Month: December 2022

Prior to launching as a startup in 2005, Box began as an idea that co-founder and CEO Aaron Levie had for a marketing class — to bring the power of the internet to file-sharing. The concept may not feel revolutionary today, but back then, you could email a file if it was small enough, or you could put it on a thumb drive and physically deliver it to the recipient. Other options were limited.

It’s hard to believe now, but the original academic idea grew into a startup, and later a way to take on the entrenched enterprise content management industry.

Box, which began so modestly, reported an even $250 million in revenue for the most recent quarter, the third quarter of its fiscal 2023, putting it on a $1 billion run rate for the first time. (Notably, we were told back in 2014 or so by venture capitalist Jason Lemkin that Box would reach the $1 billion run rate figure one day; he also predicted that it wouldn’t be easy. Two points, Lemkin.)

“We’re really proud of the fact that this is our first billion-dollar revenue run rate quarter, so we can now say that we’ve crossed that billion revenue threshold, which is super exciting,” Levie told TechCrunch.

Revenue was up 12% in the quarter compared to last year, more modest growth than Box has posted in recent quarters. What contributed to the slowdown? Levie said growth was affected by the strong U.S. dollar, which is impacting many companies right now. Measured using older currency exchange rates (“constant currency,” in corporate speak), Box’s growth would have been 17%, much more in line with recent reports.

“It’s pretty material actually, and the way we talk about it is that previously if we’d sold the deal for $1, we’re getting 80 cents now on that deal. So that’s a material headwind,” he said.

But in spite of the economic challenges that everyone is facing right now, Box is taking advantage of the need for customers to work remotely, or at least spend significantly less time away from a conventional office, and Levie said his company’s solutions have become mission-critical for customers.

“I think we’re being very strategic. I think the way companies manage content is very strategic, and so I think that puts us in a good position relative to other software companies because of that value proposition,” he said.

While he doesn’t have a crystal ball to see what budgets will look like moving forward, he does believe that Box remains in a strong position. The company seems to be looking at emphasizing profitability over growth, something that should please Wall Street investors right now. How did that translate into this quarter’s numbers? Let’s have a look.

Box reaches $1B run rate in spite of a quarter dogged by currency challenges by Ron Miller originally published on TechCrunch

Hello and welcome back toEquity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

For the last time in 2022, the whole Friday gang got together to chat through the latest and greatest in the world of technology and startup news. From here on out, Equity is heading into Holiday Mode. We have a regular Monday show for you next week, but past that we have a string of kick-butt end-of-year episodes planned for you. Onward!

And for those of you who just wanted the show notes, here you are:

ResortPass raises money.Mary Ann explains the business model.
Post.News raises money. Alex digs into what he likes and doesn’t like about the new Twitter competitor.
SBF wants you to know he had no idea what was going on. We are not so sure.
Venture red flags are great in hindsight, but would have been more useful last year.
Layoffs at DoorDash and Kraken are a reminder that we’re still in a risk-off environment when it comes to tech spending today.
Plus, the latest regarding Pipe, and Alex’s notes on Series A and C rounds.

Equity is not done for the year, but we are settling into our final 2022 groove. This is Alex writing this, and I wanted to take the moment to thank you for sticking around with us this year. Really. I think we broke a bunch of records in terms of downloads and the like. Wild that the show just keeps getting bigger. Hugs.

Are we bullfighting in Spain? Because that’s a red flag by Natasha Mascarenhas originally published on TechCrunch

Carousell, a Singaporean consumer-to-consumer (C2C) service platform operating across Southeast Asia, is letting go of about 110 employees, or 10% of its total headcount, in an effort to reduce costs amid a challenging market condition for the tech industry.

The announcement came from the company’s blog on Thursday, posted by co-founder and CEO of Carousell Siu Rui Quek, saying, “I take responsibility for the decisions that have led us here. Parting with teammates, whom we are grateful to for joining us on this mission, is a very difficult decision.”

Carousell did not specify which business units or regional offices would be affected by the layoffs. The Singapore-headquartered company operates in Malaysia, Indonesia, the Philippines, Cambodia, Taiwan, Hong Kong, Macau, Australia, New Zealand and Canada.

In the statement, the company’s leaders had discussed finding ways, including moving to an inexpensive rental office and slashing co-founders and executives’ salaries voluntarily to save budgets without cutting staff. But that was “far from enough,” it said.

Quek also explained in the blog post that he “was too optimistic” about the recovery from the Covid pandemic and even doubled down on recruitment and investment for its business. “The reality is that we were quick to grow our expenses and hire, but the returns took longer than expected,” Quek wrote. “It is important to act swiftly, course correct, and right size our investment levels to better align with this new reality.”

The affected workers will receive at least three months’ salary and be able to extend their medical benefits and insurance coverage through June next year. According to the statement, the company will also pay out all remaining time off balances and offer career counseling and job search support, letting those laid-off workers keep their office laptop and LinkedIn Learning membership until June 2023.

Founded in 2012, Carousell, backed by Sequoia Capital India, Naver, 500 Global, and Rakuten Capital, has raised a total of $372.6 million since its inception,per Crunchbase.

Singapore-based e-commerce platform Carousell lays off 10% of staff by Kate Park originally published on TechCrunch

If you have been on Twitter in the last few days, you likely noticed a deluge of screenshots from a service called ChatGPT. From the OpenAI group, ChatGPT is a conversational tool that allows you to provide the system with prompts that it responds to in written format.

(You can make a free OpenAI account and give the service a shake yourself. Just don’t identify as a journalist during the onboarding process — you’ll get jammed up. Self-describe in a different manner and you can get right in.)

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

TechCrunch has been busy covering OpenAI lately, with our own Darrell Etherington writing this morning about ChatGPT and how it is “quickly becoming apparent that how a user interfaces with generative models and systems is at least as important as the underlying training and inference technology.” We also have eyes on new generations of the well-known, and well-liked, GPT-3 AI writing tool.

That there is excitement among founders and venture investors in generative AI services like what OpenAI is building is well-known. Hell, it’s been a minute since Copy.AI showed that leveraging AI writing tools could build eight-figure ARR startups. Others are chasing similar magic, and the technology continues to improve. Hence all the screenshots.

Naturally, I had to see if I was in near-term employment trouble. So I ran a little test with the ChatGPT model this morning. The results are below.

Let’s have some fun

First, a reminder that using computers to generate text is not new, and this is not the first time that I have stared down the barrel of a new tech tool that could, in theory, be coming for my job. Back in 2014, responding to news that the AP was planning on using some automated tech to report on corporate earnings, I wrote the following:

ChatGPT isn’t putting me out of a job yet, but it’s very good fun by Alex Wilhelm originally published on TechCrunch

The Cuba ransomware gang extorted more than $60 million in ransom payments from victims between December 2021 and August 2022, a joint advisory from CISA and the FBI has warned.

The latest advisory is a follow-up to a flash alert released by the FBI in December 2021, which revealed that the gang had earned close to $44 million in ransom payments after attacks on more than 49 entities in five critical infrastructure sectors in the United States. Since, the Cuba ransomware gang has brought in an additional $60 million from attacks against 100 organizations globally, almost half of the $145 million it demanded in ransom payments from these victims.

“Since the release of the December 2021 FBI Flash, the number of U.S. entities compromised by Cuba ransomware has doubled, with ransoms demanded and paid on the increase,” the two federal agencies said on Thursday.

Cuba ransomware actors, which have been active since 2019, continue to target U.S. entities in critical infrastructure, including financial services, government facilities, healthcare and public health, critical manufacturing, and information technology.

In August this year, the gang was linked to a ransomware attack targeting the nation state of Montenegrothat targeted government systems and other critical infrastructure and utilities, including electricity, water systems, and transportation. At the time of the attack, the Cuba ransomware gang claimed it had obtained “financial documents, correspondence with bank employees, account movements, balance sheets, tax documents, compensation [and] source code” from Montenegro’s parliament.

Cuba was also linked to a breach of California’s Department of Motor Vehicles in April this year, which saw the attackers compromise California vehicle registration records that contain names, addresses, license plate numbers, and vehicle identification numbers.

FBI and CISA added that the ransomware gang has modified its tactics, techniques, and procedures since the start of the year and has been linked to the RomCom malware, a custom remote access trojan for command and control, and the Industrial Spy ransomware.

The advisory notes that the group — which cybersecurity company Profero previously linked to Russian-speaking hackers — typically extorts victims by threatening to leak stolen data. While this data was typically leaked on Cuba’s dark web leak site, it began selling stolen data on Industrial Spy’s online market in May this year.

CISA and the FBI are urging at-risk organizations to prioritize patching known exploited vulnerabilities, to train employees to spot and report phishing attacks and to enable and enforce phishing-resistantmulti-factor authentication.

The release of CISA and the FBI’s advisory comes as the Cuba ransomware gang continues to list new victims on its website. The most recent additions include Generator Power, a U.K.-based generator hire company, and German media monitoring firm Landau Media.

FBI, CISA say Cuba ransomware gang extorted $60M from victims this year by Carly Page originally published on TechCrunch

Just four days stand between you and a deep space exploratory mission right here on planet Earth. We’re talking about TechCrunch Sessions: Space, of course, which lifts off on December 6 in Los Angeles. There’s still time to join, learn from and network with the leading minds and makers building the new space economy.

Get on board: Buy your pass today, and then explore all the space tech opportunities in L.A.

Check out the conference agenda for the full list of interviews, panel discussions, fireside chats and breakouts. Right now, though, we want to highlight a session led by one of our partners. We’ve said it before, but it bears repeating:

TechCrunch partner companies do more than cut a check. They bring expertise, relevant content and resources that help early-stage founders increase their knowledge, skills and opportunities.

Here’s a fine example. Shahir Gerges, the director of business strategy at Orbital Reef, Blue Origin, will lead a session called “Growing the LEO Economy on Orbital Reef.” As we look to commercial successors to the International Space Station, we see new market opportunities emerging on low Earth orbit (LEO) destinations.

Learn more about how Orbital Reef, a commercial LEO destination ecosystem, is creating new opportunities in space and helping startups accelerate their businesses through Reef Starter, Orbital Reef’s newest initiative to lower barriers of entry to space for early-stage companies.

You’ll also hear about the first set of startups to win the Reef Starter Innovation Challenge and learn how to get involved in the future. We reckon this is a discussion you won’t want to miss.

Shahir Gerges serves as the director of business strategy for Orbital Reef, within Blue Origin. Orbital Reef is projected to be serving as a mixed-use space station in LEO for commerce, research and tourism by the end of this decade. Focused on long-term financial sustainability for Orbital Reef, Gerges develops new offerings to cultivate growth in new and emerging markets that would benefit from the on-orbit environment, including microgravity.

Before joining Blue Origin, Gerges worked as a strategy consultant at PricewaterhouseCoopers, where he advised industrial companies (including aerospace and defense) on market strategy decisions, internal operations strategy and multiple-deal due diligence. Gerges started his career at United Launch Alliance working in various engineering and strategy roles, as well as supporting government affairs.

Gerges holds a bachelor’s degree in aerospace engineering from Illinois Institute of Technology and an MBA from Georgetown University.

TC Sessions: Space takes place on December 6 in Los Angeles. Buy your pass today, and join us to learn about the latest space economy trends, see cutting-edge technology and network for opportunities to help you build a better, stronger startup.

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

Learn about Orbital Reef and the LEO economy at TC Sessions: Space by Lauren Simonds originally published on TechCrunch

Smoodi wants to see its smoothies in the hands of, well, everyone, and a new infusion of capital and distribution partnership has the startup well on its way.

Incubated out of Harvard’s Innovation Lab in 2018, CEO Pascal Kriesche and Morgan Abraham call their company a “healthy smoothie store-in-a-box” that is essentially a robot that mixes fruits, vegetables and add-ins like protein into a smoothie.

Robot food and cooking machines aren’t new… remember Chowbotics and Miso? However, Kriesche touts in an email interview that smoodi’s beverage vending machine not only self-cleans, it is also not the traditional “black box,” but is transparent so that customers can watch the frozen ingredients travel through the blending process and even watch the machine clean itself.

Smoodis range in price from $5.99 to $7.99 and come in flavors like Brain Boost, which is banana and berries; Green Energizer, made of spinach, banana, matcha and mango; and Tropical Vibes, which includes pineapple, mango and coconut.

Since its commercial market launch in 2021, smoodi grew its revenue by 25% monthly and had zero churn, with some convenience store chains asking for additional deployments following the initial pilot, Kriesche said. He forecasts 5x growth for 2023.

“This is a testament to our valued customer base who have recognized the shifting market trend in consumer’s demand for a healthy and delicious product,” he said. “The smoothie market has doubled over the last five years, and the trends for fresh, healthy and vegan are only accelerating.”

Leading the new $5 million Series A investment is a group formed by Keith Canning, a former distributor. Joining him were FCP Ventures, UnderscoreVC, Allston Venture Fund, WSPR Fund, Phoenix Club and a group of angel investors, including the former Nespresso president Frédéric Levy and Blue Rhino founder Billy Prim.

Kriesche and Abraham are deploying the new capital into scaling smoodi nationwide. That has so far included adding to the executive team with a chief revenue officer and chief operating officer, as well as regional managers, and scaling up production capacity of both equipment and consumables and go-to-market. The company’s production capacity is already at 200 units per month, and Kriesche expects consumables to grow 10x in the next six to nine months.

Smoodi is already in convenience stores, offices, restaurants and other retailers, but along with the investment, the company has a new partnership with food distributing giant Dot Foods.

Not only will this move help smoodi expand beyond convenience stores, but Dot Foods will eventually take over smoodi’s equipment distribution and enable the company to launch in new sites across North America in two days versus the three weeks it currently takes, Kriesche said.

Next up in 2023, the company plans to introduce new flavors, continue R&D on its machine to automate its drink booster dispensing and will test smoodi in Europe.

“We plan to get into thousands of locations through Dot Foods in the next 24 months and many more thereafter,” Kriesche added. “The biggest challenge in scaling a business like ours has always been the frozen supply chain. With Dot Foods, we have a partner that excels at that and has the best coverage in the food industry.”

Smoodi closes $5M to expand reach for its robotic smart blender by Christine Hall originally published on TechCrunch