WeWork China’s former tech head introduces on-demand work pods for mental health

At a time when China’s zero-COVID policy continues to interrupt offline work and face-to-face interactions, Dominic Penaloza, the former head of innovation and technology at WeWork China, is introducing a bold idea — on-demand work booths placed in public locations — and has managed to quickly raise capital for the business.

Penaloza named his new venture Peace in hope of boosting mental health for those using the company’s quiet, privacy-first space to avoid crowded offices and noisy cafes. Peace announced this week that it has raised a seven-figure funding round from a group of business partners and entrepreneurs.

Peace is the latest iteration of Penaloza’s continuous experiment with flexible work. In 2019, the executive spearheaded an internal project to offer pay-as-you-go spaces at WeWork China. A year later, he moved on to found his own proptech-focused startup studio, which incubated a similar on-demand workspace service but tapping third-party landlords.

Seven-month-old Peace launched its first batch of portable pods last week at three high-end malls and two office buildings in the heart of Shanghai. It aims to deploy 1,000 of them across the metropolis in the coming year, Penaloza said on a video call from one of the pods in the mall.

“We are selling privacy on demand,” the founder said when I asked if the booths would be equipped with security cameras, an infrastructure that has become ubiquitous across China and often raises privacy concerns.

“We don’t plan to put cameras in… I think it’s more important to make our users feel that it’s really 100% of private space. No one can hear what they’re saying. And of course, no one can see their screen or them.”

Each Peace pod is 35 square meters big with a meeting table that fits four people. The portable box comes with an app-enabled lock, electric sockets, WiFi, soundproof walls, and ventilation fans. It also features COVID-19 prevention technology provided by a startup called LumenLabs that utilizes the novel far UVC method to inactivate viruses and bacteria.

Each of Peace’s work pods fits four people. Image: Peace

The long list of equipment explains the steep cost of the pods — in the mid tens of thousands of yuan (1 USD = 7.16 yuan as of writing) to manufacture one.

Penaloza believes his team has figured out a sustainable revenue model. Each pod costs 11.25 yuan per 15 minutes, but this is a reference price, the founder said, and in the future, the cost can vary based on location and real-time supply and demand. It isn’t cheap — an Americano costs about 25 yuan at an average cafe in China’s top-tier cities like Shanghai and Shenzhen, but if four people were to split the cost of 45 yuan, plus the upsides that a pod brings — privacy and stable internet — and if Peace reaches a meaningful density, it could be a viable business.

Peace also found a sweet spot in its relationship with landlords, including retail spaces, office building lobbies, urban renewable spaces, transportation hubs, exhibition centers, and residential developments.

“We don’t rent the space,” explained Penaloza. “Our formula for working with real estate companies is one of our most secret sauces because this hardware, in the landlord language, is actually an asset enhancement. It should be part of the renovation budget that they have from year to year to make the building better and keep the building competitive, so Peace pods would attract white-collar people to spend more time in a building.”

“Even when we put it in an office lobby, even though everyone has an office upstairs, people still use it, especially in China where hybrid work is not popular yet, because small meeting rooms in offices are frequently fully utilized, and everyone needs peace and quiet from time to time,” the founder added.

Working with landlords also helps Peace save on maintenance costs. Since the COVID outbreak, the Chinese government has started asking operators of enclosed spaces to clean their facilities after use. Peace’s tech platform automatically alerts the property manager at the end of every booking, and a cleaner will be sent to the pod, a process that can be as quick as spraying surfaces with disinfectant and wiping them.

Investors in Peace consist mostly of entrepreneurs, including Joachim Poylo and Francois Ammand from Aden Group, Chris Brooke from Brooke Husband, Pablo Fernandez from CleanAir Spaces, Patrick Berbon from CM Venture, Hei Ming Cheng from Kailong, Wei Cao from Lumenlabs, Penaloza himself, and Panda Eagle Group.

WeWork China’s former tech head introduces on-demand work pods for mental health by Rita Liao originally published on TechCrunch

Musk says Twitter will offer “amnesty” to suspended accounts

Elon Musk said Thursday Twitter will grant “a general amnesty” to accounts that had been suspended from the platform beginning next week. The CEO posted a poll the day earlier over whether the platform should restore affected accounts.

The news comes within a week of Musk also ending former president Donald Trump’s ban from the platform after running a similar poll. Trump was banned after the January 6, 2021 attack on the U.S. Capitol, but said he doesn’t intend to return to the platform.

Musk’s poll to users included a caveat that suspended account holders could rejoin the platform “provided they have not broken the law or engaged in egregious spam.” Around 3.2 million users responded to the poll, which voted 72.4% in favor of amnesty.

“The people have spoken. Amnesty begins next week. Vox Populi, Vox Dei,” Musk said, using a Latin phrase that means “The voice of the people is the voice of god.”

Historically, Twitter has banned accounts that glorify hate and harassment, have the potential to incite violence or rampantly spread misinformation that can lead to harm. Some high profile individuals who were banned include MyPillow CEO Mike Lindell after he made a series of claims that Trump actually won the 2020 presidential election; former Trump advisor and former executive chairman of Breitbart Steve Bannon after he said Anthony Fauci and FBI Director Christopher Wray should be beheaded; and Proud Boys founder Gavin McInnes for violating the site’s policy of prohibiting violent extremist groups.

It’s unclear from Musk’s brief tweet how Twitter will deal with content moderation in the future, now that more potentially problematic voices will be returning to the platform. These concerns have only been exacerbated by Musk’s mass layoffs and the general exodus of employees who’d rather quit than be “hardcore.”

Musk says Twitter will offer “amnesty” to suspended accounts by Rebecca Bellan originally published on TechCrunch

Stellantis to restructure European dealer network in July 2023

Stellantis, the parent company to brands like Jeep, Dodge, Fiat, Maserati and Peugeot, said Thursday it would reorganize its European dealer networks in July 2023 in an effort to cut costs and support its investment into electrification.

Starting next summer, Stellantis said it would end all current sales and services contracts with dealers in Austria, Belgium, Luxembourg and the Netherlands, with the rest of Europe to follow, for all 14 of its brands. Stellantis will move towards an agency model that gives carmakers more control of sales transactions, prices and contracts with customers, and dealers will exist to help with deliveries and servicing.

This would lead to an “increased assumption of costs by Stellantis and the reduction of exposure to the risks of our distributors,” according to a statement released by the company.

“Stellantis’s vision is to promote a sustainable Distribution model and all involved stakeholders will benefit from these changes with the customer experience at the core,” said Uwe Hochgeschurtz, Stellantis chief operating officer in Europe, in a statement. “Customers will be able to take advantage of a multi-brand and multi-channel approach with a wider range of services. Dealers will have a new and efficient business model aimed at benefitting from Stellantis’ 14-brand portfolio, creating synergies, optimizing distribution costs and offering additional sustainable mobility solutions. Our partners play an important role by being the representatives of our brands in the field.”

Light commercial vehicles under the Stellantis umbrella are expected to enter the new distribution structure from January 1, 2024, a spokesperson told Reuters.

The move is part of Stellantis’s Dare Forward 2030 strategic plan, which aims to reach carbon net zero emissions by 2038. Included in the plan is a goal to achieve 100% passenger car battery electric vehicle (BEV) sales mix in Europe by the end of 2030. By 2025, Stellantis aims to launch only BEVs in the luxury and premium segments before electrifying its entire portfolio. In Europe, all launched will be BEVs from 2026 and beyond, the company said.

Stellantis also recently launched a strategy for its business unit dedicated to circular economics, which involves reaching sustainability and profitability through the tried and true method of remanufacture, repair, reuse and recycle. Dealerships will still come in handy for Stellantis’s brand of circular economics — for example, any car parts that the company remanufactures can be distributed and sold across dealership networks.

Stellantis to restructure European dealer network in July 2023 by Rebecca Bellan originally published on TechCrunch

Twitter layoffs trigger oversight risk warning from Brussels

In another move that’s being frowned upon by European Union regulators, Elon Musk-owned Twitter has closed its Brussels office per a report in the Financial Times — citing sources with knowledge of the departures.

Staffers in the office were focused on European Union digital policy, working in close proximity to the seat of power of EU’s executive, the European Commission — an entity with an ongoing role in EU lawmaking. The Commission will also soon take on a major new oversight role for the bloc’s updated digital rulebook, the Digital Services Act (DSA).

Given the obviously strategic function of the Brussels office, its termination could be interpreted as either a major strategic blunder by Musk, if he’s failed to understand the importance of having an policy presence at the heart of the EU to influence lawmakers and law enforcers — or a very obvious (and intentional) snub to the bloc and its regulations that signals bad news ahead for Twitter’s compliance with regional laws.

Either way, the Commission does not appear to be taking the development lying down.

In fresh remarks today, following the latest Twitter layoff revelations — and following a visit by an EU commissioner to Twitter’s Dublin office (which does, for now, still exist) — the EU’s executive has given the clearest indication yet that it could appoint itself as overseer of the bird site’s compliance with the incoming DSA.

If that happens, Musk’s regulatory risk in Europe will really take flight. So the stand-off is real.

Bye bye Brussels?

According to the FT, the last two remaining Twitter public policy staffers, Julia Mozer and Dario La Nasa — who its reporting says were in charge of the company’s digital policy in Europe — departed Twitter last week, resulting in the Brussels office being entirely disbanded.

Since Musk took over the social media firm, Twitter’s comms team has not responded to press requests seeking comment so it was not possible to obtain an official confirmation of the closure of the office.

We were also unable to reach either Mozer or La Nasa at the time of writing to confirm the FT’s reporting. Neither appear to have tweeted about leaving the company — nor updated their LinkedIn profiles to announce a change of job as yet.

The newspaper reports that other Twitter policy staffers left the small Brussels office at the start of the month — as part of an earlier global headcount cull by Musk, who reportedly moved to slash 50% of jobs earlier this month. Further smaller layoffs have followed.

Last week, Politico reported that another Brussels-based Twitter staffer, Stephen Turner — who, per his LinkedIn profile, had worked at the company for over six years, most recently as Twitter’s EU public policy director — was among the employees laid off by Musk.

Turner tweeted Monday week that he had “officially retired from Twitter”. “From starting the office in Brussels to building an awesome team it has been an amazing ride,” he added, describing himself as “privileged and honoured” to have worked with “the best colleagues” and “great partners”.

After 6 years I am officially retired from Twitter

From starting the office in Brussels to building an awesome team it has been an amazing ride. Privileged & honoured to have the best colleagues in the world great partners, and never a dull moment

Onto the next adventure

— stephen turner (@sturner) November 14, 2022

Turner could not confirm any more recent departures from his former office but he was able to tell us there had been a total of six staff working in Brussels prior to Musk’s Twitter takeover — only two of whom were left when he departed last week (which aligns with the FT’s reporting of no Brussels office left following the departures of the last remaining employees).

So, er, the big question now is WTF happens next for Twitter’s ability to engage with EU rules?

The Brussels-based European Commission will shortly begin overseeing regulation of large Internet platforms under the incoming DSA — a major update to the bloc’s digital rulebook that will definitely apply to Twitter. Although the company could — and perhaps, on paper, should — avoid centralized enforcement by the Commission itself which is supposed to take on that role only for so-called very large online platforms (aka VLOPs), with more than 45M users in the region. (Otherwise the job falls to authorities within EU member states — or to a lead authority in the case of a business having a main establishment in the EU.)

But large-scale layoffs at Twitter have led to rising concern at the Commission and among other EU regulators that it will be unable to comply with major EU laws — covering areas like illegal content removals (as the DSA does) or data protection (under the General Data Protection Regulation; GDPR). Which is driving Brussels to adopt a more aggressive tone toward Twitter.

Earlier this month, Twitter’s lead data protection regulator in the EU — Ireland’s Data Protection Commission — also sought a meeting with the company after a trio of senior compliance staff resigned. But, for now, EU data protection authorities appear to be keeping their powder dry and opting to monitor developments.

There’s more, though. Twitter is signed up to two voluntary EU codes, established by the Commission — starting back in 2016 — one to combat the spread of online hate speech; and a separate code focused on fighting online disinformation.

Under Musk, Twitter’s compliance with commitments its prior leadership made under the latter disinformation code already look like a joke, as we’ve discussed before.

While, today, the Commission released details of the seventh evaluation of the Code of Conduct on countering illegal hate speech online — which it said shows a general slow-down of progress across almost all signatories compared to the last two annual reviews. Including at Twitter.

Twitter’s performance was among those that declined vs reviews in 2021 and 2020, with the evaluation finding the company removed 45.4% and 49.8% of illegal content reported to it (so a drop of 4.4 percentage points in takedowns) — although it’s worth noting that this assessment took place between 28 March and 13 May 2022, which was prior to Musk’s takeover (which closed at the end of October). So it remains to be seen whether Musk’s approach will boost Twitter’s performance on hate speech takedowns or accelerate this slide.

Coincidentally (or not), he tweeted yesterday to claim a big reduction in hate speech impressions — which he suggested are “down by a third” vs the levels seen during a recent surge immediately after he took over the platform. So it’s a rather qualified brag tbh.

Hate speech impressions down by 1/3 from pre-spike levels. Congrats to Twitter team! pic.twitter.com/5BWaQoIlip

— Elon Musk (@elonmusk) November 24, 2022

It will certainly be interesting to see whether independent evaluations stand up or knock down Musk’s hype about his own impact on purging hate speech.

The next Commission review of the EU’s hate speech Code isn’t officially scheduled to take place for another year — although the EU said today that it plans to talk with signatories (or at least those who will meet with it) to encourage “implementations” that support compliance with the incoming DSA which it also noted might lead to a revision of the Code of Conduct in the course of 2023. So Musk’s actions (or inaction) will very likely be shaping outcomes here.

Regulators buckle up

It’s clear that disruptions at a number of major tech platforms are causing growing concern in Brussels that its regulators are in for a bumpy ride.

“I am concerned about the news of firing such a vast amount of staff of Twitter in Europe,” Věra Jourová, the EU’s vice-president in charge of compliance with the code on disinformation, told the FT. “If you want to effectively detect and take action against disinformation and propaganda, this requires resources. Especially in the context of Russian disinformation warfare, I expect Twitter to fully respect the EU law and honour its commitments. Twitter has been a very useful partner in the fight against disinformation and illegal hate speech and this must not change.”

Earlier this week, the Irish Times also reported that the EU’s justice commissioner, Didier Reynders, would be meeting with Twitter and Meta officials in Dublin following major layoff announcement at both companies. And he briefed the newspaper that tech firms risk big fines if they fail to comply with the bloc’s rules.

Tweeting today, following his meeting with Twitter, Reynders reiterated that its recent layoffs are “a source of concern” for the EU. He also said he had used the meeting to “underline” the Commission’s expectation that Twitter will comply with both its voluntary commitments (under the aforementioned codes) and with legal requirements attached to EU laws like the GDPR and the DSA.

The recent layoffs @Twitter and today’s results of the Code of Conduct against #HateSpeech are a source of concern.

In my meeting at Twitter’s HQ, I underlined that we expect Twitter to deliver on their voluntary commitments and comply with EU rules, including #GDPR & #DSA. pic.twitter.com/q0HvJZy6Au

— Didier Reynders (@dreynders) November 24, 2022

“We have always been clear that we expect online platforms to comply with their obligations and commitments under EU law and rules,” a Commission spokesperson also told us when we sought comment on Twitter layoffs earlier this week. 

Following Reynders meeting with Twitter today, the Commission issued further remarks — and dialled up its rhetoric.

In what looks like a direct shot across Twitter’s bows, vis-a-vis its DSA risk — and the clearest signal yet that the Commission will designate Twitter a very large online platform (aka VLOP) and oversee its compliance in Brussels — it said: “For those platforms that the Commission will designate as very large online platforms, the risk management obligations also include a strong component on the appropriateness of the resources allocated to managing societal risks in the Union. Among other matters, the Commission will scrutinise the appropriateness of the expertise and resources allocated, as well as the way they organise their compliance function.”

For “appropriateness of the expertise and resources allocated” read: ‘Shuttering local offices and canning EU staff will be frowned upon — hard.’

“All companies who offer their services in the Union will have to comply with the rules in the DSA,” the Commission also reiterated.

“We believe that ensuring sufficient staff is necessary for a platform to respond effectively to the challenges of content moderation, which are particularly complex in the field of hate speech. We expect platforms to ensure the appropriate resources to deliver on their commitments,” it added, pointing to the latest assessment of platforms’ actions under the hate speech code and the “slowdown in progress for most of the participating companies, including Twitter” as a “worrying trend”.

Collision course

On any standard business logic playbook, Twitter choosing this moment to shutter its Brussels policy office looks baffling — as it means the firm won’t have a local presence to lobby for its interests as lawmakers-cum-regulators take major decisions that will affect its business and could result in expensive outcomes like big fines coming down the pipe.

What Twitter does next with its Dublin office will be one to watch — so whether staff there will face further layoffs. Or — on the flip side — whether Dublin will become Musk’s chosen hub for responding to all EU regulatory matters in an attempt (likely futile) to sideline the Commission.

Musk cannot necessarily pick his preferred EU regulatory hub, either.

Earlier this month, a well-placed source suggested Twitter is already in breach of “main establishment” requirements under the GDPR’s one-stop-shop mechanism — which (currently) enables it to streamline oversight by dealing with a single privacy regulator in Ireland — rather than facing a regulatory free-for-all with any data protection authority across the EU competent to raise concerns affecting local users and pursue enforcement in its own market. (Which could lead to multiple fines being fired at it from privacy regulators around the EU.)

At the meeting with its lead privacy regulator last week, Twitter told the Irish DPC it had appointment a replacement data protection officer — a role that’s a requirement under the GDPR — naming an existing privacy staffer who’s attached to its Dublin office — as its new “acting” DPO.

Other Ireland-based employees remain critical to the company’s claim to have main establishment in Ireland — and thereby to its ability to simplify its GDPR compliance burden. So were Musk to shut down its Dublin operation entirely it would be impossible for Twitter to present even a veneer of ‘compliance as usual’ as regards data protection — again leading to an immediate amping up its regulatory risk.

So there’s now a looming prospect for Musk of double regulatory trouble in Europe — under both the GDPR and DSA. And no clear path to him avoiding a painful regulatory reckoning as he charts a collision course with EU law.

If the Commission elects to designate Twitter a VLOP under the DSA the business will face an accelerated compliance timetable with oversight kicking in in February next year — rather than in February 2024 — and with a tougher set of requirements to assess and mitigate risks on its platform.

All that compliance requirement — with far fewer staff… is… just obviously going to be a total car crash

Fines under the DSA scale up to 6% of global annual turnover. While, under the GDPR the regime already allows for fines up to 4% for major breaches. So if Twitter isn’t bankrupt yet is may just be a matter of time before its owner’s recklessness toward legal risk finishes the job.

What happens next is anyone’s guess but one former Twitter employee with knowledge of how the company managed compliance issues prior to the Musk takeover suggests the philosophy he’s applying amounts to an attitude of “we’re above the law” — or “we think the laws are stupid so we’re not going to comply”.

If that analysis is correct, the EU’s shiny new digital rulebook really is facing the ultimate ‘move fast and break things’ test — and it’s coming very, very fast.

Twitter layoffs trigger oversight risk warning from Brussels by Natasha Lomas originally published on TechCrunch

Can FTX’s bankruptcy bring order to its chaos?

Welcome back to Chain Reaction.

Last week on the podcast, we talked about the FTX collapse, which is still ongoing. This week, we’re taking a break from our Thursday news episode for Thanksgiving, but we had plenty of stories for you on the TechCrunch website, including some from our crypto event in Miami last week.

Before we get into the nitty gritty, Anita wanted to share a personal note:

Hi everyone! It feels bittersweet to share that my time at TechCrunch has come to a close, and with it, my involvement with the Chain Reaction newsletter and podcast. I have learned so much about the wild world of crypto alongside you all each week. I’m sad to say goodbye, but I know you’ll be in great hands with Jacquelyn and the rest of the TechCrunch team. As for me, please feel free to connect on Twitter, where I’m sharing more about my professional next steps. Thanks for reading and listening every week. I appreciate you all so much!

If someone forwarded you this message, you can subscribe on TechCrunch’s newsletter page.

this week in web3

Here are some of the biggest crypto stories TechCrunch has covered this week.

FTX’s bankruptcy hearing details prior control by ‘inexperienced and unsophisticated individuals’ (TC+)

Hearings that will determine the fate of FTX, once one of the largest crypto exchanges globally, began Tuesday in the U.S. Bankruptcy Court for the District of Delaware. “We are here on an unprecedented matter and I don’t say those words lightly,” James Bromley, a partner at Sullivan & Cromwell and co-head of the firm’s global restructuring practice, said during the hearing. “This is a first-day hearing well over a week after they were filed; that in itself is uncommon. But what we have here [ … ] is a different sort of animal.”

NFT marketplace Magic Eden integrates with Polygon to grow blockchain gaming

NFT marketplace Magic Eden is integrating with the Ethereum scaling layer-2 blockchain Polygon to dive deeper into the blockchain gaming and NFT ecosystems, the companies announced on Tuesday. The expansion aims to provide Magic Eden the ability to support Polygon’s ecosystem of game developers and creators. The Polygon network hosts some of the biggest web3 gaming projects and publishers like Ubisoft, Atari, Animoca Brands, Decentraland, Sandbox, among others.

FTX processed billions monthly in Africa before going bust

On November 14, Nestcoin, one of the startups leading crypto and web3 efforts in Africa, announced that it was laying off several employees. At least 30 employees across various departments were let go, while those who were left at the company had their salaries slashed by as much as 40%, according to people familiar with the matter. The news is, in part, connected to the downfall of crypto exchange FTX, according to chief executive officer Yele Bademosi.

Crypto firm Genesis says it has ‘no plans to file bankruptcy imminently’

Genesis, a digital assets financial services firm, may be in hot water as it looks to raise fresh capital for its lending unit or potentially face bankruptcy if it can’t, according to a report by Bloomberg. “We have no plans to file bankruptcy imminently,” a Genesis spokesperson said in an emailed statement to TechCrunch on Monday. “Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”

Binance’s CZ on FTX: ‘We were the last straw that broke the camel’s back’

Binance co-founder and CEO Changpeng Zhao, also known as CZ, commented on the collapse of FTX at TechCrunch Sessions: Crypto 2022. He played down his personal role in the series of events that ultimately led to FTX filing for bankruptcy. “I still don’t think I have that much influence. I think we were the last straw that broke the camel’s back. It’s not a straw that is really strong,” he told TechCrunch’s Anita Ramaswamy. “There’s a whole bunch of stuff that built up to it. I just may have happened to be the last thing that pushed it.”

the latest pod

This week, we skipped the news episode thanks to good ol’ Thanksgiving as we mentioned above. But, in Chain Reaction’s Tuesday episode we’re playing a super timely recording from Anita’s panel on stage last week with Binance founder and CEO Changpeng “CZ” Zhao. CZ sent a number of shocks through the crypto ecosystem in recent weeks so Anita dived into:

His tweets about rival exchange FTX that set off a firestorm and whether he anticipated their impact
What Binance is doing to gain user trust and demonstrate transparency despite its regulatory troubles across the globe
Binance’s revenue streams and strategy to weather a crypto downturn that just got much, much worse

Subscribe to Chain Reaction on Apple Podcasts, Spotify or your favorite pod platform to keep up with the latest episodes, and please leave us a review if you like what you hear!

follow the money

Carv valued at $40M as investors race to back web3 identity builders
Zulu banks $5M for its LatAm digital wallet amid shaky ground for crypto
Gaming developer Thirdverse raises $15 million to build web3 and VR gaming studio
Privacy and Ethereum-focused infrastructure startup Nucleo, raises $4 million seed round led by Bain Capital Crypto and 6th Man Ventures
NFT utility platform Tropee closed a €5 million in a seed round led by Tioga Capital

This list was compiled with information from Messari as well as TechCrunch’s own reporting.

Can FTX’s bankruptcy bring order to its chaos? by Jacquelyn Melinek originally published on TechCrunch

Bessemer, Playground, Root and Seraphim VCs will judge the TC Sessions: Space Pitch-off

Watching outstanding early-stage founders square off in a pitch competition is not only an essential part of TechCrunch conferences, but it’s also an attendee favorite. Seriously, who doesn’t love a pitch-off? And the Space Pitch-off is just one more compelling reason to go to TC Sessions: Space on December 6 in Los Angeles. Let’s take a look at the judges our intrepid startups will need to impress.

But first, if you have not yet done the deed, buy your pass before December 1 at 11:59 p.m. PST. When the clock strikes midnight, the prices increase.

eLet’s get back to the pitch-off. Be in the room when three of the brightest early-stage space startups take the stage in front of a live audience — for glory, media exposure, investor interest and, drumroll please, an automatic spot in the Startup Battlefield 200 at Disrupt 2023. TechCrunch handpicks a cohort of 200 early-stage startups to receive a VIP experience that includes, for starters, exhibiting all three days of the show — for free — and a shot at $100,000.

Without further delay, here are the investors the pitch-off contenders need to impress: Jory Bell, general partner at Playground Global; Mark Boggett, co-founder and CEO of Seraphim Space; Tess Hatch, partner at Bessemer Venture Partners (BVP); and Emily Henriksson, principal at Root Ventures.

Jory Bell sourced some of Playground Global’s earliest investments, including Nervana Systems (acquired by Intel). His first three investments at the firm are now unicorns and one, Velo3D, went public last year.

Bell leads the firm’s investment efforts in deep tech areas, including advanced manufacturing, aerospace, computational therapeutics, energy, genomics, materials, next-gen computing, and quantum and synthetic biology. His investment portfolio includes Mangata Networks, Relativity Space and Strand Therapeutics, to name a few.

Mark Boggett, a pioneer in space tech investment, co-founded the Seraphim Space Fund and invested in a portfolio that includes three companies that have achieved billion-dollar valuations. Previously, Boggett served as director at YFM Equity Partners, the firm behind the high-profile British Smaller Companies VCT 1 and 2.

Boggett also worked at Brewin Dolphin and Williams de Broë. He completed his undergraduate degree in accounting and finance, and he received a master’s in economics and finance from the University of Leeds.

Tess Hatch, a BVP partner based in Silicon Valley, fosters entrepreneurship in frontier technology, specifically the commercialization of space, drones, autonomous vehicles and agriculture and food technology. She currently serves as a board director for DroneDeploy, Iris Automation, Phantom Auto, and Spire Global, and as a board observer for Black Sheep Foods, Forever Oceans, Rocket Lab and Velo3D.

Hatch was included in Forbes’ 30 Under 30 in Venture Capital. She speaks and is published regularly on Bloomberg, TechCrunch and other publications on space and frontier technology. Earlier in her career, she worked for Boeing and then SpaceX, where she worked with the government on integrating its payloads with the Falcon 9 rocket.

Hatch earned a bachelor’s degree in aerospace engineering from the University of Michigan and a master’s degree in aeronautics and astronautics engineering from Stanford.

Emily Henriksson is a principal at Root Ventures, a firm focused on investing in three areas: tools and infrastructure, low-cost robotics, and hardware and data science. Prior to joining Root, she worked as a propulsion engineer and designed flight hardware for the SpaceX Falcon and supervised vehicle build for schedule-critical missions.

Henriksson also worked on the Model 3 battery module team at Tesla. She holds MS and BS degrees in mechanical engineering from Stanford and an MBA from Harvard Business School.

TC Sessions: Space takes place on December 6 in Los Angeles. Buy your pass today, and then join us to see and learn about the latest space tech and trends, meet rising-star founders and network for opportunities to build a stronger startup.

Is your company interested in sponsoring or exhibiting at TC Sessions: Space? Contact our sponsorship sales team by filling out this form.

Bessemer, Playground, Root and Seraphim VCs will judge the TC Sessions: Space Pitch-off by Lauren Simonds originally published on TechCrunch

Automating the income gap

This is going to be another one of those “let’s ask ourselves some difficult questions” newsletter introductions, so if you’re in the U.S., I certainly won’t blame you for not giving Actuator your full attention until after the holiday.

I generally approach these conversations through the same basic lens: a majority of technologies are neither inherently good nor bad. At the end of the day, it’s up to us as the arbiters of such trends to influence the resulting impact they have on this planet and its inhabitants.

Nor do I believe that most of the people who develop such technologies hope or expect them to have a net negative impact on the lives around them. I do, however, accept that — more often than not — the implementation of such technologies are beholden to broader macro trends and long-standing power structures.

Given the number of years I’ve been doing this, I suspect that many technologists are sick to death of that old talking point: the robots are coming for our jobs. And certainly, the economic trends of the last few years have afforded them a simple counterargument: There’s no one to fill the jobs they’re replacing.

As we barrel headlong into a holiday shopping season full of long hours and busy days, something to consider is what manner of impact automation has thus far had on the workforce. Some food for thought arrives in the form of this study coauthored by MIT’s Daron Acemoglu and Boston University’s Pascual Restrepo.

Acemoglu says, “These are controversial findings in the sense that they imply a much bigger effect for automation than anyone else has thought.”

We’re starting with a very clear premise here: in 21st-century America, the wealth gap is big and only getting bigger. The paper, “Tasks, Automation, and the Rise in U.S. Wage Inequality,” attempts to explore the correlation between the growing income gap and automation. The results are stark. MIT notes:

Ultimately, Acemoglu and Restrepo conclude that the effects have been profound. Since 1980, for instance, they estimate that automation has reduced the wages of men without a high school degree by 8.8 percent and women without a high school degree by 2.3 percent, adjusted for inflation.

Image Credits: xPACIFICA / Getty Images

I tend to agree with the premise that in the short-term, automation will displace jobs, and in the long-term it has the potential to create more, better jobs. As I’ve expressed on these pages numerous times, I feel strongly that it’s the role of government and corporations alike to accelerate the latter and make sure the existing workforce is able to make that transition. For those people who can’t make the jump to more technical roles for any number of reasons, these institutions need to ensure that human beings don’t simply fall through the cracks in the name of progress.

But I also have a fairly cynical view when it comes to the ultimate ends for these conversations. Ask yourself: What is the end game here? The simple answer is: Profit. If the best thing for a corporation’s bottom line is the automation of all blue-collar roles, do we have faith that companies won’t automate all workers out of a job out of the goodness of their heart?

Precedent is important to an extent. As someone pointed out to me once, the only job that has been fully automated out of existence since 1950 is the elevator operator. Can we continue to project that trend going forward, as technology grows exponentially more advanced? In my experience, such precedent can only take us so far, and if I’m being pragmatic to a fault about this future vision, it’s not entirely impossible to imagine a future where all manual labor is automated away.

Is that a good fate or a bad one? Your results will vary, depending on factors like your existing station in life and skill set. It also may come down to whether you’re capable of envisioning the transition from late-capitalism to post-scarcity. If automation leads to an abundance of product, is there a future in which such abundance doesn’t result in further wealth disparity? I’d certainly like to think so.

A little food for thought as you wait to come down from the tryptophan highs for long enough to take advantage of some early Black Friday deals.

Another reason so much of this is top of mind for me is the unavoidable reality of mass layoffs. Sorry to be such a downer during a holiday week (don’t say I didn’t warn you), but it seems doubtful we’ve seen the last of this. There’s no easy time to lose a job, but there’s something extra devastating about losing it in the lead-up to the holiday season — already a profoundly difficult time for many.

Thousands of people are facing that exact reality right now. I recently reported on widespread layoffs at Amazon that followed cuts at Meta, Salesforce and more. The Amazon reports of up to 10,000 job cuts followed our own reporting of “consolidation” within the company’s robotics wing.

Image Credits: Amazon

An interesting side note in all of that is an internal letter from Ken Washington, the head of Amazon’s consumer robotics division (entirely separate from the industrial wing, mind) surfaced by Business Insider. The former Ford executive notes:

We are committed to the future of consumer robots and, as Dave said, we will further prioritize what matters most to our customers and the business. Our vision remains intact that customers will want at least one robot in their home or business because they are invaluable home assistants, endearing companions, and trusted helpers that make every day better.

The “Dave” here is Dave Limp, who heads the consumer devices category, which includes products like Echo, Fire tablets and Kindle. That division is said to make up a considerable portion of the 10,000 or so jobs Amazon is reportedly cutting. The division also now houses the consumer robotics effort that includes Astro and (theoretically) iRobot, assuming newly emboldened federal regulators don’t end up shooting that deal down.

The initial report categorizes Washington’s letter as uncharacteristically straightforward with regards to job security (the company has yet to comment on the note). It’s understandable, though. After all, the company has trimmed some efforts requiring long runways in its Robotics division, so if I were on the Astro team under the broader devices umbrella, I’d likely be a bit wary myself. Amazon has, of course, been extremely bullish about both home robots generally and its position as a leader in that category.

Image Credits: Nuro

Meanwhile, earlier this week, autonomous delivery company Nuro confirmed that it’s laying off 300 people — or roughly 20% of its workforce. This follows job cuts for robotics companies Iron Ox and Berkshire Grey. In all of these cases, we’re talking about very well-funded startups. That makes these sorts of things extremely hard to square from the outside. In Nuro’s case, the company’s leadership takes responsibility for its own overhiring when things were looking brighter.

The company noted in a letter to its staff:

Each and every one of you have made important contributions to this company, and saying goodbye to talented Nurons is not a decision we have taken lightly. For those of you leaving Nuro, we are very sorry for this outcome — this is not the experience we wanted to create for you. We made this call and take full responsibility for today’s circumstances.

Here’s something I can tell you having been through the layoff wringer a couple of times myself (don’t go into publishing, kids): Everyone can tell you it’s not your fault. You can know deep in your bones that it’s not your fault. But it’s still extremely difficult not to blame yourself — not to second-guess and think about the one or two things you could have done to keep your job.

But here’s the fact: The economy sucks. If the macroenvironment is having this kind of impact on well-established corporations, newer and less established firms are far from safe. As I noted in my Boston writeup last week, even well-funded firms are being extremely cautious about hiring right now. Those who are nearing the end of their existing runway, meanwhile, are going to have to ask some extremely difficult questions. It’s just not a good time to be raising money, full stop.

For those reasons, it’s probably safe to say that we will see even more promising startups fall apart at the seams before this is all over. If you were counting on a raise to survive and no funding is forthcoming, your options are suddenly extremely limited. And as we’re all well aware here, hardware iteration in particular generally requires long runways. All of those VCs who promised to stick it out with their deep tech investments through thick and thin, this is when you put your money where your mouth is.

Image Credits: Soft Robotics

That’s not to say the well has completely dried up, of course. I’m hearing about some big rounds over the horizon. Meanwhile, established companies are continuing to raise. Things seem to be slightly easier for those firms that have already proven themselves in the world. Soft Robotics, who we’ve covered quite a bit over the years, just announced a $26 million Series C, fittingly led by Tyson Foods’ investment wing, Tyson Ventures.

“At Tyson, we are continually exploring new areas in automation that can enhance safety and increase the productivity of our team members,” Tyson Ventures’ Rahul Ray said in a release. “Soft Robotics’ revolutionary robotic technology, computer vision and AI platform have the potential to transform the food industry and will play a key role in any company’s automation journey.”

Why massage robots? Maybe the better question is why not massage robots? Wikipedia tells me that the electric massage chair has been kicking around Japan since before World War II (a site called Massage Chair Planet appears to back up this claim) — one could certainly make the argument that this life blood of Sharper Image and Brookstone are massage robots in their own right. And certainly the push to make massages more readily available without the potential for human exploitation is a solid enough goal.

I will hold off on any evaluation of Aescape’s efficacy (I’m not entirely convinced this isn’t a gimmick, if I’m being honest) until I have the opportunity to use one (I think I may have just volunteered myself), but Valor Siren Ventures and Valor Equity Partners appear convinced. The firms co-led a $30 million Series A for the New York–based firm. A number of others participated, including 5x NBA All-Star and Beach Boy nephew, Kevin Love.

Here’s founder and CEO Eric Litman:

Our team at Aescape is working to bring beautifully-designed, fully-automated, therapeutic massage and wellness experiences to market with a solution that combines innovative research, revolutionary technology, and a holistic approach to physical wellness and recovery. This funding means that our partners are not only investing in our shared vision and world-class team, but also in the future of the wellness industry overall. We’re grateful to our investors for believing in our dream, and we look forward to launching The Aescape Experience in 2023.”

Image Credits: MIT

A couple of cool research projects that deserve some attention this week. The first one comes from MIT’s Center for Bits and Atoms. The team is developing self-assembling robots that utilize small units called “voxels.” These modular pieces carry power and data and are capable of moving across a grid and connecting with themselves to form larger structures.

The team notes, in a paper published in “Nature”:

Our approach challenges the convention that larger constructions need larger machines to build them, and could be applied in areas that today either require substantial capital investments for fixed infrastructure or are altogether unfeasible.

A lot of folks — including the Defense Advanced Research Projects Agency (DARPA) — can’t wait to get their hands on this sort of technology. A fully autonomous version is currently still “years away,” per the team.

Image Credits: North Carolina State University

As to the issue of slow swimming soft robots, a team at North Carolina State University has developed a clever manta ray–inspired design capable of moving up to 3.74 body lengths per second. That marks a sizable increase over other systems that have difficulty moving one body length in that time.

“To date, swimming soft robots have not been able to swim faster than one body length per second, but marine animals — such as manta rays — are able to swim much faster, and much more efficiently,” the paper’s co-author, Jie Yin, says in a release. “We wanted to draw on the biomechanics of these animals to see if we could develop faster, more energy-efficient soft robots. The prototypes we’ve developed work exceptionally well.”

A drawing from Boston Dynamics’ suit. Image Credits: Boston Dynamics

And this week, a small update to the war between Boston Dynamics and Ghost Robotics. The latter has more than enough salt for an entire Thanksgiving dinner in its response to a patent lawsuit. A Ghost Robotics rep told TechCrunch:

Ghost Robotics’ success has not gone unnoticed by Boston Dynamics. Rather than compete on a level playing field, the company chose to file an obstructive and baseless lawsuit on November 11th in an attempt to halt the newcomer’s progress. Boston Dynamics is drawing on their considerably larger resources to litigate instead of innovate.

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Image Credits: Bryce Durbin/TechCrunch

Automating the income gap by Brian Heater originally published on TechCrunch

India’s AIIMS hit by outages after cyberattack

India’s leading public medical institute, All India Institute of Medical Services, or AIIMS, is experiencing outages following a cyberattack.

The outages are affecting hundreds of patients and doctors accessing primary healthcare services, including patient admission, discharge and billing systems.

Established in 1956, AIIMS holds thousands of medical undergraduate and postgraduate students. It is also one of the biggest state-owned hospitals, with a capacity of over 2,200 beds.

The cyberattack, reported on Wednesday evening in New Delhi, appears to be consistent with a ransomware attack as the attackers modified the extensions of infected files, hospital authorities said.

AIIMS officials told TechCrunch that patient care services have been badly impacted since early Wednesday.

The medical institute moved to manual operations, including writing patient notes by hand, as the server recording patient data stopped working. The outages have resulted in long queues and errors in handling emergency cases.

After the initial few hours of disruption, the hospital authorities confirmed the cyberattack in a statement. Outages continued through Thursday.

“We are not able to send many blood investigations, request imaging studies and are not able to view previous reports or images. Many such operations are being done manually, which takes more time and is prone to errors,” a resident doctor, who asked not to be named as they were not authorized to speak to the press, told TechCrunch.

The hospital authorities later on Thursday directed doctors to continue to use hand-written notes, including signing birth and death certificates by hand while the systems remain inactive.

A team with the National Informatics Centre is working closely with the Indian Computer Emergency Response Team to help with the organization’s recovery. An effort to restore the data from backups is under way, according to a person with direct knowledge of the incident.

Meanwhile, several law enforcement agencies, including the Central Bureau of Investigation and the Intelligence Fusion & Strategic Operations of Delhi Police, are investigating the incident and the people behind the attack. The police department has also lodged a formal complaint on the matter.

Details of whether the attackers could access any patient data have yet to be publicly announced.

India’s AIIMS hit by outages after cyberattack by Jagmeet Singh originally published on TechCrunch

3 views: How wrong were our 2022 startup predictions?

What a decade this year has been. While prediction pieces always come with a large asterisk because no one knows literally anything about what may play out in the future — such as massive shocks to large startup sectors — our perspectives about 2022 have aged … interestingly.

Last year, Natasha Mascarenhas, Alex Wilhelm, and Anna Heim spotlighted three different startup theses that may define the coming 12 months. Now, we’re fact-checking how accurate those predictions were, plus what we’d change about our perspectives. We know. Humble.

For an light holiday riff, we’re talking about what happened with the M&A space, open source, and usage-based pricing. Let’s have some fun!

Natasha: Let’s talk about acquisitions

Last year, I predicted that M&A would evolve to include a riskier type of ambition. I cited Twitter’s hunger for a Slack competitor and Nike’s infatuation with NFT collectibles. I even reminded founders that startups need to “stay disciplined even amid a cash-rich environment” instead of “spinning up lukewarm climate and web3 strategies because that’s what they think their cap table wants to hear.” (And that culture and technology are hard to integrate at the same time).

3 views: How wrong were our 2022 startup predictions? by Natasha Mascarenhas originally published on TechCrunch

Netflix is working on ‘brand-new AAA PC game’ based on job listings

Netflix has put up more than a dozen job listings on its website for Netflix Games Studio’s Los Angeles office, as spotted by Mobilegamer.biz. These listings give us a few hints about the company’s plans for the new studio. In particular, Netflix is hiring a game director to work on “a brand-new AAA PC game”.

Last month at TechCrunch Disrupt, Netflix VP of Gaming Mike Verdu originally announced that his company was opening a new studio in Southern California. Verdu also said that Chacko Sonny would be leading the studio. Sonny is the former executive producer on Overwatch.

Sonny left Blizzard Entertainment, the company behind Overwatch, while the company was dealing with a California lawsuit for sexual harassment and discrimination as well as an investigation by the Securities and Exchange Commission. He was also in charge of the development of Overwatch 2.

And now it seems like Netflix wants to put together the core team for the initial project of Netflix Games Studio in Los Angeles. The game director will be in charge of a AAA PC game. That would be the company’s first PC game as Netflix currently only offers games for smartphones and tablets.

In the video game industry, AAA projects are major games with very large budgets and development teams. The game director will be in charge of developing the “world/characters/narrative that are worthy of a Netflix film/TV series.” The job listing also mentions experience with Unreal Engine as well as first-person and/or third-person shooter games.

It seems like there aren’t that many people working for the studio just yet as Netflix is also looking for an art director and a technical director. There are also job listings for lead artists and lead engineers.

Netflix considers gaming as a long-term project. At TechCrunch Disrupt, Mike Verdu said that Netflix was still in the very early stages of its gaming initiative.

The company currently offers 40 different games. There are spin-off games based on popular Netflix shows like Stranger Things, classic mobile games like runner and racing games, card games and original titles.

Netflix acquired three existing game studios — Boss Fight Entertainment, Night School Studio (Oxenfree) and Finland’s Next Games. It has also started a new studio in Helsinki, Finland with a former Zynga GM at the head.

Right now, Netflix’s business model for games is quite simple. If you are a Netflix subscriber, you can download and play all games in the Netflix game library. If you stop your Netflix subscription, you can’t access those games anymore.

There are no in-app purchases, season passes or add-on subscriptions in those games. Of course, Netflix could change its gaming revenue strategy with its new AAA game. But it’s clear that Netflix is in investment mode for now.

Netflix is working on ‘brand-new AAA PC game’ based on job listings by Romain Dillet originally published on TechCrunch

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