Tencent AI Lab loses key executive

Chinese internet giant Tencent just lost a leading artificial intelligence figure. Zhang Tong, who previously worked at Yahoo, IBM and Baidu, has stepped down after directing Tencent’s AI Lab for nearly two years.

The scientist will return to academia and continue research in the AI field, Tencent confirmed with TechCrunch on Thursday, adding that it hasn’t appointed a successor.

”We are grateful for [Zhang]’s contributions to Tencent AI Lab and continue to explore fundamental and applied research that can make the benefits of AI accessible to everyone, everywhere,” Tencent said in a statement.

Zhang’s departure is the latest in a handful of top AI scientists quitting large Chinese tech firms. In 2017, search giant Baidu lost its chief scientist Andrew Ng who started Google’s deep learning initiative. Last year, the firm suffered another blow as renown AI expert Lu Qi resigned as chief operating officer and moved onto spearheading Y Combinator’s newly minted China program.

Talent is key to a tech firm’s AI endeavor, for a revered leader not only inspires employees but also boosts investor confidence. Baidu stocks plunged following Lu’s exit as markets weighed on the talent gap inside the company, which had poured resources into autonomous driving, smart speakers among other AI efforts. Tencent itself had poached Zhang from Baidu’s Big Data Lab to ramp up its own AI division.

Tencent is best known for its billion-user WeChat messenger and being the world’s largest video game publisher, but it’s also been doubling down on machine learning R&D to serve users and enterprise clients. It launched the AI Lab in April 2016 and opened its first U.S. research center in Seattle a year later to work on speech recognition and natural language processing (NLP).

The AI Lab dives into machine learning, computer vision, speech recognition and NLP. Meanwhile, the social and entertainment giant also works to put fundamental research to practical use, applying AI to its key businesses — content, social, online games and cloud computing.

One beneficiary has been WeChat, which applies NLP to enable seamless dialogues between users speaking different languages. Another case in point is Tencent’s news aggregator Tiantian Kuaibao, which deploys deep learning to recommend content based on readers’ past preference. Kuaibao is a direct competitor to Jinri Toutiao, the popular AI-powered news app run by TikTok’s parent company ByteDance.

To date, Tencent’s AI Lab has a team of 70 research scientists and 300 engineers, according to information on its website. Tencent operates another AI initiative called the Youtu Lab, which focuses on image understanding, face recognition, audio recognition and optical character recognition. While its sister AI Lab falls under Tencent’s research-focus Technology Engineering Group, Youtu is the brainchild of the Cloud & Smart Industries Group, a new unit that Tencent set up during its major organizational reshuffle in October to place more emphasis on enterprise businesses.

LemonBox, which brings US vitamins to Chinese consumers, raises $2M

LemonBox, a Chinese e-commerce startup that imports vitamins and health products from the US, has raised $2 million to develop its business.

The company graduated from Y Combinator’s most recent program in the U.S. and, fuelled by the demo day, it has pulled in the new capital from 10 investors which include Partech, Tekton Ventures, Cathexis Ventures, Scrum Ventures and 122 West Ventures.

LemonBox started when co-founder and CEO Derek Weng, a former employee at Walmart in the U.S, saw an opportunity to organize the common practice of bringing health products back in China. Any Mainland Chinese person who has lived or even just visited the U.S. will be familiar with such requests from family and friends, and LemonBox aims to make it possible for anyone in China to get U.S-quality products without relying on a mule.

The service is primarily a WeChat app — which taps into China’s ubiquitous messaging platform — and a website, although Weng told TechCrunch in an interview this week that the company is contemplating a standalone app of its own. The benefit of that, beyond a potentially more engaging customer experience, could be to broaden LemonBox’s product selection and use data to offer a more customized selection of products. Related to that, LemonBox said it hopes to work with health and fitness-related services in the future to gather data, with permission, to help refine the personal approach.

LemonBox’s team has now grown to 20 people, with 12 full-time staff and 8 interns, and Weng said that the new funding will also go towards increased marketing, improvements to the WeChat app and upgrading the company’s supply chain. Business, he added, is growing at 35 percent per week as LemonBox has adopted a personal approach to its packaging, much like Amazon-owned PillPack.

“This is the first time people in China have ever seen this level of customization for their vitamins,” Weng told TechCrunch.

Members of the LemonBox team with Qi Lu, who heads up Y Combinator’s China business

Qi Lu, the former Microsoft and Baidu executive who leads YC’s new China unit, said he is “bullish” about the business.

“What LemonBox offers resonates with me and is serving a clear China market needs. Personally, I travel a lot between China and the U.S, and I often was asked by my relatives to help purchase and carry them similar products like vitamins,” he said in a prepared statement.

“More importantly, what LemonBox can do is to build an initial core user base and a growing brand. Over time, by serving their users well, it can reach and engage more users who want to better take care of their broader nutrition needs, use more data and take advantage of increasingly stronger AI technologies to customers and personalize, and become an essential service for more and more users and customers in China,” Lu added.

Distinguished VCs back wholesale marketplace Faire with $100M at a $535M valuation

A slew of venture capitalists known for high-profile exits — Kirsten Green of Forerunner Ventures, Keith Rabois of Khosla Ventures, Alfred Lin of Sequoia Capital and Alex Taussig of Lightspeed Venture Partners — have invested in Faire (formerly known as Indigo Fair), a 2-year-old wholesale marketplace for artisanal products.

A quick glance at Faire suggests it’s a combination of Pinterest and Etsy, complete with trendy, pastel stationery, soap, baby products and more, all made by independent artisans and sold to retailers. Faire has today announced a $100 million fundraise across two financing rounds: a $40 million Series B led by Taussig at Lightspeed and a $60 million Series C led by Y Combinator’s Continuity fund. New investors Founders Fund, the venture firm founded by Peter Thiel, and DST Global also participated. The business has previously brought in a total of $16 million.

The latest financing values Faire at $535 million, according to a source familiar with the deal.

If you’re feeling a little bit of déjà vu, that’s because a similar startup also raised a sizeable round of venture capital funding, announced today. That’s Minted . The 10-year-old company, best known for its wide assortment of wedding invitations and stationery, raised $208 million led by Permira, with participation from T. Rowe Price. Though Minted is first and foremost a consumer-facing marketplace, it plans to double down on its wholesale business with its latest infusion of capital, setting it up to be among Faire’s biggest competitors.

Like Minted, Faire leverages artificial intelligence and predictive analytics to forecast which products will fly off its virtual shelves in order to to source and manage inventory as efficiently as possible. The approach appears to be working; Faire says it has 15,000 retailers actively purchasing from its platform — a 3,140 percent year-over-year increase. It’s garnered $100 million in run rate sales and has expanded its community of artists 445 percent YoY, to 2,000.

The company, headquartered in San Francisco, with offices in Ontario and Waterloo, was founded by three former Square employees: chief executive officer Max Rhodes, who was product manager on a variety of strategic initiatives, including Square Capital and Square Cash; chief data officer Daniele Perito, who led risk and security for Square Cash; and chief technology officer Marcelo Cortes, a former engineering lead for Square Cash.

“Our mission at Faire is to empower entrepreneurs to chase their dreams,” Rhodes wrote in a blog post this morning. “We believe entrepreneurship is a calling. Starting a business provides a level of autonomy and fulfillment that’s become difficult to find for many elsewhere in the economy. With this in mind, we built Faire to help entrepreneurs on both sides of our marketplace succeed.”

Phiar raises $3 million for an AR navigation app for drivers

Augmented reality is a very buzzy space, but the fundamental technologies underpinning it are pushing boundaries across a lot of other verticals. Tech like machine learning, object recognition and visual mapping tech are the pillars of plenty of new ventures, enabling there to be companies that thrive in the overlap.

Phiar (pronounced fire) is building an augmented reality navigation app for drivers, but the same tech it’s built to help drivers easily pinpoint where they need to make their next turn also helps them build up rich mapping data that can give partners like autonomous car startups the high-quality data they so deeply need.

The SF-based company has just closed a $3 million seed deal led by Norwest Venture Partners and The Venture Reality Fund. Other investors include Anorak Ventures, Mayfield Fund, Zeno Ventures, Cross Culture Ventures, GFR Fund, Y Combinator, Innolinks Ventures and Half Court Ventures.

While phone and headset-based AR have received a lot of the broader media attention, the automotive industry is a central focus for a lot of augmented reality startups attracted by the proposition of a mobile environment that can showcase and integrate bulky tech. There have certainly been quite a few heads-up display startups looking to take advantage of a car’s windshield real estate, and prior to joining Y Combinator, Phiar was actually looking to build some of this hardware themselves before deciding on a more software-focused route for the company.

Unlike a lot of phone AR apps built on top of Apple or Google’s developers platforms, Phiar’s use case doesn’t quite work with the limitations of these systems which understandably weren’t built with the idea a user would be moving at 60 miles per hour. As a result the company has had to build tech to greater understand the geometry of a quickly updating world through a single camera while ensuring that it’s not just some ugly directional overlay, using techniques like real-time occlusion to ensure that the digital and physical worlds interact nicely.

While the startup’s big consumer-facing play is the free AR mobile app, Phiar is really just an augmented reality company on the surface, its real sell is what it can do with the data and insights gathered from an always-on dash camera. The same object recognition tech that will allow the app to seamlessly toss AR animations onto the scene in front of you is also analyzing that environment and uploading metadata to build up its mapping insights.

In addition, the app saves up to 30 minutes of footage from each ride, offering users the utility of a free dash cam in case they get in an accident and need video for an insurance claim, while providing some rich anonymized data for the company to build up high quality mapping data it can sell to partners.

This kind of data is incredibly useful to companies building autonomous car tech, ride sharing companies and a lot of entities that are interested in access to quickly-updating map data. The challenge for Phiar will be building up enough users so that their map data is as rich as their partners will demand.

CEO Chen-Ping Yu says that the startup is in talks with partners in the automative space to integrate their tech and is also working to bring what they’ve built to companies in the ride-sharing space. Yu says the company plans to release their consumer app in mid-2019.

New U.S. report says that climate change could cost nearly $500 billion per year by 2090

A new report from the U.S. government on the impacts of climate change on society indicates that unless action is taken, climatological events could cost the country nearly half a trillion dollars annually by 2090.

The National Climate Assessment is a congressionally mandated report on the impacts of climate change and was culled from the work of 300 authors in a dozen federal agencies. The 1,000 page report covers the effect of climate change on agriculture, labor, geography, and health in the United States.

It’s the second volume of a report intended to give federal policymakers information on how global warming will impact the United States. 

It also comes at a time when the current administration is doing everything to refute the mounting evidence coming from inside its own agencies and shirk its national and international commitments to mitigating the effects of global climate change.

In the absence of more significant global mitigation efforts, climate change is projected to impose substantial damages on the U.S. economy, human health, and the environment. Under scenarios with high emissions and limited or no adaptation, annual losses in some sectors are estimated to grow to hundreds of billions of dollars by the end of the century. It is very likely that some physical and ecological impacts will be irreversible for thousands of years, while others will be permanent.

There is hope that the world can still change course and reverse the effects associated with climate change. In fact, the study says that near-term mitigation efforts should begin showing results by the middle of the century. It’ll let scientists know what steps they’re taking are working and what aren’t — ideally.

Many climate change impacts and associated economic damages in the United States can be substantially reduced over the course of the 21st century through global-scale reductions in greenhouse gas emissions, though the magnitude and timing of avoided risks vary by sector and region. The effect of near-term emissions mitigation on reducing risks is expected to become apparent by mid-century and grow substantially thereafter.

But for the scientists that collected the data and assembled the report, the evidence of the human impact of climate change is now incontrovertible.

Observations from around the world show the widespread effects of increasing greenhouse gas concentrations on Earth’s climate. High temperature extremes and heavy precipitation events are increasing. Glaciers and snow cover are shrinking, and sea ice is retreating. Seas are warming, rising, and becoming more acidic, and marine species are moving to new locations toward cooler waters. Flooding is becoming more frequent along the U.S. coastline. Growing seasons are lengthening, and wildfires are increasing.

While the federal government may not be willing to take action to curb the emissions that contribute to global warming, states, led by California, increasingly are developing legislation to mitigate or reduce carbon emissions and to create adaptation strategies for dealing with a warming climate.

Venture capitalists also are beginning to commit significant capital to technologies focused on alternative energy generation, energy storage, emissions reduction, and energy conservation that all fall under the category of sustainable solutions.

Indeed, the public offering for the vegetarian consumer food company, Beyond Meat, shows that there’s a growing market for investments in companies that promote a more sustainable lifestyle.

And early stage accelerator programs like Y Combinator are also getting into the game, calling for startups that are developing technologies to reduce the emissions that are contributing to global warming.

The new report from the government paints a dire picture for the future if nothing is done, but, as the investment and technology community once again mobilizes to develop potential solutions, there’s a chance that things may not be completely hopeless yet.

The critical step will be if the U.S. government will heed the advice of its own scientists, and take steps to encourage greater action to what is increasingly looking like the biggest threat to human welfare.

All I want for Christmas are these kitschy VC trading cards

Just kidding. Please don’t buy me these collectible trading cards featuring Silicon Valley venture capitalists for Christmas. But if you are in the market for a gift for a VC — or aspiring VC — they’d probably appreciate a set.

[gallery ids="1744120,1744121,1744122"]

Yes, they really exist! TouchBase is selling a line of the VC trading cards, featuring Y Combinator co-founder Paul Graham, Andreessen Horowitz co-founder Marc Andreessen, Kleiner Perkins partner Mary Meeker and Benchmark general partner Bill Gurley.

Someone may want to tell TouchBase that Meeker is leaving Kleiner to start her own fund.

A pack of five cards will cost you $60. Each pack, the company writes, comes with a mix of late-stage VCs, angel and seed investors, as well as an advisor or two.

TouchBase doesn’t say who else is featured on the cards, so you’ll have to buy a pack, or two, or three to find out.

The cards begin shipping this month.

Electric scooter startup Grin merges with Brazil-based Ride

Grin, the Mexico City-based electric scooter company backed by Y Combinator, is merging with São Paulo-based Ride to further the company’s expansion across Latin America. This comes shortly after Grin raised a ~$45 million Series A round.

Currently, Grin only operates in Mexico City, but it has plans to expand to other cities throughout Latin America. The merger with Ride, which already operates in São Paulo, will enable Grin to do this as early as next week, Grin co-founder Sergio Romo told TechCrunch.

As part of the merger, Ride will operate under the Grin brand in Brazil and the Ride team will be in charge of all of Grin’s operations in Brazil. Ride is currently the only shared electric scooter operator in all of Brazil, but that will soon change when Yellow deploys its scooters. Last month, Yellow raised a $63 million Series A round for its bike- and scooter-share company.

Grin has also partnered with Colombia-based Rappi, an on-demand delivery startup that raised $200 million back in August. This partnership, which will enable Rappi customers to unlock Grin scooters through the Rappi app, will help boost Grin’s expansion across Latin America, Romo said.

While LATAM is a huge market, Grin ultimately envisions operating its pick-up and drop-off scooter model worldwide.

“We definitely want to be global,” Romo said. “I don’t think you can become a ten-billion-dollar company if you don’t go global. I think LATAM might actually be the best market — there’s huge density and a huge market combined with Europe. And who knows, we might pop up in an American city soon if we do a good job. But this is definitely in our heads. This is engineered to be a global play.”

Lessons from building Brex into a billion-dollar startup

When I think about my experience as an immigrant and entrepreneur in Silicon Valley, I remember growing up in Brazil and how we saw tech founders and CEOs as kings. We imagined what it would be like to assume the throne.

But these weren’t just any kings. Silicon Valley was the kingdom of nerds and underdogs. We identified with these guys, they were just like us. We were fed the myth of a Silicon Valley meritocracy, and the illusion that all you needed was ambition, determination, and a good idea to meet the right person and get funded.

What we didn’t understand was that this myth was not completely rooted in reality. Not everyone has access to the American Dream, and those who do have a track record of success before they’re given their moment to prove, or in our case, pitch ourselves.

Part of this disconnect was cultural. In Brazil, when I began my first startup, Pagar.me, a payment processing company, my co-founder Pedro Franceschi and I were two 16 year-old kids who learned how to code before we were ten. While it was hard for people to take us seriously initially—I mean, would you quit your job to work for two 16 year- olds? Being so young also worked to our advantage; it revealed that we were passionate, driven, and invested in tech at an age that we didn’t need to be.

Once we got our start-up off the ground, our employees were as invested in us as we were invested in them and the company. That’s because in Brazil, most of us grew up with parents that stayed their whole lives at the same company. You grew with the company, and that’s the approach we took when it came to hiring for our first company: who did we see sharing our same vision and growing with us?

Coming to the United States was almost a completely opposite experience. The barrier of entry was much higher. You have to go to the right college, graduate from right incubator programs, develop relationships with the right VCs, and have at least one successful startup under your belt before anyone would even consider booking a meeting with you.

Pedro and I had to carefully position ourselves before we even got to the Valley. When we finally did get to the U.S., we had already launched a successful startup and we were accepted to Stanford. Soon after, we were accepted by Y-Combinator, and that’s where we built relationships with the key players that would open up the doors for future meetings.

With our current startup, Brex,  we found that there weren’t just cultural differences at play, but different approaches we needed to take in order for our business to be successful. For example, in Brazil, we bootstrapped our first startup, and as a result, we had to find our product-market fit immediately. When you are so cash-constrained, it also limits how much you can build your company, and you think in terms of short-term wins instead of sustained growth. Your growth strategy is confined and you’re constantly reacting to your immediate client demands.

In the U.S., VCs and angel-investors aren’t interested in the short-term. They’re interested in long-term growth and how you are going to deliver 10x profits over a ten year period. Our strategy could no longer be: plan as we go and grow with our customer. Instead, we needed to deliver a roadmap, and when that roadmap changed or evolved, communicate those changes and adopt a culture of transparency.   

Additionally, we learned how difficult it is to find and retain  talent in the U.S.; it can feel like a Sisyphean task. Millennials for example, spend less than two years on average at a job, and if you spend six years or more at the same company, recruiters will actually ask you: “why?” So how can you build a company for the long-term in an environment where employees are not personally invested in the growth of your company?

We also learned that many successful tech startups offer stock options to their early employees, but as the company evolves and changes over time, those same stock options are not offered to future employees. This creates the exact opposite of a meritocracy. Why would a new employee work harder, longer, and bring more to the table if you are not going to be compensated for it?

Instead of using this broken model, we have invested in paying our team higher wages upfront, and based on performance, we award our team members with stock options. We want to be a company that people are proud of working at longterm, and we want to create a culture that is merit-based.

While some of the myths that we first believed in about Silicon Valley are now laughable looking back, they were also really instructional as to how we wanted to build our company and what pitfalls we wanted to avoid.

Even though nearly half of tech startups are founded by immigrant entrepreneurs, we have a cultural learning curve in order to have the opportunity to be “the next unicorn.” And maybe that’s the point, we’re experiencing a moment in time during which myths and unicorns no longer serve us, and what we need instead is the background, experience, and vision to create a company that is worth the hype.

YC-grad Papa raises $2.4M for its ‘grandkids-on-demand’ service

One of the latest additions to the on-demand economy is Papa, a mobile app that connects college students with adults over 60 in need of support and companionship.

The recent graduate of Y Combinator’s accelerator program has raised a $2.4 million round of funding to expand its service throughout Florida and to five additional states next year, beginning with Pennsylvania. Initialized Capital led the round, with participation from Sound Ventures.

Headquartered in Miami, the startup was founded last year by chief executive officer Andrew Parker. The idea came to him while he was juggling a full-time job at a startup and caring for his grandfather, who had early onset dementia.

“I’ve always been a connector of humans,” Parker, the former vice president of health systems at telehealth company MDLIVE, told TechCrunch. “I’ve always naturally felt comfortable with all walks of life and all age groups and have just felt human connection is really critical.”

Seniors can request a “Papa Pal” using the company’s mobile app, desktop site or by phone. The pals can pick them up and take them out for an activity or have them over to play a game, complete household chores, teach them how to use social media and other technology or simply to chat. A senior is matched with a student, who must complete a “rigorous” background check, in as little as 30 seconds.

Parker says there are 600 students working with Papa an average of 25 hours per month.

“We’ve been fortunate that this is something the students really want to be part of,” he said. “They aren’t doing this for a couple extra dollars. They are doing this to help the community.”

The service costs seniors $20 per hour, $12 of which is paid to the students and $8 is returned to Papa. It’s not a subscription-based service, but seniors can pay for a premium option that lets them choose between three Papa Pals instead of being randomly paired with one of the several hundred options. The students do not provide any personal care, like bathing or grooming. And they are not a pick-up and drop-off service, like Uber or Lyft.

“We believe the Papa team has found a unique way to combat loneliness and depression in older adults,” said Alexis Ohanian, co-founder and managing partner of Initialized Capital, in a statement. “The experience that Papa Pals bring their members make it seem like they are part of a family.”

In addition to expanding to new markets, Papa is in the process of partnering with insurance companies with a goal of allowing seniors to pay for some of its services through their Medicare plans.

“Loneliness is a crisis. It’s a disease. It’s killing people prematurely,” Parker said. “We are providing a really massive impact to these people’s lives.”

Freight trucking startup Shipwell gets a $10 million boost

Shipwell, a startup pitching a marketplace for domestic ground shipping and fleet and cargo management services for freight trucking companies, has raised $10 million in a new round of funding.

A booming American economy coupled with failing infrastructure and a low-margin business reluctant to adopt new technologies have put stress on domestic logistics companies in the $900 billion market for U.S. trucking services.

Shipwell combines a marketplace for shippers to connect with freight companies and online tools to manage those shipments. In effect, the company is pitching a version of the proprietary logistics management toolkit that has made Amazon so successful, to any retailer or outlet. 

We coordinate the freight, we pay the truckers, we help optimize the fleets,” says Shipwell president and co-founder, Jason Traff. 

Those services — and the company’s growing business among small and medium-sized suppliers to the construction industry — brought the Austin-based company to the attention of Fifth Wall Ventures, the Los Angeles based investment firm whose limited partners are among the biggest construction companies in the world.

For Fifth Wall the opportunity was clear. “Shipwell’s full-service, digitized brokerage platform can streamline the way many of our Anchor LPs and portfolio companies approach large-scale freight shipping,” the firm’s principal — and newest Shipwell board member — Vik Chawla wrote in a blog post announcing its most recent deal.

Fifth Wall led the company’s Series A round, which also included the new investor Global Founders Capital and previous investors First Round Capital, Base 10 Ventures, Capital Theory and Village Global .

The company’s business isn’t for big shippers that deal with thousands of shipments per-day, but rather the small and medium sized businesses that spend $100 million or less per-year on freight. And the small-fleet shipping companies that make up the bulk of the industry.

“In addition to the obvious use case for Shipwell customers who own warehousing, landlords can use Shipwell to become effective facilitators for their tenants,” according to Chawla. “Some Anchor LPs [the limited partners that provide capital for Fifth Wall to invest] are already engaged in this shipping ecosystem on behalf of their tenants, while others act as transport hubs. Beyond these, however, there are easy tie-ins within a number of key categories of Fifth Wall Anchors [sic] that regularly ship or receive freight—developers, of course, but also retail, office, homebuilding anchors.”

“We focus on the longer tail. If you are doing $50 million in freight per-year then you’re doing dozens of shipments per week,” said Traff. “Most of our freight is less than a truckload or a full truckload freight and it’s more long-haul.”

It hasn’t been a straight road for Traff and his co-founder Gregory Price. Traff originally got the startup bug in Asia, where he launched a company that would sell low-cost copies of old masters paintings. When he sold that business he moved back to the U.S. and pitched an idea to Y Combinator that eventually became Leaky, a car insurance company.

When Leaky shut down and its business was acquired by Navion in 2013, Traff moved to Austin to figure out his next move.I t was there that he ran into a fellow Massachusetts Institute of Technology alumnus named Greg Price and the two began hatching schemes for the company that would become Shipwell.

The two men began planning the business in 2016 and only launched the service in the beginning of this year. “Supply chains were very complex and there was a lot of building to do,” Traff said. 

Shipwell makes money by charging a commission on freight services and fees for its freight management software platform.

Ultimately this could create a new model to unify a fragmented industry. “This connective approach makes all of the difference in an industry with so many small companies at play,” Chawla wrote. “A surprising 89% of freight trucks in the U.S. are owned by carriers with fewer than five total trucks, and 99% of freight carriers possess fewer than 10 total trucks in their fleet. Despite the big business of freight shipping in the U.S., it’s actually a fragmented market of small businesses.”