Minneapolis-based VC shop Bread & Butter focuses on its own backyard

While many investors say sheltering in place has broadened their appetite for funding companies located outside major hubs, one firm is doubling down on backing startups in America’s heartland.

Launched in 2016 by Brett Bohl, The Syndicate Fund rebranded to Bread & Butter Ventures earlier this month (a reference to one of Minnesota’s many nicknames). Along with the rebrand, longtime Google executive and Revolution partner Mary Grove joined the team as a general partner and Stephanie Rich came aboard as head of platform.

The growth of the Twin Cities’ startup ecosystem is precisely why The Syndicate Fund rebranded. The firm, which has $10 million in assets under management, will invest in three of Minneapolis’ biggest strengths: agriculture and food, health care and enterprise software.

Agtech interest spans the entire spectrum from farming to restaurants and grocery stores. The firm is also interested in the “messy middle” of supply chain and logistics around food, said Bohl and is interested in a mix of software, hardware and biosciences. Within health care, the firm evaluates solutions focused on prevention versus treatment, female health startups working on maternal health and fertility and software focused on the aging population and millennials.

It’s also looking at enterprise software that can serve large businesses and scale efficiently.

Beyond Burger arrives in Alibaba’s grocery stores in China

Beyond Meat is starting to hit supermarket shelves in China after it first entered the country in April by supplying Starbucks’ plant-based menu. Within weeks, it had also forayed into select KFC, Taco Bell, and Pizza Hut outlets — all under the Yum China empire.

China, the world’s biggest market for meat consumption, has seen a growing demand for plant-based protein. Euromonitor predicted that the country’s “free from meat” market, including plant-based meat substitutes, would be worth almost $12 billion by 2023, up from just under $10 billion in 2018.

The Nasdaq-listed food giant is now bringing its signature Beyond Burgers into Freshippo (“Hema” in Chinese), Alibaba’s supermarket chain with a 30-minute delivery service that recorded a spike in orders during the pandemic as people avoided in-person shopping.

The tie-up will potentially promote the animal-free burgers to customers of Freshippo’s more than 200 stores across China’s Tier 1 and Tier 2 cities. They will first be available in 50 stores in Shanghai and arrive in more locations in September.

“We know that retail will be a critical part of our success in China, and we’re pleased to mark this early milestone within a few months of our market entry,” Ethan Brown, founder and chief executive officer of Beyond Meat, said in a statement.

Plant-based meat has a long history in China, serving the country’s Buddhist communities before the diet emerged as a broader urban lifestyle in more recent times. Amid health concerns, the Chinese government told citizens to cut back on meat consumption in 2016. The middle-class urban dwellers have also been embracing fake meat products as they respond to climate change.

“Regardless of international or local brands, Chinese consumers are now only seeing the first generation of plant-based offerings. Purchases today are mostly limited to forward-thinking experimenters,” Matilda Ho, founder and managing director of Bits x Bites, a venture capital firm targeting the Chinese food-tech industry, told TechCrunch. “The good news is China’s per capita consumption of plant-based protein is amongst the highest in the world.”

“For these offerings to scale to mass consumers or attract repeat purchases from early adopters, there is tremendous opportunity to improve on the mouthfeel, flavor, and how these products fit into the Chinese palate. To appeal to health-conscious flexitarians or vegetarians, there is also plenty of room to improve the nutritional profile in comparison to the conventional tofu or Buddhist mimic meat,” Ho added.

The fake meat market is already rife with competition. Domestic incumbent Qishan Foods has been around since 1993. Hong Kong’s OmniPork and Alpha Foods were quick to capture the new appetite across the border. Nascent startup Zhenmeat is actively seeking funding and touting its understanding of the “Chinese taste.”

Meanwhile, Beyond Meat’s rival back home Impossible Foods may be having a harder time cracking the market, as its genetically-modified soy ingredient could cause concerns among health-conscious Chinese.

As Uber hunts for a deal, can Postmates leverage an IPO?

It’s been a busy last 24 hours or so for on-demand delivery company Postmates. According to reporting, the company is reviving its IPO plans, possibly selling to Uber, or perhaps looking to go public with the help of a special purpose acquisition vehicle, also known as a SPAC.

For Postmates, a company caught somewhere between DoorDash’s cash-fueled rise and Uber’s ability to lose hundreds of millions on its Uber Eats delivery service every quarter, multiples options are likely welcome.

Postmates first filed to go public in early 2019, but its IPO failed to materialize. The company was also reported to be pursuing a sale in 2019 after it had filed to go public. An M&A exit also failed to appear.


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But 2020 is very different from 2019. With GrubHub’s bidding war behind us, Uber appears hungry for more volume, and the IPO market is surprisingly hot given the global pandemic. Postmates may have a number of viable options in front of it, instead of a continued grind as a private company.

The IPO market

So what to do?

Despite some blips, if Postmates has managed anything like revenue growth acceleration because people have been staying home and ordering more food and other goods, the company’s IPO story could prove attractive. And if so, the firm could perhaps best what a cash-burning company can afford to part with in an M&A transaction by going public.

Let’s check the tape. It’s a commonly known fact that the public markets have favored technology companies this year, especially software companies. For many venture-backed companies, this is great news. For Postmates, it’s a slightly different equation, as its margins won’t match those of software companies, nor will its revenue recur in a similar fashion.

But, there are IPOs from this year that we can point to featuring companies that also do not feature strong margins or recurring revenue that did great. So, there is an IPO path for venture-backed startups and unicorns to go public even if they are not software entities.

Vroom

India’s Milk Mantra secures $10M from US International Development Finance Corporation

Milk Mantra, a startup that procures, packages, sells and delivers milk and other dairy products, has raised $10 million in a new debt financing round as it looks to grow its business in India, where nearly a dozen startups have attempted and failed to serve this category in recent years.

U.S. International Development Finance Corporation (DFC) has committed a $10 million loan to Milk Mantra, said the Indian startup that has raised about $35 million by selling equity stake to date.

Headquartered in the state of Odisha, Milk Mantra has built the entire value chain for servicing dairy products, said Srikumar Misra, founder and chief executive of the startup, in an interview with TechCrunch.

Milk Mantra works directly with farmers, tests and processes the milk, and then sells it through more than 10,000 mom-and-pop stores in several cities in Odisha, said Misra. In the past one year, Milk Mantra has also launched a daily subscription service that delivers milk to customers’ homes.

The startup’s heavy reliance on these tiny store fronts is in contrast with how most other young firms operating in this space have attempted to cash in on India’s gigantic milk market that is the world’s largest in the dairy herd and where more than 170 million metric tons of milk is produced each year.

A wave of startups in recent years have tried to buy milk from informal collectors and then use an army of delivery people to distribute it. But because of the razor thin margin on milk, they have struggled to make economic sense that has resulted in a major consolidation and other exits in the market in recent years.

In the past two years, online grocery delivery firm BigBasket has acquired DailyNinja and RainCan, two startups that delivered milk, while a similar startup SuprDaily was snatched by food delivery startup Swiggy, and Doodhwala closed shop.

Milk Market’s founder and chief executive Srikumar Misra is also part of a task force setup by New Delhi-based think tank Niti Aayog to build an agri-stack for the country

Misra said having full-time delivery people is currently not sustainable for the milk business. Even for its to-door service, he said, Milk Mantra’s delivery force only parts three to four hours of their day to the startup. “As we scale our subscription service, it may account for 10 to 15% of our sales,” he said. Milk Mantra turned EBIDTA positive last quarter, he said.

Relying on middlemen also means that the quality of milk gets deteriorated as they often add water, or powdered milk to artificially increase the volume. Misra, who started to explore this space after returning to India in 2009, said Milk Mantra has spent years to re-engineer how milk is sourced and sold in the country.

“In India, people still boil milk after getting it from their local parlour or delivery people because of trust deficit and other issues. So we re-engineered the packaging milk that prevents it from light exposure,” he said. The startup calls this milk product Milky Moo, the motto of which is “no need to boil.”

The startup works with more than 65,000 farmers today and has deployed IoT products and used data analytics to control quality and pricing. This has also helped farmers increase their income as the startup brings transparency on how much their milk is worth, said Misra.

Milk Mantra will deploy the fresh capital to build a digital financial services platform for its network of farmers. “This platform will drive financial inclusion for farmers, especially women farmers. It may be noted that there are nearly 100 million dairy farmers in India with a significant proportion being women,” the startup said.

It is also working to build a full-fledged chain in Kolkata, where it currently has limited presence.

Software will reshape our world in the next decade

As I was wrapping up a Zoom meeting with my business partners, I could hear my son joking with his classmates in his online chemistry class.

I have to say this is a very strange time for me: As much as I love my family, in normal times, we never spend this much time together. But these aren’t normal times.

In normal times, governments, businesses and schools would never agree to shut everything down. In normal times, my doctor wouldn’t agree to see me over video conferencing.

No one would stand outside a grocery store, looking down to make sure they were six feet apart from one another. In times like these, decisions that would normally take years are being made in a matter of hours. In short, the physical world — brick-and-mortar reality— has shut down. The world still functions, but now it is operating inside everyone’s own home.

This not-so-normal time reminds me of 2008, the depths of the financial crisis. I sold my company BEA Systems, which I co-founded, to Oracle for $8.6 billion in cash. This liquidity event was simultaneously the worst and most exhausting time of my career, and the best time of my career, thanks to the many inspiring entrepreneurs I was able to meet.

These were some of the brightest, hardworking, never-take-no-for-an-answer founders, and in this era, many CEOs showed their true colors. That was when Slack, Lyft, Uber, Credit Karma, Twilio, Square, Cloudera and many others got started. All of these companies now have multibillion dollar market caps. And I got to invest and partner with some of them.

Once again, I can’t help but wonder what our world will look like in 10 years. The way we live. The way we learn. The way we consume. The way we will interact with each other.

What will happen 10 years from now?

Welcome to 2030. It’s been more than two decades since the invention of the iPhone, the launch of cloud computing and one decade since the launch of widespread 5G networks. All of the technologies required to change the way we live, work, eat and play are finally here and can be distributed at an unprecedented speed.

The global population is 8.5 billion and everyone owns a smartphone with all of their daily apps running on it. That’s up from around 500 million two decades ago.

Robust internet access and communication platforms have created a new world.

The world’s largest school is a software company — its learning engine uses artificial intelligence to provide personalized learning materials anytime, anywhere, with no physical space necessary. Similar to how Apple upended the music industry with iTunes, all students can now download any information for a super-low price. Tuition fees have dropped significantly: There are no more student debts. Kids can finally focus on learning, not just getting an education. Access to a good education has been equalized.

The world’s largest bank is a software company and all financial transactions are digital. If you want to talk to a banker live, you’ll initiate a text or video conference. On top of that, embedded fintech software now powers all industries.

No more dirty physical money. All money flow is stored, traceable and secured on a blockchain ledger. The financial infrastructure platforms are able to handle customers across all geographies and jurisdictions, all exchanges of value, all types of use-cases (producers, distributors, consumers) and all from the start.

The world’s largest grocery store is a software and robotics company — groceries are delivered whenever and wherever we want as fast as possible. Food is delivered via robot or drones with no human involvement. Customers can track where, when and who is involved in growing and handling my food. Artificial intelligence tells us what we need based on past purchases and our calendars.

The world largest hospital is a software and robotics company — all initial diagnoses are performed via video conferencing. Combined with patient medical records all digitally stored, a doctor in San Francisco and her artificial intelligence assistant can provide personalized prescriptions to her patients in Hong Kong. All surgical procedures are performed by robots, with supervision by a doctor of course, we haven’t gone completely crazy. And even the doctors get to work from home.

Our entire workforce works from home: Don’t forget the main purpose of an office is to support companies’ workers in performing their jobs efficiently. Since 2020, all companies, and especially their CEOs, realized it was more efficient to let their workers work from home. Not only can they save hours of commute time, all companies get to save money on office space and shift resources toward employee benefits. I’m looking back 10 years and saying to myself, “I still remember those days when office space was a thing.”

The world’s largest entertainment company is a software company, and all the content we love is digital. All blockbuster movies are released direct-to-video. We can ask Alexa to deliver popcorn to the house and even watch the film with friends who are far away. If you see something you like in the movie, you can buy it immediately — clothing, objects, whatever you see — and have it delivered right to your house. No more standing in line. No transport time. Reduced pollution. Better planet!

These are just a few industries that have been completely transformed by 2030, but these changes will apply universally to almost anything. We were told software was eating the world.

The saying goes you are what you eat. In 2030, software is the world.

Security and protection no longer just applies to things we can touch and see. What’s valuable for each and every one of us is all stored digitally — our email account, chat history, browsing data and social media accounts. It goes on and on. We don’t need a house alarm, we need a digital alarm.

Even though this crisis makes the near future seem bleak, I am optimistic about the new world and the new companies of tomorrow. I am even more excited about our ability to change as a human race and how this crisis and technology are speeding up the way we live.

This storm shall pass. However the choices we make now will change our lives forever.

My team and I are proud to build and invest in companies that will help shape the new world; new and impactful technologies that are important for many generations to come, companies that matter to humanity, something that we can all tell our grandchildren about.

I am hopeful.

Stockwell, the AI-vending machine startup formerly known as Bodega, is shutting down July 1

Stockwell AI entered the world with a bang but it is leaving with a whimper. Founded in 2017 by ex-Googlers, the AI vending machine startup formerly known as Bodega first raised blood pressures — people hated how it referenced and poorly ‘disrupted’ mom-and-pop shops in one fell swoop — and then raised a lot of money. But ultimately, it was no match for COVID-19 and the hit it has had on how we live.

TechCrunch has learned and confirmed that Stockwell will be shutting down at the end of this month, after it was unable find a viable business for its in-building app-controlled “smart” vending machines stocked with convenience store items.

“Regretfully, the current landscape has created a situation in which we can no longer continue our operations and will be winding down the company on July 1st,” co-founder and CEO Paul McDonald wrote in an email to TechCrunch. “We are deeply grateful to our talented team, incredible partners and investors, and our amazing shoppers that made this possible. While this wasn’t the way we wanted to end this journey, we are confident that our vision of bringing the store to where people live, work and play will live on through other amazing companies, products and services.”

We originally reached out after we were tipped off by someone who had received an email about the closure. Stockwell’s vending boxes were distributed primarily in apartment and office buildings, and it has been contacting those customers for the past week to break the news.

For what it’s worth, the building operator that was using Stockwell vending machines said it is actively in search of a replacement provider, so it seems it did get some use, but more pointedly it’s been very hard for the vending machine industry, where some distributors have seen business losses of up to 90%.

Stockwell’s closure is notable because it underscores how in the current climate, having a strong list of backers and a very decent amount of funding cannot always guarantee insulation for everyone.

As of last September, Stockwell had raised at least $45 million in funding from investors that included NEA, GV, DCM Ventures, Forerunner, First Round, and Homebrew. Its network had grown to 1,000 “stores”, smart vending machines that work a little like advanced hotel minibars: sensors detect and charge you for what you take out, and you use a smartphone app both to track what you buy and to pay for it.

As of last autumn, the company appeared to be gearing up for a widening of its business model, allowing its customers (building, office and apartment managers) to have a bigger say in what got stocked beyond the items Stockwell itself put into its machines, which included water and other beverages, savoury and sweet snacks, and a few home basics like laundry detergent and pain killers.

By December, it seems that McDonald’s co-founder, Ashwath Rajan, had quietly left the startup, and then as 2020 kicked into gear, COVID-19 took its toll.

First, consumers found themselves spending much more time working and simply being at home, going out less and bulk buying to minimise shopping efforts. That, in turn, had a big impact on the sustainability of business models based on casual, small purchases, such as the kind that one would typically make from vending machines like Stockwell’s.

Second, at a time when many are trying to minimise the spread of infection by wearing face masks, washing hands and minimising touching random objects, a big question mark hangs over the whole concept of unattended vending machines, and whether they can ever be properly sanitised. That’s impacted not only people buying items, but the workforce that’s meant to help stock and maintain these kiosks.

There have been some interesting twists in how the vending industry has handled COVID-19. Some are swapping out pretzels and Snickers and replacing them with PPE equipment, and others are finding opportunity in stocking them with healthy food specifically for front-line workers who have no other options and need quick but nutritious fixes during critical times.

But more generally, the vending machine industry has been hit hard by the pandemic.

The wider market in a normal year is estimated to be worth some $30 billion annually — one reason why Stockwell nee Bodega likely caught the eye of investors — but business has fallen off a cliff for many key operators.

The president of the European Vending Association, in an appeal in April to government leaders for financial assistance, said that business had dropped off by 90% and described COVID-19 as having a “devastating effect” on the sector. Difficult numbers for the Pepsi’s and Mondelez’s (nee Kraft) of the world, but surely the nail in the coffin for a young, promising AI-based vending machine startup that nonetheless some doubted from the word go.

Daily Crunch: Just Eat Takeaway confirms its Grubhub acquisition

Food delivery takes a big step toward consolidation, Amazon announces a moratorium on providing facial recognition tech to law enforcement (but there are loopholes) and Twitter tests a way to scold users for tweeting an article they haven’t read.

Here’s your Daily Crunch for June 11, 2020.

1. Just Eat Takeaway confirms it’s gobbling up Grubhub in a $7.3B deal

European company Just Eat Takeaway said the combined operation processed 593 million orders in 2019 and will have over 70 million combined active customers globally.

This is an all-stock deal. Matt Maloney, CEO and founder of Grubhub, will join the Just Eat Takeaway.com management board and will lead the combined group’s businesses across North America.

2. Amazon’s facial recognition moratorium has major loopholes

In a surprise blog post, Amazon said it will put the brakes on providing its facial recognition technology to police for one year, but it refuses to say if the move applies to federal law enforcement agencies. Amazon also did not say what action it would take after the yearlong moratorium expires.

3. Twitter tests a feature that calls you out for RTing without reading the article

The experimental new prompt doesn’t stop a user from resharing a link before clicking to read it. Instead, it suggests you might want to read the article first. And the feature will only appear for some U.S.-based Android users for now.

4. Sentropy emerges from stealth with an AI platform to tackle online abuse, backed by $13M from Initialized and more

Sentropy says that it has developed the most sophisticated — yet easy to implement — system for identifying, tracking and ultimately purging online abuse by way of its AI-based platform.

5. Extra Crunch Live: Join BLCK VC’s Sydney Sykes for a discussion on fostering diversity in venture

At 1pm Eastern/10am Pacific today, we’ll be speaking to Sydney Sykes, who started BLCK VC with Frederik Groce in 2018 with a mission to increase the number of Black investors in tech. We’ll be making this episode of Extra Crunch Live free to watch and participate in live, and to view later.

6. 9 top space tech VCs on the market’s opportunities and challenges

We caught up with nine top investors in the space market to collect their thoughts on what’s going on right now in the industry, what red flags there are to watch out for and what opportunities they see for new and existing space startups. (Extra Crunch membership required.)

7. Theaters are ready to reopen, but is America ready to go back to the movies?

As America begins the slow, deliberate process of reopening, movie theaters have outlined their own plans to return to normal. But it seems clear that like so many other industries, the theatrical movie business remains very uncertain.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

Just Eat Takeaway confirms it’s gobbling up Grubhub in a $7.3B deal

Consolidation in the world of on-demand food ordering and delivery continues apace. Today, Just Eat Takeaway — the European company that only just got its own $7.8 billion merger approved by regulators in April of this year — officially announced that it has reached an agreement to acquire Grubhub in the U.S. for an enterprise value of $7.3 billion.

The company said the combined operation — which processed 593 million orders in 2019 — will have over 70 million combined active customers globally.

Under the terms of the deal, Grubhub shareholders will be entitled to receive American depositary receipts (“ADRs”) representing 0.6710 Just Eat Takeaway.com ordinary shares in exchange for each Grubhub share, representing an implied value of $75.15 for each Grubhub share (based on the undisturbed closing price of Just Eat Takeaway.com on June 9, 2020 of €98.602), the companies said. This gives Grubhub a total equity consideration (on a fully diluted basis) of $7.3 billion.

Matt Maloney, CEO and founder of Grubhub, will join the Just Eat Takeaway.com management board and will lead the combined group’s businesses across North America. Jitse Groen, CEO and founder of Just Eat Takeaway.com, will lead the combined business globally.

“Matt and I are the two remaining food delivery veterans in the sector, having started our respective businesses at the turn of the century, albeit on two different continents. Both of us have a firm belief that only businesses with high-quality and profitable growth will sustain in our sector. I am excited that we can create the world’s largest food delivery business outside China,” Groen said in a statement. “We look forward to welcoming Matt and his team to our company and working with them in the future.”

“When Grubhub and Seamless were founded, the online takeout industry didn’t exist in the U.S. My vision was to transform the delivery and pick-up ordering experience. Like so many other entrepreneurs, we started modestly – restaurant by restaurant in our Chicago neighbourhood. Today, Grubhub is a leader across North America,” Maloney said in a statement. “I’ve known Jitse since 2007 and his story is much like mine. Combining the companies that started it all will mean that two trailblazing start-ups have become a clear global leader. We share a focus on a hybrid model that places extra value on volume at independent restaurants, driving profitable growth. Supported by Just Eat Takeaway.com, we intend to accelerate our mission to be the fastest, best and most rewarding way to order food from your favourite local restaurants in North America and around the world. We could not be more excited.”

The deal caps off a tumultuous period for Grubhub, which as Maloney noted was also created through a combination with another rival, Seamless. The company has been in play for months and had been in acquisition talks with Uber’s Eats division.

Uber was in talks with Grubhub on and off for about a year, according to a source familiar with the deal. Uber was still negotiating with Grubhub as of Wednesday morning. However, sources told CNBC’s Peter Faber that Uber was preparing to leave the deal over antitrust concerns. Ultimately, discussions broke down over a variety of concerns, including expected regulatory scrutiny, the source told TechCrunch.

Grubhub announced the tie-up with Just Eat shortly after Uber confirmed publicly that it was walking away from the deal.

Uber didn’t comment on specifics of the merger. However, an official statement indicates that Uber still sees consolidation of the food delivery industry as a path to profitability.

“Like ridesharing, the food delivery industry will need consolidation in order to reach its full potential for consumers and restaurants,” an Uber spokesperson said in an emailed statement. “That doesn’t mean we are interested in doing any deal, at any price, with any player.”

Investor reception to the deal was mixed. Grubhub shares rose as much as 9% in after hours trading before settling to about 6.2% above closing price. Just Eat stock fell 10.79%. Meanwhile, Uber shares, which dropped 4.81% to close at $34.83, fell another 1.38% in after hours trading.

Online food delivery has been a tough gig: on one hand, very popular with consumers, but on the other, an extremely commoditised and competitive business, where companies need to spend huge amounts of money to gain and keep customers.

One solution to that cycle has been to take out rivals and get better economies of scale on operations. This has been the route so far with Just Eat Takeaway and Grubhub, which combined say they will be profitable and can now focus on improving margins further.

But for the others in the space, the big question now will have to be: which players will consolidate next? In the US, in addition to Uber Eats, there is also Postmates and Doordash, while the European market has Deliveroo, in addition to a plethora of smaller players in both markets.

Silicon Valley can fight systemic racism by supporting Black-owned businesses

As the United States sees its second week of large-scale protests against police brutality, it’s painfully clear that the country’s racial divide requires significant short- and long-term action. But most of these calls for change gloss over the role Silicon Valley can and should play in mending the racial divide.

Right now, activists are rightfully urging the public to take two crucial steps: vote out state and local government leaders and support Black-owned businesses. Both steps are necessary, but the importance of the latter has been largely overshadowed. Leaders can enact policy change, but much of the structural racial disparity in the U.S. is economic. Black workers are vastly overrepresented in low-paying agricultural, domestic and service jobs.

They’re also far more likely to be unemployed (in normal economic circumstances, and especially during the pandemic). A Stanford University study found that only 1% of Black-owned businesses receive loans in their first year. That’s seven times lower than the percentage for white businesses.

Put simply, enacting new laws and overturning old ones won’t suddenly reverse decades of biased investment decisions. That’s why all over social media, there are grassroots pushes to shop Black. Apps like WeBuyBlack and eatOkra collate businesses and restaurants into one centralized database, while organizations like Bank Black encourage investment in Black-owned funds or Black-owned businesses.

But what happens when the hashtags stop trending, the protests stop attracting crowds, and the Twitter feeds return to celebrity gossip and reality show reactions? Many organizers worry that, after the media cycle of the George Floyd protests expire, widespread interest in fixing systemic racism will go away too. Apps may be helpful in propping up Black businesses, but they rely on customers fundamentally changing their purchasing and consumption habits. Perhaps the perfect storm of COVID-19 and Mr. Floyd’s death will result in a wide-scale transformation of consumer behavior. But that’s not a given, and even if it were, it wouldn’t be enough.

To systematically fix underinvestment in Black businesses, we need big tech to step up. Now.

In particular, while there’s been a lot of recent talk about “algorithmic bias” (preventing algorithms on sites like Facebook or Google from implicitly discriminating on the basis of race), there hasn’t been enough talk about proactively demanding “algorithmic equality.” What if, for instance, tech companies didn’t just focus on erasing the entrenched bias in their systems, but actually reprogrammed algos to elevate Black businesses, Black investors and Black voices?

This shift could involve deliberately increasing the proportion of Black-created products or restaurants that make it onto the landing pages of sites like Amazon and Grubhub. Less dramatically, it could tweak SEO language to better accommodate racial and regional differences among users. The algorithmic structures behind updates like Panda could be repurposed to systematically encourage the consumption of Black-created content, allowing Black voices and Black businesses to get proportional purchase in the American consumer diet.

There’s also no compelling reason to believe that these changes would harm user experience. A recent Brookings study found that minority-owned businesses are rated just as highly on Yelp as white-owned businesses. However, these minority-owned businesses grow more slowly and gain less traction than their white-owned counterparts — resulting in an annual loss of $3.9 billion across all Black businesses. To help resolve this glaring (and needless) inequality, Yelp could modify its algorithms to amplify high-performing Black-owned businesses. This could significantly increase the annual income of quality Black entrepreneurs, while also increasing the likelihood in overall investment in Black small businesses.

At the very least, giving Black business a short-term algorithmic advantage in take-out and delivery services could help stem the massive economic breach caused by the coronavirus and could help save the 40% of minority-owned businesses that have shut down because of the pandemic.

Nothing can undo the losses of George Floyd, Breonna Taylor, Ahmaud Arbery or the countless other Black Americans who unjustly died as a result of this country’s broken system. What we can do is demand accountability and action, both from our political leaders and from the Silicon Valley CEOs who structure e-commerce.

With thoughtful, data-based modifications, online platforms can give Black entrepreneurs, creators and voices the opportunity to compete — an equality that has been denied for far too long.

What grocery startup Weee! learned from China’s tech giants

When Larry Liu moved to the U.S. in 2003, one of the first challenges he experienced was the lack of Chinese ingredients available in local groceries. A native of Hubei, a Chinese province famous for its freshwater fish and lotus-inspired dishes, Liu got by with a limited supply found at local Asian groceries in the Bay Area.

His yearning for home food eventually prompted him to quit a stable financial management role at microcontroller company Atmel and go on to launch Weee!, an online market selling Asian produce, snacks and skincare products.

Like other players in grocery e-commerce, the five-year-old startup has seen exponential growth since the coronavirus outbreak as millions are confined to cooking and eating at home. Nearly a quarter of Americans purchased groceries online to avoid offline shopping during the pandemic, according to Statista data. Online grocery giants Instacart and Walmart Grocery boomed, both hitting record downloads.

In a Zoom call with TechCrunch, Liu, who’s now chief executive of Weee!, said that COVID-19 played a “very important role” in his company’s recent growth, and paved its way to profitability.

“It happened a lot faster than we expected, but we were growing rapidly with even more ambitious plans for expansion prior to COVID-19,” he said. “People are buying more because restaurants are closed. Many are first-time users of grocery delivery.”

The startup’s revenue is up 700% year-over-year and is estimated to generate an annual revenue in the lower hundreds of millions of dollars.

Online grocery, the WeChat way