Musca is the winner of TechCrunch Battlefield Tokyo 2018

TechCrunch is in the heart of Japan and we’ve been hearing from some of Tokyo’s brightest entrepreneurs competing to win the Battlefield startup competition here. We’ve whittled down the group of 20 startups that have presented onstage for our judges, and we’re proud to announce the winner of TechCrunch Tokyo 2018.

The winner is Musca!

The startup is looking to leverage the simple housefly as a solution to the global food crisis, helping curve starvation by creating high-quality organic fertilizer and animal feed in a manner that’s much quicker than existing methods. The company’s secret weapon is a breed of flies that the company claims is more resilient and more effective. The larva help break down and dry out animal excrement which is used as high-grade fertilizer while the larva are used as feed for birds and fish. This process takes just a week, compared to the 2-3 months other solutions take.

Musca was selected after impressing our expert judges in their first round of presentation before being selected for a second round alongside the teams from Job Rainbow, Kuraseru, Aeronext, Pol and Eco-Pork.

Musca will take a home a check for 1 million yen and bragging rights as one of the top young startups in Japan.

Musca is the winner of TechCrunch Battlefield Tokyo 2018

TechCrunch is in the heart of Japan and we’ve been hearing from some of Tokyo’s brightest entrepreneurs competing to win the Battlefield startup competition here. We’ve whittled down the group of 20 startups that have presented onstage for our judges, and we’re proud to announce the winner of TechCrunch Tokyo 2018.

The winner is Musca!

The startup is looking to leverage the simple housefly as a solution to the global food crisis, helping curve starvation by creating high-quality organic fertilizer and animal feed in a manner that’s much quicker than existing methods. The company’s secret weapon is a breed of flies that the company claims is more resilient and more effective. The larva help break down and dry out animal excrement which is used as high-grade fertilizer while the larva are used as feed for birds and fish. This process takes just a week, compared to the 2-3 months other solutions take.

Musca was selected after impressing our expert judges in their first round of presentation before being selected for a second round alongside the teams from Job Rainbow, Kuraseru, Aeronext, Pol and Eco-Pork.

Musca will take a home a check for 1 million yen and bragging rights as one of the top young startups in Japan.

Italic launches its marketplace for affordable luxury goods from top manufacturers

A new startup called Italic says it’s already received more than 100,000 signups for a marketplace where you can buy handbags, eyewear and other luxury products directly from the manufacturers who work with the world’s best-known brands.

The marketplace is officially launching today. Italic is also announcing that it’s raised $13 million in funding from Comcast Ventures, Global Founders Capital, Index Ventures, Ludlow Ventures and others.

Founder and CEO Jeremy Cai previously co-founded the Y Combinator-backed hiring startup OnboardIQ (now known as Fountain.com), so this sounds like a pretty big change. However, Cai said he comes from a family in the manufacturing business, so he was acutely aware of the challenges facing manufacturers.

“The history of manufacturing has been about margins,” he said. “Even though they make the final product, they barely make a profit.”

Under the traditional model, it’s the brands that buy the goods from the manufacturers and make the real profit by marking up prices. So Cai saw an opportunity to remove the brands from the equation — Italic handles the consumer-facing side of the business, like product design and marketing, but it doesn’t actually buy anything. Instead, it operates more like a marketplace, connecting consumers and manufacturers.

Jeremy Cai

This also means the manufacturers are assuming more of the risk around the initial cost of creating the products, but Cai said that in return, they get much more of the upside. And apparently, Italic’s initial partners “jumped at the opportunity”: “They’ve been waiting for an option like this to get to get direct-to-consumer.”

Under the Italic model, the manufacturers remain anonymous, but the company says customers will be able to purchase handbags and leather goods from factories that work with Prada, Christian Louboutin and Givenchy; eyewear from a factory that works with EssilorLuxottica; bedding factories that work with Ritz Carlton and Four Seasons; and leather jackets from the same factory as J Brand.

Cai said this model also means consumers will pay significantly less than they would for luxury goods — most of the handbags will cost less than $300, the prescription eyewear will cost less than $100, leather jackets will be around $425 and bedding will be priced between $80 and $120. You’ll certainly be able to find cheaper products elsewhere, but the idea is sell to “the middle 40 percent” of consumers who are interested in high-quality products but want to be “a lot more frugal and smart with their dollars.”

And while Cai declined to specify the commission that Italic is charging manufacturers, he did say it differs from industry to industry, and added, “Our manufacturers make several multiples more than they make with their current brand clients.”

During our conversation, Cai repeatedly emphasized the difference between Italic and many of the new direct-to-consumer brands that have emerged online (such as Warby Parker and Casper).

Italic

When I wondered whether the marketplace vs. brand distinction will be lost on most consumers, he replied, “On the design side, we’re extremely intentional. We’re designing it with the messaging that we operate differently, you’re buying from a merchant who is an anonymous manufacturer. The sole intention is that when someone asks you, ‘Where did you get that handbag?’ you say, ‘I got this handbag from Italic, on Italic.’ The goal is to operate more like a retailer without any brands.”

At the same time, he acknowledged that Italic is itself a sort of brand, albeit with a unique business model.

“At the end of the day, it’s impossible to say we aren’t building a brand,” he said. “But the brand of Italic [should be that] we can consistently bring you high quality products at an incredible price point.”

Italic will operate on a membership model, which Cai said will allow the company to control demand, since quantities are limited. It also allows the company to solicit product feedback from members, and there could be other benefits like shipping discounts. Members who signup initially will get a year for free, but it will eventually cost $120 annually.

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

Pirate Studios raises $20M from Talis Capital for its ‘self-service’ tech-enabled music studios

Pirate Studios, the music technology company that operates fully automated and self-service 24 hour music studios, has secured $20 million. The investment was led by Talis Capital, the London-based VC family office.

Talis was already an existing backer of Pirate Studios, with Talis’ Matus Maar also named as a co-founder of the startup. Other investors include Eric Archambeau (Spotify investor and ex-partner at Benchmark and Wellington Partners), Bart Swanson of Horizons Ventures, and partners of Gaw Capital, the $20 billion Hong Kong-headquartered proptech fund.

The new funding will enable Pirate Studios to continue to expand across the U.K., Germany and the U.S., where it has been building what the startup describes as a community of musicians, DJs, producers and podcasters who need access to professional rehearsal, production and recording studios at affordable rates. The company charges as little as £4 per hour, depending on what kind of music studio space and facilities you book.

However, what really sets Pirate Studios apart from a lot of existing rehearsal rooms and music production and recording studios, is that the startup is employing a lot of tech to power the logistics around its service and, in theory, make it a lot more scalable. This includes online booking, 24 hour keycode access, and other IoT controls for managing facilities.

Perhaps even smarter, Pirate Studios offers “automated recording” and live streaming from many of its studios. This means that bands or DJs rehearsing in one of the company’s rooms can easily record their session via built in room mics and other inputs, and the studio’s cloud software will handle mixing and mastering afterwards. Likewise, rooms are set up to be able to video and audio stream sessions, too.

Both options tap into the YouTube, SoundCloud, and Spotify generation’s unstoppable appetite for more content from their favourite upcoming and established acts, as well as the dreaded music industry’s favourite new metric: how much social media reach an act has, which can in turn make or break a recording contract opportunity or the chance to get booked at larger, more lucrative live events.

I say all of the above as someone who was previously in quite a serious band and used to book rehearsal rooms on a regular basis. I’m also still in touch and collaborating with a number of gigging musicians and professional acts. However, during the last ten years, I’ve seen quite a few studios in London go out of business as property owners look to cash in, and even though there is something a little WeWork about Pirate Studios’ model (and being backed by relatively large amounts of VC cash at this stage) which makes me slightly uneasy, overall I’m very bullish on what the company offers.

Without a place to practice, hone your craft, in addition to somewhere to perform, rock ‘n’ roll really would be dead.

To that end, in just three years, Pirate has grown to 350 studios in 21 locations, including London, New York, and Berlin.

Cue statement from David Borrie, co-founder and CEO of Pirate Studios: “When we founded Pirate Studios our dream was to create innovative spaces to support emerging talent. We want to see music thrive and help musicians get their music out to their fans, through whatever route they think is most appropriate. We are building both the physical space to create, as well as the technology to record and share, that puts power back into the hands of musicians in a period when the digitisation of music continues to radically upset the old order of this industry”.

Discover the next messaging giant at Disrupt Berlin

Truecaller may already be a familiar name, but many of you probably don’t know that it’s slowly becoming a significant messaging app. That’s why I’m excited to announce that Truecaller co-founder and CEO Alan Mamedi will join us at TechCrunch Disrupt Berlin.

Truecaller first started as a call screening app. Some countries are more affected than others. But it’s clear that text and call spam is the most intrusive form of spam.

The Swedish company then leveraged this user base to quietly turn the app into a full-fledged messaging app with one focus in particular — India.

With the acquisition of Chillr, the company shows that it wants to recreate a sort of WeChat for India. The company launched payment features — Truecaller Pay lets you pay other Truecaller users as well as pay your bills.

Eventually, Truecaller wants to open up its platform to third-party services. Back in April, the company reported that it had 100 million daily active users.

If you’re impressed by Truecaller’s growth strategy, you should buy your ticket to Disrupt Berlin to listen to this discussion and many others. The conference will take place on November 29-30.

In addition to fireside chats and panels, like this one, new startups will participate in the Startup Battlefield Europe to win the highly coveted Battlefield cup.

Alan Mamedi

CEO & Co-founder, Truecaller

Alan Mamedi is the CEO and Co-founder of Truecaller. Truecaller is one of the leading communication apps in the world with services in messaging, payment, caller ID, spam detection, dialer functionalities, and has more than 300 million users globally. In this position, Alan focuses on product development and innovation, and charting the strategic roadmap for the company’s success. To date, Truecaller has raised 80 million USD from Sequoia Capital, Atomico, and Kleiner Perkins Caufield & Byers.

Loans marketplace Mintos scores €5M Series A and plans to launch a debit card

Mintos, the Latvian fintech that operates a global loans marketplace to let you invest in loans from various loan originators, has raised €5 million in Series A funding. Backing the startup once again is the Riga-based venture capital firm Grumpy Investments (previously known as Skillion Ventures). More noteworthy, the new capital will be used to launch a Mintos banking account and debit card, significantly expanding the company’s offering.

“Both banking account and the card in our opinion is a natural step in our journey of revolutionising financial services through technology and serving our investors and will nicely complement our current offering of investments in loans, and low-fee mid-market rate currency exchange,” Mintos co-founder and CEO Martins Sulte tells me. “This development also means that, theoretically, our investors won’t need their banks anymore”.

The Mintos banking account will act like any other IBAN account. You’ll be able to receive a salary into your Mintos account, use it to get paid by companies, or receive money from friends. And of course you’ll be able to transfer money out of your Mintos account, just like a regular bank account.

Sulte says the idea behind plans to launch a Mintos banking account, and the reason why the company is applying for a European e-money license, is to improve the overall Mintos experience. This includes making it quicker to access money generated by the loans you have invested in (which is held by Mintos on your behalf) and easier to invest on a regular basis.

“The card will allow investors to access the money they hold on the Mintos account instantly by paying at their local grocery shop or online or withdrawing money at ATMs; basically use the card like any other bank card,” he says. “They will no longer need to request a withdrawal from the platform to their bank account and wait up to two days for their money to arrive”.

The fintech startup claims a customer base of 87,000 investors from 71 different countries. In addition to launching the Mintos banking account, the company will use the additional funding for further geographical expansion, including Latin America, Africa, and Southeast Asia). It will also invest in acquiring more customers, and significantly expanding the size of its 60 person team. Notably, Mintos has been profitable since January 2017.

To the end, the fintech company says it has already facilitated more than €1 billion in investments in loans through its marketplace since launching in 2005. It says Investors in total have earned €26.7 million in interest through loans to individuals and businesses and have attained an average net return of nearly 12 percent.

Skincare startup Heyday raises $8M

Heyday, a startup aiming to make facials more affordable and personalized, announced today that it has raised $8 million in Series A funding.

I first wrote about the company a year ago, when it raised its $3 million seed round. At the time, co-founder and CEO Adam Ross said his goal was to offer something that sits between expensive, high-end facials and “random little places that are generally cheap in a bad way.” (Heyday pricing starts at $65 for a 30-minute session.)

The company currently operates six brick-and-mortar locations — it started in New York City but recently opened its first Los Angeles store. At the same time, Ross said the website was recently redesigned to offer a more “frictionless” booking experience, and the company also says it can use its “Facial Record” of customers to personalize the treatment and products.

Moving forward, the goal is to both open new physical locations (particularly in LA), but also to continue investing in the technology.

“It’s not an either/or — we see mutual growth and expansion across both channels,” Ross said. “The physical footprint is always going to be a key pillar of our brand strategy, but to win and service customers’ needs in this space, you need to be online.”

Ross also suggested that Heyday is changing the way customers look at facials. For one thing, 30 percent of its customers say they’ve never had a facial before. In addition, Ross said they’re starting to see facials not as an occasional luxury, but as a regular part of their wellness routine: “Most of our clients think about us like an Equinox membership.” And they should, he argued, especially since “your skin is your largest organ.”

The new funding was led by Fifth Wall Ventures, with participation from Lerer Hippeau, Brainchild Funding, M3 Ventures and CircleUp. Fifth Wall partner Kevin Campos is joining Heyday’s board of directors.

“We are in the midst of a significant shift in the retail industry, where marquee brands are moving from digitally native to an omnichannel model,” Campos said in the funding announcement. “We believe the team at Heyday is offering the best experience across both digital and physical touchpoints, and we are thrilled to partner with them to help navigate this complex process and position them for success.”

Okay, one final Form D note

Some more comments from readers on the changing culture around startups filing their Form Ds with the SEC, and then a short update on SoftBank and a bunch more article reviews.

We are experimenting with new content forms at TechCrunch. This is a rough draft of something new – provide your feedback directly to the authors: Danny at [email protected] or Arman at [email protected] if you like or hate something here.

Lawyers are pretty uniform that disclosure is no longer ideal

If you haven’t been following our obsession with Form Ds, be sure to read up on our original piece and follow up. The gist is that startups are increasingly foregoing filing a Form D with the SEC that provides details of their venture rounds like investment size and main investors in order to stay stealth longer. That has implications for journalists and the public, since we rely on these filings in many cases to know who is funding what in the Valley.

Morrison Foerster put together a good presentation two years ago that provides an overview of the different routes that startups can take in disclosing their rounds properly.

Traditionally, the vast majority of startups used Rule 506 for their securities, which mandates that a Form D be filed within 15 days of the first money of the round closing. These days though, more and more startups are opting to use Section 4(a)(2), which doesn’t require a Form D, but also doesn’t provide a “blue sky” exception to start securities laws, which means that startups have to file in relevant state jurisdictions and no longer have preemption from the SEC.

David Willbrand, who chairs the Early Stage & Emerging Company Practice at Thompson Hine LLP, read our original articles on Form Ds and explained by email that the practices around securities disclosures have indeed been changing at his firm and others:

We started pushing 4(a)(2) very hard when our clients kept getting “outed” thru the Form D and upset about it. In my experience, for 99% is the desire to remain in stealth mode, period.

[…]

When I started in 1996, Form Ds were paper, there was no internet, and no one looked. Now they are electronic and the media and blogs scrape daily and publish the information. It actually really is true disclosure! And it’s kind of ironic, right, which goes to your point – now that it’s working, these issuers don’t want it.

[…]

What I find is that the proverbial Series A is the brass ring, and issuers wants to call everything seed rounds (saving the title) until something chunky shows up, and stay below the radar too. So they pop out of the cake publicly for the first time with a big “Series A” that they build press around – and their first Form D.

Another piece of feedback we received was from Augie Rakow, the co-founder and managing partner of Atrium, which bills itself as a “better law firm for startups” that TechCrunch has covered a few times before. He wrote to us that in addition to the media concerns, startups also have to be aware of the broad cross-section of interested parties to Form Ds that hasn’t existed in the past:

Today, there is a bigger audience in terms of who cares about venture backed companies. Whether this spun off from the launch of the Facebook movie or the fact that over two billion people across the global have the internet at their fingertips via smartphones, people are connected and curious. The audience is not only larger but also encompasses more national and international interests. This means there are simply more eyes on trends, announcements, and intel on privately held companies whether they are media, investors, or your competitors. Companies that have a good reason to stay stealth may want to avoid attracting this attention by not making a public Form D filing.

For startups, the obvious advice is to just consult your attorney and consider the tradeoffs of having a very clean safe harbor versus more work around regulatory filings to stay stealthy.

But the real message here is for journalists. Form Ds are no longer common among seed-stage startups, and indeed, startup founders and venture investors have a lot of latitude in choosing how and when they file. You can no longer just watch the SEC’s EDGAR search platform and break stories anymore. Building up a human sourcing capability is the only way to get into those early investment rounds today.

Finally — and this is something that is hard to prove one way or the other — the lack of disclosure may also mean that the fears around seed financing dropping off a cliff may be at least a little bit unfounded. Eliot Brown at the Wall Street Journal reported just yesterday that the number of seed financings is down 40% according to PitchBook data. How much of that drop is because of changing macroeconomic conditions, versus changes in filing disclosures?

Quick follow up on SoftBank

Tokyo Stock Exchange. Photo by electravk via Getty Images

Last week, I also got obsessed with SoftBank. The company confirmed today that it intends to move forward with the IPO of its Japanese mobile telecom unit, according to WSJ and many other sources. The company is targeting more than $20 billion in proceeds, and its overallotment could drive that above $25 billion, or roughly the level of Alibaba’s record IPO haul.

One interesting note from Taiga Uranaka at Reuters on the public issue is that everyday investors will likely play an outsized role in the IPO process:

Yet SoftBank’s brand name is still likely to draw retail investors long accustomed to using SoftBank’s phone and internet services. Many still see CEO Son as a tech visionary who challenged entrenched rivals NTT DoCoMo Inc ( 9437.T ) and KDDI, and brought Apple Inc’s ( AAPL.O ) iPhone to Japan.

Japanese households are commonly seen as an attractive target in IPOs with their 1,829 trillion yen in financial assets, even if they are traditionally risk-averse with over 50 percent of assets in cash and deposits.

More than 80 percent of the shares will be offered to domestic retail investors, a person with knowledge of the matter told Reuters.

Pavel Alpeyev at Bloomberg noted that “SoftBank is looking to tempt investors with a dividend payout ratio of about 85 percent of net income, according to the filing. Based on net income in the last fiscal year, that would work out to an almost 5 percent yield at the indicated IPO price.” A higher dividend ratio is particularly attractive to retired individual investors.

Despite SoftBank’s horrifying levels of debt, Japanese consumers may well save the company from itself and allow it to effectively jump start its balance sheet yet again. Complemented with a potential Vision Fund II, Masayoshi Son’s vision for a completely transformed SoftBank seems waiting for him in the cards.

Notes on Articles

Tech C.E.O.s Are in Love With Their Principal Doomsayer – Nellie Bowles writes a feature on Yuval Noah Harari, the noted philosopher and popular author of Sapiens. Bowles investigates the paradoxical popularity of Harari, who sees technology as creating a permanent “useless class” and criticizes Silicon Valley with his now enduring popularity in the region. Interesting personal details on the somewhat reclusive Israeli, but ultimately the question of the paradox remains sadly mostly unanswered. (2,800 words)

Why Doctors Hate Their Computers – Atul Gawande discusses learning and using Epic, the dominant electronic medical records software platform, and discovers the challenges of building static software for the complex adaptive system that is health care. His observations of the challenges of software engineering will be well-known to anyone who has read Fred Brooks, but the piece does an excellent job of exploring the balancing act between the needs of technocratic systems and the human design needed to make messy and complicated professions work. Worth a read. (8,900 words)

Picking flowers, making honey: The Chinese military’s collaboration with foreign universities – An excellent study by Alex Joske at the Australia Strategic Policy Institute on the hundreds of military scientists from China who use foreign academic exchanges as a means of information acquisition for critical scientific and engineering knowledge, including in the United States. China’s government under Xi Jinping has made indigenous technology development a chief domestic priority, and the U.S. innovation economy is encouraged to increasingly guard its intellectual property. (6,500 words)

The Digital Deciders – New America report by Robert Morgus who investigates the fracturing of the internet, which I have written about at some length. Morgus finds that a small group of countries (the “digital deciders”) will determine whether the internet continues to be open or whether nationalist interests will close it off. Let’s all hope that Iraq believes in freedom of expression and not Chinese-style surveillance. Worth a skim. (45 page report, but with prodigious tables)

Reading Docket

BlaBlaCar to acquire Ouibus and offer bus service

French startup BlaBlaCar is announcing plans to acquire Ouibus, the bus division of France’s national railway company SNCF. For the first time, BlaBlaCar is moving beyond carpooling and plans to offer both long-distance carpooling rides and bus rides.

BlaBlaCar already ran a test with Ouibus for the past six months on popular corridors. It looks like both companies are happy with this test as SNCF is willing to let BlaBlaCar run Ouibus from now on.

As part of this deal, BlaBlaCar is announcing a new $114 million investment (€101 million) from SNCF and existing BlaBlaCar investors. I’d guess that this isn’t just cash but probably cash and shares as part of the move with SNCF. Yes, you read that correctly, SNCF is now an investor in BlaBlaCar.

Ouibus has transported over 12 million passengers over the past few years in France and Europe. Many thoughts that buses would hurt BlaBlaCar over the long run. By offering buses on BlaBlaCar directly, the company can capitalize on its brand and huge community to counter that trend. BlaBlaCar is now a marketplace for road travel.

BlaBlaCar is taking a risk as Ouibus has been relentlessly losing money. Just like other bus companies, Ouibus relies heavily on contractors, which means that BlaBlaCar could quickly adjust the offering. It’ll also depend on product integrations on BlaBlaCar, OUI.sncf and other platforms.

BlaBlaCar currently has 65 million users in 22 countries and is about to reach profitability. And you can expect to find ride-sharing offers on OUI.sncf in the coming months.