idea, and customising it to work with more sectors beyond finance. 

There are a number of AI companies building tools for non-technical business end-users, and one of the areas that comes close to what Eigen is doing is robotic process automation, or RPA. Liu notes that while this is an important area, it’s more about reading forms more readily and providing insights to those. The focus of Eigen in more on unstructured data, and the ability to parse it quickly and securely using just a few samples.

Liu points to companies like IBM (with Watson) as general competitors, while startups like Luminance is another taking a similar approach to Eigen by addressing the issue of parsing unstructured data in a specific sector (in its case, currently, the legal profession).

Stephen Nundy, a partner and the CTO of Lakestar, said that he first came into contact with Eigen when he was at Goldman Sachs, where he was a managing director overseeing technology, and the bank engaged it for work.

“To see what these guys can deliver, it’s to be applauded,” he said. “They’re just picking out names and addresses. We’re talking deep, semantic understanding. Other vendors are trying to be everything to everybody, but Eigen has found market fit in financial services use cases, and it stands up against the competition. You can see when a winner is breaking away from the pack and it’s a great signal for the future.”

Yodel.io is a digital receptionist for SMBs taking calls

Yodel.io, an Austria-founded startup that’s developed a “digital receptionist” to help SMBs and other small teams handle in and outbound phone-calls, has picked up $1 million in “pre-seed” funding. It brings total funding to just over $1.8 million.

Backing this round is EXF Alpha, the fund of the European Super Angels Club, and various other unnamed European angel investors. This investment will be used to establish a New York office, in addition to the startup’s existing presence in Vienna, London and San Francisco.

In development since 2016 and a Seedcamp alumni, Yodel’s tech acts as a digital phone receptionist that plugs into popular team chat applications such as Slack, Zapier, and Drift to help SMBs handle calls more efficiently. The idea is to provide these small and medium-sized businesses with call-handling technology more akin to that typically available to larger enterprises but at a price they can afford.

It is similar thinking to Google’s recently launched CallJoy, although Yodel argues its product is better and says it is already used by over 2,000 SMBs in 30 languages across 47 countries.

Yodel and CallJoy both offer the ability to transcribe calls, manage inbounds through “human-like” answering, log calls, tag calls and record calls.

However, in addition, Yodel says its tech also allows for customisable canned responses, and that its AI is able to ask for a reason for the call and then process calls accordingly. Other features include call conferencing, and the ability to send and receive SMS messages.

“SMBs are stuck with old school phone systems that lack flexibility,” explain two of Yodel’s co-founders, Nina Hödlmayr and Mike Heininger, in an email. “At the same time, customers of SMBs don’t receive the support they expect via the phone, they want the processes and systems of the multinationals, without considering the backend costs.

The pair argue that by using Yodel, less well-resourced companies can offer voice calls for customers, which they argue is still the most direct channel. “This is an effective way of increasing sales and having fewer unsatisfied customers,” they tell TechCrunch.

Yodel.io Slack integration: waiting inbound call

“The caller receives a better experience by being greeted from a digital voice assistant and getting forwarded to the right team member. The company views all information in one place without needing to switch tools. This is also a main benefit for distributed and modern teams. Each bit of information is shared and can be collaborated on which improves decisions and overall internal knowledge”.

Operating a typical SaaS model, Yodel charges per “seat” per month. This includes a phone number per user, unlimited inbound minutes and call credit for outbound calls. There are additional fees for more outbound minutes and additional phone numbers. Depending on features the subscription is with $25 per month or $35 per month.

Johannes Reck from GetYourGuide to talk about reaching unicorn status at Disrupt Berlin

Earlier this year, GetYourGuide raised a gigantic $484 million funding round with SoftBank’s Vision Fund leading the round. Now that the German startup has reached a valuation well over the $1 billion mark, it’s time to look back at the company’s impressive trajectory. That’s why I’m excited to announce that GetYourGuide co-founder and CEO Johannes Reck is joining us at TechCrunch Disrupt Berlin.

At first, people started booking flights and train tickets on online platforms. Then, they started booking hotel rooms and Airbnb apartments. But going somewhere is just step one. You also need to figure out what you’re going to do when you arrive in a city you don’t know.

GetYourGuide lets you book experiences, from sightseeing tours to tickets for attractions and others. Behind the scene, the company operates a marketplace that matches third parties with travelers.

But the startup now wants to go one step further and build a catalog of “Originals” tour experiences, such as a ‘GetYourGuide Instagram Tour of Bali’, which is probably a lot more appealing to young travelers compared to traditional travel agencies.

GetYourGuide’s metrics are mindboggling. Back in May, the company offered 50,000 experiences and had sold 25 million tickets in total. And I’m sure those numbers are even higher today.

The startup has a shot at becoming a cultural phenomenon and influence the way we travel — just like Airbnb did with its peer-to-peer rental platform. And I can’t wait to hear Johannes Reck tell us how to grow such a big marketplace with everyone’s best interests in mind.

Buy your ticket to Disrupt Berlin to listen to this discussion — and many others. The conference will take place December 11-12.

In addition to panels and fireside chats, like this one, new startups will participate in the Startup Battlefield to compete for the highly coveted Battlefield Cup.


Johannes Reck is the Chief Executive Officer at GetYourGuide. He leads the company’s long-term vision and strategy.

Johannes co-founded GetYourGuide in 2009 while attending the Swiss Federal Institute of Technology, and has grown the company into the leading booking platform for incredible travel experiences.

Under Johannes’ leadership, over 30 million tickets have been booked to date via the GetYourGuide website, mobile app, and partnership network. GetYourGuide has raised over $650M from investors such as the SoftBank Vision Fund, Battery Ventures and KKR. Johannes leads GetYourGuide’s 550-person global team from its headquarters in Berlin, Germany.

Johannes originally hails from Cologne, Germany and holds an M.Sc. in Biochemistry from the Swiss Federal Institute of Technology.

Messaging app Wire confirms $8.2M raise, responds to privacy concerns after moving holding company to the US

Big changes are afoot for Wire, an enterprise-focused end-to-end encrypted messaging app and service that advertises itself as “the most secure collaboration platform”. In February, Wire quietly raised $8.2 million from Morpheus Ventures and others, we’ve confirmed — the first funding amount it has ever disclosed — and alongside that external financing, it moved its holding company in the same month to the US from Luxembourg, a switch that Wire’s CEO Morten Brogger described in an interview as “simple and pragmatic.”

He also said that Wire is planning to introduce a freemium tier to its existing consumer service — which itself has half a million users — while working on a larger round of funding to fuel more growth of its enterprise business — a key reason for moving to the US, he added: There is more money to be raised there.

“We knew we needed this funding and additional to support continued growth. We made the decision that at some point in time it will be easier to get funding in North America, where there’s six times the amount of venture capital,” he said.

While Wire has moved its holding company to the US, it is keeping the rest of its operations as is. Customers are licensed and serviced from Wire Switzerland; the software development team is in Berlin, Germany; and hosting remains in Europe.

The news of Wire’s US move and the basics of its February funding — sans value, date or backers — came out this week via a blog post that raises questions about whether a company that trades on the idea of data privacy should itself be more transparent about its activities.

Specifically, the changes to Wire’s financing and legal structure were only communicated to users when news started to leak out, which brings up questions not just about transparency, but about the state of Wire’s privacy policy, given the company’s holding company now being on US soil.

It was an issue picked up and amplified by NSA whistleblower Edward Snowden . Via Twitter, he described the move to the US as “not appropriate for a company claiming to provide a secure messenger — claims a large number of human rights defenders relied on.”

The key question is whether Wire’s shift to the US puts users’ data at risk — a question that Brogger claims is straightforward to answer: “We are in Switzerland, which has the best privacy laws in the world” — it’s subject to Europe’s General Data Protection Regulation framework (GDPR) on top of its own local laws — “and Wire now belongs to a new group holding, but there no change in control.” 

In its blog post published in the wake of blowback from privacy advocates, Wire also claims it “stands by its mission to best protect communication data with state-of-the-art technology and practice” — listing several items in its defence:

  • All source code has been and will be available for inspection on GitHub (github.com/wireapp).
  • All communication through Wire is secured with end-to-end encryption — messages, conference calls, files. The decryption keys are only stored on user devices, not on our servers. It also gives companies the option to deploy their own instances of Wire in their own data centers.
  • Wire has started working on a federated protocol to connect on-premise installations and make messaging and collaboration more ubiquitous.
  • Wire believes that data protection is best achieved through state-of-the-art encryption and continues to innovate in that space with Messaging Layer Security (MLS).

But where data privacy and US law are concerned, it’s complicated. Snowden famously leaked scores of classified documents disclosing the extent of US government mass surveillance programs in 2013, including how data-harvesting was embedded in US-based messaging and technology platforms.

Six years on, the political and legal ramifications of that disclosure are still playing out — with a key judgement pending from Europe’s top court which could yet unseat the current data transfer arrangement between the EU and the US.

Privacy versus security

Wire launched at a time when interest in messaging apps was at a high watermark. The company made its debut in the middle of February 2014, and it was only one week later that Facebook acquired WhatsApp for the princely sum of $19 billion.

We described Wire’s primary selling point at the time as a “reimagining of how a communications tool like Skype should operate had it been built today” rather than in in 2003. That meant encryption and privacy protection, but also better audio tools and file compression and more.

It was a pitch that seemed especially compelling considering the background of the company. Skype co-founder Janus Friis and funds connected to him were the startup’s first backers (and they remain the largest shareholders); Wire was co-founded in by Skype alums Jonathan Christensen and Alan Duric (no longer with the company); and even new investor Morpheus has Skype roots.

Yet even with that Skype pedigree, the strategy faced a big challenge.

“The consumer messaging market is lost to the Facebooks of the world, which dominate it,” Brogger said today. “However, we made a clear insight, which is the core strength of Wire: security and privacy.”

That, combined with trend around the consumerization of IT that’s brought new tools to business users, is what led Wire to the enterprise market in 2017 — a shift that’s seen it pick up a number of big names among its 700 enterprise customers, including Fortum, Aon, EY and SoftBank Robotics.

But fast forward to today, and it seems that even as security and privacy are two sides of the same coin, it may not be so simple when deciding what to optimise in terms of features and future development, which is part of the question now and what critics are concerned with.

“Wire was always for profit and planned to follow the typical venture backed route of raising rounds to accelerate growth,” one source familiar with the company told us. “However, it took time to find its niche (B2B, enterprise secure comms).

“It needed money to keep the operations going and growing. [But] the new CEO, who joined late 2017, didn’t really care about the free users, and the way I read it now, the transformation is complete: ‘If Wire works for you, fine, but we don’t really care about what you think about our ownership or funding structure as our corporate clients care about security, not about privacy.'”

And that is the message you get from Brogger, too, who describes individual consumers as “not part of our strategy”, but also not entirely removed from it, either, as the focus shifts to enterprises and their security needs.

Brogger said there are still half a million individuals on the platform, and they will come up with ways to continue to serve them under the same privacy policies and with the same kind of service as the enterprise users. “We want to give them all the same features with no limits,” he added. “We are looking to switch it into a freemium model.”

On the other side, “We are having a lot of inbound requests on how Wire can replace Skype for Business,” he said. “We are the only one who can do that with our level of security. It’s become a very interesting journey and we are super excited.”

Part of the company’s push into enterprise has also seen it make a number of hires. This has included bringing in two former Huddle C-suite execs, Brogger as CEO and Rasmus Holst as chief revenue officer — a bench that Wire expanded this week with three new hires from three other B2B businesses: a VP of EMEA sales from New Relic, a VP of finance from Contentful; and a VP of Americas sales from Xeebi.

Such growth comes with a price-tag attached to it, clearly. Which is why Wire is opening itself to more funding and more exposure in the US, but also more scrutiny and questions from those who counted on its services before the change.

Brogger said inbound interest has been strong and he expects the startup’s next round to close in the next two to three months.

The Garage is a new blockchain-focused incubator based in Paris

Meet The Garage, a new incubator in Paris that is all about blockchain projects. Co-founded by Cyril Paglino from Starchain Capital, Fabrice Le Fessant from Dune Network and Oussama Ammar from The Family, the company will support blockchain startups, help big companies launch blockchain projects and educate engineers about blockchain development.

The Garage is a sort of puzzle made out of multiple pieces. First, it wants to create a community of startups and support those startups in different ways.

“We copy and paste The Family’s model, which means that it’s built on trust. We take 5% of equity after six months if the startup and The Garage are happy,” The Garage director Damien Daübe said during a small press conference yesterday.

In exchange for 5%, startups that are part of The Garage community get some help when it comes to product, engineering, press relations, marketing, etc. Eventually, The Garage wants to tap its network of investors to make some introductions and help them get some funding and traction.

There are already five startups participating in the program, such as Ipocamp, Ticket721 and Elite Chain. Eventually, The Garage wants to help 25 startups per year. The Family receives a lot of applications. You could imagine that The Family might recommend The Garage to some of them.

But taking some equity isn’t going to generate revenue from day one. The Garage is also going to work with Dune Network, the new blockchain from OCamlPro. According to The Block, OCamlPro was working with the Tezos Foundation but decided to part ways, create a fork and start a new blockchain.

The Garage is going to work with big corporate clients on some blockchain projects. This could generate some revenue much more quickly.

Finally, The Garage is also going to teach software engineers about blockchain development. The company will host with free lessons in the evening. There will be some online resources as well.

All of this is going to happen in a recently renovated building that looks like a hybrid between an Apple Store and a movie set. If you’re into concrete, metal and industrial design, it’s a beautiful place. It was mostly used for fashion week events until The Garage started renting it.

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Plum, the ‘AI’ money management app, raises $3M more and comes to Android

Plum, the U.K.-based “AI assistant” to help you manage your money and save more, has raised $3 million in additional funding — money it plans to use for further growth, including European expansion.

The London company has also quietly launched its app for Android phones, adding to an existing iOS app and Facebook Messenger chatbot.

Backing this round — which is essentially a second tranche to Plum’s earlier $4.5 million raise in the summer — is EBRB, and VentureFriends, both existing investors. Christian Faes, founder and CEO of LendInvest has also participated

It brings the fintech startup’s total funding to $9.3 million since being founded by early TransferWise employee Victor Trokoudes, and Alex Michael in 2016.

The new investment is said to come at the end of a year of “rapid expansion for Plum” in both London and Athens, including growing the team to 31 employees. Senior hires include Max Mawby, Plum’s Head of Behavioural Science, who previously worked for the U.K. government and ran the fintech sector-focused Behavioural Insights Team.

In a call, Trokoudes told me that take up for Plum’s iOS app has been high and Android is also following a similar trajectory, proof that the startup’s AI assistant has perhaps outgrown its chatbook and Facebook Messenger beginnings (competitor Cleo has also released dedicated iOS and Android apps as an alternative to Facebook Messenger).

He also says Plum now has 650,000 registered users, of which around 70% are active monthly. In recent user feedback sessions conducted by the startup, the biggest draw to the app is that it’s aim of changing financial behaviour to help people save more appears to be working.

When users stick around using Plum for long enough, Trokoudes says they are surprised (and delighted) that it actually works.

Like similar apps, Plum’s “artificial intelligence” deems what you can afford to save by analysing your bank transactions. It then puts money away each month in the form of round-ups and/or regular savings.

You can open an ISA investment account and invest based on themes, such as only in “ethical companies” or technology. Another related feature is “Splitter,” which, as the name suggests, lets you split your automatic savings between Plum savings and investments, selecting the percentage amounts to go into each pot from 0-100%.

Trokoudes says that Plum recently launched two new “intelligent” saving rules: the 52 Week Challenge, which aims to help you save £1367 over a year; and the Rainy Day Rule, which puts aside money whenever it rains (yes, really!).

“Saving rules use automation to help people save more effectively without overloading them with information,” adds the Plum founder in a statement. “We have good evidence that this approach works: our automated round-ups feature, that we launched earlier this year has become a firm favourite among Plum users, boosting their savings by 50% on average”.

Meanwhile, another one of Plum’s competitors, Chip recently raised £3.8 million in equity crowdfunding on Crowdcube. It was part of a round targeting $7.3 million in total, although it isn’t clear if all of that has closed yet (last time I checked the company had so far secured $5 million). Noteworthy, the equity crowdfund gave Chip a pre-money valuation of £36.78 million based on “over 153,000” accounts opened.

Dutch court orders Facebook to ban celebrity crypto scam ads after another lawsuit

A Dutch court has ruled that Facebook can be required to use filter technologies to identify and pre-emptively take down fake ads linked to crypto currency scams that carry the image of a media personality, John de Mol, and other well known celebrities.

The Dutch celerity filed a lawsuit against Facebook in April over the misappropriation of his and other celebrities’ likeness to shill Bitcoin scams via fake ads run on its platform.

In an immediately enforceable preliminary judgement today the court has ordered Facebook to remove all offending ads within five days, and provide data on the accounts running them within a week.

Per the judgement, victims of the crypto scams had reported a total of €1.7 million (~$1.8M) in damages to the Dutch government at the time of the court summons.

The case is similar to a legal action instigated by UK consumer advice personality, Martin Lewis, last year, when he announced defamation proceedings against Facebook — also for misuse of his image in fake ads for crypto scams.

Lewis withdrew the suit at the start of this year after Facebook agreed to apply new measures to tackle the problem: Namely a scam ads report button. It also agreed to provide funding to a UK consumer advice organization to set up a scam advice service.

In the de Mol case the lawsuit was allowed to run its course — resulting in today’s preliminary judgement against Facebook. It’s not yet clear whether the company will appeal but in the wake of the ruling Facebook has said it will bring the scam ads report button to the Dutch market early next month.

In court, the platform giant sought to argue that it could not more proactively remove the Bitcoin scam ads containing celebrity images on the grounds that doing so would breach EU law against general monitoring conditions being placed on Internet platforms.

However the court rejected that argument, citing a recent ruling by Europe’s top court related to platform obligations to remove hate speech, also concluding that the specificity of the requested measures could not be classified as ‘general obligations of supervision’.

It also rejected arguments by Facebook’s lawyers that restricting the fake scam ads would be restricting the freedom of expression of a natural person, or the right to be freely informed — pointing out that the ‘expressions’ involved are aimed at commercial gain, as well as including fraudulent practices.

Facebook also sought to argue it is already doing all it can to identify and take down the fake scam ads — saying too that its screening processes are not perfect. But the court said there’s no requirement for 100% effectiveness for additional proactive measures to be ordered. Its ruling further notes a striking reduction in fake scam ads using de Mol’s image since the lawsuit was announced

Facebook’s argument that it’s just a neutral platform was also rejected, with the court pointing out that its core business is advertising.

It also took the view that requiring Facebook to apply technically complicated measures and extra effort, including in terms of manpower and costs, to more effectively remove offending scam ads is not unreasonable in this context.

The judgement orders Facebook to remove fake scam ads containing celebrity likenesses from Facebook and Instagram within five days of the order — with a penalty of €10k per day that Facebook fails to comply with the order, up to a maximum of €1M (~$1.1M).

The court order also requires that Facebook provides data to the affected celebrity on the accounts that had been misusing their likeness within seven days of the judgement, with a further penalty of €1k per day for failure to comply, up to a maximum of €100k.

Facebook has also been ordered to pay the case costs.

Responding to the judgement in a statement, a Facebook spokesperson told us:

We have just received the ruling and will now look at its implications. We will consider all legal actions, including appeal. Importantly, this ruling does not change our commitment to fighting these types of ads. We cannot stress enough that these types of ads have absolutely no place on Facebook and we remove them when we find them. We take this very seriously and will therefore make our scam ads reporting form available in the Netherlands in early December. This is an additional way to get feedback from people, which in turn helps train our machine learning models. It is in our interest to protect our users from fraudsters and when we find violators we will take action to stop their activity, up to and including taking legal action against them in court.

One legal expert describes the judgement as “pivotal“. Law professor Mireille Hildebrandt told us that it provides for as an alternative legal route for Facebook users to litigate and pursue collective enforcement of European personal data rights. Rather than suing for damages — which entails a high burden of proof.

Injunctions are faster and more effective, Hildebrandt added.

The judgement also raises questions around the burden of proof for demonstrating Facebook has removed scam ads with sufficient (increased) accuracy; and what specific additional measures it might deploy to improve its takedown rate.

Although the introduction of the ‘report scam ad button’ does provide one clear avenue for measuring takedown performance.

The button was finally rolled out to the UK market in July. And while Facebook has talked since the start of this year about ‘envisaging’ introducing it in other markets it hasn’t exactly been proactive in doing so — up til now, with this court order. 

Angular Ventures outs $41M seed fund for European and Israeli enterprise and ‘deep tech’ startups

Angular Ventures, the early-stage enterprise and “deep tech”-focused VC firm founded by former DFJ Esprit partner Gil Dibner, is announcing the closing of its debut fund at $41 million.

Targeting startups in Europe and Israel, Angular Ventures has been operating in so-called “stealth mode” for almost two years, seeing its portfolio grow to 12 companies. The VC typically invests between $250,000 and $1.5 million, from writing a startup’s first cheque to Series A. It says it aims to do five-seven new investments per year.

Companies backed by Angular include “service intelligence” startup Aquant.io, HR workplace misconduct platform Vault, nano-tech security technology provider Dust Identity (also backed by Kleiner Perkins) and food supply chain optimization company Trellis.

Notably, Dibner is Angular Ventures’ sole general partner. Prior to founding Angular Ventures, he was most recently running an angel syndicate on AngelList, although his venture career goes back much further.

Prior to leading the syndicate, Dibner was a partner at London-based venture capital firm DFJ Esprit, which he departed in March 2015. Before that he was a principal at Index Ventures, also in London, and had earlier spells at Israeli VCs Gemini Israel Ventures and Genesis Partners, both in Tel Aviv.

Dibner says he wanted to “re-imagine” early-seed venture capital in Europe and Israel by building what he describes as a sector-focused firm, and removing geographical boundaries by investing in both Europe and Israel, and establishing a U.S. presence to support portfolio startups with global expansion.

Whether or not you think that is particularly unique, you’re mileage may vary, but there is no doubt Dibner has a decent investment track record in the enterprise space and beyond, either way.

Throughout his career to date, Dibner says he has backed 40 companies. Breaking this down further: 28 have raised capital from U.S.-based VC firms or exited to U.S.-based acquirers. In fact, he’s seen eight exits overall, and two of Dibner’s investments — JFrog and SiSense — have reached “unicorn” status, i.e. a valuation of $1 billion or more.

Despite his track record, Dibner says it took four years to finally close this fund, which has given him even more empathy for founders during fundraising.

“It took nearly four years to get from concept to a first close, and although we were ultimately significantly oversubscribed, I had to hear a lot of ‘nos’ to get this done,” he tells TechCrunch. “There are a lot of differences between raising a fund and raising money for a company, but experience has given me even more empathy with founders who are often enduring very difficult fundraising pathways. The most ambitious ideas usually have the most difficult fundraising.”

It is also probably worth noting that all of Angular’s LPs are private/commercial — in other words, no taxpayer money is at stake here, unlike a plethora of European VC funds. And whilst Dibner is the sole GP, he says he’s working with a team of advisors helping to source deals, provide due diligence and support portfolio companies.

They include: Fred Simon, founder of JFrog; Eldad Farkash, founder of SiSense and Firebolt, an Angular portfolio company; Guy Poreh, former EVP New Media at BBDO, who led Wix’s U.S. market launch and founded Playground; Jerry Dischler, who leads product for Google search and YouTube search; and Phil Wickham, who founded Sozo Ventures and is the chairman of the Kauffman Fellows Program.