A new YouTube feature will make its connected TV ads more shoppable

YouTube today gave advertisers a sneak peek at its plans to make its video platform more shoppable. The company will soon be introducing a new interactive feature aimed at advertisers called brand extensions, which will allow YouTube viewers to learn more about a product they see on the screen with a click of a button.

The new ad format will allow the advertiser to highlight their website link or another call-to-action in their connected TV video ad. The viewer can then click the option “send to phone,” which then sends that promotion or URL directly to their mobile device, without interrupting their viewing experience.

From the mobile device, the consumer could then shop the website as they would normally — browsing products, adding items to the cart, and completing the transaction. But they can do it when they’re ready to engage with that product information, instead of having to stop their video to do so.

The advertisers will also be able to smartly target the ads to the correct audience, based on the video content. For example, a fitness video may feature a brand extension ad that shows a new pair of running shoes.

Advertisers will be able to measure the conversions generated by these brand extensions directly in Google Ads, YouTube says.

In a related e-commerce ad effort, brands can now also add browsable product images to their direct response video ads, in order to encourage interested shoppers to click to visit their website or app.

These are only a few of the efforts YouTube has been working on with the goal of expand further into e-commerce.

Consumers, and particularly younger Gen Z users, today like to watch videos and engage while they shop, leading to the emergence of numerous video shopping services — like Popshop Live, NTWRK, ShopShops, TalkShopLive, Bambuser, and others. Facebook has also invested in live shopping and video-based shopping across both Facebook and Instagram.

Meanwhile, TikTok has become a home to video-based e-commerce, with Walmart (which also tried to acquire a stake in the app when Trump was trying to force a sale) hosting multiple shopping livestreams in recent months. TikTok also found success with e-commerce as it has rolled out more tools to direct video viewers to websites through integrated links and integrations with Shopify, for example.

But YouTube still has a sizable potential audience for video shopping, as it represents 40% of watch time of all ad-supported streaming services, per Comscore data. And of the top five streaming services in the U.S. that account for 80% of the connected TV market, only two are ad-supported, YouTube noted.

Ads are only one way YouTube will drive e-commerce traffic. Creators will also play a role.

A report from Bloomberg this past fall said YouTube was asking creators to tag and track the products they were featuring in their clips. YouTube later revealed more about this effort in February, saying it was beta testing a shopping experience that lets viewers shop from their favorite creators, and that this would roll out more broadly in 2021.

Brand extensions are separate from that effort, however, as they’re focused on giving the advertiser their own means to drive a shopping experience from a video.

YouTube says the new brand extensions ads are only the first of more interactive features the company has in store. The feature will roll out globally later this year.

Epic Games buys artist community ArtStation, drops commissions to 12%

One the same day as Fortnite maker Epic Games goes to trial with one of the biggest legal challenges to the App Store’s business model to date, it has simultaneously announced the acquisition of the artist portfolio community ArtStation — and immediately lowered the commissions on sales. Now standard creators on ArtStation will see the same 12% commission rate found in Epic’s own Games Store for PCs, instead of the 30% it was before. This reduced rate is meant to serve as an example the wider community as to what a “reasonable” commission should look like. This could become a point of comparison with the Apple App Store’s 30% commission for larger developers like Epic as the court case proceeds.

ArtStation today offers a place for creators across gaming, media, and entertainment to showcase their work and find new jobs. The company has had a long relationship with Epic Games, as many ArtStation creators work with Epic’s Unreal Engine. However, ArtStation has also been a home to 2D and 3D creators across verticals, including those who don’t work with Unreal Engine.

The acquisition won’t change that, the team says in its announcement. Instead, the deal will expand the opportunities for creators to monetize their work. Most notably, that involves the commission drop. For standard creators, the fees will drop from 30% to 12%. For Pro members (who pay $9.95/mo for a subscription), the commission goes even lower — from 20% to 8%. And for self-promoted sales, the fees will be just 5%. ArtEngine’s streaming video service, ArtStation Learning, will also be free for the rest of 2021, the company notes.

The slashed commission, however, is perhaps the most important change Epic is making to ArtStation because it gives Epic a specific example as to how it treats its own creator communities. It will likely reference the acquisition and the commission changes during its trial with Apple, along with its own Epic Games Store and its similarly low rate. Already, Epic’s move had prompted Microsoft to lower its cut on game sales, too, having recently announced a similar 30% to 12% drop.

In the trial, Epic Games will try to argue that Apple has a monopoly on the iOS app ecosystem and it abuses its market power to force developers to use Apple’s payment systems and pay it commissions on the sales and in-app purchases that flow through those systems. Epic Games, like several other larger app makers, would rather use its own payment systems to avoid the commission — or at the very least, be able to point users to a website where they can pay directly. But Apple doesn’t allow this, per its App Store guidelines.

Last year, Epic Games triggered Fortnite’s App Store expulsion by introducing a new direct way to pay on mobile devices which offered a steep discount. It was a calculated move. Both Apple and Google immediately banned the game for violating their respective app store policies, as a result. And then Epic sued.

While Epic’s fight is technically with both Apple and Google, it has focused more of its energy on the former because Android devices allow sideloading of apps (a means of installing apps directly), and Apple does not.

Meanwhile, Apple’s argument is that Epic Games agreed to Apple’s terms and guidelines and then purposefully violated them in an effort to get a special deal. But Apple says the guidelines apply to all developers equally, and Epic doesn’t get an exception here.

However, throughout the course of the U.S. antitrust investigations into big tech, it was discovered that Apple did, in fact, make special deals in the past. Emails shared by the House Judiciary Committee as a part of an investigation revealed that Apple had agreed to a 15% commission for Amazon’s Prime Video app at the start, when typically subscription video apps are 30% in year one, then 15% in year two and beyond. (Apple says Amazon simply qualified for a new program.) Plus, other older emails revealed Apple had several discussions about raising commissions even higher than 30%, indicating that Apple believed its commission rate had some flex.

Ahead of today’s acquisition by Epic Games, ArtStation received a “Megagrant” from Epic during the height of the pandemic to help it through an uncertain period. This could may have pushed the two companies to further discuss deeper ties going forward.

“Over the last seven years, we’ve worked hard to enable creators to showcase their work, connect with opportunities and make a living doing what they love,” said Leonard Teo, CEO and co-founder of ArtStation, in a statement. “As part of Epic, we will be able to advance this mission and give back to the community in ways that we weren’t able to on our own, while retaining the ArtStation name and spirit.”

How one founder made the most of Y Combinator in a pandemic year

This week, we welcome guest Hana Mohan to our podcast Found. Hana is the co-founder and CEO of MagicBell, a new startup she created with Josue Montano that just recently graduated from Y Combinator’s Winter 2021 cohort. MagicBell is a full-featured, plug-and-play notifications inbox aimed at developers who want to build one into their own product, but don’t want to have to build one themselves from scratch.

Hana’s experience as an entrepreneur spans multiple companies, including her last one which she grew to significant success in terms of annual revenue. She’s also a proud transgender woman, who underwent her transition mid-way through her existing history as a founder and entrepreneur. Hana talks to us about the challenges she faced taking on her transition in an industry where the focus is often exclusively on how hard you’re hustling and what you’re building next, and about her origin story as a founder coming from an environment where there weren’t necessarily many examples with similar life experience to look to for inspiration.

During our chat, Hana also shared lots of insight into YC, and what it provides founders, as well as perspective on what it was like going through the program during a global pandemic in a remote context. Finally, she offers some great context on finding your first investors and customers as a distributed team.

We loved talking to Hana, and we hope you love the episode. You can subscribe to Found in Apple Podcasts, on Spotify, on Google Podcasts or in your podcast app of choice. Definitely leave us a review and let us know what you think, or send us direct feedback either on Twitter or via email. Come back next week for yet another great conversation with a founder all about their own one-of-a-kind startup journey.

What3Words sends legal threat to a security researcher for sharing an open-source alternative

A U.K. company behind digital addressing system What3Words has sent a legal threat to a security researcher for offering to share an open-source software project with other researchers, which What3Words claims violate its copyright.

Aaron Toponce, a systems administrator at XMission, received a letter on Thursday from a law firm representing What3Words, requesting that he delete tweets related to the open source alternative, WhatFreeWords. The letter also demands that he disclose to the law firm the identity of the person or people with whom he had shared a copy of the software, agree that he would not make any further copies of the software, and to delete any copies of the software he had in his possession.

The letter gave him until May 7 to agree, after which What3Words would “waive any entitlement it may have to pursue related claims against you,” a thinly-veiled threat of legal action.

“This is not a battle worth fighting,” he said in a tweet. Toponce told TechCrunch that he has complied with the demands, fearing legal repercussions if he didn’t. He has also asked the law firm twice for links to the tweets they want deleting but has not heard back. “Depending on the tweet, I may or may not comply. Depends on its content,” he said.

The legal threat sent to Aaron Toponce. (Image: supplied)

U.K.-based What3Words divides the entire world into three-meter squares and labels each with a unique three-word phrase. The idea is that sharing three words is easier to share on the phone in an emergency than having to find and read out their precise geographic coordinates.

But security researcher Andrew Tierney recently discovered that What3Words would sometimes have two similarly-named squares less than a mile apart, potentially causing confusion about a person’s true whereabouts. In a later write-up, Tierney said What3Words was not adequate for use in safety-critical cases.

It’s not the only downside. Critics have long argued that What3Words’ proprietary geocoding technology, which it bills as “life-saving,” makes it harder to examine it for problems or security vulnerabilities.

Concerns about its lack of openness in part led to the creation of the WhatFreeWords. A copy of the project’s website, which does not contain the code itself, said the open-source alternative was developed by reverse-engineering What3Words. “Once we found out how it worked, we coded implementations for it for JavaScript and Go,” the website said. “To ensure that we did not violate the What3Words company’s copyright, we did not include any of their code, and we only included the bare minimum data required for interoperability.”

But the project’s website was nevertheless subjected to a copyright takedown request filed by What3Words’ counsel. Even tweets that pointed to cached or backup copies of the code were removed by Twitter at the lawyers’ requests.

Toponce — a security researcher on the side — contributed to Tierney’s research, who was tweeting out his findings as he went. Toponce said that he offered to share a copy of the WhatFreeWord code with other researchers to help Tierney with his ongoing research into What3Words. Toponce told TechCrunch that receiving the legal threat may have been a combination of offering to share the code and also finding problems with What3Words.

In its letter to Toponce, What3Words argues that WhatFreeWords contains its intellectual property and that the company “cannot permit the dissemination” of the software.

Regardless, several websites still retain copies of the code and are easily searchable through Google, and TechCrunch has seen several tweets linking to the WhatFreeWords code since Toponce went public with the legal threat. Tierney, who did not use WhatFreeWords as part of his research, said in a tweet that What3Words’ reaction was “totally unreasonable given the ease with which you can find versions online.”

We asked What3Words if the company could point to a case where a judicial court has asserted that WhatFreeWords has violated its copyright. What3Words spokesperson Miriam Frank did not respond to multiple requests for comment.

Cloud infrastructure market keeps rolling in Q1 with almost $40B in revenue

Conventional wisdom over the last year has suggested that the pandemic has driven companies to the cloud much faster than they ever would have gone without that forcing event with some suggesting it has compressed years of transformation into months. This quarter’s cloud infrastructure revenue numbers appear to be proving that thesis correct.

With The Big Three — Amazon, Microsoft and Google — all reporting this week, the market generated almost $40 billion in revenue, according to Synergy Research data. That’s up $2 billion from last quarter and up 37% over the same period last year. Canalys’s numbers were slightly higher at $42 billion.

As you might expect if you follow this market, AWS led the way with $13.5 billion for the quarter up 32% year over year. That’s a run rate of $54 billion. While that is an eye-popping number, what’s really remarkable is the yearly revenue growth, especially for a company the size and maturity of Amazon. The law of large numbers would suggest this isn’t sustainable, but the pie keeps growing and Amazon continues to take a substantial chunk.

Overall AWS held steady with 32% market share. While the revenue numbers keep going up, Amazon’s market share has remained firm for years at around this number. It’s the other companies down market that are gaining share over time, most notably Microsoft which is now at around 20% share good for about $7.8 billion this quarter.

Google continues to show signs of promise under Thomas Kurian, hitting $3.5 billion good for 9% as it makes a steady march towards double digits. Even IBM had a positive quarter, led by Red Hat and cloud revenue good for 5% or about $2 billion overall.

Synergy Research cloud infrastructure bubble map for Q1 2021. AWS is leader, followed by Microsoft and Google.

Image Credits: Synergy Research

John Dinsdale, chief analyst at Synergy says that even though AWS and Microsoft have firm control of the market, that doesn’t mean there isn’t money to be made by the companies playing behind them.

“These two don’t have to spend too much time looking in their rearview mirrors and worrying about the competition. However, that is not to say that there aren’t some excellent opportunities for other players. Taking Amazon and Microsoft out of the picture, the remaining market is generating over $18 billion in quarterly revenues and growing at over 30% per year. Cloud providers that focus on specific regions, services or user groups can target several years of strong growth,” Dinsdale said in a statement.

Canalys, another firm that watches the same market as Synergy had similar findings with slight variations, certainly close enough to confirm one another’s findings. They have AWS with 32%, Microsoft 19%, and Google with 7%.

Canalys market share chart with Amazon with 32%, Microsoft 19% and Google 7%

Image Credits: Canalys

Canalys analyst Blake Murray says that there is still plenty of room for growth, and we will likely continue to see big numbers in this market for several years. “Though 2020 saw large-scale cloud infrastructure spending, most enterprise workloads have not yet transitioned to the cloud. Migration and cloud spend will continue as customer confidence rises during 2021. Large projects that were postponed last year will resurface, while new use cases will expand the addressable market,” he said.

The numbers we see are hardly a surprise anymore, and as companies push more workloads into the cloud, the numbers will continue to impress. The only question now is if Microsoft can continue to close the market share gap with Amazon.

Europe charges Apple with antitrust breach, citing Spotify App Store complaint

The European Commission has announced that it’s issued formal antitrust charges against Apple, saying today that its preliminary view is Apple’s app store rules distort competition in the market for music streaming services by raising the costs of competing music streaming app developers.

The Commission begun investigating competition concerns related to iOS App Store (and also Apple Pay) last summer.

“The Commission takes issue with the mandatory use of Apple’s own in-app purchase mechanism imposed on music streaming app developers to distribute their apps via Apple’s App Store,” it wrote today. “The Commission is also concerned that Apple applies certain restrictions on app developers preventing them from informing iPhone and iPad users of alternative, cheaper purchasing possibilities.”

The statement of objections focuses on two rules that Apple imposes in its agreements with music streaming app developers: Namely the mandatory requirement to use its proprietary in-app purchase system (IAP) to distribute paid digital content (with the Commission noting that it charges a 30% commission fee on all such subscriptions bought via IAP); and ‘anti-steering provisions’ which limit the ability of developers to inform users of alternative purchasing options.

“The Commission’s investigation showed that most streaming providers passed this fee [Apple’s 30% cut] on to end users by raising prices,” it wrote, adding: “While Apple allows users to use music subscriptions purchased elsewhere, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper. The Commission is concerned that users of Apple devices pay significantly higher prices for their music subscription services or they are prevented from buying certain subscriptions directly in their apps.”

Commenting in a statement, EVP and competition chief Margrethe Vestager, added: “App stores play a central role in today’s digital economy. We can now do our shopping, access news, music or movies via apps instead of visiting websites. Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store. With Apple Music, Apple also competes with music streaming providers. By setting strict rules on the App store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition. This is done by charging high commission fees on each transaction in the App store for rivals and by forbidding them from informing their customers of alternative subscription options.”

Apple sent us this statement in response:

“Spotify has become the largest music subscription service in the world, and we’re proud for the role we played in that. Spotify does not pay Apple any commission on over 99% of their subscribers, and only pays a 15% commission on those remaining subscribers that they acquired through the App Store. At the core of this case is Spotify’s demand they should be able to advertise alternative deals on their iOS app, a practice that no store in the world allows. Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that. The Commission’s argument on Spotify’s behalf is the opposite of fair competition.”

Spotify’s founder, Daniel Ek, has also responded to the news of the Commission’s charges against Apple with a jubilant tweet — writing: “Today is a big day. Fairness is the key to competition… we are one step closer to creating a level playing field, which is so important for the entire ecosystem of European developers.”

Vestager is due to hold a press conference shortly — so stay tuned for updates.

This story is developing… 

A number of complaints against Apple’s practices have been lodged with the EU’s competition division in recent years — including by music streaming service Spotify; video games maker Epic Games; and messaging platform Telegram, to name a few of the complainants who have gone public (and been among the most vocal).

The main objection is over the (up to 30%) cut Apple takes on sales made through third parties’ apps — which critics rail against as an ‘Apple tax’ — as well as how it can mandate that developers do not inform users how to circumvent its in-app payment infrastructure, i.e. by signing up for subscriptions via their own website instead of through the App Store. Other complaints include that Apple does not allow third party app stores on iOS.

Apple, meanwhile, has argued that its App Store does not constitute a monopoly. iOS’ global market share of mobile devices is a little over 10% vs Google’s rival Android OS — which is running on the lion’s share of the world’s mobile hardware. But monopoly status depends on how a market is defined by regulators (and if you’re looking at the market for iOS apps then Apple has no competitors).

The iPhone maker also likes to point out that the vast majority of third party apps pay it no commission (as they don’t monetize via in-app payments). While it argues that restrictions on native apps are necessary to protect iOS users from threats to their security and privacy.

Last summer the European Commission said its App Store probe was focused on Apple’s mandatory requirement that app developers use its proprietary in-app purchase system, as well as restrictions applied on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps.

It also said it was investigating Apple Pay: Looking at the T&Cs and other conditions Apple imposes for integrating its payment solution into others’ apps and websites on iPhones and iPads, and also on limitations it imposes on others’ access to the NFC (contactless payment) functionality on iPhones for payments in stores.

The EU’s antitrust regulator also said then that it was probing allegations of “refusals of access” to Apple Pay.

In March this year the UK also joined the Apple App Store antitrust investigation fray — announcing a formal investigation into whether it has a dominant position and if it imposes unfair or anti-competitive terms on developers using its app store.

US lawmakers have, meanwhile, also been dialling up attention on app stores, plural — and on competition in digital markets more generally — calling in both Apple and Google for questioning over how they operate their respective mobile app marketplaces in recent years.

Last month, for example, the two tech giants’ representatives were pressed on whether their app stores share data with their product development teams — with lawmakers digging into complaints against Apple especially that Cupertino frequently copies others’ apps, ‘sherlocking’ their businesses by releasing native copycats (as the practice has been nicknamed).

Back in July 2020 the House Antitrust Subcommittee took testimony from Apple CEO Tim Cook himself — and went on, in a hefty report on competition in digital markets, to accuse Apple of leveraging its control of iOS and the App Store to “create and enforce barriers to competition and discriminate against and exclude rivals while preferencing its own offerings”.

“Apple also uses its power to exploit app developers through misappropriation of competitively sensitive information and to charge app developers supra-competitive prices within the App Store,” the report went on. “Apple has maintained its dominance due to the presence of network effects, high barriers to entry, and high switching costs in the mobile operating system market.”

The report did not single Apple out — also blasting Google-owner Alphabet, Amazon and Facebook for abusing their market power. And the Justice Department went on to file suit against Google later the same month. So, over in the U.S., the stage is being set for further actions against big tech. Although what, if any, federal charges Apple could face remains to be seen.

At the same time, a number of state-level tech regulation efforts are brewing around big tech and antitrust — including a push in Arizona to relieve developers from Apple and Google’s hefty cut of app store profits.

While an antitrust bill introduced by Republican Josh Hawley earlier this month takes aim at acquisitions, proposing an outright block on big tech’s ability to carry out mergers and acquisitions. Although that bill looks unlikely to succeed, a flurry of antitrust reform bills are set to introduced as U.S. lawmakers on both sides of the aisle grapple with how to cut big tech down to a competition-friendly size.

In Europe lawmakers are already putting down draft laws with the same overarching goal.

In the EU, the Commission recently proposed an ex ante regime to prevent big tech from abusing its market power. The Digital Markets Act is set to impose conditions on intermediating platforms who are considered ‘gatekeepers’ to others’ market access.

While over in the UK, which now sits outside the bloc, the government is also drafting new laws in response to tech giants’ market power. It has said it intends to create a ‘pro-competition’ regime that will apply to platforms with so-called  ‘strategic market status’ — but instead of a set list of requirements it wants to target specific measures per platform.

Google to offer 40,000 developer scholarships in Africa; continues accelerator program

Google today announced the launch of 40,000 new developer scholarships in Africa. Google will offer the scholarships — created in partnership with tech talent companies Pluralsight and Andela to developers spread across mobile and cloud development tracks.

According to the statement released by the company, Google will give full scholarships (with certifications in Android and cloud development) to the top 1,000 students (beginner and intermediate developers) at the end of the training.

The announcement, which took place from a virtual event, was also detailed in the company’s blog post. The company hosted key stakeholders in Africa’s tech ecosystem and “reviewed opportunities unfolding throughout the internet economy, paying special attention to the support of developers and startups in the region.”

In addition to the opportunities presented to developers, Google announced the continuation of its accelerator program for African startups. Going into this year, the Google for Startups Accelerator program will be hosting its sixth cohort. The three-month program is expected to start on June 21; applications are open until May 14. A virtual affair, this cohort will be a continuation of how the previous cohort panned out. 

“Last year, due to the COVID-19 pandemic, the first virtual class of Google for Startups Accelerator Africa was launched. It was the first all-online iteration of Google’s accelerator program for Africa and saw 20 startups from seven countries undergo a 12-week virtual journey to redefine their offering while receiving mentoring and attending workshops,” said Onajite Emerhor, head of Google for Startups Accelerator Africa in a statement.

“This year, with the 6th cohort, we want to continue to play our part by supporting developers and startups within the Africa tech ecosystem, ensuring they get all the access and support necessary to see them continue to grow.”

Formerly known as Google Launchpad Accelerator, Google for Startups Accelerator Africa has worked with up to 50 startups across 17 African countries. In 2020, it selected 20 startups into the program (eight from Nigeria, six from Kenya, two from South Africa and one each from Ghana, Tunisia, Ethiopia and Zimbabwe). It expects to also select startups from additional countries, including Egypt, Senegal, Tanzania and Uganda, for this sixth cohort.

“The growth of entrepreneurship is crucial, especially in the African context. African developers and startups play a critical role in the transformation of the African economy, creating new opportunities and paving the way for the economic and social development on the continent that we want to see. We recognize Africa’s exceptional digital potential, and that is why Google is committed to providing this critical support for African startups,” says Nitin Gajria, managing director of Google Sub-Saharan Africa.

Developer communities remain one of the most vital aspects of Google’s operations in the continent. It currently has more than 120 communities across 25 African countries in Sub-Saharan Africa. Besides the just-announced scholarship program and other communities like Google Developer Groups and Developer Student Clubs, Google has provided an intersection between developers and other tech players by building a Google Developers Space in Nigeria.

Solar roof-tile and energy startup SunRoof closes €4.5M led by Inovo Venture Partners

SunRoof is a European startup that has come up with a clever idea. It has its own roof-tile technology which generates solar power. It then links up those houses, creating a sort of virtual power plant, allowing homeowners to sell surplus energy back to the grid.

It’s now closed a €4.5 million round (Seed extension) led by Inovo Venture Partners, with participation from SMOK Ventures (€2m of which came in the form of convertible notes). Other investors include LT Capital, EIT InnoEnergy, FD Growth Capital and KnowledgeHub. 

Sweden-based SunRoof’s approach is reminiscent of Tesla Energy, with its solar roof tiles, but whereas Tesla runs a closed energy ecosystem, SunRoof plans to work with multiple energy partners.

To achieve this virtual power company, SunRoof CEO and serial entrepreneur Lech Kaniuk (formerly of Delivery Hero, PizzaPortal, and iTaxi), acquired the renewable energy system, Redlogger, in 2020.

SunRoof’s platform consists of 2-in-1 solar roofs and façades that generate electricity without needing traditional photovoltaic modules. Instead, they use monocrystalline solar cells sandwiched between two large sheets of glass which measure 1.7 sq meters. Because the surface area is large and the connections fewer, the roofs are cheaper and faster to build. 

SunRoof give homeowners an energy app to manage the solar, based on Redlogger’s infrastructure

Tesla’s Autobidder is a trading platform that manages the energy from roofs but is a closed ecosystem. SunRoof, by contrast, works with multiple partners.

Kaniuk said: “SunRoof was founded to make the move to renewable energy not only easy, but highly cost-effective without ever having to sacrifice on features or design. We’ve already grown more than 500% year-on-year and will use the latest funding to double down on growth.” 

Michal Rokosz, Partner at Inovo Venture Partners, commented: “The market of solar energy is booming, estimated to reach $334 billion by 2026. Technology of integrated solar roofs is past the inflection point. It is an economical no-brainer for consumers to build new homes using solar solutions. With a more elegant and efficient substitute to a traditional hybrid of rooftops and solar panels, SunRoof clearly stands out and has a chance to be the brand for solar roofs, making clean-tech more appealing to a wider customer-base.”

The team includes co-founder Marek Zmysłowski (ex-(Jumia Travel and HotelOnline.co), former Google executive, Rafal Plutecki, and former Tesla Channel Sales Manager, Robert Bruchner.

There are rollout plans for Sweden, Germany, Poland, Switzerland, Italy, Spain, and the US.

Alchemy raises $80M at a $505M valuation to be the ‘AWS for blockchain’

Blockchain developer platform Alchemy announced today it has raised $80 million in a Series B round of funding led by Coatue and Addition, Lee Fixel’s new fund. The company previously raised a total of $15.5 million, so the latest financing brings its total raised to $95.5 million since it launched in 2017.

The latest round caught our attention for a few reasons.

First, the company, which describes itself as the backend technology behind the blockchain industry, went from public launch to a $505 million valuation in a matter of just eight months. During that time, Alchemy says it powered over $30 billion in transactions for tens of millions of users all over the world. Second, the startup says it also already powering the majority of the NFT industry.

And finally, its investors in the round include a high-profile mix of institutions and individuals such as DFJ Growth, K5 Global, the Chainsmokers, actor Jared Leto and the Glazer family (owners of the Tampa Bay Buccaneers and Manchester United). They joined existing backers including Yahoo co-founder and former CEO Jerry Yang, Pantera Capital, Coinbase, SignalFire, Samsung, Stanford University, Google chairman and Stanford University President John L. Hennessy, Charles Schwab, LinkedIn co-founder Reid Hoffman and others.

Sources with inside knowledge of Alchemy’s operations tell TechCrunch that the company has already grown its business more than eightfold since it signed the Series B term sheet. They also said Alchemy had over $300 million of investor demand wanting to enter the round and is being inbounded to do another financing at “many times” the current valuation.

TechCrunch talked with Alchemy co-founders Nikil Viswanathan (CEO) and Joe Lau (CTO) about the raise and their passion for the startup’s mission was clear. As is its explosive growth.

“We realized that in order for space to thrive and build to its full potential, we needed to build a developer platform layer for blockchain,” Viswanathan told TechCrunch.

Alchemy’s goal is to be the starting place for developers considering to build a product on top of a blockchain or mainstream blockchain applications. Its developer platform aims to remove the complexity and costs of building infrastructure while improving applications through “necessary” developer tools.

The startup powers a range of transactions across nearly every blockchain vertical, including financial institutions, exchanges, billion-dollar decentralized finance projects and multinational organizations such as UNICEF. It has also quickly become the technology behind every major NFT platform, including Makersplace, OpenSea, Nifty Gateway, SuperRare and CryptoPunks.  

“Every time you open DoorDash, you’re using Amazon’s infrastructure,” Lau said. “Every time you interact with an NFT, you’re using Alchemy. It’s being powered by Alchemy underneath the hood.”

While the pair would not provide hard revenue figures, the company – which operates as a SaaS business – says it increased its revenue by 600% in 2020.

For inside players, Alchemy’s efforts are paving the way for the whole industry. 

“The cryptoeconomy is innovating faster than any technological movement that came before it, and Alchemy has been a key driver of that,” said Coinbase President and COO Emilie Choi. “Alchemy enables developers to build the rich ecosystem of applications necessary for mainstream blockchain adoption.”

Pantera Capital’s Paul Veradittakit describes Alchemy as “the Amazon Web Services (AWS) of the blockchain industry” that is “enabling the vision of a decentralized web.”

“While in Web 2.0, Microsoft, Apple and AWS are three of the most valuable companies in the world because they are the developer platform powering the computer and internet industries, Alchemy is primed to do the same for the blockchain,” he said.

The company believes the comparison to AWS is fair, noting that: “Just as AWS provides the platform that powers Uber, Netflix and much of the technology industry, Alchemy powers infrastructure for many large players in the blockchain industry.”

Alchemy plans to use its new capital to expand its developer platform to new blockchains, fuel global expansion and to open new offices in the U.S. and globally. The startup is based in San Francisco and is planning to open an office in New York.  

“We are going to use the funds to support new chains with our developer platform,” Viswanathan said. “We also expect to 5x the team this year.”

But to be clear, Alchemy prides itself on being lean and mean.

“We just went from 14 to 22 employees,” Lau said. “We have intentionally wanted to keep the team as small as possible.”

The blockchain space has been the subject of increased investor interest as of late.

In March, BlockFi, which describes itself a financial services company for crypto market investors, announced it had closed on a massive $350 million Series D funding that valued it at $3 billion. Also last month, Chainalysis, a blockchain analysis company, revealed the close of $100 million in Series D financing, which doubled its valuation to over $2 billion.

Big tech earnings in less than 500 words

This afternoon Alphabet and Microsoft and Pinterest reported their quarterly earnings results for the first three months of 2021. Microsoft and Pinterest have rapidly lost value after reporting their results, while Alphabet appreciated after its own earnings download.

Sparing you a deluge of numbers, here’s what TechCrunch is pondering from each report in as few words as possible:

  • Alphabet’s earnings were strong across a number of fronts; investors cheered. YouTube revenue grew nearly 50% to $6.0 billion, search ads performed well, and even the infamously unprofitable “Other Bets” ground managed to post nearly $200 million in revenue. But the most notable result from the technology conglomerate was its cloud results. Google Cloud grew from $2.777 billion in revenue and an operating loss of $1.73 billion in the year-ago quarter to revenues of $4.047 billion and an operating loss of just $974 million. The Mountain View-based agglomeration of tech services is building not only a material revenue stream out of a non ad-based product, but one that could generate material operating income in time. If trends hold.
  • Microsoft’s earnings report was pretty good despite Wall Street disinterest. Microsoft grew 17% from its year-ago quarter while pushing its operating income up 31% to $17.0 billion; faster growing income compared to revenue is indicative of operating leverage. The company’s net income actually grew even more rapidly than its operating income, which is sharper than expected. Azure, the company’s Google Cloud and AWS competitor, grew 50% in the quarter which met expectations per CNBC. Microsoft remains incredibly rich, and its most future-looking products put up some pretty big numbers. Not bad!
  • Pinterest posted a monster quarter. Wall Street was not impressed. Pinterest’s Q1 2021 revenue of $485.230 million was up 78% compared to the year-ago quarter, the company cut its net loss from $141.196 million to $21.674 at the same time, and its non-GAAP net income rose from -$59.916 million to $78.527 during the first three months of the year. The result of this wildly impressive quarter? Its shares are off more than 8%. One reason Pinterest may have dropped is that the company missed on monthly active users (478 million reported, 480.5 million expected), and warned that it would see “sequential operating expense growth […] accelerate in Q2.” But with the company anticipating 105% revenue growth in the current quarter and mid-teens MAU growth in the same period, it’s hard to be that mad at the company. Unless we’re missing something major here, Pinterest is being punished by investors who simply expected even more?

And there you have it, a very quick catch up. I am not supposed to cover earnings much anymore, but while you can take the pig from the shit, it’s hard to get the pig to not blog about earnings!