Month: January 2023

Area 120, the Google in-house incubator responsible for products such as Checks, Tables, Stack and ThreadBite, has been significantly affected by broader layoffs at Google parent company Alphabet. A spokesperson tells TechCrunch via email that the majority of the Area 120 team has been “winded down,” and that only three projects from the division will graduate later this year into core Google product areas.

The spokesperson wouldn’t say which specific projects were being shuttered or graduating. Previously, Area 120 was incubating pilots like the workplace video platform ThreadIt, spectrum marketplaceOrion,document scanner Stack, and more. At any given time, it usually had around 20 projects underway, though not all of them were made public.

“Employees in the U.S. who were affected have been notified [of layoffs at Area 120], but in other countries this process will take longer, and is subject to local laws and practices,” the spokesperson added. “Our managing partner of Area 120 remains at the company.”

Area 120 was created by Alphabet and Google CEO Sundar Pichai in March 2016 with the goal of creating experimental apps and services that could be later folded into established profit drivers.Over the years, the division has launched a number of successful products including the HTML5 gaming platform GameSnacks (now integrated with Google Chrome), AI-powered conversational ads platformAdLingo (which exited to Google Cloud), and video platforms TangiandShoploop (which exited to Google Search and Shopping).

Area 120 underwent a reorg in 2021 that saw the group moved into a new Google Labs division led by Clay Bavor, where it lived alongside other forward-looking efforts at Google having to do with augmented reality, virtual reality and videoconferencing. Then came cuts. Last September, Google canceled half the projects at Area 120 and majorly reduced the program’s staffing.

A source previously told TechCrunch that Area 120 had under 100 employees after the previous round of cuts. Google declined to confirm the number.

Area 120, Google’s in-house incubator, severely impacted by Alphabet mass layoffs by Kyle Wiggers originally published on TechCrunch

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Happy Friday! Join us in wishing Lorenzo a very warm welcome to the team! He’s joining our crack team of cybersecurity reporters, working alongside Zack and Carly. He just published his first article on TC, about T-Mobile reporting a hacker accessed personal data of 37 million customers. Welcome aboard!!

Enjoy your weekend! — Christine and Haje

The TechCrunch Top 3

Alphabet spells out layoffs: With all that talk about tech layoffs in the past couple months, it was only a matter of time before we saw something from Google’s parent, Alphabet. The search engine giant announced it was cutting 6% of its workforce, which impacts 12,000 people. And like the others, CEO Sundar Pichai took his turn explaining how the company “hired for a different economic reality,” Paul writes.
Game off: With gaming being as popular as it is, this next layoff story is a bit of a surprise, though not totally unexpected since media companies are being hit hard. Entertainment company Fandom, which publishes content under Giant Bomb, GameSpot and Metacritic, laid off roughly 10% of its staff across those publications, Ivan reports.
It’s all about the money, money, money: Social media influencers in India have to disclose promotional content, aka paid promotions, to the government, and now the Department of Consumer Affairs has released some guidelines on how to do that. Jagmeet has more.

Startups and VC

A $32 million seed round for Chris DeWolfe’s newest gaming company may seem like a throwback to frothier times, like … 2021. But that’s how much PLAI Labs just raised in a deal led by Andreessen Horowitz (a16z), reports Connie. She points out that that’s a lot of moolah in a volatile market, even coming as it does from two separate a16z funds: the firm’s $600 million debut games vehicle and its $4.5 billion crypto fund, both of which were announced last May.

Here’s another handful for ya:

Brush yourself off and try again: Jacquelyn reports that Coinbase and others back Brett Harrison’s (FTX U.S.’s ex-president’s) crypto trading infra startup Architect.
Stacking startups until they are unicorns: Mike explores a new kind of PE fund, which plans to roll up German startups into potential unicorns and bigger exits.
These photos are garbage: Haje reports that GoodOnes raises $3.5 million to help make sense of your mess of a camera roll.
Yeah, that tips into the absurd: Grazzy wants to stop letting people use “no cash” as an excuse to avoid tipping, reports Christine.
Slower food: Manish reports that Indian food delivery giant Swiggy is about to cut 380 jobs.

4 investors discuss the next big wave for alternative seafood startups

There’s a lot of hype around plant-based burgers and nuggets, but alternative seafood products are attracting more attention — and funding — from investors these days.

“More than $178 million was pumped into alternative seafood in the first half of 2022, and the market’s value is poised to reach $1.6 billion over the next 10 years,” she reports.

To learn more about this maturing space, Christine Hall surveyed four investors to get their thoughts on regulation, the “unique challenges” companies face as they try to reach scale, and how they’re approaching growth and risk:

Kate Danaher, managing director of ocean and seafood, S2G Ventures
Friederike Grosse-Holz, director, Blue Horizon
Christian Lim, managing director, SWEN Capital Partners’ Blue Ocean
Amy Novogratz, co-founder and managing partner, Aqua Spark

Three more from the TC+ team:

Developing startups: Why international DFIs are looking to African startups to scale impact investing efforts, by Annie.
A summary of what we’ve done: TechCrunch+ roundup: 2023 unicorn slump, global VC slowdown, email marketing 101, by Walter.
What’s your bias, A’s: 4 questions to ask when evaluating AI prototypes for bias, by Veronica Torres.

TechCrunch+ is our membership program that helps founders and startup teams get ahead of the pack. You can sign up here. Use code “DC” for a 15% discount on an annual subscription!

Big Tech Inc.

Okay, no more layoff talk. We are going to have some fun, because it’s Friday, damn it!

Are you still playing Wordle? Or perhaps you switched to its clone Quordle. Well, Quordle was acquired by Merriam-Webster, Paul reports. If you’ve never tried it, Quordle is similar to the basic Wordle concept, guessing a word in a certain amount of tries, except there are four five-letter words to guess at once, with just nine tries. It might be just the thing to warm you up on a cold winter’s night.

Here’s four more for your Friday enjoyment:

Your turn: Amanda writes that after weeks of backlash and protest from content creators and fans, Dungeons & Dragons’ publisher made a decision to put the game under a Creative Commons license.
An abrupt goodbye: After recently cutting off third-party clients, including Tweetbot and Twitterific, Twitter went ahead and officially banned them, Kyle writes.
ICYMI: Netflix founder Reed Hastings stepped down as co-CEO but will remain on the board, Taylor writes. Meanwhile, Netflix is eyeing free streaming “FAST” channels as a possibility to grow its ads business, Lauren reports.
Up, up, and away: As Darrell writes, Canada is getting up off the sidelines and joining the space race, saying it wants to support commercial space launches.

Daily Crunch: Alphabet CEO lays off 12,000 people, says company ‘hired for a different economic reality’ by Christine Hall originally published on TechCrunch

Welcome back to the TechCrunch Podcast. This week Amanda Silberling is here to talk about how Dungeons and Dragons creators are fighting to keep their livelihoods and Rebecca Bellan comes on to talk about how a tweet has gotten Elon Musk into legal trouble…again. And as always, we break down the biggest stories in tech.

Articles from the episode:

Dungeons & Dragons content creators are fighting to protect their livelihoods
Musk stands to lose billions in trial over ‘funding secured’ tweet

More from TechCrunch

Discord acquires Gas, a compliments-based social media app for teens
Norton LifeLock says thousands of customer accounts breached
Amazon fined by regulators for unsafe warehouse work conditions
Boston Dynamics’ latest Atlas video demos a robot that can run, jump and now grab and throw

Court to decide if Elon Musk is careless or criminal and other TC news by Darrell Etherington originally published on TechCrunch

Many of us would feel better if we ate better. But for patients with chronic diseases, the issue is more pressing: Fixing their diet is often key to keeping their condition under control.

According to the CDC, six in 10 adults in the U.S. have a chronic disease such as diabetes or heart conditions. Millions of these could benefit from professional nutrition guidance but don’t always have the time or means to seek care.

Enter Nourish, a U.S. startup that connects users with a registered dietitian (RD) via telehealth and helps them get their consultations covered by health insurance.

Telehealth is part of the appeal, both for patients and for nutritionists, but the RD qualification is an important point too.

“All registered dietitians are nutritionists — but not all nutritionists are registered dietitians,” the Academy of Nutrition and Dietetics warns. Unless you seek an RD or RDN (registered dietitian nutritionist), you won’t be sure that your nutritionist is properly qualified for the job — and your insurance will not cover it.

Insurance coverage is a big part of Nourish’s value add. The startup’s CEO, Aidan Dewar, told TechCrunch that “94% of our patients are fully covered by insurance and pay nothing out of pocket. Most of the rest just have a small co-pay.”

That’s because since 2002, medical nutrition therapy has fallen under the scope of Medicare under certain criteria, a move that led major private insurers to follow suit.

On paper, qualified patients who are aware of this could get reimbursed after seeing an outpatient RD, whether online or off. But as often with healthcare in the U.S., the process is cumbersome for practitioners, and many end up not accepting insurance.

In contrast, Nourish’s RDs are employed by the company, which took care of closing partnerships with Medicare and major U.S. healthcare companies Aetna, BCBS, Cigna, Humana and United Healthcare in exchange for a fee.

Nourish currently employs 50 RDs but has a waitlist of over 400 RDs interested in joining its team, Dewar said. Having launched in November 2021, the startup is pacing itself but already reports “millions in revenue” from “thousands of patients seeing dietitians each month.” And by the end of the year, it plans to employ 200 RDs and grow its non-RD team from 18 to around 30.

Nourish’s growth plans will be funded by a recent $8 million seed round that brought its total funding to $9.3 million. Led by Thrive Capital, it had participation from Susa Ventures, Operator Partners, Box Group and Y Combinator, whose accelerator the startup graduated from in 2021.

Dewar also highlighted that several of Nourish’s angel investors built exciting healthcare companies, such as Alto Pharmacy (Jamie Karraker), Headway (Andrew Adams), Rightway Healthcare (Jordan Feldman) and Spring Health (April Koh).

“Nutrition has largely been excluded from the healthcare system, despite its importance and connection to people’s health. We love that Nourish is changing that by bringing consumers, registered dietitians, and insurance companies together to build a more affordable and complete nutrition program,” Thrive Capital general partner Kareem Zaki said.

Expanding nutrition therapy

Nourish has big goals: By helping people to eat well, the startup is hoping to contribute to solving the American healthcare crisis. “More than half of Americans have a chronic condition related to what they eat, which has contributed to healthcare costs going up and quality-adjusted life expectancy going down,” its founders said.

Dewar and Nourish COO Sam Perkins are childhood friends and landed on Nourish’s mission after struggling with chronic conditions themselves (migraines and irritable bowel syndrome). After experiencing the positive impact of nutritional care, they co-founded their startup together with CTO Stephanie Liu, who had become close friends with Perkins at Princeton.

The founders knew firsthand that working with a dietitian was a long-term process, but this vision is also reinforced by the startup’s chief clinical officer, Adrien Paczosa. “We focus on a long-term, sustainable approach — truly a lifestyle change,” she said. “We will never put you on a fad diet that is impossible to maintain, tell you to only eat salad for every meal, make you track everything you eat, or give you some generic, one-size-fits-all meal plan.”

Because of this approach, the startup doesn’t see itself as directly competing with weight loss apps. However, it plans to use its seed round to launch an app of its own by the end of the quarter, but with different goals in mind.

“The mobile app will augment the core experience of seeing your dietitian, with features including high-quality nutrition content and resources, clinical outcome tracking, and features that help you acquire the food such as integrated grocery delivery (so your RD can prescribe you food in the same way an MD can prescribe medicine),” Nourish explained.

The app’s goal is to make sure that patients are achieving the desired outcomes. Indeed, Nourish has two priorities in 2023: growth and outcomes. This road map has to do with how Dewar and his team define success. “It’s [both] about how many people we help and how much we help them.”

There’s still plenty of room for Nourish to grow on both fronts: The vast majority of chronic illness patients who could benefit from seeing an RD currently don’t, and even when they do, eating well remains a struggle. Will an app help make their journey easier? Only time will tell.

With a focus on patients with chronic illness, Nourish hopes to help Americans eat better by Anna Heim originally published on TechCrunch

Thoma Bravo, the private equity and growth capital firm, today announced that it would spend $1.8 billion CAD (~$1.34 billion) to acquire Magnet Forensics, a Waterloo-based company making software used by defense forces and businesses to investigate cybersecurity threats.

Magnet Forensics will be purchased by a newly created corporation controlled by Thoma Bravo, Morpheus Purchaser Inc., which will pay Magnet Forensics shareholders a 15% premium over Thursday’s closing price on the Toronto Stock Exchange. Post-buy, Morpheus will be merged with mobile device forensics outfit Grayshift, which Thoma Bravo acquired majority control of last July.

The transaction is expected to close by Q2 2023, subject to shareholder and other customary approvals.

“We look forward to bringing together the complementary capabilities of Magnet and Grayshift to create a leader in the digital forensics and cyber security space,,” Thoma Bravo partner Hudson Smith said in a press release. “Digital evidence is an increasingly critical aspect of investigations and the combined company will be well-positioned to further market expansion, accelerate innovation and provide even greater solutions to its customers.”

Launched in 2010, Magnet Forensics develops digital investigation software that acquires, analyzes, reports on and manages evidence from computers, mobile devices, internet of things devices and cloud services. The company was founded by Jad Saliba, a Waterloo regional police constable who worked in the police force’s high-tech crimes unit. After incubating Magnet Forensics’ software at the unit, Saliba decided to strike out on his own and sell the tech for a licensing fee, partnering with Jim Balsillie and Adam Belsher, then BlackBerry executives.

Before going public, Magnet Forensics attracted an investment from In-Q-Tel, the nonprofit venture arm of the U.S. intelligence community. The company claims that its software is used by more than 4,000 public and private sector customers — e.g. police forces, intelligence agencies, tax officials, border guards, and militaries — in over 100 countries, helping investigators protect assets and guard national security.

Business was booming prior to the acquisition (granted, Thoma Bravo first submitted a proposal early last October). During its Q3 2022 earnings call, Magnet Forensics reported that annual recurring revenue increased 50% year-over-year to reach $80.9 million while EBITDA — earnings before interest, taxes, depreciation and amortization — climbed 25% to $5.9 million.

Magnet benefitted from the expanding market for digital forensics, which is expected to grow from $5.8 billion in 2022 to $10.9 billion in 2028, according to a recent Imarc report.

Adam Belsher, who serves as Grayshift’s CEO, says that the combination of Grayshift’s mobile access and extraction capabilities and Magnet’s digital investigation suite will position the merged firms strongly — allowing customers to better extract, process, examine, collaborate on and manage digital forensic evidence.

“We believe the combination of Magnet and Grayshift will unlock tremendous value for our customers by further integrating and expanding our product suite which will result in more seamless workflows in the recovery and analysis of critical digital evidence to investigations and ultimately contribute to our shared mission of the pursuit of justice,” Belsher said in a statement. “We look forward to partnering with Thoma Bravo and Grayshift to build upon our digital investigation suite to further innovate and continue to serve a growing number of organizations and use cases.”

For Thoma Bravo, which now has an estimated over $114 billion in assets under management, Magnet Forensics is the latest in a series of high-profile software venture purchases. In 2022, the firm spent billions of dollars buying cybersecurity startups Ping Identity, Sailpoint, ForgeRock, Bottomline Technologies and Coupa Software.

Thoma Bravo agrees to acquire digital forensics firm Magnet Forensics for over $1B by Kyle Wiggers originally published on TechCrunch

People can never land on a word to explain what is happening to women and minorities within venture. Are such founders overlooked or undersought? Underestimated and underrepresented? Marginalized? Discriminated against? Or just ignored?

The excuses used to justify these sobriquets are equally scattered. Women received just 1.9% of all venture capital funds last year because they are only building beauty and wellness companies; there is a lack of a proven track record; it’s too early, they are too risky, and there is a pipeline problem. Maybe she’ll get married, have a family, and leave the business behind.

And Black founders raised 1% of venture funds because there aren’t enough of them pitching; they are a minority of the population and thus deserve a minority of the funds; their products and markets tap into something only their community can relate toward; there isn’t enough traction, they aren’t qualified; or, as one Twitter user wrote, they aren’t “male, pale and from Yale.”

Ah, yes, this explains it all. Women are too emotional to run companies. One female founder told TechCrunch she heard an investor say he wouldn’t invest in a women-founded company because “she was annoying.”

Men, on the other hand, are not annoying. They are competent and qualified, and, as we all well know, sexism and racial discrimination went poof after the civil rights and third-wave feminism movements. Since then, decisions toward people of color and women have been based purely on quantitative and provable facts. Obviously.

Indeed, investors’ fact-based due diligence often leaves out that women-founded companies have higher returns than male-founded ones. The rest of the data regarding bias in the venture industry is so nebulous that it’s hard to call much of it out. Without transparency, it’s difficult to determine exactly how many people of color and women are pitching, thus making it hard to assess how disproportionate funding to these groups truly is. There is a way, though, to pick apart some common misconceptions.

For one, women (especially Black women) are more likely to start a business than men (and continue to open companies in increasing amounts), meaning the idea that there aren’t enough women to invest in is simply untrue.

Debunking the myths of why venture investors don’t fund diverse startups by Dominic-Madori Davis originally published on TechCrunch