As China shakes up regulations, tech companies suffer

The Exchange spent a little time on Friday ruminating on the impact of then-rumored regulation in China targeting its edtech sector. News that the Chinese government intended to crack down further on the education technology market hit shares of public, China-based edtech companies. It was a mess.

Then over the weekend, the rumors became reality, and the impact is still being felt today in the global markets.

But there’s more. China is also bringing new regulatory pressure on food-delivery companies and Tencent Music. More precisely, we’ve seen successive market-dynamic-changing moves from the Chinese government in the last few days, coming as 2021 had already proved to be a turbulent environment for China-based technology companies.


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Today we have to do a little bit of work to understand precisely what is going on with the various regulatory changes. Why? Because the Chinese venture capital market is a key player in the global venture scene. And Chinese startups have gone public on both Chinese, Hong Kong and U.S. exchanges; there’s a lot of capital tied up in companies impacted today — and possibly tomorrow.

For startups, the regulatory changes aren’t a death blow; indeed, many Chinese tech startups won’t be affected by what we’ve seen thus far. And upstart tech companies in sectors less likely to be targeted by central authorities may become more attractive to investors than they were before the regulatory onslaught kicked off. But on the whole, it feels like the risk profile of doing business in China has risen. That could curb the pace at which capital is invested, cut valuations and lower interest in the Chinese startup market from private-market investors able to invest globally.

Let’s parse what’s changed, examine market reactions and then consider what could be next. We want to better understand today’s Chinese startup market and what its new form could mean for existing players and future performance.

Changes

The edtech clampdown did not start last week. China’s edtech sector started to rack up penalties and fines in June, which led to what the Asia Times called “warning bells” in the sector. From there, things went from penalties to punishing regulatory changes.

Solarisbank raises $224M at a $1.65B valuation to acquire Contis and expand its API-based embedded banking tech in Europe

Embedded finance — the process by which some of the more complicated, but also commoditized, aspects of financial services are built and wrapped in an API for anyone else to implement in their own products for end users — has become a huge cornerstone of how fintech is built today. Now, one of the earlier and bigger movers in the space is announcing a major round of growth funding to build out its own.

Solarisbank, a Berlin startup that provides a range of financial services by way of some 180 APIs that others use to build end user-facing products — they include basic banking and card services; lending; payments; and know your customer services — has raised €190 million ($224 million) in a Series D that values the company at €1.4 billion ($1.65 billion), and announced the acquisition of one of its competitors in the space, Contis.

Decisive Capital Management, a Swiss firm that has also backed insurtech startup Wefox, led the round with Pathway Capital Management, CNP (Groupe Frère) and Ilavska Vuillermoz Capital; and previous backers yabeo Capital, BBVA, Vulcan Capital and HV Capital, also participating.

The round is coming about a year after its last round of $67.5 million, but as a sign of the times, what is perhaps more notable is that the company’s valuation has nearly quintupled since then (it was $360 million in June 2020).

This latest round is going to be used for expansion. CEO Roland Folz said in an interview that the Contis acquisition — which underscores a wider consolidation trend in fintech — will help it better cover all of Europe, and start to make its first early moves into Asia. (No plans right now to add the U.S. to that list, he added.)

He added that the combined entity will be making revenues in the “triple-digit euros” — that is, hundreds of millions; it posted net revenues of €35 million in 2020 — and will be in a position to go public next year, if it chooses to.

In the meantime, it’s hoping to double down on the huge shift we’re seeing in the world of financial services, where consumers and businesses are opting for newer and more modern banking experiences as they migrate away from slower, less flexible and sometimes more expensive incumbents.

“Europe is an ideal space for us to work in,” said Folz. “We believe that in Europe there are roughly 800 million bank accounts and some 400 million of those will change ‘ownership’, where traditional banks will be swapped out with non-traditional banks… If we look at the 5-10 year perspective, we want to make sure a  significant proportion of those accounts will be on our platform.”

SolarisBank counts companies like Trade Republic, American Express, BP, Samsung and Vivid among its customers, powering basic banking, know-your-customer checks, lending, digital wallet and other services related to finance for companies that can in turn focus their energies on building more user-friendly customer experiences or other services altogether. It’s been growing at a rate of 40%-60% annually, Folz added, and it has some 50 “partners” (as it calls its customers) in all, covering some 2 million customer accounts.

Contis, meanwhile, is a substantial business in its own right, with some 200 customers covering more than 2 million users and €9.9 billion in transactions annually.

Solarisbank was founded five years ago, in 2016, out of the Berlin-based startup incubator and investor finleap, with Ramin Niroumand, a founder of finleap, essentially the “founder” of Solarisbank too. (Currently and more more formally, he is also chairman of its advisory board.)

Embedded finance is all the rage at the moment, and a number of startups today are providing fintech-as-a-service, or banking-as-a-service tools to third parties. Other notable names in the same segment of the market include Railsbank (which also announced funding earlier this month),  Rapyd, which also raised a big round at a $2.5 billion valuation earlier this year; Unit, another banking-as-a-service startup picking up funding and growing; FintechOS, which really does what its name says (and is also currently raising $$); and the startup 10x, which ironically is targeting incumbents.

Solarisbank believes its particular approach to this gap in the market gives it more flexibility and mileage: unlike its rivals, the bulked-up Solarisbank will have both banking licenses for Europe, and e-money licenses (in Lithuania and UK), with its tech stack living on AWS, giving it an opportunity to build more services, to scale, and to keep better margins in the process — a critical detail in what is essentially an economy of scale play.

It also believes that its own diversity in its customer base — covering not just obvious fintech companies like neobanks, but a variety of others, like Samsung, that are building financial services (in its case, a digital wallet) — gives it more staying power, to cater to whatever segment of that base is growing most at any given time. As Niroumand points out, around 70% of its revenues some from some 30% of its customers. “It’s quite a diverse clientele we are serving,” he said.

The company is currently active in Germany, France, Italy and Spain but says it can cover the whole EEA with passporting.

“With the combined entity, we are looking at numbers that no one else is even close to remotely,” added Folz.

The market opportunity, combined with Solarisbank’s approach and its current customer base, are what attracted investors.

“We are experiencing a paradigm shift in banking, where customers expect financial services to adapt to their specific needs,” says Thomas Schlytter-Henrichen, a partner at Decisive Capital Management, in a statement. “Technology is the key to enable this transformation and Solarisbank’s powerful Banking-as-a-Service platform positions it perfectly for this new banking era. We are both inspired by the team and thrilled to work together on its mission.”

The Station: Rivian adds to its EV war chest, Sec. Buttigieg is coming to Disrupt and Argo preps to launch with Lyft

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every Sunday in your inbox.

Hello frens and readers. Welcome to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B.

Hey so maybe y’all missed it, but we shared some exciting news this week.

Transportation Secretary Pete Buttigieg will join us for a fireside chat at Disrupt 2021, where we plan to dig into some of the thorniest questions around transportation and how to ensure that moving from Point A to Point B is a universal right, not a privilege. The upshot: If it involves technology that moves people and packages, we aim to talk about it.

What do you want us to address?

Also, this is my way of telling y’all to buy a ticket to Disrupt. There are a lot of great speakers, including writer, director, actor and Houseplant co-founder Seth Rogen, Twitter CISO Rinki Sethi, Calendly founder and CEO Tope Awotona, Mirror co-founder and CEO Brynn Putnam, Evil Geniuses CEO Nicole LaPointe Jameson and Andreessen Horowitz General Partner Katie Haun, Duolingo CEO and co-founder Luis von Ahn and Coinbase CEO Brian Armstrong — to name a few.

As always, you can email me at [email protected] to share thoughts, criticisms, offer up opinions or tips. You can also send a direct message to me at Twitter — @kirstenkorosec.

Micromobbin’

money the station

Do you live in a city with shared e-scooters and e-bikes that you never really ride even though you think it’s a cool concept? Maybe you think paying $10 to go three miles is ridiculous, or you don’t want to touch the sticky handlebars that someone may have previously coughed on. You’ve considered buying your own, but it ain’t cheap and you’re not ready for that kind of commitment … But wait! From the depths of this stream of consciousness a new business model emerges: micromobility subscriptions.

The premise is that customers pay a somewhat affordable fee for a monthly rental of a higher quality e-scooter or e-bike. It’s delivered to their door and assembled for them. If it breaks down, someone will ship them a new one. And customers can cancel anytime. It’s truly made for the 21st century city dweller, adding nicely to their collection of meal kit, vitamins, video streaming, music streaming, book reading, meditation app, digital trainer and outfit subscriptions.

Enough about the customer. Investors and companies are seeing the value in either building a business around the micromobility subscriptions model or adding it as another line to an existing business. They say it’s easy to scale, provides a good return on investment and costs less per mile to operate. And for those who actually care about sustainability, it allows the operator to control the vehicle’s end of life in a way that sales don’t.

The reason I’m harping on about this model is because I wrote about it for ExtraCrunch this week. It’s behind a paywall, but here are some highlights from the piece:

Shawn Carolan, managing director at Menlo Ventures, which invested in e-scooter subscription/sales company Unagi, is bullish on the micromobility subscription model. He says most people would rather pay a low monthly fee rather than a higher upfront fee.

“The best customers are repeat customers, commuters or local neighborhood trips,” Carolan said. “Repeatedly paying per ride is both expensive and cognitively taxing. People want low friction in transportation. Getting from here to there shouldn’t require a lot of thought.”

Menlo Ventures bet that customers would also take better care of high-quality scooter they get to “own” for a time, which translates to a longer lifetime for hardware — something the dockless shared model consistently struggles with. Having an additional route to micromobility will broaden the market, positioning it as a SaaS business, which achieves a higher multiple.

So what’s next for the subscription model? Startups looking to go this route need to work on providing the best possible service in order to retain customers.

“The job to be done is reliability,” Oliver Bruce, angel investor and co-host of the Micromobility Podcast with Horace Dediu, told TechCrunch. “Maintenance and repairs is still a nascent sector, but for people who want to have a reliable option for travel and don’t know or care about how to maintain their brakes or gears, it’s a really good option. Proper servicing will open up micromobility to a far wider group, especially when paired to safe infrastructure and favorable transport policies.”

Ireland gets on the e-scooter bandwagon

In other news, this week Ireland launched its first e-scooter trial across five campuses of Dublin City University. Berlin-based Tier will work with Irish and DCU-based Luna to equi

p e-scooters with computer vision tech that will be able to detect pavement lines and pedestrians. This is similar to what Drover is doing with Spin, which has just launched its visually updated scooters in Santa Monica.

The Insight SFI Research Centre for Data Analytics and Smart DCU, a district of Smart Dublin, will also collaborate on the pilot research. E-scooters are still illegal to ride on Irish roads, but there is proposed legislation in the works to change that.

Superpedestrian’s scooters are not backing vision

E-scooter company Superpedestrian acquired Navmatic, a startup that helps micromobility operators locate vehicles and correct their movements in real time. With access to Navmatic’s super fusion tech, Superpedestrian has created an advanced safety system called Pedestrian Defense that can detect unsafe riding behaviors and stop them in real time.

Navmatic’s technology basically allows the scooter to detect the rider’s micro-movements and through those plus other data picked up from sensors can determine things like if the scooter is going down the wrong way on a one way street or riding on the pavement.

Bike stuff

The Rad Power RadRover 6 Plus was launched this week, the latest model of the company’s flagship bike.

It’s the e-bike for people who come to the world of biking from a car-centric background somewhat reluctantly, but get hooked to the smooth, sturdy ride, user-friendly design and really affordable price. This totally rad bike is only $1,999, and it’s built to last.

I talked to the bike manufacturer’s chief product officer, Redwood Stephens, and he explained how Rad Power’s business model is all about reducing friction for the customer, from the way you order your vehicle to the packaging it arrives in to the big obvious ON button. And this method appears to be going quite well for the company. In February it raised $150 million in funding, probably the most any e-bike company in America has ever raised.

— Rebecca Bellan

Deal of the week

money the station

Rivian scored another $2.5 billion in a private funding round of returning investors. The round was led by Amazon’s Climate Pledge Fund, D1 Capital Partners, Ford Motor and funds and accounts advised by T. Rowe Price Associates Inc. Third Point, Fidelity Management and Research Company, Dragoneer Investment Group and Coatue also participated in the round, according to Rivian.

Rivian has raised an eye-popping $10.5 billion to date. The company didn’t share a post-money valuation, but earlier this year when it had announced a $2.65 billion raise TechCrunch learned that its  valuation was $27.6 billion.

As the money comes in, the pressure is increasing for the company to deliver its consumer and commercial products. Rivian recently delayed deliveries of its R1T truck and R1S SUV from this summer to September due to delays in production caused by “cascading impacts of the pandemic,” particularly the ongoing global shortage of semiconductor chips. The company also confirmed it plans to open a second U.S. factory.

My other “deal of the week” involves a deal that almost wasn’t. I’m speaking of Lucid Motors of course, which had to extend the deadline to approve its merger with special purpose acquisition company Churchill Capital IV because not enough retail investors showed up to cast their vote. (They were able to approve the merger on Friday).

The hiccup occurred on Thursday, when shareholders voted to approve all but one of the proposals as part of the merger — proposal two, which would revise the company’s charter so that Lucid could receive key financing. That proposal requires a higher number of votes than the others — and it must be approved for the merger to take place — so a lack of votes ended up halting the entire process. The lack of shareholders was blamed on retail investors’ unfamiliarity with the SPAC process and, unbelievably, spam filters gone awry.

The issue is unusual but could become more common as more companies eschew the traditional IPO path to public markets and instead merge with SPACs.

Other deals that got my attention this week …

ChargePoint acquired European charging software company has·to·be for €250 million ($295 million) in cash and stock, the electric vehicle charging network’s first acquisition since it became a publicly traded company. Through the deal, ChargePoint gains more than just 125 employees and the company’s operating software, which manages more than 40,000 networked ports in Europe. The acquisition will give ChargePoint a boost in its pursuit to gain market share beyond North America, as well as VW Group as a strategic partner.

Magna International, the Canadian auto parts maker, is going to acquire its rival Veoneer, which had spun off from safety equipment supplier Autoliv in 2018, for about $3.8 billion in cash, Automotive News reported. (This  also qualifies for my “deal of the week.”) The acquisition is going to give Magna a major boost, particularly in the area of driver assistance technologies business.

Magna will buy out Veoneer’s outstanding shares for $31.25 each, and the acquisition represents an enterprise value of $3.3 billion including debt, the companies said in a joint statement. Magna also said it will capture about $100 million in annual cost savings by 2024.

Miles, a universal rewards platform and app that allows anyone with a smartphone to earn miles for all of their travel, raised $12.5 million in Series A funding round led by Scrum Ventures, with participation from TransLink Capital and Japan Airlines (JAL Innovation Fund), TechNexus Venture Collaborative, Aioi Nissay Dowa Insurance (MS&AD), Synapse Partners and several other prominent individual investors. The raise brings Miles’ total funding to $20 million, with other notable investors including JetBlue Technology Ventures, Liil Ventures, Porsche Ventures, Panasonic, SAIC, Sony Innovation Fund, Urban Us (VC), and Gabe Klein (Co-founder CityFi).

Rodo, an e-commerce startup focused on buying and selling vehicles, raised $18 million in a Series B financing round led by Holman Enterprises and Evolution VC Partners. The round also included existing investor IAC along with Kevin Hart’s HartBeat Ventures as well as auto industry veterans RML Automotive vice chairman Mack McLarty, McLarty Diversified Holdings Chairman and CEO Franklin McLarty and Ken Schnitzer, the former chairman of Park Place Automotive Group. Rodo, which has raised a total of $45 million to date, plans to use the funds to scale its dealership network nationwide and invest in marketing and customer acquisition.

Sonatus, the California-grown automotive software company, raised $35 million in a Series A round that attracted high-profile technology and automotive industry companies including Hyundai Motor Group’s Kia Corporation, SAIC Capital and LG Electronics. Silicon Valley VC Translink Capital led the round, with other investors including Marvell Technology, UMC Capital and Wanxiang Group Company.

Tesla said it will secure nickel from the commodity production giant BHP. The companies didn’t disclose the amount of mineral that will be supplied, just that it will come from BHP’s Nickel West division mines in Western Australia. The two companies also agreed to work together to increase battery supply chain sustainability and to identify ways to decrease carbon emissions from their respective operations using energy storage paired with renewable energy.

Uber Freight, the logistics business spun out of Uber in 2018, acquired TransPlace for $2.25 billion from private equity group TPG Capital. It’s one of those upstream meets downstream type of deals. The union will fold one of the largest managed transportation and logistics networks into Uber Freight’s platform, which connects truck drivers with shippers that need cargo delivered. Uber Freight’s brokerage will continue to operate independently from Transplace’s services, the company said.

This deal marks a ramping up of Uber Freight’s business as it aims to carve out market share in its existing markets and an expansion in Mexico. Uber Freight also sees the acquisition as a means to accelerate the company’s path to profitability and help the segment to break even on an Adjusted EBITDA basis by the end of 2022.

Policy corner

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Welcome back to Policy Corner!

EV rebates and tax credits are a well-known incentive mechanism to encourage Americans to make the switch to electric, but people looking for micromobility incentives have historically been out of luck. A new bill introduced in the Senate is looking to change that. The Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act would give consumers a refundable 30% tax credit on the purchase of an electric bicycle, up to $1,500.

Qualifying bikes must be under $8,000 dollars and reach a max speed of no more than 28 miles per hour. So that means a huge swath of the market would be eligible for the credit. A sister bill was introduced to the House earlier this year. If it passes in both parts of Congress, it would then head to President Biden’s desk.

There’s an interesting interview with Rep. Earl Blumenauer, one of the legislators who introduced the bill in the House. (Just a note, it was conducted by The Scenic Route, a vertical of e-bike seller Rad Power Bikes.) The Congressman talks about how e-bike incentives could fit into the larger goals of the massive infrastructure bill currently being mulled by lawmakers.

“I was talking to the Secretary of Transportation yesterday about the opportunities we have with this big infrastructure package and this is one of those elements that ties in with what we’re doing with the tax system,” Blumenauer said. “It reduces traffic congestion, there’s less pollution to contend with, and it eases the problem of parking.”

I live in Austin, where the hills have dissuaded me from cycling around — yet, the majority of my car trips are less than four miles. I’ve often thought that an electric bike would be a good way to use my car less. I’m sure many other Americans feel similarly.

— Aria Alamalhodaei

Notable news and other tidbits

the station autonomous vehicles1

As per ushe, there is a lot to get to this week. When will the news cycle slow down?

Autonomous vehicles

Argo AI and its backer and customer Ford had the big AV story of the week. The two companies announced plans to launch at least 1,000 self-driving vehicles on Lyft’s ride-hailing network in a number of cities over the next five years, starting with Miami and Austin. I get deep into the details in the story, but the tl;dr includes Lyft taking a 2.5% stake in Argo, which now has a valuation of $12.4 billion.

The first Ford self-driving vehicles, which are equipped with Argo’s autonomous vehicle technology, will become available on Lyft’s app in Miami later this year. Austin will follow next year, with the remaining U.S. cities being added to the Lyft app in 2023 and beyond. Argo currently tests in Detroit, Palo Alto, Pittsburgh and Washington, D.C.

Jody Kelman, who heads up Lyft’s Autonomous, the company’s self-driving deployment business unit, answers the why we should care question: “It’s the biggest deployment certainly that we’re doing and that I think anyone else is doing. One thousand cars across six markets is a big leap forward in terms of scaled commercialization.”


Mobileye expanded its autonomous vehicle testing program to New York City as part of its strategy to develop and deploy the technology. If you’re not watching Mobileye, you should be — even those who don’t agree with the company’s approach.

New York City joins a number of other cities, including Detroit, Paris, Shanghai and Tokyo, where Mobileye has either launched testing or plans to this year. Mobileye launched its first test fleet in Jerusalem in 2018 and added one in Munich in 2020.

Waymo is expanding into AV hub Pittsburgh. The company will start by hiring around a dozen engineers, a source familiar with the move told TechCrunch, and they’ll co-locate in Google’s existing offices in the Bakery Square district. As of Thursday, only around three open positions for the Pittsburgh area were listed on Waymo’s website, but the company will be adding more roles soon.

Notably, some of the new team will come from Pittsburgh-based RobotWits, a tech startup focused on autonomous vehicle decision-making. Waymo acquired RobotWits’ IP rights and some members of its engineering and technical team as well as the company’s founder and CEO Maxim Likhachev are joining Waymo.

Electric vehicles

Arrival, the commercial electric vehicle company, has been chosen to build electric buses for the City of Anaheim, California. The Federal Transportation Administration awarded Anaheim a $2 million grant in 2019. The city’s transportation network announced the plan to partner with Arrival to achieve its goal of running California’s first all-electric bus fleet by 2025.

Battery joint ventures have become the hot must-have deal for automakers that have set ambitious targets to deliver millions of electric vehicles in the next few years. TechCrunch’s Rebecca Bellan digs into what is driving this trend and provides a roundup of the latest deals.

GM said it will add a full-size electric pickup truck to its GMC lineup, the latest in a string of EV product announcements by the automaker in the past year as it pushes to deliver more than 1 million electric vehicles globally by 2025. GM didn’t provide much more, but we can expect it to follow the GMC Hummer EV pickup that is coming  late this year.

Tesla CEO Elon Musk said the automaker will allow other electric vehicles to access its global network of chargers later this year. Musk has been chattering about this idea for years now; what made me take it a skosh more seriously is that he attached a timeline to this. My prediction is that Tesla owners will push back.

Speaking of Musk, the technoking said the automaker will ‘most likely’ resume accepting bitcoin as a form of payment once the mining rate for the cryptocurrency reaches 50% renewables. He made the comments at a virtual panel discussion hosted by the Crypto Council for Innovation. You might recall that Tesla started accepting bitcoin as a form of payment in February, the same time that the company purchased a historic $1.5 billion in bitcoin — before reneging on its decision just three months later, citing environmental concerns.

Mercedes-Benz laid out a €40 billion ($47 billion) plan to become an electric-only automaker by the end of the decade. To be clear, Mercedes did give itself some wiggle room in that ambitious goal, noting that it will be “ready to go all electric by the end of the decade, where markets allow.” This could mean that some combustion engine Mercedes, which are already equipped with 48-volt mild hybrid systems, will be produced and sold beyond the decade.

This target is driving Mercedes to become more vertically integrated, secure its supply chain and retraining its workforce. For instance, the automaker noted that it has acquired U.K.-based electric motor company YASA, and has determined it will need battery capacity of more than 200 gigawatt hours. To hit meet those needs, Mercedes plans to set up eight battery factories with existing partners and one new partner to produce cells.

In-car tech and ADAS

GM is rolling out three major upgrades including automatic lanes changes and towing support to its hands-free driver assistance system Super Cruise and making it available in six vehicles, including the 2022 all-new GMC Hummer EV pickup truck.

Speaking of Super Cruise, GM isn’t OK with Ford naming its own ADAS BlueCruise. GM and its self-driving vehicle subsidiary Cruise, filed a lawsuit against Ford claiming that the BlueCruise name is too similar to its Super Cruise trademark and Cruise’s trademark, The Hill reported.

Ride-hailing, car-sharing and other stuff

Getaround was fined nearly $1 million by the Washington, D.C. Office of the attorney general for operating without a license and other violations, part of a settlement of what the peer-to-peer car rental startup calls “politically motivated allegations.”

People makin’ moves

Aurora has hired Yanbing Li as its new senior VP of engineering, according to a posting on LinkedIn. Yanbing comes from Google, where she lead the enterprise services platform organization in Google Cloud.

Joby Aviation announced its board of directors and it contains some high-profile transportation folks, including Zoox CEO Aicha Evans, Dr. James Kuffner, CEO of Toyota’s Woven Planet Holdings,·Reid Hoffman, LinkedIn Co-Founder and Co-Lead Director of Reinvent Technology Partners, Google general counsel Halimah DeLaine Prado and Dipender Saluja the managing director of Capricorn Investment Group.

Of course, the board also includes Joby founder and CEO JoeBen Bevirt, Founder and executive chairman Paul Sciarra.

Velodyne Lidar lost its CEO, the latest in a series of issues and internal drama that have cropped up since the sensor company struck a deal to merge with special purpose acquisition company Graf Industrial Corp. CEO Anand Gopalan, who was previously CTO, announced he is leaving the lidar company at the end of July.

A team of top executives that includes COO Jim Barnhart, CFO Drew Hamer, Chief People Officer Kathy McBeath and Chief Commercial Officer Sinclair Vass will run the company as a search for a new chief executive is conducted. The company didn’t disclose why Gopalan was leaving.

Xos, the electric truck company that is set to go public via SPAC merger later this summer, announced nominees for the board that will represent the combined company. Beyond Xos co-founders Dakota Semler and Giordano Sordoni, the list includes: Burt Jordan, the former VP of global purchasing operation and supply chain sustainability at Ford, S. Sara Mathew, the former chair and CEO at Dun & Bradstreet Corporation, George Mattson, who co-dounded NextGen Acquisition Corporation, and Ed Rapp, the former group president for resource industries and former CFO at Caterpillar Inc.

 

Early bird savings on passes to TechCrunch Disrupt 2021 end this week

Tick tock, early-stage startup fans: If you plan to attend TechCrunch Disrupt 2021 (September 21-23), time is running out to score a pass to the world’s leading conference dedicated to tech startups — for less than $100. The early bird sale ends this week, so buy your pass here before the deal expires on July 30 at 11:59 pm (PT).

And if you’re part of the tech startup ecosystem — or aspire to be — why the heck wouldn’t you dive headlong into three days dedicated to the art and science required to build and scale successful startups? Just listen to what three past attendees said about their Disrupt experience.

Disrupt is a great sweet spot, and highly valuable, for anyone in the idea stage all the way through to having raised some angel money. Soak up the pitch deck teardowns and the VC presentations. They’re telling you what they’re looking for, what motivates them, what pushes them to contact you for a meeting. And that’s exactly what every startup raising capital needs to know. — Michael McCarthy, CEO, Repositax.

“TechCrunch has created a great venue that brings together all the different people within the startup ecosystem. It’s a place where new startups can present, attendees can learn from top industry experts and who knows? One day they might be the person speaking on the Disrupt stage. It’s a great event overall.” — JC Bodson, founder and CEO of Arbitrage Technologies

“The connections I made at Disrupt offer long-term benefits. Investors willing to put forth capital, engineers offering tech expertise and manufacturers to help me streamline. Fostering these relationships will help me grow my company and my bottom line.” — Felicia Jackson, inventor and founder of CPRWrap.

Disrupt is the place to be to learn, connect, collaborate and keep tabs on rapidly changing trends. Here’s just one example of the timely topics and world-class experts we have on tap. Don’t forget to check out the agenda.

Saving the World: COVID-19 changed everything. It not only threatened our individual health and wellbeing, but it also shook industries and economies across the globe. The same could be said about the COVID-19 vaccines. Hear from BioNTech Cofounder and CEO, Ugur Sahin on the process of rapidly developing the world’s most sought-after vaccine, alongside Pfizer, and the long-term potential of mRNA-based therapies. Sahin will be joined by Ursheet Parikh of Mayfield Fund to discuss what’s next for startups in this rapidly evolving industry.

Pro Tip: We’ll add new speakers, events and discounts in the run up to Disrupt — sign up for updates so you don’t miss out.

TechCrunch Disrupt 2021 takes place September 21-23, but the time to snag serious savings ends this week. Buy your early bird pass here before the deal expires on July 30 at 11:59 pm (PT).

Is your company interested in sponsoring or exhibiting at Disrupt 2021? Contact our sponsorship sales team by filling out this form.

Bezos offers billions in incentives for NASA’s lunar lander contract

Jeff Bezos, the billionaire founder of Blue Origin, is offering to knock up to $2 billion off the cost of developing a lunar lander and to self-fund a pathfinder mission in exchange for a NASA contract.

The specific contract in question relates to developing a lunar lander for the Human Landing System program, which aims to return humans to the moon for the first time since the Apollo days. NASA announced in April 2020 that Blue Origin, SpaceX and Dynetics were chosen for the initial phase of the contract, and it was thought that the competition would likely be whittled down to two final companies to build lunar landers. As TechCrunch’s Darrell Etherington notes, it’s not uncommon for NASA to select two vendors, as it did when it awarded both Boeing and SpaceX contracts under its Commercial Crew program.

But a year later, in a move that veered from historical practice, NASA announced it had selected just one company for the contract: SpaceX. That company, headed by Elon Musk, proposed a $2.89 billion plan for its lander – around half of Blue Origin’s $5.99 billion proposal. Bezos is now offering to cut that price tag by $2 billion.

In a document obtained by The Washington Post explaining the rationale behind selecting a sole vendor for the HLS contract, NASA admits that it’s “current fiscal year budget did not support even a single [contract] award.” In response, SpaceX updated its payment schedule so it would fit “within NASA’s current budget.” That the agency has severe budgetary constraints is no secret: Congress approved just $850 million for the HLS program in fiscal year 2021, far short of the $3.4 billion NASA requested.

Enter Bezos’ open letter to NASA Administrator Bill Nelson, which addresses the budget issue directly. He writes that the proposed incentives would remedy “perceived near-term budgetary issues” with the Human Landing System Program, which caused NASA to select a single company instead of two.

“Instead of investing in two competing lunar landers as originally intended, the Agency chose to confer a multi-year, multi-billion-dollar head start to SpaceX,” Bezos says in the letter. “That decision broke the mold of NASA’s successful commercial space programs by putting an end to meaningful competition for years to come.”

This is not the first time that Blue Origin has publicly questioned NASA’s decision to go with just one vendor. The company, along with Dynetics, filed protests with the Government Accountability Office just one week after the award was announced. Blue Origin argued that the contract requirements did not give companies an ability to “meaningfully compete.” GAO must rule on the protest by August 4.

Blue Origin and Dynetics are not the only entities to support two contract awards. The Senate recently passed a bill that would, among other things, require NASA to select two companies for the HLS lander – and the extra funds to do so, SpaceNews reported. Not every lawmaker was happy about the inclusion of the extra funding, however: Senator Bernie Sanders called it a “Bezos bailout,” but was ultimately unsuccessful in getting the extra funding stripped from the bill.

“We stand ready to help NASA moderate its technical risks and solve its budgetary constraints and put the Artemis Program back on a more competitive, credible, and sustainable path,” Bezos said.

How one founder aims to make money management a mutiplayer game

Aditi Shekar’s path to entrepreneurship was a very intentional one, and while it wasn’t quite a childhood dream, it was the real-world version of the goals she did have as a kid. Fast forward to today, and Aditi’s company Zeta is on a rocket ship ride in fintech, having recently jumped from being a money management and virtual advisor app for couples, to an actual financial solutions provider built from the ground up with shared financial management in mind.

On this week’s episode of Found, me and TechCrunch Managing Editor Jordan Crook sit down with Aditi to talk about where she gets her endless drive and determination, to why she loves financial management (I’m trying to get her zeal to wear off on me, tbh). We also get into why Zeta makes so much sense in the context of a field of legacy financial solutions that generally don’t acknowledge that the way we manage and think about money, especially as it relates to the dynamics between multiple people, has changed significantly over the course of the past several decades.

Aditi definitely isn’t afraid to get real about what’s required to be an entrepreneur and dedicate yourself to a vision you really believe in. And as usual, me and Jordan end up feeling deeply inadequate and ashamed about our life choices — but in a fun way.

We loved our time chatting with Aditi, and we hope you love yours listening to the episode. And of course, we’d love if you can subscribe to Found in Apple Podcasts, on Spotify, on Google Podcasts or in your podcast app of choice. Please leave us a review and let us know what you think, or send us direct feedback either on Twitter or via email at [email protected] And please join us again next week for our next featured founder.

Equity Monday: China boosts pressure on its tech sector as Duolingo’s IPO looks to raise a few more bucks

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.

Ever wake up to just a massive wall of news? That was us this morning, so we had to pick and choose. But since this show is about getting you caught up, we decided to focus on the largest, broadest new information that we could:

  • Asian stocks were down, European shares are lower, and American equities are set to open underwater. Bitcoin had a great weekend, however.
  • China’s edtech crackdown continued over the weekend, with the country’s ruling party setting new rules for online tutoring companies; they can no longer go public and will be forced to become non-profit entities. Chinese edtech stocks around the world fell.
  • China’s larger tech crackdown continued over the weekend and into the week, with new moves against the present-day business models of both food delivery companies, and Tencent Music. The former must ensure minimum incomes, while the latter must give up exclusive rights deals. Shares fell.
  • The Jam City SPAC is kaput. It will not be the last similar deal to fall apart.
  • And we chatted about this bit of Rivian news, as it stood out to us.

All that and we had a good time. Hugs and love from the Equity crew, chat Wednesday!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 a.m. PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts!

Equity Monday: China boosts pressure on its tech sector as Duolingo’s IPO looks to raise a few more bucks

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.

Ever wake up to just a massive wall of news? That was us this morning, so we had to pick and choose. But since this show is about getting you caught up, we decided to focus on the largest, broadest new information that we could:

  • Asian stocks were down, European shares are lower, and American equities are set to open underwater. Bitcoin had a great weekend, however.
  • China’s edtech crackdown continued over the weekend, with the country’s ruling party setting new rules for online tutoring companies; they can no longer go public and will be forced to become non-profit entities. Chinese edtech stocks around the world fell.
  • China’s larger tech crackdown continued over the weekend and into the week, with new moves against the present-day business models of both food delivery companies, and Tencent Music. The former must ensure minimum incomes, while the latter must give up exclusive rights deals. Shares fell.
  • The Jam City SPAC is kaput. It will not be the last similar deal to fall apart.
  • And we chatted about this bit of Rivian news, as it stood out to us.

All that and we had a good time. Hugs and love from the Equity crew, chat Wednesday!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 a.m. PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts!

Spotify adds an attention-grabbing ‘What’s New’ feed to addict users to its app

Spotify is taking a cue from social networks like Facebook, which deliver a constant stream of notifications under a “bell” icon in the mobile app to keep users engaged with the latest content. This morning, Spotify introduced what it’s calling the “What’s New” feed, which will deliver an ongoing series of updates to mobile app users focused on new releases.

According to the company, the What’s New feed will serve as another way for Spotify users to keep up with all the new music and podcasts that are released from the shows and artists that they follow on the service. In other words, it’s a personalized feed based on what you listen to, not a universal feed or one you more explicitly customize by making specific selections.

The feed will be under the new “bell” icon at the top of the home tab alongside the recently played and settings icons on the top right.

Image Credits: Spotify

The feed will be also updated in real-time, Spotify says, and will display a blue dot when there are new songs and episodes that arrived since you last opened the app. Before, you could find information about new releases in various places in the app, including your home tab and in hubs on the app’s search page.

While the feature may be useful because it gives you a single place to look in the Spotify app for everything that’s new, the use of a “notifications” feature that leverages dots is also a psychological trick that can make apps more addictive. Dots express a sense of urgency — making you feel as if you need to click to see what’s new or even just clear the dot. In fact, there was such a backlash against the overabundance of these dots inside social apps that even Facebook a couple of years ago rolled out tools that let you turn its annoying red notification dots off. (To be fair, Facebook hasn’t fully embraced red dot removal — the default is still set to “on” and there are plenty of notification dots all over its website today).

This seemingly minor addition to the Spotify app is actually a quite calculated one — and one that steps back from the humane technology movement that emerged in recent years as a way to counter the overuse of growth hacks and other tricks to make apps more addictive.

Now, many companies are moving away from addictive features. Apple, for example, has added consumer-facing tools that put users back in control of when apps can notify them, including with the upcoming iOS 15 release, which lets you bundle notifications into daily summaries for less important apps or switch into “focus” modes for when you need fewer distractions. TikTok, meanwhile, inserts videos that remind you when you’ve been watching for too long. Instagram added a message at the end of your feed to let you know when you were “all caught up.”

Spotify, with the launch of a more attention-grabbing notifications feature, is doing the opposite — it wants to increase user engagement, even if it understands that it may be sacrificing some sense of user comfort and enjoyment in the process.

What’s New is rolling out to all users globally on iOS and Android over the next few weeks.

NotCo gets its horn following $235M round to expand plant-based food products

NotCo, a food technology company making plant-based milk and meat replacements, wrapped up another funding round this year, a $235 million Series D round that gives it a $1.5 billion valuation.

Tiger Global led the round and was joined by new investors, including DFJ Growth Fund, the social impact foundation, ZOMA Lab; athletes Lewis Hamilton and Roger Federer; and musician and DJ Questlove. Follow-on investors included Bezos Expeditions, Enlightened Hospitality Investments, Future Positive, L Catterton and Kaszek Ventures.

This funding round follows an undisclosed investment in June from Shake Shack founder Danny Meyer through his firm EHI. In total, NotCo, with roots in both Chile and New York, has raised more than $350 million, founder and CEO Matias Muchnick told TechCrunch.

Currently, the company has four product lines: NotMilk, NotBurger and NotMeat, NoticeCream and NotMayo, which are available in the five countries of the U.S., Brazil, Argentina, Chile and Colombia.

The company is operating in the middle of a trend toward eating healthier food, as more consumers also question how their food is made, resulting in demand for alternative proteins. In fact, the market for alternative meat, eggs, dairy and seafood products is predicted to reach $290 billion by 2035, according to research by Boston Consulting Group and Blue Horizon Corp.

NotCo’s proprietary artificial intelligence technology, Giuseppe, matches animal proteins to their ideal replacements among thousands of plant-based ingredients. It is working to crack the code in understanding the molecular components and food characteristics in the combination of two ingredients that could mimic milk, but in a more sustainable and resourceful way — and that also tastes good, which is the biggest barrier to adoption, Muchnick said.

“Our theory is that there is a crazy dynamic among people: 60% who are already eating plant-based are not happy with the taste, and 30% of those who drink cow’s milk are waiting to change if there is a similar taste,” he added. “Our technology is based in AI so that we can create a different food system, as well as products faster and better than others in the space. There are 300,000 plant species, and we still have no idea what 99% of them can do.”

In addition to a flow of investments this year, the company launched its NotMilk brand in the United States seven months ago and is on track to be in 8,000 locations across retailers like Whole Foods Market, Sprouts and Wegmans by the end of 2021.

Muchnick plans to allocate some of the new funding to establish markets in Mexico and Canada and add market share in the U.S. and Chile. He expects to have 50% of its business coming from the U.S. over the next three years. He is also eyeing an expansion into Asia and Europe in the next year.

NotCo also intends to add more products, like chicken and other white meats and seafood, and to invest in technology and R&D. He expects to do that by doubling the company’s current headcount of 100 in the next two years. Muchnick also wants to establish more patents in food science — the company already has five — and to explore a potential intelligence side of the business.

Though NotCo reached unicorn status, Muchnick said the real prize is the brand awareness and subsequent sales boost, as well as opening doors for quick-service restaurant deals. NotBurger went into Burger King restaurants in Chile 11 months ago, and now has 5% of the market there, he added.

Sales overall have grown three times annually over the past four years, something Muchnick said was attractive to Tiger Global. He is equally happy to work with Tiger, especially as the company prepares to go public in the next two or three years. He said Tiger’s expertise will get NotCo there in a more prepared manner.

“NotCo has created world class plant-based food products that are rapidly gaining market share,” said Scott Shleifer, partner at Tiger Global, in a written statement. “We are excited to partner with Matias and his team. We expect continued product innovation and expansion into new geographies and food categories will fuel high and sustainable growth for years to come.”